House of Commons

Monday 3rd December 2012 Commons Chamber

Monday 3 December 2012

The House met at half-past Two o’clock

Prayers

Monday 3rd December 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 3rd December 2012 Commons Chamber

The Secretary of State was asked—

[Mr Iain Wright (Hartlepool) (Lab)]

1. What plans he has for vocational education; and if he will make a statement.

[Mr Jim Cunningham (Coventry South) (Lab)]

2. What plans he has for vocational education; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

World-class vocational education is vital for a world-class economy, so we are bringing rigour to vocational education by recognising the best qualifications, strengthening apprenticeships and introducing a Tech Bac to reward and celebrate stretching occupational education.

[Mr Wright]

EngineeringUK has today published a report showing that this country needs to double the number of engineering recruits and triple the number of engineering apprenticeships. It calls for face-to-face careers advice in schools and additional assistance to help schools appreciate 21st century engineering. The Government have had to U-turn over their engineering diploma, so will the Minister U-turn again and implement EngineeringUK’s recommendations in full?

[Matthew Hancock]

I met EngineeringUK last week at the launch of its report, so I am well versed on its recommendations and very supportive of the need to increase the number of engineers in our country, something that has been sadly lacking for far too long. As the hon. Gentleman knows, we are introducing, along with the Royal Academy, new qualifications that fit the accountability system. We will do what it takes to ensure that this country has enough engineers.

[Mr Jim Cunningham]

What assessment has the Minister made of the Richard report, which recommends that apprenticeships should last at least a year?

[Matthew Hancock]

I warmly welcome the Richard report, which stresses the need for rigour in apprenticeships and for apprenticeships to be more employer focused. I am studying it in great detail. The hon. Gentleman says that apprenticeships need to be for a minimum of a year, and in almost all cases that is already happening, thanks to changes introduced by my predecessor, but we want to look at all the recommendations and see which we can implement.

[Mr James Gray (North Wiltshire) (Con)]

I welcome some of the things the Minister said to the hon. Member for Hartlepool (Mr Wright) about engineering, but is he not concerned that Sir James Dyson—Dyson engineering is based in my constituency—said last week that he needs 200 new designers and engineers in Malmesbury alone but cannot find them and that across the nation we are desperately short of them. What will we do to improve science, engineering and design in our schools and universities?

[Matthew Hancock]

Not only is the number of engineering apprenticeships up, but a higher proportion of young people are now starting STEM—science, technology, engineering and maths—degrees at university. That is going up, rather than down, as it was before. This is an area of huge concern to me and I am working extremely hard to try to put it right.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that the university technical colleges, one of which will open in Harlow in 2014, will transform vocational education and provide young people with a conveyor belt to pre-apprenticeships?

[Matthew Hancock]

Yes, I do. I was almost expecting an invitation to visit the UTC in Harlow, which I would love to see. UTCs across the country are about trying to fill the gap that has been left for far too long, and this Government are dealing with it.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

The Minister confirmed in The Times on Saturday the report that the Government

“is stealing the idea for a Technical Baccalaureate proposed by Ed Miliband”.

Does he agree that, in addition to high-quality apprenticeships, English and maths until age 18 and quality technical education before 16 will be crucial to the success of such a baccalaureate?

[Matthew Hancock]

I am absolutely delighted by the positive tone coming from the Opposition Front Bench. The Tech Bac, as suggested by Lord Adonis, a man for whom the Government have huge respect, is one of the things we will do to ensure higher quality occupational and vocational qualifications and more respect for them. I look forward to consulting widely and will set out more details in due course.

[Stephen Twigg]

But does the Minister agree that there is a real risk that this is out of kilter with the pre-16 reforms that the Government are proposing? Last week’s excellent report on schools by the CBI stated that the

“mistakes of the past… may be repeated in the”

English baccalaureate. It is urging a pause. Both head teachers and business leaders are now united against the Government’s EBacc reforms, so will they think again?

[Matthew Hancock]

The CBI will be very surprised to be quoted in that fashion. The crucial point is that a common core of strong English and maths is vital for underpinning technical, occupational, vocational and academic qualifications. The single most important pair of qualifications that anybody can get for their employability is GCSE-level English and maths, and so making sure that there is a strong common core at the age of 16 is a vital part of stronger occupational and vocational education after that.

[Henry Smith (Crawley) (Con)]

I am delighted that on 14 December I will officially open the new university presence in Crawley. Will the Minister join me in congratulating Central Sussex college on introducing STEM vocational courses, working with some of the first-class companies in my constituency, as well as extending apprenticeships?

[Matthew Hancock]

Yes. I have not been able to visit the college that my hon. Friend talks about, but from what I have seen of it, it is exactly the sort of thing that we need to do in extending upwards the quality chain in vocational education and engaging with employers—businesses and public sector employers—to make sure that we provide the skills that they need in future.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

3. What steps he is taking to encourage the use of laptops and tablets in the school learning process.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

Technology provides a great opportunity to get high-quality teaching materials and experiences from around the world into our classrooms, but it is key to remember that the quality of teaching is paramount in educational achievement. That is why we have given heads the power over their own budgets to decide how best to spend money.

[Mr Sheerman]

The Minister will not be surprised to find me disagreeing with her analysis. The fact is that there is a growing digital divide between schools that take technology seriously as a way of learning and those that do not. It is up to this Government, who got rid of the Department’s e-learning unit, to realise that leadership in this respect will take us to an educational system for the future.

[Elizabeth Truss]

We are extremely keen as a Government that children do not just use technology but understand how it works because they are able to code and programme from an early age. We are working with leading experts to develop programmes in computing so that children are able to do that. In fact, the technology needed to achieve it is very cheap. A parent or school can get Scratch from Massachusetts Institute of Technology for free and the Raspberry Pi device for under £20. This is not an issue of funding but of teaching and inspiration, and the leadership that we are showing.

[Andrew Percy (Brigg and Goole) (Con)]

I know from my own time in the classroom how important digital media resources can be in helping to deliver first-class lessons, but too many schools in my constituency are unable to access fast enough broadband speeds. May I urge my hon. Friend to take up the mantle of schools on the Isle of Axholme, in particular, to ensure that our broadband delivery plans are rolled out as quickly as possible?

[Elizabeth Truss]

I completely agree with my hon. Friend that high-speed broadband is important so that students can access the best-quality teaching materials from around the world. That is why, as a Government, we are pursuing high-speed broadband across the country.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Bridge academy in Hackney and our university technology college, among other schools in Hackney, provide proper digital learning for jobs for five years hence. Given the Minister’s words about the importance of learning in this field, what is she doing to make sure that the school curriculum is preparing students for the work force for businesses such as those in Tech City which require this home-grown talent?

[Elizabeth Truss]

We are working with leading figures in IT and computing to develop a programme of study that will encourage children to learn to code and programme from an early age. The problem with the previous information and communications technology curriculum, as everybody agreed, is that it was focused on using programmes instead of understanding how to programme.

[John Pugh (Southport) (LD)]

I thank the Minister for giving that answer, which is very encouraging. However, what is the timetable for this new enthusiasm for programming?

[Elizabeth Truss]

The timetable is imminent.

[Mr David Amess (Southend West) (Con)]

4. What steps he is taking to improve discipline in schools.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

We are taking decisive action to equip teachers to restore discipline in schools. No longer can a decision to exclude pupils be undermined by an appeal panel against the best interests of a school and other students in it. We are also strengthening the law so that teachers can issue same-day detentions.

[Mr Amess]

What steps is my hon. Friend taking to ensure that head teachers are able to exclude pupils whose behaviour becomes unacceptable, and what help is then given to those pupils?

[Elizabeth Truss]

We are making sure that the ultimate decision on exclusion is made by a school governing body. Under the previous Government, appeals panels had the final say and 810 permanently excluded pupils were reinstated in schools between 2002 and 2010. We are encouraging schools to take an interest in the long-term education of those students who are excluded and we are trialling approaches so that they take an interest.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

One of the best ways of ensuring discipline in the classroom is well-trained, motivated teachers. Could the Minister therefore explain why Keele university, which supplies many excellent teachers to Stoke-on-Trent, is losing 100% of its capacity to train teachers under the new School Direct proposal? We know that if universities train locally, the teachers will go locally. Why are the Government undermining aspiration in Stoke?

[Elizabeth Truss]

We are giving head teachers the power over how they train up teachers and how to ensure that we have the best quality teachers in the classroom.

[Caroline Dinenage (Gosport) (Con)]

5. What steps he is taking to raise standards in mathematics in schools.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

We treat maths as a very high priority and are working to attract the best graduates into mathematics teaching through bursaries of up to £20,000. From 2014, we will remove calculators from primary tests to ensure that pupils master the basics, and we are reforming the national curriculum to focus on core arithmetic, which is key to so much future success in employment.

[Caroline Dinenage]

With that in mind, what steps is my hon. Friend taking to ensure that children have a good basic grasp of mental arithmetic before they are able to rely on calculators?

[Elizabeth Truss]

At present, the evidence suggests that 10-year-olds in England are more likely to use calculators than those in virtually any other country in the world, and we are 28th in the world league tables for maths. It is important that children understand and are fluent in multiplication, division, addition and subtraction before they use calculators. That is why we are removing calculators from the primary tests, in line with high-performing countries such as Hong Kong and jurisdictions such as Massachusetts.

[Kelvin Hopkins (Luton North) (Lab)]

A dozen or so years ago, Lord Moser concluded in his report that more than 50% of people in Britain were innumerate and illustrated that by saying that 50% of the population do not understand what 50% means. Recently I attended a National Numeracy reception and spoke to Lord Moser again, and others, and the problem still exists. Are the Government able to put their finger on precisely what has gone wrong and is the Minister doing enough to put it right?

[Elizabeth Truss]

One of the issues we have identified is too early a reliance on calculators in some classrooms. There is also an over-focus on data in the primary curriculum at the expense of arithmetic and number, which are the basis of a strong mathematical understanding later in life. We are readjusting the balance to make sure that those core basics are secure first.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

Will the Minister join me in welcoming the formation of National Numeracy, which is a fantastic new organisation? It has expressed concern about the new maths curriculum for primary schools and says that there is too much

“rote learning and not enough emphasis on problem solving and using maths in real-life contexts.”

I agree with the Minister that numeracy is vital, but I fear that this may be a lost opportunity to improve maths education in primary schools. Will she work with National Numeracy and teachers to develop a maths curriculum that will really make a difference?

[Elizabeth Truss]

I suggest that the hon. Gentleman visit Woodberry Down primary school in Hackney, which has already adopted the new national curriculum that we have suggested, including more advanced fractions, multiplication and division. I have seen the inspirational teaching at that school and the excitement on children’s faces as they play games using advanced fractions and grasp that the underlying principles of mathematics will help them for the rest of their lives. That is what our new curriculum does: it allows excellent teachers to inspire the next generation.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

6. What assessment he has made of the current standard of religious education teaching.

[The Secretary of State for Education (Michael Gove)]

Ofsted’s subject report in 2010 found that religious education teaching was not good enough, but teacher quality is improving. In 2012-13, 78% of religious education teacher trainees held a 2:1 or higher degree classification, compared with just 70% in 2011-12.

[Paul Goggins]

I am grateful to the Secretary of State for that answer. If he believes that the best way to achieve academic rigour is through the English baccalaureate, is he willing to reconsider the inclusion of religious education as a core subject, at least for faith schools, in order that they can uphold their ethos and parental choice, as well as their high educational standards?

[Michael Gove]

I have enormous respect for the right hon. Gentleman. He is a stout advocate for faith schools and I want to underline the important role that they play in state education. We have no plans to change the English baccalaureate, not least because religious education remains a compulsory subject in the national curriculum. Well taught, it can take its place alongside the subjects in the English baccalaureate in a broad and balanced education.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend will know that I value faith schools and the teaching of religious education. However, what steps is he taking to ensure that religious hatred is not taught by some faith schools and religious teachers?

[Michael Gove]

My hon. Friend has a distinguished record in fighting extremism of all kinds. That is why I am delighted to be able to say that we have set up a due diligence unit in the Department for Education to prevent extremism. It has staff from the security services and elsewhere, and will ensure that public money is not abused by those who would preach hate rather than love.

[Dan Rogerson (North Cornwall) (LD)]

To follow on from the answers to the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and the hon. Member for Stoke-on-Trent Central (Tristram Hunt) about the need for specialist teaching, the number of institutions training religious education teachers has declined. Will the Department keep a constant review on the number of teachers entering the profession in subjects that are outside the EBacc to ensure that there is adequate expertise across the specialisms?

[Michael Gove]

My hon. Friend is quite right to hold my feet to the fire on that. The headcount for religious education teachers at key stage 4 has increased over the lifetime of the Government from 10,400 to 10,700 and there are two applicants for every available post for a religious education teacher, so there is no evidence of a decline in numbers or quality.

[Iain Stewart (Milton Keynes South) (Con)]

7. How he plans to deliver more rigorous vocational education in schools.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

School performance tables are being used to incentivise the teaching of the highest-value vocational qualifications. From September 2012, the vocational qualifications taught to 14 to 16-year-olds have had to meet rigorous new standards. From next year, we will identify the highest-value vocational qualifications for 16 to 18-year-olds, thereby removing thousands of weak and poor quality qualifications.

[Iain Stewart]

Will my hon. Friend ensure that employers have a greater role in designing the vocational qualifications that are taught in schools?

[Matthew Hancock]

Yes, I absolutely will. I believe passionately that it is only when all vocational qualifications are high quality that all vocational qualifications are seen to be high quality. Employers have a critical role in making that happen.

[Andy Sawford (Corby) (Lab/Co-op)]

The shadow Secretary of State and I recently visited Tresham college in my constituency of Corby and east Northamptonshire, where we met many apprentices who were not able to find work experience placements and, sadly, had little hope of local employment. What message of hope does the Minister have for those young people in my constituency?

[Matthew Hancock]

I welcome the hon. Gentleman to questions, having welcomed his eloquent maiden speech on a similar subject. We are looking to introduce traineeships, which will include English and maths for those who do not have level 2 qualifications, work experience and work preparation. That will ensure that as many people as possible are ready for work and know how to get and hold down a job. That will be another step in our important efforts to tackle youth unemployment.

[John Glen (Salisbury) (Con)]

8. What progress he has made on introducing education, health and care plans for children with special educational needs.

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

Education, health and care plans, which are an integral part of our reform of the special educational needs system, are being tested through 20 pathfinders across 31 local authorities. Independent evaluation suggests that they are making good progress in designing single assessment and planning processes. The pathfinders expect to have completed more than 300 plans by the end of December. They will continue to inform the development of our draft legislation.

[John Glen]

I thank the Minister for that helpful response. What processes will there be to ensure that the plans remain accountable to parents and families, and to ensure that the provisions that are laid out are fully implemented?

[Mr Timpson]

My hon. Friend raises an important point. Our proposed reforms maintain current protections for families, but they will go further in strengthening accountability by placing a duty on local authorities and health services to plan and commission services jointly, as well as to extend the current right of appeal to young people between 16 and 25 in further education and training.

[Mr Robert Buckland (South Swindon) (Con)]

Does my hon. Friend agree that unless joint commissioning works practically on the ground, with health and education working together, education, health and care plans risk not being as effective as we would like in the legislation?

[Mr Timpson]

I agree with my hon. Friend that we must make progress to integrate education, health and social care as closely as possible, from the formulation of a plan through to any dispute there may be between, parents, young people, local authorities and health services. That is why I am still engaged in discussions with the Department of Health, which continue to be extremely constructive.

[Dr Julian Lewis (New Forest East) (Con)]

I am glad that the Minister mentioned integration with social care. He will recall the recent debate I secured on the funding gap for those between the ages of 16 and 18. Further education colleges in the New Forest feel that they cannot offer support for more than three days a week instead of five days, and that has taken place progressively since 2008. I know the Minister intends to write to me in more detail, but is he concentrating on that important gap which places an extra burden on parents?

[Mr Timpson]

My hon. Friend’s debate highlighted an important area that we must get right. I will be writing to him in great detail about how we will ensure that, where appropriate, five days’ support for children with special educational needs and disabilities will be available through their education. I will be happy to discuss that matter with him as we proceed with the legislation.

[David Rutley (Macclesfield) (Con)]

9. How many primary schools have become sponsored academies since May 2010.

[The Minister for Schools (Mr David Laws)]

Since May 2010, 146 sponsored primary academies have opened, including two new provision sponsored primary academies. In addition, 15 underperforming primary schools have converted and joined an academy chain.

[David Rutley]

I was recently honoured to open a new classroom at Mottram St Andrew primary academy. That will not only help to enhance the facilities available to pupils, but will assist the academy’s work with School Direct trainee teachers in conjunction with the university of Manchester. Does my right hon. Friend agree that progress in outstanding schools such as that one helps to highlight the progress and steps that are being made by innovative academy schools, and that that should encourage other primary schools to seek academy status?

[Mr Laws]

I agree with my hon. Friend, and that is a good example of the way outstanding schools can use the freedoms of academy status to innovate and improve their standards further. Too many primary schools in the country are not reaching the level of good and outstanding—we heard from the chief inspector that 2 million children are still being educated in schools that are neither good nor outstanding. Academy status is a potential way to improve the leadership and governance of those schools.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Minister will be aware that Coventry primary schools are rated lowest in the country in the latest Ofsted report, and there is widespread dismay in Coventry about that. Although no one is convinced that sponsored academies are the whole or a necessary part of the answer, at the request of the Coventry council member responsible for education, I have written to the Secretary of State suggesting that resources in the Department for Education might help to rectify the situation. I am looking forward to an early reply. When might I get it?

[Mr Laws]

The hon. Gentleman can expect a very early reply, and I am delighted that he and other hon. Members are taking seriously the conclusions of Sir Michael Wilshaw who has drawn attention to the massive disparity across the country in the proportion of schools that achieve good and outstanding status. There are boroughs in inner London, for example, where almost 100% of schools achieve good or outstanding status, right down to those local authorities where barely 40% of schools achieve that. Either I or one of my departmental colleagues would be delighted to meet the hon. Gentleman to discuss the issue further.

[Yvonne Fovargue (Makerfield) (Lab)]

10. What plans he has for the safeguarding of children; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

The child protection system is not working. That is why we are undertaking reform. We are reforming the social work profession and removing the bureaucracy which holds gifted professionals back, and demanding greater transparency and efficiency from local authorities.

[Yvonne Fovargue]

A recent all-party group inquiry highlighted the vulnerability of children who go missing from care, and the risks of physical and sexual exploitation. Does the Secretary of State therefore agree that local authorities and police forces should offer training to front-line and managerial staff working with children to raise awareness of the risks associated with running away and of the vulnerability of all children, including older children?

[Michael Gove]

The hon. Lady raises an important point. My former colleague, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), responded to that report and made a compelling argument for ensuring better data sharing between local authorities and the police on the location of children within children’s homes to ensure that we can provide yet better protection for them. However, that is only one part of a mosaic of policies we need in order to give those children and young people a better chance.

[Mr Peter Bone (Wellingborough) (Con)]

Given the Secretary of State’s opening remarks, could he start with Northamptonshire county council? Two foster parents came to see me. Two very difficult children were placed with them—they are the same ethnic background. They have bonded very well with the children and are now one family, but—would you believe it?—the county council is trying to break the family up to save money. Will the Secretary of State intervene in this matter?

[Michael Gove]

I am grateful to my hon. Friend for bringing this case to my attention—I shall look at it more closely. It is vital that all recognise that those who agree to foster children are responsible for bringing love and stability to some of the most damaged children and young people in our society. We should do everything possible to support them.

[Lisa Nandy (Wigan) (Lab)]

The Children’s Commissioner’s recent interim report was reportedly dismissed by senior Government Ministers as “hysterical” and “half-baked”. According to news reports, Government sources said:

“It is difficult to overstate the contempt the Government has for the methodology and analysis”.

Does the Secretary of State want to take this opportunity to reject those comments; to join me, the NSPCC and Barnardo’s in welcoming that important report on child sexual exploitation; and to tell hon. Members what concrete steps he plans to take immediately to ensure that the 16,500 young people identified in the report as at immediate and high risk of exploitation are protected before harm comes to them?

[Michael Gove]

I am grateful to the hon. Lady, and to the deputy Children’s Commissioner for her work. I asked her explicitly to accelerate part of her report to inform our work on improving child protection. The hon. Lady says that 16,500 are at risk. The methodology used to identify them is not shared by every professional in the field, but we can put that statistic to one side. The urgency with which we need to tackle the problem is undoubted, and I commend to her the action plan that I outlined in a speech to the Institute for Public Policy Research I made just a few days before the report was published.

[Fiona Mactaggart (Slough) (Lab)]

11. What assessment he has made of the likely contribution to the UK’s international achievements of studying creative subjects in school; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

The arts are mankind’s greatest achievement. Every child should be able to enjoy and appreciate great literature, music, drama and visual art.

[Fiona Mactaggart]

But is the Secretary of State aware that Britain’s record in Nobel prizes—we have won 19 prizes for every 10 million of our population, whereas the USA has won 11 prizes per 10 million, and the EU has won 9 per 10 million—is achieved partly as a result of the combination of excellent science education and a strong creative tradition throughout our education system? At the same time, the Secretary of State’s EBacc proposals will result, according to research he has commissioned from Ipsos MORI, in something like a quarter of our schools dropping subjects such as art and design, design technology, music and so on. Will that mean that our international achievements, including in Nobel prizes, will slide down?

[Michael Gove]

If I thought the EBacc proposals would lead to that, I would not be able to sleep at night, knowing that the ghosts of Rutherford and Churchill were hanging over my bed and chiding me for my failures. I had the opportunity to speak to representatives of a variety of arts organisations today. They applauded the work we have done, not least the report that Darren Henley authored on cultural education. Many of the initiatives that we have launched since that time are initiatives that the previous Government were capable of neither initiating nor funding.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

One key factor when considering the subjects to be studied at secondary schools must be how well they prepare young people for further training or study at college or university. Professor Ebdon from the Office for Fair Access has said that it is “dreadful snobbery” to put pressure on schools to achieve places for their students at the best universities. As a former schools Minister, I share the uncertainty of another former schools Minister, Lord Adonis, about whether Professor Ebdon is the right person to lead an organisation committed to encouraging wider access to higher education. Does my right hon. Friend share that uncertainty?

[Michael Gove]

When my hon. Friend and Lord Adonis agree, it is a brave and usually wrong man who disagrees.

[Bill Esterson (Sefton Central) (Lab)]

The creative industries are critical to jobs and growth, and some estimates are that as many as half of all new jobs will be created in those industries in the coming years. Will the Secretary of State take on board the massive concerns put forward by the CBI among others about how the EBacc is pushing academic study at the expense of vocational, not least creative, subjects?

[Michael Gove]

My right hon. Friend the Minister for Schools pointed out earlier that there has been a misreading of the CBI’s argument by those on the Opposition Benches. The CBI is not always right—it was not right about appeasement and it was not right about the euro. Historically, it has not been right about many things. However, on this occasion the CBI is applauding our policies. I do not know whether I should be delighted or worried, but I take comfort where I can that there are many people who are committed to improving our state education system who think our reform programme is right.

[Duncan Hames (Chippenham) (LD)]

Learning to let creativity flourish will be enormously beneficial for the next generation and needs to be embraced right across the curriculum. The Secretary of State has been offered input by heads from the leading edge programme of the best-performing schools, among them Martin Williams from the Corsham school, to help to ensure that teaching is engaging and innovative for pupils learning in key stage 4. How will he respond to that offer from these outstanding schools?

[Michael Gove]

I am grateful to my hon. Friend and I will respond with enthusiasm. I want to make sure that the very best, which succeed not just in the quality of academic and technical education, but in instilling a love of creative education in young people, have an opportunity to help schools that may not have those strengths. I have never visited a school that is strong academically that is not also strong creatively. The more we can learn from great schools, the better for all our children.

[David Mowat (Warrington South) (Con)]

12. What plans he has to review the allocation formula for education funding.

[The Minister for Schools (Mr David Laws)]

The current system for funding schools is unfair and out of date. In March, the Secretary of State announced our intention to introduce a new national funding formula which would redistribute funding on a fair, transparent and pupil-led basis.

[David Mowat]

The current formula, which we inherited, contains in-built bias and anomalies. Given that the Secretary of State and several Ministers are on record as saying that it needs to be replaced, why must we wait until 2015 before that process even starts?

[Mr Laws]

My hon. Friend is right to chide by implication the previous Government for failing during a far more benign financial environment to tackle the unfairness of the national formula for funding schools. I can reassure my hon. Friend that the Government are taking action. We are already, in 2013-14 and 2014-15, simplifying massively the funding formula for schools, paving the way for the national funding formula, which we will introduce in the next spending review period.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

On a slightly different aspect of the education funding formula, Liverpool Community college has seen an extra 1,000 16 to 18-year-olds enrol this year. However, due to the current funding formula there is a gap of £6 million. Can the Government confirm that none of those young people will lose out and that they will all get the same high standard of education that they deserve?

[Mr Laws]

I am not sure what that gap is, but even in difficult times this Government have produced a fantastic settlement for schools and are doing what her Government never did: deliver a £2.5 billion pupil premium which will get more money to the most disadvantaged youngsters in the country.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The Minister accepts that there are gross funding discrepancies among schools, not on the basis of need but simply because of the local authority in which a school sits. Will the Minister and the Secretary of State consider the f40 group’s appeal again and look to take action in this Parliament? Such gross unfairness cannot be allowed to last into the next Parliament.

[Mr Laws]

I agree with my hon. Friend’s points. I met representatives of the f40 group recently and had a detailed discussion. As I have already explained, we are making the first moves to introduce a national funding formula in the next spending review period. I assure my hon. Friend that in the meantime I will keep a close eye—as will the Secretary of State—on the representations that the f40 group is making about how we get a fairer funding formula.

[Philip Davies (Shipley) (Con)]

13. What his policy is on capital allocations for state boarding schools; and if he will make a statement.

[The Minister for Schools (Mr David Laws)]

Capital maintenance funding for maintained state boarding schools is allocated through local authorities, and through the Education Funding Agency for schools that are voluntary-aided. In addition, devolved formula capital is allocated directly to boarding schools for their own use. Academies will continue to have access to the academies capital maintenance fund.

[Philip Davies]

State boarding schools are the secret jewel in the crown of the state education system. However, the boarding parts of such schools and the maintenance of them are currently unfunded from capital allocations. Will the Minister take steps to resolve that, or at the very least allow state boarding schools to borrow against their boarding assets?

[Mr Laws]

I know that my hon. Friend is a strong supporter of state boarding schools, and so are this Government. He will probably be aware that the State Boarding Schools Association recently met with Lord Hill to discuss some of these matters, and he may be interested to know that a further meeting is scheduled for the end of January next year. My hon. Friend will also know that my predecessor, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), took a sensible decision to include in the property data survey a review of boarding provision and the capital needs of boarding schools. My hon. Friend will be aware that the data survey will report back next year. At that time we will have the evidence base to make the right decisions to ensure that state boarding schools have good-quality assets.

[Nic Dakin (Scunthorpe) (Lab)]

14. What plans he has for the secondary curriculum; and if he will make a statement.

[Julie Hilling (Bolton West) (Lab)]

15. What plans he has for the secondary curriculum; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

We announced draft proposals for the new primary curriculum earlier this year and we will bring forward proposals for the secondary curriculum in due course.

[Nic Dakin]

When I visited award-winning St Lawrence academy in my constituency on Friday, I heard first hand how year 10 and year 11 students were gaining from accessing vocational courses at North Lindsey college. Can the Secretary of State confirm that he still supports Alison Wolf’s recommendation that 14 to 16-year-olds can benefit hugely from access to high-quality vocational education in colleges?

[Michael Gove]

I often find myself nodding along whenever the hon. Gentleman makes a point, and I have never yet found a recommendation by Alison Wolf with which I have not agreed.

[Julie Hilling]

Given the cross-party support, public support and professional support, and because he can save 150,000 lives a year, why on earth will the Secretary of State not put emergency life support skills somewhere in the national curriculum, so that every school leaver is a life-saver?

[Michael Gove]

The many heads and teachers who listened to the hon. Lady as she made her point will think that if they have not already incorporated emergency life-saving skills into the way they teach, they should do so in future. Indeed, with such brilliant advocacy, I am sure that even more lives can be saved.

[Andrew Bridgen (North West Leicestershire) (Con)]

Can my right hon. Friend assure the House that when reforms of the national curriculum are published, teachers will have more than sufficient time to become fully familiar with them?

[Michael Gove]

My hon. Friend makes a very good point. It is absolutely important that we ensure that teachers have an opportunity to absorb the changes that we want to make, so that they can do what I know they wish to do, which is to raise the bar for all children.

[Mary Macleod (Brentford and Isleworth) (Con)]

Would my right hon. Friend consider putting enterprise into the school curriculum? This Government are keen to see young people set up businesses, which will be important for the future growth of this country.

[Michael Gove]

There are few in the Government keener than me on encouraging enterprise among young people—in fact, there is one: the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock). However, I would be wary of treating the curriculum as though it were Santa’s sack—as though we could shove into it everything that we wanted and it would magically expand. If we are to ensure that teachers are free from unnecessary prescription, we need to ensure that great teachers can build the curriculum they want with a proper balance between what we expect centrally and what they determine locally.

[Ms Karen Buck (Westminster North) (Lab)]

Ian McNeilly, the head of the National Association for the Teaching of English, has said of the Government’s new English curriculum:

“It is fantastic that Mr Gove has acknowledged that English as a subject needs to move into a different century. Unfortunately for all concerned, he has chosen the 19th rather than the 21st”.

I am sure that the Secretary of State will regard that as the highest praise, but does he agree that that is almost certainly not what was intended? Will he therefore reflect again on the omissions from the curriculum—particularly in areas such as writing, analytical and listening skills—that have been invoked by our friends in the CBI?

[Michael Gove]

I do not see anything wrong with having the 19th century at the heart of the English curriculum. As far as I am concerned, Jane Austen, Charles Dickens and Thomas Hardy—not to mention George Eliot—are great names that every child should have the chance to study. As for the National Association for the Teaching of English, I am afraid that it is yet another pressure group that has been consistently wrong for decades. It is another aspect of the educational establishment involving the same people whose moral relativism and whose cultural approach of dumbing down have held our children back. Those on the Opposition Benches have not yet found a special interest group with which they will not dumbly nod along and assent to. I believe in excellence in English education. I believe in the canon of great works, in proper literature and in grammar, spelling and punctuation. As far as I am concerned, the NATE will command my respect only when it returns to rigour.

[Mr Aidan Burley (Cannock Chase) (Con)]

rose—

[Mr Speaker]

Order. I am sorry to disappoint the hon. Member for Cannock Chase (Mr Burley). I would have called him to ask a question if that oration had concluded earlier, but it did not, so I cannot. I will, however, look kindly on him in topical questions. We shall see.

[John Pugh (Southport) (LD)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Education (Michael Gove)]

With your permission, Mr Speaker—

[Mr Speaker]

Order. On this occasion, an answer rather than a speech will suffice. I must also say that I richly enjoyed the Secretary of State’s Oxford Union oration.

[Michael Gove]

Thank you, Mr Speaker. I have had lots of meetings today and they have all been fun. Getting advice from you is the most fun of all.

[John Pugh]

Last month, the Secretary of State attacked the National Audit Office for being one of the “fiercest forces of conservatism”, and that statement was raised with the NAO in the Public Accounts Committee last week. Is such a statement wise, given the helpful advice that the NAO has provided on matters such as the overspending on the academies programme? After all, we all want to defeat the forces of conservatism.

[Michael Gove]

I am grateful to my hon. Friend for giving me the opportunity to expand briefly on those remarks. It is important that the National Audit Office and the Public Accounts Committee should strike a proper balance between respect for public money and the encouragement of innovation. As the NAO pointed out, the academies programme has been a success for this Government. We also need to ensure, however, that every penny that we have is spent wisely.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Is the Secretary of State aware that, according to Ofsted’s recent report, there are now 381 fewer children’s centres than there were at the time of the election, which represents a cut of 10%? In the same week, the Minister for Children and Families admitted that the number of centres providing child care had fallen by 30% in just one year, and that many of the closures were in deprived areas that have problems with the availability and quality of child care. How many of those services, on which families rely, does the Secretary of State think will be lost, now that the budget for Sure Start has been cut by 40%? Why does he not care about Sure Start?

[Michael Gove]

It is because I care so much about Sure Start that I want to ensure that the quality of service that is delivered to young people is the most important criterion. We do not want to fetishise bricks and mortar; we want to ensure that the quality of the education that children receive is as high—[Interruption.] What sort of an example is that setting for the nation’s three and four-year-olds? I say that we should concentrate on the quality of education.

[Lorely Burt (Solihull) (LD)]

T3. Scope recently launched its “Keep us close” report, which found that six in 10 families with disabled children said that the vital services they needed were not available in their local area. What steps is the Minister taking to implement the report’s recommendations to ensure that local authorities make vital universal services such as schools and leisure services accessible to families with disabled children, so that they do not have to travel long distances to get to them?

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

You will no doubt be aware, Mr Speaker, that today is the international day for people with disability, so it is apt that my hon. Friend has chosen to ask that question. Our special educational needs reforms will require local authorities to involve local families in developing a published local offer of services for children and young people with SEN and disabilities to ensure that councils understand their needs and can plan local provision accordingly.

[Helen Jones (Warrington North) (Lab)]

T2. Children with special needs, children who are in care and even children on free school meals are disproportionately represented among pupils permanently excluded from school. Many end up in pupil referral units, where the limited number of courses on offer can permanently damage their life chances. What is the Secretary of State doing to find out why that is happening and to provide more support to teachers in the classroom in dealing with such pupils?

[Michael Gove]

The hon. Lady makes a very important point. We appointed a special adviser to deal specifically with disciplinary and behavioural issues—Charlie Taylor, who had experience in dealing with precisely the sort of children whom the hon. Lady and I care about. That is why we have a reform programme to ensure that the quality of education offered in pupil referral units improves and that teachers who are responsible for dealing with those children receive improved initial teacher training. If the hon. Lady would like to know more, I would be happy to arrange a meeting with Mr Taylor so that he can bring her up to date.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

T4. Will the Secretary of State comment further on how he will address the concerns that creative studies might be squeezed out of the secondary curriculum? Furthermore, will he or his Minister for Schools meet the secondary heads in my constituency to celebrate their successes and to discuss the future direction of the secondary curriculum?

[Michael Gove]

I am grateful to my hon. Friend, who always makes her points proportionately and wisely. I agree with her that it is important not just to reassure students and teachers, but to applaud the fantastic work that is being done in creative and cultural education. That is why I or one of my colleagues would be only too happy to meet those in the schools in her constituency that are doing such a good job.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T8. It is 20 years ago today that the very first SMS was sent by an engineer. Today also sees the publication of EngineeringUK’s report, setting out the need to double the number of students studying GCSE physics if we are to meet the engineering needs of the future. What is the Secretary of State doing to make sure that a doubling of the numbers studying physics will happen, particularly in academies, which as he knows are responsible only to him?

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

It is vital that we increase the number of engineers, and indeed, provide more physics, which leads on to engineering. The number of schools offering three sciences at 16 is now back up to 80% after falling precipitously in the past decade. The number and proportion of pupils studying physics is going up, too. We need to do much more, but we are on the right track.

[Charlotte Leslie (Bristol North West) (Con)]

T5. Will my right hon. Friend outline what plans he has to improve alternative provision, and will he recognise the role that sports, particularly boxing, can play in raising the educational achievements of our most disadvantaged and underperforming young people?

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

I congratulate my hon. Friend on her work with the all-party parliamentary group on boxing. I think boxing has had a great year: we have seen great performances, such as by Nicola Adams in winning a gold medal in the Olympics. That is a fantastic inspiration to many school students. We are encouraging more diversity in alternative provision. We want to encourage boxing alongside academic subjects so that students can get back into mainstream education.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

T10. I listened carefully to the answer to my earlier question about Liverpool community college, but I must point out that Liverpool community college does not receive the pupil premium. Will the Minister responsible for skills answer my question? Will he approve the granting of £6 million, on which the college currently loses out because of the lagged funding formula, so that none of the extra 1,000 students who have enrolled will lose out.

[Michael Gove]

I am grateful to the hon. Lady for advocating so persistently and constantly on behalf of her constituents. I would say two things. First, we are doing everything to ensure that we can equalise funding between schools, school sixth-forms and colleges in the direction that the Association of Colleges has welcomed. Secondly, I am absolutely delighted that 1,000 more students have enrolled in Liverpool, thus proving that our reforms to the education maintenance allowance and its replacement by a bursary fund has been, as Government Members have said, a success—and not the failure predicted by Opposition Members.

[John Glen (Salisbury) (Con)]

T6. Salisbury has submitted an application for a science university, a university technical college and a free school sixth-form; we also have two outstanding grammar schools and a recent encouraging report from Sarum academy. Does the Minister agree that that diversity of provision allows opportunities for all children from all backgrounds?

[Matthew Hancock]

I do agree, and I urge others to take the same view as my hon. Friend. We should ensure that there is a diversity of provision, including university technical colleges, free schools and academies, and also a diversity of high-quality qualifications on offer—both academic qualifications and occupational qualifications that will form part of the Tech Bac—so that we can provide the best education, highly regarded and held in high esteem, for every single student who wants it.

[John Healey (Wentworth and Dearne) (Lab)]

Last weekend the Secretary of State condemned a foster care decision made by social workers in Rotherham, who he said had made

“the wrong decision in the wrong way for the wrong reasons”.

He knew nothing about that complex case and had done nothing to check the facts, which was completely wrong for a Minister in his position. Will he now apologise?

[Michael Gove]

Absolutely not.

[Mr Aidan Burley (Cannock Chase) (Con)]

T7. More than 80 independent day schools are backing the Sutton Trust’s open access scheme, which will make private school places available to able children from all backgrounds on the basis of merit rather than ability to pay. Does the Secretary of State agree that opening up 100% of such places would fundamentally change the social structure of the schools, accelerate social mobility, and give bright kids from poor backgrounds the chance of a fantastic education?

[Michael Gove]

The Sutton Trust and Sir Peter Lampl have done wonderful work to advance social mobility. Not every aspect of the open access scheme necessarily recommends itself to the Government, but I applaud all the independent schools, such as those in the King Edward VI Foundation in Birmingham, which have done so much to extend a brilliant education to students from disadvantaged backgrounds.

[Alison McGovern (Wirral South) (Lab)]

The Secretary of State spoke earlier about the canon. He may recall that, in 2009, he said:

“the greatest artists and thinkers are great precisely because their insights and achievements have the capacity to move, and influence, us all”.

Does he agree with the great artist Danny Boyle, who said recently:

“If there is any way you can help make culture, music, dance, theatre a core of the new English baccalaureate you will have given something beyond what you give every day”

[Michael Gove]

As an admirer of Danny Boyle’s film-making, and indeed of the amazing work that he did at the opening ceremony for the Olympics, I hesitate ever to disagree with him in any respect. That is why I was so pleased this morning to be able to talk to representatives of the culture sector, including those responsible for dance education, drama and visual arts, and to agree on what we can do together to ensure that every child has access to the best that has been thought and written.

[Mr Dominic Raab (Esher and Walton) (Con)]

T9. Our schools in Elmbridge face serious financial pressures as a result of a spike in the birth rate, the large number of young families who are moving into the area, and small pockets of relatively acute deprivation. Those factors were consistently overlooked by the last Government. What steps is the Minister taking to ensure that they are properly taken into account in the forthcoming funding formula review?

[The Minister for Schools (Mr David Laws)]

As my hon. Friend will know, we are simplifying the funding formula for 2013-14. We believe that it contains the right factors, which will be able to accommodate the real pressures throughout the country. My hon. Friend will also know that we are conducting a review of the formula for 2014-15. If he will write to me about the problems in his constituency, I shall be sure to look at them very closely.

[Toby Perkins (Chesterfield) (Lab)]

Sales skills are crucial to British businesses, but although nearly 10% of people are employed in sales, fewer than 1% of apprenticeships are in sales. Having escaped the opportunity to become Alan Sugar’s apprentice, Kate Walsh is now heading the Labour party’s policy review body, which is looking into how we can ensure that more young people get into sales and recognise the value of such work. Will the Minister congratulate Kate Walsh on having engaged in the political process, and acknowledge the importance of sales in our schools and colleges?

[Matthew Hancock]

I would commend any work intended to enhance the quality of apprenticeships, which are no longer restricted to one part of the economy but now extend to the whole economy. They are increasing in quantity, and we need to ensure that they increase in quality as well. I should welcome the contributions of anyone who can bring about an increase in the number of rigorous and employer-focused apprenticeships.

[George Eustice (Camborne and Redruth) (Con)]

Many small schools in Cornwall are concerned about changes in the dedicated schools grant and the implications for their future. What reassurance can the Minister give that when the current minimum funding guarantee runs out in 2014, the Government will recognise the importance of funding stability to such schools?

[Mr Laws]

I can give my hon. Friend the assurances first that the minimum funding guarantee will continue, secondly that this Government value the role of small schools, and thirdly that we are carrying out a review of the funding formula for 2014-15, to look very carefully at some of the concerns he mentions.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

Has the Secretary of State read the Pearson report, published last week and written by the Economist Intelligence Unit, which shows that Britain has the sixth best education system in the world and the second best in Europe? Does he agree that that shows great advancement under 13 years of the previous Labour Government and following many years of hard work from our teaching profession, and does he therefore regret talking down our education system and our teaching profession, as he did earlier today?

[Michael Gove]

I congratulate the hon. Lady on her recent election to Parliament. She couched her question brilliantly, and I know she will be a superb asset to this House. She is right to draw attention to the fantastic work our teachers are doing. However, only last week I was talking to Arne Duncan, the reappointed Secretary for Education in Barack Obama’s Administration, and he outlined to me how important it is that the two of us work together on a reform programme identical in every detail, to ensure that, however well we have done in the past, we do yet better in the future on behalf of all our children.

[Sir Bob Russell (Colchester) (LD)]

Further to Question 6 on religious education teaching, the Bible gives accounts of Jesus healing the sick. With that in mind, will the Secretary of State put first aid training in the national curriculum?

[Michael Gove]

On previous occasions I have observed that the hon. Gentleman has never yet said anything in Education questions with which I have disagreed. This is a first, therefore. It is miraculous that there should be any gap between us, but I look forward perhaps to talking to the hon. Gentleman to see what we can do.

[Mr Speaker]

Certainly there is very rarely any Question Time in which the hon. Member for Colchester (Sir Bob Russell) does not say something. We are accustomed to that by now, and we are grateful to him for it.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

Why do free schools not have to provide sports facilities, and how will that help the Olympic legacy?

[Michael Gove]

All schools need to ensure that their children have access to high-quality sports and physical education facilities and, under regulations that we have brought in, for the first time ever all schools, including independent and free schools, will have to guarantee access to high-quality facilities.

Petition

Monday 3rd December 2012 Commons Chamber

David Morris (Morecambe and Lunesdale) (Con)

- Hansard - - Excerpts

I am presenting this petition tonight on behalf of over 600 people in Morecambe who want to see the town’s west end regenerated.

By way of background, the Housing and Communities Agency allocated Lancaster city council £1.9 million in May 2012. In order to bid for the funding, the council had to pledge to match-fund the HCA contribution. This money was to be used to bring a cluster of empty homes in Chatsworth Gardens into use. Everything was fine, or so we thought, until I received a letter from the chief executive on 17 September stating that there was

“a very real prospect that the Council will have to send the money already allocated back to the Government”

because the council could not afford the £1.9 million match funding.

People in the west end of Morecambe got very angry and concerned indeed. Since the petition was signed, the council has miraculously claimed that there was never any danger of the match funding not being in place. In fact, one council officer said he was “bemused” by the suggestion that the money may have to be returned. Lancaster city council wrote to me saying that it did not have the match funding, and now it does. I have spent some time trying to get to the bottom of this, only to unearth even more questions.

The petition demands that the west end of Morecambe be regenerated without delay, using the money allocated by the Government. I thank Mr Steve Swithin for collecting the names, and the people of the west end of Morecambe for fighting back. I commend the petition to the House and hope that Lancaster city council will take note of my constituents.

Following is the full text of the petition:

[The Humble Petition of residents of Morecambe,

Sheweth,

That the Petitioners support the campaign by Steve Swithin to regenerate the West End and the Petitioners understand that Lancaster City Council will receive £1.9 million to tackle clusters of empty homes in their area bringing 114 empty homes back into use.

Wherefore your Petitioners pray that your Honourable House urges the Department for Communities and Local Government to spend all of the mentioned £1.9 million on redevelopment for Morecambe’s West End.

And your Petitioners, as in duty bound, will ever pray.]

[P001143]

Points of Order

Monday 3rd December 2012 Commons Chamber

15:32

[Mr David Davis (Haltemprice and Howden) (Con)]

On a point of order, Mr Speaker. I raise this point of order with you in respect of your duty of defending the interests and rights of Back Benchers and Committees in this House. This morning in an interview in The Sun newspaper, the Home Secretary, who I see is on the Treasury Bench, said the following about the Communications Data Bill:

“Criminals, terrorists and paedophiles will want MPs to vote against this bill. Victims of crime, police and the public will want them to vote for it. It’s a question of whose side you’re on.”

She also said:

“Anybody who is against this bill is putting politics before people’s lives.”

A Joint Committee of this House and the other House is meeting at present to pass comment on this Bill. Therefore, apart from traducing a large number of Members of this House, the Home Secretary is undermining the work of that Committee. Has she asked to come to the House to explain herself, and if not, what can you do to protect us, Mr Speaker?

[Sir Menzies Campbell (North East Fife) (LD)]

On a point of order, Mr Speaker.

[Mr Speaker]

Is it on the same theme?

[Sir Menzies Campbell]

indicated dissent.

[Mr Speaker]

We shall come to it, therefore. I am saving the right hon. and learned Member up. He is worth waiting for, I am sure.

Let me respond first to the point of order of the right hon. Member for Haltemprice and Howden (Mr Davis). Ministers and other Members must take responsibility for their own words. I have not received any requests from the Home Secretary to come to the House. The right hon. Lady is reported as having expressed herself in strong terms, as the right hon. Gentleman alluded, and others, notably including the right hon. Gentleman, may disagree with her analysis. The two Houses agreed that a Joint Committee would be an appropriate way of examining the Government’s proposals in detail, but that does not put the proposals beyond comment by others. I am sure that, as with all Joint and Select Committees, this Joint Committee’s report will be founded on a careful and sober weighing of the evidence. I hope that is helpful to the right hon. Gentleman and the House.

[Sir Menzies Campbell]

On a point of order, Mr Speaker. Have you received any requests from the Secretary of State for Foreign and Commonwealth Affairs to make a statement about the nature of diplomatic relations between the United Kingdom and Israel? Following last week’s events in New York at the United Nations, a number of actions have been taken and/or promised that are admittedly retaliatory in purpose. Would it not be right for the House to be brought up to date as soon as possible about the attitude of Her Majesty’s Government towards those actions and any future conduct which may be of the same nature?

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Further to that point of order, Mr Speaker. May I support the right hon. and learned Member for North East Fife (Sir Menzies Campbell) in what he has said? Last week, the Foreign Secretary came to this House to make a statement about a proposed action by Palestinians, as was right and proper. It is therefore beyond me that when the state of Israel is breaking international law in three ways the Foreign Secretary has not regarded it as necessary to come here today. When will we have a statement from him?

[Mr Speaker]

I am grateful to the right hon. and learned Member for North East Fife (Sir Menzies Campbell) and to the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) for raising this point. With respect to the latter part of the right hon. and learned Gentleman’s point of order, I refer to his words directly: it is right that the House should be kept up to date on this matter. There will be precisely such an opportunity at Foreign and Commonwealth Office questions tomorrow. I am not psychic, but you don’t have to look into the crystal ball when you can read the book; judging from the historical evidence of FCO questions, I just have a hunch that the right hon. and learned Gentleman and the right hon. Gentleman will be in their places, and there is surely a reasonable chance that their eyes might catch mine. I hope that that is helpful.

[Henry Smith (Crawley) (Con)]

On a point of order, Mr Speaker. On 2 August, I wrote to the Home Office on behalf of my constituent Vanessa Watson with regard to a dangerous dogs issue, yet despite chasing that Department on many occasions, I have yet to receive a substantive response. May I seek the advice of the Chair as to what I should do next?

[Mr Speaker]

The short answer is: first, timely answers are not just desirable, but essential; secondly, the Home Secretary is on the Bench and is almost thirsting to rise from her seat—she can if she wishes; thirdly, I just point out to the hon. Gentleman that the Leader of the House is in his place and I know he will want to chase an early reply. If the Home Secretary wishes to come to the Dispatch Box, she may do so.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Further to that point of order, Mr Speaker. I apologise to my hon. Friend for the delay in responding to his particular question. I will ensure that that matter is chased up and he receives a more timely reply.

[Mr Speaker]

I am grateful to the Home Secretary and I hope that is regarded as helpful. I hope there will not be many more points of order, as I do not want other people to be unduly delayed. However, I will take a last point of order from Mr Jim Dowd.

[Jim Dowd (Lewisham West and Penge) (Lab)]

On a point of order, Mr Speaker. I am particularly obliged to you for taking this point of order, which relates to the next, and main, business of the day. You will be aware that one of the main categories in the Register of Members’ Financial Interests is that of media earnings, which are many and diverse, and affect very many Members of this House. First, may I ask you to decide whether everybody who has an interest in that category should declare it in the forthcoming debate? Secondly, rather than just giving the completely uninformative, “I draw the House’s attention to my entry in the Register of Members’ Financial Interests,” should Members say what it is they are pointing to?

[Mr Speaker]

What I would say to the hon. Gentleman is that each hon. and right hon. Member is responsible for his or her own declaration of interest. On the further point of substance, the declaration of interest should be sufficient to enable the House to recognise the nature of the interest. I hope that is helpful. I think that, if I may say so, what I have said is, or at any rate should be, self-explanatory to hon. and right hon. Members.

New members

Monday 3rd December 2012 Commons Chamber

The following Members took and subscribed the Oath, or made and subscribed the Affirmation, required by law:

Sarah Deborah Champion, for Rotherham.

Andrew Joseph McDonald, for Middlesbrough.

Steven Mark Ward Reed, for Croydon North.

Leveson Inquiry

Monday 3rd December 2012 Commons Chamber

15:40

[The Secretary of State for Culture, Media and Sport (Maria Miller)]

I beg to move,

That this House has considered the matter of the Leveson report into the culture, practices and ethics of the press.

Lord Justice Leveson’s report marks a dark moment in the history of the British press. In the words of the judge, the press have

“wreaked havoc with the lives of innocent people whose rights and liberties have been disdained…not just the famous but ordinary members of the public”.

Lord Justice Leveson’s report shows in detail the breadth and range of that abuse, with acts of despicable intrusion into people’s lives when many of them had already suffered extensively. In days to come, that must remain at the forefront of all our thoughts.

We must also remember that Lord Justice Leveson falls well short of criticising the whole industry and that he offers praise for its important role in our society. At the heart of our democratic traditions is an irreverent, opinionated and, yes, sometimes unruly press. We live in a country where the press can hold people to account and where free speech is a right, not a privilege, yet with that comes a clear responsibility—a responsibility that Lord Justice Leveson found had not been honoured.

As Members of Parliament discussing the report, we have a heavy and profound duty to put forward our views with passion and force, to set aside party politics, and to discuss the fundamental issues and questions that this report poses. The debate will send a loud message to the press of this country, and that message is that the status quo is not an option. The Prime Minister is clear: we will see change. That change can come either with the support of the press or, if we are given no option, without it. Be in no doubt that if the industry does not respond, the Government will. I do not underestimate the differences of views that will be expressed here today, but I ask all right hon. and hon. Members to consider first what is clear to me—that there is more that unites us than divides us.

[Sir Bob Russell (Colchester) (LD)]

Having set the scene, will the right hon. Lady give a clear indication that there is a world of difference between the national press and our local press?

[Maria Miller]

My hon. Friend is right. Many of us want to make sure that we have a thriving press into the future, particularly a thriving local press, and he will be reassured to know that I will be meeting members of the local press later this week to make sure we achieve that important objective.

[Keith Vaz (Leicester East) (Lab)]

As the Secretary of State knows, when the Leveson inquiry was set up on 13 July last year, it was to be in two parts. We have had the first part, but there is no indication when the second part will take place. Will Lord Justice Leveson chair that second inquiry, or will another chair be selected to deal with the relations with the police and the investigations of the Metropolitan police prior to the inquiry?

[Maria Miller]

I am sure the right hon. Gentleman will know that it is not possible for us to give a timetable for the future of stage 2 of these inquiries at this time, with ongoing police investigations. I am sure he will therefore be aware that it is difficult for me to answer his question in full, although I understand that he wants to get some assurances. However, as soon as the criminal investigations are completed, we will do that.

In his statement the Prime Minister accepted in full the principles set out by Lord Justice Leveson that a new independent self-regulatory body has to be set up, and that it is truly independent in appointments and funding, giving real access to justice for the public and setting the highest standards for journalism through a code, with teeth to investigate and hold the industry to account. Rightly, Leveson set out that it is for the press industry itself to determine how this self-regulatory system is delivered.

[Chris Bryant (Rhondda) (Lab)]

Will the Minister explain how the new body that she envisages could possibly have any powers if it is not given any power by law?

[Maria Miller]

The hon. Gentleman will, I know, take a full part in the debate. I ask him to reflect a little. We are saying that we accept the principle of an independent and tough regulatory body, and that we will do what is necessary to make sure that it is tough and adheres to those Leveson principles. I am sure he will want to follow closely some of the cross-party talks that I am having with the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who speaks from the Front Bench for his party, on how we achieve just the sort of underpinning that he is talking about.

[Sir Malcolm Rifkind (Kensington) (Con)]

My right hon. Friend said that if the press do not respond, the Government will take action. If the press produce a system of review which is not fully independent of the press industry, which does not fully accept the jurisdiction of that new body, or which is not able fully to implement standards and conclusions that it reaches, will my right hon. Friend on behalf of the Government say that the Government would then accept the need for an Act of Parliament to achieve these objectives, which she rightly said we fully endorse?

[Maria Miller]

My right hon. and learned Friend sets out clearly what he sees as the key principles contained in Lord Justice Leveson’s report, and I can respond by saying that we will absolutely ensure that those key principles will be implemented, including many of the things he talks about. We are equally clear that if we do not see the action that is needed, we will take action. The status quo is not an option. I will certainly make that clear in my meetings with editors tomorrow.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

We live in one of the least corrupt societies on earth, and I congratulate my right hon. Friend and the Prime Minister on doing everything possible to avoid statutory regulation of the press. Freedom is defined not by people doing freely those things we approve of, but sometimes by them doing those things we do not approve of, and it is a precious thing and vulnerable to inadvertent assault.

[Maria Miller]

My hon. Friend is right, although I remind him that we must ensure that we do not end up with the status quo at the end of this process. We absolutely expect the press to make considerable progress in putting together a self-regulatory approach that is effective.

[Several hon. Members]

rose—

[Maria Miller]

I will give way to the right hon. Member for Blackburn (Mr Straw) and then to my hon. Friend the Member for Aldershot (Sir Gerald Howarth), but then I will have to make progress.

[Mr Jack Straw (Blackburn) (Lab)]

The right hon. and learned Member for Kensington (Sir Malcolm Rifkind) asked whether the Secretary of State would back legislation if the cross-party discussions do not produce an effective result, not whether she would take action. Will she please answer the question? Will she back legislation or not?

[Maria Miller]

I can be crystal clear, as indeed was the Prime Minister last week: yes, we will take action along the lines set out in the Leveson report if action is not taken to put together a self-regulatory approach, and that, as the right hon. Gentleman knows, would include legislation.

[Sir Gerald Howarth (Aldershot) (Con)]

My right hon. Friend has said that the Government accept Leveson’s proposals and that, in the event that there is not a satisfactory regime, the suggestion of my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) would be taken up. However, I remind her that Leveson states in paragraph 76 of the executive summary that he also wants to see a “statutory verification process”. It would be a statutory verification process, not a shackling of the press. Is that part of the Government’s current proposals, because we know that self-regulation has been an abject failure for 70 years?

[Maria Miller]

I will answer that point very briefly, although I am sure that it will be subject to much debate later, but then I really must make some progress. There are two aspects of statutory regulation within Lord Justice Leveson’s proposals: one is verification and the other is how we can put in place incentives for membership. I say simply to my hon. Friend—I know that he understands my point because we have had conversations about this before—that we take a very principled approach to this and have grave concern about the use of statutory legislation to underpin the recommendations. We do not believe that it is necessary. We believe that we should be looking at potential alternatives. Indeed, that is what we are discussing in cross-party talks today.

[Several hon. Members]

rose—

[Maria Miller]

If I could make some progress, I might answer some of the questions that hon. Members are trying to ask.

This is not about the press coming up with a model that suits its own ends. The day for a Press Complaints Commission mark 2 is well and truly gone. We will not accept a puppet show with the same people pulling the same strings. I will be meeting editors tomorrow to hear how they will take this forward. I say to hon. Members that we must not allow this debate to polarise us. We all agree on the need for a tough and independent regulator for the press, that the suffering of the victims and their families cannot be allowed to happen again and that the status quo is not an option. It is the responsibility of this House to ensure that whatever is put in place is effective. This is common ground. Let us put to one side the politics and turn our focus to the principles.

It is right that we look at the detail of how we deliver those principles in practice. Lord Justice Leveson’s report underscores the importance of protecting the freedom of the press. The Prime Minister and I, and other hon. Members on both sides of the Chamber, see that there are clear and practical difficulties in drafting legislation without providing an amendable legislative framework. Many in the House today, on both sides of the Chamber, have a deep-seated and grave concern that such legislation could have a profound effect on our ability to safeguard completely the freedom of our press in the future.

[Jim Dowd (Lewisham West and Penge) (Lab)]

I endorse the Secretary of State’s view entirely; I do not think there is a great deal of difference between many people on either side of the argument regarding the recommendations of the Leveson inquiry. However, if she is to provide the incentives to make so-called self-regulation work, does she not feel that it would be useful to bring forward, at least in draft form, the legislation that she thinks may be necessary should the press fail to live up to expectations?

[Maria Miller]

The hon. Gentleman raises an important point. He may or may not be aware that we are already midway into cross-party negotiations and discussions on this. We have already agreed with the right hon. and learned Member for Camberwell and Peckham and the Leader of the Opposition to draft such a Bill to see what that legislation would look like. Our concern is that it then provides a framework that could create real problems in terms of safeguarding free speech into the future. I am glad, though, that the hon. Gentleman acknowledged that there is a great deal of similarity between many of our positions, and we should not focus on the differences.

[Mr Frank Field (Birkenhead) (Lab)]

The debate seems to be polarising between favouring legislation or no legislation. Given that Leveson says that those who join the new organisation will have some very clear and important privileges, would we not be legislating on what those privileges are so that they could be backed up, or not backed up, by law? Therefore, is not the debate really about the scope of the legislation rather than being foolishly polarised on the question of whether to legislate?

[Maria Miller]

The right hon. Gentleman is right. The point of discussion today should be the fact that the Leveson report advocates an independent self-regulatory body. Leveson clearly states that he does not think that the Press Complaints Commission ever delivered on that. The right hon. Gentleman is right to suggest that the privileges, or incentives, that could be provided and that are outlined in the report could well encourage participation. I suggest to him that we should be considering ways in which we can achieve those privileges without setting them out in legislation.

[Mr John Redwood (Wokingham) (Con)]

How would making a newspaper journalist a regulated person with a licence stop future abuse given that the introduction in 2000 of statutory regulation for banking and financial services ushered in more crime, abuse and disasters than we had before? I urge my right hon. Friend to agree with the Prime Minister and to warn this House that there is no easy way of stopping abuse, and that statutory regulation might not do it.

[Maria Miller]

My right hon. Friend has given an example that we can all reflect on. I also bring to his attention the problems that have been experienced recently in Ireland despite the fact that it has a regulatory system, albeit light-touch, in place.

[Mr Andy Slaughter (Hammersmith) (Lab)]

rose—

[Frank Dobson (Holborn and St Pancras) (Lab)]

rose—

[Maria Miller]

Will Opposition Members give me a few moments to make a little progress?

Who can say what amendments would be made to such a legislative framework in future? Who can make promises for the politicians and the political parties in years to come? The action that we take will have consequences that will be felt for generations to come, and we must make sure that whatever action we take, it is not just for now but for the coming years as well.

[Penny Mordaunt (Portsmouth North) (Con)]

I was very disappointed that on another issue—one of tremendous constitutional importance—we were not given a free vote in this place. Given that this topic is arguably more important, will my right hon. Friend consider allowing a free vote when it comes before the House?

[Maria Miller]

I hope that there will be no votes on the issue, because what we need is consensus. We need to move forward with something that we can all agree on.

We should remember that the Leveson report is not just about statutory underpinning, although I think that, as a result of the debate thus far, we could be forgiven for thinking that it is. To reduce it to that does a disservice to Leveson. There are other recommendations that we need to consider carefully. I hope that in today’s debate, hon. Members will discuss the role of Ofcom as set out in Lord Justice Leveson’s report.

[Sir Tony Baldry (Banbury) (Con)]

One of my constituents was not reappointed as director general of the Office of Fair Trading because he refused to carry out a political instruction from the then Chancellor of the Exchequer to undertake an inquiry, the only purpose of which was to give the Labour Government cover when they increased fuel duties. As a consequence, he lost his job as director general of the OFT. The simple fact is that if Secretaries of State appoint statutory regulators, they will always be subject to some political pressure from Secretaries of State.

[Maria Miller]

I understand fully my hon. Friend’s point, although I draw his attention to the fact that, while I do not know as much about the structure of the OFT, Ofcom is independent as a regulator. Although the chair is appointed by me, its independence is set out in law. I understand his point and some may feel that the proposal is not distant enough from Government.

[Several hon. Members]

rose—

[Maria Miller]

I would like to make a final point about Ofcom, if hon. Members will allow me. Lord Leveson states clearly in his report that his preference is for this organisation to oversee the efficacy of the self-regulator. He also suggests that if no independent self-regulatory system can be agreed, the Government might have to turn to Ofcom to act as a statutory regulator. The House needs to reflect on that and we have put it at the heart of our discussions with the Labour party.

[Mr John Baron (Basildon and Billericay) (Con)]

My right hon. Friend is being very generous in giving way. Will she consider the fact that most of the offences against victims—phone hacking, paying police officers and so on—broke the law? Instead of doubling up on state regulation, will she consider whether the answer is not also that we should have better and fairer access to the law, because too many victims find it too complex and too costly? Will she raise that with the Justice Department?

[Maria Miller]

My hon. Friend raises an important point. Leveson’s report brings out fully the importance of ethics, including those of the police—my right hon. Friend the Home Secretary is already doing a great deal in that area—and of access to law. The report is being considered in great detail by the Ministry of Justice and I will come on later to some of the practical ways in which we want to make sure that access to justice is available for all.

[Several hon. Members]

rose—

[Maria Miller]

I want to make some progress, because I know that many right hon. and hon. Members want to contribute to the debate.

Questions also have to be asked about the report’s data protection proposals and their potential impact on investigative journalism. We need to give careful consideration to whether it would be appropriate for the Information Commissioner to investigate and then decide on the public interest, which, in effect, is what would happen if the report were implemented in full. As Lord Justice Leveson himself says, changing exemptions for journalists would be significant. This goes to the heart of the balance between the freedom of the press and the individual’s right to a private life. These issues require serious thought. I hope that in today’s debate we can bring out that and other elements of the report, and not only focus on the narrow issue of statutory underpinning.

[Tracey Crouch (Chatham and Aylesford) (Con)]

Thousands of excellent local and regional journalists will be affected by the changes to the regulatory structures for the press. When my right hon. Friend meets editors later this week to discuss the changes, will she ensure that the local press has an equal voice in the design and operation of the new system?

[Maria Miller]

I will certainly listen very carefully to the concerns of the local press. As I said earlier, we all want to see a thriving press industry. We know the financial pressures and constraints that it is under in this country, whether at a national or local level. We need to ensure that coming out of this process, we have not only a regulatory system that encourages the right sort of journalism, support and reporting, but a thriving press.

[Several hon. Members]

rose—

[Maria Miller]

I will make a little more progress.

We have not wasted time since last Thursday. Following the publication of the report, we have acted. Lord Justice Leveson recommended that there should be cost protection in defamation and privacy cases to ensure that ordinary people are not put off using the courts by the fear that they cannot afford it. The Justice Secretary has asked the Civil Justice Council to look at that issue and the Government will implement the changes at the earliest possible opportunity.

Additionally, some of Leveson’s recommendations build on work that has already been done by the Home Office and the Association of Chief Police Officers on behalf of the police. The report recognises that, because of that work, the policing landscape is changing.

[Ian Paisley (North Antrim) (DUP)]

I thank the Secretary of State for her generosity in giving way to Opposition Members. I agree with what she has said about the status quo and about how the media should be monitored and regulated. However, the former editor of the Belfast Telegraph has said in today’s paper that the time when the press can mark their own homework is well gone and that the time when the press can determine what punishment they should face when they have breached the law is well gone. Does she agree?

[Maria Miller]

I agree that we need an independent self-regulatory system that can be overseen and is seen to be effective. I urge the hon. Gentleman to ensure that he has gone through the recommendations in detail. It is not the Government who are saying that the system should be put together by the press, but Lord Leveson himself, and he is right to do so.

[Several hon. Members]

rose—

[Maria Miller]

I will just finish my point, and then I will give way to a few of my hon. Friends who have been trying to catch my eye.

The police and crime commissioners took office on 22 November and the college of policing will come into being this week. The Independent Police Complaints Commission is being given new powers and Her Majesty’s inspectorate of constabulary has greater independence and a new non-police chief to head it. Increased transparency will support stronger systems for whistleblowing and both will contribute to a culture of openness and responsiveness, and will increase public confidence in the police. Those are all important actions that have already been taken. My right hon. Friend the Home Secretary will report to Parliament on all that in January.

[Sir Edward Garnier (Harborough) (Con)]

I thank my right hon. Friend for giving way so generously. It is becoming difficult to follow the thread of her argument. That is not her fault, because it has been interfered with by so many people seeking to intervene. I plead guilty to that myself.

Will my right hon. Friend confirm something that Lord Justice Leveson said on any number of occasions? I will quote paragraph 6.1 on page 1771:

“I will say again, because it cannot be said too often, that the ideal outcome from my perspective is a satisfactory self organised but independent regulatory body, established by the industry, that is able to secure the voluntary support and membership of the entire industry and thus able to command the support of the public.”

We are not talking about—and Lord Justice Leveson is not talking about—the statutory control of the press. Can we try to move away from the hyperbole that suggests that Lord Justice Leveson is demanding some form of Stalinist control of the press?

[Maria Miller]

I understand my hon. and learned Friend’s intervention, but I carefully draw his attention to the fact that the issue is about making the new system effective, and that is where the discussion lies. I gently remind him that what the Prime Minister set out last week was very clear: the Government absolutely agree with the principles in Lord Justice Leveson’s report, and we are looking at how they will work in practice.

[Several hon. Members]

rose—

[Maria Miller]

I will give way to two more hon. Members, and then I will conclude my remarks.

[Bill Wiggin (North Herefordshire) (Con)]

I was interested in the Minister’s comments about January. For the benefit of my constituents and newspaper editors, will she tell us her ambitions for a resolution to this matter, so that we know we can trust what we read again?

[Maria Miller]

I will give my hon. Friend a much firmer idea about that once I have met the editors tomorrow. The ball is firmly in their court for them to come forward with a clear timetable this week, as I think they have said they will do. I will also set out exactly how the Government will progress with those areas of the report to which we need to respond.

[Angie Bray (Ealing Central and Acton) (Con)]

The Minister has spoken about wanting to look forward to a healthy newspaper industry. Does she agree, however, that the industry is dying on its feet because of competition from the entirely unregulated digital media? More and more people are getting their news every day from digital media; they do not go out and buy newspapers. When looking at some kind of level playing field, we must be careful not to kill off newspapers by shackling them so much that they remain completely uncompetitive.

[Maria Miller]

My hon. Friend raises an important point about the future of the press and ensuring that it is economically viable. She also touches on the important issue of online news which, as she will have studied in the report, Lord Justice Leveson feels should be dealt with by the new self-regulatory body.

[Several hon. Members]

rose—

[Maria Miller]

I will give way to the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), and then I will conclude my remarks.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Although it is clear that the provisions in the Leveson report on the backing up of self-regulation of the press must be carried out, does the right hon. Lady agree that if the House rushes to legislative judgment, that will be seen as Members of the House of Commons taking revenge on the press for what the press have said about them, including me? This is not about Members of Parliament; it is about ordinary people who are victims of press persecution.

[Maria Miller]

The right hon. Gentleman has made his point extremely clearly, and he is right that we must come at this issue in a measured way that looks to the long term, not just the short term. We must look not just at each other in the Chamber today, but beyond these shores as a country that champions free speech and democracy on the world stage. Can we credibly question and challenge others on issues of liberty and freedom if we have placed our own press in a legislative framework? Today is not about what is right here and now, this week, this month or in this Parliament; it is about a profound set of issues for our democracy that will have real and lasting consequences.

Lord Justice Leveson published his report into the future of press regulation last Thursday. Today’s debate demonstrates the Government’s commitment to finding a swift way forward. We have already held two cross-party meetings and will continue to hold more. Today in the Chamber we have the opportunity to discuss the findings of this report in full and to hear from all sides of the House. What we are debating today has profound implications, and we should remember the weight of that responsibility in days to come.

16:15

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I thank the Secretary of State for affording the House the opportunity to have this debate. Last week, following the Prime Minister’s statement, the House agreed that victims had suffered terribly, that the Press Complaints Commission had failed, and that we must have change. Today, we must focus on how we make that change.

Let me turn right away to the most controversial issue in the Leveson report—the question of statute. At the heart of today’s debate is whether we have independent self-regulation backed by law. It is important that we are clear about why statute is required and what it would do. We need statute because the current system of self-regulation has failed—year after year, for 70 years, and despite seven major reports. It has failed not because there are not people of good will in the press and not because last chances and dire warnings were not given—there are people of good will in the press and last chances and dire warnings were given. Each time there has been a new incarnation of self-regulation by the press, everybody has started with the best of intentions, but every time, because there is no oversight, standards have slipped and wrongdoing has returned.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Does the right hon. and learned Lady recognise that the inquiry was set up because of two scandals—phone hacking and the bribing of police—both of which are against the law and neither of which will be tackled by the form of state intervention she is talking about?

[Ms Harman]

The inquiry was set up—I congratulate the Prime Minister on setting it up, and my right hon. Friend the Leader of the Opposition on demanding it—not only because the criminal and civil law were broken, but because the press demonstrably had not abided by their own standards that they set out in their code of conduct. To stop that happening again, we must decide who overseas the regulator, because currently no one does.

[Alun Cairns (Vale of Glamorgan) (Con)]

I am sure the right hon. and learned Lady remembers that the inquiry was established because of a number of smears from Opposition Members against the former Secretary of State for Culture, Olympics, Media and Sport. In view of the fact that the Leveson inquiry cleared my right hon. Friend of any such allegation, should she not apologise?

[Ms Harman]

Lord Leveson actually said he was not going to look into whether there had been a breach of the ministerial code. He said that was not a matter for him, and he was right; it is a matter for the independent adviser on ministerial interests, who did not get the chance to investigate because the Prime Minister did not refer the matter to him.

[Sir Bob Russell]

Will the right hon. and learned Lady confirm that her comments so far relate only to national media and the Westminster bubble? The allegations she has made are not fair to the thousands of local journalists on local newspapers.

[Ms Harman]

It would be quite possible within Lord Leveson’s framework for the local press to set up their own board and for another board to look at complaints against the national press. The key point is that the regulation must be overseen to guarantee its continued independence.

[Chris Bryant]

Will my right hon. and learned Friend please rebut the myth that the report looked only at criminal activity? The families of the 96 who died at Hillsborough could not sue for libel—there was no defamation. Certainly, untruths were told and defamatory things were said, but the families could never have sued for libel—they had no recourse in law, and it took 23 years to get to the truth. That is why self-regulation failed.

[Ms Harman]

My hon. Friend makes a very good point.

[Mr David Davis (Haltemprice and Howden) (Con)]

The right hon. and learned Lady has a strong and honourable history on this matter. Earlier this year, she spoke to the Oxford convention and announced she was firmly in favour of press freedom. She said:

“Because the press are now in the dock, it looks like special pleading from a vested interest when they make the case for press freedom. That’s why it is all the more important that politicians must insist on the freedom of the press.”

What has changed?

[Ms Harman]

Indeed, and that is why one of Lord Leveson’s proposals, which we think justifies the support of the House, is for a duty on Ministers to guarantee the freedom of the press, and that that duty should be in statute.

[Mr Crispin Blunt (Reigate) (Con)]

Will the right hon. and learned Lady please be careful about not overstating the need for statutory intervention? It is quite narrow—it is simply to verify the independent regulator, who comes forth from the press itself, and to provide the tools, so that there can be exemplary damages for those who choose not to be regulated by that new independent regulator. If she overstates the case for statute, she makes arguments against herself that are unnecessary.

[Ms Harman]

We should make the case for statute, but the hon. Gentleman is absolutely right that it should be as narrow as possible in scope.

Let me return to my comments and set out why self-regulation has failed. The problem with a purely self-regulatory body and nothing else is that there is a conflict of interest when those doing the judging—the press—are those being judged. I believe that Lord Justice Leveson’s answer to that decades-long problem is ingenious. It has drawn on, listened to and completely understood the concerns of the press. He does not throw out self- regulation, as some expected. Instead, he nominates a body to oversee the self-regulator to ensure it is independent and stays independent.

[Damian Collins (Folkestone and Hythe) (Con)]

rose—

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Ms Harman]

I will press on with my comments, because many hon. Members want to speak.

That is the core reason why Leveson concludes that statute is, to use his word, “essential”. However, to follow up on the point made by the hon. Member for Reigate (Mr Blunt), all that any statute would have to do is set out criteria about what independence means and check once every three years that it is still independent—that is all. The oversight body—the one prescribed by statute—would have no role in hearing complaints, no role in deciding whether they are justified, no role in laying down penalties, and absolutely no role in deciding anything that does or does not go into a newspaper. That would be down to the independent self-regulator set up by the industry.

[George Eustice (Camborne and Redruth) (Con)]

I am grateful to the right hon. and learned Lady for giving way. Does she agree that under Lord Leveson’s proposals, the recognition body would be an independent body that assessed whether the self-regulator was adequate, but that under the current Government proposals it would be the Secretary of State, as a single, lone politician, who is set to stand in the shoes of that recognition body and make that decision individually?

[Ms Harman]

That is a very good point, and I wish I had thought of it myself. [Laughter.] I think, in fact, it was my idea.

Let us be clear: having a statute to guarantee that is not some incidental add-on or optional extra to Lord Justice Leveson’s report. It is a complete contradiction in terms for people to say, “I want to implement Leveson, but without statute.” Leveson says that statute is “essential”.

Let us imagine the Leveson proposals on self-regulation without statute. Although I am sure that even if any new body started off being independent, without statutory oversight there would be no guarantee it would stay that way. It is inevitable that once again it would become controlled by the press, with editors marking their own homework—that has happened again and again. Why should we believe that we can carry on in the same way and that things will somehow be different? The definition of insanity is doing the same thing over and over again and expecting a different outcome. None of the other suggestions gets anywhere near answering that fundamental point of how to guarantee continuing independence.

Let me turn to Lord Hunt and Lord Black’s proffered solution. They claim that what they put forward is a truly independent system with tough sanctions. However, on closer inspection, it is a different story. They say that there would be an independent chair and board, but they could all be fired—the chair and the whole board—by the press barons just giving notice in writing. Lord Hunt and Lord Black say there would be tough sanctions, with penalties of up to £1 million, but then they say that those sanctions would be determined by the press barons. How is that independent?

Some have suggested that we do not need new statute because we could get a judge to appoint a new body, but a judge would not be able to do that without a statute. Many opponents of Lord Justice Leveson’s recommendations have said that we must not have statute—that it crosses the Rubicon and would pose a fundamental threat to our democracy. I want to address each argument against statute in turn. The first is that any statute affecting the press automatically ends a free press. We have heard that a lot in recent days, but there is surely an irony and a contradiction in that, for was it not the press themselves who asked my right hon. Friend the Member for Blackburn (Mr Straw) for their inclusion in section 12 of the Human Rights Act 1998? Is that not amendable legislation? Was it not the press themselves who asked for a new defamation Act? Is that not amendable legislation? The first argument—that any law mentioning the press undermines freedom—therefore does not and cannot hold.

Secondly, it is argued that the statute that Leveson proposes amounts to regulation of the press by a ministerially appointed quango, but this is not direct regulation of the press. The statute would only guarantee the system of self-regulation. It would remain voluntary to join, on the basis of incentives. In that, it is similar to the system in Ireland, which has been in place since 2009. As the Deputy Prime Minister helpfully reminded the House last Thursday, it covers all the newspapers operating in Ireland, which volunteer to be part of the Irish Press Council, which—heavens above!—includes the Irish editions of the Daily Mail, the Daily Mirror, the Daily Star, The Sun, The Sunday Times, The Mail on Sunday and the Sunday Mirror. If that really posed a threat, where were the protests in Ireland? Why have those newspapers signed up? The UK editors say that any press law would end freedom of speech, so why have they not chained themselves to the house of the Taoiseach? The Foreign Secretary says that any press law in Britain would undermine freedom—and, indeed, democracy—around the world, so why has he not summoned the Irish ambassador for a dressing down? The Culture Secretary—

[Maria Miller]

rose—

[Ms Harman]

I will let the Culture Secretary intervene in a moment. She says that she fundamentally objects to any statute—at least I think that is what she was saying—so why is she not telling our press to boycott the Irish system?

[Maria Miller]

I was just going to ask the right hon. and learned Lady how many cases had been brought under the Irish law. I think she will find that the answer is absolutely none.

[Hon. Members]

So it’s working!

[Ms Harman]

I am not quite sure what point the right hon. Lady is trying to make—I will have to think about that one.

Thirdly, there is the argument about a press law being the thin end of the wedge. A central feature of our democracy is that it is the responsibility of elected representatives to make and change laws, and we can do that at any time. Frankly, if that is a slippery slope, so is the very existence of Parliament. The only way to address that concern is to abolish Parliament, and I do not hear that being suggested.

Fourthly, let me deal with the argument that what is proposed would inevitably mean cumbersome legislation. Following our cross-party talks on Thursday, the Government agreed to prepare a draft Bill, but the Culture Secretary then said the Government were drafting the Bill only to show why it should not be done. That is why we are preparing a Bill that will show that it can be done in a tightly defined and forensic way, as envisaged by Leveson.

Let us look at the Irish law, which contains the clauses recognising the Irish Press Council. How many clauses do hon. Members think were needed to make that happen? Listening to the Government, we might assume that it took hundreds, but the answer is not hundreds, or even tens; it is just two. It took two clauses, one paragraph in a schedule and one schedule. The legislation is not a leviathan; it did not involve a huge, cumbersome Bill. The Bill that we are drawing up will show that this is possible, and we will, I hope, be working on a cross-party basis to take it forward.

Finally, there is the civil liberties argument. I do not believe that Lord Leveson’s proposals, which we support, would undermine freedom of speech. This is not about politicians alone determining what journalists do or do not write; far from it. The freedom of the press is essential. So, too, though, is that other freedom: the freedom of a private citizen to go about their business without harassment, intrusion or the gross invasion of their grief and trauma. I do not believe that those two freedoms are incompatible. A free press must be a responsible press. It must expose the abuse of power without abusing its own. That is what this debate is about, and that is why we should take forward Lord Justice Leveson’s proposals.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In view of the large number of right hon. and hon. Members seeking to catch my eye, I have imposed a 10-minute limit on Back-Bench contributions with immediate effect.

16:31

[Mr John Whittingdale (Maldon) (Con)]

Over the past five years, the Culture, Media and Sport Select Committee, which I chair, has examined the issue of the standards and ethics of the press three times. Each time, what we have uncovered has caused us serious concern about the way in which the press operates in this country; we have revealed information that we all found truly shocking.

It is important that we remember the people who have suffered at the hands of the press, including the McCann family, the Dowler family and Christopher Jefferies. However, it is also important to note that all in those cases suffered as a result of breaches of the law. Breaches of the Data Protection Act, the Regulation of Investigatory Powers Act 2000, the contempt of court laws and the libel laws were all involved in the suffering of those people.

That is one of the reasons why I agree strongly with the earlier remarks of the Chairman of the Home Affairs Committee, the right hon. Member for Leicester East (Keith Vaz). There are still big questions to be answered about how serial breaches of the law could take place in newsrooms and how the police appeared to do absolutely nothing about it, despite having the necessary evidence for a number of years. I very much hope that we will see the establishment of part 2 of the Leveson inquiry—whether it takes place under Lord Leveson or not is not the most important point—because we need answers to those questions once the criminal prosecutions have been exhausted.

[Dr Julian Lewis (New Forest East) (Con)]

So far as the breaches of the criminal law are concerned, will my hon. Friend confirm that, if a statutorily based supervisory body were to discover that the criminal law had been broken—through phone hacking, for example—that would become a matter for the police anyway as soon as it was discovered and that, terrible though the suffering of the Dowlers was, their case is, in a sense, really rather irrelevant to the supervisory body that we ought to have?

[Mr Whittingdale]

I am not sure that I would say their case is irrelevant, because it plainly provided evidence of the way in which the press seemed to feel that they were above the law, and that is a matter for a body overseeing ethics and standards. My hon. Friend is right, however, to say that that matter should have been dealt with by the police, and we still need answers as to why it was not.

[Chris Bryant]

The point, surely, is that the Press Complaints Commission was part of the problem. It was self-regulating, and for far too long it admitted the “one rogue reporter” line that was being touted by News International because it saw itself as a spokesperson for the industry and for the newspapers, and not as an independent body.

[Mr Whittingdale]

It may surprise the hon. Gentleman to know that I agree with him. There is no question but that all of us in this Chamber are of one mind that the system of self-regulation administered by the Press Complaints Commission has failed. The commission produced a report saying that there was no evidence that anyone other than the one rogue reporter was involved, at the same time as my Select Committee produced a report saying that there was ample evidence and that we found it inconceivable that the rogue reporter defence was true. We are all agreed that we cannot continue with a system of self-regulation. The idea of the press marking its own homework, as Lord Leveson rightly put it, does not work and cannot continue—but that is not what is in prospect today.

[David Simpson (Upper Bann) (DUP)]

Victims have been mentioned many times today. Does the hon. Gentleman agree with me that it is sad that, because they fear that the Government will let them down, the victims have started a campaign themselves. Is that not a sad reflection on what is happening?

[Mr Whittingdale]

It is our job in this House to persuade the victims that what is now in prospect is a different regime that would have the necessary teeth to prevent the kind of abuses they suffered. I believe that that is the case, and that we have a duty to get that message across to them.

Let me take us back to the report our Select Committee produced in 2010. We clearly said that we needed a new body, which needed to have

“the ability to impose a financial penalty”

when the press had failed, and to have a responsibility

“for upholding press standards generally”—

things that the Press Complaints Commission was never equipped to do. We went on to say in that unanimous report of the Select Committee two years ago:

“We do not accept the argument that this would require statutory backing, if the industry is sincere about effective self-regulation it can establish the necessary regime independently.”

Earlier this year, I chaired another Committee, a Joint Committee of both Houses on privacy and injunctions. Again, we looked at these matters in some detail. That body, too, reached a conclusion that

“the current system of self-regulation is broken and needs fixing.”

Again, that Committee recommended a new independent body with stronger powers. The report went on to say —this was supported by Labour members of the Committee —that

“should the industry fail to establish an independent regulator which commands public confidence, the Government should seriously consider establishing some form of statutory oversight”,

but it went on:

“At this stage we do not recommend statutory backing for the new regulator.”

[George Eustice]

Will my hon. Friend give way?

[Mr Whittingdale]

My hon. Friend was a member of the Committee who I know did not agree with that particular conclusion, but I will give way.

[George Eustice]

On precisely that point, a number of us here who sat on the Committee did indeed disagree with that and feel that there needed to be some statutory underpinning. Will my hon. Friend inform us how narrow the margin was when it came to endorsing this report at all?

[Mr Whittingdale]

I think I have the figures. My hon. Friend is absolutely right: the Committee divided at the end—10 in favour, and 7 against. I would point out, however, that among the seven were Lord Black of Brentwood and my hon. Friend the Member for Shipley (Philip Davies), who I think my hon. Friend will find are not necessarily totally in agreement with his particular viewpoint.

The Hunt-Black proposals are no longer on the table. I agree with Lord Leveson that they were not sufficiently independent. It is clear that the new body has to be completely independent of the press, and it has to have a board that does not have serving editors on it. There are elements where a new body could have some kind of statutory support. Some hon. Members may have seen the comments of Shami Chakrabarti, who talked about how a body could have statutory recognition. I would draw the House’s attention to the submission made to the Leveson inquiry by Lord Hunt, in which he pointed out that the Irish Defamation Act 2009 contains a provision that recognises the activity of the Irish Press Council and allows the courts to take account of

“the extent to which the person adhered to the code of standards of the Press Council and abided by the determinations of the Press Ombudsman and determinations of the Press Council.”

That seems to me entirely sensible. It is a way of giving the press incentives to join such a body. However, Lord Hunt went on to say:

“I do not believe this in any way crosses a ‘red line’ for those of us who have serious qualms about a statutory regulator: the Press Council in the Republic of Ireland may be recognised in a statute, but it is not created by it.”

That, essentially, is the difference in this matter. It is a question of whether we trust the press to establish a truly independent body with real powers that will be able to punish breaches of the code, and that the press will abide by it, or whether we believe that the press will not go along with that, and that therefore there must be statutory support. It is not a question of powers; there is no difference between what is on the table in terms of the powers available to the body and what Leveson recommends. It is merely a question of whether we trust the body, and the press, to go along with it. If we do not, we support the idea of statutory regulation. However, we must be clear about the fact that starting to legislate over the press would be a huge step for us to take.

[Kate Hoey (Vauxhall) (Lab)]

Does the hon. Gentleman agree that protecting journalists’ sources is a fundamental principle of investigative journalism? Leveson seems to want to throw that out of the window if the information has been “stolen”. Does he realise that under such a system none of the expenses scandal involving the House of Commons would have emerged, and is that not very worrying indeed?

[Mr Whittingdale]

I agree. I think that there are serious practical problems with some of Lord Leveson’s recommendations, and the hon. Lady has highlighted one of them. The whole area of data protection raises some very big questions. There is also the question of whether Ofcom should have any involvement in press regulation. I think that Ofcom itself would have severe misgivings about that, because it is not what it was set up to do. It was set up to do an entirely different job. It is a Government-appointed regulatory body, and even if it acts as a backstop regulator, that will be giving a Government-appointed body, the chairman of which is appointed by the Secretary of State, a role in the regulation of the press.

[Bill Esterson (Sefton Central) (Lab)]

Is it not more important for us to establish total public confidence, which has been shattered over many years? My hon. Friend the Member for Rhondda (Chris Bryant) mentioned the Hillsborough families, one of whom wrote to remind me of the 23 years that it took to deal with the injustices, which were caused in large part by newspaper reporting, not least by The Sun. Is it not important for us to do that, on behalf of the victims and the public at large?

[Mr Whittingdale]

Of course it is important for us to establish public confidence. What we need to do is persuade the public that things will never be the same again: that the new regime on offer is completely different, that it is independent, and that it has real powers. However, as I think Shami Chakrabarti said at the weekend, the question of whether it requires statutory underpinning is about processes, not outcomes. We need to focus on the outcomes of this.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Is it not the case that the proposed legal and financial incentives to be offered to the press would require legislation by the House to give the press privileges that are not available to other citizens?

[Mr Whittingdale]

I think I have already dealt with that, but the right hon. Gentleman is right. Lord Hunt himself suggested that there should be some statutory recognition of the body in the context of, for instance, defamation cases, so that it can be taken into account when damages are awarded. However, that is not the same as setting up a body by statute, or statutory underpinning. It is all very well for the right hon. Gentleman to laugh, but there is a massive difference between the law recognising the existence of a body and the law somehow having power over that body.

[Sir Edward Garnier]

Does my hon. Friend agree that the hon. Member for Vauxhall (Kate Hoey) may have slightly misquoted Lord Justice Leveson—wholly unwittingly, I am sure? Lord Leveson identified the Daily Telegraph investigation of parliamentary expenses as an example of investigative journalism coming to the point, but surely the central fact is that there are aspects of privacy law that protect and enhance freedom of expression—for example, the right of journalists to protect their sources.

[Mr Whittingdale]

I have very little time left. I could probably spend another hour discussing the whole issue of privacy law, but I shall merely tell my hon. and learned Friend that I hear what he says.

I am absolutely at one with those in the Chamber who believe that we need to establish—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

[Mr Whittingdale]

— an independent regulatory body—

[Mr Deputy Speaker]

Order. The hon. Gentleman must not test the patience of the Chair. A great many other Members wish to speak.

16:44

[Mr Jack Straw (Blackburn) (Lab)]

When Sir David Calcutt produced his second report in 1992, he was damning in his criticism of the lack of serious progress made by the Press Complaints Commission in the previous two years. We in Parliament as well as the press are now reaping the whirlwind of that collective failure. In the intervening years, the Conservatives and then Labour failed to grasp the nettle of press standards. As Lord Justice Leveson makes clear, standards have fallen, not risen, in many, although by no means all, sections of the press. What the McCanns, the Dowler parents, J. K. Rowling and thousands of others have been subjected to should never happen in a society that prides itself on its freedoms, for all these victims have been deprived of the most basic rights of family life and justice to which we are all entitled.

I say to the hon. Member for Maldon (Mr Whittingdale) and the right hon. Member for Hitchin and Harpenden (Mr Lilley) that it is not the case that the problems we are dealing with are simply breaches of the criminal law which have not been investigated. Sir Brian Leveson states in his report:

“There have been too many times when, chasing the story, parts of the press have acted as if its own code, which it wrote, simply did not exist.”

The Prime Minister established the Leveson inquiry at the behest of my right hon. Friend the Leader of the Opposition because he knew there had to be major changes to end the intrusion and abuse the PCC and the many previous attempts at self-regulation had failed to end. If the Prime Minister deserves credit for setting up Leveson—and indeed he does—he has, I am afraid, undermined that by his extraordinary and impetuous decision to rubbish, within 24 hours of receipt of the report, Leveson’s key recommendation that there must be some statutory underpinning of a much-enhanced system of independent self-regulation.

I am sure that the Chairman of the Culture, Media and Sport Committee, the hon. Member for Maldon, has looked in detail at the fourth volume of the Leveson report, so he will have seen that what is proposed there by way of statutory underpinning includes providing incentives, such as in respect of costs, for the members of the press board—membership of which would be entirely voluntary.

Instead of a serious study of the Leveson report, the British press have produced some of the most extravagant comment I have witnessed from them. That includes Mr Trevor Kavanagh of The Sun, who claimed that Members of Parliament would risk

“looking like Putin or Beijing”

if we had a new press law.

We are all against any semblance of state control of the press. Sir Brian Leveson could not have been more emphatic about that. He says, in terms, that his proposed press board

“should not have the power to prevent publication of any material”

by the press. Instead he proposes a light-touch regulation system.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Mr Kavanagh might have had in mind the proposal on page 1780 of the report, which Sir Brian Leveson considers laudable and admirable:

“Interference with the activities of the media shall be lawful only insofar as it is for a legitimate purpose and is necessary in a democratic society, having full regard to the importance of media freedom in a democracy”.

One could imagine that being said in the Congress of China or Russia.

[Mr Straw]

I hope the hon. Lady makes better points than that if she is called to make a speech in this debate.

Turning to the objections that have been expressed about a light-touch regulatory system, I endorse the remarks of my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman). First, there is the objection the Prime Minister uttered, which is that

“for the first time, we would have crossed the Rubicon of writing elements of press regulation into the law of the land.”—[Official Report, 29 November 2012; Vol. 554, c. 449.]

As I pointed out to the House last Thursday, and as my right hon. and learned Friend pointed out again today, the Prime Minister’s claim is simply incorrect. The Press Complaints Commission came to me when I was Home Secretary to ask for protection to be written into the Human Rights Act 1998, particularly in respect of the apparent ease with which it felt complainants could otherwise get interlocutory injunctions to stop publication of material, for example, where it was likely to intrude into the privacy of individuals. I listened to the PCC and there were negotiations, the result of which is to be found in section 12 of the 1998 Act, subsection (4) of which says that when the courts are deciding whether or not to grant an ex parte injunction, they take into account, among other things, “any relevant privacy code”—the PCC code. In other words, it was the press themselves who wanted statutory force—legal force—to be behind their code, because they wanted protection. That was the crossing of the Rubicon, not anything in Leveson.

The second issue concerns the Irish Defamation Act 2009, to which my right hon. and learned Friend the Member for Camberwell and Peckham made such important reference. The Prime Minister said that we should look at that Act, because it

“runs to many, many pages, setting out many, many powers of the Irish Press Council.”

He added:

“It is worth Members of the House studying the Irish situation”—[Official Report, 29 November 2012; Vol. 554, c. 456.]

I have taken the Prime Minister’s advice, but it is a great pity that he failed to study that Act rather more closely. As my right hon. and learned Friend pointed out, although it runs to 35 pages, the provisions relating to the Press Council consist of one section—section 44—one schedule, which is two and a half pages long, and linking provisions such as those linking back to section 27, which provides a public interest defence for media firms that have signed up to the Press Council and have adhered to its code. I hope that the Secretary of State, or whichever Minister responds to the debate, will answer the question that has been put time and again from the Labour Benches and, to a degree, from her own: if the Irish Defamation Act is good enough for the Irish press, and has worked for them and for the British media with titles in Ireland, why would such a short set of provisions not be good enough for this House and the British press?

[Mr Whittingdale]

Will the right hon. Gentleman acknowledge that Lord Hunt asked for a similar provision to that in the Irish Defamation Act, and that that is not a problem? None of us objects to that; it is the statutory underpinning, which is a completely different prospect, that people find objectionable.

[Mr Straw]

The hon. Gentleman and I must be reading two different Acts, because section 44 of that Act contains statutory underpinning. It gives the Dail, the Irish Parliament, more direct power over the Press Council of Ireland than ever is proposed by Lord Justice Leveson for the press board in the United Kingdom.

[Ian Paisley]

In 2007, I was confronted by a journalist whose newspaper is subject to those regulations. I was handed my text messages and told that they were going to be printed. I threatened that Council on that journalist, and those texts never appeared—that Council does have teeth.

[Mr Straw]

It does indeed have teeth. I am afraid that the Secretary of State scored an own goal when she implied that because there had been no references made to the overseeing body it had somehow failed. If she read the Leveson report, she would have seen, on page 1715, that there have been

“between 340-350 complaints per year”

to the Irish press ombudsman, which was set up by this underpinning legislation. However, as people are satisfied with how this independent self-regulation, overseen by statute, works in Ireland, there have been no complaints to the higher body, and neither would there be here.

Extravagant complaints and comments have been made by journalists such as Mr Trevor Kavanagh, who is arguing with a report that does not exist, but quite a number of senior journalists have been altogether more thoughtful. Mr Paul Dacre of the Daily Mail told a seminar preceding the inquiry that

“there’s one area where Parliament can help the press. Some way must be found to compel all newspaper owners to fund and participate in self-regulation.”

Compulsion is the newspapers’ word, not mine, and their system of compulsion is the rolling contract proposal, but Sir Brian Leveson sets out in forensic detail why such a proposal cannot work.

The editors of The Guardian and The Times have both written thoughtful pieces. The editor of The Guardian spoke of the need for an arbitral arm that incentivised the regulated to pursue high standards and penalised anyone who walked away. Mr James Harding, editor of The Times, went further in a lengthy and very considered signed article. He said that the industry must have an “independent, muscular regulator”, and crucially he added that

“the Lord Chief Justice should appoint someone, probably an experienced lawyer, and a panel of two others to oversee this regulator…to prevent backsliding”

and to

“be a guarantor of the regulator’s independence and effectiveness.”

I agree with all of that. The issue for Mr Harding, Mr Rusbridger, Mr Dacre and most other thoughtful editors is how to achieve that end without the underpinning legislation that has been accepted in Ireland. The truth is that they cannot. In legal theory, if the Lord Chief Justice was willing, he could be asked to appoint a couple of retired lord justices of appeal to act as an arbitral body overseeing the regulator, but what would be their terms of reference or the criteria for their appointment? How would they operate? Any sensible Lord Chief Justice would say, “Thank you very much, but I am not getting into that unless I have statutory authority.” That is the fundamental flaw: the idea we can do all that while backing away from doing what was done in Ireland.

I want to make a final point about the internet. The editor of Mail Online, Martin Clarke, was quoted in last Saturday’s Financial Times saying in a rather triumphant tone that the internet had

“destroyed the ability of governments, companies and individuals to control the flow of information to the public”.

This chap, Mr Clarke, is tilting at windmills. It is never our objective or that of anyone else for the state in a free society to control the flow of information to the public. The issue is ensuring that members of the public are not defamed and that their privacy is not unfairly intruded on. It cannot follow that because we cannot do everything we should do nothing.

Seventy years, seven reports. This is where 70 and seven equals nine: the press have had their nine lives. It is time for the Government to recognise that and to agree to implement this magisterial report.

16:57

[Sir Edward Garnier (Harborough) (Con)]

May I begin by declaring an interest as a practising member of the defamation and media law Bar? I speak here, however, as a Member of the House and not as a barrister representing any particular client, claimant or defendant. The fact that I am currently acting for a well-known claimant whose reputation has been grievously damaged in the recent past has no bearing on what I want to say—

[Dr Thérèse Coffey]

By TV.

[Sir Edward Garnier]

As it happens, I have over the past 35—[Interruption.] Does my hon. Friend the Member for Suffolk Coastal (Dr Coffey) wish to intervene?

[Dr Coffey]

Yes. I would just like to point out that in the case of the person for whom my hon. and learned Friend is rightly working, it was television making references to that allegation, not the press.

[Sir Edward Garnier]

I think I might be permitted to know a little more about that case than my hon. Friend does. As it happens, I have over the past 35 years or so—[Interruption.] Would she stop mumbling?

Over the past 35 years or so, I have acted for and advised both claimants and defendants in more or less equal measure. Unsurprisingly, many of the defendants were newspaper publishers, editors and journalists and their broadcast media equivalents.

The House and the public as a whole owe a huge debt of gratitude to Lord Justice Leveson. His report is long but comprehensive. It is thorough and analytical. It contains opinion and recommendations, but they are based on fact, founded on the evidence he heard and read. Neither he nor his report can be described as “bonkers” and the report does not resort to hyperbole, make hysterical criticisms of the media or demand state control of the press. It is, in my view, a fair and balanced report that has exposed and tackled some difficult, if not entirely novel, questions.

I say that the questions were not entirely novel, because in this House in January 1960, a Mr Leslie Hale, who was then the Member for Oldham West, moved to repeal the Justices of the Peace Act 1361, among whose provisions was one to outlaw eavesdropping. A predecessor of mine as Solicitor-General, Mr Peter Rawlinson, then the Member for Epsom, said:

“Translated into ordinary terms, the Bill which the hon. Member seeks to introduce, dressed up like a radical bird of paradise, is nothing less than a modest charter for peeping Toms and eavesdroppers…It is also a charter for other strange people who pester law-abiding citizens and persons of that kind.”

He went on to say:

“The modern use of the Bill is mainly to prevent the ordinary citizen from being pestered by those unbalanced eccentrics who, with an imagined grudge, patrol the outskirts of houses, terrifying families by constant use of the telephone, or by those people who are unbalanced and usually malevolent but who do not break the law by means of assault or trespass. Therefore, there is no weapon which the law-abiding citizen has against them except the use of these powers which may be the only effective one which rests in the hands of such citizens.”—[Official Report, 26 January 1960; Vol. 616, c. 54.]

So over a period of about 600 years the issue of intrusion into the private lives of others by use of illegal listening devices, be it the human ear or electric surveillance machinery, has been current. This is one of the reasons why the inquiry by Lord Justice Leveson was initiated.

At heart, it seems to me that we are discussing the age-old problem now described as the tension between articles 8 and 10 of the European convention on human rights. Very often, people seem to remember the rights, but they do not seem to remember the exceptions to those rights. Article 8 says:

“Everyone has the right to respect for his private and family life, his home and his correspondence”,

but it goes on to say:

“There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others”,

so it is very much a qualified right, as is article 10, which provides the right to freedom of expression. It states:

“Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.”

But paragraph 2 says:

“The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.”

There are the tensions between articles 8 and 10, and there also are the exceptions to those two great rights which nobody in the House or elsewhere would find in the least bit controversial.

The issue that we are confronting—my hon. Friend the Member for Maldon (Mr Whittingdale), the Chairman of the Select Committee, drew this out, as have other Members this afternoon—is not whether we should have state regulation of the press. We are not talking about state regulation of the press in the sense that Mugabe, Putin or the Chinese politburo control the press. What we are talking about is whether the press needs to have a self-regulated body which is recognised by the state as being a competent authority to regulate the press’s activities.

The distinction is important. Much of the argument that one has seen in the press and elsewhere, and to some extent in discussions in and around the House, has been utterly off the point. It is to traduce the work of Lord Justice Leveson to suggest that he wants state control of the press. He has said on any number of occasions—I shall quote one or two examples—that the ideal that he is looking for is that

“the industry should come together to create, and adequately fund, an independent regulatory body, headed by an independent Board, that would: set standards, both by way of a code and covering governance and compliance; hear individual complaints against its members about breach of its standards and order appropriate redress; take an active role in promoting high standards, including having the power to investigate serious or systemic breaches and impose appropriate sanctions; and provide a fair, quick and inexpensive arbitration service to deal with any civil complaints about its members’ publications.”

As a member of the Bar, I would of course like people to litigate—that is how I pay my mortgage—but the short point is that if a system can be devised that has the approval of Parliament and which carries with it public approval and confidence, it seems to me that that mechanism, just as the Financial Services Authority is a body given permission by statute, could allow the press to inhabit a world of free expression, subject to articles 8 and 10, that would not interfere with its rights but would also adequately protect, by self-regulation, the rights of the victims of press intrusion and other forms of activity that are subject to the criminal or civil law. Of course many of the activities that led the Government to set up the Leveson inquiry were already against the criminal law, as my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) correctly spotted. It is illegal to hack, blag and interfere with other people’s telecommunications under various statutes going right back to the 1361 Act that outlawed eavesdropping.

[Sir Gerald Howarth]

Did not Lord Justice Leveson say that criminality on an industrial scale was itself part of a persistent culture of abusing private individuals, in particular, who have no recourse unless through my hon. and learned Friend, notwithstanding his modest costs? We in this House at least have a forum, but they have none at all, and that is why the report is so important. It revealed that there was a culture, and the press must deal with that, not just the criminality.

[Sir Edward Garnier]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Shorter interventions would be helpful. I know that two knights want to exchange views, but I worry about the costs that might be charged.

[Sir Edward Garnier]

I agree with the premise of my hon. Friend’s point but think that we perhaps draw different conclusions from it. Lord Justice Leveson has stated, as did our right hon. Friend the Secretary of State at the beginning of this debate, that the status quo is not an option, so if we learn nothing else from Leveson, we should learn that what went before cannot go on. It seems to me to be uncontroversial that the PCC is dead, for example. We need some other form of disciplinary body or regulatory system that matches public concern but also has parliamentary approval. We could approve through parliamentary procedure a body that is not statutory, but we could also approve a regulatory body that is not the creature of Parliament but that would be recognised and saluted by statute. There are plenty of other bodies that discipline the professions or other public bodies but that are not controlled by the Government.

[Mr Dominic Raab (Esher and Walton) (Con)]

Lord Justice Leveson’s approach is to argue that regulation must be independent not only of the press, but of Parliament, but he then calls for a statute, drafted by Parliament, detailing the criteria for recognition of the regulations, and that covers everything, from membership of the regulator to the content of the new rules and its powers. How does my hon. and learned Friend reconcile what strikes me as a fatal paradox in that approach?

[Sir Edward Garnier]

I do not have to reconcile it, because I find the answer on page 1,780 in part K of the report. I will not read it out because I do not have enough time, but I suggest to my hon. Friend that it repays reading. He should look at paragraphs 6.38 and 6.39. If I was a member of an appellate court, I would simply ask the shorthand writer to transcribe it into my judgment, but I cannot—I say to the Hansard reporter, have a go. Essentially, my hon. Friend’s point is one that is often made. If I may say so, with a little thought and study of the report, he will find that it is not strictly necessary to have the concerns, genuine though they are, that he displays and that they are dealt with by Lord Justice Leveson.

Time is running short and I have galloped through the points I wanted to make, no doubt inadequately and in a somewhat garbled fashion. There is plenty in the report that touches on the police, the conduct of the press and the appalling treatment meted out to victims, such as the Dowler family and others. That is all a given. It is also a given that the status quo ante must finish.

The debate that we are having, in this House and outside, is about what we mean by statutory regulation. To me, statutory regulation means no more and no less than what Lord Justice Leveson says: that a statute will recognise as an effective way of dealing with press conduct—and wider media conduct, including the internet—the disciplinary system to which the press must adhere. Clearly, we need buy-in from the widest possible section of the media, including the ordinary traditional press—the newspaper groups—and television and broadcast media through to the local press and others. I recognise that there will be difficulties over individual bloggers and so forth.

If we concentrate on what this report is not about, we miss a trick. Let us concentrate on what it is about, which is the democratic and constitutionally proper regulation of a disciplinary system.

17:10

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

I was a staff journalist for 10 years. For nine of those years, I worked for the Daily Mirror, which at its zenith sold 5 million copies a day. I reported directly to the editorial director, Hugh Cudlipp, this country’s greatest ever popular journalist. Cudlipp was obsessive about factual accuracy and fair reporting. The excesses that led to the Leveson inquiry could never have happened in Cudlipp’s bailiwick. I was proud to be a journalist and remain a member of the National Union of Journalists to this day.

It would be difficult to retain that pride if I were a working journalist in the newspaper industry today. Respect for fact has almost vanished. When I was Chairman of the Culture, Media and Sport Committee, a newspaper printed a big story about our Committee going to Los Angeles. I rang up the journalist who wrote the story and said, “It isn’t Los Angeles—it’s Scarborough.” The journalist replied, “Oh, it’s all the same thing.” Fair reporting: tell me another joke! The dictum in 1926 of C. P. Scott, the editor of The Manchester Guardian, is dead and buried. He said of the newspaper:

“Its primary office is the gathering of news. At the peril of its soul it must see that the supply is not tainted. Neither in what it gives, nor in what it does not give, nor in the mode of presentation must the unclouded face of truth suffer wrong. Comment is free, but facts are sacred.”

Twenty years ago, the National Heritage Committee, of which I was Chairman, conducted an inquiry into privacy and media intrusion. What it said in its report, published in March 1993, might just as well have been written today:

“There cannot be a free society without a free press…a free society requires the freedom to say or print things that are inconvenient to those in authority…While continual antagonism between the press and persons in authority is unnecessary, critical tension between them is an essential ingredient of a democratic society and far preferable to collusion between the press and public figures…At the same time, in a democratic society there must be a right to privacy as well…it must not be ignored by those who claim that everything that everybody does is fair game, so long as it provides a saucy story to be published in the diary column of a broadsheet newspaper or across the front page of a tabloid…The Committee’s concern, in conducting this inquiry, has been mainly with the ordinary citizen who in the normal course of his or her life will never come into contact with the broadcast or written media except as a viewer, listener or reader; but who suddenly becomes of interest to the media, due often to circumstances beyond his or her control, such as becoming a crime victim or being related to the victim of a crime or terrorist act. Such people, as a result of injudicious, thoughtless or malicious reporting, can suffer additional distress at what is already a time of trauma and shock. Their family relationships, their jobs, their businesses and their careers can all be seriously damaged. The Committee does not believe that anyone has the right to inflict such harm on innocent persons.”

The Committee went on to say:

“A balance is needed between the right of free speech and the right to privacy. The Committee’s view is that at present that necessary balance does not exist, and in this Report it recommends action to achieve it. The Committee does not believe that this balance can or should be achieved by legislation which imprisons the press in a cage of legal restraint…The Committee would be deeply reluctant to see the creation of any system of legal restraints aimed solely and specifically at the press or the broadcast media. It believes that self-restraint or, as the Committee prefers to call it, voluntary restraint, is by far the better way.”

It recommended the enhancement of

“voluntary regulation by the press through the strengthening of the Press Commission (which the Committee recommends should succeed the Press Complaints Commission) and its Code, and expansion of the Commission’s scope”,

and the

“creation of a statutory Press Ombudsman, as a back-up to the Commission’s role.”

[Jim Dowd]

Do not my right hon. Friend’s experience and knowledge and the facts he has just regaled demonstrate how circular this argument has become and that we really ought to do something different, rather than simply repeat the inactivity and mistakes of the past?

[Sir Gerald Kaufman]

My hon. Friend intervened just as I was about to go on to that very point. Twenty years ago, the National Heritage Committee made those recommendations. We analysed the disease and proposed a remedy. During the four remaining years of the then Conservative Government, nothing whatever was done. I am sorry to say that, during the 13 years of the Labour Government who followed, nothing at all was done either. We have known about this disease for very many years. The Leveson inquiry was founded because of new and horrific revelations about what the press did. What the press was doing 20 years ago should have been remedied then, but neither party did so. We face the same problems with the press that we faced in 1993, except that we now know far more about the malpractices of the press than we did then.

We can wait no longer. Even before our 1993 report, in 1989 David Mellor warned the press that they were drinking in the last-chance saloon. In the 23 years since then, the press have been on a prolonged pub crawl. Now this House must say, “Time gentlemen, please.”

I am as firmly opposed to statutory control of the press as I have ever been. That is the ethic of a free press in any country. We went to the United States and saw the way in which it could regulate the excesses of the press through privacy Acts protected by the fifth amendment. We could have had the same thing here. We could have had a privacy Act that applied not only to the press and that was protected by a public interest defence. It would have been valid, because when Clive Ponting was prosecuted under the Official Secrets Act for revelations about the sinking of the Belgrano, he pleaded the public interest and the jury acquitted him. We therefore had a functioning system for protection, but what happened then is that my good old friend, Douglas Hurd, brought a Bill before Parliament to abolish the public interest defence under the Official Secrets Act.

As I have said, I am as opposed to statutory control of the press as I have ever been, but the press cannot go on pretending to regulate itself while not doing so. Although the Leveson report’s recommendations are not perfect—the gaps in the way in which the body is to operate are clear to anybody who reads the report and will cause problems in implementation—they are incomparably better than what exists now and the alleged improvements proposed by the press.

As someone who would be exceptionally reluctant to vote in this House for statutory backing of a voluntary press regime, I say firmly to the press proprietors, “Either you establish the Leveson regulation regime on a voluntary basis fast, without dragging your feet, and ensure that all proprietors, including Richard Desmond, participate, or you will be responsible for statute entering into press regulation.” It is up to the press. There is a short time for them to make that decision. They will be responsible if statute enters into press regulation. It is important for them to bear that in mind in the short period that remains before decisions are made.

17:21

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Two questions must be asked of any and every proposal for legislation. The first is what problems it will solve and the second is what problems it will create.

First, the problems that gave rise to the Leveson inquiry were phone hacking, bribing and outrageous criminal libel. Those are already against the law or legal redress exists for them. The problem was a failure to enforce the law. Leveson boldly dismisses those issues in asserting, without adducing any evidence, that

“More rigorous application of the criminal law…does not and will not provide the solution.”

Of course it will. It is now, belatedly, doing so. Scores of people have been arrested and face serious charges. That is a powerful deterrent against any repetition.

The apparatus of independent regulation backed by statute, which Leveson proposes, would have no powers to address the very problems that he was supposed to be dealing with. Indeed, it could not do so, because they are matters for the police and the judiciary. His solution would not have prevented or provided punishment for the hacking of Milly Dowler’s phone, the payments to police by the News of the World or the vile libel by the Sunday Express of the McCanns. Indeed, Leveson states in his recommendations that

“The Board should not have the power to prevent publication of any material, by anyone, at any time”.

The board could not, therefore, have stopped that libel.

If Leveson had acknowledged that, it would have truncated his report, so he went ahead and proposed a regulatory structure that, amazingly, does not specify the problems with which it is supposed to deal. It is a solution looking for a problem. That, in my experience, is a dangerous thing to create. It would have powers to draw up a code of practice, but Leveson does not spell out what the contents of the code should be. The independent regulator, with the approval of its statutory minder, but not of this House, would be able to select the problems that it tackled.

The second question is what problems the proposal might create. Leveson was goaded into making complex proposals by the two most dangerous phrases in the political lexicon: “Something must be done” and “The status quo is not an option.” That is the mantra of those in the commentariat who have no idea what should be done, but who want to sound positive. I have little sympathy for the newspapers that invariably demand unspecified Government interference to solve any problem and now find themselves hoist by their own petard. The status quo, however unsatisfactory, is sometimes less bad than all the alternatives. Churchill said that democracy is the worst kind of government except for all the alternatives, and I believe that a free and unregulated press, with all its failings, is the worst kind of media except for all the alternatives, which, by necessity, involve state regulation.

I do not have a rosy view of the press and I suffered from them repeatedly over 20 years. I remember the “back to basics” initiative, when John Major’s use of that phrase was taken by the media as advocating family values, even though he made no reference to that. The press claimed it was their duty to investigate the private life of every Cabinet Minister. They called on all my neighbours, offering them money if they had “any filth about Lilley.” They offered rewards in the local pub opposite my house for people who knew anything about me or could see any “goings on” in our bedroom. Worst of all, the Daily Mirror made its front-page splash a story about me visiting my nephew who was dying of AIDS. It was intended to smear me in some vile way, but it simply caused immense distress to my sister. It was a vile time so I know how horrible a free press can be.

Had the strong, independent regulator underpinned by statute that we are considering existed, would—and should—it have called off the press hounds during “back to basics”? There were no calls from the Opposition Benches for the then regulator to do so. I do not believe that a regulator should have the power to do so, but if it did have such a power, the decision would be intensely political. We would be handing over to the regulatory body a political power of which we need to be aware.

[Sir Gerald Howarth]

Those of us who have sympathy with Leveson’s case are not seeking to hand over powers. We are seeking to establish—I think there is common ground across the House on this—whether the press should set up a robust self-regulatory body. There is nothing from our experience of the past 70 years that offers any confidence that it is capable of doing that, which is why some of us believe—as Lord Justice Leveson said—that there should be some statutory validation of that self-regulatory body.

[Mr Lilley]

I am in favour of the press having better standards but the best form of regulation is what we saw—The Guardian exposing the failures of the News of the World; “Panorama” exposing the failures of “Newsnight” —not a regulatory body, whether or not underpinned by the state. My hon. Friend is uncharacteristic. Those who jump to the conclusion that we need state-backed regulation assume that that is always an improvement on voluntary actions and arrangements. Such faith is a triumph of hope over experience and people forget the law of unforeseen consequences. Regulation invariably has unforeseen—but not necessarily unforeseeable—consequences.

[Jim Dowd]

Will the right hon. Gentleman give way?

[Mr Lilley]

I will not at the moment. Lord Leveson proposes giving a state regulator the power and duty every two or three years to review and approve—or disapprove—the code and how it is implemented and enforced by the regulator. That is either a substantial power with important consequences or a trivial power with negligible consequences. The latter is unimportant so why insist on it? If the power is significant and will have substantial ramifications and consequences for the way the regulator behaves, the content of the code and the way it is enforced, we should look at it very carefully.

I know from many years of studying regulation that one consequence of regulators being given the power to review and prescribe detail is that the regulator—the state supervisor—will at every biennial or triennial review demand not less but more and stricter regulation. Has my hon. Friend the Member for Aldershot (Sir Gerald Howarth) ever known a regulator demand less regulation rather than more? It is a recipe for regulatory creep and increasingly detailed specification by the state supervisor of what the so-called independent regulator must do.

The other consequence that some fear from a regulatory system that is overseen and supervised by a statutory regulator is that the regulator will nudge the code and its enforcement in line with the prejudices of the Government of the day. I doubt that that would be the immediate consequence, although it could be the consequence in the long term, but the statutory body that oversees how the regulatory apparatus works would follow either the Government’s prejudices or its own. We want to beware of that. If the statutory body is like the regulatory structures we normally set up, we will have a pretty clear idea how it will behave, but by definition it will be outside the direct control of the House, so hon. Members will have no say in it.

[Mr Raab]

I have an objection in principle to a statutory body or a body underpinned by statute both making and enforcing the rules. Does my right hon. Friend recognise that such a blurring of powers in the new body risks arbitrary decision making and is inimical to the rule of law?

[Mr Lilley]

Exactly; that is very much what I fear if the statutory body, following its own prejudices, determines the contents of the code and how it is enforced. Such a body would almost inevitably be made up of the sort of people who run and control the BBC. The BBC Trust has got into trouble for telling untruths about how it decided there should be unbalanced coverage of climate change and many other things, so we know the sort of prejudices such bodies have.

Lord Leveson specifies only one item of the code that the new body should contain. He says that it should “equip” the

“body with the power to intervene in cases of allegedly discriminatory reporting and in so doing reflect the spirit of equalities legislation.”

The body will be a politically correct one, enforcing politically correct standards on the media and press.

The body will also have the power to establish a

“ringfenced enforcement fund, into which receipts from fines could be paid, for the purpose of funding investigations.”

It will therefore have an incentive to levy fines, and in that way it will carry out investigations to increase and enhance its power and control over the so-called independent regulator.

[Chris Bryant]

Will the right hon. Gentleman give way?

[Mr Lilley]

I am afraid I will give way only if the hon. Gentleman apologises for the way in which he has traduced my right hon. Friends.

[Chris Bryant]

rose—

[Mr Lilley]

No. I am not giving way to the hon. Gentleman.

The House should think seriously about setting up a body of statutory supervision that has detailed and substantial powers to influence how the so-called independent regulator behaves, and that has an incentive to enhance, increase and make more detailed that interference in regulation. The House will have no direct control over it, so it will therefore be an abnegation of the House’s duty.

The free press is vile, but it is better to have a free press with all its failings than to have a state-controlled and regulated press. I hope we do not go down that route.

17:33

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

As hon. Members know, the press of late have come in for some knocking—justifiably—for scandal, corruption and illegal practice, but it is also obvious from the inquiry that urgent action needs to be taken to restore the public’s confidence in the media. I do not intend to dwell on the reasons for the inquiry because all hon. Members agree on them. We also agree that it is vital that freedom of the press is maintained and upheld, as it is in any strong democracy, but I was glad that the inquiry did not shy away from controversy, and that it recommended, in effect, a regulatory body whose independence is guaranteed by law. We have heard fine speeches from hon. Members on both sides of the House—there are entrenched feelings on both sides, and this debate is an important one.

Unlike wholly independent regulation, regulation by either the state or the media would clearly fail to be truly accountable. At the same time, it is vital that we do not throw out the baby with the bathwater, so protecting freedom of expression and high standards of journalism is non-negotiable. Much attention has been paid recently to the kind of model we could look at for the regulated body. Something similar to the Office for Judicial Complaints or those bodies overseeing medical practitioners, vets, barristers or lawyers, have been suggested by some. There is, of course, a crucial distinction. They are licensed and, because they are licensed, they are entitled to practice, and that is an entirely different thing altogether. Incidentally, all those bodies are creatures of statute and nobody says that they interfere politically with anybody delivering services. However, I would think that every journalist would baulk at having to be licensed, and naturally so.

We need something to replace the Press Complaints Commission, which palpably has failed over many years to deliver. It has been characterised by lack of teeth and ineffectual compromises and, in addition, it has only covered the actions of the press that have opted into the system. Some serial transgressors decided to opt out and redress against them was then limited to the libel courts, access to which was unaffordable for many people—indeed, the vast majority.

We have heard about the Irish model. Although that is not a statutory body, it is recognised in legislation—the Defamation Act 2009. It has the power to deal with complaints made against its member publications. There is also a press complaints ombudsman, and both the ombudsman and the Press Council of Ireland are funded by a levy paid by each member title, based on circulation. Member titles of the PCI become members on a voluntary basis and are subject to a code of practice. Interestingly, as has been mentioned, all UK newspapers that also publish in Ireland have joined the PCI, and that includes even those that now oppose what they think is statutory regulation in the UK. During the inquiry, oral evidence was heard from many corners. A number of individuals suggested that the PCI could be a model to be replicated in England and Wales, and that it is recognised by statute, but not set up by statute.

The PCC is UK-wide. It is confusing, however, that despite servicing all parts of the UK, the PCC, which is based in London, states on its website:

“Newspapers from all four countries circulate across borders and are often owned by the same companies. Separate PCCs…would lead to confusion…as well as considerable additional expense.”

It is disheartening that the Prime Minister has hitherto hinted that he is reluctant to follow suit and implement the findings of the inquiry in total. Supporting regulation in principle is not enough. Changes must be implemented in practice for there to be a meaningful change. We have heard about 70 years and seven attempts and so on, but central to any new system must be access to restitution, and a simple and easy-to-navigate complaints process.

In his statement to the press last week, Sir Brian Leveson chose his words very carefully. He pointed to the elephant in the room: the internet and Twitter, which is another issue that we will have to look at in the not-too-distant future. I would welcome comments from Government Members on how we can tackle that anomaly.

Lord Leveson’s inquiry was a careful and thoughtful process, and its recommendations have been reached by hearing a vast amount of evidence. Sir Brian has said that statutory underpinning is vital. He was at pains to say that freedom of the press was vital, and that freedom from political interference is, of course, extremely important. On statutory underpinning, he said:

“What would the legislation achieve? Three things. First, it would enshrine, for the first time, a legal duty on the Government to protect the freedom of the press. Second, it would provide an independent process to recognise the new self-regulatory body and reassure the public that the basic requirements of independence and effectiveness were met and continue to be met; in the Report, I recommend that this is done by Ofcom. Third, by recognising the new body, it would validate its standards code and the arbitral system sufficient to justify the benefits in law that would flow to those who subscribed; these could relate to data protection and the approach of the court to various issues concerning acceptable practice, in addition to costs consequences if appropriate alternative dispute resolution is available.”

He goes on to say:

“Despite what will be said about these recommendations by those who oppose them, this is not, and cannot be characterised as, statutory regulation of the press.”

[Eric Joyce (Falkirk) (Ind)]

We have heard a great deal about the great and good so far in this debate, and it has been interesting, but does the right hon. Gentleman think that sometimes Leveson might just say something—it might actually be so—but that we might take a different view?

[Mr Llwyd]

Having read large parts of the report—it is a carefully constructed document that has evaluated the evidence—I take Sir Brian Leveson at his word. I do not see what benefit would accrue to him if he said something he did not believe to be true, and I do not think for one minute that he would say that.

[Eric Joyce]

We just might disagree.

[Mr Llwyd]

Others may disagree, of course—that is why we are having the debate. I respect the fact that others may disagree—that is what debate is all about.

Personally, I do not quite see the merit in the current debate being about “non-statutory” or “statutory”. It seems to me that there will have to be some form of legislation in any event. Some argue that because the head of Ofcom is appointed by Government, choosing Ofcom or a similar body as the underpinning regulatory body—or, say, a version of it—could lead to political interference. I had a debate on the radio on Friday with the ex-head of legal affairs at the Telegraph—a man I have known for many years and whose views I respect. He proposed the notion that involving Ofcom amounted to possible political interference. I asked him for examples of where Ofcom had acted politically in the past. I am yet to hear of any example of where that may be the case. Sir Brian’s proposals are clearly well thought out and the exact opposite of “bonkers”. The Government should adopt them in full.

[Stephen Williams (Bristol West) (LD)]

The right hon. Gentleman has just confirmed what I was hoping he would say—that he feels that the proposals are not bonkers. We have all been written to by Christopher Jefferies on behalf of the Hacked Off campaign. He is a constituent of mine and someone I have known for over a decade. He was arrested, during which time he was traduced by the national newspapers, something he has said was the worst period of his life. He asks us to endorse Lord Leveson’s proposals. Does the right hon. Gentleman agree?

[Mr Llwyd]

Yes, I do—that has been the theme of what I have been saying for the last seven minutes. [Interruption.] The hon. Gentleman has got his intervention in and that is quite important. However, I say with respect that I agree. We have all received letters from families and individuals who have suffered immensely at the hands of the press of late. I therefore welcome the proposals. We owe it to all those families and individuals to get it right, because if we in Parliament fail to grasp the nettle for the eighth time in 70 years and do not put matters right, it will be tantamount to letting them down very badly indeed and turning our backs on this historic opportunity.

[David Simpson (Upper Bann) (DUP)]

Does the right hon. Gentleman believe that the Leveson recommendations contain sufficient protection for whistleblowers?

[Mr Llwyd]

Surely it is up to us as parliamentarians to ensure that we build those protections in. There are many important core things that we need to ensure. For instance, we need to ensure that people’s sources are kept in the private domain, and there are many other things that we need to do. Those are the details that we shall have to go through carefully in the coming weeks.

Like the press, we Members of Parliament are now held in low esteem, because of the scandals involving some Members. Failure to deal decisively with this problem without fear or favour will plunge us into further and deeper opprobrium, and we will deserve it.

17:44

[Zac Goldsmith (Richmond Park) (Con)]

We are having today’s debate because the current system of media self-regulation has not only failed, but failed spectacularly, again and again. I suspect that the majority of Members in the Chamber agree on what now needs to be achieved—in other words, the outcome. Where there are differences, they relate to the method of delivering that outcome. An editor of the “ConservativeHome” website—a vehicle that has been vociferously opposed to any kind of legislation—wrote a few days ago, just before the report came out:

“What’s needed post-Leveson is a settlement that helps…ordinary victims…That’s a new, non press-run complaints body with the power to fine and punish papers—which is, none the less, independent of the state.”

I agree with that absolutely, and I am sure that most other Members do. The question is: can we achieve that without legislation? I do not think that we can.

I question some elements of the Leveson report, which I will come to in a moment, but I do not accept the hyperbole emanating from those media commentators who are opposed to change. Nor do I think it responsible for otherwise serious papers to imply that those MPs who advocate some form of regulation are motivated by self-interest. I think we can all agree that The Daily Telegraph was scraping the barrel when it accused my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind)—who is not in his place at the moment—of taking revenge on the media because he had been criticised for supporting the poll tax in 1990. I do not know my right hon. and learned Friend particularly well, and there are many issues on which we disagree, but it strikes me as unlikely that he would harbour a grudge for 25 years over something so routine.

We have been told that any form of legislation would irreparably damage the ability of the press to do what it does best—uncovering corruption, exposing hypocrisy, holding the elite to account—and that our democracy would be impaired as a result. However, no serious commentator, and no MP, is advocating any measure that would weaken the scrutiny of elected representatives or hand them any control over the press. At most, some MPs are calling for statutory recognition of an independent regulator. We want something that looks like the Press Complaints Commission but that is not controlled by the very people it exists to regulate—in short, a PCC that is independent of the media and of politicians, and that has the power to impose fines and demand apologies.

None of this is inherently new. There is nothing new about fines—the Daily Mail and the Daily Mirror were both fined this year for contempt of court—and the principle that journalists and newspapers should abide by a code of practice is well established. It has been accepted by editors and proprietors for decades, since the editors’ code of practice came into being. The difference is that a new code might be more than simply a fig leaf.

Some commentators argue that a new statute would provide a greater opportunity for a future authoritarian Government to gag the press. That is an illogical argument. A statute can be drafted to prevent amendment other than by fresh primary legislation, which would leave a future Government in exactly the same situation as the one we are in today. Regardless of that, however, it is a basic fact of democracy that with enough votes, any Government can pass any law they like, as the right hon. and learned Member for Camberwell and Peckham (Ms Harman) pointed out earlier. I suppose that that is one of the downsides of any democracy, as well as one of the upsides.

[Jim Dowd]

One of the principles of this place is, rightly or wrongly, that Parliament is sovereign, but is it not an act of the grossest deceit and vanity for any Member to claim that, magically, we are noble but that those who come after us might not be?

[Zac Goldsmith]

The hon. Gentleman makes a good point; I agree with him.

A new statute to make independent regulation effective would improve investigative journalism, if it included express public interest defences. It would ensure that when the ends were in the public interest, the means would be justified. The example of The Daily Telegraph has already been cited, but I will give it again. The information that led to the expenses scandal was illegally accessed, but it was so obviously in the public interest that no one has ever challenged the newspaper. Theoretically, it could have been challenged. We now have an opportunity to protect journalists engaged in that kind of activity.

Let us not pretend that the state does not already influence the media; it does. There are countless laws relating to the press, a number of which—defamation and contempt, for instance—bear directly on the content of newspapers. What is more, despite arguing vigorously against any form of state intervention in the media, Lord Black and Paul Dacre have both advocated the use of legislation in their own submissions to Leveson. Both advocated a tribunal that could hear defamation and privacy cases and protect newspapers from high legal costs and damages, and both acknowledged that that would require statute. It does not follow that legislation would inhibit journalism. For example, Finland, which has been No. 1 on the world press freedom index in eight of the past 10 years, has a system of independent press regulation backed by statute. In 2003, it passed a law that gave people a right of reply and gave publications a duty to correct.

Television has a far higher level of regulation than anything I—indeed, most people in the Chamber—would endorse for newspapers, but it is worth noting that, no matter what survey we choose to look at, we see that television remains the country’s most trusted medium. Neither is television journalism cowed. Every Government, more or less without exception, have taken issue with the BBC, fought with the BBC and actively disliked the BBC. In addition, many of the recent high-profile exposés—for example, of Jimmy Savile, Winterborne View, of “The Secret Policeman”, racism in Polish football and so on—came from television.

Those who oppose any form of legislation have genuine fears, and I absolutely do not seek to discount them or pretend they do not exist. Good regulation would, I believe, improve our newspapers without inhibiting any public interest journalism; bad legislation would do immeasurable harm. There is room here to get it very wrong.

I want to point briefly to what I believe is a mistake made by Lord Leveson. The same “ConservativeHome” editor I cited earlier made a statement that I thought risible at the time. He said:

“Essentially, they”,

meaning advocates of legislation,

“want to create a climate of opinion in which, for example, doubt can’t be expressed about whether global warming is driven by human activity.”

Having read much of the Leveson report, although I admit not all of it, I have some concerns. Instead of confining himself to protecting the victims of newspaper smears and malpractice—Christopher Jeffries, Milly Dowler and so forth—I believe Lord Leveson has strayed beyond his brief. Let me quote directly from the report:

“Overall, the evidence in relation to the representation of women and minorities suggests that there has been a significant tendency within the press which leads to the publication of prejudicial or pejorative references to race, religion, gender, sexual orientation or physical or mental illness or disability…A new regulator will need to address these issues as a matter of priority, the first steps being to amend practice and the Code to permit third party complaints.”

The rumbustious, politically incorrect and sometimes irresponsible—and, in my view, occasionally, appalling—approach of the tabloids is not to everyone’s taste, but in an open society, it is part of the rough and tumble of free expression. I know I am not in a minority on either side of the House when I say that we must never make it possible for lobby groups with their own political agendas to suppress free speech. Unless there is an individual victim with a legitimate grievance, the regulator has no business interfering.

[Rory Stewart (Penrith and The Border) (Con)]

Could my hon. Friend produce an example of such a system somewhere other than Finland and Ireland? One of the problems of this debate is that it is difficult to point to a country such as the United States, France or Germany where such a regulator exists, but perhaps I have misunderstood.

[Zac Goldsmith]

I sense that an answer is bubbling up in the speech we will hear from the hon. Member for Rhondda (Chris Bryant). I cannot answer my hon. Friend’s question, as the examples I have given are the examples I know, but it does not change the principle. In effect, we are effectively talking about taking the editor’s code—a code written up by the editor—and giving it teeth. What I cannot understand is why the media commentators who so viciously oppose any kind of legislation would oppose putting into law something that they themselves have deemed okay and appropriate because they have designed it themselves. There is a break in the argument there that I am yet to understand.

I will actively support the creation of a genuinely independent regulatory body, backed up in law, that exists to even the playing field, so that newspapers can be held to account for their behaviour, so that individuals can seek fair redress and so that the code can be seen as real and not, as it is today, synthetic. I would not support a Bill that went beyond that. In common with the right hon. and learned Member for Camberwell and Peckham—I mention Peckham and the other lovely part of the constituency—I support the creation of a slim Bill that guards against slippage and creep, but which does the job.

Finally, I want to make a suggestion. When the Secretary of State meets editors tomorrow, I urge her to ask them to develop a proper plan—not the already and widely discredited Hunt and Black proposals, but a real plan—and then to present it early next year, in January or February. Parliament should then be invited to decide in a free vote—in my view, it must be a free vote—whether the plan goes far enough. If we decide that it does, that is the end of the matter. If we decide it does not, we would commit ourselves to creating a new PCC backed up by statute. As a means of avoiding division in this House, which my right hon. Friend the Secretary of State has said she wishes to avoid, over such a complex and highly sensitive issue, I can think of no better mechanism.

17:54

[Jim Dowd (Lewisham West and Penge) (Lab)]

It is a pleasure to follow the hon. Member for Richmond Park (Zac Goldsmith), who made what I thought was a cogent and clear statement of the case. Although I did not agree with the conclusions that the Secretary of State has reached—let us hope, pro tem—I strongly share her view that there is not that much between most Members about what needs to be done about the conduct of the press. I agree most strongly with the views expressed by the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) who said that if there is a conflict between the victims of the press and the owners of the press, this House must come down clearly on the side of the victims.

Members have spoken from their own personal experience—I, too, have had my private life dragged through the pages of the tabloids. As a holder of public office—I was a member of Lewisham council for 20 years before I came to this House 20 years ago—I might be regarded as fair game, but other members of my family and my friends did not stand for public office, and none of my election literature ever featured any of them. It was not because I was ashamed of them, but because I was not asking anybody to vote for them. I was asking people to vote for me, and the wise people of Lewisham repeatedly did so over the years.

I am prepared to take a bit of rough and tumble myself, but one of my daughter’s friends had her school staked out by journalists from one particular tabloid, which I think is absolutely unforgiveable. People in that situation need not just our sympathy and warm words but our protection, and we need to formulate a system so they can obtain it. I disagreed in a number of ways with the right hon. Member for Hitchin and Harpenden (Mr Lilley). We do not need just a punitive system, but a preventive system—not one where people can get redress, but where they are protected in the first place from having to undergo these traumas.

Let us not forget where the origins of the Leveson report lie. Most Members will recall the famous publication by a chap called Peter Burden—“Fake Sheikhs and Royal Trappings”, a story about the News of the World. In one part of the book, he recounts a conversational exchange with one of the journalists at the newspaper. Let me stress, however, that anybody who believes that the News of the World was a one-off and that the problem has now been solved is living in a dream land. This shows the way the tabloid press behaves. The conversation culminated with a Mr Greg Miskiw—currently, I believe, before the courts, awaiting trial for illegally accessing telecommunications—saying:

“that is what we do—we go out and destroy other people’s lives.”

That is clearly the most damning statement in the book, but it goes on. A particular reporter left the News of the World, it says, but

“nothing changed. Over many years the paper has set out deliberately and without compassion to destroy other people’s lives in order to sell newspapers. The supreme discomfort of others is meat and drink to the paper, and the extent to which they hurt people concerns them only as far as the cost of any damages that might subsequently be claimed. Cynical judgements are made about the price of knowingly committing some actionable offence, assessing what a likely settlement would be, and balancing that against the anticipated increase in sales.”

That is the morality of tabloid journalism—and it is and has been rife throughout the industry.

I will say that those excesses have been curbed to some degree in recent years—or certainly in the most recent year. Since the establishment of the Leveson inquiry, there has been a marked improvement in behaviour, but only because of what Leveson might bring forward. If they can get round this hurdle, they will go back to doing exactly the same again in the future.

[Mr Tom Watson (West Bromwich East) (Lab)]

My good friend raised an important point when he quoted Peter Burden. Does he agree that perhaps the most extreme example is the case of the late Princess Diana? We will all welcome the news that the Duchess of Cambridge has announced that she and Prince William are expecting their first child. Do we also think that the press should observe their recent conversion, and give the couple the privacy that they deserve in the early days of the pregnancy?

[Jim Dowd]

I am hardly likely to disagree, am I? [Laughter.] Good luck to them, and so say all of us. I am taken aback by the sheer irrelevance of the question. If I may, I will get back on track, and return to the subject of the conduct of the press.

The Press Complaints Commission has never been a natural arbiter or umpire in these matters. It has always been the creature of the newspapers and their proprietors, year after year, but it has not always been so staggeringly ineffective. Examples that I have heard in the recent past of the sheer ineptitude and incompetence of its leadership indicate that any future statutory body, or whatever we call it, should not include anyone who has ever been connected with it. It has betrayed the British public by pretending that it can police the excess of the press and failing dismally to do so, and by failing so dismally, it has encouraged the worst excesses of the tabloid press.

After last Thursday’s statement, my good friend—although not in political terms, as he sits on the other side of the House—the hon. Member for Maldon (Mr Whittingdale), the Chair of the Culture, Media and Sport Committee, and I attended the same event in the City. We spent the best part of 20 minutes arguing animatedly about the Leveson report and our responses to it. The hon. Gentleman and I have different views, but most of those 20 minutes were occupied by an argument that is one of the features of this place and the Members in it: we were arguing over whether he agreed with me or I agreed with him. We were both seeking to achieve the same thing.

As others have said, legislation will result from Leveson, and so it should. This is the first of many debates on the subject. We need to apply ourselves, with the best of intentions, to describing exactly what that legislation should be. As others have already declared, it should be minimalist but also robust. It should give and guarantee freedom to the independent press regulator, and also enable it to do its job.

The idea that the press can be trusted is a strange one, because all the evidence has shown that they cannot. Not only do they believe that they should be left to their own devices—that they are above control and regulation—but they openly flaunt the fact that they believe that to be the case. Last week, The Spectator—a magazine which, I am led to believe, is much read by Members on the other side of the House, although I have to say that I have read it myself on occasion—stated:

“If the press agrees a new form of self-regulation, perhaps contractually binding this time, we will happily take part. But we would not sign up to anything enforced by government. If such a group is constituted we will not attend its meetings, pay its fines nor heed its menaces.”

However—and we can all be grateful for this—

“We would still obey the (other) laws of the land.”

How very generous! How very kind! How very noble! Perhaps we should ring The Spectator once a week and ask, “Which laws do you want to abide by this week? Which laws do you want to abide by next week? Which laws do you not care for and will have nothing to do with?”

The Spectator went on to say:

“But to join any scheme which subordinates press to parliament would be a betrayal of what this paper has stood for”

in all the 15 years

“since its inception in 1828.”

I added the bit about the 15 years—it is not actually there—but, by Spectator standards, it is not much further forward than that.

What those people are basically saying is that they are above the law. This Parliament and the British people can say what they like, but if it does not meet their approval, they will not abide by it. That is the calibre of the people with whom we are dealing, and we cannot trust them to act in the public interest.

[Eric Joyce]

I suppose that what The Spectator and its editor meant was that they would not take part in that whole structure, and so they would then be regulated directly by Ofcom as per the recommendations of Leveson.

[Jim Dowd]

They cannot possibly have meant that; otherwise they would not have alluded to all the “other” laws of the land. They meant that this would be a law of the land, and that they would not obey it.

Why do we have the rule of law? What is the purpose of this place? As far as I am aware, everyone in this place is united in believing in the rule of law, but what does the rule of law do? Predominantly, it protects the weak and not the strong. If there were no law, the strong would always get their way, by force if necessary. The weak are defended by the law. It provides the only way in which they can seek any redress, and Lord Leveson’s report—certainly in terms of its advocacy of a new method of dealing with the press—is empowering to those who currently cannot obtain the justice that they deserve.

Given what the rule of law does, it is no surprise that the strong—in the shape of the press barons, media moguls or whatever we wish to call them—are demanding that there should not be a law, because they know that it will curb their power. I do not mean their power to observe and comment as they see fit; no one is talking about a commissar to sanction every single item that goes into a national or a local paper. We are talking about regulating the way in which those people conduct themselves, and, more particularly, the way in which they treat the other citizens of these islands.

As I said earlier, if there is a dispute between the rich and powerful and the weak and powerless, it is the duty of this House, and certainly of those on this side of the House, to stand up for the latter.

18:07

[Mr John Leech (Manchester, Withington) (LD)]

I am grateful for the opportunity to speak about such an important issue as the future of press regulation. However, I am disappointed that following the publication of the Leveson report, the media have sought to render the debate as an attack on free speech rather than an attempt to ensure that there is proper redress for the innocent victims who have been bullied and abused throughout this whole affair. We owe it to the victims of these scandals to debate Lord Justice Leveson’s proposals principally with them in mind.

In the run-up to the report’s publication, the Deputy Prime Minister stated that

“assuming he”—

that is, Lord Leveson—

“comes up with proposals which are proportionate and workable, we should implement them.”

I believe that these proposals are proportionate and workable. Similarly, the Prime Minister said that if the Leveson report was “not bonkers”, he would implement it. I also believe that the report is not bonkers, and that it is right for the Government to implement its core principles.

Lord Justice Leveson has suggested tough, independent regulation that will maintain a raucous and vigorous press while at the same time ensuring that the innocent victims of press intrusion have access to justice. This is independent regulation, free of the press and free of the politicians. It is a careful balancing act that can ensure the freedom of the press, and also fair recourse for those who have been wronged by the press.

During the inquiry, the Deputy Prime Minister set out in his written evidence six core principles that would have to apply to a new regulatory system. They were independence from both Government and the media; better protection for journalists acting in the public interest; powers to initiate investigations rather than just complaints; meaningful penalties, whether financial or non-financial; a third-party right of complaint; and membership of all relevant organisations, given that some major news producers have chosen to operate outside the current regime. The question for me is this: do Lord Justice Leveson's proposals encapsulate those six principles? I believe that they do.

Lord Justice Leveson proposes a system of voluntary independent self-regulation overseen by an independent board. The board’s membership would be appointed in a fair, open and transparent way, and would contain a majority of members who are demonstrably independent of the press, with no serving editors. In order to provide sufficient incentives for the press to join the regulator, however, we need to strike a balance between the incentives and disincentives. In order for the incentives to work, it is essential that there is law to underpin the independence of the regulator and also to allow the courts to take membership of the regulator into account when deciding what penalties are required in cases of wrongdoing.

I understand that some Members are wary of using legislation, but Lord Justice Leveson’s proposals do not, and will not, result in state control of the press. Legislation will simply secure the following: continued independence of the media; routine external checks by an independent commissioner, to make sure the regulator or regulators are doing their job properly; and strong incentives for newspapers to sign up to a recognised regulator, including access to a fast, cheap and effective process to resolve disputes and enable victims of press abuse to seek redress. If any newspaper refused to sign up to an approved regulator, it would face higher costs and fewer legal protections. A similar system of statutory incentives is operating in Ireland, which the majority of newspapers—including those who have shunned the Press Complaints Commission here—have signed up to.

Does such a system attack free speech? In my view, it absolutely does not. It simply provides recourse for people who have been treated unfairly by the press. As a Liberal, I firmly believe in a free press that holds the powerful to account and is not subject to political interference, but a free press does not, and must not, mean a press that is free to bully innocent people or abuse grieving families. People who feel they have been mistreated by powerful newspapers need to know there is somebody prepared to stand up for them and investigate their complaints, independent of any interference.

There is a certain irony in the press arguing for free speech. I am one of a number of Greater Manchester MPs who are asked to write opinion columns for the Trinity Mirror-owned Manchester Evening News each Monday. Last week was my slot, and, given that the Leveson report was due to be published, I thought it appropriate to comment on the inquiry and give my opinion. How ironic, then, that the Manchester Evening News refused to print my personal views on press regulation, because it did not think my opinions were appropriate—or, rather, because they were not in line with Trinity Mirror Group’s opinion. So much for the press commitment to free speech!

[Richard Drax (South Dorset) (Con)]

In which case, should that paper be punished?

[Mr Leech]

I am not for one second suggesting the newspaper should be punished. I am merely suggesting that it is rather ironic for a newspaper publisher bleating about free speech not to allow an opinion to be published in its newspaper, in what is supposed to be an opinion piece by an MP from the local area.

Is the proposed system a slippery slope to state regulation? Newspapers are suggesting that a future Government could legislate further and introduce state control. That is a red herring. A future Government could start the process from scratch and introduce state control. However, setting out the independence of the regulator in law actually makes it more difficult to introduce state control, because the independence of the regulator will already be enshrined in law.

Opponents also argue that Leveson’s model of regulation would not have stopped the hacking and the serious criminal behaviour. That is certainly true, but if proper independent regulation had been there in the first place, newspapers would never have built up a culture of invulnerability and an attitude that they could do whatever they wanted. While an independent regulator would not have directly stopped criminality, I believe it would have stopped the culture that resulted in that criminality.

Finally, I return to my first point about the debate being about the innocent victims. If we implement the Leveson recommendations, can we seriously look the victims in the eye? The answer is clearly yes, we can. I fear that without Leveson, we cannot.

[Mr Raab]

Will the hon. Gentleman give way?

[Mr Leech]

I will not.

Last week Leveson called time at the last chance saloon. The new bar for the press must be a free house—free of the press and free of the politicians. Leveson’s recommendations would achieve that, and we need to get on and implement them.

18:15

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I have a registered interest, including in respect of News International. My family are in receipt of damages from News International, and I am also a key witness in a forthcoming trial. I have been a victim, but I will not go through the details tonight, because anything I experienced was as nothing compared with what happened in the very high-profile cases involving missing children and the death of children, and it would be unthinkable to draw any comparison. In any case, I have eschewed making any remarks publicly about what happened to me in order not to rerun what happened, for the sake of the people who were involved and were closest to me.

Suffice it to say, on a slightly lighter note, that in more than 50 cases I succeeded in getting retractions, and I was able to get some limited redress. However, as Lord Leveson pointed out, that was because I could afford to go to law. In most cases, I was unable to get any redress through the Press Complaints Commission. On 20 August 2008 The Guardian published a diary piece which said my lawyers were the fastest in the west and mentioned Sky TV, Mirror Group and News International, all major media organisations with which I have had dealings over the last eight years, and which have had to apologise or cough up in one way or another. None of what happened was edifying, however, and I would not want anybody to go through what I went through.

In some respects, what happened was more to do with morality and decent professional standards than with regulation. As well as all the print newspapers, I had a right time with Channel 4 over More4. Ofcom was equally useless. I had a real problem with the BBC, too, which reported that guns and drugs had been found in my house—the story was not about me at all, of course—and that I had been partying with a high-profile woman all night who then attacked her husband, when in fact I had left her at 6.15 after having had a cup of tea.

All of us in public life face such situations, of course. What we are now trying to do—and what I hope we will be able to do—is achieve something very much better for people who do not have the same opportunity of redress that I had, or who have never stood for public office or put themselves on the line in that way.

I want tonight to address what happened pre-Leveson and where we should go post-Leveson, about which I have not spoken since Thursday afternoon. As has been said, pre-Leveson there was some hyberbole, and many things were said on all sides that upped the ante. The Leveson recommendations are different from what people expected, however, and so much so that as Shami Chakrabarti moves one way, I am moving the other. On hearing her this morning, I was slightly confused about quite where she was, and I was also confused tonight about quite where the Secretary of State was.

I think that those who have taken different sides on this matter are so close together that if we take a step back, we will find a way forward. The Secretary of State has indicated that if the media do not accept in full the Leveson principles in respect of the establishment of the independent regulator—the board—the Government will be prepared to act. I presume that means that the Government will take legal steps. If they are prepared to do that, and as the official Opposition and the minority coalition partner have already indicated that they would be prepared to act, we appear to have, across the coalition and the Opposition, a stated principled position that when media representatives meet the Secretary of State tomorrow, they will have to agree to the full Leveson principles in relation to the new independent regulator.

That brings us not so much to underpinning as to oversight, because not only do we have to establish some way of providing the panel that will appoint the independent regulator, which could perhaps be done through the Commissioner for Public Appointments—a key recommendation—but we then need to translate whatever that panel might be into an oversight recognition body that will actually be able to take the annual report from the independent regulator and assess whether that regulator is standing up to its own laid down code and standards.

I am against that oversight body being Ofcom, partly because it is a regulator. I was trying to work out in my head over the weekend how to ensure that we do not have a regulator of a regulator, because otherwise we will have regulation. Ofcom is a regulator, so let us try to find another mechanism as an oversight and recognition body that is so light touch that not even the most vehement opponent of what Leveson was supposedly going to say could now believe that Leveson’s actual requirements and recommendations take us down the road of the statutory regulation of the press. Clearly, they do not.

There are major issues around data protection which I am sure can be negotiated, with solutions found. If we can get to a point where everyone is agreed on the principles that have been laid down for the independent regulator, which is actually independent, and on a mechanism for getting the membership of that body in place, we can then ensure that we have the oversight that is necessary and that people in this House seek. There would then be a chance that we might have cracked it.

I do not have a final answer; as the child said, “Mother, if God made us, who made God?” I have been struggling with that question ever since I was a Methodist in Sunday school, but we are going to have a find a solution to it, one way or the other. I think it is possible to do so with good will, but there has not been a lot of good will. I have been as careful as I can in what I have written and spoken about, and I am now convinced that we can avoid underpinning through that oversight. However, that will take people sitting down in the next few weeks and being prepared to bury the hatchet and put behind them what was said prior to last Thursday. If we can do that, we will have achieved a great deal, and not on our behalf and not in terms of revenge. Looking back over our shoulder and seeking revenge is not like sending an e-mail; it actually rebounds on us. That is why I have not, in any way, been bitter about what has happened to me, because we have to get on with life, rather than constantly reflect on the past.

At the moment, we live in a emotional, retro society, where we are very much looking over our shoulders to the misdemeanours and catastrophes of the past. I am therefore simply making a plea tonight that we pick up Leveson, deal with those things we can agree on and move on to the future. We will thus retain an independent, vigorous, sometimes extremely aggravating and sometimes unpleasant media, but we will do so with the kind of oversight that will protect people, by their own code and their own lights, from the kind of horrors that have been demonstrated in front of the Leveson inquiry.

00:00

[George Eustice (Camborne and Redruth) (Con)]

I, too, begin by drawing attention to my entry in the Register of Members’ Financial Interests. I receive remuneration for a regular column in PR Week—but hon. Members will realise that that has not had any influence on my opinions on these matters.

A number of hon. Members have alluded to the long history of failure on this issue. I am conscious that I have only 10 minutes in which to speak, but I do wish to reflect on some of that history because the House has not always been very good at learning from the mistakes of the past. This story begins in 1949, with the first royal commission advocating the setting up of a royal commission and saying that Parliament should do something about the issue. Four years later nothing had happened, so the Labour MP C.J. Simmons, a former journalist, introduced a private Member’s Bill, which forced the industry to say that it would now act. In withdrawing his Bill, he said:

“I give warning here and now that if it fails some of us will again have to come forward with a Measure similar to this Bill.”—[Official Report, 8 May 1953; Vol. 515, c. 806.]

In 1962, a second royal commission told the press that it needed to toughen up self-regulation:

“We think that the Press should be given another opportunity itself voluntarily to establish an authoritative General Council…We recommend, however, that the government should specify a time limit after which legislation would be introduced.”

In 1977, there was a third royal commission on the press, after more failure. It said:

“We recommend that the press should be given one final chance to prove that voluntary self-regulation can be made to work.”

Let us fast-forward to 1990 and the Calcutt committee. At the time we were told:

“This is positively the last chance for the industry to establish an effective non-statutory system of regulation”.—[Official Report, 21 June 1990; Vol. 174, c. 1126.]

In 1993, the Calcutt review said that the Press Complaints Commission was not effective and recommended a tribunal backed in statute.

[Jacob Rees-Mogg]

I wonder whether my hon. Friend could describe the problems that these great reviews were looking at. We now look back at what was happening in the ‘40s, ‘50s, ‘60s and, in particular, the ‘70s, when my father was editing a national newspaper, as great examples of fine newspaper work, so what were these commissions dealing with? Is it not actually unnecessary to keep on quoting from these reports, because there was not a real problem in those days?

[George Eustice]

Each and every one of those commissions and inquiries was sparked by the abuse of unaccountable power, and I would say that that is what we are seeing today. People sometimes say, “It was a newspaper that exposed phone hacking.” They are right—one newspaper exposed phone hacking—but Lord Leveson is very clear on this: none of the other papers exposed it, and there was almost a conspiracy of silence. He says:

“There were what are now said to be rumours and jokes about the extent to which phone hacking was rife throughout the industry, but (with one sole exception) the press did nothing to investigate itself or to expose conduct which”,

if it had involved anybody else,

“would have been subject to the most intense spotlight that journalists could bring to bear”.

That one exception was Nick Davies from The Guardian, who wrote a story on 9 July 2009 saying that the huge scale of the settlements being paid to some people in respect of phone hacking suggested that a cover-up had taken place. What did the Press Complaints Commission do about it? Did it then think, “Perhaps we should take a second look at this and investigate it”? No, it did not. As Lord Leveson points out, the PCC “condemned the Guardian” for running the story, which is extraordinary. I think that the Leveson report was a good report.

[Mr Lilley]

My hon. Friend has criticised the press for the fact that insufficient of them exposed hacking, but can he confirm that the Leveson report—if implemented in full, as he supposes—would not have stopped this sort of hacking, and would not expose it and would not have powers to do so, as Lord Leveson makes absolutely clear? So what is the relevance of my hon. Friend’s argument?

[George Eustice]

I do not think Lord Leveson does make that clear. The new body that he recommends would have powers of investigation, and that would deal with the culture which led to this criminality.

The central recommendation of Lord Leveson’s report, which we must not lose sight of, is this:

“In order to give effect to the incentives that I have outlined, it is essential”—

not preferable or helpful but essential—

“that there should be legislation to underpin the independent self-regulatory system”.

I agree with Lord Leveson on that, because throughout his inquiry one question simply would not go away: how do we make a reality of independent self-regulation without some kind of underpinning in statute? In other words, “How do you create the incentives to be part of a body that can fine you and deliver stiff penalties against you?” There was no question but that Lord Hunt and Lord Black failed to answer that test. At one point, Lord Black was suggesting that we could perhaps restrict membership of the Press Association and that people who did not sign up to this new body could be denied access to Government briefings or to accreditation for events. That would be very much a closed shop system, which Lord Leveson completely rejects.

The truth is that to make this work we will need some kind of statute, because the contract system outlined by Lord Hunt would be inherently unstable. It was suggested that the contracts should last for no more than five years, but such contracts, which require what the legal profession calls a constant supervision, are very difficult to enforce in a court. After five years, newspapers would walk away from that system and we would be in the same boat as we are in now.

If the industry has failed to come up with an answer that does not require statute after 18 months of thinking about it, what does the Secretary of State think that it will come up with in the next six weeks? I am deeply sceptical that it will come up with an answer.

[Alun Cairns]

My hon. Friend and other colleagues have made much about the need for a change of culture, but does he not accept that we cannot legislate for that? Culture must be dealt with by agreement from all parties.

[George Eustice]

I agree and I am coming on to that point. We will deal with the culture by having a credible regulator, not by saying that the police should be kicking down the doors of newsrooms as a matter of routine.

Let me tackle some of the myths. The Prime Minister said that by introducing such legislation, we would be crossing a Rubicon. As many other Members have pointed out, that argument is incorrect. We already have a Defamation Bill going through this Parliament that has cross-party support and even the support of the press. If the principle of legislation is in itself inimical to liberty and freedom, where were the freedom fighters when that Bill was going through? It was passed on Second Reading without even a Division.

Section 12 of the Human Rights Act 1998 refers to freedom of speech so, as the right hon. Member for Blackburn (Mr Straw) pointed out, such a provision has already been accepted. Some say that mentioning the idea of freedom of speech in a Bill compromises it because a future statute could take it away, but we already have it in the Human Rights Act. The US has the first amendment, which is a statute that protects freedom of speech. The Government rejected the same argument when they introduced the Bill that became the European Union Act 2011, when many Government Members said that a sovereignty clause meant losing one’s sovereignty. The argument was not accepted at that time and we should not accept it now.

Some say introducing legislation would be too difficult and far too complicated. I had a look back at the original private Member’s Bill introduced by C. J. Simmons, the Labour MP and journalist, and it is just six pages long. It is very simple and merely sets up a body, which is broadly what we are suggesting now. A couple of weeks ago, we had the Second Reading of the Groceries Code Adjudicator Bill, which is just 16 pages long and performs a similar function—in fact, it is a more statutory Bill than we would need in this case. I shall be on the Public Bill Committee and I am told that it will be very short. The Defamation Bill, which is very complicated, was no more than 32 pages long. I do not accept that introducing legislation is too difficult.

Some say that such questions are for the birds in the age of the internet and things are difficult because blogs can do whatever they like. I fundamentally disagree with that argument. The changes coming from the internet mean that it is vital for this House to revisit the legislation. Just as some internet news sites, such as The Huffington Post, have already opted to be part of the PCC, if we could get the incentives right under a new body, we could get online credible news organisations wanting to be part of the kitemark system because it would give them protection. By enacting legislation, we would create the incentives that would enable internet-only news sites to take part.

As Lord Leveson points out, we should not encourage a system in which the newspapers engage in a race to the bottom with blogs that have no credibility. If newspapers are to survive, they must carve out a new role for themselves—they need a niche and some additional credibility. Just as people expect of broadcasters a different standard and character of journalism from that which they expect of newspapers, we should reach a situation in which people expect a different character and standard of journalism in newspapers from that which they might get on some blog sites. I do not accept the argument about that, either.

Some say that all we really need is for the police to do their job. It is curious that those who say that the statutory underpinning about which I am talking would lead to a chilling effect on journalism go on effectively to advocate a system that requires the police to kick down the doors of newsrooms, launch dawn raids and arrest journalists almost as a matter of routine. We should not be comfortable with the fact that dozens of journalists will face trial next year. We as a House must recognise that there was a culture in the press that enabled those crimes to take place. We should not collude in the argument that it was just a few journalists and that we should just lock up a few people from The Sun; we must recognise that there was a failure in the culture that we must tackle.

Let me finish by recommending a way forward to those on the Government Front Bench. Lord Leveson says that the ball is now in the politicians’ court. My view is that since any Bill would fundamentally be about freedom of speech, we should have a free vote. To use some of the terminology that I have read so often over the past few weeks, I think that it would be wrong for Parliament to be muzzled or gagged. We should have a free vote. I am conscious that many Members of this House have a strong ideological objection to the idea of any form of statute and they should have the right to have their say in a free vote, but Parliament should also be allowed to reach a rational and measured conclusion on the recommendations of Lord Leveson’s report.

I recommend that we accommodate the Prime Minister’s wish to give the industry six weeks to come up with a proposal. After that six weeks, we should have a free vote in Parliament to decide whether to introduce a Bill in the next Session. That motion should be binding and if Parliament as a whole believes we need some kind of new Bill, we should enact one in the next Session. I must stress that that would not necessarily mean taking forward everything in the Leveson report. I know that there are concerns about Ofcom, so let us see whether we can find a way around that. There are concerns about data protection, so we could exclude some of those elements. My hon. Friend the Member for Richmond Park (Zac Goldsmith) mentioned concerns about the scope for third party complaints, so perhaps we could limit that scope to systemic problems in newspapers rather than individual stories or concepts. There are ways around all the problems, but I am certain that we need statutory underpinning to make self-regulation work.

18:36

[Mr Ben Bradshaw (Exeter) (Lab)]

It gives me great pleasure to follow the hon. Member for Camborne and Redruth (George Eustice) and I commend him for his wise and courageous speech. I suspect that his views, like mine, have been influenced by the evidence he heard as a member of the Joint Committee on Privacy and Injunctions.

I shall confine my remarks to politics—it might sound like a novel idea, but we are politicians and there is a political context to this question—not least because the merits of Lord Leveson’s report have been well expressed by other hon. Members on both sides of the House. In that context, I was pleased to hear the Secretary of State say in response to a question from my right hon. Friend the Member for Blackburn (Mr Straw) that the Government would legislate if she and the Government felt that the press were dragging their feet and not implementing Leveson. That poses the question of whether that would include the underpinning—that is, whether she would be satisfied if the press were implementing Leveson even without the underpinning—and it might be helpful if the Minister who responds could clarify that as well as the time frame the Government are imagining. The hon. Member for Camborne and Redruth mentioned six weeks and that sounds to me like a very sensible time frame, but it would be helpful for all Members if the Government could provide some clarification about the speed with which they expect the press to move and, failing that, when they would expect to introduce legislation.

I think it is assumed that as a politician I carry with me a fair degree of cynicism, but I admit to having felt surprised and disappointed by the Prime Minister’s response last Thursday to Lord Justice Leveson’s report when the ink was hardly dry on it. I was one of many Members who applauded the Prime Minister when he established the Leveson inquiry. I felt reassured by him when he looked into the eyes of the victims and promised to implement it if it was not bonkers. Four days on from publication of the report, I have not heard any explanation from the Prime Minister or the Secretary of State of what it is about the report that they think is bonkers. That can only lead me to question why the Prime Minister set up the inquiry in the first place, only to reject its central recommendation.

[Alun Cairns]

That criticism surely also applies to the Leader of the Opposition, who after just three or four hours accepted the almost 2,000-page document in its entirety. Does the right hon. Gentleman not think that that was somewhat political?

[Mr Bradshaw]

No, what my right hon. Friend accepted was the central tenet of Lord Leveson’s recommendations, which was that it was essential that whatever happened had statutory underpinning.

There are only two possible explanations for the Prime Minister’s cursory dismissal of Lord Leveson’s recommendations, having set up that inquiry. One is that he never thought that some sort of statutory underpinning would form part of the learned judge’s recommendations. If that was the case, may I suggest that the Prime Minister was naive, ill-informed or both? It was perfectly clear to anybody following the evidence of the inquiry, particularly that of the victims and expert witnesses, and from the questions that Lord Leveson posed to the industry, that some sort of statutory underwriting, underpinning or oversight—whatever one wants to call it—of a new independent regulatory body was the very likely outcome.

The only other explanation and, I am afraid, in my view the more probable one is that the Prime Minister has been persuaded by representatives of the press—in another example of the very problem that the Leveson report also addresses—that there should be no statutory underpinning, and that the Prime Minister has taken the view that he would rather put up with a few short-lived howls of dismay from the victims and others than with the daily and unforgiving hostility of the newspapers from now until polling day. If that is the case, it is very depressing and exactly what happened after all the previous inquiries into press standards and regulation.

The press have appealed time and again for one more chance, for more time to put their own house in order. They have strung out the process. Most of the politicians and most of the public have lost interest. If this is the calculation made by the Prime Minister and Lord Leveson’s opponents in the press, I believe they are profoundly wrong. First, this time the victims are not going to go away. They are not toe-sucking Ministers, but completely ordinary members of the public—yes, and some celebrities too—whose lives have been trashed. They are numerous, organised and angry, and they enjoy widespread public support.

Secondly, whatever the press do now—we all know that for the next year or so they will behave reasonably well, exactly as they have done after previous inquiries, only to revert sooner or later to their bad old ways—the issue of press standards and regulation is not going to fade from the public eye, because from next year and probably right up until the general election, some of those allegedly responsible for the most egregious abuse will be on criminal trial. Day in and day out we will be reminded by the courts of the behaviour that caused the Prime Minister to establish the inquiry in the first place, and we will be reminded of the repeated failure of the political class to do anything about it. Do the Prime Minister and the Government really want to find themselves in a position where they stand accused by the victims and others of having failed to implement the recommendations of the very inquiry they set up to address these problems?

The Prime Minister may feel that he has had a few supportive headlines and columns in the newspapers since Thursday, but the context may be very different in a year or so. He may think he has been clever now, but he may not look so clever in a year or so. I hope the Secretary of State can persuade the Prime Minister and her sceptical colleagues in the Government to rejoin the consensus. She said that she wanted political consensus, but does she not realise that it was the Prime Minister’s response to Leveson on Thursday that broke the political consensus in the House in support of Leveson’s recommendation of statutory underpinning? I hope she will use her powers of persuasion to bring the Prime Minister back into that political consensus so that we can implement Leveson, and soon.

[Angie Bray]

Is it also possible that the Prime Minister was simply saying that it is far too complicated to rush into something and say that we need to adopt it in its entirety within about two hours of having seen it? If we are to be responsible about this, it needs to be considered very carefully. Might it be possible that rather than playing politics, the Prime Minister was trying to do something statesmanlike and responsible?

[Mr Bradshaw]

I was in the House when the Prime Minister made his statement. He was categorical in his opposition to statutory underpinning. If he had had an open mind, or if he had felt he needed a few more days or weeks to consider the recommendations, he would not have been so categorical in his rejection of the central tenet of what Lord Leveson says will be essential for the new system to work. That is why I question the Prime Minister’s motives.

As the former Prime Minister, John Major, put it in his evidence to Lord Leveson, when he was stressing the importance of all-party support for whatever Lord Leveson’s inquiry recommended,

“if one party breaks off and decides it’s going to seek future favour with powerful proprietors and press barons by opposing it”—

that is, Lord Leveson’s report—

“then it will be very difficult for it to be carried into law . . . So I think there is an especial responsibility on the leaders of the three major parties. . . on this occasion it’s the politicians who are in the last-chance saloon.”

I could not have put it better myself.

18:45

[Kris Hopkins (Keighley) (Con)]

I start by paying tribute to Lord Leveson, his staff and those who facilitated the process. The report is a magnificent piece of work, professionally undertaken. I appreciate the words in the report, in which he clearly rules out any wrongdoing by my party and the Murdoch group. He draws a line and rejects the smears on the former Culture Secretary. I raise that right at the beginning, because much of this debate is about redress. Time and again, there were smears on the party of which I am a member and on the former Culture Secretary without redress, yet some days after publication, I have not heard a hint of an apology from the Opposition.

I put on record my deepest respect for the victims of much of the media wrongdoing. They have been extremely dignified. It took great courage to go into that arena, which for many of them is not a normal place of work, and speak publicly.

I am concerned about the idea of creating laws to regulate the free press in this country. I used to be a tutor in communications. The idea of a free press holding politicians to account is a cornerstone of democracy. The idea of us politicians creating a piece of legislation and then regulating ourselves in some way is extremely dangerous and undermines democracy.

I expect the leaders of all parties to attempt to find a solution. As was pointed out earlier, it is strange that having picked up a 2,000-page document—some 1.4 million words—the Leader of the Opposition wholeheartedly accepted all that in one go, within a couple of hours. That is not a considered approach. The Prime Minister did not reject the report outright. He said that he had concerns about it and that he wanted to consider it and to facilitate a debate. The idea that one party has moved out of the debate is as ridiculous as the Leader of the Opposition accepting 1.4 million words in a report that he had acquired a couple of hours before.

It is important that we create a body that holds the press to account and gives full redress to victims of its often disgraceful behaviour. I want to give an example in which I saw first hand some of the behaviour of the media. Back in 2000 I was chair of social services in Bradford. One day I received a phone call saying that the News of the World had been watching a house and had a story in which it had identified individuals, including a grandmother, who were prostituting the children in the house. This was on a Friday and the newspaper wanted a statement from us.

We gave a statement, and then we wanted to know where the children were. The News of the World refused to give us the address on the basis that the article was an exclusive, and if it gave us the address, the exclusive would be lost and other newspapers would get the story, on which it had spent a considerable amount of money and time. I rang up the deputy editor or the acting editor at the time and said, “These are children we’re talking about, and you’re talking about money and profit. I want the address. You don’t have to give it to me—give it to a police officer or whoever, but we want this.” We had some banter about that and I said, “If you don’t, I will ring every newspaper up and tell them you’ve got an exclusive, and that effectively you are allowing the potential continuation of the rape of children just to maintain that exclusive.” Within a short period of time they rang the police and we got the details, but it was an awful situation.

The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) mentioned professional behaviour. The example I have given was one of immoral and deeply unprofessional behaviour by the individuals concerned, but we cannot legislate for immoral behaviour. What we can do is address the management and challenge it. It is that failure that I think needs to be challenged. However, I do not think that those children would have been found had it not been for the newspaper’s excellent investigative work. My concern is that we could create something that will somehow stifle really good investigative work of the type that helped those children out of that terrible situation. It is the same investigative attitude that addressed the issue of MPs’ expenses.

A few months ago, a political correspondent for national TV collared me and asked how the Leveson inquiry was going down in my constituency. I said, “To be honest, the vast majority of people out there already thought that newspapers were corrupt.” The fact that the newspapers were hacking, bribing people and following dodgy practices was nothing new to them. We might be obsessed with it, but it is not the subject of pub talk, because people already have a very low opinion of newspapers. Indeed, the only group of people they have a lower opinion of is us, so the idea that we are going to create a regulatory body to look over the people they already have a low opinion of is a little self-indulgent on our part. That will not give the public confidence. This is about addressing the unprofessional behaviour of newspapers and ensuring that an independent body is in place.

[George Eustice]

On the basis of my hon. Friend’s analysis, does he think that the House is wrong to take action to curb corrupt practices in banks, for instance?

[Kris Hopkins]

As was said earlier, much legislation has been put in place to deal with that, yet banks are still engaged in corrupt practices. Legislation is already in place to address all the issues that have been raised, whether intrusion, hacking, bribery or the police being too close to journalists. What we have to do is give prosecutors the confidence to pursue those issues, because we politicians have been somewhat concerned about not upsetting the newspapers and have not been using the legislation already in place to pursue those individuals.

[Mr Raab]

If journalists hack phones, they should go to jail. The problem in this instance is not the law, because a two-year sentence is already available, and it can be much higher if the offence amounts to perverting the course of justice. The problem is with securing witnesses, evidence and convictions. Is my hon. Friend disappointed that the Leveson report says so little about how to address the prosecutorial deficit?

[Kris Hopkins]

To be honest, I am not sure whether that was within the Leveson inquiry’s remit. The party leaders have a responsibility to come together to find some solution that will make this work, and I think that there is a meeting of minds on the vast majority of this, as other Members have said. It will take maturity by the players to find a solution that will make it work.

A few Members have referred to new media. We are addressing this issue, but I think that we are focusing too narrowly on newspapers. As everyone knows, new media, digital media, the internet and other forms of communication will outstrip newspapers. My local newspaper’s website has thousands of hits, possibly more than the number of newspapers it sells, so we are going to see a real change. There are exceptions, but there is very little regulation and few ways of managing or curbing from one country practices that are part of a global phenomenon. We will have to attempt to bring together many nations to address some of those issues. That is where the greater debate is, but we are slightly obsessed with the newspapers.

Finally, on “The Politics Show” yesterday Andrew Neil said that this issue raises the disturbing prospect of former spin doctors, who are known for their ability to sex up the odd document or two, becoming chairs of Ofcom and effectively being appointed by the Government. That is one of my concerns about the regulator and where this will go. The idea that the completely undermined tabloid press will now be orchestrated by Tory or Labour spin doctors who are appointed by Government will not give the public confidence. I want to see massive fines. I want it to be easier for individuals to seek redress and for the people who lie about them and put mistruths out there to be punished. I want an independent body.

Tomorrow is a big day for the newspapers. They should come to the table, because they have been offered the opportunity to make this work. If they fail, I am afraid that they will have damned themselves. Newspapers, both the broadsheets and the tabloids, play a massive part in British society. The tabloids have an important role. They are being given an opportunity to come to the table and they have a responsibility to take it. I do not want statutory legislation to be put in place. I think it would seriously undermine democracy in this country.

18:56

[Eric Joyce (Falkirk) (Ind)]

I have listened carefully to what hon. Members have said. I have no strongly formed views on what is being proposed that I cannot change in most respects. I listened carefully to my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and believe that there is room for considerably more compromise than we have seen in the first few days since the Leveson report was published. Indeed, my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) pretty much summed up my approach to the whole business, which is that I would really like us to avoid statutory legislation. My instinct is that the distinction between statutory underpinning and statutory legislation is pretty much angels dancing on the head of a pin, regardless of what learned Members of this House might say.

Confining myself to a narrower matter in the report, one thing that struck me was paragraph 72 of the executive summary, in which Leveson states:

“What would the legislation achieve? Three things. First, it would enshrine, for the first time, a legal duty on the Government to protect the freedom of the press.”

Yesterday’s edition of The Observer referred to that as being much like the first amendment to the US constitution. Of course, it is nothing like it. There is no real comparison. Any party of Government in future could readily change a law. It could scrap it or, more worryingly, tighten it up with a simple whipped majority if it was unhappy with how it stood. The first amendment is set within an entirely different constitutional structure, as changing it would require the support of 75% of the state legislatures and a two-thirds majority, so there is no possibility that a constitutional amendment could be overturned as readily as could a statute underpinning press freedom in this place. Indeed—let us be absolutely honest—there are Members who would say that if what we do now is not to our liking, when we are in government we can do something different.

Therefore, it is no more meaningful to compare such legislation to the first amendment than it is to compare it to anything else; it is simply inaccurate. I was surprised that The Observer, a newspaper for which I otherwise have great respect, published that yesterday, because it over-blows the proposal. I was concerned that Lord Justice Leveson hinted knowingly at the overblown idea that his proposals are like the first amendment, because that has implications for how we sell the idea of a free press to nations abroad. I have had quite a lot of contact with countries—not all of them heinous and hideous non-democracies—where the press and its relationship with government is fairly complex. Press freedom is very fragile in these places.

We have heard from learned Members of this House that statutory underpinning is very different from statutory regulation. The Leveson report said that ultimately the regulation of the regulator would be done by an organisation that is described on its own website as the office of the independent regulator. Of course this is about regulation—the clue is in the name. Whether it was arm’s-length regulation or direct regulation—which Leveson allows for in the case of organisations such as The Spectator, which has said that it would not sign up to the voluntary option—we would have, to all intents and purposes, what people in fragile democracies abroad would see as state regulation.

If this does not sound too grand, it is worth my saying what I think about the nature of freedom and how Leveson, with great respect to him, refers to it. When papers such as The Observer compare his proposals to the first amendment and say that they are about protecting and enshrining the rights of a free press, they make a fundamental mistake. In the UK, we do not have a written constitution. We do not have politicised Supreme Court judges; they are appointed by political leaders because it is acknowledged up front that some judgments will be politically based. In the UK, we can do anything we like provided that it is not illegal or unlawful. If I want to go walking or climbing in Scotland, I have complete freedom, within the constraints of some aspects of criminal law and trespass, to do that. If someone said they were going to pass a piece of legislation to enshrine my right to do it, I would be somewhat sceptical and look at what the imperatives were. In some people’s eyes, it might be perfectly legitimate to legislate to reduce the number of deaths on the hills or to protect the environment. Whatever the circumstances, such legislation would ultimately be directed at making a compromise about my freedom and my access to the hills, because that is what we do when we legislate.

If we choose to legislate where there is no existing legislation on things that we are free to do, as the press is free at the moment, we have to accept a compromise. I believe that Leveson is proposing statutory regulation, however light touch, by Ofcom—again, the clue is in the name—or perhaps another organisation of the great and the good. We hear a great deal about the great and the good being impartial and apolitical. I have big questions about their values and the fact that they do not intervene in what they have themselves decided, but that is a different matter. Fundamentally, if we want a free press and choose to enshrine that freedom in legislation, as Lord Leveson has suggested, then we have to accept a compromise, just as we do when we make any legislation that constrains our freedom to do what we want provided that it is not illegal or unlawful.

19:03

[Angie Bray (Ealing Central and Acton) (Con)]

It is incredible that we find ourselves rising in Parliament to debate the fundamental issue of press freedom centuries after politicians gave up their role in controlling the press. Obviously, I know why we are here, but none the less it is rather depressing. I appreciate that Lord Justice Leveson is at pains to say that his report does not recommend state regulation, but I sometimes wonder what’s in a name. We should remind ourselves that we are here partly because of actual lawbreaking and some outrageous behaviour by certain members of the press. Understandably, there are innocent victims who want to see changes to ensure that such breaches cannot happen again and that there is proper redress for victims in future, but are we in danger of shifting too far in our response?

Like many others as the media storm was brewing over the past few weeks, I feared that Lord Justice Leveson would recommend nothing short of full-on state regulation of one of this country’s finest traditions—our free press. On first appearance, his recommendations were less draconian than I had feared, and I recognise that they were arrived at after much agonised deliberation over exactly what role, if any, the state should play in regulating the press. Finally, in unveiling his proposals, Lord Justice Leveson placed heavy emphasis on the need for an independent regime and stressed the need to make any new body voluntary but, crucially, with sufficient incentives so that all publications would sign up—so perhaps only technically voluntary.

So far, so good. Let us delve a little deeper into the 1,987 pages, however, and the waters get murkier. For instance, I am still not at all clear about what happens to publications that choose not to sign up to the new body. What would the future hold for them under the proposed new regime? It would be pretty chilling if, despite obeying the laws of the land—and working perfectly acceptably—they were to be bullied and penalised, perhaps to the point of having to close down. It is a very important question, because as much as people talk about the desirability of a new press code and regulatory system backed by statute, I am not sure that we have thought through all the consequences. Obviously, the goal must be to get everyone signed up, but the “What if?” question still remains.

[Richard Drax]

My hon. Friend is making an excellent speech. Does she, like me, fear that if we go down this road, at some time in the future one party, for one reason or another, will introduce more legislation because it suits it at the time?

[Angie Bray]

I agree that that must be the fear, although I certainly hope that such a proposal would not come from our party.

Then there is the question of who regulates the new regulatory body and who does the appointing. This is where I really depart from the opinion of Lord Justice Leveson. In my view, it would be ridiculous to make a virtue of keeping politicians away from the controls only to put Ofcom in charge. As the Prime Minister said in his initial response to the report last Thursday, the most senior positions at Ofcom are filled by Government appointment, and it is perhaps worth reminding ourselves that the current chief executive is a well-known former Labour party apparatchik. Lord Justice Leveson is rather vague about who appoints to the appointments board. He suggests the possibility of cross-political-party appointments. Surely, again, this would be putting political influence far too close to the centre. My overriding impression is that all roads seem to lead to some kind of political involvement; that is the only logical conclusion that we have been presented with.

[John Hemming (Birmingham, Yardley) (LD)]

Does my hon. Friend share my concern that Lord Justice Leveson does not understand that primary legislation can be changed through statutory instrument and believes that it can be changed only through more primary legislation? On the basis of those concerns, I welcome the Prime Minister’s determination not to take this route.

[Angie Bray]

It would seem that that Lord Leveson has not fully understood that or has not, with the wealth of stuff that he has been dealing with, given it enough thought.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree that what Lord Leveson does seem to entertain, though, is the point that the editors code may have to be routinely changed as a result of passing legislation in this House?

[Angie Bray]

Indeed. The validating process would happen every two years, which means that there could be opportunities to tweak the code at every stage.

Let me turn to the competition that is facing our newspaper industry—the digital media. Last week, my question to the Prime Minister was about a level playing field. Should we not be giving more thought to this as increasing numbers of people get their news from all kinds of social media that are well beyond a regulated code of practice of any sort? It is like the wild west out there. This competition is doing serious damage to our newspaper industry, and readership is falling year on year. Most young people carry their news on their phones and do not feel even the slightest need to stop and buy a newspaper.

[Andrew Griffiths (Burton) (Con)]

My hon. Friend mentions the wild west of the internet and the wrongdoing by many of the national newspapers. She will be aware that in his report Lord Leveson says that regional newspapers are a force for good and blame-free in this whole process. Does she agree that we must be careful not to do anything that is too onerous for regional newspapers, because they are already struggling to survive, and it would be dangerous if we added to that problem?

[Angie Bray]

I certainly agree that local newspapers play an incredibly important part in all our communities, and we do not want to see anything that undermines them at a time when they are struggling to survive. I have to say, however, that that argument equally goes for our national newspapers, because in 10 years’ time there could be hardly any left.

It is extraordinary that Lord Justice Leveson has devoted a mere 12 pages of his enormous report to the impact of the internet on how we get our news. What planet is he living on, dare I ask? As Hugo Rifkind put it in an excellent article in The Times last Friday:

“What matters today is content,”

not who delivers it. Lord Justice Leveson’s recommendations might have worked 20 years ago, but we face an altogether different challenge in today’s world.

There must also be concern about the report’s recommendations on journalists and data protection. If we start down a road of restricting journalistic investigations, requiring them to acquire only data that will actually be used in their eventual report and to provide a detailed account of what they expect to find before they even start, many investigations simply will not happen. Equally, we should be wary of removing the protection that journalists currently offer to their sources. This needs far more consideration.

The Prime Minister is right to be cautious before rushing to judgment. Frankly, I am amazed that the leader of the Labour party was so quick to demand that this report be accepted, in his own words, “in its entirety”. The leader of the Liberal Democrats was scarcely more credible. I simply cannot believe that they would have been able to absorb the entire report by the time they spoke in the Chamber last week and master fully not only the specifics, but the likely consequences of the proposals. In my view they both demonstrated an irresponsible, knee-jerk reaction and poor political leadership.

This is a massively complicated report and it requires proper, detailed consideration. Too much haste and getting the response wrong could jeopardise the very underpinning of our democratic freedoms. Those innocent victims of illegal activities by journalists deserve to see change for the better, but we would all be victims if our essential press freedoms were undermined.

19:09

[Mrs Madeleine Moon (Bridgend) (Lab)]

There has been a great deal of debate this evening about the rule of law and how it could have held national newspapers to account. I want to talk about what happens when the culture, ethics and standards of the media are used against a community that cannot fight back, which is what happened in Bridgend.

The ethics of the press at their worst impacted on the county borough in which I live. There was intrusion into people’s lives at the most painful and difficult of times. There was a link built between the community of the county borough of Bridgend and suicide, which meant that anyone who lived there was tainted by a threat and a risk of living with suicide. Virtually the first question that young people who went for university or job interviews were asked was, “Are you all right? Are you going to commit suicide if you move away from Bridgend?” People who were considering moving their factories to the county borough said, “I don’t know—our people aren’t very happy about moving to Bridgend. It’s not a very safe place to live.”

The dead were maligned in the most awful way and families who were trying to cope with the sudden grief caused by the death of someone they loved and whom they had no idea was struggling with life suddenly found that person traduced in the most painful and awful way.

The intrusion into people’s lives was such that friends, neighbours and family could not go to talk to those who had lost someone, because there was a mass of press outside their front door. I am sorry that the hon. Member for Ealing Central and Acton (Angie Bray) finds it funny, but children who were on their way to school were being stopped and offered sweets for quotes about those who had died.

There was inaccurate reporting—a “suicide death cult” was supposed to have gripped Bridgend. I said to one of the editors who sat on the Press Complaints Commission, “You know that’s a lie. Why are you running with this story?” He replied, “That’s your fault. You didn’t come up with a better line for us and we needed a line to sell the story and the papers.” They knew it was a lie, but they still carried the story.

It was well known that the grief and the trauma caused by that reporting had the potential to have an impact on those involved in the deaths. There was a risk of social contagion and I believe that we saw that effect in Bridgend. The excessive coverage of the methods used by those who died impacted tremendously on my community.

There has been a lot of talk today about the Press Complaints Commission and how weak and ineffective it has been, but, within the bounds of its capability, it served my community well, and I will always say that. It came to Bridgend and met the people. I think it was fairly shocked at the level of anger and at the fact that nobody had even heard of the PCC and did not know that it was an option to go to it. It was shocked at how frustrated the community was that an honest and decent story about the losses they were facing was not being told. What the PCC did—I know that those people affected across Bridgend will be eternally grateful for this—was introduce desist notices, whereby people were able to say, “We do not wish to be contacted.”

A family who had lost a child were among the first people who came to my office. Their child had died some years earlier—not during the time of the so-called cluster in Bridgend—and they told me how, even then, they feared answering telephone calls late at night, because it might be one of the magazines offering them £250 for the story of the death of their child and how it had impacted on their lives. Such intrusion went on and on, but the desist notices stopped it. They would not have had that from Ofcom, because it cannot interfere until after a programme has been broadcast. My community has been devastated by letters from broadcast media that want to tell the story. They have thrown families back to 2007 and 2008 and left them deeply traumatised and fearful of those stories being aired again.

Another area of the PCC that I must commend and that we must not lose is its educational role. It has taken on a huge responsibility by going to schools of journalism and news rooms and talking about the impact of suicide reporting. Whatever regulation comes in, I would not want to lose that educational role.

With the help of the PCC, I, along with eminent professors of suicide studies, met editors to explain to them the impact of their reporting. They admitted that, often, what drove the most excessive reporting was the fact that, to sell their papers, they had to keep hyping the story and making it bigger and more dramatic. The culture, ethics and standards fall apart as a result of that desperate desire to get the extra sale and new story that will make people buy one paper and not another. We have to do something about that, so that honesty and decency return to reporting.

I am concerned about the failure to look at social networking issues. Many of the families saw photographs that they had never seen before of the people they had lost—their family members—when they went out to buy a pint of milk or a loaf of bread. There, on the front page of a national newspaper, was a photograph of their child that had been taken off Facebook. One of the most horrific stories was about the content of one person’s Facebook page. That person was maligned in the most awful way because of fantasy stuff that had been written on their Facebook page. We must do something about the ownership of the contents of Facebook pages, including photographs, so that they cannot be taken and possessed by national newspapers and reproduced.

Websites must be looked at and must be contained. The website of one national newspaper had a section that said, “Click here for slideshow of the dead”. When one clicked on it, the photographs of everyone who had died were shown on a loop. In fairness to the editor, he was horrified when I told him about it and he immediately had it taken down. He had not known about it, as there is often a split between the print editor and whoever edits the online version, and we must ensure that responsibility runs across those areas. Finally, I appreciate that Leveson did not look at YouTube, but there have been some horrific statements and stories in newspapers that have come from it.

I agree with Leveson about the conscience clause. A number of newspaper reporters contacted me privately to tell me that they were appalled at the stories that they were being pressured to write. It was a case of, “Write the story and keep your job.” They wanted an opportunity to opt out of writing those stories.

The Secretary of State, who has left the Chamber, was educated in Bridgend. I hope that when looking at this matter, she remembers the people she grew up with and what they have suffered from unregulated media.

19:22

[Damian Collins (Folkestone and Hythe) (Con)]

It is a pleasure to follow the hon. Member for Bridgend (Mrs Moon), who has told harrowing tales from her constituency.

There is agreement across the House that the Press Complaints Commission has failed and that there has to be something better. The dispute is not about whether things should carry on as they are, but about how things should change. Many Members have referred to the failure of the self-regulatory model for the press, but I question that. I do not think that we have a self-regulatory model. The PCC is not a regulator. Lord Leveson addresses that point in the summary of his findings:

“The fundamental problem is that the PCC, despite having held itself out as a regulator, and thereby raising expectations, is not actually a regulator at all. In reality it is a complaints handling body.”

That means that there is still an opportunity to look seriously at what real independent self-regulation would mean. The industry has a window of opportunity to do that and to present it to the House in a credible way.

There is no requirement that all newspapers, even national newspapers, are members of the PCC; it does not have the power to fine people for breaches of its code; and, crucially, as other Members have said, it has no powers of investigation. I believe that that is at the heart of the series of crises that have affected the newspaper industry for far too long. We saw that particularly strongly in the investigation by the Investigation Commissioner, Operation Motorman, which looked at the practices of the press in illegally accessing personal and confidential information, including through phone hacking. That information was published in 2006, with an update report in 2007. It suggested that 305 journalists, from a variety of national newspapers, had been in receipt of information that had been obtained illegally. Nothing was done about that.

[Mr Jim Cunningham (Coventry South) (Lab)]

I know that the hon. Gentleman takes a deep interest in this subject. Why does he think that no action was taken in relation to the Information Commissioner’s report? That has always puzzled me.

[Damian Collins]

That is a very good point which Lord Leveson tries to address in his report. It ends up being a game of no one being responsible. The PCC is not an investigative body, so it stood back and said, “Where’s the beef? Where’s the evidence to prove your allegations?” The Information Commissioner does not have the right to launch any further investigations or prosecutions, so no one was held responsible. That is why the new body has to have the power to seize such a report, go into the relevant organisations and investigate the matter.

There was no lack of information about criminality or information being obtained illegally; the failure was that no one acted on that information. The Information Commissioner’s report was largely ignored, as was the 2010 report by the Culture, Media and Sport Committee, which also suggested that there was widespread knowledge of illegal practices within the media.

The police knew in 2002 that the News of the World had hacked Milly Dowler’s phone. We know from information that was produced for the Culture, Media and Sport Committee in this Parliament that Surrey police discussed that with executives at the News of the World at the time. It was illegal, so why did the police not prosecute them or take action against them? Nothing was done about it. Evidence produced by the Select Committee’s inquiry demonstrates that senior executives and legal managers within News International understood that phone hacking was widespread and not related to a single reporter. Again, nothing was done about it.

The questions that were asked in that case are similar to those asked in the debate between the PCC and the Information Commissioner: “Where is the real evidence? What should we do?” There was no incentive or reason to do anything and there was no external pressure to push for a conclusion. That is why it is crucial to have an independent body with powers of investigation in the media and the power to fine.

I believe that the police got off lightly in the Leveson report. Lord Leveson skirts over the issue in the summary. One part reads a bit like the “Yes Minister” irregular verb game: “I give off-the-record briefings; you leak; he has been prosecuted under the Data Protection Act 1998.” Lord Leveson suggests helpfully that off-the-record briefings should be redefined as “non-reportable” briefings to clear up the distinction. On leaks, he suggests that police officers should perhaps have less access to the police’s computer system. That is woefully inadequate. A number of people raised the concern that if one called the police in certain situations, the News of the World turned up before the police. There was a ready trade in information between them. Lord Leveson does not go into that in anywhere near enough detail.

[Mr Watson]

The hon. Gentleman raises an important point. May I draw his attention to a very late submission to the Leveson inquiry from Detective Chief Superintendent Surtees, which appeared on the website this week? He states that in July 2009, he argued internally that there was enough intelligence to warrant reopening the investigation into phone hacking. The hon. Gentleman will know that at no point was that raised with the Culture, Media and Sport Committee during its inquiry. That might be something that he and the Committee want to look at.

[Damian Collins]

I will certainly take a close look at that. The hon. Gentleman raises an important point.

There are dangers in the statutory underpinning of regulation. I agree with what the Prime Minister said last week. I have concerns about elements of the Leveson report and would like to see how the media can bring forward plans for a robust system of investigation.

If there is a system of regulation underpinned by Ofcom, the ultimate sanction will be what it always is with Ofcom: the withdrawing of a licence. That is the ultimate sanction that Ofcom has in the broadcast industry, and it has withdrawn the licence of a broadcaster. I think that we would find it difficult to see the chairman of Ofcom, who is appointed by a Secretary of State, or its chief executive being given the power to withdraw the printing rights of a national newspaper. It may be difficult to envisage the circumstances where that might happen, but the idea makes me slightly uncomfortable.

Like the Secretary of State, my professional experience is in the advertising industry, which has what it calls self-regulation through the Advertising Standards Authority. That model is seen as very successful, but it is underpinned by statute. That has not prevented many lobbying organisations from routinely pressing for changes to the advertising code and the practices of the advertising industry. It has not prevented Parliament from deciding to ban certain types of advertising, such as adverts for smoking, because it thinks that the standards being practised by the industry are not sufficient to protect the public. There are lobbying groups that are concerned about the advertising of fast food and about the portrayal of women in advertising. I do not want to get into whether those debates are serious and should be considered, but they are matters on which Parliament may seek to intervene to change the advertising code and the industry’s practices. Lord Leveson raises some concerns about whether, as a result of legislation, there may be similar pressure from Parliament for changes to occur.

In his summary to the report Leveson states that

“consideration should also be given to Code amendments which, while fully protecting freedom of speech and the freedom of the press, would equip that body—”

the new regulator—

“with the power to intervene in cases of allegedly discriminatory reporting, and in so doing reflect the spirit of equalities legislation.”

That could mean that for future or existing legislation there could be a requirement on the regulator to reinterpret the editorial code. As a result of that underpinning by statute we could have a creep of changes to the editorial code and practices—whether it was delivered by Ofcom or a new body—which would put pressures and new obligations on the independent body that currently do not exist.

It is not clear that Lord Leveson understands how far that could go and he gives an example in his report:

“Those representing women’s and minority groups—”

it could apply to a number of groups—

“would be entitled to retort that if the Code as currently worded creates the kind of legalistic difficulties which have just been outlined, then the solution is a straightforward one: simply amend the Code. The force of this point is noted, but it should be considered in depth by any future regulator, rather than by this inquiry.”

That is not desperately helpful; it suggests that although he is creating something, he does not understand the full extent of where it might go or the full consequences of the changes that might be introduced. We should pause to reflect on that as there is some cause for concern about what direction it may ultimately take.

I believe that we should consider the advertising model and its consequences as an example of something that is independent yet underpinned by statute, and the changes that could come from that. Lord Leveson set out in his report some of the concerns about the potential impact of the legislation. The challenge remains for the newspaper industry to come up with a robust model of non-statutory regulation through which it can put its own house in order and demonstrate that it has robustness, the ability to inquire and investigate, and to fine people who fall foul of its code of practice. If it refuses to do that, of course Parliament will have the right to consider what further action should be taken. I am, however, concerned about that being underpinned by Ofcom or any regulator, and its being forced on the industry at that point.

19:32

[Chris Bryant (Rhondda) (Lab)]

I draw the attention of Members to my declaration of interests, which includes writing a column for The Independent every Saturday, and having received a settlement from the News of the World for the hacking of my phone.

It is perhaps an irony that most members of the public are quite sceptical about everything they read in a newspaper and equally sceptical about anything they hear Members of Parliament saying, so our talking about what has been written in newspapers will probably induce the height of scepticism among ordinary members of the public.

I want to follow on briefly from comments made by the hon. Member for Folkestone and Hythe (Damian Collins). He made some good points, and I entirely agree with his remarks about Lord Justice Leveson’s comments on the police, in which I think he showed himself to be painfully naive. I believe that the paying of police officers for information is routine not only in the Metropolitan police but in many other parts of the country. One has only to look at the number of stories of where the press have turned up before anybody else to see that that can only be because of some tip-off from the police which, I am almost certain, is done not for the public interest but for financial gain.

I also think that Lord Justice Leveson has no power, because of the 1689 provisions, to decide whether anybody had lied to Parliament. I still believe that Mr Yates lied to Parliament in the evidence he gave to two Select Committees, and that when Lord Justice Leveson one day comes to the second part of his inquiry, he will have to address those issues.

I thought the hon. Member for Folkestone and Hythe was confused when he seemed to be saying that the Advertising Standards Authority, which has self-regulation that is backed up by statute, was a rather good model. He then seemed to say that he had doubts. It was almost as if he was trying to persuade himself to have doubts about something and, if I am honest, that was rather the feeling I got from the Secretary of State.

[Damian Collins]

rose—

[Mark Reckless (Rochester and Strood) (Con)]

rose—

[Chris Bryant]

I will give way to the hon. Member for Folkestone and Hythe, but I will not be able to give way to the hon. Member for Rochester and Strood (Mark Reckless).

[Damian Collins]

My point is that I have concerns about how the ASA model works, because we can see how through self-regulation, underpinned by Ofcom, there is still an ability to influence and change the advertising code through external pressure, rather than through decisions made purely by the industry.

[Chris Bryant]

External pressure comes from the public; it is not that politicians are desperate to write elements of any code of conduct for the press. Anybody who wants to characterise any argument in this House as being in favour of politicians wanting to tell newspapers what they can or cannot write does a disservice to the argument. To be fair, the hon. Gentleman was not doing that, but like the Secretary of State he was trying desperately to find an argument for supporting the Prime Minister. I gently suggest to the hon. Gentleman that on this point it might be better to leave that alone.

In truth, we have been here before. We could replace all those in this Chamber with those who were here in 1947 for the royal commission, or in 1962—[Interruption.] I am sure my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) was not here in 1947, although I think she was here last time around. In 1973 there was Sir Kenneth Younger’s committee on privacy, and 1974 saw the royal commission set up under Professor Oliver McGregor, who went on to chair the organisation that was set up. There were two Calcutt reports.

Fascinatingly, in our last round of discussions on 21 June 1990, David Waddington rose from the Government Benches and said:

“It is now up to the press to take up the challenge…presented to it. I am confident that the response will be a positive one.”—[Official Report, 21 June 1990; Vol. 174, c. 1126.]

And here we are all over again. If anything, it is slightly worse, because changes in the digital economy have made it possible for the media to do things that they could not possibly have done back in 1990 although they would doubtless have loved to.

Victims of crime have once again had their lives turned into a commodity. That is the real immorality here. Abigail Witchalls was a victim of crime. In April 2005 she was attacked, rendered paralysed from the neck downwards, and month after month the press decided to invade her privacy. Sometimes, there was perhaps a contravention of the law, such as when 20 journalists were camped out in her garden and refused to leave. Perhaps it was an invasion of privacy to take aerial photographs of the building being built in her parents’ garden to accommodate her. Perhaps she could have gone to the law, but why should someone have to go to law, which is a very expensive process, simply to have degree of privacy after having been a victim of crime?

My personal interest in this issue started because of what happened at Soham. Someone with whom I was at theological college, Tim Alban Jones, was the vicar of Soham, and his experience during that time was that the press would not leave the victims of crime alone. It is not just that the families of the two girls who were murdered had their phones hacked; every person in the village had their door knocked. People were turned into a commodity, and that is the problem.

Whole communities have been traduced. I referred earlier to Hillsborough. The families of 96 people who had lies written about them in The Sun did not have the opportunity to go to the law to find redress. It is not that criminality was involved; the information had not been secured illegally and there was no opportunity to seek claims for libel because the class of people was too large to be specific. No individuals had been named. Those who argue that everything dealt with in Leveson has been criminal activity that should have been better policed are missing the point.

We must bear in mind that the part of the Leveson inquiry published so far is just the dodgy stuff, not the criminal stuff. Lord Justice Leveson has had to circumvent the criminal stuff to ensure that prosecutions can go ahead unprejudiced and unhindered, including those on phone hacking, the suborning of police officers, conspiracy, cover-up and all the rest. Some worrying developments are still going on.

[Mark Reckless]

Will the hon. Gentleman give way?

[Chris Bryant]

I will not give way, if the hon. Gentleman does not mind.

The first worrying development is the lack of News International management standards committee co-operation with the Metropolitan police since May this year, which smacks of the Plimsoll strategy. As soon as the water starts lapping a little bit higher, senior News International and News Corporation management chuck somebody else overboard—a newspaper and an editor. The companies provided material on some of their journalists as long as they could ensure that the ship floated and the proprietor’s feet did not get wet. Given what Lord Leveson has said about management at News Corporation, I suspect that charges will be brought against senior directors, possibly including James and Rupert Murdoch as parts of the body corporate.

However, there is a mystery I do not understand. I understand—from two well placed people inside News International—that in 2005, The Sun and the New York Post, which are both News Corporation newspapers, paid a substantial sum to a serving member of the US armed forces in the US for a photograph of Saddam Hussein. A much larger amount was then paid via a specially set up account in the UK to that same member of the US armed forces. It is difficult to see how those who wrote the story in the UK and US, and the editors of the American newspaper and the British newspaper, could possibly pretend that they did not know how that material was obtained and that criminality was involved in the process of securing the photo. For that matter, they could not possibly pretend not to know that the laptop on which the information and the photograph were kept was destroyed; I believe it was destroyed so as to destroy the evidence of the criminality.

I therefore urge the management standards committee to provide all e-mails that relate to this matter—and particularly to the photograph of Saddam Hussein—from Rupert Murdoch to News International staff as a matter of urgency. Otherwise, people in this country will conclude that News International still does not get it, and that it is still refusing co-operate fully with the police.

[Mr Watson]

I draw the House’s attention to my entry in the register—I have written a book on corruption at News International.

Is my hon. Friend aware of allegations that the chief executive of News International has given assurances to journalists facing arrest that, if they go to jail, they will be given their jobs back? If that is the case, does he agree that the company has learned nothing about corporate social responsibility?

[Chris Bryant]

My hon. Friend is absolutely right. Broadly, one point that Lord Justice Leveson hints at in his report is that corporate governance at News International is sadly lacking. It would only be logical for journalists who currently work at News International to believe that what my hon. Friend says will happen will happen because that is what happened before; people were given very large payouts on the understanding that they would plead guilty and have a tidy life when they came out of prison.

I want just a few things out of the inquiry. Of course, we have a press that will sometimes be raucous and wild, and do naughty things, but it should be one that informs, educates and entertains. We do not need snobbery about vulgarity, because we need many different kinds of press. However, I also want redress and reparation not just for defamation or invasion of privacy, but in respect of material that is fundamentally inaccurate. Lord Justice Leveson points to hundreds of cases in which the story was based on no fact whatever—it was quite simply untrue. Individuals should have the opportunity to seek redress.

[Glyn Davies (Montgomeryshire) (Con)]

rose—

[Chris Bryant]

I will give way to the hon. Gentleman, but I have very little time remaining and I am not sure for how much of the debate he has been in the Chamber.

[Glyn Davies]

I am grateful to the hon. Gentleman; I have been in the Chamber for only an hour, but I am getting a feel for it.

All hon. Members agree with everything the hon. Gentleman says. I just cannot see why we need a statutory background to deliver what he wants. The organisation that Leveson has recommended seems to do that.

[Chris Bryant]

One problem is that the self-regulation we have had for years was part of the problem. The PCC ended up having to pay damages to a journalist because the chairman said they were selling lies about the nature of what happened at the News of the World. The problem with the PCC was that it had no power to investigate or to enforce redress. It could never ensure that a correction was made the same size and given the same prominence as the original publication. Those are precisely the powers that everybody accepts the new body needs. I do not see how it can enjoy those powers unless they are granted to it in statute.

Many myths have been perpetrated, including that no legislation has affected the press since 1695. Loads of legislation affects the press; legislation passed in the past 15 years includes reference to the press. The Secretary of State’s argument was that, if the industry does not act, there should be law. That suggested to me that this is not a matter of principle for her. She has accepted that she may have to enact in order to act, in which case the Government should get on with it. Otherwise, people will conclude that the only point of principle for the Secretary of State is that she wants political support from newspapers come the next general election.

19:39

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a privilege to speak in this debate on this important topic.

Why does the inquiry matter so much when, as Ofcom suggests, papers and magazines account for only 11% of news and current affairs consumption, and when the news cycle is such that the fact that Her Royal Highness the Duchess of Cambridge is pregnant got out on Twitter much quicker than it could have got out in a newspaper? The point is that the news cycle of investigative journalism and in-depth analysis means that the press is at the forefront of holding politicians, Executives and the establishment to account, which is why such journalism deserves a special place in the media spectrum.

I agree with Lord Justice Leveson’s overriding principle that the freedom of the press should be maintained. I do not agree that we need to legislate for the Secretary of State to have such a duty, as the hon. Member for Falkirk (Eric Joyce) suggested. I agree with the self-regulation principle. I share the sympathies of hon. Members on both sides of the House who agree to some extent with the Prime Minister that we need to think very carefully about crossing that Rubicon, as he described it last week.

Sir Brian Leveson says in part K, chapter 5.47 that the threat to legislate must be credible. It has not been credible before. He suggests that that is the only reason why the proposals of Lord Black of Brentwood have progressed as far as they have. I would put it a different way. I would say that the threat of legislation has been made several times, which has led to the evolution of press self-regulation since it began in the late ’40s.

I referred earlier to a simple, three-clause Bill that refers to article 10 of the European convention on human rights but which leaves out the criteria of independence on the basis of not interfering in the operation of the media. However, Sir Brian Leveson says that Parliament must legislate for the criteria of independence. That Bill, which might have been simple at first, is already starting to grow.

Lord Justice Leveson also declines to give a definition of public interest, but the phrase is used extensively in the report. If Parliament is pressed down the statutory route, Parliament would have to consider that definition as part of the criteria for independence when setting up the body.

The report gets into the balance of ethics and privacy—it deals with balancing the public interest in the freedom of speech with the public interest in the rights of privacy. Sir Brian says that that is one of the key points, but that is an understatement. I am concerned that members of the public, including victims—including people affected by the Hillsborough disaster—believe that statutory underpinning is the answer to all previous problems. I do not think that statutory underpinning would necessarily solve the problems that people have experienced, as my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) said.

Sir Brian Leveson refers to extant changes in the code. One of his first recommendations for the regulatory body is that it should undertake a thorough review of the code. I tried to intervene on the right hon. and learned Member for Camberwell and Peckham (Ms Harman)—she is unfortunately no longer in the Chamber. In evidence to the Leveson inquiry, she suggested that the code is fine and does not need changing. Are we adopting the entire principles and thoughts behind the Leveson inquiry, or are we, on a more careful reading—I have not got through all the report yet and have read only certain sections—beginning to see problems that we need to discuss in more detail, such as the report’s interpretation of how the press and legislation will work? Sir Brian Leveson says that the incentive to join the regime would be the existence of the tribunal route. I understand why that would be an incentive, but one wonders whether the Defamation Bill, which is currently before Parliament, could provide a route towards securing the same ends.

What if we cannot agree? What if not all the press sign up to a new body? Sir Brian refers to needing all national publishers to agree, and that if they do not, then Ofcom should become the regulator. Potentially, we have the same situation we had when Northern and Shell walked away from the Press Complaints Commission. If Northern and Shell or any other publisher walked away, the default recommendation in the Leveson report is for Ofcom to regulate the press. That would be a huge step backwards, and part of the slippery slope which many hon. Members are concerned about venturing on to.

There is an appropriate concern about access to justice. I do not agree with Sir Brian Leveson’s recommendations for excessive costs and penalty damages for publishers who do not subscribe to the code. In fact, he is trying to implement Sir Rupert Jackson’s comments on the qualified one-way costs shifting system. That is something we need to think about and more proposals need to come forward. If somebody went to the potential new body, which was not subscribed to by a particular publisher, one could imagine a situation where the regulator said, “Actually, you are absolutely right, that would have failed our tests and we will help you take on the publisher in court.” I can see something like that happening to ensure that people have access to justice.

I have other concerns. The issue relating to the Data Protection Act is a problem for people protecting their sources or for public interest use. Sir Brian Leveson suggests that the names of people should not be disclosed, or that we should not try to identify potential criminals. Frankly, if that was the case for TV, we would shut down the “Crimewatch” programme overnight. The press work with the police to flush out criminals and potential suspects, and to help get the public involved in the search on crime, and the report puts that at risk.

There have been two references to the potential extent of third-party complaints. I am concerned about one particular part of the report, which suggests that the code be amended to have a duty to ensure compliance with Government legislation on the wording of stories. Again, that strays from where we need to be.

A member of the House of Lords would apparently be able serve on the independent board, but an MP or a member of the Government would not.

[Chris Bryant]

Is it not therefore slightly odd that everybody is now saying that the PCC is independent, despite the fact that it is chaired by Lord Hunt, who takes the Conservative Whip in the House of Lords?

[Dr Coffey]

My next point is that Sir Brian insists that there will be no involvement of political parties. My concern is that that reinforces the prejudice that to have ever been involved in politics is somehow to be not interested in public service. I know I am taking a different view from a lot of other people. I am not suggesting that a serving MP or a serving Lord should be on any regulatory body, but I am concerned that politics is again being traduced in an unsatisfactory way. Thatis just an example of some of the minor things to which my hon. Friend the Member for Folkestone and Hythe (Damian Collins) referred—about trying to change the name of briefings and what they could be called. Frankly, that section of the report did not deserve the ink that was wasted on it.

On the problems the report will solve and the problems it will create, we have recently debated, and debated several times, the terrible incident of Hillsborough. There were two other incidents in the late ’80s that forced a change so that we moved away from the Press Council to the creation of the Press Complaints Commission. Not many people will recall that on 9 May 1989, a report from the ombudsman was printed on page 2 of The Sun. Of course, that was not enough. Today, the PCC rules would enable something of equal prominence to be printed, and the ombudsman adjudication at the time indicated that the headline should not have appeared. One concern is that we may start to give false hope to people who have been maligned by the press.

[Alun Cairns]

How does my hon. Friend reconcile the want of victims for solutions with the inconsistencies of the report, which does not extend to digital media?

[Dr Coffey]

My hon. Friend makes a useful point about digital media. I think somebody suggested that we should begin to look at how we regulate the internet. That is a challenge, even if we think only of closing down access to sites.

Returning to the Hillsborough incident, I do not want people to get false hope that all of a sudden journalists will not produce stories that they do not like. The same could be true of the situation in Bridgend. The PCC did good work on that, and the Government at the time said, “Yes, there was some good stuff.” We should have learned a bit more.

[Damian Collins]

Does my hon. Friend agree that the biggest steps forward in monitoring what is reasonable in, say, social media have been taken by the courts, not by any regulatory process?

[Dr Coffey]

That is a fair point. Of course, we all accept that the status quo is not good enough, but there is a great nervousness about the effect of statutory underpinning and the slippery slope. It seems that statutory underpinning is what the overwhelming majority of MPs want, and I hope we will persuade people that it is not right. If the statute is introduced and in a few years’ time it is not working, the argument will be that we need more regulations or that they need tightening up. I wonder where it will stop. It seems to me that what the victims really want is a more robust law on privacy and for a code of ethics to be enforced. Perhaps that is the question that should be consuming us.

This has been a good debate, but there are not enough hours to interrogate the report in the depth that it requires.

[Mr Deputy Speaker (Mr Nigel Evans)]

To accommodate more Members, the time limit is being reduced to eight minutes.

19:57

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to follow some of the speeches. I agree wholeheartedly that we have some of the best media in the world. They can be funny, incisive and often illuminating—that has never been in doubt. However, the circumstances that led to the Leveson inquiry being set up involved some absolutely appalling things happening to innocent people, including people who had never sought to be in the public eye—that, also, has never been in doubt.

What Lord Justice Leveson proposes is reasonable and proportionate. It is self-regulation that means self-regulation, rather than what we have now, which is self-regulation that effectively means no regulation. It builds on practice that exists elsewhere, such as the Irish system, and, with reference to the proposal to offer incentives to encourage papers to sign up by adjusting the damages awarded should a dispute end up in litigation, it uses the same formula found in this country’s civil procedure rules that govern all civil litigation in England and Wales.

Supporting Leveson is not about being anti-journalist or anti-media; I reject that assertion entirely. Some of my favourite media sources are those that feature very different politics from mine. I like reading The Spectator and Guido Fawkes’s blog. I find them entertaining because they are witty and well written, and they do not simply mirror my own politics back at me. We want a lively press. The idea that stories on MPs’ expenses or other official wrongdoing would not have been featured because of a Leveson-style system of regulation has to be utterly false. We want a press that investigates abuses of power, but does so without abusing their own power in the process.

The Leveson report is about acknowledging that we have a serious problem with media accountability in the UK; that we have known about these problems for decades and never dealt with them; and that now we have a chance to do the right thing for the benefit of everyone. Why does self-regulation need to be guaranteed by statute? Because for more than 70 years, as we have heard, despite seven different attempts, the old system has failed. Without the necessary robustness provided by statute to the new system, it will simply fall back under the control of vested interests and give us the miserable failure we have at the moment. As Michael Portillo said last week, the moment we take away the proposal to underpin self-regulation with statute, we make sure self-regulation will never properly happen. One of the clearest things we can deduce from the evidence given to Leveson is that this was never about one or two rogue reporters; the report talks about widespread abuse of power.

The report is not about everyone; there are some commendable journalists and newspapers—it is particularly gratifying that regional and local press have been mentioned in this debate. However, as the report says, this is about

“Too many stories in too many newspapers”

that

“were the subject of complaints from too many people, with too little in the way of titles taking responsibility, or considering the consequences for the individuals involved.”

Many objectors have made the point that it is for the criminal law to deal with such matters and that access to the legal system is what really matters, but aside from the fact that we have just cut back enormously on legal aid, Leveson makes it expressly clear that, first, it was only by a quirk of good fortune that the criminal law has been able to deal with the worst cases of phone hacking, because Glen Mulcaire kept such meticulous notes that could be used in evidence; and secondly, and most crucially, that the criminal law would not have helped with the harassment, intimidation and other nefarious treatment of the victims who gave evidence, not least the Dowler family. We would have to have hearts of stone not to acknowledge what that family had to put up with. It is not good enough to fail to address this problem.

One of the more reasonable objections is that, given social media and the internet, regulating newspapers when they are in historic decline might not be the best thing to do. I thought the hon. Member for Camborne and Redruth (George Eustice) dealt with those points rather well. Just because it might be harder to ask online media to self-regulate, that is not an excuse to give newspapers the green light to carry on as they are. We should not underestimate the power and influence of newspapers. What they write carries an authority far greater than even the most popular blog or Twitter account. In addition, although the debate about Leveson has rightly focused on whether to initiate proper self-regulation, there are a number of other relevant proposals in the report. I am pleased to see the issue of media ownership come up and the acknowledgement that inappropriate concentrations of ownership could occur without the competition laws being initiated. I am less keen on the idea of requiring disclosure every time contact is made between a politician and a journalist. That seems a little over the top. Similarly, the points dealing with data protection do not seem entirely right at the minute. However, all these things can be considered further before we implement the proposals.

We have before us a sensible and measured report in response to a serious problem. No one wants state control of the media, but for too long in this country we have been closer to a situation in which there is media control of the state. Concentrations of power, when people believe they are not accountable to anyone, always end badly, whether it is trade unions in the 1970s or the bankers in 2008. It is our job as politicians to navigate away from that without going too far in the other direction. We have before us a report that shows us the way to do that. Let us show some leadership. Let us not think short term. Let us for once do the right thing. I commend the Leveson report to the House.

19:59

[Mark Reckless]

(Rochester and Strood): This issue first came to my attention on 7 September 2010, at one of the first meetings of the Select Committee on Home Affairs that I attended. Into that meeting came the hon. Member for Rhondda (Chris Bryant) and the Assistant Metropolitan Police Commissioner, John Yates, following an article in The New York Times and an Adjournment debate that the hon. Gentleman had secured. Ever since then I have focused to a degree on the role of the prosecution authorities. I was struck by a quotation in The New York Times that said:

“A vast number of unique voicemail numbers belonging to high-profile individuals (politicians, celebrities) have been identified as being accessed without authority. These may be…subject of a wider investigation”.

That was in a file note of 30 May 2006, from Carmen Dowd, who was one of the top six people at the Crown Prosecution Service and running the case, to Lord Macdonald, then head of the CPS, and Lord Goldsmith, then Attorney-General. Ever since then I have asked myself, “Why was nothing done by the CPS about this issue?”

John Yates explained at that Committee meeting that, at least in his view, the Met investigation was limited throughout by the interpretation of the law given by the CPS. The issue is that section 1(1) of the Regulation of Investigatory Powers Act 2000 says:

“It shall be an offence for a person intentionally and without lawful authority to intercept, at any place in the United Kingdom, any communication in the course of its transmission”.

That appears to be the basis on which Carmen Dowd advised the police—as she clearly did throughout—that they needed to prove that the interception of the communication happened before the intended recipient picked up that communication or message. It appears that that high hurdle limited the police investigation, and the police have made much of that throughout.

However, if we look further, we see that section 2(7) of the 2000 Act says that

“the times while a communication is being transmitted…shall be taken to include any time when the system by means of which the communication is being, or has been, transmitted is used for storing it in a manner that enables the intended recipient to collect it or otherwise to have access to it.”

That provision, on the face of the legislation, clearly extends the period of transmission to include the time when a voicemail is being stored and the recipient might be ringing in, to listen either for the first time or repeatedly. I have therefore never really understood, like anyone else who has read the law properly, the basis of this narrow interpretation—there is a 2002 case involving NTL, but it related to an e-mail system that could not even store messages after they had been collected and it hardly takes precedence over what is so clearly on the face of the legislation.

Having heard Mr Yates and being aware of the Adjournment debate of the hon. Member for Rhondda and what he said subsequently, the Home Affairs Committee wrote to the then Director of Public Prosecutions, who wrote back to us in October 2010 saying that

“the approach…taken to section 1(1) of RIPA in the prosecution of Clive Goodman and Glen Mulcaire”

was that

“to prove the criminal offence of interception the prosecution must prove that the actual message was intercepted prior to it being accessed by the intended recipient…David Perry QC had approached the case on that basis at the time.”

That is why we see, with the royal household, there was a sting operation, in order to prove that the messages were being intercepted prior to the intended recipient picking them up—by telling the intended recipient not to pick them up until the police had checked whether the suspects had intercepted it.

We then have a series of pieces of evidence—we have 170 pages in the report on the CPS, on the police and on all how these issues went. I do not believe that there will be a part two to this inquiry. Frankly, I think that is partly why Leveson has gone as far as he has—by including those 170 pages—and, subject to the criminal prosecutions, given as much information as he has been able to. I have been tabbing up the areas in the report where it seems that that narrow interpretation of the law was given and sustained by the CPS and David Perry QC.

[Chris Bryant]

But it is also clear that the police and the Crown Prosecution Service, in the charges presented against Mulcaire and Goodman, never relied on whether the messages had been intercepted before the intended recipient saw them, so I am not convinced—as Lord Justice Leveson is not convinced—of that argument.

[Mark Reckless]

As Lord Justice Leveson says, the July 2009 review by the DPP was not assisted by the failure to examine witness statements and exhibits from the prosecution. I asked the CPS for the witness statements from prosecution and it did not provide them, so I had to submit a freedom of information request, and it still has not provided them. However, I spoke earlier to my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), who was clear. He said that when he was one of the victims—in counts 16 to 20 of the indictment—a police key focus in interviewing and preparing his witness statement was on whether those messages had been listened to before he picked them up. He gave clear evidence to them, saying that he went into his voicemail and discovered that a number of those messages had already been listened to by someone else before he picked them up. That is partly why he felt he was picked: in order to give proof on the narrow basis of the legal advice that the CPS clearly—and, I believe, David Perry—was saying the police had to follow.

We also have the conference on 21 August 2006. The only proper, full note of that seems to have been taken by the police—Detective Chief Superintendent Williams, in charge of the investigation, is clear that the narrow interpretation was given. We also can say that, at most, the advice was nuanced. Carmen Dowd, who was from the CPS and who had throughout taken the narrow view, was actually in that meeting. David Perry was there, and although he was not contradicting the advice given by his instructing solicitor throughout, even on his own evidence he said it was tenable to take either the wide or the narrow view—despite the legislation being clear.

David Perry has another problem. He prepared a note on 14 July saying:

“We did enquire of the police at a conference whether there was any evidence that the editor of the News of the World was involved in the Goodman-Mulcaire offences. We were told that there was not (and we never saw any such evidence). We also enquired whether there was any evidence connecting Mulcaire to other News of the World journalists. Again, we were told that there was not (and we never saw any such evidence.”

The Director of Public Prosecutions said that David Perry had given him a personal assurance in a face-to-face meeting that that was the case, and that he clearly recalled saying those things. However, when Mr Perry gave evidence under oath to the Leveson inquiry, he said:

“I don’t think I would like to say that I necessarily expressed it in precisely those terms, but I was concerned to discover whether this went further than just the particular individuals with which we were concerned and I think I was conscious in my own mind that the question had to be whether it was journalists to the extent of the editor.”

That was much weaker than the assurance that had previously been given to the Director of Public Prosecutions.

Leveson suggests that David Perry might have said that in July 2009 because he was advising in a rush overnight, but the fact is that the DPP showed—or it was shown on the DPP’s behalf—and that his draft letter to the Culture, Media and Sport Committee was put before David Perry on 30 July, and he again confirmed that the narrow interpretation had been made. That letter was then supplied to the CMS Committee and used again to inform the DPP’s commitment to the Home Affairs Committee in October 2010. So that was then a question of misleading Parliament. On 3 November, junior counsel repeated that same basis when looking at the DPP’s letter and going to reconfirm this to the Committee once more.

Given all these issues, Clarke in charge of this said that the uncertainty of the legal advice limited the investigation, and that we have to give credit.

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

20:11

[Mr Andy Slaughter (Hammersmith) (Lab)]

I want to talk about costs in libel, privacy and other proceedings against the press. This is not an ancillary issue, either in itself or in the context of providing an effective self-regulatory system, according to Lord Justice Leveson. It will require fresh legislation to correct the current state of the law and to give effect to the whole Leveson framework. That is something that Leveson has said, and that the Government have conceded as well.

Prior to the enactment of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, it was possible for persons grievously wronged by the press to sue using conditional fee—no win, no fee—agreements. The McCanns, the Dowlers and Christopher Jefferies used them. On the back of spurious attacks on personal injury claimaints, the Government legislated in part 2 of the LASPO Act to remove the protection from such claimants in bringing libel or privacy claims. They claimed that they were following the recommendations in Lord Justice Jackson’s report on civil litigation costs, but they were not.

Under the LASPO Act, no win, no fee is available only if the claimant’s solicitor receives their costs from the claimant’s damages, up to 25% thereof, but the damages in libel cases are now quite low—perhaps £10,000 or £20,000—and it is not possible to run a libel case on £2,000 or £4,000. Even if it were, no claimant would risk bankruptcy, as it is no longer possible since after-the-event insurance premiums became non-recoverable to insure against losing a case and paying the defendant newspapers astronomical costs.

[Bob Stewart (Beckenham) (Con)]

Could not the independent regulator give good advice to people who have clearly been wronged and, with it, some assistance with getting recompense for the hurt that they have suffered? Going to court is so expensive for normal people, and it would be really good if the independent regulator could do something to put that right.

[Mr Slaughter]

That is what Lord Justice Leveson recommends, in a rather more organised way, but he says that it must be underpinned by statute.

Going back to my previous point, I want to quote Sally Dowler, who said:

“At the outset we made clear that if we had to pay the lawyers, we could not afford to bring a claim; or if we had any risk of having to pay the other side’s costs, we couldn’t take the chance. If the proposed changes had been in place at that time we would not have made a claim. Simple as that, the News of the World would have won, because we could not afford to take them on.”

Lord Justice Jackson said that the losing claimant should be given protection in costs—so-called qualified one-way costs shifting—but the Government ignored him. The result of that has been summed up by Lord Justice Leveson, on page 1507 of his report:

“In the absence of some mechanism for cost free, expeditious access to justice, in my view, the failure to adopt the proposals suggested by Jackson LJ in relation to costs shifting will put access to justice in this type of case in real jeopardy, turning the clock back to the time when, in reality, only the very wealthy could pursue claims such as these…An arbitral arm of a new regulator could provide such a mechanism”—

this relates to the point made by the hon. Member for Beckenham (Bob Stewart)—

“ which would benefit the public and equally be cost effective for the press”.

Those matters were discussed at length in proceedings on LASPO in both Houses. Victims of phone hacking, including Lord Prescott, raised the plight of all the victims and received this response from Lord McNally:

“I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill.”—[Official Report, House of Lords, 27 March 2012; Vol. 736, c. 1332.]

Yet nothing was in the Defamation Bill when it was published. On its Second Reading in this House, my right hon. Friend the Member for Tooting (Sadiq Khan) quoted Lord McNally’s promise, and added:

“Yet I do not see those issues being dealt with anywhere in the Bill. If the Government do not bring forward proposals to address this deficiency in Committee, we will have to do so.”—[Official Report, 12 June 2012; Vol. 546, c. 196.]

Indeed, that is exactly what we did. In Committee, we offered a variety of means for restoring the position of the claimants, but each of them was rejected by the Government, using what became a mantra that was repeated at all stages of the Bill, and that has been repeated today by the Secretary of State—namely, that the Government would look at the rules on costs protection for defamation and privacy proceedings when the defamation reforms came into effect. I am going to ask the Minister what exactly that means.

First, however, let me read out what Lord Justice Leveson says about costs. This is in paragraphs 68 to 72 of the executive summary:

“The need for incentives, however, coupled with the equally important imperative of providing an improved route to justice for individuals, has led me to recommend the provision of an arbitration service that is recognised and could be taken into account by the courts as an essential component of the system…Such a system (if recognised by the court) would then make it possible to provide an incentive in relation to the costs of civil litigation. The normal rule is that the loser pays the legal costs incurred by the winner but costs recovered are never all the costs incurred and litigation is expensive not only for the loser but frequently for the winner as well. If, by declining to be a part of a regulatory system, a publisher has deprived a claimant of access to a quick, fair, low cost arbitration of the type I have proposed, the Civil Procedure Rules (governing civil litigation) could permit the court to deprive that publisher of its costs of litigation in privacy, defamation and other media cases, even if it had been successful. After all, its success could have been achieved far more cheaply for everyone. These incentives form an integral part of the recommendation, as without them it is difficult, given past practice and statements that have been made as recently as this summer, to see what would lead some in the industry to be willing to become part of what would be genuinely independent regulation. It also leads to what some will describe as the most controversial part of my recommendations. In order to give effect to the incentives that I have outlined, it is essential that there should be legislation to underpin the independent self-regulatory system and facilitate its recognition in legal processes.”

He then goes on to explain, as mentioned by other Members, what the legislation would achieve and what its purpose was. The third of his three reasons is that

“it would validate its standards code and the arbitral system sufficient to justify the benefits in law that would flow to those who subscribed”.

What that means is that, as far as Lord Justice Leveson is concerned, the costs issue is at the heart of his principles and legislation is needed for it to take effect.

I was unable to intervene on the Secretary of State, so I would like the Minister to address in his winding-up speech the question of what type of legislation—primary or secondary—the Government envisage introducing to deal with the costs issue, which they have been promising for about two years, ever since the misguided legal aid, sentencing and punishment of offenders proposals first came about. If the legislative principle is ceded in the process—as my hon. Friend the Member for Rhondda (Chris Bryant) said—there will of course be some legislation relating to regulation of the press and here is a clear example, or a central example, according to Lord Justice Leveson, providing the entry to the entire regulatory system—it is the incentive given by the arbitral system and by the cost penalties that will lead to the whole self-regulatory body operating.

If that is ceded, what problem do the Government have in ceding the concept of legislation on the other two points that Lord Justice Leveson made? The first of those is

“to protect the freedom of the press”

and the second is to

“provide an independent process to recognise the new self-regulatory body and reassure the public that the basic requirements of independence and effectiveness were met”.

At the end of the day, that is all that Opposition Members—and, indeed, from what I have heard today, many Government Members, too—are asking for. The Government are setting up straw men in order to knock the proposals down. They are colluding with the proprietors of newspapers who are talking in the most arrant and nonsensical terms about what the implications of this will be. I believe that dealing with the costs route will justify the proposals that Lord Justice Leveson has made.

20:21

[Mr Robert Buckland (South Swindon) (Con)]

It is a pleasure to follow the hon. Member for Hammersmith (Mr Slaughter), whose remarks about the carrot and the stick in relation to costs were well made. There is no doubt in my mind that in order to incentivise the major titles and the print media to join a new regulator, there have to be proper incentives—with members enjoying an advantage over non-members in terms of civil actions and not having to pay aggravated damages.

Along with some other Members, I sat on the Joint Committee on privacy and super-injunctions, which issued its report some months ago. In common with my hon. Friend the Member for Camborne and Redruth (George Eustice) and the right hon. Member for Exeter (Mr Bradshaw), I often found myself in a minority on that Committee. There were many divisions and, as we have heard, the final recommendations were the subject of much debate. I found myself in a minority, for example, because of my strong advocacy of a statute of privacy, which I still believe this country needs and which it is incumbent on this Parliament to introduce.

At that stage, I was still thinking carefully about the merits of some form of statutory intervention or underpinning for the print media. I am persuaded now, however, that some form of underpinning is necessary. I do not come to this issue as someone who is an instinctive regulator. I do not support knee-jerk reactions when it comes to the passage of legislation in this House, but I do view the situation now as so serious that only some form of underpinning will do.

I am often accused of being optimistic in my politics to the point of being quixotic, but when it comes to the ability of the major titles of the print media to agree, first, to the principles of Leveson and, secondly, to a mechanism that will deliver them, I am afraid that my optimism leaves me.

Much has been said about the context in which the Leveson inquiry commenced. Some would say that it was based on a very narrow set of circumstances, but that is belied by the wide terms of reference set out at the beginning of the inquiry. We can see from the title that it is “An inquiry into the culture, practices and ethics of the press”, but it is important to remind ourselves in this debate of what the aim of the inquiry was. Part 1 of the terms of reference state that it was to make recommendations

“for a new and more effective policy and regulation regime which supports the integrity and freedom of the press, the plurality of the media and its independence, including from Government, while encouraging the highest ethical and professional standards”.

That part of the terms of reference is extremely important, because the scene was set for a wide-ranging examination of not just telephone hacking or bribery but the entire regulatory regime that has applied so far.

It is agreed in all parts of the House that so-called self-regulation has failed. Indeed, I would go further and say that I agree with Lord Justice Leveson that the Press Complaints Commission was not a regulator as we know it. It was not independent; it did not have powers to summon parties to produce documents or provide sworn evidence; it could not deal with complaints from third parties, or indeed with issues that were not subjects of complaints. Its remit was narrow, and its status was compromised. If we are to embark on a new course, it will be regulation in the proper sense of the word for the very first time.

Those who argue against any form of statutory intervention say that they do not want the work of our free press to be inhibited by statute. Of course I agree with that, but on closer examination, it would be wholly wrong to say that the work of our journalists is in some way uninhibited now. It is already hedged by statute, whether it be rules about reporting when it comes to contempt of court or, for example, provisions of the Police and Criminal Evidence Act 1984 relating to journalistic material that restricts police powers of search. We have existing defamation statutes that allow the defence of responsible journalism that is in the public interest. The Human Rights Act 1998 itself enjoins the courts to have specific regard to the relevant code of conduct when dealing with privacy cases.

[Jacob Rees-Mogg]

Is not the difference that the press has specific protections in law rather than laws that apply, with a specific penal effect, to the press alone? That is a very important difference.

[Mr Buckland]

I take my hon. Friend’s point about the boundaries that are being set. My point, however, is that there is a parallel between existing statute and what I believe is being proposed. I do not view statutory underpinning as somehow creating an entirely new set of constraints within which journalists will have to work. This is not, in my opinion, analogous to the difference between prescribed rights and general liberties that may be defined by their boundaries. My hon. Friend and I often agree about the distinction between different types of law and the tension that exists between them, but I do not believe that we will end up in that situation.

[George Eustice]

Does my hon. Friend agree that it is wrong for the press to support statutory regulation when it protects their commercial interests and oppose it when it protects the interests of civil society?

[Mr Buckland]

I think that the Homer Simpson approach that we often observe—the contradictory approach that is taken to so many issues—is worrying, and demonstrates an inconsistency. I simply ask those who say that existing laws provide adequate protection for members of the public why we allowed ourselves to get into a position in which, in effect, a culture of impunity existed in certain parts of our print media. I think that Lord Justice Leveson deals very comprehensively with the reality of the law as it stands.

As I have said, the press operate within a framework, but when play is made of the criminal law, the context within which that law operates is far too often ignored by those who cite it. First, when it comes to criminal complaints there needs to be a victim and some form of complaint, which will come about either when the complainant goes to the police or when the police themselves have some intelligence or information about an alleged crime.

The problem in the context of, for example, telephone hacking or bribery is that very often the victims do not realise that they are victims for many years. That was certainly true in the case of some of the victims of telephone hacking, who became aware of the emergence of private and sensitive information into the public domain via the newspapers, and then began to suspect even their families and friends of having breached a confidence before realising, or being told about, the grim reality. The same can be said of bribery: those who have lost out as a result of it will not necessarily know of the wrongdoing at the time, and may not know of it for many years.

There are issues relating to the way in which evidence can be gathered. We know, and rightly stress, the importance of exemptions when it comes to journalistic material. Also, the police will naturally prioritise the individual offences, such as violence and dishonesty, while the issues raised in this inquiry have in recent times dropped low down the list of priorities. As Lord Leveson says, the mere fact that we now have lengthy investigations into telephone hacking and bribery does not necessarily mean that the police have always been able to conduct such inquiries. In fact, the co-operation of News International has made all the difference in that respect.

Much has been said about defamation. Like the Versace hotel, the law of defamation is open to all, but it is too expensive, and we as parliamentarians must support the ordinary person to get cheap and effective redress of any grievance through a robust independent regulatory system, which must be underpinned by statute.

20:30

[Ian Paisley (North Antrim) (DUP)]

The mantra “press freedom” has become quite meaningless, as everyone is for press freedom, just as everyone is for mum and apple pie. All Members on all sides of the Leveson argument say they are for press freedom. Indeed, all of us can rightfully say that, because we are, indeed, all for press freedom. It has become a bit like patriotism, however, in that it is the last refuge of the scoundrel. We have to break the argument down and recognise that the wallpaper of press freedom must be examined.

The Secretary of State rightly said in opening the debate that the status quo is no longer an option. She was echoing the words of the Prime Minister, who said in July:

“I accept we can’t say it is the last chance saloon all over again. We’ve done that.”

We must try to give some life to this process. The press have had their last chance. They have had their drinks at the bar. It is now time to get them to face up to their responsibilities in ensuring we have a truly fair press. We must do that for all our sakes, but, most importantly, for their sake.

The Press Complaints Commission is a dismal failure, which is largely why we are debating this subject tonight. The tragic stories we have all heard—the Milly Dowler story and all the abuse stories—are just the tip of the iceberg, as there were years and years of build-up to Leveson. That was largely because the PCC failed to keep its house in order.

We in this House are really just fighting over the embers. Newspapers are becoming ever less important to this nation. My children will never buy a newspaper. They will get their news on handheld devices, and it will be tailored for them—they might want news about arts or music, and they will determine whether they receive political news. The press have in some sense already had their last chance, as they have lost their future audience because newspapers have, to a large degree, become discredited. Parliament and the nation at large should recognise that we have a duty to help to fix that.

Many Members have wrongly asserted that regulation is about we politicians having a say in the content of news journalism. There is a huge difference between regulation of content and regulation of process and behaviour, however. If we regulate the behaviour of journalists and the process they go through to get their stories, that will lead to better content, which will no longer be of the scurrilous nature of the worst examples we have actually had. Lord Leveson said:

“let me say this very clearly. Not a single witness proposed that either Government or politicians…should be involved in the regulation of the press. Neither would I make any such proposal.”

We should recognise that the regulation issue is not about our having a say on content; I do not mind what the press write about and what they decide they are going to write, but it is up to them to ensure that the content of what they write and how they get that content is proper and informed, and is not about trampling over people’s rights. We have had example after example of how the press have ignored that. We therefore need some sort of system in place that allows for proper regulation of behaviour, not regulation of content. That is a vital and important distinction, and I welcome the fact that talks are taking place between the two Front-Bench teams. I hope that they lead to agreement, because this should not be a party political issue. This should be something that this House can agree on entirely.

There are many areas in the Leveson inquiry with which I am disappointed. I believe that Leveson could have done much more on the daily papers outside London. The Northern Ireland newspaper editors were wheeled in, given a couple of hours in front of him and then wheeled out again. Many of us had written to Leveson prior to that, inquiring about suggestions and allegations about hacking in newsrooms in Belfast, but none of that was investigated. I am disappointed about that, because it should have been part of his investigation. I still await a response from Lord Leveson on the matters about which I wrote to him.

However, we have to take seriously the words of the former editor of the Belfast Telegraph. I am not the paper’s greatest fan and I am not its favourite character, but I believe that Ed Curran hit the nail on the head today when he wrote in a feature column:

“The newspaper industry has really no alternative but to…agreeing a totally independent regulatory body in which editors will have minimal or no say at all. Their role will be downgraded to offering advice, if asked for, in the adjudication of complaints but the days of having a direct say in decision-making”—

and in the punishment—

are gone.”

It is too late: the press can no longer be left alone to mark their own homework or to set their own punishment.

20:37

[Jacob Rees-Mogg (North East Somerset) (Con)]

There has been a lot of praise of Lord Justice Leveson today, and I am afraid that I am going slightly to divert from that, because to some extent prolixity has been mistaken for virtue. Verbosity is possibly part of the problem of his report, which not only goes on for much too long, but fundamentally has missed the bus. I say that because it was not set up to deal with the internet. Indeed, Lord Leveson says on page 169 that

“most blogs are read by very few people. Indeed, most blogs are rarely read as news or factual, but as opinion and must be considered as such.”

However, we discover from Saturday’s Financial Times, a very good source of information and not one that has been involved with any of these problems, that 82% of the UK population receive news online, compared with 54% who receive it from newspapers. So the report is about regulating yesterday rather than dealing with tomorrow; it should make King Canute feel proud, because at least he was going to deal with the tide that was coming in, rather than a tide that had receded some years before.

I am delighted to say that Lord Justice Leveson has used online content himself; it was reported in The Sunday Times that he was caught by a spoof on Wikipedia and said that The Independent was founded by one Brett Straub, who apparently is a Californian student and had no association with the founding of The Independent. So, on the one hand, not much notice is taken of the internet, but, on the other, it has actually been used in putting together this report of almost 2,000 pages.

I listened with great interest to my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who said that we should always be very cautious when people say that the status quo is not an option as self-evidently the status quo is always an option. As a Conservative, I would often like the status quo ante, but I shall not dwell on that point. A good deal of the report accepts the status quo. On page 1496, Lord Justice Leveson states that

“I do not recommend that any change is necessary to the substantive criminal law.”

On page 1508, on the civil law, he says that he does not want to go over the ground of the Defamation Bill, because that has already been dealt with, and on privacy he says:

“It does not appear that legislative intervention will do other than generate…litigation”.

On defining the public interest in law, he states that:

“I do not recommend a statutory definition.”

In the criminal law and the civil law, we will maintain that terrible thing, that awful spectre, the status quo. That is rather encouraging because it means that the law of the land is working and has been doing its job.

[Mr Buckland]

rose—

[Jacob Rees-Mogg]

Of course I will give way to my hon. and learned Friend.

[Mr Buckland]

I am very grateful to my hon. Friend for the elevation he has given me. Does not his point have to be succeeded by a second point? Lord Justice Leveson says that regulation is necessary to cover areas of complaint that do not neatly fit into heads of damage or criminality, such as accuracy, at which the press are not always terribly good.

[Jacob Rees-Mogg]

I am very concerned by my hon. Friend’s suggestion. If we are to legislate for accuracy, I hate to think what that might do to this House or to politicians and the speeches they make in election campaigns.

More important than the fact that the report suggests no changes to the criminal and civil law is the underlying risk to freedom of expression it contains. Let me start with page 1512 and the subject of the possibility of aggravated, exemplary and restitutionary damages. They have been used in some other countries in the world as a means of crushing opposition. When people say things that the Government of the day do not like, the Government bring complaints or actions for damages, sometimes against individual politicians, and bankrupt them. They are then no longer able to criticise the Government. Although it sounds very fair when we are talking about the hard, sad or disgraceful cases we have heard about in this debate, none the less we should allow newspapers to refuse to fit neatly into some regulatory system thought up by a Government-appointed bureaucrat or risk those fundamental freedoms we have been fortunate enough to have for many centuries.

That brings me to the appointment of the first appointment panel. Who is to appoint the panel? We hear that it will be made up of distinguished public servants with experience of senior appointments. We are actually going back to a 1950s view of the establishment. Perhaps I should welcome that, because I might have fitted very nicely into a 1950s vision of the establishment, but I am surprised that this House by and large wishes to see that return. The report suggests that appointment should take place in

“an independent, fair and open way”—

like the appointment of the new Governor of the Bank of England, I am tempted to say, although I thought it was an excellent appointment. It was advertised for the first time, lots of good and qualified people applied and then the Chancellor appointed who he wanted to in the first place. It was a very good appointment, but this reference to a “fair and open way” should make us deeply suspicious.

The key matter—the nub of all this, which brings it all back under state control—is the role of the recognition body. Under Lord Justice Leveson’s proposals, the recognition body is, unfortunately, under the control of a Government appointee. It is a Government quango where the chairman is appointed by a Secretary of State. That is difficult because that recognition body will have the right of first recognition in saying whether a particular set of regulators will be suitable—there could be more than one—and on the second anniversary and every subsequent third anniversary, it will be able to say whether the statutory tests have been met.

Now what if one of those regulatory bodies did not meet the requirements for equality and diversity that Lord Justice Leveson is so keen on? What if it dared to appoint someone from UKIP who might live in Rotherham, for example, to one of its panels to be an investigator? Do we then find that the checking body, Ofcom, would disapprove that body and, by effect if not by immediate law, would be able to choose the detail of the way in which the press was regulated?

There is another concern—that people will seek advice. By their very nature they will go to the recognition body and say, “This is what we propose. Is it all right if we do this? Will you allow us to continue when we come to our next review?” So there is an insidious power in that recognition body which will undermine the freedom of the press and will assert political correctness throughout the land.

[Mr Buckland]

Will my hon. Friend give way?

[Jacob Rees-Mogg]

It is a privilege to give way.

[Mr Buckland]

It is an attractive and seductive argument that my hon. Friend sets out, but in many other walks of life—for example, my profession, the medical profession and the judiciary—there are over-arching bodies of statute that do the job of verification that he is so concerned about. They are independent. Why should not the proposed press regulatory body work?

[Jacob Rees-Mogg]

I am not particularly concerned that my doctor is an agent of the state who is going to take out my tonsils because he thinks that that may progress political correctness in some way. A doctor is completely and utterly different from a journalist writing freely, criticising boldly something that has become the perceived wisdom of the nation at large. That is a liberty that should be precious to us. It is an absolute one that we have in the House.

Is it not interesting that we give ourselves that absolute liberty—that absolute liberty under the Bill of Rights that nothing said in this House can be challenged in any court or tribunal? The press are an aid and a boost to that of our fellow subjects to do the same—to question the wisdom of the great and the good, of those fine panjandrums who are going to form the appointments panel.

Finally, I question the naiveté of Lord Justice Leveson, who says that there is no foundation in the suggestion that it is easier to amend an existing Act than to bring in a new one. Anybody who knows how this place works or who looks at the history of legislation coming through will be aware of this point. Let us take, for example, the Great Reform Bills. In 1832 there were riots to get reform through; in 1867 it was a much simpler process. Every time an Act is put on to the statute book it is simpler to develop it further and move it forward. That ignores the ability to use statutory instruments, which are a part of most legislation, if not all of recent years, and statutory instruments can be put through on a negative resolution of the House and hardly further debated at all.

By creating statutory control we will find that the recognition body has extremely large powers to intervene and enforce its will by stealth, and that legislation will be amendable in future, to the great risk of our liberties.

20:48

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

This has been broadly a good debate. It has been reasonable and thoughtful, and is perhaps even beginning to eke out something of a consensus. Unlike the hon. Member for North East Somerset (Jacob Rees-Mogg), I think that owes a great deal to the patently balanced, thorough, well documented, comprehensive and eminently sensible report produced by Lord Justice Leveson.

There are four basic responses to the report. Two can be dismissed out of hand. One is that we keep the status quo. Nobody—of course I exclude the hon. Member for North East Somerset and the right hon. Member for Hitchin and Harpenden (Mr Lilley)—who supports that view will be taken seriously because, after the experience of the past several years, it is an indefensible position. The other is that we should introduce statutory regulation of the press, which no one who is taken seriously is advocating, and certainly not Leveson, even though what we have at the moment can scarcely be defended on grounds of freedom of the press. We know that it has involved untrammelled license to victimise the vulnerable and powerless, the phone hacking of 900 people identified by the police so far, corruption and bribery of public officials, wholly unjustified lampooning of the fans at Hillsborough, conspiracy to pervert the course of justice at News International and wrongful character assassination of an arrested person in a murder inquiry—and those are just a few examples.

That leaves two other responses, which I think are the real issue and have formed the centrepiece of this debate. One is self-regulation via a beefed-up version of the Hunt-Black proposals, which is Leveson-compliant but without any statutory underpinning. The other is a Leveson-type framework that includes statutory underpinning. I think—there seems to be fairly widespread agreement on this—that there need to be arguments about the identity of the fall-back regulator and, in particular, the need to protect fully investigative journalism in the public interest.

There are clearly several problems with the former option, put forward by Lords Hunt and Black. First, are editors really as united and committed to reform as their public statements suggest and, therefore, would the proposed framework be stable and durable? Secondly, there is Leveson’s own objection that this option does not pass the independence test. The governance of the press should certainly be free of machinations by the state. We all agree absolutely on that, but the press should equally be free of machinations by self-interested and over-mighty press barons. In that context, I think that there must be doubt about whether an industry funding body that funds the whole scheme, is responsible for regulations and sanctions and appoints editors and five publisher members to the complaints arm can remotely be considered independent. I think that it is highly significant that Lords Hunt and Black, when taking views from the national and regional press, made no effort to find the views of pressure groups or victims. I think that they need to be reminded that this is not about finding a new level of equilibrium within the power structure of the press industry. Rather, it is about establishing a change in the balance of power and rights between the press and their victims.

Thirdly, there are real doubts about the practicality of the Hunt-Black proposals. What happens if an editor or proprietor refuses to join up? What happens if at some future point they decide to walk away, as Richard Desmond did from the PCC? What happens if they strongly dispute a judgment of the self-regulatory body? Do we really believe that the latter would pursue them through the courts with the necessary toughness and perseverance? Do we really believe that a self-regulatory body overseen by industry funding would be as proactive in pursuing abuses, upholding standards and imposing sanctions as the public now demand?

Fourthly, the real argument against the Hunt-Black proposals is that there is surely now overwhelming and unimpeachable evidence that self-regulation of the press does not work. It has been said repeatedly today that over the past 70 years there have been seven inquiries, including three royal commissions, into the feral behaviour of the press, and every time we have been told that lessons have been learned, tighter self-regulation will ensue and abuses will be stopped, yet nothing changes and it gets worse. Many hon. Members have drawn attention to David Mellor’s remark in 1991 that the press were drinking in the last chance saloon, yet as we have seen from the appalling misfeasance of the past decade, each time their reaction has been to call for another round.

As a result, some degree of statutory underpinning of press governance must now be inevitable. Of course, there can be questions about the details. The Government object to Ofcom as a fall-back regulator. There may be a need for a new sui generis body—perhaps called the press trust, if that is not a contradiction in terms—with appointment in accordance with the Nolan principles and subject to confirmation hearings by a Select Committee of this House. There is a case for modifying other elements of the Leveson framework. More protection is needed for the media when they are performing their proper function of holding the powerful to account. There needs to be a rebalancing of the burden of proof in the libel laws, which currently over-protect the very rich in their access to the courts.

There are also unresolved issues over media plurality. It cannot be a fair and balanced press when one proprietor, Murdoch, still controls 34% of the market. No one proprietor should own more than one daily and one Sunday. Nor do we have a fair, balanced press reflecting the diversity of opinion in the country when ownership is determined almost entirely by wealth. I conclude that Britain will be a better place if the central thrust of Leveson is accepted, including statutory underpinning.

20:56

[Richard Drax (South Dorset) (Con)]

It is privilege to speak in this debate and to follow the right hon. Member for Oldham West and Royton (Mr Meacher).

I will go back to basics, if I may. I believe, as I think everyone in this House believes, that freedom of the press is a vital cornerstone of our freedom in this country. There is no doubt about that. I do not need to remind Members that millions of people have died to protect our freedom and our democracy, and as I say, a cornerstone of that democracy is a free press. If we start to legislate on ethical issues, we are potentially heading down the road to repression.

As a journalist for 17 years, I have unfortunately seen one or two instances of unethical behaviour, such as someone being asked to ring the friend of a celebrity claiming to be somebody else and then putting a story in the newspaper that was completely untrue or grossly exaggerated. This was not—I repeat not—the honourable way for any newspaper to behave, but it was, as has been pointed out, a cultural thing. I do not believe that regulation is needed to tackle cultural problems. That is a very heavy mace to wield at such problems.

Having said that, for the majority of my journalistic time it was a privilege to work with men and women of high integrity who worked with the facts and went to great lengths to ensure accuracy and balance—none more so than those at BBC South Today, based in Southampton, which is still led by the most able and honourable Lee Desty.

Sadly, due to some serious breaches in the trust that we impart to our journalists across the country, we now face calls on both sides of the House for legislation. Leveson suggests a regulator free of the press and Government that will watch and arbitrate, delivering swift and fair redress. I have no problem with that, with one glaring exception—the call to underpin it, which sounds like building terminology, with legislation. That is a big red line that I cannot and will not cross. Either we have a free press or we do not. We simply cannot compromise on a matter as important as this. The so-called statutory underpinning would inevitably challenge the crucial independence that I believe in, and, as my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) so ably identified, it would be insidious over a period of time.

[Mr Straw]

If everything that the hon. Gentleman says is correct, why then has he not heard the same complaint by British newspaper owners about the system of statutory underpinning that operates for their newspapers in the Republic of Ireland?

[Richard Drax]

We have a very long and proud history in the United Kingdom and we should not follow other people, because their ways of doing things are not always the best. Our system has worked and served us over hundreds of years.

Legislation would be needed and it would be passed in this place by us, but I am sorry to say that I do not trust us on this issue. That would be nail 1 in a coffin marked “Free Press.” Nail 2 would be the appointment of Ofcom to oversee an independent regulator. Ofcom’s members are appointed by Government. Nail 3 would be the unintended consequences of legislation. In the short time I have been in this House, I have seen such unintended consequences. It would be a lawyers’ charter. They would challenge every move and every word of the free press in this country. It would lead to chaos.

Is this a path that we really want to take? I do not think it is. I must say that I am astonished at the number of Government and Opposition Members who seem to want to muzzle—I would use that expression—our media and genuinely hope that there is no element of revenge in their motive. Do not get me wrong: I feel for the victims, like we all do, but anger is not a valid excuse for legislation.

Oscar Wilde was right when he said:

“In the old days men had the rack. Now they have the press.”

That rack, however, must hold us all to account. No one is above the law, but let us not forget that some in this House and the other place thought they were. The expenses scandal, cash for questions, cash for peerages, the sexed-up dossier—the list goes on and on.

The pain caused to innocent victims by what Lord Leveson calls a

“recklessness in prioritising sensational stories”

is completely indefensible, but we must not forget, as we have heard so many times today, that there are already laws in place to deal with these non-ethical issues. Phone hacking is a criminal offence, and so too is libel. My hon. Friend the Member for North East Somerset has highlighted other areas in which laws currently exist. Even now, cases are progressing through the courts because redress is in place, and let us not forget, either, that a national newspaper has closed.

In my view, politicians have no right or licence to interfere with the press. That would make us judge and jury. What worries me most is that what some might deem as light-touch regulation could become something far more insidious in the hands of politicians in the future.

Winston Churchill described the press as

“the unsleeping guardian of every other right that free men prize”.

I like that. Do we want to lose our legitimacy as a democracy? The US has reacted in horror at what is being proposed. The freedom of its press is enshrined in the constitution as the first amendment, which must give pause for thought, and our most able Foreign Secretary has said that a controlled press here would undermine our attempts to preach free speech to oppressive regimes wherever they may be.

[Mr Straw]

Will the hon. Gentleman give way?

[Richard Drax]

I want to finish—I almost have—and have already allowed the right hon. Gentleman to interject.

Non-statutory self-regulation is the only answer and I urge all those in the newspaper industry to step up to the plate for our democracy’s sake and for what should be, and is in most cases, an honourable profession.

21:03

[Mark Durkan (Foyle) (SDLP)]

Listening to many hon. Members talk about the number of issues involved, I am reminded of Fagin’s song, “Reviewing the Situation”: as he entertains each scenario, he ends up thinking it out again. I note that the hon. Member for South Dorset (Richard Drax), in sidestepping the obvious example of statutory underpinning in Ireland, said that we should not follow other countries, but then went on to cite the United States of America and the first amendment to the constitution.

I want to make it clear that I support Leveson’s key essential recommendation for the need for statutory underpinning. I do so, however, with reluctance rather than relish, because, as many hon. Members have said, Parliament should be very slow to move into the area of regulating the press and creating another scenario.

[Richard Drax]

If the hon. Gentleman is reluctant, why does he want to do it?

[Mark Durkan]

I will now explain that. I wanted to say straight up where I come from on this matter.

We all know why the Leveson inquiry was set up. There was support for it from all parts of the House. People wanted something to be done by the Government and by Parliament. There was public outcry about the scale of the violations and abuse that were becoming more and more apparent. The political process had been in denial about that for too long. It had bought the corporate and editorial denials from the various media firms, which said either that there was no wrongdoing or that it was done only by rogue reporters. A very different story emerged.

It is clear to many in the public that the rampant criminality and abuse that were taking place and the culture of impunity might be related to the concentration of ownership and to the fact that key media owners ended up with ranking political influence, with leaders of the main parties currying their favour in various ways. When other parts of the media saw the titles in the stables of those media owners getting away with that behaviour, bad journalistic practices became the going rate and it was all too easy for others to give in to the temptation to follow.

Those in politics moved to draw a line with Leveson. It now seems as though the Prime Minister, having established Leveson, wants to sidestep a key recommendation. I am not among those who say that everything that Leveson recommends is right and that we should do it all. I do not say that we should have the whole of Leveson and nothing but Leveson. However, on the essential issue of how we should address the clear failure to date of self-regulation by the press, I think that we have to take heed of Leveson’s key recommendation and, as a Parliament, take care in how we legislate to that effect. There are many dangers, difficulties and questions. I do not pretend that it would be simple to legislate competently and safely in this area, but it is our binding responsibility to do so. We cannot just duck these issues and say, “We are on the side of the free press, so we will not bring in any mild, measured legislation that would help to underpin the independent regulation of the press.”

The Press Council of Ireland now has a statutory basis for its code of conduct and its conciliation and disciplinary procedures in the Defamation Act 2009. The press ombudsman in Ireland is able to secure prompt and prominent retractions, clarifications and apologies when people want them. That scheme has given the press a good means of arbitrating and resolving a lot of complaints and allegations against them that people would otherwise have had to take through the courts, if they could afford it. The press in Ireland have largely opted in to the scheme.

The Irish editors of the UK-derived titles have variously said that the process in Ireland is very independent, that there is no censorship or sense of censorship, and that there is no state interference or insinuation of state interference. That comes from the Irish editors of the very UK titles that are fulminating against this proposal and this model.

I recognise that the Irish provisions are slightly qualified, and perhaps more than the people and the press would have wanted. However, that is because the Republic has Bunreacht na hÉireann, the written constitution, under which the Oireachtas is forbidden from conferring privilege on any group or person. Part of the way in which the system works in Ireland is to allow the courts to take account of how the press have used those other means. Therefore, somebody who is dissatisfied may bring a case that challenges the constitutionality of the system. Let us be clear: any future constitutionality challenge that relates to this provision in Ireland will not be that the freedom of the press has been breached or the free press threatened in any way. It will be that the system of statutory underpinned regulation is conferring privilege on some organs of the press.

I have said that I do not accept all the Leveson report, and there are obviously issues about its potential implications on the protection of sources and the notion of contact disclosure and declaration. Some of the odd stuff about briefings and leakings reminds me of party meetings years ago when Seamus Mallon used to say that if something came from him it was a leak but if it came from John Hume it was a briefing. That was our rule and I am reminded of it when I read parts of the Leveson report.

Many people have referred to the obvious remark about the last-chance saloon, and we are told yet again that there cannot be any more last chances. One gets the impression, however, that when the Prime Minister and the Culture Secretary meet newspaper editors tomorrow, it will essentially be, “This is the latest of the last-chance saloons.” Indeed, it now seems to take on the look of a lock-in involving the Government.

When the right hon. Member for Hitchin and Harpenden (Mr Lilley) was complaining about these proposals, he said that the danger in future would be that the regulatory system will be subject to the prejudices of the Government of the day. It is, however, the Government of the day who are going to meet the press tomorrow and who say that they will come up with press standards in our time. After weeks of consultation with editors they are going to come back with a document for new improved self-regulation. Although it will be outsourced by the editors, however, let us be clear that the industry will commission this so-called independent regulation. I have heard Conservative Members ask who will appoint the panel under statutory, underpinned independent regulation, but they have not asked who will make those appointments and be involved in the independent consultation if it is done the way the press—the owners—want it done.

None of us should exaggerate the import of what Leveson has recommended. It is not a vaccination or inoculation against any recurrence of the sort of disease we have seen with the press, or its ugly and serious symptoms, and those who say it will prevent such abuse see too much in what is a safe, measured and sound recommendation. Neither, however, is it a toxic prescription that will in future see the media trapped in some sort of politically correct quarantine in the way suggested by Conservative Members. Once there is one piece of legislation, the sky will not automatically fall in and a cascade of subsequent legislation trammel the press or undermine press freedom.

We must take care in how we legislate, and be clear and remind ourselves why we are legislating at each stage of the Bill. We must be clear who will legislate and whether the matter will be considered in Committee or, because we regard touching on press freedom as constitutionally sensitive, in a Committee of the whole House. In that case, why are current negotiations taking place only between the main parties, some of which contributed to the problem and the public perceptions that exist in the first place? I remind the House that negotiations on the Parliamentary Standards Act 2009 involved all parties, and at times the smaller parties helped to move discussions on to some practical outcome.

21:13

[Sir Bob Russell (Colchester) (LD)]

A free press, warts and all, is a fundamental requirement of a liberal democracy. In the immortal words of one of the founding fathers of the United States of America, James Madison, it is better to leave a few noxious branches on the tree of press freedom than

“by pruning them away, to injure the vigor of those yielding the proper fruits.”

Someone else with a view on the subject was Enoch Powell who was quoted in The Guardian in December 1984 as saying:

“For a politician to complain about the press is like a ship’s captain complaining about the sea.”

Speeches this afternoon and evening have been mostly about national newspapers, but those who were present for the opening speeches will recall that I intervened on both the Secretary of State for Culture, Media and Sport, and the Shadow Secretary of State. I sought their confirmation that the issues that confront the House and the nation relate to national newspapers, and that the local press, with its thousands of honest, hard-working journalists, should not be blamed for the sins of those working on the nationals.

From what I have said, the House will recognise that I do not want regulation of the press. My fear is not that this Government will use the legislation to undermine and stifle a truly free press, but that a subsequent one could do so. Our national newspapers collectively have become a disgrace. Once proudly defined as the fourth estate, they are now more akin to a sink estate—although perhaps “sink” is too high up the drainage system.

However, I would like a press law—it should also apply to radio and television—to restrict media ownership to people who hold British passports and who reside permanently in the United Kingdom, and whose names appear on the electoral roll. People living overseas should not be allowed to own and control Britain’s media.

Next September will be the 50th anniversary of me joining my local newspaper, the Essex County Standard, as a junior reporter. It is still published on a Friday, but its circulation is nothing to what it was 50 years ago, and the population of the town has virtually doubled. In those days, it was rare to find a household that did not have the newspaper. That is true of newspapers around the country.

There was also a Tuesday paper—the Colchester Gazette—which converted to a five-nights-a-week paper, published Monday to Friday, in 1970 and became the Evening Gazette. A couple of years ago, it started publishing in the morning as the Colchester Daily Gazette. Those newspapers were once owned by a local family company, as most of the nation’s weekly newspapers were. They were written, edited, published and printed locally. Today, Colchester’s papers are edited in Basildon and printed in Oxford—they are part of the Newsquest group, the UK headquarters of which is in Weybridge, Surrey. Newsquest is owned by Gannett, a company based in Tysons Corner, Virginia, USA.

In 1969, after working on two other local newspapers elsewhere in Essex, including a period as editor of the Maldon and Burnham Standard, I headed for Fleet street, where, over a four-year period, I worked as a sub-editor on the London Evening News and the London Evening Standard, with brief periods in between on the fledgling newly acquired Murdoch Sun and the News of the World. I should stress that I worked as a sports sub on the News of the World.

I bring to the debate my experience working both on local newspapers and in Fleet street, although it was all a long time ago. I refer to Britain’s local newspapers in the context that they operate in local communities in different parts of the UK. However, 200 are ultimately American-owned. Would a non-American be allowed to own American newspapers? The Australian-born Rupert Murdoch, who is now an American citizen, answers that question. Newsquest UK has some 200 newspapers with a weekly circulation topping 10 million. It is a major player in the nation’s newspaper industry, but, to the best of my knowledge, it is not involved in the newspaper scandals that led to the Leveson inquiry.

I regret that the high standards of national journalism and newspapers of 40-plus years ago have been dumbed down thanks to the negative, unethical influence of the Murdochs’ The Sun, whose lowering of press standards and morals has afflicted much of the national press. The things that have been going on would never have happened or been tolerated in years gone by in the pre-Murdoch era, when people trusted our newspapers. Local newspapers have suffered a decline in the high standards of yesteryear, but they should not be considered in the same way as national newspapers. I therefore will not support legislation should that option be put before the House in due course.

I hope newspapers voluntarily agree to one thing. I wrote to Lord Justice Leveson to suggest that, when a newspaper publishes a letter with a name and address that are subsequently shown to be fictitious, the aggrieved person should be granted the right to have a rebuttal letter published along with an apology. I have been the victim of several such letters penned by a Tory activist in Colchester as part of a Tory dirty tricks campaign against me.

21:18

[Mr William Bain (Glasgow North East) (Lab)]

A free press is one of the essential attributes of a free and open society, and one of the principal means by which other powerful institutions are subject to the transparency and scrutiny on which a plural democracy depends. At its best, the press can fearlessly speak truth unto power, expose and campaign against injustice and hypocrisy, and entertain and enlighten. In those countries where there is no free press and the Government control the media, such freedoms are a huge aspiration of campaigners for democracy and human rights. However, at its worst, as revealed in all 1,987 pages of Lord Justice Leveson’s report, the press has a dark side—of illegal tapping of phone calls, e-mails and texts; and of destroying people’s lives and reputations in the most irresponsible way. The strong message from the Leveson report is that such great freedom in society must be balanced by a more responsible attitude too, with journalism more aware of its obligations to those failed by standards, which in some cases fell well below what society would call acceptable.

The other strong purpose we can discern from the report is to ensure that it is the industry itself, rather than Parliament, the Executive or the judiciary, that should have the primary responsibility of regulating itself, but in a way that learns the lessons from the inadequacies of the Press Complaints Commission, which neither had the clout nor the sanctions to hold the profession to account when required to do so. Such a new regulator must be underpinned by statute.

Lord Justice Leveson has produced a clever and balanced set of recommendations to put in place an enhanced scheme of self-regulation. They will create a powerful press board that is independent from both the industry and the Government, but is underpinned by statute so that its functions and role can be ratified by parliamentarians in a similar way to the model used in Ireland, and with financial incentives to encourage as many publications as possible to join the board. The board would have the power to instruct remedies for breach of the new code and to correct the record in public for individuals or groups of people affected. It would not, however, have the power to prevent or inhibit publication of material. That would rightly remain within the ambit of the courts in limited circumstances. It would be able to receive and investigate complaints from individuals, but also to examine issues on its own initiative, with proper powers over the compulsion of evidence and with the power to fine up to 1% of turnover, or to a maximum of £1 million.

There are some in this debate who claim that any statutory encroachment on the media is tantamount to state control, but that is far from the case. Parliament has already enacted a series of judicially enforceable and recognisable positive rights in law through the Human Rights Act 1998. Section 12 applies the convention to actions relating to the press. As the hon. and learned Member for Harborough (Sir Edward Garnier), the former Solicitor-General who is no longer in his place, said in his remarks, article 10 of the European convention on human rights provides for freedom of expression, namely the freedom to hold opinions, and to receive and impart information and ideas without interference by public authorities and regardless of frontiers, subject to certain conditions prescribed by law. Lord Justice Leveson calls on Parliament to bolster those freedoms derived from the Council of Europe by legislating specifically for freedom of the press in statute—hardly a revolutionary act.

In Scotland, regulation of the press that are based there is a devolved matter under the devolution settlement. The law on defamation has important differences, which derive from its different historical origins. Scotland’s First Minister—heavily criticised, I have to say, by the report—has said he will seek advice from a commission chaired by a Scottish judge on the implications of the report for regulation of the press in Scotland, and on those matters of Scots law that affect the media and that come within the jurisdiction of the Scottish Parliament.

In the case involving my constituents, the Watson family, I hope to show that simply adopting different regulatory machinery and separate standards for press regulation would merely cause additional grief and complications for people such as the Watson family, who have attempted to secure justice in relation to publications that not only circulate in Scotland, but throughout the United Kingdom. I do not see the benefit to Scottish society of a separate form of regulatory framework. The case for shared regulation across the United Kingdom is by contrast strong, and is centred on the needs of the complainant.

In the time I have left, I would like to acquaint the House with some of the details of the horrific injustices that my constituents have endured for the last 21 years—and which they were happy that Members of this House, wider society and Lord Justice Leveson himself heard when they gave evidence to the inquiry. My constituent’s daughter was brutally murdered in cold blood in 1991. A major newspaper in Scotland—The Herald—published three columns by a columnist called Jack McLean. Marie Claire—a publication circulating throughout the United Kingdom, but not originating in Scotland—also made remarks about the Watsons’ murdered daughter Diane, which caused the family such distress that their son Alan committed suicide. The Herald published the final column by Mr McLean on the day that their son was laid to rest in his grave.

Lord Justice Leveson finds the behaviour of some of these publications to be absolutely outrageous. Where I take issue with the right hon. Member for Hitchin and Harpenden (Mr Lilley), who spoke earlier, is that he assumed that the criminal and civil law created redress. However, in her evidence to the Select Committee on Culture, Media and Sport, Margaret Watson quite rightly pointed out that the law of defamation does not apply to the dead, so the family of someone who has been defamed cannot sue in the courts for defamation. The criminal law had not been broken either, but the hurt and grief felt by that family have endured for 21 years.

We as parliamentarians have a right to protect freedom of the press, but we have a right to speak up for our constituents. They demand justice; they demand an end to irresponsible media; they demand action; and they demand that Leveson’s recommendations be implemented in full.

21:24

[John McDonnell (Hayes and Harlington) (Lab)]

My hon. Friend the Member for Glasgow North East (Mr Bain) has given us a salutary reminder of why we are here, as did my hon. Friend the Member for Bridgend (Mrs Moon).

It is important in these debates to listen to the practitioners as well—all the practitioners, not just the editors. There is nobody keener than the National Union of Journalists to protect its members’ ability to do their job. That is why it recommended the Irish system in its submission to Leveson, on the basis that it worked well, despite the NUJ’s earlier reservations. The NUJ ensured that Leveson was aware that the Irish system was underpinned by statute, but it was important to acknowledge that the Irish system recognises the union as a key stakeholder in designing the architecture and implementing the system.

I want to deal with changing the culture. As part of the inquiry, Leveson looked at the issue of a conscience clause and said in recommendation 47, on the advice of the NUJ, that the matter should be considered seriously by the editors. The background to this is that there has been a code of conduct since 1936—it was developed by the NUJ—to set the standards for journalists in the performance of their role. It included a commitment that journalists

“do nothing that would intrude into anybody’s private life, grief or distress unless justified by…public interest.”

It also gave a commitment to ensure prompt correction of any inaccuracies. The NUJ set up an ethics panel, to which people could go to seek redress. For decades it largely worked. My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) reminded us of when it worked, when editors worked with the union to ensure that it did. He mentioned Cudlipp, but there was also Harry Evans and Rees-Mogg, whose descendant is not in the Chamber at the moment.

The system worked until roughly the mid-1960s, when a different culture was established in the industry. Unfortunately, it was a culture of bullying and intimidation in news rooms. It undermined the implementation of the code of practice—and yes, it is not unrelated to the introduction of Rupert Murdoch’s News International on to the journalism scene in this country. From then on, it was NUJ policy to lobby this House to introduce protection for its members—for all journalists—through a conscience clause in their contracts of employment, so that a journalist could refuse to undertake any instruction that was unethical and went against the journalism code of conduct, but also against what eventually became the PCC code of conduct. That was backed up by a Select Committee recommendation in 1993 that a conscience clause should be introduced. The recommendation was opposed by all the editors. They refused to consider the matter or even to open a debate on it. On five occasions over the past 10 years, I have tabled amendments to employment legislation to introduce at least some consideration of a conscience clause, but they have been rejected following lobbying by the editors and the proprietors.

The Leveson inquiry received evidence across the piece about the culture of bullying. It has not gone away; indeed, it has got worse: many journalists had to submit their evidence anonymously for fear of victimisation. However, some very brave people did stand up. The general secretary of the NUJ, Michelle Stanistreet, presented her evidence, for example. I want to read the House a quote from the evidence to the inquiry from Matt Driscoll, who has been incredibly brave. Speaking about the use of unethical practices, he said:

“At the time I felt uneasy about such methods.”

He was referring to blagging. He went on:

“However, I knew that I could not bring up my concerns on the editorial floor for fear of being seen as a troublemaker. Any writer who questioned the morality of these methods would have been a marked man. It seemed that any method that could stand a story up was fair game.”

Witness after witness gave evidence to say that if they had stood up and spoken out, they could have been sacked. Rupert Murdoch’s response was to suggest that they could have resigned, to which Lord Leveson said that they could have done so, but they wanted to keep their jobs.

Leveson has recommended that the editors and proprietors now consider adopting a conscience clause. Bizarrely, when Rupert Murdoch was interrogated, he accepted that proposal and now supports it. There should therefore be no reason for such a clause not to form part of a journalist’s contract. The Prime Minister and the Deputy Prime Minister also said last week that the matter should be given serious consideration, as did the Leader of the Opposition.

The NUJ has now written to proprietors proposing the commencement of discussions on the introduction of a conscience clause in the contracts of all journalists. The Secretary of State is meeting the proprietors, and I congratulate her on involving the NUJ in those discussions. She is meeting representatives of the union as well, and they will be part of the overall discussions. It would be extremely helpful, now that we have cross-party consensus on the need to consider a conscience clause, if she could seek assurances from the proprietors that they will take the matter seriously and engage in discussions and negotiations on the issue and on the contractual changes that would need to take place for existing and future journalists. This could form another part of the architecture of a cultural change in journalism in this country, as well as protecting those who want to stand up for higher standards.

I want to raise another important matter. A conscience clause in a contract can be enforced by the individual, but in this culture, even if they have the ability to resort to law, they often do not feel that they have the capability or the strength to protect themselves. That is why they look to collective action and collective bargaining by their union on their behalf. However, the loopholes in the existing employment legislation have been used by News International, in particular, to enable it to refuse to recognise the NUJ.

The union had a large number of members working for News International, and it approached the management to request recognition in the normal way, but News International set up its own staff association. The trade union certification officer refused to certify the staff association as an independent trade union, because it was not seen as independent of Rupert Murdoch. Nevertheless, a loophole in the law allowed News International to refuse to recognise the NUJ as a licensed, certified, independent union. Instead, it recognised the staff association, denying NUJ members the necessary recognition that would allow them to engage in collective bargaining. That loophole in the law needs to be closed if we are to ensure that the terms of a conscience clause are enforceable not only in law but as a result of collective bargaining.

I conclude by urging the House to listen to the practitioners, the people who have endured the intimidation and bullying and the people who have had to operate in this culture, which has so denigrated their profession. I think the NUJ needs to be integrally involved in designing and implementing the new reform architecture. I am pleased that the Secretary of State has made a start on engaging with the union and ensuring that the whole industry will design our reform procedures.

21:34

[Mr David Hanson (Delyn) (Lab)]

The Government were right to arrange this debate so speedily after the Prime Minister’s announcement and statement last Thursday. It has provided an opportunity for the House quickly to express a view on the important issues of the Leveson report. We have heard 31 Back-Bench speeches over the last six and a half hours. I think that they have been exemplary, raising a range of issues and clearly examining those at the nub of Leveson’s report, which have focused largely on statutory regulation.

The mood of the House has been thoughtful. I believe that we have been trying to edge towards consensus. If it was the Government’s intention to have an early debate for those reasons, they have been successful. I can reflect, however, that there are certainly two different sets of views on the regulation issues.

I hope I do all those concerned a service when I say that my right hon. Friend the Member for Blackburn (Mr Straw), the hon. and learned Member for Harborough (Sir Edward Garnier), the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), the hon. Member for Richmond Park (Zac Goldsmith), my hon. Friend the Member for Lewisham West and Penge (Jim Dowd) and the hon. Member for Manchester, Withington (Mr Leech)—whose very good contribution highlighted the irony of his article being censored by the Manchester Evening News —coupled with the hon. Member for Camborne and Redruth (George Eustice), my right hon. Friend the Member for Exeter (Mr Bradshaw), my hon. Friends the Members for Bridgend (Mrs Moon), for Rhondda (Chris Bryant), for Stalybridge and Hyde (Jonathan Reynolds), for Hammersmith (Mr Slaughter), my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and my hon. Friend for Glasgow North East (Mr Bain) made extremely good contributions supporting the tenor of the Leveson recommendations. I was particularly pleased to see them joined by the hon. Members for South Swindon (Mr Buckland), for North Antrim (Ian Paisley) and for Foyle (Mark Durkan) and, not least, my hon. Friend the Member for Hayes and Harlington (John McDonnell). They all said that the points made by the noble Lord Leveson are worthy of consideration and either have their support or need to be examined in detail to help to secure tighter regulation of the press. I also believe that my right hon. Friends the Members for Manchester, Gorton (Sir Gerald Kaufman) and for Sheffield, Brightside and Hillsborough (Mr Blunkett) were edging towards that position, having considered these matters in some detail.

There is obviously a range of other views. The right hon. Member for Hitchin and Harpenden (Mr Lilley), the hon. Members for Maldon (Mr Whittingdale) and for Keighley (Kris Hopkins), my hon. Friend the Member for Falkirk (Eric Joyce), the hon. Members for Ealing Central and Acton (Angie Bray), for Folkestone and Hythe (Damian Collins), for Suffolk Coastal (Dr Coffey), for North East Somerset (Jacob Rees-Mogg) and for South Dorset (Richard Drax) and, indeed, the hon. Member for Colchester (Sir Bob Russell) have some concerns about the Leveson approach. I understand that and I can see where they are coming from. I do not share their views, but they made a passionate case for them today. The hon. Member for Rochester and Strood (Mark Reckless) focused particularly on the role of the Crown Prosecution Service, without supporting either side of the debate.

I will be honest in my opening strategy. I begin by sharing the starting point of the noble Lord Leveson. I do so because of the way in which the press can act, as Members will have heard from the speech by my hon. Friend the Member for Glasgow North East, in ways that I would not wish to support.

I support Lord Leveson’s opening statement in the executive summary:

“For the seventh time in less than 70 years, a report has been commissioned by the Government which has dealt with concerns about the press. It was sparked by public revulsion about a single action—the hacking of the mobile phone of a murdered teenager. From that beginning, the scope of the Inquiry was expanded to cover the culture, practices and ethics of the press in its relations with the public, with the police, with politicians and, as to the police and politicians, the conduct of each. It carries with it authority provided personally by the Prime Minister.”

I think we have tested that first premise in a positive debate. My hon. Friends and the Members on the Government Benches who have spoken in support of Leveson’s recommendations have done so with that first element of the executive summary at the forefront of their minds.

I express my view from this side of the House, but I am pleased to say that it has been expressed by the majority of Members on both sides of the House who have spoken today. I support the core recommendations of the Leveson report: I believe that there should be a new system of independent regulation of the press, guaranteed by law. My right hon. Friend the Leader of the Opposition and my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) have always said that they would support Leveson’s recommendations if they were sensible and proportionate, and I believe that they are.

[Mr Lilley]

For the sake of clarity, will the right hon. Gentleman confirm that the Opposition would accept a package of measures identical to those proposed by Leveson, except in one respect? Would they accept a powerful independent regulator, with powers to demand apologies, redress and corrections of inaccuracies, the only difference being that it would apply to this House rather than to the media?

[Mr Hanson]

I respect the way in which the right hon. Gentleman put his case today, but I believe that the debate is about the need for statutory underpinning of a regulatory system. Lord Leveson said clearly in his report that this was the seventh time in 70 years that we had examined the issue. I feel very strongly that we need to have cross-party talks and share what has emerged during today’s necessary debate, but also that we should reach the conclusion which—as the Secretary of State will see when she reads the report of the debate—was reached by the majority of Members on both sides of the House, who have spoken in support of the Leveson recommendations.

[Alun Cairns]

I respect the right hon. Gentleman’s view, although I disagree with the element relating to statutory underpinning. Is he saying that if legislation to that effect is not passed in the present Parliament, it will be a Labour manifesto commitment for the next general election?

[Mr Hanson]

I think that the hon. Gentleman, who has dipped in and out of today’s debate, will know that my right hon. Friend the Leader of the Opposition has said that he wants action urgently. He wants action by Christmas; he wants action in the next few weeks. I too want to see statutory underpinning of Leveson’s recommendations as a matter of urgency, and I hope that we can achieve consensus. When the hon. Gentleman—who has not been present for the whole debate—reads Hansard, he will see that his hon. Friend the Member for South Swindon, his hon. and learned Friend the Member for Harborough and others have supported some of Leveson’s recommendations.

I accept that there are concerns about state regulation. In a letter to me, the editor of my own regional newspaper, the Daily Post, said:

“I am strongly opposed to statutory regulation of the press.”

However, I say to that newspaper editor, and to others who share her view, that we need to consider what that means. In his summary of recommendations, Lord Leveson says:

“An independent self regulatory body should be governed by an independent Board”.

Is that state regulation of the press? He continues:

“The appointment panel… should be appointed”

in a “fair and open way” with “an independent process”. Is that state regulation? No. He continues:

“Funding for the system should be settled in agreement between the industry and the Board, taking into account the cost”.

Is that state regulation? No. The code and the board should

“subscribe to an adequate and speedy complaint handling mechanism”.

Is that state regulation? No.

“The Board should not have the power to prevent publication of any material, by anyone”.

Is that state regulation or censorship? No, it is not. It is, by statute, the underpinning of a voluntary agreement between the press and the state in relation to regulation of those areas. It is no different, dare I say it, from the legal services body that was set up by statute to look at solicitors, or the Judicial Appointments Commission, which was set up by statute to appoint judges, or the General Medical Council, which was set up by statute to be the independent regulator of doctors, or Ofcom itself, or the Advertising Standards Authority. All those were established by Parliament, and they are all independent of Government and Parliament, but they all fulfil a regulatory role across the board. Those matters are important. We need to have that independence, and we need to underpin it with statutory regulation.

As the Minister for Policing and Criminal Justice will be winding up for the Government and I am the shadow Police Minister, it is important to place it on record that Leveson’s recommendations are important in respect of policing. I believe we can do more, but it is right that the term “off the record briefing” should be discontinued. It is right that all senior police officers should record their contacts with the media for the sake of transparency and for audit purposes. It is right that there should be guidance to police officers on who can speak to the press and when. It is right that we should have an audit of who uses the police national computer and when. It is also right in respect of the police that we should examine guidance and spell out the dangers of hospitality, gifts and entertainment.

[Mark Reckless]

The police have been traduced in this matter by a number of commentators, including Members of this House. Does the right hon. Gentleman agree that it is good that Leveson has given such a positive report on the police, certainly in terms of the initial investigation, although there were problems later with not reopening it?

[Mr Hanson]

Lord Leveson has done so in terms of the initial investigation. There are further elements to come in part two, however, and we will learn what he says about them. He has recommended certain measures, and I hope the Government will accept them in due course.

The Government must not only examine what the Opposition have said, but take on board the comments of Members from the Liberal Democrats, Plaid Cymru, the Democratic Unionist party, the Social Democratic and Labour party and, last but not least, their own Conservative Members. They have strongly said right across the board that the Prime Minister should act on the Leveson challenge. Failure to do so will show that the Prime Minister is looking for good headlines, but he will ultimately be on the wrong side of the argument.

For the victims of these terrible intrusions, there can only be one outcome, and that has been put very ably by Members of all parties this evening. The long grass is not an option. The Prime Minister has said he is not convinced of the need for statutory underpinning, but the majority of this House has said tonight it is in favour of statutory underpinning of Leveson’s recommendations. The Prime Minister must act. I hope the Government will reflect on what has been said tonight, and on the comments of my right hon. and learned Friend the Member for Camberwell and Peckham and my right hon. Friend the Leader of the Opposition. They must continue to work on a draft Bill and bring one forward before Christmas. If they do not, the Opposition will give all Members of this House the opportunity to give their opinion early in the new year.

21:47

[The Minister for Policing and Criminal Justice (Damian Green)]

We have heard many thoughtful contributions from Members on both sides of the House, and I am sorry that I may not be able to do justice to all of them in the time available to me.

The Government recognise the strength of feeling on these issues both in the House and more widely among the victims of phone hacking and the public. As Lord Justice Leveson noted, some of the behaviour of the press has “wreaked havoc” with the lives of innocent people and

“can only be called outrageous”.

The central issues of this debate—press regulation and the relationships between the press and the police or politicians—are central to the confidence that people have both in how the country is run and that the rule of law is being upheld with impartiality and integrity.

As the shadow Police Minister has just said, there has been a degree of consensus across the House tonight. I am glad that the official Opposition have moved from the position of the Leader of the Opposition, who said that the Leveson recommendations should be accepted in their entirety, to the position that the shadow Police Minister stated: that he would accept the core recommendations. That is a sensible move.

As Lord Justice Leveson pointed out when publishing his report, the relationship between the police and the public is central in our system of policing by consent. The media have a vital role to play in facilitating this relationship, but there is a trust that goes with that role. That trust has been damaged and needs to be repaired as quickly and effectively as possible.

On the central issue of media regulation, as the Prime Minister made clear on Thursday, we accept completely the central principles of Lord Justice Leveson’s report, namely that an independent regulatory body should be established, and it should be a body that is independent both in its appointments and its funding; it should set out a code of standards by which the press have to live; it should provide an accessible arbitration service for dispute resolution; it should provide a mechanism for rapid complaints handling; and it should have the power to impose million-pound fines where there have been flagrant breaches of the code. The culture change that my hon. Friend the Member for Camborne and Redruth (George Eustice) mentioned is certainly needed.

[Mr Slaughter]

What system is the Minister going to put in place to give victims of the press protection in costs—is it Leveson or something else? Does the Minister agree that this will need legislation? What is his vehicle for that—is it the Defamation Bill or something else?

[Damian Green]

I will come on to answer the point that the hon. Gentleman made in his speech, if he can be patient.

The Prime Minister made it clear that we have serious concerns and misgivings that the recommendation to underpin this body in statute may be misleading. Such concerns were echoed by hon. Members from both sides of the House, including my hon. Friends the Members for Richmond Park (Zac Goldsmith) and for Suffolk Coastal (Dr Coffey). They were also echoed with inimitable eloquence by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). We should be wary—this House is wary—of any legislation that has the potential to infringe free speech and a free press. That point was also made eloquently by the hon. Members for Lewisham West and Penge (Jim Dowd) and for Falkirk (Eric Joyce), and by my hon. Friends the Members for Manchester, Withington (Mr Leech) and for Ealing Central and Acton (Angie Bray). We should be wary about whether legislation is truly necessary on this point.

As my right hon. Friend the Secretary of State for Culture, Media and Sport said in opening the debate, it is right that we should take the time to look at the details. I agree with many of the points made by hon. Members on both sides of the House. For instance, my hon. Friend the Member for Maldon (Mr Whittingdale) made a good point in saying that many of the failures were breaches of the criminal law; my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) was right to warn against regulatory creep in these things; and the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) was exactly right in saying that the ball is in the press’s court now, that they have to take the immediate decisions and that it is up to them.

[Zac Goldsmith]

I am just wondering whether I misheard my right hon. Friend. For the record, I made the case that I do not believe that effective regulation will be possible without legislation. I will send him a copy of the Hansard record of my speech later.

[Damian Green]

I listened to my hon. Friend’s speech carefully and I thought he made it clear that he had misgivings—that is the point I was making. If he does not have misgivings, I apologise to him.

Obviously, further cross-party discussion will be needed on this and some of the other recommendations, particularly on the proposed changes to the Data Protection Act. I think that hon. Members on both sides of the House agreed that the Leveson proposals were pretty inadequate on data protection and its effect on investigative journalism, and I assume that that lies behind the nuanced change in the Opposition’s position. It is important that we look at these proposals carefully, particularly in the context of the negotiations on the broader European Union framework to which the Data Protection Act gives effect.

Lord Leveson himself said that these changes need to be considered with great care and he also admitted that this was something that had not been aired extensively during the inquiry or received much scrutiny generally. I believe that the hon. Member for Foyle (Mark Durkan) made that point very well. We agree that this matter needs careful analysis. We must not make haste to amend the Data Protection Act only to find that responsible investigative journalism, holding the rich and powerful to account, is unduly hampered because of some wide-reaching amendments, even ones made with good intentions.

My hon. Friend the Member for Keighley (Kris Hopkins) talked about how the press had helped him in his council work on child protection. Several hon. Members spoke eloquently and passionately about the effects on their local community of press malpractice. They included the hon. Members for Bridgend (Mrs Moon) and for Glasgow North East (Mr Bain). My right hon. Friend the Prime Minister will return to the House on all these issues following the cross-party discussions.

Some specific questions were raised in the debate. The right hon. Member for Exeter (Mr Bradshaw) asked about the timetable for decisions, and we look forward to the press coming forward with their new proposals after tomorrow’s meeting. People have said that we should not delay; the meeting with editors is actually happening tomorrow. Lord Hunt has suggested a timetable that starts this week with that meeting and proposals that will come in the early months of next year.

The hon. Member for Hammersmith (Mr Slaughter) asked about the LASPO Act changes and defamation. We believe that good cases can still be brought after the LASPO reforms come in, but we clearly want to ensure access to justice for those such as the Dowlers who may feel that they have been denied it in the past. That is why we have referred the matter to the Civil Justice Council. That is the appropriate body to consider the details of the proposals, which are both important and complex.

I agree with the shadow Police Minister that although most of the debate has been about press regulation, the issues around the police and their handling of the investigations into phone hacking as well as their relationship with the media and police integrity more widely are equally central to the debate—

[Mr Straw]

Will the Minister give way?

[Damian Green]

I apologise to the right hon. Gentleman —[Hon. Members: “Oh!”] Let me talk about the police first, and then I will certainly deal with his point.

I welcome the fact that Lord Justice Leveson has noted that he has not seen any evidence that corruption by the press in relation to the police is a widespread problem. I appreciate the point made by my hon. Friend the Member for Folkestone and Hythe (Damian Collins) about particular instances, but it is also important to note what Lord Leveson said about this matter. In particular, I want to emphasise two additional points.

First, the Government believe that Lord Leveson’s analysis of the issues and problems with the police is correct, but as he notes, it is very important for the scale of the problem to be kept in proportion. The vast majority of police officers in this country maintain standards of the highest integrity and they also often need to maintain a relationship with both local and national media in order to do their jobs properly. There is no place in our police forces, however, for those who do not meet those high standards or who abuse their relationship with the media. We will ensure that there is no longer any place for them in the police.

Secondly—

[Mr Straw]

rose—

[Damian Green]

I will give way to the right hon. Gentleman if he stops standing up—[Interruption.] I want to deal with the police first.

Secondly, there is a much-changed policing landscape since the issues highlighted by Lord Justice Leveson came to light. He recognises not only that, but the continuing improvements that are being made. We have created the college of policing to drive up police standards across the board and it will have a particular focus on working to ensure police integrity—[Interruption.] I feel sorry for those Labour Members who do not regard police integrity as important. They are completely out of touch with what the public want.

Police and crime commissioners are now in place to hold chief constables and their forces to account on behalf of local people and to ensure that they meet the high standards that people demand—[Interruption.] Apparently, Labour Members are also not interested in democracy, unlike the various Labour police and crime commissioners I met earlier today.

On the failings identified in the operational decisions made by the police in their investigations into phone hacking, there is now a new senior leadership team in place in the Metropolitan police to play its part in taking forward the report’s recommendations.

[Mr Straw]

rose—

[Damian Green]

I will give way to the right hon. Gentleman.

[Mr Straw]

I am very grateful to the Minister. The Irish Defamation Act underpins the Irish Press Council and it works. Why will that not work here?

[Damian Green]

The Irish system has not been in place for very long and it is impossible to claim all the virtues for it that the Opposition wish to claim. It is sensible for discussions to continue on the points on which there has been widespread consensus in the House this evening, and jumping immediately into another system would be the wrong way to go about this.

[Helen Goodman (Bishop Auckland) (Lab)]

Seventy years!

[Damian Green]

The hon. Lady, from a sedentary position, talks about 70 years but the Leveson report was published last Thursday. We are debating it today, a Monday, my right hon. Friend the Secretary of State is meeting the editors tomorrow and we will produce proposals in the coming months.

We will consider carefully the other recommendations in Lord Justice Leveson’s report and respond in due course. The Government will ensure that the central principles of Lord Justice Leveson’s report will be taken forward in cross-party talks as quickly and comprehensively as possible.

Question put and agreed to.

Resolved,

That this House has considered the matter of the Leveson report into the culture, practices and ethics of the press.

Business without Debate

Monday 3rd December 2012 Commons Chamber

Delegated legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Legal Aid and Advice

That the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012, which was laid before this House on 29 October, be approved.—(Nicky Morgan.)

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 December (Standing Order No. 41A).

Legal Aid and Advice

That the draft Civil Legal Aid (Merits Criteria) Regulations 2012, which were laid before this House on 29 October, be approved.—(Nicky Morgan.)

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 December (Standing Order No. 41A).

Charities

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft Charitable Incorporated Organisations (Consequential Amendments) Order 2012, which was laid before this House on 30 October, be approved.—(Nicky Morgan.)

Question agreed to.

Charities

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012, which were laid before this House on 30 October, be approved.—(Nicky Morgan.)

Question agreed to.

parliamentary privilege (joint committee)

Resolved,

That this House concurs with the Lords Message of 28 May, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the Green Paper on Parliamentary Privilege presented to both Houses on 26 April (Cm. 8318).

Ordered,

That a Select Committee of six Members be appointed to join with the Committee appointed by the Lords.

That the Committee should report by 25 April 2013.

That the Committee shall have power—

(i) to send for persons, papers and records;

(ii) to sit notwithstanding any adjournment of the House;

(iii) to report from time to time;

(iv) to appoint specialist advisers; and

(v) to adjourn from place to place within the United Kingdom; and

That Sir Menzies Campbell, Mr William Cash, Thomas Docherty, Tristram Hunt, Mr Bernard Jenkin and Mrs Eleanor Laing be members of the Committee.—(Nicky Morgan.)

Committees

[Mr Speaker]

With the leave of the House, we will take motions 7 to 11 together.

Administration

Ordered,

That Simon Kirby, Dr Phillip Lee, Sarah Newton and Mike Weatherley be discharged from the Administration Committee and Karen Bradley, Mr Marcus Jones, David Morris and John Penrose be added.

Environmental Audit

That Sheryll Murray be discharged from the Environmental Audit Committee and Dr Matthew Offord be added.

Regulatory Reform

That Ben Gummer, Brandon Lewis and Mr Robert Syms be discharged from the Regulatory Reform Committee and James Duddridge, Richard Fuller and Rebecca Harris be added.

Science and Technology



That Gareth Johnson be discharged from the Science and Technology Committee and David Morris be added.

Welsh Affairs



That Mr Robin Walker be discharged from the Welsh Affairs Committee and Simon Hart be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Regeneration of Chatsworth Gardens (Morecambe)

Monday 3rd December 2012 Commons Chamber

22:02

[David Morris (Morecambe and Lunesdale) (Con)]

I am presenting this petition tonight on behalf of over 600 people in Morecambe who want to see the town’s west end regenerated.

By way of background, the Housing and Communities Agency allocated Lancaster city council £1.9 million in May 2012. In order to bid for the funding, the council had to pledge to match-fund the HCA contribution. This money was to be used to bring a cluster of empty homes in Chatsworth Gardens into use. Everything was fine, or so we thought, until I received a letter from the chief executive on 17 September stating that there was

“a very real prospect that the Council will have to send the money already allocated back to the Government”

because the council could not afford the £1.9 million match funding.

People in the west end of Morecambe got very angry and concerned indeed. Since the petition was signed, the council has miraculously claimed that there was never any danger of the match funding not being in place. In fact, one council officer said he was “bemused” by the suggestion that the money may have to be returned. Lancaster city council wrote to me saying that it did not have the match funding, and now it does. I have spent some time trying to get to the bottom of this, only to unearth even more questions.

The petition demands that the west end of Morecambe be regenerated without delay, using the money allocated by the Government. I thank Mr Steve Swithin for collecting the names, and the people of the west end of Morecambe for fighting back. I commend the petition to the House and hope that Lancaster city council will take note of my constituents.

Following is the full text of the petition:

[The Humble Petition of residents of Morecambe,

Sheweth,

That the Petitioners support the campaign by Steve Swithin to regenerate the West End and the Petitioners understand that Lancaster City Council will receive £1.9 million to tackle clusters of empty homes in their area bringing 114 empty homes back into use.

Wherefore your Petitioners pray that your Honourable House urges the Department for Communities and Local Government to spend all of the mentioned £1.9 million on redevelopment for Morecambe’s West End.

And your Petitioners, as in duty bound, will ever pray.]

[P001143]

Sexual Abuse Offences

Monday 3rd December 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Nicky Morgan.)

22:05

[Mr Gary Streeter (South West Devon) (Con)]

In February 2011, my constituent Margaret Felwick contacted the police to report a serious sexual abuse offence carried out on her by her brother, Mr Geoffrey Genge. The offence had taken place 50 years before, but Mrs Felwick had never felt able to bring the incident to light. On discovering that her sister and cousin had also been abused by Mr Genge, Mrs Felwick could be silent no longer. All three victims contacted the police.

The police handled the allegations with professionalism. They were sensitive in their approach, thorough in their investigation and also very reassuring. My constituents were concerned that it was too late to prosecute. The police assured them that it was not; although the incidents might have occurred 50 years before, there was strong evidence to support the case and an attempt to prosecute should be made.

The case was referred to the local Crown Prosecution Service. The CPS assessed the evidence and, in August 2011, notified Mrs Felwick that the prosecution would go ahead. The CPS believed that there was enough evidence for a realistic prospect of conviction. It believed it to be more likely than not that Mr Genge would be convicted. Mr Genge was summoned to attend a court hearing and charged with five offences of rape and sexual abuse between 1957 and 1961 relating to Mrs Felwick and her two relatives. He pleaded not guilty. The case was scheduled for trial on 27 March 2012.

Then, on 10 January, my constituents were told that the case against Mr Genge had been dropped. The announcement was made in a letter from the CPS that came out of the blue. There was no attempt to discuss the matter with the victims. From that moment onward, the handling of the case was a disaster. In explaining its decision, the CPS told Mrs Felwick that she had a strong case and described her as a respectable and believable witness. It even confirmed that the number of victims making a complaint against Mr Genge made the prospect of prosecution more likely.

However, there was a problem. The CPS had discovered that the defendant’s solicitor was preparing an abuse of process defence. He would argue that there were barriers to obtaining the evidence needed for a fair trial. He would say that too much time had passed since the abuses had occurred. The defence, he would argue, would not have a proper chance to put up the evidence they wanted to present.

The CPS then decided that, in view of the abuse of process defence, Mr Genge might well be acquitted. A casework lawyer wrote to my constituents explaining that

“it is not certain that this would happen and as I have said it is no reflection on your evidence. But it does mean that the Code for Crown Prosecutors requires me to stop the case rather than pressing for trial”.

Therefore, the police believed the victims and the CPS found them to be credible, but the case was stopped because of consideration for Mr Genge. No reference was made to the victims at all.

Why did the CPS give my constituents hope that the case would go ahead, charge the defendant, thus bringing the matter into the public domain, and then change its mind at the last minute? Abuse of process is not a novel concept; lawyers deal with these types of issues fairly regularly. If there was a problem with the evidence, and if the defendant’s application was likely to be successful, why did the CPS not think of that sooner?

The result of the decision was devastating. On 11 January, the much respected Plymouth Herald reported that Mr Genge had been wrongly accused of rape. It said that the prosecution had offered no evidence and so the case had been thrown out. The paper carried the comments of Mr Genge’s solicitor. He described my constituents’ evidence as “weak” and their charges as “odious”. He said that the case was

“a shocking waste of taxpayers’ money”

and claimed that the CPS had undermined

“the integrity of the criminal justice system”.

Naturally, my constituents felt like victims all over again. The CPS made no attempt to refute the outspoken and scandalous claims or to make it clear that the case was not stopped due to a lack of evidence. Not only had my constituents lost their chance for justice; now their reputations were being battered as well.

The upshot was as follows. My constituents were abused as girls by Mr Genge. They suppressed the damage and the injustice for 50 years. They discovered that others had suffered the same fate and so plucked up the courage to come forward. The police believed them. The CPS believed them. The case started. Proceedings were issued. Nothing changed except that the CPS discovered a law that it should have known about at the time proceedings were commenced, and the case was dropped. A local solicitor, whose rhetoric was truly disgraceful, was allowed to drag my constituents’ names through the mud. They came to me for help.

I set up a meeting with the deputy chief Crown prosecutor for the south-west to discuss the case. My constituents and the barrister who had advised the CPS not to proceed were also present. It was not an edifying experience. The barrister tried to talk us into submission. He clearly did not understand how much damage had been done to the reputation of my constituents, or their genuine distress. He gave the impression of complete indifference to their plight. I left the meeting very angry indeed. One of the claims that the barrister made was that the CPS wanted to protect the victims from the ordeal of a trial—but the victims were desperate for a trial. They wanted the hearing to take place so that the truth could come out after all these years. If the CPS had truly wanted to protect the victims, it would have pushed for justice. If justice could not be done, the CPS should have made a decision not to prosecute when it first considered the evidence.

This debate has come at a timely hour. Public interest in sexual abuse cases has been sparked by the shocking revelations about the late Jimmy Savile. For the first time, many victims have felt able to come forward and talk about the abuse they have suffered, and their stories have shocked people across the country. A full police investigation into abuse allegations is now under way. The police are being encouraged to follow the evidence where it leads them, and in recent weeks they have not been hesitant to arrest people in connection with allegations as and when they have arisen. Mr Freddie Starr was questioned about an incident relating to a young girl in the 1970s, Mr Wilfred De’Ath was questioned over allegations of abuse dating back to 1965, and Mr Dave Lee Travis was held over accusations of sexual assault relating to the late 1960s.

Of course it is right that these investigations take place. It is right that justice is done for victims whose lives have been damaged by abuse. However, if action can be taken in relation to offences by Jimmy Savile, who is dead, and if others are in the firing line about incidents relating to 30 or 40 years back, why can a prosecution not take place against Mr Genge? There is now a strong public interest in sexual abuse cases being investigated and prosecuted. The CPS must get its act together. It must make sure that prosecutions are dealt with in a sensitive, thorough and professional way. Every effort must be taken to ensure that justice is done.

The Felwick case is one of the worst I have come across in 20 years of doing this job, so let me ask the Solicitor-General some very specific questions. First, if abuse of process is a well known defence in cases of this kind, why did the CPS not consider it when it first decided to prosecute? Why was it suddenly so certain that the defence’s application for an abuse of process would be successful? Secondly, if prosecutions cannot be brought for cases which have occurred 30 years or more in the past, how can progress be made in investigating other historical offences? Thirdly, when the CPS decided to change its mind halfway through Mr Genge’s prosecution, why on earth did it not consult my constituents before the case was dropped? Finally, why did the CPS not do more to protect the reputation of my constituents? Why did it not make it clear that the prosecution was not stopped on the basis of weak evidence, as was claimed by the defendant’s solicitor, but because of a legal technicality and CPS timidity?

I have met Mrs Felwick many times. She is a gentle, reasonable and decent human being. I cannot think of a single motive she would have to raise this matter after all these years if it were not so that the truth could be told. Why would she want to put herself through the trauma of a trial if not for justice to be done? I have utter faith in Mrs Felwick and her relatives. I have absolutely no doubt that Mr Genge abused my constituents when they were children, and he is getting away scot-free. This is not British justice. I ask the Solicitor-General to review this case and the decision not to prosecute, and to ensure that justice is done.

22:14

[The Solicitor-General (Oliver Heald)]

I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing this debate. He is one of the most respected Members of the House—a solicitor who has practised in the courts and who is known for his passion and his commitment. I pay tribute to the active role he plays in supporting his constituents.

This evening my hon. Friend has pointed to issues about a specific case and the decisions taken by the Crown Prosecution Service, and he has also raised some wider matters about the approach that prosecutors take. He raised four key areas of concern about the case: whether the original decision to prosecute was right; the later decision to offer no evidence; how that decision was communicated to the complainants; and the effect of the decision on them.

My hon. Friend has been in correspondence with Barry Hughes, the chief Crown prosecutor for the south-west, and I believe that a meeting has been arranged for tomorrow to discuss these matters further. My hon. Friend is right to be concerned for his constituents, who after many years plucked up the courage to report serious sexual offences to the police. It is in the public interest for such reports to be made, however long ago the alleged offences occurred.

The charges in the case relate to a number of serious sexual offences, including rape. The prosecution was commenced and preliminary hearings took place in September and October 2011. The decision not to proceed with the prosecution was made in early January 2012, following further consideration, and the case was dismissed when the CPS offered no evidence at the plea and case management hearing on 9 January 2012.

My hon. Friend will be aware from his experience that the code for prosecutors provides a test in two parts as to whether a case should be pursued. The first is the evidential test and the second the public interest test. There is also a duty for the prosecutor to keep the issue under review as the case proceeds. If at any time the code test is not, or is no longer met, a prosecution cannot proceed.

In this case the allegation was a serious one and related to offences more than 50 years ago, which is a long passage of time, but the reviewing CPS lawyer was mindful of that delay and the potential difficulties. He gave careful consideration to the matter and authorised the police to make charges. At that point, counsel was instructed to conduct the case and advise, which is entirely normal procedure, and he did. He looked at the issue of the potential difficulties with the age of the allegations.

The assessment of how likely it is for a prosecution to succeed in such circumstances is not entirely straightforward. The prosecutor has to consider, on the particular facts of the case, the likelihood of the court deciding that the delay may prejudice a fair trial, and the prosecution has to be stopped if it is felt that there is a risk that an application on abuse of process would succeed.

In this case, once the CPS specialist rape prosecutor who was dealing with the case had the benefit of advice from counsel, he considered that a defence application to the court to stop the proceedings would be likely to succeed. The prosecution was, therefore, no longer satisfied that the test in the code for Crown prosecutors was met and the decision not to continue was taken reluctantly by the CPS, mindful of the distress that it could cause the complainants. It does not follow from that decision, however, that the complainants were or are not believed. Put simply, the decision was taken because, in this particular case, the passage of time may have undermined the fairness of proceedings on the individual facts.

I understand that on 5 January 2012, the police informed the complainants that no evidence would be offered at court and then confirmed to the prosecutor that this had taken place.

No evidence was offered at court and the case was dismissed on 9 January. Within 24 hours, the CPS wrote to the complainants informing them of the outcome and offering a face-to-face meeting. Two of the three complainants accepted the offer and a meeting took place on 27 April 2012. My hon. Friend has attended such a meeting with the complainants, the CPS and counsel, and I have learned with regret that the meeting was not satisfactory and did not provide the reassurance sought about the decision making in the case.

Before I come to my hon. Friend’s four points, I will deal with the wider issues. The CPS has made a huge effort over recent years to improve the prosecution of offences of serious violence and violence against women and girls. Since 2001, it has produced a great deal more guidance on domestic violence, rape and sexual offences, prostitution, human trafficking, and children and young people. There is a major effort to offer support to victims and witnesses. I have a particular interest in this area as a member of the inter-ministerial group formed to discuss these issues.

Between 2007-08 and 2011-12, the CPS prosecuted almost 20,000 more cases each year involving violence against women and girls. The number of convictions has risen accordingly and we now have the highest conviction rate on record. In rape prosecutions, there has been a 4% increase in the conviction rate year on year. That rate is continuing to increase. Rape cases are now prosecuted by specialist rape prosecutors in all CPS areas, who must satisfy a set of criteria that include attending compulsory training. Rape and serious sexual offences training is based on real-life evidence and includes experts from outside the CPS, including from the voluntary sector.

My hon. Friend mentioned the Savile case and the prosecution of cases of child sexual exploitation. The investigation and prosecution of such cases is particularly important to the Director of Public Prosecutions, who has led a review of the Rochdale case, which my hon. Friend will recall was particularly concerning. The DPP recently held a meeting with the CPS, the police and the third sector. Guidance on how such cases should be dealt with by prosecutors is due in the new year.

I will now turn to my hon. Friend’s specific questions. The initial decision to prosecute was taken by a specialist rape prosecutor. It is important to bear it in mind that abuse of process is complex and is dependent on the individual facts of the case. An initial view of a case can change during the course of the prosecution and, as the case develops, it must be kept under review. That is what happened here.

My hon. Friend asked what this case means for other allegations of abuse that took place 30 years ago or more. The CPS decision in this case was based on its individual facts. The CPS regularly prosecutes cases that go back more than 30 years. The Attorney-General and I refer cases in which the sentence is unduly lenient to the Court of Appeal and we have done that recently in abuse cases that go back many decades and that involve defendants who are over 70 years of age.

On the consultation with the complainants, the police informed the complainants of the decision before the prosecution was dropped and face-to-face meetings were offered, as I have said. However, I accept that those meetings did not provide the reassurance that my hon. Friend would have wanted.

The final point relates to the CPS’s subsequent handling of the explanation of the decision. In response to the comments of the defendant’s representative to the Plymouth Herald, the CPS district Crown prosecutor made a statement in general terms about the CPS’s decision making in the case, and there was also a statement by a police spokesman. However, I appreciate my hon. Friend’s concern on behalf of his constituents that more might have been said to correct the impression, created by the comments of others, that the CPS’s decision was based on anything other than the factors to which I have referred.

I would like to make it clear that I, the Attorney-General and the DPP are determined that cases of sexual violence are prosecuted robustly, with proper consideration for victims and witnesses. Although we do not direct the DPP on how to act, we meet him regularly to discuss these matters. I was sorry to hear the concerns that my hon. Friend outlined, but I am grateful to him for bringing this case to my attention. Although it is not possible to reopen the case, I will ensure that these matters are drawn to the attention of the DPP. I hope that my hon. Friend has a positive meeting with the chief Crown prosecutor tomorrow and I invite him to discuss the matter with me further after that if he wishes to do so.

Question put and agreed to.

22:25

House adjourned.

Written Ministerial Statements

Monday 3rd December 2012 Written Statements

Monday 3 December 2012

Employment Law

Monday 3rd December 2012 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

Following the Chancellor’s announcement on 8 October that the Government would create a new employment status called employee owner, the Government have sought views on the practicalities of its implementation. This measure is part of the Growth and Infrastructure Bill which is currently before the House of Commons.



The Government will publish their response to the consultation shortly and copies will be placed the Libraries of both Houses.

UK Single Market Centre

Monday 3rd December 2012 Written Statements

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My noble Friend, Minister of State for Trade and Investment (joint with Foreign and Commonwealth Office), Lord Green, has today made the following statement:

I wish to inform the House that the Department for Business, Innovation and Skills has established the UK single market centre, a national co-ordinating team responsible for monitoring the functioning of the European single market.

The single market centre will bring together our work on all the existing tools that support the functioning of the single market, including the internal market scoreboard, SOLVIT (the problem solving mechanism that seeks to resolve the misapplication of rules by public authorities), the internal market information system, and policy responsibility for the point of single contact (the online licensing service for services directive implementation).

The objectives of establishing such a centre are to give greater visibility, and therefore focus, within Government on improving the UK’s performance in implementing internal market measures and to build stronger links between single market policy and operations to support our European policy through specific examples of market barriers. Over time, I hope that the work of the single market centre will increase awareness among UK businesses and consumers of the support available to them to trade and shop in the internal market.

The single market centre will report annually on the performance of the single market in the UK, and copies of this report will be placed in the Libraries of both Houses.

UK Cyber Security Strategy

Monday 3rd December 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

On 25 November 2011, I published the UK cyber security strategy. In the strategy I committed to report back on progress after one year, in particular on the achievements of the national cyber-security programme for which my Department has oversight. I am pleased to present this report to both Houses today.

The strategy outlined how the internet has changed and shaped our lives. A year on from its publication, this transformation continues apace.

The UK has been proclaimed as the “most internet-based major economy”, with one recent study stating that the UK’s internet-related market is now worth £82 billion a year and rising¹. The internet provides a rich and fertile basis for industry, and small businesses in particular, to expand and grow.

Industry suffers at the hands of such threats. The 2012 PwC information security breaches survey found that 93% of large corporations and 76% of small businesses had a cyber-security breach in the past year. With the cost for a security breach estimated between £110,000 to 250,000 for large businesses and £15,000 to 30,000 for smaller ones, these are losses which UK businesses can ill afford.

And we are not immune in Government. Attacks on Government Departments continue to increase.

The UK cyber-security strategy sets out our approach to tackling the threat. It clearly states four objectives for the UK:

To tackle cyber-crime and to be one of the most secure places in the world to do business in cyber-space.

To be more resilient to cyber attacks and better able to protect our interests in cyberspace.

To have helped shape an open, stable and vibrant cyberspace which the UK public can use safely and that supports open societies.

To have the cross-cutting knowledge, skills and capabilities the UK needs to underpin these other objectives.

These objectives are delivered through the national cyber-security programme which prioritises and co-ordinates work across Government and provides £650 million of new funding to improve the UK’s cyber-security capability.

We are making good progress against these objectives and I am pleased to be able to report on some notable achievements.

Combating the threats

First, I would like to point to the work of GCHQ in addressing cyber-threats. Its work underpins our ability to contend with the many challenges of the cyber-age that threaten our national security. We have invested in new and unique capabilities for GCHQ to identify and analyse hostile cyber-attacks in order to protect our core networks and services and support the UK’s wider cyber-security mission. I cannot reveal details of this work, but it has broadened and deepened our understanding of the threat, helping us prioritise and direct defensive efforts.

As part of this work, the MOD has established a tri-service unit, hosted by GCHQ in Cheltenham. The joint cyber-unit training and skills requirements have been established and it is currently developing new tactics, techniques and plans to deliver military capabilities to confront high-end threats.

The security service has developed and enhanced its cyber-structures, focusing on investigating cyber-threats from hostile foreign intelligence agencies and terrorists, and working with UK victims. This informs the work of the Centre for the Protection of National Infrastructure (CPNI) which is helping organisations to improve their cyber-security measures.

CPNI is actively influencing standards, researching vulnerabilities and focusing on the key technologies and systems of cyber-infrastructure. As part of this work it has commissioned a major research programme from the University of Oxford with the aim of delivering advice, guidance and products to help reduce the risk of cyber-attacks mounted or facilitated with the help of company insiders.

In terms of protecting core Government systems, work is being done across the public sector network to create a new security model for the sharing of services. This includes: a common and standardised approach to assurance—Single Sign-on—through an employee authentication hub; security monitoring; more effective policing of compliance; and greater network resilience.

2012 saw the UK hosting one of one the greatest sporting events of our time. The London Olympics was the first truly digital games and, as such, we recognised the need to address potential cyber-threats. We established unprecedented mechanisms for working hand-in-hand with sponsors and suppliers to the games in combating and managing incidents. The lessons learned from the event are informing our cyber-security national incident management plans as we go forward.

Tackling cyber-crime

The Government have invested in strengthening law enforcement and prosecutors’ capabilities to prevent, disrupt and investigate cyber-crimes and bring those responsible to justice. The Police Central e-Crime Unit has trebled in size, three regional cyber-policing teams have been established, and training on cyber-crime for mainstream police officers has been designed. This is increasing the capacity of the police to tackle cyber-crime in line with the strategic policing requirement which was issued by the Home Secretary in July 2012. The Serious Organised Crime Agency (SOCA) has increased its cyber-capability including the introduction of cyber-overseas liaison officers and a number of posts dedicated to mainstreaming cyber and digital investigations across the organisation.

The Police Central e-Crime Unit has reported that it has exceeded its four year operations performance target of averting £504 million of harm within the first year of the national cyber-security programme alone—preventing £538 million of harm at a return on investment of £72 harm averted for every pound invested. In addition and in conjunction with partners, SOCA has repatriated over 2.3 million items of compromised data to the financial sector in the UK and internationally since November 2011 with an estimated prevention of potential economic loss of over £500 million. In addition, The Crown Prosecution Service in turn is devoting more resources to prosecuting cyber-crime. As at the end of September 2012, the Department was prosecuting 29 “live” cyber-crime cases.

Joint operations between the two units have now been initiated as a first step towards their coming together in 2013 to form the National Cyber Crime Unit of the new National Crime Agency. This will deliver the next step in transforming law enforcement capability to tackle cyber and cyber-enabled crimes.

National cyber-security programme funding has enhanced Action Fraud to be the UK’s national reporting centre for fraud and financial internet crime, operating on a 24/7 basis. This enables reported incidents of crime to be developed into intelligence packages that national and local agencies can use for targeted enforcement activity. Over 12 months. Action Fraud received 46,000 reports from the public of cyber-enabled crimes amounting to attempted levels of fraud of £292 million.

To further assist in tackling online fraud, HMRC has established a new cyber-crime team to enhance the Department’s capability to tackle tax fraud by organised criminals. HMRC’s enhanced anti-phishing capabilities are now leading to the interception of five major threats a day and have helped the Department to shut down almost 1,000 fraudulent websites in the last 12 months.

Partnership with industry

Government cannot do this alone. We know that industry is the biggest victim of cyber-crime, and intellectual property theft through cyber-crime is happening on an industrial scale. In the past year we have cast our net wide to work with industry, academia and ever wider across the public sector to promote awareness of the need to address cyber-threats. We have produced and promoted a “Cyber Security Guidance for Business” document for industry chief executives, which sets out how board members and senior executives should adopt a holistic risk management approach to cyber-security in order to safeguard their most valuable assets, such as personal data, online services and intellectual property.

We have successfully completed a pilot Government and industry information-sharing initiative to provide a trusted environment for organisations to share information on current threats and managing incidents. This included around 160 companies across five sectors: defence, finance, pharmaceuticals, energy and telecommunications. Although industry to Government and Government to industry information exchange worked well, most value was gained through the industry to industry engagement and this is informing how we take this work forward.

Education, skills and awareness

We have been actively raising awareness among industry and the public about the problem so that people take the simple steps to protect themselves and demand better cyber-security in products and services. Working with industry, we have been raising awareness of cyber-security threats among the general public through initiatives such as the recent Get Safe Online Week, which for the first time ran in conjunction with the EU and US and Canadian partners, as part of a drive to establish a global Cyber-Security Month in October each year. The National Fraud Authority has also delivered targeted campaigns on online fraud, reminding people of the increasing threat of cyber-crime. Over 4 million individuals were reached by the Devils in Your Details campaign in spring 2012. In evaluation afterwards two-thirds of those surveyed said they would change their behaviour as a consequence.

We are investing in skills and research so that we have the capability to keep pace with this problem in the future. The first eight UK universities conducting world-class research in the field of cyber-security have been awarded “Academic Centre of Excellence in Cyber Security Research” through the Engineering and Physical Sciences Research Council. In addition, a new virtual Research Institute has been launched as a Government/academia partnership. Its aim is to improve understanding of the science behind the growing cyber-security threat. These initiatives help keep the UK at the forefront of international research in this field.

Meanwhile we have taken steps to improve cyber-security skills among young people and to widen the pipeline of talent coming into this field. BIS has commissioned e-Skills UK to develop interactive learning materials on cyber-security for GCSE students. One hundred and twenty schools have already signed up to use the materials as part of the Behind the Screen initiative. In November, GCHQ and the other intelligence agencies launched a new technical apprenticeship scheme which aims to identify and develop talent in school and university-age students. They aim to recruit up to 100 apprentices who will be enrolled on a tailored two-year foundation degree course. We have also sponsored the Cyber-Security Challenge UK in its work providing advice, support and guidance for anyone interested in a career in cyber-security, and to create opportunities for employers and previously unidentified talent to come together. Since its launch in 2010, over 10,000 people have registered with the initiative.

Ensuring that those in the field of cyber-security get the right training and education, GCHQ has established and is building on a set of certification schemes to improve the skills and availability of cyber-security professionals. The certification for information assurance professionals scheme will help Government and industry to recruit cyber-security professionals with the right skills at the right level to the right jobs. It will also assist participants to build a career path and to have the opportunity to progress through re-assessment as skills and experience grow.

International efforts

The nature of the internet means that we cannot focus our efforts on the UK alone. International co-operation is crucial. We have continued to promote the UK’s vision of an open, vibrant and secure cyberspace internationally, for instance through our active contribution to the Budapest Cyber Conference, and to build up a wide network of international partnerships. We have strengthened relationships with traditional allies and have initiated discussions with a broad range of countries. We are also working with international partners to improve co-operation to tackle cyber-crime through legislation and operational work, and have played a prominent role in international discussions on norms of behaviour and confidence building measures in cyberspace. In October, the Foreign Secretary announced the establishment of a Cyber Capacity Building Fund for supporting cyber-security internationally, part of which will create a new Global Centre for Cyber Security Capacity Building. This centre will help to make UK expertise and technology in this field available to international partners.

Reflecting the global nature of the cyber-crime threat, UK law enforcement agencies continue to work closely with their international partners, through partnership building and joint operations. SOCA continues to lead, with international partners, on the global representation of law enforcement interests to internet corporation for assigned names and numbers (ICANN), the internet domain name organisation. Collaboration with ICANN to amend the registrar’s accreditation agreement has assisted law enforcement in crime prevention and detection. In April 2012, SOCA led a global day of action to tackle automated vending cart websites selling compromised financial data. Two arrests were made in the UK and 70 websites taken down world-wide, resulting in major disruption to organised crime-groups’ activities.

A fuller list of achievements from the first year of the Cyber Security Strategy and work on the National Cyber Security Programme can be found at: www. cabinetoffice.gov.uk.

Future plans

Looking forward, we are clear that there is still much work to do. We will continue the work that is under way, while regularly assessing it against priorities, and taking into account new and emerging threats.

We are reviewing our national approach to cyber-incident management, particularly in the light of the successful Olympics response outlined above. Our intention is to move towards the establishment of a UK national CERT (computer emergency response team). This will build on and complement our existing CERT structures, improve national co-ordination of cyber-incidents and act as a focus point for international sharing of technical information on cyber security.

In addition, a new Cyber Incident Response scheme, recently launched by CESG and CPNI in pilot form, will move to become fully operational in 2013. It is an HMG quality-assured service, provided by industry, that organisations can turn to for assistance when they have suffered a cyber-security incident. The scheme will enable the UK’s emerging cyber-response industry to grow, bringing further benefit to the UK in terms of skills and business opportunities.

Working with the private sector to improve awareness of the need for better cyber-security continues to be a priority. We are now focusing our efforts on making sure that the right incentives and structures are in place to change behaviour in a sustainable way. Government Departments and agencies are working with professional and representative bodies to ensure the consideration of cyber-security becomes an integral part of corporate governance and risk management processes. We are supporting the development of organisational standards for cyber-security so consumers can identify those businesses with good cyber security practices.

Building on the successful “Auburn” pilot project between Government and businesses, we are developing a permanent information sharing environment called CISP (Cyber-security Information Sharing Partnership) to be launched in January 2013. This has been a joint industry/Government design. Initially, this will be open to companies within critical national infrastructure sectors, but we intend to make membership available more broadly, including to SMEs, in a second phase.

We are constantly examining new ways to harness and attract the talents of the cyber-security specialists that are needed for critical areas of work. To this end, the MOD is taking forward the development of a “Cyber Reserve”, allowing the services to draw on the wider talent and skills of the nation in the cyber field. The exact composition is currently in development and a detailed announcement will follow in 2013.

On cyber-crime, the Government will continue to work with the law enforcement community to enhance their capabilities, particularly through the creation of the National Cyber Crime Unit (NCCU), an integral part of the National Crime Agency which, subject to parliamentary approval, will be established in October 2013. The NCCU will bring together the capabilities of the Police Central e-Crime Unit and SOCA’s cyber-team to create an even more effective response to the most serious cyber-criminals.

Alongside tackling the threat the Government are determined to help seize the business opportunity in cyber, promoting the UK cyber security industry both domestically and across the globe. To support this, we are today forging a new joint “Cyber Growth Partnership” with Intellect, the organisation which represents the UK technology industry. Central to this will be a high-level group which will identify how to support the growth of the UK cyber-security industry, with an emphasis on increasing exports.

To ensure the UK can continue to call on cutting-edge skills and research BIS and the Engineering and Physical Sciences Research Council (EPSRC) will fund two Centres of Doctoral Training (CDT). The centres will call on a wide range of expertise to deliver multidisciplinary research and so help to provide the breadth of skills needed to underpin the work of the UK’s next generation of doctoral-level cyber-security experts. The two CDTs will deliver, in total, a minimum of 48 PhDs over their lifetime with the first cohort of students starting in October 2013. These are in addition to 30 GCHQ PhD Studentships also sponsored by the National Cyber Security Programme.

We are also building cyber security into undergraduate university degrees. We have partnered with the Institution of Engineering and Technology (IET) to support and fund the Trustworthy Software Initiative which aims to improve cyber security by making software more secure, dependable and reliable. As part of the initiative a module has been developed to educate students on technical degree courses on why trustworthy software is important. This material is currently being piloted at De Montfort University, the University of Worcester and Queens University Belfast. The IET plans to expand the pilot next spring; from 2015 education in cyber-security will be a mandatory component of software engineering degrees accredited by the institution.

On the international front, we will continue to expand and strengthen the UK’s bilateral and multilateral networks. Key opportunities to shape the future of cyberspace in the year ahead will include the Seoul Cyber Conference, the report of the UN Group of Government Experts on international security norms, OSCE (Organisation for Security and Co-operation in Europe) work on Confidence Building Measures and discussions on internet governance in the lead-up to the world summit on the information society (WSIS). We will also play an active role in discussions on the new EU cyber-strategy.

Public awareness will be a priority: we need to warn people of the risks and what they can do to protect themselves while ensuring that confidence in the internet is maintained. From spring 2013 we will be rolling out a programme of public awareness drives, building on the work of GetSafeOnline.org and the National Fraud Authority. This programme will be delivered in partnership with the private sector and will aim at increasing cyber confidence and measurably improving the online safety of consumers and SMEs. We are working now to understand the online behaviour of different segments of consumers in order to prepare the ground for these campaigns and to ensure what we do is based on evidence on what works.

Meanwhile Government will be mainstreaming cyber-security messages across the breadth of its communication with the citizen. For example, HMRC will be automatically alerting customers using out of date browsers and directing them to advice on the threat this might pose to their online security.

Conclusion

Further details on forward plans are available at: www.cabinetoffice.gov.uk. One year after the strategy’s publication a great deal has already been accomplished in our aim of protecting UK interests in cyberspace and making the UK one of the safest places to do business online. This is not an issue for Government alone. Industry has the potential to lose the most by not rising to these challenges so together we must work to address cyber-threats which could undermine our economic growth and prosperity.

The past year has created an increasing momentum across the UK at varying levels and across all sectors in addressing a wide range of cyber-security threats. We look forward to maintaining this pace, continually assessing our progress as we go forward. I will report back on progress again a year from now.

¹AT Kearney: The Internet Economy in the United Kingdom

ECOFIN

Monday 3rd December 2012 Written Statements

[The Financial Secretary to the Treasury (Greg Clark)]

A meeting of the Economic and Financial Affairs Council will be held in Brussels on 4 December 2012. We expect the following items to be on the agenda and discussed.

Banking Supervision Mechanism

Council will seek to agree a general approach for the Commission’s proposal for a single supervisory mechanism (SSM).

Revised capital requirements rules (CRD IV)

Council will receive a progress report on the proposals for revised capital requirements rules (CRD IV).

Economic governance—Two pack

Ministers will seek to agree a general approach on two regulations, which are intended to strengthen fiscal discipline and financial stability in the euro area.

Credit Rating Agencies

The presidency will update Ministers on the political agreement reached on the credit rating agencies 3 (CRA3) dossier.

Macroeconomic Imbalance Procedure—Commission annual report

Ministers will hold an initial exchange of views on the alert mechanism report, the first stage in the macroeconomic imbalance procedure.

Annual Growth Survey 2013

Council will hold an initial exchange of views on the annual growth survey 2013.

Issues related to the Economic and Monetary Union

Council will hold an exchange of views on issues related to the economic and monetary union.

Implementation of the Stability and Growth Pact

ECOFIN will seek to adopt Council decisions relating to Greece’s excessive deficit procedure.

Financial Transaction Tax (FTT)

The presidency will brief Ministers on the state of play as regards a proposal for a Council decision authorising enhanced co-operation in the area of FTT by some member states. The UK will not participate in an enhanced co-operation FTT.

VAT Quick Reaction Mechanism

Ministers will hold an orientation debate on a proposal for amending a directive on the common system of value added tax as regards a quick reaction mechanism against VAT fraud.

Annual Report of the Court of Auditors on the implementation of the budget for the financial year 2011

The President of the European Court of Auditors, Mr Vitor Caldeira, will present to Ministers the annual report of the Court of Auditors on the implementation of the budget for the financial year 2011.

HM Revenue and Customs

Monday 3rd December 2012 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The vast majority of people and businesses pay their fair share of tax. However, the Government are fully committed to clamping down on those who avoid or evade paying their tax. The Government are today announcing a series of actions that are being taken to tackle tax avoidance and evasion through domestic and international action: new investment in HM Revenue and Customs (HMRC), further developments on progress internationally and more powers that will underpin the Government’s commitment to tackle avoidance and evasion. These announcements come ahead of the Chancellor’s autumn statement on Wednesday 5 December.

New funding for HMRC

The Government are already investing over £900 million in HMRC to secure an additional £7 billion of revenue a year, taking HMRC’s total compliance revenues to £20 billion in 2014-15. A further £77 million will be provided to HMRC in this spending review period to further expand its anti-avoidance and evasion activity focused on offshore evasion and avoidance by wealthy individuals and by multinationals. This investment will secure a further £2 billion in 2014-15, £22 billion in total. This is 70% higher than in 2010-11.

As a result of this new funding, HMRC will:

Accelerate work to identify and challenge multinationals’ transfer pricing arrangements and further strengthen its risk assessment capability across the large business sector. That will help to ensure that multinationals do not shift profits out of the UK, and therefore pay the tax due in accordance with UK tax law.

Expand its affluent unit with 100 extra investigators and additional risk and intelligence staff to target avoidance and evasion by the wealthy. Increasing the number of specialist personal tax inspectors to tackle offshore evasion and avoidance of inheritance tax using offshore trusts, bank accounts and other entities, focusing in particular on the agents and tax intermediaries involved.

Increase capacity to tackle aggressive avoidance schemes, including long-running cases involving partnership losses by creating a settlement opportunity that offers a good deal to the Exchequer and accelerating litigation against those that fail to take up the settlement opportunity.

Create a new “centre of excellence” to develop a comprehensive approach to tackling offshore evasion. The team will be made up of HMRC staff and external experts who will look at how HMRC can best use data to identify offshore tax evasion, review HMRC’s legal powers and work with other tax administrations to close the net on offshore evasion. A comprehensive strategy on offshore tax evasion will be published in spring 2013.

Improve its risking technology, including increased use of third-party data. HMRC have today published “Closing in on tax evasion: HMRC’s approach” which sets out how HMRC are using technology to tackle those who break the law through tax evasion.

Agreement with US

A groundbreaking agreement with the US—the UK/US agreement to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA)—will significantly increase the amount of information automatically exchanged between the two countries. The agreement sets a new standard in international tax transparency and will further enhance HMRC’s ability to tackle offshore evasion. The Government will look to conclude similar agreements with other jurisdictions.

Action to tackle the promoters of tax avoidance schemes

Over the summer the Government published a consultation document, “Lifting the Lid on Tax Avoidance Schemes”, on a wide range of proposals to increase information about tax avoidance.

The consultation involved constructive engagement with a large number of representative bodies and businesses. It also demonstrated very strong support from mainstream tax advisers for new measures to crack down on those who market tax avoidance schemes. In response, the Government will bring forward proposals to introduce significant new information disclosure and penalty powers that will go further than existing, general rules on the marketing of financial products and consumer protection. The new powers will allow HMRC to better target the marketing of tax avoidance schemes that pose a high risk to users and the Exchequer.

The Government will also strengthen the existing disclosure of tax avoidance schemes regime through legislation in 2013 that will extend the range of information that must be disclosed to HMRC and impose additional sanctions for non-compliance.

The introduction of a general anti-abuse rule (GAAR)

In December 2010, the Government asked Graham Aaronson QC to lead a study that would consider whether a GAAR could deter and counter abusive tax avoidance, while providing certainty, retaining a tax regime that is attractive to businesses, and minimising costs for taxpayers and HMRC. The GAAR the Government are now introducing will provide a significant new deterrent to abusive avoidance schemes and strengthen HMRC’s means of tackling them where they persist. Guidance and draft legislation on the GAAR will be published in December.

Grand Committee

Monday 3rd December 2012 Grand Committee

Monday, 3 December 2012.

Enterprise and Regulatory Reform Bill

Monday 3rd December 2012 Grand Committee

Committee (1st Day)

15:30

[The Deputy Chairman of Committees (Lord Bichard)]

My Lords, welcome to the Grand Committee on the Enterprise and Regulatory Reform Bill. If there is a Division in the House, the Committee will adjourn for 10 minutes.

Clause 1 : The green purposes

Amendment 1

Moved by

[Baroness Worthington]

1: Clause 1, page 1, line 6, leave out paragraph (b) and insert—
“(b) the advancement of initiatives with the purpose of facilitating significant improvements in natural resource efficiency and energy savings;”

[Baroness Worthington]

My Lords, we should remind ourselves why these green purposes are so important. This bank has been set up in order to facilitate investment into green projects and to help the UK to move to a low carbon economy. The definitions set out in the Bill will be the guiding principles by which the bank operates. The bank could definitely be sold off in the future; there are provisions in the Bill to enable this to happen, so these governing principles are very important and must pass the test of time.

The amendment would introduce two changes to the Government’s proposed wording in Clause 1(1)(b). First, a test of significance would ensure that projects showed a significant advancement in resource efficiency or energy saving. We believe that this is important not because we do not trust the bank but, as I say, because of how it may change and develop in the future. The test of significance would prevent projects qualifying legally for support from the bank which deliver only a very marginal improvement in any project. It is not beyond the imagination to see that under these definitions of purpose you could secure support and funding for a very marginal improvement in the efficiency of a coal-fired boiler, for example. That is not the sort of investment I think the Government are seeking; therefore, this part of the Bill needs tightening for the avoidance of doubt.

It might be argued that this is illogical and that we will not see a bank that is called the Green Investment Bank investing in coal-fired projects. I have an example of how things can go quite illogically wrong when dealing with climate change and greenhouse gases. The global carbon market has an investment facility called the clean development mechanism, under which it is perfectly legal and possible to invest in slightly more efficient coal-fired power stations in India to allow for European coal-fired power stations to carry on emitting. When we get into the world of sustainability, climate change and emissions reduction, things can get a bit illogical. It is important that a lot of attention is paid to these definitions and that we get them right.

The second change proposed in the amendment is to add a specific reference to energy savings. A very strict interpretation of natural resource efficiency might preclude energy efficiency from electricity. Electricity is not a natural resource, it is manmade. Again, we want to make sure, for the avoidance of doubt, that the bank is set up to focus on electricity and energy saving. We know that this is true because, of the five areas identified in the bank’s objects, two are about energy efficiency—one for commercial entities and one to support the Green Deal. They are very important for electricity efficiency, and we are not convinced that the provision fits well with this definition. So we encourage the Government to reconsider the wording of subsection (1)(b) on natural resource efficiency, because we do not think that it does what the Government want it to do.

Finally, I have two questions for the Minister: what is his definition of,

“efficiency in the use of natural resources”?

Secondly, will he undertake to amend the wording to make sure that energy saving, in particular electricity savings, are included under these purposes?

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

My Lords, here we go. We have nine days in Committee— I work it out at 36 hours—and what a way to start. What a pleasant surprise it is for me that the noble Baroness, Lady Worthington, is dealing with this amendment. I moved department to get away from her incisive grilling, but it has come back to haunt me. Nevertheless, I welcome very much seeing her opposite me as she is much better looking than the noble Lord, Lord Adonis.

As always, this Bill will leave this House much better for the great interrogation that this House will give it, and I want to say in advance how grateful I am to all noble Lords for the time that they are about to dedicate to this. I also thank the Opposition for their co-operation throughout this process, the officials who are in serried ranks behind me and of course my noble friend Lord Attlee and others who will be in his place and will have to listen to this response.

The noble Baroness poses an extremely reasonable question and I compliment her on her great knowledge in this field, almost unrivalled in many ways. We have obviously had discussions on this issue with the chairman, the noble Lord, Lord Smith of Kelvin, and I would like to read out his views on it from the Second Reading debate because I think that it sets a framework for what we are going to talk about today. He said:

“We know that we are going to be held to very high standards on green issues in both the investments and our own operations. We welcome the requirement to report on carbon emissions and the positive impact that our investments should have on reducing UK emissions. We will go further than the requirements of quoted companies by reporting in detail on our portfolio. We will also take the long-term view and have regard to the work of the Committee on Climate Change. I ask noble Lords for support for the Government's broad definition of ‘green purposes’. Waste and recycling—for example, anaerobic digestion—can have a positive impact, and it would make the Green Investment Bank’s task more difficult if there were changes in our mandate by a narrowing of the green definition”.—[Official Report, 14/11/12; cols. 1528-29.]

I think that I could stand here all night and make a case for this, but I could not do it better than the chairman himself, who has been appointed to run this independent bank. On that basis, I ask the noble Baroness to withdraw her amendment because I think the noble Lord has said everything that needs to be said.

[Baroness Worthington]

I thank the Minister for his response. I am slightly perplexed as I do not think that the quote from the noble Lord, Lord Smith, really address the questions that I have raised. We would agree with his point about not wanting to narrow the definition. It is important that we give ourselves flexibility, not least because we hope that this bank will be around for a long time. Things will change during the time that it is around and we do not want to overly constrain it. We are suggesting not to narrow the definition but to make it slightly more specific in its wording. I hope that that can be taken on board. If it is narrowing, it is only to add a test of significance, which, I think, is a legally important word that we should not dismiss lightly. So I am happy to withdraw the amendment, but on the basis that perhaps we could think about these two questions a bit more carefully. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2

Moved by

[Lord Mitchell]

2: Clause 1, page 1, line 11, at end insert—
“(3) In undertaking investments in accordance with the green purposes outlined in subsection (1), the UK Green Investment Bank will identify opportunities in which small and medium-sized enterprises may be awarded contracts.”

[Lord Mitchell]

My Lords, I stand here in some trepidation, having heard the comments that the noble Lord, Lord Marland, made to my noble friend. I dread to think what he will say about me. Even before I had the position of shadow Business Minister, I have spoken consistently on the subject of SMEs, on how important they are to this country and on how they require certainty, clarity and consistency. That is very important as regards their ability, in the future, to make a contribution to the growth of this country.

By way of a statistic, the UK has slipped from third position to seventh in world green technologies and I hope, with the introduction of the Green Investment Bank, if it is properly constructed, that we will be able to do better in this vital industry. The Green Investment Bank should be an opportunity to help SMEs explicitly. I shall come back to that a little later but it is really important that SMEs—not just large companies—are helped in this. In addition to its green obligations, it is important that there are investment obligations that are vital to its work. A key part of its remit is boosting growth and creating jobs in the UK economy. Time will rightly be spent talking about the policy and the fact that large companies need to make investments in our transition to a large green economy.

That was evidenced by the letter from seven of the world’s largest energy and engineering firms to the Prime Minister, the Chancellor and the Secretary of State for Energy and Climate Change, a couple of months ago—companies such as Siemens, Alstom UK, Mitsubishi Power Systems, Areva, Doosan, Gamesa and Vestas. However, the importance of SMEs to economic growth cannot be underestimated. According to the European Commission, 85% of net new jobs in the EU, for example, between 2002 and 2010, were created by SMEs, with 23 million SMEs accounting for 75 million jobs in the EU. The Bank of England has recently released figures on funding for lending and today there are a few quotes in the Financial Times, one of which came from Mark Swift who is a spokesman for EEF, the manufacturer's trade body. He said,

“The challenge remains for UK lenders to re-engage with SMEs and support them with their investment plans in challenging economic times”.

John Walker, chairman of the Federation of Small Businesses has said,

“What is needed is more competition and choice for small businesses to access finance”.

Time and time again, it is made clear that support for SMEs is key. We would like to see the Green Investment Bank have SMEs in forefront all the way through.

More investment in SMEs could lead to a significant saving in capital investment costs. In the case of offshore wind, recent research suggests that capital expenditure costs could fall by more than a third during the course of the next decade if more of the components were made in the UK. SMEs face considerable start-up costs, but an active Government, working with the private sector, could remedy that. The Green Investment Bank has the potential to enhance green supply chain possibilities, opportunities and capabilities. As we have discussed many times, SMEs are struggling for investment in the current climate, with negative net lending to such companies since the second quarter of 2011. While demand is down due to the depressed economy, there is clearly a problem with SMEs not getting access to credit. A particular bugbear of mine is that perhaps the Green Investment Bank could insist that everyone it deals with and everyone it invests with has a clear mandate for prompt payment of invoices. Nothing is better for an SME than knowing that it will get its money.

Last year’s Lords Science and Technology Committee report on public procurement as a tool to stimulate innovation also made it clear that SMEs still face difficulties when government contracts are put out to tender. We should ensure from the outset that the GIB has a responsibility to help SMEs be part of the new green economy. This amendment encourages the Green Investment Bank to support investments that offer clear opportunities for British SMEs to be awarded contracts. Does the Minister share our support for the promotion of SMEs? I beg to move.

15:45

[Baroness Turner of Camden]

My Lords, I support what my noble friend has just said in relation to Amendment 2. It is often contended that I do not care about SMEs and that I care only about employment rights. That is not true. From the standpoint of the provision of employment, it is important that SMEs are protected. The Government ought to support this amendment as it offers SMEs protection and support. One of the reasons why they are not always able to offer employment is because they do not get the money—they do not get the contracts. This provision seeks to ensure that everything possible is done to make sure that SMEs get the money and the opportunity to play the part that many of them want to play in the provision of employment. They can do that only if they have the necessary contracts and support indicated in Amendment 2. I hope that the Government will accept the amendment.

[Lord Cotter]

My Lords, I also support the thrust of the amendment of the noble Lord, Lord Mitchell, particularly as regards SMEs. I welcome his comments regarding SMEs’ concerns around the payment of debts. The Minister will know that I and others have often raised this issue. It is important for SMEs to be directly involved but, where contracts are awarded to large contractors, small businesses have an important role in supplying those large contractors. To follow on from the point the noble Lord made about late payment, will the Minister once again renew efforts to ensure that main contractors pay their bills to SMEs on time and in due order?

[Lord Bates]

I, too, welcome this amendment but I have some questions about it on which I would like to put down some markers to which I hope the noble Lord, Lord Mitchell, and the Minister will respond. My questions concern the use of the term “SME” and how we define a small and medium-sized enterprise. That definition differs in different parts of the world. For example, the European definition of a small enterprise is one comprising between10 and 50 employees and a medium enterprise is one comprising between 50 and 250 employees. It would be useful to know what definition the noble Lord is using to define small and medium-sized enterprises, particularly when we discuss clauses further down the track. The businesses that I call micro-enterprises, which are defined in European terms as having below 10 employees, are the ones that really need help in accessing finance and are struggling at present. Therefore, it would be helpful if the noble Lord told us the parameters and the definition of enterprise that he is using when he is talking about SMEs.

Secondly, I wonder whether the amendment achieves the ends that the noble Lord, Lord Mitchell, seeks. We are talking here about incredibly capital-intensive investments. I know from one of the first of these businesses that was established in my home area in the north-east of England—an anaerobic digestion plant—that you are talking about a capital investment of £100 million. These are huge sums which would be outside the reach of most businesses. Yet, as a result of the investment through the Green Investment Bank announced just a couple of weeks ago, the project will go ahead and there will be many jobs for micro-enterprises and SMEs in the supply chain, particularly in the construction and operation of that plant.

Those are two questions that I hope that the noble Lord will take as being not at all critical of his amendment, which seeks to help SMEs and have correct in asking for a definition of who it is that we want to help.

[Lord Marland]

My Lords, of course the Government are very committed to SMEs, and I know that the noble Lord, Lord Mitchell, who I can say lots of nice things about, is a committed and good advocate for their cause. The noble Lord, Lord Bates, put his finger on the pulse—it is about definition. However, I do not want to get too deep into definition, thereby tying the hands of the bank too early on in its endeavours.

It is clear that the great challenge for any Government at the moment is to get the SMEs going. I know this first hand, given that I am not only the Prime Minister’s trade envoy but chairman of UKTI’s Business Ambassadors Group. This is our challenge—the beating heart of Britain—getting the SMEs going. Therefore, in the context of SMEs, we have to look at what the Government are doing as a wider initiative, rather than be tied down. That is why we have established the Funding for Lending scheme, Capital for Enterprise, the Business Growth Fund, the Regional Growth Fund, and the Enterprise Finance Guarantee fund, which has already helped 18,000 SMEs. To a certain extent, it is working, because we have had the highest amount of new businesses established since records began. Some 460,000 start-up businesses have registered at Companies House in the past 12 months.

However, I completely agree that this issue is an enormous challenge. In fact, my noble friend is committed to this cause, as he is on late payments—an issue that is fundamental to SMEs. He tells me that his maiden speech was about late payments and commercial debt. He has a record of support for that case.

The noble Lord, Lord Cotter, has raised this subject a number of times in the Chamber. Therefore, do not get me wrong. The Government are completely committed to helping SMEs. That is why, for example, in procurement—one of the issues that I am involved with in government—we have insisted that 25% of government contracts should go to SMEs. An awful lot of work is going on. I do not want to be too prescriptive in this area of the Green Investment Bank, but it is totally focused on this issue and looks at each opportunity on its merits. Already, the bank’s smaller-scale funds for waste and non-domestic energy efficiency are already delivering investment for SMEs, such as the £8 million announced last week alongside a Teeside-based SME. Work is already going on to support SMEs.

With that in mind, I hope that the noble Lord will agree to withdraw his amendment.

[Lord Mitchell]

I thank the noble Lord for his statement and, indeed, I thank all noble Lords for their contributions to this debate. I take it as being broadly supportive of what we are trying to do. That will come out in further stages of the Bill, but I take great heart from what is being said.

I want to make two quick points. First, I cannot emphasise enough the importance of certainty, not just for SMEs but in the whole business environment. Certainty must be there. People are making decisions and, in the green area, these decisions are for longer periods than normal, particularly as regards the payback period and the intensity of those decisions. We must be clear on this, and I will address that issue later when I talk about borrowing powers for the bank. Secondly, of course we cannot tie the Government’s hands too much, but a definitive statement in the Bill on the need to invest in SMEs is important. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3

Moved by

[Baroness Worthington]

3: Clause 1, page 1, line 11, at end insert—
“(3) The Bank shall set out annual targets for the reduction in greenhouse gas emissions achieved by its investments.”

[Baroness Worthington]

My Lords, I am afraid that I am going to continue the theme that I started with the first amendment. These amendments are designed to make the purpose of the bank unequivocal. The amendments create a duty to assess the impact of the Green Investment Bank’s decisions on the Climate Change Act 2008.

The rationale for this is that, as we just discussed, the stated purposes under Clause 1 can be widely interpreted. That is not to say that they will be, but they can be. We are writing law and we ought to try to make it as future-proof as possible. We believe that, given that at the moment the scope includes a provision that the bank can fund increased efficiency of natural resources, we need something that is much more specific about the impact of the bank as a whole on our climate change targets. It would still be possible for the bank to go down an investment path, which would be taking us out of line with the trajectory of emissions reductions required under the Climate Change Act. That is the purpose for tabling the amendments.

Specifically, Amendment 4 makes an explicit link between the bank and provisions under the Climate Change Act. It sets out the context within which the bank operates. Yes, the Bill already states that one of the purposes is to reduce emissions, but it then goes on to water that down by talking about investment in natural resource efficiency. So for the avoidance of any doubt, we want a link created that makes it absolutely clear that the bank and our climate budgets are linked.

It is very important that we have that wider context because, if you look at this very narrowly, emissions reductions at the scale of a project or single investment are one thing, but then when you look at the totality of what the bank is doing, there ought to be an explicit link to the broader context. That broader context is the need to reduce our emissions, our legally binding targets and carbon budgets.

These are challenging targets and they require government as a whole and all government instruments to work in tandem to deliver them on time. Making this link with the bank helps fully to align the bank’s purposes with the meeting of those legal objectives.

The specific reference in the amendments requires a link to be taken into account of the advice from the Committee on Climate Change. This is important. Greenhouse gas reduction is a complicated business. It is very technical and we do not want the bank to have to reinvent wheels. There is a body of experts there and it would be wise to create a link between the two. For example, the bank may be thinking of setting itself greenhouse gas reduction targets, as was mentioned in a Guardian article recently. The CEO of the bank, Shaun Kingsbury, was quoted as saying he was going to introduce “transparent” measures for measuring CO₂ and the impact that the bank is having on CO₂. This is an area which will require quite a lot of technical understanding of various aspects of how you account for greenhouse gas emissions. The Committee on Climate Change is the leading source of advice on this and it would strengthen the bank’s position if it had an explicit link to that committee and had a duty to consider the advice created by the committee.

A specific example might be where we are trying to untangle whether investments are generating emission reductions that are additional or not under the terms of how you account for greenhouse gas reductions. Many of our sectors in the UK are covered by existing caps and existing regulations. Counting of those is not straightforward and we believe that there would be a great deal of merit in the advice that the Committee on Climate Change provides to the Government on these technical and quite complicated issues being made available to the Green Investment Bank and its board. I know that one of the concerns that the Government may have in accepting these amendments is that it might increase the likelihood of judicial review, but we do not believe that it is a genuine concern. Obviously, judicial review on procedural issues can be taken irrespective of these links here, and introducing the requirement for the bank to co-ordinate itself with the Climate Change Act would reduce the risk of JR. It would give the bank a clear procedure that it can follow and should give it good comfort that it is on the right track if it follows this procedure. So we hope that the risk of JR will not be the primary reason why the Government might seek to oppose the amendment. If the Minister does not believe that the amendments are needed, would it not be good to align the Green Investment Bank with the Climate Change Act? Perhaps he could say a bit more about that, because it is at the heart of the matter to align our legislation so that ultimately we achieve our objectives.

16:00

[Lord Teverson]

My Lords, before I speak to Amendment 4, I should say that it is a great pleasure to deal with a Minister who understands the area of energy and climate change, which part of this Bill deals with. He knows the area well, so I am sure that our debates this afternoon will be extremely productive. I also welcome the fact that the Green Investment Bank comes at the beginning of the Bill, because it is an important part of making growth really happen in this country.

I also commend the list of green purposes; individually, they are excellent in terms of greenhouse gas emission reductions, natural resources and natural environment, biodiversity and environmental stability. I could not write a better list myself. However, what we are trying to do here is to get absolute clarity over whether this is a list that includes them all or whether you can pick one off for investment, and ignore the rest. I very much interpret this—and I presume that this is how the Bill was drafted by the Government—as a way of ensuring that at least one is met, but not necessarily all the others. To have the whole list as obligatory would be unrealistic.

What I and the other co-sponsors of the amendment are trying to do is to tie it into the climate change elements—the carbon and other greenhouse gas reductions—as being a necessary part of the investment programme. I refer not to individual investments, but to the investment strategy and programme of the bank as a whole. That is why the amendment places a legal duty on the board to assess the impact of the bank’s investment strategy on the Climate Change Act, which is an absolute anchor point for all this work, and a mission of this Government and the previous Government in terms of that global challenge. It is also to ensure that there is a duty on the board to have regard to the advice and reports of the Committee on Climate Change. My noble friend Lord Deben is not here today, but I am sure that he would like the fact that we wish to pay particular attention to this independent body that was set up specifically to advise government in this key area. Furthermore, it is to prevent the board from adopting or amending an investment strategy unless it is satisfied that the implementation of the proposed investment portfolio will increase the likelihood of UK carbon budgets and targets being met.

I apologise to the Minister for the fact that the proposed new clause has so many subsections and is so long, but it anchors the bank and legislation not just to the advice of the Committee on Climate Change and its work but to the real area of greenhouse gas emissions and the Climate Change Act, which has broad consensus of all parties—as it did in the last Parliament and does in this one. I hope that in that way we can ensure that this legislation is absolutely fit for purpose.

My noble friend the Minister mentioned the remarks made by the noble Lord, Lord Smith of Kelvin, at Second Reading. I have huge respect for the noble Lord, Lord Smith, and I commend and congratulate the Government on his appointment; he is exactly the right person to do this. I would just suggest that perhaps post-appointment he might be rather keener to make sure that his board is not inhibited in any way in the decisions that it would like to make. I think that one looks at this in a slightly different way post-appointment, as chair of an organisation, from pre-appointment and as a member of the legislature. It is beholden on us to look independently, from a bird’s-eye view, to make sure that we have our purpose right. I am sure that the noble Lord, Lord Smith of Kelvin, is right in the vast majority of his remarks, but I think that here there is a need for a little more future-proofing of how operations might work, as I am sure that at some point in the long and glorious career of this bank there will be chairmen other than the noble Lord.

[Lord Marland]

My Lords, I have a sense of deja vu, thinking that I am still in the Department for Energy and Climate Change—where, of course, the Green Investment Bank was largely initiated, so I am extremely keen that it gets off on the right footing for that reason alone. I believe that my noble friend Lord Teverson, who always speaks so eloquently on the subject, actually answered the question that he posed himself. We could not have written a better list if we had tried. My concern is that we would get into definition overkill as we take this Bill through the House.

My noble friend mentioned that the reduction of carbon is not relevant on the individual investments, but it is at the top line. I would respectfully—I emphasise that word for the noble Lord—point out that it is the fundamental investments that will reduce carbon emissions. It is only at the top level—I see the noble Lord, Lord Oxburgh, sagely nodding his head—that you will achieve the carbon reduction. The Government are very heavily committed to this. It is no accident that the noble Lord, Lord Stern, was on the advisory board that set up the bank and that was advising at all levels. As a result of that, the noble Lord, Lord Smith, has made it clear that the bank will have a very high regard—as it should—for the Energy and Climate Change Committee because it is fundamental for the Government and for the future of the business. However, I exercise a word of caution, because there are important activities that are clearly green but do not necessarily reduce greenhouse gas emissions—for example, recycling and improvements in water quality. We would want this bank to invest in such activities, I am sure, but that would not necessarily reduce carbon emissions.

I have not mentioned a judicial review in my line of inquiry because I think it is far more important that this Committee gets this into the right shape rather than for it to be directed by a judicial review. However, the bank’s board has agreed—across the board—that the bank will voluntarily report on greenhouse gas impacts on its investments. This is in addition to the requirement for the bank to report on the greenhouse gas emissions associated with its own activities. So it comes as no surprise to all of us, after discussions with the noble Lords, Lord Adonis and Lord Smith of Kelvin, that it is absolutely at the heart of what the bank is doing. I hope that that gives confidence to noble Lords and I therefore respectfully ask them to withdraw their amendment.

[Baroness Worthington]

My Lords, I thank the Minister for his response. We do not doubt that many parts of government are fully on board with the need for investments to deliver low carbon economy to meet our Climate Change Act 2008 targets. However, it will not have gone unnoticed that this certainty is not shared by everyone in the Government. Unfortunately, there is an atmosphere of uncertainty about policy and direction of travel. There is a great deal of difference between taking strategy A or strategy B to meet our targets. We could go through a whole host of investments and incremental technologies or incremental shifts in fuels that we use, or we could go down a different path and take a far more innovative and cleaner route. The trajectory of emissions would be very different as a result.

Choices are available and the body that we have created to advise us on that is the Committee on Climate Change. We believe that there will be a great deal of benefit in having closer ties between the Green Investment Bank, which I hope will be a delivery agent and will start to get pounds spent and concrete poured, and the legal structures that we have in place that help us to determine the path that we shall take. That is the purpose of the amendment and I am happy to withdraw it.

Amendment 3 withdrawn.

Clause 1 agreed.

Amendment 4 not moved.

Clause 2 : Designation of the UK Green Investment Bank

Amendment 5

Moved by

[Lord Stevenson of Balmacara]

5: Clause 2, page 2, line 1, after “State” insert “has laid before Parliament a copy of the Bank’s articles of association and a statement confirming that she”

[Lord Stevenson of Balmacara]

My Lords, Amendment 5 stands in the name of my noble friend Lord Adonis who is unable to be present this afternoon for personal reasons. He will return for later stages of the Bill.

This is a probing amendment and it is one of a number of amendments in which we seek to engage the Committee in thoughts about how the public-facing aspects of the new bank can be best discharged, particularly in relation to Parliament. The aim of this amendment is to argue that, prior to designation, Parliament should have an appropriate opportunity to scrutinise the articles of association of the bank. It further makes the point that the scrutiny that needs to be done should be done by Parliament, and not simply by the Secretary of State, who is identified in the Bill as having responsibility. After all, we are talking about the document which sets out the various contentious issues in the management of the company, vis-à-vis the interests of the shareholders.

The main purpose of the clause that we seek to amend is to ensure that two key governance constraints are imposed on the bank in a way that is consistent with its status, which, as we know, is that of a Companies Act 2006 company, albeit one whose shareholding is currently owned 100% by the Government. Once those two conditions have been met, the Secretary of State may designate the bank by order. Designation will trigger the application of Clauses 3 to 6, including the power in Clause 4, for the Government to then fund the bank over the long term.

The first condition required for designation is that the Secretary of State should be satisfied that the bank’s statement of objects in its articles of association is drafted in terms that will ensure that the bank engages only in activities that contribute to the statutory green purposes that we examined when debating Clause 1. As is usually the case with a Companies Act company, the bank’s statement of objects frames the duties of the bank’s directors. The specific issue raised in this amendment is that as well as making a statement that the Secretary of State is content that the bank’s green objectives are being met in full, the articles themselves are laid so that Parliament can see them and discuss them.

I accept that the Companies Act structure is flexible and indeed it has allowed the Bank to be established even though the enabling legislation is far from complete. The chair, the noble Lord, Lord Smith, spoke about the bank and his role during the Second Reading debate in your Lordships’ House so we are aware that he is in place, and the bank was launched recently in Edinburgh.

So we have a rather complicated piece of constitutional positioning to get right. On the one hand, the operations of the bank have to be done under the Companies Act, and the institution will have a well understood operational framework to guide it. On the other hand, the body could not exist without government support and government funding, and with that surely comes accountability to Parliament. In effect, our amendment provides a constitutional limitation on the purposes and the range of the company’s activities, which allows Parliament its say, so that directors are directly aware of what the shareholders think. However, I have a few questions for the Minister on the implications that this amendment has for the rest of this clause.

16:39

Subsection (2) requires that the Secretary of State, and we think Parliament, must be satisfied that the Green Investment Bank's articles of association will ensure that it engages only in activities that achieve one or more of the green purposes set out in Clause 1. Subsection (3) sets out the important second condition that the Secretary of State must give the Green Investment Bank an undertaking that it will operate independently—the so-called “operational independence undertaking”—to allow the directors to carry out work and make investments without interference from the Government. Subsection (4) states that such an order may not be made unless the Green Investment Bank is wholly owned by the Crown.

The Government's helpful document, Update on the Design of the Green Investment Bank, states:

“The Department for Business, Innovation and Skills, via the Shareholder Executive (ShEx) will be the GIB’s sole shareholder”.

On page 21, the Government state:

“The GIB will initially be owned by the Government and will operate as a separate institutional unit at arm’s length and with full operational independence”.

I want to focus on the word “initially”. In the context of that document, and given subsection (4), is it the Government's express intention to sell shares in the Green Investment Bank, at any time? Can the Minister give us an idea about the sort of circumstances under which Crown ownership of the bank could be diluted? How does Clause 2(4) reconcile with Clause 4(1)? It might be helpful to the Committee if I explain that this latter provision states:

“the Secretary of State may, with the consent of the Treasury, give the UK Green Investment Bank financial assistance at any time when the Crown’s shareholding in it is more than half of its issued share capital”.

In addition Clause 4(3)(d) states that financial assistance is possible for,

“the purchase of share capital of the Bank”.

Will the Minister, therefore, say a little more about that, and explain the circumstances under which the Government would want to purchase shares in a bank which, according to legislation, they already own?

It may well be that the Government have no plans to sell the Green Investment Bank, but as was accepted in the other place, this Government cannot tie the hands of future Governments or Parliaments. So, again, it would be helpful if the Minister would confirm that there are, as far as he is concerned, no circumstances in which the Government would envisage such a sale.

Finally, I wonder if we can just get some words of comfort from the Minister on the question of getting long-term private investment into the green sector. It was openly admitted in the other place that enabling private capital to acquire shareholdings of the company would be a measure of the success of the bank. I assume, therefore, that that is why the legislation contains powers to enable the opportunity for the injection of private capital directly into the bank. But how does that give the market the confidence that the UK Green Investment Bank, currently “wholly owned by the Crown” will be an enduring institution? It was clear that one of the main determinants of success in this area will be convincing people in the financial and environment markets about the sincerity of the Government’s intention that the Green Investment Bank is here for the long term.

In trying both to eliminate the possibility that private sector organisations could by taking a stake jeopardise the designation of the bank, while leaving themselves some wriggle room so that some time down the track part-ownership of the bank could be sold, the Government may inadvertently have given the impression that the bank is not there for the long term. It would be helpful if the Minister could reaffirm the position as he sees it. I beg to move.

[Lord Brooke of Sutton Mandeville]

My Lords, I have a short technical question for the Minister and, conceivably, for the noble Lord, Lord Stevenson. It is concerned with the final word in Amendment 5: “she”. My recollection is that when we moved to having Secretaries of State as the title of those people who headed departments, it was so that “Secretary of State” in legislation could be interchangeable between departments. My interest is whether if you use the word “she” you run the risk of fracturing that particular arrangement or whether there is a convention contained in the use of the words “Secretary of State” that allows the gender to be circumscribed in that way.

[Lord Marland]

I thank noble Lords, especially the noble Lord, Lord Stevenson of Balmacara, for their words. The Government agree that there must be parliamentary scrutiny of the bank’s statement of objects and particularly in terms of its green purposes as part of the process of designation of the bank. That is why in another place we tabled an amendment to that effect. However, we do not believe that there is a need to separate out the statement by the Secretary of State. I will try to respond to the question asked by my noble friend Lord Brooke on the Secretary of State in a minute because with his years of experience in government—I am playing for time now—he knows far more about this particular thing than I would ever dream of knowing, but I will come to that in a minute.

The Secretary of State is satisfied that the bank’s objectives are consistent with the green purposes because Clause 2(2) already provides that he cannot lay a draft order before Parliament unless he is so satisfied. I am also happy to give noble Lords the commitment that the Government will make available to Peers and to Members of the other House a copy of the bank’s articles of association when the draft order is laid so that all can be made transparent.

The noble Lord, Lord Stevenson, asked about the sale of shares. This Government are committed to not selling the relevant shares but, unfortunately, this Government cannot legislate for a Labour Government, for example, if they wished to sell the shares. I am sure the noble Lord knows that better than I do. It would therefore be wrong to try to impose things on future Governments. We will be in power for a very long time, but just in case we are not, the Opposition may choose to change the law if they come to power.

As a general point on outside investment, one of the things I have noticed as I have travelled the world is the clear desire of international companies to come in alongside the Green Investment Bank as co-investors because the integrity of the board that has been set up, its skills and knowledge and the leadership Britain has shown under this Government and the previous one in terms of green credentials and green expertise has meant that we are seen as a centre of excellence. If the noble Lord, Lord Smith of Kelvin, were standing here, I know he would say that there is huge scope for involving international companies to invest in the bank. I really do not think that that is a problem.

I have no idea what the response to the noble Lord, Lord Brooke, is, so, if I may, for once, I shall request the pleasure of writing to him about something which is not to do with cricket. I hope that with that explanation—

[Lord Stevenson of Balmacara]

Before the noble Lord sits down, I should make it clear that I was agreeing with him, as he has played it back to us, that the present Government cannot tie the hands of future Governments. However, my question was deeper than that. It was: why is there so much in this designation clause about the way in which the shareholding is to be managed going forward? The noble Lord has not dealt with that particular point. That was the purpose of my remarks on this section. We have a situation where currently this is a 100% owned company. The Government have made a great virtue of the fact that that is the case and, indeed, we welcome that. In his latest remarks, the Minister has alluded to the fact that the reason that investment may flow into the bank is precisely because it is owned by the Government and the investor community, for whatever reasons, is supportive of the view that it is the Government leading this that gives them the security and the risk reduction that they are looking for. We may come back to this on a later amendment. So why all this stuff about what happens below a shareholding of 50%? We are told in a later clause that the Government are not able to fund the bank if their own shareholding drops below 50%. Does that imply that there is a plan that we have not been told about, or is it just a precautionary measure in the event that terrible things might happen and other decisions are taken?

[Lord Marland]

I can deal with that immediately. It is a very good point. We have no current intentions to sell this—I absolutely underline that fact. We have no current intentions to do so during this Parliament as long as we are in power. I hope that that very clear statement satisfies the noble Lord. I readily understand that that has to be clear.

[Lord Stevenson of Balmacara]

I thank the noble Lord for those additional remarks and for saying earlier in his response that he would lay copies of the articles of association in both Houses when it comes to reviewing the designation process. We look forward to seeing them because they will help considerably.

I am afraid that I cannot respond very positively to the former Secretary of State, the noble Lord, Lord Brooke. I did not pick up this point when I was reading, but I am so completely gender-blind in these matters that I simply read the word as one that described, in a personal way, the Secretary of State for the time being. However, he will have noticed, as we all did, that throughout his response the Minister referred to the Secretary of State as “he”. Perhaps we have a problem that we should all reflect on.

[Lord Jenkin of Roding]

Perhaps I can help with this question. Since the 1880s, it has been a matter of interpretation of statutes, and I was certainly taught at law school that the male embraces the female. It has therefore always been said that you used the term “he”, which meant, in the appropriate context, “he or she”. The result is that statutes and, presumably, amendments do not need to use the words “he or she” each time. My noble friend will find when he takes advice on this later that it is a well established principle of statutory interpretation, if I may repeat it, that the male embraces the female.

[Lord Marland]

I am grateful to my noble friend Lord Jenkin of Roding for explaining that. In fact, it coincides with a note that has just been passed to me affirming it. There are two issues, of course. First, our current Secretary of State is a he, and, secondly, we refer to each other as, “My Lords”. I hope that that means I do not have to write to the noble Lord, Lord Brooke, on the subject—although I am always delighted to do so.

[Lord Brooke of Sutton Mandeville]

My Lords, I am most grateful to my noble friend Lord Jenkin of Roding. I was, in fact, previously aware of that. I was raising the question of why the word “she” had suddenly appeared. I did not wish to embarrass the Official Opposition by directing the question at them, so I directed it at my noble friend.

[Lord Stevenson of Balmacara]

My Lords, I agree that this is now a score draw. With that, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Clause 2 agreed.

Clause 3 agreed.

Clause 4 : The UK Green Investment Bank: financial assistance

Amendment 6

Moved by

[Lord Teverson]

6: Clause 4, page 3, line 10, at end insert—
“(f) a proportion of proceeds due to the UK Government as a result of the auctioning of emission permits under the European Union Emissions Trading Scheme.”

[Lord Teverson]

My Lords, I shall speak also to Amendment 11. Here, I am trying to be as helpful as I can be to the Minister in trying to find ways in which we can make this investment bank even more effective in finding ways of providing finance. We will come later to the arguments about lending.

There are two obvious areas where we could assist the Government and the board of the Green Investment Bank, when appropriate. I absolutely agree that the worst thing that we could do is try to shovel out through this bank too much money too quickly and allow it to lose its reputation in terms of investment appraisal and doing the right thing. It should build up that reputation over a sensible period. However, given the need in the United Kingdom for investment in green matters and energy, we know that £3 billion, although it is a lot of money to all of us, will not last indefinitely. We therefore need to start thinking ahead now. Two areas should be considered.

My first amendment refers to the European Emissions Trading Scheme. I remind the Grand Committee that there is a list in subsection (3), which states:

“It may in particular be given by way of …”.

We are not therefore talking about hypothecation of the ETS revenues. We are saying that this is one of the areas where the bank and the Government may look to facilitate funding of this bank. It is an extra piece of the armoury for the bank and the Government that could be, but not necessarily has to be, used—although I think it would be a very good idea. I remind noble Lords that the EU-ETS is coming to the end of its second phase. In fact, at the end of this month that phase will end and we will move into phase three. In phase two, the Government have already raised some £1.3 billion-worth in sales of so-called EUAs, or units of European Union—forgive me, I have forgotten what the A stands for.

[Baroness Worthington]

Allowances.

16:30

[Lord Teverson]

Thank you very much indeed. In fact, last month the Government already had their first auction of phase three allowances. They made £34 million and sold 6.5 million EUAs at €6.62 per unit—a terrible price in terms of carbon pricing but not a bad price, given some of the other prices that have been found. Unfortunately and regrettably, since then the price has fallen below €6. The German Government have sold some as well more recently and that price fell. There is an intention to auction in excess of 50% of these allowances in phase three and once auctioning starts, it seems that will be one of the ways in which the price will go up because the free issue has ended.

I would also hope that the Government’s intention to raise the bar on 2020 carbon reductions to 30% will be successful. That would also mean that the number of these allowances would decrease in the market. This seems to be an obvious revenue stream, some of which could be used towards reinvestment— I am not saying that it must be—of those carbon reduction revenues into green growth and into making sure that that whole process is reinforced.

I must apologise to the Grand Committee in that Amendment 11, on a second area, has a mistake in it. In subsection (3), at the very end, it should say Clause 1 instead of “section 1” and I apologise to noble Lords for that. I have been looking for a way in which, when the time is right, we could lever extra money into the Green Investment Bank without having all the effects of increased public debt, which is why the current £3 billion comes from asset sales. It means that there have to be other ways of finding that money, with all the borrowings, but the debt is not changed. As I understand it, it would be absolutely the same as for the Nuclear Liabilities Fund, which is currently worth some £8.6 billion. Again, this is a way in which the firepower of this bank could be increased quite substantially without the effect on public debt that other forms of fundraising might have. It would not require outside borrowing by the bank and would take over the trustees’ functions.

I do not know how many of your Lordships have read the excellent report by Professor Gordon MacKerron, Evaluation of Nuclear Decommissioning and Waste Management, which came out earlier in the year. I am sure that my noble friend the Minister was closely associated with it, given his responsibilities in that area. Very importantly, it makes the point that at the moment the vast majority of that £8.6 billion has to be invested in the National Loans Fund for a very low return. I would be interested to learn from the Minister whether he or his officials know what that current rate of interest is. Professor MacKerron was clearly particularly concerned at the low rate of return. On understanding the net present value of the fund’s existing liabilities, he said,

“though its current rate of accumulation is significantly less than the discount rate applied”,

which was 3% . He went on:

“Whether the fund will be able to meet all the … liabilities will depend on a range of factors (in addition to whether the current approach to its investment regime are maintained)”.

He questioned whether putting that cash into the National Loans Fund would maintain a sufficient value for the decommissioning costs of the existing nuclear fleet. There is a simple solution to that as well: the purpose of the Green Investment Bank is not only to invest in green infrastructure but to create a proper commercial return from its investments, so we have a double-win situation here. We increase the firepower of the Green Investment Bank quite substantially and also make it far more certain that the NLF will be able to meet its liabilities and not put the liability back on taxpayers, as would happen otherwise in future. So we have a double success. I beg to move.

[Lord Jenkin of Roding]

My Lords, I have some doubt about the proposed new clause of which my noble friend has just spoken. The Nuclear Liabilities Fund very properly seeks to avoid the situation that the country got into over many years when large numbers of nuclear installations of one sort of another were left to be decommissioned and their radioactive materials dealt with, and there were no funds available. One is always astonished at the huge amounts of money that have to be set aside to satisfy the obligations that are now being discharged to decommission these nuclear plants safely and effectively. My noble friend Lord Teverson may contradict me on this, but I believe that it is intended entirely to be confined to that purpose; it is intended to be there when it is needed and nuclear establishments come to be decommissioned. When my noble friend says that this increases the firepower of the Green Investment Bank, what does he mean? Is it intended that the fund should be invested in other green projects, which may or may not achieve the return expected when the fund was invested? I would have thought that that would risk defeating the purpose of the Nuclear Liabilities Fund.

The question of the rate of interest that should be earned on that fund is something that the Minister may wish to look at. I had not refreshed my memory of Professor MacKerron’s report, and I was grateful to my noble friend for reminding me what was in it. Of course, it is a very low rate of interest, as he has rightly said. But the fact of the matter is that this is a hypothecated fund; it is there for a particular purpose, and the idea that it could be used by the Green Investment Bank to invest in something else that might produce a higher return risks prejudicing the absolute and essential purpose for which it has been set up—namely, to meet the costs of decommissioning nuclear plants when they are available. I hope that the Minister will give some indication that he will look at this proposal in the proposed new clause with some suspicion, because I believe that it might be misconceived. I apologise to my noble friend Lord Teverson for putting it in that form, but I feel very strongly about this.

One of the best things that the previous Government and this Government have done is to make sure that future nuclear liabilities will not fall on the taxpayer but are regarded as a proper cost of those who invest in nuclear installations, power plants and so on. That is what it is intended to do. It is a very wise thing to do, and I hope that it will not be prejudiced by diverting it to some of the other purposes of the Green Investment Bank that noble Lords have talked about this afternoon.

[Lord Wigley]

My Lords, I apologise for coming in rather late, but I am in good time for the amendment that I wanted to catch up with, Amendment 11, and to follow on from the question regarding nuclear decommissioning. I live in a part of north-west Wales where there are two nuclear power stations. Trawsfynydd nuclear power station stopped generating two decades ago. It now employs some 600 people on decommissioning, more than it ever employed when it was generating electricity. The message that comes home from that is the uncertainty with regard to the cost of decommissioning and the length of time, and the need, therefore, to have financial cover for that.

This becomes particularly relevant with regard to the new reactor that is likely to be forthcoming with Hitachi at Wylfa in Anglesey. There is considerable support in Anglesey for the renewal of the nuclear power station. But the one reservation that people would have is if there were uncertainty as to the eventual decommissioning and the resultant costs arising from that station, particularly if in the private sector the company running it were to go out of existence. There needs to be a cast-iron guarantee with regard to funding for that purpose in order to maintain the good will towards the building of that new reactor at Wylfa. It is needed in energy terms and in terms of investment in the local economy in north-west Wales.

Therefore, the amendment goes to the heart of some very important aspects of nuclear power. Whereas I have a considerable amount of sympathy with the amendment in terms of the green bank and developing green alternative sources of electricity, that has to go on side by side with the nuclear dimension. Whatever settlement is finally reached it has to encompass both sides of that equation.

[Baroness Worthington]

My Lords, I welcome the amendments tabled by the noble Lord, Lord Teverson, if for no other reason than that they encourage us to have a wider debate about how this bank can operate and gain access to finance. This is important in the context that we need to see a huge upscaling of investment into the UK’s low-carbon infrastructure. It is estimated that between £220 billion and £330 billion is needed over the next decade, and historic levels of investment have been very low at only £6 billion to £8 billion. We need to be thinking creatively about how we can massively increase the available revenues for the bank. It is unfortunate in that context that the Government have set out on this path with at least one arm tied behind their back by preventing borrowing. We will come on to talk about that as we move through the amendments.

In the context of having set up a bank and putting a relatively low amount of money in to start, then putting in a hurdle against borrowing further, it is important for us to think creatively. In fact, it forces us to think creatively so I very much welcome the amendments of the noble Lord, Lord Teverson, which raise two very interesting ideas.

The EU ETS is a complex piece of legislation, but it creates a new asset class in that it creates allowances that have a financial value. I am not sure how they are managed because maybe that falls between DECC and the Treasury, but I suspect that we are not managing them as well as we could be. In addition to thinking about the revenues that we have gained directly from the auctions, how about thinking about the allowances themselves as assets that can be used to secure loans? They clearly have a financial value but as the noble Lord, Lord Teverson, suggested, sadly their value at the moment is low because we simply have an overabundance of these allowances.

I welcome the creation of the Green Investment Bank if for no other reason than it now means that we have a smart set of individuals drawn largely from the private sector—from banks and financial institutions—who I am sure can, if they put their minds to it, come up with various clever mechanisms for raising finance. I urge the Minister and his department to say to the noble Lord, Lord Smith, and his board, “Let’s think creatively and open up this debate. We have an emissions trading scheme that creates this asset class. How could we use it to increase the level of investment into the things that we want to see built?”.

On the second suggestion regarding the Nuclear Liabilities Fund, I share some of the concerns of the noble Lords, Lord Jenkin of Roding and Lord Wigley. But again, it shows we are thinking creatively. I understand that a financial fund needs to be available for the time of decommissioning, but the nuclear profile of our stations is fairly clear. We may have life extensions and we all know in advance when that money is needed. I do not see any danger therefore in using some of that to raise more finance and create wealth in the interim as long as we are managing it correctly. So I welcome the amendment; it opens up an interesting debate about how we currently manage money in government. Now that we have created essentially a Government-owned bank, I hope that over time and, as the noble Lord, Lord Teverson, was very keen to stress, when the right moment occurs, we will see this bank stepping into much more interesting territory. We look forward to the Minister’s comments on that point.

16:45

[Lord Teverson]

My Lords, as we are in Committee, perhaps I could come back on my noble friend Lord Jenkin’s important areas. I can reassure him on both those items that we would be better off if this amendment was passed. First, the MacKerron report is quite clear that the current rate of investment going into the National Loans Fund almost certainly will mean that its liabilities cannot be met, so we have to find another way to do this. The Green Investment Bank is not a fund to give away money; it is there to commercially invest, alongside other commercial investors. It could be perceived as being a greater risk perhaps—I will come on to why it is also a lesser risk—but also as providing a sensible return with a very sound government-backed institution to do the investment, and I think that is good. Furthermore, this fund has to invest its money in the National Loans Fund. That is a euphemism; what it actually means is that it has to give it all to the Treasury. So the Nuclear Liabilities Fund at the moment is similar to unfunded state pensions. It goes in there, but to take the money out will have the same impact as paying pensions into the future. While it is a discrete amount that is accounted for, it just reduces the national debt. That is all that it does on the current terms.

In fact, how secure is that? Yes, there is an accounting mechanism, and my noble friend is absolutely right that the sins of the past are huge in terms of those funds having been lost during the process of changes in the nuclear industry and its ownership over the past couple of decades. First, this amendment would make it far more certain that this fund will be able to meet its liabilities in the future. Secondly, we, as taxpayers and as citizens, would know that that money is in a place where we can actually see it, see its value, see that it is different and separate out of the Treasury from the national debt and, as the noble Baroness, Lady Worthington, said, we can predict decommissioning of nuclear plants far enough in advance to craft the investment and our exit strategies around those financial needs.

[Lord Jenkin of Roding]

As we are in Committee, I hope that I can say a couple of words about this. The nuclear industry is, of course, building up this fund as part of the Government’s policy to make sure that the liability for decommissioning does not again fall on the taxpayer. It has recognised this, and it follows the same pattern as one has seen increasingly in the offshore oil and gas industry, where funds now have to be put aside so that when the oil rigs are decommissioned, again that does not fall on the taxpayer but is part of the cost that has to be built into the supply of the oil or gas and therefore met by the investor. I think that my noble friend Lord Teverson may be confusing two matters. I use the phrase again: this is a hypothecated fund. It is not like the pension fund. There never was a separate fund for that. It is simply that the pension contributions from, for instance, the teachers’ pension fund have been paid to the Government, and the obligations are met, of course, by the taxpayer out of the fund. There has never been any question of trying to balance the one against the other. This is quite different. This is a fund that is being set up and funded by the industry. It has to be built up while plants are operating—not just when they are commissioned—so that, at the end, when they come to be decommissioned, which may be 50 or 60 years ahead, the fund is there. They have invested in it so the cost will not fall on the taxpayers. It is a separate, hypothecated fund. It may make the green bank look bigger because it will have more money but it cannot do anything with it other than get a rate of interest. My noble friend shakes his head, but if they are going to start investing in green industrial ventures and so on, it seems to me that that would be a breach of trust to those who have built up the fund. It may be that they can hold it and, as it were, guarantee the payment, but the minute that they start investing it themselves, it seems to me that that is risking the whole purpose for which the fund has been set up.

A separate issue is whether there is an alternative method of investing in the Nuclear Liabilities Fund that might get a slightly more realistic rate of interest. That is a separate matter, but it seems to me that to make it part of the loan capital of the UK Green Investment Bank would be a breach of trust, as I suggested, against the firms that are building this up perfectly properly. They agree, they recognise it, and they know that they do not want to go back to the previous position, but they want the fund to be available to finance the decommissioning of the plants when the time comes.

[Lord Marland]

My Lords, perhaps I can deal with this quite swiftly. Both the ETS and the NLF, the Nuclear Liabilities Fund, reported to me in my previous department so I have a rough idea of what is going on. Let us deal with the EUAs and the ETSs first. I also sit on the government assets committee and we looked at selling some of our EUAs. We drew the conclusion that the price was not right, the market was not big enough and we would not be able to get a substantial figure into the market. However, as the noble Lord, Lord Teverson, rightly says, an opportunity may come along later.

Clause 4 permits financial assistance to be provided in any form,

“as the Secretary of State, with the consent of the Treasury, considers appropriate”.

If we were able to do it and if—that is a big “if”—the Treasury agrees, the Secretary of State could divert funds into it. Amendment 6 permits the Government to use a proportion of revenues from auctioning emission permits to fund the bank. There is already provision within that.

This is creative thinking and I am very grateful to my noble friend for that because he is a great creative thinker. I turn to the Nuclear Liabilities Fund. Clearly, as the noble Lord, Lord Jenkin, quite rightly said, two things are going on here. One is that this is a fund that is committed to nuclear liabilities; it is committed to the nuclear industry and, therefore, it has a range of opportunities in the nuclear industry in which it could invest. The noble Lord, Lord Wigley, referred to Wylfa and other investments in new nuclear. I had discussions with the chairman of the NLF about developing the fund into nuclear investments, including, for example, a MOX plant, which is something that we were committed to when I was in the department and, indeed, new nuclear. That is entirely for the NLF to decide for itself.

The problem I have with the NLF diverting funds here is that this is an investment bank and it is what it says. There is no such thing as a guaranteed investment. Some investments go up and some investments go down and if the NLF lost money, co-venturing with the Green Investment Bank on things that it did not understand, of course the liabilities would not be met. Despite the fact that we may consider it a very boring return on the investment at the moment, it is planned to match some of the liabilities. But I do not want the noble Lord, Lord Teverson, to go away thinking that actually the NLF is enhancing its investments, but think that it has enough on its plate with the nuclear industry.

Therefore, given the commitments that I have made on Clauses 4 and 6, I hope that, despite the fact that two very important points have been raised—and I am grateful to my noble friend Lord Jenkin of Roding, who has expertise in this field—the noble Lord will withdraw the amendment.

[Lord Teverson]

I thank my noble friend the Minister for his response. I fully accept that the EU ETS money route is not precluded by the Bill as it is, and I suppose that it would be nice to have it on the list as a nudge or a reminder to the Treasury that it was a possible flow. That was all that the amendment did, but it would tie in well with the philosophy of the carbon market and trying to recycle money into helping the greening of the European economy and the UK even more.

[Baroness Worthington]

It struck me that the revenues from the EU ETS auctions would be considerable, even at this depressed carbon price. How much money will the auctions raise in the next few years, and how does that compare to the £3 billion that has been put up as a stake for the bank?

[Lord Teverson]

I read an estimate somewhere of about £1.3 billion a year. But it all depends on the carbon price. That is the key thing, and we do not know that.

[Lord Marland]

Perhaps I can help. It depends on the market, which is not there at the moment to buy it. We investigated and got a lot lower offer than £6.62 for the price. That is six months ago, and I cannot remember what figures were involved. I am sure that we could invite the Department of Energy and Climate Change to provide some information in the normal course. It depends on a willing buyer and the price at which they are sold.

[Baroness Worthington]

I have done some back of the envelope calculations, and at about 100 million tonnes it will be in the region of £1 billion or £1.5 billion. That is not an insubstantial amount of money, and it will rise in time, which would mean that the bank’s initial deposit was paid back by those auctions in less than three years. That is an important context for the discussion.

[Lord Teverson]

I thank the noble Baroness for her comments. It is certainly an area that I would like to come back to. I agree with my noble friend that putting all the Nuclear Liabilities Fund into the Green Investment Bank might not be the best way in which to spread the portfolio, although it would be even worse to put it back into the nuclear industry itself. That would be a bit like the Mirror Group reinvesting the pensions funds in itself, or whatever it did. The area needs looking at, and a broader investment strategy for the NLF that included a sensible investment in a bank like this would be a good way forward.

I will continue to look for opportunities to help the Government and hope that we can have further conversations about this—but I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

17:00

Amendment 7

Moved by

[Baroness Worthington]

7: Clause 4, page 3, line 10, at end insert—
“(3A) The Secretary of State shall consult on additional forms in which the Bank may raise investment funding, including the issuance of bonds.
(3B) The Secretary of State shall consult the Bank of England granting the Bank access to the Quantitative Easing programme.
(3C) The Secretary of State shall report to Parliament on the results of a consultation under subsections (3A) and (3B) no later than 12 months following enactment.”

[Baroness Worthington]

This, as noble Lords can see, is a probing amendment but continues on the theme. We are trying to address a market failure in the creation of this bank. There has been a financial crisis and, as we emerge from it, it is clear that commercial bank lending is going to be further constrained. The Basel III requirements will mean that the recapitalisation of banks will discourage them from holding longer-term loans on their balance sheets, which will potentially increase costs. That means a reduction in loans, just at the time when we need to see more money flowing into these solutions. Things are getting much more difficult.

In that context, it is important that we have a bank that can help to compensate for the increased constraints coming in the private sector. Yet, as I have mentioned, we have created a bank that, sadly, is constrained because it has a relatively small amount of starting capital. I am not saying that it is easy to spend money, and we should not just be seeking to spend it rapidly and not wisely. However, we must weigh up the scale of the challenge with what we are creating. It also forces us to think about how we are going to increase the leverage of that finance and ensure that it is seen to grow to the kind of levels that we need.

Our amendment is along similar lines to the amendment of the noble Lord, Lord Teverson, and talks about two other ways in which finance could potentially be raised. We would encourage the Government to consult on these. We are not saying that we have a final, detailed position on this, but these are fertile areas for exploration. The bond market is huge, as I am sure that noble Lords are aware. As yet, the bond market is largely untapped for low carbon investment because, by its nature, it is fairly conservative and seeks out asset classes with a long track record of delivery. Time is needed to develop new assets, and that requires expertise.

This is exactly what we hope is being created in the Green Investment Bank—a new set of experts who could help to create the sorts of asset classes that enable private-sector bond market participants to come in behind and start to invest in them. That is why we have tabled the amendment. There is no shortage of private sector investment looking for safe and credible investment vehicles. The fact that the bank is, under this legislation, a wholly owned non-departmental body is attractive, so this is an important area for it. There is a good fit here as regards bond issues; they tend to have a long lifespan, which is exactly what some of these infrastructure projects will have. By their very nature, it is infrastructure that will be here for a long time.

We therefore encourage the Minister to think about bonds as a mechanism for raising finance. In particular, I have learnt a reasonable amount today about covered bonds. This is an interesting mechanism that could help to raise finance without adding to the public debt. In effect, we would create a new class of covered bond, which would give comfort to investors by providing a double security on the loans. The UK’s covered bond legislation could be examined to see how it could be adapted to encourage investment in green and low carbon technologies.

The other matter on which we would like to consult is quantitative easing. That is also an obvious way in which we potentially could create mechanisms for a greater flow of finance into this bank. We understand that it is not the Government but the Bank of England that controls it, but we also know that there are close ties between them, and this area could also be very fertile and is definitely worthy of consultation. This is why we have tabled amendments on these important issues. I beg to move.

[The Deputy Chairman of Committees (Baroness Pitkeathley)]

Amendment proposed:

“Page 3, line 10, at end insert”,

the words as printed—but not quite as printed, because there is a typo in the fourth line. After:

“The Secretary of State shall consult the Bank of England”,

we need to insert the word “on” before,

“granting the Bank access to the Quantitative Easing programme”.

[Lord Teverson]

I had not noted that. Perhaps I should change my whole speech because of it.

The whole area of bonds issuance is important. In fact, it was looked at in some depth by the Environmental Audit Committee in the other place, together with green ISAs. It is a method, which I know the Government and the Treasury are very keen on, to use money from pension schemes in particular to invest in the UK and in areas of quick growth. Although I am sure that my noble friend the Minister will go through the whole question of whether these would be government-guaranteed bonds and the effect that would have on the public accounts, I believe that this is an important area of fundraising. It is one that could, with the length of investment in these sorts of projects, appeal very much to the pension industry and pension funds, which have large amounts of money, as we know, to invest successfully. This would be a good way of moving forward and I am sure that the Government have considered it a great deal.

I would like to ask the Minister whether the Government have thought further about the area of green ISAs and about involving not just fund managers and corporates, as one would do with bonds, but ordinary people to support the purposes of this bank. I note that some 18 million people have ISAs at the moment. That is one in three adults. Some £220 billion is invested by individuals in ISAs, which clearly have all sorts of tax breaks that are attractive to individual savers. Both these financial instruments could really make a difference in terms of the Green Investment Bank and green ISAs. You could get a public and personal commitment to this cause and create extra employment and growth in the UK.

[Lord Brooke of Sutton Mandeville]

My Lords, I have a small technical question. The Official Opposition indicated, in the noble Baroness, Lady Worthington, a clear understanding that it was the Bank of England that was consulted on quantitative easing, but I have a question for my noble friend. If he were so minded as to grant this amendment, would we need a consequential amendment in the context of the reference to the consent of the Treasury in subsection (4)?

[Lord Marland]

I am very grateful for this probing amendment, which goes back to the creative thinking on how we can get more money into the Green Investment Bank. The point is that we have committed to invest £3 billion up to 2015. That is a set figure and we have set out our stall. It has been agreed by the Commission and any change would require state aid, which is a pretty significant process and which would take time. So the allowance of bonds or ISAs, which are incredibly valuable things, will not, I am afraid, be achievable within the timetable up to 2015. For the purposes of clarity, however, we are interested in exploring this—and why would we not be? We will be looking at this and debating it further. Clearly, we are not going to get investment into this bank unless it starts to get a track record, which most bond and ISA investors would want to see. When the bank has its track record up and running, we will carry on with this.

Of course, we would need another amendment in terms of Bank of England quantitative easing and so forth. We would need an awful lot more than that, let us be fair, because it is way beyond my pay grade to start discussing such figures and such immense subjects of finance. I am grateful for the suggestions. We recognise that they are constructive and we would like to carry on the dialogue over time. With that, I hope that the noble Baroness will withdraw her amendment.

[Baroness Worthington]

I thank the Minister for his response. A consultation would certainly help to flesh out some of these ideas and may bring forward even more. I would encourage the department to really think about how we can start a creative dialogue about such mechanisms. We have had four in front of us today, which are worthy of discussion. They are big topics in themselves, so a formal process would help us to understand some of the issues.

It slightly worries me when I hear that quantitative easing is above the Minister’s pay grade. We are not doing a marginal thing here; we are talking about investment in UK infrastructure. We have seen government announcements about a £40 billion stimulus of investment into infrastructure. If it is £40 billion, why can only £3 billion of that be put into the Green Investment Bank? We should not treat this as marginal. It should be centre stage in our stimulus package and in getting our economy back on track. That is why £3 billion is not enough and why we need to think about ways of getting it to be a much larger sum. A consultation would be very welcome, thank you. I beg leave to withdraw.

Amendment 7 withdrawn.

Amendment 8

Moved by

[Lord Teverson]

8: Clause 4, page 3, line 21, at end insert—
“(7) It is the duty of the Secretary of State to provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.
(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.
(9) In the event the European Commission approves the State aid notification concerning borrowing, it is the duty of the Treasury and of the Secretary of State to permit the Green Investment Bank to begin borrowing from the capital markets no later than 30 June 2015, or, if State aid approval has not been received by that date, no later than one month from the date of approval.”

[Lord Teverson]

My Lords, now we get on to one of the core issues around the Green Investment Bank, which is its ability not just to lend its own capital or funds but to be able to multiply them up, perhaps in different ways, and to use that as leverage to enable it to be a bigger investor than it would be from its own resources. Of course, this rather comes back to that cliché of whether the Green Investment Bank is actually a bank or a fund. We know that any corporate plc can borrow money—that is its function—but what it cannot do without going through a further procedure is to borrow it and then lend it out as well, because that gets it into the area of financial services and the Financial Services Authority’s authorisation there.

This amendment seeks to recognise that there is a period during which this bank has £3 billion and has to earn respect through having a track record and credibility in its functions. My noble friend the Minister was absolutely correct on this. That is enough for it to get on with in the first couple of years. Yet we know, through the amount of time that it has taken to get to where we are on the Green Investment Bank, that decisions take a long time. To get state aid takes a long time. To get authorisation under the Financial Services Authority and its successors as they will then be—that may be the Prudential Regulation Authority for a bank—takes a number of years, so we have to prepare by thinking about those issues now. We cannot do that once we get to 2015. In this amendment, we are saying that by 2015 we need to start going through those procedures, many of which will not be in the Bill. Lots of other preparations will need doing as well, apart from state aid, to make sure that by 2015 the bank can take on extra firepower—I apologise to my noble friend Lord Jenkin if he does not like my using that word.

This is about the bank’s ability to invest and to change the economy; to get this green growth that we want and know to be available; and to deliver jobs, growth and carbon reductions. It will be able to do this only by being able to leverage extra investment, apart from the investment it will have from its co-investors of £3 billion in the first three years. I do not see how it will be able to fulfil its mission and proper function without being able to increase its ability to lend beyond the likely Treasury resources.

I realise and understand entirely the Government’s concern about the public balance sheet and public debt. The Chancellor has said that this borrowing cannot take place until the proportion of debt to GDP has started to decline. It is a fundamental mission of the coalition to do that. However, getting to the fundamental question, I would ask this particularly. When the Green Investment Bank was launched on 28 November, which was last week, I received a statement saying that it will make £3 billion available for green technology and become a valued and integral part of the UK’s financial infrastructure—absolutely. It goes on to say that it is similar to Germany’s own development KfW Bank. We hope so, although the KfW Bank has a €400 billion asset value. The big difference between the two is that the borrowing of the KfW does not appear on the public balance sheets, whereas it is envisaged that the borrowing of the Green Investment Bank, as it is currently structured, will.

17:15

It is important that we explore how we might find our way around this public expenditure constraint and manage it, so that we can move ahead despite that constraint. I would ask my noble friend the Minister what the current advice of the Office for National Statistics is in this area as to whether the activities of the Green Investment Bank will be part of the public balance sheet and what conversations have taken place there. All similar banks and institutions have to perform to European accounting standards—rule 95, I think it is. That is true of KfW and other investment banks, as well as the Green Investment Bank, so I do not understand why we are so constrained in the UK whereas with other European investment banks that is not the case. Why can we not apply standards that others do to that accounting standard? I am not asking for regulatory evasion but for regulatory avoidance in this area as it seems to be completely in the national interest, which is something that we like to defend, particularly within the European Union.

The fundamental part of this amendment asks how we can increase this bank’s investment ability for it to be successful and get the sort of growth that the CBI says is available through the green sector. A key way in which to do that is by borrowing on markets. We cannot wait beyond 2015 to do that. Unless we have an immovable public expenditure constraint—although I would argue that there might be another way of balancing that in other areas, and we have talked about some alternatives—surely we can find a way to get this bank correctly off the balance sheet as our European competitors are doing. I beg to move.

[Lord Skidelsky]

I support the amendment proposed by the noble Lord, Lord Teverson. I would have put my name down on it if I had had the upfront certainty that I would be able to be here. The noble Lord has hit the nail on the head; the bank will not be allowed to borrow until the national debt is a declining proportion of national income. The Government’s debt reduction target is already three years off, so on current plans the earliest date at which the bank would be allowed to borrow would be not 2015 but 2018—and it may not be 2018 either. We are faced with the prospect of a bank that will not be allowed to borrow in any foreseeable future, and that borrowing restriction will undermine the bank’s ability to support the targets for reducing greenhouse emissions as stated in the Climate Change Act 2008.

We are setting up a public bank uniquely without the ability to borrow, and the noble Lord, Lord Teverson, is right in saying that that is not the model for KfW. According to the Deputy Prime Minister, it should be able to attract about £15 billion of co-investment. In other words, the bank would pay 20% of a project and the co-investors stake the remainder without the bank itself having to borrow. That would be a way round the borrowing restriction.

If the Green Investment Bank were allowed to borrow now at a conservative leverage, it would be able to leverage its £3 billion up to £18 billion. If the Deputy Prime Minister is right, that £18 billion would in turn be able to attract up to £90 billion in private sector co-investment, so these are the possibilities that would be opened up by easing that borrowing requirement. There is a huge difference between an investment of £18 billion over five years and an investment of £90 billion.

The problem this amendment is designed to address is that the debt may not fall for a long time, so the Green Investment Bank may not be allowed to borrow. It is not just a question of the problems of start-up, to which the noble Lord, Lord Teverson, rightly alluded; the problem is that the Government’s policy is not well designed to reduce the national debt. I have argued this point for a number of years because a policy of deficit reduction is not the same as a policy of debt reduction.

To conclude, the amendment would enable the Green Investment Bank to borrow by 2015, irrespective of what is happening to the national debt, and potentially earlier if there were a need to boost growth. This means starting the EU state approval process as soon as possible. For that reason I give my enthusiastic support to the approach of the noble Lord, Lord Teverson.

[Baroness Ford]

This is a really interesting amendment, which also touches on the previous amendment. I am not sure that I support the amendment of the noble Lord, Lord Teverson, but not because I do not support its intent. I think it is hugely important that the Green Investment Bank, if it is to have any attraction, is better capitalised than the Government are proposing. However, allowing the bank to borrow is one thing, but you have to ask, who would lend to it?

Before I came into your Lordships’ House, I spent many years in the capital markets. The capital markets will not lend to this bank unless one of two things happens: either it is guaranteed by government—plainly, that is behind the Government saying that they have to wait for a certain period—or it has a strong balance sheet of its own. No one will lend to it just on the basis of thinking that it is a great idea in the same way that no one will buy a bond unless it is backed by a cash flow. That is what the bond market buys; it buys cash flows. It does not invest in speculative infrastructure, however worthy. Therefore, it is really important that we do not get carried away by just wishing that things were different, and that we push the Government to come forward with practical propositions about increasing the funding available to this bank. Until there is a track record there and until there are infrastructure projects that are capable of securing a rating from the rating agencies, there will be no bond issuance, and until it has a very strong balance sheet or the Government give a guarantee to underpin that balance sheet, there will be no lending from the capital markets either. I hate to pour cold water on this but we have to connect with reality here.

[Lord Teverson]

I thank the noble Baroness very much for that contribution. I should point out that the borrowings of KfW, which is owned by the German länder and the federal Government, are guaranteed by that Government and still manage to escape public sector classification. I thank the noble Baroness very much for bringing up that point, which I forgot to mention.

[Baroness Ford]

KfW is covered by the covered bond regime, which we do not have in the United Kingdom.

[Lord Oxburgh]

My Lords, I, too, support the amendment. I shall not detain the Committee by repeating the points that have been excellently made by previous speakers. It is simply worth pointing out that, because we are signatories to a variety of European constraints on emissions reduction and because we have our own Climate Change Act, inevitably there has to be massive investment in green infrastructure in this country over the coming decade. We managed to lose out almost completely, if you like, in the previous phase, when we saw significant investment in, for example, onshore wind in this country, where virtually all the high-end technology came from abroad. We really have to be ready to cope with this requirement for capital internally and in time.

I am sure that by the Minister’s bed he has a copy of the current, recently introduced Chinese five-year plan, in which he will remember that no less than a third of the objectives relate to energy management, energy efficiency, investment in renewables and low emissions technology. There will be a massive world market here, and we can drag our feet again or we can participate in it. I see this amendment, taking on board entirely the point made by the noble Baroness, Lady Ford, as simply facilitating and making sure that we are there in time. Brussels has many virtues, but speedy reaction is not one of them. Getting on with this now will not only begin to manage that problem but will indicate again to the capital markets that the Government are serious.

[Lord Skidelsky]

Perhaps I could reply to the noble Baroness, Lady Ford. Her point is absolutely right, but it is irrelevant. The purpose of the amendment is to allow the bank to borrow; it does not guarantee that the bank will be able to raise the money.

[Lord Bates]

Can I dissent from the amendment? I think that it goes against the whole point of the legislation. Indeed, it goes against the whole point of the Green Investment Bank, which is to stand in the gap of market failure within the capital markets in order to get projects up and running and off the ground. Where that is not possible, it provides a bridge or an intervention, but only so that private sector capital can come in. As an example of that, I mentioned earlier the first investment that had come in to Earthly Energy, the anaerobic digestion plant in Teesside. As I recall, the Green Investment Bank invested £8 million there. Immediately that attracted matched private sector investment of £8 million. The total value of the project is £100 million. That seems to be a classic example. To go from zero to £100 million, clearly they would not have been able to get the project off the ground, but that measured intervention of £8 million unlocked a project worth £100 million, which is exactly what the amendment proposed by the noble Lord, Lord Teverson, is trying to achieve. I am simply saying that it is already happening under the present regime.

[Lord Mitchell]

My Lords, we have had some very good contributions. In fact, my Amendment 9 just leads on from what the noble Lord, Lord Teverson, said, and we have a few additional points to make about it. First, I refer to what my noble friend Lady Ford has said on this subject; she has a lot of experience in this area and we should listen to her. We should also listen to the noble Lord, Lord Oxburgh. He has shown a lot of passion for green technology in this country and has said how important it is that we stop sitting around and get on with it. I hope that that is taken on board by this Government.

I suppose that what we are saying more particularly is that this Green Investment Bank has to be a real bank and not a sham. I do not think that it is going to be a sham, but it has to be a real bank with all the attributes of a real bank. Probably the most important issue before this Committee today is its borrowing powers. Without the capacity to borrow from the capital markets for investment, the bank is no more than a government fund. In fact, Transform UK has said:

“A bank that is not allowed to borrow cannot be described as a Bank, and investors will notice this”.

However, the amendment represents a compromise and takes into account the strain on public sector funding, and we would not therefore support reckless and irresponsible levels of borrowing.

18:20

The Bill has no provision for borrowing powers to be introduced and the Government have failed to provide the certainty that is required to encourage private investment. I return to the letter sent to the Government by Southern Energy and engineering firms, to which I referred earlier. They said that this matter is,

“critically dependent on a long-term stable policy framework”.

The managing director of General Electric has said:

“Our investment is on hold until we have certainty and clarity regarding the policy environment that we are in. One of the most important things for us is political certainty, so we can justify the business and investment case for a facility in the UK. But we think there are some [political] headwinds which do not help, especially in terms of … subsidies”.

I have already mentioned how important certainty is to investment.

The chief executive officer of Vestas, which is the world’s largest maker of wind turbines said:

“The most important issue that our customers have is a long-term policy framework—that is required to put in these investments, which are huge … [But] we have not had reassurance from the government”.

A firm commitment to borrowing powers is lacking and without it private investors will not be convinced by the Government’s rhetoric. This will remain the case, especially as the Government’s commitment to the green economy appears to be diminishing as this Parliament progresses. Seven energy firms have said that recent noises coming from the Government have caused them to reassess the level of political risk in the UK. Borrowing powers are therefore essential. Other amendments, such as that of the noble Lord, Lord Teverson, also recognise this.

It is worth emphasising why we are offering an alternative. The Minister in the other place has made it clear that the borrowing will be scored against national debt totals, and it is therefore reasonable to take this into account, although the aim is, of course, to get the bank borrowing as soon as possible. Should the bank feel that the state of public finances in April 2015 is likely to be such that it would not be suitable for the bank to begin borrowing, it could present Parliament with a report containing alternative dates and its reasoning behind it.

I think that this is a sensible compromise that will reassure investors, which is what we all want to do, and reassure the private sector, while recognising the need for fiscal prudence.

[Lord Marland]

My Lords, I say to the noble Lord, Lord Mitchell, that handwritten notes such as those that we old fogies use would be useful instead of modern technology. I am grateful to noble Lords for exploring this area. Clearly, those who have been in government and those who have read the papers know that we are in very deep financial straits. This Government have decided to start a bank against all odds, investing £3 billion in it in the next period, which is a tremendous achievement. We have been told to get on with it. We have done so and it is here before you now, with a chairman and chief executive in place who are getting on with it. On that point, I would like to quote what the noble Lord, Lord Smith of Kelvin, has said about the state of affairs. I am very grateful to the noble Baroness, Lady Ford, for her very constructive and practical comments. The noble Lord said:

“We need to show government and private capital markets that we are a well run organisation with a good track record worthy of the injection of more capital or, indeed, borrowing money in capital markets”.—[Official Report, 14/11/12; col. 1529.].

That is absolutely fundamental. No one is going to lend to this bank or provide borrowing unless it can show a track record of prosperity. I can promise noble Lords that if we feel the need to borrow, we will approach the stakeholder well before 2015.

On that point, the Government have given a commitment that we will seek state aid approval from the European Commission in respect of borrowing before the end of this Parliament. The noble Lord, Lord Skidelsky, very appropriately raised this. We have only just got this thing going but already we are starting to move forward. As the noble Lord, Lord Oxburgh, rightly says, it takes a long time to achieve these things in Europe but we are playing that game; indeed, we are ahead of it.

However, I mention a word of caution, as, indeed, did the noble Lord, Lord Smith. I think that the original budget of investing the first £775 million over the next five months will be difficult to achieve. However, I am confident that we can do it. It is not as if there is a whole load of stuff piling up to be invested in at the moment. Of course, we know there are investments out there, but the budget will be difficult to achieve in the first period. That shows that these things take time; it takes time to build up a track record; it takes time to build up confidence in the markets; and it takes time to build up co-investors, which will be the initial endeavour of the bank.

The noble Lord, Lord Teverson, asked about KfW. Rules are rules and the noble Baroness, Lady Ford, mentioned that we cannot do it in this country. I thank her for that. The UK’s boundary for public finance covers the whole of the public sector, including central and local government and public corporations. That reflects the approach of this Government and that of previous Governments. It is not something that we can suddenly do and in this piece of legislation we are not going to change the rules of engagement.

[Lord Teverson]

This is covered in European accounting standard 95. I do not see why we should put ourselves at a disadvantage in that interpretation compared with other nations within the European Union who are competing for the same capital. That seems to me to be tying our hands behind our back. We could use the example of changing the rules in terms of Lloyds and RBS as regards public balance sheets and how, with those banks, we made exceptions. I accept that this is rather different, but we have a track record that says that we can change things. I do not understand why it is possible for our competitors to be unchallenged by the European Court of Justice or the Commission in terms of state aid where we risk being seen as being subservient rather than proactive. I would not accuse the Minister of this—quite the opposite—but we do ourselves down by appearing to be supine in this area.

[Lord Marland]

I do not think that it is a question of being supine. This is a government decision that has been made by the coalition of which the noble Lord is a member. There are many things that people do not understand. The noble Lord, Lord Skidelsky, does not understand or agree with some of the policies of this Government, but that is government policy.

[Lord Skidelsky]

I understand it but do not agree with it.

[Lord Marland]

I apologise. It is good that my noble friend understands it, because then he will not disagree with it. That is the way that the Government have set out their stall. We have inherited a very substantial national debt, but not in the same way in which the Germans have inherited the same problems. We have inherited a grave financial situation and, quite rightly, the Treasury decided that it will not enhance that by further borrowing against our balance sheet. The evidence produced by the noble Lord, Lord Smith of Kelvin, would suggest that he does not feel under any pressure in terms of funds at this point. Of course, we must set out our stall, as I have said. We intend to seek European Commission approval for borrowing and we intend to follow that process as soon as possible. I think that is a very good sign and I am delighted that there is some agreement in the room that we are doing that. I invite the noble Lord to withdraw his amendment.

[Lord Mitchell]

Does the Minister have any thoughts about when this borrowing will come to pass?

[Lord Marland]

We have made it very clear that it will not come to pass before the end of this Parliament. That is what prudent people do. They say, “I am going to buy something and I am going to spend this amount of money”. We have said that we will spend only that amount of money, but we have said that we will spend $3 billion on this project, which three years ago did not exist.

[Lord Teverson]

Three billion pounds.

[Lord Marland]

Pounds, dollars, whatever you like. [Laughter]

[Lord Teverson]

My Lords, I thank my noble friend for going through this. Can I just say what I am not saying? I am not for a minute saying that we should immediately rush into this. I said in my opening address that the bank needed to have a track record and credibility. It needed to prove that it was good at what it does. However, one thing that we all know, whether you have been in business or, as the noble Lord, Lord Oxburgh, said, you are involved in the EU, you have to plan well ahead and start making provisions for the longer term. There is no better time to do that than when you lay down legislation.

I was being very understanding in terms of the debt problem. I am not talking about changing policy: I am talking about testing rules. All Governments try to get around rules, whether you call it PFI, PPP or whatever to get round public sector borrowing ceilings. I accept that. That is one of the reasons that we went into the coalition and I am delighted to have done so. However, that does not mean that we then accept everything that we are told to accept, although I know that that is not in my noble friend’s nature either.

This is fundamental to making this bank work. My noble friend mentioned matched funding. Yes it is true that there is already a considerable leverage, but that is a fund; the Regional Growth Fund does exactly that. That is why this would then be a green growth fund. However, it is not that: it is a Green Investment Bank. That is why, to get to our goal, we all need to find a way around this. This will be a really important area to explore constructively between now and Report. In the mean time, I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Amendment 9 not moved.

Amendment 10

Moved by

[Lord Stevenson of Balmacara]

10: Clause 4, page 3, line 21, at end insert—
“(7) The Bank shall set out as part of its investment strategy a target for the leveraging of additional private sector investment by 31 March 2015 and annually thereafter.”

[Lord Stevenson of Balmacara]

My Lords, we have just heard an interesting discussion about what the overall financing arrangements for the bank will be. I was struck by the comments made by the noble Lord, Lord Skidelsky, who is not in his place, that effectively the leverage on acquiring some form of loan finance will be about six times and the subsequent leverage by bringing in third-party investment would be a further five times. We are talking about a gap between the funds available within the bank of £3 billion, which is a huge sum, and we are grateful to the Government for finding that cash, but at a cost of £90 billion in terms of growth, jobs and SME support, which one has to bear in mind. So the amendment focuses on what seems to be the only possible way that we will fund support for the bank in terms of its investment by getting co-investment from third parties who might wish to join the bank, having signalled that these were investments that they wished to make.

Our attention was drawn to comments that were made when the bank was opened in Edinburgh the other day, which has also been referred to by other speakers in this debate. Speaking at the opening of the bank’s headquarters in Edinburgh, the Business Secretary said that the Green Investment Bank,

“will leverage private sector capital to fund projects in priority sectors from offshore wind to waste and non domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK”.

The Secretary of State for Energy and Climate Change, Edward Davey said that:

“The Green Investment Bank will help attract the capital required to allow the green economy to blossom, encouraging investors to market and kick-starting low-carbon and energy efficiency projects”.

So the aspirations are certainly there for this to be a very successful operation.

In the wake of the global financial crisis, it is obviously right that any financial institution now has the highest possible levels of transparency, accountability, scrutiny and banking ethics, so this amendment also aims to encourage the bank to publish a strategy in this area and hence to encourage others to add their investments with the bank.

17:45

I shall draw on a recently issued report by the IPPR on the Green Investment Bank, Do It Now, Make It Big. The authors argue:

“We are leaving a period of market fundamentalism during which it was assumed that markets would always work to allocate resources in the best way possible. There was no case for collective action … unless a specific market failure could be identified. Such failures were supposed to be exceptional … Even if a market failure was identified, it was best handled by attempting minimal interventions to regulate prices. Government failure was assumed to be more pervasive and deadly than market failure, so setting-up state institutions was”,

a definite no-no. However, we are where we are and clearly the Government see no problem in setting up an independent institution in this case, which must mean that they believe that the Green Investment Bank can achieve more than the Government themselves could do.

The case for green investment rests on the assumption that unless there is a collective decision to reduce national dependence on imported and increasingly expensive energy sources and to develop alternatives that emit less carbon, it is more than probable that investment on the requisite scale will simply not occur. Certainly, it is not occurring at present. Yet forecasting technologies and prices far into the future is extremely hazardous and so, in the current climate, private companies will hesitate unless there is clear policy leadership that is backed up by the commitment of state funds.

Policies that are not supported by cash and contracts are all too susceptible to change, leaving investors high and dry, so there is a bit of a quandary. It may well be true that there is no better time to undertake such investment than at a time of idle manpower when companies want to invest rather than to produce, because demand is so low, and when the cost of borrowing is very low by historic standards. Yet without government taking the lead, where is the policy certainty and the risk reduction that can come from such direct action? These are the points that I think my noble friend Lady Ford was alluding to.

On the plus side, the green bank is at arm’s length from the Government, which is essential if the bank is to take technical and commercial risks, something that is hard for the Civil Service to do. It can foster a necessary degree of pluralism in tackling the issues, as it can be agnostic on whether there is a right approach and it can support any well thought-out and prepared subproject that meets its investment criteria. It can thereby catalyse and harness the variety and ingenuity of the private sector. Yet on the negative side, the UK Government are committing only a small proportion of the estimated £200 billion needed in this sector— I think that is the largest figure I have heard—and have said that the bank cannot borrow for several years because they are giving top priority to reducing the deficit. As it affects co-investors, the risk reduction strategy cannot then be effective so will the private sector come in to fill the gap? If it does not, what is the Government’s plan B for this bank?

Clearly, the question of who will invest with the bank and how much is crucial. In the absence of government permission to borrow, this form of private sector investment in projects will be the only source of leveraged funding for the green bank going forward, so it is absolutely vital to know what is happening. Hence the need for the bank to,

“set out as part of its investment strategy a target for the leveraging of additional private sector investment by 31 March 2015 and annually thereafter”.

I beg to move.

[Lord Marland]

I am grateful for that landscape of the new bank and the large elements of agreement from the noble Lord in drawing his conclusion. To cut to the quick, this is obviously about how we are going to attract co-investment. In meetings with the noble Lord, Lord Smith—and with the noble Lord, Lord Adonis, who sadly is not with us but we have discussed this—he was very clear that this will not be a problem, as indeed I am because of a number of countries that I visited. There is a huge market out there. We had the Kuwait Investment Authority over last week, which was celebrating being in the UK for 60 years. It readily indicated that it would like to invest alongside us in the future.

On the timetable, I refer to the noble Baroness, Lady Ford, who indicated that she would agree that this is very much a matter of track record. No fund can set up shop and on day one expect to be deluged with investment, even if the board and chief executive are very well recognised.

[Baroness Ford]

There are two concepts here and it is important to get clarity. Track record is important for co-investing. The noble Lord, Lord Teverson, is absolutely right. At the moment, we have a green investment fund. The way to get additional leverage from that fund is by co-investing, and there have been lots of good examples in the past 25 years of different types of bodies doing that in the United Kingdom. However, track record is important for co-investing. However good your track record, unless you have established cash flows to sell in terms of a bond or balance sheet with government underpinning, you will not get borrowing. There are two slightly different concepts.

[Lord Marland]

I could not have put it better myself. In fact, I could not have attempted to put it as well as the noble Baroness did. It is absolutely clear, and it sets a clear mandate. We have already discussed this issue, and it will come up again, but I am confident that there will be co-investment. At this point, I see this as an enabler for co-investment. There are plenty of opportunities for green investment. I therefore invite the noble Lord, Lord Stevenson, to withdraw the amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for his comments and I share the support shown for the success of the bank. However, I remain puzzled as to how it will make the transformation from the little duckling that is alone to the wonderful swan that I am sure the Minister has in his mind as sailing calmly across the seas of international finance, sucking up investment from wherever it goes, flying off into the sunset with a raft of projects carefully tucked under its wings, and therefore being successful. I do not see that, and we will return to this matter.

[Lord Teverson]

Perhaps I may ask the noble Baroness about one matter. One of the things that I understand investment banks often do is raise bonds against projects. It is not a question of the recourse of liabilities to them; they raise bonds on the asset value of the project. There are ways of doing it in that way.

[Baroness Ford]

There are ways of doing it. I do not wish to detain the Committee and perhaps I should have a cup of coffee with the noble Lord to explain; I mean that in a helpful way. Bonds are raised against the cash flows from projects. They are raised against an infrastructure project only if the Government underpin it—hence, PFI.

[Lord Brooke of Sutton Mandeville]

I encourage the Minister to try to turn not a duckling, but a cygnet, into a swan. A cygnet, in banking and legal terms, would have a greater significance than a ducking.

[Lord Stevenson of Balmacara]

Perhaps I may respond. Since I joined your Lordships’ House, I have always been impressed with the noble Lord’s grasp on literature. I am a little surprised that he did not pick up my allusion to the Ugly Duckling.

[Lord Bates]

Perhaps the noble Lord, Lord Stevenson, would agree with me that given that this is one of the last chances we will have to discuss Clause 4, in the range of investment criteria or investment classes that can be made through the bank, whether they be grants or loans, if the objective is to achieve leverage, it would seem sensible for more emphasis to be placed on lending money at a given rate, rather than giving it away in the form of grants. Again, a preference should be given to equity finance because it would also be of potential benefit to funds in the long run as those investments come to fruition.

[Lord Stevenson of Balmacara]

My Lords, the noble Lord makes a very good point and, in an early start-up arrangement, the last thing you want to be doing is dissipating your hard-earned capital. You should be using it to recycle. However, that relates to the point we have been making, which is that leverage of about 30 times the investment is achievable, but we do not seem to have the support of the Government in that. However, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Clause 4 agreed.

Amendment 11 not moved.

Clause 5 : The UK Green Investment Bank: accounts and reports

Amendment 12

Moved by

[Lord Stevenson of Balmacara]

12: Clause 5, page 3, line 27, at end insert—
“(2) The UK Green Investment Bank must ensure that—
(a) all studies or assessments conducted in the preparation of a business plan, and their accompanying terms of reference,(b) all written correspondence exchanged between the Government Shareholder and the Board, and(c) all key operational documents, including internal working documents of the Bank relating to investment decisions,are made available on a website maintained in accordance with the requirements of this section, subject to the exemptions specified in subsection (3).(3) Information contained in documents required to be disclosed by subsection (2) may be withheld or redacted by the Bank where in the reasonable opinion of a qualified person—
(a) its disclosure would prejudice the commercial interests of any person (including the Bank),(b) its disclosure would, or would be likely to, inhibit—(i) the free and frank provision of advice to or within the Bank,(ii) the free and frank exchange of views within the Bank for the purposes of deliberation,(c) its disclosure would otherwise prejudice, or would be likely otherwise to prejudice, the effective conduct of the Bank’s business,(d) a claim to legal professional privilege or, in Scotland, to confidentiality of communications could be maintained in relation to it in legal proceedings, or(e) its disclosure—(i) is prohibited by or under any enactment, or(ii) would constitute or be punishable as a contempt of court, and in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.(4) The documents specified in subsection (2) must be made available on the Bank’s website or a website that is maintained by or on behalf of the Bank.
(5) Access to the documents specified in subsection (2) on the website must not be—
(a) conditional on the payment of a fee, or(b) otherwise restricted, except so far as necessary to comply with any enactment or regulatory requirement (in the United Kingdom or elsewhere).”

[Lord Stevenson of Balmacara]

My Lords, the purpose of the amendment is quite straightforward. I spoke under the last amendment about the need for transparency, accountability, scrutiny and banking ethics, and the importance that these now have, particularly after the last crisis. This is something that should apply to the green bank. It is the first public bank to be created in modern times, but it may not be alone, because we are aware that a British Investment Bank, or whatever it is to be called, is starting up. Therefore, we should be setting precedents for how it should operate as we go forward.

We suggest that the Green Investment Bank has the highest standards of transparency both for the shareholders and the general public, which means that we can have meaningful debate; assessment and scrutiny as to how the bank is being managed; its success in achieving its green purposes; the manner in which it arrives at investment decisions—and all subject to the important point of commercial sensitivities and considerations.

The amendment would ensure that all working papers and studies undertaken in the preparation of the bank’s business plan, as well as all written correspondence exchanged between the Government and the board, were made available on a website that was freely accessible by the public. We do not want to do anything that compromises the bank’s ability to make investments and consider matters of a sensitive and commercial nature; that is why the amendment is couched in those terms, to make sure that a full and frank discussion of views can still take place between the Government and the board, and that the bank can fully undertake its activities. I stress that we want the Green Investment Bank to have the highest possible standards of transparency, accountability and scrutiny to the public and other stakeholders.

It is true that the bank falls under the Companies Act 2006, and is registered at Companies House as a company with proper articles of association and so on, but our concern is not so much with historic reporting, because often these reports can be delayed for six to nine months, but with allowing debate and discussion. A good example of this would be the rules that the Government are putting in place to ensure that inappropriate bonuses and executive pay will be restricted. As the Committee will be aware, this Bill will change the powers of shareholders in deliberations on executive remuneration, although we do not think that it goes far enough, as we will come to later. This amendment will ensure that the bank will be different from other Companies Act companies in the sense that debate about appropriate pay and the Government’s role in that would be flagged up on the website, and there permit a wider debate before the mechanisms proposed in this Bill kick in. I beg to move.

[Lord Marland]

My Lords, this is an interesting amendment, but of course it goes way beyond the Freedom of Information Act 2000, which permits a great level of self-disclosure and obligations that the bank must apply to because it is wholly owned by the Government. So the information will be readily accessible as to bonuses and all the other things that the noble Lord reasonably requests. It is important that there is transparency in our current world of bonuses and directors’ pay, but we do not want to put an extra burden on an organisation that is already within the Freedom of Information Act. I hope that the noble Lord understands that and will perhaps withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, I do understand that and thank the Minister for pointing out how the Government are approaching this issue. I still regret that in some senses we are not taking advantage of how one could use a more engaged discussion with those who have responsibilities in this area, notably Parliament. Having said that, I will read carefully what the Minister has said. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendment 13 had been withdrawn from the Marshalled List.

18:00

Amendment 13A

Moved by

[Baroness Worthington]

13A: Clause 5, page 3, line 27, at end insert—
“( ) The Bank shall publish in its annual report what proportion of investments made in accordance with the green purposes outlined in section 1(1) shall be allocated to proven technologies, and what proportion shall be allocated to innovative technologies; and shall make a proposal for these proportions over its forward plan for the next three years.”

[Baroness Worthington]

My Lords, this amendment is designed to try to elicit a few more comments from the Government on where this investment will be targeted—perhaps on the spectrum of entirely safe commercially proven technologies towards the more innovative end of the spectrum. It is prompted by a report about the launch of the bank from the CEO, Shaun Kingsbury, who, I suspect, in an effort to try to begin the process of creating a track record for being a sensible investor, said that only safe and proven technologies would be invested in.

We are not critical of that as it makes sense, but in much of the literature about the setting up of the bank there is a discussion of the desirability of investing in late-stage innovation. We think that is important because it is about ensuring that this bank is doing something that is not currently done in the market: it is addressing a market failure. The balance between investing in already proven technologies and more innovative solutions is crucial to the bank’s identity and to its success. Obviously it should not operate in the realms of risky investment and venture capital investment but it ought to operate in a space that has perhaps been overlooked by traditional investors. In that way, it would be adding value to the existing market.

We have tabled an amendment which is designed to try to tease out this area of the bank’s operations to make the policy much clearer so that there is more transparency. It is worth saying a few words about where late-stage innovation might occur. It is clear that the Government are seeking to create a crowding-in effect rather than a crowding out effect. That is an interesting phrase and one that we should definitely seek to achieve. We do not want to be competing with existing private investments, but beating a path down which other investors can follow. That crowding in is linked with the concept of what is a late-stage innovation. The current list of technologies that the bank will be investing in is broad. There will be room for innovation among those categories that have already been selected, but there are other technologies that are perhaps not on the list, which is slightly regrettable. I mention wave and tidal technologies because that is an area where the UK could have a great potential to lead globally. We have exactly the right geography for these very important technologies, which are not yet commercially viable. We know that the policy is coming and we look forward to contracts for different mechanisms that might bring these technologies on. It would seem a shame to preclude those sorts of technologies from the list that the bank is looking at.

The amendment is asking for further clarity about where the bank will position itself compared with tried and tested technologies and more innovative aspects, which might play more to the UK’s strengths. We would welcome the Minister saying a few words about the bank’s attitude to that. Perhaps he could also talk about wave and tidal technologies as I think those are hugely important for the UK. I beg to move.

[Lord Brooke of Sutton Mandeville]

I assume that the noble Baroness’s proposal is born of previous literature. Could she tell the Grand Committee what proportion has been given to innovative technologies as against existing ones? We are an inventive nation. In other words, what kind of percentage does she envisage will emerge out of this plan?

[Baroness Worthington]

I do not have a number in mind. This is a newly created facility, which we have to explore. As there has not been a previous example of a bank like this being created in the UK, there is no precedent on which to draw. Perhaps we could look overseas. We have had examples cited from Germany; there are similar banks in Portugal, Spain and Holland; and the Australians are in the process of setting up their own investment vehicle. I do not have an answer, but I am sure that, with some study, the department could provide us with some guidelines or some examples from overseas.

[Lord Marland]

I am sure that the noble Baroness would agree that 20% would be a reasonable part of the bank’s investment. That is the right number because, as part of this agreement, the bank is permitted to make 20% of its investment in other sectors, a key one being marine energy, which I know is of great interest to the chairman. It was also of great interest to me in my previous department and is of great interest to the noble Baroness. It uses our great attributes of tides and waves. There is a lot of activity going on there. We have created marine parks, and I see this as a key future. As I said, the bank has 20% of its funds allocated to this area.

This is an interesting probing amendment. But where I would resist movement in this direction, other than giving confidence to the noble Baroness, is that if we start using words like proven technologies, I am not sure that we can create the right definition. We all understand what the noble Baroness means. Going back to the core of what the bank is set up to do, it is to demonstrate the ability to make both a positive return and a green impact. All those areas that the noble Baroness and I know well would certainly fit into this exciting new development. With that, I hope that she will withdraw her amendment.

[Baroness Worthington]

I thank the Minister for his comments, which were reassuring. I think that 20% sounds about right, but who knows? The most important factor, which should not be overlooked in our desire to create this pedigree and track record is that there will be times when we need to cut a path through otherwise unexplored territory. There is a market failure out there that this bank can address. By having a targeted, focused remit, I hope that it will find investment opportunities that others have overlooked. I welcome the comments from the Minister and I beg leave to withdraw the amendment.

Amendment 13A withdrawn.

Clause 5 agreed.

Clause 6 : The UK Green Investment Bank: documents to be laid before Parliament

Amendment 14

Moved by

[Lord Stevenson of Balmacara]

14: Clause 6, page 3, line 35, leave out subsection (2) and insert—
“(2) The Secretary of State must prepare and lay before both Houses of Parliament a report on the activities and investments of the UK Green Investment Bank.
(2A) The Secretary of State must lay a report before Parliament as provided for under subsection (2) within 12 months of the coming into force of this Act, and annually thereafter.
(2B) The report under subsection (2) must, in particular, include or contain information about—
(a) the investments undertaken by the UK Green Investment Bank during this period,(b) how the UK Green Investment Bank is achieving its green purposes as set out in section 1,(c) a value-for-money and efficiency statement,(d) the identification and management of risk in respect of UK Green Investment Bank objects and investments,(e) how the UK Green Investment Bank is not duplicating investments made in the markets, and(f) how the UK Green Investment Bank has applied the Main Principles as set out in the UK Corporate Governance Code.”

[Lord Stevenson of Balmacara]

My Lords, the main aim of this amendment is to firm up how and in what form the Secretary of State must prepare and lay before both Houses of Parliament a report on the activities and investments of the UK Green Investment Bank. The amendment is largely self-explanatory, but it may be for the benefit of the Committee if I raise one general and a couple of specific points.

As I mentioned before, relying on the reports generated under the Companies Act 2006 introduces significant timing problems, as these reports will be generally arranged for an AGM often some months after the year end. A report for Parliament, if it were different, can be much more up to date and therefore more relevant to those who have to discuss it. The focus of Companies Act reports are the stakeholders, mainly in conventional companies. These would be the dispersed institutional and private shareholders and not the public interest represented by Parliament. It is therefore sensible to recognise that, although initially the Crown interest will be the only shareholding interest, that will not be identical with the public interest, and different reporting might therefore be required.

Proposed new paragraphs (a) and (b) in the amendment would give Parliament a feel for the activity that the bank has been undertaking on the ground, and bring the reality of the bank's operations to life. It would be unusual for Companies Act reports to deal with specific investments in this way.

Paragraph (c) would assess the way in which the bank is achieving value for money for its investments, and draw parliamentary attention to value for money and efficiency—again an approach that would not commonly be found in company reports.

Unusually for institutions in the public sector, the bank will have to be familiar with risk in all its forms and across its investments, and the wider economic climate will also need to be referred to as well as the appetite that individual investors will have for risk. This is an important area that we think the report should deal with.

It would be of considerable concern if the Green Investment Bank were to displace investment already available in the market, which we have already touched on in our debate this afternoon. So a specific report in that area would be helpful in understanding how the bank was progressing, and in assessing how successful it was in the marketplace.

The final point brings us back to corporate behaviours, and assisting Parliament to judge whether the bank was addressing concerns on such matters as pay and bonuses and ethical behaviours more generally.

I hope that the Minister will accept that with this amendment we are trying to be helpful. We have some common ground in assisting Parliament in getting material which is better suited to its particular role. I do not think that that will necessarily come out of the companies’ reports and I hope that the amendment will stimulate those who have to prepare them to come up with more appropriate solutions for the reporting that is necessary. I beg to move.

[Lord Marland]

The noble Lord, Lord Stevenson, probes again—quite reasonably, if I may say so. I just want to make it clear that the Government, as the main shareholder—indeed, the only shareholder—will be holding it to account at every angle. Also, Clause 5 treats the bank as if it were a quoted company. Therefore it is subject to the Companies Act, which imposes three quite important criteria. First it will be required to produce a directors’ remuneration report, about which there will be more later in this Bill. It will be required to publish its annual accounts and reports on a website. It will be required to produce an enhanced business review, under which the directors must report on matters such as main trends and factors likely to affect the company’s business and environmental matters. We believe that that has enhanced transparency, public transparency, in addition to the watchful eye of government in terms of getting return on our investment. I hope that satisfies the noble Lord on what I consider a very important probing amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for his comments. It is nice to see that my rating has risen from being interesting to being quite reasonable in what I am suggesting. I will look for an A probably in sitting seven or eight, and perhaps even get an A+ at the end. I look forward to that. In the interim, I withdraw this amendment.

Amendment 14 withdrawn.

Amendment 15

Moved by

[Lord Stevenson of Balmacara]

15: Clause 6, page 4, line 9, at end insert—
“(5) The Secretary of State must make provision for an independent expert review of the performance of the UK Green Investment Bank.
(6) A review under subsection (5) must be prepared every five years following the commencement of this Act.
(7) An interim review shall be prepared no less frequently than every two and a half years.
(8) A review under subsection (5) must, in particular, include or contain information relating to—
(a) an assessment of the UK Green Investment Bank’s environmental performance in fulfilling the green purposes as set out in section 1,(b) an analysis of the main trends and factors likely to affect the future development, performance and investments of the UK Green Investment Bank,(c) macro-economic analysis, including assessments of demand in the UK economy and international factors likely to affect green investment and skills within the relevant industries,(d) assessment of the competitiveness of the UK Green Investment Bank in securing competitive advantage for the UK in green and low carbon economies relative to other countries, and(e) recommendations to improve the UK Green Investment Bank’s impact in fulfilling its green purposes in section 1.(9) A review conducted under subsection (5) must consult—
(a) The Secretary of State for Energy and Climate Change,(b) The Secretary of State for Environment, Food and Rural Affairs,(c) The Committee on Climate Change,(d) Ministers from the devolved administrations,(e) investors and interested parties, and(f) members of the public.(10) The Secretary of State, in the capacity of shareholder, must provide such information as they consider reasonable to enable the person or body undertaking the review to fulfil the requirements of this subsection.
(11) A review under subsection (5) must be published and laid before both Houses of Parliament.”

[Lord Stevenson of Balmacara]

My Lords, Amendment 15 brings to the attention of the Committee the suggestion that if the reports that are being received by Parliament are those which are mainly being generated within the Companies Act register of reporting requirements, there may be some gaps in terms of independent review. So the main purpose is to require such a review every five years following enactment, and also to have an interim report.

I am sure that the Minister will again argue that the bank will have sufficient to do under the Companies Act, and that, as a public company falling within the Freedom of Information Act, there is already a sufficiency of reporting requirements for the bank. He may argue that requiring any more might be regarded as otiose, but there are some reasons why I think the export report would be of value.

The rationale for setting up the bank is to bridge a gap in understanding between the investor community and those who wish to manufacture, develop and trade in the green technologies. Surely a periodic report of what the bank has been doing and how successful it has been in fulfilling its purposes, a check on its competitiveness and a review of the main trends and factors likely to affect its future performance would help bridge that gap and help improve the sector as a whole, leading to greater investment.

In a similar way the preparation of an external expert report would surely help the bank sharpen its performance and help improve its knowledge and understanding of the sector. It may well be that it has collected the best and the brightest to work within the bank, but, even so, whenever there is an external report, there always is more that is achieved because of the preparation for that reporting requirement than there is perhaps by actually going through the process. So in that sense it would be an assistance to the company itself.

Thirdly, the existence of such a report would surely assist those who would otherwise only be able to rely on the standard output of the bank under the Companies Act. With that, I beg to move.

[Lord Marland]

My Lords, this is an A+ amendment, without any doubt at all, something that I have never achieved myself. So much was I taken with this amendment that I invited my officials to contact the noble Lord, Lord Smith of Kelvin, as chairman, to consider this because I felt that it was such an A+ amendment, from an A+ man and an A+ male, that it was worthy of consideration. I hope it will satisfy the noble Lord that the noble Lord, Lord Smith of Kelvin, has made it clear that the board will undertake an independent review of its own performance each year from the end of its first full financial year in 2014. I hope that that satisfies what I thought was an excellent amendment, and I encourage the noble Lord to withdraw it.

[Lord Stevenson of Balmacara]

It is embarrassing to be praised so quickly, and so young. Of course, to be the very best of our universe you now have to go above A+ to A*+, at the risk of suggesting that there might be a further grade to which I might aspire.

[Lord Marland]

If the noble Lord is not satisfied, I can big it up even more.

[Lord Stevenson of Balmacara]

I shall play my cards slowly and see how we get on. The simple point that I was going to make was that the answer is exactly as I would like, and this will satisfy us in that respect. It is just a question of what will happen to the report in terms of public arrangements. Perhaps the Minister could reflect on having a further exchange with the chair of the bank to see whether it would be something that could be laid before Parliament. I do not think that it would need a formal discussion or debate, but it would be useful to have it in the Library at least, so that it is available. If he could confirm that at some point, we would be grateful. I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Clause 6 agreed.

18:15

Amendment 16

Moved by

[Lord Stevenson of Balmacara]

16: After Clause 6, insert the following new Clause—
“General disclosure requirements
(1) The Freedom of Information Act 2000 is amended as follows.
(2) In Part VI of Schedule 1, after “The Great Britain China Centre”, insert “The UK Green Investment Bank”.”

[Lord Stevenson of Balmacara]

This is my last appearance in the Committee on this occasion. I have risked the Minister’s wrath by suggesting that we need to think further about reporting, but I do not think that this one will be as well received—but I will have another go.

The Green Investment Bank is already covered by the Freedom of Information Act, and I accept that. It was discussed in another place, and I have read that discussion. But it stuck in my mind that there were two reasons why we need to revisit it. In the discussion in the other place, the Government said that they believed that the Freedom of Information Act, together with Clauses 5 and 6, ensure that the bank will be subject to appropriate, extensive obligations to disclose information and to report on its activities, which will ensure full transparency and accountability. I accept that, because the bank already qualifies as a publicly owned company under Section 6 of the Freedom of Information Act, which means that it is subject to the disclosure obligations that apply to public authorities. We also accept that, unlike most public authorities, not only is the bank subject to the Freedom of Information Act but it has additional, proactive reporting obligations under the Companies Act 2006, which will be enhanced by Clause 5. However, things may change. We had a discussion earlier on in Committee today at which the remote prospect of changes of ownership in the bank were raised. If those changes of ownership were such that the proportion of the bank owned by a future Government dropped below 50%, I doubt that FOI legislation would still apply. So this is to future-proof something for which there is a particular responsibility. At the moment, it is going to be wholly owned by the Crown, and the sole shareholder is the Government, so it is appropriate that the questions that may be put in terms of FOI will be answered.

This bank is being set up in the wake of the biggest financial crisis the world has seen in modern times. That should, even if for no other reason, mean that we should try to ensure that the new bank should have the highest possible standards of accountability and reporting. I remind the Committee that the Secretary of State, in his examination before the Environmental Audit Committee on 2 February 2011, said:

“As Secretary of State in BIS, my ambition is to … develop and deliver a GIB that is effective and transparent and affordable—those are our key criteria”.

Love or hate the FOI Act, it is here to stay, and is proving very effective in ensuring that the Government respond to legitimate requests for information from citizens of the UK. We should do what we can to promote that view, and we should do nothing which sets up barriers or creates uncertainty about whether information is retrievable or not. In our view, therefore, there should be no objection to recording in the primary legislation that it is quite clear that, as well as the class of institution it is, the bank itself, as long as it is retained, will be subject to FOI. I beg to move.

[Lord Marland]

My Lords, we have trodden this ground quite a lot so far. I think that the FOI is a very significant and far-reaching incumbence on a company, and on individuals in a country, as we have found out. There will be more later, but as I have said in the past under previous amendments the FOI Act is a very strong regulatory thing. I am not going to play “what if” scenarios, such as what if the bank is sold by a Labour Government in 10 years’ time, or another coalition in five years’ time, because it is our task to operate within the current government schemes and not to tie the hands of future Governments if they wish to carry on with other things. But I totally accept the sentiment and look forward to further debates on the subject. In the light of that, I hope that the noble Lord will withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, I simply note that perhaps in 10 years’ time, when we are on the other side and are debating similar issues, I will remind the noble Lord of those points. However, I beg leave to withdraw the amendment.

Amendment 16 withdrawn.

[Lord Gardiner of Kimble]

My Lords, this may be a convenient moment for the Committee to adjourn until Wednesday at 3.45 pm.

Committee adjourned at 6.20 pm.

House of Lords

Monday 3rd December 2012 Lords Chamber

Monday, 3 December 2012.

14:30

Prayers—read by the Lord Bishop of Guildford.

Iran

Monday 3rd December 2012 Lords Chamber

Question

14:36

Asked By

[Lord Wood of Anfield]

To ask Her Majesty’s Government what legal advice they have received on whether a pre-emptive military strike on Iran would violate international law.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, the Government do not believe that military action against Iran is the right course of action at this time, although no option is off the table. We believe that the twin-track approach of engagement with Iran and pressure through sanctions is the best way to resolve the nuclear issue. We do not comment on legal advice and will not speculate about the legality of various scenarios.

[Lord Wood of Anfield]

I thank the Minister for that Answer. I have asked this Question because of a report in the Guardian which suggests that the Attorney General’s Office has argued internally in government that providing assistance to forces that could be involved in a pre-emptive strike would be a clear breach of international law. Will the Minister clarify the Government’s understanding of the principles that should inform any decision about assisting forces in a pre-emptive strike on another country?

[Baroness Warsi]

I can inform your Lordships’ House that we are not advocating military action against Iran. We continue to believe that the twin-track process of pressure and engagement offers the best hope of resolving the Iranian nuclear issue. In relation to legal advice, the noble Lord will be aware that it is not practice to inform this House or notify parliamentarians of specific legal advice, if any, that we may be obtaining.

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, leaving aside the legal considerations, given that a pre-emptive all-out strike on Iran would almost certainly be militarily unsuccessful, unite Iranian opinion behind the leadership and scupper any diplomatic talks, would not such a move be militarily inept, politically unsuccessful and diplomatically disastrous?

[Baroness Warsi]

My Lords, my noble friend comes to these matters with great experience and expertise, and it is important that voices such as his are heard. However, I can assure him, as I can assure the House, that there is no plan whatever to take military action against Iran, although of course all options are on the table. We fundamentally believe that the best way to deal with this matter is through pressure and engagement, and that is the process that we have adopted.

[Baroness Deech]

My Lords, does the noble Baroness agree that there is something that is perhaps slightly upside down about this Question and that what we should be worrying about is the legality of the preparation of nuclear weapons by Iran? No country should have to face the choice between obliteration and self-defence.

[Baroness Warsi]

The noble Baroness raises an important point. We have concerns and it is because of those concerns that there have been successive United Nations resolutions on this matter over a number of years. It is why the international community wants Iran to be much more transparent and why we continue to engage and push for that transparency. We would all like to come to a negotiated solution.

[Lord Tomlinson]

My Lords, is the Minister aware that, in her reply to my noble friend Lord Wood, she said that a pre-emptive was not justified “at this time”? Can she tell us when she envisages that such a strike might be justified?

[Baroness Warsi]

As I said at the outset, all options are on the table. It would be inappropriate for me to speculate on what scenarios may come forward in the future, and of course it would depend very much on the scenario we faced at the time. However, I can be clear that the Government are certainly mindful of their legal obligations within international law.

[Lord Hannay of Chiswick]

Does the Minister not agree that there would be no doubt whatever about the legal situation if Iran developed nuclear weapons? It would be illegal under the nuclear non-proliferation treaty, which was signed and ratified. However, rather than having the argument this afternoon about the legalities, is not the top priority, with the new American Administration, to revive the second of the two tracks—not the sanctions track, which must be kept up, but the track to talk to the Iranian regime? Would it not be worthwhile for the Government to take the view with the United States Administration that they should have some kind of bilateral contact with the Iranians before matters get to the point where they cannot be retrieved?

[Baroness Warsi]

Discussions about these matters are ongoing in a number of different ways. The noble Lord will be aware that the E3+3—Russia, China, the US and ourselves, France and Germany—have had four meetings since the beginning of this year; I think since February. Indeed, the noble Baroness, Lady Ashton, is in the process of taking forward a further meeting, possibly before Christmas. We are absolutely committed to negotiating our way out of this matter.

[Lord Anderson of Swansea]

Does the noble Baroness agree that, while the centuries-old legal principles in respect of pre-emptive strikes remain valid, they have been transformed in practice by the speed of warning and response in the nuclear age? Although we, along with much of the security establishment in Israel, may be highly critical of a possible strike, should we not at least acknowledge the dilemma of the Israeli Government, who are faced with President Ahmadinejad, who has said he intends to destroy Israel and may very well soon have the capability to do just that?

[Baroness Warsi]

Iran’s development of military nuclear power is a matter of concern for many more countries than just Israel. It is why we have United Nations Security Council resolutions in relation to this matter and it is why we have tried to negotiate with Iran over a number of years. It is important to continue those negotiations and discussions. These are concerns that we in this country have too.

[Baroness Williams of Crosby]

Does the Minister agree that only a few weeks ago Mr Soltanieh, the Iranian ambassador to the IAEA, specifically indicated that Iran was now open to the possibility of bilateral discussions with the United States, and that President Obama has reflected this in his recent views expressed within the United States? Finally, according to recent polling by the Knowledge Forum, a clear majority in the United States is now clearly in favour of discussions and diplomatic relations between the United States and Iran, beginning as soon as possible.

[Baroness Warsi]

Of course, we raise this matter in discussions with the United States but it has to be for the United States to take these discussions forward with Iran if it feels that that is the right way forward. As we do with a number of countries, we encourage it to take all opportunities to have these discussions. The findings of the poll that my noble friend refers to very much reflect the opinion of all of us in this House, and indeed the public, that the better way to resolve this matter is not through military action.

[Lord Wigley]

My Lords, are there any circumstances whatever where a first strike with nuclear weapons could be morally justifiable?

[Baroness Warsi]

I am not enough of a military expert to start making these decisions. I do not think that this is a matter for moral judgment; it will be based on any scenario that presents itself at the time, and it would be wrong for me or the Government to speculate at this stage.

[Baroness Afshar]

My Lords, should there not be the same kind of sanctions against all countries who have nuclear weapons? Is it not the case that these sanctions hurt the poor in Iran while the elite are totally unaffected?

[Baroness Warsi]

The noble Baroness raises a very important point. When we look at sanctions, we are extremely aware of the need to have appropriate exemptions in place that cover humanitarian assistance, including medicines. It is important to remember that what we are concerned about is the development of nuclear weapons. We have concerns about the regime but not about the Iranian people. They are not the people we want to suffer as a result of these sanctions.

European Council: December Meeting

Monday 3rd December 2012 Lords Chamber

Question

14:46

Asked By

[Lord Liddle]

To ask Her Majesty’s Government what are their priorities for the December meeting of the European Council.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, the December European Council will cover economic policy, including economic and monetary union and banking union, as well as defence enlargement and foreign policy. The UK will seek to ensure the integrity of the single market in relation to banking union and economic and monetary union. We will press for further progress on growth and work to ensure that the defence strategy reflects UK priorities. Enlargement is dependent on the December General Affairs Council.

[Lord Liddle]

I thank the noble Baroness for her Answer. Why have the British Government adopted a completely different approach to a banking union from that of a fellow euro-out, Sweden, which is run, we are told, by David Cameron’s favourite conservative European Prime Minister? Sweden has engaged with the negotiations on a banking union, whereas Britain appears to be trying to reintroduce, for the first time since the introduction of the single market, some kind of veto on financial services legislation. Does the noble Baroness think that that strategy is likely to meet with more success than it did in the negotiations on the fiscal treaty last December, or are the Government once again shouting from the sidelines to try to appease the unappeasable?

[Baroness Warsi]

The Government’s strategy on this matter is one that reflects the best interests of Britain. I am sure that noble Lords on the other side of the House agree that it is important that when the Prime Minister goes to Europe, he acts in the best interests of this country and negotiates on the basis of that strategy. The UK does not use the euro, and we have been clear that the UK will not be part of any banking union or fall under the jurisdiction of the ECB. However, that does not mean that we do not continue to push for further liberalisation of the single market.

[Lord Roper]

Does my noble friend the Minister agree that one of the priorities of our right honourable friend the Prime Minister should be to ensure that any discussions or negotiations about institutional changes should take place at the level of the 27, even if they concern the eurozone, in order to maintain the integrity of the single market?

[Baroness Warsi]

My noble friend makes an extremely important point, and the Government are with him on this matter. We are not part of the euro, but it is important that structures are not put in place that allow the euro countries to effectively exercise a block vote and therefore make decisions that could impact on us within the single market.

[Lord Soley]

Although the economic issues just discussed are probably the most important, can the Government also look at the way in which these international companies use the different tax regimes within the European Union to avoid their responsibilities in individual countries, and also perhaps at the semi-monopolistic practices of such companies? It is fairly easy—indeed, one might say pleasant—to boycott Starbucks, but Google and Amazon are a lot more difficult and are semi-monopolistic. It is something the EU should take a look at.

[Baroness Warsi]

The question goes beyond the immediate Question but I am sure the noble Lord will agree that the Government have been deeply committed to making sure that those who should pay tax do pay tax. We have invested more in HMRC to make sure that those who should pay tax in this country do pay tax in this country.

[Lord Stoddart of Swindon]

Should the Government not tell the European Union that they are in favour of a much looser arrangement between the countries of the European Union, and less centralisation? While the Prime Minister is over there, perhaps he could also have a word with the Prime Minister of Poland, who seems to imagine that the average cost of the EU budget paid by British people is only £35 a year, whereas it is actually £156.

[Baroness Warsi]

I will certainly feed that fact back in. I agree with the noble Lord about less centralisation. Of course we believe in power being nearest to those who are affected by those decisions. However, I think the noble Lord would agree with me that in relation to the European Union, we want a trade area but it is also important to be part of the group that makes the rules in relation to that trade area.

[Lord Foulkes of Cumnock]

My Lords, will the Minister take the opportunity to ask the Prime Minister to raise at the European Council the way in which three private companies—the credit rating agencies based in the United States—have such an undue and malign influence over the economy not just of the United Kingdom but the whole of Europe? I hope she will take some advice from her Treasury colleague on this. It is about time that we took collective action so that we in Europe are not dominated by these American private companies.

[Baroness Warsi]

The EU is engaged in ongoing discussions on work in relation to better regulation of those very institutions.

British Transport Police

Monday 3rd December 2012 Lords Chamber

Question

14:51

Asked By

[Lord Faulkner of Worcester]

To ask Her Majesty’s Government whether they will recognise the British Transport Police for the purposes of the Firearms Act 1968.

[Earl Attlee]

My Lords, the Government recognise the need to amend the Firearms Act 1968 to address the anomalous position of the BTP in relation to firearms licensing. We are continuing to seek a suitable legislative vehicle to make the necessary amendment to the Firearms Act 1968. We hope that it will be possible to do so during the third Session Bill programme.

[Lord Faulkner of Worcester]

My Lords, there is widespread admiration in your Lordships’ House and elsewhere for the work that the British Transport Police do, particularly in tackling metal theft, as we heard in the debate on Friday. In May last year, the Secretary of State for Transport announced that the British Transport Police could arm its officers. However, for the reason the Minister mentioned—because the definition of “police” in the Police Act 1996 does not include the BTP—its officers are not regarded as Crown servants under the Firearms Act 1968. Is he aware that, as a result, BTP officers do not enjoy the legal protection afforded to other police officers and that they have to apply for firearms certificates individually as if they were members of the public? The Minister referred to legislative opportunities—

[Noble Lords]

Oh!

[Lord Faulkner of Worcester]

I will finish very quickly. The Minister referred to legislative opportunities. Will he look at a late amendment to the Crime and Courts Bill or the introduction of a statutory instrument under the Railways and Transport Safety Act?

[Earl Attlee]

My Lords, the noble Lord is absolutely right in his analysis of the problem. Unfortunately, we cannot make any suitable amendment to current legislation going through your Lordships’ House. I am advised that other routes, such as a regulatory reform order, are not suitable, so we will have to wait for a suitable slot in the primary legislation. However, the noble Lord’s point about legal uncertainties is extremely important.

[Lord Berkeley]

My Lords, how many BTP officers carry firearms? As my noble friend said, it seems odd that they do not have the same legal position as other police officers around the country who are able to carry firearms. What is the legal position of BTP officers who carry firearms? Are they at risk on a personal level in a way that the other police officers are not?

[Earl Attlee]

My Lords, in answer to the noble Lord’s first question, we are talking about only 53 police officers, so the bureaucracy load is manageable, although extremely inconvenient. The weakness in the legislation on the protection of officers who are involved in an incident, alluded to by the noble Lord, Lord Faulkner of Worcester, is an extremely important point.

[Lord West of Spithead]

My Lords, does the Minister agree that although metal theft is a heinous crime and has caused damage to war memorials and danger to hospitals and railway lines, shooting those involved might be a little over the top?

[Earl Attlee]

My Lords, in the case of a war memorial, I am sure that the noble Lord and I would have some doubt over whether that would be over the top. Police officers have a range of options. It is important to note that British Transport Police armed officers have not only a firearm but a Taser and other weapons, such as pepper sprays, so they do not need to resort to the firearm immediately.

Immigration: Home Office Meetings

Monday 3rd December 2012 Lords Chamber

Question

14:55

Asked By

[Baroness Smith of Basildon]

To ask Her Majesty’s Government when Home Office Ministers last met the Chief Inspector of Borders and Immigration; and how often such meetings are held.

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, Home Office Ministers have regular meetings with officials and others as part of the process of policy development and delivery. As was the case under previous Administrations, it is not the Government’s practice to provide details of all such meetings.

[Baroness Smith of Basildon]

My Lords, I am none the wiser after that Answer than I was before I asked the Question. There was a serious reason for asking, because it is clear that there are serious problems in the UK Border Agency. Even the recent fall in net migration is due to British citizens leaving the country and the fall in student numbers. Time and again, the chief inspector has found problems but, despite commitments to his recommendations to make the system more efficient and fairer, it just does not happen. We now even have the Mayor of London accusing the Government of turning a blind eye to long-term illegal immigrants.

Is part of the problem cuts that have led to 5,000 fewer UK Border Agency staff? Can the Minister give a commitment to your Lordships’ House today that the Government will act, not just promise to act, on the chief inspector’s reports?

[Lord Taylor of Holbeach]

The chief inspector has published two reports recently, and I thank John Vine, the chief inspector, for them. He will be appearing before the Home Affairs Select Committee tomorrow. I totally accept the view that the UK Border Agency has not performed as strongly as this House would expect, but it is improving, and that is the right direction of travel. The question we have to ask ourselves is: for how long does this go back? I fear that it goes back to 2006, when there was a huge backlog of cases, and that has taken an awful lot of clearing up. The current situation is greatly improved.

[Lord Naseby]

Does not the number of bogus students mentioned in one of the reports indicate how right it was that Her Majesty’s Government, first, allowed the London Metropolitan University students who were bogus to be dealt with; and, secondly, decided to keep student numbers quite separate from other immigration statistics? Can my noble friend assure us that a firm notice has gone out to all the many agencies scattered around the world looking to bring students to the UK, and through our embassies and consulates, that good, genuine students will always be welcome in United Kingdom but that bogus ones will be sent home?

[Lord Taylor of Holbeach]

That is exactly the message that the Government are sending. In fact, as has been shown in the most recent reports, university numbers are holding up very well. UCAS acceptances of international students are up by 4%, showing that our policies are having the right effect. There was a 1% increase in visa applications for students attending universities. The university sector now accounts for three-quarters of sponsored visa applications, up from about half in the equivalent period last year.

[Lord Dholakia]

My Lords, at my noble friend’s next meeting with the Chief Inspector of Borders and Immigration, will he insist on records being kept of cases of domestic violence where there is evidence that judicial decisions on permanent settlement have been overridden by the Executive?

[Lord Taylor of Holbeach]

I have recently written to the noble Lord because he asked a similar question last week on this issue. Obviously, it is important that we have a regime that is capable of ensuring that people who come to this country are fit and proper persons to be here.

[Lord Hannay of Chiswick]

My Lords, does the Minister agree that the considerable number of students who were threatened with expulsion following the action at London Metropolitan University were not bogus at all? That presumably was why the Government forked out £2 million to find them new places. We should not shelter behind figures that do not really prove what the Minister tries to make them prove. This sector is enormously competitive. We should be increasing it by much more than the figures he gave and would be so without the chilling effect of the Government’s Minister for immigration going out and beating his chest and saying how jolly well he had done to keep all those students out.

[Lord Taylor of Holbeach]

The noble Lord is perfectly right. The university sector is very important, as is the contribution made by international students to this country and the economy. I reiterate to noble Lords that there is no limit to the number of students who can come to the UK. Put simply, if they can speak basic English and have sufficient funds and the necessary qualifications, they can come.

[Baroness Brinton]

Does the Minister agree that it is extremely unfair to class the international students at London Metropolitan University as bogus simply because of the mistakes made by the university? The vast majority of errors were found to be in the registering of students and in the systems to monitor them. It is appalling that we should even contemplate saying that the majority of international students there are bogus. Does the Minister agree?

[Lord Taylor of Holbeach]

I do not think that I used that word. In fact, I agree with the noble Lord, Lord Hannay. The Government made funds available to ensure that students could continue their studies because we understand that the problem lay with the university, not with the students there.

[Lord Morgan]

Is the Minister aware of the appalling damage done to graduate studies at our universities, both academically and financially? The figures that we saw last week indicate very clearly that tens of thousands of graduate students have not come to this country, not because they are bogus but because of other qualifications—including financial—imposed by the Border Agency, whose policies have proven to be crass and philistine.

[Lord Taylor of Holbeach]

I do not agree with that description. The arrangements for graduate students are that they can come, but they have to show that they have an appointment that is capable of earning £20,000 a year. That is a reasonable expectation that we should have for people coming in as graduate students.

[Lord Avebury]

My Lords, who is accountable for the false statement made by the UKBA last spring that the legacy cases had all been resolved when it now emerges that there were still 147,000 in the queue?

[Lord Taylor of Holbeach]

As we know, there is a huge number of legacy cases. This was referred to in the Question we tackled last week. It is a matter of concern that these legacy cases were not cleared up promptly; they are being cleared up now and are being tackled so that those students who have been discovered to be here improperly are being sought and obliged to leave.

[Lord Brooke of Alverthorpe]

Do the legacy cases not cover other people as well as students? Is the fundamental problem not the one which the Minister spoke about last week: the inadequacy of our ability to search and locate these individuals to try to get them out of the country? Is it not true that the department is currently cutting the number of staff it engages by around 5,000, yet claims that it is going to be able to perform better? Will the Minister please tell the House how it will do that?

[Lord Taylor of Holbeach]

Identification of people who have overstayed is a clear technical problem which requires the application of all the resources of the UKBA. The UKBA is confident that it can achieve this and has given assurances that it will do so.

[Lord Forsyth of Drumlean]

My Lords, could the Minister possibly answer the question of my noble friend Lord Avebury when he asked who is being held accountable for the fact that we were misled about these legacy cases?

[Lord Taylor of Holbeach]

There have been a couple of incidences where staff of the UKBA have indeed apologised to the Home Affairs Select Committee for mistakes that they have made. That was done orally last week and, indeed, before then in writing by the head of the UKBA.

[Baroness Tonge]

My Lords, is the Minister aware that in this country the age of marriage is 16 if that marriage takes place with parental consent? Is he also aware that this is used for some girls to be taken out of the country against their will to be married so that they can then bring their husbands back here? What is his department doing to stop that practice, and when will we bring our age of marriage up to 18 in line with other countries?

[Lord Taylor of Holbeach]

This House has frequently debated forced marriages. The Government are bringing forward legislation to criminalise them.

[The Countess of Mar]

My Lords, for 21 years I was a lay member of the Immigration Tribunal until I resigned in 2007 because I thought my job was not worth while. I have heard noble Lords at that Dispatch Box reiterating over and again what the Minister has iterated today. What guarantees are there this time that the Government’s measures will work?

[Lord Taylor of Holbeach]

The Government’s resolution to deal with this problem is the one thing that I can assure the noble Countess of.

[Lord Winston]

My Lords, is the Minister aware that at a recent Select Committee when the UK Border Agency was giving evidence, the members of that agency were completely incapable of giving accurate statistics on students, particularly regarding the courses and universities that they were attending? Do we not think that, rather than a ball-park figure, it would be appropriate to know exactly the quality of the students and which universities they are going to?

[Lord Taylor of Holbeach]

Indeed. I am sure that that information is available. The question is how it is collated.

[Baroness Sherlock]

My Lords, the Minister told the House that the Government’s resolution is all that they need to solve the problem. Would a little humility not be in order? Maybe if the Minister spent some time looking at why previous solutions have failed, there might be more chance that the Government will succeed. Does he agree with me?

[Lord Taylor of Holbeach]

I am always prepared to learn. Indeed, I have asked for a meeting with John Vine as a result of the report that I received the other day.

Medical Innovation Bill [HL]

Monday 3rd December 2012 Lords Chamber

First Reading

15:07

A Bill to make provision for innovation in medical treatment.

The Bill was introduced by Lord Saatchi, read a first time and ordered to be printed.

Mental Health (Discrimination) (No. 2) Bill

Monday 3rd December 2012 Lords Chamber

First Reading

15:07

The Bill was brought from the Commons, read a first time and ordered to be printed.

Prisons (Property) Bill

Monday 3rd December 2012 Lords Chamber

First Reading

15:07

The Bill was brought from the Commons, read a first time and ordered to be printed.

Marine Navigation (No. 2) Bill

Monday 3rd December 2012 Lords Chamber

First Reading

15:08

The Bill was brought from the Commons, read a first time and ordered to be printed.

Presumption of Death Bill

Monday 3rd December 2012 Lords Chamber

First Reading

15:08

The Bill was brought from the Commons, read a first time and ordered to be printed.

Mobile Homes Bill

Monday 3rd December 2012 Lords Chamber

First Reading

15:08

The Bill was brought from the Commons, read a first time and ordered to be printed.

Disabled People’s Right to Control (Pilot Scheme) (England) (Amendment) Regulations 2012

Monday 3rd December 2012 Lords Chamber

Motion to Approve

15:09

Moved By

[Baroness Stowell of Beeston]

That the draft Regulations laid before the House on 24 October be approved.

Relevant documents: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 26 November

Motion agreed.

Electoral Registration Data Schemes (No. 2) Order 2012

Monday 3rd December 2012 Lords Chamber

Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012

Charitable Incorporated Organisations (Consequential Amendments) Order 2012

Motions to Approve

15:09

Moved By

[Lord Wallace of Saltaire]

That the draft Orders and Regulations laid before the House on 30 October be approved.

Relevant documents: 10th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 November

Motions agreed.

Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012

Monday 3rd December 2012 Lords Chamber

Electricity and Gas (Energy Companies Obligation) Order 2012

Motions to Approve

15:09

Moved By

[Baroness Verma]

That the draft Order and Regulations laid before the House on 30 October be approved.

Relevant documents:10th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 November

Motions agreed.

Canterbury City Council Bill

Monday 3rd December 2012 Lords Chamber

Third Reading

15:10

Moved By

[Lord Bilston]

That the Bill be now read a third time.

[Lord Bilston]

My Lords, I should first explain the three minor amendments to this Bill, which I shall move formally at a later point. All I can say about these amendments is that they are in the nature of tidying up. One of them alters an incorrect reference to the “Kent Valley Police Force”, which appears to be something of a hybrid of Kent and Thames Valley, no doubt caused by the fact that Reading Borough Council is promoting one of the other Bills that we are discussing this afternoon.

I begin by paying tribute to those noble Lords who considered the Bill in Select Committee just over a year ago. The noble Baroness, Lady Knight of Collingtree, chaired the committee most ably, and was supported by the noble Lord, Lord Blair of Boughton, the noble Viscount, Lord Eccles, my noble friend Lord Glasman and the noble Lord, Lord Strasburger. All the members of the committee took a very strong interest in the Bills, and that is evidenced not only by their attendance here today but by their detailed special report which I, and I am sure other noble Lords, have read with interest.

Over three days the committee heard evidence from all four councils, and from pedlars who had presented petitions against the Bills. I am told that the committee was not only fair and even-handed with all the parties, as we would expect, but took a truly active and interested role in the proceedings, questioning the witnesses forensically in some detail. The committee decided to amend the Bills substantially, and highlighted a number of points in its special report, which I will try to summarise now.

First, there was a concern that the Bills were disproportionate, in the way that they restricted people’s ability to exercise their rights legally to trade as pedlars. The committee was particularly concerned to protect the rights of those pedlars—genuine pedlars, as they have become known—who play by the rules, who move around when trading and who do not use oversized stores to display their wares. These mirrored concerns raised by the noble Lord, Lord Lucas, at Second Reading, and the committee addressed them by amending the Bills in the way that it did. The Bills now contain provisions that restrict the size of stall that can be used by pedlars, but they are otherwise able to continue to trade as they did before.

Secondly, the committee was concerned about the use of piecemeal, incremental modification of national law by private legislation. As I mentioned at Second Reading, pre-empting points that were made by the noble Lord, Lord Lucas, the Bill’s promoters have real sympathy with his concern. They would have preferred not to promote these Bills to deal with these local issues, but the problems that they were encountering meant that they felt that they had to, particularly as there was, at the time that the Bills were deposited, no real appetite on the part of the Government to address the issues nationally. Things have changed on that score, and in a somewhat timely manner. Only last Friday, the Department for Business, Innovation and Skills published a consultation paper on regulations to amend street trading legislation on a national basis. I will return to that topic a little later.

The committee also questioned the motivation of the councils in promoting the Bills. It accepted the councils’ primary concern, about the need to ensure safe passage on the highway and to prevent obstruction, but was unconvinced by the council’s evidence on the need to protect the urban environment. Again, the committee’s views chimed with those of the noble Lord, Lord Lucas, at Second Reading, when he expressed his views about some of our streets lacking character.

The committee was also concerned about what it saw as an attempt to protect licensed street traders from unfair competition from pedlars. The councils presented evidence to show that licensed street traders sometimes paid hundreds of pounds annually for their licences, compared to the £12.50 paid by pedlars. They also demonstrated that, in many cases, traders who were trading under the authority of a pedlar’s certificate were often doing so from stalls that gave the impression of being permanent. I have some sympathy for those street traders and, in that respect, I am glad to say that, as I mentioned earlier, the committee amended the Bill in such a way that the use of larger stalls will be subject to control.

The next point that the committee dealt with was enforcement. All four Bills would have allowed the councils to seize items from unlawful street traders. The committee thought that this was a step too far and removed the seizure provisions. The councils were naturally disappointed, but were pleased that the committee was content to leave in the fixed-penalty provisions.

Finally, the committee was concerned to ensure that the new restrictions on pedlars did not operate throughout the whole area of each council. It is fair to say that a happy medium was reached in that regard, with the committee deciding that the new restrictions on the size of pedlars’ stalls should apply only in those parts of the authorities’ areas which are designated by councils on the basis that the controls will be necessary to ensure road safety or prevent obstruction of the highway.

Having mentioned the committee and its decisions, I turn briefly to the Government’s position. The Department for Business, Innovation and Skills has, while the Bills have been progressing through Parliament, been developing its own policy on street trading, particularly in the light of the European services directive which, since the introduction of the Bills, has been recognised as applying to the retail sale of goods and, therefore, to street trading. The department submitted the report to the Select Committee and appeared before it, expressing some concerns about the compatibility of the Bills, as they then were, with the directive. During proceedings, the councils drafted amendments which satisfied the department in that regard. As I have mentioned, the committee went somewhat further with its amendments, noting importantly that it was satisfied that the Bills before us now are compatible with the directive.

The Government have also recognised the need to deal on a national basis with the issue of compatibility. After a long wait, they published a consultation and a draft regulation just 10 days ago. It would not be appropriate to dwell on that consultation for too long today, but there is some similarity between what the Government are proposing on a national basis as regards the equipment that a pedlar may trade with and what the Bills now provide. The councils will need to examine the consultation document carefully and will no doubt provide detailed responses in February when the consultation closes. What seems clear, and will no doubt come as something of a relief to your Lordships, is that if the Government make their proposed regulations there are very likely to be no more local pedlars’ Bills. We should all give three cheers for that; we have been waiting for this consultation for a long time.

I conclude by saying that, after their long gestation in Parliament, these four Bills are now in a form that I hope your Lordships will find acceptable. The councils will be able to exert much needed control over those who abuse the pedlars legislation and, as a result of the committee’s amendments to the Bills, those who are now commonly referred to as genuine pedlars will be afforded protection. I therefore hope that your Lordships will allow the Bills to pass today and agree to the amendments that I shall propose to the Canterbury City Council Bill. I beg to move.

15:22

[Baroness Knight of Collingtree]

My Lords, we are all indebted to the masterly summary from my old friend and parliamentary neighbour for some years, the noble Lord, Lord Bilston. We had another guardian angel, and that is the noble Lord, Lord Lucas; I am delighted that we shall hear from him in a little while. When one is told one is to chair a Select Committee set up to examine a case put forward by quadruplets—three cities and a borough—it sounds like rather a dull old chore. That is wrong—in fact, it turned out to be a fascinating, educative, challenging and rewarding experience and I would not have missed it for the world.

I will put a slightly different complexion on what has been said by the noble Lord, Lord Bilston, from the heart of the Select Committee, as it were. I would like to make it clear to the House that the team of colleagues I worked with could not possibly have been better. From all political corners of this House, we worked in happy unison. I begin with my heartfelt thanks to every one of them for their expertise, wisdom, patience, judgment and, may I also say, their friendship.

Basically, as the noble Lord, Lord Bilston, has said, these local authority Bills were seeking the total eradication of pedlars from their streets. The supporting counsel said that pedlars caused unacceptable congestion. The members of the committee asked for evidence and they produced photographs of their streets, which of course were very crowded. We scrutinised them carefully and asked questions. We concluded that nothing we had been shown, or told, proved the case that the local authorities were making.

We reached the conclusion, as the noble Lord, Lord Bilston, has touched on, that the local authorities were at least partly motivated by a desire to protect licensed street traders who pay a lot more for their licences than the pedlars pay for their permits. We did not accept the claim that pedlars should be banished because the quality of their goods might be inferior to that being sold in the shops or on the fixed stalls. We felt rather outraged by this; it has never been the business of local councils to set up as experts on what is unfair or fair trading, as regards the quality of the goods. So that claim went by the wayside.

The representatives of the councils then assured us that the public were much against pedlars, that they could not stand having pedlars in their streets and that we really should listen to what the public said. The committee asked for evidence on that issue. They could not produce a single letter or newspaper campaign in support of their contention. However, the pedlars gave us acceptable and valid reasons to say that there was good evidence of public approval.

The members also reflected that pedlars had been on the streets of England prior to Shakespeare. Even Chaucer mentioned pedlars and we saw no reason to go to war with them or to change history. However, as has been said, we felt that some changes should be made in the way in which pedlars operate. Some of the pictures submitted by the promoters showed that the small trolleys that pedlars are allowed to use to carry and display their wares were sometimes very much extended. The base was small with four little wheels, rather like those that we all wheel about when we come to London for the week. But enormous adjuncts, including poles, were put on and where the trolley started quite small, it finished up yards wide with, for example, pashminas and scarves hung all along it. We felt that those were not acceptable and could cause obstruction.

Therefore, the committee suggested amendments. We have heard a little about the changes but I have the exact measurements. The trolley used to carry the goods must not be more than 0.75 metres in width; 0.5 metres in depth; and 1.25 metres in height. The overall size of the trolley also is constrained. We gratefully accept the small amendments, which were necessary, on different subjects, about which we have heard from the noble Lord, Lord Bilston. Clearly, great care has been exercised on the whole of these applications by the councils.

However, we had several other concerns. So great was the interest of the members of the committee that one brought a pedlar’s base to the Committee Room. We had it on the desk where we gazed at it, walked around it and figured out how it would look when it was dressed. We really concerned ourselves with how things were to work.

I am delighted to receive the news that other changes are to be made, because we felt that the four Bills presented would undoubtedly have given councils a disproportionate power in relation to suspected street trading offences. The pedlars were very worried about that, particularly the suggestion that almost at the drop of a hat all their goods could be confiscated for such a period of time that many would be useless when that time was up—they would have gone past their sell-by date by a long way. We have reduced these powers to the issuing of fixed penalty notices and we have made it a requirement that councils train all officials who exercise the remaining powers. We decided it would be best to put in place a statutory duty on councils, rather than just relying on an undertaking given under private Bill procedures.

The most important change of all is the piecemeal modification of national law by scores of individual little bits of private legislation that has gone on until now, but is now—thank heaven—to be changed. It really is extremely unsatisfactory. There are people who very much support the right of local authorities to put forward their own Bills—and long may that continue—but here we have a silly situation where the same objective has so far been put forward by 40 local authorities through their own legislation. There are some 300 others waiting around the corner to see when they are going to have their chance. These Bills would have come to this House, causing more time-wasting and money-wasting for the local councils, who have to employ counsels to put forward their case.

We heard a little about the arrests that this has led to, which are quite wrong and totally unfair. If a pedlar gets his certificate to trade, say, in Newcastle, that gives him the right to trade just as legally in Brighton, Bodmin, Birmingham or anywhere else; he can use the one certificate. However, a certificate in one place gives powers that are quite different from those in another place which has brought in its own rules. This is very confusing, and I am glad that we now see a light at the end of that tunnel and that this, too, will be altered. Incidentally, we heard evidence from a woman pedlar who had received her certificate quite legally, but who was arrested by the police in a town other than the one which had granted the licence and taken her money for it. She had no idea that she was breaking the law. That really must stop, and I am delighted that it will not be long before we see the change that we have all asked for.

It may be worth throwing in another point. We understand that there have been at least four other occasions when this House has held a Select Committee on very similar Bills. None of those committees came to the same conclusion that we did. They thought that the local authorities were right. That will have to be sorted out: they came to totally different conclusions, and those conclusions were wrong. Suffice to say that all the Bills were after the same thing: getting rid of pedlars.

Only a few weeks ago the Government published a consultation paper on repealing the Pedlars Act 1871 and the Pedlars Act 1881. The paper appeared after our committee had sat, but during our deliberations we warned that repealing the requirement on pedlars to obtain a certificate to trade would take away the exemption for certified pedlars from other street-trading restrictions. To do this without putting in its place a clear national exemption allowing pedlars to exercise their right to trade would be wholly unacceptable.

For more years than anyone wants to count, Peers have paid their tributes and uttered their thanks to the magnificent staff who serve us all in the Private Bill Office and the Public Bill Office. All of us on the committee wish to do so unreservedly. Nothing was too much trouble for the staff who worked with us. The bounty and quality of their help was absolutely endless. I will mention specifically the wonderful Kate Lawrence, whose expertise as clerk to the committee we relied on completely and endlessly, and Chris Bolton, who bears the impressive title Examiner of Private Acts. She, too, must be a very busy lady. Between them, these two ladies know absolutely everything and are a huge asset to the House.

15:36

[Lord Blair of Boughton]

My Lords, it gives me great pleasure to speak after the noble Baroness, Lady Knight, and to thank the one person whom she did not thank—namely, her. I am sure that I speak for all my colleagues on the committee when I say how marvellously she chaired it and how enjoyable the experience was.

I shall speak extremely briefly. Having heard from the noble Lord, Lord Bilston, and the noble Baroness, Lady Knight, I am not sure that there is much more to say. The crucial issue is that we cannot go on having private Bills on the same subject for the next 300 councils. The intellectual experience of trying to combine the provisions of 19th century legislation with the EU services directives of 2010 or 2012 should not be imposed on any other committee.

I urge the Government, when the consultation is over, to go back to the existing legislation and other councils. We are now in a position where the four councils whose Bills we examined will have a regime that is more restrictive of them than is the case, for instance, in London, which is much harsher towards pedlars.

Our real triumph was to look at the trolley, decide what size it was, look at the photographs of ones that looked like small cars being pushed round the streets of Leeds and decide that enough was enough.

Finally, in a period when city centres are under such pressure and there are too many closed shops, why would we wish to close down the seed corn of the pedlars who bring some brightness to those streets? I commend the Bills.

15:38

[Viscount Eccles]

My Lords, I, too, will say a great thank you to my noble friend Lady Knight. The witnesses who came before the committee were very varied. It was not particularly easy to give them the opportunity to say what they wanted to say. Some of the representatives and the pedlars were quite overawed by the Pugin experience. Of course, the evidence coming from the local authorities was very different. They were very well schooled, they knew what they were going to say, and they also knew what they were not going to say. Our chairman did a brilliant job of bringing out the evidence that came out during our inquiry. Certainly it was because of that that the members of the committee became so intrigued by and involved in what was going on in front of us.

I want to talk briefly about fixed penalties. I think that in principle fixed penalties are undesirable. They may be necessary but, when they are, they are a necessary evil. The problem is that many people acquire the power to impose fixed penalties. We try to offset that by training and I hope that that works, but I think your Lordships will all recognise that power corrupts. One can go on to absolute power but power does corrupt—there is absolutely no doubt about that. In some fixed penalty regimes, there are people who take advantage of the power that they have and they impose the regime in a very unfriendly way. The necessity for these regimes may arise from the courts being overloaded, but one has to ask why they are overloaded. The conclusion is that Parliament must have some responsibility for that.

In the exercise of these powers, which are in some of the Private Members’ Bills that have become Acts, I think that my noble friend is entirely right that there is a culture of chasing pedlars about. I am not sure about removing them altogether—it is more fun to chase people who are still there—but they do it to make pedlars’ lives more difficult. I am very grateful that in the Bill the Secretary of State has the power to look at the penalties and, if necessary, to restrict them.

As for the new regime which we have been told about, I hope that it is a liberal one—that is, liberal with a small “l”. I have always thought, and continue to think, that one of the great advantages of democracy is an acceptance of difference and diversity, and not a wish to make everybody look and behave the same while living by a great welter of rules. I very much hope that the 4,000 pedlars are not reduced in number under the new regime but are able to trade and to live their lives in the way that they want.

15:42

[Lord Glasman]

My Lords, I also pay tribute to the committee, and particularly to the noble Baroness, Lady Knight, who gave me incredible instruction on how to chair. It was a genuinely excellent experience. There are two things I should like to share with the House. First, the balance between kindness and severity was very well judged. The pedlars and their representatives were occasionally speechless and sometimes cried in the committee. They were scared and I thought that the noble Baroness dealt with them beautifully. Towards the legal counsel, the proposers and the pedlars’ legal representative, who tended to go on a little, I thought that she showed the appropriate degree of, let us say, sternness. Secondly, I should like to share with the House what the noble Baroness said to me. When I asked her a question, she said, “Being in committee is as much about the work you do between the meetings as the work you do in them”. That was taken on board. It was a very good experience indeed and I think we came to the right judgments.

There are two concerns that I should like to share with the House. First, I asked the representative from Leeds council whether she could name one world-class institution that came out of Leeds. It was obviously not the football club. She could not quite put her finger on it. I tried to prod her, telling her that Marks & Spencer was the institution and that Simon Marks started off as a pedlar. The idea that pedlars—poor people coming to this country, moving around and showing some enterprise—would be stamped on here was astonishing to me. I completely echo what the noble Viscount, Lord Eccles, said about the desire to homogenise the shopping experience and shopping centres. There was quite a whiff of local enforcement going on against the pedlars that came through from the witnesses, and I found that quite unpleasant and disturbing.

My second concern is a constitutional one. “Pedlar” is from the Latin for feet—as we said in the committee—as in pedalo. It is true that pedlars were pushing their bags rather than walking them in some cases, due the size of the things that they had, and we originally based it on Simon Marks’ bag, which we looked at in the Marks & Spencer museum. That was an appropriate size for a pedlar’s bag, we thought. There has to be enforcement in bringing that down to size and getting it correct.

One finds references to pedlars even before Chaucer, going back to accounts from Roman times. There have been pedlars taking their wares from town to town and from city to city for as long as there have been records in the country, so it is a status that has existed from time immemorial. There were references to pedlars before 1191. It is not customary practice; it is practice from time immemorial. It was recognised in the 1871 Act; it was not created in the 1871 Act—that is a very important distinction. In other words, it is not clear that the status of the pedlar can be abolished. It seems to me that it is an ancient status in the realm and that there have been very ill thought out and incoherent attempts to limit that freedom of movement, as was manifest in the Bills that came before.

I looked at the BIS consultation document. BIS’s legal evidence seemed to suggest a lack of historical awareness about pedlars. It was taking EU directives and applying them in a very flat and straightforward way. I asked BIS how it could account for the fact that Germany has enormous differences in craft status that are still consistent with the EU. Its reply was, “We take a different view of enforcement”. BIS is taking a very straightforward, unhistorical view that pedlars will interfere with new services. We have to resist that, refute it and absolutely assert that pedlars have been part of our kingdom and part of the realm for many thousands of years. They play a role in taking things from town to town and in bringing people together in many ways, disrupting stable, corporate markets. We really should defend them. I commend the report and I commend the committee.

15:46

[Lord Lucas]

My Lords, I am absolutely delighted to be able to praise my noble friend’s committee. It is an extraordinary example of the Lords at its very best and I cheer to the echo what it says in its report. It is wonderful to see the Lords standing up for the unregarded, which is something which, when we pay attention, we do very well. I echo my noble friend’s praise for Chris Bolton, who is one of the great anchors of this House. I am also going to praise the European Union, which I do not always do—it seems to me that it has got the services directive right—and I am going to praise my noble friend on the Front Bench in his role with his department, because the consultation that it has produced is a very fine example of a consultation. It is clear about what it sets out to do; it is clear about the reasons that it is adducing for that; and it is open as regards the responses that it is looking for. It clearly anticipates that people will disagree and it encourages disagreement. It is a very fine piece of work and I look forward to the legislation if it carries on in that spirit. It would have been nice, too, to be able to praise the Local Government Association, but its reaction to the consultation was immediate, negative and silly.

As the noble Lord, Lord Sugar, often reminds us, we are going through tough economic times. It looks as though those will be with us for some time to come. We really have to make it easy for people to start out in business, whether they intend to found Marks & Spencer or whether they intend just to make a living. If that is some minor inconvenience to us, we jolly well have to put up with it. The high streets are difficult places to break into now. It would be very difficult for the noble Lord, Lord Sugar, to do what he did in founding a business because so many businesses are now chains. How can a little guy starting out get a chain store to take up his product? It is very difficult. A lot of the empty premises in high streets are not for rent except at very high figures because the landlords are desperate to keep up the fiction that they still have a high-value property on their hands. That makes it very difficult for people who are just starting out to obtain space on the high street. The attitude shown by the consultation and by my noble friend’s committee seems to me entirely praiseworthy.

When one walks around the streets of Westminster, one sees that Westminster Council is very much in favour of sterility when it comes to its streetscape. I feel ashamed because there is so much money in Westminster and so many opportunities to start businesses. I hope that the result of the determination of my noble friend on the Front Bench’s department to open up the legislation on street trading and pedlary will be that we start to see that, as a community in Westminster, we give many more people the chance to start out in life.

15:50

[Lord Strasburger]

My Lords, I, too, was a member of the Select Committee that considered these Bills and I will start by thanking the noble Baroness, Lady Knight, who chaired the Select Committee with great patience and skill.

Most pedlars are itinerant and often go where the business takes them, selling hats, scarves, other items of clothing, key rings and balloons. They are true entrepreneurs, adapting their products and location to what their customers want and where the market is. They add colour and diversity to our increasingly uniform shopping streets. The fact that they can make a living as pedlars suggests that they provide a useful service and, so far as the committee could tell, they appear to do no one any harm at all.

The Bills as drafted sought to end the pedlars’ exemption from street trading laws so that they would not be able to operate on the street in areas designated by the four local authorities that are pushing the Bills. The Bills as presented to the Select Committee also introduced fixed penalties and a power for officials to seize pedlars’ goods. The committee spent a lot of time trying to discover why the four local authorities wanted these powers. We were told that pedlars sell sub-standard goods, but no evidence whatever was offered to prove this allegation, and we have no reason to believe that their goods are any better or worse than those sold by licensed street traders. It was alleged that pedlars create a situation that attracts pickpockets, but again, no evidence was offered. It was also said that pedlars cause obstruction of the highway. Little evidence for this allegation was offered apart from a small number of cases where wide and expanding trolleys had been used.

The witnesses who spoke for the local authorities were somewhat unconvincing. We heard evidence from pedlars that many council officers and the police are ignorant about the 1871 Act, and we also heard much evidence of a bullying culture on the part of council officials towards honest and hard-working pedlars. I concluded that the real reason why these councils wish to exempt themselves from the 1871 Act is that they are control freaks who resent the freedom that pedlars enjoy. I also suspect that there is pressure from licensed street traders, who compete with the few pedlars in their area and who pay considerably more than a pedlar’s licence for their trading pitch. However, for the extra fees that licensed street traders pay, they get the benefit of a fixed pitch where they can trade all day without having to move on. If they think that pedlars get an unfair advantage, there is nothing to stop them applying for a pedlar’s licence themselves.

The committee made several important amendments to the Bills. Pedlars will still be able to operate on the street in the designated areas provided that their trolleys do not obstruct the highway. The amendments set maximum dimensions for the trolleys to bring clarity to this issue. The amendments reduce the number of reasons that a local authority can use to designate an area. We deleted the seizure powers, which we thought could easily have been abused by council officials. We added a requirement for better training of council officials on trading laws and a requirement for local authorities to make their rules and designated areas clear on their websites. We also constrained the value of fixed penalties. Therefore, we have turned what I believe to have been four bad Bills into four not so bad Bills. We have removed or neutered their most repressive aspects.

I have to say that, if it had been down to me alone, I would have made only one amendment to each Bill, and I would have done that with the help of the nearest shredder. But in deference to my more experienced colleagues on the committee, I have agreed to a set of amendments that reduce the detrimental impact of these Bills, and it is the amended Bill that is before the House today.

15:54

[Lord Gardiner of Kimble]

My Lords, perhaps I may acknowledge at the outset the considerable efforts of the noble Lord, Lord Bilston, and pay tribute to his determination to see these Bills make progress. The noble Lord’s patience is remarkable. I should also say that your Lordships’ House is indebted to the committee for its extremely thorough work, and it is very clear that my noble friend Lady Knight of Collingtree has been both kind and firm. The result of the committee’s work is that the Bills are in better shape.

My understanding is that the Government do not normally seek to intervene in private legislation, but on this occasion they have done so in order to take full account of the impact of the European services directive. As many of your Lordships will know, the services directive aims to make it easier for services businesses of all types, including retailers of goods such as street traders and pedlars, to set up and trade anywhere in the European Union. Restrictions on trading must be the minimum necessary and can be allowed only where necessary to defend overarching public interest objectives such as public safety and public order. This means that licensing and registration systems must be justifiable on the evidence and effective in securing the public interest. Blanket bans will not be allowed if there are less restrictive ways of achieving the desired objective and there must be no discrimination in favour of UK-based or local traders.

The Government are currently consulting on changes to the national legislation on street trading and pedlary in order to take account of the directive. The same constraints apply to local legislation. I should say at this stage that this is not a case of the UK being obliged to introduce onerous new regulations against its will. The services directive is fundamentally a pro-enterprise measure designed to build the single market and successive Governments have supported this kind of deregulation.

In October 2011, during the Committee stage of these Bills in your Lordships’ House, the Government raised their concerns about the compatibility of the Bills with the services directive, in particular Clauses 4 and 5 of the Bills. As a result of the concerns raised both by the committee and the Government, Clauses 4 of the Bills were totally removed and Clauses 5 were adequately amended. As the Government’s concerns have been addressed, the Government have no objection to the further progression of the Bills through this House.

If your Lordships will permit, I would like to say a few words about the Government’s further plans in this area, and I am reassured that noble Lords have already welcomed much of what has already been said in this regard. As has been mentioned, the Government’s consultation on draft regulations to amend the national street trading regime and repeal the UK-wide Pedlars Acts of 1871 and 1881 was published on 23 November and will run until 15 February next year. On conclusion of the consultation period, the Government will fully consider the views of the respondents before a final set of draft regulations is laid in Parliament. The Government are open to amending local legislation through these regulations at the same time, if the relevant local authorities so wish. Referring to the point made by the noble Lord, Lord Blair, the Government have asked in the consultation that local authorities ensure that they screen their legislation. If they identify provisions which require amendment, they can use the Government’s regulations to make the changes. I will also refer to the point made in different ways by the noble Lord, Lord Glasman, and by my noble friends Lord Strasburger and Lord Lucas, about the historic—indeed ancient—role of pedlars. In my view as a rural man, this relates to the analogy of acorns growing into oaks of commerce. My noble friend Lord Lucas referred to founding businesses and we must surely encourage this.

The Government will watch carefully to see if the new legislation creates particular problems for local authorities and if they emerge, the Government are open to considering further changes to national legislation, if appropriate. However, on this occasion I think the balance has been struck correctly and I reiterate the Government’s continued thanks to the noble Lord, Lord Bilston, and to the committee for their work in getting this matter right.

16:00

[Lord Bilston]

My Lords, I sense that the House wishes my reply to be brief. I can be brief, in the sense that a great deal of the meat of this important question has been dealt with by the members of the committee. Every member of the committee made the point that I made at the outset: that it is due to the able chairmanship of the noble Baroness, Lady Knight, and the integrity and wisdom of the committee in bringing forward the points and amendments that it made, that a fine and fair balance has been struck between the needs of pedlars and those of legitimate market traders and local authorities. I entirely accept the stricture of the noble Lord, Lord Blair, that there is a long way to go. However, it is not for the want of people like myself urging previous Governments to take hold of this issue and deal with it, as we did at Second Reading. We now understand consultation will take place in order to have a national solution which will be dealt with in a national way, rather than with these private Bills.

As we have heard, anomalies will now arise, because Bills have been passed giving greater powers to local authorities in this matter than are being given in the four Bills we are debating today. The way that these Bills have been dealt with creates anomalies and that is why we always wanted a proper national solution from the Government of the day. I hope this will be forthcoming. I again thank the noble Baroness, Lady Knight, and all the members of the committee for working in B-flat harmony to bring about this happy conclusion for the four local authorities for which we are moving these Bills and for the pedlars who will have a sense of fairness and justice awarded to them. I commend the Bill to the House and thank all noble Lords for their participation.

Amendments 1 to 3

Moved by

[Lord Bilston]

1:Page 1, leave out “and touting”

2:Clause 2, page 2, line 13, leave out “Valley”

3:Page 2, line 22, leave out “street” has the same meaning as in Schedule 4 to the 1982 Act.”

Amendments 1 to 3 agreed.

Bill passed and returned to the Commons with amendments.

Leeds City Council Bill

Monday 3rd December 2012 Lords Chamber

Third Reading

16:05

Bill passed and returned to the Commons with amendments.

Nottingham City Council Bill

Monday 3rd December 2012 Lords Chamber

Third Reading

16:05

Bill passed and returned to the Commons with amendments.

Reading Borough Council Bill

Monday 3rd December 2012 Lords Chamber

Third Reading

16:05

Bill passed and returned to the Commons with amendments.

Draft Cumbria (Electoral Changes) Order 2012

Monday 3rd December 2012 Lords Chamber

Motion of Regret

16:06

Moved By

[Lord Liddle]

That this House regrets that the draft Cumbria (Electoral Changes) Order 2012 has been produced with inadequate consultation with the County Council and other interested parties; without a simultaneous review of the district council ward boundaries with the consequence that the electorate will be confused as to their local representation; and with serious flaws in the process conducted by the Local Government Boundary Commission for England (LGBCE) that specifically contravene the requirements of the Local Democracy, Economic Development and Construction Act 2009 that the LGBCE base their recommendations on population forecasts for five years after the Order comes into force, given that the LGBCE admit they do not have the legally required information for 2017.

[Lord Liddle]

My Lords, I beg to move the Motion of Regret in my name on the Order Paper. I apologise to the House for having to raise this matter on the Floor, but it is an important one because the Local Government Boundary Commission for England has behaved, I am afraid, in what I consider to be a bureaucratic and insensitive way and has not obeyed its own rules. On all sides of the House, there is support for the principle that boundaries of constituencies, county divisions and borough wards should be set by a process that is independent of party politics and that those boundaries should be reviewed periodically to ensure broad equality of representation. However, the contention of this Motion of Regret, and my reason for moving it, is that there were very serious flaws in the way that the Local Government Boundary Commission for England acted in relation to the boundaries of Cumbria County Council.

There are two points about Cumbria that need to be stressed. First, you are dealing with a very sparsely populated county, with very stable communities with very strong local identities which need to be respected in any review of local boundaries. In my own home town, Carlisle, which particular part of it you were from—such as Denton Holme, where I was from, or Stanwix—defined what kind of person you were. These local identities are very important.

Secondly, and this is a more important point about the process, it is a part of the country where there is two-tier local government. Personally, I regret that and am in favour of a single-tier authority, but I know there is debate about that. If you have two tiers of local government, it is important that they marry together. The problem that we have with two-tier local government is that for most of the public, the districts are the focus of local representation and democratic voice, but it is the county council that has the money and the powers and provides most of the services. There is already confusion about who is responsible for what in this two-tier system and it greatly adds to the confusion if, in revising boundaries for the county council without at the same time revising boundaries for the district, you end up with different bases of representation.

This could have been done differently. The order we have before us also considers town council boundaries, and there is absolutely no reason why the district and the county could not have been considered together. Instead, what appears to have happened was a mechanical, computer-driven process of equalising the wards by drawing lines on maps—which, incidentally, no local people can actually read when they try to print off those maps—but also a process that was without regard for local community ties.

Again, I cite an example from the city that I know best. Ever since my childhood there has been a ward on the west side of Carlisle round the area of the Brunton Park football ground, called St Aidans, and this has completely disappeared. The area where my parents lived for most of their lives, which is called Currock, is being split in two and half of it is being amalgamated with another part of town that is quite distinct from this area. These are bureaucrats who have applied computer principles; they are not people who have looked at local communities.

It also seems strange to introduce a wholly new set of boundaries within four or five months of the elections for the county council next May. People will discover that councillors who have represented them for decades no longer represent them. This simply adds confusion for confusion’s sake. This was a rushed job, in my view, and also did not comply with the legal requirements that the Boundary Commission is supposed to take into account when it revises boundaries.

There is a requirement to take into account population forecasts for five years for each of the wards. The Local Government Boundary Commission for England did not have that information available. It had information for the population forecasts for the districts only up to 2016, when the law requires it to have forecasts up to 2017. It used those population forecasts pro rata to each ward rather than looking at the circumstances on the ground in each ward. Of course, that information would have been available to the Boundary Commission if it had done the district boundaries at the same time because the district councils, as the planning authorities, hold the detailed information about what developments are likely in the coming period.

I am moving this Motion because I believe that the Boundary Commission has behaved with a lack of common sense. It has exceeded its authority and refused to admit its error. While it is right that the Boundary Commission should be independent in its judgments of boundaries, it cannot be independent of the statutes that govern its operation, nor can it be independent of scrutiny if it behaves in an arbitrary and bureaucratic way. I hope that this Motion will give the Boundary Commission an opportunity to think again. I beg to move.

[Lord Campbell-Savours]

My Lords, I only wish that the Government could have rejected the product of this review before bringing this before Parliament. The truth is that no one anywhere in the county of Cumbria asked for this review at district, town or county level. Indeed, I quote the Conservative leader of Cumbria County Council in his letter to the Commission on the 8 September 2010:

“I am concerned that the review of Cumbria County Council’s divisional boundaries is to take place in the next few weeks. That there is a need for such a review … I do not contest”.

He goes on to express his “considerable reservations” as to the limited nature of the review, the lack of a full consultation with the county council about the nature of any meaningful review that should take place.

There was one small problem in the county, one ward—Dalston and Cummersdale, near Carlisle—which has led to all this public money being spent, and it could have been resolved by some minor decisions being taken in the structure of county council wards. The county has provoked an anomalous position with overlapping district boundaries, which will probably provoke an equally unnecessary district boundary review, which no one wants and on which no one wants to spend public money, leading to the further use of district and county authority resources.

16:15

If the review were to take place—in my view, and that of most people in the county, it should never have taken place—it should have been done in conjunction with the districts, following consultation. If that had been the case, it would probably have been many years before any review had been undertaken and a lot of public money would have been saved. As Mr Eddie Martin, the Conservative leader of the council, put it in the same letter to the Local Government Boundary Commission for England, this review

“is an unnecessary distraction which we could do well without”.

My contribution today is to ask a series of questions to which, if they cannot be answered at the Dispatch Box now, I would like answers in writing so that they can be circulated within the county. First, what has been the cost to the Local Government Boundary Commission for England of this review, which everyone believes was totally and utterly unnecessary? What would have been the cost if, at some later stage, when it was finally necessary, the review had encompassed both district and county authorities? What would have been the saving to the Cumbria council tax payer?

My noble friend Lord Liddle raised the question of Schedule 2 and the projections for 2017, which were not taken into account because the data for 2017 were not available to the Local Government Boundary Commission for England. It simply guessed. In an e-mail to the Labour leader of Cumbria County Council, Mr Stuart Young, on 31 July 2012, the commission stated:

“As explained previously, the Commission has had to make a number of assumptions to make good the lack of detailed forecasts at polling district level from your Council. Nevertheless, the Commission judged that the forecasts, such as they were, gave sufficient basis to proceed with the review and settled its final recommendations in May. The final audit we chose to undertake since has not given any cause to alter the view that the figures are fit for purpose, within an acceptable range of inherent future uncertainties”.

That is not what the law requires. The law requires something far more accurate: a description of what the statistics would be in 2017, but with that reference to,

“an acceptable range of inherent future uncertainties”,

the Local Government Boundary Commission for England somehow believes that it is meeting the requirements of the law.

My next question is: is it actually meeting the requirements of the law? Does not its decision to proceed in that way in the county of Cumbria have implications for all future Local Government Boundary Commission for England reviews in all other counties nationally? I am sure that all county authorities will be interested in the Minister’s response. Furthermore, I would like to know what constitutes an acceptable range. That should be qualified for the benefit of others in future.

I turn to the local responses to the review. Again, they turn on the issue of public money. I have here an e-mail from Egremont Town Council. Yes, these are very parochial issues to be raising in the House of Lords, but the point about this debate is that what we are doing in this order has implications for other counties throughout the country. The concerns being expressed by the two local councils to which I intend to refer may well be mirrored in other authorities in the event that their reviews are carried out on a similar basis.

“Egremont Town Council object to the proposed change in that it will result in the parish of Egremont being divided into 4 divisions, this, we feel will add an additional financial burden on the Parish as more polling stations will be needed at an average cost of £1,000 per station”.

We are talking here about a parish council with almost no money available to it having this additional expenditure imposed upon it. The e-mail continues:

“The proposals create an Egremont East Ward that has approximately 5 houses which seems ludicrous. It is disjointed what we have and will create a polling day nightmare that will prove very confusing for many when on one sheet they will be voting for a Parish Councillor for Egremont East”,

and then it refers to overlap with other wards in the same area.

I have another letter here from Maryport Town Council, where it equally expresses its concerns. It is a letter to Sir Tony Cunningham, the MP for Workington, expressing its concern to him:

“The Council asked that I write to you expressing its dissatisfaction with the proposals for a north/south split of the Maryport area wards rather than the current east/west split arrangements. The Council considers that the current arrangements are perfectly adequate and that the arguments for the proposed arrangement are not strong enough to merit a change from a division that is working perfectly well”.

There is no politics in this; there is no gain to any political party. It is all being done neutrally, but what is happening is that relationships built up between constituents and their council representatives, sometimes over decades, are being smashed to bits, ruined and destroyed because of the turn of a pen of a bureaucrat, probably sitting in an office in London, who has no immediate knowledge of what is going on within particular wards in the county of Cumbria.

I only wish that it had been possible to stop this process proceeding. I do not know what the legal position is. I presume that now that this order is going through it will all be implemented. However, the Local Government Boundary Commission for England should realise that sometimes it should simply stop what it is doing, because no one wants what it is doing. It is forcing local authorities to incur public expenditure which they can ill afford at this time. The reality is that the Local Government Boundary Commission for England seems unstoppable; it seems just to keep on going irrespective of pressures at a local level. I can only put it this way: if Carlisle were burning, the Local Government Boundary Commission for England would still be drawing up wards for that town. That shows the nature of the problem.

[Lord Judd]

I am glad to support my noble friend Lord Liddle in bringing this Motion before the House. It is difficult to think of a county in which there is a stronger sense of tradition and community than Cumbria. It is very deep indeed—partly, of course, because it is right out there to the west of the country and not part, perhaps, of the mainstream of the United Kingdom, but very much a county with its own sense of identity. That sense of community in the county is built on a strong sense of community in the local communities of which the general community of Cumbria is comprised.

When I look at what has happened and listen to my noble friends, with all their experience—much longer than mine—of the county of Cumbria, it is clear that, if one had set out to try to disrupt something which is good, healthy and robust in the life of Cumbria, one could not have done much better than to introduce the ill considered and insensitive proposal before us.

It is impossible to speak to this subject without making reference to what has been going on with respect to constituency boundaries as well. People are in a real state of muddle about where they belong, where their loyalty is, who is representing them and for what. For democracy to succeed, it is essential that people are absolutely clear about who they are holding to account and who is representing them in the local authority, the county and nationally.

I believe that the Motion and the passion with which it has been introduced are related to the heart of democracy. It is an illusion to think that one can have a healthy democracy made up simply of individuals going to the polling station and voting. A healthy democracy is made up of individuals finding their place in the community, discussing with fellow members of that community what the issues are, making relationships and making strong representations together. The heart of democracy lies in that community life and, on the basis of that life, on then being able to hold people meaningfully to account, not just on election day but throughout the periods between elections.

I am certain that we need to think very carefully about what is being done on boundaries in so many different contexts; the measures are destroying the sense of community that is an essential element in a healthy, thriving democracy. These proposals certainly do not put that right.

I am glad to see that a Liberal Member of the coalition is going to reply to this debate. If the Liberal Democrat party prides itself on anything, it is its history of involvement in the community and its activity in community politics and the rest. I am sure that the noble Baroness will have listened to every word that has been said and will cheerfully and willingly undertake to ensure that this entire serious matter is reconsidered.

[Lord Clark of Windermere]

My Lords, I shall not detain the House for more than a couple of minutes; I just want to participate in this debate that my noble friend has initiated. I agree very much with him about the strength of community in the county—not only in Cumbria, though, but in other countries as well— while starting from the opposite end: I am not in favour of a unitary authority covering such a vast area as Cumbria. However, I am in favour of a two-tier system of local government. Because of that, I am concerned about this recommendation from the Local Government Boundary Commission for England, which seeks to address only the issue of the county electoral boundaries, not the local ones. We all know that one of the problems of democracy at the moment is the identification of individuals with their council. This just adds another area of confusion where there are different boundaries for the two-tier system of government.

I submit that these proposals were made too late for the election beginning next May; they were laid on 31 July this year. There has been practically no publicity whatever in the county of Cumbria. I doubt whether 1% of the electorate know anything about them, and they are going to get quite a shock when the election comes next May.

[Lord Harris of Haringey]

My Lords, this is a living Chamber and I believe that procedure evolves all the time among your Lordships. I therefore find myself in a rather strange position—because the Local Government Boundary Commission for England, set up under the 2009 Act, is independent of the Government—of having drawn the short straw in responding both to my noble friend’s Motion of Regret and to the comments made by my noble friends Lord Campbell-Savours, Lord Judd and Lord Clark. A quadrumvirate of people I respected more would be extremely difficult to find, but it is important for your Lordships to understand the context in which these changes have been put forward by the Local Government Boundary Commission for England.

The commission was set up with the specific and sole remit to review electoral arrangements of councils against statutory criteria of electoral equality, giving fair weight to the votes of all electors in a council area; community identity and interests; and effective and convenient local government. It carries out its functions by relying on a mixture of analysis and judgment.

16:30

What we have here, as has been outlined, is a circumstance in which there has been considerable conflict during the course of this review between Cumbria County Council and the commission. I find myself in the position I have often watched with amusement, when people at the government Dispatch Box defend material over which they have had no influence whatever.

However, that does not necessarily mean, as my noble friend Lord Campbell-Savours is inclined to suggest from a sedentary position behind me, that the position is indefensible. My noble friend Lord Campbell-Savours and others have said that the county council has never wished for this review. The advice I have received is that it is the council’s present leadership that has never wished for this review. At every stage the county council has challenged these boundary changes and sought to block their implementation. However, the commission has a statutory responsibility. The Act gives the commission power to conduct a review where it judges it desirable, whether a council wishes it or not. The commission has intervened in Cumbria because its well established criteria of electoral fairness indicate that it should.

The reason is that there is a significant level of electoral inequality for local voters. My noble friend Lord Campbell-Savours has specifically referred to the ward of Dalston and Cummersdale, which includes 33% more electors than the average for the county—not the lowest, but the average. That is a degree of electoral variance which, against the criteria applied universally by the commission, is unacceptable. It means that the value of the vote in that area varies very considerably depending on whether you live in that division or one of the neighbouring divisions. As the commission has a duty to ensure fair votes at local elections, it needed to carry out this review.

[Lord Campbell-Savours]

Did it have an obligation to carry out a review of the whole county on the basis of a single complaint about Dalston and Cummersdale?

[Lord Harris of Haringey]

My understanding is that you cannot make a small change without there being repercussions elsewhere, but in any event the difficulty arises because of the nature of the dialogue between the council and the commission.

As I said, the Act gives the commission the power to conduct the review whether or not the council concerned wishes it to happen. One can understand the reasons behind that. Clearly, a council might want to maintain the status quo because it suited the members of that council so to do. I accept the comments that have been made that this is not the circumstance in these areas. The Act lays down that the council “must” assist the commission by supplying necessary information.

However, I am informed that in resisting the review, the council has in practice failed to comply with its duty to supply information. Clearly, one way in which the council could have moved forward is what happens very frequently with reviews of local government divisions: the county council or the council concerned puts forward its own set of proposals, which the boundary commission then measures against those criteria to see whether or not it applies.

[Lord Campbell-Savours]

I am sorry to correct my noble friend, but I understand that the county council was more than helpful. The problem was at district level, so I think that he has been badly briefed by his commission.

[Lord Harris of Haringey]

As I have said, I am in the position of so many Ministers before the Dispatch Box in that I have not got access to the primary material. However, I am told that, universally in these circumstances, the county council provides the information on population projections because it has the material across the county area. When the districts were asked whether they had comments, they were not able to comment on this because, they said, all the information on the projections was held by the county council. So we have this information, and we have to make the best of what we have before us.

Of course, the commission would have been ready to contemplate the much bigger and more complex review necessary to consider the district councils as well, but only if there had been a reasonable consensus on that being the way forward. Within the individual districts, there were not the same electoral disparities. There has never been that consensus. As I said, the district councils do not present electoral inequalities to merit the review in their own right.

A number of noble Lords have criticised the quality of the consultation. As a matter of course, the commission proceeds carefully through public consultations on council size. The quality of the maps has been criticised. My understanding is that the council was given the full mapping in electronic form, which would have enabled the council, had it so wished, to disseminate and generate local maps in whatever form and as flexibly as it wished.

My noble friend has suggested that the commission was unstoppable in its approach. The reality is that, as a result of the representations made by the county council, the commission extended its usual consultation periods, allowing in total 32 weeks, or eight months—a very generous definition of consultation for those of us who are used to systems of government consultation. It allowed six weeks’ consultation on the total number of councils required; 12 weeks of inviting submissions on electoral division patterns, which would of course have been the point at which the county council could have come forward with a proposal that would have dealt with the single anomalies; and then a further 14 weeks on draft recommendations for new electoral boundaries. By most normal definitions, that is ample opportunity for people to have their say. My advice—again, it may be challenged—is that the county council did not contribute. Its representations were directed only to challenging or delaying the review.

The council has also challenged the adequacy of the electoral projections used in the review, yet these were the projections that it supplied. It complained that because electoral registration is a district council responsibility, it could not be expected to do better. The commission responded that in no previous case has a county council insisted, like Cumbria, that it cannot or will not supply the requested information. That said, I am advised that the commission recognised that questions might be raised on the council’s figures, and took steps to mitigate any ill effects. It judged the council’s overall growth projections reasonable, and not indicative of unusual volatility in the number or distribution of electors over the coming years. It adjusted for known developments. Above all, in drawing electoral divisions, it secured high levels of electoral equality on current registration figures. That is important. If there were subsequent variations, the fact that there was this high level of accuracy at this stage would mean that it would be very unlikely that, over time, the imbalance would become too great.

The council says that the final recommendations will be defective because it had no worked projections for 2017. The commission has the council’s own projections for six years to 2016, which would normally have covered the five years from the completion date set in the Act. The only reason for the delay in completing the review was the extension of the consultation as a result of the county council’s own resistance—meaning that, in this case, the commission had no specific projections for the final year. However, the Act says that the commission,

“must have regard to any”

likely changes, and the commission has explained how it has done so.

Projections are necessarily inexact and the commission resists the council’s attempt to import into the Act the specific requirement to project figures for each year. My understanding is that if the council had persisted and wished to challenge it, it could have made a legal challenge. Indeed that would be the only normal remaining mechanism left to it. It chose not to, maybe because it could not afford to do so or maybe it received advice that the case was not as strong as it should be.

My noble friend Lord Campbell-Savours listed a series of questions, most of which, in terms of the specific costs, I am not in a position to answer. In his powerful contribution about the nature of democracy, my noble friend Lord Judd made some very valid points. Democracy is based on local representatives elected by local communities where there is an affinity between those communities and those who represent them. However, to achieve that affinity and electoral fairness requires a dialogue at local level and it is clear from the discussion that we have had in your Lordships’ House this afternoon that in this instance that dialogue was not as successful as it normally is in other cases.

I hope that on the basis of what has been said with regard to the commission’s rationale and the extensions to the consultation it provided, my noble friend Lord Liddle will feel able to withdraw the Motion in his name. I also hope that the commission will read very carefully the comments that have been made and reflect on their implications both for the way it conducted itself in this case but also in the way it conducts itself in future boundary reviews.

[Baroness Garden of Frognal]

I thank the noble Lord, Lord Harris, for his contribution, and clarify and confirm that these are matters for the Local Government Boundary Commission for England. It is normal procedure in such cases that the Government do not take a position.

[Lord Liddle]

My Lords, I thank my noble friend Lord Harris of Haringey for his robust reply to our Motion of Regret. He has done the Local Government Boundary Commission for England proud; I am only sorry that there does not appear to be anybody from the commission here to have listened to it. Before I sit down, there are a couple of points that I wish to correct.

There is nothing political about this. There was unanimity between the Conservative and Labour members on Cumbria County Council that they did not want this boundary review to proceed. They were not trying to stop it for reasons of party advantage but because they thought it was a completely unnecessary exercise at a time of great austerity when vital services are being cut. They did not want to have to waste their time on it. Frankly, the boundary commission could have dealt with the problem of the overexpansion of the electorate in one ward by simply making some marginal adjustments, such as putting the 1,500 voters into adjacent wards, without having to go through the whole process of a full-scale boundary review, which no one in the county really wants and which, on the eve of an election, has had disruptive effects in terms of local representation and community identity.

I thank my noble friend Lord Harris very much for making the case for the boundary commission; I only hope that the boundary commission listens to this debate and will in future take note of what has been said about how it should proceed. I hope it will accept that responsibility. On that basis I am prepared to withdraw my Motion of Regret.

Motion withdrawn.

Civil Legal Aid (Merits Criteria) Regulations 2012

Monday 3rd December 2012 Lords Chamber

Motion to Approve

16:44

Moved By

[Lord McNally]

That the draft Regulations laid before the House on 29 October be approved.

Relevant documents: 10th Report from the Joint Committee on Statutory Instruments

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

My Lords, in moving the draft Civil Legal Aid (Merits Criteria) Regulations 2012, I shall speak also to the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012. The Civil Legal Aid (Merits Criteria) Regulations 2012 set out the merits criteria both for applications within the scope of the civil legal aid scheme, which are described in Part 1 of Schedule 1 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and for exceptional funding cases that fall outside that schedule.

The merits criteria are those that the director of legal aid casework must apply in deciding whether an individual qualifies for civil legal services. When the director delegates his functions under the regulations to providers or his employees, they will also be required to apply these criteria. The criteria include both general merits criteria and specific merits criteria. Specific merits criteria are applied for particular types of case where the general criteria are considered to be too strict or where bespoke criteria are appropriate for particular types of case.

Noble Lords may be aware of the funding code created under Section 8 of the Access to Justice Act 1999. These regulations replace that funding code. The funding code criteria are based on a list of factors set out in Section 8 of the Access to Justice Act 1999. These include the importance of the case to the client, the prospects of success and the likely costs. The regulations before us are based on a list of similar factors set out in Section 11(3) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The criteria must also reflect the principle that, in many disputes, mediation and other forms of dispute resolution are more appropriate than legal proceedings. I hope that this is a principle we all share. Our approach in making these regulations has been broadly to retain the existing merits criteria. In our consultation on legal aid reform we consulted on one significant change to the current funding code criteria; namely, that legal aid will be refused for any individual case which is suitable for a conditional fee agreement or CFA. That is reflected in Regulation 39(b).

At present that funding code requirement is disapplied for judicial review cases, claims against public authorities and claims for clinical negligence. We have removed these exceptions. We believe that our limited resources should not be focused on cases where alternative options for funding exist. The Legal Services Commission, or the Legal Aid Agency as it soon will become, has significant experience in determining whether a CFA is likely to be a real alternative. If funding is refused on this basis, an applicant can ask for a review of that decision. If they still are not satisfied, they can seek an independent appeal.

The noble Lord, Lord Pannick, has tabled a regret Motion regarding Regulation 53(b). This states that the regulation will substantially reduce the availability of legal aid in public law cases because the word “reasonable” has been omitted in relation to other means of challenging the relevant decision. I am assuming that this is in comparison to Regulation 39(d), which raised concern in the House of Commons.

Let me first explain what this regulation provides. Regulation 39(d) concerns alternative dispute resolution, such as complaints systems which might allow the client to resolve the dispute without issuing proceedings. The director has a wide discretion to decide whether such alternatives are reasonable in the circumstances. This criterion applies to public law, as well as other claims.

By contrast, Regulation 53(b) is about alternative routes to address the problem predominantly through proceedings. No concept of reasonableness is needed here because if there is an alternative route to resolving the problem in proceedings, that should be taken. This is because judicial review should be a tool of last resort. We recognise that the equivalent provision in the current funding code may on its face appear wider. However, in accordance with its published guidance, the Legal Services Commission has in practice applied this provision so that if there is an alternative appeal or procedure that addresses the problem, legal aid will not be granted for judicial review. Regulation 53(b) therefore reflects current working practice.

The Government made clear in Committee in the House of Commons that if pursuing an administrative appeal or other procedure meant that the individual could not obtain the remedy they needed, the director of legal aid casework would have the flexibility to fund. This is because the regulation specifically refers to alternative routes that “are available”. The director would need to interpret this in a realistic way. Where the director of legal aid casework found that alternative proceedings could not provide the remedy that the client needs, funding for a judicial review would not be refused under this criterion. I stress that this point would be put beyond doubt in published guidance.

However, the noble Lord, Lord Pannick, and others have expressed concerns about this matter, and others have expressed very strong anxieties about how we have framed this provision. I am not convinced that such anxieties are justified, but I will listen to what noble Lords have to say and see if, in my reply, I can move further to meet those anxieties and concerns.

I turn now to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012. The noble Lord, Lord Bach, will speak to his Motion shortly, but I would like to explain first what the order does. This order makes legal aid available in relation to a review by the First-tier Tribunal where it has identified an error of law in its own decision on a welfare benefit appeal. It also brings into scope certain applications as required by the 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance. Finally, it addresses a technical issue in relation to legal aid for judicial review.

The first aspect of the order makes available advice and assistance in relation to a review by the First-tier Tribunal where it has identified an error of law in its own decision on a welfare benefit appeal. This follows a commitment made by the Government during Commons consideration of Lords amendments of the then LASPO Bill to explore whether there was a way for independent verification to be used to identify any First-tier Tribunal welfare appeals which involved a point of law.

Of course, appeals to the First-tier Tribunal on welfare benefits matters are appeals against an administrative decision of a public authority. This is quite different from an appeal to the Upper Tribunal, where one must identify an error of law arising from the decision made by the First-tier Tribunal in order to bring the appeal. To appeal to the First-tier Tribunal, the appellant need only set out their reasons for disagreeing with the public authority’s decision in plain language. I understand that many appellants will wish to question whether the public authority has applied the law correctly. But this is precisely the job of the tribunal: to decide what the correct facts are and how the law should be correctly applied to them.

The Motion of the noble Lord, Lord Bach, against this order suggests that the Government have not fulfilled the undertaking given during the passage of the then LASPO Bill in this area. The then Lord Chancellor said at that time that he would “explore the options” available for a system of independent verification. I repeated the same assurances to this House, stating that we were,

“committed to doing further work to see how we might provide funding for those appearing before the First-tier Tribunal whose case also turns on a point of law”.—[Official Report, 23/4/2012; col. 1557.]

That is exactly what we have done. We have given very serious consideration to the various options for independent verification. We have come to the conclusion that imposing an additional task of verifying whether a case involved a point of law on either the judiciary of the First-tier Tribunal, the successor to the Legal Services Commission or the Department for Work and Pensions would be unworkable. This is because it would have resulted in significant extra administrative and cost burdens. We do not consider it right to impose these burdens in the current economic climate.

It is also important to remember that legal aid will not be limited to welfare benefit cases in this area only. We have retained legal advice and assistance for appeals under the Equality Act 2010. We have retained legal advice and assistance for reviews before the First-tier Tribunal, as I indicated. We have retained legal advice and assistance for applications for permission to appeal to the Upper Tribunal. We have retained legal advice and assistance for substantive appeals in the Upper Tribunal. We have retained legal advice, assistance and representation for onward appeals to the Court of Appeal. We have retained legal advice, assistance and representation for onward appeals to the Supreme Court. We have retained legal advice, assistance and representation for welfare benefit judicial reviews. It is important to stress that at no point in progressing our legal aid reforms did we say that it was our intention for all welfare benefit First-tier Tribunal appeals to receive legal aid. The Government’s position throughout has been that in these economic times we need to target legal aid at cases of the highest priority, where it is needed most. That was what the LASPO Bill was about. This is what we have done.

I turn briefly to the second aspect of the order, which brings into scope certain applications to meet our international obligations under the Hague Convention 2007. The convention sets out certain requirements for the provision of legal aid in relation to the recognition, enforcement or establishment of a decision in relation to maintenance, and there are reciprocal arrangements for signatory countries. We expect it to come into force in April next year. The convention is broadly equivalent to the EU maintenance regulations for which services are already made available under Schedule 1 to the LASPO Act. Most countries that have signed up to the convention will already be covered by the EU maintenance regulations—with a few exceptions, such as Norway.

The third part of the order addresses a technical issue in relation to legal aid for judicial review. In our consultation response on legal aid reforms, we confirmed that legal aid would be available for judicial review subject to a few specific exclusions. That remains our position. It is reflected in paragraph 19 of Part 1 of Schedule 1 to the LASPO Act, which puts within scope legal aid for judicial review in almost any area bar the exclusions debated and agreed by Parliament. However, an arguable effect of how the LASPO Act is drafted is that judicial review may be in scope for any area of law listed in Schedule 1, despite the exclusions in paragraph 19. This order simply makes a technical amendment to ensure that judicial review is governed exclusively through paragraph 19, and that the specific exclusions have the intended effect. I hope that this explanation has been helpful and I commend the orders to the House. I beg to move.

Amendment to the Motion

Moved by

[Lord Pannick]

As an amendment to the above Motion, at end to insert “but that this House regrets that Regulation 53(b) will substantially reduce the availability of legal aid in public law cases because the word ‘reasonable’ has been omitted in relation to other means of challenging the relevant decision”.

[Lord Pannick]

My Lords, I tabled a Motion of Regret because the Civil Legal Aid (Merits Criteria) Regulations will very substantially restrict the availability of legal aid in public law cases, particularly judicial review. In his very helpful speech, the Minister indicated that he would listen very carefully to this debate and that he might be able to move further in his reply. Therefore, I will explain the problem in the hope that he will be moved if not by me then by the many noble—and noble and learned—Lords who are limbering up to express their concerns on this issue.

The problem is caused by Regulation 53(b), which states that legal aid for a public law claim will be available only if the director of legal aid casework is satisfied that the individual has exhausted all administrative appeals and other alternative procedures which are available to challenge the decision before bringing a public law claim. Therefore, the director will have no discretion. Alternative procedures must be exhausted before legal aid is available to bring the legal challenge. The problem is that in many of these cases—whether they are judicial reviews, housing appeals or habeas corpus claims about people in detention—it is simply not reasonable to expect the litigant to exhaust other procedures and appeal mechanisms before going to court. The other procedures may take months and sometimes years to arrive at a conclusion. They may involve no power to grant an interim remedy to protect the position of the claimant—for example, if the claimant is challenging the removal of housing provision in the services provided or the removal of services which have been given to him or her to address a mental health problem. The courts themselves recognise the force of this point. If you want to bring a judicial review in the High Court, you must exhaust other remedies except if the court is satisfied that the alternative procedures are less effective or less convenient.

17:00

The vice of Regulation 53(b) is that it will prevent the director granting legal aid if an alternative procedure is available, even if the director is satisfied that the alternative procedure is less effective than judicial review. Indeed, the bizarre effect of Regulation 53(b) will be that legal aid will be least available in the cases where it is most needed because the potential litigant faces an urgent problem which requires an urgent court order and he or she cannot wait for the other procedure to be exhausted.

The previous rules set out in the Legal Services Commission funding code, to which the Minister referred, address the issue perfectly sensibly. They say that legal aid,

“may be refused if there are administrative appeals or other procedures which should be pursued before proceedings are considered”.

So far as I am aware, that wording has caused no difficulties because it confers a proper discretion that allows the funding body to require the use of alternative procedures only if they are equally effective or appropriate in the circumstances of the case. The Minister mentioned that there had been consultation on another aspect of the change in regulations, but as far as I am aware there has been no consultation on the change indicated in Regulation 53(b).

Nor can it be said that this problem can be remedied by implying into Regulation 53(b) the word “reasonable”. The reason that is very difficult is that other provisions of the regulations not dealing specifically with public law claims state that alternative remedies must first be exhausted but only where they are reasonable alternatives. That is what Regulation 39(d) says on the standard criteria for obtaining legal aid. I repeat that the difficulty with Regulation 53(b) is that it omits the word “reasonable”, therefore suggesting that there is an obligation to exhaust all other procedures, however unreasonable it may be to require the person to use those other procedures, before legal aid is granted.

The Minister suggested that Regulation 53 was concerned “predominantly” with alternative court proceedings. The problem with that approach is that Regulation 53(b) speaks of first exhausting,

“all administrative appeals and other alternative procedures”—

all, not some. Indeed, “administrative” suggests a process other than a judicial determination. The Minister in any event said that Regulation 53(b) is concerned “predominantly” with cases where there is an alternative court procedure, so he recognised that the regulation would also cover other cases. Even if the Minister is right that Regulation 53(b) is concerned predominantly with alternative court proceedings—and it is not—sometimes a judicial review is more appropriate than an appeal to a tribunal because, for example, the tribunal may lack the power to make an interim order which the claimant urgently needs.

The other point made by the Minister today was to suggest that, under Regulation 53(b), the claimant has to exhaust other procedures only if they are “available”, which he said provides the necessary “flexibility”. However, with great respect, that is no answer. The problem is not that the administrative and other procedures are not available; it is simply that they are less speedy or less effective than going to court for an immediate legal remedy. The Minister’s final point was that guidance will be issued on this matter, which will of course be very welcome. The problem is that guidance simply cannot cure the enactment of a duty imposed on the director to refuse legal aid.

The Minister will know that a large number of expert organisations, including the Constitutional and Administrative Law Bar Association, Mind and the Legal Aid Practitioners Group, have drawn attention to the defect in the drafting of Regulation 53(b). This restriction on legal aid in public law cases, about which so many people are concerned, is not, as I understand it, designed to advance any deliberate policy of the Government. We are not concerned here with any policy dispute. I say that having had a very helpful meeting with the Minister last week in which he and his officials listened very carefully to the concerns that I, together with other noble Lords, expressed. It would be very surprising if there were any policy dispute here, because the regulations are designed to implement the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The then Lord Chancellor, Mr Kenneth Clarke, gave an assurance in the other place during consideration of amendments to that legislation made by this House. I remind your Lordships of what the assurance was. Mr Clarke said that,

“we are continuing legal aid in all cases involving judicial review, so legal aid is available to someone who is trying to have a welfare decision judicially reviewed. That applies to every kind of judicial review, because we do not think that the Government or a public body should be resisting a claim about abuse of their powers from a litigant who cannot get legal advice. This is not an easy concession to make, because quite a lot of people who seek judicial review are not instantly popular with all sections of society, but we still give them legal aid”.—[Official Report, Commons, 17/4/12; col. 277.]

I say to the Minister that the unhappy effect of Regulation 53(b) will be that legal aid will become unavailable in practice for judicial review and other public law cases where there are other less effective and slower procedures available. I therefore very much hope that in his reply the Minister will be able to move, and that he will be able to assure the House that amending regulations will be brought forward to cure what is undoubtedly a serious defect in Regulation 53(b).

Before I beg to move, I will say something about the fatal Motion of the noble Lord, Lord Bach, because, as I understand it, it is being debated together with my regret Motion. The Motion tabled by the noble Lord, Lord Bach, concerns another set of legal aid regulations. The issue here is distinct; it is access to legal aid for legal advice at First-tier Tribunal level. As the noble Lord will explain, this was a very controversial matter during the passage of the legislation earlier this year. Although most cases in the First-tier Tribunal concern the factual application of the law, some of them raise important points of law. They are very often highly complex points of law which the claimant cannot be expected to address without legal advice. Mr Clarke gave an undertaking, to which the noble Lord, Lord Bach, will refer.

I am very disappointed by the provision now made in those regulations. As I understand it—and it is a complex matter—legal aid will be provided at first-tier level only where the tribunal has already decided the case and recognises that it has made an error of law or seeks representations on whether it has made an error of law. If I may say so, that is a very odd way of addressing the issue because it opens the legal aid door only after the tribunal recognises that the legal horse has bolted, or may have bolted. I cannot understand why those regulations do not adopt the much more sensible and practical course of conferring a power—a discretion—on the chairman of the First-tier Tribunal to certify, on looking at the appeal, that it raises a point of law on which it would be appropriate for the claimant to receive legal aid for advice purposes.

I shall, of course, listen very carefully to the Minister’s answers to the Motion in the name of the noble Lord, Lord Bach, and I very much hope that the Minister will be able to move on my regret Motion. I beg to move.

[Lord Bach]

My Lords, I rise to support the noble Lord, Lord Pannick, in the amendment that he has just moved, and also to speak to my Motion which I will move at the appropriate place. Before I speak to my amendment, perhaps I may say that I support unreservedly the amendment in the name of the noble Lord, Lord Pannick, to the Civil Legal Aid (Merits Criteria) Regulations. All noble Lords who have had the benefit of listening to his speech will have seen the logic and force of what he had to say. I suspect that there is no serious argument but that he is correct. I look forward, if it is necessary, to supporting him in the Lobby later on.

What I am doing with my Motion is to ask the Minister to withdraw the order that I have prayed against—namely the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012—so that it can be reconsidered as a fresh order when it is laid again. I am not seeking to go behind the Act of Parliament. I still believe that many parts of it are entirely wrong and an enormous mistake, but whether I like it or not, Parliament has passed it. It will come into force on 1 April 2013 and we will have to see what the consequences are, but that is not the point today.

17:15

There are two main grounds for my request for the order to be withdrawn and they are linked together. If the order is not withdrawn, I will ask the House to decline to support it. That is why my amendment can be described as fatal, although in my view it is rather too emotive a term and is a somewhat misleading description because the Government can always come back with something that is acceptable to the House. So-called fatal amendments may be rare, but they are not that rare in this House. We have had 27 since 2000 instigated by Peers of all parties and of none. Indeed, I am in good company today in moving a fatal Motion because no one less than the Minister himself moved one—some time ago, let it be said—and pressed it to a vote. I also feel more content about moving a fatal Motion as I happen to have discovered that the Leader of the House, who is not in his place at present, has also been known to support such Motions in the past.

My first ground, and one that I hope will appeal to all parliamentarians, is that Her Majesty’s Government undertook on 17 April this year in the House of Commons to bring forward secondary legislation to allow eligible appellants to a First-tier Tribunal legal aid if their appeal is based on a point of law, but that in the event the Government have failed to honour this undertaking and are offering instead, as the noble Lord, Lord Pannick, has just said, a much narrower and, in the words of Citizens Advice, a “completely inadequate” alternative. Again, in the words of the Citizens Advice briefing:

“It would appear the Government is not making any commitment at all to provide legal aid for people to prepare appeals to the first-tier tribunal, even when that appeal is on a point of law”.

Let me take your Lordships back to the other place which, on 17 April, was involved in ping-pong, as it is described these days, with this House. Three weeks earlier, the noble Baroness, Lady Doocey, had successfully moved an amendment that would have allowed legal aid for legal advice for welfare benefit preliminary reviews and hearings; in other words, the position that has prevailed for many years in this country and is supported by a wide consensus from all political parties. She won her amendment by 39 votes. Her Majesty’s Government wanted to overturn the Doocey amendment, but faced a similar amendment from the honourable Tom Brake MP. It was a critical moment for this highly controversial legislation. The Brake amendment, if pressed, could well have passed the House of Commons and the Government would have lost a central plank of their Bill.

The Government needed to make a meaningful concession on First-tier Tribunals to avoid defeat. The then Lord Chancellor accepted the argument that if Second-tier Tribunal, Court of Appeal and Supreme Court appeals, all of which can be made only on points of law, can attract legal aid, then it is logical that welfare benefit cases should attract legal aid at the First-tier Tribunal as well, so that any point of law case in the First-tier Tribunal is legally aided. In such a case it would be absurd not to allow the appellant at a First-tier Tribunal at least some legal help or advice to prepare for their point of law appeal. The then Lord Chancellor stated:

“just as we have accepted the argument about legal issues in the upper tribunal, we could of course do so if the same thing arises in the lower”—[Official Report, Commons, 17/4/12; col. 226.]—

meaning the lower tribunal.

Anyone present at that debate in the House of Commons that day—and I was sitting in the Peers’ Gallery myself—was in no doubt that there was an undertaking to find a way to give appellants in points of law cases legal aid. The intention to do this was understood by everyone on all sides present in the Chamber. Certainly Tom Brake thought so. In agreeing to withdraw his amendment, he said:

“I also welcome the Justice Secretary’s clarification that it is the Government’s clear intention that, whether the points of law are for the upper or lower tribunals, these cases should be funded by legal aid”.—[Official Report, Commons, 17/4/12; col. 243.]

There was a “clear intention”. What happened next was that the Lords amendment of the noble Baroness, Lady Doocey, was overturned, and on 1 May the Bill became law. Many of us thought at the time that the concession did not go far enough, but whether it did or did not, none of us imagined what would follow.

On 18 September, the Parliamentary Under-Secretary of State at the Ministry of Justice, Mr Jeremy Wright, made a Written Ministerial Statement to another place in which he set out the Government’s solution to the concession. This is what is in Article 3 of the order before us this afternoon. The solution, I argue, is rather shocking. Instead of allowing legal aid in points of law cases at First-tier Tribunal, the Government will not allow any such thing. Instead, only in the extremely rare cases where, following the First-tier Tribunal decision the tribunal itself says it has made an error of law and sets up a review to decide what to do about it, will legal aid be even possible. In order to get to this stage, an appellant who has lost at First-tier Tribunal would have to draft his or her notice of appeal. This is an appellant who has received no legal help. Remember: this is about points of law, not about facts. So an appellant has received no legal help, no legal advice prior to or during the First-tier Tribunal or worked with a notice of appeal after the First-tier Tribunal. If the solution applies to anyone, it will be to very few people for a year.

Why have the Government given up and come up with something so different and so much less than they undertook? My guess is that the official asked to come up with a solution was told that it should not cost anything, even though the cost of the concession would have been minimal—perhaps about £5 million at £160 a case. I will remind the House that this is approximately one-twentieth of what the police commissioner elections have cost this country. Whatever the reason, my amendment is based on the belief that no Government—whatever their colour—should be allowed to get away with this. An undertaking to Parliament, even one made in extremis, must be kept. If it is not, then Parliament should insist. This is not a party point. Yes, I am proud to sit on these Benches, but it would not matter which Government of whatever colour were involved. Parliament should just not be treated like this. It is not common sense.

Briefly, my second reason for this amendment is bound up with the first. A very large number of appellants at First-tier Tribunal are disabled people appealing against decisions by the Department for Work and Pensions, whether in relation to employment and support allowance, disability living allowance or industrial injuries. Others appealing are often working men and working women who have been the object of other wrong decisions about benefits which they are entitled to. All these appeals are vital to the citizens who bring them. That is why early, inexpensive legal advice has been so important. It means that hopeless cases do not clog up the tribunals and that appellants can put their case better.

I have to accept that in the vast majority of cases legal aid will no longer be available after 1 April. However, many of the minority of cases that involve points of law are brought by disabled appellants and it has got to be common sense, and just, that they should receive some—some—legal advice. How can they be expected to know or understand the legal points that arise in their case? The Government agreed with that proposition in April; for some reason they do not now. Surely they should think again, and that is what I am asking them to do. In due course I will seek to move my amendment.

[Lord Mackay of Clashfern]

My Lords, I will speak in relation to both these matters; not in order of importance but in the order in which they were taken, so I will speak first to the amendment of the noble Lord, Lord Pannick.

As I understand it, what the noble Lord, Lord Pannick, finds difficult is Regulation 53(b), which requires that the director whose job it is to decide such matters has to be satisfied that,

“the individual has exhausted all administrative appeals and other alternative procedures”,

which are available to challenge the act, omission or other matter,

“before bringing a public law claim”.

That is not just judicial review; it is quite a wide area of law, including habeas corpus jurisdiction, as the noble Lord, Lord Pannick, mentioned. However, this is not the whole of this matter. It is interesting that it is Regulation 53, because I think that the original rule of the Supreme Court that brought in judicial review was Order 53. It is a strange coincidence, but not particularly important. What is important is that, apart from what I have just read, the beginning of Regulation 53 requires that,

“the Director must be satisfied that the criteria in regulation 39 (standard criteria for determinations for legal representation) are met”.

So Regulation 39 has to be met before you come to this regulation at all.

The noble Lord, Lord Pannick, briefly referred to Regulation 39. It includes this provision at sub-paragraph (d), requiring that,

“the individual has exhausted all reasonable alternatives to bringing proceedings including any complaints system, ombudsman scheme or other form of alternative dispute resolution”.

I understood my noble friend Lord McNally to suggest that that only applied to a limited number of alternative procedures—but it says “all reasonable alternatives”. I cannot see how it is possible to have Regulation 39, with that provision in it, and Regulation 53(b), which requires that that regulation is accepted, and also adds this. The two seem to be contradictory. It is not just the point that the word “reasonable” is used in Regulation 39; it is incorporated into Regulation 53 at the beginning. It simply does not make sense. That is the short and long of it.

17:30

This matter was looked at by the Secondary Legislation Scrutiny Committee in its 14th report. On page 15, paragraph 44, it says:

“The Committee noted some variations in the terminology used in the Regulations and expects the guidance to make absolutely clear why these distinctions are made. For example, regulation 39(d)”—

the one I have just read—

“includes a test of reasonableness requiring the individual to have ‘exhausted all reasonable alternatives to bringing proceedings’ whereas regulation 53(b) does not include a similar test and requires the individual to have ‘exhausted all administrative appeals’, which would appear to be a higher threshold”.

Regulation 53(b) does not include a similar test, but Regulation 53 as a whole does because Regulation 39 is incorporated at the beginning of Regulation 53. Therefore the matter is quite clearly set out as a complete contradiction within Regulation 53 itself.

In my submission, Regulation 39(d) includes all alternatives, as it says, and the same is true of Regulation 53(b). The obvious solution is to delete Regulation 53(b) altogether and leave Regulation 53(a) as the only additional requirement. I hope that my noble friend will feel able to do that because I cannot accept the view of the Secondary Legislation Scrutiny Committee that guidance can solve this matter, because Regulation 53(b) is not alone as part of Regulation 53 because Regulation 39(b) is in it as well. The guidance cannot resolve a dispute—or at least a difference—on the terms of the statutory regulations. That is not the function of guidance. The guidance is supposed to explain what the regulations mean. However, it is hard to explain two different contradictory tests in the same area. That is beyond the scope of any guidance that could be offered.

The amendment in the name of the noble Lord, Lord Pannick, is well taken. Obviously, my noble friend does not need to withdraw these regulations because they deal with quite a lot of other things, but a simple amending regulation would solve this problem. I rather got the impression from my noble friend that the intention was that reasonable alternatives would be taken into account in Regulation 53(b), although it was not expressed. The difficulty is that when the contrary is expressed earlier on in the same regulation the difficulty is extreme. If a Minister has given an undertaking to Parliament, a regret Motion seems the right way to bring that to the attention of the House when the regulations are in question.

I turn to the amendment in the name of the noble Lord, Lord Bach. If I have understood the situation, and I am very capable of being corrected—very susceptible to being corrected is perhaps what I should say—on this matter, the regulation to which the noble Lord, Lord Bach, refers is complicated. It allows a person legal aid under the regulation if he is invited to make a representation on requesting a review. My impression is that any appellant will be entitled to ask for a review. If the appellant asks for a review and he is invited to make representations, he will have legal aid to do that. However, if he is not asked to make representations and the tribunal goes on to make a decision on the review without his representations, the second branch comes in and he is entitled to legal aid. If I have understood the set-up correctly, where there is a challenge to a decision of the First-tier Tribunal, that is done by representations to that tribunal, and in that situation the regulations permit legal aid—as far as I understand them.

[Lord Bach]

With the greatest of diffidence, I rise to try to explain the situation as I see it. The respect I have for the noble and learned Lord is well known. My understanding is that what the Government propose comes at the end of the First-tier Tribunal hearing. Therefore, leading up to the First-tier Tribunal, whether or not on a point of law, there would be no advice at all to the appellant. During the tribunal hearing there would be no advice to the appellant. Only if the appellant after the event decides to ask for facts and reasons and, after that, puts in a notice of appeal, will there be the slightest chance that he might get legal aid at that stage.

[Lord Mackay of Clashfern]

With great respect, the noble Lord’s own explanation shows that what happens is that the First-tier Tribunal makes a decision and that is one in a very large number of decisions. If somebody wants to make a representation against that decision, asking for a review, the tribunal can invite representations at that stage; if it does, the applicant, as long as he was the original appellant, can get legal aid. If, on the other hand, the tribunal decides, “We do not want representations, we know that we are right”, it goes ahead with the review and comes back to the same decision; because an application has not been opened with right of representations at that stage, the second branch of the regulation gives legal aid. That is how I understood it but I may be wrong.

[Lord Bach]

I am sorry to come back, but it is only if the tribunal finds an error of law. An error of law has to be found by it first; then a review takes place. It is only in those circumstances, which are very rare indeed, that legal aid could be available at post First-tier Tribunal level. The other thing they might do is appeal to the Second-tier Tribunal, when other considerations would arise. However, it does not and cannot happen in every case. As I understand it, an error of law has to be found by the First-tier Tribunal after it has made its decision.

[Baroness Doocey]

My Lords, I support the amendment proposed by the noble Lord, Lord Bach, because I believe that the Government’s present proposals will be catastrophic for many thousands of people. During the passage of the Bill, provision for legal aid funding and advice for assistance in welfare benefit appeals made to the Upper Tribunal on a point of law was included in the legislation. The Government also conceded that the same point of principle should apply to the consideration of points of law by the First-tier Tribunal. The Lord Chancellor said, in reference to First-tier Tribunals:

“We are quite open to the argument for ensuring that we have legal representation when there is a legal issue that we cannot expect a lay person ordinarily to argue”.—[Official Report, Commons, 17/4/12; col. 226.]

However, the Government have honoured neither the spirit nor the letter of that commitment. The conditions they have laid down for legal aid to be available require so many planets to be in conjunction that, in practice, it is doubtful that the vast majority of claimants could ever meet them.

My prime concern is the needs of disabled people, who will be disproportionately affected by the removal of welfare benefits from the scope of legal aid. By not considering whether a point of law is involved other than when a further appeal is being pursued, the Government are effectively denying legal help to a significant proportion of disabled people whose appeal cases could nonetheless be considered to raise a point of law.

According to the Government’s own impact assessment figures, restricting legal aid to cases where the First-tier Tribunal itself identified that it erred in law would keep legal aid to just 696 welfare benefit cases in lower tribunals. That represents only a tiny proportion of the 135,000 welfare benefit cases each year. Of those 135,000 cases, 78,000—nearly 60%—involve disabled people who currently rely on legal aid for welfare benefit appeals.

What makes the situation worse is that the Government are in the middle of a major overhaul of the welfare benefits system. Millions of claimants will be reassessed and moved on to different benefits. During the transition period, disabled people will increasingly need expert legal advice to challenge inaccurate decisions about their benefits. The lack of legal aid to pursue an appeal in the first place will mean that disabled people are unlikely to reach the stage where they can get legal aid, as the vast majority of claimants are unlikely to recognise a point of law.

Legal aid for welfare benefit claimants costs an average of £150 a case. There can be significant consequences if disabled people do not receive the benefits to which they are entitled, causing considerable financial strain and pushing many of them into poverty. Their long-term costs in terms of demands on the health and welfare system are likely to be an awful lot higher than £150 per head.

As I have argued on previous occasions, the removal of legal aid from welfare claimants is fundamentally unjust. The paltry savings will prove to be a false economy. The Government’s latest proposal has made a bad policy worse. I urge the Minister to reconsider.

[Baroness Lister of Burtersett]

My Lords, I am very happy to follow the noble Baroness, Lady Doocey, who has contributed so much to our discussion of previous legislation on this issue. I shall speak to the amendment to the Schedule 1 order, but I also strongly support what the noble Lord, Lord Pannick, said on the other amendment.

My noble friend Lord Bach made a powerful case. He speculated on why the Government have reneged on their commitment. The only answer that we have received is that the Government say that it is not feasible. I wonder why not. Today, the Minister has argued that it is because of administrative costs, but in my book, administrative costs and feasibility are not the same thing.

Citizens Advice has proposed a number of options to make a reality of the Government’s commitments and made representations on them to the Government. Are those options among those which the Government have reviewed—the Minister referred to a review in passing? Were they considered not to be feasible? If so, why not? Was the suggestion made by the noble Lord, Lord Pannick, considered not to be feasible? If so, why not? Unfeasibility is a vague response. Citizens Advice referred to the Government’s proposal as “irrational”. It criticises the fact that there has been no consultation on it. Can the Minister explain why has there been no consultation?

I finish by referring to an e-mail that I received this morning from a member of the public. She does not stand to be affected by the measures. She calls herself an ordinary woman, “nothing special”, but she is motivated by concern for her fellow citizens—in particular those who are sick or disabled. She refers to the fear that many such people now feel. She writes:

“I am pleading with you … to be fair and just when you ‘discuss’”,

the regulations. She finishes:

“I have never felt so strongly about anything before so forgive me if I am departing from normal protocol. All I know and believe is that this is wrong and it needs to be stopped”.

How right she is.

17:45

[Lord Woolf]

My Lords, I been trying to limber up, and I hope that I am now able to follow what has been said by my noble friend Lord Pannick and my noble and learned friend Lord Mackay of Clashfern. I agree with every word that they said with regard to the amendment to the Civil Legal Aid (Merits Criteria) Regulations, which are the subject of the regret Motion.

In order to understand the context, it is necessary to know that judicial review is, of course, subject to principles which have been judge-made. Judicial review, in the form that it is now, is a judicial invention of which we are extremely proud. We are proud of it because the object of the exercise is to ensure, in particular in relation to public law proceedings, that the appropriate procedure is adopted, having regard to the issues raised.

At one time, it was thought—again, by decision of the House of Lords in the well known case of O’Reilly v Mackman, that it was always necessary to use judicial review in public law proceedings. It was then found in practice that that led to satellite litigation over whether the right procedure had been used or the wrong procedure. The courts sought to produce watertight compartments. Fortunately, that was only a temporary stage in the development of judicial review. The next step was to adopt a much more sensible and realistic approach, which involved proceedings being dealt with in the most sensible and reasonable way. Although the phrase that judicial review should be used only where there was no alternative remedy was retained as a simple method to identify one of the principles, the law had developed beyond that. It was made clear by authority after authority that that was subject to the requirement that it should always be reasonable to adopt the procedure which was proposed: judicial review.

Regulation 53(b) contains the statement that is in accord with the general principle of exhausting alternative procedures, but does not refer to the fact that that is not a rigid limitation, but reflects the nature of the procedure, which requires the court to adopt a reasonable course in considering the matter. As has been pointed out by both my noble and learned friend, Lord Mackay, and my noble friend Lord Pannick, that approach of the courts is almost impossible to adopt as a matter of interpretation because of the language of Regulation 39(d). An additional reason to those which have been given for accepting my noble friend Lord Pannick’s Motion and amending Regulation 53(b) is that if that is not done, the procedures in the courts and the procedure for granting legal aid will be out of sync; they will be in conflict. That cannot be a sensible position. Litigants will be forced not to do the reasonable thing, which is what the Civil Procedure Rules require, because they will not have legal aid if they do that, but to adopt an unreasonable course and bring proceedings by judicial review and then get legal aid. That cannot be a sensible course.

I hope the Minister, having heard the argument before the House, will accept the invitation which has been made to consider the matter again. I would be very happy to adopt the amendment suggested by the noble and learned Lord, Lord Mackay, but would, perhaps, suggest that if it is thought preferable to amend Regulation 53(b), what was intended, I believe—or what, at any rate, it should state—could be achieved by inserting into paragraph (b), “the individual exhausted all administrative appeals and other alternative procedures which it would be reasonable for him to adopt to challenge the act, omission or other matter before bringing a public law claim”.

I should have said that my noble and learned friend Lady Butler-Sloss intended to speak and asked me to indicate that she supports the arguments advanced by the noble Lord, Lord Pannick, and those which I have just advanced.

[Lord Goldsmith]

I want briefly to support both amendments. So far as the amendment moved by the noble Lord, Lord Pannick, is concerned, it is not necessary to say very much after a former Lord Chancellor and a former Lord Chief Justice have both criticised the order as it stands because of the way it operates in different ways. I can summarise my view in relation to it very briefly. This order already recognises that there may be “reasonable” and “not reasonable” alternative procedures. It does that in Regulation 39. However, if one then reads Regulation 53(b), it is very clear that the word “all” must be read as meaning “all”. Therefore, if one expands the meaning, what is being said as it stands is that there will not be legal aid unless the individual has exhausted all reasonable and unreasonable alternative procedures. As soon as one poses the question that way, it becomes absolutely plain that it must be wrong to impose that obligation. I do not think it is necessary to say anything more than that to summarise why the noble Lord, Lord Pannick, and the noble and learned Lords, Lord Mackay of Clashfern and Lord Woolf, are absolutely right.

Let me turn to my reasons for supporting my noble friend Lord Bach in his amendment. I recall very well the clear and powerful way in which the noble Baroness, Lady Doocey, moved the amendments which led to this particular issue. They were strong and supported by a majority of this House. I have read the debate—though I did not listen, as my noble friend Lord Bach did, to the debate itself—which took place in the other place. It seems clear to me that what was being said was that a way would be found to enable legal aid to be provided in the first tier where there were points of law. The concern expressed by the Government was that they did not want that to be a point of law just because it was so stated by the claimant or the claimant’s lawyer. That is clear in column 266. However, the Government have not ended up with that at all. They have ended up with something which appears—if my understanding of the way the procedure works is right, and it follows that of my noble friend Lord Bach—to mean that legal aid does not come into the picture until after the event. That may be appropriate in certain other circumstances, but not here.

What one needs in these circumstances is the ability to identify a point of law which will be relevant and necessary for a particular applicant—particularly a claimant of the sort to which the noble Baroness, Lady Doocey, referred—to be able to put that point of law before the tribunal. I fully endorse her point that most claimants do not recognise a point of law when they see it. I suppose that as a practising and paid lawyer, I am quite pleased, on the whole, that that is the case, although I do not actually practise in this area. The point is this, however, and I ask the Minister to answer this question: why could the way the Government limit this not be by the chairman of the tribunal identifying the point and certifying it at the outset rather than waiting until after the event?

There is one point which connects these two amendments, and it is what drives me to want to persuade the House to support them. In LASPO, we were faced with changes which, for many of us, were very difficult to accept. The Government put them forward on the basis of economic necessity. However, there was a strong belief that there were cases where justice required that there should still be some opportunity for legal advice to be taken and used. In these particular cases—public law and cases involving claimants with disabilities, for example—the Government are failing to give effect even to that limited, modest exception that they were prepared to allow. I very much hope that the Government will think again in the light of this debate.

[Lord Phillips of Sudbury]

In the light of what I am going on to say to my noble friend Lord McNally, I would first like to say that the whole House well understands the exigency that led to the LASPO Bill. However, as my noble friend Lady Doocey forcefully pointed out, and it cannot be repeated enough, in the realm of social welfare law, there is a singular obligation on us as parliamentarians to will the means of accessing those benefits. Unless we do that, everything that Parliament does is a charade or a sham; because it is cynical on our part not to give the people most in need in our blessed country—the poor, those lacking in self-confidence, those without a scintilla of understanding of the law and those who can scarcely read a Bill and understand it—the real opportunity to access the benefits we are proud to bestow on them. It puts this realm of public expenditure into a special bracket. There are very few areas of expenditure, I suggest, that really come within that narrow purview.

It was interesting to hear the noble and learned Lord, Lord Goldsmith, talking about lawyers looking forward to these rather nuggety issues in social welfare—it was a joke of course—but the reality is that no lawyer goes into the realm of social welfare law to line his or her pockets. I can tell the House that only the most socially minded lawyers subject themselves to practising in this field.

I hope my noble friend Lord McNally will accept my next point. In all the fields of law, there is nowhere more complex than the forest of social welfare legislation. It runs to hundreds and thousands of pages. It is utterly futile to pretend that the ordinary bloke can begin to put together the grounds for going to the director to ask for support to launch an appeal if he or she has got to understand the legal background and legal prospects, because that is way beyond the capacity of all but a very small number.

My final point is this. When the noble and learned Lord, Lord Mackay of Clashfern, was five minutes into his speech, I wondered whether he had, by mistake, picked up my notes. Every single word he said about the clash between Regulations 39(d) and 53(b) was absolutely the same as what I was going to say. The only thing I would add to it—and this is addressed to my noble friend Lord McNally—is that, as the noble and learned Lord, Lord Mackay, made clear, Regulation 39(d) is expressly imported into Regulation 53, but the language in Regulation 39(d) and Regulation 53(b) is not consistent.

That raises further problems. If things proceed as they are, for example, it is unclear what is meant by the word “unavailable” in Regulation 53(b). It is also not apparent to me how to construe the words in Regulation 53(a),

“appears to be susceptible to challenge”,

with the word in the following subsection (b), “procedures”, which are available to challenge. The refinements in the language and, I believe, the confusion are such as to render this part of the regulations not fit for purpose. I very much hope that my noble friend will be able to give the House an assurance at the end of this debate that there will be amendments to the regulations hot on the heels of the passage of the same.

18:00

[Lord Beecham]

My noble friend is to be congratulated not only on bringing this amendment to the House but also on being elected Peer of the Year. At this rate he may turn into the Hilary Mantel of your Lordships’ House; she of course has won her second Man Booker prize, and it may be that next year my noble friend is awarded with his accolade again. I will speak briefly to his amendment before turning to that of the noble Lord, Lord Pannick.

The Opposition entirely support the case made by my noble friend, particularly because, embedded in the Government’s approach and reflected to some degree in today’s debate, there is some confusion between points of law and errors of law for the purpose of these regulations. The Citizens Advice briefing helpfully makes this distinction clear. It says:

“Furthermore in devising this whole policy Government appears to be confusing ‘points of law’ with ‘errors of law’. Whilst the majority of first tier welfare benefit appeals turn on ‘points of fact’ such as financial and other circumstances … many cases do raise significant legal issues over statutory interpretation (ie social security regulations), legal tests for disability”—

as referred to by the noble Baroness, Lady Doocey—

“or disputed application of … precedents etc. The tribunal making an error of law which may be subject to a right of appeal is a much narrower concept”.

We have to bear that distinction in mind when weighing the strength of the case made by my noble friend. It will be the very exceptional case, as the noble Baroness pointed out, that may qualify for that description of an error in law, which of course has to be self-certified by the tribunal itself—a peculiar process, one might think. We are certainly not in the position that the Minister mentioned in the debate in the House of Commons when he talked about 440,000 cases. That number is inconceivably large and, in my view, can be dismissed. Certainly, though, probably a good deal more than 650 cases could potentially arise if the definition were to deal with points of law. I hope that, bearing in mind the assurances given on the earlier occasion by the former Lord Chancellor, the House will support my noble friend’s amendment.

I also support the amendment moved by the noble Lord, Lord Pannick, and supported by the noble and learned Lord, Lord Mackay, as I understand him. Indeed, there is a peculiar relationship between Regulation 53 and Regulation 39, but in my view it goes somewhat beyond the matter identified by the noble and learned Lord. In addition to the potential clash with Regulation 39(d), it strikes me that problems arise in relation to two earlier parts of that regulation, paragraphs (a) and (b). I remind noble Lords that all these matters have to be borne in mind when dealing with Regulation 53. Under Regulation 39(a) the director has to be,

“satisfied that the following criteria are met … the individual does not have access to other potential sources of funding (other than a conditional fee agreement) from which it would be reasonable to fund the case”.

That is a fairly open-ended requirement. Regulation 39(b) says that the director has to be satisfied that,

“the case is unsuitable for a conditional fee agreement”.

Suppose, though, that it was suitable for a conditional fee agreement; that of course does not necessarily mean that a conditional fee agreement is available. Suitability and availability are not the same thing. That reinforces the noble and learned Lord’s point that there is an inconsistency between Regulation 39 taken as a whole, not just in relation to Regulation 39(d), and Regulation 53. I hope that noble Lords will be convinced by that element.

There is a further matter that I need to touch on. The thrust of the Government’s proposals is to reduce the reliance on judicial review. We have to be concerned about this in view of recent pronouncements about the Government’s desire to reduce substantially the number of cases that can be advanced by that method, which is of course a principal method of holding the Executive to account. This is just one potential example, but I think that noble Lords will want to pay particular attention to it, having regard to the category of people who will be most affected by it. We should not lose sight of the fact that this may be part of a process of restricting access to judicial review that will go well beyond this particular category. In my submission, that is an additional reason for noble Lords to support the amendment moved by the noble Lord, Lord Pannick.

[Lord Mackay of Clashfern]

My Lords, am I right or wrong in thinking that any appellant who is unhappy with the decision of the First-tier Tribunal can ask it to review the decision?

[Lord Beecham]

Assuming that the appellant has the knowledge of that procedure, he might ask it to review its decision, but the review will amount to nothing unless the tribunal convicts itself, as it were, of an error in law. If it makes that mea culpa then under the Government’s amendment there is a potential for legal aid to be granted, but not otherwise.

[Lord Elystan-Morgan]

My Lords, I support both amendments. I am sure that it is not necessary for me to add my voice to the very distinguished contributions that have already been made in this regard. Both amendments turn upon undertakings that have been solemnly given—and, no doubt, in the best faith—by the right honourable Kenneth Clarke. I accept that completely. If there has been mischief, it has probably been the mischief of mandarins thereafter in trying to release him in some way from an undertaking that he solemnly and sincerely gave.

The other feature that is common to both amendments is that they deal with situations where preliminary machinery is set up before a person can qualify for legal aid. In both cases, in my view, that machinery imposes such a burden upon the potential applicant to make his or her case virtually impossible—in other words, a total denial of what otherwise would be a fair and just application by that person.

In the circumstances, bearing in mind the weight of authority that has been projected towards the Government in this case, it would be a very rash Minister who did not concede the obvious points made in the amendment moved by the noble Lord, Lord Pannick. If the noble and learned Lord, Lord Mackay, is correct about the interaction of Regulations 39 and 53, and if it be that Regulation 53 in this regard is totally and absolutely governed by the relevant provision in Regulation 39, then that is it—the Government do not lose one millimetre advantage, because that situation has already been covered and fully determined. However, if that is not the case, then it seems that the argument put so powerfully by the noble and learned Lord, Lord Goldsmith, must have come into play. That is that the director could come to the conclusion that indeed all reasonable avenues had been pursued but that there were unreasonable avenues that had not been pursued. That would be an absurdity and a miscarriage of justice. It is either one or the other.

As far as the amendment of the noble Lord, Lord Bach, is concerned, it seems to me that there again is an irrefutable case. I am not at all clear what triggers the situation where there would be a review by the first tribunal. Would it be something entirely within the discretion of that tribunal, or would it be on application? If it is within the discretion of the tribunal, it is a very strange situation that a tribunal is invited to consider whether it is in error.

Of course, I draw the distinction that has already been pointed out by the noble Lord, Lord Beecham. There is a world of difference between a point of law and an error of law. When a judge has adjudicated in a civil case and is invited to grant leave to appeal, he is not saying, “I am wrong”, or, “I am sure that I am wrong, please appeal”. What he is saying is that there is a point of law that is properly arguable. That is a very different situation from a tribunal which says, “We are wrong”. In fact, I do not know of any other circumstance where such machinery exists in law, but I am sure I will be corrected with regard to that.

The basic principle that we are concerned with here is that legal advice on a point of law should belong to the beginning of an action, not to the end of it. So much anguish will be saved by a very modest expenditure. I believe that so much money from the public purse will be saved because there are undoubtedly downstream costs which will be massive in scale in relation to this. However, above all it is a question of miscarriage of justice.

We think of miscarriage of justice as a situation where a tribunal has come to an utterly wrong decision. It is not limited to that at all. A miscarriage of justice occurs where a person has a just, meritorious case, and on account of lack of money is unable to have that case properly adjudicated. If you ask any decent citizen of this land, whatever politics or total lack of politics he or she may have, “Do you believe in a miscarriage of justice?”, we all know what the answer would be.

[Lord Marks of Henley-on-Thames]

My Lords—

[Noble Lords]

Minister!

[Lord McNally]

I have never been so popular.

[A noble Lord]

It won’t last.

[Lord McNally]

I heard that as well. I am very grateful for the contributions to this debate and not least for all the free legal advice I have been given. It has been a useful debate and I have listened very carefully to the points made. A number of noble, and indeed noble and learned, Lords have raised the issue of judicial review. The difference is in approach between Regulations 53(b) and 39(d).

As I said earlier, the Government believe that the current drafting of Regulation 53(b) meets the concerns raised both here and in another place. However, having listened to the arguments that have been put forward today, I recognise the strength of feeling that the regulation has provoked. I make it clear at the outset that it has never been our intention to cut off legal aid for all judicial reviews. The noble Lord, Lord Beecham, was just setting a hare running about other plans for judicial review. In our view, this provision has been misunderstood.

That said, I have heard the anxieties that have been forcefully expressed about this provision. In the light of that, I believe we should put the situation beyond doubt by setting it out in the regulation. Therefore, having listened carefully and having consulted with colleagues, I can tell the House that, once these regulations are made, the Government will bring forward as soon as practicable, and in any event well before April 2013, amending regulations to revise Regulation 53(b). These regulations will introduce discretion into Regulation 53(b) so that the director of legal aid casework will have the express power to grant legal aid for public law claims, even if the alternative routes have not been exhausted, if he none the less considers that such an appeal or procedure would not be effective in providing the remedy that the individual requires. This would clearly address the situations that are causing noble Lords concern. It would, for example, put beyond doubt that legal aid for judicial review would be available where the claimant required urgent interim relief and this could not be provided in any other way.

I hope this will meet the concerns of the noble Lord, Lord Pannick, my noble and learned friend Lord Mackay of Clashfern, and others. Indeed, we will have the time to consult noble Lords about the wording of the amending order that I will bring forward in the new year. I hope that in the light of that the noble Lord will not press his regret Motion.

18:15

[Lord Reid of Cardowan]

My Lords, for those of us who have experienced neither legal training nor legal practice but who have listened to the very articulate and understandable critique by many noble and learned friends, can the Minister answer this question for me? I very much welcome what he has said. Is it implicit in what he says that, whatever discretion is given, it will not only come into effect if the First-tier Tribunal decides that it has made an error in law? That was explicit in many of the critiques which have come out. Is that conditionality now removed?

[Lord McNally]

My Lords, I, too, am not a lawyer. I think that the noble Lord is asking what comes next, and that relates to the second order, not the first one, which the noble Lord, Lord Pannick, asked about. I will try to cover the point which he has raised when I get to that.

As I said, there was never any attempt on our part to change the rules as far as judicial review was concerned. However, when a former Lord Chancellor, a former Lord Chief Justice and a former Attorney General tell you that it needs clearing up, I think it is only wise to see whether it can be cleared up, and that is what we will do.

Moving on, I have explained in detail how we have listened to the concerns of this House—in particular, in extending legal aid in welfare areas. I have never hidden the fact that the LASPO Bill was a very difficult Bill involving some difficult choices. I can remember answering questions at this Dispatch Box two years ago, when we first launched the consultation. I said then that, if you have a system which is targeted to help the poorest and most disadvantaged in your society and you are forced to make cuts in that system, you are going to affect the poorest and most disadvantaged in your society. I have never hidden that fact.

The idea that LASPO was nothing other than a very difficult Bill is again before this House. Many of the arguments that have been deployed tonight were deployed during the passage of that Bill. However, I remind this House that the LASPO Bill is now an Act that went through both Houses of Parliament and carries with it financial implications that have to be considered when discussing any changes to it. There is no infinite pot of money available and we have to think very carefully about how taxpayer-funded money is spent. The Bill was therefore designed to ensure that public funding remains available for the most serious cases and for those who need it most. In making hard decisions and tough choices, we have listened to the concerns of some of the very same Peers who have spoken today, and we made changes during the passage of the LASPO Bill.

Not for the first time, the noble Lord, Lord Bach, claims that the Government have not listened. I take this opportunity to set the record straight. I remind the House of the Government’s original proposal following the consultation on Proposals for the Reform of Legal Aid in England and Wales. Our response to the consultation stated that,

“it remains the Government’s view that legal aid should be removed for welfare benefits cases, as proposed in the consultation. However, it will be retained for judicial review of welfare benefit decisions, and for claims about welfare benefits relating to a contravention of the Equality Act 2010 that are currently funded, as proposed in the consultation”.

That was our starting point. Since then, we have moved considerably from that position in response to arguments deployed in both Houses. During ping-pong on the LASPO Bill, having listened carefully to the arguments, we agreed to make available legal aid for advice and assistance for welfare benefit appeals on a point of law in the Upper Tribunal, including for applications made to the Upper Tribunal for permission to appeal. In addition, we agreed to make legal aid available for advice, assistance and representation for welfare benefit onward appeals in the Court of Appeal and Supreme Court. The order before us today makes a further concession which is not insignificant.

It may be helpful if I illustrate how this will work. An individual will make an appeal to the First-tier Tribunal against an administrative decision of a public authority. If the appeal is unsuccessful, the claimant can request a statement of reasons for the decision. The appellant can then apply to the First-tier Tribunal for permission to appeal to the Upper Tribunal. At this point, the First-tier Tribunal must consider whether to review its own decision if it considers that it has erred in law, and legal aid for advice and assistance will now be available in relation to that review. If the tribunal decides not to review, the next step is for the First-tier Tribunal to decide whether to grant or refuse permission to appeal to the Upper Tribunal. Where the tribunal refuses permission to appeal, the appellant can then apply directly to the Upper Tribunal for permission to appeal. Again, legal aid will be available for an application for this stage of the process. If permission is granted by the Upper Tribunal, then legal aid is again available for the substantive appeal before the Upper Tribunal.

Therefore, it is wrong and misleading to suggest that we are not making legal aid available in respect of points of law. As I mentioned in my opening remarks, we considered this matter in great detail following the debates during the passage of the Bill. We have explored every possible option to find a workable solution. Our considered assessment is that other methods of independent verification would have proved unworkable. We did consider the CAB proposals but we felt that they would create unreasonable cost and administrative burden. The cost is important. We have never tried to hide the fact that part of the exercise was for legal aid to make a contribution to the cuts in the spending review for the Ministry of Justice, a department which spends money only on prisons, probation, court services and legal aid. The proposals would have placed burdens on the successor to the Legal Services Commission, the tribunal judiciary and the Department for Work and Pensions.

In the Government’s impact assessment we identified that, in 2009-10, we funded 135,000 instances of welfare benefits legal advice. If the judiciary had to consider up to 135,000 interlocutory applications for legal aid, the impact on the tribunal service would be severe, and it could lead to serious delays in the resolution of other cases. Similarly, if the Department for Work and Pensions or the successor to the Legal Services Commission had to consider that large number of cases before they could be funded, it would result in a significant extra administrative and cost burden. We do not believe it right to impose these additional burdens in the current economic climate.

We have therefore decided on the approach set out in the order. This would impose no additional burdens on the tribunal judiciary because it must already consider whether to conduct a review on receipt of an application for permission to appeal against a finding of the First-tier Tribunal. The tribunal can conduct a review only if it is satisfied that there has been an error of law in the First-tier Tribunal’s decision.

[Baroness Mallalieu]

If the position is, as we have heard during this debate, that the noble and learned Lord, Lord Mackay, a former Lord Chancellor, and my noble friend Lord Bach, a Queen’s Counsel, cannot agree on the interpretation of the wording of Article 3 of this order, is it not clear that people who have no legal qualification and are going to have to look at it to see whether they can obtain legal aid are going to be completely mystified? Whatever the merits or otherwise of the order which the Minister is addressing now, this is badly drafted, unclear and needs to be looked at again.

[Lord McNally]

I do not accept that. I accept that the lawyers may have glossed the patch a little, as the noble Lord, Lord Reid, acknowledged. We are discussing various complex matters of its operation. I go back to the point that our initial intention was to take welfare out of legal aid—something that the noble Lord, Lord Bach, has opposed from the very beginning; I understand and appreciate that. That does not take away the fact that we have argued our case through both Houses of Parliament and put an Act on to the statute book. This is about implementing that Act.

It is clear that the Government have listened. We have compromised. However, we can go no further with concessions which impact the fundamental objectives of our reform: to focus legal aid on the highest-priority cases while delivering the essential savings needed to address the deficit which is threatening this country’s stability.

I was at a conference the other day where the noble Lord, Lord Bach, used a term which he may have been saving up for his final remarks. He said that next year we face a “perfect storm” in terms of welfare, in that we are indeed carrying through the LASPO reforms and the welfare reforms at the same time. That is going to introduce strain. However, the perfect storm would be if we lost control of our currency and economy, and if we lost markets. That is when the people whom we have heard about today, whom people want to protect, would really feel the full blast of economic problems. We are trying to—

[Lord Howarth of Newport]

I am grateful. The noble Lord used to tell the House that taking welfare benefits out of the scope of legal aid would save £25 million, but we know also that his department is dumping all kinds of costs on other departments through the health consequences and the damage to vulnerable children living in circumstances of great poverty. What is the noble Lord’s assessment now of the net contribution to reducing the deficit made by his policy of removing access to justice for some of the neediest people in our society? Does he still think that it is £25 million? Does he think it is less? Does he think that that is the crucial difference that is going to avert fiscal disaster?

[Lord McNally]

I do not believe that these matters remove access to justice. I notice that an organisation called MyLegal put out quite a long briefing, the interesting bit of which was on the last page, where it said that Ken Clarke had said these measures would cost £25 million. The briefing said that that was wrong and that it was £14 million. The noble Lord, Lord Bach, said that it would cost only £5 million. What I do know is that it will have a cost. When I am carrying out my other responsibilities in the Ministry of Justice and I am suddenly told by this House, which has no responsibilities in the Ministry of Justice, that I have to find £5 million, £15 million or £25 million, there are decisions that must be made. I sit on boards where people lose their jobs and where the management of these changes is extremely difficult. I have never tried to hide that but I ask this House to have a sense of responsibility. We came up with a concession after a lot of exploration and talks with departments and various boards. It is a narrow concession but it comes on top of a whole range of other concessions which we believe retain legal aid in a vast swathe of the process of welfare and which we think is in keeping with the promises we made to Parliament.

I ask this House not to go further in voting on this. I must make it clear that, if the amendment is carried and this concession is lost, the Act is still an Act of Parliament and will still be implemented in April but without this concession. I would consider that a rather pyrrhic victory.

[Lord Pannick]

My Lords, I am very pleased that the Minister has agreed to bring forward amending regulations that will deal with Regulation 53(b) and I thank him for considering the points that have been made in the debate. He mentioned that the regulations would focus on whether the alternative remedy is effective. I hope that when he and his officials read the record of this debate, they will see that the concern is that the criterion should state that the issue is whether the alternative remedy is a reasonable one to use in all the circumstances. It is not just a question of efficacy; it is also a question of speed and convenience, for example. The Minister indicated that he would consult noble Lords who have expressed concern about this. I very much hope that he will take further advantage of the free legal advice available from, in particular, the noble and learned Lords, Lord Mackay of Clashfern, Lord Woolf and Lord Goldsmith. I would be very happy to act as their junior in this respect. On that basis, I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Motion agreed.

Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012

Monday 3rd December 2012 Lords Chamber

Motion to Approve

18:33

Moved By

[Lord McNally]

That the draft order laid before the House on 29 October be approved.

Relevant document: 10th Report from the Joint Committee on Statutory Instruments

Amendment to the Motion

Moved by

[Lord Bach]

As an amendment to the above Motion, leave out from “that” to the end and insert “this House declines to approve the draft Order laid before the House on 29 October as it does not fulfil the undertaking given by Her Majesty’s Government on 17 April; and will mean claimants, including a disproportionate number of disabled people, will not receive legal help on a point of law in first-tier tribunals relating to welfare benefits thus denying them a fair hearing on point of law cases”.

[Lord Bach]

My Lords, I spoke to my amendment earlier in the debate and the House will be relieved to hear that I have very few words to say at this stage. My case is this: how can it be right that there is automatic legal aid for any client who gets to the second-tier or upper tribunal—the Court of Appeal and the Supreme Court—on a welfare law case but no automatic right to legal aid for first-tier tribunals? You can get to the second-tier tribunal or the Court of Appeal or the Supreme Court only on a point of law. If that is the position, how can it be right that at a first-tier tribunal, when a client has a point of law, they should not be allowed some legal advice before the first-tier tribunal commences—in other words, before the first-tier tribunal or during it? It is no use being able to get it at the very end of the first-tier tribunal in very remarkable and odd circumstances.

The Government seem to believe that was appropriate logic because that is the concession they were generous enough to make in the House of Commons on 17 April 2012. But they have not kept to that concession. They have come up with something much more vague; something that will happen in very, very few cases.

I am very grateful to the Minister for the time he has taken with this and to all noble Lords who have spoken on my amendment. When the Minister answered a question from me the other day he said:

“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”.—[Official Report, 27/11/12; col. 90.]

Can noble Lords think of anyone who is more needy than the sort of person that the noble Baroness, Lady Doocey, was describing—a disabled person who has undergone some of these tests in order to get her or his benefits, who is not happy with the result, thinks something has gone wrong and wants to appeal? What the Government are intending is that that person should not have the ability to get legal aid in order to appeal to the first-tier tribunal even when the matter is a point of law which they cannot be expected to know or understand. It defies logic and fairness to suggest that kind of process should continue.

All we are asking is that the Government withdraw this Motion, which they are clearly not prepared to do tonight. If they will not withdraw it, I shall ask the House, in a completely non-partisan spirit, to decline to give approval to this Motion tonight and invite the Government to come back with a slightly more generous order that looks after the type of person the noble Baroness, Lady Doocey, was telling us about earlier in our debate.

[Lord McNally]

My Lords, we are almost on the verge of another financial Statement by the Chancellor. I have made it clear that the noble Lord must not lure the House into an idea that following him into the Division Lobby will produce a better offer because it will not.

[Lord Bach]

Is the noble Lord saying that he will not come back with anything on this matter if this amendment is carried? I think that that is a threat that the House should be very wary of accepting at such a late stage in the debate.

[Lord McNally]

It is not a threat. I just do not want the House to make a decision on such an idea. This is not the Committee stage of a Bill. The order relates to what is already an Act of Parliament. If we do not bring forward another order in this area, the Act simply will go through. I want the House to be aware of that fact.

[Lord Bach]

There is a framework Act of Parliament, passed by Parliament, which I have never sought to go behind. These orders add flesh to those bones. This is a very important order. In any event, the Government would have to have some kind of order on these matters. On this occasion, the Government have, in effect, not kept with the intention that they certainly had in the House of Commons. By announcing what they did in the Commons, they managed not to lose a vote and to get the Bill through. As a consequence, it is a serious matter.

[Lord Phillips of Sudbury]

I am grateful to the noble Lord, Lord Bach—I almost said “my noble friend”, which he is. My noble friend Lord McNally has not commented on the noble Lord’s fundamental assertion on which, for me, the strength of the case rests; namely, that the former Lord Chancellor made a clear undertaking which is now not being kept. Would it not be helpful to the House for the noble Lord, Lord Bach, to ask my noble friend Lord McNally for his comment on that?

[Lord Bach]

That would be a fair question to the noble Lord, Lord McNally, who has had every opportunity to answer it and has chosen not to.

[Lord McNally]

I will answer it—I answered it in my remarks. The Lord Chancellor said that he would take the matter away and use his best endeavours. I have seen the exchange of papers with the DWP, the Legal Services Commission and the Administration on whether this could be done. We have come back with our best endeavours. This casual throwing around of betrayal fires the troops up for voting but it simply is not true.

[Lord Bach]

I would not dream of using the word betrayal as regards this matter. The noble Lord misunderstands me completely. It is not a betrayal. The governing party in the House of Commons said that it intended to do something and, in that way, managed to get an adverse amendment withdrawn. It has come up with a solution but the solution is not the concession that it made in the House of Commons. That is the fact of the matter. It is a much narrower solution and it is deeply unsatisfactory for those who are interested in how the poor, the disabled and the vulnerable are looked after in our society and their rights to access to justice.

For that reason, I ask the House to decline to approve this order, so that the Government can think again and come back with an order which we can all accept. I beg to move.

18:41

Division 1

Ayes: 201

---

Labour: 158
Crossbench: 30
Independent: 4
Democratic Unionist Party: 1
Liberal Democrat: 1
Bishops: 1
Plaid Cymru: 1

Noes: 191

---

Conservative: 134
Liberal Democrat: 43
Crossbench: 10
Ulster Unionist Party: 2
Independent: 1

Motion, as amended, agreed.

Palestine: United Nations General Assembly Resolution

Monday 3rd December 2012 Lords Chamber

Question for Short Debate

18:52

Tabled By

[Baroness Royall of Blaisdon]

To ask Her Majesty’s Government what discussions they have had with the Palestinian Leadership in the light of the outcome of the debate on the Resolution on the status of Palestine within the United Nations at the United Nations General Assembly on 29 November.

[Baroness Royall of Blaisdon]

My Lords, like all Members of this House, I believe that the two-state solution is and must be the solution to the Israeli-Palestinian conflict; that is, a safe and secure Israel living alongside a viable and sovereign Palestinian state based on 1967 borders, with agreed land swaps, with Jerusalem as the shared capital of both states and with a just, fair and agreed settlement for refugees.

However, as both the Foreign Secretary Mr William Hague and my right honourable friend Mr Douglas Alexander have said countless times over the past few weeks:

“Time is running out for a two-state solution”.

The news that Israel has seized more than $120 million of the tax revenues it collects on behalf of the Palestinian Authority has made the situation much more dangerous, as has the announcement that Prime Minister Netanyahu has authorised the construction of 3,000 new homes and settlements and the speeding up of 1,000 existing planning permissions. Indeed, the UN Secretary-General has said that this could be,

“an almost fatal blow to remaining chances of securing a two-state solution”.

Last week, there was a massive vote at the UN General Assembly in favour of Palestine moving from an observer entity to an observer state at the United Nations. There were 138 nations in favour, including France and Spain; nine against; and 41 abstentions, including the United Kingdom. This was a strong global signal in favour of an independent Palestinian state. It also happened to reflect the views of the British people: 72% of respondents in a recent YouGov poll said that they were in favour of recognising the Palestinian state, and only 6% were against. Ephraim Sneh, a former Israeli Deputy Defence Minister, said before the vote that,

“Abbas’s statehood bid can be a game-changer if the American and Israeli governments respond prudently. Or it can be another missed opportunity—and a potentially disastrous one at that—if they respond punitively to a remarkable Palestinian achievement at the UN General Assembly”.

Sadly, prudence has been abandoned by the Israeli Government.

We strongly believe that the British Government were wrong not to support the Palestinian resolution. It is one of the steps to achieve and negotiate a two-state solution. The fact that we abstained was an abdication of responsibilities to both the Israeli and Palestinian people, most of whom wish to live in peace. The vote was also an important means of demonstrating support for President Abbas, crucial at any time but especially in light of the most recent conflict in Gaza, in which the power and influence of Hamas were enhanced. The Palestinians not only wanted Palestine to be recognised as a state—a prerequisite, I suggest, for a two-state solution that is impossible when only one side is recognised as a state—they also wanted a strong leader. They, like the world, wanted tangible proof that diplomacy works better than rockets.

In the House of Commons last week, Mr Hague said that Government relations with President Abbas were excellent. Indeed, I hope that they are. However, I wonder what the Palestinians think of our position now that the feared retributions have begun. I have no doubt that the Middle East will be a priority for President Obama in his second term of office. However, the UK’s abstention will not have helped—quite the contrary—and it will have diminished our position as a global leader in the eyes of the world.

Before the vote, the Foreign Secretary said that recognition at the UN risked paralysing the peace process, but for far too long there has been only paralysis and no process. There has been continued settlement building, and continued rocket attacks, but no process. I utterly condemn the rocket attacks from Gaza. Like many parliamentarians, I have visited Sderot and spoken with the Israelis whose lives are blighted by rocket attacks—and constant fear. However, I have also seen the settlements, which I utterly condemn and which are against international law. Each house built entrenches the Israeli occupation of Palestine and makes Israel and its people less, rather than more, secure.

Last week’s announcement that some of the new construction would be in E1 has alarmed the global community. E1 is a five-square mile controversial development on the outskirts of Jerusalem that would partly divide the West Bank and would hugely complicate efforts to create a contiguous Palestinian state. Former Israeli Prime Minister Ehud Olmert has called it,

“the worst slap in the face of a US President”.

I welcome Mr Hague’s comments that:

“Israeli settlements are illegal under international law and undermine trust between the parties. If implemented, these plans would alter the situation on the ground on a scale that makes the two-state solution, with Jerusalem as a shared capital, increasingly difficult to achieve”.

Mr Hague is absolutely right. I understand that Israel’s ambassador has been called to the Foreign Office for a meeting with Alistair Burt, the Minister for the Middle East. Clearly this is the right thing to do, but it will not undo the damage done to Britain’s standing on this issue as a consequence of its misguided abstention. The Minister will know that there has been much press speculation today that our ambassador in Tel Aviv could be withdrawn. I would be grateful for clarification. What discussions has the Foreign Secretary had on this issue with the noble Baroness, Lady Ashton, the EU’s High Representative?

It is said that Mr Netanyahu is taking these actions with one eye on the elections in January. I suggest that the crisis in the Middle East is too important for the area to be used as a political football. Indeed, it is terrifying. Then, of course, there are the tax revenues, collected by Israel on behalf of the Palestinian Authority, which Israel has refused to hand over and which it will review on a monthly basis. This punitive action is intolerable and again exacerbates tensions and frustrations rather than enhancing the safety and security of Israel. In the past, when Israel has frozen the monthly revenues of the Palestinians it has resulted in the late payment of salaries for thousands of public servants in the West Bank and Gaza.

I wholeheartedly condemn violence but is it any wonder that the level of anger is heightened when men and women can no longer provide for their families? These tax revenues are not gifts to buy treats; they are moneys owed to the Palestinians on which they rely for their day-to-day existence. I would be grateful if the Minister would say what representations the Government have made to the Israeli Government on this critical matter, and what discussions they have had with Secretary of State Clinton.

I have no doubt that the Saudis and other friends of the Palestinians in the Arab world will do what they can to assist financially. This would be an understandable and welcome short-term solution for the Palestinians, but it cannot be sustainable for any of the parties concerned, including Israel. I wonder what the British Government will do on the issue. For the past four years there has been a near-total cessation of terrorist activity in the West Bank, partly as a result of co-operation between the Israel Defence Forces and the Palestinian security forces, organised by Lieutenant General Keith Dayton’s team. However, if the Palestinian economy collapsed as a result of external economic pressures, the situation could easily be reversed and Israel would become even more vulnerable.

The vote in the UN last week demonstrated that the world wants a solution to the Israeli-Palestinian conflict: a two-state solution in which both states live in security and with dignity. Whereas recognition of Palestine as a state by giving it observer status at the UN is a positive step forward, the subsequent announcements by the Israeli Government are a deeply worrying development that could jeopardise hopes for peace. The UK’s ill judged abstention at the UN was supposed to secure continuing influence with Israel, but there is little evidence of that strategy working. I now urge the Government to co-ordinate their actions with European partners so that further steps can be taken to help ensure that Israel complies with international law and demonstrates a commitment to peace. Most urgently, I trust that all efforts will be made to ensure that Prime Minister Netanyahu hears this message loud and clear when he meets Chancellor Merkel in Berlin on Wednesday.

19:01

[Lord Alderdice]

My Lords, I commend the noble Baroness for securing a debate at this time on an issue that transcends all party differences. On 29 November 1947, the United Nations voted in Resolution 181—with 33 for, 13 against and 10 abstentions: in other words, voted very powerfully—for the establishment of the State of Israel. It also wanted to see the establishment of a Palestinian state. On 29 November 2012, the United Nations voted again, and 138 out of the now 193 member states voted for the possibility of moving towards a new member state. They did not declare that it was a state, only that it was moving towards being a state.

Who voted against? Panama, Palau, Nauru, Micronesia, the Marshall Islands, the Czech Republic, Israel, the United States and Canada. How is it possible that the State of Israel, which was brought into being by an overwhelming majority vote in the United Nations, has contrived over the subsequent years to so lose the confidence of other member states that it finds itself with so little support in its opposition to the perfectly reasonable demand for a Palestinian state?

The peace process has been paralysed for years. There has been no peace process for years. I speak as someone who spends a considerable amount of time working on this issue and on events in the region. Huge changes are taking place—and they are not for the better. The world has changed. I do not think that some of our colleagues in this country, in Israel and certainly in the United States realise that the world has already changed. It is the kind of change that took place in the run-up to, and after, the First World War. The balance of power is different. Changes take place because of changes in technology. Having massive military power in the old sense no longer cuts it. It no longer stops or starts major political change.

It is said by many in the Israeli establishment that there is no partner for peace. Therefore, what is the objection to recognising a nascent state that can become a partner for peace? If there is to be a partner for peace, and if the complaint is that Palestinians are fragmented, surely this creates the opportunity for the various elements in the Palestinian state to come together—for Hamas, Fatah and others to become a partner for peace. However, I think that we have gone beyond all of that. It is no longer clear that a two-state solution is possible. If it is not, there are only two other obvious possibilities that I can see. One is a single state, which manifestly cannot be a Jewish state if it is democratic. The other is some form of chaos and war in the region. It is wholly possible that that is what we are looking at: we are sliding into a regional war.

What is the alternative? It is that we look to a regional process to create stability in the region. Noble Lords will not be at all surprised that I speak about such a process because I have been banging on about it for years. I have not for years seen the possibility of Israel and the Palestinians negotiating an outcome, and I do not any more see the United States providing a particularly useful role in achieving it. There was a time when it could have. There was a time when the European Union could have played a role of this kind, but it is so intent on focusing on its internal problems that it has not been able to provide any kind of useful contribution to the peace process. There is a great urgency about the development of a regional process to save us from regional chaos and to give the possibility of the establishment of a Palestinian state living in peace and stability alongside the State of Israel.

In this regard, I say with great sadness that our country this time is on the wrong side of history. This is a serious error of judgment. This was an opportunity to rescue the reputation of this country in a region that has not been impressed by the military adventures of the past 10 or 15 years. It was an opportunity for our country to say clearly that we support our friends in the State of Israel but that we do not give them a veto on our policy, or who we talk to, or who we are prepared to engage with. I do not expect my friends to tell me who I can and cannot talk to; I expect them to come along with me to talk to people. If my friends say they want a partner, I try to establish a relationship with that partner. Instead, we as a country find ourselves closing in, in a way which—whatever our Israeli Government colleagues say—is not good for Israel, never mind for this country.

I spent the past weekend organising two international conferences in London. At the second was a very senior Israeli—a senior, very Jewish, very Israeli Israeli. His commitment to his country, in diplomatic, political, academic and security terms, had been, he said, “my whole life”. I asked him what he thought of the vote. He said: “Israel should have supported the vote. It should have made it clear that it wants a partner for peace and wants to give Palestinians an opportunity to get together as a state to be a partner for peace”. Recognition of a developing Palestinian state does not define its boundaries; that is part of the problem. It does not describe its population; that is part of the problem. It does not tell us how we are going to relate the various different Swiss-cheese parts of its territory; that is part of the problem. However, it does give a partner with whom to engage in a peace process.

It saddens me greatly, and frightens me greatly, that we face such dangerous times in that region, from which we will not escape. On this occasion our Government did not do the right thing for the country. I hope that they can review their approach, not in terms of the vote, as the vote is past, but in terms of how we engage to ensure a regional process towards stability. Otherwise we will, I fear, observe a regional descent into chaos.

19:10

[The Lord Bishop of Guildford]

My Lords, I am very grateful to the noble Baroness, Lady Royall, for raising this urgent, peace-threatening question. Your Lordships may be aware that the right reverend Prelate the Bishop of Exeter, together with the Roman Catholic bishop, Bishop Declan Lang of Clifton, had written to the Foreign Secretary in some regret at the UK’s abstention from the UN vote on Palestine’s non-member observer status. They—and all of us on these Benches, irrespective of our views on voting or abstention—urge Her Majesty’s Government to do everything possible to revitalise the stalled peace process in the Middle East.

I am particularly grateful that the last speech highlighted the importance of a regional peace discussion. We understand the desire to urge all parties to desist from actions—such as a Palestinian appeal to the International Criminal Court—which would make a restart of discussions, whether completely international or more regional, more difficult. Yet is there not a desperate need to signal that there must be a way forward through international law, which the new Palestinian status surely indicates, lest despair of a two-state solution, or any other solution, lead to the resumption of violence such as the firing of rockets from Gaza, which has already been alluded to? That could slide into the regional war to which the noble Lord, Lord Alderdice, has just alerted us.

My stress on a solution grounded in international law is a point which the right reverend Prelate the Bishop of Exeter would have made had he been in his place. He is in fact visiting some of his flooded churches today. This stress enables me warmly to welcome today’s news from the Foreign Office of the summoning of the Israeli ambassador to meet the Minister with responsibility for Middle East affairs. Afterwards a spokesman mentioned the Government’s potential “strong reaction” to Saturday’s announcement of Israel’s building plans between east Jerusalem and the West Bank. These plans seem, to my judgment, an absolute roadblock to the resumption of any progress and any new negotiations. There are many things on either side which could threaten the only real option for peace—the resumption of discussions, which is the only real option for security for Israel, as has already been mentioned. Continued building on the wrong side—the wrong side in international law; the wrong side of the green line—is, in my view, the most serious threat of all.

19:13

[Lord Janner of Braunstone]

First, my Lords, I apologise: I did not realise that the debate was going to start so very early. However, I am honoured and delighted to be here.

During my career and personal life I am proud to have worked, and continue to work, for both Jews and Arabs who are in Israel and the neighbouring countries. I have spent much of my time building bridges between their communities—working together on our similarities and differences, discussing how we live, and, more importantly, discussing how they can live happily together. That is why I believe it is essential that we work to support both Israel and Palestine to reach a two-state solution where the Jewish have their state—Israel—and the Arabs have their own state: Palestine. The Palestinians’ win at the United Nations General Assembly shows how many countries also agree that they deserve to have their own state. However, the remaining number of noes and abstentions demonstrates how the resolution still needs to be both discussed and developed.

Our Government did not vote yes. Last Thursday in the United Nations they abstained, showing how we in Britain do not completely dismiss the Palestinians’ rights but acknowledge that there are a number of issues that must be spoken about in order for our Government to agree wholly to the increase in Palestine’s status at the United Nations.

The shadow Foreign Minister, Douglas Alexander, spoke in the other place in a debate last Wednesday before the UN vote. He said:

“what I believe will be an overwhelming majority of the 193 members of the UN General Assembly in voting for enhanced observer status for the Palestinians. That vote can, and must, send a powerful signal to the Palestinians that diplomatic efforts and the path of politics, not the path of rockets and violence, offer the route to a negotiated two-state solution”.—[Official Report, Commons, 28/11/12; col. 230.]

That is what we must all hope will occur.

As this House knows, only a week before this vote, Gaza and Israel were in conflict with rockets flying from both sides, and, sadly, there were casualties on both sides. Since Israel left Gaza in 2005 countless rockets have been fired from Hamas-run Gaza, and Hamas uses innocent citizens to hide behind. We must all acknowledge Israel’s right to defend its own country. We cannot ignore that Israel, like Palestine, has a right to exist. Hamas saw the results on 29 November as a victory. It is important for the Palestinian people but Hamas is not there to benefit its people. It is not the Government; it is a terrorist group that uses its own citizens as shields to hide its operations. It is a group which publicly announces the annihilation—the annihilation—of the State of Israel.

Whether you say shalom or salaam, it is this word—which means peace—to which we must always return. We must all work together for peace in that area. How do the Government consider the UN results on the status of Palestine will encourage them to go back to the negotiations when they have refused to take part in the past two years?

Before I finish, I would like to tell a fable of a London man who once went to a law society and asked to be recommended to a one-armed solicitor. “Why one-armed?”, asked the official. “Because,” the man replied, “I am sick to death of lawyers saying, on the one hand this, and on the other hand that”. That was a perfectly good reason for wanting somebody with one hand. On the one hand, if you do not recognise that others have a case, you will lose yours. On the other hand, if you do not put your case firmly, then you will not be an advocate for long. And without any hands, you certainly cannot clap. One Hand Alone Cannot Clap is the name of a book that I wrote some years ago about Israel and the Middle East. It is important that we acknowledge that you cannot base arguments or work for peace with only one side. No one would argue against the rights for the Palestinian people to have their own home, and this is also so true for Israel. We must all learn to clap together and to live happily and peacefully side by side.

19:18

[Lord Palmer of Childs Hill]

My Lords, the noble Baroness, Lady Royall, asked a very important and interesting Question. My noble friend Lord Alderdice referred to the United Nations vote in 1947. Many people seem surprised that the UK abstained in the vote to upgrade the status of Palestine at the UN. However, students of history will appreciate—this has not yet been pointed out—that this abstention follows the precedent of Britain abstaining in the 1947 vote on the UN partition plan leading to the creation of the State of Israel. Some things do not change. It has always been a foregone conclusion at this time of the United Nations that a large majority of nations, including the Islamic and non-aligned states, would vote in favour of the UN’s de facto recognition of Palestinian statehood. Some things have changed since 1947.

We can achieve the desirable result of a Palestinian state alongside a secure Israel only by joint negotiations between the two parties. I quote from a newspaper this weekend, which stated:

“Mr Abbas has said he will not return to talks, which were broken off in 2010, without a freeze in settlement building, ignoring Israeli calls for a resumption of negotiations without preconditions”.

I am against the expansion of settlements. However, even an amateur prophet could have predicted that the Israeli reaction to the UN vote would be to announce the approval of construction of new settler homes. The E1 proposed area which the noble Baroness, Lady Royall, referred to only has preliminary zoning and planning. Although that is bad enough, it is not actually in the building stage.

I hope that Her Majesty's Government will stress to the Palestinian leadership—which is the point of the noble Baroness’s Question—that if it wants to stop the building, it had better get to the negotiating table as quickly as possible. Surely Mr Abbas does not want the same said about him as was said about Mr Arafat: that he lost no opportunity to lose an opportunity. The man who said that, Abba Eban, an Israeli Foreign Secretary, also once said that if Algeria introduced a General Assembly resolution that the world was flat and Israel had flattened it, it would pass 100 to 10 with about 50 abstentions.

President Abbas is requesting recognition for a state half of which he does not even control. Since Hamas took power in Gaza in 2006, Mr Abbas, as far as I know, has not visited there even once. The resolution pushes further away the prospects for peace. The only way to achieve peace is through direct negotiations, and I hope that my noble friend the Minister will stress this to both sides. Unfortunately for ordinary Palestinians, they will see little gain from the UN achievement. The Gaza Strip will remain under the rule of Hamas. The move seems more likely to undermine prospects for reviving the peace process, as described eloquently by my noble friend Lord Alderdice, except for one redeeming feature; namely, improving President Abbas’s reputation on the Arab street. Not negotiating with Israel has been Mr Abbas’s choice in recent years, whether due to his distrust of Israel or due to his own unwillingness to make compromises. The move to the UN looks more like a continuing strategy to avoid negotiations and not a way to revive them.

When Mr Abbas first laid out his ambitions 18 months ago in the New York Times, he made it clear that he would use Palestine’s new status to try to confront Israel in international legal forums. That is not exactly conducive to peace. More than ever, Mr Abbas needed a domestic political win. This has only been heightened since the recent conflict between Israel and Hamas. The Palestinian Authority had become largely irrelevant in the international theatre until the UN vote.

It must be noted that, in the past, the quiet co-operation between Israel and the Palestinian Authority has led to some genuine progress—not enough by a long way but some at least. What is needed is a de-escalation of tensions and a period in which each side commits, publicly or privately, not to take steps which antagonise the other, whether it is expanding settlements, which I disagree with absolutely, on the Israeli side, or unilateral moves in international organisations or legal bodies on the Palestinian side—and of course a cessation of hostilities from either side of the border.

If I was a public adviser to the Israelis, I certainly would not have advised them to announce the building of more settlements and a holding-back of taxation revenues. Perhaps I would have advised them to concentrate on what Israel does internationally in helping with world relief. When a massive earthquake struck Haiti, Israel was one of the first and most effective responders, using its undoubted technological know-how and experience for the benefit of others. Perhaps noble Lords have forgotten that, during Israel’s stay in Haiti, the medical delegation treated more than 1,110 patients, conducted 319 successful surgeries and delivered 16 births including three in Caesarean section. The IDF search and rescue force also performed very well. On irrigation projects around the world—the noble Lord, Lord Alderdice, spoke about the conference that he organised the other day—Israel is a world leader in water technology to develop new water sources, use the water that we have most efficiently and recycle waste water. We need more desalination plants around the Middle East and not just in Israel. On aid or advice to other regimes, according to MASHAV, an Israeli organisation, Israel has used its expertise to transform agriculture from traditional subsistence to sophisticated market-oriented production. It is for this reason that many countries in the developing world have sought partnership with Israel in addressing their agricultural challenges. Since 1958, MASHAV has trained in Israel and abroad almost 200,000 course participants from approximately 140 countries and has developed dozens of demonstration projects worldwide in fields of expertise.

If I were one of those mythical public relations consultants, perhaps I would also talk about the life-saving technology which has emanated from Israel. It is hard to know where to start. Hadassah University and the Weizmann Institute have produced scientists and Nobel laureates responsible for the research and development of important medical advances and life-saving techniques. Israel leads the world in stem cell research, with important breakthroughs in repairing tissues and organs damaged by Parkinson’s disease. Teva Pharmaceutical Industries, headquartered in Israel, is the largest generic drug manufacturer in the world and has made an incredible effort in helping to combat diseases such as multiple sclerosis and Parkinson’s disease. Israel has broken ground in fertility treatment. There is the neuromedical electrical stimulation system, a glove-like device that can help paralysed people; there is imaging technology; and there is help for cancer patients and nanotechnology.

The responses from Israel on settlement expansion and tax revenues do not help, but they must be seen in a context where the Palestinians refuse to sit and negotiate and have taken a unilateral step which aggravates the situation. Israel has said time and again that it wants a two-state solution, as referred to by the noble Lord, Lord Janner. I ask Her Majesty’s Government and all parties to do as my noble friend Lord Alderdice said and work to a regional solution where all parties get people to the negotiating table. It is not too late to do so. There is a chance for a two-state solution, but it is up to us, Her Majesty’s Government and other Governments to help by getting the two sides to that table to negotiate before it is too late.

19:27

[Lord Judd]

My Lords, it is obviously a time when we should all turn our minds to how we take things forward. However, in our concern about how we take things forward, it is also important to have some historical context for what has happened, and it is a long story.

We have special responsibility in this country towards Israel because we were one of the principal powers that played a key part in bringing Israel into existence and we must therefore not betray our responsibility in that context. It is also important to remember that, historically and objectively, no people paid a higher price for the creation of the State of Israel than the Palestinian people. It is important therefore to see both sides of the argument in history, because it is not just a current crisis that we face but a deeply rooted history.

I do not happen to believe that the West and our own country under successive Governments have been even-handed in their approach to this situation, when, if any issue in the world demanded even-handedness, it was this one. We have been pro-Israeli, and history will read the message very clearly. We may try to persuade ourselves that we were not letting down the Palestinians but we were, repeatedly. Where has our voice been on the blockade, on the screwing of the economy of Gaza? In two or three years’ time, the one remaining aquifer in Gaza will collapse, because spare parts have not been allowed in through the blockade to maintain it. Ninety per cent of the water in Gaza is not fit for human consumption. The schools, the health, and the economy of Gaza have been screwed.

Almost exactly a year ago I was in the West Bank and Jordan, and up until then I had not realised quite what the settlements meant. They are not just a few nice settlements—Israeli suburbs in the West Bank and Gaza—but fortified encampments with security gates. Palestinian life is absolutely distorted. People are humiliated day after day as they pass through the security gates, where they are treated rather brusquely, to say the least. Farmers are able to get to their land and back again only at certain specified hours. I asked what would happen if a farmer had a heart attack. The UNRWA people told me, “Well, somebody would have to get on to us, and we’d have to try to negotiate an arrangement with the Israelis so that the gates were opened to allow the people back”. We have not faced up to the realities of what is going on.

Another issue worries me very deeply. I recall how in 1967 I was in Israel for the duration of the war. I talked to Israelis then, who said to me, as they listened to militant, pro-Israeli language being broadcast into the country in the excitement of everything that was going on, “It’s all right for these people, but we’ve got to make a future with our neighbours and all the people in the region”. Israelis said that to me. Since then Israelis have refused to serve in the armed services, because they will not be part of what is going on, and other Israelis have made brave stands against these policies. Our absence of even-handedness has let down those brave and courageous Israeli people who have tried to advocate an alternative policy for their country.

We have to look to the future. We must not suddenly switch from our responsibilities. History will not allow us to do that. But it is because we have special responsibility for the creation of the State of Israel that we must always speak honestly and bluntly about what really matters for Israel’s survival. The truth of the matter is that the present policies of Israel—and we all know this—could not be better designed to undermine the future prospects of the people of Israel. They prolong the danger and the threats that will accumulate.

How will we approach the future? Reference has been made to the need for a regional approach, which I am sure is right. We must have a regional approach to secure the future. However, a regional approach cannot impose a solution. No one can impose a solution. The solution will have to be generated by the Palestinian and Israeli people. That is where it will come from. We have an example in our own history, that of Northern Ireland. If it is to work, it must have the commitment of the key parties, which will mean a readiness to talk to people with whom it may not be very easy to talk, just as we learnt that we had to talk to the political wing of the IRA if we were to make progress. That was critical.

However, we also learnt something else in that process in Northern Ireland: that we must keep any preconditions to an absolute minimum because they will only distort everything, and they will not be owned by the participants. Some of the things that as outsiders we see as obviously essential must come from the participants in the negotiations, who have to come to those conclusions themselves. They must go through a process of learning in the negotiations that go on. I am sure that the noble Lord, Lord Alderdice, would agree with me that that is exactly what happened in Northern Ireland.

We should also be encouraging and supporting them in practical co-operation. The conference on water organised by the noble Lord, Lord Alderdice, which I was so glad to be able to attend, was a very interesting example of this. It demonstrated how we can help them to get into practical situations in which they see their mutual interdependence.

The most important point of all is that a negotiated, lasting, enduring solution will have to be inclusive. It will have to draw in the widest possible cross-section of people. It is nonsense, and stupidity, to refuse to see that Hamas has to be part of the solution. This can no longer be tolerated, because of course it becomes a self-fulfilling prophecy. It undermines any chance of emerging moderate or more enlightened leadership in Hamas, and plays right into the hands of the extremists, who are there, and who will use Hamas for their own irreconcilable ideological religious—or other—objectives.

This will take a lot of imagination. What is tragic—and I use the word in the real Greek sense—about the vote last week is that we marginalised ourselves. I hope that my noble friend, who introduced the debate with a particularly good speech, will not mind my saying that the Question refers to talks with the Palestinian leaders since the vote. I cannot imagine that we are very high on the Palestinians’ list of priorities for talks at this juncture.

19:35

[Lord King of Bridgwater]

My Lords, I have not previously been involved in the debates on Israel and Palestine and the issues arising from them. I am extremely grateful to the noble Baroness for introducing this debate, because I wanted to express simply, as somebody who is much more of an observer than many of the experts who have spoken already, the great concern that I have about the situation.

I am progressively more alarmed about this region, which has already been referred to being in turmoil at the present time. This situation does not threaten merely continuing bitterness and violence between Israel and the Palestinians but threatens the region, and may threaten ourselves, in terms of world peace and stability, the possible involvement of the United States, and the consequences of events in Iran. A number of developments here pose the greatest danger to us. I have always supported the State of Israel and its existence. However, the current actions of the Israeli Government imperil the State of Israel itself. Voices of concern and friendship have a duty to speak out at this time.

The New Statesman had a headline this week, that Mr Netanyahu risked condemning Israel to perpetual war. The awful thought, in such a dangerous world, of the risk of continuing and escalating conflict of this kind, must concern us all. This is a time when Israel needs support. The noble Baroness referred to the vote in the United Nations, which was 138 to nine. Of the nine, as the noble Lord, Lord Alderdice, quoted, I had to look up who two of them were. One of them was Palau, which has a population of 20,000; another was Nauru, which has a population of 10,000; and the Marshall Islands came swinging in with a majority vote of 68,000. That is three votes in the United Nations with a smaller vote than the Isle of Wight in a constituency election. France, Italy and Spain came out against Israel, supporting the adoption of observer status for the Palestinians, while Germany, Holland, Australia and the United Kingdom abstained. I must say to my noble friend that I was disappointed that we abstained. I understand why the Foreign Secretary made that decision, but the Israeli reaction since has been a real slap in the face for him and others who had hoped for a more moderate response.

I say to the many noble Lords who express strong support for the State of Israel: does anyone in Israel still care about what the rest of the world actually thinks? It is deeply depressing at the present time. We have seen Mr Netanyahu going to America, snubbing the American President and marching straight off into a meeting of AIPAC, where he got a heroic reception, as he would. Against that background, it is deeply worrying. The Israelis are losing the support of countries that would have supported them strongly in the past. I had these thoughts even before the announcement of the disastrous reaction to the vote in the United Nations. Although the noble Lord, Lord Palmer, rather glossed over the decision to go ahead with preparations for E1 and the impact these have had on East Jerusalem, along with tax withholding and going ahead with more settlements, I certainly understood why Ban Ki-Moon said that it would be an “almost fatal blow” to hopes of peace. I am not sure that the present Israeli leadership under Mr Netanyahu actually has any intention of ever going forward with a two-state solution. I am afraid that that is the impression he gives outside the country. Everyone goes along with it, saying “That’s our policy”, but I am not sure whether he is ever going to move on it.

I much appreciated the speech of my noble friend Lord Alderdice. He and I know very well the old cry, “Not an inch and no surrender”, which I had shouted at me often enough in Northern Ireland, along with people trying to hit me over the head, but we knew that it was not the way out of the problem. Progress had to be made on both sides and, as the noble Lord, Lord Judd, said, it had to involve the people on both sides. They have to understand their best interests. No sensible Israeli wants to be in a state of perpetual war. The Israelis cannot want to be in that continuing situation, and no Palestinians want to find themselves in the present miserable situation.

Against that background, the scale of change that is taking place in the world and in that region cannot be overstated. I have seen, and no doubt so has Israel, the visits that are now being paid to Gaza. The Prime Minister of Egypt has been to Gaza, as has a senior representative or perhaps the Emir of Qatar. Senior representatives from Bahrain have been there, and now I see that Mr Erdogan of Turkey is talking about going as well. These developments are profoundly significant. Whether these decisions and the reactions to them are to help the election campaign of Mr Netanyahu in January—we are promised the election of an even more hawkish coalition—is not known, but one does weep very seriously, not least because we still have the elephant in the room in the shape of Iran and its nuclear weapons. One wonders what kind of approach a more hawkish coalition might take to that.

I will just add this. I used to visit America on behalf of Northern Ireland, and I found that many of the expat Irish—the Irish lobby—were much more inclined to scream “No surrender” or “A united Ireland at all costs”, and then I would talk to the Irish-American politicians like Ted Kennedy, Daniel Moynihan or Tip O’Neill, and they were the sensible ones. Charlie Haughey used to be picketed when he went over because the Irish lobby there thought he had sold out on Irish independence. The British ambassador to the United States would say to me, “The green lobby, the united Ireland lobby, is jolly strong over here, but it is not a patch on the Jewish lobby”. The truth is that the Jewish lobby in the United States has done no service to Israel and it has done no service to the standing of the United States in the region. Let us think back to when President Clinton could stand between Mr Rabin and Mr Arafat. He was seen as an impartial assister towards peace. America is now seen to be one-sided, voting against the Palestinian resolution and no longer commanding confidence. A nation of the power and scale of the United States could easily be a tremendous force for good in the region.

I believe that we are in a serious and rapidly developing situation, one that makes the world more dangerous. For all who care about the future of Israel and its continuing existence, and not least providing a civilised life for all those in the region, it is desperately important that they realise that a change of course must be undertaken. They must get rid of all the conditions, sit down and try to find a genuine approach towards a two-state solution, or I fear for where the future may go.

19:45

[Lord Phillips of Sudbury]

My Lords, I had something of a conversion experience, I suppose it might be called when, like many, I went to Israel, the West Bank and Gaza for the first time in 2001. Up to that point I had read of the declining circumstances in Palestine, but I was and remain inexorably concerned about the security of Israel. For my whole adult life I have been an inveterate supporter of that country. I am a huge admirer of Israel in all sorts of ways, just as I am of the Jewish community in this country. It was not necessary for my noble friend Lord Palmer of Childs Hill to remind us of the philanthropic tendencies of Jews. In this country they have an unrivalled record of philanthropy. The tragedy is that a great country and a great people have so demeaned themselves and behaved in a manner that is not just contrary to international law but contrary to simple morality and decency that I genuinely believe that they are now on a suicide path. They are losing former friends and, I suspect, ordinary citizens across the world in droves. That is a tragedy.

I was so committed to the survival of Israel that the only time I have ever offered to fight for anyone was in 1973. I wrote to the Israeli embassy here, but fortunately for me the state of Israel was rather effective at rebutting the attack and I was not called up. When I first went to the region I could not believe my eyes. Anyone in the House who has not been there and who doubts the horrors of both the West Bank and Gaza should go. I am always surprised at how many of my Jewish friends have not been to either of those places, but in a sense I do not blame them because I think they realise how unhappy it would make them to do so. I have been four or five times over the past decade, and I always work with Jewish charities and marvel at how brave and brilliant they are. I would mention Ir Amin, B’Tselem, Machsom Watch and a number of others. Machsom Watch is comprised of 500 middle-class Jewish women who go out on rota every day to stand at the checkpoints and observe the conduct towards the humiliated and harassed Palestinians, and at night they put what they have seen on the web. What a restraint that is. A woman who took me to a checkpoint said that she was called in by one of the commanding officers. He said, “We are both Jews and we should not be arguing about this”, but then she noticed on the wall behind his head a sign that read, “Our task is to make life as impossible for the Palestinians as we can”. That about says it all.

I turn to the circumstances prevailing in Gaza. We hear a lot about Israel getting out of Gaza and the Gazans messing up their opportunities. Well, for the majority of those concerned, getting out of Gaza was very much a utilitarian decision. Maintaining 8,000-plus settlers in Gaza was simply beyond the scope of the state of Israel and was counterproductive. Today, the situation is appalling. I will read out some statistics that I have dug out. According to UNWRA, 38% of Gazans are poor, 44% are food insecure, and 80% depend upon food aid. Gazan poverty is the world’s worst, but the only one created deliberately. The blockade has caused 17% more Gazans to be in the poorest category since 2005. More than a third of them—and more than half the young people—are unemployed. Hundreds of factories stand idle and they produce exports only at the rate of 3% of the level before the trouble. Eighty-five per cent of their fishing grounds and 35% of their agricultural land cannot be accessed because of restrictions. Eighty-five per cent of schools are run on double shifts, because others have been bombed. Ninety per cent of the water is contaminated. It is rather ironic that my noble friend talked about the prowess of Israel in water production when it has decimated the water supply in Gaza. As a result, over 50% of children have chronic diahorrea. Gideon Levy, in an article in Haaretz in July, told of the way water is used in the West Bank as a tool of colonisation. He wrote this dreadful account:

“The Civil Administration is supposed to take care of the people's needs. But it does not stop at the most despicable measure—depriving people and livestock of water in the scathing summer heat—to implement Israel’s strategic goal: to drive them from their lands and purge the valley of its non-Jewish residents”.

One needs at this point to repeat—and go on repeating—that Israel is split from top to bottom. One quarter to one-third of Israelis, by other people’s calculations, are totally opposed to what is going on in Palestine. Would that they were sitting here and speaking on the side of all, or most, of the speakers tonight. I have met some of these people, and they are brave, because they are subject to huge pressure. They are called self-hating Jews, I believe.

The noble Lord, Lord Judd, said—absolutely rightly—that our Government have employed double standards towards Israel for decades, and it has got worse, not better. Thank goodness that after this latest scandal of, I think, 3,000 new colonists in East Jerusalem cutting East Jerusalem off from the West Bank by the E1 block, the Foreign Secretary has at last come out with a firm statement. I have been in this House since 2008, and I cannot tell you the number of times that we have had statements from spokesmen from Governments of all persuasions which add up to nothing. There is never any action. My feeling is that action is not just in the interests of the Palestinians or of peace in the Middle East, let alone in the wider world, it is in the interests of Israel itself. That is what drives me on this issue and makes me unwilling to hedge about and avoid the charges of anti-Semitism which always follow plain speaking on this subject, I am afraid to say.

I feel passionately that our Government, having made a start at what I call plain speaking in relation to plain facts, should pursue that path and if necessary be independent of the United States, which is in a particular relationship with the huge and powerful Jewish community there, as the noble Lord, Lord King, vividly explained. We must be independent and do what we think is right for Israel, the Palestinians, the Middle East and the peace of the world. If we do that, a lot of people in Palestine will listen to us.

In 2006, I had a meeting with Dr Ismail Haniyeh, one of the hate figures, who is the leader of Hamas in Gaza. I have to say I was immensely impressed by the man. Unless I have lost all my touch for understanding the reactions of people, I was impressed. I spent an hour with him man to man. He is dying for an opening and for some encouragement because he never gets a dividend for anything Hamas does, except more colonisation and more repression. There is hope to be had if we as a country can be brave with our policy, and I hope that the Government will carry on from where they now are.

19:55

[Lord Williams of Baglan]

My Lords, I welcome the opportunity to speak in this debate. I declare an interest as a former British official in the Middle East and as a UN Under-Secretary-General in that region. The noble Lord, Lord Palmer, referred earlier to the great Israeli diplomat Abba Eban, who once noted that the Palestinians never missed an opportunity to miss an opportunity. Now the boot is on the other foot. The Israeli Government have elevated a significant diplomatic setback in the UN—one in which it was supported by only one out of the 27 members of the EU—into a significant regional and international crisis. I fear that the hard-line stance of the current Government is resulting in a haemorrhaging of support for Israel itself. The noble Lord, Lord Palmer, referred to support for the resolution from Islamist and third world countries. The fact is that all the democracies of the world, with three exceptions—the United States, Canada and the Czech Republic—voted against Israel or abstained. That in itself is a stunning development in the history of diplomacy in the Middle East, and one that Israel needs to take careful note of. Never has its isolation been so marked.

It says a lot of Israel and of the Israeli press that these developments are followed closely and in a critical way. The newspaper Haaretz this morning is more scathing of the Israeli Government than many of the remarks made by noble Lords. Even the centrist newspaper, the Yedioth Ahronoth, is critical of Prime Minister Netanyahu’s policies and where they are leading Israel. Many noble Lords, including the noble Lord, Lord Alderdice, have referred to the regional element of peace. Where do we stand on that? Israel has peace treaties, of course, with two Arab countries: Egypt and Jordan. Those peace treaties are being sorely tested these days. It is very difficult for a democratically elected President of Egypt, Mohammed Morsi, to stand up and argue to his people that this peace treaty is right and must be adhered to. Jordan, wisely guided by King Abdullah, is also suffering great strains, and I fear there is no doubt that the majority of Jordanian public opinion is quite critical of those peace treaties.

We have heard much about Gaza. Where have Israeli policies led there? I will tell you: next week, Khaled Meshaal, the leader of Hamas, will enter Gaza, and he will enter as a victor in the eyes of Palestinians. I do not think Abba Eban would recognise Israeli diplomacy today. Israel must rescind the actions announced by its Government in the last 48 hours: namely the declaration of more and more settlements—another 3,000 dwellings—and that planning will begin for settlement in E1, the land block between East Jerusalem and the heart of the West Bank. Everybody knows what that means. It is meant to be the end of the possibility of a Palestinian state. If that were not enough, $120 million—£75 million—of taxes owed to the Palestinian Authority have been seized by the Israeli Government in the past few days. Prime Minister Erdogan—a strong critic of Israel—will also visit Gaza soon. This is not diplomacy, and it is not diplomacy that is serving the state of Israel. Time, in my experience, is running out for a two-state settlement. We would all bitterly regret that and, most of all, it would cause great pain for the state of Israel.

20:00

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, I am grateful for the opportunity to respond for the Government to this debate, brought by the noble Baroness, Lady Royall, about the discussions that we have had with the Palestinian leadership in light of the Palestinian resolution at the UN General Assembly last week. It is an important and timely debate and I welcome it. I know the Israeli-Palestinian conflict is a matter of great interest to the House and, as always, involves great emotion and sincerity of views on all sides. Achieving a two-state solution to the Israeli-Palestinian conflict is one of this Government’s top international priorities.

The UK has long been clear that we support a negotiated settlement, leading to a safe and secure Israel living alongside a viable and sovereign Palestinian state, based on the 1967 borders with agreed land swaps, with Jerusalem as a shared capital of both states and with a just, fair and agreed settlement for refugees. That is the only way to secure a sustainable end to the conflict, and it has wide support in this House and across the world.

However, there has been a dangerous impasse in the peace process over the past two years, as referred to by my noble friend Lord Alderdice. The pace of settlement building has increased, and we have seen new and concerning reports of this in recent days. Continued rocket attacks on Israel and continued settlement building have resulted in frustration and insecurity deepening on both sides and the parties have not been able to agree a return to talks.

We are grateful to Egypt, the United States and the UN Secretary-General for their role in bringing about a ceasefire in Gaza last month. We now need to build on this to bring about a lasting peace, including, as my noble friend Lord Phillips of Sudbury said, the opening up of the blockade in Gaza for trade as well as for aid; and, of course, also an end to the smuggling of weapons. The crisis in Gaza and tragic loss of Palestinian and Israeli life show why the region and the world cannot afford a vacuum in the peace process.

The frustration felt by many ordinary Palestinians about the lack of progress in the peace process is wholly understandable. We condemn illegal settlement activity in the West Bank and East Jerusalem, because it threatens the very viability of the peace process and a two-state solution that we all support. After many decades, the Palestinians still do not have the state they aspire to. That is why we have consistently asked Israel to make a more decisive offer to Palestinians than in the recent past, and have also called on Palestinians not to set preconditions for negotiations.

We agree with my noble friend Lord Palmer that the parties must get back to the negotiating table. Only today, our consul-general in Jerusalem conveyed this view to the chief Palestinian negotiator. The only way to resolve the dangerous impasse in the peace process is a rapid return to credible talks. This is the Government’s guiding principle, and it was this concern that determined the Government’s approach to the Palestinian resolution at the UN General Assembly last Thursday. Nevertheless, we respect the course of action chosen by President Abbas. There is no doubt that he is a courageous man of peace. Let me be clear: we want to see a Palestinian state and look forward to the day when its people can enjoy the same rights and dignity as those of any other nation. That is why we stress the urgency of negotiations leading to a two-state solution.

Noble Lords, including my noble friend Lord King of Bridgwater, raised questions and concerns about the assurances that the Government sought from President Abbas and the position we took in relation to the vote. The Government, I suppose, judged that these assurances would help facilitate a return to negotiations. However, our priority now is to try to restart those negotiations. We call on all parties to show the political will necessary to achieve this. We will redouble our efforts to restart the peace process and continue our strong support for the two-state solution. As I have said to this House on many occasions, and indeed only recently, 2013 will be a crucial year for the Middle East peace process. We have urged Israel to avoid reacting to the resolution in a way that undermines the peace process and a return to negotiations. The Foreign Secretary spoke to the Israeli Foreign Minister on Friday and the Israeli Defence Minister on Saturday. He made clear that we would not support a reaction that sidelined President Abbas or risked the collapse of the Palestinian Authority.

We are therefore extremely concerned by the decision of the Israeli Cabinet to approve the building of 3,000 new housing units in illegal settlements in the West Bank and East Jerusalem. This Government, along with our European partners, have consistently made clear that settlements are illegal under international law and undermine trust between the parties. If implemented, these plans would alter the situation on the ground on such a scale that it would make the two-state solution, with Jerusalem as a shared capital, increasingly difficult to achieve, if not impossible. The right reverend Prelate the Bishop of Guildford was right to raise settlements as a pivotal issue. Such plans undermine Israel’s international reputation and create doubts about its stated commitment to achieving peace with the Palestinians. We need urgent efforts by the parties and by the international community to achieve a return to negotiations, not actions that will make that harder.

In all the conversations that the UK has had with Palestinian negotiators, and those that the Deputy Prime Minister and the Foreign Secretary have had with President Abbas in the past week, relations have been excellent. That deep friendship will continue. The financial and political support that the UK gives, with very strong cross-party support, to the Palestinian Authority, which is among the foremost in the world, is understood well by the Palestinian Authority and will, of course, continue. We want the Palestinian Authority to succeed and we believe that President Abbas is the best interlocutor that Israel will have to bring about peace. We continue to be in regular contact with the Palestinian Authority, and officials in our consulate-general in Jerusalem had meetings in Ramallah today to reinforce the UK’s firm commitment to and support for the Palestinian Authority. My right honourable friend Mr Burt is planning, possibly this evening or tomorrow, to speak to the Palestinian chief negotiator.

We have been clear that we deplore the recent decision of the Israeli Government to build 3,000 new housing units and to unfreeze development in the E1 block, and the confiscation of this month’s clearance revenues. This threatens the viability of the two-state solution. On Saturday, the Foreign Secretary publicly called on the Israeli Government to reverse this decision. In common with steps taken by other European partners, including France, the Israeli ambassador to London was formally summoned to the Foreign Office this morning by my right honourable friend the Minister for the Middle East, who set out the depth of the UK’s concerns about the recent Israeli decision.

The noble Baroness, Lady Royall, asked what representations had been made to Israel on the confiscation of customs revenues. The Minister for the Middle East conveyed our serious concerns about this decision to the Israeli ambassador this morning. The national security adviser, Sir Kim Darroch, reinforced this concern to his Israeli counterpart when they spoke this afternoon. The noble Baroness, Lady Royall, also raised the question of what consultations we have had with the noble Baroness, Lady Ashton. We have had a number of consultations with key international partners since Friday, including with the office of the noble Baroness, Lady Ashton, and with the US Administration. We note the strong statements of the noble Baroness, Lady Ashton, and Secretary of State Clinton on these issues.

My noble friend Lord Alderdice raised important points based on greater experience. I am grateful for his contribution and also for the tone of his contribution. It is of course right that a regional initiative is important. Egypt’s success in relation to the Gaza ceasefire is just one great example of this, but I am sure my noble friend will agree with me that the US must now step up to the mark, as real progress will be made only with its positive involvement.

The noble Lord, Lord Janner, is right when he says that the future has to be agreed through diplomacy, not rockets. The recent conflict in Gaza left 160 Palestinians and six Israelis dead. That is not the way forward. The noble Lord, Lord Judd, raised important issues, noting that in order to lay the foundations for future agreement, we must understand history. I agree that an even-handedness in this matter is as much in the interests of Israel as of the Palestinian people. The noble Lord, Lord Williams of Baglan, also raised the issue of settlements. I hope he feels that I have dealt with that already.

Palestine is now a non-member observer state at the United Nations but, sadly, the situation on the ground remains the same. The only way to give the Palestinian people the state they deserve, and the Israeli people the security they are entitled to, is through a negotiated two-state solution. That requires both parties to return to negotiations, Israel to stop illegal settlement building and Palestinian factions to reconcile with each other.

The past month has highlighted the fragility of the situation in the Middle East and the coming year will prove crucial if peace is to be achieved. Urgency is required to ensure that we grasp the opportunities that will be presented. We encourage the US, with the strong and active support of the UK, the EU and the international community, to show decisive leadership and do all it can in the coming weeks and months to drive the process forward.

If progress on negotiations is not made next year, the two-state solution could become impossible to achieve. That is why the Foreign Secretary has said to the US Secretary of State, Hillary Clinton, that such an effort would need to be more intense than anything seen since the Oslo peace accords. We are ready to throw our support behind this to find a solution to the conflict before it is too late.

Legal Profession: Regulation

Monday 3rd December 2012 Lords Chamber

Question for Short Debate

20:10

Tabled By

[Baroness Deech]

To ask Her Majesty’s Government what assessment they have made of the efficacy of the regulation of the legal profession.

[Baroness Deech]

My Lords, I declare an interest as the chairman of the Bar Standards Board and as a non-practising barrister. I have regulated several enterprises in my time, but I have been fortunate in only ever regulating those which I am convinced do good and with which I am familiar and well briefed. This House spent many hours last year debating the merits of and need for public bodies, and the principles aired then are ones that we need to be reminded of tonight.

The background to regulation of the legal profession is simple to grasp, and it is quite different today from the situation that prevailed when the governing statute, the Legal Services Act 2007, was conceived and passed. Simply, it is the lack of legal aid and affordability. That is no problem for those who go to the thriving commercial side of the Bar, but the average wage earner often finds the expense of legal advice beyond his means, in part because of the built-in cost of regulation. The effect on the profession is dire too, for the very large numbers of the Bar who do, arguably, the most socially valuable work, in criminal and family law, are seriously affected, because payment for regulation has to come out of their own pockets. This works against mobility and diversity, for the altruistic young people who qualify and want to come to the Bar cannot earn the modest living they once relied on without the legally aided work, at the very time when their higher education debts have peaked.

The Legal Services Act, which governs my work, is grounded in the 2004 report by Sir David Clementi on the regulatory framework of legal services. He was concerned with the then over-complex existing regulatory frameworks and with complaints handling, although, to be fair, that was more relevant to the solicitors’ branch than the Bar. He was trying to reconcile liberalisation, allowing competition and access to flourish, with protecting the public, with special focus on complaints handling. His report led to the Legal Services Act 2007.

Consumerism was the other motivating factor behind the Act, but that policy was formulated in 2000, in an entirely different economic climate, following the Office of Fair Trading report about competition in the professions. This was all before the crash of 2007-08 in the financial world and its dreadful results. That demonstrated the failure of financial regulation, which, with hindsight, might have affected the principles behind the Legal Services Act. It was once thought that the division between clearing banks and merchant banks should go, and that there should be a free market of unfettered competition and deregulation. I am no economist but I would not be alone in pointing out that the meltdown and bank collapses resulted, and the Financial Services Authority seemed to have no power to prevent any of this or stop any innocents from losing. Indeed, that super-regulator is about to be dismantled. Legal regulation was developed without regard to this history and its risks have yet to play out.

Under the 2007 Act, the profession is overseen by the Legal Services Board. Its powers are devolved to some extent to the front-line regulators—for these purposes, the Bar Council and the Law Society, which have separated out their regulatory and representative functions. Therefore, the Bar Council represents barristers and the Bar Standards Board regulates them; the Law Society represents solicitors and the Solicitors Regulation Authority regulates them—not to mention six other regulators. For the purposes of this debate, I will concentrate on the Bar and the solicitors, of whom there are 10 times as many, and I am married to one of them.

Proper regulation, in the public interest, is absolutely vital but it needs to be balanced against cost and existing resources, and performed efficiently. It does not take much to see that, rather than sorting out the maze of regulation, the statute adds to it; there may be over-regulation, duplication of regulation and competitive regulation, none of it cost-capped. The cost of the Legal Services Board and its demands are serious issues, for the practitioners have to fund it, as well as the other projects it has required—quality assessment of advocacy, an education review, diversity data collection and the Office for Legal Complaints. More than that, it is arguable that the Bar was caught up in the slipstream of the criticisms that were levelled at the handling of complaints by solicitors, and the heavy structure of the 2007 Act is not suited to as small a profession as the Bar.

When the Legal Services Bill was introduced in 2006, the regulatory impact assessment calculated the annual running costs of the Legal Services Board, which is the super-regulator overseeing the specialised ones, at £3.6 million. However, the total borne by the entire legal profession up to now is £19.5 million, with another £50 million for the Office for Legal Complaints. The cost falls on clients and, in the case of legally aided clients, on practitioners. That is due to duplication of work through micro-management of regulators and the pursuit of objectives more akin to a market regulator than an oversight public interest regulator, as was mandated by Parliament.

I echo the fears of Sir Sydney Kentridge when regulation of the legal profession was first advanced a few years ago. He feared an increase of power of the Government to control the legal profession through a government-appointed body, but he was confident that the Lord Chancellor would ensure that the Bar was protected. Sadly, as I have learnt at international conferences, the outside world sees the independence of our legal profession as diminished by regulation.

The 2007 Act laid down eight regulatory objectives in no particular order. Some conflict with others in practice. Therefore, a margin of appreciation clearly must be left to front-line regulators to decide what steps to take. It is not clear from the statute whose view would prevail in case of disagreement between the Legal Services Board and the front-line regulators. Nevertheless, history has shown that one objective, that of promoting the interests of consumers, has been elevated above the others by the super-regulator, and in so doing it sees it as its task to “direct” rather than “assist” —the word chosen by Parliament—the front-line regulators.

Excessive focus on the consumer interest may be to the detriment of the professional interests and standards upheld by the lawyers. Commercialism is not everything, although one wants legal advice to be available and affordable. Certain services, such as education, health and the law, are beyond market value. The public interest must prevail. It does not seem to me that the public will be well served if there is authorisation for a new category of partly qualified or underqualified providers of legal services who offer only one service—for example, will writing, which cannot really be confined to a small area.

Too many new projects are being imposed by the super-regulator on the front-line regulators without due regard to cost, need and effort. For example, outcomes-focused regulation does not work well for the rules of conduct of the Bar, because court litigation is a process-driven system, where the rules are not merely means to an end but an end in themselves and intrinsic to the rule of law itself.

Let us take referral fees. They are seen by the entire Bar as unethical, restricting competition between lawyers and denying the client freedom of choice. They are likely to be illegal under the Bribery Act 2010, but the front-line regulators are being told to retain them except where specifically banned by law, in the face of evidence that they are a bad thing.

Another example is that the members of the Bar have been told that, when they first meet a criminal client in the cell, they must give that client on a piece of paper directions as to how to complain. There could not be a worse moment at which to do it. Now there is required detailed collection of barristers’ equality and diversity data, which go beyond the Government’s recommended approach, in that they require data on sexual orientation and socio-economic status. They are to be collected chambers by chambers, yet many chambers have fewer than 10 members, which makes collection of such data very sensitive, because anonymity may easily be breached. The Bar’s preference for aggregate collection of such data across the profession was rejected.

The Bar Standards Board does not dispute the need for proper regulation, but it should be proportionate, affordable and effective. We were disappointed that the Ministry of Justice’s triennial review of the Legal Services Board did not address those concerns directly. The opportunity will present itself again in the quinquennial review of the 2007 Act.

The noble Lord, Lord Carlile, who cannot be in his place this evening, has said, in support of what I am saying, that the regulation of the legal profession is cluttered and bureaucratic. It may not have gained the confidence of the profession or the public.

At this stage in the implementation of the Act and the introduction of alternative business structures, there remains a role for the Legal Services Board, but not many more years should pass without an overhaul of the complications introduced by the Act in establishing a super-regulator. I hope that the Lord Chancellor and the Ministry of Justice will start a discussion with the profession and identify a simpler, cheaper and more balanced future.

20:21

[Lord Faulks]

My Lords, I begin by declaring an interest. I am a practising barrister. I was a head of chambers for nearly a decade until relatively recently and I am a former chairman of the Professional Negligence Bar Association.

I shall make a few observations about the position of the Bar. My noble friends Lord Gold and Lord Phillips of Sudbury will no doubt speak about the solicitors’ profession. When I started to practise, the Bar was lightly regulated, the profession was much smaller, chambers were much smaller, circuits had more power and influence, and most senior barristers proceeded to some form of judicial post. The standard of ethics was extremely high, but there were undoubtedly some restrictive practices which needed to change. Those practices, together with the considerable increase in the size of the profession and the way it functioned, called for examination.

Following the report of Sir David Clementi, the Bar Council carried out his central recommendation: that there should be a split between the regulatory and the representative elements of the Bar Council’s work. It therefore established the Bar Standards Board. The members had extensive experience of regulation and corporate governance and were appointed on Nolan principles.

It would be inaccurate to say that the Bar, a still small and independent profession, universally welcomed the arrival of the board but, since it has been set up, there has been a growing respect for what it does. There have inevitably been increasing demands on chambers in terms of record-keeping, compliance with regulation and a variety of measures that the board has imposed on the profession to secure high standards and ensure that the Bar functions in a way that reflects the public interest.

The key to the respect that the BSB commands is the evidence-based approach adopted by the board and the sense among barristers that it has taken the time and trouble to understand the Bar and the way it practises, both its weaknesses and its strengths. The need for a super-regulator, or oversight regulator, to oversee the approved regulators such as the BSB has not been seen by the profession to have any obvious justification—to put it mildly—particularly when it seems to involve sets of chambers duplicating many of the obligations placed on them by the BSB and increasing still further the cost of compliance.

What is the proper role of the Legal Services Board? As the Legal Services Bill was going through Parliament, a number of parliamentarians expressed the fear that the LSB might be heavy-handed and would not allow approved bodies such as the BSB, once they were operating effectively, to get on with the job. Reassurance was provided by the then Government. For example, on 13 June 2007, Bridget Prentice MP, the Parliamentary Under-Secretary of State in the Department for Constitutional Affairs, said:

“It is important that the oversight regulator does not micro-manage and second guess the actions of the approved regulators, as Members on both sides of the Committee will agree”.—[Official Report, Commons, Legal Services Bill (Lords) Committee, 13/06/07; col. 95.]

This is a reference to the work of the Joint Committee on the Draft Legal Services Bill, to which Sir David Clementi had said in evidence that there should be “minimal interference” by the LSB in the work of the approved regulators.

I have had the opportunity of reading the Bar Council’s response to the triennial review of the LSB by the Ministry of Justice, together with the LSB’s response. To the disinterested observer, I recommend reading these two documents. The arguments of the Bar Standards Board are compelling. Those of the LSB are rich with regulatory language, not easily understood by the general reader, and include a great deal of self-justification. They also indicate a desire to play an increasing role in the regulation of the legal profession. The response concludes with an observation about a review of the 2007 Act:

“Any significant change to the current settlement in advance of such a review will divert effort unnecessarily from the current challenging delivery agenda”.

This does not sound very much like what Parliament had in mind for the Legal Services Board.

I will give the House an example of where the LSB clearly wishes to have a significant involvement in the way the legal profession functions, which is in relation to legal education. The chair of the LSB observed in his Lord Upjohn Lecture in 2010 that the current framework for legal education and training was,

“simply not fit for purpose”.

In his own 2012 Lord Upjohn Lecture, Lord Neuberger, the president of the Supreme Court, made this observation about David Edmonds, the chairman of the LSB, and the Legal Education and Training Review:

“I cannot share the view which David Edmonds was reported in the Guardian as expressing in March this year, namely that he would be ‘extremely disappointed’ if the LETR only made minor recommendations. That suggests a conclusion that major reform is both necessary and proportionate, reached in the absence of any evidence and analysis. But surely we should wait for the evidence, the analysis of that evidence, and the conclusions drawn from that analysis before we start talking of disappointment or the nature of the appropriate recommendations. We should all be surely approaching the Review and its outcome with an open mind”.

No doubt the observations of the chairman would be said to be consistent with one of his goals in the LSB’s draft strategic plan for 2012 to 2015, which was,

“to reform and modernise the legal services market-place in the interests of consumers, enhancing quality, ensuring value for money and improving access to justice across England and Wales”.

The LSB clearly has very significant regulatory ambitions.

Who pays for the increasing regulation? The cost falls on practitioners and very harshly on those who are starting and who depend on the publicly funded fees which are steadily reducing in their true value. Smallish sets of chambers with a high BME quotient are particularly hard hit. For those not dependent on publicly funded work, the cost of regulation—much of which, in my view, is unnecessary—will ultimately fall upon the consumer of legal services, who will have to pay more for the increasing infrastructure that is necessary in chambers in order to comply with the burden of regulation.

Barristers are, frankly, bewildered by some of the requirements imposed by the LSB. The inept requirement by the LSB that barristers should inform their lay clients at the point of first instruction of their right to make a complaint to the chambers and, as necessary, to the legal ombudsman, shows very little understanding of the way barristers actually practise and an insensitivity of the circumstances in which a client sees a barrister. Similarly, the requirement by the LSB that quality and assurance should extend to practitioners’ advisory work reveals a complete ignorance of the way in which the profession works—not to say a failure to grasp fundamental principles of law in relation to the privilege which attaches to instructions given to barristers. These examples and many more illustrate the perils of having a non-expert lay regulator attempting to devise rules of conduct for practice by members of the legal profession.

Barristers understand the need for regulation and for public confidence in the legal system. However, it should not be forgotten that the legal profession is held in high regard throughout the world, as is our system of justice, and results in considerable benefit to the economy of this country. We should take considerable care before ripping up the model.

I am sure that the Minister will accept, as do the Government, that regulation needs justification and that our economy generally has been overburdened by unnecessary and inappropriately onerous regulation. I urge the Minister to support post-legislative scrutiny of the effectiveness of the Legal Services Act, particularly the scope of the LSB’s activity.

I congratulate the noble Baroness, Lady Deech, for bringing forward this important question to your Lordships’ House. I applaud her contribution to the raising of standards at the Bar and endorse all that she has said so ably in today’s debate.

20:29

[Lord Phillips of Sudbury]

My Lords, I, too, thank the noble Baroness, Lady Deech, for bringing this subject before the House. I confess that I received her e-mail warning us of all this only this morning, so my contribution may be lacking in coherence, but I will make a few points if I may. I started full-time in a solicitors’ office—admittedly, as an office boy—55 years ago, and have seen an astonishing transformation over that time in the regulation and, I believe, the ethos of what is still called a profession. When I started there was a maximum of 20 partners; you could have only partnerships, not limited liability; there was no advertising and no conditional fee arrangements; referral fees were not permitted; and, above all, there were no such things as “alternative business structures”, that charmingly denominated abortion that we now have among us.

Sadly, I must be honest and say that I do not actually think that solicitors are any longer members of a profession. I think that we are just another business. Thank the Lord, integrity is still largely to be found within the solicitors’ branch of the profession, but I do not see it long maintaining itself because the structures within which we now function have become so commercialised and driven by bottom-line considerations that it is unreasonable to expect integrity to survive organically—in rather the same way, I am afraid, as the City, little by little, has lost its values base. I agree with what the noble Baroness said about the big bang and its consequences

I feel that we are going down a blind alley in thinking that more and better regulation can maintain the essential integrity without which we are no longer officers of the Supreme Court and handmaids to justice but something a great deal less and, in some ways, quite threatening. I say that with great reluctance but cannot avoid it. I was the only solicitor member of the committee set up under Sir Sydney Kentridge, and he had a very lively belief in the ethos of the profession—a set of values, if you like, autonomous to each practitioner, without which the whole structure could not survive.

The truth now is that we are deep in regulation—I would say, as have others, overregulation or inappropriate regulation. I looked at Halsbury’s Laws of England this morning and found to my amazement that there are two volumes on the professional regulation of lawyers—1,196 pages of stuff about it. When I started, I doubt that there were 60 such pages. The life of the lawyer today—I can speak only of the solicitors’ profession—is unbelievably bureaucratic. There is somehow a belief that if you are forced to write a six-page letter to a client before you start work, that will somehow improve the work, or that some of the forest of internal bureaucracy that now prevails in big firms can maintain those essential elements without which there can be nothing.

I look to the regulatory objectives of the 2007 Act. I may say that I was one of the very few Members of the House of Lords—in fact, I may have been the only one—who was flat-out opposed to the part of the 2007 Act that set up the alternative business structure. But as has already been remarked, the eight regulatory objectives are not entirely internally consistent. When you think that the eighth of them is,

“promoting and maintaining adherence to the professional principles”,

of which there are five, it all adds up to a not entirely clear set of guidelines for the young person entering the profession. Above all, integrity should surely trump everything. I do not think the word appears in the eight regulatory objectives.

I leave my few remarks at that. I warn against the bureaucratisation that attempts to set the values for the practitioners. Up to a point, of course you have to have a complaints mechanism; of course you have to have somebody who can strike down the few bad apples and maintain that integrity. But I believe, as had been said by the two previous speakers, that we are not at the point where we are doing the regulatory process the best we can. In fact, going back to the drawing board—as I think was the phrase of the noble Lord, Lord Faulks—might well be what is needed.

I have not embarked on the alternative business structure, except to say that if anybody thinks that you can have a law firm 70% or 80% owned by whoever the hell you like and that that is not going to impact directly on the ethos of that enterprise, they are living in cloud-cuckoo-land. There are 120-plus applications now for ABS status and it is already observable that these big combines are going to be driven first, secondly, and thirdly by profit, profit, profit. It is all about the bottom line, just as in the City. Everything else can go hang. The notion of informal pro bono work is, I am afraid, inconsistent with the values that will bring into existence the vast majority of these alternative business structures. I would like a re-examination of them as soon as is feasibly possible, because they are a real nail in the coffin of professionalism.

20:37

[Lord Gold]

My Lords, I start by thanking the noble Baroness, Lady Deech, for bringing this debate forward this evening. Perhaps like the noble Lord, Lord Phillips, I was somewhat sceptical of the Legal Services Act and what was intended by it, but I was not here then. Maybe I would have joined in voting against it. But we are where we are, and we must have a properly regulated legal profession that ensures that all providers of legal services meet high standards of competence and behaviour. This is even more important now as the first alternative business structures start providing legal services. I share the concerns of the noble Lord, Lord Phillips, about where that takes us, but we will see.

The present system reflects the proposals in Sir David Clementi’s 2004 report, as we have heard from earlier speakers, for which there was general parliamentary support on all Benches as well as support from both the Law Society and the Bar. High on Clementi’s recommendations was the separation of representative and regulatory functions.

The Legal Services Board was created to provide oversight of a variety of different regulators to ensure that the right regulatory objectives are achieved and to secure some independence from the Government. The current regulatory framework has been in place only since 1 January 2010, when the Legal Services Board took on the majority of its powers under the Legal Services Act. In a review published in July this year, the Ministry of Justice was supportive. It concluded that the LSB should continue to deliver its functions in its present form. Recommendations for some improvement to its corporate governance were made but, by and large, it was to carry on operating as before.

Despite the endorsement from the Ministry of Justice, there has been some criticism of the LSB. We heard some this evening. The noble Baroness, Lady Deech, identifies criticisms made by the Bar Standards Board, notably that there is overregulation and duplication, leading, among other things, to unnecessary cost which inevitably is being picked up by the consumer. While generally supportive, the Law Society, representing 120,000 solicitors in the UK, is also critical. It believes that the LSB has not got the balance right and that the objective to promote competition in the provision of services is given greater emphasis than improving access to justice, encouraging an independent, strong, diverse and effective legal profession and promoting and maintaining adherence to the professional principles.

The regulatory arm of the Law Society, the Solicitors Regulation Authority is a bit more supportive, but also believes that the balance is not quite right at the moment. The SRA approves of the LSB’s emphasis on putting the consumer and public interest at the heart of regulation and its role in the appropriate co-ordination of standard setting across the various front-line regulators. The SRA also considers that the Legal Services Board has made significant progress in achieving its objectives, including making the market more diverse, as seen in the licensing of ABSs, and developing a regulatory regime that is both independent and transparent. However, the SRA believes that the LSB now needs to work closely with regulators to develop a common understanding of its role. It considers that the LSB must focus on properly developing its oversight role and, in doing so, reduce its approval, enforcement and investigatory functions. However, the SRB acknowledges that there have been improvements.

The main thrust of the complaint against the LSB is whether it is truly performing the role of oversight regulator, which was what was intended, or whether, in the words of the Bar Council, there has been “mission creep”, with the LSB now duplicating and overlapping the work of the front-line regulator, micro-managing the activities of those regulators it is meant to oversee. Front-line regulators, such as the SRA, are much more in touch with the profession, so why should we defer to something much more remote, where I do not believe that there are any legal practitioners involved? Critics claim that this duplication and the LSB’s micro-management have greatly increased the cost burden. It seems, from other speeches this evening, that that is indeed supported. Although it might be said that the fact that there is some tension between the LSB and the regulators over which it has oversight, or at least some of them, is not a bad thing—it might keep both sides on their toes—the extent of the serious criticisms that are being made suggests to me that we really need to look again at the balance.

I have spent the past two years immersed in the world of corporate governance. This has demonstrated to me that finding the right balance is key. While businesses must adopt a proper governance regime, it is essential that governance does not take over and damage the very business that the organisation is promoting. So those responsible for regulation must be practical and sensible in their outlook. Regulation for regulation’s sake cannot be right. Any regulation that is put in place must be appropriate and proportionate to achieve the required result. Its purpose must be understood and supported by those being regulated.

I am also sure that, if at all possible, finding the right balance should be achieved through greater dialogue and perhaps compromise between the relevant parties. Those concerned may need to demonstrate that they understand the issues raised by the other parties and are willing to be flexible. In the perfect world, by working in partnership and accepting that each side may be making valid points, the LSB and the regulators will be better able to deliver excellence in the regulation of legal services. This is far better than seeking to impose a solution on the regulators or the LSB. However, I understand there has been considerable dialogue between the LSB and the regulators and that little progress has been achieved. That is unfortunate and harmful to the legal profession and the administration of justice.

Under the circumstances something more is needed; it has been suggested that even late on there should be post-legislative scrutiny of the effectiveness of the Legal Services Act in order to test whether the original objectives have been achieved. I suggest to the Minister that this is something that should now be looked at seriously. The Bar Council wants such a review, and I do not think that the solicitors’ profession would have much difficulty in supporting it. Despite this, I think that the LSB has a continuing role, particularly as we have alternative business structures coming into place. Until we see where that actually takes us and how these new bodies operate, the LSB should remain, but I think the sort of review I have mentioned is necessary.

20:46

[Lord Mackay of Clashfern]

My Lords, it seems a long time since Burns Night 1989 when I introduced Green Papers about the reform or control of the legal profession. Your Lordships who are old enough will remember that these Green Papers provoked a certain ripple of interest from the judiciary and others. There have been great changes since then. In formulating the Green Papers we were principally, although not entirely, dealing with what looked like anticompetitive practices in the legal profession. To what extent a particular practice is anticompetitive is quite a difficult question. For example, it was thought that preventing the legal profession advertising was anticompetitive; I am not sure that the legal profession is better today with the kinds of advertisements you see on the television and in the newspapers. What one characterises as anticompetitive may, in fact, be something to do with the quality, independence and integrity of practitioners. If I am a reasonable member of a legal profession, I surely do not need to make my way forward by criticising my fellow practitioners. Relationships created in the course of professional work should, in my view, be the principal recommendation for a professional person.

Matters have since moved quite a distance. In my final proposals, which went through as an Act of Parliament, judges were given an important role in the control of the legal profession, which worked pretty well for a time. Gradually, the influence of judges was reduced until it disappeared altogether from the formal aspects of the regulation and eventually new standards were set up. I believe that the late Lord Nolan was the first to point out the need for a division in the Bar between its regulatory and representative functions, particularly in relation to the charges levied by the Bar Council for being a member of the Bar. If it was regulatory, it could be compulsory, whereas if it was representative, it should be voluntary. “No taxation without representation” might be an adapted expression for what he said.

It is also important to remember education in this connection. It was important in my judgment, and I remain of the view that it was probably correct, that a reasonably efficient system of education was required to maintain the professional quality of the Bar and of the solicitors’ profession.

It seemed to me, and I still take this view, that the different branches of the legal profession have different challenges to face. Therefore, I am glad that the Bar Standards Board, the Solicitors Regulation Authority and the other regulators which exist now in the legal profession have independent existence. I remember discussing the need for differences with Sir David Clementi. I think he did not fully agree with my point of view, which was why he suggested this overarching supervisory body for the legal profession as a whole. He thought that the legal profession should be regarded as a whole, and I could see the force of that. I also think that overspecialisation in the legal profession is detrimental to its success as a proper organ in the general affairs of our country.

We must recognise that it is important that the legal profession should be independent. In recent days, we have heard a little about regulation in relation to another independent part of our economy with a fairly heated argument on one side and on the other. That was part of the burden of the debate that we had on the Green Papers on that marvellous Friday, which I certainly remember with great—what should I say?—anxiety as to whether I was doing the right thing.

As I have said, education is important. In this connection, I would be glad if the Minister would comment on a report that I have recently read that the College of Law has been transformed, no doubt with the authority of the Privy Council, into the University of Law. I always thought that a university was supposed to be an institution which had perhaps not absolute universality but at least covered a few disciplines, including medicine and the like. But the University of Law seems to have only one discipline as its subject matter.

[Lord Phillips of Sudbury]

Is it not also true that the university which emerged from the College of Law is a profit-making entity? I rather think that it is.

[Lord Mackay of Clashfern]

I am just about to come to that point. I understood that the something or other—I am not sure exactly what—of the College of Law has been sold to a commercial organisation, which I assume has a profit motive in it. I do not think that it is a charity. However, the university would be a charity, at least under the ordinary definition of charity which prevails as an institution for the advancement of education. I would be glad to know a little about the Government’s policy in relation to having the legal profession taught, and a university financed, by a profit-making organisation. I am not against profit for profit’s sake at all but, hitherto, universities have not been regarded primarily as institutions set up for profit, except for the profit of those who profit from them.

The noble Baroness, Lady Deech, has led the Bar Standards Board with tremendous distinction. I sensed a certain amount of frustration in her remarks this evening about the way in which really efficient standard-setting for the Bar can be damaged by unnecessary and sometimes overcomplicated interventions by those who do not quite share the same objectives as the Bar Standards Board. I feel that the same may be somewhat true in the solicitors’ branch of the profession.

I hope that the Government will take very seriously the suggestion that this whole area should be subject to post-legislative scrutiny. The Joint Committees of this House and the other place have shown themselves to be very valuable in scrutiny of legislation. Post-legislative scrutiny of this legislation, which is so fundamental to the success of our free legal profession, is now due.

20:55

[Lord Goldsmith]

My Lords, I shall speak briefly in the gap and have alerted both Front Benches to this. It is a pleasure to speak after the noble and learned Lord, Lord Mackay of Clashfern, because it was probably as a result of the innovations and reforms that he has referred to that I first became involved in questions relating to the regulation of the legal profession. I have now been involved in this for more than 20 years, both nationally and internationally. I was chairman of the Bar during the first year that it faced competition from solicitors in terms of rights of audience and when it for the first time had to succeed on the basis of its merits and not on the basis of restrictive practices.

I want to spend two minutes underlining a very important point raised by the noble Baroness, Lady Deech. It is not the question of whether there should be regulation for the legal professions; of course there should. It is not the question of whether the regulation should be for the public interest; yes, it should. It is not the question of whether regulation should be carried out purely by lawyers—the body which the noble Baroness, Lady Deech, heads has a majority of non-lawyers on it. Those are not the issues. Rather, the issue is: what is it that the Legal Services Board is doing? This came about when I was fulfilling a different role as a member of the Government who introduced the Legal Services Act. I did not have direct responsibility for that; that was the Lord Chancellor. However, obviously I knew well what was going on and expressed my views at the time. We tried to make clear to both sides of the legal profession, and indeed to the other legal bodies, that the Legal Services Board was not going to be an alternative regulator. It was to be an oversight regulator which had to be there as a backstop in case the regulators themselves—the Law Society, the Bar Council and the two bodies that they set up—were not doing their job.

I am still involved in the regulation of the legal profession as a bencher at Gray’s Inn and a member of its management committee—a constituent part of the way in which the profession operates. I have a growing concern about whether the Legal Services Board is micromanaging and suffering from mission creep, which is almost inevitable whenever a body is set up. I know, because I have seen the operation, that the noble Baroness is not a pushover as far as the Bar is concerned; absolutely not. I have seen her berate—very nicely but still enormously effectively—Lord Justices of Appeal who were quivering, not realising what they had done wrong. When she does that it is very good for the profession and for the public. What is not needed alongside that is a body which thinks that it has the same responsibility—it is not there in the background but is forward. The Bar Council said in a briefing that on the important public issue of the extension of direct access the Legal Services Board sent 14 points that it wanted to see addressed in any submission on this question. If that was the case, it was over egging the role.

I have a single question and a single proposition for the Minister. Will he say, having heard from the noble Baroness, that the Government will take on the question of having a proper review of what the Legal Services Board is doing? Many people with experience, from inside and outside the profession, will be able to assist in relation to that. It is important. As the noble and learned Lord, Lord Mackay, said, what matters at the end of the day is the independence of the legal profession. That needs to be safeguarded as well as the public interest, efficiency and the other things that noble Lords have referred to.

20:59

[Lord Hunt of Kings Heath]

My Lords, this has been a very interesting, although short, debate. At the moment we are thinking very much about regulation of the media. Whatever the outcome of the current debate, in most sectors of the economy it is generally accepted that there should be statutory regulation of the affairs being conducted within them—and, where the professions are concerned, by the individuals who practise in that sector. However, there is much less consensus about the right regulatory approach.

The noble Baroness, Lady Deech, said that circumstances had changed considerably in the past decade since the architecture of the 2007 Act was formed—and, indeed, many years after the noble and learned Lord, Lord Mackay, first put his mind to these rather difficult subjects. She was right to say that the economic climate is different, both in the country and for the profession; and she was surely right, too, when she pointed to some of the experiences of regulators in other sectors. She mentioned financial services. I will mention the health service sector, where the existence of the long-standing—almost long-running—inquiry into Mid-Staffordshire has moved on from what happened in the hospital to look at the role of the various regulatory bodies, and at whether collectively they did the right thing or whether there were gaps, shortcomings or tensions between them.

It is absolutely right for us to have this debate and to discuss regulation within the legal profession. I am sure that the Government will welcome the opportunity to state their views and perhaps to reflect on some of the comments that have been made about the need for them to think in the next two or three years about how to take their views forward. I listened with great interest to the comments of the noble Lord, Lord Phillips, on ownership structure in the profession. I readily recognise that there have been huge changes over the past decade. However, in my experience of the National Health Service, doctors in particular as well as other parts of the profession are able to maintain professional standards within a large organisation. I am not persuaded that it is impossible within new ownership structures for there none the less to be a strong ethos that will be very much underpinned by the principles set out in the 2007 Act, and by the regulatory framework that comes from it.

[Lord Phillips of Sudbury]

Does the noble Lord not have concerns that an organisation that buys lots of law firms is likely to be interested only in what it can screw out of them? That is not consistent with any view of professionalism.

[Lord Hunt of Kings Heath]

Of course, in the development of the kind of organisations to which the noble Lord refers, profit will be a core concern. However, one could look to other sectors where people are involved in seeking profit and point to professionals who practise to the highest quality, usually underpinned by regulatory functions. I do not subscribe to the noble Lord’s view that ownership structure per se will change the professional ethos of people working in the sector. I understand his concerns on the matter, but surely he will recognise that even if you are working in a sector where the objective clearly is profit, it is still perfectly possible to act in a responsible and ethical way. Even before the ownership structure changes, it was my understanding—although I am a novice in these matters—that barristers none the less would seek to earn good income if they could.

[Lord Phillips of Sudbury]

I am most grateful to the noble Lord for seeing that I was hovering. Lawyering is a very particular business. It is not like manufacturing tins of beans. It has all sorts of social and ethical issues at the heart of it. Unless you can allow a lawyer to give full vent to his or her social purpose, the position of the lawyer as the gatekeeper to justice is impeded.

[Lord Hunt of Kings Heath]

Having been a Member of your Lordships’ House for 15 years, I now recognise the special characteristic of lawyers, and I rejoice in it. I have only five minutes left and perhaps I ought to press on.

Clearly it is important to ensure that professional regulation works effectively. It should not be overly bureaucratic and it should uphold the independence and integrity of the profession. We should be very proud of the whole legal services profession in this country, the fact that it is recognised globally and that legal services are a huge export for this country. Clearly we should do nothing that undermines the strength of the legal services industry in that regard.

I supported the passage of the Legal Services Bill in 2007. Although the Legal Services Board has come in for some criticism in your Lordships’ House tonight, we should recognise the progress made by the board under the chairmanship of David Edmonds. We should also recognise that the board will be publishing its inaugural assessment of the effectiveness of each of the approved regulators, including the Solicitors Regulation Authority and the Bar Standards Board. It might have been better if this debate had been timed after we had seen the outcome of these arrangements.

The triennial review to which the noble Lord, Lord Gold, referred has suggested that there is a continuing role for both the Legal Services Board and the Office for Legal Complaints. The next review will take place in 2015. The suggestion by the Bar Council and a number of noble Lords for post-legislative scrutiny, which I would always support as a matter of principle, might be better timed to coincide with the next triennial review around the 2015 mark so the two might run concurrently.

I have noted noble Lords’ concerns, and particularly the Bar Council’s concern and criticism of what they describe as mission creep by the Legal Services Board, citing micromanagement, duplication and overlap of regulatory activities and unnecessary cost. These have to be guarded against. I understand the total cost of the LSB start-up and first three years’ running costs of just under £20 million is not insubstantial, although it is modest compared to many other regulatory bodies. The noble Baroness, Lady Deech, commented on examples of where the LSB is considered to have gone overboard, and mentioned equality and diversity data collection. My understanding is that the LSB—as it saw it—gave best practice advice on how that collection could be done anonymously and made it clear that there should be no compulsion on individuals to take part. The consultation was explicit that the reason for going beyond the blanket survey was so that clients and potential employees could see the diversity make-up of individual firms and chambers. I am not going to argue one way or the other, but it is important that we also hear the viewpoint of the Legal Services Board. We have tended to hear from one side.

[Baroness Deech]

My Lords, perhaps I might explain in response to the noble Lord. There is obviously no objection to collecting diversity data across the entire profession of 15,000; the Bar has done it for a while. It was difficult to collect data from chambers where there were perhaps only 10 people. Even if it is anonymous, identifying someone by ethnicity or sexual orientation would of course be very easy. Because a unit is so small, that encourages people not to participate. I am afraid that our practical arguments in that respect were simply rejected, with the outcome, I believe, that rather fewer data are collected than might have been the case if we had been able to organise it ourselves.

[Lord Hunt of Kings Heath]

My Lords, I am sure that the House is very grateful to the noble Baroness for that explanation. As I said, I do not seek to argue one way or the other. However, I suggest that in any debate on these matters, it is important that the views of both bodies are heard by your Lordships’ House.

[Lord Goldsmith]

My Lords, in those circumstances, I wonder why my noble friend does not agree that when you have the sort of comment that has come from a regulator—from the noble Baroness, Lady Deech—saying there is a problem, he does not now support a review to see whether there is a problem or not.

[Lord Hunt of Kings Heath]

I am most grateful to my noble and learned friend for that remarkably helpful intervention. We have just had the triennial review by the Ministry of Justice. Another one will take place in three years’ time. The Bar Council has put forward the proposal that there should be post-legislative scrutiny, and again, I have no doubt that your Lordships’ House will want to give that every consideration, because most noble Lords strongly support the concept of post-legislative scrutiny. The question is when it would be best done. I suggest that it might be best done in parallel with the 2015 triennial review, which would allow a little more time for both these bodies to see if they can meet together and work out a more constructive relationship. That ought to be the outcome of both tonight’s debate and discussions between the two bodies.

21:12

[Lord Ahmad of Wimbledon]

My Lords, I begin by thanking the noble Baroness, Lady Deech, for securing this debate. The excellence of the UK’s legal profession is well recognised worldwide, and rightly so. The regulatory framework is a key factor in ensuring that these high standards are maintained. I would add—looking towards the noble and learned Lord, Lord Goldsmith—that we meet once again at a late hour. However, the quality rather than the quantity of speakers is an important issue when it comes to the legal profession.

Before addressing many of the interesting points made by the noble Baroness and other noble Lords, I would like to talk briefly about the regulatory framework for lawyers in England and Wales and the reforms introduced in the Legal Services Act 2007. I would simply highlight, as the noble Lord, Lord Hunt, so rightly said, some of the positive elements that we have seen, accepting the challenges that we have faced since the introduction of the Legal Services Act. When we talk about regulation, let me assure you that, as someone who spent 20 years in the City of London and in financial services, the word “regulation” resonates quite loudly in my ears.

The Legal Services Act 2007 had three key aims: a more effective and simplified regulatory framework; a more effective and independent complaints-handling system; and more effective competition within legal services. I turn to the first of those. In January 2010 we saw the new regulatory framework become operational, with the Legal Services Board—which several noble Lords have mentioned this evening—getting up and running. The role of the Legal Services Board is set out in statute. It is an independent body providing—this is the crucial word—oversight regulation of the frontline approved regulators. The approved regulators remain responsible for the day-to-day regulation of their members unless, of course, they are found to be failing in their regulatory duties, in which case the Legal Services Board has a number of powers to intervene to ensure that effective regulation is maintained.

The second key reform is the creation of the Office for Legal Complaints which administers the Legal Ombudsman scheme. Last year it dealt with over 80,000 inquiries, and of those some 7,455, close to 10%, were directly resolved. It acts as the single point of contact for consumers unhappy with the service they have been provided by a lawyer. I would add that there is an informal resolution procedure which sees around 35% of cases handled in this way.

The third and final key reform is the new alternative business structures regime which allows different types of lawyers to work together with other professionals and to accept external investment and ownership. This should allow them to explore new ways of structuring their businesses to be more cost-effective, efficient and innovative. We hope that it will lead to more choice, improved standards and more competitive costs for consumers. While we are happy to see a diverse range of alternative business structures emerging, we are not saying that you need to be an alternative business structure; we are saying that we have given you the flexibility to practise as a sole practitioner, traditional law firm or alternative business structure. So far, over 40 firms have taken the opportunity to become alternative business structures, and it is particularly encouraging to see the diversity of firms involved, ranging from a simple husband and wife partnership to the Co-op.

So much change in such a short space of time means that this has been a steep learning curve for all involved, and this has inevitably led to challenges which several noble Lords have talked about in the debate. Let me address first the issue of proportionate regulation. My noble friends Lord Gold, Lord Faulks and Lord Phillips all alluded to it in their contributions. What is important is that the Legal Services Board and the approved regulators work together constructively to ensure that regulation is proportionate, ensures that consumers receive excellent standards of service, and that the opportunities provided by the Act in terms of competition and innovation are realised. Indeed, the issue of being proportionate to the role of the Legal Services Board was a point well made by the noble Baroness, Lady Deech. The Legal Services Board has been one of the key drivers of the reforms, partly driven by its statutory duties. I appreciate that the pace over the past two years has meant that, as with most new frameworks, there has been a lot of consultation and change, and while the benefits of all of these changes have yet to be realised, we are well on our way to seeing the more competitive and innovative sector that the Legal Services Act first envisaged.

My noble friend Lord Phillips talked about the eight objectives and said that he was not sure whether his contribution was going to be coherent and clear. I can assure my noble friend that he certainly was both coherent and clear. Perhaps I may draw his attention to one of the objectives, which is,

“to promote and maintain adherence to professional principles”,

which are defined in subsection (3)(a) as,

“that authorised persons should act with independence and integrity”.

The complexity of regulation is always an issue, and a key part of the new framework has been the separation of representative and regulatory functions as required by the Act. This led to the introduction of new bodies in addition to the Legal Services Board, the Solicitors Regulation Authority and the Bar Standards Board, which in turn has led to a comment made by several noble Lords that the new framework, rather than simplifying things, has actually added to the complexity. It is vital that consumers have confidence in the legal profession. To that end, regulation of the profession should be effective and not unduly influenced by its representative role. Without that, there is the risk of accusations of lawyers protecting their own. So while we have seen new regulatory arms emerging, that has been an important step in maintaining—that word again—the integrity of the profession. Also, before the new regime was established, a number of different organisations were involved in the regulation of the profession. While I take the point made by the noble Baroness, Lady Deech, about self-regulation, there was still some oversight. My noble friend Lord Phillips of Sudbury also mentioned this point. The Lord Chancellor used to approve rule changes, and in some cases rule changes had to be approved not only by the Lord Chancellor, but by other bodies, leading to the criticism that the length of time taken to process such changes was unduly long.

The new regime streamlines this system by making all rule changes the responsibility of the Legal Services Board. Rule change applications must be dealt with in a timely manner and the Legal Services Board has the power to exempt certain rule changes, fast track rule changes and in more complex changes seek additional views. The latter is not aimed at redoing the work of the approved regulator, but rather at looking at the changes objectively and providing helpful and constructive feedback.

[Baroness Deech]

I appreciate what the Minister says, but he must accept that there is need to investigate this. Rule changes now go through an even more tortuous process than was the case before. If the front-line regulators have responsibility, then their rule changes ought to be accepted without the imposition of ideology and various approaches which are not necessarily seen as the right way forward for a branch of the profession. Examining the way that rule changes are approved or held up is really important and I am not sure we can wait three years for that.

[Lord Ahmad of Wimbledon]

I thank the noble Baroness for her question and I agree with her. It is important that those in the profession contribute to the effectiveness of how these rule changes are implemented. I take on board what she says and I hope that some of the proposals we are putting forward will address the issues. I note the concerns expressed by my noble friend Lord Faulks and the noble Lord, Lord Hunt, about mission creep on the part of the Legal Services Board. As I said at the outset, the important issue is about the terms of reference: what was the Legal Services Board set up to do? Earlier this year, the Ministry of Justice conducted a triennial review of the Legal Services Board and the Office for Legal Complaints. Based on this, let me assure your Lordships that, on the responses received—including those from the approved regulators—the review concluded that, while it is still relatively early to assess the full impact of the Legal Services Board, its functions are still needed and should continue to be delivered in their current form.

This was a view supported by the Bar Standards Board and the Bar Council. We must remember that the Legal Services Board is independent of government and it is not for us to dictate how it operates. Its functions are clearly set out in the 2007 Act. However, it is clear that there has been a real need for an oversight regulator to drive the reforms set out in the Act. In doing so, it has fulfilled the important role that only an oversight regulator could have. Those who responded to the triennial review recognised the value it has brought. Following the feedback we have received, the chairman of the Legal Services Board wrote to the Ministry of Justice confirming that his board is also considering the responses made so far.

I am conscious of time, but turning to specific questions, my noble friend Lord Gold raised the issue of micromanagement and corporate governance. The Legal Services Board recognises that important challenges are emerging from the triennial review and accepts that there are things it needs to address. These will include more detail on its draft business plan for 2013-14, and proposals will include reviewing the approach to requests for changes to regulatory arrangements and designation processing, and refining the approach to research funding. Priorities will be included in the draft business plan. Increased understanding of the cost of regulation, not just the cost of the LSB but the full cost of practitioners, will also be looked at. A further issue was raised regarding the value for money of the Legal Services Board. Since the board became operational, it has recognised the need to keep its costs proportionate, and we have seen its running costs reduced year on year, from just over £5 million in 2009-10 to £4.5 million in 2011-12. The combined running costs of the Legal Services Board and the Office for Legal Complaints were approximately £22 million, somewhat less than the cost of the complaint handling regime that was previously in place.

Various issues and questions have been raised in terms of accountability and the post-legislative review. We are confident that for the here and now, the regulation of legal services is appropriate, but that does not mean it will remain so indefinitely. Given that the new regulatory framework was implemented only in 2010, we still believe that it is in its infancy. The next triennial review is due in 2015 and will provide another opportunity to assess how the regulatory framework is performing and whether the LSB’s functions are still needed in an evolved legal services market.

In conclusion, it is important to remember that the new regulatory regime and governance arrangements are still in their early stages, a point acknowledged by respondents to the triennial review. I assure the noble Baroness, Lady Deech, my noble friend Lord Faulks and other noble Lords that the Government are fully engaged with the legal profession and other interested parties in carrying out that triennial review. During that process, we not only conducted a call for evidence but held round-table events and one-to-one meetings. We will continue to engage openly with interested parties as part of that. I also assure noble Lords, including my noble and learned friend Lord Mackay, the noble and learned Lord, Lord Goldsmith, and my noble friend Lord Faulks, as well as the noble Baroness, that we will carry out post-legislative assessment of the Legal Services Act. That will look at the original aims of the reforms and how far we have come in implementing them, and we will be seeking further stakeholder views. Finally—

[Lord Faulks]

Before the noble Lord concludes his remarks, can he help the House by saying whether one possible outcome of the review will be that the Ministry recommends that the LSB does not have any further function at all?

[Lord Ahmad of Wimbledon]

I thank my noble friend for the question. That is a matter that will come up. As I have already alluded to, this organisation is in its infancy and came about only in 2010. It is right that we look at this again at the time of the review in 2015.

Finally, I also assure my noble and learned friend Lord Mackay, who talked of his Green Papers—and being green in your Lordships’ House, he was my very own personal parliamentary Companion—that I heard what he said about the importance of education and his particular question about universities and the College of Law. I shall certainly refer that to my right honourable friend the Universities Minister.

The reforms enabled by the Legal Services Act have provided a proportionate and effective regulatory regime that remains, currently, fit for purpose. All those with an interest in the legal services market have an interest in ensuring that this continues. I thank the noble Baroness—and indeed all noble Lords—for their contributions this evening, with the assurance that we will continue to look at this particular function and its effective regulation, with all interested parties contributing to future reviews.

House adjourned at 9.27 pm.