House of Commons

Monday 10th December 2012 Commons Chamber

Monday 10 December 2012

The House met at half-past Two o’clock

Prayers

Monday 10th December 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 10th December 2012 Commons Chamber

The Secretary of State was asked—

[Mrs Mary Glindon (North Tyneside) (Lab)]

1. What his plans are for the future of housing benefit for people under 25 years old.

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

8. What his plans are for the future of housing benefit for people under 25 years old.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

In June, the Prime Minister instigated a debate about the merits and risks of taxpayers continuing to meet the £2 billion bill that automatic entitlement to housing benefit for people aged under 25 brings. More work is required, and that discussion and debate is still going on.

[Mrs Glindon]

Last year, 10,000 young people became homeless because, through no fault of their own, they could no longer live with their parents. Will the Secretary of State give the House a categorical assurance that there will be no further plans in this Parliament to take away young people’s housing benefit?

[Mr Duncan Smith]

I repeat what I said in my first answer: there is a discussion and debate. The policy debates are likely to go ahead, but I have no plans as yet to implement any policy—there are further discussions to be had.

[Meg Hillier]

When the Secretary of State is having those further discussions, perhaps he will take account of experience in my constituency, where around a third of residents are under 24. Nationally, an estimated 400,000 households are headed by someone under 25 who claims housing benefit, half of whom have dependent children. When he is having those discussions, will he consider the impact on children of his policy proposal?

[Mr Duncan Smith]

That would go without saying—all impacts on various groups will be taken into consideration. The main point I would make is that, no matter what else, if we were to implement such a policy, we would have to take into consideration categories of people who might find it incredibly difficult, such as those described by the hon. Lady. There would not necessarily be carte blanche—there would be nuances and changes. However, as I have said, discussions are ongoing, and as she can see, no policy exists at the moment.

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

Does my right hon. Friend share my concern that less than 16% of the 204,300 young people under 25 with children who claimed housing benefit are in a couple?

[Mr Duncan Smith]

That is obviously a matter for concern, but also for wider change. We want to ensure that couples stay together, and our plans and changes with universal credit will help with that enormously. It is worth reminding ourselves of the situation left by the previous Government. Labour Members go on about our policy, but in the past decade the housing benefit bill doubled from £11 billion to £21 billion. We are reducing the overall rise, but housing benefit under this Government will still rise by around £2 billion, as opposed to the huge sum the previous Government would have instigated.

[Hywel Williams (Arfon) (PC)]

What would the Secretary of State say to the GISDA organisation in my constituency, which works with homeless and vulnerable people in marginal and rural areas uniquely through the medium of Welsh? It depends on housing benefit to move those young people into housing, employment and training.

[Mr Duncan Smith]

Up until now, many people have been trapped on benefits, as they will continue to be without change. The point has been made in this discussion and debate that many who are not on housing benefit but on low incomes find that they must make difficult decisions on where to live—on whether to stay at home or share. My point is simply that we are looking at how we bring those who fall under the benefit bill into line with others, thus giving them a greater opportunity to take work and profit by doing well from an early age. That is all the debate is about. It should surely be welcomed as a right debate to hold.

[Ian Austin (Dudley North) (Lab)]

It is interesting that, despite the Liberal Democrat campaign, the Secretary of State is not ruling the proposal out. Young people have been coming to London to get on in life since Dick Whittington. What does the Secretary of State say to the youngster who took the advice of his predecessor, Lord Tebbit, and got on his bike, moved to London, worked hard and paid taxes, but was made redundant? Should he lose his home and have to move hundreds of miles to live with his parents, where there might not be any jobs? All hon. Members want housing benefit to come down, but how would that promote aspiration?

[Mr Duncan Smith]

This Government are doing more to help unemployed young people back to work than was ever done by the previous one. I remind him that his Government left us with rising youth unemployment. They took all those who were unemployed for over 10 months and put them on a course. When those who were unemployed came off the course, they went back to zero, and therefore were never registered. We have a better record than they had.

[Stephen Mosley (City of Chester) (Con)]

2. What steps he is taking to prevent fraudulent universal credit claims.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We are investing £400 million in the next four years to reduce fraud and error as part of a joint operation with Her Majesty’s Revenue and Customs and the Cabinet Office. We are already making progress, and universal credit will enable even greater strides to be made. At the autumn statement, the inclusion of universal credit in the baseline—a critical moment—means we now anticipate savings from fraud, error and overpayments to be roughly £2.2 billion per year.

[Stephen Mosley]

I welcome my right hon. Friend’s response. Any money defrauded from the taxpayer is money taken from those who are most in need. Does he agree that universal credit is one way in which the Government are cracking down on those who are abusing the system?

[Mr Duncan Smith]

That is absolutely true. We were left with a series of benefits that too often were riddled with fraud and error. Not all of this is about fraud. Many people are receiving overpayments or underpayments when they should be receiving the correct amount. Too often with tax credits, people are chased at the end of the year, without their realising that they had received the wrong money in the first place. Universal credit will be kinder in the sense that it will be adjusted each month. It will help us save huge sums—some studies state £2.2 billion per year.

[Dame Anne Begg (Aberdeen South) (Lab)]

The Government’s decision to go digital by default—in other words, people will be able to receive universal credit only if they apply online—surely creates a greater chance of fraudulent activity. We all remember what happened with the online form for child tax credits. What guarantees do the Government have that universal credit will not be susceptible to online fraud and that the necessary checks will not take such a long time that they will delay payment? All of a family’s income will come through universal credit.

[Mr Duncan Smith]

We have taken account of that. I have had the opportunity to discuss this with the hon. Lady, and I am sure I will again. The reality is that digital by default does not mean that that is the end of it for people who are not online. On the contrary, we allow for those who are not online. We will help and support them as they make their claim, and it will be taken through the system. They will receive their money on time. For those in doubt, we will make payments anyway. We fully recognise the reality of the need for money and for it be sorted out afterwards—that has been taken into account.

[Paul Uppal (Wolverhampton South West) (Con)]

3. What steps he is taking to increase take-up of workplace pensions.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Automatic enrolment was introduced in October and the number of workers saving into a pension in some of Britain’s largest companies has already increased. In steady state, we expect 6 million to 9 million people to be newly saving, or saving more. To support this, we are running a national communications campaign, including TV adverts targeting those least likely to be saving in a pension.

[Paul Uppal]

It is becoming increasingly apparent that we on the Government Benches are on the side of those who strive and work hard in society. In that vein, how can my constituents in Wolverhampton South West who are saving for the future have access to enrolment to high-quality pension funds?

[Steve Webb]

Through the creation of the National Employment Savings Trust we have ensured that there is a benchmark of low-cost, high-quality pension provision, which is driving down costs across the market. We need to go further and we are looking at whether the role of NEST can be expanded. We are also driving through transparency on charges, so that firms and employees can see what they are paying for and can pay less over time.

[Mr Frank Field (Birkenhead) (Lab)]

Would not one good test of who is on the side of the shirkers or the strivers be a state pension that guaranteed that people were taken off the means test, so it would be safe to save through companies? Will the pensions Minister give us a date for when we will see the White Paper?

[Steve Webb]

The right hon. Gentleman will have heard the Chancellor only last Thursday reaffirm our commitment to state pension reform, and to do exactly that—to ensure that people who work hard and save hard are clear of means testing. The White Paper is at an advanced stage.

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

Will the Minister reassure the House that the Government will not repeat the measures introduced in 1997 by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), which undermined the basis of work-based pensions? Does the Minister understand why the right hon. Gentleman is so often absent, which is doubtless due to his embarrassment about that assault on security?

[Steve Webb]

My hon. Friend is right. That was one of several measures that took money out of final salary pension schemes, which, given they were the highest-quality schemes available, was no way to show commitment to quality pension provision.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

I would have thought that Conservatives had more respect for the office of Prime Minister, Mr Speaker.

Do the Government have plans to make the rising state pension age fairer for those who have worked in manual occupations their whole life and who will tend not to have the same life expectancy? How do the Government plan to make the state pension age fair across all occupations?

[Steve Webb]

I am interested in that point—it is one that the hon. Gentleman’s late right hon. Friend, Malcolm Wicks, used to raise regularly—and we are always interested in looking at ideas on it. Our proposal is that the state pension age would be more automatically linked to the general improvement in longevity that has applied across the social scale. He is right that there remain significant differences, but a rising tide—as it were—is lifting all boats.

[Mr Peter Hain (Neath) (Lab)]

4. What assessment he has made of the effect of changes to housing benefit rules on married disabled people living in specially adapted two-bedroom properties.

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

When developing the social sector size criteria policy, we considered the impacts on disabled people, as set out in our impact assessment. We have added a further £30 million a year to the discretionary housing payments fund from 2013-14 aimed specifically at those in adapted accommodation and foster carers.

[Mr Hain]

Why will the Government not withdraw the housing benefit changes, which are having a devastating impact on disabled people, including my constituents, Mr and Mrs Harris of Seven Sisters, Neath, about whom I have written to the Secretary of State? They live in an adapted property. Mrs Harris cannot sleep at night, Mr Harris is a full-time carer for her and they need two bedrooms, but the draconian and oppressive changes the Government are implementing mean that there is funding for only one bedroom. There is a shortage of one-bedroom properties in Neath and they cannot afford the extra rent. It is time the Government withdrew these policies. Do they not understand that the changes will have a massive impact on the most vulnerable people in our society? The Secretary of State started off with the seemingly sincere motive of tackling poverty, but he has ended up by punitively and callously hitting the most vulnerable.

[Esther McVey]

That is not the case. An impact assessment has been done and £30 million of discretionary funds have been put in place for exactly the people the right hon. Gentleman is talking about. We have to do this in the round. There are a million spare rooms in the country and millions of people on waiting lists and in overcrowded homes, and we have to find properties for them, too. The case that he mentions, however, is precisely the sort the discretionary fund will be for.

[Sir Tony Baldry (Banbury) (Con)]

As co-chair of the all-party group on carers, my understanding is that, where a person requires a full-time carer, local authorities may provide housing benefit for them to have a two-bedroom property. Have I misunderstood the situation, or have I understood it correctly?

[Esther McVey]

My hon. Friend has understood correctly and explained it perfectly.

[Natascha Engel (North East Derbyshire) (Lab)]

What will be the total estimated cost of moving people into smaller homes as a result of the bedroom tax, and how does that compare with the total estimated saving to be made?

[Esther McVey]

There are major savings to be made and continual assessments will be done, but, as I said, in the round we have to find accommodation for other people and people have to understand the cost of the accommodation that fits their need.

[Sir Nick Harvey (North Devon) (LD)]

Is my hon. Friend aware of the anxiety felt by those who have received notification that they might be affected by these changes? Will she guarantee help not only for those we have heard about, whose homes have been adapted, but for those with noisy respiratory equipment, for example, with whom it would be unreasonable to expect others to share a bedroom at night? How long will this fund last, and is she confident it will cover all those cases?

[Esther McVey]

Yes, I am confident it will. Guidance will go to local authorities on how to use the discretionary housing payments and all factors will be taken into account, including those concerning my hon. Friend’s constituents.

[Mrs Anne McGuire (Stirling) (Lab)]

Disabled people across the country currently have to cope with a torrent of piecemeal welfare reform changes that will impact on their lives. Disability Rights UK, the Joint Committee on Human Rights, the Equality and Human Rights Commission, the Royal National Institute of Blind People, Mind, Scope, Leonard Cheshire Disability and Carers UK, among others, including tens of thousand of people who have signed Pat’s petition, have asked the Minister to conduct a cumulative impact assessment. If she is confident she is doing the best for disabled people, why does she not listen to them and conduct a cumulative impact assessment? Why does she stubbornly refuse to do one?

[Esther McVey]

I am afraid that the right hon. Lady never did one when Labour was in government. Disabled people remain my top priority. Let me reiterate to the House that the disability living allowance, carer’s allowance and the support group of the employment and support allowance will all increase with CPI. We have protected the disability support programme in its entirety, and an extra £15 million is going into Access to Work.

[Julian Smith (Skipton and Ripon) (Con)]

5. What plans he has to increase access to the new enterprise allowance.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

We have recently taken steps to increase access to the new enterprise allowance by extending eligibility to day one of an individual’s jobseeker’s allowance claim and increasing the number of mentoring places available by 30,000.

[Julian Smith]

Take-up of the scheme in Yorkshire has been excellent, but how do we ensure that those considering taking it up are given the best possible advice on developing their nascent business ideas?

[Mr Hoban]

My hon. Friend is right to highlight take-up in Yorkshire. In his constituency, 40 claimants have started with a mentor, and so far 30 have started training. That is a good result—better than the national average—so clearly people in his constituency are getting good advice. We need to ensure that the quality of advice increases. We want more people to see self-employment as a way into the work force.

[Bill Esterson (Sefton Central) (Lab)]

The Minister is right that more people should go self-employed; the problem with the way the system has been set up is that it assumes people earn the minimum wage for every hour worked, when that is far from the truth, as he will know. Will he assure me that he will make changes where they are needed to ensure that self-employed people can take advantage of the scheme and not be disadvantaged, which is a potential problem at the moment?

[Mr Hoban]

The new enterprise allowance is there to help people to make the transition from unemployment into self-employment. It is absolutely right to give them the support they need not just to earn the minimum wage but to go beyond that. We have seen some good examples of people taking up the new enterprise allowance who have started their own businesses and are now employing others.

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

I join my hon. Friend the Member for Skipton and Ripon (Julian Smith) in saying that take-up in Yorkshire has been excellent. Indeed, in my constituency there has been demand to access the scheme earlier, but one issue needs to be addressed. In many areas there is a lot of other potential support for businesses, but jobcentre staff are not necessarily aware of it. Can we ensure that the advice given is as tailored as possible, taking into account the various funding streams available locally?

[Mr Hoban]

My hon. Friend is absolutely right. The advice given is not given by Jobcentre Plus staff: we get private and public sector contractors in to give that support. We need to ensure that people setting up their businesses are signposted to other sources of advice and funding to give them the best possible start in getting their businesses off the ground.

[Jonathan Ashworth (Leicester South) (Lab)]

6. What assessment he has made of the effectiveness of the Work programme in reducing long-term youth unemployment in (a) Leicester and (b) the UK.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Nationally, more than 57,000 young people on the Work programme have found work and just under 10,000 have been in work for six months. Of those, about 80 are in Leicester.

[Jonathan Ashworth]

Unemployment and youth unemployment are higher in Leicester South than they were at the general election. The latest statistics show that about 3% of people have found work as a result of the Work programme. Many employers who took advantage of the future jobs fund tell me that they are shunning the Youth Contract or that they are sceptical about the Work programme. Given that the Minister’s own Department has said that the future jobs fund was of benefit to society, employers and those on it, does he now regret abolishing it?

[Mr Hoban]

The evidence from the future jobs fund demonstrated that the taxpayer was never going to recover the money that was spent on it and that it was 20 times more expensive than the work experience scheme, which is similar to it and from which we are getting good outcomes. Taking into account Labour’s fiddled figures, youth unemployment is lower today than it was in May 2010.

[Stephen Timms (East Ham) (Lab)]

In the invitation to tender for the Work programme, the Minister’s Department said that if there was no programme at all 5% of people would secure job outcomes within 12 months. We now know that, under the programme, the figure was 2%. For people on employment and support allowance, it was 1%. Of the 9,500 people on employment and support allowance who used to be on incapacity benefit and who were referred to the Work programme in its first 14 months, only 30 secured job outcomes. The Minister told The Daily Telegraph that Work programme providers needed to “get their act together”. Why does he think that they are to blame?

[Mr Hoban]

The Work programme providers are responsible, and they are paid to get people into work. This is a much better value programme than its predecessors, but we need to get providers to raise their game. The figures released at the end of last month showed that job outcomes were rising and that the longer the programme had been functioning, the more people were getting into work. This is a good start, and it is a much more effective programme than the schemes introduced by the previous Labour Government.

[Mr Philip Hollobone (Kettering) (Con)]

7. How many people have come off benefits after joining the Work programme in (a) Kettering constituency, (b) Northamptonshire and (c) England to date.

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

15. How many people have come off benefits after joining the Work programme to date.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Last month, we published data showing that 57% of claimants who joined the Work programme in June 2011 had spent some time off benefits. The figures showed that the programme was moving people off benefits and that, as claimants spent longer on the programme, more of them came off benefits.

[Mr Hollobone]

I recently visited A4e, which is helping to provide the Work programme in Kettering, and I was impressed by its commitment to getting unemployed people back into work. Is the Minister aware, however, that the two biggest barriers to finding permanent employment in my constituency are travel costs and child care difficulties? What can Her Majesty’s Government do to solve those two problems?

[Mr Hoban]

There is a range of ways of helping people with their travel costs in order to get them back into work. Jobcentre Plus can provide money through the flexible support funds, and Work programme providers can provide support to help people to reduce the cost of their travel. There is also funding available to help people who want to work to get free child care.

[Mr Amess]

Will my hon. Friend confirm that figures just released by the Employment Related Services Association show that the Work programme has been even more successful in taking people off benefits than the figures released by his own Department suggest?

[Mr Hoban]

My hon. Friend is absolutely right. The figures produced by the ERSA last month show that more than 200,000 people have found work through the Work programme. They also show that the programme is effective at moving people into work and that job entries are rising from month to month. They clearly show improvements in performance as the programme matures.

[Kate Green (Stretford and Urmston) (Lab)]

The DWP’s own evaluation has shown that the Work programme is proving less successful at getting women than men into work, that it is particularly poor at getting lone parents into work, and that the black box approach is failing to deliver substantive personalised support. What is the Minister going to do to ensure that the Work programme genuinely meets the needs of those furthest from the labour market?

[Mr Hoban]

The Work programme has been designed to allow providers to use a range of ways to help people back into work. We give them that flexibility. In return, they are paid only when they are successful. That contrasts with the schemes introduced by the previous Government, in which most of the money went in up front and providers were not paid by results. I am sure that the hon. Lady will welcome the fact that, under this Government, there are more women in work than ever before.

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

16. I listened carefully to the Minister’s response a moment ago about the success of the Work programme. Does he acknowledge, however, that of the almost 9,500 people who were in receipt of employment and support allowance who used to receive incapacity benefit and who were referred to the Work programme in its first 14 months, only 30 received job outcomes? What are the Minister’s plans for making the Work programme work?

[Mr Hoban]

As I have already made clear in answer to a similar question, the Work programme is improving its performance, and the longer the scheme is in operation the more people are getting into work. That will lead to more job outcome payments in future. We are in the early stages of the scheme, but there is solid evidence to demonstrate that it is getting people off benefits and into work.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

21. What steps has the Minister taken to improve the performance of Work programme providers?

[Mr Hoban]

We have taken a range of actions to improve the performance of Work programme providers. We are working with them to establish best practice, particularly in areas such as helping people on employment and support allowance into work. The Department has also written to a number of providers advising them that we want to see a step change in their performance and asking them to produce performance improvement plans, which we will monitor carefully. Programme providers know that they could lose their contract if their performance does not improve.

[Sheila Gilmore (Edinburgh East) (Lab)]

For the last year, the Secretary of State and all his Ministers have said they could not give us any information about what was happening with the Work programme because the data was unverified. Now we are getting a stream of unverified data, but does that mean we can now see inside the black box? May we have clear information about what services are given to people when they are referred?

[Mr Hoban]

The hon. Lady will be aware that the minimum service standards for each provider are published. Last month, we saw data produced on off-benefit flows and on the number of people getting six months’ work. The trade association ERSA—Employment Related Services Association—produced details on the number of job starts. I think that a huge amount of data has been published, and I am surprised that the hon. Lady is complaining about it.

[Mr David Hanson (Delyn) (Lab)]

9. What discussions he has had with the Welsh Government on the implications of his proposed changes to housing benefit.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

My noble Friend the Minister for Welfare Reform has met Welsh Ministers on several occasions to discuss welfare reform, including changes to housing benefit, and he maintains regular correspondence with them. In addition, officials from the Welsh Government are represented on a number of working groups relating to welfare reform.

[Mr Hanson]

Does the Minister accept that the 40,000 people in Wales who will be hit by the bedroom tax changes to housing benefit are either unemployed and long-term unemployed or, very often, are in work on low incomes? What advice would he as a Liberal Democrat offer? Would he encourage them to seek higher-paid jobs, to give up their homes or to take a massive cut in their income?

[Steve Webb]

The impact of the social housing under-occupation measure is lower in Wales on average than it is in the rest of the United Kingdom. A range of options is open to those who face a shortfall. As the Minister with responsibility for disabilities, my hon. Friend the Member for Wirral West (Esther McVey) said, one of them arises when a set of people living in over-occupied accommodation need to move somewhere larger. Many social landlords are getting to know their tenants and their pattern of need, better juggling the housing stock, which is vital and to the benefit of all our constituents.

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

10. Whether it is his policy that people with cystic fibrosis should be eligible for disability living allowance.

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

Disability living allowance is available to any severely disabled person, including those with cystic fibrosis, who meets the eligibility conditions.

[Mrs Hodgson]

I was recently contacted by my constituent, Peter Chisholm, whose 18-year-old daughter Kate suffers from severe cystic fibrosis. Such is the severity of her condition that she is currently in hospital receiving physiotherapy and taking 50 tablets a day. Kate has been refused DLA and her appeal has been turned down. Does the Minister think that that is right, and if not will she ensure that Kate gets the support she so badly needs?

[Esther McVey]

I know that this issue is of great interest to the hon. Lady, sitting as she does on the Children, Schools and Families Select Committee, so I listened with great interest—[Interruption.] Apologies, but I am correct in saying that you have a great interest in this subject. I do not know the specific issues relating to the case that you mention. We will obviously look into it, but I have to say that this constituent of yours would have been assessed under the DLA arrangements—it is for that very reason that we are bringing in the new personal independence payment assessment and criteria.

[Mr Speaker]

Let me remind the Minister that her answers should be addressed through the Chair. She has just referred to my constituent. I would have been delighted to have had my constituent addressed, but it would not have been appropriate here and now. We will move on.

[Nick de Bois (Enfield North) (Con)]

11. What evaluation of the implementation of universal credit he plans to undertake.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Today we are publishing a high-level framework for evaluating universal credit. A full programme of evaluation is being developed. This will include studies of implementation, covering themes such as claimant, staff and stakeholder experience. This, along with other analysis, will form part of a continuous programme of evaluation on the roll-out of universal credit.

[Nick de Bois]

Will my right hon. Friend reassure me that he will resist the last Government’s temptation always to launch things with a big-bang announcement, often followed by failure? In this case, will he carefully learn the lessons of the pilots he is launching in April?

[Mr Duncan Smith]

The process we are engaged in—by the way, I have fully briefed the Opposition Front-Bench team, so there are no secrets here—involves a pathfinder starting in April, and by the beginning of October we will start the national roll-out. The whole idea is to roll it out progressively throughout the UK, making sure that we learn the lessons as we roll it out. Whatever changes need to be made can be made at that point. It seems to me that that is the reasonable and right way to do these things, but I remind my hon. Friend that we are not only below budget, but on time—and it will be completed on time.

[Mr Clive Betts (Sheffield South East) (Lab)]

No doubt the Secretary of State will confirm that, following the introduction of universal credit, when people’s incomes change they will have to go to the local council to sort out their council tax benefit changes, and to the DWP to sort out their housing benefit changes. Two visits, or two contacts, will be required as a result of one change of income. What progress is the Department making in discussing with councils the need to provide a joined-up service so that, in future, people will need make only one contact when their incomes change?

[Mr Duncan Smith]

The hon. Gentleman is right to raise that issue. We are currently engaging in discussions with local authorities with the aim of ensuring that people receive a proper and comprehensive service, and I assure the hon. Gentleman that that is exactly what they will receive as and when the time comes to roll out universal credit. The point of universal credit is that all the other benefits, including housing benefit, will be combined in a single payment, which will simplify matters enormously for claimants and recipients; and councils will, through council tax benefit, have the opportunity to provide the best possible service for their tenants.

[Sarah Newton (Truro and Falmouth) (Con)]

12. What assessment he has made of Professor Harrington's third review of the work capability assessment.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

We welcome Professor Harrington’s invaluable contribution to our efforts continually to improve the fairness and effectiveness of the work capability assessment. We published our response on the day of the publication of his third review. We accepted five recommendations outright, and the sixth in principle.

[Sarah Newton]

I greatly appreciate the Government’s continuous efforts to get this process right—it is a very difficult process to get right—and it is great news that all Professor Harrington’s recommendations have been adopted. May I ask the Minister to join me in urging Opposition Members to stop scaremongering and frightening disabled people in my constituency who are being deterred from coming forward to claim the benefits to which they are entitled?

[Mr Hoban]

My hon. Friend has made an important point. There has been a great deal of scaremongering about the work capability assessment, and a great deal of criticism, most of it unfounded. Let me inform the House of two facts. First, decisions about eligibility are made not by Atos but by the Department’s decision makers, and, secondly, we have established that in only 0.4% of cases in which tribunals have overturned DWP decisions has Atos been the cause.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I am not sure whether some of those last remarks were aimed at me, but may I ask whether the Minister agrees with Professor Harrington’s comment:

“The appeals process remains an area of considerable concern”?

As a number of charities have pointed out, many people who were given zero points in the initial assessment discovered, following appeals, that they had at least 15. How many people have found themselves in that position in the last year?

[Mr Hoban]

If the hon. Gentleman feels guilty, perhaps he ought to examine his conscience in relation to remarks that he himself has made.

In his report, Professor Harrington said:

“All they call for is a scrapping of the WCA but with no suggestion of what might replace it.”

He added that to

“recognise that things are beginning to change positively in the best interests of the individual… would be helpful.”

This process is an important part of the way in which we help people to get back into work, but the scaremongering that we hear undermines people’s confidence in it, to the detriment of those who are trying to claim employment support allowance.

[Greg Mulholland (Leeds North West) (LD)]

When the last Government placed the contracts with Atos, they omitted to ensure that work assessment centres were fully accessible. In 31 of them there is no ground-floor access for wheelchairs, which is clearly absurd. What is the Department doing to deal with that?

[Mr Hoban]

My hon. Friend has made an important point. We are working with Atos to ensure that as many centres as possible have ground-floor, accessible medical examination rooms, but when they are not accessible, we will try to make arrangements with claimants to ensure that they have access to suitable locations for their assessments.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

13. What plans he has to improve the Access to Work scheme for disabled people.

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

We are undertaking a radical review of Access to Work so that it can help more disabled people into mainstream employment. We are implementing several improvements, including a fast-track assessment process and the removal of cost-sharing for small employers, as well as working with an expert panel to consider how the scheme can be further personalised and made to work more effectively for disabled people and their employers.

[Paul Maynard]

I welcome the Government’s continued commitment to the Access to Work scheme. May I draw the Minister’s attention to the report of the all-party parliamentary group for young disabled people, which I chair? One of its recommendations was that the scheme should be extended to both internships and long-term voluntary work placements. Will the Minister undertake to consider that recommendation?

[Esther McVey]

The policy intent of Access to Work is to support disabled people into paid sustainable work, and as such it is not offered for unpaid internships or voluntary work. However, from 1 October this year Access to Work has been available to young disabled people undertaking work experience under the Youth Contract. I would like to meet my hon. Friend to talk further about this matter.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The Remploy factory in Wishaw was forced to close in the summer, and despite Government promises made from the Dispatch Box, not one single worker—not one—from Remploy in Wishaw has now got a job. Why?

[Esther McVey]

We are working hard to get everybody from all the Remploy factories into work. When I last talked about this matter in the House, only 35 of those people across the country had got into work, but I am pleased to say that we have now more than quadrupled that number, to 148. We have looked into the personalised support, and we are adapting it every day. We are working on it, and we will make it better.

[Andrew Gwynne (Denton and Reddish) (Lab)]

14. For what reason people who receive carer’s allowance are not exempt from the benefits cap.

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

Although there is no specific exemption from the cap for carers, in practice most carers will be exempt because their partner or child is in receipt of disability living allowance. In addition, there are exemptions for people in work that can also apply to carers. Under universal credit, carers need only work the equivalent of 16 hours a week at the national minimum wage to be exempt.

[Andrew Gwynne]

I am grateful to the Minister for that response, but it is not quite correct. Close reading of the regulations indicates that a household comprising parents and a disabled adult dependant receiving disability living allowance will not be exempt from the cap, despite the Minister’s promises that they would be. I am sure the Minister appreciates that this is causing great anxiety to those potentially affected. Will she undertake to fix this problem?

[Esther McVey]

Should there be another adult in the house, that is then a separate household, so both have to be assessed separately. However, I reiterate the fact that those who are exempt from the cap include those on working tax credit, all households with someone who is in receipt of a disability-related benefit, war widows and widowers, and those in receipt of war disablement pensions. A lot of people are therefore exempt.

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

Ministers have repeatedly stressed that a household containing anyone in receipt of disability living allowance will not be affected by the benefit cap, but constituents of mine who have an adult disabled child are now being told they will be affected by the cap because the regulations appear to state that if a family has an adult severely disabled person living in the household, that person is not a member of the household. Please will the Minister clarify whether the benefit cap will apply to someone who is looking after a severely disabled adult child?

[Esther McVey]

I will reiterate what a household is: a household is a basic family unit, and for the purposes of paying out-of-work benefits that will be a single adult or a couple and children, so once another adult is in the house, that is a separate household. [Interruption.] That has been the definition for a very long time. However, in the instances the hon. Lady mentions, discretionary payments are available and will come to fruition. [Interruption.] There is no point in Opposition Members huffing and puffing. That is the situation, and an extra £30 million has been put in place for this. [Interruption.]

[Mr Speaker]

Order. I have no idea what the hon. Member for Glasgow North West (John Robertson) had for breakfast this morning. All I can say is that he is a bear growling exceptionally, and some would say excessively, loudly this afternoon.

[Damian Hinds (East Hampshire) (Con)]

17. What assessment he has made of the potential utility of jamjar budgeting accounts in (a) smoothing the transition to universal credit and (b) increasing financial inclusion.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Budgeting accounts will be a useful help for some claimants both in supporting transition to universal credit and in terms of broader financial inclusion, in particular for those claimants who have not managed their money monthly before—that is an important category—or who have not been responsible for their own housing costs.

[Damian Hinds]

I am grateful for that answer. The demonstration projects have shown the value of jamjar accounts, and commercially they could have much wider application. In the tendering process, will my right hon. Friend pay particular attention to the unique possibilities of credit unions, given their local base and links with housing associations?

[Mr Duncan Smith]

I will indeed. We are doing our level best; we are giving credit unions extra money and backing them enormously to get going. I think that they will develop hugely, and I hope that they will eventually replace the payday lenders—it is really important that we all agree about that. On the jamjar accounts and the way we are making these payments, everyone warned us that there would be problems if we paid housing benefit direct. We have trialled that in one of the demonstration projects and, importantly, only 3% of those who receive their housing benefit payments direct are having to revert to indirect payments because they have been unable to cope. That is a major advance from the existing local housing allowance.

[Mr Clive Betts (Sheffield South East) (Lab)]

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

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I welcome the announcement made in the autumn statement last week that housing support for those living in supported exempt accommodation will be disregarded from the benefit cap. We have listened to the concerns of organisations including Refuge, Women’s Aid, the National Housing Federation and others. That announcement addresses their concerns, meaning that individuals in very vulnerable circumstances, including those fleeing domestic violence, will be protected.

[Mr Betts]

The Secretary of State will be aware of the direct payments pilot schemes, which are taking place before universal credit, before the bedroom tax and before the changes to council tax benefit. Is he aware that the pilots are showing an increase in rent arrears due to an increase in partial payments? If that remains the case at the end of the pilots, is he prepared to change policy to make it easier for rent payments to be made direct to the landlord?

[Mr Duncan Smith]

I disagree with the hon. Gentleman. The figure I gave in my response to the last of the questions showed that, in actual fact, the pilots are beginning to show categorically that if there is proper management by local authorities, the number of people defaulting is very low. That we can deal with. [Interruption.] Instead of playing games, paying this direct and treating housing benefit tenants as children, does he not think that part of the reason why they crash out of work early is that they cannot cope with the extra responsibility? By getting them ready for that responsibility before they go to work we are doing them a favour, and that figure shows we are supporting them.

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

T2. Later this week, my constituent Danny Shingles will go into hospital to have a debilitating polycystic kidney removed. I am sure that the Secretary of State is aware that cysts on kidneys burst, poisoning the body and creating great discomfort. While preparing for his operation Mr Shingles is also having to appeal a decision to stop his disability living allowance and employment and support allowance, despite the fact that after his operation he will be entitled to have them again. This is causing my constituent much unnecessary stress, so will the Secretary of State review the guidance given to assessors to ensure that all factors, including the scheduling of operations, are taken into account when making decisions about whether someone is entitled to benefits?

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

I would like to meet my hon. Friend to discuss this case, as I do not know the full facts.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Will the Secretary of State set out for the House the projected rise in the dole bill as a result of the Budget?

[Mr Duncan Smith]

I do not believe that there will be a dole rise. The reality is that, under this Government, in the last year we have seen more people back into work; more private sector jobs than were ever created by the previous Government; and more women in work. Unemployment levels have fallen and youth unemployment levels have fallen. Perhaps the right hon. Gentleman would like to apologise for the total mess his Government left us.

[Mr Byrne]

The Secretary of State clearly does not know, so let me help him. The Office for Budget Responsibility says that the dole bill will rise by £6 billion as a result of his failure to get Britain back to work. To pay that price, he is proposing an uprating Bill which, I am afraid to say, sounds all wrong to me. It is wrong to take £4 billion from tax credits, it is wrong to take £300 million from maternity pay, and it is wrong that this strivers tax is going to hit 4,500 working families in his constituency. He should be fixing welfare reform, not flogging working families. Perhaps he would like to tell the House this afternoon just what share of the savings from this uprating Bill is going to come from working families.

[Mr Duncan Smith]

I must tell the right hon. Gentleman that our unemployment figures are better than those originally forecast by the OBR. I remind him—as if he needed reminding—that he left this Government with a 6% fall in GDP, an economy that was on the rack, and debt that was higher than that of any other country in northern Europe and rising every year, with £120 million a day being spent on the interest. Let me remind him of one other thing: he has voted against every single change and every cut we have made to deal with that debt. The Opposition are irresponsible and not fit for government.

[Richard Graham (Gloucester) (Con)]

T3. I welcome the introduction of universal credit next year. However, will the Secretary of State outline how my constituents without bank accounts will in practice be able to access universal credit? Does he agree with the suggestion made by Westgate ward Councillor Paul Toleman that Post Office accounts could be a useful alternative mechanism?

[Mr Duncan Smith]

It is correct that Post Office accounts would be a useful measure in ensuring that we can give people the right kind of choice and the right kind of places for their accounts. Under universal credit, people will be given an opportunity to begin to live their lives in the same way as they would live them if they were back in work. That is a critical and huge change that will allow them to get back into work rather than not have to make the changes that could change their whole outlook.

[Jonathan Ashworth (Leicester South) (Lab)]

T5. The Secretary of State failed to answer the substance of the question put to him by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) a few moments ago. Of those affected by the 1% uprating, 81% are women and 60% are in work. Is not the reality that this Government are clobbering the strivers?

[Mr Duncan Smith]

I remind the hon. Gentleman that in the autumn statement we yet again raised the threshold, which allow an extra £5 a week for families. Families on low incomes are better off and the average family is £125 better off as a result of the autumn statement.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T4. Further to earlier questions on this matter, PATCH—Pembrokeshire Action to Combat Hardship—a charity that deals with poverty issues in west Wales, is concerned about the housing component of universal credit. Will the Secretary of State confirm how he intends to define “vulnerable tenants”?

[Mr Duncan Smith]

Vulnerable tenants will be defined as they always have been, as people who for various specific reasons are unable to cope. All those people will be considered carefully and all the mechanisms that we are putting in place—this is the point that makes universal credit different—mean that by ensuring that we identify those who have difficulties, we can get to them and sort out their problems rather than just dealing with the symptoms, such as their being unable to make their payments. We need to deal with why they are in debt, what is happening to their families and whether, say, the family is drug addicted and start to put those problems right before they crash out of work later on.

[Dan Jarvis (Barnsley Central) (Lab)]

T7. The DWP recently published an evaluation that confirmed a net benefit of £7,750 per participant from the future jobs fund, a scheme that originated in my constituency. That can be set alongside Barnsley college’s successful sector-based work academy, which is already demonstrating its effectiveness in getting long-term unemployed adults into work. Does the Minister understand why, when it comes to reducing long-term unemployment, my constituents have more faith in those schemes, which originated in Barnsley, than they do in the Work programme, which came from his Department?

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

The hon. Gentleman should reflect on the fact that the sector-based work academy is part of the Youth Contract. It is effective and is an idea put forward by this Government. I am pleased that it is working well in Barnsley. The other thing in the Youth Contract that is working well is work experience, which is as effective as the future jobs fund but 20 times cheaper. The Government can demonstrate that we are giving help to get people into work, and are giving much better value to the taxpayer.

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

T8. What further measures is the Department taking to ensure that the benefits assessment process takes into account applicants with invisible disabilities, such as autism, that are often accompanied by speech, language and communication problems?

[Mr Hoban]

My hon. Friend makes an important point. That is why, for example, we encourage people who feel that they cannot communicate at an assessment to take a friend or a carer with them to help in that process, and we gave support to people to help them to complete the ESA50. We want to make the process of assessment as easy and as straightforward as possible by giving vulnerable claimants the help that they need.

[Huw Irranca-Davies (Ogmore) (Lab)]

In my constituency, organisations such as Yellow provide accommodation solutions for young people under 25 so that they can get into work. In his deliberations on the future of housing benefit for the under-25s, how will the Secretary of State identify those youngsters who have suffered traumatic family break-ups, dysfunctional families, and sexual and physical abuse and separate them from the others? It is a genuine practical question.

[Mr Duncan Smith]

I can assure the hon. Gentleman that we would make every effort to ensure that those most vulnerable people would not necessarily be included in a change like this. As I said earlier, this is not a policy at the moment; it is a consultation, and we are happy to listen to anybody about the groups they think ought not to be included in such a policy. I have an open door in that regard, and he is more than welcome to come and see me.

[Andrea Leadsom (South Northamptonshire) (Con)]

T9. Does my right hon. Friend agree that the best outcomes for children are where at least one parent is working? Does he also agree that all Government measures should try to support the best outcomes for children and families?

[Mr Duncan Smith]

I do agree with my hon. Friend. Universal credit should help that enormously through its disregard process, which I call the work allowance. The allowance of a couple with a child will be more than £6,000 when they go back into work; under the present system it is only £520, and under the Work programme it is a little more. The difference is enormous and will provide a real boost and a real income to families and support them at home.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

The Secretary of State will be aware of the ever-increasing number of workplace pensions that are wound up in mergers and takeovers, as happened at Whitbread where former employees have lost their pensions. Will he review the legislation in order properly to protect people’s pensions on mergers and takeovers?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We are obviously concerned when anybody does not get the pension they were expecting. The regulator has powers where corporate restructuring has been designed to avoid pension liabilities. If the hon. Gentleman gives me more details of the case, I will be happy to look into it.

[Mike Freer (Finchley and Golders Green) (Con)]

T10. People with HIV report poor levels of understanding of their condition by Atos assessors. This may be because the guidance is outdated and lacks information on living with HIV. Will Ministers be monitoring the guidance issued on such conditions?

[Mr Hoban]

My hon. Friend makes an important point. One of Professor Harrington’s recommendations was that the medical directors of charities review the guidance and some of the bases of assessment for conditions. I can assure him that the guidance for HIV/ AIDS is being reviewed by the medical director of the Terrence Higgins Trust.

[Nic Dakin (Scunthorpe) (Lab)]

The hon. Member for North Devon (Sir Nick Harvey) was right to draw attention to the rising tide of real concern and anxiety among those threatened by the bedroom tax. How many households will be directly affected by the bedroom tax?

[Steve Webb]

We published a full impact assessment as part of the Welfare Reform Act 2012, which deals with this and also breaks it down on a regional level, so the figures are already available to the House.

[Mark Pawsey (Rugby) (Con)]

Getting to a job interview can sometimes be a challenge for people looking for work, so many jobseekers will be pleased to hear about a new scheme launched today called Bus for Jobs, which provides free travel, initially during January, for those seeking work. In my constituency that will be Stagecoach Midlands. Does the Minister agree that the scheme is an innovative approach by the Government to help people to find work?

[Mr Hoban]

My hon. Friend is absolutely right. This is important. As we heard earlier, for some people the cost of travel is a barrier to employment, and I am delighted that the major bus companies have worked together to provide free travel in January. That is on top of the additional support that Jobcentre Plus and Work programme providers offer to ensure that we get as many people as possible into work.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Yesterday on the Directgov website, DWP job ID 438253 advertised for female presenters for Loaded TV working at home on internet babe chat. The advert has now been removed from the website, but does the Secretary of State think that DWP should be accepting and promoting jobs for internet babe chat? What does it say about this Government’s values on work?

[Mr Duncan Smith]

I remind the hon. Lady that it was this Government who changed the rules: under her Government, it would have been wholly acceptable, I suspect. The new system is in its national pathfinder and will, I hope, be rolled out before Christmas. We already have checks in place: more than 6,000 jobs, 60 attempted employer accounts and 27 bogus employers have been blocked so far, and we act swiftly if complaints are raised. I remind her that, on average, more than 5 million daily job searchers are working on this system. It will be a massive improvement and will benefit jobseekers, so the hon. Lady should not carp about the odd difficulty that arises. We get rid of the bogus jobs.

[Stephen Lloyd (Eastbourne) (LD)]

I congratulate the Government on extending Access to Work to disabled people on work experience and on removing the need for small companies who employ fewer than 49 people to pay for Access to Work. Will the Minister look seriously at extending Access to Work to disabled people on the Work programme because of the additional cost of their disabilities?

[Mr Hoban]

My hon. Friend has a great track record of championing the rights of people with disabilities. I will look carefully at the proposals he has made and work with the Minister responsible for disabled people to get the best possible outcome for people with disabilities. It is important to help them get into work.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to have to move on, but demand, as usual, exceeds supply.

Same-sex Marriage in Churches

Monday 10th December 2012 Commons Chamber

15:29

[Mr Edward Leigh (Gainsborough) (Con)]

(Urgent Question): To ask the Minister for Women and Equalities if she will make a statement on same-sex marriage in churches.

[The Minister for Women and Equalities (Maria Miller)]

Following the Government’s consultation, which looked at how to allow same-sex couples to marry, we will put to the House tomorrow our plans on how we intend to legislate. Our position remains that we firmly support marriage. It is one of the most important institutions we have in our country. The Government should not stop people getting married unless there are very good reasons for doing so, and I do not believe that being gay is one of them.

In respecting the rights of gay couples to have access to civil marriage, we also fully respect the rights of religious institutions when they state that they do not wish to carry out same-sex marriages. Freedom of religious belief is as important as equality. The views that people of faith hold should not be marginalised and should be fully respected. I would never introduce a Bill that encroaches on religious freedom or that could force religious organisations or religious ministers to conduct same-sex marriages.

The case law of the European Court of Human Rights and the rights as set out in the European convention on human rights put protection of religious belief in that matter beyond doubt. The Government’s legal position confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that that is the case here.

There are long-standing plans to make a statement to the House, which will now be done tomorrow. It will set out the Government’s response to the consultation and outline our plans on how to take forward equal civil marriage, in line with our decision to legislate before the end of this Parliament. I believe that it will be vital to continue to work with religious organisations to ensure that effective safeguards are in place.

[Mr Leigh]

Whatever one’s views on this issue, it is clearly highly controversial and legally complex. There has just been the biggest consultation ever, with four times the number of sponsors than any previous consultation. If the Government are going to announce a change of policy, surely they should come to this House of Commons first. May I ask the Minister why the Prime Minister announced on television over the weekend that, contrary to what was in the consultation, he now wants to legislate for same-sex marriage in churches? The consultation specifically excluded same-sex marriage in churches; it was about civil marriage. Now that the Government have done a U-turn on the matter, will there be a brand-new consultation? Does the Minister accept that this change of policy greatly increases the chance of human rights litigation to force churches to have same-sex marriages against their will and that we should have a consultation on that? The state has no right to redefine people’s marriages.

[Maria Miller]

I thank my hon. Friend for giving me the chance to talk about this today. I share the House’s disappointment that we are discussing this issue in response to an urgent question, given that I am planning to set it out tomorrow. Equally, though, I am pleased to have the opportunity to make sure that my hon. Friend is very clear about the situation. The Prime Minister did not announce anything new this weekend; he simply restated the Government’s position and, in particular, expressed a personal view regarding the possible role for churches in future—a view that he first expressed in July. However, my hon. Friend is absolutely right to say that this is an important matter that should be discussed first here in the House, and that is why we have brought forward our statement to tomorrow.

Let me respond to a couple of other points that my hon. Friend raised. We have not changed our support for equal civil marriage; the consultation that we have just gone through is about how to put equal civil marriage in place. There may well be policy implications, on which I will be better able to provide further detail when the consultation response is set out tomorrow. I hope that he can bear with me on that, and perhaps we can give him the responses that he is looking for at that time.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I thank the right hon. Lady for her answer, although I regret that it was not a full statement—the media were obviously briefed on Friday. Her answer raises some additional questions.

We are clear that when couples love each other and want to make a long-term commitment, that should be cause for celebration, not discrimination, and they should be able to marry regardless of their gender or sexuality. I agree with the right hon. Lady about that. When Labour was in government, we legislated for the equalisation of the age of consent, civil partnerships, an end to the armed forces ban, and other provisions to tackle discrimination. Many of those measures were controversial among some at the time, but they were the right thing to do, as legislating for same-sex marriage is now.

Freedom of religion rightly means that no church or religious organisation should be required to hold same-sex marriages, so can the right hon. Lady confirm that that will be in the Bill? Freedom of religion also means that people of faiths such as the Quakers, the Unitarians and others who want to be able to celebrate same-sex marriage should be able to do so. The right hon. Lady will know that I have been arguing for this for many months. Can she confirm that the Government will include that, too, in the Bill that she brings forward?

I strongly disagree with Government Back Benchers who are not only calling for these plans to be dropped but supporting the invidious section 28, which would turn the clock back on discrimination and homophobic bullying and which should be condemned in all parts of this House.

I also disagree with the hon. Member for Gainsborough (Mr Leigh). Marriage is not the preserve of any individual faith or organisation. Civil marriage is about the way the state views and values long-term relationships, and the state should not discriminate. Marriage laws have rightly changed before so that married women are no longer treated as their husband’s property and can no longer be legally raped—something that was possible as late as the 1990s. Does the right hon. Lady agree that changing the marriage laws again now to bring in same-sex marriage will strengthen rather than weaken the institution of marriage, and that we should urge everyone to support it?

[Maria Miller]

I thank the right hon. Lady. There are many things that one can control in this world, but media comment is certainly not one of them. However, I also draw the House’s attention to the fact that she asked me a great number of detailed policy questions that the media have not set out, so perhaps that requires more of a detailed policy announcement from us tomorrow.

I agree with the right hon. Lady that marriage is a source of joy and celebration. The Prime Minister and I have set out really consistently in recent months that we want to make sure that more people are able to enjoy the benefits of marriage, hence the consultation that we have been carrying out. I hope that the proposals we bring forward will enjoy cross-party support; that is certainly my intention.

The right hon. Lady is right, however, that safeguards are incredibly important for those who have deep-seated religious beliefs in this area. As I have said, I believe that the case law of the European Court of Human Rights and rights under the European convention will put protection of religious belief beyond doubt. When we, the Government, give our full response to the consultation, I am sure that I will be able to give her and other hon. Members more detail in that regard.

The right hon. Lady is right to say that the proposals being considered by the consultation will work to strengthen the relevance of marriage in our society today and for the future. She drew on some of the innovations that have been put in place in recent centuries; perhaps this is our opportunity to make sure that marriage is relevant for our century.

[Several hon. Members]

rose—

[Mr Speaker]

Order. It is a pity that the House did not hear about the updated policy first, but it is nevertheless reassuring to know, in consequence of what the right hon. Lady has said, that the House will hear about it twice. That is very welcome.

[Nick Herbert (Arundel and South Downs) (Con)]

I welcome my right hon. Friend’s response. Does she agree that, while civil partnerships were an incredibly important step forward for gay people, they are not marriages; that gay people will not feel that they are fully accepted in society while they are denied access to what is one of our most important institutions; and that that is the reason for proceeding with this reform? Will she confirm that she will press ahead with it?

[Maria Miller]

My right hon. Friend is tempting me to go further than I want at this stage. We will make a full statement tomorrow, but he is right that civil partnership and marriage are perceived differently. Marriage is a universally understood and recognised status and it is right that we as a society should have it open to all couples. The consultation has been looking at how we would take forward that proposal and I am sure that the consultation response will furnish the House with more details.

[Mr Ben Bradshaw (Exeter) (Lab)]

I commend the Minister for what I think is her approach—it certainly seems to be the Prime Minister’s approach—but it would have been nice to have had the statement today, because that would have saved us a great deal of time in not having to come back tomorrow. Does she recall that exactly the same warnings were made about civil partnerships? It was said that allowing some faiths to have them in church would force all churches to do it, but that did not happen. Would it not be iniquitous if those churches and faith groups that wanted to celebrate marriage on their premises were prevented from doing so because of the opposition of others?

[Maria Miller]

The right hon. Gentleman knows that I am here today not because I have chosen to be here, but because others have asked me to be here. As a Minister, it is always very important to come to the House if requested.

The right hon. Gentleman is right that it is important to recognise the different views of different religious institutions. We held the consultation and wanted to talk to people more fully because we wanted to make sure that when we take forward the idea of broadening out the availability of marriage to same-sex couples, we understand in full exactly how it should be done. He is right to recognise that different groups have different views, and we will certainly consider that further.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I say to my right hon. Friend that in the real world this issue is neither complex nor controversial. In fact, if confirmed tomorrow, it will be widely welcomed by millions of lesbian, gay, bisexual and transgender people across our country. I very much look forward to hearing her statement tomorrow.

[Maria Miller]

My hon. Friend is absolutely right that there is a great deal of support for making sure that marriage remains a relevant institution in Britain today. I do not think that this has anything to do with fashion, style or modernity; it is all about fairness and equality. In considering how we make sure that our civil institutions are fair to all people in society, it is right that we look at how marriage works in Britain today.

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

Will the right hon. Lady clarify something factually? My researches, such as they are, indicate that parts of the law on marriage are opaque and that the right of places of worship to refuse to marry a man and a woman exists, although it can be challenged. In the Jewish religion, a synagogue may well refuse to marry a man and a woman if it doubts the validity of either partner’s conversion to Judaism. Am I right that she is seeking not to force any place of worship to marry somebody in a same-sex partnership, as she has made clear, but to protect places of worship that refuse to do so?

[Maria Miller]

The right hon. Gentleman is right that what I am trying to set out is that the Government respect all religious institutions’ right to determine whom they marry within their precincts. I have set that out as my priority, as has the Prime Minister this weekend and last summer. Right hon. and hon. Members are rightly focused on such safeguards. I am sure that we will look at that matter closely when we talk about the consultation response.

[Sir Peter Bottomley (Worthing West) (Con)]

I suspect that the opposition to the Government’s proposals would be far less if Mr Colin Hart and his so-called Coalition for Marriage had not sent out hundreds of thousands of letters aimed at constituents of particular political persuasions to say that they should not vote for their party if the proposals go ahead. May I challenge Mr Hart, through my right hon. Friend, to come into the open and justify what he has done, and to defend himself to the Archbishop of York and the former Archbishop of Canterbury? I think that what has happened is disgusting.

[Maria Miller]

My hon. Friend is right that we have to look at the facts when it comes to the ability of religious organisations to continue to determine what happens in their own precincts, organisations and churches. There has been quite a lot of hyperbole over the implications of what we are talking about. The Government’s objective is simple: we want to ensure that marriage, which is a hugely valued part of our society, is open to more people. I think that that should be applauded.

[Chris Bryant (Rhondda) (Lab)]

Having married more people than I can remember—as a vicar, that is—I have never understood how extending marriage to more people could invalidate the marriage of other people who are already married. I wholeheartedly support what the Government are doing. I remind the Minister that the Prayer Book of 1662 states that marriage is

“ordained for the mutual society, help and comfort, that the one ought to have of the other, both in prosperity and adversity.”

Why on earth would any Christian want to deny that to anybody? Is it not right, therefore, that the Minister will categorically allow churches to do that?

[Maria Miller]

The hon. Gentleman is again taking me into things that we will come on to tomorrow, such as the role of churches. Unlike him, I have married only once, but I married well, so I am lucky. He is right that marriage strengthens our society and that the proposals will strengthen it further. This is a rare opportunity for the hon. Gentleman and I to agree, and I will savour the moment for as long as I can. I am sure that we will continue to be in agreement as we look at the detail of what comes forward.

[Sir Tony Baldry (Banbury) (Con)]

My right hon. Friend will know that one of the many important issues for the Church of England and other Churches is that the Bill must do what the Government purport that it will do and provide statutory protection so that Churches that do not want to carry out same-sex marriages are not forced to do so. Will my right hon. Friend give an undertaking that she will ask her officials to work with me in my capacity as Second Church Estates Commissioner and with lawyers for the Church of England and other Churches to ensure that by Second Reading we are all confident that the quadruple lock protection, which will hopefully be in the Bill, will do what we all hope it will do, which is to give the Churches the protection that the Government wish to give them?

[Maria Miller]

I very much value my hon. Friend’s contribution and he is right to say that our objective of ensuring that no organisation is forced into doing something that it does not want to do must be made absolutely clear. I give my hon. Friend a complete undertaking that my officials will work with him—well before Second Reading, I am sure—to ensure that he and other religious leaders are content with proposals that may be forthcoming around the future of equal civil marriage. We all share the objective of wanting to ensure that individuals who want to be married can be married, but that institutions that want to protect their freedoms and religious beliefs have that protection.

[Ian Paisley (North Antrim) (DUP)]

If marriage is opened to allow individuals to marry one another regardless of sex or gender, article 12 of the European convention on human rights will apply to both same-sex and opposite-sex marriages. If that is the case, will the Minister seek a derogation under the convention to protect churches, rectors and church trustees who do not want to hold same-sex marriages in their buildings, in order to protect their rights, freedoms and religious identity?

[Maria Miller]

The hon. Gentleman is drawing me into a great deal of detail—exactly the sort of detail that a Bill Committee would look at in the development of any legislation. He is right to say that such detail is important and must respect freedom on both sides, and I am sure such matters will be considered on Second Reading and in Committee. I remind the hon. Gentleman that the situation in Northern Ireland will be different; this is a devolved matter and the Northern Ireland Government may take a different view.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Will my right hon. Friend confirm that approximately 500,000 people who responded to the Government’s consultation by saying no to redefining marriage have been excluded from the Government’s consultation and effectively denied a voice, although others—including those beyond the United Kingdom—have been included in that consultation? Is the consultation in danger of being seen as a sham that does not provide the Government with a mandate to redefine marriage?

[Maria Miller]

We have taken into account all valid contributions to the consultation, which was exceptionally important in shaping and forming the Government’s view on how we take forward equal civil marriage. More than a quarter of a million people responded to the consultation and we have taken time to consider their responses in detail. I assure my hon. Friend that those responses were integral to how the policy has been taken forward.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Does the right hon. Lady agree that most parents would prefer their children to be happy, rather than prefer them not to be gay?

[Maria Miller]

I think it is important that children are happy, and whether an individual is gay, bisexual or heterosexual is really a personal matter.

[Jake Berry (Rossendale and Darwen) (Con)]

Some of us have no interest in what happens behind people’s bedroom doors but might be slightly more concerned about what the legislation will do behind the church door. In her opening comments my right hon. Friend described the legal challenge as negligible. Will she publish all the legal advice that the Government have been given on the possibility of Churches, and other religious groups, being forced to conduct same-sex partnership ceremonies?

[Maria Miller]

My hon. Friend will know that the Government do not publish legal advice, but he can be assured that the work we are doing is in accordance with the law. I state again that European Court case law and the European convention on human rights put the protection of religious belief beyond doubt. The whole House should welcome that, and we will ensure that we have the sorts of protections that—as I hear from all sides—are very much wanted.

[Yvonne Fovargue (Makerfield) (Lab)]

Does the Minister agree that freedom of religion works both ways? Although it is right that no religious group should be forced to marry same-sex couples if it does not wish to do so, the faith groups that wish to marry same-sex couples should be allowed to do so.

[Maria Miller]

I personally agree with the hon. Lady. Indeed, the Prime Minister said so not just this weekend but last summer.

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

I very much support the Government’s position, but some Churches in my constituency are concerned that they will be forced—perhaps through the courts—to hold same-sex marriages on their premises. What assurances can the Minister give that the Government’s correct ruling will not be overturned in the courts, whether in this country or on the continent?

[Maria Miller]

My hon. Friend is right—we do not believe that any religious organisation should be forced to do something that is beyond their belief and faith. I direct him to case law of the European Court, which has made it clear that those are issues for individual countries and not something on which it will rule centrally.

[Susan Elan Jones (Clwyd South) (Lab)]

Some Churches in our country allow marriages only of members of their fellowships. Equally, some Churches will not allow the remarriage of divorced people. Many different faith groups have different rules. If that has not been seriously challenged in the past 10 years, does the Minister agree that it is highly unlikely that there will be such a challenge to same-sex marriages?

[Maria Miller]

I could not have put it better myself; the hon. Lady makes an extremely strong point.

[Mr David Nuttall (Bury North) (Con)]

With Christmas just around the corner, lots of people might be thinking of giving a dictionary as a present. Before they do so, and for the benefit of dictionary publishers, will the Minister say whether the Government have any plans to change the definition of any other words?

[Maria Miller]

No—not at all.

[Mr Andy Slaughter (Hammersmith) (Lab)]

In the light of the Minister’s earlier comments, what is her view of the statement made by her hon. Friend the Member for Monmouth (David T. C. Davies) over the weekend? Does she believe it contributes well to the debate?

[Maria Miller]

All such views need to be taken into account. People should be able to say what they think on this matter and we should not stifle debate. Suffice it to say that I believe marriage is hugely important. It is vital that all religious institutions continue to be protected and that we ensure that marriage is open to more people in future. The comments of my hon. Friend the Member for Monmouth (David T. C. Davies) are a matter for him.

[Mr Peter Bone (Wellingborough) (Con)]

I am a Christian and I am against the redefinition of marriage, but that is for tomorrow. The urgent question today is why on earth the Government briefed in advance about a new policy and a change to the previous position. The Minister has condemned that herself in the past. Will she have a word with the Prime Minister and tell him off?

[Maria Miller]

My hon. Friend might be jumping to one or two conclusions. It is right that we discuss policies first and foremost in the House. I have a long-standing commitment to make a statement in the House this week, but have brought it forward to tomorrow. I share the House’s concern and disappointment that there has been such widespread discussion this weekend, but we will be able to go into the detail tomorrow.

[Kevin Brennan (Cardiff West) (Lab)]

What does the Secretary of State think triggered the discussion this weekend?

[Maria Miller]

The hon. Gentleman can go and talk to the journalist concerned and find out.

[Mike Freer (Finchley and Golders Green) (Con)]

The Movement for Reform Judaism is headquartered in my constituency, and is a large faith group that wishes to have same-sex marriage. Is this legislation not in the best Conservative principles of expanding personal choice while protecting religious freedoms?

[Maria Miller]

As on so many things, my hon. Friend is absolutely right.

[Mr William Bain (Glasgow North East) (Lab)]

Although there will be a separate Bill in the Scottish Parliament on this issue, there is strong cross-party support for the policy that the Minister has nearly announced today. In Scotland, 68% of people believe that religious organisations that want to be able and free to marry same-sex couples under the law should be able to do so. What discussions has she had with the Scottish Government about whether any provisions in the draft Bill she may announce tomorrow will apply in Scotland?

[Maria Miller]

The hon. Gentleman is right: on issues as important as this, cross-party support is crucial. I just urge him to make sure that he also respects those who may not agree with same-sex marriage being open to all religious institutions. It is important that we show that respect throughout. I can assure him that my officials have been in intensive discussions not only with the Scottish Government, but in Northern Ireland and Wales. This affects all parts of the country, and we want to ensure that there is full co-operation wherever possible.

[Mr Julian Brazier (Canterbury) (Con)]

Will my right hon. Friend reassure us that whatever is announced tomorrow, no teacher will face prosecution or civil action as a result of espousing a Christian view of marriage?

[Maria Miller]

My hon. Friend is right to raise this issue, which has been a concern for many of our constituents. I can confirm that nothing will change what children are taught. Teachers will be able to describe their belief that marriage is between a man and a woman, while acknowledging that same-sex marriage will be available. It is important to reassure people. There is a great deal of what perhaps one could call scaremongering. It is important that teachers and faith schools are aware that they will continue to enjoy the same situation as they do now.

[Lilian Greenwood (Nottingham South) (Lab)]

On Friday, the Prime Minister said that he would allow churches to hold same-sex marriages if they wanted to. Will that be in the Bill—yes or no?

[Maria Miller]

I think the Prime Minister made it clear that his own personal view was that that should be the case. The hon. Lady will have to wait perhaps a little less than 24 hours to see the details for herself.

[Jane Ellison (Battersea) (Con)]

On a broad rather than a detailed point, perhaps the Minister has, like me, met young people who have been forced out of homes by families who did not accept their being gay. Does she agree that a change towards equal marriage is an important way in which society can send a signal that their contribution is greatly valued today?

[Maria Miller]

My hon. Friend is right to say that we should all be striving for equality in civil life. In ensuring equality for citizens, however, we should respect the right of faith groups to have their beliefs too. Religious freedom and equality are two things that we should all cherish and protect in any way we can.

[Emma Reynolds (Wolverhampton North East) (Lab)]

I welcome what the Minister has said, and I agree with the Government’s plans to introduce legislation to allow same-sex marriage. However, I am a little confused about what will happen between now and tomorrow’s statement. Will she confirm that every single member of the Cabinet agrees with the proposals and will vote for them when they come before the House?

[Maria Miller]

The hon. Lady will know—well, maybe she was not in the previous Labour Government—that we are in the process of finalising this policy in the usual way, but to ensure that the House is fully informed as quickly as possible, I have speeded up that process.

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

I welcome the Minister’s assurance that if the Government plan to expand equal marriage to churches willing to carry out the ceremonies, other churches have nothing to fear. After tomorrow’s statement, will she seek to reassure those churches that they have nothing to fear from the legislation?

[Maria Miller]

My hon. Friend is right about the importance of providing reassurance and working with religious institutions. I will be speaking personally with heads of religious groups, and my ministerial colleagues in the Equalities Office will be doing likewise. This is the start of a process of ensuring that they can be confident that the protections will be robust and effective.

[Huw Irranca-Davies (Ogmore) (Lab)]

As someone with a long-term personal investment in the institution of marriage, I can thoroughly recommend it to everyone who wants it. Nevertheless, will the Minister also introduce proposals for those who do not want the institution, such as heterosexual couples who want a civil partnership rather than a marriage? I have constituents who have raised this with me.

[Maria Miller]

I am sure that the question of civil partnership will be addressed as part of the consultation response, but I suggest to the hon. Gentleman that civil partnership was never put forward as a replacement for marriage, and I am not sure it is something we want to open up to more people.

[Stuart Andrew (Pudsey) (Con)]

I want to live in a free society, and at the heart of a free society surely lies personal freedom and religious freedom. Will my right hon. Friend confirm that this proposal simply upholds those principles, affording those of us who might want to commit the opportunity to do so, and the power for religious organisations to decide whether to offer it? Given that getting married is a significant event in anybody’s life, I wonder who would want to get married in a church that did not want them.

[Maria Miller]

My hon. Friend is right that this is about personal freedom. Our society greatly values equality and fairness, and for me the extension of civil marriage to same-sex couples is absolutely about equality and fairness.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Many people of faith in Stratford-on-Avon are rightly concerned about the Bill, and I hope that tomorrow we will see freedom of religion front and centre of the proposals, but the big question is about discrimination. Up until 1967, 16 states in America banned interracial marriage; it was only overturned in 1967. I am sure that no one in the House would argue on moral grounds to ban interracial marriage today. Let us get rid of discrimination and protect freedom of religion.

[Maria Miller]

My hon. Friend is right to focus on the importance of freedom of religion and the need to ensure that faith groups that want to can continue to voice their belief that marriage is between a man and a woman, rather than between two people of the same sex. Perhaps even more important than this issue of marriage, however, is the role of faith groups in our society. Many faith groups might feel that they have been marginalised in recent years and are not central to some of the debates in this country. This is a healthy debate about the importance of protecting our religious freedoms, while taking forward civil marriage in a way that opens it up to more people in our community. It is important that we do not marginalise people of faith and that they are absolutely respected and at the heart of this proposal.

[Robert Halfon (Harlow) (Con)]

This country has found it hard to resist prisoner voting, despite the majority of the House having voted against it, so can my right hon. Friend appreciate that many hundreds of my constituents from faith groups are understandably concerned about legal challenge?

[Maria Miller]

My hon. Friend is right to bring up the issue of prisoner voting—it is something that many in the House feel strongly about—but it is not the same as marriage. The European convention on human rights contains clear protections for religious belief, and the fact that marriage is at the heart of many religious institutions’ beliefs means that it is clearly protected. As I have said, we believe that rulings in European case law have put this matter beyond doubt.

[Mr Crispin Blunt (Reigate) (Con)]

Before my right hon. Friend gives us the Government’s proposals in response to the consultation tomorrow, may I thank the Prime Minister through her for his constitutionally rather unusual personal statement on Friday and again thank him as leader of the Conservative party for intending to give Conservative Members of Parliament a free vote? On an issue such as this, that is something we should see across the House.

[Maria Miller]

My hon. Friend is right to say that this is all about balancing freedom of the individual with equality—freedom for people of faith to follow the views of their faith and freedom for individuals in same-sex relationships to take part in civil marriages in the way as heterosexual couples do.

[Jason McCartney (Colne Valley) (Con)]

Does my right hon. Friend, like me, look forward to a day when we no longer talk about “equal marriage”, “gay marriage” or “same-sex marriage”, but just talk about marriage—a loving commitment between two people who want to love each other and be with each other?

[Maria Miller]

My hon. Friend is right. Having been married for many years—many hon. Members will be aware of this as well—I know that marriage brings a stability to life and creates a loving place to bring up children. That is important to recognise, but we absolutely have to respect the rights of religious institutions to take a different view. As a sophisticated and mature society, we should be able to enter that debate with respect on both sides.

[Craig Whittaker (Calder Valley) (Con)]

My right hon. Friend said that the views of people of faith should never be marginalised. Will she tell the House how she will square that with the 619,007 people who have signed the Coalition for Marriage petition, which calls for no change in the definition of marriage?

[Maria Miller]

As my hon. Friend will know, for more than 180 years there have been two different ways to enter into marriage—one through a religious ceremony, the other through a civil ceremony—so the role of religious organisations in marriage is there indelibly. To ensure that those views absolutely continue to be centre stage, I am working on safeguarding the freedom to continue to view marriage in a different way in different religious institutions, but that in no way means that we have to stop individuals in same-sex relationships being able to be married as well.

[Dr Matthew Offord (Hendon) (Con)]

Many Members have expressed the sentiment that marriage is at the centre of religious life—amen to all that—but have the Government considered introducing other forms of marriage, such as polygamy, and if not, when can minorities who believe in such a practice expect their own consultation?

[Maria Miller]

I think the law is pretty clear on this. Marriage is between two people, which means that what my hon. Friend talks about would not be possible.

[Mr Brooks Newmark (Braintree) (Con)]

While I deplore discrimination on any level and will certainly be supporting same-sex civil marriage—I am glad that the Government are now considering supporting those religious institutions that support that—I have many constituents from more orthodox communities, whether Jewish, Christian or Muslim. What assurance will the Government give to protect their beliefs?

[Maria Miller]

We will be absolutely making it clear to them that the safeguards that are in place are not safeguards purely for the Church of England—or indeed just for Christian Churches—but safeguards for religious institutions across the board. My hon. Friend is absolutely right that there are different views in different religious groups. We have to respect those views. It is important that we work with all such religious organisations to ensure that they understand the safeguards we will put in place and agree that they will work by providing them with effective protection.

[Gavin Barwell (Croydon Central) (Con)]

As a strong believer in the importance of marriage to our society, may I warmly welcome what my right hon. Friend has said? Does she agree that it should not be beyond the wit of this House to devise a Bill that addresses the concerns of many Churches, synagogues and mosques, as expressed by my hon. Friend the Member for Gainsborough (Mr Leigh), while still allowing two men or two women who love each other to exchange the same vows and enjoy exactly the same legal rights as my wife and I enjoy?

[Maria Miller]

I am sure my hon. Friend is absolutely right. This is about all of us helping to ensure that the facts are communicated effectively to our constituents. There has been a great deal of campaigning on this matter, and people might sometimes have misunderstood the case law from the European Court’s rulings. Now is the time for sober reflection, to ensure that people get the facts rather than the hyperbole, and that they understand that it is possible to provide safeguards as well as equality for same-sex couples in this country.

[Michael Ellis (Northampton North) (Con)]

I congratulate the Minister on this welcome proposal. Does she agree that making marriage legal for a wider cohort of people through same-sex marriages does not in any way weaken or detract from the marriages of heterosexual people? As a House, and as a society, we need to factor in that equality under the law is as important as religious freedom.

[Maria Miller]

My hon. Friend is right to say that this is all about strengthening marriage. Any individual who marries takes on a huge responsibility. Marriage strengthens our society and underlines commitment, and we should all welcome the fact that this move will enable more people to marry. This is as relevant today as it was 180 years ago.

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

Earlier this year, permission was granted for civil partnership ceremonies to be held in religious institutions. Will the Minister tell the House how many times that has actually happened?

[Maria Miller]

I will have to get back to my hon. Friend with those exact data, but I am sure that all the ceremonies that have taken place have been joyous occasions.

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

Has my right hon. Friend had a chance to examine the experience of those other European countries that have legalised same-sex marriage? Have any churches in those countries been forced to marry a couple against their faith?

[Maria Miller]

The simple answer to that is no. Many European countries have permitted same-sex marriage for many years. Denmark, for example, adopted such a policy in 1989, and now Spain, Canada and many others are putting in place similar legislation. This reflects societies that are willing to embrace change while ensuring that protection for important religious institutions is in place.

[Guy Opperman (Hexham) (Con)]

As a lawyer, I have tested the ECHR rules and articles at great length in the British courts and in Strasbourg. I therefore welcome the proposed protections that will be enshrined in this law. Does the Minister agree that this is fundamentally a matter of choice for the couples as well as for the religious institutions that we so revere?

[Maria Miller]

My hon. Friend has made his point extremely clearly. This is about ensuring that that choice exists. I would add that it is also about showing respect, and that both sides showing respect will go a long way towards ensuring that we come out of this with a policy of which this country can be proud.

[Bob Stewart (Beckenham) (Con)]

Can my right hon. Friend explain why the Government are so hellbent on upsetting so many thousands of our citizens who are in normal marriages, especially at this time?

[Maria Miller]

I do not think that anything I have set out today—or that my colleagues have talked about in recent days, weeks and months—does anything to upset anybody who is already in a marriage. I respect the point that my hon. Friend makes, which is that some people with a religious faith feel that this matter falls outwith their faith. I absolutely respect that, and it is important that we introduce clear safeguards and protections so that he, his constituents and others can understand that we are talking about strengthening marriage and not about undermining it.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

The suggestion that the Government’s proposals need not necessarily impact on religious belief is nonsense. The definition of marriage is the joining together of a man and a woman in holy matrimony, and allowing same-sex marriages will therefore require a redefinition of the term. Such a redefinition would undermine one of the basic tenets of many religious institutions, so it definitely would impact on religious belief. That is not scaremongering; that is fact.

[Maria Miller]

My hon. Friend has his views, and he articulates them clearly. There are already two different ways into marriage: through a civil ceremony or a religious ceremony. What we have to do is respect the fact that religious organisations may well continue to want to have a different approach to marriage than the state’s approach. I think it is important for the state not to show a disregard for the importance of equality and for respecting the rights of same-sex couples. That is at the heart of the debate that will be had.

[Andrea Leadsom (South Northamptonshire) (Con)]

My right hon. Friend shows herself to be a strong and passionate advocate for the institution of marriage. Will she therefore agree to articulate her support for marriage in Cabinet by supporting it in the tax system, as advocated in the coalition agreement?

[Maria Miller]

My hon. Friend may know—she can check the media cuttings on this—that for many years, ever since I have been a Member of Parliament, I have been a strong advocate of marriage. I am glad to see so many people in the Chamber supporting it. The tax system is very much an issue for the Chancellor, but she will know that recognition of marriage in the tax system is important and that the Chancellor has considered it in the past.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Coming from an Islamic background, and with a father who was an imam, may I ask the Minister to clarify what response she has received from the Muslim community on this consultation?

[Maria Miller]

The response from the Muslim community, as I am sure my hon. Friend will be aware, has been one of some concern, as it has been from other religious institutions, to ensure that a clear safeguard is in place for the religious beliefs of the Muslim community, in the same way as Christians or any other religious group want respect for their beliefs. I can give him a clear undertaking that my officials and I will work with all religious groups and make sure that they understand how we will put the safeguards in place and ensure their efficacy.

[Mr Speaker]

I look forward to welcoming the Minister back tomorrow for part 2. I look forward to what I am sure will be her joyous statement and to the prospect of questioning thereon.

Remploy

Monday 10th December 2012 Commons Chamber

16:22

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

(Urgent Question): To ask the Minister if she will make a statement about the end of Remploy.

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

I am grateful for the opportunity to provide the House with an update on Remploy. On Thursday, I laid a written statement in the House about stage 2 of Remploy factories—a continuation of a process announced by my predecessor, now Secretary of State for Culture, Media and Sport, on 7 March. She then gave a further statement to the House on 10 July. In it, the Remploy board announced the outcome of its analysis of the remaining stage 2 businesses. Remploy will now start a commercial process to mitigate potential job losses. At this stage, no final decisions have been made about factory closures or redundancies. Our priority throughout the process is to safeguard jobs, which is why we are offering a wage subsidy of £6,400 for each disabled employee to encourage interested parties to come forward.

We want substantially to improve employment opportunities for all disabled people. We engaged with disability experts and organisations to undertake a review of our specialist disability employment support. The Sayce review findings and the responses we received to the public consultation strongly supported the idea of moving away from the Remploy model for disabled people.

The first point that I want to make is that a sixth of the money for the sustained employment of disabled people is currently spent on supporting the Remploy factories, which means that a sixth of the budget went to 2,200 out of 6.9 million disabled people of working age. I remind the House that, before the last Government closed 29 factories, the right hon. Member for Neath (Mr Hain) said:

“The reality is that without modernisation Remploy deficits would obliterate our other programmes to help disabled people into mainstream work.”—[Official Report, 29 November 2007; Vol. 468, c. 448.]

The current Government are committed to protecting the budget of £320 million for specialist disability employment support, but we know that we must use that money much more effectively to help far more disabled people to fulfil their ambitions and move into mainstream work. In these economically difficult times, it is more important than ever for the Government’s disability employment programmes to represent value for money and to deliver the most effective possible support to help disabled people to find and keep employment.

Remploy has faced an uncertain future for many years, and in 2008, under the last Government, 29 factories closed. A modernisation plan failed, having set excessively ambitious targets which were never achieved. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) knows that only too well. As a result, the factories have become increasingly loss-making, and their future has become more precarious. That has left all staff in a vulnerable position. The answer must be to find them work and help them into mainstream employment, and the changes that are being made are focused on ensuring that they all obtain long-term, sustainable jobs.

I do, of course, understand how unsettling it is for Remploy employees to find that they are faced with the threat of losing their jobs. I know that a large number of them have given many years of service, and that they now face the prospect of looking for alternative work. That is why we set up the people help and support package especially for them. All disabled Remploy staff affected by the changes who give their consent will be guaranteed access to £8 million of tailored support to help them to find alternative employment. Despite a slow start, we are making a number of improvements to the package. Over the past three months, 148 of the 960 or so disabled people who have come forward to work with us and our personal case workers have found employment. We have every expectation that the number of job outcomes, which is already increasing daily, will increase further. We are monitoring and tracking these people and helping them to obtain work, which is something that the last Government never did when they closed their factories.

Jobcentre Plus reached agreements today with five major national employers—some of the biggest high street retailers and restaurant chains—to help ex-Remploy staff into work, and they will also have access to support from Remploy Employment Services. Since 2010, despite the tough economic climate, it has found 50,000 jobs for disabled and disadvantaged people, many of whose disabilities are similar to those of staff in Remploy factories.

Let me give a few instances of former Remploy staff who have begun work in a vast array of jobs. Four former employees from Aberdeen have started a co-operative business in their old factory. Red Rock Data Processing Services in Wigan is reopening its factory and employing former Remploy staff. Ex-employees have found work at Dekko Windows in Oldham, Camborne college in Penzance and Hayman Construction in Plymouth, and at Asda. All those people are moving into mainstream work, and I expect that, as the support continues, we shall see an increasing number of such good outcomes.

I have met many Members on both sides of the House to discuss this matter, and I shall continue to do so. We seek the best possible outcomes and opportunities for all Remploy staff.

[Mr Speaker]

I am grateful to the Minister. She did somewhat exceed her allotted time, which simply means that I must allow some modest latitude to the right hon. Member for Birmingham, Hodge Hill (Mr Byrne).

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I start, Mr Speaker, by saying how grateful we are to you for allowing this urgent question this afternoon? I say to the Minister that, frankly, it is shameful that her Department tried to sneak out through a written ministerial statement last week news that it was shutting a further 10 Remploy factories and putting five more at risk. It was a mark of contempt for Remploy workers that the Minister sought to duck a debate in the House.

This statement marks the destruction of a tradition that stretches back to the foundation of the welfare state. If there is an ideal that Labour Members cherish, it is that the welfare state should be strong on the ethic to work and strong on the ethic to care. Remploy epitomises both those ideals, yet over the past year all we have heard from the Government is one plan after another to close Remploy down, without any regard for how its workers are connected to a future—to jobs and prosperity in the years to come.

Months ago, a Minister from this Department promised the House that the Government would move hell and high water to ensure sacked Remploy workers got into jobs, yet today about 90% of those workers sacked this year are still out of work. That is not good enough. The Work programme is not delivering for disabled people. Fewer than 1% of people on employment and support allowance have been found sustained jobs. When we undertook the modernisation of Remploy, we set aside £500 million to help support the process. I am afraid that is in sharp contrast to what we heard from the Minister this afternoon.

It is now apparent that this closure programme must stop until we are clear about what has gone wrong in getting sacked Remploy workers back into jobs. We need to learn far more from the example set by the Welsh Government, who have already provided 97 opportunities for 250 workers who have lost their jobs. The Minister will have heard, as I have, just how important this is, because she will know, as I do, that for Remploy workers their job is far more than simply an income; it is their connection to a social network and to a world outside. It is often everything to them.

Let me ask the Minister this: will she apologise to the House for trying to sneak this announcement out through a written ministerial statement? Especially after the Secretary of State dismissed Remploy workers as doing nothing more than sitting around drinking coffee, I think that that would be an appropriate gesture. Will the Minister stop this closure programme until we have a report on the table from her Department about what has gone wrong in getting the workers sacked earlier this year back into jobs? Specifically in respect of Wales, will she take up the proposal of Leighton Andrews that two factories in Wales be transferred to the Welsh Government, because although she does not feel they have a future, the Government of Wales certainly do?

[Esther McVey]

I am quite taken aback by your bluster and, I have to say, false words. Your words would have far more emphasis—[Interruption.] The right hon. Gentleman’s words would have far more worth were it not for the fact that he put these plans into place in the first instance. Indeed, he closed 29 factories in 2008 and rightly put in a lot of money, but it was put into a failed modernisation plan with targets that could never be reached. A target of 130% was expected of public sector contracts; that never happened. Worse still, he has the temerity to talk to us about what we have put in place for individual workers when he did absolutely nothing; he did not track them, and he did not put in place any personalised casework or any support. That is really rather shocking.

The right hon. Gentleman might be making cheap jibes and cheap statements on the back of these workers, but frankly I find that rather disingenuous and beneath him. He has a failed modernisation plan behind him, and also failed support, and he was also the chap who said that no money was left in the bank. I will not apologise, therefore, because, frankly, I am picking up his pieces.

[Mr Speaker]

Order. I am sure the Minister was not suggesting that anybody would knowingly mislead the House.

[Esther McVey]

No.

[Mr Speaker]

I was guilty of many cheap gibes and bluster as a Back Bencher, but the Speaker does not engage in cheap gibes or bluster. Just as long as we are clear about that—very good.

[Conor Burns (Bournemouth West) (Con)]

The Minister will be aware that the Remploy factory at Alder Hills in my constituency closed; she wrote to tell me that it was closing in her first days in her new job. She will also be aware that Giles Verdon and his team at that factory were working to put together a community interest company. May I tell her that in all their dealings with Remploy centrally phone calls went unanswered, information requested was not forthcoming and deadlines were too short? They did not stand a chance. Will she agree to meet me and representatives of Remploy in Poole so that they can tell her about their experience in dealing with Remploy centrally?

[Esther McVey]

I will indeed meet my hon. Friend, just as I have met so many hon. Members to discuss the best way forward and to learn from what has happened so far.

[Jim McGovern (Dundee West) (Lab)]

I am on record as saying that I have been to the Remploy factory in my constituency so often that I am on first-name terms with most of the work force, and I have always regarded them as a happy work force who are reasonably well paid and happy to be where they are. This morning, I visited that factory and, needless to say, found that the work force are distraught at the fact that they are going to be closed down. What succour can the Minister give the Remploy work force in Dundee? What sort of perverse policy is it for a Government to throw the disabled work force on the dole and then tell them that if they cannot find alternative work they should work for nothing?

[Esther McVey]

An announcement has been made and there is now a 90-day consultation to find out who would wish to take over the business as an ongoing concern; otherwise it is open for people to buy the assets to open up social enterprises, as has happened in Aberdeen and is happening in Wigan. I also wish to mention at this point that in the hon. Gentleman’s constituency there are 10,300 people with disabilities, while at the factory itself there are 37, and that last year alone Remploy Employment Services did find 169 people jobs. First we have to go through the process and see what we can do for the good people of Dundee.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Labour Members are very keen to list disability charities when they happen to be in agreement with each other. Having listened to Labour Members preach equality for the past hour on the previous urgent question, will the Minister remind me how many disability charities—and which ones—made a contribution to the Sayce review supporting the Labour party’s policy of segregated employment for the disabled?

[Esther McVey]

The vast bulk of charities agreed with the Liz Sayce review and added to that, so my hon. Friend makes a very good point.

[Several hon. Members]

rose—

[Mr Speaker]

I call Mr Chris Bryant.

[Chris Bryant (Rhondda) (Lab)]

Right—I did not expect to be called quite so soon, Mr Speaker.

[Mr Speaker]

This is a first; is the hon. Gentleman speechless?

[Chris Bryant]

Thank you very much, Mr Speaker.

The real problem at the Remploy factory in the Rhondda is that, although the vast majority of disabled people in the Rhondda are in mainstream employment, we have 72 people there who are affected, some of whom have been transferred from a previous Remploy factory that was closed, and we have rising unemployment and very little prospect of jobs for people. So will the Minister please take up the offer that Leighton Andrews, the Assembly Member for the Rhondda and also a Minister in the Welsh Assembly Government, made to take over the Welsh factories with their assets, so that if she is not prepared to do anything to protect these jobs, the Welsh Assembly can?

[Esther McVey]

I will correct the hon. Gentleman; we are doing everything we can to protect jobs for disabled people. I spoke with Leighton Andrews last week on what we have agreed to put in place; obviously the commercial process has to be gone through correctly, as other people might put a better offer on the table. What we have to do is get the best offer for those disabled people, whom we so want to help. Should Leighton Andrews have the best offer, that will be the path we take.

[Philip Davies (Shipley) (Con)]

My hon. Friend will know that I did not favour closing any Remploy factories, but does she agree that it sticks in the throat to hear the feigned outrage of the Opposition, who closed 29 factories without a care in the world? Nobody could do more than she is doing to try to help these disabled people to find jobs. May I urge her to continue on that path, because at a time when so many people do not want to work we should do everything we can to help these people, who do want to work?

[Esther McVey]

I totally agree with my hon. Friend and we are working tirelessly every day. We are getting updates every day on how we are getting the ex-Remploy staff into work. As I mentioned earlier, when I first came to the House 35 people had a job. Within three months, by beefing up the personal support work, we have more than quadrupled the number who get into work. We are doing a positive job and we will continue to do so.

[Dame Anne Begg (Aberdeen South) (Lab)]

May I just clarify what the Minister said about the situation in Aberdeen? A group of workers have set up a public interest company, but they have had to move out of the Remploy factory because it is now closed. The group of workers who have managed to get themselves together and continue to produce textiles have managed that despite Remploy, not because of it.

Will the Minister tell us what the Government’s position is on sheltered workshops and sheltered placements for disabled workers? Are they in favour of them or not?

[Esther McVey]

What we are in favour of is getting as many disabled people as possible—there are 6.9 million disabled people of working age—into mainstream work. If anything will help with that journey for those people, we will be in favour of it.

[Stephen Mosley (City of Chester) (Con)]

Last year, the Remploy factories made a £70 million loss. I listened carefully to the shadow Secretary of State and he gave no indication of how that loss could be made up. Has my hon. Friend the Minister received any representations from Opposition Members on how that £70 million gap can be filled?

[Esther McVey]

My hon. Friend makes a good point. No, I have heard no ideas on how that gap would be filled—it would be another spending commitment from the Opposition requiring more money. They have lots of things they oppose but no ideas about what they would actually do.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The previous Government closed the Brynaman Remploy factory in my constituency. In the space of a year, this Government have announced the closure of the remaining nine Remploy factories in Wales—different Government, same policy. Why not just agree to the Welsh Government’s reasonable request for devolved control over the Welsh Remploy sites?

[Esther McVey]

I feel that I have already answered that question in responding to the hon. Member for Rhondda (Chris Bryant). It is part of a commercial process, and should that offer be the best for the staff at Remploy, that will be the path we take. Should somebody else come up with a better offer to support more disabled people, we will obviously pursue that, because we want to see more of these people in work.

[Bob Stewart (Beckenham) (Con)]

Can my hon. Friend explain to me what special arrangements might be made for Remploy employees who lose their jobs but who were disabled in the service of their country?

[Esther McVey]

We have significant measures in place for ex-members of the armed forces which are the responsibility of the Ministry of Defence but are supported by the DWP.

[Julie Elliott (Sunderland Central) (Lab)]

The Minister did not come to the Chamber to inform the House of the closure of a number of Remploy factories, including the one in my constituency. The local trade union rep from GMB has not yet been invited into the factory, in breach of the accord. Does she feel that that is an appropriate way to treat Remploy workers, some of the most vulnerable workers in our society, who are in danger of losing their jobs?

[Esther McVey]

The hon. Lady is correct to say that I made a written statement to the House. I have met many Members, trade unions and ex-members of Remploy to figure out the best way forward. I had one-on-one meetings because, as the hon. Lady will appreciate, each of the factories is significantly different, with different commercial processes and outcomes. It makes far more sense to deal with this on an individual basis so that we can put the personalised support in place.

[Mr David Nuttall (Bury North) (Con)]

Does the Minister agree that the policy is all about helping disabled people into mainstream employment and not at all about cutting the budget for disabled employment support, which despite the difficult economic circumstances is being protected?

[Esther McVey]

I agree with my hon. Friend, and that is precisely what the Sayce review recommended—that we get as many people as possible into mainstream work. There were 2,200 disabled people working at the Remploy factories, and in the last two years alone Remploy Employment Services has put 50,000 similar people into mainstream work.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

The Minister will be aware that the two factories in Fife, in Cowdenbeath in my constituency and in Leven, are both left in limbo and unclear about their future. Will she meet me and my hon. Friend the Member for Glenrothes (Lindsay Roy) early in the new year so that we can understand better the possible options for the future of those two important factories?

[Esther McVey]

I will indeed meet the hon. Gentleman at his earliest possible convenience and mine.

[Nick de Bois (Enfield North) (Con)]

Is not the reality that there is a total consensus among disabled people’s organisations and charities that segregated employment is not really the model for the 21st century?

[Esther McVey]

My hon. Friend is correct; more and more people are calling for disabled people to be in mainstream jobs. I believe in choice and that people should choose where they wish to work, but mainstream work is what most people must aim for.

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

The facts and figures, rather than the rhetoric, in respect of former Remploy employees throughout the north-east who have so far been helped back into work are truly shocking: Gateshead, none out of 13; Newcastle, six out of 56; Ashington, one out of 26; and Spennymoor, three out of 41. Given that appalling failure to support the workers to find new jobs, does the Minister really think that now, just two weeks before Christmas, is the right time to make 35 workers at the Sunderland factory redundant?

[Esther McVey]

The hon. Lady is quite right; as I mentioned in my statement, it has been a low start, but the numbers are increasing daily and we are doing as much as we possibly can. When I was given the choice whether to announce to the work force what was happening now, or to do so later, I believed that it was necessary that everybody had as much notice as possible. This is the start of a consultation period of 90 days, followed by a further consultation for a month. It is right and fair that everybody knows what is happening and that is why I took the actions that I did.

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

Before I became an MP I used to represent Remploy workers, and I saw the special nature of Remploy factories. We lost our factory in Bradford. The hon. Member for Shipley (Philip Davies) tried to oppose that closure, as I did, and 90% of the people who were there are not in employment. If this is about consultation, as the Minister says, will she ensure, as she tracks these people, that if they do not get employment, the closure process will be stopped until a successful scheme is in place?

[Esther McVey]

The hon. Gentleman makes a fine point: when the factories were closed in 2008, no plans, process, tracking or special consideration were given to the workers. That is now changing. We are obviously starting from a stop-start position, because we did not have this in place previously. As each day goes by, the process becomes better and more people are in work.

[Mr George Mudie (Leeds East) (Lab)]

The Minister has admitted that 812 of the 960 workers are still waiting for work in the first phase. In view of the Department’s failure to get the most vulnerable people into work, should not the Minister, if she has any heart or sensitivity, postpone any future closures until the figure falls from 812 to nothing?

[Esther McVey]

I take on board what the hon. Gentleman says. Those are the numbers. I also announced today, because we are working on a daily basis, that five major businesses have come on board to support ex-Remploy staff. More people are getting jobs every day, and we will help them as best we can.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

Can the Minister give a specific answer: why has no Remploy worker from Wishaw, whose factory was closed over the summer, been helped into a job?

[Esther McVey]

I will meet the hon. Gentleman, because I do not understand why none of them has been helped into a job. The offer was there for them to come forward for personal support, and it was their choice whether to do so. More people have come forward; the number was only 800 previously, but it is now up to 961. Perhaps we could work together and he could ensure that they come forward so that we can track and support them. I believe that that is just as much up to him as it is up to me, so let us work together to help those people.

[Paul Blomfield (Sheffield Central) (Lab)]

Remploy Sheffield was described by the Minister in her statement as potentially commercially viable. Does she not accept that her efforts would be better spent securing that potential, rather than risking every job in this ill-considered sell-off, and does she not see that, given the Government’s record, her talk of securing long-term employment for those disabled workers will be viewed with nothing but cynicism?

[Esther McVey]

When we were deciding whether to proceed with stage 2, many factors had to be taken into account. With the factories that were seen as potentially viable, such as those in the hon. Gentleman’s constituency, I was told that, were I to delay, they would become more vulnerable as contracts came to an end and that it was therefore imperative that we pursued stage 2 as soon as possible, because only that would ensure that the staff had a more certain future.

[Ian Lavery (Wansbeck) (Lab)]

In the Ashington factory in my constituency, they bolted the doors, boarded the windows, ripped down the Remploy signs and cast the disabled people on to the dole queue. The promises made from the Dispatch Box for support for individuals have never materialised. Why?

[Esther McVey]

That support is in place and is increasing daily. If the hon. Gentleman has found that that has not been the case in his constituency, again, I ask him to meet me and the trade unions. I have met many other Members, and he is no different; as we all have the same intention, which is to get those people into work, I think that it would be best if we met up, so I make that offer to him here and now.

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

In spite of the tremendous efforts of the staff, and indeed increased sales, there is now a “For Sale” sign outside the Remploy factory in Wythenshawe. The Minister recently confirmed to me that only one of the 19 disabled staff who used to work there has so far been found work. Given that evidence, how can she possibly justify the closure of further factories?

[Esther McVey]

The right hon. Gentleman is right that 19 disabled people were employed at the factory, but in his constituency there are 16,700 people with disabilities, so we have to see what we are doing for all those people. I hope that he can take some comfort from the fact that last year alone Remploy Employment Services found jobs for 527 people with similar disabilities. Therefore, we have faith that we can get jobs for those 19 people.

[Ian Lucas (Wrexham) (Lab)]

The closure of these Remploy factories—I believe that they will inevitably close, just as with the closures that took place over the summer—will lead to a payment to the Minister’s Department of a capital receipt on the sale of the premises. Will she confirm that that capital receipt, which is over and above the commitment of £320 million that she mentioned, will be used for the benefit of disabled people?

[Esther McVey]

I will certainly look into whether the capital receipt can be ploughed into future work and support for disabled people. Equally, I would like the hon. Gentleman to take into account the fact that some of these sales are not freehold but leasehold, so the figures might not be as high as he expects.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

We have heard about the initiative taken by the Welsh Assembly Government. Has the Minister had a similar approach from the Scottish Government? What discussions has she had with Ministers in Scotland on trying to provide alternative employment for the many Remploy workers in Scotland who are losing their jobs, including those at the Edinburgh plant, which closed just 11 days ago?

[Esther McVey]

I have had many discussions with the Scottish Government about what can be put in place, and they are still coming forward with their plans. Across Scotland, 152 disabled people are employed in Remploy, but there are 668,000 disabled people in Scotland, and last year alone 2,550 disabled people were helped into work by Remploy Employment Services. So I do believe we can help, but the information that the hon. Gentleman seeks has not yet been forthcoming to me.

[Bill Esterson (Sefton Central) (Lab)]

Given the lack of jobs and growth in the economy as a whole, is not this the worst possible time to be pushing ahead with the closure programme? If the Government are serious about supporting disabled people, surely the way to deal with this is to make sure that the jobs are there, readily available, before any closures take place.

[Esther McVey]

I do not recognise the statistics that the hon. Gentleman is putting forward, because since the election a record number of jobs—1.2 million—have been created in the private sector. As I said, 50,000 jobs were found by Remploy Employment Services in the past two years. We can find these jobs, and that is entirely what we are aiming to do.

[Mr William Bain (Glasgow North East) (Lab)]

With unemployment among the disabled having risen by 63,000 in the past year, this Minister, sadly, has presided over an unmitigated shambles of a tendering process in the Springburn Remploy factory in my constituency, with nearly 50 disabled workers not even given the dignity of her making a written statement to this House. Does she not accept that with the Daily Record in Scotland having made very serious allegations about the propriety of the tendering process at that factory, the only way she can restore confidence in her own policy is to bring in a moratorium so that she does not further preside over the incompetent chaos affecting hundreds of Remploy workers across the country?

[Esther McVey]

It is a pleasure to debate with the hon. Gentleman again. I have had two Westminster Hall debates with him on this subject, and we have spoken on various occasions. He knows only too well, from the written and verbal replies that I have given to him, what we are doing, what is happening and what has happened in his constituency.

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

As the great-grandson of a British soldier who lost his arm in battle but worked all his life, may I say to the Minister how important it is to our national character that we provide employment for disabled people who can work and provide support for those who cannot? Will she undertake to look into the reality gap in Corby and east Northamptonshire between her rhetoric about providing support for people to get into employment and the daily distress of being harassed by Atos and finding it incredibly difficult to find employment?

[Esther McVey]

We are working with and supporting these people. I am more than happy to meet the hon. Gentleman to see what is happening. However, as I have said, our main and only priority is to get all these people into work and support them as best we can.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Minister’s view seems to be that we should equalise downwards and that, if some disabled people are not working while others are employed in Remploy factories, it would be better to move those in the second group into the first one, because at least then they would all be treated fairly. Given the failure to get the people affected by the first round of closures into work, surely the fairest thing to do now would be to stop, get it right and then move on. This is not about whether we should or should not try to get people into mainstream work; it is about whether we can get these people into work.

[Esther McVey]

Of course it is about getting these people into work. It has nothing to do with levelling down. We have taken the advice of the Sayce review and disability organisations, which have said that they want as many disabled people as possible in mainstream work. We are proceeding with that. I do not need to remind the Opposition that their failed modernisation plan, which started in 2008, was a disaster and we, as always, are picking up the pieces.

[Mr Clive Betts (Sheffield South East) (Lab)]

Since March, neither the management nor the unions at Remploy Sheffield have received any information about, or any assistance with, securing the future of their factory. I have identified some local business people who may be interested in becoming involved. They contacted Remploy HQ, but received no reply. I have tried to set up a meeting between a local Remploy manager and these local business people, but he says that he cannot meet them, because everything has to go through KPMG. Is it not time for the Minister to start cutting through the bureaucracy and provide real assistance to people who want to become involved in trying to keep Remploy Sheffield as a going concern?

[Esther McVey]

Of course we are cutting through any bureaucracy. However, a process has to be fulfilled and carefully followed. The process has only just started and a 90-day consultation will begin in January, so those people whom the hon. Gentleman has found who might be interested in taking the factory forward should now make their case and it will be taken up by the Remploy board.

[Pamela Nash (Airdrie and Shotts) (Lab)]

When the last round of closures was announced by the Government, I was visited by several of my constituents who worked at the nearby Remploy factory. They sat in my office and were absolutely devastated, and I tried to console them. Now we hear that hundreds more across the UK face the same fate. We also know that 90% of those who were sacked last time by the Government are still not in work. Will the Minister make it clear why 90% are not in work and, if she cannot, why she is pressing ahead with these closures?

[Esther McVey]

As to why the previous Government failed, that question should be put in the direction of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). I reiterate that we are working as closely as possible with these people. We have put in place personal support and that is increasing on a daily basis. We intend to get as many of these people as possible into work.

[Jim McGovern (Dundee West) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

Points of order come after statements and we have a statement now, so if the hon. Gentleman is patient he may have his opportunity ere long.

[Jim McGovern]

It is about Remploy.

[Mr Speaker]

I understand that it relates to this matter, but I am afraid that the rules do not change for the circumstance.

Winterbourne View

Monday 10th December 2012 Commons Chamber

17:04

[The Minister of State, Department of Health (Norman Lamb)]

With permission, Mr Speaker, I wish to make a statement about Winterbourne View.

The scandal that unfolded at Winterbourne View was devastating. We were all rightly shocked, angered and dismayed by the appalling abuse uncovered by the “Panorama” programme in May 2011. Straight after the programme was aired, my predecessor, my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), commissioned an in-depth review to ensure that we learned the lessons and took action. Today, I am publishing the review’s final report.

The abuse at Winterbourne View was criminal. Staff whose job was to care for people instead routinely mistreated and abused them. Management allowed a culture of abuse to flourish. Warning signs were not picked up by health or local authorities, the residents’ families were not listened to, and the concerns raised by a whistleblower went unheeded. The fact that it took a television documentary to raise the alarm speaks volumes.

The abuse that was uncovered at Winterbourne View is only part of the story. This case has made us look again at how we care for one of society’s most vulnerable groups. Winterbourne View hospital provided care for people with either learning disabilities or autism, together with either mental health problems or challenging behaviour. Around the country, at any one time, there are about 15,000 people with similar needs, about 7,000 of whom live with their families. Of the remainder, many live in the community, but about 3,400 are in in-patient settings. Their behaviour can sometimes pose a risk to themselves, and sometimes also to others. There will therefore be times when they require intensive treatment and support.

However, hospitals are not where people should live. There are far too many people with learning disabilities or autism in hospital, and they are staying there for too long—sometimes for years. We should no more tolerate people being placed in inappropriate care settings than we would people receiving the wrong cancer treatment. What is necessary is nothing short of a fundamental change of culture.

We have known for more than a decade that, with the right support, the vast majority of such people can live happy, fulfilled lives, close to their families and in their own communities. I saw that at Tower Hamlets just this morning. Much of what we know works in this area is based on the pioneering work of Professor Jim Mansell. Professor Mansell helped to set up our review and supported us right up until his death in January this year. I pay tribute to him for his tireless work in this area and for the huge contribution that he has made to improving people’s lives.

We know what change is needed; it is now time to ensure that it happens. Today, we are setting out how we will address poor care and abuse, and ensure that excellent care becomes the norm. First, we need to send a clear message to those who provide care. Owners, boards of directors and senior managers must take responsibility for the quality and safety of their services. When they fail, they should feel the repercussions.

A number of front-line staff at Winterbourne View rightly received criminal convictions, but the case revealed weaknesses in our ability to hold to account those who are higher up. We will address that. We will examine how corporate bodies and their boards of directors can be held to account under law for the provision of poor care and for any harm that is experienced by people using their services. We will also explore whether we can ensure that directors are “fit and proper persons” to oversee care, including through consideration of their record with other providers.

We will also tighten regulation. The Care Quality Commission will include reference to the best model of care in its revised guidance about compliance, and will consider it as part of the regulation and inspection of services from April next year. The CQC will also check whether all providers are following the established national guidance or similar good practice, including by carrying out unannounced inspections involving people with learning disabilities or autism and their families. Where standards are not met, it will take enforcement action.

Secondly, we will tackle the wider failings. We must stop people being placed in hospital inappropriately and ensure that services are commissioned which properly meet people’s needs. That requires the NHS and local government to work together.

All current hospital placements will be reviewed by 1 June 2013, and everyone who is there inappropriately will be moved to community-based support as quickly as possible and no later than June 2014. We will also ensure that in future health and care commissioners design services that allow people to live safely with support in their communities, with the individual and their family included in the development of their care plan. By April 2014, every area will have developed an agreed plan to ensure that that group receives high-quality care. As a result, we expect to see a dramatic reduction in hospital placements.

The report sets out specific actions that we will take to support that high-quality care, including tackling the excessive use of physical restraint, addressing concerns about the over-use of antipsychotic and antidepressant medication, and improving safeguarding arrangements. We will support a positive and open culture in which staff provide excellent care but feel able speak out when care is poor. We will support providers to achieve that, including in relation to staff training.

Creating a positive culture means listening to and involving people and their families. At Winterbourne View, families’ concerns were ignored. However, we must go further than heeding warnings or complaints and ensure that people and their families are involved at every stage of their care, and that they get the support they need, including advocacy support. We will make these changes as quickly as possible.

The organisations responsible for delivering change share our commitment to making it happen and are working nationally and locally across health and social care. A concordat signed by more than 50 organisations sets out the specific actions that each organisation commits to deliver. The NHS Commissioning Board and Local Government Association will come together to lead a joint improvement programme, with financial support from the Department of Health, to ensure delivery of the changes. I will chair a programme board to oversee that progress is made.

Winterbourne View fills us all with sorrow and anger but we are using it as a spur to make things better. Some places are already getting things right—I have seen some of them for myself, including at Tower Hamlets this morning, and the report discusses many more. They show what can, and should, be done for all, and that a better life for people with learning disabilities and autism is possible. I regard it as a national imperative that we transform care for those with learning disabilities or autism and behaviour that challenges, and I commend this report to the House.

17:12

[Liz Kendall (Leicester West) (Lab)]

I would like genuinely to thank the Minister for advance sight of his statement and the briefing I received earlier today. Members on both sides of the House were appalled and angered by the terrible incidents at Winterbourne View, and we share a determination to ensure that all necessary steps are taken to prevent a similar tragedy from happening again. Our goal must be to ensure that everyone with a learning disability or autism, including those with challenging behaviours, receives high-quality, decent and humane care and support, and that we finally end the practice of sending people to long-stay institutions, far away from their family and friends.

The Minister has announced a number of welcome measures that are a step in the right direction, but I remain concerned that some of the proposals are not clear or strong enough to guarantee the fundamental changes that people with learning disabilities urgently need. The NHS mandate published two weeks ago states there should be

“a substantial reduction in reliance on inpatient care.”

Can the Minister give a figure for that reduction? Without one, that laudable aim will be open to such wide interpretation that it risks appearing meaningless. Similarly, the Government say they want every local area to provide “appropriate” care and support. Will the Minister tell the House who will define what care is “appropriate” and how that will be measured?

How will the Minister ensure that all local commissioners have the necessary skills to make these changes? That was a problem with 150 primary care trusts, yet in future there will be 212 clinical commissioning groups. Those can, of course, draw on expertise in local councils, but the authorisation process for CCGs does not even mention learning disabilities as an area in which competence is required. If this is such an urgent national imperative for the Government, will the Minister explain why that is the case?

Some parts of the country continue to use long-stay institutions because they have not developed alternative care in the community and at home. In a time of constrained resources, when we need to make the best use of taxpayers’ money, there should be one budget for people with learning disabilities, not separate budgets for NHS and council care. Will the Minister explain how he will make that happen on the ground? For example, will he require the NHS Commissioning Board to instruct CCGs to provide funding to local councils if they are slow to do so or if they refuse?

The serious case review of Winterbourne View said that light-touch regulation by the Care Quality Commission was not appropriate for closed establishments, and that they should be treated as high-risk institutions, requiring frequent, unannounced probing investigations. The review says that the investigations should involve speaking to residents’ families and patients, and in particular to people who have left the institution, who may feel more able to speak out. The CQC recently completed a focused programme of inspections of long-stay institutions. Will that specific programme continue along the lines the serious case review recommends? Will the Government, in their review of the use of restraint, consider banning t-supine restraint, as the serious case review recommends?

One of the most disgraceful aspects of Winterbourne View is that vulnerable people were neglected and criminally abused while the hospital’s owners, Castlebeck, charged huge fees and made huge profits. The serious case review says that Castlebeck made decisions about profitability, including shareholder returns, over and above decisions on the effective and humane delivery of treatment. The average weekly fee for residents at Winterbourne View was £3,500—the fee rose to £10,000 for one patient. The review could not determine how much of that money went back into the hospital and how much was creamed off for profit because of the company’s complex financial structure—Castlebeck is owned by private investors based in Jersey and Geneva. That has made it virtually impossible to hold the company to account. Will the Minister confirm that the company has so far failed to meet two of the serious case review’s key recommendations —that it should fund therapeutic services for all ex-Winterbourne View patients, and that it should pay for the costs of the serious case review, which have so far been borne entirely by the taxpayer?

I welcome the Government’s commitment to examining how corporate bodies and their boards of directors can be better held to account. As a first step, will the Minister consider requiring private companies to publish the names of their owners, the members of their boards, and the details of their financial structures, before they can be licensed and registered to provide publicly funded care? The excuse that such information is too commercially sensitive should not be acceptable when the care of vulnerable people is at stake, and when it is paid for using substantial amounts of taxpayers’ money.

How we care for the most vulnerable people is the hallmark of a decent society. I do not doubt the Government’s commitment to addressing this issue. I hope they listen to our concerns and strengthen their proposals, so that people with learning disabilities get the decent and humane care and support we would all wish for our families and friends.

[Norman Lamb]

I thank the shadow Minister for her contribution and appreciate the welcome she gives for the main thrust of the Government’s response. This is a moment when everybody must come together to be clear that a change of culture is necessary from top to bottom. This is not a party political issue. The culture must change, and everyone within the system—from top to bottom—must recognise their personal responsibility to achieve that.

The shadow Minister raised a point about the mandate. One very good thing about the mandate is that it gives us accountability and transparency in the system for the future, and enables us to hold the NHS Commissioning Board and other parts of the system to account on delivering what is in it.

The hon. Lady asked how we will measure success in relation to the reduction in numbers in long-stay institutions. There must be a focus on assessing an individual’s personal care needs—that is what counts. The arbitrary setting of a target on numbers would be completely inappropriate when we should be focusing on the needs of individuals. The guidance we have received is that while there are 3,400 people in in-patient facilities of one sort or another, we are talking about probably reducing that down to 300 or 400 people. That is the best assessment that has been made, but I stress again that it must be based on assessment of individual needs.

The hon. Lady rightly makes the point about the skills of commissioners. One of the big failures has been that of commissioners properly to look after the interests of highly vulnerable people. The programme, which will be led by the Local Government Association and the NHS Commissioning Board and funded by the Department with between £2 million and £5 million of support, will be there to provide support and guidance to ensure that local commissioners get this right. We should applaud the parts of the country where this is being done brilliantly at the moment. They can demonstrate best practice to areas that need to change.

The hon. Lady asked whether the Commissioning Board will hold CCGs to account. The answer is, absolutely. This is part of the transparency of the new system and they must deliver on what they will be required to do.

I agree with what the hon. Lady said about the budget. The report makes it clear that the starting point should be that pooled budgets are the appropriate way forward. This is patchy at the moment. If there are not pooled budgets, they should explain why. In my view, there is no good justification for not pooling the resources of the NHS and social care to ensure the best and most appropriate care for individuals. There is also a duty for the two sides—social care and NHS—to work together. The health and wellbeing boards help to bring them together, and that is valuable.

The hon. Lady asked about Care Quality Commission inspections. Unannounced visits will continue, and they will include people with learning disabilities and their families, so that their perspective is gained. This is not a time-limited programme—it will continue. I think that the CQC recognises that this is an area that requires focus because of the vulnerability of the individuals concerned.

On physical restraint, we will look at all elements, including those mentioned by the hon. Lady, so that the best possible guidance is given to ensure that the excessive use of restraint, which currently happens in too many places, comes to an end.

On Castlebeck, I absolutely agree that it should consider financial support for the costs incurred following the scandals uncovered in its care settings. The hon. Lady rightly points out the responsibility that goes with charging an average of £3,500 per week per patient. One of the great failures of the current system is that there is not sufficient corporate accountability to ensure that people are held to account when things go wrong. When we consider proposals to address that lack of corporate accountability, we will look at the hon. Lady’s transparency proposal on publishing a lot more information about financial structures. Indeed, in the consultation we announced a fortnight ago on the follow-up to Southern Cross, we are proposing that there should be transparency regarding financial structures and that that information is shared to ensure that we avoid being caught by surprise, which is what happened under the system in operation when Southern Cross crashed, leaving many people in an unacceptable state of anxiety.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

May we have an assurance, first, that local agencies, such as the police and local government, have to take a large chunk of responsibility for this situation occurring in the first place and, secondly, that there will never be a repeat of the situation where the local council can fail to pick up on up to 40 alerts over several years? That could have avoided much of the pain and suffering at Winterbourne View.

[Norman Lamb]

I agree absolutely. One of the great scandals of this whole saga has been the extent to which local authorities and primary care trusts let people down. The father of a patient at Winterbourne View told me how the concerns he raised were ignored, how he watched as his son became more zombie-like because of the use of antipsychotic drugs and how he felt guilty himself—how shocking that a parent ends up feeling guilty through no fault of his own. He was powerless to do anything. It is shocking that public authorities let people down in that way. That is why I say that everyone in the system has to step up to the plate and recognise the need for a complete change of culture to recognise that everyone with learning disabilities has exactly the same rights as the rest of us.

[Grahame M. Morris (Easington) (Lab)]

I thank the Minister for his statement and hope that he will reflect on some of the questions posed by my hon. Friend the Member for Leicester West (Liz Kendall), who made a powerful case for private providers being subject to freedom of information requests—I draw his attention to early-day motion 773, which embodies that principle.

On the failings that brought about this terrible tragedy, the Care Quality Commission was overly concentrating on process rather than its main job of ensuring that the required standards were met and looking at quality and risk profiles. There was a big disconnect between the perceptions of carers and families and the views of the CQC. Fundamentally, unless we address the lack of resources, will we not see a series of these disasters in the future?

[Norman Lamb]

In the aftermath of Southern Cross, we have seen the need for much greater transparency in these large corporate bodies to ensure that we know exactly what their financial structures are like and where the risk exists. The hon. Gentleman mentioned funding. The great scandal is that we are spending vast sums of public money putting people at risk and into inappropriate care settings. Visiting places such as Tower Hamlets, we discover that the right care package for individuals—most often, supported living in their own community—is much cheaper and gives them a quality of life they never experienced in these institutions. This is not about money, therefore, but about the system stepping up to the plate and ensuring that individuals are respected in their own right.

[Paul Burstow (Sutton and Cheam) (LD)]

The Minister is absolutely right that transparency is essential, but there is also a recognition—I think—that that is not sufficient; accountability is essential as well. In this case, the company, Castlebeck, has hidden in the shadows and left everyone else to take the blame. I welcome what he has said about corporate responsibility, therefore, but I urge him—and commend to him—to make a much closer examination of the corporate legal framework to ensure that there is a corporate legal offence. It is not good enough for the thugs who did this to be in the dock and receive a criminal conviction; the company itself has a criminal responsibility, and it should be held to that standard and brought to court as well.

[Norman Lamb]

I commend my right hon. Friend for the work he did on this subject. When I started this job, it struck me that there was an absence of effective corporate accountability in the law and that that had to be addressed. I was determined to ensure that the Government response addressed that issue head on. In doing that, we need to look both at the regulatory framework—issues such as whether there could be a fit-and-proper persons test for those on the boards of companies—and at the criminal law. It is striking that in the Winterbourne View case the authorities determined that it was not possible, under existing law, to bring prosecutions. I am absolutely clear, however, that responsibility rests at the top of the company for facilitating this sort of outrage. That is why the law needs to change. We need to look both at criminal offences and the regulatory framework.

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

May I press the Minister on one aspect? Will he look much more closely at the role of the third sector, particularly charities, in providing services? Hollybank school and community in Mirfield in west Yorkshire, close to my constituency, does a brilliant job. Does he recognise that, in considering the report, it is the quality of management that one worries about and the fact that the most vulnerable people in our society are so often looked after by poorly trained people on the minimum wage working 12-hour shifts? That is often at the heart of the problem.

[Norman Lamb]

I thank the hon. Gentleman for that question and completely agree that we have to address the issue of skills. It is worth pointing out that there are some fantastic providers in the voluntary sector, and in the private sector as well. We should applaud that and recognise that there are many well trained people on low wages providing a fantastic quality of care, but there are also places where that is not the case. That needs to be addressed.

I absolutely agree with the hon. Gentleman that we should look closely at the voluntary or not-for-profit sector. I had a meeting recently with the head of Shared Lives, an organisation that places people with learning disabilities into people’s homes. Surprise, surprise—when people are treated with dignity and treated as human beings, their behaviour improves and sometimes all the complex problems subside. There is an awful lot we can do. In the new year I will bring together the providers of the best care available so that we can learn the lessons from them.

[Sir Tony Baldry (Banbury) (Con)]

As patients had come from different parts of the country to Winterbourne, there was a sense that they had got lost in that locality. Whatever happens, it is a tragedy that it took a television programme to discover all this. We are now going to have health and wellbeing boards and HealthWatch. Can my hon. Friend tell the House how, between them, they can ensure that they inspect and have a grip to ensure that something like this never happens in my county of Oxfordshire? It has never happened there because the structures of local government and health and social services are constantly monitoring and inspecting whatever is happening in our areas, irrespective of whether they are delivering health or social care.

[Norman Lamb]

I thank my hon. Friend for his question. He is absolutely right. The new structure provides far greater local accountability than we have ever had. One of my great criticisms of the old primary care trusts is that they are, in effect, completely unaccountable to their local communities. Health and wellbeing boards scrutinising what clinical commissioning groups and the local authority are doing can be very powerful. He also mentioned HealthWatch. Like its predecessor organisations, the local involvement networks or LINks, it will have the power to go into all care and health settings and inspect what is going on, often behind closed doors. We encourage HealthWatch to use those powers to shine a light on what is happening in some of those places.

[Helen Jones (Warrington North) (Lab)]

The Minister has rightly referred to the amount of money paid for patients in Winterbourne View, but does he also recognise that good-quality care in a community is also expensive and requires a lot of highly trained staff? Given the cuts to local authority budgets, is he convinced that sufficient resources are available, even if budgets are pooled? When he knows how many patients need to be transferred back into the community, will he commit to come to the House to make a statement on whether the right resources are available?

[Norman Lamb]

I thank the hon. Lady for that question. What was striking when I visited Tower Hamlets this morning and talked to the leaders on the health and local authority sides was that, despite being the third most deprived borough in the country, Tower Hamlets is one of the lower spenders on institutional care because it is doing things the right way. Tower Hamlets has not referred a single person from the borough to an assessment and treatment centre for three whole years. Tower Hamlets has demonstrated not only that that is possible, but that it often ends up costing much less to provide the right care in the community—[Interruption.] Well, that is what the borough leaders find. That is what I have been told by them and by many other people in the sector. An individual should have the care that they need, and if the cost of that package in the community is substantial, it should be met. We should never compromise on that. All I am saying is that the overall cost of providing the right kind of care in the community often looks lower, when compared with those institutions in which the cost is extraordinarily high—as much as £3,500 per week per patient.

[Rehman Chishti (Gillingham and Rainham) (Con)]

The Minister mentioned unannounced inspections. Will they involve speaking at random to patients at the centres? Linked to that point, some hospitals around the country have a whistleblower policy that allows people who work in them and others to take their concerns to senior officials in confidence.

[Norman Lamb]

I thank my hon. Friend for his question. I am quite sure that those inspections will involve talking to the people in those settings. The fact that the Care Quality Commission is saying that it will involve people with learning disabilities and their families in those inspections will help to ensure that they have a human face. My hon. Friend also mentioned whistleblowing. It is essential that individuals feel able to blow the whistle when they see examples of abuse or neglect. Indeed, the Government have funded a helpline for any whistleblower in either the health or the care setting to ensure that people can always get access to guidance on how to go through the proper process of blowing the whistle on unacceptable standards of care.

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

I welcome many of the steps that the Minister has announced today in response to the shameful scandal at Winterbourne View. He says that he wants those who are high up in the organisations to be held to account. Does he therefore accept the argument put forward by my hon. Friend the Member for Leicester West (Liz Kendall) that now is the time to regulate for the best business standards, as well as for the best care standards? He also says that he wants to use regulation to secure higher and tighter standards. Will he ensure that, in putting those standards in place, any regulation of physical restraint deals not only with the excessive use of such restraint but with the appropriate use of the best techniques and with the best training?

[Norman Lamb]

I thank the right hon. Gentleman for his welcome for the broad thrust of my proposals, and for his questions. On standards of business in the sector, it strikes me that the levels of corporate accountability seem to be significantly lower in this sector than in many others. How bizarre is that, in a sector in which the protection of individuals is absolutely vital? In our response to Southern Cross and to this case, we will require owners to adopt a much more transparent approach and to disclose details of their financing arrangements. We are introducing that level of engagement and transparency as well as addressing the need for accountability. The right hon. Gentleman also asked about restraint, and we will certainly look at the appropriate methods of restraint. It should really be used only for the protection and safety of an individual or of others. It should not be used for chastisement or punishment, as appears to have been the case in some locations. That is completely unacceptable.

[John Pugh (Southport) (LD)]

One of the big problems is the fact that many local authorities house vulnerable people at a considerable distance from their families. What element of the proposals will constrain that unfortunate practice?

[Norman Lamb]

I thank my hon. Friend for that question. He is absolutely right that one thing uncovered, both at Winterbourne View and in the Care Quality Commission survey of similar institutions, was that people were sometimes placed hundreds of miles away from their families. That still continues; that is what we have to address. My hon. Friend asks about what in the proposals will address that and ensure that it does not happen. Every part of the system is signed up through the concordat to changing what has been an unacceptable practice. People will be held to account. I said in my statement that I will chair a programme board throughout this period of change, and we will publish regular updates so we can, in a sense, hold to account every primary care trust or clinical commissioning group and every local authority that fails to change in the way expected.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I welcome the Minister’s pledge—made twice during his statement—that the Government will go ahead with a review of those “inappropriately placed” and to make it available by 2014. Will there be any element of advocacy during the review, including that endorsed under the Disabled Persons (Services, Consultation and Representation) Act 1986? Finally, do the Government think it possible—if not by this means, by other means—to consider the fairly large number of people inappropriately placed in prison?

[Norman Lamb]

I thank the right hon. Gentleman for his important questions. First, we want to ensure that advocacy is available to help those families and individuals, ensuring that they are placed in appropriate settings and away from these long-stay institutions that we all find completely unacceptable. I very much agree with him on that, and I find myself in agreement with him again on prisons. We shall come forward next year with some clearer proposals on approaches to diversion—assessing someone’s needs before they end up in prison, diverting them, if at all possible, to much more appropriate settings.

[Andrew Selous (South West Bedfordshire) (Con)]

I was not sure I heard the Minister correctly when he said that the average fee was £3,500 a week, which is £182,000 a year. Is it not possible to pay some of the caring staff slightly more and demand not only the highest level of skills, but the highest level of compassion for that level of fee from the state?

[Norman Lamb]

I thank my hon. Friend for that question. He is absolutely right that an extraordinarily high sum was being paid to put people at risk of abuse —and to be abused, as it turned out in Winterbourne View. Pay rates are not ultimately the responsibility of Government, but one would hope that responsible organisations look to train their staff to a high standard—that is absolutely a prerequisite and they will be held to account by the Care Quality Commission for proper training—and, wherever possible, to provide better pay rates so as to ensure that people are rewarded for the incredibly important work in our care sector.

[Mrs Anne McGuire (Stirling) (Lab)]

Before I became an MP, I worked with parents of learning disabled adults to establish supported community care homes, as those parents would have done anything rather than allow their adult children to go into institutional care. I welcome the Minister’s comments today. There is an emphasis on process, which is important, but does he agree that there is a challenge in the wider cultural sense? As long as we do not give those with learning disabilities the respect to which they are entitled as equal members of society, we almost create an environment in which people think they can with impunity do the sort of things they did in Winterbourne. Will the Minister work with the Minister for Disabled People, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) and look at how we can challenge those attitudes, which are sadly still around in the 21st century?

[Norman Lamb]

I thank the right hon. Lady for that. She is absolutely right in what she says about institutional care. I keep mentioning Tower Hamlets, as it was rather inspirational to visit and see how things are done there. I was told that Tower Hamlets has one of the lowest rates of children going into care because of the support for families that it provides, preventing that from ever being necessary.

As for the right hon. Lady’s second point, she is absolutely right: this is moment that demands a change of culture, not just in the health and care system but in society as a whole. There must be a change in all our attitudes. We will make progress only if we understand the fundamental point that someone with learning disabilities has exactly the same rights as anyone else, and should be treated with dignity and respect.

[Glyn Davies (Montgomeryshire) (Con)]

We are for ever reading in reports such as this about poor behaviour in social care. In the last year or so, we have had Southern Cross and then Winterbourne View, which is probably the most shocking example of all. We greatly welcome the measures that the Minister has announced, but can he tell us what arrangements exist to enable us to share the knowledge that we have gained and the lessons that we are learning with the Welsh Government? I am sure that there are very good examples that we can pass over Offa’s Dyke, and that Wales has very good examples from which we can learn.

[Norman Lamb]

I know that some people from Wales were placed in Winterbourne View. This issue is important and relevant to Wales, Scotland, England and Northern Ireland. I would encourage officials of the devolved Administrations and the United Kingdom Government to liaise closely in order to ensure that the lessons that we are learning here can be applied elsewhere, and that good lessons from Wales and elsewhere can be learned in England.

[Mr George Mudie (Leeds East) (Lab)]

The Minister is a very humane man, and I entirely accept the fine things that are in the report. However, we are ultimately responsible for the proper treatment of vulnerable people, both in hospitals and in care homes, and fine words go only halfway. We have seen people in that sector take advantage of and abuse vulnerable people who cannot speak or fight back.

One of the key points raised by my hon. Friend the Member for Leicester West (Liz Kendall) concerned unannounced inspections, which the Minister seemed to suggest were a matter for local authorities or other public bodies. Can he tell us whether real resources will be put into that part of the operation? Whatever has been signed up to, vulnerable people have been treated so badly that we should be ashamed. If we do not provide resources that will enable us to know that someone independent has the power to enter premises at any time or on any day and inspect the treatment of vulnerable people who are in our care, we cannot be taking this issue seriously.

[Norman Lamb]

Let me respond first to the hon. Gentleman’s observation about fine words by saying that this is just the starting point. It does not do the job; it merely sets out the scale of the ambition that is necessary to address a national scandal. It is good that all parts of the system are signed up to it, because that gives it a better chance of success. I will chair a national programme board that will keep a close watch on what goes on and hold every part of the system to account.

The hon. Gentleman spoke of the horrors of what goes on in some care homes and in hospitals, but we must remember the horror of family members who went to local authorities or the NHS to complain and were ignored. That, in a way, is just as scandalous, and it must be addressed.

I have talked to the chief executive of the Care Quality Commission, David Bearn, who has confirmed that he has enough resources to maintain a programme of unannounced inspections. They will continue; they must continue, and they must include people with learning disabilities and their families. I mentioned the role of HealthWatch earlier. In every local area, its representatives will have the power to go into these places to see for themselves what is going on behind closed doors. That too will introduce a new accountability.

The final point I would make is that we are developing the idea of online quality indicators for every care and health setting, with user reviews so that individuals who have been in those care settings and their families can give their views. That scale of transparency can be transformational in driving up standards.

Point of Order

Monday 10th December 2012 Commons Chamber

17:50

[Jim McGovern (Dundee West) (Lab)]

On a point of order, Mr Deputy Speaker. First, may I apologise for jumping the gun earlier? You were not in the Chair at the time, but I had not realised there was a statement to follow the two urgent questions, and as my point of order is about Remploy, I wanted to give the Minister concerned, the hon. Member for Wirral West (Esther McVey), who was present at that time, the opportunity to respond.

I seek your guidance, Mr Deputy Speaker. Last Tuesday afternoon I attended a Westminster Hall debate on Remploy, and I invited the Minister to come to Dundee to see the magnificent work being done by the work force at the Remploy factory in the city. The Minister stood up, cheerily smiling, as is her disposition, and accepted the invitation, saying she would happily come to Dundee. The Dundee press picked up on that and covered it the next day, and the Remploy work force took it as suggesting positive news for their factory.

However, 24 hours later the Minister announced that the Dundee factory would be closing. It beggars belief that she did not know on Tuesday what she was going to announce on Thursday. I have my own views on the morality of that, but was she guilty of breaching any procedural protocol either by misleading Parliament or withholding information that should have been made known to me? She could have said, “I’ll meet you privately after this debate,” or “There will be a statement on Thursday.” There were numerous ways in which she could have let me know that news, but when we learned the news on Thursday it came as a bombshell to me and the work force.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Gentleman for apologising for jumping the gun before the statement and also thank him for the point of order. It is not for the Chair to make a judgment on the question he has asked. I know he is passionate about this issue, and that he attended the Westminster Hall debate he mentioned and the urgent question on Remploy that the Speaker allowed today. There will be other opportunities for him to raise this issue with Ministers in the coming days and weeks. He knows the devices that are available to him, and he has put his discontent on the record.

Financial Services Bill (Money) (No. 2)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment out of the Consolidated Fund of any increase attributable to the Act in the expenditure which in urgent cases is payable out of that Fund under the Banking Act 2009.—(Greg Clark.)

Financial Services Bill (Ways and Means)

Monday 10th December 2012 Commons Chamber

Motion made, and Question proposed,

That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment into the Consolidated Fund of sums in respect of penalties imposed under the Financial Services and Markets Act 2000 or the Banking Act 2009.—(Greg Clark.)

17:52

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am conscious that time is moving on apace, but I have a quick question for the Minister. Under this motion, the destination of proceeds arising from fines imposed on financial services companies will henceforth not solely be the financial service regulators; it will also be the Consolidated Fund. What proportion of fines will still go to the regulators and what proportion will go to the Consolidated Fund, and is there a note on the methodology by which the regulators calculate the level of these fines? Barclays was fined almost £60 million for the LIBOR scandal in the summer, but there are issues in respect of how fines are set. Some £150 million has been levied so far this year, and it is understandable that these sums ought to come into the wider public purse, but will the Minister briefly say how that will happen?

17:54

[The Financial Secretary to the Treasury (Greg Clark)]

I am grateful for the chance to explain that. There is not a formula, because the funds that come to the Exchequer are net of the enforcement costs the Financial Services Authority incurs. In any given year, things would depend on what has been spent and what revenues come in, therefore.

Question put and agreed to.

Financial Services Bill (Programme) (No. 4)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Financial Services Bill for the purpose of supplementing the Orders of 6 February, 21 February and 23 April 2012 (Financial Services Bill (Programme), Financial Services Bill (Programme) (No. 2) and Financial Services Bill (Programme) (No. 3)):

Consideration of Lords Amendments



1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion at 10.00 pm.



2. The proceedings shall be taken in the order shown in the first column of the following Table.



3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

Financial Services Bill

Monday 10th December 2012 Commons Chamber

Consideration of Lords amendments

[Mr Deputy Speaker (Mr Nigel Evans)]

I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203. If the House agrees to them, I shall ensure that the appropriate entry is made in the Journal.

Clause 1

Deputy Governors

17:55

[The Financial Secretary to the Treasury (Greg Clark)]

I beg to move, That this House agrees with Lords amendment 1.

[Mr Deputy Speaker]

With this it will be convenient to consider the following:

Lords amendment 2.

Lords amendment 3, and amendments (a) and (b) thereto.

Lords amendments 4 to 15.

Lords amendment 16, and amendment (a) thereto.

Lords amendments 17 to 21 and 148 to 178.

[Greg Clark]

It is a pleasure to be muscling in at this late stage of our proceedings on the Bill, but I feel it is a bit of a cheek to do so given that many Members have laboured many hours over these clauses in Committee—

[Chris Leslie (Nottingham East) (Lab/Co-op)]

indicated assent.

[Greg Clark]

The hon. Gentleman was one such Member.

We are in agreement with all their lordships’ amendments, and this first group demonstrates that the Government have listened to Parliament’s concerns and have amended the Bill accordingly.

The governance of the Bank of England was one area of concern, and it was debated at length in this place and the other place. The Government agreed that the Bank’s expanded responsibilities warranted taking another look at its governance arrangements. The Treasury Committee produced an excellent report on this subject just over a year ago—I note that the Committee Chairman, my hon. Friend the Member for Chichester (Mr Tyrie), is present—recommending that the Bank’s non-executive directors be given a greater role in scrutinising the Bank’s work, including the ability to commission and publish reviews of the Bank’s performance.

The current version of the Bank of England Act 1998 does not actually describe the non-executive directors as non-executive, but various amendments before us in this group will finally clarify the terminology in respect of the Bank’s court of directors by distinguishing explicitly between the non-executive and executive members.

On more substantive governance matters, amendments 3, 6 to 9, 148, 149, 151, 152, 154, 155, 169, 172 and 173 fulfil the substance of the Treasury Committee’s recommendations in this area via the creation of a powerful new oversight committee made up of the non-executive directors of the Bank’s court of directors. The oversight committee’s remit covers the entirety of the Bank’s objectives and strategy. This remit is already broad enough to allow the oversight committee to look at any aspect of the Bank’s work it believes appropriate to examine, including the effectiveness of its crisis management co-ordination with the Treasury, as suggested in an amendment proposed by the hon. Member for Nottingham East (Chris Leslie). I am sure he will comment on that.

The oversight committee will have a statutory right to access the meetings and papers of the Financial Policy Committee and the Monetary Policy Committee, and it will have the power to commission reviews of the Bank’s performance from external experts or from the Bank’s own policy makers, and publish the reviews and monitor the Bank’s response to them. In line with the Treasury Committee report, these performance reviews will be undertaken retrospectively. The Committee recommended that they should take place at least a year after the period to be reviewed, in order to avoid second-guessing at the time of the policy decision. Just to be absolutely clear, the oversight committee’s remit to review the Bank’s performance is limited to the Bank’s objectives and strategy only; it does not extend to the Prudential Regulation Authority. The only role of the oversight committee in respect of the PRA is to determine the remuneration of the members of the PRA board. Because the PRA will be operationally independent in carrying out its statutory functions of regulation, it will be directly accountable to Parliament. The Government expect that the Treasury Committee will wish to summon the senior PRA executives and, where necessary, the non-executives to account for the PRA’s actions.

Amendment 167 will require the court of directors to publish a record of each of its meetings, fulfilling another of the Treasury Committee’s recommendations from its report. We have also listened to concerns in respect of the Financial Policy Committee, which focused on the role of economic growth in its decision making and the balance of its membership. Amendment 10 gives the FPC a secondary objective to support the Government’s economic policies, including growth, which will sit alongside existing requirements, such as the brake on the FPC taking action that would damage long-term sustainable growth. Amendments 4, 5, 150, 156 and 157 aim to rebalance the FPC by removing one of the Bank members, leaving a voting membership of 10 people—five Bank members and five non-Bank members.

Amendments 16, 17 and 19 to 21 go further to increase the transparency and accountability of the FPC. The FPC will be required to prepare an explanation of each of its actions, setting out publicly the reasons for its decision to take the action and its reasons for believing that the action is compatible with the FPC’s objectives, including to contribute to economic growth, and the various factors to which it must have regard, including proportionality. The FPC is also required to include an estimate of the costs and benefits of the action, where it is reasonably practicable to do so.

Amendment 17 requires the FPC to review the decisions that it has already taken in order to consider whether the actions are still necessary, or whether they should be revoked or removed. That will help to ensure that the FPC’s directions and recommendations do not remain in place for any longer than is necessary. The FPC must publish the explanations of its actions and a summary of its reviews in the next financial stability report.

The remainder of the amendments in this group represent further agreements made in the House of Lords in response to points raised in debate. Amendment 168 makes it absolutely clear that the Chancellor must always appoint a non-executive member of the court to be its chair. Amendments 174 to 176 continue the immunities from liability for damages that the existing regulators have and extends them to the new regulators. The Government have made amendments in the House of Lords to ensure that if the PRA or FCA commissions the other regulator, or the Bank of England, to carry out an investigation or produce a formal report on its behalf, the body that has been commissioned is also covered by the immunity.

This group of amendments represents a significant package of changes to the legislative framework for the Bank and the FPC, in response to points raised both in this House and in the House of Lords, and I commend it to this House.

[Chris Leslie]

It is a great pleasure to welcome the new Minister to these rather long-winded proceedings. I believe we started on this Bill back in February, but he should not worry, as this is shortly to be followed by the banking reform Bill and possibly even a banking standards Bill—to be determined—so we will probably have plenty more opportunities to chew over these issues then. It is a little preposterous to have a knife coming down at 7 o’clock, by which time we have to put the Question on 150 or so of these Lords amendments. That gives us about 25 seconds per amendment [Interruption.] I will get on with it; I lost about a dozen amendments just then.

That is why we have tabled several amendments to those Lords amendments—you will be impressed with that, Mr Deputy Speaker—and I wish briefly to explain why we have done so. The first Lords amendment that we are seeking to amend is Lords amendment 3, which, as all hon. Members here know, deals with the creation of an oversight committee within the Bank of England as a sort of subset of the court of directors, where it is to have a reviewing and, supposedly, a scrutinising role. There is a problem: the oversight committee has a series of responsibilities, not one of which is set out, in overseeing what the Bank of England does. The committee has a set of responsibilities to monitor, to review procedures and to conduct performance reviews, but all of that is retrospective—it looks backwards, not forwards. May I gently suggest to the Minister that it might be more appropriate if he were to call this a “hindsight committee” rather than an oversight committee, because as things stand I do not think there is a sense in which this is a proper check and balance within the governance of the Bank of England?

Why does that matter? It matters because the Government are giving phenomenal new powers to the Bank of England within our economy as an overarching financial regulator. The Minister says that the PRA is independent and will report to Parliament, but let us be honest: this is a creature of the Bank of England and the Bank will control very much what happens in the regulatory framework. Although we welcome the concession that was made to create an oversight committee, people have misgivings—we will probably hear about some of them, perhaps from members of the Treasury Committee, in a moment—that there is still a very hierarchical and centralised set of governance structures in the Bank of England.

We therefore need to make sure that this crucial verb “oversee” is included in the oversight committee’s remit. That would help to shift the balance of power between non-executives and executives in the Bank of England framework just that bit more. These are important lessons of governance, certainly from the private sector. While we are moving towards that executive and non-executive balance, it is important that we recognise that the Bank of England is being dragged into the 21st century. If we are taking the opportunity to do that in legislation, making that particular change would be very welcome.

The other amendment we wish to make to Lords amendment 3 relates to crisis management. As I said, the Bill gives massive new powers to the Bank of England, but in a crisis there will be very little time to figure out and design standing orders, or to work out arrangements for who will meet whom and for how decisions can involve the right people. You will recall, Mr Deputy Speaker, how during the global financial crisis crucial decisions affecting billions of pounds of taxpayers’ money and whether people could access the cash machines were made in the space of hours over weekends. In hindsight, it would have been nice to have had a carefully planned set of arrangements, and this Bill needs to learn the lessons from that. We are concerned that the crisis management arrangements are still thin and inadequate. We have suggested that if there is going to be an oversight committee in the Bank of England, the Bill needs to set out explicitly that it is to have a duty to ensure the adequacy and effectiveness of arrangements with the Treasury for crisis management.

There is no role for the new financial conduct authority in the drafting of the arrangements. Apparently it does have a veto, but it is not part of the drafting of that memorandum of understanding. The Government are still resisting proposals to ensure that deputy governors and the chief executive of the FCA can consult directly with the Treasury in circumstances where there might be differences of opinion. Given the import and the size of the FCA, the PRA and the FPC within the Bank, it is important that the deputy governors have an ability and a right to talk to the Treasury, so that everything is not hidden and suppressed within one view of the Governor of the Bank of the England.

There is a very bizarre set of provisions excluding the ability of the memorandum of understanding to make provision about the relationship between the Bank of England and the PRA, which goes to prove that the PRA is very much a creature of the Bank. It also suggests that the Governor will have powers to suppress the voice of the PRA in a crisis. Shockingly, there is no parliamentary approval process for that MOU; no statutory instrument arrangement has been made, as I understand it. The crucial paragraph of the MOU that deals with what happens in the white heat of an emergency simply says, “Oh well, there will be ad hoc or standing committees just to sort these things out.”

That is not good enough. The whole of best practice in preparedness and in emergency and contingency planning would suggest that now is the time for Her Majesty’s Treasury and the Bank of England to sit down and calmly and methodically work through what would happen in those circumstances. There should be some draft standing orders to pre-empt those scenarios.

[Mr Andrew Tyrie (Chichester) (Con)]

The hon. Gentleman will recall, of course, that the poorly drafted MOU that lay behind the tripartite agreement certainly played a role in the lack of understanding of how to handle the crisis. Does that not point all the more towards a need to think things through very carefully now? That MOU was scrutinised in Parliament; I was in Committee at that time and most of the points made were largely ignored. Surely now, while we have the time, we should think through what is required in such an MOU and take the opportunity to consider that in Parliament.

[Chris Leslie]

I entirely agree with the Chairman of the Treasury Committee, who is very knowledgeable and has some strong views on these questions. It is a pity that when we flick through the luminous list of Lords amendments, we find a gaping hole on those crisis management arrangements, where none was accepted by the Government. Some clauses in the Bill deal with that set of scenarios, and it is noticeable that such provision is not included there. That is in part why we have sought to amend Lords amendment 3, as one of the few areas where we can make an amendment is in respect of the role and duties of the oversight committee. I accept that that is only half of the scenario, as we also want Her Majesty’s Treasury to have a process for reviewing the adequacy and effectiveness of its arrangements with the Bank of England, but we do not have the opportunity today to propose such an amendment.

If we are to have an oversight committee, it should be able to play a role in ensuring that the crisis management arrangements are up to scratch and that there is joined-up thinking between these variously important branches of governance to ensure that someone at the Bank of England is tasked with thinking these things through very carefully.

[Alison McGovern (Wirral South) (Lab)]

Does my hon. Friend agree that it is incredibly important that Parliament gives its view on such issues, given the weight of academic insight into the arrangements in place at the time of the crash? We are trying to learn some of the lessons from that, and one of the key lessons is the importance of rules and thinking them through ahead of the scenarios, since it is literally impossible to know what the next unforeseen shock might be and where it might come from.

[Chris Leslie]

My hon. Friend is correct that this is about learning the lessons of preparedness and of what level of forward thinking we can undertake at this point in time. It is still amazing—I know she agrees—that although the FSA conducted a comprehensive review of its role in the financial crisis and the Treasury and Government did the same, we have to this day still not had a comprehensive review by the Bank of England of its role in the financial crisis. That is amazing. It begrudgingly had three minor reviews dragged out of it—it was like getting blood out of a stone—considering small particular areas where it had some failings. Those reviews concluded that there were serious issues to be addressed, and one of the individuals conducting one of those three small arrangements talked about the fact that the governance arrangements in the Bank of England were still too centralised. I hope that the Government will think more carefully about crisis management provisions.

[Alison McGovern]

I thank my hon. Friend for being so generous in giving way again. This is a crucial point: Parliament rarely discusses the strategic role of the Bank of England and rarely legislates, in part because the independence of the Bank of England is still a valid economic principle on which we hope to rebuild our economy. We must therefore get the discussion right at this time.

18:15

[Chris Leslie]

It is worth noting that when we talk about the independence of the Bank of England we are talking about operational decisions of the Monetary Policy Committee. They have to be made, of course, without political interference. We can come on to the questions of quantitative easing and the Chancellor’s recent decisions on that, but we will put them to one side for now. The questions of governance of the Bank of England are a matter for Parliament to take very seriously indeed.

As the debate progresses, we will discuss the vast powers that the Bank will be taking, which are known rather opaquely as macro-prudential powers of regulation. Essentially, the Bank of England can intervene in any number of financial services, products and transactions and affect the financial well-being of businesses, consumers and households in the constituency of my hon. Friend the Member for Wirral South (Alison McGovern). We are talking about mortgages, lines of credit and supply and so on. That is why we need to get the arrangements right, and it is a shame that the Government did not do that.

I want to skip on, if I may, to Lords amendment 16, to which we have suggested another small amendment.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

While my hon. Friend has his arguments firmly in his mind, may I remind him that for some time many Members of this House have been concerned that the Bank of England has not done enough to encourage our high street banks to invest in deprived communities. Does he think that his amendment to Lords amendment 3 might help to encourage the Bank of England to pay a little more regard to those concerns?

[Chris Leslie]

Indeed, and I am grateful to my hon. Friend for taking the time to participate in this debate. A string of amendments that we will discuss later cover consumer credit and the interests of consumers, and we will talk about ease of access to financial services when we consider them. He is right, as the Bank of England is a key player in this regard.

That point neatly takes me on to our amendment (a) to Lords amendment 16. It tries to ensure that under the new arrangements the Bank of England—in particular, the new powerful committee that is being established, called the Financial Policy Committee—will, when it explains the decisions it is taking, also have to include an assessment of the impact of its decisions on economic growth. I know that the whole question of jobs and growth is somewhat of a blind spot for Treasury Ministers, but notwithstanding their rather peculiar inability to see the importance of these issues, we feel that it is important to put that requirement in the Bill.

We are delighted and overjoyed that the Government finally relented and granted a concession in the other place, after months of labour in Committee in this place, by agreeing to Lords amendment 10. It was a major victory for the Opposition when the Government were forced to change the Bill to ensure that the FPC would not only contribute to the financial stability objective but, subject to that, support the economic policies of Her Majesty’s Government, including their objectives for growth and employment. That concession was made because of the amendments we tabled and the evidence heard in Committee from a wide number of organisations, including the British Bankers Association, the CBI, the London stock exchange and others. They all said in submissions to Parliament that the new regulators should have regard to growth, so we are glad that the FPC has that general backstop requirement on its shoulders. However, we do not think it goes far enough.

As I said earlier, the powers the Bank of England will take—that rather opaquely described set of macro-prudential tools—will be very wide ranging. Each time it pulls one of those levers, each time it makes a particular decision, it should explain the impact of that change. The Bank of England will be able to affect a number of key areas. Perhaps the Minister will tell us when the draft order at the back of the Treasury’s consultation document is likely to find its way on to the Floor of the House for debate, because I know that a number of hon. Members will be interested in that.

The Bank will have powers called counter-cyclical capital buffers. I know that the Treasury Bench has a difficulty with the concept of counter-cyclicality, but it essentially means that banks will be required to build up capital when times are rather exuberant and things are going well in the economy, but to unwind those capital buffers in a downturn. The Bank will say that there should be sectoral capital requirements. In other words, the FPC can make the residential mortgage sector have a certain amount of capital or structure its business in a particular way. The commercial property sector will have to do the same. This is a Bank of England decision, not the result of parliamentary or legislative changes. Consumer credit decisions will be made. If my hon. Friends have constituents who pay off their credit card, perhaps currently a 2% or 5% minimum repayment on a monthly basis, at the flick of a switch the Bank of England will be able to say, “No, you have to pay off 10% each month,” or perhaps even more. That is the sort of power that the Bank of England will have.

[Mr George Mudie (Leeds East) (Lab)]

The situation with mortgages will be similar. I am certain that the FSA’s and the Bank’s insistence on a higher deposit will harm the construction industry. The average price of a two or three-bedroom house is £160,000, and 10% of that is £16,000 and 20% £32,000. We are getting more and more tales of young couples who simply cannot get on to the housing ladder because they are paying excessive rents and cannot save that deposit.

[Chris Leslie]

My hon. Friend will not be surprised to learn that there was a little argy-bargy between the Treasury and the Bank of England. As I understand it, the Bank initially said, “Loan-to-value ratios on mortgages, and loan-to-income ratios, are an awfully big decision. There is a lot of politics in that. We are not that keen. Push that back to the Treasury.” I think the Treasury has been saying, “No, Bank of England, this is a decision for you to take.” These are inherently political issues and our constituents would rightly ask whom to hold to account for such big decisions that affect their daily lives: whether or not someone can get a mortgage, what is happening in the housing market, and so on. That is why we still have some reservations about the governance structures and the lack of accountability on policy making. That is why we are asking for an assessment of the impact on economic growth whenever these levers are pulled and whenever these decisions are taken. I accept that there are careful balances to be struck. The FPC of course has to have an eye to stability, but it also needs to recognise, as the Chancellor has said, that we do not want the risk-aversion of the graveyard so that there is no economic activity. That is why we have suggested this particular change.

I am conscious of the time and I know that a number of hon. Members want to speak. Those are the main points that I have to make about our particular arrangements and it would useful if we could hear the views of others.

[Mr Tyrie]

The Bill came out of the other place only last Wednesday night and it was heavily amended there. It is the most complicated, and one of the most important, pieces of financial legislation for decades.

Much of what we are considering today amends provisions in the Bill, which themselves amend the Financial Services and Markets Act 2000 and the Bank of England Act. The Bill is incomprehensible without constant referral to FSMA. I would go further and say that it is incomprehensible in parts even after considerable referral to FSMA. We now have a piece of legislation that passeth all man’s understanding, like God’s will. FSMA itself was arguably the most complex piece of legislation ever passed by Parliament. I was on the Bill Committee and it was certainly pretty testing.

We are now legislating in a huge rush to get this on the statute book by the end of the year in order to meet an entirely arbitrary deadline. The deadline has been rendered all the more absurd by the fact that we will be back here next year anyway amending it as part of the banking Bill, which is required to give effect to the Vickers commission’s recommendations, parts of which have to be done by amending FSMA and cannot be done in any other way. I am not making some recondite point about parliamentary procedure; I am making a point about how to make the Bill effective. It is a point that is being made to me right now by senior regulators, who would very much prefer that we just take a little bit more time to get the legislation right.

This group of amendments deals largely with Bank of England governance. Everyone is agreed that Bank of England governance is in a huge mess. That is why last April the Treasury Committee took the highly unusual step of tabling a new clause in an effort to try to sort it out. I am particularly grateful to colleagues from four parties on the Committee who all co-operated to enable that amendment to go down with unanimous support. I am also particularly grateful to my deputy Chairman, who is sitting on the Opposition Benches, who assisted with the tabling of that clause. It was needed because the Bank has ramshackle governance arrangements that reflect their 17th century origins, as the name “court” demonstrates. As has already been pointed out, better governance would improve its accountability to Parliament. But much more important in some respects, it would also improve the Bank of England’s authority to act and to speak to the rest of the country as it takes tough decisions, such as those that have just been referred to. This is a point that is not lost on very senior people in the Bank of England right now, on the Monetary Policy Committee, the Financial Policy Committee, and also a number of deputy governors.

The Treasury Committee clause would not have solved all that, but it would have gone some way to bringing the Bank into line with good practice on corporate governance generally. It would have placed a duty on the court to conduct retrospective reviews of Bank performance and to publish the results, and it would have required the court to publish its minutes. I withdrew the amendment in the Commons only when the Government gave undertakings to make those changes in the Lords. I will come back to that.

In May, the Treasury Committee took another highly unusual step of reporting on the Financial Services Bill, after we had looked at it in the Commons, in order to assist the other place with its examination. Most of the conclusions that we came to in that report were raised as amendments in the Lords. The Government responded to some of them and that is what we are debating now. The Government’s Lords amendment 3 sets up, as we have heard, an oversight sub-committee of the court’s non-executives. That would give the court the power to commission retrospective reviews of the Bank’s performance —that is a step forward—to be carried out either externally or internally. The Government have also inserted an amendment to require the publication of court records of its meetings. While these amendments improve the Bill, they fall well short of what we were hoping for, and what in our view is still required, for several reasons.

First, the amendments place the power of review in the hands of a sub-committee of the court, rather than the court itself. This will further confuse the lines of accountability, not least to Parliament and to the Treasury Committee. These accountability lines are now very complex. I urge the Minister to try drawing them on the back of an envelope. I wager that he will have quite a task on his hands. Senior regulators agree that they will not do as they stand, and they have been telling us that publicly and privately. They want an improvement. They want the legitimacy for their decisions that comes with effective parliamentary scrutiny. Senior people in the Bank of England have seen how the Monetary Policy Committee has been strengthened and bolstered as a result of effective scrutiny by the Treasury Committee.

18:29

Secondly, the amendments fall short of what is needed because they require publication not of the minutes of court meetings, but merely of a record of such meetings, which I do not think would necessarily amount to much. A moment’s thought can tell us how unrevealing a mere record might be.

Thirdly, the Bill does not properly reform the court. It does not bring governance of the Bank into line with what most of us would consider to be the norms of corporate practice, whether public or private, right across the country.

Fourthly, no statutory obligation is placed on the court or the oversight board to respond to reasonable requests for information from the Treasury Committee. In practice, they can stonewall. I do not think that is acceptable if we are to have high-quality governance. I think that good-quality scrutiny by Parliament will be much more difficult without such an obligation being placed on the court. I worry that, at worst, the sub-committee could end up owing more to form than to substance. That is, of course, what has been wrong with the court as a whole; it has been as dignified over the years as it has been ineffective.

Fifthly, the Governor’s central and enhanced position is unaffected and the Bank’s hierarchical nature, with him at the apex, will remain. He is a single institutional point of systemic risk in the new governance arrangements. The danger of group-think will remain. Bill Winters recently drew attention in his review to that hierarchical problem and the need to place a requirement on the Governor to consult others, particularly the deputy governor.

[Alison McGovern]

May I take the hon. Gentleman back to his fourth point? He mentioned the Treasury Committee’s ability to get information from the Bank. What specifically is he concerned about, and does he think that his Committee ought to be able to access data from the Bank as part of its oversight role? First, how would he improve on that point? What specifics of governance does he think we must look for? Secondly, is it a question of getting data out of the Bank so that group-think can be laid bare and investigated? Am I right to take those points from what he has said?

[Mr Tyrie]

If the hon. Lady will forgive me, I will not linger on those points for too long, because the Committee has set that out in some detail in a number of reports. On her first point, in a nutshell, one need only look at the corporate governance arrangements of almost any public sector body, or indeed any public company, to see that the lines of accountability are powerfully drawn between their non-executives and the executive arm. That is almost completely lacking in the court, whose role is heavily circumscribed and, until recently, involved nothing more than oversight of the Bank’s budget. Indeed, I have been told informally that until recently an unspoken requirement of membership of the court was to have no great knowledge of financial matters, and certainly not to interfere with them. That strikes me as the negation of genuine oversight, but perhaps those who whispered such thoughts in my ear were making mischief.

On the hon. Lady’s second point, it is of course crucial that somewhere in the accountability framework there is a group of people who are capable of asking for detailed information in order to make the scrutiny meaningful. The Treasury Committee, in our investigations into Royal Bank of Scotland, found that we needed to send specialist advisers into the FSA to obtain the necessary papers to ensure that they were taken into account in its report on RBS. I do not think that it would be a healthy state of affairs if the Treasury Committee ends up having to send specialist advisers into the Bank of England to perform such a role. It would be far better to have a group of non-executives in the Bank of England whose explicit task is to look for those documents and to be available to help us do the scrutiny directly. My reply to her questions touches only the surface of the more detailed reply that could be given, but it has been set out in some detail in at least two Treasury Committee reports.

Next year we will have a new Governor. He could, of course, grasp the opportunity to improve all this, and no doubt he will form views about governance, ones that might benefit from legislative change. The Banking Commission will also make recommendations on standards, culture, competition, governance, regulation and sanctions for rule-breaking by bankers. Any or all of those might require statutory action. I would be grateful for an assurance on that from the Minister, so will he commit the Government to broadening the scope of the banking Bill to ensure that further amendments to FSMA, including in the areas I have just mentioned, can, if necessary, be made next year?

[Greg Clark]

I can give my hon. Friend that assurance. The Government have already said, I think in response to the question of data on lending to deprived communities, that if we do not succeed in establishing agreement with the British Bankers Association, we will use the forthcoming banking Bill to make those changes. If the distinguished members of my hon. Friend’s Commission, following their considerations, have recommendations that will require legislative changes, we will of course have vehicles available for that.

[Mr Tyrie]

That reassurance is helpful. I will take it back to both the Treasury Committee and the Banking Commission.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman has referred to the new Governor. If it had been a condition of his appointment that he understood the Bill and could explain it, does the hon. Gentleman believe that he would have been appointed?

[Mr Tyrie]

Well, he is a very clever man. I am confident that at the time of his appointment he would have been unable to pass the FSMA test, but I have no doubt that by the time he comes before the Treasury Committee for his pre-appointment hearing he will have mugged up fully on it all.

I have spoken for 14 minutes already, which is four minutes longer than I make a point of ever speaking in the House these days, so I will move swiftly to one last point. The Minister, as he pointed out, started looking at the Bill three quarters of the way through the process of putting in place a new system of financial regulation. I will wager a pound to a penny that he has found the tangled web of legislation that we have just been discussing extremely confusing. In fact, I wager that he has found it, in places, to be a nightmare and impossible to understand. I wager the same amount that the officials advising him do not always understand it either, and that is no reflection on the high-quality advice he is no doubt getting. Will he be prepared at least to consider rewriting FSMA afresh when he comes to adapt it to take account of the banking Bill, because that is what regulators have told us they would prefer, what the Governor of the Bank of England said he would prefer and what would enable the industry, the public and Parliament to have a much more intelligible piece of legislation?

It is a great shame that that approach, which was vigorously put forward at the time, was rejected when the Government first announced that they would proceed with amendments to FSMA. The Governor was pressing for it very strongly, and he had allies in Parliament. We now have a second chance, and I very much hope that the Minister will consider taking it. He will need to bear in mind that there will be 100—perhaps 1,000—official voices telling him not to do that, but just occasionally there are moments when a Minister can greatly improve the quality of the statute book. Would he be prepared at least to consider rewriting the Bill so that we have one fresh piece of legislation that everyone can understand?

[Greg Clark]

This has been a short but interesting debate, and I am grateful to the hon. Member for Nottingham East (Chris Leslie) and to my hon. Friend the Member for Chichester (Mr Tyrie) for contributing to it. I think that my hon. Friend does himself a disservice. If anyone can follow, and indeed have imprinted in his mind, every clause of FSMA, and be able to relate it to any future amendment, I know that he is capable of it. Let me first respond to some of the points made in the debate, including his.

The Bank of England is obviously at the heart of the financial system, and the changes are among the important reforms of its powers in history, alongside nationalisation in 1946 and independence in matters of monetary policy in 1998. Notwithstanding the few remaining issues of debate, I think that the whole House would agree that the changes made in the Lords represent a significant improvement in this part of the Bill. The amendments will strengthen the governance and accountability of the Bank. They will give the Financial Policy Committee a more positive and proactive mandate around economic growth and shift its membership to reduce the influence of the Bank’s executives. In addition, there are clarifications to simplify the drafting and terminology, if perhaps not going as far as my hon. Friend would wish to go. The name “court” is retained, despite his preferences.

On the Opposition amendments, I do not think that there is, in practice, a huge degree of difference between us. As the hon. Member for Nottingham East said, amendment (a) to Lords amendment 1 would add the word “overseeing” to subsection (2) of new section 3A of the Bank of England Act 1998. That was well debated in the House of Lords, as he will know. Some clarity was achieved there, in that the kind of oversight in which the oversight committee is expected to engage is common to non-executive directors elsewhere. Baroness Noakes made particular reference to that. The opportunity to review decisions and to consider how they are made is well understood in the context of the term “oversight”. The hon. Gentleman is proposing something that goes beyond that: that oversight should contain a more real-time role as well as a backwards-looking role. That could involve second-guessing the Bank’s policy decisions while they are being taken, which would not be appropriate. Indeed, it would go against the recommendations of the Treasury Committee, which said in its report that it agreed with the Governor that the Bank’s governing body should place more emphasis on oversight and ex-post scrutiny that would not authorise it to become involved in second-guessing immediate policy decisions. That is the advice that we have taken.

[Mr Mudie]

That should be qualified by the fact that the current Governor of the Bank of England does not want to be second-guessed by anyone. In fact, he would suggest that the best decision-making process is himself sitting in a room taking the decisions, questioned by no one.

[Greg Clark]

The hon. Gentleman has more experience of questioning the Governor than I have. The Joint Committee on the draft Financial Services Bill, of which he was a member, volunteered to agree with the Governor on that assessment, at least. We followed the Committee’s advice on that, as was recognised in the other place.

[Chris Leslie]

I understand the Minister’s argument. However, we are talking about a lot of power in the hands of a single individual—the single point of potential institutional disruption, as the Chairman of the Treasury Committee called it. Surely the sun king is capable of responding to some internal questioning, scrutiny and challenge, and that would be a healthy thing to have. Some kind of more proactive oversight might therefore not be such a bad idea after all.

18:45

[Greg Clark]

All those things are provided for in the Bill; the question is whether the word that the hon. Gentleman seeks to introduce is a matter of semantics or would bring in scrutiny of current decisions. That is a point of difference between us. In the House of Lords there are many people with experience of being very effective non-executive directors, as I know from my distinguished constituent, Baroness Noakes. Most people would recognise that she is meticulous and robustly independent in the scrutiny that she brings to matters, and she regarded the wording of the Bill as entirely compatible with that. It is not right to go against what the Treasury Committee recommended and to have the second-guessing of immediate decisions.

Let me say something about the existing powers. The report by the Treasury Committee recommended that ex-post reviews of the Bank’s performance should be carried out, and those are provided for. In fact, the current wording of subsection (2) of new section 3A of the 1998 Act requires the oversight committee to

“keep under review the Bank's performance”,

and that is consistent with the Committee’s recommendations. We think that this wording strikes the right balance between ensuring effective retrospective scrutiny of the Bank’s policy performance and avoiding a situation whereby the non-executive members of the court would be constantly second-guessing the decisions taken by the Bank’s expert policy committees and executives.

Amendment (b), tabled by the hon. Member for Nottingham East, would give the oversight committee an additional function to keep under review the adequacy and effectiveness of the Bank’s arrangements with the Treasury for crisis management. It is very important that that should be under review, for all the reasons he said. Subsection (2) of new section 3A gives the oversight committee a broad remit to keep under review the Bank’s performance in relation to all its objectives and strategy. It is absolutely clear—I would like to confirm this from the Dispatch Box—that the effectiveness of the Bank’s relationship and co-ordination with the Treasury in crisis management is fundamental to the Bank’s achievement of its objective to protect and enhance stability. As such, the oversight committee can already undertake or commission a review into the effectiveness of these arrangements if necessary. In fact, in January this year the Bank said in its response to the Treasury Committee that the oversight committee should, among other things, assess whether the Bank is fulfilling effectively its duty to notify the Treasury of risks to public funds at the appropriate time. There is no substantial difference between us that the amendment is seeking to expose.

[Chris Leslie]

The problem is the threadbare nature of the memorandum of understanding, particularly the infamous paragraph 20, which says:

“However, the Chancellor and the Governor may agree to establish ad hoc or standing committees.”

That is so thin that it is important for the oversight committee to make it a top priority to ensure that there is preparedness and that it is thinking through the circumstances in which a crisis may occur, and that needs to be placed explicitly in the Bill.

[Greg Clark]

I am grateful for the hon. Gentleman’s clarification. We should bear it in mind that the Bill requires the Treasury to lay the MOU before Parliament and to publish it. It will be subject to full transparency. For example, I would be very surprised if my hon. Friend the Member for Chichester did not call the Chancellor or the Governor to explain it. The oversight committee will be responsible for overseeing the Bank’s performance and, clearly, the MOU is a key part of its work in bringing to bear the Bank’s financial stability work. The committee will, therefore, consider from time to time whether it is working well and Parliament will itself have every opportunity to address the issue.

Amendment (a) to Lords amendment 16 would require the Financial Policy Committee to produce explanations of its decisions to exercise its recommendation and direction powers. Proposed new section 9QA(1) of the Bank of England Act makes it clear that the FPC’s explanations must set out how its decisions are compatible with its objectives, including the new objective to support the Government’s objectives for growth. It is clear that it has an explicit responsibility to do that. The FPC’s explanations will have to set out publicly how it has considered the impact on economic growth when deciding to take action and its reasons for believing that the action is compatible with its obligations in relation to economic growth.

Lords amendment 16—specifically subsection (3) of proposed new section 9QA of the 1998 Act—already requires the FPC to produce estimates of the costs and benefits of the decisions, including those areas to which the hon. Member for Leeds East (Mr Mudie) has referred. This will cover the impact on financial stability, both directly and indirectly, and the impact, both positive and negative, on economic growth.

I reassure the House that the FPC is giving considerable care and thought to the impact of these tools. The Bill requires the committee to produce and maintain policy statements for its direction tools. The statements will discuss the likely impact on both financial stability and economic growth. The Bank is preparing a draft of the statements, to be published early next year, so that they can be considered alongside the secondary legislation that will set out the FPC’s direction powers. We do not, therefore, think that amendment (a) to Lords amendment 16 is necessary.

[Mr Mudie]

Both the Treasury Committee and the Joint Committee on the draft Financial Services Bill were concerned about the important parts of the Bill that will be delivered through statutory instruments. That means a discussion in Committee for an hour and a half, with no provision for amendment. We would either have to accept the whole instrument or vote against it, and we would not have a majority on such a Committee. We pressed the Chancellor for a different, more flexible structure of decision making on secondary legislation so that the House or the Treasury Committee could debate it with the prospect of convincing the Chancellor, at some stage, to amend his direction of travel.

[Greg Clark]

I am grateful for the hon. Gentleman’s point. I am not able to produce a novel parliamentary procedure, but I can certainly tell him and the Chairman of the Treasury Committee that when the time comes to publish the statutory instruments, if they or their Committee would like to consider and advise on the discharge of the commitments, I would be happy to engage with them in good faith and take on board any suggestions.

[Chris Leslie]

I am delighted to hear that concession from the Minister. We have suggested a super-affirmative procedure for some of the regulations. That would give the Treasury Committee and others more time to look at the issues and ask the other Select Committees about the effect on, for example, housing and communities and local government. If the Minister is willing to open that door, we would support him.

[Greg Clark]

I give the hon. Gentleman an inch and he takes a mile. I will not commit to a different procedure but, as I have said, I will certainly commit, in good faith, to considering personally any points that are made. [Interruption.]

[Mr Mudie]

Has the Minister just been handed fresh instructions?

[Greg Clark]

They may be fresh instructions, but I have decided not to read them. I may be countermanded, but I will not retract my statement.

I will conclude by addressing what the Chairman of the Treasury Committee has said. I am reliably informed by my predecessors that this Bill, though complex and voluminous, has been well considered in numerous Committee sittings in this House, and I think that most people will conclude that their lordships have done a good job in their scrutiny. The Bill is important and it is right that it has been scrutinised to the extent that I think it now commands the broad support of the House, as evidenced by the relatively few amendments that have been tabled to their lordships’ amendments.

As I said in response to an earlier intervention, opportunities will be presented to the House in the years ahead—new Bills are already gathering speed on the runway—to accommodate further changes, should they be necessary. If so, I am sure we will have further conversations about them.

My hon. Friend the Member for Chichester issued me a challenge to rewrite the Financial Services and Markets Act 2000 and anticipated that I would be besieged by objections from officials and others.

[Mr Tyrie]

Turn around.

[Greg Clark]

I will not turn around and look at my officials in the Box, because I am sure I would get some black looks. My hon. Friend would not expect me to make a commitment, but I know—this is the case with everything he says—that he speaks from experience and that he examines the issues meticulously. I will look at what he has said, but I ought not, at this late stage, to raise his hopes too high.

Lords amendment 1 agreed to.

Lords amendment 2 agreed to.

After Clause 2

Oversight Committee

Amendment (b) proposed to Lords amendment 3.—(Chris Leslie.)

Question put, That the amendment be made.

18:57

Division 118

Ayes: 224

---

Labour: 216
Scottish National Party: 4
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Alliance: 1
Democratic Unionist Party: 1

Noes: 293

---

Conservative: 250
Liberal Democrat: 41
Independent: 1

19:12

Proceedings interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).

Lords amendment 3 agreed to.

Lords amendments 4 to 23 agreed to.

[Mr Andy Slaughter (Hammersmith) (Lab)]

On a point of order, Madam Deputy Speaker. On 29 February this year, I asked the Secretary of State for Justice whether he would name the 25 highest-paid lawyers and the amounts they received. I was told the information would be available in due course. I asked again on 19 April, and was told the information would be available later this summer—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Will hon. Members who are leaving the Chamber please so do quietly? Those remaining in the Chamber should listen to the point of order and if they wish to have private conversations, they should leave the Chamber. I cannot hear what the hon. Gentleman is saying. I got as far as 29 February so perhaps he will pick up his point from there.

[Mr Slaughter]

My initial question on 29 February asked for the names of the 25 highest-paid lawyers and I was told the information would be available in due course. I asked again on 19 April and was told the information would be available later in the summer. Yesterday, the answer to my question was spread over the pages of The Sun and The Sunday Telegraph with the Justice Secretary’s inimitable spin put on it. This afternoon, I received a reply to my question from Lord McNally. Is it appropriate to wait nine months for a question to be answered, and for it to be leaked all over the Sunday press the day before that answer is received? Even by the standards of this Government that is poor. Will you give me some advice, Madam Deputy Speaker, on how I can avoid a repetition of that?

[Madam Deputy Speaker]

Clearly the Government thought long and hard about how to answer the question—a little too long, in fact—and information was released to the press before the hon. Gentleman received it in writing, although he has it now. There is not a great deal that I can do from the Chair, but I recommend that the hon. Gentleman takes the matter up with the Procedure Committee. Nine months is a little long, as I am sure most Members of the House would agree.

Let us move on to the next group of amendments.

[Greg Clark]

I beg to move, That this House agrees with Lords amendment 24.

[Madam Deputy Speaker]

With this we may take Lords amendments 25, 41, 63, 78, 86, 128 to 138, 147, 231 to 233 and 236.

[Greg Clark]

The amendments in this group relate to key considerations that have underpinned the design of the new conduct regulator. The Government have been clear that regulation should focus on making financial markets work well, and on securing better outcomes for consumers.

Access is critical. Without access to a bank account, for example, it is difficult for individuals to participate fully in the economy and even in society. To support access, Lords amendment 25 adds a new “have regard” to the Financial Conduct Authority’s competition objective. Therefore, when considering whether effective competition is in the interests of consumers, the FCA must have regard to

“the ease with which consumers…including consumers in areas affected by social or economic deprivation, can access”

the services they may wish to use.

That reflects discussions in the other place, and it is right to make it clear that the regulator’s duties embrace those affected by deprivation.

[Mr Thomas]

The Minister gave the example of access to a bank account, but may I draw his attention to the issue of access to a bank branch in order to access one’s bank account? Already, a series of communities no longer have bank branches. Will he say how the FCA will use this new power to consider communities that lack not access to a bank account but access to a bank branch in the first place?

[Greg Clark]

The hon. Gentleman makes a reasonable point. However, having set up the FCA to put supervision into practice and added this concern to its objectives, it would be unreasonable for me to tell it how to exercise its powers before it has even come formally into existence. It will consider the issue of access and come to a view. That will be open to scrutiny by the Treasury Committee and, I dare say, other Committees of the House.

Where the FCA has identified a problem with access, the regulator will consider whether it could take action to close gaps in provision by promoting competition in the interests of consumers. It may also consider whether its own rules and requirements are imposing a burden on competition and restricting access.

[Nicholas Soames (Mid Sussex) (Con)]

Does my right hon. Friend agree that it matters that it is not too difficult to open an account in the first place? Every bank treats anyone who wants to open an account as a first-class money launderer, but it is essential that opening an account is not too complicated.

[Greg Clark]

My right hon. Friend is absolutely right. That is the import of the amendment I mentioned—we have stressed its importance. The Bill has substantially improved regard for competition, including by addressing the possibility that regulators, whether inadvertently or by neglect, might impede it. An explicit requirement to have regard to competition will help in that matter.

Consumer credit is a topic of great interest. A number of provisions in the Bill enable the transfer of the regulation of consumer credit from the Office of Fair Trading to the FCA. That will take place by April 2014 and constitutes a major transformation in the regulation of consumer credit. As all hon. Members know, there was strong cross-party consensus in the House of Lords on the need for strong regulation of the payday loans market. Members on both sides of this House feel just as strongly.

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

There has been a proliferation of payday loans companies setting up in Chatham high street. Hon. Members have raised the issue for some time, so I welcome the Government’s decision. When will the university of Bristol research into a cap be published? Will it be published before Christmas?

[Greg Clark]

My hon. Friend is a real campaigner—anyone who suffers poor treatment in Chatham can count on her vigorous support in defending themselves against people who have more power. My understanding is that the research being conducted by the university of Bristol is pretty close to completion. I am not certain whether it will be published just before or just after Christmas, but I will ensure that my hon. Friend is alerted as soon as it is laid before the House.

Lords amendment 78 clarifies that the FCA will have the power to impose restrictions on the cost and duration of a regulated credit agreement. It ensures that potential loopholes that could be exploited by unscrupulous firms are addressed—for example, by ensuring that the FCA’s rules under the power cover linked charges and connected agreements. The amendment provides for the agreement to be unenforceable by the lender, for any money or property secured against the loan to be returned to the borrower, and for compensation arrangements to be put in place.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Minister clarify for the House whether the rules apply to organisations such as BrightHouse, which sells furniture and white goods at very high interest rates as well as via straightforward money transactions?

[Greg Clark]

The hon. Lady would not expect me to comment on a particular firm when I do not know the details, but she makes a perfectly reasonable general point. If a firm is a regulated provider of credit, the provisions apply to it in the same way.

[Helen Goodman]

But it sounds as if people selling goods at exceptionally high interest rates on hire purchase agreements are not regulated credit providers. Therefore, is there not a bit of a loophole in what the Minister offers?

[Greg Clark]

I do not believe there is a loophole. Firms are required to be regulated for those aspects of their business that provide credit to consumers. They therefore fall squarely under the FCA’s powers.

The Government tabled a number of amendments in the Lords to ensure a smooth transfer of consumer credit regulation from the OFT to the FCA, and to ensure that the FCA regime is proportionate and gives the right protection to consumers. We also introduced amendments in response to concerns raised by the House of Lords Select Committee on Delegated Powers and Regulatory Reform. For example, Lords amendment 136 requires the Treasury to have regard to the importance of securing an appropriate degree of protection for consumers and for the principle of proportionality.

Lords amendment 130 responds to the Committee’s concern about double jeopardy. It provides that when criminal sanctions under the Consumer Credit Act 1974 and regulatory sanctions under the Financial Services and Markets Act 2000 are available to the FCA in relation to the same act or omission, a person may not be convicted if he has already been subject to sanctions under FSMA.

Lords amendment 233 and associated technical amendments address a possible loophole that might otherwise emerge as a result of moving from a CCA-based regime to a FSMA-based regime. Under FSMA, it is an offence to carry on a regulated activity without authorisation, whereas under the CCA it is an offence to lend money or collect debts without the right category of licence. The Government tabled amendments in the Lords to make it a criminal offence to lend or collect money without the correct permission. That addresses the risk of sophisticated illegal money lenders seeking authorisation for a lower-risk activity, only to use that as cover to engage in lending or debt collection, to the potential detriment of consumers. Lords amendment 233 also ensures that any agreements entered into or being enforced by a person without the necessary permission become unenforceable, meaning that important protections in the CCA for victims of illegal money lenders or debt collectors are replicated in the new regime.

Lords amendments 63 and 232 make changes to how the appointed representatives regime under FSMA will operate when firms carry out a credit-related activity—for example, by acting as ancillary credit brokers. The amendments create a limited carve-out from the provision in FSMA that firms cannot be both an appointed representative and authorised at the same time. They provide that if a firm is authorised for a particular category of consumer credit activity, it would also be able to become an appointed representative.

Consistent with CCA provisions, the Bill allows the Treasury to enable trading standards to prosecute offences under FSMA. Government amendments enable the Treasury to confer similar powers on the Department of Enterprise, Trade and Investment in Northern Ireland. They enable the Treasury to confer powers on trading standards and DETI to investigate offences under FSMA.

The amendments to which I have spoken so far have been concerned with the new regime, but the transfer to the FCA will not take place until April 2014, and it is clear that there are problems in the sector that the OFT needs to address in the meantime. The findings of the recent OFT report into compliance standards in the payday lending market show that compliance levels are low and that a number of practices that clearly cause consumer detriment are rife in the sector. To empower the OFT to operate as effectively as possible in the interim period, Lords amendments 138 and 147 give the OFT a new power to suspend consumer credit licences with immediate effect if it considers that necessary urgently to protect consumers.

Finally, on social investment, the Government tabled Lords amendments 24 and 41 to ensure that the particular needs of different sectors and the consumers that use them are taken into account—they are not specific to social investment but apply to alternative and innovative business models more generally. Lords amendment 24 requires that, when the FCA is considering its consumer protection objective in future, it will be required to have regard to the different expectations of consumers in relation to different types of financial service. In other words, if people with their eyes open go into a social investment model, it will be entirely appropriate for advisers to advise on such products.

Lords amendment 41 adds a new regulatory principle to clause 3B—the principle applies to both the Prudential Regulation Authority and the FCA. The measure requires them to have regard to the different nature and objectives of different financial services businesses. It is intended to make clear that there should not be a one-size-fits-all approach to regulation, because sectors such as social investment have an important part to play.

[Mr Thomas]

I apologise for interrupting the Minister’s strand of thinking on the social investment measures, but may I take him back to payday lenders? The noble Lord in the other place introduced a series of Government amendments designed to deal with the problem. Will the Minister offer the House a definition of payday lenders, so that we have a sense of who the Government seek to tackle with the amendments?

[Greg Clark]

I will not do that for much the same reasons I gave in response to the previous intervention. The Lords amendment clarifies that across all regulated lenders the FCA has broad and powerful powers, if I can put it that way, to intervene to protect consumers, including on the price or rates of interest they are charged, according to its assessment of the detriment faced by consumers. It is right to frame it in that way, and to empower the regulator to pursue sometimes even novel forms of credit that might be operating to the detriment of consumers, rather than to risk specifying in the Bill detail that might be overtaken by time or the ingenuity of people seeking to cause damage to our constituents.

19:30

[Mr Thomas]

Will the Minister reflect on that answer? It would be helpful, in the context of the debate and understanding whether the amendments he supports today are effective enough to deal with the problem of payday lenders, if he considered providing a definition of what the Government see as being the problem with payday lenders. The Opposition might have different views on what constitutes a payday lender. It would be good to hear the Minister’s views, so we might determine whether the amendments will achieve the objectives he has set out.

[Greg Clark]

The hon. Gentleman knows that the term, “payday lender” is relatively informal and loose. It is important for the FCA to have the powers it needs to protect consumers. Its focus should be on the consumer, rather than on a current definition of a practice pursued by a supplier. That is the way it is cast and it is the right power. From the discussions in the House of Lords last week—as he might imagine, I paid close attention to them—it was apparent that everyone who has taken a close interest in the past weeks, months and, in some cases years, was content that the powers vested in the FCA, which are clarified in the amendment, address all the concerns shared by Members on both sides of the House.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I encourage the Minister to broaden his comments to encompass all our concerns about high-cost credit companies. Having seen the wonderful damascene conversion to the need to tackle these companies, many of us want to ensure that we do not inadvertently miss out on not just those payday or short-term lenders, but doorstep lenders, logbook loans and hire purchase agreements. High-cost credit encapsulates all those issues, and I think it would be welcome to the regulator to know that the intention of Parliament is precisely to tackle the whole industry.

[Greg Clark]

I am grateful to the hon. Lady for her point, which makes the point I was making to the hon. Member for Harrow West (Mr Thomas). To use the term “payday lenders” exclusively is to miss a broader range of potential practices that may cause detriment to consumers, and that is why this approach is about the powers vested in the regulator.

[Yvonne Fovargue (Makerfield) (Lab)]

Will the FCA be able to look at other concerns such as the misuse of continuous payment authority by both high-cost lenders and fee-charging debt management companies? The unrestrained use of continuous payment authority causes one of the biggest detriments to consumers that I have seen.

[Greg Clark]

The short answer to that is yes. The FCA’s powers will be broad, and defined by practice rather than activity. We have been clear that it might not be just the level of interest charged, but other practices associated with the lenders that come within the ambit of the regulator. It is clear that it will use those powers vigorously to promote the interests of all our constituents.

I will leave my introductory remarks on that point. I am sure that Members wish to contribute and I will seek to respond to any points raised when I make my winding-up speech.

[Chris Leslie]

There is a large number of amendments in this group, that focus on consumer credit and the best interests of consumers. I want to concentrate on two in particular—Lords amendments 25 and 78.

Lords amendment 25 was extracted from the Government and we are glad that they gave way on it. The amendment will henceforth make it clear that the new Financial Conduct Authority will have a requirement to ensure basic access to financial services particularly in deprived areas and neighbourhoods where some of our banks and financial institutions do not necessarily think that they can make millions and millions of pounds. That is the hope placed on the shoulders of the FCA. The key question is whether the regulator will roll up its sleeves and use the full extent of the powers that the Bill should provide. I, for one, will be seeking a very early meeting with the new chief executive of the FCA to extract commitments on how it intends to use the new powers.

It should not have taken months of persuading and cajoling Treasury Ministers for them to accede to the changes. Perhaps it was the fresh air provided by the new broom, the Financial Secretary to the Treasury, sweeping clean with perhaps more of an open mind than his predecessor on some of these issues. If that is the case, I commend him for it. We need to begin to look at the detail, so I have a series of questions for him, starting with Lords amendment 25.

There are already what some people call lending deserts. In some communities, bank branches are not as readily available as they are in other, more affluent areas. In some deprived areas of the country, it is hard for consumers to access affordable credit. The key word—affordability—is of course now well known. If people want to be completely ripped off, they can pay for high-cost credit, often on a very short-term basis, with immense interest rate charges that can accumulate and get them into severe jeopardy. That will lead to further financial exclusion if they cannot keep up with the repayments, and to them being trapped in a spiral of poverty.

It is important to hold the big five banks to account. As large institutions, they are not just private companies with no obligations beyond and above those that rest on the shoulders of any other private company. In this day and age, they are a social utility and have a duty to the community to ensure that all parts of the country have access to basic banking facilities. The work of the financial inclusion taskforce, under the previous Administration, sought to ensure that basic bank account facilities were available. With the onset of universal credit in April 2014, it will be even more important for everybody to understand and have access to those facilities. However, I am increasingly worried about the fragile deal put together under the previous Administration to support and extend those basic services. There are signs of a creeping onset of charges. As banks come out from the era where the taxpayer was essentially keeping them going, they are now starting to look to the consumer to extract more charges. I do not want a situation where banks get together and think about introducing basic charges on current accounts, especially for those who are taking care to ensure that they are in credit. There are worrying signs that that might be in the air. Even the regulators have started to say, “Well, let’s start charging a little bit for in-credit current accounts. It might be a way of ensuring we don’t have to charge such high costs for unauthorised overdrafts.”

[Sheila Gilmore (Edinburgh East) (Lab)]

My hon. Friend talks about regulating to ensure that these bank accounts remain available. Sometimes, if people find themselves being charged for an account, they simply give up, because it is too expensive, and sometimes they cannot open another account, because they have got into difficulty. That has been the experience in the past few years. I hope that the regulators will be alive to those issues.

[Chris Leslie]

Indeed, that is the case. Anxiety is spreading and rumours are circulating that people with credit impairments or county court judgments against them are finding it increasingly difficult to access basic bank account services. One of the most shocking changes has been the way some of the big banks have started gradually to pull out of the LINK cash machine network. That network depends on all the banks taking part, because, if some big banks withdraw, as has happened, more of the cost of maintaining the network falls on a minority of banks, which, as a result, are more likely to walk away. I have worries, therefore, not just about the basic bank account networks, but about the LINK cash machine system, and I would be grateful if the Minister set out to those banks in no uncertain terms that, given their social duties and responsibilities as a utility, we expect—as a de minimis requirement—that they maintain those basic, fundamental activities.

[Alison McGovern]

Will my hon. Friend slightly broaden his comments about the LINK system? In too many of our towns and cities, cash machines in the most deprived areas are the ones that charge. Unfortunately, the principle that those with the least pay the most is creeping back into financial services. If we do nothing else this evening, let us send the message to the financial services industry that such a principle is wholly unacceptable.

[Chris Leslie]

That is true. The Opposition take the view that the financial services sector needs to move away from the old model of essentially extracting profit on the basis either of the ignorance or lack of awareness of customers—basically taking advantage of the inertia in the system—or of the fact that the consumer has no other choice. We need to support a financial services sector that genuinely adds professional value and acumen to products fairly and transparently. That is the modern sort of financial services sector that this country deserves and can have. We need to get away from that old era, in which the banking system essentially raked in multiples of small penny packets of income and profit off the backs of people who were not necessarily aware they were being charged 25p or 50p for cash withdrawals. That is the sort of bad practice we need to move away from.

The Opposition have called for action to ensure that pockets of the country are not left isolated and on their own. In the United States, they have clear safeguards requiring banks to reinvest in communities and provide basic coverage. That counts not only for consumers, but for small businesses, which, as we know, also struggle to access affordable loans.

[Mr Thomas]

My hon. Friend is making an extremely important point. He will be aware that President Obama, in backing stimulus legislation in Congress, ensured that it required banks to disclose their lending to businesses across the USA, allowing us to see the lending deserts not only for individual financial consumers, but for individual business financial consumers. Surely that is something the FCA might usefully consider requiring of our banks.

19:44

[Chris Leslie]

In Labour’s view, amendment 25 ought to allow that. If we are talking about ease of access to affordable financial services, it should be a responsibility of the FCA to think of new ways to map what is happening across the country and to ensure that there are not these deserts or vacuums of poor availability or no availability. That is why there should be a requirement for a map to be drawn up of where and what lending is available, perhaps on a postcode-by-postcode basis. It would provide transparency and enable hon. Members to find out what is happening in their constituencies. Anecdote is not adequate; we need a more rigorous system of regulation and monitoring. That is how it is often done in other developed countries, such as the US, as my hon. Friend said.

In the past, Ministers have said that they are opposed to that level of transparency. I am not sure about this Minister—I know he will want to take a fresh perspective—but previous Ministers said: “It’s too burdensome to require transparency in respect of lending patterns, and there might be anti-competitive issues as well.” It would be entirely feasible to collect anonymised data in the way suggested, however, and I hope that Lords amendment 25 could be so interpreted.

[Mark Durkan]

Like my hon. Friend, I welcome amendment 25, which, I note, was something he laboured on valiantly when we spent our Lent in Committee. Does he recognise, however, that in one part of the UK —Northern Ireland—the five high street banks he referred to are not part of the banking profile? In Northern Ireland, we are facing a twilight zone of banking, with changes happening almost by default squared—as a result of changes here and in Dublin—and that will change further in the context of banking union. That is why we need to question how the FCA would use the powers being given to it under amendment 25.

[Chris Leslie]

Exactly. I imagine that what my hon. Friend describes is absolutely correct. Incidentally, I pay tribute to him for his endeavours in trying to improve the legislation, month after month after month, as we proceeded through Committee and on Report. The situation in Northern Ireland will be compounded by different factors, so how much more useful would it be if he and his neighbouring parliamentary colleagues had access to data about lending availability in a more rigorous form? That is how we want to interpret amendment 25 and how we will press the FCA to interpret it.

[Mr Thomas]

Is there not a danger that the Minister might see amendments 25 and 78 as a “Get out of Jail” card when it comes to taking real action to tackle the problem of payday lenders and the lack of access to financial services in many of our most deprived communities? Might he not say, “Well, 2014, when the FCA comes in, will be the time to act”? Does he not need to adopt the same initiative as my hon. Friend mentions by having a meeting with the chief executive of the FCA and saying, “We want action on these issues. We want you to set out clearly before you take office what you’re going to do about the problem of payday lenders and what steps you’re going to take to require better access to financial services in the most deprived communities”?

[Chris Leslie]

That is correct. The Minister ought to be meeting the FCA regularly, and clearly those are the questions the House expects Treasury Ministers to put to the new regulators.

Lords amendment 78 was another concession that had to be dragged from the Government at great effort. I do not expect too much sympathy from you, Madam Deputy Speaker, but it is quite difficult for the Opposition to win votes in this House. Occasionally we have the odd success, such as on the EU budget—I do not want to talk about these things too much, as I know the Minister is a bit raw on that point—but by and large we try our best, we make our suggestions and we do not get very far. However, on this issue the Government were faced not just with the weight of argument by many hon. Members—including, of course, my hon. Friend the Member for Walthamstow (Stella Creasy)—but with the spiritual hand of assistance from the new Archbishop of Canterbury-designate in the other place, the Cross-Bench Bishop of Durham, as is. The Government had no choice but to make that historic concession when faced with the overwhelming moral and political case and the breadth of cross-party agreement.

The Commercial Secretary to the Treasury admitted that amendment 78 would not be a silver bullet for the problem of high-cost credit—payday lending or however we characterise these things. Although we are slightly disappointed that the new expanded Lords amendment 78 does not refer to “consumer detriment”, we hope that some of the provisions will open the door to enabling the Financial Conduct Authority to take urgent action to clamp down on some of the high costs involved, as well as the duration and rolling over of some payday loans or high-cost credit arrangements again and again, getting people into a spiral of dependency with massive credit costs, which are severely damaging to very many people.

My questions for the Minister are these. If the legislation no longer contains the “consumer detriment” litmus test, what will trigger intervention by the regulator? What will be the test? We are keen on many of the ideas in the amendment. The power to recover funds for consumers, the power to strike down enforcement action by an unreasonable lender and the power to insist on compensation for customers are all good, but we need the Minister to explain in slightly more detail how the Financial Conduct Authority will trigger those powers. Will individual complainants ring up the FCA hotline? Will litigation or a set of class-action cases be needed to get the FCA to take note, or might it send mystery shoppers around the country to undertake proactive investigations and say, “This is not good enough; we will see action”?

We are glad that Lords amendment 78 also makes changes on unlawful communications. That is welcome. Hon. Members will be looking at the clock and thinking, “Well, usually about now”—some time between 7.30 pm and 8 o’clock—“we get text messages from companies trying to convince us that all our debts can be written off in a voluntary arrangement under new Government legislation.” We might get spam or a cold caller saying, “Did you realise you’ve got £2,500 overdue, if only you put in your PPI claim before Christmas?” It is around this time in the evening that people will be getting these sorts of automated calls. There are all sorts of advertising, text and cold-call arrangements proliferating across the country.

Many of our constituents are totally baffled about what is being done and what can be done by the relevant authorities to stop such exploitative behaviour. Apparently, some of the companies trying to exploit vulnerable individuals use mechanised arrangement to poll thousands and thousands of people, and even if only 1% pick up the phone and say, “Oh well, I’d like more information”, the volume of calls means that they can make significant profits. A lot of these automated telephone arrangements are routed through foreign jurisdictions—often not even in the European Union—as a way of skating around advertising regulations.

We want amendment 78 to get a grip on some of those questions. I know that financial services companies are not always the ones directly involved—it could be what are known as claims management companies. There are also organisations peddling debt management plans that have high fees associated with them. People are sold a product by a company that says, “Let’s consolidate all your expensive loans and we’ll take a single payment instead.” People think, “That sounds rather good,” and they start making payments. Perhaps months go by, during which they pay, thinking that they are defraying their debts, but when the company goes bust, they find that they have paid down absolutely none of their debts. All they have been doing is paying for the profits taken by a fee-charging DMP provider. Those are the sorts of services we want the Financial Conduct Authority to tackle.

We have had a lot of shilly-shallying on these issues. Quite frankly, it should not have taken nine months of hard effort to extract this concession from the Government since we first tabled an equivalent amendment in Committee back in March. We are glad for small mercies—this is a step in the right direction—but it is now for the Minister to explain how Lords amendments 25 and 78 will bite and how they will help people in their daily lives. I look forward to hearing his response.

[Helen Goodman]

I want to speak to Lords amendment 25. The Minister was not terribly clear in his opening remarks about whether it concerned consumers as individuals or whether it would be interpreted more widely, to address the branch networks that the main clearing banks operate. When he winds up, I urge him to say something about the significance of having a nationwide branch network to ensure that all communities can be financially included.

This issue came to my attention in July, when I received a letter from HSBC, which wanted to close its branch in Shildon in my constituency. Shildon is a town of slightly more than 10,000 people, many of whom have been banking with HSBC for a long time. Many local businesses—600 of them—bank at the Shildon branch. It is much cheaper for everybody to have a local branch than to get on the bus, go down to Bishop Auckland, put money into the bank or take it out, and then come back again. The round trip on the bus costs £4. It is absolutely ridiculous that people should face such barriers. We mounted a great campaign and a huge petition, but of course HSBC has paid no attention whatever to the needs of the people of Shildon. I happened to come across a man at the Labour party conference who revelled in the title of “Director for wealth management”, and who was apparently the person responsible for the branch network. It is true that there is not a lot of wealth to manage in Shildon; none the less, people in Shildon need a proper banking service, just like those in other parts of the country.

As well as thinking about that need, we need to think about the impact on the rest of us. Let us suppose that somebody who lives in a perfectly well-banked part of Durham wishes to make payments in Shildon, belong to an organisation there or make transactions with people there. It is far easier and better for everybody if they know that there is a proper national network of bank branches. I urge the Minister to comment on the branch network in his closing speech.

I remind the Minister that over the last four years taxpayers have given the major banks a considerable amount of support through subsidies and guarantees, yet although they are too big to fail, they are not too big to fail their customers, which is exactly what they are doing. HSBC claims in its slogan to be “the world’s local bank”, but it is not very local in my constituency.

20:00

We were fortunate to have the divine intervention of the Bishop of Durham, who seems to have succeeded in reaching parts of the Government that we were unable to reach, but I want the Minister to understand that if we are to build a successful economy in the north of England, we need to support small businesses and the communities that are currently being marginalised. If we do not do that, and if we simply concentrate on investing in high-tech, high-success areas, we will end up with pockets of success in a sea of deprivation. That is not the kind of country that we want to live in.

We want to see one-nation banking that will provide an opportunity for everybody to avail themselves of banking services. In a modern economy, people simply cannot function without a proper bank account. Without one, they cannot have a job, get a good deal from the utility companies or receive money from other people. A bank account is now an essential part of modern life, and I hope that the Minister will take this matter to heart, talk to the FCA about it and say more to us about it this evening.

[Mr Gareth Thomas]

I am grateful for this opportunity to take part in the debate tonight. I echo some of the concerns that have been expressed by my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Nottingham East (Chris Leslie). I hope that the Minister will see his response to the debate as an opportunity to convince the House that Lords amendments 25 and 78 are not part of an attempt to put off action on payday lenders or on lending deserts.

I want to offer the House the example of the community of Thamesmead and Abbey Wood. It is a community of about 55,000 people in south-east London. The houses there were built in the 1960s in response to what was then seen as London’s housing crisis. There is no bank branch in the whole of that community. Not one of the big five banks has a branch there. The nearest branch is 30 to 45 minutes away by public transport. This is not for want of trying by a whole series of people to convince the big five banks to establish themselves in the area. An excellent organisation, the Thamesmead Trust, has tried to persuade the banks to set up there. The former Member of Parliament for Erith and Thamesmead, John Austin, has also tried many times, and the present Member, my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), has made a number of efforts as well, but there is still no bank in the area.

The community of Thamesmead and Abbey Wood is clearly not the only area without a bank, as my hon. Friend the Member for Bishop Auckland illustrated, but I worry that many of the lending deserts in this country are not yet out of the closet, if I can use that term. We do not have the necessary information to chronicle by postcode the lending that is taking place to businesses and to individual consumers. As my hon. Friend the Member for Nottingham East said, many of the banks in question are established in the United States, where they have to provide those data. As I said in an earlier intervention, President Obama supported calls for business lending to be publicised, on a postcode basis, so that people could see where lending was taking place and where it was not. That provision has now been written into American law.

We have called not only for the publication of lending data by postcode but for an obligation to be placed on banks to lend into every community. If they are not prepared to do that themselves, there should be an expectation that they will do so through community development finance institutions, through charity banks or through credit unions, but the obligation should be on the banks to demonstrate that they were providing lending into communities through those alternative sources if they were not prepared to do so directly themselves.

[Helen Goodman]

My hon. Friend reminds me that I asked HSBC, when it was closing its branch in my constituency, if it would instead put £10,000 into the local credit union. I received a letter from the bank today saying that it would not.

[Mr Thomas]

My hon. Friend gives a good example of the lack of joined-up thinking in our financial services markets. It would be good to see the big beasts of the financial services jungle supporting the newer players that want to address the problem of lending deserts.

Numerous websites offer comparisons between banking products, but the Centre for Responsible Credit has highlighted how, in practice, the banks release very little information about their lending at community level, either for businesses or for personal customers. Data on lending to and deposits from small businesses and third sector organisations, by postcode or at neighbourhood level, are not routinely available in the UK, even though much of that information is held by the banks and could be released.

The last time I spoke to representatives of the British Bankers Association, they told me that they were looking at this issue. It would be good to hear what the Financial Secretary thinks about it. My hon. Friend the Member for Nottingham East clearly thinks that the Minister will be a new broom sweeping through the fusty ways of the Treasury, and I hope that he will use his considerable influence to maintain the pressure on the British Bankers Association to step up the release of those data. I also hope that he will use his meetings with the chief executive and board members of the Financial Conduct Authority to require them to initiate similar pressure, in private before the FCA is properly established, and in public thereafter.

[Susan Elan Jones (Clwyd South) (Lab)]

My hon. Friend has been talking about bank deserts. Would he also accept that there is also a problem when small branches in rural communities close? We accept that some of those communities are very small, but there is a sense that once a bank has deserted a community, almost nothing can be done to support the businesses there. That is also something that we need to look at.

[Mr Thomas]

My hon. Friend makes a very good point. The situation is particularly stark in rural communities, but it is increasingly stark in many urban areas. North Harrow, in my constituency, no longer has a bank, and businesses in that area are extremely disappointed by the lack of easy access to banking services and the inability to have a proper discussion with a local bank manager about their finance needs.

I hesitate to suggest that the Minister might enjoy and benefit from a foreign trip, but should he find time in his diary, he might like to go to Washington and spend a little time with the National Community Reinvestment Coalition. He would find a considerable amount of expertise there on the disclosure of lending data by banks to businesses and individual consumers. He might like to bring back to the House, and to his conversations with those in the financial services industry, the benefits of the US legislation, the most recent update of which has happened since 2010.

Let me return briefly to the definition of payday lenders. If I may say so, I thought the Minister quite skilfully used an intervention made by my hon. Friend the Member for Walthamstow (Stella Creasy) to avoid defining payday lenders. I gently encourage the Minister to look again, not necessarily in the context of this debate, but separately, at how payday lenders should be defined. Even with the power proposed by the Lords, the question of definition is still ducked. If there is to be the interest rate cap for which so many Members, led by my hon. Friend the Member for Walthamstow, have campaigned, we must have clearer definitions of which financial services businesses are included within the term “payday lenders” or the high-cost credit definition that was just mentioned, so that proper action can be taken.

I fear that many of the payday lenders who have looked at the amendment that the new archbishop has helped to force over the line, perhaps, in the House of Lords will recognise that there is no definition as yet, and so will not feel sufficiently worried to change their practices.

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

I had not intended to speak in this debate, but I rise briefly to talk about Lords amendment 78. I want to speak partly so that I can place on the record my recognition of the hard work done by the hon. Member for Walthamstow (Stella Creasy) on this issue. She has been recognised already across the House in winning many awards for her campaigning. It is true to say that she has been tireless on this issue, on which she has achieved a huge success—at the early stages of what will no doubt be a long and distinguished career in the House.

I want to thank their Lordships for the work they did the week before last on this issue, and to congratulate the Government on listening to the concerns across the House. This issue concerns many of us on both sides of the House, even though there may be an urban myth that those of us who represent south-east Conservative seats do not face many of the concerns about deprivation and the impact that the high-cost credit industry is having on our constituents.

Chatham has two significantly deprived areas. One problem seen by the local citizens advice bureau is an increase in the number of people from the more affluent wards in the area coming in to talk to their debt advisers. In Medway we now have average personal debt levels of nearly £43,000, which I think is incredibly high. We in Medway have therefore joined up, across all the parties, to try to provide a solution to some of the problems. First and foremost, I joined the local citizens bureau to chair an inquiry to try to establish precisely what is driving people into increased personal debt. We have done so by, rather controversially, partnering with Wonga to do a proper survey across all the wards in the Medway authority, looking into what is causing people to increase their levels of debt. However, let there be no hesitation about the fact that, as I have already made clear, if it is payday loan companies that are driving people, particularly the more vulnerable members of society, towards debt, we shall make strong representations to ensure stricter regulation of these companies.

The hon. Member for Nottingham East (Chris Leslie) raised what I thought were interesting issues about the definition of high-cost credit lending. One of the organisations that has not yet been debated here is the pawnbroking industry. I recently saw an advert placed outside both a pawnbrokers and a payday loan company, inviting people to take out loans of up to £50,000. It turned out that this was for businesses. I have real concerns about businesses taking out payday loans where they are securing the entire company against such credit. I recognise an asset is being secured in pawnbroking, but entire businesses could suddenly be lost if they are unable to meet their repayments.

I have some concerns about whether this regulation will cover pawnbroking companies, as there is a bit of a loophole in the credit regulations when it comes to pawnbrokers. I would like to see us take a proper look at how pawnbroking companies are offering increasing amounts to help with short-term cash supply. Although there are some limitations and I do not think it is recommended that businesses take a loan of more than £25,000, the fact is that pawnbroker loans can go up to £100,000. It is incredibly irresponsible for companies to be lending that to businesses, particularly when it is unlikely that the businesses are going to be able to meet their repayment plans.

20:15

I welcome the Government’s concession on this issue, which is hugely important for many vulnerable people across my constituency. I look forward to the Minister’s response to some of the questions raised, particularly on issues such as advertising and the definition of high- cost credit. I also look forward to the publication of the university of Bristol research, which I think will play an incredibly important part in how we take this issue forward for the future.

[Stella Creasy]

I shall speak to amendments 78, 137 and 148, which deal with the role of the Office of Fair Trading. Before I do, I want to place on record my gratitude to Members in the other place who, along with the hon. Member for Chatham and Aylesford (Tracey Crouch) have been so supportive of the sharkstoppers campaign. I mention Lord Mitchell, Lord Kennedy, the Right Reverend Welby—I think that is the appropriate term; apologies if it is not—Baroness Howe and Baroness Grey-Thompson. They have all been fantastic in championing a measure that I know has widespread support across the country.

I also put on record my gratitude to many organisations that have been helping make the case for action on high-cost credit, whether it be R3, the insolvency practitioners, the co-operative movement and co-operative party, Unite, Community and the thousands of concerned citizens who been involved in part of the campaign. I thank the hon. Member for Chatham and Aylesford for her kind words and for using the term “tirelessly” rather than “tiresome”, which is how some people might have interpreted the doggedness with which we have persisted in campaigning on this issue. In that sense, this amendment and the damascene conversion of the Government to the need to act on the cost of credit is very welcome. Throughout this campaign, we have all said that when the Government accepted that we were right all along, we would be grateful and would take it within the spirit of cross-party agreement that something needs to be done about these companies and about the impact of debt on our constituents.

With that in mind and in genuine appreciation of the fact that this moment has happened, I now want to press the Minister, as have many others, about the nature of the amendment and what will happen in the next year. Many of us are concerned that there is still a window of opportunity driven both by the delay in the implementation of these powers for the Financial Conduct Authority until April 2014 and by the continuing pressures that many in our constituencies will face, which might mean a bonzer Christmas for many of the legal loan sharks.

We started to campaign on this issue because we could see that toxic mix in Britain of a crisis in the cost of living, of families struggling, having lost jobs or facing wage freezes in Britain and, indeed, of the lax regulation in the UK of the cost of credit. We know that those pressures have got worse, not better, for British families over the last couple of years, so we know that one in three of those families in Britain have suffered a pay freeze over the last 12 months at the same time as they have seen the cost of basics rise and continue to rise. We know that many consumers have borrowed about £2,000 on top of their secured debts—their mortgages—to try to make ends meet in the last year, but only a quarter of them have managed to pay that money back.

The concern I bring to the House tonight is that when we look ahead to 2013, many of those pressures will not just increase, but explode over the course of the next year. The consequences for many, particularly those in the poorest communities, will be severe. We know that the pressures on the cost of living are not evenly distributed in British society. We know that the poorest 10% spend up to a quarter of their incomes on basics such as housing, fuel and energy, and we know that the prices of those commodities will become higher, not lower, in the coming year. Today we heard from E.ON—the last of the big six companies to announce it—about the increase in the cost of energy that consumers will face in the new year. The companies’ average increase of between 6% and 11% means that the average annual household energy bill will reach an all-time high of £1,300 next year.

I started to campaign on this issue because I could see the impact of debt on my community in Walthamstow, in north-east London. It gives me no pleasure to say that over the past 18 months many Members on both sides of the House, representing a range of communities, have approached me to discuss cost-of living issues, but I also know that London is a harbinger of the pressures that are to come. I know, because I have seen research-based predictions that London rents will increase by 26% over the next five years, that unless we do something about the cost of credit—unless we do something to help those who are struggling with the everyday cost of living—we shall face a society in which debt is just a way of life, with all the consequences that that will have for people.

However, this is not just about the cost of housing or, indeed, the cost of energy. It is also about the everyday cost of getting to work, which is having a great impact in my local community. I have talked to people in Walthamstow who have managed to secure apprenticeships but are forced to travel around London because there are so few apprenticeships in my area. A travelcard covering zones 1 to 3 costs £35 a week. Only people who are able to live at home can afford to take the opportunity to become an apprentice earning £100 a week, and we now learn that rail fares are to rise next year.

Those are pressures on the working poor in our community, but so are changes in the benefits system. Given that there is no spare supply of housing, it does not take a genius to recognise that the 1,000 families in my community who have been told that their housing benefit will be capped in April will have to borrow to make ends meet and keep a roof over their heads. The pressures that the legal loan sharks have decided to increase are the pressures that the amendment seeks to address.

It is clear that these companies are stubbornly resisting what are now widespread concerns about them and the profits they are making. Last year the industry was worth £1.7 billion in the UK; it is predicted that next year one company alone, Wonga, will be worth £1 billion, and it is just one of more than 200 companies that are now operating here. Moreover, the companies are clearly targeting young people, including students, and they have begun to change the terms of their loans. We became aware this week that Wonga is now offering what are supposed to be short-term loans on a 60-day basis. As the Office of Fair Trading has pointed out, the companies are abusing even the most basic consumer protections in the industry. That is why we need the amendment as a starting point, but it is also why we need to look at what else the OFT can do in the year ahead.

If we allow the pressures on consumers and their cost of living to continue and do nothing to curb the legal loan sharks now, we shall see another year in which millions of people are pushed into debt by them. We already know that a third of payday loan users take out loans that they know they cannot repay, and that 50% of people who have taken out loans have missed a payment. Given the additional pressure that those people will face next year, it will be a disaster for Britain if we do not act, and that means that we should think about what the OFT itself can do. I hope that the Minister will tell us tonight whether he will support measures enabling action to be taken now.

We know that the OFT will present new proposals in the new year, and that will present an opportunity for change that could set the tone for the new Financial Conduct Authority. I agree with my hon. Friend the Member for Nottingham East (Chris Leslie) and my hon. Friend the Member for Harrow West (Mr Thomas)—who is not in the Chamber now—that there should be regular meetings with the FCA to consider the industry now, but let us use the OFT to put down those markers.

First, as was pointed out by the hon. Member for Chatham and Aylesford (Tracey Crouch), we must pin down the question of irresponsibility in lending. What is an irresponsible rate at which to lend to people? The irresponsible lending guidance should be redrafted to make clear precisely what the cap should be and precisely what constitutes consumer detriment, in terms of both duration and the amount lent and including the total cost of a loan. Secondly, it should be made clear that it is irresponsible for lenders not to use a real-time credit register and ensure that every loan is recorded.

[Justin Tomlinson (North Swindon) (Con)]

The hon. Lady is delivering a categorical and passionate speech about a very important subject, and she has just made one of the most important points that can be made about that subject. Does she agree that the sharing of credit information in the UK car industry has, to an extent, transformed what was a very murky market, and that lessons can be learned from that?

[Stella Creasy]

I pay tribute to the work that the hon. Gentleman has done in raising issues about debt and credit, and about the way in which companies such as this operate. We know that many of them use a get-out clause, arguing that they could not possibly have known that someone had eight or nine loans at the same time. That is partly because there is no register specifying rates of interest and the number of loans that people are taking out. The OFT should make it clear that that constitutes irresponsible lending, and that loans should be made on a real-time basis. It is no good for supposedly short-term credit to be provided on a monthly basis. I also agree with all those who have expressed concern about continuous payment authorities. I hope that, in the new year, the OFT will make it clear that we must end both the fraud and the debt that they cause.

[Yvonne Fovargue]

Continuous payment authorities also militate against affordability checks. As was established by the OFT’s last review, once companies know that they can dip into someone’s bank ad infinitum, they simply do not bother to carry out the checks .

[Stella Creasy]

My hon. Friend is right. I pay tribute to the work that she has done in this regard, and also in regard to debt management plans.

Bad practice is widespread in this industry. The Financial Conduct Authority will have an opportunity to set the tone when it comes to the sort of consumer credit industry that we want in the future, but let us use the opportunity presented by the OFT to do something about the problems now, and to prevent 2013 from being boom time for the legal loan sharks.

The Minister must be aware that three quarters of consumers are looking towards Christmas with severe financial concerns, and that 10 million of us in Britain feel financially squeezed. Will he state explicitly whether he will support my proposals and take them to the OFT, so that we can be certain that 2013 will be a time for legal loan sharks rather than consumers to be worried? I urge him to read the Bristol research findings—which are already in the pocket of the Department for Business, Innovation and Skills—in order to understand how measures such as this, and total cost-capping, can work, so that we can finally say that Britain is a legal loan shark-free zone.

[Damian Hinds (East Hampshire) (Con)]

It is an honour to follow the hon. Member for Walthamstow (Stella Creasy), and to speak in favour of the spirit of Lords amendment 78.

The problems of high-cost sub-prime debt are widely acknowledged. Although they have come much more to the fore through opinion-formers of late because of payday lenders, they are not, of course, new, and by extension—this is somewhat at variance with what the hon. Lady said—it is not new that Government are not capping the cost of problem credit. It worries me slightly that we use the term “payday” as a catch-all shorthand for all these problems, and I hope that the Minister will reassure us that we are not just talking about payday lenders.

Dealing with problems of this kind requires an integrated approach involving financial capability and the provision of alternatives for people who need access to credit, but it also requires regulation. Disclosure is not enough in this market, especially as it often involves very vulnerable consumers and the ready, easy availability of credit. It could be said that supply sometimes creates its own demand. Some people tend to opt not for the solution that best suits their needs, but for the most recent that they have seen. In seeking to address these costs, however, we need to look at costs in the broadest sense. This is not just about interest rate charges.

[Justin Tomlinson]

On the question of percentage charges, if we displayed everything in cash terms it would be far easier for even the most vulnerable consumer to make an informed decision.

[Damian Hinds]

Yes, total cost of credit information is a good way forward—although, ironically, that would please a lot of payday lenders because, relatively speaking, they would not look quite so bad.

This is not only about interest rates; it is also about ensuring that credit is eventually paid down, and about behavioural charges, which can be difficult to pin down under the annual percentage rate as they apply to some consumers, but not others. An APR cap on its own might seem like a panacea, but, as Members on both sides of the House realise, it is not. Unfortunately, there are ways around caps. The experience of some states in the United States where there has been a 30% cap on payday loans is that the rent-to-own sector gets a great boost, because money can be made in another way: by whacking up the base price of the goods.

If there is to be a cap—and I think there can be a place for a cap—we must talk about what sort of cap it will be. I have always argued that a blunt general cap is a bad idea, because it can only be set either so high as to make no difference or so low as to put some parts of the market out of existence entirely and thereby run the risk of driving more people into the unlicensed part of the market, where someone’s idea of a late payment penalty is a cigarette burn to the forearm.

20:30

Some people say, “Well, let’s go for a product-specific cap”, under which there would be a different cap for payday loans, home credit and so forth. That is sensible in some respects, as it acknowledges the fundamental cost drivers in the market, such as that it costs more to make a short-term loan, that it costs more in percentage terms to make a small loan, and that it costs more to loan to riskier customers. The danger is that we then get cliff edges, however, and all sorts of distortions in the market, with operators shifting around between different categories in search of the most favourable regime.

My preference is to have a more flexible type of cap that is, in fact, more like a curve, and which can operate effectively in all parts of the market without putting any of them entirely out of business. I discussed one version of that in a debate instigated by the hon. Member for Walthamstow (Stella Creasy) in February 2011. I called it a twin-cap approach, with a cap on interest rates—30%, perhaps—and also an arrangement fee cap, perhaps of 15%. Under such a regime, it would be possible to make money in very short-term loans—what we today call payday loans—but only in a responsible manner and at a decent level, and where operators were making longer term loans, the amounts they would be able to charge would fall.

[Stella Creasy]

It is wonderful to hear the hon. Gentleman talking about the positive aspects of capping. I suggest he look at total cost capping, because arrangement fees are not the only issue; there are also issues to do with late payment fees and the incentive they give lenders to push people to keep rolling loans over. Like the hon. Gentleman, I want this to be a future-proof—that is a dreadful term—proposal. We must also ensure lenders cannot get around it, however, which is why we need to cover all the costs involved.

[Damian Hinds]

The hon. Lady is entirely right, and I alluded to that point when I talked about behavioural charges. It is wrong to think we can legislate perfectly for all eventualities in advance, however. This market has an amazing ability to shapeshift and find its way around any regulation we might put in place, as has been seen in the United States.

I would like to hear an assurance from the Minister that under the new regime it will be possible to have a flexible capping regime that allows for all parts of the market to operate while also insisting that they do so in a responsible way. I also seek an assurance that we will not just address “payday” loans, which are a relatively new phenomenon in this country. Home credit is massive, and it has been with us since Victorian times, and has been a problem for quite a long time. There is also pawnbroking, which my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) mentioned. Logbook loans are a big market in the United States; they have not appeared in a major way here, but we can bet our bottom dollar that they would get a big boost if other parts of the market were capped. Rent-to-own is another area.

On the basis of the Minister’s conversations across Government, can he assure us that the Government will continue with an integrated approach that addresses not just regulation but boosting financial capability, starting with children’s capability with mathematics in school? Will they also continue to support operators that provide responsible credit, in particular credit unions? I pay tribute to the work the Government are doing in supporting that sector, and would like them to go further in modernising it and making credit union services more widely available, such as through the post office network.

[Andrea Leadsom (South Northamptonshire) (Con)]

I want to speak briefly on Lords amendments 25 and 36, both of which deal with the issue of competition in respect of the new regulators: the Prudential Regulation Authority that will supervise the banking sector and the Financial Conduct Authority that will supervise business conduct in the banking sector. I seek reassurance from the Minister that having regard to the quality and level of competition in the marketplace will be sufficient to drive a radical improvement in respect of the new challenger banks.

As the Minister knows, the five oligopoly banks in the UK currently have over 80% of all small and medium-sized enterprise bank accounts and personal current accounts. That means access to finance is very limited in respect of choice and types of finance, and as bank balance sheets are currently in a difficult position, it is extraordinarily hard for small businesses to get hold of the financing they need to grow, which in turn will help our economy to recover. So the Bill gives us a once-in-a-lifetime opportunity to ensure that the regulators are, in future, incentivised to ensure not only that banks do not fail, but that we encourage new entrants to the market. At the moment, many would-be bankers find that they are set enormous hurdles, such as having to set up a dealing room just to provide evidence of their ability to do so, yet at the end of an enormous obstacle course the FSA tells them that they cannot have a banking licence. What we cannot have in the future is the PRA and the FCA combining to make it as difficult or more difficult to encourage new entrants into the market. So I hope that the Minister will set out how the regulators of the future will not only tolerate, but encourage new competition.

[Greg Clark]

This excellent debate has covered a number of issues that colleagues from all parts of the House feel passionately about, and correctly so because they are of huge importance to all our constituents, especially the most vulnerable in our society.

In the short time available, I wish to address some of the points that have been made directly by hon. Members. The shadow spokesman, the hon. Member for Nottingham East (Chris Leslie), asked how the powers would be exercised by the Financial Conduct Authority. The powers come directly from the FCA’s remit, and he will be aware that the Bill establishes a far-reaching consumer protection objective. The overall objective is

“securing an appropriate degree of protection for consumers.”

The Bill goes into detail to require the FCA to consider the following: the different degree of risk to be tolerated by different types of consumers; the different needs of different types of consumers for the provision of information; and the general principle that those providing financial services should be expected to provide consumers with a level of care appropriate to their needs. I think that colleagues would recognise that this is a far-reaching objective which gives quite general powers to protect consumers, and it is right that that should be so.

The hon. Gentleman mentioned basic bank accounts, on which some progress continues to be made. There is no universal legal right to a basic bank account, but the industry guidance still stands. It states that if a consumer asks to open a basic bank account and meets the qualifying criteria, the firm should offer them an account and that banks can refuse to open an account for a customer only where the customer has a history of fraud or is an undischarged bankrupt. Those provisions continue.

[Sheila Gilmore]

The previous Government had proposed creating exactly such an obligation, but the Minister’s predecessor, in a debate I had with him in Westminster Hall, refused to contemplate any such provision. Has there been any change of mind on the part of the Government?

[Greg Clark]

I did not have the privilege of participating in that debate, but I can tell the hon. Lady our policy. I also wanted to talk about the very important matter that the hon. Member for Nottingham East and several others raised about the transparency of the information that should be provided, as is the case in the United States, on the actual practice rather than just the intentions of lenders. This is a particularly important point, and what we have said in public—I mentioned this to the Chairman of the Treasury Committee earlier—is that the Government are working with the industry to get a commitment from the banks that they will publish granular data on their lending, particularly in deprived communities. We are meeting the British Bankers Association shortly on that. We have been absolutely clear that if we are not satisfied with that information we will use the forthcoming banking reform Bill to legislate to that effect. That will concentrate minds and I think everyone will be aware of the importance of that question.

It is important to address the context in which we are operating. The Financial Conduct Authority must not regard itself simply as a regulator of incumbents, although it has important responsibilities in that regard. It also has the important objective that my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) mentioned, which is to promote competition. I regard the degree of competition in retail banking as unacceptable. I would like to see more new entrants and I would like them to concentrate, in particular, on reaching those parts of the market that existing incumbents find it difficult to reach. I have made it absolutely clear in the meetings I have had with the shadow Financial Conduct Authority that the competition objective is to be taken extremely seriously, and I and my colleagues in the Treasury will be looking for progress on that.

[George Freeman (Mid Norfolk) (Con)]

I am extremely grateful to the Minister for giving way, and I want to endorse his sentiments and those of my hon. Friend the Member for South Northamptonshire (Andrea Leadsom). Constituents in my area have come to wonder whether there is a danger of our regulating after the horse has bolted. They look to America, where there are more than 20,000 high street banks, and wonder whether we could be doing more to encourage an insurgency, as it were, of new banks to provide the high-street banking service that we need at a time when the old banks are locked up, dealing with the legacies of their mistakes. I echo the Minister’s remarks and wonder whether we can look to the Government to do anything—perhaps not in this Bill but in the coming years—to make that a reality.

[Greg Clark]

I completely agree with my hon. Friend. The Bill has a role to play, because it is very important that the authorities do not put insuperable barriers in the way of new banking bodies and entrants to the market that are seeking approval, because such prospective competitors could offer new services to consumers who are not well served at the moment.

The hon. Member for Nottingham East raised questions about the scope of the FCA’s rule making. That relates to a point made by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) too, so let me confirm that the FCA will be able to make rules on the cost of credit from payday lenders, as well as pawnbrokers and any other provider of consumer credit. It is important that the FCA’s discretion allows it to protect the consumer and the consumer’s interest in all these matters.

The hon. Member for Bishop Auckland (Helen Goodman) is not in her place, but she was concerned about the branch network, as were certain others. It is not possible or right for the Government to require particular branches to be kept open and I am sure that no hon. Member would expect that. Lords amendment 25 will require the FCA to have regard to

“the ease with which consumers…including consumers in areas affected by social or economic deprivation, can access”

the services they wish to use. The FCA might wish to consider that.

The hon. Member for Harrow West (Mr Thomas) is also not in his place, but I think I have addressed his concern about whether the information provided by the banks on their practice in lending will be sufficient. I have commented on the remarks made by my hon. Friend the Member for Chatham and Aylesford, and Lords amendment 78 also applies to the lenders about whom she was concerned.

I join the tributes paid to the hon. Member for Walthamstow (Stella Creasy), who has been energetic in pursuing this issue. She was slightly unfair to refer to a damascene conversion, as some of us on the Government Benches have always regarded the powers that were going to be invested in the FCA as necessary. We have been pleased to clarify that. She will understand that the transition to the new regime will take some time during the next year. The Chairman of the Select Committee chided me earlier for introducing these provisions in a hurry. It is necessary to have a degree of pace. The hon. Lady is absolutely right that during its remaining supervision of these matters the OFT in particular will have the opportunity and the power, given the amendments, to suspend a credit licence if it thinks it is necessary. The discussions that we will have, and I am sure she will have with it, will cause it to be forward-looking rather than simply regulate what has been in place so far. My hon. Friend—

20:45

Debate interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House agrees with Lords amendment 24.

Question agreed to.

Lords amendment 24 accordingly agreed to.

The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).

Lords amendments 25 to 58 agreed to.

Clause 6

Extension of scope of regulation

[Greg Clark]

I beg to move, That this House agrees with Lords amendment 59.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to consider the following:

Lords amendment 60, and amendments (a), (b) and (c) thereto.

Lords amendment 61, 62, 79, 115 to 121, 139, 140, 142, 146, 182, and 203 to 205.

[Greg Clark]

I come now to the Government’s implementation of the independent review of LIBOR conducted by Mr Martin Wheatley. I announced the Government’s response to the Wheatley review in mid-October and three sets of amendments to the Bill have been made to implement those recommendations that require legislation. The first is to enable activities in relation to benchmarks, such as LIBOR and potentially others, to be brought within the scope of regulation under FSMA. The second is to create criminal offences designed to tackle misconduct in the financial sector, including a new criminal offence for making false or misleading submissions in connection with the determination of a benchmark. The third is to provide the FCA with a rule-making power to require banks to submit to LIBOR and other benchmarks. Those amendments complement the market-led reforms to LIBOR as recommended by the Wheatley review. Martin Wheatley recommended that submission to, and the administration of, LIBOR become regulated activities, and amendments 59 to 62 create a framework to enable activities in relation to benchmarks to be specified as regulated activities under FSMA.

Amendment 60 defines “ benchmark” as an “index, rate or price”, defined from time to time by reference to the state of the market and used in relation to investments. A benchmark is capable of being regulated only if it meets that definition. The precise benchmarks that are subject to regulation will be specified by way of statutory instrument. The Government recently published a consultation paper on this legislation. Initially, the activities to become regulated will be LIBOR submission and administration, as recommended by the Wheatley review. However, further benchmarks can be added and the Government are considering and consulting on whether additional benchmarks should be brought within the regulatory perimeter. The types of benchmarks that could be eligible include equity or bond indices, derivatives and commodity or energy benchmarks. The definition of benchmark, as drafted, requires that it be used for one or more purposes that relate to section 22 of, and schedule 2 to, FSMA.

The hon. Member for Nottingham East (Chris Leslie) has tabled an amendment that would extend that definition to include commodities. Let me say first that I totally understand the requirement that we should be able to address some of the alleged abuses that have taken place and have the powers in statute to include those benchmarks that are relevant to some of the concerns that have been expressed recently. We do not believe that there is any requirement to extend the legislation on that. In fact, the Bill was drafted to anticipate the Wheatley review and the work going on in other benchmarks. Benchmarks can represent many things, including commodities or energies, provided that they are traded financially in the way we often see. Under the definition, regulation by the FCA extends to benchmarks that involve financial matters consistent with FSMA and the objectives of the FCA as the financial services regulator.

The Wheatley review also recommended that banks should be encouraged to participate in LIBOR—participation is currently voluntary. In the absence of such submissions, LIBOR would cease to be a representative benchmark and, in an extreme scenario, would not be published at all. Therefore, Lords amendment 79 allows the FCA to require firms to participate in particular benchmarks, while making reference to a “code or other document”. That allows the detail of the requirement to be determined by the benchmark administrator, not by the FCA. It might not be necessary for the FCA to use that power immediately, if at all, and it has recently opened a discussion on how and when the use of that power could be considered.

The Wheatley review also recommended the creation of a new criminal offence in relation to the manipulation of benchmarks such as LIBOR and the re-examination of the criminal sanctions for market manipulation under FSMA. Although such conduct could already be a criminal offence under legislation, this is a helpful clarification of some of the powers. There will be three criminal offences: first, we are re-creating the offence of making a false or misleading statement; secondly, we are widening the offence in section 397(3) to include creating a false or misleading impression as to the market in, or the price or value of, an investment for the purposes of making a profit or avoiding a loss; and thirdly, we are creating a new criminal offence related to misleading statements and impressions in respect of specified benchmarks.

The amendments also replicate the penalties for existing offences: a person found guilty might face a prison sentence of up to seven years and an unlimited fine. The detail of the investments, agreements and benchmarks for which those criminal offences apply will be set out in secondary legislation. That is included in the public consultation currently under way.

Under the current arrangements, where enforcement action results in a firm paying a financial penalty, that is applied as a discount to fees paid by other firms the following year. Without reform, unprecedented fines, such as those relating to the attempted manipulation of LIBOR, would have represented a significant windfall to regulated firms. In future, regulatory fines revenue in excess of enforcement case costs will go to the Consolidated Fund. The hon. Member for Nottingham East and I had an exchange about that earlier. The regulators will be able to net off enforcement case costs before handing over the penalties to the public purse. The new arrangements will apply to FSA fines received from 1 April 2012, so the measure will include the penalty imposed on Barclays in relation to the attempted manipulation of LIBOR.

The Government have announced that £35 million of fines imposed from attempted LIBOR manipulation and other unacceptable behaviour received this year will be used to support Britain’s armed forces community. In addition, £5 million will go to the creation of new, groundbreaking first world war galleries at the Imperial War museum. I hope that the House will agree to these amendments but, of course, I stand ready to respond to any points Members make.

[Chris Leslie]

We have moved on to another series of amendments that have arisen largely as a result of the scandal that was discovered this summer, when it was found that some of the largest banks—obviously, we have heard about the concerns in relation to Barclays—had been manipulating LIBOR, the benchmark from which flows billions, if not trillions, in financial services products and investments worldwide.

The scandal had massive ramifications across the banking sector. It was as though having gone through three or four years of attempted reform following the global financial crisis, after which it was clear that the risks that many in the banking sector had been taking were not properly understood or accounted for, the sector was again knocked sideways. It turns out that it was not just about exuberant risk-taking; it was, in fact, about corrupt manipulation of what people had thought was a trustworthy index. What is worse, it hit the reputation of the City of London in particular. It was all in the name: the London interbank offered rate. This was taken by many other international financial centres to be a moment of weakness for the UK financial services sector, and we saw several examples of other jurisdictions taking action swiftly to capitalise on the disarray in which many in the financial services sector found themselves. It was therefore important that the Government took urgent action and commissioned a review of what happened in the LIBOR scandal.

At the time, we felt that the matter was of such significance that we called for an independent judicial inquiry into the whole question of banking standards and ethics. As I am sure you will recall, Mr Deputy Speaker, we had a very heated debate in which the Government said, “We’ll have a parliamentary banking commission,” while we said, “Go for an independent judicial variant.” Of course, the Government won the day, and hence the Chairman of the Treasury Committee is now demonstrating his stewardship of that commission, which is due to report shortly. I hope that it has an opportunity to look into the wider issue of ethics and standards in banking. The Government have been keen that it starts to focus, almost in pre-legislative mode ahead of the banking reform Bill, on the Vickers reforms, but these questions of standards, ethics and culture also matter tremendously.

The Government made several amendments to the Bill in the House of Lords. In amendment 79, it is envisaged that there will be new provisions for a benchmark administrator, but it is not certain that a private sector organisation, even if it has a certain amount of experience, will be totally immune from conflicts of interest. Did the Government give any consideration to establishing a more independent body or entity for that administrative process? It is vital that the process of finding a new benchmark administrator is open and transparent. Will the Minister give more details about the process that he is undertaking and how the tender process is happening?

On amendment 115, it is important to ensure that the new criminal offences have a strong effect in respect of misleading statements on benchmarking and in general. In terms of its jurisdiction, is the amendment limited to British banking and financial services activities, or does it cover activities undertaken by UK organisations or UK-approved persons in operations in countries beyond our shores? Clearly, in a globalised world, that is relevant to how we see the behaviour of those in the sector.

The Government’s proposals to regulate benchmarking currently apply only to investments. We want to ensure that the regulatory net is also cast around commodities, including oil trading, gas market trading, silver, gold, foodstuffs, and so on. I am sure, Mr Deputy Speaker, that you can think of a range of potential commodities. Therefore, in the marvellous parliamentary way in which we do these things, we are seeking to amend a Lords amendment to ensure that the definition is focused not only on investment but, for clarity’s sake, puts commodities into the Bill. The Government say that they are consulting on this arrangement and might have the power to include those things later down the line but do not believe that there is a requirement to do so at this stage. However, it is time that we got ahead of these issues early on.

In the Public Bill Committee in March, after several hours of debate—it had been a bit of a long day—I asked the Minister’s predecessor, in relation to LIBOR and the benchmarking of these arrangements, “Do the Government have a view about whether there is manipulation and whether changes need to be made to the regulatory arrangements?” He stood up and answered with the single word, no. Of course, he came to regret that stance and several months later—I think it was in June—we learned that a tremendous scandal had taken place. If we have these legislative vehicles, it is important that we take the opportunity to deal with any potential issues.

21:00

[Alison McGovern]

My hon. Friend mentioned ethics a moment ago. Although we need a financial services system that is internally ethical and that has the right culture, there is a broader problem. The LIBOR scandal bit in the way it did not because it was a usual Whitehall story, but because the Government rely on LIBOR, among other indices, to know what is going on in financial services. This might not be the part of the Bill that has been most hotly debated this evening, but we are all reliant on these indices. Is that why my hon. Friend is suggesting that we should cast the net a little wider and try to get ahead of the problem rather than constantly chase ourselves?

[Chris Leslie]

My hon. Friend makes an excellent intervention. She is right. In our debates about financial services we sometimes talk in rarefied or esoteric technical terms, but this issue is certainly of relevance to all our constituents, whose mortgage rates, the interest they pay on loans, and, in the case of oil markets, the price they pay for petrol at the petrol station and the price they pay to heat their homes, as well as prices in the gas and food markets—the price of a loaf of bread, for example—are all too often rooted in the costs of these commodities and investments, as determined by the global trading environment.

This is what it boils down to: it is a question of trust. Hitherto, people assumed that all the market benchmark arrangements were simply transparent exchanges of data and prices that showed the true value of an investment, product or commodity, and that people were buying and selling in an open and fair process. It turned out that those in the know, who were often highly paid traders in the bigger banks—incidentally, even more revelations will come out over the coming months about the banks that might have been involved in LIBOR—knew how to wangle the system and play the market in a way that helped not only the profits of their particular company, but that boosted their own personal bonus arrangements. It was a question of using other people’s money in order to shift massive volumes of trades. Even if the changes in price were fractional and seemed irrelevant, when they were multiplied by the billions of trades that were taking place they could have massive financial advantages to those traders involved.

It was alleged recently that banks rigged electricity markets in the United States and record fines have been issued. That involved British institutions, so British regulators should be explicitly equipped to tackle attempts to rig commodities trading, whether it be spot trading, forward contracts, futures contracts or hedging arrangements. Global commodities markets include a vast range of products, such as grains, fibre, other food, precious and industrial metals, energy, carbon offsets and so on.

As I have said, British households are affected by commodity market manipulation—perhaps even more than attempts to rig LIBOR. Commodity speculation has contributed to the record costs of staple foods in recent years. In fact, some people argue that the riots and social unrest in Egypt, Tunisia and other countries were influenced by pricing issues and distortions.

Last month, after the Energy Secretary made a statement to Parliament, the Financial Services Authority and Ofgem confirmed that they were conducting an inquiry into claims that British companies manipulated the wholesale gas market on 28 September. The Government have said that it would not be appropriate to use legislation to cover pure commodities, such as gas, but that if commodities are referenced by derivatives or other financial instruments, it is covered by the definition of investments. However, a derivative instrument may essentially be a traded instrument and there is no reason for it to fall within that definition. It could be regarded as an insurance product and so does not fall clearly within the definition of investments in Lords amendment 119.

Total, the French oil company, recently made open allegations against one of the PRAs. That is not the PRA as we know and love it—the Prudential Regulatory Authority—but another acronym. Price reporting agencies are companies or organisations that essentially gather information, almost as a journalist might do, and figure out broadly what is happening in the market. However, it is not necessarily a true reflection of what is happening. Total alleged that there were erratic processes involved and that it was not a true reflection of the state of the market. There were also questions over the methodologies of the price reporting agencies. Does the Minister think that price reporting agencies need to be within the regulatory ambit? Again, they are important component players in the financial services sector, but are not familiar to all our constituents—but by goodness, they would become familiar to all our constituents if they were not trusted or were seen to be failing in some way.

[Mike Freer (Finchley and Golders Green) (Con)]

Much commodity trading is still focused on trading on the floor, rather than on the screen. Does the shadow Minister not accept that as the trend moves towards trading on the screen, that should drive transparency? Should we not let the transparency of the market work first, before we rush to regulate?

[Chris Leslie]

I do want to see more transparency. Electronic data exchanges certainly have the potential to provide the regulators, including the Bank of England, with more real-time transactional information about what is actually happening. I do not necessarily want to see regulators wading through reams of information, but I want to ensure that, if need be, they have the scope to act. It is not clear that the Financial Services Bill, as it first entered Parliament in February, would have captured the LIBOR benchmarking situation within the regulatory perimeter. There were suggestions from the FSA that it was not something that it could deal with. That was not good enough and the Government have come forward with amendments. I want to ensure that those amendments allow the regulators to trigger inquiries and oversight for all benchmarking indices and arrangements, especially in the commodities market.

The hon. Member for Harlow (Robert Halfon), who has been campaigning on oil and petrol prices, has called for an OFT and FSA investigation into manipulation by oil firms in recent times. The United States Commodity Futures Trading Commission has raised questions about price fixing and manipulation in the silver market. That study was inconclusive, but questions linger over metals markets more broadly. The Minister’s good friend, the European Commissioner for Internal Market and Services, Commissioner Barnier, has suggested that all commodity indices should be covered in this way. Rather than waiting for European regulators to ensure that this happens, why do we not take this opportunity to deal with the issue?

We should not just say that benchmarking means investments; it is vital that we put it beyond doubt that the question of commodities is included. It is a stitch in time to ensure that we cast the regulatory perimeter correctly. I commend amendments (a), (b) and (c) to Lords amendment 60 to the House.

[Alison McGovern]

I promise not to test your patience, Mr Deputy Speaker, or that of the House by speaking for too long. Some, I know, will be of the view that indices and benchmarks are dry, dull, technical subjects—[Hon. Members: “Never!”] Hon. Members may say that, but I suspect them of sarcasm.

I begin with an explanation of why I think this part of the legislation so important, and why the amendments tabled by my hon. Friend the Member for Nottingham East (Chris Leslie) are crucial. In my view, they relate directly to the subject that currently fills our newspapers and television screens—the indignity and horror of food banks. The reason my constituents, and those of other hon. Members, cannot just pop to the shops and buy food is that food costs more than the amount of money in their pockets. In the long term, the answer to that problem is not charity—grateful though we are for those efforts—but a food system that provides sustenance for people to buy in shops at a price they can afford. Price is not a technical, dry issue that ought to be left to economists in the academy; it should be of importance to every family, as I know it is to every MP.

Food prices unite those who are finding life difficult at the moment both at home and far away. Although I applaud the efforts of those who try to help people out, in the end we must seek a better solution. Whether we like it or not, since the 18th century this country has taken part in global trade. We had a strategic role in that which I will not bore the House with, but part of it means that we, more than others, have a special responsibility to understand global trading systems, not least the one that ensures there is enough food for us to buy here at home, and that farmers in this country and far away get paid a fair price.

This morning I was with the UN Secretary-General’s special representative for food security. He described two current problems in the commodity market that I hope will help people to realise why we must understand that phenomenon. First, global food prices are currently extremely volatile. Secondly, although prices are moving sharply up and down, they are trending upwards. That means that those most vulnerable to the price change in that commodity face an ever-worsening scenario as they try to feed themselves and their families. How can benchmarks and a better understanding of the data help? Well, when we understand those movements we can try to find out what is behind volatility in global prices.

Briefly, let me take hon. Members back in time to about 2005 until the end of 2007. Economists around the world were busy writing papers on derivatives and what we now call shadow banking, and saying that sharing risk in that way was a good idea and helped to manage investment and the finance markets globally. We now know that facts and information were available that we could not see, and my question concerns what is going on now that we cannot see, specifically in relation to food prices. Is there an issue with derivatives based on commodities? My hon. Friend has already given some indications of why we might think that.

21:09

The UN has done some work, and some academics around the world think there is a problem with derivatives based on commodities, and that just as sub-prime markets were an unseen problem for too long, there may be problems now that we cannot see. That is what makes benchmarks and indices so important. We need verifiable, trustworthy numbers that we can investigate to ascertain what is happening in global food markets. As I have said, this is not a techie, dry subject that matters only to economists and those who pore over numbers; the reality is that it matters to every one of our constituents, but most especially to those with the least money to spare.

[Sheila Gilmore]

Will my hon. Friend reflect on the fact that trading in commodity derivatives can skew investment and whole industries if not properly regulated? For example, I visited the jute museum in Dundee, where one display made the point that the jute lords made more from trading in futures than they made from production. That might have made them less interested in diversifying their manufacturing industry, which has completely died.

[Alison McGovern]

I thank my hon. Friend for that highly appropriate intervention. When the history of Great Britain is written, it will show that that part of the east coast of Scotland has had a great influence on economics throughout. The example from Dundee is a good one.

All hon. Members look back at global financial trading and markets and wonder how we got to the situation we found ourselves in. When the shadow banking market and complex derivatives and products were created, people became much more interested in them than in the real economy and the fundamentals of our economy. They saw the financial system as a servant to the rest of the economy rather than the other way around. I hope that view is shared broadly on both sides of the House. The Minister is nodding, but I am not entirely sure he agrees with that specific point. I will live in hope and imagine he does.

When the Minister is consulting on whether to broaden the Bill’s reach from the indices that I have mentioned to commodities, will he consider the impact of escalating food and oil prices not only on his constituents and mine, but on those who live closest to the extreme poverty line in the poorest countries? Will he consider the price of maize and wheat in very poor countries, where there is no social support system and no welfare state security net of the sort we have in this country? Will this country take a leading role in properly understanding what is happening in that market?

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

To use the increase in food commodity prices as an argument for increased control over derivatives trading is a little far-fetched. Surely increased prices have much more to do with the increased world population and the weather than they have to do with commodities trading.

[Alison McGovern]

As I have said, this morning I listened to a presentation from the UN Secretary-General’s special representative on global food security. We discussed the matters that the hon. Gentleman mentions, but there was strong interest in whether the trading of commodity derivatives has played a role or had an impact in increased prices. The hon. Gentleman may suggest that its effect is negligible, and I would be happy to see any evidence he can forward to me. As I try to understand the phenomenon, I am happy to look at numbers and think about the evidence. I am an empiricist if nothing else; we should always consider the evidence. One of the problems to date, however, has been the availability of information, and making it clear and evident for all to see. I have tried to make the point that people looking at the world economy could not, for specific reasons, necessarily see the problems relating to sub-prime mortgages. As my hon. Friend the Member for Nottingham East has suggested, we should try to get ahead of the problem and ensure that there are no longer problems that we simply do not see.

[Gordon Birtwistle (Burnley) (LD)]

The hon. Lady is making a good point, but did the person whom she met this morning give her alternatives to the derivatives and commodities markets? The worldwide food supply is decided by commodities buying. There is a drought in America, so the price of wheat goes up. There is heavy rain in this country, so we have problems ourselves. There are problems in Bangladesh and all around the world that push up the price of food. The same is true for oil; when there is a shortage of oil, the oil price goes up. Did the gentleman whom she spoke to this morning provide an alternative to what we have now? Maybe we could look at it and come up with some suggestions ourselves.

[Alison McGovern]

I thank the hon. Gentleman for his intervention and his compliment that he thinks my point is not wholly without merit, but it might test your patience, Mr Deputy Speaker, if I tried to shoehorn into the debate on the amendment possible solutions to the global food crisis and productivity in agriculture.

On derivatives, in agriculture production there is a need to hedge. There needs to be some kind of financial security to take account of unforeseen weather events and so on, so of course there is a need to hedge, but that is not what I am talking about. The question is whether some of the recent high-volume, high-speed forms of speculation and trading have had an impact on the global food price. I suspect that they might have, but it would be nice to have more information.

[Mark Durkan]

When some of us raised these issues in the previous Parliament, the then Government pooh-poohed the whole problem of speculation in relation to derivatives and so on. Does the hon. Lady share the concern that, as banks, hedge funds and all our pension funds try to work their way towards replenishing themselves after the crisis, there is a danger that they will go back to the bad ways of speculating in all sorts of commodities? Does she think the Government should prioritise this issue during their G8 presidency next year, and discuss with other Governments how to circumscribe the capacity of financial institutions to play dangerous games with this sort of speculation?

[Alison McGovern]

I thank the hon. Gentleman for his intervention, which was characteristically well made. I share his fear, and his point about the G8 is absolutely correct. It will be great to have the G8 summit in Northern Ireland. I am sure that the Minister has heard the hon. Gentleman’s point and will duly feed it back to the Prime Minister, because there is no doubt that it is important.

In conclusion, underlying what we are trying to achieve is a financial system that has appropriate oversight. Given the importance—we now know this—to our everyday well-being and comfort of what appear to be financial technicalities and bits of information that people do not necessarily connect with the realities of life, I hope that the Government will pay the most careful attention to the results of the consultation on commodities, because we might have a genuine opportunity to set in train rules that will help us to spot the awful crashes and difficult phenomena of the future.

[Greg Clark]

It is a pleasure to respond to this short but important debate.

The hon. Member for Nottingham East (Chris Leslie) referred to the heated exchanges before the summer. They were necessarily heated because they concerned a major scandal that did great damage to the country’s reputation. The whole House feels strongly about this matter because the industry is vital to the country’s economic future. About 2 million people are employed in the financial services and related industries, most of them in capacities far removed from the ability—and still more the inclination—to engage in the kind of behaviour that came to light in the LIBOR scandal. It is a particular source of outrage that many ordinary working people across the UK with careers in the banking industry have been besmirched by the behaviour of people far from them. As a result, in their ordinary working lives and in conducting their activities, they found themselves bracketed with people who were shaming an industry that they were proud to work in—an industry associated with high standards of sobriety and propriety—and it is particularly important that we act decisively and firmly against the perpetrators of the manipulation that came to light in the summer.

The amendments do precisely that. All Members will recognise the pace with which we have responded, given that the allegations came to light in late June. We immediately asked an independent reviewer, Martin Wheatley, to look into the allegation. He conducted his work over the summer and reported in September. The Government considered all his recommendations and have adopted every one of them. The fact that we are here, in early December, reaching the final stages of legislation to act on those recommendations shows that the Government and the House have taken the allegations very seriously and are acting to restore the reputation not only of the City of London, but of the financial services industry in this country. I hope that the world will see that, when something comes to light that objectively is scandalous, we will not stand by and watch it happen, but will take legislative action immediately.

I shall refer to some of the points made by the hon. Members for Nottingham East and for Wirral South (Alison McGovern). Let me deal first with the independence of benchmark providers. There are, of course, lots of different benchmark providers, not all of which—it is important to say—were associated with the problems that LIBOR and the British Bankers Association had. The Wheatley review recommended that the BBA step aside from setting LIBOR. Future administrators, which may be private, commercial or otherwise—there is no restriction—will be subject to the type of regulation powers contained in these amendments. On LIBOR specifically, the tender committee chaired by Baroness Hogg is in its early stages. We will of course update the House on the progress it makes when it considers who will operate the LIBOR benchmark in future.

21:30

The hon. Gentleman asked whether the powers in the amendments will be restricted to the UK or whether they will cover other jurisdictions. The answer is that there needs to be some connection with the UK, as might be expected under legislation passed by this Parliament, but the amendments take a broad approach to the term “connection”. There will be a sufficient connection if, for example, a statement that could have contributed to the manipulation of benchmarks was made in or from the UK, if the person at whom it was aimed was in the UK, or if there was an agreement or conspiracy that such activity would be entered into in the UK. We take a broad view of that. He also asked whether the Bill was wide enough to bring PRAs—price reporting agencies, rather than the Prudential Regulatory Authority—into regulation. The answer is yes, through the secondary legislation that is provided for by the Bill. Where PRAs are used in relation to investments, including derivatives, futures and options, they will be included.

The hon. Gentleman asked whether the powers should explicitly consider commodities. Let me make it absolutely clear that there is no question whatever but that it should be possible to include benchmarks such as those in the gas or energy markets. The consultation provides for that and it is precisely what Martin Wheatley’s report envisaged. Where benchmarks are used for financial investments and financial transactions, it is right that they should be vested in that way, but it would be wrong simply to vest powers for the regulation of every commodity in the Financial Conduct Authority, because commodities can represent many things. The term “commodities” is broad. We would not want the Financial Conduct Authority to regulate benchmarks relating to trading in live cattle or lean hogs, for example, even though they may fit the definition of “commodities”. The current definition means that the regulation of benchmarks by the FCA extends to all the benchmarks that involve financial matters, as is consistent with the Financial Services and Markets Act 2000 and the objectives of the FCA as a financial services regulator.

For that reason—this has been considered in the other place as well as this place—the powers that we are taking have not just LIBOR in mind, but the other benchmarks that could give rise to similar concerns and which in recent days have done so. The criminal offence will pertain to those benchmarks as well as LIBOR. They will ensure that investors, whether in this country or around the world, can have confidence that we have the fullest possible regime of sanctions to prevent and govern any demonstrated misconduct or attempted manipulation of LIBOR.

Let me say a little about the comments that the hon. Member for Wirral South made. She talked about her concerns about the use of derivatives in food commodities in particular. The use of derivatives in food markets can achieve precisely some of the advantages that she talked about—that is, enable farmers, whether in this country or around the world, to get investments into expanding production in anticipation of future demands. The process brings forward into the present day the needs of the future; that is what futures markets are about. It is important that farmers in this country, but also around the world, who might not have access to capital can make those connections, so that they can supply in advance what will be required in the future. There is some research, which I would be happy to share, on the contribution that derivatives have made to ensuring adequate food supplies not just in this country but around the world.

I shall conclude by saying that the regime that we are putting in place will provide a swift and robust response to the totally unacceptable set of practices that was unearthed before the summer. We have moved further and faster than any other jurisdiction in the world, and I hope that the House will see fit to approve the provisions tonight so that we can move forward and demonstrate to the world that this is the best jurisdiction in which to trade.

Lords amendment 59 agreed to.

Amendment (a) proposed to Lords amendment 60.—(Chris Leslie.)

Question put, That the amendment be made.

21:35

Division 119

Ayes: 200

---

Labour: 197
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Democratic Unionist Party: 1

Noes: 266

---

Conservative: 229
Liberal Democrat: 36

Lords amendment 60 agreed to.

Lords amendments 61 to 97 agreed to.

[Mr Speaker]

With the leave of the House, I propose to put Lords amendments 98 to 290 together.

[Chris Leslie]

Amendment 98 is in a separate group relating to clearing houses, and I would like to make some remarks.

[Mr Speaker]

The Minister will need to move amendment 98, and can do so.

Clause 27

Powers in relation to recognised investment exchanges and clearing Houses of Parliament

Motion made, and Question proposed,

That this House agrees with Lords amendment 98.—(Greg Clark)

[Mr Speaker]

With this it will be convenient to consider Lords amendments 99, 122 to 127, 224 and 225.

[Chris Leslie]

I would have thought the Minister wanted to speak, as Lords amendment 98 is the lead amendment of a group relating to the extension of resolution schemes from banks and building societies to investment firms and in particular UK clearing houses. There is a wider set of issues, therefore.

UK clearing houses stand between two parties in a trade, ensuring that a deal goes through in the event of one party defaulting. Once a deal is agreed, the transaction is honoured even if one party goes bust.

The Government’s decision to extend a set of resolution arrangements to clearing houses is incredibly important, as the debates in the other place set out. Clearing houses are highly significant entities nowadays. After the 2009 G20 summit, it was clear that several hundred trillion dollars of market transactions, especially in over-the-counter derivative arrangements, were part of the clearing house ambit. Therefore, a failure in a clearing house could clearly mean a big problem—a series of problems—for the financial services sector more broadly.

I have a series of questions for the Minister, as I would be grateful for his help in respect of the provisions of this amendment and others in this group. First, I want to ask him about today’s Financial Times, the front page of which talks interestingly about the extension of resolution plan arrangements from covering just companies within the UK to an agreement between the United States and the UK that the Bank of England seems to have struck which will mean, for the first time, that there is a template for larger, serious, significant international financial institutions to have resolution arrangements that span borders. Clearly that is relevant to these amendments on clearing houses. [Interruption.] I can tell that hon. Members are very familiar with these arrangements. Clearing houses have a great deal of cross-border interoperability, they cut across jurisdictions and there is a need to co-ordinate their work. Will the Minister assure the House that steps will be taken to ensure that international efforts are made to promulgate resolution arrangements that also cut across borders for clearing houses?

Central counterparty clearing arrangements these days contain a requirement also to hold Government bonds as collateral. As we know, Government bonds are not what they once were; there have been some questions about their safety. The Minister needs to explain: are we guarding against the deterioration of standards in central counterparty collateral arrangements? If we are increasingly reliant on gilt-edged securities of an international variety, are we actually ensuring that there is sufficient strength behind our central counterparty clearing arrangements?

Finally, may I ask the Minister a further question? Basel III arrangements will be ensuring that banks that are members of clearing houses need to capitalise their exposure to central counterparty contingent liabilities. Can he just give us a sense of the impact on the UK banking system, particularly on its capital adequacy, of processes that will see a rapid change on central counterparty arrangements from an over-the-counter arrangement to an exchange-based arrangement? If the regulators are insisting more and more on exchange-traded arrangements in those clearing houses, there will be an imperative for those clearing houses to become more and more price sensitive and they will be more desirable for the market more generally. That is why we are seeing so many mergers and acquisitions of clearing houses. Are these costs eventually going to be finding their way on to customers and our constituents? I would be grateful if the Minister replied.

[Greg Clark]

Let me give a bit of context to amendments 98 and 225. Taken together, they make provision with regard to the Bank of England’s role in insolvency proceedings relating to a UK clearing house. The amendments will ensure that the Bank of England is put on notice of any application for administration in respect of a UK clearing house, of any petition for a winding-up order in respect of a UK clearing house, of any resolution for the voluntary winding up of a UK clearing house and of the proposed appointment of an administrator of a UK clearing house. That will give the Bank the opportunity to consider whether to exercise a stabilisation power provided for in part 1 of the Banking Act 2009 in order to minimise the impact of the clearing house’s failure on financial stability. Amendment 225 gives the Bank of England the power to direct insolvency practitioners appointed in relation to a company that is or has been a UK clearing house. The direction would operate without prejudice to the existing statutory requirements relating to company insolvency.

The financial crisis of 2008-09 highlighted many deficiencies in the regulation of the global financial system. Most importantly, we found that the disorderly failure of systemically important banks could have catastrophic effects on the stability of the UK and international financial markets.

The hon. Member for Nottingham East (Chris Leslie) mentioned the piece that featured in the Financial Times today, which was a joint paper, in effect, between the Bank of England and the Federal Deposit Insurance Corporation on plans for resolving global systemically important financial institutions. The Bank of England and FDIC paper is a perfectly proper collaboration between brother regulators across the world and is exactly the sort of approach we would expect regulators to take to make the financial system safer. It should be seen as part of the wider international and European work to deliver a credible resolution regime for the biggest banks and for—

22:00

Debate interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House agrees with Lords amendment 98.

Question agreed to.

Lords amendment 98 accordingly agreed to.

The Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).

Lords amendments 99 to 290 agreed to, with Commons financial privileges waived in respect of Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203.

Business without Debate

Monday 10th December 2012 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People

That the draft Electoral Registration Data Schemes (No. 2) Order 2012, which was laid before this House on 30 October, be approved.—(Greg Hands.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Single Market Act II

That this House takes note of European Document No. 14536/12, a Communication from the Commission: Single Market Act II - Together for new growth; and supports the Government’s aim of prioritising growth enhancing measures.—(Greg Hands.)

Question agreed to.

Business of the house (12 December)

Ordered,

That at the sitting on 12 December, notwithstanding sub-paragraph (2)(c) of Standing Order No. 14—

(1) opposition business may be proceeded with for three hours, and shall then lapse if not previously disposed of, and

(2) the backbench business set down for consideration may be entered upon at any hour, may be proceeded with, though opposed, for three hours, and shall then lapse if not previously disposed of.—(Greg Hands.)

Environmental Audit

Ordered,

That Ian Murray be discharged from the Environmental Audit Committee and Chris Evans be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

committees

[Mr Speaker]

With the leave of the House, we will take motions 9 to 11 together.

Ordered,

Justice

That Chris Evans be discharged from the Justice Committee and Andy McDonald be added.

Public Administration

That Michael Dugher be discharged from the Select Committee on Public Administration and Mr Steve Reed be added.

Transport

That Julie Hilling be discharged from the Transport Committee and Sarah Champion be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Schizophrenia Care

Monday 10th December 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

22:02

[Mr Charles Walker (Broxbourne) (Con)]

Let me start by saying that I am a great enthusiast and a great optimist. I enthusiastically believe that in the area of schizophrenia we need to do more of what we do well and less of what we do badly—more of the good stuff and less of the bad stuff. I pay tribute to the fantastic men and women who work in the NHS in mental health; they are the unsung heroes. It is not the glamorous end of the NHS but it is, perhaps, the most important.

I want this to be an upbeat speech—I really do—but I think that at the beginning we must focus on what we do badly. First, I am very concerned at the fact that the life expectancy of someone who has a diagnosis of schizophrenia or psychosis is up to 20 years less than that of someone who does not have that illness or disease. I do not believe that that is acceptable in a first-world civilised society; we cannot tolerate it any longer. I am concerned that young and middle-aged men and women around the country who have a diagnosis of psychosis and who live with schizophrenia might well end up smoking 60 or 70 cigarettes a day, gaining huge amounts of weight and living pretty desperate lives. Their drug therapies cause them to feel pretty miserable and disconnected, and that is why we end up in this terrible and desperate situation of such a lowered life expectancy.

Secondly, we need a system in which people are not frightened. Being ill is not a pleasant experience. People are naturally fearful, but too many people suffering from psychosis or schizophrenia are very scared and very frightened far too much of the time. That is very upsetting for many people. It is upsetting for them and for their friends and families, and I am afraid it is upsetting for those of us who observe this going on and want to change things. Again I say, we are a first-world society and we cannot have people feeling frightened and separate.

Thirdly, we lock up far too many people who are ill. There are 7,000 people in secure units, many of whom should not be there, but we do not know how to get them out. We do not know how to take them out of a secure unit and reintegrate them into society. Those processes are not in place, so we remove people’s liberty, sometimes for their own good to stop them harming themselves, and in the most extreme cases to stop them harming others. But we must ensure that when they are in these places they feel safe and secure and that the systems are in place to enable them to return, as far as possible, to mainstream society.

Finally on the bad things that we must stop doing, only one in 10 people who are diagnosed with psychosis or schizophrenia are in work. We have an unemployment rate of 92% and we all know in this place that employment is the route to fulfilment: being in a career with friends and colleagues, having a sense of purpose, being able to get up in the morning to go to a place that is welcoming and to which we want to go.

Let us now be upbeat. What we need is a manifesto of good things. We need more and earlier interventions, because the quicker we can deal with a problem the more chance there is that it will remain manageable and the less likely it is to escalate to something far more serious. That is why we need early interventions.

[Mr Brooks Newmark (Braintree) (Con)]

I appreciate that I did not speak to my hon. Friend about his debate, but I have been listening to him and I congratulate him on holding the debate. Does he agree that another bad thing that happens with schizophrenia is that people are left to roam the streets and end up homeless, and that a huge number of people are afflicted by schizophrenia and other mental illnesses with whom we need to deal?

[Mr Walker]

My hon. Friend makes a very good point. I have had an extremely good paper from St Mungo’s dealing with that very issue.

We also need to do more listening. We must stop talking over people who suffer with psychosis or schizophrenia. They are warm, live human beings. They exist. We tend too often to talk over them and about them, not to them. Certainly there will be times when they are in crisis, but when they are we need a crisis plan so that they can tell us how they want to be treated, looked after and cared for—how we can help to secure their dignity. Then we need to ensure that they have advocates who can sit alongside them and be their voice—someone they trust at a time of crisis, illness and distress.

We need more support for carers—the people who love them, the people who stand by them day in and day out, trying to do the right thing, trying to get them the care that they deserve and require—their champions. Let us not forget in this place the important role that carers play in being the champions. We need much more talking and listening to carers, involving them in the process. They will know so much more about the individual being cared for than probably anyone else.

Then we need to provide more training for people working in the mental health arena. It is a demanding environment. In the acute settings people tend to be admitted who are very ill. The threshold for admittance is so much higher now. The staff need to be trained to deal with and to care for these people. It is no reflection on the staff that I am asking for this. I want to stand shoulder to shoulder with the staff. We want to stand alongside them and help them to deliver the care that they want to deliver, and that their professional pride demands that they deliver.

[Robert Halfon (Harlow) (Con)]

I congratulate my hon. Friend on securing the debate and on his knowledge of the subject. He talks about early intervention. I recently visited the North Essex Partnership NHS Trust, which works on mental health. It puts people into schools to identify children and young people who are developing such problems, which has a huge impact and manages to stop more serious problems developing later.

[Mr Walker]

My hon. Friend makes an excellent point on early intervention. It is about getting there before the crisis occurs and making sure that people who are at risk have the support they need to manage their illness so that they end up in a good place, not a frightening place.

We need more peer support. When someone goes through a mental health crisis, many people tell them that it will get better, but they might not be believed, as things can look pretty dark and desperate at the time. There are many professionals around, but perhaps that person wants to talk with someone who has been there, travelled through the fire they are going through and come out the other side, someone who can sit with them and say, “We’re going to work through this together. I’m not just saying this; I’ve actually done it. I’ve been where you are and I’ve come out the other side. I’m going to take you by the hand and we’re going to walk through this together.” That is peer support, and we need to encourage it and see more of it.

We need more intermediate services, because many people are terrified of going into acute care and too often the experience is not a good one. Being hospitalised is frightening. They do not want to go into acute care because they are terrified by that prospect. Let us think more about intermediate care. When things are getting on top of someone and they are feeling stressed out, that perhaps the ground is going from underneath them and that things are getting out of control, there should be a place they can go in the community, a crisis house, where they can say, “I need help, because I feel that I’m going to have some troubled times ahead.” There they can be told, “Come on in. We’re going to work together for the next couple of weeks. We’re not going to be a crutch and you aren’t going to be here indefinitely, but we will work together for the next five or 10 days or two weeks to get you back on your feet and out there again.”

We also need uniform reporting. I want diversity of provision, because out of diversity comes innovation, but I also want to know what is going on. I want to know when we are successfully meeting the needs of those with psychosis and schizophrenia, but I also want to know when we are not, because that is when we can start doing something about it. With heart disease, cancer or stroke, we can check the league tables and know exactly what is going on, but it is much more difficult with mental health problems, particularly psychosis and schizophrenia, so we need uniform reporting. I am concerned that the Care Quality Commission is stopping its in-patient surveys in mental health wards, which I think is a mistake. I think that it is regressive and that it needs to be revisited. I hope that I can bring the focus of the House to bear on that issue.

Patients need a voice. They need to be able to tell us what is and is not working. Most of all, we need to ensure that people have a chance of living fulfilled and complete lives and that a diagnosis of psychosis or schizophrenia is not the end of the road. They should not hear, “That’s it. Society will now turn its back on you. You’re in real trouble and you’re going to be removed.” We must have absolutely no more of that. We have an obligation to work together on mental health problems in this place and with the NHS and to say to people, “We’re going to work together to get you through this. You have a right to have a chance for a fulfilled, happy and productive life. What has gone before is not good enough, but what will come will be better.”

I have said that I am an enthusiast and an optimist, and I am optimistic. We have the bit between our teeth, we are moving ahead and mental health is being talked about, but schizophrenia and psychosis is a difficult area for politicians and for the public, because so much misinformation and nonsense has been talked about it for so many years. It is going to be the hardest mountain to climb, but climb it we must, because we have an obligation and a duty in this country to take everyone with us. We must not leave people behind because they are ill but take them with us on a journey together—a journey towards wellness.

I have spoken for far too long and I am now much more interested to hear what the Minister has to say. I conclude by saying this: I speak a lot about mental health, but I am fully aware that an army of people out there, professionals and charities, do mental health and do it extremely well. Mind and Rethink are fantastic organisations that campaign daily, hourly, by the minute to ensure that people with mental illness get a voice. As a result of their hard work, those people are getting a voice in here, and that is a good and positive thing.

22:15

[The Minister of State, Department of Health (Norman Lamb)]

I sincerely congratulate my hon. Friend the Member for Broxbourne (Mr Walker) on securing this debate on an incredibly important subject. It is good that in this House today we have debated people with learning disabilities and how they get treated by the system, and now we are debating people with schizophrenia. In the past, those two very important groups of people have often been rather neglected, and it is good that Parliament is focusing on them and how the system treats them. I pay tribute to my hon. Friend’s work as an advocate in mental health. It is very important that people speak up for those with mental health problems, and he and one or two other MPs have done us a good service by being prepared to talk about it openly. I pay great tribute to his work in this field.

This is a timely debate. The premature mortality that my hon. Friend mentioned, the stigma, the human cost and the statistics are as well known as they are shocking. Together they add up to a compelling call for action, and that makes the recent report, “The Abandoned Illness”, very important. It sets out how things must change, how services have to be more accessible, how staff have to be fully supported, how integration of services can change lives, and, of course, how people’s mental and physical health must be treated equally. Too often in the past, mental health has been seen as the poor relation. The Government have established the principle of parity of esteem, and we now have to make it a reality. This debate is an important moment at which to consider that.

The Government have published a mandate for the NHS Commissioning Board which sets out our key priorities for the service. The mandate goes further than ever before in setting out the priority that the Government give to mental health, and it makes it very clear that mental and physical health problems should be treated in a co-ordinated way with equal priority. We expect the NHS to demonstrate real progress on this by March 2015. We have also tasked the NHS with making progress in specific areas. Accessing care and treatment should be as easy for people with mental health conditions as for those with physical conditions, so we have asked the NHS Commissioning Board to consider new access standards, including waiting times, for mental health services. It is remarkable that in the past decade we have introduced waiting time standards for physical health—the 18-week wait—and yet in mental health there is no comparable standard. That has to change.

The NHS outcomes framework includes four measures that relate specifically to mental health. Three of those focus particularly on patients with severe mental illness: premature mortality in people with serious mental illness; the employment of people with mental illness, which my hon. Friend spoke about very movingly; and patient experience of community mental health services. Many other outcomes that we are measuring will be as relevant to people with mental health problems as to people with physical health problems. There is no magic bullet, but I think that this will help to kick off the drive towards real parity of esteem, just as it says in “The Abandoned Illness”.

On top of that, a lot more needs to be done to improve access to psychological therapies for people with severe mental illness. Much of the consideration of the improving access to psychological therapies project has focused on anxiety and depression, but we know that psychological therapies can also be very effective for those with a severe mental illness.

Six local projects, backed by £1.2 million of Government funding, are working on demonstrating the benefits of IAPT in treating people with a severe mental illness or personality disorder. Over the next five months, these organisations will share what they have learned about how best to deliver evidence-based treatments. The work will include demonstrating how this group can get better access to psychological therapies, spreading good practice to other services, and providing good quality data—this has so often been missing in the past on mental health—on how services can be improved for patients.

One of the report’s main findings was that there are far too many people with a mental illness in in-patient wards—my hon. Friend made this exact point—who do not need to be there. Furthermore, many wards are not the calm therapeutic environments that are conducive to improving patients’ well-being. Everyone in the House knows how much of a problem this is. It is not good for patients, families or the staff who work there.

The mandate of the NHS Commissioning Board sets out plans to introduce the friends and family test for all NHS services, including those for mental health in-patients. This will allow people to feed back their experience by saying whether they would recommend a particular service to their loved ones. I should also say that I am looking into the issue of the Care Quality Commission survey. I understand that it was terminated because of concerns about its accuracy and value, but the fact is that it applies in other parts of the health service and I am concerned that mental health services lack such a survey.

Our cross-Government mental health strategy, “No health without mental health”, also recognises the problem. Among its core objectives it lays out, first, that people who are acutely ill need to get safe, high-quality care in an appropriate environment when they need it and, secondly, that following acute illness people should be helped and supported to recover. This will mean different things to different people, but for many it will mean services working together to help people live independently, to find work and to play an active role in society. That means people moving from in-patient wards into the community, with support. This same service is integrated with early intervention, which my hon. Friend has also mentioned, and crisis teams can also support people early in their illness or during an episode of illness, so that they do not progress to needing in-patient care.

Our implementation framework sets out specific actions that local organisations can take to make that a reality. The framework was co-produced by five leading mental health organisations, including Mind and Rethink. In addition, we are already measuring employment for this group as part of the NHS outcomes frameworks for public health and for adult social care.

[Mr Newmark]

On the subject of Rethink, which does a tremendous job, will my hon. Friend join me in congratulating my constituent, Trina Whittaker, and Braintree Rethink on doing a tremendous job for those with schizophrenia and other mental illnesses?

[Norman Lamb]

I absolutely join my hon. Friend in applauding Trina Whittaker and the work of the local Rethink group. I met the national group last week to discuss this very subject. It does tremendous work around the country and I applaud it.

On personal budgets, we know that people want more control over their own care. For instance, patients often do not like the drugs that they are being prescribed—they might make them overweight or have other detrimental effects. It would be far better to move away, if possible, from that paternalistic, disempowering model towards a system in which patients have much more say.

We are already taking steps to help make that happen. The draft Care and Support Bill, published in July, places personal budgets on a legislative footing for the first time. It specifies that everyone eligible for ongoing social care, including those who are mentally ill, will get a personal budget as part of their personalised care and support plan by April 2013. On NHS services, the mandate sets out that patients with mental health conditions will be able to have an agreed personalised care plan, which they must be involved in preparing; it will not be imposed on them. Those plans will lead directly to people with mental illnesses getting the help that they want, and not being directed to a one-size-fits-all service.

Listening to people with mental illnesses is particularly important because of the huge stigma—my hon. Friend the Member for Broxbourne talked about this—that they endure throughout almost every sphere of their lives. Stigma features heavily in the report and I welcome the clear message that it gives us: we will not tackle stigma by burying our heads in the sand. It goes without saying that schizophrenia is an immensely complex condition, and it is made even more difficult when people characterise it as simply a split personality.

We are listening to service users who tell us of the appalling discrimination that they suffer. Many people tell us that the discrimination they face is often worse than the condition itself. That is why the Government are joining forces with Comic Relief to tackle mental health stigma. We are giving up to £16 million, alongside the £4 million that Comic Relief is providing, to Time to Change, the brilliant anti-discrimination campaign run by Mind and Rethink Mental Illness, so that it can continue its work through to March 2015. My hon. Friend and others who have spoken out about their own mental health problems are helping to address the stigma and make mental conditions more acceptable.

I should also say a word about black and minority ethnic service users, because they are over-represented in in-patient care and often stay longer than people from other ethnic groups. We are discussing those long-standing issues with a range of leaders and organisations from BME communities with a view to tackling them.

There is a clear need for organisations outside Whitehall to work much better together. The NHS, social care and other services need to work hand in hand to ensure that patients with mental health problems get effective, safe and streamlined treatment. Together, they need to identify the risks and manage them appropriately. The NHS Commissioning Board will directly commission specialised services, including secure mental health services. That is a great opportunity to ensure that there is high-standard, recovery-oriented and consistent practice across the country, with clear transitions for patients between different parts of the mental health system.

The Department of Health funds a wide range of research on schizophrenia and other psychoses. We have awarded nearly £49 million over five years to the biomedical research centre for mental health, based at the South London and Maudsley NHS Foundation Trust. It collaborates with the Institute of Psychiatry to translate promising research into effective practice. Psychoses are a major focus of its work. The National Institute for Health Research funds a clinical research network, which allows patients across England to take part in trials and other types of clinical study. The network is currently setting up and recruiting patients to about 90 projects to study schizophrenia and psychoses. Through the “Strategy for UK Life Sciences” the Government will provide an environment and infrastructure that supports pioneering researchers and clinicians to bring innovations to market earlier and more easily, making the UK the location of choice for investment.

The Government believe that people with schizophrenia, and indeed any severe mental illness, have a right to the care and support they need in a safe and comfortable environment where they are treated with the dignity and respect they deserve. They have as much right as anyone else to a fulfilled and productive life, free from discrimination and stigma. The coalition is making valuable changes from the centre, but this cannot be the Government’s responsibility alone. We need everyone everywhere to take what responsibility they can, including the commissioners who must purchase the care that meets people’s needs, the providers who have a duty of care to each and every individual for whom they are responsible, and the regulators who are responsible for ensuring the quality of that care. I have set out some of the recent developments at government level that will improve services for people with schizophrenia. However, I acknowledge that we are still some way from where we want to be. We must not relent in our pursuit of that.

To that end, I am convening a round-table meeting on schizophrenia next week with leading charities, members of the Schizophrenia Commission, the Royal College of Psychiatrists and others. My hon. Friend the Member for Broxbourne is welcome to attend if he is available. The aim of the meeting is to identify the further practical actions that key players can take to improve the quality of life of people with schizophrenia and other severe mental illnesses.

Question put and agreed to.

22:29

House adjourned.

Petition

Monday 10th December 2012 Petitions

Monday 10 December 2012

Welfare Reform Act

Monday 10th December 2012 Petitions

The Petition of members of the National League of Blind and Disabled and of residents of Teesside,

Declares that the Petitioners believe that the Welfare Reform Act and the abolition of the Disability Living Allowance will adversely affect disabled people, including disabled workers at Ayresome Industries on Teesside.

The Petitioners therefore request that the House of Commons urges the Government to review and reverse welfare reform and cuts to service that disproportionately hit disabled people.

And the Petitioners remain, etc.—[Presented by Tom Blenkinsop, Official Report, 21 November 2012; Vol. 561, c. 680.]

[P001135]

Observations from the Secretary of State for Work and Pensions:

A key element of the Government’s welfare reforms is the replacement of Disability Living Allowance (DLA) for people aged 16-64 with Personal Independence Payment. Personal Independence Payment will not apply to children aged under 16 or people aged 65 and over on 8 April 2013 when it is introduced. Children and those aged 65 and over will still be able to continue to claim DLA if they are eligible to do so.

This is a long overdue principled reform which will bring disability benefits into the 21st century. The Government are absolutely committed to supporting disabled people, to improving the quality of life of those facing disadvantage and to tackling poverty by addressing the causes driving it. Under Personal Independence Payment a greater proportion of people will get the higher rates compared to Disability Living Allowance.

We are designing Personal Independence Payment (PIP) to reflect a modern understanding of disability and to treat all conditions fairly and ensure proper support is in place. This is a real step forward. Reforming Disability Living Allowance (DLA) also provides an opportunity to better target support for disabled people and to enable them to lead full, active and independent lives.

The PIP assessment criteria will reflect a more complete consideration of the impact of an individual’s health condition or impairment—whether physical, sensory, mental or cognitive—than the current DLA assessment, ensuring that fair account is taken of all impairment types. The PIP assessment process will be empathetic and give claimants the opportunity to put across their view of the impact their health conditions or impairments have on their lives.

The Government continue to spend around £50 billion a year on disabled people and services, including £13.6 billion on Disability Living Allowance (2012/13 forecast), £15 billion on adult social care, £1 billion on free transport for elderly and disabled people and £320 million on disability employment programmes. The Government’s welfare reforms will ensure the billions spent, better reflect today’s understanding of disability and offers the targeted support disabled people need to live independent lives

We also recently announced improvements to Access to Work—A much valued scheme which helps disabled people enter and retain employment by providing valuable support such as help with travel to work, purchase of specialist equipment and support workers. We have accepted the first phase of recommendations from the Access to Work Expert Panel. These include introducing a fast-track assessment process so individuals who already know their support requirements will move swiftly through their application and we will make it easier to transfer equipment so that individuals can move more easily between employers with their special aids and equipment. In addition we said we would extend exemption from cost sharing of adjustments to small businesses—removing a cost on these businesses taking on new disabled employees.

Written Ministerial Statements

Monday 10th December 2012 Written Statements

Monday 10 December 2012

New Homes Bonus

Monday 10th December 2012 Written Statements

[The Minister for Housing (Mr Mark Prisk)]

Today, I am pleased to announce £661 million of provisional new homes bonus funding for local authorities in England. This includes the third instalment of £199 million in respect of year one, the second instalment of £232 million in respect of year two, and £230 million for housing growth in year three of the bonus.

The bonus will be paid in respect of 142,000 homes and 13,000 long-term empty properties brought back into use in the last recorded year. The allocations also include the second affordable homes bonus, which totals £20.3 million in respect of 58,000 new affordable homes in the last recorded year.

These allocations bring the total amount of funding awarded under the new homes bonus since it began in April 2011 to almost £1.3 billion. This total recognises delivery of over 400,000 homes, and over 50,000 empty properties being brought back into use.

The new homes bonus is a powerful, simple and transparent incentive for housing growth. It is a key part of the housing growth focus of our national housing strategy. Commenced in April 2011, the bonus is based on the council tax of additional homes and those brought back into use, with an additional amount for affordable homes, paid for the six years following delivery. It ensures that those local authorities which promote and welcome growth can share in its economic benefits, and build the communities in which people want to live and work.

The bonus is a flexible, unring-fenced fund, which can be used to support front-line services, to provide housing infrastructure or to keep council tax down. Local authorities are best placed to understand the barriers to growth in their areas, the needs of their local communities and lead a mature debate about the benefits that growth can bring.

There are already good examples of local authorities using the bonus in a variety of ways. For example, Warwick council have developed a joint venture partnership with the Waterloo Housing Group to deliver over 1,000 new affordable homes, and will ring-fence and recycle back into the scheme all new homes bonus payments generated by additional new homes built. Leicestershire county council is using its new homes bonus funding to work with its district authorities to provide 60 affordable homes in rural areas.

The new homes bonus forms an important part of the Government’s proposals to allow local authorities to benefit from economic growth by allowing them to keep a proportion of their business rates.

Local authorities will have until 7 January to make representations on their provisional allocations. The Department has written to local authorities with details for making representations on their authority’s provisional allocations. We have asked for some further details from 29 authorities regarding the data they have provided in respect of empty homes brought back into use. We will consider their response as part of the wider representations process on provisional allocations. As such, the figures above do not include an amount for empty homes for those authorities. Final allocations, due in late January/early February next year, will include a full allocation for all elements of new homes bonus.

A full list of the provisional allocations is being placed in the Library of the House. Further information on the bonus, including the second new homes bonus bulletin Unlocking the Bonus can be found at:

https://www.gov.uk/government/policies/increasing-the-number-of-available-homes/supporting-pages/new-homes-bonus.

HMS Audacious

Monday 10th December 2012 Written Statements

[The Secretary of State for Defence (Mr Philip Hammond)]

I wish to inform the House that the Ministry of Defence has signed a contract, worth approximately £1.2 billion, with BAE Systems Maritime-Submarines to deliver HMS Audacious, the fourth submarine in the Astute submarine class.

This contract covers the remaining elements of design and build work on HMS Audacious. In addition to the contract for HMS Audacious, contracted work on other boats of the class now includes: boat 5 (named HMS Anson) where £646 million is currently committed; boat 6 where £498 million is currently committed; and boat 7, where £328 million is currently committed.

The Astute class submarines are the most powerful and advanced attack submarines ever built for the Royal Navy. Lessons learned during work on the first three submarines in the class, HMS Astute, Ambush and Artful, will lead to further improvements in Audacious’s capability and performance, and to financial savings.

The UK has a world-class submarine-building industry in Barrow-in-Furness, Cumbria, sustaining around 5,000 BAE Systems Maritime-Submarine’s jobs across the UK. Of these, the Astute programme supports over 3,000 jobs at the company. It also supports thousands of highly skilled jobs through around 400 suppliers across the UK submarine supply chain.

Ministerial Correction

Monday 10th December 2012 Written Statements

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I would like to inform the House that a written answer I gave on 26 November 2012, Official Report, column 45W to the hon. Member for Walsall North (Mr Winnick) was incorrect. The hon. Member asked when the Secretary of State plans to respond to the letter from the hon. Member for Walsall North of 15 October 2012 on behalf of a constituent.

The response stated that a reply had been sent on 21 November 2012. This was incorrect, due to an administrative error. The correct response should have been that the reply was signed by the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) on 6 December 2012.

The substance of the information contained within that letter is as follows:

The insulation industry has a very important role in the delivery of both the green deal and energy companies obligation (ECO) in the future, building on the success already achieved in recent years of improving the energy efficiency of huge numbers of properties. However, we are at a point of transition, and there are certain changes which seem to me inevitable and necessary.

In the first place, the nature of the insulation challenge is changing. By the end of the year over 65% of lofts will be fully insulated, with only very small numbers left with no insulation at all. It is therefore inevitable that the number of loft insulations being delivered will fall and that the number of jobs in the loft industry will naturally decline. By contrast, we have as a nation barely begun to tackle our uninsulated solid wall properties and as we focus more on this challenge, we can expect the overall number of jobs in the insulation industry to increase significantly under the green deal and ECO, rising on our estimates to between 27,000 to 42,000 next year, and 39,000 to 60,000 by 2015.

We are also, in the current economic climate, faced with tough choices about how and where to spend money which is ultimately gathered from all energy consumers. It must be targeted where it is needed most. ECO, therefore, is intended to support harder-to-treat, more expensive measures, such as solid wall insulation, and to provide support for the poorest and most vulnerable households. The loft and cavity insulation industry has benefited from support from schemes like energy efficiency commitment (EEC) and carbon emissions reduction target (CERT) for many years, with the costs borne by bill payers, and once individual consumers have a mechanism (which they will do in the green deal) to allow them to pay for these cost-effective measures themselves, I believe there is far less need to continue supporting these measures.

That said, we have listened carefully to industry concerns about potential cliff edges in the number of loft and cavity wall insulation jobs. We have made a number of important changes to support the transition from CERT and community energy saving programme (CESP) to green deal and ECO. We have:

Made sure far more cavities are eligible for ECO support than our original consultation proposals, by including around 3 million hard-to-treat cavities as eligible;

Made sure more lofts are eligible for support by defining broad low-income areas where ECO can fund loft insulation, and by allowing ECO to support loft insulation when delivered in packages;

Ensured that it is now possible for companies to carry forward over-achievement of CERT and CESP towards their ECO targets, where the work carried out would also qualify under ECO;

Provided £2 million of support, through the Sector Skills Council, for training and retraining of insulation installers towards the new solid wall insulation market; and

In addition to the actions taken by DECC, Ofgem issued a letter on 21 September which outlined their approach to compliance for the CERT/CESP schemes. This included their intention to take into account if energy companies have taken mitigating actions, such as continuing to progress delivery against any missed targets once the scheme has closed on 31 December. This means that the insulation industry will continue to benefit from measures delivered under CERT/CESP alongside those delivered under ECO for the first part of 2013.

The revised ECO order, now titled the “Energy Companies Obligation”, was laid before Parliament on Tuesday 30 October and is available to view from the following link: http://www.legislation.gov.uk/ukdsi/2012/9780111530276/contents. ECO will come into force from 1 January 2013, but also includes a provision allowing activity from 1 October 2012 to count towards energy suppliers’ eventual ECO targets.

Most of the green deal framework came into force on 1 October 2012, and Government are introducing the green deal through supporting a responsible and controlled approach with full national systems testing. This is to ensure the market has the opportunity to build over the next 18 months, meeting Government’s ambition for a national energy efficiency retrofit across the next decade and beyond.

To support demand for the green deal, we are giving £12 million of funding to seven major cities across the country who are well advanced in their plans to deliver the green deal. The money will support “demonstrator” projects to trial key aspects of the green deal and support future green deal activity in these “Core Cities”. Activity includes green deal assessments, loan arrangements to fund work and show homes to provide local examples of what can be achieved. Around 2,500 properties across all tenures could benefit. Building on this, we are offering other local authorities in England the opportunity to bid for £10 million of funding to support early delivery of, and promote future demand for, the green deal. The “Pioneer Places” competition is part of a broader £40 million competition aimed at driving local initiatives to boost energy efficiency, reduce fuel poverty and encourage collective switching and purchasing.

On 19 October, we further announced a “cash back” offer, designed to incentivise consumers to take up the green deal. It will be available from 28 January 2013 to all consumers in England and Wales who make a financial contribution to the installation costs of energy efficiency measures under green deal, whether or not they take out green deal finance. Loft insulation (including top up) and insulating cavity walls (where appropriate) are important, basic energy-saving measures. So where a green deal assessment recommends these alongside other improvements, householders will only be able to get the cash back if they do those too.

Financial support, through green deal finance, will also be available from 28 January 2013 to support green deal plans. Whilst our position is that green deal finance should (as befits a market mechanism) be primarily delivered through the private sector, we strongly recognise the importance of ensuring that finance is widely available to providers including SMEs. We have taken some key steps in recent weeks in support of green deal finance which should give confidence to the market. These include a loan to the Green Deal Finance Company that has enabled it to proceed with critical implementation work for a large-scale financing vehicle. In addition, we announced on 8 August that DECC and HM Treasury are considering whether the green deal could be an early candidate for the use of infrastructure guarantees, with a view to enabling the delivery of low cost finance. The green deal remains an early priority for the green investment bank.

On a related matter, I would like to take the opportunity to tell the hon. Gentleman about the Government’s Energy Saving Advice Service (ESAS). If any of his constituents would like to find out what consumer offers are available to them, they can use this phone service by telephoning 0300 123 1234 (noting that calls are charged at national rates and are free if transferred to the Warm Front helpline). ESAS provides advice on how to reduce bills and make homes more energy efficient. Details can also be found at: www.gov.uk/energyhelp.

Energy Council

Monday 10th December 2012 Written Statements

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

The United Kingdom was represented by Shan Morgan, Deputy Permanent Representative to the EU, at the EU Energy Council in Brussels on 3 December 2012.

The presidency reported on recent progress in the negotiations of the proposal for a regulation on the safety of offshore oil and gas. The Council and the European Parliament both agreed that they would prefer a strong and appropriate directive rather than a directly applicable regulation. The Commission noted that it was the content of the proposal rather than the legal form that was important and that it would be prepared to move away from a regulation if a directive provided for the highest safety standards. The Irish Presidency will aim for rapid agreement of the dossier in 2013.

The Council agreed conclusions on the Commission’s recent communication on a strategy for renewable energy. The Commission noted that there was a need for a post-2020 target framework and to make it acceptable to all member states.

The Commission then presented its communication “Making the internal energy market work”, which had been produced in response to the European Council’s wish to see completion of the internal energy market by 2014. The Commission noted that lack of investment was an issue for all member states and that the Commission needed to address the issue of market design. There were problems in electricity security of supply as a result of the increased use of renewables; the EU needed to improve interconnections to make best use of the network and needed flexible backup capacity, which should be dealt with at the EU-level. The Commission plans to put forward a proposal in 2013 for binding guidelines for the application and implementation of aid to the energy sector; this will cover feed-in tariffs and capacity mechanisms.

In the debate that followed, a number of member states shared the Commission’s concerns about capacity markets. The UK and two other member states noted the importance of addressing serious electricity security of supply concerns resulting from the move to less predictable generation sources. The UK emphasised that it would work closely with the Commission to ensure that the internal market would not be compromised by any new capacity mechanisms.

On renewables, member states were divided in their support for post-2020 binding targets. The UK noted the need for a post-2020 framework but said that specific targets for renewables would not be welcome as they did not give member states sufficient flexibility to deliver emissions reductions as cost-effectively as possible. The Commission said that there was a need for discussion of 2030 targets suggesting that the May 2013 European Council would be a good opportunity.

Some member states raised concerns about the Commission’s intention to issue a proposal on nuclear liabilities given they regarded nuclear safety as being a more important issue. The Commission said that there was a need for a degree of obligatory insurance for nuclear liabilities. Proposals for a revision of the nuclear safety directive would come out in early 2013.

On other issues, the presidency noted the successful agreement with the European Parliament Industry, Research and Energy (ITRE) Committee of the regulation on guidelines for trans-European energy infrastructure. The Commission and presidency also reported on a number of international energy related items and meetings, including the upcoming EU/US Energy Council, the Energy Community, the Energy Charter, EU-Russia and the southern corridor.

Finally, Ireland outlined priorities for its presidency, principally taking forward work on the internal energy market and the post-2020 framework.

CRC Energy Efficiency Scheme

Monday 10th December 2012 Written Statements

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

On 26 March 2012, Official Report, columns 89-90WS. I published a formal consultation setting out our ambitious simplification package for the CRC energy efficiency scheme. Since then we have engaged extensively with stakeholders on our proposals and received over 250 responses to our consultation. The majority of responses agreed with our proposals for simplifying the scheme and welcomed the package of simplification proposals.

The Department will now publish a formal Government response to our consultation. Our simplification package for CRC will radically reduce the administrative costs to participants by over half (55%), which will deliver around £272 million savings for CRC participants up to 2030. The package will reduce both the complexity of the scheme and its overlap with other climate legislation, without undermining its energy efficiency objectives.

We have also gone further in a number of our simplifications. We have reduced the number of fuels that participants need to report to two, to reflect the fact that electricity and gas make up the vast majority of the CRC’s emissions coverage. We are also introducing an assumption that all gas used is for heating purposes and a 2% de minimis threshold on gas (for heating), reducing the reporting burden for organisations with very low gas consumption.

I understand participants’ concerns around the performance league table and have decided to abolish it. Participants’ aggregated energy use and emissions data will continue to be made public annually in line with the Government’s transparency agenda, which will ensure that CRC participants’ energy efficiency behaviour remains visible.

We are also bringing in a number of simplifications in advance of the beginning of phase two of the CRC, which will both help to reduce the administrative burden and allow participants to feel the benefits of simplification earlier. The key proposals which will be bought in for the last two years of phase one (2012-13 and 2013-14) are the reduction in fuels reported and the de minimis on gas, both of which will reduce the complexity of the scheme immediately.

Our simplification package optimises the projected energy and carbon savings delivered by the CRC energy efficiency scheme while reducing its complexity and administrative cost.

I will lay the necessary statutory instrument to implement the simplification package for the CRC scheme before the House shortly.

Gibraltar

Monday 10th December 2012 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

In my written ministerial statement of 18 July 2011, Official Report, column 79WS, I informed the House of the legal action that the Government were pursuing to reverse the adoption by the European Commission of a proposal from the Spanish Government to designate a site of Community importance (SCI) under the EU habitats directive (92/43/EEC). The SCI in question, named Estrecho Oriental, entirely overlaps the existing southern waters of Gibraltar SCI, which was listed by the UK and is managed by HM Government of Gibraltar, and overlaps virtually the whole of British Gibraltar territorial waters.

The UK Government launched a legal case against the Commission’s decision in the European General Court on 22 December 2009 on the basis that the UK was the only EU member state competent to propose an SCI listing in respect of British Gibraltar territorial waters and had already done so before Spain submitted its Estrecho Oriental listing. However, on 24 May 2011 the General Court ruled our case inadmissible on technical grounds. In my previous written ministerial statement I announced that the Government would appeal against the decision of the General Court and we duly did so. Our appeal has been heard by the European Court of Justice which published its judgment on 29 November 2012. I regret to inform the House that the Court has upheld the judgment of the General Court and dismissed the UK’s appeal. The Court has also dismissed the appeal of HM Government of Gibraltar in a separate legal case on the same issue.

The Government are disappointed by the judgment of the Court of Justice. However, this ruling is, like that of the General Court, on technical grounds and is not a judgment on the substantive points which were raised in the Government’s case. The judgment does not mean that the UK Government recognise the Spanish Estrecho Oriental SCI listing. Nor does it confer any rights on Spain within British Gibraltar territorial waters. We are confident of the UK’s sovereignty over British Gibraltar territorial waters. The Court’s judgment does not change that. Nor is our position on sovereignty changed by the Spanish Government’s announcement on 30 November that they have formally approved plans to designate the Estrecho Oriental site of Community importance as a special area of conservation (SAC). The UK Government do not recognise the original Spanish SCI listing and we do not recognise their attempt to designate an SAC either. We have made our position on this clear to the Spanish Government.

We would take a grave view of any attempts by Spain to exert any authority or control within British Gibraltar territorial waters as part of implementation of an SAC management plan or for any other reason. Any attempt by a Spanish state vessel, or vessel acting on behalf of the Spanish state, to exercise jurisdiction within British Gibraltar territorial waters is a violation of British sovereignty and we will respond accordingly. We will continue to take whatever action we consider necessary to protect British sovereignty and the interests of Gibraltar, its people and economy.

Following the judgment of the Court of Justice and the announcement of Spain’s SAC we are taking urgent steps, in consultation with HM Government of Gibraltar, to explore all further legal and political options to remove the Spanish listing and protect British and Gibraltar’s interests. I will continue to inform the House of significant developments on this issue.

UK Election Campaign (UN Human Rights Council)

Monday 10th December 2012 Written Statements

[The Minister for Europe (Mr David Lidington)]

My right hon. Friend the Senior Minister of State at the Foreign and Commonwealth Office, Baroness Warsi, has made the following written ministerial statement:

Today, on 10 December, UN human rights day, I will host the London launch of the UK’s campaign for election to the UN Human Rights Council (HRC) for January 2014 to December 2016.

The UK is committed to strengthening the UN’s mechanisms for driving progress on international adherence to human rights standards, demonstrated by our constructive and thorough approach to our universal periodic review, led by the Ministry of Justice in May. Membership of the HRC would reaffirm our commitment to human rights and fundamental freedoms across the world.

We have been a strong supporter and active contributor to the HRC since its inception in 2006. Through the HRC, we have been able to turn rhetoric on human rights into accountability and lasting change, leading initiatives on issues including the prevention of torture and combating intolerance. Though the HRC, we have called to account those countries who commit the most serious and widespread violations against their own citizens, for example in Belarus, Iran and the Democratic People’s Republic of Korea (DPRK). Most recently, the HRC has been at the forefront of the international response to the crisis in Syria, mandating the United Nations Commission of Inquiry on Syria to investigate human rights violations and abuses. Membership of the HRC will help ensure the UK stays at the front of efforts to hold those responsible for crimes in Syria to account.

We would use a place at the table to promote appropriate attention to country situations and to priority human rights themes. We would fight hard against those who seek to weaken or undermine international human rights mechanisms.

Throughout our campaign we will focus on four key human rights priorities: protecting those most vulnerable in societies, working towards human dignity for all, responding proactively to evolving challenges, and keeping human rights at the heart of multilateral priorities.

This year, Ministers agreed the HRC should be the UK’s top priority international election for 2013. A budget of £30,000 has been allocated between this and one other priority international election the Advisory Committee on Administrative and Budgetary Questions (ACABQ).

For colleagues who are interested, I have today placed a more detailed background note in the Libraries of both Houses.

UK Life Sciences

Monday 10th December 2012 Written Statements

[The Secretary of State for Health (Mr Jeremy Hunt)]

Today, the Prime Minister has announced the Government’s intention to pump-prime the sequencing of 100,000 whole genomes over the next three to five years. This work will initially focus on cancer and rare diseases which, together with infectious diseases, are already showing patient benefit.

The potential of the information contained in the human genome is recognised as one of the most important health care opportunities of modern times. This initiative will include funding for staff training and developing bioinformatics support to prepare the NHS to make the paradigm shift from sequencing individual genes to scanning whole genomes. It will change fundamentally the way we view disease, monitor its progression and use this knowledge to transform health care. It will help patients get targeted treatments for them as individuals. The NHS Commissioning Board will lead on a delivery framework and service design with an aim to have contracts in place by April 2014 at the latest.

The Department of Health is working closely with colleagues in the Department for Business, Innovation and Skills and the NHS Commissioning Board to ensure that clinicians, patients, researchers and the wider public are involved in promoting the adoption of genomic technology to provide better health care and help research and the wider economy. The Government will also put in place careful safeguards for the storage each patient’s genome sequence and the use of anonymised data for research, which will be overseen by the chief medical officer for England.

This new initiative will form part of the next phase of the “Strategy for UK Life Sciences”, launched 12 months ago by the Prime Minister, which declared our commitment to a sector we see as vital to the UK’s long-term economic prospects. This work will also complement “Innovation Health and Wealth, Accelerating Adoption and Diffusion in the NHS”, published by Sir David Nicholson, the NHS chief executive, which is updated today. The UK is well placed to play a world-leading role in this next phase of the biomedical revolution, thanks to its first-class science and research base and the unique position of the NHS as a single health care provider. We remain at the forefront of genetic science innovation, translating this into real benefits for NHS patients. The Government and the NHS Commissioning Board will ensure that NHS patients benefit and that there is a clear strategy to take advantage of opportunities in genomics.

In addition, the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts), Department of Business and Skills is today announcing that part of the science capital committed in the Chancellor’s recent “Autumn Statement 2012” will be for projects in the life sciences: in synthetic biology; regenerative medicine; and biologies.

Think! (Road Safety Campaign)

Monday 10th December 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I wanted to update the House on the launch of the Government’s latest Think! road safety campaign, targeted at drink-driving.

Action by successive Governments over the last 30 years has meant that the number of people killed in drink-drive accidents has been reduced by over three-quarters since 1979. But drink-driving remains a problem; 280 people lost their lives in 2011 in drink-drive accidents on Britain’s roads.

Working in partnership with the Association of Chief Police Officers (ACPO), so that people see education and enforcement working together, the Government have just relaunched their successful Think! campaign aimed at reminding drivers—particularly young drivers, who are over-represented in the casualty figures—of the risks of getting behind the wheel after consuming alcohol: http://think.direct.gov.uk/.

The ACPO enforcement anti-drink and drug-driving enforcement campaign seeks particularly to focus on well-intentioned drivers who do not think they are breaking the law but may be over the legal limit by the time they get into their cars in the morning.

Separately, at the end of last week I launched a further round of the very successful designated driver campaign, in partnership with Coca-Cola. Now in its fifth year, the nationwide campaign offers designated drivers a “buy one get one free” deal on Coca-Cola, Diet Coke and Coca-Cola Zero at participating pubs. The campaign began last Thursday and will run until the end of December. Further details are available at: http://www.coca-cola.co.uk/designated-driver/.

Child Maintenance

Monday 10th December 2012 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Today I can confirm the Government will introduce their new, “pathfinder” statutory child maintenance scheme, which will be available to a very limited number of new applicants at the outset. All other cases will remain on existing schemes for the time being.

This Government are determined to avoid the mistakes of the past, when the 2003 scheme was launched too quickly and for too many clients. Through the pathfinder approach we will ensure that the 2012 scheme is operating effectively, before it is opened to all clients.

Eligibility for the 2012 scheme is based on the number of children—qualifying for child maintenance—named in the application. For the purposes of the pathfinder, there must be at least four children with the same two parents named in the application, and the parents must have no existing child support case in respect of those children, for that application to be administered under the scheme, otherwise it will be handled according to the 2003 scheme rules.

Welfare Reform Regulations

Monday 10th December 2012 Written Statements

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I am pleased to announce that later today the Department intends to lay and publish the following draft affirmative regulations:

The Universal Credit Regulations 2013;

The Universal Credit (Transitional Provisions) Regulations 2013;

The Jobseeker's Allowance Regulations 2013;

The Employment and Support Allowance Regulations 2013;

The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013; and,

The Social Security (Payments on Account of Benefit) Regulations 2013.

Universal credit is the most significant reform of the welfare system for a generation. By removing the barriers and disincentives to work and making the system simpler. Universal credit will make sure work pays—especially for those on the lowest incomes, helping people to live independent lives. This will reduce worklessness, and encourage people to take personal responsibility. Universal credit will act as a “launch pad” for motivating people back into work, fostering confidence and self-esteem and helping to end the dependency culture; and significantly reduce the cost of fraud and error to the taxpayer.

Work can transform individual lives and society for the better and should be encouraged. Earning a wage is the best route out of poverty, but work also has many other benefits beyond an income; it promotes personal responsibility, boosts confidence, self-esteem, and motivation, provides a structure to everyday life, and gives people a sense of being part of a community. There will be continued financial support for individuals who cannot work. But for those who can work, no one should be consigned to living a life on benefits alone if they have the potential and capability to work.

These regulations are being laid to support the introduction of universal credit, following the passage of the Welfare Reform Act 2012. They reflect the financial information provided by my right hon. Friend, the Chancellor of the Exchequer, in his autumn statement on 5 December.

The Universal Credit Regulations 2013—set out provisions for universal credit, including entitlement, elements of the award, calculation of income and capital, and claimant responsibilities. The regulations also make provision for a benefit cap.

The Universal Credit (Transitional Provisions) Regulations 2013—reflect the Government’s decision to introduce universal credit from 29 April 2013 only for a small number of claimants in certain categories. This “pathfinder” will test the core proposition in a defined geographical area in Oldham, Warrington, Tameside and Wigan. The specific postcodes in which the pathfinder will operate will be set out in an order commencing the relevant provisions of the Act. The Government will only expand this scope via further regulations or a commencement order. The Government will bring forward further provisions to provide for periods beyond the pathfinder.

The Jobseeker’s Allowance Regulations 2013—remove income-related rules and provide for an award of jobseeker’s allowance based only on national insurance contributions. The 2013 regulations bring jobseeker’s allowance substantially into line with universal credit work-related requirements, and otherwise the provisions are very similar to the existing rules for contribution-based jobseeker’s allowance under the 1996 Regulations (SI 1996/207). A copy is available on the DWP website http://www.dwp. gov.uk/docs/a11-4001.pdf.

The Employment and Support Allowance Regulations 2013—remove income-related rules and provide for an award of employment and support allowance based only on national insurance contributions. The 2013 regulations bring employment and support allowance substantially into line with universal credit work-related requirements, and otherwise the provisions are very similar to the existing rules for contributory employment and support allowance under the 2008 Regulations (SI 2008/794). A copy is available on the DWP website

http://www.dwp.gov.uk/docs/a13-5101.pdf.

The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013—make provision in relation to the administration of these four benefits, in particular the making of decisions where there are disputes, changes in circumstances and doubts about awards; and in relation to rights of appeal. The regulations include a new requirement for claimants to apply to the Secretary of State for a decision to be revised before they can make an appeal. The regulations also make provision for electronic communications.

The Social Security (Payments on Account of Benefit) Regulations 2013—provide for the introduction both of universal credit advances and short-term benefit advances (for claimants of prescribed existing benefits), replacing existing interim payments and some crisis loans, and of budgeting advances replacing existing budgeting loans for some claimants.

The Government are publishing an updated impact assessment for universal credit. This also covers information concerning the Department’s obligations regarding its equality duty. A copy will be made available later today on the DWP website at: http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/impact-assessments-and-equality/.

Under section 173(5) of the Social Security Administration Act 1992, the Universal Credit Regulations 2013 do not fall within the requirement to be referred to the Social Security Advisory Committee (SSAC). Nevertheless, given the scope and importance of these reforms, I invited the Committee to undertake a special exercise to scrutinise the regulations.

SSAC undertook a public consultation exercise in June 2012 as part of their review, and included consultation on the Benefit Cap (Housing Benefit) Regulations 2012 (SI 2012/2994) and the Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013.

I also referred the Employment and Support Allowance Regulations 2013, the Jobseeker's Allowance Regulations 2013 and the Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013 to the Committee under section 172(1) of the Social Security Administration Act 1992. The Committee decided not to hold a formal consultation about these regulations but welcomed representations on any parts of those regulations insofar as they impact on the coherence of the overall legislative programme.

The Department will publish an Act Paper covering the Secretary of State’s response to the SSAC report on these regulations. A copy will be available later today on the Department’s website at: http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/welfare-reform-regulations/.

The Department has undertaken extensive stakeholder engagement throughout the development of the regulations. As a result the policies take account of the valued input we have received. This engagement is continuing as part of the development of delivery plans and guidance to support claimants and staff.

The draft regulations laid today and associated explanatory memorandum will be made available in the Vote Office and the Printed Paper Office and can be accessed from: www.legislation.gov.uk or from the DWP website: http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/welfare-reform-regulations/.

The Department will also publish today a policy briefing note on the final proposals for transitional protection for claimants moved from an existing benefit to universal credit during later stages of the migration process. A copy will be available later today on the Department’s website at: http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/welfare-reform-regulations/.

Grand Committee

Monday 10th December 2012 Grand Committee

Monday, 10 December 2012.

15:30

Enterprise and Regulatory Reform Bill

Monday 10th December 2012 Grand Committee

Committee (3rd Day)

[The Deputy Chairman of Committees (Lord Geddes)]

My Lords, as is usual on these occasions, I have to advise the Grand Committee that if there is a Division in the Chamber we will adjourn for 10 minutes. I am told that there is likely to be a Division so we may be adjourning quite soon.

Clause 14 : Power of employment tribunal to impose financial penalty on employers etc

Amendment 20L

Moved by

[Baroness Hayter of Kentish Town]

20L: Clause 14, page 10, line 14, at end insert—
“(1A) Subsection (1) does not apply where an insolvency office holder has been appointed to the employer company in any of the capacities specified in section 388(1)(a), (2)(a), (2A)(a) and (2A)(b) of the Insolvency Act 1986.”

[Baroness Hayter of Kentish Town]

My Lords, Clause 14 gives tribunals powers to impose a financial penalty on an employer who is in breach of their employment responsibilities where there have been aggravating features over and above any award. The intention is to provide a deterrent to employers from neglecting their responsibility towards employees and to discourage them from repeating the breach that has been identified by the tribunal. However, we wonder whether the impact of penalties against an insolvent company has been properly considered.

In most formal insolvencies the management of a company is no longer in place having been replaced by an insolvency officeholder, so any financial penalty would simply represent an additional claim on the assets of the already insolvent company. Needless to say, this would reduce the amount available for creditors, including the HMRC as well as employees. With a maximum penalty of £5,000 per worker, the impact could be significant where there is a large workforce. For example, in the recent insolvency of a retail company, tribunals made awards to 24,000 employees. Should penalties then be added to those awards, substantial amounts would be lost from the money available for distribution to staff or creditors.

Penalties on companies in formal insolvencies where the management is no longer in place would clearly have no deterrent effect as those responsible would no longer be around and not themselves liable for such penalties. Any penalty would therefore deliver no benefit to employees but would simply reduce returns to creditors. It is for this reason that Amendment 20L calls for an exemption from penalties for companies in formal insolvencies.

I am aware that R3 has been in contact with the Bill team on this and so I am sure that the Minister will be well briefed on the issue and on the intention behind the amendment. However, I hope he will not say that the amendment is not proportionate to the size of the issue. At a time of slow growth, which we all acknowledge is going to continue for some time, there will, sadly, be many insolvencies yet to come, and very often in the retail and other employee-rich sectors. I also hope that the Minister will not tell us that there is some magical alternative non-statutory solution, such as guidance to tribunal chairs or enforcement officers. That would be rather silly with a new Bill. It may often be sensible where something unplanned has happened after Royal Assent or when a new Act is bedding down and unforeseen problems occur, but here we could make the provision in the Bill right from its inception.

Furthermore, having this provision in the Bill would give clarity to insolvency practitioners and others dealing with insolvent estates and would remove the threat of such additional costs and all the extra time that is taken in arguing against them, which in itself adds even more to the costs of the insolvency procedure and has to be met out of funds that would otherwise go to creditors. We all know that once a power has been granted in legislation, any amount of non-statutory guidance often fails to prevent its exercise.

Even if enforcement officers are advised that the penalty should not be collected, that would not deal with the problem because the penalty will still exist as a claim against the estate. Also, an insolvency practitioner might have a legal duty to pay regardless of whether such payments are being pursued by the enforcement officer.

Perhaps the biggest disadvantage of relying on non-statutory means is the uncertainty that that creates. Whether or not financial penalties are actually awarded or collected in a formal insolvency does not change the fact that they could be under the Bill as it is currently worded. That uncertainty is particularly damaging in the case of a potential business rescue, where the insolvency practitioner has to be able to predict the liabilities and outgoings of a company that is in administration when deciding whether it is possible to trade it. Obviously, trading such administrations can increase the returns to creditors as well as reducing job losses. Therefore, the addition of potential liability could mean that fewer companies are saved from liquidation.

Our amendment, granting specific exemption for companies in formal insolvency—ie, where the management is no longer in place—would remove such uncertainty. It would not harm employees, who may still have an award made in their favour, and it would merely prevent the creditors of insolvent business having to pay a fine to the Secretary of State for a transgression for which they bore no responsibility.

It seems silly to send this Bill into the world unfit for purpose. The clause was meant to fine those who had transgressed and deter them from becoming repeat offenders, but an IP running an insolvent company is not the transgressor and any such fine would only be paid by blameless creditors.

To ensure that we can find a route to those who have transgressed, we have a second amendment in this group—Amendment 20PA. Because the present Clause 14 would fail to act as a deterrent to directors of companies in insolvency, as any penalty does not fall on them, there may be merit in meeting the Government’s quite correct desire to increase deterrence by introducing a different deterrent for these particular people via an amendment to the Company Directors Disqualification Act 1986. This would ensure that where a breach has occurred that has, or would have, attracted a financial penalty were the company not in formal insolvency this matter is taken into account when considering directors’ conduct.

In a formal insolvency, the insolvency practitioner, who is acting as the liquidator, administrator or administrative receiver, has a duty to report on any director whose conduct makes them unfit to be involved in the management of a company. The matters that IPs have to consider when deciding whether to make such a report are listed in Schedule 1 to the Company Directors Disqualification Act 1986. This amendment would add to that list the issues covered in Clause 14 of this Bill, so that the IP could still consider these matters when deciding whether to report on those whose behaviour has been found wanting but who would currently escape any penalty because they are no longer running the company. I beg to move.

[Baroness Brinton]

My Lords, I welcome Clause 14, which inserts new Section 12A, but would like to assert the importance of Amendment 20L. New Section 12A(1) allows an employment tribunal, having found that an employer has committed an aggravated breach of workers’ rights, to order penalty payments to the Secretary of State regardless of any previously established financial awards. While this is a just measure, we must not neglect the legal rights and needs of those who find themselves unemployed and faced with their former employer’s insolvency while still owed back pay, expenses or other reimbursements. Under subsection (1) as it stands, employees whose rights have been breached by their former employer would not necessarily receive compensation until after the Treasury, which as primary creditor would receive the penalty for the employer’s infringement before the employees got their redundancy pay. Thus the compensation of workers wronged by their former employers would be secondary to and potentially diminished or even eliminated by the amount paid to the Secretary of State when a company is insolvent and funding is finite. This would obviously be unfair to the former employees of an insolvent company who faced jarring transitions in their finances and everyday lives.

Amendment 20L would cancel subsection (1) where an insolvency officeholder had been appointed. This sensible measure would ensure that employees, as creditors, had primacy in receiving financial redress from an insolvent company. This is an important step to protect workers’ rights. When a company becomes insolvent, tens of thousands of people may become unemployed through no fault of their own, and these people are legally owed compensation, which could also provide much needed fiscal support. If we are genuinely to protect workers’ rights, we should support this Bill with Amendment 20L.

I also support the principles of Amendment 20PA, for the reasons that the noble Baroness, Lady Hayter of Kentish Town, has set out.

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

Good afternoon, my Lords. I hope that your Lordships all had a good weekend break. I am very grateful to the noble Baroness, Lady Hayter, for putting forward this amendment. As she rightly said, R3 has been working closely with our officials to find a way forward in this important part of the legislation and to try to find a modus operandi—or modus vivendi, whichever one wants to call it—to create the right effect.

I am grateful to my noble friend Lady Brinton for saying that the principle is the right course, and I think we all agree on that. However, as I think most people would agree, the problem lies with the practicality of this. The practicality is that an employee goes to a tribunal suing for wrongful dismissal and the company goes bust. It therefore has no money to pay anybody—in theory, that is why it has gone bust—and there is no right of recourse. I think that my noble friend Lady Brinton was right when she said that we would want to ensure that that wronged employee was very high up the pecking order in attracting revenue from the residual of the company’s assets.

I assure my noble friend that employees have rights equal to those of other creditors. There was some mention that the Exchequer sat ahead of them. The Exchequer does not sit ahead of employees in rights, so it has rights equal of those of the employee. I fear that it is slightly like banging one’s head against a brick wall in that, if nothing is left over in the tin, no one is going to get anything—not the Exchequer, not the suppliers and not the good staff, who have not been paid. That is the problem with this issue. Of course, everything is prefaced by the fact that the tribunal judge knows what is going on and so uses his discretion. It is right that he is empowered to use his discretion in finding out the state of the company to see whether there is going to be money in the tin, quite rightly, to pay this wronged individual.

For the company, £5,000, which we agree is a reasonable figure, is not enough to impact on whether or not it goes into liquidation. It is a small amount in terms of that overall decision and so is not going to be the driver that stops the company trading. Although we are sympathetic to this issue, in our view it is almost impossible to be prescriptive about it, and therefore I do not see how this amendment would work.

Similarly, with Amendment 20PA, there is already a list of four prescriptions for determining the unfitness of directors. If we start adding to that list at this point, where do we stop? Out of a board of 15 directors, is there one director who has failed to behave properly, and should we therefore take action against all directors? Should we expand this prescription, which came into force in October 2009 under the previous Government and which we supported at the time? I just do not think that at this point it can be limited to one director, despite the fact that I see the direction of travel of the noble Baroness.

I also want to say again that the judge at the tribunal will take into account the misbehaviour of a director when making his award. That is his job. He will see the evidence, which will be presented to him openly and fairly, and he will take that into account in his award. I acknowledge the difficulty and problems that we have with this particular aspect, and acknowledge and thank those who have said that it is the right direction of travel, but with this provision we would make it too prescriptive for ourselves. We continue to talk to R3, and we will continue to talk to the noble Baronesses about this as we go into Report. On that basis, I hope that the noble Baroness feels that she can withdraw her amendment.

15:45

[Baroness Brinton]

I ask for some clarification. The Minister said that the tribunal judge will obviously have a discretion, and I absolutely accept that point. However, the amount could be considerably more than £5,000. New Section 12A(1) refers to each worker involved, and I referred in my speech to a large organisation going bust. Even at the minimum of £100, if thousands of people lose their job, the penalty will still be quite a large sum that could take precedence over redundancy pay.

[Lord Marland]

We will pick that up in another part of the Bill, on the award, where the penalty is 50% of the award per employee. We have tabled amendments on that point. We can debate the point then, if the noble Baroness is satisfied with that.

[Baroness Hayter of Kentish Town]

I thank the noble Baroness, Lady Brinton, for her support. I find it hard to thank the Minister because I do not think that he has really quite got the point. These companies are already in insolvency, so the question of whether to take into account whether they will continue to trade is not the point; the point there is whether they will be sold on.

What is the purpose of a penalty against the directors who are no longer running the company? I cannot see the point of that, and I do not think that the Minister answered the question. We are talking about penalties, not awards to employees. Although the Minister is correct that they will rate on holiday pay, redundancy and, I think, sick pay—I need help from an expert on that—if money is due into the pension scheme, that would not rate higher than a penalty due to the Secretary of State. There will be other employee interests that could be damaged by this.

I am slightly surprised that the Government feel any need to put a penalty against a company for a transgression when the people concerned are no longer there. We will bring this back in due course, but, for the moment, I beg leave to withdraw the amendment.

Amendment 20L withdrawn.

Amendment 20M

Moved by

[Lord Young of Norwood Green]

20M: Clause 14, page 10, leave out lines 20 to 25

[Lord Young of Norwood Green]

Amendment 20M would remove the requirement that a financial penalty be set at 50% of the amount of any compensation awarded. We support the provision to levy an additional fine on employers where they have been found to have breached an employee’s rights and there are so-called aggravating features. We hope that this will act as a further deterrent to rogue employers. However, when considered in the context of the main thrust of the Government’s changes to the employment rights landscape, such as the increase in the unfair dismissal threshold to two years and the extension of new settlement agreements, all of which will make it easier for employers to get rid of workers without following proper process, I am not optimistic about the difference this will make. We have some questions over the practical detail of this provision—for instance, what will be considered an aggravating feature, and the impact that it might have on speed of payment of compensation? However, we will discuss those issues in later amendments.

This is a simple probing amendment to understand further the Government’s thinking behind setting the level of fine at 50% of any compensation awarded. We are not strictly opposed to this being the level set but it seems overly prescriptive in that, earlier in the clause, the Government have already set out the parameters for the amount that an employer may be fined under this proposed new section.

We understand that it is important that employers have certainty about the level of fine that they might face if a claim is upheld. However, we would have thought that setting the minimum and maximum levels of penalty at £100 and £5,000 was a more than sufficient guide to employers about what they might face. What is more, if the Government are still anxious about clarity we would have thought that their first priority would be to produce guidance on what will be considered an aggravating feature. I beg to move.

[Lord Marland]

My Lords, this is an amendment that my noble friend Lady Brinton was also alluding to. It is a very reasonable probing amendment. What we are building on here is the Labour Government’s legislation, which we supported. I am grateful that the noble Lord, Lord Young, has indicated that he is broadly supportive of the direction of travel. We are trying to have here an award of 50% of value rather than an arbitrary figure of between £100 and £5,000—£100 being the floor and £5,000 being the ceiling. There is therefore a consistency of approach, as you would get an award of 50%.

I would like to move on to the question that I said I would answer from my noble friend Lady Brinton. In the case of multiple cases against the same employer, this clause provides for the tribunal to impose a penalty of varying amounts up to a maximum of 50% for each employee, unlike single claims where the penalty must be 50% of the value of the award. I notice that my noble friend is nodding so it is not as clear as mud but absolutely crystal clear to her, which is of great benefit to me because she has greater experience of this than I. It is perfectly reasonable and fair that we should have a 50% award and that we do not have arbitrary figures. I know that the noble Lord, Lord Young, believes that that is fair. On that basis, having clarified our position, I hope that the noble Lord is able to withdraw his amendment.

[Lord Young of Norwood Green]

I asked what would be considered an aggravating feature and about the impact it might have on the speed of payment of compensation, but the Minister did not return to the point.

[Lord Marland]

That is a perfectly reasonable question, and I know that the noble Lord is asking me a question to which he knows the answer—as he often does, because he knows a lot about these things. We cannot be prescriptive about aggravating speeches—sorry, I meant aggravating features. We do not intend to supply that but we have a list of examples which is in the Explanatory Memorandum. I feel sure that things such as deliberate or malicious acts, et cetera, would satisfy the question to which the noble Lord knew the answer before he asked me.

[Lord Young of Norwood Green]

Such cynicism so early in the day. All I can say is that we will take into account the Minister’s response. I am not saying that we are fully satisfied with it—we may return to the issue on Report—but, for the moment, I beg leave to withdraw.

Amendment 20M withdrawn.

Amendment 20MA

Moved by

[Lord Young of Norwood Green]

20MA: Clause 14, page 11, line 9, at end insert—
““aggravating features” includes a failure or failures by an employer to follow its own grievance or disciplinary procedures (or both), or, where an employer does not have its own grievance or disciplinary procedures, the ACAS code of practice on disciplinary and grievance procedures; or a failure by an employer to provide any adequate training to its managers in grievance and disciplinary procedures;”

[Lord Young of Norwood Green]

My Lords, Amendments 20MA and 20MB are intended to probe the definition of aggravating features—I fear that this will be an aggravating speech in that respect—and to highlight what is perhaps the key to all of this, which is the proper training of managers in grievance and disciplinary procedure, and even in training, I think. I say that genuinely, because it is a subject that I have brought up time and again in these debates. If the Government could only focus more on that than on the firing of employees, they would do industry a much bigger favour.

Amendments 20MA and 20MB would include in the definition of aggravating features consideration of whether an employer has established any grievance or disciplinary procedure and has provided adequate training to its managers in following those procedures. Underlying much of the Government’s changes to employment rights in the Bill and elsewhere is the idea promoted by Adrian Beecroft, among others, that the most urgent problem facing employers is not being able to get rid of underperforming workers and that by stripping away employment rights, we will have a more productive workforce, creating more jobs.

I could not help noticing the reaction of a medium-sized employer in the north, a removals company, to the Chancellor’s Autumn Budget Statement. It welcomed the fact that there would not be an increase in fuel duty because that would enable it to take on more employees, some of whom would be on zero-hours contracts. I did not hear the caveat, “We would have taken them on, but we will not be able to fire them in future, so we won’t”. That shows me what is really focusing employers’ minds in whether they hire more employees. After all, we are told that that is the Government’s driving motive behind the Bill.

We believe that stripping away employment rights is fundamentally misconceived and stems from a real lack of understanding of how the law works in practice. Contrary to what the Government claim, it is not difficult to dismiss an employee, but the employer must follow the proper disciplinary procedure. Time and again you will hear that that has not happened. Employers have inadequate or, in some cases, no disciplinary procedures in place. It is then that they are rightly challenged by the employee.

Including it as a consideration in whether to levy an additional financial penalty would send a strong signal to employers that it is unacceptable not to make adequate provision for a formal disciplinary or grievance procedure and for the training of their managers. As well as incentivising proper training and procedure, which would, we hope, lead to fewer claims being brought in the first place, the listing of possible considerations under the definition of aggravating features in the amendments would also provide greater clarity about what actions by an employer might result in a financial penalty under Clause 14.

The Explanatory Notes state:

“Section 12A does not prescribe the features which employment tribunals should take into consideration when determining whether a breach had aggravating features; this is for the employment tribunal to decide”;

and that, furthermore:

“The concept of aggravating features in section 12A is not the same as the existing regime of aggravated damages in discrimination claims in England and Wales”.

To my knowledge, the Government have not set out anywhere a list of features which might be deemed aggravating by the tribunal. We urge the Government to provide further clarity on that issue. I beg to move.

[Baroness Turner of Camden]

My Lords, I hope that the Government will see fit to accept the amendment, because I should have thought that it was in their interests. One of the aspects that comes out from discussion of the Bill is that the Government are anxious to stop people going to tribunals. Of course, if you have managers properly trained and a series of agreed procedures, it is far more likely that issues will be settled in-house, so to speak, rather than having to go to a tribunal in the first place. Therefore, it seems very much in the interests of the Government to accept this wording, which talks about the aggravating circumstances but also, I hope, will act as an incentive to employers to make sure that their managers are trained. If you have a trained management, you are much less likely to have an issue that needs to be taken to a tribunal. As we know from our previous discussions, the Government are endeavouring to limit the number of issues that get to a tribunal. I should have thought that acceptance of the amendment was in line with that policy.

16:00

[Lord Marland]

First, I would like to make a couple of points on training, which is of great interest to the noble Lord, Lord Young of Norwood Green. We all agree that training is absolutely fundamental and his knowledge, expertise and commitment to it are very high. This Government have spent a huge amount of money on training, on mentoring and on various other things. We must be getting something right because a million new jobs have been taken on board in the past two years in the private sector. We do not have a load of people running away from employment. It demonstrates clearly that, with unemployment going down and employment in the private sector going up, the policies that we have created to foster employment are working and seem to be working satisfactorily. I do not think that this is a block to training or ongoing employment. The noble Lord would have been right to point it out had this Government not been keen that we should do it.

Let us be fair. All of us are keen that employers should meet their obligations to their employees. That is what we are all here for. None of us is here saying that we want to withdraw this and that. We are arguing around the margins. Throughout this, as I have also argued, ultimately it is up to the tribunal. As we have said, and as the noble Baroness, Lady Turner, has rightly said, a tribunal is the last place where we want things to go to. We want them to have gone to ACAS beforehand, as we have previously agreed, and we want the employer and the employee to have sorted it out by themselves. I am compelled by the point made by the noble Baroness.

Ultimately it is the tribunal that will be making the decision if it gets to that point. We hope that it does not. It will ultimately determine whether there are aggravating features and we cannot be too prescriptive about aggravating features. Paragraphs 86 and 87 on page 18 make it clear how we see this. With that, I rest my case, other than to say that these tribunals have it in their power to take these issues into account. They can uplift the award by 25% should they so wish and we would obviously urge them to do so because we all want to see the right and fair things for employees and employers. With that I hope the noble Lord will withdraw his amendment.

[Lord Young of Norwood Green]

The Minister has still not addressed our main concern. I do not deny that the Government are spending significant amounts of money on training and we welcome that. Our concern is the worrying statistic produced by the Chartered Institute of Management which says that only one in five managers have any training. That is a worrying statistic. The purpose behind the amendment was to give a clear signal to employers that if they persist in failing to train their managers or having proper procedures they will pay a price. While we beg leave to withdraw the amendment, we will consider returning to this on Report.

Amendment 20MA withdrawn.

Amendment 20MB not moved.

Amendment 20N

Moved by

[Lord Young of Norwood Green]

20N: Clause 14, page 11, line 47, at end insert—
“(11) Any money paid by an employer purporting to meet a liability to pay a penalty under this section shall be treated instead as payment of any financial award on a claim against that employer to the extent that any such award has not been paid.”

[Lord Young of Norwood Green]

My Lords, Amendment 20N follows on from the previous amendment in that it also deals with unpaid compensation. This amendment would allow the tribunal, in making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. In addition, it would allow the Secretary of State to bring forward regulations to charge interest on any award that remained outstanding beyond the payment deadline specified by the tribunal.

On Report in another place, the Minister said in relation to unpaid awards that the Government are,

“consulting on two changes that I believe might have some effect on the number of awards paid promptly. They include proposals to put a date on a tribunal’s judgment specifying when payment should be made and to charge interest from the date of judgment where an award is unpaid after 14 days. These charges will apply to all cases, not just to unfair dismissal cases. Importantly, in that scenario the interest will be added to the award and paid to the claimant”.—[Official Report, Commons, 17/10/12; cols. 344-45.]

That consultation closed on 23 November. Therefore, I am very keen to hear from the Minister the Government’s findings in relation to this important issue and whether they will accept the opposition amendment that seeks to bring into effect a new power to ensure that compensation is paid to the individual. I beg to move.

[Lord Marland]

Of course we are in great harmony, even though I am sure I shall have it thrown back in my face. The consultation ended in November and we are about to publish the information. Incidentally, when we have established our response, I shall be very happy to have a private meeting with the Opposition—of course, there is no reason why it should be with just the Opposition; it should be with any noble Lords in this Room—to discuss the various aspects of this issue, and my officials will be at your Lordships’ disposal. I do not have the information to give the Committee chapter and verse right now but we will give noble Lords chapter and verse before we get to the next stage of the Bill.

I acknowledge that there is a problem with enforcing awards. With that in mind, and in order to recognise to some extent noble Lords’ interpretation of this matter in tabling this amendment and the reference to it at Second Reading by my noble friend Lord Razzall, we are going to commission some research before Christmas. We are about to appoint someone, who will report on the subject in April. We totally acknowledge that this needs to be right. All of us in this Room share the same concerns, and we are committed to going along the same path together. On that basis, I hope that the noble Lord will withdraw his amendment.

[Lord Young of Norwood Green]

My Lords, I welcome the invitation to discuss the issue with the Minister following the consultation. In the light of that assurance, I beg leave to withdraw the amendment.

Amendment 20N withdrawn.

Amendment 20P

Moved by

[Lord Young of Norwood Green]

20P: Clause 14, page 11, line 47, at end insert—
“(11) Where an employment tribunal makes a financial award against an employer on a claim, that tribunal must also specify a date by which that award must be paid.
(12) A date specified under subsection (11) shall be no later than one month following the date on which the decision was made.
(13) The Secretary of State shall introduce an order providing for the payment of interest by an employer on any award that remains unpaid after the date specified under subsection (11).
(14) Any interest levied under subsection (13) shall be paid to the worker to which the claim has been awarded.”

[Lord Young of Norwood Green]

My Lords, this amendment follows on from the previous amendment and provides for the tribunal, when making an award on a claim, also to specify a date by which that award should be paid, to be no later than a month following the decision. It also allows the Secretary of State to bring forward regulations providing for the payment of interest on any unpaid awards. I would welcome the Minister’s response. I beg to move.

[Lord Marland]

Again, I think that I largely responded to this amendment in my comments on the previous amendment. We will be publishing our findings and are assimilating them at the moment. We have committed to publishing them in February, which we will do, and I do not really want to go into too much detail now. I am happy to talk about the whole issue at large with anyone who would like to know about it, and I hope that that answers the question raised by the noble Lord.

[Lord Young of Norwood Green]

My Lords, I think that that leaves us in the same situation we were in on the previous amendment and, again, I welcome that assurance. In the light of that, I beg leave to withdraw the amendment.

Amendment 20P withdrawn.

Amendment 20PA not moved.

Clause 14 agreed.

Schedule 3 agreed.

Clause 15: Disclosures not protected unless believed to be made in the public interest

Amendment 20Q

Moved by

[Lord Young of Norwood Green]

20Q: Clause 15, page 12, line 4, leave out from “subsection” to end of line 5 and insert “(1)(b), after “any legal obligation to which that person is subject,”, insert “other than a private contractual obligation which is owed solely to that worker”.”

[Lord Young of Norwood Green]

My Lords, the amendment is an alternative to the public interest test proposed by the Government. The advantage of the amendment is that it deals with the Parkins v Sodexho Ltd points directly by narrowing the breach of legal obligations category at Section 43B(1)(b) of the Employment Rights Act 1996. This is a better solution than the Government’s proposal, as the public interest test is likely to lead to satellite litigation as courts are left to consider what is and what is not in the public interest.

The amendment was proposed by Ian Murray MP during Committee in the Commons, but was rejected. During the Commons Committee, Norman Lamb MP, serving as the Parliamentary Under-Secretary of State for Employment Relations, Consumer and Postal Affairs, objected to the proposal on three grounds: first, that there can be private contractual rights that it is in the public interest to cover; secondly, that the public interest test is needed because the abuse of the whistleblowing provisions is commonplace; and, thirdly, that the proposal will stop workers from gaining protection for trivial breaches of health and safety.

The first point shows a fallacy in the Government’s argument, as it seems to suggest that there are private employment rights that it is in the public interest to cover, therefore undermining the need to have the Government’s test.

The Government state that the provision is being widely misused. There has not been consultation on the issue, and all evidence is anecdotal. Although the Parkins v Sodexho Ltd point may have led to some individuals misusing the legislation, the Government’s approach is worrying. They overestimate the scale of the problem. Whistleblowing claims lodged with the Employment Tribunal Service account for less than 1% of all claims. During the Scrutiny Committee, Public Concern at Work provided evidence to show that during 2009-10, only 35 judgments involved a Parkins v Sodexho Ltd point out of 464 substantive judgments.

Thirdly, the point about triviality is misguided. The purpose of PIDA is to prevent a disaster and to encourage workers to speak up when they have suspicions. Issues that at one point seemed trivial may in fact be indicative of underlying problems in an organisation and could be the tip of the iceberg. A public interest test may have the unintended consequence of focusing on how big the disaster is or was likely to be and mean less focus on reporting early suspicions. Issues such as missed medication in a care home may seem relatively minor compared to a multi-million pound fraud, such as that in the high-profile Olympus case, but the former could be a matter of life and death.

Moreover, the test builds the perception of barriers in the protection of whistleblowers. When that is added to the fact that PIDA is little known and often misunderstood, we believe that the legislation will be undermined by that approach. It will also add to the idea promulgated in the media that if you are a whistleblower, you will be burned and that the law is too complicated to protect you.

In sectors such as health and care, where whistleblowing can save lives and taxpayers’ money, and where gagging clauses and hierarchical professions and workplaces impose real obstacles for the individual, such an amendment will be seen as another obstacle. The honest and reasonable whistleblower, faced with an increasingly complex piece of legislation to navigate, should they be poorly treated, may not choose to speak up. That is a rather damning and worrying position, nearly two decades on from the Bristol Royal Infirmary inquiry, when the whistleblower, Dr Stephen Bolsin, was forced to leave the UK to find work. That shows the pressures on whistleblowers in difficult and sensitive situations. I beg to move.

16:15

[Lord Marland]

My Lords, I have been very interested in the whole discussion on whistleblowing. I thank the noble Lord, Lord Touhig, and his team for their input to our thinking in the past few weeks. It has shed light on a number of issues that we will deal with later in his amendments, which are well thought out and on which we are coming to a conclusion. I want all Peers to know how important we believe this matter to be and how important it is to get it right. We are all singing off the same hymn sheet and obviously want to protect the whistleblower, and that is very much part of what we want to do.

My concern is that the amendment would narrow the whistleblowing provision. Public interest is critical: that is the primary thing rather than breach of contract. The noble Lord, Lord Young, has thrown up a number of examples of breach of contract and we could counter with examples showing where it does not quite work. I am delighted that the noble Lord, Lord Borrie, has just arrived because he is the one we have looked back to in coming forward with this. I wanted to look this up when we first embarked on this issue: at Second Reading on 11 May 1988—we were only children then—the wisdom of the noble Lord, Lord Borrie, had been honed to absolute perfection in the Public Interest Disclosure Act. I shall not read all of his speech but the following words are spot on. He said:

“As I hope I have made clear, this measure will encourage people to recognise and identify with the wider public interest and not just their own private position”.—[Official Report, 11/5/98; col. 891.]

I consider that in returning to contract people would identify with private position rather than the wider public interest. That is the seriousness of the threat. My view and that of the Government has not changed since then—I have given only an extract from an excellent speech—and I believe that we should carry on on that basis. I hope that will encourage the noble Lord to withdraw his amendment.

[Lord Borrie]

It is hardly for me to criticise when the Minister has quoted from a speech of mine in the most favourable terms, but the debate was in 1998, not 1988.

[Lord Marland]

I apologise. Of course, the noble Lord’s wisdom had been honed even further by 1998, which gives the speech more gravitas.

[Lord Young of Norwood Green]

I thank the Minister for his response. We will read Hansard carefully to see whether we need to return to the issue. I beg leave to withdraw the amendment.

Amendment 20Q withdrawn.

Amendment 21

Moved by

[Lord Marland]

21: Clause 15, page 12, line 5, at end insert —
“(2) Section 43K of that Act (extension of meaning of “worker”) is amended as set out in subsections (3) to (8).
(3) In subsection (1)(ba)—
(a) for “section 84 or 100 of” substitute “section 83(2), 84, 92, 100, 107, 115(4), 117 or 134 of, or Schedule 12 to,”;(b) for “section 42 or 57 of” substitute “section 41(2)(b), 42, 50, 57, 64 or 92 of, or Schedule 7 to,”;(c) omit the words after “the National Health Service (Wales) Act 2006”.(4) In subsection (1)(bb), after “section 17J” insert “or 17Q”.
(5) In subsection (1)(c)—
(a) for the words before “in accordance with arrangements” substitute “works or worked as a person providing services”;(b) in sub-paragraph (ii), after “section” insert “2C, 17AA, 17C,”.(6) Omit subsection (1)(ca) and the preceding “or”.
(7) Omit subsection (2)(ba).
(8) After subsection (3) insert—
“(4) The Secretary of State may by order make amendments to this section as to what individuals count as “workers” for the purposes of this Part (despite not being within the definition in section 230(3)).
(5) An order under subsection (4) may not make an amendment that has the effect of removing a category of individual unless the Secretary of State is satisfied that there are no longer any individuals in that category.”
(9) In section 236(3) of that Act (orders etc subject to affirmative resolution procedure), after “shall be made under section” insert “43K(4),”.
(10) In consequence of the amendments made by subsections (6) and (7), omit paragraph 7(a)(ii) and (b) of the Schedule to the Smoking, Health and Social Care (Scotland) Act 2005 (Consequential Modifications) (England, Wales and Northern Ireland) Order 2006 (S.I.2006/1056).
(11) Until the coming into force of the repeal (made by Schedule 3 to the Smoking, Health and Social Care (Scotland) Act 2005 (asp 13)) of sections 27 to 28 of the National Health Service (Scotland) Act 1978 (“the 1978 Act”), section 43K(1)(c)(ii) of the Employment Rights Act 1996 has effect as if it included a reference to section 27A of the 1978 Act.”

[Lord Marland]

My Lords, government Amendment 21 aims to ensure that the right people are covered by the whistleblowing protections and amends the definition of “worker” in Section 43K of the Employment Rights Act 1996.

Following National Health Service reforms, certain health professionals have been inadvertently excluded from whistleblowing protections as their contractual agreements are not covered by the existing definition of “worker” in the legislation. We believe that it is important that this situation is rectified, so we are amending the definition of “worker” to cover these individuals. We are also taking a power to ensure that future amendments to the definition of “worker” can be made through secondary legislation. This will provide us with the flexibility to react promptly to ensure that the right individuals are protected.

I trust that noble Lords will support this move which remedies an inadvertent omission and ensures that health workers are properly protected. I beg to move.

[Baroness Turner of Camden]

My Lords, I understand from the Government’s statement and from what the Minister has said that the intention is to ensure that people who ought to be covered by the Act in future will in fact be covered. What bothers me about it, however, is Clause 4, which gives the Secretary of State the right to make amendments as to what individuals count as workers for the purpose of this part. It seems to me that that leaves the whole thing fairly wide open as far as the Government are concerned: they would be able to introduce secondary legislation to indicate that some people are workers and other people are not workers. That is a bit of a difficulty as far as we are concerned.

As far as the clause itself is concerned, it had been my intention to move that it should be opposed, mainly because the TUC’s view is that the wording as it now exists in the Bill introduces a public interest test into whistleblowing rights and, for such claims to succeed, the employee will have to demonstrate that he believed that disclosure was in the public interest and that this belief was reasonable in the circumstances. The view of the TUC was that this would limit the protection that employees have in raising concerns about health and safety issues at work. The Law Society also has doubts about this clause. For these reasons I intended to oppose the clause. However, my noble friends have further amendments which we are due to discuss and which I think will deal with some of the problems that some of us have with this clause.

Of course, I am sure that the Minister will appreciate that it is very important to ensure that workers, particularly those working in very dangerous environments, do not have any restrictions about whether or not they may raise problems they have about health and safety at work. I can remember my own union being very much involved with this many years ago when there was the awful accident at Piper Alpha in the offshore oil industry, in which a number of workers were killed. We discovered on investigation that a number of individuals working there had short-term contracts and, because they had short-term contracts, they were very reluctant to warn about the kind of issues that were of concern to them about safety and so on because they feared that they would not have their short-term contracts renewed.

There is a case for looking at the way that this clause in the present legislation works to ensure that we do cover everybody who might have the possibility of drawing attention to possible dangers in their working environment. We must be absolutely certain that they are not prevented in any way from raising those particular issues. I will not, this evening, be pressing the opposition to the whole clause, but I certainly think that we need to look at it very thoroughly before the legislation leaves us.

[Lord Stevenson of Balmacara]

My Lords, in the margins of the debate that we have just had the Minister very kindly passed across the original quote from the 11 May 1998 House of Lords Second Reading debate on the then Public Interest Disclosure Bill. I had to read it very quickly because I was not as well briefed as perhaps I should have been when coming to this debate. I want to make a point that I think influences the way that we might need to respond to the clause-stand-part part of the discussion that we are having today.

The interesting thing about this debate is that we are focusing on the words “the public interest”. I suggest to the Minister that it might be sensible to have a discussion about what the Government are trying to do here. Rather than in the openness of this debate, perhaps we could have a side meeting on it. The reason I am saying that is that, reading the speech of the noble Lord, Lord Borrie, one might think that if he made it up as he went along, it was extremely well written. I imagine that he read it out at the time from a brief that he had. The important thing about it—I am sure that the Minister will have been on to this immediately—is that the Minister was selective in what he quoted to us. The noble Lord, Lord Borrie, said that,

“the tribunal must be satisfied that that disclosure was reasonable, having regard, among other things, to the seriousness of the threat to the public interest, whether the danger is continuing or likely to occur again, whether the disclosure was in breach of an obligation of confidentiality owed to a third party and, where appropriate, whether use was made of any whistle-blowing procedure which the organisation had in place”.—[Official Report, 11/5/98; col. 891.]

The noble Lord then went on to make the quote to which the Minister referred.

The point that I want to underline is that the tribunal has to be satisfied that disclosure was reasonable: that is the founding principle of this part of the legislation. “Having regard to” is a secondary feature of that in relation to the seriousness of the threat to the public interest. It seems to me that this amendment substitutes the present arrangements for the reasonableness —having regard to other things—of the seriousness of the threat to the public interest, to a direct concern for “the public interest”, however we define that. It seems to me that in making that rather elegant elision we are in danger of opening a much wider range of issues that need more thought than we can possibly give it in this Committee, which is why I suggest that we have a meeting.

The Minister says that this is ongoing work—we welcome that. He says that it is important—we certainly echo that. He is also asserting, and we would agree with this, that we are singing off the same hymn sheet. So we are surely trying to get to the same place here. I do not think that there is a difference of approach: I just worry that the wording is not as you would do it.

The complexity of this issue is that, as the noble Baroness said very clearly, we all want those who should be covered to be covered by this part of the legislation, but we do not want to have the risk that those who could be covered are not covered by it. I think that that is a really important point. It is in that sense that we would ask the Minister to respond to this and, perhaps, to take up our suggestion of a side meeting.

[Lord Marland]

I am always available for side meetings to discuss this. I think that the noble Lord, Lord Stevenson, is clutching at straws a little in his interpretation, but then, we each have our own interpretation. I do not see that, at the end of it all, we are going to move this back to breach of contract, to which the previous amendment—which is now withdrawn—related. I am grateful for the noble Lord’s words that we are all trying to move along the same path together. That is why we should continue to discuss this, which would be most welcome.

The noble Baroness, Lady Turner, reminded me of Piper Alpha. I used to be in the insurance industry and that was a seismic event for that industry. How well I remember the loss of life. It was a shocking moment for everybody who was involved in insurance. Luckily those who were worried ended up in jobs because, obviously, the oil industry was able to recover very quickly from that horrendous accident and its expertise was needed.

Both the noble Baroness and the noble Lord, Lord Stevenson, mentioned the list. It is all about definition of “a worker”. We can only remove “a worker” from the definition if that category of worker no longer exists. What we have sought to do in the first part, which I think everyone is very happy about, is to recognise that we have failed to add some workers in. We have put a provision in the Bill to add others in if a worker group does start to exist, and of course we will remove one if they do not exist. It is an ongoing thing, which is why we have provided for that definition.

I am not quite sure where we have got to. Lord Chairman, perhaps with your great wisdom you can guide us. I moved an amendment and I think that the noble Baroness was speaking to her amendment as well as to mine. I ask for guidance, Lord Chairman. I hope that one amendment will be supported and the other will not be pressed.

[Lord Geddes]

As is normal on these occasions, we take it strictly by the order of the Marshalled List. The question therefore is that Amendment 21 be agreed to.

Amendment 21 agreed.

Clause 15, as amended, agreed.

16:30

Amendment 22

Moved by

[Lord Touhig]

22: After Clause 15, insert the following new Clause—
“Duty on employers to prevent detriment caused by others to workers who have made protected disclosures
(1) The Secretary of State shall make regulations requiring an employer, where a worker has made a protected disclosure under section 43A of the Employment Rights Act 1996, to take reasonable steps to ensure that the worker is not subjected to any detriment by any act, or any deliberate failure to act, by a person other than his employer done on the ground that the worker has made the disclosure.
(2) Regulations under this section—
(a) are to be made by statutory instrument, and(b) are not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

[Lord Touhig]

My Lords, I am grateful to my noble friend Lord Wills, the noble Lord, Lord Low of Dalston, and of course my noble friend Lady Dean of Thornton-le-Fylde for agreeing to support Amendment 22. I am also grateful to the Minister, the noble Lord, Lord Marland, for agreeing to meet with me and representatives of the charity Public Concern at Work to discuss this amendment and Amendment 23. I also thank him and his officials for being willing to continue this dialogue with Public Concern at Work these past couple of weeks.

This amendment concerns vicarious liability. Earlier this year, I received a letter from one of three nurses who had been denied protection under the Public Interest Disclosure Act. The three nurses had raised concerns about the qualifications of a fellow nurse. The nurse had been claiming to be more qualified than was in fact the case. The three nurses were subsequently victimised and, as a result of raising honest and genuine concerns, one had threats made to her daughter and to her home. The case went as far as the Court of Appeal, where it was found that vicarious liability does not exist under the Public Interest Disclosure Act. As a result, three totally innocent and good nurses, who simply acted to protect the public, were pursued by the NHS Manchester trust for the cost of the appeal, which amounted to £39,000.

These three nurses acted in the interests of us all but, as a result, have themselves become victims. I have to ask: where do people go to right a wrong such as this, except to Parliament? As things stand, employers are able to escape liability where they do not protect those who have blown the whistle about serious malpractice within their workforce. On top of that, the bullying culture within the workplace is all too common.

Public Concern at Work tells me that bullying as a result of whistleblowing is a common issue raised on their whistleblowing advice line. Indeed, this is so in the case of Nurse Helene Donnelly, who gave evidence to the Mid Staffordshire NHS trust inquiry. She is a whistleblowing nurse who told the inquiry how she was physically threatened by colleagues after raising concerns about standards in the accident and emergency department. She told the inquiry that,

“threats to my physical safety were made”,

to the point where, after finishing work at night, she would have a family member,

“come and collect me from work because I was too afraid to walk to my car in the dark on my own”.

Mrs Donnelly also told the inquiry that she contacted her local Royal College of Nursing representative, who was initially shocked by what she had to say. Later, however, she was told to keep her head down.

Amendment 22 encourages employers to put whistleblowing arrangements in place and, if they do all they can to protect the whistleblower, employers will have a defence. It has been drafted widely to include third parties but, given the Government's review of third-party harassment under the Equality Act, it could be limited solely to co-workers. The letter I received from one of the nurses asks one simple question:

“Is there anything you feel you may be able to do to stop NHS Manchester pursuing us for these costs?”.

Well, there is something we can do and that is to support Amendment 22. I beg to move.

[Lord Wills]

My Lords, I support Amendment 22, to which I have added my name and which has been so ably put forward by my noble friend Lord Touhig.

As we have heard, Amendment 22 seeks to close a loophole which was opened up by a Court of Appeal decision on a case brought by the three nurses from Manchester. The Court of Appeal judge who ruled in that case said:

“I accept”,

that the claimants’ lawyers,

“may be right to say that if the Tribunal decision is allowed to stand, it means that on one view of the matter whistleblowers are inadequately protected. If so, any remedy must lie with Parliament”.

We now have an opportunity to provide that remedy and I hope that the Government will take it.

The Minister’s noble friend, the noble Earl, Lord Howe said in October last year, when the results of this case were heard:

“We are considering whether we need to do more to protect whistleblowers following this judgment”.

Can the Minister tell us the outcome of those considerations within government; and, if they are not going to act now, why not?

As we have heard from my noble friend, there is significant evidence from the organisation Public Concern at Work that harassment and bullying by co-workers can often be a consequence of whistleblowing and a substantial deterrent to it. This is not acceptable. It is not acceptable that an employer can escape liability for failing to protect a whistleblower from such harassment and bullying. The amendment offers a simple way of remedying such an obvious anomaly by mirroring equality legislation. I hope the Government will feel able to accept it.

I also hope that the Minister will look favourably on my Amendment 23E, which further refines this approach by providing for personal liability against workers who bully or harass co-workers for whistleblowing. It will act as a powerful deterrent to such behaviour and, in doing so, help to encourage whistleblowing. It mirrors provisions in discrimination legislation and I hope that the Government will feel able to accept it.

[Lord Low of Dalston]

My Lords, I have added my name to the amendment but I do not think I can say a lot more than has been so eloquently said already by the noble Lords—they are not my noble friends—Lord Touhig and Lord Wills. Clearly there is a loophole in the law. The court has said that if the matter is to be resolved it is down to Parliament to do it. The Minister’s noble friend and colleague Lord Howe has recognised that there is a need to give attention to this matter and we shall all be interested to hear how far the Government have got with that consideration.

We have the opportunity now to do something about this and I am sure that everyone agrees that we should. I have been horrified by the cases we have heard about—the Manchester nurses and others—where people have been subjected to threats of having their houses burnt down and so on. This is clearly intolerable. There needs to be a legal remedy and the one proposed is perfectly appropriate. It does not impose an unduly onerous burden on the employer, who is simply required to take no more than reasonable steps. That being the case, I strongly urge the Grand Committee to support the amendment.

[Baroness Dean of Thornton-le-Fylde]

My Lords, I support what has been said by the noble Lord, Lord Low of Dalston, who happens to be a friend. If there is a part on whistleblowing in the Bill when it leaves the House, these two amendments will make a significant difference.

We could all regale the Committee with a number of stories about people being bullied and intimidated, but the case in Manchester went the whole hog and the courts were not able to help. Not only were the three nurses concerned unfairly treated but the case sent a strong message to people in the health service to keep their heads down and not to complain because, even if they complain and it goes through the ultimate procedure, the employer will not be able to stand with them. In fact, in this case the employer pursued the nurses for damages.

I do not wish to extend the debate. This is a principal issue in the Bill as it stands and, if this House can make an amendment along the lines of the one proposed—even if it is not worded perfectly at the moment—it will be a major contribution. There are no divisions between the parties on this. We all want to see the role of the whistleblower not only enhanced and supported but protected, otherwise the message going out will be, “We have the legislation, but please do not use it”.

[Baroness Brinton]

My Lords, I add my support to Amendments 22 and 23E for all the reasons already stated. It is unfortunate that many of the examples cited have referred to the NHS, where it seems that there is still quite a culture against whistleblowing. Having been involved in two organisations as they created whistleblowing policies, I know it is not just a matter of legislation; it is very much about changing the culture within an organisation. It seems to me that the remedies for solving this very particular problem exist within Amendments 22 and 23E, so I do hope that the Government will consider them.

[Lord Borrie]

I apologise for not being here earlier when the subject of whistleblowing obviously came up in discussion. I was hoping to be here from the beginning, but I am afraid I am one of those caught by having an interest in another Bill—the Crime and Courts Bill—that is going through the Chamber. I waited until my interest had ceased there before coming here, for which I apologise.

I support this amendment very warmly. The more I hear of it from speakers from the Liberal Democrat Benches and the Cross Benches, as well as from the Official Opposition, the more strongly I feel that there is a gap in the whistleblowing legislation that needs to be filled.

The Public Interest Disclosure Act 1998 was a Private Member’s Bill that would not have reached this House at all had it not been for the efforts of Richard Shepherd, still a Member of Parliament for Aldridge-Brownhills, who took up the cudgels, helped by the organisation Public Concern at Work, which still exists and does valuable work. When he had the support of the Commons, I was able to take on the task of putting it through the House of Lords. Several of my supporters at that time are sitting in this Room today, including my noble friend Lady Dean of Thornton-le-Fylde, who has just spoken so helpfully on this amendment.

I feel that the gap in the whistleblowing legislation is a fundamental one that really needs to be filled. A whistleblower is protected against unfair dismissal if he is covered by the existing legislation and has reported on some wrongdoing in the workplace, but he cannot be protected from fellow employees. They may engage in bullying, harassment, or whatever you would like to call it, against the whistleblower for doing what many people in certain cultures within certain employee workforces would call “sneaking”. The whistleblower has snitched on fellow workers, and in many places of employment that is regarded as wrong and it is considered that the whistleblower deserves to be pushed around in every possible way. Making the employer responsible or vicariously liable—I am sorry to use that phrase if noble Lords are fed up with the lawyer language in this place—for the faults and errors in the culture of their workforce is what is needed. That will do the trick, making it in the employer’s own interests to ensure that victimisation, harassment and bullying does not take place. It will be a powerful deterrent if this amendment is passed.

A whistleblower can be affected adversely not only by his employer, for which there has now been protection for many years, but by fellow employees, and this amendment is meant to deal with that. My noble friend Lord Touhig was active in this area in the 1990s, before I was. If this amendment is carried it will be because he and Public Concern at Work have realised and understood that there is a gap that must be filled when we have the opportunity.

16:45

[Lord Brooke of Sutton Mandeville]

My Lords, I have no idea what the Minister is going to say in response to this but I raise one textual question which I address to him rather than to the mover of the amendment. In Amendment 22, in the fifth line of subsection (1), there is a reference to “a person” in the singular. If my noble friend were minded to accept this amendment, I would be interested to know whether he feels that it would have been strengthened by the inclusion of “or persons” after “person”. It seems possible in terms of the case that the victimisation may be the work of more than one person.

[Lord Young of Norwood Green]

My Lords, I, too, support the thrust of what my noble friends Lord Touhig and Lord Wills seek to do with these amendments, which is to extend vicarious liability to whistleblowing legislation. This loophole has been graphically explained to us in the context of three nurses from Manchester who raised a concern about a colleague lying about his qualifications. The nurses raised their concerns within the service and the primary care trust and their concern was upheld. However, as we have also heard, the nurses were subject to bullying and harassment from co-workers. One of the nurses received a telephone call threatening her daughter and to burn down her home. As we have already heard, the case proceeded as far as the Court of Appeal, which found that vicarious liability does not exist in the Public Interest Disclosure Act as it specifically does in discrimination law.

We have also heard that shortly after the publication of the judgment the noble Earl, Lord Howe, the Health Minister, agreed that this area needs to be reviewed. Public Concern at Work reports that it routinely hears on its advice line about harassment and bullying of whistleblowers by co-workers. It is bad news for whistleblowers everywhere if those who are bullied by fellow staff members are not protected and represents yet another barrier that may inhibit workers from raising legitimate concerns, which are in the public interest, over wrongdoing by their employer. The amendment by my noble friend Lord Touhig would introduce a new clause that imposes a duty on employers,

“to take reasonable steps to ensure that the worker is not subjected to any detriment by any act, or any deliberate failure to act, by a person other than his employers done on the ground that the worker has made the disclosure”.

My noble friend Lord Wills proposes a further refinement to this approach, which would be to include personal liability against workers who bully co-workers for blowing the whistle. Such an amendment is likely to have a powerful deterrent effect and will mean that those who may otherwise be tempted to victimise a colleague for blowing the whistle may think twice because of their own potential liability for doing so. Again, this is included in the relevant Equality Act, that of 2010.

These amendments have even more relevance if we look at the current circumstances where the lack of whistleblowing in recent high-profile cases—such as the Jimmy Savile scandal, the high mortality rates under Mid Staffordshire NHS Foundation Trust and phone hacking at the News of the World—suggests that much more needs to be done to encourage and, perhaps even more importantly, protect workers blowing the whistle on malpractice and wrongdoing in the workplace. Workers are the eyes and ears of any organisation and often the first to know if things are going wrong or to have suspicions about malpractice in the workplace. Workers can prevent the disaster from happening and alert their own companies and regulatory authorities to prevent health and safety dangers, financial malpractice and environmental risks that may affect members of the public.

It is over 13 years since the Public Interest Disclosure Act 1998 and we believe that it is high time that the whole system should be reviewed—we would welcome the Minister’s views on that—to identify where further protection is needed to encourage employees to speak out when they see wrongdoing taking place.

[Lord Marland]

Again, we are extremely sympathetic towards and supportive of each other. It is not just the Cross Benches, the Labour Party and the Liberal Democrats who are keen to get this right but the Conservatives as well. I reiterate my thanks to the noble Lord, Lord Touhig, and Public Concern at Work, with which we are working very closely on this issue. I also thank the noble Lord, Lord Wills, for his input, even though we have not had the pleasure of discussing this subject outside this Room—something that I should like to do in future. I am jolly glad that we included the NHS provision in the previous amendment, because some progress seems to have been made there in view of some of the absolutely ghastly stories that have been referred to.

My noble friend Lord Brooke of Sutton Mandeville brought up a very important point. I am told that under the Interpretation Act “single” means “plural” when necessary, so I do not think that we would need to amend that in the amendment.

I have had wide-ranging discussions with the noble Lord, Lord Touhig, and Public Concern at Work across the whole piece, and those discussions have covered Amendments 23 and 23F, which we will be coming to in a few minutes. We are very conciliatory on all this, and on Amendment 23F, in particular, both parties have formed a set of words to deal with the issue of good faith and so on. I think we have found satisfaction with Public Concern at Work and with the noble Lord, Lord Touhig, so perhaps I may look at the issue as a whole.

We need to be careful when going down this route with Amendments 22 and 23. The truth is that the absence of vicarious liability and whistleblowing is not a loophole because there is legislation that provides for it, and it provides for both the employer and the employee. I am struck, as I always am, by the point made by the noble Lord, Lord Borrie, about the employee having protection as well as the employer. That is fundamental. Indeed, they would both be protected under the Protection from Harassment Act 1997; that is the legislation that they would return to in order to claim their rights. Therefore, they have the right protection in this area. It is a strong law that, sadly, has not encapsulated all the whistleblowing issues, but nothing is ever entirely encapsulated. However, whistleblowers have an absolute right and this amendment would put in another level of protection, which is not in the Bill because it already exists.

We should be looking at improving the guidance on this issue. I have instructed my officials to look at the guidance that we are putting on the government website to show where the rights of recourse are and what rights the employer and the employee have under the interpretation of the Protection from Harassment Act. This will be on our gov.uk website. On the basis that we will have an ongoing discussion between now and Report, I hope that the noble Lord will feel confident about withdrawing his amendment for the time being.

[Lord Wills]

Can the Minister clarify something for me? I am very grateful for his openness and willingness to carry on a discussion about this but I should be grateful to know the Government’s position on what Lord Justice Elias said in the Manchester case, which we have heard about. I accept that it is a qualified statement but he said he accepted that the claims lawyers,

“may be right to say that if the Tribunal decision is allowed to stand, it means that on one view of the matter whistleblowers are inadequately protected. If so, any remedy must lie with Parliament”.

On the facts of that case, is it the Minister’s view that whistleblowers are or are not inadequately protected?

[Lord Marland]

I do not have a view because I do not have enough knowledge of the subject. As the noble Lord rightly said, he is quoting a small piece that I am unable to form an opinion on because I do not have enough evidence to support one view or another. However, I shall be happy to respond to the noble Lord on that issue. It is a perfectly reasonable question but it is too specific for me at the moment, I am afraid. I would need to take legal advice on it because I am not qualified in that area. I know that that is not a satisfactory answer but I hope that the noble Lord, Lord Touhig, will withdraw his amendment.

[Lord Touhig]

My Lords, I thank all noble Lords for their contributions. I echo the point made by the Minister; this issue is supported across the House. We are all in the debt of Richard Shepherd MP, who pushed hard to secure this legislation. When I was dealing with it a year or so before, I was not successful, but I should like to put on record the huge support I had from one Iain Duncan Smith, who worked very hard with us to try to ensure that this legislation became law.

I understand some of the Government’s worries and concerns. We have had a useful meeting with the Minister—I have already thanked him for that—and his officials but, at the end of the day, the real prize would be a complete review of the Public Interest Disclosure Act. Aneurin Bevan once said that our principles remained constant but our policies, like tools, have to be reworked with each generation because they get worn out with use. We need to review and revise the Public Interest Disclosure Act.

I hope the Minister and his officials will feel able to continue the dialogue, not only with me but with other noble Lords and Public Concern at Work, because we can improve this legislation by the time we get to Report and Third Reading. With that hope and aspiration, I beg leave to withdraw the amendment.

Amendment 22 withdrawn.

Amendment 23

Moved by

[Lord Touhig]

23: After Clause 15, insert the following new Clause—
“Removal of requirement for protected disclosures to be made in good faith
(1) The Employment Rights Act 1996 is amended as follows.
(2) In section 43C(1) (disclosure to employer or other responsible person), omit “in good faith”.
(3) In section 43E(b) (disclosure to Minister of the Crown), omit “in good faith”.
(4) In section 43F(1)(a) (disclosure to prescribed person), omit “in good faith”.
(5) In section 43G (disclosure in other cases), in subsection (1)(a) omit “makes the disclosure in good faith” and in paragraph (b) leave out “he”.
(6) In section 43H (disclosure of exceptionally serious failure), in subsection (1)(a) omit “makes the disclosure in good faith” and in paragraph (b) leave out “he”.”

[Lord Touhig]

My Lords, Amendment 23 is supported by my noble friends Lord Wills and Lady Dean of Thornton-le-Fylde and by a good friend to everyone on all sides of the House, the noble Lord, Lord Low of Dalston. I have been a Member of the House for less than three years and—I am sure I am not alone in saying this—I could not have had a better friend to encourage and support the things we share in common. I think I speak for people on all sides of the House in that respect.

The amendment seeks to remove the good faith test. It is essentially a tidying-up amendment which needs to be read in conjunction with the public interest test that the Government propose in Clause 15. We have tabled the amendment as a means of reducing the number of hurdles that an individual has to jump in order to succeed under the Public Interest Disclosure Act 1998, as enacted into the Employment Rights Act.

As Clause 15 stands, an individual who brings a whistleblowing claim would have to answer at least four questions. They would have to show, first, that they had made a protected disclosure under one of the categories set out in Section 43B of the Employment Rights Act, which includes information about criminal offences, environmental dangers, health and safety issues, miscarriages of justice and the breach of legal obligation.

They would have to show, secondly, that it was their reasonable belief that the protected disclosure was in the public interest and, thirdly, that they have made a qualifying disclosure, the tests of which vary according to whom the individual discloses the information to. The lowest test for disclosure is where an individual raises a concern internally or with those who are legally responsible for the workplace, and the highest is where an individual raises a concern with an external body—for example, an organisation such as Greenpeace or any part of the media. Individuals need to show that they meet one of the preconditions in the Act and whether the disclosure was reasonable in the circumstances, paying attention to the seriousness concerning to whom the disclosure is made and whether there has been a breach of confidentiality. Fourthly, such individuals will have to show that they have made the disclosure in good faith, which has been interpreted by the Court of Appeal as meaning that the predominant motive for raising concern should be in the public interest.

Individuals would need to show that they had fulfilled all the above conditions to be protected. To have an additional public interest test is simply an unnecessary further hurdle. I am sure that we could all give examples of people being deterred from blowing the whistle. One of my motivations for becoming involved in this issue many years ago was that there were seven reports of ferries sailing with their bow doors open before the “Herald of Free Enterprise” went down. A young lady who left working for an outward bound centre in Dorset raised concerns about its practices, and a number of youngsters lost their lives some time later. I often refer to a young girl who was a student of 16. She had a job on a delicatessen counter in a major supermarket where she discovered that the manager was changing the sell-by dates on cooked meats and other things, putting public health at risk.

There are many cases which I am sure we could all repeat, so we need not put a further barrier in the way of people blowing the whistle when something is wrong. Given that Clause 15 proposes a public interest, it would be simpler to remove the good faith test entirely. This amendment would, in effect, be a counterbalance to Clause 15. I beg to move.

17:00

[Lord Low of Dalston]

My Lords, I strongly support the amendment and hope that I will be worthy of the kind remarks of the noble Lord, Lord Touhig, in referring to my support a few moments ago.

I cannot muster the same forensic analysis as the noble Lord has treated us to but, in my view, the matter is simple. If we leave the good faith test in the Act and add to it the public interest test, which the Government want to add to the legislation, we shall simply be doubling the hurdles that the whistleblower has to clear. When Parliament passed the Public Interest Disclosure Act, it did not insert a public interest test in the legislation. Good faith was seen as the appropriate safeguard, and Dame Janet Smith in her report on the Shipman inquiry commented that it would perhaps make sense if the good faith test were replaced by a public interest test. The Government are acceding to that suggestion but they are leaving in the good faith test. I submit that with this new public interest test inserted in Clause 15, whistleblowers would need to show both that they had the reasonable belief that their disclosure was made in the public interest and that, with the good faith test, their predominant motive for making a disclosure was in the public interest. That creates an additional hurdle for the whistleblower to clear and a requirement to satisfy a sort of double public interest test.

Removing the requirement of good faith, as proposed in the amendment, would simply restore the law to its former balance as between the whistleblower and the organisation, and refrain from imposing additional tests on the whistleblower. Retaining the two tests would unnecessarily complicate the law, requiring the whistleblower to satisfy different tests with different standards: in the one case reasonable belief; and in the other, that there is no ulterior motive. So the amendment would simplify the law, which is in danger of becoming overcomplicated, and clarify and simplify the protection for whistleblowers. I urge the Committee to accept it.

[Lord Wills]

My Lords, I, too, have added my name to the amendment and would like to say just a few words in support of it.

As we have heard, the new test proposed in Clause 15 attempts to remedy a loophole created by the case of Parkins v Sodhexo Ltd. Most people agree that that loophole should be closed but, in doing so, the Government risk creating a new barrier to whistleblowers, adding new complexity to a legal framework which can already be daunting enough for those wishing to expose wrongdoing. The amendment proposed by my noble friend Lord Touhig is an attempt to remedy that by removing the “good faith” test and, as he explained, to rebalance the legislation back towards protection of the whistleblower.

In doing that, as we have just heard from the noble Lord, Lord Low, my noble friend is following the recommendations of Dame Janet Smith in the Shipman inquiry, who said that in her view the words “in good faith” could be omitted from the Public Interest Disclosure Act. She argued:

“The three tiered regime of the PIDA, with its incrementally exacting requirements, should afford sufficient discouragement to those minded maliciously to raise baseless concerns”.

She continued:

“If the words ‘in good faith’ were removed from the PIDA, the test under the PIDA would be brought more closely into line with the test for ‘malice’ in defamation proceedings. It would seem to me to be desirable that the tests should be as close as possible so that a person thinking of making a report can be safely advised about his/her position in respect of both types of proceedings”.

I know that the Government share the view of everyone on the Committee that everything possible should be done to encourage the exposure of wrongdoing, and I hope that even at this relatively late stage, they will feel able to accept what is a modest and sensible proposal to that end. If, for whatever reason, they do not, I would be grateful if the Minister could explain why the Government reject the arguments of Dame Janet Smith. Why do they not accept that the three-tiered regime, with its incrementally exacting requirements, affords sufficient discouragement to those minded maliciously to raise baseless concerns—especially as they are remedying the loophole created by the case of Parkins v Sodhexo Ltd? Secondly, can the Government explain why they think that it is not desirable for the tests in the Act to be brought more closely in line with the test for malice in defamation proceedings?

Having said all that, I understand that the Government are engaged constructively in discussion with Public Concern at Work. I hope that they may feel able to accept the compromise amendment which I have tabled as Amendment 23F. That recognises that, for whatever reason, the Government are not keen to accept Amendment 23 but might be prepared to accept an amendment which removes good faith as an issue in assessing liability but retains it as a consideration in assessing remedies.

As I am sure the Minister will be aware, precedent has been established with the Polkey reductions, which are used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence. Amendment 23F is a compromise which will at least mitigate the problems with the status quo by ensuring that motive will not play a central role in securing protection for whistleblowers. Although the Minister may not be able to give a definite statement on this now, I hope that he can reassure us that he expects that he will be able to reach a form of wording which will be satisfactory to all sides in a compromise amendment.

[Lord Young of Norwood Green]

My Lords, I shall speak briefly to Amendments 23 and 23F, because people who are far more expert in these areas have already forensically examined them. My noble friends Lord Touhig and Lord Wills, have already explained the reasoning behind them. They raise the important issue of how a broad public interest test would interact with the existing good faith test.

When Parliament passed the Public Interest Disclosure Act, it did not place a public interest test in the legislation, choosing instead to define the categories of wrongdoing under which disclosures in the public interest disclosure action fit. Good faith was seen as the appropriate safeguard.

If the public interest test is to be considered at all, it is crucial that it is considered in conjunction with the test of good faith. With the Government’s new test proposed in Clause 15, whistleblowers would need to show that they had reasonable belief that their disclosure was made in the public interest. Later there is the good faith test that their predominant motive for making a disclosure was in the public interest, creating, in effect, a double whammy of double public interest. Amendment 23F, proposed by my noble friend Lord Wills, would that good faith would become a consideration only at remedy stage. There is already a precedent for this, similar to the Polkey reductions used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence.

[The Deputy Chairman of Committees (Lord Skelmersdale)]

My Lords, I hate to interrupt the noble Lord, Lord Young, but there is a Division in the Chamber and therefore, unless he can draw his remarks to a very speedy conclusion, we will adjourn now for 10 minutes.

[Lord Young of Norwood Green]

I can. As I was saying, I am grateful to my noble friends Lord Touhig and Lord Wills for tabling both the amendments, which provide the Committee with an opportunity to debate the proper application of the good faith test in the context of a new public interest test, which we are extremely concerned should not present a double barrier to workers who blow the whistle. We look forward to hearing from the Government on this and welcome the Minister’s assurances on further consultation.

17:11

Sitting suspended for a Division in the House.

17:21

[Lord Marland]

My Lords, a lot of what has been said was said in relation to the previous amendments. I am struck by the remark of the noble Lord, Lord Touhig, about the Public Interest Disclosure Act being looked at again. I had probably better be careful what I say but if I blink it is in sympathy. That is not for this Bill or for this moment, but it is a valid point. I am grateful for everything that the noble Lord, Lord Low of Dalston, said as well.

As I said earlier, we are in a number of discussions with the noble Lord, Lord Touhig, and Public Concern at Work, within which we would be happy to embrace the noble Lord, Lord Wills. We are coming up with a form of words that is going through the ministerial process for approval at the moment. The form of words that we desire has been agreed, in principle, between the two groups but it needs ministerial sign-off. We will be going through that process before I can be clearer on that issue. On the subject of Dame Janet Smith’s report, we do not reject her findings at all. We believe that motive is a relevant issue and we are also working with Public Concern at Work on that.

Both these amendments are worthy of consideration and we are considering them, as we are the previous amendments. If I can slightly keep my powder dry for the moment, I am not able to give the Committee a concrete answer except that it is going through the appropriate channels to try and resolve the issue. In the next few weeks—before Christmas, I hope—I may be able to discuss with noble Lords the outcome and agree a way forward, which will help us by the time we get to Report. On that basis, I hope that the noble Lord will withdraw his amendment.

[Lord Touhig]

My Lords, again, I am grateful to colleagues who took part in the debate and in particular to the Minister for his response. It is the season of good will; I am sure that we may have some further good will before we reach Christmas itself but I have no doubts that there is a willingness on all sides to work together here to try to make better legislation. When I had a Private Member’s Bill, I certainly found that the more pre-legislative scrutiny we had the better Bills we made. The way that we are debating this, at the end of the day, better legislation will be coming out of it where whistleblowers are concerned. With those few remarks, I beg leave to withdraw my amendment.

Amendment 23 withdrawn.

Amendment 23A

Moved by

[Lord Young of Norwood Green]

23A: After Clause 15, insert the following new Clause—
“Protected disclosure: blacklisting
(1) Section 2 of the Public Interest Disclosure Act 1998 (right not to suffer detriment) is amended as follows.
(2) After inserted subsection (1), insert—
“(1A) A person has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by an employer on the ground that they have made a protected disclosure.
(1B) Actions under subsection (1A) by a employer relate to—
(a) arrangements made for deciding to whom to offer employment; (b) the terms on which an employment offer is made;(c) failure to offer employment.””

[Lord Young of Norwood Green]

My Lords, thousands of construction workers have been secretly blacklisted and denied jobs on building projects such as the London Olympics. Individuals branded as troublemakers for being members of a trade union or for raising concerns in the workplace over important issues such as health and safety had their names passed to more than 40 construction firms. In his evidence to the Scottish Affairs Select Committee last month Mr Ian Kerr, who ran the consulting association responsible for gathering the names of thousands of workers, told the committee that he went to radical bookshops and political meetings to gather information, saying:

“I would have had a file on the Socialist Workers Party. I had a file on the National Front. Any organisation that seemed to be jumping up and down about construction, it was my role to keep tabs”.

The committee heard that trade union activity, health and safety concerns or standing up for colleagues was enough to blacklist a worker, leading to work drying up. My colleague, the shadow Business Secretary, Chuka Umunna, has also raised concerns over whether blacklisting is going on for Crossrail, the new £16 billion rail network.

The construction blacklisting scandal exposed in 2009 highlighted a gap in protection for job applicants. At present, if a prospective employer accesses a blacklist or becomes aware of a job applicant’s whistleblowing history and decides not to give them a job on that basis, the applicant would have no course of action. The 2010 blacklisting regulations deal only with lists of individuals who have been involved in trade union activities. The Equality Act provides protection at the point of recruitment and we think it is vital that the right message is sent to employers that discriminating against whistleblowers at this point is unacceptable.

The amendment calls for the Public Interest Disclosure Act to be brought into line with the Equality Act 2010 and to make clear that individuals who blow the whistle will continue to have protection under the law against blacklisting by future employers on grounds that they have raised legitimate concerns over wrongdoing at previous employers. I beg to move.

[Baroness Donaghy]

My Lords, I was the author of a report on construction fatalities a couple of years ago and I spent a lot of time with both employers and employees on that issue. During the course of my report it became known that a company was keeping records of its former employees—it was in all the papers—and the trade unions concerned asked me to include something about that in my report. Although I was very sympathetic and met a number of the people involved who had been blacklisted and had not worked for years in the construction industry, I did not feel that I could put that in the report because I had to be clear what caused fatalities in the construction industry—that was my brief. You could extrapolate and say that if you prevent people reporting genuine health and safety dangers it will cause risk in the industry and is likely to cause fatalities. However, as I prepared the report in a pragmatic way and had to have absolute proof—we commissioned research on this—I did not feel that I could make any recommendations in that respect.

I met a number of what I regard as good construction employers, some of whom were embarrassed to be on the list of people who paid this company. I asked them about it and they said it was an administrative error and they did not realise that they were still paying. You have to sometimes accept in good faith what people are saying. In the past 15 years they have achieved a much better record on health and safety and it is no coincidence that health and safety was often talked about in the run-up to the Olympics. I pay tribute to the Labour Government and the continuing work of the coalition Government in making sure that there was not a single fatality on the Olympic site. It was a fantastic achievement. The good employers say that it is not only an issue of reputation: if you are hard-nosed about it and you have a fatality on site, the site will be closed for the whole day. So it is not in their interests to have an unsafe building.

I have met employers who do not have quite that view. They claim that they have a right to pay someone to find out about troublemakers and poor workers. When I put it to them that this list had been proved to be completely inaccurate—it had even got the names wrong in some cases—they would shrug their shoulders and say that it was just bad luck.

I spent a whole Saturday with a group of workers who had been blacklisted from the construction industry. To say that the effect on them was traumatic is putting it very mildly. Most of them were now working on a self-employed basis with small companies, some of them for 20 to 25 years. They had never worked for a large company. The ones who were trade union activists were probably realistic about why it had happened; they were fighting for their fellow workers and were regarded as trouble-makers, which was why they had been blacklisted. Others had no idea. They did not know why their names had been put on the list and could not understand it.

This is a very murky world and I accept that it is incredibly difficult to prove whether these lists exist. They are like will-o’-the-wisps; they move around. One company will close but they will make jolly sure that another company opens up somewhere else. It is incredibly difficult to prove. The worker himself finds it very difficult to prove. All I can say is that the impact on individuals and their families is profound. I wish that I could have done something in making recommendations in that report but it would have been dishonest of me. If there is any way that we can make life better for some of these workers who do not know why they are not being employed, I hope very much that we can do so. I support the amendment in that spirit.

17:30

[Lord Marland]

The noble Baroness speaks with great authority on the subject. Of course, it is a difficult grey area. As we know the Employment Relations Act 1999 (Blacklist) Regulations 2010 already protects individuals but I am struck by what the noble Lord, Lord Young, and the noble Baroness, Lady Donaghy, said. If I may I shall take this away and give it some further consideration outside this Committee and perhaps come back on Report. The noble Lord, Lord Young, is looking surprised now—in fact, stunned—but it is Christmas time. I hope on that basis that he will withdraw his amendment.

[Lord Young of Norwood Green]

That is why I do not play poker. I am taking into account that it is a Christmas gift from the Minister. I accept his intention in good faith, which is a phrase we have been using, and I beg leave to withdraw the amendment.

Amendment 23A withdrawn.

Amendment 23B

Moved by

[Lord Young of Norwood Green]

23B: After Clause 15, insert the following new Clause—
“Disclosures exempt from confidentiality duties: supplementary provisions
After section 203(3)(f) of the Employment Rights Act 1996 (restrictions on contracting out), insert—“(g) the employee or worker must be advised of their rights under section 43J of the Employment Rights Act 1996”.”

[Lord Young of Norwood Green]

This amendment would place a positive requirement on lawyers advising in the settlement of claims that they advise claimants about their rights to be freed from any contractual agreement with their employer not to disclose certain information where they legitimately seek to make a protected disclosure. Little attention has been paid to the provision in Section 43J of the Public Interest Disclosure Act which outlaws any contractual clause that prevents workers from raising a public interest concern. The cases of Dr Kim Holt and Great Ormond Street Hospital relating to the baby P case—where the trust offered her £80,000 as compensation if she left quietly—and of the former inspectors at the Care Quality Commission giving evidence to the Mid Staffordshire inquiry highlight the need for greater attention to be drawn to Section 43J of the Public Interest Disclosure Act and for there to be tougher enforcement.

The amendment simply seeks to improve awareness among workers over their rights as whistleblowers by placing a simple requirement on any legal officer advising them over their case to make them aware of those existing rights under the Public Interest Disclosure Act. I therefore hope that the Government will look favourably on this amendment as a simple change that would help improve the application of the existing Act. I beg to move.

[Lord Marland]

My Lords, I am grateful for this probing amendment. However, I am not convinced that we need to go this way because we already have legislation in place. Section 43J of the Employment Rights Act 1996 provides that any term in an agreement which precludes a worker from making a protected disclosure is void. Furthermore, all lawyers have a duty of care to advise their clients properly on all aspects of the law, whatever the situation. That is their duty of care and, if they do not apply it, they may be struck off.

I understand the motive behind the amendment but I trust that the noble Lord will acknowledge that there is legislation in place and that it would just be putting icing on the Christmas cake, which in this case is a double layer and not entirely necessary. Therefore, I hope that the noble Lord will withdraw his amendment.

[Lord Young of Norwood Green]

I will take note of what the noble Lord said and give consideration to that view to see whether we need to return to this issue on Report, or whether we can clarify the matter further in our consultations. On those grounds, I beg leave to withdraw the amendment.

Amendment 23B withdrawn.

Amendment 23C not moved.

Amendment 23D

Moved by

[Lord Young of Norwood Green]

23D: After Clause 15, insert the following new Clause—
“Proceedings in public interest disclosure cases
(1) After section 8 of the Employment Tribunals Act 1996 (procedure in contract cases), insert—
“8A Publication of information
(1) Where proceedings include a claim under the Public Interest Disclosure Act 1998, the president shall, within 28 days of receipt of the claim, publish electronically and without charge the names of the parties and the relevant regional office.
(2) A person who is not a party to those proceedings may obtain from the tribunal a copy of such documents from the proceedings as he may obtain under the Civil Procedure Rules where proceedings are brought in a court.
(3) In this section, “President” has the same meaning as in section 7A(3).”.”

[Lord Young of Norwood Green]

My Lords, Amendment 23D aims to improve transparency around whistleblowing cases that have been settled privately where it is in the public interest that this information should be in the public domain. I should like to put on the record from the outset that I would not wish to see this introduced without further protections against blacklisting of whistleblowers.

Since the cross-party initiative that brought the Public Interest Disclosure Act into force there has been considerable ongoing debate and discussion around its operation and effect. This has not always been informed by reference to analysis of cases, in part because they have not been readily accessible.

Claims made to the employment tribunal, including those made under the Public Interest Disclosure Act, are not made public, unlike in civil courts. At present, three-quarters of PIDA claims settle in private, with no information in the public domain about the underlying wrongdoing. The lack of openness is exacerbated by the widespread concern that many employers seek to gag employees from making protected disclosures. It is frequently reported in the public sector that independent reports into concerns raised by a whistleblower are kept from the public eye.

In 2008, my noble friend Lord Borrie tabled an amendment on this but the Government’s reasons for rejecting it were twofold: first, a fear of ambulance-chasing lawyers contacting the parties; and, secondly, untested allegations being in the public domain. As a compromise, the Government brought in a system of regulator referral, where claimants can elect to send their claim forms to a person prescribed under PIDA—for example, systems regulators such as the FSA or the CQC. This is inconsistent with the principle of open justice and is not ideal as it puts pressure on whistleblowers to withhold consent, or some individuals will use their consent as a bargaining chip in settlement negotiations. Where consent is withheld, the underlying concern will be hidden from public view.

There is no uniform way for regulators to deal with such concerns and some regulators do not even know of this provision. It is strange that a law which is all about promoting transparency and accountability in the workplace should have its use shrouded in secrecy. Given the proportion of PIDA claims which are settled, it is entirely probable that a public concern may lie unaddressed, buried in a claim and shielded from view.

The amendment should be coupled with the blacklisting provisions, thereby limiting negative consequences for individual workers. It is important that there should be open justice in whistleblowing claims and that it should be brought into line with the Civil Procedure Rules. I beg to move.

[Lord Borrie]

I hope the Government are positive about this amendment. Secret justice is inherently evil unless there is some very strong argument the other way such as public security. When this is not the case, the Government will have a very difficult job convincing us that things are all right as they are.

[Lord Marland]

I have a nasty feeling that I am going to disappoint the noble Lord, Lord Borrie, who of course speaks with a wealth of experience. I have observed tribunals over time, and what I have seen is that when names are published and the press get hold of it, they often put an imbalance into the equation. I believe that giving advance warning of the case means prejudice may build up against either side. This can often be seen in press reports on tribunal cases and I think that is unfair. Of the tribunals I have observed—although not been involved in—that have been reported in the press, there have been many times where I would say at the end of the day the press have taken one side or the other and not given a balanced view—and that is what becomes of a public airing.

No one is saying for a moment that this process should not be transparent but people are saying that there should be fairness. This applies to both parties. We accept the transparency issue but I am afraid that, on this basis and from the experience that we have had, and my experience in particular, I do not think it is fair on either party. As such, it is not an amendment that particularly finds favour despite the fact that we seem to have agreed on most things today and will doubtless continue to do so. In the spirit of Yuletide, I hope the noble Lord will agree—I am looking at his face now because he is playing poker—to withdraw his amendment.

[Lord Young of Norwood Green]

I cannot say we are particularly happy that Christmas has ended early with the Minister’s response. The best I can say is that we will take this one away and reserve the right to return to it on Report. I beg leave to withdraw.

Amendment 23D withdrawn.

Amendments 23E and 23F not moved.

Clause 16 : Tribunal procedure: miscellaneous

Amendment 24

Moved by

[Baroness Turner of Camden]

24: Clause 16, page 12, line 15, at end insert—
“(aa) where the claimant, on the advice of the Judge, withdraws a part or the whole of the claim, any deposit shall be repaid”

[Baroness Turner of Camden]

My Lords, this is a fairly simple and straightforward issue. Currently, when a judge decides that a claim has little reasonable prospect of success he can order a claimant to pay a deposit of up to £1,000 as a condition of their claim proceeding. However, judges can issue dispute orders only when they consider that an entire claim is weak. Clause 16 would enable judges to impose a deposit where they consider that just part of a claim is weak. However, the TUC, to which I am indebted for this briefing, believes that employment tribunals already have sufficient powers to deter weak and vexatious claims, and therefore that this measure is not necessary. The introduction of fees would mean that claimants would be required to pay significant sums in order to access an employment tribunal.

Rather than increasing the use of deposit orders, the Government should provide that where a claimant decides to withdraw a claim, or part of a claim, on the advice of judges, then the relevant fee that the man or woman has already paid should be returned. That seems quite fair to me and I hope, therefore, that the Government will be prepared to agree to this simple measure. If the claimant has already paid a deposit, takes the advice of a judge and withdraws, he should get his money back. That is quite a straightforward proposal and I hope the Minister will be prepared to accept it.

17:45

[The Earl of Glasgow]

I apologise for interjecting at this stage. My issue is a little bit different but, after a lot of consideration, I did not know where I was going to put it. I consider it a very serious omission regarding the tribunal situation.

Two years ago I knew relatively little about employment law. As a small employer, however, I have recently—and for the first time in 35 years—been taken to a tribunal by one of my employees. This particular issue has been going on now for more than two years. I believe passionately—and this is one of the reasons for this Bill—that we should try to make these tribunals as unnecessary as we possibly can. In my case it is completely or very nearly unnecessary and I think that it is also a very great waste of money.

The Government’s intention is to try to make tribunals as unnecessary as possible. I am very much in favour of having ACAS involved and giving it the extra strength—which is part of the Bill already—to try to make them unnecessary. However, there is an elephant in the room which no one has addressed and which has purposely not been put into the Bill, and that is the question of discrimination.

One of the main reasons why claimants go to a tribunal when they could easily have settled at an earlier stage is that if they can prove discrimination, they can get something like 10 times as much compensation as they would have got if they had settled in the first place. To give an example again from my own case, the lady who I employed was laid off at four months. She thought that it was unfair that she was laid off and thought that someone else should have been laid off instead of her. She came with her union representative and talked to me about it. I made a deal with the union representative that I was going to pay her £1,500 and that was going to be the end of it.

About two or three days later she came back again and said that she was not satisfied with what her union representative had recommended and that she was going to go to a tribunal. It became clear to me that the reason why she was going to a tribunal was that she thought that she could prove discrimination. Discrimination in this case was that she thought that someone other than her should have been laid off and also that, as she had a disabled son, we were not taking enough consideration of her disabled son. This case is still carrying on. It has been over two years and we still have not resolved it. It strikes me as unbelievably wasteful that this thing should not have been settled a long time ago. It is because of this discrimination issue.

I think that the Government and the Minister have decided that they do not want to involve discrimination in this because discrimination is governed by European law. I do not think that we are ever going to be able to cut down drastically the number of people going to a tribunal unless we address this issue of discrimination. A lot of lawyers, or the representatives of some of these claimants, are deciding to go to a tribunal because they think that they are going to get a lot more money because of discrimination. I ask the Minister to consider including at a later stage at least some reference to address this problem of discrimination.

[Lord Marland]

I am grateful to the noble Earl for giving me advance warning that he was going to raise that issue, and I am happy to deal with it in a moment. First, however, I must deal with the point raised by the noble Baroness, Lady Turner.

I think that there is some misunderstanding here. It is already the case that where a deposit is paid it is always refunded to the paying party unless a cost order is made by a judge. That is the case. Refunds happen whether a case continues to judgment or is withdrawn part way through the proceedings, so there is always the case for recourse. In fact, the Government have accepted Mr Justice Underhill’s recommendations that there should be much more flexibility in the deposit-paying order regime. I hope that the noble Baroness is content that that deals with that issue. I do not know how this misunderstanding happened, but we can certainly talk further about it afterwards.

We recognise that there has been a trend for discrimination claims to obtain large awards. They are trailed as discrimination claims because people think they can get the sympathy of the judge in advance or during the case, because discrimination is not an attractive thing to be accused of—or to suffer from, much more to the point. Therefore, we as a Government are committed, working with the employment tribunals, case-by-case, to see how we can improve that. Obviously, as the noble Earl says, if we follow the procedure of going to ACAS first—and of course ACAS has many more resources and greater teeth, as applies to various earlier amendments—we can deal with this much more vigorously and much more fairly, as the noble Earl rightly seeks. I am happy to discuss the matter with the noble Earl later, as are my officials, but, on the basis of what I have said to the noble Baroness, I hope that she will withdraw her amendment.

[Lord Young of Norwood Green]

Thinking that I was back in my TUC days, I was almost tempted to make a point of order. The noble Earl was stretching what you can do with an amendment by introducing something that had nothing whatever to do with it. If I look back, I suppose that I have been guilty of that transgression occasionally, but I think that that was taking it a bit too far, as it was for the Minister to respond to it. I say that seriously because, if we are to have a debate about discrimination, let us have a proper debate about it, for which we are prepared. We, too, could evidence all sorts of things.

[Lord Marland]

The noble Earl gave me notice that at some point he would be raising this issue. We have debated a whole range of issues and I do not think that we need to be unfair and limit any particular issue. I was happy to take the question. I have dealt with it and we will continue to deal with it. I totally agree that it is not in the context of the amendment, but we have had a few things that have not been in the context of amendments. We are a charitable group here. The noble Lord is playing poker again now but he will be in a charitable mood as it is Christmas, and that is why I was happy to deal with the amendment.

[Lord Young of Norwood Green]

I will not pursue this further but I maintain my point. We roam far and wide in dealing with amendments but, if we want to do something as serious as that, it ought to be on the basis of either an amendment or a debate. I say no more than that. I leave it to my noble friend Lady Turner to deal with her amendment.

[Baroness Turner of Camden]

I thank everyone who contributed to this small debate. Of course, it is not about discrimination at all. It is quite irrelevant to introduce discrimination in a debate on an amendment which simply says that, if someone pays the deposit and does not proceed with the case because they accept the advice of a judge, they ought to get their money back. It is as simple as that. It has nothing to do with discrimination at all. I see that the noble Earl accepts that.

[The Earl of Glasgow]

I apologise for bringing it up. I tried two or three times to think of a place where I could bring it in as I thought it was important to do so. As we are getting to the end of the tribunal issues, I thought it was the only place where I could do it. I apologise.

[Baroness Turner of Camden]

Certainly. As my noble friend said, if we want to have a discussion about discrimination, there will be the opportunity to do so during the passage of the Bill, in which case we would want to prepare for it and ensure that the views of this side of the House were properly considered. The amendment is not about discrimination, as I think the Minister accepts. I am interested to hear what he has to say and I shall of course read it with great interest. In the mean time, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.

Clause 16 agreed.

Clauses 17 to 19 agreed.

[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 5.56 pm.

House of Lords

Monday 10th December 2012 Lords Chamber

Monday, 10 December 2012.

14:30

Prayers—read by the Lord Bishop of Bristol.

Cycling: Infrastructure

Monday 10th December 2012 Lords Chamber

Question

14:37

Asked By

[Lord Berkeley]

To ask Her Majesty’s Government what proportion of the Highways Agency’s budget is allocated to infrastructure for cycling.

[Earl Attlee]

My Lords, the Highways Agency works with cycling organisations to provide parallel routes, safe access and crossing points to the strategic route network. These schemes are funded within the agency’s portfolio of small improvement schemes, on which the expenditure is approximately £50 million each year across the portfolio. Provision for cyclists is also a consideration of the agency’s major schemes. The specific investment relating to cyclists is therefore difficult to disaggregate.

[Lord Berkeley]

I am grateful to the Minister for that Answer and I congratulate the Government and TfL on the investment they have recently announced for cycling infrastructure. However, does he agree that possibly there is a need to go further? There is a poll in the Times today, coincidentally, which shows that 25% of the respondents think that segregated cycle lanes would make people cycle more. It also shows that only 2% of journeys in this country are by cycle compared with a figure of about 25% to 35% in Belgium, Holland and Denmark. Does he agree that it is time to look at reallocating space on the roads for cycles and providing much greater investment alongside that?

[Earl Attlee]

My Lords, the views of respondents to any survey are obviously important. We should not disregard them. We should take account of them. Segregation has its benefits because you will be able to reduce the number of accidents far more effectively. However, there is the issue of economic use of the road space and the business case if you want such a scheme. In London, these are matters for Transport for London.

[Lord Taverne]

My Lords, does the Minister accept that the bicycle is the most efficient machine ever invented for converting energy into motion and that the bicycle could be accurately described as a green car that can run on tap water and tea cakes and has a built-in gym? Does he therefore agree that it makes sense to base policy for private urban transport on the motto, “Two wheels good; four wheels bad”?

[Earl Attlee]

My Lords, I agree with my noble friend. One of the most important aspects of the use of the bicycle is the health benefits. That is why the Government support cycling and why the previous Government did exactly the same thing.

[Baroness King of Bow]

My Lords, we are all aware of the dangers of cycling, especially if you live in Tower Hamlets where, on Friday, the 14th cyclist to die in London this year was pronounced dead on Commercial Road. I want to ask the Minister about another danger facing cyclists. I refer to the high levels of exhaust fumes and particulates that they inhale. Can the Minister hazard a guess as to whether, say, a half-hour commute on a bicycle in rush-hour traffic is the equivalent of one cigarette a day or 20 cigarettes a day? If he is not sure—because I am not—would he be willing to write to me with the latest research evidence and government guidance so that cyclists can be assured that their healthy lifestyle is not, in fact, a fast track to lung cancer?

[Earl Attlee]

My Lords, the noble Baroness will be aware that the previous Mayor of London introduced a lower emissions zone for London to tackle the level of emissions. I accept that they are too high, but everyone is working to reduce the levels.

[Lord Quirk]

“Two legs good” is by all means better than “Two wheels good”. Can we not have some guarantee of the safety of pedestrians on the pavement as well as of course support for the need to protect cyclists?

[Earl Attlee]

My Lords, although the Government support cycling, we do so only where it is legal. It is important that cyclists do not ride their cycles on the footpath. Enforcement is an operational matter for the police.

[Lord Hughes of Woodside]

My Lords, although we must do everything possible to encourage the safety of cyclists, does the Minister agree that cyclists themselves can do much to help their own safety? For example, in the evening, when it is dark, one hardly sees the bicycle light flashing. Furthermore, cyclists seem to wear the darkest of clothes, which makes them almost invisible. Should not something be done to educate them, first, to have decent lights and, secondly, to wear fluorescent jackets so that they can be easily seen?

[Earl Attlee]

My Lords, the Highway Code advises cyclists to wear appropriate high-visibility clothing all the time and make sure that their lights work. The noble Lord is right. Cyclists can do a lot to make themselves less vulnerable.

[Baroness Gardner of Parkes]

My Lords, is the Minister aware that, in London, a great many of the fatal accidents occur when people are dragged under as large vehicles turn left, particularly cement vehicles and waste disposal vehicles carrying skips? The front wheel hits a person, but it is the back wheel that kills them. If a bar was put along the side to prevent the bicycle being dragged under the vehicle it would save many lives. Is there any thought of the Government encouraging that?

[Earl Attlee]

My Lords, there are already regulations in place that require side guards to be fitted to the majority of heavy goods vehicles. However, construction vehicles are exempt. The European Union is looking at the regulation of side guards and will probably reduce the number of exemptions.

[Lord Davies of Oldham]

My Lords, following on from the previous question, is the Minister not concerned that the accident rate for cyclists is increasing alarmingly, especially in London? Cyclists have a particular problem in coping with large roundabouts where there are no regulated lanes. Several of the deaths have occurred at such roundabouts. Why do the Government not take up the programme that the Times has launched, “Cities fit for cycling”, in which it says that in order to get dedicated cycle lanes and improve our safety record we need £100 million a year spent on cycling?

[Earl Attlee]

My Lords, I assure the noble Lord that we are paying close attention to the Times campaign for the very reasons that the noble Lord points out. This is of course a Question about the Highways Agency, which has a range of local network management schemes to make improvements where cycle routes cross the strategic route network or there are segregation problems.

[Baroness McIntosh of Hudnall]

My Lords, given that most people driving on the roads probably took their tests quite a long time ago—I have to say that I certainly did—is the noble Earl confident that the current methods of testing young drivers take sufficient account of the dangers to cyclists that drivers represent, particularly in view of the fact that no matter how much investment is made in cycling routes, cyclists will have to share the road with drivers for at least some of the time?

[Earl Attlee]

The noble Baroness makes an extremely important point. I can assure her that the Driving Standards Agency adjusts the test to make sure that it properly reflects the needs of cyclists. In addition, I should point out to your Lordships the need regularly to read the Highway Code because its contents change, particularly in respect of road markings relating to cyclists.

United States Budget: Economic Impact

Monday 10th December 2012 Lords Chamber

Question

14:45

Asked By

[Lord Roberts of Conwy]

To ask Her Majesty’s Government what assessment they have made of the effect on the United Kingdom economy of the outcomes of the “fiscal cliff” discussions in the United States of America.

[Lord Newby]

My Lords, the Office for Budget Responsibility, which is responsible for producing independent economic and fiscal forecasts for the UK economy, based its forecasts last week on the assumption that fiscal policy will be tightened in the US by between 1% and 2% of US GDP. This, in turn, assumes that the US Congress will reach a budget settlement by the end of the year and that the fiscal cliff will be avoided.

[Lord Roberts of Conwy]

Is my noble friend aware, as I am sure he is, that many believe that unless the end-year fiscal crisis in the US is averted, involving as it does some hundreds of billions of dollars’ worth of tax rises and spending, there is a risk that the US could return to recession, and the prospects for our exporters to the United States could be very gloomy indeed? Such prospects are already gloomy in the eurozone and other countries where lower growth is anticipated. Is there a specific remedy for that situation, should it develop?

[Lord Newby]

My Lords, I agree with the noble Lord that the US economy is extremely important to our exporters. Last year, we exported £80 billion of goods and services to the US, which amounted to 16% of our total exports. However, perhaps I have watched too many episodes of “The West Wing” but I suspect that a deal on the US budget will be done in time, albeit at the last minute.

[Lord Bilimoria]

My Lords, it is estimated that if the US falls off its fiscal cliff, its GDP will fall significantly. Will the Minister admit that, following the Chancellor saying in the Autumn Statement that deficit reduction will now take three years longer, we in this country have already fallen off our own fiscal cliff?

[Lord Newby]

No, my Lords, the situation is quite the opposite. The fact that the Government took decisive action in 2010 to effect a fiscal consolidation over a number of years—and then flexed that, given the severe headwinds that we faced from the eurozone—means that we are not faced with a fiscal cliff and we are now looking to a period of growth next year that will be higher than that anticipated in, for example, the eurozone.

[Lord Davies of Oldham]

My Lords, it is all right for the Minister to wish the Americans well, but why do the Government not emulate them? Is he unaware of the fact that the American economy has been growing at 2%, while we are teetering on the edge of our own cliff towards a third recession?

[Lord Newby]

My Lords, I agree with President Obama on this.

[Noble Lords]

Oh!

[Lord Newby]

Earlier this year, in relation to the US and UK economies, he said that,

“our objectives are common, which is we want to make sure that we have … governments that are lean, that are effective, that are efficient, that are providing opportunity to our people, that are properly paid for so that we’re not leaving it to the next generation”.

[Baroness Kramer]

I ask the Minister not to emulate the US fiscal cliff and to go for certainty in British fiscal and economic policy. However, does he not agree that British exporters should be careful not to overreact to either the fiscal cliff or the eurozone crisis? In the Autumn Statement, there was more than £1.5 billion in additional government support for exports; should not businesses both small and large be seizing those opportunities—and seizing them now?

[Lord Newby]

I absolutely agree. The challenge now is for exporters to continue exporting in markets where they already do that. For example, our exports to the US this year have increased by 4% and are therefore still exploiting existing markets. However, in addition, the key is getting more companies exporting to the newer markets. That is why the increases in exports to China, Brazil and India over the past two years have been so significant.

[Lord Soley]

The Minister referred to the decisive action in 2010. Surely what the Government were doing at that time was talking us into a deeper recession than the one we were already going into. Secondly, does he not recognise that without growth we will not get out of the problems we are in? Historically, cutting deficits does not really work unless you have high growth as well. We do not have that and it does not look as though we will get it under the current policies.

[Lord Newby]

My Lords, if the Government had not adopted a credible fiscal policy in 2010, it is almost certain that interest rates in the UK would now be significantly higher than they are, as they are in much of the eurozone. Bear in mind that every 1% increase in interest rates means £12 billion extra in mortgage payments. This would have been have been a huge gamble that would almost certainly have failed had we not taken decisive action in 2010.

[Lord Forsyth of Drumlean]

My Lords, is the lesson that we need to learn from both sides of the Atlantic not that if Governments live beyond their means and raise the tax burden too high, growth disappears—a lesson that my noble friend Lord Lawson taught us in the 1980s and which we need to relearn?

[Lord Newby]

My Lords, the key challenge for Governments, either in this country or on the other side of the pond, is to ensure that there is a credible fiscal framework and a competitive economy so that businesses can invest. That is what the Government have been seeking to achieve.

[Lord Tomlinson]

My Lords, if the economy is doing as well as the noble Lord suggests, does he regard the threats from the rating agencies as being a vote of confidence?

[Lord Newby]

My Lords, the rating agencies, as we all know, have an unblemished record in dealing with businesses and countries. For those countries that have seen their credit rating reduced, including the US, there has been virtually no impact on their ability to borrow.

[Baroness O'Cathain]

My Lords, can we not realise that trade is a two-way thing? It is import substitution and exports. We should encourage more import substitution in all our purchasing in this country. It is never mentioned and there is no reason why some of the wonderful British goods that are exported to earn foreign currencies should not be bought by people here, thereby reducing our imports.

[Lord Newby]

My Lords, I absolutely agree with my noble friend, and it is very important that we do all we can to support new initiatives, such as the one being led by my noble friend Lord Alliance to reinvigorate the textile industry in the north-west, where there now appears to be the prospect—if we get it right—of creating almost 250,000 jobs in textile manufacturing for the first time in a generation.

Armed Forces: Medical Services

Monday 10th December 2012 Lords Chamber

Question

14:52

Asked by

[Lord Trefgarne]

To ask Her Majesty’s Government what are the respective numerical strengths of the medical services of the Royal Navy, Army and the Royal Air Force, and what proportion of those personnel are reservists.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, I am sure the whole House will wish to join me in offering sincere condolences to the family and friends of Captain Walter Barrie, 1st Battalion The Royal Regiment of Scotland, who was killed on operations in Afghanistan recently. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude in which they face their rehabilitation.

On the Question, in April this year the numerical strength of the naval medical service was 1,650, of whom 60—just under 4%—were reservists. The strength of the army medical service was 8,040, of which 2,840—35%—were reservists, and the strength of the Royal Air Force medical service was 2,120, of which 190—9%—were reservists. Members of all three medical services, regular and reserve, are making extraordinary contributions to our medical capability in Afghanistan, and I pay tribute to them.

[Lord Trefgarne]

My Lords, I am grateful to my noble friend for that helpful reply. If it is the policy—which I believe it is, and I support it—to increase the use of reservists in the medical services of our three Armed Forces, it is important that we have a good supply of experienced and trained medical personnel, particularly from the National Health Service. Is the Minister satisfied that the National Health Service, which itself is pressed in many areas, will be able to supply the number of personnel that will be required in future years, and that no unnecessary restrictions will be placed in their way?

[Lord Astor of Hever]

My Lords, I agree with my noble friend that we will need a good supply of reservists in future. NHS employees are free to join the reserves without any interference from their employer. If they come from a trust that does not have reserve-friendly HR policies—and these trusts are very rare—they can still join the reserves, but in the worst case they may have to take leave to train. We recognise, as did the previous Government, that my noble friend highlights a serious problem. The issue is being addressed by the reserves consultation document. We are consulting as widely as possible to ensure that we have the right relationship with employers and reservists to sustain these changes in future. We need to understand what difficulties employers face in releasing their staff and to do our best to mitigate them.

[Lord Rosser]

My Lords, we, too, offer our sincere condolences to the family and friends of Captain Walter Barrie. His death is another all-too-frequent reminder of the enormous sacrifices still being made by members of our Armed Forces in the service of our country.

The report of the public inquiry into the death of Iraqi civilian Baha Mousa found that military guidance on key ethical questions was not provided to regimental medical officers at the time. Is the Minister now satisfied that if there were to be an increase in the proportion of medical personnel who were reservists, appropriate guidance would always be given to them prior to deployment, and that they would be as able as regular medical officers to resist any pressures to prioritise their obligations or loyalties to the military over their ethical duties to patients? Further, will the medical services available to members of the Reserve Forces post-deployment be the same as the medical services available to members of the Regular Forces post-deployment?

[Lord Astor of Hever]

My Lords, in answer to the noble Lord’s first question, I am pretty certain that I can give him that assurance. Like a number of noble Lords, I have been to Afghanistan and seen the hospital at Camp Bastion. I talked to a number of reservists. They work to an incredibly high standard. The NHS is very grateful for what its personnel pick up there and are able to take back to their respective trusts.

[Lord Ribeiro]

My Lords, will the Minister explain to the House how the expertise of the Defence Medical Services in Afghanistan, many of whom are reservists, can be maintained and used to the benefit of the NHS when the drawdown occurs in 2014?

[Lord Astor of Hever]

My noble friend asks a very important question. I know that he was out in Afghanistan last year and saw the very good work that our regular and reservist medics do there. They have saved a lot of lives. There are two possible answers to my noble friend’s question: first, sharing experience through teaching in training in trauma centres and, secondly, clinical placements with coalition partners in areas of conflict.

[Lord Palmer of Childs Hill]

My Lords, from these Benches I express condolences at the losses referred to by the Minister. What work are the Government doing to examine the common features of the forces’ medical services so that we may stretch resources further by removing unnecessary duplication, perhaps in areas such as procurement or training?

[Lord Astor of Hever]

My Lords, several initiatives are under way to remove duplication by the single services’ medical services. The first, scheduled to be delivered on 1 April next year, is the new defence primary healthcare project. The current Royal Navy, Army and Air Force primary healthcare systems will start to combine to form defence primary healthcare under the command of a two-star medical officer. The aim is to develop and create an organisation made up of Royal Navy, Army, Royal Air Force and civilian medical personnel working jointly to benefit all the patients they serve, to safeguard the quality of healthcare for military personnel, their dependents and entitled civilians, and to maximise the forces’ generation capabilities.

[Lord West of Spithead]

My Lords, I agree with the Minister about the huge pride we have in our medical forces across the board. Not only are they at the cutting edge of skills to look after people who, very sadly, have suffered major injuries, but they have also shown immense bravery. Indeed, two women who are probably about half my height have managed to win Military Crosses in the past three years in looking after people for whom they were responsible. We should feel a huge debt of gratitude and pride in them all for that. We also have an amazing centre of skill at Birmingham and at Headley Court in terms of people recovering. Will the Minister tell us what will happen if Scotland separates? Bearing in mind the complexity of how this works, it will be extremely difficult. How will that work out?

[Lord Astor of Hever]

My Lords, I agree with the noble Lord in the first part of his question. I have seen a number of these reservists and regulars several times in the hospital at Camp Bastion. I am in awe of what they do and the lives they save—it is amazing work. In answer to the noble Lord’s second question, we do not envisage that this is going to happen.

Banking: Regulation

Monday 10th December 2012 Lords Chamber

Question

15:01

Asked By

[Lord Barnett]

To ask Her Majesty’s Government what action they propose with regard to the regulation of the banking industry.

[Lord Newby]

My Lords, Her Majesty’s Government have committed to fundamental reform of financial regulation in the United Kingdom through the Financial Services Bill, which received its Third Reading in the House last week. Further regulation of the banking industry will be contained in the Banking Reform Bill, which is currently the subject of pre-legislative scrutiny by the Parliamentary Commission on Banking Standards.

[Lord Barnett]

Has the noble Lord seen what was said by the present Governor of the Bank of England last week that this can be dealt with without even bothering with regulation? First he criticised the banks for hiding £60 billion of debts and then he went on to suggest that banks should increase their capital reserves immediately. Does the Minister agree with that, or does he agree with the banks that say that if they increase the capital reserves they cannot also lend as the Chancellor has suggested? Which one of those does the Minister agree with?

[Lord Newby]

My Lords, the fact that the governor can make statements at the moment that are aspirations and have no direct impact shows why the new regulatory architecture, particularly the Financial Policy Committee, which is a new body designed specifically to look at these things, is so important. I am sure that they are reflecting on his views and will be opining on them very shortly.

[Lord Sharkey]

My Lords, regulation will surely provide for penalties for those who break the rules. However, when it comes to the massive mis-selling of pensions, endowments or PPI policies, the FSA has confirmed that in the past five years not one single bank employee has had disciplinary action taken against them. Does the Minister believe that that is right, and can he reopen the issue with the FSA?

[Lord Newby]

My Lords, one of the general problems that we are grappling with is that bankers seem to think that they live in a different world to the rest of us and that they should be able to avoid not just censure but charges if they have done something that is criminally wrong. That is why in the recent Financial Services Bill we introduced new provisions to deal with people who have manipulated the LIBOR rates so that, when the whole episode is fully looked into, if criminal action is necessary, it will for the first time be able to be taken against people who have cheated the system.

[Lord Peston]

My Lords, bearing in mind the global nature of the whole financial services sector, and certainly of the banking sector, in the Government’s opinion does any central bank or other financial regulator, acting on its own, have any chance of success? Must not the future basis of regulatory policy be one of international co-operation between the regulators and the central banks?

[Lord Newby]

Yes, my Lords, I completely agree. One of the things that the banking crisis has demonstrated is that the banks understand the international situation better than Governments understand it. One of the things that we have been trying to do, both through the EU and internationally, is to close that gap. No doubt the noble Lord has seen the article in the FT today by Paul Tucker from the Bank of England and Martin Gruenberg, the chair of the Federal Deposit Insurance Corporation in the States, which looks specifically at how you deal with resolving problems concerning the largest systemically important banks in the world.

[Lord Lawson of Blaby]

My Lords, while the noble Lord, Lord Peston, is undoubtedly correct that international co-operation is desirable, will the Minister give an undertaking that we shall not hold back on what needs to be done simply because international co-operation may not be forthcoming or, even if it is, it may not be adequate?

[Lord Newby]

My Lords, I absolutely agree. That is why we have been in the forefront of bringing forward plans under which banking problems can be resolved and why, under the Banking Reform Bill, we are looking at having a ring-fence around retail banks so that we do not have the problems that we have had in the past. This will go ahead, whatever happens internationally. I hope very much that there will be international action, but action that is based very much on the British model and with British leadership.

[Lord McFall of Alcluith]

My Lords, Glass-Steagall, which governed the global prudential system, was more than 30 pages, Basel II increased that tenfold to 350 pages and Basel III is now 600 pages. Does this not tell us that the system is governed by complexity and opacity and that the desire to game it increases? Is there not a case for simplifying the system and having leverage play a greater role in the regulatory framework? The need for structural change, irrespective of what is happening elsewhere in the world, is urgent in the UK and we should get on with it.

[Lord Newby]

Yes, my Lords, I agree. Basel is indeed that number of pages, while I think that the Dodd-Frank Act in the States is more than 2,000 pages and is so complicated that there are real questions about whether the institutions will ever be able to implement it. Getting back to what I was saying about banking reform here, one of the key reasons for having a ring-fence is to have a simpler structure under which the retail bank is segregated from the more complicated and casino elements of the system. We think that that will bring benefits for consumers as well as bringing greater stability to the system as a whole.

[Lord Pearson of Rannoch]

My Lords, are the Government aware of the previous Government’s Written Answer of 21 July 2009 to the effect that the overall supervision of our entire financial industry, including our banking industry, had already been handed over to Brussels, leaving the Government here with only day-to-day control? Does it therefore really matter much what the Government come up with here?

[Lord Newby]

My Lords, I am afraid that I was not aware of that comment by the previous Administration and I do not recognise it as a reflection of the way that we run our banking system.

Business of the House

Monday 10th December 2012 Lords Chamber

Motion on Standing Orders

15:08

Moved By

[Lord Strathclyde]

That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 11 December to enable the Police (Complaints and Conduct) Bill to be taken through its remaining stages on that day; and that Standing Order 46 be dispensed with on Tuesday 18 December to enable the Small Charitable Donations Bill to be taken through its remaining stages on that day.

Motion agreed.

Partnerships (Prosecution) (Scotland) Bill [HL]

Monday 10th December 2012 Lords Chamber

Second Reading

15:08

Moved By

[Lord Wallace of Tankerness]

That the Bill be read a second time.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

A Second Reading Committee considered the Bill in the Moses Room on Tuesday 4 December. I therefore beg to move this Motion formally.

Bill read a second time and committed to a Special Public Bill Committee.

Crime and Courts Bill [HL]

Monday 10th December 2012 Lords Chamber

Report (3rd Day)

15:09

Clause 23 : Enabling the making, and use, of films and other recordings of proceedings

Amendment 113

Moved by

[Baroness Kennedy of The Shaws]

113: Clause 23, page 22, line 3, after “that” insert “in appellate proceedings”

[Baroness Kennedy of The Shaws]

My Lords, this amendment stands in my name and that of the noble Lord, Lord Lester of Herne Hill. It seeks to limit the televising of court proceedings to the Court of Appeal and the Supreme Court. Your Lordships may recall that I expressed my view at Second Reading that cameras in the courts are a total folly except in very limited circumstances. I have no problem with filming proceedings in the Supreme Court or the Court of Appeal, where matters of law, principles of human rights or constitutional issues of long-term significance are debated and judged. However, it is a serious mistake to introduce cameras into criminal courts; this whole issue should be approached with caution. We are being persuaded that this is a very circumscribed use of cameras and the rationale is that it will bring transparency to, and increase confidence in, the justice system. I believe it will ultimately have the very opposite effect.

There has been lobbying for years to get cameras into courts. It should be recognised that television companies are not really interested in filming in the Court of Appeal or the Supreme Court. They want to get into the criminal courts or the libel courts—the places where the dramatic stuff of life is dealt with. They want rape, blood and gore. They want weeping victims, lying witnesses and unrepentant villains in the dock. They want to get into the courts where the salacious and the violent are dealt with in detail. They insist that they are interested only in transparency, when I am afraid that their real interest is voyeurism. In the same way that sex, drugs and rock and roll sell newspapers, they pull in viewing figures for television, too.

Court television in America made the man who introduced it a billionaire in no time, and lawyers and senior judges there would say that it drove down standards in the courts and decreased public confidence. The public in the end see edited snapshots of proceedings and think they have watched a trial; then they are vitriolic about how stupid the jury has been or how utterly stupid the judge has been.

An experiment was conducted in Scotland 20 years ago of filming a whole trial. Because Scotland is the one place in the United Kingdom where there is no law forbidding cameras, that was possible without any change in the law. The plan was abandoned when the senior legal profession in the whole of our nation saw the product and realised that there were very serious problems about fairness and enormous risks to justice. I would like our senior judiciary and politicians to go back to that footage and see why it is not a good idea.

This Bill does not ostensibly open the door of the courts to wholesale filming immediately. It is saying that cameras should be let into the higher courts and other courts, such as the criminal courts, for the giving of judgments and the passing of sentences. The public deserve, it is said, to know why a man got 10 years and not more; the public should see the judge passing sentences on criminals; people can cheer from their living rooms as crooks get their comeuppance; and they can knit like the tricoteuse at the guillotine as the judge says, “Take her down”.

However, the reality is actually damaging for justice. The Minister will no doubt say that there will never be filming of witnesses or jurors in cases, but I assure the House that while the intention now may be to stick to judges’ sentencing remarks, that is not the endgame sought by television programme-makers. We often talk of slippery slopes in this House but this one is a sheer drop. As soon as sentencing is covered on television, there will be complaints that the public did not get to see the defendant’s face when he heard his fate or that the remarks made little sense without hearing what the prosecution and defence lawyers had said in argument beforehand. So it will go on, with further and further encroachments sought.

15:15

The question is asked: would it not be good for the public to hear and see a judge sentencing? I do not think that will satisfy anything. The sentencing remarks will be edited so that a snippet will be used as a headline on the news and the judge showing compassion will still be vilified by sections of the press, however good his reasoning. Some judges may even be tempted to avoid doing their bold but fair thing in looking, for example, at alternatives to prison when they see that camera at the back of the court. I also fear that some judges who miss the drama of the advocates’ arena will play up to the cameras in unhappy ways. Does any noble Lord in this Chamber remember Judge Pickles?

We should be concerned about the powers that we are delegating by virtue of this clause. The Joint Committee on Human Rights said in its report, by way of warning,

“the Delegated Powers Committee points out in its Report on the Bill, there is nothing on the face of the Bill to prevent the order-making power from being exercised in future to authorise the filming and broadcasting of witnesses, parties, crime victims, jurors or defendants. Indeed, granting such a wide authority”,

to the Lord Chancellor and the Lord Chief Justice to act together should be considered with caution. That authority, the report says,

“appears to be the Government’s intention: in its memorandum to the Delegated Powers Committee it suggested that if clause 23 is enacted, Parliament will have approved the principle of filming and broadcasting court proceedings. This led the Delegated Powers Committee to recommend that the affirmative procedure should apply to orders under clause 23(1), so that Parliament has an opportunity to apply a higher degree of scrutiny to an order setting out the extent to which filming and broadcasting should be permitted”.

We should be very mindful of the fact that our judges increasingly come under pressure to be more modern and to do the modern thing. Often, in pursuit of modernisation, we give away things that have worked sensibly and for a good reason.

The Government have asserted that the right to respect for private life in Article 8 of the European Convention on Human Rights would not be engaged because court proceedings are public. However, the Joint Committee on Human Rights report argued that this was,

“too simplistic given the range of very well established restrictions on reporting court proceedings, ranging from hearings in private through to anonymity orders, where the justification rests, in part at least, on the protection of aspects of a person’s private life. Indeed, one of the most important questions for Parliament about these provisions is whether relaxing the current restrictions on filming and broadcasting court proceedings which are anyway public is a justifiable interference with the right to respect for private life of those individuals involved in the proceedings”.

In the United States, they have discovered that no amount of explanation appeases the concerns of witnesses due to come before the courts. Because they know it will be televised, there is greater reluctance to participate in proceedings.

It is quite wrong that the television filming of court should be further expanded without it coming back before this House for proper consideration. I know that judges might argue that they can carefully fashion what they say and explain the reason for giving a particular sentence in a criminal case, but I am afraid that very often they will be made to sound ridiculous by the way their comments will be edited. Judges have also not realised that they will become much more visible. Currently, our judges can go about their business without fear for their safety; it is one of the great things about our system. They can shop in Waitrose, go to the garden centre at weekends or play golf and no one knows them from Adam or Eve. Their lives will become very different and much less secure once their faces can be played and replayed over and over again on new technology. I would like research to be done on the potential impact of these changes before we go down this road. For this reason, we should not today allow further use of cameras in courts beyond our appellate jurisdiction. I beg to move.

[Lord Lester of Herne Hill]

My Lords, I am not a criminal lawyer and have none of the experience that the noble Baroness, Lady Kennedy of The Shaws, has, but I sat as a criminal judge—grotesque though that may seem—in the days when I was a recorder. I cannot claim much greater experience than that, but I support the amendment as a member of the Joint Committee on Human Rights.

As the noble Baroness, Lady Kennedy, has said, this amendment was drafted by the committee so it is a JCHR amendment, and our report deals with our reasons in detail. In paragraph 60, our conclusion says:

“We do not see the justification for the width of the order-making power in clause 23(1) of the Bill, which, as it stands, authorises the filming and broadcasting of witnesses, parties, crime victims, jurors and defendants in court proceedings. We urge a much more cautious approach. Before any extension of this power we recommend that the Government conduct a much more comprehensive public consultation, carry out a more detailed impact assessment in the light of that consultation and conduct a review of the operation of the power after an elapse of years. In the meantime, we recommend that the Bill be amended to confine the scope of the power to the filming and broadcasting of judges and advocates in appellate proceedings, as the Government currently intends”.

I am also cautiously conservative on this issue because I do not believe that criminal trials are best conducted in televised goldfish bowl.

[Lord Pannick]

My Lords, I do not share the concerns expressed by the two previous speakers. The broadcasting of court proceedings will enhance public understanding of our justice system, which in general works efficiently and fairly. There is also the possibility that allowing in the cameras may illuminate those areas of the law that are much in need of reform, a result that I would have thought law reformers as distinguished as the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Lester of Herne Hill, would welcome.

So what if broadcasters focus on sensational cases? That is what print journalists do and we do not exclude them from the courtroom. Amendment 113 would confine broadcasting to appellate proceedings but, if the Lord Chief Justice thinks it appropriate, why not allow the broadcasting of a judicial review application that raises issues of importance? Such applications normally involve no witness evidence and often raise issues of law of considerable constitutional importance. Of course there should be no broadcasting of the evidence of witnesses, and jurors’ faces should not be shown, but I cannot understand why there should be no possibility of the broadcasting of the judge’s sentencing remarks at the end of a criminal trial. There are many cases where, at the end of the criminal trial, the judge is speaking not only to the defendant or other persons in court but is seeking to communicate to the public at large. The judge should be assisted to do so.

The noble Baroness, Lady Kennedy of The Shaws, made what I respectfully submit was a quite extraordinary suggestion that judges need to be protected because their words may be misrepresented. She also suggested that judges need anonymity in the community at large. I doubt very much whether there are many judges—or, indeed, many noble Lords—who think that our judges need or deserve such protection.

In any event, Amendment 113 is entirely unnecessary because your Lordships will see that Clause 23 will not come into effect without the agreement of the Lord Chief Justice, who no doubt will carefully consider the details of any scheme to allow broadcasting of court proceedings. For the same reason, Amendments 113ZA and 113ZB in this group are also unnecessary in seeking to impose conditions on the broadcasting of court proceedings. I am content to proceed on the basis set out in Clause 23, that the broadcasting provision would come into force only,

“with the concurrence of the Lord Chief Justice”.

It would be far better to let him—or possibly, after next October, her—decide on the detail of the broadcasting scheme.

For the same reason, Amendment 120B, requiring a resolution from both Houses, is unnecessary. The noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Lester of Herne Hill—for both of whom I have the highest regard—are the 21st century equivalents of the 18th century Scottish judge Lord Eskgrove. When a court reporter wrote down the terms of one of his judgments being delivered in court, Lord Eskgrove complained:

“The fellow takes down my very words”.

[Lord Lester of Herne Hill]

Would the noble Lord address the points raised by the Joint Committee on Human Rights, rather than referring to me as an 18th century gentleman?

[Lord Pannick]

My Lords, I have made such points as I think may assist the House in answer to the arguments brought forward in this debate and the arguments presented by the Joint Committee.

[Baroness Butler-Sloss]

My Lords, I apologise for arriving late at this part of the debate. I did not propose to speak and hold no strong views about this amendment, but I have to rise just to deal with a point made by the noble Lord, Lord Pannick. He said that judges neither need nor deserve any protection. That is true in general, but I think he has overlooked the fact that certain judges get death threats. There are groups of judges, of which I happen to be one, who during their time as a judge received a number of death threats. In my case they came both from people who could recognise me because they had appeared before me in court and from those, such as Fathers 4 Justice, who not only made death threats against me but, I must tell your Lordships, also threatened to kidnap my dog, which I thought was much more serious than the death threat against me. More serious than the threats that either I or the family court judges receive are those made against judges in terrorist trials. They absolutely need and deserve protection, so I take issue with the noble Lord, Lord Pannick.

[Lord Pannick]

I entirely agree that judges deserve all the protection necessary in those circumstances. However, the press and broadcasters are perfectly entitled to publish photographs of the judge who has heard the terrorist trial or any other sensational case. This amendment would have no impact in that respect.

[Baroness Kennedy of The Shaws]

Does the noble Lord accept that there is something different about the moving camera? There is a famous book by Christopher Isherwood, Goodbye to Berlin, in which the first line is: “I am a camera”. The reason why he starts that way is because he is saying: “I am providing you with a subjective view from my eyes—my edited account of what was happening in the 1930s during the rise of Hitler in Berlin”. He was pointing up the fact that the camera is very subjective. Does the noble Lord agree with that?

[Lord Pannick]

Of course there are differences, but no difference that could possibly justify these amendments. Noble Lords will know that the proceedings of our Supreme Court are broadcast virtually every day that the court sits. None of us has any knowledge of that; it has caused no adverse effects and I cannot understand the noble Baroness’s concerns.

[Baroness Kennedy of The Shaws]

My Lords—

[Earl Attlee]

My Lords, we need to be a little careful about adhering to the rules of Report.

[Lord Mackay of Clashfern]

My Lords, the noble Baroness has referred to something that happened about 20 years ago in relation to experiments in Scotland. As she said, judges there were able to make arrangements for televising trials without any change in the statute law because there was no statute restricting that possibility. A considerable number of cases were televised under that arrangement. The television authorities put together a programme because, interested though they were in Scotland, it was nothing in comparison with the interest they had in proceedings in England, for reasons which perhaps an 18th-century Scottish judge might have speculated about. Anyway, that was the fact.

15:30

It was arranged that senior members of the judiciary here and the legal profession—particularly those who had practised considerably in the criminal courts, as the noble Baroness has—should view this compilation of the results of the television trials to pave the way for similar arrangements in England. I was present on at least one of those occasions: I think there was more than one when they were shown. I regret to say that the result on the senior members of the legal profession was such that, until now, the experiment has not been taken any further. That was 20 years ago. I am not sure whether the noble Lord, Lord Pannick, was one of the viewers of that particular programme, but if he was not then it might be quite useful for him and some others who are presently concerned with the matter to see it now.

I am perfectly prepared to agree that the Lord Chief Justice should have control of this matter. I suggest that whenever this comes before the Lord Chief Justice, it might be useful were there an opportunity available to see the results of the Scottish trial of 20 years ago so that the difficulties—and there are some—might be considered in the formulation of the requirement. One thing that may be important is a question of some control of the editing. As your Lordships know, there is considerable control of the editing of the programmes in Parliament, and there may need to be something of that kind. It does not require too much imagination to suppose that the editing of sentencing remarks, the way that they are set out and their completeness, could make some difference to the balance with which an observer might view the situation. There is a great deal of detail that requires to be looked at. As I said, this information from 20 years ago—it is not as far back as the 18th century but is still of some relevance—should be available to those considering this matter further.

[Baroness Hamwee]

My Lords, it is very rare indeed that I do not wholly agree with the noble Baroness. As for my noble friend, Lord Lester, I do not even stop to assess whether I agree with him because I know that I should. However, as the noble and learned Lord has just mentioned, we in Parliament are used to our proceedings being recorded—we barely notice the cameras now—and edited. I am constantly taken aback by the number of people who watch the Parliament channel and our proceedings at great length—they must be terrible insomniacs, but they do. It may be that they prefer to watch and listen to a large chunk of a particular matter rather than have the proceedings edited by that very respectable and useful programme, “Today in Parliament”, or the print media. I support giving that opportunity with regard to the courts.

I recently attended a sentencing. I was there accompanying somebody who was concerned with the case. Waiting for my friend afterwards, I listened to the quite considerable number of print journalists there, writing up their stories. They had been handed a copy of the judge’s sentencing remarks but barely referred to the copy. They checked one or two comments with each other instead of bothering to go back to what they had been given, and I could hear how they were editing the remarks to make a sensational story.

I am very happy to rely on the Lord Chief Justice and the judges in particular cases where, as I understand it, the ability to make particular restrictions will still continue. Of course, editing—being a camera—is subjective. I have agonised about this quite a lot and I spoke rather in the other direction at the previous stage, but I have come down to believing that this quite cautious move is the right one. Judges are less tempted than politicians to make off-the-cuff remarks about major moves forward. I am therefore very happy that the Lord Chief Justice is so much involved.

[Lord Beecham]

My Lords, I understand the points made by my noble friend and by the noble Lord, Lord Lester. This is an innovation in English court procedures and we should approach it with a degree of caution. The case for opening up the judicial system to more public information and understanding is well made, and to that extent I concur with the remarks of the noble Lord, Lord Pannick. I was less happy with the second part of his speech, which addressed the amendments in my name. I endorse what the noble Baroness, Lady Hamwee, has just said about discretion on the part of the trial judge to decide whether or not to permit broadcasting. That ought to be a significant safeguard, but it is not quite good enough to rely just on the Lord Chief Justice. I say “just”; although one has every confidence in the holders of that office, this is, as I say, a new departure and there is a wider interest to be considered. The amendments in my name and that of my noble friend Lord Rosser try to establish the principles both in relation to any decision to extend court broadcasting and regarding the matters to be considered when a court gives a direction, precisely to meet some of the objections and difficulties envisaged by my noble friend Lady Kennedy and the noble Lord, Lord Lester.

Amendment 120B requires any statutory instrument to be subject to the affirmative resolution procedure. I am in slight difficulty here because, when these matters were raised in Committee, the noble Baroness, Lady Northover, said that the government amendments would make the provisions under what was then Clause 22 and is now Clause 23 subject to the affirmative procedure, as recommended by the Delegated Powers and Regulatory Reform Committee. She also referred to what was then Clause 29, which again required amendments to primary legislation to be subject to the affirmative procedure. I may have missed them but I cannot actually see those references in the Bill. They may be disguised under some form of words that does not immediately disclose their presence, but I would be grateful if the noble Lord, Lord Ahmad, could confirm that the affirmative procedure would apply so that it would not simply be a matter of a decision by the Lord Chief Justice but, if there were to be significant changes, particularly to extend the range of matters that could be broadcast, then the affirmative procedure would apply. If that were the case, we would certainly be content to support the Bill in its present form. Perhaps, with the assistance of the Box, he may be able to help me and, more importantly, your Lordships, to come to a conclusion about whether the Government’s intentions are currently reflected in the Bill.

[Lord Ahmad of Wimbledon]

My Lords, it is always interesting to examine such issues. I have listened to the speeches and the arguments, although I was not in your Lordships’ House when the arguments were put forward for the televising of Parliament. I listened, as I always do, to the noble Baroness, Lady Kennedy, who spoke about words being put into people’s mouths and perhaps being interpreted differently. I suppose that every now and again parliamentarians, and politicians in particular, suffer that consequence, which is well understood.

This has been a wide-ranging debate. As we have seen, again there is strong opinion on both sides of the argument. As the noble Baroness, Lady Kennedy, said, her amendment would limit court proceedings to appellate proceedings and, in effect, would require the Government to return to Parliament before broadening court broadcasting to other types of court proceedings, such as those in the Crown Court. I am also aware, as my noble friend Lord Lester of Herne Hill pointed out, that this amendment was specifically recommended by the Joint Committee on Human Rights in its report of the Bill. I would, of course, like to thank the Joint Committee for its report. I am also glad to read that the committee agrees with the Government’s objective of making justice as apparent and as publicly accessible as possible.

We have heard about 18th century judges, although I am minded not to travel back in history to that extent. However, in 1924, the Lord Chief Justice, Viscount Hewart, said:

“Justice should not only be done, but should manifestly and undoubtedly be seen to be done”.

I believe that sentiment underlies the Government’s view.

The noble Baroness, Lady Kennedy, talked about caution. The Government recognise that as regards court broadcasting. It is our view that any order made under Clause 23 will require, as has been mentioned by various noble Lords, the agreement of the Lord Chief Justice. But that is just one lock. It will also require the approval of the Lord Chancellor and will be subject to scrutiny by both Houses of Parliament under the affirmative procedure. Therefore, court broadcasting will be introduced in a safe and proportionate manner. That is akin to putting not one or two locks on the door but to putting three locks. It will take three people to open that door.

However, we can go one step further. We believe that this triple lock, combined with existing reporting restrictions and the additional provision to allow judges to stop the filming and broadcasting of court proceedings to ensure the fairness of proceedings and to prevent any undue prejudice, will ensure that the interests of victims and witnesses, who are most important, as well as jurors, defendants and other parties, are fully protected. I hope that this will address the concerns of not only the noble Baroness but also the noble Lord, Lord Beecham, in relation to the court’s requirement to consider when to allow or to prevent broadcasting.

When the noble Baroness, Lady Kennedy, mentioned that moving cameras changed people’s actions, they certainly changed my action. As she mentioned it, I looked towards the camera and the camera moved. There is some credence and fact behind that statement.

The Government announced plans in September of last year to allow the broadcasting of judgments and advocates’ arguments in cases before the Court of Appeal and, over a longer period, to allow broadcasting from the Crown Court but to limit this to the judge’s sentencing remarks after conclusion of the trial. We believe that this will help to increase the public’s understanding of sentencing, with low risk to the proper administration of justice. Let me assure your Lordships’ House that we have no plans to extend court broadcasting beyond these two sets of circumstances. We believe that, once Parliament has approved the principle of broadcasting selected court proceedings, the details safely can be set out in secondary legislation. I would remind the House that the Delegated Powers and Regulatory Reform Committee did not take issue with this approach as long as the secondary legislation was subject to the affirmative procedure, which it now is. This means that the Lord Chancellor may make an order only under this clause which has been approved by both Houses. That being the case—I refer in particular to the comments made by the noble Lord, Lord Beecham —Amendment 120B is not needed as that ground is covered already by Clause 30(4)(f). As with all primary legislation, these provisions will be subject to post-legislative review three to five years after Royal Assent.

15:45

The other amendments tabled by the noble Lord, Lord Beecham, reflect the vital principles of protection for victims and witnesses and the proper administration of justice. I am happy to reiterate the Government’s commitment to these principles. Furthermore, I believe that the draft order which noble Lords have now seen demonstrates how these principles are intended to be upheld. This order would allow filming in the Court of Appeal of submissions of legal representatives, exchanges in open court between a legal representative and the court and the court giving judgment only. Filming of any other individuals or parts of proceedings would remain prohibited by the Criminal Justice Act 1925. The order also provides that the court may suspend or stop filming or prevent broadcast where that would be necessary in the interests of justice.

The noble Baroness, Lady Kennedy, and the noble and learned Baroness, Lady Butler-Sloss, talked about judges’ security and the noble and learned Baroness, Lady Butler-Sloss, mentioned her concern for her dog. Parliamentarians, politicians and judges are in the public eye, and people have to face challenges and dangers in public life, but I assure the House that the Government will happily look at security in the impact assessment that will be published before the first order is brought forward.

I hope that this addresses the key principles and concerns, which the Government recognise, that are outlined in the amendments tabled by the noble Baroness, Lady Kennedy, and the noble Lord, Lord Beecham. An extension to allow filming of sentencing remarks in the Crown Court would require a further order, subject to the triple lock procedure that I outlined earlier.

Given the concerns that have been voiced, the Government are happy to publish a detailed impact assessment alongside the first order made under this clause and will continue to engage with victim support groups, members of the judiciary and other interested parties. Any order made under this clause is subject to the triple lock. Several noble Lords mentioned the important role of the Lord Chief Justice. The Lord Chancellor also has a role, and both Houses of Parliament must approve the order under the affirmative procedure. I reiterate that, in any case, a judge may impose reporting restrictions and prevent, suspend or stop filming to prevent broadcast, where necessary. I hope these four locks and these assurances will address the concerns of the noble Baroness, Lady Kennedy, and the noble Lord, Lord Beecham. I hope the noble Baroness will withdraw her amendment.

[Baroness Kennedy of The Shaws]

I thank the Minister for his response. I am not sure that there could be enough locks to satisfy my concerns. Superficially, this can be very attractive, and it can be discussed in the context of transparency and accountability, but they can be veneers for something much riskier. The camera is not the same as the human eye. The noble Baroness, Lady Hamwee, described watching as reporters for the print media took no notice of the written transcript of the judge’s sentencing remarks but filleted out the bits that they knew would be sensational. I can assure her that those who edit television programmes will follow exactly that process.

The camera cannot capture all that is happening as the human eye can. Currently, television reporters, like press reporters, go into the court and listen then come out and report. Having been in court and watched what happened, the reporter becomes the witness, just like the print journalist. The human eye is different from the camera. The camera cannot pick up tension, smell fear or catch those minute twitches of the lips or the eyelid that often tell you so much. Worst of all, the person behind the camera is editing as he goes. The editor back at the station edits further and the news programme will snip out the choice bits of footage for the headlines. I really warn everyone in this House that new technology will then mean that it will be played and replayed over and over and over again. I am afraid it will not stop with sentencing remarks. It will continue with erosions and demands being made and the judiciary feeling under pressure to comply to not be seen as old-fashioned, 18th century gentlemen.

It is easy for people who do not practise in a criminal court to underestimate the power and the effect of this on our justice system. I regret that there is not enough support in this House for my amendment and I therefore feel obliged to withdraw it, but I do so giving a warning about the serious implications of taking cameras into criminal courts and what it will do to our justice system.

Amendment 113 withdrawn.

Amendments 113ZA and 113ZB not moved.

Amendment 113A

Moved by

[Lord Pannick]

113A: After Clause 23, insert the following new Clause—
“Abolition of scandalising the judiciary as form of contempt of court
(1) Scandalising the judiciary (also referred to as scandalising the court or scandalising judges) is abolished as a form of contempt of court under the common law of England and Wales.
(2) That abolition does not prevent proceedings for contempt of court being brought against a person for conduct that immediately before that abolition would have constituted both scandalising the judiciary and some other form of contempt of court.”

[Lord Pannick]

My Lords, this amendment seeks to abolish the crime of scandalising the judiciary in England and Wales. I am delighted that the Minister has added his name to this amendment. The amendment is also signed by the noble Lord, Lord Lester of Herne Hill, who has played a leading role in arguing for reform of this area of the law. The amendment is also in the names of the noble and learned Lord, Lord Carswell—a former Lord Chief Justice of Northern Ireland—and the noble Lord, Lord Bew.

I can explain the reasons for this amendment very briefly. It is no longer necessary to maintain as part of our law of contempt of court a criminal offence of insulting judges by statements or publications out of court. The judiciary has no need for such protection. As the noble and learned Lord, Lord Carswell, explained in Committee, the wise judge—and he, if I may say so, was a very wise judge—normally ignores insults out of court. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, made a similar point in a case he decided, as he may recollect. Judges, of course, are as entitled as anyone else to bring proceedings for libel, and some have done so.

The law of scandalising the judiciary could have been left in the moribund state in which it has rested for many years. However, the Attorney-General for Northern Ireland unwisely chose earlier this year to seek to breathe life into it by bringing a prosecution, later dropped, against Peter Hain MP for some critical comments he had made in his autobiography concerning a Northern Ireland judge. That prosecution had two main consequences. First, it substantially increased the sales of Mr Hain’s book and, secondly, it led to this amendment.

When we debated this subject in Committee on 2 July, the Minister gave a cautious welcome to the amendment but said, very properly, that the Government wished to consult on the matter. As a result of the debate in this House, the Law Commission expedited the publication of a consultation paper on 10 August in which it proposed that the offence of scandalising the judiciary should indeed be abolished.

I emphasise that the amendment will not affect other aspects of the law of contempt of court and in particular the powers of the judge to deal with any disruptions during court proceedings. I also emphasise that the amendment is not designed to encourage criticism of the judiciary. Much of the criticism to which judges are subjected is ill informed and unsubstantiated. However, even where criticism is unjustified, it should not be a criminal offence.

The amendment will not affect the law in Northern Ireland or Scotland, in the latter of which the offence is known as “murmuring judges”. I understand that in Northern Ireland more consultation is required. It is ironic that the impetus for this amendment came from the Peter Hain case in Northern Ireland, and now the anachronistic law that led to that case is to be abolished in England and Wales but not in Northern Ireland. I hope that the Minister can give us an indication of when consultations with Northern Ireland will be completed and a decision reached.

Meanwhile, I am delighted by the historic decision which I hope that this House will take tonight to approve an amendment abolishing the offence of scandalising the judiciary in England and Wales. As Justice Albie Sachs said on this subject in a judgment in the Constitutional Court of South Africa in 2001, respect for the courts will be all the stronger,

“to the degree that it is earned, rather than to the extent that it is commanded”.

I beg to move.

[Lord Lester of Herne Hill]

My Lords—

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

My Lords, I wonder if my noble friend will give way. I want to intervene now because what I am going to say will help the shape of the debate. I realise that my noble friend and a number of noble and learned Lords may wish to contribute. I in no way want to cut short or pre-empt that debate, but I hope that my comments will establish the context for them to comment on what the Government intend to do.

As the noble Lord, Lord Pannick, told us, we considered a similar amendment to this in Committee in July. I said that the Government were sympathetic to the concerns raised about the offence of scandalising the judiciary but we wished to consider the issue further and to consult others. In particular, before moving to reform or abolish this offence, we wished to consider whether such a step could result in a gap in the law or have an unwanted side-effect.

As the noble Lord, Lord Pannick, told us, in this we had the benefit of the work of the Law Commission, which was and is currently reviewing the law on contempt of court. As the noble Lord said, it kindly brought forward the element of its review considering scandalising the court and published a paper for public consultation in August. The commission considered three options in its consultation paper—to retain, abolish or replace the offence—and it has concluded that the offence should be abolished without replacement. Its analysis was in-depth, examining the human rights aspects and considering the arguments for and against the various options.

The consultation closed in October, and the commission published a summary of responses last month and a summary of its conclusions yesterday. I was pleased to see that several noble Lords responded with their views, and that members of the judiciary and other legal professions were also well represented. Of 46 responses, some from organisations, 32 were in favour of abolition. The remainder expressed a variety of views, most favouring a replacement offence, but I note that only two favoured retaining the offence in England and Wales, at least for now.

We have also noted other views, such as those expressed by noble Lords in Committee, and have concluded that it is right that this offence should be abolished. We therefore support the amendment. However, we also noted the Law Commission’s observation in its paper that:

“It may be necessary to clarify that the abolition of this offence does not affect liability for behaviour in court or conduct that may prejudice or impede particular proceedings”.

We support that view that abuse of a judge in the face of the court, or behaviour that otherwise interferes with particular proceedings, should remain a contempt. The new clause includes a provision that will ensure such behaviour will remain subject to proceedings for contempt of court.

In contrast to the amendment we debated in Committee, which extended to Northern Ireland, this amendment applies to England and Wales only, as the noble Lord, Lord Pannick, explained. In July, I said that we would be consulting the devolved Administrations; noble Lords must remember the criminal law is a devolved matter in both Northern Ireland and Scotland. Scandalising the judiciary is also a common law offence in Northern Ireland. As I have said, we consulted with the Minister of Justice, David Ford, who has confirmed that he does not wish the Westminster Parliament to legislate on behalf of the Northern Ireland Assembly on this offence. Similarly, the Scottish Government have also confirmed that they do not wish us to legislate on their similar common law offence of murmuring judges. Given that this is a devolved matter in both jurisdictions and under the terms of the Sewel Convention, we wish to respect the wishes of the Scottish Government and Northern Ireland Assembly in this matter.

I am grateful to my noble friend Lord Lester and the noble Lord, Lord Pannick, for bringing this matter before the House. The Government are happy to support this amendment, and through it the abolition in England and Wales of the offence of scandalising the judiciary. I hope that my intervention at the start of the debate does not prevent other noble Lords and noble and learned Lords from making observations on where we are and where we are going.

16:00

[Lord Lester of Herne Hill]

My Lords, I declare a former professional interest in that I acted for the Northern Ireland Human Rights Commission in the aborted contempt proceedings in relation to Peter Hain and his publisher. I am extremely grateful to the Attorney General for Northern Ireland for his entirely misguided decision to move for committal because, but for that, I would not be standing here in support of the amendment. We owe everything to the Attorney General because it was that which caused me to contact the Law Commission and the Government, and to discuss the matter with my friend, the noble Lord, Lord Pannick, in the first place.

It is important that the Government have decided to do what we have just heard from the Minister, and that is most welcome. However, I pay tribute to the previous Government, and I see the noble Lord, Lord Bach, in his place when I say this. He will remember that the other antique and archaic speech crimes of sedition, seditious libel, defamatory libel, obscene libel and blasphemous libel were all abolished by the previous Government and Parliament for similar reasons connected with free speech.

So far as blasphemy was concerned, for the reasons given by the Minister, it was decided that, although we could abolish that offence in Britain, we could not do so in Northern Ireland. We left it to Northern Ireland to do so itself, and we thought that it would be easy to do there because Northern Ireland already had a law on incitement to religious hatred that was rather stricter than what we have in this part of the kingdom. However, nothing has happened on that issue in Northern Ireland because there is institutional paralysis about doing anything of the kind. I know that this matter has concerned the Northern Ireland Human Rights Commission, and exactly the same problem arises now. Even though the amendment springs from a problem that arose in Northern Ireland, I am doubtful as to whether the Northern Ireland Government will agree to bring their common law into line with what we are doing in England and Wales. However, given that two other supporters of the amendment know far more about Northern Ireland than I would ever know, I shall not say more about that matter.

I should like to make one other point. Although abolishing this crime in this country will make very little difference because the law is entirely obsolete, it will make a difference in the rest of the common law world. All the textbooks, including that of the noble Lord, Lord Borrie, say the same thing, which is that, although this is an outmoded and archaic offence, there remain many parts of the common law world where it is enforced. The most notorious example occurred in Singapore last year, where Mr Alan Shadrake, who wrote a book criticising the Singapore judiciary’s attitude towards the death penalty, was committed for contempt, sentenced to prison, fined and told to pay legal costs. This gentleman, who is about my age and a distinguished senior writer, was condemned in that way, with the Singapore Court of Appeal applying its view on our case law and this offence. By abolishing the offence today we do not really change much in this part of the world because, apart from what happened in Northern Ireland, it is simply never invoked anymore. However, it will send an important message across the common law world. That is another reason why I am so delighted that the Government have decided to take this course.

[Lord Carswell]

My Lords, I support this amendment. I spoke briefly in Committee and I intend to be brief again today, particularly in view of the way in which the House has so far received the amendment and what the Minister has said.

Since that debate in Committee, the Law Commission has published this admirable consultation paper, which contains a full and helpful discussion of the issues, the principles and the possible solutions. My view, which was very direct and brief in Committee, remains unchanged. The special sanction for judges remains unnecessary. My reasons remain the same. Judges have to be hardy enough to shrug off criticism, even if it is intemperate or abusive, which has happened; even if it is unfair and ill-informed, which has certainly happened; and even if it is downright deliberately misleading, the same applies.

I speak from some knowledge. I have been scandalised on several occasions in the course of criminal trials at which I was the presiding judge without a jury. It was intemperate, certainly ill-informed and extremely offensive. I was deeply offended and hurt, but I certainly did not consider attempting to ask anyone to invoke the special procedure of scandalising the court. If anyone had suggested it, I would have firmly discouraged him at that time, which is a good many years ago now.

After I read the Law Commission consultation paper, I considered quite seriously whether there was room for the possibility of a new and more specific offence, penalising possibly deliberate and malicious targeting of a judge by making untrue and scandalous allegations into something of a campaign. I am persuaded, however, that it is better not to introduce any such offence into the law but simply to leave it at abolishing the offence of scandalising.

My reasons are three. First, special protection of judges immediately invites criticism from those who are all too ready to give vent to it. Secondly, if a judge had to give evidence in such proceedings, it would create a further and better opportunity for intrusive cross-examination and create a field day for publicity for critics of the judiciary. Thirdly, as I have said before, judges have to put up with these things; they have to be robust, firm and, on occasions, hard-skinned enough.

The Law Commission, in my view, was right in its provisional conclusions and I hope that when the report has been considered, the responses will confirm that. I would certainly support the amendment that the offence should simply be abolished.

Finally, as noble Lords have said, this of course does not apply in Northern Ireland. The authorities there will form their own view and take their own course. I cannot and do not in any way speak for them, nor have they consulted me about such provisions. I have to say, and I hope that they will take this into account, that I cannot see any reason why judges in Northern Ireland should have any different protection from judges in England and Wales against scandalising. I think the same considerations apply, and having been a judge there for 20 years, I would certainly not wish to see any differentiation.

[Lord Beecham]

My Lords, I echo the remarks made by the Minister and by other noble Lords. We are entirely supportive of the amendment, and glad that the Government have agreed to take matters forward in the way that the noble Lord indicated.

[Lord McNally]

My Lords, I will clarify a point raised by the noble Lord, Lord Pannick. The Justice Committee in Northern Ireland recently agreed to proceed with an amendment to its Criminal Justice Bill that would see this offence repealed. I am sure that the words uttered by the noble and learned Lord, Lord Carswell, about his own experience will carry great weight. However, this is a devolved matter for Northern Ireland.

[Lord Pannick]

I am grateful to all noble Lords who spoke.

Amendment 113A agreed.

Amendment 113AA

Moved by

[Baroness Linklater of Butterstone]

113AA: After Clause 23, insert the following new Clause—
“Eligibility for assistance
(1) An accused person in criminal proceedings is eligible for assistance by virtue of this section if the courts considers that the quality of that person’s participation in and understanding of court proceedings or of the evidence given by that person is likely to be diminished by reason of any circumstances falling within subsection (2).
(2) The circumstances falling within this subsection are that the accused person—
(a) suffers from mental disorder within the meaning of the Mental Health Act 1983, or(b) otherwise has a significant impairment of intelligence and social functioning.(3) Where the court determines that the accused person is eligible for assistance by virtue of this section, the court may then give a direction under this section providing for—
(a) assistance of the accused in preparing for court proceedings and in instructing the accused person’s legal representative to be provided by a person approved by the court for the purposes of this section (“an intermediary”),(b) assistance of the accused person in understanding and participating in court proceedings to be provided by the intermediary, and(c) the examination of the accused person to be conducted through the intermediary.(4) The Secretary of State may, by regulations, make provision about the recruitment, accreditation, training and appraisal of intermediaries approved by courts under this section.”

[Baroness Linklater of Butterstone]

My Lords, the amendment will ensure that, where necessary, vulnerable defendants are provided with the appropriate support to enable effective participation in court proceedings and in preparing for their trial. The aim is that such defendants should be entitled by statute to the same support as vulnerable witnesses, and thus to an equally fair trial. A briefing paper, Fair Access to Justice?, for front-line staff in the criminal justice system and the NHS, explains how those who appear in court as a victim or witness are entitled to extra support or special measures to help them understand and cope with the process. At present, vulnerable defendants do not have the same entitlement and get that support only at the discretion of the court, despite the fact that high numbers are vulnerable. The amendment would restore a balance and ensure even-handedness in court proceedings for any vulnerable person, whether they are a victim or a defendant. The special measures are intended to reduce the stress of the court appearance for the vulnerable individual or witness so that he or she can give the best evidence. Hitherto, these measures applied only to vulnerable witnesses and specifically not to defendants.

Support is provided for witnesses by qualified intermediaries who are registered, accredited and trained to help vulnerable and other witnesses in court proceedings after the most stringent selection, quality assurance, regulation and monitoring procedures. The aim is to facilitate vulnerable witnesses with two-way communication in court between them and other participants so that their communication is as complete, accurate and coherent as possible. However, while the arrangements are available to witnesses, they are specifically not available for defendants except at the discretion of the court, and even then the intermediaries appointed to support them do not have to be either registered or regulated, and are paid different fees. It is possible to have an unregistered intermediary assisting a defendant while a witness in the same trial has a fully registered one who is paid more than his counterpart who represents the defendant. This is an entirely unfair and unjust arrangement that favours a witness over a defendant, irrespective of the guilt or innocence of the vulnerable parties.

The current reality is that a high number of defendants going through the courts need particular support to help them cope and understand what is going on. If they do not have this help, it can affect their ability to participate in court proceedings and compromise their right to a fair trial. There is some help for vulnerable defendants giving oral evidence only, but they are not helped during trial proceedings to participate effectively, instruct counsel or prepare for a trial.

16:15

More than 60% of children who offend have communication difficulties, 5% of adults have learning difficulties and high numbers have mental health problems. Clearly their ability to communicate is significantly compromised, especially in the context of a courtroom. Many have difficulty expressing themselves, understanding certain words and in verbal comprehension. In fact, one study showed that more than one-fifth did not understand what was happening to them, what was going on, or even why they were in court at all or what they had done wrong. Generally those with a low IQ and learning difficulties are likely not to understand certain words during their arrest and trial, and may find it harder to remember things, and be more suggestible or answer questions with what they think the lawyer wants to hear.

The answer would seem to be that vulnerable witnesses and vulnerable defendants should be treated even-handedly. Both should have properly registered intermediaries to help prepare them according to their need. Whoever is to be responsible for making appropriate arrangements should be clarified or decided, specifying the particular roles of those involved in the court proceedings. Special measures and adjustments according to personal need and to give guidance to the judiciary and staff should be part of the new liaison and diversion services.

Finally, the use of these measures and other reasonable adjustments should be monitored, reviewed and reported for the national liaison and diversion development network and an integral part of the forthcoming policy. Indeed, there should be one register of intermediaries for all vulnerable people in the criminal justice system, subject to all the same standards. Procedures for all liaison and diversion services in the criminal justice system should provide the courts with all relevant information regarding impairment and support needs, including when an appropriate adult has been called to a vulnerable adult or 17-year old at a police station.

This seems an obvious anomaly; it risks leading to serious injustice, which is quite unacceptable. The model exists for help for witnesses thus disabled, so the solution would appear to be simply to apply it to defendants with similar disabilities for justice to be done. Discrimination is hard enough at the best of times when you are disabled. At the worst of times, for the courts to be found to be inadvertently discriminating against a defendant because of his or her disability—and who is innocent until proved guilty—through a failure to understand the nature of the disability, is clearly unacceptable. Mercifully, it would appear relatively easy to put right. I urge the Minister, at this late stage in the Bill, to ensure that the necessary changes are made to the current situation so that justice can indeed be done and be seen to be done. I beg to move.

[Lord Beecham]

My Lords, I hope the Minister can give a positive reply to the noble Baroness. She has made a powerful case in connection with a particularly vulnerable group for whom existing services are perhaps not adequate. I do not know whether the Minister will be inclined to accept the amendment at this stage or whether he will at least be prepared to take it back for consideration before—or rather at—Third Reading. I think that that would satisfy the noble Baroness and most Members of Your Lordships’ House and I hope he feels able to take that course.

[Lord Woolf]

I also urge the Minister to do what has just been urged by the noble Lord, Lord Beecham. It is the judge’s most important duty to ensure the fairness of the trial. However, the problem identified by the noble Baroness, Lady Linklater, is one that the judge simply cannot tackle himself. There needs to be hands-on assistance of the sort she indicates. Therefore, for the same reason, I ask the Minister to give careful consideration to this.

[Lord McNally]

My Lords, as the noble and learned Lord, Lord Woolf, has just told us, it is the duty of the courts to ensure that defendants receive a fair trial. It therefore may be necessary to make particular efforts in the case of defendants whose understanding is limited. To some extent it will fall to the defendant’s legal adviser, or to the judge, to help meet the needs of these vulnerable defendants. From time to time courts have asserted the right to grant such defendants the assistance of an intermediary.

Statutory provision has in fact already been made in Section 104 of the Coroners and Justice Act 2009 for certain vulnerable defendants to be eligible for assistance from an intermediary when giving evidence. A defendant would benefit from this provision where their ability to participate effectively in the proceedings as a witness is compromised by a significant impairment of intelligence and social functioning; or where they are suffering from a mental disorder within the meaning of the Mental Health Act 1983.

The Government made a decision to defer implementation of Section 104 until full consideration could be given to the practical arrangements and resource implications. Although there are no immediate plans to implement these provisions, we are continuing to monitor the situation and the resource implications of doing so. However, as I said earlier, judges have on occasion granted the use of an intermediary to assist vulnerable defendants to ensure a fair trial. In fact, guidance on the process for appointing intermediaries for defendants was issued nationally to all courts last year.

Furthermore, Part 3.30 of the Consolidated Criminal Practice Direction also provides guidance on a range of other types of support that a court may wish to offer, including that at the beginning of the proceedings the court should ensure that what is to take place has been explained to a vulnerable defendant in terms they can understand. Secondly, a trial should be conducted according to a timetable which takes full account of a vulnerable defendant’s ability to concentrate. Frequent and regular breaks will often be appropriate.

I have listened to what my noble friend said and to the interventions of the noble and learned Lord, Lord Woolf, and of the noble Lord, Lord Beecham. I do not want to raise expectations as I am not sure whether I can get clearance to take this forward at Third Reading. However, I assure my noble friend that, as I have said, we are continuing to monitor the situation and are looking at the practical arrangements and resource implications of bringing in Section 104. I certainly agree to take this measure away. If I cannot bring it back at Third Reading, I will write to the noble and learned Lord, the noble Lord and my noble friend to explain why I cannot do so and what we are doing to keep this matter under review. I hope that, with those assurances, my noble friend will agree to withdraw her amendment.

[Baroness Linklater of Butterstone]

My Lords, I am heartily grateful to the noble and learned Lord and the noble Lord who have supported what I had to say. That support, coming from two such distinguished sources, means a very great deal to me. I hope that the Government will also pay heed to it.

I heard what my noble friend the Minister said. It is moderately cold comfort. There is none the less the possibility of further recognition of what remains quite a major injustice that is built into our system. In the mean time, I beg leave to withdraw the amendment.

Amendment 113AA withdrawn.

Amendment 113B had been retabled as Amendment 108ZA.

Amendment 113C

Moved by

[Lord McNally]

113C: Before Clause 24, insert the following new Clause—
“Self-defenceUse of force in self-defence at place of residence
(1) Section 76 of the Criminal Justice and Immigration Act 2008 (use of reasonable force for purposes of self-defence etc) is amended as follows.
(2) Before subsection (6) (force not regarded as reasonable if it was disproportionate) insert—
“(5A) In a householder case, the degree of force used by D is not to be regarded as having been reasonable in the circumstances as D believed them to be if it was grossly disproportionate in those circumstances.”
(3) In subsection (6) at the beginning insert “In a case other than a householder case,”.
(4) After subsection (8) insert—
“(8A) For the purposes of this section “a householder case” is a case where—
(a) the defence concerned is the common law defence of self-defence,(b) the force concerned is force used by D while in or partly in a building, or part of a building, that is a dwelling or is forces accommodation (or is both),(c) D is not a trespasser at the time the force is used, and(d) at that time D believed V to be in, or entering, the building or part as a trespasser.(8B) Where—
(a) a part of a building is a dwelling where D dwells,(b) another part of the building is a place of work for D or another person who dwells in the first part, and(c) that other part is internally accessible from the first part,that other part, and any internal means of access between the two parts, are each treated for the purposes of subsection (8A) as a part of a building that is a dwelling.(8C) Where—
(a) a part of a building is forces accommodation that is living or sleeping accommodation for D,(b) another part of the building is a place of work for D or another person for whom the first part is living or sleeping accommodation, and(c) that other part is internally accessible from the first part,that other part, and any internal means of access between the two parts, are each treated for the purposes of subsection (8A) as a part of a building that is forces accommodation.(8D) Subsections (4) and (5) apply for the purposes of subsection (8A)(d) as they apply for the purposes of subsection (3).
(8E) The fact that a person derives title from a trespasser, or has the permission of a trespasser, does not prevent the person from being a trespasser for the purposes of subsection (8A).
(8F) In subsections (8A) to (8C)—
“building” includes a vehicle or vessel, and“forces accommodation” means service living accommodation for the purposes of Part 3 of the Armed Forces Act 2006 by virtue of section 96(1)(a) or (b) of that Act.”(5) In subsection (9) (section intended to be clarificatory) after “This section” insert “, except so far as making different provision for householder cases,”.
(6) An amendment made by this section does not apply in respect of force used before the amendment comes into force.”

[Lord McNally]

My Lords, I was going to say that these were technical amendments, but I am advised that they are not.

It would be terrifying to be confronted by a burglar in your own home. Mercifully, it does not occur very often, but when such a situation arises most people would say that the law should be on the side of the householder. After all, they are the ones who may have been woken up in the dead of night, made to fear for their safety or the safety of their loved ones and compelled to use force to protect themselves in traumatic circumstances. If householders end up being arrested, prosecuted or convicted after injuring a burglar, this can give rise to a public perception that the criminal justice system does not support the real victims in all of this. These amendments are designed to shift the balance of the law further in favour of householders to ensure that they are treated first and foremost as the victims of crime.

The current law, as clarified in Section 76 of the Criminal Justice and Immigration Act 2008, already says that people can protect themselves or others, prevent crime or protect property using force that was reasonable in the circumstances as they believed them to be. However, it also says that the use of force which was disproportionate in the circumstances will never be reasonable. This means that a householder who has acted honestly and instinctively to protect himself or his loved ones from an intruder could end up being prosecuted if his actions are deemed to have been disproportionate when viewed in the cold light of day. The Government feel strongly that householders, acting in extreme circumstances to protect themselves or others, cannot be expected to weigh up exactly how much force is necessary to repel an intruder. There may be a fine line between actions that are proportionate in the circumstances and those which might be regarded as disproportionate. The Government think householders should be given the benefit of any doubt and that Section 76 of the 2008 Act should be amended accordingly. As long as householders have done only what they believed was reasonable in the circumstances, it should not matter if those actions were disproportionate when viewed with the benefit of hindsight.

I am aware of criticisms that these changes will amount to a vigilantes’ charter; the Government do not accept that argument. All we are saying is that if householders act in fear for their safety or the safety of others and in the heat of the moment use force which is reasonable in the circumstances but seems disproportionate when viewed in the cold light of day, they should not be treated as criminals. Force which was completely over the top—grossly disproportionate, in other words— will still not be permitted.

This is not about saying that it is open season on any intruder. It is rather saying that the law will look benevolently upon any householder who, faced in his own home with the terror of someone he believes to be a trespasser, acts in a way that is reasonable in the circumstances as he believed them to be, even if the force used was disproportionate.

Noble Lords will note that the amendments are limited to householders defending themselves or others from intruders in their dwellings. The Government believe that attacks by intruders in the home cause the greatest public concern. Our home is our haven and refuge—a place where we have every right to feel safe. That is why the Government believe that householders deserve special protection. However, the provision also extends to shopkeepers who live and work in the same premises and Armed Forces personnel who may live and work in buildings such as barracks for a period of time.

We recognise that there are a range of other circumstances in which people might be required to use force—for example, to defend themselves from attack on the street, to intervene to stop crimes being committed or to protect their property. The new provision does not extend to those situations, but the current law on the use of reasonable force will continue to apply in those circumstances.

I recognise that some noble Lords might have a feeling of déjà vu as we debate these measures. We are returning to an area of the law that has been debated twice in recent years. While previous Bills clarified important aspects of the law on the use of force, the current proposals would make material changes to strengthen the rights of householders when defending themselves or others from intruders. Critics have said the changes are unnecessary because the current law provides adequate protection and householders who have defended themselves from burglars are hardly ever prosecuted. Clearly the Government take a very different view. Each case is different. Although the Crown Prosecution Service decided not to prosecute householders involved in recent cases, such as those in Leicestershire and Manchester, there might be occasions in the future where law-abiding householders benefit from these important provisions. I beg to move.

16:30

[Lord Beecham]

My Lords, burglary is a serious crime—

[Lord Woolf]

My Lords—

[Lord McNally]

Does the noble Lord not want to speak at the end?

[Lord Beecham]

No, I want to speak now if that is all right. Thank you. Burglary is a serious crime and a particularly distressing one. The forced invasion of one’s home adds a further dimension to the effect on its occupiers. I suspect several Members of the House will have shared my experience, at least in part. My home—which, incidentally, was built by the father of the noble and learned Lord, Lord Woolf, to whom I apologise for anticipating in this debate, for reasons that I shall give later—has been burgled and my office has also been burgled once. Fortunately, little damage was done; even more fortunately, no one was present at the time. Where the householder or other occupant is present, the impact of the crime transcends distress and, too often, becomes traumatic.

I say at once that we welcome the extension of the present law to non-residential premises, such as those of shopkeepers, to which the Minister has referred. However, in relation to domestic premises, while absolutely affirming the right of residents to defend themselves and their property, we have doubts about the Government’s proposals. The amendments have been spatchcocked into the Bill at virtually the last minute, almost, it would seem, as an initiation rite performed by the new Lord Chancellor. Unlike the proposals on community sentencing, we have not had the opportunity of a general debate under the recommittal procedure. I propose therefore to treat the debate on these amendments as, in effect, a Second Reading debate, which is why I sought to speak now rather than later.

Burglary is an offence against the person as well as against property, because a break-in destroys the victim’s peace of mind by violating the safe haven of their home. The householder is not in a position to exercise calm, cool judgment. The householder is entitled to use reasonable force to get rid of the burglar; and, in measuring whether the force is reasonable or not, you are not doing a paper exercise six months later:

“You have to put yourself in the position of the man or woman who has reacted to the presence of a burglar and has reacted with fury, with anxiety, with fear”.

These are not my words—although I concur with them—but the words of the Lord Chief Justice, the noble and learned Lord, Lord Judge, commenting on the recent case of two men jailed after raiding a remote cottage, when they were blasted with a shotgun. What is significant is that his words reflect the present state of the law. Although the victims in that case were questioned by police, their Member of Parliament, Alan Duncan MP—not, I think, generally known as a bleeding-heart liberal—said:

“The police did a very good job and investigated as thoroughly as they had to when a firearm is involved”.

The first question is what the government proposal adds to the present state of the law, as enshrined by the Labour Government’s Criminal Justice and Immigration Act 2008 and the present Government’s clarification, embodied in Section 148 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, passed only a few months ago. In my submission, it adds only confusion. It purports to allow the use of disproportionate force but not grossly disproportionate force. Can the Minister define, or even better exemplify, the difference between the two, especially bearing in mind the words of the Lord Chief Justice? What difference, if any, in his view would the amendment’s wording have had, for example, on the case of Tony Martin, who shot dead a burglar? What does the Minister make of the statement by Michael Wolkind QC, who represented Tony Martin? He said:

“The law already recognises that people react in a certain way in the heat of the moment”,

and argued that the law does not need changing.

The second element that the proposal might add to the Bill is, paradoxically and obviously unintentionally, a heightened risk to home owners. A study in Texas has demonstrated that the notorious “stand your ground” law, promoted by the US gun lobby and enacted in several US states, has led to more injuries and deaths being inflicted on householders and others by criminals, rather than fewer. Anyone who watched the recent TV programme on “stand your ground” would surely hesitate before opening the door to similar unintended consequences here, even allowing for the radically different gun culture that is such a blemish on American society.

There are other questions to be asked. Have the Government consulted the judiciary or the police on the proposed changes? If so, what responses have they received? If they have not consulted them, why not? Have they conducted an impact analysis? Your Lordships might think that a particularly fitting term in this instance for an assessment of the consequences of legislation. What is the evidence that the present state of the law, as defined by the noble and learned Lord, Lord Judge, is inadequate? The Minister has circulated what purports to be a fact sheet. Your Lordships might think that that document contains precious few facts and no evidence on which to base the Government’s proposals.

My right honourable friend Sadiq Khan sought information by means of Parliamentary Question on the number of home owners arrested or charged after defending their property against burglars since 1994. The answer was:

“The information on arrests is not collected centrally … It is not possible to match the arrests data to any subsequent outcomes”.—[Official Report, Commons, 22/10/12; col. 641W.]

The Guardian recently reported, after a review by the CPS, that there were all of seven cases—I repeat, seven cases—between 1990 and 2005 in which a householder was prosecuted. In other words, there is simply no evidence to suggest that the problem the Government purport to be addressing is significant in terms of numbers, whereas it is clear that neither the police nor the courts are going to fall over themselves to prosecute householders who react in the way described by the Lord Chief Justice.

Is the Minister suggesting that where serious injury or death is inflicted on a burglar—or even someone such as the man featured in a recent BBC radio programme who was thought to be a burglar but was apparently just a confused man trying unsuccessfully to enter what he thought was his own home—the police should not investigate the situation in a proper manner, not least in the interests of those whom they interview? I wait to see not only what answers to these and other questions emerge from this debate but what transpires when this Bill goes to the House of Commons.

I have no doubt that the Lord Chancellor will seek to portray himself as the champion of the victims. It is a pretty hollow claim on the part of a Government who are both alienating and cutting the police force; undermining community policing; presiding over the reduction of community support officers, who provide invaluable back-up to front-line policing; and savagely slashing or altogether removing compensation for the victims of crime by their changes to the criminal injuries compensation scheme. Those changes, I might add, were forced through the House of Commons by the process of mugging several Conservative members of the relevant committee, including John Redwood MP, a senior former Minister, and substituting placemen in the form of Parliamentary Private Secretaries—not much consideration for victims of crime in that context.

I repeat that we are at one with the intention to protect the householder and punish the burglar. We remain to be convinced that the Government’s proposals are sound in law and safe, from the perspective of the very people they are supposed to protect.

[Lord Pannick]

Before the noble Lord sits down, in the light of his very powerful speech, is he going to invite his Benches to enter the Lobbies to oppose this amendment?

[Lord Beecham]

My Lords, I am treating this as a Second Reading debate, which we could and should have had some time ago, to allow the Government the opportunity to make their case—which, it seems to me, the Minister has failed to do today—either here or in the other place, but we will not be voting on these proposals today.

[Lord Woolf]

My Lords, I should disclose that I presided over the case of Tony Martin on appeal. I oppose this amendment because I regard it as a very bad example of where statutory interference with the common law is wholly unnecessary. Unfortunately, like the noble Lord, Lord Beecham, my home has been burgled so I am not totally objective on these matters and know the concern that they can cause.

The position here is that nearly every word the Minister used in moving this amendment is the sort of remark that judges up and down the country would make to a jury when dealing with those very few cases in which a householder is prosecuted. I could hear myself making precisely those remarks in those days of longer and longer ago: such as saying that the person whose house was broken into, or who was attacked by a burglar, cannot be expected to draw a fine line between what is permissible and what is not. He has to be judged in the circumstances in which the alleged offence was committed. The great advantage of that situation was that the jury of men and women with their own experiences could set the standard and decide what was reasonable or what was not. Certainly, based on my experience, they always exercised that task in a way that was sympathetic to the defendant whose home was interfered with.

The problem and disadvantage caused by introducing an amendment of this sort is that you will always try to put into language the appropriate circumstances where you think a particular result is desired. However, there will be circumstances that are very similar to those circumstances, but where the language used does not apply. You cannot anticipate all the circumstances. One inevitable difficulty with this sort of amendment is that there will be amendment after amendment to the law, making it more and more complex and difficult to apply. Yet, as the quotation from the present Lord Chief Justice makes clear, a statement of the sort he indicates will achieve justice in the particular case.

I can understand why it is thought to be a good thing to do everything possible to defend victims of a particularly nasty crime from unintended consequences. However it is not desirable when the law itself is satisfactory and changing the long-standing law that upholds the spirit of the common law is sought by reducing it to the kind of language we have here.

[Baroness Kennedy of The Shaws]

My Lords, I, too, oppose this amendment and echo everything said by the noble and learned Lord, Lord Woolf. The whole nature of self-defence in the common law is very clear. Day in, day out, juries up and down the country judge using that set of criteria; which is that when you are fearful for your own safety or that of your family, when you feel a threat and act in response to the fear of a threat, no one expects you to measure the nature of your response to a nicety. No one for a minute expects you to be measured in the cold light of day and not take account of the heat of the moment that faces you when defending yourself. That is a measure in the courts on self-defence anyway, but it becomes even more heightened when dealing with the terror that we all know—and probably most of us have experienced—when we find that we have been burgled.

So this is about reaching for changes in the law for rather unsatisfactory purposes. A Dutch auction is now going on between the political parties about who can be tougher on law and order and this is about seeking to appeal to a fear in the public that is already met by law. That really is the poorest kind of legislative endeavour and is not worthy of the Benches on the other side.

16:45

I want to reiterate something else: the Government’s amendment permitting the use of disproportionate force by householders is actually a rare example of a provision in a Bill that is incompatible with the European Convention on Human Rights. It is in breach of the United Kingdom’s obligation under Articles 2 and 8 to ensure that its criminal law provides adequate protection for the rights to life and physical integrity. Those apply to all of us in society. I am sure that there are those on the government Benches who would cheer on any way of challenging the European Convention on Human Rights but that cannot be true of the Liberal Democrats who make up the coalition. I really want them to be mindful that this is disrespecting our commitments under the European Convention.

For those on my own Benches, I say with some pride that when the Labour Government sought to change the law in 2008—for I suspect equally unhelpful reasons—it was pointed out that they would run into difficulties with the European Convention on Human Rights. I am happy to say that they demurred. There is a letter in the public domain dated 31 January 2008 from the Lord Chancellor and Secretary of State for Justice at the time, the right honourable Jack Straw, to Nick Herbert, Conservative Member of Parliament. Mr Straw referred to the report of the then Joint Committee on Human Rights and pointed out that he—and the Labour Party—agreed with the committee’s analysis that for criminal law to permit the use of disproportionate force would provide for it to do something that was incompatible with Articles 2, 3 and 8 of the European Convention on Human Rights, which require the use of force to be proportionate. That was the position of principle of Labour at that time. I am sure that it will continue to be the position of Labour now—at least, I hope so.

I say to those on the other Benches: there is no need for the law to be changed on this. Our common law gives us the answer to these challenges to home owners, who deserve to be protected—absolutely—and should not be put in fear of being prosecuted. The law as it stands is absolutely adequate. I am afraid that this is politicking, not legislating.

[Lord Lloyd of Berwick]

My Lords, I entirely agree with the noble Lord, Lord Beecham, the noble and learned Lord, Lord Woolf, and the noble Baroness, Lady Kennedy of The Shaws. I remember well when the Criminal Justice and Immigration Act 2008 was going through this House that I was much concerned by Section 76. I have always thought that the piecemeal amendment of the common law by legislation was a mistake unless such amendment was preceded by a report from, in the old days, the Criminal Law Revision Committee or, nowadays, the Law Commission. I suggest that there are two grave disadvantages in the sort of piecemeal amendment we are now asked to perform. First, it deprives the development in the common law of the flexibility that the common law provides as circumstances change. Once you put it in statute it is in statute, and if it is to be changed at all it has to be changed by statute. Secondly, it may often be initiated as the result of a particular campaign—this may be an example of that—without regard to the wider context.

I did not in fact oppose Section 76 when it went through the House because it at least did not in any way seek to change the law on self-defence. That is made amply clear by Section 9 itself. Section 76 was in some ways an odd provision because it refers both in subsection (1) to the test being one of reasonableness and in subsection (6) to the test being one of disproportion—although those two things might be thought to be opposite sides of exactly the same coin. That will not be so from now on because of the addition of the word “grossly” before the word “disproportionate”. For that reason Section 9, which made it clear that the common law was not going to be changed, has now itself been amended to show that, in this respect, the common law is being changed. We are thus now doing exactly what I feared would be the result if we stratified the law as we did in 2008.

What is being done is defended on the basis that it is very difficult for the householder, in the agony of the moment, to make a nice judgment as to what is reasonable or is not. That has always been the law, as my noble and learned friend Lord Woolf has made clear. Speaking from my own experience, I have always stressed that very point. In that respect, this will not change the law but it will, in fact, change the law in the way that I have described. Just as judges have got used to directing juries in accordance with Section 76, they will now have to change tack, which they should not be required to do.

[Lord Pannick]

My Lords, the Minister said that householders should not be subjected to criminal liability because of the use of force which may appear disproportionate in the cold light of day, and that the amendment is designed to redress the balance. It is very important to identify precisely what the balance is at the moment and, as the noble and learned Lord, Lord Woolf, and the noble Baroness, Lady Kennedy of The Shaws, have said, the law is very clear on this subject. The official specimen directions to a jury—what judges up and down the land actually tell jurors on this subject—are contained in the Crown Court Bench book which says:

“When considering whether the defendant’s conduct was reasonable do bear in mind that the person who is defending himself cannot be expected in the heat of the moment to weigh precisely the exact amount of defensive action which is necessary; and in this regard, the more serious the attack (or threatened attack) upon him, the more difficult his situation will be. If, in your judgment, the defendant was or may have been in a situation in which he found it necessary to defend himself and he did no more than what he honestly and instinctively thought was necessary to defend himself, that would be very strong evidence that the amount of force used by him was reasonable”.

This provides all the protection that the householder needs or, indeed, deserves. The Minister did not refer to any cases of unjust convictions, or even unjust prosecutions that should not have been brought. The highest that the Minister put it in his opening remarks is that such cases “might conceivably” occur in the future. This is surely the weakest basis for proposing law reform that your Lordships will have heard for some time. Furthermore, I agree with the noble Baroness, Lady Kennedy of The Shaws, that these amendments are inconsistent with our obligations under Article 2 of the European Convention on Human Rights to protect the right to life. It is one thing to allow the householder to use proportionate force and to assess that on the basis of what they honestly and reasonably understand the facts to be at the time they act in circumstances of shock and distress. It surely is a very different matter for Parliament to authorise the use of disproportionate force.

With great respect, I cannot understand why the Opposition Front Bench is not opposing this amendment in the Division Lobby today, despite the noble Lord, Lord Beecham, eloquently explaining that the amendment would cause confusion and nothing positive. It is all very well to treat this as a Second Reading debate but it is the only opportunity that this House will have to oppose the amendment. I hope that the Opposition will reconsider their position. I am sure that many noble Lords would join them in the Lobby if a Division were called.

This amendment is unnecessary, unprincipled and inconsistent with our international obligations. I hope that the Government will think again.

[Lord Morris of Aberavon]

My Lords, I am sorry that I missed the beginning of the debate: I was engaged on other business. I support everything that has been said against this amendment. It is unnecessary and confusing, and will be inflexible. My experience is much more limited: I was a criminal practitioner who had to sum up in these kinds of cases on dozens of occasions.

On those occasions, I always would quote—I am grateful to the noble Lord, Lord Pannick, for giving us an account of the current sentencing preferred remarks by the Sentencing Council—a namesake, who is no relation although I knew him. Lord Morris of Borth-y-Gest used to say that in the heat of a moment, one cannot judge to a nicety the appropriate amount of force that is reasonable. That phrase used to be quoted in the sentencing remarks and was referred to by my noble friend Lady Kennedy.

In summing up, will the Minister enlighten us as to the form of words that would be used by a judge to sum up a situation where he is saying that a disproportionate amount of force can be used? I should like to know what those words will be. That would clarify the situation beyond peradventure. I fear that the Lord Chancellor is making up the law on the hoof and will rue the day if this becomes part of our law.

[Baroness Butler-Sloss]

My Lords, I, too, have been burgled and I have absolutely no sympathy with burglars, but this amendment goes too far. I am very concerned about proposed new subsection (5A), under subsection (2) of Amendment 113C, as regards using the words “grossly disproportionate”. As the noble and learned Lord, Lord Morris of Aberavon, has just asked, how on earth would one advise a jury—I am glad to say that I was not a criminal lawyer but I did a little crime—that you can be disproportionate but not “grossly disproportionate”?

I share the view of the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Pannick, that it is contrary to the European Convention on Human Rights. I believe it is a matter that would end up in Strasbourg if we were not extremely careful. The Government—I can see for the best of intentions—are just going too far.

My recollection about the Martin case, which I read only in the press, is that he was shot in the back, which would be “grossly disproportionate”. Obviously, one could see why he did not get the existing protection that the Lord Chief Justice has given and that is in the standard advice to juries, as the noble Lord, Lord Pannick, read out. We do not need to go further. To go further will cause real trouble.

[Lord Goodhart]

My Lords, I regret that I cannot support this new clause. I agree entirely with what the noble and learned Lords, Lord Woolf and Lord Lloyd of Berwick, and a number of other practising lawyers have said. I regard this matter as very unsatisfactory. I have not practised as a barrister in recent years but I practised in the past and this proposal is unsatisfactory.

16:59

[Lord Martin of Springburn]

My Lords, I speak as a layman who has represented communities in which the whole family cannot go out for a night’s entertainment because someone has to stay in for fear of being burgled. Like many noble Lords, I know what it is like to be burgled. You feel terrible when your home has been broken into. What worries me about the provision in this amendment is that in some historical cases firearms have been used. If this amendment is passed, many people who do not want their house to be broken into again will take precautions. In the countryside, people have firearms certificates for vermin and for recreational shooting, and I know that there are some firearms certificates in the city I represented because I had to sign certificates to say that the holder was a good, decent person. With this amendment, some people will want the same protection as someone living in the countryside and will apply for a firearms certificate just in case. That is a worry. There is a big difference between someone living on a small farm having a firearm and someone living in a tenement where it is much more dangerous.

I know from my experience in another place that Ministers, some of them the holders of the highest offices in the land, indulge in sound bites. They say to the press, “People are entitled to protect their homes”. Of course they are entitled to protect their homes, but we cannot have a situation where we give a licence to someone who will decide that he is going to take a shot at a burglar and will say that it was proportionate or that he did not think about it at the time.

Part of this amendment relates to Armed Forces accommodation—barrack rooms. We are talking not about shotguns but about far more lethal firearms. A soldier could say, “I was defending myself, and that’s why I shot this intruder”. I speak as a layman. I have no experience of standing in a court and putting a case or of listening to a case, as some noble Lords have, but I think this amendment is bad news.

[Lord McNally]

My Lords, this has been a very thoughtful debate, and people of great experience have put their views forward. I shall try again to explain where the Lord Chancellor is coming from and to reassure noble Lords on some of the points that have been made.

In bringing forward this amendment, the Lord Chancellor wants to clarify the situation and reassure the general public. Although the last contribution from the noble Lord, Lord Martin, was not in support of my proposal, it made the point that we are trying to deal with ordinary people dealing with situations in their lives. I understand lawyers making their points, but it is important that we see this from the public’s point of view. Although some recent cases have not led to prosecution and conviction, as I said, there may be cases in future which will benefit from the additional protection and clarification we are providing. Let me be very clear again, following on from what the noble Lord, Lord Martin, said, that this is not a vigilantes’ charter. In this country, there are still extremely strict rules about the possession and storage of guns which would still apply.

This is an attempt to recognise that people confronted by burglars, and acting in fear for their safety in the heat of the moment, cannot be expected to weigh up exactly how much force might be required. In these extreme circumstances, we think they should have greater legal protection. It is certainly not a licence to kill, whatever the circumstances. People will still be prosecuted if the use of force was unreasonable in the circumstances. The use of grossly disproportionate force will never be reasonable.

It will be for the courts to determine in each case what is disproportionate or grossly disproportionate. We want to make clear though that householders, who cannot always be expected to be thinking clearly if they are confronted by an intruder, will not be treated as criminals if they use a level of force which in the circumstances as they believed them to be is reasonable but turns out to have been disproportionate. We are clear that it is not open season for vicious attacks on anyone, even an intruder.

Let us also be clear, if somebody has been killed or seriously injured, an arrest may be necessary for the police to investigate thoroughly. A revised code of arrest for the police—PACE Code G—came into force on 12 November 2012 with new guidance on the circumstances in which an arrest may be necessary. The guidance also encourages the police to consider whether voluntary attendance at an interview might be a practicable alternative to a formal arrest. The changes we are making to the law will complement the improvements made to PACE Code G.

We are not changing the fundamental premise that a person can only use force that was reasonable in the circumstances as they believed them to be. The law on the use of force in other circumstances, for example, to defend oneself on the street, to prevent crime or to protect property will remain unchanged. We are trying to rebalance the law so that householders will not be thought of as criminals but, as I said at the beginning, quite properly as victims.

I am assured that we believe that the amendment is compatible with the ECHR and that we have recently published a memorandum in support of that view which I will put in the Library of the House.

Listening very carefully, I again pray in aid although I am not saying he is in support of this particular amendment, the Lord Chief Justice, who caught the mood behind the amendment at his press conference in September. He was reported as saying that,

“I am not talking about individual cases, but I know of cases, and I do read the newspapers occasionally”,

where,

“it looks as though the householder is the criminal”.

He then pointed out the circumstance of a householder facing a burglar.

“You are probably very cross and you are probably very frightened—a mixture of both—and your judgment of precisely what you should or should not do in the circumstances cannot, as another predecessor of mine (Lord Lane) said, you cannot measure it in a jeweller’s scale”.

The realisation that in such terrifying circumstances you cannot measure it in a jeweller’s scale led the Lord Chancellor to conclude that it would be better to clarify the law in a way which he believes will be more reassuring to the householder and give better guidance to the court.

[Lord Pannick]

Before the Minister sits down, have the Government consulted the Lord Chief Justice and the judiciary on this matter and, if so, what has been their response to the amendment?

[Lord McNally]

The amendment is a government amendment, and the Government stand by the amendment.

17:10

Division 1

Ayes: 206

---

Conservative: 125
Liberal Democrat: 54
Crossbench: 19
Ulster Unionist Party: 2
UK Independence Party: 1
Independent: 1

Noes: -1

---

Crossbench: 26
Labour: 18
Liberal Democrat: 5
Bishops: 1
Independent: 1
Plaid Cymru: 1

17:26

Amendment 113CA not moved.

Amendment 113D

Moved by

[Lord Avebury]

113D: After Clause 24, insert the following new Clause—
“Immigration appeals: asylum and humanitarian protection
(1) The Nationality, Immigration and Asylum Act 2002 is amended as follows.
(2) In section 83(1)(b) omit the words “Kingdom” to the end.”

[Lord Avebury]

My Lords, the new clause proposed by the first amendment in this group would remove the restriction whereby an appeal against the refusal of asylum can be brought only where the person has been granted leave to enter or remain for more than 12 months. Noble Lords will be aware that unaccompanied children who are refused asylum are granted humanitarian protection or discretionary leave for periods of three years or until they reach the age of 17, whichever is the shorter, on the basis that they cannot be sent back to their country of origin. Bearing in mind that the UKBA takes months and sometimes years to decide whether to grant humanitarian protection in lieu of asylum, the child might arrive at the age of 15 or even earlier, might be refused asylum at the age of 16 and might still have to apply for discretionary leave to remain for a period that would make the total more than 12 months before appealing against the refusal.

I take it that there are very few refusals of the extension of discretionary leave, as almost all unaccompanied asylum-seeking children will have had no contact with family in their country of origin and therefore will still be ineligible for return when they reach the age of 17. The effect of the provision in the 2002 Act is to delay the permanent settlement of these children in the UK, making it harder for them to access the whole range of public services, including further and higher education, so that their economic and social potential is less than it would be if and ultimately when they become permanent residents of this country.

My noble kinsman said on 4 July 2012, in col. 710, that it was an “unfortunate consequence” of the otherwise very sensible 12-month restriction. He gave an assurance that the policy as it affects children would be reviewed. I was looking forward to hearing the outcome of that review at this stage of the Bill. It seemed to me that the Bill could only confirm the unfortunate consequences, as my noble kinsman called them, and that the Government would explain how they would eliminate them. Instead, my noble friend Lord Taylor told me in a letter of 20 November:

“We have considered this matter very carefully and have concluded that no change in current practice is appropriate”.

He stated, quite inaccurately, as I see it, that the,

“amendment would undermine the intention of the existing appeals framework, namely, to prevent multiple appeals that result in significant cost to the taxpayer”.

Those who are recognised as refugees will not need any second appeal, but the children and trafficked persons in question will get no appeal at all until they face removal—something that, had their case been decided correctly at the outset, they would never have faced. My noble friend says that the young persons affected by Clause 83(1),

“are on the cusp of adulthood, and … the detrimental impact of any delay in an appeal right arising is less severe than it would be for children of a younger age”.

I think the opposite is true, because younger children tend to accept the situations they face as a result of adult decisions, but as they approach maturity they can recognise deliberate unfairness inflicted on them by authority. I would like to know whether my noble friend sought the advice of experts such as the Children’s Society before he expressed that opinion or whether it was ex cathedra.

Does his review cover trafficked persons, who are granted leave for one year following a determination through the national referral mechanism set up by the Government to identify and support victims of trafficking in the UK? That process was established in pursuance of the Government’s obligation to identify victims under the Council of Europe Convention on Action against Human Trafficking. Article 14 of the convention provides that a victim of trafficking shall be granted a residence permit, which will be without prejudice to the right to seek and enjoy asylum. That seems to imply that the 12-month residence permit granted to trafficked persons would not debar them from submitting an asylum claim. I look forward to hearing from the Minister how this can be squared with Section 83(1).

I turn to the second of the new clauses. The purpose is to remove the statutory presumption that a country other than a person’s country of nationality is a safe country to which a person seeking asylum can be removed simply because the Secretary of State asserts that it is a safe country. A safe country is one where the person will not be persecuted and from which he or she will not be refouled in contravention of the refugee convention or the European Convention on Human Rights.

Section 94 of the Nationality, Immigration and Asylum Act 2002 establishes a scheme whereby persons seeking asylum may be precluded from a right of appeal against the refusal of asylum unless and until they have left the UK, including where this may mean returning to their home country or to a third country that the Secretary of State asserts to be safe. Schedule 3 to the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 limits what the asylum seeker can argue on a judicial review about the safety of the third country.

Section 94(8) creates a statutory presumption that, when the Secretary of State asserts that a country other than the person’s home country is safe, it is presumed that in that country the asylum seeker will not face persecution for a refugee convention reason and will not face being returned to a country in which he or she does face persecution for a refugee convention reason. The statutory presumption seeks to oust the jurisdiction of a court to consider the correctness of the Secretary of State’s opinion as to the safety of such a country.

The provisions of Schedule 3, which the new clause proposes to delete, require a court dealing with a judicial review relating to a removal to make presumptions of safety. For example, paragraph 3(2) states:

“A State to which this Part applies shall be treated, in so far as relevant to the question mentioned in sub-paragraph (1), as a place … where a person's life and liberty are not threatened by reason of his race, religion, nationality, membership of a particular social group or political opinion”.

In the case of NS, the claimant asylum-seeker had sought judicial review of his third country return to Greece. Whereas the Administrative Court in England and Wales had been concerned as to the conditions in Greece, it considered itself bound by previous authority to uphold the UK Border Agency decision to return NS to Greece. The Court of Appeal referred the matter to the Court of Justice of the European Union. That Court concluded, in the context of European Union arrangements for safe third country returns within the European Union, under what are often referred to as the Dublin Regulations, that,

“to require a conclusive presumption of compliance with fundamental rights … could be regarded as undermining the safeguards which are intended to ensure compliance with fundamental rights by the European Union and its Member States. That would be the case, inter alia, with regard to a provision which laid down that certain States are ‘safe countries’ with regard to compliance with fundamental rights, if that provision had to be interpreted as constituting a conclusive presumption, not admitting of any evidence to the contrary”.

The presumptions in Section 94(8) and the paragraphs of Schedule 3 seek to be such provisions, and accordingly ought to be removed.

Greece is not the only safe country where these presumptions may be unfounded. Section 94 allows the Secretary of State to list not only countries that are safe, but countries that are safe for a given description of persons. Thus a number of African countries are designated as safe for men, so that women threatened with return to those countries still have an in-country right of appeal. However, lesbian, gay, bisexual and transsexual people, who suffer relentless cultural, social and even legal pressures and persecution in more or less the same list plus Jamaica, have no such right.

In the case of HJ (Iran) and HT (Cameroon), which was dealt with in the Supreme Court in 2010, the noble and learned Lord, Lord Hope, spoke about the,

“rampant homophobic teaching that right-wing evangelical Christian churches indulge in throughout much of Sub-Saharan Africa”.

It was lucky for HT that he did not come from one of the countries designated as safe such as Malawi where, as the noble and learned Lord, Lord Hope, pointed out, two gay men who celebrated their engagement had recently been sentenced to 14 years in prison. If those men had sought asylum in the UK, their claim would have been treated as unfounded and they would have had no right of appeal. Curiously enough, two lesbians in the same circumstances would have had a right of appeal, since Malawi is treated as a safe country for men only in Section 94.

If the Government are not prepared to accept this amendment, the least they could do is to make the list in Section 94(4) correspond with the reality of persecution on account of sexual orientation as well as gender, which can be done by order. My noble kinsman replying to a similar amendment at Committee, claimed that an appeal after removal was a satisfactory remedy for those removed to a “safe country”. Could the Minister tell your Lordships how many people who were removed after claiming asylum from a supposedly safe country on the basis of their sexual orientation managed to appeal from abroad, and in how many of those cases they were successful? I know that the Government are very well aware of the widespread persecution of LGBT people, so I assume that they will have kept records of these cases, although I do not expect the Minister to be able to produce them on the spot.

I turn to the third new clause. The purpose is to ensure that an appeal is not treated as abandoned when leave to remain is granted to the appellant. The situation at the moment is that under the provisions sought to be left out of Section 104 of the 2002 Act, this happens automatically, and the result is that the tribunal is prevented from reaching judgments on points of principle that are dealt with in the case. It can happen that a series of cases, all turning on the same principle, are aborted by the Secretary of State in this way, contrary to the interests of justice.

In the case of Osman Omar, the judgment handed down on 29 November 2012 by Mr Justice Beatson addressed this issue. He resisted attempts by the Secretary of State to argue that the claim was redundant in that she had already granted the claimant further leave to remain. He ruled, in effect, that the Secretary of State cannot keep knocking cases out by settling them on the facts and refusing to litigate on the point of principle. As Mr Justice Beatson said:

“The substantive issue raised by the claimant is an issue which arises regularly. It arose in Francis. It will arise in the case of Ahmed ... which, as I have stated, is listed for hearing at the end of January 2013”.

Therefore, the challenge in these particular cases is to the vires of the regulations, which provide for a fee to be payable for an extension of discretionary leave, but with no discretion for the Secretary of State to waive it in the case of an applicant who seeks leave on human rights grounds but cannot afford the fee because he is either destitute or in receipt only of NASS support. I hope the Minister will agree that it is important for this question to be determined, and that in cases of this kind, it is common sense to leave the matter to the tribunal. I beg to move.

[Lord Beecham]

My Lords, I have a good deal of sympathy with the noble Lord’s first amendment, but am not perhaps quite as persuaded by the subsequent amendments. However, in any event I pay tribute to the noble Lord, Lord Avebury, for his consistent concern with the problems of a particularly vulnerable group in our society and his very powerful advocacy on their behalf. He has obviously seized the opportunity to bring that concern into this Bill. I object less to that spatchcocking than I did to the previous amendment moved by the Minister in relation to burglary, but perhaps it is not the best forum in which to take these matters forward. I hope that the Minister can go a little further than he appears to have done in correspondence with the noble Lord and at least indicate that this whole area should be reviewed. It is some time since we have had a proper debate around the particularly delicate issues to which the noble Lord referred. While it is probably the case that this is not a matter to be voted on today, it should not be neglected indefinitely and ought to be considered.

Perhaps the Minister could indicate that discussions, not in respect of Third Reading but more generally, could take place around these and allied issues in connection with asylum and immigration matters where they impinge on the presence or otherwise in our country of people who have fled persecution and danger elsewhere, in a context that is outside the legislative framework for the time being. That might be a way forward in which a broad consensus could be reached across the House rather than dealing with it in terms of the amendments that are before us today. Again, I pay tribute to the noble Lord for raising these matters. I hope that can be seen as a first step and not the last step in a process of looking at the issue.

[Baroness Hamwee]

My Lords, I support my noble friend and add one further thought. In terms of public awareness, I have heard it said that these issues are now at about the same stage that domestic violence was about 20 years ago. I think that there would be a good deal more public understanding and sympathy for the sorts of changes that my noble friend has advocated even than there might have been four or five years ago. I think that the public mood is moving somewhat on this. It would be nice for the Government to be ahead of the public mood.

17:42

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, I cannot promise my noble friend that the Government can be ahead on these issues but I am grateful for the opportunity to debate his amendments. I assure the noble Lord, Lord Beecham, that the Government keep the workings of the asylum process under review. Indeed, it would be wrong not to do so.

Amendment 113D would create a right of appeal whenever someone is refused asylum and granted any form of leave. As a result there would be more appeals against a refusal of asylum for a group of cases where no immediate right currently exists, and multiple appeals from individuals.

As my noble friend Lord Henley acknowledged in Committee, it is an unfortunate consequence of the otherwise very sensible 12-month restriction that some unaccompanied asylum-seeking children will experience delay in bringing an asylum appeal. My noble friend agreed to review the policy in respect of children to ensure that there were no unintendezd consequences. We have completed that review and concluded that this policy, seen in the context of the statutory appeals framework and current economic circumstances, operates as intended. As my noble friend has said, I have written to him to confirm this.

This amendment is to Section 83 of the Nationality, Immigration and Asylum Act 2002, which provides that an individual may appeal against an asylum refusal when leave is granted for a period longer than 12 months. Amendment 113D would remove the 12-month restriction and create a right of appeal against the refusal of asylum regardless of the period of leave granted. It is not unusual for short periods of leave to be extended more than once. Recent case law means that this amendment could create a right of appeal against the earlier refusal of asylum every time further leave was granted. Therefore, this amendment would have serious and undesirable consequences for the existing appeals framework as it could result in multiple fruitless appeals being used to prolong someone’s time in the UK. In the current economic circumstances, it is vital that resources are used where they are most needed. While I recognise that the intention of this amendment is to reduce delay for children and trafficked persons, the consequences for the appeals framework are not justified for the following reasons.

First, the amendment is too broad. It would extend the right of appeal under Section 83 of the 2002 Act to anyone granted leave after a refusal of asylum, not just children and trafficked persons. This would result in additional costs and resources to administer each appeal. Secondly, only a minority of unaccompanied children who claim asylum are affected by this policy in the way described by my noble friend. It would affect only those who are older than 16 and a half when refused asylum but granted some other form of leave. As we have said, these children are close to adulthood and have a right of appeal should a decision be taken to remove them after their leave runs out at age 17 and a half. This delay is not unreasonable.

Thirdly, while it is correct that trafficked persons are similarly affected, for similar reasons to those we have given in relation to children we believe that the current policy may be equitable in all the circumstances. Section 83 of the 2002 Act affects only those trafficked persons who claim and are refused asylum. It is important to remember that in all cases before a child or any trafficked person is removed from the UK, they will be entitled to a right of appeal. The Government’s policy ensures that individuals do not have multiple appeal rights over a brief period, possibly raising the same arguments on each occasion as matters may not have evolved since their last appeal. The amendment proposed would undermine this key principle of the Secretary of State’s asylum appeals framework. For the reasons set out above, we are not persuaded that the current policy for appeal rights under Section 83 of the 2002 Act, either for children or more generally, has an impact of the magnitude necessary to justify incurring additional expense in relation to appeals.

Amendment 113E concerns the Secretary of State’s powers to certify, under Section 94 of the Nationality, Immigration and Asylum Act 2002, that removing a person to a safe third country will not breach their human rights where the presumption is that the country to which the person is to be removed is safe. The effect of the certificate is that an appeal can be brought only after the person has been removed. This provision prevents appeals being used to delay removal in hopeless cases. Persons will be removed to a third country only if that country will not remove the person to another country other than in accordance with the refugee convention. If the certificate is challenged by judicial review, the court is required to regard the third country as one where the person’s rights under the refugee convention will not be breached.

Amendment 113E is tabled on the basis that Section 94(8) seeks to oust the jurisdiction of a court to consider the safety of the country of removal. It is, however, unnecessary. The courts are already able to consider whether the person’s human rights might be breached where judicial review challenges the issuing of the certificate. Once removed to the third country, an appeal may be brought and refugee convention issues can be considered. My noble friend asked for some detail here, and I will have to accept his very kind offer to allow me to write to him to give him a response to the data he was seeking.

Amendment 113E also seeks to remove those provisions in Schedule 3 to the Asylum and Immigration (Treatment of Claimants etc.) Act 2004 that reduce the circumstances in which removal to a safe third country can be frustrated on the grounds of unmeritorious claims about treatment in, or removal from, those countries. The amendment would have a considerable practical impact on removals made to other European countries under the Dublin regulation. That regulation determines which state is responsible for examining an asylum claim. It plays a key role in tackling abuse of asylum systems through the phenomenon of “asylum shopping”. Indeed, the value of the Dublin regulation to the UK is clear. Since 2004, the UK has been able to remove more than 10,000 individuals under the Dublin regulation.

It is argued that the amendments are necessary to reflect the terms of the ruling of the Court of Justice of the European Union in the case of NS v Secretary of State for the Home Department, dated 21 December 2011. My noble friend referred to this case. The Government respectfully disagree. The ruling in NS gives useful guidance on the correct approach to fundamental rights as a matter of EU law. However, as a matter of practice, it does not significantly change the approach to domestic legislation. The concept of a rebuttable presumption in legislation when considering the impact of the Human Rights Act is not new. It was firmly established by existing case law from the European Court of Human Rights in KRS v UK in 2008 and from the House of Lords in Nasseri v Secretary of State for the Home Department in 2009. What the Luxembourg court has done in NS is confirm that a similar approach should be taken when it is alleged that there is evidence of the Charter of Fundamental Rights being breached.

I turn, finally, to Amendment 113F. The effect of this amendment would be to allow an appeal to proceed where the appellant has been granted leave by the Secretary of State. The purpose of many appeals is to overturn a decision to refuse to grant leave. Consequently, it is the Government’s position that in the majority of cases an appeal should not proceed where leave has been granted. Currently, Sections 104(4A) to 104(4C) of the Nationality, Immigration and Asylum Act 2002 provide that an appeal cannot proceed where the appellant has been granted leave. The exceptions are where the appeal is brought on the ground of race discrimination or where the appeal is against a refusal of asylum and the leave which has been granted is in excess of 12 months. This is consistent with Section 83 of the Nationality, Immigration and Asylum Act 2002, which was the subject of Amendment 113D. Where the appeal does not fall into these two groups, we do not believe it is necessary or appropriate for it to proceed where leave has been granted. The appeal is unnecessary because leave has already been granted. There is no detriment caused by the absence of a right of appeal which will be cured by this amendment. However, making this amendment would have a detrimental impact as additional rights of appeal would arise, each of which represents an additional cost to the Government and the taxpayer. The increased number of potential appeals will place an additional burden on the tribunal and court systems, which are already dealing with significant numbers of immigration appeals.

We do not believe that preserving an appeal right where leave has been granted is necessarily appropriate. Frequently, the Secretary of State makes a grant of leave while an appeal is pending for pragmatic reasons. This avoids unnecessary litigation at a cost to both parties. Where leave has been granted, an appeal can proceed only on an academic, rather than an individual, basis. The tribunal is primarily a fact-finding tribunal and therefore it is not appropriate for a case to proceed before it on an academic basis only. In light of these points, and in the knowledge that I will continue to work with my noble friend and respond to his questions on this issue, I would ask him to withdraw the amendment.

[Lord Avebury]

My Lords, I am most grateful to my noble friend the Minister for his thorough reply to these three amendments, although—as he would expect—I cannot say that I am entirely satisfied with his response. In the case of Amendment 113D, he did not go into the consequences of giving limited leave to remain to unaccompanied children and trafficked persons—a matter which I tried to outline in moving this amendment. There is room for further examination, and if he is prepared to let me have sight of the review that was undertaken, that would be the most helpful basis on which we might proceed.

As he will have realised, these amendments were all framed by the Immigration Law Practitioners’ Association and it, too, would like to be consulted in any review that will be undertaken in the future on the implications of the present situation for these unaccompanied children and trafficked persons granted limited leave to remain. My noble friend said that the amendment was too broad; we would be perfectly happy if, as a result of further discussions bringing in the legal advice of ILPA, we could agree on a more limited version of Amendment 113D.

With regard to Amendment 113E, removing someone to a supposedly safe third country does not eliminate the right of appeal, but if you have to exercise the appeal from an overseas country with all the disadvantages that that entails in the way of consulting lawyers, obtaining written statements and so on, the right is really not worth very much. The cases we considered mean that the designation of safe third countries is not a satisfactory way of proceeding, particularly when one considers the position of LGBT asylum seekers. I mentioned them in my remarks, but the Minister did not touch on them in his reply. I realise that I was asking for detailed information about what has happened to LGBT asylum seekers who were returned to supposedly safe countries. Maybe we can review the situation once we have that information in front of us.

On Amendment 113F, I mentioned the remarks of Mr Justice Beatson and thought that maybe my noble friend would not have had time to consider that judgment. Perhaps we can pursue the matter in more detail later. He did not respond to the point that, by granting leave to remain in a series of cases that touched on the same matter of principle, the Secretary of State was avoiding any resolution of the matter of principle, which would be helpful in cutting short proceedings of the tribunals in later cases. Therefore, I do not accept what my noble friend said about the saving of time in the courts; I think the reverse is probably true, but again, perhaps we can leave this for further discussion with the benefit of advice from ILPA at a later date. In the mean time, I beg leave to withdraw the amendment.

Amendment 113D withdrawn.

Amendments 113E and 113F not moved.

18:00

[The Deputy Speaker (Viscount Ullswater)]

Before I call the next amendment, I wish to announce that in the Division on Amendment 113C, there voted Not Content 55, not 54 as announced.

Schedule 16 : Super-affirmative procedure

Amendment 113G

Moved by

[Lord Ramsbotham]

113G: Schedule 16, page 250, line 34, leave out from beginning to end of line 19 on page 251

[Lord Ramsbotham]

My Lords, I was concerned that timing might be against us getting to this point this evening, because I have an unavoidable engagement to which I must go. Having looked at what was said on the amendments in this group, both at the recommitment and in Committee, I do not feel that there is much more that I need to add. My concern about what is included in the section that I am seeking to have removed is that it is based on perception and not on fact. For example, I learn today that 50% of all cases involving violence are now dealt with outside the courts, which suggests that there is some confusion over where violence should be dealt with. I am very concerned that the word “punishment” should be added like this, because from talking to magistrates and others I know that they are already quite clear what their duty is in terms of the sentences that they have to impose. What we are talking about here is not so much the need to add this initiative to sentencing but looking at and seeing what is actually done with and for those people who receive the sentence.

As I have said before, we are in the dark here because we simply do not know what the Secretary of State has in mind. We have not yet seen the terms of the government response to the probation consultation. We understand that there are going to be commissioners all over the country commissioning community sentences, although we do not know whether they are going to come from the probation service, the voluntary sector, the private sector or whatever. We are in the dark and, frankly, I think it is a great pity that something like this should be left in such an imprecise state. That is why I wish to see the thing removed. There is so much work to be done in this area. Anything that needs to be done should be brought back after further work on the whole area, including study of the probation consultation, has taken place. I beg to move.

[Lord Rosser]

My Lords, we have an amendment in this group. It is interesting that the Government’s response to the consultation on effective community sentences states:

“We will legislate to place a duty on courts to include in the community order a requirement that fulfils the purpose of punishment for the offender. The court will be able to exercise this duty by imposing a fine instead if it considers that to be appropriate. While we will not specify what requirements courts should impose, on the basis that what is punitive for one offender may not be punitive for another, our expectation is that these would generally be restrictions of liberty that represent to the public a recognisable sanction (such as curfews, exclusion, or community payback). The duty will provide for an exemption in exceptional circumstances where it would be unjust to impose a punitive element”.

The Government’s response refers to restrictions of liberty such as curfews, exclusion or community payback. The use of the words “such as” implies that a court could impose other requirements that would be regarded as restrictions of liberty. Can the Minister confirm if that is the case? What might the other restrictions of liberty be that would be regarded as punitive? Will he also confirm that if a court imposed as a punitive element something other than a curfew, exclusion, community payback or a fine, that would not be regarded as acting outside the terms of this Bill?

The Government’s response to the consultation on effective community sentencing also refers to a punitive element being a restriction of liberty that represents, to the public, a recognisable sanction. Who is to determine what represents to the public a recognisable sanction? Will it be for the court to decide? If it decides that a punitive element is something other than a curfew, exclusion, community payback or fine, will the court, whether the original court or an appeal court, be regarded as having acted outside the terms of the Bill?

Even the Government’s own response to the consultation states that nearly all respondents indicated that offenders with mental health issues should be excluded from a mandatory punitive element and that many suggested that offenders with learning difficulties, those unable to carry out a punitive requirement because of poor health or addiction, those with personality disorders and young adults with low maturity should also be excluded. Does the Minister also hold that view, and would the number of such offenders exceed the 5% that it has been widely suggested would be the percentage the courts might feel able to regard as covered by the definition of “exceptional circumstances” laid down in the Bill and thus exempt from the Government’s definition of a punitive element?

One rather assumes that the Government’s approach is conditioned by the kind of recent statement made by the Secretary of State for Justice, that he shares public concern that offenders given community sentences often feel they are getting away with it; that they have been slapped on the wrist rather than properly punished. However, if that is the case, who is it giving that impression to the public other than politicians who make statements like that rather than spelling out just what a community sentence is? Two-thirds already include a punitive element, on the Government’s apparent definition.

Published research on short custodial sentences found that many prisoners preferred short sentences over community sentences because they found the latter more challenging. Does the Minister agree or disagree with those findings by the Howard League? Why does he take the view that a rehabilitation element in a community order cannot be at least as challenging to an offender, if not more challenging, than the Government’s version of what constitutes a punitive element?

For someone who has an addiction, learning difficulties or low maturity, or has led or been allowed to lead a thoroughly dysfunctional and disorganised life, having to face up to the realities of their lifestyle or situation through a challenging programme that they have to attend at specific laid-down times as instructed and co-operate with, or else risk being taken back to court and sentenced in another way, is at least as difficult as doing community payback or paying a fine related to their means. Yet that apparently is not the view of the Minister. Perhaps he could explain why that is not his view. I hope that he will be able to get a bit further than telling us it is because that is not the view of the tabloid press.

If the current position were changed and virtually all community sentences included a punitive element along the lines that the Government appear to be trying to enforce, does the Minister accept that that could be at the expense of rehabilitation elements in a community order? If a punitive element had to be included in an order that currently incorporates what the Government regard as only a non-punitive element, will the Government be providing additional resources to the probation services to cover the cost of this additional requirement, or will probation service budgets be left as they are so that, in order to remain within budget, those services may have to drop the rehabilitation element from the order to enable the cost of the additional punitive element to be paid for within the laid-down budget? What reassurances can the Minister give that this will not happen? The loss of the rehabilitation element in the order where deemed necessary will not contribute anything towards reducing reoffending.

The fact that the Minister does not appear to regard community order requirements involving challenging programmes for rehabilitation as at least on a par, in terms of restrictions on liberty and difficulty for offenders, with unpaid work in the community, a curfew or a fine—which are about the only things the Minister regards as in any way imposing a restriction on liberty—is a step backwards and simply seems to confirm, not challenge, the view that community orders are “soft”. Where unpaid work, a curfew or a fine is appropriate, that is what the offender should be given, but not where it would be inappropriate. The reality is that the Minister has decided that in some 95% of cases involving a community order as a sentence, unpaid work, a curfew or a fine is appropriate. It is usual to hear the facts of a case before coming to a conclusion on what is the appropriate sentence, but that is not what the Government are doing as they seek to specify what must be included in a community order in 95% of cases.

The Government appear to have lost confidence in the courts at a time when crime is falling, without explaining why, other than their own unwillingness to challenge the perception they believe the public hold that current community orders are soft. The reality is that the most important thing the public want to see delivered by a sentence is a reduction in reoffending, and an end to reoffending by the offender. I hope that even at this late stage the Minister will be prepared to change his stance, or at least review it, and support my amendment, which includes a range of existing programmes and orders as being within the Government’s punishment requirement in the Bill.

[Lord Woolf]

My Lords, I have difficulty with these provisions, for very much the same reasons as my noble friend Lord Ramsbotham and the noble Lord, Lord Rosser.

I have put forward amendments myself because I feel that if we are not going to have the clean solution proposed by the noble Lord, Lord Ramsbotham, of just getting rid of these provisions—which would certainly achieve everything I want—we have to try more delicate and specific surgery to produce something that the courts can apply practically. To an extent, the amendment in the name of the noble Lord, Lord Rosser, helps in that regard, so as an alternative I would be prepared to accept that.

To clarify my reasoning, proposed new subsection (2A) of Section 177 of the Criminal Justice Act 2003 reads:

“Where the court makes a community order, the court must … include in the order at least one requirement imposed for the purpose of punishment”.

Whether the requirement is imposed for the purpose of punishment or for some other purpose is presumably to be decided by the judge. Under our law, once a person has been convicted, it is the judge’s task to decide what punishment is appropriate. If he comes to the view that it does involve punishment, I would like the Minister to confirm—if I am correct—that the view of the judge will be respected and it is not suggested by the Government that that is a matter with which a higher court would interfere. On the other hand, if that is not so and the decision as to whether the requirement has been imposed for the purposes of punishment is to be made objectively, I would like the Minister to assist me as to what criteria it is to be judged by. If I were that judge, my ordinary reading would be that as these community sentences are imposed as part of the sentencing process, they are all part of the punishment that the court considers appropriate.

My general contention is that we have to have clarity as to what is to happen. Assuming what I have said is not right, who determines the punishment? Does the defendant who is banned from attending a football match determine it or does the court? I am happy to see that the Minister may well be agreeing with me—at least on that matter—but if it is the court, that must be clearly set out.

18:15

If that is so, what we have to deal with is how to apply “exceptional circumstances”. If the judge thinks it is a punishment, presumably he never gets involved in the question of whether or not there are exceptional circumstances. If he takes the view, which I am suggesting that he could well take, that all community sentences are in fact a punishment because they involve the defendant doing something that he has no choice about, I cannot how see how “exceptional circumstances” fits in. That is part of the explanation for the first amendment that I propose, which is to leave out of the Bill the whole requirement that there should be exceptional circumstances. The schedule would then read:

“Subsection (2A) does not apply where there are circumstances which … relate to the offence or to the offender … would make it unjust in all the circumstances for the court to comply with subsection (2A)(a)”.

If the suggestion is that it is for the judge to determine, the word “exceptional” and the provisions of proposed new subsection (2B) are superfluous.

The other amendment in my name in this group is Amendment 113GB, which would insert:

“Subsection (2A) does not apply where in the opinion of the court compliance with that subsection would reduce the likelihood that the order will prevent reoffending by the offender”.

The purpose of the amendment is to deal with a situation where, if something has to be done that the judge thinks would not be appropriate because of the earlier provisions and which would make it more likely that the offender would reoffend than otherwise, again that means that the subsection does not have the effect of limiting the judge’s discretion.

I should have indicated that I have proposed these amendments with the support of the Prison Reform Trust, of which I am chairman. The Prison Reform Trust strongly supports the position of the Government in seeking to reduce reoffending. Its regret about the language used in the schedule, without the amendments to which I have referred, is that the Government’s good intentions will be defeated by language, if that language were to be read in a way that meant that the judge was required to impose a sentence which he did not consider justice required to be imposed upon an offender.

[Baroness Hamwee]

My Lords, I have Amendments 113GZB and 113GC in this group, to which my noble friend Lady Linklater has added her name. These also deal with the term “exceptional” and with the application of the section in the Criminal Justice Act 2003 that provides for the court to have regard to the purposes of sentencing, which are listed as:

“the punishment of offenders … the reduction of crime (including its reduction by deterrence) … the reform and rehabilitation of offenders … the protection of the public, and … the making of reparation”.

I do not seek these amendments to exclude punishment from the matters to which the court must have regard and I acknowledge that society must deal with offenders in such a way as to win and retain the confidence both of victims and the general public. However, I cannot extrapolate from the research referred to in the impact assessment that where there is a punitive element, there is less reoffending.

Reading through the impact assessment yesterday, it struck me that the sentences in question, which the impact assessment prays in aid, will have been tailored to the offender by the court. In other words, they will be much more bespoke than it seems we are being asked to agree. Certainly, there is no comparison with a control group. Almost by definition, there cannot be a control group in these circumstances. We are told in the impact assessment that the rationale for intervention is to give tools to sentencers. As we have heard—not only tonight—we already have an extensive toolbox and we are adding to it with the welcome provisions on restorative justice. However, the theory of having certain tools available and their availability in practice may not always be quite the same. Public confidence comes from reducing reoffending and crime overall and we have heard what victims want. At the last stage of the Bill, I referred to research by the Restorative Justice Council and Victim Support, which amounts to victims wanting to be sure that “he does not do it again”.

The impact assessment also acknowledges that because community orders must be,

“proportionate to the offence committed, delivering a clear punitive element to every community order may, in some cases, cause certain requirements to be substituted by punitive ones”.

This worries me greatly. The Government tell us that some requirements may be labelled punitive, but in fact would be rehabilitative or become rehabilitative. The Minister used the example of requiring someone to get up every morning to go to an educational course. By the end of it, that person might have found it was a good thing, so it will have moved from punishment to rehabilitation. As I have said before—and I do not resile from this—I find both the possible substitution and the labelling worrying: for instance, labelling education or mental health treatment as punitive. The noble Lord, Lord Rosser, has spoken to his amendment, listing the types of community order which may amount to punishment. I depart from others on this because I do not think that saying the punishments “may include” takes us a lot further forward. If it is to send a message to the sentencers, then the new subsection (2A) sends a stronger message, in effect saying that a fine is not a punishment. I realise that we did not focus much on this at the last stage.

Without spending long on this, I very much support Amendment 113GB from the noble and learned Lord, Lord Woolf. This expresses what I for one have not been able to articulate previously. At the last stage and on other occasions we have talked a lot about the characteristics of offenders and their circumstances. We know about mental health problems and substance abuse, which so often underlies them. Other noble Lords will have seen a new report from the Criminal Justice Alliance, drawing attention to the mental health treatment requirement and its underuse. That is a pity, because the very prevalence of mental health problems means such an offender is not exceptional. In Committee, the Minister stated that,

“the courts can tailor any of those requirements to ensure that they do not have a disproportionate impact on offenders”.—[Official Report, 13/11/12; col. 1428.]

I do not entirely follow how the “tightly defined threshold”—as he described it—ensures that the requirements do not have “a disproportionate impact”. My logic is too confused even for me, but I did not quite follow the argument.

The Minister also stated:

“Nothing in the Bill seeks to undermine the judgment and flexibility of the judiciary, but it puts rehabilitation as a key objective”.—[Official Report, 13/11/12; col. 1429.]

Surely it must affect the hierarchy of sentencing purposes and principles and therefore affect the court’s flexibility.

The noble and learned Lord referred to using delicate surgery on the clause and his scalpel has excised the word “exceptional”. As an alternative, my term “particular” is drafted in the hope that in presenting the Government with a menu, they might be tempted to choose one of them instead of rejecting everything. It is a little less extreme than complete deletion, but the noble and learned Lord’s point about criteria is, of course, the important one.

My Amendment 113GC also refers to Section 142 of the Criminal Justice Act, to which I have already referred, about purposes of sentencing. At the last stage my noble friend gave an assurance, saying:

“Let us be clear: of course the five principles are intact”.

However, he went on to say,

“why bring legislation if we do not intend to change things?”

Hansard then reports him as saying:

“We do intend to chance things”.—[Official Report, 13/12/12; col. 1432.]

I do not think it meant that.

My noble friend twice said that it was “not the Government's intention” to,

“jeopardise the prospect of rehabilitation”,

or to,

“detract from the court's existing obligation to have regard to the five purposes”.—[Official Report, 13/11/12; col. 1435.]

It may not be the Government’s “intention”, but I fear that the words of the Bill detract from the five purposes and create a hierarchy. They would require the courts to bring a different approach to sentencing and—as I have already said to the Minister outside the Chamber—I hope that at least he can put on the record some further assurance that is firmer than saying it is “not the Government’s intention” and persuade your Lordships that these words do not do what I fear.

[Baroness Butler-Sloss]

My Lords, I must first apologise for not being present at the beginning of this part of the debate. I cannot see the point of Part 1 of Schedule 16. It really is not necessary. It owes more to the requirement of Government for the perception of the public and the press rather than the reality that a community order is in fact a punishment. I said this at greater length in Committee, so I will not go into it now. A community order is undoubtedly a punishment if it requires somebody to do or not do something, is compellable and the failure or refusal to do it has criminal sanctions. To distinguish between one sort of punishment or another is a really impossible situation. Some punishments will be more severe than others, there is no doubt about that, but the Government are pandering to perception rather than looking at the reality of what the judges and magistrates are doing.

18:30

There is one particular issue: I strongly support the noble and learned Lord, Lord Woolf, on the word “exceptional”. I do not really mind whether the noble Baroness, Lady Hamwee, gets “particular”—I do not mind what the word is—but I must tell the Minister that the effect of “exceptional” will be treated by judges as meaning “exceptional”. That is, I gather, what is wanted. That means that anybody suffering from mental health issues—a very large number of people commit crimes and come through the courts who suffer from mental health issues—will not be treated by the courts as exceptional because they are standard. One only has to look at the prisons and the people coming through the courts to see the number of people with drink, drug or mental health problems who cannot be dealt with under subsection (2B) because what is happening to them is not exceptional. Whatever the Minister may say, he must listen to the fact that the word “exceptional” will be treated by the judges and the magistrates as “exceptional”. In conclusion, the whole of Part 1 of Schedule 16 is not needed but, if it is to come in, at least take out the word “exceptional”.

[Baroness Linklater of Butterstone]

My Lords, I add my voice in agreement with much of what has already been said. What my noble friend Lady Hamwee did in drawing our minds back to the Criminal Justice Act 2003 in particular was very helpful for the purposes of sentencing. The noble and learned Lord, Lord Woolf, speaks words of wisdom and we should pay serious heed to him. He pointed out that the overarching requirement of a sentence should be decided by the judge on what is appropriate. Ultimately, I suppose that it follows that it should prevent reoffending and if the punitive element fails to meet that test it is worthless. As was made clear when we debated this in Committee, every community order is a form of punishment so the punitive element that the Government seek is de facto present. Anything additional intended to be somehow more punitive for its own sake is unnecessary, except possibly as a political gesture, and it will fail the test of reducing reoffending anyway. As the noble and learned Baroness, Lady Butler-Sloss, said in Committee, it is also “profoundly unattractive” as an idea. I liked that term very much.

The Minister has got it wrong if he believes that this is what the British public want to see happen. Indeed, there is ample evidence to show from polling that what the British public want from sentences, particularly expressed by those who have been victims of crime, is that it does not happen again. Retribution or vengeance is not sought. The Government maintain that the caveat of “exceptional circumstances”, when a specifically punitive order can be dispensed with, is tightly defined. Yet we have just spent the last 20 minutes realising that nobody can define what it is sought—the definition cannot be pinned down. This was emphasised by the noble and learned Lord who found in the past that use of “exceptional” caused nothing but confusion—he said so eloquently. For the large number of offenders for whom there is an additional punitive requirement, this may be inappropriate and even increase the likelihood of breach and so on.

The reality of a purely punitive requirement on its own principally represents the Government’s gesture of what Chris Grayling said was putting punishment back into sentencing. That is what it comes down to. It interferes with the freedom of sentencers to set an appropriate sentence based on the facts. That is a serious deficiency. We undermine judicial discretion at our peril. It also fails to safeguard those defendants with particular support needs, whether those are mental health, health needs, learning difficulties, drug addiction et cetera, to name but a few. Of course, the fact is that it is precisely this range of such support needs that represents the norm in the prison population. They are not exceptional at all—exactly what the noble and learned Baroness, Lady Butler-Sloss, just said.

To impose a punitive requirement when the offender has these difficulties without also addressing the problems constructively would clearly be unjust. I could go on further but I will finish by saying that there was very important and interesting work done for the Government by Helen Bewley. She concluded that in fact punishment probably means a curfew, a fine or unpaid work. Her work demonstrates that punitive requirements on their own have no impact at all on the likelihood of reoffending but simply reduce the number of reoffences committed. The most effective outcome was from a combination of supervision with another requirement, with a punitive element added on. If the Government themselves acknowledge the risk that undermines the very rationale for such punitive orders, particularly if used on their own, how on earth can their use in every community order possibly be justified? Indeed, the likelihood instead is more offending, breaches and a generally less safe society—the very antithesis of what is intended.

[Lord McNally]

My Lords, sometimes I think that debates in this House are like two flotillas of ships passing in fog and not noticing each other. Most of the debate we have heard tonight we heard at Second Reading and in Committee. I can only again express my surprise at noble Lords who I know are deeply committed to this area of the criminal justice system. We have a situation where a Conservative Prime Minister expresses his complete commitment to the concept of community sentencing and a Conservative Lord Chancellor commits himself entirely to the concept of rehabilitation and bringing those ideas into legislation. We have now had three long debates on these issues; I will again try to explain where the Government are coming from but, in the terms that noble Lords have put it, I fear I will fail to convince them again.

The concept of punishment is part of—not separate or left on its own from—what I believe is a very worthwhile package put forward in a flexible way that fully respects the independence and judgment of the court. We keep to the word “exceptional” because without it there would be the opportunity to ride a coach and horses through what we are trying to do, which is to create a tougher system of community sentences that will produce greater public confidence. Let me put that in context: in March, when these proposals were first announced and the Prime Minister announced his support for the concept, Mr Sadiq Kahn, Labour’s Shadow Justice Secretary, said,

“Cameron cannot claim these measures as his own. We support community sentences that effectively punish and reform appropriate offenders because we were legislating on tougher community sentencing long before David Cameron”.

It really is not fair to start trying to split the points that have been made about judicial discretion, which is there, nor are these free-standing punishments. It has been suggested that Part 1 of Schedule 16 is totally unnecessary and counterproductive to achieving the rehabilitation revolution. It has been suggested that there is no evidence to support requiring courts to impose punishment on offenders as part of community sentences. It is on the basis of such arguments that the noble Lord, Lord Ramsbotham, is again proposing that we do away with Part 1 of Schedule 16 entirely.

We are also considering Amendment 113GA. This would specify a list of requirements that courts might include in a community order as the punitive element. I am tempted to remind the noble Lord, Lord Rosser, that, as I have said before, the Labour Party has claimed to have punishment in community orders as part of its programme long before David Cameron became a convert.

The evidence that underpins the provision comes from victims and members of the public. Time and again, surveys have found that victims and the public see punishment as a critical purpose for community orders to deliver. I will quote only two of many. An ICM survey of victims of non-violent crime, carried out for the Ministry of Justice in 2007, found that punishment is seen as the most important part of a sentence, followed by payback to the community and then rehabilitation. More recently, research on community orders carried out this year by Victim Support and Make Justice Work found that victims,

“believe strongly in punishment and public protection”,

as the purpose of sentencing.

However, the evidence shows that the public are not confident that community orders are effective at delivering that punishment. For example, a survey carried out by Policy Exchange in 2010 found that 38% of the public perceive community orders to be soft, and a further 22% believe they are “weak and undemanding”. Similarly, the Opposition’s 2008 review of crime and justice found that the public saw community orders as a soft option, and that 90% of the public agreed that community orders should involve paying back to the community.

I remind noble Lords, as I did when the House last considered these provisions, that many of those given community orders have not committed minor offences. Some will have narrowly avoided custody. Some will have caused significant physical or mental trauma to victims through assaults. Others will have caused financial or emotional damage through theft, burglary or fraud. As a matter of principle, this Government believe that offences serious enough to cross the community order threshold should result in punishment. That is a principle with which I believe victims and the public would entirely agree. However, I do not believe that the existing community order framework gives victims and the public confidence that community orders effectively punish offenders. That is the reason we are introducing this provision.

I turn to the second concern that noble Lords have raised, which is that the provision will put the rehabilitation of offenders at risk. This will allow me to respond to the Amendment 113GB, in the name of the noble and learned Lord, Lord Woolf, which would disapply the imposition of a punitive element if the court believed that this would reduce the likelihood of preventing reoffending. Again, I will start from what victims and the public say. Of course the public do not want community orders to focus solely on punishment. The research by Victim Support and Make Justice Work, for example, found that neither victims nor the public wanted punishment to exclude efforts to rehabilitate and reform offenders. There are two important points I want to make here. One is about the public legitimacy of community orders. If the public are not confident that community orders are effective at punishing offenders, we cannot expect them to support our efforts to make them more effective at rehabilitating offenders. The second is that the public clearly recognise that this is not an either/or question. Community orders need to tackle the causes of reoffending but they also need to provide punishment. It is entirely possible for them to do both. For that reason I would argue strongly against the suggestion that a focus on punishment will prevent us from delivering improvements in reoffending rates.

18:45

Nothing in this provision prevents a court imposing a requirement that delivers both punishment and rehabilitation. Nor does the provision stop a court imposing multiple requirements to deliver these purposes. What the new provision does is make clear that courts must be confident that the community order they are handing down represents a punishment to the particular offender before them. The court will still be able —indeed will be under a legal duty, once it has imposed a punitive element—to ensure that the requirements imposed are the most suitable for that offender. These are not empty assertions. They are borne out by the research on this issue that the Ministry of Justice commissioned from the National Institute of Social and Economic Research. That study found no evidence to suggest that adding a curfew or community payback—two requirements which sentencers tell us they would most often consider punitive—would have a detrimental effect on reoffending.

Indeed, it found that combining certain types of requirement, such as supervision, with a curfew or community payback, can reduce the number of reoffences in the first and second year after committing the offence. That suggests strongly to me that this provision does not require the addition proposed by the noble and learned Lord, Lord Woolf. Imposing a requirement that, in the court’s opinion, serves the purpose of punishment does not mean replacing requirements that deliver rehabilitation. As the evidence shows, requirements that are often thought of as punitive can actually enhance rehabilitation when combined with other requirements. I hope this will persuade noble Lords that the community order framework can balance punishment with rehabilitation, without putting at risk reductions in reoffending.

A further concern that noble Lords have raised is that our “exceptional circumstances” exemption to the main proposition is too narrow. The noble and learned Lord, Lord Woolf, and my noble friend Lady Hamwee have tabled Amendments 113GZA and 113GZB proposing that we either leave out the word “exceptional” or replace it by “particular”. I hope that I can answer these concerns by demonstrating that the flexibility of the community order framework affords the courts a great deal of freedom to make reasonable adjustments to fit the circumstances of a particular offender. Nothing in these provisions changes that. Courts will be able to consider which of the 13 current community order requirements, or a fine, might be a just and appropriate means of fulfilling this duty. A court will still be able to tailor any of those requirements to ensure that they do not have a disproportionate impact on offenders.

In short, these provisions will not prevent courts imposing requirements that are focused on the offender’s rehabilitation or imposing a combination of requirements that is most suited to the offender’s needs. It is because of the flexibility of the existing community order framework that there is likely to be only a narrow range of circumstances in which a court might not consider it just to impose a requirement that meets the purpose of punishment. That is why the current clause has a tightly defined threshold of “exceptional circumstances”. It reflects the fact that nothing in the clause changes the flexibility that courts already have to ensure that punishment is matched to a particular offender’s circumstances. Substituting “exceptional circumstances” by “particular circumstances” or simply “circumstances” would significantly lower the threshold at which courts could decide not to impose a requirement that fulfils the purpose of punishment. I have already set out the evidence of public attitudes to community orders. I do not believe that the public would accept that a significant minority of offenders receiving community orders do not receive a requirement that delivers punishment.

I turn to points that have been made about what constitutes a punitive community order requirement. The noble Lord, Lord Rosser, has proposed that we amend the provision to list what, in his opinion, constitutes a punitive requirement. This idea has some appeal: indeed, our consultation on these provisions originally proposed that courts should be required to include specified elements in every community order. However, respondents to that consultation made several important points about this. They said that such a list would fetter judicial discretion and would ignore the fact that what is punitive for one offender might not be for another. For those reasons we have moved considerably from our original proposal and decided to ensure that courts retain the flexibility to choose which requirement would be a proportionate and appropriate punishment for an individual offender.

I do not propose to get into the detail of what the noble Lord has included in his list because we do not want a list. But, as I have said, we have decided that the right way forward is to let the courts decide what will represent punishment for the offender before them. Only the courts will know the full facts of the case and are ideally placed to make the judgment. This does not trample on judicial discretion; it preserves it.

Finally, Amendment 113GC, tabled by my noble friend Lady Hamwee, would make explicit in the legislation that nothing in the new provisions will affect the statutory purposes of sentencing as set out in the Criminal Justice Act 2003. I understand that she would prefer this to be enshrined in statute rather than to accept an assurance that this will not be the case.

The Criminal Justice Act 2003 sets out for the first time the five purposes of sentencing, namely, punishment, crime reduction, reform and rehabilitation, public protection and reparation. The courts are required by law to have regard to these when sentencing offenders, subject to certain exceptions such as where the sentence is fixed by law. This will not change: nothing in the Bill impacts on these provisions. All that we are doing is to provide that unless there are exceptional circumstances all community orders must include a requirement imposed for the purpose of punishment or to be accompanied by a fine. This will not affect the duty of the court to have regard to all the purposes of sentencing in every case. I am afraid that I cannot agree that we need a statutory provision to make this clear. That would be unnecessary and superfluous, and accordingly not good law. I very much hope that my noble friend can be reassured on that point.

Returning to the main purpose of Part 1 of Schedule 16, I believe that the inclusion of a punitive element in community orders is a principle which the vast majority of members of the public would support. As the evidence makes clear, victims and the public want to see community orders that tackle the causes of offending and provide a proper sanction for the offence. But they are not confident that community orders always provide an effective punishment. To strike out that provision would be to ignore this evidence. To disapply the provision in the way proposed, or to extend the circumstances in which it would not apply by amending the words “exceptional circumstances”, would seriously undermine the policy.

These amendments would risk a continued lack of public confidence in community orders, without which we cannot expect to make the case for improving our efforts at rehabilitation. To amend the provision in the way proposed by the noble Lord, Lord Rosser, would be unnecessarily to limit the freedom of the courts. The changes we have made to our original consultation proposal are entirely because we have recognised the importance of courts choosing requirements that fit the circumstances of the offence and of the offender.

I hope I have reassured noble Lords that nothing we are proposing will affect the existing statutory duty on the courts to have regard to all the purposes of sentencing when dealing with the offenders who appear before them.

Let me make a personal point on this matter. As regards the point made by my noble friend Lady Linklater, certainly this is not retribution nor is it violence. This Government have diverted treatment for offenders and prisoners suffering from mental health problems and they are given special priority to drug treatment. They have brought in rehabilitation of offenders as a statutory responsibility. As I said at the beginning, we have a Conservative-led coalition in which both the Prime Minister and the Lord Chancellor have set their hands to a process of rehabilitation that is tied to community sentencing. I venture to suggest that those two aspects of policy would not have been the priority of the previous Labour Government, as Mr Sadiq Khan indicated. However, it gives us a chance.

Throughout that reply, I hope that the noble and learned Lords, with their judicial experience, will have noted the continuing emphasis I have made on the responsibilities of the court and the judiciary, and the flexibility of the powers that are being given. I put it to noble Lords who have spoken in this debate, some of whom have been my allies in many fights in this area, that to oppose what is in this section of the Bill is to look a considerable gift horse in the mouth in terms of improving our criminal justice system. I sincerely hope that the noble Lord, Lord Ramsbotham, will withdraw his amendment. If he does not, I certainly would ask the House to vote against the amendment with some passion.

[Baroness Linklater of Butterstone]

My Lords, perhaps I may quickly say that I never used the word “violence”. The word I used was vengeance.

[Lord Ramsbotham]

My Lords, I thank all those who have spoken in this debate. I am sorry that the Minister ended in the way that he did. As I said at recommitment, if the Prime Minister had been absolutely four-square behind the rehabilitation revolution, the speech that he gave would have been different. So much of that speech was in the opposite camp. It was the toughness agenda. I quoted great chunks of it at recommitment.

One of my problems with all this is that no one is keener on the rehabilitation revolution, and the prevention of reoffending and getting this right, than I am. However, I find a curious division between, on the one hand, the rehabilitation revolution and, on the other hand, all this punitive element as being evidence of a confusion which needs to be eliminated, not least on behalf of the people who have to prevent reoffending. I am talking about probation officers, prison officers and others who are unclear as to exactly where the direction is.

The Minister said several times that the courts must decide. Of course, they must. Currently, the courts know the form, as we have heard over and over again. Therefore, what is the point of telling them something that they already know and are already doing? It is unnecessary. If this proposal is defeated tonight, I hope that at least the Minister will listen to what has been said during the debate and that perhaps we may have some further reconsideration of Schedule 16, which has come late in this Bill and includes much that is in need of urgent attention. In particular, we must not forget the point that it is no good just saying that something is punitive, if what you want to do with and for offenders cannot be delivered. We still have not had confirmation that that can be delivered.

I have listened with great care to what the Minister has to say and I have considered all the evidence in front of me. I wish to test the opinion of the House.

18:58

Division 2

Ayes: 32

---

Crossbench: 19
Labour: 9
Bishops: 1
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 156

---

Conservative: 101
Liberal Democrat: 50
Crossbench: 1
Bishops: 1
Ulster Unionist Party: 1

18:40

Amendments 113GZA to 113GC not moved.

Care Services: Winterbourne View

Monday 10th December 2012 Lords Chamber

Statement

19:11

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, with the leave of the House I shall now repeat the Statement made earlier today in another place by my honourable friend the Minister for Care Services on the subject of the final report on Winterbourne View.

“With permission, Mr Speaker, I wish to make a Statement about Winterbourne View. The scandal that unfolded at Winterbourne View was devastating. We were all rightly shocked, angered and dismayed by the appalling abuse uncovered by the “Panorama” programme in May 2011. Straight after the programme was aired, my predecessor, the right honourable Member for Sutton and Cheam, commissioned an in-depth review, to make sure that we learnt lessons and took action. Today I am publishing that review’s final report.

The abuse at Winterbourne View was criminal. Staff whose job was to care for people instead routinely mistreated and abused them. Management allowed a culture of abuse to flourish. Warning signs were not picked up by health or local authorities, the residents’ families were not listened to, and concerns raised by a whistleblower went unheeded. The fact that it took a television documentary to raise the alarm itself speaks volumes. However, the abuse uncovered at Winterbourne View is only part of the story. This case has made us look again at how we care for one of society’s most vulnerable groups of people.

Winterbourne View hospital provided care for people with either learning disabilities or autism, together with either mental health problems or challenging behaviour. Around the country, at any one time, there are around 15,000 people with similar needs, around 7,000 of whom live with their families. Of the remainder, many live in the community, but around 3,400 are in in-patient settings. Their behaviour can sometimes pose a risk to themselves, and sometimes also to others. There will therefore be times when they require intensive treatment and support.

However, hospitals are not where people should live. There are far too many people with learning disabilities or autism in hospital, and they are staying there for too long—sometimes for years. We should no more tolerate people being placed in inappropriate care settings than we would people receiving the wrong cancer treatment. What is necessary is nothing short of a fundamental change of culture.

We have known for over a decade that, with the right support, the vast majority of these people can live happy, fulfilled lives, close to their families and in their own communities. Much of what we know works in this area is based on the pioneering work of Professor Jim Mansell. Professor Mansell helped us set up our review, and supported us right up until his tragic death in January this year. I would like to pay tribute to him for his tireless work in this area, and for the huge contribution he has made to improving people’s lives.

We know what change is needed. It is now time to make sure it happens. Today we are setting out how we will address poor care and abuse, and ensure that excellent care becomes the norm.

First, we will send a clear message to those who provide care. Owners, boards of directors and senior managers must take responsibility for the quality and safety of their services and when they fail, they should feel the repercussions. A number of frontline staff at Winterbourne View rightly received criminal convictions, but the case also revealed weaknesses in our ability to hold those higher up to account. We will address this. We will examine how corporate bodies and their boards of directors can be held to account under law for the provision of poor care, and for any harm experienced by people using their services. We will also explore whether we can make sure directors are fit and proper persons to oversee care, including consideration of their past record with other providers.

We will also tighten regulation. CQC will include reference to the best model of care in its revised guidance about compliance and will consider it as part of the regulation and inspection of services from April next year. CQC will also check whether all providers are following established national guidance or similar good practice, including by carrying out unannounced inspections involving people with learning disabilities or autism and their families. Where standards are not met, it will take enforcement action.

Secondly, we will tackle the wider failings. We must, and we will, stop people being placed in hospital inappropriately and ensure that services are commissioned which properly meet people’s needs. This requires the NHS and local government to work together. All current hospital placements will be reviewed by 1 June 2013, and everyone who is there inappropriately will move to community-based support as quickly as possible, and no later than June 2014. We will also make sure that, in future, health and care commissioners design services that allow people to live safely, with support, in their communities with care plans developed including the individual and their family. By April 2014, every area will have developed an agreed plan to make sure this group receives high-quality care. As a result, we expect to see a dramatic reduction in hospital placements.

The report also sets out the specific actions we will take to support this high-quality care. This includes tackling excessive use of physical restraint, addressing concerns about the over-use of antipsychotic and anti-depressant medication, and improving safeguarding arrangements.

Thirdly, we will support a positive and open culture—one in which staff provide excellent care, but also feel able to speak out when care is poor. The report sets out how we will support providers to achieve this, including in relation to staff training. Creating a positive culture also means listening to and involving people and their families. At Winterbourne View, families’ concerns were ignored. However, we need to go further than heeding warnings or complaints. We need to ensure people and their families are involved at every stage of their care and that they get the support they need, including advocacy support.

We will make these changes as quickly as possible. The organisations responsible for delivering change share our commitment to making this happen—working both nationally and locally, and across health and social care. A concordat, signed by more than 50 organisations, sets out the specific actions to which each organisation commits to deliver. The NHS Commissioning Board and Local Government Association will come together to lead a joint improvement programme, with financial support from the Department of Health, to supervise the changes. I will chair a board to oversee progress personally.

Winterbourne View fills us all with sorrow and anger but we are using it as a spur to make things better. There are places that are already getting this right. I have seen some for myself and the report discusses many more. This shows what can, and should be, done for all and that a better life for people with learning disabilities and autism is possible. I regard it as a national imperative that we transform the care of those with learning disabilities or autism and behaviour that challenges. I commend this report to the House.”

That concludes the Statement.

19:19

[Lord Hunt of Kings Heath]

My Lords, I thank the noble Earl for repeating the Statement. I know that Members on all sides of the House were appalled by the terrible incidents at Winterbourne View. I say to the noble Earl that we share a determination to ensure that all necessary steps are taken to prevent a similar tragedy happening again. Our goal must be to ensure that everyone with learning disabilities, including those with challenging behaviours, receives high-quality, decent and humane care and support; and that we finally end up with the practice of sending people with learning disabilities to long-stay institutions far away from their family and friends being a practice of the past.

The noble Earl has announced a number of welcome measures that are certainly a step in the right direction, but we remain concerned that the proposals may not be clear or strong enough to guarantee the changes that people with learning disabilities and their families urgently need. I refer the noble Earl to the NHS mandate, published only a couple of weeks ago, which says that there should be a substantial reduction in reliance on in-patient care. The noble Earl has clearly reiterated that in the Statement. Can he put a figure to that reduction? Is there not a risk that, unless the noble Earl is more precise about how and when that will be accomplished, we may not see the progress that we would wish to see?

Similarly, the Government say that they wish every local area to provide appropriate care and support. Can the noble Earl define what care is considered to be appropriate, and how it might be measured?

The noble Earl will probably know that I am somewhat dubious about the commissioning function in the National Health Service. We have, after all, had commissioning for more than 20 years under different Governments. One has to ask whether commissioning has led to enhanced outcomes. We see in what happened at Winterbourne View a catalogue of failure by commissioners. Vulnerable adults were placed in unsuitable places, often miles away from their homes. This dislocation, as a recent BMA paper pointed out, can further disturb adults who may already have had traumatic lives. These distances have made it difficult for families and carers to provide oversight and protection. As the BMA said following a round-table discussion in your Lordships’ House, commissioners need better to reflect the individual’s needs and relationships. It must be more local and less institutionalised. Containment must give way to personalised care. Would the noble Earl agree with those sentiments?

Can the noble Earl explain how the Government will ensure that all local commissioners have the necessary skills to make these changes? Clearly there was a problem with 150 primary care trusts. The question now arises: what will happen with the 212 clinical commissioning groups? Of course, they can rely on and draw on the experience of local authorities. I wonder whether the noble Earl can recollect our discussions during the passage of the Health and Social Care Act, when we on this side of the House argued that the commissioning plans of clinical commissioning groups should have to be signed off by health and well-being boards in order to draw the commissioning plans of both the local authority and the CCGs together into one cohesive approach. Would the noble Earl be willing to consider this issue again?

I am concerned that the authorisation process for CCGs does not mention learning disabilities as an area where competence is required. If this is such an urgent and important priority for the Government, can the Minister explain why this is the case?

I come back to the continued use of long-stay institutions because alternative care has not been developed in the community and at home. In a time of constrained resources, when we need to make the best use of taxpayers’ money, there should surely be one budget for people with learning disabilities, not separate funding for health and council care. How will the Minister ensure that there is a cohesive response at the local level from both the NHS and local government, with the budgetary allocation to make sure that that happens? Will the noble Earl name the specific individual leading this work within the NHS Commissioning Board so that Members of this House are clear who should be held to account?

On the regulator, the serious case review of Winterbourne View said that light-touch regulation by the Care Quality Commission was not appropriate for closed establishments, which should instead be treated as high-risk, with frequent unannounced, probing investigations. The review strongly recommends that these investigations speak to residents’ families and to patients, including those who have left the institution and who may feel more able to speak out and speak up. The Care Quality Commission has just completed a focused probe of inspections of long-stay institutions for people with learning disabilities. I think that the implication of what the noble Earl said is that that work will continue, but it would be good to have some confirmation from him.

Can the noble Earl tell me about the CQC’s capacity to undertake this work? I am one who believes that the previous leadership did the best that they could in the circumstances in which they found themselves, notwithstanding the great deal of criticism that they had to take. I have been very impressed by the approach of the new chief executive of the CQC, David Behan. However, I remain concerned that too many responsibilities may have been put on the CQC for it to be able to discharge them effectively. Clearly, in relation to places like Winterbourne View, this has to be an important priority for the CQC. Can the noble Earl reassure me that he is convinced that the CQC can take this on without being submerged by all the other responsibilities, including the whole of primary care which it has been given to address?

Whatever the shortcomings in commissioners and regulators, responsibility ultimately lies with those who provide the services; I agree with the sentiment of the Statement on that. One of the most disgraceful aspects of Winterbourne View was that vulnerable people were neglected and abused while the hospital’s owner, Castlebeck Care, charged huge fees and apparently made huge profits. The serious case review says that Castlebeck made decisions about profitability, including shareholder returns, over and above decisions about the effective and humane delivery of assessment, treatment and rehabilitation. My understanding is that the average weekly fee for residents at Winterbourne View was £3,500, rising to £10,000 for one patient.

While the hospital generated profits of almost £5 million, the review could not determine how much money went back into the hospital, and how much was creamed off for profit. The reason for that is the company’s complex financial structure, with Castlebeck itself owned by private investors based in both Jersey and Geneva. That has made it virtually impossible to hold the company to account. Can the noble Earl confirm that the company has so far failed to meet two of the serious case review’s key recommendations: that it should fund therapeutic services for all ex-patients, and pay for the cost of the review itself which has so far been entirely borne by the taxpayer? The review’s authors say that the corporate responsibility of Castlebeck remains to be addressed at the highest level.

In that regard, I very much welcome the commitment made in the Statement by the noble Earl to the Government examining how corporate bodies and their boards of directors can be better held to account, including a “fit and proper” test for the directors of those companies. Will the noble Earl consider requiring private companies to publish the names of their owners, the members of their boards and the details of their financial structure before they can be licensed and registered to provide publicly funded care? We cannot let the excuse that information is too commercially sensitive be considered acceptable, when what is at stake is the care of very vulnerable people, paid for using substantial amounts of taxpayers’ money.

Finally, perhaps I may ask the noble Earl about carers and the vulnerable adults themselves. As the BMA report says, carers and adults have important roles to play in identifying needs and helping to co-ordinate and supervise their care. Can the noble Earl confirm that the involvement of carers and the vulnerable adults concerned will come to the fore when taking forward the work of his department, the CQC, commissioners and providers?

How we care for the most vulnerable people is clearly a hallmark of a decent society. The scale of abuse at Winterbourne View was simply unacceptable in the 21st century in one of the most prosperous nations in the world. I have been encouraged by the tone of the Statement repeated by the noble Earl. There are clearly issues that we would like to see addressed and I look forward to his comments. I also look forward to the debate in your Lordships’ House on Thursday, when we will no doubt have a more detailed go at this. However, it is clear that there is considerable support for the kind of decisive actions that need to be taken to ensure that this cannot happen again.

19:31

[Earl Howe]

My Lords, I am very grateful to the noble Lord for his constructive comments and I welcome his commitment to a shared agenda for improving care for those with learning disabilities and autism. I agreed with a great deal of what he had to say.

As to his individual questions, he first asked whether I could articulate the number of in-patient places we expect to be reduced during the coming months and years. My answer is that we want to see a rapid reduction in the number of people with learning disabilities, autism and challenging behaviours who are in hospitals or residential care and who are away from their home areas. That is not to say that there is no role for assessment-and-treatment centres, which clearly have a role—but it is limited. It is important to ensure that everyone has a care plan built around their individual needs, rather than to say that there should be some kind of top-down national target for the number of units. We believe that plans should be in place and put into action as soon as possible. All individuals should be receiving personalised care and support in the appropriate setting for them no later than 1 June 2014, and we shall work towards that end. It is very much a case of defining the appropriate care for the individual.

To pick up the noble Lord’s final question about the involvement of carers and the vulnerable adults themselves, yes, they should indeed be involved in the planning of care. It is families, carers and the individuals themselves who know best what they need. It was one of the besetting failings of this terrible saga that families and carers were not listened to, and not only about the whistleblowing to which they wanted to alert the authorities. They also had a very good idea of what type of setting and care their loved ones would best respond to—and they were not listened to on that score, either.

The noble Lord asked about clinical commissioning groups and the extent of their expertise in commissioning appropriate treatment for those with learning disabilities. I agreed with a great deal of what he said. Commissioning expertise for this group of people is, frankly, in short supply, and that is why the department will fund the joint improvement programme being organised jointly by the NHS Commissioning Board and the Local Government Association. They will be tasked with working closely with clinical commissioning groups and their local authority partners over the next two years, to share and implement best practice. There has to be, as the noble Lord said, a cohesive approach. Joint working here is vital because we are looking at determining not only the right setting for an individual but what the right treatment for that person should be. That necessitates a joint approach. I should add that we would set an expectation that there be pooled budgeting arrangements to drive that forward.

The noble Lord asked me who on the Commissioning Board was leading in this area. Sir David Nicholson has made clear his personal commitment to take action on this. Indeed, the board is meeting people with learning disabilities this Thursday, but the lead director on the board is Bill McCarthy.

The noble Lord asked me what the Care Quality Commission intended to do by way of ongoing work. The CQC will continue to carry out unannounced inspections, which will involve people with learning disabilities and their families, as I mentioned when I repeated the Statement. That will be based on risk, and the CQC has made it plain that these particular settings are a priority for it. We expect it to take account of all the recommendations arising from the serious case review, including the views and statements of those who have left establishments of this kind.

The noble Lord asked me about Castlebeck and the liability that it should have for the ongoing costs of patients who were at Winterbourne View and, indeed, the cost of the serious case review. My reaction is that Castlebeck should give serious consideration to that suggestion. However, there are currently no powers to make that happen, and the Government are keen to ensure that in extreme cases such as this there are consequences for providers of care that is of poor quality.

As regards a requirement for companies to be more open about their board structure and corporate structure, this is something that we shall be looking at over the next two or three months, and we will come forward in the spring with our conclusions on how companies and their boards can better be held to account.

19:38

[Baroness Hollins]

My Lords, I welcome the report and the detailed actions that are listed in it. Indeed, it fills me with some hope after so many years of commissioning failure. The proposed change support programme is to be led by the NHS Commissioning Board and the Local Government Association. There is something ironic in responsibility for leading this change being vested in those who primarily have been responsible for the current failure. The evidence is that local authority and NHS leadership do not have the skills or knowledge to effect change. Indeed, my former colleague Jim Mansell’s first report on challenging behaviour was published 20 years ago and made similar recommendations to those in today’s report. Can the Minister confirm that the programme board will indeed be expected to engage with those from the learning disability sector, who understand the issues involved in the design and delivery of the support programme? Finally, why does the report make little or no mention of the need to provide access to the same range of mental health treatments that other citizens have access to, including psychological therapies?

[Earl Howe]

The noble Baroness brings us to a set of key points. She said that in her view the NHS and local government simply do not have the capacity to address these issues properly. In many respects we would agree with that, although it would be wrong to make a blanket statement about the whole country because we know that very good pockets of commissioning and provision exist. One of the tasks of the joint improvement team will be to identify those areas of best practice, and to enable those operating in those areas to go out and mentor other areas. Part of the sum of money that we set aside will be devoted to enabling those high-performing areas to backfill the places while they are engaged in that mentoring exercise. Her basic point is well taken. We think there is a job to do here but it is one of those things that the Board and the Local Government Association need to oversee on a national basis.

That is only a short extension from the function of the Commissioning Board in general, which will be to support commissions. We are grateful to the Local Government Association for its overseeing role for local authorities. I fully expect that they will engage with the learning disability sector. I commend to her the concordat, which is accessible on the department’s website, and she will see from that that the 50 organisations that have signed up to it include a number of voluntary organisations in this sector. Jointly, these bodies have committed to a programme of action. It is not just about defining what needs to be done but about how it will be done. It is an impressive set of commitments that those bodies have signed up to.

[Lord Pearson of Rannoch]

My Lords, the Minister spoke about the need for a fundamental change of culture but I heard nothing in the Statement about training, so I hope that he will forgive me if I ask again a question I have been asking for over 20 years about the training of our teachers, social workers and, in this case, care workers. I do so from my background in the 1980s and 1990s on the body that validated all our teacher training courses and from having taken quite a close look at the curriculum then offered by the Central Council for the Education and Training in Social Work. At the former, I was shocked to find that our mission statement was “to permeate the whole curriculum with issues of gender, race and class”.

Since then we have seen Nursing 2000 put the training of nurses away from hospital wards and into the social science departments of the former polytechnics, with results that I predicted at the time. Have the Government looked into the curricula of the training of care workers and of those responsible for this and similar disasters? What training do they get, if indeed they are trained at all? What genuine qualifications do they have before they commence training? Are they proud of what they do, or are they just in it for the money? I hope I am very out of date, but I look forward to the Minister’s reply.

[Earl Howe]

My Lords, the noble Lord is not out of date, because this is a key issue and I am grateful to him for raising it. It is crucial that staff who work with people with challenging behaviour are properly trained in essential skills. Contracts with learning disability and autism hospitals should be dependent on assurances that staff are signed up to the proposed code of conduct that the Department of Health has commissioned from Skills for Health and Skills for Care and that there should be minimum induction and training standards for unregistered health and social care assistants. Those standards should be met. I would say that owners, boards of directors and senior managers of organisations that provide care must take responsibility for ensuring the quality and safety of their services. There are requirements set out in law in that regard, and they include safe recruitment practices, which necessarily involve selecting the people who are suitable for working with people with learning disabilities, autism and challenging behaviour, and appropriate training for staff on how to support people with challenging behaviour.

From April next year, Health Education England, which is the new, national, multi-disciplinary education and training body, will have a duty to ensure that we have an education and training system across the piece but including a system that can supply a skilled and high-quality workforce for this sector.

[Baroness Browning]

My Lords, my noble friend said that families’ concerns were ignored, but would he accept that there is huge push-back across all the public services involved with this group when anyone who is a family member of someone over the age of 18 tries to make representations on their behalf? I experienced that again personally, yet again, only this week. Paragraph 3.9 of the department’s response makes reference to:

“Where an individual lacks capacity and does not have a family to support them, the procedures of the Mental Capacity Act 2005 should be followed”.

I am appalled at the way in which the Mental Capacity Act, an excellent piece of legislation, is virtually ignored by many professionals who not only do not advise people of their rights under the Act but just ignore it. If ever a piece of legislation cried out for post-legislative scrutiny, it is this Act of Parliament. It is a strong, good piece of legislation but it needs to be enforced; we need more people to know about it and to use its powers to protect the vulnerable.

[Earl Howe]

My Lords, my noble friend is absolutely right. Over the coming months the Department of Health will be working with the Care Quality Commission to agree how to improve the understanding of the deprivation of liberty safeguards and to ensure compliance with them. We are very clear that this work is necessary to protect individuals and their human rights. We will report the results of that work by spring 2014. During 2014 the Department of Health will update the Mental Health Act code of practice, and this will also take account of findings from the review.

[Baroness Wall of New Barnet]

My Lords, I also congratulate the Minister on repeating this Statement made earlier in the other place, and I welcome the report itself. I want to refer to a couple of areas and follow up his reassurance about the patient care pathway. The importance of that pathway, I am sure he knows, is not only in having it but ensuring that it is carried out with regular updates, and that the progress being made is taken into account to make sure the pathway is staying in touch. That does not always happen, so having the patient care pathway is only one part of what I hope he would ensure would happen.

The other part, and the Minister may not be surprised at this, is Part 7 where again, as my noble friend Lord Hunt has done, I urge him to think again about another area. With regard to the expectation as far as training goes—while Skills for Health and Skills for Care, as mentioned in the document, are doing a great job—it is absolutely crucial to recognise that just the induction for health care assistants in social care really is not enough. I have pleaded with the Minister on many occasions in the context of hospitals. It is equally if not more important that healthcare assistants have the confidence given to them by being registered and qualified in the way that registration ensures, so that the very difficult and important job that they do—and more of them are doing it than are working in any other area—is suitably recognised. I urge the Minister to take away that request in the context of this report, and to look again at ensuring registration for these particularly important workers.

[Earl Howe]

My Lords, I am grateful to the noble Baroness for what she has said. She is right to point out that the patient pathway is integral to any proper planning process for individuals, and that it should be built around the particular individual’s needs and preferences if possible. This brings us back to the role of an assessment and treatment centre: namely, as its name implies, to assess the needs of a person and to define what their care plan should be over a future period of time. As I mentioned, the care plan is best when it is drawn up with the benefit of advice from the individual, their family and their carers. Therefore, if we want more community care, we need to ensure that there is the capacity in the community to deliver good patient pathways to individuals. We are clear that some areas of the country are ill equipped to do that. Part of the task of the joint improvement programme will be to look at the facilities and resources that are required in local areas to enable commissioners to plan those patient pathways with confidence.

On the issue of the training of care assistants, I take the noble Baroness’s point. I think that it is common ground between us that those who lack a recognised qualification should nevertheless be enabled to upskill themselves and get themselves on a register to prove that they are familiar with and abiding by a code of conduct that has been recognised, with the register itself being duly accredited. Our position is that the system of voluntary registration, almost by definition, will result in an upskilling of the workforce, but it is not the whole story. There is a role for employers to ensure that there is proper supervision of care assistants, and that proper delegation takes place that does not require a person to do more than he or she is skilled to do. There is no single answer here, but I believe that voluntary registration is a good start.

[Baroness Masham of Ilton]

My Lords, following from the question about registration and regulation, is the Minister aware that people such as nurses and care assistants who have been sacked for dishonesty or undertaking dangerous procedures with patients can take a job anywhere as a care assistant? Without regulation, how will he control the matter? It is very dangerous for vulnerable patients because these establishments are so hard-pressed to get staff to work in their centres that they will take almost anyone, without even taking up references.

[Earl Howe]

My Lords, the noble Baroness raises another important point. In this country we have a list that acts as a check on those who have abused or otherwise maltreated adults or children and have been dismissed on that basis, to ensure that the scenario that she has painted in which someone who has committed such an offence is re-employed cannot occur in practice. I am not sure that I recognise the situation that she outlined because the POVA system is designed to ensure that dangerous people are not employed to look after the vulnerable. However, I will gladly drop her a line in writing to set out what we propose in this area.

[Lord Willis of Knaresborough]

My Lords, I echo the comments around the House that this Statement is appropriate. The fact that it has support across the House demonstrates that there is unity in terms of tackling the issue. I spent a significant part of my professional life working with young people with severe behavioural issues. As the head of a school, I, together with my governors, would be held responsible for what happened to those young people—and rightly so. The weakness in the Statement is that it does not go far enough.

The Minister was right to make clear, and I am glad he did, that it was the management and the corporate owners of the home who were principally responsible, yet it was the staff who were prosecuted and jailed. I would like to hear what steps are going to be taken with the CPS to deal with corporate responsibility, and why that is not the priority here. Without it, frankly, a lot of the things that appear in this report will not have the necessary teeth.

I respectfully but fundamentally disagree with the noble Lord, Lord Pearson, on the training of nurses and other health workers. The more that we demand of staff in terms of their education and other opportunities, the better the staff we will ultimately get. However, I agree with him and with the noble Baroness, Lady Masham, that it cannot be right that the most vulnerable people in our society are looked after by people whom we cavalierly say do not require qualifications. How unacceptable is that in the 21st century? A voluntary register of an organisation that is disreputable is utterly and totally meaningless. We need a commitment on this from the Government. I agree that this will be over a period of time; it will not happen tomorrow. However, simply stating, as recommendation 15 does, that by 2013 there will be a voluntary register will not give parents and carers of these very vulnerable adults and young people the support and comfort that they need. I plead with the Minister to make the case in the department for mandatory registration, to ensure that there is appropriate regulation and that nobody works with these young people or adults who does not have appropriate qualifications and training.

[Earl Howe]

My Lords, I am very happy to recognise the excellent work done by my noble friend in the report that he published and submitted to the Royal College of Nursing, which we will debate later this week. He rightly drew attention to the responsibility that lies with leaders of organisations and boards of directors. They should be fully held to account for poor quality or for creating a culture in which neglect or abuse can happen. I completely agree with that. He was right to say that despite convictions for some front-line staff, Winterbourne View has revealed weaknesses in our ability to hold to account those who were higher up. Owners, boards of directors and senior managers must take responsibility for the quality and safety of their services.

We are determined to strengthen the accountability of boards of directors and managers, but we are not yet in a position to say exactly how that should be done. It is not as easy to define a legal route as it might first appear. It is perhaps easier to do so in the area of financial irresponsibility or negligence than it is where value judgments have to be made over the quality of care delivered to a group of individuals. However, I can tell my noble friend that this is one of the priorities that we have set ourselves. I listened with respect to his suggestions on the compulsory registration of care workers. I repeat what I have said in the past: the Government’s mind is not closed to this suggestion.

Energy: Efficiency

Monday 10th December 2012 Lords Chamber

Question for Short Debate

20:00

Asked By

[Lord Teverson]

To ask Her Majesty’s Government how they intend to implement their strategy for energy efficiency.

[Lord Teverson]

My Lords, I thank the group of noble Lords who are joining in on this debate. I thank them for their dedication towards the important subject of energy efficiency. It is quite appropriate today, perhaps, that E.ON, the last of the big six, has just announced its energy price rises for dual-fuel customers of some 8.7%. This means that we have had energy price increases over the last few weeks of between 6% and 11%, which is not insubstantial when we have household average earnings going up by 1% or 2%.

As a nation and as households, we tend to tackle problems and think about them more when the bill arrives on the doormat, whether it is the electricity bill or the gas bill. The nation’s example would be the impending £100 billion to £200 billion invoice that will arrive for new energy infrastructure over the next decade—depending on whether you include generation alone, or all the other areas of networks and the national grid and all of that side as well. At that point, you think you must make changes in the way that you live and you have to save on that expenditure. That is why energy efficiency and the efficient use of energy are core areas on which, as a nation, we must make sure that we concentrate.

Indeed, we have had a number of recent successes or moves forward by the Government. We have had the publication of the electricity market reform Bill, which may provide us with opportunities for demand reductions in future. We will see how that progresses through Parliament. The Energy Efficiency Deployment Office was set up in the last year, which I welcome very much. We have had the consultation on demand reduction at the end of November. We have also had a government energy efficiency strategy, which is what caused me to call for this debate. The sad thing was that, rather predictably, that strategy was not really noticed or commented on by the press or the wider community. I suppose that, in comparison with gas fracking, wind turbines supposedly blotting the landscape, the stops and starts of new nuclear or maybe even the occasional arguments between the Treasury and DECC, an energy efficiency strategy is not seen as particularly interesting news. I very much differ over that, and I will explain exactly why.

The most important thing is that there are a number of benefits from such a strategy and from energy efficiency. First, and perhaps most importantly from a human point of view, is that of fuel poverty. Clearly, if we have an energy-efficient household stock and economy, fuel poverty will go down. At the moment there are 3.5 million households in fuel poverty. Cold winter deaths are thought to be somewhere in excess of 25,000, costing the NHS £1.3 billion—but, far more importantly, there is the human cost of those deaths to those individuals and to their families.

Energy efficiency means that emissions come down and there is greater energy security. It also means, according to the Secretary of State, that we will need 22 fewer power stations in our investment programme by 2030. It could also mean that we do not have the cost of winter fuel payments that at the moment cost the Exchequer £130 million each year in subsidising people’s fuel bills, when what we really want is for them not to have to pay those prices anyway. Of course, the other big benefit of energy efficiency is that we actually reduce the energy bills not just of households but of British industry as well, making it more competitive.

Therefore, we currently have a number of initiatives, most of which I welcome. The Green Deal operates from 28 January 2013, and with that we have the open home networks. Regrettably, we have had a gap between the Green Deal starting and CERT ending, and some strain put on the industry and the house refurbishment sector over that time. We have the energy company obligation coming in. Today we announced simplification of the carbon reduction commitment, which I very much welcome. I hope that soon it will recognise renewable energy usage as well. We have the smart meters roll-out programme starting in 2014 and the enhanced capital allowance for business.

Despite having that collection of measures, what we have is seen by industry in particular and households to a degree, as a lack of clarity about the future landscape. Business has certainly not been aware of all those incentives. Although we have a carbon plan, I believe that for the first time we have a proper and important strategy for the future in this area.

I have always been pretty critical of the United Kingdom’s energy performance as regards the houses and factory units that we built in the 1960s and 1970s. However, going through the figures, I have to admit that over the past 20 years or so, under Governments of different colours, we have not done too badly. In fact, total UK energy usage has been flat since 1970. Since 1980, energy intensity—that is, the amount of energy we use per unit of GDP—has gone down 52%. That fall has been quicker over that period than that of the United States, Germany, Japan or France. We are one of the lowest of the major developed nations in terms of energy intensity. Of course, one of the reasons for that is that we have given up producing most things and we have a service-based industry. The financial services industry does not create much at all, according to some people, but it certainly does not create a lot of carbon emissions or have high energy usage.

However, since 1980, although energy usage as a whole has stayed the same, electricity usage has gone up by 60%. Even with present policies, another 10% rise is expected by 2030 and that could go up to 15% when we move to electric vehicles and a switch in space heating from oil and gas to electricity. However, the prize is great: some 150 terawatt hours of savings could be captured by 2030 according to at least relatively independent reports. Given that in 2010 total usage was 328 terawatt hours, that is a saving of 45% of current consumption. However, the risk that has been identified is that 92 terawatt hours of that will not be achieved, which is a quarter of the expected 2030 electricity consumption. That is why the concentration on energy efficiency for electricity in particular is so important. In December 2001, the Government’s carbon plan said that if we are to cut our greenhouse gas emissions by 80% by 2050:

“Energy efficiency will have to increase dramatically across all sectors”.

However, it is not just a matter of electricity usage. I have a particular concern about the zero carbon homes programme to be implemented for new homes from 2016 and for new industrial premises from 2019. Those two are a core area. The energy efficiency strategy identifies four barriers, including an underdeveloped market for energy efficiency. That market has grown but is still underdeveloped, particularly in comparison with the United States. There is also a lack of trusted and appropriate information. I hope that having smart meters in households will start to put that right. Further barriers are misaligned financial incentives, although the Green Deal is trying to do something about that, and undervaluing energy efficiency generally.

I have several questions for my noble friend the Minister. How will the Government start to overcome those barriers? That is not fully outlined in the strategy but perhaps that is still to come and the work is still to be done over this current year. Smart meters are the way to engage the public much more broadly. I would be interested to hear from the Minister where the Government are in terms of getting public engagement. Will there be a system like the TV digital switchover that was so successful? How will we get the demand side incorporated in the Energy Bill that is starting to go through Parliament? How will we integrate the European energy efficiency directive that is to come into force in 2014 into our own strategy? Can the Minister assure me that there will be no more watering down of the zero carbon buildings?

One billion pounds are being put forward for carbon capture and storage and £100 billion of investment in power generation is expected. Given that we have a housing stock of 26 million homes, that £100 billion of investment could be used in spending £4,000 on each home to cut demand in the first place. There is a great prize to be won. It is not just a case of win-win; in this case it is win again and again and again. I commend the Government’s recent work on their energy strategy and ask them to deliver it.

20:11

[Lord Judd]

My Lords, it is good to follow the noble Lord, Lord Teverson. Nobody takes these issues more seriously than he does and his knowledge is daunting. What he is raising and all the associated issues are absolutely central to future survival, sustainability and prosperity of our nation. The deliberations that are going on in government and elsewhere are of crucial significance. We all ought to be focusing on them, not just the usual few who concentrate on these matters.

At the outset I should mention Doha because it is intimately related to what we are talking about. Doha has been a significant step. I think that there are a lot of sceptics who feel that what was agreed has yet to be implemented. We want to see the evidence of implementation because it is in the implementation of what was agreed that the real tests will be, not in the good intentions. In retrospect it could turn into a cynical exercise. It must be made effective. I hope that the Minister will take a moment to reassure us on that issue.

One of the things that has become very clear is that in a country which has become used to cheap and easily available energy, those days are over for ever, and we have to adjust our behaviour as a nation to meet that. Of course, issues of equity and justice apply internationally at Doha but also in our own society. The methods of production, whether that involves plant or distribution, can have a disproportionate impact on less articulate, less well placed communities which have everything dumped in their immediate vicinity because the forces of NIMBYism take control. There is a real need to concentrate all the time on equity and justice in our own society—not to mention the aesthetic and environmental issues. Do we want to have a country worth living in or do we want one littered with energy infrastructure and distribution systems in which we can no longer get spiritual regeneration? These are all crucial issues.

I suggest that those issues are all related to the need in our nation for an immense culture change on the demand side. We really have to nurture a sense of national responsibility. Let me take, for example, fashion. I hope this will not be regarded as a joke because I think it is a very serious matter. We are entering the coldest part of winter. Fashion is all about smartness and elegance and how you look. Surely in a society that was taking its energy needs seriously, it would be about keeping warm. Why do we not give higher priority in our clothing and other designs to the need to keep warm and use less energy? What about our Parliamentary estate and Whitehall? Yes, there have been moves in this direction and they are to be welcomed, but it is still tinkering: we all know that. Noble Lords should walk around this building at night. How many lights are left on by us all? How much equipment is left on which need not be? Let us look at Whitehall and government institutions. How much waste is there still at that level? Where is the example to the nation? Surely, in our schools and universities, we need to have far more emphasis on talking about energy and economics with youngsters, students and post-graduates. There should be far greater emphasis on conservation. In engineering, why is there not greater priority given to the need to work on conservation, as distinct from just production methods and efficiency? We must put conservation and a changed living style much more centrally into our deliberations on these issues.

I find an inherent contradiction between a preoccupation with getting efficiency, trying to control prices and taking our responsibilities—some of which I just mentioned—seriously and having so much of the energy system dominated by private enterprise, which is about profit. There is a contradiction there. I am not ashamed to say that I have never been—I hope—a dogmatic person in my political beliefs, but I believe in pragmatism in the age in which we live. I cannot help but be convinced that the sphere of energy is an excellent example of an aspect of national life which should be better looked after by the nation as a nation within a co-ordinated and comprehensive approach to the necessary planning. We need to get the right people to do the right things within it rather than, as at the moment, trying to regulate the market as it develops its own thrusts and priorities. It seems that we are putting the whole thing back to front, and I would like to see a reassertion of national responsibility in these matters. That involves all the points that I mentioned earlier, but also involves ensuring that it is not just a departmental responsibility, but that it goes into the realms of higher education, the Civil Service and the parliamentary estate.

That brings me to one last issue—and I know that the Minister, who takes this matter very seriously, will forgive my mentioning it. There is one area in which, because of our insatiable demand for energy, we have a most critical issue. We have decided that it is necessary to have another generation of nuclear power. I cannot say that I am thrilled by this, but I am persuaded that it is necessary. Having been in government myself, I realise that decisions sometimes have to be made on balance, but once you have made them, the task is to get on with them as responsibly as possible. That is my general position on nuclear energy.

There is a problem, though, that we are going into the next generation of nuclear energy before we have started to solve the problem of the waste from the first nuclear generation. Scientists and others will tell us that we need not worry because the solutions are there, but the point is that we have not done it yet. I declare an interest as somebody who lives in west Cumbria. From another galaxy, we would look highly irresponsible for getting ourselves into a position now with this lethal stuff—which already exists and will have implications with gigantic dimensions for future generations hundreds or even thousands of years ahead—where we are leaving the decision as to whether we proceed with what is already on the map as a possible solution to the local authorities. I know many of the people in the local authorities and have great respect for them and admiration for their public service; but how do they begin to have at their disposal the expertise, knowledge and background to make key and critical decisions in this area?

This is a national responsibility that needs to be decided at the national level, even though of course we then consult with local authorities about the implications of how it might go forward. I would be far happier about the whole issue, as it develops in west Cumbria, if it was clear that, after bringing to bear the best possible minds, and scientific evidence, that we can as a nation, this was the best possible place to have it. We should have the best possible place in the UK, and not just somewhere that has been bamboozled, bludgeoned and bribed, if I may use the term, into having it. It is crucial that this is taken seriously, and we have all have a responsibility in this House for that.

I conclude with the theme I raised a little earlier. Whatever the point at which we dip in to these complex issues, I hope that we have not given up on strategic thinking in which we say, “Now look—efficiency, the cost, its social and environmental implications, and the safety of future generations cannot just be left largely to market forces playing, for example, against local authorities”. These issues demand national strategic thinking and planning of the highest quality.

20:22

[Lord Whitty]

My Lords, I am grateful to the noble Lord, Lord Teverson, for starting this debate and will go on to agree with quite a lot of what he says. However, I detected a note of slight depression in his voice at the paucity of attendance in this House, which reflects a rather longer-term lack of attention to energy efficiency in the spectrum of energy issues facing us. I was the Minister responsible for energy efficiency for several years in this House, among other responsibilities. When Defra had a debate on hunting about 500 noble Lords were here, but as soon as we got on to energy efficiency, we had about the same number as we have tonight. That reflects a bigger picture because energy efficiency is not sufficiently highly regarded in Whitehall and among other departments; nor, in many respects, is it among industry and society as a whole.

My basic theme tonight will be that the Government need to be much more aggressive in proclaiming the benefits of all dimensions of energy efficiency and in making sure that business and society get engaged in developing better energy efficiency in our country. The noble Lord, Lord Teverson, is quite right that the document that he referred to did not receive great publicity. It spells out all the benefits and some of the proposals for dealing with them, but it is pretty incomprehensible to the vast majority of people and was not picked up at all by the media. However, as it says, the return on investment pound for pound in energy efficiency is hugely higher than from the same amount of money invested in other aspects of energy and in most aspects of industry. The return is huge and, of course, energy saved is also carbon saved and is the most efficient way of saving on greenhouse gases.

We see a lot in the papers about shale gas, the nuclear option, whether Mr Putin is going to switch off the gas and the fact that there is a bigger coal burn than was anticipated in Britain, Europe and the rest of the world—all of which is setting back the kind of issues my noble friend Lord Judd referred to at the beginning of his remarks, in terms of climate change.

Energy efficiency is vital and we need to proclaim that from the rooftops, not add it on as the final chapter of every energy Bill and White Paper that we have seen over the past 20 or 30 years. We have to be careful not to overclaim, because as in the field of climate change and renewable technology, there are a lot of sceptics out there, who seize on any flaw in our argument. Energy saved is not 100% saved because there is a rebound effect and there are people out there who will therefore write off investment in energy efficiency.

Obviously, people use money saved from cutting their energy bills on other things, including more energy for something else or simply to keep their homes warmer. There is a rebound effect. The Government put it fairly low, at 15% for domestic consumers and almost nil for industry. It may be higher than that but it is never 100%; it is rarely more than 20% or 30%. It is a vast improvement to invest in energy efficiency, compared with investing anywhere else.

Of course, despite the fact that the public, business commentators and the media express very little interest in this area, we have had an era of hyperactivity from the Government, and rightly so. It was true of the previous Government—we did some good things, as have this Government—but we ought to be on the verge of a new era in this respect. We have the Green Deal, about to be launched properly—we have had a soft launch; I do not know if anybody noticed it—and we have smart meters. I never know why the two strategies are not combined because that would make a lot more sense to householders and consumers

We should recognise that a huge amount of work is being done by DECC in preparing for the launch of the Green Deal: accredited assessors are being trained, the products that are eligible for the Green Deal are being defined, the regulations are being put in place, and the Green Deal Finance Company is being set up. But this all starts in about six weeks’ time and there is hardly a punter out there who knows anything about it.

To a large extent, the same was true of smart meters. We now have standards for smart meters. In 2014 they become mandatory: all utility companies will be obliged to install smart meters in every home in the country, supposedly, over a period of five years—a massive conversion programme. How many householders actually know about it? About 40%, apparently, have vaguely heard about smart meters; a much smaller proportion know what they will do, how to use them and the benefits they will bring to consumers and society.

As a minimum, we need a major education and information campaign on these two programmes, and we need it now. It needs to be government-led; it must not be seen by householders as a marketing exercise by particular companies. Unfortunately, the companies involved in setting up something as complex as the Green Deal include energy companies and local builders, with banks providing the financial back-up. They are all absolutely needed and provide a huge amount of expertise, but they are not sectors that are hugely trusted by the average punter. We need that trust, which only government can convey.

The noble Lord, Lord Teverson, referred to the digital TV conversion. I was a bit sceptical that we would manage to deliver that programme, but of course it was delivered on a rolling region-by-region programme, whereas with the Green Deal and smart meters we are starting everywhere at the same time and hardly anybody knows about it.

We need a well resourced strategy of consumer information and engagement. Only a few weeks ago, the Minister said that we would be getting a strategy on engagement very shortly. Time is running out for 28 January. Will we get it before Christmas? Will we know what kind of programme is being run or supported by the Government before the Green Deal comes into play? Will we have a central delivery body, as elements of the industry advocate? At what stage will the Minister know the answers?

Of course, energy efficiency is not just about passive measures to improve the structure and resilience of buildings. At least two other dimensions should be included in an energy efficiency strategy. One is the issue of use. Even new buildings built to an extremely high standard do not in the event perform to that standard because the users do not know how to make maximum use of them. That is partly because the developers and architects are rarely the actual occupants and users; but there are also issues of product standards in our homes, in industry and in public buildings. The second dimension is the inefficiency in the system of distribution and transmission of electricity and gas, where a huge amount of heat is lost. We have never properly developed combined heat and power into being a normal part of industrial and domestic residential developments. Yet it can save 30% of what we generate in even the most efficient forms of energy generation, which disappears almost immediately into heat. We need far better development of our systems so that we use this heat and maximise the efficiency of the energy that we generate.

Some of the most obvious things are still a problem in parts of the country. I wrote a report last year on Northern Ireland, for example. The vast majority of households and small businesses in Northern Ireland still use oil for their heating, which is both expensive and extremely damaging in terms of carbon emissions. It would be much more efficient simply to connect them to the gas network. The same is true of parts of rural England and Scotland.

Almost my last point is this: the noble Lord, Lord Teverson, referred to the recent announcement by E.ON and the other energy companies. Clearly, price and the expectation of increases over the next few years will drive people and industry to look at energy efficiency more closely. However, the present tariff structure in our energy system for domestic consumers and in the contracts that the energy suppliers make with industry is doing exactly the reverse. We still have a situation where the more you use, the cheaper energy becomes. While the Government are struggling to make a reality of the Prime Minister’s commitment to offer everybody the cheapest tariff—I have a Question about this later this week—they should also look at how we can get Ofgem and DECC to move towards a tariff system that encourages rather than discourages energy efficiency.

20:33

[Baroness Worthington]

My Lords, I am grateful to the noble Lord, Lord Teverson, for initiating this debate which gives us an opportunity to discuss the Government's energy efficiency strategy. A number of noble Lords have commented on the fact that to date this has probably not received its due attention. It is a shame there are not more noble Lords in the Chamber, which again reflects the fact that the strategy is not receiving the attention it deserves. Energy efficiency and the management of our demand for energy should have a special place in energy policy as that is the only policy which directly addresses all three elements of the energy trilemma: namely, that we seek to reduce carbon emissions while increasing the security of supply and keeping costs low. Reducing our demand for energy meets all of those objectives. One would therefore assume that it would take centre stage in the newly published Energy Bill. However, a quick search of the Bill reveals that energy efficiency is not mentioned once and that demand reduction is only mentioned twice. This compares to nuclear which is mentioned 350 times. I acknowledge that this is a crude methodology, but it gives a clear indication of where the Government's priorities lay in the formation of that Bill. Nuclear may help to reduce carbon, and it does help to diversify our energy sources, but if press reports about the strike price are to be believed, it may not be cheap. Recent reports of yet more budget overruns in France, where EDF is building a reactor of the same design as that proposed for Hinkley Point, are not encouraging.

The one area of the Bill that talks about managing demand for energy is under the capacity market mechanism described in Chapter 3. This section is, however, merely enabling and there is no plan to introduce the mechanism before the end of the decade. A consultation document published alongside the Bill shows just how far we are from a well-thought-through demand reduction policy. Consultation on details is not expected until late 2013. Surely, if we are interested in meeting our carbon budgets and security supply objectives at least cost, this should be the first policy pursued. Why is it taking us so long and why do we not have a more clearly defined strategy? The answer is that, just as the department’s budget is dominated by spending commitments on nuclear waste and decommissioning, its intellectual capacity has also been absorbed with the question of how to ensure there is investment in a new fleet of nuclear power stations. I am not saying that those are not needed but we need to have balance in our policy. We really ought to be doing more on energy efficiency.

Chapter 3 sets out the carbon market mechanism. That at least provides an important stepping stone towards the valuation of services that reduce our demand for energy but there is no rationale for delaying implementation of this element. The sooner we start to work on how to manage our energy the better. Only then will we be able to ensure that we are building the capacity we need, not simply the capacity that we imagine might be needed. My friend in the other place, Alan Whitehead MP, has written extensively and eloquently on this topic and recently suggested that we should use the Bill to introduce a market for decapacity payments as soon as possible. This is an interesting idea worthy of greater exploration.

How we define decapacity payments would obviously need discussion but it could be that they are for those activities which deliver permanent and active demand reduction measures. This could help us to focus particularly on activities which reduce our peak demand. At the moment, we have a very difficult demand profile with big spikes in demand on winter evenings. Our supply system has to have enough capacity to catch these peaks, which means we always have a large surplus in capacity during the remainder of the year. This oversupply is currently at very high levels. When Ofgem warns that our supply capacity could fall to 4% above demand, it is quoting capacity in excess of peak, not demand in the intervening periods. If we can reduce the peak, we will not need to build as much replacement capacity to maintain that margin of error, saving everyone money.

The sorts of activities that could qualify for a decapacity payment include those which currently fall between the stools of existing energy efficiency policy. One example I have seen at first hand is voltage optimisation, which can be very effective. I visited Chaucer Technology School in Canterbury and saw how it had reduced its electricity bills by 13% through voltage optimisation, saving £8,000 per year. It is going to invest that money, alongside money saved by fitting a biomass boiler, in LED lighting. That is another technology that could be supported as a decapacity measure.

That investment by the school was facilitated by the Salix finance facility, a very successful policy introduced under Labour by the Carbon Trust. It provides zero-interest loans to public-sector buildings to invest in energy efficiency and demand reduction. To date, it has funded over 9,000 projects, valued at £194 million, which over the lifetime of the projects will reduce emissions by 4.5 million tonnes. The initiatives currently facilitated by Salix must be encouraged and incentivised across the country. It is quite notable that the Government’s energy efficiency strategy barely mentions Salix. It is there but only in an annex. Is the Minister aware of the work of Salix? Could she outline the department’s plans for it in the future?

To return to decapacity, as mentioned before, a number of technologies could be very usefully brought forward by such a mechanism. I talked about LED lighting and voltage optimisation. There is also smart metering, and efficient pumps and motors. These make up a big portion of our non-domestic electricity demand and should be incentivised more.

My noble friend Lord Whitty mentioned the use of tariffs. It is definitely true that with the advent of smart meters we should be able to have a much more flexible demand profile, moving our demand away from peak times and increasing the efficiency of our system. Those time-of-use tariffs could, when aggregated, have a very big impact on our system and should be supported as a priority. Could the Minister comment on the idea of the early introduction of a decapacity incentive mechanism in the context of Chapter 3 of the Bill? This could receive widespread support and we would encourage DECC to deploy more resources in this area.

In speaking about energy efficiency, it is usual to focus on the end use of energy and this evening noble Lords have, indeed, talked much about the numerous policies that exist in that area. I would like to focus a little on upstream energy efficiency which is an overlooked area of policy which we should take seriously. The efficiency with which we convert primary fuels—that is coal, oil and gas—into electricity is very important in defining how efficient we are in carbon terms across the whole system. Electricity generation is still the biggest source of CO₂ and how we make it is therefore important. During the last dash for gas in the late 80s and 90s, we made significant reductions in our emissions because we replaced ageing coal plant with new, cleaner, gas plant. Not only was the fuel cleaner but the stations burning it were more thermally efficient. This is a very important point and there has been no progress in policy terms on it since then. So we find, in 2011, that the thermal efficiency of our gas plant is close to 50%, whereas our coal fired stations are only 35.7% efficient. In 2011 we relied on, and in 2012 are still relying on, these inefficient stations more than on gas because of high gas prices while coal stations are still operating at high load factors. Much of our old coal will come off the system but 20 gigawatts of old coal capacity will remain on the system, much of it built in the 1960s. We lack any direct strategy that addresses the energy efficiency of upstream electricity generation. The one policy that did exist—the IPPC directive—was lost when there was deregulation in favour of the EU Emissions Trading Scheme. That and other efforts to price carbon have so far, sadly, failed to provide a strong incentive. Will the Minister give assurances that the Government will include upstream energy efficiency in power generation? Can we expect measures to be brought forward that will help to improve the situation now and in the future?

I have spoken for some time without mentioning the policy which the Government consider to be the game-changer in respect of energy efficiency: the Green Deal. The noble Lord, Lord Teverson, mentioned it and I am grateful to my noble friend Lord Whitty for introducing it to the debate. I am not fully persuaded that this is the right policy to unlock these savings. I have worked in this area for a number of years and I have not noticed a huge demand from people asking for new loan structures to enable them to invest in energy efficiency. My fear is that, given that the interest rates are going to be relatively high and there will be penalties for early repayment, this might not deliver as we would hope. I hope I am wrong and time will, of course, tell. I agree with the comments of noble Lords that it needs a much more concerted effort to communicate this policy to members of the public and businesses. I am told that very many businesses simply assume that it does not apply to them. We have a very big education job ahead of us if this policy is going to succeed. I urge the Government not to become overly confident or complacent in expecting that the policy will deliver. It is entirely based on the desire of people to take it up, so we should not be using its existence as a reason not to look at other policies in this area. I noted a statement in the consultation document on demand reduction that there was a strong case that we do not need any more measures in the domestic sector because of the presence of this policy. I would urge caution, because it certainly has not delivered yet and we should still be looking at broad-based measures for demand reduction across all sectors.

I am running out of time, but I will finish by saying that we do not yet have an energy efficiency strategy: we have a very nice document, a lovely MACC curve and lots of fine words about the potential but, echoing the words of the noble Lord, Lord Teverson, we still do not know how the Government are going to get on and deliver. I urge them to do so.

20:45

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, I very much welcome the opportunity to focus on this particularly important aspect of energy and climate change policy. I am grateful to my noble friend Lord Teverson for raising this debate at a very opportune time. He raised a number of points which I, too, will touch on and feel are worthy of repetition. Of course, I will try to answer as many questions as I can. If there are any I cannot answer tonight, I will write to noble Lords and place copies in the Library.

Last month, the Government not only published the energy efficiency strategy but introduced the Energy Bill, which includes electricity market reform, a landmark change that will attract the investment we need to replace our ageing energy infrastructure with a more diverse and low carbon energy mix. As noble Lords have mentioned, we have also launched a consultation on how we can further encourage electricity demand reduction. Today, we have provided the details of how the CRC energy efficiency scheme will be simplified. We are making great strides in this area. I am disappointed that the noble Baroness, Lady Worthington, thinks that the Government are not doing enough. When the Bill arrives in this House, we will have plenty of time to discuss many of these issues.

All noble Lords have made some extremely important and considered remarks, even if I do not agree with them all. However, I agree with the noble Lord, Lord Whitty, that an extremely important subject such as this, which affects everyone, needs to have a narrative that is absolutely right and understandable. Perhaps we need to communicate our messages a little more clearly.

Although debated since the 1970s, there has not been a constant focus on increasing the UK’s energy efficiency. To address this, the Government created the Energy Efficiency Deployment Office in DECC in February this year. The energy efficiency strategy is EEDO’s first significant project and it provides the platform for energy efficiency policy for the coming decades. The strategy identifies the energy efficiency potential in the UK economy, the overarching barriers to achieving that potential and the actions that we are already taking to address those barriers.

As my noble friend mentioned, we could be saving 196 terawatt hours, which is equivalent to 22 power stations, through socially cost-effective investment in energy efficiency. Greater energy efficiency can be, and is, an extremely positive force in our economy. The energy efficiency sector in the UK already accounts for around 136,000 jobs in the UK and, during 2010-11, created sales of £17.6 billion. These sales have grown more than 4% per year since 2007-08 and are due to grow by 5% per year between 2010-11 and 2014-15. Nevertheless, energy efficiency has significant further potential in the UK. With the right market we could unlock further investment in energy efficiency, helping to generate further economic growth and jobs. Our analysis suggests that the Green Deal and the energy company obligation alone could support up to 60,000 jobs across the UK in 2015.

Investing in energy efficiency measures often requires local labour, can increase the productivity of the economy by releasing resources and, over the long term, can stimulate innovation. Developing a mature, knowledgeable energy efficiency market will also open up significant further export opportunities for the UK as the global effort to combat climate change ramps up. There are also savings to be made by householders and businesses. Research has suggested that, if no energy efficiency gains had been made since 1970, current energy use would be almost double its current levels, adding about £1,000 to the average domestic energy bill.

Improved energy efficiency also has obvious wider benefits, including reducing our greenhouse gas emissions and improving our security of supply. If we can reduce our demand for energy, we can achieve a cleaner, more sustainable energy system that is less reliant on primary fuel imports. Be in no doubt, energy efficiency needs to be a key part of our energy policy mix if we are to achieve our target of an 80% reduction in greenhouse gas emissions by 2050.

Achieving these multiple benefits is not easy, and the energy efficiency strategy makes clear the barriers that we face. We need to stimulate the market, ensure that consumers trust the information provided to them and make energy efficiency salient to those who could benefit from it. Society does not currently value energy efficiency as it could.

The Government are already taking significant steps to address these barriers and deliver the necessary culture shift. We are supporting consumers to cut energy waste and reduce bills by providing help to pay for and install energy efficiency measures. Our Green Deal and smart meters policies will help households make further efficiency improvements and put them back in control of their energy use.

The Green Deal has been designed to help energy bill payers keep their homes warm while saving money. It will help finance the installation of a broad range of improvements, including insulation, double glazing, microgeneration, lighting and heating. It will pave the way for one of the biggest retrofit programmes in our history. The first Green Deals will be available to consumers from the end of January, and the energy company obligation will provide extra help for those most in need and for properties that are harder to treat. Smart meters will give consumers near-real-time information on their energy consumption helping them to control and manage their energy use and make savings. Smart meters are already available, and energy suppliers expect to install significant numbers of smart meters before the start of the mass rollout at the end of 2014.

To address energy efficiency in the wider economy, we are also providing access to finance through the recently launched UK Green Investment Bank. This includes two specialist non-domestic energy efficiency funds, worth £50 million each. With the required match-funding from the private sector, this will create up to £200 million of investment to be spent by April 2015.

On 29 November, the Government also published the electricity demand reduction consultation. This sets out ambitious, economy-wide proposals to reduce electricity demand, building on the long-term strategic framework of the energy efficiency strategy. Taking measures to cut electricity use can be much cheaper than building new generation. Our analysis suggests that there is potential to go further than existing policies, so the consultation seeks views on different ways in which this might be done using market-wide financial measures or targeted financial incentives, such as scrappage schemes.

As a package of measures, our energy efficiency policies should deliver savings of 163 terawatt hours in 2020. This is an energy saving equivalent to 19 power stations. Our strategy is to achieve every bit of this potential, but also to look for more. It is innovative ideas such as the Green Deal, the Green Investment Bank and electricity demand reduction that will help make us world leaders on improving energy efficiency. Our efforts to achieve more will come in steps, and we cannot yet anticipate everything we will achieve cost-effectively, but the consultation is there on EDR, and we should debate what can be achieved. Next spring, we will consult on audits for bigger business and seek to understand the appetite for making audits have real impact.

I shall try to respond to some of the points that noble Lords have raised. My noble friend Lord Teverson asked about the transition period. Energy suppliers will continue to make available insulation measures as they continue to undertake mitigation action in the first few months of 2013. The Green Deal offers will begin to come online in January next year.

My noble friend also asked about a comparison with the digital TV switchover. We have sought to learn from the switchover but this is not like for like—the smart meter rollout will be different; it is also is led by energy suppliers and so it cannot be on a region-to-region basis. We are confident that the industry knows that it has to do a lot of work to ensure that information is available to consumers.

My noble friend also asked about our handling of the energy efficiency directive. As well as leading on the implementation of the energy efficiency strategy, EEDO will provide the central co-ordination point for the implementation of EU energy efficiency directives. Departments responsible for policies affected by each article will feed into EEDO, which will provide support and ensure consistency.

I am fast running out of time so I think it would be appropriate if I do my concluding remarks and then write to noble Lords. It would be unfair to skip over responses very quickly without giving some detail. I thank noble Lords for their important contributions and I look forward to future debates. I hope that noble Lords will support the Government in their endeavours to strengthen the energy efficiency market in the UK. Our strategy is an important document that sets out a long-term challenge for the UK but it is important also that it sets out an opportunity. It is clear that greater energy efficiency must be at the centre of UK energy policy in the coming decades. This country has an excellent record of using its resources effectively, and energy should be no different. In achieving an energy efficient future we can increase energy affordability, reduce carbon emissions and deliver a more secure energy system.

Crime and Courts Bill [HL]

Monday 10th December 2012 Lords Chamber

Report (3rd Day) (Continued)

20:57

Amendment 113GD

Moved by

[Baroness Linklater of Butterstone]

113GD: Schedule 16, page 251, line 33, at end insert “, and
(c) which gives an opportunity to a victim or victims to talk about, or by other means express experience of, the offending and its impact.”

[Baroness Linklater of Butterstone]

My Lords, I have retabled my amendment following discussion in Committee with an amended wording that is possibly clearer and specific to the restorative process. This is all about giving the victim the opportunity to talk about the whole experience of the offence they have suffered or to express their feelings in some other way which is better or easier for them. It is nothing to do with compensation or financial need, but specifically the personal, human dimensions of the event. It could also involve others who have been directly or indirectly involved in the event or events or possibly in supporting the victim, which could involve family or other relevant people close to the victim.

This puts the victim at the centre of the process, always remembering, of course, that the purpose of RJ is for both victim and offender. The dialogue and engagement of both parties is at the heart of the restorative process—for each to hear the other articulating in whatever way they choose just what the experience was like for them, what they felt then and feel now, what it meant in order to make sense of the event, to come to terms with it all and to achieve some sort of closure. The chance to hear the offender apologise for what has occurred can mean a great deal to the victim, as can the opportunity to describe the impact of the event on his or her life. It can also be very helpful—not to say a revelation—to the perpetrator, as well as making him understand the results of his actions, of which he is often entirely oblivious.

21:00

What is really important is that the amendment makes it possible for RJ to be formally available in this country, and an integral part of the sentencing process and subsequent outcomes. It makes provision for the court to defer sentencing following a guilty plea for a conference to take place, or for some time to be given to the victim to decide if this is what they really want. There will also be provision for post-sentencing restorative conferences in due course, usually in more serious cases. This will also mean that there will be a need for the development of sentencing guidelines so that the courts feel comfortable with the new provisions. After all, it is in the courtroom that the whole process will start, with the sentencer making the crucial decision to allow for the possibility of a restorative conference. This is likely to require some considerable training so that all concerned really understand and appreciate the benefits to be gained by the whole process, and how to take account of the outcomes at the point of sentence. This will involve new skills and understanding, not just in court but on the part of many other facilitators, administrators and sentencers who will have to realise that the Government intend that the option to defer for RJ should be available in all types of case. This is likely to take time to develop and evolve and, as skill and confidence grows, it will become clear that this is a process that will certainly be applicable to more than just those on the cusp of custody. Above all, it is important that the courts can feel confident that the process is being delivered following best practice, with skill and quality. This means investment in the necessary capacity at a local level.

This is a very important time for restorative justice and all those likely to benefit from it. I look forward to hearing confirmation from the Government that they, too, are confident in their commitment to taking this new way of working forward. I beg to move.

[Lord Rosser]

My Lords, briefly, we await with interest the Government’s response. Certainly, the amendment would appear to fill in a gap in this part of the Bill, since one’s understanding of restorative justice was that it was at least as important, if not more important, for the victim as it was for the offender. Yet while the relevant clause provides for participating,

“in an activity … where the participants consist of … the offender and one or more of the victims”,

it then goes on to say,

“which aims to maximise the offender’s awareness of the impact of the offending concerned on the victims”.

It would appear as though the view in this part of the Bill is that the offender’s needs and awareness are regarded as rather more important than those of the victim or victims. I conclude by saying that my understanding of restorative justice is that it is there for the benefit of the victims at least as much as, if not more than, that of offenders.

[Lord Ahmad of Wimbledon]

My Lords, I welcome the enthusiasm and support for restorative justice from across the House. Indeed, at the recommital stage of the Bill my noble friend Lady Linklater moved an amendment in relation to pre-sentence restorative justice. That amendment added an explicit reference to restorative justice meeting the needs of the victim.

Her Majesty’s Government entirely agree that RJ, when used appropriately, can be an extremely positive experience for victims. For example, our own research has shown that 85% of victims participating in direct RJ conferencing with their offenders were satisfied. We therefore gave an undertaking to consider the amendment in advance of Report. I assure the House that we are fully supportive of the intention behind the amendment. We consider that the phrase,

“meet the needs of the victim”,

needs more explicitly to reflect the benefits provided by restorative justice. Victims may have many needs as a result of a crime, and we should be clear about which of them RJ may meet.

I am sure that noble Lords will agree that one of the most important benefits of RJ is to give victims a voice in the criminal justice system. The amendment therefore seeks to reflect this. It puts an equal emphasis on victims and offenders in defining RJ requirements by focusing on victims’ need to have their voice heard. It also seeks to cover the different ways in which victims might want to express themselves. The phrase, “talk about” seems to us a direct and simple way of describing what might happen in the majority of cases—victims talking at a face-to-face meeting or mediation about the impact of the offending. The words,

“or by other means express experience of”,

is intended to cover other ways of sharing experience, thoughts and feelings.

In short, we appreciate that some victims may be too traumatised, or otherwise unable or unwilling, to talk about their experience. Instead, they may want to express their feelings in writing or drawing, or through other means. We therefore believe that the amendment will strengthen the role of victims in the restorative justice process. In the light of this, the Government propose to accept the amendment.

Amendment 113GD agreed.

Amendment 113GE

Moved by

[Baroness Linklater of Butterstone]

113GE: Schedule 16, page 252, line 6, at end insert—
“Part 2AProvision for female offenders7A (1) Contracts made by the Secretary of State with probation trusts shall require each probation trust to make appropriate provision for the delivery of services to female offenders.
(2) Provision under sub-paragraph (1) shall include provision for women to carry out unpaid work and participate in programmes designed to change offending behaviour in groups consisting only of women.”

[Baroness Linklater of Butterstone]

My Lords, I shall now speak about provision for women offenders. I echo the Minister’s remarks in relation to RJ, which he said gives victims a voice. What I hope to gain from this amendment is to ensure that the Bill gives women a voice. We are returning to the issue of specific provision for women who offend because of the recognition around this Chamber and in the country at large of the importance of this issue and the need, above all, to give statutory underpinning to the policies and plans to meet women’s needs.

When we discussed this issue in Committee, the Minister affirmed his shared understanding that women are different and need a different response from our criminal justice system. He reminded us that the Government have appointed a new women’s champion in the MoJ, Helen Grant MP, which is a positive and encouraging move. It is also clear that a specific women’s strategy will be developed. It is in this context that we have agreed on Amendment 113GF, whereby participation in community-based programmes will be provided,

“with the particular needs of women in mind”.

We hope that this new focus will ensure that this is the case in community-based provision, too, and women will not be relegated to provision designed for men. There is a clear understanding at the moment that the appointment of the new Minister, whom we greatly welcome, will give a focus on and impetus to the development of a new strategy for women. There is a difference between a strategy and having a statutory place in the MoJ’s scheme of things, and that is what we seek.

I do not think that the Minister needs reminding that these women not only have a different offending profile, but that they tend to serve very short sentences, with 58% of those in custody serving six months or less, 81% of whom have committed non-violent crimes. That is a very high proportion. However, the personal trauma that they have suffered includes more than half having suffered domestic violence and a third having been sexually abused. This, in turn, means that their needs are particularly acute and sensitive, which is reflected in the fact that 31% of all incidents of self-harm in prison are by women, although they represent only 5% of the prison population.

A recent YouGov poll commissioned by the Prison Reform Trust showed strong public support for public health measures to help tackle their offending, in particular drug treatment, help with alcohol misuse and mental health care. It found support from more than two-thirds of those polled.

It follows that it is not only these women who suffer the trauma but also their children, for whom they are the principal and often the sole carers. It is estimated that each year more than 17,700 children are separated from their mothers by imprisonment. The report on such children a few years ago showed how the loss of a parent is experienced as a bereavement. This is why it is vital that, in all but the most extreme cases, community-based sentences are a necessity if the ripples of damage are not to be extended to the next generation while the current needs of these mothers are being met. We owe this to women and children alike. We should also be aware of the implications these figures have for our future society.

We know that the Government have provided £3.7 million to probation trusts for 31 women’s centres, which is extremely welcome. We also know that NOMS funding for women’s centres is guaranteed only until March next year. I look forward to the Government’s response to this and to seeing what assurances they can give us. The Government’s strategy, with the added focus that Helen Grant will bring, will be very important to this provision’s sustainability. It absolutely needs statutory protection to ensure continuity and maintain the necessary priority and profile among all the competing demands on the public purse.

There are worrying plans to commission justice services on a payment by results basis, which immediately puts much of women’s community provision at risk. This is because small voluntary organisations simply will not be able to compete as providers as they currently do. Along with the probation trusts, they may well find themselves competing with large private sector organisations, with the inevitable loss of contracts. This would be a catastrophe and further illustrates why women must have their statutory place as part of our criminal justice provision, which this Bill represents.

It will be some time before another such Bill will come along, and women’s needs are too pressing and important in our public responsibilities to be left to an MoJ strategy alone. Following a visit to Holloway in November, the Secretary of State for Justice Chris Grayling said:

“I saw at first hand the very different challenge we face with women offenders”.—[Official Report, Commons, 13/11/12; col. 163.]

I hope that, with this insight into the needs of women who offend, he and Helen Grant, along with the Minister, will recognise the desirability and necessity of women having their statutory place in this Bill. I beg to move.

Amendment 113GF (to Amendment 113GE)

Moved by

[Baroness Hamwee]

113GF: Schedule 16, line 9, leave out “in groups consisting only of women” and insert “with the particular needs of women in mind”

[Baroness Hamwee]

My Lords, I would like to explain this amendment to noble Lords who might think it is a little odd. My noble friend and I discussed the amendment that she has just moved and I suggested the wording that your Lordships will see on the Marshalled List, which my noble friend thought was a good idea. At that point the first amendment would have been moved by the noble Lord, Lord Ramsbotham, so we sort of knew what we were doing. Other things moved around us.

The reason for the alternative wording was that it seemed to us that to provide something wider than,

“groups consisting only of women”,

would mean that what was being called for was less prescriptive as to the means, and potentially more affordable, which we hoped would appeal to the Government. However, what is particularly important is that it would widen what is known in the terminology as “the ask”.

I will briefly reinforce what my noble friend said about the children of women offenders who are given custodial sentences, and the importance of looking at the issue in the most hard-hearted way. Separating children from their mothers puts a strain on the whole family, if there are other members of the family, and undoubtedly does damage to the children. The advancing work on the neurological impact on children of being separated from their mother is becoming better known. In hard cash terms as well as in humanitarian terms, trying to reduce to the absolute minimum the number of times this happens can only be to the good of society and the public purse.

[Lord Hylton]

My Lords, I venture to intervene in this debate only with trepidation and because in the past I have spoken about the position of women in the criminal justice system. The two noble Baronesses who spoke were absolutely right to emphasise the question of children who are separated from their mothers by custodial sentences. I hope very much that the Government will do their best—I hope that they are listening—to begin implementing the recommendations of the report of the noble Baroness, Lady Corston. Among the things that she asked for were centres for women who are at risk of offending, who have already offended or possibly who need rehabilitation post-offending, post-sentence or during sentence. It would be a great step forward if we could have at least one such centre somewhere in England. Will the Government take this seriously and consider having one experimental centre to see what good results it can achieve? I hope that the Government have also taken on board all the other arguments in favour of the amendment.

21:15

[The Earl of Listowel]

My Lords, as treasurer of the Parliamentary Group for Children, I feel particularly concerned about this Question. I am also particularly grateful for, and pleased to learn about, the investment that the Government are making in these centres—prisons without walls, as the noble Baroness, Lady Corston, called them in her report. I feel, with her, that if we are going to make a difference in this area, we need to put the position of women on a statutory basis. It may be helpful if I quote some statistics about women and families from the Corston report. It reveals that 34% of women in prison are lone parents. Around two-thirds of women were living with their children before they came to prison. One-third had a child under five. Only 9% of children whose mothers are in prison are cared for by their fathers. Around 18,000 children each year are separated from their mothers by imprisonment. Only 5% of women prisoners’ children remain in their home when their mother has been sentenced to custody. As many as 25% are cared for by grandmothers, 29% by other family members or friends, and 12% are in care, with foster parents or adopted.

The noble Baroness, Lady Corston, goes on to say:

“One of the most alarming statistics that I have seen reported appears in the Revolving Doors Agency’s survey in which 1,400 women serving their first sentence in Holloway were interviewed. 42 women had no idea who was looking after their children. Quite apart from the dreadful possibility that these children might not be in a safe environment, this must cause mothers great distress and have deleterious consequences for their mental health”.

I am very grateful to the previous Government for their response to the Corston report and for the current Government’s work in this area, but I hope the Minister responds to the request for a statutory basis for women in the probation area.

[Lord Rosser]

My Lords, in her report a few years ago my noble friend Lady Corston drew attention to the reality that existing provisions, both in prison and in the community, are largely geared to male offenders and the needs of male offenders. The Corston report called for separate services, locally available, geared to the needs of women offenders in order to reduce as far as possible the disruption to family life and the impact on children The needs of their children and families have a considerable bearing on the ability of women offenders to attend programmes and avoid breaches of the order, and on the effectiveness of those programmes in having a positive impact on reducing reoffending. My noble friend’s report also drew attention to the number of female offenders in prison who had been, or were, the victims of domestic violence and sexual abuse, which are not normally issues that have to be taken into account by providers of services, or addressed by the skills they have to provide for male offenders.

A recent joint inspection report on alternatives to custody for women offenders highlighted the lack of women-specific provision for unpaid work and offending behaviour programmes, though it also said that women-only provision where available was often very successful. Investment in credible and appropriate alternatives to custody for women is essential. Programmes should be specifically designed for female offenders and address their needs. As well as reducing reoffending, community sentences designed specifically for women should help reduce the rate of breach as they should be capable of better fitting with women’s needs and responsibilities.

Schedule 16, dealing non-custodially with offenders, actually makes no specific provision or reference to women. The amendments seek to address these concerns by ensuring that probation trusts are required to make appropriate provision for the delivery of services to female offenders that will include provision for women to carry out unpaid work and participate in programmes designed to change offending behaviour with the particular needs of women in mind. I hope the Minister will accept this group of amendments and recognise the significant gap created by the absence of specially tailored arrangements for dealing with women offenders, most of whom, as has already been said, have committed non-violent offences, and whose sentences if they end up in prison can lead to the break-up of families, with potentially disastrous consequences for all concerned, not least the children who can end up having to go into care.

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

My Lords, we are fully aware of the point that the noble Lord, Lord Rosser, made in closing. One of the special factors about women in the criminal justice system and in prison is that the impact of their incarceration is an impact not only on themselves but also on their children and their families. For that reason, the Government have taken the Corston report of 2007 very much as the template of their approach to women. I have benefited from having a number of conversations with the noble Baroness, Lady Corston, over the past couple of years about the implementation and carrying forward of the report. I know that my colleague Helen Grant has also met the noble Baroness to discuss these issues.

It is interesting to note that the Government accepted 40 out of the 43 recommendations in the Corston report and made a range of commitments across government departments to take them forward. There have been real improvements in the past five years under successive Governments, including significant investment in women’s community centres to address holistically the underlying causes of women’s offending such as drug and alcohol addiction, mental health issues and histories of abuse.

The female prison estate was reduced by 400 places with the closure last year of HM Prison Morton Hall. We have about 4,000 women still in prison. However, the cross-government strategy includes: piloting and, subject to business case approval, rolling out liaison and diversion services in police custody and the courts by 2014; the piloting of drug recovery wings for drug and alcohol-misusing prisoners at three women’s prisons—New Hall, Askham Grange and Styal—and the development of intensive treatment-based alternatives to custody for offenders with drug or mental health problems, including four women-only services at Wirral, Bristol, Birmingham and Tyneside. In addition, there is the implementation of particular provisions in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 with regard to remand and breach, which are expected to reduce the number of women in custody, and the delivery of the Home Office-led Call to End Violence Against Women and Girls, which will address the high levels of abuse experienced by female offenders. The commissioning of women’s services, including women’s community services, has been devolved to local probation trusts to ensure that provision is integrated into local services. This year’s £3.78 million of funding is now embedded in NOMS’ community budget baselines to allow for continued support of provision for women.

As I indicated in Committee when we last considered the issue, I fully agree with noble Lords that it is important that the criminal justice system is properly responsive to the needs of female offenders. I share the view that it is also essential that we take account of women’s experiences and needs. That is why I am pleased that the National Offender Management Service is still rolling out the Women Awareness Staff Programme, currently with a focus on training the trainers, so that they can provide support to staff and voluntary and community sector partners working with female offenders. This covers issues such as self-harm, relationships and abuse, and is complementary to the Women’s Aid best practice framework, Supporting Women Offenders Who Have Experienced Domestic and Sexual Violence.

I am also pleased to confirm that the National Offender Management Service has been working to develop the evidence base around what works with female offenders. Over the coming year, this work will support the strategic approach to female offenders as set out in the National Offender Management Service’s Commissioning Intentions discussion document, published in October of this year. All probation trusts are required by the National Offender Management Service’s Commissioning Intentions document to make appropriate provision for women in the community to address factors associated with their reoffending, using third sector and private sector services, where appropriate.

The National Offender Management Service has also published information on the specific needs of women to support the commissioning of relevant offender services for this group as part of the commissioning round for 2012-13. Already probation trusts across the country are coming up with innovative, new approaches to working with women that reflect the local situation. There are many good examples of women-only provision in the community. For example, Nelson Probation Office in Lancashire has a women-only reporting day. In Durham in the Tees Valley, the trust provides women-only reporting centres in each of the six local delivery units, with community based support and childcare provision located at these points. In Derby, there is a women-specific programme addressing violent behaviour.

21:35

Going forward, Probation Trusts will be supported with, as has been mentioned, an additional £3.78 million of funding for women’s community services. This funding has now been embedded in the National Offender Management Service community budget baselines to support the provision of appropriate services for women. Trusts are currently discussing with the National Offender Management Service their proposals for women’s services in 2013-14, and will be challenged when these do not appear to be sufficiently robust.

It is essential that trusts have the freedom to make the best arrangements for each individual offender. In addition, the National Offender Management Service’s unpaid work operating manual requires that women should be allocated to work placements which take account of their particular needs. This includes providing flexibility to take into account childcare responsibilities or the need to be in a safe setting.

I mentioned in Committee that work was well under way on our promised strategic objectives for female offenders and that we planned to publish these by the end of the year. However, we are no longer in a position to do so. This is because, since my new ministerial colleagues took up their posts in September, we have been keen to review the current position, and we have all been looking closely at our policy on female offenders. As I said earlier, Helen Grant and the noble Baroness, Lady Corston, have met and the noble Baroness is aware that we are delaying it. I think delaying it is good news, because we will be able to reflect in the work when it is published the buy-in that was mentioned from the Secretary of State—a conviction by him that we need a vigorous, robust women-oriented strategy.

I know that my noble friend thinks that this would also be improved by a statutory commitment in the Bill, but I really do not believe that this is the case. I mentioned in an earlier debate the ability of some of my colleagues to look gift horses in the mouth on some of the progress we are making in this area. This is equally true as far as women are concerned. This Government—and certainly my department—have been giving a new urgency and a higher priority to services for women, and this will be reflected in the strategy and programme that we roll out. In the circumstances, I would ask my noble friends to withdraw their amendments.

[Baroness Hamwee]

My Lords, I do not think—at any rate, in my case—it is about looking a gift horse in the mouth. Rather, we are only looking at it in the mouth long enough to get it into the stable and close the door. However, I hear what my noble friend says. He stressed flexibility; he was stressing it before he even got to use the term. It has been clear to me for a long time that my noble friend does not use empty words on this subject and that his heart really is in this; I welcome that. To the extent that he can ever see amendments from these Benches as intended to be helpful, this one certainly was.

I, too, choose to look at the delay in the publication in a positive light, given the introduction that he gave it. I had intended to be helpful with this amendment; I will not accuse my noble friend of looking the gift horse of the amendment in the mouth, but I will beg leave to withdraw it.

Amendment 113GF (to Amendment 113GE) withdrawn.

[Baroness Linklater of Butterstone]

I beg leave to withdraw Amendment 113GE.

Amendment 113GE withdrawn.

Amendment 113H

Moved by

[Lord McNally]

113H: Schedule 16, page 255, line 24, leave out from “In” to “before” in line 25 and insert “paragraph 1(5) of each of Schedules 9 and 13 (certain requirements not to be included in orders to be complied with in Scotland),”

[Lord McNally]

My Lords, this group consists of three government amendments that, if not technical amendments, are certainly not controversial. Amendment 114 is intended to remove uncommenced elements of Section 67 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and make a minor consequential amendment to the Criminal Justice Act 2003.

I know that it might seem odd for this House to be considering again a provision that was debated so recently both here and in the other place, but it is right for us to do so. This amendment repeals provisions in the LASPO Act that, if brought into force, would mean that the courts could consider a case where an offender has breached a community order without reasonable excuse and allow the order to continue unchanged.

Having reconsidered their position, the Government do not think that it is appropriate for offenders to breach their community order and not face any sanction at all. We must ensure that both offenders and the public have confidence in community orders and take them seriously. Offenders will not take their order seriously if breaching does not have consequences. If an offender breaches a community order, we believe that a court should be able to take one of the three following actions: make the order more onerous; revoke the order and resentence for the original offence; or impose a fine. The last option allows the order to remain unchanged, while at the same time imposing a penalty for the breach. The courts did not have this power until it was included in the LASPO Act 2012. I am sure noble Lords will be pleased to know that it was brought into force on 3 December.

The Government believe that this revised framework provides the courts with the right options for dealing with failures to comply with community orders. It will still give the courts different options to tailor responses to breaches to individual offenders. However, it will also ensure there is a sanction of some sort for any offender who is found to have breached. Accordingly, on further consideration, we now believe that there is no good case for allowing offenders who fail to comply with court orders without a reasonable excuse to receive no penalty.

Amendment 114 also corrects a technical error in Section 150 of the Criminal Justice Act 2003. This section was amended by the Legal Aid, Sentencing and Punishment of Offenders Act, which prevents a court from making a community sentence where a mandatory minimum sentence for the new aggravated knife possession offences in the LASPO Act apply. The LASPO change inadvertently prevents the court from giving a 16 or 17 year-old a youth rehabilitation order, which is the youth equivalent of the adult community order for these offences. Amendment 114 corrects this technical error so that the new provisions work as they were originally intended to. Without this amendment, were the court to decide to set aside the mandatory minimum, it would not be able to give a youth rehabilitation order and would therefore have no option but to give a lesser penalty such as a referral order or a fine.

Amendments 113H and 113J are of a technical nature. The intention is to allow for the transfer of community orders and suspended sentences to Northern Ireland, where an order containing location monitoring under the new electronic monitoring requirement is made in England or Wales but the offender lives in, or is planning to move to, Northern Ireland. It is already possible to transfer existing orders to Northern Ireland, so this provision merely extends that capability to the new location monitoring provision that we are introducing in the Bill. Although location monitoring is not currently available in Northern Ireland under existing contractual arrangements, this will be addressed in the retendering of the contract in 2013. This provision will therefore enable appropriate cases to be transferred when the operational arrangements are in place in Northern Ireland. The transfer will be possible only where the court is satisfied that the appropriate arrangements are in place. This means that the tag will be capable of being fitted and the offender’s location will then be able to be monitored. If the court is not satisfied that the necessary tracking technology is available, the court in England and Wales will not be able to transfer the order.

Noble Lords will have noticed that the provision covers Northern Ireland but not Scotland. This is because at the moment there is no statutory provision for the imposition of tracking as a requirement in Scotland. If and when the time comes that Scottish courts can impose location monitoring as a requirement, we will bring forward legislation enabling the transfer of orders, including such requirements, from England and Wales to the Scottish jurisdiction. I beg to move.

[Lord Goldsmith]

My Lords, I rise slightly diffidently to ask a question about Amendment 114. I am not sure that I fully understood what the Minister said, though I am sure it is my fault. At one point I thought he was saying that the effect of Amendment 114 was to take out from LASPO an obligation to deal with breaches and insert instead a power to deal with breaches and give the court the opportunity to make its own mind up, but then I thought I understood him to be saying the opposite, that the purpose of this amendment is to ensure that where there is a breach of a community order the court is obliged to impose some penalty. I would be grateful if he would clarify that.

Perhaps the Minister could also clarify how it comes about that we are asked to amend LASPO quite so quickly and whether or not the passages that would be amended—indeed, removed—by this amendment were debated. I have no recollection as to whether or not they were, but it would be good to know if something that was debated, for example, in this House is now being removed in this way at 9.45 pm on the penultimate day of Report.

[Lord McNally]

My Lords, the noble and learned Lord is long enough in the tooth to remember other times when Governments have taken a second look at relatively recent legislation.

To clarify, Amendment 114 will remove uncommenced elements of Section 67 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The provision being removed would have empowered courts dealing with a breach of a community order to allow the order to continue unchanged. Not commencing the provision means that the court must make the order more onerous, resentence for the original offence or fine the offender for breach. In lay man’s language—which is the only language I can use, because I am a lay man in this—in the Government’s opinion, the LASPO Act left an option that they now wish to change, which is that breaches of the order could have gone unpunished. We do not think that that is a sensible way of getting people to take the orders seriously and therefore this amendment empowers the courts to make the order more onerous, resentence for the original offence or fine the offender for breach.

Amendment 113H agreed.

Amendments 113J to 115

Moved by

[Lord McNally]

113J: Schedule 16, page 255, line 26, at end insert—
“(4) pIn paragraph 3(1) of Schedule 9 and paragraph 6(1) of Schedule 13 (pre-conditions for imposing requirements where offender will be living in Northern Ireland) before the “and” at the end of paragraph (a) insert—
“(aa) in the case of an order imposing an electronic monitoring requirement within section 215(1)(b)—(i) that any necessary provision can be made in the offender’s case under arrangements that exist for persons resident in that locality, and(ii) that arrangements are generally operational throughout Northern Ireland (even if not always operational everywhere there) under which the offender’s whereabouts can be electronically monitored,”.(5) In paragraphs 3(3)(b) and (4) and 13(b) of Schedule 9 and paragraph 6(3)(b) and (4) of Schedule 13 (references to the pre-conditions) for “and (b)” substitute “to (b)”.
(6) In paragraph 4(3)(d) of Schedule 9 and paragraph 9(3)(d) of Schedule 13 (disapplication of section 218(4)) for “subsection (4)” substitute “subsections (4) and (9)”.
(7) In paragraph 17 of Schedule 13 (reference to the pre-conditions) for “and (b)”, in the second place, substitute “to (b)”.”

114: Schedule 16, page 255, line 31, at end insert—
“Part 4ACommunity orders: further provisionBreaches of community orders21A (1) Omit paragraph (a) in each of subsections (2) and (5) of section 67 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (amendments which would have turned duties to deal with breaches into powers to do so).
(2) In paragraph 9(6) of Schedule 8 to the Criminal Justice Act 2003 (which refers to provision that would have been made by those amendments) for “have the power” substitute “be required”.
Community order not to be made in case of knife etc offence attracting minimum sentence21B (1) In section 150 of the Criminal Justice Act 2003 (no power to make community order or youth rehabilitation order where sentence fixed by law)—
(a) the existing provision becomes subsection (1) of that section, and(b) after that subsection insert—“(2) The power to make a community order is not exercisable in respect of an offence for which the sentence—
(a) falls to be imposed under section 1A(5) of the Prevention of Crime Act 1953 (minimum sentence for offence of threatening with offensive weapon in public), or(b) falls to be imposed under section 139AA(7) of the Criminal Justice Act 1988 (minimum sentence for offence of threatening with article with blade or point in public or on school premises or with offensive weapon on school premises).”(2) In consequence of sub-paragraph (1), in Schedule 26 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 omit paragraph 19 (which would have made provision corresponding to the new section 150(2) of the 2003 Act but also preventing the making of youth rehabilitation orders).”

115: Schedule 16, page 258, line 13, at end insert “,
or information which is held with information so held;”

Amendments 113J to 115 agreed.

Amendment 115A had been withdrawn from the Marshalled List.

Amendment 115B

Moved by

[Lord Rosser]

115B: Schedule 16, page 260, line 24, at end insert—
“Part 8Reorganisation of the National Probation Service1 The Offender Management Act 2007 is amended as follows.
2 After section 15 insert—
“15A Power to reorganise the National Probation Service
(1) Any plans to reorganise the Probation Service for England and Wales must be instituted by regulations.
(2) Regulations under subsection (1) shall be subject to the affirmative resolution procedure of each House of Parliament.””

[Lord Rosser]

This amendment is similar to one that I tabled in Committee in order to give the Minister the opportunity to say more about the Government’s intentions for the future of the probation service. The amendment states that:

“Any plans to reorganise the Probation Service for England and Wales must be instituted by regulations”.

It adds that those regulations,

“shall be subject to the affirmative resolution procedure of each House of Parliament”.

Bearing in mind that in this Bill we are asked to agree to significant changes in community sentencing, which will be dependent on an effective and properly resourced probation service, the Government still cannot tell us what their intentions are for the probation service. It therefore does not seem unreasonable to agree to this amendment, which will enable both Houses to satisfy themselves that whatever changes the Government want to make to our probation service, they would not be in conflict with their objectives and changes on community sentencing contained in the Bill.

21:45

In Committee, I asked the Minister a number of questions, to which I received neither a specific answer then nor a specific answer in writing subsequently. I drew attention to the Minister’s statement that:

“I cannot imagine that any future structure would not draw on the experience and ethos that makes it such an excellent service”.—[Official Report, 30/10/12; col. 549.]

I asked what he meant by that and pointed out that it could mean that the Government were nevertheless still looking to hand over to outside contractors large parts of the network currently undertaken by the probation service; and that the experience and ethos to which the Minister had referred would be drawn upon because he would expect significant numbers of existing probation staff to be transferred to those contractors. I asked the Minister if that was an interpretation of his comments that he would either accept as accurate or not be prepared to exclude. I received no clear answer, even though it appears that the Government have indicated that some 60% of probation work will be put out to competitive tender.

I also asked the Minister which of the probation service’s current responsibilities the Government intended it to continue to undertake. Once again, there was no clear answer. I also asked the Minister what the objective was in looking to reorganise the probation service, bearing in mind that he had only recently said that it was “excellent”. Once again, there was no clear answer. I also asked the Minister what improvements in the “excellent” probation service the Government believed could be achieved without potentially putting at risk the quality of the service currently being provided. Again, there was no clear answer. I also asked the Minister how many staff were currently in the probation service and how many the Government envisaged there will be in future, taking into account their proposals in this Bill on community sentencing and their declared intentions on restorative justice and the role of rehabilitation in reducing reoffending. Again, there was no clear answer.

What the Minister did say was that the Government aimed to set out a vision for the future system over the next few weeks, which was not the most helpful response to the questions that I had asked. In the light of the Government’s lack of enthusiasm for answering legitimate questions about their intentions for the probation trusts and services—one does not embark down the road of reorganisation and change without having some clear view about where one wants to go and why—it seems perfectly reasonable that it should not be possible for the Government to make any attempt to reduce significantly or change the role of the probation service without Parliament being fully aware of what is going on, without the opportunity for a full debate with Ministers having to justify their proposals to Parliament, and without Parliament having to agree to those changes. This is precisely what is provided for in my amendment, which I move.

[Lord McNally]

My Lords, I am not sure I shall be able to help the noble Lord, Lord Rosser; he asks lots of questions, most of which do not have a great deal to do with the Bill but have a lot to do with the Government’s declared intention to reform the probation service. We have certainly made no secret of that; indeed, he will be familiar with our consultation paper, Punishment and Reform: Effective Probation Services. He will be aware that this was the first step in determining our approach to how reform is delivered. Further consideration is under way to determine how best to meet the requirements of a probation service that delivers rehabilitation outcomes. We are in the process of carefully considering the way forward and will announce further details of our plans shortly. As I indicated previously, we will be keen to engage with probation staff, representative groups and all those who can make a contribution to the success of this important area of work.

It is interesting—I think I have explained this before to the noble Lord—that the reason why the powers to do all this are not in this or any future Bill is because they are within the powers of the Offender Management Act 2007. During the passage of that Act, there was a debate on the merits of parliamentary scrutiny when establishing, amending and dissolving probation trusts. In the Bill as originally published, no parliamentary procedure applied to the power in Clause 5(1) to establish, alter the name or purpose of, or dissolve a probation trust. The Delegated Powers and Regulatory Reform Committee noted that precedents existed for that, but felt that it lacked sufficient information about how trusts were to be established to make a recommendation about its appropriateness in this context. The committee therefore drew the matter to the attention of the House. In light of the debates on this subject, the previous Administration accepted on the floor of the House that this important power should be subject to parliamentary procedure. The noble and learned Baroness, Lady Scotland of Asthal, asserted that the affirmative procedure would be excessive but tabled a government amendment introducing a negative procedure, which was accepted by this House. On that basis, the Government believe that the parliamentary scrutiny set out in the Offender Management Act 2007 is adequate and we share the view taken by the previous Administration that the affirmative procedure would be excessive. I therefore ask the noble Lord, Lord Rosser, to withdraw his amendment.

[Lord Rosser]

I thank the Minister for that reply. He started off seeking to suggest that the issue raised in the amendment is not really relevant to this Bill, but it certainly is. The Bill seeks to make significant changes to community sentencing and the delivery of those services will be dependent on an effective and properly resourced probation service. It will not be particularly easy to deliver those changes in relation to community sentencing—of course the changes also cover restorative justice and the role of rehabilitation in reducing reoffending—if at the same time it is the Government’s intention to, metaphorically speaking, turn the probation service upside down. That must clearly be a relevant issue in the Bill. Is the probation service geared, both at the present time and in future, to delivering the objectives and changes that the Government wish to make in community sentencing?

The Minister made reference to the 2007 Act. I appreciate that it is his prerogative if he wishes to express an alternative view, but I do not think that the kind of transfer or apparent transfer of responsibilities away from the probation service that seems to be envisaged at the moment was envisaged at the time of the 2007 Act. Obviously, it is the potential implications of what the Government may be putting forward that have led to this amendment calling for the affirmative procedure to be used. I am sorry that the Minister has not been able to give any assurances at all about the extent to which the existing probation service will continue in being. He has not been able to give any assurances about what responsibilities may or will not be transferred away from the existing probation service. Indeed, put bluntly, he has not really been prepared to say anything at all, which will certainly do nothing to damp down some of the concerns over what the Government’s real intentions are. I appreciate that the Minister is not going to say any more so I have little alternative but to leave it at that. I beg leave to withdraw.

Amendment 115B withdrawn.

Amendment 116

Moved by

[Lord Ahmad of Wimbledon]

116: Transpose Schedule 16 to after Schedule 13

[Lord Ahmad of Wimbledon]

My Lords, Amendments 116 and 117 are straightforward technical amendments that simply move Schedule 16 to sit after Schedule 13 and Schedule 17 to sit before Schedule 14. Due to the recommittal process, these schedules are not currently in the correct place when compared to their corresponding clauses. These amendments merely move the schedules into their correct chronological place in the Bill. I beg to move.

Amendment 116 agreed.

Amendment 116ZA

Moved by

[Lord Beecham]

116ZA: After Clause 25, insert the following new Clause—
“Requirement for review
(1) The provisions under section 25 and Schedule 17 shall cease to have effect at the end of a five year period beginning with the day the provisions come into force.
(2) Before the end of the five year period, the Secretary of State must—
(a) provide for a review of these provisions, in consultation with the Director of Public Prosecutions and the Director of the Serious Fraud Office,(b) set out the conclusions of the review, and(c) lay the Report before both Houses of Parliament.”

[Lord Beecham]

My Lords, knowing the Government’s inveterate enthusiasm for sunset clauses, I am not sufficiently naive to believe that the part of the amendment that deals with the sunset clause will command their agreement. However, the amendment is tabled partly to reflect a potentially dangerous underestimate of how the public might regard this major change in proceedings that we have collectively endorsed, albeit with varying degrees of enthusiasm. The objective of the amendment is to reinforce the need for a review of the operation of the provision which, in fairness, the Minister has previously indicated would take place as part of the normal post-legislative review process. It is particularly important in this case that we carry public support for this change because there is still a danger that there may be a suspicion on the part of the public that large companies are able to—I use the phrase I used in the recommitment debate—buy their way out of a prosecution. That is not the intention and we subscribe to the view that this is a sensible way of dealing with some matters, particularly in the light of the failure of the existing system and organisations to manage successful prosecutions.

The important part of the amendment is that which looks to the review as being a joint exercise with the Director of Public Prosecutions and the director of the SFO, and to the laying of a report before Parliament. There will certainly be a review and I see no difficulty in a report being laid before and discussed by Parliament although, as with other amendments which I shall be moving later, I resile from the position that affirmative resolutions and the like would be required to approve them. It is important that there is an opportunity for proper parliamentary debate to help carry public opinion with us as we move in the novel direction of deferred prosecution agreements. That will apply to other amendments as well as this one. Last week the Minister kindly organised a meeting at which four of us who are in the Chamber tonight, apart from the Ministers, were present and I rather thought he was sensitive to that view. Therefore, I hope he can give the assurance that any discussion of a review would be in consultation with the directors of the two relevant departments.

My noble and learned friend Lord Goldsmith will speak to his amendment. I shall await what he says with interest and comment on it if necessary at the end. I reserve my position on that but I hope the Minister will look with some degree of acceptance on the point about having a proper consultation as part of the review and in discussion in Parliament. I beg to move.

22:00

[Lord Goldsmith]

My Lords, I want to speak to Amendment 116ZA and to refer to Amendment 116E, which stands in my name in this group. Both amendments touch on a similar point, although possibly from different perspectives. I note that my noble friend Lord Beecham and I have perhaps started in slightly different places on this part of the Bill, although maybe we are moving towards a middle position. As the House knows, I am one of those who has been more in the enthusiastic group who support the introduction of deferred prosecution agreements. I believe that they are capable of assisting enormously, in particular cases, in dealing with the problems with which we are faced in crime.

I am sorry that the Government have such a blinkered approach to where these deferred prosecution agreements can assist. What obviously lies behind my Amendment 116E is at least to enable other offences to be added to the list of those that are covered by deferred prosecution agreements without the need for further primary legislation. I have no illusions as to whether the Government will accept this amendment. I am grateful for the meeting to which my noble friend Lord Beecham has already referred and for the attention paid to what was said by a number of us in that meeting. I am also clear that the Government will not move, which is a shame.

Although my amendment deals with offences, the Minister will recall that not only I but others in this Chamber have been concerned also about the ambit of deferred prosecution agreements. It is not strictly speaking the subject of an amendment tonight but the question of reviewing this includes whether it can be reviewed not only to consider the efficacy of the system as it is being introduced but also whether its ambit is appropriate, both in terms of offences and, I repeat, in terms of individuals.

Perhaps I may say this to the noble Lord and, through him, to his ministerial colleagues and their officials: I believe that the Government are making a big mistake in not seeing the advantage of deferred prosecutions in other cases. In this House previously, in Committee, I referred to the benefits that I have seen, particularly in relation to drug offences. If you go to any Crown Court in the country—certainly, this was the case when I sat regularly there and I believe it is likely still to be the case—you will see case after case to do with drugs. It is either a drug offence, or an offence of petty theft, burglary, mugging or something of that sort to get money for drugs. It is hugely damaging to our society but we do not seem to be that good at finding solutions to it. I believe that the carrot and stick approach, which deferred prosecution agreements provide, is one way to deal with that.

I know that the Minister will not respond positively to that today and I know that he will not respond positively to my amendment. However, as my noble friend Lord Beecham said, I hope that there can be a clear commitment to review the operation. I ask the Minister to accept that that commitment should include looking at not just whether the system is working, as it is about to be enacted, but also whether it could be more broadly based in relation to offences or to individuals. If he cannot give that assurance, I, for one, would support—although this was not my position previously—my noble friend Lord Beecham’s amendment as a way of forcing that review.

[Lord Marks of Henley-on-Thames]

I shall speak briefly to both amendments. While I support in outline the idea that there should be a review, the amendment in the names of the noble Lords, Lord Beecham and Lord Rosser, does not include a provision for an extension of the schedule. It seems to me that a review should be part of a continuing process. I agree very much with the noble and learned Lord, Lord Goldsmith, that there is considerable potential for deferred prosecution agreements. I would expect a review to come out with a recommendation for extension, rather than for limitation, and certainly for continuation of the system unless it turns out to have been a failure, which is not the expectation that I have.

I also agree with the noble and learned Lord in his amendment. I think it is a shame that the range of offences is confined to financial and economic offences. I entirely understand the Government’s position that, at this stage, this is an exercise in putting a toe into the water in unfamiliar territory, and I accept that it is unfamiliar territory. However, the extension of the offences under paragraph 31 of the schedule is subject to the affirmative resolution procedure. For my part, I do not see a huge distinction between adding other financial and economic offences to the list of offences under that procedure and adding the other offences of which we spoke at the meeting and in the debate in Committee. Health and safety and environmental offences have been mentioned, and drug offences were mentioned by the noble and learned Lord, Lord Goldsmith.

We are in the middle of providing for what the Minister has called a rehabilitation revolution. I regard that as a useful phrase and a useful and beneficial concept. It seems to me that deferred prosecution agreements, with their potential for arrangements to be made to encourage future compliant behaviour, can be seen as part of that overall rehabilitation revolution. I know that my noble friend will not accept these amendments tonight, but I urge him to bear in mind, with those in his department in charge of these things, that a wider view can be taken of these agreements.

[Lord Ahmad of Wimbledon]

My Lords, the amendments in this group relate to issues raised and debated in Committee. I assure the noble Lord, Lord Beecham, and the noble and learned Lord, Lord Goldsmith, that they have been considered in the intervening time. However, as the noble and learned Lord expected, the Government’s position on both issues is unchanged for the reasons that I will reiterate.

Amendment 116ZA seeks to introduce a sunset clause—I am always conscious that the noble Lord, Lord Beecham, often talks of sunset clauses after the sun has set; I am sure there is no direct relevance—for the DPA scheme. The Government still consider that to be unnecessary at present. Let me be clear: our approach to these proposals allows us to test the water, as my noble friend Lord Marks, said, by dipping a toe in to this novel approach. Our proposals have been designed to deal with the particular issue of bringing organisations to justice for economic crime.

However, let me reassure the noble and learned Lord, Lord Goldsmith, that the introduction of the DPA scheme is not a pilot. The Government are committed to DPAs becoming a permanent fixture in the fight against corporate economic and financial crime. For this reason, we do not consider the proposed sunset clause to be appropriate. Additionally, this provision could have a number of prejudicial consequences for any DPA under negotiation, in force or expired. The inclusion of such a clause would introduce uncertainty that might deter prosecutors and organisations entering into a DPA.

Let me assure the noble Lord, Lord Beecham, that the Government will review the operation of the scheme following its introduction, and I am content to reiterate that undertaking here. Pursuant to the Government’s policy on post-legislative scrutiny, of which noble Lords are aware, all new primary legislation is reviewed within five years of Royal Assent. We consider that there is no need to provide a statutory basis for the review of the DPA legislation and consider, on this occasion, that the undertaking we have given on post-legislative scrutiny conducted in the usual way is sufficient.

Amendment 116E, which was tabled by the noble and learned Lord, Lord Goldsmith, broadens the scope of the Secretary of State’s power to specify by order further offences in relation to which DPAs may be entered. As has been stated already, the amendment would extend its scope to the addition of any offence whatever that could be committed by an organisation. We discussed this issue in Committee and have considered with great care the potential to extend the scope of the DPA scheme to cover a broader range of offences. The Government remain of the view that the scope of the scheme should be limited to financial and economic wrongdoing and that it should not be extended beyond this by way of secondary legislation for the following reasons.

First, 77% of the respondents to our consultation agreed that corporate economic crime is the right focus for these proposals, at least initially. Fewer than half of respondents supported the broader availability of DPAs. As we made clear in Committee, the proposals set out in Schedule 17 have been designed as a response to the particular problems of prosecuting organisations alleged to have been involved in financial or economic wrongdoing. Too few organisations are being held to account for economic wrongdoing owing to the particular challenges in investigating and prosecuting the conduct. These challenges are not as acute for other types of corporate offending, including—and I know other noble Lords have mentioned this—environmental offending, where successful prosecutions have been made and where there is already a range of effective alternatives to prosecution. Those responsible for prosecuting offences other than economic and financial crimes have not identified a broader need for DPAs.

The introduction of DPAs, as I have already said, is very much a toe-dipping exercise. We need to ensure that the benefits of DPAs are proven, that there are no unintended consequences and that the right cases are still being prosecuted before considering broadening the scope. The Government are therefore opposed at this stage to removing the restriction on the offences that might be brought within the scope of these proposals. We remain firmly of the view that the current draft of the schedule draws the scope of the DPA scheme appropriately.

However, I would like to reassure the noble and learned Lord, Lord Goldsmith, that the Government will keep this matter under review. If DPAs prove effective in tackling corporate economic crime, and the case is made for extending their availability for other types of offending, then we will reconsider this issue in the future. However, we consider that such a significant change in the scope of the scheme should be made only following appropriate consultation, and by way of primary legislation, with the more rigorous scrutiny that that entails, compared with the affirmative resolution procedure.

I therefore ask noble Lords to wait until these proposals have been fully tested in relation to economic crime in England and Wales, have been shown to be effective and, most importantly, have gained public confidence, before pressing for an extension in their scope. This is an important step forward. It is a new area and therefore it is right that we focus for the time being on economic crime. In light of these points and with the assurance that we will keep the scope of the DPA scheme under review I would be grateful if the noble Lord, Lord Beecham, would agree to withdraw his amendment and the noble and learned Lord, Lord Goldsmith, would agree not to move his amendment.

[Lord Beecham]

My Lords, I am slightly disappointed by that response. It is not clear to me what form the review will take. Leaving aside the sunset clause—which I virtually left aside in moving the amendment—the amendment really talked about the consultation between the Government and the Director of Public Prosecution and the Director of the SFO and producing a joint report, as it were, for Parliament to discuss. It is not clear to me that that follows from what the Minister has described as the usual post-legislative scrutiny. I would be glad to be corrected if it is intended to bring effectively a joint report to be debated as part of that process.

In relation to the reluctance to envisage bringing forward other areas of law—environmental law was debated at some length at an earlier stage but not necessarily just that area—if we have a five-year review it will be at least six years before primary legislation is likely to be enacted, given that it would have to take its place in the queue, as it were, at that time. That strikes me as rather too long a period to wait, given the general acceptance that this offers a way forward, particularly in the field of something like the environment where you are not just looking at a financial penalty but at different ways, which we will touch on later in the amendments of my noble and learned friend, of corporations recognising their responsibilities in practical rather than purely monetary terms.

I have, as I have previously expressed, some reservations about extending the doctrine to individuals, although I take my noble and learned friend’s point about drugs, which is made on a day on which the Government seem to have been much too quick to reject a call from the Home Affairs Select Committee for a Royal Commission to look into what is not a noticeably successful policy on drugs and their impact on society and the courts. However, clearly, the Government are not minded to move things in the direction that either I or my noble and learned friend would wish tonight. In the circumstances, I beg leave to withdraw the amendment.

Amendment 116ZA withdrawn.

22:15

Amendment 116A

Moved by

[Lord Goldsmith]

116A: Schedule 17, page 262, line 21, leave out sub-paragraph (4)

[Lord Goldsmith]

My Lords, I will speak to all four amendments in this group, which are in my name. Amendments 116A and 116B cover the same grounds. They are really alternatives, and I will explain why. However, the fundamental point is that they deal with the provision in the Bill that the,

“amount of any financial penalty agreed between the prosecutor and”—

the company—let us call it that—

“must be broadly comparable to the fine that a court would have imposed on”—

the company—

“on conviction for the alleged offence following a guilty plea”.

I firmly believe that that is a wrong provision. It removes, first, the incentive for an agreement to be made. It is odd, because the Government put forward the limitations on the deferred prosecution agreement on the pragmatic grounds that it is often difficult to prosecute these offences. Therefore they want to have an alternative system which people suspected guilty of financial or economic crime will be prepared to accept. Well, they will be prepared to accept it if the offer is acceptable. There is another point to which I will come, but this provision says that if you do the deal you can only do it on the basis of the same financial penalty. Bear in mind that we are dealing with companies and commercial organisations which cannot be sent to prison, so it is the financial penalty which matters. It seems, with respect, to make no sense to remove the possibility from an agreement which provides some sort of incentive to make that agreement. To impose a requirement that the penalty must be,

“broadly comparable to the fine that a court would have imposed on … a guilty plea”,

seems, as I have suggested, to be wrong in principle.

However, there is another reason. It was pointed out clearly by the noble Lord, Lord Marks of Henley-on-Thames, in Committee, when he noted that this provision only applies if there is a financial penalty. There are a number of options in the agreement: a financial penalty; compensation; donation of money to charity; disgorgement of profits; implementing a compliance programme; and so on. There is a whole menu, but this provision says that if you have a financial penalty is has got to be the same fine that would have been imposed, broadly speaking.

That seems to lead to an absurd situation. In the discussions that are taking place, the company will say, “We don’t want to pay the full fine that we would have paid. We are prepared to accept our guilt even though we think that we could fight this in court and get off, but we do not want to pay the full penalty”. Then the prosecutor is faced with saying, “Well, either that means no penalty at all, because then I can escape the straitjacket of subsection (4), or you have to pay the full penalty, so there is no deal. So we will be forced to go into court; we may lose the case; it will cost the public a great deal”. It seems to make no sense at all, and the noble Lord, Lord Marks, was quite right to draw attention to that.

It is critical that deferred prosecution agreements work. Of all the amendments necessary to make this work, I suggest that this is one. One needs to remove the straitjacket whereby the penalty has to be the same as the fine that would have been imposed. In promoting that—I shall come to the way to do it—I want to underline that the scheme that the Government have put forward contains safeguards against a wrong agreement. Those safeguards are, first, that the deal has to be approved by the Director of Public Prosecutions, the director of the Serious Fraud Office or another senior prosecutor specifically designated for that role. There is no doubt that a senior prosecutor will have to make the decision. Secondly, the deal has to go through not one but two approvals of the court, the preliminary approval and the final approval. That is the structure of the proposal. I cannot see why this opportunity to make an agreement with some greater incentive should be removed.

There are two ways of achieving this, and that is what my two alternative amendments are designed to do. One is simply to remove sub-paragraph (4) altogether. I would be content with that. It achieves the objective and it leaves it to the discretion of the prosecutor and the court to fix the right elements. If there is some sentencing guideline as to what is appropriate, that is perfectly proper and perhaps it does not need to be contained in the Bill. That way of dealing with the matter meets an objection raised when I spoke to the other amendment in Committee when it was said that by saying “not more than broadly comparable”, one had to work out what the fine would have been, that that was difficult and it was therefore unreasonable to say that it should be “not more than broadly comparable”. I did not say then what I say now: that seems to be an objection to the provision as it stands, in any event. If the Government prefer, I accept that the alternative way of doing this would be not to say that the amount of any financial penalty should be “broadly comparable” to the fine that would have been imposed on a guilty plea, but “not more than” such a fine. It sets a finite level.

I want to make one further point before I briefly deal with the two other amendments in my name, Amendments 116C and 116D. I have gone back to the consultation paper to consider what respondents actually said on this issue because a question arose in our meeting as to whether I had recollected correctly that a majority of respondents had thought that the reduction should not be limited to the one-third reduction that one receives on a guilty plea. On page 28 of the Government’s response to the consultation paper at paragraph 102, it is stated:

“57% of respondents disagreed with the proposed maximum reduction of one third”.

Also, paragraph 105 states:

“We have noted the concerns raised by respondents that the maximum penalty level of one third may not prove to be sufficiently attractive in practice”.

Those are exactly the points that I have raised, and it appears that a majority of respondents took that view. I take some heart from that.

The other two amendments go together. Amendments 116C and 116D are simply intended to provide that in a deferred prosecution agreement there should be an obligation to spell out to the person who accepts it what the consequences may be, so that people know where they stand. There may be other ways of achieving that, but it seems right that the deferred prosecution agreement should, one way or another, make it clear to someone who is signing up to it what the consequences may be. Of course, if the person signing up to the agreement is a great corporation advised by substantial firms of lawyers, they do not need such a provision, but these cases may not be limited to such corporations and people deserve to be told just what they are getting into. I beg to move.

[The Lord Speaker (Baroness D'Souza)]

My Lords, I should warn your Lordships that if this amendment is agreed to, I cannot call Amendment 116B by reason of pre-emption.

[Lord Beecham]

My Lords, I respectfully adopt and support most of my noble and learned friend’s comments and indeed most of his amendments. If I had a preference between Amendments 116A and 116B, I think it would be Amendment 116B, but it would be interesting to hear which way, if either, the Minister inclines on that particular aspect.

It seems very sensible that other possible consequences of a failure to comply should be incorporated, so I endorse Amendments 116C and 116D. As to the amendment in my name and that of my noble friend Lord Rosser, we return again to the principle of having these novel matters debated openly before the new process is set in motion. In this particular case, it is a matter of having the financial penalties and parameters that would be proposed by the Sentencing Council subjected to scrutiny and debate but not, as I suggested in Committee, to an affirmative procedure. In retrospect, I think that was going too far and perhaps trespassing on the role of the Sentencing Council in an unacceptable way, although I note that there seem to be some judicial misgivings about the operation of the council. Be that as it may, it does not relate specifically to this point.

Again, bearing in mind the need to carry public opinion with us on this new process, it would be helpful to have that debate before the Sentencing Council’s proposals became adopted. The novelty of the process is such that not only would that be justified but it would actually assist in securing public acceptance. I can anticipate the next amendment, which is very much on the same line; again, having it debated should inform both public opinion and possibly the final decision-makers in a way that can only contribute to the success of the experiment, if that is what it is. I suspect that it will be a successful experiment on which we are embarking.

On the question of incentives, my noble and learned friend is right. It is quite clear from the American example—I repeat for the second or third time that very much larger sums are secured under the American system—that an incentive has to be provided. Whether that is a maximum of one-third or not is another matter. I am not entirely surprised that most respondents disagreed with a maximum of one-third; no doubt they would prefer it to be larger, which underlines my point, but there needs to be some open debate about this before a final decision is made.

In these circumstances I hope that the Government will, even at this late stage, acknowledge that there is substance in my noble and learned friend’s amendments, and I hope that they will also agree that my proposal would actually assist in gaining acceptance for this new process, both by the public at large and by those who will potentially be the subject of its operation. In that spirit, I beg leave to move the amendment in my name.

[Lord Marks of Henley-on-Thames]

My Lords, I will be brief. In relation to Amendments 116A and 116B, after two debates in Committee and our meeting, I am still entirely unclear why the Bill as drafted contains only the all-or-nothing choice in relation to financial penalties. As the noble and learned Lord, Lord Goldsmith, pointed out, the arrangements proposed are that the financial penalty should be optional only, but if there is a financial penalty then it must be broadly comparable to the fine that would be imposed on a guilty plea. I suggest that that is illogical because there is no room for such a reduced financial penalty, and there is no reason why there should be no room for one.

22:30

There are two possibilities that would be logical. The first is that we should have a compulsory financial penalty that would have to be broadly comparable to the fine that was imposed on a guilty plea. That would have the advantage that it would make it clear to the public that the offender was not escaping any part of his penalty by agreeing to a deferred prosecution agreement. However, it would have the corresponding disadvantage that it would risk diminishing or removing the incentive for the offender to agree to the DPA, however desirable that might be from the public point of view. It would also have the disadvantage that it would not allow for impecuniosity on the part of the offender, and would introduce an undesirable element of inflexibility in the way that the requirements of the DPA might be calibrated in relation to compensation, donations to charity, the cost of compliance and so forth with the financial penalty, which might lead to a conclusion that a financial penalty should be attenuated.

The alternative is that there should be no positive requirement for a financial penalty but merely an option, as is proposed. In that case, either one would omit altogether the guidance regarding the level of the financial penalty, as the noble and learned Lord, Lord Goldsmith, proposes in Amendment 116A, or one would have a maximum, as he proposes in Amendment 116B. I am bound to say that I favour Amendment 116B because I consider it desirable that it should not appear to be open to an offender to buy himself out of prosecution by paying a greater penalty than he would have paid as a fine if he had pleaded guilty. Provision only for a maximum can allow for attenuation of the penalty, for the reasons that were discussed in relation to compensation, compliance costs and so forth. It is therefore my submission that Amendment 116B is the desirable of the logical options.

On Amendments 116C and 116D, I suggest that it is plainly sensible that the DPA should have to spell out the possible consequences of non-compliance. That is important in order to demonstrate to the public the seriousness of the agreement and to maintain public confidence. It is also important to demonstrate to the offender the possible consequences of non-compliance.

I will say a word on Amendment 116BA, which covers the Sentencing Council and was tabled by the noble Lords, Lord Beecham and Lord Rosser. I have some difficulty with this. The generality is that judges sentence according to guidelines. Parliament sets a maximum. That principle ought to be the same in relation to deferred prosecution agreements; some sort of guidelines should be available and the maximum should be set by reference to the comparable fine. However, circumstances of offences vary so widely that they do not lend themselves easily to debate by Parliament that descends to particularities. On that ground alone it seems to me that judges, when approving agreements—and prosecutors and offenders when entering into them—should take into account the nature of the offence, the other requirements that are to be agreed to as part of the DPA and the financial position of the offender. The need to do that means that the terms of the financial penalty and of the DPA generally must be sorted out case by case, which does not lend itself to parliamentary debate.

[Lord Ahmad of Wimbledon]

My Lords, paragraph 5 to Schedule 17 sets out both the mandatory elements that every DPA must include, namely an agreed statement of facts, an expiry date and a non-exhaustive list of potential financial and non-financial terms. Each agreement will be tailored to take into account the particular type and extent of the alleged wrongdoing, as well as the wider circumstances of the case and the situation.

A financial penalty is one of the terms that an agreement may contain. We expect that a financial penalty is very likely to be a term in the majority of DPAs. Let me make the Government’s intention clear. The Government believe the level of the financial penalty should bear close relation to the fine that would have been imposed following conviction in court after a guilty plea. A DPA is not a soft option for organisations and setting financial penalties at an appropriate level is important in achieving that.

The noble and learned Lord, Lord Goldsmith, asked whether the financial penalty is optional. The Government believe that parties should be able consider all circumstances of the individual case and this may include a large compensation payment, which will take priority over financial penalty. In the drafting of paragraph 5(4) we have provided an approach to setting a financial penalty that will achieve that aim. The key aspects are: an incentive, in the form of a discount of any penalty—I will come onto the issue of a discount in a moment; consistency of approach with sentencing upon conviction; certainty as regards the level of financial penalty; proportionality as the parties and courts will be able to take into account the means of the organisation and the level of other monetary terms, such as compensation, that take priority.

The noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Beecham, both mentioned incentives. The primary incentive for entering into a DPA is to avoid prosecution and conviction, both of which have the potential to cause huge reputational damage and to give rise to other negative consequences for an organisation. As someone who has spent 20 years working in the corporate world, let me assure noble Lords that reputation for a corporate body is of immense importance, and a DPA provides a route where that can be protected.

Our scheme provides a further incentive: any financial penalty under a DPA would be discounted to reflect the position a defendant would be in after pleading guilty in a timely way. In other words, the organisation could benefit, as again the noble and learned Lord mentioned, from a discount of up to one-third. A total of 94% of the respondents to our consultation supported our proposals for a discount although, as has been pointed out already, there was no consensus on whether there should be a maximum reduction and what that might be. Indeed, the figure cited of 57% of respondents did not support having a maximum discount of one-third as we proposed. However, the important point is that there was no consensus as to what the alternative should be.

Furthermore, we know from our consultation and engagement that it is essential that there is consistency of approach and some certainty as to the potential level of financial penalties. Organisations made it clear to us during the consultation that they would not enter into a DPA if there was a real risk that the penalty negotiated and agreed with the prosecutor would be out of line with what a judge thought appropriate.

Through paragraph 5(4) we have, therefore, provided that where a financial penalty term is to be included in the agreement, the sum payable should be broadly comparable to the fine that would have been imposed for the alleged offence on conviction following a guilty plea. This will allow parties to have regard to the guidelines on both sentencing for particular offences and principles including discounts for early guilty pleas. We believe this provision provides an essential benchmark on setting a penalty, not only to the parties but also to the judge, who will decide whether the amount that the organisation and prosecutor have agreed is fair, reasonable and proportionate. Both parties and the judge have some comfort that they will be starting from a clear, common position. The organisation can therefore expect some certainty as to what it faces if it decides to enter into a DPA.

In determining a penalty that is “broadly comparable” to a fine a court would have imposed following a guilty plea, the parties will have regard to relevant sentencing guidelines produced by the Sentencing Council, including the guideline on an early guilty plea, which currently provides for a discount of up to a third. I will come on to the points regarding the Sentencing Council in a moment. But they will also have regard to other law and practice a sentencing court would follow so as to take account of matters such as the means of the defendant and how compensation should be prioritised over the other financial elements of a sentence. Without such a benchmark, we consider it likely that the two parties to the DPA could have such widely divergent opinions as to what the level of the penalty should be that discussions would be unworkable, making negotiations protracted and difficult. This is exactly what we are seeking to avoid by providing for DPAs. We therefore consider that paragraph 5(4) will enable the parties, and ultimately the courts, to ensure that the financial elements of a DPA, taken as a whole, reflect a proportionate and balanced approach. To be clear, this is essential to ensure that a DPA does not look like a soft-option; anything less, in our view, would risk giving that impression.

Amendment 116A would remove paragraph 5(4), thereby providing no guidance at all for the parties or court as to how to approach setting a penalty under a DPA. This would be undesirable for a number of reasons, not least that the parties would be denied guidance on an appropriate penalty. In the event that paragraph 5(4) was to remain part of Schedule 17, Amendment 116B would provide that the financial penalty term should not exceed the fine that a court would have imposed. Again, this would deny the parties and the court the appropriate level of guidance they desire, and suggests that the parties might agree a fine well below what a sentencing court would have imposed upon a guilty plea. For the reasons I set out earlier, this would in our view be unworkable. It also gives the impression that DPAs are a soft option. We do not agree therefore that it is necessary to set a bar as proposed, but with no lower limit. Paragraph 5(4) sets out the clearest and in our view most workable solution to determining a financial penalty.

The noble Lord, Lord Beecham, has tabled Amendment 116BA, which is a variation of an amendment considered in Committee in relation to parliamentary scrutiny of guidance on setting financial penalties. The amendment would require the Sentencing Council to lay before Parliament its proposals for setting a financial penalty. Although not explicit from the terms of the amendment, we understand this to mean any proposal prepared by the Sentencing Council in relation to financial penalty payable under a term of a DPA.

The Sentencing Council has informed us that it is committed to producing sentencing guidelines for many of the economic and financial offences listed within Part 3 of the schedule, which will be in place in time for the implementation of our proposals, to which the noble Lord, Lord Beecham, referred. These guidelines will also cover corporate offending. As a result, a separate DPA guideline is no longer necessary. We will instead be riding on the coattails of guidelines which are produced for a different purpose: namely, sentencing a defendant after a conviction. Those guidelines are already subject to appropriate consultation and scrutiny. Under the Coroners and Justice Act 2009 the Sentencing Council has an obligation to consult a number of interested parties on any sentencing guidelines it proposes. In particular, it has a statutory obligation to consult the Justice Select Committee of the House of Commons. This provides an appropriate opportunity for parliamentary input into these guidelines.

We do not consider that scrutiny beyond that described is necessary or appropriate. The fact that the Sentencing Council’s guidelines will be referred to by the parties and judges in the process is secondary to the primary purpose for which they are developed and used: that is, determining sentence on conviction, and for which there is a robust and comprehensive development and review process.

Amendments 116C and 116D relate to a provision we have made enabling the parties to negotiate a term specifying the consequences of non-compliance with an agreement. We included this provision as a way for the parties to deal with some forms of non-compliance with a DPA capable of being objectively determined such as the late payment of money under a DPA. The aim is for the parties to be able to remedy such non-compliance without recourse to the court: for example, by way of punitive interest in relation to a late payment. Such a term would be negotiated alongside all other terms of an agreement and approved by the judge. We do not envisage that such a term would be appropriate in all cases. Whether or not an agreement includes such a term, paragraph 9 of Schedule 17 provides the formal procedure for dealing with non-compliance of a DPA, which will be the most appropriate way for addressing most instances of non-compliance.

22:44

The suggested amendments would require that every agreement include a term on the possible consequences of non-compliance. We do not think this is necessary, not least since such a term is designed to address a narrow range of non-compliance, which may not be appropriate in every DPA. I know the hour is late, but I trust that this rather lengthy explanation that I have provided to your Lordships’ House has addressed the concerns raised by the noble and learned Lord, Lord Goldsmith, the noble Lord, Lord Beecham, and my noble friend Lord Marks. In the light of this explanation, I invite the noble and learned Lord to withdraw his amendment.

[Lord Goldsmith]

My Lords, I very much regret to say that they have not been addressed. I am not going to press either amendment, but I want to say something about them because I want the Government to think a little further.

As regards the second set, I am afraid that the Government miss my point altogether. I invite the noble Lord and his officials to consider whether there is a way of ensuring that people who sign up to DPAs know what the consequences may be. I am not going to say anything more about that; it is an obvious point. The point that he made in response does not actually meet it; it meets a different point.

Let me go back to the first point. I detected three reasons why—and I was very disappointed by this—they said that it was inappropriate to accept either of the two amendments that I have put forward. One is the fear that if my amendments were accepted, the penalties would get out of line with what would happen in court. If that is saying any more than we want them to be the same, it is adding nothing to that. The parties will be in a position to know what the court would have imposed and can of course use that as a guidance without there being an obligation to fix at the same level.

Secondly, it said that there needs to be a benchmark. You have a benchmark by knowing what a court would do, and that could be a benchmark you can have in mind when you are negotiating. However, my second amendment would include that benchmark; I do not understand why it is thought otherwise. The real point—the third reason which the noble Lord repeated several times—is that it is thought that it will be a soft option. I really would invite the Government to think again. This is not a soft option because what is being overlooked each time is that the range of things that can be achieved in a DPA are not just the financial penalty. You would not get on a conviction an order for compliance; you would not get on a conviction an order for a monitor; you would not get on a conviction an order to make a payment to charity. You might get compensation for victims, but that would probably not be as well as a huge fine, because the court would take into account the fact that there is a limited financial obligation overall that should be imposed on the defendant. So it is not a soft option, and I invite the Government to get out of that frame of thinking about it and maybe one or two other times today the same point has come about.

I urge the Government to think again because they are about to make DPAs unworkable and fail to achieve the objectives they set. I will withdraw the amendment this evening—I am not saying that I will not bring it back. However, I really would respectfully—I do not normally use that word here, but I mean it all the time—invite the Government to think again and to question their view about this amendment. We will see where we get to by Third Reading.

Amendment 116A withdrawn.

Amendments 116B to 116D not moved.

House adjourned at 10.49 pm.