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Oral Answers to Questions
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kate Green (Stretford and Urmston) (Lab)
1. What the Government’s policy is on the use of indeterminate sentences for public protection.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The widely criticised indeterminate sentence of imprisonment for public protection was abolished on 3 December. It has been replaced by a new regime of mandatory life sentences, which apply to anyone who is convicted for a second time of a very serious sexual or violent offence, and tough extended determinate sentences.
Kate Green
In a written answer published on 19 October, I was informed that 193 prisoners over the age of 60 were serving indeterminate sentences for public protection. Approximately 25 elderly high-risk prisoners are expected to be released in Greater Manchester, some of whom will have higher than average social care needs as well as a need for specialist supervision. What discussions have been taking place with local authorities about where those individuals are to be accommodated, and who will bear the cost?
Chris Grayling
As the hon. Lady will know, the probation service regularly engages in detailed discussions with local authorities to try to establish the right ways of dealing with individual offenders. In many parts of the country there is integrated offender management, which is designed to ensure that we provide the best possible support. My plans for a rehabilitation revolution will step up the support provided for such people, and will, I hope, ensure that we address issues such as where prisoners are to live after leaving prison.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
On 25 April 2010, Irene Glen from Littlehampton opened the front door to her former partner Sean Benn. He came in and, with a kitchen knife, stabbed Mrs Glen 10 times. She was flown to London for several hours of emergency surgery, and mercifully survived. Sean Benn was convicted of wounding with intent, and was sentenced to detention in a secure hospital under the Mental Health Act 1983. On Thursday, a tribunal will consider whether to release him, a mere two years after that horrific attack. Mrs Glen believes that he may attack her again, and is terrified for her life. What can she do to prevent Sean Benn from being released, and what can we do to protect my constituent?
Chris Grayling
I shall look carefully at the case to which my hon. Friend has referred. Matters relating to release are handled independently by the different tribunals and assessment services that are there to decide whether it is safe to release a prisoner, and I should obviously be concerned to hear of circumstances in which a potentially dangerous prisoner was to be released. My Department will certainly be able to discuss with my hon. Friend whether there are any ways in which we can help either to support his constituent or to influence the process, should that prove necessary.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
2. What consideration he has given to reviewing the age of criminal responsibility in England and Wales.
The Minister for Policing and Criminal Justice (Damian Green)
The Government are not considering reviewing the age of criminal responsibility. They believe that young people aged 10 and over are able to differentiate bad behaviour and serious wrongdoing.
Mr Sheerman
That was a very disappointing answer. The fact is that in England and Wales we lock up more children than any other country in Europe. We imprison four times as many young people as Portugal, 25 times as many as Belgium, and 100 times as many as Finland. I make no apology for the fact that in 1999 we changed the law to reduce the age of criminal responsibility from 14 to 10, but is it not about time that we accepted the recommendation of people throughout the civilised world that it should be at least 12? Why do the Government not agree with the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who believes that that change must come about?
Damian Green
I am sorry that the hon. Gentleman found my reply disappointing. I think it entirely appropriate to hold children aged 10 and over to account for their actions, and to allow the criminal courts to decide on an effective punishment when an offence has been committed. It is important to communities, and particularly important to victims, to know that young people who offend will be dealt with appropriately.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that restorative justice, a flagship policy of this Government, is particularly effective for children around the current age of criminal responsibility?
Damian Green
I agree, and that is why I made the point to the hon. Member for Huddersfield (Mr Sheerman) that it is for the courts to decide the appropriate punishment. That might well be the use of restorative justice, which is particularly effective with young offenders.
Mr Philip Hollobone (Kettering) (Con)
I declare my interest as a special constable with the British Transport police. Although the age of criminal responsibility is 10, effectively many police officers will not do anything in the case of a miscreant under the age of 16. May we have a change to the law, whereby if a police officer were to issue a fixed penalty notice for somebody under 16 who committed antisocial behaviour or a crime, it would be served on their parents or guardians so that they would ensure that their children behaved properly?
Damian Green
I am always interested by the expertise my hon. Friend brings to this issue, given his welcome work as a special constable. I shall certainly consider his suggestion seriously.
Mark Pawsey (Rugby) (Con)
3. What steps he is taking to address harm and injury caused by dangerous drivers.
The Minister for Policing and Criminal Justice (Damian Green)
The Government have legislated to create a new offence of causing serious injury by dangerous driving. The new offence is subject to a five-year maximum prison sentence and was implemented on 3 December 2012.
Mark Pawsey
My constituents, Mr and Mrs Galli-Atkinson, who have campaigned for safer roads for some time, point out that in cases in which a driver causes death while over the drink-drive limit but in which there is no evidence of careless driving, the only charge available to the police carries a maximum sentence of six months’ imprisonment, a fine and disqualification from driving. The law should reflect the fact that driving under the influence of drink or drugs severely impairs a driver’s reaction time. Given that the Crime and Courts Bill is currently going through Parliament, will the Minister find time to address that important issue?
Damian Green
I know that my hon. Friend has rightly campaigned hard on this subject. I am not entirely persuaded that there is such a gap in the law. If the driving is below the appropriate standard, a variety of offences are available, including causing death by careless driving while under the influence. If the driving had not been affected, it would not be right for the driver to be charged with anything more than a drink-driving offence.
Chris Leslie (Nottingham East) (Lab/Co-op)
Is the Minister not aware, however, that there is still a problem, in that the penalties imposed by the courts for driving without insurance are sometimes lower in cost than buying that insurance in the first place? Will the Minister take steps to address that anomaly, as too often there is a perverse incentive for young drivers in particular to avoid paying their car insurance, taking the risk that the penalty will be less than the costs involved?
Damian Green
The hon. Gentleman makes a serious point. The cost of insurance is one reason we have just published a consultation paper on whiplash claims, in which fraud is most commonly committed, an effect of which is to drive up insurance costs for respectable drivers. That could conceivably encourage the bad behaviour that he suggests.
Ms Margaret Ritchie (South Down) (SDLP)
In reference to the Minister’s comment about whiplash claims, false claims do much to discredit and undermine those who suffer real injuries as a result of dangerous driving. In Northern Ireland, where the costs are much higher than in comparable regions in Britain, what discussions have taken place with the Minister of Justice regarding whiplash claims?
Damian Green
I am sure that the Minister of Justice in Northern Ireland will have seen the Government’s consultation document and I hope that he, along with Members of this House, will welcome it. I would obviously always be willing to speak to him further about it.
Roberta Blackman-Woods (City of Durham) (Lab)
4. What recent assessment he has made of the effectiveness of the probation service.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
As Minister with responsibility for probation, I have had the opportunity to see the hard work and dedication of many probation officers and I do not think the probation service always gets the credit it deserves for helping to keep the public safe. Probation officers will continue to have a key role. However, reoffending rates are still too high and we need to explore new ways of delivering rehabilitation and reducing reoffending.
Roberta Blackman-Woods
I am sure that the Minister is aware of the most recent report from the inspectorate of probation, published today, which shows that vulnerable and troubled young people are not being adequately supported by the care or probation system. How will the Minister respond to the serious resource issues raised in that report?
Jeremy Wright
The hon. Lady is right to draw attention to that report, which deals with the interests of children who have been in care. We will study it in detail and respond accordingly, but the report makes the point that this is not simply about money—it is also about attitudes. A great deal of work needs to be done to ensure that we meet our very important responsibility to those children who have been in care, who have particular requirements. We will consider the report and respond accordingly.
Mr Crispin Blunt (Reigate) (Con)
One of the particular pleasures that I had as Minister with responsibility for probation was to attend the awarding by the British Quality Foundation of the gold medal to the probation service. I know that the Minister and his colleagues are preparing exciting proposals with great opportunities for the development of probation as a profession, but further measures will be needed to support that, which I hope he will consider alongside the proposals that he will announce in due course.
Jeremy Wright
I am grateful to my hon. Friend, who knows of what he speaks. The important point is that we need to recognise the achievements and the contribution of probation officers, alongside making sure that we introduce new and good ideas into the process of rehabilitating offenders. I will consider carefully what he has said and we will look at what we can do along the lines that he suggests.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
Will the Minister confirm that it is his Department’s intention to brief the press this afternoon at 4 o’clock on possible privatisation of the probation service, a day in advance of advising the House?
Jeremy Wright
The right hon. Gentleman will have to wait and see exactly what we propose and exactly when we propose it, but what he has just described is not going to happen.
Rehman Chishti (Gillingham and Rainham) (Con)
Does the Minister agree that the new court and probation service delivery model, by which probation staff have to provide a statement on the day that a plea is taken, ensures that we get a swift, transparent response on the day?
Jeremy Wright
I certainly agree that we want to ensure that justice is swifter and that where possible the probation service produces reports as quickly as it can. My hon. Friend will know from his experience of practising in the courts that probation officers often produce reports in very short time frames, which I am sure is of great assistance to the courts and to be commended.
Sadiq Khan (Tooting) (Lab)
I echo the words of the hon. Member for Reigate (Mr Blunt)—there cannot be many times when I have said that—and the Minister who commended the probation service for its fantastic work, which was recognised last year by the British Quality Foundation gold medal for excellence. Can the Minister confirm that the much delayed probation review will not be announced this week, as mentioned by the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), and will not lead to the break-up of the excellent probation service or its privatisation?
Jeremy Wright
This is a good time of the year for patience and I urge the right hon. Gentleman to be patient. It will be important in what we do, first, to recognise the key role of the probation service, as he says, and secondly, to do better than we have done on reoffending. When, as now, 50% of those released from prison reoffend within 12 months and a third of those on community orders do the same, we must look at ways of doing better.
Henry Smith (Crawley) (Con)
5. If he will make it his policy that courts will continue to have the power to impose whole-life tariffs for the most serious offences.
Mr Edward Leigh (Gainsborough) (Con)
10. If he will make it his policy that courts will continue to have the power to impose whole-life tariffs for the most serious offences.
Mr David Amess (Southend West) (Con)
19. If he will make it his policy that courts will continue to have the power to impose whole-life tariffs for the most serious offences.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
There is settled policy in England and Wales that some offences are so grave that they are deserving of imprisonment for the rest of the offender’s life for the purposes of punishment and deterrence. The Secretary of State and I take the view that whole-life tariffs should remain an option for sentences in appropriate cases.
Henry Smith
What other measures has my hon. Friend taken to ensure that appropriately long sentences can be given by the courts, particularly for violent and serious sexual offences?
Jeremy Wright
My hon. Friend is right to be concerned, particularly about those types of offences; they give the public a good deal of concern, too. That is why this month we have implemented new sentences, which will allow for a mandatory life sentence for a second serious violent or sexual offence, and for extended determinate sentences for the first or the second offence which is a serious offence and merits it. Those are new sentencing proposals produced by this Government to reflect exactly what my hon. Friend has identified.
Mr Leigh
There was some concern that the measure might be struck down by human rights legislation. One of the reasons for all the alienation of people from politics is that they feel that we are no longer in control of our destiny. Will the Minister today proclaim that we are the free Parliament of a free people and it is here that the liberty of the individual is determined, not by some foreign court?
Jeremy Wright
The good news for my hon. Friend is that on this issue at least we are in agreement with the European Court of Human Rights, because it has upheld our view that whole-life tariffs are an appropriate disposal in the right cases. Let me make it clear to him—I think that I also speak for the Secretary of State—that for as long as we are Ministers in the Department, its policy will remain that whole-life tariffs should be available.
Mr David Amess (Southend West) (Con)
In the light of what my hon. Friend has said, will he reassure me and the British public that under this Government the criminal justice system will treat convicted criminals in a firm but fair way?
Jeremy Wright
Yes, I can give my hon. Friend that assurance. We are doing two important things in that regard: first, toughening up the sentencing regime so that the right people go to prison for the right length of time; and secondly, ensuring that there is more emphasis on rehabilitation and reducing reoffending. That is the way to avoid the misery that communities incur as a result of reoffending, to avoid making more victims and to avoid extra cost to the taxpayer.
Jenny Chapman (Darlington) (Lab)
Simon Crisp groomed boys on the internet and possessed and distributed indecent images of children, and earlier this year he was sentenced to an indeterminate sentence. However, had he been sentenced after 3 December, he would not have received an indeterminate sentence, because the Government have abolished them. Does the Secretary of State think that it is right that, thanks to the Government’s decision, there will no longer be anything anyone can do to keep an offender in prison at the end of their sentence even if they are still a risk to children?
Jeremy Wright
Extended determinate sentences, which we have brought in to replace IPPs, can include an extended period of supervision at the conclusion of a custodial period. We have done that to deal specifically with cases that cause great concern, such as sexual and violent offences. The hon. Lady is right to be worried, but she is wrong to suggest that no provision has been made to replace what IPPs did.
Mr Marcus Jones (Nuneaton) (Con)
6. What steps he is taking to reform the rehabilitation of offenders by supporting people leaving prison who have served less than 12 months.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
It might be helpful if I put the right hon. Member for Tooting (Sadiq Khan) and other Opposition Members out of their misery and told them exactly what we are planning to do. As the House knows, I intend to apply payment by results to the majority of rehabilitation work conducted with offenders in the community. This rehabilitation revolution will stimulate innovation and open the delivery of services to a wider range of providers with the skills needed to change an individual’s behaviour and reduce offending in future. I aim to extend those services to cover those sentenced to less than 12 months in prison. I intend to hold a series of initial discussions with stakeholder groups tomorrow and to publish early in the new year a detailed consultation paper that will serve as both a response to the previous consultation paper and a direction for our reforms.
Chris Grayling
One of the things that I believe are very important as we build a system of mentoring for former offenders is that there should be someone working alongside them to ensure that they have somewhere to live when they leave prison. Of course, the Department has worked closely with the Department for Communities and Local Government to address homelessness with a strategy that contains a number of measures to help ensure suitable accommodation for offenders, such as flexibility in the universal credit system so that short-sentence offenders do not lose their tenancies when they spend a short time in prison.
Keith Vaz (Leicester East) (Lab)
I welcome the Secretary of State’s announcement that prisoners should be met at the gates by mentors—I am not sure whether he is volunteering to be one of them. Some 35% of prisoners have a drugs problem. Has he seen the latest Home Affairs Committee report, which suggests that prisoners should be compulsorily tested on exiting prison so that they can be given the support they need in the community as he has so rightly recommended?
Chris Grayling
I agree with the right hon. Gentleman’s sentiment with regard to drugs, prisons and when offenders move back into the community. I have spoken to prison officers who are deeply frustrated by the fact that treatment begins in prison but then stops at the prison gate. I can assure him that one of the things we are working on is ensuring that the conditionality we introduced to surround our rehabilitation revolution will mean that treatment flows through the prison gate and continues after the prisoner has been released.
Derek Twigg (Halton) (Lab)
Can I ask the Secretary of State specifically about what he and his Department are doing to support former members of the armed forces who are in prison? I am thinking particularly of those who have served on operations. How is the Department helping them with rehabilitation and making sure that support mechanisms are in place so that they can get on with their lives and do not reoffend?
Chris Grayling
I regard it as a national shame that so many former members of our armed forces are in our prisons. I have discussions with the Minister with responsibility for veterans issues, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois). I see the issue as something that we need to take forward in the next few months. It is certainly sitting high in my in-tray as a priority for us all.
Jeremy Lefroy (Stafford) (Con)
7. What steps he is taking to tackle reoffending.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
I refer my hon. Friend to the answer that I gave a few moments ago. We intend to apply payment by results to the majority of rehabilitation work conducted with offenders in the community as soon as we can.
Jeremy Lefroy
I thank my right hon. Friend for that answer and for the one he gave my hon. Friend the Member for Nuneaton (Mr Jones). Reoffending is to some extent also linked to lack of preparation prior to release. As a member of an independent monitoring board, I noted that we placed a great emphasis on induction and less on “outduction”—preparation prior to release. What is my right hon. Friend doing in that respect?
Chris Grayling
Our aim is to deliver a service that flows through the prison gates. One of the failings of the current system is that, as the right hon. Member for Leicester East (Keith Vaz) said a moment ago, there is not enough co-ordination between what happens in prison and after prison. The contracts that we build will begin while an offender is in prison and will see them through the prison gate to ensure that the continuity to which my hon. Friend refers is present.
Andy Sawford (Corby) (Lab/Co-op)
Given the abject failure of the payment-by-results programme that the Secretary of State introduced in his previous role as Minister with responsibility for employment, does he not recognise how incredibly worried people in Corby and east Northamptonshire will be that his new privatisation —the new payment by results—will be equally damaging for offender management?
Chris Grayling
I do not accept the hon. Gentleman’s comments about the Work programme. About 200,000 people who were long-term unemployed have started work through that programme. The Labour party has been utterly disingenuous in how it has argued around the figures. There are people with first-rate expertise out there, particularly in the voluntary sector. I will be seeing such people tomorrow to talk about how we can help offenders participate. Those people can bring real expertise to make sure that reoffending rates, which are much too high, come down.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
When are the Government going to produce a strategy on dealing with women offenders and reoffending by women?
Chris Grayling
Our aim is to do so early in the new year, but we do not want to rush it. I recognise that there is a need to differentiate the needs of women in prison from those of men in prison. The challenges are different and our responses should be different. One of my early steps in recognising that was to separate ministerial responsibility for men and women in prisons so that we could place a proper focus on the latter and their distinctive needs.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Legal aid is a fundamental part of our legal system, but resources are not limitless. Publicly funded legal support should be reserved for those who need it most—for the most serious cases in which legal advice and representation are justified. It will continue to be available in cases where people’s lives or liberty are at stake, where they are at risk of serious physical harm or immediate loss of their home, or where their children may be taken into care.
Ian Mearns
The Secretary of State said that the legal aid system is a fundamental part of the justice system, but we are witnessing a massive erosion of legal aid. Given the attacks on legal aid, on no win, no fee claims, on the Human Rights Act and on judicial review, and the drainage of resources at community legal advice centres and citizens advice bureaux, which are so important, particularly at the moment, do this Government truly believe at all in access to justice for all?
Chris Grayling
Of course we believe in access for justice, but we have to face the reality that we have had by far the most expensive legal aid system in Europe. At a time when we are still dealing with the financial debris left behind by the previous Government, it is impossible to avoid some tough decisions.
Mr Jonathan Djanogly (Huntingdon) (Con)
Reforms to legal aid to date have focused on civil legal aid. Future reforms will have to move on to criminal legal aid and, in particular, criminal contracting. Will my right hon. Friend therefore please say whether he has a timetable for criminal contracting?
Chris Grayling
Inevitably, we cannot avoid considering all the financial issues that face the Department. We are focusing on delivering the changes that we must soon introduce on civil legal aid; a number of measures need to come before this House in the next few weeks. That, for now, is our prime focus.
Mr Andy Slaughter (Hammersmith) (Lab)
To avoid a 12th defeat in the other place on the Legal Aid, Sentencing and Punishment of Offenders Bill, the Secretary of State’s predecessor promised this House that he would not cut legal aid at first-stage appeal in welfare benefits cases if a point of law were involved. The proposals finally brought forward were so inadequate that two weeks ago their lordships voted them down and told him to come back with something better. Now we hear that the Secretary of State, in a fit of pique, intends to do nothing at all. Why is he breaking a promise to Parliament and to some of the most destitute and vulnerable people in the country?
Chris Grayling
As the hon. Gentleman will be aware, we have promised to consider the decision by the Lords. I was a little surprised to see the rather unusual step taken in the other place of voting down a statutory instrument that was granting a concession, but we will of course review the issue and decide how to proceed.
Philip Davies (Shipley) (Con)
9. If he will take steps to ensure that prisoners serve full sentences as handed down by the courts.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
As my hon. Friend knows, prisoners are released in accordance with the legislation laid down by Parliament, and Parliament has consistently taken the view that most custodial sentences should be served part in custody and part under supervision in the community. Sentencers are fully aware of this when determining the appropriate length of sentence in each case. However, the good news for my hon. Friend is that on 3 December the Government implemented changes which will mean that some of the most dangerous offenders may serve their custodial terms in full.
Philip Davies
I am grateful to my hon. Friend for small mercies. However, according to the Ministry of Justice, somebody sentenced to prison for six months can be released within six weeks, somebody sentenced to prison for a year can be released within three months, and somebody sentenced to prison for two years can be released after just seven months. Does my hon. Friend think that that carries the confidence of the public at large, and if not, what does he intend to do about it?
Jeremy Wright
The principle of some of a sentence being served in the community is, as we have discussed before, in my view a good one, because it enables us to have a hold over the individual when they come back out into the community. However, my hon. Friend will be pleased to learn that I am looking at ways in which early release in certain circumstances can be earned rather than automatically granted.
Geraint Davies (Swansea West) (Lab/Co-op)
11. What his policy is on sentencing guidelines for the most serious and violent offenders.
Emma Reynolds (Wolverhampton North East) (Lab)
18. What his policy is on sentencing guidelines for the most serious and violent offenders.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Severe maximum penalties are available for the most serious and violent offenders. Sentencing guidelines are a matter for the independent Sentencing Council. Guidelines provide non-exhaustive lists of common aggravating and mitigating factors, and courts retain discretion to treat the particular circumstances of individual cases.
Geraint Davies
There is significant concern in Swansea about violent offenders being let off lightly, because the prisons are over-full with people who do not pose a significant risk to the community and because magistrates and judges are being pressurised to reduce costs. Will the Minister ensure that enough investment and priority is given to keeping violent offenders in jail for long enough that they are rehabilitated and do not go out and reoffend?
Jeremy Wright
I can assure the hon. Gentleman that we are very keen to see that violent offenders serve appropriate sentences. The length of sentences is going up and not down. He is not right to suggest that prisons are over-full. There is still capacity within the prison system to take those who ought to be there. I remind him that the only Government in recent history who had to let offenders out of prison because they ran out of space were the previous Labour Government whom he supported.
Emma Reynolds
In July, a young constituent of mine tragically lost his life when he was fatally stabbed outside a nightclub in Wolverhampton. Although I understand that the Government have introduced minimum sentences for those who threaten people with knives, will the Minister consider introducing tougher and clearer sentences for those criminals who maim and kill people with knives?
Jeremy Wright
I understand exactly what the hon. Lady has said and my sympathies go to her constituent’s family. It is right that we look again at the range of sentencing options available for offences involving knives. This is an endemic problem and one that we need to tackle, particularly among young people who persist in the wrong belief that they are safer carrying a knife than being without one. We have to look at this again and we will.
Steve Rotheram (Liverpool, Walton) (Lab)
12. What recent assessment he has made of security arrangements in courtrooms.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
The security of our courtrooms and courts is a serious matter. Regular assessments take place at least once a year and they are monitored at cluster, regional and national level to aid in the continual review of security.
Steve Rotheram
A suspect who had been released on bail entered Liverpool Crown court with a knife he had smuggled through security checks and threatened to kill himself in the dock. Tragedy was averted on that occasion, but will the Minister outline what steps she is taking to instruct security staff to be extra vigilant during their searches of suspects on bail?
Mrs Grant
We are aware of that serious incident and I assure the hon. Gentleman that a full review of security has taken place at Liverpool Crown court. An action plan for improvement has been put together and good progress is being made. Training in search procedures for all G4S staff was provided last summer and its effectiveness is being monitored. Security arrangements are now operating to a required standard, but remain under careful review.
Robert Flello (Stoke-on-Trent South) (Lab)
Security in courtrooms is one of the issues of great concern to victims and witnesses. The announcement of the new part-time victims commissioner is imminent—they will do just 10 hours a month—but does the Minister think that the new part-time commissioner will have time to consider security in courtrooms as part of this Government’s approach to partly putting victims at part of the heart of the justice system?
Mrs Grant
Victims will certainly be part of the heart of the justice system. An announcement will be made imminently to confirm the name of the new victims commissioner and I look forward to working with her very closely indeed. [Hon. Members: “Her?”] A lot of work is being done to improve security and safety in courts in addition to what I and the victims commissioner will do. Work has been done to improve security, including improvements to buildings, improved ways of working and improved education and training. The provision for the presence of a court security officer and enhanced risk management have also been helpful additions. We will continue to make sure that security is a priority.
Mr Speaker
I look forward to hearing further details in due course, if we have not already heard all of them.
Mr Rob Wilson (Reading East) (Con)
13. What steps his Department is taking to address vulnerabilities faced by women involved or at risk of becoming involved in the criminal justice system.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
The Government are committed to reducing offending and reoffending by women. We have a cross-government programme of work that seeks to address issues associated with offending, such as drugs, alcohol, mental health needs, domestic and sexual violence, accommodation and education.
Mr Wilson
I thank the Minister for her answer. Alana House in my constituency is a community centre supporting women experiencing problems whose behaviour has shown them to be at risk of offending. It has been particularly successful in providing the courts with a useful alternative to custodial sentences and helps vulnerable women to tackle their problems. The centre is in danger of closing. Will the Minister agree to visit Alana House to see the valuable work that the centre does, and to work with me to help ensure that this valuable community resource remains open?
Mrs Grant
I know that my hon. Friend cares deeply about Alana House and its future in his Reading constituency. He has already discussed the matter with me on a number of occasions. The National Offender Management Service has funded women’s community facilities successfully for a number of years and Alana House has been provided with funding of £111,000 for 2012-13. From 2013-14, probation trusts will commission these very important services for women. They are required to provide gender-specific services and if those services are not sufficiently robust they will be challenged. It is too early to say what that will mean for Alana House, but I can tell my hon. Friend that I would be happy to visit the facility.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Corston report highlighted the need for women’s centres to work with women offenders and those at risk of offending. What is the Government’s current policy on continuing to provide support to such services?
Mrs Grant
As I said, that funding will continue. The National Offender Management Service has funded women’s services very successfully for many years. The funding for women’s services will continue at the same level, but from 2013-14 probation trusts will commission these vital services.
Mr David Hanson (Delyn) (Lab)
Does the Minister agree that one of the best ways to ensure that women do not enter the criminal justice system is to use restorative justice more imaginatively for out-of-court disposals? Will she give a commitment to examine that in detail, particularly for women offenders?
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
14. What progress he is making on providing work for prisoners.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Getting more prisoners working longer hours is a key priority for the Government. Enforced idleness does nothing to help prisoners lead law-abiding lives on release. The hon. Gentleman will be pleased to hear that we are making good progress. Last year, public sector prisons delivered more than 11.4 million hours of work in production and service areas—an increase of 800,000 hours on the previous year’s figures.
Jonathan Reynolds
PVC Recycling in my constituency runs a groundbreaking scheme in conjunction with the Prison Service and provides offenders with paid work for sorting through plastic composites. I am told that those skills are much in demand in the private sector when people finish their sentences. The work stops a huge amount of material going to landfill or being exported to the developing world. Will the Minister look at whether that scheme can be expanded, because I am told that there is considerable scope for expansion to prisons across the country?
Jeremy Wright
Yes, I will certainly look at that. We are keen to see the expansion of exactly that kind of work, for the reasons the hon. Gentleman gives. It is good for prisoners because they learn the hard skills of a trade and the softer skills of going to work in the morning and working a proper day, and we all benefit if offenders have the skills they need to ensure that they do not reoffend on release. I will look at what he has described. If we can find a way of expanding it, we will.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Does my hon. Friend agree that it is entirely right to make prisoners work, and that the enforced idleness that there has been in prisons has to be reversed because that will lead to prisoners getting gainful employment on release?
Jeremy Wright
I agree entirely with my hon. Friend. It is right, and it is what the public expect, that prisoners do something productive while they are in custody, rather than simply sitting around in their cells. That could involve a range of things such as work, education or drug treatment, but he is right that his constituents and mine would expect them to be doing something.
Mrs Mary Glindon (North Tyneside) (Lab)
15. When he expects to announce the Government’s response to the consultation on the future of the probation service.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
As I indicated a moment ago, following my meetings tomorrow with a series of stakeholders, I will finalise a paper setting out my proposals for delivering a rehabilitation revolution. The paper will include a response to the previous consultation on probation reform and set out how my proposals have developed. It will be published early in the new year.
Mrs Glindon
The Secretary of State will be aware that Northumbria probation trust has received the best inspection results so far from Her Majesty’s inspectorate. How will he ensure that probation trusts continue to be effective in protecting the public and reducing reoffending after the review, given that it is proposed that offender management will be fragmented across a wide range of providers?
Chris Grayling
As I have indicated, we have some high-quality probation professionals in this country. It is a profession that will remain important to us. We need specialist skills, particularly in the protection of public security, risk assessment and harm prevention. Such skills will remain integral to the way in which a public sector probation service works.
Paul Goggins (Wythenshawe and Sale East) (Lab)
16. What plans he has to extend the use of restorative justice.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
The Government published their restorative justice action plan for the criminal justice system on 19 November. It will improve the victim’s awareness of and access to restorative justice. We have also introduced legislation to put restorative justice on a statutory footing.
Paul Goggins
I am grateful to the Minister for that answer. I welcome the Government’s action plan, to which she referred, including the clear commitment to the needs of victims. However, if she and her colleagues are to embed restorative justice at the heart of the criminal justice system, she will need to find additional resources. Will she make a commitment now to allocate to restorative justice some of the extra money that has been raised from offenders through the extended victims surcharge?
Stephen Gilbert (St Austell and Newquay) (LD)
17. What steps he is taking to improve community sentences.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Government are determined to ensure that community sentences are effective at punishing and rehabilitating offenders. We have increased the length and duration of curfews and given courts greater flexibility to impose programme and treatment requirements. We are also making the delivery of community payback swifter and more intensive. Provisions in the Crime and Courts Bill will ensure that new community orders contain a punitive element, give courts new powers to monitor the location of offenders electronically, and, following on from the comments of the right hon. Member for Wythenshawe and Sale East (Paul Goggins), increase the use of pre-sentencing restorative justice.
Stephen Gilbert
I welcome the steps that my right hon. Friend has outlined. Newquay, in my constituency, sees a large and welcome influx of visitors each year, a minority of whom commit antisocial behaviour. What assurance can my right hon. Friend give me that community sentences will be served in the areas where the crimes occur?
Chris Grayling
That would of course be the norm, but the most important thing is not geography but that punishment takes place. Given the circumstances that Newquay faces, I hope that the addition of a punishment to a community sentence will be a timely reminder to a lot of young people of what they can and cannot do. That approach will create a system that is better and more appropriate for Newquay.
Ian Lucas (Wrexham) (Lab)
Wales probation trust has carried out excellent community-related work with local voluntary services in north Wales. Will the Secretary of State confirm that he sees a role for probation services in the brave new world to which he has referred?
Chris Grayling
I can absolutely do that. I have visited the Wales probation trust and am impressed by what it has done, and I am absolutely committed to seeing high-quality, specialist public sector probation officers continuing to deliver the support that we need them to deliver, particularly to prevent harm from coming to members of the public.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Today, in accordance with the timetable set out in its terms of reference, the Commission on a Bill of Rights has delivered its final report jointly to the Deputy Prime Minister and myself. The Government thank the commission for the diligent manner in which it has discharged its task. It reflected the remit set out in the coalition’s programme for government of establishing a commission to examine the creation of a British Bill of Rights that
“incorporates and builds on all our obligations under the European Convention on Human Rights, ensures that these rights continue to be enshrined in British law, and protects and extends British liberties.”
The House knows very well my strong views on these matters, and we will now give the report careful consideration.
Mrs Hodgson
What assessment has the Secretary of State made of the medium to long-term demand on the youth justice system, given that the budget for early intervention work such as helping troubled families and supporting teenage drug and alcohol programmes will have been cut by 40% by the end of this Parliament?
Chris Grayling
I think the hon. Lady misunderstands the position. The Government are putting a huge effort into tackling the problems in troubled families, with work taking place in the Departments for Communities and Local Government and for Work and Pensions. I hope that we can make a real difference by reducing offending. The contribution of restorative justice will make a difference, and our rehabilitation revolution will help to ease pressures on our criminal justice system.
Lorely Burt (Solihull) (LD)
T2. Last week, the Public Accounts Committee published its report on the Ministry of Justice’s language services contract. It concluded, among other things, that Applied Language Solutions does not have enough interpreters available to meet demand, and that the interpreters who are provided do not all have the necessary qualifications. Does the Secretary of State intend to implement the Committee’s recommendations to address those pressing issues?
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
Interpreting services in court are at a 95% success rate, and the National Audit Office has said that we should go on and implement the proposals fully. The contract is saving us £15 million a year of taxpayers’ money, and as long as we continue to work with interpreters—we have already had an important meeting with them—the new system will be more sustainable, effective and transparent than the old one.
Sadiq Khan (Tooting) (Lab)
The British Human Rights Act provides protection against cruel and inhumane treatment, including the right to a fair trial, the right to life, the right to family life and freedom of expression. It makes explicit the fact that Parliament is sovereign, and that even the Supreme Court cannot trump Parliament. Bearing that in mind, will the Justice Secretary make it clear that it is the British Human Rights Act that he so opposes, or is it the British courts that interpret the law? Which of the rights in the British Human Rights Act would not be included in his Bill of Rights?
Chris Grayling
The original human rights convention was a laudable document written when Stalin was in power and people were sent to the gulags without trial. Over 50 or 60 years of jurisprudence, the European Court of Human Rights has moved further and further away from the goals of its creators, and I believe that this is an issue that we have to address in this country and across Europe.
Sadiq Khan
I know that the right hon. Gentleman has done the primer, but I did not mention the European convention or the European Court—I mentioned the Human Rights Act. Will he answer a simple question? Will he confirm that were it not for the Human Rights Act, the extradition of the Asperger’s-suffering Gary McKinnon to the USA could not have been stopped by the Home Secretary?
Chris Grayling
I am a bit puzzled by the right hon. Gentleman’s comment, because the Human Rights Act enacts the convention in the law of this country. I think, and many in the House agree, that the remit of the Court has expanded beyond its creators’ original intention, which is why we need reform.
Simon Wright (Norwich South) (LD)
T3. Will the Secretary of State seek to make an example of some of the best practice work experience schemes for serving prisoners such as the big society award-winning custody and community project at Norwich’s Chapelfield shopping centre, which is highly effective in cutting reoffending?
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
I certainly agree with my hon. Friend that we want more prisoners to have experiences, such as the one he mentions, in the right controlled conditions, and we want to make sure, as I said, that prisoners have experience of work as well as of work experience.
Ian Lucas (Wrexham) (Lab)
T6. The prisons Minister recently met council leaders from north Wales to discuss the long-standing issue of a prison in the area. Will he meet north Wales Members of Parliament to keep them in the loop on his thinking, or does he intend not to keep them informed?
Jeremy Wright
As I recall, almost all the council leaders who came to see me on that occasion were Labour council leaders, so I am not sure whether the hon. Gentleman has a communication problem with his own councillors. This is going to be part of a much wider consideration of the prison estate that we will undertake. As soon as we are in a position to make decisions we will attempt to keep informed all those who need to be informed.
Jessica Lee (Erewash) (Con)
T4. At this time of year, our thoughts often turn to those who are living on their own and are more vulnerable. Will my right hon. Friend set out what support is being offered to groups such as the Erewash community safety partnership in their fight against antisocial behaviour and to the efforts of all to bring the perpetrators of antisocial behaviour to the justice they deserve?
The Minister for Policing and Criminal Justice (Damian Green)
I am happy to join my hon. Friend in paying tribute to the Erewash community safety partnership, and to reassure her that this is one of the many areas where the Home Office and the Ministry of Justice are working together closely. She will know that last week my right hon. Friend the Home Secretary published a draft Anti-Social Behaviour Bill, which aims precisely to help community safety partnerships put victims at the heart of their response to this problem. The Ministry of Justice is funding a number of organisations, including Victim Support, that are working to the same end.
Paul Goggins (Wythenshawe and Sale East) (Lab)
T8. I know that the Minister responsible for probation has had the opportunity to visit Manchester and see for himself the intensive alternative to custody programme, which is co-ordinated by the Greater Manchester probation service and has achieved significant reductions in the rate and seriousness of offending. Will he and the Secretary of State make a clear commitment that, under the new commissioning arrangements, whenever they are announced, that tremendously important initiative will continue?
Jeremy Wright
I am grateful to the right hon. Gentleman for raising that, and I certainly enjoyed my visit to Manchester, where I could see that a great deal of good work was being done. He can take reassurance from the fact that the system we will roll out will reward those things that work. If the intensive alternative to custody programme is as effective as it appears to be, it will work and it will be rewarded.
Mr Dominic Raab (Esher and Walton) (Con)
T5. The Bill of Rights commission report that has just been published has split views on many issues, but a majority think that the status quo is unstable and, interestingly, a majority want further reform of the Strasbourg Court. What reassurance can the Secretary of State give us that he remains committed to defending the House from the creeping usurpation of democratic power by the Strasbourg Court?
Chris Grayling
I can give my hon. Friend an absolute commitment. The Conservative party—although not the Opposition, from what we have heard today—is committed to the need for change and to ensuring that international human rights frameworks do not inappropriately intrude on the democratic decisions of this Parliament.
Jim Shannon (Strangford) (DUP)
Does the Minister agree that an essential part of probation for reoffenders is monitored interaction within the community, and that community service can be a useful tool for reintegration in society?
Jeremy Wright
I agree with the hon. Gentleman that we must ensure that prisoners reintegrate. That work should start when prisoners are still in custody and continue through the gate into the community. We want to see more of that and will encourage it in any new system that we design.
Stephen Mosley (City of Chester) (Con)
T7. The Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) mentioned the victims commissioner. Will she update the House on what progress has been made towards the appointment of a victims commissioner, and when that appointment is likely to take place?
Steve McCabe (Birmingham, Selly Oak) (Lab)
Very agog, Sir. Will the Secretary of State say when he plans to end the scandal of making welfare benefit payments to prisoners serving a sentence?
Chris Grayling
That is a matter for the Department for Work and Pensions but I am absolutely of the view that benefit payments should not be made to serving prisoners. I hope and expect that the DWP will deal with that issue. I believe that my right hon. Friend the Secretary of State for Work and Pensions has already taken steps to ensure that the system we inherited, in which that kind of thing could happen, comes to an end.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
T9. Does the Secretary of State agree that although judicial review is important, in many circumstances its use can become excessive?
Chris Grayling
I absolutely agree. The proposed consultation and the measures that we set out last week, which we think will make a difference as a first stage towards reforming judicial review, are essential. We must bear in mind that only one in five judicial reviews succeed. They are a huge burden on our justice system and a price the nation has to pay. We will be looking at whether further changes can be made to ensure that we protect the integrity of judicial review as a valuable tool for challenging the Government, while not allowing it to continue as a tool that can be abused.
Bill Esterson (Sefton Central) (Lab)
The most vulnerable people in my constituency will suffer most from cuts to legal aid. Is it not the case that under this Government there is one law for the few who can afford expensive legal advice and another law for the rest?
Chris Grayling
It is noticeable that time and again in these sessions we hear what are effectively spending commitments from the Opposition. They want to spend more money on legal aid, despite the fact that—by their own admission—they left us with no money in the bank. The hon. Gentleman must accept that we have to take tough decisions to reduce the cost of the most expensive legal aid system in Europe, and we will take those decisions.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Many of us who were young advocates took work from legal aid at the start of our careers. If that work goes, will my right hon. Friend look at promoting mediation across all departments—welfare departments, health tribunals and the works—to help young aspiring advocates and barristers make up the income they will undoubtedly lose?
Chris Grayling
My hon. Friend’s point about mediation is important and highlights the fact that when dealing with the financial challenges we face, the Government must look for innovative new ways of doing things. Mediation is certainly one of those.
Yvonne Fovargue (Makerfield) (Lab)
How many people do the Government expect to be able to challenge welfare benefit decisions at the highest level on a point of law in the future if they continue to claim that it is too difficult to find a way to identify cases and provide legal aid, despite the Minister’s reassurances to the Legal Aid, Sentencing and Punishment of Offenders Bill Committee?
Chris Grayling
We are still in discussions about how to respond to the vote in the House of Lords, but we must accept that there are limits to what the Government and the taxpayer can provide in terms of legal support. There will always be limits to what the state can do, and we are trying to find the right balance in exceptionally difficult financial circumstances.
Priti Patel (Witham) (Con)
This week the public learned that the legal aid bill for the radical cleric Abu Qatada stands at over half a million pounds and is still rising. Will my right hon. Friend put an end to that misuse of public money?
Chris Grayling
I would make two points to my hon. Friend. First, whether we like it or not, we will always, in the interests of justice, have to provide some support to people whom we find distasteful. Secondly, the reality is that I share her concerns. I have already commissioned a review of aspects of our legal aid system in which I believe there are public confidence issues. I hope to give my thoughts on that front in due course.
Mr Bob Ainsworth (Coventry North East) (Lab)
The Courts and Tribunals Service has admitted that there is a 55-week wait for appeals on employment and support allowance in Coventry. That is higher than the 37 weeks admitted by Ministers and higher than the national average. What will be done to end that disgraceful state of affairs?
Chris Grayling
We are doing two things, but the right hon. Gentleman needs to bear in mind that the backlog has existed not just under this Government, but under his Government. The reality is that we are dealing with a very large number of cases. We are working hard to improve decision making within Jobcentre Plus, and have taken on board the recommendations of Malcolm Harrington to improve the process. One challenge we face is that when we are taking tough decisions on benefit entitlement and when people are free to appeal, there will always be a propensity to do so.
Andrew Jones (Harrogate and Knaresborough) (Con)
Will the Secretary of State ensure that charities and voluntary organisations can continue to provide their services for the rehabilitation of offenders?
Jeremy Wright
I can certainly give my hon. Friend that assurance. We want to encourage the good work that is already being done by a large number of voluntary and community sector organisations to provide the expertise that all hon. Members want incorporated into the rehabilitation revolution. Yes, we want to see more of that.
Mr George Howarth (Knowsley) (Lab)
The Secretary of State seemed to confirm a moment ago in a reply to the hon. Member for Witham (Priti Patel) that the legal aid bill for Abu Qatada came to half a million pounds, as has been reported in the newspapers. Will he therefore explain why he refused to provide that figure in a written answer to me last week?
Chris Grayling
I will have to look into that. I am not aware that I have refused to provide anything. The figure has been made publicly available.
Mr Robert Buckland (South Swindon) (Con)
Last year, the number of applications for permission to apply for judicial review in immigration and asylum cases reached a point at which they represent more than three quarters of the total number of such applications. What will my right hon. Friend do about that growing issue?
Chris Grayling
Our consultation includes proposals to introduce a series of limitations in the judicial review process, particularly to stop people coming back again and again looking for new legal nuances to launch a new case. I believe, as does the judiciary—this has been highlighted in a number of recent cases—that judicial review is simply being used as a vehicle to delay being deported from the country, which is wrong.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
The all-party parliamentary group on child protection is conducting an inquiry into the review of family justice and the Government’s proposed reforms. We have today heard that in most situations the judge did not meet children in the looked-after system before making decisions about their lives. Is it not time that judges who work on family justice cases are dedicated to family justice rather than dealing with other cases, so that we can ensure that they are properly trained and can communicate properly with children?
Chris Grayling
It is not for me specifically to instruct the judiciary on how they handle cases—the independence of the judiciary is a feature of our system. However, I am sure the hon. Lady’s comments will have been heard by those who lead the family division. It is very much a matter for judges to decide how best to ensure that they have the right mix of experience.
Tim Loughton (East Worthing and Shoreham) (Con)
Topically, Liz Calderbank, the chief inspector of probation, has today produced a report into what she calls the depressing and flawed care system, in which too many young people in care end up in the youth justice system. What part are Justice Ministers playing in the Department for Education review of vulnerable children placed a long way from home, often in inappropriate children’s homes and other accommodation?
Chris Grayling
We are doing two things. First, we are undertaking a complete review of how we detain young people. I am uneasy—to say the least—about a system that costs a substantial amount of money and yet has a high reoffending rate. I do not believe we are getting it right, and we are looking to introduce a process in the new year to address how we detain young people. Secondly, I am in regular contact with my right hon. Friend the Secretary of State for Education. I believe we are due to meet to discuss those issues in the next few days.
Steve Rotheram (Liverpool, Walton) (Lab)
After a lengthy campaign, tomorrow the High Court will hear the application from the Attorney-General to quash the original verdicts into the deaths of 96 Liverpool fans at Hillsborough in 1989—
Mr Speaker
Order. The hon. Gentleman must resume his seat. My strong sense—I do not have advance briefing on the detail of the matter—is that the issue that he is raising could well be sub judice.
Mr Speaker
Order. It is not a matter to be raised now, so we will leave it there. I am sorry to disappoint the hon. Gentleman.
Petition
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The petition states:
The Petition of residents of Middlesbrough,
Declares that the Petitioners acknowledge the unfair and savage cuts imposed on Middlesbrough and particularly the impact to Hemlington library; further that the Petitioners note that local authors Richard Millward and Peter Brunton support this Petition and also note the great work done by local Councillors Nicky Walker and Jeanette Walker who made this Petition possible, alongside local volunteers including school children from Hemlington Hall Primary, St. Gerard’s Primary and Viewley Hill School.
The Petitioners therefore request that the House of Commons urges the Department for Communities and Local Government to explore every possible avenue, including the obtaining of funds from the development at Hemlington Grange, to keep Hemlington Library open.
And the Petitioners remain, etc. [P001151]
Points of Order
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Rob Wilson (Reading East) (Con)
On a point of order, Mr Speaker. During Prime Minister’s questions on 24 October 2012, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—I have given her prior notice of this point of order—made the serious accusation on the Floor of the House that a relationship existed between:
“Virgin Care donations to the Tory party, the number of Virgin Care shareholders on clinical commissioning group boards and the number of NHS contracts that have been awarded to Virgin Care”.—[Official Report, 24 October 2012; Vol. 551, c. 919.]
That assertion appears to have been picked up from a blogger who has since apologised and withdrawn it. The hon. Lady’s remarks carry a very serious and clear insinuation of a potentially corrupt relationship between Virgin Care, the Conservative party and the award of NHS contracts. However, when I checked the Electoral Commission’s online register of political donations, I found no record of any donation by Virgin Care to any political party. Is it not the tradition for a Member who has perhaps inadvertently made false claims or assertions on the Floor of the House to come to the House at the earliest opportunity to set the record straight?
Mr Speaker
What I say to the hon. Gentleman is twofold. First, I hope and am confident that the hon. Member has given proper notice to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) of his intention to raise this point on the Floor of the House.
Mr Speaker
I thank the hon. Gentleman for that. Secondly, with specific reference to the hon. Gentleman’s question, right hon. and hon. Members must take responsibility for the accuracy of what they say in the House—the Chair cannot take over that responsibility. His point will have been heard by the hon. Member and by others, and I thank the hon. Gentleman for putting it on the record.
Mr Speaker
We are not going to have a debate about the matter that the hon. Gentleman could not raise. However, if he wants briefly to raise a point of order, he can.
Steve Rotheram
On a point of order, Mr Speaker. I understand your concerns about raising matters in this House that are sub judice, and I would never put you, as the Speaker of the House, in that position. My question was going to be that whatever the outcome, every eventuality should be afforded to the families and that the Secretary of State should be considering a possible outcome in which the families would need support from the public purse for any inquest that might follow on from any decision in the High Court tomorrow. That is all I was asking.
Mr Speaker
I understand what the hon. Gentleman is asking and what he describes as all he was asking, but I am afraid that the operation of the sub judice rule is not undertaken or applied on a selective basis entertaining various hypothetical scenarios. If a matter is sub judice, and I am so advised, it is sub judice. It is not open, in such circumstances, for a Member to pick upon an aspect of the matter that he thinks it timely to raise. The ruling I gave was on the basis of advice at the time, and I believe it to be correct. If I were incorrect, I would be very happy to say so to the hon. Gentleman. He is indefatigable in the pursuit of this issue and properly so, but he will accept that we must operate on the basis of the rules. He has said his piece, I respect that, and that is the end of it.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Further to that point of order, Mr Speaker. It might be helpful to say that my Department is mindful of the financial pressures faced by the Hillsborough families. We all recognise the very difficult circumstances they have been through, and they are certainly in our consideration.
Mr Speaker
That is not sub judice; it is a relatively unusual way for the Secretary of State to voice the Government’s thinking on this matter. I thank him in the spirit in which his comment was made. There is no doubt that if the Government have got further and better particulars on the matter, at some point that will become clear. We will leave it there and I thank him.
Lorely Burt (Solihull) (LD)
On a point of order, Mr Speaker. I have never raised a point of order before, but I feel that I must today. I tabled a question for today’s questions regarding the family justice review. The question was approved by the Table Office and successfully drawn as No. 5 in the ballot, but it was withdrawn by the Ministry of Justice, because it deemed it to be irrelevant to its Department, despite the fact that it had been corresponding with me on this matter since last June. My constituent, Mr Neil Brotherton, who is trying to improve children’s access to their family when their parents separate, was to have been here today to hear the Minister’s answer. Will you advise me, Mr Speaker, on what course of action I may now pursue, not just for Mr Brotherton, but for other constituents?
Mr Speaker
I am happy to oblige the hon. Lady. I am sorry that it was her first point of order, but I am quite certain it will not be her last. My response to her point of order is twofold. First, my understanding—I do not wish to be pedantic, but I think it is factually correct and an important point—is that the question was not, as she put it, withdrawn, but transferred. Secondly, on how she should proceed, I would say that she is an ingenious Member and will know that there is plenty of scope for tabling questions, seeking Adjournment debates and raising matters during oral questions, and there are also the auspices of the Backbench Business Committee, so there are plenty of facilities open to her.
Although the Table Office seeks to advise hon. Members where there is a risk of an oral parliamentary question being transferred, the prediction of the allocation of ministerial responsibility is not an exact science. It is for the Government to decide where responsibility lies for answering a question, and I do not intervene in such decisions. I recognise that they can be the source of frustration or irritation, but they are not matters for the Chair. Furthermore, for the hon. Lady’s benefit and that of the House, I must make the specific point that nothing disorderly has occurred.
Joan Walley (Stoke-on-Trent North) (Lab)
Further to that point of order, Mr Speaker.
Mr Speaker
I am not sure there is a further to that point of order, but the hon. Lady has been in the House 25 years, so we ought to give her the benefit of the doubt.
Joan Walley
I, too, had an oral question down for answer during Justice Question Time, but was told at the last minute that it had been transferred to the Cabinet Office, because the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), who is now dealing with it, was unable to answer it as part of the Justice Front-Bench team. Will you have regard to the difficulty of raising issues on behalf of our constituents owing to internal transfers within the Government?
Mr Speaker
I am grateful to the hon. Lady for her point of order, but my earlier statement still applies: it is a matter for the Government. I say that not least because we are in the presence of the esteemed Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke)—[Interruption.] No, there is no need for him to rise from his seat at this point, though it is always a pleasure to listen to him. Nevertheless, I attach great importance to early decisions on transfer. If a question is to be transferred, it is for the convenience of the Member and the House as a whole that the decision be taken and the Member notified at an early stage. After his 42 years in the House, I know that the right hon. and learned Gentleman would be the first to assent to that uncontroversial proposition.
Welfare Cash Card
Alec Shelbrooke (Elmet and Rothwell) (Con)
I beg to move,
That leave be given to bring in a Bill to provide for the introduction of a welfare cash card; and for connected purposes.
The principle of the Bill is to encourage responsible spending by welfare claimants, ensuring that taxpayers’ money is spent wisely and for the purpose it is intended. It will alter the spending habits of a minority who for far too long have taken advantage of the system, getting something for nothing. Consequently, I believe that it will change the perception of benefits in this country for the better. Politicians, the media and those from varied walks of life have been complicit in tarring as idle all 5.88 million recipients of one or more benefits from the Department for Work and Pensions. In fact, however, the time someone finds themselves on benefits is the time strivers and low-paid workers most need a supportive society where they are given the respect most deserve in trying to make work pay.
It is 70 years this month since the Beveridge report identified the five giant evils that plagued society: disease, want, ignorance, squalor, and idleness. Members on all sides of the House will want to praise successive Governments for their advances in eradicating these evils, but one remains prevalent today. The “something for nothing” culture encouraged by the previous Labour Government created a two-tier benefits system in which the strivers and low paid-workers were penalised for the idleness of the shirkers.
The Bill seeks to work alongside the Government’s welfare reforms to support those hard-working families who strive to be self-supporting by ending the “something for nothing” stigma of the welfare system. The introduction of a welfare cash card on which benefits would be paid would enable claimants to make only priority purchases such as food, clothing, energy, travel and housing. The purchase of luxury goods such as cigarettes, alcohol, Sky television and gambling would be prohibited. When hard-working families up and down the country are forced to cut back on such non-essential, desirable and often damaging items—NEDD items, as I call them—it is right that taxpayer-funded benefits should be used to fund only essential purchases.
No doubt, Opposition Members will say that people would be too ashamed to carry a welfare cash card, but I want to discount that argument immediately. If people did not want to be recognised as being unemployed, jobcentres would cease to exist as people would not visit them for fear of being seen in them.
Owing to the differing circumstances involved, this measure would not affect the basic state pension or disability benefits. For all other claimants, however, this move towards responsible spending would support the introduction of universal credit and the change from fortnightly to monthly welfare payments. It would place a focus on the financial planning that will be crucial in ensuring that out-of-work families take charge of their monthly spending. The welfare cash card would encourage that by prohibiting the purchase of NEDD items, thereby increasing the funds available for purchasing food and other essential commodities. It would mould financial responsibility for all claimants and provide an opportunity for out-of-work families to take charge of their finances just as they would need to when they got back into employment.
A stigma around those on benefits is commonplace, but that is neither accurate nor fair to low-paid workers who rely on the extra support that the welfare system offers. We need to stop the damaging perception that all benefit recipients are financially reckless. If taxpayers can be safe in the knowledge that claimants can no longer purchase NEDD items at the taxpayer’s expense, the concept of welfare will be viewed once again as a responsible way for people to get back on their feet. That is what the welfare state was intended to be: a safety net in times of need; a hand up, not a hand-out.
Beveridge had such a high opinion of society that he thought nobody would want to choose not to work. The last decade has proved otherwise, however, with the previous Government allowing an epidemic to fester. It is now time to modify the system so that this socially destructive state-funded way of living is no longer an option. Surely we should aim to introduce measures to enable society to be supportive and respectful of those struggling to succeed, which is what this form of financial monitoring could achieve.
Furthermore, the welfare cash card has the potential for more social good, not least by assisting efforts to eradicate child poverty. Statistics show that over 1.26 million claimants have children. Prohibiting the purchases of NEDD items such as cigarettes and alcohol would leave more money for priority purchases for children, who should not be the ones to suffer as a result of their parents’ irresponsible spending. To put this in monetary terms, the Office for National Statistics has calculated that the average household spends £48 a month on cigarettes, alcohol and narcotics. If the Bill created even the slightest chance of raising those children out of poverty, or of reducing the chance of them going to school hungry or being subjected to secondary inhalation of smoke, I would argue that it was worth while.
A ban on cigarette and alcohol purchases would also inevitably impact on NHS costs. This is not to suggest that welfare claimants are purposely taking advantage of the NHS, but a reduction in smoking-related and alcohol-related admissions would be a natural by-product of the welfare cash card. Smoking-related illnesses are estimated to cost the NHS at least £2.7 billion a year in England alone, with the same cost attached to alcohol-related harm. With that figure expected to rise to £3.7 billion by 2015, it is simply wrong that the state is inadvertently fuelling the problem by allowing the use of welfare payments for the purchase of NEDDs.
The Bill is about safeguarding the use of taxpayers’ money and supporting claimants in managing their own incomes. In the 21st century, it is right that we should maximise the benefits of technology for increased efficiency and reduced bureaucracy. In doing so, we would join Australia and the USA in leading the way in which welfare payments are made to claimants. In Australia, a five-year pilot of the Basics card is under way, and in America, the 47 million recipients on the food stamp programme receive their credits on an electronic benefit transfer card.
A welfare cash card would be a sensible step forward as we move towards universal credit. The cash card would operate like any other bank card utilising the chip and PIN payment method. There is also scope to use the cash card to increase the use of public transport, through an integrated travel pass, to assist travel needs.
This is about benefit distribution and spending, not about benefit allocation. Whatever the amount that is received on welfare, it is paramount that we are sure that it is being used in the best way to benefit society. The Beveridge report modelled a welfare state using the insurance contributions an individual pays to support them when they fall on hard times. At a time when it is not uncommon for families to have third-generation benefit claimants, who have never made these insurance contributions, this model is becoming increasingly unviable and the need for reform is urgent.
This Bill would promote financial planning and spending by those in society who have fallen on hard times and require support from the state. It backs those hard-working families who feel penalised for going to work, such as the single mum in my constituency—a low-paid shop worker on income support, juggling child care but going to work because she believes it is better to work than spend a life on benefits.
We must change this vision of the benefits system. We must change this perception to support those in society who need the benefit system to help them get on and work hard in life. The welfare cash card does just that: it is not about dividing to rule, but ending Labour’s divisive two-tier benefit system and the damaging perception that accompanied it. It backs the low-paid workers and supports all jobseekers to spend responsibly, take control of their finances and get back on their feet. The welfare state can no longer be seen as getting something for nothing: it must deliver on Beveridge’s vision of a temporary security net by using benefits to create a striving society.
Question put and agreed to.
Ordered,
That Alec Shelbrooke, Jessica Lee, Nigel Adams, Gareth Johnson and Kris Hopkins present the Bill.
Alec Shelbrooke accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 25 January 2013, and to be printed (Bill 112).
Justice and Security Bill [Lords]
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:31 - The House divided: - Ayes: 262 / Noes: 18 - Question accordingly agreed to.
Minister without Portfolio (Mr Kenneth Clarke)
I beg to move, That the Bill be now read a Second time.
Since we first consulted on the Bill and during its passage through the House of Lords, it has aroused quite a bit of passion and debate among those interested in the subject. The first aim of my speech will be to try to satisfy the House that most of the passion and debate turns on the very important detail of the way in which the Bill’s processes will work. No doubt, the detail will be considered at great length in Committee rather than today. I believe that I can demonstrate that there is no real division on principle between the Government and most of the people who have debated this matter. The Government are just as committed as any other Member of either House of Parliament to the principles of justice being done in civil cases, the rule of law and the accountability of our intelligence agencies both to the courts and to Parliament. I believe that accountability will be improved by the Bill.
Our intelligence services comprise brave men and women, and we all realise they do essential work in helping to protect us against the great threats to this country. We also insist that they should respect and follow our values when carrying out their work, and they are properly accountable to the law and Parliament. I think the best people in the intelligence agencies are anxious to be able to demonstrate that, to protect their reputation and taxpayers’ money for claims made against them.
Sir Menzies Campbell (North East Fife) (LD)
Before my right hon. and learned Friend embarks on a more detailed consideration, I wonder whether he understands that the amendments made in the House of Lords have been regarded by many people as being entirely favourable and reasonable. Will he confirm whether Her Majesty’s Government will accept those amendments and will remain open to any further amendments, particularly those with the purpose of extending the discretion of the courts?
Mr Clarke
I shall come on to the detail a little later in my speech and I want to start, if I may, by reiterating the case in principle. I will deal with the amendments later, and we will accept some of them, but express our doubts about others. We will come back with a detailed response in Committee. I think the people who moved those amendments were pushing at an open door in terms of judicial discretion, but they were desperately anxious to dot every i and cross every t. In some cases, we are going to have to consider whether they put the right dots on the right i’s and crossed the right t’s. I shall deal with that. I quite understand that the Joint Committee on Human Rights came forward with recommendations that commanded wide support in the House of Lords—and, no doubt, in this House, too—but Ministers need to address them properly. If we wish to come back to some of them, we will explain in detail the reasons why.
Let me get under way. It was about a year ago when the House—
Dr Francis
Do I detect from the warm way in which the Minister responded and referred to the report of the Joint Committee on Human Rights that he will be minded to accept many of its recommendations?
Mr Clarke
Minded to? Certainly—we will accept some of them. I speak warmly of the Joint Committee because I do not believe it was pursuing objectives that differed from mine or those of my colleagues. I think it will probably fall to the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire) to explain in Committee why we are not wholly convinced that every one of the amendments is quite right, or even that some of them would have the effect that the Joint Committee proposed. I will not, however, get into that level of detail so early in a Second Reading speech, if I may be allowed not to do so.
We discussed the Green Paper about a year ago, and I recall that it was a comparatively non-controversial occasion. Such was the general satisfaction and understanding on all sides that I left the Chamber wondering whether I needed to have bothered to make an oral statement. Quite a lot has happened since then, but I trust it has not shifted the opinion of the Members who joined in the debate at that time, particularly that of the shadow Justice Secretary, the right hon. Member for Tooting (Sadiq Khan). I still strongly agree with what he said, which I shall quote:
“We need, as a matter of urgency, to bolster the safeguards and scrutiny mechanisms concerning issues of security and intelligence.”—[Official Report, 19 October 2011; Vol. 533, c. 901.]
I am glad to see the right hon. Gentleman nodding his head in response to his own quotation. I was glad to read in a recent interview in The Guardian that he still believes that, as he said:
“In two and a half years’ time, it could be me in that seat making that tough decision. So it is very important for ministers to have the opportunity to protect sources, to protect delicate operations and all the rest of it. They shouldn’t be jeopardised by a civil action.”
I will not comment on the right hon. Gentleman’s political optimism and ambition to occupy any seat at all, but he is certainly right, in my opinion, to identify a serious problem with the current arrangements. At the moment, total secrecy is all that happens to the sensitive intelligence information in far too many cases and no judicial judgment is pronounced on the merits of plaintiff versus defendant. I believe that the present system needs to be reformed urgently. That is why the principle of the Bill is certainly necessary.
In support of the need for change, let me remind the House of a letter written to The Times newspaper last month by a number of individuals for whom I personally have the greatest respect. The signatories included the former Lord Chief Justice, the noble and learned Lord Woolf; the former Home Secretary, Lord Reid; and my right hon. Friend Lord Mackay of Clashfern, a former Lord Chancellor. I am sure we all agree that all those people are totally committed to the rule of law and the principles of justice. In their letter they explained:
“In national security matters our legal system relies upon a procedure known as public interest immunity…Under PII, evidence which is deemed to be national security sensitive is excluded from the courtroom. The judge may not take it into account when coming to his or her judgment.”
This procedure, they say, is
“resulting in a damaging gap in the rule of law.”
They are right to say that.
In my opinion, it has become well nigh impossible for British judges to untangle, and adjudicate on, claims and counter-claims of alleged British involvement in the mistreatment of detainees. If we, as citizens, want to know whether the Security Service could challenge and rebut what is claimed against it, no judge can give us guidance as things stand. Some of the allegations of British involvement in the mistreatment of detainees are really serious, and I do not think that the system should continue to prevent judges from scrutinising the secret actions of the state in such cases.
Hazel Blears (Salford and Eccles) (Lab)
Not only will judges not have the full information, but when cases are settled, adverse inferences will inevitably be drawn about behaviour that may or may not have taken place, and that affects the reputation of our agencies. Is it not therefore essential that we can get to the heart of the matter, so that the agencies can at least put their case?
Mr David Davis (Haltemprice and Howden) (Con)
Will my right hon. and learned Friend give way—on that point?
Mr Clarke
Let me just explain. All of this is relevant.
Some of our critics appear to be arguing decisively that the status quo is somehow defensible and should continue, but I believe that that position is untenable now. It is simply not possible for a judge to hear these matters, and, as was pointed out by the right hon. Member for Salford and Eccles (Hazel Blears), all kinds of insinuations are made about cases in which it ought to be obvious to everyone that the intelligence agencies were in no position to call any evidence that would seriously address the issues.
The serious evidence that might be called and might be relevant—I am not commenting on the merits of any individual cases—might relate to the precise nature of the British intelligence agencies’ involvement in the issues concerned. What did our agents know about either an individual or an organisation at the time when the events being described were taking place? What collaboration was taking place between the British Government and partners in overseas agencies, and what information was being shared? Those are all very sensible questions, given the nature of some of the claims that have been made about the behaviour of British agents.
As I have told the House before, I do not think that any country in the world would tolerate a legal system in which our spies and our agents and their collaborators cheerily appeared in open court, in front of the parties, their lawyers and the press, and gave evidence on these matters. It would be exceedingly damaging. Public interest immunity, on which people now rely, has one obvious defect. If a Minister obtains it, that means that the material is entirely excluded from the court, and neither party can rely on it.
What continually happens, certainly in relation to defence evidence, is that—although there has been no proper hearing of all the evidence—the parties settle, the taxpayer pays up, claims are made which are damaging to the reputation of the service and no one knows whether or not they are justified, and we have to move on from there. I want us to reach a point at which cases are not being settled simply because our court procedures are not capable of allowing sensitive national security material to be heard in the few cases in which it is plainly relevant. It has always been obvious to me that what is needed in civil actions of this kind is the very limited use, in exceptional cases, of the closed procedures that were created by the last Government, which would enable a High Court judge to consider all the evidence from both sides, but to do so in necessarily closed conditions if national security was at risk.
Mr Andrew Tyrie (Chichester) (Con)
What inference does my right hon. and learned Friend think the public will draw if the Government win a case involving the closed material procedure in which the other party has had no chance to see or challenge the evidence—secret evidence—that the Government have introduced in support of that case?
Mr Clarke
The inference I would draw is that at least a judge, doing the best that he or she can, has had a chance to consider the evidence, and has delivered a judgment. If the judge is not allowed to consider the evidence, obviously no useful judgment can be pronounced at the end of the case. Of course it would be very much better if the evidence were given in an open procedure—in normal cases, the openness of justice is one of the proudest boasts of our system—but in cases in which national security will be jeopardised if evidence is given openly, it must be ensured that the evidence can be given in the best possible circumstances in the light of the obvious limitations of the case.
British judges are quite capable of deciding whether or not national security is involved. British judges do not need us to lecture them on the rule of law and the duty to be impartial between the parties. British judges will want to hear evidence openly if they think that that can possibly be practicable. British judges will be able to judge—they do it all the time—the weight to be given to evidence. Once the judges discover who was the source of the information, people can be challenged about the reliability of that source. Of course the system is not ideal—if we could only persuade all the country’s enemies to close their ears, there could be a perfectly ordinary single-action trial and we could hear everything—but I believe that the Bill will move us from what is currently a hopeless position to a better position that will allow us to hear the judgment of a judge in appropriate cases.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
Is the right hon. and learned Gentleman aware of a criminal trial that took place some years ago in Caernarfon Crown court in north Wales, involving the damage to second homes, in which MI5 officers gave evidence behind a screen? Their anonymity was not compromised, and nor were the interests of the state.
Mr Clarke
Nothing in the Bill will affect the criminal law. No one will be prosecuted on the basis of secret evidence. However, there are plenty of cases—for instance, those involving MI5 or involving victims of certain types, such as vulnerable victims—in which it is proper to screen witnesses from public view, or otherwise protect them. The Bill, however, has nothing whatever to do with criminal cases.
The purpose of closed procedures is not just to ensure that no one can see what the agent looks like; there are some cases in which we cannot let people know what the agent was doing. The plaintiff may have been compromised as a result of terrorist or other activity, and he and his friends may be dying to know how they were caught. What were the British agents doing that put them on to it? They want to know who shopped them, and that will make things very difficult for a person who they come to suspect is the source of the material that is emerging. As I think everyone knows perfectly well, it is not possible to share that information with the parties in each and every case of this kind. However, while some people might consider it satisfactory to say “Well, in those cases the Government never defend themselves and we just pay millions of pounds”, I really do not think that we need tolerate that situation any longer.
Dr Francis
Given what he said earlier about closed material procedures, how would the right hon. and learned Gentleman respond to what Lord Kerr said recently in the Supreme Court? He said:
“The central fallacy of the argument”—
the Government’s argument, that is—
“lies in the unspoken assumption that, because the judge sees everything, he is bound to be in a better position to reach a fair result. That assumption is misplaced. To be truly valuable, evidence must be capable of withstanding challenge.”
Mr Clarke
I was intending to return to the details of closed material procedures later. We could easily trade quotations, because various judges and legal authorities have expressed different views.
Closed material procedures sometimes achieve success. We have them now—the previous Government introduced them—and as I shall say later, as I should save it until I get to the relevant part of my speech, there are cases in which the special advocates have overturned the Government’s case. The most well known case is that of Abu Qatada, who won in a closed material procedure before a British judge only about a month ago—
Mr Clarke
Of course it is being appealed, but that does not alter my point. Depending on which side one is on, it is no good saying that we cannot have closed material procedures if the wrong side is going to win. In that case, the Government lost and Abu Qatada won using a special advocate and a closed material procedure.
Mr David Davis
On exactly that point, my right hon. and learned Friend—and he is my friend—said that these proceedings were created under the Labour Government. They were, and there are now 69 special advocates, 32 of whom are experienced in closed material procedures. The vast majority of them—nearly all of them—oppose the Bill as they think PII works better than the procedure they have been operating for the past few years. Why does he think that is?
Mr Clarke
The special advocates surprised me with the ferocity of the evidence they provided. They start from the side of the argument that challenges the security services and is suspicious of what goes on, and judges have told me—some have said this publicly—that they underrate their effectiveness in such actions. They are used to practising the present law and I assume that their position is that the present law is perfectly all right and that they wish to continue with it. I am surprised by the adherence to PII, which has not hitherto been evident.
Let me give the example of another case to show that special advocates can successfully challenge the evidence put forward in closed proceedings by claimants. Ekaterina Zatuliveter, the Russian girlfriend of a Liberal Democrat Member of Parliament, won her deportation case after a closed hearing in which a special advocate challenged the argument that she was a threat to national security and should be deported. It is simply not the case that in closed procedures it is impossible to challenge these points. Such cases are comparatively new, as no one dreamed we would have such litigation until 10 or 15 years ago.
The claims are getting steadily more numerous as we have an attractive jurisdiction in which the person against whom one makes allegations will probably not be able to call any evidence and one will be paid millions of pounds. The best way forward is the one that has been successfully used in the two cases I have already cited, which is, despite our very limited experience, having closed proceedings and special advocates. It is less than ideal, but it is justice, not secrecy. Secrecy is what we have at the moment, with an uncertain and debatable outcome in all these cases.
Mr Jack Straw (Blackburn) (Lab)
The right hon. and learned Gentleman is correct to say, of course, that the previous Labour Administration introduced closed material proceedings in 1997, with support from all parties, as I recall. They have worked. Will he confirm that in at least seven of more than 30 Special Immigration Appeals Commission cases since the beginning of 2007, including the two he mentioned, the court has found against the Government and in favour of the potential deportee?
Mr Clarke
It was he, as Home Secretary, who introduced them. They arose partly at the behest of human rights lobbyists who are now vehemently opposing the Bill. It was the intervention of human rights activists in the case of Chahal in the late 1990s that saw the system of closed hearings develop, but some of the same people are now arguing that closed material proceedings put the Government above the rule of law.
As I have already said and as the right hon. Gentleman has with authority confirmed, people have been successful in fighting the Government in these civil actions under the closed material proceedings, as the number of claims goes—
Sir Alan Beith
My right hon. and learned Friend referred to the ability of the special advocate to challenge the evidence. Lord Kerr, in the remarks quoted earlier, talked about gisting and whether it was possible for the special advocate to confirm or correct with the other party whether he was in a particular place at a particular time, because that had come up in the evidence. We need to consider a little more carefully that ability to check back with the person who would normally be instructing the advocate but cannot because he is a special advocate.
Mr Leigh
My right hon. Friend is very generous in giving way and I understand the dilemma he faces, but is it not a fundamental principle of British jurisprudence, defended by this House for 500 years, that a defendant should have sight of the evidence used against him that might affect his liberty?
Mr Clarke
In a criminal case, that is so. That is why we cannot prosecute some people we really should, because there is no way to reveal the evidence against them—if it cannot be revealed to a judge and a jury, he is untouchable under the criminal law. We are talking about civil actions, sometimes involving people with tenuous connections with this country who have come to this country and sought damages from a British court for what they say is the misbehaviour of the intelligence agencies of the Government. I have tried to explain why it is impossible to follow the normal and desirable rules of civil justice and hear it all in the open. We must find some way in which these cases can be resolved by a judge in a way that is consistent with our principles of justice without at the same time jeopardising national security. That is the straightforward dilemma.
Robert Neill
Does my right hon. and learned Friend agree that although the proposed system is not perfect and never can be in litigation, it is surely preferable to have that than a system where an ex parte application for PII can be made without the defendant having any notice of any kind and without anybody, not even a special advocate, being able to test the material?
Mr Clarke
I keep giving way one last time, so, with apologies to my hon. Friend, let me turn to what I think is the subject matter of the serious debate that has been taking place since we consulted on the Green Paper.
It was our intention from the start to consult on the Green Paper. As what we are doing goes to the fundamentals of our legal system and our rule of law, we actively sought the widest possible support for what we are doing. Even before the Bill was introduced and before it went through the Lords, we narrowed its scope to make quite sure that CMPs could be made available only when disclosure of the material would be damaging to the interests of national security. Green Paper language that slightly implied that the police, Customs and Excise and all sorts of other people might start invoking them has gone completely away. We removed the Secretary of State’s power to extend the scope of the Bill by order, and excluded inquests after a campaign led by the Daily Mail got widespread support in this House. As I have already said, we never even contemplated that our proposals should cover criminal cases.
We also conceded—this is the key point, which I think we are still debating with most of the critics—very early on, after publishing the Green Paper, that the decision whether to allow a closed material procedure or not should be a matter for the judge and never for the Minister. That is an important principle and it is what most of the arguments, even about the JCHR’s amendments, are all about. We have all, I hope, now agreed that it is a judge’s decision whether or not to hold closed procedures. The question is how far we need to keep amending the Bill to clarify this and how we avoid unnecessary consequences if we overdo it. I shall return to that.
That is what most of the debate was about in the House of Lords and it is the point of the JCHR’s report. When it came to a Division in the House of Lords on the principle of closed material procedures, the Government had an enormous majority. The Labour party did not oppose the principles of CMP, even though it was a Back-Bench Labour amendment which the other place voted down. I trust that the Front-Bench Labour team and the right hon. Member for Tooting continue to be of that opinion. Unless his undoubted radical left-wing instincts have got the better of him, I do not think that is the position of any party in this House.
The concern of the House of Lords and of the JCHR was that the judge should have a real and substantive discretion about whether a CMP is necessary in any case. Many Members of the upper House made their support for CMPs contingent on changes being made to increase judicial discretion and ensure that it was clear on the face of the Bill that CMPs would be used only for a very small category of exceptional cases.
I begin by making it clear on behalf of the Government that I agree that the judge should have discretion. I agree that we should be talking about a small number of cases where any other process is impossible and it is necessary for it to be handled in this way. A strong and compelling case was made by those who argued that we ought to trust our judges to decide the right way to try the issues in any particular case. I agree. The debate—I suspect it will be the same debate today as it was in the House of Lords—starts from the fact that the Government’s case is that the Bill as it stood already accepted that principle. As we were defeated, we will consider what more we can do by way of reassurance. People are deeply suspicious of anything in this area and they are convinced that, despite what we put in the Bill, the judge will somehow be inhibited by what the Government propose to do.
Our judges are among the finest in the world. They are staunch defenders of the rule of law, and they have shown time and again that they can be trusted not to endanger the national security of this country. I know that they can be—
Mr William Cash (Stone) (Con)
Will my right hon. and learned Friend give way?
Mr Cash
It is on the Law Lords themselves in the past and now the Supreme Court. Does my right hon. and learned Friend accept that there are divisions of opinion even at the highest level about the extent to which such decisions should ultimately be made by the most senior judges or Parliament, and that there are very senior judges who take the view that Parliament, not the judges, should decide these questions?
Mr Clarke
There are other occasions on which we shall no doubt debate parliamentary override of the courts of law. I realise that that is a matter dear to my hon. Friend’s heart. In the Duma it would be carried nem. con. The Russian Government would be utterly delighted to hear the principle of parliamentary override brought into our legal system in this country. I think the House of Commons should be hesitant. There may be senior judges who think that that should apply. The process that we are applying is different. The Government’s case is based on trusting the judges to use the discretion sensibly. That is what I think we should do, but of course I address seriously the views that were put forward.
I want to make it clear, to go back to what the right hon. and learned Member for North East Fife (Sir Menzies Campbell) asked me earlier, that the Government will not seek to overturn the most important amendment—the most important, in my opinion—made by the House of Lords that the court “may” rather than “must” order a closed material procedure upon an application. I do not see how we could give a wider discretion than that.
We will also accept that any party, not just the Government, should be able to ask for a closed material procedure. I think it highly unlikely that any plaintiff will be in any situation to start arguing that he wants to protect national security, but if people want that, they can have it. More importantly, the court of its own volition should be able to order a closed material procedure.
A further series of amendments were made which we still need to look at more closely. We have time to look at them closely and the others will be addressed by the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup in Committee. We are not against the principle, but we are not sure that the amendments add anything. I shall give the reasons in a moment.
Joan Walley (Stoke-on-Trent North) (Lab)
I am grateful for the opportunity to question the Minister. My main concern is where the discretion is being applied. Can the right hon. and learned Gentleman clarify for me the position of families of armed forces personnel who have been illegally killed, or people who have been injured and wish to take out court cases? How will the new arrangements apply to them, and how will it be possible to ensure transparency in the courts?
Mr Clarke
I answered that in the written question that the hon. Lady put to me. She is welcome to put an oral question to me at Cabinet Office questions, now that she has discovered who is handling the Bill. Most such Ministry of Defence cases do not give rise to national security considerations, and the Ministry of Defence does not expect to start invoking closed material proceedings. One cannot anticipate it, but it is possible that the circumstances of the tragic death of a soldier might involve some highly secret operation, and then the situation might arise. We have not had problems on this front so far and the expectation is that it need not arise. If it were to arise, there would still be the judgment of the judge and a decision in the case.
I am trying to think of examples that could conceivably arise. If a soldier was killed and it was alleged that that was the result of some actionable negligence, which apparently we are now going to allow people to argue in our courts, and that took place in some highly secret operation in some unlikely part of the world, I cannot rule out a CMP application being made. The Ministry of Defence is more robust than I am. I am told that it does not think that most of these cases involve national security at all.
Jeremy Corbyn (Islington North) (Lab)
In reply to my hon. Friend the Member for Stoke-on-Trent North (Joan Walley), the Minister outlined extreme circumstances of an injury to a British soldier. Would the same process apply if there was embarrassment over arms sales to a particular country, where those sold arms had been used to deny the human rights of many others, against the policies and wishes of this country, and there was a desire not to make that too public?
Mr Clarke
It sounds as though it could be criminal action in that case, which the provision would not apply to. It would be for the judge to decide whether what is being protected is embarrassment for the Government or national security and the interests of the nation. We can all start dreaming up—I did it myself a moment ago—fanciful cases where such a situation might arise. The judge would have to decide whether national security was at risk. It is a two-stage process, which I will not argue at length today, but what happens is that the judge can allow the closed material proceeding. At the end of the closed material proceeding he can revoke it, he can say that the proceedings should be gisted, he can say that the documents should all go in, but perhaps redacted in key places. There is wide discretion before he goes back to the open session. If a Government at some time want a closed hearing, they will get it only if they can satisfy the judge that national security is at risk.
Pete Wishart (Perth and North Perthshire) (SNP)
The right hon. and learned Gentleman will have seen the strongly worded letter from the Cabinet Secretary for Justice in the Scottish Government outlining his serious concerns about the Bill. The Scottish Government have made it clear that they want nothing to do with it as it applies to their jurisdiction. Will the Minister ensure that he respects their position?
Mr Clarke
Constitutionally, I will respect the Scottish Government’s position. If they think that Scots are not ready for decisions in these cases and wish everything to remain shrouded in secrecy and mystery, so be it. That is a matter for the Scottish Government. It seems to me that would be the result if they will not move with what I think is the obvious response to the needs of recent cases.
To return to the detailed amendments, let me explain where my reservations come from. The House of Lords decided to get carried away with the discretion. I have already accepted the widest discretion, but they then wanted to start setting out in the legislation factors that the judge ought to take into account. We are considering that, and I can assure Members that there will be a response in Committee. The Lords obviously do not trust judges as much as I do, because they wish to start setting out factors. However, if we set out factors in the legislation, they must be the right ones. If they are not, they can give rise to other problems.
For example, some of the amendments made in the House of Lords—I am leaving aside whether some of them are necessary—would require the judge to consider and exhaust alternatives to closed material proceedings in every case in order to prove that the case could not be tried in any other way. It sounds attractive, but in some cases it would be obvious to the judge from the start that a closed material procedure was necessary. As the independent reviewer of terrorism litigation, David Anderson, explained to the Joint Committee on Human Rights,
“there is no point in banging your head against a brick wall… if the exercise is plainly going to be futile.”
In the Guantanamo Bay cases, which provoked the need to address the law and bring forward this reform, the court would have had to consider about a quarter of a million documents before determining the PII application and moving to a CMP. It would have had to consider a quarter of a million documents before moving beyond a preliminary issue. When I was Home Secretary I certainly issued PII certificates for intelligence material. In the arms to Iraq inquiry, I am glad to say that the judge confirmed that I had done what I was supposed to do: I had read every document—they were brought to me in boxes and put on the floor and required a whole day to consider. The Guantanamo cases would have required a full-time Minister to do nothing but wade through the PII certificates for months and months before the application could be made and further progress could take place. In some cases, the delay of going through that process could have detrimental impacts on other people affected by the issues in the case awaiting judgment.
Equally, all parties might consent to a closed material procedure. If they consent, should the judge still be required to go through the time-consuming PII process? In the Maya Evans case, all parties consented to a closed material procedure as the only way to try the issues. The ruling in that judicial review case, which was with special advocates, changed Government policy on detentions in Afghanistan, directly affecting ongoing Government actions. Delays in that case to consider alternatives to closed material procedures could have meant that more individuals were exposed abroad to a policy that the court ultimately concluded was unlawful.
I will give an indication of why I will not give a blanket assurance that we will accept all the House of Lords amendments. I do not think that the problems were properly considered, and we will bring forward the products of our thinking in Committee. As I have said, we continue to debate the powers the judge should have once a closed material procedure has been granted. Under the Bill, the court will have strong powers to require gisting, redaction and summaries. In particular, the Bill sets out—it is probably unnecessary—that to ensure a fair trial under article 6 of the European convention on human rights, the court can order disclosure of material notwithstanding the damage that would be caused to national security. In that situation, in order to disclose, the Government would have the opportunity, as they currently do under PII, to seek to bring an end to proceedings, or an aspect of proceedings, in order to avoid damage to national security. If the Government do not disclose material or elect not to provide a summary of material, the court can order the Government not to rely on it or to make concession or such other steps as the court might require.
In brief, the Bill leaves it to the judge to decide what is necessary in any particular case, rather than seeking to impose disclosure requirements or to fetter the judge’s discretion in deciding whether to have a closed material procedure. I think that we should reflect on that in Committee. Let us not go into Committee with everyone saying, “What the Joint Committee on Human Rights has said is necessarily right and we will support the Bill so long as we sign up to that.” I think that some of the JCHR amendments raise serious issues that should be debated properly in this House and which the Government must be allowed to exercise their judgment on before reaching a final decision.
Guy Opperman (Hexham) (Con)
I conducted in excess of a dozen PII trials as a criminal barrister. Does the Minister accept that there is a fundamental difference between what he is proposing and the procedures under PII?
Mr Clarke
Yes, because we want a process whereby the judge can hear the evidence of the intelligence agencies in a closed—secret, if one likes—process, and that is not the purpose of PII. PII is a very old process that has developed over the years from simple beginnings, and I imagine that in the early cases—before my time—it was probably rather straightforward: if a Minister said he wanted public interest immunity, it was granted. The findings of Lord Justice Scott in the arms to Iraq inquiry —not at my expense, I am glad to say—rather upset that approach. PII is of course used flexibly in proper cases because judges and lawyers all want to hear evidence in open court whenever possible, but I think that we need to update all this. We are not abolishing public interest immunity, but I think that in many cases extending closed material procedures, which is what we are proposing, would be an altogether more sensible way of getting a proper judgment in the case.
Let me turn to the provisions of the Norwich Pharmacal jurisdiction.
Hazel Blears
I want to tease out the right hon. and learned Gentleman’s view on the balancing test, which is part of the House of Lords amendments. At the moment there is a test stating that the judge, when deciding whether closed material procedures can be applied for, has to balance the degree of harm to the interests of national security with the public interest in the fair and open administration of justice. Balancing tests are notoriously difficult. One of the main problems with the Chahal case, which led to significant issues for this country’s national security, was whether the balancing test was in the right place, and most of us felt that it was not. If we are to have a balancing test in the legislation, it is in the part about whether proceedings are suitable; it is not in the part about when an application can be made. We need some clarity on the Government’s position with regard to the balancing test, because clearly the interests of national security are not always equivalent to the interests of an open proceeding, and that is a difficult balance to strike.
Mr Clarke
The balance is indeed difficult to draw. We have debated the balancing test on various occasions and in the past I have rather resisted it because it gives rise to the possibility of the judge saying, “Oh yes, there is a risk to national security. What a pity, never mind. I wish open justice to be done, so let’s take a chance with national security.” That is probably a somewhat broad-brush piece of opposition, and we are reflecting on the issue. The proper response to the right hon. Lady’s entirely sensible and pertinent question is probably best given in Committee, when we will have had more time to decide the position.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
indicated assent.
Mr Clarke
My hon. Friend is nodding; he will be presenting our reactions.
“Norwich Pharmacal” is the phrase used by lawyers to describe a process that grew up in the sphere of intellectual property law, in which someone is enabled to apply for the disclosure of evidence—documents, usually—relevant to a claim that they are making. It is used to force a third party who is mixed up, however innocently, in suspected wrongdoing, to disclose information that a claimant feels may be relevant to a case that they are bringing in some other jurisdiction, usually abroad.
In 2008, as a result of ingenious arguments, the Norwich Pharmacal principle was extended to national security law. The purpose of proceedings under the principle now is for people involved in a legal process of some kind, usually overseas, seeking to obtain disclosure of intelligence material in the hands of the British Government.
As the purpose of the proceedings is only disclosure—no other judgment is being sought—the Government do not have the option to withdraw from or settle proceedings; if the judge orders disclosure, there is no option but for the Government to release the secret intelligence. That has given rise to understandable fears that if a person shares information with the British Government’s agencies, British judges have the power to order the release of some of it and that person cannot be certain of being able to resist that.
There is no point in my setting out obvious platitudes about the nature of intelligence work. If intelligence agencies are not able to guarantee to their sources, be they friendly overseas Governments or agents, that they can keep secrets, people will not share so much information with them. Lives will literally be at risk in some cases as will international co-operation on such vital issues as torture prevention and human rights.
Mark Field
I thank my right hon. and learned Friend for giving way. I entirely agree; he has admirably put forward the concerns about Norwich Pharmacal and the historical accident that has arisen as far as national security cases are concerned. Was he not tempted, therefore, simply to exclude Norwich Pharmacal matters from national security—in other words, make it absolutely clear through Parliament that the Norwich Pharmacal arrangements should be regarded narrowly as being available only in intellectual property cases and should not apply to national security matters? Is he not taking us down a rather more convoluted route in the Bill?
Mr Clarke
The practical effect of the Bill is exactly as my hon. Friend recommends, although it may have been drafted with a few too many provisos and provisions because of the deep suspicion with which these things are regarded. Essentially, however, we do not think that Norwich Pharmacal should apply to intelligence material provided in confidence to the British security services.
I will not take too long on this because the argument is perfectly straightforward, but I want to tell the House that these are not false fears. Over the past year, we have picked up concerns from human agents. They have always been concerned about the degree to which their relationships can be protected, of course, but they are now becoming really concerned about disclosure to the British courts. Sir Daniel Bethlehem, a former legal adviser to the Foreign Office, told the Joint Committee on Human Rights that the flow of intelligence from the United States was being limited. He said that he did not want to exaggerate, but the point was that the trust of the United States had been weakened and that trust needed to be restored.[Official Report, 8 January 2013, Vol. 556, c. 3MC.]
Arguments tend to break out as to whether agents have any reason to be fearful, but that is not totally the point. As long as, as a result of hearing about the extraordinary process called Norwich Pharmacal, other intelligence agencies and our agents think that there is always a risk of disclosure by the British courts, the damage is done. To follow the point made by my hon. Friend the Member for Cities of London and Westminster (Mark Field), what on earth are we running that risk for?
Sir Malcolm Rifkind (Kensington) (Con)
In support of what my right hon. and learned Friend has just said, I should say that the Intelligence and Security Committee has taken extensive evidence on the matter in both the United Kingdom and Washington in respect of the likelihood or actuality of damage to very important information that prevents or might prevent terrorist incidents in the United Kingdom. We are satisfied that my right hon. and learned Friend’s point is entirely valid and that the House should take it into account.
Mr Clarke
I close my case, as they say; there is no need for me to carry on addressing the House about Norwich Pharmacal. We wait to hear what points might be raised about it.
I move on to part 1 of the Bill, to which I think the House should have much more regard. It deals with the important issue of parliamentary oversight of our security and intelligence agencies. I suggest to both sides of the House that if we wish to be reassured about the accountability of our security services and really try to guarantee to ourselves that they are not misbehaving, we should look to stronger parliamentary oversight as well as to more accountability to the courts.
It is time to put the Intelligence and Security Committee, chaired by my right hon. and learned Friend, on a much stronger footing and to enhance its independence to strengthen the valuable work it has done so far. We have to give Parliament more effective oversight of the intelligence and security agencies.
The ISC operates within arrangements established by Parliament in 1994, but the nature of the Committee’s work has changed dramatically. In the past 18 years, particularly since 9/11, the public profile, budgets and operational demands on the agencies have all significantly increased, but there has been no change in the statutory arrangements for oversight. In the past, the ISC has overseen operational matters but has done so relatively infrequently and generally at the direct invitation of the Prime Minister. The ISC has no statutory powers to oversee such matters. Its statutory remit is also limited to oversight of the security and intelligence agencies, although it has long heard evidence from the wider intelligence community.
At the moment, the Prime Minister receives its report and appoints its members. Currently, the heads of the security and intelligence agencies are permitted, in certain circumstances, to withhold information from it. We can certainly improve on that. We need to give the ISC greater teeth to ensure that we can continue to have confidence in those who oversee the agencies on our behalf.
The Bill provides that the ISC will in future be able to oversee the agencies’ operations, within appropriate constraints. The Committee will also in future report to Parliament, as well as the Prime Minister. Its members will be appointed by Parliament, after nomination by the Prime Minister. The power to withhold information from the ISC will move from the agency heads to the Secretary of State responsible for that agency—a Minister accountable to the House. It will be a parliamentary Committee. We are greatly strengthening our powers to hold accountable those who do such vital work for our country.
Mr Tyrie
My right hon. and learned Friend said that the Intelligence and Security Committee will henceforth be accountable to Parliament. Will he be prepared to consider the proposals of the Wright Committee on parliamentary renewal—that the Chairman of the ISC should henceforth be elected by a secret ballot of the whole House, subject to a veto by the Prime Minister at the nomination stage? That was accepted unanimously by the Wright Committee and it has won widespread support. It would greatly enhance the credibility and sense of independence of the ISC Chairman.
Mr Clarke
I have the greatest respect for the Wright Committee and we will consider the matter further, although I am not instantly attracted by that proposal. We are moving to a situation in which the Chairman of the ISC will be elected by the Committee and the Committee itself will be elected by the whole House from a list approved first by the Prime Minister. On reflection, I think that the problem with a system whereby the House could elect whoever it liked, subject to a prime ministerial veto, is that it would be an Exocet that was hugely embarrassing to use. It is not impossible—I hope that it is not too fanciful—to envisage a case where the security services have satisfied the Prime Minister that there is some problem with a particular Member of this House of which the wider world is completely unaware. [Interruption.] That is not unknown; I am sure that it has happened in the experience of the right hon. Member for Blackburn (Mr Straw). The idea that the Prime Minister must suddenly issue a veto on the result of an election carried out in this House is probably a step too far, and I think that my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), the Chairman of the ISC, agreed with me when we discussed this very matter not too long ago.
Mr Clarke
My right hon. and learned Friend nods his head in approval.
The arrangements that we are proposing for a stronger Committee will in some cases be underpinned by a memorandum of understanding between the Government and the Committee. The MOU will set out the arrangements at a level of detail far beyond that which need be put in this Bill. We have reached the stage of discussing the terms of that MOU with the Committee. I have had some extremely constructive discussions with my right hon. and learned Friend and other members of the Committee about the Bill. We will bring forward other amendments if necessary to make clear the ISC’s increased connection to Parliament and provide it with some statutory immunities to assist in this work.
I apologise for the length of time that I have taken in introducing the Bill, but I have given way generously. It is the kind of Bill where there should not be serious argument about the principle, but the details are extremely important in a country which has high regard to the rule of law and does not to want to risk abuse of process in any proper case. That is why I commend its Second Reading to the House. To reject it and stay with the status quo would be to continue a quite intolerable situation that is not only unacceptable to the agencies, which cannot defend their reputations, but should be unacceptable to the taxpayer, who has to pay for some of these settlements, and to any citizen who wants a judge to have the chance to make a judgment on the issues.
In my opinion, for all the reasons I have given, the Bill strengthens the accountability of our intelligence agencies and GCHQ to the courts and to this House. It supports our belief in justice, the rule of law and the liberal, democratic principles that underpin this country. I trust that the House will therefore be content to give it a Second Reading.
Sadiq Khan (Tooting) (Lab)
The Minister without Portfolio has spoken for exactly one hour. Everyone will be pleased to know that my contribution will be far shorter.
Before us is a Bill that is less bad than when the Government first published it. It is less bad because of the changes made to it by colleagues in the other place, which have started to restore some equilibrium in the great balancing act that we face between our nation’s security and the rights of individuals up and down the country. I want to make it clear, up front and in very simple terms, that Labour Members fully recognise the very important issues that the Government are seeking to grapple with in this Bill. The Minister called for a serious debate, and I hope that we get one this afternoon and in Committee.
Our intelligence agencies do untold amounts of good work in keeping the citizens of this country safe. I should like again to put on record our appreciation of this role. Our intelligence agencies are fighting to defend our democratic values, so it is only right that those same agencies should be subjected to those same democratic values, which include judicial and parliamentary scrutiny. That is why part 1 is so important. It outlines attempts progressively to reform the work of the Intelligence and Security Committee, giving it a formal statutory footing with improvements in how the membership and Chair are chosen. I agree with what the Minister said about this, and my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) will say more on that at the conclusion of the debate.
The issue in part 2 is one of allowing justice to take its course, with those on the end of alleged true abuses of power and indiscretions allowed to seek full and proper recourse, and with the Government also in a position whereby they can defend themselves. I intend to focus my remarks on this part, especially given the changes made by colleagues in the other place. The Minister informed the House that he will accept some of them, albeit not yet all of them.
The marriage of justice and security in the Bill’s title hints at the difficult but not impossible balancing act that is required. It is simply wrong to argue that the achievement of one is to the detriment of the other. Those who take this view are failing to show sufficient respect for the nature of the issues. Openness and transparency of justice is a hugely important principle. Any deviation from this hundreds-of-years-long tradition should be considered only in the most extreme of circumstances and must be accompanied by transparent checks and balances. The Bill, as first published by the Government, failed in that respect.
At this point, I must turn my attention to the role of the Minister without Portfolio, who kept hold of the responsibility for this Bill after the reshuffle. The House will know that I have a huge amount of respect for him, and—dare I say it?—affection as well. He is a national treasure. It is worth considering the suspicion that many felt as to why the Prime Minister decided that he should retain control of the Bill. It is hard not to conclude that it was for his “liberal credentials”. The suspicion was that the Prime Minister thought that the right hon. and learned Gentleman would make a better sell of the proposals on secret courts than his successor as Lord Chancellor, the right hon. Member for Epsom and Ewell (Chris Grayling), who does not have quite the same “liberal credentials.”
That may well be the case. In any event, I am afraid that the Minister has made a hash of the Bill up until now. He has rushed headlong into legislation, despite guarantees to the contrary. He has failed to listen to the concerns of a very wide range of groups and experts. He has criticised those who have genuine concerns, as he did again today, building up straw men only to knock them down. I am afraid that on some occasions he has given the impression that he has failed to understand the details of his own Bill. I do not know about pushing at an open door, but he has now been on the receiving end of three humiliating defeats in the House of Lords and forced to concede further changes or face the prospect of even more defeats.
Part 2 includes clauses 6 to 13 on the introduction of closed material proceedings, or CMPs, into our civil justice system. CMPs will allow the Government to hold in secret parts of court hearings in which an individual is seeking recourse through our civil courts. These are civil actions for damages for claims ranging from allegations of rendition to allegations of complicity in torture and the most serious forms of tort there are.
Sadiq Khan
Just this once. I want to make progress because many other Members want to get in.
Jeremy Corbyn
My right hon. Friend will be well aware that in cases of allegations of torture and extraordinary rendition it has been the devil’s own job to get any information, transparency or accountability, and this has gone on for a very long time. Does he not think that this Bill misses an opportunity to lift the cover on the whole miserable period since 2001 when we have had extraordinary rendition and Guantanamo Bay?
Sadiq Khan
I will come to some of the huge improvements made in the other place.
The Government claim that they are unable to defend themselves in court because the nature of the evidence they would need to deploy is so bound up with sensitive intelligence as to make it impossible for it to be made public. As a result, they are having to settle cases and pay out-of-court compensation. By allowing CMPs in situations involving national security, the Government are seeking to avoid situations where cases are not seen through to their conclusion and avoid the premature payment of compensation.
Let us go right back to the very beginning of this legislative process. The original proposals that were published in the Green Paper involved huge issues. The Minister said at the time that after the consultation on the Green Paper, he expected a White Paper, followed by a Bill. We had serious problems with the Green Paper, but we were encouraged by the sensible pace at which he proposed to progress.
As I have said, the original Green Paper was roundly criticised by others for being too broadly drafted in its coverage of CMPs. After the consultation, the Government decided to jettison secret inquests, making a virtue, as has happened again today, of this concession. I pay tribute to the Royal British Legion and the non-governmental organisation, Inquest, for successfully fighting that barmy idea. Many suspect, however, that the inclusion of inquests in the first place was a wheeze—an idea that would be later binned and presented as a major concession. It is the oldest trick in the book.
The process then changed: there was no White Paper. Instead, we jumped straight from the Green Paper to a Bill, which, while including inquests, did not take on board the wide range of concerns that had been raised about the proposals. In many people’s eyes, the Bill’s process for deciding when there should be a CMP was worse than the process set out in the Green Paper. Even more power was concentrated in the hands of Ministers to decide what would stay secret, while judges had fewer powers to take a balanced view on whether it was in the national interest to keep something secret or whether it was in the public interest to disclose it.
It is on this point that the right hon. and learned Gentleman disagrees with many independent experts, including judges, about how the process will work. He insisted that the CMP process was a judge-led, balancing exercise and that it was not a Minister-led process. He repeated that several times, criticising those who dared to question his assertions, and he has done so again today. I and many others have picked him up on this, because the Bill as drafted was clear: it was not a judge-led process. In the old clause 6, there was no balancing exercise. It was a grab for power by Ministers. They would have decided what stayed secret and what did not. Judges were left with no option but to grant a CMP. The word used was “must”, not “may”. It was simply unacceptable. The power that that would have handed to the Executive to keep material secret was unacceptable and I am pleased that the right hon. and learned Gentleman has accepted the change made in the other place.
Mr Kenneth Clarke
Extraordinary assertions keep being made outside this House that the Bill allows Ministers to decide whether there should be closed material proceedings, but that is complete nonsense. The “must” to “may” amendment arises in circumstances where the judge who takes the decision decides that national security would be at issue. The original Bill said that once he finds that there is a risk to national security, he “must” have a closed material procedure. Such is the concern of all these critics that we have made it clear that we will accept a wider discretion, so even when the judge—not the Minister—is satisfied that national security is at risk, he “may” have a closed material procedure. I submit that people should think about the possibility that that leaves the judge with all the discretion in the world to think about all the other issues that might mean there is some compelling reason in a particular case not to allow a CMP, even when national security is threatened. I simply do not understand why the right hon. Gentleman—he is not the first; I am not singling him out—and others keep asserting that Ministers will decide on that when the Government gave up that position months ago.
Sadiq Khan
I know that the right hon. and learned Gentleman has not practised law for a while, but he is wrong. The old Bill clearly said that if a Minister decides that there is a threat to national security, the judge must order a CMP. The improvements made by the House of Lords changed that and I am glad that he has accepted them.
The right hon. and learned Gentleman has lashed out—he did it again today—at what he called the “reactionary” elements of the civil liberties community. He is sniggering, but he will recall that he was once a part of that community. Does he really believe that David Anderson QC, the Government’s independent reviewer of terrorism legislation, fits that description? I remind him of what Mr Anderson said about the Bill’s original proposal that Ministers would trigger a closed hearing:
“That proposal seems to me profoundly wrong in principle. The decision whether to order a CMP is properly for the court in the exercise of its case management functions.”
He also said that a CMP should be used only if
“the just resolution of a case cannot be obtained by other procedural means (including not only PII but other established means such as confidentiality rings and hearings in camera).”
It seems that it was not just me who got it wrong; according to the Minister without Portfolio, his own independent reviewer of terrorism legislation also got it wrong.
Advocates also appear to have got it wrong by not understanding the Bill as previously drafted. Many esteemed legal Members of the other place, such as Lord Pannick, Lord Macdonald and Lord Phillips, also got it wrong if the Minister without Portfolio is correct.
On 19 November, the day the other place considered the Bill on Report, an editorial in The Times—hardly a member of the “reactionary” civil liberties community—said:
“The Justice and Security Bill being considered in the House of Lords today cannot be allowed to stand in its current form”.
The Daily Mail, which is not historically known to be a “reactionary” element of the civil liberties community, either, has also consistently opposed the right hon. and learned Gentleman’s original proposals.
I accept that some have argued strenuously against the whole principle of CMPs in our civil courts. Others have focused their energies on ensuring that the Bill has proper checks and balances in place.
Sadiq Khan
I will give way to the Minister without Portfolio. Clearly, one hour was not enough for him.
Mr Clarke
We are merely warming up. To refresh the right hon. Gentleman’s memory, I have a copy of the original Bill. I think he is talking about a debate that was last sensibly carried out when the Green Paper, in which we said that it would be for a Minister to decide on this matter, was considered. Clause 6(2) of the old Bill says:
“The court must, on an application under subsection (1), make such a declaration if the court considers that…(b) such a disclosure would be damaging to the interests of national security.”
We published the Bill on the basis that it was a judge’s decision. We are making the judge’s discretion wider. He does not have to have a CMP. Even if he is satisfied that national security is at risk, he “may” make a declaration, which is what has been proposed to us by the House of Lords.
Sadiq Khan
The right hon. and learned Gentleman can use the present or past tense, but the reality is that, previously, the judge would have had to order a CMP if the Minister said that there were national security issues. There was no balancing exercise. The changes made in the other place mean that the process is now judge-led and I am glad that the Minister without Portfolio welcomes them. I am glad that legal experts agree with me. We will have a chance to come back to the issue later.
The defeats inflicted on the Government in the other place were truly stunning—the Minister without Portfolio used the phrase, “Pushing at an open door”—with majorities of 100, 105 and 87. Those defeats mean that, as the Bill stands, there will be an equality of arms between the two parties in a civil action and a full judicial balancing of the competing public interest. Moreover, if CMPs are to be granted, it must be as a last resort—I know that the right hon. and learned Gentleman does not like that change made in the other place—and, importantly, there will now be judicial balancing within the CMP.
I have no doubt that there would have been more defeats had the Minister in the other place, Lord Wallace, not seen sense and conceded on other amendments. The scale of those Government defeats is testament to the enormous levels of unhappiness of distinguished legal experts and serious people with the Bill as originally published.
I pay tribute to the Joint Committee on Human Rights, particularly its Chair, my hon. Friend the Member for Aberavon (Dr Francis), for the work it has done. Its amendments—the Opposition supported the majority of them—were the basis of the victories in the House of Lords. We will seek to make other changes to the Bill in Committee, in order to ensure greater fairness. We will oppose any attempts to water down the improvements that have already been made.
I want to touch briefly on clauses 14 and 15, which address the so-called Norwich Pharmacal cases. They prevent the disclosure of “sensitive information” that the Secretary of State certifies it would be contrary to the interests of national security or international relations to disclose. In those cases, a party seeks an order for the disclosure of evidence in order to pursue or defend a case against a third party, possibly outside the jurisdiction, as in the cases that have attracted attention in which the defendant—that is, the Government—is to some degree mixed up in events, perhaps by quite innocently coming into possession of some information.
Disclosure via Norwich Pharmacal is, we are told, already seriously undermining confidence among our most important partners, including the United States of America. That is an important matter for our intelligence agencies, which I have already paid tribute to, because they probably work more closely with their colleagues in the USA than those in any other country. We understand the importance of the control principle.
Although there may be an issue that needs to be addressed and a case for regularising the situation created by the Norwich Pharmacal cases, we question whether the Government’s approach is too broad. We will test that in Committee. The independent reviewer of terrorism legislation, David Anderson QC, agrees with our position and has publicly accepted that there is
“a case for restricting the novel application of the Norwich Pharmacal jurisdiction to national security information.”
He concluded, however, that what is now clause 14 was too broad in its application.
We do not intend to oppose the Bill on Second Reading. However, I hope that I have made it clear that we wish not only to hold on to the improvements that were made to the Bill in the other place, but to use the Committee stage to seek further improvements. How we vote on Report and Third Reading will be determined by the Government’s actions in Committee between now and then.
Mr Deputy Speaker (Mr Nigel Evans)
Order. There is a 10-minute limit on contributions from now on, with the usual injury time for up to two interventions.
Sir Malcolm Rifkind (Kensington) (Con)
As Chairman of the Intelligence and Security Committee, I will concentrate my comments on the proposed reforms of the ISC in part 1 of the Bill.
It is easy for me and the Committee to welcome part 1, because 95% of it is exactly what we recommended to the Government many months ago. We pay tribute to them for being willing to accept such a radical change in the powers relating to independent oversight in the United Kingdom. The system has been imperfect since 1994, as has been commented on in the past. I can say with confidence that if the proposals in part 1 are implemented, the United Kingdom will have a system of independent intelligence oversight with the powers that are necessary to make it effective. It will be one of the most powerful systems of independent oversight in the western world.
It is worth remembering for a moment why independent oversight is crucial in an open society. Our intelligence agencies have and need to have powers which, if used by other citizens, would be a breach of the criminal law. Given that situation, the agencies are the first to acknowledge that it is essential in a parliamentary democracy for there to be not only Government accountability, but accountability to Parliament and the public. The agencies use some £2 billion of resources. That is a lot of money and it has to be justified, particularly in difficult times.
From time to time, it will be necessary, as it has been in the past, to criticise the agencies when something foolish, unwise or unacceptable takes place. However, the agencies also appreciate that the power of genuine, independent oversight means that they can be defended if, as happens occasionally, they are unfairly criticised or attacked and cannot defend themselves. For obvious reasons, if the Government try to defend them, there is seen to be a potential conflict of interests. That does not apply in the case of genuine, independent oversight. For example, in the 7/7 bombings inquiry, the Intelligence and Security Committee was able to point to some of the unfair accusations that were being made.
What are the reforms that are crucial in transforming the role of independent oversight in the United Kingdom? First, until now—including as I speak—the Intelligence and Security Committee has been a committee of parliamentarians, but not a Committee of Parliament. That is going to change. For the first time, the last word on whether the proposed members of the Committee are acceptable will be with the House of Commons and the House of Lords. As has been said, the Chairman of the Committee will in future be appointed not by the Prime Minister, as I was, but by the Committee itself.
The Committee will report to Parliament. At the moment, it reports to the Prime Minister and only through the Prime Minister do its reports reach this place. Some redactions will, of course, be necessary. There will be occasions, as there have been in the past, when the ISC reports on such sensitive matters that it will, in practice, report only to the Prime Minister because the material overwhelmingly cannot come into the public domain. Nevertheless, for the first time, we will have a parliamentary Committee that is parliamentary in the sense of other Committees, except where the need for the respect of secret information continues to require some differences of treatment.
The second major change is in relation to operations. I will differ slightly from my right hon. and learned Friend the Minister without Portfolio in saying that the extent to which the Intelligence and Security Committee has already been involved, through agreement with the agencies, in looking at operations and sensitive material is not exceptional or occasional, but substantial. Nevertheless, there has been no statutory basis to it. That is crucial, because operations are what the agencies are about to a considerable degree and are where parliamentary and public concern can be most manifest. It is profoundly unsatisfactory that, until now, there has been no meaningful statutory role for the Committee in relation to operations.
Sir Alan Beith
I point out to my right hon. and learned Friend that that situation means that refusal is possible and is too easy in circumstances where embarrassment is involved. I can think of at least one case in which I feel that that happened during my time on the Committee.
Sir Malcolm Rifkind
I agree with my right hon. Friend. There has to be an ultimate right for the Prime Minister to decline to allow the Committee to receive certain information. However, until now, the agencies have been able to exercise that power. To be fair to them, they have rarely, if ever, tried to do so.
On operations, the statutory basis is crucial. The Committee has accepted that our oversight of operations should be retrospective. We do not wish to interfere in ongoing operations. That would be unreasonable and would put an intolerable burden on the agencies. As long as the oversight is retrospective and there is a significant national interest—we will have debates over what that phrase means—I believe that there is a sound basis.
Thirdly, until now, the Intelligence and Security Committee has been able only to request information from the agencies, not require it. To be fair to the agencies, they have not, for all practical purposes, ever refused us information, but they have been in control of the information that has been provided. Real problems have emerged over the years. On some occasions, it has been found, subsequent to the publication of a report, that important documents had simply not been made available to the Committee. That may not have been done in bad faith, but the consequence was embarrassment for the agencies and for the system of independent oversight. That cannot be allowed to continue.
We have also found that when the agencies have responded to a requirement of the courts, the resources and the time that they have devoted to finding every relevant document have been slightly greater than for a Committee that can only request information and not require it. That is going to change. I pay tribute to the agencies for accepting the need to make this change. The Committee will now have the power to require information from the agencies, including information on operations, subject to one or two important safeguards.
I come now to the crucial difference. Until now, the problem has been that although the agencies hold vast amounts of information on any given subject, we do not expect them, when we request information, to fill several forklift trucks with information and dump it at our offices. That would be absurd, and we will not expect that when we require information in the future. However, until now, the agencies have done the editing themselves. Even if it is done entirely in good faith, that does not enable the Committee to be confident that it has seen all the information that it would wish to see before it brings forward its proposals.
We have proposed that we will appoint additional staff—assistants to the Committee, who will be our employees and be answerable to us—who will go to the agencies when we require information on a particular subject from them and discuss all the information, including the raw material, that they have in their files. I pay tribute again to the Government and the agencies for agreeing to that. I hope that there will be a process of agreement and discussion, but at the end of the day, it will be our staff who decide which parts of the available material the Committee is likely to want to see. We, Parliament and the public will therefore be able to have confidence that the decision will be taken by the Committee itself, not by the agencies, however much they would be trying to do their best in good faith.
That is an enormous culture change for MI6, MI5 and GCHQ to accept. For the first time in their history they will be not just providing information to people who are not employees of the agencies or part of the Government—we are not part of the Government, and in future we will be part of Parliament—but allowing them to come into their offices, see material and discuss what the ISC would like to evaluate. I pay tribute to the agencies for accepting that. Of course they have some reservations and concerns, and a memorandum of understanding is being discussed. It is referred to in the Bill and will be published in due course. It will explain in greater detail how the system will work on a day-to-day basis. We may have to review it in a year or two in the light of experience.
I pay tribute also to both Her Majesty’s Government and Her Majesty’s Opposition, because such a change is not just a potential rod for the back of the agencies but will occasionally create problems for the Government of the day. Both Front-Bench teams know that the Bill will mean that intelligence oversight will have the teeth that it has not had in the past, because it will be on a statutory basis and include the real powers that I have described. That is why I and the Committee feel confident in saying that we will have a tougher, more effective and more reliable system of oversight than we have ever had in our history or than can currently be found in almost any country in the western world or globally.
Hazel Blears
I pay tribute to the right hon. and learned Gentleman for his leadership of the Intelligence and Security Committee. I do not think we would have quite such robust proposals had it not been for his work.
May I remind the right hon. and learned Gentleman of one small point? As the Bill is drafted, it would prevent the Committee from examining ongoing operations. If the Government were to ask us to consider a matter that was ongoing and not retrospective, that would be forbidden. The Bill therefore needs to be amended on that point.
Sir Malcolm Rifkind
I must first reciprocate the right hon. Lady’s compliment. She has made an enormous and much-respected contribution to the Committee’s work.
The right hon. Lady raises an important point. Of course we accept that our oversight of operations must be retrospective and on matters of significant national interest. However, there have been circumstances in which the Prime Minister of the day has invited the Committee to examine an ongoing operation on some specific matter. In addition, there are sometimes occasions when, because of leaks and press awareness, an ongoing operation becomes a matter of public discussion and debate. There must be flexibility in the Bill to allow the Committee to examine such matters. The House should feel confident that, although we wish a number of improvements to be made in Committee, we are entering a new phase of intelligence oversight.
I want to say a few words about part 2 of the Bill. A number of my right hon. and hon. Friends who serve on the Committee will undoubtedly wish to speak about it as well. It goes without saying that closed material proceedings are not very satisfactory, but in the imperfect world in which we live, the choice is sometimes between good solutions and bad solutions but more often between bad solutions and worse solutions. As has been said, public interest immunity is not a feasible alternative. The £2 million settlement that was made just a couple of weeks ago was a case to which intelligence material would have been central if it had gone to court. There could not have been PII, because that would have excluded all the material. That leaves us to introduce a system that, as the former Lord Chief Justice Lord Woolf has said, is certainly preferable to PII. I say to hon. Members who still have their doubts that the system is not perfect, but it is a lot better than the one we have at the moment. That is why it is in the national interest to support the Bill.
Paul Goggins (Wythenshawe and Sale East) (Lab)
It is a pleasure to follow the chairman of the Intelligence and Security Committee, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), and I echo the comments of my right hon. Friend the Member for Salford and Eccles (Hazel Blears) about his leadership on matters concerning the Bill and our general work. It has been a genuine pleasure to work with him over the past two years.
The debates that we have had on national security over the past decade have been among the most important exchanges in the House over that period. They have taken us to the heart of the balance between individual liberty, including the rights of those who are suspected of plotting terror, and our collective security, including the most fundamental human right of all, the right to life.
As we have responded to the new threats of global terror from al-Qaeda, it would have been a miracle if Governments had been able to get everything absolutely right first time. As I have said before in the House, I accept that the proposals for 90-day and 42-day pre-charge detention went too far, as an issue of practicality as well as one of principle, and Parliament was right to block them. Equally, the judges were right to deem detention without trial non-compliant with the rights of defendants. That, too, had to be replaced.
It remains to be seen whether the reforms of the past two years have gone too far in taking the balance away from public safety. I certainly do not accept the narrative that everything that has happened since 9/11—all the extra resources provided to the intelligence and security agencies and the stronger powers that Parliament has decided on to deal with suspects—are a victory for the securocrats, who hoodwink Ministers into illiberal measures to undermine our basic freedoms. The simple fact is that many thousands of lives have been saved because of the actions that Governments and Parliament have taken. At the same time, suspects have still been able to enforce their rights in the courts, and judges have increasingly ordered the disclosure of information that would have been held secret in the past.
The Bill deals specifically with the balance between greater scrutiny and the limits that ought to apply in a certain small number of civil cases. The Intelligence and Security Committee has played an important role in scrutinising the agencies, as its chairman said. That role far exceeds what was envisaged in 1994 and includes the close examination of some ongoing operations. However, the ISC will be in a stronger position when it is a Committee of Parliament and has greater powers and resources to ensure that it can get the information that it requires rather than simply trusting that the agencies are giving it what it has requested.
I place on record the tremendous debt that all members of the ISC, and therefore all Members of Parliament, owe the small, dedicated team of staff who work to support it in all its work. The chairman of the ISC alluded to a number of issues that still need to be ironed out. I suggest that the starting point for our deliberations in Committee should be that the Bill must not prevent the ISC from doing anything that it is already doing in practice.
As we have heard in the opening Front-Bench speeches, the most controversial part of the Bill relates to the closed material procedure. I do not intend to dwell on the background to it, because others have spoken about the importance of the control principle and the difficulties that the agencies currently face in defending themselves against civil claims. However, I want to make two points. The first is to confirm that the increasing reluctance of the United States intelligence community to share life-saving secrets with the United Kingdom is not a made-up scare story. I have seen and heard, in frank exchanges with colleagues in Washington when the Committee visited last year and earlier this year, that that is a substantial problem that simply has to be dealt with.
Secondly, the agencies’ desire to defend themselves is not about suppressing the truth, and it is not primarily about saving the taxpayer the millions of pounds that it is currently costing, although those are substantial sums. It is about being able to defend their reputation and the high standards of those who take risks every day to protect our freedoms. Clearly mistakes have been made and individuals have been mistreated, but I simply cannot accept the casual assertion that is often made, or at least implied, that the agencies are inevitably the bad guys while the claimants are always the blameless victims.
The comments of Lord Phillips and others during the consideration of the Bill in the other place, and the support that those independent-minded politicians gave for the closed material procedure, were very welcome. It is fair to say that the Bill has been improved in the other place. It is right that judges have discretion and decide whether the closed material procedure is appropriate. It is right that the courts must decide whether, on balance, the interests of national security are likely to outweigh the interests of fairness and open justice. The question of how that balance is to be struck, as the Minister without Portfolio said, is likely to be debated in detail in Committee. I was pleased to hear that he and the Under-Secretary of State for the Home Department, the hon. Member for Old Bexley and Sidcup (James Brokenshire) intend to promote discussion in relation to PII. Under the Bill, consideration of PII should always come first, before the closed material procedure. As the Minister without Portfolio said, that could produce long delays in the judicial process, even though the outcome could be staring the court in the face from the outset.
In the short time remaining, there are two more issues that I should like to raise. If I am feeling brave enough, I might even table some amendments about them in due course. In relation to the order-making power, which was in clause 11 but has now been dropped for reasons of political consideration—presumably to make sure that the Bill completes its passage and that the main provisions remain—the cause of the concerns that prompted that power, which would allow the closed material procedure in other proceedings, has not gone away.
There are two particular types of proceedings that are relevant. The first is inquests, as I have said to the Minister before. If there is secret intelligence that cannot be revealed because it would result in the disclosure of sources, methodologies and so on, but which explained the cause of death, the coroner at the inquest should be able to see it. It might be possible in most cases not to have a closed material procedure. Lady Justice Hallett did a fine job in making sure that intelligence could be considered at the 7/7 inquest without the need for a closed material procedure, but I would not rule it out in future. The order-making power originally included in clause 11 would have provided an opportunity for Ministers, as and when cases arose.
I am thinking in particular of more than 30 historic inquests that have still to be heard in Northern Ireland and where the deaths involved the police or Army. That is an issue that will not go away. I have raised it with the Minister, and with other Ministers, and I have yet to hear one disagree with my assertion that if it is right to have a closed material procedure in civil cases, it is right to have it in inquests. I am thinking, too, of proceedings in relation to the judicial review of decisions to revoke the licences of convicted terrorists who have been released from prison, but where there is intelligence that suggests that they are again engaging in terrorist activity.
Hazel Blears
My right hon. Friend has pursued the issue of inquests with huge tenacity, and he makes an almost irrefutable point: how are we to get a proper decision in an inquest unless the full information can be put before the coroner? Certainly in the case of the historic inquests in Northern Ireland, inevitably, by its very nature, that information will be private and secret information from the intelligence agencies. I have yet to hear an answer from the Government on that.
Paul Goggins
I do not make light of the issues. If intelligence were shared with a coroner, but not with the family of the deceased, that would be a massive step, but it is better that we should know the cause of death rather than the whole thing remain a mystery. I am therefore grateful to my right hon. Friend for her intervention.
Mark Durkan (Foyle) (SDLP)
My right hon. Friend will not be surprised to hear that I beg to differ strongly on that point. The idea that we can make a contribution to resolving issues of the past in Northern Ireland and all these inquests that have not taken place by creating a closed material procedure simply will not wash, not least in the light of the implications of the de Silva report and the issues for many families, not just the Finucane family, in relation to some of the revelations, never mind the material that was not disclosed by de Silva.
Paul Goggins
As ever, I warmly welcome the intervention of my hon. Friend, even though for some years we have disagreed on that point. It is good to know that he continues to make the point and that we continue to debate the issue. He may be interested in my next point which relates to the judicial review of a decision to revoke the licence of a convicted terrorist who has been released from prison, and where there is intelligence to suggest that that individual is again engaged in terrorist activity.
I shall refer to my specific experience in Northern Ireland. In 2008, I revoked the licence of a leading member of the Real IRA who was a convicted terrorist and had been allowed out of prison. Intelligence given to me made it perfectly clear that he was again involved in organising terrorist activity. That intelligence came from the Security Service. He did not like the fact that I revoked his licence and he went back to prison, but he challenged me for more than 12 months on that decision. In the end, the case went all the way to the Supreme Court. The outcome was that he had to be released into the community, though he was due to be released a few months after that date in any event.
The court made it clear that I had behaved perfectly reasonably and lawfully throughout, but it demanded that more of the information on which I made my decision should be given to the individual than the Security Service could possibly have allowed, so he walked free. I simply say to the Minister—and it will be interesting to see whether the Under-Secretary will comment on this in his winding-up speech—that the issue will not go away, especially as an increasing number of convicted terrorists will come out of prison in the foreseeable future. I suggest that this is something that needs to be looked at.
Finally, I agree that the closed material procedure used by the Special Immigration Appeals Commission, and included in the Bill, is not a perfect procedure, but to work as best as it can it requires the co-operation and advocacy of the special advocates who represent claimants or defendants. I do not criticise special advocates because they express strong opinions, and I do not question their motives, but if Parliament decides that the provision of a closed material procedure is a proportionate response to the risks that we face, it is absolutely vital that special advocates, like the rest of us, do whatever they can to make the system work. I hope that the Under-Secretary will tell us that he is engaging in a new initiative with special advocates that will mean that they will strive to make sure that they can represent their clients in the best way possible. The Bill is an important further step. It was improved in the other place, and I am sure that it will be improved in Committee.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Having served on the Intelligence and Security Committee for more than a decade after it was first established, I warmly welcome the action of Ministers in introducing these new provisions. I have some slight reservations about improvements that are needed, but the measure is a good indication of the importance that the Government attach to the effective oversight of intelligence.
Much of my time on the Committee was deeply rewarding, and gave me a great deal of respect for the people who work in our intelligence services or assist them. Sometimes, however, it was like drilling into hard rock, and the drill had not got through the rock by the time I left the Committee. There were still many areas where the Committee did not have the information that it ought to have had to make the right kinds of judgment.
The value of the Committee rests only partly on its reports, which it makes to the Prime Minister. In future, it will make reports to Parliament. There has been reference to an annual report: the Committee makes numerous reports on different matters, and occasionally it has to make a report exclusively to the Prime Minister because none of the content can be revealed, so provision is made for that. The Committee’s value also rests on the fact that it gives confidence to the House and to colleagues that there are people who have enough access to know whether there is likely to be incompetence, illegality or unacceptable behaviour going on. The Committee provides reassurance that if that were the case, it would challenge it. To do so, it needs depth of knowledge, which means being aware of what is going on operationally.
Some of the definitions in the Bill are capable of benign use, but could also be put to hostile use, and could be used to restrict information. I do not think that that is the intention, but they could be improved significantly. The right hon. Member for Salford and Eccles (Hazel Blears) made a point about ongoing operations, and I think that that is a limiting provision. When does an operation end? Many of our operations against terrorism are ongoing for as long as we think there is a threat, but we have to know what is happening. If we look back to the period leading up to the Finucane murder, for example, it would have been wrong, if the ISC had existed then, for it not to have had some understanding of the relationship between the Security Service and military units such as the force research unit and the basis on which information might be released by agencies and get into the hands of paramilitary organisations. The Committee needs that level of understanding to meet the test I described, so the wording needs to be adapted. It would be wrong, and a terrible mistake, if the Committee knew who was serving as agents and what handlers were finding in particular cases at particular times. That information should be kept as narrowly as possible, but allowing understanding of the operation, why it is being conducted and on what lines is significant.
Sir Malcolm Rifkind
My right hon. Friend may like to know that part of the intention of the reforms is to ensure that we receive regular—probably quarterly— reports on the spectrum of agency activity, including operations, subject to retrospection and significant national interest. That gives us a broader awareness of the totality of agencies’ activities than has been possible in the past.
Sir Alan Beith
That is very helpful. There is a success story here: the Committee is still building the relationships necessary to give the confidence I described earlier. I pay tribute to those who have been involved in this on the Committee side as well as on the Government side. There will be occasions, as there have been in the past, when the public fear that power within the intelligence sphere is being used inappropriately or, indeed, not effectively. A democratically elected body must therefore be able to provide reassurance that if something goes wrong it will know about it and try to do something about it.
The other part of the Bill deals with closed proceedings, which are also closely related to intelligence. I emphasise that we are discussing civil proceedings, not prosecutions. Closed material proceedings are unwelcome, but it is difficult to see an alternative. They are necessary to protect the operational effectiveness of intelligence services, including the secrecy of sources. The control principle of foreign intelligence is fundamental to intelligence operations: people do not give away their country’s intelligence unless they know it will not be misused.
That is not a one-way process—other nations sometimes forget the control principle. I recall a rendition case in which our US allies did not observe the principle. Indeed, the Committee reported on it because the intelligence was provided on the basis that action would not be taken, yet it was used to provide the basis for an action. That was an example of the control principle not being applied, but we must apply it; otherwise, we will not gather the intelligence we need to protect our citizens.
I pay tribute to the work of the Joint Committee on Human Rights, which the Justice Committee decided was doing the work and should be allowed to get on with it. Boundary lines between our two Committees are often drawn, but the Joint Committee’s excellent work contributed hugely to their lordships making the Bill more acceptable to those of us who come at it from a more liberal standpoint. Their lordships made it quite clear that although the Executive apply for closed material proceedings, the judge decides.
The original subsection (2) of clause 11, which would have allowed the extension of closed material proceedings into other areas, was removed by a welcome Government amendment. Their lordships passed an amendment on considering alternatives such as public interest immunity and a strict necessity test. The amendment appeared to be desirable, although my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) today indicated that it could lead to some cumbersome processes, so it will be appropriate for the Committee to look a little more closely at it.
A court will be required to balance national security with fairness, transparency and the need for open justice. The amendment that was unsuccessfully proposed to bring that process continuously into closed material proceedings was unrealistic—it is pretty difficult to satisfy foreign allies that we will apply the control principle if the question is being reopened in proceedings daily. The Government have indicated that they will accept the provision under which either side will be able to invoke closed material proceedings. I find it hard to envisage the circumstances in which a plaintiff would do so, but equality of arms requires that provision. I do not know why the Government resist the amendment proposing an annual report on the use of closed material proceedings—a fairly simple requirement—but perhaps such proceedings will not be so frequent and only a biennial report will be necessary.
As a result of proceedings in the other place we are now close to achieving a reasonably satisfactory balance in using difficult and unwelcome powers to ensure that information can be put before a court. None of us would want to have to use the process, but without it we will not be able to decide cases on the evidence available.
Another matter with which the Bill deals is the more general application of the Norwich Pharmacal principle to intelligence, on which the Government are right to act. I note the Intelligence and Security Committee’s suggestion, which the Justice Committee can look at, on how we limit its application so that we more specifically refer to foreign intelligence and the control principle or information that would impair the effectiveness of our security operations. The Government must act to defend our ability to acquire intelligence from elsewhere.
Further improvements might be possible to make it clear that a gisting process can work in cases where the special advocate realises that he cannot effectively challenge or assess evidence without more information that is in the possession of only the plaintiff. We must find some way of resolving that. We cannot allow the present position to continue, but we must get the Bill into the best state possible.
Dr Hywel Francis (Aberavon) (Lab)
I welcome the contribution of the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), who joined me last week in seeking—and, I think, securing—clarification from the Prime Minister of the Government’s intentions. May I say how pleased I am by the desire among Members on both Front Benches to improve the Bill in Committee?
The Joint Committee on Human Rights, which I chair, spent a long time scrutinising the proposal before the House today. We took the unusual step of holding an inquiry into the Green Paper that preceded the Bill because some of the proposals in the Green Paper constituted such a radical departure from the country’s constitutional tradition of open justice and fairness that we thought they deserved the most careful scrutiny.
Our examination of the Green Paper revealed serious human rights concerns about a number of the proposals. The Government accepted some of our recommendations on the Green Paper, and when the Bill was introduced in the other place they made some changes to the original proposals. The Government’s decision not to extend closed material procedures to inquests and the narrowing of the scope of the proposals to national security material were particularly welcome.
The Bill as introduced still represented a radical departure from our traditions of fair and open justice. Amendments made in the other place, based on some of the recommendations made by my Committee, have improved the Bill, but I want to explain why the Government still have a long way to go in improving this measure before they can plausibly claim that it is compatible with British traditions of fairness and openness, of which this House has been a proud defender.
Our starting point must be a recognition of how radical a departure from our common law constitution it is to extend closed material procedures to civil proceedings. During my Committee's scrutiny of the Bill the Government appeared to be in denial about this, but every other witness before our inquiry agreed about the enormity of what the Government propose. Let us not forget that in the case of Al-Rawi the Supreme Court refused to countenance such a radical change by judicial development of the common law.
Why does the Bill amount to such a radical departure? There are two main reasons. First, we in this country have always enjoyed a right to an adversarial trial of a civil claim. This includes the right to know the case against us and the evidence on which it is based, the opportunity to respond to evidence and arguments made by the other side, and the opportunity to call witnesses to support our case and to cross-examine opposing witnesses.
The second main reason why the Bill amounts to a radical departure from our constitutional traditions is that it derogates from the principle of open justice—the principle that litigation should be conducted in public and that judgments should be given in public, so that the media can report fully and accurately to the public on what the courts decide. One of the central questions for the House is this: have the Government demonstrated, by reference to sufficiently compelling evidence, the necessity for such a serious departure from the fundamental principles of open justice and fairness? My Committee subjected to careful scrutiny the evidence that the Government say demonstrates the necessity for making closed material procedures available in civil proceedings. We appreciated the Government’s difficulties in proving their case with reference to ongoing cases. We were anxious to give them a proper opportunity to prove their case and did so, but the Home Secretary refused to allow the special advocates to see the material that had been shown to the independent reviewer of terrorism legislation. The Government were unable to provide the Committee with a detailed breakdown of the civil damages claims pending against them in which sensitive national security information is centrally relevant to the case.
The Committee’s report on the Bill states that we remain unpersuaded that the Government have demonstrated by reference to evidence that there exists a significant and growing number of civil cases in which a closed material procedure is essential, in the sense that the issues in the case cannot be determined without a closed material procedure. I am sympathetic to the arguments made by many human rights organisations, including Liberty, Justice and Amnesty International. They argue that, because the Government have not made their case for introducing closed material procedures into civil proceedings, that part of the Bill should be removed altogether. Indeed, I note that a number of eminent lawyers in the other place voted to do just that.
My Committee’s judgment, however, is that the Bill is likely to pass in some form, and it is therefore better to seek to improve it with amendments than seek to make it compatible with the important traditions of open justice and fairness. I will therefore not vote against the Bill today, but the Government are on notice of the need to show us the evidence that demonstrates the necessity for extending closed material procedures into civil proceedings.
The amendments made to the Bill by the House of Lords made some of the necessary improvements, but I shall conclude by outlining four areas where the Committee and I believe improvements are required. First, we need provision for full judicial balancing of interests to take place within a closed material procedure. The House of Lords—by an overwhelming majority—amended the Bill to ensure that there is full judicial balancing of interests at the gateway stage, when the court decides whether a closed material procedure is appropriate. However, the amendment to ensure that the same judicial balancing takes place within the closed material procedure, when the court is deciding whether material should be closed or open, was defeated in the Lords late at night. Labour backed the amendment recommended by my Committee in the Lords, and I hope it will do so in this House. The amendment is essential to ensure that judges have the discretion they require to ensure that the Bill does not create unfairness.
Secondly, the House needs to listen to the expert views of the special advocates and act on their recommendation that the Bill must include what has become known as a gisting requirement, which has been referred to. My Committee recommended that such a requirement be included in the Terrorist Asset-Freezing etc. Act 2010, but the Government resisted, and the High Court last week held that such a requirement is necessary for the legislation to be compatible with human rights. The House should not leave it to the courts to correct the Government’s mistakes, so we should amend the Bill to give effect to the Committee’s recommendation.
Thirdly, the Bill needs to make provision for regular reporting to Parliament, as has been suggested. The Secretary of State should report regularly for independent review by the independent reviewer of terrorism legislation, and for annual renewal, to ensure a regular opportunity for Parliament to review the operation of the legislation and to debate its continuing necessity.
Fourthly and finally, the Bill needs to be amended to provide a more proportionate response to the problem of preventing courts ordering the disclosure of national-security sensitive information.
In conclusion, I look forward to the House, particularly in Committee, living up to its responsibility to ensure that the legislation we pass is compatible with the basic requirements of the rule of law, fairness and open justice.
Mr David Davis (Haltemprice and Howden) (Con)
It is a pleasure to follow the hon. Member for Aberavon (Dr Francis), whose Committee—the Joint Committee on Human Rights—produced the best guide to the Government’s proposals and their weaknesses, and to the threats they pose to our current civil liberties.
In recent months, the Prime Minister rightly received plaudits for how he handled the apology for the Bloody Sunday massacre and the Finucane murder. He did so with great openness and sensitivity. Both inquiries exposed unlawful killing, either directly or indirectly, by agents of the state, and subsequent cover-ups. Thankfully, that sort of thing is extraordinarily rare in the UK. One reason why it is rare is that such things are exposed and deterred by an open and transparent system of justice—the whole system of justice, including the criminal judicial system, the inquest system and the civil courts system.
Measures in the Bill create the power to take parts of that civil judicial system not just out of the public domain —that already happens in some ways—but completely out of the normal judicial testing procedure. Under the Bill, evidence can be presented by the Government that the other side and their defence lawyers cannot see. That evidence cannot be tested, and therefore may be wholly wrong and misleading, which undermines the very thing that makes our system work.
Mr George Howarth (Knowsley) (Lab)
What role does the right hon. Gentleman imagine a defence lawyer would have in such proceedings?
Mr Davis
A defence lawyer has the role of challenging the evidence, but I will come back to the right hon. Gentleman’s point later.
The Bill is, in the words of Lord David Pannick, a leading barrister—indeed, he is the Government’s leading barrister of choice—“unnecessary, unfair and unbalanced”. He said it is unnecessary because we already have the public interest immunity system.
Sir Malcolm Rifkind
My right hon. Friend has chosen to quote Lord Pannick, but in the debate in the House of Lords on 11 July, he also said:
“I recognise that there may well be a need in some exceptional cases for a…closed material procedure, but…this should be a last rather than a first resort.”—[Official Report, House of Lords, 11 July 2012; Vol. 738, c. 1176.]
Mr Davis
If my right hon. and learned Friend will forgive me, I have run out of injury time.
If a case involves sensitive information, the Secretary of State asks the judge’s permission to keep documents away from the court. The judge examines the evidence and makes a decision that balances national security with the interests of justice. Under the PII system, evidence can be shown in an edited form, and witnesses, whether spies or special forces or whoever, can speak from behind screens. Suspects can be given the gist of the case against them, and the court can sit in open session or in camera. All those operations are possible under the PII system, which has served British justice well for decades, not just against the current threat of terrorism, but against the Soviet threat, which in many ways was much more professional, and the previous Irish terrorist threat. The proof of the PII system is that no Government, including this one, can point to a single court judgment that has undermined national security—not one judgment.
Mr Davis
PII balances the demands of national security and justice—that is exactly what it does. I do not want to be distracted for too long, but I discussed this at some length with Lord Pannick, whom my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) mentioned, with a number of lawyers who operate in this system all the time—not just as an aside or even as criminal lawyers, but all the time—and with the special advocates. This is not just the view of some civil liberties extremists, as the Minister without Portfolio tries to imply. It is the view of the Joint Committee on Human Rights, which is unpersuaded —the word it used—that the existing law is not up to the task. It is the view of almost all the special advocates, the lawyers who make closed material procedures work and understand the procedure better than anyone else—indeed, I would argue that they are the only people who understand both the strengths and the weaknesses of the procedure they operate. It is the view of Lord Pannick, as I said, and the view of the former Director of Public Prosecutions, Lord Macdonald, who had a formidable record of prosecution in terrorist cases in his time as DPP.
The Government, the security agencies and their proxies say the opposite, just as they did—in fact, we had the reference earlier—when the 7/7 inquest was proposed. What did MI5 say? It said that holding the inquest in public would amount to “handing over the keys” to its headquarters. It said that if evidence was not heard in secret then it might have to release information from top secret intelligence files. No such thing happened. Instead, we learned a great deal about what happened on 7/7. We learned about failings in operations, data handling and management—all perfectly proper things for the British public to know, and not a single failure of security or intelligence. As the right hon. Member for Wythenshawe and Sale East (Paul Goggins) said, Dame Justice Hallett ran the inquest very well indeed, as we expect our security-experienced judges to do. That balance was managed nearly perfectly. There is no doubt that this sort of important information about the scrutiny of the state is far more likely to come out in an open court of law than by any other means. I even include in that the Intelligence and Security Committee, good job though it does; an open court is even more important than that.
Many of the Government misdemeanours I have just mentioned have been and gone—inquests held and claims settled. However, the problem of Governments using the rhetoric of national security as a shield for politically embarrassing information has not gone away. In recent years, we have seen allegations of Government complicity in torture and extraordinary rendition. We have seen Gaddafi’s political opponents seized and handed back to the Libyan dictator to face imprisonment and torture—the case that was settled last week. I suspect we will be involved in the use of drones, which have killed scores of innocent people, because of intelligence. This issue of exposure of state misdemeanour in the courts, therefore, is still very current indeed.
It is worth looking at an example of how the state currently uses closed material procedure when it is able. As luck would have it, we have a topical case right now—the case of Serdar Mohammed. Two weeks ago, a British court heard allegations that a suspected Taliban terrorist, captured by UK forces, was tortured by Afghan security services. A secret document was presented to the court in redacted form, the way it would have been in a closed material procedure. Indeed, the document was in the Maya Evans evidence case that my right hon. and learned Friend the Minister without Portfolio referred to earlier. The court did not allow the redaction of the secret UK eyes only document, so we now have both the redacted and unredacted copies in the public domain. We can, therefore, see what was redacted, supposedly for security reasons.
Paragraph 20 talks about a visit to this prisoner by British embassy staff and Royal Military Police. It states:
“The detainee showed the visit party...some of the injuries which he claimed were made as a result of being beaten several times with steel rods to the areas of his legs and feet which he claims left him unable to stand afterwards. Photographs of some of the alleged injuries are also annexed.”
Where the security interest of the British state is in redacting that, I do not know. It was absolutely material to the case in front of the court on Serdar Mohammed. The information posed no threat to any agents, no threat to any techniques, and no threat to any British national interest and yet that was one of the redactions. The only negative effect of showing it in court, of course, was the possible political embarrassment that we may not have met our duties under international law and under the rules of war in protecting a prisoner who was technically under our command. This is exactly the sort of public interest information that could be concealed if the Bill became law.
With closed material procedures enshrined in law, the intelligence agencies would inevitably be tempted to protest that any information relating to their activities was “sensitive”. We have seen that before in the Binyam Mohamed case. More cases would be heard in secret, with no defence lawyers, victims, press or public present to challenge or report what transpired. Evidence heard in secret cannot be easily challenged, and we need to address that. Inconsistencies cannot be spotted and witnesses cannot be properly cross-examined. Under these conditions, evidence may not be worth the paper it is written on.
Let me give the House another example of how this system can fail. A few years ago, there was a control order case, under the previous Government, where the suspect was accused of entering Britain at a specific date and time using a fake passport, which was part of the evidence. Shortly afterwards, exactly the same evidence, including the same fake passport, was used against a different suspect in another, totally unrelated case. They were both supposed to have used the same passport on the same day, which was clearly not possible. It was only by lucky coincidence that the same special advocate, out of approximately 70, was handling both cases. He recognised the evidence and was able to point out that this was false. I do not believe that it was an intentional misleading of the court by the agencies; I think it was simply a mistake. However, it is a matter of public record and the special advocate concerned is now a judge. That demonstrates how easily the CMP can fail miserably in critical issues of justice. That is why Supreme Court Justice Lord Kerr, former Government prosecutor in Northern Ireland during the troubles, subsequently Lord Chief Justice of Northern Ireland, said:
“It would be, at a stroke, the deliberate forfeiture of a fundamental right which has been established for more than three centuries.”
The Justice and Security Bill is being sold as a fair way to protect our national security and justice. It does neither.
Hazel Blears (Salford and Eccles) (Lab)
It is a pleasure to follow the right hon. Member for Haltemprice and Howden (Mr Davis). I am not entirely sure that we will see completely eye to eye in our contributions, but I hope that we will have the opportunity to debate the subject further.
As a member of the Intelligence and Security Committee, I welcome the proposals in Part 1 of the Bill. They will go a long way to ensuring that the scrutiny of our intelligence agencies is more robust and transparent. In turn, that will give the British public a greater degree of reassurance that the intelligence agencies are properly and fully scrutinised. That is important because they spend a great deal of public money—approximately £2 billion—and because they are involved in some of the most controversial and difficult areas of our national life and operations across the globe.
I commend to the Minister the amendments ably and deftly moved by my colleagues Lord Butler of Brockwell and the Marquess Lothian in the other place, particularly in relation to the issue about not limiting the Committee to dealing entirely with retrospective matters, but giving it some freedom to look at current issues if that is what the Government want us to do. I hope the amendments will be adopted.
I want to add my thanks to those from the Chair of the Committee and from my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) to our current secretariat. They are few in number, but the work they do is amazing. I do not think that the Committee would fulfil its role in the way that it does without their insight, intelligence and intellect, and I pay tribute to them.
If Part 1 of the Bill is relatively uncontentious, the same cannot be said of part 2. My hon. Friend the Member for Aberavon (Dr Francis), the Chairman of the Joint Committee on Human Rights, repeated the phrase that these proposals are a “radical departure” from our normal system of justice. That is also what Lord Pannick said in the other place and was the basis of all the evidence put before the Joint Committee. Yes, it is a radical departure. Under our normal system of justice, evidence is heard in open court and challenged by adversarial cross-examination, and the judge weighs the evidence and comes to a reasoned judgment at the end of the case.
Mr George Howarth
Does my right hon. Friend agree that, although these proposals are a radical departure, the circumstances in which they would be used are also a radical departure?
Hazel Blears
My right hon. Friend is absolutely right. Since the terrorist threat to the country has increased, particularly since 9/11, and remains a significant threat, clearly other measures have had to be taken.
That is exactly the point: although everyone is saying that these proposals are a radical departure, actually we have trodden this path before. As the Minister responsible for taking the control order legislation through the House, I know only too well the depth of feeling among Members on both sides of the House—this is hugely controversial stuff about which people have very strong feelings. It is contentious among the legal profession, and there are many different views among judges and practitioners, but, as has been said, none of us wants to go down this path—it is not something that we relish doing—but, if we are to protect national security and to have a fair hearing of these issues, we have no other option.
Last night, I tried something that the judges will have to do, which was a little balancing act: I drew up a table of arguments for and against the proposals to highlight in my own mind where the balance in the Bill should lie. First, on the “for” side—the reasons I support the proposals for closed procedures—was the need to protect our international relationships and liaison with countries across the globe. Yes, that is about America, but it is not just about America; increasingly, many of the plots that threaten the UK have an international element and much more work now has to be done upstream—in the words of the security agencies—to disrupt terrorist training and plots that might manifest themselves in this country unless we can do work internationally as well as in this country. That means we have to have these relationships. They are fundamental to the success of our fight against terrorism.
Some people have asked whether the threat that America might not co-operate with us as much as it has in the past is real, or whether it is something that the security agencies are making up to force us down this path. As the Americans would say, “You bet it’s real”. When the Committee visited America last year, we were told in no uncertain terms by law officers, the CIA and a whole host of agencies that the damage done not so much by the information in the Binyam Mohamed case, but by the breaching of the control principle had shaken that relationship—I would not say to its foundations, because it is a very strong relationship, but it had shaken it—and resulted in a lack of information sharing.
Mr David Davis
The right hon. Lady might not be aware, but the greatest release of intelligence information in history prior to WikiLeaks came in the Pentagon papers. In that case, the American Government brought the control principle before their courts, and they were turned down and vast amounts of data provided by foreign countries were released into the public domain—and that was not the last time; it has happened several times since. Indeed, evidence to the Binyam Mohamed trial stated that the US understood the issues about control because the courts in the states were independent.
Hazel Blears
I think the right hon. Gentleman gets the balance wrong in that case. I think of the information that the US has provided us with to protect our security. I think of the bomb plot in April—the second underpants bomb plot—where the liaison between the US and this country was essential to preventing an incident that could have cost many lives. We have to strike a balance, but national security is our first responsibility to the country.
Mark Durkan
My right hon. Friend referred to US concerns based on the Binyam Mohamed case. Does she not, and do they not, recognise that no disclosure of information was ordered by the courts here and that the disclosure actually happened in US proceedings, not here?
Hazel Blears
I think the Americans have a great deal of concern about many legal jurisdictions when it results in information subject to the control principle being disclosed in open court.
Mr Tyrie
Is the right hon. Lady aware that the American courts do not provide that absolute level of protection and that there is no reciprocation of the control principle in US courts, so it is perfectly possible, through the US court system, that information that we have handed to the Americans could, in principle, find its way into the public domain? That point has been made once or twice already. It is crucial that both countries have a sense of balance and put their courts back at the centre of making that judgment.
Hazel Blears
With respect to the hon. Gentleman, clearly the control principle relates to relationships between different intelligence services and liaison countries. Also, in America, they have the states secret privilege, under which they can say, “This matter is not justiciable at all, because it covers matters relating to national intelligence”, so in some respects it is a more draconian system than ours. We are seeking to find a balance, rather than having an Executive veto, and I think that that is the right way to go.
The second issue on my “for” list was about revealing capabilities, techniques and methods. As a member of the Intelligence and Security Committee, I am in a privileged position and have had an opportunity to look at the current cases lodged for damages in civil proceedings. I have looked at the grounds from the applicants and the defence grounds from the agencies, and it is startlingly clear that, were the defence to be pursued, it would reveal techniques, methods, capabilities and networks of agents, and that it would be impossible for the security agencies to pursue their defence in those contemporary cases. Some people think that these cases are historical and that once we have dealt with the ones from Guantanamo Bay, which we have, there will not be any more coming down the track, but that is not the case. Many have happened recently, and, as the Minister without Portfolio said, this jurisdiction is now becoming an attractive place to bring a claim, because the agencies are not in a position to defend themselves.
Thirdly and fundamentally, the system of closed procedures will allow all the evidence to be put before the judge. That is the foundation here. If we have public interest immunity, we exclude information from the judge, which is the opposite of what we are trying to achieve, and I do not believe that partial justice, in which information that could go to the heart of the proceedings is excluded, is proper justice.
The final point that I weighed in the balance was about safeguarding the reputation of our agencies. My right hon. Friend the Member for Wythenshawe and Sale East made the point very powerfully that these are people who, in some cases, put their lives on the line for our safety and that of those we represent, and when they have to settle cases, as they did last week in the claim by Mr al-Saadi, people will inevitably draw inferences. They will say, “There’s no smoke without fire. There must have been something in it, if the Government are prepared to pay £2 million”, and that puts the agencies in an invidious position. Men and women of integrity and honour who dedicate their lives to the protection of this country are smeared by the implication that they have been complicit in torture or mistreatment. It might have happened in some cases, but I would rather that all the information was before the judge, because at least then the services could get a proper decision, rather than have their integrity smeared, which I think is outrageous.
My final point is about taxpayers’ money. It is not our main issue, but many millions of pounds has been paid to people, some of whom might not have had legitimate claims had we been able to get them into court. If we are giving them millions of pounds, there is the prospect of some of it being used to fund further extremist or terrorist activity. That is totally unacceptable.
There are a number of outstanding questions, and I have no doubt that the Minister will explore them in fine detail in Committee. I look forward to the prospect of discussing them with him. I want to make a couple of final points now, however. The decisions to accept discretion and to move from “must” to “may” are welcome. If this is really to be a judge-led process, that is where we need to be. I also want to make a point to the right hon. Member for Haltemprice and Howden, who is no longer in his place. He talked about the court being able to look at each piece of information; that is exactly what the court will be able to do. The judge will be able to look at each piece of evidence and ask whether it goes to the heart of the issue and whether it should be kept secret or disclosed. If there were a redacted paragraph that had no national security implications, for example, the judge would be able to determine that it could be disclosed. PII would be available, and the matter would not even be before the court, so the right hon. Gentleman’s point really did not support his argument. On the PII issue, I have misgivings about the length of time involved and the cumbersome nature of the process in every case. I want to explore the balancing judgment to get this in the right place.
This is a necessary Bill. As I have said, this is not a move that any of us relishes making. We are democrats in this country, and we believe in the rule of law, but if we are to protect our national security and get the balance right, it is essential that we support it.
Nicola Blackwood (Oxford West and Abingdon) (Con)
It is a pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears). I am not a lawyer, a former Home Office Minister or a member of the Intelligence and Security Committee, so I will speak with humility. I would like to start by paying tribute to the members of the Joint Committee on Human Rights and the Members of the other place who have already done much to illuminate and improve the workings of the Bill.
The Bill clearly sits at the juxtaposition of justice and national security. As a result, it involves less than perfect solutions, in both directions. No one pursuing absolute principles of open justice or fairness would reach for the closed material procedure, public interest immunity certificates, confidentiality rings or in-camera hearings to try to achieve a measure of justice in the national security context. It is unarguable that extreme caution and extreme conservatism—with a small c—should be our starting point in approaching limits to those fundamentals of the rule of law of which we are so rightly proud here in the UK.
I have previously made it clear that I had significant reservations about the Bill. I accepted the principle that the closed material procedure might be appropriate in exceptional cases and as a last resort—that was also the position of David Anderson QC, who, unlike the majority of us here today, has been able to review some of the evidence that forms the Government’s case for the Bill—but I was not so happy with the details of the Bill in its original form.
I will restrict my remarks to part 2, which deals with the secret courts provisions. In particular, I found it difficult to accept the lack of discretion available to judges; the inequality of arms; the failure to ensure that CMP would be triggered as a last resort and only when strictly necessary; and the order-making power in clause 11. A Bill containing such provisions did not give the impression of limiting our traditions of open justice and fairness reluctantly, or of doing only the minimum to achieve the Government’s stated aims of preserving our vital intelligence links while enabling the Government to defend themselves against civil claims. I must be honest and say that I would have struggled to vote for such a Bill.
The Lords amendments have put a different Bill before us today, however; they have addressed every one of the points that I have just raised. They have strengthened the Government’s attempts to achieve their stated aims. I am pleased that the Government have accepted the amendment that will enable judges to exercise a measure of discretion. Replacing the word “must” with the word “may” might not seem like much to the casual observer, but to the non-state party in court, that will mark the difference between an obligation on the judiciary to grant CMP, on the one hand, and confidence in an independent decision made in the courts and not the Home Office, on the other. Our judiciary has so far shown itself to be trustworthy when it comes to protecting our national security interests, and decisions of the courts must clearly be theirs and not the Government’s, if the judiciary is to command respect here and abroad.
I was sorry to hear that the Minister without Portfolio was not convinced by arguments to allow judges to take into account whether alternative, existing procedural measures might be more appropriate in the first instance. Many of those measures provide more minimally invasive ways of excising national security material from the mass of evidence in a case and therefore keep more of the proceedings in the public eye. Put more clearly, rather than reaching for the total blackout of the CMP in the first instance, combining existing mechanisms such as PII certificates, confidentiality rings and in- camera hearings could well be more effective. That could achieve a more open justice, not compromise too greatly on fairness and still preserve the safety of intelligence for the majority of cases. It is important for us to know that that will be the default position, and that the CMP will not become the lazy or inappropriately risk-averse option rather than a necessity due to the nature of the evidence in specific cases or the desire of the applicant to rely on the sensitive information in their argument.
There will always be hard cases, such as that of al-Rawi, that prove that PII certificates might not be appropriate, perhaps due to the sheer volume of sensitive material involved, but such hard cases do not make good law and they prove nothing more than that there will be exceptional cases in which PII will not work and that this new alternative might be necessary. I think that we can trust the judiciary to work that one out. I also think that that course of action is sensible and the very least that can be done to reassure all parties to the litigation and the public that a decision to invoke CMP was strictly necessary and that all alternative solutions had been ruled out first.
I am pleased that the Government have also accepted the argument on equality of arms. It is worth remembering David Anderson QC’s evidence to the Joint Committee on Human Rights on this matter. He said:
“I am a little baffled by this. It is very much part of the Government’s justification for the Green Paper and the Bill that a closed material procedure can achieve fairness for individuals whose claims would otherwise have been struck out.”
It is illogical to exclude an application for CMP if the Government are arguing that the procedure would achieve fairness in such circumstances. I hope that the Government will continue to put forward that justification.
So far, I have made the case for the Government retaining amendments that have already been made, and I am grateful to them when they have done so. I would also like to discuss an issue that has affected many special advocates, who have made it clear that CMPs are “inherently unfair”. That is inevitable, given the circumstances, but the situation should be mitigated as much as possible. A major problem that special advocates have identified relates to their inability fully to represent clients when they are unable to disclose sufficient information to elicit effective instructions from the client. This obviously turns on how effectively and consistently the “AF No. 3 gisting obligation” is applied. Lord Carlile, in his evidence to the JCHR, explicitly acknowledged that that obligation should apply to all proceedings as a default. I am not yet convinced that the language in clause 7(l)(d), which states that the court need only “consider” providing a summary, matches that interpretation.
I hope that the Government will address that matter in Committee. Unless they demonstrate good faith in relation to open justice and state that disclosure will be the default position except in truly exceptional circumstances, it will be difficult to persuade a sceptical public that the measures proposed today are necessary and proportionate. I am afraid that I disagree with the right hon. Member for Wythenshawe and Sale East (Paul Goggins) about the removal of clause 11. His points on individual courts might be true, but an order-making power that does not define the courts involved should not be included in the Bill. It is appropriate that such extreme measures should be fully debated in the House.
Any measure that threatens the rule of law in the UK, or that sends a message that we do not uphold the highest standards of openness and fairness in our judicial system, is to be abhorred. However, when the choice is between no justice—due to national security material in evidence causing cases to collapse—and a measure of justice achieved by CMP, we have an uneasy choice to make. If we can hedge CMP around with sufficient protections for both parties—by keeping the amendments that will ensure sufficient judicial discretion and equality of arms and allow courts to ensure that CMP in civil courts is limited to truly exceptional cases as a last resort, and by ensuring that the gisting obligation is honoured—then and only then will the gains in fairness just about make up for the losses in openness. If those protections are not put in place, however, we will lose fairness and openness, and it will be extremely difficult to justify these changes.
Mr Jack Straw (Blackburn) (Lab)
Before I come to the merits of the Bill, I would like to draw the House’s attention to the fact that, along with Her Majesty’s Government, I have been a defendant in civil actions brought by two Libyan nationals and their families—Mr al-Saadi, who has already been mentioned, and Mr Belhaj. A settlement was made public last week in respect of Mr al-Saadi’s case without any admission of liability by any of the defendants. In the case of Mr Belhaj, proceedings are still active. In these circumstances, the House will, I am sure, understand how constrained I must be in respect of these matters at the present time. I hope to be able to say much more about these cases at an appropriate stage in the future. I should, however, make it clear that at all times, in all the positions of Secretary of State that I occupied, I was scrupulous in seeking to carry out my duties in accordance with the law.
On a lighter note, I apologise Mr Deputy Speaker, to you and to the House that I may have to leave if the winding-up speeches go past 6.15 pm, as I have to conduct an open air carol service beyond the House at 7 pm.
Let me move on to discuss the Bill. As Home Secretary and Foreign Secretary, I was responsible over a period of nine years for all three of the agencies—a distinction, I gather, I share only with the noble Lord Hurd in the other place. During those nine years, I came to have a very high regard indeed for the agencies, for their leadership and for all the staff who work for them. I also recognised that it is through improved methods and means of accountability that the quality and standing of those agencies can be improved and not undermined. I therefore greatly welcome the proposals in part 1 to strengthen the role and status of the Intelligence and Security Committee, and, indeed, to add to the powers of the Intelligence Services Commissioner.
The more controversial aspects of the Bill—on closed material proceedings—are contained in part 2. The starting-point for everyone in this House has to be that, in principle, justice must be open and has to be seen to be done. This House and our courts have rightly established a high bar for any modification of that principle. Sometimes, however, they have so modified that principle where it collides with other equally important principles. One of those concerns the safety of witnesses in criminal trials. Thus, in the Criminal Evidence (Witness Anonymity) Act 2008, following the Law Lords’ decision in the Davis case, I introduced—and both Houses quickly passed—a statutory scheme providing for witnesses who would otherwise be in grave danger, to give their evidence under the protection of anonymity. That evidence is still heard by the defendant and his counsel, as well as by the jury: it is the identity of the witness, not the evidence itself, that is kept confidential.
There is, then, the situation that this Bill seeks to address, where the clash with the principle of open justice is the greater. That is where in civil actions, not just the identity of the witness, but the evidence they give, is kept confidential from one of the parties and their counsel—typically in circumstances where the action is against the state.
My hon. Friend the Member for Aberavon (Dr Francis), who I regret is not in his place at the moment, talked about part 2 being a “radical departure” from accepted principles of the common law. The irony is that the first “radical departure” to establish closed material proceedings came as a result of the decision of the European Court of Human Rights in the Chahal case. As the Minister without Portfolio pointed out, closed material proceedings were established in response to those human rights concerns and at the behest of the same human rights lawyers who are now claiming that closed material proceedings represent some fundamental breach of human rights. If I may say so, they do not, and the Special Immigration Appeals Commission process has been found to be completely consistent with the European convention.
As we know, SIAC’s task is to determine whether a deportation order made against an individual on grounds of national security should be executed. The special advocates see all the evidence, and their duty—formally to the court and not to the client—is to have all the secret evidence tested as forensically as possible before the tribunal, but the deportee cannot know what the evidence is. As a result, there is an especial burden on the tribunal to test this evidence.
Those who are sceptical about SIAC, or any closed material proceedings, need to address themselves to SIAC’s record. I mentioned in an intervention on the Minister without Portfolio that of 37 substantive cases before SIAC since January 2007, in at least seven, SIAC has found against the Government—and the cases do not go there in the first place unless the evidence is quite strong.
SIAC could not operate without closed material proceedings at its heart. The question before the House today is whether such proceedings should be extended to civil actions. In the case of al-Rawi, the Supreme Court decided that if CMP were to be extended to civil actions, that must be a matter for Parliament rather than the courts. Its decision followed the approach of the Law Lords in R v. Davis.
I make no complaint about that. For all the talk about alleged excessive judicial activism, in both cases the Supreme Court and the Law Lords were simply saying “We cannot make the law here in order to extend the law; this is a matter for Parliament.” That seems to me entirely appropriate, and I take issue with the suggestion of my hon. Friend the Member for Aberavon that it was as big a “radical departure” as he and his Committee had claimed. The truth is that there was no necessity for any radical departure in respect of the accountability of the intelligence agencies until 15 years ago, because before then the agencies were not accountable at all. There was no way in the world in which any of these actions would have been entertained. Had they been tried, they would have been struck out by the judge because there was no evidence.
The hon. Member for Oxford West and Abingdon (Nicola Blackwood) is looking at me sceptically, but before 1989, the existence of the agencies was not even admitted publicly. The present situation is relatively new. It arises precisely because of the work done by successive Governments in the last 20 years to make the agencies accountable, and not for any other reason.
Jeremy Corbyn
Does my right hon. Friend really think that the work of an Intelligence and Security Committee all of whose members have been appointed by the Prime Minister amounts to open and democratic parliamentary scrutiny?
Mr Straw
That has been the charge against the ISC in the past, and I am glad that things are going to change. However, I can tell my hon. Friend that I have given evidence to the ISC on a number of occasions, and it is no patsy Committee. It is composed of senior parliamentarians from both Houses, and they do a proper and effective job. The challenge for my hon. Friend is to explain how, given the nature of its subject matter, that job could conceivably be done by means of open hearings. It is not possible. The choice is between an ISC that operates in the way that the Bill proposes, and the absence of any kind of parliamentary scrutiny. I know which I choose.
Let me now deal with the arguments that have been advanced against closed material proceedings. The most frequently used argument is that we should resort to public interest immunity certificates. I accept that, if possible, gisting should be used or the court should sit in camera, but in most cases those options are not possible. Public interest immunity certificates are used fairly often, but they work effectively only when the evidence that they seek to exclude is relatively peripheral to the proceedings. If they are used in relation to evidence that is central to the case, they make it impossible for a trial of the action to take place at all. They do not protect evidence and make it safely usable in court; they exclude it altogether.
Dr Julian Lewis (New Forest East) (Con)
Does the right hon. Gentleman agree that the observation by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis)—I am sorry that he is no longer in the Chamber—that PII certificates have not imperilled national security was obviously correct but utterly banal? As long as we are willing to drop all these cases and pay millions of pounds, national security will not be affected, but the Exchequer will be.
Mr Straw
Yes, and using PII certificates in respect of evidence that is central to a case is profoundly unjust to both sets of parties.
Dinah Rose is a leading critic of the proposals in the Bill. I have looked carefully at her response to the consultation document, which was published earlier this year.
She stated,
“PII is not perfect—it does result in some cases being tried without all evidence being available.”
She also stated that in rare cases:
“PII may also result…in a situation in which a party is ordered to disclose a document which it is not prepared to disclose, leaving it no alternative but to settle the claim.”
She is being disingenuous, because in these national security cases we are talking about not a document—her word—but bundles of documents that are central to the adjudication of the action.
I, like the Minister, dealt with lots of PII cases and had to work through them very carefully. If there were thousands of documents, as there would be in these cases, a Minister would have to take a month or so off to operate that and, at the end, if the court accepted the PII application, there would be evidence that could not be used in the case.
Ms Rose concludes her summary by referring to the need for “potential misconduct” by the agencies to
“see the light of day”.
I absolutely agree with her sentiment. The problem is that in the absence of CMPs, there is no way of determining misconduct by members of the agencies in a civil action. The most that can happen is a settlement out of court with a payment into court but no admission of liability. That is profoundly unjust to both sides. It is unjust to the complainant, who might well have right on their side but who is denied the means to have the court find in their favour, and equally unjust to the agencies and their staff, who might also have right on their side but no means of making their defence.
In the other place, various amendments were made that were designed to strengthen the role of the courts in determining whether and, if so, how CMPs should be used. They will be examined upstairs and I look forward to the result of the Committee. I am in no doubt about the necessity of the Bill and if the sceptics want to make the agencies more accountable, they should have this Bill—
Simon Hughes (Bermondsey and Old Southwark) (LD)
It is pleasure to follow the right hon. Member for Blackburn (Mr Straw), the former Home Secretary, and the House will give due weight to his considered contribution. This Bill is clearly important. The world outside might not have realised that it is in three parts: the third is the ancillary part and is very small, the first appears almost to have consensus on both sides of the House, and the second is clearly still controversial.
Let me first say a word about part 1. Ever since I have been in this place, I have felt that it was right that the responsibility for intelligence and security matters should transfer from the Prime Minister to Parliament. It has been a gradual, careful and considered process, but it is right that we have now done that as all three major parties made a commitment that it should happen. I pay tribute to the current Committee and its predecessors, but it is clearly right that people elected by the people should hold our security and intelligence services to account. With some small further changes that colleagues have debated, we will be on the right track and I anticipate that the newly reconstituted Committee will soon be doing a very important job. I pay tribute to all colleagues who are members of the Committee.
That leaves part 2, which is about the hugely important issue of how we deal with civil cases—I repeat, civil cases—in which there are intelligence issues that cannot easily be shared with the watching world. I say civil cases, but there is one question that was not entirely answered by my very good and noble Friend Lord Wallace of Tankerness, who spoke for the Liberal Democrats and the Government in the House of Lords, when he was asked about the application of habeas corpus, which is not necessarily a civil case in the full sense. He was not entirely clear whether closed material proceedings could apply in a habeas corpus application, and that will need to be specifically addressed as we have to know exactly where we stand as we deal with the Bill.
When the first proposals were published in the Green Paper, my Liberal Democrat colleagues and I were extremely nervous about them. We were concerned that they gave far too much power to the state and far too little power to the courts, and that they crossed the line between the open courts we have always accepted as the right principle and courts with a restricted process. The former Secretary of State for Justice and Lord Chancellor, the Minister without Portfolio, fairly said that the Government wanted to consult and they did, and they have listened to the responses to the Green Paper. There is an argument that there could have been a White Paper, but that is not a central argument for today. It is particularly helpful that not only at the beginning, but by the time the Bill came to the Lords, some changes had already been made. My right hon. Friend the Deputy Prime Minister and colleagues had argued for these changes and set out what, for us, were the bottom lines. In April that was made clear. One of them was that we should restrict the scope of the Bill to national security cases only: done. The second was that we should remove inquests: done, although I hear what the right hon. Member for Salford and Eccles (Hazel Blears) said. There is an inquest question and I do not want to be dismissive of that. The third was ensuring that closed material proceedings were triggered by an application to a judge, not by a decision by Ministers.
Those steps represented good progress. The Bill then went to the Lords, where it was the subject of long deliberation. It was also examined by the Joint Committee on Human Rights. I pay tribute to my hon. Friend the Member for Edinburgh West (Mike Crockart) who served on the Committee for almost its entire work on the Bill. I declare an interest: I joined the Committee at the very end of its proceedings on the Bill. Effectively the work had been done. There was unanimity on the Committee as to the changes that should be made.
I welcome the fact that the recommendations made by the Joint Committee have almost entirely been picked up by the House of Lords on Report and supported by a majority in the Lords—in many cases, large majorities—against the Government. They have made the Bill a better Bill, with many of the safeguards that we want. I hope the Minister without Portfolio and his colleagues in the Home Office will accept the principle of all the amendments that have come to us from the Lords. The Joint Committee wants that to happen and I would urge that, as would my party colleagues.
In between those two things we debated the Bill at our Liberal Democrat conference in Brighton, and it got a resounding thumbs-down from my colleagues as going far too far across the line to closed courts from open courts. I understand that, and I am sensitive to it as I make my remaining comments this afternoon.
John Hemming (Birmingham, Yardley) (LD)
With reference to our party conference, there are those who, like me, would perhaps see closed material proceedings limited to the quantum and the consideration of the quantum rather than the substantive issue. Perhaps that would be an alternative that would attract more support from the party.
Simon Hughes
That is a point of view, but I am not sure. I have not discussed it with my hon. Friend. The point of view of our colleagues was that we have to be very careful when we move away from open justice. We have to accept the evidence of those who say it is not necessary. The Joint Committee heard from the special advocates that it was not necessary. They did not support the proposal and we should give that due weight.
The central issue is what the procedure will be in order to protect the security interests on the one hand, but make sure that we deliver a fair outcome to a reasonable case on the other. The existing system, the public interest immunity system, means that Ministers declare documents secret and therefore they cannot be used. It is a very simple system, although it can be time consuming. I accept the argument that that often means that a case cannot be carried through to a conclusion, so I am not here to defend the idea that the PII system is the solution to all our difficulties.
Happily, the Bill is now drafted in such a way that consideration has to be given to that option first, and to whether, if certain documents are withheld, the trial can none the less proceed fairly. But if that is not the answer entirely, we have to consider whether there is something else. I want to flag up the changes that have been made and the ones that I think might get us nearer to what my party colleagues would like to see, as would many people who have written to us.
First, it is right that we should stick to the idea that the discretion is with the judge, not with Ministers of the state as an alternative. That is why the change referred to by the hon. Member for Oxford West and Abingdon (Nicola Blackwood), that the judge “may” do things, rather than “must” do things, is the right change—small word but big implication in the context of clause 6. We have added the requirement to look at alternatives, such as the PII alternative. We have also added the requirement—a good one—that all parties to the proceedings can apply for closed material proceedings, or that could happen at the judge’s instigation, which is a good thing. We have also dealt with the inquests issue.
However, we have not dealt with the fundamentally important issue of how a defendant can see the evidence against them, and that is what gave the Joint Committee on Human Rights its biggest difficulty. The Committee made it absolutely clear in its report’s conclusions that, because we had not had the information that justified the case and had heard from the special advocates that they were not persuaded, even though the Government’s official reviewer said he was persuaded, the Committee was not persuaded either. That is set out in paragraphs 44 to 46. There was uncertainly about how many cases we were talking about. Paragraph 42 states:
“In the light of the lack of clarity about whether the number of pending claims is 27, 15, 6 or 3, and in the light of the Independent Reviewer’s evidence we wrote to the Minister in charge of the Bill on 23 October to ask how many civil damages claims were currently pending”.
Just after the Committee wrote the report, the Advocate-General for Scotland, my noble Friend Lord Wallace of Tankerness, replied to that:
“I can confirm that as of 31 October 2012, there are 20 such live civil damages claims (including those stayed and at pre-action stage). There are also a number of other live cases, including judicial review challenges.”
He went on to elaborate the detail of that figure. I think we have to accept that that is roughly the number of cases we are talking about, but some of them are very significant cases and cannot be dismissed.
We must therefore take seriously the challenge that the Government have brought us. My honest view is that we have to allow the defence better access to the information, either through special advocates or by another means. It is on the new word that has only recently come into our language—“gisting”, which means allowing the defence to see not every iota of evidence, but the gist of it—that we need to do the most work in Committee. I think that there must be a mandatory requirement that the information be given in summary to the defence and that the defence—they can be specially cleared defendant advocates or representatives—can see the evidence, respond and take instructions on it. If we are going to say that we will allow the courts to go into closed session, it seems to me that we need the security of knowing that the defendant will have the right to know the case against them and the right to challenge. I hope that the Committee will do some detailed work on that over the coming weeks.
I agree that we need to deal with the Norwich Pharmacal situation, because at the moment we are precluded from using intelligence from abroad because of the court’s overriding power to have that put into the public domain. That has to be dealt with, because it is clearly unsatisfactory. I agree that we need to have a reporting and reviewing process and allow the media to make representations, as recommended by the Joint Committee.
I have two final points. First, we must ensure the judicial balance of national security against the public interest takes place in the second stage of the closed material proceedings process, not just at the gateway. Secondly, we have to consider whether we can just sign off this legislation forever or whether we have to come back to it in a certain number of years. This is very unusual territory for us. Civil liberties are at risk. We have made progress, but we are not there yet.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
It is interesting to follow the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). He said that there was a lack of evidence to support the need for change, which was reminiscent of where the proposal for 90-day pre-charge detention fell down. I believe that part 2 of the Bill threatens to undermine the principle of natural justice that demands that parties to an action should be given access to the case they confront. The Bill is deeply contentious, but some vital amendments have been made by the other place and I think that they must be upheld as a bare minimum, although I am sure that I am not alone in wishing that certain elements of the Bill should be removed entirely. On my reading, even as amended the Bill could result in members of the public losing their cases against the state without ever having been told why, in the Government’s being allowed to hide evidence of wrongdoing, and in officials being given the power to exclude the other party from court proceedings. As Reprieve points out, that effectively means that they could place themselves beyond challenge and hence above the law.
Last week, we heard about the Finucane case. We were all heartily disgusted at what went on—the collusion between the police service and the security services. God forbid, but if such a thing happened again, I believe that the Bill would make it easier for the state to prevent a family from suing in such circumstances. Have we thought about that?
Part 2 also sets out the Government’s intention to remove the courts’ power to order someone who has been involved in wrongdoing to disclose information—the Norwich Pharmacal jurisdiction, which needs to be considered in Committee.
I shall restrict my remarks to the proposed extension of closed material procedure—known as “secret courts” in outside parlance—to all civil proceedings in clauses 6 to 13. Responding to those provisions, the president of the Law Society and the chairman of the Bar wrote to the Minister without Portfolio saying:
“CMPs…undermine the principle that public justice should be dispensed in public and will weaken fair trial guarantees and the principle of equality of arms. These are both essential elements of the rule of law.”
I might also add, as others have, that they undermine the principle that justice must be seen to be done.
We have heard what the Joint Committee on Human Rights has said. It has been vocal in its criticism of the legislation and has drawn attention to the
“troubling lack of evidence of any actual cases demonstrating the problem which the”
Government “asserts to exist.” At no point have the Government produced any known case that could not be tried under the current public interest immunity system, which I have seen operate over many years as a legal practitioner myself.
The special advocates memorandum says
“CMPs are inherently unfair and contrary to the common law tradition...the Government would have to show the most compelling reasons to justify their introduction...no such reasons have been advanced; and...in our view, none exists.”
It speaks volumes that the special advocates memorandum was so scathing about what the legislation purports to do; special advocates, of course, are better qualified to comment than anyone else. Among their concerns was the fact that the Bill as originally drafted required a judge to allow the Government’s application for a CMP if there was any material at all that could damage national security, even if the judge considered that the case could be fairly tried under the existing PII. The memorandum also makes the point that the decision on whether to trigger a CMP should lie with a judge and not the Secretary of State—an amendment to that effect has been carried and is most welcome; I hope that it will remain in the Bill.
Furthermore, under clause 6 as it originally stood, only the Government would have been able to apply for a CMP and not both parties. That is objectionable. The amendment on that is also welcome and I hope that it will be retained, although I am sure that the circumstances in which a plaintiff or claimant would apply would be limited.
I wish to refer to comments made by Lord Hodgson on Report in the other place. He said:
“I would like to see enshrined in the Bill a set of steps-hurdles…that the Government of the day will have to clear before they can resort to a CMP. The first is a requirement to go through the public interest immunity procedure, from which the judge can reach a balanced conclusion on whether the interests of national security require a closed court.”
In the same debate, Lord Pannick, a pre-eminent Queen’s Counsel, is recorded as arguing that
“a judge in an individual case should have a discretion, not a duty, to order a CMP.”—[Official Report, House of Lords, 21 November 2012; Vol. 740, c. 1812-14.]
I urge the Government to take heed of those arguments and to uphold the amendments carried in the other place.
Perhaps the most disturbing provision of all is in clause 7(1)(d), which provides that, if a CMP is triggered, a court is not required to give the excluded party a summary of the closed material. Rather, the Bill as drafted requires only that the court should “consider requiring” that such a summary be given. Clause 7(1)(e) provides that the court must ensure that where a summary is given it
“does not contain material the disclosure of which would be”
against
“the interests of national security.”
Mr Robert Buckland (South Swindon) (Con)
I am listening very carefully to the right hon. Gentleman. Is not the problem with his argument on clause 7 that there will be cases, if only perhaps a very few, where gisting will not be possible without revealing the essence of what needs to be secret? Therefore, is it not essential to retain some discretion for the court to “consider”, and does that not give more power to the judges?
Steve Baker (Wycombe) (Con)
I am tempted on the whole to agree with the thrust of the right hon. Gentleman’s argument, but I draw his attention to clause 7(3), which, if I understand it correctly, requires that the court would direct that the party would not be able to rely on such points unless they provided a summary. I am therefore not sure that his argument stands.
Mike Crockart (Edinburgh West) (LD)
Will the right hon. Gentleman give way?
Mr Llwyd
I would like to make some progress.
I have no time to deal with that at this stage. The hon. Member for Wycombe (Steve Baker) may be right; I do not know. I would like to discuss it with him on another occasion, perhaps in Committee.
If clause 7 goes through unamended, there will be no requirement to give excluded parties sufficient information about the case. I have heard the arguments about gisting, but surely in 99.9% of cases the gisting procedure will be the answer, coupled with other safeguards, one hopes.
Nicholas Blake QC, in giving evidence to the Eminent Jurists Panel on Terrorism, Counter-Terrorism and Human Rights, made the following comments on the situation that would arise after a judgment is given:
“If the special advocate thinks there is an error of law in the closed judgment, he gets permission to say, to pass the message out to the other team to say ‘I think that you should be appealing, I can’t tell you why’...So there is a sort of open appeal. ‘We think there is something wrong but we don’t know what it is.’ And then the court goes into closed session, so it is antithetical to every”
principle
“of due process and open justice.”
The Joint Committee on Human Rights has urged the Government to ensure that if CMPs are to be extended, there must be a
“statutory requirement in all cases to provide the excluded party with a gist of the closed material that is sufficient to enable him to give effective instructions to his Special Advocate.”
That is entirely reasonable, while taking on board what the hon. Member for South Swindon (Mr Buckland) says about avoiding breaches of national security, and so on. The Constitution Committee said in its report on the Bill published in June this year:
“In our view, the court should be required, for example, to consider whether the material could be disclosed to parties’ legal representatives in confidence and whether the material could be disclosed in redacted form.”
A related point that must be raised is the knock-on effect that clause 7 may have on appeals in civil cases, which is something that we really need to think through.
The Law Society has pointed out that the extension of CMPs will have wider implications for civil litigation and the professional ethics of solicitors. Solicitors will be impaired in advising their clients on the merits of a case and the prospects of success if they are unable to see the evidence brought by the other party. They will also be unable to advise on any prospect of an appeal, so undermining the client’s right to legal assistance in the determination of their civil rights and the fair trial guarantees under article 6 of the European convention on human rights.
The provisions contained in part 2 of this Bill will mark a departure—I am not saying that it will be radical, but it will be a departure—from the principles of open justice, and it will possibly undermine confidence in our justice system. I sincerely hope that this House will follow the example of the other place in seeking to amend what appears to be an unbalanced Bill. Discretion as to whether a CMP should be used must ultimately lie, of course, with a judge and not the Secretary of State. Although courts should be required to balance the interests of national security against those of fairness, either party in proceedings should be able to apply for a CMP and, perhaps most importantly of all, there should be a statutory requirement in all cases to provide the excluded party with a summary of the material to enable him or her to give cogent instructions to the special advocate representing his or her interests in court.
Steve Baker (Wycombe) (Con)
I am grateful that this Bill began its journey in the other place, so that people, such as myself, who are not learned could have the benefit of the thoughts of some of our most senior lawyers. I took two things in particular from their deliberations on Report: first, that many of our great legal minds support the Bill, and secondly, that they support it with their suggested amendments.
Lord Pannick has been quoted and counter-quoted, but, for the benefit for those of us who are not learned, he said that
“the proposals constitute a radical departure from the cornerstone of our legal system: the right of a party to know, and to challenge, his opponent’s case” ,
and:
“The Government's proposals in themselves constitute a significant reputational risk to our system of justice.” —[Official Report, House of Lords, 21 November 2012; Vol. 740, c. 1817-18.]
I was particularly struck that Lord Phillips of Worth Matravers, who was the first President of the Supreme Court, supported the Bill.
When I consider the balance of liberty, justice and security, I am always inclined to go for liberty and justice, but it would be difficult for me to oppose the Bill as presented. I hope the Government will look extremely sympathetically at the amendments that have been made.
My right hon. and learned Friend the Minister without Portfolio said specifically that he did not expect any serious discussion about the principle behind the Bill. I was conscious of that when the hon. Member for Aberavon (Dr Francis) seemed to confess, if I understood him correctly, that his Committee thought it would be futile to stop the Bill, so it sought to make the best of it.
There seems to be enormous momentum behind the Bill, but no particular enthusiasm to carry it through. Why is there this sense of futility about what is a cornerstone of our judicial system? My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) mentioned some of the instances that show that the state is not always to be trusted, so it is important that we ask ourselves why the particular set of circumstances under discussion should drive us forward.
There are two issues to consider. First, the highest principle of government today seems to be expediency rather than ultimate values. Secondly, security is the highest aim. We have come a very long way indeed since the time when a British Prime Minister might have said that necessity is the plea for every infringement of human liberty—I expect that colleagues will know the rest of that. Indeed, in the face of a Bill such as this and the lukewarm support it has received, those of us who think that liberty and justice are our best form of security have very little to add.
Finally—I will finish early—we should not be surprised if those outside the House who share my view that liberty and justice matter so much are extremely concerned. If we put this measure in the context of the draft Communications Data Bill, the Government’s plans to reduce access to judicial review and, indeed, measures for general anti-avoidance rules for taxation, we see that there is a significant rebalancing of power towards the state—and towards the administrative state at that. It is a disturbing path, but we seem unable to escape it. I hope that the Government will consider the amendments extremely carefully and that we will end up with a Bill in which we can take at least some pride.
Mr George Howarth (Knowsley) (Lab)
It is a pleasure to follow the hon. Member for Wycombe (Steve Baker), who set out neatly and succinctly the competing principles that we are dealing with, particularly with regard to clause 2.
I speak as someone who has had the privilege of sitting on the Intelligence and Security Committee since 2005. Without trying to amplify my own influence, that nevertheless gives me a certain insight into the matters under discussion. I will say a brief word about part 1 and then rather more about part 2.
As a member of the Intelligence and Security Committee, I welcome part 1 pretty much without reservation. Two issues have still not been fully addressed, but I think they can be resolved in Committee. The first relates to the oversight of operations, particularly when they are ongoing. We have had oversight of ongoing operations on occasion, and that ability, with the co-operation of the agencies, has been quite important. That issue has not been fully resolved in the Bill. I hope that it will be resolved through further amendments or the proposed memorandum of understanding, but we are not quite there yet.
Paul Goggins
Does my right hon. Friend agree that it is very important that the Bill does not prevent the Intelligence and Security Committee from undertaking the tasks and inquiries that it currently carries out?
Mr Howarth
My right hon. Friend’s assertion is right. I do not think it is anybody’s intention that that should happen, but we have concerns that the current wording might lead to that inadvertently.
The second issue, which has been referred to by several hon. Members and initially by the Chairman of the ISC, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), relates to the resources that it will take for the Committee to do the job that is envisaged in the Bill. I do not want to labour the point, but we are being asked to do a great deal more. I think that it is right to extend what we, as the representatives of this House in such matters, can do, but it will take more resources. As others have said, the secretariat of the Committee is working exceptionally long hours, often without any additional remuneration. People cannot be expected to do that indefinitely, especially when the amount of work that they have to do is increasing. I hope that the staffing issue can be put to bed before the Bill gets much further.
Dr Julian Lewis
In support of what the right hon. Gentleman, who is also my friend, has just said, the House should bear it in mind that it is not just a quantitative increase in resources that is required. If that increase is forthcoming, there will be a qualitative change because, as the Chairman of the ISC pointed out, the new people will act like investigators, going into the agencies and thus giving a realistic prospect of seriously close scrutiny.
Mr Howarth
The hon. Gentleman is correct and I am glad that he has added to what I have said.
I will address my remarks on part 2 to closed material proceedings. Usually, if I find myself in agreement with the Minister without Portfolio and the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) on these matters, it means that I am in the wrong and I change my position. They tend to be far more liberal than me on these matters.
Mr Howarth
Indeed. However, I am reassured by the unholy alliance that has been formed between my hon. Friend the Member for Islington North (Jeremy Corbyn) and the right hon. Member for Haltemprice and Howden (Mr Davis). That has made me feel a little more secure about the extent to which I agree with those other Members. I rather think that I have brought on an intervention with that remark.
Jeremy Corbyn
An intervention has indeed been brought on. Will my right hon. Friend concede that during all the time we have been in Parliament, we have always disagreed on anti-terrorism laws? I continue with my position, because I believe in the power of the courts rather than in secrecy.
Mr Howarth
I am grateful to my hon. Friend. In fact, we have almost never agreed on anything, and as far as I am concerned, long may that continue.
I shall try to make it clear where I stand and what I think happened as the Bill progressed through the other place. I start with a proposition that almost everybody would agree with—perhaps everybody other than my hon. Friend. It is that the state has to be able to hold secrets. That is not a desirable state of affairs, but the reality of relationships around the world and the problems that we face even within our own country are such that the state sometimes has information that should remain uniquely its property.
If that is the case, the question arises of what should happen in court proceedings. Closed material proceedings relate to civil cases. I do not know whether anybody other than me, sad as I am, has read the history of the agencies involved, but this is not a new phenomenon. As far back as world war one, some cases simply did not go to court because the agencies concerned did not want their networks, individual agents and practices exposed in a court of law. That is not new. What is new is that we now have cases exported from abroad, as it were, and heard in our courts for civil reasons.
The right hon. Member for Haltemprice and Howden came to the debate, said a few words and went—he does not seem to have listened to anybody else’s argument, but that is a matter for him. He made two fundamental mistakes, and I will deal with them in turn. First, he gave an example of what must have been a Special Immigration Appeals Commission case in which a special advocate had been used and the case had been overturned as a result of his being privy to certain information. The right hon. Gentleman prayed that in aid as an argument against special advocates, but as far as I could tell it was an argument in exactly the opposite direction. His point was flawed in that respect.
Secondly, the right hon. Gentleman seemed to misunderstand the control principle. It means that when agencies representing two nations share information, the originator of that information has control over what happens to it when it is shared. He cited the Binyam Mohamed case and was right that some of the evidence that emerged in a British civil court had previously been heard in a court of the United States’ jurisdiction. However, that does not alter the principle. The fact that that information could have been found by other means does not mean that the originator of the intelligence does not still own it. The problem was a breach of principle rather than the actual information that came out in the British court.
I echo what several Members have already said: I and many others have reason to know that there have been cases in which lives in this country have been saved because of shared information. To be blunt, if we cannot continue to share information with our counterparts, particularly in America, but not exclusively, lives will be lost. That is the tough, blunt reality of the choice that we have to make. I have no doubt that the balance of the argument lies with a system that many people say, from pure legal principles, is imperfect, but it is the best system that anyone has been able come up with to deal with the problem. I have no difficulty in supporting part 2, and I have no difficulty in supporting Second Reading if there is a Division.
Finally, we have to make a choice on closed material proceedings—the hon. Member for New Forest East (Dr Lewis) made a point about that in an intervention. We also have to make a choice about whether it is better not to defend civil cases because we know from the arguments that PII will not resolve the issue; it just means that nothing will be heard. Do we not defend those civil actions, many of which are probably founded on dubious grounds, and carry on paying out millions of pounds in compensation, even in cases where we know that the person concerned had bad intent to this country and its citizens? I think I know what my constituents think about that issue. I know where I stand: the answer is no, we should not carry on spending that money for that purpose.
Mr Andrew Tyrie (Chichester) (Con)
It has been an interesting debate, full of thoughtful interventions, and I have learned quite a bit.
I should like to make three initial points. First, I strongly support the work of the security services, which is essential for our safety. My concerns about the Bill need to be seen in that context. Secondly, I shall refer to the origins of the Bill, and thirdly, I shall deal with what might be at stake, even though we shall discuss it only to some extent this afternoon.
The Bill came about partly as a consequence of the recent exposure of Britain’s involvement in a programme of extraordinary rendition. Bringing all that into the public domain is a matter of deep concern to the Americans, particularly their security agencies. They are worried that our court proceedings could lead to the exposure of intelligence information handed to them by us. The Bill is a consequence, as we have just heard, of the cost and embarrassment of settling a number of civil actions brought by people who have alleged maltreatment. To deal with the first problem, the proposal is to close down the so-called Norwich Pharmacal jurisdiction and, to deal with the second problem, the Government have decided to replace public interest immunity certificates with closed material procedures in most national security cases. I shall come on to the case for those proposals in a moment.
I should like to discuss briefly what is at stake in a broader perspective. All these issues may appear to be abstruse and technical, but they are about the kind of society that we want to live in. It is worth saying a little more about the trigger for the Bill—the issue of extraordinary rendition. We now know that Britain facilitated extraordinary rendition—we do not know its extent—and the Bill may make it more difficult to find out the degree of Britain’s complicity. Senior British public officials have facilitated the kidnapping of people and their transfer to places where our Government knew they might be maltreated or tortured. Last week, Britain paid £2.2 million in compensation to someone who was apparently rendered—and tortured—along with his family, to the Gaddafi regime by British intelligence in 2004. Britain also facilitated the rendition of Binyam Mohamed to Morocco, and apparently he, too, was horrifically tortured. There are other cases, possibly many more: we do not know.
If we do not get to the bottom of our complicity in such disgusting practices, we surrender the moral high ground. We must be wary about extending secret court proceedings for the same reason. Secret courts are usually held to be the tools of dictators, not of democracies, and their prevalence is often a test of whether a society can be called “free”. I am deeply saddened that my country has become involved in kidnap and torture, and I do not want it to be accused—rightly or wrongly—of covering up such things. That, however, is exactly what Britain’s detractors abroad might claim—fairly or unfairly—about this Bill.
Dr Julian Lewis
I appreciate the serious point about getting to the bottom of a given rendition. Does my hon. Friend agree that if we are left with only PII, pay-offs will tend to be given and we will not get to the bottom of cases? However, if a pay-off is made when closed material procedure could have been used, one can deduce that something was amiss because although the Government could have used a more specific route, they chose not to do so.
Mr Tyrie
My hon. Friend makes an interesting point. The judge now has discretion on CMPs—at least, I hope that is where we will end up as a result of efforts in the other place—so we could arrive at a position where we have more justice and not less, which is the underlying principle we are discussing. With respect to Norwich Pharmacal, the case is unarguable. We would know less about rendition had the Norwich Pharmacal jurisdiction been closed down, because it was used to elicit information about the extent of Britain’s involvement.
The Government have argued that CMPs could deliver more justice because they will be able to introduce evidence that they cannot introduce at the moment for fear it will damage national security. How true is that? I do not know—very few Members present in the Chamber do. The special advocates, security-vetted lawyers who are responsible for making CMPs work, are the small group of people with access to the information required to know the answer. They have been unequivocal—the right hon. Member for Knowsley (Mr Howarth) quoted them a moment ago. They say that CMPs are not
“capable of delivering procedural fairness”
and that their introduction
“could only be justified by the most compelling reasons and, in our view, none exists.”
It is worth reading the report by the special advocates in full as it is pretty blistering.
I am grateful to the Minister, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), for returning to the Chamber, as he also said that PII was deeply flawed. It is certainly not perfect but, again, the special advocates have expressed a view and said that
“there is as yet no example of a civil claim involving national security that has proved untriable using PII and the flexible use of ancillary procedures (such as confidentiality rings and “in private” hearings from which the public, but not the parties, are excluded).”
Stephen Phillips (Sleaford and North Hykeham) (Con)
That statement may be accurate in so far as it goes, but one case—the Carnduff case—was stayed because it could not be properly tried, albeit that it was not directly in the national security arena. The Supreme Court has said that the principle exists, in which case there will be cases where there is no trial at all unless we use CMPs. Surely my hon. Friend will agree that it is better to go down that route than to have the possibility of no trial for very serious cases.
Mr Tyrie
I agree that a CMP could be of use in some cases. My point is that the special advocates, who are well placed to judge, have looked at the proposals and said that, so far, they have seen no cases in which PII could not do the job.
A cynic would argue that the special advocates have an interest in arguing for more legal work and more CMPs, but it is significant that they have spoken in the opposite direction—against the extension of CMPs. Their lordships shared the concerns of the special advocates, and by majorities or more than 100, shredded that part of the Bill.
The Lords amendments included two crucial safeguards that I consider to be essential. The first, which we have discussed, is that they gave the judge rather than the Minister discretion on whether to hold a CMP. The original Bill clearly gave the lion’s share of that discretion to the Minister, and it is not true, as the Minister said a moment ago, that he gave up that position “months ago”. If he gave it up “months ago”, why on earth did their lordships debate replacing the word “must” with the word “may” only a fortnight ago?
The second crucial Lords amendment was a measure—clause 6(6)—to ensure that a judge should be able to exhaust PII in his search for justice before considering CMPs. Unfortunately, my right hon. and learned Friend the Minister did not say that he would accept it. On the contrary, he used a number of phrases to suggest that he would do no more than consider it, and that he had not yet finished his consideration. I regret that and the fact that we are discussing the Bill so quickly. It needs further consideration and I agree with him on that. The debate should have taken place in January. That it is being rushed through just before Christmas adds to my concerns.
A third safeguard would be valuable. A review should be held after a period to see whether CMPs have led to more rather than less justice. To ensure that the review happens properly, it should be accompanied by a sunset clause—in perhaps seven, eight or 10 years. That proposal was a recommendation of the Joint Committee on Human Rights, the Chairman of which is not in the Chamber at the moment. I would like it included in the Bill.
Having said that, my concluding thought is this: we should remain deeply sceptical of the utility of holding a hearing in which one party is shut out of the case. This is what the former Director of Public Prosecutions has to say on that—I shall quote it in full, because it is so forceful. He said:
“I have spent many years in criminal courts watching evidence that at first sight seemed persuasive, truthful and accurate disintegrating under cross-examination conducted upon the instructions of one of the parties…That is the risk that we are facing, that we are introducing into civil justice—in the most sensitive and controversial cases, where deeply serious allegations are made against the Government and the security services—a process that expels the claimant and gives him a form of justice that is not better than nothing. It is worse than nothing because it may be justice that is based on entirely misleading evidence.”.—[Official Report, House of Lords, 21 November 2012; Vol. 740, c. 1989-1900.]
I accept that, in some very restricted circumstances, one can conceive of more justice being achieved with a CMP than without one, but I am clear in my mind that that must come only after all other existing routes to try to obtain justice, including PII, have been exhausted. The Minister has not accepted clause 6(6) as amended by the other place. For that reason, above all, I cannot accept the Bill.
Jeremy Corbyn (Islington North) (Lab)
It is a pleasure to follow the hon. Member for Chichester (Mr Tyrie). I want to put on record my thanks to, and admiration for, him for forming the all-party group on extraordinary rendition and his work on exposing the awfulness of extraordinary rendition and how many Governments, either willingly or unwillingly, were deceived into allowing it to take place through their jurisdictions. The House owes him a debt of gratitude for that.
The hon. Gentleman is also right about the speed with which we are considering the Bill. I suspect we will return to major human rights issues in the near future. The Commission on a Bill of Rights has just published its report, which makes excellent reading. I urge all parliamentarians who see their role as protecting civil liberties in our society to read the authoritative essay in the report by Baroness Helena Kennedy and Phillipe Sands QC. They make the point of building on the past rather than destroying the march towards an open society in which we have genuinely independent judicial systems.
I want the House to consider the Bill—particularly in Committee when we come to reform it—in the context of the power of the secret state: the very large power held by the security services in our society and how, in every western state, they have grown enormously since 2001 and the declaration of the war on terror.
Guantanamo Bay is a product of that thinking. It is a most evil institution that has treated people abominably, denied them any right to justice or proper access to judicial process, and tortured them and kept them there for many years. Our country took part in the extraordinary rendition of people from Afghanistan to Guantanamo Bay. Indeed, rendition even took place through Diego Garcia, which is part of the British Indian Ocean Territory, by the use of the US base there.
Political opportunism led us from being an enemy of Colonel Gaddafi to being a friend of Colonel Gaddafi then an arms supplier to Colonel Gaddafi. We were apparently so involved in his operations that our security services were prepared to hijack one of his enemies from another jurisdiction and take him back to Libya, where he was subsequently tortured by Gaddafi’s henchmen. That information was uncovered only in the chaos and rubble of Tripoli. So far £2.2 million has been paid in compensation, which I assume avoids the embarrassment of an open court case with Sami al-Saadi. As my right hon. Friend the Member for Blackburn (Mr Straw) pointed out, the Belhaj case is still pending and cannot be discussed. There is a lesson here about our easy acceptance of the power of the secret state and the security services, which has led us to this appalling situation where that amount of money has to be paid because of clear transgressions of the rights and justice of an individual who was standing up for the society he believed in—something that we claim to want all around the world.
The Bill deals with two or three issues that I want to cover briefly in the short time available, the first of which is parliamentary oversight. When I first came into the House in 1983, there was no parliamentary oversight of security services at all. It was an article of faith in the Labour party at that time—my right hon. Friend the Member for Knowsley (Mr Howarth) and I may agree on this particular point—that there should have been some parliamentary oversight of the security services. There we have it—agreement on this occasion.
Mr George Howarth
I would not want my hon. Friend to take this too far, though.
Jeremy Corbyn
I am very cautious about claiming agreement and support at any stage, but I thank my right hon. Friend for that. I am sure that he would acknowledge that, despite the demand for parliamentary oversight and the subsequent considerable reforms of the House of Commons—achieved mainly by the former hon. Member for Cannock Chase Tony Wright—where we now have elected Select Committees and a much greater sense of openness in our business, the Intelligence and Security Committee seems to have avoided the reform process altogether. It is the only Select Committee where its members are appointed by the Prime Minister, in consultation with the Leader of the Opposition, and where the Chair is elected by the Committee rather than by a vote by party caucuses of the whole House. Its reports are published, yes, but one wonders how much is told to our colleagues on the Committee. I have no great ambitions or expectations of being appointed to it, but in an elected process all kinds of things could happen. Patronage is one of the great traditions of the British Parliament. It creates the illusion that the security services are accountable. I would have hoped that the Committee would have given the security services an extremely hard time over Sami al-Saadi, in whose case the British security services were clearly involved, over Guantanamo Bay, over Diego Garcia and over many other issues.
The second point I want to raise concerns the process that has led us to this pass of having a degree of secrecy in our courts. I opposed the establishment of the Special Immigration Appeals courts because they were anathema to everything we believe in: a special judge alone has access to the evidence; the defendant has no access to it; the defendant’s barrister has no access to evidence that he can share with his client; only the prosecutor has access to it. The whole issue is stacked against the defendant, and therein lies the potential for the most massive miscarriages of justice. Those of us who have spent much of our lives campaigning against miscarriages of justice will be well aware of past secrecy and the need for openness.
In opening, the Minister without Portfolio made much of the fact that the closed material procedure would be decided by a judge. Clause 6(2) states that
“a party to the proceedings (whether or not the Secretary of State) would be required to disclose material in the course of the proceedings to another person (whether or not another party to the proceedings)”,
where
“the degree of harm to the interests of national security if the material is disclosed would be likely to outweigh the public interest in the fair and open administration of justice, and”
where
“a fair determination of the proceedings is not possible by any other means.”
It seems to me that the Secretary of State would have considerable power in that situation.
I hope that the House understands the depth of feeling among many eminent people outside the House who have spent their lives campaigning for justice—against all the odds—and sometimes achieved it. Those who campaigned on Hillsborough eventually achieved justice, as did those who campaigned for the Birmingham Six and the Guildford Four. I do not want us to create yet another situation in which future miscarriages of justice can take place.
John McDonnell (Hayes and Harlington) (Lab)
Like me, my hon. Friend was here when the Special Immigration Appeals Commission procedures were introduced, about which we expressed some concern. He has referred to cases about which concerns have been expressed. Would he also like to comment on clause 12 with regard to SIAC? The case of (AHK and Ors) v. Secretary of State, which concerned a refusal of British citizenships on grounds of character, summed up what can go wrong in these procedures. Justice Ouseley said that
“he has been told nothing other than that naturalisation has been refused on the grounds of character and that it would be contrary to the public interest to give reasons.”
He continued:
“It is not so much that the case is untriable…it is simply that the evidence means that the Claimant cannot win.”
Jeremy Corbyn
Having dealt with cases of constituents who have been refused naturalisation or British nationality on the basis of evidence that is unavailable, I understand exactly my hon. Friend’s point and the point made by Judge Ouseley.
In its briefing on the Bill, Reprieve told us:
“The Bill, even as amended, would still mean that…Members of the public could lose their cases against the state without ever knowing why; or knowing what evidence was used against them”,
It also states that the
“Government would be able to cover up evidence of wrongdoing”,
and that
“Ministers and officials would be able to exclude the other side from court, effectively putting themselves beyond challenge and above the law.”
The Bill would allow Ministers to use secret courts in a wide range of cases, such as those of soldiers or their families bringing negligence claims against the Ministry of Defence over faulty equipment resulting in injury or death. Many colleagues have taken up cases of soldiers who have died in the most tragic circumstances and where, on the face of it, there is a case against the Government. It could also include victims of torture or rendition seeking redress in cases in which the Government have been involved and actions brought against the Government over corruption in arms deals, which was a point I raised with the Minister earlier.
Amnesty International has also expressed deep concern about the Bill. It is concerned that the move
“could potentially mean that individuals and their lawyers who are seeking to establish the extent of the involvement of UK officials in serious wrongdoing such as torture and enforced disappearances, will be prevented from seeing crucial documents on “national security” grounds. This secrecy could be maintained potentially indefinitely, even if there is an overwhelming public interest in disclosure.”
I appeal to the House to think carefully and seriously about what we are discussing and voting on here today.
A couple of months ago, I was in the High Court to hear the case being brought by the Mau Mau people from Kenya relating to the abominable way in which they had been tortured and ill-treated by the British armed forces in the 1950s. They finally won their case and were able to present their evidence to the court. That evidence had been hidden for 40 years. They had been denied access to it, and it was only their determination that brought it to light. It had been held using secrecy arguments, and I suspect that if legislation such as this had already been in operation, they would still not have been able to bring their case to court.
Before voting on the Bill, we must think seriously about the implications of creating an even stronger secret state and an even less accountable judicial system. We must also remember that our function as Members of Parliament is to represent people against power, so that they can get justice through an independent judicial system.
Stephen Phillips (Sleaford and North Hykeham) (Con)
It is a real pleasure to follow the hon. Member for Islington North (Jeremy Corbyn), who speaks consistently on this and other civil rights issues, even if he does not often agree with the right hon. Member for Knowsley (Mr Howarth). I suspect that, on this occasion, he is also unlikely to agree with me.
I have to confess that I hesitated before deciding to speak in this Second Reading debate, partly because I see a Bill Committee looming and the prospect of 12 days in the spring with the hon. Member for Hammersmith (Mr Slaughter) is not particularly attractive to any of us, and partly because consensus seems to be emerging among the majority of Members that, unsatisfactory though the Bill might be, it is none the less a necessary measure.
There is little disagreement on the first part of the Bill, which will establish a regime for the oversight of the intelligence services that has long been called for. That is much to be welcomed. It is the second part of the Bill, which deals with the closed material proceedings—wrongly, in my view, called secret courts—that appears to cause controversy. I shall focus my remarks on that part of the Bill, although not at length as consensus is emerging and many of the points that I wanted to raise have already been discussed. The right hon. Member for Salford and Eccles (Hazel Blears), for example, identified many of the arguments that I would deploy in support of the Bill being given a Second Reading.
Many lawyers, myself included, regard the Bill as at best undesirable and possibly pernicious. The obvious reason for that is that the principle that has served us well for many years is that we do justice publicly. We also permit full access to the evidence for those against whom allegations are made—whether serious or not; in these cases, they usually are—and for those who make those allegations, in order that a fair adjudication can be openly and publicly be made of their complaint and of what has been said against the accused.
The Government need to persuade those who have expressed concerns that the mischief against which the Bill is said to be directed is so serious that, in the limited number of cases to which closed material proceedings would apply, we need to take a fundamentally different approach from the one that has traditionally applied to the administration of public justice. The Government have identified four problems, although they have not always been clearly articulated. It is worth identifying them, for the sake of those such as my hon. Friend the Member for Chichester (Mr Tyrie) who are troubled by the Bill, in order for me to explain why I think the Bill should be given a Second Reading.
The first is the continued necessity in the security climate in which we the United Kingdom and, indeed, the western world find ourselves to have access to very good intelligence material—material gathered not only from our sources and by our own agencies, but by the agencies and sources that are available to our allies overseas. The difficulty the Government face as regards those agencies capable of providing us with information that is essential for the defence and security of this country is that when something is secret and comes from a foreign intelligence agency and potentially a source of that intelligence agency that might be exposed or, if it is a live source, even threatened, the Government need to be able to give an absolute assurance that that material will remain closed and will remain secret. Without that assurance—this applies not only to the United States but to other intelligence agencies, too—the Government face real difficulties in ensuring that the intelligence necessary to protect all our constituents will be available in this country.
There is, of course, a related point—that the intelligence services here need to be able to recruit their own agents and need to be able to assure those agents from the very first that their identity and anything connected to anything that might reveal their identity will remain secret. That is the first issue that calls to be dealt with, and it supports the Government’s position on part 2.
The second problem, as I see it, is that undoubtedly in the past the Government—perhaps not only this Government but the preceding one—have been obliged to settle cases where they had legitimate defences to the accusations that were made against them, but in respect of which they felt, for the reasons I have already given, that those defences could not properly be advanced, usually for the simple reason that it would expose intelligence sources and, potentially, the way in which intelligence is gathered.
Those settlements are wrong for two reasons. First, there is never any adjudication whatever of the underlying merits of the case, and from the perspective of justice as a whole—and, I might add, from the perspective of claimants as well as that of the Government—that is totally unsatisfactory. Secondly, because the Government have been obliged to settle these cases—a point touched on by the right hon. Member for Salford and Eccles—large sums of taxpayers’ money have had to be paid out. In many cases, they might have been lost by the Government and perhaps the damages were justified, but we do not know where the money has gone in other cases and we do not know, for example, that it has not gone to fund activities that are, putting them at their very lowest, detrimental to the interests of this country. That is the second reason why the Bill, and particularly part 2, is deserving of a Second Reading.
There is a related third point—the reputational risk to this country. These cases are settled, albeit with no admission of liability, in circumstances where, as was said earlier, much of the world will say that there is no smoke without fire. People might say that the British Government would not settle these cases unless there was some truth in the allegations, which does this country enormous damage overseas. It also runs the risk—I say this particularly to my hon. Friend the Member for Chichester—of encouraging those who would see this country damaged by radicalising young Muslim men overseas who will believe that this country has no respect for the rights it is trying to push on the Islamic world.
Stephen Phillips
I accept my hon. Friend’s point, but for my own part I do not think the risk is nearly as great, and I would go further than that. If we carry on calling CMPs “secret courts”, there might be that risk, but we are not talking about secret courts. We are talking about courts in which defendants and claimants are properly represented, where there is access to the information necessary to ensure as fair a resolution of the issues between the parties as possible and, indeed, where the proceedings are overseen by a judge. I shall come back to this in a moment, but the alternative in many of these cases is, as I said in an intervention on my hon. Friend, that there is no justice at all—either because they are struck out or because the Government have to settle them. That is totally unsatisfactory—much more so than the Government’s proposals in the Bill. I think it was the Independent Reviewer of Terrorism Legislation who said that we were in the world of second-best solutions, and indeed we are. No one wishes to see this legislation. I myself have described it as at best undesirable, and possibly pernicious. However, we are where we are. We face the threats that we face, and we have to deal with them.
My fourth reason for thinking that the Bill deserves a Second Reading is that, at present, justice is not done at all in many cases of this kind. As I said earlier, the Government, because they cannot disclose information, are obliged to settle some cases when a perfectly good defence is available to the security services. There are, potentially, other cases—and at least one, which I mentioned earlier, may have already arisen—in which a claimant has a legitimate cause of action which may or may not be capable of being sustained at trial, but owing to the success of a public interest immunity application, information that would otherwise have enabled the issues between the parties to be properly resolved is not available.
In a third group of cases, such as the Carnduff case, there is the possibility of a stay if the public interest immunity application fails, and those are the cases that trouble me particularly. Claimants are essentially being told, “You may have a perfectly good cause of action, but the public interest of protecting national security outweighs the public interest of doing justice in your case.” That seems to me much more undesirable than saying to a claimant, “You may press ahead, but part of the proceedings will take place in a forum that is no longer open to the public.”
The Bill may indeed be a second-best or an undesirable solution, and part 2, at least, may even constitute a pernicious piece of legislation. However, for the four reasons that I have given, I approve of the principle behind it. I believe that that principle has been generally accepted throughout this House, and was finally accepted by their lordships, subject to the amendments that they made. It is a principle from which I do not believe parliamentarians can legitimately distance themselves. It is the principle that we need to be here to protect our constituents, and it is the principle that no matter how unsatisfactory the Bill is, it is the right Bill, and, regrettably, a necessary measure.
Mark Durkan (Foyle) (SDLP)
Other Members have observed that there seems to be consensus on part 1 of the Bill, but I may be more of a doubting Thomas in that respect. I am not sure that part 1 will do all that it promises to do for the Intelligence and Security Committee, the House or the Bill itself.
I do not, of course, speak with experience of membership of the ISC, although I was offered membership a number of years ago, in bizarre circumstances. In fact, at one point my party was offered two seats on it, which seems bizarre even now. At that time we were negotiating the St Andrews agreement, and Tony Blair got it into his head that I might be prepared to accept annex E—which re-routed some of the Patten provisions relating to intelligence and national security—if I was offered a place on the ISC.
Hours later, I was advised that two places were on offer. I had said that it would be very difficult for a member of my party to sit on the Committee, supposedly to offer scrutiny and challenge, while being unable to tell anyone that he or she had done so or to say anything about it. The consolation was that we would have two members there, each of whom would vouch for the other in our secrecy. It was a bit like King Louie in “The Jungle Book”: “Have a banana; have two bananas.”
Members have said that the Bill is a significant advance on existing law, but I am not sure whether it is adequate or truly accountable. Part 2, obviously, has raised the more substantial issues and differences. I am at a bit of a loss, because I hear differing and confusing arguments. I hear those who commend part 2 saying that closed material procedures are not a particularly big departure because they are already used in cases of various types, and that the Bill merely codifies them in a particular area. I also hear the argument that PII is no good, that it cannot be used, that it stops cases being defended and that by its very nature it means that evidence cannot be brought. The reality is that PII can be dealt with on an evidence-by-evidence basis, and does not have to be done entirely wholesale. We have seen where it has worked in the past when the courts have granted immunity in relation to certain material, evidence and witnesses. They have protected their anonymity and secrecy and have protected material from being disclosed altogether. In other cases, they have protected material by due and measured redaction. The idea that PII is basically just a one-size-fits-all option is nonsense, as it can be used in a measured way.
I feel almost as though I am involved in some sort of closed material proceedings, because everyone else seems to be aware of why certain cases were settled as quickly as they were. I do not know why the al-Rawi case was settled in the way that it was. It had not even gone to the Supreme Court once appeal was allowed, yet settlement took place. Was it so compelling that the state had no other choice? Was there no way of having more measured terms? I do not know, but other people seem to. They seem to have been briefed and perhaps they are privy to such things, but I certainly am not and as a legislator I am not prepared to pass serious, significant legislation on spec based on somebody else’s hunch that the state would not have settled if it did not really have to.
I come from a part of the world where the state has done many things and failed to do many things. People attributed all sorts of reasons and pure motives to it, saying, “They wouldn’t have done that if they didn’t have to.” We know from last week’s revelations that that logic absolutely stinks. One of the worst things was that all down the years, when such things were happening, they were not sufficiently challenged by enough people in this Chamber and in other places.
When we receive such legislation, we must question it and ask what the compelling reason for it is. We must also look to those who know something about such things. Lord Justice Kerr has been widely quoted today on the subject of closed material proceedings, but he was not the only one to make significant statements in the al-Rawi judgment. Lord Dyson, giving the lead judgment, said that the introduction of closed proceedings in ordinary civil claims would involve
“an inroad into a fundamental common law right.”
He went on to say:
“The PII process is not perfect, but it works well enough. In some cases, it is cumbersome and costly to operate, but a closed material procedure would be no less so.”
Other hon. Members have quoted Lord Kerr’s concluding judgment. An additional point he made was:
“This would not be a development of the common law”
as the Government
“would have it. It would be, at a stroke, the deliberate forfeiture of a fundamental right which…has been established for more than three centuries.”
In those circumstances, I do not think that we should lightly pass the Bill on the basis that the other place has made a few amendments that make it good enough.
John McDonnell
The point has been made throughout the debate—I have not heard it all as I have been in a Westminster Hall debate—that in a piece of legislation that is actually flawed, we must ask whether the balance of interest lies in protecting the state or the individual. Clearly, the Bill protects the state rather than the individual.
Mark Durkan
That is exactly the nature of the Bill. It is a measure to ensure that the state will be protected in various litigations and that it will have an absolutely unequal power to use a procedure that will frustrate a case against it using a special secret procedure.
We are told—I have listened to other hon. Members say it—that the amendment to clause 6 in the other place that changed “must” to “may” now means that the proceedings are entirely a matter of judicial discretion and that we should therefore trust the courts. Of course, however, that is only in relation to clause 6. Once the national security case has been engaged by a judge under clause 6, clause 7 means that what happens is entirely in the hands of the state. That joker is played by the state and cannot be predicted. PII means that a judge can be selective and can scrutinise what evidence might compromise national security and what should or should not be admitted in balancing the interests of hearing the case and protecting national security, but that will no longer be the case. We are being sold a false argument about just how big a difference there is because of the change from “must” to “may”.
As well as listening to learned judges who have considered the matter, we should look to those who also have experience of closed material proceedings and such legislation—the special advocates. The Minister without Portfolio told us, in effect, that special advocates underestimate their own power—they do rather well under such provisions and have quite a good score rate. Let us listen to what the special advocates and other observers say. The late Lord Chief Justice, Lord Bingham, described the role of a special advocate as akin to
“taking blind shots at a hidden target”.
Special advocates themselves have described it as “shadow boxing” in circumstances where
“you are speaking into a black hole because you have no idea if your strategy and points are on the money or wide of the mark”.
So special advocates are frustrated by their own professional standards. They must be particularly frustrated in relation to the interests and rights of their clients.
Remember, that is what we are talking about—people who have reason, good or ill, for taking a case against the state. If, in doing so, they are speaking of actions that have fundamentally affected their human rights, that have done damage or harm to them which in other circumstances and at the hands of someone else would be deemed to be illegal, that is serious. We should not treat the issue as a matter of administrative convenience. The argument should not be that it takes Ministers too long to decide whether they want to look for public interest immunity certificates in respect of all the different pieces of information, that it could take them a whole day to do so, and that we have to come up with something quicker, so we go for closed material proceedings. That is not the way in which we should legislate for justice to be done.
Others have quoted the Government’s independent reviewer of terrorism legislation, David Anderson. On one occasion he attended a session with representatives of the Government and of all three intelligence services and counsel. He was talked through seven significant cases and left with a bundle of top-secret material in each case, including evidence and internal and external advice, which he had taken the opportunity to read. Three of those seven cases were civil damages cases. His conclusion was that
“there is a small but indeterminate category of national security-related claims . . . for civil damages, in respect of which it is preferable that the option of a CMP . . . should exist”—
only preferable that the option of a CMP should exist, but the Bill goes down an almost compulsive route in relation to that and legislates too far.
There is the irony that the very procedure that the independent reviewer engaged in was a closed material procedure. He looked at files that were presented by Government. He listened to the representatives of the intelligence agencies and their legal advisers, and he formed an assessment with no other view being given from special advocates or anybody else, yet it is his advice and his conclusions that we are told we should listen to.
Simon Reevell (Dewsbury) (Con)
One of the least attractive things I have seen in 20-odd years practising at the Bar is lawyers trying to persuade a judge that he should deal with evidence in private because the evidence had the potential to embarrass the then Government. It did have that potential. Employees of the Ministry of Defence on oath were giving evidence that six months before the invasion of Iraq, they had been told not just that it was going to happen, but the day on which it would take place, and that the British Army had been told that it could not commence its training because it would give away the fact that a decision had been made. A properly robust judge sent them away and told them in no uncertain terms that the functions of the court do not include preserving the modesty of the Government.
So I come to the proposals, proposals that for years and years no one in the world of civil litigation ever dreamt or thought were necessary. Suddenly we encounter a different sort of civil litigation in which the body most concerned is the state. Allegations are made that the state has been complicit in kidnap and torture—we call it rendition, but rendition simply means kidnap and torture—and that drone strikes have killed innocent families, and suddenly the civil rules that have been good enough for as long as anyone can remember are no longer good enough and there needs to be secrecy. It is, at best, an unfortunate coincidence that the need for secrecy coincides with litigation in which the state finds itself at the very heart.
The effect of the proposals could be that a claimant who brings a case is suddenly and quite literally ushered out of court and told to take their lawyers with them. They will then have to sit and wait until they are invited to go back in, at which point they might be told, “Sorry, but you’ve lost.” The reason is that these proposals are not the same as PII, although there has been much talk of PII, and they are not simply a replacement for it.
The way litigation works means that parties to it must consider whether they possess material that might assist the other side. If they have such material but want to keep that secret, they can make a PII application. If they win they are allowed to keep that secret, and if they lose they have two options: they can hand the material over or they can settle the case. That is what PII is all about, but that is not what this proposal is about. This is about being able to use material aggressively against a case. It is about the state having material that it can use to defeat a claim and wanting to use it in secret.
At the moment, if the state wants to use that material it must do so in open court, but it is about the decision on how to fight the case; it is not about public interest immunity. That is why the Bill clearly goes through the PII phase before getting to the point where closed hearings are contemplated. For example, if I know something that might assist you when you sue me, Mr Deputy Speaker, I must either tell you or claim PII, but this proposal is about me wanting to use something against you to defeat your claim and you will never know what it is. You will not have the chance to question it, to say that it is not accurate or to say that it has been fabricated. You will know nothing about it. You will simply be told, “I’m sorry, but you’ve lost your case.”
When such a proposal is introduced on the back of litigation aimed at the state, making allegations of the worst sort of behaviour on the part of the state—I have referred already to kidnap, torture and killing—people are bound to be suspicious. Either it is just a coincidence, or someone somewhere wants to take on these claimants using information that no one will ever be able properly to test.
The House sat very quietly last week to listen to the Prime Minister deal with the report prepared in respect of Mr Finucane. He ended his observations by saying this:
“One thing this Government can do to help is to face up honestly when things have gone wrong in the past. If we as a country want to uphold democracy and the rule of law, we must be prepared to be judged by the highest standards.”—[Official Report, 12 December 2012; Vol. 555, c. 299.]
These proposals are not a very good start.
Mr Robert Buckland (South Swindon) (Con)
It is a pleasure to follow my hon. Friend, and professional colleague, the Member for Dewsbury (Simon Reevell). I accept with alacrity what he says on the differing functions of PII and closed material proceedings, but information will be dealt with in closed material proceedings that could equally support the claimant’s case, just as there will be information that might undermine it. That is why it is important to support the amendment made in the other place to allow not just the defendant, such as the Government, but other parties, including the claimant, to make an application for the use of closed material proceedings.
Like my hon. Friend, I have spent many years in the criminal courts. I have, I suppose, been dealing with human rights; that was my stock in trade as a barrister prior to my election to this place. We did not really use the words “human rights”; every day we did a job of dealing with the liberty of the individual and the power of the state when it came to imprisoning and dealing with individuals who may have committed criminal offences. It was my life, my bread and butter, and my stock in trade.
It is difficult for me to accept any departure from the principles of open justice. I never liked being confronted with public interest immunity applications, whether I made them on behalf of the Crown or in relation to third party disclosure, or whether I found out about them later because I was not party to the application. These principles do not sit well with me. However, I learned a long time ago that politics has to start from the world as we find it, not necessarily the world as we would like it to be. No matter how idealistic I may be and how important certain principles are to me and many other Members, the realities of international politics and security will often conflict with some of the principles that I hold so dear.
The scenario that the Bill seeks to deal with represents one such conflict. In an ever-changing world, one certainty endures. We have more and more information sharing and the world is ever more interconnected, so greater and greater challenges to our national security are posed every day. We also live in an age when decisions of the state itself are rightly called into question. As a result of those proper questions being asked, we are seeing a rise in civil litigation mounted against the state by individuals who claim grievance.
All those factors mean that a challenge has arisen. Given the information provided by the Government and my understanding of the situation, the problem is not going away any time soon—in fact, it is going to get worse. The Government cannot hide behind inactivity when looking at that challenge; only last week, we saw a further settlement of a civil claim, in this case by the Libyan dissident Mr al-Saadi. That is but the latest manifestation of an issue that is causing real concern not only to the Government and security services but to those who risk their lives for this country and to the public at large who are rightly worried that millions of pounds of their money—our money—is paid over for reasons to which they and we will never be privy in any real sense.
Simon Reevell
Does my hon. Friend accept that a good way to avoid having to make payouts to Libyan dissidents would be not to be involved in kidnapping them and shipping them and their families back to Libya to be tortured?
Mr Buckland
We do not know that, and that is the problem with the current system. I would accept my hon. Friend’s argument if we had a system in which such issues could be properly tried, or at least tried in some second-best scenario; I accept that closed material proceedings are very much a second best to the principles of open justice in which my hon. Friend and I believe. However, we will never know—we will never be privy to whether the British state infringed principles of justice and international convention when it came to unlawful rendition.
Sir Malcolm Rifkind
I reassure my hon. Friend that once the current police inquiries are complete, the intention of the Intelligence and Security Committee is to continue our investigation, which we had already started, of the allegations about United Kingdom complicity in Libyan rendition and to publish our conclusions to the extent that we can.
Mr Buckland
I am grateful to my right hon. and learned Friend, and commend him and his Committee for their work in that area. It is something that I would like to know more about, as would many people in this House and outside. Sadly, the Gibson inquiry had to be terminated, or postponed, because of ongoing criminal proceedings. I very much believe that wrongdoing should be exposed, but, as has been pointed out, in the case of this civil proceeding we do not, and will not, know the precise merits or otherwise of the claim that was made against the British Government.
Much has been made of the views of Mr David Anderson QC, the Government’s independent reviewer on terrorism. I will spare his blushes. It is absolutely right to say that he, like me, is very much a reluctant convert to the limited use of closed material proceedings in certain cases where national security is very much at the heart of the claim. He makes the very important point that in referrals made by Her Majesty’s Government, we must put our trust in our judiciary to come to fair and balanced decisions on the material before them and to apply fairness not only to the Government but to claimants, because these questions apply equally to both parties in any such case.
Their lordships’ amendment to clause 6 opens up the limited discretion in the clause as originally drafted. I welcome that. It is wrong to say that there was no discretion before, but it was limited. They have expanded that discretion by the use of the word “may”. It is a much wider discretion than many of us in criminal practice have got used to. For example, in the sort of discretion that sentencing judges have in dealing with mandatory minimum terms of imprisonment, the word used is very bald. “May” cannot put it any more simply. The amendment is very significant, and the fact that the Government have rightly accepted it eases many of the concerns that I and others had about the extent of the power of Ministers, in effect, to limit the court’s ability to disagree with a reference from Ministers.
That is the trigger, but it does not end there. The hon. Member for Foyle (Mark Durkan) said that a blanket then comes down on the use of closed material proceedings. I have great respect for him, but I do not think he is right. It is not a question of a blanket coming down, because the judge has a duty to look at each individual piece of evidence to determine whether it should be the subject of open proceedings or closed material proceedings. The judge will retain that important check and balance in looking at the evidence.
We need to put firmly to bed the notion that closed material proceedings are a silver bullet that will allow the Government always to be able to win—to successfully defend—these cases, because they most certainly are not. The recent decision by SIAC which had the effect of allowing the release of Abu Qatada is a notable example of that. CMPs were used in that case. The result was perhaps not popular in many quarters, but it is an example of the court being able to cope with the second-best solution and to reach an outcome that was, on a neutral interpretation, a fair one. CMPs can be a way for claimants to ensure that all the issues they want to see raised are properly considered by the court as part of the case.
Public interest immunity has been prayed in aid as a substitute for the process, but it is not; its function is different. PII relates to the extent and quality of disclosure, which occurs at a different stage from the fact-finding process itself. Material that is successfully subject to a PII certificate remains undisclosed to the party seeking it. There is no gisting or anything else. Redaction of documents may well happen, but that still means that the material sought by the party who wishes to see it remains undisclosed. PII has a practical effect, whether it is on the continuation of a prosecution in a criminal context or, as in this context, the continuation of a defence in a civil case. The choice for those at the receiving end is either to disclose the material or to stop the case. That means, as we have already discussed, that cases in which genuine allegations of wrongdoing are made will never properly be dealt with by the court. It is the justice gap that has been spoken about not just in this place but by eminent Members of the other place, most notably Lord Woolf, Lord Mackay and Lady Manningham-Buller, who all support the use of closed material proceedings in restricted circumstances.
As other Members have said, there is nothing groundbreaking about the use of closed material proceedings in English law. They have been used for some years, in both SIAC and the regime of terrorism prevention and investigation measures, and in a way, as I have said, that cannot be regarded as resulting in manifest unfairness or injustice.
I would welcome clear and continued assurances from Ministers that, if future consideration is ever given to further extending the use of closed material procedures to other areas of law, it is this House that will deal with the issue and that there will be strong grounds to justify any further extension before we allow it to happen.
We live in an imperfect world. It is a troubled world where sometimes grim reality invades noble principle. This Bill is an exemplar of that, which is why I support its Second Reading.
Mike Crockart (Edinburgh West) (LD)
I am very pleased, as a former member of the Joint Committee on Human Rights, to have the opportunity to speak in this debate. Importantly, I was a member when its report on the Bill was written and published. We spent a large amount of time examining the Bill, which was a difficult thing to do as a non-lawyer, but it has been a worthwhile, though arduous, journey from the first time I asked what Norwich Pharmacal actually meant.
When the original justice and security Green Paper was introduced in October 2011, there was understandable and justifiable concern about the proposals. In their original form, it was clear that they were very broad in scope, and some in the Government talked up the need for the powers through rather apocalyptic speeches about the danger to national security—a danger that, once examined, clearly did not exist. There was, as has been said, a perception of a danger to national security—there is one that needs to be dealt with in relation to Norwich Pharmacal—but an actual danger did not exist.
Since then, it is welcome that the Minister without Portfolio has issued many reassurances about the intended narrowness of the Green Paper’s application. It is unfortunate that, whether as a result of lax drafting or conflicting views within the Department, the circumstances allowed confusion to develop about what the Government’s intentions were for closed material procedures.
It is clear that there is a theoretical need for change. One can imagine a situation—many such situations have been mentioned today—in which a fair trial of a civil claim cannot proceed because of the amount of material that cannot be disclosed on the grounds of public interest immunity. It has, however, been exceptionally difficult, even with access to many interested and experienced witnesses, to establish the likelihood of such a theoretical possibility actually materialising. The Bill is undoubtedly an extremely complex and difficult balancing act, but the judgment that must be made requires us to understand whether a problem exists and, if so, its scale, and whether this response is proportionate to the problem.
The Joint Committee was clear in its view that the proposed balance was not correct and, therefore, suggested amendments, which were tabled in the other place. I pay tribute to the excellent staff of the JCHR, who helped us to marshal the evidence and formulate the amendments to improve the Bill. In spite of those significant changes, the Bill’s proposals, particularly those in part 2 relating to closed material procedures, still constitute a radical departure from the UK’s constitutional tradition, which is one of open justice and fairness.
The JCHR report questioned whether the Government had
“persuasively demonstrated, by reference to sufficiently compelling evidence, the necessity for such a serious departure”
from those fundamental principles. Our conclusion was that the Government had
“failed to discharge that burden of justification”.
The Joint Committee suggested amendments to make the Bill compatible with the bedrocks of justice, openness and fairness, while recognising the national security concerns put forward by the Government. Our aim was to achieve a fair—or at least a fairer—balance. The Bill considered by the JCHR did not achieve the right balance. The Bill before us today is much closer to sitting within the parameters of natural justice and fairness protected by the common law, because of the excellent work in the other place. The amendments recommended by the JCHR and adopted to date are, as my noble Friend Lord Lester of Herne Hill said,
“designed to keep faith with the fundamental principles of justice and fairness in our common law system, within the rule of law, and national security protected by the independent judiciary.”—[Official Report, House of Lords, 21 November 2012; Vol. 740, c. 1822.]
I do not intend to go through the entire list of amendments suggested by the JCHR, but I will mention the most substantive amendments that have led to successful changes. First, a judge will decide whether a closed material procedure should be used in any given case and the decision will not be taken in form or substance by the Secretary of State. Secondly, a CMP will be available only as a procedure of last resort if fairness cannot be achieved by other means. That allows judicial discretion first to consider alternative methods, such as the public interest immunity system and requiring the court to consider whether a claim for PII could have been made. Thirdly, the court will be required to balance the interests of national security against the interests of fairness and open justice in deciding whether to agree to the use of a CMP at the outset. Finally, it will be open to either party to apply for a CMP and the court will also have the jurisdiction to consider the request on its own motion.
If the Bill had come to this House without some of those measures, the case for throwing out part 2 would be significantly stronger. CMPs are not perfect justice, but they may have a place. David Anderson, the independent reviewer of terrorism legislation who has been quoted extensively today, has said that there is
“a small but indeterminate category of national security-related claims, both for judicial review of executive decisions and for civil damages, in respect of which it is preferable that the option of a CMP—for all its inadequacies—should exist.”
A number of the JCHR’s recommendations have not been adopted at present. The first is the introduction of a sunset clause. The second is the compulsory reporting on and review of the use of CMPs by the independent reviewer of terrorism legislation. The third is an undertaking that any litigant who is excluded from the open hearing by the CMP will be given, at the very least, a summary and the gist of the closed material sufficient to enable them to give instructions to their legal representative and the special advocates, so far as is possible. The absence from the Bill of such a disclosure obligation seriously limits the opportunities for special advocates to mitigate the unfairness caused by the Bill’s departure from open and, more importantly, adversarial justice. I hope that those issues will be given further consideration by Members of this House in Committee. I am fairly confident that that will happen.
Had it not been possible to write effective safeguards into part 2, I would share the concerns that are still being raised by many organisations such as the Bar Council, the Law Society of England and Wales, Liberty and Justice. Their concerns demonstrate that there is still significant review work to be done by a Committee of this House. In as reasonable a way as I can, I caution the Government against any attempt to remove the improving amendments that have been made in the other place.
I support the Bill’s passage into Committee, but with the words of Judge Learned Hand in mind:
“Justice is the tolerable accommodation of the conflicting interests of society, and I don’t believe there is any royal road to attain such accommodation concretely.”
The administration of justice is undoubtedly a balance, but it is the most important balancing act that the state carries out. We should proceed carefully in changing that balance.
Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to follow the hon. Member for Edinburgh West (Mike Crockart). I seem to remember studying some of the judgments of Justice Learned Hand myself when I was doing my jurisprudence course at the London School of Economics. I knew they would come in handy one day.
I was much impressed with the speech of my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), and I agreed with him entirely. He put it more elegantly than I could—that is why he is a Queen’s counsel and I am not. I also rather agreed with my hon. Friend the Member for South Swindon (Mr Buckland).
I want to concentrate on part 2 of the Bill, because it relates to the area in which I have been interested as a lawyer. It seems to me that we should not allow the best to become the enemy of the good. The best, of course, is open hearings in court with the normal, full process. However, in a limited number of cases there are particular circumstances, which my hon. Friend the Member for South Swindon rehearsed well, in which it is necessary to have a different procedure.
With respect to my hon. Friend the Member for Dewsbury (Simon Reevell), who is not in his place at the moment, I do not accept the proposition that the Bill will be used to prevent people from bringing claims. Nothing that is currently available in open court will become secret as a consequence of it.
John McDonnell
Let me give the hon. Gentleman an example of how the argument about security is used—the Shrewsbury 24, the pickets who were imprisoned 40 years ago. When they sought the information upon which they were arrested and prosecuted by the Government, the letter sent back from the Secretary of State for Justice told them that a “security blanket” had been wrapped around that information, so the records would not be published on the grounds of national security. Is that the sort of issue that the Bill should cover?
Robert Neill
With respect, it seems to me that at the moment public interest immunity would be invoked in such a case, possibly by an ex parte application, without any notice to the claimant. I fail to see how that would assist people in such a situation. It is better at least to have the opportunity for any relevant and admissible material to be considered, albeit through the less than perfect closed material process.
In my 25 years at the Bar, I predominantly practised in the criminal jurisdiction, and it is right that the Government are not seeking to apply the closed material procedure to that jurisdiction. When I started, public interest immunity criminal cases were a little-developed area, and the jurisprudence grew as time went on to reflect, as other Members have said, the changing demands placed upon the courts system and the nature of how intelligence operations were conducted. The jurisprudence moved flexibly to reflect that, and the same is occurring in the Bill.
I know two things from my experience of the use of PII in criminal cases. First, the judges took extremely seriously their responsibilities in relation to PII applications, including their duty to review the material and their initial rulings. I have no reason whatever to doubt that the same judicial meticulousness will be applied to the closed material procedure in civil cases. It is right that there should be safeguards, which I think are broadly accepted and will be taken forward. I, too, am pleased that the discretion allowed for in clause 6 is widened by the use of the word “may”. I agree with my hon. Friend the Member for South Swindon that that is adequate, and I urge my hon. Friend the Minister to resist the temptation to refine the definition further by including certain factors in the Bill. The risk of that would be that jurisprudence would grow up around the definition of those factors, and case law would eventually erode the jurisdiction and make it worse than simply using the word “may”.
The second point that strikes me from my experience at the Bar is that, as has been observed, it is not always the individual who is the loser as the result of a PII application. I believe the same will apply to the closed material procedure. I remember, in a criminal case, invoking not PII but the court’s inherent jurisdiction to sit in camera. Part of the mitigation that I needed to advance on my client’s behalf related to his activities in relation to reputable freedom movements in the Soviet bloc. I could not advance that mitigation in open court, because the consul of the Communist-controlled country was represented in court and was sitting in the gallery, and there would have been serious consequences for my client and his family. Mr Justice Steyn—later Lord Steyn; a very eminent judge—acceded to the application, and important material in my client’s favour was put before the court. Again, the point is that the material could be ventilated, and it is better in a civil case that that is done through the closed material procedure than were it not ventilated at all. That is why we should not allow the best—an open procedure—to become the enemy of the good, or CMP, which is an improvement in civil cases on existing PII arrangements.
There is general consensus about the importance of removing the Norwich Pharmacal jurisdiction from such cases. We have to be realistic and concede that although many meritorious claims are brought against Government and Government agencies, many unmeritorious claims are brought in the courts. There is, as the right hon. Member for Salford and Eccles (Hazel Blears) suggested, a growing tendency for jurisdiction shopping in relation to the Norwich Pharmacal jurisdiction, which has moved away from its original purpose in intellectual property cases to cases of this kind. It is not right that we should allow that to be abused in these cases.
Similarly, it is not right that the British taxpayer should pay millions of pounds when it is not possible to resist a claim in cases where, if the material were considered by the judge under the closed material procedure, it might be discredited. In the criminal jurisdiction, the choice facing the prosecutor is either to disclose material if ordered to do so or not to continue with the case. We have a tradition in this country of respecting assurances that have to be given in the interests of furthering justice. We have discussed that in relation to the assurances that we give the security services of our allies abroad.
We already do so in a different way in criminal cases in relation to informers, and have done so on more than one occasion. It is distasteful but necessary that we sometimes employ informers so that wrongdoers can be brought to book, and it is important that they are given assurances by the police that their anonymity will be protected. In certain circumstances, rather than disclose someone’s identity, I and other prosecuting barristers would offer no evidence so as not to put the informer’s identity at risk. Otherwise not only are they at risk, and not only is an undertaking breached, but there is a risk that other people will be less willing to come forward and provide information that might be helpful. The same applies even more strongly to assurances given in relation to our national security. I do not think that we should worry about that, subject to the proper safeguards.
In conclusion, it is important to stress again that we are not discussing secret courts. Yes, it is a less than satisfactory process, but ultimately it is one part of the process: the rest is an open process, and the hearing of the claim, as my hon. Friend the Member for South Swindon set out, remains in the public domain. A number of hon. Members have cited Lord Kerr and the al-Rawi case, but to balance Lord Kerr’s judgment it is worth quoting the judgment of Lord Clarke, who took a different view:
“A closed procedure might also be necessary in a case in which…the non-state party…wishes to rely upon the material which would otherwise be subject to PII in order to defend itself in some way against the state. In such a case either party might seek an order for such a procedure based on necessity, namely that such a procedure would be necessary in order to permit a fair trial.”
That is a balanced statement on what is proposed in the Bill. I agree with Lord Clarke, and it seems to me that Mr Justice Ouseley, in the AHK case, made a similar proposition.
When he responds to the debate, I hope the Minister will take on board some of the legitimate concerns that have been raised. I shall support the Bill on Second Reading and we can examine the detail in Committee. We should not, however, allow ourselves to retreat from a necessary—albeit not always desirable—step in this class of case, and allow the best to become the enemy of the good. I therefore hope that the Bill will commend itself to the House.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Robert Neill).
This debate has been about balance, and when the Minister responds I hope he will acknowledge the sense across the House that the Government are not yet in quite the right place regarding the balance between national security and the hard-won liberties of the individual. I hope that the Government will be open in Committee to amendments that make that balance more durable.
Justice systems across the United Kingdom have proven extremely adaptable to reforms such as the Human Rights Act 1998, which gave effect to the European convention on human rights in UK law. Such reforms provided what in some circumstances are universally applicable rights to people on UK territory, as well as recognising the growing importance of judicial review. Such proceedings can sometimes be inconvenient to Ministers and troublesome for the judiciary, but we should remember that the values of justice and fairness in our judicial system guarantee civil liberties and the rule of law.
The Bill deals with the conundrum of trying to strike a balance between the sometimes competing concerns and interests of the state and the individual, and it proposes the creation of closed material procedures in civil proceedings. As a national security measure that is reserved to Parliament under the devolution settlement, the Bill would apply to civil courts in Scotland. I know that the hon. Member for Perth and North Perthshire (Pete Wishart) read out some comments, and no doubt there will be discussions between this Government and the Scottish Government, but the Bill is clear that the measures would apply to civil courts in Scotland.
I welcome the amendments made in the other place that strengthen protection of the individual and, in the words of the noble Lord Pannick,
“help to ensure that, if we are to have CMPs, there are proper limits, proper controls, a proper balance and judicial discretion, and that CMPs are a last resort,”.—[Official Report, House of Lords, 21 November 2012; Vol. 740, c. 1816.]
The Bill as originally presented in the other place would have permitted one party—the Government—to decide whether to use CMPs. Critically, if CMPs are to be introduced, it must be for the courts and not the Government to determine whether they should be used in any given case, and only as a last resort. Questions of fairness and relevancy of evidence are for the courts, not the Government, to determine, because one of the parties to a CMP should not be able to determine such matters on its own. It is therefore welcome that the Minister without Portfolio indicated that the Government are minded to accept the relevant amendment.
Having opposed the amendments with such vigour in the other place, I hope that the Government will now accept in their entirety all amendments accepted by their lordships. Although clause 6 as presented to this House appears to contain greater balance than the measure originally presented to the other place, I am concerned that such balance does not extend sufficiently to clause 7. In particular, the Bill does not create a statutory obligation on the courts to provide the gist of the argument to the excluded party, which is vital to their being able to advise adequately their special advocate. That protection has been sought by the Law Society and is crucial to ensure a better balance between the rights of the individual and the interests of the state.
Natural justice is a key principle of civil law across the United Kingdom, and we have heard comments from Judge Learned Hand. Perhaps I may remind the House of the dictum of Lord Chief Justice Hewart from the 1924 case of R v. Sussex Justices, ex parte McCarthy:
“Justice should not only be done, but should manifestly and undoubtedly be seen to be done.”
One key rule respected by that principle is the right to a fair hearing, which is underpinned in law by article 6(1) of the European convention on human rights.
John McDonnell
May I point my hon. Friend to information given by Nicholas Blake QC—he is a special advocate—on what happens after a judgment is given in a Special Immigration Appeals Commission case? He says:
“If the special advocate thinks there is an error in law in the closed judgment, he gets permission to say, to pass a message out to the other team to say ‘I think you should be appealing, I can’t tell you why’…So there is a sort of open appeal. ‘We think there is something wrong but we don’t know what it is.’ And then the court goes into closed session”
to consider the matter. That is farce, not justice.
Mr George Howarth
My hon. Friend referred to clause 7 and my hon. Friend the Member for Hayes and Harlington (John McDonnell) referred to a special advocate. To some extent, are those points not covered by clause 7(1)(d) and (e), which relate to the need to provide a summary? It is not quite the same as gisting, but a summary would give the sort of information my hon. Friend the Member for Hayes and Harlington implies does not exist.
Mr Bain
I respect my right hon. Friend’s point, but the Law Society and many constitutional lawyers are not completely taken that the Bill provides sufficient protection in terms of common law judgments. As the debate continues in Committee, I hope we can impress upon the Government the advantages of giving greater safeguards in clause 7 to individuals and their legal advisers.
A number of decisions have created the presumption that it is not enough for an individual to be informed of a hearing affecting his or her rights or freedoms. There is also an obligation to inform them of the gist of the case—that comes from common law. That principle is vital, not least in a society governed in accordance with the rule of law. I hope the Government therefore take the advice they have received from the Law Society and others, and that they are prepared to support an amendment in Committee if the Bill receives a Second Reading.
In the Minister’s opening speech, he cited Lord Phillips of Worth Matravers in support of the principle of CMPs in exceptional cases, but perhaps he might reflect on the fact that Lord Phillips has pointed out that, if a closed material procedure is brought into law, it would “undoubtedly be challenged” in both the Supreme Court and the European Court of Human Rights. The Government must therefore establish that any incursion into the fair trial rights that are protected by article 6(1) of the convention is the minimum necessary and subject to suitable available safeguards and protections. The Bill allows insufficient protection of the continued balancing of interest after a CMP has been granted—that was pointed out by the Joint Committee on Human Rights and in the Bingham Centre response to the Green Paper. In allowing insufficient protection, the Bill unsettles an element of Scots law that has existed since 1956. I hope that the Minister resolves that problem in Committee.
As Tom Hickman, of University college London wrote for the UK Constitutional Law Group’s website on 27 November, in the absence of
“such a balance, CMP operates like a black box from which no information of any use or interest emerges. All information of even marginal sensitivity is immune from disclosure even if this is overwhelmingly in the interests of justice for it to be disclosed.”
The point was made more clearly in the decision in an analogous control order case—the case of CC and CF—earlier this year. British authorities admitted that they were involved in the arrest, detention and deportation of the defendants, but the defendants were given no reasons why they lost in the case, nor were they provided with any detail on the Government’s arguments, because the judge said that that part of the judgment must remain closed—the other party was excluded from it. The Government, by accepting reasonable amendments, could surely avoid such cases in the civil courts, if the CMP is introduced, and avoid the outcome warned of by the Intelligence and Security Committee. The Committee recommended restricting the use of CMPs to: UK intelligence material that would, if disclosed publicly, reveal the identity of UK intelligence officers or their sources, and their capability, including techniques and methodology; and to foreign intelligence material provided by another country on a strict obligation of confidentiality.
Even Cabinet minutes are not excluded from disclosure in a case involving serious misconduct by a member of the Cabinet, so why are the Government adopting such a restrictive interpretation in relation to the public interest balance in clauses 6 and 7? I hope the Minister will answer two further questions in his response. If the system comes into operation, will the Government pledge to review it, as the Joint Committee on Human Rights advised, and place that commitment in the Bill? Secondly, will the Minister accept the amendment made in the other place to permit both parties to apply for CMP, not just the state?
The debate has been about balance. This has been a genuinely constructive and helpful debate, both for Opposition Members and Government Members. The Government have made some progress. I hope that in Committee considerably more progress is made, so that we can ensure that the interests of the state and national security are undoubtedly protected, but that we do not cast away the hard-won liberties of the individual.
Ben Gummer (Ipswich) (Con)
I echo the closing remarks of the hon. Member for Glasgow North East (Mr Bain). This has been a balanced and constructive debate, and it is good to see the right hon. Member for Wythenshawe and Sale East (Paul Goggins) return to his place. He and I sat through a similar debate on the Terrorism Prevention and Investigation Measures Bill a little over a year ago, as did my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), my hon. Friend the Member for South Swindon (Mr Buckland) and the right hon. Member for Salford and Eccles (Hazel Blears). We all discussed issues of similar import concerning a similarly tiny number of people. For the TPIMs legislation, that number was nine people, and here we hear from the Government that there are 20 cases pending. While the sums of money involved are considerable, they are not significant in the grand scheme of Government spending. However, the issues of principle are of the highest order and it is entirely right that we have had such an interesting and well-informed debate after that in another place.
In introducing the debate, the Minister without Portfolio, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made a powerful case for why the current situation cannot continue and why the liberty of the litigant, sacrosanct in normal circumstances, to know the evidence that might demolish his or her case, should not be sacrosanct in these unordinary circumstances. They are not ordinary, because the evidence that might be presented could imperil—in many cases, would imperil—the lives not only of agents or officers, but citizens of this country.
We cannot, therefore, continue with the situation we have at the moment, but I would like to add two other liberties that are offended by things as they stand. The first is the liberty of the individual agents and officers, who have not been mentioned so far. Although they are anonymous in most of these instances, in a civil action they are accused of the most appalling crimes—rendition, torture, or procuring murder—and yet, through the agency of their employer, they cannot defend themselves and say that these things did not happen. I hesitate to say that spies have feelings too, but it is clearly wrong to allow someone, just because it is easier for Her Majesty’s Government to raise their hand and pay up, to have it on their record for the rest of their life that they were part of a conspiracy or action of that magnitude. In not defending them in court, we do them a disservice that the Government have a duty of care to address.
A bigger liberty is at stake, however, and that is the liberty of the nation. It seems to me that learned and noble Members in another place have forgotten that the state also has a personality and seem to think that, because the state is not a person, it is perfectly acceptable for it to admit liability where it might have none and to pay damages when it might not need to. Yet the state does have a personality. The Crown has a personality—it is the vessel of our shared values and experience, it is our common interest as a nation—and, if the state admits liability when it should not, it impugns those values, it demeans us as a nation and, perhaps most importantly, it devalues an apology and admission of liability that might be made when it should be made.
In order to protect the liberty of the nation and individual officers, it is vital, in the interests of justice, that we enable the state to defend itself in these civil actions. Here, then, I part company slightly with my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) when he says that this is an unsatisfactory solution, but one that is better than the current situation. I do not think we need apologise for the proposals, because actually they are a reaffirmation of justice in very difficult circumstances: we know that not to do so would be to deny the very values on which that justice is built, but, if the information were to be presented in open court, the evidence might imperil the lives of those whom all of us assembled here—both in what we do and in the legislation that we pass—seek to protect. We must give them the justice they deserve.
The current inequality might be having a bizarre result. It is possible, and we have no guarantee it has not happened, that a civil litigant who is known to the security services but whom, for whatever reasons they have not been able to prosecute—certain Opposition Members will know of such instances—could bring a civil claim and win damages for tens of millions of pounds, and that money could then be recycled back into terrorism and used to attack the very people who have defended, or not defended, their right to bring a case. That is a bizarre situation and a travesty of justice—it is grotesque—so it seems wrong that any of us seek to try to defend the status quo. It is everything that we should be seeking not to do.
Stephen Phillips
Does my hon. Friend agree that the real travesty is the Government having to settle cases and pay damages in circumstances where they might have a perfectly legitimate defence, but which cannot be deployed in court because it would reveal confidential information? It is when that money goes back into the hands of terrorists that we need to be particularly concerned, and that is one reason why the Bill needs a Second Reading.
Ben Gummer
Absolutely. I could not improve on my hon. and learned Friend’s words. It is wrong not only because the money might be recycled back into terrorism, but because it devalues the point when we have done something wrong and need to admit liability and learn from it. It turns everything on its head, and that is why we need the change.
I wish to make a slight political point. There have been some brave speeches from certain Opposition Members who know a great deal more about this matter than people sitting on the Front Bench of Her Majesty’s Opposition. It is odd to hear ill-informed remarks about the Bill being directed at those on the Government Front Bench, given that the Government have been open about what they want to achieve, and reasonable and generous in trying to accommodate the amendments from another place. In the spirit of that, it behoves Her Majesty’s Opposition not to use words such as “humiliating” or “climbdown”, but to acknowledge that the Government are listening carefully to, and accommodating, the arguments being made in both Houses. I hope that, at the end of the Committee stage, the Government will come back to the House with a Bill that will provide justice to the individual officers, to the intelligence agencies, to the nation and to the litigants. I hope that the Bill will do something that we in this place are supposed to do—namely, to ensure that the dispensation of justice is indeed just.
Diana Johnson (Kingston upon Hull North) (Lab)
The Bill has implications for liberty, security and justice. The fact that those are serious matters has been reflected in the number of reasoned and considered contributions that we have heard today. We have heard 22 speeches, in addition to those from the Front Benches, many of which have been informed by Members’ experience in government and on the Intelligence and Security Committee. The whole House welcomes those contributions. In particular, I would like to mention those made by the Chair of the Intelligence and Security Committee, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind); the Chair of the Joint Committee on Human Rights, my hon. Friend the Member for Aberavon (Dr Francis); and the Chair of the Treasury Select Committee, the hon. Member for Chichester (Mr Tyrie), as well as those made by several former senior Ministers, including my right hon. Friends the Members for Wythenshawe and Sale East (Paul Goggins), for Salford and Eccles (Hazel Blears), for Blackburn (Mr Straw) and for Knowsley (Mr Howarth). The leader of the Welsh nationalists, the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), also made one of his usual considered contributions.
The Bill has already been the subject of considerable debate in the other place, where many Members were able to draw on their considerable experience to scrutinise it and suggest improvements. We in this House are grateful for their efforts and the improvements that have been made. In particular, I want to pay tribute to the work of my noble Friends Baroness Smith and Lord Beecham. I am also pleased that the Minister without Portfolio said today that the Government would not seek to overturn some of the amendments made during the Bill’s passage through the House of Lords, and I look forward to hearing further details from the Minister in Committee as to why they disagree with certain others.
The matters in the Bill are sensitive and complex, and the Opposition will work with the Government to reach consensus, wherever possible, based on the evidence available. The introduction of closed material proceedings is undoubtedly the most controversial part of this legislation, and the Opposition accept that there are rare occasions when their use will be necessary. We cannot continue to accept a situation in which the Government are forced to settle claims because they are unable to adduce evidence without compromising vital national security evidence.
In the other place, the noble Baroness Manningham-Buller spoke passionately about the need for the security services to be able to protect their standing in the eyes of the public and for dedicated security staff not to have their reputation traduced because there was no mechanism for challenging allegations. However, as my right hon. Friend the Member for Tooting (Sadiq Khan) explained earlier, we had serious concerns about the scope of closed material proceedings as proposed in the Green Paper and again in the Bill as it was first presented to the Lords. We are pleased that the Government have listened to the strength of feeling expressed in the other place and by the Opposition, and that they have now indicated they will not seek to overturn all the Lords amendments. As I said earlier, we look forward to the debate in Committee.
The Bill also introduces limits on the courts’ ability to demand the release of information, following on from the principles developed in the case of Norwich Pharmacal. That case established the principle that an innocent third party could be forced to disclose information to enable an action to be taken against another party. In the case of Binyam Mohamed, this principle was extended to cover issues of national security. We know that the then Foreign Secretary stated that the release of such information was likely to cause real damage to both national security and international relations. The Independent Reviewer of Terrorism, David Anderson, QC, has now presented several examples where evidence has not been freely given to the United Kingdom because of the danger of its being released into the public domain. Several members of the Intelligence and Security Committee have raised this and confirmed that it is a problem, too.
I think there is an acceptance on both sides of the House, although not by all Members on either side, that this situation is unacceptable. The Opposition accept there is a pressing need to reassert the control principle, to ensure that foreign Governments can be confident that any information passed to the UK Government will remain in the hands of the Executive. We will therefore support the Government in their attempts to prevent the disclosure of information under the Norwich Pharmacal principles where the information is sensitive, and where its release might compromise our relations with foreign allies. The Opposition have concerns, however, about the breadth of the current definition of sensitive information and we hope to persuade the Government in Committee that the control principle can be protected within a narrower definition.
Finally, let me return to part 1. Although it is perhaps not as controversial as part 2, it is equally important, strengthening both the oversight and the public standing of the security services—aims behind which the whole House can unite. In emphasising why public support is so important to the security agencies, I refer again to the noble Baroness Manningham-Buller who drew on her own considerable experience to say in the other place:
“The support of members of the public is necessary not only in terms of general support for the organ of government but because, to do their work the agencies require that support every day of the week. They need the public to join them as recruits…they need them as sources of information, and they need them to help in whatever way possible...Therefore, when we talk about public opinion, the services require the help of the public to do their job and, in my experience, they get it.”—[Official Report, House of Lords, 9 July 2012; Vol. 738, c. 932-33.]
Like the noble Baroness, the Opposition believe that public support for the security agencies will be enhanced by greater openness and scrutiny. For this reason, the Opposition support the Government in what they are attempting to do in strengthening the role of the Intelligence and Security Committee. Indeed, we would like to see the Government be far bolder in recasting the role of the ISC to improve public understanding and scrutiny.
Let me deal with two further issues. One is about the Bill’s wording in respect of ongoing oversight, and I am sure we will spend some time in Committee looking at whether that wording is correct. The second is the call for further resources to allow the ISC to take on these additional roles. We also hope that we will be able to work with the Government in Committee to extend the Bill’s provisions in three ways.
First, we would like to see annual public hearings with the head of each security agency. In the US, such hearings are a well-established part of the congressional oversight of the security agencies, and perform a vital role in educating the public about the work the intelligence services carry out. I do not see why the same role could not be performed in the UK.
Sir Malcolm Rifkind
The hon. Lady and the House may be interested to know that the ISC has decided—it has the agreement of both the Government and the agencies—to hold its first public hearing, probably some time in the early part of next year. If it is seen to be successful, it should indeed become a regular event.
Diana Johnson
I am grateful to the Chairman of the Intelligence and Security Committee for giving us that information. It seems very positive that the first item on our shopping list is going to happen.
Diana Johnson
Ah! Secondly, we would like to see the ISC hold pre-appointment hearings for the agency heads. The Labour Government pioneered such hearings for other public appointments, including permanent secretaries, and we now feel it is right to extend these hearings to security agencies.
Thirdly, we would like to see the ISC operate under the protection of parliamentary privilege and be able to take evidence under oath. The Opposition believe that the only way to guarantee parliamentary privilege is to make the ISC a Select Committee. To confer parliamentary privilege by means of an Act of Parliament would make it subject to legal challenge. That is unacceptable, particularly as witnesses might divulge sensitive information to the Committee, believing it to be subject to privilege, only for that to be overruled by the courts.
We accept that there would be practical problems in the creation of the ISC as a Select Committee, and that foremost among them is the need for its members to be vetted and approved. We hope to work with the Government to find a solution to that problem during the Bill’s Committee stage.
In the other place, the Government’s further reasons for opposing the creation of the Select Committee were unconvincing. Lord Taylor’s arguments seemed to focus on the difference between statute and Standing Orders. If the ISC were recast as a Select Committee, the rules and procedures needed to safeguard the special nature of its proceedings would be determined by Standing Order. If it were created as a new type of quasi-parliamentary entity, its rules would be enshrined in statute. The Minister said that that extra protection was essential, as a Standing Order could be amended by a single vote in the House. The implication seemed to be that that would enable the rules to be altered on a whim.
I think that it does Parliament a great disservice to suggest that either House might make such a serious decision without proper consideration. On the basis of my experience of pushing for the modernisation of Parliament and for reform of its sitting hours, I can say that I have found it extremely reluctant to alter any of its Standing Orders without very good reason and evidence; and I hope that the Minister has been convinced by the serious nature of today’s debate, and the series of debates in the other place, that it cannot possibly be said that Parliament does not afford these matters the full seriousness that they deserve.
Let me finally reiterate the Opposition’s support for the aims that the Government are pursuing. We think that the Bill is far better as a result of the amendments made in the other place. In Committee, we will work to extend the provisions of part 1 to protect the amendments to part 2 that were made in the other place, and to restrict the definition of sensitive information. I look forward to working with the Minister. I know how seriously he takes the views of other Members, and I hope that we shall be able to reach a consensus on the best way to proceed.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
I am grateful for the range of contributions that have been made today, including those made by informed members of the Intelligence and Security Committee, the Joint Committee on Human Rights, and the Justice Committee. This is an important Bill, and it is right for it to be the subject of such vigorous and thorough debate in the House.
As is plain from the quality of the debate since the introduction of the Bill, these are challenging matters, and I respect the concern that we should get the balance between justice and security right. The changes in the global landscape present us with a number of complex problems that we cannot ignore. The concepts of justice, the rule of law and human rights are fundamental principles of which our nation has a rich heritage.
Having carefully examined our options, we believe that the Bill will enable us to tackle the problems that we face both justly and securely, but I accept what has been said by a number of Members today about some of those difficulties. The Chairman of the ISC, my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), said that the Bill was not perfect, but was a great deal better than what we have at present. My hon. Friend the Member for South Swindon (Mr Buckland) said that we must start with the world in which we find ourselves, rather than the world that we might like it to be.
Those themes were underlined during the debate, along with other challenges that were mentioned by Members. I was struck by what was said by my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) about the changes that had been made in the Lords, and the impact that they had had on her impressions of the Bill. I was also struck by the comments made by my hon. Friend the Member for Wycombe (Steve Baker) about the need to ensure that liberty and justice were appropriately balanced. I can say to him very clearly that this is not about expediency but about how we can ensure that the difficult challenges of providing safety and security while reflecting justice are properly reflected in the changes made to the Bill. The same applies to the comments made by my hon. Friend the Member for Edinburgh West (Mike Crockart) and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes).
I recognise that some Members in the Chamber this afternoon are fundamentally opposed to the Bill in principle and do not accept that the provisions are balanced in the way that I have characterised them. The speeches from the hon. Member for Islington North (Jeremy Corbyn), my hon. Friend the Member for Dewsbury (Simon Reevell) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) underlined some of those themes. The situation we are in at the moment is not right, however, and does not meet many of the objections they proffered against the Bill. We believe that it will make an important improvement to the situation by ensuring that difficult cases, which cannot be heard at all because the evidence does not come within the ambit of the court or the public view, are put before a judge so that justice can be done.
The points made by the right hon. Member for Salford and Eccles (Hazel Blears), which were reflected in the speeches made by my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) and the right hon. Member for Blackburn (Mr Straw), underlined that if there is no adjudication, that is unsatisfactory for justice, particularly in the context of the cases that are settled in which there is a defence for the Government but the moneys have to be paid out. We judge the reputational risk that poses for the Government and, as my hon. Friend the Member for Ipswich (Ben Gummer) highlighted, for those individuals concerned in those particular cases to be significant.
We have seen significant changes over the past few decades in the evolving threat from terrorism. The UK faces a global terrorist threat from beyond our shores and our intelligence services are heavily committed to protecting our national security by tackling those threats. We are also now in a more litigious society and the combined effect has seen an increase in numbers of civil claims against the Government. The problem is that in these cases, the material the Government need to defend their case is often classified and cannot be disclosed to the court without compromising operations or risking the sensitive sources and techniques on which we rely to keep the people of this country safe. As the former Lord Chief Justice, Lord Woolf, said in Committee in the Lords,
“PII has the very unfortunate effect that you cannot rely on the material that is in issue, whereas both the claimant and the Government may want to rely on that material.”—[Official Report, House of Lords, 11 July 2012; Vol. 738, c. 1189.]
The result is that at present the courts cannot rule in those cases, so the Government might be left with no option but to settle. That is why the Bill seeks to introduce the use of closed material procedures in a small number of cases that hinge on sensitive national security material.
Some hon. Members have suggested that the public interest immunity system is perfectly adequate to deal with national security matters. Let me be clear that the Government are not trying to abolish PII through this Bill: it will continue to exist and be used in certain contexts. Without the possibility of a closed material procedure, however, a very small number of cases that hinge on national security-sensitive information will not be able to reach a conclusion. When the very material that would determine a case would be excluded from PII, the case cannot be fairly concluded without a forum for it to be heard in. If it is central to the Government’s case, the case cannot proceed and the Government may have to settle. Vast sums of taxpayers’ money could be paid out as a result.
Some have argued that PII leads to more information being disclosed than would be the case under a CMP, but we do not accept that that is the case. The court can order the disclosure of material, notwithstanding the damage that would be caused to national security. But the Government then have the choice not to rely on that material, to make admissions or to seek to settle the case entirely. That means that such a damaging disclosure is never made. So, in practice, we believe that no evidence that can currently be heard in open court will be put into closed proceedings in future. Only evidence that would otherwise not see the light of day will be heard by a judge in closed proceedings.
There have been concerns that the claimant will be kept in the dark about accusations against them, though I hope it has been made clear through a number of contributions to today’s debate that that is not the case. It does no harm to restate that the Bill will introduce closed material procedures only in civil cases, not criminal cases, where the Government are the defendant, and claimants will have full knowledge of the allegations that they are making.
CMPs will allow the Government to defend their case and the claimant will have a special advocate working on their behalf, fighting their case. Moreover, it could well be that information that could be considered in a closed material procedure is of benefit to the claimant, and having the case heard using a closed material procedure does not guarantee that the Government will win.
Mark Durkan
Will the Minister address the implications of schedule 2 part 2 as it applies to Northern Ireland? That provides that where the court is of the opinion that there are or that there will be section 6 proceedings, a jury can be dismissed. If there is a jury trial, the jury can be dismissed, so it is not just a matter of select proceedings. The provision fundamentally alters the nature of the trial. What reputational damage does that do to the due character of the devolved justice system?
James Brokenshire
I am clear that, as we have said throughout the debate, the measure does not relate to criminal matters. It relates only to civil proceedings. If there are concerns, I look forward to robust scrutiny, debate and discussion in Committee. I know that hon. Members on both sides will make their points clearly. As right hon. and hon. Members who have previously served on Bill Committees with me know, I welcome all those contributions and we will respond to them.
The Lords indicated that closed material procedures are absolutely necessary and strongly rejected an amendment to remove the CMP clauses altogether. It is worth noting that the amendment was defeated by 164 votes to 24. Fair points have been made. The right hon. Member for Wythenshawe and Sale East (Paul Goggins) highlighted the issue of special advocates. We are working with the special advocates to establish where there may be further training needs, and on ways of dealing with some of the administrative issues and the processes involved. There are detailed points that we can return to in Committee. The right hon. Gentleman also highlighted the issue of inquests, a point that was touched on also by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). We have considered this, but believe that the current arrangements, with an inquiry being established, are still the appropriate way forward, but I look forward to further discussion on those matters.
I heard the points made from the Front Bench and more generally in relation to the part 1 provisions on oversight. We believe that the changes proposed in the Bill strengthen oversight. A good point was made that our intelligence agencies are better for the oversight. That view is reflected in all parts of the House, respecting and acknowledging the excellent work that they do for all of us in keeping our country safe. I look forward to further detailed discussions on those topics and on the memorandum of understanding that is being worked through with the Intelligence and Security Committee.
In relation to Norwich Pharmacal, I think that there is broad agreement across the House that the issue needs to be dealt with. Essentially, we are the only country that has this type of arrangement, which was created through jurisprudence established to deal with intellectual property cases, rather than national security cases, in which there is the ability to obtain information in that way, and that impacts on the willingness of our international partners to share intelligence information with us in respect of the control principle. Again, I look forward to discussing the matter further in Committee.
In conclusion, we strongly believe that the Bill is needed. Yes, there are difficult issues that need to be addressed, but when we look at justice and security we believe that justice is better served by ensuring that more cases are heard than are not heard. Essentially, the part 2 provisions are the fundamental issue at stake. Although I respect a number of important points that have been made this afternoon, that is the core of the issue. We believe that justice and security will be established through the Bill. Therefore, I commend the Bill to the House.
Question put, That the Bill be now read a Second time.
Fund for European Aid to the Most Deprived
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I beg to move,
That this House considers that the draft Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived (European Union Document No. 15865/12 and Addenda 1 and 2) does not comply with the principle of subsidiarity for the reasons set out in Chapter 3 of the Twenty-second Report of the European Scrutiny Committee (HC 86-xxii); and in accordance with Article 6 of Protocol (No. 2) of the Lisbon Treaty on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the presidents of the European institutions.
This is the third time that I have moved a motion on this issue. My hon. Friend the Member for Stone (Mr Cash), the Chairman of the European Scrutiny Committee, is the inspiration behind this motion and I am pleased to support it. I welcome the ESC’s report on the European Commission’s proposal and I am pleased to have the opportunity to discuss it on the Floor of the House.
The Government share the Committee’s view that the Commission’s proposal is not consistent with the principle of subsidiarity. The proposal would establish a new instrument: the fund for European aid for the most deprived. It is intended to replace, from 2014, the European Union’s food distribution programme for the most deprived people. The current programme distributes food stocks such as butter, milk powder, beef, sugar, rice and cereals, and in 2012 the budget has a ceiling of €500 million.
At present, 20 of the 27 member states participate. The main recipients are Italy, Spain, Poland, France and Romania. The UK has not participated since 1998, after which the previous Administration withdrew from the scheme. Both this Government and the previous Administration have opposed Commission proposals since 2008 to extend the programme and expand its social dimension. The UK has consistently set out its concern that the programme does not comply with subsidiarity.
Nothing in the Commission’s proposals changes our position. As the Committee points out eloquently in its report, the Commission has not provided a convincing justification of the need for EU action. Indeed, in many ways the new proposal is even more objectionable than the current programme. It will be used not only to provide food aid, but to purchase and distribute basic consumer goods. Whereas the current scheme is optional, the new scheme will be obligatory on member states and they will be required to provide match funding of at least 15% of the costs.
Stephen Timms (East Ham) (Lab)
I understand the Minister’s case that this could perfectly well be undertaken by national Governments, but do the Government intend to give any help to the network of food banks that is growing at a rate of, I think, three a week up and down the country and for which there is a clear need?
Mr Hoban
Food banks are undertaken by the voluntary sector. I will come on to the ways in which the Government provide support to people on low incomes or who are benefit recipients, in order to demonstrate why we do not believe that this EU programme is right. Our principal objection, of course, is one of subsidiarity, echoing the ESC’s comments, but also reflecting the previous Government’s stance when they withdrew from the scheme.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
To pick up on the Minister’s point that the voluntary sector makes a choice to step in, we now have up to 300 food banks across the country under the umbrella of the Trussell Trust, which estimates that it will have fed about 250,000 people in our country by the end of this financial year. Does he think that it is right that the voluntary sector has to step in to provide people in this country with emergency food aid?
Mr Hoban
The hon. Lady is a prolific tabler of questions on this matter and I have answered one or two for her today. This initiative is undertaken by the voluntary sector. The previous Government ignored the existence of food banks. Even at the height of the recession, when long-term unemployment doubled, the previous Government simply ignored them and pretended that they were not there. This Government acknowledge the existence of food banks. They play an important role and enable people on low incomes to get food, toiletries and other basic needs, and to use their incomes or benefits for other purposes. We also signpost people to food banks, but what nobody has done yet—this point has been made on a number of occasions—is analyse who uses food banks and why.
Mr Hoban
I want to make progress. This debate is about European proposals to spend taxpayers’ money and, if I remember rightly, the Labour party seems very keen to reduce the EU budget. We look forward to hearing what the right hon. Gentleman has to say. I do not know whether he is suggesting that we should enter this programme and that he supports obligatory participation. Perhaps he will clarify his position now.
Stephen Timms
Does the Minister accept that the number of people using food banks is bound to go up further in the coming 12 months?
Mr Hoban
I am not going to predict that. Perhaps the right hon. Gentleman has missed what has been happening recently. He should recognise that there are record numbers of people in work and that unemployment is falling. The number of people on out-of-work benefits has fallen by 199,000 since May 2010. I am not going to engage in making predictions, but I would have thought that he celebrates the fact that more people can look after their own families and that more people who want to work are getting into work, meeting that basic aspiration that we all want people to share.
The right hon. Gentleman did not say whether his party will sign up to the Commission’s proposal and whether they want to spend more taxpayers’ money in Europe. Hopefully he will mention that in his remarks.
Mr John Redwood (Wokingham) (Con)
I congratulate the Minister on taking a firm line on this matter. I am glad that he is opposing this regulation. I notice that all matters have to be accounted in euros, which does not seem to be appropriate for a country that still has its own currency. What does he think the outcome is likely to be in the debates and discussions in which he puts our case?
Mr Hoban
At the moment, discussions are taking place in the working groups. One discussion has taken place so far and I believe that there will be another in the new year. There is currently a blocking minority that is opposed to the regulation. A number of member states that are concerned about the EU budget and the multi-annual financial framework are keen to oppose the proposal. Of course, the money will come out of the structural and cohesion funds, so it will not be spent on other ways to improve the economy across Europe.
Mr Hoban
I will make a bit more progress. I am sure that the hon. Lady has some interesting views on subsidiarity that she will want to share a little later.
The Government’s view has not changed. We are unconvinced of the merits or appropriateness of the proposal. The principle of subsidiarity, which is enshrined in article 5 of the treaty on European Union, states that the EU should act collectively only when
“the objectives of the proposed action cannot be sufficiently achieved by the Member States”
on their own, but can “be better achieved” by action on the part of the Union. We consider that the measures to assist the neediest members of society, as set out in the proposal, can be better and more effectively delivered by individual member states through their own social programmes, not at an EU level. Member states and their regional and local authorities are best placed to identify and meet the needs of deprived people in their countries and communities in ways that are administratively simple and efficient.
In the explanatory memorandum, the European Commission states that the ability of member states to support those who are at the margins of society has been diminished and that social cohesion is threatened by fiscal constraints. We recognise the need to protect the most vulnerable in society and are taking action to do so. However, as I have said, there is nothing in the proposal that could not be organised and financed by member states. The Commission provides no convincing argument for why it is necessary to superimpose a European scheme. The solution must lie with the member state, not at EU level. Member states have that responsibility and must take it. The Commission may argue that the response of member states to these issues is inadequate or that some member states make use of the food distribution programme. However, the Commission does not make the case that the situation is the same in all member states. There is, therefore, no justification for making the fund mandatory for all member states.
Kate Green
In a debate on food poverty a few days ago in Westminster Hall, which was called by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath) made much play of the fact that food poverty was being caused not, this Minister will be pleased to hear, by the actions of the Government—although some of us were sceptical—but by rising food and commodity prices around the world. Is that not exactly the kind of issue that is susceptible to collective European solutions, particularly when this country is seeing a rising number of people, including working people, having to access food banks because of the Government’s failure to act?
Mr Hoban
I am not entirely sure what European action the hon. Lady thinks would tackle that problem. We do need to examine the regulation of commodity markets, which is happening in connection with MIFID II—the second markets in financial instruments directive —at the moment. However, European Governments intervening to buy up food stocks might not be the most helpful action. Those with long memories, such as my hon. Friend the Member for Stone (Mr Cash), will acknowledge that the source of the programme in question was the intention to tackle another problem—the wine lakes, butter mountains and so on. European intervention perhaps causes as many problems as it is intended to solve.
In justifying its position, the Commission points to the Europe 2020 strategy and its headline target of reducing poverty and tackling social inclusion. However, as the European Scrutiny Committee indicated in its report, the proposal was not envisaged when the Europe 2020 strategy was devised, nor does the existence of an EU target mean that action must be taken at EU level. In any case, the EU already has instruments to strengthen cohesion in the form of structural funds. We believe that EU cohesion policy should contribute to tackling poverty and the European social fund programme should contribute to helping disadvantaged people into work.
We are also concerned that the proposal does not represent value for money and would be burdensome to administer. Using EU structural and cohesion fund processes to deliver the instrument in question would lead to heavy and costly administrative burdens on member states and partner organisations. The structural and cohesion funds are there for very different activities from the new fund. They do not buy and distribute food and consumer goods. The new fund will require different, and probably more burdensome, procurement, monitoring and auditing processes. Not only is it inconsistent with subsidiarity, it will also use resources that would be better deployed at national or local level.
If the fund were removed from the proposals, the UK could argue for an equivalent reduction of €2.5 billion in the EU budget over the seven years of the multi-annual financial framework. Given the Labour party’s view, I assume it would support that.
In opposing the Commission’s proposal, I reiterate that the Government strongly support measures to tackle poverty and social exclusion at member state level. In the UK, we have a full range of benefits and tax credits in place to cover financial needs for those in and out of work. We are investing £400 million in the current spending review period in helping local authorities prevent and tackle homelessness, and we are committed to eradicating child poverty. We are taking a new approach to tackling the root causes of such problems, including worklessness, educational failure and family breakdown. The EU structural and cohesion funds are better used in tackling the root causes of poverty than its symptoms.
On food aid, the Healthy Start scheme provides a nutritional safety net in the form of vouchers for basic healthy foods and free vitamin supplements for pregnant women and children under four from disadvantaged and low-income families. Initiatives such as FareShare and FoodCycle are good examples of essential work that charities are doing to support communities. We therefore believe that member states are capable of taking such action to help the most deprived, and we are not convinced that the European Union is better placed to take such action.
We agree with the European Scrutiny Committee that the Commission has provided no convincing argument that the proposal meets the principle of subsidiarity, and I thank the Committee for its work and for proposing the motion for debate.
Stephen Timms (East Ham) (Lab)
I am grateful to the Minister for setting out the Government’s position and look forward to hearing the European Scrutiny Committee’s views in due course.
First, we need to be absolutely clear that there is a large and growing need in the UK for the type of help that the fund would be designed to provide. The Minister mentioned FareShare a moment ago, and I notice that it gets a couple of mentions in the impact assessment of the fund, for example on page 100 of the bundle. As he rightly said, FareShare has never obtained any funding from the EU because the UK has not taken up the funding that is in place. It is slightly confusing that it is mentioned in the impact assessment, because that implies that it has been a beneficiary, but it has not. My understanding, however, is that €50 million is earmarked for the UK from the existing fund, none of which is currently handed over to the UK.
There is certainly a rapidly growing need for the service provided by FareShare and food banks such as those supported by the Trussell Trust, to which my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) referred to a few minutes ago. The latest annual report from FareShare showed that it spent £1.6 million last year. As those who are responsible for FareShare say, a small fraction of the €50 million earmarked for the UK would enable it to transform what it is doing. FareShare provides food to 800 charities and, through them, to almost 40,000 people a day who would otherwise not have enough to eat. It is a wholesale operation supplying food to charities on the front line, and the food that it is distributes is sourced from food retailers and manufacturers, for whom the food is surplus to requirements.
A few minutes ago, the Minister said that everything was absolutely fine and that there really are not any problems in the UK: there are more people in work than ever before, and so on. However, the most recent annual FareShare report says:
“More people are suffering hardship and needing food support than ever before. Demand for our food is rocketing.”
The Minister, for reasons that I entirely understand, was unwilling to accept that the demand on food banks will go up in the next 12 months, but it will undoubtedly do so. Indeed, only yesterday, he sent me a written answer to a question that I tabled about the impact of the benefit cap in London. The information that he supplied was that, in London alone, 27,600 households will lose income when the benefit cap takes effect in April, and of those, 10,800 households will lose over £100 a week. There is no doubt at all in my mind or, I suspect, in the mind of any objective observer that the need for the kind of service that FareShare and food banks provide will only increase in the next few months.
The number of food banks supported by the Trussell Trust, as my hon. Friend the Member for Liverpool, Wavertree said, is about to top the 300 mark. Three new food banks are set up every week, so the number has doubled over the past year. They are all Church-based, and involve Church members and non-members in their governance; there are 3,700 churches and 3,000 schools involved at the moment. As my hon. Friend pointed out, a quarter of a million people will receive food from a food bank in the course of this year. It is a remarkable and impressive initiative, but it is also a terrible indictment that so many people in Britain cannot afford basic food, and have to go to a food bank to obtain it.
Luciana Berger
We are the seventh most industrialised nation, and the number of people accessing emergency food aid has exploded. It was 26,000 under the Labour Government—I make that point, because it was 26,000 people too many—but I wish to reinforce the point that my right hon. Friend has just made. By the end of the year, a quarter of million people will have had to go to a food bank. If Members go to meet the people who go to a food bank they will see that they do not go in with smiling faces—they go in hanging their heads in shame. Does my right hon. Friend not agree that the Government should do everything in their power to make sure that no one needs to access emergency food aid in the UK?
Stephen Timms
I completely agree with my hon. Friend, who makes a powerful and telling point. As she will know, food banks work hard to minimise the loss of dignity involved in going to a food bank. For example, they often give out food in supermarket carrier bags so that it does not look as if people have been to a food bank. My hon. Friend is absolutely right: it is a terrible indictment of the state of our nation that a quarter of a million people have to do that this year, and the number, I confidently and regretfully predict, is bound to go up over the next few months.
Why has that terrible thing occurred? It is, of course, difficult to survive on benefits or on a low working income, and the Government’s plan to uprate benefits by less than inflation will undoubtedly make matters worse over the next few months—I have spoken already about the effects of the benefit cap that will take effect in April. The plight of those who lose more than £100 a week—as many will when the benefit cap comes in—will be desperate, and a surge of people will be driven to food banks, able to feed themselves and their families only as a result of the help they find there.
The Trussell Trust—this returns to the Minister’s direct responsibilities—makes the additional point that of the 250,000 recipients we have heard about this year, 100,000 are people for whom jobcentres have been too slow in making a payment or made a mistake. Food banks say that more people are turning up with no money because they have been sanctioned by Jobcentre Plus. Often, they have no idea why they have been sanctioned, and know only that they have got no money and must get food from the food bank.
Luciana Berger
My right hon. Friend will know that if someone goes to a food bank, they must tick a box giving the reason they have to access emergency food aid, and more than 40% say it is because of delays to their benefit payments. Does my right hon. Friend share my concern that in an article in The Guardian, Ministers said they aim to ensure that 80% of recipients get benefits within 16 days? Sixteen days is long enough to wait for people who have no cushion or money at all, but what about the 20% of people who have to wait for more than 16 days? Does my right hon. Friend share my concern that—
Madam Deputy Speaker (Dawn Primarolo)
Order. Interventions should be brief and one at a time. The hon. Lady has made her point.
Stephen Timms
My hon. Friend makes an excellent point. As well as delays there is the problem of mistakes and people being wrongly sanctioned. Friday before last I met a young man in my constituency who has been sanctioned and told that he will lose benefits for 14 months because he is attending a residential course delivered by the Prince’s Trust. An agreement between Jobcentre Plus and the Prince’s Trust means that people on Prince’s Trust activities are not sanctioned if they are unable to sign on while on a residential activity, but in that case—and, I fear, in others—the agreement is not being properly implemented by the jobcentre.
Luciana Berger
I am grateful to my right hon. Friend and I hope not to intervene on him further. I have one more point for my final intervention. The Minister said that he welcomed the number of people who are in work, but we heard today that if people who access working tax credits call his Department’s phone line—I know this because my office called today—they are told that they have to wait three weeks for the form, and that when they get it back they must wait at least two weeks for it to be processed. Those are people in work who depend on additional funds to support them. Does he share my concern that although the Government are keen to see people in work, those are the very people who are being crucified?
Stephen Timms
That is an alarming report and I am grateful to my hon. Friend for passing it on. That matter will be on the Minister’s desk—[Interruption.] I beg his pardon; it will be on a desk in his former Department in the Treasury. There are worries—we have heard reports today—about delays in answering the phone at Her Majesty’s Revenue and Customs, and I hope that my hon. Friend’s point will be addressed.
Jim Shannon (Strangford) (DUP)
The problem is not only about delays in payments but about the complications of the system and changes in people’s circumstances, financially and otherwise. Such things all contribute to the problems for those claiming housing benefit, jobseeker’s allowance, income support and so on. Does the right hon. Gentleman think that the issue is not just about the speed of the process, but about making the system easier for people?
Stephen Timms
Yes, the hon. Gentleman is right. One thing that worries me is growing reports of jobcentres taking a trigger-happy approach to sanctions. People do not know why they have been sanctioned; all they know is that their money is suddenly taken away. The network of jobcentres is the Minister’s direct responsibility.
Jacob Rees-Mogg (North East Somerset) (Con)
Is the right hon. Gentleman arguing that, instead of sending a reasoned opinion on subsidiarity to the EU in respect of emergency aid, we should ask the EU to take over our social services budget?
Stephen Timms
I will come promptly to subsidiarity, which the hon. Gentleman properly asks me to address, but it is right first to set out the scale of the need for the kind of aid that, it is envisaged, would be supported through the fund.
The big need that exists is being addressed by organisations such as FareShare and the Trussell Trust network of food banks. There is absolutely no doubt that that need will rise in the coming year. However, as the hon. Gentleman rightly says, the question is whether funding through the EU is the best way to organise the provision of that help. The European Scrutiny Committee, of which he is a member, makes the valid point that there is no reason why the support cannot be delivered through a national initiative rather than by the EU—I agree with the Minister’s point on that.
Setting up a fund at EU level is costly and bureaucratic, so I sympathise with the Committee’s concerns, but the problem is that the UK Government are not providing any such support. I therefore have some questions for the Minister and want to press him further. Does he accept that food banks and others provide a vital and indispensible service, and that without them tens of thousands in Britain would not have enough to eat in 2012? Given the changes that we know are coming in the welfare system over the next few months, does he accept that the problem is bound to get worse? To what extent are the Government interested in what organisations such as FareShare and food banks must do? Will he confirm—I am confident that this is true—that there is currently no UK Government support for them? I believe that local authorities have been able to help in some instances, but local authority funds are being tightly squeezed, so that source is diminishing.
Will the Minister explain why the UK does not take up the €50 million share of the existing EU food distribution programme? That is not a partisan point, but a genuine inquiry—I was part of a Government who took the same view as the Minister, although the problem was a great deal smaller at that time, as my hon. Friend the Member for Liverpool, Wavertree has pointed out. No doubt there is a downside of taking up that aid, but it would be helpful if the Minister could explain what it is.
Is it not a bit rich of the UK Government to argue against the new programme on the ground that they could do the same thing perfectly well—they rightly point to the principle of subsidiarity—if they in fact have no intention of doing so? If the fund is set up—as the Minister has indicated, that could happen despite UK objections—will he consider making the UK share of the fund available to FareShare and others that do such a vital job?
Mr William Cash (Stone) (Con)
To paraphrase President Hollande, with whom I have no doubt those on the Opposition Front Bench are in agreement, a Euro handout is not just for Christmas, but for life.
As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) pointed out, subsidiarity is the issue in this debate. I could spend a great deal of time debating this, but the European Scrutiny Committee’s report sets out some of the aspects in more detail. The Government have set out their arguments in the explanatory memorandum and the Minister has spoken, so it seems to me that on this occasion it would be more appropriate to deal with the question of subsidiarity than to attempt to deal with the questions that arise regarding the relationship between the member states themselves and the United Kingdom.
A reasoned opinion is a new procedure provided for under the Lisbon treaty. It provides a mechanism for challenging Commission legislative proposals on the grounds of subsidiarity. In a nutshell, it means that national Parliaments have eight weeks, from the publication of a proposal, to submit a reasoned opinion. If such opinions represent one third of all the votes of national Parliaments, the Commission has to reconsider its proposal. The deadline in this case is midnight Brussels time on 26 December 2012, which is why the debate is taking place now.
I am glad to read in the motion that the Government agree with the Committee’s proposals. I was also extremely glad to hear the shadow Minister effectively say that the Opposition agree with the principles that underpin our reasoned opinion. The motion before the House is to approve the draft reasoned opinion, which is set out in the annex to chapter 3 of the report, and to instruct the Clerk of the House to forward it to the presidents of the European institutions. That is the formality.
The purpose of the draft regulation is to establish a new fund for European aid to the most deprived with, as the Minister said, a proposed budget of €2.5 billion for the period 2014-2020. I am bound to point out that those years reflect the period of the multi-annual financial framework on which a number of us voted recently, with respect to the European budget, saying that it should be reduced. The object in this instance, however, is:
“to alleviate poverty and material deprivation in the EU by supporting national schemes for the distribution of food products and the provision of basic consumer goods for the personal use of homeless people or children. It would replace an existing EU Food Distribution Programme…in place since 1987”.
The new fund will be based on the EU cohesion policy and resourced from the structural funds.
With respect to the draft reasoned opinion, we conclude that the proposed legislation breaches the principle of subsidiarity for four reasons. The Commission says that there is uncertainty about the ability of some member states to provide the social investment needed to prevent further fracturing of social cohesion, but it does not demonstrate that all member states are in the same position. Furthermore, there is no evidence about which member states are unable to provide this investment. The draft regulation would, however, bind all member states.
Secondly, the Commission has not provided sufficient justification for EU action on the basis of the Europe 2020 strategy—we go into that in more detail in our report, which is available to the House. A principal objective of the proposal is a desire for a highly visible EU funding instrument to mitigate negative perceptions of the EU’s contribution to economic and financial crisis. The Committee argues that such anxieties, whether founded or unfounded, are not a legitimate basis for EU legislation.
I would argue that the answer to alleviating poverty and preventing the difficulties being experienced in member states lies elsewhere. No one can doubt that the difficulties in many member states—youth unemployment running at over 53% in Spain and Greece and vastly increased unemployment among young people and others in all member states, with one or two exceptions—are the result of the economic policies that have been pursued under the existing treaties. The answer lies in growing small and medium-sized businesses. The taxation then taken from their profits could be ploughed back into the relevant part of the public sectors in each member state—including in this country—to provide the kind of help that the Government here have rightly indicated they will provide in order to alleviate poverty, where it is necessary to do so.
The question of whether these anxieties are founded or unfounded is not a legitimate basis for EU legislation. For EU supranational intervention on poverty and social exclusion in member states to be justified, there must be evidence of a problem that cannot be satisfactorily addressed by action at national level in all member states, but this evidence is simply lacking. I am glad to note that both the Minister and the shadow Minister agree with that proposition, and I repeat that the answer lies in growth, although how we get that growth is the subject for a separate debate.
Another problem is that the rule of law, which is the basis on which the much-vaunted aspirations of the EU are meant to be based, is consistently being breached. I could give many such examples; we have reported on them in the past. There is article 122 in respect of the European financial stability mechanism, there are the breaches of the no-bail-out clauses, the failure of the rule of law in respect of the stability and growth pact and the 25/27 decision that the Prime Minister vetoed but which is still subject to a legal reserve. There have been many other instances and they are continuing.
The principle of subsidiarity, which is embedded in the treaties, is meant to mean that, where matters should be dealt with at member-state level, that is where they should be dealt with, and the EU and its institutions should not arrogate to themselves the alleged right to legislate or impose burdens on member states in contravention of the legal requirements prescribed by the treaties, one of which is subsidiarity. It so happens that in the Lisbon treaty member states agreed to this procedure for reasoned opinions, which is a way of challenging a breach of the rule of law. For precisely that reason and in the light of the arguments I have set out, we put forward this reasoned opinion.
There simply is no basis in existing legislation to justify the use of this €2.3 billion for the purpose described by the European Commission. The Commission’s impact assessment states:
“European financial support can demonstrate the direct solidarity of the Union with the poor people, thus taking up on the broad request by European citizens.”
It is difficult to understand what that is supposed to mean in practice. It is just a generalised description, rather than an analysis of the use of the power for the right purpose. I am bound to ask the Minister, therefore, whether he thinks that the cohesion funds—resourced as they are by member states—should be used to
“demonstrate the direct solidarity of the Union with the poor people”
in those member states. On the use of expressions about demonstrating direct solidarity with the poor people, I am bound to say that, yes, people are being seriously adversely affected, but we should be asking what the real cause of that is, and whether this is the right way to try to solve the problem. Those generalised expressions of anxiety are not the way to run the European Union.
Jacob Rees-Mogg
Does my hon. Friend agree that that is the most extraordinarily condescending language for people who are on very high salaries and paying very low taxes to be using?
Mr Cash
I could not agree more, and I would love to go down that route. I will not do so tonight, but the overpayment of civil servants in the European Union is a scandal.
Does the Minister believe that there is evidence of a broad “request by European citizens” for this type of supranational financial support? From what he has said, he clearly does not. The Commission’s impact assessment also states:
“Currently more and more social stakeholders and EU citizens perceive the EU as a threat for their personal and collective protection.”
It goes on:
“Action at European level is required, all the more so, as a lack of social cohesion would hinder the Union's further development and undermine its legitimacy in the eyes of its citizens.”
In other words, this aspiration is based on the fact that the Commission wants to create a perception that the European Union is helping people, and it is then calling for a vast amount of money to justify that perception. In a way, this is an exercise in legitimised propaganda.
The Committee found that statement startling on a number of levels. Does the Minister agree with the Commission that the EU is perceived as a threat to the “personal and collective protection” of its citizens? Does he think it legitimate for this type of humanitarian funding to be used to reinforce the EU’s legitimacy? This is almost akin to Soviet propaganda.
A constant complaint by our Committee is that the Commission does not pay sufficient attention to the need to confirm that its legislative proposals comply with the principle of subsidiarity. I have given the House some instances of breaches of the rule of law. What kind of Government does the Commission purport to run, if it breaches the rule of law whenever it suits it to do so? When it was breaking the rules on the European financial stability mechanism, for example, Madame Lagarde came out of a meeting and said, “We’ve violated all the rules because we want to preserve the euro.” The thinking, which is very dangerous, seems to be: “Providing we can use the power that the member states have given us to get what we want, it does not matter whether we can justify our actions according to the rule of law or the principle of subsidiarity. We’re going to do it anyway, and we’re going to justify it by talking about people’s perceptions.”
It is no wonder that people like me get up repeatedly—like pestering wasps, as I said to the Prime Minister the other day—and try to ensure that we keep the European Commission under surveillance and control. That is precisely what the European Scrutiny Committee is doing. We are ensuring that these matters are properly looked at, and I am delighted that the Government are going with us on this occasion. In this instance—believe it or not—the word “subsidiarity” is not even mentioned in the Commission’s explanatory memorandum. Will the Minister give us his assessment of the Commission’s assertion that the proposal does comply with subsidiarity? Does he agree that, in order to warrant supranational action, the Commission must show that the provision of emergency aid in some member states is undermining social cohesion in others, and that there is a genuine cross-border element involved?
I am arguing the case on subsidiarity, never mind on the justification of the arguments on the merits of giving money. It is an utter, complete and devastating tragedy that people all over Europe are resorting to using food banks. I sympathise with the concerns of the hon. Member for Liverpool, Wavertree (Luciana Berger) about those very people. I do not have any problem there. It is one of the reasons why I spend as much time as I can on matters relating to international aid in countries throughout the world and in the Commonwealth. I am concerned about these people, but we cannot use this sort of legislative framework because of the misuse to which it is being subjected. So does the Minister think that the Commission has proved the existence of this cross-border element?
Mr Cash
I am delighted to hear that. This is where it gets tricky for us as a Parliament. We generally agree that this is not the right thing to do and I believe that the Opposition agree with that in terms of subsidiarity, although they have expressed their view about the question of the merits. The problem is that the number of reasoned opinions on this proposal will fall far short of the minimum required to oblige the Commission to reconsider. However, in the opinion of the Committee, that does not mean that a reasoned opinion of the House of Commons is without meaning or consequence.
Finally, will the Minister tell us whether—and, if so, to what extent—the Government plan to make use of the reasoned opinion in the Council negotiations on this proposal. As I said to the Prime Minister on another subject, it is difficult—he is between a rock and hard place. There are dilemmas, but we as a Committee have a job to do, which is to point out where the subsidiarity has been breached and to present a reasoned opinion. What really troubles me is that we do our job and look to other member states that are constantly berating us for our so-called “attitude” towards the European Union. However, when there is an absolutely clear-cut breach of the rules that they have set themselves, they turn round and say, “Well, we listened to what you said. We are not going to enter into an argument with you about whether you are right on your reasoned opinion”—they cannot; there is no way that could possibly be justified—and then they say, “But we are still going to vote for it.” That is the way to destroy the European Union, and they are doing a pretty good job.
Jacob Rees-Mogg (North East Somerset) (Con)
As so often, the European Union finds itself in these positions essentially by accident. If we look at the documentation, we see that this proposal would replace the existing EU food distribution programme for the most deprived, which has been in place since 1987. That was put in place when the common agricultural policy was building up butter mountains and milk lakes—and, rather excitingly, wine lakes—and it was thought that it would be a good idea to distribute them to member states and the people within them rather than allowing them to rot or having to pay large sums for storage. I cannot remember anybody getting any of the wine out of the wine lake, but that problem went away when the basis of subsidising the CAP was changed and there was a move away from all the payments relating to production. Production fell to be more in balance with demand, so the lakes and the mountains dissipated.
Once the EU as an organisation has its hands on a particular power—[Interruption.]—or piggy bank, it is reluctant to give it up. It sees that it has this power that is no longer of any use because the intervention stores in member states cannot be used to provide food for the needy, so it comes up with a scheme—one that will cost €2.5 billion of our money—to provide a means of distributing that food in deprived member states. It then comes up with the reasons to justify it.
It is worth noting on page 11 of the documentation the justification in the Commission’s explanatory memorandum. It states:
“EU action is justified on the grounds of Article 174 (TFEU) which provides for the Union to ‘promote its overall harmonious development’ by ‘developing and pursuing its actions leading to the strengthening of its economic, social and territorial cohesion’, and on Article 175 (TFEU) which specifies the role of the EU structural funds in achieving this objective and makes provisions for the adoption of specific actions outside the Structural Funds.
EU-level action is necessary given the level of poverty and social exclusion in the Union and the unacceptable diversity of the situation among individual Member States, further aggravated by the economic and fiscal crisis, which has led to a deterioration of social cohesion and lessened the chances of achieving the Europe 2020 Strategy’s objective in relation to the fight against poverty and social exclusion.”
There we see the heart of the matter.
Having bankrupted its member states by making them tie themselves into an overvalued euro, the European Union now says that people are poor and suffering as a result, and that we—the European Union—must therefore look after them. That is like shooting someone in the leg and then ringing for an ambulance. It is a most unsatisfactory way of carrying on, and it does not remove the offence of shooting someone in the leg in the first place. It is, in its way, deeply dishonest, troubling and bordering on wicked that the European Union should force such great austerity on Portugal, Ireland, Spain and, in particular, Greece so that grandmothers in Greece cannot afford their housing, and then come along with a scheme that will give them a little bit of money. Although €2.5 billion of our money is a lot to us who are paying into Europe, it is not a huge amount in the grand scheme of expenditure across member states. It is a little bit of money to spend on a propaganda exercise to persuade member states that things are not as bad as they seem.
Madam Deputy Speaker (Dawn Primarolo)
Order. I should like both hon. Members to return to the specific points that we discussing this evening. The scope of the debate is the subsidiarity issue as outlined in the proposed reasoned opinion, and that is what we should be discussing.
Jacob Rees-Mogg
Thank you, Madam Deputy Speaker. I am very glad that you have returned me to this absolutely key point.
Amendment X to the United States constitution, which is part of the Bill of Rights, provides for all powers that are not specifically designated for the United States to be reserved to the states themselves. What do we have in Europe? We have the vague term “subsidiarity”, which means that if in an impossibly short time a sufficient number of member states lodge an objection with the European Commission, it may, out of its benevolent generosity and kindness, decide to reconsider its proposals. This is what we are doing: we are saying to the European Union, “We think that what you are doing is wrong. We think that what you are doing is so fundamentally wrong that it should be opposed, and that it is indeed a scandal. We think that what you have done to member states is ruin their economies and then give them back €2.5 billion of their own money.”
The document states:
“European financial support can demonstrate the direct solidarity of the Union with the poor people”—
my hon. Friend the Member for Stone (Mr Cash) quoted this as well—
“thus taking up on the broad request by European citizens.”
Well, I do not like being a European citizen anyway. I think that it is an affront to be called such a thing. I am a subject of Her Majesty, and long may I remain so. However, I cannot imagine that anyone in this country, whether he or she accepts the term “European citizen” or not, really wants the EU, having crushed nations, then to give them crumbs from the rich man’s table. I am therefore delighted that Members on both sides of the House support the reasoned opinion.
Question put and agreed to.
Resolved,
That this House considers that the draft Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived (European Union Document No. 15865/12 and Addenda 1 and 2) does not comply with the principle of subsidiarity for the reasons set out in Chapter 3 of the Twenty-second Report of the European Scrutiny Committee (HC 86-xxii); and in accordance with Article 6 of Protocol (No. 2) of the Lisbon Treaty on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the presidents of the European institutions.
Business without Debate
Hemlington Library (Middlesbrough)
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The petition states:
The Petition of residents of Middlesbrough,
Declares that the Petitioners acknowledge the unfair and savage cuts imposed on Middlesbrough and particularly the impact to Hemlington library; further that the Petitioners note that local authors Richard Millward and Peter Brunton support this Petition and also note the great work done by local Councillors Nicky Walker and Jeanette Walker who made this Petition possible, alongside local volunteers including school children from Hemlington Hall Primary, St. Gerard’s Primary and Viewley Hill School.
The Petitioners therefore request that the House of Commons urges the Department for Communities and Local Government to explore every possible avenue, including the obtaining of funds from the development at Hemlington Grange, to keep Hemlington Library open.
And the Petitioners remain, etc. [P001151]
High Carbon Investment
Caroline Lucas (Brighton, Pavilion) (Green)
Almost a year ago, an open letter from a high-profile coalition of investors, politicians and scientists to the Governor of the Bank of England warned that the huge reserves of coal, oil and gas held by companies listed in the City of London are what they termed “sub-prime” assets and pose a systemic risk to economic stability. It is that risk and what could be done to protect the economy that I want to speak about this evening. I apologise in advance for the technical nature of the debate, but I hope the Minister will agree with me that the subject is important.
I want to lay out the new maths of climate change, which quantifies the difference between the total amount of fossil fuels in existence that we know of and the amount of coal, oil and gas that can be burnt unmitigated if we are to have a decent chance of achieving the internationally agreed objective of limiting global warming to below 2°. Industry figures suggest that about 2,795 gigatonnes of carbon dioxide are locked up in the known proven coal, oil and gas reserves around the world. That figure can be compared with the much smaller amount, 565 gigatonnes of carbon dioxide, that research by the Potsdam Institute for Climate Impact Research has identified as remaining in our carbon budget for the period 2011 to 2050. That shows that only about one fifth of known fossil fuel reserves can be burnt and their emissions released if we are to stay within the carbon budget. That analysis was confirmed by the International Energy Agency in its recent world energy outlook for 2012.
Research by the Carbon Tracker initiative has shown that at the end of 2010, 745 gigatonnes of carbon dioxide were present as coal, oil and gas reserves on the stock exchanges of the world. That means that just the reserves owned by listed companies, if burned so that the carbon dioxide is released, already exceed the 2° carbon budget. In other words, there is a major disconnect between the direction the world’s stock exchanges are taking and global efforts to prevent dangerous climate change, such as the recent UN negotiations at which the Secretary of State worked hard to argue for a 2° threshold.
Lord Stern made the following observation in a Financial Times article during the Durban climate conference last December:
“As the negotiations at the UN climate change summit in Durban reach the critical stage, we must not overlook a fundamental contradiction between the way global fossil fuel reserves are evaluated and long-term policy goals. By ignoring this contradiction, companies and markets, as well as governments, are undermining management of the huge risks that rising levels of greenhouse gases pose to their survival.”
As Lord Stern indicates, if greenhouse levels continue to rise, that poses significant risks to business as well as to society as a whole. For example, the insurance and property sectors are already seeing increased claims due to extreme weather events. To give just one example, the estimated property damage costs from Hurricane Sandy are $20 billion. Once the costs of lost business are added in, that could reach $50 billion according to some estimates. Ironically, the hurricane even stopped the New York stock exchange from functioning.
The UK has led the way in using carbon budgets to manage its progress on reducing domestic emissions and it is time to apply that approach to the financial markets and align the energy sector with climate targets. Otherwise, we are in danger of allowing a lack of proper financial oversight and regulation to condemn us to temperature rises of as much as 6°—a figure that was even reinforced in a report by PricewaterhouseCoopers just last month.
The financial markets are an indicator of where the energy industry is heading and at present it is clear that the diversion of capital investment away from carbon-intensive energy sources towards clean energy technologies is not occurring fast enough. Unless the financial system starts to respond with some urgency, it is increasingly exposed to the potential for a drastic correction to reduce emissions—in other words, the risk of the carbon bubble bursting.
The UK economy is particularly exposed because of the global role played by our financial sector in raising capital. London’s strong reputation attracts companies from all around the world and has resulted in it becoming one of the global centres for natural resources companies. Indeed, the UK has a much greater exposure to climate change risk through London’s financial market than it does from its own domestic emissions. Carbon Tracker analysis shows that at the end of 2010 the coal, oil and gas listed in London was the equivalent of 105.5 gigatonnes of carbon dioxide. That is 10 times the UK’s domestic carbon budget of around 10 gigatonnes of carbon dioxide between 2011 and 2050.
Very few of these reserves are actually located in the UK. For example, one third of the coal is in Australia, with major reserves also in Indonesia, South Africa and Botswana. Only a tiny proportion of the coal listed in London is actually in the UK—about 0.36%. This means that investors, such as pension funds, which put their money into so-called UK funds are in fact exposing themselves to risks around the world. For example, there are increasing constraints on the markets for coal across the world, including carbon taxes in Australia and South Africa, the EU emissions trading scheme, carbon intensity targets in China, mercury regulations in the United States, and water availability in India. Moreover, renewable technologies are becoming more advanced and more competitive on price all the time. That has led to increasing uncertainty about the viability of new coal power generation in a number of markets.
All sectors go through changes, which can result in obsolete technologies and stranded assets. The communications industry, for example, has seen a rapid switch to mobile communications. Similarly, traditional photographic equipment has been superseded by digital photography and multipurpose devices that can take pictures and share them with others. We need a similar revolution in the energy sector, which brings through new technologies and delivers the green investment and development opportunities that investors and Governments are seeking—and the markets need to reflect carbon constraints and the reality of fossil fuels as stranded assets. If they fail to do so, as Al Gore argues, fossil fuel reserves will be the next sub-prime crisis.
We therefore urgently need action better to prepare the financial markets for this systemic risk and to prevent a repeat of the recent financial crisis. In the first instance this is about ensuring that the financial system at least starts to consider the risks associated with those so-called stranded assets. HSBC estimates that carbon constraints post-2020 could impact valuations of coal assets, for example, by as much as 44%, with the actual stock impact determined by company exposure to coal. This could translate into a downside risk of between 7% and 15%, according to HSBC, adding a new dimension to risk assessment for both corporate strategy and anyone looking to avoid further economic crisis.
Around one third of the value of the FTSE 100 is currently made up of oil, gas and mining companies, with investors tied into the composition of the markets. That can be directly, through the use of tracker funds, which mirror the largest companies listed on the exchange, for example the FTSE 100 index, or it can be indirectly, by using such indices as a benchmark for fund performance, which results in funds closely matching the sector composition of the benchmark. As a result many investors end up following the market, owing to the herd mentality of the investment system.
The Kay review commissioned by the Government found that equity markets are subject to structural flaws which prevent the management of investments from reflecting the long-term investment horizon of many pension funds. John Kay recommended that metrics should be directly relevant to the creation of long-term value in companies. Until the markets are able to demonstrate that they have fully integrated such risks, it is clear that they will be subject to the dangers of financial instability. Given that climate change is an enormously important long-term systemic risk, as well as a massive market failure, it should surely be seen as a key test of whether markets have adequate information and are functioning efficiently.
The Government have already taken an important first step towards giving markets some of the information they need to deal effectively with climate-associated risk, by introducing greenhouse gas reporting as part of the disclosure requirements for large listed companies. This puts emissions information alongside the material financial data provided for the investor audience. That is a useful first step, but it is important that these emissions data also pass the materiality test, and are of use to investors. However, the current proposal is for a one-size-fits-all approach, which will not give investors information about just how exposed a company is as the result of increasing constraints on carbon intensive activities. Whether a mining company has energy efficient offices or an oil company reduces its business travel provides no material information for shareholders. Good housekeeping by companies whose core business is increasing the production of billions of tonnes of coal and oil simply will not deliver the scale and pace of change required. What investors need is a forward-looking indicator of how the stock levels of fossil fuels compare with the future market for the companies’ products—coal, oil and gas.
Therefore, I propose that the Government should demonstrate true leadership by requiring extractive companies to report the greenhouse gas emissions potential of their reserves. I recognise that it is the Department for Environment, Food and Rural Affairs that leads on greenhouse gas reporting, but I hope that the Minister can assure me that the Department for Energy and Climate Change is actively involved in discussions about the shape of the proposals and that he is using every opportunity to press for an approach that will demonstrate the UK’s commitment to global leadership and protect our economy from the threats posed by the carbon bubble.
The Climate Change Act 2008 draws its powers from the Companies Act 2006, and section 416(4) of that Act allows the Secretary of State to
“make provision by regulations as to other matters that must be disclosed in a directors’ report.”
Given the significance of the carbon dioxide potential of reserves, surely extractive companies must be required to report that vital information at the earliest opportunity. That information can then be collated by the regulator and the level of carbon dioxide in reserves listed on our stock exchange can be monitored. These data should in turn be considered and reported by the Bank of England’s Financial Policy Committee. The committee is charged with identifying, monitoring and taking action to remove or reduce systemic risks, with a view to protecting and enhancing the resilience of the UK financial system.
A number of actors from the financial markets, including Aviva, HSBC and PricewaterhouseCoopers, have already made representations to the Bank’s executive director for financial stability on that matter. Without a thermometer taking the temperature of the market, investors have no idea if the systemic risk is being managed or if the situation is getting worse. Given that most investors are tied to the composition of the market, it must fall to the regulator to take action on that kind of systemic risk and mandate disclosure. London has a reputation for strong corporate governance and transparency, which that measure would maintain.
According to the International Accounting Standards Board, the performance of an organisation is affected by the economic resources it controls, its financial structure, liquidity and solvency and its capacity to adapt to changes in the environment in which it operates. Financial performance is, fairly obviously, an organisation’s ability to earn a profit from the resources that have been invested in it. It also takes into account the actual and potential impacts on performance, viability and earnings of the activities of stakeholders and of systemic risks.
Requiring disclosure of the greenhouse gas emissions potential of reserves is therefore a matter of helping directors to fulfil the duty to report on what might affect the future performance of their company. Boards should be required to explain how their business model is compatible with future scenarios. Directors should be required to explain what level of climate change they are assuming in their strategy and which technologies they assume will be in place by what date. For example, we need to know whether the management of mining and oil companies currently assume that the world will continue on the pathway to 6° of warming.
Many business leaders have made statements supporting the 2° framework and emissions targets. They need to explain how such a position is compatible with their current business model that includes fossil fuel assets. It is clear that business as usual will not prevent dangerous climate change; on the contrary, it is much more likely to lead to catastrophic climate change. Therefore, the Government need to create a framework that facilitates change and protects the economy.
This is probably a good point at which to explain briefly why carbon capture and storage is not the answer to the challenges I have outlined. CCS would obviously primarily be applied only to major coal and gas generation point sources of emission—power stations. It will have no impact on the oil-related emissions generated by transport. Furthermore, given the huge difference between the tight carbon budget and the huge fossil fuel reserves, even widespread CCS would not close the gap sufficiently.
If companies are using a business model based on CCS, they should be required to explain clearly their assumptions about time scales and cost. The International Energy Agency has indicated that commercially available CCS is not likely to come in until after 2030. That leaves around two decades of unmitigated emissions if business continues along the current trajectory, with the carbon budget well and truly spent before CCS can come in. Even at that point, it could be prohibitively expensive to retrofit to existing plants and CCS would primarily be added to new facilities. Unless investors are taking a particularly long-term view, they will not be factoring that into their assessments of a company’s value—there is too much uncertainty. Is it realistic to expect pension funds, for example, to put their money behind a technology that is not yet proven commercially and which even the industry accepts is decades away? If the future viability of coal companies is dependent on CCS in the near future, investors should know about it.
DECC has developed the capital markets climate initiative. That recognises the important role of public sector action in mobilising private capital and encouraging new markets in low carbon investments. However, at present the initiative is completely missing the other side of the equation; there is a need to change the frameworks around the high carbon end of the spectrum to drive capital towards the low carbon end. By starting to address the full picture of capital markets and climate change, the Government can redress the imbalance.
By providing better information, the Government can facilitate active shareholders challenging where capital is being allocated and help secure the significant shift in investment needed to create a green, resilient and sustainable economy. Furthermore, they can avoid picking up the otherwise inevitable tab for damage to infrastructure, property and agriculture, and consumers subject to increased volatility of commodity prices. Those are costs that neither the Government nor individuals can afford.
DECC’s own policies, of course, should also be helping to make markets more resilient in the face of climate change, not less so. Yet tomorrow sees the Second Reading of the Government’s much anticipated Energy Bill, which creates a legal framework to lock the UK into expensive, high carbon gas generation for decades to come. The Bill not only runs counter to scientific advice on the urgency of action needed to avoid irreversible climate change and prevent devastating global warming, but omits a target to reflect the independent expert advice of the Committee on Climate Change—that emissions from the power sector should be virtually zero by 2030.
We will discuss that issue in the context of the Second Reading of the Energy Bill tomorrow, so now is not the time to go into further detail. Suffice it to say that we clearly need an overall impact assessment to evaluate the health, soundness and vulnerabilities of the financial system as we proceed with low carbon transition. The Treasury will need to take a lead on much of that, but DECC has an important and key role as well. I look forward to hearing from the Minister about how he intends to play it.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
I am delighted to respond to this debate and I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing it.
It seems to me that the hon. Lady’s argument is based on three fundamental misassumptions, and because of that much of her case is invalidated. The misassumptions are these. First, there is the notion that carbon-intensive industries and other parts of the economy that rely on them are at a peculiar and specific risk. The hon. Lady made that case—I shall put it as generously as I can—with confidence. However, it would be a hard case to prove and she brought very little evidence apart from the letter, sent to Mervyn King, the chairman of the Financial Policy Committee at the Bank of England, that she quoted at the beginning of her speech.
Let me deal specifically with that letter. The hon. Lady is right to say that it was signed by a number of people. The Bank’s current position is that the interim Financial Policy Committee is aware of the issue and should the FPC conclude at any point that carbon assets do pose a systemic risk to the financial system, it will report and explain that risk in its six-monthly financial stability report. It has not done so at this stage, because it has not come to the hon. Lady’s conclusion—that there is that particular risk—on which the rest of her argument is predicated.
The hon. Lady’s second fundamental misassumption—
Caroline Lucas
I am grateful to the Minister for giving way. Will he explain whether he thinks it is a misassumption to state that only one fifth of known fossil fuel reserves can be burned and their emissions released if we are to stay within the carbon budgets? That is not predicated on any letters, but on the figures coming from some of the foremost climate institutes and others.
Mr Hayes
But this is about the connection between that fact and the effect that it has on the financial climate in which these organisations operate, on their stability, and on their attractiveness to investors. That is the myth. The hon. Lady’s argument is based not on the bald fact but on the connection between it and other things.
The second misassumption that underpins the hon. Lady’s analysis—I am afraid that I must put it this way; I always try to be generous, as you know, Madam Deputy Speaker—is that she assumes a superior grasp, or understanding, of the patterns of investment, the basis on which investors operate, and the climate and modelling that they take into account in making these large-scale investment decisions, than I would have the temerity to claim. I do not want to lecture her—I say this as a paternal bit of advice, really—but a degree of humility is required in these matters. I am by no means wedded to the idea of the market, but I do take the view that the market has an important role to play in signalling to us and to the business community what investors believe to be attractive and unattractive. I therefore do not claim the kind of insight, prophetic powers and extraordinary understanding that the hon. Lady clearly does.
The third misassumption on which the hon. Lady’s performance was based was her extraordinary ability, so it seems, to predict likely changes in the availability of technologies such as carbon capture and storage, changes in the patterns of demand for energy, and changes in cost and price. It is true—perhaps this is where we can reach a synthesis—that in acknowledging that almost all we know about the future is what we do not know, we cannot simply therefore take no strategic view or no long-term decisions. Indeed, the Energy Bill, which she mentioned, is very much about trying to take long-term decisions. However, it is best to do so on the basis that those decisions are not framed around a definitive view of what is bound to occur but an understanding that the creation of a highly responsive system will allow us to deal with those things that are, by their nature, unpredictable, or certainly so in their detail and extent.
Therefore, for the hon. Lady to claim that “carbon capture and storage is not the answer”, to use her precise words, is a pretty bold—some might say a pretty extraordinary—claim. Of course it is true that carbon capture and storage is still at the beginning of its journey and that it will take some time for it to reach the scale that will allow it to become commercially viable. She knows, however, that the Government have invested in a £1 billion competition, that we are backing four projects in that competition, and that they offer significant potential. She will also know, because she studies these matters assiduously, that the taskforce we set up to look at cost reduction for carbon capture and storage concluded just a fortnight or so ago in its interim report—a considered report that I recommend to her if she has not seen it—that carbon capture and storage could become available and commercially viable much more quickly than she has said; it speaks of the early 2020s. I recommend to her the graphic illustration of that argument in the document, which shows that carbon capture and storage is not only becoming technologically proven but is more widely admired than perhaps she wants, because once one accepts that fossil fuels and their effects can be mitigated, the rest of her argument becomes less plausible. Those fundamental misassumptions rather colour her approach to these matters.
There are further problems. I challenge the idea that investment in fossil fuels and the move to a low carbon economy are fundamentally incompatible, and I believe that the market is better able to assess for itself how to manage its assets and investment decisions and that the Government’s Energy Bill provides investment, clarity and certainty. The hon. Lady will understand that the point about long-term contracted prices is that they lower the cost of capital and create an environment for investors that is, by its nature, more certain. Not only do I think all of those things, but I think, less apologetically —not that I have been particularly apologetic so far—that the mix of technologies that we believe is necessary to deliver energy security is not only a guarantee that, in the unpredictable world that I have charted, doors will be left open that the hon. Lady would want to shut, but is more likely to deliver the kind of secure, efficient and effective future that will allow us to be confident that supply can meet demand in an affordable way.
I think there is some agreement, in general terms, on this subject across the House, although there will be differences of opinion with regard to detail. I do not want to anticipate too much of tomorrow’s debate, but the Opposition have made some plausible arguments about demand reduction, market entry, liquidity and regulation, and they will no doubt want to articulate their case tomorrow. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex), the shadow Minister, is in his place. Far be it for me to write his speech for him, but I have no doubt that those things will be in it.
In those terms, I think that the hon. Lady is not only outside the mainstream, but, arguably, on the very fringe of the debate. I do not want that to be the case, because, as I have said, I am generous and am approaching the issue as paternally as I can. Dickens wrote about
“a heart that never hardens, and a temper that never tires, and a touch that never hurts.”
I do not want to hurt the hon. Lady.
Caroline Lucas
How disappointed I am with the Minister’s response. I base my statements on expert advice from financial analysts, university academics and climate experts, so his patronising response is particularly misplaced. We may disagree about the precise time that CCS will come in, but the very fact that there is uncertainty surely means that financial markets should be addressing it.
On the Minister’s point that the Greens are somehow on the fringe, we have been told that for 30 years. We were told that when we started talking about the ozone layer and about climate change, and eventually the other parties caught up. I hope that he catches up soon, too, because if he does not the future looks pretty grim.
Mr Hayes
The hon. Lady knows that the Committee on Climate Change has recognised in its recent progress report—I know that she takes that seriously and that she will have read it—that we are on track to meet our first three carbon budgets, which amount to a 35% reduction in emissions by 2020. She knows that, as a result of the levy control framework negotiations that led to the bargain between the Department of Energy and Climate Change and the Treasury, we have made £7.6 billion available for investment in renewable technology, carbon capture and storage and, at the back end of that period, nuclear power, which she acknowledged recently as salient, because it is a low carbon technology.
Mr Hayes
The hon. Lady shakes her head, but it is, of course, a low carbon technology. All I am saying is that a degree of humility in these matters is important. That is not patronising—far from it. It is about acknowledging that we want a system that is robust but flexible; that takes a strategic view but that does so in a measured way; that is balanced, not extreme. We want a system that allows investors to choose from technologies that can stand up to the kinds of tests that the market would expect. That means that the technologies need to deliver and that they need to be resilient—technologically sound and commercially viable. I believe that that can be true of carbon capture and storage and of renewables, as scale grows and costs fall.
As I have said, in my view, ours is a balanced, measured, moderate and humble approach. Before the hon. Lady speaks tomorrow, I hope she will think again about the Government’s position.
Ministerial Corrections
(12 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Treasury
(12 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Evans (Islwyn) (Lab/Co-op)
14. What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.
[Official Report, 26 June 2012, Vol. 547, c. 153.]
An error has been identified in the oral answer given to the hon. Member for Islwyn (Chris Evans).
The correct answer should have been:
The Exchequer Secretary to the Treasury (Mr David Gauke)
The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 56 seconds. In the preceding 12 months, it was four minutes and 54 seconds.
Foreign and Commonwealth Office
(12 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alun Cairns
22. To ask the Secretary of State for Foreign and Commonwealth Affairs what progress he has made on international aspects of the November 2011 national cyber security strategy.
[Official Report, 4 December 2012, Vol. 554, c. 752W.]
Letter of correction from Mr Hague:
An error has been identified in the written answer given to the hon. Member for Vale of Glamorgan (Alun Cairns) on 4 December 2012.
The full answer given was as follows:
Mr Hague
In January 2011, I launched a new initiative on cyberspace at the London Conference. At the Budapest Conference in October the UK proposed a set of principles for effective cooperation between states, businesses and organisations. We have also launched a 2 million fund offering states' independent advice on ensuring accessible, secure and reliable networks. Central to this effort is our commitment to an open internet, protecting freedom of expression online.
The correct answer should have been:
Mr Hague
In November 2011, I launched a new initiative on cyberspace at the London Conference. At the Budapest Conference in October the UK proposed a set of principles for effective cooperation between states, businesses and organisations. We have also launched a £2 million fund offering states independent advice on ensuring accessible, secure and reliable networks. Central to this effort is our commitment to an open internet, protecting freedom of expression online.
“Opt-in” filter for internet service providers
Nippers Nursery, Leicester
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Yorkshire (Tour de France)
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Julian Smith (Skipton and Ripon) (Con)
It is a pleasure to have secured this debate under your chairmanship, Mr Gray, particularly with your strong links to north Yorkshire and my constituency.
Without doubt, 2012 has been one of the greatest years in British sport. We have hosted the Olympic games in London. Our Olympians achieved the best medal haul since 1908—65 medals, including 29 golds. Super Saturday, 4 August, was undoubtedly Britain’s best athletics night. My noble Friend Lord Coe described it as “the greatest day” of sport that he had ever witnessed. It was a great Olympics for Britain and a great Olympics for Yorkshire, as we romped home with the largest number of medals for the UK.
Andy Murray has become the first British man since 1936 to win a grand slam. In golf, there was Europe’s nail-biting Ryder cup win, and Rory McIlroy has had another incredible year. There are many examples of success from across our country and our sports. Most importantly, the 2012 Paralympics were declared the greatest ever. They have had a massive impact on the perception of disabilities in athletics and in our society more generally. This has been a golden year of sport: it has produced not only brilliant results, but Olympic heroes who are inspiring people, young and old, to take part in sport and engage in exercise, which is the best way to stay fit and live longer.
The games have also shown that Britain is second to none in hosting and running great sporting events. Sport opens doors—it did so for me as a junior squash international, and it has done so for Britain this year. It has been the most incredible advert for our nation, character, values, companies and spirit. The Minister was one of the few people who were behind the most incredible games in history. I pay tribute to the work that he has done to ensure that the year 2012 will never be forgotten in world sporting history.
Of all the sporting achievements during this amazing year, cycling success stands out. I am told that the atmosphere in the velodrome was electric, although I could get tickets only for Greco-Roman wrestling. The roll-call of success could go on and on—Sir Chris Hoy, Victoria Pendleton and Laura Trott, to name but three, and of course the man who won the BBC sports personality of the year on Sunday, Bradley Wiggins. He received almost half a million votes, which again shows the popularity of cycling. It was a fitting end to 2012, during which he became the first Briton to win the Tour de France and his fourth Olympic gold. His success has inspired many to get on their bikes. Cycling is well and truly riding high: on the eve of the new year, Britain is at the top of its sporting game and is riding high on a sea of lactic acid and adrenaline.
Against that backdrop, we have had the most incredible news from Yorkshire. Last week, it was announced that the grand départ of the Tour de France, the world’s largest annual sporting event, will come to the north of England for the first time. The tour will wend and weave its way across Yorkshire on 5 and 6 July 2014, before coming to London and going on to France. It has been the most monumental achievement to win this event. Welcome to Yorkshire, the region’s tourism body, began working on a bid to host the tour, in partnership with Leeds city council, in 2011. The bid had fierce competition from Scotland, Barcelona, Germany, Utrecht and Florence. Yorkshire has had high-profile support from Mark Cavendish, Team Sky’s Ben Swift and Olympic gold medallist Ed Clancy, as well as three key historic Yorkshire riders—Malcolm Elliott, Brian Robinson and Barry Hoban.
Julian Sturdy (York Outer) (Con)
On Mark Cavendish’s support for Yorkshire’s bid, does my hon. Friend agree with his comment that Yorkshire
“is one of the most beautiful parts of not just England but the world”?
Julian Smith
I of course agree with my hon. Friend, and I hope to describe that beauty in my speech.
Hilary Benn (Leeds Central) (Lab)
I congratulate the hon. Gentleman on his timing and foresight. No sooner had he secured this debate than we are able to meet here to celebrate the success of Yorkshire’s bid. The people of Leeds and everyone in Yorkshire are really looking forward to witnessing the grand départ from the centre of Leeds during the summer after next. Will he join me in congratulating all those—he has mentioned some of them—who had the audacity and vision to make the bid in the first place? Does he share the hope of us all here that UK Sport, with the Government’s encouragement, will now back the bid, including with a bit of cash?
Julian Smith
I thank the right hon. Gentleman for his intervention. I shall come on to the Government shortly, but I want to pay tribute to his work and efforts in ensuring that that effort has always been a cross-party one.
As the right hon. Gentleman says, the bid had the full backing of local authorities in Yorkshire, the police, transport companies and the whole business community. A public campaign was launched to encourage people to show their support for the Yorkshire bid, and it has received more than 170,000 pledges. We have had great support from our regional media—the Yorkshire Post, ITV, the BBC, Thomson Press and Ackrill Media. Even French President Francois Hollande backed Yorkshire’s bid to host le Tour following a meeting with the Leader of the Opposition in Paris.
The Government have challenged the country to embrace localism. Yorkshire has taken that challenge and won the most incredible event for the UK and the north. Many people have been involved, and I again pay tribute to the right hon. Member for Leeds Central (Hilary Benn), the hon. Member for Leeds North West (Greg Mulholland) and many other right hon. and hon. Members and noble Members of the House of Lords who have shown their support. My hon. Friend the Member for Selby and Ainsty (Nigel Adams) hosted the Paris organisers of the Tour de France, and anyone who knows him will know that that was a very good evening.
The person who did the deal—it is important to put this on the record—is Gary Verity, the chief executive of Welcome to Yorkshire, with his team, and also Tom Riordan, chief executive officer of Leeds city council. When I met Gary Verity and Christian Prudhomme, race director of le Tour, at St Pancras earlier this year, following their whirlwind tour of many of the jewels of Yorkshire, I saw how positive the chemistry and trust between them was. I therefore knew several months ago that we had a good chance of getting the deal. Gary and his team have delivered a great opportunity for Yorkshire, and have again proved that we must ensure that their future and funding is secure.
We do not yet know exactly where the grand départ will be—we will find out in the coming months—but one thing is certain. As my hon. Friend the Member for York Outer (Julian Sturdy) has said, the Tour will travel through some of the most beautiful towns and villages in the land.
Craig Whittaker (Calder Valley) (Con)
I thank my hon. Friend for securing this debate on the world’s biggest bike race. In 2014, its grand départ will be in west Yorkshire, an honour and a privilege of which we are all very proud. Full details of the route will not be announced until next month, but does he agree that challenging cycle routes—such as the UK’s longest gradient in the Calder valley, at Cragg vale—and the many hilltop villages around the Calder valley would be excellent venues for cyclists and would bring huge value to the local economy?
Julian Smith
I am sure that the Calder valley will be at the top of the short list for the route.
I regularly see cyclists from all parts of the world touring through the Yorkshire dales and Nidderdale, along such world-renowned routes as Greenhow hill outside Pateley Bridge. We could add the starting point in Leeds—Britain’s second financial centre—the industrial heartlands of south Yorkshire, the north Yorkshire moors, the historic cathedral cities of York and Ripon, the gateway to the dales of Skipton and the coastal roads of the east coast. From Harrogate to Selby, Keighley to Halifax, Huddersfield to Masham, the list of places the Tour could go is endless. We could host the whole thing in Yorkshire, not just the grand départ—perhaps, though, we are getting a little ahead of ourselves.
England’s largest county—God’s own—will wow the world and provide exceptional terrain and challenge for the grand départ and the first two stages. With world heritage sites in Fountains abbey and Saltaire and hundreds of homes and attractions, we will entertain the millions of visitors we expect to receive. In addition to the big attractions, we have thousands of smaller tourism businesses across our region already e-mailing to say that they are getting bookings for early July. Heslaker farm, Yorkshire Dales Ice Cream, Theakstons and Black Sheep will all give a warm welcome to visitors. The Tour stages in 2014, in Yorkshire, will be the best ever.
We also have some of the most passionate sports fans in the country. When the Olympic torch passed through Yorkshire, we had double the national daily average of people watching elsewhere in the country. With millions being invested by the Government in better broadband across north Yorkshire, we are creating the infrastructure to make the event a success. The Government have invested in the Northern Hub, bus services and other transport links. We are even asking our world famous Yorkshire bishops to assist with the weather.
This morning at Westminster, right hon. and hon. Members from across the House are forming a Yorkshire and UK Tour de France all-party parliamentary group to ensure that this place gives all the support that it can. There are 54 MPs from Yorkshire alone, which is nearly 10% of the House of Commons.
Before the Olympic games, people often said to me, “It is great, but it won’t mean much for Yorkshire.” Even the most hardened critic will now admit that they were wrong. I am talking about not just the feel-good factor of the games themselves or the economic boost from people coming to the UK, but the lasting legacy. With the Tour de France win, we will see Yorkshire as the centre of focus for 2014, with other parts of the UK benefiting as well. Less than two years after London 2012, we can look forward to another of the world’s biggest sporting events coming to this country, but this time it is coming to the north.
In 2007, the Tour stages in the south-east of England were worth £88 million. Bringing the grand départ to Yorkshire will be worth more than £300 million. For an area of Britain that has weathered the global economic storm but is finding things tough, the event will make a real difference. Businesses big and small across Yorkshire now need to be on red alert to take advantage of all the procurement and support services that will be needed. As Members of Parliament, we will provide all the help that we can, and I hope that the Government will play their part.
From ice cream to beer, hotel rooms to office support, there will be huge opportunities, but there will be broader potential to benefit, too. This is the most watched sporting event, with more than 3.5 billion viewers worldwide. More than 185 countries around the world show the Tour de France every year on 92 different television channels, with the last hour of every stage broadcast live across western Europe.
Yorkshire businesses that currently work abroad or that would like to do so in the future should think of this event as the biggest shop window there is. It will be a great advertisement to companies and people elsewhere in the world who have not heard of Yorkshire and who are looking for a UK base and who want to relocate in the north. It will also be good for the health of our region. We need to get out and exercise more; the Yorkshire Tour will vastly expand the number of bike routes and promote exercise and activity to all.
Yorkshire’s legacy plans are already being discussed and formalised. They include a bike bank, so all children in Yorkshire have access to a bike. There will be more investment in cycle lanes and cycle infrastructure across the county. There will be a cultural festival, too, celebrating both cycling and Yorkshire art and culture. Yorkshire has so much to offer the world, and we now have the chance to showcase that on an unbelievable scale. From literary buffs to entrepreneurs and from couch potatoes to exercise fanatics, le Tour has the potential to change lives.
We are incredibly proud and pleased to be hosting the Tour. There will be a celebratory dinner in Leeds on 17 January to which the Minister has been invited. There is much work to be done over the year ahead to plan the route. As I said at the start, this has been a team effort. Although UK Sport may not have been part of the Yorkshire bid, I was delighted that the Minister for Sport promised to back it 100% if we made it. Yes, Yorkshire has got this far on its own, but to make the very best of the event, we need Government support as well. Will the Minister outline the areas in which the Government will help? How do we get every Department behind this event? How do we ensure that we learn everything from the Olympics and London 2012 and transfer that to the Tour in 2014? How do we ensure that the regional growth fund, skills funding, roads funding and broadband are all right behind the Yorkshire Tour; that UK Trade and Investment makes the most of inward investment opportunities and exports; and, most importantly, that UK Sport, British Cycling and other bodies get behind this win financially?
We want to use this event to help rebalance the British economy, and we need the Government’s help to do so. As one of Britain’s great Sports Ministers, I am confident that my right hon. Friend will rise to the challenge, and I look forward to his response. I urge him to meet me, the bid team and other right hon. and hon. Members this week, and I look forward to his being part of this great event, as he was with the Olympics, showing that this Government are the Government for Sport.
I can already state with confidence that Yorkshire’s Tour de France stages will be a world-beating event. When everyone talked about a lasting Olympic legacy, this must surely be it. I thank London 2012 for setting the bar so high, but if it thought that the world got a great reception from the capital, just wait until it gets the Yorkshire treatment in 2014.
Greg Mulholland (Leeds North West) (LD)
I pay tribute to my colleague and neighbour, my hon. Friend the Member for Skipton and Ripon (Julian Smith), whose constituency I see every time I turn right out of my front door. For me, one of the great pleasures of living in Leeds North West is that it borders both the constituency of the right hon. Member for Leeds Central (Hilary Benn), where this historic event will start, and the constituency of my hon. Friend the Member for Skipton and Ripon. As he knows, when I stand on Otley Chevin, which is a famous hill for cycling, and look down Wharfedale, I can see the north Yorkshire moors, the white horse of Kilburn, the Yorkshire dales, the Yorkshire wolds and the Pennines—all the incredible and wonderful countryside that Yorkshire has to offer.
Friday 4 December is a special day that many of us will remember for a very long time. To win for Yorkshire the grand départ of the Tour de France has been an absolutely sensational coup and an incredible achievement. I want to add my thanks to the team that secured it for our region and pay tribute to their remarkable energy, grit and passion. In particular, I thank Gary Verity of Welcome to Yorkshire and his team, and Tom Riordan, the chief executive of Leeds city council, and his team. I also want to mention the support from all the councils, the chambers of commerce, the business community, the trade unions and the local people, 170,000 of whom “Backed le Bid” online.
As a Leeds MP, I am bursting with pride at the thought that this world-famous event—the biggest sporting event in the world—will start in our home city of Leeds. It is almost hard to take in. Leeds beat Florence, Barcelona and Edinburgh, and it was chosen because it would deliver a better grand départ 2014. That is quite remarkable.
I was delighted to be asked by Welcome to Yorkshire and Leeds city council to be one of the three MP ambassadors, working with my colleagues, my hon. Friend the Member for Skipton and Ripon and the right hon. Member for Leeds Central. As has been described, the three of us were asked to play a role in promoting the project here, on a political level, and to show that there was support from all the Yorkshire MPs. The turnout in Westminster Hall today reflects that support.
That is why I am delighted that we are to set up a new all-party group, so that we MPs do everything we can—and not only in Yorkshire; it is important to remember that le grand départ will, of course, go from Yorkshire to London. I noted that the Mayor of London rightly welcomed the fact that the Tour de France’s grand départ will have a stage in London. That is great for the capital, but he should have the grace to remember that it was Yorkshire that won that stage for London. It would be appropriate for him to thank the organisers for delivering a stage of the Tour de France in London, because it was Yorkshire that won this bid, and it won it alone.
Back in July, I went to dinner at the delightful Yorebridge house in Bainbridge to meet a legend, Brian Robinson, the first British man ever to complete the Tour de France—a Yorkshire man. He was also the first British man ever to win a stage of the Tour de France. His passion is still for cycling, and his drive—along with that of the other people who have already been mentioned—was inspiring. The scenery that people travel through in Yorkshire really speaks for itself. For a comparison, we might look at what the Commonwealth games did for Manchester. That is precisely what we believe we can achieve in Leeds and Yorkshire as a result of this event.
I am delighted to have a real cycling heritage in Leeds, which is a city with many cycling clubs. In my constituency, there is the Otley Cycle Club; Otley has developed a reputation as a national centre for cycling and as a famous British cycling town. Of course, that was cemented when the first British medal of London 2012 was won by Lizzie Armitstead from Otley in a road race. She became the first Olympic medallist ever from Otley. There is the Otley annual road race, Otley Sportive and a real sense that cycling is one of the main sports of the town.
Of course, MPs today will all be getting excited about what the route of le grand départ might be, and whether it will go through their constituency. The organisers will have to make the decision based on what works best for the race; that is right and proper. However, I am sure that they agree that it is really exciting to have this speculation, and we are all hugely excited. I have already had e-mails from people saying where the race should be; that is the excitement that winning the bid has already generated in Yorkshire. That excitement will only build as we approach 2014.
I need to ask a couple of questions of the Minister, because it is important to know that this bid was won entirely by Yorkshire on its own. As I said, that was a sensational coup, and as has already been said—I am sure it will be reiterated by us all—what we want to hear from the Minister, now that the Tour has been won for Yorkshire and the UK, including London, is that the Government, UK Sport and British Cycling will give a full and proper commitment, equalling that of the commitment that would have been made if Scotland had won the bid.
I am sure that the Minister has already passed his congratulations to the team from Yorkshire, and he might suggest to the Prime Minister that he write to the Back le Bid team about their incredible achievement. The Prime Minister may have done so already. I was pleased to see his tweet welcoming the successful Yorkshire bid. As a Yorkshire MP, the Deputy Prime Minister also welcomed it in a statement. Could the Minister share his letter of congratulations and that of the Prime Minister with the new all-party group, because we are keen to see congratulations being rightly given to Yorkshire for delivering something on its own to the UK?
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
Let me clear that one up straight away. The hon. Gentleman is absolutely right; as soon as the result of the bid was announced at the end of last week, the Prime Minister was quick to add his congratulations, and we put out a press release that afternoon, congratulating the bid team.
Let me address another issue that I think one or two people have quite skilfully ducked around: financial assistance. We will come on to what the Government can do to assist the process in due course, but just be aware that the money—the £1.7 million—that was committed to the Scotland bid is national lottery cash. It is not within the gift of Government to allocate that money directly, because that would break the additionality principles under which the lottery was set up, and under which it has operated under successive Governments. It falls to the Government to set the general parameters. We were able to ask UK Sport to increase the amount of money in the major events pot, which it has done very successfully; now £27 million resides there. It is not up to the Government to allocate that funding directly.
Greg Mulholland
I thank the Minister; that is very helpful. I thank him again for his role in securing the funding for the rugby league world cup, which is the next major international sporting event on these shores. I am sure that, in his role and with his passion for sport, he can assist in securing such events. However, a lot of that is about having the formal backing of the Department for Culture, Media and Sport, of the Government and of UK Sport.
I have one question to put gently to the Minister. When it was clear that the Yorkshire bid was an absolutely superb one, and as it emerged that it had a real chance of success for 2014, why did DCMS and UK Sport not decide to say, “We think this is looking very positive, and perhaps we should now look at supporting it publicly”? There are perhaps lessons there for the future.
However, what is important now is to go forward. I urge the Minister to use his role to speak with UK Sport. Some of its officials’ recollections of the meetings with Welcome to Yorkshire do not exactly tally with those of Welcome to Yorkshire officials, and it is important that we clarify that matter, so that we can find a way of using both organisations, because in the end this is a huge opportunity, as the Minister knows, for UK sport, for British cycling, for the sport of cycling, and—as my hon. Friend the Member for Skipton and Ripon has already said—for the economy of Yorkshire and the UK. Of course, a lot of that is to do with legacy. Legacy has already been mentioned; it is incredibly important. I believe that there will be a festival of cycling for Leeds at the time of the grand départ, which is a thrilling prospect; there will also be the bike bank. There is a huge opportunity, and we need to put that legacy plan in place now.
I will conclude, as I know that other colleagues wish to express their delight and add their congratulations on this historic win. I just want to put this in perspective: this is the first year that a British man has ever won the internationally famous blue-riband event that is le Tour de France. It was a remarkable achievement. For a team from Yorkshire to then secure the first ever staging of the Tour in the north of England, and only the second ever staging in the UK, in the same year is a remarkable and historic achievement. We want to make this event as big a success as possible, in terms of sport, health and the economy. We look forward to working very closely with the Minister, with UK Sport and with British Cycling, to ensure that this incredible event achieves everything that it can, and that we know it will.
Nigel Adams (Selby and Ainsty) (Con)
Thank you, Mr Gray, for calling me to speak.
It is a pleasure to take part in this debate. May I congratulate my hon. Friend the Member for Skipton and Ripon (Julian Smith) on having his crystal ball to hand when he applied for this debate? It is great news that one of the world’s greatest sporting events will be starting in our county in 2014.
When I first heard that Yorkshire was going to bid for the grand départ, I thought to myself, “Mais non! C’est pas possible!” However, I did not reckon on the guile, the craft and the salesmanship of Welcome to Yorkshire. Everyone at our tourism body deserves credit for winning the bid. We have singled out Gary Verity, who did a fantastic job leading the bid, but I would also like to mention Peter Dodd, who did a fantastic job supporting Gary along the way. They should be rightly proud of what they have done; they have turned a rank outsider into a winning bid, and they should be congratulated. Welcome to Yorkshire has a history of delivering success, winning the award for the world’s leading travel marketing campaign three years running and winning the award for Europe’s leading travel marketing campaign twice. It beat worldwide brands such as Expedia and Thomas Cook, tourism organisations such as Visit London, and countries such as Spain and Denmark.
It was only when I met Gary, Peter and their contacts from France to discuss the bid that I reckoned that Yorkshire had a serious chance of securing it. However, I was disappointed to receive a straight bat from the Government when I raised the prospect of supporting Yorkshire’s bid in the House before the summer. I was a little more disappointed that UK Sport did not appear to want to engage with the bid, not even with a supportive letter. Well, it looks like UK Sport backed the wrong horse.
The 5 and 6 July will be fantastic for the north of England, and particularly for Yorkshire, as Leeds will host the grand départ. Two stages of the Tour will need to go somewhere, and I hope the Amaury Sport Organisation, the race organiser, is listening to the debate; indeed, I am sure it is. I want briefly to make the case for part of the Tour to come to my area.
Nigel Adams
I thought about giving the whole speech in French, but I decided, for reasons of expedience, to deliver it in English.
Selby has a fantastic cycling history. It also has links with France going back more than 950 years, and I will list a few. Members will be intrigued to hear that the town of Selby was founded by a French Benedictine monk—in fact, it was Benedict himself—in about 1067. The fourth son of William the Conqueror, who was French, of course, would go on to become King Henry I, and he was born in Selby, becoming the only English-born Norman monarch. Selby abbey’s patron saint is St Germain, who was based in Auxerre, and evidence suggests he visited Selby.
Nigel Adams
I do not believe he cycled, but the name of Garmancarr lane, which is in the village of Wistow, is a corruption of Germain’s carr. As I am sure my hon. Friend is aware, carr means low-lying washland. The lane’s name therefore suggests that St Germain held land in the Selby area.
The scientist Smithson Tennant was assisted in discovering two chemical elements in 1804 by two French chemists. Cochrane’s shipyard built many of the ships and supplied some of the barge men for the D-day landings, which made the liberation of France possible—mind you, we also built the ships that helped us defeat the French at Agincourt.
Mr James Gray (in the Chair)
Order. While I am hesitant to interrupt the hon. Gentleman’s speech, which I am very much enjoying, it might help hon. Members to know that six or seven Members still hope to speak. Therefore, it might be courteous if Members could keep their remarks as short as they reasonably can.
Mr James Gray (in the Chair)
No, not maybe—definitely. [Hon. Members: “No, ‘Mais oui.’”] Ah, mais oui.
Nigel Adams
The Tour de France last visited the UK in 2007, when London hosted the grand départ. It is estimated that the Tour brought £90 million to the capital and the south-east. It has been suggested that Yorkshire could benefit to the tune of over £100 million, and perhaps much more with the Government’s backing. As we have heard, the bid had the backing of local authorities, MPs from across the parties, the business community and the area’s people, 170,000 of whom signed the bid. The legacy plans are already being discussed. As we have heard, we are looking at delivering a bike bank and at improved investment in cycle lanes and infrastructure. I hope the Minister will take away the message that, having won the bid, Yorkshire could benefit from financial support in the run-up to the Tour. Although no funding was forthcoming during the bid, I can assure him that any help received now will produce an outstanding return on investment.
This is Yorkshire’s opportunity to welcome the world, and we will do it properly. With the recent success of British riders such as Bradley Wiggins, who became the first Briton to win the Tour, the popularity of cycling has never been higher. I myself have recently dusted down my old boneshaker, although I do not aspire to wear the yellow jersey. I am confident that this fantastic event will inspire more people to take up cycling and that millions of people will cheer on the champions of world cycling in our great county.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to take part in the debate under your chairmanship, Mr Gray. I, too, congratulate my hon. Friend the Member for Skipton and Ripon (Julian Smith) on securing it. I feel something of an intruder, as a Lincolnshire yellow belly, although my hon. Friend the Member for Brigg and Goole (Andrew Percy), who has one foot in Lincolnshire, has also come along to the debate.
On being elected to the House, I never anticipated that I would make a speech in favour of the Tour de France passing through Lincolnshire, so this is somewhat bizarre. The ideal route to get out of Yorkshire, should any of my colleagues wish to do so, is over the Humber bridge. That iconic construction would make a fantastic advert for the civil engineering skills of British industry.
My hon. Friend the Member for Skipton and Ripon mentioned that good things come out of Yorkshire, and I have to admit that that is occasionally true, as my wife is from Sheffield. In fact, she comes from a cycling family, and our recent research into our family history indicates that a great or a great-great-uncle—we are still working on it—cycled in the Olympics in the early 1920s, so there is a family connection to cycling.
As I mentioned, the ideal route for those heading south after the delights of the Yorkshire countryside would pass over the Humber bridge. It would then head to the winner of Britain in Bloom, and the east coast’s premier resort, Cleethorpes. From there, the beauty of the Lincolnshire wolds opens up—an area of outstanding natural beauty with magnificent landscapes. The route would then head towards the county town of Lincoln, with its magnificent cathedral high on the hill—it is perhaps even greater, dare I suggest, than York minster.
Julian Sturdy
I, like my hon. Friend, will make the case for my area. York is a great, historic city, and York minster will make an amazing backdrop for one of the stages of the Tour de France. However, the important thing across the region is not where the stages will be held, but the economic benefit to the north of England and, dare I say it, the country. Even Lancashire might benefit slightly—[Hon. Members: “Oh.”] I say that with a bit of trepidation. However, the important point is the economic benefit the Tour will bring across the region and the country, and I urge everyone, including the Government, to back it.
Martin Vickers
I welcome my hon. Friend’s intervention. He knows the glories of Cleethorpes, having travelled there only a few months ago in support of my local party, so he can testify to the town’s magnificence. He is quite right to draw attention to the fact that the Tour is a great opportunity to boost our local economies, and I urge all the agencies—tourism boards, local authorities and local enterprise partnerships—to get together and to work closely with the Government and sporting organisations. This is a tremendous opportunity to give a much needed boost to some areas of northern England.
If we can pull this off and get the tour to pass not only through the great county of Yorkshire, but down into Lincolnshire, that will again emphasise the closeness of their links. I urge the Government to co-ordinate every possible agency to work on that so that we can benefit the whole economy.
Andrew Jones (Harrogate and Knaresborough) (Con)
I congratulate my hon. Friend the Member for Skipton and Ripon (Julian Smith) on securing the debate, so that we can celebrate the success. It is excellent news that in 2014 we will welcome the grand départ into Yorkshire. It is a wonderful end to a wonderful sporting year. I also add my congratulations to Gary Verity and the Welcome to Yorkshire team, on the work they did to secure the bid.
The tour is one of the great sporting spectacles of the world, and it is a real coup for it to be coming to Yorkshire. I agree with my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that we started the bidding process as outsiders. I know that the tour has visited other countries for its grand départ before, but it has not been in the UK since 2007, and it will be the culmination of a wonderful year for cycling in the UK. The success will bring our county significant benefits in three areas: business, tourism and sporting opportunity.
As to business, huge numbers—predicted to be in the millions—will come to watch and stage the event, which will provide huge inward investment. For tourism the opportunity is slightly longer term. I am a proud Yorkshireman and I know that we have the most beautiful county in the country. We are not called God’s county for nothing. The landscape of Yorkshire will provide a spectacular backdrop for the varied racing: great climbs and sprints, and the great TV that the tour always makes, which the organisers are adept at providing. I am sure, also, that that showcase will add to tourism demand well after the peloton has moved on. We also have a great sporting opportunity—to encourage people to start cycling, to highlight our area for cyclists, to create more cycle routes and to show that cycling is both good for you and fun. There are not many things that that can be said about.
Mr Gerry Sutcliffe (Bradford South) (Lab)
I am delighted that the hon. Gentleman speaks of cycling as he does, because it has led the way, in the context of how sports are viewed. Cycling was going nowhere, but it has now become a fantastic competitive sport that we do wonderfully well at, across the gamut, and people enjoy all forms of cycling. The point is well made.
Andrew Jones
I agree that cycling presents fantastic opportunities to participate at an elite or social level. It is a spectacular sport for people to get involved in. The question now is the route that the tour will take. The correct answer is of course through Harrogate before heading off to Knaresborough, and then Boroughbridge and various other villages. We have a great claim to be part of the route because Harrogate and Knaresborough is one of the spiritual homes of cycling in the UK. You may not realise, Mr Gray, that the Cyclists Touring Club was founded in Harrogate, and a plaque in the town centre commemorates that event. It was founded as the Bicycle Touring Club on 5 August 1878, before being renamed the Cyclists Touring Club a few years later, to accommodate tricycles. Beryl Burton, who I am sure hon. Members will know was five times world champion for individual pursuit, used to race for Knaresborough.
Cycling in Harrogate and Knaresborough has grown almost exponentially in the past few years, with groups such as Wheel Easy leading some of that demand. I hope that the winning of the bid will mean that we take the opportunity to increase investment in cycling, by giving it more weight in transport planning and giving more encouragement to younger cyclists. We need improved cycling facilities to be built into plans for major development—especially commercial ones and expanding transport hubs. We have the opportunity to make a lasting difference to cycling across the county and the country.
The competition for the grand départ was extremely intense. Le bid was a great piece of work. We owe thanks and congratulations to all the team who delivered it. Let us hope that it will inspire future generations. Part of that will be the encouragement of future success through participation in cycling. That will be the legacy of this win.
Andrew Percy (Brigg and Goole) (Con)
It is a pleasure to serve under your chairmanship today, Mr Gray. I pay tribute to my hon. Friend the Member for Skipton and Ripon (Julian Smith) for securing the debate and for the work that he and others have done on the bid. I pay tribute, too, to Welcome to Yorkshire, which I believe is the only tourism body in the UK that receives no Government funding. It does a fantastic job for our county and region, promoting them both within the UK and internationally. We have heard in the past few minutes how successfully it has done that.
I want to echo my colleagues’ call for the Government to get behind this race now, because potentially it will have a dramatic impact on the local economy. We certainly need that now. I look forward to welcoming the race, wherever it goes in Yorkshire. However, it would be wrong of me not to extol the virtues of the beautiful East Riding of Yorkshire—and, indeed, north Lincolnshire, as I have, as my hon. Friend the Member for Cleethorpes (Martin Vickers) said, a foot in both camps. I live, however, in the East Riding of Yorkshire—not that I favour either, of course. We would love a stage of the race to come to the East Riding of Yorkshire, and, indeed, within a few minutes of the announcement, I was e-mailed by people asking whether we could get the race to our area. Councillors John Barrett and Caroline Fox, who represent the Snaith, Airmyn, Rawcliffe and Marshland ward, in my constituency, put to me a detailed plan of how the route could come from Selby via the A19, the A645 or the A1041 down into Snaith.
Stuart Andrew (Pudsey) (Con)
Does my hon. Friend agree that if the riders went in that direction they would miss the opportunity to come to the Pudsey constituency? Despite the danger of turning the event into the Tour de Yorkshire, I must point out that they would miss the opportunity of seeing the home of real Yorkshire fish and chips, which was of course Harry Ramsden’s based in Guiseley—now run excellently by Wetherby Whaler.
Andrew Percy
I think, as we say in Parliament, my hon. Friend has made his point.
As I was saying, I received a detailed proposal about how, coming from Selby, the race could come through Snaith into Goole. We had a fantastic day when the Olympic torch came to Goole. As my hon. Friend the Member for Skipton and Ripon mentioned, the crowds in Yorkshire were twice the size of those in the rest of the country. On the morning that we welcomed the torch to Goole, I could not believe how many people had come to support the event. The race could come down and across into the beauties of the rest of the East Riding and over the wolds. My hon. Friend the Member for Beverley and Holderness (Mr Stuart), who cannot be here today because he is chairing the Select Committee on Education, supports that idea. The route could then go across the Humber bridge, which is free to cycles—and £1.50 for cars. It used to be £3, but the Government provided the cash to halve that, following a strong campaign by me and my hon. Friend the Member for Cleethorpes. Then it could go across and round Scunthorpe, and back into south Yorkshire—although my hon. Friend did a wonderful job of trying to steal the entire race for Lincolnshire.
Those are a couple of proposals, but as other hon. Members have said, wherever the route goes in our region, the race will be well supported and a huge success. If it does not come to my constituency or our area, we will get behind it just the same. When we put the press releases out for the petition, several residents contacted me to say they would sign up and get behind the cause. We are all on the same page in our region on the matter. It is a fantastic region and everyone has said how beautiful it is; I do not need to repeat that. I thought that we were going to have a gradient argument earlier, about which area had the biggest. Sadly, I cannot win on gradients, representing as I do the former marshland of Brigg and Goole, but we have a mix of wide open spaces, the coastline, rolling hills and the steep hills of the Pennines. We have got all we need to make the event successful.
I congratulate everyone behind the bid on their work. It is staggering in many ways that it was done by volunteers, and I hope we get Government support. Having made a bid and a pitch for my own patch to be part of the event, I hope that, if not the Tour de France—perhaps it should be the Tour to t’France if it is coming to Yorkshire—future events that we would hope to attract to our region could come to the Brigg and Goole constituency.
I look forward to hearing how the Minister will get behind the event and get full Government support, with perhaps even a bit of cash as well. Being Yorkshire folk, we are a bit tight with our own money, so we would like some from the Government. The event will be fantastic for our region—I think we all agree that its impact on our economy will be pretty big—and I again pay tribute to my hon. Friend the Member for Skipton and Ripon for securing the debate.
Jason McCartney (Colne Valley) (Con)
It is an absolute honour to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Skipton and Ripon (Julian Smith) on securing this important debate and on being instrumental in forming the all-party group, which will massively support this exciting venture. I add my thanks to Gary Verity, Peter Dodd and all the team at Welcome to Yorkshire, and also to Tom Riordan. They have had amazing vision, and determination to win the bid, against all the odds, for Yorkshire. This really is an exciting time for our part of the world.
I am not surprised by the interest shown here this morning. There are, I think, a dozen coalition Back Benchers here, and it is amazing to see so much support. The support and interest are not surprising, however, because we all know that cycling is the new rock and roll, and on Sunday evening I had a quick chat with its current lead singer, Bradley Wiggins, at the BBC sports personality of the year awards. I raised the prospect of his cycling in Yorkshire on the Tour in 2014. I will not repeat exactly what he said—we have to remember, of course, that he comes from Lancashire way—but he indicated that he is really looking forward to cycling in Yorkshire.
We have a great history and heritage of cycling in Yorkshire. For example, did Members know that the first British stage winner of the Tour was the now 82-year-old Brian Robinson from Mirfield near Huddersfield? When I announced to some people last week that the Tour de France was coming to Yorkshire, a number of them said, “Tour de France, coming to Yorkshire? How can that work?”, but this will not be the first time that it has come to the UK. The Tour has already visited England three times, and each time the event has got bigger and better. It all started in 1974 with one stage on the Plymouth bypass. In 1994 there were two stages on the south coast and, as many Members have already mentioned, the grand départ came to London in 2007, with a time trial plus one road stage. We now have the grand départ coming to Yorkshire in 2014. It is estimated that Ken Livingstone invested £3.5 million in the 2007 bid, and London got a financial return in excess of £85 million.
Greg Mulholland
I want to reiterate a point I made earlier that ties in perfectly with that. London will once again host the event, but it has not put a penny in. That is fine, because Yorkshire won the bid, but if that is not an argument for Yorkshire getting some investment from central Government in London, I do not know what is.
Jason McCartney
My hon. Friend is absolutely right. When we talk about investing money, the issue is the kind of return we will get, and that is why I made that point. The event will be excellent value for money. For each pound put in, the multiples that we can get back for the local economy and tourism will be amazing.
Yorkshire could gain—we have heard this figure already —in excess of £300 million in direct revenue, plus masses of media exposure and subsequent tourism benefits. Some 3.6 million people in Britain watched the live coverage of Bradley Wiggins’ historic win on the Tour this year. With more than 1,500 hours broadcast in more than 160 countries and an estimated TV audience of 2 billion viewers worldwide, the Tour de France has reached truly global proportions; that is what Yorkshire can look forward to in 2014. As well as benefits to tourism resulting from spectators, teams and the whole tour entourage coming here, there will of course be the focus of the world’s media from now until 2014, and the opportunity to highlight our area as a place for cyclists to come to and ride in, either on their own or on organised rides.
We have yet to have the route confirmed, but I will continue to bang the drum—as many colleagues have this morning—for the route to sweep through my constituency, the beautiful Colne Valley. We have a gruelling gradient—the picturesque hill climb up to Holme Moss on the Pennines—and TV cameras would relish the opportunity to show off that picturesque Pennines panorama to the world. Holme Moss has already featured in the Tour of Britain and the Leeds classic road races. I remember standing outside the Red Lion pub in Jackson Bridge, where I lived with my family, watching the peloton swish past on the Tour of Britain in the 1990s. After the demise of the BBC’s “Last of the Summer Wine” TV series, which brought tourism to the Holme valley, this exciting and now prominent sport can help to re-energise the local tourism economy in my constituency.
My area has booming cycling participation, helped in no small way by the series of “pedal for pounds” charity bike rides organised by Huddersfield Town football club. Last year, I joined 168 charity cyclists in raising £200,000 for the Yorkshire air ambulance and the Huddersfield Town youth academy, as we cycled the 300 miles from Huddersfield to Brighton over three days. This year, even more cyclists took on the challenge and cycled from Yeovil back to Huddersfield.
My constituency is ready and all fired up to help to make the 2014 Tour de France grand départ just as successful as this year’s Olympic games, if not more so, and to leave a lasting legacy of participation and investment in the local Yorkshire community and the Yorkshire economy. Vive le Tour, and vive le Yorkshire!
Clive Efford (Eltham) (Lab)
It is a pleasure to join in this debate under your chairmanship, Mr Gray. I congratulate the hon. Member for Skipton and Ripon (Julian Smith) on securing the debate. As has been said, congratulations are due all round, including, obviously, to Yorkshire for pulling off a coup in winning the bid from under the noses of British Cycling and UK Sport.
I agree with the hon. Member for Leeds North West (Greg Mulholland) that it should not be forgotten that although the event will end in London—and the Mayor of London has welcomed that—this is very much Yorkshire’s bid and Yorkshire’s success. It is an example of what sport can achieve in generating economic activity away from the south-east. It is an enormous opportunity for Yorkshire—and the surrounding areas, as we have heard—to benefit from sport and bring in business, tourism and economic investment. Members who have spoken so far have shown no shortage of determination to achieve that, on the back of the bid.
Congratulations are due to Gary Verity, and to the chief executive of Leeds city council, who must be extraordinarily pleased that his city will host the grand départ of the Tour in 2014. I welcome the fact that there will be an all-party group, because the sporting event will gain enormously from Members of this House working together to maximise the benefits that the Tour can bring to Yorkshire and the surrounding areas. I hope that the group will be based on the Tour, rather than on Yorkshire, so that Members who want to participate and put their case can do so.
Greg Mulholland
The hon. Gentleman is absolutely right. My colleague, the hon. Member for Skipton and Ripon (Julian Smith), and I had a meeting before this debate. As soon as the Tour details are announced on 7 January, we absolutely want people from all around the route to get behind the Tour being in the UK.
Clive Efford
I am grateful for those comments, which are reassuring. I assumed that that would be the case, and that we would all want to make the most of this tremendous sporting event, which comes on the back of not only an incredible year for British sport—I could spend the next half hour listing the successes in British sport in this golden year of 2012—with the Olympics and Paralympics, but outstanding success for cycling. Over the past decade, cycling has shown the way for other sports, as regards not only how to succeed at the elite end, thereby inspiring participation at all levels, but how to create a base of participation at grass-roots level.
In the Active People survey published two weeks ago, the figures for cycling stood out because of the success in steadily increasing weekly participation over a sustained period. Nearly 2 million people a week participate in regular cycling activity, which is a phenomenal achievement for cycling. Quite rightly, cycling has been recognised for that achievement in Sport England’s allocation of money, which was announced this week: there is to be a substantial increase to £32 million. That allocation recognises that cycling can deliver. Cycling has not only been successful in the past; the process of allocating money through Sport England is about what cycling intends to do in the future. The allocation is very much about all sports’ plans, and cycling clearly has something to contribute in the future, as regards increasing participation.
We have heard from hon. Members about the bid for the Tour to go to Yorkshire, and part of that bid was the proposal that cycling banks be set up across the community. I have been involved with a group that has got together entirely on its own initiative. In my constituency, people are enthusiastic about cycling, and the group will set up a cycling bank so that young people—indeed, people of any age—who do not have access to a bike can go cycling. More importantly, they are providing bikes adapted for people with disabilities, so that they, too, can enjoy the sport—sometimes with the assistance of other members of the club, cycling for them—on bikes that are specially adapted to take wheelchairs. Cycling is a growing area of sport, physical activity and community participation, and I am sure that the cycling banks played a significant part in the success of the Yorkshire bid.
Andrew Percy
The hon. Gentleman reminds me of something I forgot to say in my speech. He is right that the number of young people getting involved in cycling is growing massively. A couple of days ago, I hosted a meeting with 11-year-olds Rory Kershaw and Ben Lapish, who have come up with a proposal for expanding the trans-Pennine cycleway to our area. That demonstrates that many young people are passionate about cycling as a result of our recent victories.
Clive Efford
I am glad that I gave the hon. Gentleman that opportunity to finish his speech, and I am sure that the young men are grateful for his comment. I say that in the spirit of today’s debate.
I will not go through the list of colleagues who have spoken, because I am sure the Minister will want to mention every contribution. There were many questions for him to answer. The bid was entirely independent of UK Sport and British Cycling, and with that in mind, I sincerely hope that all parties involved can come together to discuss how we can get the best for the UK out of the significant, fantastic sporting event that is coming our way. UK Sport has an enormous amount of experience in organising and running major international sporting events, and its contribution will be significant. I am sure that UK Sport is willing to put behind it any differences there may have been over which preferred bid should have been supported, and to discuss the event with the organisers to ensure that it goes forwards. I know that is the same for British Cycling. As many of our top British cyclists supported the Yorkshire bid, I am sure there will be a swift coming together. Regardless of whether there was any significant difference of opinion, everyone will now be moving in the same direction and seeking to ensure that the event is an enormous success.
I cannot resist referring to the intervention of the hon. Member for Pudsey (Stuart Andrew), who extolled the virtues of fish and chips from his constituency; I assume that they will now be known as fish and French fries. I am sorry, but the temptation was just too great.
I sincerely wish every success for the event. Every one of us will work together to make it an enormous success, and not just for Yorkshire. The event is a well deserved success for Yorkshire, and it is an enormous shop window, as were the Olympics and Paralympics, to show off the UK. With London 2012, we successfully encouraged more visitors to come to the UK and more people to consider the UK as a place to do business. A survey published today by the British Council suggests that that is one of the major successes of 2012. A major international sporting event on the scale of the Tour de France, starting in Yorkshire and travelling south towards London, will be another enormous sporting event for this country, and hopefully it will be the start of an event that brings even more sporting success for this country. I am sure that all of us, working together, will achieve that success and bring benefits to the UK that will be sustainable in the long term.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
I start by congratulating my hon. Friend the Member for Skipton and Ripon (Julian Smith) on securing this debate and on the way that he and other hon. Members have conducted it. The debate has been quite a lot of fun, which is a very good start.
I also welcome the formation of the all-party group, which, particularly given how things have developed, will be incredibly important, as the hon. Member for Eltham (Clive Efford) said, in bringing together disparate groups in order to make the event the success that it undoubtedly should be.
I will go through the various contributions and try to answer the questions that have been raised, but I will start with a few general remarks. I genuinely say this, and I have no worries at all: I congratulate Yorkshire wholeheartedly on pulling off the bid. To me it does not matter whether people wish to engage with the Government and Government agencies when making bids; what matters is who wins at the end. I absolutely, 100% congratulate Yorkshire on a stunning triumph. I may not have helped Yorkshire very much—I think my sole contribution was nearly standing on a Yorkshire terrier on the Champs-Elysées in July—but it was clear then, and in the way the bid was conducted, that Yorkshire was on to something that others possibly had not picked up. I wholeheartedly congratulate Yorkshire on that achievement.
There are a number of good years for cycling in front of us, and I will come on to that, but 2014 is an important year for this country any way with the Commonwealth games coming to Glasgow a month or so after the Tour de France, which will fit into the calendar very well.
Given the comments on the Olympics, I ought to congratulate Yorkshire on its contribution to London 2012, not only, as a number of hon. Members said, with the huge numbers of people who turned out to watch the torch, but with the number of Yorkshire athletes who secured medals during the competition. At the end of the first week, the joke doing the rounds was that Australia was being beaten in the medal table by both Yorkshire and Millfield school. At that stage, looking at the birthplaces of the athletes, Yorkshire was about fifth or sixth in the medal table, so it made a considerable contribution to the sporting summer, as would be expected from a county with such sporting tradition.
The hon. Member for Eltham touched on this, but while we are on the subject it is worth paying tribute to the work of British Cycling. No other sport in this country combines excellence at the top end with participation. The medal tally from London 2012 is extraordinarily impressive, given the dual achievement of winning the Tour and delivering medals across Olympic and Paralympic sports. Sarah Storey is now the most decorated Paralympian in Britain’s history. Our cyclists are an extraordinary success story. If we look at what they achieved in the Olympics and the Tour, they were the predominant sport at the BBC awards on Sunday night: not only did Bradley Wiggins win, of course, but David Brailsford, the performance director, picked up the coach of the year award.
More than 2 million people cycle regularly. Dave Brailsford told me that he thinks more than 500,000 people have taken up the sport since our success in Beijing. As the hon. Member for Eltham correctly said, that has been recognised by Sport England, which has given a record award in the recent whole sport plans.
On major events, it is fantastic that the Tour is coming to Yorkshire in 2014, but Yorkshire has all sorts of opportunities to star next year as well. The rugby league world cup will be important to the county, and the Ashes are here as well. I am looking at my hon. Friend the Member for Selby and Ainsty (Nigel Adams); I cannot remember whether Headingley stadium is still being redeveloped—
Hugh Robertson
It is, so it has not got one of the tests. Yorkshire athletes will be involved in the world rowing championships and the world triathlon series, which will be held here next year, and possibly even in the champions league final, which is due to be held at Wembley next year. There is a lot for Yorkshire to look forward to.
I will run through the points raised, dealing first with the general ones. Can I nail a point that is taking off about it being a Government decision to back the Scottish bid? It is not a Government decision to back any of the bids. It is rare to have two competing bids for a sports event from the same country. Normally, the country sorts things out itself and uses whatever bid is most likely to succeed.
John Healey (Wentworth and Dearne) (Lab)
I congratulate the hon. Member for Skipton and Ripon (Julian Smith) on securing this debate. It is helpful to have the Minister confirm clearly that the Government did not back the Scottish bid, but if that was the case, will he now back the Yorkshire bid, and if so, how?
Hugh Robertson
I will come to that in a moment, but I want to ensure that people understand that the money that sits behind the backing of the bids is awarded by UK Sport, the lottery distributor on the Government’s behalf. As it is lottery money, it does not lie within the Government’s remit to allocate it directly. To do so would contravene the regulations in the National Lottery Act 2006. We can tell and have told UK Sport to increase the amount of money available—£27 million, financed by the changes to lottery shares introduced shortly after May 2010—but it does not lie in this or any other Government’s remit to then allocate that money to specific projects. To do so would break the additionality principle.
Greg Mulholland
I must bring the Minister’s attention to the worrying statement published yesterday by UK Sport that says, unless I have misunderstood it:
“UK Sport will consider providing Lottery funding towards the bidding costs”
and
“staging costs of strategically important major events with a clear and demonstrable financial need. Investment will only be considered prior to bids being submitted and investment is made at UK Sport’s discretion.”
That sounds as if UK Sport is saying, “Well, you’ve won it now; we’re not going to back it.” That cannot be right. It would be absurd.
Hugh Robertson
Let me explain it to the hon. Gentleman. It is not absurd. It is a different sort of event, because it is not run by the International Cycling Union, the governing body that regulates world cycling, but by a private company. That puts it on a slightly different footing. I will come in a minute to what we can do to help.
The reason why UK Sport does not allow a free-for-all is that if it did, people would just bid on their own and then turn around and ask Government to fund it. That policy has remained unchanged through successive Governments since the formation of the lottery, and there are good reasons for it. The major events panel at UK Sport is full of people who understand the issues, including David Collier, chief executive of the England and Wales Cricket Board, who knows his way around major sports, as the results this week show. The board considers events, prioritises them and then sees how much support it can give.
We just launched the gold event series, which contains all the rules. The rules are there for good reasons, and they have produced a record number of major events. For the year 2015 alone, apart from the rugby world cup, we have secured the world artistic gymnastics championships, the world canoeing championships, the European hockey championships, the European eventing championships, the world rowing championships and the International Paralympic Committee world swimming championships. It is a successful and well-tuned machine. Clearly, something did not go right this time around, but that does not mean that the whole system is broken.
Moving to what the Government can do, I will absolutely ensure that UK Sport engages proactively with the bid team. It would help if the all-party group and MPs here in the Chamber took that message back. There was some indication that for commercial reasons, the bid team did not want to open up its books and show people what it was doing. Now that the bid is won, it is time for everybody to come together and work to deliver a successful bid. For my part, as the Minister, I will ensure that UK Sport offers the necessary technical support to help the work and bring British Cycling on board. I am sure that there will be no problems worth noting with that. It also backed the other bid, but we will ensure that the British sporting landscape is lined up behind the Yorkshire bid, and we will consider what can be done further. It will not happen, though, unless the bid team is now prepared to share all its financial details and various undertakings with UK Sport.
Julian Smith
I welcome the Minister’s offer to engage with the Yorkshire team. Can a meeting take place with him, me and the Yorkshire team to ensure that we frame things correctly for the months ahead?
Hugh Robertson
I am happy to give that undertaking, subject—as Ministers always say—to sorting out the diary. The beginning of next year is a pretty busy time, and I would not want it to drift back into February or March due to the difficulties of finding a spot. It would be a great help if he and others played a part in bringing that together.
It is a fantastic triumph; the challenge is how to take it forward from here. One thing I have learned from the 2012 process is that the successful delivery of major events rests largely on the strength of the partnerships created.
John Healey
What the Minister is saying is encouraging. I say to him and to the hon. Member for Skipton and Ripon that he has indicated that the all-party nature of the issue is important. On the Labour side, my hon. Friend the Member for Leeds East (Mr Mudie) and I are more than prepared to play a part in making the event a success in Yorkshire and for the country.
Hugh Robertson
I am grateful for that. We spent a lot of time during the autumn going around the world giving lectures on why London 2012 succeeded, and the first point in the lectures was the value of cross-party support. Amazingly, for a project so complex and difficult, it held from the period before the bid, in 2003-04, right through to 2012. As I often do, I pay enormous tribute to the work done by the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell), who played a key part. Whatever may or may not have happened in the bid, it is important that we move forward as one from here.
To run through the various points raised by hon. Members, I hope that I have covered most of the points mentioned by my hon. Friend the Member for Skipton and Ripon. It is worth having a look at the publication called the “Gold Event Series”, which lays out clearly what UK Sport can and cannot do. It is a fantastic document. As I said, he should bear in mind that whatever may or may not have happened on this occasion, the team responsible for delivery in UK Sport has produced a list of events coming to this country the like of which we have never seen. It is a high-grade operation and has done well.
I pay tribute to the work done by the hon. Member for Leeds North West (Greg Mulholland) on the rugby league world cup, and I thank him for it. It will be a great success not only for the country but for Yorkshire. He spoke about the Leeds angle and made some points about London. Now that the bid is secured, this would be an extraordinarily good time to approach the Mayor’s office and his major events department to see precisely what financial muscle can be brought to bear.
My hunch is that the Yorkshire team must have presented a balanced budget for the whole event to secure it. In my experience, it is inconceivable that such events are ever awarded if there are holes in the budget. So the contribution from London, which must have been covered somehow in that bid, will be important. If there is not a London contribution thus far, I suggest that that ought to be investigated.
My hon. Friend the Member for Selby and Ainsty talked about UK Sport support. I hope that I have covered that.
The evaluation of this sort of thing is done independently, because lottery money is involved, through an organisation called the major events panel, on which people such as David Collier sit. That panel generally makes good decisions. It was frustrated that it was not given enough access early on to make a balanced decision. I suspect that there is little point raking this matter over now. Congratulations to Yorkshire on winning. The real issue is how we move forward together from here.
Julian Smith
I agree that we should move forward now. Will the Minister ask officials to clarify how many people on that board, making decisions for the big event, come from the north, so that for the future we are getting a broad representation of our whole country?
Hugh Robertson
I could do that. Certainly, as with all UK Sport decisions, the home nations are represented because it is a UK body. Under the terms in which it was set up, there will necessarily be representation from Northern Ireland, Wales and Scotland, and there will be a group of members, some of whom will be independent and others who will not be, from this part of the world. I am not sure that there is a lot to be gained by raking over the coals in respect of where this went wrong, given the special nature of this bid involving a private organisation, and so on. British Cycling, which is not renowned for making mistakes, appears to have backed another bid because, as it told me, it could not get sight of the Yorkshire proposals early enough to make a decision.
My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) talked about transport planning, which is a fascinating issue. I suspect that, looking forward a couple of years from now at the extraordinary success of cycling and at the regrettably large number of people still being killed in collisions, we are getting close to a crossover point where there is such demand for cycling, in terms of closing roads and running amateur races at the weekend, that something pretty dramatic will have to happen. We will have to have a fairly major change of policy. If events such as this help to bring that about, that can only be a good thing.
My hon. Friend the Member for Brigg and Goole (Andrew Percy) spoke up for his constituency, as did my hon. Friend the Member for Colne Valley (Jason McCartney). I think that the hon. Member for Eltham spoke for all hon. Members in his remarks about cycling.
Just to wrap it up, unless hon. Members want me to say anything in particular, I should like genuinely to congratulate Yorkshire. I am delighted, as UK Sports Minister, that we have secured another important, worthwhile major event. The team that pulled this off deserve all our congratulations. That said—I have learned this through London 2012—the successful delivery of a sports event of any size depends on the strength of the relationships and partnerships that are created. That is difficult. There were times in the run-up to 2012 when we had to bite our lips and wanted to lash out at somebody who was being frustrating, or we were getting a bit fed up with the bureaucracy or the time it took to do something. I am afraid that that is in the DNA of successful delivery of such events. It is important that the all-party group in particular advocates for the strength of the relationships and partnerships that will be needed to deliver this.
The key thing is that everybody, from this point forward, does everything possible. I assure all hon. Members in this Chamber that Government, UK Sport and British Cycling will do everything possible to ensure that this is a great success for Yorkshire and, I hope, one of the great grand départs of the Tour de France.
Cornwall (Government Funding)
(12 years ago)
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Dan Rogerson (North Cornwall) (LD)
It is a pleasure to speak under your chairmanship, Mr Gray. I am delighted to see the Minister in the Chamber and am grateful for his presence.
My topic is funding, generally, across Departments for public services in Cornwall and investment in it. The Duchy of Cornwall is peripheral to the rest of the United Kingdom, although it could be argued that the rest of the United Kingdom is peripheral to Cornwall, as I would tend to, in reference to the headline about the continent being cut off by fog. Cornwall has a proud history of independent spirit, resourcefulness and, surprisingly to some, given its rural nature, was one of the early areas in which the industrial revolution took place. Mining in particular and engineering in mining, and ideas from that, were exported—as were the miners—around the world. People of Cornish descent are found in South Africa, south Australia and Mexico, where the links between Cornwall and parts of Mexico where silver mining was undertaken by Cornish miners have recently been rekindled. Hon. Members will be delighted to know that they can buy a pasty in those parts of Mexico, although the fillings are slightly different from those we are used to in the traditional Cornish variety.
The population of Cornwall is just over 500,000. The recent census data show that people were keen to mark their Cornish identity. I am delighted that the Office for National Statistics allowed people to do that last time, although there was no tick box, despite my best efforts. Even though they had to know to tick “Other” and write it, more than 80,000 people, not all of whom were in Cornwall, decided to do that.
There is a significant population in a peripheral location that is, although the history of Cornwall is not just about the rural idyll, in many cases dispersed across the peninsula. There are challenges to providing services that are also experienced by other rural areas. Traditionally, there has been a lot of investment and involvement in primary resource-based industries, such as mining, fishing and farming, and also in engineering and manufacturing. There are still innovative manufacturers. There is now a lot more food processing in the area, which seeks to add value to the food that is grown. The manufacturer Zoeftig, a business in my constituency, makes airport seating that is also used in bus stations, and so on, all over the world, including in Australia. It was recently looking at contracts in the middle east and far east. All hon. Members should welcome the fact that a company in my constituency is exporting to China.
Tourism is important, too. The quality of the tourist offer has improved greatly. The food has changed beyond all recognition from the image of British food generally in the 1970s. The food manufactured in and exported from Cornwall is a strong brand and the restaurants are one of the many reasons that people holiday there.
We seek to benefit from the creative industries. Investment in broadband in Cornwall allows people to undertake such aspects of work far more. People relocate to Cornwall for the quality of life, bringing their businesses and creativity with them, which is all to the good.
Cornwall has received European structural fund money, first, through the objective 1 programme and, more recently, through convergence. That has had an effect and post-2013 we will, potentially, be in line for more of that European funding, although the details will have to be negotiated between the Government and the European Union. That is not something that we are proud of, but it is a stated fact that the European Union recognises the position of Cornwall and the need for extra investment to allow it to catch up with other parts of the United Kingdom. The Government have also recognised that, most recently in the Chancellor’s autumn statement announcement on investment in infrastructure.
We are delighted that the A30 at Temple will be upgraded in the next few years and that the local authority are matching the money invested by Government through the Department for Transport, meaning that that infamous bottleneck, known by those who have visited Cornwall, will be dealt with. This is all to the good. However, a trend across many decades—it is not a new phenomenon; it has been there for a long time—is that various public services in Cornwall have received less public funding than those in other parts of the country. Historically, school per pupil funding, towards the tail end of the previous Parliament, was about £300 to £350 less than the national average.
We have similar problems with the grant from the Department for Communities and Local Government. In theory, we have a fair allocation but, historically, it does not take into account rurality, which is a key element for us across a range of services. The cost of providing services is increased because—as you may be familiar with in Wiltshire, Mr Gray—the dispersed populations mean that we have to replicate some services in a number of small market towns.
In policing, we ought to look at the issue of visitor numbers, which are not taken into account in the policing formula. There have been problems in Newquay—part of my constituency in the previous Parliament, but now in the neighbouring constituency of my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert)—which receives a big influx of young people in the summer. Huge steps have been taken to overcome some of the problems, but the costs of such initiatives are not reflected in the policing grant.
In policing as in other areas, the formula predicts that Cornwall ought to receive a certain amount of money, but it does not get it, so the infamous damping process comes into play. Although a distance from target is recognised, we never quite reach it because it is too difficult to take away money from overfunded areas to give it to underfunded ones. Last week, my hon. Friend the Member for St Ives (Andrew George) secured a debate on the specific aspect of health funding in Cornwall. He pointed out that from 2006 to 2012, according to Government figures, Cornwall was in receipt of £201 million less than the target. The money has gone up and there has been investment, but we are still a distance away from where we should be.
The funding formula is the first port of call for any MP looking at how his or her area is affected and at whether it is disadvantaged in some way. The key elements, which I have referred to in part, are worth exploring.
First, on deprivation, the funding formulas throughout the various Departments tend to look at the high cost of providing services to reach deeper into such communities and to support their people to achieve what they should be achieving and to overcome barriers. Deprivation is readily identified in the larger urban areas so, historically, Governments have tended to put money into those areas—quite rightly—to deal with their problems. In an area such as Cornwall, however, deprivation is sometimes harder to see. People who come on holiday will see the beautiful coast and what they imagine to be an idyllic lifestyle, but they are not as familiar with the low incomes or the high housing costs, in part driven by the large number of second homes. As the census figures revealed, Cornwall is by far the local authority area with the highest number of second homes, and that has a real impact on the housing market.
Historically, peripherality has been an issue with regard to transport costs. Although the level of aspiration might have been low in the past, I am delighted to say that that is changing: most Cornish families aspire hugely to see their young people do well. In many cases that means leaving Cornwall and going to do things elsewhere, which is fine—it is all part of the experience of growing up—but it would be good if there were opportunities for those young people to come back, relocate and bring their skills with them.
The second issue is sparsity. To provide a decent level of service, it must be provided not only in a central, readily accessible location but replicated in several market towns throughout the area, adding to the cost. In difficult times, when the public sector must do things as efficiently as possible, it might retract a little to core areas and expect users to travel greater distances to access services. Some people are in a position to travel those greater distances, but some are not.
The geography of Cornwall is such that on three sides, at three points of the compass, there is water. We cannot call many neighbours across the border to help. If there is an incident or problem, we have the border with Devon and that is it. Cornwall also gives support and help to the neighbouring authority of the Isles of Scilly, whose choices of where to go, what to do and who to call on are even more limited than ours. Peripherality, therefore, has a direct effect, such as for fire and rescue services. The delightful county of Bedfordshire, where I lived for a number of years, is centrally located and so, if there is an incident, it can call on neighbouring forces for help, but we cannot do that in Cornwall, other than for help for those on the rural border with Devon.
The first port of call for a lobbying MP is to consider the funding formula, which is what we are doing. I have been working alongside the hon. Member for Beverley and Holderness (Mr Stuart), the Chair of the Select Committee on Education, in his examination of the issue of rural funding and rurality. We have asked Government, across Departments, about what they might do to reflect better our circumstances on the ground. We have had some success, and I am delighted that the coalition Government have made steps in that direction, looking at school funding to deal with unfairness and at how rurality can be reflected in localisation of business rates. So, success, wonderful, problem solved! However, we then come back to the dreadful damping business.
I accept that when money and investment in the public sector are restricted, it is harder to deal with the issue than at times of more cash being about, when one can ensure that areas that are behind catch up a little more quickly with areas that are ahead of where they should be. Unfortunately, such levelling-off did not happen under the previous Government when money was going in and they seemed to feel that a lot of it was around, so the gap remained. Now the coalition is having to deal with the deficit and to take some difficult funding decisions, so I accept that things are harder. My constituents, and those in other areas of the country with similar problems, expect a direction of travel according to which funding begins to approach where the target says we should be.
I called for the debate and asked for a Treasury Minister to respond because a number of Departments have a similar problem. Rather than have the same debate several times, I was hoping to suggest to the Minister that, when he talks to his hon. Friends in other Departments and has difficult discussions about the amount of money available and using it efficiently to get the most impact from investment in public services, he should say on the issue of damping, “We are giving you this money to deliver services throughout the country. You have quite rightly reviewed the formula by which you allocate that money to ensure that areas are getting what they need, what is fair and what constituents presumably feel entitled to. Also, where there is a gap between that target and the reality, there needs to be a direction of travel.” Over the next few years, therefore, we will be able to see some genuine gains for areas such as Cornwall—a bit late for the current spending review, but perhaps setting out progress towards the next one.
The Government are making capital investment and there is the prospect of a little more investment through European Union structural funds but, in addition, I hope that Cornwall can aspire to get the money to which it is entitled for policing, local government, health and education. Flooding is another, related example, which was mentioned to me by the local authority. Sadly, as elsewhere in the country, we have had some problems with flooding in Cornwall, although not in my constituency. The Bellwin formula used by the Department for Environment, Food and Rural Affairs to give extra support to local areas operates on the basis of local authorities. In an area such as ours, where we now have a unitary authority, we have only one allocation for the council, whereas with two-tier authorities district councils are involved as well, which gives those areas more flexibility and more money per head of population. It is another example of how areas that have sought to be more efficient—unitary authorities, in times of public spending difficulty, have undoubtedly created efficiencies—are penalised when they seek to offer maximum support to communities that have suffered tragic flooding episodes.
I am grateful, Mr Gray, for the opportunity to raise this matter, and I hope that the Minister can address my concerns, particularly on damping, so that we can move towards obtaining the funding to which Cornwall and similar areas are entitled.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I am grateful for the opportunity to speak again under your chairmanship, Mr Gray, and to discuss the issues raised by my hon. Friend the Member for North Cornwall (Dan Rogerson). I congratulate him on securing this debate. He has been a vociferous campaigner for all things Cornish—the Cornish economy, the Cornish language and, more recently, the Cornish pasty. I am pleased to discuss Government funding for Cornwall today.
I will turn specifically to funding in my hon. Friend’s region shortly, but first I should like to talk more generally about the way in which Government funding is allocated throughout the UK, and to describe the changes we are making to encourage growth at national and regional levels. The 2010 spending review set out how the Government would carry out the UK’s deficit reduction plan over four years, and included fixed departmental budgets. We protected spending on the NHS, schools, and overseas aid, and we chose to prioritise fairness and social mobility, to focus on spending that promotes long-term economic growth, to reform public services, to shift power away from central Government to local level, and to improve value for money.
Some of those decisions at national level will have a significant impact in Cornwall. Having enjoyed a splendid holiday in my hon. Friend’s constituency a couple of years ago, I know that tourism is of considerable importance to Cornwall, although he is right to point out that its economy is much more than merely tourism; it is more diverse than that. We invested in the “Great” campaign, which was launched to deliver long-term trade and tourism benefits throughout Great Britain, and I am sure that Cornwall will benefit significantly from that.
The most important decisions for Cornwall have been those on local authority expenditure in the region—a point that my hon. Friend raised. Local authority expenditure is split between grants from central Departments, which are set in the spending review, and localised expenditure, which is largely funded by council tax. I am sure my hon. Friend will be pleased to note that during the current settlement period, Cornwall’s reductions in spending power have been smaller than the average in England. Spending power in the county fell by minus 3.3% in 2011-12 and minus 2.9% in 2012-13, compared with an average of minus 4.5% and then minus 3.3% for councils in England. I want to turn to the point my hon. Friend raised about the damping mechanism.
Dan Rogerson
I did not use all the time I might have done, so I hope that we can continue our discussion a little further. The problem for some areas such as Cornwall is that historically the council was run by independents who took a firm view on keeping the old rates down, so historically the area has low council tax, compared with counties such as Surrey. The Government are seeking to limit the impact of council tax rises—they have extended proposals for that through the Department for Communities and Local Government—but our base is already low, so there is an impact from that as well as the central grant.
Mr Gauke
My hon. Friend raises a fair point, and has put it on the record. I recognise that councils that have, over many years, shown greater determination to control their costs have less fat that can be cut than other authorities where that has not been the case.
On the damping mechanism, it is right that the Government must balance the interests of places with growing and declining needs, and Cornwall is an area with growing needs. Damping has been used to avoid steep jumps in council tax and demands on areas with declining needs. DCLG has consulted on a new funding system from 2013, and the Government have indicated that we want to move away from damping. My hon. Friend referred to rurality, and asked whether that is taken sufficiently into account. Again, DCLG has consulted on changes to the formula, and he will be aware that it will publish the draft local government finance settlement for 2013-14 for consultation shortly. It will set out funding amounts for each authority, and I am sure that my hon. Friend will be interested to read it. It will shed some new light on damping. I hope that he finds that helpful.
The formula exists for a reason—to strike a balance between the needs of areas with growing and declining populations—and it seeks to make an assessment that strikes that balance. We will say more about that shortly.
Dan Rogerson
Another area that the National Audit Office highlighted in its report on academy schools, particularly the early academies that were set up under the previous Government, is the generous settlement they were given, perhaps to encourage people to take a new step. However, as the number of academies has risen, there is an issue with that funding, which is perhaps over-generous compared with that for maintained schools. The report acknowledges that gap and the need for convergence, and the Minister’s ministerial colleague, Lord Hill, talked to us about that. The issue is the direction of travel, because the damping effect will be difficult to achieve.
Mr Gauke
All I would say about that is that the Department for Education is also looking at the school funding formula in the light of some of those issues, and I am sure that Education Ministers will respond in due course.
Until now, the main local authority grant from central Departments has been a formula grant distributed by DCLG through local government finance settlements. In line with our priority of encouraging growth, from April 2013, we will replace the current fairly complex formula grant regime with a business rates retention scheme to help provide a stronger local growth incentive. Councils that succeed in growing their local economy will have a direct boost to their coffers. Quite simply, the rationale behind the change is that we want to give individual councils, including those in Cornwall, every opportunity to promote growth. We want them to use their influence in planning, their investment in skills and infrastructure, and their relationship with local businesses to create the right conditions for local economic growth. This year’s local government finance settlement from April 2013 will be the first under the new arrangements.
The new scheme incorporates strong protections as well as incentives. There will be a safety net for places that, in any year, see their income from business rates fall by more than 7.5% below their baseline funding level. Following consultation, we have strengthened the incentive by ensuring that the maximum levy will be capped at 50p in the pound. That will mean that at least 25p in every pound of growth will be retained locally, and shared between billing authorities and any major precepting authorities. Recent economic analysis, carried out by DCLG, suggests that the proposals could deliver a £10 billion boost to gross domestic product by 2020. Obviously, that figure covers the whole UK, but the change will, I am sure, mean real benefit in Cornwall.
Having set out how the system works and the improvements that we are making, I shall quickly discuss the measures announced in this year’s autumn statement. Then I shall deal specifically with Cornwall. The autumn statement from my right hon. Friend the Chancellor of the Exchequer contained measures to do three things: first, to protect the economy; secondly, to promote growth; and thirdly, to ensure fairness. As part of that statement, we have had to ask all areas of Government, including local authorities, to go further. For most areas of Government, that means an additional top-slice of 1% in 2013-14 and 2% in 2014-15. However, recognising that local authorities are already receiving a funding reduction from holding down council tax in 2013-14, and to support them in transforming services to meet future reductions, we took the decision to exempt local government from the top-slice in 2013-14.
However, looking towards long-term economic stability, we needed to be wary. Local government spending accounts for about one quarter of all public expenditure, so we have asked local government to join other Departments in absorbing the 2% cut to departmental expenditure limit grants in 2014-15—that is £447 million—and prepare for further reductions. The savings made thus far on administration, property costs and IT services across Whitehall have proven that significant savings can be found, and those savings will have a significant impact for the whole UK, because it was through them that we were able to announce a number of measures that will have positive impacts across the UK, including in Cornwall.
Dan Rogerson
I am grateful to the Minister for setting out the approach that the Treasury is taking in negotiation with other Departments. He is right to point out that local government is doing all that it can to achieve the targets, which are quite challenging. He refers to the potential reduction in future years of 2%. In line with the concept of fairness, which is at the heart of what the coalition is trying to do across income levels, is the geographical issue also being considered, so that those local authorities that have been more disadvantaged, as he acknowledged earlier, might feel slightly less of that pain than those that have been over-funded historically?
Mr Gauke
Again, I am inclined to refer my hon. Friend to the DCLG announcement to be made very shortly on the local government formula, and the consultation that will follow. I have no doubt that he will look closely at that. I do not think that he will have too long to wait before he has the opportunity to do so.
It is worth pointing out that the difficult decisions that we have made enable us to take a number of steps that will benefit the country as a whole, including Cornwall and the rest of the south-west. For example, the further increase in the personal allowance will benefit 2.1 million people in the south-west, lifting an additional 20,000 people out of income tax entirely; and 1.2 million pensioners will benefit from an additional £2.70 a week increase in the state pension. The significant temporary increase in the annual investment allowance from £25,000 to £250,000 will help businesses across the south-west.
We announced £300 million of additional investment in empty homes and affordable homes across England. I know that housing is an important issue in Cornwall, and my hon. Friend has raised it. That announcement is in addition to more than £150 million of planned investment to build more than 9,000 new affordable homes in the south-west and return about 500 empty homes to use across the south and south-west.
We will invest further in flood defences—another point raised by my hon. Friend—and, significantly for households and businesses in Cornwall, we are cancelling the fuel duty rise planned for January 2013. That will help the owners of the 3.5 million motor vehicles in the south-west, saving a typical driver £40 a year and a haulier £1,200 a year. However, as my hon. Friend mentioned, that is not the only good news for motorists in and around his constituency. The autumn statement announced a number of key infrastructure projects, one of which involves the £30 million that we will contribute towards a 2.6 mile dualling of the single carriageway section of the A30 between Temple and Higher Carblake, which will include changes to junctions.
Dan Rogerson
I am grateful to the Minister for giving way again. He is being extremely generous, as was the Treasury with the project that he describes, although I have to acknowledge that half the costs will be funded locally, through local authorities. That is an excellent example of what he was talking about earlier: £30 million is coming from central Government and £30 million from local government. He also raised the issue of fuel duty. Again, I welcome the Government’s decision on that. I understand that they are also having discussions with the European Union in relation to what it has done for islands, such as the Isles of Scilly in the constituency of my hon. Friend the Member for St Ives (Andrew George), and whether rural parts of mainland Britain could also benefit from a further reduction—
Dan Rogerson
A 5p reduction. That would have a huge impact, particularly on small businesses in my constituency. I urge the Minister to redouble his efforts to secure that.
Mr Gauke
My hon. Friend is right to say that we are having further discussions with the European Commission about that. Obviously, we will update the House as soon as we are able to do so. However, I do not want to leave the A30 just yet—not a comment that people often make. The scheme to which I referred, and for which I know my hon. Friend has campaigned long and hard, will relieve congestion and improve journey times. It will also attract business growth and inward investment to Cornwall by improving links to the rest of England. The Government welcome the commitment from Cornwall council, to which my hon. Friend alluded, to deliver and part-fund the scheme on behalf of the Secretary of State. Its drive in taking the scheme forward demonstrates how much of a priority it is to the council and to Cornwall generally. Work on the scheme is set to start in 2014-15, subject to the completion of planning processes and funding agreements, and the road is due to be open to traffic in 2016. I am sure that it will bring real benefits to the area.
My hon. Friend may feel that my contribution took a long time to reach Cornwall, and I am sure that is a feeling that many motorists will at times sympathise with. However, it is important for us to look at the national context of spending and the impacts that decisions made at that level will have in each region. I hope that my comments have been useful in laying out the Government’s position.
Andrew George
I know that my hon. Friend the Member for North Cornwall (Dan Rogerson) raised, while I was still in Committee, the issue of health funding and the principle of parity. Cornwall has received more than £200 million less over a six-year period than the Government themselves have said it should receive—than its target funding. I know that the Minister has deferred to each Department when he has answered questions on these issues, but as for his opinion, does he think that such a distance between what is allocated and what the Government say that a local area should get is acceptable?
Mr Gauke
Of course, as a Government, we are committed to ensuring that there is a fair funding system. As a constituency MP, representing a Hertfordshire seat, I know that often one can look at particular areas, including health funding, where there are disparities between what one might expect—what one might see as the right amount for one’s area—and the national average, and that can be deeply frustrating for Members for Parliament and for our constituents. My hon. Friend the Member for St Ives (Andrew George) makes the case well for Cornwall. Of course, as a Government, through all Departments, including the Treasury, we will look at what we can do to ensure that we have a funding system that is fair.
I am conscious of the time, so I will conclude. I congratulate my hon. Friend the Member for North Cornwall on securing the debate, on his work in relation to the A30, and on raising the points that he has raised today. Of course, as a Government, we want to ensure that we have a fair funding formula, whether that be for health, education or local government. That is something that we recognise across Government, including in the Treasury. On the specific issue of damping that my hon. Friend raised, I think that more information will be available to him very shortly.
Welfare Reform (Disabled People and Carers)
(12 years ago)
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Mr Christopher Chope (in the Chair)
Owing to the interest in this debate, it will be necessary to impose a time limit on speeches. I shall decide what that will be after the hon. Member for Gateshead (Ian Mearns) has finished his speech.
Ian Mearns (Gateshead) (Lab)
I am happy to serve under your chairmanship, Mr Chope.
Today’s debate, I hope, will categorically highlight the unfairness of the Government’s welfare reform agenda on disabled people, their carers and families. I urge the Department for Work and Pensions, in collaboration with the Minister for disabled people, the hon. Member for Wirral West (Esther McVey), to conduct a cumulative impact assessment on the real-term effects of welfare reform on some of the most vulnerable people in our society. I was urged by a number of groups to try to secure today’s debate. The importance of the debate and the issues within it is reflected by the number of hon. Members present this afternoon. I am gratified, and I thank my hon. Friends for coming along to support this debate.
The Chancellor and the Prime Minister have repeatedly lectured us about the need for fairness and said that we are all in this together. However, as I hope to demonstrate conclusively in this debate, it is not the richest, most powerful or most able in our society who will pay the price of the Government’s calculation and uncaring disregard, but the least able, most vulnerable and least powerful—the disabled.
I am sure that hon. Members will have read, or at least heard of, the report, “The Tipping Point”, by the Hardest Hit campaign, which concluded:
“Many disabled people feel that they are living on the edge, and that the loss of even a small amount of income could tip their already complex lives into greater dependence and insecurity.”
This summer, the Hardest Hit coalition surveyed more than 4,500 disabled people on their views and experiences of the welfare and social care systems. It also conducted a series of 50 in-depth interviews with disabled people and a poll of more than 350 independent welfare advisers. From the study, it discovered that disabled people and their families are struggling to make ends meet and feel increasingly nervous about the future. The Government need to act urgently to arrest the slide of disabled people into entrenched isolation and poverty.
Disabled people have experienced a massive drop in income—about £500 million—since the emergency Budget of 2010. Recent reports have shown that just in the past year, cuts for typical disabled households ranged from £200 to just over £2,000. The latest estimates suggest that disabled people will experience £9 billion of cuts over the lifetime of this Parliament—half the total cuts to the welfare budget.
Mr Jim Cunningham (Coventry South) (Lab)
Will my hon. Friend touch on the fact that many people who are permanently disabled now have to go through assessment schemes, which cause a lot of anxiety in their families? At the end of the day, there is a long wait to see what those results are and, more importantly, what the effects will be on those people and their families.
Ian Mearns
I thank my hon. Friend for that intervention, and I will reflect on that entirely. Added to the ordinary stresses of life for disabled people and their families, the mental anguish of not knowing the future is piling pressure on to many family circles.
I am sure that hon. Members on both sides of the Chamber will have heard of Pat’s petition, which closed last month. The petition was signed by 62,693 people, calling on the Government to
“stop and review the cuts to benefits and services which are falling disproportionately on disabled people, their carers and families”.
To appreciate fully the widespread concerns and understand why a cumulative impact assessment is essential, it is vital to look at the specific elements of welfare reform that are affecting disabled people, their carers and families. First, the introduction of universal credit, which will replace six income-based benefits and tax credits for people of working age with a new single benefit, will result in 2 million households seeing a drop in their income, with disabled people being among those worst affected. The Department’s own equality impact assessment from November 2011 predicted that disabled households would lose £37 a week, compared with non-disabled households, which would lose £26 a week. Quite honestly, it almost feels that the malice knows no bounds, as the Government are targeting even disabled children—they are halving support for those children from £52 to £26.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
My hon. Friend mentions children. I was recently contacted by a father in my constituency, whose daughter has severe cystic fibrosis. Her claim for disability living allowance has just been refused, and the appeal has also been refused. Given that the Government’s stated aim is to cut spending on disability payments by 20%, and that, in the north-east, where my hon. Friend is also from, Atos has been appointed to deliver the tests for people, does he share my concern that such situations will become more common in the future rather than less?
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I congratulate my hon. Friend on securing this debate about an issue that is burning hot in my constituency. Does he agree that Atos is not the problem? Although it has to administer the problem, it has been set certain parameters in which to work. The consequence is that everyone blames Atos, when the Government should be blamed for all that is happening to disabled people.
Ian Mearns
That is the case. We can hardly blame Atos for managing a system to its own benefit, because it is on a sort of performance-related pay that relates to the number of assessments it makes.
The cumulative effect on children could be as much as around £1,300 a year. Disabled children are losing that sum.
Another major change occurring through welfare reform is the introduction of the personal independence payment, which will replace disability living allowance. The disability Minister made a statement last week, which I thought was a little odd to say the least. She said:
“By October 2015, we will have reassessed 560,000 claimants. Of those, 160,000 will get a reduced award and 170,000 will get no award, but 230,000 will get the same…support.”—[Official Report, 13 December 2012; Vol. 555, c. 464.]
How could the Minister or the Department have drawn those conclusions before having done a single assessment of any individual? We already know that the outcome will be that 160,000 will get a reduced award, 170,000 will get no award, and 230,000 will get the same sort of support. I hope that I am not the only Member slightly concerned that the Minister, before any assessments have taken place, already has figures of those who will get a reduced award and those who will receive no support. Surely, it is down to the assessment to determine what the outcomes will be, but it seems that the Department has already pre-determined the outcome of the assessments for each individual.
Pat Glass (North West Durham) (Lab)
I congratulate my hon. Friend on securing this debate. The interest here today shows how concerned we all are, as are the people we see in our constituencies. I share my hon. Friend’s concern. I wonder whether people will simply be reassessed and reassessed until they no longer qualify for the benefit. I want to raise the case of a constituent of mine, a terminally ill constituent—
Mr Christopher Chope (in the Chair)
Order. This is an intervention. If you wish to make a speech in due course, you can catch my eye, make a speech, and refer to individual cases.
Mr Christopher Chope (in the Chair)
Order. You cannot, because this is an intervention. I ask you to resume your seat. If we allow interventions to be too long, it will inevitably take time away from other people. The hon. Gentleman introducing the debate is not in a position to comment on individual constituency cases.
Ian Mearns
Returning to “The Tipping Point” report, it found that 84% of disabled people believe that losing their DLA would drive them into isolation and into struggling to manage their condition. Nine in 10 disabled people fear that losing their DLA would be detrimental to their health.
Kate Green (Stretford and Urmston) (Lab)
I, too, congratulate, my hon. Friend on securing this important debate. Many disabled people will be pleased to see it happening this afternoon. Does he agree that a further concern and uncertainty about DLA is whether it will be used by local authorities in the calculation of income for determining housing benefit? While the Burnip case remains unresolved—the Government are planning to appeal—we really do not know how much DLA people will have to spend on their needs.
Ian Mearns
My hon. Friend makes a very important point. That is why we are asking for a cumulative impact assessment of all the welfare reforms, including the housing benefit reforms.
Some 65% of respondents in work stated that without DLA they would not be able to work; 30% of disabled people stated that without DLA their carer would not be able to work; and 75% of disabled people said that losing DLA would mean that they needed more social care support from their local authority. Cumulatively, we can see a great deal of worry and concern emanating from the households of disabled people.
The Government say that they have to cut spending, but cutting DLA will simply mean that they have to spend more money on other things. It is clearly a false economy. We need to take into account the knock-on and implementation costs of replacing DLA with PIP. The Hardest Hit coalition concludes that the Government have over-estimated the total amount of savings that that will generate by, potentially, £1.6 billion.
Let us consider what is happening with contribution-based employment and support allowance. This is affecting many of my constituents at the moment. The Government’s decision to place a time limit of 365 days on those in the work-related activity group for ESA and to implement that retrospectively is forcing many disabled people on to jobseeker’s allowance. We should bear it in mind that there is no magic tree sprouting jobs at the moment, particularly not in places such as the north-east of England and particularly not with the Government’s economic plan. We talk an awful lot in the House about welfare to work, but it is a two-part equation—welfare and work—and I am sorry to say that, in my constituency, work is hard to come by, and in the north-east of England as a whole it is particularly hard to come by at the moment.
One of my constituents suffers from bronchial pulmonary dysplasia, is too ill for a heart and lung transplant, has been on steroids for 37 years, has osteoporosis, has kidney failure, cannot walk a single step unaided, has a fracture in her right arm, has left arm damage, has osteoarthritis and is diabetic. She was initially placed in the work-related activity group and told that she would need to find work. It should be borne in mind, as I am sure hon. Members have already fathomed, that she is housebound. Only after my intervention did the Department for Work and Pensions realise that a mistake had been made.
I do not want to talk extensively on the topic of Atos or its assessments, because frankly I would need all day. I have been sent a huge amount of information from concerned constituents and lobby groups for this debate, and I could quite easily speak for 10 hours. Unfortunately, I will not have that privilege, but it is a common occurrence in my constituency that people are concerned and genuinely feel harassed by the assessment process.
Caroline Lucas (Brighton, Pavilion) (Green)
This is a very important debate. Does the hon. Gentleman agree that one of the perverse outcomes of the reforms is that the constant reassessment is making sick people even more ill? The financial implications, as well as the health implications, are completely negative. This system simply is not working.
Ian Mearns
I absolutely concur with that. For people who have a physical disability, the added stress that that brings can often mean that their mental health deteriorates and they end up suffering genuine mental illness. That is no laughing matter for anyone affected by such an affliction. Not a week goes by when I do not get a piece of casework because Atos has assessed one of my constituents as fit for work and the decision is somewhat questionable. From my perspective and that of many charities and professionals, the work capability assessment is not fit for purpose and is particularly inept at assessing people suffering from mental health problems.
According to Mind, 40% of people applying for ESA are doing so because of mental health problems, yet it found that a lot of people with mental health problems are waiting for a work capability assessment. Some 87% of respondents said that the prospect of a reassessment was making them unduly anxious. More than one third had increased their medications as a result of anxiety, and 51% reported that it had made them have suicidal thoughts. Those data are shocking. We should not be vilifying the most vulnerable people in our society; they are contemplating taking their own lives.
I am not sure whether many hon. Members have heard of the website Calum’s List. It shows how many suicide deaths have been directly attributed to welfare reform by coroners. So far, there have been 24. How many more cases are there that have not been so attributed by a coroner? Surely the Minister should be looking into the tragedies that the Government’s agenda is causing.
In my constituency, I was provided with an interesting statistic by the local citizens advice bureau. In the last year, it has conducted 1,416 welfare benefit appeals. Of those, 1,201 were successful. That shows that of all benefit appeals that the CAB assisted Gateshead residents with in the last year, more than 80% were won. That prompts the question: why did the system fail in the first place? Surely it is a complete waste of time and money.
Jessica Morden (Newport East) (Lab)
The Government will argue that the system and the process are getting better, but I saw a constituent the other day with a serious brain injury whose benefits had been stopped because he did not go for his reassessment, but he did not go because he has short and long-term memory problems. These cases just keep on coming. Does my hon. Friend agree that that does not fill us with confidence for the introduction of personal independence payments?
Ian Mearns
Unfortunately, my forecast is that, in areas such as the one that I represent, with its particular age and disability profile, we MPs can look forward only to a tsunami of casework coming in our direction. We need to reflect on how we will deal with that.
Some figures even suggest that the work capability assessment appeals cost £50 million annually. Does the Minister really think that those assessments are effective and cost-efficient? A lady in my constituency with significant mental health issues tried to claim disability living allowance but was unsuccessful, and subsequently attended a tribunal without representation and lost. She visited the local CAB for help, and it assisted her in appealing again at the tribunal. The decision was overturned, and she was awarded £4,000 in backdated benefit. She also gained an extra £41 a week to live on. She reports that that has made such a difference to her physical and mental well-being, she no longer has to choose whether to “heat or eat”—a dilemma that many families with disabled people now face.
We need to ensure that the assessment criteria take proper account of the full range of barriers faced by people with disabilities and health conditions, make the assessment and reassessment process as simple, transparent and proportionate as possible, and ensure that robust evaluation and monitoring processes are in place.
Let me come on to social funds, which were designed to help people with expenses that are difficult to meet on a low income. The centrally provided social fund has been abolished and replaced with the devolution of discretionary social fund emergency payments, including crisis loans and community care grants, to local authorities. The making of those payments has been delegated to local authorities, and of course we know about the disproportionate cuts that authorities in the north-east have had to make in their mainline budgets.
About one third of the users of crisis loans and community care grants are disabled people. Localising that provision could have a significant impact on them, as there is no statutory duty obliging councils to provide that service or ring-fence funds for that purpose. In other words, local authorities can choose to use that money for other purposes. Given the tight budgets that they are currently overseeing, there is a high likelihood that the money will be injected into other services. The Department for Work and Pensions acknowledged that itself in its research.
Nic Dakin (Scunthorpe) (Lab)
I congratulate my hon. Friend on obtaining the debate. Does he agree that Jobcentre Plus in localities such as Scunthorpe is concerned about that transfer of responsibility to local authorities, which are ill prepared to take on that very important task?
Ian Mearns
I could not agree more. My local authority has shed about one third of its administrative staff. That prompts the question: how will a local authority with such a huge cut in its capacity to deliver for its people ever be able to come to terms with the demands that will be placed on it?
Another distressing topic at the moment for disabled people and their carers and families is, of course, the bedroom tax. The reduction in housing benefit for social housing tenants whose accommodation is deemed to be too large for their needs will disproportionately hit households with disabled people. Of the 670,000 people estimated by the DWP to be under-occupying accommodation in the social rented sector, two thirds of those affected may be disabled. Many organisations such as Carers UK believe, as do I, that the policy will have a detrimental impact on certain groups of carers and many disabled people. Some families may be unable to cover the shortfall and be forced to move.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Inclusion Scotland made the point to me that it is not only about financial costs. If the family of a disabled person moves away to get smaller accommodation—if it is available—they will lose support networks and contact with carers and families. If they have to move, due to the tax, they will lose those things, which they need to survive. I am sure that point has been made to many other hon. Members.
Ian Mearns
I could not agree more. I thank my hon. Friend for making that point; it is absolutely true.
Steve Cowen, the chief officer of the Gateshead Carers Association—I cannot ignore it, because its office is next door to mine—has told me about the devastating impact that the proposals will have on carers and their families in Gateshead. Steve says that carers are the glue that holds the health and social care system together. The reforms hit them hard, and hit them again and again.
Nick Smith (Blaenau Gwent) (Lab)
I congratulate my hon. Friend on securing the debate. Does he agree that the bedroom tax needs to be promoted? The Government need to raise awareness of it sooner rather than later, so that families can budget and prepare for it. It will be a terrible shock for many.
Ian Mearns
I am grateful to my hon. Friend. He is right, but I need to make some progress, so I will move on swiftly.
A member of a couple could have a disability that means that the couple cannot sleep in the same room, for entirely appropriate reasons. A couple may need an extra room for equipment. A local authority—or a family—may have spent a considerable amount of money adapting a property for a family who are then forced to move, which not only would be distressing and disruptive to care arrangements, but could risk a greater long-term cost, because the adaptations need to be replaced in the new, smaller home. It is clearly daft.
Cuts in disability benefits imposed by the Government will, of course, affect disabled people living across the whole country, but, as with almost every other aspect of the Government’s approach to public policy, the impact is felt most keenly in areas with the greatest number of people living in relative poverty—the areas with the greatest need. Wales has the highest proportion of disabled people in the UK, with one fifth—21%—of working-age people living with a disability. It also has the highest proportion of benefit recipients for all types of benefits—20% of people of working age. Recent statistics show that just over 10% of Northern Ireland’s population are in receipt of disability living allowance.
A report prepared for the DWP by Christina Beatty, Steve Fothergill and Deborah Platts-Fowler listed the regional differences. The 20 areas with the greatest proportion of working-age people receiving DLA include Merthyr Tydfil, Neath, Blaenau Gwent, Easington, Caerphilly, Knowsley, Glasgow, and Liverpool—the list goes on. In my constituency, about 4% of people are affected. Surprise, surprise, the 10 areas with the lowest proportion of working-age people receiving DLA include Runnymede, South Northamptonshire, Kingston upon Thames, south Buckinghamshire, Windsor and Maidenhead, Surrey Heath, and Wokingham. So much for “We’re all in this together.”
The report from the Hardest Hit coalition highlighted the dismay felt by many disabled people on finding that they have become the easy target for cuts. Perhaps more shocking is the fact that the Government’s rhetoric justifying disability benefit cuts is hardening public attitudes. Many disabled people feel that the media portrayal of benefit scroungers is behind the increasing amount of disability hate crime, which is at an all-time high. That is despite the fact that estimated overpayments of DLA due to fraud make up less than 0.5% of total spending. As anyone who reads the Daily Mail will know, there are a lot of myths in the debate about welfare reform, and some are very damaging to disabled people. We need to confront those myths head-on. They are lies.
Official levels of fraud in disability and out-of-work benefits are far lower than public perceptions and polling suggest. The Office for National Statistics highlights that just 0.3% of overpayments for incapacity benefit were due to fraud. Figures on fraud for both DLA and incapacity benefit are outstripped by the figures for official error; in other words, mistakes by officials at the DWP cost the taxpayer more than fraud. Though it is true that the welfare bill grew in 10 years, disability benefits were not the main cause of that expenditure or a ballooning welfare budget.
Disabled people feel that they have been deliberately targeted, even though there is a clear alternative. Although estimates vary, tax evasion and avoidance cost the Government between £50 billion and £100 billion a year. It is estimated that a mansion tax on expensive properties, above a threshold of £2 million, would affect an estimated 74,000 people and, at face value, raise £1.7 billion. A financial transaction tax of about 0.05% on transactions such as those involving stocks, bonds, foreign currency and derivatives is possible. The bank levy introduced in January 2011 raises £2.5 billion annually, but a Robin Hood tax could raise up to 10 times that amount—£20 billion a year.
Whatever one’s view of the trade-offs, the priority should be the need to protect the poorest. In October 2010, the Prime Minister promised always to look after the sick, the vulnerable and elderly. The Chancellor said in his June 2010 emergency Budget:
“Too often, when countries undertake major consolidations…it is the poorest—those who had least to do with the cause of the economic misfortunes—who are hit hardest. Perhaps that”
has been
“a mistake that our country has made in the past. This coalition Government will be different.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]
Really?
There are practical things that the Government can do over the next year. The first is to learn from the mistakes of the work capability assessments and ensure that the assessment for personal independence payments is as fair as possible. Secondly, they could review the work capability assessment, starting with the WCA descriptors, to ensure that it works consistently and fairly for all individuals with limited capability for work or work-related activity. Thirdly, they could get the fundamentals of universal credit right, ensuring that disabled people do not lose in cash terms due to the transition to universal credit from 2013. Fourthly, and most importantly, as loth as I am to implore the Government to do anything, I implore them to conduct a thorough cumulative impact assessment on the impact of all welfare reforms on disabled people, their carers and families. When the Government collect the results, they must act on them, so that no one is left floundering in unnecessarily deprived circumstances because of a welfare reform Act, the results of which were all too easy to predict.
Mr Christopher Chope (in the Chair)
Order. Owing to the number of people who wish to participate, I shall limit the time for speeches to four minutes. If there are a lot of interventions, it may be necessary to reduce that time. The wind-ups will start at 3.40 pm.
Sir Tony Baldry (Banbury) (Con)
I shall focus on the 6 million carers. I want to ensure that I have understood the legislation correctly. My approach to the detail of Department for Work and Pensions legislation is a bit like my approach at school to algebra—I am not always confident that I fully understand it.
Am I right to think that carer’s allowance will continue to exist as a separate benefit outside universal credit? Will universal credit awards include a carer element, which will continue for as long as the carer provides care for at least 35 hours a week to a severely disabled person? Am I right to think that, within universal credit, claimants will qualify for a “limited capability for work” element or a carer element—not both—but households will still be able to get a “limited capability for work” element for one member and the carer element for another?
It will be helpful if the Minister explained to us all—perhaps in writing or in answer to a parliamentary question—what, for the purposes of legislation, constitutes a “household”. Some of the misunderstandings or confusions arise from how a household is defined. As I understand it, some households will have an increased earnings disregard to reflect their different needs. Carers will not be a specified group that is entitled to an increased disregard, but it is expected that a majority of them will benefit from income disregard because of other family circumstances, including the maximum disregard of £7,000 if they live in a household with a disabled partner. Does that apply only to households in which there is a disabled partner, or to those in which any other relation is disabled? As the Minister will be aware, there are concerns about households with, for example, adult disabled children.
Exemption from the benefit cap will be extended to households that include a member who is in receipt of the personal independence payment. Some households in receipt of DLA will be exempt from the benefit cap; for example, if a carer’s partner is in receipt of it, the household will be exempt from the cap. Are such households only those in which there is a disabled partner or all households in which there is a carer? Will the Minister clarify that, or write to me if I have misunderstood?
Sir Tony Baldry
I will not.
As I understand it, carer’s allowance will be linked to receipt of either rate of the daily living component of PIP. Is that correct? Obviously, it is important to ensure that people caring for those with greatest needs get the appropriate level of support, and disabled people clearly face extra costs. Am I right in thinking that households receiving DLA, PIP or the support component of the employment and support allowance will and should be exempt from the benefit cap? Have I got that right?
Will housing benefit regulations recognise that some people need an additional room for an overnight carer who lives elsewhere? To go back to the exchanges in the main Chamber earlier this week, am I right that significantly adapted accommodation will receive additional discretionary housing payments funding of some £30 million from 2013-14 to cover that group and foster carers, and that local authorities will have a fair amount of discretion about how that is applied?
Universal credit should provide support for carers and improve their opportunities to maintain links with, and get back into, the world of work.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I rise to speak on behalf of the many constituents coming into my office every week who are affected by this Government’s welfare reforms. At every opportunity, we need to challenge the ideology underpinning those reforms and the disastrous economic policies that are wreaking devastation and havoc on ordinary people’s lives. That ideology is about dividing and ruling—pitting the public sector versus the private sector, so-called shirkers versus workers and the able-bodied versus the disabled.
I am not alone in being deeply offended by not only the content of the Chancellor’s autumn statement and its further hit on welfare recipients, but the characterisation of people receiving benefits. Terms such as “scrounger”, “shirker” and “workshy” are used deliberately to vilify people on benefits as the new undeserving poor. The issue for this Government, as in relation to so much of what they are doing, is that that is just not true. Most people on benefits are in work and are net contributors to the Exchequer.
The recent study by the Joseph Rowntree Foundation and the New Policy Institute on research monitoring poverty has shown that 6.1 million people are in poverty in working households, which is 1 million fewer than the number of workless households in poverty. There is no evidence of a culture of worklessness. Evidence from the Institute for Fiscal Studies has shown that the autumn statement will affect the 10% poorest in our country, who will have the biggest percentage drop in their income. I am relatively new to politics, but I think that that is an absolutely disgraceful misrepresentation of the facts—not only on welfare, as we have seen in the past, but on the economy and the NHS too. This country deserves better.
I am proud of our model of social welfare and its historical roots. It was borne out of world war two, during which we were all in it together. I want to retain that model, which is underpinned by inclusion, support and security for all, so protecting us in case the worlds of any of us fall through and assuring the dignity and basics of life. Those basic securities are going, and the dignity and respect that all people should be afforded is often sadly lacking.
I want to highlight the effects of welfare reforms on disabled people and their families and carers. The context of those reforms has already been mentioned, but I want to emphasise the effects of the proposed cuts—the 1%—in out-of-work benefits and the change from DLA to PIP. The economy is already depressed, with 6.4 million people lacking the paid work that they want, and 1.4 million people in part-time work who want full-time work, which is the highest figure in 20 years. We have already heard about the increase in living costs, with people having to choose between eating and heating, and cuts to local services—more than half my local council’s budget is being attacked—and social care. Those will have short-term effects on disabled people, but we must also bear in mind evidence about the impacts on life expectancy and the exacerbation of existing health inequalities. The cuts in motability allowance are just one example of how disabled people are being affected. I will finish now, Mr Chope, but you can see the scale of the issue.
Sheryll Murray (South East Cornwall) (Con)
It is a pleasure to speak under your chairmanship, Mr Chope. I congratulate the hon. Member for Gateshead (Ian Mearns) on securing this debate.
It is important to discuss the Welfare Reform Act 2012, but a lot that has already been said in this debate makes for unhappy listening. The campaigns that exist about the effects of the Government’s welfare reforms on disabled people have led to an outbreak of fear-mongering and panic. It was important to have this debate to put a balanced argument on the record, so that people understand that the Government are doing all they can for disabled people and their families in a harsh economic climate.
The recent Welfare Reform Act was an attempt to help disabled people and their families. I welcome the fact that, in recognition of the additional needs that disability brings, all households with somebody who is receiving disability living allowance or constant attendance allowance will be exempt from the cap.
Kate Green
It is not absolutely correct that all households with somebody in receipt of disability living allowance will be exempt. If there is an adult non-dependent child in receipt of DLA in the household, that exemption will not apply to the main household.
Sheryll Murray
The hon. Lady is obviously going along the fear-mongering route, and perhaps the Minister will address that. The exemption will be extended to include a person in receipt of a personal independence payment, which will replace DLA for individuals of working age from April 2013.
The current system has its faults. One of my constituents has applied for DLA, because he is partially sighted and his sight is deteriorating rapidly. Medical records that were used in determining whether he was eligible for DLA were out of date, despite his ophthalmologist having issued up-to-date information more than once. My constituent was refused DLA, but he is appealing. I hope that, under the new system, he will receive what he needs, and that any appeals can be dealt with promptly and in a way that assists and protects those in need. Another constituent was so poorly that my senior caseworker had to go to his home to help him fill out his ESA and DLA forms. I want the Government to assure me that the application process will be accessible for the most vulnerable in our society and that there will be help for those who have difficulty with any application.
I will continue to fight for constituents who are not getting the benefits they need because of their disability. I am determined not to let the most vulnerable in our society suffer at the hands of bureaucracy. There were issues with the system as it stood, but I hope the Welfare Reform Act will address them. It does a wide range of things, such as reducing the culture of welfare dependency for those who can work. It has the intention of protecting and helping the disabled, and I look forward to the Minister’s comments.
Grahame M. Morris (Easington) (Lab)
This is the first time I have served under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing this timely and important debate. The number of Opposition Members here is testament to the importance of this subject. It is excellent that they have come along to express concerns on behalf of their communities and of disabled people, who are up in arms.
I would like to challenge the hon. Member for South East Cornwall (Sheryll Murray), who suggested that Labour Members were somehow scaremongering about the scale and impact of the cuts. For the record, I have done a little research on my area, County Durham, and the impact is absolutely huge: changes to ESA will affect 26,000 people there. The Government’s 20% reduction in DLA funding and the predicted escalation in the case load will cost County Durham £12.83 million. In my constituency alone, £2.76 million of support for disabled people will be withdrawn as the migration to PIP occurs. Overall, County Durham is predicted to lose £11.59 million a year in income just from changes to tax credits. We could contrast that with what is happening in some of the more affluent parts of the country, such as the royal borough of Kensington and Chelsea, which is predicted to lose just £1.7 million. If we break the figures down according to population, we find that £77.22 is lost per working-age person in County Durham, compared with £17 in Kensington and Chelsea. That has huge implications for the local economy.
My hon. Friend the Member for Gateshead mentioned the Chancellor, who said:
“Too often, when countries undertake major consolidations of this kind, it is the poorest—those who had least to do with the cause of the economic misfortunes—who are hit hardest.”
He suggested that that was
“a mistake that our country has made in the past. This coalition Government will be different.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]
However, if we examine what has happened since the emergency Budget in June 2010, we find that disabled people and their carers have experienced a major drop in their income of £500 million. There is a huge credibility gap between the Government’s rhetoric and the practical implications of their policy on the ground.
According to the Scope-Demos report “Destination Unknown”, Britain’s 3.6 million disabled people in receipt of disability benefits will have become £9 billion worse off between 2010 and the end of this Parliament.
Mrs Hodgson
I just want to add that Carers UK estimates that 10,000 carers could lose their carer’s allowance as a result of the changes to DLA. Does my hon. Friend think that that is a disgrace?
Grahame M. Morris
It is outrageous. Local authorities are struggling to balance their budgets. I thank Easington carers for the information they have provided to me. The number of carers’ centres across my county is going down from five to one, and carers report severe cuts in services, with many now being run using volunteers. So, yes, the issue is a huge concern, and carers are the unsung heroes of the community in many respects.
I will have to curtail my remarks, but there is absolutely no doubt that the Prime Minister’s rhetoric about being led by the views of disabled groups does not hold water. A number of surveys have been carried out, and a commission led by Paralympic gold medallist Baroness Tanni Grey-Thompson found that 450,000 disabled people and their families could lose up to £58 a week under the coalition’s universal credit reform—cuts so deep that one in 10 disabled households with children fear they may lose their homes, with many struggling to pay for basic essentials such as food and heating.
There is no doubt the cuts are taking money from people who are already struggling, and disabled people are twice as likely to live in poverty as other citizens. I call on the Government urgently to review the impact of their welfare reforms on those who are most in need.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I congratulate the hon. Member for Gateshead (Ian Mearns) on securing the debate.
One group of carers I have particular concerns about is the parents of disabled adults who provide care and support for their sons and daughters at home. In the short time available, I want to focus on a couple of stories from my constituency that highlight not only the shortcomings of the work capability assessments, but the long-term impacts of caring on families’ income levels and on the health of carers. The big challenge is how to make the home situation sustainable for people who are very much the backbone of our community care system.
It is important and relevant to point out that Aberdeenshire was part of the pilot that introduced the new assessment scheme. We are therefore somewhat ahead of the curve in the implementation of the changes, and we are perhaps starting to see the impacts ahead of other parts of the country.
The first family I want to talk about have a severely disabled son with a range of complex learning and physical disabilities. It is clear from his assessments that he will never be expected to work, and he will need support all his life. However, he can walk without the use of aids—he cannot walk far, but he can nevertheless walk—so his mobility needs have recently been downgraded, which has had significant consequences for his family. Initially, the most serious was that he lost the gateway services that the council provided, which gave him access and transport to a day centre. I intervened in the case, and we have managed to get that decision rolled back, but the loss of part of my constituent’s mobility allowance has put a significant strain on his working parents, who juggle their working lives and shifts around his mobility requirements. They now have to use public transport in a rural area where services are not regular, and that is highly inappropriate, given their son’s medical condition, because they need to get him to regular hospital appointments in Aberdeen. That situation is not sustainable, and I am left wondering how long those parents will be able to continue to care for their son at home. They have made it clear they do not want him in residential care, but they are also clear that the situation they are in is simply not sustainable. The Government really need to address that issue.
The other family I want to talk about have been very unlucky in the health lottery. Until recently, the mother received ESA for her own health problems. She looks after a severely disabled husband, who is a bit older and who is basically housebound. She also looks after a disabled daughter, who is a wheelchair user with other, complicating health conditions. It is difficult in a short debate such as this to assess the extent to which the mother’s health problems have been compounded and exacerbated by that long-term caring. However, she now receives £29 a week because she has exhausted her entitlement to contributory benefits, and she must, as it were, live off her disabled relatives, although she has a small occupational pension from earlier in her life, when she was able to work. The family are trying hard to live with dignity in tough economic circumstances. They have not asked to be unhealthy; they have had to deal for a long time—well over 30 years—with a child who has severe disabilities and who has needed a lot of care and attention.
The impact on such families, the strain on social services and the long-term implications for our health care service and for residential care provision are significant. At a human and a social level, the system needs to address and support the needs of carers, and particularly those who are caring for an indefinite period.
Sheila Gilmore (Edinburgh East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing the debate.
I am going to pre-empt the Minister, because I expect her to say in reply to the debate, as she keeps saying, “You”—not meaning any of us personally, but the Opposition—“did not have a cumulative impact assessment when you were in power.” However, I cannot think of a time when so many things have been happening simultaneously. The roll-out of incapacity benefit to ESA is still going on. We will have the change from disability living allowance to personal independence payment. We have housing benefit changes and universal credit. The reason we want a cumulative impact assessment is that what is happening is unprecedented. We need to know what will happen to people like my constituent who is 59 and has lived in her home for 30 years; she has severe back and hip problems and has just received a letter telling her she will lose housing benefit in April unless she can find somewhere to move to. Currently her grandchildren stay over for part of the week, which helps her family out. If she cannot do that any more, it will have an impact on their living and working arrangements. A ripple effect happens.
I have not yet dared tell my constituent that almost certainly she will in due course lose severe disability premium, which she currently gets because she is in receipt of income support and has no carer in the household. That, doubtless, is still to come, but I do not want to make her too fearful. The things that she does know about are happening already. They are not a myth being created by us or the disability movement.
When people become ill they experience a fantastic loss of income anyway, and an increase in costs. The Government appear to be oblivious to that. If a couple have been working—one full-time and one part-time—and the one who worked full-time suffers a stroke and must give up work, they go down to half an income and ESA. At the end of a year, if the person in question ends up in the ESA work-related activity group, their income falls again: the ESA will be lost because it is contributory; they will not qualify for the non-contributory version—even though they have worked and paid in all their lives they will not get that—so their income will go down to that of a part-time employee. Again, there are ripple effects and cumulative effects on people at a time when they are incurring greater costs. Someone who is at home more than they were when they went to work will have increased fuel and transport costs to meet. The person who is ill and has a disability may always have been the driver for the household, so there will be taxi and increased public transport costs. People in that position already have a substantial reduction in income.
I am glad that the Minister realised that the initial plans for rolling out DLA into PIP were totally unrealistic, and that the time scale has been extended, but there will still be clear losers. Our accounts are not scare stories. The information comes from the Government’s figures: 170,000 people, on reassessment, will lose DLA altogether before October 2015. That is a lot of people. That, apparently, is reality in the Government’s terms. I ask the Minister please to agree to a cumulative impact assessment.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Gateshead (Ian Mearns) on bringing the matter to the House. I thank him, because it is one that is close to my heart, for two reasons. The first is personal, because my brother, Keith, had an accident in which he received serious brain injuries. He had many years of rehabilitation, and although it did not mean he could lead the independent life he once had, he can have some sort of independent life, because of his carers and my parents. My parents give as much help as they can, but my mother is 81 and my father is 83, so they will be able to give less and less help. There will be greater emphasis on the NHS and what it does through carers, but also on the DLA award that helps Keith to have carers in the house on a more permanent basis. He relies on the award to pay for the help he needs. If that were to change—I hope that the Minister is taking this on board—his quality of life would change dramatically. He would have to go to a health facility elsewhere.
Is my brother the only person in my constituency to whom that has happened? Of course not: there are hundreds—indeed, thousands—who fit into that category. All over the country people have made me aware of that. Some of the hon. Members present for the debate attended Baroness Tanni Grey-Thompson’s inquiry. In her report she has said that
“230,000 severely disabled people who do not have another adult to assist them could receive between £28 and £58 a week less”.
Also,
“100,000 disabled children stand to lose up to £28 a week”
and 116,000 disabled people who work risk losing up to £40 per week from payments towards additional costs of being disabled. Clearly, those figures cannot be ignored. Those are the facts of the case and that is how things will happen. A recent newspaper comment said:
“DLA helps disabled people to manage some of their own care needs; without this support, they could increasingly rely on family members.”
Yes, that is so if the family members are alive and accessible. If not, that cannot happen.
Other hon. Members have mentioned Carers UK and the Hardest Hit survey. Three in 10 disabled people stated that without DLA their care would not work. The figures are clear. Family carers provide an unmatched service in the United Kingdom, saving the Government millions upon millions of pounds each year. The Government must address care-in-the-home needs. There is only so much that families can do and while we are trying to save money care in the community cannot bear the brunt, but that is what is happening. Private care companies are under pressure and have less money available to them. That means that elderly people are living in unfit conditions, and much more is required of their carers.
Many young and single-parent families find it very difficult to cope. Young mothers try their best to do without the absent father, but they cannot juggle taking care of the home as well as looking after children with attention deficit hyperactivity disorder. There are many in that situation in my constituency, and that will be true of the constituencies of many other hon. Members. Those mothers have particular problems, trying to hold down a job of 16 to 20 hours a week to qualify for help, and they are under tremendous strain, which in turn leads to breakdowns in their health. Voluntary sector groups used to fill the gap, and sometimes they can, but mostly they cannot. Such a mother is under pressure, worried about DLA and the effect on her son, and about her increasing child care costs. Those problems multiply. I want to make a quick mention of Home-Start, a charity at home in my constituency and many others, which does marvellous work and can look after a child for a year for £422. Where else could anyone get that?
In conclusion, there is a degree of penny wise, pound foolish about what is happening—saving money in the short term, while in the long term there will be no saving. Worse, in the long term families will be pulled apart, disabled people will be isolated and the community will not function as it could, all because the big picture was not looked at. I urge the Minister to rethink the reform at this stage, consider its impact on individual lives, and put in place an efficiency package that saves money without doing it at the expense of decent quality of life.
Mr Christopher Chope (in the Chair)
I will reduce the time limit to three minutes now.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
At a recent AGM of Hackney carers association, carers raised concerns with me about many things. One was the carers allowance, which is only £55.50 a week. I want to ask the Minister to comment on the proposal by some bodies that that should be increased. Many carers in my constituency have been on low incomes for long periods of their lives already. It is not as if they have reserves to fall back on.
I wanted to touch on the general issue of disabled households typically being poorer, often because disability has meant being able to work less over time. Many carers have had to give up jobs to care. I am a former working carer, and I cared for two disabled adults. Annie, who sadly died in October, went to live with her sister, who was also a working carer. The Minister needs to understand that the pressure on carers is immense. As many hon. Members have mentioned, the cumulative impact of many changes can be very complicated.
When I cared for two disabled adults, at one point I dealt with 13 different agencies just to get the basics of care, support and medical support in place. Happily for me, at that time we were not dealing with many changes in the benefit system. I am not saying it was all perfect, but it was at least a stable system. All the changes coming hard on the heels of one another add stress to carers who must navigate through the system in addition to all the other challenges of being a carer. We live in a world now where people should be able to work and care, but we make it more difficult for them to do it. When I was a working carer my husband’s cousin was a carer for her sister. We worked because we had to—to pay bills and pay for our families. There was no option for us. Many people have taken the option of not working, and that has considerably reduced their household income.
I want to touch briefly on the work done by Contact a Family in my constituency, and ask the Minister to comment on the disability addition under universal credit, which seems to cut the weekly tax credit for families with a disabled child from £57 to £28. The issues for families with children are immense. If we do not get this right now, it says bad things about what our society wants to do for disabled people. Those families want to ensure that their children have the best start in life to increase their chances of independent living later on. Without proper support in the early stages, families can break down under the immense pressure. As we know, many marriages struggle under the strain of coping with a disabled child. I urge the Minister to comment on that point and to look more widely at the work of organisations such as Contact a Family, which, by the way, is quite supportive of some of the Government changes, but has some particular points that I urge the Minister to consider.
Mr Iain McKenzie (Inverclyde) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing this important debate. There can be no doubt that the UK Government’s programme of welfare reform will have a devastating impact on the incomes and well-being of thousands of disabled people in Scotland and the rest of the UK.
One common theme runs across the many different types of benefits, and that is that “reform” means “cuts in income”, and disabled people are among the most badly affected. Next year, disabled people will feel the effects of even more stringent cuts. According to the impact assessment of the Tory-led coalition, the Government expect 500,000 people to lose PIP by 2015-16, compared with what would have happened under DLA. The reality is that the Government are trying to mould a benefit around these cuts, rather than around the needs of individual disabled people.
A Citizens Advice report in Scotland has estimated that the replacement of the disability living allowance with personal independence payments will require 225,000 working-age DLA claimants in Scotland to undergo an assessment, with some 75,000 in danger of losing their entitlement. Capability Scotland notes that all PIP claimants, including
“those with complex learning disabilities, severely visually impaired people, double amputees and deaf people”
will be assessed by an independent medical officer.
To reduce the number of claimants, everyone on DLA will have an Atos test. Where do I start with Atos? Many people fear the Atos test, and with good reason. In fact, my constituents believe that Atos stands for “another Tory oppressive system”. I tell them that that is not the case, because that would be letting off the Lib Dems too lightly. We are told that 40% of Atos test decisions were wrong and have been overturned on appeal. In my constituency of Inverclyde, the percentage is significantly higher; something like 60% of cases are overturned. I know that colleagues have had many frightened and worried constituents contact them about the medical assessment process.
The UK Government plan to halve tax credits for disabled children. The carers, too, will be hit hard. Welfare cuts will push families caring for ill or disabled relatives to crisis point. As the financial pressure on carers grows, there is the increasing risk that they will be unable to continue to care for their loved ones.
We have a Government who, while slashing the welfare budget, provide a £40,000 tax break for millionaires. The Government’s Welfare Reform Act 2012 crosses the basic line of decency.
Barbara Keeley (Worsley and Eccles South) (Lab)
I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing this debate and on the way in which he opened it. In the little time I have, I want to focus on the carers of people with disabilities.
Carers’ organisations have told me that they fear that the welfare reform measures proposed by this Government will seriously undermine the ability of carers to care for people with disabilities and for older family members. On the reform of the disability living allowance, the Government’s original impact assessment said:
“We expect that the introduction of Personal Independence Payment will not affect the overall size of the Carer’s Allowance population”,
but analysis by Carers UK shows that there will undoubtedly be a knock-on effect on those who claim carer’s allowance. If the number of claimants of the allowance falls, as it moves to PIP, in line with the caseload for DLA, Carers UK estimate that 23,800 carers will be unable to claim carer’s allowance.
On the housing benefit cap, it seems clear that around 5,000 households that will be capped in 2013-14 are expected to contain a carer. Those carers will see an average reduction in income of £105 a week. That is quite clearly at odds with the Government’s stated policy for the cap.
Around 1 million carers have either given up work or reduced their working hours in order to care. An average drop in income of £105 per week is a cruel way to treat carers who have given up their careers. It could also be counter-productive, in that it could make caring for a family member financially untenable and force more people into taking up the option of care homes or residential homes.
Many carers already face financial hardship. A survey of carers by Carers UK found that 45% of them were cutting back on essentials such as heating or food, and four in 10 were in debt as a result of caring. Carers are not choosing to give up work, but being forced into doing so by the crisis in social care. Carers UK found in a survey that 31% of working age carers gave up work or reduced their working hours to care because support services were not flexible enough, the person for whom they cared did not qualify for support, there were no suitable services in the area, or the services were too expensive or not reliable enough. There is not time now to go through how care charges have gone up.
In an earlier debate on social care, I talked about the impact of financial issues on the lives of carers. I have heard of one carer who had to take on a part-time cleaning job in the early evening because money was so tight. She puts her husband to bed at 4pm so that he is safe while she is at work. That is the reality.
Grahame M. Morris
Does my hon. Friend agree that it is a case not just of money—pounds and pence—but of the dignity of disabled people?
Barbara Keeley
Indeed it is. The House of Commons has received reports that criticise care agencies for putting people to bed at 6 o’clock or 8 o’clock. This carer has to put her husband to bed at 4 o’clock. How must that feel to her? I have had further evidence that shows that that is not an isolated example. It is very common for carers who can no longer afford respite care to have to leave a person, perhaps wearing an incontinence pad, and hope that they will be safe in a chair while the carer has a hospital appointment or goes to work.
I question whether anyone here believes that it is right or fair to hit carers with further cuts to their income when changes already made by this Government are clearly hitting them. The manager of my local carers centre in Salford told me that, this Christmas, the centre’s staff are collecting and distributing food parcels to carers. That is something that they have not had to do since the 1980s. She said, “This does not bode well.” It does not, and it should not be happening to carers, who already give so much. I call on the Minister for a rethink on welfare reform for carers.
John McDonnell (Hayes and Harlington) (Lab)
Sometimes our role as MPs is to bear witness, so it is important that the words spoken by people with disabilities and their carers are put on the record. Professor Peter Beresford of Brunel university, working as the chair of Shaping Our Lives, the national disabled people’s and service users’ organisation network, undertook a massive survey of people with disabilities and their carers. The Spartacus report was published earlier this year, and has now been revamped. I just want to quote a few brief statements from people with disabilities. This is one person’s family member:
“John is so severely disabled he has to wear nappies and is fed through a tube. He is blind and deaf, cannot speak, suffers frequent seizures and requires 24-hour care. But he has now been told by a Government decision maker that he is ‘capable of work’ — and that he is no longer entitled to benefits. Family members have contacted officials who say that an appeal against the decision will have to be lodged.”
What happens when those appeals take place? Let me quote a person with a disability:
“It’s like doing a crime. I am a human being who needs additional support but here I am facing a panel who are making a decision on my life. I am tired of fighting officials who seem to think they know more about my disabilities and needs than I do. It now makes me feel ashamed of who I am. I am being punished for being disabled and feel powerless.”
What happens in the assessment itself? Here is a quote from a wife:
“I can honestly say there are lies that go into that assessment. I do shorthand and I took down word for word my husband’s whole assessment. What actually came back was practically the opposite of everything he said.”
Let me quote another claimant:
“They are now ordering claimants (and their companions) to surrender any notes they have taken during the interview. Before the assessment even began, both I and my companion were warned that we had to first agree first to hand over our notes at the end of the assessment. We were told that the notes would be photocopied and stored on a database. I was told that the penalty for refusing to agree to this condition was the immediate termination of the assessment.”
The implicit warning was that they would lose benefits.
What happens in the administration of these benefits? I will give another example. The client’s husband is in hospital in a coma. He was sent an ESA50 form. The client contacted the Department for Work and Pensions to explain the situation, and was asked to obtain a letter from the hospital confirming that the client’s husband was in a coma. The client did so, and sent it to Atos rather than the local benefit disability centre. The client was then sent a letter saying that they had failed to return the appropriate form and the client’s husband was no longer entitled to the benefit.
Let me save the final words for Karen Sherlock, 44. She was put in a work-related activity group. She was required to attend interviews. She suffered from a whole range of conditions. Her husband Nigel said it was a disgrace that she was refused benefits. Last year, she lost the long process of appeal against the decision. In April 2012, as a result of the time-limiting of employment and support allowance to one year, she lost her benefits. She won her appeal a few weeks later and was finally put in the support group. She died eight days later, on 8 June.
Read the Spartacus report. It gives example after example of the inhumane treatment of people with disabilities and their families. It shames any Government to treat people in this way.
Mrs Anne McGuire (Stirling) (Lab)
Thank you very much, Mr Chope, for calling me to speak. It is a pleasure to serve under your chairmanship.
I thank the many Members who have made a contribution to this debate, and indeed I also thank the many Members who sat here in Westminster Hall but did not speak; they did not make a contribution but wanted to show their support for my hon. Friend the Member for Gateshead (Ian Mearns), who promoted today’s debate very successfully.
I have to say, in passing, that rarely have I seen a Government Minister so ill-supported by people on her side. Frankly, she is supported more by the number of officials with her than by Back Benchers.
I also thank the many organisations that have given us briefings, and indeed would probably have given briefings to many MPs from all parties. They include Scope, the Muscular Dystrophy Campaign, the British Medical Association, the Disabled People Against Cuts, the Hardest Hit campaign, Rethink, Action for Children, Disability Rights UK, Mind, Pat’s Petition, the Gateshead Carers Association and the Gateshead Citizens Advice Bureau, which of course are in the constituency of my hon. Friend the Member for Gateshead, Carers UK, and the National Association of Citizens Advice Bureaux.
Many Members have commented on the Chancellor’s statement of 22 June 2010, in which he said that the Government would not grind the poorest into the ground. Frankly, what a difference two years has made. This is the same Chancellor who is now looking for more cuts from the Department for Work and Pensions. As many colleagues have said, there are many hidden costs to being disabled, which do not always compute.
Yvonne Fovargue (Makerfield) (Lab)
Does my right hon. Friend agree that one of the costs that has not been mentioned today is the additional cost of child care for a child with a disability, the benefit for which is being reduced under universal credit?
Mrs McGuire
Yes, and because of the width of the spectrum of impact that we are having to deal with, it has been very difficult to highlight every particular aspect of that impact. I thank my hon. Friend for raising that issue.
There is a hidden accumulation of disadvantages that this Government have consistently tried to hide, in the face of the evidence that has been presented to them over the past two years by some of the organisations that I referred to.
The Minister told me last week in response to my question about a cumulative impact assessment—I think this was mentioned earlier by my hon. Friend the Member for Edinburgh East (Sheila Gilmore)—that there had never been a cumulative impact assessment under Labour, as if that somehow absolved her from undertaking a cumulative impact assessment. I find that an astonishing answer, because no Government—neither Conservative nor Labour—have ever launched such a torrent of changes, with such a speed of change, in the way that this Government have done in tackling the support that we give to disabled people. I worked with disabled people during the premiership of Baroness Thatcher, and frankly I have never seen anything like this—never.
According to the figures, disabled people have dropped at least a massive £500 million in income since that emergency Budget statement two years ago, when the Chancellor said that he would not be breaking the backs of the poorest in our society. The cuts to the incomes of disabled households go up to more than £2,000 a year; they vary, depending on individual circumstances.
We can see what the impact of those cuts is. There has been the imposition of the 12-month rule on employment and support allowance, a benefit that is intended to support people who are too ill or too disabled to work. The Government were so stubborn that they would not even accept an Opposition proposal to extend ESA to two years, to give people the opportunity either to adapt to a long-term disability or to receive the treatment that they needed to take them out of illness. That change is underpinned by a flawed work capability assessment, which states that disabled people are ready for work when they are palpably not ready; we have heard examples of that today.
I agree with my hon. Friend the Member for Gateshead that we should not just attack Atos. There are issues to do with Atos and the professionalism with which it is conducting some of the assessments, but we should pin the responsibility on the Ministers who are supposed to be managing the Atos contract. If it is not the Ministers who are responsible—as is the way with this Government—there will be a civil servant somewhere who will have to accept some responsibility.
We have an appeals service that is logjammed, and many people, after months of uncertainty, find that their benefits are restored. Sometimes that happens—this shows the bizarre economics of this situation—after they have had their Motability car repossessed; several months later, they find that they are to get it back again. What sort of economics is that?
Although I welcomed some of the mitigation, or easement, that the Minister announced in the changes to the personal independence payment, there are still many descriptors that are causing concern. I appreciate that the Minister has only a few minutes to respond to the debate, but perhaps she will share with us details of where the new descriptors in activity 12 come from. It looks as though the 12 points needed for the enhanced mobility rate can be achieved solely by people who have only a physical impairment and who are not able to stand or move more than 20 metres. Perhaps she can tell the House how many people will lose access to their Motability vehicles as a result of this further tightening of the gateway. I point out to her that even in the 1970s disabled people qualified for those little blue single-seater cars if they were able to move more than 20 metres, aided or unaided. Talk about back to the future.
From April next year, families with disabled children will receive £1,300 less than they would receive under the current system. It is estimated that about 450,000 families will lose out under universal credit. Until the last couple of weeks, the Government gave the distinct impression—this was a clever dodge—that if a carer was in the same household as a disabled adult child, their carer’s allowance would not be included in the benefit cap. The Government have now had to admit that an adult disabled person will be assessed as being in a different household from their parents’ household.
Before the Minister says to me, “That’s always been the way; when an adult reaches the age of maturity, or the age at which they can receive benefits in their own right, they are a separate household”, I accept that is true, but what we never did—indeed, what no Government ever did before—was decouple a carer’s allowance from the disabled person whom it is intended to help. That is what this Government are doing.
I say to the Minister in all honesty that if this Government are so sure that what they are doing is right, and that, as the hon. Member for South East Cornwall (Sheryll Murray) said, they have the best intentions as regards disabled people, why in heaven’s name will they not carry out a cumulative impact assessment? I have said this to the Minister and to the previous Minister, who is now the Secretary of State for Culture, Media and Sport: it is surely not beyond the wit of the best brains in the DWP to come up with a cumulative impact assessment that will prove either the Government’s case or ours.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
It is a pleasure to serve under your chairmanship, Mr Chope. I thank the hon. Member for Gateshead (Ian Mearns) for securing this debate on such an important issue, and I welcome all contributions to the debate about how our welfare reforms will better support disabled people, their carers and their families.
The UK has a proud history of furthering the rights of disabled people and I am pleased to say that, even in these very tough economic times, the Government continue to spend around £50 billion a year on disabled people and their services, to enable those who face the greatest barriers to participate fully in society. That compares well internationally. We spend almost double the OECD average, as a percentage of our gross domestic product, with only Norway and Iceland out of the 34 OECD countries spending more, and we spend a fifth more than the European average. More money will be spent on disability living allowance and the personal independence payment in every year up to 2015-16 than was spent in 2009-10.
We are world leaders in dealing with people with disabilities, but we should not be complacent, because disabled people are not a static group and we have to support them every which way we can. Some 3.2 million disabled people are on DLA and, over a year, the impairments of a third of them will change. Some people might get worse, and some will stay the same, but some will improve and get better and will no longer get the benefit as they will not be entitled to it. We will, however, support those who need support, or more support. The Government are committed to enabling disabled people to fulfil their potential and play a full part in society, but money needs to be targeted more effectively to ensure that support continues to be available to those who need it most, that there is a lasting impact, and that interventions provide a fair deal for the taxpayer.
Nearly half of disabled people are in work. Only 9% of working-age disabled people, and only 5% of those over the age of 25, have never worked. If we want to make a sustainable difference, we must do all we can to help more disabled people who can work to get into mainstream employment, and support them to stay in work. We know that many disabled people want to work but feel that the risk of losing their benefits is too great. By simplifying the benefits system and ensuring that work pays, universal credit will remove the financial risks involved in taking the first steps back into employment, and will increase the incentives of working, even if that work is for just a few hours a week. Universal credit will provide unconditional support to disabled people who are not expected to do any work.
Disability living allowance is an outdated benefit that has not been fundamentally reformed since it was introduced in 1992, and both sides of the House agreed that a change was needed. The reforms present an opportunity to start afresh, keeping the best elements of DLA that disabled people value, but bringing the benefit up to date and making it fit for the 21st century.
Debbie Abrahams
Does the Minister think that articles 19 and 20 of the United Nations convention on the rights of persons with disabilities are compromised by what the Government are doing in, for example, removing the Motability allowance from about 500,000 people?
Esther McVey
Of course we do not believe that the rights of disabled people are compromised. As I said at the start of my speech, we aim to strengthen and support them in every way we can.
The personal independence payment will be easier to understand and administer, and will be financially sustainable and more objective—the payment has not been so to date. It will be better targeted at those in most need. Throughout the development of the payment, we have consulted widely with disabled people and have used their views to inform policy design. It has taken more than two years of intense consultation, of listening and of working to adjust the criteria and the assessment, to get it right. We listened to people’s concerns about the speed of reassessments and, as I announced last week, we will now carry out a slower reassessment timetable to ensure that we get it right. The peak period of reassessments will not start until October 2015. Furthermore, the Government confirmed in last week’s autumn statement that disability benefits will continue to be uprated in line with inflation.
Carers provide an invaluable service to some of the most vulnerable people in our communities, and we want to ensure that they continue to get the support they need. We have committed to linking carer’s allowance to receipt of either rate of the daily living component of PIP, which is an important safeguard for carers. Our earlier analysis indicated that the link to PIP would result in broadly the same number of carers being entitled to carer’s allowance, even though there would be some churn between those who are newly entitled and others losing entitlement. Now that we have finalised the PIP assessment criteria we are, of course, considering that, and our objective remains to ensure that people caring for those with the greatest need get the right level of support.
Barbara Keeley
The Minister is right to comment on carers, but does she see how deeply unfair it is to apply the benefit cap to them? They will lose £105 a week. This stuff about households and the way in which they are defined is just nonsense; 5,000 carers should not lose out.
Esther McVey
I will explain to the hon. Lady why the changes have to be brought about. At the moment, there are 1 million spare bedrooms, 250,000 households living in overcrowded conditions and 1.8 million households on the waiting list, so we have a size criterion in the private sector, and we must get this right. We have to support people. We have to work with what we have, and we will introduce the changes because we have to get this right—it has not been right, and the previous Government left it to get into this predicament.
Esther McVey
I will not give way.
Work must always pay more than benefits, and that is why we are introducing the cap on the amount of benefits that working-age people can receive. It is not reasonable or fair that people out of work can get an income from benefits that is greater than the average weekly wage for working households. We understand, however, that disabled people face extra costs, and that is why we are exempting from the cap households receiving DLA, PIP or the support component of the employment and support allowance.
It is fair that the benefits system should support people in public housing in the same way as it does those in private housing, but we have made changes to the housing benefit regulations, in recognition of the fact that some people need an additional room for an overnight carer who lives elsewhere. We have also listened to concerns about disabled people living in significantly adapted accommodation, and have announced additional discretionary housing payment funding of £30 million for 2013-14, to cover both that group and foster carers.
Instead of simply cutting money from everyone, we chose the more difficult but principled option of modernising the benefit and focusing support where it is needed most. PIP will be awarded on the basis of fair, consistent and objective assessments, and such assessments are not in place at the moment. The assessments have taken two years to develop. We consulted with disabled people and made key changes as we received their feedback.
Although they are different assessments that will work in different ways, we have learned from the experiences of the work capability assessment—something that the Opposition brought in—and we had to introduce Professor Harrington, who produced recommendations that we are still working through, to get this right. That will enable us more accurately and consistently to ensure that support is targeted at those who face the greatest barriers to leading independent lives. More than a fifth of PIP recipients will get both of the highest rates, worth £134.40 a week, compared with only 16% of those who are on DLA at the moment.
Julie Hilling (Bolton West) (Lab)
I thank the Minister for giving way when time is so short. I have listened carefully to everything she has said, and what I do not understand, at the end of it, is this: why will disabled people be financially worse off, when she says that everything in the garden is rosy? I truly do not understand how she can say that, when every day on which we have a surgery we face people coming in to say how they are suffering under the Government’s policies. I do not understand—
Esther McVey
Once universal credit has been introduced, many disabled families will receive more support than they do now, with the higher rate of support for all disabled children who are registered blind, for example. Households with one or more disabled adults will keep up to £647 a month—some £7,000 a year—of their earnings before seeing any reduction. Universal credit also offers a more flexible system for people whose condition and ability to work fluctuate. No one whose circumstances remain the same will lose out in cash terms as a direct result of the move to universal credit—there will be protection.
As we have talked about the cumulative impact, I will say that we have published impact assessments on reforms to workplace pensions, the child support regulations, automatic enrolment, PIP, universal credit and the benefit cap—the list continues. Labour embarked on a number of reforms, including moving from incapacity benefit to employment and support allowance, the introduction of local housing, and changes for lone parents, on which no cumulative impact assessments were done, as the hon. Member for Edinburgh East (Sheila Gilmore) and the right hon. Member for Stirling (Mrs McGuire) said. It would have been far simpler to do a cumulative impact assessment, but because of the shift and the fact that the measures will not be in place until 2017-18 we have taken the advice that such an assessment would not be possible in its entirety. These are principled reforms, and we should all be proud that we are delivering them.
Votes for 16 and 17-year-olds
(12 years ago)
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Julie Elliott (Sunderland Central) (Lab)
I am grateful for the opportunity to discuss this important issue, and I thank you, Mr Chope, for allowing me to open the debate, in which I will call for the voting age to be lowered to 16. It is a pleasure to do so under your chairmanship.
I am grateful to be granted this debate and to initiate discussion about an issue that many people across the country are currently considering. As Members know, the Scottish Government recently announced that, in the upcoming referendum of autumn 2014, 16 and 17-year-olds will be able to take part in the ballot. That decision to lower the voting age will enfranchise 8.2% of the UK’s 16 and 17-year-olds. The decision has reignited the issue of votes at 16 at a national level.
With that in mind, it seems the right time to reconsider lowering the voting age to 16 in all elections and referendums held in the UK. It would be wrong to send the message that it is right for some of the UK’s 16 and 17-year-olds to be deemed capable of voting while others are not. In July 2012, the devolved Welsh Assembly, in a debate on the issue, voted on a motion expressing support for lowering the voting age to 16 that had cross-party support.
The Minister will know that constitutional reform, including lowering the voting age, is not devolved and, therefore, the responsibility for making that happen still rests with the UK Government. For the sake of a more equal, inclusive political system across the whole UK, the Government and the Electoral Commission must consider extending the right to vote to 16 and 17-year-olds across the country. With recent developments, this seems the opportune time to start revisiting the issue.
In our society, we rightly demand respect from young people and often require them to act and behave like adults. At the same time, however, society should respect young people’s views and aspirations.
Jim Shannon (Strangford) (DUP)
Does the hon. Lady agree that allowing 16 and 17-year-olds to vote would enable engagement with younger people, by allowing the House to hear what they want us to do for them?
Julie Elliott
I could not agree more with that valuable point, which I will address.
Some 16 and 17-year-olds hold positions of great responsibility and already contribute much to our society, and they should be given the opportunity to influence key decisions that directly affect their lives and communities. We should ensure that they and their issues are represented.
In law, as a society, we already allow 16 and 17-year-olds to give full consent to medical treatment, to leave school and enter work or training, to pay income tax and national insurance, to obtain tax credits and welfare benefits in their own right, to consent to sexual relationships, to get married or enter a civil partnership, to change their name by deed poll, to become a director of a company, to join the armed forces and to become a member of a trade union or co-operative society. Granting them the vote would align their responsibilities with their rights as citizens. Surely, it cannot be right that we ask a young man or woman to serve their country bravely by joining the armed forces without recognising their contribution or giving them the choice to influence their future in return.
There is an old American saying: no taxation without representation. As a citizen benefiting from this country, 16 and 17-year-olds are expected to pay tax yet, by being excluded from the right to vote, they have no say on how that money is spent. With rights come responsibilities, but it should work both ways: with responsibilities should come rights.
Across the country, 16 and 17-year-olds are demonstrating that they can make such complex decisions and take on wide-ranging responsibilities. They are actively showing, in practice, their willingness to make a positive difference and contribution to our society. We should give them the chance to make a difference by empowering them further through recognising their right to influence decisions that will affect their future. That is also reflected in public opinion. In a recent poll carried out by The Daily Telegraph, 53% of the population said that they are in favour of lowering the voting age to 16.
I pay tribute to the fantastic work of the Votes at 16 coalition on promoting and raising awareness of the issue. The coalition is made up of more than 70 organisations, including the British Youth Council, the Children’s Rights Alliance for England, the Trades Union Congress, the Co-operative and the National Union of Students.
Lowering the voting age to 16 would further encourage youth democratic engagement. There are more than 1.5 million 16 and 17-year-olds in this country.
As the Member of Parliament for Sunderland Central, I often visit schools in my constituency to talk to students and young people about my job and what it means to represent them. The 16 and 17-year-olds I have met on such visits have shown that they are knowledgeable and interested in the world around them—from the Arab spring in the middle east and the effects of climate change to youth provisions in their own neighbourhoods. They are also passionate people: passionate to learn more and to participate. They have demonstrated to me that they are more than capable of engaging with the democratic system, as much as any other citizen.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend agree that one of the problems that we have in this country is voter turnout? When I was elected, turnout was 65% of those on the electoral register; in the first election in the area in which I voted, turnout was 83%. That is one of the important reasons, as sixth-form students at Ysgol Dinas Brân, who put me through my paces at election time, reminded me.
Julie Elliott
Anything we can do to encourage people to participate is a good thing for our democratic process.
Some 16 and 17-year-olds have carried out their own research into the issue and have ended up lobbying me on my visits about their right to vote. Last month, we saw members of the Youth Parliament take to our usual seats in the House of Commons. More than 300 members from across the UK, elected by their peers, participated in debates. More than 250,000 young people aged between 11 and 18 years old voted for the issues they wanted to see debated, which is a huge increase on the 65,000 votes the previous year. Those young people, representing their peers and their equivalent constituencies, did themselves proud. They were an inspiration to watch and could give some of us a run for our money.
Since the introduction of citizenship classes, that rise in democratic processes among young people is far from unusual. Across the country, thousands of 16 and 17-year-olds are coming together to engage in direct democracy and to encourage community participation and leadership. In the last academic year, more than 590,000 young people voted in youth elections, and 85% of young people now go to a school with a school council that works with staff to make positive improvements to the school. We might also note that both the Labour party and the Conservative party give their members the right to vote for the leader of their political party from the age of 15.
A generation of 16 and 17-year-olds are emerging from the education system well equipped to understand, engage and participate in democracy. Every 16-year-old receiving school education will have completed citizenship classes, so they know and understand the principles of democracy. We would, of course, hope that lowering the voting age will further their interest in politics. Turnouts are already low among young people in our elections. Engaging them earlier in the process would, I hope, raise participation, thereby helping to raise turnouts in elections.
Julie Hilling (Bolton West) (Lab)
At a recent meeting of the all-party group on youth affairs, where the issue was debated, a small number of the young people present did not believe that they should have the vote at 16, but the main reason that they gave was that young people do not have enough knowledge. Does my hon. Friend agree that if they do not have the knowledge at 16, when they have left education, they will be no more knowledgeable at 18? Giving them the vote would put much more onus on people to teach young people about politics at an earlier age.
Julie Elliott
I could not agree more. If having enough knowledge to understand what one is voting about were a prerequisite, it would rule out many people.
Nic Dakin (Scunthorpe) (Lab)
My hon. Friend is making a clear case. As somebody who has spent pretty much all my working life with 16 and 17-year-olds, and who has worked for the past two years with Members of Parliament, I must say that 16 and 17-year-olds have as much to say and as much stake in things as we do.
Julie Elliott
Absolutely, and they often say it with much more passion and punch than we do. Young people of 16 and 17 know and understand the principles of democracy. We hope that lowering the voting age would further increase their interest in politics. Election turnouts among young people are already low. We would raise participation.
Many countries have already granted their young people the right to vote, albeit with some conditions, including the Isle of Man, Austria, Brazil, Germany and Norway. The Council of Europe’s Parliamentary Assembly has also urged the Committee of Ministers to encourage member states to reconsider the age-related restrictions placed on voting rights, to encourage young people’s participation in political life.
It seems to me that there is a strong case for giving 16 and 17-year-olds the right to vote. I will therefore discuss briefly what I would like to see happen to progress the issue. I believe that the Government should consider improving citizenship education for young people, to be followed by a free vote in Parliament on reducing the voting age to 16. Indeed, the Labour party pledged to do so in our 2010 manifesto.
I entirely support citizenship classes, but I believe that they could be improved yet further. I would like to see the Government commission a report on how best to improve and expand citizenship education to raise standards, with the intention of making parliamentary time available to debate it. I would then like to see a commitment to providing a free vote in Parliament on lowering the voting age to 16.
I recently tabled some parliamentary questions to the Deputy Prime Minister about what representations had been received on the issue and what research had been commissioned recently. I was disappointed to be informed in the answer from the Cabinet Office that no recent research has been undertaken or commissioned and that there is no consensus within the Government for lowering the voting age to 16.
I remind the Minister that the Liberal Democrats made a commitment in their 2010 manifesto to introduce voting rights from the age of 16. I hope that she will consider my arguments for lowering the voting age and for commissioning research into the matter.
Wayne David (Caerphilly) (Lab)
My hon. Friend mentioned that there was no commitment in the Conservative party’s manifesto or the coalition agreement, but that has not stopped the coalition from coming forward with ideas that were not part of the agreement. Surely, it could do so here.
Julie Elliott
That is a good point.
Lowering the voting age to 16 will inspire young people to get involved in our democracy and extend the rights due to them. Our 16 and 17-year-olds are ready and willing to participate in our democratic system. The next step is surely to grant votes at 16, which would empower young people to engage better in society and influence the decisions that will affect their future.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
I congratulate and thank the hon. Member for Sunderland Central (Julie Elliott) for securing this debate and for her considered remarks. I also thank other colleagues for their contributions.
It falls to me to respond to some of the questions that she raised, and I am happy to do so. I start by noting what has already been noted: Parliament has taken no fixed view over time on the question whether the voting age should be lowered to 16. Many Members hold diverging views on both ends of the spectrum, often passionately. It is fair to say that those differences reflect a divergence of opinion in wider society; I simply do not think that there is an open-and-shut case for us to discuss.
I shall tackle head-on the comments about my right hon. Friend the Deputy Prime Minister. He has made clear on several occasions his personal view that he would like votes at 16, and that is the view of his party. His views are shared by many not only in his party but across the House. For my own part and that of the Conservative party, I happen to disagree. I have yet to be convinced by the evidence available, although I look forward to drawing it out somewhat in the few minutes available to me. I am far from alone in suggesting that position. The most recent research that I am aware of, which I shall come to in a second, backs that up in that it shows that people remain to be convinced of the merits of the case.
On the points made by Members, the Votes at 16 coalition circulated a briefing to all hon. Members before this debate that clearly set out a range of arguments in favour of lowering the voting age to 16: 16-year-olds can leave school, get a job and pay tax on their earnings, marry and join the armed forces. The last point gives me cause to dwell on the list for a second. It can be done only with parental consent, and Ministry of Defence policy is that no one under 18 will take part in combat. The situation is by no means as straightforward as a simple reading out of the list of ages would suggest.
Wayne David
Will the Minister explain the Government’s thinking? If they accept that 16 and 17-year-olds can vote in the referendum on Scottish independence, why can 16 and 17-year-olds not vote in elections more generally? What is the difference?
Miss Smith
The hon. Gentleman is as mischievous as ever. He knows very well that, in the case that he has just cited, it is the desire of the Scottish Government that that should be the franchise for the referendum. The Government of whom I am a part are led by the Prime Minister, who signed an agreement with the First Minister and Deputy First Minister of Scotland that we shall enable a referendum to take place for Scotland. That is quite a different thing, and it remains UK Government policy that the franchise should be for those 18 years old and over.
Sheila Gilmore (Edinburgh East) (Lab)
Does the Minister not feel that there might be some dangers in conceding as the Government have done in Scotland—in a way that might not be as well controlled as if the Electoral Commission had had full control—rather than doing so properly for the country as a whole? That would have been the right way to proceed.
Miss Smith
The UK Government’s view is that many things would be better if we were to stay together as a United Kingdom. That might be one of the many questions that should be raised in the next two years of the campaign. However, the hon. Lady raises a wise point in the context of the debate. The Scottish Government have sought that franchise and Westminster has agreed a memorandum of understanding enabling them to do so, but there is no consensus within the UK Government on the age of franchise overall.
The hon. Member for Sunderland Central rightly spoke of the many things that society seeks to enable 16-year-olds to do, but I wish to balance that by noting the many things that society and Parliament do not believe that 16 and 17-year-olds should yet be able to do. They include smoking, buying alcohol, placing a bet, standing for election and serving on a jury. The fact is that there is no standard age of majority in the United Kingdom and no single point at which one moves from being a child to being an adult. That may be a matter for debate in itself, but it is right to note that the rights and responsibilities that we accord young people in society build over time. There is no single on-off switch.
I am familiar with the argument, repeated in the Votes at 16 coalition briefing, that allowing 16 and 17-year-olds to vote would help engage young people in our democracy and political processes at an earlier age. I should like to mention some of the evidence available. I remain unconvinced that we might achieve that worthy aim by this method. I am all for young people taking part in politics—I hope that any hon. Member who observed the age at which I entered the House appreciates that—but we have to do lots of things to achieve more young people being involved in politics; it is not only a matter of the voting age.
Let me turn to a couple of points of evidence. First, the Youth Citizenship Commission, which the previous Government set up, looked at ways to develop young people’s understanding of citizenship and increase their participation in politics. As part of that, it considered whether the voting age should be lowered to 16. It reported in summer 2009 and felt unable to make a recommendation on whether the voting age should be lowered. It suggested that there was a lack of evidence available regarding the merits of votes at 16 and noted that there were, as I have already said, vigorous and strongly held views on either side of the debate. The YCC’s view was that the voting age is not the principal factor in encouraging young people’s interest and involvement in politics and citizenship.
Many wise points are made in the YCC report, but it did not find significant evidence on which to base a recommendation. I am sure that all hon. Members agree about what it set out to consider: civic awareness, understanding, maturity of judgment, the place of citizenship education, the impact on turnout and responsible voting, the impact on young people’s perceptions and civic activity and the administrative issues that would go with such a change, all of which are valuable elements in that research and in the debate that we ought to have if we had longer than half an hour. The YCC found that
“the issue is not the principal factor in encouraging young people’s interest and involvement in politics and citizenship.”
Where else might we turn for evidence? I am also interested in a YouGov poll released in November 2009, shortly after the YCC report, done for the Citizenship Foundation, which I am sure all hon. Members have worked with in their time as parliamentarians. It does much good work. The poll looked at 14 to 25-year-olds. The point that I want to draw out of it is that, although it might be expected that 16-year-olds would say, “Yes, please. I am interested in majority and the vote,” as per the figures that the hon. Lady used, in that category of 14 to 25-year-olds—some on either side of the grouping—54% are against, 31% are for and 15% do not know. Those figures should provoke enough thought to cause us to stop and consider not only the range of views, but the high number of those who do not know, which is a matter that we might discuss.
The hon. Lady mentioned turnout, as did the hon. Member for Clwyd South (Susan Elan Jones). We all want higher turnout and greater participation in the electoral process, but a relevant fact here is that, since the 1997 election, turnout among 18 to 24-year-olds, who can vote, has fallen from 51% to 44%. Registration among young people is lower than for other population groups. Far be it from me to rest this debate on a point of mathematics—no doubt, the hon. Member for Scunthorpe (Nic Dakin) will realise this—but if participation followed what we see already in that most youthful age bracket, turnout overall would fall, and that would not be the outcome that we were focusing on. That is a dry maths point, but the broader point is there and can be brought to life for people. We do not want lower turnout. We want turnout to be higher. Is lowering the voting age the tool to achieve that? I am yet to be convinced of that, but this debate does good work in addressing the matter.
An issue of engagement goes far beyond the franchise. We in the Government are trying to deal with that among some of the other activities that we are running. For example, in the pilots of the Bite the Ballot programme, we are talking to young people in schools and colleges— I was with a group in Norwich doing that in the past few weeks—about the importance of registering to vote. That is in the context of individual electoral registration. I am amazed that the hon. Member for Caerphilly (Wayne David) has not yet mentioned that this afternoon, but I should be delighted to take it up whenever he wishes. All hon. Members agree that it is important that the individual right and responsibility to register and to vote should be treated carefully and wisely.
Wayne David
The Minister has provoked me. She mentions consultation with Bite the Ballot, for example. Surely she will have picked up that that organisation, like all the others that she has engaged with regarding individual electoral registration, supports votes at 16. Have they not persuaded her yet?
Miss Smith
I am afraid that they have not. I look forward to hearing a conclusive argument, if there is one, that takes the majority of society with it. I must return to the point that we in Parliament seek to represent our constituents. I could not honestly say that a majority of my constituents would want me to support votes at 16. I do not think that that is so. There is wide spread of views throughout society. Some of the stats that I have mentioned back that up and give us food for thought. There is no single magic bullet for increasing youth engagement in politics. The franchise is but one factor, as the Youth Citizenship Commission shows.
Wayne David
For me, the bottom line is that, if a young person aged 16 can give full consent to medical treatment, leave school and enter work or training, pay income tax and national insurance, obtain tax credits and welfare benefits in their own right, consent to sexual relationships, get married or enter a civil partnership, change their name by deed poll—
Wayne David
I am just coming to the end. They may also join the armed forces and become a company director. Surely, if all those things apply, logically, why should voting be exempt?
Miss Smith
Mr Chope, if I had more time than you might allow me, the direct answer would be that that is because the following things do not apply when a person is 16: holding a licence to drive any vehicle, except certain heavy ones, engaging in street trading, holding an air rifle, etc. I do not wish simply to read out the other half of the list. The point is that, as I have said, a range of activities signal majority from 16 through to 18. Indeed, there are eight of them, on certain counts.
Miss Smith
I welcome that debate and welcome everything that has gone into this debate. Again, I congratulate the hon. Member for Sunderland Central on securing the debate. I welcome the interest that is regularly shown in this debate by those whom we seek to represent and work with. I welcome that not only as a younger person in politics, but as a person who seeks to have other young people involved in politics, as I seek to take the Electoral Registration and Administration Bill through its remaining parliamentary stages. It is vital that registration and turnout increase in this country. We all seek to achieve that.
I cannot give the hon. Member for Caerphilly an emphatic yes, a tick in the box or franchise on a plate, because I do not think that there is consensus in the country for it. That is not reflected in what our constituents ask us to do. There are divergent views. Accordingly, there is no consensus within the Government on this issue. I shall not hide that fact. It was not included in the coalition agreement for Government, so there are no plans for a change in this Parliament.
I thank the hon. Lady for her constructive suggestions about citizenship education, which I will be sure to pass on to my colleagues in the relevant Departments. I look forward very much to continuing this debate and to all of us doing everything that we can to encourage young people to play the fullest possible part in civic and democratic life.
Outsourcing of Public Services
(12 years ago)
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Chris White (Warwick and Leamington) (Con)
I called for a debate this afternoon on the outsourcing of our public services. I am grateful to Social Enterprise UK, in particular Celia Richardson, for putting together the report, “The Shadow State”, and for raising this important matter and providing fresh insight.
Although politicians can easily become fixated on the high-level discussions in politics, we need to remember that one of the most important roles of government for most people is the provision of high-quality, front-line public services. Over the past 200 years in Britain and throughout the world, Government have become more and more central to the delivery of services vital for millions of people: health care, child care, policing, prisons, helping people back to work, education and transport are just a few of the areas that the public sector reaches. Since 1945, Britain has seen a vast centralisation of such responsibilities away from the local level and from independent organisations and towards central Government. In 2010 prices, the budget has gone from £234 billion in 1945 to £660 billion.
A large proportion of the budget has been spent on public services, and we have seen massive improvements in many areas. I am proud of some of the achievements that have been secured, but we face difficult economic times and cannot expect to keep spending large quantities of money in order to increase the quality of public services. The vast structures of the public sector, which were appropriate in the 1940s and ’50s, are now starting to struggle to deliver the improvements in services and the productivity increases that we need for the decades ahead.
Over the past 20 years, Governments of all colours have increasingly turned to the private sector for delivery of public services, in order to reduce costs and to provide better outcomes. Oxford Economics has estimated that the current outsourced market for public services has an annual turnover of £82 billion, representing 24% of the total spend on goods and services by public services. Rightly, therefore, in July 2011 the Government released their “Open Public Services” White Paper, which sought to lay out the future direction of public services through five key principles: first, wherever possible to increase choice; secondly, to decentralise public services to the lowest appropriate levels; thirdly, to open public services to a range of providers; fourthly, to ensure fair access to public services; and, fifthly, to make public services accountable to users and taxpayers alike.
Jim Shannon (Strangford) (DUP)
Is the hon. Gentleman aware that a recent Confederation of British Industry report stated that more opportunity for private and independent sourcing of public services could produce savings of £22.6 billion, while maintaining the quality of service? Is that what we should be looking at?
Chris White
I appreciate both the point made by the hon. Gentleman and the CBI’s report. I will be coming to some of those issues later in my comments.
I support those five principles, which I am confident that Members in all parties support as well. The Government have been clear that they are seeking to increase the amount of public services delivered by independent organisations. Seymour Pierce has predicted that the value of the public services sector will increase to £140 billion by 2014. That is a huge amount of public money and, rightly, we should be concentrating on how that money is spent and on how we ensure maximum benefit for our community. A concern, however, is that the principles outlined in the “Open Public Services” White Paper, to make our public services more accountable, more transparent and more in the control of communities, have not been realised in practice.
One deep concern is explained in the Social Enterprise UK report, “The Shadow State”, which has highlighted a significant lack of transparency and accountability, with information from those delivering our public services hard to come by. It also highlighted the increasing dominance of our public services by a small group of large multinational businesses and the difficulties that small business, charities and social enterprises have experienced in accessing provision of our public services.
Richard Fuller (Bedford) (Con)
My hon. Friend is a champion of social enterprise in the House, and we pay great tribute to his work. He is making a point about large private sector organisations. Is he, like me, sceptical about the big state, but also sceptical about big private corporations? The Government are making some strides in promoting local organisations, but does he believe they are being somewhat timid in their agenda to promote social enterprise locally?
Chris White
My hon. Friend is also a champion of such issues. My speech is about that very subject: the change from public sector monopolies to, perhaps, private sector monopolies. We should be sceptical about that, as he said.
We need to be clear that, if we are opening our public services, we are doing so to achieve what is best for our communities, in a way that gives choice to commissioners and service users and that ensures appropriate levels of accountability. Unless the Government are able to deliver on their principles, we will not get the outcomes that we want from public sector outsourcing.
Over the past two years, through my work on the Public Services (Social Value) Act 2012, I have had the opportunity to speak to many community organisations and social enterprises about the Government proposals for opening up public services. Most are keen to engage in the process and to deliver services that are important to their local community. There appears, however, to be a number of obstacles to their involvement, some of which have been highlighted in the report.
First, the size of many contracts is a problem. I appreciate that commissioning on a large scale can create efficient economies of scale, but those are not the only economies that we should be focusing on; the most useful economy is secured through successful outcomes. Large contracts do not always lead to better outcomes, and can increase costs in the long term. For example, the UK Border Agency issued £1.7 billion in contracts for asylum-seeker services in March this year, but each of the contracts was for more than £100 million, completely locking out our charities, social enterprises and small businesses. The Work programme, in which £3.3 billion of contracts were awarded, saw one quarter of the contracts go to one company. That is not the opening- up of public services. Only a handful of organisations can bid for contracts of such size. More accessible contract sizes would go a long way to change the situation, as well as enabling a larger degree of social value, as such contracts are able to target additional benefits to be created through the commissioning process.
Secondly, there is an issue of governance and transparency. Despite extensive research, it is difficult for the public to access information about many public sector contracts. If I or my constituents have questions about state-delivered public services, we may ask questions in this place or through correspondence with Departments to get the appropriate answer. Private companies, however, are often not so willing or forthcoming with information, leaving a sense of unease among the public. Only greater levels of transparency and accountability can change that. I fully support the Government’s efforts to provide details on public spending over £100,000 at both central and local government level. That transparency should and can be extended to all public service providers. We cannot have one rule for public sector organisations and another for private sector providers. I appreciate that some information will be commercially sensitive, but I am confident that we can find a method that balances the public’s right to know with commercial privacy.
There should also be a central register of public sector contracts, both local and national, that are being provided by independent organisations, whether private sector companies, social enterprises, or charities, both past and present. That should outline the size of the contracts, their length, the expected outcome, and information about their success. All that should be online for ease of public access, and would not involve significant cost, because such information should be collected by commissioners in the regular course of their work. That would enable the public to see not only who is providing what services, but how successful providers have been, and could be a useful tool for commissioners.
The Government have rightly championed the cause of transparency to improve our public services, but that must be carried out across providers. I hope that the Government will work with commissioners, private businesses, charities and social enterprises.
Richard Fuller
My hon. Friend is making a good point about the role of national Government and supporting local commissioners. Is there a role for national Government to name and shame commissioners who are too slow in opening up to local providers, and to name those who are doing a good job and are at the forefront of the breakthrough of social enterprise, but shame those who just want the default of taking what had been a public service and giving it to the large national contractors?
Chris White
Absolutely. Naming and shaming is always a useful tool in such circumstances. Our commissioners should be encouraged to have a greater sense of urgency in dealing with such matters.
The Government have rightly championed the cause of transparency, and public sector commissioners should take a closer look and a closer interest in the corporate structure of the organisations they are commissioning from. Traditional large multinational companies may have some advantages, but the social enterprise model may also have the potential to deliver better outcomes for our communities. At a time when we are seeking to spend every penny possible on better outcomes, there is concern that traditional private sector models that seek to deliver large returns for shareholders may lead to money seeping out of our public services that might otherwise be spent on improvements to those services.
Social enterprise combines the need to deliver profitability, to innovate and to deliver better outcomes with a sense of community purpose. Not only that, but most social enterprises reinvest their profits either back into the services they provide, or into the communities where they are based. Moreover, through the structure of community interest companies, which are a model that many social enterprises are adopting for public service delivery, communities are directly involved in the governance of the organisation. That gives communities greater levels of accountability than if those services are provided by larger organisations with less accessible governance structures such as multinational corporations. Sometimes that will not be possible, but the Government should encourage commissioners to be creative and to experiment with differing governance needs.
Thirdly, the Treasury can help directly by ensuring that small businesses, social enterprises and charities can have access to the finance they need to bid for these contracts directly. The creation of Big Society Capital has been an excellent example of the Government taking a direct approach to stimulate the social investment market, and social impact bonds also have great potential. However, those methods do not resolve all the issues that are in the way of civil society organisations, which is why the Treasury’s internal review of social investment is so important.
We must ensure that we create a new climate of confidence in the social investment market, so that mainstream lenders and institutional investors feel that they can participate. Big Society Capital is an important step forward, but on its own it will not be able rapidly to expand the social investment market. That will take place only when our banks, pension funds and venture capitalists take a full part in the market, so I hope that the Minister will give us an update on the progress of that internal review, and the main policy areas that the Government seek to address. Broadening community investment tax relief into social investment tax relief that gives incentives for direct investment into social enterprises and their intermediaries could be transformational, and relatively inexpensive.
The report—“The Shadow State”— highlights a number of key policy areas, such as child care, prison, welfare to work, and adult social care, which need to be addressed. The report is constructive and proposes solutions. I hope the Minister will take the time to read the report, and I am happy to give him a copy if he has not already read it.
As we embark on a change in how we deliver our public services, it is vital that we do so in the right way so that the public feel engaged in the process and we deliver services not only with the best outcomes, but in the right manner. Confidence in our public services is important because, without confidence, there is a danger that people will not access the services they need, leading to more expensive interventions down the line. Communities need to feel a strong relationship with the provision of those services, and that is why social enterprises, charities and small businesses are often better placed to deliver them.
The Government have rightly identified a problem in our banking sector about institutions that are too big to fail, yet there is a danger that by relying on a small clique of large multinational organisations to deliver our public services, we end up creating the same problem in public service delivery. The way to combat that is through changing the contract process so that we make contracts more winnable for smaller organisations, helping to build supply chains that are resilient and have a plethora of providers. That will not only reduce costs in the long term through proper competition on costs, but will spur forward innovation and enable greater personalisation and localisation of services.
The White Paper, “Open Public Services”, was a step in the right direction, building on a set of principles that have wide-ranging consensus. All parties went into the election promising to open the door for delivery of our public services, particularly to social enterprises, mutuals and charities. We must now all work together to ensure that implementation matches the rhetoric.
“The Shadow State” report has been useful in helping to refocus minds in this debate, and we must consider the issues now, while we are in the process of reform. We have a fantastic opportunity to change our public services for the better, to realise a future in which people feel ownership of the services they are using, and to spur innovation and creativity. The Government have rightly seen the need to reform public services, despite a period of considerable economic difficulty, but we now need to deliver on the principles that we have outlined.
Jonathan Lord (Woking) (Con)
I congratulate my hon. Friend on an excellent speech, and on his leadership in this matter. This debate contrasts enormously with another on the same subject in which at least two Opposition Members were decrying any involvement of private companies in the public sector. My Surrey community health care contract has gone to Virgin Care, and even within the first six months of operation, using much the same staff, but lifting the bar and using new working methods, the average waiting time for referral for a first appointment has gone down from 31 days to 19 days, and the waiting time to see a community nurse has gone down from seven days to two days. Customer satisfaction has risen from 71% to 82%. Is that not the sort of improvement that, if it were across the whole public sector, would do enormous good for all our residents?
Chris White
My hon. Friend makes a good point, and we should applaud such improvements. The same team is delivering the same products and achieving very different results. We should be able to see that across the sector.
To conclude, I hope that the Government will engage with all sides and work with our civil society organisations to help deliver our public services. We have a window of opportunity; let us use it.
The Economic Secretary to the Treasury (Sajid Javid)
I am grateful for the opportunity to speak under your chairmanship, Mr Chope.
The outsourcing of public services is an area in which my hon. Friend the Member for Warwick and Leamington (Chris White) has a great deal of experience; he feels strongly indeed. I commend him for the successful private Member’s Bill that he pushed through Parliament with support across the Benches and congratulate him on securing today’s debate. I agree with a number of points that he has made this afternoon, and I hope that he will, in turn, agree with some of the sentiments that I will express.
My hon. Friend referred rightly to the biggest issue facing the country: the size of the public sector deficit. There are a number of ways in which we need to go about fixing that problem. One of the most important is that when we spend public money—the taxes of hard-working people—we receive the best possible value in return. The outsourcing of public services, whether to small and medium-sized enterprises, social enterprises or larger organisations, is an excellent way to achieve that. I want to lay out the broad principles behind the Government’s approach and then talk about some of the specific reforms. I also want to talk about some of the measures that we have taken specifically to help SMEs and social enterprises.
The Government are committed to improving the quality of public services and delivering them more efficiently. Last July, as my hon. Friend rightly said— I am glad that he welcomed this—we published the “Open Public Services” White Paper, which set out five key principles: choice, decentralisation, fairness, accountability and diversity. If we are going to be successful in achieving those principles, transparency, which my hon. Friend also mentioned, is key. He talked about it, rightly, at length. Transparency is important to achieving all those principles.
Key elements of our approach include increasing the amount of services that we commission out, taking advantage of efficiencies and real-world benefits that the voluntary and private sectors can deliver and ensuring a diverse provision of services to drive quality through competition. We are also making greater use of payment by results, which is good for Government, because the financial risk is taken by the investor, not the taxpayer. It is also good for the voluntary sector, as it opens up many more opportunities for social enterprises and charities to deliver public services. I am sure that our thinking is very much in the same sentiment as that of my hon. Friend.
Let me turn to some of the key reforms. I know that it is easy for a Minister to stand on this spot and talk about theories and ideologies, so let me be a bit more specific and give some examples of concrete action that the Government have been taking. An example is the Work programme. The Government have taken tens of thousands of people off benefits and helped them into jobs. Figures released last month show that at least 56% of the scheme’s earliest participants have come off benefits, with 19% spending at least six consecutive months off them.
Another example is social impact bonds. My hon. Friend mentioned the importance of access to finance, particularly for SMEs, if they are to win contracts. Social impact bonds are a valuable new way to involve the voluntary, community and social enterprise sector in Government contracts based on payment by results. Already, almost 10 SIBs have been issued throughout the country, tackling reoffending, youth unemployment, homelessness and family breakdown.
We also have a big new opportunity for payment by results in probation, where we are testing a range of models with the private, public and voluntary sectors. As the Prime Minister said just a couple of months ago:
“With payment by results, your money goes into what works: prisoners going straight, crime coming down, our country getting safer.”
He has indicated that he wants to see payment by results spread right across the rehabilitation system by the end of 2015.
Richard Fuller
Regarding payment by results, I urge the Minister to be cautious about the difference between the desire to achieve improved performance based on payment by results in the short term and the provision of competitive tendering for Government contracts in the long term. One of the issues with privatisation is that it was a good way to make a substantial amount of money in the short term, but there have been competitive results in the long term. I think that part of today’s debate is about ensuring that the Government have the right balance between large corporations that can deliver in the short term and providing more availability for small and medium-sized enterprises to provide that competitive tendering in the long term.
Sajid Javid
My hon. Friend makes an excellent point about the tensions that sometimes exist between short-term goals and long-term goals, and he has used the excellent example of previous privatisation programmes. The Government will indeed take that into account.
With regard to prison procurement, we currently have five new contracts in train, bringing the total number of contracted-out prisons to 14. Let me move on to another example. In health care, we have seen an increased volume of treatments being delivered via independent providers. We heard an excellent example from my hon. Friend the Member for Woking (Jonathan Lord), who referred to Virgin Care in his own constituency. In 2010-11, 17% of hip replacements were delivered by independent providers—a rise from 0% in 2003-04. By outsourcing the services that I have highlighted, we are not only driving up the quality of services available and saving the public’s money, but increasing the public’s choice about the services that they receive.
My hon. Friend the Member for Warwick and Leamington spoke eloquently about the importance of social value in procurement. He is passionate about improving access to contracts for SMEs and social enterprises. I hope that he is pleased that the Government share that passion. In fact, every Department in Whitehall has a nominated SME Minister who is responsible for delivering an SME procurement action plan for that Minister’s Department. In the case of my Department, that Minister is me, so he will know who to harass if he believes that the Treasury is not making suitable progress in this area.
Thanks to the provision that I have described, more than 2,000 of the 5,700 contracts awarded through the Government’s contracts finder website have been allocated to SMEs, and we are taking steps to give SMEs greater opportunities to bid for contracts. The Government’s procurement pipelines give forward visibility of future potential public sector procurement opportunities, providing greater confidence for industry to invest. The Cabinet Office is tracking a pipeline of about 100 developing and established projects, worth £84 billion in total.
I thank my hon. Friend the Member for Warwick and Leamington not only for allowing us the opportunity to discuss this issue today, but for his tireless work in this area during the past two and a half years. “Procurement” and “outsourcing” are rather dry words that can, if we are perfectly honest, force more than the odd eye to glaze over. I am sure that my hon. Friend would agree, though, that discussions about procurement and outsourcing are crucial to ensuring that public money is spent wisely. I thank all hon. Members for their contributions today and I thank you, Mr Chope, for your chairmanship.
Question put and agreed to.
Written Ministerial Statements
EU Competitiveness Council
The Minister for Universities and Science (Mr David Willetts)
My noble Friend, the Minister of State for Trade and Investment (joint with Foreign and Commonwealth Office), Lord Green, has today made the following statement:
The EU Competitiveness Council took place in Brussels on 10 and 11 December 2012. I represented the UK on internal market and industry issues on 10 December, and my right hon. Friend the Minister for Universities and Science (David Willetts) represented the UK for research items on 11 December. A summary of those discussions follows.
The main internal market and industry issues discussed on 10 December were: state aid modernisation; industrial policy; Customs 2020; the union customs code; unified patent and the unified patent court; Single Market Act II; public procurement; and mutual recognition of professional qualifications.
Council began with a policy debate on the Commission’s plans to modernise the state aid rules. Commissioner Almunia set out the principles of the initiative, namely a more focused and simplified regime better aligned with EU2020 objectives that better tackled market failure and enhanced EU competitiveness while protecting the internal market. All member states intervened to support the Commission’s objectives, and most then raised specific issues with the proposals. For example, there were calls for more flexible rules on the use of regional aid, changes to thresholds and matching funding. I intervened to support the Commission’s approach, welcoming the intention for scrutiny of state aid to focus on the most difficult cases, and stating the need to avoid the use of state aid to prop up uncompetitive firms or in supporting national champions. Commissioner Almunia then summarised the discussion and said he would take note of the points made.
The next item concerned industrial policy. Firstly adoption of Council conclusions on an industrial policy communication, followed by an exchange of views on CARS2020—an action plan for a competitive and sustainable automotive industry in Europe. The Council adopted conclusions on the industrial policy communication with all member states in agreement on the compromise text. The Council then debated CARS2020. The debate in Council followed on from a dinner hosted by Commissioner Tajani the evening before the Council, which was attended by Michael Fallon, Minister for Business and Enterprise. Most member states intervened on this agenda item, acknowledging the importance of the automotive sector to the EU economy, with many stressing the importance of directing investments towards research and innovation in the sector. The impact on the automotive sector with respect to free trade agreements was also raised, with some member states advocating reciprocity in negotiations. There was also support for better regulation principles in the automotive sector, and ensuring coherence in all policies impacting the sector. I intervened to welcome the Commission’s action plan, whilst stressing that it is for individual companies to make commercial decisions based on capacity and business plans, who should be able to do this without hindrance or interference.
The next substantive agenda item was a discussion on Customs 2020. The Council agreed a partial general approach on the proposed regulation, which provides a legal basis for funding the customs action programme from 2014. At our request, the Commission supported the joint Council/Commission statement confirming that provisions in the regulation fall outside of Tile V. Discussion then turned to the union customs code dossier. The Commission were particularly concerned to meet the June deadline for the implementation of the recast customs code. Several member states, including the UK, recognised the deadline as a challenge, expressed commitment to achieve it in terms of content and timing, but also that we should not rush to agreement. However, other member states intervened to call for a speedy resolution. The dossier will be further discussed in working groups in January.
Following lunch (there was no Council-based discussion over lunch) the Council gave political endorsement to the patent package, which consists of the regulation creating a unitary patent, the regulation on the language regime and the inter- governmental agreement that would create the unified patent court. Some member states intervened to welcome the package, and some raised a few issues with the text but did not change their position regarding endorsement of the package.
Council conclusions were adopted on Single Market Act II without comment from other member states.
The next substantive agenda item was the public procurement package, consisting of three measures to update EU public procurement rules. The main outstanding point was whether the measure governing procurements by utilities should allow the Commission to initiate reciprocal action against third counties that did not open their procurement markets. At COREPER the presidency had added articles that replicated the existing arrangements whereby the Council could agree, by qualified majority, to restrict access by third countries in certain circumstances. The UK argued that these provisions were not necessary given that a separate legislative proposal on reciprocity was being discussed by trade Ministers, but that we could reluctantly accept the proposal on the clear condition that: they went no further than what was already in EU law; they applied to utilities only (and not general public sector procurements covered by the main “classical” directive); and in forthcoming trilogues with the EP this position should not be changed. Several member states intervened in a similar way. The other elements of package were also discussed. The presidency concluded that general approaches had been agreed on all three texts.
Earlier UK gains relating to mutuals, defence and security (including the revisions to the utilities and concessions texts negotiated after COREPER) and “flexibilisation” of processes, were not challenged so remain in the general approach texts agreed by Council.
The final substantive agenda item was mutual recognition of professional qualifications, where the presidency outlined the progress made on this directive over the past six months. Main interventions by member states concerned recognition of qualifications in the healthcare sector, while other member states called for the need for flexibility to reach agreement as soon as possible.
Several AOB items were discussed at the Council. On the consumer agenda, the presidency informed the Council that they had reached a provisional first reading agreement with the European Parliament on both instruments concerning the alternative dispute mechanism directive and the online dispute mechanism regulation. The presidency also announced that agreement had been reached on all the key provisions in the consumer programme initiative (except use of delegated acts and on the financial envelope) and the Commission also summarised the findings of the recently published consumer markets scoreboard. Three AOB items related to customs were also on the agenda. The Commission presented their report on the EU action plan on intellectual property rights 2009-12, the Council adopted a resolution on an EU customs action plan to combat intellectual property rights infringements 2013-17, and the Council also adopted conclusions on evolution of the customs union. All three dossiers passed without comment. A further AOB point concerned the European semester/annual growth survey, where the Commission discussed growth priorities over the coming year. Again, this passed without comment. The final AOB point concerned the accounting directive, where the presidency reported on the progress on negotiations with the European Parliament. There were still some issues to settle, though it was hoped agreement could be reached at the next trilogue on 18 December 2012.
On 11 December the Council opened with space agenda items, with an exchange of views on a Commission communication on the future relations between the EU and the European Space Agency (ESA). Vice-President Tajani opened the debate by noting the growing role that the EU was playing in space, highlighting Galileo/Egnos and the GMES earth observation system (now named ‘Copernicus’) as particular examples of EU action in this area, and emphasised that article 189 of the treaty on the functioning of the EU, which had introduced a union competence in space, meant that the EU was now an actor in its own right, alongside member states and ESA. Given the importance of the space sector for the EU’s future competitiveness, and as the EU relied heavily on ESA to deliver research and development on its behalf, Mr Tajani argued that the time was right to review the relationship and explore a wide range of options for improved co-operation.
During the discussion that followed the majority of member states agreed that it was appropriate to review relations, although the tone of the Commission’s communication, which focused almost exclusively on the difficulties in the existing relationship, came in for criticism from a number of quarters. A large number (led by the UK amongst others) emphasised that they valued the role of ESA and wished to maintain it as an independent intergovernmental organisation. The UK also noted that it was unfortunate that ESA had not been invited to participate in the discussion. At the end of the debate the Irish delegation confirmed that they intend to adopt Council conclusions on this issue during their presidency.
The main items discussed in the research part of the Council on 11 December were: the specific programme for Horizon 2020 (the EU’s research and innovation funding programme for 2014-20), the strategic innovation agenda (SIA) of the European Institute of Innovation and Technology (EIT), the EURATOM programme in Horizon 2020, and the European research area and international collaboration in research.
The presidency sought political agreement on draft texts of the specific programme (the document which sets out the scientific content of the programme) and the EIT’s SIA. On the former, member states agreed to wording in the presidency draft designed to strengthen member state oversight of the implementation of the programme through the member state committees which oversee the various elements of the programme. Several of the newer member states sought to press for amendments which would have strengthened actions aimed at widening participation in the programme; the UK, along with other member states with strong research sectors and the Commission, successfully resisted this move, arguing that the text already included compromises in this direction and that further changes would dilute the programme’s focus on excellence. There were also discussions of the civilian nature of the programme and on the provisions concerning the funding of human embryonic stem cells. Political agreement was reached on the basis of the presidency text with two minor amendments; Malta abstained.
Political agreement was also reached on the EIT SIA.
In other business, the presidency gave a short overview of progress on the EURATOM part of the Horizon 2020 programme. The Council adopted conclusions on the European research area which underlined the importance of completing this by 2014 and Ministers held an exchange of views on international co-operation in research and innovation, based on a Commission communication on this subject.
The lunchtime discussion involved Professor Anne Glover, the EU chief scientific advisor, who outlined her role and spoke on the importance of risk assessment in policy making.
During the discussion that followed my right hon. Friend the Minister for Universities and Science (David Willetts) underlined the important role that Professor Glover, other chief scientific advisors, and Ministers had to play in improving the use of scientific evidence in the policy-making process. In too many instances policies were driven by a restrictive interpretation of the precautionary principle which obstructed innovation by confusing risk and hazard, which risk undermining the EU’s ability to innovate and compete internationally in a range of fields. His intervention was picked up by others and the Irish expressed an interest in following up on it during their presidency.
Collective Redundancies
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
As part of the Government’s ongoing review of employment law, and in response to the red tape challenge, I have published today the Government response to the consultation on changes to the rules on collective redundancy. This sets out the Government’s decision to introduce legislative reform to those rules and new guidance by April 2013.
Consultation on the collective redundancy rules concluded on 19 September 2012 having sought views on a package to encourage better quality consultation in large-scale redundancies. We received 160 responses and held a number of focus groups. Consultees confirmed difficulties with the current rules that undermine the effectiveness of collective redundancy consultation and the ability of employers to restructure efficiently in response to market pressures.
The Government have concluded that a strong case has been made for a combination of legislative change and new guidance. We have decided to introduce a statutory change to reduce the current 90-day minimum period before very large redundancies can take place to 45 days. This change will allow businesses to restructure more effectively, and give them flexibility to respond to changing market conditions. But the 45 days will be a minimum consultation period. We received plenty of evidence to show that consultations can and do last longer than the minimum period and we expect that to continue where circumstances make this desirable.
We have also decided to legislate to exclude fixed-term contracts which have reached their agreed termination point from collective redundancy consultation obligations. The consultation demonstrated that employers, particularly in higher education institutes, struggle with existing uncertainty around whether the natural ending of fixed-term contracts triggers a requirement for collective redundancy consultation.
Legislative change will be through secondary legislation, subject to the affirmative resolution procedure. In addition, Acas will produce non-statutory guidance that addresses key contentious issues raised during consultation. The aim will be to promote good quality consultation and engagement between employers and employees.
I believe these reforms of the collective redundancy rules will strike an appropriate balance between ensuring employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.
Copies of the Government response have been placed in the Libraries of both Houses.
World Trade Organisation (Accession)
The Minister for Universities and Science (Mr David Willetts)
My noble Friend, the Minister of State for Trade and Investment, (joint with Foreign and Commonwealth Office), Lord Green’ has today made the following statement:
I wish to inform the House that the Government have opted in to the Council decisions relating to the accession of Lao People’s Democratic Republic (PDR) and Tajikistan to the World Trade Organisation (WTO).
In each case, opting in will help to achieve the Government’s trade policy objectives of expanding the WTO’s membership.
The Government have supported the accession of both Lao PDR and Tajikistan to the WTO on the right terms. In acceding to the WTO, they will embrace a series of rules and commitments which form the foundation of an open, transparent and non-discriminatory global trading system which will provide important guarantees for them and for the other WTO members. Accession to the WTO will bring them more firmly into the global economy and make them more attractive places to do business.
In each case, the Council decisions have the effect of extending to the acceding countries the horizontal commitments the UK makes to all WTO members, including in the provision of services by natural persons from third countries, otherwise known as “Mode 4”. It is the presence of these Mode 4 commitments in the relevant instruments which triggers the UK Justice and Home Affairs opt-in.
Enterprise Finance Guarantee Lending
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I am today announcing the publication of enterprise finance guarantee (EFG) lending figures by individual banks.
The Government are committed to ensuring that viable small and medium-size enterprises (SMEs) can obtain the finance they need for working capital and investment. EFG plays an important part in this, with over 9,900 SMEs being offered loans with a value in excess of £1 billion since May 2010.
The Government have made a number of important changes to the EFG scheme during the last 12 months. EFG loans are now available to an additional 3,800 businesses with an increase in the turnover limit from £25 million to £41 million. The maximum £1 million lifetime scheme limit has been replaced by a rolling £1 million limit. We also raised by 7%, the level of lenders EFG annual loan portfolios to which the Government guarantee applies from 13% to 20%.
This change was made to address the legitimate concern of lenders that they would breach their annual claim limit. In doing this, the Government committed to a more even share of the risk of default with the lenders, with the aim of removing that as a barrier to lending.
EFG is a demand-led scheme, accounting for 1% to 2% of overall SME lending. While utilisation is directly linked to subdued demand for credit in the wider economy, overall EFG lending levels are disappointing. There have been some positive signs, with a number of the main banks increasing EFG lending this financial year, albeit from a low level.
It is important that banks lend responsibly and make use of EFG when it is appropriate to do so, but it is clear from the EFG lending figures that a number of lenders could and should be doing more. The publication of individual bank EFG lending figures is intended to help achieve this. In parallel, we are exploring with the banks ways of flexing EFG to address debt serviceability, which is the principal reason behind loan declines. Further detail will be provided in the new year.
The Department for Business, Innovation and Skills, already publishes a wide range of EFG lending figures, which are updated on a quarterly basis. Publication of individual EFG lending figures will further enhance this, allowing business customers to identify which banks are making most use of the scheme, and also enable participating lenders and new market entrants to identity new opportunities, thus increasing choice and competition.
This marks a further step towards greater transparency in bank lending, specifically to SMEs. I am today announcing the publication of EFG lending figures by individual bank.
Credit Union (Maximum Interest Rate Cap)
(12 years ago)
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The Economic Secretary to the Treasury (Sajid Javid)
The Government have today published a consultation on raising the maximum interest rate cap for credit union loans. This consultation seeks views on the proposal to increase the maximum interest rate that credit unions can charge, from 2% per month to 3% per month.
The rationale for this proposal was explained in detail in a feasibility study commissioned by the Department for Work and Pensions (published in May 2012), which found that credit unions are currently unable to break even on small, short-term loans. This leads to a lack of stability in the sector, which is damaging for the long-term future of credit unions.
Allowing the maximum rate of interest to increase will enable credit unions to become more stable over the long term. This means that low-income consumers will have greater access to reliable, affordable credit, without having to resort to more expensive means, such as home credit or payday lenders, or worse, illegal lenders. Even with a 1% increase in the monthly rate of interest, credit union loans will still be substantially cheaper than the alternatives for consumers with no mainstream options. It is important to note that this increase in the interest rate would be permissive; it does not require credit unions to increase the interest rate they charge but simply permits them to do so if they judge that the benefits outweigh the costs. As such, the measure eases an existing regulatory burden on credit unions.
Many credit unions are strongly embedded in their local communities and are committed to assisting those on low incomes. Research shows that credit unions often appeal to low-income consumers as bodies which are local, accessible and convenient, and which are community based. Giving credit unions more flexibility in their lending will enable them to recruit new members, and further establish their role in helping the financially excluded.
The Department for Work and Pensions, HM Treasury, and the Department for Business Innovation and Skills will continue to work closely on all aspects of the credit union expansion project including this consultation, and any consequential legislation.
I am placing copies of this consultation document in the Libraries of both Houses.
Parliamentary Scrutiny of Government Expenditure
(12 years ago)
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The Chief Secretary to the Treasury (Danny Alexander)
In September 2010, the hon. Members for Gainsborough (Mr Leigh) and for Southport (Dr John Pugh) were appointed as financial advisers to HM Treasury. The hon. Member for Gainsborough stepped down from the role of financial adviser following his appointment as Chair of the Public Accounts Commission in 2011, and the hon. Member for Southport followed suit. I am grateful for the work they undertook in this capacity.
The MPs prepared a report in 2011 on how parliamentary scrutiny of Government expenditure could be improved. Many of the recommendations contained in the report fall within the responsibility of Parliament. However, the Treasury is working to implement the recommendation that the Government take forward plans for developing mid-year reporting by individual Departments. Work on mid-year reporting is underway and, subject to satisfactory progress, we plan to introduce mid-year reporting from 2013-14.
A copy of the report is being placed in the Libraries of both Houses.
Building Regulations
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
I am setting out today the changes that will be made to the building regulations regime in England to deliver an even better and more cost-effective way of ensuring our buildings remain safe and sustainable. The changes will deliver savings of around £50 million per year to business. In addition, legislation will also be laid before Parliament shortly to amend the energy performance of buildings regulations and to repeal unnecessary fire provisions of local Acts which overlap national provisions.
The consultation paper issued by the Department for Communities and Local Government on 31 January this year contained a range of proposals to improve the building regulations regime. I am setting out today decisions on the deregulatory changes. I am also publishing today a document providing a factual summary of the responses received. The changes have been developed after active engagement with external partners and demonstrate the Government’s ongoing commitment to ensuring that where regulation is necessary the impact on business is properly considered and the associated cost minimised. Decisions on the outstanding issues relating to the energy efficiency of buildings, on better targeting of radon protection measures and the referencing of British standards for structural design based on Eurocodes will be set out in a further statement next year. We will also set out next year the outcome of the review of the framework of building regulations and local housing standards which I announced in October.
Engagement with our external partners shows that they continue to value the national minimum standards provided by the building regulations. However, where any concerns do arise it is necessary to address them. That is why we listened to those that expressed concern with the costs associated with the electrical safety in the home provisions in part P of the building regulations. Some have even advocated that part P should be revoked as a burdensome requirement on competent electricians. We disagree—part P has been a success—but we do recognise that there is scope to streamline the requirements by removing the requirement to notify smaller-scale, lower-risk electrical work to a building control body. Currently homeowners can face building control fees of upwards of £240 to have simple electrical work, such as an additional plug socket in a kitchen, approved by a local authority. This change will see the notification requirements focused on higher-risk jobs like the installation of new circuits, or work in the vicinity of showers and baths, which is the right approach. There will, of course, remain a duty for these non-notifiable works to comply with the safety provisions required by the regulations and which we have also updated.
The new part P seeks to achieve a reasonable balance of risk. We will continue to monitor indicators which can help identify the impact of the changes and keep this under review. But the key to ensuring electrical work is done properly is to employ competent electricians and so the Department will continue to work closely with external partners to identify what more can be done to promote the importance of complying with the provisions of part P through use of a suitably qualified electrician. In addition, I will be bringing forward further regulations later next year that will introduce an alternative route to demonstrating compliance with part P by allowing for third-party certification of electrical work. This will safeguard standards while providing a far cheaper way of verifying work is adequate—particularly for those carrying out DIY work. These changes will be accompanied by simpler, clearer and shorter guidance in a new approved document P that we will be publishing shortly.
In addition, we will be making a number of other changes to the building regulations. We will amend the technical guidance in approved document B (fire safety). In particular, we will update guidance in respect of lighting diffusers which has grown out of date as lighting technology has changed considerably. We will also, in relation to wall coverings, be taking forward changes to mitigate problems associated with how the European reaction to fire classifications work in practice. In effect, the changes will maintain the status quo, for example, allowing wallpapers that are currently used to continue to be so in the future. Both these changes have been supported by independent research which shows there are no adverse impacts on safety.
We will also be taking forward rationalisation of guidance supporting parts M, K and N (access, protection from falling, collision and impact and glazing respectively) to address areas of conflict and overlap, which again impose unnecessary costs. At the same time we will clarify the guidance on access statements in approved document M to promote a more proportionate, risk-based approach. These changes will be delivered by clearer guidance in a new approved document K and amendment of other approved documents which I will be publishing shortly. We intend that all of these deregulatory changes will come into force on 6 April 2013.
In addition to the changes to the “technical” provisions, we have also agreed a number of improvements to the building control system. These are relatively minor changes to benefit both local authorities and approved inspectors through changes to the procedures around completion certificates, statutory notifications and removal of the “Warranty Link Rule”.
The changes to regulations also extend the scope for existing competent person scheme operators. This will allow more work to be self-certified and thereby avoid the need to notify a building control body or pay a building control charge.
In relation to the building regulations, we will also be publishing shortly a new approved document 7 which provides updated guidance on adequate materials and workmanship for building work, in particular the implications of the full implementation of the European Construction Products Regulation on 1 July 2013.
Updated energy performance of buildings regulations will also be laid before the House shortly. These, in addition to consolidating the existing regulations, transpose the requirements of the recast energy performance of buildings directive 2010 and remove unnecessary “gold-plating”. The directive is an EU measure designed to tackle climate change by reducing the amount of carbon produced by buildings.
The new requirements will be introduced on 9 January 2013. The key measures include a requirement for property advertisements to include details of the energy performance certificate rating where available; removal of the requirement to attach the front page of the certificate to any written material; exempting listed buildings from the need to have a certificate on their sale or rent; extending the current requirement for a display energy certificate in large public buildings, to public buildings above 500m2; and introducing a requirement for a certificate to be displayed in commercial premises larger than 500m2 that are frequently visited by the public and where one has been previously issued.
Finally, given this statement relates to the regulation of buildings, I am informing the House that I will also shortly be laying regulations to repeal unnecessary fire provisions in 23 local Acts. The decision has been taken in the light of previous consultation which found no evidence to justify maintaining requirements which go beyond the necessary protection already afforded nationally through the building regulations, and lead to differing and inconsistent rules even within fire and rescue authority areas. Evidence does not establish any statistically significant impact on life safety. These changes are intended to come into force on 9 January 2013.
I will be placing the revised guidance in the approved documents referred to above, along with the impact assessments that accompany all of these changes, in the Library of the House when they are published shortly and alongside the summary of responses that I am placing there today.
Defence Reform Report
(12 years ago)
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The Secretary of State for Defence (Mr Philip Hammond)
My noble friend Lord Levene of Portsoken has conducted the first annual review of implementation of his defence reform report recommendations of June 2011, and has written to me setting out his conclusions.
I welcome Lord Levene’s recognition of the strong progress made to date in implementing his recommendations, and his confidence that the delivery of the majority of them will be achieved in time to transition to a new operating model for the Ministry of Defence (MOD) in April 2013.
Some of the key changes of defence reform are already complete, such as strengthened top-level decision making and the focus on strategic direction from a newly-constituted Defence Board, which I chair. The Joint Forces Command has been established and its first commander appointed. Many other recommendations are on track for delivery by April 2013 with the implementation of the new delegated financial and military capability operating model: this will strengthen accountability and give the Service Chiefs much greater freedom to manage their resources and plan for future capability.
A few recommendations will take longer to complete. I acknowledge that there is more to do in some areas, such as development of the whole force concept and the delivery of improved management information, and I value Lord Levene’s continued interest and focus on these important changes.
I am placing a copy of Lord Levene’s letter in the Library of the House, together with the MOD’s summary of progress against the 53 defence reform recommendations.
Red Arrow Hawk XX179 (Service Inquiry)
(12 years ago)
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The Minister of State, Ministry of Defence (Mr Mark Francois)
I wish to inform the House of the findings of the service inquiry into the accident involving RAF Aerobatic Team Hawk T Mk 1 XX179 on 20 August 2011, in which Flight Lieutenant Jon Egging was tragically killed.
On the day of the accident, following a successful aerobatic display at Bournemouth air festival, the Red Arrows returned to Bournemouth international airport. During the formation manoeuvre to position for landing, XXI79 developed a progressively steepening downward flight path and was observed to crash in open fields south of the airport perimeter. The aircraft broke up before coming to rest in the vicinity of the River Stour.
A service inquiry was convened by the director general of the Military Aviation Authority to examine the cause of the accident and to make recommendations to prevent recurrence. The service inquiry panel has conducted an independent, thorough and objective inquiry and its report is now complete.
An executive summary of the full report has previously been provided to relevant defence stakeholders to ensure the timely dissemination of these air safety lessons. The more acute recommendations have already been implemented by the chain of command.
The coroner’s inquest into the death of Flight Lieutenant Egging has now concluded. As such, a copy of the service inquiry, redacted in accordance with the provisions of the Freedom of Information Act 2000, is being placed in the Library of the House today and on the Ministry of Defence website.
Oil and Gas Regulatory Regime
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
I am today publishing the response to the Maitland review’s recommendations on the UK’s offshore oil and gas regulatory regime.
On 20 April 2010, the Deepwater Horizon drilling rig, working on the Macondo well in the gulf of Mexico, exploded leading to the tragic deaths of 11 personnel and the loss of 4.9 million barrels of oil to the sea. While the offshore UK oil and gas regime is regarded as one of the strongest in the world, the Government wanted to ensure that the UK considered the findings from the official Macondo reports and their relevance to the oil and gas industry in the UK.
The Government asked Geoffrey Maitland, Professor of Energy Engineering at Imperial College London, to chair an independent review panel to carry out this task. Mick Temple (retired BAA Development Director and currently a Member of the Faculty of Sustainability Leadership at the University of Cambridge) and Professor John Shepherd (Research Fellow in Earth Systems at the University of Southampton) also provided their considerable expertise to the panel.
The independently chaired panel published its report in December 2011. The report made recommendations around 10 key themes: well planning and control, environmental protection, emergency response, learning from incidents and best practice, implementation assurance, competency and training of the workforce, workforce engagement, liability and insurance, regulator issues and technology development.
A steering group of representatives from the Department of Energy and Climate Change (DECC), the Health and Safety Executive(HSE), the Maritime and Coastguard Agency (MCA) and the industry representative body Oil and Gas UK have carefully considered the Maitland review recommendations. I am pleased today to publish the response to the panel’s recommendations. I have deposited copies of the response document in the House for Members to read.
The majority of the recommendations have been positively received and implemented in full; some of the work is ongoing, but where this applies work plans with appropriate target dates for completion are in place and detailed in the response. There were other recommendations, where after full and careful consideration, it was concluded that an alternative approach was more appropriate to achieve a similar outcome. Where this is the case, a full explanation of the work that was undertaken to reach the alternative conclusion is contained in the response.
A new senior oversight group, comprising DECC, HSE and MCA, will supervise the successful implementation of the Maitland review recommendations that are still being delivered as well as ensuring that the offshore regime remains fit for purpose in the longer term.
I believe that the Government and industry responses to the independent panel’s recommendations, alongside other ongoing work, will ensure that the UK continental shelf (UKCS) offshore oil and gas industry builds upon its existing high standards by: protecting the environment; engaging and safeguarding its workforce; responding to emergencies and introducing new mechanisms on financial responsibility so that petroleum licensees on the UKCS must demonstrate that they have the financial capability to response to an incident before consent is given to drill exploration and appraisal wells.
Agriculture and Fisheries Council (December)
(12 years ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
The next Agriculture and Fisheries Council is on Tuesday 18 to Thursday 20 December in Brussels. I will be representing the UK, accompanied by the Under-Secretary of State for Environment, Food and Rural Affairs, responsible for the natural environment, water and rural affairs, my hon. Friend the Member for Newbury (Richard Benyon). Richard Lochhead MSP, Alun Davies AM and Michelle O’Neill MLA will also attend.
Tuesday will concentrate on fisheries. Wednesday will be split between agriculture and fisheries with the possibility that the latter will go into Thursday. Discussions on fisheries will cover fixing the 2013-14 fishing opportunities for deep sea stocks applicable in the Black sea and EU/Norway 2013 annual consultation, establishing a long-term plan for cod stocks, and fishing opportunities available in EU waters for EU vessels, in non-EU waters for stocks and groups of fish which are subject to negotiations or agreement.
The discussion on agriculture will focus on the presidency’s progress report on the CAP reform negotiations.
There are currently three any other business items on vine planting rights, a declaration of eastern European countries conclusions of the international conference on the movement of exotic animals and a report from the Commission about the phasing out of the milk quota system.
Agriculture and Fisheries Council (November)
(12 years ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
I attended the Agriculture and Fisheries Council on 28 and 29 November in Brussels covering agricultural issues. I was accompanied by the Minister of State, Department for Environment, Food and Rural Affairs, my hon. Friend the Member for Somerton and Frome (Mr Heath), and the Under-Secretary of State for Environment, Food and Rural Affairs, responsible for the natural environment, water and rural affairs, my hon. Friend the Member for Newbury (Richard Benyon), who spoke on fisheries issues. Alun Davies AM, Richard Lochhead MSP and Michelle O’Neil MLA also attended.
The substantive business of the Council began with a lunch for agriculture Ministers during which we discussed the topic, proposed by the presidency, of “the current context of CAP reform”. In the course of discussion it became clear that a significant number of member states did not share the presidency’s view that agreement of a “partial general approach” on the CAP reform proposals could be achieved at the December Council. The presidency accordingly indicated that they would instead provide a report of the progress made on the reform package.
Discussion in the formal session of Council covered three aspects of the CAP reform package, addressing a series of questions posed by the presidency to guide discussion.
On greening of direct payments, the presidency sought views on the concept of equivalence, governing any flexibility accorded to member states on how they implemented the requirements. All agreed that an equivalence regime had to be simple, transparent and efficient. Some member states highlighted the need for some form of ex ante approval process to ensure that “equivalent” measures implemented would not subsequently be deemed insufficient by auditors. Several member states stated that it was important to avoid double funding of the same actions through both direct payments, and rural development funding, but there was little clarity on how this would be achieved.
On the regulation governing the Single Common Market Organisation the discussion focused on whether to retain the date of 2015 for ending beet sugar production quota, as agreed in previous reforms, and on vine planting rights. On sugar, some member states wanted to keep to the original agreement and end quotas in 2015, most beet-producing countries wanted to maintain quota until at least 2020 and those countries which conceded quota previously argued to have it returned. The Commission (Ciolos) held firm on its proposal. Member states also raised aspects of the regulation they were unhappy with. These included milk quotas, vine planting rights, marketing standards, reference prices and producer organisations.
On the rural development regulation, member states raised important outstanding issues. Most member states felt this was the closest regulation to agreement but more work was needed on several detailed aspects.
Council considered a Commission proposal to permit the use of lactic acid as an anti-microbial surface treatment. No member state changed its previously indicated position, and the Council offered no opinion. If the European Parliament does not reject the proposal (which now seems likely as the Parliament’s Environment Committee approved it), it will be referred back to the Commission to adopt once the four-month scrutiny period expires on 3 February 2013.
Under any other business a report on the rural development error rate was raised by Commissioner Ciolos. At above 7%, it was the highest error rate across all EU budget lines and well above the materiality threshold of 2%. He identified some reasons why this might be the case and suggested that simplification as part of CAP reform could make implementation simpler.
Spain raised the EU-Morocco agriculture agreement, complaining that import prices for tomatoes from Morocco were below the agreed entry price. In response, the Commission pointed out that this is not unusual for this time of year, concluding that this is an issue for national customs authorities who implement the regulations. Spain acknowledged this but thought the Commission should do more to ensure that the correct levies were being applied throughout the EU.
Austria tabled a short paper on their “New European Food Model”, and a number of member states supported the initiative, despite its absence of clarity on mechanisms. The Commission suggested it would be a good topic for a future informal Agriculture Council, once CAP reform had concluded.
On fisheries business the Council agreed total allowable catches for 2013 and 2014 for deep-sea species. This was agreed by qualified majority vote, with Sweden voting against. In line with UK requests, alongside the final text the Commission tabled a declaration on the need to seek scientific advice on adding the lowfin gulper shark to the list of species defined as deep sea sharks.
On EU/Norway the Council heard an update from the Commission on the first round of talks, and were invited to highlight priorities for the second round taking place 3 to 7 December. The UK underlined the importance of a successful outcome on North sea cod and mackerel.
Under any other business Denmark called for a more streamlined decision-making process for fixing the catch limits for Norway pout. The Netherlands also tabled a paper on their concerns on the technical conditions under the new protocol for the EU/Mauritania fisheries agreement.
Foreign Affairs Council/General Affairs Council
(12 years ago)
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The Minister for Europe (Mr David Lidington)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I attended the Foreign Affairs Council (FAC) on 10 December, the Foreign Secretary attending the initial part before handing over to me. I attended the General Affairs Council (GAC) on 11 December in Brussels. The Foreign Affairs Council was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland, and the General Affairs Council was chaired by the Cypriot Presidency, the Deputy Minister for European Affairs, Ambassador Andreas Mavroyiannis, and the Minister for Foreign Affairs, Dr Erato Kozakou-Markoullis.
Foreign Affairs Council
Commissioners Füle (enlargement and European neighbourhood policy) and Georgieva (international co-operation, humanitarian aid and crisis response) were also in attendance for some of the discussions.
A provisional report of the meetings and all conclusions adopted can be found at: http://www.consilium. europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/134152.pdf.
EU-Russia Summit
Over lunch, Ministers discussed the EU-Russia summit which will be held in Brussels on 21 December. There was a widely shared view that the EU should focus on human rights, including the role and freedom of non-governmental organisations (NGOs); push Russia to end its restrictive trade practices in order to comply with its World Trade Organisation obligations; press for implementation of the agreement on Siberian overflight royalties; and reaffirm the importance of the third energy package.
Middle East Peace Process
Over lunch, Ministers considered the need for re-engagement by the international community on the middle east peace process in 2013. Ministers agreed conclusions calling for the parties to return to negotiations without precondition with international support; expressing deep dismay at and strong opposition to recent Israeli announcements on settlements; calling on Israel to avoid undermining the financial situation of the Palestinian Authority; and urging the Palestinians not to build on their change in UN status in a way that would undermine a return to talks.
Southern Neighbourhood
The Council debated the latest developments in Syria, ahead of the next meeting of the Friends of Syria group in Marrakech on 12 December. During lunch, Ministers exchanged views with Ahmed Moaz Al-Khatib, President of the National Coalition for Syrian Revolutionary and Opposition Forces.
Ministers agreed conclusions on Syria, expressing their concern at the deteriorating situation, and the need for greater protection of civilians. The conclusions state that
“the EU accepts (the National Coalition for Syrian Revolutionary and Opposition Forces) as legitimate representatives of the Syrian people”.
The conclusions reiterated that
“if concerns about war crimes and crimes against humanity are not adequately addressed on a national level, the International Criminal Court should deal with the situation”,
and called upon the United Nations Security Council
“to urgently address the situation in Syria in all aspects”.
Ministers expressed their concern about the situation in Egypt, ahead of the planned referendum on 15 December. They agreed that it was in the EU’s interest to see a democratic, inclusive, economically-sound Egypt, and noted the need for strong EU engagement with Egypt, based upon mutual accountability.
Ministers discussed the situation in Libya. The High Representative stated that there had been a number of positive developments in Libya, politically and economically, and that the EU now needed to develop co-operation in border management and security. Ministers welcomed the fact-finding mission, which had demonstrated significant Libyan political will to engage. Ministers noted that the EU needed to build on and sustain contacts with the Libyan authorities and UN so that international efforts were co-ordinated and met Libyan requirements.
Western Balkans
Ministers had a short discussion on western Balkans issues. This was one of a series of western Balkans related meetings building up to the General Affairs Council discussion of the enlargement conclusions. The High Representative briefed Ministers on the latest developments in the Belgrade/Pristina dialogue, noting that the successful opening of two crossing points was a significant step in terms of integrated border management implementation. Member states welcomed the leadership of Baroness Ashton on this issue. The need to maintain a credible EU perspective for Macedonia was also raised.
Council Conclusions
As I anticipated in my pre-Council statement, Ministers agreed conclusions without discussion on Ukraine and the Democratic Republic of the Congo. In addition, Ministers approved the crisis management concept for a common security and defence policy military mission aimed at providing training and advice to the Malian armed forces; and the revised crisis management concept for the EU training mission for Somalia. In the light of the Democratic People’s Republic of Korea’s recent announcement of its plan to launch a satellite, in breach of UN Security Council Resolutions, the Council agreed conclusions expressing deep concern, urging the DPRK not to conduct the launch, and signalling the need for an international response, potentially including sanctions, were the launch to go ahead.
Ministers agreed without discussion a number of others measures, including:
Approval of the EU position and provisional agenda for the 13th meeting of the EU-Azerbaijan Co-operation Council, to take place on 17 December in Brussels.
Approval of the EU position and provisional agenda for the 13th meeting of the EU-Georgia Co-operation Council, to take place on 18 December in Brussels.
Approval of the EU position and provisional agenda for the 13th meeting of the EU-Armenia Co-operation Council, to take place on 17 December in Brussels.
Adoption of a decision on the signing, on behalf of the European Union, of a protocol to the partnership and co-operation agreement with the Republic of Armenia, which will allow the participation of Armenia in EU programmes. It forwarded the draft decision on conclusion of the protocol to the European Parliament for its consent.
A review of the list of persons, groups and entities subject to EU restrictive measures with a view to combating terrorism, according to common position 2001/931/CFSP. No changes were made to the measures, which currently affect 11 persons and 25 groups and entities.
Approval of preparations for the annual review of EU restrictive measures against Iran.
Adoption of the implementation plan for the EU advisory and assistance mission for security reform in the Democratic Republic of the Congo (EUSEC RD Congo) for the period until 30 September 2013.
General Affairs Council
A provisional report of the meeting and all conclusions adopted can be found at:
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/EN/genaff/134235.pdf
Statute of the Court of Justice of the European Union
The GAC discussed the issue of the appointment of nine additional judges for the General Court of the Court of Justice of the European Union. The presidency presented their proposals, suggesting a rotating system between member states with a weighted allocation. I emphasised the importance of sufficient representation of judges from a common law background and stressed the need to ensure that the proposals were budget neutral. There was no consensus on this issue which will be revisited next year.
European Semester and the Annual Growth Survey
The Commission presented the main priorities for this year’s annual growth survey, stressing that member states must “stay the course” on fiscal consolidation and structural reforms if the EU is to achieve long-term, sustainable growth. The incoming Irish Presidency then outlined their road map for handling the process in Council, focusing on the importance of bilateral dialogue and multilateral surveillance to resolve member states’ concerns relating to country specific recommendations.
Preparation for the December European Council and February European Council
The presidency announced the agenda for the February European Council, which is due to focus on trade and external relations. The outcome of the December European Council will be covered in the Prime Minister’s statement to the House of Commons and the Leader of the House of Lords’ statement to the House of Lords.
The 18-month programme for the Presidencies of Ireland, Lithuania and Greece
The GAC endorsed the programme of the incoming trio of presidencies; Ireland, Lithuania and Greece. The programme covers a broad range of priorities for the next 18-month period. For Ireland, the key was strengthening economic and monetary union, implementing agreed reforms to economic governance, and securing financial stability including banking union. Ireland also looked for progress on the multi-annual financial framework and related dossiers. They underlined the importance of measures which have the potential to improve competitiveness and create jobs and growth. Finally, they also want to see progress on third-country trade agreements.
Enlargement
The GAC discussion focused on Macedonia, Serbia and Kosovo. The Council agreed a package of conclusions on enlargement including important steps forward for several countries, which rightly recognise their progress so far.
The Council made its commitment to Macedonia’s EU path clear with the Council taking a possible decision on opening accession negotiations during the next presidency, based on a report to be presented by the European Commission in spring 2013 on progress relating to good neighbourly relations and movement on the name issue. This is an important and valuable opportunity for Macedonia to move further forward next year, and we look forward to a positive decision to open accession negotiations soon. I welcome, in that regard, the Commission starting preparatory work. Likewise the Government are pleased that the Commission will propose negotiating directives to take forward Kosovo’s EU path with a stabilisation and association agreement, once Kosovo meets the short-term conditions. This will be a significant step forward for Kosovo.
The High Representative briefed again on the EU-led dialogue between Serbia and Kosovo. I set out the UK Government’s continued firm support for Serbia’s EU future. The Council undertook to review during the first half of next year progress on the conditions the Council has agreed for Serbia to open accession negotiations, including progress in the dialogue and irreversible progress on the parallel structures in northern Kosovo, as reiterated by the High Representative. The Council was clear that it wanted to see Serbia moving to the next stage as soon as they have met the conditions to do so. The recent steps taken in the EU-led dialogue between Serbia and Kosovo had shown that both countries can move forward and deal with difficult issues, enabling them to continue on their European paths. I welcomed the steps taken by the parties so far and I endorsed the Council’s commendation for Prime Ministers Dacic and Thaci; they had approached their recent discussions in a statesmanlike and courageous manner. The Council expected the two sides to continue and accelerate their work in addressing all aspects of the relations between them.
The conclusions on Bosnia and Herzegovina set out the Council’s concern about the slow progress being made in Bosnia and Herzegovina and stalled reforms there; and the risk that Bosnia and Herzegovina will lag further behind her neighbours unless the political leaders deliver on the actions they have agreed. The GAC called on the Bosnian leaders to act, in the interests of their citizens.
The Council conclusions also covered Albania, reflecting recent progress and underlining the need to further intensify efforts as identified by the Commission. The successful conduct of parliamentary elections in 2013 will be a crucial test for the smooth functioning of the country’s democratic institutions.
The Council adopted forward-looking conclusions on Turkey which will allow the accession process to be taken forward in 2013.
The Council looked forward to Croatia’s accession and welcomed progress made by Iceland and Montenegro.
I will continue to update Parliament on future Foreign Affairs Councils and General Affairs Councils.
Science and Technology Committee Inquiry
(12 years ago)
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The Minister of State, Department of Health (Norman Lamb)
My hon. Friend the Under-Secretary of State, Department of Health, Earl Howe, has made the following written ministerial statement:
The Government have today laid before Parliament their response to the House of Commons Science and Technology Committee inquiry into the regulation of medical implants in the UK and the EU (Cm 8496).
The Government welcome the Committee’s report and its focus on the importance of increasing transparency and accountability in the regulation of medical implants. The Government agree with the Committee on:
strengthening transparency;
improving the consistent quality of notified bodies across the EU;
increasing access to scientific expertise;
limiting the burden on small and medium-sized enterprises;
building on the current regulatory system;
introducing stricter rules on when manufacturers can rely on clinical data which is sourced from studies on a similar device; and
improving the environment for clinical investigations.
The Government are committed to further considering the Committee’s recommendations on requiring health care professionals to report serious adverse incidents and introducing a “Black Triangle Scheme”, which currently exists as a voluntary scheme for medicines, to medical devices. The Government will continue to consult with the National Joint Registry for England and Wales (NJR) on the Committee’s recommendation to publish raw data from the NJR.
As regards the Committee’s criticism that the Medicines and Healthcare products Regulatory Agency (MHRA) reacted too slowly to Australian data on the safety problems of metal-on-metal hips, the Government would like to reiterate that the MHRA was the first regulatory authority in the world to issue advice on monitoring and patient management in April 2010. The analysis of data from the National Joint Registry for England and Wales was key to the worldwide action to recall the particular metal-on-metal hip system in August 2010.
Health Allocations 2013-14
(12 years ago)
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The Secretary of State for Health (Mr Jeremy Hunt)
Today I am informing the House that the NHS Commissioning Board has announced the allocations to clinical commissioning groups (CCGs) for 2013-14 of £63.4 billion.
The board’s overriding objective is to improve outcomes for patients and to reduce health inequalities. Together with ensuring stability during transition, this has driven the decisions the board has taken in the approach to allocations for next year.
All CCGs will receive an identical increase of 2.3%, which will ensure that funding is stable in the first year of the new commissioning arrangements and supports a smooth transition. The board is also initiating a review of the approach to allocations, not just confined to CCG allocations, to give the best opportunity to improve outcomes for patients and tackle health inequalities.
Full details of the allocations have been placed in the Library and can be seen at: www.commissioning board. nhs.uk/files/2012/12/ccg-allocations-13-141.pdf. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Bill of Rights (Commission)
(12 years ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Today, in accordance with a timetable set in its terms of reference, the Commission on a Bill of Rights has delivered its final report jointly to the Deputy Prime Minister and to me.
The Government thank the Commission for the diligent manner in which it has discharged its task. This reflected the remit set out in the coalition’s programme for Government for establishing a Commission to examine the creation of a British Bill of Rights that
“incorporates and builds on all our obligations under the European Convention on Human Rights, ensures that these rights continue to be enshrined in British law, and protects and extends British liberties”.
We will now give the report careful consideration.
Mesothelioma Claims (Reform)
(12 years ago)
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The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
Today I am announcing the Government’s intention to consult publicly on proposals to reform the way that mesothelioma cases are dealt with, including; introducing fixed legal fees for mesothelioma claims, a dedicated pre-action protocol for those claims and an electronic portal on which the claims will be registered. The consultation will be issued in spring 2013. The aim is to ensure that these claims are processed and settled as quickly as possible given the nature of this disease.
As part of that consultation, we will carry out the review required under section 48 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 on the effect of the changes to the recoverability of conditional fee agreement success fees and after the event insurance premiums. We intend to publish the outcome of that review next autumn.
Mesothelioma is an aggressive and terminal occupational disease with an average life expectancy of less than two years from diagnosis. A claim for compensation can take up to two years to settle which means that sufferers often die before their claims are paid out.
The Government consider that it is imperative that these claims are settled quickly and that early payment of compensation is made so as to ease the sufferings of victims of this dreadful disease and give some assurance that their dependants will be financially secure when they are no longer around. However, this cannot be achieved without a speedy pre-litigation process which is why the Government have decided to consult on how best to reduce delays in these cases.
Third Parties (Rights against Insurers) Act 2012
(12 years ago)
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The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
In a written ministerial statement—12 July 2012, Official Report, column 145WS about the Third Parties (Rights against Insurers) Act 2010 the then Parliamentary Under-Secretary of State, my hon. Friend the Member for Huntingdon (Mr Djanogly) undertook to make a further statement in the autumn.
The Ministry of Justice is continuing to prepare the way for the commencement of the 2010 Act at the earliest practicable date.
We are very grateful to the Association of British Insurers, the Association of Personal Injury Lawyers and the Law Commission for their assistance in connection with the preparation of the Act for commencement.
I will make a further statement before the end of the current session of Parliament.
Government Equalities Office
(12 years ago)
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The Prime Minister (Mr David Cameron)
I am today confirming a machinery of government change concerning the Government Equalities Office.
The Government Equalities Office now reports to the Minister for Women and Equalities who is also the Secretary of State for Culture Media and Sport. The Government Equalities Office is now formally a part of the Department for Culture, Media and Sport.
EU Transport Council
(12 years ago)
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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I will attend the last Transport Council of the Cypriot presidency (the presidency) taking place in Brussels on Thursday 20 December.
The Council will be asked to reach a general approach on the proposal for a directive of the European Parliament and the Council on periodic road worthiness tests for motor vehicles and their trailers and repealing directive 2009/40/EC. I was very concerned when we first received the proposal from the Commission. The Commission’s impact assessment was inadequate and failed to make the required links between the costs and benefits of new requirements. It was also incomplete as it did not accurately assess costs in all member states. Our initial analysis was that it would cost over £1 billion pounds to implement while having an insignificant positive impact on road safety in the UK.
The position we adopted during the negotiation of the draft periodic roadworthiness regulation at Council working group meetings has been to resist additional burdens where insignificant road safety benefit was identified. With the support of the UK and other member states in resisting excessive burdens, the presidency has proposed moving from a regulation to a directive and has made substantial changes to the text that radically simplifies the implementation of the proposal.
Progress has been positive and has resulted in a substantially improved and less expensive proposal and as such I hope the presidency will be able to achieve a general approach on the dossier.
The presidency will provide a progress report on two other proposals.
The first is the proposal for a regulation of the European Parliament and of the Council establishing the connecting Europe facility. The UK abstained from the partial general approach agreed on this dossier at the June Transport Council. While we were broadly supportive of the text of the regulation we could not formally support agreement to the draft regulations in advance of an agreement on the overall multi-annual financial framework (MFF) negotiations as this could prejudge the overall MFF budget.
The second is the proposal for a regulation of the European Parliament and of the Council on the implementation and exploitation of European satellite navigation systems. The UK supports the thrust of the proposal in introducing a clearer, stable governance arrangement for the programme but has concerns that some of the European Parliament’s proposed amendments, such as the introduction of funding for applications to use the navigation systems, could have significant financial implications.
The Council will adopt conclusions on the communication on “EU’s External Aviation Policy—Addressing Future Challenges”. The UK welcomed this timely communication from the Commission and has been actively engaged in the drafting of Council conclusions. We support the broad aims of the communication—liberalisation of aviation and fair competition—and we are pushing to ensure that the Council’s conclusions reflect this.
The Council will also adopt a proposal for a Council decision on the signature, on behalf of the EU, and provisional application of the Euro-Mediterranean aviation agreement between the EU and its member states, on the one part, and the state of Israel, on the other. The UK supports the signature and implementation of this agreement which forms a part of the EU’s external aviation policy to negotiate comprehensive air services agreements with neighbouring countries. This agreement will supersede the current bilateral agreements between individual member states and Israel. It aims at gradual market opening, promoting regulatory (e.g. safety) harmonisation and the promotion of open and fair competition between air carriers.
This agreement will integrate the Israeli aviation market into the European single market accompanied by convergence with EU aviation regulations. It will enhance opportunities for EU airlines and investors in Israel, provide consumer benefits as a result of increased competition and better access, and help to strengthen the economic links between the EU and Israel.
Under any other business, the Commission will provide information on the cleaner power for transport package and aviation emissions trading scheme (ETS).
Roads Maintenance
(12 years ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
In the autumn statement earlier this month the Chancellor announced an additional £333 million for a dedicated fund to provide for essential maintenance to renew, repair and extend life of the highway network in England.
I am today publishing further details about how this fund will operate. Of the £333 million, I have allocated £215 million of this fund to local highway authorities in England, with £140 million to be allocated in 2013-14 and £75 million in 2014-15. The remainder will be allocated to the Highways Agency for work on the strategic road network.
It will be for individual local highway authorities to target the extra funds where it is most needed, for example on priorities such as road resurfacing, maintenance to bridges or repairing damage to the highway infrastructure caused by severe weather events, such as the recent flooding which had affected many colleagues’ constituencies.
To promote greater transparency I am also writing to local authorities explaining that each one will need to commit to publishing a short statement on its website at the end of each financial year setting out on what and where (in terms of location) this additional funding has been spent, and how it has complemented (rather than displaced) planned highway maintenance expenditure. I am also encouraging local authorities to consider how to minimise the disruption to business and other road users while the works are ongoing.
Independent Living Support
(12 years ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
The independent living fund (ILF) was created in 1988 when direct payments could not be made by local authorities and there was very limited choice and control available for disabled people within the mainstream system. Since its inception the ILF has played a valuable role in demonstrating that disabled people, including those with complex care needs, could and should be able to purchase their own support using direct cash payments. The Government wish to pay tribute to the current and previous boards of trustees as well as the ILF staff for developing a model of support based around choice and control and the principle of independent living.
However, the care system has undergone fundamental reform since the creation of the ILF. Since the mid-1990s disabled people have been able to receive direct payments and can now exercise enhanced choice and control through the mainstream system in all parts of the UK.
In December 2010, following a suspension to new applications, the Government announced that the fund would be permanently closed to new applications. The Government also committed to protecting user funding for the rest of this parliament and consulting on how users would be supported after 2015.
On 12 October 2012 the Government completed this consultation which received around 2,000 responses. The consultation asked for comments on the proposal to close the ILF in 2015 and devolve funding to local government in England and the devolved Administrations in Scotland and Wales. It also asked how this transition could be managed effectively if this proposal was adopted. The Government response to the consultation will be published later today.
It is clear from the responses to the consultation that the prospect of the ILF closing is causing current users anxiety, and that the fund has played a really important role in the lives of users and their families. But we also heard that the ILF has had its problems, that the current arrangement is unsustainable and that local authorities face challenges in supporting disabled people in a consistent and equitable manner given the complex way in which ILF funding interacts with local authority funding for each user.
We have considered all views carefully and, while I understand user concerns, I do not think the current situation is sustainable. Our commitment to maintaining current awards until 2015 remains, but on 31 March 2015 the ILF will close, and from that point local authorities in England, in line with their statutory responsibilities, will have sole responsibility for meeting the eligible care and support needs of current ILF users. The devolved Administrations in Scotland, Wales and Northern Ireland will determine how ILF users in each of those parts of the UK are supported within their distinct care and support systems. Funding will be devolved to each local authority and to the devolved Administrations on the basis of the pattern of expenditure in 2014-15.
To ensure a smooth transition the Government and the ILF will be working with the social care sector in England to produce a code of practice to guide local authorities on how ILF users can be supported through the transition. I expect that the devolved Administrations in Scotland, Wales and Northern Ireland will engage with the ILF to develop processes and guidance reflecting the distinct approaches to care and support in those parts of the UK.
The ILF will also be conducting a transfer review programme over the next two years which will ensure that the details of the care arrangements are captured and shared with their local authority and help those users not currently receiving any local authority funding to engage with the mainstream care system so they can access the services they are eligible for.
The ILF will now begin an intensive and ongoing programme of engagement with users and key stakeholders on how the transition process will work. Users can expect clear and ongoing communication throughout the next two years and through the transition process.
I would be pleased to meet Members from both sides of this House to discuss how ILF users in their area can be successfully transitioned to receiving support solely from the mainstream care and support system administered by local authorities.
Grand Committee
Enterprise and Regulatory Reform Bill
The Deputy Chairman of Committees (Viscount Ullswater)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Viscount Eccles
I would like to detain the Committee briefly on a point of clarification that arose out of last week’s proceedings. Grand Committee Hansard for last week states:
“The creation of the CMA has also been welcomed by business groups and practitioners, including the CBI, the Federation of Small Businesses, the Institute of Directors, the Forum of Private Business and the City of London Law Society”.—[Official Report, 12/12/12; col. GC 335.]
The Committee will remember that we were debating the creation of the CMA under Clause 20. In col. 338, my noble friend Lord Razzall said that,
“all the major business organisations and the Law Society are in favour of this recommendation”.—[Official Report, 12/12/12; col. GC 338.]
That did not tally with my memory of the Government's response to the consultation on this matter.
Paragraph 317 of the consultation, which was admittedly published some time ago, states:
“A number of respondents expressed stronger concerns about the creation of the CMA and did not support it. Notably, the City of London Law Society and the Joint Working Party of the Bars and Law Societies of the UK on Competition Law (‘Joint Working Party’), echoed by many individual law firms in their responses, considered the proposed CMA to involve some real disadvantages that outweigh the potential efficiency benefits”.
So the government document published in March said in terms that neither the City of London Law Society nor the Law Society, which are two completely different organisations, supported the creation of the CMA.
Now I recognise that they may have changed their minds. When three Front Benches agree something it seems to become inevitable and in true British style they decided to make the best of it. But at that time it is quite clear that they did not agree.
I have gone over the ground with the Law Society. I confess that my impression is that it has not changed its mind. It repeats that,
“the merger is not expected to achieve any material cost savings; and, although there is potential for a single CMA to deliver efficiencies of the kind mentioned in the Consultation Paper, the [Joint Working Party] is very doubtful about the scale of such benefits. More importantly, the [Joint Working Party] sees a real risk that the benefits of the merger will in practice be more than outweighed by the loss of the benefits of independent decision-making by separate organisations”.
The Law Society ends by saying:
“The scale of these risks is such that the [Joint Working Party] is not persuaded of the case for a single CMA”.
As the whole burden of my own argument was that we were running into trouble with the legal profession if we created the CMA on a single-institution basis, it was quite important to clarify where these two important organisations now stand.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, as my noble friend said, we did not actually mention the Law Society, but he has responded with a statement from the Law Society. We mentioned the City of London Law Society, which, as he said, is a totally separate body. I quote from a statement made by Mr Robert Bell, the chairman, on 21 June 2012. The CMA,
“will help competition policy be more cohesive, and it will help streamline the regulatory process, which, in turn, will provide efficiencies and boost business confidence in the rigour of the competition system in this country”.
He also said:
“There are benefits to be gained. On the merger of the CC and the OFT, we do not really have a very strong position, but we are pleased to see in the Bill that the checks and balances between first-stage and second-stage merger investigations and market investigations have been retained. There is potential to streamline the regulatory process and make it faster”.
I am very content with that statement. It is unequivocal, and it is just one example, which was used by my noble friend on a previous day in Committee, of a number of institutions that supported it. I hope that that clarifies the position.
The Deputy Chairman
My Lords, there is no question before the Committee so we cannot have a debate. I call Amendment 24C.
Schedule 5 : Amendments related to Part 3
Amendment 24C
Lord Marland
(b) for “Commission” substitute “CMA”.
Lord Marland
Thank you, Deputy Chairman. This is a government amendment. First, I would like to put on record my thanks to the officials. Not only have we had a confetti of amendments to deal with on this Bill but, late last night, they were all changed into different groupings. That has meant a huge amount of work for them but they have done it with good cheer. It has been difficult not only for them but for the rest of us. However, we shall press on as hard as we can. We have only 23 amendments to get through today so let us hope that we can do it. I am sure that people want to go home tonight for Christmas.
These government amendments are minor amendments. They are quite technical, which rules me out of the equation pretty early on, but they are consistent with what is intended. I hope that they will find favour with the Opposition and other Peers. I beg to move.
Lord Stevenson of Balmacara
My Lords, we have very few comments to make on the substantive point in the amendments before us. We accept the drafting; it is very appropriate. On Amendment 25A, which is included in the group but was not specifically spoken to by the noble Lord, I simply note that this matter will come up later on in discussions. Although I have no comments to make at this stage, that does not mean that we will not wish to raise one or two points later. I agree that the rest of the amendments are technical.
I apologise for the slightly odd grouping of Amendment 26AD. It is not in my name but I shall speak to it—which will confuse matters even further.
Lord Marland
Is the noble Baroness, Lady Hayter, already on her Christmas holiday?
Lord Stevenson of Balmacara
She certainly is not. She is working hard on other matters elsewhere, to which I will need to repair. That is why I asked if we could group the amendments rather oddly, although I think they work in the scheme of things. I shall speak to them briefly at this point.
The point of concurrency, which is raised in these substantive amendments, raises an issue in relation to the way that the new architecture which has been proposed will operate. Clearly we take a view, which I think is common around your Lordships’ House, that functioning competition and certainty are the two single most important conditions that markets require to sustain investment and drive innovation. Those conditions are best aided by clear, robust and agile competition regimes. That condition is most required in fast-moving sectors, such as telecommunications, where the market is in a state of constant, relentless evolution.
The recent experience of competition oversight of one section of the telecommunications market—the pay TV market—highlights two critical failings that the Bill must address: the slow-moving pace of investigations and the confusion that might be caused by differing outcomes between sectoral and competition authorities. Although it is right that the CMA should be the ultimate protector of the basic principles of competition law, surely it cannot do so effectively in isolation from market developments and, in particular, from advice that may be available within the sectoral regulators.
In my remarks I want to refer to recent investigations of the pay TV market in considering questions of pace and lack of collaboration. I recognise that some of my remarks will delve deep into regulatory matters and it may be appropriate for the Minister, even although he has taken an extended Christmas break, to respond to me in writing if he wishes to go into some of the points that I am going to make.
On slow pace, UK consumers have enjoyed more than a decade and a half of investigation into competition in the content/pay TV market by Ofcom, the Competition Commission, the Office of Fair Trading and the European Commission. Inevitably, much effort has been duplicated. Nevertheless issues in the market have been identified and yet no lasting remedies have been proposed to tackle a consumer harm that the Competition Commission had initially estimated cost consumers £50 million to £60 million per year in inflated prices for premium content.
Inconsistency, or lack of collaboration, is the other point I want to make. In August 2012, just a week apart, both the Competition Commission and the Competition Appeal Tribunal reached completely inconsistent and contradictory conclusions on two aspects of the state of the pay TV market. On 2 August 2012, the Competition Commission concluded that Sky has market power and that competition in the pay TV retail market is “ineffective”. On 8 August 2012, the Competition Appeals Tribunal issued a completely different view to both the Competition Commission and previous Ofcom statements, concluding that there were no substantive competitive concerns regarding Sky’s supply of premium sports channels.
Surely what we need is for the different layers of a regulatory regime to work together in the best interests of the consumer. This amendment seeks to ensure that the CMA acts in co-operation with sectoral regulators when exercising its competition powers to share information; undertake joint working, investigation and, if needed, remedies; and to keep the performance of each sectoral regulator against its competition powers under periodic review.
The CMA should provide the central core of expertise in these cases. It should have primary responsibility for conducting the full competition investigation and ultimately should take the decision on all aspects in competition cases. A reformed and strengthened competition authority acting within the parameters of competition law is best placed to objectively apply competition principles consistently across all sectors.
However, it cannot effectively judge the competitive conditions of a given market in isolation from the sectoral experts. So we believe that the sectoral regulator is best placed to make the initial assessment as to whether competition concerns may potentially arise in a given scenario. In recent history—certainly where the pay TV market is concerned—that stage of the process has taken far too long.
In addition, there should be a renewed emphasis placed on sectoral regulators to reach a speedy judgment on whether referral to the CMA for full market investigation is indeed warranted. But the role of any sectoral regulator should not stop at speedy referral. Rather, it is vital that it also provides a supportive and advisory role to the CMA, imparting knowledge and experience in the sector which the CMA would take into account as appropriate, and where appropriate taking a central role in considering any remedies that might be required.
Lord Marland
I apologise; I should have dealt with this amendment in the same grouping. Clause 45, as was rightly said, will bolster concurrency by giving the CMA stronger powers to co-ordinate Competition Act enforcement work and giving regulators explicit duties to consider using the Competition Act. Amendment 26AD is intended to add to these arrangements to make sector regulators make an early decision on whether to refer a matter to the CMA for an in-depth investigation. It would also allow the regulators to take exclusive responsibility themselves for remedying a problem in a market.
I do not believe that this amendment is necessary. First, it is the Government’s intention that new timeframes for market processes will apply to sector regulators. This will be effected by subordinate legislation later in the year under this Bill. Therefore we recognise the need for a timeframe—but we will get to that, as I said, with subordinate legislation.
Secondly, there are existing provisions in the relevant sector legislation which prevent duplicate market investigations by the relevant regulators and the CMA. Furthermore, the CMA in looking at a market should be able to consider whether action by a regulator is impeding competition. Amendment 26AD therefore is not appropriate and I would ask the noble Lord to withdraw it.
Lord Marland
“( ) In subsection (1), in the words before paragraph (a), for “Commission” substitute “CMA”.
Lord Whitty
“Powers to reverse transfers
(1) Where regulations are made under section 22(4A) to transfer consumer functions, duties and responsibilities to other statutory bodies or to non-statutory bodies, those regulations shall also stipulate powers to require the return of those functions either to the CMA or to the Secretary of State, subject to subsections (2) and (3).
(2) Those regulations shall also require the Secretary of State to carry out at least every five years a review of any transfer to other bodies under section 22(4A) as to whether those functions, duties and responsibilities have been carried out effectively by the transferee body; and that the transferee body and other relevant parties will be consulted over such a review.
(3) A negative finding from such a review under subsection (2) will be necessary before the Secretary of State uses the powers to reverse a transfer under subsection (1).”
Lord Whitty
My Lords, we return to the issue that I raised in the Minister’s absence during our last session, on what exactly is happening to the functions and duties of the OFT which are not being subsumed within the CMA. I apologise to the noble Viscount, Lord Younger, that I had not seen his letter of 12 December when we debated it last time. Included with that letter was a draft order under the Public Bodies Act; reading that and its Explanatory Notes, I have to put Ministers on notice that when that comes before the House I shall object to a large range of its areas. It includes not only the abolition of various bits of consumer regulation and protection but the movement of functions from the OFT, and therefore the CMA, to the trading standards operation on the one hand and to Citizens Advice on the other.
That movement, which we debated briefly last time, includes the move of responsibilities to organisations that are not mentioned in statute, although some of them are mentioned in the draft order. This relates to the slightly shadowy national trading standards body and another body, which I think is called SIPEP. I forget what that stands for exactly, but it is another body that will absorb what were previously statutory duties of the OFT. We have debated that move but this amendment would provide for the ability of a future Secretary of State to reverse that devolution at any point.
While I have great admiration for Citizens Advice and for the trading standards organisation—indeed, I am a vice-president thereof—there is some doubt as to whether they will be able to cope. For example, will trading standards cope with a whole range of scam-busting or code-forming operations which were previously done or overseen by the OFT? Concerning Citizens Advice, while there are some functions of Consumer Focus and some of the OFT with which it will be able to cope in its present structure, on others there is some doubt whether Citizens Advice will have sufficient resources and expertise to conduct them. However, I strongly support the transfer of Consumer Direct from the OFT to Citizens Advice.
I wish Citizens Advice well with its new responsibilities but there has to be a reserve power somewhere here to reverse that decision. As far as I can see in this Bill, and as far as I read the order, there is no power to reverse those decisions. My amendment would provide for that power. It is one that I hope would not need to be used, because we will have to settle down with the consequences of earlier decisions. However, if it is needed it ought to be in the Bill and I therefore beg to move this amendment.
Lord Marland
My Lords, I recognise the amendment and I have just handed the noble Lord, Lord Whitty, a letter that was written to him. I am sorry that he has not been able to see it or that it did not arrive on time, but I hope that it deals with a number of issues raised earlier in the debate which run concurrently. As he will see, that is a copy; there is one out there for him.
A number of these elements have already been debated; they have had a good airing. In addition, to remind and inform, the Government understand that the consumer regime landscape needs reviewing. We have committed to do that in 2018, so we have a long-stop position if the system is not operating. We believe that reversing the generic powers of the Secretary of State would be wrong, because it would create fundamental uncertainty for consumers. It is important in all this that the consumer understands the direction of travel and where it is coming from. As I said, we will be reviewing the landscape in 2018, which gives us a long-stop position if we all agree that the system is not working, but we believe that it will. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Whitty
My Lords, I certainly hope that when everything settles down, it will all work, but it is interesting that on other matters which the Government are changing, they are providing accounts reviews, reversals, sunset clauses, or whatever. It seems odd that they do not do so in this case. I hope that the Government will keep that under review. It may eventually need to be covered in the order or some parallel order if it is not in the primary legislation but, for today, I beg leave to withdraw the amendment.
Lord Whitty
“Completed mergers
(1) Section 22 of the Enterprise Act 2002 (“the 2002 Act”), (duty to make references in relation to completed mergers) is amended as follows.
(2) After subsection (1) insert—
“(1A) When considering whether or not a situation results in a substantial lessening of competition for the purposes of subsection (1) above, the CMA shall take into account—
(a) the long term ability of the merged entity to compete effectively; and(b) the likely long term effect on consumers.””
Lord Whitty
My Lords, I shall speak also to Amendment 24M. Amendment 24L deals with what issues the CMA will have to take into account when dealing with completed mergers. The principle should also apply to prospective mergers. When asking whether competition is lessened, as the clauses refer to, we need to consider why we want competition to be maintained or increased. Competition is not, in my view, an end in itself; it is about the efficiency of the newly created entity, its ability to compete—globally, in some instances—and whether it is in the long-term interests of consumers. In the vast majority of cases, the long-term interests of consumers are served by more competition rather than less. Therefore, lessening competition can be, and usually is, a detriment to consumers, but there are instances where that is not the case. Not all competition results in benefits to consumers.
Mergers can often reduce competition but sometimes manage to increase customer service and improve the way in which customers regard the supplier of the product or service. Unravelling mergers, particularly completed mergers, could, on occasion, result in less customer service. Hence, as well as a straightforward metric on what share of the market is covered by an already completed merger, we need to assess what the future of the new entity will be in terms of its long-term global competitiveness, which may not be relevant in all markets, but will be relevant in quite a few, and, in all markets, what is the effect on long-term consumer benefit of detriment. That needs to be written into the Bill. It should not be just a question of the metric of market share.
Amendment 24M also deals with consumer interests. Clause 23 deals with the investigative powers of the CMA. It includes provisions which are three and a half pages long but do not mention consumers once. Clause 23(2) deals with permitted purposes—that is, on what grounds investigations can take place. The amendment simply suggests that one of those permitted purposes ought to be in order to investigate situations when the CMA gets complaints or references from consumer organisations, specifically from those organisations which are designated as having super-complaint powers—that is, they can bring a worked-up super-complaint under present legislation to the OFT or the Competition Commission.
Designated bodies include Which?. They also include Citizens Advice and for the time being Consumer Focus. We will argue separately for a role for small businesses. A super-complaint has to be investigated. To get to that stage the consumer organisations must have a fully worked-out case. There are a number of cases that the OFT has looked into. I have a list here, which includes the supply of beer in UK pubs. Apparently CAMRA is a designated consumer organisation, which I had forgotten and am gratified to hear. We brought in a case when I was chair of the National Consumer Council and Consumer Focus on home credit. Citizens Advice first raised payment protection insurance, which is now a huge consumer issue, with its knock-on effect on other areas of consumer detriment yet to be completely resolved. There are a large number of super-complaints that have been considered over the last five years or so.
Consumer organisations also receive information about things that do not really amount to a super-complaint, or that would take too long, or that are too complex to turn into a super-complaint. At the moment the Bill covers neither the situation with super-complaints leading to an investigation nor complaints raised by designated consumer organisations that are short of a super-complaint. Amendment 24M deals with that situation. It deals with it under the mergers section and should also logically apply to the markets situation. These two amendments would embed more reference to consumers and the way in which consumers and consumer organisations can get into this competition system. I beg to move.
Lord Borrie
I support my noble friend Lord Whitty. He and the Minister, no doubt, will recall that when the Bill was going through the other place the then Minister, Mr Norman Lamb—I think that he now has a different post—got into a lot of discussion, because many people were concerned that the only interest of the consumer that was being expressed or mentioned was the consumer’s short-term interest. You can find references in Hansard, when this was being discussed in the other place, where the Minister emphasised more than once that we must be especially interested in the long-term interests of the consumer. These amendments are concerned with that.
Clearly you can have a merger which, in the short-term interest of the consumer, would seem to be a bad thing. A merger can lead to less competition when a company, rather than battling with other companies in the same field, is no longer inhibited by the competition from the company with which it is merging. We and the relevant regulatory bodies, especially the CMA, need to be concerned with the long-term interest. That is what matters in the long run. What immediately occurs this year or next year may be very unimportant compared with what it leads to. We want to know what are the long-term interest and benefit, or the disbenefit, to the consumer. That is what will count in the long run.
Lord Marland
My Lords, I am much taken with the words of the noble Lord, Lord Whitty, which were underlined by the noble Lord, Lord Borrie. The three categories that the noble Lord, Lord Whitty, mentions—efficiency, global leadership and the long-term interest of consumers, which was amplified by the noble Lord, Lord Borrie—are fundamental to everything that we are trying to do. I am glad that they have been so accurately and succinctly encapsulated by the noble Lords opposite.
We have to remember that the CMA is an expert in competition and in these issues. We must also remember, although I am the wrong person to preach this, that competition law is based on the principle of improving consumer welfare. I firmly believe that the CMA—through its, some would say, very narrow area of activity, which is focusing on competition—will put at the front of its list improving consumer welfare, efficiency and things like that. There will be two phases, as we know. First it will go to the OFT and then to the CMA, so it will have been looked at twice. We will debate later, if we may, the super-complaints system and how that operates—an issue to which the noble Lord, Lord Whitty, made reference.
I turn to Amendment 24M. The CMA will be able to use its powers of assessment for any merger, and that is exactly what it should be doing; it will look at it from top to bottom. It is provided with these information-gathering powers, which will apply end to end for the whole process of a merger. Again, we have that base covered. I reiterate that I am glad that the noble Lord and I are singing from the same hymn sheet in our belief that efficiency, global leadership and the value of the long-term interests of the consumer are fundamental. I invite the noble Lord to withdraw his amendment.
Lord Whitty
My Lords, I did not understand the beginning of the Minister’s helpful reply because it seemed to refer to the OFT and then the CMA. I shall come to the issue of the complexity of the internal two-stage process at a later amendment—
Lord Marland
Sorry, I should clarify that the CMA has both phases. Currently it has the OFT and the CMA as we phase in that policy.
Lord Whitty
I am grateful to the Minister for that, as well as for saying that he completely recognises the need for the long-term consumer interest to be understood in these investigations. If he could delete “understood” and say “written in”, I would be at one with him, but we shall see what happens at later stages. For the moment, I beg leave to withdraw the amendment.
Lord Whitty
“Mergers in the regulated financial services sectors
In respect of mergers or proposed mergers in the regulated financial services sectors, the criteria for thresholds shall be more than 25% of a defined market of any financial service sector or more than 15% of two or more markets where the merger or proposed merger cover more than one financial market.”
Lord Whitty
My Lords, the body politic has suffered over the past few years from two major crises—a dreadful economic crisis as a result of problems in the financial sector and a major political crisis, which is about to be debated down the hall, on the media side. The amendment suggests that there have to be special considerations in the operation of the new CMA in relation to both these areas. This is a probing amendment to see whether the Government agree that one needs to look at those two sectors in a rather different way—particularly, in this regard, the financial sector.
This issue is complicated by the fact that the Financial Services Bill does not yet have Her Majesty’s signature on it, as well as by the fact that the FCA, as it will be, will not have exactly the same kind of concurrent powers as some of the other sector regulators. There will be some powers in the Bank of England and in the proposed PRA, as well as in the FCA. Well, good luck with all that; the Government seem to be replacing a much reviled tripartite system of regulation of the financial sector with a quintipartite one, and we will see how that works out. One of the factors in that, though, must be the CMA.
The complexity in the financial sector, with ever-increasing interrelations between the different parts of that sector both locally and nationally—plus we are waiting for a banking Bill shortly, and other provisions are coming out of the banking commission—means that there is turmoil in what we believe ought to be the structure of the financial sector. Do we believe in Glass-Steagall or in, as the EU Commission requires lawyers to do, selling off some outlets in order to provide more choice? How does this fit with a general duty on the CMA to look at the structure of, among other things, the financial system? Following the financial crisis—admittedly things could have changed a little since then—we had about 40% of retail banking and about 30% of the mortgage provisions in one place. That seems to be a market situation that deserves investigation. Indeed, I recall telling the previous Government that at the time. However, it is something that has not been completely and definitively tackled and it will fall in part, at least, in the CMA’s lap.
I do not expect the Government to accept the wording of this amendment, but it indicates that we will need to have some threshold provisions that probably need to be different. It may be in the area of the structure of the financial markets. We need to know which markets, how we define them and who does it—the CMA, the FCA or both?
Although I do not expect the Minister to accept the amendment, I do expect the Government to recognise that whatever happens, the CMA will have to give particular priority to the financial sector and will almost certainly need to have different criteria in relation to that sector than elsewhere, if only for global and political reasons. I beg to move.
Lord Marland
I am sorry that telling the previous Government fell on deaf ears. I fear that it might do the same as regards this Government, as the noble Lord has already recognised. We all recognise what the noble Lord is saying. Incredible hardship has been caused to our great country and we must make sure that it does not happen again. I believe that the OFT and CMA will inherit these powers. There is a governor in place with two criteria. One is that if the target’s turnover is greater than £70 million, the merger can be investigated and/or if the combined share of supply or acquisition of particular goods and services of the companies is 25% or more, that is known as the share supply threshold, which can also be investigated.
There are some pretty low thresholds in place which would capture the excellent examples given by the noble Lord, particularly in the mortgage market. These have to be applied rigorously. I hope that, as we debate the Bill, more will come out on the important issues that he raises. On that basis, I hope that he will withdraw his amendment.
Lord Whitty
I thank the Minister for that. We may well return to the issue, but for now I beg leave to withdraw the amendment.
Lord Whitty
“( ) The provisions of section 23 relating to mergers and prospective mergers in the media and financial services sectors shall also apply to the provisions in this section on interim measures.”
Lord Whitty
My Lords, we now move on to the other contentious sector: the media, and in particular the media sector dealing with news provision.
Amendment 24P simply argues that any special provision in the financial and media sectors needs to be reflected in the interim provisions as well as the basic provisions. In one sense, I will say no more about that because there will be a consequential amendment if the Minister agrees. The key amendment in this group is Amendment 25EA. When it comes to the media, particularly the news media, much wider issues are relevant with regard to market structure than those of size, market share, abuse of market power or unfair trading.
It will not have escaped the Committee’s attention that over the past few months there has been considerable attention on this area, with a fair amount of debate on the role of newspapers and media ownership over our national life and a huge range of aspects of public interest. As I said before, a rather oversubscribed debate will take place in the Chamber shortly. We will no doubt return to this issue. But most of that debate is not concerned about the issues relevant to this Committee and Bill. It is concerned with issues of press’s behaviour, privacy, the freedom of the press, possible regulation as against state control and so forth. That has nothing to do with what I am talking about here.
The issue that lies behind these debates—I will not be pontificating on it today as I cannot speak in the Chamber at the same time as I am speaking here, although I see that my noble friend Lord Stevenson is able to do so, if he is able to speak at all—and the reason why the press has been in its own headlines for so long, relates to the structure of the market and the structure of ownership. I am gingerly stepping into that debate today; I fear that we will almost certainly return to it.
A truly free press requires diversity of opinion, and that requires plurality of ownership. I am not one of those who thinks that the Murdoch empire is uniquely evil or that its journalists are uniquely scurrilous or unscrupulous, although one or two of them seem to be pitching for that title. The issue is that it is uniquely powerful and dominant in market terms. That is an issue for the Bill, where the issue of state regulation is not the same as is being debated in the Chamber, because there has always been regulation in the Competition Acts, the Enterprise Acts and the Communications Acts of the structure of the media sector, as of others.
Lord Justice Leveson looked at that and made eight recommendations right at the back of his report which have received very little attention but are relevant to the Bill. Towards the end of the Statement on Leveson, I asked the noble Lord, Lord McNally, whether the Government will take advantage of the Bill, going through the House as it is, to add to it provisions implementing those relatively uncontroversial recommendations of Leveson. As I said, that is nothing to do with state control or a free press but concerns plurality and competition.
In his response, the noble Lord did not say no. He said that it was above his pay grade. The noble Lord, Lord Strathclyde, was sitting next to him, so apparently it was above his pay grade as well. I suspect, with regret, that it is beyond the pay grade of the noble Lord, Lord Marland. It cannot be beyond everybody’s pay grade. Those eight paragraphs at the back of the summary of Leveson are bang in this area. They focus on plurality, how you measure it, the need to cover related sectors such as the internet as well as the press, the need, as we discussed in relation to the financial sector, for a different threshold of intervention, the role of Ofcom, periodic reviews, public interest, and so on, and the role of the Secretary of State.
Those are areas of interest to which the competition authorities will eventually have to pay attention. Unless the Government consider that the structure of the news media requires entirely separate legislation on the market structure front, which I think would be a dangerous road for them to go down, it is relatively easy for them to consider it in the context of the Bill. I would rather advise them to do so.
My Amendment 25EA concerns the least controversial, I think, of the Leveson recommendations. We could have come up with a whole lot of amendments attempting to implement them all, but I think that that is the Government’s responsibility. The ball lies in the Government’s court on this. They have said that they accept all but the contentious dimensions of Leveson. They have not objected to these provisions. My amendment simply states that, before any intervention by the Secretary of State, there has to be consultation on media issues. That is uncontentious in itself but, put into the wider context, it provides a base for some intervention in this area.
Whoever it is—at whatever pay grade—who decides these things, there needs to be an early decision on whether we are going to use the Bill to implement the plurality recommendations. I think it would be easier for the Government to do it in the Bill and I rather advise them to do so. I am sure that the Minister cannot tell us today the answer to that, but if not today, then by Report—which will be towards the end of January, at the earliest—we should know which way we are going. That will mean providing either significant amendments to this part of the Bill or a clear indication of an alternative approach. The delay, buck-passing, and so on, cannot go on that long. I do not expect much from the Minister today, he will be gratified to hear, but I do expect the Government to come back on this one and I am putting the ball clearly in their court. I beg to move.
Lord Marland
I thought that that was a brilliant speech by the noble Lord, Lord Whitty—
Lord Borrie
My noble friend Lord Whitty has made a most useful point. There is no doubt at all that this Bill, and this part of the Bill, is a convenient vehicle. Governments often look for convenient vehicles to do things that they have already decided to deal with. In this case that may not be so, but I suggest that if it seems convenient to the noble Lord, Lord Whitty, I have no doubt that it will seem convenient to some members of the Government.
I think that what we on this side of the Committee this afternoon are saying is that we are not worried about particular words in an amendment, and we are not expecting the Minister to accept these particular amendments. However, we are expecting the Minister to take this back to his people with higher pay rates than he has, and indeed to the Ministry of Justice and all the other departments that are probably interested in this subject, because plurality of the media is vitally important. It is a public interest concept beyond competition. It is subsidiary to competition, in a sense. We want competition because we want plurality. We want plurality because we want diversity of opinions throughout the industry. The Bill is a convenient opportunity to deal with an aspect of Leveson which, I am sure, is not the most controversial at all—but it happens to be with us, and it happens to be on the Government’s agenda. There also happens to be a Report stage and a Third Reading at which he can take this further.
Lord Brooke of Sutton Mandeville
My Lords, knowing the nature of this Government and the fact that not everyone in it is paid, I wonder whether before my noble friend the Minister gets up, he could tell us whether he has a pay grade at all. If he does not then, quite clearly, he has an all-inclusive alibi against anything which is said to him from the opposite side.
Lord Marland
As I was about to say before I so rudely interrupted the speech of the noble Lord, Lord Borrie, for which I apologise, I thought that the noble Lord, Lord Whitty, made a brilliant speech. If he wants to go into the Chamber I will do a deal with him: he can dump the rest of his amendments and he is very welcome to go.
The Deputy Chairman of Committees
My Lords, there is a Division in the Chamber. The Committee will be adjourned for 10 minutes.
Lord Marland
I will rewind the clock, my Lords. This has been a brilliant debate and I do urge the noble Lord, Lord Whitty, to consider my offer of going next door and withdrawing the amendments. The offer is still open. The noble Lord, Lord Brooke, mentioned pay grades. I know exactly whose pay grade this is in. Certainly it is not in mine, because I am in the unpaid grade—voluntarily, I hasten to add, although most people would think that it was by necessity rather than by volunteering. This is in the pay grade of the Prime Minister. He will look at all this. There is a lot of aerial warfare going on at the moment—discussion which appropriately should be fully aired and debated. We have, obviously, notified DCMS of the noble Lord’s considerations of this recommendation, and it is considering them. It will consider them in the round in view of the overall Leveson position, and then that will rise like cream to the top to the Prime Minister for him to decide. As the noble Lord rightly says, we will doubtless revisit this. Indeed, more importantly, we should revisit it. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Whitty
My Lords, I am grateful to the noble Lord for his remarks. When the cream eventually reaches the Prime Minister I hope at least a footnote on this debate is enclosed.
This is a bigger and in some senses, a wider issue, but it is also an issue that is very relevant to this Bill. It is one that we need to get a decision on relatively early. There has been some move to all-party discussions on the other side of Leveson. If there is legislation to be proposed, in whatever form, it will have to include this. I would hope that we can come through this very difficult crisis with the news media with a cross-party agreement on how we should proceed. I hope that what little we can do here will help that. In the mean time, I beg leave to withdraw the amendment.
Viscount Eccles
Viscount Eccles
My Lords, I want to probe the Government’s attitude towards penalties in this part of the Bill. My amendment would take out an order-making power which is there by virtue of an amendment to Section 94 of the 2002 Act. There is already, of course, a power to settle turnover and to levy damages. That power comes from Section 28(2) of the 2002 Act. Indeed a statutory instrument was laid in 2003—the Enterprise Act 2002 (Merger Fees and Determination of Turnover) Order 2003.
Why do we need a new power and why do we need the new power to run in parallel with the old power? The Government state in their submission to the Delegated Powers and Regulatory Reform Committee:
“This new penalty will run in parallel with the existing civil enforcement mechanism for failure to comply with interim measures under section 94 such that a person could potentially be liable to damages under Section 94 and a financial penalty under clause 25.”
Some explanation is needed of the Government’s approach to penalties in this part of the Bill. In following a policy of simplifying and deregulating things, and creating more certainty for business, it could be argued that this overlap between two penalty regimes is going in the opposite direction. In thinking about that, I would be interested to know from my noble friend, what has been the experience under Section 28(2) and the statutory instrument which flowed from it. Are we absolutely sure that we need both? I beg to move.
Lord Marland
My Lords, I am grateful to my noble friend for raising this complex issue. In terms of the methodology, I undertake to look at it in some detail. This will come along in secondary legislation, once we have had a chance to look at it, because it is not a straightforward matter. We are applying rules in terms of financial turnover and in terms of percentage of the market. We then need to know how to enforce the penalties. Clause 25 provides the CMA with the power to impose a fine of up to 5% of the worldwide turnover. That is the effect of the clause that we have created. It is complex and my noble friend has drawn our attention to it. We will look at it in secondary legislation rather than having something in the Bill. I hope that that will encourage my noble friend to withdraw his amendment.
Viscount Eccles
I am grateful to my noble friend for that reply. It probably needs to be looked at because it seems to me that here we have some sort of tightening of the screw. If you believe in tightening the screws—frankly, I do not—and you believe in civil sanctions and administrative fining, which I find a difficult subject, one has to justify why one is hardening up the regime. I do not have up-to-date information so I do not know whether any damages have been levied under the existing statutory instrument. If there have not been any, which seems quite likely, it is even more important that this hardening of the position be justified. I beg leave to withdraw the amendment.
Lord Whitty
“(3) Subject to the time limits set out in Schedule 8, the Board of the CMA shall make procedural arrangement for the operation of investigations and references conducted by the CMA.”
Lord Whitty
My Lords, these amendments have been tabled simply to raise the issue. The Government may well have a different solution. They all relate to the incredibly detailed provisions in Schedule 8 for the procedures and time limits of how the CMA should carry out its business. We have nine pages of procedures set down in the schedule. I think it is a lawyer’s paradise and a regulator’s nightmare. These amendments suggest different ways in which we can simplify them, while at the same time remaining bomb-proofed to judicial review and so on.
Some of the problem stems simply from the amalgamation of the two bodies and having to preserve two stages of the investigation. Consequently, there will have to be ring-fences, Chinese walls and, for all I know, barbed wire and high hedges, but it does not need to be as complicated as this. Is setting it out in statute, in a complex and incomprehensible schedule, the best way to deal with it? My noble friend Lady Hayter mentioned the other day that it might be better to leave the board of the CMA to sort out in detail what the procedures should be, like most regulators and most organisations. The role of the board could be separated from the role of the investigators, as other regulators, such as the pensions’ regulator, do.
These amendments are tabled to give us a brief debate on the issue. They offer a number of alternatives. Amendment 24Q would make it clear that the board can set its own procedures, subject to the time limits. Amendments 25ZA, 25ZB and 25ZC would delete those paragraphs of Schedule 8 that relate to procedures and just leave the time limits. The Question that Schedule 8 stand part could delete the whole of that schedule and leave everything to the board. There are probably other options.
The Minister’s amendment was a tiny snip. We need wholesale pruning of this schedule, but it does not appear to be on offer. I seriously suggest that, if we leave it like this, the CMA will get caught up in procedural challenges and threats of judicial review. Every corporate lawyer in the land will be looking at this and ensuring that they follow every dot and comma of it. I think that the Government would be wiser to prune it and leave much more to the CMA board to sort out for itself. I beg to move.
Viscount Eccles
My Lords, I am very grateful to the noble Lord, Lord Whitty, because his contribution means I do not really have to say much about Clause 26 stand part. The real effect of knocking out Clause 26 would be to knock out Schedule 8, so perhaps we can elide the two.
This is a very tricky area and I am sure that it should be thought about again. There is already a time-limit regime—lots of it from 1998 and 2002—and there is a clear general duty of expedition, which is referred to in Clause 26:
“duty of expedition in relation to references”.
It is clear in the current legislation that everyone is supposed to do things in as timely manner as possible. The question then arises of why the Secretary of State thinks that his or her intervention is helpful in this matter, which was very much the line along which the noble Lord, Lord Whitty, was going. I cannot see that it is helpful, nor that it is consistent with the coalition’s policy towards these matters. I thought that we believed in decentralisation, deregulation and trusting the professionals. It seems quite strange to introduce this regime, and of course it has to be hedged about with all sorts of escape clauses. If something gets as far as Brussels, all time limits are off the table; it says so in the schedule. The 40 days can be extended by 20 days, you can stop the clock in certain circumstances and—again I agree with the noble Lord, Lord Whitty—the lawyers will have great fun, as they always do, with this kind of overcomplicated and apparently statutorily enforceable system because they find ways around it. I am very much in support of the noble Lord’s amendment—if it is not to be accepted as it is, I very much support the way in which he put it across.
Lord Marland
We have had two excellent points of view, but the reality is as follows. Britain is seventh worst out of eight regimes in the world in terms of speed, in a review carried out by KPMG. That is a terrible place to be. We are seeking here to give some real clout to the process. Yes, the OFT exists on a 40-day rule but it is not statutory, and as a result 15 out of 76 cases have exceeded that time limit. We want to enforce that limit because it is absolutely no good being seventh out of eight in the world. We are enforcing the 40 days and we have put a period of undertaking in lieu of 50 days, as opposed to nil, and a period of implementation of 12 weeks, as opposed to nil. That is a very big step forward.
Often you are damned if you do and damned if you don’t, but one thing is for certain: we have to get our speed and efficiency up in getting these deals sorted, because that sends a clear message to industries that are merging. As we know, businesses want one thing, and that is clear messages. I therefore feel that this is the right approach for this Government. I do not totally disagree with the noble Lord, Lord Whitty, as on many occasions—I have rarely disagreed with him—we could perhaps have taken a more aggressive stance. This is a very good start, though; we will of course keep these things under review, but this is progress. On that basis, I hope that the noble Lord will withdraw his amendment and, when we come to it, that my noble friend Lord Eccles will do the same.
Lord Whitty
My Lords, I thank the noble Viscount for his support on this issue; I shall definitely support him on the next one. He is probably silent because there is not a lot more to be said. But yes, speed is of the essence and expedition ought to be a clear and central responsibility of the board of the CMA. Frankly, having all this to check and double check is the enemy of expedition, not its friend. Although I totally agree with the Government’s objective here, I do not think this will achieve it. Perhaps they will look at it again at some point. I beg leave to withdraw.
Viscount Eccles
Very briefly, my Lords, my noble friend’s answer is an abdication of management. If you believe that public bodies should be of a certain strength and have a certain independence but then you say, “Of course, they cannot be trusted to do the job unless we can visit them and beat them over the head every now and again”, if we keep on going down that road, we will not only be turning more and more people out there in the country off the political system but completely missing the right target, which is not the legislation but the behaviour under it. That is what Ministers need to concentrate on. I am very disappointed that my noble friend cannot say whether, since May 2010, there has been any improvement in the performance of managing the way that time is spent in the OFT. If that is so, it is a kind of double abdication.
Lord Hunt of Wirral
“Small mergersSmall mergers
(1) Section 23 of the 2002 Act (relevant merger situations) is amended as follows.
(2) After subsection (9) insert—
“(10) A relevant merger situation shall not be created where the value of the turnover in the United Kingdom of the enterprise being taken over does not exceed £5 million.””
Lord Hunt of Wirral
My Lords, in proposing this new clause I am concerned about the impact of the current merger regime on small companies. I hope that every effort will be made by my noble friend to lighten the burden. Small companies wishing to grow through merger face a disproportionate cost in the professional fees that have to be incurred in dealing with an OFT investigation. I am seeking to highlight small mergers and to insert, after Clause 26, a new clause which would exempt such small mergers.
At the moment, the Bill misses a great opportunity to exempt or deregulate small mergers. I would have thought that there could be a simple measure based on turnover, which would allow small companies to merge and restructure without the threat of costly intervention by the proposed Competition and Markets Authority. Small companies just do not have the financial and management resources to justify responding to an in-depth CMA review, which I am told would cost between £50,000 and £100,000 or even more. The risk alone of an in-depth review, with the smaller risk of a phase 2 review, can lead to small and defensible mergers being abandoned at quite an early stage. I want the Committee to understand that I believe there is a point where the costs of reviewing a potentially anti-competitive merger exceed any likely damage to consumer interests.
On its own reports, the OFT has reviewed mergers where the turnover of the acquired company was about £100,000. I have also been made aware of a merger of two small companies where the target had a turnover of £500,000; with the OFT narrowly defining the share of supply, there were legal fees of over £100,000 in dealing with the OFT investigation. With the associated cost of professional fees and management time easily reaching a similar figure it must be clear that merger activity would be reduced and growth opportunities for small firms would be diminished unless this approach changes, and I hope that it will.
In this new Clause, I suggested that a turnover figure of £5 million for the acquisition could be applied. That is a proportionate and reasonable figure. This received strong endorsement from the consultation, when one analyses the responses. It is interesting that in Italy, Prime Minister Monti, who is still the Prime Minister and was formerly the EU Commissioner for Competition, has recently announced a liberalising measure that introduces a new turnover exemption of €47 million for the company being acquired. I do not want to say that we should follow that example, but I believe that it is possible to introduce a safeguard to limit the use of this exception over a certain time period to address the concerns of a large company increasing its market position. I leave it to my noble friend to decide what this safeguard should be. This amendment would allow more freedom for small companies to merge and grow without unnecessary regulatory cost. I beg to move.
Lord Berkeley
My Lords, I have a few worries about this amendment. It sounds fine for the companies. They will merge, grow and make more money. That is wonderful. What if you are a consumer at the other end of these events? I see something of this in the West Country where I live. There are a number of quite small companies there and occasionally they play around at trying to take each other over or merge, and you end up with monopoly situations. I do not know what the solution is.
A monopoly with a turnover of under £5 million is just as dangerous to the consumer as a monopoly with one of £100 million. Competition is key. I do not know whether there is a simple way for the new authority to look at this and possibly not get involved but suggest another route. It is wrong to put a figure on this and just allow companies to merge, because they are small, without looking at the consequence of the merger on the customer and whether there is still competition for whatever services that are provided rather than turning the company into a monopoly.
Viscount Eccles
My Lords, I very much support my noble friend Lord Hunt of Wirral’s amendment. Key to this is the definition of “market”. You can dance on the head of a pin and end up with a single supermarket in the Scilly Isles or somewhere and say that that is a market. First, this is a very good amendment and I hope that the Government will take it up. Secondly, the key is to be clear in the publications that are put out what a market is. I can remember occasions when we sat down and argued extensively over whether something that was said to be a market really was one. That is key to coming to the right judgment about whether something should be referred.
I doubt that there will ever be a market where a company has less than £5 million turnover and the anti-competitive effects are such that it should be referred. It comes back to one thing only. Are the public paying higher prices than they should reasonably expect to pay? The rest is fluff and twitter. It is the prices that the public are paying that matter. If there were examples, maybe there would have to be a review of a figure of £5 million, but £5 million is pretty safe on the basis of an accurate definition of “market”.
Lord Mitchell
My Lords, I have listened with great interest to the words of the noble Lord, Lord Hunt of Wirral, and the noble Viscount, Lord Eccles. We, too, are always looking for reasonable ways to ensure that SMEs—or SEs, small companies, in this respect—are not subject to too much regulation.
Perhaps I am confused on this, but currently in the 2002 Act there are two criteria as to whether competition authorities should take an interest in a merger. The first, which we have spoken about today, is whether the turnover of the business is in excess of £70 million. This is a considerably higher level than what is being proposed today, so it is unlikely that any company with a turnover of £5 million being taken over would be investigated.
The second criterion, though, the one that we are paying most attention to today, stipulates that where two merging businesses have an effective market share of over 25%, that becomes a relevant merger situation for the competition bodies to consider. That 25% is an important threshold as to whether some form of monopoly is taking place and therefore, as the noble Viscount said, the value to the consumer is affected prejudicially.
At present, it appears that the only effect of Amendment 25 is to exclude the possibility of the CMA looking into a merger if the turnover of the business being taken over was above the £5 million threshold, even if the combined market share were to be more than 25%. Those are scenarios in which we might not wish to tie the CMA’s hands in this fashion. A tech company, for example, could have a low turnover but a high market share, particularly in a locality, and as a result the CMA might want to take a look at a merger between it and a dominant company in that market, or there could be some form of geographical dominance.
I find myself sympathetic with the thinking behind this because, as far as I am concerned, the more competition the better at all times, and I am also sympathetic with keeping red tape away from small businesses. However, it appears that when it comes to mergers, such protections are already offered, and this amendment could damage something even more important to SMEs—a strong competition environment. We definitely want to think about what has been said today; some important points have been raised. We will wait for the next round at Report.
Lord Marland
My Lords, the amendment is interesting; on the one hand, the noble Lord, Lord Berkeley, has made a compelling point, as indeed, on the other hand, did my noble friend Lord Hunt. Both points, although they differ, are things that we all want to safeguard against. The other point that was not made is that the amendment would not safeguard against the big company buying the small company, which we also want to safeguard against. I think that we are all talking the same language and, on that basis, if my noble friend Lord Hunt of Wirral, will allow us, I think we ought to take this issue away, roll our sleeves up a little more with some hot towels—or cold, if he prefers; some days I prefer cold, I must say—and look at it a bit further. If he is happy on that basis, I ask him to withdraw his amendment.
Lord Hunt of Wirral
My Lords, I am not just happy but enthusiastic in my response. There are not many Ministers who respond so positively and with such an open mind. I quickly say, “Done!”. I recognise that the noble Lord, Lord Berkeley, has an important point about protecting the consumer, and I recognise that I still have to persuade the noble Lord, Lord Mitchell. However, I am grateful to my noble friend Lord Eccles for his support. Yes, let us go away. As we all talking the same language, we do not need an interpreter; we just need action, not words. I beg leave to withdraw the amendment.
Lord Marland
“( ) omit paragraph (b),”
Lord Whitty
“(5) In a “cross-market reference” the key concern will be whether the practice or practices identified in the reference cause significant consumer detriment.
(6) In the case of a “cross-market reference”, the markets identified as the most likely areas for occurrence of the potential cross-market problem at the launch of the investigation may be extended to other markets if prima facie evidence suggests the possibility of the same practices arising in those markets.”
Lord Whitty
My Lords, the amendment deals with cross-market issues and, I hope helpfully, suggests some flexibility. Other amendments simply insert a clearer reference to the consumer interest. I greatly welcome the reference in this part of the Bill to cross-market cases. Often, consumer or supplier abuse found in one sector is also rife in others. Traditionally, monopolies commission, OFT or Competition Commission references and investigations have tended to be siloed in vertical divisions. There are some horizontal abuses, in particular in relation to what I would call trading practices rather than necessarily market dominance. I suspect that with the growth of digital selling, we will have more consumer detriment arising from techniques which apply across a whole range of sectors.
Amendment 25B is a probing amendment to try to find out how this will work. I am not clear whether the cross-market reference has to designate both the practice and the sector in which it is suspected that it applies, or whether it just has to designate the practice. That is unclear in the Bill. If it requires reference to the sector as well, then Amendment 25B says, if you have found it in one sector, or two or three sectors, and you are starting an investigation or a reference, you need to provide for that to be extended to others. One frequent market or unfair trading abuse is the misuse of prepayment. That is a traditional one. That can apply in different respects to everything from paying for a ticket to a pop concert to buying a sofa or booking a holiday—there were tragic issues with the Christmas club and Farepak a few years ago—or paying for gym membership. If the service does not transpire or the goods never arrive, it does not really matter which sector the business is in, the practice needs tying down.
I hope that that is what is covered by the cross-market reference. I need confirmation, however, that you do not have to stipulate sector by sector where the suspicion arises. An investigation could start out knowing that there are problems in one sector but not until well into the process identifying them in another.
The other amendments in the group simply re-emphasise the need explicitly to look at competition from the point of view of the long-term detriment of consumers. Schedule 9 again does not once mention consumers. Amendments 25C to 25E would simply write into the key paragraphs of that schedule,
“to the detriment of consumers”,
to make it clear. I beg to move.
Lord Marland
My Lords, no one knows more about consumer protection than the noble Lord, Lord Whitty. He had a distinguished time as chairman of Consumer Focus, for which we are very grateful. It is also interesting to learn what he does during the day: he went to a pop concert, bought a sofa and had a holiday—the man never fails to surprise me. He is of course right about the consumer, and far be it from me to disagree.
I would like to point out that his amendments, being probing amendments, have asked the right questions, and I can answer them. One of those questions was whether this applies to both practice and sector or one or the other. It applies to both, and I hope that that gives him assurance. The existing provisions in Section 135 of the Enterprise Act will enable the CMA to vary the scope of a cross-market investigation. That was news to me and I think it is to him as well. I assure him that enforcing effective competition for the benefit of consumers is already embedded within the market regime, and I hope that that gives him the comfort that he was looking for. I hope that on that basis he feels able to withdraw his amendment.
Lord Whitty
My Lords, I thank the Minister for that, particularly the reference back to the Competition Act, which I had not picked up. It is quite clear that we have that flexibility in a cross-market reference to a particular practice.
On the schedule itself, I accept that the Government’s intention is that it is the consumer detriment or benefit that needs to be assessed. It would be nice if the parliamentary draughtsman could occasionally remind us of that; I am afraid that he has failed to do so in this schedule. If there is anything that the Government can do quietly at later stages without upsetting too many people, but pleasing me, I would be extremely grateful. In the mean time, I beg leave to withdraw the amendment.
Lord Whitty
My Lords, I have tabled my intention to oppose Clause 29. It is not that the clause does not bring in some useful stuff, but I find myself in some bemusement over quite what the Government ultimately intend in relation to the public interest and the kind of interventions in that regard. I am hoping for some clarification of the strategy here. I do not yet know whether or not I agree with the Government because it is not clear in the clause, or in anything that anyone has so far said, what lies behind Clause 29. I hope that I will be a bit wiser at the end of this debate.
At present, as I understand it, the criteria under which the OFT and the CMA operate are clearly related to market structures or competition, and only the Secretary of State can intervene to require them to look at wider issues of public interest or himself deal with issues of public interest. A narrow definition of what the public interest is operates at present, principally, as I understand it, relating to national security. We all know, though, that when high-profile mergers come up, the public, by which I mean both interested parties, consumers, suppliers, workers, the financial press and so on, are often concerned about much wider issues than competition as such—the issues of employment or the potential loss of employment, the loss of UK control, technology, intellectual property or international competitiveness as well as the long-term effect on consumers, workers, communities, the environment, and so on.
Almost all these issues get raised when we are faced with a big merger. For example, in the Kraft takeover of that old and respected English company, Cadbury, all these things were gone over with a fine-toothed comb, but none of them was particularly relevant to the final agreement to the merger. Perhaps I can make one little gripe: despite assurances, the Bristol factory in fact closed. There was no issue of national security and no other issue on which the Secretary of State felt able directly to intervene, although there was a requirement frequently to explain the position to Parliament and to committees of another place.
There are two arguments. One is what constitutes the public interest beyond the stipulations of the competition regime. The other is who invokes the public interest and how. As I read Clause 29, it seems to attempt to transfer some of the responsibility of the Secretary of State on to the CMA; it does not at all attempt to define the public interest. One could take different positions on this. Some would say that the Secretary of State should retain some responsibility, as is largely the case now. Some would say that he or she should retain that control but have a wider range of criteria on which to define the public interest.
You could also say that the CMA should be able to invoke the wider public interest, such as competitiveness or employment issues, but that the Secretary of State should still retain powers to intervene as an alternative. Others say that the Secretary of State should be the judge of national security issues but that the CMA should have other aspects of the public interest in mind in its investigations and decisions. At the other extreme, some say that the CMA should have the sole role and that politicians should keep out of it. I think that the Government are veering towards that position but are not quite getting there. The cleanest position, which some of my colleagues have taken, is that the Secretary of State should have the sole initiative in issues of wider public interest and that the public interest definition should be narrow.
I take a wider view; I tend to think that the CMA should be able to initiate consideration of what the wider issues are if it considers that those could outweigh the competition issues. I do not think that, on this front, the Government’s position was clearly spelt out in the House of Commons or elsewhere. This clause stand part debate gives the Minister the ability to spell out clearly and precisely where the Government are going with this. Once we are clear on that, we can decide whether we take it any further at a later stage, but at the moment I am essentially unclear, so I hope that it can be clarified now.
Viscount Eccles
My Lords, in supporting the thesis of the noble Lord, Lord Whitty, I just wonder whether this is meant to be unclear. It is very long and there are lots of tos and fros. You get caught up in considerations of exactly how independent the CMA is when something called public interest comes on the horizon. My suspicion is that it is not very independent at all. Schedule 4 makes certain that you had better do what you are told when the chips are down. It also seems to me that the weakening of the operations of phase 2 by the creation of a panel that floats freely without being rooted into the ground in any way that I can see also makes it all a bit unclear. Surely the sort of panels that there have been on the Competition Commission have been pretty good at public interest considerations, which vary widely. I entirely agree that there needs to be some clarity as to what this is all for.
Lord Marland
My Lords, I will break with tradition and, much to my officials’ relief, read from a prepared script on this one, because it is way above my unpaid grade.
Public interest cases are particularly important to the UK, so it is right that the Secretary of State receives the best possible expert advice on these cases. This clause gives the Secretary of State the option to ask the CMA to look at public interest issues in the round with competition issues. I hope that that clarifies one of the points the noble Lord, Lord Whitty, made. This will enable the CMA to provide comprehensive recommendations on both issues. The Competition Commission can already do this in merger cases.
This clause does not give the Secretary of State additional powers to intervene in market investigations—he already has the power to intervene on certain public interest grounds, and these are not changing. Currently the Secretary of State can only intervene where there are issues of national security.
It will not be the CMA’s decision on where the balance is between competition issues and public interest issues. This will remain, as it should, a decision for Ministers who are accountable to Parliament. The CMA will be the UK’s primary competition authority and will therefore overwhelmingly be focused on competition enforcement.
The CMA, like the Competition Commission, will have expert staff and panel members with a wide range of experience. If the CMA does not have enough in-depth expertise on the specific public interest matter in question, the clause allows for a public interest expert, or experts, to be appointed, who would work alongside CMA teams.
To my way of thinking that gives a very clear understanding of the position on a quite complicated issue. I think the noble Lord, Lord Whitty, has initiated a very good debate. On that basis I commend this clause to the Committee.
Viscount Eccles
The trouble is that it does not tell us why it is there. It tells us something about what could happen under it, but not why it is there. I would enjoy a freedom of information application to find out where this started and what it really means.
Lord Whitty
I thank the Minister. The noble Viscount, Lord Eccles, as ever, is opening my eyes to wider objectives of government legislation. The objective of obfuscating everything is, I suspect, part of legislation more frequently than we would care to admit or like. I felt today it worked slightly to clarify the Government’s position. I am very grateful to the Minister for that. I shall study his words carefully, as they say. My initial take is that I might, on balance, disagree with it, but I will need to look at that and may return to it. It was a useful question to ask and we will see how this works out in practice and whether we need to return to it on Report. I beg leave to withdraw the Amendment.
Lord Whitty
“(d) assisting the CMA in assessing complaints brought to them by bodies designated as super-complaint bodies, including complaints which are not formally super-complaints.”
Lord Whitty
My Lords, I have effectively spoken to this under an earlier item, so I will not move it today.
Lord Berkeley
My Lords, this is a very quick, probing amendment. It gives the CMA powers to seek information in support of a market study. That is useful. I imagine this is where one occasionally reads about dawn raids on companies that allegedly may have transgressed—it makes interesting reading. However, when one talks about the sector regulators, it is not clear to me whether they would also have the same powers of investigation in Clause 30 as the CMA would have.
I have been talking to one or two of them and will bring some of the issues up in a later amendment. It would be useful to know the position on this. I think they would find it useful to have such powers in the initial stages of their investigations. It certainly is not clear to me whether they do have these powers and I look forward to the Minister’s comments.
Lord Marland
My Lords, we are trying to streamline the processes, as the noble Lord, Lord Berkeley, would acknowledge. We are trying to speed them up, as we have already debated. That is central to the Bill. As a result the CMA needs access to the relevant information, which it has. There have been a number of cases where the OFT has had difficulty getting to the information that it requires from the market-study stage, so this is being done to make sure that it does. The clause extends the powers to request the information and ask parties to give evidence so that consistent powers will cover the whole piece. They are subject to statutory limits. The most important thing is that business has clarity of vision and knows the direction of travel, and that is why speed, time limits and penalties send a clear message to business.
The noble Lord, Lord Berkeley, asked quite rightly if sector regulators have Clause 30 powers. We need to look at this more carefully. We have not come to a firm landing on it, but we could perhaps have dialogue on this together before Report. If we can bottom that out we will, but if we cannot we will make a commitment to look at it in secondary legislation. I commend this clause.
Lord Berkeley
I am grateful to the Minister for his comments. As we discussed in a previous amendment, one of the objectives of the Bill is to streamline things and reduce the costs of activities connected to investigations. I am sure that he is aware that the better sector regulators—I will talk about them later—are probably able to undertake this work cheaply and quickly, and with sectoral special knowledge that you would not expect the CMA to have. I welcome his interest in looking at this, and perhaps we will be in touch before the next stage. On that basis, I am happy to see the clause stand part.
Lord Whitty
Lord Whitty
My Lords, this amendment and the others in this group are pretty straightforward and deal with the level of fines in relation to Schedule 11, which relates to non-disclosure or falsification of information in the course of an investigation. It is about the maximum level of fines.
The maximum level of £15,000 or £30,000 would be significant fines to the kind of small businesses to which the noble Lord, Lord Hunt of Wirral, referred earlier. For many in large markets, though, these would be a flea bite. For the investigatory powers to work, they need to be able to ensure that the procedures are honestly met by those companies that they are investigating.
It is unlikely in any case that small businesses would be caught under these provisions; it is middle-sized and larger companies that are likely to be caught. You need a deterrent to dishonesty, which is effectively what this is. We are suggesting that up to 10% of turnover would be an appropriate deterrent whereas, frankly, £15,000 would not. That runs through all these amendments. The Government would be wise to look at this again. I beg to move.
Viscount Eccles
My Lords, I part company a little from the noble Lord, Lord Whitty, here and I shall illustrate why. I think that the Competition Commission has had the power to exercise civil sanction or administer fines—I am not too sure exactly what it can and cannot do. On the information that it has sent me, it has not ever done so, yet I have not heard any complaints that people have not given it the information that it has asked for.
A fundamental point needs to be remembered. We live under the law by consent. If the assumption is that people will live under the law only if they are threatened with fines and that the fines are big enough, and you go on down that road, in the end, people will not obey the law by consent.
Lord Borrie
Surely the noble Viscount would agree that these things sometimes have a deterrent value. People know about them; there is no need for them to be served with a writ.
Viscount Eccles
I quite agree about deterrents: a nuclear bomb is a deterrent. You have to provide a deterrent. Everyone will say, “Well we expected that, so now we’ll only go to 70 and not 90”. I am sorry, but I do not agree with the philosophy behind such a system. The minimum number of sanctions and penalties that you can achieve is the best, and the greatest degree of things working properly by consent is the best way to go.
Lord Marland
I have to disagree with my noble friend Lord Eccles because I believe that you should have deterrents. I think that the general public would want us to impose deterrents for those who do not comply with statutory rules, so I am afraid that he and I do not converge on that.
The noble Lord, Lord Whitty, is right to talk about deterrents. First, I point out that this is not just £30,000, it is £30,000 or 10% of turnover, so that deals with some of those companies that did not fall into the net that he was talking about. For very large companies, the Competition Commission can fine a daily rate of £15,000 per day with no limits, which is a serious deterrent.
The other point that I emphasise is that the Competition Commission has never had to impose a fine for non-compliance with a request, which shows that the system is working and has worked. I hope that on that basis the noble Lord will withdraw the amendment.
Lord Berkeley
Before the noble Lord sits down, I was interested in his comments about the £30,000, the £15,000, or whatever it is plus the 10%, plus a daily rate of £15,000 or something.
Lord Marland
Can I just clarify that? I did not say plus. It is £30,000 or 10% of turnover, and the Competition Commission can charge a daily rate of £15,000.
Lord Berkeley
I am grateful to the Minister. I am wondering why the daily rate should not be a percentage as well. One is talking about a big range between small companies and multinationals. Frankly, £15,000 a day for a big company is really nothing.
Lord Marland
I have made a mistake. It is not “or 10% of turnover”; it is a fixed rate of £30,000—not 10% of turnover—and £15,000 per day. The noble Lord, Lord Berkeley, asked where the deterrents are. The deterrents are the £15,000 per day, which has no limit on it unless the Competition Commission determines that it should have. So it lies within its power, if the noble Lord understands me.
Lord Berkeley
I am grateful to the Minister for that clarification. I still think that £15,000 a day for a big company is chicken feed; they will not notice it, even if it goes on for several years. I am no expert at levelling fines but I have been investigating the potential level of fine, admittedly on the Government, but it concerns the Thames Water tunnel outside here. The figure being bandied around there is £1 billion if we are lucky. That is a project that is worth £4 billion, and maybe there is a company with a turnover of £4 billion involved in this competition issue. The figure seems to be slightly low and out of proportion. I do not know whether it is a deterrent. Perhaps the Minister could reflect on whether a percentage for a daily rate would not be an additional deterrent.
Lord Whitty
My Lords, I am grateful to the Minister for clarifying that; I was getting a bit confused myself. If he had been right first time, my amendments would not have been necessary. I accept that there is a daily rate and that is an important consideration. I am sorry to part company with the noble Viscount—I am sure that we will be back on the same course at some point—but you need a deterrent in these cases. The question is what level of deterrent is effective enough to ensure that you will never have to impose it. It seems to me that these amounts are a bit low, given the size of the markets that we may be talking about.
I hope that the Government look at this again. Among other things, they will probably find that some of the sector regulators have tighter powers on the disclosure of information than this. I think I am right in saying that Ofwat does, for example, in relation to misleading information. I declare a brief past interest: I was on the board of Ofwat for a short period. We will probably find that these are rather minimalist maxima and they could do with further review. I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, this is very straightforward. It is a matter of clarity. Clause 31 refers at several points to “relevant authority” and I assume that that means the CMA or possibly, in some cases, trading standards through to local authorities. The amendments in this group refer to the CMA or a local authority. Is that right? If not, there is some confusion. Or is it just the CMA itself? The Minister might wish to consider this improvement. I beg to move.
Lord Marland
My Lords, I can get to the nub of this very quickly. The relevant bodies in this case are only the Secretary of State and the CMA. That is why we would not want to accept the amendment. It would not be appropriate to widen that, particularly embracing non-competition bodies in the organisation. I hope that that is the clarification that the noble Lord, Lord Whitty, was looking for and I hope that he withdraws his amendment.
Lord Whitty
In which case, my Lords, surely it would be sensible to say the Secretary of State or the CMA—then we would all be clear. I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, these amendments are straightforward. Part of the rationale for the merger has been to speed everything up. The time limits here seem generous in relation to Schedule 12 on market studies—admittedly, that is only part of the Bill—and I thought I would take the opportunity to try to speed them up a bit. I am relying on the Minister to tell me why not. I beg to move.
Lord Marland
I cannot tell the noble Lord why not; I asked the very same question of my officials. It is a perfectly reasonable comment for him to make. If we can work together to see where the dynamics exist, we might be able to see if it is practical to improve this a little. I do not think that we will be able to do anything too dramatic, but the noble Lord makes a good point. We have said all along that this is all about speed of process. As I have agreed with his overall point, I hope that the noble Lord will agree for the moment to withdraw his amendment so that we can discuss this later.
Lord Berkeley
Before the noble Lord sits down, I have a question in relation to these time periods. I have had a little experience of trying to do something like this in the railway sector. My recollection is that a long time is taken between when the notice is issued saying that the authority will conduct such a study and when it has sufficient information to allow the clock to start running. Reading the Bill and my noble friend’s amendments, I am not sure whether these numbers—from six months to four months—apply to the time between the notice being issued or where the clock starts ticking and the authority believes that it has sufficient information. Maybe my noble friend has more information on this, but it is a point worth looking at when we come back to it.
Lord Whitty
My Lords, in reply to my noble friend, Lord Berkeley, the point would be from when the clock starts rather than just a twinkle in the eye of the regulator. I accept that everything is a little arbitrary to some extent, but if we are trying to turn the screws and stop us from being seventh out of eight of the competition authorities within the larger countries in Europe, we should take every opportunity to speed things up. If the Minister wishes to have another look at this, I would be grateful. I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, these amendments are a little more complicated. I am not sure that I understand this myself, I concede to the Minister. They address the issue of employees giving information to the Competition Commission, in this case during the course of anti-trust cases. As I understand it, Clause 33 provides, in secret price-fixing cases for example, powers to ask questions of the employees about the undertakings concerned.
By definition, the actual knowledge of price-fixing will be confined to a few relatively senior people—directors of the company or their senior managers or agents. However, it is the nature of an enterprise that people get to know these things one way or another. Sometimes, indeed, employees who themselves may be quite high up but not immediately responsible for the area get to know about it, or it could be a secretary or a clerk in the finance department, or whatever. They might volunteer the information, or at least respond once the investigators are on the case. The investigators would be using the powers within this clause, and they may get information voluntarily or from pressing a junior employee to say something that, frankly, was damaging, or would be seen as damaging, to the position of the company that had been carrying out the price-fixing, bid-rigging or whatever.
The changes proposed in my amendments would try to ensure that those employees, of whatever status, who give or volunteer information have at least as much protection as in the Employment Rights Act provisions for whistleblowers. It is therefore important that this is put beyond doubt, so this is effectively a “for the avoidance of doubt” clause. Otherwise the investigation may itself be inhibited on the one hand because people will not come forward with information, while on the other hand it could mean that individuals are prosecuted for breach of commercial confidence or, if they have refused information, are themselves prosecuted individually, rather than the company or the senior management or directors concerned, for failure to provide that information. I accept that there may be better ways of doing this but I am anxious that such people, as well as the investigation, should be protected by some clarification here. I beg to move.
Lord Borrie
My noble friend Lord Whitty has tabled a very valuable amendment here. It is most important that any employee who public-spiritedly, and in the public interest, discloses information that he has from his employment that may indicate some illegality on the part of his employer or senior employees must be protected. The Public Interest Disclosure Act is now embodied in the Employment Rights Act, which we discussed at an earlier stage, and it is most important that nothing be done elsewhere in the Bill that would damage that protection.
In some countries—in the United States, for example—employees and others get what is called a leniency benefit. They may have had some guilt themselves in knowing about an illegality that their firm was committing, but they may get leniency by informing the powers that be of what that illegality is. This provision does not go as far as that; I bring that point up only to make it clear that in some countries the protection given to the whistleblower is even better than in ours. Our protection is good and is embodied in the Bill, and the amendment that my noble friend wants to introduce would ensure that that protection existed.
Lord Marland
That was a veritable tour de force from the noble Lord, Lord Borrie, as one would expect. Just to deal with the issue of whistleblowers, I want noble Lords to understand that nothing in this clause would affect the rules relating to whistleblowers at all; that is key. I shall read out the speaking note on this—my goodness, I might get used to this—because it is a complicated issue; the noble Lord, Lord Whitty, himself wanted to clarify this in his own mind, so between us we might be able to muddle through and clarify both our minds.
The amendment is to Clause 33, which gives the CMA an important new power to require certain individuals to answer questions during an anti-trust investigation. The new power is similar to the current power to require a person to answer questions, which exists under Section 193(1) of the Enterprise Act 2002 in the context of criminal cartel offence investigations. The Bill will correct the anomaly that a person can be required to answer questions in criminal cartel investigations but not anti-trust investigations, including into cartels.
Such a power should be subject to safeguards, however. We have proposed provisions akin to those made in relation to cartels by Section 197 of the Enterprise Act, to provide that statements made by an individual in response to a requirement imposed under the new section can be used in evidence against the individual or the relevant undertaking only in limited circumstances. Those are the safeguards that the amendment would remove, and I therefore hope that, on reflection, the noble Lord will see that in effect extending the power to ask questions to the anti-trust area, we also need to transpose the associated protections for individuals and undertakings.
I hope that that is as clear as daylight to the noble Lord. In the light of that, I hope that he will withdraw his amendment.
Lord Whitty
My Lords, it is six o’clock on 18 December, so there is not much daylight, but I am grateful to the noble Lord for some reassurance on that. I am not sure where we are restating the existing provisions. I am grateful for the intervention of my noble friend Lord Borrie, because he points out that, on the one hand, investigations depend on people telling the truth and that, in other countries, there are rather stronger protections than we have.
If the Minister is right that my amendment would make the protection worse, I will clearly withdraw it. I will have a look at how the interplay between the various existing provisions protects that position. Whether they are responsible themselves and therefore a degree of what the Americans would call plea-bargaining is appropriate or whether they are simply imparting knowledge which they have acquired in one way or another, we need to protect such people. Any hint that the Bill would change that is important.
Clearly, I am not doing it in the right way. I will read what the noble Lord said and see whether I need to take the matter any further, but I am very grateful for his response. I beg leave to withdraw the amendment.
Viscount Eccles
Viscount Eccles
My Lords, I am probing to see whether there is some way in which some of these arrangements could be drafted to simplify their implementation. I worry about the amount of work that we are giving the legal profession by some of these arrangements. This is a very complicated piece of paper chase. New Section 40A amends the 1998 Act. We have been talking mostly about the 2002 Act. It relates to powers when conducting investigations, to failure to produce documents, destroying or falsifying documents, and providing false or misleading information. The 1998 Act contains in Section 27 powers to enter premises without a warrant and with a warrant. In a statutory instrument in 2004—which, incidentally, is not included in the latest printed edition of the 1998 Act, you have to find it some other way, but it is an amendment to the 1998 Act, statutory instrument 1261 —there is a power to enter domestic premises with a warrant. That is the 1998 Act. However, new Clause 26A to that Act, which we have just been looking at, is in Clause 33 of this Bill. That leads me to ask one or two questions.
I should say to the Bill team: thank you for your assistance with my eventually finding Amendment 28A and that statutory instrument because it was a very interesting chase. No wonder I could not find it in the 1998 Act; it was not there.
New Clause 26A(6) says,
“For the purposes of this section … an individual has a connection with an undertaking if he or she is or was … concerned in the management or control of the undertaking”.
I started to get into a terrible panic and wondered what sort of information I might be required to provide about when I was laying graphite cores in nuclear power stations or something. Is there any limitation on that subsection, such as a statute of limitations?
I have many questions in my mind, but I shall limit myself. With regard to new Clause 40A in Clause 34, BIS’s presentation to the Delegated Powers Committee says that the Bill,
“removes … criminal sanctions attached to failure to comply … and replaces them with a new civil sanction”.
However, when I read the amendments in Clause 34, particularly the ones near the end about omitting subsections (1) to (4) and so on, I could see where we were omitting certain of the criminal sanctions, but there followed two or three other clauses in the 1998 Act that seemed still to apply and still to envisage criminal proceedings. All that I am asking is that some real effort is made to clarify some of these matters in a way that means that businesses, their secretarial departments and legal departments will understand them, and they will not have to go to outside lawyers too much. We keep on talking about making things certain so that people know that they can get on and do the things that they want to but, believe you me, it is some endeavour to find out what this means. I beg to move.
Lord Whitty
My Lords, I am in danger of re-establishing my alliance with the noble Viscount. There are aspects of this clause that could do with clarification. It had not struck me until he spoke that the wording,
“is or was … employed by”,
might refer to when they were an employee, a subcontractor or a director 20 years ago, and that would still be covered by this clause. Clearly the noble Viscount’s previous career flashed past him. Mine did so a little earlier this afternoon when watching the interplay between the Minister and his team; I recall that many decades ago my Civil Service career was clearly doomed when I passed the Secretary of State an illegible note during the course of one bit of legislation. There must be equivalent things that people have seen, and have had in their hands; they may not have realised their importance at the time but they still have vague knowledge of them. The criminal sanctions that are implied by the interplay of the various pieces of past legislation here could raise anxieties that the Government do not really intend. The noble Viscount is essentially right that perhaps once again the draftsman could have another look at this. Clearly the noble Viscount and I will quietly let any amendments on this front through at later stages.
Lord Marland
Perhaps I could explain to the noble Lord, Lord Whitty, and to my noble friend Lord Eccles that all that the clause does is to allow the CMA to conduct a more effective and timely anti-trust investigation. We are imposing civil fines, to be quicker and more effective, which will have some bite to them. The reason for this is that not one criminal prosecution for non-compliance has been pursued. That shows either that the CMA does not want to pursue it because it is too complicated, or that it is in the margin.
We are retaining criminal sanctions for obstructing an officer exercising powers to enter premises, destroying or falsifying documents, or giving false or misleading information—they will remain. The imposition of civil fines rather than criminal sanctions to speed up the action on anti-trust is also in line with the European law that features that. On that basis, I hope that my noble friend might withdraw his amendment.
Viscount Eccles
I thank my noble friend. Can he deal, if not now then later, with this point about an individual having had a connection with an undertaking? As a provision in Section 26A, which is one of the new clauses covered by this enforcement power, it seems pretty wide-ranging. I am pleased to be told that the criminal sanctions are staying for certain parts of the 1998 Act regime. On that, the presentation of the Delegated Powers and Regulatory Reform Committee was rather ambiguous, but we have cleared that up.
In the argument that says that if people know that there are all sorts of horrendous and complicated penalties, with extensive legal costs attached to them—even if you go down the route of new Section 40A, costs will still be attached—we are basically, steadily saying that nobody can be trusted. We are losing touch with the idea that people do things by consent and because they trust each other. That is very regrettable. Meanwhile I beg to withdraw.
Lord Berkeley
Lord Berkeley
This is a probing amendment. Subsection 36(4) of the Bill provides for one or more of the CMA’s functions to be delegated to one or more members of a panel—for example, decisions in competition cases. It would be useful to hear the Minister’s comments as to whether this is something that the Government envisage for the sector regulators. There is an option, which was discussed in the Government’s consultation, but which was not set out in the Bill, for regulators to be relieved of their decision-making powers in competition cases. Is that still an option on the table, possibly through secondary legislation and for the decision then to be vested with the panels that are set up for that purpose under this clause? Some of the sector regulators are concerned about exactly what the intention is. I beg to move.
Lord Whitty
My Lords, I think that my noble friend Lord Berkeley is right to seek verification on this. A later government amendment will propose what he fears. At that stage, I shall certainly propose that we need a much more conciliatory regime between the Secretary of State, the CMA and the sector regulators, otherwise we shall get into serious trouble. It is important that we get clarity on the issue.
Lord Marland
The noble Lord, Lord Berkeley, gets to the point. I am grateful for his brevity. I am reliably informed that the rules under Section 51 will apply to the sector regulators. The same principles will apply but the rules may differ a little in detail. Of course, as he would say, the devil is in the detail but I am sure that within the detail there is quite a wide canvas. I hope that clarifies the situation for the noble Lord.
Lord Berkeley
I am grateful to the Minister but I wonder whether, within his broad canvas, or whatever, he has any views about whether any secondary legislation will be introduced on the issue which may or may not be helpful. I noticed that within this group there is the Question that Clause 40 stand part and Amendment 26BF, in the name of my noble friend Lord Whitty. I would be pleased to hear what he says about that because I have some comments on it too.
Lord Whitty
My Lords, I was going to leave that because my Amendment 26BF is an attempt to tidy up the provisions on review, along with another amendment that I cannot find immediately. There are separate provisions on the mergers, the markets and the anti-trust provisions, as to when we review them. I am in favour of the Government’s policy that we review legislation every so often but I think that it should be done simply and that we should look at the whole of the legislation. Essentially, that is what Amendment 26BF to Clause 48 is about. I was not going to move it today because I think that it requires the interplay of other parts of the Bill but I think a review of the totality of the Bill, all at the same time, would be helpful and should be built into the Bill in some way at a later stage.
Lord Marland
Perhaps I may first reply to the noble Lord, Lord Whitty. We will review this in five years’ time, as I think he recognises. That deals with his point. The precise detail will be discussed with sector regulators themselves and, once we have done that, we will obviously publish what has been achieved. On that basis, I hope that that satisfies the noble Lord.
Lord Whitty
Lord Whitty
My Lords, this is really a drafting amendment. Section 35 of the 1998 Act refers to “serious, irreparable damage”. I agree that that is too high a threshold and I assume that is behind the government amendment, but what is wrong with the present definition is surely the reference to “irreparable” which, by definition, is prospective, difficult to define, a bit subjective and therefore should go. To dilute “serious” to “significant”—I think it is a dilution—seems to reduce the threshold too far and is equally subjective. I consider that the word “serious” is probably better unless the Minister has a very good reason for sticking with the word “significant”. I beg to move.
Lord Marland
As the noble Lord says, it is a matter of conjecture and we will obviously look at it. I am not sure that I would be prepared to concede that change. I think that both definitions hit the target and I know that the noble Lord, Lord Whitty, is trying to find the right word. We will look at it again to see whether it is the right word. At the moment I am perfectly happy with our drafting but, as the noble Lord knows from our past together, we are always open to discussing these things. I am glad that the noble Lord withdrew Amendment 26AA because there is an existing MoU between the OFT and the CMA, which answers that question.
Lord Whitty
I am grateful to the Minister for that and I beg to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, Clause 41 makes some very significant changes to the law on cartels. At present, the competition authorities have to establish dishonesty by finding the directors or senior management of a company or their agents engaging in, say, market carve-ups, bid-rigging or price-fixing. “Dishonesty” takes us into the criminal law and, as a threshold, it is rather subjective at the point where it is triggered. I think that the Government are therefore convinced that it is too high a threshold and inhibits prosecution—or even investigation—into areas where a positive act of dishonesty has to be assumed, prima facie, before you start investigating. I understand and agree with that, in principle, and I agree on that part of the clause which removes the dishonesty threshold.
However, since making that judgment I have received representations, as colleagues no doubt have, from various groups of lawyers saying that this gets us into a worse situation than we started with because if you remove “dishonesty”, there will be court challenges as to why you proceeded in that case. I am not going to read out any of their learned opinions—the Minister will no doubt be grateful for that—but they indicate that there are still difficulties with doing that, which are in one sense compounded by the second part of this clause. I am hoping to remove subsections (4) and (5) but they interact and this is therefore complex, yet again.
The second part of this clause was introduced very late. It was not debated in another place and I object to it in principle. In effect, it is saying that if you inform people that you are engaging in market rigging, no offence has been committed. I understand that this was a sweetener to some industrial pressure from the CBI and others, but it is wrong. It is a highly detrimental provision; in effect, it is returning to the situation where there were registered cartels. We came away from that many decades ago and I think rightly so. If a bid rigging exercise exists, if a cartel of purchasers exists, if a price ring is in operation, if a market carve-up is taking place, surely it does not matter whether you told your lawyer or the Daily Telegraph that it is there. It is distorting competition and having an effect on market suppliers. Even if you told your customers, or at least some of them who are your suppliers, or even registered the matter with the authorities, it does not alter the fact that this is potentially an unfair trading practice. The effects are a distortion of the trade and the market and ultimately probably a detriment to consumers or suppliers. The CMA needs to be able to investigate that.
I appreciate that transparency; having told somebody can be mitigation in particular cases. However, I do not understand that it is an absolute defence, which is what effectively this clause seems to say. I think the Government need to clarify the first part of the clause and delete the second part. I think it is ill thought-out and an unwise concession to pressure. If we build on—but make clearer—how we can enforce this and trigger a threshold without the dishonesty provision being there, we certainly should not go down the road of transparency being a defence. It is not a defence, nor does it achieve the objective of freer markets, greater competition and better benefit to consumers. I beg to move.
Lord Marland
I take from this that the noble Lord, Lord Whitty, agrees with his own Front Bench in the other place that the removal of the dishonesty issue makes it easier to prosecute and therefore is a much better system. Clearly there has been a lot of consensus in the other place. I am not sure, because I was not involved in the debate in the other place, that we have put in a clause that bears any relevance to the provision that he is trying to impose. I have just confirmed that with my officials, who would concur.
At the end of the day, it is important that we should prosecute people who have formed cartels dishonestly—by marginal dishonesty. We all agree to that. It is reasonable that we provide notice for arrangements, for those who are likely to be affected, such as companies and their customers. It is very clear that where people breach these things we must use the strong arm of the law to create the necessary deterrents that involve market rigging, share rigging and all the usual things that are unpleasant and corrupt in many ways.
I think there is more debate to be had around this particular issue—there is more bottoming out to be had. As always, we are very grateful for the thinking that has gone into the amendments of the noble Lord, Lord Whitty. As he has said, we have had representations from various bodies. It is incumbent on us to listen to that. I think our direction of travel is right. There may be some tightening up of the wording needed to reflect the comments that the noble Lord has made as a result of those people who have contacted him. Obviously, as with all things, we make that undertaking. I hope that satisfies the objectivity of his excellent amendment and that he will withdraw it.
Lord Whitty
My Lords, I am grateful to the Minister for saying that he will look at the situation again. I want to clarify my position: I agree that the “dishonestly” threshold should go. We need to make sure that we do this in a robust way and that is what these legal opinions suggest we should have another look at. However, my understanding is that the second part was not debated in another place and that the Bill effectively says that, if you can prove that you have been transparent, the cartel may not exist. That seems odd. If it simply said, “If you have told your suppliers or customers that this is the way that you and your alleged competitors are dealing with it”, that would perhaps be some mitigation, but it cannot be an absolute defence. It cannot be, as the Bill says,
“Circumstances in which cartel offence not committed”.
I think that this is wrongheaded thinking and should come out entirely. However, if the Minister is looking at all this again, I am quite happy to wait and see what he and his colleagues in the department come up with on this clause. I beg leave to withdraw the amendment.
Lord Marland
“Power to remove concurrent competition functions of sectoral regulators
(1) The Secretary of State may by order made by statutory instrument amend any enactment so as to remove from a sectoral regulator either or both of the following—
(a) all the functions of the regulator under Part 1 of the 1998 Act that are exercisable concurrently by the regulator and the Competition and Markets Authority (“the CMA”) or that would be so exercisable but for provision made by virtue of section 54(5)(e) of that Act;(b) all the functions of the regulator under Part 4 of the 2002 Act that are exercisable concurrently by the regulator and the CMA.(2) An order under subsection (1) may make such other amendments of any enactment as the Secretary of State considers appropriate in consequence of the removal of the functions.
(3) Each of the following is a sectoral regulator—
(a) the Office of Communications;(b) the Gas and Electricity Markets Authority;(c) the Water Services Regulation Authority;(d) the Office of Rail Regulation;(e) the Northern Ireland Authority for Utility Regulation;(f) the Civil Aviation Authority.(4) Before making an order under subsection (1), the Secretary of State must consult—
(a) the regulator whose functions would be removed by the order,(b) any bodies who appear to the Secretary of State to represent the interests of persons in respect of whom those functions are exercisable (“regulated providers”),(c) any bodies who appear to the Secretary of State to represent the interests of persons who use the services supplied by regulated providers,(d) the CMA,(e) where the regulator is the Office of Rail Regulation, the Scottish Ministers,(f) where the regulator is the Northern Ireland Authority for Utility Regulation, the Department of Enterprise, Trade and Investment in Northern Ireland and the Department for Regional Development in Northern Ireland,(g) where the regulator is the Water Services Regulation Authority, the Welsh Ministers, and(h) in any case, such other persons as the Secretary of State considers appropriate.(5) An order under this section may include transitional, transitory or saving provision.
(6) A statutory instrument containing an order under this section is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(7) In this section—
“amend” includes repeal or revoke;
“enactment” includes—
(a) an enactment contained in subordinate legislation (within the meaning of the Interpretation Act 1978), (b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament,(c) an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales, and(d) an enactment contained in, or in an instrument made under, Northern Ireland legislation.(8) The references to the CMA in subsections (1) and (4) are to be read, in relation to any time before the commencement of section 20(3), as references to the Office of Fair Trading.”
Lord Marland
My Lords, Clause 45 gives the Competition and Markets Authority stronger powers to co-ordinate Competition Act enforcement work and gives sector regulators explicit duties to consider using the Competition Act. This will strengthen the regime for the concurrent competition powers.
The Government want to send a further signal about the need for the strong and effective use of competition powers across the regulated sectors. The Government therefore propose, under Amendment 26B, that if the new concurrency arrangements do not work and a regulator fails to produce better outcomes, the Secretary of State will have a power to ensure that the OFT and then the CMA take sole responsibility for applying concurrent competition powers in that regulated sector.
This will be a reserve power and the Government see its existence as being entirely consistent with our aim throughout to see improvements in the concurrency regime. The use of the power would be subject to a full consultation with those likely to be affected by the proposal to exercise the power, including businesses and customers, and an impact assessment process as well as the affirmative resolution procedure.
Nothing in the current provisions in the Bill or the new clause is intended to affect the Government’s commitment that Monitor will have concurrent powers so that competition rules can be applied by a sector-specific regulator with healthcare expertise. We have therefore revised the new clause in Amendment 26B, following the debate in Committee last week, to make sure that this is absolutely clear. Monitor’s concurrent powers will therefore not be subject to this clause. I acknowledge the amendment put down by, I think, the noble Lord, Lord Whitty and the noble Baroness, Lady Hayter of Kentish Town, which made a very good point. I hope that that finds favour.
I turn to the amendments to the new clause proposed by the noble Lord, Lord Whitty, and the noble Baroness, Lady Hayter. The Financial Conduct Authority will not have concurrent competition powers so it would not be right to make it subject to this power. Instead, we have provided tailored powers of competition scrutiny of the FCA by the competition authorities in the Financial Services Bill.
The Secretary of State would have to publicly consult and gain Parliament’s approval before an order could be made. He would also no doubt want to take into account the CMA’s concurrency report. In our view, Amendments 26BA, 26BB and 26BC are therefore unnecessary.
Amendment 26BD would provide for arrangements for the co-ordination of concurrency, which in many respects—for example, on information-sharing—will mirror the arrangements for co-ordination that will be made under Clause 45. It would also duplicate the main features of Amendment 26B in giving the Secretary of State the power to make an order removing the concurrent powers of a sector regulator. Given this, we believe that this amendment is also unnecessary.
I beg to move Amendment 26B and I hope that, in the light of what I have said, the noble Lords will not press their other amendments.
Amendment 26BA (to Amendment 26B)
Lord Whitty
“(g) the Financial Conduct Authority”
Lord Whitty
My Lords, I am extraordinarily grateful to the Minister for accepting that Monitor should come out. My amendment was to the original version of this amendment, and I thought that I would have to make that speech all over again. Luckily, as he has pointed out, it has been removed. I am glad that the Government took my advice on that; I think that they should remove any reference to Monitor anywhere in the Bill, and I hope that they will do so.
My only other point regarding the list was that we need to make some reference to financial regulators. Although, as I have said before, the Financial Services Bill has not yet received Her Majesty’s assent, we are in a position where we will have a Financial Conduct Authority and a Prudential Regulation Authority under the auspices of the Bank of England, which may well be taking measures that affect the structure of the financial sector. Therefore, although I am not suggesting that there be a reference to the FCA or the PRA, there should be some reference to the concurrency with the financial sector, albeit that the concurrent powers are not quite the same. So there is still a little issue with the list.
The more general problem with what the clause provides, however, is quite an important one. I am happier with the original clause that encouraged the sector regulators to use their competition powers. Actually, that clause merely requires them to consider using the competition powers; the noble Lord’s letter said “instead of” their sector powers, whereas they need to see which powers are best. The clause is fine on that, so I approve of the clause. However, I do not approve of the government clause that the Minister has just moved. It relates to the relationship between the sector regulators and the CMA, and that is clearly going to be crucial. We touched on this a few times earlier; indeed, my noble friend Lord Stevenson referred to it under the first amendment.
We need to change the present system. Frankly, some of the sector regulators have been overdefensive about their role with regard to using competition powers themselves, rather than their more familiar sector-specific powers relating to licences, franchising and so on, and very resistant to any suggestion that the Competition Commission should look at the competition structure of their sectors as a whole. On the other hand, it has also been true that both the Competition Commission and the OFT have been somewhat loath themselves to intervene in regulated markets, although I know that at one stage the Competition Commission was quite anxious to look at the energy market, with which the Minister is very familiar, but Ministers helped Ofgem to resist that. As I understand it, that was the position under both Administrations, and that needs to be addressed.
However, while the relationship between the two does need to be restated, the Minister has used the nuclear option. I assume that, like the nuclear deterrent, he is hoping that it will never be used, but it will mean compliance by the sector regulators, which will be using their competition powers more frequently, or they will meekly be prepared to hand over cases to the CMA under the threat in this amendment that their powers will be taken away by the Secretary of State completely, either on a particular issue or in total. That does not seem on its own to be the correct approach. We need the big print to be about co-operation between the CMA and sector regulators.
Amendment 26B would give the Secretary of State draconian powers to reduce the whole role of sector regulators and leave them with only their sector-specific powers. That is counterproductive to what we were trying to achieve, which was more use of competition powers with all regulators.
As my noble friend Lord Stevenson suggested this morning—or, rather, this afternoon; it just feels like this morning—we need a more co-operative approach between regulators. Unfortunately, the Minister rejected the particular option proposed by my noble friend at that stage.
In this group, we propose another option with Amendment 26BD. That requires a memorandum of understanding. Some of that exists already, but it will need to be boosted between each of the regulators and the CMA. It would eventually allow the CMA to ask the Secretary of State to require the CMA to take over provisions—again, either in a particular case or more generally—but that would be after a period when a co-operative and conciliatory memorandum of understanding had been working. That requires joint working, sharing of information, and so forth. This would still allow the CMA to conduct periodic reviews into how this was going with the sector regulators, but it would be far preferable to the nuclear powers that the Minister’s amendment gives to the Secretary of State.
I hope that we could accept this more conciliatory approach. I also hope that, even if the Minister’s amendment still stands and ours does not, the two amendments to his amendment, which would require the Secretary of State to give reasons for his action and to take note of the CMA's periodic reviews, would at least add a more objective context and require the Secretary of State to go through a significant number of hoops rather than jump straight into taking powers from the sector regulator. It is a more constructive approach. I prefer our amendment but, if the Minister is not prepared to accept that, the amendments to his amendment should be accepted.
This is a delicate area and one in which the CMA’s relations with the sector regulators will be very important. We could get it horribly wrong. The big stick that the Minister’s amendment implies is probably not the right way to be going about it. I beg to move.
Lord Berkeley
My Lords, I share my noble friend Lord Whitty’s serious concern about Amendment 26B. It goes to the heart of independent regulation. As I recall, going back a long time now, these regulators were created to be demonstrably totally independent of the Government. The Secretary of State probably appoints the chairman, but he cannot remove him unless he does something very naughty, bad or financially uncertain.
The principle of independent regulation without government interference—and Governments of all hues have a pretty bad reputation about interfering in different things—is fundamental to the operation of a regulated monopoly or series of monopolies. That is certainly the case in the railways and Network Rail, and to some extent it is the case in the water and power industries
The Deputy Chairman of Committees (Lord Faulkner of Worcester)
We have a Division in the Chamber. The Committee will stand adjourned until Members have returned or for 10 minutes, whichever is the sooner.
The Deputy Chairman of Committees
My Lords, before the Division, we were debating Amendment 26BA.
Lord Berkeley
My Lords, I had just about finished, but want to conclude by saying that I hope that the Minister and our other colleagues will look at the proposed new clause very carefully before Report, because there are some serious things wrong with it. I commend the amendments of my noble friend Lord Whitty for consideration.
Lord Bradshaw
I endorse what has been said by the noble Lord, Lord Berkeley. The proposed new clause states:
“The Secretary of State may by order made by statutory instrument amend any enactment so as to remove from a sectoral regulator either or both”.
How long is that going to take? If there is a weakness in the regulation, which is apparent, and even if the Secretary of State can recognise it, how long is the remedial action which is set in the Bill likely to take to bring into force? If a regulator is incompetent, surely there must be other ways of getting him to move over. He has a board of his own which, if he is exaggerated in his actions, can take action to rein him in. However, the whole edifice which is built here is wrong. I know two of the regulators involved and I have known some of the regulators in the past. Generally speaking, they are extremely competent people and probably more competent than the people who would advise the Secretary of State to use these powers. I believe that the powers are heavy-handed and very long-winded into the bargain.
Lord Berkeley
What would the noble Lord, Lord Bradshaw, think if there developed a debate between the Office of Rail Regulation, which is the regulator that we probably both know best, and the Government, and the Government said to the ORR, “You’re not pursuing this competition case in the way that we think you should, and it should go to somebody else who, like the CMA, could do it better.”? Is that not serious interference in the independence of the regulator?
Lord Bradshaw
Yes. Perhaps I may take another example; the Civil Aviation Authority, which I do know something about. It has a most excellent regulator—it is somebody whom I know personally, although I have never had any dealings with him as regulator of that industry—but issues of competition are likely to emerge in the airports business. He is a really independent person, and I cannot believe that somebody whose functions are created according to the mechanism set down here is likely to do the job any better.
Lord Marland
The noble Lord, Lord Whitty, indicated that he was minded not to support our amendment and what I am about to say is therefore largely academic because I will not support his amendment. However, let me explain, because there is not an awful lot between me and the noble Lord, Lord Berkeley.
We expect the CMA to work closely with the regulator. That is best, and we totally agree that government would be wrong to intervene in that process, as the noble Lord rightly said. That is something in which I strongly believe. Most organisations are better when government does not interfere in them. They are full of competent people, as the noble Lord, Lord Bradshaw, said, who have served us well over a period of time. We are a very well regulated society, certainly compared with most other countries.
However, there needs to be a clear signal that if this does not work or there is abuse of the system, the Government have the opportunity to invade in this area, and that is exactly how it should be. In that way you are protecting the consumer—the customer—against bad practice, not interpreting the rules properly and so on. If the Secretary of State were to intervene, he would almost certainly have to put that before Parliament to seek its approval. We are all on the same side as regards the spirit of the amendment. “We are all in this together” is the phrase that we like to use most.
I would be disappointed if the noble Lord, Lord Whitty, could not agree to our amendment and invited me to withdraw it. However, we are all singing from the same hymn sheet, and I totally respect the views of noble Lords who have spoken because this issue is important. It is absolutely fundamental that the system works without government intervening aggressively in it.
Lord Berkeley
Can the noble Lord expand a little on the reasons for when this would happen? He quoted bad practice and lack of interpretation of the rules, but it is not moving far away from the reasons for sacking, for example, the chairman of the board of the rail regulator if they have not behaved properly. If things have got that bad, one would expect them to resign anyway if this kind of thing came about. On that basis, I should have thought that there are already enough powers to change what the regulator is doing if it is really so ineffective. Given the proposed MoUs, the system would probably work much better. I am still not persuaded that there is a good enough reason for going through all this. Perhaps I have got it wrong.
Lord Marland
All that is important is that the consumer or customer, by which we mean the general public, recognises that if there is malpractice—a rare event—misinterpretation or something like that, someone ultimately has to be able to intervene in that process to ensure that it is put on the right track. One would hope that people would do the honourable thing and resign. However, sadly, we are not entirely in that world any more; it passed us by a few years ago, to my great regret. One could not therefore ultimately rely on that happening and you need a deterrent for it. The noble Lord, Lord Berkeley, knows this better than I do. He knows regulators backwards and has been involved closely with them. I have huge respect for his knowledge in that area.
All this seeks to do is complement the existing reforms that we are putting in the Bill. As I have said, it is a good government amendment and the amendments enunciated by the noble Lord, Lord Whitty, are of interest and not unnecessarily unreasonable, but they could be clarified.
Lord Bradshaw
Perhaps the noble Lord would answer my question about how long it will take to bring the machinery into effect. If, for example, the Government are dissatisfied with the way an industry is being regulated, they presumably will make that clear. But if they have to resort subsequently to producing a statutory instrument, how long will it take for that to have an effect?
Lord Marland
The Secretary of State would intervene only if an agreement had not been reached with the various parties on the direction of travel. As we all know, that is a big “if”. He then has to do an impact assessment and would have to consult for three months. I apologise, it would be for 12 weeks. Whether it is 12 weeks or three months is a very important differentiation because sometimes we work on working weeks and on others we do not. Therefore, let us say 12 weeks.
I do not think that any of this is unreasonable. If we have failed to determine through the channels of discussions why something is being done wrong, or are getting nowhere with it and feel that the public are better protected by the action that we are going to take, we have to have a way to be able to do it. That is all that we are seeking to do.
Lord Whitty
My Lords, I am grateful to the noble Lords, Lord Bradshaw and Lord Berkeley, and the Minister. That sounded fairly conciliatory from the Minister. I am not entirely sure that I should seize on “not unreasonable” or “not unnecessary” as indicating approval of my approach. Nevertheless, I think that it was generally positive.
However, probably neither of our amendments is ideal. I hope the main theme that the Minister is taking away from all this discussion is, if you want a reserved power, it has to be very clearly a reserved power in extremis. In order not to get there, you need some provisions of co-operation between the various regulators. All these regulators operate different types of market and you cannot have the CMA being asked to second-guess them every five minutes.
I am not quite as sanguine as the noble Lords, Lord Bradshaw and Lord Berkeley, are about some of the other regulators. It may all be fine in the railways, although I am not sure that I would agree with that as a consumer and passenger. Certainly, I have had my rows with Ofgem. I am not very happy about Ofwat and some aspects of even Ofcom, which generally speaking is a better regulator. I also had recent experience of the Northern Ireland regulator that regulates the energy industry except for the main supply of energy in the Province, which is the oil industry and definitely needs regulation.
I am not saying that everything in the garden is rosy with these independent regulators as they stand—it definitely is not. They all need to raise their game. But raising the game by having a prospect of an intervention by the Secretary of State and giving all their powers to someone else seems to be overkill. We must have an upfront co-operation and only a very distant reserve power in any alternative clause that the Minister may propose at a later stage. It would be sensible for him to consider mine and other representations that have been made.
The noble Lord, Lord Berkeley, raised a number of concerns, which are very important for the Government to take on board. The threat of this would undermine confidence in the markets. Key investment markets, such as energy, water, aviation, railways, telecoms and so on are key areas where we need to sustain a degree of confidence in the near permanence of the regulatory system.
The relationship between the regulators and the industry is very important. I am not talking about cosy relationships but about known, established and reasonably long-term relationships. The issue of the EU, which my noble friend Lord Berkeley raised, is also important. We need to be careful when we are intervening and what, at the end of the day, would be quite a draconian power.
I hope the Minister will take this away. It is important that we review the performance of regulators. But we should not do that on a case-by-case basis or because of suddenly saying that they are not doing their job 100%. Other forms of review could be built into the regulation—indeed, the Government are doing that in other areas—rather than taking a power that looks at first glance to be a draconian intervention by the Secretary of State.
I am sure that the Government and their Civil Service can come up with a better form of words for dealing with this if they wish to. It may be something that we should leave until much later. But if they intend to do so, I am happy to give my co-operation to them with my experience with regulators, as will my noble friends and the noble Lord, Lord Bradshaw. However, this will not work and it could be quite detrimental.
I am grateful to everyone who has participated. I am sure that we will return to this in some form or other at the next stage. I beg leave to withdraw my amendment.
Lord Whitty
“(1) There shall be established a separate section of the CMA where the CMA acts as an appeal body in respect of decisions of sectoral regulators, and each individual appeal shall be headed by a member of the CMA Board.
(2) ”
Lord Whitty
My Lords, this last amendment—which we will all be grateful about—deals with a separate issue of the relationship between the future CMA and the sector regulators. It is entirely different from the use of competition powers. It deals with the situation of appeals against decisions of the sector regulator to what is now the Competition Commission, which will be the CMA. That is a different function. In effect it is the Competition Commission becoming the CMA and acting as the Court of Appeal.
This role is only briefly recognised in the Bill. It is arguable that such arrangements should not be maintained in the new situation, since it is in effect one regulator second guessing another. Indeed, if the previous amendment stands, the potential conflict of interest in this area is actually quite acute. For the moment, that appeals system remains and is separate from the harmonious relationship that we wish to see on competition matters between the CMA and sector regulators.
These appeals are usually about price control decisions or the costs that are taken into account by regulators in setting the frameworks. Those decisions can be appealed by the industry as with the decisions of Ofwat in its price review, or current decisions by Ofgem in terms of how much it has allowed the National Grid as regards its area investment programme and so forth.
I am not sure whether the statistics will show this but I understand that the number of appeals has increased. That is surprising because there has been a decrease in the direct and specific price control regimes. My experience suggests that of the recent decisions by the Northern Ireland utility regulator, almost all of them are in appeal now or were recently.
I also know that Ofwat’s five-yearly price review is always subject to threats of appeal, although there are relatively few actual appeals. As I say, I know that there now is an issue in relation to National Grid and Ofgem’s decisions, so there are a lot of these about. We have to be clear that the expertise is there in the CMA to deal with them.
Lord Marland
My Lords, let me assure the noble Lord, Lord Whitty, that we totally recognise the need for specialist advice, which already exists in the Competition Commission. The CMA would take that expert body of experience and there is no intention of this being delegated to the staff. The CMA will have independent panellists, who will take on specialist areas, and we will ensure that those panellists take their decisions independently of their parties, of the regulators, of the Government and, indeed, of the CMA board if necessary. They will then deliver their advice to the CMA board, which will make the decision. I believe that this amendment is not necessary and I hope the noble Lord would agree that this deals with his concern. I therefore invite him to withdraw his amendment.
Lord Whitty
My Lords, I appreciate what the Minister says about the panels. I am not sure that I can identify where that is in the Bill, which was one reason for putting this down. In a sense, it is not about whether you leave it to the staff; it is about whether there is within the organisation the expertise—procedural and legal, as well as sector-specific—that is needed to take these appeals.
As this is the last amendment today, I thank the Minister for his patience, as I thank those of your Lordships who have persevered through the whole of this afternoon on this. I hope that we have at least given the Government some thoughts for improving the Bill. There will be a few issues to which we will return. I would welcome it if someone could write to me about where the panels bit is in the Bill and how the CMA is likely to deal with these appeals in future. For the moment, however, a happy Christmas to everybody and I beg leave to withdraw the amendment.
Lord Marland
( ) Omit subsections (1) to (3).
( ) In subsection (4), omit “or subsection (3)(a) above”.
( ) In the heading, for “sections 25 and 31” substitute “section 25”.”
Lord Gardiner of Kimble
My Lords, this may be a convenient moment for the Committee to adjourn until Wednesday 9 January at 3.45 pm.
House of Lords
National Lottery
Lord Naseby
To ask Her Majesty’s Government what action they propose to take to safeguard the position of the National Lottery in the light of competition from groups of local society lotteries.
Viscount Younger of Leckie
The Health Lottery is the most significant scheme that promotes numerous society lotteries under a single banner. Since it was launched in October 2011, the Government have been monitoring its impact on the National Lottery and other society lotteries. While there appears to be a limited impact overall, the Government want to ensure that the lottery market delivers the maximum benefit to charities and other good causes, including those supported by the National Lottery. The Secretary of State for Culture, Media and Sport has therefore announced today the Government’s intention to consult in the new year on whether to increase the minimum percentage of the proceeds that certain society lotteries have to return to their good causes.
Lord Naseby
Is my noble friend aware that when the National Lottery was set up in 1993, 28p in the pound went to good causes and 12p went to the Exchequer as a levy, whereas the Health Lottery provides only up to 20p in prizes and no subvention to the Treasury? Against that background, and with recent calculations that the Health Lottery has siphoned off £70 million that would have gone to the National Lottery, does my noble friend really think that consultation is the right approach? Would it not be preferable to have an amending Bill that re-emphasises that the National Lottery is a monopoly and is there to provide for good causes throughout the nation?
Viscount Younger of Leckie
My Lords, I do not agree with the idea of an amending Bill. Independent research that we commissioned and have published today suggests that there is a potential sales diversion of up to £300,000 a week. Camelot believes that it is potentially up to £1.5 million a week. It is difficult to assess the true figure due to seasonal factors and complexities in customer behaviour. However, an impact at these levels would be relatively minimal, particularly in the context of National Lottery sales, which are on track to beat last year’s record sales figures of £6.5 billion. The Government are determined to ensure that the lottery market delivers the maximum benefit to good causes, which is why we wish to consider whether the minimum amount that society lotteries are required to provide to their good causes is set at the right level.
Lord Collins of Highbury
My Lords, is it not an obvious loophole in the idea of a national monopoly when the Health Lottery’s 51 supposedly separate companies have the same three directors, office addresses and branding? It is in effect enabling it to operate as an alternative national lottery with a £510 million turnover. Is it not time to act now?
Viscount Younger of Leckie
I suggest to the noble Lord that any issues relating to that are for the Gambling Commission. The National Lottery, I remind noble Lords, generated more than £92 billion from its inception in 1994 to mid-November this year. The annual sales figure for the year to April 2012 was £6.5 million, which is the highest since the start of the lottery. Therefore, it is a very successful operation.
Lord Hodgson of Astley Abbotts
Is my noble friend aware that people who give to local lotteries often do so because they wish to support a specific cause and, as such, will not give to a national lottery? In that sense, their contributions are additive. Since the National Lottery grew by 8.1% in the half-year to September—that is £264 million—what does it need protecting from? Would it not be better to let a thousand flowers bloom, encourage localism and not interfere?
Viscount Younger of Leckie
I agree with my noble friend. He gives me an opportunity to say that the Health Lottery has raised more than £28 million for good causes. Its turnover last year was £119 million. Although it has not been long since its inception, it has been highly successful and has benefited more than 30,000 people across Great Britain. Relations have been developed with strategic partners, including the Alzheimer’s Society and the Carers Trust.
Baroness Farrington of Ribbleton
My Lords, can the Minister explain to the House why his answer to the question from my noble friend Lord Collins was “the Gambling Commission” and not “government policy” in determining what should happen?
Viscount Younger of Leckie
I will stick to my original answer: my understanding is that it is up to the Gambling Commission to decide these matters.
Lord Sharkey
But, my Lords, the Gambling Commission itself has recently stated in court proceedings that the Health Lottery was clearly designed to circumvent the proceeds limits, the gambling equivalent of a tax avoidance scheme that exploits loopholes in legislation. Is the Government not about closing such loopholes?
Viscount Younger of Leckie
I thank my noble friend for that question, but the holistic approach to the lottery, which includes the National Lottery and the Health Lottery, has proved highly successful and we hope that it will continue. However, the Government will continue to monitor the progress of the operation, particularly of the Health Lottery and the society lotteries.
Lord Foulkes of Cumnock
Has the Minister estimated how much money is diverted away from the National Lottery by the EuroMillions lottery, and how much of the EuroMillions lottery goes to good causes in the United Kingdom?
Viscount Younger of Leckie
I do not have the answer to the noble Lord’s question but I will certainly get back to him. However, given that the National Lottery does not bite too much into the Health Lottery, I would hazard a guess that EuroMillions does not have too much effect.
Baroness Gardner of Parkes
Can the Minister tell me whether all the money from the Health Lottery really goes to health charities, and can he confirm whether my noble friend Lord Naseby is right that no money goes to the Exchequer? These days, when we are trying to see that money does go to the Exchequer, why is that?
Viscount Younger of Leckie
First, I just wish to clarify that no duty is paid to the Exchequer from the local society lotteries and the Health Lottery. To answer the first question, “Health Lottery” is an over-arching description of 51 other lotteries which focus on a range of good causes, including some health charities.
Lord Taylor of Blackburn
My Lords, does the noble Viscount agree that, in answering the noble Lord, Lord Naseby, he was stretching it a bit too far by saying that the Treasury was a good cause?
Lord Phillips of Sudbury
My Lords, I declare an interest as a member of the National Lotteries Charities Board at its inception. Given the booming income of the National Lottery and other lotteries, has any work been done on the anti-social effects of this huge amount spent by the public?
Viscount Younger of Leckie
I do not believe that there is an anti-social effect. I am not entirely clear what my noble friend is aiming at, but perhaps I can talk to him later.
Mali
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Risby
To ask Her Majesty’s Government what discussions they have had with the Government of Algeria in relation to the situation in Mali.
Lord Wallace of Saltaire
My Lords, the UK has regular and frequent discussions with the Algerian Government on the situation in Mali. My right honourable friend the Foreign Secretary discussed Mali and the Sahel when he met Algeria’s Foreign Minister, Mourad Medelci, in London on 21 November. The Prime Minister’s special representative for the Sahel, Stephen O’Brien, MP, visited Algiers from 6 to 8 December for further discussions on the situation in Mali. Alistair Burt, the FCO Minister for the Middle East and north Africa, also discussed the Sahel with the Algerian Minister for the Overseas Community, Dr Belkacem Sahli, on 29 November.
Lord Risby
My Lords, I declare an interest as the Prime Minister’s trade envoy for Algeria. Given the appalling humanitarian and security crisis in Mali, does my noble friend agree that if at all possible there should be a regional solution to this problem, whether it is done diplomatically or by military means, to resolve what is an increasingly tragic situation? Does my noble friend further agree that, as the bulk of the income obtained by these terrorist fanatics is from the drugs trade and kidnapping, the resolute attitude of the Algerian Government, which is simply not to pay ransoms, should be applauded and appreciated?
Lord Wallace of Saltaire
My Lords, there has to be a regional resolution to this problem. The northern borders of Mali are artificial lines drawn on maps in largely uninhabited areas and these groups clearly go across them with a great deal of ease. The Tuareg, one of the main sets of tribes involved in the conflict, live in southern Algeria, south-western Libya, northern Mali, and so on. Therefore, there has to be a regional solution. This cannot be resolved by one or two states alone.
Lord Chidgey
My Lords, what plans do the Government have to develop stability and security throughout a unitary Mali by advocating that the grievances of the Tuareg should be addressed en route to a democratic unified Mali and by providing succour to the probably 400,000 refugees expected to result from a proposed military intervention by ECOWAS forces?
Lord Wallace of Saltaire
My Lords, the figures I have show that there is something approaching that number of displaced people—those who are internally displaced or who have moved across the borders already. Therefore, we already have a rather desperate situation. Reinstating a unified Mali is not entirely easy. Mali armed forces as they currently exist are small, weak and underequipped. Nevertheless, some of them are in effect in charge of the Government and have just replaced the Prime Minister.
The Earl of Sandwich
Does the Minister agree that there are considerable British interests in Mali, not least through the humanitarian organisations? Would it not be better to encourage and reinforce civil society and better governance in Mali itself rather than even contemplating armed intervention?
Lord Wallace of Saltaire
My Lords, the noble Earl knows well that encouraging the growth of civil society is a slow and long-term business. We have a rather immediate crisis which, if I may remind noble Lords, is partly an unanticipated result of the collapse of the Gaddafi regime. Many of those who sparked off the current crisis were Tuareg soldiers in the Libyan army returning from Libya after the fall of Gaddafi with some very effective heavy weapons.
Syria: Humanitarian Aid
(12 years ago)
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Lord Selkirk of Douglas
To ask Her Majesty’s Government whether they have plans to reorder priorities in the humanitarian aid programmes of the United Kingdom and the European Union, in view of the number of refugees in Turkey, Jordan and other countries bordering Syria, and displaced persons within Syria.
Baroness Northover
My Lords, the UK is a leading donor to the humanitarian response for Syria. We have provided £53.5 million in support, and we continue to consider what more we can do. UK aid is prioritised to ensure that help reaches those who need it most. We are working closely with our humanitarian partners to provide a flexible, co-ordinated relief effort.
Lord Selkirk of Douglas
I thank the Minister for her reply. Will she promise to keep in mind the more than 525,000 refugees, whose number increases daily by 3,000, more than three-quarters of whom are children and women, and who are suffering from freezing winter weather, inadequate clothing, some of them on near-starvation rations, and most of them facing the constant threat of sickness and disease? Can she definitely confirm that every effort will be made to increase humanitarian aid through the UN and relief agencies in the face of this escalating crisis and the urgent needs of the refugees?
Baroness Northover
My Lords, I can assure my noble friend that the dire situation in Syria is very much in our minds. The United Kingdom is a major donor in this situation. I imagine that he is aware that the United Nations will issue a revised appeal tomorrow for further support. One of the problems here is that the UN appeals so far are severely underfunded. However, the United Kingdom is well aware of the significance of this crisis and, as I say, is a major contributor.
Lord Wright of Richmond
My Lords, is the Minister aware of recent press reports that armed gangs have been thieving aid and donations from displaced Syrians in Syria and Turkey? Does she agree that this makes it all the more important that all our aid, from HMG and the European Union, should be channelled through the international agencies? Does she accept that there is a potential contradiction between exploring all options to help the Syrian Opposition and—to quote from the Prime Minister’s Statement yesterday—giving further,
“support for the protection of civilians”,
many of whom are subject to discrimination and worse from elements within the Opposition and at least two of whom are now officially classified as terrorists by the United States Government?
Baroness Northover
The noble Lord will be well aware from experience how difficult it is to work in Syria at the moment. We pay tribute to those who are doing so. We note, for example, that the UN has had to pull back a number of its workers from Damascus. We are aware of challenges and, as he says, it is extremely important to work through the international organisations which are best placed to get in the aid that is required. We are assisting, in terms of peace-building, training and so on, the National Coalition for the Syrian Revolution and Opposition Forces but we are aware of how diverse the members of that group are. We are emphasising that they should work together inclusively for the benefit of all the people of Syria but we are aware of the challenges there too.
Baroness Uddin
My Lords, is the noble Baroness aware that recently His Majesty the King Abdullah was in Parliament and that he briefed a number of Members across both Houses? He echoed much of what the noble Lord, Lord Selkirk, has said about the need for emergency relief and support to continue. Will the Minister assure the House that a quick response will be made to aid particularly the Jordanians? What timeframe is she looking at to ensure that refugees receive the maximum amount of support? Furthermore—
Baroness Uddin
Will she also say what support is being provided by the other Arab Governments in partnership with our Government?
Baroness Northover
The noble Baroness is right about the contribution by Jordan and the other neighbours. The other day I met King Abdullah’s uncle, Prince Hassan, who made the same point. Jordan is receiving £11 million from us to support the refugees. We pay tribute to the countries around in that regard. In terms of the other donors, the Arab League is the fourth-largest donor in the region; the United Kingdom is the sixth.
The Lord Bishop of Exeter
My Lords, the latest UNHCR refugee figures, as quoted by the noble Lord, Lord Selkirk, truly are shocking. They reflect the protracted brutality of the ongoing conflict. Will the Minister give an assurance that within the generous and strategic response to the humanitarian situation on Syria’s borders, adequate provision is being given to those refugees who are survivors of sexual and gender-based violence? Will she also say what is being done to document these abuses in order that in due course the perpetrators are brought to justice?
Baroness Northover
The right reverend Prelate makes an important point. One of the striking things about this conflict, as in other cases, is the large amount of sexual violence, which is widespread and systematic. We hear reports of sexual abuse and domestic violence, and also of young girls being forced into early marriage among the refugees. Therefore we are extremely concerned.
We are providing clinical care and counselling for 12,000 Syrian refugees in Jordan who have experienced such trauma and sexual assault. I note the point about making sure that this is documented. It has struck me that this is better documented than may have been the case in the past but we still have a long way to go in terms of recognising the significance of this.
Baroness Hussein-Ece
My Lords, my noble friend will be aware that Turkey is shouldering the cost of the humanitarian aid for people from Syria crossing over its borders. They are currently accommodating 138,000 refugees in 14 camps at a cost so far of $500 million and rising. So, in the absence of any peace deal, what steps is the United Kingdom taking to lead international efforts to increase aid and support to Turkey, and what proportion of the figure she quoted earlier is going to Turkey?
Baroness Northover
We certainly commend Turkey’s extraordinary hospitality in looking after the Syrian refugees who are crossing their border. As I mentioned, the UK is providing £24 million in humanitarian aid. Overall, we are providing £53.5 million in response to the crisis; £29.5 million is going to those inside Syria; £24 million is going to the refugees outside, of which £3 million is supporting refugees in Turkey.
We are working with the international community, which is focused on supporting the neighbouring countries, and we will keep this under constant review.
Baroness Symons of Vernham Dean
My Lords, may I press the noble Baroness further about the situation in Jordan? When he was in this country last week, the King of Jordan stressed the urgency of the situation in a very small country which has few natural resources of its own. It also has a further refugee problem with the Palestinians.
To echo the question specifically in relation to Jordan, what proportion of the money we are giving is going to Jordan, and is the Minister satisfied that that money is getting there fast enough to help an urgent position on the ground?
Baroness Northover
The noble Baroness is right about the significance of Jordan. Jordan has hosted many Palestinian refugees and they are supported by UNRRA. The United Kingdom has increased their contribution to support those Palestinian refugees.
Of the £24 million from the United Kingdom that I mentioned, which is supporting refugees generally, £11 million is going to Jordan. The international community and the noble Baroness, Lady Amos, who is UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, are constantly monitoring where the need is greatest. The problem is not so much what the United Kingdom is doing, but making sure that other countries step up to the mark and contribute as well.
Banks: Money-laundering
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Crosby
To ask Her Majesty’s Government whether they are satisfied that sufficient steps have been taken to prevent money-laundering by United Kingdom banks.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the UK is internationally recognised as having one of the most robust anti-money-laundering regimes in the world. However, no Government should ever be satisfied that sufficient steps have been taken to prevent money-laundering by those who handle money in the UK. It is an ongoing multi-billion pound threat to the financial system. However, the Financial Services Authority is taking an increasingly robust approach to supervision, demonstrated by recent enforcement actions against banks and their staff.
Baroness Williams of Crosby
I thank the Minister for that reply but last year alone the amount of fines paid to the United States regulatory authority from British banks alone came to no less than £6.4 billion, in comparison to the amount paid to the Financial Services Authority from the same banks, which came to £140 million. The discrepancy is clear.
These were not minor crimes. They included not only money-laundering but fixing the LIBOR rate, breaking the sanctions regimes against Iran and other countries and, not least, money-laundering that included drugs cartels in Mexico and Colombia. Does the noble Lord therefore agree with Andrew Bailey, the CEO of the prudential authority that is shortly to be established, that it is impossible to prosecute major banks on grounds of confidence? Does he take that view or the view that I hold, which is that unless we prosecute major banks that commit crimes of this kind, we will find ourselves with a City that no longer has its traditional reputation for integrity and fair dealing, which is absolutely crucial to its future and which many of us recognise must be re-established, if necessary with radical measures?
Lord Sassoon
My Lords, I agree with the numbers that my noble friend shared with us. However, the traditional approaches in the UK and US towards fines have been very different. I believe that my noble friend’s numbers go wider than the narrow question of money-laundering. As I said, the FSA has levied much larger fines in recent years. Prosecutions are, of course, possible and should be pursued where appropriate, whether against bank staff or potentially against the banks. However, Mr Bailey is also correct that there are circumstances in which the prosecution of a bank could have the consequence of putting the future of that bank in jeopardy. Therefore, considerations may arise in extreme cases regarding the stability of the system if a major bank was closed down. Those considerations have to be taken into account.
Lord Hylton
My Lords, does the Minister accept that the present British regime causes unintended consequences for legitimate people opening bank accounts, for example, for perfectly bona fide reasons?
Lord Sassoon
My Lords, I certainly accept that there is unfinished business to be done around the whole “know your customer” and opening bank accounts regime. Many of us know what difficulty that causes, whether on our own account or on that of our children. This is something that we discussed during the passage of the Financial Services Bill. It is interesting that some banks require less detail and paperwork than others. I wish they would all make this process as easy as possible for their customers, consistent with the regulations that apply.
Lord Oakeshott of Seagrove Bay
My Lords, on that topic, I wonder whether the noble Lord and other noble Lords bank with HSBC. I have done so for the past 30 years. Last week I was rather surprised to be asked by bank staff to show them my passport and a utility bill. I am not sure whether noble Lords realise but we are all politically exposed persons in regulator-speak; some of us may be more so than others. But, honestly, is this not mindless box-ticking? Do they really need to check our passports to know the difference between a British baron and a Mexican drugs baron? Is not the reality that these monster banks such as HSBC and RBS are, as the Minister touched on, frankly, not just too big to fail but too big to regulate and too big for any single board to control?
Lord Sassoon
My Lords, on the first of my noble friend’s points, I certainly agree that the banks need to get much more intelligent about this matter. I have met in the Treasury senior bankers on the retail or wealth management side of these banks to make precisely my noble friend’s point: namely, that they need to be intelligent about this matter. This must not be a box-ticking exercise. I have made the same point to the chairman of the FSA. My noble friend raises a very important point.
Lord Eatwell
My Lords, I believe that this is the last time the noble Lord will appear at the Dispatch Box in his current position. I am sure that the whole House wishes him well in his future endeavours.
Turning to the Question, the FSA rulebook states that the chief executive function is the function of,
“having the responsibility … for the conduct of the whole of the business”.
Indeed, the notion of chief executive responsibility is at the heart of the FSA’s regulatory philosophy. While I understand the concept of the independence of the FSA, given that it has been established that HSBC has committed very serious money-laundering offences, would the noble Lord expect the FSA to implement its own rulebook and would he therefore expect it to take enforcement action against the relevant chief executive of HSBC?
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Eatwell, for his kind words, but I regret to say that the House may have me at the Dispatch Box again for the Topical Question tomorrow, unless I can persuade a colleague to take it from me. As for HSBC, the FSA will do what it should as the independent regulator in this area. However, it is important that the FSA has agreed a series of additional measures with the HSBC board, including establishing a committee of the main board of the bank with a mandate to oversee matters relating to anti-money-laundering, reviewing relevant group policies, appointing a group level money-laundering reporting officer and having an independent monitor in place to look at the bank’s compliance across the group with UK anti-money-laundering regimes. The FSA has agreed a tough series of measures with HSBC right across the group.
Growth and Infrastructure Bill
Prevention of Social Housing Fraud Bill
Baroness Eaton
My Lords, I understand that no amendments to this Bill have been set down and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Crime and Courts Bill [HL]
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:17 - Division on Amendment 2 - Ayes: 233 / Noes: 191 - Amendment 2 agreed.
18:32 - Division on Amendment 9 - Ayes: 187 / Noes: 159 - Amendment 9 agreed.
Lord Avebury
“Immigration appeals: asylum and humanitarian protection
(1) Section 83 of the Nationality, Immigration and Asylum Act 2002 is amended as follows.
(2) In subsection (1)(b) omit the words “Kingdom” to the end and insert “, and—
(a) the leave has been granted for a period exceeding one year (or periods exceeding one year in aggregate); or(b) the person is under 18 years of age at the time of the grant of leave; or(c) there are reasonable grounds to believe that the person is a victim of human trafficking.”
Lord Avebury
My Lords, this amendment provides that an appeal against a refusal of asylum by someone who has been granted leave to enter for a year or less can be exercised by a child or trafficked person. On Report a similar amendment to remove restriction in all cases was considered. The Minister complained that this was too wide, because it would have afforded a right of appeal to people other than children and trafficked persons. I have therefore confined this amendment to those classes of persons in the hope that a more restricted version of the amendment may prove acceptable to the Government.
Children and trafficked persons who are refugees are entitled to recognition as such, and to enjoy the rights and entitlements of refugees, including for example higher education at home student rates, a travel document and family reunion, and obviously to the security that that recognition brings. The law should not take them to the brink of removal before they can assert their rights to recognition. The Minister suggested that the delay imposed on these children’s applications for asylum was not unreasonable because they were close to adulthood. Actually, time and again the courts have ruled that adulthood is not a moment of sudden transition at which the risks to which children are exposed suddenly disappear. Lord Justice Maurice Kay summarised the authority in a recent case, KA (Afghanistan), when he stated that,
“it does not matter that the appellants are now over 18 because ‘there is no temporal bright line across which the risks to and the needs of the child suddenly disappear’. The line of authority which is said to support this analysis includes”—
and here the judge rattled off a list which I will not bore your Lordships by repeating.
My noble friend kindly wrote to me on 20 November, saying that the amendment would lead to costly multiple appeals. This is, in fact, not the case. Those who appeal and are recognised as refugees will obviously not need a further appeal. The only persons who would have more than one appeal are those whose applications are rejected, who then lose the appeal against refusal, and who the Home Office decides to remove. They would then have a right of appeal against removal, as would anyone else facing that decision. The appeal would, no doubt, rest to a large extent on evidence from the earlier appeal on both sides, and therefore the costs are not likely to be large.
I am not sure where my noble friend gets his idea of multiple fruitless appeals from, and his suggestion that my original amendment would have resulted in significant cost to the taxpayer was not accurate. This amendment is even less open to that criticism, and the limited costs that it entails must be set against the failure to respect the rights of refugees who are denied protection for a year. I ask my noble friend whether the Government have sought the views of the UNHCR on this matter and, if not, whether they will do so and circulate the answer in time for those views to be considered when the Bill is debated in another place.
When the Government ratified the Council of Europe Convention on Action against Trafficking in Human Beings, the Immigration Law Practitioners’ Association tried to persuade them to grant trafficked persons leave to remain for a year and a day in order to avoid this problem. The request was refused, and if the Home Office was concerned that it would have meant a handful of people aged 16 years and nine months getting three months’ more leave than they would otherwise have done, the amendment offers an alternative, whereby the Home Office can grant the period of leave that it chooses but an appeal against refusal of asylum can still take place.
I turn to the second amendment in the group. There were some misunderstandings in the debate on this proposed new clause on Report, and it is in the hope of clearing them up that I ask your Lordships to spend a moment or two once again considering an amendment similar to one I moved previously, which recognises the true circumstances in which the clause is intended to be used. The Minister said that,
“it may be that the conduct that leads to the Home Secretary making this decision takes place while this individual is abroad. I think the notion that this is a premeditated trap is false. It is more to do with the possibility that the individual, while abroad, makes contact with someone, or evidence comes to light as to their true intent, or what they might do when they return to this country becomes apparent, and the Home Secretary wishes to deal with the problem”.—[Official Report, 12/12/12; col. 1103.]
He was speculating, but what he described is contrary to stated Home Office policy. I am reliably informed that this policy is to wait until a person is outside the country to deprive them of leave to remain. This has been repeatedly confirmed in meetings with the Immigration Law Practitioners’ Association and, indeed, at the semi-public ILPA annual general meeting, which was attended by some 100 members on 27 November 2010. On that occasion, the statement was made by Tony Dalton MBE, then assistant director and chief case worker at the nationality and European casework department of the UKBA. ILPA tells me that it is not aware of any case in which some intervening act has prompted the deprivation. That is not to say that it has never happened, but it is certainly not the norm. In many cases, the deprivation notice is served immediately after the person has left the country. There is simply no time for new evidence to come to light or for the person to have done anything that would make him subject to the notice.
ILPA dealt in detail with this in its evidence to the Joint Committee on Human Rights inquiry into extradition policy in January 2011. Subsequent to that, there was the decision of Mr Justice Mitting, sitting in the Special Immigration Appeals Commission in the case of L1, where the matter at stake was deprivation of citizenship. In paragraph 12(i) of his ruling, the judge said:
“The Secretary of State’s decision to deprive the Appellant of his citizenship was one which had clearly been contemplated before it was taken. The natural inference, which we draw, from the events described, is that she waited until he had left the United Kingdom before setting the process in train”.
The Minister may also have unintentionally misled the House when he said in reply to the noble and learned Lord, Lord Woolf—also in column 1103—that exclusion while a person is out of the country has been part of the immigration process for a substantial period. It was indeed at one time, until it was declared unlawful on 16 January 2012 as a matter of statutory construction in the case of MK, as discussed in the Immigration Law Practitioners’ Association’s evidence on extradition to the Joint Committee on Human Rights. If it is done at the moment then the law is being broken.
Lord Elton
My Lords, forgive me. I want to make, not a pre-emptive remark, but an introductory one. I apologise to your Lordships for intruding on your discussions on this particular amendment, but I am very surprised by the form and volume of the Marshalled List at Third Reading. Having been here for 39 years I do not recall there being anything like this in the past. I draw your Lordships’ attention to paragraph 8.142 of the Companion, and suggest that this is a matter to be considered by the Procedure Committee before we continue in the next Session.
Lord Pannick
My Lords, I understand that Amendment 5, to which I wish I speak, arises in particular out of concern that the House may unintentionally have been misled on Report. I support the noble Lord, Lord Avebury, on Amendment 5. I fully understand the argument deployed by the Government on Report—it would be absurd to allow a person regarded as dangerous back into the country in order to pursue an appeal. My concern is that legal practitioners understand the policy of the Home Office to be to wait until a person with leave to remain travels abroad before then making the decision to curtail their leave, with the express intention of depriving them of the right of appeal from within the United Kingdom. That seems to be difficult to reconcile with the rule of law. I ask the Minister in his response to Amendment 5 at least to give the House an assurance that decisions to curtail leave to remain will not be deliberately delayed until a person travels abroad, with the intention of depriving them of a right of appeal from within this country.
Baroness Butler-Sloss
My Lords, I declare an interest as co-chair of the human trafficking parliamentary group. If there are reasonable grounds for someone being understood to be a victim of trafficking, it would be extraordinarily unjust and contrary both to the Council of Europe’s convention and the directive of the European Union, to both of which the Government are signatories, to treat that victim in the way that it is possible that he or she would be treated if the amendment were not passed.
The Earl of Listowel
My Lords, I would be most grateful if the Minister could clarify the position, raised by the noble Lord, Lord Avebury, regarding this sudden moment of transition at the age of 18. I would appreciate him reassuring the House that the Government do not consider there to be a single cut-off immediately after the child moves past the age of 18 but that there is humane consideration of a young person’s need for a transition into adulthood. With young people who have been traumatised—for instance, those who have been trafficked—one sees that their development may well be delayed and one has to allow for that. In the Children (Leaving Care) Act, we see special consideration being given to their needs, because of their early trauma, up to the age of 21 and, in some cases, until the age of 25. We need to pay attention to the developmental needs of children and to recognise that some children, particularly those who have been traumatised in their early life, need more care and attention as they make that transition into adulthood.
Baroness Smith of Basildon
My Lords, I see that the Minister is eager to respond, which I can well understand. I do not intend to detain the House; the noble Lords, Lord Avebury and Lord Pannick, the noble Earl, Lord Listowel, and the noble and learned Baroness, Lady Butler-Sloss, have made some powerful points. There were some important questions there, particularly regarding the policy of the Home Office, to which it would be helpful if the Minister is able to respond.
On the point made by the noble Lord, Lord Elton, an unusually large number of amendments are before your Lordships’ House today for a Third Reading. I do not recall seeing as many in my time in this House or in the other place. I can see Ministers nodding in agreement. Perhaps they could consider whether the Bill’s needing considerable discussion has something to do with its inadequacy when it was first presented to your Lordships' House. Noble Lords have made great efforts, particularly where they have supported the Government’s policies in principle, to look at the detail. However, in many cases—and perhaps understandably given that three completely new sections of the Bill were not envisaged when the timetable was set, and given the changes of Ministers and changes of policy that we have seen—it has been very difficult.
I appreciate that time is limited today, and I do take issue with the scheduling. We have three important debates with a large number of speakers tonight, and it will be difficult to complete the business within the rules of the Companion, to which the noble Lord, Lord Elton, was right to draw the House’s attention, so I do not wish to repeat the comments that have been made. However, there are some important questions here.
I raised some questions on Report which came back to the issue of public safety. As the noble Lord, Lord Pannick, pointed out, people understand, and I think that the House understands, why if somebody is a danger to the public they should not have leave to remain. The question is about the process and why somebody becomes a danger to the public when they leave the country, as the noble Lord said, but not when they are in the country. There is an issue of process here and it would be helpful if the Minister were able to address those points. However, noble Lords who have already spoken, including the noble Lord, Lord Avebury, have raised and done justice to the issues, so I do not intend to repeat them, but I would be very interested in the Minister’s response.
Lord Elton
Before the noble Baroness sits down, I should say that the Clerk of the Parliaments has kindly pointed out that I should have been looking at paragraph 8.143, not 8.142; therefore what we are doing is in order, but is far in advance of anything I remember in my earlier years. However, things do move on.
Baroness Smith of Basildon
I readily concede the noble Lord’s encyclopaedic knowledge of the Companion, but I think the reasons why the amendments have been brought forward today are very good. However, it is unusual, and perhaps it would have been better to have had longer discussions about some of these issues, and to have had responses that satisfied the House earlier in the Bill’s proceedings.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I am sorry if my responses on Report failed to satisfy the House; I hope that I can satisfy it today. I understand that the scheduling of today’s business was agreed through the usual channels, and nobody has a more vested interest in the speedy resolution of business than I do, as I believe I will be the last speaker on today’s business.
My noble friend quite rightly pointed out that his amendments are similar to those which he tabled on Report. I explained then that our principal reasons for resisting the first amendment were the detrimental impact on the statutory appeals framework, and the increased number of appeals and costs that would result. Although this amendment is framed more tightly and specifically, the same detrimental impact will result from it. While I recognise the intention of the amendment is to reduce the delay in bringing an appeal for children and trafficked persons, the consequences for the appeals framework are not justified.
Only a minority of unaccompanied children who claim asylum are affected by this policy in the way described by my noble friend Lord Avebury. It affects only those who are older than 16 and a half when refused asylum but granted some other form of leave. 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. As I said last time, this delay is not unreasonable.
I say to the noble Earl, Lord Listowel, that the age of 18 is a statutory boundary between childhood and adulthood, and Governments have to live within the constraints of that. It is important to recognise that in all cases, before a child or trafficked person is removed from the UK, they will be entitled to a right of appeal. That is part of the process.
The Government’s policy ensures that individuals do not have multiple appeal rights over a brief period of time, possibly raising the same arguments on each occasion as matters may not have evolved since their last appeal. The amendment would undermine this key principle of the Secretary of State’s asylum appeals framework.
I turn now to Amendment 5, which my noble friend has also brought back. As I set out previously, the individuals we are seeking to capture in this clause are those excluded by the Secretary of State—that is to say, they are individuals who pose the highest threat to the public, be it for engagement in terrorism, serious criminality or unacceptable behaviour. It is therefore only right that an appeal against the cancellation of leave decision that accompanied the Secretary of State’s decision to exclude takes place from outside of the United Kingdom.
To be absolutely clear—I do not want noble Lords to feel that I am seeking to mislead them in any way—and as has been raised in previous debates, there is no policy of waiting for an individual to leave the United Kingdom before excluding them. Indeed, a series of deportation orders in cases in respect of national security activity are ongoing at the moment. However, in many of these cases we are talking about a situation where an individual leaves the United Kingdom for a period of time to meet with like-minded individuals and potentially to acquire new skills which, if utilised back in the United Kingdom, can pose a significant and serious threat to the population as a whole. That is why in such cases, having seen the intent of their activities while abroad, the Secretary of State takes the decision to exclude on the grounds of non-conduciveness. It would be a highly risky strategy to allow such individuals simply to come back to the United Kingdom and to exercise a right of appeal. It would also undermine a crucial disruption tool used for the protection of the general public.
Lord Avebury
My Lords, I am most grateful for the renewed support of the noble Lord, Lord Pannick, the noble and learned Baroness, Lady Butler-Sloss, the noble Earl, Lord Listowel, and the noble Baroness, Lady Smith of Basildon. What they have said demonstrates that there is still serious concern across the Floor of the House with regard to both these amendments, particularly in the case of the noble Earl, Lord Listowel, on the rights of the child, which are being jeopardised by the current system. There is a serious question as to whether the system we have now is compatible with our signature to the UN Convention on the Rights of the Child. However, both that and concerns about the right of appeal only from abroad may have to wait for further consideration in another place, where I hope that these issues will be picked up. I honestly do not think that my noble friend, although he has tried hard, has given us satisfactory answers to many of the points that have been raised. I mention in particular whether the Home Office has a policy of lying in wait. I cited the detailed evidence which has been—
Lord Taylor of Holbeach
I am sorry but I did make it patently clear that there is no policy of waiting for people to leave the country before taking these proceedings. That is a matter of fact. I did answer the question.
Lord Avebury
I know that my noble friend said that, but he did not respond to the point I made about the evidence which has been provided for us by the Immigration Law Practitioners’ Association. It says that in many cases the notice is served the day after a person has left the country and that the policy was acknowledged by a senior UKBA official when the matter was addressed at the ILPA AGM in front of 100 people in November 2010. My noble friend did not deny that that evidence existed, nor did he attempt to refute it. If he had said that in the cases where a person’s presence was deemed to be “non-conducive to the public good” the Home Office would not wait until somebody went abroad for a short period, I would have been far happier. The case that he described—where someone is known to be departing from the United Kingdom with the intention of plotting with like-minded individuals abroad to commit or plan further offences against our laws—is, again, hypothetical, but the existence of the suspicions could have enabled the Secretary of State to serve that person with a notice before he left the country. Therefore, there was an element of premeditation in the way that the Secretary of State exercised her powers in the particular case that my noble friend described.
I do not think that we are going to get any further with this matter this afternoon. I shall have to leave it for our colleagues in another place to renew the discussions on both these amendments, as I hope they will. In the mean time, I beg leave to withdraw the amendment.
Baroness Meacher
“Enforcement services
(1) The Legal Services Act 2007 is amended as follows.
(2) After section 125 insert—
“125A Extension of Part 6 to enforcement services
(1) For the purposes of this Part (and sections 1, 21 and 27 as they apply in relation to this Part)—
(a) the Bailiffs and Enforcement Agents Council is to be treated as an approved regulator;(b) enforcement services are to be treated as a reserved legal activity;(c) a person authorised under sections 63 and 64 of the Tribunals Courts and Enforcement Act services is to be treated as an authorised person in relation to that activity;(d) the Bailiffs and Enforcement Agents Council is to be treated as a relevant authorising body in relation to such a person, and(e) regulations under the Tribunals Courts and Enforcement Act 2007 and the National Standards for Enforcement Agents are to be treated as regulatory arrangements of the Bailiffs and Enforcement Agents Council as an approved regulator.(2) For the purposes of sections 112 and 145 (as extended by this section), a person authorised under sections 63 and 64 of the Tribunals Courts and Enforcement Act is to be treated as a “relevant authorised person” in relation to the Regulator.””
Baroness Meacher
My Lords, Amendment 2 seeks to provide some protection for vulnerable people who have suffered unacceptably at the hands of a bailiff. The amendment provides complainants with access to the Legal Ombudsman if the internal complaints processes fail to resolve a dispute. I should make it clear that the Legal Ombudsman is able and willing to take on this role, which would be quite compatible with other work that the ombudsman is already doing or is shortly to take on.
On Report, I moved a much more ambitious amendment that would have introduced independent regulation of bailiffs. This amendment is just one small element of such a system, but a very important one. In the health service, which I know, the independent health ombudsman is crucial in ensuring that lessons are learnt from complaints and that the quality of service improves. This is what an independent appeals process is all about—improving the quality of service and stamping out bad practice. Nowhere is this more important than in the debt collection field.
As we know, the job of a bailiff is intensely difficult. Extracting money or goods from a person who, for whatever reason, has fallen into debt is almost inevitably confrontational. Very many of those people will be vulnerable, and that is really my point. They may be disabled or mentally ill, or they may be mothers with young children or elderly people with failing memories or full-scale dementia.
We also know that hundreds of thousands of households could be confronted by bailiffs for the very first time when further cuts and caps are applied to the welfare benefits system at the end of March next year. Households affected by the housing benefit cap, the overall benefits cap and a council tax of 20%, which will be new to them, and who cannot move into smaller accommodation or into a cheaper area may find their income after paying rent very substantially lower than anything that they are used to. If a family cares for a relative nearby or their property has been adapted for a disabled child, it will be impractical to move.
Your Lordships know very well the problems that families will face next year. Many will be unable to eat and to keep warm. I make this point only because these families, with their inevitable debts, will be in a completely new situation. They will not have confronted this situation before, and it will be a deeply shocking experience. The bailiffs who come to their doors demanding payment will inevitably include those who are by nature aggressive and who may have limited communication skills and little, if any, empathy for vulnerable people.
Citizens Advice says that it dealt with 24,700 problems relating to private bailiffs last year, including forcing entry to a home—knocking the door down—seizure of exempt goods that they should not have seized, harassment and intimidation. These numbers will soar next year. To make matters worse, there are particular reasons why bailiffs are more likely to make mistakes than other operatives or professions, including the archaic legislation and case law, going back to the Middle Ages, and the plethora of different legislation applying to different debts. Having made a mistake, bailiffs are much more likely to become aggressive.
The case for oversight of the bailiff industry and for a grievance procedure delivered independently from bailiff firms has been accepted by previous Conservative and Labour Governments. Only an independent complaints ombudsman can deliver redress in a way that is consistent with principles of administrative justice, award financial restitution where appropriate, publish data on good and bad practice and, most importantly, make recommendations for improvements.
The coalition agreement identified that there is a serious problem with bailiffs acting aggressively and that vulnerable debtors need protection from that. I thank the Minister, the noble Lord, Lord McNally, for a helpful and, in some ways, positive discussion yesterday and for his follow-up letter. In that letter—I hope he will not mind my quoting it—he said:
“We recognise that this is a widespread problem. We understand that the actions taken by many bailiffs can be, at best, deliberately belligerent and, at worst, aggressive or threatening”.
Furthermore, the Minister agrees with us that the people affected,
“will often be the most vulnerable in society”.
He adds:
“We cannot allow them to be subject to bullying behaviour by bailiffs and are committed to taking action to prevent this”.
The noble Lord, Lord McNally, also refers to the despicable behaviour that some debtors have had to endure. I myself could not express more strongly the reasons for this amendment.
When we have independent regulators for most, if not all, the professions where practitioners are highly educated, talented and carefully selected to ensure that their personalities are just as they should be for the job, how can any Government reject the proposal for part of a regulatory function—an independent appeal process—for bailiffs? The Minister explained that they need to take more time to decide how best to protect vulnerable people. However, I do not believe that the decision, in principle, that an independent appeals process is justified requires any more time. The proposal has been considered for more than 20 years. The Government themselves have spent seven months looking at these issues and want to pass this legislation while they continue deliberating on how and to what extent they will protect vulnerable people from abuse by bailiffs. The Government should have clarified the minimalist system that I believe they plan to put in place before bringing forward this legislation. I do not think that it is acceptable to bring forward the legislation before we know what the Government plan to do.
I now understand that an independent appeals process could be introduced by regulations, but there is no assurance at all that the Government will introduce an independent appeals process. Without this amendment, nothing in this legislation will ensure that that is done. I regard this as the absolute minimum required to begin a process of improving the quality of service of bailiffs. If the Minister feels unable to agree the detail of this amendment but will make a commitment on the Floor of the House that an independent appeals process will be introduced to cover bailiffs, I shall be content to withdraw the amendment. However, if the Government can tell us only that they will do their best, then I believe we owe it to the many harassed, abused and terrified vulnerable people to seek to pass this amendment. I await the Minister’s reply and beg to move.
Lord Lucas
My Lords, I should declare an interest as chair of the Enforcement Law Reform Group. As such, I count many bailiffs among my acquaintances—and do not know one who would not support this amendment. Everybody in the bailiff industry, from those who have spent a lifetime in it to the most vocal advocates of the poor, wants regulation and a complaints system. This has been an active subject in government since 1980. We have had several times when action has been promised and no times when action has resulted. It is high time that the Government did something. The previous Minister in charge of this promised that he would do something, and it was delayed and delayed. We have a new Minister in charge and again we are promised that something will happen, but nothing substantial has come forward. It is time we had action. It is no bad thing that we in this House should pass an amendment signalling just how seriously we regard this constant delay. It is very important that whatever we do about regulation, we have an appeals process: some way in which bad behaviour can be brought to book and in which complaints can be heard.
There are pros and cons of doing it in any particular direction. I have had very good experiences with ombudsmen—not in this area, but others; it is a system that works well. But it is not good enough to have no appeals process. Having done bailiff regulation in whatever way the Government propose to do it, we cannot even think of not having a serious system of appeal and for dealing with bad practice. Without it, the bad practice will not disappear. The serious members of the bailiff profession very much want it to, but they need the Government’s help. The Government have set up a system of remuneration for bailiffs which invites bad practice, because it makes it uncommercial and uncompetitive to behave according to the rules. Under those circumstances one should not be surprised that things get pushed a bit. Proposals and studies on the proper system of remuneration for bailiffs have been around for a long time; we have not yet seen them implemented. The Government ought to make progress, and I should be delighted if the Minister would give a firm promise on this to prevent the noble Baroness pressing her amendment. However, if she does press it, and if I am unhappy with what the Minister says, I shall be in the Lobby with her.
Lord Kirkwood of Kirkhope
I follow my noble friend Lord Lucas and concur with what he and the noble Baroness, Lady Meacher, said. The House owes her a debt of gratitude for pursuing this matter to Third Reading. After these proceedings the House has many important duties and discussions, so I want to be brief. I concur with everything said by the noble Baroness, Lady Meacher. However, unusually for me given the context of the discussion, I want to ask my noble friend on the Front Bench a party-political question. It is a very simple one. The governing coalition agreement makes specific reference to more protection against aggressive bailiffs; that is what we as a coalition Government in 2010 undertook to do. Can the Minister assure me that in 2015, when the coalition agreement runs its course, he will be able to provide me with an answer to the question, “What additional protection against aggressive bailiffs have we as a junior coalition partner been able to provide?”? That is a very important question and I am certain that it will be asked.
That is the first point I want to make. The second point is that time is now running out; I know this as well as the noble Baroness, Lady Meacher. April 2013 is not a cliff edge that will suddenly cause an explosion of debt-enforcement proceedings. However, that date marks a significant change to the risks faced by low-income households against a very difficult financial background, which we all know about. It is not safe to leave in place the current inadequate proceedings—the framework within which debt enforcement is conducted—against the background of what we all hope will be a short-term period of financial distress. These low-income families have nowhere else to go. They are, by definition, the most vulnerable people in the country. Sometimes their heritable property and homes are at stake, so the stakes for them could not be higher. It is therefore essential that we do everything in our power to make sure that the rules are observed.
No one is suggesting that debt enforcement cannot be pursued. That would be quite wrong. There is no party politics in this, and I am not making a party-political complaint, but the department has been sitting on this for far too long. Speaking for myself, if the Minister is not able to give the noble Baroness, Lady Meacher, her amendment as stated, I want to know how long it will take for him to bring about the change that the amendment requests. I know the Minister very well, and I know that he takes these issues seriously. I know that he has strength as a political operator and a huge amount of experience. I do not believe that it is impossible for someone of his stature to go back to the department and say, “You have a maximum of 12 months to sort this out, otherwise my reputation as a Minister will come under attack”. That is all he needs to do because if I was his senior adviser on this matter and he raised an eyebrow and uttered sentences of that kind, I would not think twice about trying to sort the problem. Time is not on our side.
People get touched by debt-enforcement proceedings after they have had personal experience. I know this because when I was fledgling provincial solicitor I used to instruct sheriff officers who were subject to the control of the sheriff. Any sheriff officer who got on the wrong side of the rules in front of Sheriff James Patterson in Jedburgh Court got a dose of Jedburgh justice himself. As a solicitor for organisations such as the then South of Scotland Electricity Board, I found that the operation of debt enforcement was perfectly controlled but deeply affecting. I remember as a young solicitor understanding the effects of properly enforced debt obligations on families in a small rural community. They made a real mark on me. My experience since is that anybody who is touched by any element of debt-enforcement proceedings is traumatised in a way that few other occurrences—domestic, personal or otherwise—produce, so we have a double obligation to try to get these things right.
I am about to retire as a lay member of the General Medical Council. For the past four years, I have had an engaging and enjoyable time watching the beneficial effects of a sensible, light-touch regulation system with licences, appeals and complaints that put a framework around everything that the professionals in the system do. I am absolutely persuaded that it is in the interests of bailiffs, debtors, creditors, courts and everyone else to have a playing field on which the rules are absolutely clear. The essential elements of that are an appeal system that people understand, a competent complaints service and licences that can be withdrawn if people flagrantly abuse the rules. It works in medicine and in other walks of life—it will work in debt-enforcement proceedings.
In conclusion, I say to my noble friend that, as coalition partners, we not only have to provide an answer before 2015 to the urgent political question of providing more protection but, more importantly, we have to get the system in place before universal credit compounds all the benefit problems, council tax debts and other issues to which the noble Baroness, Lady Meacher, referred. Time is running out. We must get this done. I know the Minister understands the importance of this, so the key thing for me is the timeline. If the Minister does not in his response put his own imprimatur that he will get this done in a reasonable time, I may follow the noble Baroness into the Lobby if she decides to press this to a Division.
The Lord Bishop of Lichfield
My Lords, I too am glad to support the noble Baroness, Lady Meacher, and her amendment which seeks to establish a statutory ombudsman for complaints about bailiffs. I am glad to do so also because Wednesbury, of the famous Wednesbury rules, comes from the ancient Black Country town in my diocese where the recession and austerity have acquainted many citizens with bailiffs for the first time.
Most of us have had the infuriating experience of having our wheels clamped by a private company and of officials who then would not listen to reason. How much worse it must be to have one’s personal possessions, or even one’s home, taken away. It is vital that those authorised on our behalf to collect fines should be properly accountable and their behaviour regulated.
The second reason I want to support this amendment is that the citizens advice bureaux, the Zacchaeus 2000 Trust and the Money Advisory Trust are all behind it. They have been concerned about the practices of some private bailiffs for many years. As we have heard, CABs dealt with getting on for 250,000 problems to do with private bailiffs this past year. They have some heartrending examples of people being pushed into unpayable debt by bailiffs acting illegally. We must do all in our power to prevent vulnerable people being led to believe that the justice system in our country is all about the rich punishing the poor. The present system of certifying county courts fails to monitor individual bailiffs’ behaviour; it is intimidating and costly for vulnerable people to bring complaints and there is no power for a court to award redress.
The Zacchaeus 2000 Trust helps 650 impoverished debtors a year in London. It is convinced that there is a relationship between debt and mental illness and between destitution and poor maternal nutrition and, consequently, babies with lifetime mental and physical illness. Zacchaeus 2000 meets bailiffs when they are enforcing council tax and fines on impoverished debtors. Of course, the courts must be supported and their penalties enforced but we do not want the ethos of the car clampers to be repeated in debt collecting in our poorest boroughs.
The present system is widely perceived as unsatisfactory and toothless. A legal ombudsman would give debtors and the advice sector a proper remedy when bailiffs do not comply with the Wednesbury standards.
Lord Cormack
My Lords, I came to listen and I do not think I have ever heard more powerful, convincing pleas for a Christmas gesture from a Government. I will not repeat the justifiably flattering things my noble friend Lord Kirkwood said about my noble friend Lord McNally, but he is a man of imagination and sensitivity and I hope he will realise that, if this House exists for anything, it is to say to the Government on issues such as this, “You have not got it right”. If the Government are consulting, it is for the House to say that they have to do it quickly and come back with something that will satisfy the points made by the noble Baroness, Lady Meacher. The right reverend Prelate talked about wheel clamping, an interesting and rather good analogy. But the inconvenience that we might suffer if our wheels are clamped is as nothing compared to the anguish and misery inflicted upon a destitute family.
In Lincoln, we are in the process of revealing Lincoln Castle. We have a large grant from the Heritage Lottery Fund. I am acting as chairman of the Historic Lincoln Trust. One of the things that we are going to do is restore and recreate the prison in Lincoln Castle. When people come and look at that they will see the conditions in which debtors were kept. When we read David Copperfield and about the life of Dickens himself, we think, “Good gracious, could people have been put in prison for debt?”. Yes, they were and, yes, we should know about it.
Is there any equivalent today? Yes, this is perilously close to it. It visits upon people who are among the most vulnerable and often the least articulate a horror that leaves the disintegration of their lives in its wake. We are not saying that there should not be procedures for debt enforcement, or that people should not face up to their obligations as best they can. All we are saying is that there should be an ethic and a code so that those who are acting as the agents of the creditor do not act with insensitivity, or even a brutality, which is incompatible with civilised life and living.
On that note, I say to my noble friend that this is a season of good will. This is a time when we ought to have particular regard for the most vulnerable and least fortunate in our society. Here we have the opportunity in your Lordships’ House of putting down a marker if my noble friend is unable to give us a reassuring reply. I thought that I had done my voting for this year last week, when the Government—rather foolishly, in my opinion—pressed on against the noble Lord, Lord Dear, and got a thorough hiding for their pains. I thought that I had done my voting and would not be doing any more. However, unless my noble friend can give a satisfactory reply, we might have to do the same again.
I conclude on this note, by repeating that this is the sort of thing for which your Lordships’ House exists. If we cannot do this, it is difficult to justify our being here. I believe passionately in our being here, as I have tried to demonstrate over the past two years. I want us to be here, reformed to a degree, but for a very long time to come. However, I would not be able to look at myself in the mirror if I did not support what the noble Baroness so eloquently put before us a few minutes ago.
The Earl of Listowel
My Lords, it is hard to follow the eloquence and persuasiveness of the noble Lord, Lord Cormack. I will briefly say how strongly I support my noble friend Lady Meacher’s amendment. I was most grateful for the trouble that the Minister took on Report to reassure us that, further down the line, measures would be taken that would protect these vulnerable people. However, again and again we have heard that this is an enduring, long-term issue. The people at risk are highly vulnerable.
I asked the Minister on Report what protections there might be for pregnant women and women with children under two years of age. That is an emotive question, but it is an emotive question for a very good reason. We have always appreciated how important that stage in a child’s development is, and the importance of the relationship between mother and child in that early time of life. More and more, however, the research is highlighting that the very relationship between the mother and child in that earliest time actually shapes the child’s brain. The valiant efforts made by the right honourable Iain Duncan Smith and Graham Allen MP to get more early intervention for our children are, I believe, based on this evidence.
We should know this kind of detail after this matter has been debated for so long. It should not be somewhere way down the line once we have legislated. I hope, therefore, that the Minister will come back with something more reassuring at this point, otherwise I am afraid that I will feel forced to follow my noble friend through the Division Lobby.
Baroness Hamwee
My Lords, over the years I have been very much persuaded on this issue by those who have put forward the arguments that we have heard this afternoon. However, my noble friend made a point on Report which I confess I had not thought of before. That was that we should ensure that the banks and other lenders are taken along with new arrangements, because it is so important to keep the flow of credit—something that your Lordships have discussed on many occasions.
When he comes to reply, will the Minister tell your Lordships any more about discussions with the banks or other lending institutions? After all, many discussions have taken place with the lending institutions about the availability of credit. His point was important; when he spoke last week I realised that there is another side to this. I absolutely take the points that were made about the behaviour of some bailiffs, but that very cohort, or constituency, of those who are affected would be affected if credit were not available.
Lord Beecham
My Lords, I raised the issue of bailiffs at Second Reading. I followed it up with a Written Question which asked when the Government would respond to consultation. I was told, as I have reminded the House before, that it would be some time in the autumn. Autumn is now safely past us and we do not yet have a response. I spoke in Committee and subscribed to the amendment moved by the noble Baroness, Lady Meacher, on Report. I would have been very happy to subscribe to today’s amendment had it not been for the fact that there were already four signatures on it, which would have left me as a fifth wheel on the coach of the noble Baroness.
I strongly support her amendment because it is important to get some movement here. As my noble friend Lady Smith has pointed out, the Government have introduced three substantial new proposals to the Bill at a late stage. Two of them were at least subject to the recommitment procedure, and followed consultations—consultations, incidentally, which began after the consultation closed on the whole issue of bailiffs, on which the Government consulted last winter and spring. The third amendment, which deals with self-defence, was of course tabled two days before Report, with no apparent consultation with anybody at all beforehand.
I entirely subscribe to and share the views of noble Lords who believe that the Minister is absolutely genuine in his concern about this matter, but why has it taken his department so long to consult all relevant bodies? There was an extensive consultation period; seven months have now passed. What further consultations, if any, have taken place—that is a legitimate question to ask—and with what result? The Minister indicated, in answer to previous questions, that he hoped that there would be a response by the end of November. We are now past that date, and there is still nothing to be seen. As the noble Lord, Lord Kirkwood, has pointed out, time is not running out completely, but it is running out fast against a particular deadline.
Incidentally, I hope that the noble Lord, Lord Kirkwood, will consider another aspect of the coalition agreement, to which I have made previous reference during the passage of this Bill, namely the part of that agreement which indicated that the Government would introduce a threshold of £25,000, below which it would not be possible to obtain charging orders. On the first day back in January we will have in Grand Committee regulations prescribing a £1,000, instead of a £25,000, threshold. No doubt we will have an opportunity to debate that on a subsequent occasion.
In respect of this matter, the noble Baroness’s amendment is, as she put it, almost the least that could be done to get some progress quickly on this matter. If the Government do not accede to this request and if we are looking to another Bill to come forward—I do not know how many Ministry of Justice Bills we can expect to see in the next Session of Parliament—it clearly will take a long time. In the mean time, as other noble Lords have pointed out, there will be the potential for substantial suffering on the part of far too many people—not merely adults because children would be affected as well, including children in the most vulnerable and difficult of circumstances. It is simply unforgiveable that the department has let down the Minister, which is the fair way to put it, in progressing this matter. I hope that the noble Lord will feel able to accept the noble Baroness’s amendment. If not, I certainly shall advise my colleagues on these Benches to join her in the Lobby.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, perhaps it will at least allow the Whips to send out the necessary message that I can make no commitment to the noble Baroness beyond what I have said in meetings and at various stages of this Bill. I will briefly try to explain why not. I have listened to this debate and I have listened to the concern of the House. Yes, the House can send messages but, in truth, the matter is being dealt with. I note that my noble friend Lord Lucas said that the matter had been being discussed for the past 33 years and that the noble Baroness, Lady Meacher, referred to merely the past 20 years. Therefore, I am not too apologetic that the department is taking a little time to take this matter forward.
The consultation paper sets out the objectives, including providing more protection against aggressive bailiffs while spelling out the need for effective enforcement; a fair, transparent and sustainable costs regime that provides adequate remuneration; and minimising excessive regulation on business while ensuring effective protection for the vulnerable. That is the balance that we are trying to get right.
In previous stages of the Bill, I have outlined that the Government are clear that aggressive bailiff action is unacceptable. We remain committed to bringing forward reforms which will protect the public from this and ensure that enforcement action is proportionate. We have a firm commitment in the coalition agreement to effect this and we will not falter. The Government understand that bailiff action can be, by its nature, a deeply unpleasant experience for those in debt. We also understand how this can be exacerbated by unnecessarily aggressive and threatening behaviour by some bailiffs. Those who are subject to bailiff action are often the most vulnerable people in society, as has been repeated on a number of occasions in this debate. We will not stand by and allow them to be subject to needless bullying, which can have a very real and significant effect on their well-being.
However, as I have highlighted previously, the Government are looking to tackle problem bailiffs in a number of ways. These are set out in the wide package of proposals within our Transforming Bailiff Action consultation paper. This package of proposals will focus on the root causes of many complaints. Among other proposed reforms, it will improve clarity so that everyone knows where they stand by stipulating when and how a bailiff can enter a property, what they can take and, not least, what they can charge.
The noble Baroness’s amendment will not address these issues, nor will it supply debtors with an independent complaints process which will meet their needs. The Legal Services Act contemplates a service relationship between professionals, such as solicitors and their clients, which is not present between bailiffs and debtors. Under this amendment, debtors would not be able to complain to the Legal Ombudsman because the bailiff is not providing them with a service as required for complaints under the Act. It is therefore neither appropriate nor sensible to try to force the regulation of bailiffs into this framework which is not constructed to address the circumstances in question.
Baroness Meacher
My Lords, I thank all those who have spoken. I thank the noble Lords, Lord Lucas and Lord Cormack, for their comments from the Conservative Benches. I thank the noble Lord, Lord Kirkwood, and I thank the right reverend Prelate the Bishop of Lichfield for his time in preparing to speak in this debate. I also thank the noble Baroness, Lady Hamwee, and the noble Earl, Lord Listowel, and I am particularly grateful for the support of the noble Lord, Lord Beecham.
I was involved in the debate about bailiffs 20 years ago, but I accept that the debate has been going on longer than that. I am assured that this amendment would provide the protection of an independent appeal process and the legal ombudsman recognises this. I therefore do not accept that comment. I am grateful to the Minister for meeting me on two occasions and in writing a lengthy letter yesterday, but I have to confess that his comments are deeply disappointing. I therefore wish to test the opinion of the House.
“Chief Executive of the Supreme Court of the United Kingdom
(1) The Constitutional Reform Act 2005 is amended as follows.
(2) For section 48(2) (chief executive), substitute—
“(2) The President of the Supreme Court shall appoint the Chief Executive in accordance with the arrangements for the time being in force for the selection of persons to be employed in the civil service of the State.”
(3) In section 49(2) (officers and staff), omit the words “with the agreement of the Lord Chancellor.””
Lord Phillips of Worth Matravers
My Lords, I apologise for the fact that I was not able to be present to move a similar amendment on Report, but I could not have improved on the explanation of its merits given then to the House by the noble Lord, Lord Pannick. The amendment is needed to remedy two anomalies in the Constitutional Reform Act 2005, which, in its present form, impacts adversely on the independence of the Supreme Court.
The first anomaly arises from the terms of Section 48(2) of the Act, which provides that the Lord Chancellor must appoint the chief executive after consulting the president of the court. The effect of the amendment is to make the president of the Supreme Court, rather than the Lord Chancellor, responsible for the appointment of the chief executive of the court. The amendment is appropriate because the Act expressly provides that the functions of the chief executive of the Supreme Court are to be carried out in accordance with the directions of the president of the court. Those functions include the non-judicial functions of the court in so far as the president delegates them to the chief executive.
More generally, the Act requires the chief executive to ensure that the court’s resources are used to provide an efficient and effective system to support the court in carrying on its business. The president and chief executive of the court work in partnership to ensure that the court operates efficiently. Under Section 50 of the Act, the Lord Chancellor is responsible for ensuring that the court has the resources that he thinks are appropriate to enable the court to carry on its business, but he has no role under the statute in relation to the manner in which the court is run. This is quite deliberate. The whole object of the creation of the Supreme Court was to make sure that it was, and was seen to be, independent of the legislature and the Executive.
The chief executive is the accounting officer of the Supreme Court and, as such, reports not to the Lord Chancellor but direct to Parliament in accordance with Section 54 of the Act. This requires the chief executive to prepare a report after each financial year, which the Lord Chancellor is required to lay before each House of Parliament.
The first danger of the provision that the chief executive be appointed by the Lord Chancellor is that the Lord Chancellor, when making the appointment, will be concerned to appoint a candidate who will have regard to his wishes when deciding on the administrative arrangements of the court. Let me make it plain that there is no suggestion that this consideration influenced the appointment of the first chief executive of the court. The noble Lord, Lord Pannick, explained to the House how she was appointed by an ad hoc commission that included three Law Lords, under the chairmanship of a Civil Service commissioner. There is no complaint about what happened on that occasion. That process resulted in the appointment of Jennifer Rowe. I take this opportunity to recognise the admirable way in which she has performed her duties under my presidency, and to confirm that she is rightly recognised as deserving much of the credit for the successful birth and early years of the Supreme Court.
The second danger of the provision is that, because the Lord Chancellor appoints the chief executive, the chief executive will be expected to defer to the wishes of the Lord Chancellor in relation to the manner in which the Supreme Court is managed. Such an interpretation of the Act might not seem unreasonable. After all, the Lord Chancellor is to provide the court with such resources as he thinks are appropriate for the court to carry on its business. Why should he then not have a say in how those resources are used? The answer is of course that this would be in conflict with the objective of the creation of the Supreme Court, which was to give effect to the separation of powers. Lest there be any doubt about this, perhaps I may remind the House of what the noble and learned Lord, Lord Falconer, the then Lord Chancellor, said to the House on 14 December 2004, when bringing forward the amendments which became the governance sections of the Constitutional Reform Act. He said:
“The chief executive will be able to allocate resources as he considers appropriate to ensure an effective and efficient system to support the court in carrying out its business. In other words, the chief executive will be solely responsible for the administration of the court, in accordance with directions from the president, and will be free from ministerial control”.—[Official Report, 14/12/04; col. 1237.]
The danger that there will be a perception that the chief executive should defer to the wishes of the Lord Chancellor is a real one. I must tell the House that during my presidency it was made quite clear to me that those who served in the Ministry of Justice at all levels were of this view. It made relations with the Ministry of Justice difficult. When responding on Report to the noble Lord, Lord Pannick, the Minister, the noble Lord, Lord Ahmad of Wimbledon, said that,
“the Government retain a fundamental concern with regard to accountability and proper lines of accountability which need to be established so that the elected Government are responsible for the proper fiscal and managerial operation of the court”.—[Official Report, 4/12/12; col. 653.]
Far from justifying the Government’s opposition to the amendment, that statement underlined its desirability, for the chief executive of the Supreme Court is accountable not to Ministers but to the president of the court and to Parliament.
The second anomaly that the amendment is designed to cure arises from the terms of Section 49(2) of the 2005 Act, which requires the chief executive to obtain the agreement of the Lord Chancellor on the number of officers and staff of the court, and on the terms upon which they are to be appointed. The staffing needs of the court are quite complex. They include security officers; secretaries for the justices and administrators; librarians; judicial assistants; operators of the television system that provides live coverage of the proceedings of the court; the staff of the communications department; cleaners; and the staff of the public cafeteria. It makes no sense at all for the chief executive to be required to obtain the consent of the Lord Chancellor, through his officials, on the number and terms of employment of this diverse staff complement. These are matters which pre-eminently should be decided by the chief executive, working in consultation with the president, who himself will be in a position to obtain the views of the other justices as to their needs. There is nothing useful that the Lord Chancellor’s officials can add. Furthermore, the requirement to obtain the consent of the Lord Chancellor to these matters detracts from the independence, and the appearance of independence, of the Supreme Court, which was the objective of its creation. On Report, the noble Lord, Lord Pannick, did not press this amendment on the understanding that it raised a live issue that was subject to ongoing discussions in which the president of the court was involved.
This morning, the president, the noble and learned Lord, Lord Neuberger, informed me that these discussions had not borne fruit and that, in particular, he had been given no justification for the present form of the relevant provisions in the 2005 Act. Shortly before I came into the Chamber, I received on my BlackBerry a copy of a letter written by the Lord Chancellor to the noble and learned Lord, explaining that the Government would not be in a position to agree to the amendment because further time was required to consider its implications. I am not at present persuaded that there is any need for further time, but I look forward to hearing what the Minister has to say about this in due course. I beg to move.
Lord Pannick
My Lords, perhaps I may add two points to what the noble and learned Lord, Lord Phillips of Worth Matravers, said. The first is to inform your Lordships that the chairman of your Lordships’ Constitution Committee, the noble Baroness, Lady Jay of Paddington, whom I am pleased to see in her place today, wrote to the Minister on 10 December stating the committee’s support for the amendment on the basis that,
“it is not constitutionally appropriate”,
for the Lord Chancellor to retain his present functions in relation to the appointment of the chief executive of the Supreme Court and in relation to the deployment of the court’s staff.
The second point that I want to emphasise is that allowing the Lord Chancellor to retain these functions is impossible to reconcile with the Supreme Court being seen as independent of the other organs of government. The need for the Supreme Court to be seen as independent was the main reason why it was created by the 2005 Act and why the Law Lords left this place. It is of especial importance that the administration of the Supreme Court is seen to be independent of the Executive when the Executive are the respondent in a very a large proportion of the cases heard by the Supreme Court. This amendment is of constitutional importance; the arguments in its favour are simply overwhelming.
Lord Lloyd of Berwick
My Lords, if your Lordships can bear a third lawyer in a row, I, too, would like to express my support for the amendment. I regret that I was not able to be present at Report stage, but if I had been I should certainly have spoken in favour of the amendment.
The Government’s fundamental concern, as described on Report by the noble Lord, Lord Ahmad, is that there should be “proper lines of accountability”—a quotation already referred to by my noble and learned friend Lord Phillips. My noble and learned friend and my noble friend have already dealt with that argument effectively, so I shall say no more about it.
The noble Lord, Lord Ahmad, also said that he would not revisit the arguments that had been raised historically. It is here that I want to add just a few words, because I was more directly concerned with the terms on which the 2005 Act was passed than either my noble friend or my noble and learned friend. The main argument in favour of setting up the Supreme Court was of course the presence of the Law Lords in this place, which was said to be contrary to the principle of the separation of powers. I never accepted that argument. It seemed to me then, as it seems to me now, that the Law Lords were as independent of the Executive as the members of the Supreme Court are now—neither more nor less.
Whatever the theory of the separation of powers, the reality was that the separation was complete. The back-up argument in those days was based on perception. Although we in Parliament knew very well that the law Lords were independent of the Executive, that was not—so it was said—the perception of the public, or at least of some members of the public. However, there was never any evidence to suggest that that was the perception of the public except, if I remember correctly, a single piece of anecdotal evidence. This led the noble Lord, Lord Norton of Louth in a most memorable speech—I wish he was in his position to hear me say this—to describe the whole exercise as having been based on,
“the perception of a perception”.—[Official Report, 4/7/07; col. 1094.]
However, here we are—as the saying goes—and we must go on from here.
Having created the Supreme Court at a cost of £100 million, not to mention the huge increase in the annual cost of running it, we must now take it as it is and complete the job. I cannot imagine any provision more likely to create the impression of interference by the Executive in the affairs of the Supreme Court than that the chief executive should be appointed by the Lord Chancellor. If the Lord Chancellor was here, it would be no answer for him to say that in practice he would accept the nomination of a selection committee. The perception is there and, in this case, the reality is there.
I cannot remember whether we discussed Section 48(2) in the Select Committee that sat for many weeks. Nor can I remember why, in the end, we accepted the section as it stands, unless we perhaps had in mind the old style of Lord Chancellor before the Constitutional Reform Act 2005, rather than the new Lord Chancellor as he has become. Whatever thought processes went through our heads, I am now convinced that the section was a mistake, and therefore I am very glad to support the amendment.
Lord Goodhart
My Lords, I am going to take a rather unusual position on this and say that I am afraid I do not agree with Amendment 3. I was considerably involved in the drafting of the Constitutional Reform Act 2005 and I had no objection at that time to Sections 48 and 49, which are now objected to in this amendment. The reason why I do not welcome this amendment is that the chief executive is an administrator, not a judge. That being so, I see no serious reason why Lord Chancellors should not continue to be involved in the proceedings of Sections 48 and 49 as they now are. The administration of an issue which involves both those in charge of costs and those in charge of the law needs to recognise the real issues here because of the way in which the funds get to the Supreme Court.
I am in general a strong supporter of the two former judges who have put their names to this amendment and of the noble Lord, Lord Pannick, but in this case I fail to be able to agree with them as they would clearly like.
Baroness Butler-Sloss
My Lords, although this may seem to be a technical point to some Members of the House, it is actually a matter of very considerable importance. It is wrong in law and it is constitutionally inappropriate. I am very surprised that the noble Lord, Lord Goodhart, who is an excellent lawyer, has not picked up either of those points. I have to say that the Minister, the noble Lord, Lord Ahmad, got it wrong, and it is important to get it right. It is important to preserve the separation of the judiciary, and I speak as someone who is not a member of the Supreme Court and was not a member of the Judicial Committee. However, the separation of the judiciary from the Executive is crucial at every level, so to have the chief executive of the Supreme Court answerable to the Lord Chancellor and not to the president of the Supreme Court is, to say the least, an anomaly. Also, rather more seriously, it is incorrect. This needs to be put right, otherwise there really will be a perception that the Lord Chancellor not only controls the finances but controls the person who controls the financing of the Supreme Court. I strongly support this amendment.
Lord Goldsmith
My Lords, I am the first Member to speak to this amendment who was a member of the Government at the time that the Constitutional Reform Act 2005 was passed. I support the amendment, as I did on Report, at which point I gave the House an anecdote to illustrate why I think that it is right. It is because of the risk of the perception of a lack of independence, about which the noble and learned Lord, Lord Phillips of Worth Matravers, and others have spoken. I do not want to repeat what I said at the previous stage but, in the light of what may be said by the noble Lord, Lord McNally, it is right to remind ourselves how the Constitutional Reform Act came about.
The Act did not come about—how can I put this politely?—in the most orderly way, and the consequence was that we rather scrambled to get to the conclusions. I am happy to see my noble and learned friend Lord Irvine of Lairg in his place and I should say that a number of noble Lords were involved in the process. However, it does not surprise me that, despite those valiant efforts, in the end we did not get the legislation completely right, and this is a provision which we did not get completely right. If we had known about the examples to which the noble and learned Lord, Lord Phillips of Worth Matravers, has at least referred, if not identified, and if the risk could have been seen that the chief executive somehow being responsible to the Lord Chancellor might lead to the view that the Supreme Court was in some way connected to the Government so that the Government were able to influence its decisions, we would not have included this provision. Therefore, despite the time spent on the Bill, in the end much of it was done through discussions between my noble and learned friend Lord Falconer of Thoroton and the then Lord Chief Justice, the noble and learned Lord, Lord Woolf, although a lot also happened on the Floor of the House. If the only thing that was not quite right was this particular provision, it was still a considerable triumph, but I hope that the noble Lord, Lord McNally, those behind him and of course ultimately the Lord Chancellor will see that this is a small but hugely important change that will do no harm at all to any of the issues of administration.
The Lord Chancellor is not responsible for the finances of the Supreme Court, a point that was made clear by my noble and learned friend Lord Falconer in, I think, the very passage to which the noble and learned Lord, Lord Phillips of Worth Matravers, referred. What would happen is that a bid would be put forward that could not be altered and it would then come directly from the Consolidated Fund. I do not think that there is anything to be accountable for. For those reasons, I strongly support the amendment.
Lord Lester of Herne Hill
My Lords, I strongly supported, as did my party, the separation of the traditional branch from the legislative branch. At the time, I disagreed with the noble and learned Lord, Lord Lloyd of Berwick, as my party does today, about the need for it. We thought—and think—that perceptions mattered very much, and it was a great embarrassment when we travelled around the world to discover that the rest of the world could not understand how judges could take part in or vote in our debates and that the Lord Chancellor could sit in politically sensitive cases. Therefore, we strongly supported the reform process, as I do and as my noble friend Lord Goodhart does.
I disagree with my noble friend Lord Goodhart for the reason given many years ago by the noble and learned Lord, Lord Browne-Wilkinson, when he gave a notable lecture about the independence of the judiciary and warned about the way in which questions of resources and management from the Treasury could encroach on judicial independence. It was a very enlightened and courageous lecture. I agree with the noble and learned Lord, Lord Phillips, and the noble Lord, Lord Pannick, about the function of the chief executive, especially when the Lord Chancellor is not an old-fashioned, legally qualified Lord Chancellor, who, from his experience, would instinctively understand the need for judicial independence. In my view, it is all the more important that the chief executive should be accountable to the president of the Supreme Court of the United Kingdom and not to a non-legally qualified Minister. For that reason, and because we do not have a written constitution that spells out the separation of powers but only an Act of Parliament, I believe it is particularly important that the law should be clear on this in our legislation. Therefore, I support the amendment.
Lord Woolf
My Lords, I add my voice to those who support this amendment. I do so with diffidence, because it may appear to the House that perhaps everything that could be said on the subject has already been said; but I hope that I will be forgiven for two reasons. The first is that, as was stated a few moments ago by the noble and learned Lord, Lord Goldsmith, it was my responsibility, as Lord Chief Justice at the relevant time, to be the spokesman for the judiciary. I had very many conversations with the person who became Lord Chancellor after the noble and learned Lord, Lord Irvine, when we strove to find the right answer to various activities which took place within the court system and which would take place in the relationship between the courts and government after the changes that the Constitutional Reform Act was going to bring about. I am afraid that I must have nodded on this point because I did not realise its significance at the time; I certainly do so now.
Secondly, in relation to the intervention of the noble Lord, Lord Goodhart, I suspect that he is influenced—as I would have been influenced, perhaps, not to attach the importance that I should have done to this point—by the fact that there was a great tradition within the Lord Chancellor’s Department, as in the judiciary, that the civil servants who supported the court system could do so without undermining the independence of the judiciary. Throughout my judicial career, I worked very closely with senior civil servants and civil servants at all levels, and there was never a problem. The Permanent Secretary at the department fully understood what the independence of the judiciary required. The unfortunate fact is that in those days there was a tradition in the Ministry of Justice of civil servants and, indeed, Ministers spending substantial time in the Ministry of Justice—or, as it was then called, the Lord Chancellor’s Department—and if they did not know at the outset the complexities of that very special relationship within a very short time of being there, they came to understand it because the whole ethos of the Lord Chancellor’s Department was that they must focus at all times on protecting the independence of the judiciary. I believe that, so far as the courts are concerned, that continues to be the position.
Baroness Jay of Paddington
My Lords, I think I am the first non-lawyer to contribute, very briefly, to this debate. I see the Minister raising his hand and hope he will accept the point I will make.
As the House is aware, I am the chairman of your Lordships’ Select Committee on the Constitution and, as the noble Lord, Lord Pannick, said, have written to the Minister in that capacity about this amendment, simply to express the view that the committee, in its meeting last week, endorsed the amendment that has been proposed by the noble and learned Lord, Lord Phillips. I am very grateful to the Minister for writing back to me in a letter, with today’s date, which he concludes by saying:
“I can assure you that the Government remains committed to working with the Court to consider these issues”,
which he says are, of course, complex.
I was therefore a little disturbed to hear from the noble and learned Lord, Lord Phillips, in his introduction to the debate, that he felt that his discussions with the current president of the Supreme Court, the noble and learned Lord, Lord Neuberger, have run into the ground or “come to nothing”, which I think was the phrase he used. I would be grateful if the Minister, in replying, could perhaps elucidate, or expand a little more on that sentence that he has written in his reply to me, that the Government are committed to working with the court to achieve these ends.
Lord Brown of Eaton-under-Heywood
My Lords, I, too, feel compelled to say just a word in support of this amendment. I support it for the reasons already eloquently given by my noble and learned friend Lord Phillips of Worth Matravers and other noble Lords and have no intention of repeating those. I echo, too, his tribute to the present chief executive of the court, Jenny Rowe, who has worked tirelessly in setting up the court and progressing it over the three years that it has existed. I confirm—because I remember it all too well—what my noble and learned friend Lord Woolf said about the problem that the present wording of the legislation caused with regard to the chief executive’s role at an earlier stage in the court’s life.
On the critical point at issue, I respectfully suggest just this to your Lordships: constitutionally, it is no more appropriate for the Lord Chancellor to appoint the chief executive of the Supreme Court merely after consulting with the president of that court than it would be for the president of the Supreme Court, after merely consulting with the Lord Chancellor, to appoint the Permanent Secretary of the Ministry of Justice. The separation of powers means just that—the judiciary is not the Executive.
Lord Beecham
My Lords, I speak with diffidence as, I think, the ninth lawyer to speak in this debate—albeit from the junior branch of the profession—to add my support to the amendment moved by the noble and learned Lord, Lord Phillips. For the avoidance of doubt, I should say that my noble and learned friend Lord Falconer, who is not in his place tonight, would have supported this amendment, were he here. He has made that very clear. My noble and learned friend Lord Goldsmith is right to say that the legislation under which the present situation obtains was imperfect. It is now an opportunity for the House and, I hope, the other place, to correct what was a mistake—forgivable, but nevertheless a mistake. The independence of the judiciary, particularly that of the Supreme Court, must be at the heart of our judicial system. It is timely that we are discussing this amendment tonight, because in the House of Commons today the Justice and Security Bill is being debated. The role of the judiciary in relation to certain proceedings, which we have debated at length in your Lordships’ House, is very much part of those discussions. In addition, there are proposals in the air around judicial review and, again, the role of the judiciary in a particularly important and sensitive area of law.
Perception counts for a good deal in these matters. I entirely endorse the views of all but one of the noble Lords who have spoken tonight, that it is important to reinforce the independence of the judiciary. That independence has not in substance been threatened over the past few years, but there is always a risk that at some point it might be, and that in any event it might be perceived to be an issue on the part of the public. I do not know whether the noble and learned Lord will seek to test the opinion of the House if the Minister cannot provide a clear, unequivocal response to the suggestion here. Frankly, I cannot think why it should take any time at all for there to be discussions about the issue, which seems to me perfectly straightforward. If the noble and learned Lord seeks to test the opinion of the House, again, I will invite my colleagues to support him through the Lobbies.
Lord Butler of Brockwell
My Lords, I hesitate to intervene in the debate when so many distinguished members of the judiciary have spoken. The fact that I do so is the fault of the noble Lord, Lord Lester. Many years ago, when the noble and learned Lord, Lord Browne-Wilkinson, was about to deliver the lecture to which the noble Lord, Lord Lester, referred, the noble Lord, Lord Lester, encouraged me to speak to the noble and learned Lord and argue the case for the interest of the Treasury in the administration of justice. I had a very interesting debate with the noble and learned Lord, although I made absolutely no impact on him at all.
However, I want to put in a contrary voice because the administration of the courts, including the Supreme Court, is a matter of administration. It takes place at the taxpayer’s expense. It is therefore necessary that the Government have an interest in and a responsibility for it; on these administrative matters and the use of resources it is legitimate for the Government to have a proper interest. I argue that that does not impinge on the independence of the judiciary. The independence of the judiciary, which refers to its operation as judges, and here we are talking about an administrative matter. In that case, the arrangement that exists at the moment, which was legislated for and brought into effect by the Constitutional Reform Act, is probably right. However, I realise that, in the light of the views of the members of the judiciary, this is not a popular view.
Lord Lester of Herne Hill
The noble Lord’s memory is correct. Does he remember that consideration of arguments of the kind he has just given led some of us to say we shall follow Australia and ring-fence the budget of the Supreme Court? That is, we should either ring-fence as they do in Australia, or ensure that the money comes from Parliament and not the Government. Does he remember that those were arguments at the time, counter to his suggestion?
Lord Butler of Brockwell
Yes, I remember those arguments well. The issue is to what extent the Government—the Executive—should have an interest in this matter. I think that the arrangements that were introduced protect the independence of the Supreme Court and the judiciary, and I would not want to change them.
Lord McNally
My Lords, I often think how well served we are by the depth and richness of the judicial talent that serves here in the House of Lords. I often think it, but perhaps not tonight.
This has been an interesting debate, full of mea culpas. The noble and learned Lord, Lord Lloyd, cannot quite remember how he let this through the committee on which he was serving; the noble and learned Lord, Lord Woolf, must have nodded when it went through; and the noble and learned Lord, Lord Goldsmith, said that the previous Government did not get it perfectly right. The fact is that this is an Act of Parliament carried by the previous Administration. I was very pleased to find out the intentions of the noble and learned Lord, Lord Falconer, at the last minute, although they did not really surprise me, but it seems strange that we should be discussing this.
Let me make my position perfectly clear. One of the things of which I am most proud in my parliamentary life is the steadfastness with which the Liberal Democrats delivered the votes in this House to carry through the reform that delivered us the Supreme Court. I have been a strong believer in the Supreme Court from that time—I think a little ahead of the noble and learned Lord, Lord Phillips, in devotion to the separation of powers—and that should stand in the record about my attitude to this amendment.
Of course it is possible for your Lordships to send strong messages to the other place. Let us remember that very shortly another place will be debating this Bill. However, I urge noble Lords to ponder whether it is the best way to send such a message. The Lord Chancellor can read, and I will make sure that part of his Christmas reading is the Hansard of this debate, but negotiations are going on. The noble Baroness, Lady Jay, asked whether the discussions have run into the ground. No, there has been discussion at official level in the two weeks since this issue was raised, and the letter that was quoted was from the Lord Chancellor to the noble and learned Lord, Lord Neuberger, pointing out that the Government are still considering this matter.
Let me clarify for the record that the Government do not have any concerns about the accountability of the UK Supreme Court. While there is no doubt that the Executive has a legitimate interest in the effective and efficient administration of all courts—a point that the noble Lord, Lord Butler, made very eloquently—the Government fully respect the independence of the judiciary and our duty to uphold that independence.
The amendment tabled reflects concerns about the present arrangements concerning the appointment of the chief executive, the staffing arrangements for the court and the ramifications of those arrangements for the independence of the court. This is a matter of great constitutional importance—a point made by the noble Lord, Lord Pannick. I emphasise that it is a matter of great constitutional importance, so when the noble Lord, Lord Beecham, with the impetuosity of a young solicitor says, “Why can’t this be handled?”, it is because it is a matter of great constitutional importance. It has been raised by a former president of the Supreme Court. It has been raised today by former high office holders—Attorneys-General, Lord Chief Justices and other Supreme Court justices. Nobody is underestimating its importance. However, I most humbly say—I am beginning to learn how lawyers manage to insult each other with the most exquisite politeness—that on a matter of this constitutional importance, where the Lord Chancellor of the day is saying that he is in negotiations and discussions with the president of the Supreme Court, it is not particularly helpful for this House to pass an amendment on the hoof in this way.
Lord Phillips of Worth Matravers
My Lords, I am grateful to those who have supported the amendment and to the Minister for the exquisite politeness with which he has responded to it. I also commend his eloquence, for I confess that before he stood up it was my intention to seek the opinion of the House on this matter. However, he has persuaded me that there is merit in permitting discussions, which he has repeatedly emphasised are ongoing and very real, to continue without that impetus. Accordingly, I beg leave to withdraw the amendment.
Lord Bradley
“Provide assistance for vulnerable defendants through intermediaries
(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.”
Lord Bradley
My Lords, I will not detain the House long on this new clause, as there was a good debate on the issue on Report, led admirably by the noble Baroness, Lady Linklater, who I am pleased to see in her place this evening. However, it is appropriate at Third Reading to press the Government again, briefly, on this overall matter, and particularly on the use of intermediaries in the court.
The issue of vulnerable defendants is well laid out in the report Fair Access to Justice from the Prison Reform Trust—I declare an interest as a trustee—and from my own independent report to the Government in 2009 on mental health, learning disabilities and the criminal justice system. The latter highlighted the need for vulnerable people to be supported in the criminal justice system along the criminal justice pathway; to be sure, among other things, that judges, magistrates and court staff are aware of the problems of the defendant at their first appearance in court; and that the defendant has the best opportunity for a fair trial. I add briefly that I am pleased that the current Government are in the process of implementing the 82 recommendations in my report. I praise the excellent work of the offender health division in the Department of Health and the Ministry of Justice through the cross-government National Programme Board. I hope that there will be no new barriers to the national rollout of liaison diversion services when the NHS Commissioning Board is fully established.
The new clause would ensure that, where necessary, vulnerable defendants are provided with the appropriate support to enable them to participate effectively in court proceedings, and in preparing for their own trial. One such measure is support provided by an intermediary, whose role is to facilitate two-way communication between the vulnerable individual and other participants in the court proceedings; and to ensure that their communication is as complete, accurate and coherent as possible.
Intermediaries are appointed for vulnerable witnesses, are registered, and are subject to a stringent selection, training and accreditation process, as well as quality assurance, regulation and monitoring procedures. Although vulnerable defendants do not have the same statutory rights to special measures as vulnerable witnesses do, intermediaries can be appointed at the discretion of the court. However, intermediaries who are appointed to support vulnerable defendants are not registered or regulated. The practice of registered and non-registered intermediaries being potentially in the same trial and paid different fees is clearly an anomaly in the Act.
My noble friend Lord Beecham spoke in support of the amendments to support vulnerable defendants, urging the Minister to take the time to take the amendment back so that he could report further at Third Reading. I can do no better than to quote the noble and learned Lord, Lord Woolf, who also supported the amendment:
“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”.—[Official Report, 10/12/12; col. 878.]
Responding on behalf of the Government, the Justice Minister, the noble Lord, Lord McNally, agreed to take the amendment away and to write to Peers who had supported the amendment,
“to explain why I cannot do so and what we are doing to keep this matter under review”.—[Official Report, 10/12/12; col. 879.]
I know that the Minister has written to the appropriate noble Lords on this matter. I understand that one of the key issues in that letter, which was sent earlier this month, is about resources. I hope that the Minister has taken the opportunity between Report and today to reflect further on the matter.
I realise that some eminent judges are present, so I am reluctant to be too certain on these matters, but when I was doing my review I went around many courts, and saw that when vulnerable defendants appeared for the first time there was a huge cost to the court in delays because of lack of support for that defendant. That often meant that the court process was delayed or adjourned to enable the issues around mental health and learning disabilities to be properly identified and assessed before the trial could continue.
The resource implication, therefore, is well offset by ensuring that vulnerable defendants at the first court appearance have that support in place. That would be cost-effective and, most importantly, would ensure that the person who is identified as vulnerable has as fair a trial as possible. I beg to move.
Lord Ramsbotham
My Lords, I put my name to this amendment for two reasons. The first was that earlier in the work on this Bill, my noble friend Lord Rix, who unfortunately cannot be in his place tonight, and I, together spoke with the president of the Queen’s Bench Division; he in his capacity as chairman of the All-Party Group on Learning Disabilities, and I as chairman of the All-Party Group on Speech and Language Difficulties. We were very concerned at the implications of people not being able to be properly represented, and, therefore, not being able to understand the court processes that they were likely to go through.
One reason why I have added my name to this amendment is because I have since learnt, from the chairman of the Magistrates’ Association, that there has been a very large increase in the number of out-of-court settlements. He quoted to me the fact that 50% of crimes of violence are now dealt with out of court. This worries me, as it worried my noble friend and I when we spoke to the president of the Queen’s Bench Division, because it is just as important that people are represented during those out-of-court engagements with the police as it is that they are in court.
I know that there is a resource issue, but like the noble Lord, Lord Bradley, I have to ask whether this is not a resource issue that we cannot afford not to tackle because of the resulting cost of not taking appropriate action on behalf of these defendants, who otherwise cannot take part properly in the court and out-of-court processes.
The Earl of Listowel
My Lords, I support this amendment. More than 60% of children in the youth justice system have communication difficulties. An inspectorate of probation report—published today, I believe, or at least reported by the BBC today—was very critical of the services for looked-after children in the youth justice system. Many of these children are placed away from home, apparently without good reason, and some young offender teams do not pay attention to the emotional impact on these children of being in care. The chief inspector said, in the BBC article:
“What we saw in this inspection really shocked us … All of these things are impacting on their life chances—what we are seeing for these children are very poor outcomes … Youth offending team workers’ aspirations for the children were ‘depressingly low’”.
The report said many staff had become “desensitised” and were “under-qualified”.
I am not sure whether looked-after children would be categorised as vulnerable defendants in this system. I am sure that many of them would because they have additional problems, which arise from their trauma. I hope that this emphasises the point that vulnerable defendants—particularly vulnerable young defendants—need proper intermediaries to provide them with assistance in the courts.
Baroness Linklater of Butterstone
My Lords, I support my noble friend—he is my noble friend although he is on the other side of the Chamber—in what he said about intermediaries. I spoke about this issue on Report. I believe that the underlying problem is the lack of even-handedness and fairness between what witnesses with a whole range of special needs can have and what defendants with similar special needs can have. Witnesses are entitled to qualified, registered, accredited, paid and trained intermediaries to represent them. Defendants do not have that entitlement; nor do they have the same rights. When they need it, they tend to have this kind of support at the discretion of the court. They do not get registered or regulated people and they get people who are paid a lower fee.
My question to my noble friend is: what is the justification for this discrepancy when, surely, everyone is entitled to a fair hearing and to proper justice in court? I thank the noble Lord, Lord McNally, for his letter in which he referred to Section 104 of the Coroners and Justice Act 2009 and stated that “certain vulnerable defendants” can receive assistance from an intermediary. At the end of that paragraph, he stated that the Government had decided to defer the implementation until full consideration could be given to the practical arrangements and resource implications. He stated that the Government were still looking at the practical and resource issues, and had no immediate plans to bring Section 104 into force. That seems clear to me and I find it astonishing, distressing and wrong that this kind of discrimination should be taking place between groups of people—witnesses and defendants—with similar needs. I hope that my noble friend can reassure me and give me an answer on that.
Baroness Kennedy of The Shaws
My Lords, it comes as a sort of alarm to hear the noble Lord, Lord Ramsbotham, indicate that there may be vulnerable people who, because they are unrepresented and do not have adequate support, may be agreeing out of court to cautions or to certain kinds of settlement of charges against them without proper legal advice. That should be a serious source of concern. In responding, I hope that the Minister will have something positive to say. Undoubtedly, the removal of legal aid is having that kind of outcome. I await with interest what the Minister will say. I support any protection that there can be for the vulnerable in the courts.
Lord Beecham
My Lords, I take the Government’s point about resources, but as my noble friend rightly points out, there are two sides to that equation. One is the cost to the system, which can flow from inadequate representation of defendants, adjournments and the rest of it, as well as the cost of providing it. Of course, there are defendants who get assistance in the form of interpretation. As it turns out, recent developments in interpreting services have been, to put it mildly, controversial. Contracts have been given to organisations that apparently have not performed very well, at considerable cost in terms of the fees paid to them. Equally, as might be the case in connection with people who are unable to understand proceedings and follow them unassisted, some of the interpreters who turned up to the courts were simply not up to the job. It has been something of a disaster.
This is an analogy for the Government to look at in terms of providing services for people who, for different reasons, are unable perhaps to follow a case properly, to understand it properly, or to give proper instructions to their legal advisers. I hope that the Government will look at that and look at this position in the round. The noble Baroness has already identified the discrepancy between witnesses and defendants. Here, we potentially have two classes of defendants, some of whom may not speak English adequately and for whom interpretation will be provided, and others who may not be able to follow because of learning disabilities or other aspects, and for whom nothing would be provided.
Looking at the whole situation surely is sensible. I hope that the Government will acknowledge that there is a disjunction here between what is provided for different classes of defendants, and will not simply put this on the back shelf but will look at it with a degree of urgency. Miscarriages of justice can flow at any time from failure to provide adequate assistance, whether that is legal aid or, as in this case at least, the kind of support that can be offered by those described in my noble friend’s amendment. I hope that the Government will acknowledge that there is an issue here and that, at the very least, if they are not able to respond firmly and conclusively tonight, that they will give it more urgent attention than was indicated in the letter which was recently sent out.
Lord Ahmad of Wimbledon
My Lords, I must admit that, as I listened to the debate, time stopped for a moment when I saw the annunciator freeze. I do not know whether that was due to the weight of arguments that were presented on the previous amendment. Nevertheless, my attention remains focused on this one. As noble Lords acknowledged—including the noble Lords, Lord Bradley and Lord Beecham—my noble friend Lord McNally, following the last debate, wrote to interested Peers on this amendment.
I have nothing specific to add but certainly I will seek to answer some of the questions that arose. As was said on Report in response to an amendment moved by my noble friend Lady Linklater, there is already a provision in statute for “certain vulnerable defendants” to receive assistance from an intermediary when giving evidence. I shall return to that point in a moment. That is in Section 104 of the Coroners and Justice Act 2009.
The point was made about the Government deferring implementation. It is important to understand that they decided to defer implementation until full consideration could be given to the practical arrangements and resource implications. I reassure the House that we are still looking at these practical and resource issues because they are important.
On the points raised about discrimination, not only does Section 104 provide for intermediaries to be used in support of defendants but the courts already have the power under common law to order such use when they consider it necessary.
The noble Lord, Lord Ramsbotham, referred to vulnerable defendants. As I said, common-law powers exist to appoint an intermediary to assist vulnerable defendants if and when the courts consider it necessary. Guidance, therefore—the Government have moved forward on this—on appointing intermediaries in such circumstances was issued to all courts last year. It is the duty of the courts to ensure that defendants receive a fair trial. In the case of vulnerable defendants, that entails making sure that they fully understand what is taking place and that trials are conducted to timetables that take account of their ability to concentrate.
The noble Baroness, Lady Kennedy, made a point about a fair trial for all vulnerable defendants. To give a couple of examples, the court can make an order allowing a vulnerable defendant, for example, to give evidence over a live link. Much more can also be done by the defendant’s legal representative to aid communication. A vulnerable defendant should always be represented, as one of the criteria in the interests of justice test that is used to determine whether an applicant is entitled to legal aid is that the defendant may not be able to understand the court proceedings.
Coming back to the crux of the point, it is the duty of the courts to ensure that defendants receive a fair trial. The Government are committed to ensuring that vulnerable defendants fully understand what is taking place. I have already alluded to the fact that much can be done in terms of the defendant’s legal representative to aid communication.
In view of the reassurances that I have given, the letter written by my noble friend Lord McNally and the assurance that the Government are looking at this and at the common-law provisions that exist, I hope that the noble Lord will be minded to withdraw his amendment.
Lord Ramsbotham
My Lords, I wonder whether the Minister could answer a question about the increase in the number of out-of-court settlements. This is of extreme concern to the Magistrates’ Association, not least because of the increase in the number of out-of-court settlements of cases involving violence.
Lord Ahmad of Wimbledon
The noble Lord raises an important point and, with the permission of the House, the Minister will write to him directly on that point. With the amendment as it stands, this issue may not have a direct impact, but the noble Lord raises an important point and the Minister will write to him.
Lord Bradley
It is disappointing that between Report and Third Reading the Government have not reached the conclusion that they should immediately implement Section 104, but I assure the Minister, as he would expect, that we will continue to pursue this matter with the implementation of the National Liaison and Diversion Programme, which fits neatly with the provisions for vulnerable defendants in court, to ensure that there is fairness of approach between witnesses and defendants in court proceedings. However, in the light of the Minister’s comments, I beg leave to withdraw the amendment.
“Encouragement of diversity in appointments to the Supreme Court(1) Part 3 of the Constitutional Reform Act 2005 is amended as follows.
(2) After section 31, insert—
“31A Diversity
The Lord Chancellor and any selection commission convened under section 26 must, in performing their functions under sections 27 to 31, have regard to the need to encourage diversity in the range of persons available for selection for appointments.””
Lord Marks of Henley-on-Thames
My Lords, I spoke on the topic of judicial diversity at some length on Report and I shall not detain the House long in this debate.
There is a consensus across this House and in Government on how important it is that the arrangements for encouraging judicial diversity should apply across the court system and particularly in the Supreme Court, and that the duty to encourage diversity should be specifically imposed at the highest level. It is for that reason that I welcome the Government’s Amendment 8. to which the noble Lord, Lord Pannick, and I have added our names. By imposing the duty, as the amendment does, to,
“take such steps as that office-holder”—
either the Lord Chancellor or the Lord Chief Justice of England and Wales—
“considers appropriate for the purpose of encouraging judicial diversity”,
the duty is imposed in respect of those two officeholders’ exercise of all their functions where that duty may be relevant.
Amendment 8 may make my Amendment 6 unnecessary because it applies to judicial appointments to the Supreme Court. This leads me to my Amendment 7, which would permit a tie-breaker or tipping-point procedure to apply to appointments to the Supreme Court. There is no difference in principle between the Government and the movers of this amendment—myself, the noble Baroness, Lady Hamwee, and the noble Lord, Lord Pannick—as to the appropriateness of such a procedure. The procedure applies to other appointments lower down the system as a result of the Bill, but without the amendment it does not apply to appointments to the Supreme Court.
The Government have no difficulty in accepting the principle but my noble friend expressed the view that its application was already permitted by Section 159 of the Equality Act 2010. I took the liberty of writing in some detail to my noble friend to explain why I took a different view and, while I may not have completely convinced his officials of the rightness of my position, I now understand that the Government are inclined to resolve the issue by putting the matter beyond doubt at a later stage in the passage of this Bill. On the basis that I am right about that and that the amendment will be made, then I am grateful to the Government for their concession and will say nothing more at this stage.
Lord McNally
I do not wish to pre-empt or shorten the debate, but it might help if I were to say something here. I hope that my noble friend Lord Marks will withdraw Amendment 6 as it is overtaken by the subsequent amendment. I will respond first to my noble friend’s Amendment 7, which seeks to apply a tipping-point principle to appointments to the UK Supreme Court.
The Government’s position has always been that a tipping-point principle should apply to the Supreme Court and we believed, as he said, that the tipping point in Section 159 of the Equality Act 2010 already applied to such appointments. However, as my noble friend Lord Marks explained, there could be a contrary legal view and I can see that there may be merit in the argument that this matter should be put beyond doubt. Therefore, I am happy to say that my right honourable friend the Lord Chancellor is content for me to take this amendment away for consideration with a view to returning to the matter when the Bill goes to the other place.
Amendment 8 concerns whether the Lord Chancellor and Lord Chief Justice should be under a statutory duty to encourage judicial diversity. Following the debate on this issue on Report, I agreed to discuss the matter further with the Lord Chancellor and Lord Chief Justice in order to reflect the strength of feeling expressed by the House. Amendment 8 is in response to that further consideration.
There is much agreement in the House about the importance of a diverse judiciary that more closely reflects our society. There is also agreement that strong leadership is needed to bring about this change. Amendment 8 helps achieve that leadership by giving a clear declaration of the importance of the Lord Chancellor and the Lord Chief Justice promoting diversity. Therefore, as I explained, in view of the reasons and undertakings I have given, I hope that my noble friend Lord Marks will withdraw Amendment 6 and will not move Amendment 7. I commend to the House Amendment 8, relating to a diversity duty, and I thank the Constitution Committee and other noble Lords who made the case so strongly for an amendment of this sort. I emphasise again that I will take away Amendment 7 for suitable representation in the other place.
Baroness Jay of Paddington
My Lords, my name is not on this amendment but I have spoken several times on this subject during the course of the Bill. I welcome the Minister’s further discussions with the Lord Chancellor, and the government amendment. As he said, it reflects the Constitution Committee’s considerations of this matter which, as he mentioned in the discussion on a previous amendment, have been going on since the beginning of this year. I am delighted that he has taken the view that he has and that he is proposing Amendment 8.
Lord Pannick
My Lords, I, too, am very grateful to the Minister for bringing forward Amendment 8. It is important to underline that Amendment 8, and the personal obligation that it will place on the Lord Chancellor and the Lord Chief Justice, is not to question in any way the commitment and the work done in this field by the current Lord Chief Justice, Lord Judge, which has been considerable. Nor is it to suggest that appointments to the Bench should be made other than on merit. There are highly qualified women and members of ethnic minorities at the Bar, in solicitors’ firms, in the CPS and in the government legal service, and every effort needs to be made to communicate the message that applications from them for judicial appointment would be specially welcomed.
The House heard in Committee and at Report the personal commitment of the noble Lord, Lord McNally, on the issue of promoting judicial diversity. I am pleased that through his efforts the amendment has been tabled on behalf of the Government.
Baroness Prashar
My Lords, I, too, welcome this amendment and thank the Minister for accepting the arguments. The Judicial Appointments Commission recommended this way back in 2008 and I am delighted that it has been agreed and that it is recognised that promoting diversity is a tripartite effort and that leadership is much needed. I want to put on record my thanks.
Baroness Benjamin
My Lords, I would not normally speak in a debate such as this, but this matter is very close to my heart. I thank my noble friend for bringing forward the amendment and, most of all, thank the Minister for his response. I hope that this provision will be embedded in our society to make sure that people of diverse backgrounds feel as if they matter and that people care.
Baroness Neuberger
My Lords, as noble Lords know, I chaired the Advisory Panel on Judicial Diversity a couple of years ago. I have had lengthy conversations with the Minister on this subject. I am absolutely delighted—and want to place it on record—that we have Amendment 8 and that this commitment is now on the statute book. This really is a wonderful day.
Lord Beecham
My Lords, the Opposition are delighted to join in this outbreak of consensus and congratulate the Minister on a very statesmanlike response.
Lord McNally
Given those interventions, I wish only to quote somebody who never made it to this House and say that this is not the end of the beginning. I knew that I would get that wrong, but noble Lords know what I mean—it is the end of the beginning. Of course, the person I am quoting rehearsed these things much more than I do. However, I hope that this is the start of a real drive for diversity. Those who have just contributed to the debate have played a major part in that. However, as we sometimes find in other debates in this House, there is battle still to be joined in this area.
Lord Beecham
Perhaps the Minister would care to fortify himself before these debates in the same way that Mr Churchill did.
Lord McNally
“Encouraging diversity9A In Part 6 of the Constitutional Reform Act 2005 (other provisions relating to the judiciary) after section 137 insert—
“137A Encouragement of diversity
Each of the Lord Chancellor and the Lord Chief Justice of England and Wales must take such steps as that office-holder considers appropriate for the purpose of encouraging judicial diversity.””
Lord Woolf
“Part 6A Provision for female offenders28A (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 wherever appropriate to carry out unpaid work and participate in programmes designed to change offending behaviour with the particular needs of women in mind.”
Lord Woolf
My Lords, I begin by disclosing an interest in respect of this amendment as chairman of the Prison Reform Trust. I also acknowledge at the outset that this amendment, which is supported by the noble Lord, Lord Ramsbotham, builds on an amendment tabled by the noble Baroness, Lady Linklater, and mirrors an amendment tabled by the noble Baroness, Lady Hamwee. I am grateful to them for the work they have done.
The noble Lord, Lord Rosser, supported the amendments which were proposed on Report. I hope that that will be his position today. I also hope that the good will which has just been displayed on both sides of the House will continue and apply to these amendments as they are very much like the amendments that the Minister and I have discussed on a number of occasions with regard to restorative justice. These amendments come out of the very distinguished report of the noble Baroness, Lady Corston, which is well known to this House, A Review of Women with Particular Vulnerabilities in the Criminal Justice System. That report was made as long ago as 2007 and at the time was received by all Members of this House with approval. I hope that I may take up a moment of the House’s time to read paragraph 3 of the report’s executive summary, which seems to me to sum up the report. The noble Baroness said that,
“it is timely to bring about a radical change in the way we treat women throughout the whole of the criminal justice system and this must include not just those who offend but also those at risk of offending”.
She said that this will require,
“a radical new approach, treating women both holistically and individually—a woman-centred approach”.
She continued:
“I have concluded that there needs to be a fundamental rethinking about the way in which services for this group of vulnerable women, particularly for mental health and substance misuse in the community are provided and assessed. There needs to be an extension of the network of women’s community centres to support women who offend or are at risk of offending and to direct young women out of pathways that lead into crime”.
I urge the House to accept that the amendments are very much in the spirit of that report. When similar amendments were proposed on Report, the Minister was very sympathetic towards them, as one would expect. However, he advanced the argument that that was not the time to accept them because the Government’s strategy regarding women in the criminal justice system had not yet been rolled out. He pointed out that the fact that a Minister had been appointed to be the champion of women in this area was a huge advantage and that we should be reassured by that and accept that the Government had the right intentions although they were not in a position to move on the matter at that stage. Certainly, I readily accept that the appointment of the Minister to whom I have referred, Helen Grant, is a great advance in this field. Her appointment should be warmly welcomed. I anticipate that over time great things will come from that.
However, we have drafted the amendments which the House is now considering in a way which we respectfully suggest could not in any way interfere with the rolling out of the Government’s strategy, once that strategy is revealed. If I am wrong in what I have just said and the Minister can indicate to me why, some five years after the publication of the Corston report, the amendment should not be the first recognition in legislation of what the report recommended, I will certainly consider my position further. However, I am bound to indicate to the Minister that, although I accept entirely that his intentions are the very best, I cannot see how the amendment could cause any embarrassment to the rolling out of the strategy to which I referred. I beg to move.
Baroness Corston
My Lords, I congratulate the noble and learned Lord, Lord Woolf, on tabling this amendment, for which I signify my support. However, I have to convey to the House an element of great frustration in that by the time the strategy which we have been promised is published three years will have been wasted. I have now wasted quite a lot of my patience listening to Ministers say they are following the Corston report. It is not true.
I entirely endorse what the noble and learned Lord, Lord Woolf, said about women at risk of offending. Giving money to a probation trust does not provide any services to women at risk. This is something that over time I have pointed out to Ministers and which I conveyed this morning to the Justice Committee of another place. Given the time of day and the pressure of business, I wish briefly to signify my agreement to the amendment tabled by the noble and learned Lord, Lord Woolf, and to urge the Government not to waste any more time.
Lord Ramsbotham
My Lords, I echo everything that my noble and learned friend Lord Woolf has said. That is why I have added my name in support of the amendment. I also note what the noble Baroness, Lady Corston, said about the strategy. This is not the first time that we have had a champion to take forward women’s issues. I am interested that most recently the shadow Minister of Justice in the other place supported the cries which many of us have made over many years for a women’s justice board rather than just a champion. However, that is not the point of the discussion today.
I shall speak for a short time to my Amendment 10, which mirrors the suggestion for women but points out the need for special treatment of young adult offenders. I do this with a slightly heavy heart because six months ago, during earlier consideration of the Bill, we were promised a government response to the probation consultation. I had hoped that we would have had that by now setting out how probation trusts would be enabled to deliver appropriate support and rehabilitation arrangements for young adult offenders. It has not happened. I warmly agreed with the noble Lord, Lord McNally, in Committee when he said that if only we could extend some of the lessons that we have learnt from the treatment of young offenders under the age of 18, we might be able to have a similar impact on those aged 18 to 21 or 18 to 25. That has not happened. I note with wry amusement that the Minister castigates those of us who question current plans to commission justice services on a payment by results basis by saying we are looking a gift horse in the mouth because of the Prime Minister’s involvement in the rehabilitation process. I have to say that I have been looking for gift horses in this field for the past 17 years and they have all turned out to be chimeras and flown away.
Several times when discussing this issue I have suggested that instead of the clocks around this House saying 0:10, they should say PANT—standing for “people are not things”. We have had too much about things and not enough about people in this particular group. I shall quote four reasons. Young adults have many complex needs. They come on top of the physical and mental maturing that is taking place. When you add homelessness, poverty, unemployment, educational failure, substance misuse, mental health problems and victimisation, exacerbated by all child support services ceasing at the age of 18, you have an unhappy group. Although the age group makes up only 4% of the population, 15% of those starting community sentences come from it, as do 14% of those starting custody. When no one is responsible for looking after them in the criminal justice system, then you have a group which clearly needs attention.
It is interesting that the Barrow Cadbury Trust’s Transition to Adulthood Alliance has proved that imposing additional requirements without the necessary support to help these people understand what a sense of responsibility means and to address the underlying causes of offending and their chaotic lifestyles is likely to set them up to fail. This all boils down to the fact that people are at the heart of looking after the needs of these young adult offenders. In particular, there needs to be long-term contact with a responsible adult. That is worth all the programmes, initiatives, commissioning and payment by results that you can think of. Somebody is going to make that difference. If I make an impassioned appeal yet again for this amendment, it is because people are at the heart of what this country is all about. As I have said many times, if we as a nation continue to make inappropriate support and rehabilitation arrangements for this vulnerable group, then we fail them and deserve to be castigated for doing that.
Baroness Kennedy of The Shaws
My Lords, I too support this amendment. Those who work at the front line with women who come before the courts share the frustration voiced by my noble friend Lady Corston. So much time has passed since her report that it is a serious failure for us as a nation that we have not dealt with this issue of women offenders and the best way of responding to it. I know that the Minister is well aware of the statistics. About 80% of the women who come before the courts are victims, brought up in homes where domestic violence was part of the round or where they were sexually abused. They are more victims than many who readily bear that title. Over 60% of them suffer from mental illness and 66% are mothers with children. When we send them to prison, we actually visit the effects on whole families, bringing the care system into play. Housing is often lost and the consequences are dire.
Real speed is needed to respond to this. I attended a conference only a week ago chaired by the previous Chief Inspector of Prisons, Dame Anne Owers. The room was full of people who work on the front line in the probation service. All said that they hoped the Government would take urgent action. I support the amendment but I also want us to say that my noble friend Lady Corston did an absolutely vital piece of work. It reiterated what many people had said before, recently in Scotland by Dame Elish Angiolini. I hope that the Government will see that this is a story that has been told over and over again. Somehow we have to respond with greater speed than has happened so far.
Baroness Howe of Idlicote
My Lords, as someone who has put her name to amendment after amendment on this issue of why on earth we did not include women in a Bill on crime and courts, I hope that the Government will do something about it. The Corston report is totally brilliant. We have all agreed that. It set out the areas that needed attention and not just that: we all know that there were many reports before it. It is not just a question of five years, but of report after report making special recommendations about the needs of women offenders. We all know the degree of mental health problems and sexual and other forms of abuse that these women have had over the years. Equally, we know of the terrible damage to children when families are broken up and children taken into care.
Returning to what my noble friend said about young offenders, I was looking at a report by the probation inspectorate. Ofsted and, I think, Estyn did a sample looking at the support that these young people had. Many of them have, no doubt, come from homes such as this, and have been in care for goodness knows how long. More than a third of these children examined by the inspectorate were placed more than 100 miles from home, and a lot of them were found in situations where they were almost next door to offenders. One was found having sex with a 15 year-old boy in a children’s home. It is not exactly a pretty picture.
Although we did not manage to reach these amendments on the days that we were promised they would be reached, and therefore could not vote on them and cannot vote on them now, will the Government please think very hard about making these changes? I have waited a long time this afternoon and have not taken up time on other amendments. We should not wait just because we have a brilliant Minister; I am sure that she is brilliant. Above all, I hope that we can now ensure that mention is made in the Bill of the needs of women, who are a very important group.
Lord Phillips of Sudbury
My Lords, I hope I will be forgiven if I contribute briefly to this debate because I have taken little part in it hitherto. However, I cannot resist rising to speak strongly in favour of Amendment 10.
I started my life in the legal profession traipsing around the magistrates’ courts of eastern England. For several years, I said to myself at the end of every day that there but for the grace of God would I have gone. We are an extraordinary race. We are so intelligent and forward-thinking in many ways, yet when it comes to penal affairs, we have an extraordinary ability to fail to see our own best interests. Today, we would all agree that community life is at a low ebb, and the weaker that the communities of this country are, the greater the likelihood of certain groups of young adults casting themselves adrift and offending against the mores of society, which, unfortunately, they often do.
We are in a society obsessed with money, celebrity and sex. There is a group of young men and women who think nothing of themselves and are thought nothing of. They have succeeded at nothing and failed at everything. Educationally, they are a failure. They have little prospects, little ambition, little self-esteem and no respect. It is this group who Amendment 10 seeks to help. Again and again, we allow our distaste for the behaviour of many of these young people to stand in the way of intelligent redress. It is in our self-interest to ensure that this amendment, or something like it, is passed and that Governments of all persuasions are required to do something specific about it. It is for those reasons that I strongly support Amendment 10.
The Earl of Listowel
My Lords, as we have heard, many of these women will, as children, have been abused in their own homes. A disproportionate number will have then entered the care system, and a disproportionate number of those will then have their children taken into care. A disproportionate number of the young people we have been discussing will have been abused in their homes when they were children and will have been taken into the care system. Although there have been improvements in that system, many will have experienced multiple foster placements—as many as 30, and some more than 30. They will often have experienced many changes in social worker.
I commend these amendments to the Government and I particularly commend the words of my noble friend Lord Ramsbotham when he said that what these young people need is a long-term, enduring and reliable relationship with a responsible adult. Again and again, reports into the care system identify that continuity and reliability is the key to improving outcomes for these young people. I hope that the Minister can give some encouraging response to these amendments, as I am sure that he will.
Lord Rosser
My Lords, given that this is Third Reading, I will attempt to be reasonably brief. I want to talk separately to the two amendments in the group.
We support the principle behind Amendment 10, given that it is clearly designed to enhance the prospects of rehabilitation and reduce reoffending. That amendment is, no doubt, prompted by the fact that many child-focused support services fall away when young people reach the age of 18. Our reservation relates to the potential cost of delivering the services called for in that amendment because it seems to be a little open-ended, unlike the amendment on female offenders, which is more specific.
The first part of Amendment 10 requires each probation trust,
“to make appropriate provision for the delivery of services to young adult offenders”,
and goes on to say that this,
“shall include provision for services which provide support and rehabilitation appropriate to the level of maturity of young adult offenders and which increases the likelihood of compliance with community orders”.
In other words, it would appear that these services will either be in addition to community orders or be extensions of community orders, because that amendment refers to these services increasing,
“the likelihood of compliance with community orders”.
It is not clear what these services will be and whether they are likely to involve a significant, or potentially significant, financial commitment going well beyond existing and projected levels of expenditure.
The issue raised by Amendment 10 is important and will, no doubt, receive further consideration when the Bill reaches the other place, including on the financial and resource commitments that would or would not be involved. However, because we do not have a feel for the cost of implementing that amendment in a way necessary to achieve the objectives referred to by the noble Lord, Lord Ramsbotham, we are not able to give it our support tonight and will abstain if it is put to a vote.
Turning to Amendment 9, we had a discussion on Report about provision for female offenders. In his response, the Minister reiterated what the Government have been doing in this field and then stated that they would no longer be publishing their strategic objectives for female offenders by the end of this year, which the noble Lord had indicated in Committee was the intention, due apparently to change of Secretary of State in September. The noble Lord told us that the delay was good news, which presumably means that if the Government had kept to their declared intention, as stated by the Minister in Committee, it would not be such good news.
The Minister’s argument for rejecting the amendments moved by two of his noble friends on Report was not one of cost—indeed, he told us of additional money being provided for the funding of women’s community services—but was simply because he did not think that the present situation would be improved by a statutory commitment on provision for female offenders, as provided for in those amendments. As has already been commented on, the noble Lord went on to say that some of his colleagues had an ability to look gift horses in the mouth. He did not tell us why the situation would not be improved by a statutory commitment. There is a body of opinion in your Lordships’ House that thinks that a statutory commitment in a Bill—with a schedule on dealing non-custodially with offenders that makes no specific reference to, or provision for, women, and with NOMS funding for women’s centres guaranteed only until March 2013—will be far more effective than soothing words and sincere good intentions in ensuring that appropriate provision for female offenders is made, now and in the future, through agreeing to the amendment. We support it and will do so, should it be put to a vote.
Lord McNally
My Lords, we are soon to be passing the three-hour limit for these debates at Third Reading. A reoccurring theme in all the debates on the Bill has been the straying into what I would describe as Second Reading speeches and an attempt to rerun cases that have been made. I respectfully say to the House that if this is going to be the norm, we may well have to talk to the Opposition about how we handle Third Readings. I am not talking about whose amendment it is, I am talking about the usual channels. If we continually have complete reruns of debates, it does make business management extremely difficult. Sometimes I think that noble Lords overemphasise winning votes in this House; making things happen. I actually think that what has the greater influence is the well argued debate rather than the vote, but perhaps that is because I am getting used to being beaten at this Dispatch Box.
We had an informed and extensive debate about female and young adult offenders on recommital and Report. I would also say that sometimes the speeches of the noble Lord, Lord Ramsbotham, make it sound as though nothing has happened in the past 17 years. Successive Governments have grappled with this, and certainly during my term of office I have fought very hard to put the specific problems of female prisoners to the forefront. I fully accept the points that were made by the noble Baroness, Lady Kennedy. I am disappointed that the noble Baroness, Lady Corston, thinks that nothing has been done with her report. We expect to publish in January, and I make no apologies for the delay; I would rather get something right than meet an artificial deadline. I hope that when we publish in the new year noble Lords will see the work that Helen Grant has been carrying out with the support of the Lord Chancellor. As I have said before, do not belittle the fact that a Conservative Lord Chancellor has openly said that he sees the necessity of giving priority to women prisoners, as he said today at Questions in the House of Commons. Hopefully in the new year we will put that strategy into place, and I am sure that we will have a good opportunity to debate that.
Equally with young adults, it is not a matter of carving out from one Government to another on this. I read the report that was published today about young people in care with a sense of collective shame at how these things are being dealt with. However, as those who have previously had those responsibilities know, it is often a matter of convincing colleagues in government, and finding resources when there is competition from other departments that have equally strong arguments. I do not think there is any doubt that we believe that the rehabilitation of both groups is important. We strongly agree with the arguments that have been employed, and that is why we are already investing significant effort and resource to ensure that female and young adult offenders receive the right support.
In the previous debate, I gave examples of the many projects, including those in Lancashire, Durham and Derbyshire, that trusts are running for female offenders. For young adults, likewise, many probation trusts are already coming up with innovative approaches to supporting this group. For example, in London the trust is working on an imaginative project by which some staff will work in both the youth offending team and the trust. This is to ensure that the transition between the youth and adult estate works effectively. In the east of England, probation staff have been developing closer links with leaving care services to ensure that the particular needs of these young adults are being met.
I hope, therefore, that noble Lords will recognise the Government’s strong commitment to providing the right support for women and young adult offenders. There is agreement across this House that we need to do so. What we are debating is the mechanism for delivering that support, not whether we should deliver it. It is important to be clear here that the projects I mention have not been centrally imposed. They have been delivered from the ground up, by committed and passionate staff in probation trusts, to respond to the needs of women and young adults in the area.
Local innovation is critical if we are to have effective services for these groups. I believe the system we already have strikes a good balance between local innovation and central support. I do not believe that a statutory duty is necessary to deliver this.
The relationship between NOMS and probation trusts already gives a framework that ensures these groups are prioritised. For example, trusts are already required by the NOMS Commissioning Intentions document to make appropriate provision for women in the community. Trusts are currently discussing their proposals for services for female offenders in 2013-14 with commissioning experts at NOMS, and will be challenged where these do not appear to be sufficiently robust.
Similarly, I have already mentioned on Report that the operating manual on unpaid work requires that women should be allocated to work placements which take account of their needs. This sets out a presumption that female offenders will not be required to work alongside male offenders.
On young adults, our current system balances local delivery with central support. As with female offenders, trusts are required by NOMS to commission or deliver an appropriate range of services to address the causes of young adults’ offending. To support this, NOMS has provided trusts with information on the specific needs of young adults that will help them and other providers take an evidence-based, effective approach to tackling re-offending. This system allows for local decision-making on how best to meet the needs of these groups.
In short, I wholeheartedly agree with the arguments that noble Lords have made about improving outcomes for female and young adult offenders. I hope that I have reassured noble Lords that NOMS and probation trusts are already taking a tailored approach to supporting them. However, our focus should be on supporting local areas to make further improvements. The system that we have already allows for this. Creating new statutory duties for trusts is not the right way to bring about the improvements that we want for these two groups.
In light of these assurances, I hope that the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Ramsbotham, will agree not to press their amendments. Perhaps I may give just one little bit of encouragement to the noble and learned Lord, Lord Woolf. Yes, we did have lots of talks about restorative justice, and restorative justice is in this Bill, but getting it into the Bill took lots of talks between and within departments, letters to various Cabinet committees et cetera. Some of these things take time, but there should be no doubt that young offenders and women offenders are on the Government’s radar. Ministers at the MoJ, and particularly my colleague, Helen Grant, are working very hard to make progress in these areas. With those assurances, I hope that noble Lords will agree not to press their amendments.
Lord Woolf
My Lords, I thank those who have spoken in favour of the amendment and all those who have taken part in this debate, and I thank the Minister for his response. I hope that he will accept from me that I have no reservations in accepting that he sincerely believes what he has just said to the House.
However, there is a difference between the approach of the Minister and that which I was urging upon the House. I say that the situation with regard to women in the criminal justice system is one where there is a crying need for there to appear in the statute something which speaks of Parliament’s concern.
I have great sympathy for my noble friend Lady Corston in her feeling of frustration at a lack of action in respect of her report, which was welcomed so warmly. It seems to me that, in view of the issue between us and because the Minister has not sought to identify any possible prejudice that could come—
Lord McNally
I can only make one last appeal to the noble and learned Lord. Does he really think that it will advance one inch the cause that he espouses if we have a Division at this point, where people who have not been in the debate will come in and be told, “Oh, you’re voting in favour of women or voting against women.”?
Lord McNally
It is no use saying “shame”. There is no division between us, and to suggest that there is does not further the cause.
Lord Woolf
Well, of course, I listen very attentively to what the Minister says, but perhaps he will forgive me if I bring the agony to an end by indicating that, as I see it, there is nothing in the proposed provision which can harm the Government’s good intentions. I think that there is a difference of view here: between those who feel that the statute should contain a statement of recognition of the special position of women in the criminal justice system and those who do not. In those circumstances, I seek the opinion of the House in respect of my amendment.
Lord Ramsbotham
“Part 7AProvision for young adult offenders30A (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 young adult offenders.
(2) Provision under sub-paragraph (1) shall include provision for services which provide support and rehabilitation appropriate to the level of maturity of young adult offenders and which increases the likelihood of compliance with community orders.
(3) For the purposes of this paragraph “young adult offender” means a person who is aged at least 18 but under 21 when convicted.”
Lord Ramsbotham
I listened with care to what was said, particularly on the question of resources. I think that in the circumstances it makes absolute sense for this amendment to go to the other place and to be debated as fully as possible. Therefore, I shall not move this amendment.
Arrangement of Business
Baroness Anelay of St Johns
My Lords, this may be a convenient point to make a business statement relating to the proceedings today. Clearly, when the matters before us were set down, we had anticipated in the usual channels that the approach to Third Reading would be normal—that is, the practice of the House is normally to resolve major points of difference by the end of Report stage and to use Third Reading for tidying up. Therefore, in the usual channels we felt that we were making an appropriate disposition of business today, whereby this Bill would be followed in the normal manner by a short Second Reading and that, after that, we could have a debate on—if I can colloquially call it this—matters of Leveson.
This Third Reading has gone beyond the normal time that one would expect for a Third Reading, and indeed some of the discussions have gone quite wide. Therefore, something that one might describe it as a little bit of a delegation came from those interested Peers who had been sitting very patiently waiting for their opportunity to take part in what, after all, is a major debate on the press and the media and all the matters surrounding the important report that was issued and known colloquially as the Leveson report. Those Peers felt that it had now become inappropriate for the House to consider the matter at a late hour.
I had some discussions with the members of that little, but very forceful, delegation, who felt that they were relaying some of the views of other Members. I certainly listened very carefully. I have had discussions with the opposition Front Bench, and I am very grateful to them, as ever, for their co-operation in the usual channels. As a result, it has been agreed that the Leveson debate will not proceed today but that we will find a date for it as soon as possible early in the new year. I have already had preliminary discussions with the Opposition and I feel sure that we will be able to find a convenient date very quickly. As soon as that has been achieved, I will naturally make a statement to the House. If it is a matter that we cannot resolve before the House rises, I will ensure that all party groups and the Convenor are able to put out the message as soon as possible so that the inconvenience which has clearly been experienced by the large number of Peers wanting to speak today is perhaps brought to an early end.
Lord Bassam of Brighton
My Lords, on behalf of the Opposition I thank the noble Baroness for her statement. She has been very gracious in agreeing to rearrange the business. It will not be to everybody’s convenience, but at least it will be at a more convenient time and will enable a more congenial debate. Therefore, on behalf of these Benches, I am very grateful to the Government for their swift action on this point.
Lord Soley
My Lords, the Leveson debate is incredibly important not just for this House but for people around the country. For us to have held the debate in the early hours of the morning—which is what it would have gone into—would, frankly, have been profoundly wrong. I know that I have an interest, inasmuch as I produced the first Bill on the press some 20-odd years ago, as well as many other things, but I really feel that we would not have done ourselves or the public any good if we had continued with this. Therefore, in my view, the Government have made the right decision. I appreciate that it is inconvenient for some people, but it is the right decision and I am grateful.
Lord Stoddart of Swindon
My Lords, the statement just made by the Chief Whip is a very wise one, but perhaps I may put this point to her. The Leveson report is very long and detailed. Would she consider, along with the other parties, whether we should have a two-day debate when it comes back in the new year?
Baroness Anelay of St Johns
My Lords, I have already had preliminary discussions about the revised debate with the Leader and chief representatives of the Opposition and I am grateful for that. I shall consider all the options with regard to tabling the debate. Suffice it to say that we will ensure that enough time is made available and that adequate advance notice is given of the rescheduling of the debate.
Lord Prescott
My Lords, with regard to the new timing of this debate, I accept that a delegation had to get home instead of taking part in it and I understand the difficulties, although it was their choice rather than that of this House. However, will the Chief Whip make sure that we have the debate before any decisions are made? This is a chance for the House of Lords to give an opinion on the most important issue of the day, but if we end up giving that opinion after the decisions have been made, that will be most unfortunate. That is what we have given up tonight. Although we cannot tell when all this will be settled, let us at least find a time that allows us the possibility of expressing our views before any decisions are arrived at.
Baroness Anelay of St Johns
My Lords, I agree entirely with the noble Lord, Lord Prescott. The matter of urgency was impressed on me by the delegation.
Lord Palmer
My Lords, does not the Chief Whip agree that the noble Lord, Lord Trees, ought to be given a letter of apology? He has gone through the agony of having to wait to make his maiden speech, but now he has had to postpone it. That really is pretty agonising.
Baroness Anelay of St Johns
My Lords, I think that perhaps the noble Lord, Lord Trees, in waiting to make his maiden speech, has seen how self-regulation takes place in this House. Sometimes the rules are so elastic that no one can predict the way in which our debates may extrapolate and develop into new realms.
The Earl of Erroll
My Lords, this Third Reading underlines the importance of returning to our previous custom of pressing amendments to a Division at the Committee stage as a matter of principle and then tidying up on Report. The practice of withdrawing amendments in Committee and then pressing them on Report is leading to this problem of tidying up at Third Reading. I think that we should return to our old custom of pressing most issues to a Division in Committee, even if they are deficient in some way, because the Report stage is for tidying up.
Crime and Courts Bill [HL]
(12 years ago)
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The Deputy Speaker (Baroness Fookes)
Perhaps I may assume that the House is now ready to return to the Bill.
Amendment 11
Lord Goldsmith
Lord Goldsmith
My Lords, this amendment can be dealt with briefly, and I would have said that before the Chief Whip made her statement. It concerns the question of the extent of the discretion that prosecutors will have, subject to the double lock of supervision by the courts, in reaching agreements on deferred prosecution agreements. Along with other noble Lords, including the noble Lord, Lord Marks of Henley-on-Thames, I have been concerned that the Bill does not appear to provide a discretion on the maximum reduction of financial penalty. For example, on 10 December at col. 968 the noble Lord, Lord Ahmad of Wimbledon, talked about a maximum discount of one-third, and it was not the first time that that had been said. That led me to consider whether that was the view of the prosecutors, and having made inquiries of them, it turns out that that is not what they thought the Bill was going to do. It was because of that, and only because of that, that I wanted to raise the matter again for clarification.
I wrote to the noble Lord, Lord McNally, and I am grateful to him and to his officials for his detailed response. What I asked in substance was whether it was in fact the case that one-third was not the maximum discount on the financial penalty that could be agreed; it could be greater than that. I understand from the Minister’s response that, shortly put, the one-third discount is not the maximum that can be agreed and that in appropriate cases, there could be an agreement—I underline, subject to the agreement of the court—which could be greater than that. If that clarification can be made, which otherwise would go uncorrected, although I personally would still prefer to see a greater discretion, at least it would deal with the major problem of an apparent one-third maximum reduction. For those reasons, I beg to move.
Lord Beecham
My Lords, I support the amendment moved by my noble and learned friend, although I do not anticipate that he will seek to divide the House on it. It is interesting to note that the amendment has come before the House on the same day as a question from the noble Baroness, Lady Williams of Crosby, that referred, of course, to the settlement of cases in America. She referred to a billion-pound settlement reached under a deferred prosecution agreement over there and contrasted that with the very modest levels of financial penalty incurred in this country under processes that usually involve the Serious Fraud Office or, in revenue cases, Her Majesty’s Revenue and Customs.
Throughout our debates on deferred prosecution agreements, my noble and learned friend has pointed to the need to incentivise potential corporate defendants. At the moment they are only corporate defendants, but in due course there may be a case for extending them to individual defendants. He has stressed the need to adopt this procedure rather than rely on prosecution because, as has been pointed out on several occasions, the success rate of the Serious Fraud Office in these cases has been, to put it mildly, not very marked. Unless there is a credible threat of a successful prosecution, there is virtually no incentive for a defendant corporation to plead guilty and every incentive for it to contest the case. The corporation has a very reasonable prospect of being successful. The case would seem to be similar in revenue cases, hitherto at any rate. HMRC has been apt to settle for rather more modest amounts than one might have expected relative to the level of abuse that is alleged to have taken place. The advantage of the agreements, as has been pointed out by my noble and learned friend and several other noble Lords, is not only that there is a financial penalty available as part of the agreement, but that other measures are available as well.
An additional reason for the Government, through their relevant agencies, to press for a deferred prosecution agreement is because, first, there is a greater incentive for companies to settle, knowing that they will not have to meet the full costs which they can take into account in balancing their considerations about whether to defend or not, and secondly, from the public interest perspective, there can be additional conditions that might apply to such an agreement. Those might be monitoring, changes in practice and so on. Furthermore, there can be a period during which matters can be reviewed. All of this suggests that greater flexibility in discounting from what might be expected to be the maximum fine would assist the whole process, although that does raise the question of what the sentencing guidelines from the Sentencing Council will be with regard to these penalties. Perhaps we ought to be moving more in the direction of the level of fines imposed under the American system, which it is hoped would increase the incentives.
My noble and learned friend is clearly minded to accept the position on the basis of the Minister’s letter. From the Opposition’s perspective, we are content with that, and we look forward to seeing in due course how the system moves forward. We would hope also to have an opportunity to review it, as has been discussed in previous debates. I commend my noble and learned friend on his persistence in this matter and the Minister on what has apparently been a sympathetic response.
Lord Ahmad of Wimbledon
My Lords, it is always a pleasure to respond to the noble and learned Lord, Lord Goldsmith, at a rather earlier hour than has been the case in our previous exchanges, and that is always welcome. However, perhaps it is later than I thought would be the case.
Following the debate on Report, I know that my noble friend Lord McNally has corresponded with the noble and learned Lord and reassured him that paragraph 5(4) of Schedule 16 affords a broad discretion to prosecutors and the court when considering a financial penalty term for a deferred prosecution agreement. In particular, on the specific point raised by the noble and learned Lord, my noble friend Lord McNally has confirmed in his letter that the extent of the discretion is such that scope to reduce financial penalty will not be restricted to a maximum of one-third in all cases.
It is appropriate that the noble and learned Lord, Lord Goldsmith, has pointed to the additional discounts in the sentence available for convicted offenders under Section 73 of the Serious Organised Crime and Police Act 2005, which was predated by more informal arrangements. It is our view that in a suitable case the parties to a DPA and the court could consider whether this further discount might be available. The level of any such additional discount would depend on the circumstances and of course reflect the level of assistance given; and the parties should be guided by sentencing practice and pre-existing case law on this matter.
In the light of these assurances and the correspondence that has taken place, and, of course, the related assurances that I have given, I trust that the noble and learned Lord, Lord Goldsmith, will withdraw his amendment.
Lord Goldsmith
My Lords, I thank the noble Lord, Lord Beecham, for what he said and for reminding us and the Government that we are going to come back to review these arrangements, we very much hope, for a number of reasons, including this one. My primary concern was to get an assurance that one-third was not the maximum discount that could be agreed. In the light of that assurance, I beg leave to withdraw the amendment.
Lord Taylor of Holbeach
My Lords, I would like to take this opportunity to thank the Bill team for its support. This has been a long, complex Bill, and two departments of government have had to contend with two different Ministers. If I might say so, my noble friend Lord McNally and I have enjoyed working together on this Bill. My noble friend has, of course, had a change of partner since Committee stage, and I know that my noble friend Lord Henley would like to be associated with these remarks. I thank, too, those who have supported us through this Bill.
Lord Beecham
My Lords, I echo the thanks to the Bill team for its support and to the Ministers. I congratulate the noble Lord, Lord McNally, on his new civil partnership. I also commend and thank the noble Lord, Lord Henley, for his contribution. I feel as though I and my colleagues—I speak now for two opposition teams as well—are emerging from a six-month sentence, which is perhaps an appropriate way to regard these past few months dealing with this Bill. It has been a challenging but instructive and, at times, entertaining experience, and I am grateful that for the most part it has been conducted in the usual spirit of your Lordships’ House. We look forward to future pieces of legislation—preferably deferred for a while; some of us need some time to recover.
I am grateful to the ministerial team and, indeed, to noble Lords—especially noble and learned Lords—who have contributed so much to a very considered deliberation of an important measure.
Small Charitable Donations Bill
(12 years ago)
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Lord Newby
My Lords, the gift aid small donations scheme was announced as part of a package of measures to encourage charitable giving in the 2011 Budget. It is a complementary scheme to gift aid, which, as noble Lords will be aware, is one of the main tax reliefs available to charities and their donors and is now worth more than £1 billion per year to the charity sector.
The Government recognised, however, that charities were missing out on a significant amount of potential gift aid income because it is not practical for them to collect gift aid declarations from passers-by in the street or members of a congregation who give small cash donations. This Bill, therefore, enables charities to claim a gift aid-style top-up payment on those small cash donations without the need for a gift aid declaration. Most charities will be able to claim top-up payments on up to £5,000 worth of small cash donations in a tax year. This means that they will have up to an additional £1,250 of income each year to help advance their charitable purposes. This is a significant boost to the charitable sector, which will particularly help small and grass-roots charities. Her Majesty’s Revenue and Customs estimates that this scheme will be worth approximately £100 million in additional funding to the sector each year once the scheme is fully up and running.
In constructing the scheme, the Government have had to strike a balance. The scheme must be fair and affordable, and it must be protected from fraud. Unfortunately, all repayment schemes attract fraud. HMRC already experiences fraudulent claims for gift aid—which is a more secure system than the new scheme will be—because charities have to keep more records of their gift aid donations. The gift aid small donations scheme is cash-based, so there will be only a limited paper trail. That means that it is highly likely that some fraudsters will be attracted to the new scheme, so it has been necessary to put some safeguards in place.
First, a charity must have had at least two years of a good gift aid track record with HMRC and have made successful gift aid claims in at least two out of the last four tax years. This will allow HMRC to get a good picture of a charity’s ability to claim gift aid correctly.
Secondly, charities and community amateur sports clubs must also claim gift aid alongside any claims for top-up payments under the gift aid small donations scheme. This means that a charity will need to successfully claim on traditional gift aid donations worth at least 10% of their claims under the new scheme in the same tax year. For example, to claim top-up payments on £5,000 of small donations, a charity must also claim gift aid on at least £500 of other donations in that year. This matching requirement allows HMRC to monitor the continuing compliance of the charity. The new scheme is designed to be light on paperwork, so it will be difficult for HMRC to comprehensively check whether a charity is compliant. So the ability to check the gift aid claimed by the charity gives HMRC a reasonable proxy to ensure that the charity is also claiming correctly under the new scheme.
Following representations in another place that the eligibility criteria were too strict, the Government tabled amendments that have reduced the matching condition from a minimum of 50% of gift-aided donations to 10%. The Government also agreed to reduce the eligibility criteria to claim under the scheme. A charity may become eligible to claim under the scheme after two complete tax years instead of three. In addition, instead of maintaining a gift aid claims record in at least three years out of seven, charities will need to claim in only two years out of four. These changes make the scheme more accessible, increasing the number of charities that can benefit and reducing the burden placed upon them.
As well as being accessible and protected, the scheme is designed to be fair. The Government recognised that an allowance of £5,000 per charity would have significantly inequitable results for some charities. Charities that perform similar activities are often structured differently for historical reasons. That means that, if every charity received this £5,000 allowance only, some charities could claim many hundreds—if not thousands—of times more in top-up payments than others. For example, every parish church in the Church of England is a charity, while the Roman Catholic Church is structured with a charity at diocese level, with some 200 parish churches forming part of each charity. Without special rules, the Church of England would have been eligible for many hundreds of times more claims under the scheme than the Catholic Church.
For this reason we have introduced the community buildings rules. These enable charities to claim an extra £5,000 allowance if they conduct charitable activities in a community building and meet certain other criteria. Charities that meet the criteria will be able to claim an extra £5,000 worth of small donations for each building in which they carry out charitable activities. HMRC will be issuing guidance to help charities understand the legislation and whether it applies to them. For charities that are unsure of their status, HMRC will be happy to give bespoke guidance.
This Bill represents a boost to the charitable sector by enabling charities to claim new top-up payments on small donations where it is currently difficult or impossible to collect the necessary paperwork for gift aid to apply. I commend the Bill to the House.
Baroness Hayter of Kentish Town
My Lords, first, I thank the noble Lord, Lord Hodgson, as through a small misunderstanding the names on the speakers list got put in the wrong order. I am not he. I also thank the Minister for introducing this welcome Bill.
The recent fall-off in charitable income—20% according to one recent report—particularly affects small and medium-sized charities, and this Bill is perhaps therefore even more important than it was when it started its life. Indeed, we understand that some one in six charities is threatened with closure and up to 40% worry that they may have to close if the economic situation fails to improve. A recent ACEVO report commissioned by the Cabinet Office revealed that charities stand to lose £1 billion this year as a direct result of government actions, at a time when demands on many charities are increasing, not least as a result of the Government’s economic policies. Nearly half the charities covered in this month’s CAF survey have been forced to use reserves to cover income shortfalls, with a quarter cutting some of their services.
We welcome the intention of the Bill and, indeed, its timing. We are not alone. The RNLI called it,
“a great opportunity for charities”.—[Official Report, Commons, Small Charitable Donations Bill Committee, 16/10/12; col. 36.]
The Institute of Fundraising estimates that it will benefit “a range of charities”.
The idea is good but the Government have made things far more complicated than they need to be. “Overly bureaucratic”, says the National Association for Voluntary and Community Action. Peter Lewis of the Institute of Fundraising said:
“The way that it has been drafted makes it far more difficult than Gift Aid itself”.
The Charities Aid Foundation, with all its experience and knowledge in the field, believes that,
“many charities that should be eligible for the Small Donations Scheme will struggle to access it”.
In particular, it stated that,
“linking the Small Donations Scheme to Gift Aid ... means that there is a hidden codicil”—
to the scheme—
“which should read ‘as long as they are also claiming sufficient normal Gift Aid on other donations, and have been doing so for at least two years’. This makes it less likely that very small organisations will be able to benefit from the scheme”.
Although we heartily wish the Bill well, we ask the Minister to think seriously about the problems raised repeatedly in the other House, especially where no movement was made by the Government. Of course, we are delighted with the changes that were made, in particular the changed ratio from 2:1 to 10:1, which opens up the scheme to many more charities, and the reduction from three to two years to qualify. I pay tribute to my colleagues in the other place, Cathy Jamieson and Gareth Thomas, whose determination and hard work, and in particular their understanding of the sector, enabled them to change the Minister’s mind. I hope that I will have similar success this evening; if not in amending the Bill, at least in getting a commitment out of the Minister. I will come on to that.
In seeking to assist small charities, the Government have come up with the most complicated of procedures that will involve far too much paperwork. This risks undermining their whole purpose. Of course, given that there is so much paperwork, there will undoubtedly be charities—Eton comes to mind—that will be well placed to take advantage. I am sure Eton has a large staff and, no doubt, a whole office dedicated to fundraising and gift aid. However, small grass-roots charities, parent-teacher associations or groups looking after victims or those with drink problems will not be able to. Many have no full-time staff, and they are exactly the charities that are answering phones, seeing clients, teaching riding to disabled children or running food banks. There is too much bureaucracy for them to handle.
Indeed, it seems that HMRC is more concerned with fraud than helping charities—the same HMRC, we must remember, which fails to tax Amazon, Starbucks, or Google, whose own executive chair said that he was,
“very proud of the structure that we set up”,
which was based on government incentives.
Will the Minister assure the House that those small but essential charities will be able to operate the complexity of this scheme, without the mass advice of a Google-sized team of lawyers and accountants? What thought has been given to those small charities which, by virtue of their size or lack of big donors, are not able to take advantage of gift aid and will therefore be excluded? Even those who do use gift aid are concerned, as the noble Baroness, Lady Barker, said in your Lordships’ House on Wednesday, that despite the fact that,
“the number of donations being given online and by text is increasing … charities are losing out, because gift aid is not yet fully digitised”.—[Official Report, 12/12/12; col. 1059.]
The scheme will succeed only if small local charities are aware of it, but these are precisely the ones less likely to be involved with the Charity Finance Group, the NCVO, CAF or the other umbrella organisations. How are they going to hear of it? We were disappointed that the Charity Commission chose not to give evidence to the Public Bill Committee. It makes us wonder how big a role it sees for itself in promoting the scheme—but if the commission does not do it, who will? Will the Minister outline his plans for publicising the scheme? We have heard talk of road shows, but we know that small charities do not have the time to spend time at those. I hope there will be something a bit more imaginative.
Perhaps the biggest problem with this overcomplicated scheme is the set of regulations covering community buildings. Although this might have been designed to assist church collections—which we thoroughly understand and endorse—it has ended up disadvantaging some of our most important groups. The RNLI is one organisation that has concerns, given that lifeboats, needless to say, carry out their work not in buildings but at sea. Where does the defined charitable activity take place: at sea or in the lifeboat station? If donation points are outside the station, how can one determine whether a donation was made during charitable activities or events? The definitions are too specific and not grounded in reality. Given such concerns about the workability of the new scheme, will the Minister tell the House whether HMT—or HMRC—consulted with relevant experts on the charity sector and, if so, which ones?
I come to the point where I seek a commitment from the Minister. We want this Bill to work. We need this Bill to work. However, it is key, given that we cannot amend it, that the Government look long and hard after two years at whether it is achieving all that we hoped for it. I therefore ask the Minister, quite simply, to commit to undertaking a review that will ask that question and report its results to Parliament. We need to know: how many charities are benefiting from the scheme; which are full, exempt or excepted charities; what the total outgoings on the scheme have been and how much extra money reached the charities, as well as the cost of administering it; and, finally, the level of identified fraudulent claims.
I feel certain that the Minister himself will want to know the answer to these questions. Will he undertake to share them with this Parliament—not after five years but after two? If the scheme does not work, those charities will need help by some other route to enable them to continue to do their work.
Lord Hodgson of Astley Abbotts
My Lords, this may be a slim Bill but, as has already been made clear, it is an important one and I warmly endorse the purposes behind it. I do so for the very obvious reason that it is common knowledge that fundraising for charities is not easy at present. Of the surveys that the noble Baroness referred to, at least one indicates the impact on charities of the economic crisis and subsequent recession. These competitive pressures have led to the emergence of some unusual stresses. Between 2.30 pm and 3 pm, we were discussing the Question from my noble friend Lord Naseby about the competitive pressure on the National Lottery. That body saw an increase of 8.6%, or £246 million, in the six months to September, but it is clearly concerned about its competitive position. So that macrostatistic, along with a lot of microstatistics, indicate why this Bill is particularly important to smaller charities.
Turning to the Bill itself, I begin by congratulating my noble friend and the Government on the steps taken to increase accessibility. As he pointed out, the historic record required to enter the scheme is being eased from three out of the past seven years to two out of the past four, and the multiplier is being increased from 2:1 to 10:1. This will be particularly important for newly-established charities, which will not have a well established donor basis. My noble friend kindly arranged a briefing on the Bill last week. I have one or two questions, of which I gave him advance warning then.
The first question relates to the nature of the two qualifying years. Do they have to be consecutive or not? He reassured me at the briefing that they do not. I would be grateful if we could hear that on the Floor of the House, because there is a lot of sector interest in the detail of this Bill. Could he explain, therefore, how that ties in with Clause 2(2)? Clause 2 is headed, “Meaning of ‘eligible charity’”. Subsection (2) says:
“If a charity did not make any successful gift aid exemption claims in a period of 2 consecutive tax years, any claim … is to be disregarded”.
My noble friend indicated that “consecutive” was not an important word but the wording of the Bill seems to indicate that it might be. I am sure that his Bill team will have a simple answer to that, but it would be helpful to have it on the record.
The second area of concern is what I describe as “in again, out again”. Smaller charities have periods of intense activity interspersed with periods of quietude. I will take an example of a medium-sized charity in a city, focused on homelessness. The charity may experience a period of very strong professional or volunteer leadership, which leads to a high level of activity; as a result, probably, a successful entry is made to the new gift aid scheme. However, after a time this dynamic leadership moves on and is succeeded by less active individuals. During this stewardship, among other things, gift aid applications are not made. After the fallow period, new people arrive once again, who find that gift aid applications were not made in any of the past four years. It would be helpful for us to know whether this will be a one-off entry—once in the scheme, you are in it—or whether there is a constant rolling programme whereby two out of four years must be kept in order for the charity to remain eligible.
On this part of this Bill, I need to make a plea on behalf of newly-formed charities. The House will be aware that the problem for many smaller charities is how to fund their central expenses—what we might describe as keeping the office warm and the lights on. It may be difficult to find funding for the provision of services but it can be found, whether it comes from local or national government or from grant-giving foundations; but not, for example, for the cost of preparing the bid for these contracts, or indeed for keeping the organisation running. For such charities this new gift aid scheme could be highly significant. Of course, the charity will have to be four years old before it can become eligible.
My noble friend quite properly and understandably underlined the dangers of tax evasion. I have no doubt that that may be thought to be more prevalent in newer charities. For all charities—new, old or well established—HMRC requires a “fit and proper” test to be met. Given the particular needs of newer charities, it would be helpful if my noble friend could explain why it was felt that the “fit and proper” test was not good enough for smaller charities when they were set up, and whether any thought has been given to other ways of including smaller, newer charities—for example, by having a lower level of multiple during those formative, probationary years, or perhaps a multiplier of only 5:1, as opposed to 10:1. Any danger of tax evasion would then be commensurately reduced.
My final set of questions is grouped around the heading, “What happens next?”. In the Public Bill Committee in the other place on 16 October, Mr John Preston, the national stewardship officer for the Church of England, explained that the church currently spends 200,000 hours of volunteer time administering the present gift aid system. He expressed the hope to the Public Bill Committee that this time commitment would be reduced following the passage of the Bill. An illuminating remark followed from Mr John Hemming, the Liberal Democrat MP for Birmingham Yardley:
“What you are saying is that it is not necessarily stuff in the Bill”,
that matters,
“it is a question of how HMRC handles it. Referring specifically to the Bill, is there something we can simplify—to make it easier—or is it really just a question of how HMRC takes it?”—[Official Report, Commons, Public Bill Committee, 16/10/12; col. 5.]
It would be helpful, therefore—here I follow the noble Baroness, Lady Hayter of Kentish Town—to talk a little about the timetable for introducing the scheme and the nature of the publicity that will be followed. I assume that HMRC will write to every gift aid charity to try to publicise it in that way and to explain how these concessions would work. My noble friend referred in his opening remarks to the fact that guidance would be provided. I hope that he will forgive me for saying that the guidance needs to be very simple. These are small charities working on a shoestring; they do not have access to accountants or lawyers. The guidance needs to be as user-friendly as possible.
I gave my noble friend advance notice that I wanted to take the opportunity this evening to talk about the relationship between HMRC and charities. I wanted him to take on board—and perhaps discuss with HMRC—the attitude it is adopting towards the charitable status of many smaller charities. I want to give the House an example. This charity has an income of £15,849 in the year in question. In August 2012 it received a notice from HMRC asking it to complete a form CT600 (short), because it is a small charity. The form was sent off in September. Two weeks later HMRC returned the form, saying that it no longer accepted paper forms—HMRC had, of course, sent it out in the first place—and that filing had to be done online. To file online requires a user ID number, a UTR number—UTR stands for unique tax reference—and a corporation tax activation code. On receipt of these, about a fortnight later, the trustees tried to file again and were refused. They were told to wait because the corporation tax activation code was not yet working. After waiting two more weeks, they tried again; again, they could not file, because the link on the HMRC website that should have read “How to file a return” was missing. They then resorted to the HMRC helpdesk. They were logged on to a form which appeared to be CT600 (long)—in other words, for a large company—whereas they wanted a CT600 (short) form. Further inquiries to the helpdesk revealed that one logged on to the long form anyway and it automatically adjusted itself to the short form as one went along. However, this was not clear to the uninitiated in advance.
So it went on. The final surprise to the trustees was when they offered to send in a PDF of their audited accounts, which provides independent verification of their accuracy, they were told that these were not required. This process took from August 19 to November 5 —this for a charity with revenue below £16,000 per annum. I cannot begin to guess what the cost was to HMRC of all this backing and filling. However, this is just one of many examples. I hope that my noble friend will use this and, indeed, the other examples that I would be happy to provide to urge the tax authorities to be proportionate and open and to understand how the smaller charity sector works.
The second area I want to raise tonight is the tax position of foundations. I gave my noble friend a heads-up on this, and I am afraid that, because I had not dug into the full question, I may have slightly misled him. A family foundation with a permanent endowment is not able to reclaim the 10% advance corporation tax on the donations it gives. Foundations were caught up in Gordon Brown’s raid on pension funds. Their income, and therefore their grant-giving potential, was reduced by 10%. The question on which I seek an answer tonight is: why should foundations not be able to gift aid that tax allowance to tax-recipient charities as private individuals can? It is not a question of double-dipping gift aid, because the permanent endowment on which gift aid may well have been claimed and taken remains intact. Why cannot gift aid be given on the returns that the permanent endowment has earned? I appreciate that these are technical questions but they are important to the charitable sector. I am not asking my noble friend to give a full response tonight; I am more than happy for him to write to me and put a copy in the Library. In welcoming this Bill, I am asking the Minister to make sure that all the good it is planned to do, and that we hope it will do, will not be undone by heavy-handed bureaucracy by the tax authorities.
Baroness Barker
My Lords, I declare an interest. I am the owner of a consultancy third-sector business that works with a lot of charities and social enterprises. In that regard, I should say that when I sat down to look at a Bill about the governance of charities, tax and eligibility, I felt as though I had had an early Christmas present. Thank you so much for sending me something that might seem boring to other people. I do not want to speak on behalf of the right reverend Prelate the Bishop of Exeter, who I am delighted is going to follow me, but, no doubt, given all the excitement going on in the church over the past couple of months, he is looking forward to a rather sedate ecumenical debate on tax as a relief because he is coming up to his busiest period of the year.
I imagine that every noble Lord who has spoken in this debate welcomed, as I did, the Chancellor’s announcement in Budget 2011 that we would have this scheme. When one first considers the gift aid small donation scheme, there is a tendency to think that we are talking about small charities. We are not. We are talking about small donations, and we could be talking about the biggest charities of the lot—the RSPCA and RNLI. It is important to bear that in mind. Nevertheless, there is particular added importance to the Bill now. The noble Baroness, Lady Hayter, mentioned the Charities Aid Foundation report and the ACEVO report. Having seen them, we all know that the outlook for charities, like that for other sectors, is going to be really bleak for the next few years. It is predicted that charities may lose up to £1 billion from a total income of £11 billion. That is an awful lot of money. In the charitable sector, that is an awful lot of jobs and an awful lot of community effort and social capital. This scheme, small as it may be, is none the less very welcome. If it succeeds in generating an income of between £50 million in 2013-14 and £115 million in 2016-17, it will be welcome.
I, too, have real difficulty with the way in which this Bill has been written. It seems that the original intention was to try to enable charities to derive maximum benefit from donations for which they cannot get names and addresses. The immediate default position of HMRC is fraud. We know that charities are used by unscrupulous people to perpetrate fraud, but that seems to characterise an awful lot of the relationship between HMRC and charities. At the end of my speech, I shall speak a little about how I think that might change. I understand that the Government have a duty to make sure that abuse and tax evasion are not in the system, but, like the noble Baroness, Lady Hayter, I sincerely hope that the same degree of assiduous attention is paid to the affairs of Google, Amazon and Starbucks.
What research was conducted by HMRC with the sector when it was putting together its proposals? I have read this Bill putting myself in the shoes of a treasurer of a small organisation and my heart sank the more that I read of it. I ask in particular because of the issue of connected charities. I listened very carefully to what the Minister said and I understand that taking the idea of connection as it relates to personal taxation and trying to apply that to charities has been done in a spirit of trying to generate some equality between different types of charity which, as he said, are set up in different ways for historical reasons. All the evidence from the charitable sector in the past three years is that rather than splitting up and becoming more profuse in their networks, charities are having to rationalise. We have had mergers galore as charities seek to make themselves not only more sustainable, but to ensure that like every other sector, they are becoming as smart, efficient and economical as they possibly can be in order to make their money go further. How realistic does the Minister think it is that charities will deliberately split their operations in the hope of generating a potential tax earning of £1,250?
What is the intention on community buildings? Is it to recognise the additional difficulties that charities have if they have to carry out their activities in community buildings or is it about trying to be fair to different groups of people who differ for other reasons? I read this part several times and it was not until I read it thinking it was about churches that it began to make some sense to me. I have some sympathy with it. I understand that it does not mention churches because it could also apply to secular organisations, such as scouts and guides, but the way that this is written is going to set up some anomalies. Worse than that, I think it is going to set up some confusion. Would the communal part of a housing association premises which is used once a week or once a month by an older people’s group for a lunch club or whatever be ruled out on the grounds that the premises are deemed to be largely of a domiciliary nature? Can the Minister clarify that?
My most important plea echoes what the noble Lord, Lord Hodgson of Astley Abbotts, said: when the guidance for this is written, can it be written up in real examples? I fear that if it is written in the terms in which it appears in the Bill, there will be a dramatic amount of confusion. Can the Minister tell us whether HMRC has a default position, or will have in this case, that it will draft the guidance in direct consultation with the users and the people who will be implementing it and trying to work with this legislation? I went to a very interesting meeting at NCVO during the summer. It was part of its digital hub. I understand that there is an online community of churchwardens. They are largely men in their late 70s or 80s. They conduct online discussions about their churches and the work that they do. They sound like a fascinating bunch of people. They are more familiar with iPads than some Members of your Lordships’ House.
I say that because it takes me to my last point. I am going to go back and talk about the modernisation of gift aid and modernisation of the relationship between HMRC and charities. The Bill tends to display a rather old-fashioned view of charities, even small ones. The biggest and most effective weapon against fraud is transparency. HMRC could have said it was a condition of this scheme that a charity had to have a website—it could be a most basic website—where the charity must publish its annual report and financial statement, including a part saying what money had been received using the gift aid small donation scheme. It would have meant that any organisation would have to do that in its community. HMRC would not have to look at it—the community could go and look at it. Believe me, people would be as willing to shop a charity they thought was being dodgy as someone seeking benefits. I honestly think it is time to facilitate a programme of modernisation between HMRC and charities because, if we do not, we are in danger of equipping charities to fight the war that has just been fought, not the serious battles ahead. Having said that, I welcome the intent behind this scheme and I hope it works well in practice.
The Lord Bishop of Exeter
My Lords, I declare an interest as chairman of the Churches’ Legislation Advisory Service, which represents all the main Christian and Jewish communities in the UK. On behalf of them and these Benches I welcome this Bill.
It was clear from the start that the Bill, first published in the Commons, was going to be helpful to the voluntary sector and to the churches in particular. However, there were fears then that some of its requirements were going to be too restrictive, particularly for small charities. I am glad to note, though, that before the Bill was published—and while it was going through the Commons—there were several informal and very productive discussions with officials. We are very pleased that Ministers have been so willing to listen to our concerns.
The reduction of the gift aid matching criteria from 1:1 in the original Bill to 1:10 in the Bill before your Lordships’ House will be very welcome to small congregations. Equally, the reduction in the time that a charity needs to have a successful gift aid claims history to participate in the scheme will make life a little easier for new charities, although I still question whether both this requirement and the matching one are really necessary.
As we have heard, churches vary enormously in the way they are structured as charities. For example, each Church of England parish—all 16,500 of them—is a separate charity, but the Salvation Army is a national charity with one registration number.
As the Minister has pointed out, the community buildings element in the scheme was introduced to create some degree of equitable treatment for charities such as the Salvation Army and the Roman Catholic Church that are not organised and registered at local level. The community buildings provisions in the Bill are still fairly complex, but I acknowledge that the Government have gone a long way towards meeting our initial criticisms and we welcome that.
Similarly, we felt that the initial proposals on connected charities ran the risk of connecting entirely different charities just because they had trustees in common—for example, where a trustee of a local music society is also a trustee of a local church charity. We are pleased that Ministers have clarified the position on that. However, I hope that this is an area where developing practice will be monitored, as there is still considered to be some risk that HMRC may try to suggest that local churches, or groupings within intermediate church bodies, are connected even though it would seem that the definition of connection in the Bill would not support this interpretation. For Church of England parishes there may be some additional protection in that parochial church councils are not trusts but bodies corporate. However, for other denominations and faith groups the situation may not be as clear cut.
The Church of England estimates that the scheme will be worth about £15 million to our parishes. On that basis, it will probably be worth at least that amount to other faith groups, if not more. That is extremely valuable but I will make a couple of suggestions that would make it more valuable still.
The first concerns simplicity. I am grateful to the noble Baroness, Lady Hayter, for her observations and I will not repeat them. Everyone in the voluntary sector is very much aware that a scheme of this nature is open to abuse and fraudulent claims, but I hope that HMRC will take a proportionate approach to regulation. We all know that no charity is immune from the occasional rogue trustee or treasurer, but the overwhelming majority of charities are honest and careful in their dealings with HMRC.
The second concerns payment methods. The scheme is about payments in cash only. One of the accompanying documents released with the Autumn Statement said that the Treasury wants to look at gift aid in light of the fact that people now give online and by text. It said:
“The Government will examine whether the administration of Gift Aid can be improved to reflect new ways of giving money to charity, in particular digital giving”.
While the Government are doing that, can they also look at how the small donations scheme is working? I can understand why Ministers want to keep the scheme simple at the outset but the world is moving inexorably in the direction of non-cash donations and perhaps at some point the scheme is going to have to take account of that. I should also say that for one religious group—the Orthodox Jewish community—a cash donation in the collection plate at the Sabbath service is simply not an option because Orthodox Jews are forbidden to carry money on the Sabbath.
This Bill is, inevitably, a complex one, but larger churches, including the Church of England, are reasonably confident of being able to produce full guidance notes in a simple format. It will be important though to ensure that the complexity of the Bill is accompanied by appropriate and accessible guidance across the whole sector.
In this context it needs to be remembered that gift aid is processed for the most part locally by volunteers. As we have heard, in the Church of England alone it has been estimated that it takes around 200,000 hours of volunteer time to do this, and we would not wish this to be increased by additional complexity. Finding further ways of refining operational simplicity would not come amiss, particularly for the benefit of smaller charities and churches,
It may be a matter of some small tweaks to the Bill’s provisions, but also for guidance to be given to HMRC. I echo the questions already asked by the noble Lord, Lord Hodgson, and I look forward to the Minister’s response. With those very slight reservations, I warmly welcome the Bill.
Lord Newby
My Lords, I am extremely grateful to all noble Lords who have spoken in this debate. I am very pleased that we decided to postpone the Leveson debate because if we had not there would be about 50 people grumbling at the fact that I will now attempt to answer the questions that speakers in the debate raised.
One concern everybody has raised is about whether the scheme is too difficult to administer and overbureaucratic, to which there are several answers. The key thing is that, at one level, it is very straightforward to operate. Charities are already filling in forms for gift aid. Under the scheme they simply have to tick a box to say that they want to claim additional cash under this additional scheme and they will get it. They do not have to fill in another form. If they are operating out of a community building, they have to give the address of the building. We are not talking about a long and hugely complicated form at all. It is very straightforward. That is one of the key things that HMRC is trying to do. It has to strike a balance between something relatively simple and something that is not open to fraud.
I confess that I started my professional life working in Customs and Excise, helping to devise schemes to help small shopkeepers account for VAT. There was a particularly assiduous Scotsman in our group who spent all his time in a corner trying to work out how shopkeepers could defraud Customs and Excise. We ended up with really quite complicated schemes as a result. They were designed to be simple, but because people were very worried about fraud—and you were talking about, as it were, real money then—we ended up with seven schemes which were designed to be simple but none of them was quite as simple as we had hoped. That is a danger of which HMRC have over the years become more aware, and why the scheme is designed to be as straightforward as possible.
Obviously, charities are not going to look at the Act, but at the guidance from HMRC. As a number of people have said, the guidance itself will be extremely difficult. HMRC is planning to produce two levels of guidance. First, a starter level will set out the rules as simply as possible; most charities will only need to use that, which will supplement the very easy form. Secondly, detailed guidance will explain how the law works to larger charities and charity representatives who want that degree of detail. HMRC will also help and advise charity representatives who want to develop their own guidance; we are thinking here possibly of the churches as an example.
A number of noble Lords asked about consultation with the charitable sector. HMRC undertook a public consultation on the detail of the scheme that ran from March until May this year. It was eight weeks long and 83 organisations and individuals responded to it. HMRC also held meetings with groups of interested people during the consultation period. It has been consulting on the detailed proposals with some charity representatives throughout the development of the legislation, including the Charity Finance Group and the Institute of Fundraising.
Over the summer, the Bill was used as a pilot for the public reading stage in another place. This is a new approach, a supplementary consultation stage where members of the public and organisations can give detailed comments on the draft Bill via the web. Sadly— I think it is rather sad—only 23 individuals and organisations responded to the public reading stage, and a number of them had already been involved in the consultation. It was a useful additional scheme, but whether or not it really added a huge amount is slightly doubtful.
The noble Baroness, Lady Hayter, and the right reverend Prelate raised the question of digital donations. The Government said in the Autumn Statement that we are examining whether the administration of Gift Aid can be improved to reflect new ways of giving money to charity, particularly digital giving. Obviously, young people in particular are going to give their money digitally; there is no doubt about that. As we are finding in many parts of legislation, the Government are, if anything, struggling to keep up with reality just as the digital revolution is changing the way we do everything.
We are starting this scheme with cash because we feel that that way we can make it work relatively easily, but we are going to look at digital giving and at digitising Gift Aid administration more generally. It is only a matter of time before we do all these things but, while people are currently worried about some of the complexities of the Bill, we are keen not to make them more complex at this stage and at least get going with straightforward cash donations.
Noble Lords asked about the publicity for the new scheme. HMRC is planning a four-stage publicity campaign over the next few months to alert charities to the new system and donation scheme. As well as media publicity, HMRC is planning to write in the new year to every charity that has claimed Gift Aid within the past three years to tell them about this scheme and about Gift Aid online. HMRC has also asked the charity representative bodies to help it spread the message.
The noble Baroness, Lady Hayter, asked me to commit myself to a review. The Government have committed themselves to a review. That is the good news. Sad to say, from the noble Baroness’s point of view, but entirely appropriately, the review is to be after three years. This is a relatively standard period for review after a scheme has come in and we definitely plan to do that. In the mean time, HMRC publishes national statistics on the cost of charitable tax relief three times a year. Once up and running, HMRC will publish details about the Gift Aid small donation scheme. These figures will be national statistics.
HMRC does not publish details of fraud rates, although as it received about £10 million of fraudulent Gift Aid claims last year, it is not an insignificant amount. Although, obviously, the last thing in the mind of the vast bulk of charities is fraud, there are people who will exploit any scheme if they think that they can do well out of it.
The noble Lord, Lord Hodgson, asked a number of questions. He asked about the detailed wording in the Bill on Clause 2(2), which refers to “2 consecutive … years”. Clause 2(2) does that because charities will need to make a Gift Aid claim at least every other year. The qualifying period is now two years, so it would be inappropriate to allow a charity a gap of two years or more in order to do so. I hope that that clarifies the position.
Baroness Barker
My Lords, could the Minister write to some of us to explain that point a little further?
Lord Newby
I would be only too pleased to write to all noble Lords here. Basically, it is the interaction of the general Gift Aid scheme and this particular element of it; but I will write to clarify that point absolutely.
The noble Lord, Lord Hodgson, asked again about the cost and whether HMRC would be proportionate, not heavy-handed, and efficient. He will not be surprised to hear me say that, of course, that is what HMRC plans to be. I hope it will be. My experience, working in HRMC—or Customs and Excise as it was—was that it did a lot of things extremely efficiently, and every now and then it did something which was less than efficient. It was the less-than-efficient examples which tended to get most of the publicity. I know that the relevant section of HMRC understands the point that the noble Lord is making. The Government are not setting up this scheme in order not to hand out the cash. We are setting up the scheme because we are very keen that it is successful and is able to help charities in this way.
The noble Lord asked about foundations and why they are in a position that is different from that of individuals. I am tempted to say, “Because they are not individuals”, but I will happily write to him with some of the background as to their tax treatment, which I absolutely understand is different from that of an individual.
He asked whether a two-year period was necessary, because a charity must already have been through the registration process, including the “fit and proper person” test. The test helps to ensure that charities, community amateur sports clubs and other organisations entitled to charity tax reliefs are not managed or controlled by individuals who might misuse the tax relief. Unfortunately, as I said earlier, fraudsters have been known to exploit charity tax relief, so the “fit and proper person” test exists to prevent that. However, even if a charity appears to be compliant in the first few years, changes in personnel can affect its attitude to compliance, so HMRC will need to continue to have evidence on which to base its assessment of the risk that the charity poses in relation to the scheme. That is why we have gone for a two-year qualification period. We believe that that gives an adequate protection against potential fraud, because people will have had to be up and running, making the thing work. Equally, it is not too long, which was the concern about the original proposals.
The noble Baroness, Lady Barker, asked specifically whether it would be possible under this scheme to collect funds and claim the gift aid from activities in housing association premises. To take a simple example, if the charity is a small local charity linked to a specific housing association and it wants to raise money from a collection in its premises or in a pub or anywhere else, it can do that. Things get more complicated if it is a branch of a large housing association—somewhat like a Catholic church—which wants to pray in aid the community building rules. In that case, because the housing association premises are essentially residential premises, it will not be able to do that, because that is the definition we have put in place.
That demonstrates that tax is complicated. There is no system we could have put in place that would have had any reasonable protection against fraud and which would not have run up against those kinds of complexities—and undoubtedly there will be anomalies. However, with tax, the choice before you is not whether you have anomalies but whether you do something or not. You are bound to have these anomalies. We took the view that putting in place a scheme that enabled charities to have access to £100 million was worth it, even though we knew that there would be some anomalies, because they come with the territory, as it were.
I believe I have answered the point that the noble Baroness, Lady Barker, raised about guidance to users. We are doing that on the various levels that she talked about. We have consulted, and will continue to consult, the standing body that HMRC has for dealing with the charity sector as a whole.
The noble Baroness made the very interesting suggestion of having a website, on which reports and a financial statement would be put. That is a possibility. I suspect that, if we had done that, someone would say that it was grossly unfair to small charities that did not have a website. However, given that we expect everybody in respect of benefits to use electronic communications, and that HMRC increasingly wants taxpayers to use them, it is not an unreasonable suggestion, and I am sure that my colleagues in HMRC will look at it.
The right reverend Prelate asked a couple of questions about simplicity and whether all the requirements were needed. As I said before, we had to take a view, and that view was that this struck the right balance between ease of access to the scheme and protection against possible fraud.
This debate has demonstrated that, if this were not a money Bill, we would be having extremely interesting discussions in Committee and on Report. Sadly, however, this is a money Bill. I therefore hope that I have been able to deal with the points that have been raised—
Lord Hodgson of Astley Abbotts
I did not hear the Minister address this directly but do I take it from the commencement date of the Act that Gift Aid under the new scheme will be available in the next financial year, starting 6 April 2013? Will it be in by then?
Lord Newby
My Lords, I believe that it will be but, again, if I am mistaken, I will include that in the letter that I have already committed to write to the noble Lord.
We have sought to strike the right balance between effectiveness, accessibility and security, and I believe that we have achieved that. The scheme will deliver an important new stream of revenue to the charity sector. I therefore commend this Bill to the House.