House of Lords

Tuesday 9th October 2012 Lords Chamber

Tuesday, 9 October 2012.

14:30

Prayers—read by the Lord Bishop of Derby.

House of Lords: Appointments

Tuesday 9th October 2012 Lords Chamber

Question

14:36

Asked By

[Lord Hunt of Kings Heath]

To ask Her Majesty’s Government whether further appointments to the House of Lords are expected to be made during the remainder of the current Parliament.

[Lord Wallace of Saltaire]

My Lords, any appointments will continue to be made in line with the commitment in the coalition programme for government to reflect the share of the votes secured by the political parties at the most recent general election.

[Lord Hunt of Kings Heath]

My Lords, yesterday the Leader of the House, the noble Lord, Lord Strathclyde, made it clear that, regrettably, he and the Government will not support the Bill of the noble Lord, Lord Steel, in the other place. Given that, and given the size of this House, is the Minister really saying that the Government are determined to make dozens more appointments, to increase the size of the House and to shore up the political majority of the Government? Surely not.

[Lord Wallace of Saltaire]

My Lords, the idea that we are packing the House with coalition Peers is a little idiotic. Of the 122 appointments made since May 2010, nearly one-third, 39, have been Labour Peers. That is not packing the House on one side. The largest group in the House remains the Labour Benches.

One of the ways in which we wish to maintain a vibrant House is to refresh the House from time to time. The committee on retirement has proposed that the statutory retirement scheme is now available. We regret that only two Peers have so far availed themselves of it. However, 20% of this House is now over 80 and, as we know that life expectancy in this House is very good, we encourage others to consider that scheme.

[Lord Forsyth of Drumlean]

My Lords, how will my noble friend explain to the voters of this country the Government’s policy to reduce the size of the House of Commons in order to save public money when they are now proposing to increase the size of the House of Lords at public expense, having previously brought forward a Bill arguing the importance of reducing it?

[Lord Wallace of Saltaire]

My Lords, the Government are not proposing to increase the size of this House. Sadly, we have lost 40 Members since May 2010; I dare say that, sadly, we may lose more over the next two years. The question of refreshing the House from time to time therefore arises.

[Lord Grocott]

The Minister’s Leader, the Deputy Prime Minister, has repeatedly said—and I agree with him, which surprises me—that the House of Lords, the Second Chamber, is too big. How can it be that I agree with the Minister’s Leader while he disagrees with him? Can he explain to us why he disagrees with the Deputy Prime Minister?

[Lord Wallace of Saltaire]

I am very glad to hear that the noble Lord agrees with Nick. We in this House have to be very careful about saying, “We’re all very comfortable here and we all want to stay, and no one else should be allowed to come in until there has been a longer process”. Over a five-year period we need to consider the balance of the House and the question of the occasional refreshment of its Members, and we are certainly not going to close our minds to that in an interim House. We will certainly encourage some of the older Members to consider statutory retirement or a long-term leave of absence.

[Lord Tyler]

My Lords, to avoid understandable suspicion, and indeed accusations, of personal self-interest, would it not be wise for the Government to give a lead and say that, as far as Ministers are concerned, no MPs who voted against the Government’s reform Bill should be nominated to this House?

[Lord Wallace of Saltaire]

I do not think that I ought to answer that question. I am very conscious that there are those who, in the Corridors of this House, have said to me, among others, that those who are asked to leave the House should be compensated for doing so. To that I would say that membership of this House is a privilege, not a right, and the idea that one has to be bought out before one leaves is not one that should be considered.

[Baroness Hayman]

Will the Minister now answer a question about which the Government have been reticent? To which of the political parties contesting the last general election does the coalition commitment that he has reaffirmed today apply?

[Lord Wallace of Saltaire]

My Lords, over lunch I made a calculation which, even though I was unable to find a calculator, I hope was correct. If one were to be strictly accurate, the Labour Party as represented in this House is roughly in tune with the percentage that it received in the last election. The noble Lord, Lord Pearson of Rannoch, is as good as 10 people. The most underrepresented group, as the noble Baroness, Lady Hayman, knows, is of course the Liberal Democrats.

[Lord Cormack]

My Lords, if the Government take this House and Parliament seriously, how can they continue to refuse to contemplate reforms along the lines of those included in the Bill introduced by the noble Lord, Lord Steel? My noble friend has referred to this as an interim House. Some believe that it can be a permanent House, giving permanent value to our constitution. The Government are flying in the face of that fact.

[Lord Wallace of Saltaire]

My Lords, the consensus in this House is not the only factor which has to be taken into consideration. The House of Commons voted by a substantial majority in favour of the principle of an elected second chamber. All three parties had the principle of an elected second chamber in their manifestos in the last election and the coalition programme stated that we will establish a committee to bring forward proposals for a wholly or mainly elected upper chamber on the basis of proportional representation. We want to achieve a consensus. I am looking at the noble Lord, Lord Richard, who has laboured very hard to achieve a consensus on reforms. That is clearly the only long-term way forward.

[Lord Richard]

My Lords, the noble Lord said that I tried very hard to get this House and everybody to agree that it should be an elected second chamber. Of course I did. But if the Government have decided that they are not going to go for an elected second chamber, they really must look at the size of this House. You cannot just leave it on the basis that it is going to creep up to nearly 1,000 and then pretend that somehow or other the Bill introduced by the noble Lord, Lord Steel, will rectify it. It will not. If the Government have any sense—I am not sure that they do on this issue—they should now commit themselves actively to pursuing policies whereby the size of this House can be reduced.

[Lord Wallace of Saltaire]

I would welcome proposals from noble Lords as to how we achieve that. I have mentioned already the voluntary retirement scheme. Let us discuss off the Floor of the House the possible acceptability of a maximum age.

[Lord Steel of Aikwood]

My Lords—

[Lord Scott of Foscote]

My Lords—

[Noble Lords]

Steel!

[Lord Scott of Foscote]

I am grateful to the noble Lord. Does it remain the Government’s intention that when members of the Supreme Court retire, those who are not already Members of this House will be invited to become Members of this House?

[Lord Wallace of Saltaire]

My Lords, those Supreme Court judges who were Members of this House before the Supreme Court was separated from it are currently on leave of absence. I am not aware that the Government have any definite position on what will happen to those appointed to the Supreme Court since it was separated from this House.

The Steel Bill has clearly now become extremely popular with a number of Members of this House. I am not entirely sure whether it is the emasculated Steel Bill which people wish to promote or the original Steel Bill. I have worked through several efforts to get the Steel Bill through the House, but it has not received much welcome in particular from a number of hereditary Peers.

Parliamentary Constituency Boundaries: Review

Tuesday 9th October 2012 Lords Chamber

Question

14:45

Asked By

[Lord Touhig]

To ask Her Majesty’s Government how much it has cost to conduct the review of parliamentary constituency boundaries in the United Kingdom.

[Lord Wallace of Saltaire]

My Lords, the four Boundary Commissions spent about £5.8 million up to the end of August 2012 on the boundary review. They expect to spend about £3.8 million from September 2012 to the end of the review.

[Lord Touhig]

I am sure that I am not alone in believing that that money would be better spent keeping disabled people, like the Remploy workers, in a job, but we are where we are. We remember that the Conservative and Lib Dem Peers were united in their enthusiasm to pass the Bill to reduce the number of parliamentary constituencies. Does the Minister expect both coalition parties to be equally united and enthusiastic to vote for the final report of the Boundary Commissions when it comes here next year? Furthermore, will the Minister be voting for it?

[Lord Wallace of Saltaire]

My Lords, we are a coalition. We have our open disagreements. I recall well the official who said to me last year that it was really rather easier working with this coalition than with the Blair/Brown coalition because we have our disagreements in the open whereas they plotted against each other. When it comes to the vote next year, we will consider our views.

[Lord Rennard]

My Lords, would the Minister agree that perhaps any further public spending would be better aimed at making sure that some of the millions of people in this country who are entitled to vote but are unable to do so because they are not on the voting register are included in those registers, so they can participate in the democracy of our country, rather than on the Boundary Commission review process, which is now clearly, simply, an academic exercise?

[Lord Wallace of Saltaire]

My Lords, we will be returning to the question of why people resist registering to vote during the Committee stage of the individual electoral registration Bill, and I commend to Members of the House the Electoral Commission study on it, which was published in June.

On how much has been spent, the previous boundaries review cost £13 million. This review was estimated to cost £11.5 million and it is now expected to cost £9 million. Much of the remaining £3.8 million has already been committed, so even if we said “stop” now, the possibility of saving very much money would be small.

[Lord Foulkes of Cumnock]

My Lords, the Deputy Prime Minister has said that Liberal MPs and Liberal Peers are going to vote against the boundary changes. Is it not crazy to continue with it? Surely, we are going to waste nearly £4 million which could be better used. Why are we going ahead with it? I understood that the new chairman of the Conservative Party said that the plan is to withdraw these proposals. Can the Minister make it clear? Are they really pressing ahead with these proposals, given that the Deputy Prime Minister has said that they are effectively dead in the water?

[Lord Wallace of Saltaire]

I am glad to see that the noble Lord reads the Daily Mail which, I think, was where the report came from. Primary legislation requires the commissions to report to Parliament before October 2013, and it would require primary legislation to stop that. It would then be for Parliament to consider the recommendations. There is precedent for Parliament voting against the acceptance of a Boundary Commission review; it was done by the Labour Government in 1969.

[Lord Kakkar]

My Lords, do Her Majesty’s Government consider that the 221 hours and 24 minutes over 35 days spent in your Lordships’ House and the other place on the Parliamentary Voting System and Constituencies Bill was a wise and mature use of precious parliamentary time, in view of the fact that the Deputy Prime Minister has suggested that Liberal Democrat Ministers and MPs will vote against the secondary legislation when it comes before this Parliament?

[Lord Wallace of Saltaire]

My Lords, I think that it would be a little brave of me to say what I thought was a useful use of the time of this Chamber or of the other Chamber and what I thought was not. I have sat through a number of debates over the last 15 years that I have felt were not useful uses of this Chamber’s time.

[Baroness Hayter of Kentish Town]

My Lords, is it not necessary that we have some certainty here? It is not just about money. There are candidates to be selected and party organisation to take place. The Prime Minister can bring certainty now by introducing primary legislation, or by making it absolutely clear that these boundary changes will not be going ahead, which will save money and enable people to get on with the existing boundaries.

[Lord Wallace of Saltaire]

My Lords, I take that point and I simply reiterate that in all matters of political and constitutional reform and order, it is much the best if we can achieve consensus among all the parties. However, we have to remember that one of the reasons why we are not proceeding with House of Lords reform is because the Labour Opposition in the House of Commons voted down the programme Motion.

Olympic and Paralympic Games 2012

Tuesday 9th October 2012 Lords Chamber

Question

14:51

Asked By

[Lord Wigley]

To ask Her Majesty’s Government what is the current estimate of the outturn cost to HM Treasury of the London 2012 Olympic and Paralympic Games.

[Viscount Younger of Leckie]

It is clear that the Olympic and Paralympic Games this summer were a great British success story. Much credit should go to all those involved in the complex planning, organisation and implementation of these events. Following the post-bid review of costs, we announced in 2007 a total public sector funding requirement of £9.3 billion. Our quarterly report in June 2012 showed that we were below budget, with £476 million remaining in uncommitted funding. We await the October report, due out soon, and there is every reason to believe that we will remain below budget, so we still expect the total outturn cost to be less than £9 billion.

[Lord Wigley]

My Lords, in wishing the Minister well with his new responsibilities, I concur with his sentiments and those expressed yesterday about the undoubted success of the Olympic and Paralympic Games in London. I congratulate all concerned, particularly the Paralympic competitors, who taught the world to maximise personal achievement, despite handicap, through their own endeavours.

As the next major international athletic competition in the UK will be the Commonwealth Games in Glasgow in 2014, will the Minister confirm that the same principle of direct Treasury financial support will be given to the Glasgow games as was given to the London Olympics? Likewise, will he confirm that, in the event of the 2026 games coming to Cardiff, they can work on the same assumption?

[Viscount Younger of Leckie]

I thank the noble Lord for that question. I do not have any details, looking ahead, of those particular events. I do not believe that we are quite at that stage. However, I will absolutely keep the noble Lord’s sentiments in mind and will return to him when I can.

[Lord Anderson of Swansea]

My Lords, the Games have meant that it has been a remarkable year, but there has been one failure. The Minister will recall the promise made at the outset of the Games that all parts of the United Kingdom would benefit from the expenditure. In fact, the regions of Wales have benefited very little indeed from this £9 billion. It has amounted in effect to a massive subsidy to London and the south-east. In what way, perhaps for the amount not spent or in other ways, will Wales, Scotland, Cornwall, the north-east and the north-west be compensated for the failure of a clear promise?

[Viscount Younger of Leckie]

I do not agree with the noble Lord’s question to the extent that I believe that the whole of the United Kingdom has benefited. I would point out that the legacy of the Olympic and Paralympic Games will not be seen for some time. I would also point out, as we have Welsh representation here today, that £38 million of business was generated from Wales. Indeed, a lot has happened throughout the United Kingdom and we should remember the thousands of sports clubs that have been set up, the school sports around the whole country and the youth sport strategy, which covers the whole country, not just London.

[Lord Addington]

My Lords, does my noble friend agree that the soft legacies of the Olympics are probably the most important and that a classic example of such legacies must be the role of the volunteers? What activity are the Government undertaking to ensure that such events as next year’s Rugby League World Cup, the Rugby Union World Cup in 2015 and the Commonwealth Games maximise and build on that model of volunteering, which has been so valuable?

[Viscount Younger of Leckie]

I am delighted that my noble friend has brought up the issue of the volunteers. They were absolutely fantastic. Noble Lords may or may not know that there were 70,000 Games makers. They were volunteers. It is fair to say that their travel within zones one to six was paid for, and I think that they managed to receive their lunch, but otherwise they very willingly and always with smiles gave of their time. In answer to my noble friend’s question, looking ahead to the rugby events that he mentioned, I do not quite know where we stand but I hope to come back to him soon with that information.

[Lord McConnell of Glenscorrodale]

My Lords, looking forward to the Commonwealth Games in 2014, are the Government aware that the new Emirates indoor arena in Glasgow is now open, including the Sir Chris Hoy velodrome? It is not only open but was delivered within a budget of £113 million and on time. It is now being used by the public two years ahead of the games. Will the Government congratulate Glasgow City Council on this achievement, wish it and the organising committee well and ensure that the work of the noble Lord, Lord Coe, on the legacy from the Olympics includes every part of the United Kingdom?

[Viscount Younger of Leckie]

I am delighted that the noble Lord has mentioned Glasgow; I come from north of the border. I wholeheartedly agree with the comments that he has made.

[Lord Deben]

Before my noble friend is led astray by those who want to complain about things or ask that they should be extended, will he repeat that this is a remarkable achievement, that it was brought in within budget—something that most people said was impossible —and that there should be very clear congratulations from this House to those who have achieved that end?

[Viscount Younger of Leckie]

I wholeheartedly agree with my noble friend. Indeed, it is a tremendous feat that we are looking as if we will come in well below budget. The House should remember that that particular budget was set as far back as 2007, although it was admittedly revised from the 2003 pre-bid. I pay tribute to LOCOG, which produced a balanced budget and did tremendously well in sponsorship. It should be congratulated wholeheartedly.

[Lord Dubs]

Does the Minister agree that among the many successes of this remarkable summer has been that of projecting the Paralympics on to the national stage in a way that has never happened before? Can we congratulate the television people—I think it was Channel 4 in this case—on giving the people in the Paralympics that enormous prominence, which I believe will change attitudes to the Paralympics for ever?

[Viscount Younger of Leckie]

I wholeheartedly agree with the noble Lord. Having watched much of the Paralympics, I was greatly moved by the events. I was also greatly impressed by the television coverage, to which the noble Lord alluded, and by the previews of all the events, not just the Paralympic ones. For example, I thought that the UK editing was outstanding. I do not think that we have ever seen that before in any other Olympic Games.

[Lord West of Spithead]

My Lords, does the Minister agree that one of the great successes of the Olympics and Paralympics was how well our military stepped into the breach and made them run well, and that they deserve immense congratulations on that? That means that the cost figures may not be exactly what they seem. The military can always provide a capability in an emergency of any kind in this country. Does the Minister agree that reducing our military by some 30,000 is a bit of a problem when one looks to the future?

[Viscount Younger of Leckie]

I take note of what the noble Lord has said. I do not want to go into the cuts element of that, but say only that I wholeheartedly agree with him that the military stepped into the breach, as it were, extremely readily, again with smiles, and that they should be wholeheartedly congratulated.

[Lord Howell of Guildford]

My Lords, I wish to reinforce what the noble Lord, Lord Wigley, has said. Will the Minister bear in mind that the Commonwealth Games in Glasgow in 2014 will be a spectacular event and a major help to this country vis-à-vis its position in the Commonwealth network, which is growing in strength at all times? The fact that one of the biggest indoor athletic stadiums in Europe has been built bang on time and well within budget is a major achievement. Will the Minister tell all his colleagues in government that it should be supported to the maximum and that the public should give all the encouragement to it that they gave to the Olympic Games?

[Viscount Younger of Leckie]

That is very much noted. I thank the noble Lord very much; he is absolutely right.

Railways: Franchises

Tuesday 9th October 2012 Lords Chamber

Question

15:00

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what is their estimate of the cost to the public purse of cancelling the contract award for the West Coast Main Line railway franchise.

[Earl Attlee]

My Lords, my right honourable friend the Secretary of State for Transport will make a full Statement in the other place at the earliest opportunity. The department will remunerate fully bidders for the direct and reasonable costs of putting together their bids and expects this cost to be approximately £40 million. The department expects additional costs from mobilising Directly Operated Railways, reissuing the tender and carrying out two independent reviews. The department will monitor these costs closely and be fully transparent in keeping the House informed.

[Lord Kennedy of Southwark]

My Lords, it is very regrettable that the noble Earl has not taken the first opportunity in Parliament to say sorry for this fiasco. He should be truly ashamed of what has gone on so I invite him to take the opportunity to apologise. Why are the Government saying there have been regrettable and unacceptable mistakes and yet no Minister is accepting responsibility?

[Earl Attlee]

My Lords, some noble Lords express disappointment that a full Statement has not been made. Nobody asked for a full Statement. I was very willing to answer a PNQ yesterday afternoon but there was not one because we have the topical question today. As for ministerial responsibility, noble Lords know perfectly well that this was a highly regrettable mistake by officials, not by Ministers.

[Lord Bradshaw]

Will the noble Earl send word to his colleagues elsewhere that no new franchises should be let for any railway until full consideration is made of the high level of risk which the Government are seeking to transfer to the private sector? I believe that the private sector is unable to bear that risk because predicting revenues 15 years hence is nearly impossible. I commend him to the Mayor of London who is running the London Overground railway on an entirely different basis where the revenue risk lies with the GLC and the people running the franchise are paid to operate the railway efficiently but are not expected to take these unbearable risks.

[Earl Attlee]

My noble friend asks extremely good questions and that is the purpose of the Brown review which will look into the franchising system and report back to us by the end of the year.

[Lord Adonis]

My Lords, does the noble Earl agree, given the scale of the debacle we have seen on the west coast main line, that the responsibility of senior officials and Ministers should be examined in the forthcoming review? Is he aware that since last Tuesday the only steps that have been taken have been the suspension of three fairly junior officials and the establishment of a review under a member of the DfT’s own board, whose colleagues include all of the senior Ministers and officials of the department? Does the noble Earl agree that this is not a wise proceeding in public policy and it is probably not very moral either?

[Earl Attlee]

My Lords, I do not agree with the noble Lord. The first step that the Government have taken is to set up two inquiries. The first one, headed up by Sam Laidlaw, will look at exactly what went wrong. If there was ministerial failure, no doubt he will identify that.

[Lord Adonis]

Sam Laidlaw is a member of the DfT’s own board. Is the noble Earl not aware of that?

[Earl Attlee]

My Lords, if there is anything wrong with the report, the noble Lord will be able to challenge me in this House on that very point. The first inquiry will look at what went wrong. The second inquiry will look at the wider franchising issues, as I said in response to my noble friend. We should be proud of our civil servants. I certainly feel honoured to be served by them. However, officials are human and can make mistakes, even big ones. Nevertheless, I want to make it perfectly clear that I retain full confidence in my department’s officials and I am more than content to account for their activities in your Lordships’ House.

[The Lord Bishop of Exeter]

My Lords, in the light of the noble Earl’s earlier answer about the award of other franchises, is he aware of the concerns that are already there about the award of a new franchise for the West Country? Can he indicate the likely impact of any review and the rerunning of this bid on the award of other franchises, including one that has a considerable impact on the economy of the south-west?

[Earl Attlee]

My Lords, it is a little early for me to answer in that much detail, but the process for the western region is being paused. However, the difficulty, of course, is with the west coast main line franchise.

[Lord Davies of Oldham]

My Lords, the House should congratulate the noble Earl on being one of two junior Ministers in the department who have survived. Is it not the case that the other Ministers who presided over this debacle scuttled just before the news broke, thereby denying the absolutely fundamental principle of parliamentary democracy that the buck stops with Ministers?

[Earl Attlee]

My Lords, that was a good try. We will have to see what the reports come out with.

[Lord Campbell-Savours]

My Lords—

[Lord Butler of Brockwell]

My Lords, the chairman of the Public Accounts Committee has pointed out that since 2006 there have been eight separate Secretaries of State—more than one a year—and since 2001 there have been six different Permanent Secretaries at the department. In view of that, are the Government surprised when things go wrong in a department?

[Earl Attlee]

My Lords, if that is the cause of the problem, I am sure that Sam Laidlaw will identify it.

[Lord Campbell-Savours]

My Lords, if I were to table—

Economic Affairs Committee

Tuesday 9th October 2012 Lords Chamber

Membership Motion

15:07

Moved By

[The Chairman of Committees]

That Lord Skidelsky be appointed a member of the Select Committee in place of Lord Currie of Marylebone, resigned.

Motion agreed.

Justice and Security Bill [HL]

Tuesday 9th October 2012 Lords Chamber

Order of Consideration Motion

15:07

Moved By

[Lord Wallace of Tankerness]

That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1, Schedule 1, Clauses 2 to 15, Schedules 2 and 3, Clause 16.

[Lord Foulkes of Cumnock]

My Lords, how is it possible to get clarification of what the noble Earl, Lord Attlee, said in reply to a question? I was not clear whether he said that a Private Notice Question, if we tabled one, would be answered by him this week. It is unsatisfactory that we have not had an apology or any explanation for one of the worst débâcles we have seen for years.

[Noble Lords]

Order!

[Lord Foulkes of Cumnock]

This is in order. Surely the Deputy Leader of the House can answer.

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

You are not in the other place now and you are abusing the procedure of this House. That matter is not before the House at the moment.

[Lord Foulkes of Cumnock]

With respect, we are considering the business of the House, and when my noble friend Lord Barnett raised the matter previously, he was abused by the Leader of the House for doing so. My noble friend was told by the Leader of the House that consideration of the business of the House—currently relating to consideration of the Justice and Security Bill—was the point at which to raise these matters. Surely the Deputy Leader of the House can give us an answer. Will we get an answer to a PNQ if it is tabled later this week?

[Baroness Royall of Blaisdon]

My Lords, perhaps I may explain to my noble friend and other noble Lords that to date we do not have business questions in this House. It is very difficult to raise them and we must ask the Procedure Committee to look at the matter. I agree that there should be space to ask business questions. I should also explain that PNQs are a matter for the Lord Speaker of this House, but I advise the Government that tomorrow I will certainly table a PNQ on the west coast main line for consideration by the Lord Speaker, because it is imperative that we receive answers to these questions.

[Lord McNally]

That was an extremely helpful intervention from the Leader of the Opposition. Let us move on.

[Lord Barnett]

My noble friend Lord Foulkes referred to me and the Leader of the House. I should explain to the House that I have since had a personal apology from the Leader of the House, although I cannot help thinking that it should have been in the House.

[Lord McNally]

I take note of that. If we go down the route of business questions, perhaps without the abuse that goes on in the other place, we could have discussions in the usual channels.

Motion agreed.

Defamation Bill

Tuesday 9th October 2012 Lords Chamber

Second Reading

15:10

Moved By

[Lord McNally]

That the Bill be read a second time.

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

My Lords, first, I welcome the noble Lord, Lord Browne, as the lead opposition spokesman on the Bill. I look forward to working with him and with the noble Baroness, Lady Hayter, on it. I also welcome the noble Lord, Lord Ahmad, as my chief aide. He has taken over in the Ministry of Justice from the noble Baroness, Lady Verma, who used to placate me on the Front Bench from time to time and to help me through Bills. I should, perhaps, put on the record that I hope that the noble Lord, Lord Ahmad, will provide a link with Members in all parts of the House—not only on this Bill but on MoJ business in general. I look forward to working with him.

I am delighted to open this debate today as the Defamation Bill begins its passage through the House. The Bill fulfils the commitment in the coalition agreement to review the law of libel to protect legitimate free speech. I would like to begin by thanking those in the other place for their work on the Bill so far—in particular my right honourable friend the Secretary of State for Justice and Lord Chancellor, Chris Grayling, and his predecessor Kenneth Clarke. I also thank the Ministers, old and new, in my department who have assisted in steering the Bill through the other place. However, I consider that today the Bill has come home. Indeed, it was in this place that my noble friend Lord Lester of Herne Hill produced a Private Member’s Bill on this subject back in 2010. I would like to take this opportunity to place on record my enormous thanks to my noble friend Lord Lester, and to his expert team of Heather Rogers QC and Sir Brian Neill, for their advice and assistance to me and to the Ministry of Justice in helping us to develop the provisions that are contained in the Bill here today.

However, my vote of thanks does not stop there. The Defamation Bill was published in draft in the first Session of this Parliament for full public consultation and pre-legislative scrutiny. The Joint Committee of Parliament that was established to undertake that scrutiny was expertly chaired by my noble friend Lord Mawhinney. I am grateful to him and his colleagues on the committee for their very careful consideration of the issues and for their extremely detailed and helpful report. I have also made it part of my responsibilities to engage in discussions with a wide range of interests outside Parliament who have brought this issue to the forefront of public debate, many of whom have provided briefings to this House in advance of today’s debate. It would be remiss of me not to extend my thanks also to the many groups and individuals that responded to our public consultation on the draft Bill.

This Bill was built on a Private Member’s Bill, followed by consultation, pre-legislative scrutiny, a draft Bill and consideration in the other place. It is not a Bill that divides us on party lines. Indeed, I have made no secret of the fact that my intention in bringing this Bill before Parliament has always been to end up with legislation that works. I believe that it is timely because of the mounting concern in recent years that our defamation laws are out of date, costly and over-complicated. They give us the worst of all worlds by damaging freedom of speech without affording proper protection to those who are defamed.

Freedom of expression is the cornerstone of our democracy. In an open society, people should be at liberty to debate a subject without fear or favour, whether the matter is political, scientific, academic, religious or anything else. That is how power is held to account, abuses of authority uncovered and truth advanced. However, freedom of speech does not mean that people should be able to ride roughshod over the reputations of others without regard to the facts. Careers and indeed lives can be destroyed by false allegations that are incapable of properly being answered. The issue for our defamation laws is ultimately one of striking the right balance between protection of freedom of expression on the one hand and protection of reputation on the other.

The law as it stands has allowed a situation to develop where the threat of lengthy and costly proceedings has sometimes been used to frustrate robust scientific and academic debate, to impede responsible investigative journalism and to undermine the good work undertaken by many NGOs. Nor can it be a matter of pride when powerful interests overseas with tenuous connections to this country use the threat of British libel laws to suppress criticism as part of so-called libel tourism.

It is also a fact that our current libel regime is not well suited to the internet. Legitimate criticism sometimes goes unheard because website operators, as providers of the platforms on which vast amounts of information are published, often choose simply to remove material which is complained of rather than risk proceedings being brought against them. Meanwhile, individuals can be the subject of scurrilous rumour and allegation on the web without meaningful remedy against the people responsible.

We need to refocus and modernise our law on defamation so that it offers effective protection, whether offline or online, for both freedom of speech and the reputation of those who have been defamed. It is my hope that the Bill will do that, but I am well aware that this is new territory for legislation.

I now turn to the detail of the Bill. I see it as a first priority to ensure that the law is reformed so that trivial and unfounded actions for defamation do not succeed and indeed are discouraged from being started. Clause 1 therefore raises the bar for a statement to be defamatory by proposing that it must have caused or be likely to cause serious harm to the reputation of the claimant. Where the draft Bill sought views on a test of “substantial harm”, which was intended to reflect current law, the new clause draws on the views of the Joint Committee on the draft Bill and the balance of opinions received in consultation by nudging up this threshold. Our intention is to give more confidence to defendants such as those in some of the cases brought against NGOs and scientists in recent years.

Alongside a stronger test, we also want to simplify and clarify the defences available to those accused of libel. As they stand, they are unnecessarily complicated and too narrowly focused on cases relating to mainstream journalism rather than the online world, NGOs, academics, scientists and so forth.

The Bill also clarifies that qualified privilege extends to reports of scientific and academic conferences. In a further important step forward for the protection of scientists and academics, Clause 6 creates a defence of qualified privilege for peer-reviewed material in scientific and academic journals—again, as recommended by the Joint Committee.

There are also provisions seeking to address libel tourism, which has damaged this country’s reputation around the world as an advocate of freedom. Although relatively few foreign libel cases ultimately end up in British court rooms, I am concerned about the use of threatened proceedings by wealthy foreigners and public figures to stifle investigation and reporting. Clause 9 of the Bill addresses the issue in a measured and proportionate way while avoiding any conflict with European law. It clarifies that a court will not hear a case against someone who is not domiciled in the UK, another EU member state, or a state which is a party to the Lugano Convention unless satisfied that England and Wales is clearly the most appropriate place to bring the action. It should help to ensure that powerful interests around the world will not easily be able to use British justice to gag their critics, which is a move that I hope will be welcome across the House.

In addition to protecting freedom of expression and reputation, the Bill seeks to modernise the law. Currently, website operators are at risk of action for the content of material that they may host, even if they do not control the content. Most operators are not in a position to know whether the material posted is defamatory or not and very often, faced with a complaint, will immediately remove material rather than face the possibility of defamation proceedings, however real or remote that possibility may be. That leads to an unnecessarily chilling effect on free speech.

The Government want a libel regime for the internet that makes it possible for people to protect their reputations effectively but also ensures that information online cannot be easily censored by casual threats of litigation against website operators. Clause 5 of the Bill sets out a framework for how we wish to achieve this.

As your Lordships know, technology develops apace, and rather quicker than primary legislation. Had we sought to specify the detail of the system that we propose for the internet, we would have risked it being out of date before noble Lords had concluded their considerations. Rather, we propose that much of the detail will be set out in regulations. We will be seeking views on the content of these regulations by the end of the year.

The Bill will make significant changes to the law of defamation—changes that I would argue are very much for the better. However, they should not be seen in isolation. As I have already mentioned, one of the biggest areas of concern in relation to defamation proceedings centres on the costs involved. As the House will recall, earlier this year we had some debates about the costs and funding provisions on what is now the Legal Aid, Sentencing and Punishment of Offenders Act. Part 2 of that Act reforms no-win no-fee conditional fee agreements, or CFAs, to reduce costs and to make them fairer as between claimants and defendants. Those provisions come into effect in April next year, including for defamation and privacy cases. During those debates, particular concerns were raised by a number of noble Lords—the noble Lords, Lord Martin and Lord Prescott, and others—about the effect of our reforms on less well off parties. At that time, I acknowledged those concerns, and I gave a commitment to look at the rules on costs protection for defamation and privacy claims in preparation for when the defamation reforms come into effect.

I have asked the Civil Justice Council to help us on costs protection for defamation and privacy claims by looking at the case for it and options for reform. The council is an advisory body chaired by the Master of the Rolls. I have asked him to report by the end of March 2013. That will allow us to make, if appropriate, any rule changes in time for the Defamation Bill coming into effect.

In addition to the issues on costs, we are developing a new procedure to resolve key preliminary issues at as early a stage as possible, which was something that I know was of great interest to the Joint Committee. Currently, cases can drag on for too long before they reach full trial and that can lead to costs being built up unnecessarily. Getting early resolution of key issues often leads to early settlements. The Government are keen to encourage that. The Government are grateful to the Joint Committee for its recommendations, including those on the use of alternative dispute resolution in defamation cases. However, when looking at procedural reform, we need to be aware of the wider context, and recommendations that impact on this area may come out of Lord Justice Leveson’s report.

While I believe that it is important to wait for the outcome of the Leveson inquiry with respect to the procedural aspects of defamation reform, I am clear that we should not allow that process to impact on the content—or indeed the timescale—of our reforms to the substantive law contained in this Defamation Bill. Leveson is largely focused on issues other than defamation and should not be used as an excuse to delay this Bill. Opportunities to get this area of law right do not come along too often. There was a Defamation Act in 1952 and another in 1996. This is the first opportunity we have had to consider the law in Parliament since the explosion of the internet age and we might wait a long time for another chance. What is more—and with perhaps uncharacteristic modesty—the other place has left scope for this House to apply its expertise to this Bill. My approach has been to listen and apply the dictum of the late President Truman, “Spread a little of the credit and you will be surprised how far you can go”.

In another place, my ministerial colleagues at the Ministry of Justice made it clear that there is one area of the Bill in particular where we are reflecting in the light of the views we receive. This is in the area of the defence of responsible publication on a matter of public interest, contained within Clause 4 of the Bill. I am sure there will be more views forthcoming on that clause during the debate. I will be sure to take note of them and we look forward to further discussions on Clause 4 in Committee.

I believe that the package of measures contained in this Bill meets our aim of rebalancing the law in a fair and effective way, so that free speech is not unjustifiably impeded and so that debate on issues of public importance is able to thrive, while still providing appropriate remedies for those who have been defamed. It is a sound, reforming Bill and one that I hope can command cross-party support. I genuinely look forward to working with all parts of the House to bring forward a Bill of which we can be justly proud. In commencing our work, perhaps we should take on board the warning contained in the editorial in today’s Guardian, which says that,

“weighing free expression against protection of reputation is art as much as science”.

Fortunately, we have an abundant supply of both artists and scientists in this House. I commend the Bill to the House.

15:27

[Lord Browne of Ladyton]

My Lords, I thank the Minister for his welcome. I had not expected to deal with this legislation and I have spent quite a substantial part of the Recess reading up. For a moment, I thought that I had missed something else. I knew that there was a failure of communication over the content of the reshuffle in certain places and I wondered if the noble Lord, Lord McNally, maybe knew something about a phone call that I should have got during the reshuffle that did not materialise. I also take this opportunity to welcome the noble Lord, Lord Ahmad of Wimbledon, to his post in the department. I look forward to working with him closely on the Bill and to his educating me on the detail, to the extent that I have been unable to master it so far.

We support the Bill to the extent that it seeks to reform our outdated libel laws. We also support it because—as the noble Lord, Lord McNally, made plain—it has its roots in what the previous Government did and because all three main political parties committed themselves to reforming defamation law in their election manifestos. However, as the Minister reminded us in his letter yesterday, that commitment to reform was translated in the coalition agreement to a commitment to review the law of libel to protect free speech. The word “reform” somehow fell off the agreement when the two parties went into discussion on a commitment to reform.

The first question for the Minister is whether the Bill, which in its present form largely codifies, and reforms little, is a reflection of the commitment of the coalition Government or is the aggregate position of two reforming parties on defamation law. The Minister, or the noble Lord, Lord Ahmad, may have an opportunity to enlighten me about that at some stage during the course of this debate.

We support the Bill, but are critical friends of it and hope to see it amended significantly during its passage through your Lordships’ House. I thank the Minister both for his speech of introduction and for the helpful letter that he circulated yesterday, I believe to all Members of the House. I am told by informed sources that he is the department’s principal promoter of the Bill and is the Minister who was responsible for piloting it through the Committee stage in the House of Commons. Apparently the Commons did not share his passion for reform of this area of law; accordingly we have high hopes of him.

Before I turn to specific clauses of the Bill, I want to associate myself with the words of the Minister to the extent that he has recorded thanks and appreciation to those who have played a role in getting the Bill to this stage. I associate myself with the recognition of the noble Lord, Lord McNally, of the role played by the Libel Reform Campaign and others too numerous to mention. If the Minister will excuse me, I will not go through the exhaustive list of all those who have been lobbying us—our inboxes are all full of their briefings on this. I am sure your Lordships will want to pay tribute to my right honourable friend Jack Straw and the working group that he established when he was Secretary of State, and of course to the Joint Committee of both Houses, under the able leadership of the noble Lord, Lord Mawhinney, which scrutinised the draft Bill. It is also appropriate to recognise the sustained contribution of the noble Lord, Lord Lester, particularly in relation to his original Private Member’s Bill and beyond. I suspect that both the Joint Committee report and the Private Member’s Bill will prove to be sources of inspiration when we come to Committee.

It is important that in any review and reform of defamation laws we get the right balance between freedom of speech and expression on the one hand and protecting reputations on the other. There have been justified concerns that our defamation laws are outdated, have fallen behind technological developments, have restricted freedom of expression and have attracted libel tourism. I say “our” defamation laws despite standing here as a Scottish lawyer and never having practised in English law, if noble Lords will excuse that poetic licence for the purpose of making my points.

The current system is also skewed by the high cost of defamation proceedings. The Defamation Bill should leave us with laws that are clearer and, much more importantly, more proportionate. As I have already made clear, we welcome a number of elements of this Bill. However, we are disappointed with the way in which the Government have approached it in the other place and feel an opportunity has been wasted, thus far, to reform and improve our defamation laws. What we have here, subject to one or two minor changes, is not reform but codification. As we know, a Joint Committee of both Houses scrutinised the draft Bill and came forward with a number of suggestions for how the final Bill could be improved. Many of these were ignored by the Government. In the House of Commons, we were concerned that the Bill as originally published did not address a number of problems and we sought to amend the Bill to improve it. The Government refused to take on board suggested amendments, although they turned up on Report with two of those amendments, redrafted, which were accepted. We will revisit many of these in Committee but this is not the time to go through the detail of the Committee stage.

Finally, the Government so far have failed to publish much of the detail of the Bill in the form of regulations and guidance. I listened carefully to the Minister’s assurances about what we can expect in the future. They have repeatedly been asked to publish more information on regulations and other parts of the infrastructure that are important to understand the effects of this Bill but so far have refused to do so. It is undoubtedly the case that for this and other reasons, although this will be in Committee relatively soon, it will be difficult properly to scrutinise and discuss many aspects of the proposals in the Bill in the absence of that information. We will not be able to work out what this will mean on the ground unless we have some sense of the infrastructure in which it is to sit.

I listened carefully to the warning from the noble Lord, Lord McNally, in relation to what I am about to do. The conclusion of the passage of the Bill will come shortly before the anticipated report by Lord Justice Leveson. It comes in the context of a continuing but as yet unshaped review of the law of privilege, and with the failure of the Government to show their hand on the rules on cost protection for defamation in privacy claims. All the regulations that we have been promised will be required for significant parts of the Bill.

The Bill consequently sits in a much broader, potentially confused and changing landscape. This may not be able to be fully clarified by the Government during their deliberations. However the maximum amount of clarity must be given to ensure that this set of reforms or changes will be sustainable beyond those that we can expect from the Government and the response to Lord Justice Leveson, or in relation to the changes in the rules for the court or the rules on costs.

This is a relatively small Bill, now with 17 clauses. I will deal with these clauses relatively quickly, concentrating on where we see the need for further scrutiny, or have criticisms or proposals for amendment in mind. Clause 1 seeks to impose a higher threshold for bringing a claim, a requirement that a statement must have caused “serious harm” to be defamatory. We support this higher hurdle for the reasons set out but believe that there needs to be greater clarity as to what “serious harm” would mean in practice. We will probe the Government to get that clarity in Committee. Clauses 2 to 7 set out the defences that will be available for a claim of defamation. Some replace or codify common-law defences; others create new defences. We will probe the Government’s thinking in relation to Clauses 2 and 3, but we broadly support them and see them as an improvement in the law.

We will test whether, as drafted, Clause 4’s intention to address responsible publication of matters of public interest makes the law clearer and more readily applicable outside mainstream journalism as claimed. The Government’s assertion that it does is not supported by the evidence of the Libel Reform Campaign. Simply replacing an existing defence that does not work and is not accessible with the statutory codification of it does not solve the problem. More importantly, there is a growing and persuasive argument that there is a place for a whole new approach to this issue, either through a new and effective public interest defence in addition to what is in the Bill, or by sweeping away what is presently in the Bill and recasting it.

On Report in the other place, the Under-Secretary of State, Mrs Helen Grant, indicated that the new ministerial team had an open mind about that proposal. This is what I believe the rather enigmatic Clause 7, mentioned on page 2 of yesterday’s letter from the noble Lord, Lord McNally, refers to. He expanded on that today and has told us that is exactly what he has an open mind about. It would be helpful if we heard discussions across those interested parties and across the House to see whether we can come to agreement on a reform or recasting of this part of the Bill to make sure that it passes the test that he set in his letter to us yesterday.

We think that Clause 5 is ill thought-out and incomplete. It creates a new defence for the operators of websites where a defamation action is brought against them in respect of a statement posted on their website. Importantly, the detail of the defence—we are told—will be provided in draft regulations which we have not yet seen and the shape of which we do not know. We have requested that the regulations be approved through affirmative rather than negative resolution procedure because they are so significantly important to this process, but so far that change has not been accepted. It may be that this new listening department will be prepared to reconsider that. This is a key area. Technological developments have advanced much quicker than our laws, and we need well thought-out and potentially sustainable reform because this area of our life moves much quicker than any other. We will need to try to anticipate how those who wish to defeat any regulation we put in place will move in order to defeat that regulation. We will be seeking more clarity on this clause, and seeking to amend it in Committee.

We welcome Clauses 6 and 7 and are pleased that the Government followed the committee’s recommendations and, particularly, that Clause 6 introduces a new defence of qualified privilege relating to peer-reviewed material in scientific and academic journals. Clause 8 introduces a single publication rule to prevent an action being brought in relation to publication of the same material by the same publisher after a one-year limitation period. We support this clause.

Clause 9 addresses libel tourism. Concerns have been expressed that defamation law in England and Wales is more protective of reputation than elsewhere in the world and that London has become the preferred location for defamation actions involving parties with only a tenuous link to the jurisdiction. Although the extent of this issue is subject to debate, while we agree with the need to reduce the potential for trivial claims and address libel tourism—whatever its extent—we think that the necessary changes should be made to the Civil Procedure Rules before the Bill comes into force, so that we are able to discuss the practical implications of this change.

We support the objective of Clause 10—to limit the circumstances under which an action can be brought against someone who is not the primary publisher of the statement—but do not think it affords sufficient protection. We tabled a number of amendments in the other place and we will revisit almost all of these.

We support Clause 11 but would like to see detailed guidance relating to the criteria for the judge to consider when deciding whether a jury trial should be ordered. I digress from my notes here to remind noble Lords that I am a Scottish lawyer. I practised all of my life in a jurisdiction where we did not have the deference to jury trials that the English jurisdiction has. I did it also during a period when we shared a Parliament—when both Houses of this Parliament regularly legislated for the administration of justice both in civil and criminal jurisdiction in a non-jury environment without any demur or question as to whether or not it was doing injustice.

Since I have become a parliamentarian, I have listened to hours of English men and women saying that the only way to deliver justice is through a jury trial, and that any other way of doing it is an injustice. I am always mildly amused by that, as your Lordships can imagine. Although now that we have our own Parliament things are different, there are hundreds of years of this Parliament legislating for a country in which the prosecutor decided whether you got a jury trial. It did that without any concern at all. I say finally, to summarise and get myself out of this kind of cul-de-sac that I have got myself into, that I could paper the wall with the names of miscarriages of justice that I have witnessed in courts, many of which have been perpetrated by juries. Anyway, we support Clause 11—but would like to see the detailed guidance relating to how the judge will apply it—and we welcome Clauses 12, 13 and 14.

The Bill does not make any specific provision for costs or striking out claims. Instead, we are asked to accept the assurance of the Minister and his ministerial colleagues that these issues will be dealt with elsewhere. I remind the noble Lord, Lord McNally, that during the progress of the Legal Aid, Sentencing and Punishment of Offenders Bill to which he referred earlier, he gave my noble friend Lord Prescott an assurance that the problem which my noble friend identified about costs in defamation actions would, and I quote narrowly here, have to,

“be dealt with fully in that Defamation Bill”.—[Official Report, 27/3/12; col. 1332.]

Now, that is not dealt with in this Bill but now the noble Lord gives another set of assurances that we have to accept as to how it will be dealt with. We are concerned about access to justice under the Bill and would like to see the issue of costs addressed in it. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 has abolished the recoverability of success fees and after-the-event insurance premiums. Claimants in defamation actions will no longer be able to insure themselves against costs—and even if they are successful, they may have to pay some of their damages in lawyers’ fees. There are a number of possible ways to address defamation costs, one of which the noble Lord, Lord McNally, explained to us, but we intend to explore all of them in Committee in the hope that we can find something that will allow the noble Lord to make good on his commitment to my noble friend Lord Prescott.

We would like a provision for striking out claims included in the Bill and hope to discuss in Committee the possibility of including a provision to that effect in Clause 1. We intend to table again the suggestion from the committee that corporations should be able to instigate proceedings but that the threshold should be higher for them: that is, where the corporation can prove substantial financial loss. We are concerned that the continued inequality of arms between parties will continue to limit access to justice for many less wealthy claimants.

In my short experience of your Lordships’ House, it is not uncommon for speeches here to be peppered with comments that legislation has left the House of Commons incomplete and barely scrutinised, leaving much work for this House to do. What is less common is that a Bill is sent on its way from the House of Commons with almost every speaker there saying that the degree of scrutiny and revision necessary will have to be carried out by this House because it has not been carried out by their House. However, that is exactly what was said repeatedly by Members of all parties, including Ministers, when the Bill was read for a third time in the House of Commons on 12 September.

In his contribution to Third Reading, the Secretary of State for Justice paid tribute to my right honourable friends in the Commons for the measured, constructive and thorough way in which the Bill proceedings had been conducted. We intend to continue that approach and expect in return that the Government’s promise of an open-minded approach, made repeatedly during Report and Third Reading in the Commons and repeated by the Minister in his letter yesterday, will be lived up to.

15:46

[Viscount Colville of Culross]

I declare an interest as a producer/director still working at the BBC and as a vice-chairman of the All-Party Parliamentary Libel Reform Group. I very much welcome the Bill. I have read the lengthy evidence given to the Joint Committee and its incisive conclusions and pay tribute to its work. I also thank the Libel Reform Campaign for its help, and of course the noble Lord, Lord Lester of Herne Hill, for his extraordinary campaigning work over many years to reform our libel laws. I am in awe of the very hard work and thought that has gone into the drafting of this Defamation Bill.

The Bill centres, quite rightly, on the careful balance that has to be drawn between the right of an individual to a reputation and the preservation of free speech and expression. Britain’s record of free speech has been one of the great sources of inspiration to the world since the Glorious Revolution in the late 17th century stopped the censorship of newspapers and pamphlets in this country. I have just made a history documentary that attempts to find out why the Industrial Revolution took place in Britain rather than in other scientifically advanced European countries. One of the programme’s conclusions was that 18th century Britain boasted a liberty of speech and intellectual discourse that allowed the free exchange of ideas between scientists, technicians and industrialists. The industrial enlightenment, as it is called, allowed the creation of inventions and industrial progress that transformed this country into one of the most powerful and prosperous in the world, and much of its success rested on the power of free speech.

This freedom has been counterbalanced in statute since the passing of the first civil libel laws in 1843, and they have developed through subsequent Acts and changes in common law to protect the reputation of the individual. However, I fear that in recent years those very libel laws and the threat of their use against a wide range of authors from journalists to scientists and NGOs is having an increasingly oppressive effect on free speech. Our present libel laws seem to have tipped the balance too far in favour of the claimant.

I have worked as a journalist on regional newspapers and for our major television networks for most of my career. I have first-hand experience of the threat of libel action limiting my ability to publish all the information that I had gathered in the course of an investigation, but my experiences are limited and on a small scale. In the course of preparing for this speech, I have spoken to journalists and media lawyers in some of our most respected broadcast and newspaper companies. They have told me of many instances when, during the course of investigations into powerful individuals or companies, they have been confronted by an ever-increasing torrent of letters and threats from libel lawyers, often multiple firms of libel lawyers.

At a time when there have been revelations of misconduct—and in some cases criminal misconduct—by journalists, one or two media organisations have been singled out for being well regulated and responsible. One of those is the organisation for which I work, the BBC. It is at the forefront of responsible investigative reporting. Indeed, the work of “Panorama” has brought us important and revealing programmes that hold to account powerful commercial and religious organisations and even a Member of your Lordships’ House. This exercise of free speech seems to be a crucial pillar of our democracy.

However, even at the BBC the chilling effect of our present libel laws is being felt. The corporation’s head of current affairs, Clive Edwards, a long-term colleague of mine, said in a recent speech:

“In my 25 years working in investigative journalism I have to say the current climate is the worst I can remember and it’s getting to the point where I have serious concerns about the future of investigative reporting”.

This is the man who is ultimately responsible for “Panorama” and other investigative programmes.

What is ironic is that one of the defences for responsible journalism built up by the common law is now being used as a stick with which to beat journalists in an attempt to prevent publication: the so-called Reynolds defence. This defence lays down 10 non-exhaustive factors, the use of some but not all of which should be enough to protect fair and responsible journalism, even if the absolute truth of the statement cannot be proved. At the moment, however, prior to publication or broadcast, lawyers representing companies and individuals under investigation are increasingly demanding that journalists, scientists and NGOs should abide by all 10 factors in order to prove that they have acted fairly and responsibly.

During the course of one recent “Panorama” investigation of a controversial organisation, the programme makers received upwards of 1,000 pages of legal letters, at a going rate of £400 a page, to try to influence the content and prevent the programme’s transmission. Every letter required a response by the BBC lawyer that had to be checked by the programme makers and executives. The present libel laws are costing respectable media organisations a fortune in their own lawyers’ fees and are exhausting journalistic talent in refuting these claims. This must be having a detrimental effect on the number of investigations that can be undertaken. It cannot be right that the rich and powerful are using our libel laws to attempt to suppress reporting and are using their lawyers to act like back-street bullies to suppress investigation.

This Bill goes a long way towards improving the situation and redressing the balance towards the protection of free speech. Clause 1, on serious harm, requires a claimant for the first time to prove that there has been serious damage to their reputation or financial situation. I am sure that this obstacle will stop trivial and vexatious cases coming to court. Clauses 2 and 3 create statutory defences for truth and honest opinion, which will help to protect free speech. Clause 6 is a tremendous step forward in protecting scientists and NGOs who want to express their concerns without fear of litigation. It is long overdue and I know is very much welcomed by those communities.

However, there are one or two areas of the Bill that cause me a little concern, and I hope that they will be tested during the passage of this Bill through your Lordships’ House. Clause 4 gives a welcome defence of responsible publication on matters of public interest against libel. Subsection (2)(a) to (i) contains the list of 10 factors that can be used in the defence of responsible journalism. The Explanatory Notes say that these are,

“a non-exhaustive list of matters to which the court may have regard in determining whether a defendant acted responsibly in publishing a statement”.

However, in the light of the way in which libel lawyers are using the present 10 factors of the Reynolds defence as 10 hurdles for journalists to cross, I am not sure that their codification will improve the situation.

I would also ask whether this clause accounts for the changes in the common law that have taken place as a result of the Supreme Court decision in the case of Flood v Times Newspapers Ltd. This now allows for the reasonable belief of the editor or publisher to be taken into account as part of the defence. This clause as it stands seems to be a step backwards. I ask the Minister if he can think of a different way of wording this clause that would both bring it up to date with the Flood judgment and deal with the problems of the 10 factors in the Reynolds defence.

Clause 5 is of utmost importance in that it recognises the overwhelming importance of the internet as an arena for free speech in the 21st century. If this Bill is to be future-proofed, it needs to get this clause right. Social media such as Facebook, Twitter and blogs are an ever more powerful method of disseminating information. Many of the operators and much of the comment take place outside our jurisdiction. Nevertheless, we must try to achieve a balance for claimants, website operators and authors based in this country.

Clause 5 goes a long way towards creating this balance between a defence for website operators against allegations of defamation while also giving claimants redress for defamation. However, I ask the Minister to be aware that the clause could be used by people who want to unmask the identity of an anonymous individual, maybe a whistleblower or someone like that, by using a spurious defamation claim to force a website operator to do so. There needs to be some burden of proof when making the claim that a remark is defamatory before it should be removed.

I also welcome Clause 9 on jurisdiction, which goes a long way to diminishing the threat of libel tourism in the London courts. Although there have been only a limited number of actual cases from abroad in the English courts, these laws have certainly been used as a chilling effect on free speech internationally. As this clause is drafted, it will not help British defendants who are being sued by overseas claimants living outside the EU, and that is a source of concern for me.

On Clause 12, I am anxious that the demand for a summary statement of the judgment will duplicate the jobs of regulatory bodies such as the PCC, the BBC Trust and Ofcom, and I am sure that this issue will also be considered in whatever forum Lord Justice Leveson comes up with for considering complaints against the media. To allow a judge to force a paper or a broadcast to put up an apology on the front page or at the top of the television news seems to me to put the judge in the editor’s seat. I ask the Minister whether that is in the interests of free speech and responsible journalism in this country.

This Bill goes a very long way in addressing the concerns that many of us have for guarding free speech in this country. Any changes that I have suggested must not become a charter for irresponsible journalism or comment. There have been some wonderful and important debates on the Bill in the other place, but I am sure that its passage through your Lordships’ House will bring about the crucial amendments that will ensure that it becomes the once-in-a-lifetime chance to rebalance the freedom of speech and the reputation of the individual in an era of extraordinary change and upheaval in our media.

15:56

[Lord Mawhinney]

My Lords, I, too, welcome the Bill. The Minister will recall conversations that he and I had about whether the Government were genuinely serious in wanting to legislate. We had been brought to the starting point on a number of occasions over past decades but had never actually managed to get the race under way. I pay tribute to him, and I want it to be a matter of record that I personally believe that without the intervention and leadership of the noble Lord, Lord McNally, this Bill almost certainly would not have emerged from the depths of government. I hope that he will accept that compliment; there may not be a regular flow of them through the whole process, but at least I start as I would like to be able to continue.

I thank my colleagues from your Lordships’ House who were on the Joint Committee. I am slightly nervous because four of the other five are due to speak in this debate after me. Nevertheless, I record my appreciation to them for their support, intellectual rigour and common sense.

I was pleased that the Minister started by affirming the Government's commitment to freedom of expression. That is hugely important and it is put under pressure in a whole variety of ways, not just in defamation but every day. I listened carefully to what the noble Lord, Lord Browne of Ladyton, said; he talked about the Bill being seen in a broader context. I am not sure if he used the word “context”, because it was the word “broader” that caught my attention. I have had the privilege of being in this Building, at both ends of the Corridor, for 33 years now. One of the most significant changes in that period has been the inhibition of freedom of expression through creeping political correctness. It is not necessarily defamation per se, but it is an insidious threat to freedom of expression and I encourage the Minister to remember that as we take the Bill through. We are dealing with one very important threat to freedom of expression, but we should not fall into the mistake of believing that it is the only one.

He and I have discussed Clause 1. The Government started on “substantial” and finished on “serious”. We decided that “serious and substantial” was even better. I noticed that the Government’s response to the Joint Committee report was that two words, “serious” and “substantial”, might make for confusion. May I tell my noble friend that “serious and substantial” was the testimony to our committee of the noble and learned Lord, Lord Mackay of Clashfern? He may not be good enough for the Government, but he was certainly persuasive enough for the Joint Committee. I encourage my noble friend to put “serious and substantial” back in to the melting pot. All of us agree that the bar needs to be raised, and that trivial issues and threats need to be disposed of quickly.

I turn to Clause 4 and the so-called Reynolds defence. I am not sure that the noble Viscount, Lord Colville of Culross, read all the evidence to our committee. If he did, he accurately reflected it in his speech. A lot of people said to us that they were not sure about these 10 different tick boxes that constitute Reynolds. We know that they do not all have to be ticked, but there is confusion out there. Increasingly the legal world and aggressive lawyers are moving to try to make all 10 a prerequisite. I hope that the Minister will think carefully about what the noble Viscount said. There are still tick boxes in Clause 4. From talking to the noble Lord, Lord Lester of Herne Hill, to whom this House is indebted for his work in this area, I know that there are other more general ways of writing Clause 4 that would totally remove any confusion from a tick-box-type regime. I hope that the Minister will look at that again before we complete the Bill in this House.

Clause 7 and with it Clause 6 seem to me big improvements on where we are at the moment. I say to my noble friend that it was the committee that came up with the idea of using peer-review of scientific and medical documents and theses as a way of getting that qualified privilege. I pay particular tribute to the noble Lord, Lord Bew, who led that conversation in the committee. I can tell the Minister that we were more nervous that qualified privilege might or might not be applicable to conferences. I do not think that because qualified privilege should be available to peer-reviewed articles that conferences automatically get lumped in to the same category. They require separate consideration. So I welcome Clause 7 and its associated Clause 6.

I want to turn to a couple of the issues that were part of the consultation aspect of the draft Bill and to pick up in particular one that the Minister himself picked up, which was the issue of cost. I am not sure that I have the fluency to relay to your Lordships in permissible language the strength of feeling around cost as a barrier to people getting their legal rights. That is very tricky because it is quite difficult to write legislation about costs, so the temptation—I think the Minister may have skirted around the temptation in his earlier comments—is to say, “We’ll think about it. We’ll devise ways and it’ll all be all right on the night”. Given how long we have waited for legislation on this area, I know he will understand that cost needs urgently to be addressed now. We made a number of recommendations. We think that in a defamation case, the speed of consideration of the preliminary issues by a judge is crucial. We were told that a lot of time and money is spent because neither side knows what individual words mean or how the judge will interpret them. Bills get racked up into astronomical sums when a meeting with the judge in the first week or two could take that cost barrier completely out of the system.

I understand that my noble friend and his colleagues get very nervous when the case management of judicial cases gets mentioned by anybody who is not a fully qualified judge, solicitor, barrister or, preferably, all three, but the rest of us have permission to express opinions, even if we are not in the judicial system, and I want to express an opinion. I know that government Ministers have the ability, in however these things are done, to let it be known to those in the judicial system who have responsibility for case management that government would be pleased if this were to happen or would be encouraged if that were to happen. This is an area that needs to be grabbed by Ministers. Of course, you are raising questions about the judgment of the judiciary. In one sense, I am not. I want it to be independent and to do its thing totally free of political interference, but I want it to do it in a way that is good for my former constituents. I want it to be friendly for the claimant. Running systems that do not challenge existing procedures but hold up the process, thus driving up the cost, is not good for my former constituents. There is a serious cost bar issue that needs to be tackled head on by judges making early decisions and somebody writing into the Civil Procedure Rules government-inspired guidance and perhaps duties in the area of case management that would bring defamation law back into the purview of the ordinary citizen of this country.

The second thing that the Joint Committee felt very strongly about was the need to put in requirements for judges initially to direct towards mediation and arbitration before a case goes to court. I have read government documents truthfully saying that the Government want to encourage out-of-court settlements, that going to court is the last thing they want and so forth. This is an opportunity to do something about it. The committee felt very strongly indeed. I have sided with the noble Viscount, Lord Colville of Culross, but I now have to disagree with him. The committee’s evidence was that a system of mediation and arbitration that led somebody to say sorry was perhaps one of the most effective ways of dealing with defamation available to us, yet the system is not set up to encourage people to get together and say sorry. I wish I had a piece of paper of the realm for every one of my constituents who has come to a surgery and said, “I don’t want any money. I just want them to say sorry”. The committee believed that there are times when the judge should have the power to require an apology to be printed, occasionally on the front page of a newspaper, depending on the seriousness of the case. I know the editor’s argument, “If the Queen dies that day, is she supposed to go to page 15?”. It is a spurious, nonsensical argument. All you need to do is say, “It has to be done in 72 hours”, or 96 hours, or whatever it is.

We need out of this Bill a system that is more geared to ordinary citizens and not to the exclusive ones. For the first time in my life, I am going to associate myself with a Labour Party slogan; we need a defamation system that is for the many and not just geared to the convenience of the few. There was a healthy discussion in the committee about the merits of statute law and common law. The judiciary likes common law because it makes the system more flexible; but ordinary people do not understand common law, whereas they can go and look up statute law. So, to the extent that this Bill will codify, it is in the interests of ordinary citizens because it makes the law more understandable.

The committee dealt with the question of trial by jury. There are very few jury trials now, but we were not persuaded that they should be done away with; therefore I welcome Clause 11. I need to say to my noble friend, not least out of courtesy to those who served with me on the committee, that while I have appreciated various clauses in this Bill, we all reserve the right to raise Joint Committee proposals, which the Government, without the opportunity of discussing them with us, have thus far rejected.

I will finish on one other big issue, which, if my reading of the Bill is correct, has not actually been dealt with. What happens on the internet moves very quickly, and the committee was persuaded that holding the providers to account was not the way to go forward. We welcome that decision by the Government. That having been said, what is on the internet falls into two categories: that which is by an identifiable person and that which is truly anonymous. The committee’s view was that if it is identifiable, the laws of the land as they apply should apply to the internet as well as to every other aspect. The issue of the anonymous is much more difficult, and is made more so by the fact that the internet is worldwide and we have to be careful. I can see nothing in this Bill that even touches on what you do about anonymous defamation. We in the committee were not certain, and we were very tentative, but I will tell the Minister what I would like. I would like a differentiation, a cultural change in this country, so that over the passage of time, if you do not put your name to it, it cannot be taken seriously. If you do not put your name to it, it cannot have any legal standing. That cultural change will not happen overnight. It may be a five-year or a 10-year process. However, unless somebody comes up with a better way of offering some element of defamation protection to those on the internet who prefer to behave anonymously, let us try to create a situation in which over time nobody takes it seriously and therefore nobody pays any attention to it. That is at least a form of protection. I am always happy to step down if the Minister comes up with a better solution, though I do not see it in the Bill.

I welcome the Bill and congratulate the Minister on it. My sense is that it is not party political. I wish him well in getting it through the House speedily and on its way as its implementation is necessary to improve our defamation procedures.

16:15

[Lord Sugar]

My Lords, I have concerns that the changes being made to the defamation laws are too lenient, to the advantage of the printed media—the national press.

I have listened very carefully to the noble Viscount, Lord Colville, who rightly stated that we should not suppress freedom of speech and that responsible media owners are being attacked by frivolous and derisory claims. However, I am afraid to say that laws that are drafted and crafted with responsible members of the media such as the BBC in mind are abused by the biggest culprits that cause the problems in the marketplace. I speak as a past claimant who has taken the media to court on numerous occasions. I will not go into the details at the moment but being a details person I became deeply involved in the legal procedures and feel that I am somewhat of an expert, albeit I am not a lawyer, on the laws of defamation, of which I now have a good understanding, and, more to the point, on the tricks of the trade played by the media in interpreting and using the law for their benefit.

At this juncture it is useful to remind your Lordships that there is one thing, and one thing alone, that is of prime importance to the media, and that is money and how much their pockets will be affected. The days of the Elton John million-pound awards have long gone. Nowadays, judges advise juries on libel damages by making comparison with damages receivable for, say, a broken ankle, a broken leg or the loss of sight in one eye. I say that this is flawed. Those comparable damages are most probably the result of an accident whereas there is no accident involved in printing lies. We now see the top end of damages people receive for libel being in the region of £100,000 to £150,000. I understand the current proposal is that damages for personal injuries actions, and therefore libel damages, are to be increased by approximately 10%. I will explain why that is still inadequate.

Most people, particularly some minor celebrities or, more to the point, politicians, cannot afford to fund a fully fledged defamation case. Up until recently it has been possible for lawyers to take on those cases completely free of charge to the claimant. If they succeed, the lawyer is entitled to charge the claimant up to double his normal fee, and the claimant would then be able to claim this double fee from the defendant, together with the cost of procuring an insurance policy to cover the case in the event that the claimant lost.

I am advised this is all being discarded and will no longer be possible. Instead, from approximately 2013 we will have a situation whereby lawyers will be able to take on cases on a contingency basis. We have to look at the ramifications of this. Why would a lawyer, with all due respect to lawyers, take on a case on a contingency basis when the ultimate goal for the claimant may be in the region of £150,000? The lawyer’s share of that would not make up for the fact that the lawyer, when doing the case on a contingency basis, is risking not being paid at all if their client loses. And from the claimant’s perspective, any damages they receive would be eaten up by the contingency fee and the shortfall in cost between the actual costs and those costs that they are awarded from the defendant. I believe that this is a non-starter. We will have arrived back at a situation whereby only the rich, such as I, can afford to take on the media while others have to be beaten up and can do nothing about it.

I ask your Lordships to consider another commercial aspect of the media printing untrue stories. If a newspaper decides deliberately to print a pack of lies on its front page to attract more readers at the point of sale, that is a much cheaper way of boosting a paper’s circulation than engaging in an expensive television advertising campaign. Why is it much cheaper? Because the media can immediately agree in communication that what they wrote was wrong and addend it with, say, a Part 36 offer of £50,000, thus throwing the gauntlet down to the claimant as to whether they wish to risk going to court—a very cheap way of dealing with things with little or no apology required. Apologies in any case, as your Lordships know, are usually postage-stamp-sized and not on the same page as the offending article. In most cases they are buried towards the middle of the newspaper without so much as a picture of the offended claimant. This matter has to be addressed and the noble Lord, Lord Mawhinney, was quite right to raise it here. I think newspapers must be forced by the courts to print a retraction or apology on the same page as the offending item appeared and with the same prominence. This, together with higher damages, will make them wake up and act far more responsibly.

On the technical front, whereas in the past the claim of fair comment in an article had to be supported by facts within that article, I am advised that this has changed or that there is a proposal for changes to that effect to be embodied in the Bill, so that the facts supporting allegations made in an article do not have to appear in the article itself but just have to be facts that existed at the time the article was written. The writer does not even have to show that the readers of the article in question would have had to know those facts. As a possibly stupid but extreme example, a journalist might write an article saying that in his opinion a particular person was a thief and a thoroughly untrustworthy individual without referring to any facts to support that in the article. If challenged in court, he might say that the person he wrote about—say, a middle-aged man—once stole a Mars bar from a sweet shop when he was seven. The statement does not have to be a reasonable one or even one a reasonable man could have held; it just has to be that person’s honestly held opinion, however bigoted.

I am further advised that the defence of responsible journalism, also known as the Reynolds defence, is now being modified. These days when a journalist phones me up with an allegation of something or other, I say, “Sorry, old chap, but you are wrong and I am not prepared to comment. I do not see why I should become your editor for an article which you wish to produce”. Why should the onus be on the claimant to go into detail as to why an article should not be published or why the article is inaccurate, presenting all the facts to the journalist in order to be able to rely on that statement at a later stage, should the matter ever go to court? However, as I understand it, if I do not do that I am at risk of the journalist subsequently relying on the responsible-journalism defence by saying, “I did seek his comments but he didn’t tell me why what I was writing about him was wrong”. I do not think that that is fair. My method is very fair. I should be able to say, “I’m not your editor; I have told you that what you’re about to print is wrong, and it is at your risk that you go ahead and publish it. In the mean time, I will reserve my rights”. That is how it should be; after all, I did not ask him to write anything about me.

I conclude, however, on a more upbeat matter. It is not all doom and gloom. I applaud the fact that many cases may now be heard without a jury. I support that completely because in the past, I am afraid to say, claimants who are not used to being in a witness box have been badgered by smart lawyers and made to look either stupid or like liars. Another important aspect is that jurors often cannot follow the finer legal points being raised by both parties and can sometimes come to their verdicts based upon their opinions of the individual who is bringing the action—in other words, their personal thoughts on whether they like the claimant as a person or what they stand for in public life. That clearly is not fair and I welcome the fact that a judge who can see through the badgering of a witness will ultimately decide the verdict on the facts and the law. I ask the Minister to take into consideration the points that I have raised

16:26

[Lord Lester of Herne Hill]

My Lords, unlike the noble Lord, Lord Sugar, I warmly welcome this much-needed Bill. Its central aim is to reform English defamation law to strike a fair balance between the fundamental right to freedom of expression, public information and the protection of a good reputation. As the noble Lords, Lord McNally and Lord Browne of Ladyton, have said, the Bill is needed to give better protection to free expression, while ensuring fairness and responsibility in journalism, the necessary protection of the right to a good reputation, and access to justice by the weak against the rich and powerful. It is not and must not be an unbalanced charter for the media. It has to protect the journalists, scientists, doctors and activists caught up in recent cases.

I very much welcomed what the noble Lord, Lord Browne, had to say. I express my admiration of Scots law, which he was too modest to mention. My experience has been that in this area Scots law and practice has been more progressive than it has been south of the border. I will always remember Lord Keith of Kinkel in a case that I argued in front of him. He was a breath of fresh air in the House of Lords in giving leadership in that case. That ought to be recorded.

The Bill has been prepared in light of the report by the well informed Joint Committee on the Government’s draft Bill, ably chaired by the noble Lord, Lord Mawhinney, the public consultation, and the views of civil society and the media. The unsatisfactory state of English defamation law is notorious and well recognised here and abroad. It is mainly based on the common law and has had very limited scrutiny by Parliament for more than a century. Its subject matter is too important to be left to the courts to reform on a piecemeal basis. That is not their function. The legal principles need to be prescribed by Parliament and guide the courts to interpret and apply the law.

English common law suffers from uncertainty and encroaches too broadly on free expression. It has failed to adapt to the changing world of communication by means of the internet and the world wide web. The litigation common law engenders is costly and often protracted. It has a severe chilling effect, as many noble Lords have said, on free speech—not only of powerful newspapers and broadcasters but of regional newspapers, NGOs and individual public critics. That chilling effect breeds self-censorship and impairs the communication of public information about matters of legitimate public interest and concern that are vital in a modern democracy. Under the previous Government, Parliament recently abolished several common law speech crimes inherited from the Court of Star Chamber, including criminal libel and judicious, blasphemous and obscene libel. I say in the presence of the Minister that I hope that we will soon, as the Law Commission suggests, abolish the archaic common law crime of scandalising the court—a crime used to punish journalists elsewhere across the common law.

However, the fear of damages and massive legal costs induced by civil libel law is markedly more inhibiting than the fear of criminal prosecution. It is the NGO, the whistleblower, the citizen critic or the website host who tends to take the line of least resistance by censoring information and opinions which the public need to know in order to avoid the costly and uncertain litigation that benefits many of my friends and fellow practitioners at the English Bar.

I will say something briefly about the Leveson inquiry. I welcome the fact that the Government have not been blown off course by the Leveson inquiry. Lord Justice Leveson’s report may have implications especially for Clause 4 on the defence of responsible publication and on whether the successor to the Press Complaints Commission should be recognised without being regulated by the Bill to enhance public confidence about its independence and effectiveness. My right honourable friend Simon Hughes MP expressed concern in the other place that, if Lord Justice Leveson does not produce recommendations until December, it may be necessary to come up with further legislation. That would be regrettable. I would hope that it might be possible for Ministers to suggest to Lord Justice Leveson that he make an interim report soon with his recommendations for better regulation of the independent press so that we may take it into account during the passage of the Bill in this House. I know that the noble Lord, Lord Hunt of Wirral, hopes this too. He is unfortunately unable to take part in this debate but he has authorised me to say this.

In scrutinising and improving the Bill, the first aim should be to strike a fair balance between private reputation and public information as protected by the common law and the constitutional right to free expression. The second aim is to simplify and clarify the law to assist the claimant whose reputation has been significantly and unjustifiably damaged. The third is to require claimants to demonstrate that they have suffered or are likely to suffer real harm as a result of the defamatory publication of which they complain. The fourth is to modernise the defences to defamation proceedings, in accordance with the overwhelming requirements of the public interest so that free expression is not chilled by self-censorship and coercive litigation. The fifth is to discourage so-called libel tourism. The sixth is to encourage the speedy resolution of disputes, including the use of mediation and alternative dispute resolution as well as wise, firm and early case management by the courts. The seventh is to make trial by judge alone the normal mode of trial, rather than trial by judge and jury. To my surprise, I discovered that the media much prefer the reasoned judgment of a judge to the uncertain and occasionally arbitrary trial by jury. The final aim is to modernise and extend statutory privilege. I hope that we will manage to get rid of what is known as the “Neil Hamilton defence” in Section 13 of the 1996 Act

The Bill does not deal with changes in the civil procedure and costs rules, which are as important as the Bill itself. As the noble Lords, Lord Browne and Lord Mawhinney, have emphasised, it is important to know how the Government intend to enhance access to justice and to create a level playing field between the strong and the weak. It is also important for the Civil Justice Council, chaired by the Master of the Rolls Lord Dyson, to begin its work urgently on the new procedures during the passage of the Bill. I very much hope that it might be possible to do that before the Bill leaves this House—at least in some draft form.

I turn briefly to one or two aspects of the Bill that have been mentioned and need to be explored in Committee. I shall concentrate mainly on Clause 4—the defence of responsible publication—which, as currently drafted, is regressive. My right honourable friend Simon Hughes MP noted that the Reynolds defence does not work and that we need to move from the common law position. As counsel in Reynolds, I enthusiastically agree. I was unsuccessful in persuading the Law Lords to adopt a workable public interest defence for responsible publication. Instead, they adopted a list of factors which have made the defence virtually unworkable. In my Bill, we attempted to produce a shorter list of factors, and the Government have made a similar attempt in Clause 4. However, the clause has been widely, and rightly, criticised by the Official Opposition and Simon Hughes in the other place and by the Libel Reform Campaign.

Clause 4 rightly abolishes the common law Reynolds defence but it does so without adequately reflecting the importance of editorial discretion, as emphasised by Lord Dyson and by the Supreme Court in Flood. That increases the likelihood that judges will revert to treating the list of relevant factors as a check-list and be tempted to put themselves in the position of editor when determining whether or not publication was responsible, rather than respecting a range of permissible editorial judgments.

Various proposals have been put forward—I shall not bore the House by going into them at this stage—but I suggest that what is needed is a clause that sets out the principles of protecting honest and reasonable publication in the public interest, which deals with mistakes and ongoing publication, and which respects editorial discretion. We need what the Guardian editorial describes today as:

“A robust public interest defence that offers some security where matters under debate are of public concern and are the subject of honest opinion”.

As the noble Lord, Lord Mawhinney, and the noble Viscount, Lord Colville, have said, the trouble with listing factors is that they become a check-list that may be underinclusive or overinclusive and they lack legal certainty. In my view—and, more importantly, in the view of the leading experts on defamation law, Sir Brian Neill and Heather Rogers QC, to whom I express admiration and gratitude—it is far better to articulate the general principles of this key public interest defence without setting out a list of factors, leaving it to the courts to interpret and apply the principles on a case-by-case basis.

I suggest—it is only to get the civil servants thinking that I mention it at this stage—that Clause 4 might be replaced by a provision on the following lines. This does not come from me; Sir Brian Neill suggested it. First, it might say that it is a defence in an action for defamation (a) for the defendant to show that the statement complained of was on, or formed part of a publication on, a matter of public interest, and (b) if the defendant honestly and reasonably believed at the time of publication that the making of the statement was in the public interest.

Secondly, in the case of publication for the purposes of journalism, the court shall, in determining whether the requirements of (a) and (b) are satisfied, give a wide discretion to the editor or other person responsible for the publication as to the content of the statement, the form in which the statement was made and the timing of the publication. That really comes from Lord Dyson in Flood.

Thirdly, for the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion. Fourthly, a defence under this section shall not succeed—I repeat: shall not succeed—if the claimant shows that he asked the defendant for the publication of a correction of the statement complained of and that the request was unreasonably refused or granted subject to unreasonable conditions. In my view, that encapsulates what should be the defence without the need for a check-list of exhaustive or non-exhaustive factors.

On a different point, Clause 5 deals with the liability of website operators for material posted by third parties. The detail of the new rules has wisely been left to be dealt with by regulations, as we have heard. That is sensible, given the complexity and changing nature of the issues involved. However, like, the noble Lord, Lord Browne, I suggest that the draft regulations should be published when we consider Clause 5 in this House. As he has indicated, regulations should be subject to the affirmative resolution procedure because of their importance in this country and internationally.

Perhaps I may say a word about Clause 9 that the Media Lawyers Association drew to my attention and which no one has mentioned so far. Clause 9 deals with proceedings against a person who is not domiciled in the UK or in a member state of the EU or of the Lugano convention. I am not sure why it deals only with that and not with proceedings brought “by a person”. Clause 9 should deal with both “by” and “against”, unless there is some good reason to the contrary.

The Bill provides a once-in-a-generation opportunity to reform this area of the law. We are being watched attentively across the common law world where English law has had a bad influence, to the point where the United States Congress and President Obama legislated to prevent English libel judgments from being enforced there. American media lawyers have told me that they wish that they could do in the United States the kind of reforms that we are contemplating here. In the words of today’s Guardian editorial:

“The better free expression is protected here, the better the UK can argue internationally against oppression and persecution”.

16:41

[Baroness O'Neill of Bengarve]

My Lords, it is a great honour to speak after the noble Lord, Lord Lester of Herne Hill. We all owe him a great debt for his persistence, his focus and his depth of knowledge on these topics. I shall be briefer but I have two interests to declare. First, I am a trustee of Sense about Science, which has worked to improve the ways in which scientists and science writers communicate with the public and to reduce the risk thereby of them being taken to court for defamation if they are challenged by received views or very often by commercial interests. My second interest is perhaps proleptic: I have been nominated, but not yet confirmed, to chair the Equality and Human Rights Commission.

Defamation raises extraordinarily complex issues and the Bill not only has to deal with the deficiencies of current legislation, on which there is a considerable measure of agreement—its costs, its delays, its uncertainties and its clarities—but it has to do so, as many noble Lords have noted, in the context of huge transformations in communications technologies, about which I shall say nothing in detail. However, these changes are central to many other pieces of legislation that we have considered and shall be considering. We need to take a consistent view across different pieces of legislation. For example, I have in mind legislation that bears on copyright in the digital age and on the need to reformat material—for example, for archiving, preservation or republication—but not on material that is deemed thereby to have breached copyright or to have published a new work.

We need to take account of that in debates about the draft regulations for data protection, which, if implemented, will lead to a uniform approach to data protection across the EU. We need to bear that in mind in all legislation that bears, or purports to bear, on forms of transparency and openness and on the protection not only of rights of reputation but of rights of privacy. I believe that this is a central piece in a jigsaw of legislation that has come before us, and will come before us, which makes it all the more complex and important to get it right and to test it in a full range of ways.

It has been widely said, and it is expected, that your Lordships’ House will insert a public interest defence into the Bill to distinguish between different types of communication, with the aim of protecting those in the public interest from accusations of defamation—at least up to a point. For example, communicating scientific findings needs protection precisely because some may think that this is very unwelcome and may harm certain reputations, including, of course, commercial reputations. I believe that Karl Popper’s famous claims in The Open Society and Its Enemies are still a landmark in liberal society because of his insistence that science and the public understanding of it proceeds by conjecture and refutation. Science is not a matter of discovering and then asserting what is true, but a systematic practice of identifying claims that might be true, testing them against evidence, seeking new evidence if necessary, and discarding claims that fail the test of evidence. Scientifically impressive claims are those that survive energetic attempts at refutation, so we must allow the statement of scientific claims that might turn out to be false in order to test them.

Unless we allow the publication and promulgation of claims that may be false, science cannot proceed and communicating science to wider audiences will be severely harmed. However, I do not think this means that anything goes. While the legislation provides for protecting peer-reviewed scientific publication, which is very important, it does not yet offer ways to protect science journalism, other science writing and other journalism that seeks to investigate matters of academic substance from the risk of silencing by corporate or other interests. Given the costs—of which we have heard a certain amount—to those sued for defamation, such silencing is likely to be mainly invisible: a matter of subtle deterrence that prevents the public knowing what is not published.

Of course, we cannot demand that science writing, science journalism or other journalism on matters of fact should undergo peer-review processes. Peer review has different aims and is too slow and too costly, although I accept that the reality is that much of this writing and journalism is done by practising scientists and reflects a culture that takes those standards seriously. However, we can say something about some of the more elementary standards which science writing and other serious writing should meet if it is to be protected by any public interest defence. Even if we cannot immediately set out sufficient conditions for publication to count as a matter of public interest, we can set out some necessary conditions for it to do so.

A few years ago, as all of us remember with some nostalgia—or perhaps not—we were fairly good at distinguishing between gossip and publication. Publication could be regulated to prevent defamation if one knew who the publisher was. Defamatory gossip often did not travel far and was dealt with by local social sanctions. Gossips acquired a bad reputation and malicious gossips acquired a poisonous reputation. Malicious gossip traditionally became a matter for legal action only in unusual cases. Today that boundary is eroded. As the noble Lord, Lord Mawhinney, said, we encounter anonymised publication on a global scale and with global reach. These waters can be dangerous. Anonymised communication may cloak poison pens, those bent on revenge, those with undeclared financial interests and, of course, good old malicious gossip. Anonymity with global reach is available and makes defamatory communication much easier. A problem that we must address in passing this legislation is first to distinguish communication that is in the public interest—and so should receive protection—from quasi-communication that should not.

Let me explain quasi-communication. Part of the remedy here is quite simple; any speech or writing that is in the public interest should at least meet minimal standards to count as communication and not the lower standards required for mere dissemination or disclosure of content, whose origins, assumptions and authors can remain hidden and immune from questions about their methods and assumptions, their claims and their evasions. The public interest is indeed an interest in openness but not an interest in mere disclosure. That, so to speak, is the unintelligent form of openness. The intelligent form of openness meets more than those minimal standards; it opens matters to check and challenge by members of the public.

The communication, as I see it, that deserves protection is forthright and challengeable. It is designed to be accessible to others, is intelligible to them and provides adequate information for readers, listeners or viewers to assess the evidence and assumptions on which it was based and, if they choose, to respond. I do not see a case for protecting quasi-communication that does not meet the adequate standards for the openness to check and challenge, except in a limited number of cases, which I will come to.

A great deal of content that floats around the internet may be accessible. Some of it of course is very hard to find. Much of it is intelligible, at least to some, and often to many, audiences. However, anonymised content often is simply not assessable. By contrast, responsible journalism and other writing, including science writing and broadcasting, are both intelligible and assessable by others. There may, as I suggested, be limited exemptions, for example for highly sensitive types of investigative journalism, which we shall have to consider, but by and large anonymised communication is simply not assessable by the public. They cannot tell whether it is rumour—and if so, malicious rumour—or whether it is the smoke of a burning fire that they need to look at closely. When a query about data, evidence or measurement arises, no one can seek clarification because the information is just floating around as mere content and no one’s word.

The communication that we need therefore to protect is not mere dissemination or disclosure but genuine communication that seeks to reach its audience, aims to be intelligible to them and is assessable by them. That, I think, is the starting point for public interest defence that would reach into many of the areas that have worried many Members of your Lordships’ House who have spoken in today’s debate and many members of the public.

16:52

[Lord Morris of Aberavon]

My Lords, I apologise for being a little late and mistiming my arrival from my Millbank office. This is an important reforming Bill, even if it does not set the Thames on fire. As my noble friend Lord Browne of Ladyton reminded us, good work was commenced under Mr Jack Straw and continued by this Government. There have been important contributions from many bodies. Above all else, I pay tribute to the energy and scholarly pursuit of the subject by the noble Lord, Lord Lester, without whose work we might not be debating this issue today at all. We have all benefited by the publication of a draft Bill and the subsequent consultation. In the committee, we valued the heavy lifting done by the noble Lord, Lord McNally. Contrary to the surprise expressed in the Commons, Governments of different hues do pursue Bills whose groundwork has been done and prepared by previous Administrations.

On this occasion, Parliament took the wise course of setting up a pre-legislative committee, from both Houses, on which I served. The substantial unanimity on the need for reform that already prevailed was consolidated by the unanimous report of the committee under the wise chairmanship of the noble Lord, Lord Mawhinney. The noble Lord and the committee were able to deliver on time. The committee was fortunate in his leadership. It had a formidable task. None of us, I believe, was a leading expert in this rarefied field of law. My only experience, as a lifelong criminal practitioner, was advising on one case of defamation alone in my whole career. Perhaps this was a good thing. But throwing a discrete subject like this into the laps of parliamentary colleagues— however distinguished—was a heavy burden to tackle. There is a general belief in favour of pre-legislative scrutiny but it comes at a price. We sat for 18 sessions from April to October, and each session entailed considerable preparation. It may be an indication of how much time was saved to Parliament that the Commons disposed of it in five sessions of Committee. I do not propose to make any Committee points, but will concentrate on the broad thrust of some aspects of the Bill. We shall return in due course to look at some of the valuable comments made and some of today’s observations from the noble Lord, Lord Lester.

I welcome the Bill now, as I did in the committee, and give it my support, subject to what I have just said. Its object is to simplify the law of defamation and to make the law more transparent and more accessible, laying the ground for reducing the stratospheric and chilling state of costs in that field of litigation.

The Bill’s twin aims are to protect freedom of speech and at the same time provide adequate protection for reputation. It also seeks to come to terms with the technological developments of our age. The man or woman in the street needs easy access to the law, hence the observations of the noble Lord, Lord Mawhinney, that he prefers statute to common law. That may be so, but we should seek to ensure that the burdensome costs of bringing and defending actions, particularly cases brought by the powerful, are made more tolerable.

In addition to legislation, a great deal can be achieved by the reform of court procedures and stronger, earlier case management by our experienced judiciary. This should be strongly encouraged. The missing link in this debate, which we have been told about already—the lacuna—is the lack of publishing of regulations and the Civil Procedure Rules necessary to achieve this. The Government have had enough time to lift this veil. It is a serious criticism which should be remedied before too long; we should know what they have in mind as regards the regulations and changes in procedures.

Trial by jury has now to all intents and purposes fallen out of use. I remember the time when one of the most senior High Court judges, Sir Michael Davies, presided over most such trials. When the jury came to assess damages, he suggested that if they regarded the damage to reputation to be high, they should think of the cost of a detached house; if moderate, the cost of a medium-sized car; and if comparatively small, the cost of a nice holiday. Such words were a simple guide but, as far as I can recollect, they usually seemed to work.

The very fact of the possibility of a jury trial—remote as it now is—increases the cost of preparation and delays decisions. As part of the process of aiming to reduce costs, it was wise of those drafting the Bill to try to eliminate the possibility even further. In practice, it would no longer be a presumption. The matter will be left to the judges, but there may still be those rare instances—and the committee considered them—where, for example, public figures are involved and judges might find it in the public interest to have a jury trial. I hope that they would be very rare indeed. As one who has spent more than half his life addressing juries in criminal cases, I do not yield one iota in my defence of such a system where the liberty of the subject is at risk. We had some indication in the comments by the Minister that there would be, in effect, no read-across to criminal trials. I am sure that we will get that assurance before the end of this debate; I would value it very much.

The committee wrestled with the problem of definition but could not come up with one save to leave it, as I have said, to the experience of judges and a practice which has hardened over the years. The issue of limiting costs goes deeper. There should be every encouragement to the early determination by a single judge of many of the issues. Where jury trial in a particular case remained on the table, it would fetter their jurisdiction to determine many such matters. The costs implications are obvious. The simplification of the law and the early determination by a judge of issues, including striking out, coupled with the possibility of mediation and arbitration, should go a long way to lower costs.

The draft Bill proposed that,

“a statement is not defamatory unless its publication has caused or is likely to cause substantial harm to”,

a person’s reputation. The committee was persuaded by the noble and learned Lord, Lord Mackay of Clashfern, that there were better words for the initial hurdle that had to be overcome and to include “serious harm”. The Bill now proposes what is hoped would be an even simpler and, equally, a slightly stricter test of,

“publication … likely to cause serious harm”,

on its own. I surmise that there may not be a great deal of difference in practice, but it seems to raise the barrier just a little to the bringing of actions. Only time will tell, but I welcome this formulation, and we will see.

This brings me to an important point of procedure for all pre-legislative committees. It is important that the proposers of a Bill make it clear, in a way that the courts can take into account, when that Bill is seeking to make changes of substance in the law and when it is simply proposing to codify the common law. That is a vital distinction. Such a course would have been a great help to the committee and perhaps to the courts. Having said that, I was perhaps more alarmed than my colleagues in foreseeing the possibility, if not the probability, of litigation on the meaning of some of the words in the Bill. Despite the care and consideration that has been shown in its drafting, I surmise that this is inevitable, at least in the earlier years after it becomes an Act. I suppose that that is the price of any purported reform of the law.

I bear the scars of having assisted in the introduction of the breathalyser Bill in 1967—another inherited Bill—and of becoming one of the architects of a small cottage industry of litigation for a few years. The overriding object of ensuring that people of all backgrounds have access to the legal system should they be seriously defamed is a worthy one. The aim of reducing costs, one hopes, will minimise the chilling effect of the present system, which is out of reach of many people. I welcome the creation of the defences of “truth” and “honest opinion” to replace the common law defences of justification and fair comment. I also welcome the creation of the new defence of:

“Responsible publication on matter of public interest”.

It is new in the sense that it abolishes the common law defence known as the Reynolds defence. We have heard the noble Lord, Lord Lester, today, and recent submissions have been made to many of us. I suspect that in Committee we will have to examine this very closely and see whether it has achieved what the Government had hoped it would. Noble Lords have to pause for only one moment to consider that some of the issues that I have raised may well be ripe fields for litigation.

Lastly, there is a brave attempt in Clause 15 to tackle some of the problems of the internet. In the department’s memorandum prepared for the Delegated Powers Committee of this House, it indicated that provisions for the new notice procedure are likely to,

“be lengthy, detailed and technical and are not considered suitable to be on the face of the Bill … The aim is to provide greater flexibility to adjust aspects of the new procedure in the light of experience”.

As we all know, this is a field of rapid developments, and primary legislation would not cope with what may be the needs of the future.

The committee spent a great deal of time as part of its emphasis on cost savings on early resolution and believed in the development of a culture in which expensive legal action is the last, rather than the first, resort. I cannot improve on the words of the committee dealing with a strict enforcement of the pre-action protocol. It referred to,

“a presumption that mediation or neutral evaluation will be the norm; voluntary arbitration; and, if the claim has not been settled, court determination of key issues using improved procedures”.

I hope that in our consideration, the committee has assisted the Government and the House in what is an important and worthy reform.

17:06

[Lord Black of Brentwood]

My Lords, I declare an interest in this subject as the executive director of the Telegraph Media Group and draw attention to my other media interests in the register.

This is a remarkably special day, for, although not quite as infrequent as the appearance of Halley’s Comet, sightings of defamation Bills are rare and equally moments of great awe and wonder. That there should have been a gap of only 16 years since the previous piece of legislation, a period of time in which there has been the most unprecedented change in the way in which people communicate, is cause for rejoicing. The Bill is long overdue and extremely welcome.

That we have got to this point is the result of a great deal of hard work by many people who have already been mentioned in the debate. I join others in noting that all those with an interest in free speech owe eternal thanks to the noble Lord, Lord Lester of Herne Hill, who has consistently championed the cause and never given up the fight. I am delighted to join everyone else in being a fully paid-up member of his fan club. I should also mention the role played by the editor of the Guardian, Alan Rusbridger, an indefatigable campaigner for reform, and by Britain’s regional and local press, which has often borne the brunt of the chilling aspects of the current legal framework, which the noble Viscount, Lord Colville of Culross, outlined so well.

I will inevitably speak about the Bill from the media perspective, but in doing so I am acutely aware that the media’s interest in this issue is but one small part of it. Defamation and freedom of speech are intimately bound together and freedom of speech is the birthright of every Briton. In the digital age, when the ability of a single citizen to publish views on a bewildering array of platforms has never been so great, the question of defamation is important for us all. While a century or more ago, it might famously have been the preserve of the Duke of Brunswick and his manservant, today everyone has a stake in it. The media might still provide the headline-grabbing cases, but never have individuals been so exposed to the threat of long drawn out legal action and the punitive costs that go with it. The changes in the Bill will clarify and simplify the law, which will be of great benefit to claimants as well as defendants.

The media are always likely to be at the sharp end of defamation because of their reach, especially in the digital era. It is the profound, breathtaking changes that have taken place in technology that must form the backdrop to the Bill. When the previous piece of legislation went on to the statute book in 1996, the media and many forms of communication in general existed in much the same form as they had for decades. Few newspapers had websites—the Telegraph was the first to launch one in 1994—and they were merely static replicas of printed products. Some 16 years later, that world is dead and a new one is in being. Today a media group such as the one I work for does not just have a 30-odd-page printed product, but a digital offering which in our case produced 408.5 million page views in August alone from across the globe, some 190 million of them from outside the UK. Even now, the manner in which people are accessing that information is changing by the month. In July 2011, 17% of page views on the Telegraph website were via an app. That figure now stands at 30% and is growing rapidly.

In many ways, this issue of technological change goes to the heart of this Bill. To stand the test of time, it must be flexible enough to accommodate rapid developments in technology, which are not just changing the face of the media but communications between citizens. We do not want the fate that befell earlier pieces of defamation legislation. A flurry of libel Acts in the 19th century were made redundant by the arrival of the mass media in the 1890s; the 1952 Act preceded the arrival of commercial broadcasting; and the 1996 Act coincided with the burgeoning of the internet.

We have a real chance in this Bill to produce something that is practical, flexible and above all durable. We must seize it. I believe that this admirable Bill goes a long way to achieving that, in particular with the introduction at long last of the test of serious harm, which is a sensible and proportionate initiative to stop trivial claims that waste the time of the courts. This is extremely welcome. Later I will suggest how it might be strengthened even further to deal with the scandal of libel tourism.

However, against the background of the changing world of communications that I have mentioned, perhaps the single most important part of this Bill is Clause 8, which introduces the single publication rule. This change is vital to the future development of the communication industries in particular, as it will protect them against the current indefinite liability arising from the application of 19th century case law in the 21st century age of tablets, smartphones, Google, Facebook and Twitter.

News no longer appears once a day or once a week, but is likely to be permanently available for updating and rereading in digital archives which are growing at an exponential rate. Indeed, consumers now expect to be able to find old news whenever and wherever they want it. Journalists prepare their work for publication accordingly, in information services disseminated across multiple media platforms, be it printed, blogged, tweeted, texted, accessed by app or mobile, broadcast or streamed, in text, sound or audio-visual media, or a combination of all of them.

It is therefore a vitally important step to ensure that there will be protection for subsequent publication of a statement,

“which is substantially the same”,

as that first published to the public. If there is one slight problem with the Bill, against the background I have mentioned, it is with Clause 8(4), which waters down this protection. Subsection (4) says that the rule does not apply,

“in relation to the subsequent publication if the manner of that publication is materially different from the manner of the first publication”.

That subsection takes no account of the fact that content is now published simultaneously on a range of different platforms; this means, arguably, that the manner of publication is almost inevitably different. To be effective, this clause needs to be crystal clear and at the moment it is not. I hope that my noble friend will look at this again in Committee to ensure that Clause 8 is genuinely fit for purpose in the digital age.

There are a number of other important issues to look at in Committee. The introduction of the responsible publication rule in Clause 4 is, in principle, very welcome; it seeks to import into statute the defences established in Reynolds. Those defences are of massive importance, not least to investigative journalism. Reynolds itself is an objective test. We need to ensure that this Bill neither undermines it nor, worse, neuters it by introducing a new set of defences which the courts may then spend another decade interpreting and the uncertainty of which could be profoundly damaging. I wholly agree with the points that my noble friend Lord Mawhinney made on this. Current case law makes clear that all the relevant factors can be taken into consideration by the court. Like the noble Lord, Lord Lester, I do not believe that there is a need for a tick-box checklist of factors. Setting them out in Clause 4(2) of the Bill is a high-risk strategy. I believe that to avoid potentially dangerous instability in this area, this list should be removed and the courts should be allowed to rely on and refer to the existing Reynolds criteria.

On one issue where I have concerns about the Bill, I will share the points made by the noble Viscount, Lord Colville of Culross. Clause 12 hands to the courts the power to order the publication of the summary of a judgment. This is potentially tantamout to giving judges the power to dictate the content of a newspaper or magazine front page or the running order of the 10 o’clock news, and is inimical to any basic concept of editorial and press freedom or indeed of an independent media. It is also a matter that is already covered by the appropriate media regulatory codes of the BBC Trust, Ofcom and the PCC successor body. There is no evidence that these have ever failed to produce a satisfactory publication of the summary of a judgment in a defamation case. The clause is both otiose and odious, and it should go.

I make a couple of general points in closing. I am concerned that the Bill does not do enough to tackle the issue of libel tourism. Clause 9 of the Bill does not deal satisfactorily with it because it is about claimants domiciled outside the EU, not defendants. It therefore does not address the problem of media companies in an age of global media being vulnerable to being sued in different jurisdictions under different laws for the same publication. I wonder whether the way to deal with this modern scourge might be to amend Clause 1 by making clear that publication is likely to cause serious harm to the reputation of a claimant only in England and Wales. I hope that the Minister will be able to look at that.

Like a number of others who have spoken, I must mention in passing the issue of high costs, which are still a problem in libel cases. I very much welcome the Government’s intention to bring in CFA reform in April, and indeed the work of the costs management pilot scheme dealing with defamation. For all this to be meaningful, though, the Bill needs to be complemented by changes to the rules of court to ensure that cost controls become the norm, not the exception, and that the new procedure is adopted to allow matters such as meaning, or whether something is comment, to be determined early. In the mean time, both claimants and defendants could be greatly assisted by the immediate removal of the practice direction that limits cost-capping to exceptional cases, as the Joint Committee on Privacy and Injunctions, of which I was a member, recommended. I urge speedy progress on this front.

In a recent lecture on this subject, Alan Rusbridger said, quite rightly:

“The truth is libel doesn’t exist in a vacuum”.

You cannot discuss one thing, he said, without looking at other issues that impact on freedom of speech, and that is absolutely right, a point also made with great clarity by the noble Lord, Lord Mawhinney.

This is a welcome, liberalising measure that, especially if amended under your Lordships’ eagle-eyed scrutiny, will have a positive impact, not just on investigative journalism but on every citizen’s rights to free expression. However, all that would be for naught if the current debate about press regulation led to the implementation of some form of statutory press controls, which would point very much in the opposite direction—it would be giving with one hand and taking away with the other. I know that the Minister will not be able to comment on that, but I hope that he will, with his customary cheeriness, simply note the point. The Bill is an enormous step forward, and one that every citizen should welcome.

17:18

[Baroness Bakewell]

My Lords, this is indeed a momentous and welcome Bill, which has long been needed. Our libel law is out of date and recognised by many to have a chilling effect on free speech, not merely in this country but around the world. It has encouraged the phenomenon known as libel tourism and prompted legislation in the United States to protect American citizens from being sued in the UK. The UN Human Rights Committee has warned that our libel law could have a negative impact on the right to freedom of expression worldwide. Libel actions against individual citizens, reputable scientists and writers have been used to silence comment and criticism that is clearly in the public interest.

All this is known and understood in the framing of this Bill, and there is broad political and public consensus for substantial reform. This is our opportunity to frame a sound and robust defence of matters of public interest. So much has been acknowledged by the debate in the House of Commons. I trust that the debate and amendments that we frame in this House will endorse and strengthen the path of travel already taken. I pay tribute, as has everyone else, to the noble Lord, Lord Lester of Herne Hill, and to the noble Lord, Lord Mawhinney, and his distinguished Joint Committee on the draft Bill for the distance that they have already come on this important enterprise. A number of important elements, such as the single publication rule, the defence of honest opinion, and the protection for scientific and academic publications, are already addressed in the Bill. All these are welcome. But there remain many areas where further muscle is needed to beef up the protection of free speech in our society.

We live in a world with an abundance of fact, opinion and speculation, and the technical means to distribute them instantly round the world. It is inevitable that tensions will arise that are unique to the present day. As millions use Facebook and Twitter and write personal blogs, the exposure of so many to the dangers of legal action has suddenly become acute.

Here I declare an interest. I am a broadcaster and journalist. I am also a friend and broadcasting colleague of Dr Simon Singh. I have followed closely the case brought against him by the British Chiropractic Association in 2010, and I have given vocal and financial support to the campaign to have the libel laws reformed. I am also a member of English PEN and a subscriber to Index on Censorship. I pay tribute to the continuing efforts of these institutions to defend the freedom of speech and published comment in this country. As a journalist, I am aware of the extent to which the threat of legal action can inhibit the exposure of facts that are important for citizens to know. As an individual, I am conscious that by using Twitter I am exposed to further risk. A groundswell for the law to be strengthened in this House is upon us—and in support of our amendments.

I want to highlight two matters in particular, Clause 4 and the responsible publication of matters of public interest. There is also the issue of costs, which has been mentioned several times, and the extent to which they inhibit the possibility of justice being done. I want to give an example of how fast things now move. As recently as last week events drew our attention to the way in which the threat of libel is being used to silence reasonable criticism, and to a need for the defence of public interest to be clearly and unequivocally endorsed. It also demonstrates the dilemma of conflicting views of what truth and honest opinion are. This is what happened. The magazine, What Doctors Don’t Tell You, is according to its editor Lynne McTaggart aimed at intelligent women between 35 and 55. I no longer belong to that target audience, but I cannot but be attracted by its October cover, which headlines “Sunbathe your diabetes away” and “I avoided my hysterectomy through diet”. Inside it carried more seriously an article about the HPV vaccine, calling it,

“dubious … ineffective, and a highly dangerous solution to the problems of cervical cancer”.

On Monday last week Dr Simon Singh went on Twitter to criticise the magazine. He maintains that it is promoting advice that could potentially harm readers. On Tuesday the editor, writing on Facebook, called on subscribers to,

“fight the action of bully boys trying to stop us”,

and who want to push the magazine off the newsstands. Here is a case of conflicting statements, both claiming ownership of the truth. By Wednesday Dr Singh was threatened with legal action by COMAG, distributor of the magazine, which declared in an e-mail to him that it was unwilling to discuss the matter further and had within three days already instructed legal counsel.

The magazine, What Doctors Don't Tell You, was also the subject of criticism by last week’s Radio 4 programme “Inside Health” in which a GP called it “ridiculously alarmist” and “frankly wrong”. BBC lawyers, who were consulted before transmission, advised that because the editor Lynne McTaggart also spoke on the programme, it was giving fair and balanced coverage of the issue. The fact remains that a single individual, Dr Singh, a person who incidentally had to remortgage his house to defend himself against the chiropractors, remained exposed to the threat of libel from COMAG, a distribution company half-owned by Condé Nast.

I relate this particular matter to address two issues that need addressing further in the Bill: the issue of time and the issue of cost. “The law’s delay” has been common currency in this country since Hamlet first used the phrase and has become laughably familiar ever since Jarndyce and Jarndyce was mocked by Dickens in Bleak House. Today with the social media’s potential to prompt inhibiting threats of libel there is ever-pressing need for such cases to be heard promptly and resolved with the least possible time lapse which, of course, brings me to the matter of costs. Any law of the land that does not provide for equal access to justice for all is a flawed law. It has become clear that individuals and small-scale institutions posting opinions on web forums can be sued for their opinions. Mumsnet, Legal Beagles, and Carer Watch have all been sued for posting an opinion. In a statement made in November 2011, Dr Peter Wilmhurst said that he had,

“spent almost all my free time for 4 years and much money defending 3 defamation claims brought in England by an American medical device corporation, NMT Medical”.

NMT used the law to silence important medical evidence-based opinion. The case consumed time and money. Such abuse of the libel laws calls for radical remedy. This is our opportunity, building on the sturdy work of the Joint Committee and the Defamation Bill itself, to make that remedy robust and enduring.

17:27

[Lord Marks of Henley-on-Thames]

My Lords, I, too, welcome this Bill and in doing so refer to my registered interests as a practising barrister and arbitrator. I had the privilege of serving on the Joint Committee of both Houses under the chairmanship of my noble friend Lord Mawhinney and, like others, I pay tribute to his excellent and courteous chairmanship. I also add my tribute to my noble friend Lord Lester of Herne Hill for all the work and learning he has devoted to this issue over many years, for his Bill and for the help he gave the Joint Committee.

The balance between reputation and freedom of speech is now wrong. It is tilted against freedom of speech. Libel cases and the threat of such cases, often unwarranted, have been used by the wealthy and their lawyers to stifle legitimate criticism and debate. So, as the noble Baroness, Lady Bakewell, has just pointed out, academics who question the safety of medical procedures or pharmaceutical products, or journalists who investigate a company’s employment practices, have been warned off and forced to back down rather than run the risk of ruin. That runs strongly counter to the public interest in legitimate debate. But it is not only defendants who are frightened off. Private citizens, irresponsibly defamed in the media, are also deterred from action to protect their reputations by the cost and complexity of seeking legal redress. This Bill rightly seeks to shift the balance in favour of freedom of speech and at the same time to simplify and modernise the law in what has become an arcane and complex area.

I turn to Clause 4 of the Bill, which rewrites the Reynolds defence. My noble friend Lord Lester has argued persuasively that it would be better to omit the list of factors on the question of responsible publication and instead to state the broad principles in the Bill, which he set out in his speech. He would then leave it to the courts to develop those principles case by case. My provisional view—and I only differ from my noble friend Lord Lester in detail and with great diffidence—is that a reasonably clear set of guidelines would be helpful. It must not be exhaustive and it must never become a checklist of hurdles. We must avoid the kind of nightmare for publishers and broadcasters of which the noble Viscount, Lord Colville, spoke. Clear guidelines would provide an easily understood code, which is one of the aims of the Bill, enabling an intelligent layman to look up the law on the internet and understand it without the need to search for the cases and read the judgments in them to try to discern how the law is likely to be interpreted.

Alongside a public interest defence, the law should provide a public remedy for those defamed by reports that are genuinely published in the public interest but that turn out to be inaccurate and cause harm. This, I suggest, can be achieved without trespassing on editorial independence, as the noble Lord, Lord Black, suggested that it might. When that happens, a prompt public retraction or clarification and an apology, prominently published, should at least be encouraged. I would like to see provision for the court to take into account a prompt offer of such redress when dealing with libel cases. This could be introduced as part of an early resolution procedure or it could be as an alternative to a Clause 4 defence. Either way such a provision would be a welcome development of the law and would go much further than an offer of amends under the 1996 Act.

The Bill does not restrict the right of corporations to sue for defamation. The Joint Committee wrestled long and hard with this issue. One the one hand, corporations are not natural persons and have no feelings. Large corporations can and do use their financial muscle to stifle legitimate debate by threatening to sue their financially weaker critics. Such corporations may have other ways of protecting their reputations without suing their critics for libel. On the other hand, not all non-natural persons are big and powerful. Defamatory statements can destroy legitimate businesses. Weighing these arguments, the Joint Committee recommended, as had the Bill proposed by my noble friend Lord Lester, that corporations should still be able to sue, but only if they could show at least a likelihood of substantial financial loss. The Bill contains no such restriction, because the Government’s response to the Joint Committee argued that the serious harm test filled the gap. I do not entirely accept the Government’s argument. Serious harm to reputation is not the same as serious financial damage. The chilling effect of allowing corporations to sue is severe. In my view, they should have to show that serious financial loss is likely in order to be entitled to sue. The Bill as drafted fails to address this issue.

The changes in the substantive law proposed in the Bill are not enough to transform the system. As has been said, the staggering costs and the procedural complexity of defamation proceedings are at least as much to blame as the substantive law for the present inadequacy of the system. We must accept that defamation cases will never be cheap, but we could make them simpler and quicker and therefore less expensive. To do so we need changes to the rules to dovetail with the changes in the Bill.

First, there should be a single early resolution appointment in every case to determine as many issues as possible. I give a few examples: whether the serious harm test is met; issues about meaning; whether a statement was a statement of opinion, and whether the basis of an opinion was sufficiently indicated; whether a statement was on a matter of public interest; whether a subsequent publication was materially different from an earlier publication. Such an early resolution appointment would clarify issues quickly and would, I suggest, often lead to settlement. Furthermore, any claim that did not meet the serious harm test would be struck out.

Secondly, there should be more active, court-led case management throughout the life of every case. Thirdly, courts should be far readier to stay proceedings to allow for mediation or other forms of alternative dispute resolution, with costs consequences for failure to co-operate. Fourthly, we need some realistic costs control, including, in the light of LASPO, protection for less well off claimants. Qualified one-way cost shifting in defamation cases would do much to assist. Fifthly, I suggest, as the Joint Committee proposed, at least to trial this: all but the most complex defamation cases should be heard in county courts, with designated judges to manage and hear them in trial centres around the country.

I welcome the letter from my noble friend the Minister yesterday to all Members of your Lordships’ House promising to bring forward such procedural changes, but the Government’s response to the Joint Committee on the timetable for procedural change lacked urgency. I will take up a point made by my noble friend Lord Mawhinney. While it is right, of course, that the rules are the responsibility of the Civil Procedure Rule Committee, I remind the House and my noble friend that the Lord Chancellor has the power, under Section 3A of the Civil Procedure Act 1997, to give notice requiring that committee to make rules for a specified purpose. If he does so, the committee must make such rules within a reasonable time. It seems to me that for your Lordships properly to consider how we achieve meaningful overall reform in this area we should see the proposed procedural changes at the same time as we consider the substantive provisions in the Bill even if there may subsequently be changes in the light of any recommendations of Lord Justice Leveson. At the moment we are legislating while seeing only half the picture. I therefore urge my noble friend the Minister to encourage the new Lord Chancellor to draw up a draft and publish it quickly so that we can see the entire picture in its frame.

17:38

[Lord Triesman]

My Lords, I want principally to focus on a limited but to me important set of arrangements set out in this Bill, and like other noble Lords I am eager to see the accompanying documents to make sure that I have understood it all. During the debate in 2010 on the proposals of the noble Lord, Lord Lester, I felt myself occasionally swimming against a strong tide. Like others, I admire the noble Lord’s tenacity, but on some issues I simply am not at all sure that the point of balance of rights that he prefers is the one that I prefer. Like many of the speakers in that debate in 2010 and like many of the correspondents who have kindly sent their analyses of the Bill to me in advance of today’s debate, it is clear that there are significant numbers in favour of clarifications to the current legislation, and so am I. Most are exasperated by the cost of litigation and by people carpetbagging between jurisdictions to find an advantageous setting for their defamation actions. A significant proportion of the correspondence was concerned to prevent people from being silenced by powerful and wealthy corporations in the context of academic publication.

Of course, as you would expect, there were many restatements of the centrality of reporting and the expression of opinion for the health and vitality of our democracy. That has been repeated in more or less all the correspondence since 2010 and, again, I am not surprised. It is argued that actions for defamation have the impact of censorship and that we live in a democracy that should not tolerate censorship. The public have a right to know. It is a key principle. The exposure of corruption, injustice, negligence and incompetence and preventing misleading and dishonest statements and behaviour should always be open to public scrutiny. It would be hard not to go along with all that.

I have awaited this debate with interest because I wanted to see where the balance might be struck between all these concerns—I am clear that I share them—and the rights of individuals to protect their reputations and their privacy when it is legitimate to do so, and at a cost that they can afford, which was in part the burden of the remarks of the noble Lord, Lord Marks.

The debates in another place considered this balance. I was heartened by the acceptance of the right to legitimate protection of reputation irrespective of one’s means: that is, less wealthy people should be able to protect themselves. That concept often appears much less important than it should in debates, including in this debate if I may say so. Justice for all has to mean exactly that—justice for all, not justice for the well heeled. This was at the centre of my concerns when we debated the proposals of the noble Lord, Lord Lester, and it remains so today. I am not disposed to say nothing about the issue because of the risk of being associated with the so-called “chilling effect”, a phrase much loved by the print media. I suppose that the hyperbolic impact of the phrase is intended to capture a profound truth, but actually it is simply expected to restrain anyone from probing rather more deeply into what a proposal might mean.

Perhaps it is best to start with the positive, which should make it easier in due course to deal with what I think is less helpful. The committee of the noble Lord, Lord Mawhinney, has certainly helped us to approach the positive factors in a positive spirit. Of course, I am strongly committed to the freedoms of speech and opinion that underpin modern democracy. I have said so and I do not need to repeat it at length. It is absolutely right that these figure not just in the Bill but in human rights legislation itself. I completely agree that abuse of the libel laws in the ways that the noble Baroness, Lady Bakewell, has described is also deeply alarming. I am a passionate advocate of academic freedoms.

I had the privilege of taking part in the drafting of the 1997 UNESCO normative protocol on academic freedoms to which the United Kingdom is a signatory. It is worth going back to that document, given some of the assertions that it makes about protections and freedoms. It demands that signatory nations protect and defend academic freedoms for all academic teachers and researchers, with a fairly broad definition of that, precisely because what they publish or say may well, and with good reason, be testing, provoking or unpopular. The noble Baroness, Lady O’Neill, was 100% right to say that this is also the source of much of the structure of the debates that drive the process of accumulating knowledge. The aim of the protocol was to ensure that neither states nor powerful corporations could silence lectures or conferences or prevent publication. The United Kingdom was among the first to adopt the protocol, which was signed for this country by my noble friend Lady Blackstone.

In my view it must follow that we should extend protection in the area of defamation to prevent powerful and well heeled bodies stopping research publication or even threatening litigation to stop publication. The inequality of arms should never be a basis for undermining the fundamental responsibility of all researchers and teachers that is set out in the United Nations protocol and which has been central to the history of higher education in the United Kingdom. For those reasons the provisions in Clause 7 are welcome.

If I have one reservation, alongside the slowness and somewhat ponderous process of peer review, which the noble Baroness, Lady O’Neill, also mentioned, it is that it is not certain to me that peer-reviewed journals are wholly future-proofed. There is a trend towards digital publication and the encouragement of open-source provision of all information in science by the world’s leading universities. I think that is a great advance. Digital publication does not necessarily finish peer review, but it could do so, and you can see how easily it could. Indeed, in some of the newly developing disciplines peer-reviewed journals have yet to appear as journals as there are advances in the disciplines ahead of advances in publication. Perhaps in Committee we can improve on these provisions. It would be good to do so.

I fully support the intentions to prevent libel tourism, and I am equally eager to see a proper restraint on costs. Some of my criticisms might be mitigated if there were some means of limiting costs and the provision of some resource to enable less wealthy litigants to respond to illegitimate and on occasion feral attacks from rich and powerful media outlets. In reality their challenge to citizens is, “Come on if you think you can afford it”. The Press Complaints Commission has become a refuge for many people precisely because they cannot afford to tackle this issue by any other route. However, as we all know, it has not been a particularly effective refuge for people in those circumstances.

On page 4 of its briefing, Justice asserts that it has “seen little evidence” that conditional fee agreements,

“increased access to justice in this area”.

Rather, Justice claims that the scheme was generally used by the,

“same private individuals and organisations who would have been able to bring a defamation claim in any event”.

I am considering here not the merits of CFAs, for which Justice provides none of the evidence that it says it has seen and is probably wrong about, but the underlying implication that people are not really put off by risks and costs. I think they have done very little justice to those who are unable to take on media giants, which can be massively threatening and whose commitment to ethical conduct has been seen in all its gory detail at the Leveson inquiry.

As with the reasoning on the defence of academic research and teaching when pitched against the corporations, this legislation has to deal with the inequality of arms. This is where I have the greatest difficulty with the Bill as it stands. Paul Farrelly MP and Robert Buckland MP looked seriously at this issue in the other place. Mr Buckland rightly said that,

“there is a fine balance to be struck between freedom of expression and the rights of individuals to protect not only their privacy, but their reputation”.—[Official Report, Commons, 12/6/2012; col. 214.]

It has become possible for the less well off to be libelled with impunity and without significant remedy. It may be right at later stages of the Bill to discuss the occasions when judges have themselves undermined the possibility of a remedy. I am with the noble Lord, Lord Mawhinney, in saying that a government view on the management of these kinds of issues would assist ordinary citizens and that we should not be afraid of assisting citizens.

This brings me to the main areas in which I see weaknesses which I hope, given the spirit in which the debate has been introduced today, the Government will be willing to address. They are weaknesses on which Lord Justice Leveson seems likely to report. I do not know how wise it is to pre-empt his report, but we are where we are. First, in an attempt to prevent trivial and vexatious claims, the Bill attempts, according to the Explanatory Notes, to codify a tougher threshold on the serious harm issue than exists now. I can see why this is necessary, but I am not at all clear that the text as it stands in the Bill is an advance.

At present, the law tests whether there is or is likely to be an adverse impact on reputation. The replacement seems to me to involve a very detailed examination of all kinds of matters which I understand people would wish to examine but where it seems certain that there will be a significant increase in costs to possibly relatively little advantage. The noble Viscount, Lord Colville, believes that this might help. However, I fear that the detail required may greatly increase the price of the provision beyond the means of most people to afford it. Indeed, what would count is itself likely to have to be tested by the creation of precedents, because I doubt that we will see the answer hit upon instantly.

Secondly, it must be wrong to conflate honest opinion and responsible publication. It lends credence to a dubious assertion that it is difficult to separate fact and opinion. It will complicate things to the point of confusion in the relationship between a publication and earlier original publications. It confuses defamatory opinion with inaccurate fact, and I do not accept that it is difficult to distinguish between the two or to create tests that would distinguish between the two. It provides no viable definition of the word “responsibility” in relation to an opinion expressed.

Thirdly, Clause 3, covering “Honest opinion”, seems to someone who thankfully confesses that he is not a lawyer to take a curious view about the way in which people think of their justifications for what they do. At present, as I understand it, a defendant must show that he or she was aware of the facts relied on when publishing. Now it appears that a defendant would not need to know or to have made much effort to ascertain the facts that would justify an honest individual from holding an honest opinion. It is hard to see how you can be honest without at least having made an honest endeavour to find out what the facts were. I am hard put to imagine this exercising any restraint on a number of the newspapers or journalists that I know. It is a further licence to trash people without providing any really intelligible facts as a basis for doing so. That is why I so strongly support many of the things that my noble friend Lord Sugar said.

Finally, the concept of public interest has advanced somewhat in this Bill. I am clear that whatever sells a newspaper is believed by its publishers to be in the public interest, and I can see that it is very hard to provide a tighter definition, but there must be real merit in requiring a publisher to show that a journalist source was credible and reliable. I do not think that is what happens uniformly now, but it seems such a minimal provision. The BBC definition is a credible position, the Ofcom code is a helpful provision, and the NUJ briefing, I thought, was broadly sensible on all this, but it certainly needs more work in the later stages of the Bill.

I completely accept that we need to review and improve defamation law and to do so while protecting democratic accountability, guaranteeing academic freedom and ensuring equality of resource when cases do come to the courts, as some inevitably will, but we are also living in a country that in my view is proud of the idea that is just as much enshrined in human rights law that it is wrong to defame people and wreck reputation without having a proper means of defence and without the victim having proper redress. However we strike the balance, there must be a balance, which is why I welcome the suggestion of the noble Lord, Lord McNally, that the discussions and the improvements will continue.

17:53

[Lord Phillips of Sudbury]

My Lords, to be the 13th speaker in this distinguished list is not the best of positions but I promise to try to avoid repeating what others have so eloquently said. I think I may be the only solicitor speaking in this Second Reading debate, which is perhaps surprising but it does give me a particular view of the issues in hand because for a number of years part of my practice was defamation work. Indeed, I am happy to report that I managed to sustain the reputation and the bank balances of four of my former leaders in the course of that time.

I absolutely take on board what a fiendishly difficult topic this is to deal with and how the great clash between the freedom of speech of the press on the one hand and the right of any man and woman to have his or her reputation reasonably sustained on the other is exceedingly difficult to resolve. I hope noble Lords will not mind my saying that many who have contributed their thoughts to this debate seem to me to have overstretched the first principle at the expense of the latter. For the life of me I cannot see how the freedom of the press can be exercised at the expense of the freedom of any man or woman to have his or her reputation maintained—if you like, at the expense of honest and responsible reporting and speech. Trying to bridge those two is, as we all know and are finding today, very difficult. But I, like others, support 90% of this Bill very strongly. I have a considerable number of detailed points but I will not burden the House with them tonight; I will raise them at the appropriate time in Committee.

I thank the many contributors, not just in this debate but the many outside organisations. There is a panel of libertarians called the Libel Reform Campaign which has done great and important work. The fact that I do not agree with all of its outcomes is neither here nor there. I also thank my noble friend Lord Lester, the Minister and the shadow Minister for the way in which they have dealt with this matter. It is a great credit to the House that we have in our ranks such an extraordinary array of extraordinary experience which will stand us in good stead as we go along. I declare an interest, as I have already said, as a solicitor. My firm, Bates, Wells & Braithwaite, still does a lot of libel law work, although I have not been in that field for 10 or 15 years. I will also say in the light of the remarks I am about to make that I was for 10 years a member of the Scott Trust and am wholly apprised of the difficulties the press face. I heard particularly what the noble Viscount, Lord Colville, said about the BBC and the way that it is inundated with futile but expensive claims.

There is a David and Goliath aspect in libel in my experience. I have mainly acted for individual claimants and theirs is an infinitely more frightening position than is that of the media outlet which they are suing or being sued by. Some of the contributors today have not really understood just how formidable it is to pursue a libel claim. I have to say from hard experience that the number of claims that I have seen dropped—good claims by good people against bad journalism—grieves my heart. One of the unresolved dilemmas for us all, which I do not think we have come near resolving because I do not know that there is a resolution for it, is the sheer cost factor. I happen to believe that the LASPO reforms were necessary to preserve the integrity of the process and the profession but I readily accept that this is the most expensive field in which to get engaged as a litigant on either side, and if we can come up with some thoughts on that I would be delighted. At the moment I do not see them, except the vital point made by a number of Peers in this debate about simplifying, speeding up and consensualising as far as possible the preliminary stages in libel claims. I believe that we can hope to achieve a much better resolution than we currently do under this extremely classic system which lumbers along at an extraordinarily steady amble at an amazingly high cost.

I want to say a few words before finishing on Clause 5 which deals with operators of websites. Quite a number of pressure groups and interest groups which contributed to all of us prior to this debate are anxious about the terms of Clause 5. Indeed, the website operators themselves are, not surprisingly, extremely miffed about some of its provisions. I happen to think that it is one of the most important provisions in the Bill because it gives the individual who has been defamed on a website a chance of getting some solace—some satisfaction. The clause requires the operator of a website to reveal to the claimant the identity of the person who posted the defamatory statement. That is an immensely important requirement. Without the internet operator being able to do that, he or she will lose the defence given them by Clause 5 against the claimant.

I have to tell noble Lords that I spoke last week with one of my colleagues in the office regarding the cost of getting from internet operators the particulars to enable the claimant who has been grotesquely libelled to get at the person who made the statement and obtain an apology, a retraction and, in certain circumstances, damages. The difficulties of doing that are almost impossible to exaggerate. It is not just a steeplechase; it is in some cases like climbing Everest. It takes years because, just as you obtain a court order that requires the internet service provider to reveal the particulars of the person who has made the defamatory comments, you find that the particulars given are not sufficient. You need a further court order and a further order. Spending £10,000 or £15,000 getting to the identity of the person is not uncommon. That is ludicrous and unfair.

I should like briefly to touch on two points in Clause 5, because it should be strengthened. First, Clause 5(2) states:

“It is a defence for the operator to show that it was not the operator who posted the statement”,

on the website. That is insufficiently sophisticated because it would be possible in some circumstances for the internet operator to be complicit with the person, who may be a foreign company, putting the libellous material on the web without being caught by subsection (3)(a). That needs to be changed.

The other thing that is plainly wrong, and to which my noble friend Lord Lester and the noble Lord, Lord Browne, referred, is that regulations under Clause 5, which are important and provide a lot of the pith and bone of this part of the Bill, are to be made by the negative annulment procedure. That is not adequate. I note, surprisingly and sadly, that our own Delegated Powers and Regulatory Reform Committee said that it thought that that procedure was all right because the clause is detailed, difficult and so on. The complexity and detail made it inappropriate for us to deal with under the positive procedure. That seems to me to be a good argument the other way. In any event, really important matters are left for regulations. For example, one of the elements of defence for the operator is that,

“the operator failed to respond to the notice of complaint in accordance with any provision contained in the regulations”.

Noble Lords can see there that what the regulations will allow is absolutely crucial to the nature and strength of the two parties who are arguing over whether or not the operator of the website is or is not liable for defamation.

Lastly, is it not odd that a local newspaper should be liable for libel in respect of a defamatory letter written to it, yet if someone posts an anonymous statement on a website that goes international, where the potential damage to an individual can be vast, that is said to be less important than your little local newspaper? There is a double standard at work. I understand that people like to keep the web free and open and so on, and no one stands up for free speech more than I, but we have to have a better balance than that. Given the grievous damage that can be done to an individual, which it is never entirely possible to erase, even if you obtain apologies and the rest, we have not only to stand by Clause 5 but to make it stronger.

18:05

[Lord Lloyd of Berwick]

My Lords, it is always a pleasure to follow the noble Lord, Lord Phillips of Sudbury. Like him, I welcome the Bill. I agree with almost all—indeed, I think I can say all—its main objectives. However, I should add that unlike the noble Lord I have never been an expert in the law of defamation. I will therefore say nothing about the important clauses, Clauses 4 and 6, which have been the subject of full discussion by the noble Lord, Lord Lester, the noble Baroness, Lady O’Neill, and many other noble Lords. Those are the important clauses.

However, I once gave the leading judgment in a decision of the Court of Appeal on the subject of fair comment, which is now to be renamed, under Clause 3, “Honest opinion”. That is my only reason for speaking tonight. It was the case of Telnikoff v Matusevitch, who were both Russian émigrés living in London. The great question was whether in a defence of fair comment it was for the defendant to prove that he had an honest belief in what he had written. We in the Court of Appeal held that it was not for him to make that proof. The question was whether an honest man could hold such a belief—the test that is proposed in Clause 3(4). In other words, the test should be objective and not subjective. The case went to the House of Lords and, I have to say, the Court of Appeal’s judgment on that point was unanimously upheld.

I mention that only because there was a later case in the Supreme Court on the subject of fair comment, Joseph v Spiller, in which exactly the same point arose. A lengthy judgment was given by the noble and learned Lord, Lord Phillips of Worth Matravers. Why is it that all judgments in the Supreme Court seem to get lengthier and lengthier—far longer than when I was giving judgments in the House of Lords—with every year that passes? At the end of that judgment, he made three suggestions: first, that it was high time to reform the law of defamation; secondly, that we should make a start by renaming fair comment as honest belief or opinion; and thirdly, that the test should be subjective and not objective. I agree with the noble and learned Lord’s first and second suggestions, which is why I support Clause 3, and indeed the Bill as a whole. However, with great respect, I do not agree with his third suggestion. I do not know whether this will become a live issue in Committee—I profoundly hope not. However, if it does, I remain of the view that the test should be objective, not subjective—in other words, the test as set out in Clause 3(4).

However, there was another point in the case of Telnikoff v Matusevitch. The defamatory words were contained in a letter written to a newspaper, in which the writer referred specifically to an article which had appeared in the same newspaper only a few days before. We held that this was sufficient to enable the defendant to rely on fair comment. However, we were reversed on that point by the House of Lords. It said that, since some people might have read the letter without having read the article, the facts contained in the article should have been set out in the letter. I always thought that the House of Lords was wrong about that and that the dissenting judgment of Lord Ackner, who many noble Lords will remember, was much to be preferred. I end by asking whether I am right in thinking that, if similar facts were to come before the court today, it could take a different view from that taken by the House of Lords in light of Clause 3(3) of the current Bill. If so, it will prove that Lord Ackner and the Court of Appeal were right all along.

18:11

[Lord Hunt of Chesterton]

My Lords, I was approached by two organisations to speak on this Bill. I have not followed the Bill, although I have had some dealings with my noble and learned friends as a technical expert. As a scientist, I generally support this Bill because of the importance of freedom of speech in science and, of course, for many organisations. Like many others, one feels very gratified that one has much greater freedom of speech in this country than in others—in the press, in Parliament and in the scientific world. However, even in parliamentary committees, civil servants are advised to be extremely careful about what they say about individuals; as I found myself when I was in front of the Public Accounts Committee in the Met Office.

The limitations of press freedom have been covered by other speakers and, as a scientist, I am very aware of the importance of freedom of speech for progress in science and its application. However, the importance of the internet has not been emphasised very much in this debate, which is included under Clause 5. The internet can greatly expand freedom but it can also create dangers, as the noble Lord, Lord Phillips, has just explained. I declare an interest as I chair an environmental software company. We put all the formulae that we use on the web—rather unusually—so that other companies and organisations can follow them. However, if more companies and organisations were more open, it might solve some of the problems that arise.

In the UK, there is of course a widespread practice of individuals and organisations suing, or threatening to sue, individuals who express opinions and produce data that affect the complainant. Scientists, universities and journals are now quite fearful of being sued, or threatened to be sued, because of the very high fees of lawyers. I have colleagues at University College London who receive vexatious threats of suing from organisations when they have simply repeated certain points on websites. Even if these opinions are not finally disproved in court, this can lead to considerable costs to these individuals—so much so that universities, journals and newspapers do not necessarily support their employees or their contributors. I know a young journalist in London who reported about certain Russians in London in a certain well known newspaper. When it started getting tricky, he went to the law firm of the noble Lord, Lord Phillips, and the problem was solved. However, there was a nasty withdrawing of support from the newspaper that had published his article. This aura of threat and so on has been a very nasty feature of the current situation. I was once threatened by a scientific colleague for a statement in the minutes of a meeting of the National Physical Laboratory; he said that he would sue me. I quickly changed the minutes as it was not worth the cost. He is now quite a good friend. I do not remind him of this very often but he is passionate sometimes.

When the Met Office became a trading fund, it had to consider whether to take out insurance against being sued for inaccurate weather forecasts. Noble Lords can imagine that many weather forecasting organisations have considered such an idea. However, we decided against it because there has been only one half-successful case about weather forecasting—noble Lords may tell me something else—which was in the United States about some dodgy data from a buoy off Newfoundland. We can be secure in this club of weather forecasting organisations.

The Bill has a very important public interest clause that should help to deal with some of these issues because it recognises the public interest in the defamation processes. However, other noble Lords have mentioned that there is nothing in this clause, or in the Explanatory Notes, about having much more inexpensive procedures for the assessment of defamation claims. The noble Lord, Lord Marks, quite rightly mentioned this. This will become increasingly needed with regard to claims and opinions expressed on the internet. Given the extraordinary powers of extracting and organising data now demonstrated by Google, and the popular involvement in the internet shown by Wikipedia and other sites, surely Clause 5 should now include the setting up of a defamation website by some independent body—for example, the Law Commission, the noble Lord, Lord Phillips, or whoever—in which claims and counterclaims on scientific and technical questions could be presented. There could be some editorialising as on Wikipedia. The clause might contain the provision of such a website. It could state that judges and courts should not consider claims on technical issues until there has been public debate on the internet for some defined period—for example, six months. During this period, there could be a completely open process whereby the complainant, the defendant, their friends and their enemies put material on the website. When the process finally arrived in a court, the court would see what had happened over these months on the internet. This is a very powerful method of seeing the evidence for and against.

I think that the point made by the noble Lord, Lord McNally, in opening this debate is that we must think to the future. There will be some new approaches and extraordinary new possibilities. The present clause is looking backwards slightly because this procedure happens in any small community. Someone makes a statement about somebody else, such as, “Did you see him do this? Did you see him do that? My God, his potatoes are terrible”, and so on. There is a community assessment and, after a time, people see Mr So-and-so selling bad potatoes, people hear about it and the community decides. It does not normally end up in blows. We might have a solution if we go back to primitive society and we go forward to the internet.

I quickly sent some e-mails this afternoon, having thought about this in the morning. I gather that there is a free online Canadian dispute resolution service at www.eQuibbly.com—I am sorry for my lawyer friends that it is free. Apparently, eBay tried to set up a similar site in the UK but we are obviously so full of lawyers that there were no takers for this free service. It now operates in the Netherlands, in Dutch—so I will not give you the website. If an independent body were to run such a defamation website, it would enable web organisations generally to operate more freely and would ensure a wider dissemination of data and opinions.

Finally, an important point made by noble Lords concerning the dangers of libel tourism is that it is having quite a chilling effect—a term used earlier—in Africa, where well-to-do people are threatening poorer people, communities and organisations with defamation cases in London. The inhibition of libel tourism in the Bill is a very important development and I support it.

18:20

[Lord Taverne]

My Lords, I shall be very brief. As I explained at the Second Reading of the Bill of my noble friend Lord Lester two years ago, I no longer regard myself as a lawyer because I ceased to practise in 1966 and, when I did practise, I knew nothing about libel law.

I want to make a brief point about safeguarding freedom of scientific publication in relation to Clause 4. The magazine Nature recently won a case in which it was sued by a man called El Nashi, the retired editor of a publication called Chaos, Solitons and Fractals. Nature reported criticisms of improper self-publication during his time as editor. In its defence, Nature pleaded truth and justification and also sought to rely on the Reynolds defence. It offered a right of reply, which was not taken up. The plaintiff unfortunately pursued his case in person, which greatly complicated the proceedings. The case took four years. It involved getting expert witnesses from different parts of the world and contacting staff who had moved on. It cost £1.5 million and took up a huge amount of management time.

I am advised that a new and effective public interest defence would have avoided that ordeal but that the Bill as it stands, with its new definition of the Reynolds defence, would not. Nor, I am told, would the Bill as it stands have benefited Ben Goldacre or Peter Wilmshurst, or Simon Singh in his dispute with chiropractors, in their ordeals. If the Minister, my noble friend Lord McNally, can show that this is wrong, I shall be delighted. If not, the Bill should be amended, and it seems that the Neill amendment, as mentioned by my noble friend Lord Lester, would be the answer.

18:22

[Lord Bew]

My Lords, I support the Bill. At this late stage, I do not wish to repeat many of the points that have been made so excellently in the House this afternoon, except in one respect. I want to repeat the thanks to the noble Lord, Lord McNally, for the letter that he sent earlier this week, for his introduction to the Bill and for his interest in this subject throughout. I also thank the noble Lord, Lord Mawhinney, who chaired 18 meetings of the Joint Committee with great skill and brought us to a set of very important and useful conclusions. I thank, too, the noble Lord, Lord Lester of Herne Hill, who has campaigned with such great subtlety on this matter for some years. On that point, recalling the debate that the noble Lord introduced in June 2010, it is very pleasant to note how we have moved on. Listening to the debates in the other place, it is clear that there is considerable cross-party consensus. I think that on an issue such as libel tourism there is now a consensus which did not exist in the summer of 2010.

The noble Lord, Lord Mawhinney, was kind enough to recall that in the Joint Committee I was very concerned about academic freedom, which is dealt with in Clause 6. I want to say how happy I am that we have faced up to this important matter in the Bill. The most important point is that within academe—the noble Lord, Lord Hunt, touched on this—there is not the freedom that many people outside academe believe exists. There are challenges to free speech. Those who edit academic journals and run university presses do so on a shoestring, so the possibility of any type of libel action immediately, quite understandably, produces a massive chilling effect, and we all suffer from the fact that in the current climate academics cannot say things which their research has driven them to believe to be true.

The noble Lord, Lord Sugar, made a very good point when he talked about the popular press being driven by money. I understand why he makes that point but it does not apply to academics—they are driven by many things, but not by money. It is very important for the health of our democratic society that we have freedom of expression and a zone of protection for research and the reaching of conclusions which may indeed be unpalatable to others. None the less, when we discussed this matter in the Joint Committee, we were often worried—this point was frequently raised by the noble and learned Lord, Lord Morris—about unintentionally creating cottage industries by advocating something which seemed to us banal at the time but which might open up a whole set of other legal problems down the road. I think that the drafting of Clause 6 is rather fine in principle because it avoids that issue. Although in general academics believe in the desirability of qualified privilege for statements in peer-reviewed journals, they also know that not all academic journals are as rigorously and well run as others. One possible way out of this problem is to have a list of the ones that are considered to be the well run academic journals. However, the method adopted in Clause 6 is better than that. It emphasises the correct procedures for running an academic journal and a peer review. That is the right way to go and it is a very happy piece of drafting.

Perhaps I may add one thing, and it is a minor caveat. I hope that the words “academic matter” in Clause 6 are not used in the way that sports commentators use them. When a team is losing 5-0 and somebody scores a goal two minutes from the end, the commentator always announces, “Well, they’ve just scored but that’s an academic matter”. I hope it is assumed in Clause 6 that an academic matter can sometimes be very serious. Assuming that the use of the term “academic matter” is not that of the sports commentator, I am very happy to endorse Clause 6.

I repeat my fundamental point: there needs to be a zone of qualified privilege because the quality of our democratic life suffers if academics driven by a research conclusion feel unable to state that conclusion.

18:27

[Baroness Hayter of Kentish Town]

My Lords, it is gratifying to reach this point in the debate—a debate referred to as one of “awe and wonder” by the noble Lord, Lord Black. I should certainly like to add my congratulations to the noble Lord, Lord Lester, on whose Bill I had the fortune to make my maiden speech back in July 2010.

I was also a member of the Joint Committee, chaired by the noble Lord, Lord Mawhinney, with the flair and understanding that we have witnessed today and indeed on occasion with humour and forbearance of my little misdemeanours. One of his major contributions was to the readability of that report. He was determined that it should be understandable to all because, as he said, defamation can affect everyone—the teacher, the social worker, the victim, the innocent and, particularly for the noble Lord, Lord Mawhinney, his beloved former constituents in Peterborough. He wanted all the people without recourse to a lawyer to be able to read and understand our report.

Of course, that is also one of the aims of the Bill: to bring together in one statute, without recourse to case law, the meaning and the limits of our law on defamation. That is a major aim that we should keep in mind as we consider the Bill. Does it truly consolidate, with clarity, the law on libel such that journalists know what they can write and the named can know whether they have a case against the writer or publication? More than that, we need a Bill which ends speculative cases aimed not at righting an injustice but at silencing the curious and those who criticise the rich and powerful, denying free speech. The chill factor hangs over campaigners as well as over journalists. We also want a Bill that reduces the costs of settling disputes.

As we have heard, there is consensus about the importance of this Bill, as expressed by the expert contributions of noble Lords today. That consensus has also been expressed over many years, especially by the noble Lord, Lord Lester of Herne Hill, and by my fellow Joint Committee members: the noble Lords, Lord Marks of Henley-on-Thames, Lord Bew, Lord Black, Lord Phillips, the noble and learned Lords, Lord Morris of Aberavon and Lord Lloyd of Berwick, the noble Baroness, Lady O'Neill of Bengarve, and my noble friends Lord Sugar, Lady Bakewell, Lord Hunt of Chesterton and Lord Triesman, to say nothing of my noble friend Lord Browne of Ladyton. That is a true roll call of experience and expertise.

As has been said today, part of our intrinsic democratic schema is to balance the safeguarding of our very precious freedom of speech while protecting against its misuse to denigrate others falsely, and ensuring that the law is not misused to stifle disclosure or criticism. We must permit truth to speak to power, even as we protect individuals from being trounced in the popular press or anonymously on the web.

Concern on this matter is not new. The Royal Commission on the Press, set up in 1947, acknowledged the central dilemma that a free press is essential to a democracy, but that a press driven by commercial interests is not really free. More recently, Stephen Sedley has written that:

“When the European Convention on Human Rights was … adopted in the early 1950s, few doubted that the chief threat to private life was the state—the informer, the watcher, the secret policeman. Today there is widespread agreement that segments of the press … pose a different but still real threat to private life”,

and that,

“the tabloids’ self-justification … mirrors that of the authoritarian state”.

I think that is what the noble Lord, Lord Sugar, said earlier in the debate. We need a Bill that enables serious and responsible journalists to expose misbehaviours, whether of the state, corporations, individuals or even your Lordships' House, but which protects the less powerful from an all powerful, well resourced tabloid press or scurrilous anonymous websites. They should not be given a licence to libel. As the noble Viscount, Lord Colville, has made clear, this issue of balance is key. In future we will work on this Bill to get that right.

The Opposition wants a new Bill on defamation enacted and, as many others have, we congratulate the noble Lord, Lord McNally, on ensuring a speedy and careful process, taking the Lester Bill through to a draft Bill, through the consultation, through the Commons and presenting it here today. We welcome key parts of the Bill, such as the removal of the presumption in favour of jury trials, which provides a major potential reduction in costs and allows earlier decisions and, we hope, earlier resolutions. There is the new defence for peer-reviewed material in academic—properly academic, in the words of the noble Lord, Lord Bew—journals, which was a key recommendation of the Joint Committee. That point particularly pleases my husband, who is a professor of physics and a frequent contributor to Nature and similar journals. I have now declared all my interests.

However, it could yet be a better Bill, as we have heard in this well informed debate. As the noble Lord, Lord Marks of Henley-on-Thames, has noted, the Bill fails to deal with the Joint Committee's recommendation to reduce substantially—others would say to abolish—the ability of corporations to threaten to take, or to take, individuals to court, often to intimidate them into silence. Why has that not appeared in the Bill? Is it because of pressure from business? I agree that, on the whole, this is not a party-political Bill but I sense the heavy hand of business behind that regrettable absence from the Bill. We know that companies use the threat of libel action to manage their brands and to close down criticisms of their products and behaviour. That is bullying and the Bill should prevent the misuse of the important law on libel.

In my maiden speech, I spoke about the extraordinary pressure on organisations, such as Which?, when they want to assess, on behalf of the public, the safety, value for money, effectiveness and reliability of goods or services. I ask the Minister: what in this Bill would enable Which? to expose poor-quality financial products, dangerous electrical goods, shoddy repair firms or lousy restaurants if it risks the threat of defamation and the thousands that it costs to defend such an action, no matter how weak the case?

More recently, I have been involved with Citizens Advice on the issue of civil recovery. That is a rather pernicious little device used by a number of high street retailers, such as Boots, Debenhams and Tesco, to extort money out of those accused—but not necessarily guilty—of shoplifting, via empty threats of civil court action. Citizens Advice has been hampered in exposing this racket by threats of defamation action. The organisation knows that they will never come to anything because it researches what it writes extremely carefully and makes sure that it is true. But even to answer such threats involves expensive legal time. Many of the cases quoted today, whether chiropractitioners or the magazine threatened by Nature, would have been stopped in their tracks had this hurdle against corporations being able to sue been in place.

I turn to costs, which has been raised by almost every speaker. Costs are the real killer. It is odd that one can settle party-wall issues, small claims, insolvency, even criminal cases locally at the magistrates’ court, or in the small claims court, or even in the bankruptcy court, but when it comes to libel, there are expensive lawyers—some of whom are threatening and probably in breach of their own code of conduct—vast bills, long delays and threats of costs. Those are the major determinants of whether one can pursue or defend a defamation claim. As the noble Lord, Lord Marks of Henley-on-Thames, has suggested, why are we not considering whether county courts might be suitable to deal with this?

The question of costs must be settled, or access to justice will be limited only to the most wealthy. Crucially, we must raise the bar against frivolous cases where no serious harm has taken place even if an untruth has been written. The Joint Committee recommended “serious and substantial” harm, as the noble Lord, Lord Mawhinney, has reminded us. It may be that those two words are not necessary, although I think they are different, but they would send a signal that the law should be used only in significant cases.

We also need some clarity on definitions so as to avoid more case law. We need greater certainty so that people can easily judge whether there has been defamation. Similarly, as recommended by the Joint Committee, we need clear authority for judges to strike out unnecessary actions at an early stage before costs mount up as a disease within the body, and there needs to be clear guidance for judges to exercise that authority. The consultation that preceded the Bill included an early resolution procedure which would help to lower costs by providing earlier determination of key issues, such as triviality, meaning, and questions of fact and opinion. Regrettably, the Bill contains no provisions to implement such a system, but surely it is a key requirement.

As my noble friend Lord Browne has made clear, we support the thrust of this Bill, but it could be a better Bill. In Committee, we will work with colleagues across the House to ensure that this welcome Bill is also a better one.

18:38

[Lord McNally]

My Lords, in opening the debate I said that I was looking for help in carrying the Bill forward. The tenor and content of the debate have lived up to my expectations. We also have the confidence of the other place, which knowingly passed us a good deal of work. Usually we complain that it does this without acknowledging it. At least this time it does and I hope that we can carry forward these discussions in Committee in a way that will produce the better Bill to which the noble Baroness, Lady Hayter, referred.

I acknowledge what the noble Baroness and others have said: that in many parts this is a consolidation Bill, aimed at clarifying the law and putting it into a place where people can clearly understand it. My intention has always been that, where necessary, we should take the law forward. In particular, as has been referred to, we are setting ourselves a pretty fierce challenge where the internet is concerned because of the speed of change. However, we should not duck away from it simply because we face rapidly changing technologies.

It is also good that there were voices in this debate that were not simply politically correct. It would have been very easy to say that we are all in favour of free speech and that it is very good, but the contributions of the noble Lords, Lord Sugar and Lord Triesman, and my noble friend Lord Phillips were important in saying that this Bill seeks a balance between the freedom of speech and the rights of journalists to pursue the truth and the rights of individuals to protect their reputation and in some circumstances their privacy. This debate had the necessary balance, which takes us forward to Committee.

On the question of defending the rights of business, the noble Baroness is right; this was raised in the Committee and I gave an opinion then. The Government’s considered view is that businesses have reputations that can be defamed and damaged and that they have a right to defend their reputations. There has been no great bullying by big business—the noble Baroness is getting into conspiracy theories. However, we can look at this in Committee. She also talks about the various organisations trying to hold business to account that can be bullied. Over the months that I have been working on this, I have heard enough hearsay evidence about the willingness to fire off lawyers’ letters and rack up costs or implied costs. I hope that some of the things that we are doing—the threshold and the reform of defence, particularly the public interest defence—address this.

Something that has also come up time and again in debates, which we will look at, is the cost issue and case management. I shall go back to the Ministry of Justice to find out how speedily we can respond, but I understand that when the House goes into Committee it will want information about some of the issues that we have said, quite rightly, that we want to manage by secondary legislation or by consultations with the judiciary. However, I also take the point that we need to give the House as early as possible the thinking and direction of travel in which we want to go in these areas. I take on board what the noble Lord, Lord Browne, asked me at the beginning: whether we would be able to publish some kind of timetable for bringing forward this further information. I will do my best.

When so much is to be discussed in Committee, I hope that colleagues will understand that summing up like this and dealing with the detail of some of the questions would probably run for about an hour. Here are the notes that my officials in the Box sent me to answer detailed questions. I also made 25 separate notes myself. I can try doing so if noble Lords want, but what I have taken out of this is that we have certainly got a number of things right, which people have welcomed. I notice the point that the noble Viscount, Lord Colville, made: that the Reynolds defence is too restrictive. That is partly why we have invited more comment. It is admitted that the clause that we have put forward will need further work. That is what I look to do in Committee, and I hope that this work will avoid the kind of back-street bullies that he described. We will also look at Clause 4, certainly in the light of the Flood judgment but also after a number of other comments made during the course of this debate.

There was interest during the debate—we shall probably discuss this further—about where to get satisfaction in these cases. A number of speakers referred to the wisdom of making sure that judges can order suitable corrections. Others warned us against putting judges in the editor’s seat. It is part of the nature of this debate that we have those differences. I was grateful for the kind comments of the noble Lord, Lord Mawhinney. I did not know that “serious and substantial” was the contribution of the noble and learned Lord, Lord Mackay. I always take very seriously anything suggested by the noble and learned Lord. A number of other people have given warnings. When we come to Clause 4 we shall look at this difference between those who want some guidance for those looking at the law and those who want to avoid a tick box. Again we can explore the best that we can get between ticking boxes and giving guidance.

A variety of people have commented on costs. I take them all on board. It was interesting that a number of speakers—the noble Lord, Lord Mawhinney, among them—referred to the case for putting arbitration and mediation into the process. This is a great desire, but how we do it, I am not quite sure. On some of this we may have to wait to hear what Lord Leveson is going to say. However, this Bill is not just newspaper-specific, of course, and I was very interested in the comments on the way in which arbitration is being offered on the internet. I take the point made by the noble Lord, Lord Lester, that we should not get blown off course by Leveson. We can deal with defamation without that being a cause for delay.

I am extremely grateful to the noble Baroness, Lady O’Neill, and indeed to all the scientists who contributed. One of my driving motivations has been to try to get something that would deal with the undoubted problems that scientists, academics and others face. The noble Baroness, Lady O’Neill, was realistic enough to realise that these are complex issues. As she said, this is the central piece in the jigsaw of legislation. I was pleased by the favourable comments of the noble Lord, Lord Bew. We are trying to provide legislation that gives genuine protection to the scientific community, and I look forward to working in Committee. If there are improvements that give that protection, we will certainly look at them.

The noble and learned Lord, Lord Morris, gave us the wise guidance again that, while protecting freedom of speech, we have to give adequate protection for reputation. He advised me to bring forward the promised regulations as soon as possible. I was interested as well that the general opinion was that we had got it right as far as jury trial was concerned. That is extremely welcome. The noble and learned Lord, Lord Morris, asked me whether there was any insidious read-across to criminal trials. Unless they are not telling me something, and unless he gets an urgent letter from me tomorrow morning, the noble and learned Lord can take this as an assurance from the Dispatch Box that there is no read-across to intentions about jury trials. The noble and learned Lord, Lord Morris, himself made the point that, with the internet, we must put flexibility into this legislation. I remember that when we debated the Communications Data Bill we kept on talking about “future-proofing”—much good that it did us. Future-proofing may be impossible in the modern technological age, but we can build in flexibility.

I much appreciated the contribution from the noble Lord, Lord Black, about the serious-harm test being good, and his comments that the Clause 8 single-publication rule is much needed but perhaps should be clarified.

I should perhaps say to the noble and learned Lord, Lord Lloyd, that I have conflicting advice on his point about Lord Ackner’s judgment. My officials have sent me a note saying that we will look at this and write to him, but the noble Lord, Lord Lester, passed me a note saying that of course we got it right. One of my great feelings of loss about this House is that Lord Ackner is not here, ready to tear whichever Minister happened to be at the Dispatch Box to small pieces with his analysis of the legislation. My view is that the noble Lord, Lord Lester, is probably right and that Lord Ackner got it right. We hope that we have got it right in this legislation.

The spirit of the debate, from the response of the noble Lord, Lord Browne, to the closing speech of the noble Baroness, Lady Hayter, reflects that we have been given a serious task to do and that this House will now set about that task. Once every so often—this time after 16 years—the House gets a chance to look at this very important area of law and we intend to do our job responsibly, seriously and with due pace.

I was not sure whether this had been agreed by the usual channels, but I think that the Bill has been moved to Grand Committee, which will be very useful for doing the work that we have set ourselves.

Bill read a second time and committed to a Grand Committee.

Britain’s Industrial Base

Tuesday 9th October 2012 Lords Chamber

Question for Short Debate

18:57

Tabled By

[Lord Adonis]

To ask Her Majesty’s Government what is their assessment of the strength of Britain’s industrial base.

[Earl Attlee]

My Lords, this is a time-limited debate and the time for all speakers, except for the noble Lord, Lord Adonis, at 10 minutes and my noble friend Lord Marland at 12 minutes, is limited to six minutes. I remind the House that this means that when the clock shows six minutes, it means that the speaker has already reached their permitted time.

[Lord Adonis]

My Lords, I first congratulate the noble Lord, Lord Marland, on his new post. He earned great respect for his work at DECC, and I know he will do the same at BIS.

I do not think that there is much dispute that Britain’s industrial base is too weak and too narrow. If that were not the case, we probably would not be in a double-dip recession and we would certainly not be in a crisis with 2.6 million unemployed, youth unemployment of more than 1 million and national income still significantly lower than before the 2008 crash. It is taking us longer to get out of this recession even than it did to get out of Great Depression of the 1930s.

Without a stronger industrial base, we face a bleak future, and I think we now all understand the need to be bold and explicit about this. Until recently, the words “industrial strategy” were unmentionable in polite society. They were regarded as a hangover—in all senses—from the disastrous 1970s and British Leyland. However, as Vince Cable put it in his Imperial College speech last month:

“We can have an industrial strategy by default or design. Ignoring this reality is not a policy—it is just negligence”.

He continued, and I agree with this too:

“But just as bad would be to approach all our possible interventions in an ad hoc way, subjecting every policy decision to a short term tactical decision. There is not a serious and successful major company in the world that would proceed in such an unplanned way”.

I agree, but that is precisely how we have been proceeding as a country for a generation, and it has to change.

In my experience, telling stories is more powerful than reciting statistics when painting a big picture. So I want to tell four brief stories. Yesterday, I went out on a boat to see the huge new Statoil wind farm off the Norfolk coast at Sheringham Shoal. When I was not being seasick, I was amazed at the size and scale of the turbines: 88 of them, across a huge stretch of sea, each rotor 350 feet in diameter, generating enough electricity for 220,000 homes. Sheringham Shoal is only the beginning: the plan for nearby Dogger Bank, which I previously knew only from weather forecasts, is for 3,000 of these giant turbines, with construction starting in 2015 if the finance can be put together by the development consortium.

This is green energy in action. By luck of geography, we have a greater opportunity to develop it than any European nation besides Germany and Denmark. It is a huge, growing industry in construction, design and maintenance, yet in industrial terms, we are seriously behind the curve. The Statoil project director told me that barely a fifth of the construction and assembly work for Sheringham Shoal was done by companies located in Britain. The turbines are made by Siemens and imported, and the foundations, the offshore cables, and a good deal of the work installing the turbines is done by overseas companies with little or no physical presence in the UK.

I was told by Statoil that infrastructure is another weakness, in particular the absence of superfast broadband on the Norfolk coast and terrible mobile phone reception. As for the huge Dogger Bank investment, uncertainty over long-term policy for renewable energy is a bigger issue. So we are in the midst of a green energy revolution yet new jobs and investment will be delayed and/or go abroad unless we get our act together as a country. This needs to start, crucially, by ensuring that Siemens builds its proposed £210 million turbine factory in Hull, the fate of which is now uncertain because of Government prevarication on wind energy.

Story two. Last week I visited Airbus at Filton near Bristol, part of the pan-European operation which has made Airbus so brilliant a rival to Boeing with its A320s, 330s, the soon to be 350s and the giant 380s. As well as its success in China, Airbus has taken the competition directly to the United States with a new factory in Alabama. The expertise in designing and making aircraft wings at Filton is second to none, just as the engine technology at next door Rolls-Royce is second to none.

Airbus itself is a fruit of industrial policy which dared not speak its name in the 1980s, when state loans made possible the A320, an investment which has been repaid many times over. Similar state industrial policy is now equally imperative in decisions surrounding the proposed BAE/EADS merger to create a military equivalent of Airbus. The Government cannot just leave it to the market. The Government are the market in this case. The critical requirements are that the UK should be an equal partner, not a subordinate one, and that the UK’s position at the heart of any military equipment consortium should be assured.

We discussed all this at Filton. But just as pressing to Airbus were its skills requirements. Last year the company had 1,500 applicants for 86 apprenticeships. Yet despite this number, it could not recruit enough school-leavers with B grades or better in A-level maths and physics required for its higher level apprenticeships. Partly to tackle this it is sponsoring the proposed Bristol University Technical College which will specialise in engineering for 14 to 18 year-olds, but far broader action is required to supply its skill needs.

It was the same story when I visited Jaguar Land Rover’s state-of-the-art facility at Gaydon near Warwick last month. Again, a brilliant success story both in technology and products, including the new Range Rover. JLR benefits from a deep partnership with the University of Warwick, which my noble friend Lord Bhattacharyya has done so much to forge over so many years. But again, real concerns over skill levels, too small a pool of engineering graduates from which to recruit—JLR told me that by its estimates the UK is producing only half the number of graduate engineers that it needs—and too few would-be apprentices with the right skills.

Another key issue for JLR is its supply chain, too little of which is local or even British. Yet British suppliers are finding it hard, if not impossible, to secure the patient finance they need to expand and the new inward investors likewise. The Society of Motor Manufacturers and Traders published a devastating report in June specifying how the growth of supply chain companies in Britain was being constrained by access to capital and lack of sectoral and regional expertise on the part of the banks.

My fourth story is from my experience as Secretary of State for Transport in the previous Government in awarding contracts for new trains. This is a big potential source of jobs and value to UK plc which will get steadily bigger as rail travel grows and HS2 is constructed in the next decade and beyond. The state is the procurer of these trains. To paraphrase Vince Cable, its contract decisions constitute an industrial strategy by default or by design, and if it is not by design then that is pure negligence. The issue is simple: because of past negligence, 21st century Britain—amazingly—no longer has a domestically owned rail manufacturer. There is only one international company, Bombardier, which even makes trains in Britain. So, as Transport Secretary, I decided to have an industrial policy by design in respect of the £4.5 billion contract to supply the successor trains to the Intercity 125s. To cut a long story short, this is what we did: Hitachi, the most experienced high-speed train manufacturer in the world, now into the seventh series of Japanese bullet trains, won the contract and agreed as part of the deal to build a factory in Newton Aycliffe in County Durham, not far from Nissan, another great Japanese inward investor in transport manufacturing. The present Government stuck with the contract, the factory is being built and there will be more than 700 new jobs.

Now I had hoped that this would be the beginning of a coherent industrial strategy to build up domestic rail manufacturing. Alas, the present Government awarded the next rail contract for the new Thameslink trains to Siemens without securing UK manufacturing. This was serious negligence. If Siemens can build a wind turbine factory in Hull, and can even be persuaded by the Russian government to build a train manufacturing plant in the Urals in order to get state contracts, it ought not to have been beyond the wit and ingenuity of Her Majesty’s Government to have secured a factory in return for the £1.4 billion Thameslink order. The failure to do so was a major failure of public policy which must not be repeated with the forthcoming order for Crossrail trains.

So, my Lords, four stories. What are the lessons for industrial strategy? It is that the fundamental planks of a modern industrial strategy are skills, technology, innovation, procurement, infrastructure, finance, and supply chains. We need a strong and dynamic private sector aided by a strong and dynamic state in all seven of these critical areas. The state needs to act strategically, not tactically. It needs to act overtly, not covertly. In short, we must end the negligence of the past and get real about building an industrial base capable of delivering the jobs and companies that Britain needs for the future.

19:07

[Lord Bates]

My Lords, it is a privilege to follow the noble Lord, Lord Adonis, who has great expertise in these areas, and his contribution was typically thoughtful and thought-provoking. As he was recounting the painful experience of awarding the Hitachi trains order, I could not help recalling that while he was Secretary of State he desperately wanted to make that order announcement before the last general election. However other forces were at play and therefore it was with enormous pleasure that this coalition Government actually made that announcement following the election, demonstrating their commitment to the trains and the industrial base.

Telling stories is a very powerful way of communicating essential truths, because in the north-east—which I know best—before the last election we suffered the body blow of mass redundancies announced at Nissan, the Hitachi order and then the closure of the TCP blast furnace on Teeside. That was the final blow for the process industry struggling in that part of the world. Since the election we have seen Nissan announcing new investment, taking on workers and expanding. We have seen the Hitachi order and even seen the blast furnace reopen. At a CBI dinner last week in Gateshead, someone reminded me that eight major process industries—there is a cluster around Teeside and they are often interdependent—had gone out of business and into receivership before 2010. Of those eight, four had now come out of receivership and were employing more people than they were before.

I tell these stories because I think that they are quite important in demonstrating that I cannot in any sense see that this Government have an industrial policy of default rather than design. It may not be the design that others would actually choose, but it is certainly a design. It says that we want to make the United Kingdom the most competitive economy in the world for setting up and running a business. That is the stated aim. It is backed up with policies of reducing the corporation tax to its most competitive level, reducing barriers and regulation on employment and actually providing incentives for people to employ, such as setting up enterprise zones, creating an enterprise culture and getting rid of other regulations. Noble Lords may not agree with that but, none the less, it is certainly a policy and is having some effect. As my noble friend, who I welcome again to his position, reminded us yesterday, we saw the fastest rate ever of new business start-ups in the UK last year, with 1 million new private sector jobs being added to the economy since the election. This is all evidence of something that is happening: the creation of an enterprise economy. These businesses may not be the great oaks but they are the small acorns from which the great oaks will come in the future—of that I have no doubt.

Looking at these stories, does that mean to say that we have got everything right? Far from it; we have a very long way to go. I bring another thought from the north-east, of the Alcan plant at Lynemouth, where 515 skilled jobs went just last year—a decision which was a body blow for that part of Northumberland. They went because of EU directives on carbon pricing, which are seeing the price that people have to pay per tonne for carbon in the energy-intensive industries that are key to industrial output and manufacturing go up from £7 per tonne to £16 per tonne next April. Then in 2020 they will rise to £30 per tonne. That kind of decision, which has been taken at a European level, is causing plants such as Alcan’s to be closed. Where does that industry go? Of course, some people sneer and imagine that it has probably gone on in the direction of Kazakhstan or China, or somewhere like that. No; it went to Canada, where they are building a plant that will put the emissions into the same atmosphere.

We need to get to grips with this whole area. Of course, we need to tackle the environment and there are massive numbers of jobs to be gained through green energy. However, we need to be sensible about how things are applied lest we undermine the means that we seek. In this respect, my noble friend Lord Marland has a particular role to play, not only as a businessman but—this is a critical element—in coming to his current brief within BIS from the Department for Energy and Climate Change. These are different pictures and there are different stories that we can tell, but they suggest that we are perhaps beginning to move in the right direction. Industrial output was up by 2.9% in June, its fastest rise for 25 years, while manufacturing output rose by 3.3% in June, its fastest rise for 10 years. To be sure, it does not mean that summer has arrived but it does perhaps mean that spring has started.

19:13

[Lord Hennessy of Nympsfield]

My Lords, may I add my welcome to the noble Lord, Lord Marland, on his new portfolio? I am sure that I was not alone this summer when tasting the special delights of the Olympics and Paralympics in wondering whether there were wider lessons to be drawn from the glories we were witnessing. Our Olympics summer was a shining advertisement for what can be done through careful planning and a fruitful public-private mix, plus the energising effect of a wide and sustained political consensus in creating a remarkable collective enterprise. For those six lustrous weeks we were, to borrow from Abraham Lincoln’s 1861 inaugural,

“touched … by the better angels of our nature”.

Such thoughts triggered in my mind a memory of 1985, when the one-off Select Committee of your Lordships’ House on overseas trade reported under the chairmanship of Lord Aldington—of which committee the noble Lord, Lord Selsdon, was a member, as was the noble Lord, Lord Stoddart of Swindon. I was a journalist at the time and was struck by the urgency of the report’s tone. It struck me even more forcibly when I reread it last month. The committee was appalled by the shrivelling of our industrial base, particularly by the decline of manufacturing as a proportion of our national wealth and by a growing overreliance on services. This is the sentence that left the deepest dent in my memory:

“A principal theme of the Committee's report is that of the national attitude towards trade and manufacturing and their principal recommendation is that it needs to change—and change radically—if we are to avoid a major social and economic crisis in our nation’s affairs in the foreseeable future”.

We did not and we have not. In 1985, manufacturing accounted for 25% of gross domestic product. In 1947-48, my first year of life, that figure stood at 36.6%. By 2010, it had fallen to 9%.

Much has been achieved in renewing our industries and services since the mid-1980s. I am not this evening deploying what Edward Thompson called,

“the enormous condescension of posterity”,

to the work of far better men and women than me in science, technology, industry and commerce, who have applied themselves in the past to this problem and given it their absolutely best shots—far from it. I am also hugely sympathetic to the coalition’s industrial strategy, which seems to avoid both the excessive state interventions of the 1960s and 1970s and the excessive loss of confidence in what the state could do as an enabler in the 1980s. I have great hopes, too, for the review of competitiveness by the noble Lord, Lord Heseltine, which is due later this month, not least because of my admiration for the powerful public-private mix that he brought to the regeneration of Merseyside 30 years ago. I share, too, the analysis of the noble Lord, Lord Baker of Dorking, about our missed opportunities for transforming technical education since the exemplary White Paper on technical education of 1956.

I am, however, struck by the continuing resonance of the Aldington committee’s analysis of 27 years ago, when its report laid out the interlocking and mutually reinforcing changes that the UK needed to redress the balance between manufacturing and services and to achieve an enduring breakthrough in exports. These included improvements in the levels of investment, education and training, research and development, competitiveness and the pursuit of a co-ordinated strategy for recovery resting on as high a level of political consensus as possible. Every one of these factors continues to merit acute attention and the urgency is even greater in 2012 than it was in 1985.

This is a post-Olympics task for our nation, which requires the better angels of our nature and much, much more. Would it help a little if here in your Lordships’ House we found a way of deploying the sustained analytical application, realism and candour needed to assist in the improvement of our economic performance? Might a standing Select Committee comparable to Lord Aldington’s one-off committee be the way? I offer this suggestion at the risk of adding to that self-congratulation of which our critics accuse us, but we have in this House as rich a mixture of industrialists, financiers, scientists, technologists and economists as, I venture, any legislative Chamber in the world. There is no element of the condition of Britain that merits our sharpest attention more than the well-being of our industrial base and the prospects for generations to come.

19:18

[The Lord Bishop of Blackburn]

My Lords, in my diocese of Blackburn, which covers most of Lancashire, nine years ago the claimant count for the subregion was 1.6%. As I prepare to leave office, I note that this figure has now nearly doubled to 3% of the working-age population. To put this figure into direct unemployment terms, it has increased from 4.7% to 7.8% in that time. Yet there still remains a dynamic and outward-looking world-class aerospace industry that develops, manufactures and exports products throughout the world. It employs some 20,000 people directly. At present, it accounts for 23.8% of Lancashire’s manufacturing jobs and has nearly one-third of the total employment in GB aerospace. I am sure that your Lordships will understand my concern at the talk of a merger between BAE Systems and EADS. The impact of such a merger could have serious implications, not just for BAE but for the large number of small and medium-sized enterprises that support them in their work. I would be particularly interested to hear of the possible impact of such a merger, especially in view of recent developments.

The subregion used to be recognised as one of the major drivers in the industrial landscape of the country. Sadly, that is no longer the case. Previous large employers have restructured and moved elsewhere, or closed altogether. They have done that, in part, because of a lack of investment in better transport—that is, public transport, of course. I am sure that that is one of the major reasons.

Sadly, the National Infrastructure Plan 2011, announcing £30 billion of spending, does not fill me with much hope for a rebalancing of the economy between the regions. The Institute for Public Policy Research has analysed the proposals contained in the plan and discovered that 11 of the 20 largest projects benefit London and the south-east. Of the transport infrastructure proposals, the effect is a spend of almost £3,000 per head for those living in London, compared with a spend of just £134 per head for those living in the north-west and, I understand, just £5 per head for those in the north-east. It would appear that the regional imbalances are set to continue for some time to come.

I hope that as most of that spending on infrastructure will take place after the next spending review—although it is interesting to note that 18 major transport infrastructure projects have already begun in London and the south-east, compared with just one in the north-west—there is still time to redress that imbalance. I believe that my diocese and the whole north-west has much to offer the country by way of expertise and application. However, if we are to assist in the development of a vibrant, diverse economy, we do not need to be shackled by lack of infrastructure. Sir Winston Churchill famously said, “Give us the tools to finish the job”. I ask the Minister to talk seriously to his Treasury colleagues so that areas such as Lancashire, and indeed the whole north-west, can be given the tools to encourage investors. Not only will we in the north-west finish the job, but once again we will be the beating heart of the economy.

19:23

[Lord Selsdon]

My Lords, I always have great regard for anyone who gets on the train and decides to go round to visit his patch. That is because my great-grandfather and grandfather were chairmen of railway companies and used to race each other to Scotland so that they could get into the siding for breakfast. Therefore, railways and transport have always appealed to me. The noble Lord, Lord Hennessy, referred me to the Aldington report. I have already mentioned in the House that that was rather frightening to be involved in because we asked, “What happens when oil runs out? What will the British economy be based on?”.

I do not want to waste your Lordships’ time, but being a member of the Information Committee, I have a duty to promote the Library. The Library has produced a most excellent briefing pack, which many of your Lordships will not have seen because the Library is not very good at marketing it. It covers most of the points that need to be raised. The first question we asked—because I am always among my intellectual superiors when I go into the Library—is: what do we mean by Britain’s industrial base? The CBI could not tell me. Nobody could tell me. Were we talking of a manufacturing base? Was industry manufacturing? What about the service industries? I therefore wondered what the term applied to.

I looked again and thought that if we are to develop, we must accept what our economy is based on at the moment, and a large chunk of it must be based on foreign trade. However, we have relatively small exports by manufacturers. We have a large export of services and we have a tremendous financial business that often follows—as people have said, the star.

I always remember from my days when I had to do Latin:

“Abstract nouns in ‘io’ call Feminina one and all. Masculin can only be things that you can touch or see”.

I like things and I do not like the internet—I do not like all these communications where you have no physical manifestation. I do not like picking up the phone and asking a question to be replied to by somebody in a call station in the Philippines. I wonder whether we are not moving too far away from the physical, on which our economy should be based.

Let us take transport. That is one area where we are good, and we are good at railways. I was very moved when I saw that great steam locomotive during the Queen’s Jubilee. I thought that perhaps we have not run out of the ability to do trains. One project I got involved in was the Chemin de Fer Transgabonais. When President Bongo came to London, what clinched it was our suggestion that he might like to have a locomotive named after him: “Le President Bongo”. He said yes, provided that he could have another one based on the iron maiden, La Vièrge de Fer, meaning my noble friend Lady Thatcher. That triggered our building a railway.

My noble friend on the Front Bench will know that the same thing happened in water and sewerage, which were areas where we had great expertise in tunnelling over the years. Often you would have to almost dig out of his grave the engineer who had done it. I would talk to people aged 80 or more who had been involved with the Crown Agents or one of the other development bodies that we had around the world.

If we are relying on foreign trade for a large part of our future economic growth, we should look at the energy sector worldwide and the maritime sector—the water and the sea. I have already mentioned in your Lordships’ House that, with the Commonwealth, we have the longest coastline in the world. The coastline of the United Kingdom is longer than the coastline of India. That leads to shellfish because of the ins and outs. If we then look at the dependent territories and others, and the economic exclusion zones that apply around the islands, we see that we cover the largest part of the sea under what you might call the British flag.

In looking at our future, I suggest that we must take certain sectors and realise that we must not look only at this market; we have to look worldwide. Here comes the intellectual property of the engineering brigade made up of those who were educated and trained here and who trained others. An engineer from India trained here will go back to India, recall all that and have a certain loyalty. More can be done by training our young people and people worldwide, sending them back and keeping the relationship going.

We look, too, at the energy sector, which I find fascinating, and which the noble Lord raised. There is not just the movement of tidal floods, there is also the application of heat. We should look at where around the world there are energy requirements and energy resources—not just fossil fuels.

It is beyond my pay grade to work out how this happens, but people have said to me, “Look at the heat generated in the deserts. Look at heat transfer. Look at the pumping system. Look also at desalination”. One thought that came to mind during the Gulf War was that if you wanted to bring a country to its knees, all you would have to do would be to let oil out into the Gulf and block up every desalination plant.

In an odd way, infrastructure around the world is one of our futures. We cannot afford to rebuild our own infrastructure without having large orders. I am enthusiastic about the future, but it must be technologically led.

19:30

[Lord Bhattacharyya]

My Lords, I would like to thank my noble friend Lord Adonis for securing this debate and join others in welcoming the Minister to his new role. I declare my interest as the chairman of Warwick Manufacturing Group at the University of Warwick.

I have argued many times for a greater emphasis on industrial and innovation policy in Britain. However, for 30 years, we did next to nothing. That was the demise of British industry. Why did no one act? It was because past failures—bailouts, walkouts and closures—haunted Governments of all parties. We had White Papers about knowledge-based economies and so on, but real support for industry was off the table. We now realise that without industrial growth, we will not create the long-term, well-paid jobs the nation needs.

However, we can do it. Since the financial crisis, Jaguar Land Rover has created several thousand new jobs and apprenticeships. This is the sort of “industrial renaissance” we need. It has happened; it has not taken a long time—it has happened over the last three years. The leader of my party has had the guts to make changing the structure of our economy his long-term priority. However, there are simple steps we can take together, immediately, that will make a real difference to our industrial future.

First, Parliament has been saying since 1867 that we have a skills gap, but it is still a significant issue today. One step forward would be to extend the university technical college programme, championed so ably by the noble Lord, Lord Baker, and my noble friend Lord Adonis. Currently some 30 colleges are being developed. What stands in the way of tripling that number?

Next, I welcome the Government’s aim to increase apprenticeships and my party’s proposal for giving funding control to businesses. Yet apprenticeships work best when business seeks out talent and offers quality training in return, not when government simply gives funds for a particular programme, or even when a business does. Young people can tell which apprenticeships have prospects from make-work schemes. Recently, GKN offered 30 apprenticeships and had over 500 applicants. Scottish Power had 1,600 applicants for 30 positions. We must help businesses to create more high-demand, long-term apprenticeships. To do so at low cost, why not extend the tuition loan scheme with student apprenticeship loans? We would create a pot of money that businesses could use to pay for college courses for their apprenticeships. The student would decide if the apprenticeship was worth while; the training budget would help the business to afford apprentices; and the task of providing transferable skills would lie with colleges and universities. This would also help to abolish the vocational academic divide, which we urgently need to do.

Next, we need to increase investment. For two years now I have been fighting for a business bank. I am delighted that the Business Secretary has announced such a bank. Yet the Government talk about a billion in assets. A British bank needs to be operating at £1 billion a year. Much of this could be found by combining ineffective, small programmes and leverage could be increased by focusing on reducing the risk of loans made by private banks.

Finally, we need to increase funding for innovation. Here, again, scale is the issue. I recently returned from China, where I had discussions with senior ministers about their industrial strategy; I was hoping to set up a big company there. China is so concerned that the growth rate is falling to a mere 7% a year that it plans to increase innovation spend by a third in the next five year plan. China is also spending $160 billion on infrastructure alone, which will drive innovation in transport and green energy.

We have high-speed rail, of course, but even here, we seem to be frightened to take decisions. We also have good innovation programmes, such as the “catapults”, but budgets are small. As money is tight, why not take an example from America? Could we not put a small internal tax on government procurement, and use the proceeds to fund small business innovation? Today, departments have to identify innovation needs first, then find funding. No one wants to cut their budget to fund innovation elsewhere, so not much happens. If the funding was set aside, this would create a “funding well” that everyone would go to. Public procurement is over £200 billion a year, so even a quarter of a per cent would give us real scale.

That is four simple steps to help industry grow for the long term by acting today. In the last three decades I have often felt like a voice in the wilderness on industrial policy. However, I have brought some of the biggest inward investors into this country. They are all succeeding, because we have a lot of talent, a large skills base at the upper end, and because our science and technology is second to none. Why is it that other companies can use these? Today the words “industrial policy” are on everyone’s lips, which is most welcome. But worthy talk means nothing without action. Now is the time to deliver.

19:35

[Lord Empey]

My Lords, like other Members I welcome the Minister to his new role. He comes to the Department at a very critical time. I also thank Lord Adonis for securing this debate, because if we listen to even today’s trade figures, we realise what a mountain this country has to climb.

Lord Adonis opened his remarks by telling a story about wind turbines. May I inform him that in my own home city of Belfast, Harland and Wolff shipyard now assembles wind turbines and works very closely with Siemens in building the transformers and power distribution systems that have to be at sea. We hope that that will be a source of considerable economic growth.

This country took a wrong turning in the 1960s and 1970s, when contempt began to emerge for our manufacturing sector. It was true that British industry was disfigured by widespread strikes and became a byword for how not to do things. Motor vehicles were the most obvious example of where things began to go wrong, poor quality being the most obvious flaw. But in Whitehall a view began to emerge that we could no longer make things that the world wanted to buy, so we should move over to the service side. Finance, insurance, tourism and, later, IT were among the growth sectors. It was believed that the service sector could make up the losses in manufacturing jobs that people would no longer need. Therefore they would no longer require apprenticeships but could be trained for the white-collar jobs emerging, including a big surge in the public sector. A by-product of this thinking was the redistribution of jobs from the north of the UK to the south-east, something which still haunts us today.

The massive increase in interest rates in the early 1980s extinguished large swathes of our manufacturing sector. People were paying up to 22.5%. While much of the sector was clearly uncompetitive, the rapid and uncontrolled demise of such a large part of industry was regrettable and we still live with many of the consequences. The belief that we could survive in the modern world without making things that people here and in other parts of the world wanted to buy has been shown to be wrong.

Traditionally, as an island nation, we have always been traders of manufactures. This was our lifeblood and we turn our back on this part of our history at our peril. The strength of any country’s industrial base comes from either the possession of large quantities of natural resources or from a highly skilled and motivated workforce with access to capital—or from a combination of both. There is a growing realisation that we have ignored manufacturing for too long and that our ability to pay for our public services is inextricably linked to our ability to export more goods and tradable services. Our trade deficit is running at about £40 billion a year—of which half is with China—and urgent action is necessary. We cannot permanently rely on borrowing to sustain our lifestyles.

People glibly say that the way out of our financial difficulties is to “grow the economy”. Who says that we are guaranteed a growing economy? What happens if the natural growth in world demand is met by emerging economies? What happens if we have to rely long-term on the current level of economic activity? The first thing that we must do is to ensure that we hold on to what we have and ensure that it is fit for purpose.

Ironically, as we speak, the future of our major defence company is on the line with the proposed merger between BAE Systems and EADS, as a number of noble Lords have mentioned. The UK is number two in the world in the aerospace sector, with approximately 17% of world markets. I fully understand that defence spending is under great pressure here, in the rest of Europe and in the United States, and the temptation to spread the load and the risk with this merger must be great, but this is one decision that we must get right. Like many, I feel most concerned that any defence supplier to Her Majesty’s forces should not be subject to any political pressure from any other Government, whether French, German or American.

We have seen examples in recent years of how Governments differ. In Libya last year, the German Government did not fire a shot in anger, and we recall that it was a French Exocet missile that created havoc for the Royal Navy during the Falklands dispute. What would happen if HMG took a different stance on a future conflict from either or both of those partners? How could we be sure that supplies of parts and spares would flow if those shareholders and HMG were on opposite camps? The Americans may have concerns over security of supply, but they also have commercial fish to fry; if they can find a way of pushing BAE out of the US market, there will be more to go around for US contractors. This is a very difficult decision, and I hope that we get an early chance to debate these issues before irrevocable decisions are taken.

As a nation, we must refocus on getting business the skills to train internationally, and I hope that the Chancellor will see to it that there are fiscal incentives to favour those companies and individuals that create wealth, rather than seeing them penalised for their entrepreneurship.

19:41

[Lord Giddens]

My Lords, I also welcome the noble Lord, Lord Marland, to his role, and I look forward to many interesting debates with him.

I have been a practising social scientist for several decades—a sign of a misspent life, one could say—and never before has the future of world society and the world economy seemed to me so opaque and imponderable as it does now. To me, this is not a recession like other recessions; it is an expression of much more deep-rooted forces that none of us at the moment fully understands. When we look at manufacture worldwide, it is a big mistake to suppose that the dominant force in the world economy is a simple transfer from west to east. That is happening, of course; in 2010 China became the world’s largest manufacturing country by output. Yet that simple statistic conceals complex changes whose consequences are not at all clear—at least not to me.

Manufacturing output has risen sharply over the past 30 years the world over, but the proportion of jobs created has actually gone into reverse. Worldwide, there has been a net reduction in manufacturing jobs since 1990 in spite of the rapid growth of manufacturing in China and other emerging economies. When we see areas in the UK, the US or the EU where unemployment is over 20%, this results as much from technological innovation as from a shift of manufacture eastwards. In other words, the advance of manufacture is very different from the creation of net new jobs. Moreover, much manufacture now takes place in global chains rather than in particular countries. As the FT journalist Peter Marsh points out, to be a star manufacturing company you do not need to make anything, and the biggest manufacturers in the world do not in fact make anything. Rather, what happens is that the company co-ordinates a diversity of businesses in different countries. This is radically different from the past.

We are currently experiencing what Marsh calls, in his book of the same name, a “new industrial revolution”. It is initiating an era of mass personalisation, much more decentred than old manufacturing processes. A good example is the firm Essilor, based in Paris. It is the leading maker of lenses for glasses in the world, making 100 million lenses, unique to each customer —amazing—that are sold to 400,000 opticians in 100 countries. In order to do this, the company has a network of 20,000 computers in Essilor offices around the world. This is a totally different pattern of manufacturing from the past, and we do not quite know—as social scientists, anyway—where it is leading us.

Against this backdrop, it certainly makes sense that we should build up and expand the UK’s manufacturing base, but we have to do so in terms of the trends that I have been describing and to be very sensitive to them. I have three brief points to make in working this through. First, although it is right to emphasise a return to industrial policy—the new wisdom, as it were—it will actually have to be totally different from the 1970s. It will not be a matter of picking industries or of simple investment in infrastructure; if it is going to work, it will have to be much more holistic and involve large chunks of the economy and of government, and at the same time be highly flexible. That is a great challenge. At the moment we do not really know how to do this and an awful lot of work will have to be done, so loose talk about industrial policy should be avoided.

My noble friend Lord Adonis mentioned renewables, but they are very unlikely to create new jobs. It is no good just saying that they create jobs; they have to create new net jobs, but jobs will be lost in the older fossil fuel industries as renewables come on track. New technology tends to destroy jobs rather than just create them, at least in terms of net jobs.

Secondly, we have to be very careful about borrowing naively from what appears to be current best practice—for example, “Let’s be more like Germany”, “We need more technical skills”, “We need more apprenticeships” and “Let’s create the equivalent of the Mittelstand”. It is only 10 years ago that Germany was regarded as the sick man of Europe, and its status as a manufacturing country gained enormously from its membership of the euro. A detailed study shows that if Germany exited the euro, it would lose probably 40% of its manufacturing capacity competitively in world markets. One should reflect on that.

Thirdly, we should not assume that current trends are unilinear. I do not understand why people in this country are not taking notice of the reindustrialisation debate in the United States, which I have mentioned in previous discussions. The Boston Consulting Group reckons that 3 million net new jobs in the US can be created by 2020, but these result from a reversal of the existing chain transfer from west to east. The price of oil, the need to protect patents and the rising costs of labour in China are likely to reverse some aspects of the current trend of movement of manufacture from west to east. These are likely to be not in high-tech industries but in low-tech ones. That debate should be pursued in detail in this country too.

19:48

[Lord Bilimoria]

My Lords, I welcome the noble Lord, Lord Marland, to his new ministerial role and look forward to many future interactions.

I thank the noble Lord, Lord Adonis, for securing this timely and indeed timeless debate. In fact, the word of the day with regard to British manufacturing is “decline”. I declare up front my interest as chairman of the Cobra Beer Partnership, a joint venture with Molson Coors, one of the world’s largest brewers. If you need evidence of Britain’s continuing strength in areas of manufacture, look no further than the brewing capital of the world, Burton-on-Trent, the largest brewer in Britain and one of the largest in Europe, where we brew Cobra beer.

I am relieved that the Government have finally woken up to the fact that we in Britain do not have a balanced economy; we have let things slip. Agriculture is now barely 1% of GDP. In 1978, as we have heard, manufacturing was 26% of GDP; today it is 12%. In 1970, services accounted for 54% of GDA and manufacturing 40%; by 2009 services had increased to 78% while manufacturing had declined to 17%. Does the Minister agree that the Government need to encourage manufacturing?

We have not lost the ability to be the best of the best manufacturers in the world, particularly in advanced engineering and design. I visited the Rolls-Royce Motor Cars factory in Goodwood and was inspired. I visited the Rolls-Royce factory in Bristol and saw the engines of the Typhoon being built, and was inspired. Cobra is first and foremost a multiple award-winning manufacturer and I am proud of it—I am sorry to boast. Will the Minister admit that the Government are not doing enough to encourage innovation? First, we have had a short-sighted cut of up to 80% of teaching funding in higher education. We have the finest universities in the world along with the United States. Higher education is one of the jewels in our crown. How short-sighted is this eroding of our competitiveness as an industrial base?

Does the Minister agree that the UK Government are hugely underfunding and undersupporting R and D? The UK’s investment in research and development is well below that of other advanced economies. Sweden spends 3.5% of its GDP on it, Finland and Japan around 3.4%, Germany 2.5%, the United States around 2.7% and the United Kingdom only 1.8%. Furthermore, according to the World Economic Forum, in skills development, about which the noble Lord, Lord Adonis, spoke, the UK workforce is 18th in the world behind Germany, Japan, Sweden and the Netherlands, to name just a few. Yet I was privileged to write the foreword for Big Ideas for the Future, published by Universities UK and Research Councils UK, and I was proud to see that despite this relative underfunding and underinvestment, British universities continue to punch well above their weight. This publication highlights 200 world-beating, world-changing innovations coming out of British universities throughout Britain, and not just Oxford and Cambridge.

Are we doing enough to encourage students at school to take up science and engineering? In 1949 an Eton biology master wrote in one of his pupil’s reports that he believed that he had,

“ideas about becoming a scientist; on his present showing this is quite ridiculous … he would have no chance of doing the work of a specialist, and it would be a sheer waste of time, both on his part and of those who would have to teach him”.

I was delighted and proud today to see that at my old university, Cambridge, yet another Nobel Prize was won by that same Eton schoolboy, Professor Sir John Gurdon, still middle-aged at 79. In my book old age is 80 onwards.

Having been born and brought up in India, and as the founding chairman of the UK India Business Council, I have seen the enthusiasm with which Indian students pursue engineering. The Indian institutes of technology are more difficult to get into than Oxford, Cambridge, Harvard, Yale, Stanford and MIT combined and multiplied by 10. There is the whole issue of funding in British industry. The irony is that we have bailed out the banks, but the banks are not lending to business, particularly to SMEs. I pointed this out to the Minister yesterday in the House and I remain unsatisfied that the Government are doing enough to make the banks lend to start-ups and SMEs. The Government need to encourage entrepreneurship and SMEs, and could institute so many more tax breaks and incentives for new business and businesses taking on new employees, such as cuts to employers’ national insurance and NI holidays. Will the Government consider this?

We are very lucky to be outside the euro, and to be one of the most open and welcoming economies in the world. I was delighted today to read that in a recent survey, British companies felt less affected by red tape than those in other countries featured in the survey. This is great news. However, in spite of our corporation taxes coming down, our tax burden overall is still too high and unattractive to inward investment and to the brightest talent.

The Government’s madcap immigration cap is sending out the wrong signals, not least by including student numbers in the overall permanent immigration figures, deterring foreign students. Does the Minister agree? I know that applications from India have been plummeting and that students there are asking, “Does Britain want us?”. We need to attract the brightest and the best foreign students, let alone the £8 billion that they bring into the economy and the generation-long links that they build with their countries, which can only help our global business reach. Foreigners make up 30% of Oxford and Cambridge academics, and the immigration rules are affecting them. Does the Minister not agree that this is madness and short-sighted?

We have so much going for us in this country. We have an industrial base that is still the best of the best and that has the potential to grow if we make it a priority. I am delighted that the Government have finally woken up to this and I urge them to set a target that manufacturing grows as a percentage of GDP. It is manufacturing and business that pay the taxes that create the jobs that pay the taxes that pay for our public services. It is our world-beating manufacturing that is crucial to keeping Britain’s competitive position at the top table of the world.

19:54

[Lord Haskel]

My Lords, I welcome the Minister to his new job and also congratulate my noble friend on moving this Motion about industrial policy. In recent years so much of our industrial policy has been a debate about devaluation and copying others. Our industrial base must be built on our own strengths. We have to correct our own weaknesses.

John Kay’s report of 23 July points to our first weakness. His diagnosis tells us that the financial markets in this country serve the business creators poorly. It is the agents and the middle men who are served best. He also says that the structure of the markets militates against long-term decision making. An industrial base is certainly a long-term project. An early task is to change the rules of the financial markets so that stewardship becomes the business culture of our industrial base.

Let me turn to manufacturing. As the noble Lords, Lord Hennessy and Lord Empey, explained, manufacturing has to be part of our industrial base. We have strengths in manufacturing. We have some wonderful companies in the motor industry and aeronautics, and I am sure that the Minister will join me in singing their praises, but are they part of Britain’s industrial base? The majority are foreign-owned—owned by global enterprises that are part of the global industrial base. They are of course committed to the UK, but their concerns are global.

We must now see our British industrial base as part of the global industrial base. Globalisation matters. These companies also see themselves as part of the single-market industrial base. That is why the EU also matters. But manufacturing itself is changing. New manufacturing techniques and biological processes make customised and small-scale local production viable, as my noble friend Lord Giddens explained. New materials are making products with new processes, and new technology is raising productivity to make existing processes faster. This new technology and these new ways of looking at business are turning economies of scale on their head. All this has to be considered in assessing our industrial base. We have a strength, with the Technology Strategy Board providing help, without undue commercial pressure, to find our way through these changes. The ability of the public and private sectors to work together to convert ideas into products and services must be part of our industrial base, as my noble friend Lord Adonis explained. Hand in hand with this is the strength of our science base. The Government tell us that expenditure on our science base is justified and will be maintained. This must be a strength, but is it true?

We now learn that Government departments have cut their R & D budgets, and the details are in today’s Financial Times. I am sure that the Minister has seen them. Perhaps he can explain what is happening and what the truth is. For a modern industrial base dynamics are important: business has to work in concert with science. Cluster dynamics, or knowledge and innovation communities as the commission calls them, are an important part of our modern industrial base. This is where a lot of the innovation comes from. You get a double benefit. If you create an innovative piece of medical equipment the whole nation’s health benefits from this medical innovation enabled by this piece of machinery. This double effect is one of the real benefits of having a modern industrial base built in this way.

The most important part of our industrial base must be our people, our human capital. In the modern industrial base, so much of the so-called brain work is increasingly undertaken by algorithms and artificial intelligence, much of it to raise productivity. Our strength will be to accommodate this and not fight it, as described by my noble friend Lord Bhattacharyya. Skills training will have to take a quantum leap. It is the quality and the standard, not just the quantity, that will be relevant. This improvement must be continuous. If this is true, then our best and brightest will have to become our teachers. Our Teach First scheme is a start, but we will have to move into a higher gear. This uplift in skills will have to apply to everybody, not just to an elite, because, as my noble friend Lord Giddens said, modern technology can destroy jobs as well as create them. Therefore, our industrial base must be based on an equal society, on one nation, because without a fair and equal social base, our industrial base will be built on sand.

20:00

[Lord Hunt of Chesterton]

My Lords, I welcome this debate and thank my noble friend Lord Adonis for introducing it. I also welcome the noble Lord, Lord Marland, to his new role. He made a tremendous commitment to nuclear energy and I hope he has passed on the message to his successor at DECC. You cannot have all sweet—a little sour is necessary—so I have to remind him of when he got rather agitated at an all-party meeting on energy-intensive industry and suddenly loosed off. He said, “The UK should become the corner shop of the world”. We wondered about that as it was an unusual ambition, and one hopes he meant the laboratory and workshop of the world. That is what I want to refer to.

Following the focus of the noble Lord, Lord Selsdon, on national laboratories and technological centres, all countries of the world have hitherto regarded them as an essential part of a technological economy, but not the UK. I worked in an industrial lab in the 1960s. At that time, we had fantastic, world-leading laboratories in electricity, gas, water resources, railways and hydraulics. They are all gone. Since the 1990s, we have lost the Royal Radar Establishment, the Royal Aircraft Establishment and the United Kingdom Atomic Energy Authority. They all played an essential role in providing advice and development, in testing new technology and in stimulating thousands of small companies. A few national centres have survived, such as the National Physical Laboratory, the Laboratory of the Government Chemist, Cefas, the Building Research establishment, the Culham laboratories and, I am glad to say, the Met Office. You can read about why the Met Office survived and about its history in the House of Lords Library.

However, a similar story also took place in the major industrial laboratories, which were world leading. We had two major oil company laboratories, one in Cheshire and one in Surrey. I am glad to hear that BP has now reversed its policy and is expanding its strength. We had amazing electrical engineering laboratories in Leicester, Stafford and Essex. I remember an advertisement in the 1960s for English Electric laboratories. It said, “Come and solve the Navier-Stokes equation and the problems of fluid mechanics”. That does not happen now. As other noble Lords have emphasised—but not very many—we still have the world-class Rolls Royce centre and its remarkable network of university laboratories. Its approach was very different from elsewhere, and other countries have copied it. It is true that university research has expanded greatly in the UK, as in other countries, and we have new high-tech companies—in which I declare an interest as chairman of a small high-tech company—but these institutions are not the same as the technological base. The exception, perhaps, is Warwick’s engineering centre, which has the roles of national technology base and university.

What is the future of our technological industrial base? There is no plan or even principle that one can discern, and one asks whether the UK will become a major technological economy again. The evidence is that the greatest success comes through international collaboration. We are, in fact, part of Europe and some of our major laboratories are now collaborations. One way of looking to the future is by looking at the market opportunities, such as aviation, in which we have Rolls Royce and Airbus. One of the interesting points about the 1960s—and I refer to the noble Lord, Lord Hennessy—is that there is a general statement that there were great mistakes about electronics and aviation. The French say that building Concorde was the essential breakthrough to persuade the Americans that Europe could produce an aeroplane that flew regularly and safely to America, and that without Concorde we would never have had Airbus. In Britain, Concorde is often regarded as an industrial mistake, but in France it was regarded as the way to enter the market. High technology enables you to enter markets.

The other point of the House of Lords Committee concerned why we have a very good software industry. The answer is Harold Wilson because he said that we not only had the white heat of technology but that we wanted to have transputers. Nobody had ever heard of them in the 1960s, but that was the basis of our extraordinary software industry. That is the reason why governmental and department initiatives are important, as well as research centres.

The other important point, which other noble Lords have mentioned, is that we must look forward to the long-term needs which will have strong technology input. My noble friend Lord Adonis referred to infrastructure for dykes, roads and buildings. The extraordinary thing about the Netherlands is that they put them together and put windmills on their dykes, which saves 40% of the cost of the windmills. We need energy, whether wind or nuclear. This Government have been very strong in advocating space. We now essentially have a government lab—it is a European government lab in Harwell—for making use of space. Looking forward, are we simply to rely upon industry and universities to provide the technological base, or should we reconsider establishing a new technological base, making use of them but, in addition, making use of government resources?

Finally, I emphasise the importance of good graduate engineers, which other noble Lords have mentioned. I was talking to colleagues this morning. The difficulty in the UK is that we have some universities with an extremely demanding curriculum producing extremely good engineers, but too many schools and universities do not have such a demanding level and German companies say that they do not correspond to the standards in Germany. In Germany, engineers are paid almost as much as lawyers. In Britain, engineers are paid half the salary of lawyers. Lawyers work extremely hard at university because of the high pay at the end of it. How are we going to solve that? I do not know. I leave that to the Minister.

20:00

[Lord Young of Norwood Green]

My Lords, I, too, congratulate my noble friend Lord Adonis on creating the opportunity for this debate. Given the complexity of the subject, it is a short period to try to deal with it. I congratulate the noble Lord, Lord Marland, on his appointment. I do not envy him trying to sum up this debate given the varying strands and the different advice that he has been given. Given the time available, I am going to focus on only one or two issues.

Skills are a key part of our industrial base and I want to draw attention to the importance of STEM subjects. My noble friend Lord Haskel mentioned the quality of teaching in engineering, maths and physics. My noble friend Lord Adonis was one of the promoters of Teach First. In trying to convince young people that engineering is an area worth entering, we need to focus on the quality of teaching.

There was lots of talk about infrastructure. I want to concentrate on our broadband network, investing in it and making sure that investment delivers and delivers on time, given the importance of broadband investment in R & D and in all our industries. My noble friend Lord Adonis talked about the poor quality of the mobile network. Why is it taking us so long to introduce 4G? By the time we get round to introducing it, 5G, which is on the horizon, will already be with us.

Given my interest in skills and apprenticeship, I want also to focus on apprenticeships. A variety of advice is coming to us on apprenticeships. I am not sure that I completely agree with my noble friend Lord Bhattacharyya on how we should fund them, but their importance should not be underestimated. My noble friend Lord Adonis told us of his experience of companies saying to him, “We were looking for 86 apprentices out of 1,500 and we could not get them”. That comes back to the quality of teaching and ensuring that our best young people understand that it is worth going into engineering. That is fundamentally important. My noble friend Lord Bhattacharyya reminded us that the number of applications for apprenticeships vastly exceeds those available. Demand exceeds supply enormously. My noble friend gave his example and the example that I normally give is British Telecom. It has some 300 apprenticeships and it gets something like 25,000 applications.

The number of companies offering apprenticeships is still pitifully small—only a third of the FTSE 100 companies. Somewhere between 4% and 8% of companies are actually offering apprenticeships. They are a good deal, so how do we encourage the creation of apprenticeships? I hope the noble Lord will address in his reply why the Government are not demonstrating by example and by their own leadership. When they offer government contracts, they should ensure that apprenticeships and training are a key part of those contracts. We did that in the previous Government, and it is interesting that the noble Lord, Lord Hennessy, in his contribution referred to the Olympics—I cannot remember the wonderful quote from Abraham Lincoln. It was not by chance that we got nearly 400 apprentices out of the Olympics; we got them because there was a demand on the companies. Similarly with Crossrail, we ensured that some 400 apprentices would emerge from that. I cannot for the life of me understand why the Government do not understand the importance of demonstrating through their own contracts the creation of apprenticeships. It is an area that the Government have to tackle.

There is another way the Government could encourage apprenticeships. If they want more SMEs to participate in apprenticeships, one of the key ways is through more group training associations, the hubs that encourage SMEs to recognise that if some of the administrative and training burden is concentrated centrally, it becomes much more attractive to those companies to participate in apprenticeships.

I am conscious of the clock, so I will wind up my speech. I think it was my noble friend Lord Giddens who gave us the global perspective, if you like. I did not know whether to feel cheered or gloomy at the end of it, although he gave us some sage advice about the great challenge of trying to create net jobs. I hope that when the Minister gives his reply, he will focus on how we are going to create more apprenticeships.

20:13

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)]

My Lords, my wife said to me in the car as we came down from Birmingham that this was going to be a very interesting, high-quality debate. As always, my wife is right. I am very grateful for the support of my noble friends Lady Garden and Lord Gardiner, who are obviously showing their trade at skills very early on.

[Lord Giddens]

I thank the Minister for allowing me to speak. I find it interesting that there are no women taking part in this debate. Perhaps one thing we might do is encourage more female entrepreneurs—viz, your wife.

[Lord Marland]

My wife does not need any encouragement, but I am sure she will be very grateful.

I thank the noble Lord, Lord Adonis, for making this debate available because this is a massive challenge for the country, for the Government, and for those of us who have to set about the challenge. What came through to me about this debate was how passionate we all feel about the future of British industry, British manufacturing and Britain plc. We have a lot to do and we can all play our part. If we have passionate people who want to be involved, that is very good.

The noble Lord, Lord Adonis, summed it up by saying that we have been negligent in the past. That is true, and it is not just the previous Government but the Government before that. As has been referenced by the noble Lord, Lord Bilimoria, the present Government have inherited a reduction of manufacturing output from 22% down to 11% in the past 20 years. Why has that happened? It is because there has been a lack of investment, as has been referenced, and a lack of competitiveness, which we need to reverse.

However, it is not the end of the world. Years ago, as the noble Lord, Lord Hennessy of Nympsfield, reminded us, 92% of the activity in this country was in agriculture. The right reverend Prelate mentioned the industrial output in Blackburn. My family on both sides were involved in Ashton-under-Lyne, of all places, and further south in Manchester in the cotton manufacturing industry, in Lancashire Cotton. Now look at that industry; it has changed out of all recognition. As has been referenced by many noble Lords, including the noble Lord, Lord Haskel, we live in a global world with fast-changing global dynamics, where Britain has been at the forefront of moving with those dynamics and changing our economy into a diversified economy, which, of late, has become overdependent on the financial sector, and we are licking our wounds from that overdependence.

We have also failed to store the benefits of our prosperity for a rainy day. So many other countries do so, such as Norway, which has a marvellous sovereign oil fund and so much of its oil profits have gone into those oil funds.

We have to redress the mess and we intend to do so. It will not happen overnight. Nothing does happen overnight. This is a big country where we need to change things. People have got used to a way of life that has revolved round a very munificent European purchasing economy and that is now changing as that economy goes into the doldrums. The Government are at odds with the noble Lord, Lord Bilimoria, in the sense that we believe businesses do better when government does less. We also believe that people do better when government does less. That is why it is important for government to set a framework for business and allow business to take things forward with the right initiatives and incentives, which I shall come to later. However, we cannot hold the hand of business. We can take it to the trough but we cannot make it drink.

The corporation tax plan that the Chancellor has outlined, which takes corporation tax down to 22% by 2014, which will make it the lowest in the G20, is a real incentive for business. Our Red Tape Challenge is being looked at very closely by this Government with a view to reducing 1,200 red tape regulations. We have revolutionised our UK trade and industry department with a very outward looking, purposeful export drive. Export is the key to our growth recovery. That is why, as I referenced earlier, I have done 25 country visits in the past 10 to 12 months. The noble Lord, Lord Green, has carried out some 43 such visits. The Prime Minister always takes a large delegation with him when he goes on overseas visits because without an export drive we will not get growth.

Time does not allow me to go through all the various schemes that we have put together. However, noble Lords will know that we have the regional growth fund, the Plan for Growth, mentoring schemes and schemes to develop education and skills, a lot of which I mentioned at Question Time yesterday. In manufacturing alone we have the Advanced Manufacturing Supply Chain, the Manufacturing Advisory Service and the High Value Manufacturing Catapult centre. I applaud the excellent work of our colleague, the noble Lord, Lord Bhattacharyya, who has been at the forefront of that as he has been at the forefront of the excellent Tata company, for which we are very grateful.

As the noble Lord, Lord Adonis, put it, we can all go round the country finding examples of good news and bad news, and he gave eloquent examples of each. The most important thing is to support the bad news stories and turn them into good news stories and that is the job of government. I am grateful to my noble friend Lord Bates for pointing out that all is not lost. We have 1 million new jobs in the public sector and 450,000 businesses have registered with Companies House in the past 12 months—the highest figure since records began, so there is a platform for starting this change of emphasis. Both the noble Lord, Lord Adonis, and my noble friend Lord Bates mentioned—

[Lord Giddens]

I thank the noble Lord for giving way. Could he also give an analysis of the businesses that have closed down?

[Lord Marland]

I cannot take too many questions as I shall never get through my speech in the 12 minutes which have been allocated, but I think the figure is about 290. However, we can give the noble Lord exact figures later.

The noble Lord, Lord Hennessy, talked about having a business Select Committee. That is a very good idea. There is, in fact, a BIS Select Committee and a Lords inquiry into SMEs. One of the initiatives that I have undertaken is a trade representatives programme appointing specific trade representatives for specific countries. This will be announced by the Prime Minister in the not-too-distant future. We need to look at initiatives as regards how we can review trade. I am very grateful for that suggestion.

The right reverend Prelate referred to the British Aerospace and EADS merger. We think that we will know more about that tomorrow evening. Therefore, I think he would not expect me to talk about that at this point. We regret hearing that he will not be with us for much longer. We wish him every success. His contribution was extremely beneficial.

The noble Lord, Lord Selsdon, talked about energy and the rail infrastructure as being key areas of development and I cannot but agree with him. I have already mentioned the noble Lord, Lord Bhattacharyya, who has so much experience and knowledge of this area and feels deeply about the need to enhance our skills to provide a platform from which we can emerge into growth.

The noble Lord, Lord Empey, talked about trade and manufacture. He talked very interestingly about Northern Ireland, of which he has great knowledge. I take on board everything he says. The speech that the noble Lord, Lord Giddens, made was an immense tour de force. I compliment him on it and I totally agree that the holistic view has to be taken and that we need to consider globalisation. I am not going to be able to deal with all the questions the noble Lord, Lord Bilimoria, raised. I make the offer to him and to all noble Lords that I will be happy to discuss any of this at a later stage or at further debates. The noble Lord, Lord Haskel, again talked about globalisation and he is absolutely right. The noble Lord, Lord Hunt of Chesterton, reminded me of the need for laboratories but, again, all is not lost as Sir John Gurdon has been rewarded for his expertise.

The noble Lord, Lord Young of Norwood Green, talked about broadband. Broadband is fundamental; I was discussing it with the Minister responsible today and urging him that we should move on further. As a Government we took the initiative to sell 4G, which we are in the process of doing. It takes a while but it was an initiative I am proud to say our Government took part in.

We have a world-class country. All of the countries I travel to want to do business with Britain. We are in the top three of any countries in the world that countries want to deal with. We have design and technology of the highest quality, architecture, accounting, agriculture, oil, defence, aerospace, digital music, motor cars. For the first time in many years we are exporting more cars than we are importing. We have insurance, strategic planning, medical, education, et cetera. We are a world-class country which is looked upon with huge favour by the world. I invite all Peers who feel as passionately as I do to support and champion business as we try to get ourselves out of the economic problems that noble Lords have all very kindly addressed. With that I thank all noble Lords for their contribution.

House adjourned at 8.26 pm.