Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Geddes)
My Lords, as is customary on these occasions, I must advise the Committee that if there is a Division in the House, the Committee will adjourn for 10 minutes.
Electoral Registration Data Schemes (No. 2) Order 2012
(12 years ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Electoral Registration Data Schemes (No. 2) Order 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, The order will provide the legal basis for a further electoral registration data-matching trial, by enabling the sharing of specified data between several data-holding public authorities and some 22 local authority electoral registration officers. The work that we plan to do under this order will form a significant part of our planning for the implementation of individual electoral registration.
The Committee will be aware that this is the third draft order of its kind since the summer of last year. It may be helpful if I were briefly to recap the story so far, before I go into detail about what the present order will do.
The first order—the Electoral Registration Data Schemes Order 2011—allowed us to carry out a set of data-matching schemes and evaluate the results. In those schemes, we were trying to find out whether matching their registers against public authority databases would help electoral registration officers to find potential electors who were missing from the register, so that they could contact those people and invite them to register. We were also trying to find out whether data matching would help registration officers to find entries on their registers that might be inaccurate or fraudulent, so that they could investigate them and then, if necessary, take steps to remove them.
We learnt a lot from those first schemes about the challenges of data matching and about the techniques and the technology that we would need to put in place if we were to do data matching more effectively and on a larger scale. When the schemes were over, the evaluations told us that more piloting work would be needed if we were to ascertain the potential of data matching, and data mining, for finding potential electors who are missing from the register.
What last year’s schemes did reveal, however—rather unexpectedly, it is fair to say—was that data matching might give us a way of confirming the majority of existing electors on the register in the transition to individual registration. If that turned out to be correct, most of the electorate would not have to register individually as soon as individual registration is introduced. That would be more convenient for electors; and for electoral registration officers. There would be significant savings in time and money which would enable EROs to concentrate on those whose details could not be matched and those who were missing from the register altogether.
We needed to test our understanding, however, and we needed to do it quickly so that, if this was shown to work, the necessary systems could be put in place in time for the transition. The second order—the Electoral Registration Data Schemes Order 2012—approved by the House in the summer, was sought mainly to enable that testing, and the schemes for confirming existing electors are now in progress. That order also allows us to carry out further testing of data matching for finding missing potential electors and inaccurate or fraudulent entries; but only in the areas specified in the order, and only using data held by the Department for Work and Pensions. But I told the Committee in the summer that if we decided to extend the schemes to include further areas or data sets, a separate order would be laid before your Lordships at a later date. We are now ready to do that further testing, hence the order now before the Committee.
This latest order will allow EROs in the areas listed to compare their registers against specified public authority data sets. The public authorities which have agreed to make their data available for these schemes are the Department for Work and Pensions, for areas that were not included in the previous order; the Department for Education or, for schemes in Wales, the Welsh Government; the Student Loans Company; and Royal Mail Group. The schemes will target three particular groups where there are high levels of under-registration: people who have recently moved home; young people of 16 to 18 years of age who are just going on to the register; and students. They will complement a programme of work that the Cabinet Office has in hand to maximise electoral registration among groups identified as currently under-registered and at risk of falling off the register during the transition to individual registration.
The main purpose of the schemes will be to see how far data-matching helps EROs to improve the accuracy and completeness of the register by finding people who are missing from the register and finding entries on the register that should not be there. The schemes will also help us to design, develop and test the technology that we will need if data-matching is to play a significant part in future arrangements for electoral registration.
In addition, the order will enable EROs in four lower-tier authorities in two-tier local government areas to match their registers against education data held by their county council, to see whether it helps them to find 16 to 18 year-olds who are not yet registered. Registration officers in unitary authorities already have access to such data because it is held by the same authority that appointed them, but their counterparts in two-tier areas have no right to access the same kind of data if it is held by a different council. The results of these schemes will help us to decide whether it would be worthwhile to legislate to correct this anomaly.
The order will also enable us to augment the work that is already being done on confirming existing electors, by allowing us to carry out a statistical analysis to find out how far other public authority data sets might add to the match rate obtained from DWP data. The Higher Education Funding Council for England has agreed to make its data available for this purpose alone.
As in previous instruments of this kind, the draft order requires that before any data can be transferred, a written agreement must be in place between the ERO and the data-holding public authority setting out the requirements for the processing, transfer, storage and destruction of the data. It sets 17 July 2013 as the date by which each of the schemes must have been evaluated by the Electoral Commission. I also assure the Committee that after the pilots have ended and the evaluation is complete, the data created and held for the purposes of the pilot schemes will be securely destroyed.
The Information Commissioner’s office has been consulted on this draft order. The office has welcomed the fact that the current phase of pilot schemes has identified a much narrower range of data, and that the schemes will inform the extent to which personal data to be collected from electors can be minimised. I hope that the Committee will recognise the value of this further work for improving the accuracy and the completeness of our electoral registers.
I would like to make some additional points which I hope will help the Committee. All of this feeds into the wider context of digital transformation and the development of what in the trade is called “identity assurance”. This morning, I had a useful briefing from the government digital service on exactly this matter. Further down the road, there are delicate issues about the balance between the use of public and private databases, to which we will want to return in that wider context. I reiterate that the current electoral register has deteriorated quite badly over the last 25 years —especially in its coverage of vulnerable groups. We are very conscious of that and are therefore strongly committed to this move toward individual electoral registration and to using this transformation to maximise the accuracy and completeness of the electoral register. I hope that the Committee will accordingly approve this order.
Lord Rennard
These orders are clearly welcome to me, as they show potential ways forward for increasing voter registration and improving the accuracy of the electoral register. It seems to me, however, that further pilots are clearly needed, because earlier pilots were certainly not considered to have been a complete success. The Electoral Commission raised serious concerns about the reliability of the earlier pilots because they had,
“an absence of a clear, common, methodological framework”.
This, it said,
“had a significant impact on our ability to draw clear conclusions about the effectiveness of data matching as a tool for maintaining the accuracy and completeness of the electoral registers”.
The Electoral Commission has raised a number of concerns about this next set of pilots, of which, I am sure, the Minister will be aware. In particular, will he tell us how closely the IT systems to be used in these pilots will match the IT systems being developed for eventual use in implementing individual electoral registration? It is clear that they are not the same systems, as the eventual IT systems to be used are not yet ready. Does he therefore accept that there is a significant element of risk in making an assessment of these pilots and drawing conclusions about the effectiveness of the IT systems that will eventually be used?
The commission raised a number of concerns about the methodological framework for the pilots. I am sure that the Minister will assure us that the Cabinet Office will do its best to address them. He has told us that the commission will evaluate these pilots by 17 July 2013. It seems to me that the crucial issues of the completeness and accuracy of the electoral registers will depend on the relative success or failure of approaches being taken in these pilots and other measures which are yet to be announced. It certainly will not be before these pilots can be evaluated that we will know whether a register based exclusively on individual electoral registration will be fit for purpose. That is why the existing Bill must provide for Parliament to decide whether the process has been sufficiently successful for our elections and for future boundary reviews to rely exclusively on it; just as Parliament will also have to approve any decision to abandon the annual canvass.
When the Minister responds, I hope that he will provide some clarity to the Committee about when the Bill will come back and we can debate further the issue of when it may be considered safe to rely exclusively on an electoral register based on IER. In the mean time, we have to hope that the transition will be as successful as possible, as quickly as possible, in terms of the stated aims of improving the completeness, as well as the accuracy, of the electoral register. It seems to me that these aims are best served by testing as many potentially relevant databases as possible. Use of the DWP database will help to ensure that, for example, people who are retired will be registered. The DWP is clearly happy for its database to be used in that way.
However, I understand that the Department for Transport has not given permission for its database at the DVLA to be used in a similar fashion. Both databases are national, government databases and both, of course, will have significant levels of inaccuracy. Surely, it would be better to use them both rather than just one of them. Perhaps the Minister will explain if the DVLA database will be used in due course. It would be very disappointing and quite unacceptable if the Government, having been asked repeatedly to use the DVLA records, were to argue in the future that the fact that there had been no pilots with the DVLA data was the reason for not using the DVLA database for the final process of transition to IER. The DVLA holds data on millions of adults, which is reasonably up to date, because it is a legal requirement to notify the agency if you move.
I very much welcome the addition to the list of databases secondary schools and academies, the Higher Education Funding Council for England, the Student Loans Company and the Royal Mail Group. The presence of educational institutions makes particular sense when it comes to adding so-called “attainers”; that is, young people who are coming up to voting age. I hope that the presence of those institutions in this list is an early sign that the Government will accept that the use of secondary schools’ pupil information must be integral to the IER regime, as it is in Northern Ireland.
It seems to me that in this respect we have at least had a four-year pilot in Northern Ireland. My understanding is that it has been very successful in engaging with 16 and 17 year-olds to add them to the register. We learnt today from the report of the Electoral Commission on registration in Northern Ireland that it was probably unwise to abandon the annual canvass there.
Lord Maxton
My Lords, perhaps I may surprise the noble Lord, Lord Rennard, by saying that I agree with at least two points that he made. First, it would be useful to know when the Bill, to which the order is relevant to some extent, will return to the House for debate. It is important that we take decisions on this matter, but the Bill seems to have disappeared into the mists somewhere—not even of time. Secondly, why is the DVLA not involved in this? It works with other bodies in matching data. As an elderly person, I have to renew my driving licence every three or four years. I can just put my passport number on my application form. The photograph for my driving licence is taken from the Passport Service. Two different organisations are already using matching techniques. Why can they not be used for electoral purposes as well?
I largely welcome the order because it is the right approach to use other databases to add people to the register. If I had my way, I would have people added to the register and then invited to take their names off it, rather than the other way around. It is more important that people are able to vote than it is to check whether they are committing an act of fraud. Too often, this Government seem to be more concerned about fraudulent elections than about ensuring that people can vote.
Lastly, I make my usual case that none of this would be necessary—I will not mention ID cards because for some reason they are not considered politically correct—if we had smart-card technology with a central register. Everybody with a smart card would have enormous benefits, not just in terms of electoral registration but with a whole range of matters such as social security, old age pensions or whatever. We could also involve the private sector with banking. If we did that, we would not have this problem and would not be going through this process. We would have a central register and every British citizen would be registered to vote. When they voted, they would produce their ID card and that would be that.
Baroness Hayter of Kentish Town
My Lords, I thank the Minister for introducing the order. It is very difficult to disagree with one word said either by the noble Lord, Lord Rennard, or my noble friend Lord Maxton. I have no shame in using the expression “ID card”, and the Minister is no doubt ruing the day when the Government decided that they did not want to continue with that scheme.
We warmly welcome the measure in broad terms; it is necessary, whether or not the ERA finally goes through. We hope that the process will happen in any case, because it is about finding those who have a right to be on the electoral register but are not there at the moment. It may be that it should have started earlier, but we welcome it all the same.
We have just a few questions. First, as I asked on the previous occasion, has there been any discussion with the political parties about the pilots? As I have said before, and as the evidence we have heard today from the noble Lord, Lord Rennard, shows, political parties understand these issues really well and it would have been good if they had been involved in discussions on the pilots to make them as good as possible.
Secondly, like the noble Lord, Lord Rennard, we have a slight lack of confidence in whether the methodology is sufficiently robust. It looks slightly hit-and-miss, with various areas choosing which bits they would like to do. I hope that it is a little more scientific than that, which it needs to be if the conclusions are to be robust. Perhaps the Minister could assure us that the methodology is sufficiently robust to enable lessons to be learnt and that a sufficient number of authorities are participating for any general conclusions to be drawn. I had not thought of the issue of computer-matching which the noble Lord, Lord Rennard, raised, but, even without that added dimension, we need to be sure that the range is broad enough for us to be able gain good evidence.
Thirdly—this is again related in part to what the noble Lord, Lord Rennard, said—to whom will the Electoral Commission report on its evaluation? Is it only to be to Ministers or will it be to the House? What happens if the pilots prove either too expensive per new elector identified or if, as has been suggested, database problems seem insurmountable? What happens if unforeseen data-confidentiality issues arise, or if some other weakness is identified? Is there a plan B to locate unregistered voters?
Fourthly, it is essential, as the Government’s own Explanatory Notes suggest, that the 22 areas have sufficient expertise and staffing to make the pilots meaningful. What assurance can the Minister give us that they will be sufficiently resourced?
Fifthly, what lessons have the Government learnt from the pitiful turnout for the recent police and crime commissioner elections? Can the Minister assure us that these pilots are not displacement therapy for the embarrassment caused by those unnecessary elections? In case he needs reminding, the elections cost £100 million, which would have paid for 3,000 police officers. It would be interesting to hear whether he thinks that at least some good has come out of those elections in terms of lessons for systems of electoral registration.
The Minister might also like to take the opportunity to say a little more about the Electoral Commission’s report on continuous electoral registration in Northern Ireland—to which the noble Lord, Lord Rennard, referred—which was published today. According to the commission, the report,
“provides clear lessons for Great Britain as we move to individual electoral registration”.
Electors in Northern Ireland are now only registered once and only have to re-register if their personal details change.
This new report assesses the effectiveness of such continuous registration in Northern Ireland. It shows that the electoral register is now only 71% complete and 78% accurate, whereas the previous assessment in 2008 estimated the register to be 83% complete and 94% accurate. It appears that this significant and worrying decline is because the processes used to manage the register are unable to keep pace with people moving home or people becoming newly eligible to join the register.
We will obviously return to this in due course, with suitable amendments to the Electoral Registration and Administration Bill. Again, as has already been mentioned, the Minister will recall that we spoke of our deep concern about the provision in the ERA Bill for the annual canvass to be abolished. We trust the Government will reassess this provision in the light of the Northern Ireland example. Hitherto, the Minister has called Northern Ireland in aid as a defence for the Bill, but I think today’s findings are a little worrying—particularly about people moving, because within certain parts of Great Britain, our population mobility is even higher than in Northern Ireland. Therefore, this continuous updating would be particularly important. However, none of this undermines the general support for these plans to take place.
Lord Wallace of Saltaire
I thank noble Lords for their comments. We are a small group, but it is very good to have an expert and interested group in this extremely important and difficult transition from a very elderly system of household registration to a necessary, but not entirely easy, system of individual electoral registration.
I will try to answer some of the questions that have been raised. The government digital service is working actively on IT systems and the compatibility between one system and another. I was amused this morning to have a government digital service team arrive with a Mac presentation that they wanted to put on the House of Lords Microsoft-based video system. They are well aware of these problems; there will be full end-to-end testing of the IER digital service before the introduction of IER. This is not necessary for the purpose of the data pilots, but from the briefing that I have so far had from the government digital service, this is very much one of the things that they are actively working on and are confident that they are making progress in resolving. As I commented to the noble Lord, Lord Maxton, earlier, I was struck by the different cultures of the government digital service and the House of Lords; we had forced two members of the government digital service to put on ties and suits to come to the House of Lords this morning and they felt extremely uncomfortable in this unusual clothing. We intend to be able to integrate IT systems at the local level and a considerable amount of work is under way.
I have been asked by several noble Lords to provide more clarity on when the Bill will come back. I can, with great assurance, tell them that the answer is “soon” and that I look forward to a more precise explanation of when soon will be, since that will also assist my diary.
I was asked about the role of the Electoral Commission and whether its report would be published. The report will be made to the Secretary of State, but in the nature of the relationship between the independent body, Parliament and government, it will of course also be published.
On the question of the Department for Transport and the DVLA, the latter’s database was used for the original data-matching pilots but is not currently available to us. Discussions are vigorously under way between the Cabinet Office and the Department for Transport, and we hope that we will regain access to the database at a later date. I am well aware that the DVLA database, as the noble Lord, Lord Maxton, commented, is accessed by other agencies including private insurance companies. It is not an entirely closed system and we very much hope that we will be able to resolve the issue.
Lord Tyler
On the point about the DVLA, I wonder whether my noble friend would accept that the Committee would like to strengthen his arm in any discussions with the Department for Transport and the DVLA. It is extremely important that the Cabinet Office recognises that the priority must be people who are not sufficiently well attended to in the registration process. As he said, the current register is deteriorating fast, particularly for those who are young and mobile in the inner cities. The priority must be to go to those databases that tend to pick out those individuals. Clearly the DVLA is one of them, but so, too, are the tenancy deposit scheme and the credit agency schemes. I hope that the Minister and his colleagues in the Cabinet Office will accept that those must be the priorities. There is a democratic deficit among young people in inner cities, who are the most mobile part of the population. It is natural that they should be the priority, and that is where we should put most emphasis. I hope that the Minister will take back from the Committee’s proceedings that we would like to strengthen his arm, and those of his colleagues, in dealing with the Department for Transport and the DVLA.
Lord Wallace of Saltaire
I am very happy to take that back. I will report back to my colleagues on the strongly held sentiments. Perhaps I may take the questions about tenancy and deposit schemes and credit agencies at the same time. The initial assessment by the Cabinet Office of the suggestion from my noble friend Lady Berridge that tenancy deposit schemes might be used was that it was not sufficiently obvious that the processes of these databases could be adapted to support IER. However, that does not exclude renewed consideration.
Of course, the question of credit agencies takes us over the boundary between public and private. Credit agencies are part of the private sector. The issue is part of a broader discussion that we all need to have with the likes of the noble Lord, Lord Maxton, and others, about the extent to which, as we move into a new world of data transmission and availability, private and public databases can be used for identity assurance. That was the basis for the briefing I received this morning from the government digital service. It would be helpful to organise a meeting for Peers as a whole on the work that it is doing—for longer-term and wider purposes than this Bill alone—on these issues. Private databases are increasingly useful, but their use raises questions about civil liberties and public and private interests with which we need to be concerned.
Lord Rennard
The Minister suggested that there was a great gap between private sector credit reference agency databases and public sector databases. Would he not accept that private sector databases used by credit reference agencies are already used extensively by public local authorities? Many local authorities use data held by credit reference agencies to determine whether there may be more than one person living in a household, in particular when someone is claiming a single person’s council tax discount. Credit reference agencies may have information suggesting that more people are present in the house, and revealing who they are. Local authorities, which are public sector organisations, are already using the data from private sector credit reference agencies. Would it not be logical for electoral registration officers to do what their colleagues in finance departments are doing to identify the existence of people who are there but who are not on the electoral register, and invite them to be on the electoral register? I am not aware of any objections from civil liberties groups to any of these existing practices.
Lord Wallace of Saltaire
I thank my noble friend for that strongly worded intervention. I take that on board as one of the issues that we are edging towards. The civil liberties lobby may not have caught up yet with the point that he is making, but I expect that it will do so soon. There are some very broad issues here that we have to be concerned about. I point out, as he has done, that one of the principles of our system of electoral registration is that it is in the hands of local authorities. We do not have a central database, so what one local authority does with credit agencies may be rather different from other local authorities do.
On the question of why this particular collection of local authorities was chosen, the answer is that these are the ones that volunteered to take part. They seem to us to be relatively representative, but this is the nature of the system under our current legal arrangements. Happily, the selection of local authorities is sufficiently wide that we and the Electoral Commission are persuaded that they will provide us with sufficiently reliable information.
Baroness Hayter of Kentish Town
Is the Minister concerned that they are, in a sense, good local authorities? The fact is that if they volunteer to do this they are probably doing quite a lot in any event, and therefore probably not the ones that are of concern to us. I was very glad that they volunteered, by the way.
Lord Wallace of Saltaire
As I have discovered, the world of electoral registration officers and their staff is a wonderful subculture of its own. They interrelate across the board, and they know which are the good local authorities and which are not. I am less worried than I was when I started in this process after having discovered this wonderful population of people, for whom I have a great deal of respect, having been briefed by a number of them.
My noble friend Lord Rennard asked me for an assurance that the databases chosen are properly representative of the UK population. We are pursuing the greatest diversity possible in databases, which is why I take on board what has been said about the DVLA; the wider the collection of databases that we use, the more likely it is that we will catch students, attainers, rapid house-movers and others. That is precisely what we are trying to do.
The noble Lord, Lord Maxton, made an interesting comment that he might perhaps wish to pursue further: he would like an opt-out electoral registration system rather than an opt-in one. That is a point of some significance that would bear some consideration and further thinking. There are some large issues there on voluntary registration and the balance between voluntary and compulsory, which are not currently within our remit in the Bill.
Lord Maxton
It is right that registration should be compulsory, but voting should not.
Lord Wallace of Saltaire
These sorts of interesting questions are considered by the behavioural insight team at the Cabinet Office, which plays around with tipping people’s balance in favour of doing one thing rather than another, and the noble Lord is certainly beginning to touch on them.
No, we do not rue the day when ID cards were dropped, but we are persuaded that developments in the computing and electronic world, and the way in which it is possible to use digital databases and compare among them, is opening up the possibility of providing identity assurance and a simpler relationship between the citizen and state, which would not only be more efficient but astonishingly cheaper than the original ID scheme. Again, this is something that needs further exploration, and I will do my best to provide one or more briefings for interested Peers.
On the question of whether we have discussed this with political parties, the answer is yes, of course, on a number of occasions. I particularly enjoyed the meeting which Chloe Smith, myself and a number of others had with the HS Chapman Society—a body of electoral agents chaired by the noble Baroness, Lady Gould—at which we had some fairly sharp questions, including some to registration officers about the particular details in the Bill. We fully understand that political parties have a great deal of expertise. I am told that the noble Lord, Lord Rennard, has a little expertise in this area himself.
I was asked by the noble Baroness, Lady Hayter, about the lessons that the Government have learnt from the low turnout in the PCC elections: I would want to add from the low turnout in by-elections as well. The lesson that we all need to learn from the declining turnout—this is a matter which all political parties need to talk about—is that people are less and less engaged in politics, and that we have to fight very hard, which necessarily means on an all-party basis, to re-engage our disillusioned electorate and persuade them that it is worthwhile to support candidates for election and to take part in the political process. We should also recognise that we have to overcome the barriers which an increasingly cynical media place in front of us as we attempt to do that.
I was asked to comment on the Northern Ireland report out today. I recognise that it is a sobering report, which raises a number of questions. I take the point made by several Peers about the relevance of the annual canvass for this. We will, of course, as well as the Electoral Commission, take that into account. I think it shows just how difficult the task is to maintain a complete and accurate electoral register. As we go through this transition, we have to make sure that we make every effort possible to arrive at as complete a register as we can. Having made those points I hope that the Committee will accept this order.
Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012
(12 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, the next two instruments on the Order Paper form part of a package of secondary legislation that will enable the implementation of the long-awaited charitable incorporated organisation. The package builds on the framework introduced by the previous Government in the Charities Act 2006, which is now consolidated in the Charities Act 2011.
The CIO is the first legal structure in England and Wales designed specifically and only for charities. Just over 80% of registered charities currently have an unincorporated structure, either as a trust or unincorporated association. But an unincorporated structure exposes trustees to potentially unlimited financial liability and means that contracts have to be entered, and property held, in the names of individual trustees. Many charities have sought the benefits of incorporation through incorporating the charity as a company limited by guarantee. This brings the benefits of limited liability for members, protection for trustees and, as the company has its own legal personality, makes it easier to enter into contracts and to hold property. I have to say that, before I began to get into the whole charities world, I had not realised just how many charities hold property.
The downside of incorporating a charity as a company is that it results in dual-regulation and registration under company law and charity law. The CIO is a structure that has the benefits of incorporation but is registered and regulated solely under charity law by the Charity Commission. It will represent a significant reduction in red tape for charities that want the benefit of limited liability.
Although the CIO model is intended to be a relatively easy way to set up and run a charity, it also has to be robust enough to inspire public confidence. As it has the benefits of limited liability, the CIO framework needs to provide the right level of protections for third parties which may wish to do business with the CIO, in particular lenders and contracting authorities. We believe that the draft package of secondary legislation achieves the right balance between ease of operation on the one hand and third party protections on the other. I hope that it will help noble Lords if I give a brief explanation of the instruments before us today.
Lord Hodgson of Astley Abbotts
My Lords, I welcome the regulations. They are an extremely useful and important addition to the charity regulation framework. I have carried out two reports for the Government, the first called Unshackling Good Neighbours and the second the review of the Charities Act, Trusted and Independent—I should like to say to the Minister how helpful his staff were in the preparation of that; they worked very on it and were of great assistance. In both those reports, it was clear that the absence of any legal air cover was a considerable deterrent to people serving as trustees. People feel, rightly or wrongly—despite the lawyers saying that there are no cases—that there is a risk. The regulations provide an important bit of air cover that will encourage them to come forward and serve as trustees.
I hope, however, that the Government will not forget about the importance of finding ways in future to afford additional protection to volunteers. I know that the provision of protection is not part of these statutory instruments and I understand why it could not be included. However, volunteers remain concerned about what they see as counterintuitive judicial decisions that leave people feeling exposed when they are undertaking one sort of volunteering activity or another.
These statutory instruments are important, valuable and welcome. As my noble friend on the Front Bench said, the protection carries with it privileges—and with privileges comes responsibility. We need to stress this is because there cannot be a register of charges. Therefore, to some extent creditors between each annual report are flying blind. That is inevitable; we cannot get round it. We must emphasise to trustees of CIOs that they have a responsibility to behave properly. It would be a terrible shame if this new and very valuable corporate form were to be damaged by early malfeasance and misadventure. Equally, it would be helpful if the Minister would confirm that the normal provisions of corporate behaviour will apply to trustees of CIOs. As any director of a limited company knows, trading while insolvent is the most serious thing for which you are personally liable. This should apply to CIOs that act improperly.
I was pleased to hear the Minister talk about the ability to disqualify trustees of CIOs, and to apply the disqualification regulations to them. Perhaps I could nudge his elbow again. The Charity Commission is very limited in its powers to stop trustees of charities—not CIOs—who have behaved badly from becoming trustees of other charities. Trustees can move around quite easily. We need to find ways to ensure that the Charity Commission can keep the rotten apple out of the barrel, and prevent it finding somewhere else in the barrel a bit later.
I share the Minister’s view that this has been a long time coming. The Charities Act became law in November 2006. It is now the end of November 2012. Even by the standards of Whitehall, progress can best be described as glacial. As he warned us, some timetabling issues lie ahead. The Explanatory Notes make it clear that new CIOs will come into force reasonably quickly. Perhaps the Minister will confirm when the commencement provisions will be laid. Obviously we are some way away from the conversion of existing CIOs. After six years it is not surprising that there is a certain amount of pent-up water behind the dam. I hope that the Government will find ways to encourage the Charity Commission to use modern, online techniques and proceed as quickly as possible to a situation where every trust that wishes to convert to a CIO is able to do so.
Perhaps I may raise with the Minister another bee in my bonnet. It concerns repetitive, duplicative and overlapping returns. I am not sure where we are on the return that a CIO will make to the Charity Commission. We want to make sure that it is as focused as possible. Less is often more. There is the example where we have our credit cards changed and we get four pages of closely packed type telling us that there have been changes, not particularly identifying what is what and what has been changed.
I hope that when the new forms are prepared, we really focus on what is needed, not just have a splash of paint across the whole of the subject. Information takes a lot of getting together for charities; it is a great source of economic friction for them. Sometimes they feel that a hell of a lot of information has to be collected for not much purpose other than ticking a box. We want to ensure that we are gathering information that really helps the monitoring—for the public and the supporters of those organisations to decide whether they are good and worth while.
The Minister will not expect me to leave the subject without saying that, for a year and a half now, we have been pressing the Charity Commission and Companies House to find a way to agree an individual return. There are more than 30,000 charitable companies who are making two separate returns. It cannot be beyond the wit of man, let alone the wit of Companies House and the Charity Commission, to find a single form that could serve both purposes. That would be 30,000 forms in the bin.
With that rather disobliging remark at the end, I entirely welcome the regulations, but they will reach their full flowering only when every charitable trust that wishes to convert anywhere in the country, whether old or new, big or small, rich or poor, can do so. I hope that the Government will ensure that pressure is kept on the Charity Commission so that that happens as soon as possible.
Lord Methuen
My Lords, as chairman of the trustees of an almshouse trust, we have been considering going the alternative way of incorporation. We welcome the measures and shall be examining them at our meeting on 7 December. We think that this is a much better way to go than the current incorporation methods. We welcome the protection that this will give our trustees and hope, as the noble Lord said, that it will encourage more people to come forward as trustees.
Baroness Hayter of Kentish Town
My Lords, I will try to resist the temptation to say that if the wit of man cannot get those two bodies to work together, perhaps the wit of women in the two organisations may be able to achieve that.
First, I should declare my interest as a trustee of various charities now and of even more over many years previously. Indeed, I have been caused much pain at earlier times by running non-incorporated charities, which often meant scuttling around London trying to get trustees’ signatures on property deals and, sadly, occasionally, trying to get death certificates for recently deceased trustees, often at a very sensitive time for the family, because there was some urgent legal or Charity Commission document that needed completing. In one case, I was dealing with a potential £1 million liability on individual trustees—one of them at that time a Member of your Lordships’ House—who, before I had advised them, had signed a document for a rather silly 25-year lease with, I believe, the Duke of Westminster, on a rather large property in Grosvenor Crescent. I should add that, once I took over, we rapidly incorporated it and that was the end of that.
I very much welcome the introduction of the charitable incorporated organisation structure, which, as has been said, will make this easier to access and cut out dual regulation on SORPs as well, on all the accounting rules which are also not quite the same for the two types of organisation.
As both the Minister and the noble Lord, Lord Hodgson of Astley Abbotts, said, the regulations are long overdue in introducing the new regime. They were legislated for in 2011, but the first will roll off the assembly line only early in spring of 2013. Given the Government’s desire, I am sure, to champion enterprise and the big society, we hope that they will move as fast as they can to facilitate the work of charities.
As the noble Lord, Lord Hodgson of Astley Abbotts, has said, the slow introduction has been a source of frustration for many charities, some of which unfortunately could no longer afford the wait or uncertainty and have had to incur the expense of becoming a company limited by guarantee under the existing rules. Nevertheless, single registration will undoubtedly reduce administration time and costs, with only one annual report and all that sort of thing, so we welcome it.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness, Lady Hayter, for her questions. She asks fewer questions than many Front-Benchers from the Opposition, and they are always extremely well thought through. She explains what she is asking, so it is possible to write down each question as she asks it—unlike some of her colleagues, who fire questions so rapidly that it is impossible to write them down or remember them afterwards.
I am extremely grateful that, some years ago, I became a trustee of two musical charities before I realised that I would have to learn so much about the enormously complicated world of charities. I am even more surprised to discover now as I read through the material that what I thought were two small charities—one with a turnover just short of £500,000 and the other with a turnover of about £250,000 a year—rank as medium, or even on the fringes of large charities. There are many that are much smaller than that in terms of their turnover.
I apologise that it has taken so long to come to this, but if the Government are at fault, it is partly because they have spent such a long time consulting all the affected parties. It is also the case that the insolvency issues have been extremely complicated, and getting the question of insolvency and dissolution right—which involved an external review by insolvency and charity law specialists—was something that we wanted to make sure we achieved. Charities law, as Members of the Committee will know, is a very complex and specialised field—it is only about 500 years old as it has slowly developed—so when we make changes, we want to make sure that what we are doing will stand for a considerable period.
I take the point made by the noble Lords, Lord Hodgson and Lord Methuen, about encouraging volunteers to come forward and limiting the liability of trustees and other volunteers. We note and welcome the two reports by the noble Lord, Lord Hodgson, Unshackling Good Neighbours and his very large and worthwhile review of the Charities Act 2006. We are alive to his concerns and, while we cannot at this point say anything specific, we hope that there will be a response to this in reasonable time.
The noble Lord, Lord Hodgson, also raised the question of powers to ban trustees. The Charity Commission has very wide powers to suspend or remove trustees; we nevertheless recognise, as he pointed out in his Charities Act review, that there are one or two gaps in the Charity Commission’s powers, and this is something that we look to address. Of course, the conversion into charitable incorporated organisations will do something to resolve this issue.
The noble Lord, Lord Hodgson, also raised the provision of training for trustees of charitable incorporated organisations. That is something on which we will have to consult the Charity Commission. I take the point, however, that if company directors are now to receive more effective training, that should apply also to trustees. From my own limited experience, I have learnt that one needs someone with considerable legal skills as well as someone with very useful accounting skills on any board of trustees of a charity with a reasonable turnover.
The question of when charitable companies will be able to convert to charitable incorporated organisations has been left to the last phase. According to my notes, charitable companies will be able to convert in the course of 2014, which will also be phased in by size of turnover. Separate conversion regulations will be laid in 2013.
The noble Lord’s point about repetitive reports and returns will of course be eased by the transition; indeed, part of the purpose of moving towards charitable incorporated organisations is precisely to simplify the level of returns that charities and charitable companies have to provide and to reduce duplication.
The noble Baroness, Lady Hayter, raised the question of shell charities and their necessary continuation. This is a very complex area, particularly, as she remarks, because of the issue of legacies and wills that have been written a very long time before. I am not entirely sure what the answer to this is, and I will write to her with more detailed concerns.
I am very struck by the issue of what one might call moribund charities. I am struck by the fact that some of the new community foundations in Yorkshire have been doing useful work in discovering charities that are in effect simply sitting on assets that are no longer used, and persuading them to dissolve or merge into the community foundations and use those assets now for more appropriate, but related, functions.
The noble Lord, Lord Hodgson, asked why we do not have the general regulations and the commencement order, and how that will all be brought into force. The general regulations are subject to the negative resolution procedure and therefore cannot be laid in draft. They, along with the commencement order and the draft instruments that we are considering today, will all be made at the same time once both Houses have approved these affirmative instruments. A draft copy of the general regulations is annexed to the Explanatory Memorandum to the dissolution regulations.
I hope that I have covered all the necessary points. On the question of criminal liability if, on the dissolution of a CIO, one of the trustees is unaware of an insolvency event, I congratulate the noble Baroness on the detail and technicality of her question, and I hope she will accept that I will have to write to her with the answer.
Having answered those points, I hope that all Members of this Committee will welcome this order; it has taken rather longer than many of us would have liked but it is now coming in. It is actually a major and very constructive development for the charity sector. I therefore hope that it will receive a welcome and that we will begin to see this new form of charitable status taking effect over the next three to four years.
Charitable Incorporated Organisations (Consequential Amendments) Order 2012
(12 years ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Charitable Incorporated Organisations (Consequential Amendments) Order 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012
Baroness Verma
That the Grand Committee do report to the House that it has considered the Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, one of my department’s key priorities is reducing carbon emissions from energy-inefficient homes and reducing the number of households in fuel poverty. The Green Deal programme and the energy company obligation are designed to meet these joint objectives and give consumers access to a range of funding streams for energy-saving improvements in their homes.
The Green Deal is an innovative financing mechanism that enables consumers to pay for the cost of energy efficiency improvements over time through savings in their energy bill. Since the Green Deal legislative framework came into force in October, we have seen more than 270 separate installer organisations register to deliver Green Deal measures and more than 140 expressions of interest from potential Green Deal providers, with 13 already authorised.
The energy company obligation, which is worth an estimated £1.3 billion per year, will work with the Green Deal and require energy suppliers to support those living in harder-to-treat properties and assist low income households, helping them to heat and insulate their homes. We estimate that the ECO subsidy will support the installation of more than 1 million insulation measures by March 2015, which will drive the uptake and development of solid wall insulation technologies. We have ensured that at least 40% of ECO support will be targeted at low-income households, and that support is worth around £540 million per year. It will assist around 230,000 low-income households each year and will make a huge difference to the lives of those who need it most.
I am grateful to the Committee for allowing us to debate these statutory instruments together. I will briefly describe the purpose of each of them. First, the Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012 essentially relates to the energy performance of buildings regulations, which cover energy performance certificates, and are already a common feature of the property landscape. It is important that the Government amend the regulations relating to EPCs by 28 January 2013, which is when the Green Deal plans can begin to be made, to ensure that the EPC framework can be used to disclose the key terms of the Green Deal plan to subsequent bill payers when, for example, a property is sold or let out. This will be an essential element of our approach to consumer protection under the Green Deal.
Our initial legal view was that Regulation 42 of the Green Deal regulations did not need to be in force before we amended the EPC regulations. However, this is highly complex legal territory and, having given further consideration to the issue and in order to avoid any doubt, we have concluded that the amendment that we are considering today should be brought into force before 28 January 2013. In fact, it will come into force on the day after it is signed by the Secretary of State, following its approval by Parliament. This means that we can create a clear window of time within which the separate changes to the EPC regulations can be made. As the amendment that has been made is simply a change of date, I propose not to take up much of the Committee’s time on this instrument in these remarks.
The draft Electricity and Gas (Energy Companies Obligation) Order 2012, known as ECO, places three obligations on energy suppliers that have more than 250,000 domestic electricity and/or gas customers and have supplied more than the specified level of energy in a relevant period. The obligations are a carbon saving obligation, a carbon saving community obligation and a home-heating, cost-reduction obligation.
The ECO order was successfully debated in this House before the Summer Recess. It is brought back now for consideration in light of the technical amendments that we have identified as essential to its effective operation. These technical amendments centre on an “in-use factor”, which is used to reduce the amount of energy that a particular energy efficiency measure is calculated to save, compared to its theoretical assessment. The inclusion of an in-use factor will reflect that measure’s likely actual performance when in situ in a property. The previous ECO order did not incorporate the provisions necessary to ensure that in-use factors were applied, which created a degree of uncertainty for obligated parties. I apologise to the Committee that we did not identify this technical inconsistency earlier. However, as soon as we did we took the necessary steps to correct the position. My department immediately launched a short consultation to address the anomaly and provide greater clarity.
The overwhelming majority of respondents—about 80%—agreed with the three proposed amendments on which we consulted. The following revisions have therefore been made to the draft ECO order that we are considering today. In-use factors have been included for the scoring measures installed under the carbon emissions reduction obligation and the carbon-saving community obligation, and a schedule of fixed in-use factors for specific measures has been added. The draft order now provides for ECO-eligible measures installed from 1 October 2012 to count towards a supplier’s eventual ECO obligation.
We have made a number of other small amendments to the ECO order. These are not changes of policy but will provide greater clarity for energy suppliers and Ofgem in administering the scheme, to ensure that ECO delivers the policy objectives that were set out in the Government’s consultation response and impact assessment. The changes make explicit that ECO affordable warmth assistance should be targeted at individuals living in private-tenure properties and will provide clarity on the treatment of excess actions carried forward from the current CERT and CESP schemes. They also make it clear that the supplier can be credited for both space-heating savings and hot-water savings in a case where a measure delivers both—for example, a boiler or central heating system.
The regulations will help to improve the energy efficiency of homes across Great Britain, reduce our carbon emissions and, crucially, help households to manage their energy bills. I commend the regulations and order to the Committee.
Lord Grantchester
I thank the Minister for her explanation of the statutory instruments before us. It will be good to take up the challenge of the Green Deal with her, as it was with her predecessor. There is nothing wrong with the ambition to tackle energy efficiency and the nation’s housing stock. We on this side of the House continue to support the objectives of the Green Deal. It is a vital part of energy demand reduction and energy efficiency improvements to meet greenhouse gas emissions targets and promote energy security and climate change mitigation.
The Green Deal framework regulations were largely debated and agreed in July, so there is no need to revisit our discussions. However, we have the opportunity to press the Minister on progress, to voice some of our continuing concerns, most notably about finance and the Green Deal Finance Company, and to assess the Green Deal’s interrelationship with the energy companies obligation order.
The Green Deal regulations merely bring forward by six to eight weeks the date of the coming into force of some features of Regulation 42. The ECO order allows in-use factors to be used in the assessment of outcomes and benefits under the golden rule. The amendments drew comment in the 14th report of the Secondary Legislation Scrutiny Committee. It stated that it hoped that Her Majesty’s Government’s use of secondary legislation would not increase with further corrections and amendments. I do not criticise the coalition for this; after all, mistakes are a defining characteristic of this coalition. We raise concerns to be helpful to the Minister’s department, and note that a further suite of legislation relating to the Green Deal is expected shortly. It will concern the Consumer Credit Act and will contain guidance on the Green Deal generally, and for Green Deal providers on the confirmation and disclosure process.
I note that plans are intended to go live and to be signed up to from 28 January 2013. Perhaps I may ask the Minister when the House may have sight of them. The seriousness of the situation is underlined by the fact that CERT and CESP are due to finish at the end of December this year. While there may be some allowances for outstanding obligations to be carried over, nevertheless the uncertainty that this generates in the industry critically undermines confidence. If there continues to be slippage, there is a heightened risk of job losses and layoffs in the gap that will open up between the end of CERT and CESP and the implementation of Green Deal plans. While the date in January to allow plans to be signed up to is consequential on finance plans from the Green Deal Finance Company, perhaps I could ask the Minister why improvement plans that participants are content to pay for immediately and without finance may not be signed up to immediately.
There is widespread concern at the lack of clarity concerning interest rates, finance charges and penalties yet to be brought forward by the Green Deal Finance Company. It is largely academic to draw up Green Deal plans when the full cost alternatives are not yet available. We remain concerned that, to many people, the Green Deal may not be a good deal, especially when finance costs are included at a rate between 5% and 8%—which the Minister conceded in July was not an unreasonable figure, to use his words. When will the Government use their shareholding in the banks to inform them that they can do more for less, in the same way as every other company in the country is having to do?
The Government have our congratulations on setting up the Green Investment Bank legislation that is currently in your Lordships’ House. This is the Government’s own seedcorn. What plans do they have to utilise the Green Investment Bank to underwrite the Green Deal, and how will that work? Do they realise that the public’s attitude to debt has changed and that trust in banks is severely shaken?
Concerning the second order, the ECO is intended to work in tandem with the Green Deal policy to enhance further the installation of cost-effective energy efficiency improvement measures, especially those not fully financeable through the Green Deal alone, including measures to help those in fuel poverty and properties in communities in rural areas. The revised order is to ensure that in-use factors are applied when calculating carbon savings attributable to measures installed under ECO—that is, carbon savings that reflect actual performance once installed in domestic properties. Once again, guidance is eagerly awaited by the industry. This revision seems to be in response to the concerns raised about the golden rule. That the golden role may not apply once measures have been completed not only further undermines consumers’ confidence in the Green Deal, it could open up the Green Deal and even the Government to challenges for misselling. As the potential forthcoming Government, we would be especially keen to avoid that mistake.
Concerning the link between the Green Deal and ECO, I remain unclear about under what process the ECO may be triggered and hence the costs mushrooming out of control, leading to extra charges on all consumers’ bills. Does the take-up of measures under ECO expand in line with the poor take-up of the Green Deal plans? Will an attitude be encouraged that if consumers decline the voluntary take-up of a Green Deal, the energy companies under ECO will be obliged to undertake the plan anyway? If expenditure to alleviate fuel poverty is reducing as the definition of those qualifying is tightened up, how will that be financed other than by mushrooming domestic bills, already put under great stress by the actions of this Government? Can the Minister clarify the situation?
I understand that part of the delay in getting Green Deal plans going is that the software to set up the register is itself yet to be set up. I understand that the application of the golden rule and its interpretation, as applied to the specific property in question, is the problem. That seems core to the operation. Can the Minister throw any light on that?
I know that the Residential Landlords’ Association is keen to see and discuss the regulations for the private rented sector, particularly regarding the compulsion elements. I know that the Minister will agree that every encouragement must be given to the sector to get on with improvements before compulsion.
In conclusion, we continue to be concerned that the Green Deal may not be the game-changer that we all wish it to become. It is a huge undertaking, yet the prize of whole streets’ and districts’ housing stock being upgraded, without exception to tenure or to the ability to pay, remains the objective that we all applaud.
Lord Moynihan
My Lords, I shall briefly make a couple of comments and ask one question of the Minister. I am glad that there is continued all-party support, under her new leadership in this area, for the Green Deal and for the work of the Green Investment Bank, which I strongly echo. I hope that, as the Government have been reconsidering elements of the energy Bill, when we finally read it this week we will see a greater emphasis on energy efficiency measures. It is so important that we see energy efficiency embedded in energy policy, as much as we focus rightly on the need to ensure that we have the correct balance between nuclear, renewables and fossil fuels in a policy geared towards ensuring that we have security of supply at a competitive price.
I welcome the Minister’s clear explanation of the measure before the Committee today. In her opening comments, she made an interesting point: she said that during the consultation exercise undertaken on the three measures that we are considering, 80% were in favour. It would be helpful if we knew the genesis and gist of the 20% who were against the measures, so that we can take that into consideration before reaching a determination.
Lord Whitty
My Lords, I associate myself with my noble friend Lord Grantchester’s questions, which should throw some clarity on this issue, and with the underlying point made by the noble Lord, Lord Moynihan, about energy efficiency in general. Like other colleagues, I strongly support the concept of the Green Deal and wish to see it in operation as rapidly as possible. Now that we have a clear start date, the company is in place and the assessors are coming online, we stand a good chance of being able to start from that date.
The problem for the Government is that the start-up will be relatively slow. It is still not clear to the general public what the Green Deal is about. I think that I am right in saying that the Government are still setting their face against having a public information campaign on the Green Deal, which seems to negate all the good work that the department has done to get all its ducks in a row by this point. If we do not make a real effort—and it will be quite an expensive effort—to tell the public what is on offer, I fear that take-up will be even slower.
That leads me to my central point, which is broader than these regulations. I recognise that they involve some tidying up and corrections, as well as bringing some technologies into play, so I approve of their general direction. What is needed to surround them, though, is, first, a bigger commitment and information and, secondly, frankness about how quickly the Green Deal will not only have an effect on general energy saving and cost saving for householders but, more particularly, have an effect on and be available to the more vulnerable of those consumers.
The interplay between the ECO and the Green Deal is intended to replace CERT and CESP, and is also intended effectively to replace Warm Front. The total number of households covered by those provisions together, even after being run down over the past couple of years, is still close to 200,000. For those groups in fuel poverty, by the old definition at any rate—and I suspect that it will also be true under the new definition—I do not see how the Green Deal is going to replace a figure of that magnitude. When we are considering this, it would be useful to know the Government’s overall assessment of the impact of this on fuel-poor households, and of how far that and other measures will approximate what went before.
Having said that, I approve, broadly speaking, of the regulations and I approve of the Green Deal. However, we have to be clear that we are covering the hiatus period which, even if takes off faster than I am assuming, will cover the next 12 months at least. We also have to be clear on how it affects help to the fuel-poor who, at the moment, are still growing in number by any definition.
Baroness Verma
My Lords, I am grateful for the Committee’s comments and, of course, am glad that it has largely accepted the regulations. Noble Lords opposite are a little too pessimistic. On the one hand, they agree with what we are doing but on the other they are saying that we cannot deliver. I have said very clearly that, first of all, it is always helpful if Governments—be they coalitions or whatever—own up that there has been a mistake. At least I am standing here big enough to be able to do that. I am often disappointed when noble Lords opposite forget that many mistakes were made during their time in government. They have still failed to own up to that. That was just the cheap point that I wanted to get across following the cheap point that was thrown at me. I am always very glad that the noble Lord is optimistic in thinking that they are going to be in government next time. I wait to see that day.
Coming back to some of the questions that noble Lords have raised, I will first respond to the noble Lord on how fuel poverty is being tackled when eligibility is being tightened. The criteria for eco-affordable warmth are being better targeted; they are being targeted on low-income, vulnerable households that are in the greatest need of assistance, including—this time around—the elderly and disabled.
The Deputy Chairman of Committees
My Lords, a Division has been called. It is remarkably bad timing as far as this Committee is concerned. The Committee stands adjourned until 5.17 pm.
The Deputy Chairman of Committees
My Lords, it is now 5.17 pm, so the Grand Committee can recommence. The noble Baroness, Lady Verma, was in full flow and I am sure that she will continue in that way.
Baroness Verma
My Lords, we will target eligibility criteria for ECO affordable warmth predominantly on private tenure, where concentration of fuel poverty is almost double that found elsewhere. I am sure that noble Lords will agree that we need to ensure that those who require it the most and are least able to afford it should be at the forefront of our schemes.
My noble friend Lord Moynihan asked about the 20% of respondents who did not agree with including the in-use factor. They wanted it to be a changeable rather than a fixed factor, but they did not disagree with the principle.
The noble Lord, Lord Grantchester, asked whether the software was ready. The software tool to be used in people’s homes is fundamentally an issue for the companies providing the Green Deal, but it is important that it be properly tested and approved to ensure that it generates the correct results. I understand that several tools are undergoing a process of technical validation and we expect to see them on the market in the very near future.
The noble Lord, Lord Whitty asked about the impact on fuel-poor households and how expenditure compares with that in previous schemes. Our figures suggest that total fuel poverty spending was £760 million in 2009-10 and will be £828 million in 2014-15, which represents a 9% increase in spending over the period. It will be a more effective way of assisting low-income, vulnerable households than existing schemes because energy suppliers will be incentivised to deliver a package of measures to help households to heat their homes more affordably, rather than just delivering single measures to individual dwellings.
The noble Lord, Lord Grantchester, asked if we were planning to lay regulations amending the Consumer Credit Act. Using the power in Section 30 of the Energy Act 2011, amendments to the framework regulations will be laid to the framework in December. We have laid a revised draft Green Deal code of practice today and recently we published Green Deal provider guidance. If the noble Lord has not had sight of that, I am sure that he will be able to access it.
I have additional information for the noble Lord, Lord Grantchester, on the Consumer Credit Act. It will be for the purpose of dealing with situations where there is more than one debtor under a Green Deal plan, which I think he was quite concerned about. If one bill payer moves on, but the Green Deal has arrears, there will be a format for us to ensure that we can respond.
The noble Lord, Lord Grantchester, also asked how the ECO subsidy would interact with the Green Deal because of the golden rule. There will be occasions when it will not be possible under the golden rule to cover the full cost of installations of more expensive measures. Therefore, the ECO subsidy will work with Green Deal finance for these measures and will take it into account when calculating the Green Deal finance package for the household.
The noble Lord, Lord Grantchester, asked several more questions and I hope that I will be able to answer most of them. If I do not, I will ensure that the noble Lord is written to. He asked how the Green Investment Bank would underwrite the Green Deal and how that would work. I may suggest to him that this is a negotiation process between the Green Deal Finance Company and the Green Investment Bank. It is an agreed priority for the Green Investment Bank, but these are commercially confidential negotiations, and they are ongoing. I cannot comment further on them.
The noble Lord, Lord Whitty, said that no one really knows about the Green Deal. We have been working closely with local authorities and consumer groups but until we are able to offer the Green Deal, which will go out in January, we do not want to raise the expectations of people and then tell them to wait. We have worked closely to ensure that all the processes we need to ensure that the Green Deal is kick-started in a very progressive, productive way in January are in place. That work has been going on for several months.
I urge the noble Lord, Lord Whitty, to be less pessimistic about the response that we are going to get to the Green Deal. I assure him that many of us, particularly Ministers, have been to a number of events to raise the profile of the Green Deal. In October, it was kick-started when people could sign up to become suppliers, assessors and providers, but the programme will not start until January 2013. The noble Lord needs to sit and wait, and to watch this space. However, I urge him to be optimistic that people will benefit hugely from the Green Deal and that we are working very well and very closely.
Lord Whitty
My Lords, I am prepared to agree with the noble Baroness that everything is being put in place, and you could not expect and would not want a huge take-up right at the beginning. My point was that, because all the other schemes will have finished by 28 January, there will be a hiatus between that and Green Deal reaching its forward drive path, if everything goes well—I certainly wish it well. Therefore, in 2013 we will see a dip in the number of households treated, particularly in relation to fuel poverty. It may well be that by 2014, if all goes well, the situation will have improved. However, for the next year and a half, the Green Deal uptake, and in particular the uptake by the fuel-poor, who are heavily concentrated in the private rented sector, which is the most difficult to address and where there are most reservations among both landlords and tenants, will not be that fast. I am not complaining about that; I am just saying that there will be a big problem over the next 18 months in the achievement of energy efficiency and fuel poverty targets.
Baroness Verma
Perhaps I may reassure the noble Lord that we have looked at those factors. People on the current schemes will remain on them and will be protected until the Green Deal takes over. Unless I am corrected by officials, the noble Lord can feel reassured that there will not be the hiatus that he assumes. If I do not receive inspiration immediately, I will write to the noble Lord—but I see that inspiration is on its way. The Warm Front will continue until March 2013.
Baroness Verma
Yes, Lord Deputy Chairman, it is. We expect that ECO companies will continue to work on affordable-warmth schemes. That will start very soon. If there is a dip, the Warm Front scheme will remain open, and applications for funding will remain in place until the end of the financial year. I suspect that that has not satisfied the noble Lord. Therefore, I will write in greater detail and clarity to him to ensure that when he takes this great Green Deal programme of ours back to the people he wants to talk about it with, he will have absolutely the right information at his fingertips.
Lord Moynihan
If I am right, the noble Lord, Lord Whitty, also talked about the wider and more general issue of communicating guidance on the Green Deal scheme, and of the importance that has been attached to this by all sides of the Committee and of the House. Will the Minister give us a little more information about what is intended on that? I found it very welcome that in section 8 of the guidance notes there is an indication that it is under way and that it is a priority of DECC. I agree with the noble Lord, Lord Whitty, that public information campaigns on this will be very relevant to its uptake and success.
Baroness Verma
Absolutely. My noble friend—and the noble Lord, Lord Whitty—raised a very important point. Obviously I have not made myself clear. I will undertake to write to all members of the Committee, setting out exactly what we undertake to do about guidance for consumers and suppliers.
I will finish by addressing the point about job losses raised by the noble Lord, Lord Grantchester. I reassure the noble Lord that under the schemes that we are putting forward, we will see a rise in job creation. In the installation sector alone we expect to see jobs for 60,000 people. The noble Lord should be much reassured that this is a wonderful platform for job creation, particularly for the small and medium-sized sector.
Lord Grantchester
I accept what the Minister says. We do not doubt that as Green Deal plans build up, as my noble friend suggested, there will be wonderful opportunities. We wish to see—and will applaud—all the job creation that this will entail. My point was similar to that of my noble friend Lord Whitty, and related to the gap that might open up before the plans are implemented. The installers may get very nervous about the continuing employment of people under CESP and CERT, which are coming to an end. A gap may open up that will make them extremely nervous when it comes to keeping those people on.
Baroness Verma
Although I cannot give the noble Lord figures at this moment, I can reassure him that we have no shortage of people signing up to the Green Deal. They fully recognise that there will not be a gap; there will just be a movement from one scheme to another. By and large, the noble Lord’s worry is perhaps slightly unjustified. I therefore commend these regulations to the Committee.
Motion agreed.
Electricity and Gas (Energy Companies Obligation) Order 2012
Baroness Verma
That the Grand Committee do report to the House that it has considered the Electricity and Gas (Energy Companies Obligation) Order 2012.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments.
Motion agreed.
The Deputy Chairman of Committees
My Lords, that completes the business of the Grand Committee this afternoon. The Committee stands adjourned.
House of Lords
BBC: World Service
(12 years ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government by how much the BBC World Service budget has been reduced in the current financial year; and what plans they have for funding the World Service in the future.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, the budget for the BBC World Service for the 2011-12 financial year was just over £255 million. It was reduced by £11 million to £244.2 million for the current financial year and will reduce by a further £4 million to £240 million in the financial year 2013-14. From April 2014, the BBC World Service will be funded from the licence fee instead of from FCO grant in aid.
Lord Alton of Liverpool
I am grateful to the Minister for that reply, but at a time of phenomenal uncertainty in the world can it really make sense to cut the BBC World service by 16%, leading to the loss of 32 language services and 650 jobs and an estimated fall in audiences of some 30 million people? In particular, should we not think again before savagely reducing medium-wave transmissions to Syria, Lebanon, Egypt, Jordan and Israel at a moment when the region is in total crisis and the voice of reason is in such short supply? In this 80th anniversary year of the BBC World Service, surely it is a moment to celebrate its extraordinary achievements in upholding human rights, democracy and the rule of law rather than so short-sightedly diminishing this country’s influence right across the globe.
Baroness Warsi
The noble Lord raises a number of important issues. First, I assure him that it was decided to cut only five languages as overall languages in the comprehensive spending review. As regards the specific countries to which the noble Lord referred, I am sure he will be comforted by the fact that additional funding of £2.2 million per annum was put forward specifically to ensure that funding was maintained for the BBC Arabic Service, a language which I am sure the noble Lord will agree is exceedingly important in light of current events.
Lord West of Spithead
My Lords, has the National Security Council looked at the balance in terms of soft and hard power and the importance of the BBC World Service, bearing in mind that for a minute amount of money this absolute jewel in our soft power crown is being damaged so badly? All of us who have been involved with these issues around the world over many years realise that this is really damaging.
Baroness Warsi
Again, the noble Lord raises an important issue. I am not sure whether it has been discussed at the National Security Council, but I can check that and write to him. I completely agree with him that the BBC World Service is, and remains, an important part of our soft power. Indeed, YouGov has recently said that the UK ranks extremely highly in relation to soft power. We are known as a soft power superpower. However, I am sure that the noble Lord will agree with me that at times priorities have to be assessed and that these changes in priorities have been made at various times. Indeed, under the previous Labour Government in 2005, it was announced that the Bulgarian, Croatian, Czech, Greek, Hungarian, Kazakh, Polish, Slovak, Slovene and Thai language radio services would end.
Baroness Falkner of Margravine
My Lords, will my noble friend accept that, while a balance has to be struck between financial viability and high-quality independent and impartial journalism, the balance must ensure that broadcasting to the most sensitive areas of the world, such as China and autocratic regimes in the Middle East, where the public do not have access to impartial information, must remain a priority? Can she assure the House that after 2014 the Foreign Secretary will retain his role in setting the strategic objectives of the BBC World Service?
Baroness Warsi
Yes, I can assure my noble friend, and indeed the House, that the Foreign Secretary will still have oversight post-2014. He will retain his current role of agreeing objectives, priorities and targets. Specific approval will be required from the Foreign Secretary to open or close a specific language service. I completely agree that it is important to ensure that we continue to use this soft power mechanism, but I am sure that my noble friend will also agree that more and more people are looking to BBC world news and television and looking online to obtain this information.
Lord Soley
Does the Minister accept that China and Russia in particular are rapidly on the rise with international services—Russia is now one of the fastest growing—and that if we do not emphasise the BBC and put the funds into it, particularly in the Middle East area, then frankly we are putting at risk not just our reputation but, more importantly, the dissemination of accurate views about crucially important events world wide?
Baroness Warsi
There are a number of ways in which the UK can continue to exercise its soft power; the BBC World Service is one of them. I am sure, however, that the House will also agree that extending our embassies and our consulates and having extra staff—extending our diplomatic network—are all part and parcel of ensuring that we continue to play an influential role in the world.
The Minister of State, Ministry of Justice (Lord McNally)
We will hear from this side and then go to the Cross Benches.
Lord Glenarthur
My Lords, while sharing many of the concerns that the noble Lord, Lord Alton, raised, my noble friend mentioned the internet. Can she say to what extent the internet has provided an increasing advantage of opportunity for people all over the world to listen to the very valuable product of the World Service?
Baroness Warsi
I cannot provide my noble friend with specifics, but he is aware that, certainly in relation to the Arab uprising and the Arab spring, the internet played a vital role, both in relation to accessing traditional services such as radio, but also in relation to the blogosphere in the way in which campaigns were run and the Arab spring came about.
Baroness Coussins
My Lords, the Minister said that only five foreign language services had been cut, but I understand that all radio broadcasting in seven languages has been cut as a result of the financial constraints. Is the Minister satisfied that the commercial sponsorship being sought—so that some of this at least can be restored, especially in Arabic and Russian—is on track and that, if it is successful, commercial factors will not compromise the independence and impartiality of the World Service?
Baroness Warsi
Every indication from the BBC Trust shows that this is a service to which the BBC is committed. We are confident that the BBC licence fee will continue to support the BBC World Service, but I will write to the noble Baroness in relation to the specific point on languages.
Lord Triesman
My Lords, the decisions that were taken in 2005 about reducing the number of eastern European language broadcasts, largely because there had been a great development in the democratic media in many of those countries, released money for the Farsi language service and for the 24-hour Arab service. I am very familiar with the decisions taken at that time. Would the noble Baroness agree that the cutting of those services, to the extent that they are being cut—and we should be under no delusion: they are being cut back—is going in the opposite direction of identifying where there are problems and addressing them?
Baroness Warsi
The noble Lord may well be comforted by the fact that, despite these budget reductions in the current financial climate, the FCO has been able to maintain the World Service’s share of the overall FCO budget at, or at about, the level that it was in 2007-08.
Welsh Government: Tax-varying Powers
(12 years ago)
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Lord Wigley
To ask Her Majesty’s Government whether they will take steps to enable the Welsh Government to have greater tax-varying and borrowing powers.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, the Government established the Silk commission to look at the case for devolving fiscal powers to Wales, and the commission reported its findings last Monday. The Government are very grateful for the expertise and rigour that the commission has brought to this important work. We will now carefully consider its recommendations and assess whether they are right for Wales and for the UK as a whole. The Government will respond to the report in due course.
Lord Wigley
My Lords, I welcome the noble Baroness to the Dispatch Box to answer questions in this way, not least because not so long ago she was asking exactly the same questions as I am asking today. Does she accept that the Welsh Government have no borrowing powers at present other than to cover temporary revenue shortfalls—a power that has never been used—or residual WDA powers, which are offset against the DEL budget and therefore provide no additional benefit? Now that the Silk report has come forward, as the noble Baroness mentioned, unanimously recommending that the Welsh Government should have new powers to borrow to fund capital investment over and above the DEL budget, as well as powers to issue bonds, can she give an undertaking that the Government will quickly move to provide these powers for the Welsh Government?
Baroness Randerson
The noble Lord will appreciate that, as the report was published only last week, it is very early to make decisions. I can make no firm comments about the outcome of the process that we are going through at the moment. However, on borrowing, it is important to recognise that in October a joint announcement by the Secretary of State at the Wales Office, the Welsh Government and the Chief Secretary to the Treasury acknowledged that in principle the Government agree to borrowing powers for the Welsh Assembly, and we anticipate the potential of the Welsh Assembly having the right to raise and levy taxes in order to offset those borrowing powers.
Lord Mawhinney
My Lords, in the event that the Government decided to make new powers available to Wales, would this constitute a legal precedent as far as the governance of Northern Ireland is concerned?
Baroness Randerson
It is important to bear in mind that the Government look at each of the devolved Assemblies and Parliaments and balances one against the other. They each have individual circumstances, individual rights and a different devolution settlement from the other devolved nations of the UK.
Lord Morgan
My Lords, the Silk commission admirably proposed a valuable extension of devolution by linking representation and taxation. Nevertheless, is not the Welsh Labour Party correct in saying that we cannot properly resolve these matters until there is fair funding for the Welsh Government, which means the abolition of the Barnett formula?
Baroness Randerson
I draw the noble Lord back to my previous answer which related to the statement in October from the two Governments. That made it clear that in relation to the Barnett formula there was an agreement between the two that, if convergence were to start to occur again, there would be discussions with a view to establishing a mechanism to ensure a fair system for Wales.
Lord Elystan-Morgan
My Lords, I congratulate the Minister on her appointment and indeed, the Government on their enlightened approach to the issue of borrowing by the Cardiff parliament. Is it not the case that it would be indeed strange if a national parliament did not have borrowing powers that are enjoyed by the most menial of local authorities? Does the Minister agree that in light of the fresh and energetic dynamism that has been created for devolution in consequence of the referendum of March last year and now, of course, by the Silk report, it would be absurd if these powers were not to be given to the land and nation of Wales?
Baroness Randerson
My Lords, the agreement in October established the principle that borrowing powers could be given to the Welsh Assembly and that we should move towards those with all possible speed. I acknowledge, as the noble Lord has said, that it is completely out of line with the international situation for a legislature to have no powers of this sort. I am very hopeful that the report will be looked at in detail with all due speed, in a timely manner. It is important for the House to note that the Government have made it clear that we want to set in train issues that follow from Part I of the Silk report before the publication of Part II.
Lord Roberts of Llandudno
My Lords, first, I very much welcome an old friend to her position as Minister for Welsh affairs in this House. With all the changes that we are seeing in relationships within the UK—some constitutional and others possibly economic—is it not time for the Government to establish a working group of all four nations to discuss the problems that might arise and to prepare for them, without having to rush in when the time comes without thinking them through thoroughly?
Baroness Randerson
I thank the noble Lord for his comments. However, now is not the time to take a comprehensive look at devolution in the round for all the nations simply because measures are in place in each of the three nations in terms of the development and progress of devolution. We therefore have to wait for those current developments to settle down before we look at devolution as a whole outcome.
Baroness Gale
My Lords, the Minister will know that the Silk commission’s recommendations included changes to taxation that would have implications extending beyond Wales and having consequences for the whole of the United Kingdom. Does she agree that Members from all parts of the United Kingdom in both Houses should be able to debate the report in full? Can she give some idea when the Government will respond to the report? I know she said earlier that it would be in due course.
Baroness Randerson
It is important to bear in mind that there were 33 recommendations in the report. That very complex set of recommendations was presented to us as a package; nevertheless, there is a series of different strands associated with them. Of course, as the noble Baroness rightly points out, they have implications well beyond the borders of Wales. Some of the recommendations could be implemented relatively quickly and without legislation, whereas others would require substantial amendments to the Government of Wales Act or legislation introduced by the Treasury. However, I can say that the Wales Office and the Government are committed to dealing with this with all due speed, but in a timely manner so that we give due and serious consideration to every recommendation.
Justice: Legal Advice
(12 years ago)
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The Minister of State, Ministry of Justice (Lord McNally)
My Lords, it is important to realise that legal aid has been retained for the highest priority social welfare law cases and we will continue to spend approximately £50 million a year in this area. We are also putting in place a new robust referral process to support relevant clients to resolve their problems by signposting them to suitable alternatives.
Lord Bach
My Lords, I thank the Minister for his reply. Does he agree that a fundamental test of any legal aid system is whether it gives access to justice to the poor, the disabled and the marginalised? If it does not do that, what is its point? It is agreed by everyone that many hundreds of thousands of our fellow citizens will be deprived of legal help and legal advice from 1 April next year—rightly named All Fools’ Day. Does he further agree that for this to happen at all, let alone in the middle of radical changes to our welfare system, is a disgrace and is certain to lower the reputation of our whole legal system?
Lord McNally
My Lords, I recall some of those points being made during the course of the LASPO Bill. I rejected them then and I reject them now. We are continuing to spend a good deal on legal aid in this area, as I have pointed out, and we will be bringing in new measures to support advice services. Many of the areas covered are for advice rather than legal advice and we believe that if we can put in place proper advice services we can cover many of the fears that the noble Lord has raised.
Lord Marks of Henley-on-Thames
My Lords, given that Citizens Advice has a wealth of experience in the area of social welfare law and, importantly, that it is not limited to giving legal advice but can also advise individuals in areas such as debt management, will the Government keep the funding of Citizens Advice under review to ensure that it can continue to provide its valuable and high-quality service?
Lord McNally
My Lords, I pay tribute to noble Lords on all sides of the House who, during the course of the LASPO Bill, championed the cause of Citizens Advice and other advisory services. The Government are looking at the whole advice sector—the Cabinet Office has taken on that responsibility—and, in the mean time, the Government have put forward an advice service transition fund, worth £65 million over the next two years, to help promote collaboration and best practice in this sector.
Lord Beecham
My Lords in 2011-12 the Newcastle CAB advised on 8,000 benefits problems. It has now lost £150,000 of government funding and three and a half posts, including its specialist welfare rights adviser. Gateshead CAB has lost £500,000. What advice can the Minister give these and other hard-pressed bureaux about how they can beat the rising demand for welfare law and welfare rights advice?
Lord McNally
I suppose that I can only give those in the voluntary sector the same advice as was given in my own department, which has had to take a 23 per cent cut in services. The reality, which it seems difficult for the Opposition to take in, is that we are all a lot poorer than we thought we were and a lot of organisations are having to reorganise to be effective. As I said, we have set aside £65 million over the next two years—and I have not even mentioned the £25 million to which I used to refer during the course of the LASPO Bill as the £65 million is new money. We appreciate the benefit of Citizens Advice and we want work with it so that it can carry on its useful work.
Lord Mackay of Clashfern
My Lords, can the Minister say what is the outcome of the discussions that were being held in relation to legal advice centres—not only advice but legal advice centres, of which there is a network—as a valuable way of giving legal advice economically?
Lord McNally
We continue to support the concept of legal advice centres, but they too have had to make some tough decisions in these circumstances. I hope that we can retain a good network, but we have had to make tough decisions in this area.
Lord Elystan-Morgan
The Minister says that we are poorer, but we are not poorer. When legal aid was established immediately after the Second World War, we were absolutely skint. We had to negotiate a crippling American loan. The economic situation we are now in is infinitely better than it was then. Why is legal aid being sacrificed on the altar of economic need?
Lord McNally
Legal aid is not being sacrificed on any altar. I pay tribute to the foundation of legal aid in 1948, but by the time we came into office, the legal aid budget was over £2 billion and the outgoing Government were already planning to cut it. I want to make sure that we maintain a legal aid system that will remain one of the most generous in the world and focus it on the most needy.
UK Border Agency
(12 years ago)
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Lord Avebury
To ask Her Majesty’s Government what is their response to the report by the Independent Chief Inspector of Borders and Immigration on the UK Border Agency’s handling of legacy asylum and migration cases.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the UK Border Agency’s response to the report of the Independent Chief Inspector of Borders and Immigration was published on its website on 22 November. We accept that there are lessons to be drawn from the UK Border Agency’s handling of these legacy cases. The agency’s response to the report accepts all of the chief inspector’s recommendations. However, as the chief inspector himself states, since April 2012 the agency has,
“started to tackle the problems”,
and,
“a much more robust approach [has] been introduced to locate and trace”,
individuals.
Lord Avebury
My Lords, considering the appalling record of irresponsibility, obfuscation and mendacity revealed by this report, does not my noble friend agree that control of immigration and asylum should be returned to the Home Office so that responsibility can rest on the Home Secretary herself, where it properly belongs? Will the Government allow time for a debate on this report and on the Government’s response to it?
Lord Taylor of Holbeach
I cannot pre-empt the usual channels and their negotiations on these matters, but I note my noble friend’s interest in this subject. This Question reminds me somewhat of the situation in which the noble Lord, Lord Rooker, found himself in dealing with the Rural Payments Agency. This agency has had a poor record on delivery but as the new transformation plan has been developed, and as the chief inspector highlights, it has started to tackle the problems.
Lord Tomlinson
Bearing in mind the popularity with Members opposite of the Mayor of London, do the Government share the views expressed by him during his visit to India or do they support the current government policy?
Lord Taylor of Holbeach
I am afraid that I have not been following what the Mayor of London has been saying.
Lord Dholakia
My Lords, does the UKBA await the outcome of court judgments on domestic violence cases before the right to settle in the UK is granted? Is the Home Secretary consulted before the UKBA exercises such authority over judicial decisions?
Lord Taylor of Holbeach
The noble Lord has asked a specific question to which I cannot give a detailed answer, except to say that the rules governing entrance into and settlement in this country are extraordinarily complex. We had an opportunity to debate elements of them yesterday. I will investigate the matter and write to the noble Lord.
Lord Brooke of Alverthorpe
Is it not true that one of the lessons which the Government are increasingly learning is that locating and tracing individuals is one of the biggest problems they face in modern society, especially given how people travel around the world in the way they do? Will the Government reflect on their early decision to abandon ID cards, which provided for locating and tracing, and will they not come to regret having taken the decision to abandon them?
Lord Taylor of Holbeach
The direct answer to that question is no. In terms of the reference that I should make, of course it is important to be able to match identity. Recently I visited the Criminal Records Bureau in Liverpool where much of the job is about matching individuals with the police national computer. It is a similar task here, and fortunately that task is now being undertaken properly.
Baroness Smith of Basildon
My Lords, it might help if I advise the Minister that the comments by the Mayor of London, Boris Johnson, were about the Government’s policies on students and immigration from India. Perhaps the best advice for the Minister is not to agree with Boris, but he might want to agree with government policy. There is clearly a difference in the Conservative Party on this issue.
On the subject of the report which the noble Lord, Lord Avebury, mentioned, it is not the first time that John Vine has raised very serious concerns about the UK Border Agency. This report is shocking: it actually says that Home Office UK Border Agency officials lied to Parliament. I am pleased to hear the Minister’s comments that the Government are accepting all 10 of John Vine’s recommendations. However, John Vine has previously complained about his recommendations being accepted and then nothing happening. How will the Government ensure that these recommendations are acted on? How will they be monitored? Can the Minister commit now to reporting progress back to Parliament?
Lord Taylor of Holbeach
I am always happy to report back to Parliament on this sort of issue. This issue has a very long history and it did not start with the coalition Government coming into office. The key question is: is the agency now directed in a way that is going to lead to improvement? I think that the answer to that is yes. In respect of the particular comments made by individuals in front of the Home Affairs Select Committee, the individual concerned has written to the committee explaining the reason why he inadvertently misled them.
The Earl of Sandwich
Does the Minister agree that responsibility for students who overstay their welcome in this country lies with the UKBA and not the universities and colleges? Is he aware that the universities and colleges are being harassed in relation to this and many other issues?
Lord Taylor of Holbeach
It is important to see this as a partnership. The universities want students from overseas and I am, fortunately, able to say that the number of students in this country from non-EEA countries has actually increased, despite the review which has been placed on them and the difficulties we have had with London Metropolitan University. Universities and the UK Border Agency need to act in partnership if we are going to have both effective control and the freedom and movement which we all, at bottom, desire.
Statutory Instruments
The Chairman of Committees
That Lord Lyell be appointed a member of the Joint Committee in place of Lord Geddes, resigned.
Public Service and Demographic Change
The Chairman of Committees
That, notwithstanding the Resolutions of this House of 21 and 29 May, it be an instruction to the Select Committee that it should report by 27 March 2013.
The Chairman of Committees (Lord Sewel)
In moving this Motion perhaps I can just mention that it would be helpful if noble Lords submitted suggestions for topics for next year’s Select Committees by 18 January.
Legal Services Act 2007 (The Law Society) (Modification of Functions) (Amendment) Order 2012
(12 years ago)
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Lord McNally
That the draft order laid before the House on 15 October be approved.
Relevant documents: 8th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 20 November.
District Electoral Areas Commissioner (Northern Ireland) Order 2012
(12 years ago)
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Baroness Randerson
That the draft order laid before the House on 15 October be approved.
Relevant documents: 8th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 20 November.
Crime and Courts Bill [HL]
(12 years ago)
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17:07 - Division on Amendment 14 - Ayes: 222 / Noes: 201 - Amendment 14 agreed.
“(1) There shall be a body corporate to be known as the National Crime Agency (“NCA”).
(2) The NCA is to be under the strategic direction and control of the NCA Board.
(2A) Schedule (The NCA Board) has effect.
(2B) There shall be a Director General, who is to be one of the NCA officers, and shall be responsible for the exercise of the NCA’s operational and administrative functions.”
Baroness Smith of Basildon
My Lords, Amendment 1 in the first group looks at the governance of the National Crime Agency. The amendments remove responsibility for the direction and control of the National Crime Agency from the director-general. Instead, the NCA will be governed by a board with an independent chair, which will have responsibility for “strategic direction and control” of the agency.
Earl Attlee
My Lords, will noble Lords try to leave the Chamber quietly in order that we can hear the noble Baroness move her amendment?
Baroness Smith of Basildon
I am grateful to the noble Earl, Lord Attlee. The House has hushed immediately, such is his power of control. The point is about the governance arrangements of the National Crime Agency and the move in the direction of control from the director-general to a board. It would have an independent chair, which would have responsibility for “strategic direction and control”, and would be modelled on the existing governance structure of the Serious Organised Crime Agency. Obviously, the director-general has to be responsible for the exercise of the National Crime Agency’s operational and administrative functions. However, the line of accountability would be to the NCA board, which would retain the Secretary of State’s powers to appoint and dismiss the director-general, although that would be subject to a pre-appointment hearing by Parliament. The amendments also provide for police and crime commissioners and chief constables to be represented on the board. That would formalise and facilitate that partnership, which we believe is important, between the NCA and police forces.
Having reread the Minister’s comments in Committee —from a different Minister—after the debate, I found them somewhat unsatisfactory, which is why we have brought forward this amendment today. The Government are scrapping the corporate governance structure that existed for SOCA and are instigating top-down direction from the Secretary of State, despite the fact that the new agency will be designated a non-ministerial department, unlike SOCA, which was a non-departmental government body. As the Minister will be aware, non-ministerial departments—NMDs—are, as a rule, more independent of the Government than non-departmental government bodies. According to the Standard Note in the Library of the other place on the Public Bodies Bill, a body such as an NMD would normally,
“answer directly to Parliament on issues where it has been deemed appropriate to remove executive political interference”.
The note gives the examples of Ofgem and the UK Statistics Authority. The corporate governance structures of SOCA and the NPIA provide for a board headed by an independent chair, as does that of the new Financial Conduct Authority. HMRC, which the Government cite as a model for the NCA’s new designation, has a board whose remit is to develop and approve strategy and final business plans and to advise the chief executive on key appointments. Arguably, many of the problems of the embattled UK Border Agency, which we have just been discussing, could have been avoided had there been a board sitting between the chief executive and the Secretary of State, overseeing the functioning of the organisation.
There seems to be a contrast in that the Government’s vision of the National Crime Agency does not include a similar accountability structure. I understand—and I have to say this carefully—that the director-general will chair a non-statutory board, consisting of, we think, the senior officers, who are most likely to be the heads of the five different pillars of the NCA. I am being careful about saying that we understand that to be the case because we do not have the detail, which is not yet available. I know we will come to this debate later about the framework document and its detail, but it does hamper us somewhat in our discussions about the governance arrangements of the NCA.
The noble Lord, Lord Henley, said in Committee how important good governance is and then said, “We will set that out in the framework document”. That is for another debate, but we were promised a draft of the document and then an outline of the document to flesh out the detail. However, all we have got is a table of contents. If we look at what it says on the NCA management board, the heading is, “The NCA Management Board”, which is followed by bullet points and then sub-bullet points as follows:
“The Director General will establish and chair a Management Board … Description of the role of the Board ... Composition of the Board which will include … Ex officio members … Non-executive members”.
There is not much detail there at all.
A corporate board structure would preserve the agency’s operational independence but would retain the ultimate strategic oversight by, and accountability to, the Government. The NCA will be responsible for a huge range of operations: it has a far wider suite of functions than SOCA has. The role of the DG will be incredibly powerful and important. It seems quite crazy that there should not be an additional layer of scrutiny over the day-to-day operations, which is something that a management board, chaired by the director-general, cannot deliver or provide. The corporate board provides the other role of keeping the Home Secretary clear from direct operational control and oversight, and protects the Home Secretary from any accusation of political interference or control. Under the government model, the NCA will be governed by one all-powerful individual, the director-general, who reports directly to the Home Secretary. The Home Secretary in turn will authorise the director-general’s annual plan, which sets out the operational priorities. The Home Secretary will hire and fire the DG without reference to any other body and determine what operational powers the director-general would have.
Lord Blair of Boughton
My Lords, I shall support this amendment simply by reflecting on my own experience. I will be very brief. I served at a senior level, although not as commissioner, in the Metropolitan Police when there was no police authority. I also served when there was a police authority. With respect to the noble Lords who served on that police authority, some of whom are present, I did not always agree with them. However, in terms of strategic principle, to have a senior police officer—as the director-general will be—running a large, complex and controversial law enforcement organisation with no statutory advice from any outside body around him or her is dangerous in the modern age. As the noble Baroness has just said, it is not just dangerous for the director-general; it is dangerous for the Secretary of State.
Let us assume for a moment that the investigation which came to be known as “cash for honours” had occurred at a time when no police authority existed in London. As commissioner, while my service was investigating what had or had not happened inside No. 10 Downing Street—presided over by a Labour Prime Minister—I would have been reporting direct to a Labour Home Secretary, rather than to a more variegated body. The difficulties, temptations, pressures and politics of what that would, or could, have been like are pretty obvious and unpleasant to contemplate. What this amendment is suggesting is not a police authority. I am not at all precious about the detail of some of the appointments laid out in the different clauses; I just believe there is no need to mirror the PCC arrangement so recently announced in this kind of central body.
This amendment is less vital to me than Amendment 14, about counterterrorism functions, to which we will come shortly, but my experience suggests that a board of this sort would be an advantageous addition to the NCA, the director-general and the Secretary of State, and I commend the amendment to the House.
Lord Harris of Haringey
My Lords, I, too, support this amendment. Having been a member of the police authority to which the noble Lord, Lord Blair of Boughton, reported, I confirm that we did not always agree with the views that he put to us or the proposals that he made—but that was a healthy tension; there was a healthy process of governance. When I was chair of that authority, on three separate occasions a proposal was brought to the police authority by the noble Lord, Lord Blair, in his previous incarnation, which was rejected each time, and in the end a modified proposal emerged, which I think was better for London.
That was a relationship of dialogue and openness. What the Government are proposing in the Bill will be very different. There will simply be the director-general, who will report to the Home Secretary, and the Home Secretary will have the powers to set the strategic direction, the general way in which the organisation operates and, of course, have the power to hire and fire. There will be no scrutiny of that, no external validation and no one else sitting round the table—it will be a one-to-one relationship.
One of the fundamental principles of British policing, ever since Sir Robert Peel started the whole process, is that there should not be direct political control of the police service. What we have here is the creation of a potentially incredibly powerful national policing body that will report to a single politician, with no other people sitting around the table when directions and advice are given.
The advantages of my noble friend’s amendment are that it puts a layer between the Home Secretary and the director-general—a governance board—but also that the governance board has several people and interests represented. That does not absolutely prevent political interference because I am sure that the Home Secretary may on occasion phone the director-general and there will be direct dialogue, but it provides a governance structure that is a safeguard against the distortion of operational priorities for political purposes.
The noble Lord, Lord Blair, referred to the difficulties that he might have faced in respect of cash for honours. At the time of that investigation, there was a Labour chair of the police authority—it was not me; that was after my time, although I was still on the police authority—and I know that that Labour chair came under considerable political pressure from Labour Party colleagues about that investigation. Quite properly, he did not intervene on those matters; indeed, he defended the operational decisions of the police. But even had he been minded not to resist that political pressure, he had around him 22 other members of the police authority calling him to account and saying, “Actually, this must be allowed to run its course, right or wrong”. Here, there will just be the Home Secretary relating to the director-general in private, with no one else around the table able to say, “Is this appropriate or not?”.
It is a profoundly dangerous structure. I am sure it is being done for the best of all possible reasons and we will be told how efficient it is. But I have yet to hear anyone say that the SOCA board has been a waste of time, that it has not added value or that it has not improved the governance of the Serious Organised Crime Agency—none of those points has been put.
Instead, we are offered this direct-line relationship between the director-general and the Home Secretary. It is extremely dangerous. Even if the current Home Secretary and her successors have no intention of ever crossing that line and trying to intervene in the operational decision-making of the director-general, they will be open to the allegation that that is precisely what they have done. That weakens the position both of the director-general and of Ministers. For that reason I believe that the Bill’s proposals are profoundly dangerous, and I support my noble friend’s amendments.
Baroness Hamwee
My Lords, my noble friend Lord Marks of Henley-on-Thames and I have Amendment 3 in this group. I am not sure whether the noble Lord, Lord Blair, was looking at me—I believe he was—when he referred to some people in this Chamber having been members of a police authority at the relevant time. I was not a member, but I questioned him in public, carrying out a role that is not unrelated to the subject of this amendment, which is getting information into the public domain—a hugely important role that someone needs to carry out. I am not sure who that someone might be in this structure.
I am aware that the Government have designed an arrangement under which the director-general is accountable to the Secretary of State, who is in turn accountable to Parliament. The Minister, the noble Lord, Lord Henley, in response to my amendment at the previous stage, told me that a supervisory board, which was how I described it, would muddy the waters. I had taken that proposal for a supervisory board from the arrangements that the Department for Communities and Local Government had in place, as I was easily able to access its arrangements. I said then that I was not seeking to change the architecture of the Bill.
I do not propose a governing board, and I do not go as far as the noble Baroness. However, because of the concern not to change the architecture, I have amended my own amendment to include the words, “Subject to Part 1”. That deals with the respective roles of the Secretary of State and the director-general. I tabled my amendment before seeing the outline framework document, which we are told will cover internal governance. Reading Hansard following Committee, I thought that perhaps “supervision” was regarded at any rate as an indelicate term for the relationship, although I felt at the time that the Government were a little oversensitive to my amendment.
However, I will be even blunter and say that as I read the paragraph in the outline framework document, the word that comes to mind is “cosy”. It might be much less cosy if we knew more from this document about what the governance arrangements would consist of. We are to have a management board, which comes under the heading of “Internal Governance”—it is almost the whole of that paragraph. I do not regard management as being the same as governance. Neither do I regard governance as being the same as administration, although that is the umbrella word used for governance in Schedule 2. It is the term used to introduce the concept of governance.
I have used terms including “strategic and corporate leadership” and “advice” in my amendment. If the management board that we are to expect is not to provide strategic and corporate leadership and advice, what is it going to do? Perhaps the Minister can help us today by fleshing this out a little more.
The framework does not tell us what it will do, and that is clearly important. It says only that there will be a description of the role of the board. Although, as I said, my amendment does not go as far as Amendment 1, the points made hitherto raised extremely important issues about governance in the public and political sector. I ask one further question. I do not want to pre-empt the noble Lord, Lord Condon, because it was his question at the previous stage, but will the board include stakeholders? We know that there are to be some ex-officio members and non-executive members. Again, the House would be interested to know who it is anticipated will fulfil those roles.
Lord Condon
My Lords, I declare my registered interests in policing. I find myself supporting the spirit of Amendment 1 and Amendment 3, the first in the name of the noble Baroness, Lady Smith, and the latter in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Marks. If the Government resist all these amendments and the spirit behind them, they will miss an important opportunity to improve transparency, accountability, confidence and governance in the new NCA.
At Second Reading and in Committee, I raised the spectre of a disjointed patchwork of policing through the new arrangements. My fear was of a parochial, local network of policing run by the newly elected police and crime commissioners, and an all-powerful National Crime Agency with no supervisory or governance board, with very little in between and no lines connecting them. The Government will miss a vital opportunity here if they hide behind the notion that the NCA deals with important, national issues which only a relationship between the Home Secretary of the day and the director-general can embrace and satisfy. Whatever emerges through a supervisory or advisory board, or some consultative mechanism, we need to have confidence that it will embrace at least one or more of the new police and crime commissioners, representatives of chief constables and perhaps those elsewhere in policing, and the many other stakeholders who are legitimately concerned about how this new policing architecture will work.
I understand that perhaps Amendment 1 is a step too far because there are matters of national importance that maybe only the Secretary of State in the Home Office can have the chairmanship responsibility for. Yet I hope that the Minister will be able to move some way towards reassuring us that the new arrangements, however they emerge, will improve confidence, transparency and accountability in this important new agency, which I wish the very best. I hope it will succeed.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I thank the noble Lord, Lord Condon, for his speech and in particular for the goodwill that he demonstrated towards the success of the NCA.
I hope that I do not disappoint noble Lords when I say that I will resist these amendments, but I will address the issue in some detail and fullness. Some of the elements will come up in later debates, but I recognise the importance to noble Lords of this particular group of amendments none the less. They go to the heart of the Government’s arrangements for the NCA. The noble Baroness, Lady Smith, reiterated the position that she outlined in Committee, that the NCA should be led by a statutory board headed by a non-executive chair.
I will come to my noble friend Lady Hamwee’s amendment later, because she talked about a slightly different form of governance. I start by addressing the amendment tabled by the noble Baroness, Lady Smith, and whether it is somehow necessary for the National Crime Agency to have a statutory board. We can establish quite quickly that it is not. The NCA is being established as a Crown body without incorporation. A Crown body without incorporation does not have a separate legal identity from the Crown, so incorporation and a statutory board are not, strictly speaking, required. The functions of the agency are conferred directly on the agency itself, not on a board. This is a tried and tested model for a non-ministerial department and works well for other similar agencies with which noble Lords will be very familiar, such as the Crown Prosecution Service and the Serious Fraud Office.
Not only is no statutory board required, but to create one would be detrimental to the effective governance of the NCA. The noble Lord, Lord Harris, spoke vigorously about the fact that he felt a governance board would be very effective for the NCA. However, we have designed the agency so that the Home Secretary —the elected Government’s representative who is accountable, not to nobody as the noble Baroness, Lady Smith, implied, but to Parliament—has clear strategic oversight, while the director-general, who would be an experienced crime fighter, provides the day-to-day operational leadership. Furthermore, we have designed the agency’s governance arrangements so that the director-general will be directly accountable to the Home Secretary, not beholden to a committee. In this way we will ensure that the accountability structures are clear, practical and non-bureaucratic.
The amendments of the noble Baroness seek to mirror the arrangements for the Serious Organised Crime Agency, which was blessed with the traditional quango-type structure, led by a non-executive chair and a board. However, as my noble friend Lord Henley pointed out in Committee, SOCA’s arrangements have risked more bureaucracy rather than more accountability. The current SOCA chair and board are excellent individuals who have done a good job, but to be led by a committee was never the right structure for a law enforcement agency. Police forces are led by chief constables directly accountable to a single individual—the elected police and crime commissioner. The National Crime Agency should similarly have an operational director-general at its head who is directly accountable to the Home Secretary.
The noble Baroness argues that the statutory board will help preserve the director-general’s operational independence. She is perhaps concerned that his operational independence might be dented by too frequent contact with the Home Secretary without the protection of a committee. My noble friend used the word “cosy”. I cannot reconcile that idea with reality. The director-general will be an experienced crime fighter and a strong leader in his or her own right, not a shrinking violet, and that is certainly not how anybody who knows Keith Bristow, nor any noble Lord with direct experience of governance in policing, would describe him.
To put it another way, the relationship between the director-general and the Home Secretary, just like that between chief constables and the police and crime commissioners, will be a robust, professional partnership where both parties have their own roles to play which are set out clearly in the legislation. In particular, Clause 4 establishes the operational decisions test which rests with the director-general. If the legislation is not enough protection, I do not see what a non-executive chair or committee is going to add, other than a further layer of bureaucracy through which the director-general’s discussions with the Home Secretary will have to filter.
Of course, we can all absolutely agree on the importance of good governance for the NCA. While the director-general is rightly ultimately charged with leading the organisation, in doing so he will obviously need and want the advice and challenge of other experienced voices from inside and outside the NCA. Here I can perhaps help noble Lords because the NCA, like other non-ministerial departments without statutory boards, will still need to have a management board to advise the director-general on the strategic direction of the organisation, ensure that there are proper audit and risk arrangements in place and so forth.
The outline framework document has been referred to and we will be discussing it later. I hope noble Lords have been able to see it, and I will try to make sure that copies are available in the Printed Paper Office, if they are not there already. It provides for the board to be established under the chairmanship of the director-general, which my noble friend Lady Hamwee referred to, and it will include non-executive members. The role of those non-executive members, just like non-executive board members anywhere else in government—or outside government, for that matter—will be to advise and challenge the executive on the basis of their outside experience and skills in order to help the organisation do better.
I contrast that picture of non-executive membership with the non-executive posts provided for in Amendment 2. Under the noble Baroness’s proposed model, the NCA board would comprise persons representing the views of police and crime commissioners and chief officers in the different parts of the United Kingdom. The noble Baroness argued that this is needed to ensure that the NCA is sufficiently alive to the interests of those groups. Clearly PCCs and the chiefs of the United Kingdom’s various police forces will be key partners for the NCA. That is why the Bill provides that they will be part of the group of strategic partners and will have the opportunity to influence the strategic direction of the agency through consultation on the NCA’s strategic priorities and the agency’s annual plan. The director-general will also, of course, want to engage personally with chief officers and PCCs across England, Wales, Scotland and Northern Ireland to ensure that the NCA is doing everything it can to help protect their communities from serious and organised crime. He will do that, and is already doing that, through building solid relationships with individual chiefs and PCCs, and through the Association of Chief Police Officers and the new Association of Police and Crime Commissioners. These practical working relationships will ensure that the NCA is alive to the complex needs of communities and of its partners that serve those communities.
Four individuals attending the NCA board could hardly do the same. In seating these individual representatives at the table of the NCA board, the noble Baroness has turned it from a board—in other words, a body which one might expect to focus on using its diverse experience to get the best possible performance from the NCA—into something more like a stakeholder forum for the NCA’s partners to air their views. I believe that the Government’s model is a better one and gives better direct access to the director-general.
My noble friend’s amendment would also create a statutory board for the National Crime Agency, in this case chaired by the Home Secretary with a further ministerial member and a number of non-executive members in addition to the NCA’s executive leadership. This is a similar structure to that adopted by ministerial departments, albeit that has never been set out in statute and nor, as far as I am aware, has anyone called for it to be so set out. I am not persuaded of the case for such a board. I appreciate that my noble friend’s amendment tries to leave the director-general in control of the agency and directly accountable to the Home Secretary by underlining that the board will function subject to the provisions set out in Part 1, but let us be pragmatic here. It will hardly help establish the director-general’s clear operational leadership of the agency if its key leadership body is chaired by the Secretary of State. Furthermore, many corporate management decisions that properly fall to a board—for example, on the people strategy—would not be for the Home Secretary, and she would not see it as her role to chair those sorts of deliberations, since to do so would cut across the director-general’s leadership and direction of the agency. So the director-general would still need to establish and chair an NCA management board to deal with those issues.
Baroness Smith of Basildon
My Lords, when the Minister stood up, he said that he hoped not to disappoint the House with his comments, but I fear that he has indeed done so. It is interesting that not one Member of your Lordships’ House has spoken in support of the Government’s model for what it calls governance of the National Crime Agency. There may not be universal support for the amendment that I have put forward, but the issues raised by the noble Lords, Lord Harris, Lord Blair and Lord Condon, have illustrated their concerns about the governance model that the Government are putting forward.
I believe that the noble Baroness, Lady Hamwee, sought to help the Government by approaching it in a less comprehensive manner than appears in amendments proposed by myself and the noble Lords, Lord Rosser and Lord Blair, but even that seems to have been rejected by the Minister. I fear that a distinction has not been drawn that should be drawn between management and governance. Many of the Minister’s comments made sense in terms of the management of the National Crime Agency. However, the amendments that I put forward deal with governance. There is no attempt to say that the director-general should not, in his words, be in control of the agency, but there should be a governance board. The management board about which he speaks is chaired by the director-general, and, as I said in my comments, it does not do the job.
The Minister said that he was wedded to this model, but I hope that he will reflect on the comments made in your Lordships’ House today. The House is certainly not wedded to this model, although it does not have a universal view about a better model other than that there should be different governance arrangements that involve some kind of board. I hope that he will take the matter away and reflect on it. I do not intend to press my amendment to a vote today, but I hope that the Minister will reflect on the comments that have been made across the board in your Lordships’ House.
Lord Rosser
“( ) A person may not be appointed as Director-general under sub-paragraph (1) unless that person has been approved by the relevant select committee of Parliament.”
Lord Rosser
My Lords, this amendment would require pre-appointment scrutiny of the director-general by the appropriate parliamentary Select Committee, presumably the Home Affairs Committee.
As we understand it, the Government consider pre-appointment hearings to be best practice for major public appointments. The coalition agreement contains a specific commitment to,
“strengthen the powers of Select Committees to scrutinise major public appointments”,
as part of improving government transparency. Yet the Government have not considered this approach relevant for the office of director-general of the National Crime Agency, a role that is to be much more powerful than the chief executive of the Serious Organised Crime Agency, with the NCA’s increased responsibilities and the absence of any governance structure, as we have just debated.
In Committee, the Government said:
“We accept that there is a place for departmental Select Committees to undertake pre-appointment hearings for certain key public appointments but we do not believe that this is one of them”.—[Official Report, 18/6/12; col. 1597.]
The Government argued that pre-appointment scrutiny by the relevant Select Committee was not justified because the Home Secretary was accountable for public protection and the progress made by the National Crime Agency. Yet the occupant of the post of director-general of the NCA will have considerable powers and, in effect, will be the head of the one national crime-fighting agency in the country dealing with serious, high-profile and organised crimes. In addition, the Government are also considering giving the NCA and its director-general responsibilities for counter- terrorism. The occupant of the post of director-general will also have the power to direct chief officers of other police forces throughout England and Wales to carry out specific tasks.
Under Schedule 1, a person need not be an NCA officer before appointment as the director-general. The only requirement is that a,
“person may not be appointed as Director General unless the Secretary of State is satisfied that the person … is capable of effectively exercising operational powers and … is a suitable person to exercise operational powers”.
That is a somewhat subjective judgment, with nothing specific about proven skills or experience. The reputation and credibility of the NCA is going to be determined to a significant degree by the effectiveness and ability of the director-general, who will have responsibilities directly affecting the safety and security of the people of this country and will have operational independence but without the support or protection of a board, unlike the Serious Organised Crime Agency, between the director-general and the Secretary of State to help to ensure that that is the case.
This post is a new one with responsibility for potentially very sensitive issues, including what could be sensitive issues with political implications. The occupant will need to be strong enough to ensure that operational independence from government is a reality and to withstand any pressures to have too cosy a relationship with his or her political masters. To leave the matter solely in the hands of the Secretary of State without any other parliamentary approval being required would not seem the appropriate step in relation to this post, bearing in mind the nature and responsibilities of it. This must surely be one position for which there is a strong case for pre-appointment scrutiny by the relevant parliamentary Select Committee. I beg to move.
Baroness Hamwee
My Lords, I have a difficulty with this amendment because it seems to seek not pre-appointment scrutiny, as the noble Lord has described it, but appointment veto. Pre-appointment scrutiny, questioning a proposed candidate but then leaving it to the appointer to take the final decision in the light of that scrutiny is something which, as the House will know, I have advocated in other contexts. For very senior and important positions I think that that is very desirable. However, I do not go so far as wanting to see Select Committees approving appointments such as this. Although the noble Lord’s speech was very persuasive, what he is seeking the House to agree to is something even more than he was arguing for.
Lord Taylor of Holbeach
My Lords, I agree with my noble friend that this amendment seeks to make the appointment of the director-general of the NCA subject to the approval of the Home Affairs Select Committee. This is a step up from the amendment tabled by noble Lords in Committee, which provided only for consultation with that committee.
As my noble friend Lord Henley outlined during the Committee stage, the Home Secretary is ultimately accountable for public protection. She will account to Parliament for the progress made by the National Crime Agency. It is right, therefore, that she is responsible for appointing the director-general. Of course, there is a place for departmental Select Committees to approve certain key public appointments, but we do not believe that this is one of them.
In the Government’s June 2012 response to the House of Commons Liaison Committee’s report on public appointments, we indicated that,
“there are some posts where it is appropriate for Parliament to exercise a formal control over appointments”.
However, the response went on to say:
“This is exceptional and where the remit is associated with the functions of Parliament”.
That is not the case with this appointment, as it was not the case with the appointment of the director-general of the Serious Organised Crime Agency. The Home Affairs Select Committee will, of course, have a role in scrutinising the work of the National Crime Agency, in the same way as it has scrutinised the work of SOCA, and I believe it is in this capacity that it can best contribute. Indeed, Keith Bristow gave evidence to the committee as recently as 16 October, and I expect that he will be frequently before that committee to be challenged on how the NCA is performing.
The Government do not agree to Select Committees having an effective veto on a wider range of appointments and for that reason I ask the noble Lord to withdraw his amendment.
Lord Rosser
I thank the Minister for his response. He said that he does not agree with the Select Committee having what he described as the power of veto over an appointment. I do not exactly have the impression that the Minister is in favour of the Select Committee having any say in, or even being able to express any view on, the appointment to the post of director-general. I do not think the issue with the Minister is over the type of role the Select Committee should play but rather of it having any role in relation to the appointment of the director-general of the National Crime Agency, even to be able to interview the individual and to express a view to the Secretary of State on the appointment that he or she wishes to make. We need to be clear about that. This Government’s opposition is in fact to any involvement of the Select Committee in the appointment process for this post, unless the Minister wishes to stand up and contradict me over that. No, he is not contradicting me, so I think I have got it right. It is not about the wording of this amendment, and what the Minister has described as a power of veto, it is about any Select Committee involvement at all.
One can only say again that that is contrary to what is in the coalition agreement. Of course I can understand why the Minister is not too happy about the coalition agreement, because it provides a specific commitment to,
“strengthen the powers of Select Committees to scrutinise major public appointments”.
I should have thought that this was a major public appointment. There are real dangers over the occupant of this post being under pressure from the Secretary of State. The appointment is going to be made by the Secretary of State apparently without reference elsewhere. This individual will not have the protection of any sort of board between this individual and the Secretary of State. Clearly, everyone will want to be sure that the person appointed to this post is the kind of individual who will be capable of dealing with potentially very sensitive issues, including ones that may have political implications, and will not allow themselves to be in any way influenced by the Secretary of State in the decisions they make in what should be an operational matter. I should have thought that that was something that the Select Committee could at least seek to satisfy itself would be the case before the appointment was finalised. The Minister said that the Select Committee will have a role in scrutinising the work of the National Crime Agency. That will be a bit late when it comes to looking at what the director-general is doing because the director-general by then will have been appointed.
I note the Minister’s response. I cannot say that I am entirely surprised at the response that he has given on behalf of the Government, but I regret that response. I beg leave to withdraw the amendment.
Earl Attlee
“( ) Paragraph 12(1) does not apply to a member of a special police force who is an NCA officer by virtue of a secondment.
Secondments by NCA(1) The Director General may make arrangements for NCA officers to be seconded to a UK police force.
(2) An NCA officer who is seconded to a UK police force is, whilst on secondment, under the direction and control of the chief officer of the police force (but is not a member of the police force).”
Earl Attlee
My Lords, I am conscious that there are a large number of amendments in this group, but they are all essentially technical and drafting in nature. In a few cases, they respond to points raised in Committee and I will deal with these first.
On the first day of Committee on 18 June, I undertook to consider an amendment tabled by my noble friend Lady Hamwee, which sought to provide for secondments from the NCA into police forces. As your Lordships will be aware, the Bill already contains provision for secondments in the other direction, so that police officers can be seconded to the NCA. On reflection, we agree that this was an omission. Amendment 9 makes the necessary change to ensure a two-way exchange of NCA and police officers.
On that first day of Committee, my noble friend also had a probing amendment designed to test why the Bill provided for compensating only NCA specials for loss of salary as a result of an injury or death on duty. We agree that it would be helpful not to unnecessarily restrict the scope of the scheme. Amendments 10 to 13 therefore remove the limitation in respect of loss of salary. The scheme through which NCA specials would be eligible for compensation will, of course, be subject to set criteria as with all existing schemes for public servants. In reality, the calculations made under such schemes are frequently linked to loss of remuneration, so I do not want to give the impression that the scheme for NCA specials will necessarily adopt a different approach. Nor do I want to limit the scheme so that NCA specials who do not receive a salary elsewhere cannot be adequately compensated. I should add that these amendments will also make it possible for NCA specials to be covered by either the Civil Service injury benefits scheme or another stand-alone scheme to be established by the NCA, as appropriate.
Amendment 26 addresses an issue raised by the noble Lord, Lord Rosser, in Committee. The noble Lord will recall that he drew attention to the fact that there was no requirement for the Secretary of State to consent to a direction by the director-general to the chief constable of the British Transport Police to provide assistance to the National Crime Agency. It was our intention to include this consent requirement—it already applies where a direction is made to one of the 43 territorial forces—and I am grateful to the noble Lord for highlighting this gap in the Bill.
Amendment 35 closes a gap in the independent oversight arrangements. It extends the remit of the Police Ombudsman for Northern Ireland to include complaints and conduct matters arising from the exercise of asset recovery functions by NCA officers in Northern Ireland. The Bill already provides for the remit of the Independent Police Complaints Commission to extend to such matters in England and Wales.
Amendments 39 to 55 extend the power to make schemes for the transfer of staff, property, rights and liabilities. As noble Lords will be aware, the National Policing Improvement Agency is currently being wound down as a prelude to its abolition following the enactment of this Bill. Most of its staff and property will have been transferred to the successor bodies by December of this year, but there may be some residual staff, property, rights and liabilities that fall to be transferred on formal abolition of the NPIA. Schedule 8 already enables schemes to be made to make transfers from the NPIA to the National Crime Agency but, as a precaution, these amendments also enable transfers from the NPIA to the Home Office.
Amendments 52 and 56 make transitional provisions in consequence of the abolition of the Serious Organised Crime Agency and the NPIA. Amendment 52 ensures that corporate liability for any criminal acts—for example, health and safety breaches—committed by SOCA or the NPIA passes to the successor body. It is also critical that in creating the National Crime Agency we do not undermine the operational integrity of things done by SOCA or other precursor bodies. In particular, we need to ensure that operations and investigations started by SOCA can and will continue to be investigated and taken through to conclusion by the National Crime Agency.
Amendment 56 has been drafted so that it captures a wide range of documents, contracts, authorisations and legal proceedings. For example, it is important that search warrants secured by SOCA under the Police and Criminal Evidence Act or authorisations granted by senior SOCA officers under RIPA continue to have force at the point at which the National Crime Agency takes over from SOCA. Amendment 56 also ensures that three statutory instruments made under Part 1 of the Serious Organised Crime and Police Act 2005 continue in force, with the necessary adaptations, when the relevant order-making powers are repealed and replaced by equivalent powers in Part 1 of this Bill. Both measures will, as I have said, ensure a smooth transition from SOCA to the NCA.
The other amendments to Schedule 8 in this group make further consequential amendments to various enactments and subordinate legislation to repeal or replace various statutory references to SOCA. I draw the particular attention of my noble friend Lady Hamwee to Amendment 76, which makes consequential amendments to the Equality Act 2010. My noble friend asked in Committee on 20 June why paragraph 4 of Schedule 4 to the Bill made particular provision for the application of discrimination legislation in Northern Ireland but seemingly not in other parts of the United Kingdom. These amendments to the Equality Act ensure that all NCA officers are protected by the relevant discrimination legislation in each part of the United Kingdom.
Finally, I draw the House’s attention to Amendment 62, which builds on the existing provision in the Bill enabling police officers to retain, in certain prescribed circumstances, their police pension when appointed to posts within the NCA. This amendment extends that provision to include reservists in the Police Service of Northern Ireland so that they are on an equal footing. As I indicated at the start, these amendments cover a lot of ground but I trust that your Lordships will agree that they are necessary changes to refine and build on the provisions of the Bill and to ensure a smooth transition from SOCA to the National Crime Agency. I beg to move.
Baroness Hamwee
My Lords, my heart sank when I saw the enormous number of government amendments to the Bill. It lifted quite a lot when I realised that the first amendment, on secondment, and the next, on compensation for specials, were in response to points that I made at the previous stage. Then to bookend it, as it were, was the amendment to the Equality Act to which the noble Earl has just referred. I am grateful to the Government for taking those points on board.
I have two amendments to the government amendments, both of which are quite small points. They both refer to Amendment 56. The first would take out proposed new sub-paragraph (7), which provides for determination by the Secretary of State as to the two circumstances set out. I hope that the Minister is aware that my question is on whether the determination should be a matter for the court or the employment tribunal, which is likely to be the relevant tribunal. It occurs to me that the Home Secretary could be a party to the proceedings in question and it seems to deserve a little explanation as to it always being proper for the Secretary of State to determine these questions.
The second amendment is to the provision in proposed new sub-paragraph (12)(b) that deals with,
“the reference to the assumption of a third party function”,
which is limited to the three functions listed. I should be grateful if the Minister can confirm that these are the only cases. My reason for asking is that proposed new sub-paragraph (12)(a) uses the term “includes” and (12)(b) uses the term “is”. Is there no assumption of a function unless there is also a transfer of staff? That is what I read into this, but I may well be wrong.
Baroness Smith of Basildon
My Lords, I confess that when I see a list of almost 50 government amendments that the Minister describes as technical and drafting, I realise that I am becoming quite cynical as I get older. By and large they are technical and drafting amendments, but I have some questions, some of which the noble Earl has sought to address in his comments. However, if I may, I will press him on a couple of points for an explanation.
On government Amendments 10 to 12, compensation of NCA specials is addressed. The amendments take out “NCA” with regard to compensation. The Minister said that that is because they may be compensated from elsewhere. I am not quite clear where the elsewhere would be that would allow for expenses and compensation to NCA specials. Does he envisage a greater role for the private sector to pay them, for example? I do not know, but is he able to elaborate further? That was clearly not envisaged during Committee or when the Bill was first drafted. I am unclear why the Government have felt the need to change it. Who else will compensate or pay the expenses of NCA specials?
I also thank the Government for dealing with the comment made by my noble friend Lord Rosser about clarifying the position on which Secretary of State would apply regarding transport. That was helpful. As regards the transitional provision, I am sorry that this was not in a separate group of amendments because that might have been helpful to your Lordships’ House. We discussed this in some detail during earlier stages of the Bill and I have asked Parliamentary Questions about the transitional costs and how the transition should be arranged. The concept of the transition from the predecessor organisations to the NCA is extremely important.
Earl Attlee
The noble Baroness, Lady Smith, asked who else would compensate. I referred in my speech to a number of possible schemes but I think that it would be helpful if I wrote to the noble Baroness in full detail. Some inspiration has arrived: it will be for the National Crime Agency to determine the most appropriate way of ensuring that NCA specials are covered if they were to be injured or killed on duty. That may be through the Civil Service injury benefit scheme or—if the existing rules of that scheme do not allow adequate provision for individuals who may spend the majority of their time working for another employer—through a separate, tailor-made scheme. The Civil Service scheme, of course, is managed by the Cabinet Office. If I have any further details to add I will write to the noble Baroness.
The noble Baroness also asked how many staff are involved in these provisions. I would imagine that the numbers are fairly low. However, the provisions are precautionary in ensuring that we have sufficient flexibility to deal with any unexpected problems. Again, I will write with the details. The noble Baroness also teased me slightly about the transitional provisions and the funding thereof, but I am sure that she will accept that these are legal provisions to move from SOCA and CEOP to the new NCA.
I am grateful to my noble friend Lady Hamwee for explaining her two amendments, Amendments 57 and 58, to government Amendment 56. Amendment 57 relates to the Secretary of State’s power to determine any questions as to whether a particular function of a precursor body has been transferred and to whom it has been transferred. My noble friend questions whether this should be a role for Ministers or for the courts or, as she explained, for an employment tribunal. Schedule 8 already provides for transfer schemes to be made by the Secretary of State and the Bill provides for the abolition of SOCA and the NPIA. Therefore, in circumstances where there is any doubt, we consider it an administrative task to determine whether a particular function has been transferred from one body to another. This is not an area where we need to involve the courts. I would add that the Police Reform and Social Responsibility Act 2011 adopted a similar approach in relation to the continuity of functions exercised by police authorities when such functions transferred to police and crime commissioners.
I turn now to Amendment 58. It may help if I explain the effect of proposed new paragraph 5A(12) of Schedule 8 as inserted by government Amendment 56. Sub-paragraph (12)(a) is concerned with ensuring the continuity of things done by either SOCA or the NPIA once they are abolished and a successor body takes on the corresponding functions. Sub-paragraph (12)(b) is concerned with ensuring the continuity of things done by a third party where some of the functions of that third party are being taken over by the NCA. The language used in the drafting of these two paragraphs is a reflection of the fact that the NCA will take on functions corresponding to those undertaken by SOCA and in part by the NPIA, which are to be abolished. It will also assume some of the functions of the other third party precursor bodies which continue in being. With that explanation, I hope that my noble friend will be content not to press her amendment.
Earl Attlee
(a) the reimbursement of”
Baroness Smith of Basildon
My Lords, this is one of the most important and significant amendments that we are putting forward because it addresses one of the most serious clauses in the Bill. In Committee the noble Lord, Lord Alderdice, raised specific concerns relating to Northern Ireland about this clause. The noble Lord was concerned whether the Northern Ireland Executive would agree a legislative consent Motion. I raised similar concerns and said that this matter would have to be resolved. I will not go into the specific detail of those issues today, but it would be extremely unsatisfactory to agree that the Government can take the power to transfer counter-terrorism from the Metropolitan Police to the National Crime Agency without further primary legislation to consider the serious and complex issues affecting Northern Ireland.
When we discussed this in Committee, the response from the then Minister, the noble Lord, Lord Henley, was not encouraging. In fact, it gave me cause for concern—the noble Earl, Lord Attlee, seems surprised at that. The noble Lord, Lord Henley, said:
“I understand that the Justice Minister and the Justice Committee of the Assembly … have agreed in principle to take forwards a legislative consent Motion, and officials in the Department for Justice in Northern Ireland are seeking to secure the agreement of the Executive Committee before proceeding to the next stage. Any legislative consent Motion needs to be adopted by the Assembly before the Bill reaches its last amending stage. Although things have not been proceeding quite as quickly as we might wish them to have done, since we know that the Bill is designed not to proceed as quickly as sometimes Ministers wish Bills to proceed and we will not complete the Committee stage until October, there is a considerable chance that we will get to that stage before the Bill gets on to the statute book”.—[Official Report, 18/6/12; col. 1609.]
There are no guarantees of that, and saying that we think it might get there is not good enough.
As well as concerns about the complexities of Northern Ireland, there are serious constitutional concerns over why this clause should be deleted from the Bill. Clause 2 allows for modifications to the National Crime Agency specifically to allow the NCA to take on the counter- terrorism functions through the super-affirmative procedure. Clearly the Government recognise the sensitivity of the issue, and that is why they have chosen the super-affirmative procedure over the affirmative or, alarmingly, even the negative procedure, but the primary responsibility of any Government is to keep their citizens safe. Counterterrorism is a hugely significant part of ensuring citizens’ safety. It is currently undertaken by the Metropolitan Police who, over time, have built up considerable expertise and skills. If the Government wish to remove that responsibility and function from the Met, they would need to have a very strong case to do so. That case should be properly and fully examined by Parliament. There may even be a role for a Select Committee to look at the issue again. It should, at least, be a matter for primary legislation.
In Committee, the noble Lord, Lord Henley, relied on the response of the Home Affairs Select Committee to the new landscape of policing when it said that the Government “should consider” such a transfer of responsibilities after the Olympics. Consideration is one thing, because that consideration would allow the Government to make their case and would allow Parliament to exercise its judgment. However, the committee did not say that the Government should take the power to do so by way of a Henry VIII clause. In effect, we have here an enabling power for the Government for one of the most serious and crucial roles that a Government can fulfil and although it would have to be passed by super-affirmative order, that really is not the same as full parliamentary scrutiny through primary legislation. The Constitution Committee raised its concerns and described it as,
“an order-making power of the ‘Henry VIII’ type”.
Also raised in Committee was this comment from the Constitution Committee:
“The fact remains that the ordinary legislative processes of amendment and debate, and with it much of the substance of the role of the House of Lords as a revising chamber, would be circumvented. Clause 2 raises the fundamental constitutional issue of the proper relationship between parliamentary and executive lawmaking”.
The Constitution Committee looked at the issue around Clause 2 and what the test was to say if it should be undertaken by an order, albeit super-affirmative, or primary legislation. It said:
“The subject-matter of the proposed order-making powers—the allocation of functions and attendant responsibilities and accountabilities of counter-terrorism policing—is of great importance and public interest. The House will wish to consider whether the constitutionally appropriate vehicle is primary legislation”.
By ensuring that such changes could only be made by primary legislation, the Government would have the opportunity to make a clear, defined and first-rate case for the transfer of these functions. I am not convinced that they have yet done this, though that is the subject for a separate debate. The Joint Committee on Human Rights says on page 10, paragraph 15, of its recently published Legislative Scrutiny: Crime and Courts Bill:
“We are concerned about the lack of clarity that the wide order-making power introduces into the Bill. It is not clear, for example, which particular ‘counter-terrorism functions’ the clause contemplates. We do not see the necessity for including such a provision before the intended review of the current counter-terrorism policing structures in England and Wales has been carried out. In our view, the potential human rights implications of a decision to confer counter-terrorism functions on the NCA are sufficiently significant to warrant primary rather than secondary legislation, to ensure that Parliament has the fullest opportunity to scrutinise the possible implications. We recommend that clause 2 be deleted from the Bill”.
If the Government wish to have the power to move counter-terrorism to the National Crime Agency and to do so without primary legislation, they have to have strong arguments and reasons why. Your Lordships’ House is not unreasonable, it would listen to those arguments—but the National Crime Agency is in its infancy. It is a new body and the full details of how it will operate, its governance arrangements and its interrelation with other organisations have not yet been tested or even fully worked out. We do not even have the framework document, just a list of items that will go into it.
Despite my worries about funding, I have great expectations and confidence in the National Crime Agency. However, as legislators, Parliament should have the opportunity to access that before giving the power to transfer responsibilities that the Government are asking for today. There would be a question as to whether we were abdicating our responsibility if we did not take the opportunity to have full primary-legislation scrutiny of such an important and serious measure. Great care has to be taken when dealing with national security and the security of citizens, with full examination of all the facts and all the relevant issues. I do not consider that the Government have made their case sufficiently well to allow this House to give them such a wide-ranging power that they can, without full primary-legislation scrutiny but merely by super-affirmative order, transfer counterterrorism from the Metropolitan Police to the National Crime Agency, which is not yet even a fully functioning body and where there is still work to be done. That case has not yet been made. I beg to move.
Lord Blair of Boughton
My Lords, I declare my registered interest in policing. Last week, during the debates on the Justice and Security Bill, a number of noble Lords expressed the sentiment that national security is the first duty of government. I agree with that point of view. I put my name to this amendment because I believe that Clause 2 directly affects national security and so, in my view, is more important than any other clause in this section of the Bill.
The Metropolitan Police currently has—and has had for many years—primacy for counterterrorist law enforcement in all parts of the United Kingdom, including Scotland and Wales, although not Northern Ireland. The roles of the commissioner, the Assistant Commissioner for Specialist Operations—who, by agreement, is the ex-officio chair of the ACPO Terrorism and Allied Matters Committee—and of the National Coordinator of Terrorist Investigations, who are all Metropolitan Police officers, are understood and accepted by chief officers of police throughout the land, and by our colleagues in the security services and the Special Forces.
A whole regime of counterterrorist units outside London and national procedures has been developed, including the ceding to the Metropolitan Police of ultimate responsibility for CT executive operations. This is an effective and tried and trusted regime that allows for the transmission of intelligence and decisions about surveillance, interception and arrests to flow from the very local to the global, and vice versa, without crossing organisational boundaries—the curse of arrangements in so many countries, including the United States.
However, along with the noble Baroness, that is not the case that I make today. The decision as to arrangements for counterterrorist policing, including whether they should be passed from the Met to the NCA, is not a matter for the police or even for ex-commissioners of the police, but for Parliament. However, I suggest it should not be done this way. I understand the super-affirmative procedure laid out in Schedule 18, and it has many checks and balances, but it is essentially passive. It does not require debate in depth. The kernel of my argument for deleting this clause is that nothing is more important than national security, and in my lifetime no change more significant than this in the policing arrangements to protect our nation has ever been contemplated. A change in the NCA’s responsibility may be right, but it may not be. Lives—lots of lives—may depend on this piece of legislation. Such a decision deserves primary legislation, to allow the suggestion to be scrutinised, debated and amended by both Houses of Parliament.
Moreover, I am suspicious of the motivation behind such a change even being contemplated. He has been mentioned already in your Lordships’ House today, but from the very moment he entered office in 2008, the Mayor of London, Boris Johnson, began to speak to me, as commissioner, and to others, about the anomaly of the police of London having responsibilities outside London; not only for counterterrorism but for investigations in UK overseas dependent territories and the protection of prominent persons, including the Royal Family, wherever that might be. He and his senior advisers wanted those duties removed. The reason for that was not economy, or the security of London, but so that he and his successors had the untrammelled ability to select and dismiss the Commissioner of the Metropolitan Police without reference to the Home Secretary, who currently recommends the person to be appointed to that post to Her Majesty the Queen. I do not know where this idea has come from. I do not know whether the current idea is in some sense about tidying up—a conviction on the part of the Government. However, if it has entered government thinking in order to satisfy a mayoral ambition, that would be wrong both in practice and in principle. I would be grateful to be assured by the Minister that such ambition has no place in this legislation.
As I said at the beginning, I am not here arguing the case for the status quo, nor for change, but merely because I know—having spoken to them—that senior police officers who have current responsibility for these matters believe that the maximum public scrutiny should occur of the reasons for and against such a change. They are owed no less. The people who do this have a very dangerous and responsible job. They believe with me that, “It ain’t broke, so it doesn’t need fixing”.
Lord Condon
My Lords, I support this amendment. However, I must say at the outset that I am not interested in turf wars between the Metropolitan Police and the new NCA; I am not interested in protecting the status quo or over-arguing that it should remain with the Metropolitan Police. But I am passionately engaged in the constitutional issues which have been set out by the noble Baroness, Lady Smith, in moving the amendment. This is a hugely important matter that deserves primary legislation rather than an affirmative order, however comprehensive that seeks to be. I had the role for seven years of worrying about terrorism nationally. I worked very closely with all the agencies involved here and abroad. History tells us that more than 80% of terrorist incidents in this country happen in London. The fight against terrorism is as much about hearts and minds as it is about laser-like operations to combat terrorism. That hearts and minds approach involves great co-operation with local communities; in the London context, that has involved working with the Islamic community, with the mosques, the schools and the integration of neighbourhood policing in that preventive role. In London, therefore, there is a very inter-connected prevention and detection response to terrorism which has been built up over many years and in response to terrorism which has emerged from all around the world.
As I say, I am not interested in a turf war or in arguing for the status quo. However, this is hugely important for this country. The Constitution Committee has isolated why this is so important and why primary legislation is more desirable than the super-affirmative process. I support the amendment passionately.
Lord Dear
My Lords, I, too, declare a registered interest from my experience in policing. I would add in this context that I know quite a lot about terrorism, having suffered two determined attempts on my life at the hands of terrorism, once in this country and once in India. We are talking about the National Crime Agency. I have already spoken in your Lordships’ House on 1 November, giving some examples of the gravity of the issues with which the NCA is likely to be confronted once it gets under way. Its role in the whole architecture of policing will be not only important but critical. One should reflect on the fact that it will be responsible for international dimensions, so far as they interface with and affect the United Kingdom, certainly England and Wales: national, cross-border, inter-force and cross-boundary dimensions of crime. That is what we are talking about: whether the NCA is a proper receptacle for this additional responsibility.
Having served in the Metropolitan Police for five years, I, too, recognise the first-class service on counterterrorism that it has given the population, not only of London but of the whole United Kingdom, going all the way back over 100 years to the special Irish branch, which re-named itself the Special Branch; to the 1970s, when the IRA and the Provisional IRA began bombing in London and elsewhere; to the bomb squad, as it was then called; and to the counterterrorist commands that we see today. If there is any logic at all in counterterrorism, it has to be handled nationally—by definition, the National Crime Agency is national.
At some stage, an argument could well be advanced to move counterterrorism into the ambit and responsibility of the newly formed National Crime Agency, but clearly not yet; the National Crime Agency is not yet born. In its gestation period and infancy, I suspect that it would not be able to pick up and run with the complexities and importance of counterterrorism. But there might come a time in the future when that case can be made—I do not say that it necessarily will be made, but it might be. It seems both sensible and proper that we should be able to legislate to move counterterrorism from the Metropolitan Police to the National Crime Agency if that case is proved.
Like the noble Lord, Lord Condon, I, too, hope that we are not going to get into turf wars over this. The Metropolitan Police has proved itself, as I have already said, and it is right to put on record the high degree of skill that it has demonstrated over many years and indeed the enormous personal bravery of some of its officers on occasions, to whom we owe a great debt. However, I do not think that we should stand in the way of a properly proven logical rearrangement.
The nub of the issue is set out in the Joint Committee on Human Rights paper published on 20 November, which has already been alluded to. I take no position on this, other than to say that on balance—I suppose that I am taking a position; it is a very fine balance—I am prepared to go against the amendment and with the Government. However, I would need reassurance that were such a move to take place—not now but in the months, perhaps even years, to come—there will be a proper consideration of the reasons for such a move, so that one can be satisfied that the decision is being taken in the open, so far as the diktats of confidentiality and so on are concerned. If one follows that line of reasoning, there can be no objection to the clause as it stands.
I do not want to get into a turf war; that would be totally improper. Recognising the severity and the importance of the issues concerned, I simply make the point that a logical rearrangement in the future, if it is so proved, would be the way to go.
Lord Lloyd of Berwick
My Lords, my only excuse for intervening is that I was the author of the report on which the Terrorism Act 2000 was based. I was also the first Interception Commissioner and therefore had direct experience of the counterterrorism activities of both the Security Service and the Metropolitan Police.
I have not always agreed with everything that the noble Lord, Lord Blair, has said, but on this occasion I find myself in substantial agreement with him and also with what the noble Lord, Lord Condon, said on the constitutional issues involved. It may be that at some stage it would make very good sense for counter- terrorism functions to be transferred to the new agency, but not now and certainly not by order. I am not as comfortable on these matters as the noble Lord, Lord Dear. If the matter were put to a vote, I would vote with the amendment.
Lord Harris of Haringey
My Lords, the noble Lord, Lord Blair, concluded his remarks by advising the Government with the old adage, “If it ain’t broke, don’t fix it”. Of course, that is not quite what the Government are talking about here. The Government’s approach on a number of other issues is, “If it ain’t broke, take it to pieces anyway and see what happens”. However, the problem is that this clause, which my noble friend’s amendment will delete, is saying that if the Government decide that they want to change this, it will go through by the super-affirmative procedure without the full, detailed scrutiny of all the issues involved. That is why the Constitution Committee has highlighted the constitutional issue, and why so many noble Lords are concerned about it. If the Government were to propose this, it would be a very major issue with all sorts of ramifications. It is not something that would lend itself to a one-hour debate at 7.30 pm in your Lordships’ House.
Lord Taylor of Holbeach
My Lords, I have a job to steady the House on this issue. It is an important issue and I understand the commitment that noble Lords have shown in addressing it.
The functions of the National Crime Agency have been drafted in broad terms to ensure that the agency is able to tackle all the crimes that organised crime groups are involved in. However, it will also be important that the agency is able to react quickly to any changes in the threat picture. The creation of a new agency with a focus on national threats and the co-ordination of the UK-wide response naturally brings with it consideration of counterterrorism. We have always been clear that counterterrorist policing already has as it stands effective structures but that in time it might be right to consider these national arrangements in light of the reforms that have been made to the national policing landscape.
The maintenance of our highly regarded counter- terrorism policing effort is paramount. Any consideration of changes will not be undertaken lightly by any Government, nor is it wise to distract or disrupt the critical structures with unhelpful speculation. But it is also sensible that we give careful consideration to how we can best future proof the National Crime Agency for a potential role in counterterrorism in the future. The Government have been clear that there will be no wholesale review of the current counterterrorism policing structures in England and Wales until after the establishment of the NCA. Only then will it be right to look at how counterterrorism policing is co-ordinated across England and Wales and decide where it is appropriate for national responsibility to sit. Such a review should sensibly consider whether the National Crime Agency might play a role and, if so, what that role might be.
Lord Lloyd of Berwick
I am not sure I entirely understand this and it may be important. Is there to be a further review after the creation of the new agency and before these powers are exercised? If there was to be a further review, I might be satisfied.
Lord Taylor of Holbeach
Absolutely: I assure the noble and learned Lord that that is exactly the process that we are talking about. It may help noble Lords in this regard if I explain how government policy would be determined by a consultative process before any decision was taken. I thank the noble and learned Lord, Lord Lloyd of Berwick, for making that point.
Clause 2 provides for an order-making power so that the Secretary of State can modify the NCA in relation to counterterrorism functions, including by conferring or removing functions. The order-making power is limited to changing the functions of the National Crime Agency. It does not provide the power to change the functions of other organisations unrelated to the National Crime Agency or to close down organisations. Given the importance of such a decision in the future, before an order can be made the Home Secretary will be required to consult any bodies that she considers will be affected by the order. The order itself will also be subject to the super-affirmative procedure, which is an extended programme of scrutiny by both Houses and indeed the committees of the House.
As a number of noble Lords have pointed out, the Joint Committee on Human Rights yesterday published its report on the Bill and, among other things, raised the question of the mechanism for modifying the functions of the agency. Indeed the report, not unlike the debate today, called for the removal of Clause 2. I can appreciate the concerns of the committee in relation to human rights—these will indeed be important matters for the Government to consider. However, the statutory mechanism for modifying the functions does not diminish the obligations on the Government to give consideration to, and provide assurance on, a whole host of possible implications of a potential future decision. Human rights are only one aspect of a number of consequential effects of any change in policy in this area.
In addition to the Government’s considerations on any future changes, it is important that Parliament can give due time and consideration to any future decisions to modify the agency’s counterterrorism functions. The super-affirmative procedure set out in Schedule 18 will provide Parliament with the appropriate level of scrutiny should an order be made in the future. The House has been reminded of the view of the Constitution Committee on this matter. I will take the opportunity to remind the House of the conclusions of the Delegated Powers and Regulatory Reform Committee. In its report on the Bill it made no recommendation in respect of this power but did comment:
“The idea of adding to a statutory body’s functions by subordinate legislation subject to a Parliamentary procedure is well established”.
There is nothing new in this process that offends the traditions of Parliament.
Lord Harris of Haringey
Is there another example of where powers have been added to an existing body that completely distort the functions of that body and increase its activities by 50% or 100%? When the noble Lord answers that point perhaps he can also tell the House why the Government are so desperate to be able to do this by an order-making power rather than by coming back to the House with perhaps a small piece of legislation that has already had the very full consideration that he describes and which could be debated in the normal way.
Lord Taylor of Holbeach
A number of noble Lords will remember that in a previous role in this Government I took through the House the Public Bodies Bill where issues such as this occurred. I should emphasise that any bodies affected by any change will be consulted and the whole matter will be a matter of public debate. It is not going to be sprung as a surprise on an unwitting Parliament.
The noble Baroness, Lady Smith, mentioned Northern Ireland and I was grateful for the sensitivity with which she raised this issue. It is complex and I think noble Lords will appreciate that. We will have an opportunity on the ninth group of amendments to discuss it more fully. The order-making power recognises the important and different arrangements in respect of counterterrorism policing in Northern Ireland and the clause is drafted to respect those arrangements. Should an order be made to confer counterterrorism functions on the National Crime Agency in the future then the agency will require the prior agreement of the Chief Constable of the Police Service of Northern Ireland before it can undertake activities in Northern Ireland in relation to the prevention and detection of terrorism. This arrangement reflects and preserves how the operational relationships work at the moment in relation to counterterrorism policing in Northern Ireland.
It is critical that in creating the National Crime Agency, we do not limit its ability to respond to the changing threat picture of the future. For this reason, the statutory remit of the agency is broad, yet it provides a clear mandate for the agency. However, the clear remit conferred on the agency by Clause 1 and the flexibility of these arrangements go only so far and would not provide sufficient scope for the agency to take on a counterterrorism role in future. This order-making power affords the necessary flexibility to extend the agency’s functions to encompass counter- terrorism.
Lord Harris of Haringey
I am grateful to the noble Lord for giving way a second time. Would the order-making power enable the Government to change the Police Act 1996 which confers counterterrorism responsibilities on the Metropolitan Police?
Lord Taylor of Holbeach
The effect of the order-making power would be to make new arrangements for counterterrorism policing in the United Kingdom, if that was the decision that was made. I cannot state the matter more clearly. No decision has been made. I am arguing neither for nor against the change. I speak neither for the status quo nor for the future. I am seeking to provide through the Bill a mechanism by which future government decisions can be reflected after a due process of consultation with all bodies involved and after the parliamentary process.
We expect police and other partners to be fully involved in the review when the time is right. Any decisions should be evidence-based and preserve those features of the current arrangements that work well. No one is going to upset an arrangement that is fully satisfactory unless they can be certain that the alternative arrangement will be an improvement.
We all recognise that counterterrorism policing structures work effectively. It is right and proper that we do not rush decisions in relation to counterterrorism now. Equally we do not want to rule out the possibility of some change in the future. I therefore urge the noble Baroness to withdraw her amendment.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for explaining some of the reasoning behind the Government’s position. At the very beginning of his comments, he said something with which I entirely agree. If my handwriting was fast enough to catch his comments, he said, “In time it might be right to consider these national arrangements with changes to the national policing landscape”. I entirely agree with him on that point. It may well be the right thing to do, but the issue is the consideration that your Lordships’ House is able to give to those proposals. The Minister referred to a review on this issue. My understanding is that there is a Home Office review, but it seems a bit premature to make decisions at this stage to give a power to the Government to transfer the counterterrorism function from the Metropolitan Police to the new National Crime Agency without the full consideration in Parliament that a primary legislation route would allow. This is an extremely serious issue. As I said in my original comments, nothing is a more serious function of government than ensuring the safety and security of citizens.
I am not an expert on counterterrorism. I defer to the noble Lords, Lord Blair and Lord Condon, in the role that they have had. They expressed serious reservations about the transfer. They said that that is not the issue at stake today and made the case that it should be undertaken only after full scrutiny. The noble Lord, Lord Condon, said that he did not want to see a turf war between the Metropolitan Police and the National Crime Agency. The noble Lord is absolutely right in that. I do not think that there will be a turf war. My experience of those involved in counterterrorism responsibilities and security is that they want what is best. I think that they would have an enormous contribution to make if this House were discussing the issues and we had legislation before your Lordships’ House and the other place on the role of the security agencies and the role of those involved in counterterrorism in the Met. They would make presentations to your Lordships’ House and to committees—perhaps to a Select Committee—and that would be extremely valuable in considering this issue.
The noble Lord, Lord Dear, said that he felt that the NCA could, in time, be a proper receptacle for counterterrorism. It may well be, but I do not think that is the issue today. The issue is whether it is appropriate at this stage to give the Government the power to transfer counterterrorism from the Met to the National Crime Agency by a super-affirmative order. I personally think that the super-affirmative order is a clumsy legislative mechanism. Noble Lords who have read Schedule 18 might not be reassured by that. However, the route of primary legislation gives this House an opportunity to exercise its responsibilities in this regard.
To give the Government the power to transfer counterterrorism from the Metropolitan Police to the new National Crime Agency without full parliamentary scrutiny would be a serious step. The Constitution Committee has voiced concerns about it. The Joint Committee on Human Rights has said that this clause should be deleted from the Bill. The role of Parliament is properly to scrutinise legislation and properly scrutinise such serious matters. This clause will severely restrict the right of Parliament to scrutinise such a transfer of some of the most important responsibilities that the state holds. The Minister has sought to reassure us on this issue, but he has not been able to do so. I beg leave to test the will of the House.
Baroness Hamwee
“(3A) In the event that the Secretary of State determines any variation in strategic priorities for the NCA to take effect before the start of the next financial year, she shall lay a report before Parliament setting them out.”
Baroness Hamwee
Clause 4, which has the heading “Operations”, tells us that the director-general must have regard to strategic priorities, the annual plan and the framework document—all matters to which your Lordships have referred—and that before the beginning of each financial year the director-general must issue an annual plan setting out how he intends the functions to be exercised during the year. The importance of clarity about strategic priorities and other matters has been raised very clearly at every stage of the Bill by all sides, including by Ministers. The annual plan—a prospective document, if I can put it in that way—will tell us what is planned for the following financial year.
My amendment—it is a small amendment, following a matter which I raised at the previous stage—is intended to ask the Minister to give the House an assurance about how strategic priorities which have changed during the year will be taken into account. The amendment simply proposes that if the Secretary of State determines any variation in the strategic priorities, she will lay a report before Parliament setting out the variation. I beg to move.
Lord Rosser
My Lords, we have two amendments in this group. They would remove the requirement for the director-general to seek the consent of the Secretary of State and others to the annual plan, as currently provided for in the Bill. Instead, the requirement would be on the director-general to consult so far as concerns the Secretary of State and others. Although we obviously agree that the Secretary of State should retain ultimate strategic oversight of the National Crime Agency and determine the strategic priorities, it is vital to preserve the National Crime Agency’s operational independence from the Government. We understood that that is the Government’s intention, too.
Yet while the director-general is to set the annual plan for the operation of the National Crime Agency’s functions in pursuit of the laid-down strategic priorities, he or she will still be obliged to seek the consent of the Home Secretary before publication of this operational document. Such consent is not currently required, for example, by the Serious Organised Crime Agency. The director-general will be under a statutory obligation to ensure that the annual plan meets the strategic priorities determined by the Secretary of State. Bearing that in mind, why is it necessary for the director-general also to have the consent of the Home Secretary for what is surely an operational document?
That leaves the way open for interference by a Secretary of State in operational matters if their consent has to be obtained before publication of that annual plan, which sets out how the director-general intends to deliver the laid-down strategic priorities. I am speaking to my amendments on the basis of those points. I hope that the Minister will be able to address the specific points that I have made and explain why it is felt necessary that the Secretary of State should have to consent to the annual plan rather than be consulted on it by the director-general.
Earl Attlee
My Lords, I am grateful to noble Lords for explaining their amendments. Clause 4 already requires that the agency’s annual plan should be published and must include the strategic priorities determined by the Home Secretary. My noble friend’s Amendment 15 proposes that, in addition to the normal publication of the strategic priorities in the annual plan, the Home Secretary should lay a report before Parliament if she should determine any variation in the NCA’s strategic priorities out of sync with the annual plan cycle. I understand that my noble friend is rightly concerned to ensure that Parliament is kept abreast of changes to the strategic priorities. However, in practice, I do not think that there is any need for this amendment. The strategic priorities are not going to be changed every other month. They will be informed by weighty assessment of the threats from serious and organised crime.
The timetable for that assessment process will be in sync with the development of the annual plan, which will itself inform the agency’s annual financial planning cycle determining how it allocates resources. The annual plan really is the right place for the strategic priorities to sit. Indeed, it is highly likely that in some years, as has been the case for SOCA, the strategic priorities will remain the same because the strategic threat picture remains consistent. The only reason for changing the priorities mid-year would be if there was a seismic shift in the organised crime landscape, such as the emergence of a totally new threat. If that were to happen, Parliament would undoubtedly already be well aware of it, and in any case the Home Secretary would, of course, notify Parliament, whether through an Oral or Written Statement or by some other established mechanism. The Bill also provides for the agency’s annual report to be laid before Parliament and for such reports to include an assessment of the extent to which the annual plan for the year has been carried out. Parliament will be well informed about the strategic priorities and how the agency is delivering against them.
I turn now to Amendments 16 and 17, spoken to by the noble Lord, Lord Rosser. I understand the concerns expressed in Committee by the noble Baroness, Lady Smith, that the provision requiring consent to the annual plan before issuing it invites potential political interference in the operational independence of the agency. Let me first be clear on the purpose of the annual plan. It is intended as the means by which the director-general sets out how he intends to deliver the NCA’s objectives for the coming year, chief among which will be the Home Secretary’s strategic priorities. Using his operational expertise and an informed picture of the threat, he crafts a high-level plan for the National Crime Agency’s operational response to serious and organised crime over the coming year. He still, of course, has independent operational responsibility for decisions throughout the year about which individual operations to mount and how they should be conducted, as is clearly set out in Clause 4. Equally, it is crucial that he gains agreement to the annual plan from those to whom he is ultimately accountable at the national level for delivery against the strategic priorities.
Let me seek to explain why. First, let us consider the consent of the Home Secretary. I do not at all see this as political interference, as the noble Lord has suggested, but as a common-sense approach to guarantee consistency between what the Home Secretary needs the National Crime Agency to deliver, as set out in the strategic priorities, and what the director-general intends to deliver operationally in any given year. How can my right honourable friend be held truly accountable to Parliament for the agency’s performance in the fight against serious and organised crime if she has not publicly agreed the high-level direction set for the agency by the director-general in the annual plan?
Secondly, but no less importantly, let us consider the consent of the devolved Administrations. They will play an important role in shaping the fight against organised crime through consultation on the strategic priorities, ensuring that the priorities of the devolved Administrations in Scotland and Northern Ireland feed into the overall strategic priorities that the Home Secretary will set. Given their accountability for the fight against organised crime in Scotland and Northern Ireland, it therefore follows that the devolved Administrations should rightly have a role in agreeing those aspects of the annual plan which affect Scotland and Northern Ireland, not least to ensure that the agency’s operational priorities set out in the annual plan are consistent with the serious and organised crime priorities there.
I would go so far as to say that I am a little surprised that the noble Lord would want to water down this clear and important safeguard for the devolved Administrations. We will come to discuss Northern Ireland later, but I fully expect that the Northern Ireland Department of Justice will be stressing the important safeguards that we have included in the Bill to respect the devolution settlement in discussions in Northern Ireland, with this provision being a case in point. I know how strongly the noble Lord feels about securing arrangements in Northern Ireland that meet the needs of Northern Ireland but it rather seems that this amendment undermines that end.
In summary, given the clear mechanisms already in the Bill to ensure that the strategic priorities are published regularly, I am not persuaded that it is necessary to have a further procedure for laying the strategic priorities before Parliament “in-year”. Similarly, I am clear that the requirement of consent is an important level of assurance—for the Home Secretary, for the devolved Administrations, for Parliament and for the public—that the agency is heading in the right direction to spearhead the national response to serious and organised crime. I hope, therefore, that noble Lords will not press their amendments at the appropriate point.
Baroness Hamwee
My Lords, the Minister assures us that the activities will be in sync. Circumstances indeed might change. We all know about events—sometimes with a capital E. He takes the view that there would need to be a change only if there were a seismic shift in the security threat. I appreciate that, if that were the case, everyone would know that there had been a seismic shift. However, we are talking here about priorities. Prioritising means putting things in the order in which you have regard to them, or spend money on them, or whatever, and there could be a change in priorities in much less dramatic circumstances than my noble friend describes.
I shall not pursue the issue now. I hope, of course, that we never see a seismic shift. I beg leave to withdraw the amendment.
Baroness Hamwee
Baroness Hamwee
My Lords, Amendment 18 brings us to the issue of the framework document in Schedule 2. I am afraid that I am still having difficulty in following paragraph 4 of that schedule. Paragraph 4(1) tells us that the Secretary of State must consult the director-general in preparing a framework document and obtain his consent before issuing it. Paragraph 4(2) then states that the director-general’s duty to have regard to the annual plan does not apply in relation to the two functions I have just spelled out. My amendment refers to the functions of responding to the consultation and giving consent, the ones in question, and I ask the Minister whether it spells out what is provided—I am sure that he will tell me that it is not necessary—or whether the paragraph means something else. Perhaps the Minister will say also whether the annual plan or the framework document takes precedence in this context. I beg to move.
Baroness Smith of Basildon
My Lords, I shall speak to Amendments 19 and 20. I did not wish to raise this issue again—I apologise to the Minister for doing so—but I had hoped that the Government would have come forward with something a little more substantial than they have done to date. I am slightly confused and disappointed that not all noble Lords had been able to get access to the outline framework document earlier in the debate. I know the Minister intended that they should have access and it was disappointing that the document was not available.
Schedule 2 to the Bill stresses the importance of the framework document and outlines what it does and how it does it. The framework document explains almost everything about the National Crime Agency. It is a far-reaching document, is hugely significant and includes provisions for NCA finance and governance. The goalposts have been moved on more than one occasion since we first discussed this issue. We understood originally that we would have the document by this stage, but then it became only the outline. We are now at Report and all we have is the outline, which is inadequate for scrutiny. The fact that we have so little information about it may have had an impact on the previous decision in this House not to include counterterrorism within the National Crime Agency.
I looked through the document to see how much of an outline it really is. I have already referred to the issues around the NCA management board. The outline framework document basically lists what provisions will be in the framework document, including: that the director-general will establish and chair a management board; a description of the board; the composition of the board; and that further committees may be established by the board which must include audit and risk and nominations and governance. As for working in partnership, the document contains only a bullet point about the NCA’s use of immigration or customs facilities. As for scrutiny, transparency and information, there are three bullet points: the first is on scrutiny; the second on the duty to publish information in accordance with publication arrangements, which will be set out in an annexe and which we also have not seen; and the third is on public information handling and complaints.
Lord Taylor of Holbeach
My Lords, I shall come to the amendments proposed by the noble Baroness, Lady Smith, but will start with Amendment 18. When my noble friend Lady Hamwee debated the amendment in Committee with my noble friend Lord Henley she called it a googly and I shall have to make sure that my batting is in order to deal with it.
Paragraph 4 of Schedule 2, which my noble friend seeks to amend—although I sense a little probing in her amendment—sets out the Secretary of State’s duty to consult the director-general on the framework document and obtain his consent to that document before it is published. In drafting the paragraph it occurred to us that there was room for confusion. We have already established in Clause 4 that the director-general must have regard to the annual plan and the framework document. How, then, should he respond if a proposed revision to the framework document should be seen to be in direct conflict with the annual plan? I have the answer to that conundrum: the framework document deals with the ways in which the NCA is to operate—in other words, the how—and the annual plan deals with the what: the NCA’s planned activity for the coming the year. So in considering the framework document it is, admittedly, unlikely that the director-general should think to himself, “Dear me, that point about the NCA’s publication arrangements is not compatible with this year’s plan”. However, if he should happen to have such a thought, he should not let it influence him because it does not make sense to allow the annual plan that is issued for the current year to influence his judgment about whether the framework document arrangements are appropriate when they are meant to apply over the longer term. Hence we indicate in paragraph 4(2) that:
“The Director General’s duty to have regard to the annual plan in exercising functions does not apply in relation to”,
the function he is given in paragraph 1—namely the function of giving or withholding consent to the framework document. My noble friend’s amendment replaces the reference in paragraph 4(2) to the functions under sub-paragraph (1) with a more explicit reference to the director-general’s function of responding to the Home Secretary’s consultation and conferring, or otherwise, his consent. That is exactly the sense in which sub-paragraph (2) is intended to read, and since her amendment does not change the sense of the paragraph, I do not think that it is necessary to make it. However, I hope that I have been able to clarify the necessity of this provision.
Perhaps I may turn to Amendment 19 tabled by the noble Baroness, Lady Smith. It seeks to include the strategic partners among those who must be consulted on the framework document. I have to say to the noble Baroness that we remain unconvinced of the need to expand the list of statutory consultees. As has already been indicated by my noble friend Lord Henley, the framework document is a document that is drawn up by the Home Secretary and the director-general and they are the only two people who are required to have regard to it. Given that the intention is for the National Crime Agency to operate UK-wide, it is obviously right and proper that the devolved Administrations are consulted on the framework document because the NCA will be operating in their jurisdictions, but it appears to me to be wholly unnecessary to provide a statutory duty for the NCA to consult all in law enforcement about how it will arrange its own affairs. The last thing we want is a document that the Home Secretary and the director-general are required to have regard to but which is in effect an unworkable myriad of partners’ expectations laid at the agency’s door.
I turn finally to Amendment 20. This amendment returns to the question of whether the framework document should be subject to parliamentary approval. I apologise to noble Lords if they have not received the letter that my noble friend Lord McNally and I have written. A copy of the letter was sent to the noble Baroness and to the noble Lord, Lord Beecham, and I am sorry if they have not received it. I also sought to make arrangements for the document to be available in the Printed Paper Office today, but I have to say that when I went into the office shortly before I came to answer Questions here in the House, I noted that it was not there. I apologise to noble Lords for that because I take seriously my responsibility to try to inform them on these issues. However, I am pleased that we do at least have the outline framework document to inform our debate today.
This is going to be an important document that deals with the way in which the NCA is to operate. It is also clearly subsidiary to the actual provisions in the Bill. This is evidenced by the outline which I have sought to provide to noble Lords. On that subject, I note the disappointment of the noble Baroness in the document I have supplied, but I put it to noble Lords that it would be premature, at this stage in the legislative process, to produce a full draft of the document. The contents of the document should be informed by the parliamentary debates on the Bill as well as by the detailed work in progress to build the agency. But although it is only an outline of the final document, it does move us forward. It sets out clearly what the Government expect the framework document to cover and what it will not, a matter on which Peers were seeking clarity. It also answers a number of questions put by noble Lords, and in particular it gives an outline of the NCA’s management board arrangements, underlines the fact that the CEOP six principles will be upheld in the NCA, and clarifies that the director-general is expected to notify the Home Secretary and the relevant PCC of any use of directed tasking or directed assistance powers.
By sharing the outline I hope that I have given noble Lords some new information and I will be very interested to hear their comments, which will help to inform our ongoing work on the framework document. However, given that the outline clearly shows that the document will be subsidiary to the legislation and that it will be essentially an agreement between the Home Secretary and the director-general about how they will do their jobs in respect of the NCA, I do not think that it is either necessary or proportionate to require parliamentary approval. I am sure that had the Delegated Powers and Regulatory Reform Committee taken a contrary view, it would have done so, but we can take it from the committee’s report on the Bill that it was evidently content for this document to be laid before Parliament and no more.
In summary, while the framework document will clearly be an important procedural document for the director-general and the NCA, it is wholly secondary to the legislation and directly impacts only on the NCA and the Home Secretary. I therefore do not consider it necessary to require parliamentary approval or to expand the statutory consultation required for the document. I trust also that my noble friend Lady Hamwee is now clear about the relationship between the annual plan and the framework document, and the director-general’s functions in that regard. On the basis of my reassurances on this matter, I hope that my noble friend will be able to withdraw her amendment.
Baroness Hamwee
My Lords, I think the frustration over the outline framework document has arisen from the fact that, until discovering by accident only a matter of hours ago that the outline does exist, some of us had assumed that it did not. Not having had the letter, some noble Lords assumed that that was the case. However, these things can of course go wrong from time to time. One understands that. The other frustration is that the framework document, as the Minister has just confirmed, deals with ways in which the NCA is to operate. The outline is still more of a “what” than a “how”. It did make me think that it was worth your Lordships pursuing some of these points. The six principles of CEOP were spoken to with some passion by noble Lords at the previous stage, and they have made their way into this outline. I think the Minister can assume that some of us will be encouraged by that on other issues in the future.
As regards my own amendment, I am grateful for the explanation, which I did follow. It is a matter not only of my inability to bowl googlies—which I have never been able to do, and will never be able to do —but also of my lack of understanding beforehand. I thank my noble friend for the explanation and I beg leave to withdraw the amendment.
Lord Rosser
“(c) may be made only if the Director General has first notified the Police and Crime Commissioner responsible for the totality of policing in that area”
Lord Rosser
My Lords, the purpose of this group of amendments is to place a duty on the director-general of the National Crime Agency to notify police and crime commissioners before making a request to a chief constable to perform a task under Clause 5. Likewise, a similar duty is placed on a chief constable to notify the police and crime commissioner before making a request of the director-general of the National Crime Agency to perform a task. The amendments also place a duty on the director-general to “make every reasonable effort” to notify the appropriate police and crime commissioner before issuing a direction to the chief constable for that police and crime commissioner’s area.
We had a debate on this issue in Committee when an amendment was moved referring to the director-general consulting the police and crime commissioner responsible for the policing of an area. The amendments today refer to notifying the police and crime commissioner. Without wanting to repeat everything that was said in Committee, one has to go over the argument again to some extent. A police and crime commissioner for a police area has a statutory duty to secure the maintenance of the police force for their area, to ensure that the police force is efficient and effective and to hold the chief constable to account for a wide range of duties and responsibilities, including the effectiveness and efficiency of the chief constable’s arrangements for co-operating with other persons in the exercise of the chief constable’s function. The police and crime commissioner will also be responsible for issuing a police and crime plan, which is required by law to set out a number of matters including the policing of the police area which the chief officer of police is to provide. However, it currently appears to be possible, under the terms of the Bill, for the director-general of the National Crime Agency to come to an agreement with the chief officer of a UK police force for that chief officer to perform a task of unspecified magnitude, scope or significance in relation to resources or impact, on behalf of the director-general or, alternatively, for the director-general of the National Crime Agency to perform a task of unspecified magnitude, scope or significance on behalf of the chief officer of a UK police force without any apparent duty in either case even to tell the elected police and crime commissioner, despite the significant statutory responsibilities the police and crime commissioner has in relation to their police force.
If the director-general of the National Crime Agency was requesting the chief officer of a UK police force to carry out a task which could well have an impact on the efficiency and effectiveness of the police force in question or on their ability to deliver or adhere to the police and crime plan, one would have thought that it was a matter on which the director-general of the National Crime Agency should be required at least to notify the police and crime commissioner. Likewise, if the chief officer of a UK police force found it necessary to request the director-general of the National Crime Agency to perform a task on behalf of or in support of that police force, there should be a duty on the chief officer first to notify—that is what the amendment now calls for—the police and crime commissioner who, after all, might want to satisfy himself or herself that this was not a task that their own police force should be competent and capable of performing and that the request to the director-general was not, in reality, seeking to cover up a weakness in the performance of their police force.
When we debated this issue in Committee, the Government’s response was that we were putting forward amendments that would put at risk the operational independence of chief constables. We said at the time that that seemed a bit rich. Bearing in mind that our amendments state “has first notified”, it would be stretching it a bit if the Minister were to tell us again that we are putting at risk operational independence. Clearly, if directions are being issued to a chief constable by the director-general of the National Crime Agency they could well, under the terms of the Bill, be of a magnitude, size and scope that could call into question the ability of that chief constable to adhere to or deliver the plans and strategic objectives of the police and crime commissioner.
It was also said in Committee that if the director-general of the National Crime Agency had to consult the police and crime commissioner that would cause delay and it might be an emergency. We have sought to address that issue, unlikely though it would be to arise, by once again referring in the amendment to the director-general having to make “every reasonable effort” to notify the police and crime commissioner before issuing a direction to the chief constable for their particular area.
I hope that the Minister’s response will be more helpful than the one we received in Committee. In the wording of the Bill there are no parameters laid down which means that, on the key issue of the director-general of the NCA being able to come to either a voluntary arrangement with or, if he feels it necessary, give a direction to a chief constable, this could be of unlimited scope and have a very considerable impact on the ability of that chief constable to deliver the strategic objectives of the police and crime commissioner for the area. That there is no requirement at all for the director-general even first to notify the police and crime commissioner could, indeed, have an effect on the ability to deliver, for a period of time, effective policing in that area. That is the purpose of the amendments. I hope that the Minister will be able to give a more sympathetic response than the one we received in Committee. I beg to move.
Lord Harris of Haringey
My Lords, I have been trying to work out how this Bill was prepared and I can only assume that there was collective amnesia in the part of the Home Office that was preparing it about their other major piece of legislation, which created police and crime commissioners. The mentions of police and crime commissioners in this Bill are few and far between. Had it not been so vigorously resisted by the Minister in Committee, I would have assumed that it was a simple drafting error not to include that the police and crime commissioner should be informed or, better still, consulted—although today’s amendment possibly moves us away from that—about a possible direction or requirement for the use of resources in their area.
Has the Home Office really thought about the practical politics that will arise and the consequences that may flow from failing to put this very simple provision into the Bill? Put yourself into the position of someone who has been elected earlier this month to the position of police and crime commissioner. They sit there with all the majesty of their electoral mandate: many of them have had as much as 4% of the electorate in their areas voting for them, so they know that they have the people behind them. It is clear that they have a substantial, legislative obligation on behalf of the communities they represent, whether it is the 4% or all 100% of them, to hold the chief constable to account for the use of policing resources in that area. That is what the legislation that we spent so many happy hours debating a year or so back was all about. Yet here is a provision in the Bill which enables the director-general of the National Crime Agency to require the use, either by direction or agreement, of police forces in their area.
I can conceive of circumstances in which police and crime commissioners have been elected having said very clearly that their prime focus is going to be on local crime concerns in their particular patch and that they want “zero tolerance”—a number of them did in fact say in their manifestos and websites that they wanted zero tolerance of crime on the streets of their particular area. However, they are suddenly told—or they find out, perhaps because their chief constables tell them, they read it in the newspapers or hear some gossip—that a substantial proportion of the local resources that they thought were going to be devoted to keeping street crime and burglary down in the areas of their mandate is being diverted to some, no doubt very important, serious crime operation. You are likely to then get precisely the sort of row about operational policing that we have said we do not wish to see between police and crime commissioners and chief constables, because police and crime commissioners will suddenly discover that the resources that they thought were being devoted to dealing with crime in their patch are being diverted to another—no doubt very worthy and important—area.
The very simple, practical and political—with a small “p”—way of doing this is to have an obligation on the director-general to at least inform, if not consult, the police and crime commissioner. That might perhaps ensure that, because they hear it first from the National Crime Agency—the people who are making the request—they have an understanding of it. That is much more likely to be acceptable to a police and crime commissioner than their hearing about it from some other source. I wonder why the Home Office, having devoted so much energy, effort and even money into having police and crime commissioners elected, has then excluded them from this part of the Bill. Unless my noble friend’s amendment is passed, you are going to have a situation in which you almost encourage conflict and a reaction from police and crime commissioners saying, “I do not wish the see the resources of my police force area being diverted for those national or other purposes”. You will have created a conflict, because the police and crime commissioner does not have the right to be informed by the National Crime Agency of what is being done.
Maybe the Minister will tell us in a couple of minutes that his expectation is that the chief constable will explain it to the police and crime commissioner. It looks as though that may well be what is in the Minister’s brief. Of course there will be discussion and dialogue, but the common courtesy of the director-general of the National Crime Agency going to the police and crime commissioner to say, “I am about to make this request”, or, “I am asking your chief constable for this”, and, “These are the reasons”, will smooth the passage and make this work better. I cannot understand why, for the sake of a simple telephone call or e-mail, this has been omitted from the legislation. The reality is that it would not delay things, but would make them less liable to create conflict between the police and crime commissioner and the chief constable who has accepted the request from the National Crime Agency director-general, with the police and crime commissioner grandstanding about how he or she is fighting for the people of his or her area and about not having police services diverted to other functions because those services are there for the people of his or her community.
Lord Taylor of Holbeach
My Lords, that was an interesting contribution from the noble Lord, Lord Harris of Haringey, on this series of amendments. I am pleased that the noble Lord, Lord Rosser, has drawn these amendments to the attention of the House again—they are in a somewhat changed form but really representing the same point as before—because it draws attention to the tasking responsibilities and the arrangements between the National Crime Agency and UK police forces. It is important to stress—and I think I can reassure the noble Lord, Lord Harris, on this—that chief constables head up the operational arrangements for police forces and that the director-general deals with the operational arrangements within the NCA. I am afraid that I take the view that he thought I would take. I am sure that these are perfectly proper roles. We will come on perhaps to talk about how relationships between PCCs and chief constables might develop. They are not part of the Bill but they are associated with the issues that these amendments cover. I will say that these amendments do not apply to Scotland or Northern Ireland, where they do not have PCCs.
Lord Rosser
I thank the Minister for his response and also thank my noble friend Lord Harris of Haringey for his most effective contribution to the short debate. In moving my amendment, I made the assertion that the kind of task that the director-general might be seeking a chief constable to perform on behalf of the director-general could be one of unspecified magnitude, scope or significance in relation to resources or impact. I note that, in the Minister’s response, he did not seek to give any assurance that these tasks would be minor or not have an impact on resources. I therefore assume that the point that I made, that these tasks could be of considerable magnitude and have a significant impact on resources, was a valid one. I am quite sure that if it was not, the Minister would have been very quick to tell me that I had got it wrong.
Bearing in mind his silence, or his lack of response to the claim that I made, if the kind of task that the director-general of the NCA might seek to get an agreement with a chief constable to perform could have a significant impact on resources and their use, it seems a bit of a mystery to say that there would be no requirement to even first notify the police and crime commissioner, when clearly that could have an impact on the objectives that that police and crime commissioner has set. The Minister has not explained in his response why that should not be the case, bearing in mind that he has not contested the point that these arrangements and agreements between the director-general and the chief constable could have an impact on resources and that they would not be merely covering minor issues. The Minister has sought to say that these agreements might be things that do not cover anything of great significance on a day-to-day basis, and to ask why there would therefore be a need to notify the police and crime commissioner. What he has not refuted, however, is that the agreements that the director-general of the NCA might seek to make with a chief constable could have a significant impact on resources. Yet, even so, the Minister resists the amendment, which is only to say that the police and crime commissioner should be first notified.
I appreciate what the Minister said about the framework document, but that does not cover all the issues raised in this amendment. It does not cover all the agreements that might be reached between the director-general and a chief constable: far from it. It does not cover them all and the Minister has not really given a proper explanation as to why that is the case. However, I have to make a decision on whether to pursue these amendments or otherwise. I am disappointed with the responses; I do not think that we have had a complete answer to the legitimate issues that my noble friend Lord Harris of Haringey and I have raised, but there it is. We cannot force a Minister to respond to the arguments that are put forward. In view of that, I beg leave to withdraw my amendment.
Lord Taylor of Holbeach
(a) the crime-reduction function,(b) the criminal intelligence function, or(c) functions conferred by the Proceeds of Crime Act 2002.”
Lord Taylor of Holbeach
My Lords, I am pleased to propose this short series of government amendments. Intelligence will sit at the heart of the National Crime Agency and will drive its crime-fighting activity across its operational commands. The NCA’s intelligence hub will be a vital component of the fight against serious and organised crime. It will gather intelligence to identify targets and threats and will enable the agency to direct operational activity against the most serious threats to the public.
The success of the NCA’s intelligence hub will be based on its ability to access and analyse information. Recent serious crimes have strongly highlighted the need for strengthened information-sharing agreements across government and the law enforcement community. Schedule 3 already contains a duty on UK police forces to keep the NCA informed of any information they hold which appears to be relevant to the exercise of NCA functions and to disclose this information on request.
However, we know that organised crime gangs come into contact with a number of different agencies. They are involved in corruption, using fraudulent passports and in some cases amassing property empires, as well as gun running and drug dealing. We believe that the public can be better protected from the damaging effects of serious and organised crime by improving the intelligence picture across a wide range of organisations. As a result, Amendment 25 will extend the existing duty on the police to the Serious Fraud Office, the UK Border Agency and the UK Border Force, to increase the information flows between the NCA and a wider range of government bodies.
Amendments 31 and 120 complement Amendment 25 by conferring a power to add to the list of bodies subject to the information-sharing duty by order. Any such order would be subject to the affirmative procedure. This is necessary for two reasons. First, it is a reality that the remit and structures of relevant agencies and bodies change over time; for example, in response to the changing nature of a threat. Secondly, if an organisation consistently refused reasonable and appropriate requests for information, to the detriment of collective law enforcement efforts to respond to serious criminal activity, it would be right and proper for the Government to have the means to consider, through secondary legislation, whether that body should be subject to the strengthened duty to share information.
Of course, information sharing needs to be balanced with safeguards to protect personal and other sensitive information. Schedule 7 to the Bill sets out a number of important restrictions which will apply to the onward disclosure of information by the NCA. Amendment 36 is a drafting amendment which makes it clear beyond doubt that those restrictions on onward disclosure apply to the duty to share as well as to the permissive gateway in Clause 7.
Finally, Amendment 24 brings the duty on UK police forces in Schedule 3 into line with the new duty on the Serious Fraud Office, the UK Border Agency and the UK Border Force. This means that the duty on UK police forces is also now restricted to the crime reduction, criminal intelligence and the Proceeds of Crime Act functions conferred on the NCA. I beg to move.
Lord Taylor of Holbeach
“Duty to keep NCA informed: government bodies4A (1) Each specified body must keep the Director General informed of any information held by that body which—
(a) is held in connection with the exercise of a relevant function of that body, and(b) appears to that body to be relevant to the exercise by the NCA of—(i) the crime-reduction function,(ii) the criminal intelligence function, or(iii) functions conferred by the Proceeds of Crime Act 2002.(2) Where a specified body informs the Director General of such information, that body must disclose to the NCA any of that information which the Director General requests that body to disclose.
(3) This paragraph does not require a specified body to keep the Director General informed of information which appears to that body to be information obtained (whether directly or indirectly) from the NCA.
(4) This paragraph does not require the Director of the Serious Fraud Office to keep the Director General informed of, or to disclose to the NCA, any information obtained under section 2(2) or (3) of the Criminal Justice Act 1987 (information which the Director of the SFO may require a person to produce etc).
Duty to keep government bodies informed4B (1) The Director General must keep each specified body informed of any information obtained by the NCA in the exercise of any NCA function which appears to the Director General to be relevant to the exercise by that specified body of any relevant function for the purposes of carrying out activities to combat crime.
(2) This paragraph does not require the Director General to keep a specified body informed of information which appears to the Director General to be information obtained (whether directly or indirectly) from that body.
Meaning of “specified body” & “relevant function”4C In paragraphs 4A and 4B—
(a) “specified body” means a body specified in the first column of this table;(b) “relevant function”, in relation to such a body, means a function that falls within the functions specified in relation to that body in the second column of this table.
Specified bodies | Relevant functions |
|---|---|
The Secretary of State. | Functions relating to immigration, nationality or customs. |
The Director of Border Revenue. | All functions. |
The Director of the Serious Fraud Office. | Investigatory functions (but not any prosecution functions).” |
“( ) Before giving such a direction, the Department of Justice must consult—
(a) the Northern Ireland Policing Board; and(b) any other persons the Department considers it appropriate to consult.”
Baroness Smith of Basildon
My Lords, in Committee I raised concerns, with other noble Lords, about the application of this legislation to Northern Ireland, with specific reference to counterterrorism. Your Lordships have now voted to remove that particular clause to the Bill and so those issues around counterterrorism no longer arise. However, there are other issues and I discussed this matter with my honourable friend Vernon Coaker, the Shadow Secretary of State for Northern Ireland, in the other place. He was equally perplexed by this particular clause. It would be helpful if the Minister could offer some guidance.
In Schedule 3 to the Bill, paragraph 11 is about directed assistance by the National Crime Agency to Northern Ireland; paragraph 12 is about directed assistance to the NCA from Northern Ireland. I am unclear why the qualifications for direction differ between the two. If assistance is to be given to Northern Ireland, the direction can be given only if,
“it appears to the Department of Justice that it is appropriate for the Police Service to receive directed assistance from the Director General”,
And,
“if the Secretary of State consents”.
I assume that that is the Secretary of State from the Home Office agreeing to directed assistance going in. Perhaps the Minister can answer when he responds. However, for directed assistance to the National Crime Agency from Northern Ireland, there is a consultation process: it would consult the Department of Justice, which consults the Northern Ireland Policing Board and,
“any other persons the Department considers it appropriate to consult”.
However, if Northern Ireland is to receive such directed assistance, there is no consultation with the Policing Board or any other persons. It would be helpful to understand why the Minister thinks it is appropriate to have these different arrangements for each in place.
I beg to move.
Lord Taylor of Holbeach
I thank the noble Baroness for raising these issues. Of course, it is important that we consider the impact of this legislation on Northern Ireland, which the noble Baroness and I have discussed.
It is critical that the National Crime Agency has a UK-wide presence, reflecting the reach and threat of organised crime. In providing a UK-wide presence it is equally important that the arrangements for the National Crime Agency respect the devolution of policing and justice in Scotland and Northern Ireland. As the activities of the National Crime Agency touch on a mix of transferred, reserved and excepted matters in Northern Ireland, the provisions require the consent of the Northern Ireland Assembly, in so far as they cover transferred matters.
As the House is aware, securing legislative consent is a devolved process. The Home Office and the Northern Ireland Office are supporting the Department of Justice in Northern Ireland to take forward these discussions. I am pleased to say that David Ford and his department are engaged in constructive discussions with the parties in Northern Ireland with a view to securing a collective discussion in the Northern Ireland Executive Committee and thereafter in the Assembly.
I recognise that progress has not been as quick as we might have liked. I also know that the interests of the noble Baroness, Lady Smith—like those of the Government—are firmly focused on ensuring that the National Crime Agency will have a UK-wide presence but that the arrangements work for Northern Ireland. I share the House’s disappointment with the slow progress, but it is critically important that the Northern Ireland Executive and the Assembly are reassured that, through proper scrutiny, the proposals will work in Northern Ireland.
I also appreciate that the Bill is nearing the completion of its passage through the House and that there is some concern that the House is being asked to endorse the NCA provisions before the Northern Ireland Assembly has had an opportunity to debate the legislative consent Motion. However, we have until the last amending stage—Report—in the other place to secure legislative consent. Should amendments be made in the other place, this House will of course have an opportunity to consider them in the spring.
I know that the House might have liked more details of how the negotiations are going, but I hope that noble Lords will understand that we should give David Ford the necessary space to continue his discussions. I am sure that he will wish to take note of what the noble Baroness has said in this debate. I can undertake to update her on progress in due course, but for now I ask her to withdraw her amendment.
I will turn briefly to the amendment at hand, which concerns paragraph 11 of Schedule 3 and seeks to provide additional consultation requirements to the Department of Justice in Northern Ireland before directing the director-general of the National Crime Agency to provide assistance to the Police Service of Northern Ireland, subject to the consent of the Home Secretary. This is not unlike the additional consultation arrangements provided for under paragraph 12, whereby the Department of Justice in Northern Ireland must consult the Northern Ireland Policing Board and others before issuing a direction to the Police Service of Northern Ireland to assist the National Crime Agency. This is an important protection to the backstop arrangements for directed assistance from a devolved body—in this case, the Police Service of Northern Ireland—to the National Crime Agency.
Among its other responsibilities, the Northern Ireland Policing Board sets the Policing Plan for the Police Service of Northern Ireland and as such has an interest in how devolved policing resources are being deployed, particularly if diverting resources meant that the objectives of the Policing Plan would not be achieved. It is with a view to that relationship and the interests of the Policing Board that additional consultation has been provided where the direction impacts on the provision of assistance by a devolved body. However, this will not be the case when assistance is provided by the National Crime Agency to the benefit of the Police Service of Northern Ireland.
I am sure that this amendment is seeking to provide an additional safeguard to Northern Ireland, but these further consultation requirements will only add further bureaucracy and delay to the National Crime Agency providing assistance to the Police Service of Northern Ireland in the unusual event that a direction is used. Furthermore, as I have indicated, discussions on the arrangements for the National Crime Agency are ongoing in Northern Ireland and it will be for the Northern Ireland Executive and Assembly to consider whether the arrangements are appropriate and what changes may be needed, if any. Only at that point will it be right for the Government to consider if changes are needed to the Bill—rather than for Westminster to decide what is in the best interests of Northern Ireland.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for talking about the wider context as well as the specific amendments. Although some of the contentious issues will have been removed with the deletion of Clause 2, he is quite right that some will remain and a legislative consent Motion will still be required.
I am grateful for the Minister’s offer to start to update me on the progress of negotiations. He will be aware that I have been asking for such information and my noble friend Lord Rosser tabled a parliamentary Question regarding the implications of this Bill for Northern Ireland. There has not been much information from the Government, which is frustrating because this matter has to be resolved.
I am not clear what the implications are for the Bill as a whole if a legislative consent Motion cannot be obtained. Perhaps the noble Lord could look into this and give us some advice on that. I am happy for him to write to me on that point. This underscores how important it is to reach this agreement with David Ford, the Minister of Justice, and with the Northern Ireland Executive as a whole.
I am grateful for the Minister’s explanation of why he is resisting my amendment—I am used to his explanations of why he is resisting my amendments. He will be pleased to hear that I do not intend to press this matter to a vote, but I would like to read his comments in Hansard and share them with my honourable friend Vernon Coaker in the other place. I beg leave to withdraw the amendment.
The Chairman of Committees (Lord Sewel)
I have to inform the House that if Amendment 28 is agreed to, I cannot call Amendment 29 by reason of pre-emption.
Amendment 28
Baroness Hamwee
Baroness Hamwee
My Lords, when one hears the Lord Chairman remind the House of the point of pre-emption, one feels one should start the speech with, “I wish”.
This group of amendments deals with payments between the NCA and police forces in the event of tasking, and Amendment 28 is about how the payment is determined. Paragraph 29(1) provides that if the parties cannot agree on the amount to be paid then it is a matter for the Secretary of State to determine. I had a similar amendment at the last stage, and the noble Earl, responding for the Government, explained that determination was not on a case-by-case basis but referred to overall principle. I still have some difficulty in reading the paragraph that way, because it refers to the “amount”. If it referred to the absence of agreement as to the formula or the calculation, I would understand it.
The outline of the framework document deals with the question of tasking. The basis for the determination should be in the framework document. That is what my amendment would provide. Fees and charges are mentioned, but those seem to be a different issue. At the moment, and of course continuing, we will have a position where there is mutual aid between police forces. As I understand it, payment for mutual aid is a matter that is in the public domain—I believe that ACPO deals with it. There should be a similar approach, and the schedule should not allow for case-by-case determination, even if that is not what is envisaged, because as it is drafted it would be allowed for. I beg to move.
Lord Rosser
My Lords, we have two amendments in this group, and I suspect that the purpose of our amendments is not dissimilar to the intention behind the amendment moved by the noble Baroness, Lady Hamwee.
The Bill appears to provide for the Secretary of State to act as final arbiter over disputes arising between, for example, the National Crime Agency and police forces over compensation for resources provided under voluntary or directed assistance. It is not appropriate for the Secretary of State to have such a role, because it could introduce a potential conflict of interest. The Secretary of State is responsible for the National Crime Agency budget, but police force budgets will be under the control of the police and crime commissioner, so one could argue that the Secretary of State has an interest in the outcome of a decision over who should be paying what in any compensation that is required.
Our amendments provide for an independent advisory panel, rather than the Secretary of State, to arbitrate payments, which is not going down quite the same road as the amendment that has been moved by the noble Baroness, Lady Hamwee. Certainly, the objective behind our amendment—perhaps the Minister will have an alternative solution—is to say that the Secretary of State, having responsibility for the National Crime Agency budget, could be deemed to be an interested party. Therefore, the Secretary of State should not act as final arbiter over disputes, but some other means should be used to make that decision. Some other body, organisation, procedure or process should be used to resolve disputes that arise, rather than it being in the hands of the Secretary of State, for the reasons that I have mentioned.
Earl Attlee
My Lords, I hope I can persuade my noble friend Lady Hamwee and the noble Lord, Lord Rosser, that these amendments are unnecessary. First, I will emphasise that the National Crime Agency will build on the policy of the Serious Organised Crime Agency, which is not to charge law enforcement partners for tasks, assistance and facilities unless agreed with partners beforehand; for example, in exceptional circumstances.
This means that law enforcement partners will have the opportunity to draw on the National Crime Agency’s specialist services, including investigative, overseas, cyber, forensic and civil recovery assets, free of charge. The National Crime Agency will make intelligence available to partners on a routine basis, which will result in more effective deployment of partner resources. For example, the National Crime Agency’s intelligence functions will ensure that multiple partners do not investigate the same criminals or gangs without being aware of each other’s activities.
Baroness Hamwee
My Lords, perhaps I can use this moment to ask if—possibly not immediately, but shortly—the Whips could clarify how far we will go on this evening. I was told that we would finish after disposing of Amendment 78, but the Annunciator is talking about Amendment 107A, which may cause some of us a little panic.
Earl Attlee
It would cause me a heart attack. Let us wait for some clarity to arrive.
Baroness Hamwee
I thank the Minister. Perhaps we should calm down, or even, “Calm down, dear”.
I do not suggest, with my amendment, that there should not be a backstop if the parties cannot reach agreement, but it is better to have a formula. My amendment does not specify the detail of the arrangement because I was doing the Government the courtesy of allowing them to put that into the framework document when they come up with it. I have heard what the noble Earl has said and beg leave to withdraw my amendment.
Lord Taylor of Holbeach
“Duty to provide information etc: power to amend specified bodies etc30A (1) The Secretary of State may, by order, amend paragraph 4C of this Schedule by making any of the following kinds of provision—
(a) provision adding a person to the specified bodies in the relevant table;(b) provision specifying in the relevant table one or more relevant functions in relation to—(i) the Secretary of State, or(ii) a person added to the specified bodies by virtue of sub-paragraph (a);(c) provision removing from the relevant table provision made by virtue of sub-paragraph (a) or (b).(2) But the Secretary of State may not add any of the following to the specified bodies—
(a) a person operating only in Scotland;(b) a person operating only in Northern Ireland.(3) Before making provision under this paragraph which adds a person to the specified bodies, the Secretary of State must consult that person.
(4) In this paragraph “relevant table” means the table in paragraph 4C.”
Baroness Smith of Basildon
My Lords, I raised this issue in Committee with the then Minister, the noble Lord, Lord Henley. The debate got into a pickle and he was not able to answer all my questions. He kindly wrote to me, which was helpful up to a point but did not allay my concerns over this particular clause. My Amendment 31B seeks to delete paragraph 5 of Schedule 5, which is about the advisory panel. I admit that even after the debate in Committee and the letter from the noble Lord, Lord Henley, I remain really puzzled by the purpose of both that paragraph and the clause.
The Bill before us allows for an advisory committee to be set up to advise the Secretary of State once the director-general has been appointed as to the operational responsibilities that the director-general should have. I fully understand that not all candidates and not necessarily every director-general who will be appointed for however long it is will have all the skills and expertise in the wide-ranging areas of responsibility that the National Crime Agency will have. But the advisory panel, if it is the panel of experts that I am told it will be, is not to be set up prior to interview and so will not be able to ascertain with the Secretary of State what additional support a potential director-general would need. Instead, the Secretary of State can appoint an advisory committee after somebody has been appointed—although she or he does not have to set up such a panel—to give advice on the operational responsibilities.
When the then Minister responded previously, he said that the Secretary of State for the Home Office,
“will make an assessment of the director-general’s suitability and capability to exercise the operational powers in any given case. It might be that the advisory panel, through its chair, could then assess whether the director-general was adequately trained to exercise those operational powers”.—[Official Report, 20/6/12; col. 1824.]
So the Secretary of State, presumably prior to appointment, decides that the director-general is capable and suitable to have these operational powers. Then, having made a decision, she—one day we might have a he again—may ask an advisory panel to advise on what training is required. That is where this starts to break down. If this role is so important as to give the Secretary of State that advice, why is it an ad hoc body?
The reason given in the letter to me from the noble Lord, Lord Henley, was basically, as I have pointed out, about what a wide-ranging group of responsibilities there are and that it would be unusual and unlikely to find somebody who had the capacity and ability in all the areas they would need to have. But before the agency is set up, the Secretary of State has appointed a director: Keith Bristow. Clearly she is entirely confident that he has all these capabilities—although we are not clear what some of those capabilities could be because we have not yet seen a framework document—because she has not set up an advisory panel.
I can understand why it would be helpful prior to interview for the Home Secretary to have a committee of experts which would decide the operational powers required. I would have thought that those should be given in the job description for a director-general. The committee would say, “This particular candidate does not have this or that, but there is training”, and then look at what support was required so that the candidate chosen would have all of it. That is not what is here today.
I then find it strange that the Secretary of State can do away with the committee anyway and not have it there. If it is needed, it should be there permanently; if it is not needed, it should not be there at all. This is confusing and has not really been very well thought out. As I said, the previous response from the Minister did not give me the answer I sought. I am not likely to press this to a Division but I need to understand why the Government think this is an appropriate way forward; what skills they would expect the panel to have; and why, if it is so important that the Secretary of State has that advice, she can choose, basically on a whim, not to have it.
Lord Taylor of Holbeach
I shared with the noble Baroness an initial uncertainty over what this is about but it is to ensure that an appointee to the post of director-general has the proper skill base to exercise the operational functions that go with that job. We have an exceptional appointment in Keith Bristow because he has exercised the office of chief constable. There is no anxiety in that respect. Of course, any future appointment—we hope these will not be made that frequently—will need to have a process to make sure that we get the right person and then to ensure that there is a methodology in terms of operational authority, skills and competence.
I am very happy to make a second attempt at writing to the noble Baroness on this because I understand the complication and the somewhat complicated process of an ad hoc advisory committee to deal with these matters within the regulation. I am assured that it is the most effective way to ensure that no shortcuts are taken in this process and that we end up with a director-general of the NCA who has these powers. Having given an ad lib answer, I will, if noble Lords will allow me, go through what I have written here, too, because it is useful to reiterate the background.
First, the Bill is explicit on the powers that can be designated, those being police, customs and immigration powers. Secondly, the director-general will be subject to the same tests of suitability, capability and training as other NCA officers. That is an important part of consistency and a critical point of assurance given the range of powers we are talking about. There is a broad range of powers. Thirdly, through the advisory panel the Bill provides independent assurance on the training to the Home Secretary before a designation can be made. Fourthly, any setting aside of the part played by an advisory committee is subject to regulations that have to be made under an affirmative procedure. This regulation-making power does not undermine the arrangements for the advisory panel; rather, the two provisions will work together.
Police, customs and immigration powers provide an extensive suite of operational powers. It is right that the DG, as an NCA officer, has to go through the same checks of adequate training as other NCA officers—as well as suitability and capability on appointment—to be designated with those operational powers. That is what the advisory panel is for: to provide an independent check on the adequacy of the training so that the Home Secretary can designate the director-general with operational powers. The regulation-making power is necessary for circumstances where a prospective director-general has already undertaken the training necessary to enable him or her to exercise particular operational powers. In those circumstances it is sensible that the advisory panel is not required to consider whether the prospective appointee has the necessary training. Keith Bristow is a case in point. As a police officer he has been extensively trained in police powers throughout his career and is a highly experienced investigator. There can be little question that he has the necessary training to exercise the powers of a constable.
Baroness Smith of Basildon
My Lords, I am grateful to the noble Lord and also very grateful that he has offered to write to me again. On some parts he has satisfied me. He said that part of the role of an ad hoc advisory panel would be to be an independent check on the adequacy of training if a new director-general had been deemed—presumably by the Secretary of State—to need training in areas where they did not already have operational capabilities. However, he then said—I will read Hansard to check what it says—that this can be designated without reference to the advisory panel. If the advisory panel is supposed to be a check on the adequacy of training, I am not sure how the operational powers could be designated without reference to it. I will look at what he says and perhaps he could include that in this letter to me.
My point of concern regarded protection for the Secretary of State and a potential director-general. The Secretary of State appoints a director-general without reference to a board. If there is a board advising on operational capabilities and any training needs, it would be helpful to a Secretary of State to have that information prior to appointment. The last thing anybody wants to see is a director-general whose capabilities are questioned by the wider police family or by those working in the criminal justice system. If an advisory panel could assess the director-general’s operational capability and any training needs it would provide protection for both the Secretary of State and the director-general. It would be helpful if, perhaps in the letter, he could explain why it is after appointment by an individual Secretary of State, not before, that such advice and information was given. The Minister has been very helpful on this point and I am happy to withdraw my amendment.
Lord Taylor of Holbeach
“(3) In this paragraph “enactment” includes a description of enactments.”
Lord Taylor of Holbeach
“(d) omit subsection (7).”
Lord Taylor of Holbeach
Baroness Hamwee
Baroness Hamwee
My Lords, I will speak also to Amendment 38. In Committee I sought to understand the relationship between Schedules 6 and 7. Paragraph 1 of Schedule 7 provides that,
“This Part of this Act”—
I will come back to those words in a moment—
“does not authorise or require”,
disclosures which would be prohibited by the Data Protection Act or Part I of the Regulation of Investigatory Powers Act, which are importance provisions. Among other things, I did not then, and still do not quite, understand whether the regulations that may be made under paragraph 5 of Schedule 6 could override primary legislation. These amendments are in response to the noble Earl’s assurances that neither of these Acts is affected. However, we still have a provision in paragraph 5(5) of Schedule 6 that the Secretary of State can make regulations regarding the disclosure of information which, under paragraph 5(6), may,
“modify any provision of Schedule 7 in its application to such a disclosure, or … disapply any such provision from such a disclosure”.
I would be grateful if, in the light of the permissive arrangement under Schedule 6, the Minister could confirm that it does not mean what it seems to when we get to paragraph 1 of Schedule 7.
My second question concerns,
“This Part of this Act”.
Can the Minister confirm that that means Part 1 of the Bill rather than Part 1 of this schedule? I think it is that way round. Given that “This Part” could refer to part of the schedule or the main part of the Bill, it would be helpful to have it confirmed. I would also like to give my thanks to those who have corrected the annunciator. My blood pressure and that of the noble Earl have come down considerably over the past five minutes as a result. We will see how many noble Lords get caught out by how swiftly we are going to move from Amendment 38 to Amendment 78.
Earl Attlee
My Lords, I thank my noble friend Lady Hamwee for explaining her amendments. I am sure that she would be pleased to know that we both want the same thing, namely that nothing in Part 1 of the Bill enables the National Crime Agency or others to override or modify the application of the Data Protection Act 1998 or the Regulation of Investigatory Powers Act 2000 in relation to the disclosure of information.
The aim of the restrictions on disclosure set out in Schedule 7 is to ensure that any onward disclosures by NCA officers will, among other things, be subject to the existing safeguards in data protection legislation. The current wording does not provide any powers to amend existing primary legislation and therefore inserting “modify” is unnecessary. Without the provision in paragraph 1 of Schedule 7, the information gateways provided for in Clause 7 could be read as being capable of overriding the provisions of the Data Protection Act and RIPA.
There is no need to extend these statutory restrictions to cover the whole Bill as we are dealing here only with the information gateways available to the National Crime Agency and its law enforcement partners, as provided for in Part 1 of the Bill. My noble friend is correct that we are referring to Part 1 of the Bill. I hope my noble friend is reassured that paragraph 1 of Schedule 7 is necessary to prevent any overriding of the important safeguards in data protection legislation and, on that basis, would agree to withdraw her amendments.
Baroness Hamwee
My Lords, I thank the noble Earl for that. I still have a feeling that one should issue Hansard as an annexe to the Act when it is published to explain that, but I beg leave to withdraw the amendment.
Lord Taylor of Holbeach
“(aa) for a designated member of the staff of the NPIA to become employed in the civil service of the state—(i) as an NCA officer, or(ii) in the Home Office;”
“or for the transfer to the NCA or the Secretary of State of designated property, rights or liabilities from the NPIA.”
(ba) provide for anything done by a transferor which gives rise to criminal liability to be treated as done by the NCA or the Secretary of State and, in such a case, provide that Crown immunity does not affect the criminal liability of the NCA or Secretary of State;”
““designated transferee” means a person in respect of whom a staff transfer scheme makes provision of the kind referred to in paragraph 2(1)(a) or (aa);“Home Office” means the department of the Secretary of State having responsibility for policing;“instrument” includes a designation, authorisation, warrant, or order of any court;”
Lord Taylor of Holbeach
“Continuity in relation to functions5A (1) The abolition of SOCA or the NPIA does not affect the validity of anything done before the abolition.
(2) The transfer of a function does not affect the validity of anything done before the transfer.
(3) Sub-paragraphs (4) to (6) apply in relation to the transfer of a function.
(4) Where anything—
(a) relates to the transferred function, and(b) is in the process of being made or done by or in relation to the transferor immediately before the transfer takes effect,it may be continued afterwards by or in relation to the transferee.(5) Where anything—
(a) relates to the transferred function,(b) has been made or done by or in relation to the transferor, and(c) is in effect immediately before the transfer takes effect,it has effect afterwards as if made or done by or in relation to the transferee.(6) The transferee is to be substituted for the transferor in any documents and other instruments, contracts or legal proceedings which—
(a) relate to the transferred function, and(b) are made or commenced before the transfer takes effect.(7) The Secretary of State may, by direction, determine any question under this paragraph as to—
(a) whether there has been a transfer of a particular function, or(b) the person to whom there has been a transfer of a particular function.
(8) The preceding provisions of this paragraph are without prejudice to the powers under section 32 (transitional, transitory or saving provision).
(9) The following provisions of this paragraph apply for the purposes of this paragraph.
(10) A reference to—
(a) the abolition of SOCA includes a reference to the ending of a person’s membership of SOCA or membership of the staff of SOCA;(b) the abolition of the NPIA includes a reference to the ending of a person’s membership of the NPIA or membership of the staff of the NPIA.(11) A reference to the transfer of a function is a reference to—
(a) the transfer of a SOCA function by or under this Act,(b) the transfer of an NPIA function by or under this Act, and(c) the assumption of a third party function by the NCA.(12) For that purpose—
(a) the reference to the transfer of a SOCA function or NPIA function by or under this Act includes a reference to a case where—(i) a SOCA function or NPIA function is abolished, and(ii) a corresponding function is conferred on another person,by or under this Act; (b) the reference to the assumption of a third party function by the NCA is a reference to the case where—
(i) a function (other than a SOCA function or an NPIA function) is exercisable before the changeover by a person (the “third party”),(ii) a corresponding function is included in the NCA functions, and(iii) a person employed by, or otherwise serving, the third party wholly or partly for the purpose of the exercise of the function becomes an NCA officer under a staff transfer scheme;and references to the transferred function, the transferor and the transferee are to be read accordingly.(13) A reference to a thing being, or having been, made or done includes—
(a) a reference to—(i) a document or other instrument being, or having been, made or otherwise produced,(ii) a contract being, or having been, agreed, and(iii) legal proceedings being, or having been, brought; and(b) a reference to a thing being, or having been, made or done under—(i) a document or other instrument,(ii) a contract, or(iii) legal proceedings.(14) A reference to a thing which relates to a transferred function includes a reference to a thing made or done for the purposes of, or otherwise in connection with, a transferred function.
(15) These expressions have the meanings given—
“instrument” includes a designation, authorisation, warrant, or order of any court;“NPIA functions” means functions of—(a) the NPIA,(b) a member of the NPIA, or(c) a member of the staff of the NPIA;“SOCA functions” means functions of—(a) SOCA,(b) a member of SOCA, or(c) a member of the staff of SOCA.Continuity in relation to subordinate legislation5B (1) After the changeover, the subordinate legislation specified in an entry in the first column of the following table—
(a) continues to have effect (subject to any subsequent amendment or revocation) as if made under the powers conferred by the provision of this Act specified in the corresponding entry in the second column; and(b) may be amended or revoked by (in particular) the exercise of the powers conferred by that provision.
Subordinate legislation | Provision of this Act |
|---|---|
The Serious Organised Crime and Police Act 2005 (Application and Modification of Certain Enactments to Designated Staff of SOCA) Order 2006 (S.I. 2006/987) | Paragraphs 27 to 29 of Schedule 5 |
The International Joint Investigation Teams (International Agreement) Order 2009 (S.I. 2009/3269), insofar as it is made under powers conferred by the Serious Organised Crime and Police Act 2005 | Paragraph 5(1)(c) of Schedule 4 |
The Serious Organised Crime and Police Act 2005 (Disclosure of Information by SOCA) Order 2010 (S.I. 2010/1955) | Paragraph (p) of the definition of “permitted purpose” in section 16(1) |
The Serious Organised Crime and Police Act 2005 (Application and Modification of Certain Enactments to Designated Staff of SOCA) Order 2006 (S.I. 2006/987)
Articles 2 and 4(4) and paragraph 21 of Schedule 1 | The reference to section 43(1)(a) of the Serious Organised Crime and Police Act has effect as a reference to section 9 or 10 of this Act |
Articles 3(b) and 4(1)(b) | The reference to Chapter 2 of Part 1 of the Serious Organised Crime and Police Act 2005 has effect as a reference to Part 1 of this Act |
Article 4(3) | The reference to section 46 of the Serious Organised Crime and Police Act 2005 has effect as a reference to Part 4 of Schedule 5 to this Act |
Article 5 and Paragraph 6 of Schedule 2 | The reference to section 43(1)(c) of the Serious Organised Crime and Police Act 2005 has effect as a reference to section 9 or 10 of this Act |
Articles 6(b) and 7(1)(b) | The reference to Chapter 2 of Part 1 of the Serious Organised Crime and Police Act 2005 has effect as a reference to Part 1 of this Act |
Schedule 1 | Each reference to a SOCA office has effect as a reference to a place for the time being occupied by the National Crime Agency |
Article 2(d) | The reference to sections 30(5)(c) and 57(6)(c) of the Serious Organised Crime and Police Act 2005 has effect as a reference to paragraph 5(1)(c) of Schedule 4 to this Act |
Article 2 | The reference to section 33 of the Serious Organised Crime and Police Act 2005 has effect as a reference to the definition of “permitted purpose” in section 16(1) of this Act |
(4) The preceding provisions of this paragraph are without prejudice to sections 31 (consequential amendments) and 32 (transitional, transitory or saving provision).”
Lord Taylor of Holbeach
“(2) In section 27B of that Act (actions for recovery of property for purposes of an external order), in subsection (8), for paragraph (a) substitute—
“(a) the National Crime Agency,”. Road Traffic Regulation Act 1984 (c. 27)27A (1) Section 87 of the Road Traffic Regulation Act 1984 (exemptions from speed limits) is amended in accordance with this paragraph.
(2) In that section (before its amendment by the Road Safety Act 2006), in subsection (2)(a) and (b), for “Serious Organised Crime Agency” substitute “National Crime Agency”.
(3) In that section (after its amendment by the Road Safety Act 2006), in subsection (1)(a), for “Serious Organised Crime Agency” substitute “National Crime Agency”.”
“Ministry of Defence Police Act 1987 (c. 4)28A (1) Section 2C of the Ministry of Defence Police Act 1987 (constables serving with SOCA) is amended in accordance with this paragraph.
(2) In the title, for “Serious Organised Crime Agency” substitute “National Crime Agency”.
(3) In subsection (1)—
(a) for “Serious Organised Crime Agency” (in the first place) substitute “National Crime Agency”;(b) in paragraph (b), for “Serious Organised Crime Agency” substitute “Director General of the National Crime Agency”.(4) In subsection (2)(a), for “Serious Organised Crime Agency” substitute “Director General of the National Crime Agency”.
Road Traffic Act 1988 (c. 52)28B (1) In section 124 of the Road Traffic Act 1988, subsection (1A) is amended in accordance with this paragraph.
(2) In the first sentence—
(a) for “SOCA instructor” substitute “NCA instructor”;(b) for “Serious Organised Crime Agency” substitute “National Crime Agency”.(3) In the second sentence—
(a) for “SOCA” substitute “NCA”;(b) for “a member of staff of the Serious Organised Crime Agency” substitute “an NCA officer”;(c) for “members of the Agency’s staff” substitute “NCA officers”.”
“(1) Section 97 (police officers engaged on service outside their force) is amended in accordance with this paragraph.
(2) ”
“(3) In subsection (6)(a)—
(a) omit “(cf), (cg)”;(b) after “(ci)” insert “, (cj)”.(4) In subsection (8), omit “(cf), (cg)”.
(5) After subsection (8) insert—
“(8A) A person who is member of a police force engaged on relevant service within paragraph (cj) of subsection (1) shall be treated for the purposes of sections 59, 60 or 64 as if the person were a member of that police force.”.
Employment Rights Act 1996 (c. 18)44A The Employment Rights Act 1996 is amended as follows.
44B In section 43KA (application of this Part and related provisions to police), in subsection (2)(b), for “Serious Organised Crime Agency to serve as a member of its staff” substitute “National Crime Agency to serve as a National Crime Agency officer”.
44C In section 134A (application to police), in subsection (3), for “Serious Organised Crime Agency” substitute “National Crime Agency”.”
“Immigration and Asylum Act 199953A The Immigration and Asylum Act 1999 is amended as follows.
53B In section 20 (supply of information to Secretary of State), in subsection (1)(b), for “Serious Organised Crime Agency” substitute “National Crime Agency”.
53C (1) Section 21 (supply of information by Secretary of State) is amended in accordance with this paragraph.
(2) In subsection (2), for paragraph (b) substitute—
“(b) the National Crime Agency, for use in connection with the discharge of any function of that Agency;”.(3) Omit subsection (4).”
Baroness Hamwee
Baroness Hamwee
My Lords, I shall speak also to Amendment 72. These amendments take us back to freedom of information. At the previous stage, I sought to include the National Crime Agency in the freedom of information regime, fully acknowledging that the exemptions under the Freedom of Information Act 2000 would quite often have to be called into play. At that time, the Minister acknowledged that exemptions would apply, but reminded me—or reminded the House, as I was aware of it—that SOCA and CEOP are not within the FOI arrangements. The NCA is about more than the constituent bodies. It is more than the sum of its parts, one might say. Police forces are within the freedom of information scheme, and it seems to me that the NCA will need to consider many of the issues considered by police forces, such as recruitment policies and budgets. Those issues can very often be dealt with in public and be subject to freedom of information requests, with answers being given without jeopardising national security.
The Minister was concerned that the operational effectiveness of the NCA would be endangered and said that the confidence of the NCA’s partners would be threatened if the NCA were subject to freedom of information. I thought that that latter argument was weak. The NCA’s partners should be confident that the NCA will use the exemptions available to it. Freedom of information arrangements are important. I am well aware that in practice it is not always comfortable when one is on the receiving end of freedom of information requests. That does not mean that the regime should be chipped away at by organisations not being subject to it. The Minister also said that organised criminals are very sophisticated. Is it a counsel of despair to think that they are more sophisticated than the NCA and our law enforcement agencies? That amounts to a failure to acknowledge the proper balance in an advanced and open democracy.
My amendments take a slightly different approach to dealing with the exemption by describing it as,
“only to the extent of information relating directly to the crime-reduction function or to the criminal intelligence function”.
Both those terms are defined earlier in the Bill. This is a matter of some principle, and I look forward to the Minister’s defence of the Bill’s position. I beg to move.
Lord Rosser
My Lords, I will be brief since we do not have an amendment down on this subject, albeit that we had one down in Committee when we sought to qualify the National Crime Agency exemption to cover only those functions subject to exemption prior to 1 April 2012. The noble Baroness, Lady Hamwee, has gone through some of the responses that we had from the government Dispatch Box during that debate, in which she also moved an amendment.
Looking at Hansard, I see that for my troubles in moving the amendment, the response from the government Dispatch Box was that what I was suggesting was “illogical or worse”. I am not quite sure what worse was meant to cover, but it sounds fairly serious. There appears to have been some support for my proposing something that was illogical or worse from the Joint Committee on Human Rights. It has done a report in which it stated:
“We are not convinced by the Government’s justification for reducing the coverage of freedom of information legislation by including within the NCA exemption functions which were previously covered by that legislation”,
which was the point that my amendment sought to address. It went on to state:
“We are concerned that reducing the coverage of this legislation in this way could create a dangerous precedent. It is not uncommon for this legislation to apply to certain of an organisation’s functions but not others, and we need a good deal more evidence from the Government to persuade us why the NCA should be any different”.
That last point is particularly interesting since I intervened in the then Minister’s response to my amendment to ask,
“is it the Government’s case that all other agencies or bodies are either completely covered by or completely exempt from the Freedom of Information Act, and that one does not find in any other organisation or agency that some of the activities are covered by the Act and some are exempt?”.
The response I got from the then Minister was:
“Without notice, I do not think that I can answer that question, but I will certainly look at it”.—[Official Report, 18/6/12; col. 1642.]
It subsequently appears that it is something that the Joint Committee on Human Rights has looked into. It made it clear that it is not uncommon for this legislation to apply to certain of an organisation’s functions, but not others. I await with interest what the Minister is going to say in response to the amendment moved by the noble Baroness, Lady Hamwee, but I hope that one argument he will not use is that somehow it is illogical or inconsistent to have part of an organisation’s functions exempt from the Act and part covered, since that one seems to have been knocked on the head by the Joint Committee on Human Rights.
Lord Taylor of Holbeach
My Lords, the Government take their own view on issues, although we, of course, respect the Joint Committee and all its works. I am very grateful to my noble friend for raising this issue. She cares greatly about the responsibility of government to provide transparency and the Freedom of Information Act is just one thing that can be used to provide transparency.
As the noble Lord, Lord Rosser, said, my noble friend Lord Henley dealt with this at the Committee stage. We are committed to ensuring that the National Crime Agency will be open and transparent to the public which it has been created to protect. That commitment is clearly set out in Clause 6. The intention is that this organisation will be fundamentally more public-facing than its predecessor organisations and open in its relationships with the public, partners, the media and, of course, Parliament. Indeed, in the framework document, under the second bullet point in item 10, noble Lords will note a duty to publish information in accordance with publication arrangements that will be set out in a future annexe. It is really designed to indicate in the framework document itself the importance that the Government attach to this. We want the public to be able to access as wide a range of information about the NCA as possible provided it does not compromise in any way the NCA’s effectiveness in fighting crime. We expect that this will include information on what the NCA is doing to tackle serious and organised crime, what it is spending and how well it is doing—so performance indicators as well.
I want to reassure noble Lords that the decision to exempt the NCA from the FOI Act was not taken lightly. We considered this carefully, having particular regard to the fact that some of the precursor functions transferring from the NCA have been undertaken by bodies that are currently subject to the FOI Act. That has been pointed out by both noble Lords. The agency’s largest precursor, the Serious Organised Crime Agency, including CEOP, has not been subject to the FOI Act since its inception. However, we have analysed the FOI requests made to other precursor bodies, such as the NPIA, and we are confident that the agency can balance being FOI-exempt with proactive publication to ensure that there is no loss of public transparency as a result of the approach being taken in the Bill.
I recognise the efforts made in this amendment to apply a partial application of the FOI Act. However, we remain of the view that a blanket exemption is the most appropriate arrangement, not for administrative convenience but to ensure full effectiveness and as a critical operational safeguard. We are talking about a fully integrated, crime-fighting, operational agency that will be charged with spearheading the fight against some of the most dangerous and pernicious criminals and crime groups that impact our communities. Some information about the discharge of those functions will be fit for release into the public domain; some will not. The distinction does not come from an arbitrary line drawn in legislation that seeks to differentiate some of the NCA’s functions from others; it comes from a deep understanding of the types of information that no one would want to fall into the wrong hands. I firmly believe that the National Crime Agency will be able to make this distinction.
I recognise the argument that the scope of the exemptions provided for in the FOI Act could potentially apply to much of the material that the National Crime Agency is seeking to protect. However, as my noble friend Lord Henley said, this is not the only consideration. First, the National Crime Agency will depend on the absolute confidence of its partners to provide the backbone of the agency’s superior national intelligence picture. If those partners believe that sensitive information held by the agency could be subject to public release, they are likely to be more inhibited about sharing that information with the NCA in the first place. Chief among these concerned partners are those in the private sector and overseas—partners who are perhaps not as familiar with FOI as we are.
Secondly, intelligence shows that organised criminals are increasingly sophisticated in their methods and seek to exploit any avenues possible to further their criminal activities. The FOI Act offers them an opportunity to acquire information about the NCA’s operational tactics, to disrupt its operations and to evade detection. While the exemptions might apply to some of this information, the risk is that it might not always be the case.
In short, we remain resolute in our decision to maintain the NCA’s exemption from the FOI Act. To do otherwise would jeopardise the NCA’s operational effectiveness and ultimately result in lower levels of protection for the public. While partial application of the FOI Act might, at face value, look attractive, it is simply not a viable option for an integrated crime-fighting agency. In the mean time, the whole purpose of the duty to publish will be to provide the public with as much information about the organisation’s activities as possible. For these reasons, I urge my noble friend to withdraw her amendment.
Baroness Hamwee
My Lords, I opened the debate on these amendments by saying that some of our colleagues might be surprised by how quickly the next amendments are dealt with. I could, of course, deal with that, giving them warning by dividing the House, but that may not be possible and I think I see signs that the Whips have the matter in hand. I would say to the noble Lord, Lord Rosser, that what is worse than being illogical—to my mind and, I suspect, to his as well—is to betray one’s values.
I anticipated most of the Minister’s arguments, not surprisingly because they largely repeated, and were consistent with, what we were told at the previous stage. Noble Lords have been directed to the duties under Clause 6, but the problem with reports such as this that are in the hands of the organisation which is the subject of one’s concern, is that that organisation itself determines the content and the depth of information and the level of detail. The use of freedom of information requests puts the impetus in the hands of the person making the request. There is quite a different balance in this. The provisions in the Bill are to be subject to whatever is in the framework document and what the annexe to the framework document has to say will be extremely important. I look forward to seeing what that may be.
I remain disappointed, but the Minister probably anticipated that. He will not be surprised by my last remark, which is that the freedom of information regime should not be optional. Having made that point, I beg leave to withdraw the amendment.
Lord Taylor of Holbeach
“117A In section 333A (tipping off: regulated sector), in subsection (2)(d), for “member of staff of the Serious Organised Crime Agency” substitute “National Crime Agency officer”.”
“(b) the Director General of the National Crime Agency.”Energy Act 2004 (c. 20)138A (1) Section 59A of the Energy Act 2004 (constables serving with SOCA) is amended in accordance with this paragraph.
(2) In the title, for “Serious Organised Crime Agency” substitute “National Crime Agency”.
(3) In subsection (1)—
(a) for “Serious Organised Crime Agency” (in the first place) substitute “National Crime Agency”;(b) in paragraph (a), for “Serious Organised Crime Agency” substitute “Director General of the National Crime Agency”.(4) In subsection (2), for “Serious Organised Crime Agency” substitute “Director General of the National Crime Agency”.”
“Equality Act 2010 (c. 15)167A The Equality Act 2010 is amended as follows.
167B In section 42 (identity of employer), in subsections (4) and (5), for “SOCA” substitute “NCA”.
167C In section 43 (interpretation), for subsection (5) substitute—
“(5) “NCA” means the National Crime Agency; and a reference to a constable at NCA is a reference to a constable seconded to it to serve as an NCA officer.”.
167D In Schedule 19 (public authorities), in Part 1 (general), omit “The Serious Organised Crime Agency.””
“Protection of Freedoms Act 2012169 In section 95 of the Protection of Freedoms Act 2012 (effect on police and other records of disregard of conviction or caution), in subsection (5), in the definition of the names database, for “National Policing Improvement Agency” substitute “Secretary of State”.
Part 3Further consequential amendments and repealsReferences to SOCA170 In the following enactments, for “Serious Organised Crime Agency” substitute “National Crime Agency” (and, where that expression appears in more than one place in such an enactment, that substitution is made in each such place)—
Aviation Security Act 1982 | Section 24AE(4)(f) (aerodrome security plans) |
Section 24AG(2)(e) (security executive groups) | |
Section 24AI(2)(c) (objections to proposals by security executive groups) | |
Police and Criminal Evidence Act 1984 | Section 63A(1A)(b) (fingerprints and samples: supplementary provision) |
Dartford-Thurrock Crossing Act 1988 | Section 19(a)(ia) (exemption from tolls) |
Criminal Appeal Act 1995 | Section 22(4)(aa) (meaning of public body etc) |
Domestic Violence, Crime and Victims Act 2004 | In Schedule 9 (authorities within Commissioner’s remit), paragraph 13 |
Commissioners for Revenue and Customs Act 2005 | Section 40(2)(ca)(ii) (confidentiality) |
Immigration, Asylum and Nationality Act 2006 | Section 39(2)(b) (disclosure to law enforcement agencies) |
Counter-Terrorism Act 2008 | In section 18E, paragraph (b) of the definition of “law enforcement authority” (sections 18 to 18E: supplementary provisions) |
Coroners and Justice Act 2009 | Section 75(2)(c) (qualifying criminal investigations) |
Section 161(2)(a)(i) (applications for exploitation proceeds order) | |
Section 166(9A) (exploitation proceeds orders) effect of conviction being quashed etc | |
Terrorism Prevention and Investigation Measures Act 2011 | In section 10 (criminal investigations into terrorism-related activity), paragraph (d) of the definition of “police force” |
Data Protection Act 1998 | Section 56 (prohibition of requirement as to production of certain records), entry 1(d) in the table |
Criminal Justice Act 2003 | Section 29(5)(cb) (new method of instituting proceedings) |
Commissioners for Revenue and Customs Act 2005 | Section 41(2)(e) (disclosure of information to Director of Revenue confidentiality) |
Legal Services Act 2007 | Section 169(5)(d) (disclosure of information to the Legal Services Board) |
Coroners and Justice Act 2009 | Section 81(3) (delegation of functions) |
(a) for “Serious Organised Crime Agency” substitute “National Crime Agency”; and(b) for “Director General of the Serious Organised Crime Agency” or “Director General of that Agency” substitute “Director General of the National Crime Agency”—
Counter-Terrorism Act 2008 | Section 18(3G)(f) (material not subject to existing statutory restrictions) |
Coroners and Justice Act 2009 | Section 77(1)(c) (applications for investigation anonymity orders) |
Terrorism Prevention and Investigation Measures Act 2011 | In section 10 (criminal investigations into terrorism-related activity), paragraph (d) of the definition of “chief officer” |
Courts Act 2003 | Section 41(6)(c) (disqualification of lay justices who are members of SOCA etc) |
Coroners and Justice Act 2009 | Section 170 (amendments of Part 1 of the Serious Organised Crime and Police Act 2005) |
(a) a reference (however expressed) of a kind specified in an entry in the first column of the following table is to be read as being, or including, a reference of the kind specified in the corresponding entry in the second column of the table; and(b) related expressions are to be read accordingly.
A reference to... | ...is or includes a reference to... |
|---|---|
the Serious Organised Crime Agency | the National Crime Agency |
the Director General of the Serious Organised Crime Agency | the Director General of the National Crime Agency |
the staff of the Serious Organised Crime Agency | National Crime Agency officers |
a member of staff of the Serious Organised Crime Agency | a National Crime Agency officer |
(3) In this paragraph “relevant subordinate legislation” means Orders in Council, orders, rules, regulations, schemes, warrants, byelaws and other instruments made before the end of the Session of Parliament in which this Act is passed under—
(a) an Act of Parliament,(b) an Act of the Scottish Parliament,(c) an Act of the Northern Ireland Assembly, or(d) a Measure or Act of the National Assembly for Wales.”
Lord Taylor of Holbeach
Small Charitable Donations Bill
Arrangement of Business
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Northover
My Lords, as the Question for Short Debate proposed by the noble Baroness will now be taken as last business, the time limit for the debate becomes 90 minutes rather than 60 minutes. Speeches should therefore be limited to nine minutes, except for the speeches of the noble Baroness, Lady Greengross, and the Minister, which remain limited to 10 and 12 minutes respectively.
Small Pension Funds
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Greengross
To ask Her Majesty’s Government what action they are taking to ensure access to good advice for people with small pension funds, and to maximise such people’s retirement income.
Baroness Greengross
My Lords, I start by declaring an interest. I head up the ILC-UK and the International Longevity Centre Global Alliance, which look at the impact of demographic change on all our services as we plan the future. I am really pleased that we have an opportunity to discuss what I want to look at—people with small pension pots—and the impact of the Financial Services Authority’s retail distribution review, which will be implemented on 1 January 2013. I support the principles underpinning the RDR; they are excellent. But there is at least one unintended consequence that might well follow, which really results from the fact that advisers will no longer be paid by commission but will charge a fee for the work that they do. I and others think that people on modest incomes will either be priced out of or excluded from the advice market. I have a deep concern that lots of people will not get the advice that they need. There will be an advice gap, with a detrimental effect on their incomes that will continue throughout their retirement, which as we know is likely to last much longer than they think it will last. These tend to be the people who have the least knowledge about what is going to happen to them regarding their pension when they retire.
The DWP estimates that by 2050 there will be 4.7 million pension pots of £2,000 or less, with many more than today expected to reach retirement with these small pots. The National Association of Pension Funds has said that there are currently 1.1 million retained DC pension funds with less than £5,000 in them; collectively these hold £2.3 billion of pension assets. A recent survey by KPMG of more than 3,000 customers found that only 31% would be prepared to pay for financial advice; 54% would pay no more than £50 for an hour’s advice; and only 1% would pay more than £200. There is a big risk here. These are exactly the sort of people who will receive no advice at all. Deloitte has recently found that more than 5 million clients may be left without advice as a result of RDR, as costs are made transparent and independent financial advisers focus, inevitably, on higher-net-worth customers.
Partnership Assurance has given us figures that tell us that 78% of annuities sold in the UK in 2011 were for fund sizes of under £40,000. For people with impaired health or lifestyle conditions, the difference between the best and worst rates can be up to 40%. At the same time, very few people exercise or even understand the benefits of exercising the open market option. Figures from the Association of British Insurers report that while joint annuities accounted for 42% in 2011, up from 29% in 2008, only 46% of annuities were bought via the open market option in 2011, up from 35% in 2008. But more people with larger pension funds choose this route than those with smaller pots—the people that I am really concerned about.
Ways of improving the situation might be to narrow the advice gap so that those with very small incomes have access to advice and do not miss the retirement income that they could have, and avoiding an information overload for people who just do not understand what all this is about anyway. Much more needs to be done to ensure that customer information is developed—and it must be from a consumer, rather than compliance, perspective, because people are just not interested, do not understand and then suffer later on. Urgent steps need to be taken to halt the continued erosion of the culture of saving that we used to have in this country. Inevitably, at the moment, we have lost a huge amount of trust in the industry, which is very sad and adds to this inevitable problem. The Government could also perhaps provide a much clearer distinction between the provision of information and the giving of advice, making it much clearer to what extent providers are able to guide customers without it being deemed advice, and joining up the public policy agenda on financial advice, which would enable saving.
In terms of the industry, I very much welcome the ABI’s recent consultation to increase transparency in the annuity market by publishing annuity rates, as part of its code of conduct on retirement choices. I also welcome the fact that PICA, the Pensions Income Choice Association, is working with other industry participants to build a directory of advisers and shopping around brokers who can help investors, particularly people with small pots, to shop around when they retire. This will help customers to understand the decisions they need to make, the products that are available, and how they can shop around. We know that there are several annuity “interface portals” for people who have sufficient IT skills, but our real worry are those who are excluded from all this, because they just do not have the knowledge that is necessary.
The mechanics of the pensions industry have made it very difficult for retirees to get good annuity rates, as we know. Annuity advisers and providers should explore greater uses for technology in delivering advised and non-advised services to help people understand their options at retirement and help them to make the right decisions.
I will end by sharing a real concern I have that lack of cohesion and policy fragmentation created by silos between the Financial Services Authority, leading on RDR, HM Treasury, with the policy lead on financial advice, and the DWP, leading on retirement outcomes for pensioners, will result in the poorest and least well-off people receiving sub-optimal retirement outcomes. Perhaps something can be done to raise awareness of the challenges and responsibilities that individuals have, particularly those over 50, who need to focus on a multitude of retirement decisions and have far fewer pensions and savings assets at their disposal than they actually need. Nobody really believes that they are going to live for as long as they will, and nobody really calculates what they are going to need over all these years, with the need for care, and so on. Explicit government support and signposting would help to ensure that these people—the small pension pot holders—have as easy a time as possible in getting help with their shopping around. Will the Minister consider creating some kind of forum so that the industry, the regulator, the DWP and HM Treasury can get together to meet and discuss how better to work together to improve customer outcomes?
Lord Patten
My Lords, the noble Baroness said that there are 1.1 million people with a pension fund of £5,000 or less. That is 1.1 million very admirable people. I greatly admire those who from small incomes, little bequests and savings over the years have decided to save for a pension. That is an admirable and a good thing. Compare and contrast them with others who may have exactly the same, albeit small, resources from income, bequests and savings, who choose to spend it and rely entirely on the state. The 1.1 million people to whom the noble Baroness referred are the deserving savers, which is why I share her hope that the Government may find ways in which to help deserving savers to get a better deal from those who give advice and those who invest.
It must be very lonely for someone who is of pensionable age, has that small sum of money and does not know which way to turn. However, if there were ways of grossing together all those people, imagine the purchasing power and the purchasing strength that 1.1 million people with £5,000 or less in their pensions would have in negotiating good advice or, indeed, negotiating a better deal when they invest.
The noble Baroness suggested that there should be a round table to deal with this as one way of looking at helping these people. Despite the rather austere framework that we are in at the moment, there may be market-driven opportunities here because I understand that those 1.1 million people have more than £2 billion to invest between them. It may be possible for those in the market to think of setting up a vehicle which would help, by pooling resources, to get a better deal for pensioners, strictly regulated though it should be. Therefore, I would like to put before your Lordships and, indeed, before my noble friend the Minister, an idea which I hope the Government will not stand in the way of: someone trying to set up such a body whereby the purchasing power of small pension holders could be pooled and used to their advantage. I have no interest to declare in this matter, by the way.
Let us look at each of the two areas referred to in the noble Baroness’s excellent Motion: “access to good advice” and maximising people’s retirement incomes. Access to good advice is critical. In the past, the world of the independent financial adviser and others has been a very peculiar one, suggesting to people, who often had small sums of money, that they should invest in this or that because there was a trail commission going back to someone. Under those circumstances it is natural, I guess, that people very often have said, “Go to this fund. Go to that fund—this bond fund, that equity fund”, because a commission is involved. That has all been stopped, which is a thoroughly good thing because I think that it was as close to being corrupt as you could get. But at the same time the unintended consequence is that people are now being told they will have to pay for the advice that they thought they were getting for free but was actually coming from commissions trailing back to suppliers.
It should be possible to think of ways in which individuals with small pensions, banded and grossed up together, could have much more purchasing power, first, to get better advice but, secondly, to get better investment returns. Let us take not £5,000 a year but £10,000 a year—forgive me, I can do that arithmetic. At present rates of about 3.5% returns, you get £350 a year to add on, which is a lot of money to people on small incomes. The trouble is that you go to a fund which promises 3.5% and very often that fund—say one called East European Opportunities Fund, to make up a name—then itself invests in other funds investing in funds of funds, and each of those has their layer of charges. Before you know where you are, a combination of slowly growing inflation and a multiplicity of charges has abolished any possibility of real growth in that pensioner’s income. People often talk about the magic of compound interest but the tyranny of high hidden charges directly on pension funds is very destructive of wealth.
Who does someone living alone turn to? They cannot afford advice so they look at what a Sunday newspaper says—“Invest here, invest there”—and what happens after that is very often a diminution of those people’s wealth, not an addition to it, which they have notably saved for, which I think is to the common good, rather than their just relying on the state. Therefore, I urge the Government to keep an open mind on new market entrants who would be strictly regulated by the great panoply of regulators that we have at the moment that regulate absolutely everything in the City after the events of 2000 and 2008. If private sector people are willing to invest on behalf of such pensioners, and they can see that they can make a reasonable amount from doing so, I urge the Government to make it possible for them to do that.
I do not think that the state should provide funds to do this. My noble friend will be relieved to hear that I make no request for extra government money, as I think that would be wrong. The new normal, we are told, is bumping along the bottom until 2017-18. Everyone is suddenly austerity-aware, and people who used to think that there were free lunches and free dinners now know that we live in a pretty austere world. I do not expect my noble friend to reply to the suggestions that I am about to make but I ask her to undertake in her wind-up that she will pass them on to the Treasury and to the right honourable gentleman the Chancellor of the Exchequer, whose policies I greatly admire. A time of maximum austerity is the time to get rid of a lot of perks for well-off pensioners which they do not deserve and do not need. The better sort of better-off pensioner makes a point of not claiming them. All those TV licences, all the cheap travel, all those winter fuel arrangements—
Lord Patten
I am making my speech. The noble Baroness barracks splendidly but I am picking on the three things which go to pensioners from government expenditure. I do think that now is the time for my right honourable friend to get rid of these things. There will be no political backlash at all. People think that it is bonkers and barmy to provide these benefits. I certainly do. I think that it is wrong and we should not be in that position. The Chancellor, half way through the Parliament, way ahead of a general election, with the full and stalwart support of my noble friends the Liberal Democrats in every Division on every single occasion in your Lordships’ House, should seize this opportunity and all will be well.
Baroness Hollis of Heigham
My Lords, who are we on these Benches to contest such a magnificent final flourish? I wish only that we could have persuaded the noble Lord to extend his shopping list of things to be remedied from higher rate tax relief to some of the other perks that presently go to incentivise the rich to save, as opposed to those who most need help—that is, those who are worse off.
I come back to the topic of the Motion of the noble Baroness, Lady Greengross. A key aspect of small pension funds is stranded pots. It is that which I want to talk a little about tonight. A Norwich hairdresser coming up to retirement has £20,000 in one pension pot and two other pots, one eight years old and one perhaps 12 years old, with £2,000 in each—total savings of £24,000. That hairdresser can annuitise her £20,000. She cannot access her two pots of £2,000. She cannot commute them into cash because she is over the trivial commutation limit and she is too late for the 2009 changes on triviality. She cannot annuitise those two small pots because they are too small. At the moment she cannot transfer them into her main pot because the companies do not want her business. They are orphan assets. So this woman, with her £24,000 of pension savings, cannot touch, and has actually lost, £4,000 of her £24,000 savings. It is a scandal, and with the help of the Pensions Advisory Service, TPAS, of which I declare I am a board member, we have been tabling amendments on this subject for the past five years wherever possible, which is why we are especially grateful that tonight the noble Baroness, Lady Greengross, has introduced her Motion.
As I am sure colleagues know, TPAS provides free independent information and guidance from technical specialists and a national network of 400 voluntary pension professional members to those who, for the most part, cannot afford or cannot access private information and guidance in their own right. Our website receives about 2.5 million hits every year, some 12,000 written inquiries a year and some 40,000 helpline inquiries a year for individual guidance.
A high proportion of that is fielded by volunteers. We have satisfaction ratings in the upper 90th percentile. TPAS is therefore especially aware of what pension issues are coming up in the lift as it offers information guidance day in, day out, hour in, hour out. About a third of our inquiries are about state pension and pension credit issues and the interlocking of benefits with small occupational pensions, which we hope very much will be addressed by a forthcoming Bill on the new state pension. Another third are on occupational pensions, including a growing number of inquiries on auto-enrolment—inquiries which I am sure will expand as the small and medium-sized enterprises coming later into the system are embraced. Thirteen per cent of our inquiries are on personal pensions, including SIPPs. Relevant to this debate, about 10% of our queries and problems are associated with small pots—how to trace them, how to access them and how to commute them.
Steve Webb, an admirable Pensions Minister, has told us that without action there will be 60 million small pots floating around by 2050—small pots orphaned out there, and for many people inaccessible. Why has this become a growing scandal? Pensions do not work for the main holders of those small pots, who are women. Pensions conventionally assumed a man in a 40-year job with a 40-hour working week, backed by a DB scheme and a dependent wife. If he held on to his job and she held on to him, his and her pensions were secure in retirement.
Now men have nine job changes and women have something like 11 job changes in their working life. If they have a pension—two-thirds of those in the private sector now do not—it will be DC. These DC pots have lower contributions from employers, who promptly halve their contributions when they go from a DB to a DC scheme with lower costs, passing both high charges and high risk on to those least able to cope—the employees. Those pots also receive lower contributions from the lower-paid and increasingly female part-time workers, as they continue to care for children and elderly parents alike.
This problem of small pots is compounded by what is happening in the pension industry overall, by what is happening to the labour market and by the problems that women have in caring not just for children but increasingly for older relatives and members of their family. The problem of small pots will be greatly magnified by auto-enrolment.
As my noble friend will know, I tried hard when NEST was introduced to allow small pots to be transferred into it. This was batted away because of the self-interested howls from the industry, which feared it would lose money under management, in much the same way as it has batted away early access to a slice of pension savings, which would also help transform the savings culture for women, and poorer women in particular. The industry was wrong—disastrously wrong in my view—on both counts, as it is now perhaps slowly beginning to realise, but much damage has already been done.
Pensions reflect the labour market. They were constructed decades ago by pale males with dependent wives for other pale males with dependent wives. They have never worked for women. Now, with people living longer and needing to save harder, with flexible labour markets, with auto-enrolment into low-contribution DC schemes, with half of all older women aged between 45 and 64 by 2020 to 2030 being unmarried and therefore needing a pension of their own, those low-paid part-time women especially, as they are in and out of the labour market, will collect a portfolio of small pots—hard-earned savings—some of which will be inaccessible to them at retirement as the situation now stands. Those pots will go AWOL and be inaccessible—frankly stolen from them by the structure of the pensions industry that we, all together, have constructed and inherited.
It is a problem that is simple to rectify. We expect two pensions Bills next year—one for public sector pensions and one, I hope very much, for the single state pension that Steve Webb has done so much to promote. Allowing employees to transfer small pots—otherwise potential orphan assets—into their larger pot would be an easy way to remedy this, provided we have the political will to overcome the short-sightedness and self-interest of some of those practising in the industry.
Without such speedy action, auto-enrolment could become a mis-selling scandal of orphan pots that will destroy any residual trust—and there is not much of that around—in the pensions industry. For all our sakes, including the Government, but above all on behalf of the poorest paid, poorer women, in some cases the self-employed, perhaps black and ethnic minority women, and men who find themselves churning between employment, unemployment and self-employment—for all those we have to rectify the problem of small, stranded pots which they will otherwise lose, to the distress of themselves and to the shame of us all.
Lord Stoneham of Droxford
My Lords, I am very glad to follow the very informed contribution of the noble Baroness, Lady Hollis, whose remarks I completely agreed with, and the cross-party consensus of my noble friend Lord Patten, with whom I also thoroughly agreed. I congratulate the noble Baroness, Lady Greengross, on the timing of this debate—coming the week after the Government published their consultation document Reinvigorating Workplace Pensions. It is refreshing to have in government a Minister—my colleague Steve Webb—so committed to pension reform and with the confidence to pull the right levers in government.
One important lever has been to build on the cross-party strategy of the Turner commission, which has helped this Government to add to the Labour Government’s initiatives and to bring in the start of auto-enrolment, the restoration of the earnings link for state pensions, the abolition of the default retirement age and, of course, the commitment to the single state pension. As we start auto-enrolment, however, we have a huge problem of raising understanding and commitment to increased pension provision.
The noble Baroness, Lady Greengross, is right to raise the need for good advice for people with small pension funds. I agree entirely with what she so wisely said. However, I would like to widen the concern to three themes. Those themes are the need for much greater simplicity; the need for more education, ongoing communication and advice; and, most important of all, the need for trust.
Simplicity is essential to improve the understanding of pensions. The single state pension will do away with the confusion of pension credits, and restores incentives to save. The important power of inertia is being exploited through auto-enrolment and it will help to raise saving but, as the noble Baroness, Lady Hollis, was saying, the automatic rollover of small pots is essential to individuals needing to keep track of their savings to ensure that they do not lose out from duplicated high charges.
We have to recognise that the move to more defined contribution pensions increases uncertainty and the chance of misunderstanding on the eventual pension income that individuals will receive. They put additional burdens of decision-making on individuals who will not have the guidance of trustees. Somehow we have to demonstrate the underprovision for pensions when the actual pension outcome is so uncertain, compared with defined benefit schemes. The efforts of the Pension Minister to promote the concept of defined ambition pensions to provide more certainty and to encourage more risk-sharing is an important initiative. We also have to recognise the ongoing reliance of housing investment and ISAs on individual provision for pensions. It is wise for individuals to make provision through a number of means and we should encourage whatever individuals understand best and whatever they feel comfortable with.
Education was my second theme. A prime task is to get people to make greater provision for their pensions. There are three steps in the need for greater education. We have somehow to get people to recognise the need for pension provision early in their working careers. We have to improve understanding on how individuals can increase their pension income as retirement approaches, and appreciate particularly what fees and charges they are susceptible to. We also have to improve people’s understanding of turning pension pots into retirement income, which is critical.
Communication and advice are key elements in improving understanding. I congratulate the Minister, Steve Webb, on his big drive to make language in the pensions sector more understandable. The department’s own guide to language for auto-enrolment is very helpful. It is not fashionable to say it these days but we need more of the language of the Sun and the Mirror, rather than that of the Telegraph and the Guardian, to improve understanding among those who need the most advice.
Web communications and e-mails from the department, NEST and other pension providers should be targeted at the key stages of the life cycle which are so critical to pension provision—at the early stages of working life and the mid-career key stages, and at those preparing for retirement 10 and five years out, while there is still time to make adjustments. Government must have a big interest in encouraging greater provision because, if it is successful, it will ease the burden of old age on the state.
However, personally I worry about the multiplicity of providers, the ongoing apathy and the lack of understanding among the working-age population. Trust is a key issue. I am also concerned about whether competitive pressures and the habits of the financial services could lead to ongoing threats to trust, which it is so important to sustain. Mis-selling and the underperformance of investments will lead to a serious undermining of confidence and trust in pension provision.
Defined benefit pension schemes had trustees to safeguard pensioners’ interests, but defined contribution schemes are normally governed by contract rather than by a trust deed. In my view, the fiduciary character of the management of pensions should not be affected by this change. We need to strengthen the concept of stewardship and mutual confidence based on trust. The responsibility of agents in pension investment should be defined in a way that establishes and reinforces trust.
The noble Baroness, Lady Drake—I am sad that she is not with us today; normally she would be—and I tried on two occasions to strengthen the Financial Services Bill by proposing that the current FSA regulations should be strengthened to say that investment agents must act in the interests of their customers. It is too weak to say, as the regulations say at the moment, that:
“A firm must pay due regard to the interests of … customers and treat them fairly”.
It is also too weak to say that conflicts of interest must be managed fairly. The fiduciary duties of investment agents now need to be redefined and the recommendations of the Kay review need serious consideration by the Government at an early stage. Simplification, education, communication advice and trust are all essential elements in focusing awareness of pension provision, particularly for smaller savers. However, the greatest element must be trust, as without it we will not get the increase in saving that we need.
Lord Lipsey
My Lords, first, I declare an interest as the unpaid president of SOLLA, the Society of Later Life Advisers. Because I am unpaid, I can say that this is an admirable organisation which takes on independent financial advisers wishing to specialise in the affairs of the elderly. SOLLA trains and accredits them so that people know they get what they need and not what the adviser wants them to hear.
I thank the noble Baroness, Lady Greengross, for raising this important but neglected subject this evening. Its importance has been highlighted by the excellent briefings that noble Lords have received from a number of outside organisations. It may seem a bit negative but I have to note that there was one briefing that I did not get. I did not get a briefing from the Financial Services Authority, and that seems extraordinarily neglectful because, as the noble Baroness, Lady Greengross, made clear, it is the Financial Services Authority’s retail distribution review that is blamed by many for the advice gap that exists in this area. I shall come back to that later. Surely this House had a right to hear the views of the FSA on this matter, its defence of the RDR and its approach to the problems that have been raised. I do not know whether this is FSA incompetence or FSA contempt for Parliament. Neither would surprise me and I hope that there is a more benign explanation, but it should know that this gap has been noticed.
As some noble Lords know to their cost, I am the House’s statistical geek, and I now want to make a statistical point. The size of the pots involved is often exaggerated due to a statistical quirk. The figure of £28,000 that one sees is the size of the average pot. This “average” is, as most of us learnt at school, the mean average but it is not the appropriate average in this case. There are a few very large pots—£1.5 million for judges and some people in the private sector—and a large number of other pots. However, the correct measure—I say “correct” because there is no doubt about this—is the median pot, where half the pots are bigger and half are smaller, and the median is below £20,000. Therefore, we must not allow the quoted size of the average to mislead us as to the scale of this problem.
Many of these pots are small but we should not conclude from that that they are unimportant. Let us take that median £20,000 pot. With a bit of luck, it might yield an annuity of £1,000 a year. I am afraid that to those of us in this House that may not seem a vast sum. However, let us compare it with the state pension, which is £107 a week, although I know that there is pensioner credit and so on on top of that. An annuity of £1,000 amounts to 20% of the single state pensioner’s income, and it makes the difference between mere penury and getting by.
Perhaps I may take this argument a step further. If somebody is well advised, that may make a difference of 40%—this is not an exaggerated example—so the income they get may go up by £20 or £24 a week or, if they are unlucky, it could be as low as £8 or £16 a week. That makes a huge difference to these people—more so than sums many times that amount would make to better-off people.
In order to get a better annuity, you have to be aware that if, for example, you have diabetes and heart disease you can get a bigger pension from your annuity pot. Indeed, if you smoke, you can get a bigger pension from the pot, but perhaps we will quickly pass over that—not many people will be able to afford to smoke much with this amount of money. However, for that, you need to know that you can do it, yet 75% of people do not know what an annuity is. They have not even reached stage 1, and that is why we need to do something about the advice.
I now turn to a slightly more controversial part of my argument on the advice gap. It is said that people are willing to pay only £35 for advice. The cost of advice from an independent financial adviser is £750, and therefore there is an absolutely unbridgeable gap here. I want to make one or two points. First, £750 is a substantial cost but it will be worth it for many people. I gave the example of a 40% gap in the annuity. If you got an annuity which was 40% better, you would pay for the advice within two years of receiving the pension and then there might be 20 or 30 years in which you would get a much higher pension as a result of the advice that you had taken. Therefore, the cost is not that disproportionate.
Secondly, in my experience, many independent financial advisers are prepared to provide advice even though it is unprofitable for them at the time. They do so partly because, believe it or not, many of them are very socially interested people—that is why they have chosen to specialise in older people—and partly because there may be other business down the line. For example, they may be asked to carry out inheritance tax planning so that the person can do something with their house, and they will therefore get future business from someone whom they helped with their pension and whose trust they won. So we should not think that every transaction has to be profitable. Good advisers can find other ways of benefiting from giving advice.
What worries me, however, is that because of the gap between the cost of advice and what people are willing to pay, we will finish in a wrong place by thinking that it is quite alright to give bad advice because bad advice is necessarily better than no advice. It is not. There are plenty of people who have been flogging payment protection insurance and plenty of advisers who have been getting rich off commission. They are kind of looking at ways in which to give inadequate advice to people on a money-making basis. Although I understand the criticism that is made of the RDR and the end of commission, equally I do not want us to jump off the other side and provide poor advice that is provided for the purposes of people making profits by preying on elderly people. Poor people should not get poor advice; they can afford it less well than anyone else, not more.
In the time available tonight one cannot go into the detail of how a system could be devised that avoids that trap but makes sure that advice is available to those who need it. That includes voluntary organisations of the kind to which the noble Baroness, Lady Hollis, referred. There are ways of doing it, perhaps through simplified technology, and so on. It is not beyond the wit of man, though we have yet to see if it is beyond the wit of the Financial Services Authority.
Lord Kirkwood of Kirkhope
My Lords, it is a great pleasure to follow the noble Lord, Lord Lipsey, and very reassuring to all of us to know that we have an expert in our midst in terms of giving us pension advice. If he would be kind enough to set up a surgery on Wednesday morning in the Bishops’ Bar I am sure that there will be a queue, and I will be at the front of it. It is typical of him that he spends some of his time devoting his expertise to this very important subject.
It is a very important subject and the timing of the debate is perfect. The noble Baroness, Lady Greengross, has championed this subject and, indeed, the International Longevity Centre-UK has done an amazing amount of extremely good work. That work is very professional, well thought-through and very constructive. It and she deserve some serious attention in the debate, not just this evening but in the future. I think she is right that the retail distribution review—it will be put in place next year and I do not think that any of us has any fundamental objection to it—represents an improvement but will have unintended consequences. I confess that I am only just beginning to appreciate the extent of the unintended consequences. Some of the figures that we have heard from all sides in all the valuable, interesting and positive contributions to this debate have demonstrated how deep and wide the problem could be if it were allowed to continue to 2050. Some of the figures are worrying.
The noble Baroness, Lady Hollis, in her inimitable and passionate way, argued her case, and particularly the case for women and stranded pots. This is not the first time that I have heard her make that speech but it is always worth listening to her every time she makes it. It is absolutely correct and I would encourage her to go on making it. In fact I have lifted bits of her speeches and used them in other places. I confess that that is a weakness that I have with some of the contributions she makes.
The need is urgent. There is a lot of passion and urgency but I do not think that there is much politics in this. I believe that the industry gets this problem. I have talked to people in industry and a lot of them are coming up with some sensible workarounds for some of the worst effects of this advice gap, which is the core of the debate. It is the centre that needs to be sorted. The noble Baroness, Lady Hollis, is right to say that there are a couple of pieces of pensions legislation in gestation so there might be another opportunity for us to get together once the RDR is implemented to try and get some purchase on making the improvements that are necessary.
I echo the surprise of the noble Lord, Lord Lipsey, that we did not get some briefing from the FSA. I do not think that he missed it in his earlier remarks—it will have got the point. I endorse that; the point he makes is absolutely correct. However, there is a wider problem, alluded to by the noble Baroness, Lady Greengross, which I want to reinforce. I think that there has been a bit of dereliction in duty in terms of the way in which those three main policy departments are co-ordinating their work. She is right to say that the FSA, the Treasury and the DWP, from the respective positions, should have been across this problem with some positive responses before now. I would very much like to know—although I will not ask the question because it might embarrass the Minister, who is completely blameless: she has an alibi; she was not around at the time—whether there have been any ministerial meetings on the subject across those three departments. I think that I know the answer. I do not think there have even been official meetings across the three departments. That is no longer good enough. We now need to require an assurance from the new Minister—we wish her well as she works her way into the department—that she will go back to the department and make sure that she attends a meeting talking about this subject intelligently across these three departments. Nothing less will do. If she does that, she will find ready support from the industry.
Many things are happening. There is a lot of concern out there that the ineffable complications and complexities of our pension rules and regulations are getting in the way. I cannot for the life of me understand why you get stranded pots at the end of your saving life and £2,000 here and £2,000 there. These are in DC invested schemes—the money is there—and I cannot understand why people cannot put it together collectively. I cannot see who would lose from that. It is true that the industry has the idea that it will lose business but I am unconvinced by that argument. We need to be more straightforward about this. My noble friend Lord Patten is right: the austerity that we are in means that we are constrained in what we can do, but that should not stop us introducing innovative approaches to sort out some of these matters.
Of course, I support what my noble friend Lord Stoneham said about what the Government are doing. Steve Webb has had a huge workload—successfully discharged, as far as we can see—on the NESTA front and therefore he has not been looking for things to do. I genuinely support the long-term vision he has because it is the correct one. He may say, “Well, we have been looking at issues such as pots following the member automatically when they transfer jobs”—which I think is a correct thing to do—but I would like to see the colour of that in some of the upcoming legislation before I can be certain that that was secured. Knocking small pots into fat pots—or whatever the parliamentary language is for explaining that—seems entirely possible with a little lateral thinking and a little support from the industry, which, as I say, is there.
I hope that when my noble friend replies she will at least undertake to take back some of the important, positive ideas that have been discussed this evening and see if she can press them across the DWP, the FSA and the Treasury.
My noble friend would do me a service if she would look again at the Money Advice Service, because my noble friend Lord Stoneham is right about the need for education. I am worried about the Money Advice Service. Since April it has had responsibility for debt counselling across the United Kingdom. It has a budget of £78 million. That sounds like a lot of money but when the universal credit comes into being over the next five years or so I think that it will be swamped. It may be that that should be the priority, but that is not the point that I am making. The point I am making is that if the FSA levy produces £78 million—if I have got the figure correct—it will need to be monitored quite carefully. The Money Advice Service is now in a crucially important position to help people with OMO questions and decumulation issues as they approach retirement; it is an essential co-part of its work. I do not think that it is properly resourced at the moment for the future demands that will be placed on it. I would be grateful if the Minister could go back and ask cogent questions about whether the service believes that it has the resources to discharge the important responsibilities which Parliament has put on it, and provide us with some reassurance at a future point in the debate.
This is a very important debate and I hope that the Minister goes back charged up with a new enthusiasm to get the co-ordination across the departments that is so necessary to achieve positive outcomes in this area.
Lord McKenzie of Luton
My Lords, we should be grateful to the noble Baroness, Lady Greengross, for the opportunity to discuss, albeit briefly, issues of access to good advice, particularly in relation to small pension pots. The debate touches upon just one of the issues which are part of the challenging backdrop to the current UK pension system, which has an aging population but with working-age people still not saving enough to meet their expectations of income in retirement.
Our discussion this evening has mostly been around private pension provision, be that personal pensions or workplace pensions, but the state pension has cropped up—the noble Lord, Lord Stoneham, and my noble friend Lady Hollis referred to it. We should not forget that advice in relation to the state pension may be appropriate as well for people who do not have a full contribution record—advice on how they should deal with that and advice on whether they should defer their pension and, if they do, whether they should take the lump sum or the extra annual amount. So not only private pensions are involved.
My noble friend Lady Hollis, in particular, referred to proposals to create a single-tier state pension and the benefits that that would have in relation to rewards for saving. I certainly agree with that. The White Paper which was issued last week states that the reforms will be introduced in the next Parliament, that the new rules will apply to future pensioners only and that the Government will publish more details on their plans for single-tier shortly. Can the Minister expand on how short is “shortly” and whether we might expect the legislation in this Parliament even if it may not be introduced until the next Parliament, if that is a matter for the coalition’s determination?
We know that too many people do not save for a pension outside of the state provision because they do not trust the system. ICM research shows that 56% of savers lack confidence in those who manage their investments; 60% of private sector workers are not saving for a pension at all; and old DB schemes are available to fewer and fewer private sector workers. That is why the introduction of auto-enrolment in October this year, developed under a Labour Government but with cross-party support, is so important. It turns pensions inertia on its head: you are enrolled unless you positively opt out. It is to be hoped that auto-enrolment will be part of the route to restoring trust and confidence in the pensions system.
If people are to have more secure retirements, that confidence must not just be about decumulation; the issues run throughout the pensions life cycle. They relate to contribution levels, investment strategies, default funds and, of course, to charging. We know, for example, that an annual management charge of 1.5% can reduce a final pension pot by 22%, while a 0.5% charge—the NEST equivalent—will reduce the pension pot by 9%. Greater transparency and more straightforward charging structures are essential. The noble Lord, Lord Patten, spoke with some passion on this matter.
The provision of financial advice has been affected by the upcoming implementation of the retail distribution review. While this will raise standards in the advice sector and change the way people pay for advice, unless further action is taken an unintended consequence, referred to by a number of noble Lords, is likely to be that those on modest and small incomes and pension pots will be excluded from or priced out of the advice market—and this at a time when the number of small pots is set to grow as auto-enrolment draws more into pension savings and a changing job market means that, on average, an individual will change jobs 11 times over their lifetime, and with the prospect of the abolition of short-service refunds. The noble Lord, Lord Kirkwood, said that he appreciated fully the extent of what that change may bring.
We know that small pension pots are costly and inefficient to administer, and can be difficult for individuals to keep track of and convert into pension income. We therefore support the Government’s attempts to address the inertia preventing consolidation by some form of automatic transfer. The current proposal is that the pot will follow the individual. Perhaps the Minister can give us an update on progress on the thinking around that. Further, can the Minister say whether it will apply to existing pots or just future pots that are created? The logic would seem to be that pots can follow individuals into NEST. Can the Minister confirm that that is going to be the case?
The current landscape was the subject of a retirement income summit hosted by the International Longevity Centre and the actuarial profession in June this year. I think that the noble Baroness, Lady Greengross, is a distinguished board member, and I believe that the noble Lord, Lord Kirkwood, was at the summit. It saw the immediate challenges as the advice gap, too few savers exercising the open-market option, insufficient focus on the type of annuity purchased rather than the annuity rate, and information overload. What is of particular concern from the analysis is that only 2% of annuitants who did not take advice bought an enhanced annuity, although up to 50% are thought to be eligible. This means that thousands of people will miss out on hundreds of pounds of income each year. The National Association of Pension Funds estimates that half a million people a year fail to shop around for the best annuity, losing in aggregate £1 billion a year in income. The failure of married couples to include a spouse’s benefit can lead to significant hardship for a dependent spouse on the death of the policy holder. Clearly, these outcomes could be improved through access to proper advice. My noble friend Lord Lipsey said that £1,000 a year may not be a huge sum for some in your Lordships’ House but that for some it means the difference between surviving and going under.
The ABI code of conduct on retirement choices may assist in this, and the recent government White Paper points out that the open market option review group is currently developing an evaluation test for the code. Can the Minister tell us whether the evaluation is actually under way and what further steps might be contemplated in the light of it? A brief from the Society of Later Life Advisers, referred to by my noble friend Lord Lipsey, states that while the cost of advice is an issue, and while government action on improving transfers and dealing with small pots is welcome, what really prevents people taking advice is that they do not know where to go or whom to trust. Raising awareness of the benefit of advice is important, but in itself it will not overcome the hurdle of lack of trust.
There is of course no lack of information and guidance from providers and organisations such as the Pensions Advisory Service, referred to by my noble friend Lady Hollis, the Money Advice Service, to which the noble Lord, Lord Kirkwood, referred, particularly on the volume of queries it is getting and likely to get, and the Pension Service itself for the state pension. But that information and guidance must be distinguished from advice, and indeed it can be part of the problem of information overload.
The noble Baroness, Lady Greengross, made an important point about clarity on the distinction between advice and information. Noble Lords, and in particular the noble Lord, Lord Kirkwood, will recall the debates we had on auto-enrolment about what employers had to do and whether it was information or advice: it was, of course, the former. The retirement income summit proposed that the regulator should work with the pensions industry to develop a solution for those with small pension pots. In particular, the FSA should develop guidance for providers on how to implement simplified advice models safely and in the consumer’s best interest. It is impossible to disagree with this proposition but it is not easy to deliver.
In conclusion, I echo the comments of my noble friend Lord Lipsey: poor people should not have to put up with poor advice.
Baroness Stowell of Beeston
My Lords, one of the great advantages of being a Government Whip is that we get to learn about lots of new areas of policy that we may not have been exposed to before. However, it also brings the great responsibility of sometimes having to respond to debates where those who have participated are far more experienced and provide greater expertise on the matter than the Minister in charge. That is particularly so in this debate. I congratulate the noble Baroness, Lady Greengross, on securing this debate and pay tribute to her for all her work in the world of pensions for so many years.
I reinforce and share the views of my noble friend Lord Patten. I, too, am very concerned about people who have done the right thing and saved hard for their pensions. This is one of the reasons why I am pleased to be here tonight and to participate in this debate. I also note the important point made by the noble Lord, Lord Lipsey: we are talking about people with small pots and, to many people, the small amounts of money that we are talking about make big differences. Like the noble Lord, Lord Kirkwood, I acknowledge that the topic of pensions does not lend itself to politics, and nor should it. However, the Government want people to be able to get the maximum benefit from their pension savings and we recognise that people can, understandably, find making decisions about their pension and the process of securing an income in retirement complicated.
We need to be clear that professional financial advice is not, and never has been, free, as has been acknowledged by many noble Lords tonight. Even though many people may have thought in the past that the advice that they were receiving was free, the cost of paying for advice may outweigh the benefit of receiving it. This is particularly important for those with small pension pots and we should not assume that paying for financial advice is the right option for everyone. It is important that consumers can make a decision about whether approaching a financial adviser represents good value for money. To do this, they need to understand how much it will cost and that the adviser’s interests are aligned with their own. The Government support the Financial Services Authority’s retail distribution review—or the RDR as it is commonly called—which seeks to bring transparency to consumers on these issues. In response to the point made by the noble Lord, Lord Lipsey, and repeated by the noble Lord, Lord McKenzie, that poor people should not receive poor advice, one of the added benefits of the RDR is that financial advisers will be required to have a higher level of qualification to ensure that the quality of their advice is better.
We also need to bear in mind the basics of what people need to know to make these decisions. As has been mentioned, understanding the options available and the language alone can be overwhelming. That is why, as the noble Baroness, Lady Hollis, made clear, the free, generic information and advice offered by the Money Advice Service and the Pensions Advisory Service are so valuable. The advice that is available from those two services, and particularly the Money Advice Service, includes helping people to think about whether professional advice is appropriate for them, because it may not necessarily be necessary.
Clearly it is important that professional financial advice is available for those who have decided that it is appropriate for them. However, we should be wary of overstating the problem about access for those with small pension pots. A recent survey by the FSA revealed that 63% of advisers are planning to continue to offer advice to those with savings and investments of between £20,000 and £75,000. A further 38% of advisers plan to continue offering advice to those with less than £20,000. I will come back a little later to the point made by my noble friend Lord Patten about pooling and whether it is possible to pool in order to access advice.
People have big decisions to make at retirement. I am pleased to say that this Government have already taken steps to ensure that people have more flexibility and better information to support those decisions. Of course those with pension savings below £18,000 have an additional flexibility in their options, which is that they can take their savings as a lump sum. For those who want to be able to guarantee an income for life, from 1 March next year the process of buying an annuity from an ABI member will include making customers consider their options for both the type of annuity that they need and which provider to purchase it from. This is what is known in the jargon as the “open market option”, which, as several noble Lords have said, is all about helping consumers to shop around.
The new ABI code of conduct, as part of the package of measures announced by the OMO review group in March, provides a real step change in the requirements placed on providers and in assistance to annuitants. The package has been developed to ensure that people approaching retirement will receive much greater support to get the best possible retirement income.
The noble Baroness, Lady Greengross, asked whether the Government would set up a forum to discuss the issues that have been raised in this debate. The noble Lord, Lord Kirkwood, in his usual colourful way, wanted me to be sure that there was cross-party working on this area. There is already a group similar to that described by the noble Baroness, which is alive to the issues raised. That is the aforementioned jointly led DWP-Treasury open market option review group. The group includes representatives from industry, consumer organisations, regulators and the Government and has met to discuss these issues since 2007. That has prompted a laugh from the noble Baroness, Lady Hollis. I have noted that.
The group has collaborated to deliver a number of key outcomes over the past five years, including the package of measures announced in March. It was responsible for the joint letter that was sent to the ILC on these matters earlier in the year. The OMO review group is now in the process of agreeing an evaluation strategy for this package. This will include assessing both the impact and success of the new measures but will also aim to consider the extent to which there are issues that remain to be addressed.
Of course, the decisions that someone can make at retirement will always be limited by what they have done and how much they have saved before retirement. That is why the Government have taken steps to encourage a culture of saving. The introduction of automatic enrolment will hopefully see between 6 million and 9 million people newly saving or saving more into a pension. The Government have also established NEST, which has been referred to, as a high-quality, low-cost pension scheme to support this. However, our work continues.
For example—the noble Baroness, Lady Hollis, spoke very passionately about this—people change jobs and will tend to leave small dormant pots behind them in their former employers’ schemes. The Government believe that as individuals move jobs their pension pots should follow them, as far as is possible. Consolidating pension pots helps to drive down administrative costs and boosts engagement with saving for retirement. The DWP is working with the pensions industry to develop an automatic transfer system for these small dormant pension pots. The aim is to develop an efficient and cost-effective system that minimises the risks to individuals and works to drive down charges.
This is probably an appropriate point at which to respond to the idea put forward by my noble friend Lord Patten about whether the Government would support an industry initiative to pool pensioners’ assets and increase purchasing powers. The Government welcome innovations to the industry that meet the needs of consumers, so my noble friend’s idea is certainly one that we would want to consider further.
The noble Baroness, Lady Hollis, and the noble Lord, Lord McKenzie, asked in relation to small pots whether legacy pots are yet in the scope of automatic transfer. They are not at this time, but we have not ruled out the option that they will be brought into scope in future. In addition, as of April 2012, up to two small personal pension pots of £2,000 or less can be taken as a lump sum by those aged 60 or over, even where people have other savings.
Baroness Hollis of Heigham
I was looking earlier today at the 2009 regulations, which may be what the noble Baroness is referring to. She may wish to follow this up by letter, but my understanding is that those pots have to have been earned in the previous three years. The problem with legacy pots is that they could have been earned 20 or 30 years before. I realise that this is a policy issue currently under discussion and that the noble Baroness will almost certainly wish to take advice from colleagues, but it would be hugely helpful to all of us if the Government could find a way to bring those legacy pots that are not covered by the 2009 changes into any future system, so that people do not find that some of their smaller pots remain inaccessible.
Baroness Stowell of Beeston
On a matter such as that, I will have to write to the noble Baroness.
Lord McKenzie of Luton
Perhaps the Minister might write on another point: whether or not the automatic transfers—be they legacy pots or otherwise—could be transferred into NEST.
Baroness Stowell of Beeston
I will certainly write to the noble Lord about that matter as well.
The noble Lords, Lord Stoneham and Lord Kirkwood, referred to the Government’s Reinvigorating Workplace Pensions strategy. As they acknowledged, the Pensions Minister, Steve Webb, announced a range of proposals to restore people’s confidence and trust in pensions and to encourage savings. The most significant, in terms of scale, is the defined ambition scheme. I absolutely acknowledge the point made by all noble Lords tonight that there is a serious issue about lack of trust and confidence in pensions and savings; that is something on which the Government are very clear. For me, however, perhaps the most important point made in that strategy—indeed, it is one specifically raised by the noble Lord, Lord Stoneham, although others mentioned it too—was the Minister’s call on industry to use plain language when sending information to its members. As a new reader on this topic, I absolutely share people’s view that the jargon around pensions can create a real barrier.
I have very little time left but would like to say in response to the proposals from the noble Lord, Lord Patten, about perks—as he described them—for well-off pensioners that I will of course highlight to my right honourable friend the Chancellor what has been said. However, if I may beg the indulgence of the House, as my mum will definitely be watching on a matter such as this, I would be doing her a great disservice and be in huge trouble if I did not say that many of her friends, as pensioners, make the point to me on many occasions that they feel passionately about their bus pass. I want to mention that for my mum.
In conclusion, the number of stakeholders who have engaged with the Government in developing all these policies is indicative of common goals and a real drive by all to ensure that consumers can engage with the choices that they need to make about their retirement income. In the future, the FSA will be closely monitoring the impact of the RDR on consumers’ engagement with the market through its post-implementation review. An evaluation strategy will be agreed for measuring the success of the open market option package of measures, including the code of conduct. More generally, the Government remain committed to ensuring that everyone has the information and tools that they need to make responsible and informed decisions at retirement. I will of course follow up this debate with any letters to cover the issues that I have not been able to cover today.