House of Commons

Monday 28th January 2013 Commons Chamber

Monday 28 January 2013

The House met at half-past Two o’clock

Prayers

Monday 28th January 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 28th January 2013 Commons Chamber

The Secretary of State was asked—

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

1. What estimate he has made of the number of households in Scotland affected by the new under-occupancy rules for housing benefit.

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

The social sector size criteria, which will be introduced from April, will align housing benefit rules for those living in social sector accommodation with those already applied to claimants living in the private rented sector. We estimate that around 80,000 households in Scotland could be affected.

[Dr Whiteford]

The vast majority of tenants affected by this policy have no realistic prospect of finding a smaller, cheaper house. It also has many implications for devolved policy areas. Will the Minister ask the Secretary of State to show his respect for the Scottish Parliament by appearing in person before its Welfare Reform Committee?

[Steve Webb]

Obviously, the impact of housing benefit policy, which is a matter for the UK Parliament, will be different in different parts of the country. I have been to the Scottish Parliament and talked to the Deputy First Minister about welfare reform and we keep a dialogue open with our colleagues in Scotland.

[Charlie Elphicke (Dover) (Con)]

Is it not the case that in Scotland and England as a whole getting on for 2 million families are in overcrowded accommodation? Is it not important that we think about their needs?

[Steve Webb]

My hon. Friend is right to bring forward the voice of those in overcrowded accommodation, which is all too often not heard in this debate. At the same time as we are paying housing benefit for approaching a million spare bedrooms, a quarter of a million households in overcrowded accommodation would love the opportunity to live in a larger house.

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

At the weekend, I spoke to one of my constituents in Scotland who has been a foster parent for 23 years and currently has four foster children, two of whom are in long-term placements. She fosters for one local authority and lives just over the border in another, which means that there is now considerable confusion about the discretionary payments. Would it not be much better if foster parents were exempted altogether?

[Steve Webb]

We recognise the special position of foster carers, which is why we allocated £5 million of discretionary housing payments so that local authorities can respond on a case-by-case basis to the needs of foster carers. We believe that that is a more flexible approach than a blanket exemption.

[Ian Austin (Dudley North) (Lab)]

At the same time as millionaires are getting a tax cut, hundreds of thousands of Britain’s poorest families, people with disabled children, the terminally ill and the bereaved will be made poorer or forced to move. That risks increasing the benefits bill, as most will go into the private rented sector where rents are higher. However, I want to ask for a clear assurance about the brave men and women serving in the forces. Will the Minister assure the House that they and their families will have their rent covered 100%, that they will not lose a penny while they are away from home and that they will not be affected at all? Yes or no?

[Steve Webb]

On the hon. Gentleman’s point about millionaires, I gather they are hankering after the halcyon days when they used to pay only 40% income tax and 18% capital gains tax. On his point about service personnel, let me make it absolutely clear that in the case of a couple with a young adult who is going off to serve with the forces, when that young person leaves the home to serve on the front-line we cease to assume that they are making a rent contribution. When that person goes off to serve, the housing benefit will, in general, go up.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

2. What steps his Department is taking to support people who want to start their own business.

[Michael Fabricant (Lichfield) (Con)]

19. What steps his Department is taking to support people who want to start their own business.

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

We believe that for many people self-employment is the best route out of unemployment. That is why we have introduced the new enterprise allowance and enterprise clubs, which have proved effective in helping people back into work.

[Mr Ellwood]

Tourism is obviously a key industry in Bournemouth, but the digital economy is now the fastest-growing sector thanks to the work of Bournemouth university—so much so that Bournemouth, Christchurch and Poole are now getting the nickname of the silicon beach of England. What more can be done to harness that interest and expertise through incubator units and start-ups?

[Mr Hoban]

My hon. Friend makes an important point. We should be capitalising on the skills of graduates of Bournemouth university to ensure that the digital economy spreads throughout the UK, including to silicon beach. I urge him to talk to his local council and to others to see what opportunities there are to bring forward premises that could be used for self-employment.

[Michael Fabricant]

Unemployment in Lichfield was running at 2.6 % in December, but that is still not good enough. What are the Government doing to provide an enterprise culture in practice, and how many people has my hon. Friend managed to get starting new businesses?

[Mr Hoban]

My hon. Friend will be aware that in Lichfield, 30 claimants have started with a business mentor. That has led to 20 businesses starting already. Some 8,000 new businesses have been started as a consequence of the new enterprise allowance, and I am pleased to announce that we are going to extend the availability of the new enterprise allowance to lone parents on income support and to some employment and support allowance claimants, because they are the sort of people who would be able to benefit from the new enterprise allowance and combine their existing responsibilities with starting a business for themselves.

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

May I push the Minister on what is happening to people who want to start their own business if they pitch up at Jobcentre Plus? Is it not a scandal, the way that Jobcentre Plus recycles people? Giving them a job for one day removes the onus of finding them anything, such as starting their own business, or referring them to the Work programme. There is a tension between what is happening in Jobcentre Plus and what is happening in the Work programmes that does nobody any good.

[Mr Hoban]

To answer the hon. Gentleman’s question about enterprise, when someone first makes a claim for jobseeker’s allowance, advisers talk to them and ask them whether they have an idea for a new business. Where they have a credible plan, they can be referred to a mentor, who will work with them to develop that business plan which, if successful, can lead to the new enterprise allowance. We see the importance of small businesses and of getting new start-ups going. Both the Work programme and Jobcentre Plus are focused on how they can help people set up a business themselves and start to recruit others.

[Chris Bryant (Rhondda) (Lab)]

Unfortunately, unemployment in the Rhondda is still growing. The figures for last November are higher than they were for the November before. One of the difficulties is that many of the people who have enough get up and go to set up a company get up and go elsewhere. How can we make sure that geographically isolated communities such as the Rhondda have a strong enough local economy for local entrepreneurs to prosper?

[Mr Hoban]

That is why measures such as the Work programme and the new enterprise allowance help lay those foundations. We need to see businesses moving to places such as the Rhondda and south Wales. I went to Swansea before Christmas to see the work that Amazon is doing there to boost employment in the local community—[Interruption.] Opposition Members may mock, but that created job opportunities that people would not otherwise have had.

[Jackie Doyle-Price (Thurrock) (Con)]

3. Whether he plans to phase the introduction of the benefit cap.

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

The benefit cap will be implemented from 15 April 2013 in Bromley, Croydon, Enfield and Haringey local authority areas. This will be a phased roll-out, with the remaining local authorities implementing the cap by the summer. This is in keeping with the way that the culture has changed in DWP. All the programmes that we are implementing are being rolled out on a staged basis. That includes changes to the Child Maintenance and Enforcement Commission, universal credit, personal independence payment and universal job match.

[Jackie Doyle-Price]

Can my right hon. Friend give me some reassurance that vulnerable people will not be affected by the cap? Can he also assure me that every effort is being made to support people back into work?

[Mr Duncan Smith]

Clearly, the cap and the principles behind the cap are supported by Government Members—that is, that people who are on benefits should not be earning more than those, for example, on average earnings. Those who are exempted are those who are entitled to working tax credit—because this is about getting people back to work, not stopping them doing that—war widows, widowers, those in receipt of disability living allowance/personal independence payment, attendance allowance, industrial injuries benefits, those on war disablement pension and compensation scheme and the support component of employment support allowance. There is also a 39-week grace period for those who fall unemployed so that they can get back to work without having to change their arrangements.

[Sheila Gilmore (Edinburgh East) (Lab)]

Despite what the Secretary of State has just said, it is clear that he sees the need now to delay an implementation that was previously seen as so important. What about those households where there is an adult receiving DLA and where there are parents who act as the carers? They are two separate units for benefit purposes. Will the Secretary of State undertake to ensure that those households are not penalised?

[Mr Duncan Smith]

First, I must say to the hon. Lady that she is talking complete nonsense. I would much rather implement a programme learning the lessons as we implement it, than follow the practice of the previous Government, who had a period of collapsing programmes because they rushed them. This is the right way to do it and it is a shift in culture. On the second part of her question, under the Government that she supported—and it is still the case today—when someone becomes an adult, they effectively form their own household. We have discussed and are discussing those matters continuously, but households are formed when someone becomes an adult, and the previous Government never saw any reason to change that in all the years that they were in power.

[Gavin Barwell (Croydon Central) (Con)]

As the Secretary of State confirmed, Croydon will be one of the first places where this policy is rolled out. May I thank Lord Freud, who is the Minister responsible for welfare reform, and the housing Minister for meeting me to discuss this? Will my right hon. Friend confirm that his Department will work closely with my local authority to ensure that this important policy is implemented smoothly?

[Mr Duncan Smith]

I say to my hon. Friend and to all hon. Members and hon. Friends whose areas are affected by the roll-out that we are in deep discussions with all those councils. Jobcentre Plus will be working hugely with each of them, advising, helping and supporting them—in many senses, giving them more support than is necessarily likely to be the case when the national roll-out follows the pilot programmes.

[Fiona Mactaggart (Slough) (Lab)]

But as the roll-out happens, some of the areas that will be most affected are not the pilot areas—the first areas—but places such as my constituency, where people are already being moved out of London housing into Slough because there is relatively cheap housing there. Will the Secretary of State undertake that during the period when, as he said, he is taking time to introduce this, he will make revisions and talk to those authorities that are not the pilot authorities and are affected, as mine will be?

[Mr Duncan Smith]

I am glad to see that the hon. Lady realises the point of this whole process—to learn the lessons and to understand how best to implement the pilot programmes properly. Of course we will be talking to all local authorities, particularly those that are directly affected, and all other local authorities will listen to what they say. Despite the massive protestations of collapse and doom and gloom that we heard when we announced these proposals—we should remember that all local authorities have known about them for over a year—we now see statistics showing that there has not been the mass migration that was predicted. As for access to housing, housing benefit caseloads in London have risen by 5%, not fallen.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

4. How many people currently claiming a state pension will benefit from the new higher rate state pension under his proposals for a single tier scheme.

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

People who reach state pension age before single-tier implementation will receive a state pension in line with existing rules. Existing pensioners already receive the triple lock designed to ensure that the pension rises by at least 2.5% each year. The single-tier reforms are designed to respond to the challenges facing working people today.

[Mr McCann]

I am grateful for the Minister’s response. Will he confirm that Britain’s 12 million current pensioners and 4 million future pensioners will not benefit at all from the Government’s proposed changes?

[Steve Webb]

To be clear, today’s pensioners have benefited hugely from our decision to reverse 30 years of falling value of the state pension for those 12 million pensioners, to whom we are now paying a pension that is a bigger share of national average earnings than at any time in the past 20 years.

[Amber Rudd (Hastings and Rye) (Con)]

Women often take a few years off to look after children or elderly relatives. Will the Minister reassure me that women who do that will not be penalised and will also be eligible for the single-tier pension?

[Steve Webb]

My hon. Friend is right. For those who retire under the new regime, years spent some decades ago bringing up children, which were not properly protected for state pension rights, will be so under the single-tier arrangements.

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

It has been a busy few weeks in pensions world. The Minister will be aware that the Office of Fair Trading has recently announced that it is to undertake an inquiry into the private pensions market. This follows a Labour campaign for just such an inquiry. The Minister’s response to our campaign was to accuse the Labour party of scaremongering on pension charges. Now that the OFT has decided to undertake this inquiry, may I encourage the Minister to heed another Labour campaign call and lift the restrictions on NEST as soon as possible so that it can provide low-cost, high-quality pensions to everyone who wishes to save with it?

[Mr Speaker]

We look forward, I am sure, to hearing about NEST, whatever that may be.

[Steve Webb]

Thank you Mr Speaker. It will be a house- hold name soon, I hope.

We worked very closely with the OFT in the run-up to its inquiry, which will look at whether there are problems in this area. It is very welcome, and we will be working very closely with the OFT as it carries it out. As the hon. Gentleman knows, Labour introduced constraints on NEST—the National Employment Savings Trust—and we are consulting on whether to lift them.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

11. When my hon. Friend presented these proposals last week, it was indicated that there would be a net cost to public sector workers in relation to the higher-rate state pension. Is he able to put a figure on that additional cost?

[Steve Webb]

Yes. Those who work in the public sector will pay the full rate of national insurance, which is an extra 1.4%, but they will build up state pension at the full rate. Crudely speaking, they will pay about a tenth extra in national insurance but build up, potentially, up to a third extra in state pension, which will be a very good deal.

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

6. How many reassessments of claims for disability living allowance have taken place in the past six months.

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

About 280,000 disability living allowance claims have been reassessed over the past six months. Reassessments are comprised of super-sessions, where someone reports changes in their circumstances; renewals of fixed-term awards, which are by far the biggest; and reconsiderations.

[Chi Onwurah]

A constituent of mine had to wait two years to have his DLA appeal reassessed, causing him immense hardship. They found in his favour. He is not alone. Newcastle citizens advice bureau and the Newcastle welfare rights service each see two or three new cases of DLA delays every single week. How will the Minister ensure that the roll-out of the personal independence payment will not lead to the same vulnerable groups being subjected to more delays?

[Esther McVey]

I have the figures from 2007-08 and they are exactly the same as those for DLA this year, whether that applies to appeals or to people wanting to make new claims. That was the main reason for introducing PIP. It is about clarity and certainty for both the claimant and the assessors, so that we can reduce any delays in reassessments and appeals.

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

The Minister will be aware that the opportunity to have one’s DLA reconsidered at the end of a fixed-term award is, actually, not an opportunity to cut the DLA. Will she join me in welcoming the fact that more than 12,000 people in the past year have had their DLA award increased at the end of a fixed term? Is that not something that the Opposition ought to bear in mind when they criticise us for cutting DLA?

[Esther McVey]

My hon. Friend is correct. If people are being reassessed or if their term has come to an end, they will be reviewed according to their needs now and many people will get an increased award.

[Mrs Anne McGuire (Stirling) (Lab)]

On 13 December 2012, the Minister announced that there would be

“a significantly slower reassessment timetable”—[Official Report, 13 December 2012; Vol. 555, c. 464.]

for the PIP process—the replacement for DLA—which I welcomed. However, did that significantly slower reassessment timetable impact on the contracts that were signed in August 2012 with Capita and Atos on a different timetable? Will there be any significant financial reassessments as a result of the new timetable? Did she consider whether the changes were significant enough to necessitate re-tendering the contract?

[Esther McVey]

We did indeed slow down the roll-out of the reassessments, having listened to the consultation and what various organisations and charities said, but we did not consider that to be significant change to the contract, so we are working closely with both Atos and Capita to ensure the smooth running of the roll-out.

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

7. What assessment he has made of the preparations for the introduction of universal credit; and if he will make a statement.

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

Early roll-out of universal credit begins with a pathfinder in April 2013 in the Greater Manchester and Cheshire region, including the jobcentre in Ashton-under-Lyne. I am aware that a number of the hon. Gentleman’s constituents will be involved as a result, as will other Members’ constituents, and my Department will write to all of them to invite them to discuss the roll-out.

[Jonathan Reynolds]

The Secretary of State is right to say that my local authority of Tameside is one of the pathfinder areas. Conversations that I have had with officers from that authority and the wider public infrastructure show that there is a lot of concern about the lack of detail and support from the Department of Work and Pensions with regard to the implementation. Given that this is just a few months away and is a cause of serious concern, will the Secretary of State reassure me and people in my local area that the Government are on top of this and that implementation will take place as planned?

[Mr Duncan Smith]

It will—I can give the hon. Gentleman that reassurance. We are discussing this at every level with the local authorities concerned. The process will start at a jobcentre in each of the areas I have mentioned on 29 April, and that will start bringing in childless couples to claim universal credit, rather than jobseeker’s allowance. Over that period, once people are captured into the universal credit system, they will not go back on to jobseeker’s allowance, so a lot of tax-credit people who fall unemployed will move on to universal credit. We are in deep discussions with the regions.[Official Report, 31 January 2013, Vol. 557, c. 6MC.]

[Jesse Norman (Hereford and South Herefordshire) (Con)]

The previous Government’s record in commissioning and managing large IT projects was a catalogue of failure. Have my right hon. Friend and his colleagues been able to learn anything from that in how they have designed universal credit?

[Mr Duncan Smith]

All such programmes under Governments of any hue have always carried risk, because they are about change. The DWP benefits systems, including tax credits, are very complicated and often contradictory. Of course what we are doing involves risk, but we are trying to manage that risk. The best way to do so is to ensure that we introduce it stage by stage, so that we can recognise where we need to learn lessons, correct what is difficult or going wrong and ensure that we roll out the system properly.

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

On Friday, I visited a housing association in my constituency that is greatly concerned about the introduction of universal credit, as well as the bedroom tax and the benefits cap. What assessment has the Secretary of State made of the impact on the finances of housing associations from the possible increases in rent arrears as a result of his Government’s policies?

[Mr Duncan Smith]

I do not believe that there will be an impact. [Interruption.] The Opposition should look to their own record and the housing benefit mess that they left us. They left a rising bill that had doubled in nearly 10 years, so it would be better to have a little less from them. We are trying to ensure that those who are paying this money are not allowed to slip into debt for any great length of time. That matter is being discussed with housing associations and we are making good progress on it. I believe that this approach will help people who are trying to get back into work enormously, rather than their being treated as though they are children who have to have all their bills paid for them.

[Ian Swales (Redcar) (LD)]

A constituent of mine who did a few extra hours at Tesco before Christmas faces losing her income support and carer’s allowance for a whole month and will be much worse off. Does the Secretary of State agree that that shows the injustice of the system left by the previous Government, and that universal credit is desperately needed?

[Mr Duncan Smith]

That is exactly the point. My hon. Friend hits the nail on the head. The mess of all the chaotic benefits left by the last Government, many of which contradicted each other, meant that people were not incentivised to go to work for anything more than 16 hours in some cases. Many people who could have got themselves out of poverty by working did not do so because they were penalised by the system. That is the shame of what the last Government left behind.

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

Will the Secretary of State say what resources are being allocated to in-work conditionality for part-time workers under universal credit, given that the Department has acknowledged that there is no evidence nationally or internationally of what works to sustain people in employment and enable them to progress?

[Mr Duncan Smith]

The Department is looking closely at how we can assist people to take more work while on universal credit. We do not have the final results of that, but I am happy to sit down with the hon. Lady at any time and discuss her concerns. She is right about one thing: rather than parking people on a specific number of hours, universal credit will allow people to work more hours and get more money, rather than losing it, thereby getting themselves and their children, if they have any, out of poverty.

[Mel Stride (Central Devon) (Con)]

8. What steps he is taking to control welfare spending.

[Mr Rob Wilson (Reading East) (Con)]

17. What steps he is taking to control welfare spending.

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

18. What steps he is taking to control welfare spending.

[Ben Gummer (Ipswich) (Con)]

20. What steps he is taking to control welfare spending.

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

The Government have undertaken major reforms to limit Britain’s welfare spending, which over successive years ran out of control. Under the last Government, welfare bills had increased by 60% by 2010, costing every household in Britain an extra £3,000 a year. Last week, the Welfare Benefits Up-rating Bill was passed by this House. It will save £1.9 billion, restoring fairness for taxpayers in the process.

[Mel Stride]

I congratulate my right hon. Friend on the progress that he has made in controlling welfare expenditure, particularly given that under the previous Government, the costs rose by no less than 60%. However, there is always more to do. Will he outline what we are doing to clamp down on welfare fraud?

[Mr Duncan Smith]

My hon. Friend is right about the situation that we were left. We are already bearing down on the problem. The figures show that we are making inroads into welfare fraud. Universal credit will have a much better record in this area, because we will be able to use real-time information to check up on who is in work and what they are earning on a monthly basis, rather than having to wait until the end of somebody’s time on tax credits at the end of a year and reconcile the figures over a long period. Under the current tax credits system, £5 billion has been written off as a result of fraud and error, and it looks like another £5 billion will also be written off.[Official Report, 1 February 2013, Vol. 557, c. 8MC.]

[Mr Wilson]

As the Secretary of State has said, the previous Government increased welfare spending by 60%. There was not, however, a 60% increase in people getting jobs, or a 60% reduction in child poverty. Does the Secretary of State agree that we should not measure the success of our welfare system by how much we are spending on it?

[Mr Duncan Smith]

I agree with my hon. Friend: we should measure our welfare system by how soon it provides support to those who need it and how it supports those who can be moved into a more productive form of life. The previous system trapped people into dependency on welfare with rising bills and, ultimately, a very poor record on child poverty.

[Alun Cairns]

I strongly welcome the welfare reforms that the Government are introducing, and I pay tribute to the Secretary of State for the control he is bringing to expenditure. Does he agree, however, that the provision of some of the benefits, and the terms under which they will be received, may need to be reviewed? If the parent of a young child with a complicated medical condition needs to stay in hospital for longer than 84 days, they may fall foul of the carer’s allowance. Will the Secretary of State agree to look at that?

[Mr Duncan Smith]

I understand fully what my hon. Friend is saying and, of course, the parent who is caring for a child in hospital has 84 days in which that child may be in hospital. I also recognise what he is saying about broken-up periods in hospital should someone have a condition that takes them back to hospital again. I would be happy to sit down with him, and anybody else, to look at the issue and discuss whether there are ways to rectify it.

[Ben Gummer]

I congratulate my right hon. Friend on the reforms he is bringing in. Social mobility and poverty were manifestly not improved by 60% during the previous Government’s regime, although the bill went up by 60%. However, people such as my constituent, Mr Martin Wilsher, who is visually impaired, still have concerns about some of the reforms being introduced. What reassurances can my right hon. Friend provide to Mr Wilsher?

[Mr Duncan Smith]

First, as my hon. Friend knows, this is about the disability living allowance and the personal independence payment, and the reality is that DLA will not be included in the changes. More than that, it is important to note that through discussions over the introduction of PIP, a good and warm welcome has finally come from the Royal National Institute of Blind People. After recent discussions it said that the PIP criteria include a number of

“significant improvements for blind and partially sighted people.”

The changes we are making to PIP, after guidance from that organisation and others, will help people such as my hon. Friend’s constituent.

[Jessica Morden (Newport East) (Lab)]

Last week in Westminster Hall Ministers made great play of the savings that the Government might expect from the bedroom tax. In Wales there is a chronic shortage of smaller houses, so why will the Secretary of State not admit that those who are hit by this cruel policy in Wales will have to go into the insecure private sector where rents will be higher and local housing allowance rates will cost more?

[Mr Duncan Smith]

What the hon. Lady and her party presided over when they were in power was a complete mess in housing—[Interruption.] It is all very well for Opposition Members to shout like a bunch of discombobulated monkeys bouncing up and down on the Benches; the reality is that their housing benefit record left many thousands of families unable to find housing because they were in a queue, while others occupied housing that had far too many rooms. We have to put that right, and that is what we are doing. The Labour party never did that when it was in government.

[Mr David Winnick (Walsall North) (Lab)]

Although I am not a vindictive person—at least, I hope I am not—I would like to see the Secretary of State and his colleagues, plus the Prime Minister and the Chancellor of the Exchequer, try to live, just for six months, on the income of those who have been adversely affected as a result of the cuts carried out by the Government over the past two years. Try and live on that sort of income; see what it is like not having any recourse to private income.

[Mr Duncan Smith]

I have known the hon. Gentleman for a long time, and the reality is that none of these decisions is taken lightly by this Government—indeed, any Government. I remind him, however, about all those people who, because of the mess in which the previous Government left the finances, have found themselves out of work or with incomes falling. When he talks about vulnerable people, it is this Government who have increased the pension and made it better for some of the most vulnerable people in society.

[Helen Goodman (Bishop Auckland) (Lab)]

Under the current rules, citizens from some eastern European countries are entitled to housing benefit and working tax credit, but not to income-related jobseeker’s allowance. Will the Secretary of State set out for the House what the position of these people will be once universal credit, which will wrap all the benefits up together, has been introduced?

[Mr Duncan Smith]

It is our intention to try to ensure that under universal credit the loose access to benefits that has been enjoyed by far too many people coming into this country who have no right to them will actually be limited. I will be able to brief the House much better on that as and when we complete the rules on it.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Obviously the Secretary of State has made mention of the benefits uprating being capped at a 1% increase. Has he had any discussions with the Chancellor of the Exchequer about what that will do to growth or about the impact that it will have on the economy over the next three years?

[Mr Duncan Smith]

I have lots of discussions with the Chancellor on a regular basis, all very amicable. Of course we have to discuss this in a wider context, but the hon. Gentleman and his party look at this in a very narrow context. They say, “Well, you withdraw this money from people on benefits and that immediately has an effect on the high street.” If that were all that we were doing, I would agree with him, but it is not. There is a major programme for investment in industry and a huge capital spending programme, not least as will be announced in a statement later today. These will have an even bigger effect, in a positive way, on spending in the high street.

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

9. What estimate he has made of trends in the number of people in Easington constituency claiming jobseeker’s allowance in 2013.

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

About 3,400 people in Easington are currently claiming jobseeker’s allowance, which is up 340 on the year, but last week we saw a fall in the number of people in the north-east claiming JSA. Since the general election, there has been an increase of 35,000 in the number of people in work in the north-east.

[Grahame M. Morris]

The Government have stopped publishing the number of unemployed people in each constituency chasing each vacancy. As I have impressed on Ministers before, and I will say it again, the issue for us in Easington, unlike in Lichfield, is joblessness—a lack of jobs. Will the Minister give consideration to publishing those data, which would be useful to potential employers and inward investors?

[Mr Hoban]

The hon. Gentleman makes an important point. I was born and brought up in his constituency, so I well understand the challenges that Easington faces. We do want to encourage more people to invest in the area, and that is why I am keen to commend the work that has been done with the East Durham area partnership to encourage more people into work in Easington. We will look at how we can recommence publication of vacancy statistics shortly.

[Stephen Timms (East Ham) (Lab)]

Ministers often say that they have stopped people on Government schemes appearing in the labour market statistics as “in employment”. But recent analysis shows that of the claimed 500,000 increase in employment over the past 12 months, 214,000 people are in fact on Government schemes and mostly still claiming JSA. What is going on?

[Mr Speaker]

The question is exclusively on Easington, but the right hon. Gentleman has made his own point with delphic confidence.

[Mr Hoban]

What is happening—and it happened under the previous Government—is that these figures are drawn up in line with international rules. I agree with him that it is inappropriate, and that is why I wrote several months ago to the Office for National Statistics to ask it to change that. Only one in 20 of the additional jobs created since the general election are down to Government schemes, and the right hon. Gentleman should be commending the number of private sector jobs being created that have helped people get back into work. That is why we have record numbers of people in work.

[Mr Stephen Hepburn (Jarrow) (Lab)]

12. What assessment he has made of the potential effect on low-income families of planned changes to housing benefit eligibility in respect of under-occupancy in the social rented sector.

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

Our impact assessment shows that of the 3.4 million social sector tenants receiving housing benefit, up to 660,000 could potentially be affected by this measure.

[Mr Hepburn]

Do this Government ever get fed up with hammering the poor of this country? Punishing the poor seems to be the mandate that is running this Government. In my constituency, 2,000 households will lose anything up to 25% because of this bedroom tax. Will the Minister change this callous measure now, or will he wait until it becomes this Government’s poll tax and comes back to haunt them?

[Steve Webb]

If we leave aside the issue of people in his constituency who are living in over-crowded accommodation, who would very much like the opportunity to live in one of these houses, the hon. Gentleman will be aware that for many years under Labour, people who rented in the private rented sector were not allowed a spare bedroom. Why is it fair not to allow private renters a spare bedroom, but to allow social tenants a spare bedroom?

[Philip Davies (Shipley) (Con)]

Does the Minister agree that downsizing when people can no longer afford accommodation or when accommodation becomes too big is something that many people have had to do for many years? Would it not be perverse if the only people protected from what is a fact of life for many were those dependent on the state for their housing?

[Steve Webb]

My hon. Friend is right that ensuring that we make the best use of the scarce resource that is the social housing stock does involve people moving to smaller accommodation later on in life—although not pensioners, who we have exempted. Many of the best housing associations and councils are managing their housing stock better in response to this change.

[David Wright (Telford) (Lab)]

The bedroom tax will have an impact on thousands of people in Telford. Many might want to move to smaller accommodation, but it is not available and the Government know it is not available. The policy is designed to penalise people—it is nothing to do with the housing market.

[Steve Webb]

There is a danger that this is viewed in a very static way. Many of the best housing associations are looking at groups of constituents, some of whom are over-occupying and are overcrowded, and are moving people around to create space. In the longer term, we need a housing stock that better meets the needs of people on the waiting list, and it is time that successive Governments addressed that.

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

Because of the shameful under-investment in social housing by the previous Government, there are simply not enough properties for people to downsize to. What assessment has my hon. Friend made of the number of families who will end up moving to smaller, more expensive accommodation and end up receiving more in housing benefit?

[Steve Webb]

My hon. Friend is right: successive Governments have failed to build enough affordable housing. It is worth stressing that moving is one option, but only one option, for those in work. Just two or three extra hours on the minimum wage would cover this deduction. There are a range of options—going into work, taking in a lodger or sub-letting—and good housing associations are working with their tenants to achieve best outcomes.

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

13. What estimate she has made of the number of unpaid carers who will lose carer’s allowance as a result of the benefit cap.

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

No one loses carer’s allowance as a result of the benefit cap for, as the hon. Lady may know, the cap is applied to overall household income.

[Barbara Keeley]

What advice would the Minister give to the 5,000 carers who, as the Government’s impact assessment states, will lose an average of £105 a week through the operation of the benefit cap? Is she suggesting that they give up caring, look for work and ask social services to find a care placement for the person they care for? Why have the Government not thought of exempting carers, who do a wonderful job, from the benefit cap in recognition of their unpaid caring work?

[Esther McVey]

I would not seek to tell anybody what they should do. We seek to work closely with people to enable and support them as best we can. We are doing that by trebling the discretionary payment to help people into work, because if they are on working tax credits, they will be exempt from the benefit cap.

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

I can tell the House that

“carers caring for an adult disabled child or other adult relative could see their benefits capped, because the DLA of the people they care for is not considered to be in the same benefit package or ‘household’ as the carers’–even if they are living together.”

This is a direct quote from Carers UK. Does the Minister agree with Carers UK that it is confusing, complicated and simply unfair to protect some carers and not others?

[Esther McVey]

I remind the hon. Gentleman that the definition of “household” has been in place for some time, so what has happened has always been in place. As the Secretary of State said, there are many exemptions from the cap. Working with the discretionary payment, we can work together to get this right.

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

14. What steps he is taking to address long-term unemployment.

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

There are a range of measures in place to tackle long-term unemployment, including the Work programme. Last week’s unemployment figures show a fall of 5,000 in the number of people who have been unemployed for more than a year, and a fall of 10,000 in the number of people who have been unemployed for more than two years.

[Emma Reynolds]

According to the House of Commons Library, there has been a 45% increase in the number of people unemployed over the last 12 months. When will the Government get a grip on this issue, and why will they not take up Labour’s compulsory jobs guarantee?

[Mr Hoban]

When the hon. Lady’s party was in government, the number of people in long-term unemployment doubled, but this month we have seen a reduction in the numbers of people unemployed for more than one year and for more than two years. I would have thought she would be welcome that. It demonstrates that ours are the right actions to tackle the problems of long-term unemployment.

[Margot James (Stourbridge) (Con)]

Employment in the west midlands has increased by 4.3% in the past 12 months and the average time spent on jobseeker’s allowance is just three months. What can my hon. Friend do to bring all Work programme providers up to the standard of the best providers, such as EOS in the black country?

[Mr Hoban]

I, too, have seen the excellent work that EOS does to improve people’s chances of getting into work—it has some innovative programmes—and I am relentless in pushing Work programme providers to improve their performance so that we get people into work. Last month’s unemployment figures are testament to the benefits of our actions.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

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

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

Today, I welcome the millionth jobseeker signed up to the universal jobmatch service, launched before Christmas, which is revolutionising how claimants look for work—with online job searching and matching through DWP on a scale never seen before. The system works 24/7 to find jobs that fit with people’s skills, location and working patterns, which means that their CV works for them even while they sleep. The service harnesses new technology to improve their prospects, and was launched on time and on budget.

[Catherine McKinnell]

It would appear that about 430,000 women born between 6 April 1952 and 6 July 1953 will not qualify for the new pension, while men of the same age will. What does the Minister have to say to the 1,700 women in Newcastle potentially affected by this unfair situation?

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

Those women will, of course, receive a state pension up to two years before a man born on the same day and have the option of being treated in the same way as a man—for example, they could defer their pension for two years and get an extra 20% for deferral. That is an option. We cannot bring the measure forward, however, because the occupational pension sector needs time. The only way we could treat men and women identically would be to delay until 2019, but if we did that many more women would be excluded.

[Caroline Dinenage (Gosport) (Con)]

T2. Given that one in six of the adult population is functionally illiterate, what training is provided to jobcentre staff to help identify and signpost adults with literacy issues?

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

My hon. Friend makes an important point: poor literacy and numeracy are big barriers to employment. For that reason, personal advisers in jobcentres are trained to identify signs and to signpost people to appropriate course providers. Fareham college in the constituency adjacent to hers is one such provider, but I am sure there are other local providers.

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

The Minister will have read about the cases of Becky Bell raised by my hon. Friend the Member for Hartlepool (Mr Wright) and of Angel Hooper, the disabled child whose parents have been told that they will lose £20 a week because her specially adapted room will not be shared with another family member. They are two of the 660,000 families being told they will have to fork out extra or move under the bedroom tax. Will he confirm how many one-bedroom properties will be needed for people to downsize to as the bedroom tax kicks in?

[Steve Webb]

You will be aware, Mr Speaker, that discretionary housing payments are being made available with a specific focus on the needs of severely disabled people—for example, where a house has been adjusted to reflect the needs of a disabled person. We have allocated money to local authorities precisely to cater for those whom it would be inappropriate to expect to move.

[Mr Byrne]

The Minister knows that 600,000 people will now need a one-bedroom flat, yet the Department’s own assessment states that there are insufficient properties to enable tenants to move to accommodation of an appropriate size, even if they want to move. From the beginning of April, therefore, people in social housing will face a £14 a week extra bill, when those on £1 million a year face a £2,000 a week tax cut. How can the Minister justify this to hon. Members such as the hon. Member for Harlow (Robert Halfon), who said that benefit cuts at a time of tax cuts of this order would send the clearest signal that

“Conservatives were looking after vested interests: not so much a dog whistle—more a full blown trumpet.”?

[Steve Webb]

Given that the right hon. Gentleman mentions taxation, I will risk straying on to it, but quite why today’s millionaires would rather have our 45p rate than his 40p rate, or our 28% capital gains tax, rather than his 18% rate is beyond me.

On the right hon. Gentleman’s specific point, households will respond in a range of ways to the measure on under-occupation: moving is simply one of them; taking in a lodger or boarder, sub-letting, working or working more hours are others, and there are discretionary payments for those in most need.

[Penny Mordaunt (Portsmouth North) (Con)]

T7. Is the Minister aware that the Conservatives in Wales have introduced the post of shadow Minister for older people? In the light of that, will he update the House on the work of the UK advisory forum on ageing in getting a co-ordinated approach to older people’s issues across Whitehall?

[Steve Webb]

I am grateful to the hon. Lady for flagging up the work of the UK advisory forum, which I jointly chair with the Minister for care services at the Department of Health. It enables us to bring Departments beyond those two together with older people’s organisations, and we are looking to expand the role of that group.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T4. More than 2.3 million people with disabilities currently live in poverty. Given that fewer than half of all disabled people are in work, that we have a contracting economy and that at least £6.7 billion is being cut from disability benefits, how many more disabled people do the Government estimate will be living in poverty at the end of this Parliament?

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

Let me say straight away that I do not recognise the hon. Lady’s figures at all. What I can tell her is that £50 billion is spent every year on support and benefits, and that will continue. We are spending £13 billion a year on disability living allowance, and we will continue spending that when people are moved on to the personal independence payment. We are doing a lot and we are protecting the most vulnerable, as acknowledged around the world.

[Mr Philip Hollobone (Kettering) (Con)]

The winter fuel allowance is a non-contributory benefit, yet every year we spend tens of millions of pounds on winter fuel allowance for pensioners who live abroad in far pleasanter climates than our own. Is there nothing that the Government can do within the terms of the EU directive to ensure that such payments cease and that pensioners in this country benefit from that money?

[Mr Duncan Smith]

This is a matter that we are looking into. As my hon. Friend knows very well, it is caught under European law; however, the recent judgment that came out said that we had to make these payments. There might be other ways we may be able to limit that exposure, and I will be able to let my hon. Friend know later in the day.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

T5. Teacher Dawn Lewis in my constituency is one of 600 women who will lose out because of the perverse pension rule that my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) drew attention to earlier. Is the Minister at all worried that this looks like yet another coalition attack on working women?

[Steve Webb]

Just to be clear, we are talking about women who draw a pension significantly earlier than men born on the same day. The hon. Gentleman is shaking his head; that is a statement of fact. It is the case that present pensioners do not fall under the new system. I have explained why we cannot bring it forward, but I am delighted that the Opposition’s principal criticism is that we are not introducing our reform quickly enough.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

On the Government’s benefit changes for housing, foster carers have expressed their concern to me that they might be inhibited from doing their good work by the extra penalty for having a spare room. Can the Secretary of State or a Minister give me some reassurance that the amount of fostering that we currently have—and need—can continue without financial disadvantage?

[Mr Duncan Smith]

We are of course working closely with the Minister responsible at the Department for Education—the Under-Secretary of State, the hon. Member for Crewe and Nantwich (Mr Timpson)—whose record on this is unimpeachable, as my right hon. Friend knows. He also should recognise that we have laid aside £5 million specifically to help with foster carers in the situation he described. However, we are in discussions with local authorities, county councils and the Department for Education about how best the money can be used to ensure that it specifically helps foster carers in this area, so that they suffer no hardship whatever, but can continue, and we can encourage more people to become foster carers.

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

T6. Further to the questions from my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell) and for Birmingham, Selly Oak (Steve McCabe), I still do not understand why the Government are, in effect, targeting and discriminating against nearly 500,000 women, 500 of whom are in my constituency—one of them is my mother—or why they think this is fair, given that men of exactly the same age will get a higher pension. It is not fair, but is it legal and will the Government reconsider their proposals?

[Steve Webb]

Just to be clear, when the hon. Lady says that a man born on the same day will get a higher pension, that is simply not necessarily the case. People are wrongly comparing the £144 flat rate with the £107 basic pension, plus a variable SERPS—state earnings-related pension scheme—pension, so the figure might be higher, but it might be lower. The new system is not more generous overall than the one it replaces. All I would say, through the hon. Lady to her mother, is that a man born on the same day as her mother will draw his pension significantly later, so she will have the benefit of that pension for perhaps up to two years more than a man born on the same day.

[Dr Phillip Lee (Bracknell) (Con)]

Last Friday, I visited the A4e offices in Bracknell, and it was encouraging to hear the staff there giving support to my constituents who were seeking to set up their own business. In addition to providing that support, what are the Government doing to extend the availability of new enterprise allowances so that more people in my constituency can start their own business?

[Mr Hoban]

I am delighted that my hon. Friend has seen for himself the work that A4e is doing in Bracknell. We need more people to have the opportunity to set up their own business, particularly lone parents and those with health conditions. That is why I am pleased to announce that we are extending the availability of the new enterprise allowance to lone parents who receive income support and to some employment and support allowance claimants.

[Lindsay Roy (Glenrothes) (Lab)]

T8. As several of my hon. Friends have already said, almost 500,000 women aged between 59 and 60 will not qualify for the new state pension while men of the same age will do so. How does the Minister justify penalising 700 such women in my constituency in that way?

[Steve Webb]

Just to be clear, the women the hon. Gentleman is talking about will get exactly the pension that they thought they were going to get before we made our announcement, and they will get it on the day on which they thought they were going to get it. We have changed nothing at all. However, under the present system, if those women want to defer a pension for two years, they will get that on the current rules plus 20%, which is a generous rate of deferral.

[Jane Ellison (Battersea) (Con)]

Will the Minister confirm that, contrary to the comments made by some Labour Members, a record number of women are in work at the moment?

[Mr Hoban]

My hon. Friend is absolutely right to highlight the fact that there are more women in work than ever before. That is testament to the flexibility of the labour market, which allows more women to work, either part time or full time.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T9. Given the inability of Her Majesty’s Revenue and Customs to write to all parents affected by the recent child benefit changes, I have serious concerns about the real-time information that will need to be delivered if universal credit is going to work and succeed. In September, the Minister for Welfare Reform, Lord Freud, said that 99.8% of the data sent by employers had been matched, yet a parliamentary answer from the Exchequer Secretary on 17 December revealed data from the same month showing that only 71% had been matched. Which Minister has got it right?

[Mr Duncan Smith]

The hon. Lady is confusing two answers. The answer that she received from the Treasury—from Her Majesty’s Revenue and Customs—was to do with checking against the references of the accredited companies. That was a process that was looking for 80%, and it was achieving just over 75%. What my hon. Friend the Minister was saying was that the number of companies being brought on to the pilot was exactly in line with the number that is there. I can promise the hon. Lady that, if she really wants me to, I will give her a written answer to that question as well.

[Mr John Redwood (Wokingham) (Con)]

Is the Secretary of State looking favourably on the idea that workers coming here from Europe to earn a living should have to establish a contribution record over a reasonable period of time before becoming eligible to receive benefits?

[Mr Duncan Smith]

The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban) and others are engaged on this matter with our European partners. We do not think it right that somebody who has made no contribution to this country should be able to walk in here on day one and take benefits, as is being proposed. I promise my right hon. Friend the Member for Wokingham (Mr Redwood) that I will not allow that to happen.

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

T10. The Minister has failed to justify to the 430,000 women in the rest of the country, or to the 500 women in my constituency, born between 5 April 1952 and 6 July 1953 why they will receive a state pension of up to £1,900 a year less than a man born on the same day as they were.

[Steve Webb]

To risk repetition, I say to the hon. Gentleman not only that those women will receive potentially up to two years more but that, on average, the new system is costing no more than the one it is replacing. So it is simply not the case that we are taking new pensioners and spending more money on them than we were in the system that we are replacing.

[Stephen Lloyd (Eastbourne) (LD)]

As the Minister knows, concern has been expressed recently following the conversion from disability living allowance to the personal independence payment. It relates to mobility-impaired people and the change from 50 metres to 20 metres. Will she confirm that she has listened carefully to the points raised about converting the guidelines to ensure that the words “reliably, safely, repeatedly and in a timely manner” will appear in the regulation, so that the people who are anxious about this can be reassured?

[Esther McVey]

My hon. Friend is correct to suggest that we have been in discussions about this. At the moment, the words “reliably, safely, repeatedly and in a timely manner” are in the contracts and in the guidance, and we are looking to see whether they can be put into the regulation, but that will happen only if that achieves what it is intended to achieve.

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

DWP research suggests that over 42% of people affected by the bedroom tax will not be able to pay the difference and will go into arrears instead. Given that DWP research, how many people does the Minister or the Secretary of State expect to lose their homes as a result of these crazy policies?

[Mr Duncan Smith]

We do not expect anybody to lose their homes as a result, but I must tell the hon. Gentleman that his Government sat for a large number of years without building any houses, watching housing benefit rise and people sitting on waiting lists to get houses, so crocodile tears from them now they are in opposition are a waste of time. We will sort the problem out, and I hope they will not be in government for a long time to come.

[Mark Pritchard (The Wrekin) (Con)]

Most EU migration has been of real benefit to Britain, but may I ask the Secretary of State what plans he is putting in place to stop Bulgarian and Romanian migrants claiming welfare benefits from 1 January 2014, thus driving up the welfare bill for UK taxpayers?

[Mr Duncan Smith]

We inherited a situation in which there were rules guarding against that happening to those who come in. To put the record straight, habitual residence tests and other rules require that those who come into this country are involved in some form of work. My hon. Friend also knows that European legislation is before us at the moment that tries to allow those coming in to claim benefits on day one. We are utterly opposed to that: we are fighting it, and it is not my intention to see it happen in any way.

High Speed Rail

Monday 28th January 2013 Commons Chamber

15:31

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

With permission, Mr Speaker, I would like to make a statement about our railways.

Investing in transport infrastructure is not a choice. To create jobs and to rebalance our economy we need better roads, better airports and better trains—and High Speed 2 is a central part of that investment. It will be an engine for growth throughout the country, which is why I am today announcing our initial preferred route north from Birmingham to Leeds and Manchester.

These new services will reach eight out of 10 of our largest cities: Birmingham, Liverpool and Manchester, as well as Leeds, Sheffield, Newcastle, Glasgow and Edinburgh. In all, 18 cities and many more towns, too, will be served by HS2 services. It will be completely integrated with the existing rail network; it will bring people and businesses together; it will create an estimated 100,000 jobs; and it has the backing of businesses and cities across Britain. We will introduce legislation for the first phase in this Parliament and legislate for the second in the next one. Construction is set to begin in 2017 and the first trains will run in 2026. The second phase will be open fully by 2033.

I would like to make three further points. The first is about the need for the line. HS2 will be the first main line to be built north of London for almost 120 years. Some say we do not need another, but the truth is that we are already good at squeezing the most out of our present Victorian railway network—and yes, we will get even more out of it in the coming years with the massive investment we have already announced. We are electrifying 800 miles of track, and building Crossrail and the northern hub upgrade. These will help to keep us going for the next decade or two, but what then?

Rail passenger numbers have doubled over the last 15 years, and demand will keep growing. The west coast main line is filling up. There is not enough space for all the commuters, freight trains and inter-city trains that need to use it. That is why, after very careful consideration, I am publishing my initial preferences for phase 2 of HS2. The case for going ahead rests on the capacity it will provide and on the new connections it will create. It is not just about faster trains to London, but about changing the way in which our great cities work and work with each other, providing easy links on journeys that are difficult today, giving muscle to the economies of the cities beyond London and producing an estimated £2 in economic benefit for every £1 spent.

Frequently, colleagues in this House call for better services to their local stations—they are right to ask for them—and High Speed 2 is part of the solution. Creating free space on existing routes will allow better services to places such as Milton Keynes, and more trains for commuters in areas such as Staffordshire, Leeds and Manchester. I am determined to ensure that the benefits of HS2 run much wider than the places directly served by the new line.

Let me turn to my second point. The detail of the route I am announcing today follows the Government’s announcements last year about phase 1 between London and Birmingham. On the western leg from Birmingham to Manchester, I propose two new high-speed stations. The first will be in the heart of Manchester, alongside the existing station at Manchester Piccadilly, allowing easy connections to places such as Salford, Stockport and Bolton and a journey time to London of just one hour eight minutes, down from over two hours today. The second station will be at Manchester airport, giving direct access to the wider Cheshire area.

HS2 will also serve Crewe via a dedicated link, and high-speed trains will continue on the existing railway to Liverpool, Warrington and Runcorn, which will also benefit greatly from reduced journey times. Further north, near Wigan, HS2 will connect with the west coast main line. High-speed trains can then continue at regular speeds to places such as Preston, Carlisle, Glasgow and Edinburgh. I am working with counterparts in Scotland on their aspirations for high-speed rail. I have already set out a long-term ambition to get journeys to Scotland below three hours.

Turning to the eastern leg, we will construct three new stations to bring people and businesses in the east midlands and Yorkshire closer to Birmingham, the north-east and London. The east midlands station will be located between Nottingham and Derby at Toton, and links will be upgraded to provide fast access to both. The second station will be at Sheffield Meadowhall, which already has good connections that can be improved further, allowing it to serve all of Sheffield and south Yorkshire.

The third station will be located in the centre of Leeds alongside the South Bank area. As with the western leg, there will be a connection from HS2 on to the existing rail network. A connection to the east coast main line, just nine miles from York, will allow the north-east to benefit, too, with London to York taking just one hour 23 minutes and London to Newcastle just two hours 18 minutes.

Finally, a decision on how best to serve Heathrow will be taken after the outcome of the Airports Commission has been considered by the Government. From day one, however, HS2 will provide far faster journeys than now via a major new interchange at Old Oak Common, linking to the Great Western main line, Crossrail and the Heathrow express.

The third point I want to make today is about design and help for those most affected. Many hon. Members want the Government to take that extremely seriously, and we do. Although the line will benefit the country as a whole, it will also create great anxiety among those close to the proposed route. We will therefore consult properly, design carefully and compensate fairly. Let me stress that today I am announcing an initial preferred route: this is the start of the process, not the end. We are ready to listen, and ready to improve. I want this line to create jobs and prosperity, not harm them. Where businesses may be affected, we will work with them to find a solution. We will now begin a period of informal consultation on phase 2 that will inform the official public consultation, which was originally planned for 2014 but which, I can announce, will be brought forward to this year. The aim is to reach a firm decision on the route of phase 2 in 2014.

I understand how such proposals can affect property markets. Compensation will therefore be as generous as on the first phase, and more generous than when we built the motorways. Today I am launching a public consultation on the exceptional hardship scheme for those who must sell but cannot do so because of HS2. Under this scheme we will pay the full price, valued as if there were no HS2. That will be followed by the next stage of our property compensation scheme once the final route is confirmed.

There are not many issues on which political parties in the House agree, but this is one of them. Regardless of the nature of the Government when the first trains run in 13 years’ time, what matters are the jobs, the rebalancing of the economy, and our country’s future prosperity. I commend this statement to the House.

15:40

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the Secretary of State for providing a copy of his statement in advance.

As the Secretary of State was generous enough to say in his foreword to the Government’s Command Paper, which was published today, HS2 is a project that was started by the last Government. Having successfully built HS1, Britain’s first new railway line for more than 100 years, we were determined that the rest of the country, not just the south-east, should benefit from vital investment to increase capacity and reduce journey times on our railway.

I assure the Secretary of State and the House that we are 100% behind this project. We want to see the line built, and we will continue to offer cross-party support, which will include helping to ensure that the necessary legislation reaches the statute book. I know that the Secretary of State faces considerable challenges in securing the support of colleagues on his side of the House. I have spent much of today defending the project in interviews opposite Conservative Members. I hope and assume that the right hon. Gentleman’s lengthy experience as Chief Whip will come in handy when it comes to quelling the rebellions.

The reason why we need to build this new high-speed railway line is clear: capacity. Our existing three main routes between north and south are congested, and in the case of the west coast line, nearly full. If we do not act now, we will face even worse overcrowding. Doing nothing is not an option. Continuing to patch and mend our existing lines is no longer good enough, and will not bring us the major reductions in journey times that HS2 will deliver.

Given the importance of the scheme, I wonder whether the Secretary of State appreciates the level of frustration at the slow progress made so far in the current Parliament. The consultation on the first phase has been botched, not by him, but in his Department. Submissions have been lost, and the Government now face defeat in the courts, which has the potential to take us back to square one on the consultation. The draft route for the second phase was finally set out only today, two and a half years after the election. No legislation has been published. Today’s Command Paper suggests that Royal Assent to the Secretary of State’s first hybrid Bill will not be achieved until some point in 2015, not by the time of the next election as was previously intended. This scheme is too important to be subject either to further delays or to incompetence in the Department for Transport. I hope that the Secretary of State will now do all that he can both to speed up progress and to avoid any further errors.

On the judicial review, will the Secretary of State update the House on when he expects to receive a judgment, and on the impact that a ruling against his Department would have on the plans that he has set out today?

Let me now turn to the specific details of the route announced by the Secretary of State. First, will the right hon. Gentleman think again about his decision to commit himself only to introducing legislation covering the first phase of the line from London to Birmingham in the current Parliament? Of course it is true that a single Bill would need to await completion of the consultation on the second phase of the route, but by introducing the Bill later in this Parliament and carrying it over to the next—as we did with the legislation for the building of Crossrail—we would secure Parliament’s approval for the whole route earlier than we would under the Government’s plans. That would open up the possibility of beginning construction in the north as well as the south, which is something that the Transport Committee has urged the Government to consider.

Secondly, will the Secretary of State look again at the issue of connectivity between HS1 and HS2, which many, including his own party’s Mayor of London and also Transport for London, believe to be totally inadequate? The proposal to make use of an existing part of the North London line looks like a back-of-an-envelope fix that is not focused on the long-term potential for international rail travel. Surely we need to build a dedicated, purpose-built link between HS1 and HS2. I urge him to look at this again.

Thirdly, will the Secretary of State listen carefully to the concerns that he will have heard today about the decision not to connect HS2 with our major city centres in some instances? I appreciate the difficulty, not least in terms of engineering and cost, of taking a new rail line into an existing major rail station and enabling through services, yet the consequences of not doing so are potentially economically to disadvantage city centres and encourage out-of-town development; and passengers losing much of the journey time savings achieved by using the new line as they transfer to get to their city centre destination. I know that there are differing views on this from city to city, and there is no single right answer, but the Secretary of State’s proposals today make it clear that the recommendations are just “initial” recommendations and I hope that that indicates a willingness to continue a dialogue on these issues, not least with the cities themselves.

Finally, will the Secretary of State accept that today’s decision to kick into the long grass how HS2 will connect to Heathrow is a major error? As he knows, our preference, as a result of our policy review, is to take the line direct via Heathrow. That was the Conservative party’s position before the last election and I am sorry that it no longer supports it. However, the Government’s compromise of a spur was at least a recognition of the need to provide a direct link to Heathrow from HS2. Abandoning that today sets back the potential for HS2 to deliver transfer traffic to our hub airport via high-speed rail rather than short-haul flights, an approach that has the potential to free up valuable slots that could be used for new long-haul flights to serve emerging markets.

The Secretary of State says that that decision has been taken because the Davies commission on aviation will not report back before 2015. Surely the answer is not to delay decisions on HS2 but to speed them up on aviation. Will the Government finally accept that 2015 is far too late to have an answer to our longer-term aviation capacity needs? Will he agree to our call for the commission to produce its final report way in advance of 2015, enabling cross-party talks on a way forward that can be put to people at the next election? That would deliver the certainty needed not just for aviation, but on the route for HS2.

I hope that the Secretary of State will consider those four issues in the spirit in which they are raised. We seek to improve the Government’s proposals, because it is vital that we get this right if all the benefits we all seek are to be realised.

[Mr McLoughlin]

May I start by thanking the hon. Lady for the support that she gives, in principle, to the project? I fully accept that HS1 was finished by the previous Government, but if we needed to get into a debating argument, I could say that it was started by the previous Conservative Government, who had the foresight to say how important it would be. Anyone who uses St Pancras station will have seen what a vast difference has been made to that station since HS1. It used to be a station that nobody wanted to go to, but now it is a destination in itself. I wanted to make that particular point first.

The hon. Lady raised a number of points. She said that I will have certain strong voices against me on this side of the House, but I dare say—I know this from some of the letters I have received from Labour Members—there will be some vocal opponents on her side of the House too. We will see how the debate goes, but that is the case. She also asked me to speculate on what might happen in the judicial review. I may have been in the Whips Office for 17 years, but I am not prepared to start speculating from the Dispatch Box on what the courts may or may not say. We will wait to hear what is said, because a judicial review has taken place. I believe that the Government have acted properly in the way this has gone forward, but we will wait to see what happens on that.

The hon. Lady talked about how some cities are disappointed not to have stations directly in the city centre. As I said in my statement, this is the start of the process and not the end of it, but I say to her that HS2 is not just about serving cities; it is about serving the regions, and so this goes a lot wider than just the cities. Some cities will have a station in them, because of the way in which things have been constructed and the way in which we can engineer into them. In certain other areas the engineering is much more difficult and a lot more expensive, but as I have said, we will of course listen. I have engaged with the city leaders—I know that some of them will be disappointed that I have not been able to say to those cities exactly where the route has gone until today—and so that process is there.

The hon. Lady talks about having a greater link between HS1 and HS2, and I am certainly prepared—I have received representations from the right hon. Member for East Ham (Stephen Timms), who is sitting directly behind her—to look at how that can be done. However, it is true to say that, even as presently announced, HS2 will be able to serve areas of the continent direct if there is a demand and need for that.

The hon. Lady made the point about Heathrow. The Government have set up a commission to try to get a consensus. We have a welcome consensus on HS2—cross-party consensus on big infrastructure projects is a tremendous advantage because of the time that such projects naturally take. However, it is right to see what the Davies commission says.

The hon. Lady’s final point was to ask whether we could hold the project off and bring the measures together in one Bill. That would lead to a tremendous delay. There would not just be a delay while we consulted, but a delay while the environmental assessment was conducted and consulted on. Far from making the process quicker, it would be delayed; I estimate that it would mean we probably could not have a Bill ready until 2018. I want a Bill to begin its progress in this Parliament. Of course, how the Bill progresses is up to Parliament.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

Today, Mr Speaker, thousands of people will be faced with the blight and uncertainty that you and I are familiar with, because our constituents across Buckinghamshire have suffered it for nearly four years. If the Government are determined to have HS2 and to force it through, and as the Secretary of State has stressed that the economic need is greater in the north, why not really reconsider and start HS2 in the north so that the benefits are more immediate and the connectivity to the south-east and on to global markets through the as yet undecided hub airport can be better guaranteed and integrated? Would not that make more common sense?

[Mr McLoughlin]

I know how my right hon. Friend feels on this subject, and I appreciate how Members whose constituencies have the line going through them have strong representations to make in the House. However, starting the route in the north, on which, up until today, work had not been done, would not be a better way of getting greater connectivity and connections. We should bear in mind that the routes I have said are overcrowded are even more overcrowded when they come into London, which is where we need the extra capacity in the first instance.

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

The Secretary of State has said that he will ensure that people are compensated fairly. In December 2010, his predecessor said exactly the same thing about the people in my constituency who are affected by the first phase. However, at a meeting on Thursday in my constituency, officials from HS2 Ltd and the Department for Transport made it crystal clear to many people living near Euston station, including some of those who had exercised their right to buy their council flats, that they would not be fully compensated, and that others, including people whose businesses will be totally destroyed, will not be compensated at all. Can we rely on the Secretary of State to ensure that, when he says one thing in the House of Commons, his officials do not set it aside in the country?

[Mr McLoughlin]

I believe the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), gave the right hon. Gentleman an assurance on that point last Friday. I am certainly prepared to meet the right hon. Gentleman to discuss these matters and to try and clear up what confusion there seems to be.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

In view of the continued drift from north to south, which has been a characteristic of this country for many decades, and which places enormous pressure on services and facilities in constituencies such as mine, should not HS2 be hailed as the most dramatic attempt yet to correct that national imbalance to the advantage of the country as a whole?

[Mr McLoughlin]

When HS2 is fully up and built, it will have a major impact on the north and will help dramatically to rebalance the economy, which is so desperately needed. I am grateful for my right hon. Friend’s support.

[Helen Jones (Warrington North) (Lab)]

Is the Secretary of State aware that there is great concern in Warrington because it will not get an HS2 station? Warrington has developed its economy based on its good transport links, but we are unsure whether trains running on the existing line from Crewe will be sufficient. There is also concern that the line that will join the west coast main line at Wigan goes through parts of my constituency along a linear park, so we get the disruption without the benefits. Will he undertake to work with Warrington borough council and other interested parties to consider alternatives so that Warrington can benefit from HS2?

[Mr McLoughlin]

Of course, I am prepared to do that and I am sure that Warrington council will want to take part in the consultation I announced today. Warrington will be served in the same way as Liverpool and other areas, such as Wigan, but of course I will consider the hon. Lady’s representations. I want to make it clear that today is the start of the process, not the end. It is, however, the start of a very important and beneficial process for the United Kingdom.

[Mr Alan Reid (Argyll and Bute) (LD)]

Liberal Democrats very much welcome the announcement today that journey times to Leeds, Manchester, Glasgow and Edinburgh will be reduced by almost an hour. I also welcome the Secretary of State’s aspiration to reduce the journey time to Scotland to three hours. How are his discussions with the Scottish Government about that aspiration going?

[Mr McLoughlin]

I am grateful to my hon. Friend. I announced my proposals for Scotland last October, but I have been concentrating on the proposals I have set out today for the moment. However, my right hon. Friend the Minister of State spoke to members of the Scottish Government about the scheme and they are keen to be involved.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I welcome today’s statement, which represents important investment for the future, but will the Secretary of State confirm that that will be part of investment in an integrated national rail system so that areas that are not on the high-speed line will benefit, too?

[Mr McLoughlin]

Indeed I can. I am grateful to the Chairman of the Select Committee on Transport, who I know will probably want to carry out a detailed inquiry into this matter. Although it is true that some areas are not covered by high-speed rail at the moment, it will go up to Birmingham in the first instance and then to Manchester, and journeys will be able to carry on from there, as they do in Kent on the line that goes down to Ashford.

[Sir Roger Gale (North Thanet) (Con)]

Thank you, Mr Speaker; your calling me was timely. My right hon. Friend is to be congratulated on having the courage and conviction to seek to drive through investment in this country’s infrastructure future. The hon. Member for Garston and Halewood (Maria Eagle) sought to take the credit for High Speed 1, but the problem with that is that it is not finished at all. Will my right hon. Friend, while he is doing all this, ensure that HS1 runs through from Ashford to Thanet?

[Mr McLoughlin]

My hon. Friend sees the advantage of high-speed rail down to certain parts of Kent and wants to extend it. I am sure that he will carry on making that case, but at the moment I hope he will forgive me for saying that I want to try to concentrate on the plans I have announced today, although we are always looking to improve services across the country.

[Paul Blomfield (Sheffield Central) (Lab)]

The Secretary of State is right: what matters are the jobs. An independent study conducted for South Yorkshire passenger transport executive and Sheffield city council shows that a station in the city centre would bring up to £5 billion more into the local economy than a station at Meadowhall and would create 6,500 more jobs. Will the Secretary of State commit to keeping an open mind on that option?

[Mr McLoughlin]

I said at the beginning of my statement that I would keep an open mind. I accept the points about Sheffield and I know that there will be disappointment that HS2 is not going directly into the city centre. We have tried to ensure that we serve the whole of the region through the Meadowhall station, but as I have said, today is the start of the process and we will enter into discussions, as I have told the leader of Sheffield city council, with all the prominent leaders in the area.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

I warmly endorse the proposed station at Manchester airport, but may I also stress the importance of the point that compensation for those living close to the route should be not only generous but creative in ensuring that we can move as quickly as possible towards realising the new high-speed rail route?

[Mr McLoughlin]

I am grateful to my hon. Friend for that question. We are consulting on compensation, and at the moment we are part of the way through that consultation. He makes an extremely important point, and I am glad that he welcomes the fact that we will serve Manchester airport as well as Manchester.

[Mr Dennis Skinner (Bolsover) (Lab)]

Would it not make a lot more sense for the Secretary of State to tell the Chancellor that he ought to be spending £33 billion straight away on capital projects—housing and all the rest? As for Derbyshire, why is it that the preferred route seems to travel to the heavily populated eastern side of Derbyshire? I do not think it touches Derbyshire Dales at all. How many homes will be blighted as a result?

[Mr McLoughlin]

Many things can change—people in the Whips Office can become Ministers—but one thing is certain: the hon. Member for Bolsover (Mr Skinner) will come out with the same arguments against any proposals. [Interruption.] He wants us to spend money now. We are spending money now. We have had massive investment in the railways and we have announced massive investment in the railways. He points out that the route does not go through my constituency. I am well aware of that, but I can assure him that I took very careful advice and followed the recommendations. The sustainability summary goes into great detail about why that particular part of the route was chosen. There are many people who would have liked it to go to Derby.

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

I declare an interest. Plans unveiled this morning suggest that the preferred route of HS2 will pass within 100 feet of my family’s home in North West Leicestershire. Can my right hon. Friend confirm the level of consultation already undertaken by those planning the HS2 route? East Midlands airport in my constituency was unaware until this morning’s announcement that a tunnel was planned under its site, and a developer of an area north of the airport looking to produce a rail freight interface was equally not consulted. The route puts in jeopardy a potential £450 million private sector investment now in my constituency, and the creation of up to 7,000 new jobs.

[Mr McLoughlin]

There is always a dilemma for us as to who we talk to and consult. It would have been wrong of me to start telling people where the route was going before I had laid the documents before Parliament this morning. We will start that consultation. If my hon. Friend has had a chance to look at the sustainability summary that goes with the document I published today, he will have seen on page 70 that the area he is talking about is marked for tunnelling under East Midlands airport, and the east midlands gateway rail freight interchange development site is clearly marked. We will obviously work with developers to minimise the impact wherever we can.

[John McDonnell (Hayes and Harlington) (Lab)]

The decision to delay the recommendations on the Heathrow spur until the Howard Davies commission has reported means that my constituents face at least another two years of uncertainty. Is not one solution to bring forward the Davies report, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) suggested? Even if the Davies commission’s interim report this year dealt with the matter, we would have more certainty about the connection with Heathrow.

[Mr McLoughlin]

I hear what the hon. Gentleman says. I have made clear the Government’s position as to why we have done what we have done. We think it is a sensible way to go but I am sure he will make those representations in the consultation process.

[Michael Fabricant (Lichfield) (Con)]

Although I accept the need for an additional line to relieve capacity on the rail network, this route plunges through rural Britain, and rural Staffordshire, and should use existing transport corridors. It blights the environment, homes and lives. Does my right hon. Friend understand that what my constituents and all our constituents need is certainty, so that they understand the impact the line will have, what vibrations it will produce and what the visual impact will be? Most important of all, they need certainty about what compensation they will receive.

[Mr McLoughlin]

Part of the reason for bringing forward the consultation period from next year to this year is to help my hon. Friend’s constituents, but I fully accept that where the line is going is inconvenient to some people. We cannot build a brand-new railway line and not upset anybody. We believe that it is very much in the national interest and in the interests of the United Kingdom.

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

It was a great pleasure to see the Secretary of State and the Prime Minister on platform 6 at Leeds station this morning. He knows the benefits of HS2 to areas such as Leeds and Bradford. This is a long-term project and there are two projects in the short term that will help both Leeds and Bradford—the links to the airport so that it can expand and the Wortley curve between Leeds and Bradford. Will he look at those projects as well?

[Mr McLoughlin]

It was a pleasure also to see the hon. Gentleman this morning. I hope that as a result of having announced in this way where the route will go, improvements can be achieved in the interim period in some of these areas. I have talked to Leeds city council about the site that we have earmarked, and it is, as I understand it, content with it.

[Andrea Leadsom (South Northamptonshire) (Con)]

The consultation on compensation for phase 1 ends this week. First, I urge my right hon. Friend not to take the word of his departmental officials but to look himself at the impact of the exceptional hardship scheme on many constituents whose lives have been utterly destroyed by incompetent and completely inconsistent panels. Secondly, I urge him to reconsider a property bond. Although officials have said there is no evidence that that works, it would be the one way to ensure that the blight that extends for miles in my constituency is removed. Finally, I urge him to look at the fairness of compensation between phase 1 and phase 2.

[Mr McLoughlin]

As my hon. Friend correctly said, the consultation period on the compensation scheme ends at the end of this week. I know that she has put her own representations into that consultation, and of course I will consider them among many of the other representations we have received.

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

I welcome the Secretary of State’s announcement of an HS2 station in Sheffield. There is an argument for having it in the city centre, but I understand why he has chosen Meadowhall on grounds of cost and time. In particular, it should be a station for the whole city region. Will he therefore give an assurance that his Department will work closely with local councils and South Yorkshire passenger transport executive to make sure that there is real connectivity in the whole Sheffield city region so that everyone can get to the station at Meadowhall easily?

[Mr McLoughlin]

I am grateful to the hon. Gentleman. He is a former leader of Sheffield city council and therefore speaks with authority on this matter, as he does in his role as Chairman of the Communities and Local Government Committee, so I will obviously look at those matters. He is right that there is a balance to be struck. He will see that in the document we address why we have arrived at the conclusions and recommendations that we have, but I am of course prepared to listen to any further representations.

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

I warmly welcome the Secretary of State’s announcement, particularly the decision to have an additional station at Manchester airport. However, there will be some anxiety among people in south Manchester about the proposal to have a deep tunnel under homes there. What assurances can he give that they will not face years of disruption?

[Mr McLoughlin]

When carrying out these big projects, there will always be the problem of inconvenience caused during the period of construction, and I hear what the hon. Gentleman says. We will work with local communities to try to ensure that we minimise the impact. I am glad that the area he mentions is to be tunnelled; a lot of colleagues would wish that more of the route was tunnelled.

[Ann Coffey (Stockport) (Lab)]

I support this announcement, but it is estimated that it could take up to 20 years to build the line to Manchester. Will the Secretary of State assure me that in the meantime priority is given to making sure that the west coast main line gets the investment needed to improve the current line from London to Manchester, including upgrading Stockport station?

[Mr McLoughlin]

The hon. Lady is consistent, if nothing else can be said about the points that she makes; I had already anticipated the question before she had finished asking it. Yes, money is continuing to be spent on the west coast main line. I will look into the position with her local station, as I promised to last time she asked me a question. I failed to write to her then, and I will certainly do so this time.

[Richard Harrington (Watford) (Con)]

I commend the Secretary of State and the Government on this courageous and very significant announcement on HS2. It is particularly of interest to the cities with new stations, but what does he think the effect will be on my constituents in a place that will not be directly affected but is suffering from very poor capacity and a very poor service from London Midland?

[Mr McLoughlin]

My hon. Friend hits on one of the fundamental reasons why we need to build HS2. It is not just a matter of journey times but capacity. Freeing up capacity will allow us to have more services from areas such as my hon. Friend’s, as is so desperately needed.

[Stewart Hosie (Dundee East) (SNP)]

I welcome the statement, thank the Secretary of State for advanced notice of it and recognise the Government’s ambitions for reduced journey times to Scotland. However, reducing journey times to Glasgow and Edinburgh, and further along the east coast to Dundee and Aberdeen, would require HS2 to go beyond Manchester and Leeds. I know that the Secretary of State is doing this in a phased way, but when will he be in a position to tell the House the time scale for the completion of HS2, so that every major city on the island will be able to benefit from it?

[Mr McLoughlin]

I face a dilemma because some people want us to go a lot faster while others among my colleagues do not want us to go at all. We will have to bear that in mind, but I hope that we will have fuller plans before any decision is made about independence. That depends, however, on whether the hon. Gentleman can let me know the date of the referendum.

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

I welcome my right hon. Friend’s statement, particularly how it has highlighted the benefits of the network to my constituents in Milton Keynes. On the issue of city centre against parkway stations, may I draw his attention to the evidence from the continent that both can work and that the critical point is having good connectivity across the region? May I also urge him to continue to work with local authorities and local businesses to make sure that this delivers?

[Mr McLoughlin]

I thank my hon. Friend for his support and, indeed, for his work on the Transport Committee. I agree entirely with his point. Setting out our plans now and confirming them, I hope, by early next year will enable us to look at connectivity between stations in the period between our plans being outlined and the actual development.

[Graham Stringer (Blackley and Broughton) (Lab)]

There is tremendous support for this project in Manchester and the north of England, but, having heard from the right hon. Member for Chesham and Amersham (Mrs Gillan) that, surprisingly, she supports building HS2 from the north of England, will the Secretary of State reconsider what he said earlier and put both phases of HS2 into one hybrid Bill and consider building them from the north of England? In doing so, he would unite the House in an even bigger way than it is united at present.

[Mr McLoughlin]

The hon. Gentleman says that that would unite the House in a more cohesive way, but it is fairly united for such a controversial subject, as has been clear from the exchanges so far. As I have said, the proposals to go from north to south would mean further delay, and I point out that the first part of the route was actually published by the previous Government, who also thought that the right way to go was from London to Birmingham in the first instance.

[Jeremy Lefroy (Stafford) (Con)]

I thank the Secretary of State for his announcement. It is vital that the best possible mitigation, including some realignment, is offered to those of my constituents who will be affected by the route. If HS2 is to bring jobs and prosperity, as he desires, to the wider west midlands region, a stop on the route is required in Staffordshire. May I ask him to take that fully into account?

[Mr McLoughlin]

I certainly will. My hon. Friend makes a valid point. The route goes substantially through his constituency and areas that are not near motorway corridors or the like, and I will certainly look at his representations.

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

On behalf of Manchester, I strongly welcome the proposals that the Secretary of State has laid before Parliament today, not, as others have said, as a panacea to stop the north-south divide, but to build on 15 years of urban renaissance started by the Labour council and Labour Government. The redevelopment opportunities presented in my constituency in and around Manchester Piccadilly station are also exciting. May I echo the comments of other colleagues and ask the Secretary of State to consider introducing a hybrid Bill, so that we can maximise those opportunities here and now, not several years in the future?

[Mr McLoughlin]

I welcome the hon. Lady to the House and to the Transport Committee, where she will no doubt want to return to this topic on many occasions. I was slightly chastised earlier by the hon. Member for Garston and Halewood (Maria Eagle) on what the courts may or may not say about HS2. If I followed the route suggested by the hon. Member for Manchester Central (Lucy Powell), I know that I would find myself on the wrong side of judicial reviews.

[John Stevenson (Carlisle) (Con)]

I welcome the announcement on the developments on HS2 and the substantial investment in our rail network. However, will the Secretary of State confirm that the existing west coast line will continue to receive the investment that it requires? In particular, will signalling upgrades be more than just like-for-like and bring capacity improvements?

[Mr McLoughlin]

I can assure my hon. Friend of that. Over the new year, I saw the upgrading work at Shugborough tunnel. That is the sort of investment that no one normally sees. Until that work was done, trains could go through the tunnel at only 50 mph. They can now go through it at 125 mph. I fully accept the need for continued investment. My hon. Friend’s constituents will benefit from High Speed 2 up to Manchester and will be able to pick up the normal lines beyond that.

[Stephen Pound (Ealing North) (Lab)]

May I strongly endorse what the hon. Member for South Northampton- shire (Andrea Leadsom) said about property bonds? The Secretary of State is speaking about phase 2, but he has mentioned Old Oak Common. Although I am extremely grateful to the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns) for his engagement with the local community, fear still stalks the streets of Greenford, Northolt and Perivale. Will the Secretary of State say whether it is his preference for that section of the line to be tunnelled? If so, it will be a great relief to many long-suffering constituents of mine.

[Mr McLoughlin]

The hon. Gentleman is making a representation to me that he has made before to the Minister of State. We will consider that representation and when we are in a position to make an announcement, we will do so.

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

I congratulate my right hon. Friend on his excellent statement. Does he agree that this investment should be seen alongside the other major rail announcements for the north that have been made recently, such as those on the northern hub and the TransPennine Express electrification project? Together, those projects will transform the experience of rail in the north.

[Mr McLoughlin]

I agree completely with my hon. Friend. Those announcements show the Government’s commitment to the rail industry and to the railway services that we all want in our constituencies.

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

Will the Secretary of State say how major cities such as Coventry will benefit from this project, bearing in mind the representations that I made to him some weeks ago on that matter? Secondly, and more importantly, there will inevitably be people who fall outside the compensation formula. What does he intend to do about that, because I know of cases in Coventry and Warwickshire?

[Mr McLoughlin]

I am willing to listen to any representations, but a line has to be drawn somewhere on such developments. I think that Coventry will be served by the large station at the Birmingham International exchange before the line goes into Birmingham Curzon Street. It is up to Coventry to work with the Department to work out the best possible routes to link in with the line so that people in Coventry have the advantage of HS2.

[Nigel Mills (Amber Valley) (Con)]

I warmly welcome the announcement and especially the fact that the route will miss my constituency off to the east. Will the Secretary of State confirm that there will be good links not only to Nottingham and Derby, but to smaller local stations, such as the three in my constituency?

[Mr McLoughlin]

I am grateful to my hon. Friend and constituency neighbour. As I have said, capacity is one of the key reasons for building the new route. It will be the first railway line to be built north of London in 120 years. We need extra capacity. By freeing up capacity, the line will enable there to be better services elsewhere.

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

I, too, welcome the proposed station at Manchester airport, which will help to sustain many new jobs across the city region and particularly within airport city and other parts of the Manchester enterprise zone in my constituency. Will the Secretary of State ensure that those who are responsible for HS2 continue to work closely with the local authorities and the airport so that these different initiatives are properly linked together and bring the maximum possible benefit to local communities?

[Mr McLoughlin]

I thank the right hon. Gentleman for his support and for his attendance at last week’s meeting of the all-party parliamentary group on high speed rail. I can give him that assurance. As I said earlier, this is the start of the process, not the end. We want to get the maximum possible value out of the investment.

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

On a number of recent occasions, trains pulling into Leighton Buzzard station have been so full that no passenger has been able to get from the platform on to the train. Will HS2 help them?

[Mr McLoughlin]

I very much hope so. My hon. Friend makes a point about the important need for greater capacity, and I will look in great detail at how the issue may affect his constituents.

[Mr David Anderson (Blaydon) (Lab)]

Without any three-lane motorway north of north Yorkshire, and with a dual carriageway that ends just north of Newcastle, the north-east has the worst road system in the country. We are now being told that we will also have a second-rate railway system. Does the Secretary of State agree that the best we are going to get in the north-east is HS1.5?

[Mr McLoughlin]

I am sorry that the hon. Gentleman feels that way. We have just announced a major investment in dualling the A1 up to Newcastle, and I will look at other schemes in due course.

[Mr Adrian Sanders (Torbay) (LD)]

May I lodge with the Secretary of State some very real concerns from the far south-west in Devon and Cornwall? The area already suffers from the slowest rail speeds and most expensive fares, yet billions of pounds are being invested elsewhere. What message can he give the people of Devon and Cornwall that they will benefit directly from that investment?

[Mr McLoughlin]

I very much recognise the position faced by the hon. Gentleman’s constituents as far as the great western line is concerned, and I have organised a special briefing for Members of Parliament from Network Rail about that section of the rail network. As a new member of the Transport Committee, the hon. Gentleman will want to keep that under guard.

[Stephen Timms (East Ham) (Lab)]

May I press the Secretary of State on the concern raised by my hon. Friend the Member for Garston and Halewood (Maria Eagle) about the HS2-HS1 interconnection? As I understand, under current proposals it will be limited to, at most, three trains per hour. As I am sure the Secretary of State will want trains from new HS2 destinations to run beyond London and across the channel, will we not have to do better than that with the interconnection?

[Mr McLoughlin]

I think I tried to address that in an earlier answer. Of course I want to look at how the connection works, and it will be possible to run some services from Old Oak Common direct to the continent if there is demand for that. We will certainly look at the issue, and at how the whole London interconnection works.

[David Mowat (Warrington South) (Con)]

This project is very important to the wider economy in the north and north-west. Given that the revised business case remains considerably better than, for example, the Crossrail business case, will the Secretary of State do what he can to deliver this project before 2033?

[Mr McLoughlin]

I take that as a request to get a move on and get building a lot quicker. We will see what progress we can make.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Although the Secretary of State’s comments about Staffordshire provide some crumbs of comfort, may I impress on him that unless we have a station in the north Staffordshire area the damage that will be done to our economy will be huge? Conversely, if we get one, the benefits will be equally massive.

[Mr McLoughlin]

As I said at the beginning of my statement, and as I shall now reiterate, these are our initial proposals. We have considered the issue, and I hope the hon. Gentleman will look at the early part of the sustainability study, particularly page 10, which shows the work that went in to try and model this. However, I hear what he says, and what my hon. Friends the Members for Stafford (Jeremy Lefroy) and for Lichfield (Michael Fabricant) are calling for.

[David Rutley (Macclesfield) (Con)]

This is positive news for the north-west. What assessment has my right hon. Friend made of the impact that HS2 will have on existing west coast main line services and, not to put too fine a point on it, services to and from Macclesfield station?

[Mr McLoughlin]

As I have said—I hope I am not becoming boring by being repetitious—we are hoping for greater capacity not only so that my hon. Friend’s constituents are served, but so that we see some movement of freight from road to rail.

[Hugh Bayley (York Central) (Lab)]

I welcome the statement and especially the wise and logical decision to connect the High Speed 2 line with the east coast main line at York. Does the Secretary of State realise that next to York station is the biggest city centre development site anywhere in western Europe—the York Central site? It is important for his officials to safeguard land on that site for additional platforms to get maximum connectivity with conventional rail services, and for local government Ministers to work with York city council to ensure that the area is developed as a business site to benefit from the new railway.

[Mr McLoughlin]

I am very pleased that the hon. Gentleman is so welcoming of the development. High Speed 2 will stop just short of York, but it will obviously be served by it. One of the things that we want to look at with this project is how we get regeneration in areas. This should open up huge potential, especially around station sites, for the north to benefit from connections with the rest of the country.

[Christopher Pincher (Tamworth) (Con)]

I became aware that the proposed Leeds alignment will run just a few hundred yards from Wilnecote and Stoneydelph in my constituency when I looked at the HS2 website this morning. Will my right hon. Friend agree to meet me to discuss mitigations in the Tamworth area if his initial preferred alignment becomes his final preferred alignment? More particularly, can we discuss other, better alternatives?

[Mr McLoughlin]

I am certainly prepared to meet my hon. Friend and discuss alternatives that he may wish to put forward. I hope that he will realise that in deciding on the route through his constituency we have tried to follow an existing major road network. Of course, I will meet him and listen carefully to any representations he has to make.

[Ian Austin (Dudley North) (Lab)]

I strongly support High Speed 2 and very much welcome today’s announcement. The Secretary of State will no doubt have followed the debate about the arrangements between Birmingham International and the city centre. May I suggest that a way of dealing with that controversy and its unpopularity in certain areas would be to take the route along the existing line north of the city and, instead of having the link in the city centre, have it close to the M5/M6 junction in the black country, alongside the M6 at Walsall? There is a huge railway yard there already, and it would have much better links across the black country and Birmingham. It would support exactly what the Secretary of State has said about rebalancing the economy, because it has the largest concentration of manufacturers anywhere in western Europe. It would greatly help with the regeneration of the black country, and it would be easier, cheaper and quicker to build.

[Mr Speaker]

It sounds to me as though the hon. Gentleman wants an Adjournment debate on the subject.

[Mr McLoughlin]

If the hon. Gentleman has one, I will make sure that a Minister answers it properly. I would need to look a bit more closely at the maps, but I think that he is doing the opposite to what most other colleagues with city centre sites are doing. He is asking me to take it from a city centre, and he is thus demonstrating the problems that we have in trying to get a route established and accepted by everyone and that serves the best areas of the country.

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

The Secretary of State said that this proposal must benefit all our regions, and he will know that the best part of our region lies to the east, in the Humber. Can he confirm whether work will begin now on how we can improve our connectivity into Sheffield Meadowhall or say how we can benefit from the increased capacity on the east coast line?

[Mr McLoughlin]

The truth is that my hon. Friend is looking forward to the benefits that will come from this. Part of the reason for making the announcements now is that once we have the route signed off—it is out for consultation—we can look at getting the right connections into these stations in the longer term, for the benefit of all parts of the United Kingdom.

[Alison McGovern (Wirral South) (Lab)]

High Speed 2 is incredibly important for all of Merseyside and our city region’s development. Further to the answers that the Secretary of State has given already on connectivity, will he confirm that the northern hub should not be the end of better inter-city rail services in the north of England, but the start and that we need to start planning for better now?

[Mr McLoughlin]

Yes. I was in Liverpool and met the mayor a few weeks ago. It was substantially easier to get from London to Liverpool than it was to get from Liverpool back to Derby.

[Sir Bob Russell (Colchester) (LD)]

Taxpayers of Essex, Suffolk and Norfolk and users of the Greater Anglia line will contribute to the cost of HS2. We have had years of neglect by successive Governments of rail investment in East Anglia. The Secretary of State has said that he is determined to make sure that the benefits of HS2 run much wider than the places directly served by the new line. How will it benefit Colchester?

[Mr McLoughlin]

Huge investment—£2.2 billion, I think —is already going into the area that serves the hon. Gentleman’s constituency. I appreciate that he might like us to have a high-speed link to his area. We are being ambitious, but I am afraid that that ambition can only go so far.

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

This morning I received an e-mail from a constituent who said he found it utterly incredible that the line should go from Birmingham to Manchester without stopping at the north Staffordshire conurbation. There is anger in Stoke-on-Trent that HS2 will just skim the west of the potteries and not stop there. What benefits can HS2 bring to my constituents? Will the Secretary of State explain the current thinking for a stop at Crewe, rather than one along the M6? What assurances can he give that the existing west coast main line will not be affected?

[Mr McLoughlin]

The hon. Gentleman needs to look at the two documents we have published, but I have made it very clear that today is the start of the process and I expect him to make representations, as he has just done. I know Stoke-on-Trent and the surrounding area incredibly well. We have made improvements to its road infrastructure, but they have been very controversial over many years.

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

I strongly welcome the Secretary of State’s statement, not least as a demonstration of our party’s commitment to the north of England. Although Blackpool will not be getting a high-speed station—I will not stand here today and demand one—will he none the less explain when Network Rail will be able to make an assessment of how much capacity the HS2 project will free up on the west coast main line?

[Mr McLoughlin]

My hon. Friend asks a reasonable question. I think I can best answer it by saying that we will have a better indication of exactly what capacity will be freed up once the line is confirmed and Network Rail is asked to start the work on the consequences of building the line.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Secretary of State made reference not only to passenger capacity on the west coast main line but freight. Given the importance to the Scottish economy of connectivity between Scotland and the rest of the UK, will he discuss with the Scottish Government how freeing up capacity will benefit freight services to and from Scotland?

[Mr McLoughlin]

Now that the hon. Lady has asked me to do so, I will.

[Mr Philip Hollobone (Kettering) (Con)]

Whenever and from wherever construction starts, and whatever configuration High Speed 2 takes, will the Secretary of State ensure that this is a British railway, with the trains built in Britain, the tracks built in Britain, all the equipment coming from British firms, and British workers and British firms building the railway?

[Mr McLoughlin]

I am determined, by the long-term nature of the notice we are giving, that British companies will be able to compete and win the business that will be available, and will go out to tender in the usual way. From what I have seen of British engineering, I believe it is well able to compete with anywhere else in the world.

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

The publication today states that the Government have been working productively with the Scottish Government on this issue for two years, yet after two years the only firm commitment we have is for a further study into high-speed rail to Scotland, followed by identification of a remit for further work. That does not sound like very high-speed decision making to me. Why will the Government not commit themselves now to extending high-speed rail to Scotland, and start preparing the route now to make sure it actually happens?

[Mr McLoughlin]

I gently say to the hon. Gentleman, because he is bringing a chord of disharmony into what so far has been a fairly harmonious occasion, that we have made more progress on high-speed rail in two years than the previous Government did in 13.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I warmly welcome the announcement today that my constituents’ journey time from London to Preston will be reduced by 30% from 2 hours 8 minutes to 1 hour 24 minutes—a great thing for Preston. However, there is still some confusion among the public, who believe that a stop is necessary to benefit from the speed of HS2. Will the Secretary of State make it absolutely clear to many of my constituents, who use Lancaster and Preston, that as soon as phase 1 is started they will benefit from the reduced journey times, whether or not they have a stop?

[Mr McLoughlin]

My hon. Friend is right to say that his constituents will benefit from the opening of the first part of the line, from London to Birmingham, because the trains will be able to travel at high speed between those two cities, saving about 40 minutes on overall journey times. And that is before we have extended the line further north.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Improvements to rail, road and air transport infrastructure are vital if regions such as the north-east are to continue as leading exporters, so will the Secretary of State outline what discussions he has had with regional airports, such as Newcastle International airport, about ensuring that the HS2 plans lead to a properly integrated transport system?

[Mr McLoughlin]

As I said earlier, some of my discussions with various bodies have been curtailed until the route is announced, but those conversations should start in earnest as a result of today’s announcement.

[Henry Smith (Crawley) (Con)]

I commend my right hon. Friend for his statement. He is right about how important connectivity with the London hub airport will be when the issue of the hub is determined. Will cognisance also be taken, however, of the importance of linkage with major international gateways to the south of London, such as Gatwick airport and the Gatwick Express?

[Mr McLoughlin]

My hon. Friend is right. We cannot look at these things singly, but must consider how they impact not only on Heathrow airport but on other airports and availability to constituents who wish to use those services.

[Mr Frank Field (Birkenhead) (Lab)]

I direct the Secretary of State back to the question about construction beginning in the north. Given that London is all-powerful and will see this project completed, if it is in London’s interest, will he take a new stance on the hybrid Bill? If the leaders in Liverpool, Manchester and Leeds could fit in with his timetable, might we have a hybrid Bill please?

[Mr McLoughlin]

Of course I will consider the representations, but it is not so much a question of those leaders of cities in the north fitting in with the timetable, but of the other areas we have to address in the proposals. We are out to consultation, and the right hon. Gentleman will have heard that some people are not too happy with the route proposed and would like changes and adjustments to be made. That takes time, and once we have settled on the route—as I said, we are out to consultation, which means I have not settled on one—we will have to carry out environmental assessments and the like, which I am afraid take considerable time. I am keen to get on with this as quickly as possible, but I am constrained by what we need to do.

[Michael Ellis (Northampton North) (Con)]

I commend my right hon. Friend for what was, in many respects, a courageous statement and one that has support from all corners of the House. Will he confirm, however, that rail fares, which are already high in many areas, will, in respect of HS2, not be too high and will make HS2 accessible to all?

[Mr McLoughlin]

The Department is currently conducting a fares review. Like everybody else, I am keen to see passengers benefit from cheaper fares, but the truth is that those able to book trains in advance and outside rush hour can already get some very cheap fares—cheaper, in fact, than they have been for many years. However, we do not mean to build a railway only to see people unable to take advantage of it. I will want to ensure that people can take advantage of those services.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I welcome the Secretary of State’s commitment to a south Yorkshire-based approach to the placement of the HS2 station in the Sheffield city region. Indeed, the choice of Meadowhall suggested today seems to offer a reasonable way forward. Will he consider ensuring, however, that the enabling aspects of the hybrid Bill contain at least a commitment to phase 2? Let us separate the enabling from the quasi-judicial aspects of the Bill.

[Mr McLoughlin]

I am grateful to the hon. Lady for that suggestion and will think on it a little more.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

When it comes to the impact of High Speed 2 on Lancaster and the rest of the north-west beyond—dare I say—Manchester and Merseyside, if I understood it correctly the Secretary of State was saying that high-speed trains from London to Manchester would enter the west coast main line just above Wigan, stopping at Preston, Lancaster, Carlisle and Glasgow, so that we in Lancaster will therefore also get shorter journey times.

[Mr McLoughlin]

The answer—[Interruption]—I am sorry, I was trying to follow exactly what my hon. Friend was saying and checking the points he was making—is that shorter journey times to Lancaster will certainly be a result and a benefit for his constituents.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

On the very point that the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) has just made, what will be important for those travelling beyond the Wigan area is quality connectivity, so that people can continue and eventually complete their journeys. The Secretary of State has also mentioned that the Minister of State has been in contact with the Scottish Government. Is it best that I meet his right hon. Friend to discuss how those discussions have gone?

[Mr McLoughlin]

I am more than happy for the hon. Gentleman to meet the Minister of State, and I will do all I can to facilitate such a meeting.

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

The Secretary of State will be pleased that I am not asking for a re-routing via Bridgend or Aberystwyth—yet!—but what I would ask, echoing the sentiments of my hon. Friend the Member for Hayes and Harlington (John McDonnell), is whether he will consider bringing forward the Heathrow spur, which would bring a direct, long-term economic advantage to south Wales, Bristol and Avon.

[Mr McLoughlin]

I think the hon. Gentleman is referring to the great western spur, which is in the outline of the plans we have talked about for 2014 to 2019. As somebody who had a daughter who went to Aberystwyth university, I think that what he refers to would create some challenges for us.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Given the dire economic statistics that we saw on Friday, what will the Secretary of State be doing to ensure that those in the UK steel industry are given priority in procurement contracts for long steel products—I am thinking of sites such as Scunthorpe and Teesside beam mill—so that regions such as the north-east can benefit from this project?

[Mr McLoughlin]

The hon. Gentleman makes a perfectly reasonable point. I want to see British industry able to benefit from this. There will need to be competition, but I am pretty sure that British industry will be able to compete and provide the services we want and require. We will also be looking for engineers who can work on this scheme. Indeed, the construction phase will create many thousands of jobs, with, I think, the scheme creating many thousands of jobs for the longer-term future of the country.

[Jonathan Ashworth (Leicester South) (Lab)]

As an east midlands MP, the Secretary of State will know that his announcement today has not been universally welcomed across Leicestershire. It is certainly true that the city of Leicester will not see the same advantages that the wider Nottingham and Derby conurbations will see, with the proposal to put the station at Toton. One way he could win over his Leicestershire critics would be to bring forward—and start sooner—the electrification of the midland mainline.

[Mr McLoughlin]

The hon. Gentleman makes a tempting offer. We are committed to the electrification of the midland mainline, which will have substantial benefits for Leicestershire. I would add that East Midlands airport was built by the three counties—Leicestershire, Derbyshire and Nottinghamshire—and is situated at the north of Leicestershire, which the county at that time felt was beneficial to it. The Toton sidings are basically not far from the north end of the county, so I think they will have benefits for Leicestershire as well.

[Ian Mearns (Gateshead) (Lab)]

Twenty years ago, I could travel from Newcastle to London in 2 hours and 38 minutes. In his announcement today, the Secretary of State said that in 20 years’ time we will be able to do it in 2 hours and 18 minutes. Does he think that 40 years is enough for 20 minutes, given the importance of connectivity for the economic regeneration of a place such as the north-east of England?

[Mr McLoughlin]

I imagine that I would need to check out the timetable that the hon. Gentleman has just alluded to, because it is not unknown for Opposition Members to look on the past through rose-tinted glasses. Part of the problem might be that more people are now using the railways so there are more stops, which means that his journey is perhaps taking a little longer than it used to. However, I am very much minded to ensure that his region, like every other region in the north of the country, can benefit from the proposals I have brought forward today.

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

The Secretary of State will be aware of the strength of support in the Scottish Chambers of Commerce and in Glasgow and Edinburgh city councils for the extension of high-speed track right up into Scotland’s two major cities. Would it hasten the evaluation of the economic case for that if the Minister were to commit to legislating, in this Parliament, in a single Bill covering the entirety of the route between London, Manchester and Leeds?

[Mr McLoughlin]

I refer the hon. Gentleman to the reply that I gave some time ago.

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

I, too, welcome today’s announcement, and I particularly welcome the news that there will be two stations in Manchester. That makes a great deal of sense in relation to the connectivity that will already exist through the northern hub investment. May I reiterate to the few critics of high-speed rail that the case for this project is based on capacity, not on journey times? If we were to spend the same amount of money on the west coast main line, we would get nothing like the amount of capacity that will be freed up by High Speed 2. That is why this is the right choice for the northern economy.

[Mr McLoughlin]

The hon. Gentleman is absolutely right. This will give faster journey times, and I think that people will welcome that, but one of the overwhelming reasons for High Speed 2 is capacity. It is a fact that no new railway line has been built north of London for 120 years, and it is high time that that was put right. If we are to add to the capacity, it is right that we should take advantage of high-speed trains, which every other country in Europe and all our major competitors have already adopted.

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

This will be good news for the Greater Manchester economy, albeit some time in the future. May I press the Secretary of State on the point made by my hon. Friend the Member for Ogmore (Huw Irranca-Davies) about connectivity? If the Greater Manchester economy is to get maximum benefit from High Speed 2, we will need proper connectivity with the continent, with London and with Heathrow airport. We can do better than the plans set out in these proposals. Will the Secretary of State commit to providing proper connectivity with Europe and with Heathrow airport?

[Mr McLoughlin]

What we have announced today is exciting for the north and for the future of the rail industry in this country. The hon. Gentleman talks about connectivity, but this is a matter of connectivity not only with the south but with the major cities of the north. As I said earlier, it can take longer to get from Manchester to Derby than from Manchester to London. This is about connectivity between the major city regions in our country, and we are determined to work towards that. I thank the hon. Gentleman for his comments, and I hope that we can satisfy his requests at least in part.

Points of Order

Monday 28th January 2013 Commons Chamber

16:47

[Mr Edward Leigh (Gainsborough) (Con)]

On a point of order, Mr Speaker. You will know that the Second Reading debate on the Marriage (Same Sex Couples) Bill will take place next Tuesday. It obviously raises profound moral, emotional and legal issues, but I would argue that it also raises important constitutional issues affecting the Church of England and the status of marriage itself. Have you had any intimation from the Government that, in order to ensure proper scrutiny of the Bill, its Committee stage will be taken on the Floor of the House?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. The short answer to his inquiry is no, I have received no such intimation. Of course, the Chair is always in favour of more debate rather than less, and of debate that is as accessible as possible, but it is only right to say to him and to the House that the decision on the type of Committee to which a Bill is committed is a matter for the House; it is not a matter of order for the Chair. Needless to say, the Chair will always do as the House instructs. I hope that that is clear, and I am grateful to the hon. Gentleman.

[Jim McGovern (Dundee West) (Lab)]

On a point of order, Mr Speaker. On 4 December, I participated in a Westminster Hall debate on Remploy, in which I asked the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey)whether she would visit the Remploy factory in Dundee. She very generously said that she would, and I expect to see her there next Monday, 4 February. In the debate, I also asked her whether she would speak to the Minister for Defence Procurement, the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), about awarding contracts to Remploy for manufacturing uniforms for the armed forces. I have yet to receive a response on that. You might be aware, Mr Speaker, that I tried to intervene in a debate on 15 December, and that I raised this matter as a point of order on 16 December. I have yet to receive a response from the Minister. Will you advise me how long I should wait for a response from a Minister?

[Mr Speaker]

I fear I can offer little assistance to the hon. Gentleman in this matter. There are two points to mention. First, he can pursue the route of tabling questions on the Order Paper to highlight his continuing concerns and the absence thus far of a response to them. Secondly, I note in passing that the Deputy Leader of the House is in his place, and that in my experience the Leader of the House and the Deputy Leader of the House are always attentive to parliamentary courtesies. If the hon. Gentleman has been promised a response or some other commitment has been made to him, which has not yet been honoured, I say in all seriousness to him that that will be a source of some legitimate concern to the Deputy Leader of the House. Indeed, it is conceivable that the two of them might wish to have a chat outside the Chamber. I do not know; we shall see.

If there are no further points of order, we come on to our main business.

Succession to the Crown Bill

Monday 28th January 2013 Commons Chamber

Further consideration of Bill, as amended in Committee

New Clause 1

Removal of disqualification arising from faith

‘(1) A person is not disqualified from succeeding to the Crown or from possessing it as a result of that person not joining in communion with the Church of England as by law established; and all provisions to the contrary in the Bill of Rights and the Act of Settlement are accordingly superseded.

(2) Where a person who succeeds to the Crown or possesses it declares to the Privy Council that he or she is not in communion with the Church of England as by law established, the person who is next in line of succession to the Crown and who is in communion with the Church of England shall perform the functions of Supreme Governor of the Church of England in the name of and on behalf of the Sovereign.

(3) The provisions in subsections (3) to (5) of section 3 of the Regency Act 1937 apply to such a person who is Supreme Governor, with the substitution for references to the Regent of references to the Supreme Governor.’.—(Jacob Rees-Mogg.)

Brought up, and read the First time.

16:50

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

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 1, clause 2, page 1, line 10, at end insert—

‘(2A) A child of a marriage, which at the time of the marriage disqualified one of their parents from succeeding to the Crown or possessing it, who is at the time of the coming into force of this section of the Roman Catholic faith shall not as a result be for ever incapable of succeeding to the Crown.’.

Amendment 2, clause 2, page 1, line 10, at end insert—

‘(2B) A child of a marriage, which takes place after the coming into force of this section between a Roman Catholic and a person in line of succession to the Crown, who is of the Roman Catholic faith shall not as a result be for ever incapable of succeeding to the Crown.’.

[Jacob Rees-Mogg]

It occurs to me that the Leader of the House must have a sense of humour. Today, as I am sure you know, Mr Speaker, is the anniversary of the death of his late Majesty King Henry VIII, so it seems only appropriate that we should be discussing the Succession to the Crown Bill on such an anniversary. After all, King Henry introduced three succession to the Crown Bills, and some of the problems we are dealing with today originate with his reign. I have proposed two further amendments, which you have graciously said, Mr Speaker, we can deal with in the course of our debate on the new clause, and I shall come to them secondarily.

New clause 1 is the crucial part of what I am proposing. It is a development within the context of the Bill to attend not just to one discrimination but to a second that is inherent within the current rules governing the succession. From time immemorial, the succession has gone to the eldest male heir, but since the Act of Settlement 1701 it has had to go to a Protestant. There has been a religious discrimination as well as discrimination on the grounds of sex. My new clause seeks to amend that to allow for anybody of any faith to succeed to the Crown while making provision for the established Church.

Many countries in the world have a Crown that is only temporal; they do not have a Crown that is spiritual as well. The mediaevalists debated at great length where power should rest in those two spheres, and I do not wish to rehearse the schoolmen’s arguments. There are, however, two distinct and separate powers and authorities: the temporal one that deals with the laws we live by and how we should lead our lives in respect of society; and the spiritual one that looks to the higher plane and the greater authority that comes with religious belief and religious conviction.

In our country, those two powers are merged in the Crown. The Crown is both the spiritual head of the Church and the temporal head of the nation for one part—and one part only—of the Crown. On Tuesday last week, on Second Reading and indeed in Committee, we debated whether that was right and how it applied in a more modern age. It is worth looking, as we did last week, at some of the detail. Because the Queen is Supreme Governor of the Church of England, she is or has under her an established Church in Scotland, but she is not formally head of it. She puts in a Lord High Commissioner to represent her at meetings of the General Assembly of the Church of Scotland, but she is not the Supreme Governor of the established Church in Scotland in the way she is Supreme Governor of the Church of England. There is no established Church in Wales; there is no established Church in Northern Ireland. As far as I am aware, there is no established Church in Antigua and Barbuda, in Australia, the Bahamas, Barbados, Belize, Canada, Grenada, Jamaica, New Zealand, Papua New Guinea, St Christopher-Nevis, St Lucia, St Vincent and the Grenadines, the Solomon islands, Tuvalu or in Her Majesty’s other realms and territories. When we deal with one discrimination but not the other, therefore, we leave a discrimination that applies only to a very small part of the totality of the Crown.

[Michael Ellis (Northampton North) (Con)]

Does my hon. Friend agree that a discrimination is inherent, and has been since time immemorial, in relation to the eldest? My hon. Friend refers to a discrimination in relation to the Protestant faith, but is there not also an in-built discrimination against younger male heirs?

[Jacob Rees-Mogg]

Had my hon. Friend not been meeting His Royal Highness the Prince of Wales last Tuesday, he would have heard the debate on an amendment that I tabled to clarify this matter, because the current Bill, rather than maintaining any system of primogeniture, might simply create co-heirs. Of course, the concept of monarchy has an unfairness in it—the very word “monarchy” means that one will rule; it cannot be everybody in the country. However, the reasons for having discrimination on the grounds of faith—in 1688, formalised in the Act of Settlement in 1701—are very different from those that apply today.

Likewise, if you think back to Richard the Lionheart, Mr Speaker, as I am sure you often do, with his fine statue outside the House of Lords, you will acknowledge that it had been necessary since time immemorial to have a king who was able to fight, lead armies in battle and show his great strength, and that was easier for a male than for a female. The last king to lead troops into battle was George II.

Historically, therefore, there may have been reasons for having a religious discrimination, a discrimination on the grounds of sex, and the obvious discrimination within a monarchy of it being rule by one. As the discrimination on the grounds of sex is no longer necessary, or can no longer be argued for logically, nor can exclusions on the grounds of religion.

The reason for the religious bar in the late 17th and early 18th century was the genuine threat perceived by this country from the strong Catholic nations in Europe. In the reign of Elizabeth I, of course, the Spanish had been the threat, but by the reign of Queen Anne, the French were the greater concern. Through the secret treaty of Dover, Louis XIV tried to get Charles II to take a subsidy to establish a standing army that would enforce Catholicism on the nation as part of Louis XIV’s aim to get general European rule. You might be worried, Mr Speaker, about general European rule, but it is not in support of Catholicism.

[Mr Edward Leigh (Gainsborough) (Con)]

I warn my hon. Friend against accepting all the arguments of the Whig supremacy.

[Jacob Rees-Mogg]

I am grateful to my hon. Friend for that point, although it is worth bearing in mind that the House was controlled by Tories at the point at which the Act of Settlement was passed, so I am looking to revise a Tory piece of legislation.

The fundamental point is that the reason for the provision on religious discrimination no longer exists in the way that it did in the late 17th and early 18th century.

[Michael Ellis]

I am rather surprised to hear my hon. Friend’s comments, because although I had to be absent from the Chamber during the debate last week, I think I read in the parliamentary record that he had no objection to being called a Papist, despite the antiquity of that term, because he understood that it represented part of this country’s history. Does he depart from that now in saying that the historical aspect of the Protestant ascendancy in this country is not relevant today?

17:00

[Jacob Rees-Mogg]

I am grateful to my hon. Friend for his intervention, which made him sound even more antiquarian than I am. I do not think that I have ever heard anyone argue for the Protestant ascendancy in the House, and as far as I know it has not been argued for here since 1829, although conceivably some may have argued for it since then. It is absolutely right to say that there are historic aspects of the construction of our constitution that it would be better for us not to change.

[Jim McGovern (Dundee West) (Lab)]

Can the hon. Gentleman nail an argument that continues in Scotland day after day, week after week and year after year? Is the Prime Minister of this country allowed to be a Catholic?

[Jacob Rees-Mogg]

Yes. The Catholic Emancipation Act 1829 makes it clear that the Prime Minister is entitled to be a Catholic. The last office to be specifically excluded was that of Lord Chancellor, but, as far as I am aware, the provision was amended in the late 1970s. The one thing that a Catholic Prime Minister cannot do is make or advise on appointments in the Church of England. That is specifically listed as a felony.

The point is that times have changed, and the Bill has come forward. If there were to be no change in our plans for the succession, I would not be the one charging the barricades and saying that we ought to be changing them, but the Government have proposed this change, which they wish to limit to a very narrow sphere. They wish to limit it to making primogeniture equal among males and females, and to allowing marriage to Catholics, without considering the grating unfairness that currently exists in our laws of succession in an age of much greater toleration, and in an age in which so many of the areas in which the Queen is sovereign do not have an established Church.

[Dan Byles (North Warwickshire) (Con)]

I always listen with great interest and enjoyment to my hon. Friend’s speeches on these matters, because he is so knowledgeable. Does he foresee a time when an heir to the throne could take his case to the European Court of Human Rights because he was not permitted to belong to the religion to which he wished to belong?

[Jacob Rees-Mogg]

I thank my hon. Friend for raising that point. I also think that the law should represent the reality. It is inconceivable that if a sovereign of Canada—including, obviously, Quebec—decided to convert to Roman Catholicism, that sovereign would be deposed, thrown out and replaced. I think that even in this country and even with an established Church, we cannot accept the idea that a sovereign on the throne who decided to convert to Rome would be suddenly chucked out of Buckingham palace. When the law has moved away from the reality, and we are amending the law in any event, perhaps it makes sense to carry out a comprehensive reform of the law to make the two match up.

[Michael Ellis]

Is not my hon. Friend’s point further strengthened by the fact that those of other faiths, such as mine—the Jewish faith—are not excluded in the same way?

[Jacob Rees-Mogg]

There is a part of the Act of Settlement that requires the sovereign to be in communion with the Church of England, so I am not absolutely certain that my hon. Friend is correct, but my new clause would get rid of the bar for all religions. This is not simply a Catholic issue. I have concentrated more on the Catholic issue because that was the reasoning behind the Act of Settlement and the reason for its becoming part of our law, and also because clause 2 of the Bill deals with marriage to Catholics. Marriage to Catholics is a specific Catholic exclusion, but communion with the Church of England is the requirement when it comes to inheriting the throne.

Let me explain why I support an established Church. My new clause provides for the maintaining of a Protestant head of the Church of England. That is partly to do with our history and traditions, which we see even on the Mace. It has a cross on its top as a symbol of the shared Christianity that this country has had since its very foundations as a nation, going all the way back to St Augustine coming and converting England and the ultimate joining together of the Crowns. Christianity has run through our history.

[Dan Rogerson (North Cornwall) (LD)]

The hon. Gentleman is going through the history, so may I point out that some of us represent parts of the country that were Christian even before St Augustine came to convert the Anglo-Saxons?

[Jacob Rees-Mogg]

I am very grateful to the hon. Gentleman for making that point, because it allows me to remind the House that Joseph of Arimathea is thought to have taken our Lord to visit Somerset when he was a young man. Some people maintain that that is mere legend blurring into myth, but I am quite convinced of its veracity.

I think that an established Church is good for the body politic—it is good for us that we can have jubilee celebrations held in St Paul’s cathedral or Westminster abbey, and that we can have that focus of national life through an established Church—but obviously an established Church cannot have as its head somebody who belongs to another Church. That would be logically inconsistent. It would be unfair on the Church of England; it would mean that bishops and archbishops appointed within the Church of England were appointed by somebody who did not share their beliefs and that could not be the right thing to do.

[Bob Stewart (Beckenham) (Con)]

Could we consider having as Supreme Governor of the Church of England the Archbishop of Canterbury, thus taking this away from the sovereign?

[Jacob Rees-Mogg]

My hon. Friend makes a very good point, and that might have been an amendment worthy of consideration. It is not the amendment I tabled. My amendment sought to maintain the supreme governorship of the Church of England in a regency whenever the sovereign was not in communion with the Anglican Church under the Regency Act 1937, which requires the regent to be a Protestant and to meet the terms of the Act of Settlement. I would prefer to keep things that way because the Crown and the headship of the Church of England could come back together when a future sovereign was an Anglican, and my approach would not permanently separate the two. However, I am grateful to my hon. Friend for bringing forward new thoughts on the matter; one of the reasons why it would have been better to have had a longer time for, and longer gaps in, debating this important subject is because then such ideas could have been discussed.

My new clause is extremely simple. It is a recognition—no matter how much I am sometimes reluctant to recognise it—that the modern world is different from the early 18th century. There may have been many glories in the early 18th century, but one of the glories of this modern age is that we are tolerant—we are tolerant of different religions. We believe that people practising other faiths is something to be welcomed and encouraged, and that has made us a stronger nation rather than a weaker one. Therefore there should no longer be a bar on the grounds of faith in respect of the sovereign, as long as we can make provision for the established Church of England, which there is and which I support.

That circle can be squared by providing for a regency. That relatively simple and straightforward proposal deals with a problem that people have recognised in this country for many decades; we have not suddenly woken up and realised that a non-member of the Church of England cannot become sovereign. Bills have been presented to Parliament to deal with that, and this seems the right time to be doing it, as we are legislating on the Crown succession and we are in discussion with the Commonwealth members who also have the Queen as sovereign to see whether they will agree to it.

[Michael Ellis]

Is it not the case that his holiness the Pope, who wears the triple crown, is also a temporal sovereign? Would it not be a requirement of that office that he be of the Catholic faith? Does that situation have any similarity with the point that my hon. Friend is making?

[Jacob Rees-Mogg]

Much though I admire his late Holiness Pope Pius IX, he was the last Pope to exercise effective temporal power. His Prime Minister was assassinated in Rome, and from that point on, the Papacy’s temporal power in Italy has been restricted to the vicinity of the Holy See—that very small amount of land. Suggesting that we should open up the Holy See to non-Catholics when there are only about 2,000 residents, almost all of whom are in holy orders, is faintly although engagingly absurd.

[Michael Ellis]

It is a point of principle.

[Jacob Rees-Mogg]

The principle is different, although it is worth noting that the only two anointed sovereigns in Christendom are the Pope and the Queen, which says something about their antiquity.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

I always listen to my hon. Friend with great admiration on these and all other matters, as I did his father, but on his interesting suggestions on a regency, and in connection with the fact that Her Majesty is one of the two rulers who are anointed, how does his regency proposal deal with the problem of the coronation oath, in which the sovereign very specifically must declare that she will support a Protestant Church as the Church of England?

[Jacob Rees-Mogg]

We are legislating now for the succession of the Crown; the coronation oath is legislated for as well. We could legislate to take account of that in such a way that the sovereign would not be able to obstruct the Protestant faith, and would therefore be obliged to give the supreme governorship of the Church of England to a regent. That is a way to get around the problem of the unfairness and lack of tolerance in an age that is tolerant, and yet protect the interests of the Church of England. I am reluctant ever to disagree with my right hon. Friend, who is the wisest Member of the House, and not just by virtue of being the Father of the House. History usually says he is right—he has been right on so many issues in the past 50 years—so it is with considerable reluctance that I disagree with him, but I think the problem he mentions could be solved.

New clause 1 would be a simple, easy change that would provide for the Church of England and deal with other areas of the world where the Queen is sovereign. It would not perpetuate an unfairness and deals with reality.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

May I ask the hon. Gentleman about what seems to be at least a technical defect in the new clause? If the sovereign decides not to declare to the Privy Council that he or she is a Catholic, the procedure for ensuring that there is a Protestant supreme governor of the Church of England is not activated or brought into force.

[Jacob Rees-Mogg]

That is a fantastically late 17th century point. The language of coronation oaths of the late 17th century shows that people are obsessed by Jesuit dissemblers and believe that a sovereign who wants to get around the oath will come to the throne—he could have his fingers crossed behind his back or, even worse, a dispensation from the Pope saying that he is allowed to say that he is a good, honest Protestant when he is not. A sovereign is not likely to behave in that type of Jesuitical dissembling way. Our sovereigns tend to be good, upright and honest sovereigns rather than sovereigns who deceive us as to their religion. That is likely to remain the case.

I have dealt with new clause 1, and should like briefly to deal with amendments 1 and 2, which I tabled. The amendments are in honour of Henry IV of Navarre—not our Henry IV but the French Henry IV. He is supposed to have said—historians argue over this, as they argue over anything—that Paris is worth a mass. On Second Reading, my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), and the hon. Members for Rhondda (Chris Bryant) and for Cardiff West (Kevin Brennan), among others, discussed when somebody was deemed to be in communion with Rome for the purposes of the Act of Settlement and whether somebody would be excluded if they said, on becoming sovereign, “No, I’m not a Catholic,” when they had been christened or taken first communion as a Catholic.

Amendment 1 would make it clear that such a person would not be excluded at that point. It is separate from new clause 1 and has a different effect, but the clarification depends on allowing marriage to a Catholic. That is to say, as I said last week, that the canon law of the Catholic Church requires a party to a mixed marriage to use his or her best efforts to bring up a child of that marriage in the Catholic religion. If a party to a mixed marriage with an heir to the throne followed his or her Catholic requirement, the child would be excluded under a straight reading of the Act of Settlement, which I do not think is the intention of the Bill.

17:15

[Dan Rogerson]

The hon. Gentleman is seeking to address an interesting point through his amendments. However, would it not be fair to say that the Catholic spouse of an heir to the throne might feel that, with the full might of the British establishment against them, they had made every endeavour and been unsuccessful?

[Jacob Rees-Mogg]

That is perfectly possible, but at what point would we know that that was the case? It seems to me that it is very important that we know who our sovereign is. We do not want to go through the courts to try to establish whether the child was brought up as a Catholic and was therefore in communion with Rome and excluded under the provisions of the Act of Settlement.

My amendments do not seek to change the requirement for the sovereign to be in communion with the Church of England. They are separate from the new clause, but simply state that a child brought up as a Catholic would not be deemed

“for ever incapable of succeeding to the Crown”,

which is the language used in the Act of Settlement about Catholics succeeding to the Crown. The question of eligibility could be clarified at the point of succession.

[Sir Alan Beith]

Does not the hon. Gentleman’s amendment address a situation that has arisen in other Protestant monarchies of northern Europe in which someone who had been brought up a Catholic decided to convert to being a Protestant when joining the royal family? Does it not look as if the wording of the Act of Settlement makes a once-and-for-all decision as soon as any kind of commitment is registered and should we not be clear that someone is free to make a choice at a later stage in their life?

[Jacob Rees-Mogg]

I am in complete agreement with my right hon. Friend. The Act of Settlement deems somebody who has been a Catholic for a minute to be dead in terms of the succession, and it passes over them as if they were dead. Once we allow the marriage of a Catholic into the line of succession to the throne, that provision makes absolutely no sense. We could be arguing that at the point of a Catholic baptism, the child was a Catholic even though it had given no personal agreement to its religion and should be disbarred from the throne.

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

What does the hon. Gentleman have to say about confirmation?

[Jacob Rees-Mogg]

The hon. Gentleman is right that a child who decided to be confirmed as a Catholic would be excluded, but it is perfectly possible, not least because our Churches are coming closer together, for somebody to be confirmed a Catholic at the age of 12 or 13 but to decide on finding at the age of 23 that the throne was about to be offered to him that he might prefer to be an Anglican. We need to be clear about when people are excluded, so that if an heir to the throne decided that the religious bar meant that becoming King of England was worth changing religion for, the result would be clear and decisive. We do not want the monarchy to pass from one generation to the next only for us to have to go to court to work out who our sovereign will be based on the wording of a 1701 Act of Parliament.

[Sir Alan Beith]

The hon. Gentleman posits a situation in which someone gives up his Catholic faith for the Crown, but he must surely be aware that in mixed marriages it is not at all uncommon for children to experience aspects of both denominations and, at some point in their life, to make a choice that might debar them from the throne.

[Jacob Rees-Mogg]

Once again, I am in entire agreement with my right hon. Friend. It is important that the decision is made at the point of succession so that that flexibility is allowed. In ordinary family life in some mixed marriages, couples go to an Anglican service one week and a Catholic service the next.

[John McDonnell (Hayes and Harlington) (Lab)]

I do not say this with any personal interest, but where does someone who has been excommunicated stand in all this?

[Jacob Rees-Mogg]

I am afraid to say to the hon. Gentleman, who I hope is not in that unhappy state, that an excommunicated Catholic would be excluded from succession to the Crown because that person would have been in communion with Rome at some point. It is an absolute. If at any moment in their whole life they were in communion with Rome, they are excluded from the throne, deemed to be dead. That cannot be the intention of the clause that allows a Catholic to marry an heir to the throne. That will simply create confusion and we will not know who the monarch is going to be.

[Michael Ellis]

I think that, in canon law, it may be canon 1125 which refers to best endeavours. Is it not the case that he who brings up a child in the Catholic faith or attempts to do so by using best endeavours is defeated in those endeavours if it be a legal impossibility? So the issue as to the connection of that infant child to the Crown and the Catholicism or otherwise of that infant child is dealt with in that way. Best endeavours cannot be achieved if it is a legal impossibility.

[Jacob Rees-Mogg]

I am sorry to say that my hon. Friend misses the point. It is a question of the succession. It may be that somebody has been brought up as a Catholic who is relatively remote from succeeding to the Crown, but in a “Kind Hearts and Coronets” way suddenly becomes much closer. That person would be excluded, but more importantly, the best efforts issue means that there is a lack of clarity as to whether or not such a child has been excluded.

Are we saying that a Catholic can marry into the Crown but must then immediately say, on the birth of any child, that this child has not been anywhere near a Catholic church? How are we classifying this connection with Rome that in the Act of Settlement is a very broad connection for a very good reason: at that point people were worried about the Old Pretender. They thought that his Catholic upbringing made him a threat from the moment of his birth. That is why it is all-encompassing, and we are now amending the law to allow a Catholic to marry into the throne, without dealing with the technicalities that follow from that.

[Paul Flynn (Newport West) (Lab)]

Does the hon. Gentleman agree that the most important role of the Head of State is to act in the interests of the country when a Prime Minister acts in her or his own interest? Looking back at monarchs, the Queen has behaved immaculately throughout her reign. There have been grave doubts about some of her predecessors and doubts about her possible successors. Is it not much more important that we choose the character of the monarch, rather than the religion?

[Jacob Rees-Mogg]

I think the monarchy should be an hereditary monarchy and should go through the nearest line that is available. I do not think there should be a character test for the monarch. The great and weighty responsibilities of monarchs turn people into serious-minded individuals capable of that great honour who sometimes in their youth were not capable of it. One thinks immediately of Henry V and also of Edward VII, both men who, in their youth, were relatively irresponsible, but when that great honour of being King of England fell upon their shoulders, they rose to it magnificently—gloriously, regardless of their religion.

All I am trying to do is make sure that in future we know that the monarchy is safe and secure and to whom it has passed—that we do not open it up for the courts to say, “Well, this person once went to a Catholic church. This person had a Catholic baptism. Therefore let us go to my neighbour, my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), who is 190th or some such in line to the throne, and who, having been perfectly Protestant all his life, might be very suitable.”

We need to be clear because so many functions of this nation would be thrown into doubt if there were no Crown. If we are risking people being ineligible for the Crown because of shoddy legislation, we then face the prospect of being unable to use the prerogative powers, which might make it quite difficult to open Parliament.

[John McDonnell]

I attached my name to these amendments because they reflect an amendment I tabled for last week’s debate that was not selected. I wish to explain why I did that, for the record and for some of my constituents and other supporters who might find it a bit bizarre.

Apart from my hon. Friend the Member for Newport West (Paul Flynn), those who have participated in the debate so far have had an interest either as monarchists or, in the context of the amendment, as Catholics. I am not a monarchist—I am a republican; I see the monarchy as a complete anachronism—and I am, at best, a lapsed Catholic, as the parish priest optimistically describes me.

Over the past 10 or 15 years, I have sat in this Chamber on a number of occasions when successive Members have tried to remove anti-Catholic discrimination from our legislation. Dr Evan Harris and John Gummer did that when they were Members of this House. The simple reason, they argued—I fully agree—is that we in this House should not allow our institutions and our legislation to be founded on or framed by discrimination. This measure is the last remnant of anti-Catholic discrimination that sits within our laws. Frankly, it is offensive to discriminate on religious grounds, and every Government in recent years has said so. We have legislated time and again to remove such discrimination, so why can we not do it in this case?

The hon. Member for North East Somerset (Jacob Rees-Mogg) went through a trajectory of 300 years in the space of one speech; it has a been a major breakthrough to bring him into the 21st century. As he argued very eloquently, on whatever grounds this discrimination was introduced centuries ago, it is no longer relevant, and I am convinced that at some point it will be challengeable in other forums and courts. This is an ideal opportunity to say to the outside world that we will not tolerate discrimination of any sort. It is anti-Catholic discrimination that has historically been present in this kind of legislation, but such discrimination pertains to every other religion as well. We have heard potential successors to the Crown say that they are happy to be seen not as defenders of the faith but defenders of faith; if that is the case, so be it. We have an opportunity to send out a message that we are opposed to all discrimination, that we accept that the institutions we establish should not be founded on discriminatory legislation, and that we will remove this stain from the character of this House and our constitution.

John Gummer and Dr Evan Harris argued their cases extremely eloquently, more so than I can. When I left the Chamber after those debates, I thought, “If I were a member of a particular religion and that barred me from a particular office, I would find it offensive.” We might think that this debate is about something that is necessarily insubstantial in the everyday workings of our society and our lives, but it is not; it is about a symbol of past discrimination that must be removed. By removing that stain, we can go forward into a modern society

[Martin Horwood (Cheltenham) (LD)]

The amendment is framed in anti-disestablishmentarianistic language, in that it creates a rather exotic formula, but is not the inevitable consequence of debating this matter that it will lead us towards a debate on establishment and the role of the Church of England as the state Church, the role of the Supreme Head of the Church of England, and the title of Defender of the Faith, which was awarded to Henry VIII during the time of his communion with Rome?

[John McDonnell]

I agree that this will lead to that debate, but I am happy to take these reforms one step at a time. That is why the amendment tabled by the hon. Member for North East Somerset is extremely clever, because it would enable those who wish to maintain the established Church and not to move towards the disestablishment debate to pause at this stage.

I think it is inevitable that that debate will come back, but it is not for today. Today is about removing the way in which we discriminate against those who are not members of, or in communion with, the Church of England. This is a way of removing the ostracism of the past. It is time to send out a message that this is a modern, multicultural society, with people of all faiths and of no faith, and that no one should be discriminated against at any level of society, from the monarchy right through to every other institution. Let us seize this opportunity.

17:30

[Michael Ellis]

I very much agree with the hon. Gentleman about the obnoxious nature of any legislation, however ancient it may be, that is prejudicial to any religion. Those of my faith and many others are also excluded in the same way, because of that legislation. Why does he think that, whereas other examples of bias towards or prejudice against other religions have been done away with centuries ago, in many cases, or certainly many decades ago, this one remains? Does he think it might be due to the internecine complexity of the issue, rather than any prejudice?

[John McDonnell]

That may well have been the case in the past, but I think we have moved on. When the issue was debated in a different form—I think it was on a private Member’s Bill promoted by Evan Harris—Lord Falconer did the maths, calculated the large number of descendants that could have a claim to the throne and argued that we did not have parliamentary time and that the issue was irrelevant anyway. If we change the proposal on marriage, however, it may soon become very relevant, because we would not want to bar a future monarch from marrying a Catholic, a Jew or a Muslim. I think that that will come on to the agenda very quickly, whereas in the past parliamentary time was not found for it because it was not seen to be relevant.

[Paul Flynn]

Does my hon. Friend agree, having been present at previous debates, that the objection to breaking the taboo about the royal succession comes from those who say that once we get rid of this particular indefensible idiocy, the other foolishness involved in the royal succession will be exposed and people will come up with suggestions to reform the whole system so that we can have a monarchy or Head or State who are electable?

[John McDonnell]

I assure the House that supporting the amendment is not my cunning plan to get rid of the monarchy overnight. However, I agree with my hon. Friend that there will be a debate as we move through this century about all our institutions, including the monarchy. That is why I was disappointed that his amendments were not selected, because I think we should have had a debate about alternative forms of Heads of State and the ways in which we can select them, rather than let the position be gained as a result of hereditary entitlement.

I will leave my argument there. I needed to put on the record why I put my name to the proposed new clause and why I tabled a similar amendment. It is about ending discrimination. On Saturday, I attended the annual dinner for pensioners organised by Botwell Catholic church St Vincent de Paul Society. When I told them about the two things that we were legislating on this week, the women cheered for ending gender discrimination, but everyone cheered for ending discrimination against Catholics. I say to hon. Members that this is not an historic thing—it is relevant. If someone in this country is born Catholic or into any other religion, or if they have no faith, and they are still discriminated against, that is unacceptable, as successive Governments and Members of this House have said. Now is the opportunity to legislate on it.

[Mr Leigh]

I start by echoing what the hon. Member for Hayes and Harlington (John McDonnell) said. He has put the case simply: in this day and age, when it comes to a person’s suitability to become the Head of State, they should not be discriminated against because of their religion. That is why I was happy to put my name to the new clause, moved so ably by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), and to his amendments.

I have been campaigning for years against barring Catholics from either marrying into the royal family or succeeding to the throne, particularly the first issue, which is bizarre. Indeed, I have introduced a ten-minute rule Bill and tabled early-day motions on the subject. We were constantly told that it was all too difficult and complicated to change, and that we would have to change hundreds of lines of legislation in hundreds of Acts of Parliament. But, hey presto! It is now being done. Although the Deputy Prime Minister gets a lot of stick in this House—including from Government Members —and in the media, I am on the record as warmly congratulating him on being the first leading member of this or any Government to get a grip on this issue and to try to solve it.

However, there is one final logical absurdity, which my hon. Friend is trying to address. I repeat this point because it is worth making: in this day and age, a person should not be barred from a position such as Head of State just because of their religion or lack of religion. There are many people in this House who have no religion and who do not wish to come to Prayers or who do so just to reserve their place. They are just as worth while as Members. There is no reason why we have to keep this bar in place.

I am a traditionalist, like my hon. Friend. Even if the new clause were accepted by the Government, it is extremely unlikely that it would be activated in our lifetimes, or indeed ever. As far as I know, there is no likelihood of Prince Charles or Prince William becoming a Catholic. It is therefore somewhat academic, but just because an amendment is academic does not mean that it is not worth debating and acting on if it is the logical and right thing to do. It is unlikely to be activated not just because of the nature of the likely successors to the throne, but because a person who is brought up as a member of the royal family is surely extremely unlikely to want to bar themselves from the throne or put their chances of succeeding to the throne at risk.

[Bob Stewart]

It may be much more likely that the heir to the throne would become an atheist. The problem would have to be addressed in those circumstances.

[Mr Leigh]

Indeed, it might happen that somebody becomes an atheist or an agnostic, or does not want to be a member of the Anglican faith. By the way, I have enormous sympathy, respect and, indeed, love for the Anglican faith, which is inherent in the traditions of our country. However, it is perfectly possible that in some future generation, somebody will not want to be part of it for quite profound reasons of personal conscience. That is why this matter is important. It is not just an academic, legalistic debating point; it is a matter of deep personal conscience. What is more important to an individual than their faith or lack of faith? It is somewhat strange in the modern age to say to somebody that if they want to become the head of this particular state, that job goes with being a member of a particular Christian denomination. It does not fit in with what we do in many other areas of our national life.

[Jacob Rees-Mogg]

I agree with my hon. Friend’s sentiments about the glories of the Anglican Church. The new clause should not, in any way, be seen as an attack on the Anglican Church. Indeed, it contains specific protections for the Church.

[Mr Leigh]

I, too, want to be absolutely clear about that. As I am speaking, people’s minds might be ticking over thinking, “Oh, here’s just another Catholic pushing his own religion.” This is not about my belief at all. I am very ecumenical. I am a member of Lincoln cathedral council. I think that the Anglican liturgy is wonderful in every single respect. My hon. Friend and I are traditionalists. In no way are we attacking the Anglican Church or, most importantly, the fact of this country having an established religion. That is important.

One of the single most dangerous aspects of modern life—the hon. Member for Hayes and Harlington (John McDonnell) will no longer follow my argument; indeed, he will strongly disagree with me—is the advance of secularism and the fact that religion is retreating from more and more aspects of national life. Even “The Sunday Half Hour” on Radio 2 on Sunday nights has been banished to 6.30 in the morning. Maintaining the established Church as a symbol—only a symbol—is terribly important, as is what my hon. Friend is doing today. He is trying to square the circle, to be absolutely fair and say that as a modern nation we should respect people’s conscience to maintain their own religion—or lack of it—and succeed to the headship of state. He is also trying to protect the established Church, and although other solutions might have been offered, including the one proposed earlier that the Archbishop of Canterbury could become the Supreme Governor of the Church of England, the idea of a regency is good and squares the circle.

However, such a situation is extremely unlikely because, as I said, I am sure that anybody brought up in that environment would want to remain in the Anglican Church. I understand that James III of blessed memory, the Old Pretender, whose portrait, as you know Mr Deputy Speaker, hangs in Stonyhurst college in your constituency, was offered the throne on the condition that he renounced his faith. He refused to do that although he could have succeeded Queen Anne. In fact, I understand that about 50 people had a superior hereditary claim to George I, but they were all bypassed because, as my hon. Friend has made clear, there was in those days an absolute obsession about ensuring an Anglican Head of State.

We do not want to get too enmeshed in those arguments, but to be trapped at the beginning of the 21st century in arguments that raged at the beginning of the 18th century is frankly absurd. To remain trapped in the Act of Settlement, when there is absolutely no risk in a secular, modern, multicultural and multiracial nation of some sort of Catholic plot to take it over, is ridiculous.

[John McDonnell]

May I take the hon. Gentleman back to his earlier statement in which he was convinced that a person brought up in an Anglican environment will naturally become an Anglican? At some stage we will get to a situation where an Anglican Head of State says, “I don’t believe any more.” Are we asking them to abdicate?

[Mr Leigh]

Well, the Anglican Church is a very relaxed Church, and many Anglican bishops have fairly broad views about the existence of God. The hon. Gentleman’s point is apposite.

[Chris Bryant (Rhondda) (Lab)]

I delight in the relaxed nature of the Anglican communion. I am slightly worried, however, because the hon. Gentleman says there is not a Catholic plot yet he asserts there was a James III. If there had indeed been James III, there would not be Elizabeth II.

[Mr Leigh]

It was a joke. I am very loyal to the Saxe- Coburg and Windsor line and a great supporter of the Queen. As it happens, even if I wanted to be a Jacobite it would be difficult because they have all died out. The last one became a cardinal—[Interruption.] May I proclaim my loyalty to the Crown, Mr Deputy Speaker?

[Dan Rogerson]

I take it that the hon. Gentleman has not been on the telephone earlier today to the Duke of Bavaria to pledge his support in the future—

[Mr Leigh]

No, I am not a supporter of the Duke of Bavaria.

[Michael Ellis]

My hon. Friend mentioned the Archbishop of Canterbury potentially taking over the position of Supreme Governor of the Church of England, but would that not be rather incongruous? The Archbishop of Canterbury, at least in theory, is appointed by the sovereign. The sovereign would therefore be appointing an archbishop who would then take over their role, as far as the primacy of the Church is concerned.

[Mr Leigh]

This was an idea proffered by my hon. Friend the Member for Beckenham (Bob Stewart), and perhaps it was a mistake for me even to mention it. We are now in danger of dancing on the head of a pin and getting into a level of complexity that is not helping the argument.

17:45

The simple truth on which we should focus, as a modern Parliament, is that people should not be disbarred from a job—especially one in which they would represent all people, such as Head of State—just because of their religion or lack of it. The current bar is not even logical in its own terms. As my hon. Friend the Member for North East Somerset has made clear, it does not apply to Scotland, where the Queen is not the head of the Church, and it would not apply to countries like Australia and Canada. So even in its own terms, what the Government are trying to do is illogical. We all know that they are trying to do it to preserve the established Church, because—like me—they believe it to be important. But it is perfectly possible both to respect people’s conscience and to maintain the established Church and this figurehead post—and it is only a figurehead post. Henry VIII and Queen Elizabeth I invented it as a post of real power and authority, but nobody actually suggests that in reality the queen or king in a modern country tries to interfere with the established Church, although they may sign off the appointment of bishops. Unlike Mary Tudor, Henry VIII or Elizabeth I—or even Charles I—a modern queen or king does not try to ensure that their own people are made bishops, or determine whether the Church is high church or low church. It is absurd. Supreme Governor is only an honorific post, and it is not therefore necessary that the king or queen is Supreme Governor. I do not want to get rid of the post—it is deep within our traditions and there is nothing wrong with it—and my hon. Friend’s proposal gets around the problem.

[Sir Alan Beith]

I am surprised that the hon. Gentleman suggests that the Queen has no relationship with the Church of Scotland, when in fact she appoints the Lord High Commissioner to the General Assembly, and it is the Church that she has consistently and regularly attended in Scotland throughout her life.

[Mr Leigh]

If I made a bad or weak point, I willingly withdraw it and accept my right hon. Friend’s superior knowledge.

Amendment 1 makes an important point. It is almost as important as the one that my hon. Friend the Member for North East Somerset made. If the legislation stays as it is, we will return to the world of the Act of Settlement, in which people were incredibly suspicious of some kind of papist plot. If someone had been tarnished in any way at any time in their life with Catholicism, they were excluded from the throne. As it happens, my eldest son is 640th in line to the throne, because he is descended from the Electress Sophia through his mother. He is not excluded from the throne as he was baptised as Russian Orthodox, although he has been raised a Catholic. So in our family we have found a way around the bar, but if the Bill stays as it is, we will return to a ridiculous, bizarre and absurd situation in which someone must never, at any point in their life, have taken communion in a Catholic church. As my hon. Friend pointed out, there are many mixed marriages and we go to each other’s churches regularly. Even those who oppose new clause 1 must accept that the logical and right thing to do is for the person to be able to make an election at the time they become Head of State.

[Chris Bryant]

I am sorry to be pedantic, but the hon. Gentleman has made the same mistake several times in this debate and in previous debates. There is no such thing as Russian Orthodox baptism. There is Christian baptism, end of story. All Churches accept one another’s baptisms. The one difference between the Roman Catholic Church and the Russian Orthodox Church—and perhaps as a Roman Catholic he could persuade senior people in his Church to change their position—is that the Catholic Church believes that Anglican orders are null and void.

[Mr Leigh]

Mr Deputy Speaker, I think you will rule me out of order if I get into the intricacies of baptism, and which baptism is recognised by which church. In fact, the Catholic Church does recognise Russian Orthodox baptisms and considers itself in communion with the Russian Orthodox Church. The problem lies not with the Catholic Church, but with the Russian Orthodox Church, which does not want Catholics to take communion in its churches.

We are in danger of becoming enmeshed in the kind of arguments that enveloped us at the end of the 17th century and the beginning of the 18th century. All my hon. Friend is trying to say in these very simple amendments is that, even if one supports the legislation as it is currently drafted, surely one should have the right to be judged on one’s faith at the time that one becomes Head of State or wants to become Head of State, and not be judged on what baptism one has received, what churches one attended in the past or what communion one has taken. Amendment 1, therefore, is even more important and apposite than new clause 1.

I will end on this point. As unlikely as it is in the near future that anybody will be banned from the throne of England because of their faith, I hope that we in this House do not accept the current situation when we have a once-in-a-lifetime opportunity to change the law. We have been told so often that this is so complex and difficult to do that it may be the only chance in a generation. Is today not our chance in our time to stand up for religious freedom once and for all, and to say that all the disputes and hatreds of the past are now finished and that no office, however great, will be barred to someone because of their faith?

[Paul Flynn]

It is a great pleasure to speak in this debate, and wonderful to support the amendments tabled by the hon. Member for North East Somerset (Jacob Rees-Mogg), who does his job so well as the Member of Parliament for the middle ages. It feels as though he is not just making history, but part of history.

It is extraordinary that a Bill presented as a reform or great change would actually put into law the concept of arranged marriages. We are very sniffy about them when we consider other religions and other parts of the world where one member of a family has absolute power in arranging the marriages of relatives, but that is what we are doing in this great reforming Bill. I do not know where the idea comes from that one person should be allowed to dictate the marital choices of six of her—later his—relatives. Is this a Liberal Democrat Bill? Is this the cutting edge of the future reforming zeal of the Liberal Democrat party: to espouse the concept of arranged marriages? This is the modern world.

In another part of the Bill acting as a reform, we are denying the opportunity to 87% of our population of ever achieving the job of Head of State. We are excluding and discriminating against atheists, non-conformists, Catholics, Jews and Muslims, who can never be Head of State: that is what we are being asked to approve today. It is perhaps not the reform we were looking forward to.

The traditions of the Church have been referred to. I find little difference between the high Church of England and Roman Catholicism, particularly now that Roman Catholicism has, lamentably, dropped the Latin language, which was a great joy to my youth:

“Introibo ad altare Dei, ad Deum qui laetificat juventutem meam.”

When I was in my “juventutem”, it was a matter of some pleasure—a joy, an education and a great richness—but it has gone now. What on earth is the difference that we are talking about?

I hope to speak briefly, because I think there may be some puzzlement among my constituents—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Gentleman says that he will speak briefly. Will he, for the rest of his speech, speak in English so that we can all understand it? Clearly, we have not all been educated to the high level of Paul Flynn.

[Paul Flynn]

I am very happy to speak in Middle English:

“Whan that Aprille with his shoures soote

The droghte of Marche hath perced to the roote”.

Middle English would be appropriate for the age in which some of the Government Members—

[Mr Deputy Speaker]

The hon. Gentleman is giving away his age. If he could please keep to common English. Thank you.

[Paul Flynn]

It is interesting that we have got on to linguistic discrimination. I could stay within the rules of the House and speak in Middle English, which very few, if any, people in the House speak, but I am denied the opportunity to speak in the language of Wales, which has the same authority and respect in this House as spitting on the carpet, where it is ruled as “unruly behaviour”. However, I will move on.

What is important in a Head of State? It is character, not religion. I am not allowed to be offensive to members of the royal family, because we are bound by rules that were created in the 13th century. I can do it outside this place, but not in Parliament—part of the infantilism of Parliament.

[Chris Bryant]

My hon. Friend is completely wrong. In the 13th century, 14th century, 15th century, 16th century and 17th century, Members of the House of Commons were regularly very rude about members of the royal family. The idea that we cannot be rude about members of the royal family comes from the 19th century.

[Paul Flynn]

I am informed otherwise by those who perhaps have an even greater knowledge of this place than others—it goes back a long way.

The practical situation is that if we talk about the choice of Head of State, we can make only favourable comments about the people concerned. It is not difficult to say anything favourable about our present Queen, who has had a remarkable reign and has never interfered with politics in any way. However, if we look back at her immediate predecessors—again, without being derogatory —her father had an unhappy time and her uncle was a very unsuitable monarch, and her great grandfather and various others were not suitable.

There are grave doubts about the immediate successor, which are well known. There are many doubts about him and we are not even allowed to know what he wrote in letters to Ministers a few years ago. [Interruption.] “Quite right”, says an hon. Member. Who are we to know? We are only the elected people of this country. We are the representatives of the nation, not someone who happened to be first past the bedpost some time ago. That does not qualify him to make the crucial decisions he would have take, which is common in most countries where they have an elected state and the Head of State is there to keep the Prime Minister in control. That might have been necessary in the dying days of Mrs Thatcher’s rule, the details of which I gave last week—

[Mr Deputy Speaker]

Order. Perhaps we can get back to new clause 1 and amendments 1 and 2.

[Paul Flynn]

I will speak about new clause 1, as you rightly say, Mr Deputy Speaker, though these remarks are of relevance.

The suggestion is that we have a regent: a piece of ingenious constitutional gibberish that is part of the past rather than the future. We should be legislating for the future. Let us look at what we have got. I am still baffled—I cannot get these things across to the Table Office—as to how these outrageous decisions we are taking are consistent with the Human Rights Act 1998 and the European convention on human rights. Article 9 of the convention states:

“Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance.”

That is enshrined in the Human Rights Act 1998—not 1598 or 1298. It goes on:

“Freedom to manifest one’s religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or the protection of the rights and freedoms of others.”

What has this got to do with a democratic society? This is about an autocratic society and a monarchy that have contributed nothing to our progress over the years. Rather, they have been an obstacle to democratic reform for centuries.

18:00

How can the Government claim that the Bill is consistent with the Human Rights Act? The rationale is there for a legal challenge. I am sure one will be made before long. There is no statutory law of male preference primogeniture for royal succession; it is common law construct that has become codified by practice over the centuries. The heirs of Sophia of Hanover currently have the sole right, enshrined in law under the Act of Settlement, to succeed to the English Crown, with all that that implies in terms of rights and entitlements of the English monarch as de facto Head of State.

I want to clear up one point. There is a belief that the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) is 246th in line to the throne, and according to Wikipedia, the authority for that claim is the blog of “Mr Paul Flynn”. I advise anyone who wishes to repeat that claim to treat it with some caution, because I know the process by which the number was arrived at, and no other authority makes the claim.

The Bill seeks to extend by law the rights in the Act of Settlement to all heirs of Sophia of Hanover, not just to the boys and men who would succeed under common law principles. By so doing, however, it seeks to create binding rights in law in favour of a very small group of additional potential future beneficiaries among the female heirs of Sophia of Hanover on the basis of birth alone.

[Michael Ellis]

A moment ago, the hon. Gentleman said that the monarchy had done nothing in the past 100 years for the advent of democracy in this country. May I suggest that he is wholly and unavowedly in error and that in fact the monarchy has done much in the last 100 years and more to act as a pillar in the protection of democracy?

[Paul Flynn]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. We are now generalising the debate and not really focusing on new clause 1 and amendments 1 and 2. Mr Flynn, will you please focus on the new clause and amendments?

[Paul Flynn]

I would be delighted, but let me say—although I probably should not—that the contribution of royalty has been of one head, grudgingly donated.

The Bill appears prima facie to be incompatible with article 1 of protocol 12 of the European convention on human rights, which forbids discrimination on the grounds of birth in any right created by law. Perhaps the Government would like to think about that point. We are creating not only a piece of new discrimination, new unfairness and new gender bias, but something that is in conflict with the Human Rights Act and the European convention on human rights.

It would be good to know what advice the Government have had on the Bill. I have tried to question the Government about this, but they have been reluctant to answer. The Bill states that it complies with the relevant rights. Nevertheless, this is one of the most atrocious Bills ever to come before the House. So many Bills have unintended consequences, however, and this one opens a Pandora’s box on the royal succession: those who believed that the rules were set immutably in stone now know that they are not, and now that there has been one change, there can be many others.

We must move forward to an adult, 21st-century choice of Head of State, as have most countries in the world—those free nations that elect their Head of State and give their entire population the chance to be elected. Under the Bill, however, only members of the Church of England can become Head of State. The Church in Wales has pedigree. The Celtic Church existed long before the Roman Church—this European import—came along to take over the country, and we have the great saints Illtyd, Dyfrig, Samson and a string of other great saints.

[Dan Rogerson]

The hon. Gentleman is making a good point about the Celtic Church—as I did in an intervention—but I am sure that the Celtic monasteries would have accepted the primacy of Rome. The Synod of Whitby settled some of these matters once and for all, so although there might have been differences, it would have accepted the primacy of Rome.

[Paul Flynn]

I might address that point later, but the saints—Piran and the rest of them—are celebrated to this day in Wales, Cornwall and Brittany. It is an independent Church and one that has been disestablished since the 1920s. It has none of the problems that we have today because it is disestablished. It has even supplied a brilliant Archbishop of Canterbury.

[Martin Horwood]

The hon. Gentleman must admit that even the Celtic Church was introduced into these isles by the Roman empire, so it kind of counts as a European import.

[Paul Flynn]

I look back with some fondness to the Roman empire as a time when we had a common currency in Europe. The hon. Gentleman might remember that the great Euro-world of the Roman empire was followed by the dark ages. In my constituency 2,000 years ago, two languages were on the lips of the children—Latin and Welsh. I rejoice that—this says a lot about its sustainability and survival—Welsh is still heard on the lips of our children, whereas we do not get many people speaking Latin these days, except for the hon. Member for the middle ages himself, the hon. Member for North East Somerset. Nevertheless, it is part of our inheritance.

[Mr Deputy Speaker]

Order. I fear that the hon. Gentleman’s speech might be on a loop. He started with this, and I think he is now coming to an end, is he not? Will he perhaps concentrate on new clause 1 and amendments 1 and 2?

[Paul Flynn]

I am delighted to support new clause 1 —it is a minute improvement to the Bill—and I hope that the hon. Gentleman will press it to a Division, so that we can support his cause and stand up for a minor improvement to end the grotesque religious intolerance in the Act of Settlement.

[Sir Alan Beith]

I wish to speak to amendments 1 and 2, which raise an important point.

It was a bit much for the hon. Member for Newport West (Paul Flynn) to lambast the Government for introducing a Bill that removes gender discrimination in the royal family—something that the last Labour Government said they wanted to do but never got around to completing—and deals with the Royal Marriages Act 1772 and the limitation on sovereigns being married to a Roman Catholic. Were the Bill to cover the much wider issues of disestablishment or of whether the sovereign should no longer hold the position they currently hold in the Church of England, it would be a different Bill and a much wider consultation would have taken place.

The intention of the Bill might be frustrated, however, if the hon. Member for North East Somerset (Jacob Rees-Mogg) is right, because the wording of the Act of Settlement about who is a Catholic is very detailed and picks up on almost any evidence of any connection with the Catholic Church at any time in the person’s life. As we discussed earlier, it is highly likely that the child of a mixed marriage will have experienced both denominations —and perhaps the Church of Scotland as well. Many parents offer their children the opportunity to see what different Churches have to offer.

[Bob Stewart]

As I understand it, Her Majesty the Queen has attended a Roman Catholic service at some stage in her life. Does that taint her under the old rules?

[Sir Alan Beith]

It depends whether one thinks that Her Majesty was reconciled to Rome by that action, which did not involve being in communion with the Church of Rome—something from which the Church of Rome would exclude Her Majesty in any event—so it is only on the first of those two possibilities that what my hon. Friend describes might be so regarded. I do not regard it as such, because “reconciled” in that legislation meant accepting the authority of the papacy over the Church in England. That was what the argument was really about. Members of all Churches are very much reconciled to each other these days, because they realise that they share a common faith that is more important than their points of difference.

[Mr Leigh]

To reply to my hon. Friend the Member for Beckenham (Bob Stewart) through my right hon. Friend, the Queen has attended vespers at Westminster cathedral, but in her entire reign she has been very careful never to attend a Catholic mass. Dare I say that I think that in this day and age that sort of care is not necessary?

[Sir Alan Beith]

Perhaps we should not get into a discussion about precisely how the Queen has dealt with these matters. From my standpoint, I see her as someone who has used her position in the Church of England in a way that is generally beneficial to society, by setting out the importance of spiritual things and laying emphasis—as she did in her most recent Christmas broadcast—on some of the moral and ethical conclusions that one might draw from these things. That is something of a satisfaction to non-conformists, Roman Catholics and members of the Church of Scotland, with which she has a continuing relationship—it is her Church in Scotland. In all those respects she has been exemplary in the way she has used those positions.

However, I turn to amendments 1 and 2, because—

[Michael Ellis]

Will my right hon. Friend give way?

[Sir Alan Beith]

I want to get on to amendments 1 and 2, because I am anxious that we get this right and I am interested in what the Government have to say about them.

It seems to me that the wording in the Act of Settlement might well preclude someone who, let us say, as a teenager or young adult chooses to be in the Church of England rather than the Catholic Church, having had experience of both in their lives. They could be automatically excluded by those features of their early involvement with the Roman Catholic Church that fell within the extended definition in the Act of Settlement of what constitutes having been a Catholic. Unless we deal with that, our legislation will be defective and will fail to fulfil its intended purpose, because at some future date it might exclude someone from being the sovereign even though they were in communion with the Church of England and wanted to uphold the Protestant reformed religion, as the coronation oath requires.

[Mark Durkan (Foyle) (SDLP)]

I have attached my name to amendments 1 and 2, but not to new clause 1. That is not because I particularly disagree with the point that the hon. Member for North East Somerset (Jacob Rees-Mogg) is trying to make in new clause 1, but in many ways because I am sensitive about such issues, as someone who is not a British national, but a citizen of the Irish Republic—that is the passport I carry; therefore I see myself as a citizen of a nation that does indeed have an elected Head of State.

I come to this House not to disrespect any of the institutions that are cherished by other Members and that are part of the British constitutional settlement. Where I can, I will support moves to remove and relieve aspects of discrimination wherever we find them. I said last week that this Bill does two valuable things in that it removes a layer of gender discrimination in the succession to the Crown and it lifts one layer of religious discrimination —the bar on a Catholic marrying the heir to the throne. However, as we heard in last week’s debate, those proposals in themselves leave many questions. As we heard, for some of us, one question concerns the remaining areas of discrimination, whereby anybody who at any stage in their lives had either been a Catholic or been deemed to be a Catholic would be barred from being an heir to the throne. In effect, it is the McCarthyite question: “Are you now or have you ever been a Catholic?” For anybody who has ever been a Catholic in any shape or form, that is it—they are out; they count as dead for these purposes. Clearly that is wrong and anomalous. I do not believe that, in passing this Bill, the House should choose to say, “Well, we still want to keep that—it’s about right that we keep it.”

18:14

That is what amendments 1 and 2 are really about. They essentially say that whatever arrangement might be made to accommodate someone who has been a Catholic or been deemed to have been a Catholic—or who deem themselves to have been a Catholic—that person cannot be barred from succeeding to the throne on the basis that they have been a Catholic at any stage in their lives. That is why I put my name to amendments 1 and 2—because I believe they simply remove that remaining discrimination.

The main reason for not putting my name to new clause 1 is simply respect for the Church of England. Obviously I am not an Anglican, and I am not even English. In many ways I feel sorry for the Church of England. In a way, because it is an established Church, everybody keeps taking slices off it, on one issue or another. In many ways, we as legislators find ourselves invited to vote or decide on matters pertaining to the Church of England, whereas I would be much more comfortable not encroaching on any matter relating to the Church of England’s life as a Church. That is why I have not put my name to new clause 1, which does at least deal cleverly and constructively with the other question that arose for Members last week, which was: if the heir to the throne were allowed to marry a Catholic, what would happen if a child of that marriage was then a Catholic? That would affect issues around the succession to the throne—it would affect the Protestant ascendancy, as we heard last week—as well as the Church of England.

The hon. Member for North East Somerset has tried to address and reflect on the arguments and concerns that arose on both sides of the issues raised by this Bill. I therefore hope that the Government will respond to this debate by making it clear that they agree that Parliament will have to go further, because to say, “Well, we don’t have any more to do,”—to suggest that the possibility of a Catholic marrying the heir to the throne and their children perhaps being raised as Catholics would not raise any future questions—leaves us with a doubt, which a number of us also expressed last week, about clause 3(1). We are concerned that the power of controlling marriages—which, for the first six people in line to the throne, remains in the hands of the sovereign under this Bill—will in effect be the way to deal with any risk that might arise of someone who has been raised as a Catholic at any point being close in the line of succession to the throne.

There are therefore genuine issues and questions left by the degree to which the Government have legislated to date, as well as the form and limits of the legislation to date. Unless those other issues are addressed—by these amendments or others—the Government will leave us still harbouring the doubt that clause 3(1) is really about ensuring that the issues opened up by clause 2 will never actually arise in practice. I do not believe that is good enough. We as legislators cannot say, “We’re going to put in place flawed legislation that we know gives rise to all these other questions, but we’re content either that it’s not going to happen or that it’s not going to happen soon enough.” As legislators, we have to address things in our time according to what is right, what is fair and what is proper. In the 21st century, we should not be leaving any residual form of discrimination against any person of any one religion.

[Wayne David (Caerphilly) (Lab)]

I must begin by saying that I do not have to declare an interest in the debate today, in that I am not related in any way to any member of the royal family—unlike some Members of the House. Nor am I related to a Welsh saint; I have been assured that, despite my name, there is no connection whatever.

I rise to respond to this excellent debate with some trepidation. I have to express some strong reservations, but I want to begin by congratulating the hon. Member for North East Somerset (Jacob Rees-Mogg). His speech introducing the new clause was a veritable tour de force, if I may use that language. It was a wonderful speech; it is a long time since we have heard such a wonderfully erudite exposition in the House. It was very much about equality between the members of all religious faiths and none in regard to the ability to hold the position of monarch of this country. That theme was taken up powerfully by a number of Members, including my hon. Friend the Member for Hayes and Harlington (John McDonnell), who said that new clause 1 highlighted what many people consider to be a continuing anachronism.

It should be recognised, as several constitutional historians have done, that the monarchy today has a number of symbolic roles attached to it, including the Head of the Commonwealth and the Supreme Governor of the Church of England. Some might question whether it is correct to describe those roles as symbolic, but the reality is that we live in an increasingly secular society and that many people are now quite rightly questioning the close connection between Church and state.

There is no doubt in my mind that Parliament must have this debate. We should also have a debate on the question of disestablishment. My hon. Friend the Member for Newport West (Paul Flynn) mentioned the fact that the Church in Wales had been disestablished since 1920. Speaking as a Welshman and a member of that Church, I recognise that that has created a sound constitutional relationship between that Church and the monarch in England. However, that debate and the debate on religious equality in regard to the throne are debates for another time. That is not to say that we must shy away from those debates—quite the opposite, in fact—but we must recognise that this is a limited, narrowly defined Bill.

The Bill has had a long gestation period, starting with the work done by the previous Government and continuing under this Government. Its contents have been agreed by the Heads of Government in the Commonwealth. If the whole issue were to be reopened in the way that has been suggested, we would have to go back to square one and begin the long, convoluted process again. I am sure all Members would accept that that would be neither helpful nor desirable.

It is also important to note, as we have been discussing the international element to the Bill in relation to the Commonwealth, that Queen Beatrix of the Netherlands might abdicate in favour of her son. I mention this because the Netherlands is one of the countries that has abolished male primogeniture, and I very much hope that the House will follow that good Dutch example.

It was made clear in our previous debate on the Bill that although the legislation might appear straightforward at first glance, it is in fact extremely complex. The nature of the constitutional relationship between the monarchy and the Government is byzantine, to say the least, and there will inevitably be unintended consequences that will have to be scrutinised in great detail.

I should like to ask for greater clarification on one such detail relating to new clause 1. As I understand it, the hon. Member for North East Somerset believes that the monarch could still be the head of the Church of England if he or she were in communion with the Church, but if that were not the case, he is suggesting that the next in line of succession could fulfil the role. What would happen, however, if that individual were not a member of the Church of England?

[Jacob Rees-Mogg]

The regent would assume the role under the Regency Act 1937, which requires that the regent should meet all the criteria laid down in the Act of Settlement. They would therefore have to be a Protestant, and in communion with the Church of England. The whole point of the new clause is to ensure that the supreme governorship of the Church of England remains with a Protestant.

[Wayne David]

I thought that the hon. Gentleman might come back with that response. However, the difficulty with the regency legislation is that there is more than one Act. There have been a number of amending Acts. He referred to the 1937 Act, but since then there have been what some people have referred to as ad hoc departures from that legislation. In fact, the Act talks about the best person succeeding to the throne, rather than the next in line. What on earth does that mean? How do we define the “best person”? This underlines the point that the legislation will inevitably have unintended consequences that will have to be looked at in detail, with a cool head, over a reasonable period of time.

Nevertheless, we have had an excellent debate this afternoon. We have focused on the tightly defined legislation before us, but Members have also rightly taken the opportunity to extend the debate. We have now begun to open the new chapter of constitutional debate that we need to have in this country. On that basis, I hope that the hon. Member for North East Somerset will not press the new clause to a vote.

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

I thank all hon. Members who have spoken today for their erudite and comprehensive contributions. I join the hon. Member for Newport West (Paul Flynn) in being a fan of middle English and old English; if he would like to join me in the Tea Room some time, I am sure that we could discuss that.

Through amendments 1 and 2, my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) is seeking to ensure that a child of the Roman Catholic faith may later convert to the Protestant faith and succeed to the throne. Let me first deal with the Government’s understanding of the Act of Settlement, which we share with him. The law in this area is certainly not easy, but on balance, we agree with his interpretation of the Act of Settlement and the Bill of Rights as meaning that a Roman Catholic may not convert to the Protestant faith and then succeed to the throne. This is, however, an aspect of our constitution that we do not think has ever been tested. My hon. Friend the Member for Gainsborough (Mr Leigh) noted that such circumstances would be unlikely to arise within our lifetimes. The bar appears to be on anyone who has ever “professed” the Roman Catholic faith, or held communion with the Roman Catholic Church. Once disqualified, they are excluded for ever from succeeding to the throne.

I should like to make a few points on amendments 1 and 2 before I turn to new clause 1. My first point relates to scope. As my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) said, the scope of the Bill is narrow. I appreciate that there are reasons to criticise the law as it stands, but the amendments stray into new territory and go beyond the limited aims of the Bill. In passing, I must thank my hon. Friend the Member for Northampton North (Michael Ellis). We missed him in the earlier debates last week, but he enlivened us today when he came as close as anyone has done in the debate to asking, “Is the Pope a Catholic?”

[Jacob Rees-Mogg]

If my amendments were not within the scope, Mr Speaker would surely not have selected them.

[Mr Deputy Speaker (Mr Nigel Evans)]

That is absolutely correct. That clarification was right; the amendments are within the scope of the Bill.

[Miss Smith]

I have no intention of disputing your ruling, Mr Deputy Speaker, and that was not the intention of my comments. I merely wanted to say that this Bill has never had the intention of addressing the religion of the monarch or indeed of those in the line of succession.

00:00

As was said repeatedly in last week’s debate, changing the law in this area would require consultation and we would need to seek the agreement of the Commonwealth realms. As I am sure my hon. Friend the Member for North East Somerset and all hon. Members will be aware, that would take time, and we are anxious to ensure that the important changes the Bill is designed to make are carried through. I note that, as the hon. Member for Caerphilly (Wayne David) said, years of work have gone into the Bill as it stands.

[Dan Rogerson]

Although I am sympathetic to the aims of the hon. Member for North East Somerset (Jacob Rees-Mogg) in tabling the new clause and amendments, I believe that the most powerful argument for not accepting them is the one that the Minister has just set out: we should not seek to jeopardise the Bill’s moves towards equality by amending it beyond the agreement that has already been reached. I hope, however, that she and the Government will continue to have discussions with the other realms so that if further equalities can be reached, we do not abandon the possibility of having them.

[Miss Smith]

I thank the hon. Gentleman for his support for the Bill. I can reassure him and all Members that we are in working contact with the other realms, but we do not expect radical departures from the scope in any particular realm.

[Nicholas Soames (Mid Sussex) (Con)]

Does my hon. Friend agree that in this particular case, what my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has just shown is that what has been completely settled and without question can now be open to challenge? Does she believe that this is a sensible way to proceed when overturning 1,000 years of British history?

[Miss Smith]

I deeply respect my right hon. Friend’s intervention and, indeed, his contributions to the debates on this topic. Many aspects of the law relevant to this area are not changed by the Bill, however, and I would like to answer my right hon. Friend’s intervention by saying that, to the extent that there are difficulties, they already exist. I stated clearly last week that key elements of the Act of Settlement and the Bill of Rights stay standing, and I reiterate that today. I do not see this Bill as creating further constitutional crises than could be wrought out of the existing law.

For the record, before moving on to my second argument about the two amendments, let me state again that the Government are absolutely committed to the Church of England as the established Church, with the sovereign as its Supreme Governor. We consider that the relationship between Church and state in England is an important part of the constitutional framework. It has evolved over centuries and the Government have no intention of legislating to disestablish the Church of England. It is important to state that. The Government’s view is that allowing a person of the Roman Catholic faith to accede to the throne would clearly be incompatible with the requirement for the sovereign to be in communion with the Church of England.

Let me move on to my second argument and address the substance of the two amendments. I suggest that, if they were made, they would add greater uncertainty to the line of succession. For example, let us consider someone who is brought up as the heir to the throne and is clearly in preparation for that vocation over their lifetime. In the Government’s view, it would make that person’s position, and the position of their immediate family, very difficult, if they could be superseded at any stage by someone who converted from Roman Catholicism to the Protestant faith. By extension, that could also raise the prospect of the reigning monarch being subsequently supplanted by someone who was theoretically higher in the line of succession on that latter person’s converting from Catholicism and joining in communion with the Church of England.

I see that as a major technical problem with the two amendments. I view it as adding uncertainty and I could envisage it leading, in the words of many who have contributed to the debate, to a “constitutional crisis” which I do not see the core Bill providing for.

[Sir Alan Beith]

I understand the Minister’s argument, but it does not address the fact that, throughout the discussion, it has been clear that we are talking about children who are going to be brought up in mixed marriages. It is likely that, in those circumstances, before the child is of the age to decide whether they want to succeed to the throne, they will have experienced both Churches and could make a perfectly free choice—unconnected with the throne—for one or the other. That choice would determine their eligibility long before they were 18 or 19.

[Miss Smith]

I recognise the measured point that my right hon. Friend makes. The difficulty or tension here that we do not have the time or scope to go into with regard to this Bill, or indeed as mere parliamentarians as opposed to theologians, is the nature of free will, and the free will of the child. I want to return us to the point that the Bill does not seek to change the entirety of the Act of Settlement and the Bill of Rights, for reasons that we went through at some length last week and a little earlier today,. I put the Government’s point: the Bill is narrow in scope and does not seek to enter into the theology of the faiths in question; it seeks instead to amend a unique form of discrimination that is particularly narrow.

[Mr Leigh]

I do not understand the Minister’s point—that if the two amendments were passed, it could result in a constitutional crisis or somebody supplanting somebody else. If she does not mind my saying so, this seems like an argument invented by civil servants. It is over-complicating the situation, when the fact remains that under this Bill the eldest daughter or son, whoever comes first, is going to succeed. All my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) is doing through the amendments is to prevent them from being disbarred from the throne because of something that might have happened in their childhood. That is what he is saying: it is very clear; it is not very complicated.

[Miss Smith]

As I understand the amendments tabled by our hon. Friend the Member for North East Somerset, they would technically open the opportunity for a person to convert and provide for that person not to be “for ever” barred. I think it is possible for that to allow confusion over the very same point, including after the moment of succession. I can see that possibility arising through my hon. Friend’s amendments. I regret that that is the case, but I see it as a problem, and I humbly make that argument to the House.

[Mark Durkan]

The Minister is throwing up a plot line here that even Jeffrey Archer would not try to contrive in suggesting that by converting, someone is somehow going to leapfrog over somebody else in the line of succession. How would that happen?

[Miss Smith]

I am trying to describe a situation where an older child—the Bill affects nothing to do with the age of succession—could, due to their faith, initially be out of the line of succession but later change their faith, as envisaged by the amendments, thereby changing the realities of the succession.

[Mark Durkan]

If the Minister will forgive me for saying it, this is now sounding a little like “There’s a hole in my bucket, dear Liza”! She is relying on the fact that an older brother or sister might be debarred because of their faith, but the point of the amendments is to end the situation of someone being debarred because they happen to be of a particular faith at any stage in their lives.

[Miss Smith]

During this debate many hon. Members have asked the Government to take account of unintended consequences, and I humbly suggest that I am pointing out an unintended consequence of the amendments tabled by my hon. Friend the Member for North East Somerset.

We have heard several mentions in the debate of the support afforded to the Bill by the Archbishop of Westminster, who welcomed

“the decision of Her Majesty’s Government to give heirs to the throne the freedom to marry a Catholic”.

Importantly, he also recognised the importance of the position of the established Church in protecting and fostering the role of faith in our society. I balance that against the Church of England’s comments, which are likewise supportive. Given that both the Catholic Church and the Church of England have been extremely supportive of the changes, I believe that we have found an appropriate balance in the Bill. I do not think there is an appetite in the country at large to change or damage the position of the established Church in this country.

[Wayne David]

Will the Minister accept the reality of change in this extremely complex constitutional area? Whatever the moral arguments in favour of change, they must nevertheless be matched to the practicalities of constitutional change and achieving the necessary consensus to bring about that change.

[Miss Smith]

I welcome the comments of the hon. Gentleman, who brings me back to the point that I do not believe there is a consensus among the public for any radical divergence from the traditional arrangements for the established Church in this country.

In new clause 1, my hon. Friend proposes a perhaps rather ingenious solution: splitting the role of Supreme Governor of the Church of England from the role of sovereign, in a method akin to a regency. Such a split would represent a fundamental change to the role of the monarch in English society in relation to the established Church, and could not be considered without extensive consultation. I am delighted that the House had sufficient time to debate all the matters that were in scope last week, but new clause 1 suggests a more radical diversion from the traditional role of the monarchy. There is not public support for the proposed change, which opens up a series of extremely difficult questions about what the relationship would be between the sovereign and the Supreme Governor, and whether such arrangements could continue to support the established place of the Church of England. My right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell) raised a question about how the coronation and accession oaths could be made to work in such an instance.

The Government have no intention of going further than the limited scope of the Bill as presented. The amendments and the new clause tabled by my hon. Friend the Member for North East Somerset would introduce instability and uncertainty of a type that is not welcome in the institution we are discussing, which has served the country well for generations in its temporal role and in its spiritual role as articulated. As there is neither public support for the admirably comprehensive arguments that have been made, nor appropriate space for consultation on them considering that the legislation must be taken through many other realms, I invite my hon. Friend to seek leave to withdraw his amendments.

[Jacob Rees-Mogg]

I begin my reply by thanking the Lord President of the Council for saying:

“The Bill does three specific things.”—[Official Report, 22 January 2013; Vol. 557, c. 208.]

Three is important, because if the scope is only two things, it is narrow, but three widens it, which has helped me in tabling my amendments. No doubt the Minister will convey my gratitude to the Lord President of the Council.

I am grateful to those Members, such as my hon. Friend the Member for Gainsborough (Mr Leigh), who have spoken broadly in support of my position. It is a particular pleasure, however, to have the support of some Opposition Members with whom I am normally in a high state of disagreement: the hon. Members for Newport West (Paul Flynn), for Hayes and Harlington (John McDonnell) and for Foyle (Mark Durkan). I also received support for my amendments from my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith). As I spoke at considerable length on a private member’s Bill introduced by the hon. Member for Hayes and Harlington, it is noble of him not to have held that against me.

18:45

I will not press my amendments to a vote, with the caveat that the argument put against them was of a high degree of sophistry—I cannot believe that the Minister wrote the words herself, given the sophistical nature that they display. I will, however, test the will of the House on new clause 1, on the succession. I am basically asking Members whether they are in favour of tolerance, equality and religious freedom.

Question put, That the clause be read a Second time.

18:46

Division 143

Ayes: 38

---

Labour: 18
Conservative: 16
Liberal Democrat: 3
Social Democratic & Labour Party: 1
Scottish National Party: 1

Noes: 371

---

Conservative: 174
Labour: 154
Liberal Democrat: 40
Independent: 1
Plaid Cymru: 1

Clause 1

Succession to the Crown not to depend on gender

18:59

[Paul Flynn]

I beg to move amendment 3, page 1, line 2, leave out

‘born after 28 October 2011’

and insert ‘whenever born’.

I shall be much briefer than I was when we debated the previous amendments. From where I sit in the House, I noticed the conversations that Members were having as they went in to vote and I think that many who opposed the previous measure will be very surprised to see, when they read the papers tomorrow, what exactly they voted against.

Amendment 3 is a brief and helpful proposal to remove the specified date. Lord Armstrong has recently reminded us of how atrocious we, sadly, are in this Parliament at legislating. When we legislate in haste we often legislate in error, and what Lord Armstrong has said, having gone through the Bills passed in the 13 years of the previous Government, is that 75 went through all stages in this House and the other House, received Royal Assent and then were never implemented—they made no difference.

We have now reached the position where this Bill may well be judged as an atrocious piece of legislation, because there is no need to limit us to a date. We are dealing with a situation where the child is likely to be born—this is referred to in the Bill—in the summer, but there is no need to make a decision now. We can give ourselves time to improve the Bill and avoid the unintended consequences it contains.

I cannot see why we should not apply this provision now. If this is such a good idea—there is an almost universal approval in the House for the main proposition of getting rid of discrimination against women—why not do it immediately? Why should it apply in 40 or 60 years’ time? Why should it not apply immediately? The effect of that might be nothing at all, because those in the line of succession in the foreseeable future are predominantly male, barring problems that might occur with premature deaths, accidents and so on. However, it is conceivable, although unlikely, that there could be a female in direct line to the throne. Are we going to wait until the child that is going to be born in July reaches maturity for this beneficial legislation to come into force? If it is worth doing, it is worth doing now.

[Miss Chloe Smith]

I will be equally as brief as the hon. Gentleman. I, too, understand that the effect of his amendment would be to make the gender of any person in the line of succession irrelevant when determining succession to the throne. I put it to him that the Government did not make an omission; the way we set out the Bill was a deliberate choice. His amendment would change the current line of succession. Specifically—I suspect he has this in mind—their Royal Highnesses Prince Andrew and Prince Edward, and their descendants, would move below Her Royal Highness Princess Anne and her descendants. The Government do not believe it is fair or reasonable to alter the legitimate expectations of those currently in line to the throne. The hon. Gentleman’s amendment is a retrospective provision and there would need to be good reason for it.

Commonwealth leaders have agreed to remove the male bias in succession to the Crown for the future. For reasons we have already discussed at length, the Government view that agreement as being important to maintain, and it does not envisage the current order of succession being disturbed. Rather, when new members of the royal family are born they will enter the line of succession without there being any preference for males over females, and I know that the hon. Gentleman shares that latter principle with me.

[Michael Ellis]

Does the Minister agree that not only would it be intrinsically unfair to adopt an ex post facto aspect to the Bill by applying it retrospectively to those who have lived in the current order of succession for many years—their adult lives—but it would breach the principle of avoiding retrospective legislation in this House?

[Miss Smith]

I thank my hon. Friend for that contribution. I note that the different clauses of this Bill do carry slightly different connotations of retrospectivity. I would be happy to explain that, but we did cover some of those issues in detail in Committee. He is right to say that what is relevant in clause 1 is the legitimate expectations of those currently close to the throne in the line of succession. We do face a question about what is fair and reasonable to them. Clause 1 strikes a fair balance by providing that gender is irrelevant in this regard for persons born after the date of the agreement reached by the Commonwealth realms on 28 October 2011. That element of retrospection is justifiable.

An important practical element and effect of the measure is that if the Duke and Duchess of Cambridge were to have a daughter and then a son, the daughter would precede the son in the line of succession. I believe that all hon. Members know that that is an example of the point behind clause 1. It is also clear that that deals with a future occurrence, as opposed to altering the legitimate expectations of those currently in line to the throne. For that reason, I invite the hon. Gentleman to withdraw his amendment.

[Paul Flynn]

I am disappointed at the limit to the reforming zeal of this Government, who seem to be saying, “God, make me gender neutral—but not yet.” I know that the Minister was disappointed that I did not move my amendment in middle English, but in the spirit of what she said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

19:08

[The Deputy Leader of the House of Commons (Tom Brake)]

I beg to move, That the Bill be now read the Third time.

I want to thank the House for the gripping debate that took place last Tuesday and for the scrutiny that has been provided. I was very glad to see that Members had sufficient time in Committee to consider all the amendments that were selected. I particularly want to thank various participants, such as my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and the hon. Member for Rhondda (Chris Bryant), who brought such a deep understanding of our complex and colourful constitutional settlement to the Floor of the House. I would also like to thank the hon. Member for Newport West (Paul Flynn), who cruelly described my hon. Friend the Member for North East Somerset as the Member for the middle ages but then went on to refer to the Roman era—so presumably he is the Member representing the Roman occupation in today’s debate.

I also wish to thank the royal household for its engagement and should mention the tireless work of Governments from across the Commonwealth, ably marshalled by Rebecca Kitteridge the New Zealand Cabinet Secretary. It has been a remarkable achievement to ensure that the changes we are discussing can be effected across the realms of the Commonwealth for which Her Majesty is Head of State.

I should like to make a point of clarification on an issue discussed in Committee. The hon. Member for Caerphilly (Wayne David) asked whether, under the Statute of Westminster 1931, individual Parliaments in the respective states of the Commonwealth need to give their assent. The relevant part of the Statute of Westminster is the preamble, which includes the following:

“And whereas it is meet and proper to set out by way of preamble to this Act that, inasmuch as the Crown is the symbol of the free association of the members of the British Commonwealth of Nations, and as they are united by a common allegiance to the Crown, it would be in accord with the established constitutional position of all the members of the Commonwealth in relation to one another that any alteration in the law touching the Succession to the Throne or the Royal Style and Titles shall hereafter require the assent as well of the Parliaments of all the Dominions as of the Parliament of the United Kingdom”.

To put it another way, our opinion is that the Statute of Westminster 1931 is politically rather than legally binding. A statement in a preamble is different from a section in an Act. Bearing that in mind, the Government have consulted the 15 other Commonwealth realms in order to reach agreement as to how the laws on succession to the throne should be changed. We have secured confirmation from Heads of Government and Cabinet Secretaries that each realm is in a position to take the steps necessary to bring the changes into effect. We consider that the appropriate steps are a matter for each respective realm in their particular context. Although some realms will not find it necessary to involve their Parliaments, others will.

The Bill is about equality. The Prime Ministers of the 16 Commonwealth nations of which Her Majesty the Queen is Head of State agreed during their meeting in Perth in 2011 to work together towards a common approach to amending the rules of succession to their respective Crowns. All those countries wish to see change in two areas: first, to end the system of male-preference primogeniture, under which a younger son can displace an elder daughter in the line of succession; and, secondly, to remove the bar on the heir to the throne marrying a Catholic. One effect of the proposed change is that if the Duke and Duchess of Cambridge were to have a daughter and then a son, the daughter would precede the son in the line of succession. I am proud that the Bill will remove two long-standing pieces of discrimination and modernise and affirm the place of our constitutional monarchy.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

On that issue—my right hon. Friend uses the example of a daughter and a younger son—has he managed to provide clarification on the points raised last week on what would happen to titles such as the Duke of Rothesay that specify a male heir in their deeds or patents provident?

[Tom Brake]

That matter has been brought up at various stages of the Bill. Titles are a matter for the monarch. Because we are restricting the scope of the Bill, we can move forward.

[Mr Wallace]

I am grateful to my right hon. Friend for giving way but I believe he might not understand me. The monarch is the fount of honour and can create a title, but most titles are not the privilege of the monarch once they are created—most titles are in fact a matter for Parliament. It takes an Act of Parliament to change or abolish a title except those deemed, under the doctrine of merger, to resort back to the Crown. In that case, will he tell us what will happen to those titles not under the doctrine of merger?

[Tom Brake]

On the titles to which my hon. Friend refers, the following might be helpful. The Scottish titles currently held by the Prince of Wales—Prince and Great Steward of Scotland, Duke of Rothesay, Earl of Carrick, Lord of the Isles and Baron of Renfrew—can pass automatically to a female heir apparent. Those titles have always hung together. The removal of the male bias in the line of succession could therefore not result in the detachment of the titles from the Crown. We have consulted the Court of the Lord Lyon, the official heraldry office for Scotland, on that. I hope that reassures my hon. Friend.

As we look forward to the birth of the Duke and Duchess of Cambridge’s first child, we can also celebrate the fact that a baby boy or girl will have an equal claim to the throne.

19:14

[Wayne David]

We have had a good debate today, and there were excellent debates last week on Second Reading and in Committee. I am glad the Government made the right decision to allow sufficient time for a proper and full debate in the House.

As I have said before, although the Bill is small in size, it is constitutionally and practically significant. A number of hon. Members have made the point that we should not tamper with our constitution, and particularly the monarch’s role within it, unless we are very sure about the changes we are making. Moreover, it is important that there is a large measure of consensus that transcends usual political divisions. In that respect, I thank the Minister for the co-operation with Opposition Front Benchers. I, too, associate myself with his remarks on wishing the Duke and Duchess of Cambridge all the best for the birth of their first child. For the first time, we can be sure that we have established equality between the sexes.

Mixed marriage—so-called—was raised on a number of occasions during our debates. I accept that it is a theological discussion, but clear reassurances have been provided by both the Roman Catholic Church and the Church of England.

We discussed the resources of the Duchy of Cornwall last week. I am assured that money will go to the Treasury, and that, under the provisions of the Sovereign Grant Act 2011, exactly the same money that would normally go to a male heir apparent will go to a female heir apparent via the Treasury. There is also the possibility that a female heir apparent could be the chair of the duchy, which is to be welcomed.

A number of hon. Members have been exercised because some people allege that there is a contradiction in clause 2(1) and clause 3(1). It is important to recognise that there is no contradiction—the clauses sit well together. The Government of the day will have a clear role and express a clear opinion to the monarch if the monarch’s right to deny the royal succession as it would normally take place is exercised. It is important to explain that the monarch is not a detached institution—we have a constitutional monarchy. That important point needs to be stressed time and again, but these are complicated and emotive issues. Will the Government consider providing additional explanation in the explanatory notes when the Bill goes to the other place, so that they provide further clarity?

That leads me on to the decision of the monarch regarding the six in line to succession. On Second Reading, the Deputy Prime Minister specifically stated that the figure of six was seized on for pragmatic reasons, but the Parliamentary Secretary, Cabinet Office, the hon. Member for Norwich North (Miss Smith), has said that the succession after Queen Victoria—the hon. Member for North East Somerset (Jacob Rees-Mogg) was extremely helpful on this point—set a useful precedent. Six is a reasonable figure that the Opposition can easily accept.

In conclusion, I am content with the reassurances that Ministers have provided and I look forward, once we have concluded our deliberations, to hearing the views that will be coherently expressed in the other place. The Bill is indeed an important piece of legislation. The roots of the monarchy as an institution are firmly embedded in our history—there is no doubt about that—but today the constitutional monarchy is a form of government that places the Head of State beyond political competition. That is surely to be welcomed. The sovereign, as well as being Head of State, is head of our nation. As one of our most distinguished constitutional experts has argued, the monarchy alone is in a position to interpret the nation to itself—that is its central function, its essential justification and its rationale. The Bill will help our constitutional monarchy fulfil that role even more effectively today and well into the future.

19:20

[Nicholas Soames (Mid Sussex) (Con)]

I wish to speak very briefly. First, I thank the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Miss Smith), for her courtesy and kindness in dealing with the queries that have rained down on her in the course of the debates. I congratulate my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who has brought to this debate an inquiring mind, which is necessary when dealing with such matters, and a profound knowledge of history and tradition and everything that goes with them. I also congratulate the hon. Member for Newport West (Paul Flynn), whose contributions are always worth listening to and whom I salute across the House even though I profoundly disagree with him. I always think it must be pretty hard going to be a republican at the time of the diamond jubilee, but he has stuck to his guns nevertheless, as he always does, and it is a pleasure to speak in the same debate as him.

I want only to say that I regret that a Bill that was pretty miserable in the first place has not been improved by its passage through this House, introduced, as it was, by the Deputy Prime Minister as a messy amalgam of political correctness and a desire to interfere. As you know, Mr Deputy Speaker, these are extremely complicated, complex and difficult matters that have served this country very well down the generations. Our old friend the unintended consequence rears its ugly head, I am afraid, very substantially during this debate so we look to their lordships to deal with those matters.

I fear that the word “consultation” has been grossly overused. I would be interested to know the full extent of the detailed consultation that went on in the preparation of this Bill. I believe that consultation with the institutions concerned has been very minimal indeed and it is therefore in my view disrespectful to the institution of the Crown.

The Government are playing fast and loose with the hereditary principle and I look to their lordships to deal robustly with this matter in the other place.

19:22

[Keith Vaz (Leicester East) (Lab)]

It is a great pleasure to follow the right hon. Member for Mid Sussex (Nicholas Soames) and I want to start my speech on a note of agreement, as he is absolutely right that the contributions made by the hon. Member for North East Somerset (Jacob Rees-Mogg) and my hon. Friend the Member for Newport West (Paul Flynn) added to the debate. It has been very worth while and will be followed, although at times it got complicated. I thought I knew everything about the Catholic Church and a bit about the history of this country, but I have learned so much from so many colleagues and I appreciate what they have said.

I pay tribute to the Deputy Prime Minister, the Deputy Leader of the House and the Parliamentary Secretary, Cabinet Office, the hon. Member for Norwich North (Miss Smith), for the way in which they conducted the discussions preceding and following the introduction of the Bill in this House. In particular, the hon. Lady went out of her way to ask Members for their views. In all the years I have been in this House, I have not often been invited to meetings with Ministers to discuss my views on impending legislation. That took place in a formal meeting at which many right hon. and hon. Members from both sides of the House were present. We had a fruitful discussion and she certainly seemed to have listened to the points that were made, as demonstrated by her speeches.

The difficult task was that of the Deputy Prime Minister. He has had to go to other members of the Commonwealth and persuade them to agree. He has done that diligently—I do not think that people automatically agree when he rings up and says that he wants to alter the law of the land. Of course, there has been careful thought. I know that, because when I introduced my ten-minute rule Bill on 18 January 2011, two years ago, I wrote to all 16 Commonwealth Heads of Government. Obviously, I do not know the royal family and Heads of State as well as the hon. Member for Northampton North (Michael Ellis) does, but I do my little bit in royal circles. The response I received was quite depressing, and the Prime Minister of Canada, Stephen Harper, went so far as to issue a statement saying he did not think that this issue was a priority—the Canadian people were facing other issues—and that he was not absolutely supportive of the proposal. He has changed his mind, and I am sure that that was because of the Government’s persuasion.

In conclusion, I want to pay tribute to Terry and Janet Herbert, two constituents of mine who live in Northfields and came to my surgery to say that it was quite wrong for us not to have equality in our succession laws. They pointed out that at least six European countries have changed their succession laws to ensure equality, as we have heard in our numerous discussions on this matter. We have heard them all: the Netherlands, Denmark, Sweden and others. If it was good enough for them, my constituents asked, why were we not doing the same? They started a petition that was circulated around Leicester and put on websites, which many thousands of people have signed since. I pay tribute to Terry and Janet. I know that they are not solely responsible for this massive change in the law, but I am grateful to them for coming to me and making suggestions. They are great royalists and supporters of the monarchy and they love the Queen, as we all do—we all like her as a person even though we do not all support the monarchy.

We have now brought the monarchy into the 21st century and we can all be very proud of that.

19:29

[Michael Ellis]

It is a pleasure to follow the right hon. Member for Leicester East (Keith Vaz), the Chairman of the Select Committee on Home Affairs. I am a member of that Committee and I venture to suggest that there is no more important person to the home affairs of this country than our sovereign lady the Queen.

The unwritten constitution of this great country is rather like the roof over the temple of Solomon, and the monarchy is the central pillar holding up that roof. Other pillars include this House, the other place, the judiciary and the law courts. Perhaps even the press are a pillar of the constitution—although rather a stunted pillar so perhaps more of a balustrade. Nevertheless, one might argue that a number of pillars hold up the roof of our constitution. It is a multi-pillared structure—one might almost say a Parthenon—and one must be cautious before one chips away at those pillars. The consequence of such actions can be a structural collapse, and we all know that those who are beneath the structure chipping away at it can be the victims of such a calamity. I would exercise all due diligence and all due caution before instituting any changes, such as those that are envisaged.

However, I support the Bill. On balance, 300 years is about the right period of time—it is not overly hurried—for the provisions being changed by the Bill to be looked at afresh. Some aspects of the Bill are appropriate because they renew the ageing—one might even say decrepit—parts of the constitution and the ancient structure that I mentioned. It is always right to consider that this country of ours and the monarchy that heads it has always changed with the times. The monarchy has always tended to adapt to changing times. Recently, Queen Victoria, by her character and temperament—[Interruption.] Recently, in constitutional terms. When Queen Victoria came to the throne she represented a considerable change from the Georgian sovereigns who went before her. Her conduct, her decorum and the manner in which she reigned were lessons to her descendants.

There is no doubt that there is unacceptable prejudice currently written into the constitution of this country by such Acts of Parliament as the Act of Settlement 1701.

[Keith Vaz]

I accept everything that the hon. Gentleman has said so far, but does he agree with me and other Members of the House that there is unfinished business in respect of modernisation—for example, the succession to baronetcies? These are issues that we should return to in the future.

[Michael Ellis]

For my part, I prefer to leave the structures alone if we can possibly do so. I think there is something to be said for the ancient customs, traditions and privileges of this country, and we should be very cautious about making changes willy-nilly because of their unintended consequences.

We have heard from my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). He said, I believe, in a debate last Tuesday from which I was absent but which I have read in the Official Report, that he does not take offence at the terms of the Act of Settlement because it is the history of this country. I admire that and I wish more people would take such a mature view of such things. All too often people are quick to find offence where none should be taken. There is an inbuilt prejudice against other religions, my own included. Because those religions may not be in communion with the Church of England, their adherents cannot be eligible to be sovereign of this country, but I for one take no offence at that because it is part of the noble history of this country and it seems to me that there are reasons why we should retain that. Principal among them is the establishment of the Church of England.

The prejudices that exist are based not on current thinking but on historical reasons, and have been left unchanged only because Members of this House in recent generations have taken the view, presumably, that they have more important things to do than change them or because changing them involves great complexity. For that reason, as well as for many others, I admire my right hon. Friend the Deputy Prime Minister for being the one who brought these measures before the House. Whereas others have spoken of them and made supportive noises about them for many years, the Deputy Prime Minister has done it, and I congratulate him on that.

With reference to male primogeniture, one has only to look at the long and noble history of this country to see that we have been very fortunate with our female sovereigns. There should certainly be no reason why we should deny or make it more difficult for females to succeed to the Crown. We have the example of our current Queen and of Queen Victoria, and I dare say of those queens who were not queens regnant but queens consort. I am thinking of the late Queen Elizabeth the Queen Mother and Her late Majesty Queen Mary, who also were exemplars of duty, service to their country, and spirit. I have no problem with removing the male primogeniture aspect, as the Bill does.

However, I would not go as far as others and seek to defenestrate completely those parts of the constitution which in some way can be said to be prejudicial to some group or other. For example, one could argue that the law that says that the oldest person, whether male or female, should take precedence over young siblings is also biased. It is also prejudicial because it is ageist in that it favours older over younger. One could go on ad absurdum. I suggest that we try not to get too concerned about removing all aspects of the legal fictions that the law has had to develop over the years.

For example, when, for the purpose of inheritance, both the father and the eldest son die in the same instance, such as in a road traffic accident, the law assumes that the older died before the younger, even if it is transparent that they both died instantly in an accident. That is because the law has to develop types of legal regulation—legal fiction, one might call it—in order to make sense. I use this as an example to indicate with caution that attractive though it is in principle to remove all types of bias, there will always be some type of bias within the system, but the Bill goes some way towards rectifying the most egregious examples.

The Bill also deals with the Royal Marriages Act 1772. The Act has become redundant in as much as it is difficult to operate effectively.

[Wayne David]

The hon. Gentleman says the Act is redundant. Would it not be more accurate to say that it is a ridiculous piece of legislation?

[Michael Ellis]

I do not go so far as to say it is a ridiculous piece of legislation because there is a good reason why the sovereign should have a right over those closest to him or her in their marriage arrangements. The hon. Gentleman must also agree with that principle, because he said he agreed with the principle that the number should be reduced to six. So whether it be the heirs of Electress Sophia or whether it be six people, the principle remains the same. The sovereign has special rights and responsibilities. Of course it is true that in ordinary families no head of the family would have such a say, but it is nonsense to suggest that the royal family should be in that position. It is right that some demarcation be made so that the sovereign can exercise control. My understanding is that in other constitutional monarchies similar provisions apply, whereby restrictions are placed on the marriage rights of those closest in line.

I support the Bill. I commend it to the House. Although I emphasise that I would exercise extreme caution when chipping away at the pillars of our constitution, in my submission the Bill should have the support of the House.

19:39

[Chris Bryant]

I am grateful to follow the hon. Member for Northampton North (Michael Ellis). When he talked about the temple of Solomon, I was somewhat concerned about the number of pillars he was adding to the established archaeology of the building. The fact that it was destroyed by Nebuchadnezzar many centuries ago also made me worry about quite what direction the hon. Gentleman was going in, let alone whether we were going to start talking about how many wives and concubines Solomon had under the provisions of his own royal marriages Act.

I support the two main thrusts of what the Bill is trying to do, but I think that we will end up ruing its passage. That is not because I disagree with the principle of abolishing male-preference primogeniture so that women can inherit equally with men, nor because of the minor adjustment to the provision on those who marry Roman Catholics being allowed to continue in the succession. My problem with the Bill is that it does something very significant that I do not think the Government intend it to do. The Royal Marriages Act 1772 provided that an individual who was in line to the throne had to get consent from the monarch at the time of marriage. If the monarch refused to provide that consent, or the individual refused to ask for it, their marriage would simply become null and void. I do not think that any of us believes that anybody should be able to declare anybody else’s marriage null and void.

The new legislation that we are seeking to agree will have no effect on the validity of the marriage, but it means that the person will be removed from the succession. That matters because throughout the whole history of English Parliaments, Scottish Parliaments and Irish Parliaments, the succession has always been determined by Parliament, not the monarch. Parliament decided what should happen at the deposition of Edward II. In the case of Richard II, the decision was made by the shortest Parliament in our history—a one-day Parliament in Westminster Hall gathered by Henry Bolingbroke. One could argue that it was not a proper Parliament because Richard II was not present, but none the less the Commons, the Lords and the Church, gathered together, made the decision on who should be the new monarch.

[Michael Ellis]

May I suggest that Parliament will still make the decision, because it could intercede and put someone back in the line of succession if they had been excluded for this reason?

[Chris Bryant]

That is not in the Bill. Indeed, the Government have said that it is entirely a matter for the Crown, in the double sense of the monarch and the monarch’s Ministers, who might have a role in advising the monarch.

Incidentally, I would not want to be a monarch apart from Elizabeth with a “II” in my title, but when James II was removed, Parliament decided, through the Bill of Rights and then the Act of Settlement, to hand over a joint monarchy to William and Mary rather than to anybody else. Then, when the Stuart line was going to end with Queen Anne, Parliament decided how the succession should proceed. Again, when Edward VIII tried to abdicate in 1936, the abdication could be allowed only because there was a statute of Parliament the next day.

[Jacob Rees-Mogg]

Will the hon. Gentleman give way?

[Chris Bryant]

This is waistcoat-to-waistcoat business, isn’t it?

[Jacob Rees-Mogg]

The hon. Gentleman missed out the succession of Mary Tudor, when the Act of Parliament —the Third Succession Act of Henry VIII—was followed rather than the instructions issued by Edward VI.

[Chris Bryant]

That is absolutely right. It is interesting that we had gone through three Succession Acts, but again Parliament decided the process. Incidentally, exactly the same situation applied in Scotland. The calling of the first Scottish Parliament was prompted by a contested succession in Scotland on who the next monarch should be.

For the first time in our history, the monarch himself or herself will be allowed to decide whether somebody is barred from the succession by refusing to provide consent, without any reason given, at the moment that that person chooses to marry. We do not have a capricious monarch at the moment, but we have had plenty of capricious monarchs in the past, and I suspect that we will have a capricious monarch in future. At that point, we will rue the day that we passed the legislation in this form. I desperately hope that a good Bill is made better by their lordships. This is the kind of moment when one wants to vote both Aye and No, because it is a good Bill in principle but a bad Bill in its detail.

19:44

[Mr Wallace]

I had no intention of contributing to this thin Bill’s passage through the House of Commons. In fact, it was only last week, one lunchtime, that I looked at it and decided to do so because I could see a problem with it. Of course, it was also because I wanted to help my coalition partner, the Deputy Prime Minister, and to give him the same easy time that he gives us, by making sure that the Government were given some helpful hints on the Bill during its passage. I agree with the principle of what we are trying to achieve and totally support the Government’s policy on this. However, experience from my previous life, and, I suppose, from my current life—I should declare that I am a member of the Queen’s Bodyguard for Scotland—means that I recognise that there are many foibles in modern and historical changes to the constitution. Making changes is easier said than done.

Wanting to be helpful in last week’s debate, I raised some concerns about the other titles and assets that accompany the sovereign. It is easy to talk about changing the succession without realising that our monarchs are more than that—they have other titles, such as the Duke of Rothesay, the Earl of Carrick, the Duke of Lancaster and the Duke of Cornwall. Some are merely titles without asset, while some are titles with asset, but they are all very important. They are regulated by more people than just one Government lawyer. I am surprised by the lack of consultation with key people such as the Lord Lyon King of Arms in Scotland and the Garter Principal King of Arms in England. These people monitor and, in effect, register letters patent to make sure that the power and extent of a title is upheld. This is not as easy as saying that we can change the succession and everything else will fall into line. I am therefore hoping for clarification from the Government.

My right hon. Friend the Member for Carshalton and Wallington (Tom Brake) gave the example of one or two Scottish titles that can follow through the female line. That is absolutely correct, as in the case of titles such as the Countess of Mar—one of the oldest titles in Britain. However, my right hon. Friend missed out the fact that that takes place only when there is no male heir as a sibling; when there is, they will get the title under the rule of primogeniture. We have heard the example of what would happen if the Duke and Duchess of Cambridge had a son and an older daughter, and I assume that the son would be likely to continue to inherit the other titles.

The Duchy of Lancaster and the Duchy of Cornwall are titles that come with asset, and they have a very significant impact. I understand the Government’s line, and I accept that it is likely—almost certain—that the monarch will continue to enjoy the incomes from those assets, but not necessarily the assets themselves and control over them. A situation could arise whereby the Duchy of Lancaster’s assets, which are considerable— the latest valuation is over £400 million—reside with the son, but the income is diverted to the monarch. That is fine the first time round, but the second time round, when the son of the son has the asset, the asset will get further away from the title, as will the control that may go with it, and the process will continue.

We need to know that the Government—I urge the other House to make sure that this is the case—have consulted the deeds patent under which these titles are issued, and the duchy chronicles and charters of the 15th and 16th centuries that set out what conditions are attached to the Crown. If we do not get this right, it could come back to haunt us at a later date. I urge the Government to make sure that clarity is provided to the other place by the time the Bill arrives there.

19:49

[Miss Chloe Smith]

With brevity and the leave of the House, I simply want to confirm that I would be happy to expand the explanatory notes as the Bill goes to the other place. I also want to suggest that everyone in the House—

[Wayne David]

Will the Minister give way?

[Miss Smith]

Will the hon. Gentleman not allow me the pleasure of simply saying, “God save the Queen”?

[Wayne David]

I have no objection at all—the Minister can say it again if she likes.

My hon. Friend the Member for Rhondda (Chris Bryant) mentioned how the six people nearest in line to the throne could lose their place if the Queen did not consent to their marriage. It is important to say on the record that the explanatory notes state clearly that that would be the case; in fact, it says so in the summary on the front page. I do not think, therefore, that it is fair to say that the issue has not been referred to properly in the House—it has been referred to in the documents and in last week’s debate.

It is also important to remember that we are talking about a constitutional monarchy that has a close relationship with the Government of the day. I am sure that a monarch would not take any action if they believed that, in doing so, they would be acting incorrectly in the background.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Thank you for that short intervention.

[Miss Smith]

I thank the hon. Gentleman for his intervention and commend the Bill to the other place.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Business without Debate

Monday 28th January 2013 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)).

Public Bodies

That the draft Public Bodies (Abolition of the Disability Living Allowance Advisory Board) Order 2013, which was laid before this House on 15 October 2012, be approved.—(Mr Evennett.)

19:51

Division 144

Ayes: 267

---

Conservative: 226
Liberal Democrat: 41

Noes: 165

---

Labour: 159
Plaid Cymru: 3
Scottish National Party: 3
Social Democratic & Labour Party: 1

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Public Bodies

That the draft Public Bodies (Water Supply and Water Quality Fees) Order 2012, which was laid before this House on 22 October 2012, be approved.—(Greg Hands.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 18),

Regulatory Reform

That the draft Legislative Reform (Hallmarking) Order 2013, which was laid before this House on 26 November 2012, be approved.—(Greg Hands.)

Question agreed to.

Committees

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With the leave of the House, we will take motions 5 and 6 together.

Ordered,

Communities and Local Government

That Stephen Gilbert be discharged from the Communities and Local Government Committee and John Pugh be added.

Scottish Affairs

That Fiona Bruce and Iain McKenzie be discharged from the Scottish Affairs Committee and Mrs Eleanor Laing and Graeme Morrice be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Basketball (Funding)

Monday 28th January 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

20:04

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

I am delighted to open this evening’s Adjournment debate on the funding of basketball in the UK. I will begin by declaring my interest as the chairman of the British Basketball League Foundation, a not-for-profit organisation that co-ordinates and delivers national community basketball programmes.

The catalyst for my requesting this debate was the recent decision by UK Sport to cut the funding of basketball for the Rio 2016 Olympic games to zero. I also want to demonstrate how basketball is hugely underfunded in the UK.

In terms of grass-roots participation, basketball is incredibly popular. In the most recent Active People survey conducted by Sport England, it was estimated that just short of 153,000 people in the UK play basketball at least once a week. Basketball is the fifth most played team sport in the country and the second most played sport among 11 to 15-year-olds. In the key target area of 16 to 25-year-olds, where participation rates in all sports drop off at their fastest, basketball holds on to the highest levels of interest of all team sports.

Equally important is the demographic make-up of the sport’s participants. More than 40% of the 153,000 weekly players are from black and minority ethnic groups.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Does my hon. Friend recognise that basketball is played principally in conurbations, which is incredibly important because we need to get young people to play sport?

[Stephen Mosley]

My hon. Friend is correct that basketball is played mainly in urban areas. In fact, among the lowest socio-economic groups in the country, basketball is the most popular sport.

[Oliver Colvile]

Does my hon. Friend also recognise that the Plymouth Raiders, who are based in my Plymouth, Sutton and Devonport constituency, are one of the principal basketball teams in the country?

[Stephen Mosley]

The Plymouth Raiders are an excellent basketball team. Looking around the Chamber, I can see representatives from Leicester, Newcastle and, of course, from Cheshire, so basketball is well represented here this evening.

Participation levels in basketball are very good, but we should be doing all that we can to ensure that they are exceptional.

[Jonathan Ashworth (Leicester South) (Lab)]

The hon. Gentleman talked about basketball’s popularity in the black and minority ethnic community and the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) mentioned urban areas. As one would expect, therefore, basketball is incredibly popular in Leicester, which has the excellent Leicester Riders. They have told me in recent days that the decision to cut the funding is absolutely wrong. I hope that the Minister listens to the representations this evening and announces a U-turn.

[Stephen Mosley]

When the Minister replies shortly, I know that everyone in the Chamber will be looking at him with expectant eyes, hoping that he will help.

One would assume that with so many people playing basketball and given the demographic make-up of the sport’s participants, Sport England would be backing basketball with all its might. However, that assumption is misplaced. In the past month or so, when confronted about the decision to cut funding for the Olympics team to zero, the Minister has been keen to stress that England Basketball has received a substantial sum from Sport England to support the grass-roots game and talent development.

For the coming four years, Sport England has allocated £6.8 million to community programmes and the development of talent through the youth ranks. That sounds like a lot of money. However, the best way to understand the figure is to break it down into per person funding. Based on Sport England’s statistics, there is just £12 a year for each person who plays basketball once a week.

Although it is not my intention to pit sport against sport, the only fair way of judging that figure is to compare it with Sport England’s funding of other sports. Hockey, for example, has 109,000 weekly participants, yet the sport will receive £12 million over the same four years, or, using the same formula, £28 a year per player—more than twice the amount allocated to basketball. Netball has 159,000 weekly participants and it will receive £25 million, or £39 a year per player, which is more than three times the amount allocated to basketball. Finally, rugby league has 51,000 weekly participants and £17.5 million funding. That is £86 a year per player—seven times the amount allocated to basketball.

Given that basketball is the most popular team sport among BME and lower socio-economic groups, and that it carries the most interest among Sport England’s key 16 to 25-year-old market, it seems incredible that such a relatively small amount of funding is available from Sport England.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The hon. Gentleman makes a compelling argument about funding. Does he agree that not only do 16 to 25-year-olds—and beyond—benefit from investment in this sport, but children do as well, through the hoops for health programme? That is having a massive impact on school children and getting them interested in basketball from a young age, as well as teaching them about healthy lifestyles, not smoking and the other health benefits of sport.

[Stephen Mosley]

The hon. Lady is totally correct. As basketball is so easy to play, it can be played anywhere on any bit of tarmac. It is very popular among young kids and is, I think, the second most played sport among 11 to 15-year-olds. It is easy to do, kids want to do it, and basketball teams across the country have a good reputation for going out, encouraging people to get involved, and targeting those who might not necessarily get involved in sports other than basketball.

However, if the game is to prosper in future, as it has the potential to do, a fairer funding settlement must be agreed, and I urge the Minister to meet representatives of Sport England to discuss the inherent inequality of their decision. I would also be grateful for his thoughts on whether £12 a year per player is indeed a fair settlement for basketball.

Although funding at grass-roots level is integral to any sport’s long-term success, the structure and funding of the elite game is of equal importance. In December, UK Sport announced its funding allocation for the Rio 2016 Olympic games. After receiving £8.6 million for London 2012, the GB team has not been allocated a single penny for Rio. After making incredible progress over the previous funding cycle, the rug has been pulled from under the British basketball team. Unless that decision is reversed, elite British basketball will once again have to start from scratch.

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

The hon. Gentleman is making very good points. When I visit primary schools in my Newcastle constituency, the hoops for health programme mentioned by my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) is often spoken about with great praise, admiration and enthusiasm. Does the hon. Gentleman agree that being able to see top-class players such as those who play for the Newcastle super Eagles is important? It is even more important to see such players at the Olympics, as that would help inspire young people in my constituency and across the country.

[Stephen Mosley]

The hon. Lady is right. Over the past two or three years some world-class players have come forward—probably the best basketball player in the world at the moment is a Brit, and I will come to him later.

[Oliver Colvile]

Does my hon. Friend recognise that one great thing that took place last year was cage cricket? Sir Ian Botham came along and showed us how we could do that sport. We should be doing exactly that sort of thing—by taking small cages we could end up playing these games in places such as inner cities.

[Stephen Mosley]

Again, my hon. Friend is correct. At the moment, there are schemes in which temporary basketball pitches are put up in town centres so that the game can be played in the middle of the town. I understand—I am looking at the chair of the all-party group on basketball, the hon. Member for Washington and Sunderland West (Mrs Hodgson)—that in summer people will be able to go to Trafalgar square and do some hoops—[Interruption.] Yes, shoot the hoops. The basketball game is very conscious of that, and it is a good way of getting young people involved and enthused by the sport. Our problem is that UK Sport funding is based on what it considers to be each team’s realistic chances of gaining a medal or a top eight finish in Rio or the 2020 games.

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

The hon. Gentleman is being generous with his time. Is not the real challenge that the formula for deciding funding has been an overwhelming success, and changing it might end up jeopardising some of our success in other sports?

[Stephen Mosley]

My hon. Friend has a point. I can be fairly relaxed about taking interventions because I think I can stand here until 10 pm tonight, although I reassure the Minister that I will not take quite that long. I have reservations about the funding process, on which I know the Minister has recently commented. A couple of weeks ago in The Sunday Times he expressed doubts about how the current funding process works; going for medal positions and the top eight in the Olympics may not be the right way forward. I do not argue that the whole process should be scrapped and restarted for all sports, but I do argue that with the right funding, the Great Britain basketball team has every chance of a top eight finish at Rio, and even greater potential for success in 2020.

[Mr Leech]

I thank the hon. Gentleman for giving way a second time. Does he agree that there may be scope for looking at team sports, as opposed to individual sports, slightly differently? Individual sports currently get an awful lot of the funding.

[Stephen Mosley]

The competitive situation of team games at the Olympics tends to be more difficult in terms of the number of people who play. Every country in the world plays basketball, but some of the more successful sports in the UK have a more limited pool of participants. Perhaps there are arguments for looking at team sports slightly differently from individual sports. My point, however, is that Great Britain basketball has a fantastic opportunity in 2016 and 2020. Will the Minister explain how UK Sport has assessed the Great Britain team’s potential for success in Rio and beyond? Who was consulted during that assessment, and what reasons were behind the conclusion?

[Oliver Colvile]

Does my hon. Friend recognise that Plymouth college—which, I discovered the other day, would be 49th as a country in numbers of gold and Olympic medals—is willing to offer some of the state schools just outside or in my constituency the opportunity to use some of their people, including their basketball people? Should we not be encouraging private schools to go off and help state schools in that way?

[Stephen Mosley]

My hon. Friend is correct. Basketball is a game that includes everybody and more people should get involved. Given what he says, it sounds as if Plymouth college is doing a fantastic job to get people into the game and playing sport, which I am sure is what we in this Chamber all want.

My argument about UK Sport and its decision to remove funding from basketball is that the facts do not add up. Since UK Sport funding for basketball was initiated, both the men’s and women’s teams have gone from the bottom rung of the international ladder to being some of the most respected teams in Europe. At London 2012, the men were one basket away from achieving their UK Sport quarter final target, and they recorded an historic 32-point win against China, which was ranked 10th in the world. They lost by just one point to eventual silver medallists, Spain, and they almost beat Brazil, which finished fifth overall at the Olympics. These results were unthinkable just four years ago, and demonstrate not only the huge progress that has been made, but the potential for basketball in the future.

In addition to their collective achievements, the number of individual star talents in the GB team is growing all the time. Chicago Bulls superstar Luol Deng is one of the greatest sports stars in the world and one of the hugely successful British players currently plying their trade in the greatest league in the world, the NBA. He has written to the Prime Minister to protest against UK Sport’s decision, and I hope that the Minister has seen his letter. What message are we sending to young British basketball players who aspire to similar greatness if we do not fund our national team?

[Sir Bob Russell (Colchester) (LD)]

My hon. Friend is coming to the crux of the matter. If we are to encourage young people, in whichever sport, we need a broad-based pyramid to get the elite players at the top. Without that pyramid, boys and girls will not participate.

[Stephen Mosley]

My hon. Friend is correct. I am not talking only about the men’s team, but about the women’s team and the youth team.

The women’s team was the youngest team at the Olympics. It almost beat the silver medallists France, and was narrowly defeated by fourth-placed Russia. That is stunning progress from a team which came together only a few years ago. I also want to quickly mention the British youth men’s team, who just last week won bronze at the Australian youth Olympic festival, demonstrating the strength that we have coming down the pipeline.

For UK Sport to categorically state that neither adult team has any hope of medals is hugely disappointing. It ignores the enormous progress that has been made over the previous one and a half funding cycles, and it consigns British Olympic basketball to the scrapheap for the foreseeable future. How is the British national team expected to progress further and to bid for future funding if UK Sport is removing any chance of success in the short and medium term?

Furthermore, the Minister’s recent assertion that the Great Britain basketball teams are unlikely to qualify for either Rio or the 2020 games also looks to be wrong. For example, the men’s team has qualified for the 2013 European championships, and because it has risen significantly in the world rankings over the past 12 months it has avoided a number of the higher ranked teams in the group stage draw. It now has every chance of qualifying through to the next round. As a result, Rio qualification is a real possibility, and choosing to write the team off at this stage would be a gross miscarriage of justice.

I also understand that the Minister has expressed some concerns about the administration of the game and the ability of the governing body to deliver. To my knowledge, and to the knowledge of British Performance Basketball, there has never been any past criticism of its performance, structures or business model. I am sure that the Minister will understand the concern felt by British Performance Basketball, so before it makes any official appeal to UK Sport, it would be grateful to know if those comments were in fact directed at it, and if so, what it has done wrong and what it needs to do to improve. I would be very grateful if the Minister could cast some clarity on this very important matter.

I know that the hon. Member for Washington and Sunderland West would like to make a brief contribution to this debate, and I hope that I have left her sufficient time to do so. An hour and 40 minutes should be enough —[Laughter.] I would like to stress that, as I am sure the Minister will appreciate, the breadth of these arguments means that they warrant far more attention than the time afforded to them in an Adjournment debate. I hope that he will consent to meet representatives of British basketball as soon as possible, so that they can gain some clarity on what exactly they need to do in the future. There are a lot of unanswered questions and a great deal of confusion surrounding these decisions. The whole of the British basketball community would be very, very grateful for the Minister’s support in the crucial weeks ahead.

20:24

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

I congratulate the hon. Member for City of Chester (Stephen Mosley)—I want to call him my hon. Friend—on securing this important debate. We work together closely on the topic of basketball. I am the chair of the all-party group on basketball, and he is my excellent vice-chair. I am also a trustee on the board of the British Basketball League Foundation, which he chairs. I thank other hon. Members from both sides of the House who are members of that fantastic all-party group for showing their commitment to the cause and being here in force tonight.

I endorse everything the hon. Gentleman said and will not seek to repeat the many excellent points he made, even though we have the time available. Needless to say, I too am deeply disappointed by the decisions, both new and historic, that have led to this debate. Basketball is important, both in my constituency and across the country, because it reaches a demographic that few sports can. It is dynamic and accessible, and its natural ties to urban culture give it a street credibility others sorely lack. It is no wonder that it is as popular as the hon. Gentleman described. Basketball was consistently one of the most viewed events at the Olympics and Paralympics; 7,500 fans turned out to see the Newcastle Eagles, my local team, play in the BBL cup final earlier this month; and just the other week, 17,000 people packed out the O₂ arena to watch an NBA game, which by all accounts was fantastic.

[Catherine McKinnell]

I, too, congratulate the hon. Member for City of Chester (Stephen Mosley) on securing the debate. I had not realised that we had a little extra time, so I tried to be as quick as possible with my previous intervention—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I hope the hon. Lady will be quick again.

[Catherine McKinnell]

I will try, Mr Deputy Speaker.

I have attended a few of the Newcastle Eagles’ games, and I am sure that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) will share my enthusiasm for the amazing family-friendly atmosphere at them. Everybody should experience it as it is quite something.

[Mrs Hodgson]

That is an excellent point, and I am sure that other hon. Members who are here to support basketball will agree with my hon. Friend. I was at one of the matches that she attended with her young children, and they were running around and thoroughly enjoying the game in a very safe environment. Anyone going to basketball for the first time falls in love with it, because it is so exciting and fast. I know that my appearance now does not give the impression of an elite basketball player, but in my youth I played at school with some enthusiasm and have loved it ever since. It is very exciting to play and to watch.

[Chi Onwurah]

I, too, congratulate the hon. Member for City of Chester (Stephen Mosley) on securing the debate. I wish to add my voice to that of my hon. Friends. I have also attended the matches of the Newcastle super Eagles and I have been to St James’s Park to watch Newcastle United play. The family atmosphere at the basketball matches is striking and visitors of all ages are welcomed and supported. This is made possible in part because of the elite players, and they need to be supported to the Rio Olympics and beyond.

[Mrs Hodgson]

As we have heard, basketball is an inclusive and accessible sport that is often found at the heart of some of the best community projects. The hoops for health programme run by the Newcastle Eagles in my constituency and across the north-east, with professional players encouraging young people to get active, has no funding from Sport England. Sport England does not target that age group, despite the recent observation from Baroness Campbell, the chair of UK Sport, that 20% of pupils aged five are overweight. The statistics get worse as those children get older.

[The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)]

I am sorry to interrupt the hon. Lady, and clearly I will be winding up the debate. Just to be clear, Sport England is not allowed to intervene that far down the process. It is tied by the lottery additionality rules, so there is no way it can invest: it would be against the law and it would break all the lottery rules.

[Mrs Hodgson]

I thank the Minister for that clarification. Basketball is not an established sport, so it is fair to say, as the hon. Member for City of Chester described, that it tends to be at the back of the line when funding gets divvied up. In terms of the elite level, the House has also heard about the massive strides made by Great Britain’s men and women basketball teams within just one Olympic cycle. I share his doubts about a process that could write off their hopes for 2016 on that basis. I hope the Minister will be able to shed some light on that.

[Catherine McKinnell]

I thank my hon. Friend for giving way again; she is being very generous. On the hoops for health programme, I appreciate that Sport England does not give funding for that age group. Does she agree, however, that Sport England should recognise that the funding and effort that goes in at that younger age produces the athletes of the future, and that without it they cannot become elite players?

[Mrs Hodgson]

That is the key point, which I will move on to. We were promised that the London Olympics would inspire a generation, but which part of that generation are we going to inspire? That question matters because how we distribute that money for sport—whoever is distributing it and under whichever rules—says a lot about what sort of society we want to be. UK Sport’s no compromise policy inadvertently, yet knowingly, punishes team sports for being accessible, as they are more globally competitive.

[Hugh Robertson]

rose—

[Mrs Hodgson]

If the Minister could hear my point out. If a sport is more globally competitive, the medal hopes for Team GB will be lower. I applaud the successes of sports such as rowing, sailing and equestrian—obviously, we all do—but we need to find a balance between rewarding “easier” success on a global level and taking into consideration the wider societal positives that accessible team sports, such as basketball, provide to our local communities.

[Hugh Robertson]

I am terribly sorry, but I cannot let the hon. Lady get away with saying that it is easier to win a gold medal at rowing or sailing than it is for basketball. [Interruption.] She did definitely say that we should not fund sports that are easier to get a medal in. She should see the sheer exertion that young men and women go through to win a rowing gold medal—they are up at six o’clock every morning, day in, day out. I appreciate her concerns, but it is unfair to run down other sports on the back of them. She did say that.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are in danger of straying off the point. The debate is purely about funding for basketball. I understand that there will be examples, but I think we have taken the example a little bit beyond where we should be. I am sure that the hon. Lady will come right back on the subject of funding for basketball.

[Mrs Hodgson]

The wider point I was making was about the global accessibility of basketball. I was not decrying any sports, but globally there are fewer people playing a sport such as clay pigeon shooting, so it may be easier, in the sense of numbers, to win a medal at that sport—there are not as many competitors, because it is not as accessible. Perhaps I did not explain it correctly.

[Mr Deputy Speaker]

Order. Maybe I could be helpful and say that we are not comparing like with like. That is the danger in where we are going. I want to get back to where we should be.

[Mrs Hodgson]

Thank you ever so much, Mr Deputy Speaker. You certainly made the point I was trying to make and I thank you for that.

I admit that it may be a difficult task to get a medal in Rio but, when we look at how far basketball has come in just six years, it is by no means impossible. More importantly, how much will not having at least a decent showing in Rio further damage a sport that is also suffering from cutbacks in grass-roots and talent funding?

All we are looking for is fairness: fairness for the young boy or girl in Sunderland, Newcastle, Merseyside, Leicester, Chester, Plymouth and so on who loves basketball because it is of the cities and of the street. It is cool and it is urban, and they idolise basketball superstars across the world from other countries because our national team is not as prominent as it should and could be.

I would like to end by quoting Luol Deng’s letter to the Prime Minister, which the hon. Member for City of Chester mentioned. With the indulgence of the House, I shall read it into the record, seeing as we have a few minutes to spare:

“Dear Prime Minister,

I am writing to you following the news that we, as Team GB, have had our funding completely cut which has been deeply upsetting and confusing to say the least.

My initial reaction was to try and understand why and how if by any means I could help to change this. The UK has given so much to my family and I, the honour and pride I’ve felt to play for Team GB over the last 5 years has been something words really can’t explain. Looking back to when we started, it’s incredible how far the team has come; so many people have worked too hard for this to happen now.

I truly feel like we are starting to put British Basketball on the map and we are now being taken seriously on the world stage. Taking myself and the other guys out of the equation, what about the future generation? Do not underestimate the fan base that this sport has in the UK. It’s a sport that kids can relate to and a sport that should be easily accessible when all you need is some concrete, two hoops and a ball! We all heard about the ‘legacy’ that London 2012 was going to bring to sport in the UK and I refuse to sit back and let that legacy be completely demolished for basketball. I along with thousands of other people involved with the game have put too much in and care too greatly to let this happen.”

[Oliver Colvile]

Does the hon. Lady recognise the importance of media interest? I must declare an interest in that my brother is a cricket commentator for Sky TV. That broadcaster has invested a lot of money and effort in grass-roots sport, especially among youngsters, and, in places such as Plymouth, which has a brilliant cricket club, has done an enormous amount of very good work.

[Mrs Hodgson]

I agree, and I hope that media interest will be raised by this debate.

The hon. Gentleman’s intervention came in the middle of Luol Deng’s letter, so I shall return to it. It will look rather odd in Hansard, I am sure, but if you will bear with me, Mr Deputy Speaker, I will continue:

“My UK Foundation aims to help basketball, to help people not only get into the sport but to also help those more capable players develop their skills and achieve their goals of becoming a professional player. The sport of basketball is a pathway, a pathway that teaches so many valuable lessons on and off the court, how are we supposed to motivate these kids to carry along their journey when there’s now nothing at the end? No Team GB, no Olympic dream, no goal. You’re allowing a sport to be greatly harmed; a sport that can bring so much to so many and I won’t accept it. The sport needs more input from other resources I totally agree, but then let’s force the sport as a whole to live up to its promises and its potential but we need this funding in order for that to happen. As I said I get to see first hand what this sport can do for kids in the UK and it’s too valuable to just be chucked away.

There is a petition being circulated, which I have signed”—

I have signed it, too—

“and will encourage as many people as I can to do the same. I’ve been told about and shown examples of other letters that you and other members will have received detailing all the facts and figures relevant to the growth of the sport, of which there are many, but I wanted you to hear first hand from someone who came through the grass roots basketball system and from someone who knows what talent the UK has to offer in the sport of basketball. I also want to share with you one fact that I was given when this news came out—basketball participation for 11-15 year olds is at 27% which is 2nd only to football, this is the time to be supporting such a statistic not wiping it out.

I have asked that this letter also be sent to everyone connected to the decision and next week’s appeal with UK Sport. Again, too much has been achieved for this to happen.

I very much look forward to hearing your thoughts.

Kind regards,

Luol Deng”.

That is quite a powerful letter from a world-famous sportsman. I hope that the Minister will give back to everyone involved in basketball in Great Britain their Olympic dream.

20:39

[Sir Bob Russell (Colchester) (LD)]

Very briefly, I would like to put on record my appreciation for my constituents Mr John Lloyd and his son Mr Mark Lloyd, who over the years have contributed nationally and locally to the development, growth and success of basketball. On their behalf, I hope that they will be able to continue doing that.

One of the great delights in last year’s Olympics was the breadth of sports in which Britain won medals. We won medals at sports in which, only a few Olympics back, Britain’s participants did their best, but never came within a whisker of winning a medal. It is a credit to the Olympic movement in this country that that breadth of sports has developed.

Let me finish on the point I raised in my intervention on my hon. Friend the Member for City of Chester (Stephen Mosley). To my mind, the Olympic legacy is the participation of as many young people as possible in sport. We all know that basketball, with a court set up in the corner of a playing field or across the full pitch, attracts youngsters in numbers, particularly in urban communities. If there are international and national figures whom they can look up to and aspire to be, the pyramid of participation will widen. Whatever the sport, the wider the base of the sporting pyramid, the better chance we have of seeing the pinnacle—the elite athlete—come through. Therefore, the withdrawal of funding is short-sighted. We only have to compare our record in the London Olympics with what happened five, six or seven Olympics back to see how dramatically Britain’s sporting success has increased across the spectrum. To a large extent that is about funding, as well as the enthusiasm of the various sporting organisations. I hope it will be possible for those responsible for funding basketball to realise that mass participation is part of the Olympic legacy for our young people.

20:39

[Mr George Howarth (Knowsley) (Lab)]

I congratulate the hon. Member for City of Chester (Stephen Mosley) on initiating this debate, which is timely and important for basketball in this country.

I should declare several interests, none of which is remunerated. First, I am a trustee of the British Basketball League Foundation, which the hon. Gentleman chairs. Secondly, I am a member of the all-party basketball group, which my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) chairs. Thirdly, I am a supporter of the Mersey Tigers—which was a great thing to do two seasons ago, as they won every bit of silverware in sight. Sadly, they have since been less successful, mainly as a result of financial difficulties. Last but by no means least, my grandson Luke plays basketball for his school and for a non-school side in the area. In fact, he played earlier this evening—unfortunately I have no idea what the outcome of the game was, because he has not sent me a text. I therefore have a number of reasons, both personal and to do with my involvement with various bodies, to support basketball.

I want to make three points—I will try to be brief. The first is a general point—it has been made by several hon. Friends, as well as the hon. Member for City of Chester—about the impact that the sport can have on specific communities. Basketball is a very inclusive sport. People do not have to have a lot of expensive equipment to play basketball or be associated with a club that might have difficult membership requirements; nor does it require massive support—it does require support, but not massive support—at the grass-roots level.

A further point that has been made is that young participants, male and female, gain great health benefits from their involvement in the sport, no matter what level they play at. A number of health authorities of one kind or another have recognised that and have supported clubs that have been successful in building up grass-roots support. If we are to be successful in basketball nationally and internationally, the first requirement will be to build up that grass-roots support. Nothing comes from nothing, and we will succeed at elite level only if we can get youngsters from the ages of eight, nine and 10 onwards to participate in the sport. That model has worked well in other sports, and it is no different for basketball, except that basketball reaches parts of the community that other sports might not.

That is not just my opinion as a Member of Parliament or as a grandfather with an involvement in the sport. If we look at the successful clubs—particularly Leicester and Newcastle, but also the Cheshire Jets—we see that they are sustained by the activity that takes place at grass-roots level, especially among young people. That is particularly important, and I am sure that the Minister will agree that that is the kind of successful model that we want to build.

[Stephen Mosley]

The right hon. Gentleman will probably be aware of the problems that the Cheshire Jets had, and of the launch of a new club, Cheshire Phoenix, in November. The new club has real community support: it is community owned and community based, and it took a real team effort from the entire city and county to get it going. It is a brand new club with huge aspirations and a huge amount of support. The right hon. Gentleman mentioned the support that those other clubs have, but Cheshire Phoenix has it as well.

[Mr Howarth]

I must inadvertently have referred to the team as the Cheshire Jets, because I was aware of the developments that had taken place. I wish the Mersey Tigers well, but I hope that Cheshire Phoenix does well too. We are all from more or less the same part of the world.

The successful clubs demonstrate the fact that, with vibrant grass-roots support, it is possible to build a successful professional club and that, beyond that, we can build a successful national sport and perform well internationally. That brings me to my point about the decision, based on the estimate of our Olympic prospects in Brazil, which I think was wrong. I do not intend to labour the point, but I hope that those responsible will revisit the subject, because if they do, they will recognise that the route to qualifying for Brazil includes European qualification, and that there is a demonstrably strong chance that the UK team could qualify by going down that route. The team’s potential for qualification has been underestimated. I understand that the issue of governance has also been raised, but I have yet to receive any explanation of why that might be the case. The Minister and I had a brief discussion about this last week, and I hope that we will be able to find out more about what is at issue. There might have been a misreading of the true situation in the sport.

I know that the Minister cares passionately about sport, and that he is a fair-minded man. I also know—because he told me so—that his powers of intervention are limited in these matters. I accept that, but he does have considerable influence and I hope that he will use that to question the basis on which some of those decisions have been made. I also hope that, in a quiet and unassuming but effective way, he will be able to encourage those responsible to reconsider their decision as a matter of urgency.

20:50

[The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)]

I congratulate my hon. Friend the Member for City of Chester (Stephen Mosley) on securing the debate and on the manner in which he presented his case. This was actually going to be the third thing I intended to say, but it is probably worth saying it now. I shall proceed with certain amount of caution tonight. The appeal is due in front of the UK Sport board—on Wednesday, I believe—but that, in any event, is not the end of the process, as there are a number of further hurdles over which progress could be made. If the terms of the appeal are right—many points made tonight will, I suspect, form part of the appeal—it strikes me that there will be a case that will provoke some further thought. Let me go no further than that. Tonight’s debate does come at a slightly delicate moment.

I have a couple of other points to frame my remarks before I answer some of the specific questions raised. First, it is important—I hope hon. Members will forgive me for making this point—to frame this debate against the fact that this system works. This country’s elite performance system is the envy of almost every other Olympic system in the world. Back in Sydney, we were 10th in the medal table with 28 medals; here we are in London, 12 years later, third with 65 medals. The Australians would kill for this sort of system, as would many others. People in this country are looking at how we did it and trying to work out the processes we adopted. I know from talking to many Australians that they feel they will have to be much tougher and come far closer to our no-compromise approach if they are to catch up some of the ground they feel they have lost.

I was talking to a forum of performance directors this morning. Knowing that I would be responding to this Adjournment debate, I said, “Let me road test this on you. Have we got this right? Have we gone too far, and do we need to crank it back?” They said, “Absolutely not.” They felt that the way the funding awards were made this year was the fairest and most robust method they had been put through. These were performance directors who had done this for a number of years, and they had nothing but praise for the way in which they had been guided through the system by UK Sport and the results that had been reached. I absolutely understand the passion expressed about a sport for which many Members care deeply, but that needs to be balanced with the fact that the performance system for a country of our size has just produced 65 medals and third place in the Olympic medal table. That is an extraordinary success by anybody’s standards.

Let me deal quickly with a couple of other points. The right hon. Member for Knowsley (Mr Howarth) is absolutely correct: I can set the overall strategy for UK Sport, and indeed I do, but it is not up to me to make individual funding decisions within that, because about two thirds of the money that goes to any of these funding awards is lottery money. As anyone who has been in this House for any length of time will know, that is not for Ministers to direct.

My other point is that funding, although I would wish it otherwise in this area, is not inexhaustible. We have done very well to increase the overall budget for Olympic and Paralympic sport by 11%—the only host nation ever to achieve that—and for the Rio cycle, but that does not mean that we can avoid taking tough decisions. This has been one of them. Having been through the decision-making process with UK Sport—it took me through it and Sport England was there, too, so we could look at both funding settlements together—I know it has a chart, and the question is about the point at which we slice up and down the funding pole. That is done by UK Sport on the basis of medal success in Rio.

Let me run through the various issues raised by my hon. Friend the Member for City of Chester. He asked whether I had met UK Sport, and indeed Sport England. I see both chief executives every month, and I spent close to three hours with both organisations going through the two funding awards.

Although I take on board the comments that have been made, UK Sport made the decision on the basis that basketball had failed to demonstrate a realistic chance of qualifying for Rio 2016, or medal potential for 2020. Basketball may be on a fast improving pathway, but the men’s and women’s teams won only one of the 10 games that they contested at the London Olympics, which is not a great performance record.

How are such decisions made? GB Basketball puts a submission forward that goes to UK Sport, and it is then considered by a performance panel with independents on it. Each and every aspect is considered. Other performance directors I spoke to today said that was the best iteration they had been through in a number of cycles. The process is incredibly detailed, and considers not only medal potential for Rio but for 2020. For Rio, the line was drawn at a point where the basketball team needed to medal, which might explain the slight discrepancy in relation to qualification.

On the governance structure, it might be easier to nail down the issues in writing. I have been involved in sport as a politician since 2004 when the Conservative party was in opposition. Throughout that time, basketball has been a frustration because it has obvious and enormous potential, as many of the contributions to this debate have acknowledged. It is a sport that can reach into communities in a way that some other sports cannot, yet it somehow fails to catch alight. That may be because people who play basketball do not always respond to the active people survey, so participation levels are underplayed. There may also have been weaknesses in the structure of the sport.

Netball is a fantastic example of a sport that, from difficult beginnings, has increased its participation base extraordinarily. I have visited schemes run for school- gate mothers in places such as Leicester, to try to get more young women back into the sport. As a result, netball has been rewarded with a considerable increase in funding.

The key question is: what does basketball need to do? I have not yet met him, but I am told that there is a very good new independent chairman. A huge amount of fuss and bother is what impresses people least, so the best thing he can do is take a long, hard, clinical look at the sport of basketball—I hope that many of the hon. Members who have shown enthusiasm for the sport in the debate tonight will play a part—and look at team sports that have tackled this situation successfully. He should look at how cycling has put half a million people on its performance base, and at what netball, a team sport, has done. There must be some transferable lessons from netball to basketball. There is enormous performance-based expertise, which has driven this country from 10th in the medal table to third, so he should make use of the experts in academia and UK Sport, and turn the sport inside out.

There is this hope: although the initial funding decisions have been made and announced, there is an appeal process, and if basketball presents the right case, it will have a perfectly good chance of securing funding. This is not the end of the story, and if the basketball team starts to perform and show that it is likely to qualify, and has the chance of a medal in 2016 or 2020, wherever that turns out to be after the IOC decision this summer, there will be the opportunity to fund it.

I leave the House with the story of gymnastics. I have seen representatives of that sport recently. Its funding was cut—almost completely removed—after a disastrous Olympics in Athens, where the competitors were basically washed out. Gymnastics is a different sport from basketball, but its position is not entirely different. Those people went back and engaged in a long “dig-out” to discover what was required to ensure that the young athletes whom we all see in gyms in our constituencies could turn into Olympic medal-winners in the future. They turned the sport inside out, and established a really tough performance-based culture. The result was plain to see in London, where gymnastics was not only one of the great successes, but arguably one of the most unexpected.

As for the social aspect, I entirely accept the point about basketball’s social reach. However, we do not confine our funding to sports that have a reach of that kind, such as athletics, cycling and, in particular, boxing, which was one of the great successes of London 2012 and which has a huge reach into deprived communities in inner cities. I can reassure Members that UK Sport makes its decisions on the basis of performance.

[Mr George Howarth]

I have been involved—not as a politician—in amateur boxing for a number of years in my constituency. In many ways the comparison made by the Minister is a good one, but the difference between amateur boxing and basketball is that most local clubs are long-established and have a lengthy tradition on which to draw, whereas basketball is in the process of getting there, but is not there yet.

[Hugh Robertson]

That is a fair point. I suspect that it backs up the one I made earlier about the need to take a long hard look at the structure and get it absolutely right. Incidentally, I hope that the right hon. Gentleman’s grandson won his game, and that, if he did, the right hon. Gentleman will convey all our best wishes to him.

Let me end where I started. I thank the hon. Member for City of Chester on initiating the debate, and congratulate him on his speech. I also congratulate all the other Members who have spoken.

I want sport in this country to be successful, and I want basketball to be as successful as rowing, cycling, sailing or of any of the other more obviously successful Olympic sports. It would probably be overdoing it to be say that basketball has had a troubled past, but the fact that it has not taken off has been a source of great frustration to all of us who are involved in it. However, it occurs to me that this may be a moment of opportunity. I am sure that if the new chairman is really prepared to take on the task of sorting out the governance of the sport and ensuring that there are people who understand participation and the performance expertise that drives success at the top end, and if he can take that case to UK Sport and prove that we have a good chance of medalling in basketball in Rio or in the 2020 games, UK Sport will reconsider its decision.

Question put and agreed to.

21:03

House adjourned.

Written Ministerial Statements

Monday 28th January 2013 Written Statements

Monday 28 January 2013

Code for Crown Prosecutors

Monday 28th January 2013 Written Statements

[The Attorney-General (Mr Dominic Grieve)]

On behalf of the Director of Public Prosecutions, Keir Starmer QC, I am today depositing in the Libraries of both Houses an updated version of the Code for Crown Prosecutors. The code sets out how prosecutors working in the Crown Prosecution Service (CPS) make decisions and is supported by comprehensive legal guidance on a range of topics, further details of which are available on the CPS website at: www.cps.gov.uk.

The code was last revised in February 2010 and has been updated following consultation to provide more focused and streamlined guidance for prosecutors. In this latest version, the evidential stage of the full code test remains much as before; however the code no longer lists the public interest factors tending in favour and against prosecution. Instead prosecutors are provided with questions to address to assist them in identifying the public interest factors relevant to the case. The revised code also highlights the need to consider proportionality at the public interest stage.

The code is published to provide transparency to the decisions taken by prosecutors. To ensure the code’s accessibility, it will be published in audio and Braille as well as in English, Welsh, and other languages. Copies of the “Code for Crown Prosecutors” will be available on the CPS website.

High Speed Rail

Monday 28th January 2013 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

High Speed 2 is the engine for growth that Britain needs to compete and succeed in the global economy. It will generate jobs, rebalance the economy and secure the country’s future prosperity.

In January 2012, the Government announced the HS2 route that will link London and Birmingham, known as phase 1, following a thorough consultation. Today, I am publishing my initial preferred route, station and depot options for phase 2 linking Birmingham with Manchester, the East Midlands, Sheffield and Leeds.

There will be a comprehensive programme of engagement on all aspects of phase 2 and a public consultation, planned originally for 2014, has been brought forward to begin ahead of schedule this year.

A Command Paper published this morning. “High Speed Rail: investing in Britain’s future phase two—the route to Leeds, Manchester and beyond”, details the Government’s preferred route for 211 miles of new track and stations in the following locations:

Manchester (alongside the existing city centre terminal at Manchester Piccadilly).

Manchester Airport (linked directly to Manchester Airport’s three terminals).

Leeds (in the South Bank area of the city centre).

South Yorkshire (at Sheffield Meadowhall, alongside the M1).

East Midlands (between Nottingham and Derby at Toton, alongside the M1).

In addition, Crewe will be connected directly with the high speed line via a dedicated link. HS2 will be integrated with the existing national railway network allowing cities and towns in England and Scotland beyond the high speed tracks—including Liverpool, Glasgow, Edinburgh, Newcastle, York, Preston, Warrington, Lancaster, Carlisle, Durham and Darlington—to benefit also from new connections and dramatic time savings thanks to trains able to use both conventional and high speed railway lines.

HS2 means our railway network will have the capacity to cope with ever increasing numbers of passengers and free up space on existing rail lines for more commuter, rural and freight services, meaning fewer cars and lorries on our roads.

We will deliver a fair deal for people whose homes, land or businesses will be affected by construction by continuing to offer a generous compensation package and investing millions in tunnels and other mitigation measures. That is why we are also launching today a public consultation on an exceptional hardship scheme to assist property owners and compensate people fairly. This is an interim scheme; longer-term compensation proposals will be developed in the future as they have been for phase 1.

Construction on HS2 will begin in four years and phase 1 will open to passengers in 13 years. Phase 2 will open six years after that.

A series of supporting documents setting out in detail the Department for Transport’s phase 2 proposals are available on: https://www.gov.uk/government/policies/ developing-a-new-high-speed-rail-network.

Work Capability Assessment (Cancer Treatment)

Monday 28th January 2013 Written Statements

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

Today we are implementing further changes to the Work Capability Assessment to improve the way in which it assesses the effect of cancer treatment.

Following extensive work with Professor Harrington, Macmillan Cancer Support, the Royal College of Radiologists and others we are now further improving the way we assess cancer patients.

The resulting changes will mean that hundreds more people who are awaiting, receiving, or recovering from any form of chemotherapy or radiotherapy for cancer will be placed in the support group for employment and support allowance where they will get the support they need while unable to work.

We strongly support the principle of the Work Capability Assessment and are committed to continuously improving the assessment process to ensure it is as fair and as accurate as possible. As part of the programme of continuous improvement of the Work Capability Assessment, today we are also making a number of amendments to the assessment and to the description of certain activities and descriptors. These changes do not represent changes in policy. Rather they are intended to clarify areas which are open to misunderstanding. They will make the process easier to understand for claimants and assessors.

Grand Committee

Monday 28th January 2013 Grand Committee

Monday, 28 January 2013.

Enterprise and Regulatory Reform Bill

Monday 28th January 2013 Grand Committee

Committee (9th Day)

15:30

Relevant documents: 9th and 10th Reports from the Delegated Powers Committee.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)]

My Lords, I remind the Committee that in the event of a Division in the Chamber the Committee will adjourn for 10 minutes from the sound of the Division Bell.

Amendment 28C

Moved by

[Lord Jenkin of Roding]

28C: Before Clause 65, insert the following new Clause—
“Director General of Intellectual Property Rights
(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In Part VII (miscellaneous and general) at the beginning insert—
“Director General of Intellectual Property RightsA296 Director General of Intellectual Property Rights
(1) The Secretary of State shall appoint an officer to be known as the Director General of Intellectual Property Rights (“the Director General”).
(2) The Director General has a duty to—
(a) promote the creation of new intellectual property,(b) protect and promote the interests of UK intellectual property rights holders,(c) co-ordinate effective enforcement of UK intellectual property rights, and(d) educate consumers on the nature and value of intellectual property.(3) In performing those duties, the Director General must also have regard to the desirability of—
(a) promoting the importance of intellectual property in the UK,(b) encouraging investment and innovation in new UK intellectual property, and(c) protecting intellectual property against infringement of rights.””

[Lord Jenkin of Roding]

My Lords, this proposed new clause calls for a new appointment of a director-general of intellectual property rights.

More than a year ago I started to be approached by a number of bodies, individuals and organisations who voiced their fears about threats to their rights as owners of intellectual property. I held discussions with representatives of publishers from the music industry, the Authors’ Licensing and Collecting Society and a number of others, including those representing designers. I attended a number of meetings where these fears were voiced with increasing intensity and became convinced of the need to ensure that the then projected legislation really did protect the owners of all kinds of IP.

I was interested to read a biography of my great-grandfather recently, who was a distinguished 19th century engineer—the first professor of engineering at Edinburgh University. He and Sir William Thomson, Lord Kelvin, had considerable battles with financiers and others to ensure that they enjoyed the fruits of their inventions by means of patents, which are simply another form of intellectual property. Therefore, my interest in these matters may be to do with my genes.

I have also listened to the strong case for what is called open access: that is, the policy of enabling free access to the results of publicly funded research and other similar sources. This is strongly supported by my right honourable friend the Minister for Science, David Willetts. I remind noble Lords what he wrote in his article in the Guardian last year. The article stated that,

“we will make publicly funded research accessible free of charge to readers. Giving the people the right to roam freely over publicly funded research will usher in a new era of academic discovery and collaboration, and will put the UK at the forefront of open research”.

He added:

“The challenge is how we get there without ruining the value added by academic publishers”,

and, of course, many others. We know that in the other place an amendment was made to the Bill which protects those who publish the results of such research. However, my right honourable friend described this change in open access as a “seismic shift”. The policy covers research councils, universities, libraries, archives and museums. It also covers electronic publications from these sources.

I must make it clear that I warmly welcome this open access policy which seems to me to have a great deal of merit. However, I must, of course, mention the challenges to which my right honourable friend referred. I have been made aware that major commercial interests, many of them in the electronics industry, especially the interactive sources, find the obligations to respect copyright a tiresome and expensive barrier to their business. They appear to claim that they, too, create public benefit and that the privileges of open access should be extended to them as well. Their solution has been to argue strenuously for relaxation of the terms and application of copyright, and some of those arguments are reflected in the Bill. We are faced with the need to reconcile legitimate open access with the essential protection of the rights of the creators of intellectual property. That may be something of a simplification, but we will have ample opportunity to explore that as we go through the rest of the Bill. I must make it clear that I do not wish to trespass upon the debate we shall have on the many particular policy issues dealing with exceptions and orphan works, collective licensing, codes of conduct and the ombudsman, which are all subject to later amendments that deserve very thorough scrutiny.

It is where other interests see this as a route to circumvent the constraints of copyright and other legal protections for property rights—and I assert very firmly that they are property rights and have been seen as such by the courts for very many years—that the conflicts lie. I start by quoting and endorsing the statement by the Alliance for Intellectual Property. It is a long statement, but I will quote only the essential paragraph:

“IP lies at the heart of every British success story. It is essential to the creative industries which support around 1.5 m jobs, contribute over £36 billion to UK GVA (DCMS Creative Industries Economic Estimates). IP is also the basis for the £16 billion which companies invest annually in the UK economy by building brands, and allows the UK’s brand-building industries (including advertising, marketing and design agencies) to generate around £1 billion in Gross Value Added through exports alone. In addition, the design industry employs up to 350,000 people and UK businesses spend around £35 billion on design each year”.

We are not talking about fringe businesses. This lies right at the heart of a great deal of British industry. It is a powerful case, and I have to say to the Minister that I am not wholly satisfied that the Government recognise the strength of that case.

An example of the very real concern that the threat to copyright, including design, patents et cetera, has engendered, was a letter sent to the Times last March signed by members of the Creative Coalition Campaign.

“Copyright is the central intellectual property right that underpins the creative and knowledge economy. Films, music, games, books, could not get made in their present quantity and quality without a robust system of copyright. It provides the legal foundation for the ability of companies to license or sell works, and to invest and innovate”.

There have been other statements as well.

I am sure that noble Lords are aware that on 29 October last, the All-Party Parliament IP group produced a report, The Role of Government in Promoting and Protecting Intellectual Property, which urged the Government to get a grip on how IP policy is made. My honourable friend John Whittingdale, the chairman of the committee, said in a press release:

“The current system of creating intellectual property policy just isn’t working. IP needs a champion within Government, who will recognise its significance and who will have the influence to co-ordinate policy across different departments. From trademarks to patents, design rights and copyright, UK companies depend on their IP rights to succeed and thrive. In this difficult economic climate it’s especially important that Government backs British businesses on IP. We hope that Government will take note of our proposals”.

It was a fairly hard-hitting report, which made the point that the Intellectual Property Office had lost,

“the confidence of a broad swathe of its stakeholders”.

I come to Amendment 28C, which picks up on the group’s call for a champion of IP, calling for the creation of a new post, the director-general of intellectual property rights, a duty to promote the creation of IP and to protect it where it exists. I know that noble Lords will already have studied the amendment, which says in proposed new subsection (2):

“The Director General has a duty to … promote the creation of new intellectual property … protect and promote the interests of UK intellectual property rights holders … co-ordinate effective enforcement of UK intellectual property rights, and”—

this is a very important one—

“educate consumers on the nature and value of intellectual property”.

I add that as an important one, because it is clear that quite a lot of the public think that it is perfectly all right to download all sorts of things on to their computers and telephones without paying for it—because there it is, after all, and they will not be found out. That is the essential of what the amendment points out.

The committee referred to the IPO as having lost the confidence of its stakeholders, but the IPO has an entirely different function, as was made clear by the evidence that it gave to the all-party group. Some of us have had the privilege of listening to people from the IPO in the meetings that we have had. The plain fact is that the IPO may be an efficient registration body for the registration of IP rights, but it is not and never has purported to be a champion of IP. On the contrary, it sees its role as holding the balance between creators and users. This view is reinforced by the general terms of the report, Modernising Copyright, published on 20 December last year and announced by the right honourable Vince Cable when he launched the report. It declares its intention to safeguard the rights of IP creators, but almost every single one of the changes recommended points in the opposite direction. For instance, there should be more exceptions to copyright allowing access without paying. There are many other examples, which we shall no doubt deal with in the respective amendments. Much of the rest are simplifying where practice and confusion have reigned and uncertainty has become rife.

The creators and owners of IP must have someone in government to speak up for them, and that is what the amendment is intended to establish. Since I tabled it, two or three weeks ago, I have been astonished by the wide support that it has attracted. It is seen by a great many of the bodies that represent the creative industries as something that really makes sense.

I referred earlier to the Alliance for Intellectual Property and I also cite the BPI, which represents the British recorded music industry. They ask noble Lords to support the amendment arguing that the director-general should be accountable for ensuring a framework for IP that promotes investment in new content, protects the investment from theft and counterfeit and educates consumers on the importance of UK intellectual property to jobs, growth and export strength to the United Kingdom. There is also the Creators’ Rights Alliance, which speaks for some 14 bodies, including writers, illustrators, picture libraries, composers, journalists, musicians and many others.

Whatever the IPO and my noble friend’s department may say, this widespread demand for a champion for IP seems to have gained a great deal of support. It must not be swept aside. Of course, we will not be voting today because one does not vote in Grand Committee, but this is one of the most important amendments before the Committee. I beg to move.

15:45

[Lord Clement-Jones]

My Lords, I will speak first to Amendment 28C and then to my own Amendment 28D. I support the amendment proposing a director-general of intellectual property rights, put forward so eloquently by my noble friend Lord Jenkin. I was extremely interested to hear about his Scottish connections, his great-grandfather and his relationship with Kelvin. There was a programme recently on the BBC about innovation that described how Matthew Boulton, James Watt's partner, succeeded in making sure that Watt derived benefit from his inventions and the modifications that he made to the Newcomen engine. It must be one of the few cases where innovators and inventors received a proper reward for their inventions. That was heartening. Perhaps it was as a result of Matthew Boulton's commercial enterprise that the Scots have been so inventive over the past couple of centuries.

As my noble friend mentioned, the UK is a world leader in intellectual property. He put some significant figures forward in terms of employment and the value of the creative sector. Therefore, how the Government develop IP policy is vital for our economy. We hear much about becoming a knowledge-driven economy. IP is vital for that and for those whom it supports, such as in manufacturing.

There is concern, however, extremely well reflected by my noble friend, that the IPO is not in fact a champion of intellectual property. I was a member of the All-Party Parliamentary IP Group inquiry into the IPO. From the evidence that I saw, officials did not see their role as being to champion intellectual property. Indeed, officials found it difficult to describe intellectual property as a property right even though nearly all creators believe that fundamentally. In fact, there were three important conclusions. My noble friend mentioned them but they bear repeating: IP is a vital foundation of economic growth, there is no champion of IP policy within government and that the IPO's policy-making function has lost the confidence of a large number of its key stakeholders. That is pretty unusual. The third point bears repeating as it is a very important conclusion.

It is significant that in their paper last year on the role of the IPO, the Government came to certain conclusions, which I think bear quotation:

“In coming to this conclusion, he”—

Hargreaves—

“argued that intellectual property policy had been insufficiently directed towards the objective of economic growth and that there had been instances in which IP policy had been developed in ways that were inconsistent with the economic evidence”.

Noble Lords can see the thrust. They continued:

“To improve the focus of IP policy on growth, the Review proposed that the Intellectual Property Office, as the Government body responsible for advising Ministers on the development of IP policy, should have an overarching legal mandate to promote innovation and growth, and state that IPO decisions will be based in evidence and take due account of the impact of the IP system on innovation and growth”.

I should say in parenthesis that your Lordships will note that there is no statement about the importance of intellectual property in the middle of that statement about innovation and growth. They go on:

“The Government wishes to retain the current structure of the IPO as an Executive Agency, combining practical experience of the IP system, gained through rights granting and advisory services, with policy responsibility. There are advantages in maintaining an organisation which has a blend of technical expertise and policy development skills, and the development of policy should not be done at arm’s length from Ministers”.

That was the major conclusion—that the IPO would pretty much stay as it is, with a stronger emphasis on innovation and growth.

Some of this is disappointing, especially in the light of the kind of proposal that we have here, but it is also fairly breathtaking. I shall not dwell on those comments unduly but the fact is that, as was recently demonstrated by Professor Hargreaves before the Culture, Media and Sport Select Committee, the evidence base for his own reports has been flimsy at best when justifying certain copyright exceptions. The impact assessments for most of the relevant clauses in this Bill are also wholly inadequate as a result. The mantra that somehow copyright is a barrier to innovation and growth runs through the Hargreaves report and the work of the IPO, I am afraid.

Let us contrast that with the recent report on access to finance for the creative industries by Ian Livingstone, which is very positive about the need to recognise and build on the value of creative content. He fully recognises the benefit derived from promoting the creation and retention of intellectual property, alongside finance, skills creation and other factors.

Therefore, I hope—especially in the light of this amendment—that the Government will rethink their approach to intellectual property policy. As the feasibility studies by Richard Hooper and the work thereafter show, ambition within the UK’s collective licensing bodies and the creative industries to form hubs with other copyright owners—for example, for licensing music for services of every kind—right across the globe, making the UK a global licensing centre, really does exist to a powerful degree. The UK’s collective licensing bodies are investing in the technical expertise, processing power and administrative efficiency to handle billions of uses of music and other intellectual property, and to charge, collect and distribute income with precision.

I believe that that is of far greater significance across the board in the technology sector and the creative industries than the copyright law reforms proposed, whether in this Bill or in the proposed exceptions put out before Christmas. The Government should match this ambition and champion IP as much as possible. The IPO clearly needs to be more overtly a champion for IP. The United States has obviously benefited from having an IP tsar, otherwise known as the Intellectual Property Enforcement Coordinator, who is responsible for a national strategy and works directly to the White House. Creating a director-general of intellectual property rights to sit within the Intellectual Property Office and serve as a champion of IP rights within and across government would increase the influence of the IPO across government and also strengthen the hand of the Minister responsible for IPO, if I may say so to my noble friend.

My noble friend quoted the Alliance for Intellectual Property and I should like to take another quotation. It says:

“We believe such a post is needed to ensure that this success is properly recognised, celebrated and built upon to ensure its contribution to growth, employment, culture and society is properly maximised; for IP to be championed in a way it is in other nations”.

Statutory underpinning of the IPO will give British IP-based industries the confidence that they need both at home and abroad.

Turning to Amendment 28D, as I mentioned, one of the most significant developments—in my view, far more significant than changes to copyright law—is the work following from Richard Hooper’s feasibility studies into a digital copyright exchange, otherwise known as the digital hub. Now the work following that feasibility study has been entrusted to a broadly representative voluntary group, the Copyright Licensing Steering Group. That has proved to get buy-in right across the creative sector. It is important to have an annual report on the follow-up to Professor Hooper’s recommendations and the progress made by the group in streamlining copyright licensing. He refers to that in paragraph 167 of his final report. We need to keep momentum going: how? He sets out several possibilities, but the one that I am attracted by is his fourth recommendation:

“Industry and the Government could also look at whether there is any productive and cost-effective overlap between reporting on and monitoring all the work described in this final report and Ofcom’s reporting requirements under the Digital Economy Act. This approach has the advantage of an independent voice but the disadvantage of perhaps moving away from the industry-led and industry-funded philosophy underpinning all this work. Given Ofcom’s new role in relation to copyright enforcement this may be an important idea for industry to consider given their concerns about copyright enforcement not being forceful enough”.

That is one suggestion; there are others; but they all surround the need to keep the momentum going and have a proper report to Parliament about progress on licensing. There is support for that approach from the Government’s paper on the role of the IPO that I mentioned previously. It states:

“The Government therefore considers that the most effective way of strengthening the IPO’s focus on innovation and growth would be to require it to report annually on the extent to which its activities had promoted those two ends. This increased transparency would act as a powerful incentive to develop policy based on the best available evidence, and to be clear about the respective weightings given to economic and social impacts on individual policy issues. Where the data are not as robust as we might like, a requirement to report will act as a spur to improve the quality of evidence”.

Surely, what is sauce for the goose is sauce for the gander in that respect.

I close by citing some very wise words from the closing paragraphs of the second Hooper feasibility study. I think that they apply across the board to both amendments.

“In conclusion, the political dimension of our work, introduced in our first report, remains constant: if the creative industries ensure that they have done all they can to make licensing and copyright work easier for rights users and therefore consumers, then the ball is firmly at the feet of politicians to ensure appropriate measures are in place to reduce the incidence of copyright infringement on the web … There must be a sensible balance between the rights and requirements of licensors and of licensees, of producers and of consumers, a balance that is beneficial to both parties leading to further and sustained growth and innovation in the UK creative and internet industries … But intellectual property across copyright, trademarks, design rights and patents is at the heart of the success of a modern knowledge-based economy it must be sensibly protected against theft and improper use”.

Amen to that.

[Baroness Buscombe]

My Lords, I have added my name to Amendment 28C, following my noble friends Lord Jenkin of Roding and Lord Clement-Jones. It was interesting to hear from my noble friend Lord Jenkin about his genes. It made me think about my genes, and my grandfather, who invested a great deal of time, energy, love and passion in developing motor racing cars back in the 1950s and 1960s. I remember as a young child the privilege of being able to stand within what we called the works to watch those incredible machines being built. That was wonderful. The specifications used to build those machines, and their protection, were paramount to their success as flagship examples of British industry, for jobs, investment and advancement of technology within the motor industry and the motor racing industry. Of course, the principles that were clear then, in the 1950s and 1960s, are no different today. The protection of copyright is crucial for certainty. Everybody involved in the creative industries needs certainty. Often, as we know, people in the creative industries are taking enormous risks—very often on their own—whether they are a lone photographer or a filmmaker or a record company representing multiple interests.

16:00

I do not want to spend long on my feet this afternoon because noble friends who preceded me have made the case loud and clear for a director-general for intellectual property. However, let me use one example of the mass lobbying that we have all had over recent months—I think absolutely understandably. People care passionately about what they create and about how their ability may be at risk to continue to do their jobs and create some of the brilliant successes within our economy.

I want to quote Martin Mills, the co-founder and chairman of Beggars Group, the UK record label for the artist Adele who has been the biggest selling artist in the world for the past two years. Martin Mills won the American Billboard magazine icon award at the MIDEM conference in Cannes yesterday. In accepting the award, Martin made a stinging attack on the Government and their attitude towards copyright.

“Creative industries are built upon strong and defendable intellectual property rights, and without that they will inevitably wither and fail. It is impossible to make the investments to produce new creative goods without the security that ownership of them is protected.

Yet governments are seduced daily by elements of the new technology industry into diluting and compromising that security. Often in the name of the importance of those industries to today’s economies, often in the name of open Internet philosophy. But all of these arguments are aimed self-interestedly at compromising the value and the integrity of creative goods. These creative works are a priceless national cultural and economic asset, which should be treasured, not dumped”.

These rather fierce words were heard yesterday in Cannes—incredibly unfortunate but opportune. The Government have an opportunity to listen to those who argue, and the number is growing in support of my noble friend’s amendment, for a director-general who can focus entirely on a critical component of the British economy. Here is an opportunity. It should not be missed.

[Lord Smith of Finsbury]

My Lords, I support very strongly both the new clauses in front of us, but especially that proposed in Amendment 28C. I declare an interest as a non-executive board member of PPL, the collecting society for broadcast music rights, and also a rather minor member of the Authors’ Licensing and Collecting Society. I have one even more important interest and that is as a passionate believer in the importance, economic value and the future of the creative industries in this country. Intellectual property and the copyright that protects the value of that intellectual property are at the very core of the economic importance of those creative industries.

The creative industries represent something like 7% or 8% of our GDP these days. Even at a time of recession they remain strong and, in many respects, growing. They are incredibly important for us as an advanced industrial country because they are where much of our wealth creation is going to come from over the years and decades ahead.

For the creative economic sector, intellectual property is where that wealth resides. We have to make sure that we protect and nurture that intellectual property securely. That is why having a champion for the value of intellectual property such as is proposed in the amendment would be transformative in ensuring that our Government, Parliament and the world in general take intellectual property more seriously than they sometimes do at the moment.

Sadly, the report from Professor Ian Hargreaves was deeply disappointing in this respect. It contained a number of serious flaws and was based on flimsy evidence. The report from Richard Hooper was considerably better. I hope that the Government will take forward many of the proposals from Richard Hooper's report rather than placing too much reliance on the Hargreaves report.

Having a champion for intellectual property rights would be of great importance and great value. I do not think that the IPO could do it. The IPO is part regulator and part registrar. Its job has not until now been seen as being a promoter of the value of intellectual property. If the Government said, “We do not need a separate director-general: we will give this duty to the IPO”, I confess that I would be deeply worried. The work of the IPO has fallen down in much of its analysis and work recently. We have only to look at the glaring errors, for example, in its recent Collecting Societies Codes of Conduct document to see that it would not necessarily be the right place to put this responsibility.

Having a director-general with this very specific task, with a direct line through to Ministers, would be a far better solution for this vital section of the UK economy. We need the advocacy—the championing—that can come from such a role.

[Lord Howarth of Newport]

My Lords, I enter a note of caution. I feel as strongly as everyone else about the importance of intellectual property—that we should generate and protect it. That is a key dynamic of our economy and our creative economy in particular. However, I have some reservations about the proposition, as framed by the Alliance for Intellectual Property and as developed and powerfully articulated by the noble Lords, Lord Jenkin and Lord Clement-Jones, and the noble Baroness, Lady Buscombe. It seems to me that the specific remit of the proposed director-general of intellectual property rights as set forth in the amendment is insufficient and unbalanced. I am not opposed to anything contained within the proposed new clause, but if the Government are to create a functionary whose job it is to promote rights, it is important that the remit of that person and office should be balanced.

Everything that is proposed in the amendment for the director-general to do is directed towards advancing the interests of the creators and owners of intellectual property rights. That is fine in itself but there are also, very importantly, the interests of consumers and users. Ultimately, all of us believe that there is not a reason. If we have an appropriate regime for the promotion and protection of intellectual property rights, the whole of society will benefit, and I do not dissent from that. But in the near term or even the medium term, there are, as we know, tensions.

In the debate that the noble Lord, Lord Lucas, introduced for us as we reached Part 6 of the Bill he rightly stressed the responsibility that we all have as legislators to ensure that the new legislative regime is balanced and that the legitimate interests of all concerned are recognised. If we were to have a director-general of intellectual property, it should also be part of his duty to promote the broader public interest—something that we shall return to repeatedly in our debates on aspects of the clauses in Part 6 of the Bill.

On the other hand, if the remit of this office is as so far proposed by noble Lords, I do not see why the creators and owners of intellectual property should not themselves establish, fund and provide other support for their own champion. That would be entirely appropriate. But the role of government is all the time to seek to balance legitimate interests when they are in any degree of competition or tension. I am not against having a director-general, but further thought is needed. Perhaps a more generous and inclusive definition of the responsibilities of the director-general would be more appropriate.

The other new clause, proposed in Amendment 28D tabled by the noble Lord, Lord Clement-Jones, suggests that there should be an annual report on copyright licensing. That is an entirely good idea and I am happy to support it.

[Lord Lucas]

My Lords, I join the noble Lord, Lord Howarth, in everything that he said. It is important that the Government hold the ring on this. I take my views on copyright from Macaulay—it is a bargain between the producer and consumer. It is a bargain that needs to be kept balanced. A lot of good will flow from that balance. I would not have a director-general of copyright who looked after only the producers any more than I would have bank regulation that favoured only the banks. It is a matter of balance.

If we want to look at what goes wrong when the producers are in charge, we can look back at the history of the music industry and the way that it reacted to Napster. It made a mess of that. Rather than seizing on a new opportunity, it wanted to entrench its rights against the consumer. The industry was rolled over and a jolly good thing too.

Martin Mills is a hero of mine and I am delighted that he is defending copyright so strongly. I am sure that he is right in what he said, but it does not come down to a case of a lack of balance. We as a Government should feel able to enforce copyright strongly because the copyright owners are giving our people what they want—not trying to withhold stuff from them, fail to give them what they want or hold them to ransom, as was the case in that phase of the music industry.

I am entirely in favour of the amendment of the noble Lord, Lord Clement-Jones. What is being done on the copyright hub is of immense importance. I am a copyright producer and user. In both aspects I would be a keen user of the hub. It is a great chance for Britain to be at the start of this and to put ourselves at the centre. If there is anything that we as legislators can do on this to keep the Government’s foot on the gas pedal and pressed firmly pressed to the floor, we should take that opportunity.

[Baroness Morris of Yardley]

I support Amendments 28C and 28D, and draw the Committee's attention to my entry in the Register of Lords’ Interests as a director of the Performing Rights Society.

I listened carefully to the two preceding speakers. It is difficult to argue against a balance. Who would be against a balance in favour of a bias? But to some extent the amendments that have been presented seek to correct an imbalance that already exists. That is the problem. We are not starting from a level playing field and building in an imbalance: there is a feeling that intellectual property is not protected. The amendments seek to correct an imbalance that the two previous speakers mentioned.

A lot has been said about the importance of this industry and I shall not go over that again, but I have two points. This is probably a pivotal time in that this industry is growing, it is new and it is fast moving. We saw what happened when the sector itself failed to respond to new technology in the appropriate way 10, 15 or 20 years ago, and I think that we have been picking up the pieces ever since. However, things have moved on since then. It is right that, as a society, the Government and the industry now look at what is happening and ask, “What do we need to do to make sure that we can guarantee the future of this industry, giving people new ways of accessing music design and all those things, but protect the copyright holders as well”. Getting that right is what this legislation is about. Given how fast things are moving, if we get it wrong now, we will find it very difficult to go back and get it right again in the future. This is a really important point. In relation to this amendment, perhaps I may say to the Minister that I do not think we can see how it goes and come back in 12 or 18 months’ time to reflect and then take things forward. Now is the time to act.

16:15

The second point that I want to make in terms of background is that we talk about people accessing the intellectual property that exists at the moment. That is part of the structure that we are building, but in some ways it is about ensuring a continuing flow of intellectual property for the industry in the future. Those producing intellectual property are businesses and they, just as much as anybody else, need a guarantee of a return on their investment. We now have a wonderful system whereby people can access existing intellectual property but, if we do not act for the future, we will have done nothing at all to make sure that we have a continuing flow of intellectual property to make this industry stronger and more robust.

My thoughts on this come from two sources. One is a junior Minister in the Department for Culture, Media and Sport, and I notice that there is a glut of former DCMS Ministers with me on the Back Bench at the moment. Secondly, the noble Lord, Lord Clement-Jones, referred to the All-Party Parliamentary Intellectual Property Group, on which I also sat, although I was not able to attend all the sessions. The Minister may tell me that things are very different now but, quite honestly, going back to my days in the DCMS, I was horrified at the lack of co-ordination of intellectual property across government. I spent seven years or more in government and I never felt as much animosity about copyright as there was between the DCMS and the DTI, as it was in those days. The two departments were on different sides. There was no coming together in the national interest, and the IPO—I choose my words carefully; I do not want to overstate it—was not seen as a friend of the DCMS. The DCMS saw itself as promoting the creative industries.

That is what is wrong. There is no co-ordination across government departments to act in the interests of the future of this industry and the future growth of intellectual property. Of course, the Minister may tell me that it is all now sweetness and light and that there is a wonderful relationship between the two departments. However, if you put that together with the evidence that we took on the All-Party Parliamentary Intellectual Property Group, I fear that that is not the case. The sector that produces and those who represent the producers are still not convinced that there are people across government who understand them. It is not so much a case of acting in their interests but of making sure that they give what they should be giving this joint enterprise of becoming a society that makes the best use of IP. To have the IPO as the body to which the creative industries can turn being almost despised —I do not think that that is overstating it—cannot be right.

My starting point is that all is not right and all is not well so far as concerns protecting intellectual property and making sure that its niche in the wider area of promoting the creative industries is looked after in the way that it should be. Both the amendments put by the noble Lords, Lord Jenkin and Lord Clement-Jones, and the noble Baroness, Lady Buscombe, would do the trick. Perhaps before Report there needs to be some reflection on this matter, and we can always do that. That would be a good thing and I would very much support it.

Perhaps I may end as the noble Lord, Lord Jenkin, did, by talking about the importance of education. It is good to see that this would become a responsibility of the new post. I am not sure whose responsibility it is at the moment. The sector itself, as it should—it is its responsibility—has invested in and launched a number of initiatives over recent years, running education programmes in schools and other education institutions and in wider society. This is important, and the Government have a role here as partners in education and copyright—not taking it over and doing it instead of the sector but being partners.

The Government under either party have not done that so far. It was drawn to my attention that the IPO has said that it would launch an educational initiative; I understand that it was announced in December. The Minister may want to say what has happened to that, but whatever he says I think that I will not be convinced. We are talking about changing entrenched public behaviour and perceptions. If you look at what has had to be done to change areas such as smoking, drinking, alcohol and drugs, you can see that it is a massive thing. I do not have confidence that the IPO can be the lead for the Government in educating on the proper safeguarding of intellectual property. So I very much welcome the amendment, which was put forward with great force and skill, and hope that it finds favour with the Minister and the Government.

[Lord Stevenson of Balmacara]

My Lords, it has been a very good debate, and it has got us off to a very good start this afternoon in our task to whip through the various clauses on copyright. I start where my noble friend Lady Morris ended. We have to be clear that in addressing these clauses we adjust for the realities of the digital world in a way that makes sense to consumers. We have to start with where people are at present, not where we would like them to be. The points about education are really important here.

We are playing a big price for the lack of reform in recent years from schools unable to make use to libraries unable to make preservation copies of films and television programmes that they hold in the national interest. Copyright raises issues of reasonable social and cultural freedom as well as one very key issue with economic ramifications. The presence of the internet allows all sorts of new forms of creativity, so we need a copyright set-up that encourages one-click licensing for a long tail of material that is out there and which could bring economic and cultural growth. But without a well balanced and modernised framework, we will put ourselves at a big disadvantage over some other countries, most obviously the US but also other emerging players. Countries such as Singapore and Iceland are seeking roles as leading edge players in creative product licensing.

Technological change will mean that we in the UK need to keep on adapting our rules, because our fair dealing regime is part of a European system that requires us to exploit fair dealing exceptions, rather than the US fair use system that enables the regime to flex in response to changing attitudes, behaviours and court decisions. I wonder whether the time has not come to think hard about why we differ from the US on this key point.

As we have heard, the argument for the post of director-general of IP is that such a post is needed to ensure that the successful record of IP generation in the UK is properly recognised, celebrated and built on to ensure its contribution to growth, employment, culture and society. As the noble Lord, Lord Jenkin, said, the key to that is definitely education.

The noble Viscount, Lord Younger, is the newest IP Minister, and I note that he is the sixth person to hold this position since it was created about six years ago. This will undoubtedly lead to a lack of continuity and policy uncertainty for businesses. It is not an exact parallel, but before the creation of the Department for National Heritage, which is now DCMS, there was a period when there were 18 different Ministers with responsibility for films in the then sponsoring department, the DTI, over a period of 17 years. As I was working at the BFI in part of that period, I know what that does to industry. I shall leave it to the Minister, who is barely 18 days into his post, let alone 18 years, to assess whether his location in BIS makes cross-government co-ordination more difficult and sporadic, as has been rather persuasively argued.

One problem for those working on this section of the Bill is that the creative industries do not generally feel that they are being looked after properly. Indeed, there is a wide sense of unease, as the noble Lord, Lord Jenkin, called it, and of imbalance, as my noble friends Lady Morris, Lord Smith and Lord Howarth also mentioned. This is in part because of the rather unfortunate split in responsibilities between BIS and DCMS, which can sometimes—or, indeed, all the time—appear to pull in different directions. My noble friend Lady Morris put it well; she spoke from experience, and I think that she spoke the truth. IP is not well served by the current system. But it is also because there have been no real opportunities to debate in this House and the other place some of the issues in the foreground of this sector’s thinking at a time of great change in every aspect of its businesses. The occasional SI does not compensate for this—something that we will return to in other debates. That is why, to me, the idea of an annual report and a subsequent debate in Parliament seems such a good idea, which I am happy to support.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, first, as a Scot, I recognise with a little pride the Scottish historical links with intellectual property which have been highlighted today.

Amendment 28C would create a new statutory role of “Director General of Intellectual Property Rights”, with a duty to promote intellectual property rights. As Minister for Intellectual Property, I have a role to champion the IP system as a whole—a point to which I shall revert later. This system recognises the different interests of rights holders, consumers and other users—an important point raised by the noble Lord, Lord Howarth of Newport, and supported by my noble friend Lord Lucas.

A balanced intellectual property system promotes strong and competitive markets; encourages innovation and creativity; and is a foundation of the knowledge-based economy. I ask noble Lords how the proposed director-general would fit into that system. The frameworks for patents, copyright, trademarks and designs serve sets of different needs, and function in different ways. It is not clear how introducing a new duty, cutting through those distinct, complex and largely effective systems, would affect their operation.

We recognise the importance of promoting and educating about intellectual property. As my noble friend Lord Jenkin highlighted with some impressive statistics, and was highlighted by the noble Lord, Lord Smith, intellectual property is an important agenda for businesses and consumers alike, but although the Government understand the intention behind Amendment 28C, there is a need to deliver a balanced approach.

Amendment 28D would create a new obligation on the Government to report annually on the state of copyright licensing in the UK, and between the UK and our trading partners. The Government are keen to ensure that the intellectual property system as a whole works well. We have ourselves proposed that the Secretary of State will present an annual report to Parliament setting out his view on how the activities of the Intellectual Property Office are facilitating innovation and growth.

The Government agree with Professor Hargreaves that intellectual property policy should be based on reliable evidence. However, the reporting obligation created by this new clause would not be a proportionate tool to do that. Moreover, copyright licences are private agreements, and the Government do not intervene or monitor individual transactions unless circumstances are exceptional.

Collating large amounts of commercially sensitive data could also cause concern within the markets, and could have an impact on the competitiveness of UK interests. Headline figures showing the health of the creative industries are already available. It is not clear that the proposed report would add value to that existing data.

The UK’s creative industries are among the most influential and successful in the world. Our creativity is, quite rightly, highly marketable, award-winning and sought after, and creative industries contributed 2.9% of UK gross value added in 2009.

At this point, I should like to address some points raised by my noble friend Lord Jenkin and the noble Lord, Lord Smith, concerning the value of the IPO. The Government recognise the value of the creative industries, and it is worth emphasising some progress. The Government have done a lot for UK creators and are doing more. We have supported term extension for music performers; introduced charging of charities for music use; are pressing ahead with the antipiracy measures of the Digital Economy Act; and rejected the notion of introducing US-style fair use in the UK.

The Government are also supporting the creative industries abroad through our growing IP attaché network. Those attachés provide practical support to UK businesses, build relations with intellectual property agencies in host countries and improve UK influence overseas. The UK has attachés in south-east Asia, China, India and Brazil. The changes proposed in the Bill will bring the copyright framework up to date and reduce administrative burdens on both creators and users of content. My noble friend Lord Jenkin also questioned the direction and strategy of the IPO, supported by my noble friend Lord Clement-Jones, who questioned whether the IPO is indeed a champion of IP.

16:30

It is worth pointing out that on 17 December 2012, the Business Secretary, Vince Cable, set out his vision for developing the UK’s intellectual property landscape to encourage growth and a renewed programme of action for the IPO. The plans involve a step change in the way the IPO delivers services and include launching a super fast patent processing service to deliver patents in just 90 days and a faster trade marks examination service which will deliver a full examination report in five days instead of 10. There is a campaign to educate smaller businesses on getting the best value from their creativity, and innovation and action to help consumers and young people understand the importance of respecting IP and the harm that counterfeiting or illegal downloading can do. The Intellectual Property Office is working with key partners such as the City of London Police to tackle IP crime such as counterfeiting and online piracy.

My noble friend Lord Clement-Jones raised the impact assessments for copyright provisions in the Bill. The Government’s copyright exception proposals are accompanied by impact assessments which show that changes could contribute more than £500 million to the UK economy over 10 years on a conservative view, with likely additional benefits of around £290 million each year. The Government’s copyright proposals are accompanied by impact assessments that have been scrutinised by the independent regulatory policy committee. The Government have also consulted extensively on these proposals through the Hargreaves review, a formal consultation and numerous discussions with stakeholders and industry representatives. We have considered all responses very carefully. The Government will bring forward secondary legislation to introduce these changes in 2013. Prior to this we will publish the draft regulations for technical review. The Government will make every effort to ensure that all interested parties have the opportunity to comment on the draft legislation before it is laid.

On Amendment 28C, my noble friend Lord Clement-Jones referred to a proposal for a tsar to enforce intellectual property, much as there is in the USA. I reconfirm that I am the Minister for Intellectual Property. I believe that no other country has such a post. This Government have carried out a range of activity to support the enforcement of IP. The UK’s legal system convicts pirates and counterfeiters: 80% of criminal cases under IP legislation in 2009 led to a guilty verdict. In 2009, the UK convicted nearly eight times as many copyright offenders as in 2002. The assets seized from IP criminals amounted to £21 million in 2010-11, which was more than twice the previous year’s figure. Figures vary from year to year but there has been an increasing trend in the value of assets recovered since 2004-05. Therefore, the IPO has made a substantial investment in creating an IP crime intelligence capability. The IPO also provides direct support for enforcement activities through its intelligence hub. The hub holds in excess of 50,000 reports and this year alone has processed some 3,000 data searches against the database for the enforcement community.

The noble Lord, Lord Smith, mentioned the Hooper report recommendations. I am pleased that he supports the report. Hargreaves recommended that the copyright hub be set up. As Hooper found, it is now for the industry to work together to set this up. The Government will, of course, help where appropriate.

In conclusion, I assure noble Lords that the Government understand the importance of the UK creative industries and of promoting a balanced intellectual property system, which, indeed, my noble friend Lord Jenkin has acknowledged. The Government have considered these issues carefully. On the basis of what I have said, I ask the noble Lord to withdraw the amendment.

[Lord Clement-Jones]

I will respond briefly and leave my noble friend Lord Jenkin to respond to the main amendment. I welcome the fact that the Minister has come out of his corner punching. He has certainly set out the term extension, the charging charities, the anti-piracy measures, the statement by my noble friend Vince Cable about super fast patent procedures, trade mark services and so on. He has also given us a mini update on the copyright hub, which is what I asked for all along on an annual basis. I am not at all convinced by the plea that there will be lots of commercially sensitive data that would have to be included in any report on the copyright hub. I ask my noble friend whether the report on innovation and growth that the IPO is going to be tasked to deliver on an annual basis could include licensing. I believe that licensing is the way forward to innovation and growth for the content and creative industries. It is extremely important, rather than copyright exceptions. There is no reason why it should not be included in the IPO’s report and maybe that is a way of coming to a beneficial conclusion on this.

[Lord Jenkin of Roding]

My Lords, contrary to the figures in front of us on the chart, we have actually spent over an hour on the first amendment. I do not, therefore, want to take more time. I thank all those who have taken part in the debate. I think it justified what I said at the beginning about the level of support there is for, if not this particular amendment then the recognition that “all is not well”—to quote the noble Baroness, Lady Morris. All is not well in the field of copyright. I leave the Minister with this thought. The Government have got to do a great deal more if they are going to regain the confidence of copyright owners. I heard what he said and I shall study it carefully. However, there is no question about it, those of us who have been exposed over recent months to the considerable expressions of dismay and, indeed, fear for the future on the behalf of IP owners are left in doubt at all that, as the noble Baroness said, all is not well.

The argument of the noble Lord, Lord Howarth, for seeking balance, is probably what the IPO claims that it would be doing. The fact of the matter is that it has lost the confidence of all those who are concerned as the owners of IP. Something has to be done in order to get the improvement in the whole copyright structure that is widely sought. It may well be that the director-general proposal will need to be looked at again in the light of what has been said in the debate about it. One point I would make is that the all-party group recommended that it come under the Secretary of State for DCMS whereas the IPO comes under BIS. The amendment says “Secretary of State” and that covers all of them, so the amendment does not distinguish.

I agree with what has been said. There is a lack of co-ordination across Whitehall—a lack of the same kind of recognition of the importance of IP lying at the heart of our economy, and it will increasingly lie at the heart of our economy as it becomes even more based on intellectual property and less on manual labour. We have got to look at this very carefully. Parliament has an opportunity to express its views. I have no doubt at all that we shall want to return to the matter at Report. I give notice to my noble friend that I expect that is what we will do, but we will study what he has said very carefully. In the mean time, I beg leave to withdraw the amendment.

[Viscount Younger of Leckie]

Before my noble friend sits down, I hope that it is in order briefly to answer my noble friend Lord Clement-Jones and to confirm that we can include the detail on licensing within the IPO report in future.

Amendment 28C withdrawn.

Amendment 28D not moved.

Amendment 28DZA

Moved by

[Lord Stevenson of Balmacara]

28DZA: Before Clause 65, insert the following new Clause—
“Metadata
(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In Part VII (miscellaneous and general), after section 296ZG insert—
“296ZH Effect of electronic rights management information when material gathered by an automated process
(1) This section applies where electronic rights management information is associated with a copy of a copyright work, or appears in connection with the communication to the public of a copyright work, and a person (A) in the course of a business (including without limitation in pursuance of educational, cultural or any other non profit objectives) makes a copy of or performs any other restricted act in relation to that work by an automated process.
(2) If the conditions in subsection (3) are satisfied, A is deemed to have notice of the contents of that electronic rights management information (“the information”) for all purposes relating to his further use of, or access to, the copyright work.
(3) Those conditions are that—
(a) it is reasonably practicable for A to instruct the equipment or software which conducts the automated process to recognise, read and interpret the information;(b) the meaning of the information may be ascertained from published standards which A knows about or ought to know about;(c) the meaning of the information is sufficiently clear that it is reasonably practicable to instruct A’s equipment or software to comply with any restrictions contained in the information regarding the further use of, or access to, the copyright work.(4) Where, apart from this section, A would be regarded in law as having notice of any of the information, nothing in this section prevents A from having such notice.
(5) Subsections (1) to (4), and any other provisions of this Act as it has effect for the purposes of those subsections, apply, with any necessary adaptations, to rights in performances, publication right and database right.
(6) Section 296ZG(7) (definition of certain expressions) extends to this section.””

[Lord Stevenson of Balmacara]

My Lords, I shall speak also to Amendment 28DZD.

One of the difficulties about discussing the clauses on copyright in the Bill is that, although they are very important, they stand apart from important changes in copyright that the Government are making in parallel. I refer, of course, to the announcement on 20 December 2012, which prefigures the implementation of many of the recommendations of the recent Hargreaves review.

As many commentators have pointed out, making major changes to copyright has usually been done by primary legislation. The Copyright Act 1911 brought provisions on copyright into one Act for the first time; the Copyright Act 1956 covered the United Kingdom’s accession to the UCC; and the Copyright Designs and Patents Act 1988 is the current main legislative framework.

However, according to last month’s announcement, the Government will make changes by secondary legislation to private copying, education, quotation and news reporting, research and private study, access for people with disabilities, archiving and preservation, public administration, data analytics, and parody, caricature and pastiche. Many commentators feel that such a long list of copyright exceptions should be introduced by primary legislation; and I have some sympathy with that view.

When he comes to respond, I hope that the noble Viscount will explain in some detail the approach that the Government are taking. Pushing ahead with those measures in secondary legislation will, after all, not allow for the sort of debate and discussion that the torrent of representations that we are currently receiving would suggest is sensible.

The line being taken by the Government seems to be that, as they already have the power to make copyright exceptions under Section 2(2), they do not need primary legislation. With respect, I think that that misses the point. Those changes are important in themselves; they affect a major part of our economy; and they will interact with hundreds of thousands of people who work in those industries. If Parliament does not have a chance to debate those measures in detail, we are simply not doing our job.

I have tabled two amendments on the Hargreaves exceptions so that at least this issue can be raised. I shall make a couple of general points and then deal with the amendments, although not in any great detail. The first is that, in themselves, the new exceptions do a pretty good job of moving the situation forward from one where, over a period of decades, the focus of legislation with regard to copyright has been on either extension of duration or intensification of enforcement. On many of the copyright exceptions proposed, the Government have trodden a careful path between the contending views expressed in their consultation. Where an issue was uncontentious—such as copying for archive purposes—we have a clear and, to some people, radical change to the proposed position to allow unrestricted copying, which is a very welcome move indeed for countless museums, libraries and archives. Many of the specific proposals, however, seek to trade off contending points of view and interests, and are all the weaker for that.

If I were to take a view on which of the proposed copyright exceptions is likely to be viewed by the public as simply limp, I would say that the private copying exception, being confined to the individual rather than the immediate family, is the one that fails the basic test of realising where the consumer is on these issues. If my wife buys a CD, she cannot let me listen to it by copying it to my iPod. She can legally copy it to the music system of our car, but only if she owns the car and, by implication, the music system; it will not be legal if I am the registered owner. That will seem pretty daft to most people. There are of course arguments against a family private copying exception, not the least being able to define what is a family, but many will feel that an attempt should at least have been made.

Turning to my amendments, there are two issues. My concern about metadata is that although it is good that the Government are moving on it, the fact that they will be doing it through is secondary legislation means that, despite the consultation, the SI, which we hope to consider, will come through in the usual way in your Lordships’ House and will have to be approved through the affirmative procedure. That is in no sense a complete answer to the question. This is a controversial move, especially for publishers, many of whom have expressed considerable concern to both the Government and those of us involved in debating the Bill. Treating the proposal through the secondary route is not doing justice to the issue, to the community or to the wider public. A Grand Committee debate, where no amendments are permitted, is not a substitute for primary legislation. Perhaps the Minister can comment on that when he replies.

16:45

My second amendment deals with parody. My point here is that what the Government are proposing is extremely cautious. Perhaps the key point is that the proposal is that parody will be permitted only when it is fair dealing. In other words, this will preclude copying an entire work, and therefore, as the Government helpfully point out, there is a readily accessible licensing procedure available to pay for use of the work. Which original author will be happy to license to somebody else who is going to parody the work in question? They would have to have a very broad-minded view of what was going on here.

The Government also intend to leave in place the original author’s “moral right” so that they,

“will be protected from damage to their reputation or image through the use of works for parody”.

On reading this, I sometimes think that the Government have not understood what “parody” actually means. This does not even accord with the statement that the Government agree with the BIS Select Committee that,

“genuine political and satirical comment should be protected”.

The Minister nodded a bit at that point; at least I got something out of him.

The UK has a significant tradition in parody. It is also strong in pastiche and caricature. This includes literature, stage, film, fine art and music. Parody, pastiche, satire and homage have been an important vehicle for social and commercial innovation. These types of work are among the most commercially successful and well-known works in British history. Examples include T. S. Eliot’s The Waste Land, which recontextualises elements of various previous literary works, including Dante’s Inferno. Tom Stoppard borrowed liberally from Shakespeare characters and plots to create famous pastiches such as “Rosencrantz and Guildenstern Are Dead” and, with Marc Norman, the brilliant film “Shakespeare in Love”. He also used George Orwell’s 1984 and Federico Fellini’s “Eight and a Half” to create “Brazil”. Parodies frequently eclipse the work they are based on in popularity. For example, the BBC television sitcom “’Allo ’Allo!” is better known than the original BBC television drama, “Secret Army”, which it satirised.

EU law provides that member states are free to introduce an exception for parody, pastiche or caricature in national law, but the UK is one of the few industrial countries which does not provide for such an exception. Australia introduced a fair dealing provision for parody and satire in 2006. Belgium—believe it or not—Spain, Switzerland and France provide for a similar exception in their laws. Countries which, like the UK, do not provide for an exception in law have to rely on litigation.

I suppose we should be glad that the Government now reject the argument that relying on litigation provides sufficient legal certainty for parodists for the reality is that parodists and those who make their works available to the public face considerable risk of being sued for copyright infringement and hence having their works removed by internet hosts, and that is without considering the moral rights issue, particularly as UK courts have interpreted increasingly minute parts of a copyrighted work as constituting a “substantial part”, and that their use is therefore copyright infringement. This means that the Government cannot continue to defer the parody problem to the courts and the courts cannot be relied on for the continuous protection of a very important part of our culture.

My view is that there is a contradiction at the heart of the Government’s proposal—this is the reason for my amendment—that is the combination of moral right and fair dealing might easily mean that a wholly legitimate target of satire such as a politician or a celebrity would be able successfully to fight parody on copyright grounds in the courts. What a loss that would be. Can the Minister confirm that, for example, he is aware of the video done by soldiers and civilians in Afghanistan, “Gangnam Afghanistyle”? Or perhaps more topically, has he seen or even heard of the recent viral hit “Eton Style”, labelled on YouTube “Gangnam Style Parody”? A simple nod of the head would suffice. Even if he is discreet on this point, I am sure he would lament, as would many of us on this side, if such brilliant and incisive work was caught by this provision. I will send him the YouTube link if he would like to have a look at it.

I do not think the approach being taken by the Government is what is wanted. That is why I feel that my amendment would be the appropriate way forward. Only an out and out exception of the type contained in our amendment will get us to the right place. This may be the only opportunity to request a major rethink on this issue, which is why I ask the Government to look again at this proposal. I beg to move.

[Lord Clement-Jones]

My Lords, I support Amendment 28DZA in the name of the noble Lord, Lord Stevenson. I agreed with much of his introduction, the broad sweep of which was impressive given the nature of these amendments. He commented that exceptions will be introduced by secondary legislation. I associate myself with those remarks. I do not believe that secondary legislation is the right way to introduce those exceptions. It should be done by primary legislation.

That said, it is worth unpacking the metadata amendment slightly because I think that exactly how the amendment would operate should be on the record. Section 296ZG of the 1988 Act, which was inserted in 2003, provides protection for electronic rights management information by giving a cause of action to rights owners when such information is removed or altered by a third party without authority, provided that the third party has the necessary mental element—that is, that it knowingly and without authority removes or alters electronic rights management information.

The amendment seeks to deal with the specific problem that arises when copies of works or other subject matter are gathered by an automated process. It has particular relevance to the actions of search engines and other operators who “spider” the world wide web. Because copies are gathered and often stored or processed by an automated process, no human mind will normally read rights management information which is associated with or embedded in the protected subject matter. The law is presently unclear about the circumstances in which the operator of the automated process will be deemed to have rights management information drawn to his attention. Therefore, the amendment seeks to provide certainty in this regard. It does not expand the scope of any rights belonging to the copyright holder or other right holder. A person gathering materials is free to disregard any restrictions which may be communicated by means of rights management information if, for example, the acts he is carrying out are protected by a fair dealing defence or for any other reason do not fall within the scope of the copyright or other right.

Subsection (1) makes it clear that the effects of the proposed new clause are restricted to persons who gather or access copyright or other protected materials in the course of a business. Therefore, the circumstances in which consumers might be affected by any restrictions in electronic rights management information are outside the scope of the proposed new clause and remain governed by the law at large.

As the Minister may know, the amendment is supported by a large number of members of the creative industries. There is a strong view that metadata is crucial for the future of copyright protection, that it is central towards an efficient, effective and robust licensing system, that it has part of the solution to diligent search for orphan rights and orphan works, and that it is also helpful in terms of pseudonymous works.

I end by quoting the noble Baroness, Lady Buscombe —I often trawl through the internet to find her best quotations. This one is particularly apt in this set of circumstances. It comes from a House of Lords debate in June 2005:

“For those who make photography their life’s work, protecting their copyright goes beyond the emotive; it is their livelihood. Without adequate protection the photographic image—tomorrow’s cultural heritage—and those who create it will cease to have true value, and without adequate protection a profession dies. Photographers are concerned that, in the digital age, information supplied with the digital image about copyright and the creator is stripped away, often automatically, so that in a matter of moments the world is awash with ‘orphan’ images”.—[Official Report, 22/6/05; col. 1690.]

That was in 2005. We have not done anything about that issue but the passage of this Bill provides a chance to do just that.

[Lord Howarth of Newport]

My Lords, my noble friend has done well to raise the question of metadata in his amendment. I think that we need to be extremely careful about how we legislate on this, whether in primary or secondary legislation. Until such time as the technical means to counter the well known abuses of the intellectual property for digital photography by stripping metadata have been found, we should certainly be cautious, to say the least, about how we proceed to license digitally photographed works on the basis that they are orphan works.

My noble friend Lord Stevenson has also done us a good turn in fixing our attention on the question of what should be legislated in primary legislation and what should be left to secondary legislation. Will the Minister in due course comment on some questions of practicality and principle in this regard?

In what I am going to say, I make absolutely no criticism of the Minister personally. He has only just become Minister for Intellectual Property. I wish him very well indeed in that responsibility, and I hope he stays there until May 2015, and no longer. I wish him well during his incumbency, and the continuity that he may enjoy will undoubtedly be valuable for all concerned. Would it not have been more satisfactory if, when we came to consider clauses in primary legislation seeking to update the law on copyright, we also had before us at least an advanced draft of the secondary legislation to which the primary legislation would give authority? It is very difficult for us to know how to amend primary clauses and what view to take, all in all, about the Government’s proposals in the Bill if we do not know what the secondary legislation might look like as it will flesh out the relatively simple legislative propositions in the Bill.

I remember when it became clear that Clause 43 of the Digital Economy Bill was not going to make it to the statute book because of the imminence of the general election in 2010. I pleaded with the department that as it continued to wrestle with these policy issues it should move towards exhibiting draft regulations at the same time as it exhibited draft primary legislation so that all this could be put out to consultation together once it had been considered with the expert groups, such as those that the Intellectual Property Office is meeting at present. That was three years ago, and it seems to me that the House, and Parliament as a whole, is entitled to expect that the Government had made better progress on preparing the primary and secondary legislation before they presented it to us.

I was the government Whip in the Commons on the Copyright, Designs and Patents Bill 25 years ago, and I think it is fair to say that that legislation was somewhat less bald, somewhat less framework, and attempted to contain a more substantial body of legislative provision. The spirit in which both Houses of Parliament worked on that legislation 25 years ago was entirely collegiate. There was no party politics in it at all. We were all simply seeking to work our way forwards to find an appropriate legislative solution. Our deliberations and conclusions were observed with very great interest in other countries. We can continue to legislate in that spirit, but it would have helped us if the Government had allowed us to know a little more about what the primary legislation would open the way to.

While I reject the suggestions that have been put to us in some of the otherwise very helpful briefings that we have received that Parliament virtually does not scrutinise secondary legislation, I think that the situation, at least in this House, is significantly better than that, and we ought to pay tribute to the committees of this House that examine the quality and appropriateness of secondary legislation. We all know that it cannot be amended, and a great fuss is made if a statutory instrument is rejected by the House, so although we are not quite presented with a fait accompli when we consider secondary legislation, it is not a particularly satisfactory manner of advancing the frontiers of legislation. Much more exposure in draft and much more consultation—I know we will have it in due course—would be preferable at this stage. The Minister has perhaps not had an opportunity to consider this question of process as yet, so I hope that, not today, but at some point, he will feel able to offer some comments on it.

17:00

[Viscount Bridgeman]

My Lords, I declare an interest as a director of the Bridgeman Art Library, of which my wife is the founder and chairman. I shall speak to Amendment 28DZA in support of the noble Lord, Lord Stevenson, and my noble friend Lord Clement-Jones. The noble Lord, Lord Howarth, has reminded us of the history of the 1988 Copyright, Design and Patents Act. It goes a great deal of the way to protecting the rights of copyright owners, it removes the excuses for copyright material being lifted without a legal licence, it ensures that works created in future are not orphaned whereby, as your Lordships will be aware, work cannot licensed in the ordinary way because those who hold rights in it are untraceable, consumers get a genuine guarantee that the work is what it says it is and its creators take responsibility for it.

However there is one glaring loophole, which has been so ably addressed by my noble friend Lord Clement-Jones, in part opened up by fast-growing developments in digital practice. It is that at present users are currently able to shelter behind the fact that rights information, which forms part of what is loosely termed metadata, obtained and distributed by computer programs, as opposed to being obtained manually, escapes the protection afforded to creators by the 1988 Act. This amendment seeks to rectify an obvious anomaly in the existing legislation.

I would also like to draw the Minister’s attention to the fact that, should this amendment be accepted—and I am well aware that there is considerable debate about whether this will be in primary or secondary legislation—there will need to be a cross-over to those clauses relating to orphan works and extended collective licensing.

I would also like to mention that giving effect to this apparently simple intention in plain English at the same time as making it watertight in IT terms is no easy task, and the framers of this amendment are to be congratulated on doing their best. No doubt, if this amendment is accepted, as I hope it will be, the Bill team will be able to consolidate the wording.

[Baroness Brinton]

My Lords, with the permission of the Grand Committee, I shall speak sitting down.

I shall speak to both amendments. On Amendment 28DZA, will the Minister confirm that there is already protection under the law for the stripping of metadata knowingly and without authority? Other noble Lords have alluded to that. I understood that it gave us the protection that we were seeking rather than going down the route of this amendment. Any infringement is therefore already contrary to civil law. If there are concerns that that protection is not strong enough, especially in relation to computer and electronic equipment—for example, in cameras—it is not just about large internet companies stripping data. There is a real problem for photographers; I know that some of their data are stripped. I am looking at the noble Baroness, Lady Howe of Idlicote, when I say that we have worked with the ISPs in relation to child safety and pornography. Surely there is a more effective way of working in the internet age with organisations that, whether deliberately or not, might try to remove that data.

I understand that this amendment is trying to tackle the problem, but I am worried that it relies on individuals to instruct their electronic equipment. That might be fine in the case of a highly proficient technical photographer, but not necessarily fine for amateurs creating metadata, particularly on the internet, as well as for some professionals who do not understand the technology too well.

I worry that this amendment creates a further barrier to orphan works, which we will be discussing later. If this amendment is accepted, it will make it almost impossible to collect copyright licence fees for some orphan works because of the conditions it puts upon person A and person B.

I turn to Amendment 28DZD. It is a complete change in tone. I declare an interest as a former stage manager of Footlights. I worked alongside people such as Steve Punt and Hugh Dennis on their very first shows. I worry that paragraph (b), which states that copyright is not infringed if,

“it is accompanied by sufficient acknowledgement”,

would provide a real problem to people working in our fast-moving light entertainment and comedy world. I can absolutely understand the parody of major works: I think of Benjamin Hoff’s The Tao of Pooh, which acknowledges, right at the start, where it is coming from.

But there has been a traditional and proud history in this country of parody and caricature, from “That Was the Week That Was” 60 years ago, moving right up to date with “The Now Show” on Radio 4. Steve Punt and Hugh Dennis did a wonderful sketch a fortnight ago on UKIP and the referendum on Europe using the theme of Gollum in the film of Lord of the Rings. I do not know whether noble Lords heard it, but the theme of the programme was “We wants referendumses”. It was very effective.

The problem is that proposed new subsection (3)(b) in Amendment 28DZA would mean that every sketch like that in a fast-moving half hour show would have to stop to acknowledge that it was taking both a piece from Peter Jackson's original film and the style of the actor. Therefore, frankly, it would be unworkable. I apologise, but I am afraid that the stage manager in me immediately thought, “Oh my goodness: this will kill comedy and light entertainment of the spontaneous type that this country excels in”.

[The Earl of Erroll]

My Lords, I not sure why these two amendments have been grouped together because they are completely different. However, I will deal with the first one on metadata. I do not know what it has to do with stripping metadata off whatever you might read on the internet. It is saying, as far as I can make out, that if you have an automated system that comes across some metadata, it should respond to that intelligently and either not breach copyright or know that you are permitted to use it. But it does nothing about controlling the metadata or stopping people from stripping it.

In as much as it is saying that you should look at the metadata and therefore respond to it intelligently, yes, that is a nice thought. However, I wonder whether many programmes would be able to do that. I can see that it is probably targeted more towards the search engines and various things like that. I can see some problems with this and think that it will have to go into regulation to work out how to handle it.

We also need to think about the world stage and what is being done in other countries, because a lot of these things that look for items on the internet are based abroad. We want something that is practically useful. We do not want to drive things out of the UK. I am not saying that we should breach copyright and I think that we should use metadata intelligently to try to achieve the aims that we want, but we must be careful how we do it.

I am also keen on the use of data mining for research purposes. For example, you can talk to Wellcome and such people. Huge benefits have come from looking at disparate research material. Very often, new discoveries come from matching things from completely different spheres. That is what we forget when we worry about the protection of copyright for the artist or creative person in that sphere. Actually, researchers have completely different needs. They will not usually go around ripping off other people's ideas.

One of the challenges with this whole area of copyright is that we are trying to treat everything as if it is the same. It is not. Very often, when we benefit one lot we will disadvantage another and we need to be careful not to do that. That slightly worries me.

Leaving that to one side, Amendment 28DZD has a good point behind it, which is that you must have an exception for parody. Leaving the courts to decide what is fair in parody and what is not is very dangerous. As we know, courts are extremely expensive. If you are a small creative group trying to create parody and a big boy comes along and tries to hit you over the head in the courts, you will have to back down. That is bullying. Unfortunately, I do not think that our laws on bullying prevent that. If they did, we might be able to do something about it.

We must be very careful saying that recourse to the courts is workable. Basically, unless you are very rich or very poor, you are outside the law. You are not protected by British law because it is too expensive. That is something I have become aware of in general. We cannot rely on it. I think it is very important, but I entirely agree with the noble Baroness, Lady Brinton. We cannot try to attribute every single little thing that one tries to parody. That would be absolutely ridiculous and unworkable. Without that bit about the attribution, the idea that we are trying to protect parody is extremely important. Therefore, I like this amendment; it just needs a bit of tidying up, I suspect.

[Viscount Younger of Leckie]

My Lords, Amendment 28DZA would introduce a provision into the Copyright, Designs and Patents Act 1988 that changes the legal status of rights management information attached to digital material. This would make internet service providers responsible for ensuring any rights management information contained in metadata is recognised and acted upon. I have sympathy with creators whose wishes about the use of their material, expressed through metadata, are not always complied with. There are already well-established methods to control automated use of material posted online—for example, the use of robots dot text files to prevent crawling of websites by search engines. I was grateful for the technical insight on this from the noble Earl, Lord Erroll, who I suspect knows a lot more about this than my good self.

Internet service providers are already responsible for removing infringing material when it is brought to their attention. This is in keeping with other areas of law, where we do not expect carriers of information to be held liable for the lawfulness of that information. The approach suggested in the amendment would require all aggregators, indexers and other automated hosts online to develop systems to read metadata and comply with any conditions. As noble Lords will understand, this would be no small task. It would also replicate the efforts of a number of industry-led initiatives in this area, which are making progress. These include the Automated Content Access Protocol project, and work by the industry-led digital copyright exchange to look at the related issue of automated metadata stripping.

Government have considered the amendment carefully but do not consider that legislative change is the right step at this time. Moving on to Amendment 28DZD, noble Lords will be aware that the Government have announced their intention to bring forward legislation to introduce or update a number of copyright exceptions. A new exception to allow limited use of copyright works for parody, caricature or pastiche is part of that work. The amendment of the noble Lord, Lord Stevenson, is therefore going in the same direction as the Government’s policy. Rather than amend the Bill to achieve it, I suggest that it would be better to wait for the introduction of a parody exception, with the other proposed changes to copyright exceptions, in due course.

The Government have already committed to publish draft regulations later in the year, including provisions on this subject, for technical review by any interested parties. This will be an important opportunity to hear from experts, including in this House, to ensure that the regulations will have the desired effect. I would like to pick up on a point emphasised by the noble Lord, Lord Howarth, concerning secondary legislation. To clarify, we believe that exceptions to copyright that are explicitly permitted by the copyright directive may be introduced into UK law by means of Section 2.2 of the European Communities Act. The Hargreaves changes to copyright exceptions announced in December 2012 will be introduced by secondary legislation under the European Communities Act and not under the power in Clause 66 of the Bill. Our intention is to publish draft regulations for public comment in the spring. Government have considered the amendment carefully, but I hope that in light of the above, the noble Lord, Lord Stevenson, will feel able to withdraw this amendment.

[Lord Stevenson of Balmacara]

I thank all those who contributed to the debate. I am glad we got to the heart of it very quickly. I am particularly grateful to the noble Viscount, Lord Bridgeman, and the noble Earl, Lord Erroll, for their contributions of a technical nature. Who could fail to be persuaded by the noble Baroness, Lady Brinton, who lied when she said she was simply a stage manager? Clearly there was a touch of the real authorial actor there as well and I was grateful to her for her points. My failure here was clearly to have not done my research and realise that despite his youth and clear vibrancy in terms of matters cultural, the noble Viscount had not listened to his children and worked out where “Gangnam Style” was coming from. I perhaps should have taken a leaf out of the book of the noble Baroness, Lady Brinton, and actually done my bit of what it was that does it. It certainly would have amused the civil servants behind, but I think they were laughing already so it would have perhaps wasted my time.

On metadata, this was a probing amendment and was not meant to be one that would have solved the problem. I tabled the amendment because I think we are missing a key debate, and I am still not quite clear about when we are going to get that debate. The Minister said that legislative change in this area is not right, but he failed to explain why it is not right. Perhaps he will write to me and explain in a bit more detail. There is something here. It is clearly contentious, and we are not going to be able to discuss it very well in secondary legislation. I think we are missing an opportunity here.

On parody, we are still left with a problem that was not addressed in what the noble Viscount said. The legal problem with parodies is that,

“they need to be close enough to the original to be recognised by the audience as a parody in the first place, which means that they will almost inevitably infringe copyright”.

How do we get out of that? These words are quoted by the IPO. They are from somebody commenting on a case which sets the situation here quite well: “Newport State of Mind”.

We will not solve this today, and there is no point in continuing it. I shall withdraw the amendment, but when can we have these debates? I beg leave to withdraw the amendment.

Amendment 28DZA withdrawn.

17:15

Amendment 28DZB

Moved by

[Lord Stevenson of Balmacara]

28DZB: Before Clause 65, insert the following new Clause—
“Exploitation of two-dimensional images of articles embodying designs derived from artistic work
(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In Chapter 3 of Part I (acts permitted in relation to copyright works), after section 51 insert—
“51A Exploitation of two-dimensional images of articles embodying designs derived from artistic work
(1) This section applies where a design has been made available to the public, in the United Kingdom or elsewhere.
(2) It is not an infringement of copyright in the design itself (if any), or any artistic work embodied or incorporated in it, to make, distribute, communicate to the public photographs, graphic or reprographic reproductions, films, or other two-dimensional images of articles embodying the design.
(3) The Secretary of State may by order make provision excluding from the operation of this section such articles of a primarily literary or artistic character as he thinks fit.
(4) An order shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5) In this section—
(a) design has the meaning found in section 1(2) of the Registered Designs Act 1949;(b) “making available” means making available to the public by publishing following registration or otherwise, or exhibiting, using in trade or otherwise disclosing.””

[Lord Stevenson of Balmacara]

I shall speak also to the other two amendments in the group which are in effect variations on a theme. Article 17 of the Designs Directive (98/71) and Article 96(2) of the EU Design Regulation (6/2002) leave to member states the freedom to regulate the extent of protection offered by copyright to designs. The amendments in this group seek to pre-empt what the Government intend to do in this complex area, which is to repeal Section 52 of the CDPA, by means of a general fair use provision and a narrower images exemption.

Amendment 28DZB seeks to protect the interests of many of the third parties affected by the Government’s proposal: those who have created images of existing designed articles. This includes publishers who have included images of old designs in their works, museums, individuals using images of design on websites, educators wanting to use images in teaching, photographers, picture libraries and so on. Many of these people will have invested in the production of images and films of designed articles when it was lawful to do so. Their interests are not likely to be protected by a transitional rule allowing stocks to be sold off; every time the images are shown in public, or reproduced, there will be an infringement.

This images exemption seeks to protect these third parties by allowing the making and exploitation of two-dimensional images and films of designed articles which have been placed on the market. In fact, it goes a little further than protecting these third parties during a transitional period, as it will permit such images to be created and sold in the future. This is a narrow derogation from the serious expansion of rights of design proprietors by the repeal of Section 52 and, in my view, does not prejudice the normal exploitation or the legitimate interests of the copyright holder. I think there is a major issue here, and I hope very much that the Minister will have further thoughts on this issue as he listens to this debate.

Amendment 28DZC builds on the breadth offered by the directive and the regulation. As drafted, the provision seeks to minimise the uncertainty inherent in a fair-use defence, such as that available generally for copyright under US law, with its white list and black list of deemed fair and unfair uses, leaving other uses to be judged in the individual case by reference to relevant factors.

One goal of this amendment is to protect follow-on designers: those who incorporate parts of old designs but transform the totality. It is well known that designers build with and on the design ideas of their predecessors. I believe the extension of copyright term to life plus 70 will make this much more difficult because of the sheer length of the term and because copyright protection is stronger in many ways than design protection. In my view, this issue has not been given sufficient weight, as we need to give careful consideration to the needs of future generations of designers.

Under existing design law, copying a part of an old design and incorporating it in a new, transformed design would not infringe any of the 25-year registered design rights unless the overall design produces on the informed user the same overall impression. However the copyright test is different. Copyright prohibits reproduction of any part of a protected work. One of the proposed white list of fair uses ensures that no use of a copyright-protected design infringes unless it would produce the same impression on an informed user. In short, it harmonises the copyright test with the EU design test.

Another goal is to protect educators, publishers, film-makers and website operators who use images of designed articles in their teaching, in their books, in their films and on their websites. These uses would be white listed as automatically fair. The black list deems unfair any use of a design in making an article which does not credit the original designer. It may be fair to start making old designs which are no longer being marketed—for example, fabric or wallpaper designs—particularly where the designer or design owner cannot be found. This clause indicates that it would not be fair to do so without indicating the origin of the original design.

However, the debate on this issue revolves primarily on whether the Government are right to delete Section 52 of the Copyright, Design and Patents Act 1988, whether by so doing and ending the current regime of registered designs they have fully considered all the issues which flow from that decision, and the implications that arise for products which are or are about to be out of rights protection under the present registered design period of 25 years, which will in future be in copyright for a period of 70 years after the death of the designer.

There is, of course, a very good case to be made for letting industrial designers have the same protection for their efforts as is available to composers, writers and the like, but I think there are some real questions about this issue, which might suggest to the Government that a pause for reflection before implementing this major change might be sensible.

One practical effect of this repeal will be to make replica versions of classic designs, such as Jacobsen’s egg chair, unaffordable to many consumers. Additionally, the creative freedom of future designers will be constrained because of the need to avoid breaching the copyrights of older predecessors, which cuts across the very essence of much industrial design.

Why was this proposal not preceded by a full consultation with stakeholders? Why has the impact assessment that has been published in fact got very little detail about the impact? Moreover, the assessment seems to have failed to acknowledge the impact on anyone other than designers, those who make and sell replica designs, consumers and the Government themselves. Would the Minister not agree that this initiative has not been handled properly?

The Minister may well argue that the Government had no option but to legislate. If that is the case, can he confirm that the Government are rushing to legislate on the basis of one recent European case, Flos SpA v Semeraro Casa e Famiglia SpA, which has been reported recently? The case concerned the design of the famous Arco lamp, consisting of a long, curved, metal arm supported by a marble block and finishing with a silver globe-shaped lampshade. I should declare an interest since I have one of the original design, fully paid for, at home. The design was created in 1962 by the Italians Achille and Pier Castiglioni, and any industrial design protection the design had once possessed has lapsed. Flos nevertheless claimed copyright in the lamp and that it had been infringed when Semeraro imported its Fluica lamp into Italy from China.

I am no lawyer, but I think we need to be sure that the UK response to Flos is appropriate and proportionate. The Government have decided on the basis of this single and recent case that we should abandon the whole of our registered design margin of appreciation. Surely the better approach would be to try to maintain Section 52, as that was explicitly agreed between the UK Government and the Commission during the process of adoption of the design directive. For the avoidance of doubt, as I have already said, there clearly is a good case for giving industrial designers the same copyright protection as applies to other creative industries, but the fact is that we currently have a different regime, and harmonisation of design and copyright should not be an end in itself or be driven by one isolated case.

The impact assessment is far from complete, but it admits that the reform of Section 52 will harm consumer welfare as classic designs—those that are more than 25 years old—will be re-monopolised. Replicas, currently available at some 15% to 20% of the price of the original, will no longer be available. No opportunity has been taken for consumers to be consulted. Moreover, there are those who argue that the impact assessment significantly underestimates the other costs that will arise, particularly because of its focus on furniture and three-dimensional design.

The Government believe that the change would encourage innovation and investment in design, but this is supported by the flimsiest of arguments in the impact assessment and no new evidence is offered to explain why the balance of interests between designer and owner, competitors and consumers, should be drawn differently today than in 1988 or indeed in 1994-95 when the Government successfully negotiated to retain Section 52 of the CDPA.

I am also concerned—and here I echo the comments made recently by my noble friend Lord Howarth—that as yet we have no idea what the traditional arrangements will be when Section 52 is repealed. Will it be on existing stocks and on articles which are out of copyright and which will now gain further periods of protection? Surely we need to see the draft proposals in this area as soon as possible and certainly before Report.

In conclusion, I should like to return to the question of the impact that this change will have on firms whose registered designs have come out of protection but which may now regain copyright protection to the detriment of consumers but to the benefit of rights holders.

I mentioned the egg chair, but it has been suggested to me that another area which will be affected is wallpaper. Wallpaper is within the current scope of Section 52 and is not in the exclusion for matters of a “primarily literary and artistic character”, so the change may well benefit companies in this field. The Minister will be aware of the firm Osborne and Little, which is primarily a wallpaper maker, founded in 1968. As I understand it, designs that were first produced and sold by that company between 1968 and 1987 will, if this clause goes forward, come back into copyright. It might therefore be for the benefit of the Committee if the Minister could confirm whether his right honourable friend the Chancellor of the Exchequer has been alerted to this change, as it may be of some considerable interest to him. I beg to move.

[Lord Clement-Jones]

My Lords, I strongly support Amendment 28DZB, and I shall also speak to Amendment 28EB. More particularly, in view of the very cogent introduction to Amendment 28DZB given by the noble Lord, Lord Stevenson—it was a tour de force, in my view—the fact is that Clause 65 looks more problematic the more one looks at it. The problems are exacerbated as there was no prior consultation by the Government on these provisions, nor is any cost or benefit set out in the impact assessment. Indeed, there has been no really authoritative review of the impact of the ECJ case mentioned by the noble Lord—Flos v Semeraro—and on whether it really does oblige the UK to repeal Section 52.

On the one hand, the design industry says that it has limited benefit, covering only works of artistic craftsmanship and only then pre-1989 designs and the introduction of the unregistered design right regime. The industry also says that works of art produced before 1957 would not benefit from the full copyright protection. On the other hand, many, including the publishing industry and the art and museum world, are very concerned about the impact of the clause on their ability to produce two-dimensional images of these kinds of artistic works, as the noble Lord, Lord Stevenson, has explained.

The proposed new clause is intended to apply the same term of copyright protection to artistic works as the term enjoyed by other copyright works—that is, the lifetime of the creator plus 70 years following their death. Currently, where more than 50 copies of an artistic work are manufactured, the term of copyright is only 25 years.

Publishers are rightly concerned about the impact that this clause may have on the publishers of books that include images and descriptions of artistic works which will now be subject to extended copyright. Such publications would be likely to find themselves retrospectively in breach of copyright. Without this kind of amendment, the clause could, as the British Screen Advisory Council has emphasised—I think that my noble friend Lady Brinton will be extremely interested in this—even include props used in a film and articles in a location where filming has taken place so that this is deemed to be copying of an artistic work which would otherwise have been permitted by Section 52. The position of websites, so important for public access and education, would also be uncertain. It would be even more disastrous if retrospective clearance were required.

I strongly support Amendment 28DZB, which would put this matter beyond doubt. I was delighted to see that it is also supported by the V&A, which is as good a judge as anyone on these matters and is able to take a balanced view—again, we have the word “balance”. However, I do not support the introduction of the novel concept of fair use in Amendment 28DZC, although I understand the motive behind it.

As a preferable alternative, Amendment 28EB, suggested by a group of professors of design and others, tries to meet the needs of follow-on designers—the designers of today and tomorrow that the noble Lord, Lord Stevenson, talked about. There are two concerns that underpin this amendment, particularly from those who have a great deal to do with up and coming designers. Copyright, as they explain, is in important respects more restrictive on follow-on designers than the protection given by community and national registered and community unregistered design rights, which limit protection for the making of articles which do not produce on the informed user a different overall impression. So if a designer uses part of an existing designed article but incorporates it in something that overall appears different, under the community registered and UK registered design, there is no infringement. In contrast—and I know that the noble Lord, Lord Stevenson, put this in other words—copyright has been interpreted to prohibit the reproduction of any part which is itself original in the copyright sense of involving creative choices. So if a motif from a textile or wallpaper—we are back to wallpaper—is copied but put in a very different context, there will be infringement of copyright, but not design rights. These professors say that the difference is not widely appreciated, as it depends on a detailed understanding of each legal regime, added to which we are only starting to get court decisions on the interpretation of the community design test and the EU copyright notion of reproduction in part.

17:30

The implications are significant, and they are seriously worsened if we extend the duration of protection from 25 years to life plus 70, which in the case of a design made by a designer at the age of 30 who dies at the age of 85 would be 125 years. New and contemporary designers will not be allowed to reuse any original part of existing designs dating back for much of the 20th century. They say that we tend to hear more from established designers in the design industry not fully appreciating the implications for the future. So while generally supporting the intention behind Clause 65, it does need some important amendment. At the very least the clause, even if amended along the lines suggested, should not be brought into force until there has been a consultation and appropriate provision has been made to protect the interests of third parties in future as well as during a transitional period.

[Baroness Warwick of Undercliffe]

My Lords, there are concerns about the impact of Clause 65 on designers and manufacturers, but this amendment seeks to address a problem which the clause will create for anyone who wants to use a two-dimensional representation of a design that is in copyright. This will affect a wide variety of users, but I am most concerned about the impact on those involved in teaching design. I declare a non-financial interest as a member of the council of University College London.

It is obvious that one cannot teach design without being able to show images of designs to your students. If you want to do this by example, showing a PowerPoint slide of a design during a lecture and the item is in copyright, you need a licence. If the term for industrial designs is increased to 70 years plus life, that means that you will need a licence for almost all 20th century designs. Many of these will be orphan works, so securing a licence under the current law would be difficult if not impossible. This would be eased by the orphan works provisions, which we will come to shortly. Meanwhile, this will have a real impact on the teaching of creative subjects.

In copyright, we have had almost nothing but consultation for the last decade, yet there was no consultation of non-commercial users here. The Government should consult all those potentially affected by the impact of this clause. The proposed amendment would be a proportionate response to the problem, allowing teachers, lecturers, museums, publishers and libraries to use photographs of designs without the need of a licence. It is in the interests of the creative sector that we allow such uses.

[Viscount Bridgeman]

My Lords, I speak to Amendment 28DZB, which has been so ably covered by the two movers of the amendment. I support this amendment as far as it goes, but it needs to make the distinction between incidental use, such as a passing shot of a chair on a TV programme, and one with a wider agenda—for example, financial or political. A well known example of the latter is the case about two years ago brought by Unilever, owners of the Marmite brand, against the BNP, whose image of a Marmite pot was a major feature on the BNP website. This resulted in an out-of-court settlement in favour of the plaintiffs. I hope that the Minister will take note of this proposed adjustment to the amendment.

[Lord Howarth of Newport]

My Lords, I support Amendment 28DZB. My noble friend Lord Stevenson of Balmacara has explained to the Committee why the jurisprudence of the European Court of Justice does not require after all that the Government repeal Section 52. I hope that the Government will think again very carefully about what they are doing.

I commend to the attention of the Minister and his officials the submission that other noble Lords will have received from Professor Lionel Bently of the University of Cambridge, which deals authoritatively with this matter. There would be significant and seriously unfortunate implications for teachers, publishers, museums, photographers, artists and filmmakers.

I echo and endorse the points very well made just now by my noble friend Lady Warwick. The impact on the practical ability of teachers of design to teach their discipline properly would be very damaging. If we undermine the teaching of design in this country, we do deep damage to the creative economy and make it less likely that new copyright and intellectual property will be developed for the benefit of our culture and our economy in the decades that lie ahead.

[Baroness Brinton]

My Lords, I particularly support the comments made just now by the noble Baroness, Lady Warwick, and the noble Lord, Lord Howarth of Newport, on how the proposals would affect teachers in schools, colleges and universities. We have already heard that in order to use any type of digital information, users will need to apply for a licence. In addition to teachers, publishers reproducing photographs of industrially produced articles or museums and archives wanting to display them will also require licences. Along with other noble Lords, I am concerned that this will stifle the development of the creative sector, which is vital to the growth of the economy. There needs to be a balance between what is trying to be achieved and the practical problems that teachers and others would face.

I am also concerned that the government impact assessment focuses solely on commercial designs—as was pointed out by the noble Lord, Lord Stevenson—particularly replica furniture and other household goods. It is essential that non-commercial users are also consulted; they are currently covered by Section 52 of the CDPA, as has been mentioned. Those would include academics, museums, archives, libraries and publishers to make sure that the repeal of this provision does not have a negative, unintended consequence.

On Amendment 28EB, I am grateful for the reference by my noble friend Lord Clement-Jones to props in theatre. Unfortunately, the second paragraph of his amendment would create a practical problem. Before I went to Cambridge, I was a stage manager at the BBC. When you ordered a prop, you ordered it in one of three forms. It was either fully practical, for example a phone that would ring and you could speak to somebody; practical, so that you could pick it up and it would look and sound like the real thing; or non-practical—basically wood painted to look like the required item. All three of those were an identical telephone. Unfortunately, the clause would create a real problem, because the intention was to produce the article, as defined here, with no intention at all to infringe any copyright. I suspect that, with phones being so cheap these days, people do not go to the bother that they used to in the early and mid-70s when I was carrying out these orders, but there are plenty of other things within the creative sector that would be caught by this unintentional consequence.

[Lord Clement-Jones]

I want to respond very briefly to my noble friend. This amendment is intended for an entirely different purpose. It is not designed to deal with the props issue. The amendment put forward by the noble Lord, Lord Stevenson, was to deal with that, but this is to deal with an entirely different issue to do with follow-on design. Young designers use inspiration from an existing artistic three-dimensional work and want to incorporate that. That is the purpose of this amendment. This is needed in addition to other amendments to the clause. That is why the more you look at Clause 65, the more problematic it becomes.

[Baroness Brinton]

I am grateful to my noble friend for that clarification.

[Viscount Younger of Leckie]

My Lords, Amendments 28DZB and 28EB are intended to ensure that artistic works can continue to be used in two particular ways after the repeal of Section 52 of the Copyright, Designs and Patents Act, or CDPA for short: first, that it shall not be an infringement to use an image of an article protected by copyright in a film, photograph or book; and, secondly, that it shall not be an infringement for new designs to use motifs from artistic works protected by copyright. For example, following the repeal of Section 52, a publisher who reproduces a photograph of any artistic work in a book may need to obtain permission to do so. Similarly, the scope for follow-on design may be restricted. The amendments are intended to make special provision for those circumstances.

The repeal of Section 52 means that all artistic works, irrespective of how and by whom they are used, will be treated equally under the law. The amendments seem to be intended to create special cases for particular uses of works. It is not clear that there is a compelling reason for some artistic works to be treated differently in that way. For example, why should it be necessary for a filmmaker to obtain permission to reproduce a painting by Francis Bacon, but not for another artistic work, such as a designer lamp?

Amendment 28DZC would create an exception that would cover the situations outlined above, but it goes further. It would in some circumstances allow the production of replicas and not just images of articles protected by copyright. As drafted, this would not be compliant with existing law.

There is another aspect to consider. In December, the Government announced changes that will be made to copyright exceptions. These will include, for example, an amended quotation exception, which will permit the use of photographs of artistic works in situations that the courts determine to be fair, and new exceptions for education. Those could cover some uses envisaged under the amendment. I reassure the Committee that the issue can be returned to when we have some experience of how the new arrangements work.

I shall pick up a number of points raised by noble Lords. First, I did indeed spot the article in the press this morning concerning the family business of a well known member of this Government. I think that the question of the noble Lord, Lord Stevenson, was: is it true to say that the wallpaper produced by the Chancellor’s family-owned interior design business will qualify for copyright protection? The repeal of Section 52 could benefit anyone who owns the copyright in a wallpaper, but not all wallpaper will qualify for copyright protection. That will depend on, for example, whether the wallpaper meets the requisite standards to qualify for copyright protection and is, for example, sufficiently artistic and original. Ultimately, that will be a matter for the courts to decide. The Government and the Design Council consider that the repeal of Section 52 will benefit young designers, as it should lead to UK designers developing new designs in markets that become less dominated by copies of artistic works. I hope that noble Lords find that particular example helpful.

It is important to address the point raised by the noble Lord, Lord Stevenson, concerning consultation. Indeed, it was an issue addressed by the noble Baroness, Lady Warwick. It concerns what consultation there will be before the repeal of Section 52. The UK is one of the few member states that has such an exemption. Further consideration will be given when the Government consult on how and when to bring that into force. Further to that, I reassure the noble Lord, Lord Stevenson, that the Government have discussed the repeal of Section 52 with interested bodies, including representatives of sellers of replicas of classic design furniture, such as Scott Howard Office Furniture. We have also had discussions with the Publishers Association, the chairman of the IP Bar Association and Professor Lionel Bently.

The Government will consult formally on how and when the repeal should take effect. We want to hear from affected firms to ensure that the right transitional arrangements are in place to allow them to adjust—for example, by modifying their supply agreements where necessary. The Government believe that it will be business as usual for many British firms who manufacture or sell affected replicas.

The noble Lord, Lord Stevenson, highlighted the question of how Clause 65 is supported by designers. Designers argue that the law undermines the integrity of the design industry and may make British companies less willing to support long-term investment in areas such as furniture design than their European competitors. I quote Sir Terence Conran:

“By protecting new designs more generously, we are encouraging more investment of time and talent in British design. That will lead to more manufacturing in Britain, and that in turn will lead to more jobs—which we desperately need right now”.

Tom Dixon, a British designer, has said:

“Current copyright laws leave designers woefully under protected compared to similar creative professions. This initiative is a small step toward establishing much needed protection of valuable intellectual property”.

The Government have considered these issues very carefully. I hope that in the light of the above, the noble Lord, Lord Stevenson, will withdraw his amendment.

17:45

[Lord Clement-Jones]

Briefly, my Lords, if I may, I understand everything that the Minister has said, but I was a bit flabbergasted by the final statement that the Government have considered this very carefully. The Minister mentioned a few people whom the consultation had taken place with, but the fact is that those people who are suggesting amendments are the very people with whom the consultation has taken place—the Publishers Association and seven professors of design who, after all, ought to know whether young designers are going to benefit from this kind of provision. They have a clear view when they are looking at young designers in the future. There are seven of them, from the University of Cambridge, King’s College London, the University of Glasgow, Oxford, University College London, Bournemouth University and the University of Edinburgh. If they do not know what is going on in the field, who does? They have grave concerns. I felt that the Minister’s response was both disappointing and rather dusty. Perhaps he could give some sort of undertaking to look at this a bit more carefully rather than simply saying, “There is no amendment possible to this clause; all that is available is consultation over how it is brought into effect”. Surely that is unacceptable in the light of all the concerns that have been raised about Clause 65.

[Viscount Younger of Leckie]

I have listened carefully to my noble friend Lord Clement-Jones on these matters and have taken note. I am not sure that I can convince him that consultation is the right way forward, but I hope that he will accept that. I doubt that he will, but I have taken a firm note of what he has said.

[Lord Stevenson of Balmacara]

My Lords, I am grateful to everyone who has contributed to this debate. We all broadly sung much the same tune. There are minor changes and I accept the point about the incidental and substantive issues and the need to be careful that we do not knock out the use of props in trying to find a better solution than the one that the Government are proposing.

I am afraid, though, that I echo the comments of the noble Lord, Lord Clement-Jones, by saying that I do not think that we got to the heart of the debate here. To be fobbed off with the idea that somehow by taking these rather extraordinary Henry VIII powers—probably on the wrong legal basis and almost certainly heading in the direction of a conclusion that almost no one else, given the same facts, would arrive at—and then to be told that we can return to this once we have experienced how the laws work does not seem to be a very satisfactory way of going about this.

This needs a bit more consideration and debate. As was said, many of the issues here are not party-political in the sense of opening up great divides between us. We all want a solution to this; I have said twice that I am not against the idea that in the medium to long term we should find a way of establishing a comparability of status for industrial designers and those in the other creative industries. On the other hand, as the noble Lord, Lord Clement-Jones, said, life plus 70 years is a very long time. To change radically, in one short clause in a Bill that is largely about other things, from 25 years to life plus 70 is a big step. We are not saying, “Don’t do it”, but we are saying, “Let’s talk about this a bit more and try to get a better sense of what the issues are”. As someone said—I think that it was the noble Baroness, Lady Brinton—we are concerned about avoiding unintended consequences. There are some already, and we have picked up several of them in the examples that we have given today.

On wallpaper, I thought that hoping that the Hargreaves report would come to the rescue was a little limp. We are not talking about the sort of designs that might be found in commercially popular suppliers of cheap paper and products; we are talking about those people who have registered designs that they have utilised in a perfectly appropriate way in their business to obtain a suitable return on their investment for a number of years. That is changing from 25 years to life plus 70 where the registered design is in the ownership of the company. That is a very large step indeed.

I used that only as an example. I did not want the Minister to be defensive about it, but it made my point well. The approach that he has taken simply does not answer the question. I am sure that we will have to return to this but, in the interim, I beg leave to withdraw the amendment.

Amendment 28DZB withdrawn.

Amendments 28DZC and 28DZD not moved.

Clause 65 : Exploitation of design derived from artistic work

Amendment 28DA

Moved by

[Baroness Whitaker]

28DA: Clause 65, page 61, line 8, at end insert—
“( ) in Schedule 1, paragraph 6;”

[Baroness Whitaker]

My Lords, this group of amendments is about Clause 65 as it affects the creators of the work and thus it has a different slant. I apologise for not being able to speak at Second Reading to indicate the line of the amendments in my name and that of the noble Lord, Lord Jenkin of Roding, but they are very much in the spirit of the Government’s repeal of the exception provided in Section 52 of the 1988 Act, which I applaud. I am glad to say that the design industry is in favour of our amendments and I am grateful for its expert comments.

Amendment 28DA simply completes the protection for our creative designs that the Government provide by their initial repeal by applying it also to works of art made prior to June 1957. Most heavily copied classic designs, such as the Eames chair, were created prior to 1957, so without this amendment the Government’s repeal would be of limited value and, incidentally, would leave the UK in breach of the European Court of Justice’s decision in Flos, to which my noble friend Lord Stevenson and other noble Lords have referred.

Amendment 28FA also completes, I submit, the Government’s intention in their repeal. The two provisions in it are almost consequential to Clause 65. The amendment to Regulation 16 of the Duration of Copyright and Rights in Performances Regulations 1995 ensures that the regulations apply to copyrights that were never protected under previous legislation but will be now. If Regulation 24 of those regulations were not amended as we suggest, the making or import of copyright-infringing articles would be permitted indefinitely, on payment of a royalty, in cases where, for instance, a furniture design has been revived. This again is incompatible with EU law. Without this amendment, some of our most important and iconic designs would not receive the protection that the Government appear to have in mind.

Amendment 28EA ensures a short transition period of four months, but with the possibility of a four-month extension if warranted, for third persons who manufacture or who hold stocks of copies of design works within the European Economic Area. Most of these replicas are not made in the EEA—we all know where they are most likely to originate. The repeal of Section 52 will not have any substantial impact on employment or businesses in the UK, so it is reasonable to allow a short time for them to comply, with a proportionate extension to strike a balance—there we go again with balance—between the rights of designers and the interests of undertakings caught by the new law.

In conclusion, I draw noble Lords’ attention to the present situation for our many talented designers who add so much to our economic strength, as the Minister said. Because there has been insufficient protection, the UK has become a safe haven for the sale of replicas of designs that breach copyright. Only two other countries in Europe fall short of good practice in this way: Estonia and Romania. Indeed, there are several criminal prosecutions pending against UK-based suppliers in other countries. The damage to the reputation of our design market—potentially one of our great strengths—is immense. No British jobs are at stake if we implement these amendments and fair competition as well as our international reputation will be improved. Our brilliant design businesses will have more security to develop. It is a win-win prospect. I beg to move.

[Lord Jenkin of Roding]

My Lords, I added my name to the noble Baroness’s amendment. I, too, have had representations from the organisations that represent designers, and emphasise one point made by the noble Baroness: that many of these replicated designs are not made in the EEA, and certainly not in the UK. One group conducted considerable research on this subject and discovered that quite often a UK name is linked with the design, but that when you go behind that you find that it is largely a sham. It is quite clear that all this comes from abroad, so merely repealing Section 52 by itself will not achieve the Government’s intentions. As for their representing it as being of considerable value to designers, I have to say that without the two amendments in this group which the noble Baroness has tabled, it will be largely ineffective.

I hope very much, therefore, that the Government will feel able to accept these amendments. As the noble Baroness said, they complete the reform which the repeal of Section 52 is intended to provide. They add nothing that is extraneous to it, they merely make it effective, and I am sure that that is what the Government want. I hope very much that my noble friend the Minister will feel able to give these amendments a fair wind.

[Lord Howarth of Newport]

My Lords, I oppose these amendments. It seems to me that the extension of copyright design from 25 years to life plus 70 years is altogether excessive. That could amount to something like 120 years, and it would be particularly unfortunate if we were to extend the proposed provisions to apply to designs created before 1957. I entirely support the principle of a fair return to designers and to their estates, but it seems to me that 25 years is sufficient. I am not in favour of protecting the monopoly of the purveyors of Eames chairs, which my noble friend Lady Whitaker cited as an instance, or indeed of Eileen Gray chairs or any other famous and beautiful designs that would be affected by this amendment. It seems to me that the prices that are charged to people who want to buy these pieces of furniture are quite outrageous. I ask my noble friend Lady Whitaker in particular why good design should be available only for the rich? I want to see Eames and Gray designs for the masses.

I further note that the proposals in these amendments are protectionist. That does not seem to me to be particularly constructive. They are keen to keep out replicas that might be made elsewhere. If we were not to perpetuate beyond 25 years the inhibition on manufacturing and retailing in this country, we would do good to a significant sector of our economy and we would enable the quality of life of a significant number of people to be significantly improved. So personally I do not favour the amendments that have been proposed.

18:00

[Lord Clement-Jones]

My Lords, I speak to Amendments 28E and 28F. The Government, and indeed the IPO, published a factsheet on copyright protection for designs, but with the best will in the world this was not adequate, especially in the absence of an impact assessment. The Government need to provide detail in the Bill on the transitional arrangements that they intend to introduce. Without clear and explicit communication about those arrangements, manufacturers and others affected—we have heard that considerable numbers will be affected—will not feel confident that their works and therefore businesses will not be affected. Waiting for the Bill to pass before consulting on transitional arrangements is surely unacceptable and creates a climate of uncertainty. The Government need to be clear as to what they believe is an acceptable and legal transition period. Under European law, the UK Government may have limited scope to introduce transitional arrangements that would be broad enough to mitigate a significant and detrimental impact on third parties. We know that, at the very least, a period of 10 years’ transition has been ruled by the ECJ as being too long, so it is vital to know what period of transition the UK Government believe would be in compliance. Will the Government provide an impact assessment to analyse the effect of various transitional provisions under the clause on the publishing and other third parties? My amendments put forward two rather different suggestions for the transitional period for replicas of artistic designs and are an attempt to tease out the Government’s real intentions. The first amendment is very similar to that put forward by the noble Baroness, Lady Whitaker, and is designed to flush out the process by which the Government intend to introduce transitional provisions. The second, along the lines of that of the noble Baroness, Lady Whitaker, is designed to probe the actual transitional provisions.

Amendment 28F would ensure a short—six months is more reasonable than four—transitional period for products manufactured within the EEA, and third persons that hold stocks of unsold items in the EEA. That is a variation of the amendment proposed by the noble Baroness, Lady Whitaker. It also foresees a six-month extension if a third party provides justification of some exceptional circumstances. The design companies say that most companies offering replicas of artistic designs do not manufacture those products in the EEA. We heard that from the noble Baroness and from the noble Lord, Lord Jenkin. They say that most replicas are imported from Asia. Has an assessment been made of this, and has it been assessed as part of the likely transitional periods? A six-month transitional period under Amendment 28F could be extended up to 12 months. It would also be in line with EU law by being proportionate and not going beyond what is needed to ensure an appropriate balance between the interests of the right holders and the legitimate expectations of the parties concerned.

[Viscount Younger of Leckie]

My Lords, Amendment 28DA seeks to ensure that copyright is revived in works of artistic craftsmanship created before 1957. This would apply, for example, to works such as the Wassily chair, designed by Marcel Breuer in 1925 to 1926. Chairs seem to be a favourite theme today. The noble Baroness, Lady Whitaker, mentioned a chair; I was not entirely clear what type of chair it was.

The law in this area is complicated, but the term directive is clear. If the chair was protected by copyright in any other member state before 1995, copyright would also have to apply in the United Kingdom. Amendment 28FA also concerns those works in which copyright is revived. It seeks to remove those provisions which impose an obligation on the owner of a revived work to grant a licence even if he would prefer not to do so. The noble Baroness, Lady Whitaker, has raised an interesting point with this amendment that deserves further consideration. We shall have the opportunity to consider these very specific issues more carefully before the clause is commenced and there will be the opportunity to deal with the issue in the relevant regulations.

Amendments 28E, 28EA and 28F seek to set out the transitional provisions which govern how the change in the law will apply to articles made or imported into the UK or EEA when the law is changed. The Government are aware that there are potential impacts on businesses that manufacture or sell replicas and are committed to consulting on how and when to implement the changes.

My noble friend Lord Clement-Jones asked whether there will be an impact assessment to show the potential effects of the transitional provisions on producers and other third parties. The Government have already produced an impact assessment and will ensure that it is kept up to date as the legislative process moves on.

There are pros and cons to setting a relatively longer or shorter transition period. We understand how that concerns my noble friend Lord Jenkin and the noble Baroness, Lady Whitaker. It will be important that any decision on transitional provisions takes account of the consent of all parties involved. That includes, for example, the length of existing supply contracts and leases for warehouses where products are stored. I confirm to the Committee that we intend that existing stock in the UK will not be affected by the change in the law; the change will apply only to items manufactured or imported after that date. If an express transitional provision proves necessary, the regulations shall provide for it.

This change in law needs to be introduced in a measured way, balancing the needs of the parties involved. The Government have carefully considered the issues and I hope that, in the light of the above, the noble Baroness and my noble friend will not press their amendment.

[Lord Clement-Jones]

I shall intervene only briefly. It is good news to hear that there is an impact assessment on business and other third parties which will be regularly updated, but, personally, I am none the wiser about the Government’s intentions about time periods for the transition. It is rather baffling. If there is an impact assessment which helps to inform government policy in this respect, it has not been used to take the next step, which is to give a concrete view of the proper period, how the transition will take effect and on whom it will impact.

If the regulations are in the offing, it would be extremely helpful for the Minister at least to give us a glimpse of some of the thinking, which might allay some of the concerns raised in this short debate.

[Viscount Younger of Leckie]

I can only reiterate to my noble friend Lord Clement-Jones that we are committed to continuing to consult. The best way to respond is to say that we will continue to keep him informed on progress. Progress is not intended to be slow; we intend to proceed with this as fast as we possibly can and to present a timetable wherever we can.

[Baroness Whitaker]

I am most grateful to the noble Lord, Lord Jenkin of Roding, and all others who spoke—even my noble friend Lord Howarth of Newport who, uncharacteristically, devalues the individual nature of creative inventions. If that individual, unique creation is not properly recognised and compensated, it will decreasingly be made, certainly in the UK. Apart from the simple injustice, which is the other point, there is an economic chilling factor.

I am grateful to the Minister—incidentally, it was the Eames chair that I mentioned; in fact, all the Eames chairs would qualify—but I hope for discussion with him before Report, because I think that we can arrive at some solution. I beg leave to withdraw the amendment.

Amendment 28DA withdrawn.

Amendments 28E to 28F not moved.

Clause 65 agreed.

Amendment 28FA not moved.

Clause 66 : Power to change exceptions: copyright and rights in performances

Amendment 28FB

Moved by

[Lord Stevenson of Balmacara]

28FB: Clause 66, page 61, leave out lines 15 to 31 and insert—
“( ) The Secretary of State may by regulation vary penalties in accordance with the penalties laid down in the Act.”

[Lord Stevenson of Balmacara]

My Lords, as originally drafted and debated in another place, this clause equipped the Government with wide-ranging and far-reaching powers to amend, remove or introduce exceptions to copyright via secondary legislation. It caused a fair amount of alarm and a lot of correspondence from those who were following the debate in another place. Many noble Lords present today will have received correspondence about this.

The amendments made during Report in the House of Commons clarified that the regulations,

“may make only such provision as may be made under subsection (2) of section 2 of European Communities Act 1972 or such provision as could be made under that subsection if paragraph 1(1)(d) of a Schedule 2 did not apply”.

I think that means that the Government’s stated aim is to,

“make it clear that [the clause] offers no further power than Parliament already has to make changes to copyright exceptions”.

However, we are disappointed that the language and scope of the clause continues to focus on exceptions to copyright, rather than criminal penalties, which ostensibly is its purpose.

If the Government’s intention is to safeguard criminal penalties for copyright infringement—which is absolutely necessary—we cannot apprehend why there continues to be such a resistance to making that intention unequivocally clear on the face of the Bill. Many of our correspondents would like to see this clause deleted in its entirety. Indeed, a number of proposals have been made in that respect. We have, however, proposed that amendments that seek to narrow and clarify the intentions of the clause in line with the Government’s stated aims, by stipulating that each proposed exception to copyright is subject to an individual statutory instrument and has its own associated economic impact assessment would be the right way forward. Reform of exceptions must not be bundled into a single SI.

Seemingly minor amendments related to changes in the scope of copyright exceptions can have significant commercial consequences for organisations that invest heavily in content creation and preservation. Each individual exception requires careful consideration. I beg to move.

[Lord Clement-Jones]

My Lords, I strongly support the amendments put forward by the noble Lord, Lord Stevenson. The stated aim of Clause 66 is to ensure that where secondary legislation is used to amend copyright exceptions, the existing penalties for copyright infringement would remain unchanged. This is stated in paragraph 506 of the Explanatory Notes. This stated aim by itself is unobjectionable. However, throughout the Bill’s passage through the Commons, MPs and outside organisations expressed serious concerns regarding the wide drafting of the clause—then Clause 56 and 57. The drafting was too broad and potentially involved the Government having significantly greater powers to alter copyright exceptions by secondary legislation than they currently enjoy. The Government amended this clause on Report. An amendment introduced on Report in the Commons permits the Secretary of State by order to change copyright exceptions within the scope permitted under subsection (2) of section 2 of the European Communities Act 1972—implementing European directives—and repeals paragraph 1(1)(d) of Schedule 2 to the EC Act in respect of such changes.

The new wording to Clause 66 gives some but not enough reassurance or certainty that the clause will be limited in application to penalties. The Government’s explanation of Clause 66 refers to penalties. Clause 66,

“arose as a specific consequence of our wanting to keep the strong penalties needed to remove exceptions.”—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 628.]

However, Clause 66 is headed “Power to change exceptions: copyright and rights in performances”. The clauses as added to the Copyright, Designs and Patents Act 1988, which they are intended to amend, will be headed “Power to add or remove exceptions to copyright” and “rights in performances” and the clause itself refers to copyright exceptions.

Furthermore, as the noble Lord, Lord Stevenson, said, there is no impact assessment and there has been no consultation on the clause. These amendments limit the clause to penalties—it removes the references to copyright exceptions. The Government have explicitly stated that they will not use Clause 66 to introduce exceptions. The Government stated that:

“Clause 56 is not part of the wider Hargreaves work but arose as a specific consequence of our wanting to keep the strong penalties needed to remove exceptions.”—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/2012; col. 628.]

Clause 69 is in many ways admirably concise in relation to penalties relating to copyright protection under the term directive. Clause 69 refers explicitly to penalties and is unambiguous. Why can Clause 66 not be drafted similarly?

I understand that officials have said that Clause 66 may be used to amend two sections, Sections 72 and 73 of the CDPA, but those issues are the subject of court proceedings and it is doubtful whether Clause 66 as amended would be able to address the issues adequately, because they lie outside the European acquis communautaire and further primary legislation would be needed in any event.

It is not surprising that in a recent meeting with stakeholders, an official of the IPO said that all are agreed that the current wording of Clause 66 is confusing. Why do we not make everything clear and take on board these amendments?

18:15

[Viscount Younger of Leckie]

My Lords, Amendments 28FB and 28JAA cover the scope of Clause 66. The Government recognise that concerns about this clause remain, despite their efforts to clarify the scope through a government amendment on Report in the Commons. The Government have looked carefully at these amendments and I believe that we understand the intentions of the noble Lord, Lord Stevenson. However, we believe there is the possibility that the amendments as currently drafted would in fact widen the scope of the Government’s power to effect changes in this area with respect to criminal penalties. I do not believe that that is what the noble Lord intended through his amendments.

The Government’s intention with this clause has always been to maintain the current level of criminal penalties whenever it is required to amend or remove copyright exceptions. However, there remain concerns about this clause, as reflected in the intention behind the noble Lord’s amendments. In this light, I am prepared to look again at what more can be done to ensure the clause does exactly what the Government intend and no more.

I hope that in light of the above assurances the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

I always get up when there is something to object to, but in this case I will thank the Minister for that reply. I am sure that the noble Lord, Lord Stevenson, will make a very positive response.

[Lord Stevenson of Balmacara]

My Lords, he does not give me much leeway, does he? I thank him very much, and I withdraw the amendment.

Amendment 28FB withdrawn.

Amendment 28G

Moved by

[Lord Clement-Jones]

28G: Clause 66, page 61, line 29, after “containing” insert “each individual”

[Lord Clement-Jones]

My Lords, I will speak to Amendments 28G, 28H and 28J. I will not speak to Amendment 28JA, but I support it, and I know that the noble Lord, Lord Jenkin, will speak to it.

As has been discussed, an earlier version of Clause 66 was the subject of extensive debate in the House of Commons, particularly in Committee. As a consequence of the points raised, the clause is amended, and I welcome the fact that the Minister has indicated a further amendment to give greater clarity about the intention behind the Bill since then. The primary intention behind this clause is to allow new exceptions to copyright to be accompanied by the introduction of higher criminal penalties for infringement: the power which the Government do not have under the ECA.

However, many copyright-owners in the creative industries are very concerned even—we heard concern expressed earlier, notably by the noble Lord, Lord Stevenson—that secondary legislation will be used under the ECA, not least the Law Society, of which I am a member. Secondary legislation is difficult to review or challenge, even though subject to the affirmative procedure of both Houses. This is what the Alliance for the Protection of Copyright says: “However, our support”, for Clause 66,

“should not be read as support for the introduction via secondary legislation of the exceptions proposed in the recent Copyright Consultation. Given the potential negative consequences”—

for UK creators associated with “these proposals” changes,

“should … be introduced via primary legislation allowing parliamentarians’ full and proper scrutiny”.

Of course, as I said earlier, following Hargreaves the Government proposed, and have started implementing, a copyright hub that without legislation and by the voluntary participation of rights-holders and users is intended to solve the problems perceived by Hargreaves, at which the exceptions by and large are directed. Therefore, there are many who claim that those exceptions are unnecessary.

However, even if secured by secondary legislation, exceptions that impact so greatly on the UK’s creative industry sector should not be bundled in a take-it-or- leave-it fashion, which would not allow the varying impacts of such proposals on separate creative sectors to be appropriately taken into account. At the very least, they should be accompanied by individual impact assessments and introduced in separate SIs. In the recent Modernising Copyright White Paper, it is stated that the Government intend to make changes to copyright exceptions in the smallest number of statutory instruments. Therefore, if secondary legislation is to be used, each proposed exception to copyright should be subject to an individual statutory instrument, contrary to that statement. Rights holders are concerned that the introduction of any new copyright exceptions, whether through Clause 66 or the ECA, must be done through careful consideration of each individual exception.

The other possibility—that exceptions be bundled together in a single statutory instrument—would prevent Parliament being able to accept some changes while rejecting others. Such a take-it-or-leave-it approach to copyright reform is wholly unsuited to the nuance and detail of the subject and risks there being a fudge across a number of different issues—for example, conflating questions around photocopying educational text books with the question of burning CDs.

There may, however, be some exceptions which are linked and which could be dealt with together. Some of the exceptions are interrelated. For example, I gather that the IPO believes that the exception on private study links with the exception for research and with the exception which permits libraries to copy for a researcher. Therefore, there is not an unreasonable demand where there are links. It will be important to ensure that changes across exceptions are consistent, and separate SIs for each proposed change could lead to problems of inconsistent law.

Each proposed exception should have its own associated economic impact assessment. As the economic evidence which accompanied the Hargreaves review of IP and growth sadly demonstrated, the economic analysis underpinning some proposed changes to copyright is either lacking or flawed. Officials have indicated that new impact assessments will be published alongside any proposed changes to copyright, and I would certainly welcome reassurance from the Minister that that will be the case. I beg to move.

[Lord Jenkin of Roding]

My Lords, I wish to speak briefly to Amendment 28JA. The noble Lord, Lord Clement-Jones, and I have discussed the issue of separate statutory instruments for each exception. As he said, they may have totally different effects and it would be quite difficult for the House to debate one single compendium of exceptions when they may involve very different interests and very different impacts. Mentioning impacts leads me to say that, if there are to be separate statutory instruments for each change passed under this clause, there should be separate impact statements.

Some weeks ago, I collected the impact statement for this Bill from the Printed Paper Office. I have not attempted to weigh it but it is about two inches thick and I must confess that I have not waded through it. Of course, the Bill contains a whole range of issues but one realises that, when departments produce impact assessments on this scale, you have to be a very devoted Peer and have plenty of time to be able to make anything of them. I suspect that some of the changes that may be envisaged as being achieved by order under this clause may be wholly unexceptionable, in which case so be it. However, there may be some which will be very controversial and should be properly debated, in which case they should have a separate impact assessment. That is the burden of the amendment to which I have put my name and I hope that the Minister will take account of it when he responds.

[Lord Howarth of Newport]

My Lords, the noble Lord, Lord Jenkin, is the most diligent of parliamentarians. If he has not been able to read the impact assessment from start to finish, that illustrates that we have problems in achieving satisfactory scrutiny of legislation.

I support Amendments 28H, 28J and 28JA because I agree with noble Lords who have already argued that it is important that we should look at the relevant statutory instruments one by one, in so far as that is realistic and practical.

I believe that it is realistic and practical for Parliament. There may be problems in that, as has already been suggested, the material contained within different statutory instruments may overlap with other statutory instruments to a degree, in which case one must proceed pragmatically. But it is right in principle that Parliament should have the maximum opportunity to examine secondary legislation. One could say that the more minimalist the primary legislation the more important it is to ensure that the secondary legislation that stems from it is thoroughly scrutinised.

We can be a little too defeatist in Parliament about the scope for satisfactory scrutiny of statutory instruments. When I was in the House of Commons, time was all too limited for examining SIs. As a self-regulating House, we are better placed to ensure that we examine statutory instruments more thoroughly in this House. We have committees of the House that take it upon themselves to do a lot of preliminary work on our behalf. There is a disposition and a considerable ability in your Lordships' House to do this job properly.

We cannot overstate the importance of some of this secondary legislation. The creation of new exceptions to copyright law can have a major bearing on the livelihoods of large numbers of people and on the performance of significant sectors of our economy. We owe it to the public whom we serve that we take the greatest care to ensure that these exceptions are properly formulated.

The presumption should be that each one is embodied in a separate statutory instrument and carries with it a separate impact assessment, which I hope will then be on a scale that the Minister and all the rest of us would be able to manage. I hope that the Minister will be able to give a full and formal assurance that this will be the approach of the Government.

[Lord Stevenson of Balmacara]

My Lords, I add my thoughts to those that have already been expressed about these issues and have some specific questions in relation to Modernising Copyright: A Modern, Robust and Flexible Framework, the latest publication dealing with the way in which copyright exceptions are to be brought forward, which was published in December 2012.

We have been blessed with substantial impact assessments. Indeed, we have discussed them. Unfortunately, I dropped mine on my foot as I was coming out of my office today and I am still limping as a result. It was really quite heavy. But it was very valuable because I have been reading it and I have got a lot out of it as has been clear in the comments made so far. One of the themes that we have discussed in this series of debates today is how copyright legislation should go forward. In particular, the example that we have had to use, because it is current, is that of the Hargreaves recommendations.

The Government's proposals, as outlined in their modernising copyright report, are that:

“The Government intends to legislate for a new system of permitted acts for copyright works, incorporating the changes discussed in this document. These changes need to be carried through consistently. In the light of stakeholder comments about the degree to which the existing Copyright Act has been amended since 1988, the Government will therefore introduce the system for Parliamentary approval en bloc rather than piecemeal, through the smallest possible number of Statutory Instruments”.

That is not what we are arguing for. We are saying in our amendments that we want more time and more discrete information to be provided. I would be grateful if the Minister, when he responds, could analyse why the Government have said that in relation to the points that we have made.

The Government go on to say that publishing statutory instruments en bloc,

“will help the system be clear and consistent”,

but we would argue quite the reverse. The Government then say:

“For this reason, the Government proposes that all the measures take effect at the same time, the intention being that they come into force in October 2013”,

which is a relatively short time in parliamentary terms. It will be difficult for us to get through all this in the appropriate way, given the sensibility of the discussions.

I support the amendments in this group. We discussed these issues when they were raised in a number of earlier areas. The Government must be in absolutely no doubt at all that these issues are large in the minds of those who have been corresponding with us. It would be useful if we could have a proper statement from the Minister on how things will go forward.

18:30

[Viscount Younger of Leckie]

My Lords, I will deal with Amendments 28G, 28H and 28J first. These amendments are all interconnected.

As set out in the response to their consultation on copyright, the Government plan to make changes to copyright exceptions. They have said that they will make these changes via secondary legislation, and it is the Government’s intention to do so using the powers that exist under Section 2(2) of the European Communities Act 1972, a point that I alluded to earlier this afternoon.

I assure colleagues that the Government will not use Clause 66 to make these planned changes. Bundling any statutory instruments that are needed to implement the proposed changes to copyright exceptions is therefore an issue that goes beyondthis Bill.

However, the Government recognise the concerns laid out in these amendments, particularly in eloquent speeches from the noble Lord, Lord Howarth, and my noble friend Lord Jenkin. Accordingly, in my capacity as Intellectual Property Minister with responsibility for implementing the Government’s policy decisions on copyright exceptions, I will commit to look at how the bundling of statutory instruments could be structured when they are brought to Parliament.

The Government appreciate and support noble Lords’ concerns about allowing adequate time for parliamentary debate and scrutiny. Detailed examination of legislation is the business of the House and I want to make sure that we can create that opportunity. In tandem, in relation to good practice with regard to statutory instruments, the Government are mindful of the views of the Joint Committee on Statutory Instruments, on which Members of both Houses sit.

The Government will also have to consider the potential need to ensure that where exceptions are inter-related they can be scrutinised together. For example, I understand that the copyright exception on private study links with the exception for research and that which permits libraries to copy for the researcher. In implementing these changes, I hope that noble Lords will agree that the Government will also need to be mindful of the administrative burden on creators, businesses and users of copyright exceptions, particularly private individuals, small and medium-sized enterprises, schools and academics.

Finally, when I bring forward the regulations on copyright exceptions, I will provide an explanation in an Explanatory Memorandum setting out the reasons for any bundling of statutory instruments.

Amendment 28JA seeks to ensure that the full effects of any use of this clause are made available for scrutiny. Impact assessments play an important role in the scrutiny of law making. Every statutory instrument laid before this House must be accompanied by an impact assessment. I therefore assure the noble Lord, Lord Howarth, that an impact assessment will be published for each and every use of this clause.

The Government are aware of and sensitive to the strength of feeling around some of the issues raised by these amendments. I hope that noble Lords can be assured that the Government have considered these amendments very carefully and that in light of the above they will be content not to press their amendment.

[Lord Clement-Jones]

My Lords, I think we are on a bit of a roll. We had better stay here for the rest of the evening and finish off Part 6. We seem to have gone from the beginning of Clause 66 and the Minister's assurances about looking at an amendment that will reflect the previous penalties amendment, to assurances that the Minister will look at this in his capacity as Intellectual Property Minister. He will look at how best these can be dealt with and they will not automatically be put into one bundle.

I understand exactly the point the Minister made about some being linked. Indeed, I made that point when I introduced the amendment.

[Lord Howarth of Newport]

Does the noble Lord not think that we should be asking a little more from the Minister? We should be asking for an assurance that the presumption will be that statutory instruments will not be bundled and that they will be taken together only when there is a compelling reason by virtue of the interrelatedness of their contents.

[Lord Clement-Jones]

That is a very fair formulation. Certainly, I was also reassured that the Minister confirmed that there would be an impact assessment for each and every one of the uses of the ECA in these circumstances. I look forward to the proper use of House of Lords scrutiny in these circumstances, to which the Minister alluded, because our scrutiny would be extremely valuable. The interpretation that I put on the Minister’s very useful assurances is very much that formulated by the noble Lord, Lord Howarth, so perhaps if the Minister disagrees with that he could indicate that at the same time.

[Viscount Younger of Leckie]

That is not exactly how I see it. I confirm that we do not want to prejudge any consideration. This is an ongoing discussion. There will not be a presumption on bundling; we want to talk about this further. So I do not particularly adhere to what the noble Lord, Lord Howarth, was saying.

[Lord Clement-Jones]

My Lords, the Minister just said that there will be no presumption on bundling, which is a very useful assurance. If I can take that from the table, that might be the most useful way forward. It would be very helpful if, before Report, the Minister could consider this matter further. Then, if such amendments are tabled again on Report, he can consider precisely how he thinks the statutory instruments can be put together, giving us further information about the nature—I shall not use the word bundling—of how those instruments are put forward for these exceptions.

[Viscount Younger of Leckie]

Perhaps I could just clarify the situation by saying that there is no intention to deliberately bundle.

[Lord Clement-Jones]

I thank the Minister. So if I see deliberate bundling, we will know that this is completely wrong and should never have happened. In those circumstances, I withdraw the amendment.

Amendment 28G withdrawn.

Amendments 28H to 28JAA not moved.

Clause 66 agreed.

Clause 67 : Power to reduce duration of copyright in transitional cases

Amendment 28JB

Moved by

[Viscount Younger of Leckie]

28JB: Clause 67, page 62, line 20, leave out from “unpublished” to end of line 21

[Viscount Younger of Leckie]

My Lords, before introducing amendments to this clause, I should like first to set out how the provisions in this clause will work. This is a complex area, and I understand some greater clarity may be helpful. At present, certain unpublished works that were created before 1 August 1989 remain in copyright until 2039. This is because of transitional provisions applying when the 1988 copyright Act was introduced. The transitional provisions mean that works such as centuries’ old unpublished letters or manuscripts remain in copyright until 2039. This is far beyond the standard terms of copyright required by the EU term directive 2006. Many of these works are orphan because it is not possible to contact the rights holder, possibly now a long-lost historical figure, to ask permission to reproduce them.

To illustrate the scale of the problem, the National Archives estimate that around 12 million or 42% of the 30 million archival items held in English and Welsh public archives predate 1891. The vast majority of these are thought to be unpublished and would therefore remain in copyright until 2039 under the current law. Clause 67 will allow the Secretary of State to reduce the length of copyright term for these works. But, and importantly, the length of term cannot be reduced beyond the minimum requirements of the term directive. I should like to stress that it is only when the date 2039 is later than the date that the term directive would produce that any reduction in term would occur, such as when 2039 gives more than life plus 70 years for an unpublished literary work by a known author.

For example, the only literary works that could have their terms reduced will be those where the known author died before 1969 or, in the case of unknown authors, where the work was created before 1969. This is because unpublished literary works by known authors will receive copyright protection for the duration of their life plus 70 years from the year they died. Unpublished literary works by unknown authors will receive protection for 70 years from the year the work was created.

In the case of photographs, the only ones which could potentially be subject to a reduction in term are unpublished photographs taken between 1 June 1957 and 1 January 1969. Where the photographer is known and died before 1 January 1969, the new term would become 70 years from the year the photographer died. If the photographer is unknown, the term would be 70 years from the year the photograph was created.

The term directive specifies different terms for different types of works in different circumstances so it is not possible to list them all now. I have a more detailed note available here today, which I will also place in the House Library, of what this means for different works. Many of the works that currently enjoy a longer term of copyright than that required by the term directive are orphan works. Reducing the term of copyright to the usual levels will bring many of these works out of copyright. This will reduce the overall number of works classed as orphan and is part of the solution to the orphan works problem.

The Government are bringing forward two amendments to Clause 67. This follows further consideration on the scope of the clause and in response to the observations made by the Delegated Powers and Regulatory Reform Committee report published on 14 December 2012. We accept that the scope of this clause would benefit from clarification. The amendments will therefore remove the references to “published but anonymous or pseudonymous” works and clarify that the power is limited by the EU Term Directive 2006. We have concluded that most anonymous and pseudonymous published works are unlikely to be subject to the 2039 transitional provisions. As such, these types of work need not be included in the scope of the power. This amendment means that Clause 67 now applies only to unpublished works, subject to the transitional provisions that currently enjoy copyright protection for longer than the standard periods of protection specified in the term directive.

The second amendment makes clear that no work will receive a shorter term of copyright than set out in the term directive. This has always been implicit in this power; this amendment simply provides clarity by putting the matter beyond any doubt. I hope that in the light of what I have said noble Lords will support these amendments. I commend the clause to the Committee. I beg to move Amendment 28JB.

[Lord Clement-Jones]

My Lords, the Minister introduced his amendment very fairly but I must admit that Clause 67 still baffles me. I think that I understand the term directive. The Minister has produced a splendid schematic of all the different rights that might be affected in these circumstances, especially where copyright will be brought back from 2039. However, I am still baffled to some degree as to why we need to go the whole hog as regards Clause 67. Technically, I suppose that I am speaking to the clause stand part debate. Originally, the clause was much more objectionable. It is now much more clearly tied to the term directive. However, what is the real motivation of the clause? I think that all of us are very sympathetic to the idea of medieval manuscripts and other old material being taken out of copyright so that they can be digitised. However, the museums, the British Library and others have made the point—whether publicly or otherwise—that in practice there are no copyright claims or difficulties and that by and large they have gone ahead and digitised and have not had any problems in doing so.

18:45

What is quite interesting and extraordinary is that the British Library notes that it has material from the fourth century that is still subject to copyright restrictions. I have no idea why that should be the case, but it surely shows that our laws have unintended consequences. Trying to get to grips with why this is needed, one could say as a good European that conforming to the European term directive is desirable, but there are always unintended consequences.

The two examples that I shall put forward are two authors who died before 1969. TS Eliot died in 1965. His published work is protected for 70 years from the end of 1965 and his unpublished work, in the ordinary course, would lose protection at the end of 2039. However, Clause 67 would give the Secretary of State power to curtail the term of Eliot’s copyright in his unpublished work. Such unpublished work exists. His late wife, Valerie, was editing her husband’s correspondence. What happens in those circumstances? A slightly longer- ago example is cited by the Society of Authors. Ford Maddox Ford, the author of the novel sequence Parade’s End, which was recently so well adapted by the BBC, died in 1939. What will happen to his unpublished work in those circumstances? There are prominent authors in these circumstances. Sometimes it is correspondence, sometimes it is unpublished work, and the consequences of Clause 67 and the application of the term directive will be large.

I wonder whether this was all thought through as well as it could have been. I do not know whether there was an impact assessment or consultation on the application of the term directive. I believe there was not, and perhaps the Minister will confirm that.

[Baroness Brinton]

My noble friend said that museums had found that managed risk had sufficed so far. Does he recognise that the directive is narrower in scope than the Bill and covers only certain works for certain uses by certain organisations? In addition, it does not permit the use of orphan works for commercial purposes, which is within the scope of the Bill, and therefore changes the scope of what is under discussion.

[Baroness Blackstone]

My Lords, I should declare an interest as chairman of the board of the British Library. The library supports this clause, and I hope that other speakers will do so as well. Unpublished works account for a very large proportion of orphan works and include very old material that remains under copyright. The British Library has examples, going back not to the fourth century, as the noble Lord said, but certainly to the seventh century, which are still subject to copyright restrictions. Much unpublished material is of enormous importance from the point of view of scholarship and some of it is of unique quality. It comprises a large part of the important digitisation project that the British Library has undertaken and wishes to continue. It is important that this clause is retained because it will produce a position where more work of this sort can be digitised and made available to a wider range of people than is currently the case.

[Lord Stevenson of Balmacara]

My Lords, given the mess that we were in on what constituted bundling and whether it was directed or undirected, I am sure that the Minister’s eyes alighted on this group, particularly the wonderful tables which he has provided for us and which we have read with interest, when he came to speak first on this. He cannot have been helped by the fact that his Chief Whip was hovering around his left shoulder as he was doing so, but he managed to cope with that and he is obviously learning fast on the job.

We have given notice of our intention to oppose the clause, because we were very concerned when reading it and seeing the wideness of the powers. The recommendations from the DPRR Committee have obviously stimulated the department to think again on that, and we are grateful for the amendments introduced by the Minister. But it tells the story that to get his narrative across he has to produce this 12 or 13-page document with tables that classify for us the conditions under which an unpublished opera whose author died in 1920 has to reduce the term by 49 years, at which point the work enters the public domain. I did not know that, and I do not think that many people did know that. Clearly a great deal of education has to be done about this area. I am still slightly uncomfortable that the analytics that have gone into this—and I can think of examples from films, which I am concerned about more directly, or unpublished monographs of engravings when the author has died—leave us with something more complicated than it needs to be, perhaps.

Nevertheless, the context of that is not the issue. The question is whether the power should exist with government to make reductions in copyright in transitional cases. That has been subsequently reduced by the comments of the DPRR, and we are now satisfied with that.

[Viscount Younger of Leckie]

I thank noble Lords who have contributed to the debate. First, I respond to the noble Lord, Lord Stevenson, to say—I am sure that he knows this, really—that the information that we produced on the illustrated works was for information. It was not our aim to beef up our argument, because we do not believe that we need to do that.

My noble friend Lord Clement-Jones asked whether there was consultation about reducing copyright on published works. I can confirm that this was in the copyright consultation exercise in 2012. An issue was raised about the published works of TS Eliot. We would need to know a considerable amount more information, and I would not be in a position to give legal advice on specific cases. The clause would not reduce the copyrights of published works. On that note, I feel that I have answered adequately the responses from noble Lords.

Amendment 28JB agreed.

Amendment 28JC

Moved by

[Viscount Younger of Leckie]

28JC: Clause 67, page 62, line 22, after “expire” insert “—
(a) with the end of the term of protection of copyright laid down by Directive 2006/116/EC or at any later time;(b) subject to that,”

Amendment 28JC agreed.

Clause 67, as amended, agreed.

Clause 68 : Licensing of copyright and performers’ rights

Amendment 28K had been withdrawn from the Marshalled List.

Amendment 28KA

Moved by

[Lord Clement-Jones]

28KA: Clause 68, page 63, line 7, leave out “may” and insert “must”

[Lord Clement-Jones]

My Lords, in moving Amendment 28KA, I shall speak also to Amendments 28LA and 28LB. These amendments provide for implementation of the EU orphaned works directive in substitution for the Government’s proposals. The directive provides for non-commercial use of orphan works by cultural institutions. Although the permitted use is non-commercial, the directive allows sales to recover costs. The major question here is why we are going further than the EU orphan works directive, which EU countries have to implement within two years of this September when the directive was passed. It specifically makes provision for museums, galleries, archives and libraries, educational establishments and public service broadcasts to make use of orphan works. These are all essentially cultural institutions. It may not be a perfect directive at this stage, but surely if it will apply in 27 countries, we should build on it. We can, of course, use the new digital hub to good advantage when applying the provisions of the directive.

The Government’s proposals under Clause 68 go much further by permitting exploitation for commercial purposes, which is a matter of real concern to many, particularly the creators of images, where the metadata has been stripped and attribution lost. That is the reason that equivalent provisions failed to get through Parliament under the Digital Economy Bill before the previous general election.

Has no account been taken of photographers’ strong concerns, voiced during the passage of the Bill and in the Hargreaves consultation? The impetus for orphan work licensing comes largely from cultural institutions. The provisions of the directive, therefore, should largely satisfy the need for orphan licensing among those institutions. On 13 September 2012, the orphan works directive was passed, and it must be implemented within two years. Digitisation for preservation and replacement of any work and supplying copies of unpublished work to other libraries, unless the author has forbidden it, is already permitted under current UK copyright law.

On the other hand, the proposed measure in Clause 68 is designed to make orphan works available for commercial exploitation. That measure would deprive rights holders of their property simply because they have not been found by the would-be user of their work, although the Government have not yet formulated the rules and do not intend to publish them until after the measure has been enacted. Being exercisable by secondary legislation, they will not be fully subject to parliamentary scrutiny.

Those are some of the problems which are not dealt with in the measure. Many works contain other copyright works, such as photographs or illustrations. Unlike the EU directive, there is nothing to protect the owners of those copyrights if the overall work is declared an orphan. Diligent search has been used in a number of fields for many years and produces a high level of false orphans. That is because copyright does not have to be registered and there are no definitive registries of the ownership of copyright works. Some types of works, such as photographs and illustrations, are especially easy to separate from the information about their creators—I mentioned the issues about metadata earlier. In particular, foreign copyright holders are likely to be unaware of the provisions and so will be more likely to lose out as others exploit their works commercially in the UK. Primary legislation should not allow orphan works provisions beyond the EU orphan works directive until it has been drafted to give the same standard of protection to creators as are provided under the directive.

Great concerns have been expressed not only by photographers but by a whole range of others, such as AP, British Pathé, Getty Images, ITN, the Press Association and Thomson Reuters, which are UK, European and worldwide news agencies and audiovisual archives; and FOCAL International, which is the industry body representing commercial and audiovisual archives throughout the world.

The provisions in the clause are premature and should not be introduced in the Bill. If there are flaws in the directive—there may well be—surely we should work on them rather than erecting a totally separate definition of orphan works, which will have few equivalents anywhere else in the world and will certainly be of no use in international rights clearance. I beg to move.

[Lord Howarth of Newport]

My Lords, I shall speak to Amendments 28LA and 28LB, which the noble Lord, Lord Clement-Jones, has introduced. I see these issues very differently from the way that he does. I am sure that he would agree that it would be a pity if we in the Committee excessively polarised the interests of contemporary creators against those of our great cultural institutions and the public, who benefit from the work of those institutions and could benefit so much more if a larger part of their collections were to be made accessible.

The simple answer to the question raised by the noble Lord, both on Second Reading and just now—why we should go beyond the provisions of the European Union orphan works directive—is simply that the directive does not go far enough; it is too limited. Only public sector bodies and educational establishments, not companies, can benefit. That means that public/private partnerships are prevented. Even cultural bodies, are prevented from working in partnership with the private sector. Mass digitisation, which would confer very great benefits for the public, is best carried out with private sector contractors and partners. In that way, the production is made possible for global educational markets.

19:00

The directive sets the bar for diligent search too high. It requires diligent search for each individual copyright work, even if embedded in another. For example, a postcard could involve rights in the stamp on the postcard, the design of the postcard itself and the text of the postcard. It is absurd to require that every component of a single item, which is almost certainly an orphan work, should be subject to exhaustive diligent search. If that is to be the requirement, it will simply mean that large volumes of material will never be cleared for use.

Unlike the provisions of this Bill, the European Union directive does not facilitate payment to relevant owners. The use of orphan works in publications—books and articles, for example—would be prohibited. Limiting the scope of licences to non-commercial purposes would restrict the ability of universities, libraries and museums to raise revenue through exhibitions that included orphan works. It is not realistic to try to maintain a barrier between non-commercial and commercial activities and uses in cultural, educational and academic environments. I believe that there are risks to rights owners that would actually be averted by the provisions of the Bill.

Therefore, I was pleased to read on page 20 of the impact assessment—which has not had an altogether favourable press this afternoon—in the section that deals with orphan works:

“The UK Government is proposing a complementary scheme that would allow commercial and non-commercial use of a wider range of works and not limited to certain institutions ... Should the EU proposal be adopted, the UK scheme will operate alongside it”.

I think that that is entirely appropriate. I would say that rights holders have nothing to fear from academic and cultural institutions. They themselves are generators, as well as active users, of copyright. As users of copyright, they have a long history of respecting and clearing rights. They have no intention whatever of jeopardising the rights of creators. Indeed, libraries and archives, knowing the background of their own collections, will not infrequently be in a better position to search for a rights holder than would a collecting society representing mainstream commercial material. Orphan works licensing will provide a new incentive for institutions to search and secure a licence for assumed orphan works and so potentially will increase the number of rights holders who will benefit financially from their work.

As my noble friend Lady Blackstone briefly explained to the Committee just now in a previous debate, it is essential to find means of licensing orphan works. Many forms of expression—the speaking notes of the Minister or of the noble Lord, Lord Clement-Jones, correspondence, diaries, blogs, private photographs, the archives of clubs and societies, official archives and oral histories—are all covered by copyright and, of their nature, will not be represented by collecting societies, but they are potentially too important to stay in limbo. They need to be treated differently from material that was originally produced commercially. The noble Lord worried about depriving rights holders, but there is no question of that. Therefore, I hope that the Committee will not allow these amendments to find favour.

[Baroness Blackstone]

My Lords, I associate myself with what my noble friend Lord Howarth has just said. He put it concisely and succinctly, and I entirely endorse everything that he has just put forward. I shall not repeat what he has already said.

I do not believe that Clause 68 goes quite far enough, and I should like it to have gone further. I certainly do not want to see it restricted in the way that the noble Lord, Lord Clement-Jones, suggests. My noble friend is absolutely right when he points to the undesirability of polarising this debate between the needs of cultural institutions, scholars and researchers and the requirement in the 21st century that we should be able to digitise material en masse, which should include orphan works. Until now, it has required huge amounts of time and effort—pointless time and effort—to try to establish who the authors of these so-called orphan works are, usually with absolutely no useful result. Therefore, I very much hope that the Committee will reject these amendments and support Clause 68 as it stands. I hope that when the regulations are formulated, they will be able to maximise the extent to which it is possible for orphan works to be accessed and digitised in the interests of the wider public and of research and scholarship.

[Baroness Warwick of Undercliffe]

My Lords, while there is a danger of me saying, “Me, too” and sitting down, I would like to reinforce those points. It is worth reflecting on the fact that Universities UK, the British Library and the Wellcome Trust have all explained in considerable detail why the orphan works provisions must extend to commercial as well as non-commercial works. They have certainly convinced me that it is not possible to draw a clear distinction between commercial and non-commercial works—that is, commercial uses in the context of universities, museums and libraries.

We must remember that a very large proportion of orphan works were never intended for commercial purposes. Others have mentioned letters, but I would add personal notes, diaries and even sketches on napkins. Those are the kind of things that make personal archives so rich and such a wonderful source and rewarding ground for scholars. Therefore, I do not think that we should seek to put any barriers in the way of that material being preserved and shared.

[Lord Greenway]

My Lords, I have every sympathy with the aims of the British Library, the Wellcome Foundation and others. However, I should like to bring the debate back to the photography angle. I am a photographer and there was a time when I used to make my living as a photographer, although I no longer have the time to do that. However, I have a considerable archive of my own photographs and photographs that I have acquired over very many years. In effect, I have what could be termed a small photo library.

I am concerned about this measure because copyright is, and always has been, a minefield. To my mind, what we are doing here risks making it even more of a minefield. What will be the position for the large number of photo libraries which, after all, make their living from selling reproduction rights for photographs? They are worried that they will be badly affected by this Bill. They do not think that there has been enough consultation. There is a risk that, if the Bill goes through as it stands, some of them could go out of business.

I find this business of orphan works difficult to comprehend. I have lots of photographs that could well be orphan works. I have no idea who took them. Some of them are 100 years old and were taken in other parts of the world. Do I have to license all those photographs and pay money into an account that may well build up into a huge sum of money and will be sitting there, most of the time unused, when such money could be used, especially by photo agencies, to increase their business in other ways? I find the whole thing exceedingly confusing. I would welcome the Minister pouring some light on that.

[Baroness Brinton]

My Lords, I should like to add my voice to the “Me toos” of the noble Lord, Lord Howarth, and the noble Baronesses, Lady Blackstone and Lady Warwick. I do not support these amendments and I support the retention of Clause 68. I will not repeat the very helpful points that were made earlier. Some other points that have been made by the National Museum Directors’ Council show the real problems with making the amendments work. This is not just an issue of not being able to identify or trace the rights holders; any activity requiring permission from the rights holders cannot happen because that in itself infringes copyright. This severely impacts on what an institution can do with the work. For example, a museum may display an orphan work but it cannot digitise that work for display in its catalogue, put it online, advertise it in any other way or have it as part of a picture on a postcard, as was talked about earlier. That makes a much bigger problem. The practical problem is that the work will be put into store. There are 4 million orphan photographs and documents in the Imperial War Museum stores at the moment, and 11 million orphan works occupying 180 kilometres of shelf space—the distance between here and Bath. At the Natural History Museum, there are approximately 125,000 art works and 200,000 notebooks, which they suspect are orphan works, as well as 1.3 kilometres of manuscripts—that is, here to Buckingham Palace.

There is a real problem here, particularly in these times of austerity. Earlier, we discussed the borderline between what is commercial and what is not commercial, certainly for universities, where I have worked for more than two decades, as have the noble Baronesses, Lady Blackstone and Lady Warwick. In these times of austerity, universities and other public organisations are being encouraged to be as commercial as possible and to find other sources of income in order to help to minimise the reliance on public funds. That is also true for the museums, libraries and archives world. The problem with these amendments is that they would make it so complicated that the orphan works would just sit in those stores for ever. Even if we do not know who owns the work, that does not mean that it is culturally insignificant. I believe that the public would be horrified if they thought that such a large number of works were inaccessible and banned for ever because tracing the rights holder, their heirs and successors was impossible.

The orphan works solution is a helpful one that will allow UK museums, libraries, archives and universities to produce much better exhibitions and displays for wider public knowledge and education. I think it will also facilitate the more effective use of public funding and reduce the almost impossible task of tracing the rights holders of some of these works. I pick up the point made by the noble Lord, Lord Greenway, just now about what happens to accumulated funds, but frankly that is something that the Government need to address. It is right that there should be protection for rights holders, and I think that the organisations that we have mentioned this evening are more than happy to pay a licence fee that reflects the commercial nature of an item where it is clearly very commercial, but I remain concerned that where there is no commercial rate, even a very small fee for an item in a museum might make the museum decide not to display it.

Finally, I pick up on the point made by the noble Lord, Lord Clement-Jones, on the EU directive. It is only a partial solution to the orphan works problem. It does not allow, for example, the models of public/private partnership that would fund the digitising of large archives; nor does it allow for any revenue-raising activities using orphan works. The revenue raised is limited to the cost and preservation of the item, or to making it available to the public. The EU directive on its own does not recognise the reality of public-private boundaries in our top universities, museums, libraries and archives today.

[Lord Lucas]

My Lords, I am not going to give any comfort to my noble friend Lord Clement-Jones on this, I am afraid. There is an awful lot to be gained from the orphan works clauses in opening up our cultural heritage and allowing us to share it. We absolutely need that to be a commercial enterprise as well as a public enterprise. For those who are active and fear that their works, particularly photographs, are going to become part of someone’s orphan collection, I say that there are things out there on the internet. There is TinEye for photographs, Shazam for music and Turnitin for text. All you have to do—and presumably the Government will do this when they come to say what diligent research is—is to make sure that you have registered your photographs with TinEye and then they can be found. I can recommend Shazam to anyone who does not have it as an app on their smartphone. It listens to the music and will tell you who is playing what. The tools are there. We do not have to wait for the copyright hub, although that will be useful when it comes. It merely uses these tools as ways of identifying the music or the photographs. We have the means, as long as people declare themselves to be a copyright owner, to make sure that they are found.

19:15

[Lord Stevenson of Balmacara]

My Lords, I find myself in agreement with everyone except the noble Lord, Lord Clement-Jones, on this point. I am not following his line on this one and will not be saying, “Thank you”, “Oh, yes” or whatever he wishes me to say at the end of the debate.

However, there are a couple of things that are worth picking out of this very good debate. The question of photography and photographers is not yet well resolved. That is true in general terms because, in particular, the metadata problem affects photographers more than anyone else, and we have to be very sensible about that. When he comes to respond, I should be grateful to have the Minister’s comments on whether he foresees any particular difficulty there.

Like other noble Lords, I have received a number of communications from photographers in recent weeks. One of them, from Leon Neal, struck me as being of particular interest because the argument being made is that the impact that this clause will have in relation to photography is substantial. I think we take that point, but he points out that a number of the decisions that will be affected will be very dependent on whether the copyright hub works. In saying that, he wonders whether the Government have in mind giving the copyright hub a chance to get going to see whether it has a solution for the particular problems of photographers that would decrease the requirement for this legislation to be as prescriptive as it is. I am not sure whether I can agree on the basis of this correspondence, but it is something that the Minister should reflect on, and perhaps he can come back to it at that stage. Leon Neal wrote: “I request that you please support the proposal to delay the directive implementation until the October 2014 deadline and then only implement it to relieve any of the restrictions that the copyright hub has failed to address”. That seems a very sensible suggestion.

In line with that, we are aware that the way in which the Government are progressing on this is to take the powers that are set out in Section 68, which we broadly support, and work out the details of the scheme to be brought forward through, presumably, secondary legislation at a later stage. In order to help them with that, they have set up a collective licensing working group, which is presumably also looking at orphan works. The group meets regularly, I understand. It has been going for four months, so perhaps it has not got very far in its discussions. The list that I have seen includes publishers, authors, visual artists, musicians, broadcasters and potential users of the schemes, which all seems very good. Of course, there is a missing group: photographers. When he comes to reply, will the Minister give us some assurance that photographers’ interests—perhaps he should co-opt the noble Lord, Lord Greenway, to his discussions—can be taken into account?

[Viscount Younger of Leckie]

My Lords, Amendment 28LA would limit the scope of the UK orphan works scheme to that of the EU directive on orphan works. The proposed UK scheme in Clause 68 is intended to complement the EU directive. The exception provided for in the directive is more narrowly focused on enabling the cultural use of orphan works, specifically the digitisation of, and cross-border online access to, orphan works in libraries and archives. The directive does not prohibit the UK developing a domestic scheme for licensing orphan works within the UK.

The noble Lord, Lord Howarth, raised the issue of whether the EU directive can be widely used. I agree that the range of the EU directive is extremely limited. The same sentiments were expressed by my noble friend Lady Brinton. It would not be adequate for the purposes of copyright licensing as proposed by Richard Hooper’s work. Use of orphan works under the directive is limited to publicly accessible libraries, archives and public-sector broadcasters. The directive also allows for the generation of revenue to cover only the costs of digitising orphan works that are made available to the public. This does not allow any kind of distribution, such as publication in a book or TV programme. The directive also does not cover photographs, which make up a significant proportion of the orphan works held by archives, libraries and museums.

The Government’s proposals are about opening up the commercial and economic potential of orphan works. It was clear from the responses to the Government’s copyright consultation that there are many desirable uses that could be made of orphan works which would have a commercial element—for example, reproductions in exhibition catalogues, books or television documentaries.

Because the UK scheme would allow broader commercial as well as non-commercial use, we are proposing a key extra safeguard which is not in the directive. This is the requirement for the diligent search to be verified by an independent authorising body. Allowing commercial use of orphan works will not undercut the market for non-orphan works. In many cases, there is unlikely to be a comparable non-orphan work that could be used instead—for example, unique records of historical events. In any event, the Government’s proposals will provide for remuneration to be set at a rate appropriate for the type of work and its proposed use.

Amendment 28LB would remove four paragraphs from Clause 68 in respect of the proposed orphan works scheme. These paragraphs set out various issues that the regulations either must or may cover and contain the key safeguards for rights holders that will underpin the scheme. This includes the fundamental safeguard that a diligent search for rights holders must have been undertaken before a work can qualify as orphan. My noble friend Lord Clement-Jones, asked whether foreign rights holders would lose out. I can confirm that a diligent search will be needed to check for foreign rights holders, too.

Another key safeguard that the amendment would remove is the requirement that the orphan works authorising body must be independent and therefore cannot license itself to use an orphan work. The regulations could still contain such safeguards even if they were removed from the Bill. However, the Government’s view is that these safeguards are such an integral part of the proposals for an orphan works scheme that they should be set out in the primary legislation.

I pick up the point that the noble Lord, Lord Greenway, raised about the future of photography libraries. The orphan works scheme will help photo libraries because it will enable them to use orphan works legally. The noble Lord, Lord Stevenson, also raised the issue of photographers, and I can assure him that photographers’ interests will be taken into account.

The noble Baroness, Lady Blackstone, recognised that there is a difficult distinction to be made between commercial and non-commercial uses, and I thank her for that helpful intervention.

In the light of the above, I ask the noble Lord to withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for his reply, and other noble Lords for their not always helpful responses. I was very struck, however, and think it very telling that the noble Lord, Lord Greenway, raised the concerns of photographers. That is really at the heart of much of the objection to the proposals for the orphan works legislation, but it does go wider. As I mentioned earlier, it extends to the news agencies and photo libraries, which have very strong concerns, particularly because at the moment—and despite what the noble Lord, Lord Lucas, said—we do not have the copyright hub fully in place. That would make a huge difference to the ability to carry out diligent search and identify circumstances where metadata has been stripped from contemporary photographs, which have effectively been turned into orphans. This is one of the problems. Photographers are worried about the possibility of a cynical exercise whereby a photograph is turned into an orphan by stripping the metadata, and, lo and behold, the diligence search is inadequate and it is treated as an orphan. There are uses for commercial purposes, not just by cuddly museums, universities and cultural institutions making an honest penny out of books in their shops, but by fully commercial publishers. So there is considerable concern, and it is not a question of polarising the debate but recognising the concerns underlying these orphan works proposals, which are held by substantial numbers of creators and rights holders. The European directive is, as I said clearly, not perfect in every respect, but to allay the fears of many it is better to build on that than have legislation that explicitly goes far beyond what has been said.

Clearly, I will not win the argument today—certainly not in the light of the Minister’s response. I am worried about foreign rights holders; I do not believe that diligent search will be that straightforward where foreign rights are concerned. I think that the IPO will find that a lot of concern is expressed as the regulations and the clause come into effect. It has already been expressed in letters to the Secretary of State and to the former Intellectual Property Minister. I suspect that the volume of correspondence from those foreign rights holders will increase over time.

I will read carefully what everyone has had to say. It may even be that I come back with a suitable response on various issues that have been raised here today. I believe that digitisation is a great deal more straightforward than it has been alleged today. For instance, my noble friend spent most of the time arguing for orphan works. At no point in this debate have I argued against the concept of orphan works; I think that they could be usefully employed, constrained within the right limits. In the mean time, I beg leave to withdraw the amendment.

Amendment 28KA withdrawn.

Amendment 28L

Moved by

[Lord Clement-Jones]

28L: Clause 68, page 63, leave out lines 8 to 11 and insert “specify a licensing body authorised to grant licences, only if this licensing body represents a substantial number of copyright owners of the type of work for which a licence is to be granted”

[Lord Clement-Jones]

My Lords, I thought that the Committee might appreciate, rather than approve, a rather different approach to the clause, trying to make the best of what I previously described as not optimum relative to the orphan works directive.

A number of matters should be written into the Bill. That is essentially what I propose in my Amendments 28L and 28M to 28S, 30 to 32 and 57. Let us assume that it is possible to amend the orphan works provisions satisfactorily. The most important question in that context was how the licensing system needs to operate. The system needs adequately to protect the interests of the orphan works copyright owners and to be efficient and cost-effective. It is vital that the operation of a licensing system is planned in a pragmatic way that considers the needs of different licensees of orphan works. One way to ensure the efficiency of the system is to make the best use of the existing licensing systems of collecting societies. Collecting societies are in a position to process complex usage data and allocate fees for such licences as broadcasters.

UK Music and the Publishers Association, which are supporting the amendments, are keen that the Government fully explore the way that collecting societies participate in the licensing process. It is important that any orphan works licensing scheme includes certain safeguards to protect the authors’ rights. The regulations described in new Section 116A set out certain conditions under which a licence to use an orphaned work may be granted. However, there is not enough detail in the Bill. The amendments provide that detail. To avoid confusion, I should say that Amendment 28S is part of this group.

First, the licensing body must be representative of a substantial number of copyright owners for the type of work for which a licence is to be granted. It must not represent just a minority of relevant creators. It is not at all clear who or what the person or persons authorised to grant licences under the new Section 116A will be. Should it not be a relevant collecting society, rather than the UK Copyright Tribunal?

19:30

Secondly, new Section 116A specifies that each individual work must be subject to a diligent search for the rights owner. The nature of that diligent search, however, needs to be specified. It cannot be assumed that a work is orphan unless a diligent search of each individual work in question has been carried out. New Section 116A(3) sets this out only in general terms. There are discussions taking place in the working group on orphan works, which include defining what constitutes a diligent search. We need to hear the Minister set out what the Government believe must be included in any diligent search, and what sector specific guidelines are likely to be provided.

Thirdly, authors who have assigned their copyright to a publisher or other agent must have the right to equitable remuneration. Fourthly, licences for orphan works should not be perpetual and should expire when the copyright in the work has come to an end. Fifthly, the regulations must make clear what works can be considered as orphan works and when they cease to be so, especially if an exclusive licence has been granted. I beg to move.

[Lord Howarth of Newport]

My Lords, these amendments have at least enabled us to discuss some very important issues. I want to concentrate on the question of diligent search. Whether the proposed United Kingdom orphan works licensing scheme will work depends on whether the regulations ensure that the requirements for diligent search are proportionate and manageable. Unless the time and cost of diligent search are reduced in appropriate circumstances for cultural and academic institutions they, for the most part, will not bother to attempt to use the orphan works in their collections. The noble Baroness, Lady Brinton, briefly described the scale and quantity of orphan works that it is believed are in our national collections. It is thought, for example, that some 50% of archive collections consist of orphan works. There are three very interesting and helpful pages in the impact assessment. I keep on praising the impact assessment—counter-culturally—which gives instances of the scale of orphan works in particular collections and the prodigious volumes of time, effort and cost that would be required to perform a diligent search item by item on all of them.

If the regulations are to be proportionate, they will take account of the nature of the work in question, for example whether it was originally produced for commercial purposes or was unpublished; the use that is proposed for the work—whether, for example, it is intended that there should be free access to it for educational or cultural benefits to the public; a realistic assessment of any risks to potential rights holders; and the feasibility of tracing rights holders. I understand it is the Government’s intention that there should be proportionality in the way the regulations stipulate the requirement for diligent search. However, I would be grateful if the Minister could enlarge on the Government’s intentions in this regard. I hope he will be able to give some comfort to those of us who believe it is important to remove unnecessary obstacles to making orphan works accessible.

Amendments 28M and 28N are totally unrealistic. To require a diligent search for each individual work, regardless of the practicalities, would make digitising orphan works in major areas impossibly time consuming and expensive. Therefore, that would be unreasonable and disproportionate. I hope that my noble friends will not wish to pursue amendments to that effect. I hope the Minister will be able to give us comfort in what he tells us about the Government’s intentions in this area.

[Baroness Warwick of Undercliffe]

My Lords, I also comment on the question of diligent search. I agree that we need clarification about what will constitute diligent search, but I would worry if we set the bar too high, and these amendments ask us to set a very high bar indeed. Many noble Lords appreciate the time and effort involved in tracing the authors of some categories of work. It is essential that this is proportionate to the type of material involved and the likelihood of finding the owner.

As my noble friend Lord Howarth has said, if we do not establish a proportionate system, the requirement will act as a disincentive to use this legal route for using orphan works. Users will either risk infringement by using works without a licence, as some currently do now, or decide not to use the work at all. We have talked a lot about balance this evening. Clearly, we need the right balance in this case. That is the way the working group is already moving and that is the right approach.

[Baroness Brinton]

My Lords, in the interests of time, I really will just say “me too”. I very much support the comments made by the noble Lord, Lord Howarth and the noble Baroness, Lady Warwick.

[Lord Clement-Jones]

My Lords, I realise that I failed to speak to Amendment 30, so if I may I will just finish this group.

An orphan works license must provide remuneration for relevant rights holders, specifically the holding of money in escrow to remunerate rights holders who come forward within a certain time period. New Section 116C(4) of the Bill states:

“The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence”.

That is welcome, but could be much clearer using the more broadly recognised term of “remuneration”. While royalties are common in the music industry, in the publishing industry royalties are used to describe payment made solely to authors. The word “remuneration” is also preferable for the avoidance of doubt as distinct from compensation, which would suggest a need for rights holders to prove harm before being able to receive their monies.

[Lord Stevenson of Balmacara]

My Lords, I want to make it clear that we on this side support the ECL approach in general. The reason for supporting these particular amendments is to make sure that the issues that they raise are probed. I look forward to hearing what the Minister has to say.

However, it is worth putting on the record that there are still a lot of reservations from individual authors and photographers about the potential impact of an ECL scheme, particularly where there is not a collecting society—

[Lord Clement-Jones]

No.

[Lord Stevenson of Balmacara]

I beg your pardon?

[Lord Clement-Jones]

If I can clarify, we are still on orphan works amendments, which are designed to improve the orphan works provisions in the clause.

[Lord Howarth of Newport]

Before the Minister responds, the noble Baroness, Lady Blackstone, apologised that she had to depart from the Committee because of a commitment, but she asked me to say that, as chair of the British Library, she associated herself with the points that I put forward in my remarks.

[Viscount Younger of Leckie]

My Lords, the amendments cover both the scope and detail of the proposals for a UK orphan works scheme. Amendment 28L would limit who could be authorised to grant licences to use an orphan work and de facto would mean that only a collecting society already operating in the sector could be authorised to grant licences. The amendment assumes that all orphan works will be licensed by collecting societies. However, many orphan works are simply not of a type that is licensed collectively—unpublished works, diaries, old photographs and oral history recordings, for example. There will therefore need to be a separate independent authorising body for orphan works which are not covered by any collecting society.

Amendment 28M seeks to make clear that the orphan works scheme applies to a work where there are multiple rights owners and one or more of these are not known or cannot be traced. The Bill already makes provision for this. The requirement for a diligent search for the copyright owner will be described in greater detail in the regulations. This will include all relevant rights-holders where there is more than one.

Amendment 28N would mean that a separate diligent search had to be undertaken for every orphan work that someone wants to use. The clause already provides that a work must have been subject to a diligent search for the rights holders before it can qualify as an orphan work. However, requiring a separate diligent search for each individual orphan work could result in potential licensees having to conduct repetitious searches. For example, five poems by the same poet whose name is known, published by the same publisher, would require five separate diligent searches.

Amendment 28P is concerned with creators who have assigned some or all of their copyright in a work that goes on to be a suspected orphan work. The diligent search for rights holders will cover all potential rights holders in a work, including the creator. This amendment would also provide an author with a new right to remuneration for the use of an orphan work, even when the author had assigned the relevant copyright in the work to someone else. Only those who are rights holders will be entitled to remuneration for the use of an orphan work. This is exactly the same as for non-orphan works.

Amendments 28Q and 52 seek to clarify what the term “authorised” means in this subsection. In particular, they seek to ensure that those authorised to license orphan works cannot grant themselves a licence. This is an important point and one on which the clause is already clear—in new Section 116A(5)(c) introduced in Clause 68. Any body authorised to issue orphan works licences cannot license themselves to use an orphan work.

Amendment 28R would mean that a licence to use an orphan work must be time-limited and not run beyond the copyright term in a work. I can confirm that regulations will provide for limits for orphan works licences. These will be appropriate to the type of use being licensed and could be a time limit or a limit according to intended use—for example, a print run. In reality, sometimes it will not be possible to tell whether the copyright in an orphan work has expired.

My noble friend Lord Clement-Jones spoke to Amendment 28S, which I shall address at this point. The amendment seeks to clarify that orphan work licences can be granted even when it is not known whether an exclusive licence has been granted. An orphan works licence may be granted where a diligent search does not find all the relevant rights holders, including an exclusive licensee. The noble Baroness, Lady Warwick, raised this particular issue. Where the diligent search reveals the existence of an exclusive licence, the work will not qualify as an orphan work. Where an orphan works licence is granted following a diligent search but subsequently an exclusive licence holder appears, the exclusive licence holder will be treated in the same way as any other absent rights holder that appears. The detail of this will be set out in the regulations. That is why the clause specifically applies to cases where it is uncertain where the copyright subsists.

I turn to Amendment 30. This concerns the very important issue of remuneration being set aside for rights holders when an orphan works licence is granted. I can set on the record that the regulations will provide for the treatment of remuneration. I also draw my noble friend’s attention to the wording in the clause:

“The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence”.

I believe that the term “royalties” is not used in all sectors but it is understood in the Bill to mean the same as “remuneration”. The phrase “other sums” would also cover any other types of fees to be set aside for rights holders. Therefore, the Government’s view is that the clause already provides for remuneration to be dealt with by the regulations.

I should like to pick up one point made by the noble Lord, Lord Howarth. He asked whether there will be proportionality in undertaking a diligent search. I hope that I have that right. Much work is already being undertaken in diligent search work for different types of work. This is being considered by the working group, which includes representatives of museums, libraries and archives.

I hope that in the light of the explanations and assurances that I have given, the noble Lord will agree to withdraw the amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for that helpful reply. His speech will certainly need some studying but he gave a number of assurances which were very helpful, particularly those concerning the content of the regulation, the explicit statements about what the regulations will contain and, for the purposes of Pepper v Hart, how the relevant provisions should be interpreted as far as remuneration is concerned. Therefore, I think that there are some useful points in there.

I must disagree with the Minister and with the noble Lord, Lord Howarth, about the way that one interprets each individual orphan work in terms of the clause. If it were going to be laborious, there is a point to be made there. But this is designed simply to make sure that there is no job lot of orphan works clearance; then the licensee can simply say, “We did our best, but it was a bit of a potpourri or collection of works that we had to clear, so we took a few here and there”—rather like a raffle. There is a point to be made there, and it needs clarifying still, so I may come back to it. The wording may not be sufficiently clear, but it is one of the real issues that many rights holders have, that everything will be thrown into a pot and some search will be made but it will not be sufficiently diligent because it will not have been done in respect of each individual work.

I thank the Minister for that response. I thought that it was a useful mini-debate about the way in which the orphan works provisions can be improved. In the meantime, I beg leave to withdraw the amendment.

Amendment 28L withdrawn.

Amendments 28LA to 28S not moved.

Amendment 28SA

Moved by

[Lord Clement-Jones]

28SA: Clause 68, page 63, leave out lines 29 to 31 and insert “authorised to extend an existing copyright licence between a user and the licensing body so as to confer on the user the right of exploitation within the United Kingdom provided by the licence in respect of works in which copyright is not owned or controlled by the licensing body or a person on whose behalf the licensing body acts”

[Lord Clement-Jones]

My Lords, I move this amendment on the basis that noble Lords wish to carry on beyond eight o’clock. As I say, my speech will last seven or eight minutes. This group is entirely devoted to the issue of extended collective licensing and seeks to amend Clause 68. First, I will deal with Amendments 28T to 28Y and 52 to 56. Then I will speak to Amendments 28SA and 28AA.

Extended collective licensing is a system whereby a collecting society can extend its licences to include the works of non-members. Non-members will be able to opt out of the licence if they choose. There are mixed views ranging from tepid to hostile in the creative industries. Nevertheless, all see the following safeguards as crucial in any ECL system that is introduced. Extended collective licences must be permitted only in certain strictly controlled circumstances. For example, a collecting society that grants them must be representative of rights owners in the field. Licences must be granted on a scheme-by-scheme basis and the mechanics of opting out should be clearly prescribed. Although the Government’s policy documents and verbal assurances have indicated that such strict conditions will be imposed, they have not been placed in the Bill. This is alarming for rights holders as they therefore do not have a cast-iron, future-proofed assurance that the power in the Bill will not at some indefinite point be used in a way that results in secondary legislation unfairly interfering with their exclusive rights, which are the preserve of primary legislation.

Extended collective licensing allows for collective licences to be granted by a collecting society in respect of all works of the type for which it is authorised whether or not it has the mandate with respect to each individual work. So, for example, a collecting society for publishers could be granted the ability to license literary works by publishers with whom it did not have a direct relationship. ECL schemes would also allow collecting societies to issue non-exclusive licences for particular uses of works beyond the uses covered by the scope of its rights holder mandate. So, for example, a society could issue a licence to a third party to allow the digital reproduction of works by a member publisher even where its mandate did not provide for this use. As such, ECL can potentially deprive rights holders of the ability to make a choice as to how their work is exploited. Collecting societies are permitted to go beyond the scope of mandated agreements and therefore act without the direct permission, and perhaps without the direct knowledge, of the rights holder. The rights holder who wishes at the outset not to be subject to such treatment would be required to opt out of the licensing scheme—the direct opposite of the present situation whereby they opt in. This important shift of onus on rights holders is a serious inversion of their position and requires a greater level of vigilance and monitoring. For many smaller rights holders this may well prove a very onerous burden.

If ECL is to be introduced, the creative industries therefore believe it is vital that additional safeguards are set out in the Bill to protect rights holders as much as possible from unauthorised and undesired use of their works. The Publishers Association, UK Music and many others believe that a licensing body should be granted an extended collective licence only if the following conditions are satisfied. First, the licensing body is significantly representative of UK rights holders in the field concerned. Secondly, the authorised licensing body has adopted a code of practice which gives members and non-members equal rights. Thirdly, an application has been made and a separate licence granted for different uses of works. Fourthly, the Secretary of State is satisfied that the licensing body is acting with the approval of its membership. Fifthly, members and other interested parties have had the opportunity to comment on ECL applications under consideration by the Secretary of State.

Amendment 28SA adds necessary safeguards to the ECL provisions in new Section 116B. A licence limited to the provisions as drafted could breach the requirements of the Berne Convention and TRIPS agreement in relation to non-UK works. This is inherent in ECL and cannot be cured. Nevertheless, this amendment gives extra protection to right holders if ECL is introduced. It is argued that copyright licensing is administratively burdensome on those who wish to use copyright works and should be streamlined. ECL is presented as the means by which the Government can sort out this situation. However, the industry is rapidly bringing its own digital solutions to the marketplace.

A collective licensing scheme is a voluntary arrangement in which owners of a particular kind of copyright authorise a collecting society to enforce those copyrights on their behalf. Yet the scheme proposed in Clause 68 resembles a form of compulsory licensing under which the Government will authorise a licensing body to grant licences for works which neither it, nor anyone who has authorised it, owns. ECL is stated to be voluntary on the part of a rights owner in that he can opt out of the scheme after it has come into being.

However, opting out is possible only if a rights owner knows about the scheme and how it may license its works. Those unlikely to know about ECL schemes licensing their works will include amateur creators whose works are on the internet, although they are not published commercially, and foreign rights holders. In the view of many, the existence of such a body will artificially distort the market for rights, as its rates would become the de facto standard against which negotiations would take place.

Properly, ECL refers to a statutory scheme that extends the collective licence to those rights owners who have chosen not to join the scheme. It is impossible to extend a collective licence that does not exist. Several economically significant sectors within the current creative industries have no collective licensing scheme at all. That includes news clips, films, photographs and illustrations. Those who have argued for ECL point to the Nordic countries, where there are ECL schemes. However, those schemes are very limited in their type of work and rights licence, and there are major differences between the small Nordic and large UK copyright markets.

The Nordic collecting societies are well regulated, and the extended collective licence schemes are narrowly limited in scope and subject to strict parliamentary scrutiny. Cinematographic and dramatic works, as well as computer programs, all of which are types of work of which minor use has great commercial value to the copyright owner, are generally excluded. However, the UK proposal is not limited in scope with respect to either use or types of work.

Any introduction of an ECL scheme must be compliant with the UK's international obligations, including the three-step test. The proposals are not compliant in special cases, the first step; can conflict with normal exploitation of the work, the second step; and can unreasonably prejudice the legitimate expectations of creators, the third step. It is inevitable that, if passed, the provisions will be challenged in the courts.

Finally, ECL is proposed to solve perceived copyright licensing problems, which the copyright hub, to which I and many other noble Lords referred, is intended to solve on the basis of voluntary participation without confiscation of property rights by secondary legislation or any legislation. If ECL is proposed again, surely the primary legislation must contain the minimum safeguards to comply with international norms.

I apologise for the length of my speech, but I did warn noble Lords. Amendment 28AA was proposed by the Association of Authors’ Agents, which is a voluntary trade association whose membership comprises 102 British literary agencies. It suggests that there should be a requirement in the Bill that customary warranties be made to any users being granted licences to use works under an ECL scheme. In a publishing contract, an author usually makes the following warranties to the publisher: that he has full right to enter into the agreement; that the work is an original work written by the author; that the work in no way infringes any existing copyright; that the work contains nothing unlawful, indecent or libellous; that it does not infringe any right of privacy, confidentiality or intellectual property rights; and that any recipe, formula or instruction contained in the work is accurate and is not injurious to the user.

Without those warranties, it is difficult for works to be exploited commercially. There needs to be some provision for at least the basic warranties to be provided under an ECL scheme.

Finally—as your Lordships will be pleased to hear—on Amendment 20AB, the schedule sets out some welcome provisions for any orphan works or extended collective licensing schemes that come into force. However, as Sections 116A and 116B make clear, orphan works and ECL are two quite separate licensing schemes, governed by different qualifying criteria, authorisation processes and provisions. The schemes are not interdependent in any way. For the avoidance of doubt and to reinforce the distinction between the two schemes, I have tabled Amendment 20AB. I beg to move.

20:00

[Baroness Buscombe]

I rise briefly, given the hour, wholly to support the amendments tabled by my noble friend Lord Clement-Jones. This is an area that I focused on in my Second Reading speech. Without wishing to repeat what my noble friend said, there is something rather disingenuous about saying that this system is voluntary but, at the same time, you have to opt out. I know there is huge concern across the industry with regard to this clause on extended collective licensing. It is important that the Government recognise that there needs to be more clarity around how this system would work. There are big questions about how much such a scheme would be policed and regulated with, I understand, just £10,000 per annum earmarked to administer it, and whether extended collective licensing bodies could license content for the internet, meaning that ECL will spill well beyond these shores. I believe that any new system should be opt-in only. It should be limited to a specific remit, such as extended collective licensing for non-commercial use and orphan works.

[Lord Howarth of Newport]

My Lords, there is a mass of significant matter in these amendments. It is, perhaps, a rather unfortunate degree of bundling that we have them all together. It is particularly unfortunate that the Committee is attempting to deal with them at this stage of the evening. There is important material here that we should not be trying to address under this sort of pressure of time. Noble Lords will be glad to know that I do not intend to comment on each amendment now. I simply want to say a word about Amendment 28SA because I believe it is singularly important. Its effect would be impractical and destructive. As Universities UK has explained to us, limiting the scope of extended collective licences to the UK would require users to manage different territorial permission for some works from a licensing body and not others. It would mean that much broadcast or digital use of these works could not be sold abroad or put on the web and would effectively render extended collective licensing unworkable. The British Library concurs in finding these amendments unmanageable. This amendment also raises issues with regard to existing licences from collecting societies that are de facto extended collective licences that support business and education and already allow use outside the United Kingdom, so, unintentionally, I am sure, this is a wrecking amendment.

[Lord Greenway]

My Lords, I, too, reiterate what the noble Lord, Lord Howarth, said. It is entirely inappropriate for the Committee to be discussing these important amendments at this stage of the game. Like the noble Lord, Lord Clement-Jones, I would like to have made a much longer speech. I shall not, for which noble Lords will, I am sure, be grateful, but I reiterate the great concern of the British Association of Picture Libraries and Agencies regarding ECL. It is keen to ensure that ECL will not supplant an existing framework to manage image rights. I shall not go any further than that, but this subject needs much greater concentration rather than rushing it through at this stage of the evening. On that note, I shall sit down, but I am not happy.

[Lord Stevenson of Balmacara]

My Lords, I shall speak to Amendment 28WA. The key issue is whether it may be necessary to broaden the remit of an existing licensing organisation and, if it is necessary, I hope the amendment will do what is required to achieve that. The background to this amendment is to try to open up the archives of the BFI, in particular, but also those of other agencies that hold film and broadcast material. The power of film to transform the way we see the world around us and understand it cannot be underestimated. Britain is one of the world’s greatest film cultures and has a heritage dating back to the very first days of the invention of film. We believe that every young person, regardless of where they live or where in the UK the archive material is actually held, should be able to access and learn from this heritage. Film has significant value as a teaching tool for many different subjects, as well as having a value in its own right in its artistic content. If it is true that the innovators and creators of tomorrow can be found in our education sector, we believe they should have access to film of all ages, much of it stored in publicly managed archives and in copyright and other related materials, just as they have access to libraries of printed words.

The Bill contains a proposal for extended collective licensing that will make it easier and more practical to mass-digitise archive material, particularly for educational access use. That is to be welcomed. However, this change to the law will not be relevant to film or the moving image more generally, as currently there is no collecting society or agency available to license film and moving image material under copyright for educational use. As the Minister will know, Section 35 of the Copyright, Designs and Patents Act 1988 provides an override to the exception which allows broadcasting material to be licensed for use by educational institutions. This scheme has been operated by the ERA since 1990, and it helps copyright owners and performers to derive an income from the licensed use of their literary, dramatic, musical and artistic works. This is extremely valuable, but the ERA’s remit is limited to broadcast material which was recorded after the commencement of the Act and does not cover film. Most educational organisations are covered under the ERA licence scheme, which is renewable annually. It allows teaching staff to record the broadcast output of ERA members for non-commercial educational use.

One simple way to introduce collective licensing to film would be to extend the remit of an existing society, which could be the ERA, to include film and also pre-1990 television broadcasts that are not covered under ERTA licensing. In the age of convergence, it makes little sense to maintain different approaches between film and television. This solution will benefit rights holders, whose interests will be protected as they see a resurgence of educational interest in their creative work and an extended shelf life for their former work, as well as a new income stream. Also, existing education users who are already paying subscriptions will see the value of their investment considerably increased through access to wider audio-visual collections.

Is the Minister confident that the existing text of the Bill will deliver this outcome? If this is not the case, could he consider what is being proposed in my amendment as a way to provide a suitable solution that covers extended copyright licensing to the audio-visual sector?

[Viscount Younger of Leckie]

My Lords, this group of amendments seeks to add further detail or limitations on the face of the Bill regarding the operation of any schemes for orphan works licensing and extended collective licensing.

Amendments 28T and 53 would prevent an ECL authorisation from applying to works where any part of the copyright was owned or controlled by the collecting society or its member. The idea behind this is to prevent a collecting society from unilaterally extending its mandate. In addition, Amendment 28SA specifies that ECL authorisations could extend only existing licences, and only for use in the UK. The Government agree that ECL should not be used to unilaterally extend existing mandates from members. We do not believe that the current drafting will permit this. This is due to the Copyright, Designs and Patents Act 1988, which provides that ownership of copyright refers to ownership of any aspect of copyright. The Government have been clear that no ECL application can proceed unless the applicant has the explicit support of its membership. It is extremely unlikely that support would be forthcoming for an application which significantly extended the mandates of a collecting society.

With regard to the reference to “owned or controlled” in these amendments, the Government understand the intent to reflect the range of arrangements that may not be captured by the word “owned”. However, the amendment could cover a range of possibilities, including voting rights in a collecting society or influence over the registered owner, and risks preventing legitimate uses of ECL arrangements.

I can confirm that the Government will consider the issues raised here through our stakeholder working group, which includes representatives of rights holders, including several photography groups, libraries, archives and other potential users of ECL schemes, as well as collecting societies. However, the ECL scheme needs to be flexible enough to respond to changing market requirements, so any provision that proves necessary should be made in regulations.

With regard to Amendment 28SA, the Government are pleased to confirm that these provisions can apply only to the exploitation of works within the UK. I also reiterate the Government’s view that ECL authorisations should be granted only as an extension of an existing mandate from a licensing body’s members.

Amendments 28U, 28W, and 54 add new conditions, which must be met before an authorisation to run an ECL scheme can be granted. These conditions accord fully with stated government policy. First, ECL schemes can be approved only where the collecting society is significantly representative of the type of rights holder affected. Secondly, the application process will closely consider the extent of existing mandates, ensuring ECL is introduced only where there is clear support for collective solutions. Thirdly, ECL schemes will require the explicit consent of the applicant’s members. This ensures that rights holders have an effective right of veto. In practice, we anticipate that a collecting society will be required to ballot its members before applying to operate an ECL scheme. This, I submit, is a more specific and effective safeguard than is offered by these amendments.

Amendment 28WA would specify that an authorisation to operate an extended collective licensing scheme could be used to grant licences for the use of audio-visual works for educational purposes. I can confirm that the power in new Section 116B is designed to enable licensing bodies to apply to operate extended collective licensing schemes for specific uses of copyright works. Nothing, including educational uses of audio-visual work, has been ruled out as long as rights holders want it. A central pillar of our policy is that it is up to the collecting society, acting with the consent of its members—the rights holders—to choose whether to initiate an application and to define what they would like to see in scope. Government have no power to do so.

In the case of audio-visual, although there is currently no single collecting society that could cover the range of rights, there is nothing in these provisions that would stop several collecting societies collaborating to offer a joint licence. Indeed, there is already precedent for such collaboration in collective licensing. For example, the Copyright Licensing Agency already offers licences on behalf of both authors and publishers. The only restriction on this would remain that, for such an application to succeed, the licensing body would need to meet the safeguards in the Government’s proposals. It would need to demonstrate that it was significantly representative of the type of rights holders affected by the scheme, and it would need to secure explicit consent from its members for the application.

For audio-visual works, these thresholds would need to be met in relation to each of the various groups of rights holders who contribute to such works. This is crucial to ensure that ECL is introduced only where it works in the interests of rights holders. The noble Lord also asked when provision could be made in relation to this power. Subject to the passage of the Bill, the Government would look to make regulations as soon as possible. It is our hope that licensing bodies that wish to apply to operate ECL schemes will be able to do so from 2014 onwards.

The second part of the amendment raises the question of whether pre-1990 broadcast works would be in scope for educational use and learning purposes. The Government believe that the exception in Section 35 of the CDPA, which this refers to, may already apply to pre-1990 works, but our legal team will be considering this in more detail when preparing the legislation on exceptions. I am pleased that the noble Lord is thinking about the benefit that extended collective licensing could have in some sectors. I hope we have assured him that the type of use he suggests would already be possible under the Government’s proposed scheme.

Amendments 28V and 55 would mean that authorisations for ECL schemes must specify the use of works allowed under the scheme. The existing proposals already address these concerns. The Bill already requires ECL authorisations to set out the types of work and the acts restricted by copyright to which they apply. In October, the Government deposited a briefing document in the House Library including further information on how ECL will work in practice. This sets out that a collecting society applying to use ECL will need to provide details of its proposed scheme. Any authorisation could then cover only the specific uses set out in the application.

Amendments 28X and 56 would require the Secretary of State to extend the right to opt out to an exclusive licensee or authorised representative. The rationale for this is understood, but further work is needed to explore how it would work in practice. This will be explored with stakeholders in the working group on ECL and orphan works. While this issue will be considered further, the Bill does not rule out such provision as it stands.

Amendment 28Y would require any collecting society operating an ECL scheme to adopt a code of practice which met certain criteria. The principle of the amendment is appreciated and government policy is for all collecting societies to adopt codes of practice that comply with minimum standards, which were published in October 2012.

20:15

The sector has already made good progress in this area. Most UK collecting societies have already adopted codes of practice on a self-regulatory basis. The Bill gives the Secretary of State the power to require a collecting society that fails to self-regulate effectively to adopt a suitable code of practice. The minimum standards for codes of practice include specific protections for non-members represented by ECL schemes. The Government intend to develop further such protections before any applications to use ECL can be made.

Amendment 28AA seeks to ensure that any legal action arising from the licensed use of a work with a missing owner would fall to the licensing body and not to the user of the work. The Bill already provides that an orphan works licence will have effect as if granted by the missing owner. Similarly, a copyright licence offered under an approved extended collective licensing scheme would license the use of all works within the scope of the authorisation—except any that had been opted out—regardless of the status of the owner. In practice, collecting societies often already indemnify licensees who use works within the terms of their licence against copyright claims.

However, there are a number of scenarios where the proposed warranties may not be applicable or appropriate. For example, it will not always be the case that a work will have been written by the copyright owner. A warranty to that effect would therefore not be appropriate. In addition, the Government anticipate that, in certain cases, it may be appropriate for the legal risk to fall on the user—for example, should the user exploit the work or works outside the terms of the licence. Likewise, the user and not the authorising body may be rightly responsible for any non-copyright issues that might arise relating to use of the work, such as libel. When a licensing body applies to operate an ECL scheme, it will be required to make the terms of the proposed scheme clear, including any indemnities or warrants it intends to offer.

Finally—and I thank noble Lords for their patience—Amendment 28AB seeks to make clear that the orphan works and extended collective licensing schemes are two distinct and separate schemes with different criteria, safeguards and processes. I have sympathy with the ideas behind many of the amendments, and I am confident that the Government have already sought to address the issues concerned or have committed to do so.

The schemes need to be flexible enough to respond to changing circumstances and to reflect best practice. Changes to the Bill which make particular requirements on regulations limit this flexibility and may have unintended consequences. I realise that I have somewhat run on from the time and a number of points have been raised by your Lordships. As the hour is late, the best thing to do would be to answer those questions in writing. Therefore on the basis of the assurances and commitments I have given, I ask the noble Lord to withdraw his amendment.

[Lord Clement-Jones]

Very briefly, because the hour is late, I echo what the noble Lord, Lord Greenway, said. It is unsatisfactory to be discussing a cornerstone of the Bill at the fag end of the Committee, when we know that the Committee normally finishes at 7.45 pm.

There were many useful nuggets in what the Minister had to say. Some of the detail he gave was very useful, but I was particularly interested in his affirmation that ECL was not useable for rights outside the United Kingdom. The noble Lord, Lord Howarth, seemed to think that it had that flexibility, but it does not. That is what makes it an unsatisfactory arrangement and why many people object to it. It is setting up a separate UK situation which eventually, I hope, will be overtaken by an EU directive on ECL, so in many ways ECL is premature.

However, it is far too late to talk at length about the principles of ECL. My amendments tried to improve the scheme. The Minister has elucidated quite a lot. I will read Hansard with great interest. In the mean time, I beg leave to withdraw the amendment.

Amendment 28SA withdrawn.

Amendments 28T to 28AB not moved.

[Lord Popat]

My Lords, this may be a convenient moment for the Committee to adjourn.

Committee adjourned at 8.20 pm.

House of Lords

Monday 28th January 2013 Lords Chamber

Monday, 28 January 2013.

14:30

Prayers—read by the Lord Bishop of Wakefield.

Arctic Report Card

Monday 28th January 2013 Lords Chamber

Question

14:36

Asked By

[Lord Giddens]

To ask Her Majesty’s Government what is their assessment of the 2012 Arctic Report Card of the National Oceanic and Atmospheric Administration of the United States showing record-low sea ice extent in the Arctic Ocean during the past year.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, the Government have noted the contents of the NOAA report with concern. The observed reductions of Arctic sea ice extent and thickness and the consequent regional environmental and societal impacts re-emphasise the urgent need for strong international action to tackle climate change. The UK has a leading role in the international negotiations and is working through the European Union, the G8 and the UN Framework Convention on Climate Change to reach further global agreement to reduce emissions. Domestically, we are also taking action through the Green Deal and through the Energy Bill.

[Lord Giddens]

I thank the Minister for that Answer. The self-same report says, in heavy scientific jargon, that the extreme melting of the Arctic is a kick up the pants to the world. In terms of doing more to combat climate change, I take it that the Minister will agree with that assessment. Are the Government prepared to work bilaterally with the Americans on the possible implications for changing weather patterns in the north Atlantic, since such changes look quite likely? These changes will have radical implications for our own weather and are perhaps already beginning. Are the Government working, or planning to work, with the Americans on these issues?

[Baroness Verma]

My Lords, the noble Lord raises a very important issue—we must be mindful of the different weather patterns that we are witnessing currently. We work through the UNFCCC process, and at the recent conference of the parties in Doha all countries restated their commitment to negotiate a global deal by 2015 on a single comprehensive and legally binding climate agreement to come into effect from 2020. The noble Lord also mentioned our relationship with the US. He is aware that the United Kingdom has bilateral relationships with many countries, particularly in the north Atlantic. Our relationship with the United States is crucial and we will be having ongoing discussions with it and with other partner countries.

[Lord Trimble]

My Lords, in the context of the United States, would the Minister consider that the US has greatly reduced its carbon emissions in the past year by reducing its dependence on coal plants through the development of shale gas?

[Baroness Verma]

Yes, my Lords; the noble Lord is right that the United States has reduced its carbon emissions and increased its production of shale gas. However, this country takes the view that we need to ensure that our energy supplies are a mix of renewables and traditional fossil-fuel based. Therefore, although we are looking at shale gas, it will be part of a mix of energy rather than our having a dependency on it.

[Lord May of Oxford]

My Lords, is the Minister aware that the cost of the actions that we should be energetically taking against climate change—the need for which is underlined by the faster than previously expected melting of Arctic ice—is significantly smaller than the discounted present value of the much more difficult actions that we will be faced with in future if we do not act? I declare an interest as a member of the Committee on Climate Change.

[Baroness Verma]

The noble Lord is of course right that we need to take action. I am pleased to say that this Government are taking action and working very hard with all partner countries to ensure that this global issue is tackled with a global response.

[Baroness Parminter]

My Lords—

[Viscount Hanworth]

My Lords—

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

My Lords, there is time for both sides. Perhaps we can hear first from the noble Viscount, Lord Hanworth.

[Viscount Hanworth]

My Lords, an example of extreme folly is the manner in which we are allowing petroleum companies to pursue the exploration of oil and gas in the Arctic as the reduction of ice cover renders this more practical. Can the Minister tell us what steps, if any, the Government are taking to restrain such activities?

[Baroness Verma]

My Lords, the fact of the matter is that we will need supplies of oil for the near future. Although we work very hard with our partner countries to ensure that everything is done in an environmentally safe way and with consideration to the environment and locations, we cannot dictate to the Arctic states or to the Arctic Council how they progress with their drilling. However, we know that they take the issue very seriously and are very environmentally effective when it comes to the security and safety of how they drill.

[Baroness Parminter]

What global greenhouse-gas emissions stabilisation levels do the Government believe will be necessary to protect Arctic summer sea ice for the remainder of this century? In asking this question I also congratulate the Government on the launch today of the Green Deal, which will help reduce greenhouse gas emissions from British homes.

[Baroness Verma]

My Lords, I thank my noble friend for mentioning the Green Deal, which will of course help very much in how we respond individually to a very serious issue. Greenhouse gases are the key cause of climate warming. We have invested heavily in research to ensure that, working with Defra, we have many ways of responding to the climate change which is happening around us and to ensure that other countries are working with us in that response.

[Lord Harris of Haringey]

In the past 60 years more than half of the ice in the Arctic has disappeared. That opens up the prospect of the north-west passage—which we all remember from our history books in childhood—becoming a reality. This has enormous strategic implications not only in the movement of goods but in extra exploration for both oil and other minerals. How do the Government see the United Kingdom’s strategic interests, and are they pursuing those through their associate membership of the Arctic Council?

[Baroness Verma]

My Lords, the noble Lord is right to raise that issue. Although we are not a member of the Arctic Council or an Arctic state, we have been invited in as observers and we are able to have a very constructive dialogue with those Arctic states and with other observer states as well.

[Baroness Worthington]

My Lords, the Arctic is experiencing rapid change due to the impact of man-made global warming. In recognition of the unique and fragile nature of this region, Greenpeace is calling for the establishment of a global Arctic sanctuary. The Environmental Audit Committee also recommended that a sanctuary be established in its report, Protecting the Arctic. Can the Minister please inform the House what actions the Government are taking to secure a marine protected area in the Arctic and what assessment they have made of the risks, both economic and environmental, of allowing oil extraction in the area?

[Baroness Verma]

My Lords, as I think I have said in answer to a number of the questions put to me today, we have to work very closely with the Arctic states and the Arctic Council. However, I recognise the noble Baroness’s point about the depletion of marine life. If she will allow me, I will make sure that she receives a much fuller answer, given that this is quite a serious issue that needs to be tackled.

Energy: Oil Price Projections

Monday 28th January 2013 Lords Chamber

Question

14:45

Asked By

[Lord Sheldon]

To ask Her Majesty’s Government what is their projection of the likely future of oil prices.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, my department has generated a set of projections for oil prices to 2030. A supply and demand model is used to estimate growth rates, which are then applied to 2012 prices, calculated using year-to-date and future prices. These are then sense-checked against external forecasts. A range is captured by three scenarios: low, central and high. In DECC’s central scenario, oil prices are projected to rise, reaching $124 per barrel in 2020 and $135 per barrel in 2030.

[Lord Sheldon]

I thank the Minister. Despite the cold winter, we may have a future of warm weather, which could reduce demand in Europe. Although there has been an expectation in 2013, the latest prediction anticipates a slowdown in the global economy if warm weather can actually reduce demand. There can be a reasonable summer.

[Baroness Verma]

My Lords, while we encourage reduced use of oil in our country, the difficulty arises in emerging economies that have found greater demand for it, so it is about finding a balance between our own liberalised markets and the demand seen elsewhere. There has also been some slight uncertainty during the recent difficulties being faced in north Africa and the Middle East.

[The Earl of Courtown]

My Lords, will the Minister tell the House how the Government intend to mitigate these increased oil prices, particularly with reference to using future renewable forms of energy?

[Baroness Verma]

My noble friend will be aware that this Government are keen to ensure that we have a good range of energy mixes, thereby reducing our usage of oil. However, we have a realistic view that, for the foreseeable future, we will still need extra supplies of oil and therefore we cannot mitigate our usage completely. We will of course try to make sure that, through our policies and the Energy Bill, all other energy resources have an equal footing to compete on.

[Lord Desai]

My Lords, have the Government taken into account the effect of shale gas in the US, which is likely to influence oil prices downwards, if anything?

[Baroness Verma]

My Lords, while I agree that prices in the US have come down, worldwide there is still great demand, given the emerging economies. For the foreseeable future, globally there will be a great need for oil and, by and large, prices will be seen to go up.

[Lord Teverson]

My Lords, the Government have been very successful in bringing electricity consumers together to use their collective muscle to switch to better tariffs. Will the Minister undertake that her department will look at similar collective switching for heating oil, as these prices will go up even more? In rural areas in particular we do not have gas supplies and dual fuel is not available to us, so we have very high tariffs. Would she promote that switching for heating oil?

[Baroness Verma]

My Lords, my noble friend raises an important point. We are determined to make it easier for people to club together to get a better deal on their collective energy purchasing. Switching is a new way for consumers to group together and use their market power to negotiate lower energy bills. Through the Cheaper Energy Together competition, we awarded £5 million of support for the most innovative local authorities. Of those, six schemes were provided to support oil buying groups.

[Lord Hughes of Woodside]

My Lords, just as it seemed as though the price of petrol and diesel was stabilising, we hear predictions of increases of four to five pence a litre. What are the Government going to do about that, because, given the forecast that they have produced, there is no excuse for them saying that they have been caught on the hop?

[Baroness Verma]

My Lords, these reports appeared widely in the media over the weekend. I accept from the noble Lord that they are worrying, particularly in times of hardship for most consumers. Perhaps we should look—I was going to say at how we make it easier for consumers not to be ripped off at the petrol pump, but I shall not—at how we can encourage retailers to pass down a drop in price if it comes through the crude oil route. However, the Office of Fair Trading is looking at retail pricing and at how reductions in price are passed down. We hope to be able to respond once we have viewed the report.

[Lord Hamilton of Epsom]

My Lords, about 12 months ago, Shell produced a forecast for oil prices which was between $70 and $90 a barrel. That has not proved right and prices now are between $115 and $120. If Shell cannot get its forecast right, are the Government likely to?

[Baroness Verma]

My Lords, I thank my noble friend for that very helpful question. Of course, we do not always dictate the global scenarios that often change in front of us. While we try to make our predictions as accurate as we possibly can, scenarios will be played out on the international scene over which we have no control. Therefore, our scenarios are based on price structures that take into account the low, the central and the high. The price forecasts that we have come to were made on that basis.

[Baroness Worthington]

My Lords, whichever way you make projections, it looks likely that oil prices will remain high. The only way of keeping transport affordable in the long term is to maximise vehicle efficiency and to develop alternatives as quickly as possible. UK motorists have benefited greatly from the introduction of Europe-wide vehicle efficiency standards. What steps are the Government taking to ensure that tougher, Europe-wide standards are set to the benefit of the UK motorist?

[Baroness Verma]

My Lords, as always, we are working with our European partners and manufacturers in this country. I say again that it is one of those issues on which we have to make sure that the rest of the world is working with us. We work hard at all conferences and in all fora to ensure that the UK motorist gets a good deal, not just at the petrol pump but on the vehicles that they purchase.

NHS Mandate: Health Inequalities

Monday 28th January 2013 Lords Chamber

Question

14:52

Asked By

[Baroness Williams of Crosby]

To ask Her Majesty’s Government what steps they are taking to reduce inequalities in health provision in line with the objectives of the NHS Mandate.

[Baroness Northover]

My Lords, legal duties in relation to reducing health inequalities will apply to the Secretary of State and NHS commissioners. Local authorities must have regard to reducing inequalities when commissioning public health services. The NHS and public health outcomes frameworks will be used to monitor progress. We are working across government to address inequalities through tackling the wider causes of ill health.

[Baroness Williams of Crosby]

I thank my noble friend for her reply. In November, the BBC pointed out that the gap between the least served and best served people was widening in this country. Cancer Research UK pointed out in a recent survey that the likelihood of an unskilled worker dying of cancer was twice as great as that of a professional worker in the same region. In light of these figures, the Liberal Democrats proposed, and the Government accepted, a specific duty on the Secretary of State to have regard to inequalities in health. Despite that, the outcomes framework has among its five domains no reference to health inequalities and, despite the very strong support expressed by the public in the mandate consultation, there was no specific reference to inequalities in health in any of the recent DfH documents. Can I therefore ask the Minister directly whether she will agree that, when the review of the outcomes is made next year, a greater attempt will be made to have a specific section dealing with health inequalities and, one hopes, measuring real progress in this most difficult of areas?

[Baroness Northover]

My noble friend is right to focus on health inequalities that remain. The last Administration and previous Administrations have sought to address them, as have we. In the Health and Social Care Act 2012, for the first time there were specific legal duties to reduce health inequalities. I am slightly puzzled by what my noble friend says about outcomes, because if she looks at the public health outcomes framework and the NHS Outcomes Framework —in particular the public health ones—the two overarching outcomes are increased health life expectancy, and reduced difference in life expectancy and healthy life expectancy between communities. That is the measure against which we will judge what is done in public health.

[Lord Tomlinson]

Will the Minister accept that the proposals to close the excellent and much-admired accident and emergency hospital in Lewisham, and to downgrade its maternity services, have been made not because there is anything wrong with the hospital but because a government-appointed administrator has said that that should be done in order to help the neighbouring National Health Service trust, which has run up £130 million-worth of debt? Will she accept that closing and downgrading good facilities is an act of almost criminal stupidity, which leads to nothing but increased health inequalities when the Government’s objective is to reduce them?

[Baroness Northover]

The noble Lord might have heard his noble friend Lord Darzi comment on the difficulty of reorganising services so that they are as efficient and effective as possible. I would ask him to have a look at that.

[Lord Tomlinson]

What is your answer?

[Baroness Northover]

My answer is that, as I have said, the Act puts reducing health inequalities at the centre; that is a responsibility at every level, and those things will be monitored in certain ways. As the noble Lord, who is winking at his colleague and perhaps not looking at me right now, might remember, the Secretary of State is answerable to Parliament and will be answerable for all these areas. If the noble Lord is right, and actions that are taken do not reduce inequalities, there will be an opportunity to hold the Government to account.

[Baroness Hollins]

My Lords, the first priority in the mandate is about preventing people from dying prematurely. The Minister spoke about inequalities between communities, but I am concerned about two of the improvement areas mentioned in this priority, which are about reducing premature mortality in people with serious mental illness and people with learning disabilities. Will the Minister tell the House about the clinical leadership being put in place to ensure that these two areas are addressed energetically in order to reduce health inequalities within communities?

[Baroness Northover]

The noble Baroness is right to highlight this area. I point out that the NHS Commissioning Board has recently advertised nine posts which focus on health inequalities. I am sure that that kind of focus will help. The noble Baroness is right in that there are certain groups within communities that are particularly vulnerable. She will probably also be pleased to hear about the Inclusion Health programme, which focuses on particular groups which have particularly poor health outcomes, and which is chaired by Professor Steve Field, of whom she will be well aware.

[The Lord Bishop of Wakefield]

My Lords, given that one aspect of the Government’s strategy to improve patient outcomes and reduce health inequalities is to encourage a shift from hospital-based to community-based care, will the Minister say what steps are being taken to address the shortage of district nurses, whose numbers have fallen by more than a third in the past decade?

[Baroness Northover]

I will write to the right reverend Prelate with numbers, as I have seen them but I do not have them in my brief here. I point out that because health will be far more focused in the local area, it is extremely important for the health and well-being boards, for example, to look at how health is delivered in their area. If there are problems because of a lack of staff, they will need to address that.

[Baroness Farrington of Ribbleton]

My Lords, would the noble Baroness care to correct a mistaken idea that she may have put to the House? I listened very carefully to my noble friend Lord Darzi, who said that his general comments about centres of excellence in no way related to the Lewisham situation, on which he was not commenting. Could she correct that, please?

[Baroness Northover]

The noble Lord commented on the difficulty of reorganising, which is what I have just highlighted, and it was in relation to the controversy over what is happening in south London. He explicitly said, it is true, that he could not comment on that case but it is extremely important in these cases that a strategic overview is taken of where provision is best set. The Department of Health is obviously well aware of what is said about the strength of accident and emergency at Lewisham Hospital. No doubt if that is a proved case, it will be necessary to bear it in mind.

Healthcare: Support Workers

Monday 28th January 2013 Lords Chamber

Question

15:00

Asked By

[Lord Willis of Knaresborough]

To ask Her Majesty’s Government what plans they have to train and register health care support workers.

[Baroness Northover]

My Lords, my right honourable friend the Prime Minister has announced a £13 million innovation fund, which will provide opportunities for healthcare assistants to progress to nursing roles, and a review of induction training for care staff by the Care Quality Commission. In addition, new training and conduct standards for care staff will be published shortly. We are considering what further action is required in the light of the findings of the public inquiry into Mid Staffordshire NHS Foundation Trust.

[Lord Willis of Knaresborough]

I thank my noble friend for that very helpful reply. However, does she accept that at the moment there are literally tens of thousands of elderly, frail patients, often with comorbidities, being looked after in domiciliary or care homes by an army of well meaning healthcare support workers who receive virtually no training and who are unregistered, unregulated and often unsupervised? Will my noble friend do three things in the forthcoming legislation: will she ask the NMC, first, to set standards for all healthcare support workers; secondly, to make that training mandatory; and, thirdly, to set out a timetable by which if employers do not use trained staff, it will in fact be an illegal act?

[Baroness Northover]

My noble friend makes some very cogent points; of course, he has recently reviewed this whole area in the Willis report. As I mentioned just now, we are imminently to receive the report on the Mid Staffs situation, which continued over a long period. My understanding is that it will be published on 6 February. The Government will be responding to what its recommendations might be, but I have already mentioned that Skills for Health and Skills for Care are developing standards for the training and conduct of support workers. They should report on that very shortly. The CQC has also been commissioned to review induction training, so we are acutely aware of this and are working on it at the moment.

[Lord Wigley]

My Lords, in view of the fact that Skills for Health has a UK remit, whereas I believe that Skills for Care has an England-only remit, can the noble Baroness tell the House what consultation there has been with the Governments in Wales and Scotland to ensure, on the one hand, that lessons are learned from each other and, on the other hand, that the training needs are co-ordinated to the benefit of everyone?

[Baroness Northover]

We are in constant contact with the devolved Administrations; I have information from both Wales and Scotland. It is indeed extremely important that we learn from each other, as the noble Lord has flagged up.

[Baroness Wall of New Barnet]

My Lords, I, too, congratulate the Government on the steps that they have taken so far, although they have taken a long time to do them. In addition to the area that the noble Lord, Lord Willis, talked about, there are still issues inside hospitals of patients not understanding that healthcare assistants are qualified to do the work that they are doing, while the healthcare assistants desperately want them to understand that. The Government’s failure to push this forward quickly is damaging that relationship. It also makes patients feel unsafe when they really have no need to.

[Baroness Northover]

In many parts of the health service, there is excellent care. I have certainly seen that first-hand. We have to make sure, as the noble Baroness does within her trust, that all care is consistent, safe, effective and compassionate. I take seriously the point that she makes.

[Lord Elystan-Morgan]

My Lords, does the Minister accept that, with regard to out-patients, a common path is often beaten to their door by NHS workers on the one hand and social service workers on the other? Very often, there is a total lack of co-ordination between them, with each group acting as if they came from independent—and sometimes even jealous—empires. In the circumstances, does she not agree that there is a strong case for support workers to be jointly employed, jointly trained and jointly answerable in respect of these matters?

[Baroness Northover]

This is an issue which the noble Baroness, Lady Emerton, has flagged up and I think she made a very cogent case. Health workers and social care workers move between the two sectors. We are trying to make sure—as previous administrations have sought to do—that the two systems are better integrated, because a patient is one person. They may cross between the two sectors, but they should have the same standards of care, whichever part of the system they are in.

[Baroness Brinton]

My Lords, given that there is a visible difference between homes where all the staff are trained and those where it is a bit patchy—to be favourable about it—can the Minister confirm whether the Government will be looking for compulsory training, which seems absolutely key to success in protecting both patients and staff?

[Baroness Northover]

I can assure my noble friend that all options will be considered when we receive the Mid Staffs report.

[Baroness Masham of Ilton]

My Lords, is the Minister aware that, without registration of these care workers, they can go anywhere and work anywhere, when they are dangerous and not suitable for work because they cannot be tracked?

[Baroness Northover]

As the noble Baroness knows, employers have a responsibility to make sure that those whom they employ are suitable and do not have the kind of record that she has indicated. We also know that regulation per se does not necessarily mean that good care is given; therefore, a proportionate and intelligent response is needed if we are to ensure that the care given is of the consistency, safety and quality that we all wish to see.

National Health Service (Amended Duties and Powers) Bill [HL]

Monday 28th January 2013 Lords Chamber

First Reading

15:07

A Bill to re-establish the Secretary of State’s legal duty as to the National Health Service in England, quangos and related bodies.

The Bill was introduced by Lord Owen, read a first time and ordered to be printed.

Growth and Infrastructure Bill

Monday 28th January 2013 Lords Chamber

Committee (2nd Day)

15:07

Relevant documents: 11th Report from the Delegated Powers Committee, 10th Report from the Constitution Committee.

Clause 4: Permitted development rights for changes of use: prior approvals

Amendment 51A

Moved by

[Lord McKenzie of Luton]

51A: Clause 4, page 5, line 25, leave out “, or of the Secretary of State,”

[Lord McKenzie of Luton]

My Lords, I should make it clear that this is a probing amendment. The Explanatory Notes to the Bill state that although Section 60(2) of the Town and Country Planning Act 1990 enables development orders for physical development to be granted unconditionally or subject to approval of the local planning authority, there is no equivalent conditionality which can be imposed where the development is a change of use. New subsection (2A) rectifies this and states that an order for development consisting of a change in the use of land,

“may require the approval of the local planning authority, or of the Secretary of State”.

The inclusion of the Secretary of State in those potentially needing to approve does not appear to apply where physical development is involved. May I therefore ask the Minister why this additional potential power has been given to the Secretary of State and why there is a disparity between those two situations?

[Lord Ahmad of Wimbledon]

My Lords, I should like to explain why the Government believe that it is both necessary and appropriate to include the Secretary of State within the powers set out in Clause 4. As the Committee is aware, we are keen to free up the planning system from unnecessary constraints to ensure that local planning authorities can focus on the most important planning matters in their respective areas. We want to ensure that economic growth is not suffocated by unnecessary constraints on development that is change of use. We have already announced our intention to allow for the change of use of offices to residential accommodation, measures to make better use of existing buildings, and to make it easier to change use to a new state-funded school. I shall come on to that in a moment. These will be secured through the granting of a permitted development right.

As the Committee is aware, the permitted development right regime is a well understood tool for granting national planning permissions for small-scale development. Indeed, Section 60(2) of the Town and Country Planning Act 1990 already provides for the Secretary of State to make a development order containing permitted development rights which require the approval of the local planning authority with respect to certain matters. This allows potential impacts from the development to be managed effectively.

Similarly, Clause 4(1) will allow the Secretary of State to provide that local authorities can ensure that, where permitted development is granted for a change of use, the impacts from that development can be managed sensitively. For example, this could include ensuring that adequate measures are in place to manage the impact of any additional traffic generation or noise created by the change of use.

We are clear that there is also merit in providing that the power within Clause 4(1) applies to the Secretary of State. By doing so, we are providing that the Secretary of State can further prescribe the scope of a permitted development night for change of use within the boundaries of the existing use classes. This could ensure that only those particular uses where additional freedoms would be beneficial, where there are sufficient safeguards and indeed where they would not impact adversely would be permitted. Therefore it would be possible that the effect of a development order could be limited to buildings or categories of building approved by the Secretary of State or other Secretaries of State.

Let me be clear that the Secretary of State’s power in Clause 4 can be used only within the context of a particular permitted development right set out in the development order made by the Secretary of State under powers in Section 60 of the Town and Country Planning Act 1990. Permitted development rights very often have conditions and limitations attached. Clause 4 will enable those conditions to include the approval of matters relating to the change of use by the local planning authority, the Secretary of State or indeed both.

The matters to be approved will be clearly set out in the actual development order. We intend that the power will be used to bring forward our proposed permitted development right to support the creation of new state-funded schools. This will in this instance take account of a decision by the Secretary of State for Education to have considered and committed to the funding of a school. In doing so, we are ensuring that the planning system supports our priority to ensure that every child has an opportunity to benefit from a good state-funded education, something that I am sure the whole Committee wholeheartedly supports. Indeed, in response to the noble Lord, Lord McKenzie, I am sure that he is aware of a place not too far from his area of Luton—Bedford. I can think of no better words than those of the chairman of Bedford Free School, who said that,

“these new rules would have helped us move into the building quickly and easily, so we could concentrate on a new school that the community and local parents wanted, with an excellent head, in one of the most deprived parts of our town”.

Indeed, that was a very good example of where the actual development of the school was delayed but, had these rules been in place, that would not have been the case. It therefore remains the Government’s view that the creation and development of state-funded schools is strongly in the national interest and that planning decision-makers can and should support the objective in a manner consistent with their statutory obligations.

Clause 4 is a sensible measure and will ensure that development can take place quickly while also managing potential adverse impacts locally. As the noble Lord, Lord McKenzie, said, this is a probing amendment. I hope that, with the reassurances that I have given, he will be willing to withdraw his amendment.

15:14

[Lord Beecham]

My Lords, the Minister has taken the opportunity to mention in your Lordships’ House a decision recently announced by the Secretary of State. The latest ukase from the tsar of Eland House goes even further in eroding the position of local authorities. The proposal that he has just announced would allow the Secretary of State to grant permitted development status—as I understand it, for a year—during which a planning application would be processed. That seems to be an extraordinary pre-emptive procedure. I cannot think of a precedent for something of that kind. It would be bad enough if it were a final decision. It is ludicrous to pretend that it is a temporary decision because it is almost inconceivable that the Secretary of State, having granted that permitted development, would not end up approving an application even if it had been turned down by the local authority and the matter went to appeal.

It is another example of the Government interfering and intervening in local decision-making, and in this case in a quite unprecedented way. I invite the Minister to indicate the basis on which this change is happening. I know in my own city a sort of school has been established in what are effectively domestic premises. I do not know how big the school is intended to be, but it is certainly not complying with a number of regulations, including of course the planning regulations. While I would not expect there to be many examples of wholly unsatisfactory buildings being used in this way, there clearly is a risk that schools will be encouraged by the order from the Secretary of State to proceed willy-nilly with their proposals, potentially excluding the local authority entirely. If that is what is envisaged in this context, in how many other areas will the Government seek to assume these powers, and with what effect on the local planning system?

[Lord Greaves]

My Lords, I saw this only a few minutes ago when I was alerted to it by an e-mail from the Bill team. I congratulate them on doing that, since, along with the Minister’s comments, it gives us the opportunity to debate this under a rather different and less dramatic amendment from that of the noble Lord on the Labour Front Bench.

Having now read the Statement while the discussion was taking place, the proposal that is being put forward seems quite extraordinary. Anything that is announced as a new state-funded school and has the support of the Secretary of State for Education goes ahead outside the normal planning system. That is, I understand, exactly what is being proposed at least for the first year. Presumably it will apply to all of them and not just to those which are said to have had problems opening on time because of delays in the planning system. Once again, we find that if there is a problem with planning—which is presumably caused by something real and is not invented by the planning authority—it is the planning system that is to blame. As the Prime Minister said quite recently, the planners should be removed from the scene. Those were not his exact words, but he said that they should be swept away—that they should get out of the way and let growth commence.

If that is what parts of the Government want, they should be fairly clear and overt about it and we can have debates about it. However, what is happening is that bits are being chipped away here and there. The noble Lord, Lord Beecham, said that it is eroding the power of local authorities. I would say it severely undermines the whole reason for and purpose of the planning system. If it is to be undermined for somebody who wants to run a small business that does not really affect anybody else, and that person wishes to run that business in very unsatisfactory circumstances—in a condition of squalor—I suppose that is their business. However, we are talking here about schools, children in schools and the people who live in the neighbourhood around schools. Even if it is a small free school, it will inevitably have some impact on the people who live around it.

I read that these changes will be subject to a prior approval process to mitigate any adverse transport and noise impacts. I am not quite sure how that will work. Presumably, if there are adverse noise impacts, they will come under environmental health legislation anyway, but I am not sure how the prior approval process will mitigate any adverse transport impacts and what that means. Perhaps the Minister can explain exactly how that will work.

For everything else that might result from a change of use to a school, not necessarily with changes of any sort to the building, presumably you just close down whatever it was previously and move in. It could have been offices, hotels, residential institutions, secure residential institutions—perhaps they are appropriate for some schools, but I will not comment further on that—or used for assembly and leisure. These uses can be converted overnight to a school without so much as a by-your-leave other than prior approval to mitigate any transport and noise impacts. Surely this is fundamentally wrong. It is stated that in a small number of cases free schools have had to delay their opening because there were planning problems; that may be the case. If there were problems, whatever they were, that suggests that that opening should have been delayed and those problems should have been sorted out, just as with any other change of use that would take place.

The Minister’s Statement, headed “Planning and Schools”, says that the Government believe,

“that the creation and development of state-funded schools is strongly in the national interest”—

—we all agree with that; it is a question of how you create and develop them—

“and that planning decision makers can and should support that objective, in a manner consistent with their statutory obligations”.

I think that is referring to the planning decision-makers, but this proposal would abolish their statutory obligations, at least for 12 months. As the noble Lord, Lord Beecham, said, a free school supported by the Secretary of State for Education which opens without planning permission in the first year has to spend that year getting planning permission. If that planning permission is turned down because the premises are obviously unsuitable to be turned into a school, for whatever reasons, the idea that that will go to appeal and the inspectorate will uphold the decision of the local planning authority is not likely. The inspectorate will get its firm instructions. It is quite clear that the Secretary of State for Education and the Secretary of State for Communities and Local Government are in cahoots over this. The planning system is being pushed to one side.

Yet the Statement goes on to say:

“Experience to date has demonstrated that with the assistance of the Education Funding Agency new state-funded schools, and free schools in particular, have been successful in identifying sites that have gone on to secure planning permission”.—[Official Report, Commons, 25/1/13; col. 25WS.]

Presumably we can discuss this further on Report, but since we are discussing it now, it seems that at the very least the Minister needs to be clear and tell us how many instances there have been, out of all the free schools which have been set up, of them having their opening delayed because of planning problems? Where is the evidence that this is happening? What is the scale of the evidence, and what were the circumstances in each of those cases? I suspect that there are not very many of them.

This is a shambles. It is a Secretary of State for Education and a Secretary of State for Communities and Local Government, as I said, in cahoots, driving a coach and horses through the normal planning system. The problem is that if government policy always trumps good planning, where will it end? It will not end with free schools, it will end with anything that any Secretary of State thinks is a good idea and pushes through, regardless of the effects on the people using the premises and on the local community.

[Lord Bates]

Could I clarify one point in what the noble Lord is saying? He seems to suggest that this is something that the Secretary of State is imposing on a local community, whereas the whole point of free schools is that the demand for them comes from within the community; local parents of local pupils will have indicated their desire to see a school established. Contrary to the notion that this is top-down, this is therefore surely something that supports local people in their local community getting access to the education that they want for their children.

[Lord Greaves]

My Lords, I do not think that in this Committee we want to go too deeply into free schools and whether what the noble Lord just said is true or whether other factors are involved and to what extent. Free schools exist and, whether some of us like them or not, they are part of the system now. I am not in any way arguing about that in this Committee because I do not think that it is our business. What seems to be happening, however, is that in certain circumstances, when a proposal for a free school comes forward, whatever the instigation or motivation for it, the Secretary of State is saying that the normal planning system will not apply for at least the first 12 months. That is the problem.

I believe that the two Secretaries of State are clearly in cahoots over this, although people might want to use a slightly less emotive term than “in cahoots”. They are, perhaps, working together across departments, which some of us sometimes complain they do not always do. Nevertheless, they are clearly doing this and saying that in those circumstances the planning system will be set aside. That is obviously what is being said. If I want to set up a free school and Mr Pickles thinks that my free school is a good idea, I will not have to get planning permission before it opens. In the circumstances of a school, with children being educated and with the potential effect of a school on the local community, pushing aside the whole of the normal planning system seems to me to be outrageous.

[Lord McKenzie of Luton]

My Lords, I am grateful to the noble Lord, Lord Greaves, for his support for this amendment and to my noble friend Lord Beecham. When I drafted this amendment it was with a much more innocent approach than has appeared from this debate. It was simply looking at the wording and the disparity between change of use and physical development. However, given the debate that has just ensued, I am very glad that I drafted it. We have yet another example of something that runs through this Bill—an anecdotal approach to a perceived problem in the planning system, with the answer being to circumvent that planning system to deal with it. The issue is not the existence of free schools but their location, and why the normal planning process is not to be applied to that. Although this was a gentle, probing amendment, which I thought we might pass over swiftly with a clear explanation from the Minister, we have opened up something here that we will return to on Report, as well as having some wider debates about permitted development on amendments that come later in the Bill, as we try to remove some of the centralist approach that applies to those amendments and make sure that the local voice is heard.

[Lord Ahmad of Wimbledon]

Perhaps I can reassure the House. A number of issues have been raised and—as the noble Lord, Lord McKenzie of Luton, suggested—we have noted them, which I believe I made quite clear in the Statement. I do not want to delay the House too long but a number of points were made and I think it is appropriate for people to reflect on the responses prior to the next stage of the Bill.

The noble Lord, Lord Beecham, referred to the one-year temporary right and how that is doing away with the planning process; that is not the case at all. This is very much geared towards ensuring that a school opens on time, and no planning application for a free school has been refused to date. In response to the points raised by the noble Lord, Lord Greaves, this is not about with doing away with the planning process; it is about making the issue in relation to free schools easier. Bureaucracy exists in the planning process. This is not about wiping away planning permission but ensuring that a local community’s demands are met, as my noble friend Lord Bates pointed out. We are seeking to ensure, through the Bill, that we highlight those barriers that prevent such free schools coming into being at the required time.

15:30

As a father myself, I assure the House that if you are planning for your children’s education—as many noble Lords around the House will agree—you want to ensure certainty as to when a school will start and when the term will begin, and these regulations that we are putting in place seek to ensure that that happens. I assure my noble friend Lord Greaves that this is not about going outside the planning system but about permitted development for a year, and does not override the need to secure full planning permission from the local planning authority.

A number of other issues were raised but, bearing in mind that time moves on and we need to press ahead with the Bill, we will write to the appropriate noble Lords about their specific questions. However, I go back to my earlier comments to the noble Lord, Lord McKenzie. I hope that I have addressed and cleared his initial concerns, and that, given the probing nature of the amendment, he will seek to withdraw it.

Lord Beecham: Can the Minister confirm whether the proposals apply only to free schools or whether, as I read them, they apply to any state schools, which could be academies or local authority schools? A county education authority could go into an urban district that has planning powers and put in a local authority school on the same basis. This is not just for free schools, is it?

[Lord Greaves]

My Lords, I thought about that and then thought that the present Secretary of State will not give permission if it is a local authority school. He will say, “No, you’ve got to do it properly and get planning permission”.

I am grateful that the Minister emphasised that the period will be only one year, and I think that we understood that. However, he also said that, to the best of his knowledge, no free school has so far been refused planning permission—those were his words—and, therefore, at least half the answer to the question on how many have been delayed is “none”, at least at one end of the spectrum of being refused. It would be helpful if, when he writes, he can tell us how many free schools—and where they are—it is claimed have been delayed because of what he calls bureaucracy in the planning system. We can then look at them and make our own assessment of whether this extremely draconian measure is in any way justified.

[Baroness Donaghy]

My Lords, when the Minister writes, will he also explain whether there are any circumstances in which, during this protective period, one of these schools could be established but not be in the right place or have the right safety environment for the children there? Can he absolutely guarantee that a school that is established without proper planning permission will uphold all the usual standards?

[Lord Ahmad of Wimbledon]

My Lords, again, this debate widens. I made the point earlier that these are not draconian measures. This is not about two Secretaries of State making policy on the hoof. This is about two Secretaries of State relevant to this issue working together to ensure that we get a policy that works for the local community. The measure applies to any new state-funded school.

As to the question raised by the noble Baroness, I have already alluded to the fact that any new application for any school is subject to the same criteria. Therefore, if the scenario that she indicated has arisen—historically, if it has happened previously and people have had to look at where to locate schools—I am sure that remedial action has been taken. The proposals do not contravene health and safety or issues of security and the safety of children because they are ultimately priorities for any Government of whatever colour or coalition. The measure does not compromise them at all.

I assure any noble Lord who is thinking in that way that while one can never plan for all probabilities, this does not do away with the planning process in terms of the health and safety of children—just to be clear, nor does the issue of free schools negate the role of local planning authorities. They will continue to play a key part in decisions on the location of schools. Let it be absolutely clear that a new school is only established where a community need is highlighted: our new policy allows people to set up a school in response to local needs.

[Lord Greaves]

The Minister is goading me into one final contribution—I apologise to him. Again, I will avoid the issue of free schools themselves, which I do not think is relevant to this debate. They exist and they can be built, but it is a question of the role of the planning system in relation to them.

I am lost for words when the Minister says that this clause will not negate the role of the local authority in deciding the location of these free schools. It clearly will, because they will be set up in a location without the need to get permission from the planning authority. When he writes to us, can the Minister set out what the role of the planning authority will be in relation to a free school? The “prior approvals” process applies to two particular things. Can he tell us exactly how that will operate and, in particular, what the timescale will be; will it be the same as a normal planning application, or will it be a very informal thing? Will he also tell us what will happen if there are strong reasons for opposing the location of a free school after it has been set up and is in operation? Presumably, it will be spending money, perhaps on the building. What will happen if that is turned down subsequently by the local planning authority?

[Lord Ahmad of Wimbledon]

As I have already indicated to my noble friend, we will write and cover those matters.

[Lord McKenzie of Luton]

My Lords, I fear that the Minister has raised more questions than he has answered in this debate. We should be clear that, as amended, the provision concerns “change in the use”—requiring the approval of the Secretary of State—and is not limited to free schools or schools. It could indeed be anything at the whim of the Secretary of State. I have absolutely no doubt that, on the basis of the exchanges that have taken place today, we must return to this and constrain this provision in a very meaningful way. In the mean time, I beg leave to withdraw.

Amendment 51A withdrawn.

Clause 4 agreed.

Clause 5 : Limits on power to require information with planning applications

Amendment 52

Moved by

[Lord Greaves]

52: Clause 5, page 5, line 38, leave out “be reasonable having” and insert “have”

[Lord Greaves]

My Lords, in moving Amendment 52, I shall speak also to Amendments 53, 54 and 55, and clause stand part. I am grateful for the support of my noble friend Lord Tope and that of the noble Lord, Lord McKenzie of Luton, on the first three amendments.

The amendment allows the Committee to discuss the proposals in the Bill to set limits on the powers of a local planning authority to require information from applicants for planning permission. My first two questions are general. First, what is the evidence that this is a significant problem? There seem to be a lot of assertions behind some of the changes in the Bill that this and that are getting in the way of development and growth. There have certainly been complaints—I have heard them from time to time in my own area—from applicants who say that they are being asked for too much information, and that this is slowing things down. So there is anecdotal evidence from applicants that they do not like the amount of information for which they are being asked. However, there is no significant evidence—certainly I have not seen any substantial evidence—that this is a significant problem in many places. We have to ask the Government for more than just assertions and anecdotes about how much of a problem this is. That is my first question: what is the evidence that this clause is needed?

My second question is about whether in this Committee we are wasting our time discussing this. I suspect that we might be. My question is: if this wording is put in the Bill, what difference will it make? Will it make any difference to the amount of information that planning authorities in general ask of applicants in different circumstances? There is already wording in legislation that is very similar to the wording here, including in secondary legislation and in guidance. I suspect that this perceived problem is a chimera, and that in practice this will not make any difference.

The amendments in this group probe one or two things. The Bill states that requests for information must be “reasonable”. Over the years, I—along with quite a few other noble Lords—have put down amendments to different Bills demanding that things should be “reasonable”, in an attempt to get the Government of the day to explain what they mean by their proposals. I remember being told by the noble Lord, Lord Whitty, who is with us today, when I tabled amendments to past Bills, that putting wording about being “reasonable” in a Bill is not necessary—it is redundant and otiose. It should not be in legislation because there is an underlying principle to all legislation that people have to act reasonably. They have to make reasonable decisions on the basis of reasonable evidence. That goes across the whole of the law. Therefore, putting the requirement into a Bill is not something that one should do. Yet here the Government want to put it into a Bill.

What difference would it make? Amendment 55 attempts to define “reasonable”. If the Government want to put in “reasonable”, perhaps they should attempt to define it. In relation to the information that is required, my proposed new subsection states:

“The meaning of ‘reasonable’ in subsection (4A) shall include any information … required as a consequence of any enactment”—

I assume that I will be told that that is not necessary because obviously it would be reasonable—

“and … required as a result of the request of any government departments, government agency or statutory consultee including any other principal local authority that is consulted on the application”.

If this is going to be in legislation, it is very important, if an application is turned down and goes to appeal and the appellant asks for costs on the basis that the local planning authority was guilty of unreasonable behaviour, that the local planning authority should not be penalised in any way as a result of—in effect—having acted on behalf of another body. It may be the district council, it may be the county council or the Highways Agency that wants more information and more work done on highways implications, on a transport plan or whatever. The Environment Agency may want more information about environmental issues such as biodiversity or drainage. On the basis of the information and the decisions made, the inspectorate may decide on appeal that it was wrong and that the information was not a material consideration, should not have been asked for and was not relevant to the application. The local authority should not be penalised on the basis that the Environment Agency or the Highways Agency or another local authority or other statutory consultee has asked for this information. Once the local planning authority gets that advice from the Environment Agency it must follow it up. If it does not it will be dragged through the media for being irresponsible.

15:45

Amendment 53 concerns the issue of reasonableness again. The Bill suggests that information should be asked for,

“only if it is reasonable to think that the matter will be a material consideration”.

It is the local planning authority that makes that decision so I suggest that the Bill should read,

“if the local planning authority thinks”,

it should be a material consideration.

Amendment 54 is strangely worded, in my view. It suggests that if,

“the matter will be a material consideration”,

then particulars should be asked for. In many cases it is known to be of material consideration, which is why the information was requested, whereas in other cases it is marginal; the local planning authority will not be sure whether or not it is going to be a material consideration. It asks for the information, partly to find out whether it is material to that application. I suggest that instead of saying that it “will” be of material consideration the wording should be that it “is likely to” be of material consideration. Clearly, if it has nothing to do with the application the local authority should not be asking for that information anyway.

It is alleged that many local planning authorities are asking for all kinds of information. For example, when considering an application for a sports stadium the local authority should not ask for the football results of the teams that will be playing there; this is not a material consideration. However, the number of people attending, how they are going to get there and the effect of floodlighting on the neighbourhood clearly are material considerations. There are marginal issues which may or may not be and this clause goes over the top. I look forward to hearing the Minister’s reply.

[Viscount Hanworth]

My Lords, I would like to reaffirm some of the points we have just listened to. The provisions of Clause 5, which seek to limit the power of local planning authorities to require information in association with planning applications, seem to be not only unnecessary but pernicious. I am at a loss to understand their provenance. As has been suggested, the key word that reveals the drift of the thinking is “reasonable”. The Bill enjoins planning authorities to limit their demands for information to those that are reasonable. The implication is an aspersion that, hitherto, there has been a significant number of unreasonable demands for information. Where is the evidence that would support such an aspersion? I am sure there is no such evidence.

Rather than relating to the practice of planning, the clause seems to relate to a prejudice against the planning process. As such, it seems to accord with the general tenor of this Bill, which has little or no grounding in facts or in evidence. Perhaps the worst aspect of this clause, as has been suggested, is that it gives no indication of how judgments would be made of what is reasonable and what is not reasonable. The consequence of this is that it invites planning applicants to withhold information on the spurious grounds that it is unreasonable to request it. A licence to behave in this way would surely wreck the planning system. One can fairly ask the Minister whether that is indeed the intention of the Bill.

[Lord Cameron of Dillington]

My Lords, I am totally supportive of this clause, but I am vague about how it will work as it is without any form of back-up information. It may be my ignorance of the planning system because I come to it from, as it were, the other side of the desk as an applicant rather than a local authority or planning officer. I am particularly concerned about small developments in rural areas, and here I ought to declare an interest for the purposes of this Committee as a farmer and landowner.

In many rural areas, which are of course underfunded as the result of an unfair and imbalanced central government funding system, planning departments have inadequate resources, staff and expertise. I believe that some local planning authorities are reluctant to engage in pre-application advice; indeed, they cannot afford to do so. I am concerned about the first encounter with the local planning authority for small applicants when they submit an application. It is likely that they will find themselves having to pay, say, 30% to 50% of the costs of a project—we must bear it in mind that these are small projects worth £50,000 or even less—in order to conform with the demands made by the local planning authority in terms of reports and consents. The project, of course, is also greatly delayed because they have to get all the answers needed to complete these reports. It seems to me that the belt-and-braces, tick-box approach applied by local planning authorities is not necessarily in order to cover themselves in case of a comeback on the result of an application, but all too often because they lack the expertise within the department to know what is relevant. That is why they take a belt-and-braces approach. The fact that, due to the costs, a small project is killed before it even gets off the ground is often the cause of a secret sigh of relief in an overworked and underfunded local planning authority. In these circumstances, you have to ask yourself where our much-needed development will come from.

In my experience when talking to councillors—I have never actually been a councillor—I have found that few of the reports that are asked for are read by the members of the planning committee. One might say that that is fair because they are reported by the planning officers who know all about them, but even that is not necessarily always strictly accurate. I have known reports to be asked for by planning officers which are already in the file; in other words, the officers have not read the file. I have some questions. How is an underfunded rural local planning authority without knowledge and expertise to apply this clause? How will an overworked planning officer apply it to the multitude of different sorts of application that he has to deal with in a rural area? Is this clause all there is? Should there not be more guidance, which is what I would really like to see?

As I say, it may be perfectly clear to those who have worked for a local planning authority and are used to being on the other side of the desk, but it seems that we need a bit more detailed guidance. However, I repeat that I am totally supportive of this clause.

[Baroness Young of Old Scone]

My Lords, perhaps I can help the noble Lord, Lord Cameron of Dillington. Lots of guidance on this issue is already available. I believe that Clause 5 is unnecessary in what, if I may say so, is a pretty unnecessary Bill, so I support the amendments, particularly Amendment 55 and, indeed, the proposal that the clause should not stand part of the Bill.

As I say, quite a lot of guidance is already provided in the NPPF to local authorities on information requirements, and we need to allow some time for that to bed in before taking any unnecessary legislative steps to control local authorities in the information that they may seek. As the noble Lord, Lord Greaves, said, it is possible to see what the evidence is that local authorities are being overly prescriptive and requiring information that is otiose, irrelevant or unreasonable. I have had experience across the planning system, mostly from the point of view of organisations requiring information from applicants through local authorities, and I would say that it is the lack of information, or delayed or poor quality information, which creates uncertainty and causes delays that result in poor quality decisions and make it virtually impossible for other interested parties to have a full and fair view of the impact of an application. That is particularly true for some of the environmental requirements that local authorities seek from planning applications.

With regard to “reasonableness”, I am sure the Minister will say that reasonableness is reasonable, but that the wording removes from the local authority the ability to be the final arbiter, to be in the driving seat and to be able to reduce the level of uncertainty that can cause these adverse consequences for decision making. It would be much wiser to allow the guidance that has been issued so recently time to work through in order to see whether local planning authorities are making overly onerous information requirements. If they are, the guidance should be tightened because this issue is much more appropriate for guidance than for primary legislation.

It is interesting that the Royal Town Planning Institute is against Clause 5. Even the Law Society, while supporting Clause 5, quite rightly notes that careful guidance will be needed to avoid this provision becoming a new judicial-review weapon for third parties to stall developments. As an old hand at judicial review as a weapon to stall developments, I would not like to think that we were creating more opportunities to do that.

[Lord Beecham]

The noble Baroness, the noble Lord, Lord Greaves, and my noble friend Lord Hanworth have done a pretty effective demolition job on this proposal, without the benefit of planning permission.

Another issue arises from the impact assessment. That impact assessment purports to make another part of the case for the Government’s proposals, which relates to costs. On page 29 of the impact assessment, there is an analysis of the:

“Estimated savings for applicants under a central scenario assuming 10% reduction in costs”.

For the 347,800 annual applications, that comes down to something like £54.8 million, on the basis of a 10% reduction in costs. That is the net present value. The costs are £54.8 million and because of some mysterious rounding of the figures, the savings purport to come out to £6.5 million. It might be thought that that is not an inordinately vast sum of money in the scale of things, but it is perhaps worth saving if one could get it.

However, within that, it is significant that for major developments for dwellings, the annual savings would be £1.4 million, so it is hardly a material factor in holding up house building in the country. For a major development—not dwellings—the annual saving is even less, £0.9 million.

Where does the 10% figure come from? Why is 10% applied across the piece? Are the Government really suggesting that information required for a householder development, for which the savings per application are deemed to be all of £69 each, somehow will be of the same percentage order as those for a major development? That strikes me as highly unlikely. This seems to be a bogus figure plucked out of thin air to provide some sort of financial justification for this measure. In addition, the impact statement goes on to say that the Government intend:

“to introduce complementary changes to secondary legislation, which will have the effect of re-introducing a right of appeal where a council has failed to validate an application”—

presumably inter alia but not necessarily exclusively on the ground of lack of information—

“and the statutory time limits for determining a planning application has passed. This will address the impact of recent court decisions that have challenged the Planning Inspectorate’s ability to consider such appeals”.

If this is a significant issue—the Government appear to think that it is—why is there no amendment to the Bill? Why is it being done in the form of secondary legislation, which, of course, cannot be amended if it comes before your Lordships’ House? From time to time, the Government take opportunities to add things to Bills, sometimes in considerable numbers. Why is this matter not being added to this Bill but being left to secondary legislation?

16:00

[Lord McKenzie of Luton]

My Lords, we have signed up to most of the amendments tabled by the noble Lord, Lord Greaves, but did not sign up to his definition of “reasonable”, simply because one of his other amendments sought to delete that term from the Bill, which we thought was a better solution. Along with the noble Lord, we consider that the clause is superfluous, or unnecessary or pernicious, to use the terms of my noble friend Lord Hanworth. Again, we see a measure which is based on assertion and anecdote rather than on hard evidence.

The Government launched a consultation document entitled Streamlining information requirements for planning applications on 3 July last year, which they closed on 11 September. When are we going to get the Government’s response to that consultation? Will it be before or after Report? Interestingly, the consultation states:

“There is no immediate vehicle for further reforms to primary planning legislation”.

That was back in July and it somewhat reinforces our contention that this Bill has been cobbled together in pretty short order. The consultation focuses on three areas: outlying planning permissions; local informational requirements; and agricultural land declarations. In respect of local information, which, effectively, is dealt with in this clause, the document cites that, although the primary powers of local authorities in this respect are broad, they are constrained, in particular by the publication of local information equivalents and the evidence and particulars regarding what is required and by national policy requirements that state that,

“local planning authorities should only request supporting information that is relevant, necessary and material to the application”.

This is what the procedure order requires, as does the related guidance. The consultation document muses that recent changes, including the NPPF, referred to by the noble Baroness, Lady Young, and the demise of regional spatial strategies, will mean that the information requirements of local authorities are likely to be out of date and should be updated every two years. However, it is clear from this document that, if it is necessary to change the current requirements—for example, with a regular updating of information lists—there are already powers to do this.

This also raises the question of why the policy position set down in the NPPF is not sufficient and why it is considered that primary legislation—available, it seems, after all—is needed. There is already a requirement to be reasonable, so what does Clause 5 add other than confusion? I agree with the noble Lord, Lord Cameron, that some planning authorities struggle and are under-resourced. However, surely the answer is to make sure not only that they have clear guidance but are supported in their endeavours. It seems to me that this clause does not help them or move them on one jot.

Specifically, from whose perspective does reasonableness have to be judged? Is that not the role of the local planning authority that has to consider the application? At the end of the day, I fear that this clause is, like too many in this Bill, all about adding another bit of pressure on local planning authorities so that they are encouraged to ask for less, to decide more quickly and to avoid risking appeals, so undermining the quality of decision-making. If the noble Lord is minded at a point in time during our deliberations to seek to have this clause deleted from the Bill, we will support him.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

Clause 5 amends Section 62 of the Town and Country Planning Act 1990, just in case that had escaped noble Lords. The clause sets out limits to the general power, under Section 62(3) of the Act, of local authorities to request information in support of planning applications.

There has been some debate today about why the clause is necessary. The department published the consultation paper on 21 January—indeed noble Lords’ attention has been drawn to it—and I hope that provides some reassurance on this point. With regard to the other consultation paper that was concluded in September, the Government’s response was provided on 12 December, so a response has been made. The consultation paper demonstrates how the provisions in the Bill form a critically important part of a wider package of deregulatory measures brought forward with the purpose of simplifying the planning system. As well as ensuring a better alignment between the National Planning Policy Framework and the primary legislation that governs information requests by local authorities, the consultation emphasises the need to place limits on the broad power that currently exists in Section 62(3) of the Town and Country Planning Act. This is to address the impact of recent court decisions and ensure that applicants can access the planning appeals system where there is a dispute with the local authority regarding what information is necessary to validate a planning application.

The noble Baroness, Lady Young, asked about the interrelationship between the National Planning Policy Framework and this clause. While the NPPF sets out a clear expectation on local authorities through policy, it is alone insufficient to overcome the interpretation given by the courts to the current legislative framework. The clause also safeguards the position of a local authority in requesting information, where a justification exists on the basis that the matter will be a material consideration when it comes to determine the application in question. Overall, I believe this change will bring a more balanced state of affairs whereby applicants and local authorities will work together to establish the amount of information necessary to get a particular planning application validated. Alongside our wider package, the clause will deliver a better and more proportionate approach to information requests and reduce the scope for disputes that can lead to delays at the validation stage.

Amendments 52, 53 and 54 would all considerably weaken the purpose of the clause and the achievement of the objectives I have just set out. Amendment 53 would amend the objective test in Clause 5 of whether a matter will be a material consideration in the determination of the application to become a more subjective test where the primary role is with the local authority to determine whether this is the case. That would undermine our attempt to address the broad powers of local authorities that have been the source of criticism by the courts. Similarly, Amendment 52 would essentially return us to the position that currently exists and has been found problematic: a subjective test decided by the local authority. A local authority would merely have to have regard to the nature and scale of the development when making an information request.

The purpose of requiring such information requests to be reasonable is to ensure that a local authority can justify whatever information it is seeking and can respond, if pressed, as to why it considers applicants should have to go to the often considerable expense of providing it. Presumably, that is something which we all agree is sensible and appropriate. Amendment 54 would continue in a similar vein, by weakening the requirement for local authorities to justify information requests on the basis that it is reasonable to think that they will be material considerations in the determination of the application to a looser requirement that they would be likely to be. Although I can understand the intention behind the amendment, we need to ensure that local authorities are clear, consistent and certain in why they think that information is going to be relevant to the determination of the application in question. Changing the test to “likely” will weaken the effect of this important principle.

Amendment 55 seeks to respond to the criticism that there is no statutory definition of what is “reasonable” by suggesting one. The definition attempts to set out circumstances which could definitively be considered “reasonable”. These would include information requests made by a government department, government agency or statutory consultee. As I have already said, the purpose of including “reasonable” in the tests is to require a local authority to justify why it considers information is necessary for the application to be validated. The likely requirements of a statutory consultee would clearly be a relevant justification as long as they are warranted by the circumstances of an application.

However, a tick-box attitude to the local list—there are indeed local lists of what information would be required—without consideration of the relevance of any particular item for a particular application will not do. Attempting to draw up in primary legislation a definitive list of what is and is not reasonable is not likely to be helpful and could create confusion. The tests that apply are already clearly set out in the NPPF and the clause as it currently stands clearly emphasises this.

What we really want is for local authorities and applicants to think these matters through together and, where differences emerge at validation stage, to have a sensible discussion about what is reasonable in the individual circumstances of the case. The concern that has prompted this change is that the law as currently drafted allows local authorities to refuse to validate planning applications indefinitely and simply to impose information requirements unilaterally on applicants.

In summary, I fully understand and respect the need for us to safeguard the ability of local authorities to request information from the applicant where it is essential to the determination of a planning application. Clause 5 and the associated proposed changes to secondary legislation achieve this. No harm will be created by the requirement for such requests to be justified and, if necessary, enabling matters to proceed to appeal for a decision. Indeed, we consider that Clause 5 will encourage both applicants and local authorities to work more closely together to ensure that the likely impacts of development are fully appraised in the documentation submitted with the planning application in question.

[Lord Deben]

I assure my noble friend that many of us are very much in favour of this clause as it responds to a real need and an articulated concern. The Government have sometimes seemed to have felt that the planning system is a much more powerful deterrent to growth than many of us feel, but this change will be welcomed by those who feel that local authorities often have a standard list of things, whether it is applicable or not. I hope that my noble friend will be able to spread this approach to others, because many institutions, authorities and businesses constantly ask for a lot of information which is totally unnecessary but do it because they always have done. I hope she understands that there is great support for her position on this issue, although some of us are more unhappy about other parts of the Bill.

[Baroness Hanham]

My Lords, I am grateful to my noble friend for that contribution. I am not sure that I can commit other departments and other parts of government to doing anything, but I am glad of his support for what we are trying to do here. It is important that we get this right. I have been asked for the evidence on which the change is based. Not only have concerns been expressed on the part of the development industry about delays experienced at validation stage and the costs involved but this has been a long-standing issue and was a key theme in the Killian Pretty review, to which I am almost certain the noble Lord referred at Second Reading—somebody did anyway. That review, commissioned in 2008, was of the planning application process. Most recently, the department consulted on proposals to amend secondary legislation to streamline information requirements. It was clear from responses from the applicant community that they wanted us to go further and look at the primary legislative framework, which is what we have done.

The noble Lord, Lord Beecham, referred to the impact assessment. The savings predicted in the impact assessment are based on a reduction in costs generated by a shift in behaviour as a result of the clause and changes to secondary legislation. Both the clause itself and related changes to secondary legislation are necessary to introduce the ability for applicants to access the appeals system. If I am pressed—which I see the noble Lord is about to do—I will be happy to write to him on the detailed points made.

16:15

I have dealt with reasonableness and the impact assessment. The noble Lord, Lord Cameron, asked me about guidance. We are considering further at the moment whether additional guidance is needed. The noble Lord has said that there is guidance, but as new legislation appears, it may be necessary to provide guidance for that. However, discussions about that are taking place.

The noble Viscount, Lord Hanworth, suggested that we were prejudiced against the planning process. That is not true. We are trying to ensure that the planning process is fair to both sides—to the developers and the planning authorities. The purpose of this clause is to ensure that applicants are not asked for information that is clearly unnecessary for their application. The noble Baroness, Lady Young, quite rightly said that there are requirements from statutory authorities, but those will either be relevant or not relevant. If they are asked for that information and are given it, it will come as part of these discussions.

We want applicants and local authorities to get together and we want them to discuss, as my noble friend Lord Deben said, a list. All local authorities have a list of information which they will require. The danger is that that list becomes an absolutely set piece, and that you have to tick every single thing on it irrespective of whether it is necessary. We would like to prevent that happening further. The NPPF has referred to it. We think that this clause will strengthen the NPPF and that it is relevant and necessary in terms of the planning process.

[Lord Greaves]

My Lords, I am grateful to the Minister for that very detailed discussion of the amendments and the clause. I am grateful to all noble Lords who have supported the amendments and to the noble Lord, Lord Cameron of Dillington, for raising a slightly different issue, which he himself suggested would not necessarily be solved by this clause. Some planning authorities are finding it difficult to maintain an adequate standard of service at the moment. There is no doubt about that. I am not sure that that is only rural councils. In the past few days I have been told of a council that has only a handful of development control staff. Most small councils are in the same position. The council has reduced the establishment and encouraged people to take redundancy and so on. A high proportion of its few existing staff have got jobs in other places, which means that that authority is now down to one development control officer. That is clearly a fairly parlous position to be in. I am not quite clear how this clause will assist that local authority.

Having listened to the debate, I am coming to the view that, even if I were in any way tempted to seek to divide the Committee on clause stand part today, which I am not, I would be less likely to do so because it is less necessary. The more I think about the clause, and what it does, and listen to the experience of noble Lords around the Committee, the more I think it will not make very much difference at all. It might cause one or two authorities, which take a fairly slapdash approach to this and send a list without thinking about what is on it, to think a bit more sharply. However, in most cases it will not make very much difference. The more I think about it, the more I come to the view that I cannot tell the difference between it being reasonable to think it will and to think it is likely to be. Nevertheless, it was a useful discussion.

I am not sure whether we have an infestation of animals here now. No, my noble friend has dropped a sweet on the floor.

[Lord Burnett]

It is not a sweet; it is a biro.

[Lord Greaves]

Okay, it is a ball-point pen.

[Baroness Young of Old Scone]

While the noble Lords opposite are rummaging under the Benches, I wonder whether the noble Lord, Lord Greaves, might like to comment on the worry of the Law Society that I raised. He seems to be weakening in his resolve about this clause being unnecessary. I would like him to ponder on the fact that the Law Society is worried a bit about it becoming new judicial review territory which, as we know, is a great source of delay in planning applications.

[Lord Greaves]

I do take that seriously. If I am weakening, it is as to whether this clause will have any significant effect in practice and therefore whether it is worth while making the effort to remove it. There is lots of legislation which has no real effect in practice; we just accept that it goes through, I am afraid. However, with regard to judicial review, the ordinary applicants, about whom the noble Lord, Lord Cameron of Dillington, spoke, who might be having a modest expansion to their farm, business or whatever, are not going to go to judicial review. If there is a problem about too much information being required, I suspect it will concern those people. The noble Lord, Lord Cameron, is probably right that it is that sort of level of applicant. I do not think the householder applicant who wants an extension will be asked for lots of environmental information, and so on.

The big applications will have to provide the information anyway. If you are building a sizeable new housing estate, you are not going to get away without providing information on all the things that will be on the council’s list because they will include things such as drainage, the impact on the local roads and access into the site. They will want traffic counts and all the rest of it. You are not going to get away without that, whatever this legislation says. I suspect that they are providing all the information anyway and will continue to have to do so, while on the question of judicial review—for the people who would have the resources to go to judicial review—that is not going to happen in practice.

Having said that, I said at the beginning that one of my questions was whether discussing this clause at all is a waste of all our time. I suspect that it is but, nevertheless, I am grateful to everybody who has debated and to the Minister. These are important issues. I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

Amendments 53 to 55 not moved.

Clause 5 agreed.

House resumed.

Railways: High Speed Rail

Monday 28th January 2013 Lords Chamber

Statement

16:23

[Earl Attlee]

My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Secretary of State for Transport in another place.

“With permission, Mr Speaker, I would like to make a Statement about our railways. Investing in transport infrastructure is not a choice. To create jobs and to rebalance our economy we need better roads, better airports and better trains. High Speed 2 is a central part of that investment: an engine for growth throughout our country. That is why, today, I am announcing our initial preferred route north from Birmingham and on to Leeds and Manchester. These new services will reach eight out of 10 of our largest cities: places such as Birmingham, Liverpool and Manchester, as well as Leeds, Sheffield, Newcastle, Glasgow and Edinburgh.

In all, 18 cities—and many more towns, too—will be served by HS2 services. HS2 will be completely integrated with the existing rail network, it will bring people and businesses together, it will create an estimated 100,000 jobs and it has the backing of businesses and cities across Britain. We will introduce legislation for the first phase in this Parliament and legislate for the second in the next one. Construction is set to begin in 2017. The first trains will run in 2026 and the second phase will open fully by 2033.

I would like to make three further points. The first is about the need for the line. HS2 will be the first main line to be built north of London for almost 120 years. Some say we do not need another, but the truth is that we are already good at squeezing the most out of our Victorian railway network and, yes, we will get even more out of it in the coming years with massive investment. We are electrifying 800 miles of track and building Crossrail and the northern hub upgrade. These will help to keep us going for the next decade or two, but what then?

Rail passenger numbers have doubled over the past 15 years and demand will keep growing. The west coast main line is filling up. There is not enough space for all the commuters, freight trains and intercity trains that need to use it. That is why I am publishing, after very careful consideration, my initial preferences for phase two of HS2. The case for going ahead rests on the capacity it will provide and on the new connections it will create. It is not just about faster trains to London, but also about changing the way our great cities work with each other. There will be easy links on journeys that are difficult today. It will give muscle to the economies of cities beyond London, producing an estimated £2 in economic benefit for every £1 that is spent.

I frequently hear calls from colleagues in this House for better services to their local stations. They are right to ask for them; High Speed 2 is part of the solution. By creating free space on existing routes, it will allow better services to places such as Milton Keynes and more trains for commuters in areas such as Staffordshire, Leeds and Manchester. I am determined to make sure the benefits of HS2 run much wider than the places directly served by the new line.

Let me turn to my second point: the detail of the route I am announcing today. This follows the Government’s announcement last year about phase one between London and Birmingham. On the western leg from Birmingham to Manchester, I propose two new high-speed stations. The first is in the heart of Manchester, right alongside the existing station at Manchester Piccadilly, allowing easy connections to places such as Salford, Stockport and Bolton and a journey time to London of just one hour and eight minutes, down from more than two hours today. The second station will be at Manchester Airport, giving direct access to the wider Cheshire area. HS2 also will serve Crewe via a dedicated link and high-speed trains will continue on the existing railway to Liverpool, Warrington and Runcorn. They will also benefit from greatly reduced journey times. Further north, near Wigan, HS2 will connect with the west coast main line. High-speed trains can then continue at regular speeds to places such as Preston, Carlisle, Glasgow and Edinburgh. I am working with our counterparts in Scotland on their aspirations for high-speed rail and I have already set out a long-term ambition to get journeys to Scotland below three hours.

Turning to the eastern leg, we will construct three new stations to bring people and businesses in the East Midlands and Yorkshire closer to Birmingham, the north-east and London. The East Midlands station will be located between Nottingham and Derby at Toton. Links will be upgraded to provide fast access to both. The second station will be at Sheffield Meadowhall. It already has good connections and these can be improved further, allowing it to serve all of Sheffield and South Yorkshire. The third station will be located in the centre of Leeds, alongside the South Bank area. As with the western leg, there will be a connection from HS2 on to the existing rail network. A connection to the east coast main line, just nine miles from York, will allow the north-east to benefit, too—London to York in just one hour and 23 minutes, and Newcastle in just two hours and 18.

Lastly, a decision on how best to serve Heathrow will be taken after the outcome of the Airports Commission has been considered by the Government. From day one, though, HS2 will provide far faster journeys than now via a major new interchange at Old Oak Common, linking to the Great Western main line, Crossrail and the Heathrow Express.

The third point that I want to make today is about design and help for those most affected. I know that this is an issue that many honourable Members want the Government to take extremely seriously, and we are. I know that although the line will benefit the country as a whole, it will also create great anxiety among those close to the proposed route, so we will consult properly, design carefully and compensate fairly.

Let me stress that today I am announcing an initial preferred route. This is the start of the process, not the end. We are ready to listen, ready to improve. I want this line to create jobs and prosperity, not harm them, so, where businesses may be affected, we will work with them to find a solution. We will now begin a period of informal consultation on phase two. This will inform the official public consultation, originally planned for 2014 but which I can announce will be brought forward to this year. The aim is to reach a firm decision on the route of phase two in 2014.

I understand how proposals such as these can affect property markets. So compensation will be as generous as on the first phase, and more generous than when we built the motorways. Today I am launching a public consultation on the exceptional hardship scheme for those who must sell but cannot because of HS2. Under this scheme we will pay the full price, valued as if there were no HS2. This will be followed by the next stage of our property compensation scheme, once the final route is confirmed.

There are not many issues on which all the political parties in this House agree; it often feels like there are none at all. This, however, is one because, regardless of the nature of the Government when the first trains run in 13 years’ time, what matters are the jobs, the rebalancing of the economy and our country’s future prosperity. I commend this Statement to the House”.

That concludes the Statement.

16:32

[Lord Davies of Oldham]

My Lords, I thank the Minister for repeating the Statement made earlier in the Commons. I welcome the Statement, of course. The Minister made the presumption that there was agreement between the major parties on this project and indeed there is. He will know that I endorse the main strategy that is proposed in the paper, and I welcome the fact that this announcement is being made today.

Inevitably, however, there are differences between us, and I will seek to identify some of them for the good of the Government in the time in which they have to make judgments on this important project. I emphasise to the House that in the long run this project will bring strength to the British economy and relieve the pressure on rail lines, particularly the west coast main line, which the Minister rightly identified as running at very close to capacity, but it has nothing at all to do with the rhetoric that he brought into the Statement about jobs and improving our economy at the present time. The idea that the proposals contained in the Statement, which, after all, refer to a project that will not be completed for over a decade from now, will bring an enormous stimulus to the economy and create jobs at present is quite erroneous. I rather regret that the noble Earl has rightly emphasised that we welcome this. Of course we will do our best in opposition and in government to see the fulfilment of the project.

There are inflections in this speech which seem to be addressed to our contemporary economic troubles. This project is too far away to actually deliver a great deal of improvement prior to the next general election or even several years after that. However we welcome the project for the reasons put forward by the noble Earl, not least in terms of the pressure upon existing rail provision in the United Kingdom. He makes the important point that no railway line has been created north of London for more than 120 years.

The Government are still not committing themselves to aspects which we would have thought would give a real sense of urgency to this timetable. Why does this Statement make no attempt to bring the legislation necessary for phase 2 into the timetable for phase 1? Surely one Bill—which might necessitate a carryover facility—dealing with the whole project is bound to be a better prospect than the Government going through all their travails over London to Birmingham, and then starting all over again with a fresh Bill for the lines north of Birmingham.

We also regret that the Statement makes no real approach towards another area of future transport on which we have sought to establish consensus, namely the future of aviation in the south-east. Why do the Government not address their mind to the possibility of a direct link to Heathrow? Surely that would improve connections as far as airports are concerned? It would certainly help with short-haul flights bringing people into Heathrow if they could then travel speedily by train. That would reduce the pressure on Heathrow for short-range flights and the slots which they occupy, giving the airport, with its present colossal problem, a chance to breathe. As the public know very well, every time we have two or three inches of snow, as we have had recently, there is a crisis at Heathrow because it is right up against the margins of capacity with no flexibility for dealing with such a situation. I regret that there is no suggestion of looking at a link to Heathrow.

Where northern cities beyond Birmingham are concerned, we welcome the fact that Manchester and Leeds are to be served. It should be recognised that we need to look at the rail infrastructure for link-up with other major cities apart from those two. High-speed trains will of course bring immediate and direct benefits to those, but we also need assurances from the Government that issues will be addressed so that those cities which are not directly on the line—only two are—will benefit significantly.

We are concerned about another dimension of the high-speed rail proposals. The lines from the north will connect with High Speed 1, the link to the continent. The intensity of interest in this possibility goes back decades. Since High Speed 1 has been in place, served by the magnificent station at St Pancras, there has also been great interest. However, what will happen to these trains from the north? When they get to London, they are meant to clank around the back part of the rail service which Transport for London regards as critical to all its services around London. That line, of course, has speed limitations, to put it at its mildest. The Government are still looking at a situation in which those from the north will have a slow perambulation around London if they are bent upon getting to the continent.

Nevertheless, there is a great deal in this Statement that we welcome. We welcome the fact that it is being made; at least that is an indication that the penny has dropped for the Government, and that there is some urgency about these matters. However we still feel that the Statement could have been much more clearly expressed in terms of urgency for getting this line constructed, to both Birmingham and the cities of the north.

16:41

[Earl Attlee]

My Lords, I am grateful for the positive endorsement from the noble Lord, Lord Davies. He thought that he had identified some differences between us; I do not think that he has succeeded. First, he said that he did not believe that this announcement has any current effect on the economy, and the effect would be all in the future, after the completion of the Crossrail project. However, HS2 Ltd has spent £188 million on this project over either the past financial year or the past 12 months; I am not sure which.

The noble Lord suggested that we should have one hybrid Bill. Noble Lords must understand that the hybrid Bill for phase 1 alone will create extensive and detailed powers. The work required to prepare the Bill is proportionate to the length of the line. It is much better to get phase 1 under way and, once it is, to seek approval for phase 2. There are several very large infrastructure projects under way, but they need to be consecutive, not concurrent. Therefore, Thameslink is nearing completion, Crossrail is starting, and we will then work on phase 1 of HS2 and, finally, start on phase 2. There is an interesting question of whether the phase 1 hybrid Bill should refer to phase 2.

The noble Lord talked about connecting services between HS2 and other cities. Of course, he is quite right. We are clear that the HS2 project must not interfere with and divert resources away from the rest of the railway network. Noble Lords will know that we are doing an awful lot of work elsewhere.

Finally, the noble Lord, Lord Davies, talked about the spur to Heathrow. The Government believe that the HS2 network should link to Heathrow, and our preferred route is for this to be built as part of phase 2. However, since January’s announcement, the Government have also established an independent commission chaired by Sir Howard Davies to recommend options for maintaining status as an international aviation hub. We have therefore taken the decision to pause work on the spur to Heathrow until after 2015. The proposals for the spur and station are not planned to be part of the phase 2 consultation in 2013. However, there will still be an opportunity to consult separately at a later time and include the spur in legislation for phase 2 if that fits in with the recommendations of the commission.

16:44

[Lord Bradshaw]

My Lords, first, we thoroughly support the recommendations. They are about capacity. However, you cannot talk about capacity and ignore the freight dimension, and the freight dimension has been totally ignored by the opponents of HS1.

Secondly, I want to talk about railway fares. We must be careful that we are not building what will be described in the media as a “rich man’s toy”. Is the Minister aware of recently published research which says that British railway fares are in fact lower than those in France, Germany and elsewhere on the near continent? Only fares at the highest peak here are more expensive than in Europe. Will the Minister contact the Rail Regulator and ATOC to see if we can stop these very large increases, often in commuter fares, which are so far above RPI plus one? Fares at RPI plus nine are not uncommon. The next time fares are revised we should attend to the fares basket, on which the fares are calculated, so that people are hit less. Commuters in places such as Manchester and Leeds have seen very little improvement to their services. They have rotten rolling stock that should have been got rid of years ago, and yet they are being called on to shoulder the burden of the investment when it will be a long time before they see any benefits.

Lastly, and briefly, outside the railway industry is where the benefits lie. If you look at Crossrail you will see already that the land and property values are rising very fast, but the railway gets no benefit in terms of the attribution of these in any economic forum.

[Earl Attlee]

My Lords, first, my noble friend touched on the needs of freight. He is absolutely right, because one problem that we face if we do nothing is running out of capacity on the west coast main line for both passengers and freight. So it is a major driver that we absolutely have to do this project to provide sufficient capacity for freight, because there simply are not the train paths for people to put on the services that they would like to run.

I am looking forward to answering an Oral Question on Thursday regarding railway fares, and my noble friend has been asking me numerous Written Questions about how the fares basket is calculated. One question that it is important to answer is: will it be more expensive to travel by HS2? The issue of fares will be considered in more detail as the project develops. However, our assumptions on the viability of HS2 and the expected fares income do not factor in or depend on a premium for high-speed services.

[Lord Soley]

Will the Minister assure me that, as in all other European countries, the Government recognise that our future hub airport, wherever it is located, must be linked to a high-speed railway line? Do the Government understand that?

[Earl Attlee]

My Lords, the most cautious approach for me would be to rely on the Airports Commission, but I am sure that it will take that very much into consideration. In the noble Lord’s submission to the Airports Commission, no doubt he will have mentioned that very point.

[Baroness Chalker of Wallasey]

My Lords, I thank the Minister for repeating the Statement. Will he pay particular attention to the cross-Pennine route between Yorkshire, Lancashire and northern Cheshire? We will get the real benefits for the north only if, in addition to HS2, we improve the links between the east and the west of our country in the north.

[Earl Attlee]

My Lords, my noble friend is right in general terms. HS2 is predominantly a north-south route and will link eight out of 10 cities, but to get the full benefit we need a complete network. We are doing everything we can to bring to fruition schemes that have a good business case.

[Lord Stoddart of Swindon]

My Lords, first, do I assume correctly that the £34 billion cost is estimated in terms of today’s money? If so, what is the cost likely to be by the time the scheme is finished in 2033? Secondly, how can the Government be so certain that the construction of HS2 will result in a better balance between the north and the south? Is it not possible that more people than ever would be attracted from the Midlands and the north to London and the south?

[Earl Attlee]

My Lords, I cannot answer the noble Lord’s first question because I do not know what inflation is going to do. As to his second question regarding whether HS2 will benefit only London: no, HS2 will play an important role in rebalancing our economy, thereby enabling British cities to work together as an economic powerhouse. I have already said that eight of the 10 top cities will be linked together. London will have Crossrail; it is now the turn of Manchester, Leeds, Liverpool, Sheffield and the east Midlands, with further benefits to Scotland and a whole host of cities in the north. We are not simply building a railway—a way to get between two points more quickly—we are connecting people and markets, and providing a platform for development and regeneration around station sites.

[Lord Faulkner of Worcester]

My Lords, I offer my wholehearted support for the Statement and the Government’s strategy on High Speed 2. It is 50 years this year since the Beeching report and 30 years since the Serpell report, which noble Lords may have forgotten had as one of its options a national network of just 1,400 miles. The transformation in the popularity of rail travel and the recognition of the role that rail can play in our transportation has been little short of astonishing. The fact that we can talk credibly about new high-speed railways to the north of England and Scotland demonstrates the fact that demand for conventional rail travel is almost at bursting point, as the Minister said.

Perhaps I may ask the Minister one question and make a further point. Today is very much an endorsement of the approach of my noble friend Lord Adonis, who introduced the very first White Paper on High Speed 2 and set this whole process underway. It would be right for the House to pay tribute to him and his foresight in paving the way for the announcement that the Government have been able to make today.

With reference to what the Minister said about high-speed trains running north on conventional railways, particularly on the west coast main line, can he give an assurance that signalling and other infrastructure on the west coast main line will be sufficiently upgraded to allow these trains to run—obviously not at 300 kilometres an hour but certainly closer to a line speed of perhaps 140 or 150 miles an hour? That will require improvements to the signalling. In that way, it might be possible to achieve the target of reaching Scotland within three hours, which I agree is a very desirable aim.

[Earl Attlee]

My Lords, I am grateful for the support of the noble Lord, Lord Faulkner of Worcester. I have no difficulty at all in paying tribute to the work of the noble Lord, Lord Adonis. This project is going to cover the life of certainly several Parliaments and maybe even several Governments.

The noble Lord talked about speed on the conventional system. One of the problems if we do not do HS2 is that we will have to do upgrade projects on the west coast main line that might look attractive in terms of a business case but, actually, one will eventually run out of capacity on that line, having spent billions of pounds on those projects. The noble Lord is right. I am not sure of the technical points on how we will reduce the journey times from Scotland to London to three hours, but I will happily write to him on that.

[Lord Shipley]

My Lords, I welcome the announcement very strongly. I have two questions for the Minister. The first relates to the date on which the second phase of the high-speed track north of Manchester and Leeds will join the east and west coast main lines near York and at Wigan respectively. Will the Minister assure the House that this will be done at the very same time as the link to Manchester and Leeds is opened? Otherwise, there might be a flight of investment capital from developers who wonder whether points north of Manchester and Leeds will actually be brought within the high-speed framework. The solution to that problem is for a guarantee to be given that it will be done in 2033, when Manchester and Leeds open. Secondly, I simply ask for confirmation that there will be no reduction in the plans for upgrading the east coast main line in the next 20 years, pending completion of the second phase of HS2.

[Earl Attlee]

My Lords, my noble friend asked me some important questions about opening events occurring at the same time. Unfortunately, I cannot give the assurance that the noble Lord wants; the date is too far away. However, I will take the point on board. My noble friend also asked me about the upgrading of the east coast main line. It is important to keep that line working properly, but of course we are talking about something quite a long way ahead. I therefore cannot give my noble friend any specific assurances, other than the key one that the HS2 project will not divert resources from the conventional railway system.

[Lord Grocott]

Like other speakers, I warmly welcome the Minister’s Statement. After all, in this country we built the very first railways and exported the technology to build railways across the world, although sadly in recent decades we have fallen behind. This is a very positive—and for me, exciting—development. I have two points to make from our history. The Minister might find the first reassuring; the second is a question.

The first, reassuring point was made by a railway historian working at the Ironbridge Gorge Museum in my former constituency. He helpfully reminded me that many cartoons and sketches of the 1830s and 1840s speak of cattle not producing milk, hunting and agricultural land destroyed, and the picturesque nature of the English countryside lost forever. I am sure that this is familiar to the House. We all understand the objections that will inevitably come from people along the line and I welcome the assurances that the Minister has given about full consultation. However, in a relatively short period of time, these railways became a treasured part of the landscape.

Secondly, I put the following less reassuring point to the Minister. This is an exciting prospect of about 300 miles of railway—I have not added it all up. The Victorians managed to construct thousands of miles of railway. They did it with picks and shovels, and they managed to do it pretty quickly. Is 2033 the earliest date we can talk about? I have always wanted to live until I am 93, and this would give me an added incentive, but surely it should be possible with JCBs and whatever else modern technology offers to slightly improve on that timescale?

[Earl Attlee]

My Lords, it is an exciting project. However, we need to be doing it for the right reasons, and I believe—as I think most noble Lords do—that we are. I am sure all noble Lords will agree that it is important that we have an effective and fair system of planning for these large infrastructure projects. However, as the noble Lord will know from his experience as a former government Chief Whip, the process for getting a hybrid Bill through Parliament is quite protracted; it is not an easy thing to do. However, we will do it.

[Lord Deben]

My Lords, will my noble friend listen carefully to the point that has just been made about speed? I, too, hope to travel on that first train. I would like it to come earlier because that makes it more certain that I will be in a position to do so. Secondly, will he congratulate his right honourable friend in the other House on producing a Statement that was as non-party political as possible, because we need consensus? It did not refer to the fact that since privatisation the use of the railway has increased enormously, and that all the fears that people had have been entirely reversed. It was right to leave that out of the Statement.

Thirdly, does my noble friend not agree that the grandchildren of the people who objected to the railways being built in the first place became those who were most determined to defend them after they had been built? We have to be very firm with those people who, for understandable reasons, do not understand that this country has been held back by its failure over many years to invest in infrastructure. Recent years have seen great change, with the growing of Crossrail and the rest of it. We are a very much more advanced country as a result. Frankly, nimbyism must not be allowed to stand in the way of Britain growing. Will my noble friend be tough about this? It will be easier to be tough if we do this more quickly. The longer we push it out, the more it will be possible for these people to gain support.

[Earl Attlee]

My Lords, first, of course I always listen very carefully to what noble Lords say. I am grateful that my noble friend thought that it was a non-party political Statement. However, it did say that passenger activity had doubled. In the past, when I had to repeat a Statement that had rather more political content, the noble Lord, Lord Davies of Oldham, did not resist the opportunity to give me a good and well deserved teasing.

We have failed to invest in infrastructure in the past. However, over recent years we have rather turned the tide and recognised the benefits of railways. I will be as tough as I can, but in my current position my capacity is limited.

[Lord Ryder of Wensum]

My Lords, in my experience, when I hear a Statement delivered by a Secretary of State in the other place claiming that the leaders of all the main parties are agreed on a major matter, it invariably turns out to be wrong. In this case, I am reluctant to spoil the celebration. However, in his first point, the Secretary of State in the other place made no financial and economic case at all for the scheme. While I do not expect to be around in 22 years when the scheme is meant to be finished, I am willing to bet that it will never be completed, because the expenditure that is now stated for the cost of the scheme will be inflated year on year, and ultimately a Government, either on this side of the House or the other, will put a stop to it. I am afraid that that has always been the case with the type of vast public expenditure that the Secretary of State effectively announced today without making any case in its defence.

[Earl Attlee]

My Lords, HS2 has a good business case. If local areas seize the opportunity it presents, we can expect the benefits to be even greater. We are continuing to work with stakeholders to realise these benefits. The latest available estimates suggest that HS2 will return around £2-worth of benefits for every £1 spent. HS2 has the potential to generate transport-user benefits with a net present value of up to £48 billion, and revenues with a net present value of up to £33 billion. The construction costs of HS2 are broadly similar to the sort of money we are spending on Crossrail, so the incidence of expenditure on the project will be affordable.

[Lord Steel of Aikwood]

My Lords, there was one slightly opaque sentence in the Statement, which otherwise I welcomed. It referred to consultations with the Scottish Government. Might I persuade the Minister to enlarge a little on that? The last thing we want is a good, high-speed service as far as the north of England and then second-rate ones thereafter.

[Earl Attlee]

My Lords, I can assure my noble friend that there are ongoing discussions on that particular issue between my right honourable friend the Secretary of State and the Scottish Government. The southern portion of the HS2 system has the better business case and therefore it makes sense to start that first, safe in the knowledge that Scotland will still benefit from the reduced journey times to London.

[Lord Greaves]

My Lords, this is a visionary and exciting day, but is it not ironic that most of the existing railway network in this country outside London was built in about 20 years in the Victorian period, whereas it is going to take 20 years to build one and a half new lines now? Is it not time that people started to look at a long-term vision of high-speed rail in this country, extending from the north-east of Scotland to the south-west of England as well as routes to London?

[Earl Attlee]

My Lords, the first point is that our democracy is a little bit more developed than when we started the railway system in the United Kingdom; it was easier to secure parliamentary approval in those days. I recognise that HS2 does not do anything for the West Country in itself, however noble Lords will know that the Great Western is a very fine line.

Growth and Infrastructure Bill

Monday 28th January 2013 Lords Chamber

Committee (2nd Day) (Continued)

17:06

Amendment 55ZA

Moved by

[Lord Best]

55ZA: After Clause 5, insert the following new Clause—
“Time when development began
In section 56 of the Town and Country Planning Act 1990 (time when development began) after subsection (4)(e) insert—“(f) such works as may be described in a condition attached to the relevant planning permission having been agreed between the local planning authority and the applicant for that planning permission.””

[Lord Best]

My Lords, I declare my interests as president of the Local Government Association, whose officers have, as always, done brilliant work in preparing amendments for the Bill, and as chair of the Hanover Housing Association, which is a relevant interest for the amendments that now follow and relate to affordable housing. These amendments begin with Amendment 55ZA, in my name and that of the noble Lord, Lord Tope, and continue with those in the next six groupings. All of them address concerns about the provisions in Clause 6, which allow developers to appeal to the Secretary of State—that means to the Planning Inspectorate—for a reduction in the level of affordable housing, which the developer previously agreed to provide. This new right for house developers would be activated if the local authority does not accede to a developer’s demands for such a reduction in affordable housing provision.

As we launch into debates on this new right for developers, I think it is necessary for me to spell out why I believe this clause needs serious modification. If I do this now, the Committee will be spared my making these points under each of the six amendments in my name in the following groupings.

First, developers have freely entered into legal agreements with local authorities pledging that they will allocate a specified proportion of the new homes that they build—perhaps 25% or 35%—to be let or sold on a shared-ownership basis to those who cannot afford the full market price. The developer has signed a deal which he believed would deliver a good profit. In normal circumstances, the agreement, under Section 106 of the Town and Country Planning Act 1990, would have to be honoured if property prices turned out to be lower than the developer had predicted. Equally, the local authority could not amend the agreement if prices went up by more than expected and the developer made a larger profit. For central government, using the Planning Inspectorate to overrule the agreement between the two parties in order to improve the profits for the housebuilder would represent a retrospective intervention to change a legal agreement freely entered into by two competent parties. I do not think it has ever been suggested that Machiavellian local authorities have hoodwinked innocent developers unfairly into signing Section 106 agreements. No, the developers thought they had a good deal and the retrospective tearing up of a private contract by central Government diktat would seem to set a sinister precedent.

Secondly, there is the question of fairness. To say the least, this clause is galling for those would-be buyers of a site who were outbid by a developer who, it now transpires, paid over the odds. The reason housebuilders are now seeking to renegotiate the agreements they signed is that they speculated on property prices rising inexorably, but now find that their profit margins will be less than they hoped. In outbidding others, including the many housing associations which have been prevented from buying land by the exorbitant prices these developers paid, they have taken a gamble which has not paid off. If their rash behaviour means that with hindsight they should have paid less for the land, is it fair on other more prudent housebuilders and housing associations for the Government to bail them out? Is it fair that Clause 6 should reward speculative developers by letting them off their obligations to ensure that they can make a handsome profit from the development?

Thirdly, I can see the argument that it is important to save a developer, even if he has acted foolishly, from going out of business because we need to maintain the capacity of the housebuilding industry through these difficult economic times. However, while property prices have fallen in real terms in some areas, particularly in Northern Ireland although it is not covered by this measure, prices have seldom dropped dramatically, and in parts of the London and the south-east, they have even continued to rise. Far from going to the wall, a number of major housebuilders have recently reported substantial annual profits and their share prices have risen significantly. That does not suggest a need to make concessions to prevent bankruptcies in the sector.

Finally, and most importantly, we should scrutinise Clause 6 with great care because it is likely to lead to a reduction in the amount of affordable housing at a time when there are desperate shortages, fewer and fewer households can afford to buy, and market rents are absorbing disproportionate percentages of average incomes. Local authorities are already making concessions in order to be helpful to developers, and if they have got to the point of saying, “This far but no further”, they have good reasons so to do. Section 106 agreements have been hugely important in securing a high proportion of all the affordable housing built over the past decade. These agreements have meant that the bulk of social, subsidised housing has no longer been built in separate, segregated estates exclusively for the poorest and on the cheapest sites. Rather, it has been integrated into mixed-income communities of tenants, shared owners and owners. Backtracking on the gains for local communities that have been achieved by planners through this route is really bad news.

Moreover, inclusion of this element in a development was a key component in the planning consent being granted in the first place. A block of flats in east London with little or no affordable housing may be sold virtually in its entirety to overseas investors and occupiers and will make little contribution to supporting Londoners who need somewhere to live. In rural areas it is likely that local opposition to development was considerably moderated because housebuilders signed up to some affordable housing on the site so that local people who had been priced out of the housing market could stay in the locality. I know that the rural case has been addressed in relation to the special case of exception sites in the government amendment we will consider with the Minister shortly, but I am making the more general case about all developments in more rural communities: take out the affordable housing ingredient and a significant reason for both local authority and community approval for housebuilding will be removed.

These are the reasons why Clause 6 needs to be amended, and the first amendment for consideration seeks to address the key argument against my list of criticisms. This is the counter-argument that despite the disadvantages I have set out, unless the developers in question are let off all or part of their affordable housing obligation, they will simply sit on their hands, do nothing and leave sites undeveloped. How much better, runs this counter argument, for development to get started, and for at least some affordable housing to be built, rather than for the land to lie idle.

17:14

I fully recognise the value in getting the open-market houses constructed, as that contributes to easing acute overall shortages as well as providing jobs in the construction industry and helping the country out of recession. It is said that it is worth sacrificing some affordable housing in order to get housebuilders on site now but would the easing of planning obligations for affordable housing have this effect? Are housebuilders holding back because a minority of the homes are earmarked for affordable housing on which they will make little or no profit? If builders could sell all the houses without having any obligations of this kind, they would make bigger profits than they had previously expected.

Often the reason they are not proceeding with the development is that they are pretty sure they will not be able to sell all the market homes when they are built. The market is sticky and if builders know that weekly sales of new homes in the locality are at a low ebb, they will not want to build so quickly that they can sell only by reducing the price. Mostly, it is the market conditions that are being addressed by other policy measures, not the fact that a proportion of the homes need to be passed to a housing association without a profit being made on them, that are causing housebuilders to sit on the land and wait for better times.

This amendment seeks to avoid the worst of all outcomes. This would put in place measures that would allow housebuilders or developers to renege on their obligations in relation to affordable housing, but with no requirement on them to start building anything. Under that scenario, the builder who is not minded to do much with a site until market conditions are more favourable could wait up to three years, after their appeal to the Planning Inspectorate has been concluded, to switch homes from affordable housing to market sales, which would be many months from now.

The builder could then dig a ditch to keep the planning alive and wait for a rise in house prices. At some point in the future, he would not only make a bigger profit on the original quota of his for-sale properties but would add extra profits from the sale of the homes that he has been allowed to transfer from the affordable category to open market sale. That would be a double benefit for doing nothing now and would completely defeat the objective of Clause 6 of kick-starting stalled developments.

Amendment 55ZA couples with a significant one in the next group, Amendment 55F, in my name and the names of the noble Lords, Lord Shipley and Lord McKenzie. It states:

“Where a planning obligation is modified under this section following an appeal, the applicant must commence development within 6 months of the final appeal decision”.

That would mean that, although the community loses some of the affordable housing it had expected, at least construction would get going and some accommodation will be built. The housebuilder will not be allowed simply to negotiate an increase in the land in his land bank, thereby increasing the value of the company, without actually building anything.

However, Amendment 55 on its own, requiring a start on site in six months, would be flawed without Amendment 55ZA. This enables the local authority and the developer to agree on what a “start on site” should mean in this context. At present, planning permission does not expire provided the developer begins a “material operation”, which can mean simply starting to lay out a road or just digging a trench for foundations. We have all seen those desolate sites with a few feeble trenches full of rain water and nothing happening. Case law is clear, unfortunately, that it does not matter that the developer has carried out these minimal works simply to keep the planning permission alive, rather than with any genuine intention to complete the development.

We know there is a backlog of 400,000 new homes with planning permission yet to be built. If Clause 6 does not get developments with planning consent moving swiftly forward to completion, but only removes vital affordable housing requirements permanently, it will have failed miserably. This amendment, coupled with Amendment 55F, would mean that if the appeal process leads to fewer affordable homes, at least there is some tit-for-tat or some recompense for the concession; namely that the housebuilder must get going, must start on site within six months, and must do so in an agreed, meaningful way. That might mean the laying of all the necessary underground mains or pipes to the foundations, the construction of a road or whatever other definition of “material operation” is agreed between the two parties.

These two amendments, taken together, would mean salvaging at least something where central government overrules local authorities and allows developers to break the agreements that they have signed and reduce the levels of affordable housing. These are the first of a formidable list of amendments that aim to modify Clause 6, and perhaps they may be the most significant. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

Before the noble Lord sits down, I would draw the attention of the House to the fact that although he was making a very wide-ranging speech on Clause 6, his amendment is after Clause 5 and relates to one very specific matter. He has also coupled this with Amendment 55F, which appears in the ninth group today, way down the agenda, and which is not grouped with the first amendment. I wondered whether, before going any further, we might agree to speak to the amendment which is being moved and only that one for the moment. The noble Lord has tabled a whole parcel of other amendments to which he will want to speak to some extent, and we will get very confused if we do not go through the amendments in order.

[Lord Tope]

My Lords, I have added my name to this amendment in the name of the noble Lord, Lord Best, and will do my best to comply with the request. However, I thought it was very helpful, as it was intended to be, for the noble Lord, Lord Best, to set out fully and comprehensively the context in which we approach this. The Minister is of course right about where this amendment applies but one has to see it in the wider context and the noble Lord, Lord Best, did that very well.

The noble Lord has explained this amendment very fully. We are all too familiar with sites all over the country where planning consent has been given, somebody has come along a few months later and perhaps dug a couple of holes, and that is a “material operation” which satisfies the condition that the development shall have started. However, particularly in the current climate, nothing then happens for years and years. I have such sites in my boroughs. I look around the Chamber and see people nodding—we are all familiar with that position.

This amendment, or something very like it with the same purpose, would do great service in strengthening the intentions here—I nearly said the intentions of Clause 6, which is not quite right—to get development moving and to start getting the building. We are not really trying to start development here, we are trying to complete it. Starting by digging a few holes in the ground achieves nothing—what we want to see is the housing being built. Unless we have a clause or amendment similar to this one which requires developers and local planning authorities to decide in advance what is a “material operation” and what properly determines what starts a development, which would mean a lot more than just a tiny bit of infrastructure or my proverbial two holes in the ground—which is not just proverbial, I know places where it is quite literally that—then it is not going to be effective. The noble Lord, Lord Best, mentioned that planning consents already exist for 400,000 homes that have not been started. No doubt on many of those sites there are those two holes in the ground, but there is no sign of any homes materialising. If we had this obligation as part of the requirements that will follow in Clause 6, that would serve, to a significant extent, to ensure not just the starts but the much needed completions.

[Lord Deben]

My Lords, I hope the Minister listens to the specific concern to make this “in between” clause actually work. However, I hope she will not discuss this issue without facing up to one entirely unspoken problem, which both sides of the House have always had a very clear plot to avoid ever discussing. I find it unacceptable that we should run our supported housing on the basis that we tax people who need a house to pay for other people who need a house. This is entirely a fiscal arrangement that the Treasury has entered into because it does not want us, as a community, to pay the costs of people who need housing and cannot afford it.

So what we do is say that those who are least able to pay more than they have to for their accommodation shall be taxed to pay for others. This is a total scandal. I find this bit and the clause that will follow extremely difficult to support—not because I object to the clause, but because, once again, it hides the plot between Labour, Conservatives and Liberal Democrats never to admit the reality of Section 106. I very often agree with the noble Lord, Lord Best, and I respect him enormously, but to talk about Section 106 agreements being freely entered into is, frankly, nonsense. They are not freely entered into; they are a necessary requirement of getting any kind of development at all.

[Lord Burnett]

My noble friend Lord Deben makes a powerful case. Does he agree that it is sometimes forgotten by people looking at it from the local authority side that if developers or builders make a profit they pay corporation tax, income tax, capital gains tax or whatever the tax is? In addition, they have Section 106 burdens, and likely to be coming down the track—some have adopted it—is the community infrastructure levy. It will paralyse the industry again if we carry on loading it with these burdens.

[Lord Deben]

I repeat what I said in the earlier part of this debate. I declare an interest in the sense that I try to help people do sustainable development. That is what has led me to this deep concern. We talk as though the money that developers pay has no effect on the cost of the housing of the people who pay for it. Successive Governments of both parties have consistently spoken about this total myth. The truth is that prices of homes in this country are greater for first-time buyers than they would be if we did not tax them. It is undoubtedly for a good reason, but they are taxed and other people are not.

We have an intergenerational problem. Because of the way that all this works, people who do have houses have a value which is significant. Of course, many of us in that position mitigate it, because the bank of mum and dad has to make it possible for the next generation to have a home. Many people are not in that position. I want this Government to face up to the fiction, which we have all accepted—I admit to it as a former Minister—that somehow the mechanism we have is reasonable and fair. It is unreasonable and unfair. At this moment, when the pressures on young people are so considerable, we must come away from the idea that it is reasonable to accept the basic concept of the noble Lord, Lord Best, that somehow new houses sold on the market should carry that tax and then increase it because—as my noble friend has pointed out—of the other infrastructure taxes that will take place. Nobody else seems prepared to do it, so it is time for this House to say to the Government and Opposition, “This will not go on”. It is not reasonable that we should not, as a society, bear the cost of affordable housing, but shovel it off—because then it is not on the national accounts—to those who are least able to afford it, thus widening the gap between the haves and the have-nots.

17:29

[Lord Lea of Crondall]

I am grateful to the noble Lord for giving way. I used to dabble in this myself some years ago and I know how unenthusiastic the Treasury generally is about hypothecation. In so far as the proposition in this case is that that Treasury likes hypothecation, I suppose that the question could be posed—and it would be very interesting to know the answer: who are these other people in the rest of society who should be paying this if they are not in category A or category B under this supposed hypothecation?

[Lord Deben]

I am not sure that I entirely follow the noble Lord’s point, but it is true that the Treasury is keen on hypothecation when it suits it and against it when it does not, and this is one of those occasions. The trouble is that hypothecation ought to be between the payment of the bill and the advantages from the bill, but in this case it is not that, and many of those who have to pay the cost of Section 106 agreements are only just above the level of benefiting from them. It is because this is a fundamental flaw in the whole system that I come to be extremely disappointed in the Growth and Infrastructure Bill. As I have said previously, it is a pretentious title for a series of very small alterations, some of which are not terribly helpful.

However, there is a big alteration that we ought to make if we really want people to have housing, which is to say seriously that the cost should not be a tax on a small number and those who are most vulnerable; the cost should be a tax that we all bear for a proper social end. In case the Opposition say that I am moving in their direction, I say that they are as guilty as anyone else. They have imposed taxes in this area that are just as large and always excuse it as a tax on the developer. The developer does not pay taxes; he charges the cost to the people who buy his houses. That is the nature of the market; there is no way of avoiding it. I am very happy to support the drive of the amendment, which suggests that, if we are going to do this, we may as well make sure that we get bang for our buck by tightening it and toughening it. But, my goodness, what a disappointment it is that yet another Bill comes before this House masquerading behind this fraudulent concept that supported housing should not be supported by the nation as a whole but should be a price borne largely on the shoulders of first-time buyers. It is not right, it should not be and we ought to find a different way of dealing with it.

[Lord Davies of Stamford]

My Lords, the noble Lord, Lord Deben, has taken a broad interpretation of the scope of the amendment. I am glad that he has and the Committee should welcome an opportunity briefly to debate Section 106, because it is an enormously important factor in housing development in this country and the House is unlikely to have another, foreseeable opportunity, either during the passage of this Bill or otherwise, to discuss it.

The noble Lord, Lord Deben, argues, and I think that I can follow his argument fairly clearly, that since there is clearly a cost for developers in entering a Section 106 agreement, whether it is to build affordable housing or to meet some other condition that may be imposed by that agreement, that cost must be reflected in the price of the houses that they sell and therefore be borne by those who buy those houses, who happen to be a limited part of the population. I am sure that that is the noble Lord’s argument—I am sure that he will interrupt me if I have got it wrong. He leaves out an important factor in the equation, which is that if there were no Section 106 agreements fewer houses would be built. Affordable houses are built and receive planning consent only because of Section 106 agreements. If more houses are built, there is a greater supply in relation to a given demand, and that will be factor in the equation bringing down the average price of housing, although not necessarily by the same amount as the other factor in the equation brings it up. The noble Lord should take that point into account if he is to try to design a model for how the housing market works.

The noble Lord, Lord Best, set out his amendment with great lucidity and very persuasively—he of course knows a great deal about this subject. I thoroughly agreed both with his analysis of the situation and with his rather ingenious compromise solution, which we may well want to adopt at this particular moment, having got as far as we have. I deeply regret for two reasons that the Government have decided retrospectively to waive Section 106 agreements. First, it will deprive a lot of people of affordable housing. That is a very bad day’s work. It is just the opposite of what we need in the present situation and an extraordinary reflection of the Government’s priorities. The noble Lord, Lord Deben, was concerned also about people who can afford to buy a house which is not designated an affordable house. He might dispense a little bit of his sympathy for those who could not dream of buying a house which was not deliberately built to be an affordable house and was in other words at the bottom end of the market and a good deal cheaper than average houses in this country.

The second reason why I regret what the Government have done is that it seems to falsify to whole system of planning in this country. As I have just explained, many Section 106 agreements result in land being designated for development which otherwise would be not be so designated. The local planning authority, normally the local council, has quite rightly to make a choice, an arbitrage, between considerations, on the one side, as to whether giving planning consent for, let us say, development on green belt areas or areas outside the existing curtilage of towns and villages represents the loss of an environmental amenity, but, against that negative public interest, as to whether there is a positive interest which outweighs that, which in present circumstances is the need for affordable housing. Therefore, the planning authority in the discharge of its responsibilities has quite reasonably weighed those different aspects of local communities’ interest and come out in that particular direction. Now, of course, if the Section 106 obligations are retrospectively withdrawn yet the development goes ahead, it becomes no longer a balance but entirely a one-sided gift to the developer and the community loses both ways. On the one side, it loses through the loss of the land, the loss of the environmental benefit, the loss of the amenity benefit and the visual impact of the development, whatever that may be; on the other, it loses the benefits of affordable housing or the other benefits of the Section 106 agreement which has been entered into. That is a doubly bad deal for the local community.

I dealt with a lot of Section 106 agreements when I was in the other House and on one occasion took the initiative in brokering a major Section 106 agreement between a landlord, a developer, a district council—South Kesteven District Council—and Lincolnshire County Council as the highways authority in order to finance the southern bypass of Grantham. There was no way in the world that the southern bypass was going to get into the then Government’s road programme—it would not have the met COBA thresholds—but it could and was financed in that way. It took a long time and a lot of negotiation, but it was well worth doing. However, it would have been most extraordinary if, retrospectively, we had said to the developer and the landowner, “Well, that’s alright. You can have the planning consent, but you do not need to build a bypass any more”. That is effectively the sort of deal which this Government are now offering developers.

I have to say that not many people are doing very well out of this Government in this country. People on benefit are obviously suffering; the public sector has suffered greatly; the private sector has suffered enormously; and our Armed Forces are suffering. Everybody is suffering except, as far as I can see, two categories of people: those who are lucky enough to be earning more than £150,000 a year, whose tax rate has been reduced from 50% to 45%, and now real-estate developers and speculative builders. I have nothing against real-estate developers and speculative builders—far from it—but it is an extraordinary set of priorities which are reflected in what the Government are doing.

As the Committee knows, I was for a number of years in the Tory party myself—far too many years, I have say; I am very sorry and repent of that particular sin—but, nevertheless, I know a little about how it works. I must say that if you went to Conservative associations up and down the country and did an analysis by sector of the business activities in which donors to local Tory associations are involved, you may well find that that particular section of the market comes out very high. I do not wish to establish a causal link between the two things; I have no evidence to enable me to do that. However, I simply state these two separate facts as an interesting coincidence.

I have considerable distaste for what the Government currently propose, but we need a way out of this situation that makes some sense and makes sure that these developments take place and affordable housing is built. In that spirit, I very much endorse the amendment of the noble Lord, Lord Best.

[Lord Alton of Liverpool]

My Lords, I will be brief. I should like to support my noble friend Lord Best. I declare an interest as a vice-president of the Local Government Association.

My noble friend set out a good case for the amendment and I hope that even if the noble Baroness, Lady Hanham, is unable to accept it today she will at least take on the general thrust of his arguments, not just for this amendment but also for those that he said are in later groupings. I believe that he was trying to help the Committee by discussing some of those at this time in order to save time later on.

I was also taken by the remarks of the noble Lord, Lord Tope, who said that it is really everyone’s desire to see the spades in the ground and housing being built. I was struck by a report in the Times today about how over the next four years many people in poorer categories will see their homes defaulted on because of their inability to pay interest-only mortgages. Therefore, this already difficult situation, with homeless people in this country and people unable to get on the home ownership ladder, as the noble Lord, Lord Deben, said a few moments ago, means that we have to do all that we can to try to find space for affordable housing. We must ensure that those who are in homes at the moment will not have to renege on their mortgages and become part of an issue that then has to be faced by local authorities because they are under other obligations to find them temporary accommodation.

I think back to my own time as chairman of a housing committee in Liverpool 30 years ago when we had vast amounts of derelict land and no money at all to build large amounts of new municipal housing even if we had wanted to. We came up with an innovative scheme at the time which met some of the points that the noble Lord, Lord Deben, addressed in his remarks. By retaining the ownership of the site—the land—in the hands of the local authority, we were able to pioneer the building of low-cost homes for sale in inner-city Liverpool—the first that had been built there in virtually a hundred years. Perhaps more importantly, we gave first priority for those homes to people who were already in existing council properties. This meant that, at the same time as encouraging people into home ownership, we freed up their accommodation—at no cost to the public purse—for people on the housing waiting list. Perhaps, therefore, we should look at something along those lines for first-time buyers and for existing council tenants, who would be able to free up their properties and therefore not only stimulate the building of new affordable housing but also create rented accommodation for people currently on waiting lists.

The other point I would like to make to the Minister concerns the issue of integration. I agree with what my noble friend said about how, particularly in rural areas, it has been very good to have a mixture of social housing alongside quite expensive housing. This has enabled people to stay in communities from which they would otherwise be driven. I think that many noble Lords from all sides of your Lordships’ House will have seen how, in rural areas especially, people have been driven away because they simply cannot afford the cost of homes, which are often taken up as second homes by people who live in cities or urban areas. Our first priority should be to allow those people to stay in, and contribute to, their own communities. Similarly, in urban areas, having a mixture of rented and owner-occupied property ensures that we do not create the municipal Bantustans that stretch facelessly and often aimlessly from the railway lines to the cemetery, and which in the past have caused so many of the social problems that we have to deal with today.

17:44

[Lord Burnett]

My Lords, I remind the Committee that we have been through, and probably are still in, the most incredibly severe recession. It is an appalling recession and many building companies have gone broke. They have gone into liquidation. Unfortunately they and other companies have signed up to planning agreements which, because such almost impossible burdens are attached to them, sterilise the sites, development, and the ability to build on them. This clause, the thrust of which I very much support, recognises that fact, and some local authorities, to their credit, recognise it because they are already renegotiating these planning burdens. Local authorities recognise that they want some affordable housing rather than none. The quid pro quo argument made by the noble Lord, Lord Best, is well worthy of consideration as long as there are reasonable time limits.

Another thing that has not been mentioned sufficiently is that, even if you renegotiate a planning permission, that takes a great deal of money, time and effort. Let us get some planning done and let us get some houses built. We are building only about 100,000 homes a year. We need at least 200,000 a year. The noble Lord, Lord Deben, is absolutely right. Let us try to remove some of these burdens and get builders building again. There has been a fundamental change of economic circumstances. That is what the clause is trying to deal with and that is why I support it.

[Lord Beecham]

My Lords, the noble Lord, Lord Deben, made what Ministers are apt to call some interesting points, which usually presages a disinclination to approve them. However, he did make some interesting points, not least the thought that perhaps the Treasury should revisit the issue of how significant housing projects and more generally the construction industry, to take up the remarks of the noble Lord, Lord Burnett, might be supported. However, the argument of the noble Lord, Lord Deben, was too limited in some ways.

The assumption throughout the noble Lord’s speech was that we are talking exclusively about housing, but Section 106 agreements are not, of course, confined only to housing matters. Secondly, he assumed that affordable housing schemes are for owner occupation. Of course that is true of a greater proportion, but they are not necessarily confined to owner occupation. There is also a need—which is one of the reasons for these agreements in any event, as the noble Lord, Lord Alton, implied—for a mix of tenure which would potentially ensure that there is a social mix within the development. In addition, the noble Lord, Lord Deben, implied that we are talking only about first-time buyers. I do not know what the evidence is for that assertion. When new estates are built, wherever that is, there are certainly a number of first-time buyers, but equally there are people who are, as it were, trading up and who are not necessarily first-time buyers. The position is not quite as stark as he suggested.

It follows that we need to be very clear about what the policy objectives are. First, as everyone in this Committee and in the House generally would confirm, we need to build more houses. Secondly, they should be accessible, through one form of tenure or another, to a wide range of people, not least in order to meet the desirable aim of having the kind of social mix that would help avoid a divided society. There are different ways of doing this. Clearly, Section 106 agreements can facilitate matters, and we will debate that issue in greater detail later. However, I recall in the 1970s, when there was a collapse in the property market, that my local authority stepped in to buy up unsold new private housing developments. That may have happened in other places as well but I cannot say whether it did. They were taken into the municipal stock. Subsequently, of course, under right-to-buy, they virtually all left local authority ownership. However, this might be a way of freeing up the industry; if not properties that are currently built and standing empty, then at least local authorities or social housing organisations taking a share of a development, thereby providing initial purchases and helping to ensure that kind of social mix.

[Lord Greaves]

The noble Lord reminds me of what Pendle Council did when I was chairman of the housing committee, back in those days when we were all young. As the noble Lord may recall, it was possible because it was a central government initiative that provided the funding, by some means or other, whereby the councils could do that.

[Lord Beecham]

Precisely. I do not know whether the noble Lord, Lord Deben, would agree but that might be one of the lines of inquiry that the Treasury could pursue and the Government could adopt. The position is not quite as stark as the noble Lord was suggesting and I certainly support the amendment of the noble Lord, Lord Best.

[Lord McKenzie of Luton]

My Lords, let me say at the start that I support the amendment of the noble Lord, Lord Best. I was tempted to follow the Minister’s suggestion that we do not range more widely over this issue but I was sorely tempted by my noble friend Lord Davies, among others, to get into benefits policy, which I am very happy to talk about for a long time. I share my noble friend’s concerns.

Before I get into the detail of the amendment, I say to the noble Lord, Lord Deben, that the component that seems to be missing from the analysis is the value that accrues to landowners on development from the community granting planning permission and agreeing that they want their community to be in a certain way, as a mixed community. An alternative might be to have special taxes that you get from looking at the uplift in value from planning permission—I will come back on that point—and you might then have your national scheme. For as long as that does not exist, you surely need to recognise that by agreeing to grant planning permission the local community is giving value to the landowner and developer, and to those who are going to occupy the houses that are built on that land.

[Lord Deben]

There are two very quick things that the noble Lord has to take into account. One is: who pays that? I am merely saying that in our present circumstances, when people find it very hard to buy, first-time buyers and the rest of them are paying for that cost. Secondly, we have a little difficulty here because to have the view that planning permission is a privilege seems to be wholly against any concept of the right to property, which says you can do exactly what you like on it, if the community then decides that you are going to have that restricted. The noble Lord is entering a very much deeper philosophical discussion there. However, the crucial issue is: who pays it? If the person who pays is the one at the bottom end of the scale, as it very often is, we ought to ask whether it should be paid rather more generally. That is all.

[Lord McKenzie of Luton]

It seems to me that the value comes from the granting of planning permission in respect of the land. If you are going to argue that that has to be shared by the community as a whole, not just the local community, surely you need mechanisms to get that value raised and to redistribute it. You could not do it on the basis of the current tax system.

This takes me back to a point that I was going to make on the amendment. I recall that when I first went on Luton Council, in the mid-1970s, we had something called the Community Land Act, as I recall it, and the development land tax. It was then very much the name of the game for developers to go and dig a trench to demonstrate that they had started their development before those provisions kicked in. Normally, there was a photograph taken with somebody holding up a copy of the Times, or whatever, to validate that this was when they had actually dug the trench.

[Lord Burnett]

I wonder whether the noble Lord recalls that I referred to the development land tax at Second Reading. It was a good example of the fact that where you have prohibitively high rates of taxation—I think the rate of development land tax was about 80%—it actually sterilised development so that building just did not take place. That was the downturn to which I think the noble Lord, Lord Beecham, was referring.

[Lord McKenzie of Luton]

We did very well out of it in Luton, I am bound to say, but I should stress that it is not Labour Party policy to reintroduce this tax. We should get that clearly on the record.

So far as the amendment is concerned, I agree with the provision to make sure that there are mechanisms to clearly identify when there is a commencement of development. What I was not sure about, having looked at Section 56 of the Town and Country Planning Act 1990, is whether that overrides all the other things listed there as the commencement of development. For example, that section says that,

“‘material operation’ means … the digging of a trench which is to contain the foundations, or part of the foundations”.

I think that the noble Lord, Lord Best, referred to that but I am not sure whether his amendment overrides it. It would technically seem to need to do that to get the solution that the noble Lord is seeking—a solution with which I agree.

There are a range of broader points but I will forgo the opportunity now for my clause stand part debate and come back there as we go through the amendments in due course.

[Baroness Hanham]

My Lords, we are back in the situation we were in last time. I am not sure whether I am answering a Second Reading speech that went totally away from the amendment, a clause stand part or just something that everybody has made up around this amendment. While it has not been made up, I think an opportunity has been taken to have a very wide-ranging debate on the back of the amendment moved by the noble Lord, Lord Best. He will understand that I was trying to confine this debate to his amendment, although I realise now that that was absolutely hopeless and was never going to happen.

If I may start on the philosophical aspect of our whole discussion, I will pin it immediately to my thinking that everybody recognises that we desperately need to build. We need to build housing in this country for several reasons. The first, and most important, is that we have an awful lot of people without homes. As my honourable friend at the other end, Nick Boles, has pointed out, if we are not to have people in their 40s still living with their parents and still unable to buy property in the near future, we have to start building. Secondly, we are not going to jerk the economy back into life if we do not jerk the construction industry back into life. Those are two fundamental reasons why we need to make sure that the growth of housing takes place.

There are many elements to housing: housing for sale; housing that goes to right-to-buy; housing for shared ownership; affordable housing; and housing for rent. A great number of projects are all buried within Section 106. Perhaps I could remind noble Lords that Section 106 is responsible for a very great proportion of the affordable housing being built at the moment. The noble Lord, Lord Davies, said that we were getting rid of that. We are not. In this clause we are not waiving the requirement to build affordable housing. What is being said here, and what we are recognising, is that negotiations which took place some time ago when there was probably a very high market may now not be viable because of the affordable housing element, which may be a very large part of the Section 106 requirement.

We are saying to all local authorities: do what many local authorities are already doing; that is, to look at that obligation to see whether it can be reduced to make the whole project viable. If it does not become viable, developers are not going to develop—and if they do not develop, we can all wring our hands and talk about housing forever but it will not be built. If a small reduction in affordable housing brings that back into viability, it seems an exceptionally good reason to have those discussions taking place.

18:00

My noble friend Lord Deben set us off down an HS2 track, which I had not been entirely expecting. As I understood his argument as he developed it, he was actually totally against Section 106 in dealing with housing. He was saying that this was a matter for the Treasury—a matter for public funding—and not a matter for developers. He will forgive me if I am wrong, and no doubt will take his moment to put that right. Unless I am way down the wrong track, he will know, as I do, that the Treasury will not now commit great waves of money to the development of housing. There is already money going in from the Treasury, but not on the basis of the 400,000 houses which are already in the pipeline. It may be philosophical and it may be right or a good thought, but the reality of the situation is that one of the only ways we are going to get housing is through Section 106 agreements. That is right: it is a charge on the developers—who are going to make, or are expecting to make, a profit—and they should pay for that and pay something back to the community.

I hope that within that context, we can look at Clause 6—when we actually get to it—in a rounded way. Perhaps we can all agree across this House that we want and need housing at all prices, but particularly for those who are on lower incomes or first-time buyers—as my noble friend Lord Deben said—and those who will never get on to a buying ladder and will always need the support of social housing. There is a big demand here for that. As for the point made by my noble friend Lord Burnett, yes, part of the idea of renegotiating Section 106 is to bring it into a form that will allow the developer economically to be able to do this. I said that earlier on and do not want to repeat myself.

The noble Lord, Lord Beecham, is, of course, correct. Section 106 is not entirely about affordable housing; it can spread pretty wide over the elements. However, this clause deals only with affordable housing. It is a quick, in-and-out clause where the developer can come and say, “The affordable housing aspect of this particular Section 106 agreement actually means that I cannot start at all”. The amendment introduced by the noble Lord, Lord Best, could also mean that they could not start. It is trying to ensure that where developers are running out of planning permission time, they do not, as he said, just take a shovel and go and dig a hole and retrieve their planning permission.

While I understand the concerns set out by the noble Lord, I do not think that what he is doing and the way he is doing it are going to help. I am wholly sympathetic to the need for development, but I am not convinced that the solution is to impose new regulation that would lead to site-by-site variation in the legal definition of development. There is a real risk that this would lead to greater uncertainty, delays and disputes.

We have not touched on the community infrastructure levy, which runs alongside Section 106, but it acts as a very powerful disincentive to the actions that we are discussing—the shovel in the ground and the waving of the Times—and which the noble Lord is trying to prevent. The commencing of a development would be the shovel in the ground; it would trigger the developer’s liability, so there is no advantage to just digging a hole, because that would start the requirement to make payments. We think that this is a potentially significant deterrent to what the noble Lord is trying to prevent.

I acknowledge that not all councils have got CIL in place at the moment, but they will do; the whole of London is already covered by that. As more councils adopt the community infrastructure levy, this non-negotiable payment—they cannot come back to negotiate what they are paying—will provide developers with even greater incentive to build out their permission once development has commenced. Local authorities can also introduce incentives to build out planning permissions through the terms of the Section 106 agreement and they can lay down the timescale in which development has to start.

The Government have also introduced a range of initiatives and financial incentives, such as the Get Britain Building fund, to encourage local authorities, communities and developers to start building. Local planning authorities can also deal with the problem of uncompleted development by issuing a completion notice. Where development has begun but the local planning authority considers that there is no prospect of it being completed within a reasonable time, the authority can notify the developer that planning permission will cease—that is, they will have to come back and start all over again and it may get worse—unless the development is completed within a specified period.

Local authorities now have a significant set of actions they can take to prevent developers starting developments—as we have suggested—with which they have absolutely no intention of proceeding. Therefore, we do not support the proposed new clause or the introduction of new regulations to allow the definition of development to be specified for each planning permission on a case-by-case basis. Such an approach is likely to lead to unhelpful legal inconsistencies and to run the risk of adding a layer of bureaucracy, confusion and cost, which could end up delaying the whole process even further.

Although I am not prepared to accept this amendment, I hope that I have been able to give some reassurance to the House that we understand completely the need for housing; we understand that Section 106 is a major contributor to that; we understand that Section 106 is valuable and there is no question of funding at least some of the affordable housing other than through Section 106—I am sure this is a debate that my noble friend Lord Deben will want to see us carry through at some other stage, but it is not for today; and that we are currently taking action to ensure that developers are encouraged to proceed with developments in a timely manner. I hope that having stirred a major and interesting debate, the noble Lord, Lord Best, will be willing to withdraw this amendment. I hope he will speak on the remaining amendments he has proposed, but we have had a real overview of those.

[Lord Alton of Liverpool]

My Lords, perhaps the Minister could comment briefly on the proposal that local authorities should be able to retain the land itself in order to reduce the cost of houses that are built, in order in turn to bring them within the pocket range of either first-time buyers or existing council tenants. Even if she is unable to give a response today, will she at least agree to write to me about it?

[Baroness Hanham]

My Lords, I would be very happy to write to the noble Lord, but my feeling is that, if the local authority owns the land and thereby gives it without cost to the developer, by definition everything ought to be lower cost and it ought to be able to have some more control over it. I think this justifies a further look and I will come back to the noble Lord.

[Lord Best]

My Lords, I am deeply grateful to all noble Lords who have joined in this debate. By covering a lot of the ground on this now, we have saved time later. I will respond briefly to some of the key points made. With regard to the powerful speech by the noble Lord, Lord Deben, I have been discussing these things with Housing Ministers and Planning Ministers for longer than I care to remember; it was the noble Lord, Lord Waldegrave—then William Waldegrave, the Planning Minister—who first introduced the idea of planning gain paying for new housing development. I remember those conversations. It started in Docklands, where there was a need for local people to see something for themselves when lots of new housing was being built that was much more expensive than they could afford; from that came this way of paying for affordable housing for a range of people.

Perhaps it would be better if one simply taxed more deeply the landowners, the house builders and the occupiers, and put the money in a pot to pay for affordable housing, but it would not then be produced in the way that the noble Lord, Lord Alton, was commending—on sites that are now a mix of owner-occupiers and people who are renting or in shared ownership, which are socially very valuable. In a way, the way in which planning gain operates is a tax, and there are really only three people who can pay it. As the noble Lord, Lord Deben, suggests, the purchaser—who may be a first-time buyer—will actually be charged what the market can bear and the market is determined by the 85% of properties that change hands in the second-hand market rather than those that are built new. The developer can charge only what the market will bear, and the purchaser will look at other properties as well. The purchaser is unlikely to see their price increase for that reason.

The house builder themselves cannot operate at a loss—they would just not be in business at all—so they cannot absorb all the cost of this tax themselves. It is, I think, the third party, the landowner, where the tax finally lands, because there is a very wide variation in the value of land for agricultural or other purposes and land for development, and that is where the tax really has been drawn over the years. That system has worked pretty well.

The noble Lord, Lord Davies, makes the point that this could be a double bad deal for local communities unless we get some changes. The noble Lord, Lord Burnett, noted that local authorities already renegotiated a lot of deals, and he approves of the idea of a quid pro quo now if we are to tamper with the Section 106 agreements.

[Lord Burnett]

I think that I said it was worthy of consideration.

[Lord Best]

I accept that with some gratitude. The noble Lord, Lord Alton, talked about the social mix on decent sites, which is an important part of Section 106. The noble Lords, Lord Beecham and Lord McKenzie, were supportive, for which I am grateful. The noble Lord, Lord McKenzie, wondered whether this way of approaching the issue would actually not work and one might require a different change to the Town and Country Planning Act. The point of this amendment is that it would enable a Section 106 voluntary agreement —yes, I agree, with some pressure—to be made between two parties, and that could specify the definition of what starting on site and getting going would mean. That would not require legislation; you can put anything into a Section 106 agreement. However, the inspectorate, in reducing the amount of affordable housing, would make that conditional upon agreement being reached about what it means to start on site. I think that it could work.

Clearly the Minister is not minded at this time to go for an amendment of this sort. She very properly applauds the way that Section 106 works and accounts for a lot of affordable housing today. Like her, I approve greatly of the work of Nick Boles, the Planning Minister, in energetically trying to ensure that we build more homes, not just to ease housing shortages but to help the wider economy. She brings some reassurance that the community infrastructure levy provisions might produce ways in which developers were obligated to get on with the job. I am not sure whether that is going to be enough and I reserve my position, but at this point I beg leave to withdraw the amendment.

Amendment 55ZA withdrawn.

Clause 6 : Modification or discharge of affordable housing requirements

Amendment 55A

Moved by

[Lord Best]

55A: Clause 6, page 6, line 5, at end insert—
“(1A) This section only applies in relation to English planning obligations agreed prior to Royal Assent.”

[Lord Best]

Apologies, my Lords, it is me again. The amendments that follow set out further proposals to moderate the likely adverse consequences of Clause 6. Amendment 55A in my name and those of the noble Lords, Lord Tope and Lord McKenzie, make it clear that Clause 6 relates only to planning obligations agreed in the past, which would usually mean agreed prior to the economic downturn when the foolhardy believed that house prices could go on going up for ever. The amendment, somewhat indulgently, would mean that cases of Section 106 agreement signed right up until the enactment of this legislation could still be subject to appeal and a reduction in the affordable housing component previously agreed by the developer.

I sincerely hope that the Planning Inspectorate would show little sympathy for the developer who has only recently entered into an agreement and almost immediately wishes to renege on it on the grounds that the project is no longer viable. The amendment would fix a clear end date to ensure that appeals, as is obviously the Government’s intention, relate not to the future but to the problems created by the economic downturn of 2008 and the years immediately thereafter. I beg to move.

18:15

[Lord McKenzie of Luton]

My Lords, we have a couple of amendments in this group, but perhaps I might make a few upfront comments now following our early discussions. Our concern about this clause generally is that it will lead to a reduction in the supply of affordable housing. Specifically on that point, I do not think that we have seen the equalities impact assessment for this clause; if we have, doubtless the Minister will let us know, but it would be very helpful if we saw that before we got much further into our deliberations.

The Government’s rationale for this clause is that there are sites where planning permission exists but where development has not started because the affordable housing obligation makes the development not economically viable. This obviously begs the question of how you define and calibrate viability and the extent to which it is the affordable housing obligation that is the cause of the project having stalled. We have received some data about estimates of the number of sites stalled and the housing that might be held up by this, but no real evidence of the extent—if at all—to which this is caused by affordable housing obligations, and our amendments seek to probe this. Can the Minister provide any further information? Will she provide us with a full report with a list of the sites involved and the numbers of affordable housing involved—that is, those sites where it is the affordable housing that is making them unviable?

We think that the clause is unnecessary because local authorities already have the power to renegotiate all aspects of Section 106 and they are using that power, as the Minister has previously accepted. Moreover, the Government have consulted on existing powers and the prospect of reducing the time—I think that it is currently five years—after which an appeal to amend the obligation can be made to the Secretary of State. What is happening with the Government’s response on that consultation?

This clause undermines and potentially discredits the local plan, a process that will have undergone public scrutiny and will have set affordable housing policies. In essence, judgments that have been made about meeting a locality’s housing need may be set aside for the economics of the here and now—set aside, indeed, for generations.

The Government have made play about providing additional funding—£300 million, I think—to support affordable housing. How is that to be applied? Could it not be used in whole or in part to move forward those sites that the Government claim are stored? Is that not a better way forward?

Amendment 55A in the name of the noble Lord, Lord Best, is one that we can support and to which, as the Committee have heard, we have added our name. It restricts the application of the clause to obligations that were entered into prior to Royal Assent. This would act as some restraint on developers overbidding for land and shutting out more responsible bidders that would adhere to local policies, with the prospect of being able to scale back commitments in future.

There is a wider point which we might pursue on Report if this clause remains. As I have said, the Government have been pursuing what they call a separate proposal to allow renegotiation of wider Section 106 planning obligations but only those agreed prior to April 2010. So far as I am aware, we have not seen the response to that. The consultation says:

“We consider that 6 April 2010 is an appropriate cut–off date for this change. New statutory tests were introduced for most planning obligations on 6 April 2010 which ensure that obligations agreed after that date must only cover what is necessary to make the development acceptable, must be directly related to the development and reasonable in scale and kind. It is also clear that a high proportion of stalled developments are dated prior to April 2010 when market conditions were different”.

It is surely the case that this logic applies to affordable homes obligations as to any other Section 106 obligations, so the Government should have no difficulty in accepting the cut-off proposed by the noble Lord, Lord Best, which is apparently less restrictive than the Government’s own thinking.

Amendments 55AA and 55CC provide that an application to modify an affordable housing obligation cannot be made within a certain time of its being entered into. The amendment sets this at two years from the beginning of the grant of planning permission or as may otherwise be prescribed. The purpose of the amendment is obvious. Clause 6 should not run when the Section 106 agreement is reasonably fresh. Consideration of economic viability is not without cost, time and expense and there should be encouragement on applicants and local planning authorities to get it right first time. Knowing that the affordable housing obligation cannot be unpicked for a period of time will at least help to concentrate the mind. It will also strengthen the role of the local planning authority in clearly establishing that its deliberations cannot be immediately brushed aside.

We have added our names to the sunset clause; it has not formally been moved but I will add my comments as I am on my feet. Our preference is for this clause to be removed in its entirety. Failing that, limited by the type of amendments that we have just discussed, time limit in the application of the clause would serve as a backstop to other amendments, giving it a limited life of three years. The rationale for a limited life for this clause was—I think—going to be set out by the noble Lord who was due to move it and follows the analysis in particular of the National Housing Federation. Over the next three years the NPPF should have bedded down and its focus on taking account of the viability of affordable housing should be well established. We are told that the clause is necessary in the first place because of the economic downturn. I presume—despite current GDP figures—that the Government would not argue that this will continue indefinitely. In any event, commitments made in better economic times are washing through the system.

The Government clearly see the clause as having some time limit as Clause 6(4) enables the Secretary of State to repeal by order Section 106BA and 106BB. Perhaps the Minister can say what the Government had in mind for the application of these provisions. What criteria will the Secretary of State have in mind when looking to activate this power and to repeal the clause?

[Lord Tope]

My Lords, I do not think that I can actually move the sunset clause. Amendment 55CD is in a group, so it would be a little premature. I will most certainly speak to it. I was offering the noble Lord, Lord McKenzie, the courtesy of allowing him to speak to the amendments in his name which are earlier in the group.

Amendment 55A is also in my name, and I am very pleased to support it. As both the noble Lords, Lord Best and Lord McKenzie, have spoken to it I do not think there is anything I need to add at this stage other than to listen with interest to the Minister’s reply. The noble Lord, Lord McKenzie, has inevitably done some of my job in speaking to Amendment 55CD and I welcome and endorse what he had to say on that. It is indeed a sunset clause. It would mean that this section will no longer have effect three years after the Bill is enacted. That is because it should no longer be necessary three years after the Bill is enacted.

The NPPF was adopted nearly a year ago and it stressed the importance of ensuring economic and financial viability in all affordable housing schemes. The NPPF should be doing that job and should continue to do that job. Local planning authorities in their negotiations of Section 106 agreements should be taking that very much into account with developers; Section 106 agreements from henceforth, as long as they last, should meet this requirement. Who knows when the current economic difficulties will come to an end? I hope that that will happen one day—they have certainly been in place for rather longer than a year or more.

It is our view that this clause, which has not found universal favour in your Lordships’ House, really should not be necessary after three years. By that time all the existing Section 106 agreements will have either been implemented or expired. Planning consents extant at that time will have been granted under the regime of the National Planning Policy Framework; therefore this clause should cease to be needed and cease to have any effect. That is the reason for the sunset clause which I now speak to, but do not move.

[Lord Beecham]

My Lords, in September last year Housing Voice, which calls itself the Affordable Homes Alliance, published the report of an independent inquiry into what it termed—rightly, we would all agree—the affordable homes crisis. The inquiry was chaired by my noble friend Lord Whitty and part of its analysis was to stress:

“The social rented sector is becoming increasingly residualised”.

It pointed out that not enough local authority and housing association homes at social rents were being built to meet need. At that point the waiting lists in England stood at 1.8 million and there were concerns about the Government’s policy as to whether current social housing programmes were adequate. In particular, reference was made to the operation of the affordable rent model under which homes are let at up to 80% of market rates and the introduction of shorter-term, less secure tenancies. That again raises the question of what we are talking about in terms of affordable homes. What is the definition of affordability? In particular, what do we mean by affordable homes for rent?

I notice that the Secretary of State dominates the front page of the Daily Telegraph today with his denunciations of councils—some of them Conservative —for having the temerity to raise council tax to the extent permitted by the Government without having a referendum. The same Secretary of State had no hesitation at all in increasing council house rents by 5.1% which is two and a half times the maximum that a council could raise its council tax.

Leaving that aside, it would be interesting to get the perspective of the Government and that of the Minister on what the Government actually mean by affordable homes in terms of price and the income that might sustain that; rents and the income that might sustain them; and in particular the proportions within projects that should be devoted to the different types of affordable housing. The scheme in the ward that I represent in Newcastle—I hope that it is going to appear on the ground as opposed to being a rather subterranean task being discharged by the contractors—will see 25% of houses being allegedly affordable at the moment. Of that only a small proportion—10% or less of the total—will be for rent. In the economy of my city and several other places that strikes me as a rather low figure. Ironically the development will start with the affordable homes rather than the others because at the moment the market is unlikely to sustain those which even the developers would not regard as being within that category. A little enlightenment would be helpful.

18:30

I also refer to the Town and Country Planning Association’s briefing, which many Members of the Committee will have no doubt received, expressing concern around the proposed changes to Section 106. It points out that, while the agreements extend—as we heard in the previous debate—to wider issues than just housing, the clause focuses only on affordable housing. The association’s concern is that, while negotiation may take place, it might delay delivery because negotiations might well be suspended until the Bill is enacted and comes into force. It also points out the potential delays with the appeals process and the like. It also refers to the fact that, as yet, there is no guidance on the residual evaluations that will have to be determined. That, I suppose, impinges on the question of viability to which we will return later. I will defer any further comments about that.

The association’s concern is that the combination of voluntary renegotiations and those which will follow under the government amendments to Section 106 will have the potential to reduce the amount of land allocated for affordable housing and, reverting again to the previous discussion, lead to less of a social mix in such developments. That would clearly be something which I take it even the Government would not wish to see, but may be an unintended consequence of what they are doing. It would be helpful for the Minister to develop rather more fully the Government’s view of what they mean by “affordable housing” in terms of both tenure and price, and how they will endeavour to secure it, given that what they propose is—in the view of the Town and Country Planning Association, at least—likely to lead to rather less affordable housing being provided, certainly in the short and medium term, than would otherwise be the case.

[Lord Greaves]

The noble Lord makes some good points. I will put a slightly different scenario to him and ask what he thinks. In an area where development is difficult to get under way because it is not a growing or economically buoyant area—I am obviously talking about my own area—clearance took place under the old housing market renewal scheme, so there are small brownfield sites. The council will provide those brownfield sites for free to the main local social housing landlord, the RSL which deals with the former council stock. The intention was to build mixed developments of affordable housing on there, some of which would be for sale and some for rent. However, when you take into account free land, the cost of developing the site and the rents which can be charged in a low-rent area over the next 30 years, as against the costs of developing and management during that period or the price that would have to be charged for affordable housing for sale, the figures just do not add up. Those sites remain undeveloped because they are not affordable to the RSL under the existing rules and regulations. Does the noble Lord have a solution?

[Lord Beecham]

If I did, it would not necessarily be one that has as yet been reached by my colleagues at the other end of the building. I cannot be writing Labour’s housing policy, much as I would like to.

We need to go back and consider the point which I thought that the noble Lord, Lord Deben, was implying: the Treasury and the Government have to look at the extent to which public investment is required to meet the housing crisis that we are facing, if only because that will have wider impacts upon the economy as a whole. It is as good and necessary a time for that kind of investment to take place, given low rates of interest in borrowing and the need on the construction and housing sides. I think an element of public subsidy would be desirable, but I emphasise that I am not authorised to make any such pronouncements.

[Lord Greaves]

Of course, they were originally going to stack up because the relatively small gap funding required there was going to come through the housing market renewal scheme. Unfortunately, the coalition’s abolition of that scheme now makes it impossible.

[Lord Beecham]

There is, of course, also £300 million in the Government’s programme for affordable housing. I have today tabled a Question for Written Answer, which might be anticipated by the Minister, as to where that is going.

[Baroness Hanham]

My Lords, I apologise. I was not sure whether the exchange across the House had been totally completed.

[Lord Beecham]

Neither was I.

[Baroness Hanham]

My Lords, within this group of amendments we cover some of the ground we have already covered, so I will try only to fly over the top of that. These are important amendments and I want to do them justice.

Clause 6, as we have discussed, has a clear and specific purpose: to get houses built. It will deliver private and affordable homes where those homes are currently stalled. As I said at Second Reading, stalled sites represent no local growth, no community benefit and no new housing. Across the country, we have 1,400 stalled sites, with the capacity for 75,000 homes, including affordable housing. The noble Lord, Lord McKenzie, asked me whether we could say how much affordable housing was caught up in this. Local authorities hold that information; it is not necessarily passed back to central government. I therefore cannot give him a definitive response to that, except to say that we know that a good percentage of that 75,000 is affordable housing.

We know that many councils are voluntarily renegotiating to bring sites forward; we have discussed how this can be voluntary. We are in favour of this good practice. We are supporting this approach through a mediation service, bringing together local authorities and developers to help unlock sites, so that they can come together, discuss it and see how they can move on. But where authorities and developers are unable to come to agreement, developers should have a right to challenge. Current legislation prevents the developer appealing formally for five years. This is too long when we need homes.

There may need to be a fundamental review of obligations for those agreed at the peak of the market. We intend to make regulations in the coming weeks to allow earlier renegotiation of all planning obligations agreed prior to April 2010. That was a point made by the noble Lord, Lord Beecham: voluntarily, before 2010, you could do that but the regulations will make that part of legislation. These negotiations can take time and be costly and complex, so we are also ensuring that there is a rapid, focused mechanism for a review of the affordable housing element only, where the viability of the scheme is at stake, with a right of appeal to the Planning Inspectorate.

Affordable housing often comprises the largest single contribution on residential schemes, which is why we have focused there. Research in 2007-08 found that about 50% of all planning obligations are for affordable housing. There should also be capacity to vary the affordable housing provision in most cases. The noble Lord, Lord Beecham, asked what we meant by “affordable housing”. That can be found on page 50 of the National Planning Policy Framework. I will give a snapshot and then the noble Lord can look it up for himself. Affordable housing is:

“Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market … Homes that do not meet the above definition of affordable housing, such as ‘low cost market’ housing, may not be considered as affordable housing for planning purposes”.

Those are the three major elements.

It is important to understand that we are not proposing that developers can somehow avoid their obligations, which was suggested by the noble Lord, Lord Davies, earlier. We are simply allowing a review to be made to ensure a viable and deliverable scheme as agreed. Furthermore, we are not proposing that developers can ensure blanket removal of affordable housing requirements for their schemes. We are requiring an evidence-based approach that will adjust the affordable housing requirement by only the amount necessary to bring the scheme into viability. This would not be wholesale removal except in the most extreme cases.

Evidence will be key to this process. Developers will have to submit revised evidence to the local authority to justify why their current planning obligation is not viable. The local authority will be free to respond to this proposal and be able to collect its own evidence if it wishes. Concerns are often expressed about the quality of viability evidence. However, robust evidence must be the best basis on which to make a judgment on the viability.

To assist as much as we can in ensuring consistency in how developers and councils approach this new process, we intend to issue guidance to support this clause. The guidance will not advocate a single methodology for viability assessment, but it will work with industry practice. It will be clear on what developers need to do to support their application for review. We will discuss the guidance with professional bodies and it will be published in due course, but I hope that we will be able to have a discussion about it before Report. The guidance will also be clear on the flexibilities open to local authorities to encourage developers to start on site and to get development going.

Overall, this measure presents a real opportunity to stimulate local housing growth by ensuring that consents are viable and realistic. The provision will not affect those affordable housing contributions that are planned on viable sites; in other words, where the costing stacks up, the developers cannot come back and suggest that they contribute less affordable housing. However, the measure provides for adjusting unattainable levels of affordable housing on unviable sites. Those values may have been estimated during a high point in the market, and we are clearly not there at the moment.

I turn now to the amendments in this group. Amendments 55A and 55CD would limit the life of the clause to those planning obligations in place at the time of Royal Assent or three years after Royal Assent—this is the sunset clause. I understand the arguments being made that the intent of the clause is to address obligations made in different economic circumstances. It is about giving developers the opportunity to review affordable housing requirements and bring forward stalled sites. The difficulty that I have with the amendment, which allows applications in relation to existing obligations only, is that it assumes that we are now in a period of stability in the market and that any obligation made currently should not be challenged on the grounds of viability because we know that all is well in the property market. If we knew all the factors that were to be involved and their impact on a developer’s viability—namely, construction costs, sales values and borrowing costs—and if those were certain and fixed for the foreseeable future, we could focus on the past only. However, evidence from public sources, such as the Office for Budget Responsibility, indicates that we are not actually there yet. Evidence indicates varying performance up and down the country. House price growth remains subdued across most of the country. The recently announced 2.5% house price increases in England were driven by a 5% rise in London and a 3% increase in the south-east. Elsewhere across the country there is still a wide variation in house price growth.

There remains uncertainty in the housing market. The Government continue to provide strong support for housing growth—for example, the NewBuy and FirstBuy schemes—and we are making progress. Net additions are up 11%. Nevertheless, the wider market remains uncertain. While transactions are up year on year, they are down around 47% compared to pre-recession levels. So we do not yet have the certainty that we would like on the housing market and associated viability. The clause already includes, as noble Lords have said, a provision to allow the Secretary of State to switch off the provision by order. This has been drafted in a way that allows for a judgment to be made at the appropriate time, based on the state and stability of the housing market.

However, I am clear from the debate that we have had today that greater certainty on this would be desirable. I am also very conscious of the report published last week by the Delegated Powers and Regulatory Reform Committee of this House. We are giving the report and its recommendations very careful consideration, especially in relation to the suggestion that a sunset date should be considered. Therefore I think it would be more helpful if we return to this matter on Report, and I hope that I can have some further discussions with noble Lords before we get there.

18:45

Amendments 55AA and 55CC, proposed by the noble Lord, Lord McKenzie, seek to prevent applications being made until the obligation is two years old. As I said, the purpose of Clause 6 is to ensure that stalled sites with planning consent, ready to provide much needed housing and jobs across the country, are brought back into viability and built on as quickly as possible. This clause introduces a swift, targeted mechanism for a review of affordable housing obligations.

A two-year wait before a developer can apply would mean that sites remain stalled for longer, which therefore reduces the opportunities for reviewing them. We are introducing a test of economic viability, where it can be clearly demonstrated that the site is not viable as a result of affordable housing contributions. An arbitrary time limit of two years serves no real purpose.

The noble Lord, Lord McKenzie, said that the NPPF focuses on viability and asked why this is not sufficient. Individual sites will change during the life of the planning consent, even if they were originally granted as a viable scheme. In practice, sites are not all going to be identical. The noble Lord also asked why the £300 million given by the Government for new affordable homes could not be used to contribute towards the reduction of the affordable housing element. The £300 million is a guarantee to deliver up to 15,000 new affordable homes; that is above and beyond what there is. We will publish further details of how the guarantee scheme will work. As part of that, we are examining how social housing landlords will be able to bid for it. So it does not really fit in with the measures that we are talking about at the moment. We cannot make a blanket commitment to fill the gap for aspirational affordable housing requirements with grants in the event of a Section 106 agreement being negotiated. However, we are continuing to work on the design and potential use of the guarantee scheme and its associated capital grant funding. I expect to issue further information on this shortly.

I hope that that lengthy response answers the questions that noble Lords have raised, lays out the Government’s position and assures the House that we are thinking carefully about the sunset clause, to which, as I have said, we shall return before Report.

[Lord McKenzie of Luton]

I am grateful to the Minister for her detailed replies. Perhaps I may follow up on one or two points. I asked whether an equality impact assessment of this clause had been produced and, if so, whether we could see a copy of it before Report. I did not quite follow the rationale about the £300 million of additional funding for affordable housing. The Minister said that it was for new housing. If we are talking here about less housing than there otherwise would have been, it seems to me that that itself is not a logical reason not to be able to apply it to supplement Section 106 agreements, which are assumed to make a particular site incapable of being economically viable.

The Minister helpfully talked about guidance for issues around viability. I was not quite sure—perhaps I missed it—whether she said that we are likely to see a copy of that guidance before we get to Report.

I revert to the issue of the extent to which sites are stalled by affordable housing obligations. Is the noble Baroness at least able to publish a list of the 1,400 sites where the 75,000 houses are to be built, and say whether it is those plans that are causing the sites to be unviable? Local authorities may have that information but is there no central collection of it that can be shared with us? That would be particularly helpful.

Finally, perhaps I may come back on the cut-off point. As I understand it—and as I think the noble Baroness confirmed—the broader consultation on Section 106 agreements and the current five-year rule will have as its starting point agreements that were entered into prior to April 2010, on the basis that agreements entered into after that point would have recognised the current state of the market. If that logic runs for that scenario, why does it not apply equally to consideration of affordable housing? I am a bit unsure as to how those two different processes will interrelate.

[Baroness Hanham]

My Lords, I can deal with the final point first. As I have said a number of times, the clause is specifically about affordable housing. It is perfectly up to local authorities, even at the moment, voluntarily to renegotiate any aspect of Section 106 applications made before 2010. Regulations are coming out soon to make sure that that can be done anyway.

This clause relates only to affordable housing and the expectation is that this will be a pretty swift operation. Negotiating other aspects of Section 106 agreements may take quite a long time because there may be a lot of elements. However, affordable housing ought to be dealt with swiftly by the local authority or the Planning Inspectorate. We want decisions on this that generate affordable housing. That is why the issues have been separated; there is a single focus here. However, that does not discount other aspects of Section 106 being looked at voluntarily. Ultimately, there will be a statutory requirement.

[Lord McKenzie of Luton]

I understand why the Government are saying that the issues should be separated; whether I accept that logic is another matter. However, in relation to having one cut-off point of April 2010 because agreements entered into after that would have recognised the current market conditions, why does that issue not run for both scenarios—whether it relates to affordable housing or other components of Section 106 agreements? Why is it 2010 for one but an unlimited starting point for affordable housing?

[Baroness Hanham]

My Lords, I think that the answer is simply because affordable housing is such a significant element of this particular argument. I may have to write to the noble Lord about this pinch point and come back to him.

As regards the £300 million, I said that we will not make a blanket commitment to fill the gap regarding the aspiration of affordable housing, which is what we have been talking about—the idea of granting affordable housing requirements in the event of a Section 106 agreement being renegotiated. I have not ruled that out entirely but I have, more or less, said that I do not think that we could have such a provision. However, the matter is still being looked at.

[Lord Greaves]

On the question of the two types of Section 106 agreements, if renegotiation of non-housing Section 106 agreements can be done in regulations, why does it need to be in primary legislation in relation to housing?

[Baroness Hanham]

That is because we are concentrating here only on affordable housing. Putting this in primary legislation means that the provisions come into effect immediately after Royal Assent and we do not have to spend time working out regulations. These provisions are in primary legislation because this is an important aspect of getting sites unlocked.

[Lord Best]

My Lords, this has been an important debate. My amendment and some of the others in the group are about there being a cut-off point for the provisions in Clause 6. We know that the Government’s target is, as it should be, agreements made before the peak of the market back in April 2010. I take the point that economic uncertainty—the possibility of things getting worse—prevails; however, one would hope that developers will not enter into agreements from now on without recognising the dangers that they can get into.

My housing association is trying to acquire sites even as we speak, and we keep being outbid by people who we think are paying ridiculous prices for the land. They are entering into Section 106 agreements with their local authorities. It would not be fair on those who are playing the game properly if, later, those who go out and pay far more than they should for a site come back and say, “Sorry, the scheme is not viable with this Section 106. Can we have it reduced?”. That is not a fair way to operate and I think that the Government accept that. I take comfort from the fact that on Report we will hear more about this matter. Therefore, at this stage, I am delighted to withdraw the amendment.

Amendment 55A withdrawn.

Amendment 55AA not moved.

Amendment 55AB

Moved by

[Lord McKenzie of Luton]

55AB: Clause 6, page 6, leave out lines 11 and 12

[Lord McKenzie of Luton]

My Lords, I shall speak also to our other amendments in this group—Amendments 55AF, 55BB and 55BD.

Amendment 55AB would delete one of the options available to a person seeking easement of an affordable housing obligation—the complete removal of the obligation. To allow that would lead to less of a mix in our communities and less land available for affordable housing. We will come on in other amendments to adherence to the local plan, but I remind noble Lords of the NPPF requirement for local planning authorities to,

“use their evidence base to ensure their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area”.

The prospect of removing the entirety of an affordable housing obligation is not just a short-term issue. The consequences last for years, perhaps a century or more—the chance denied for the creation of inclusive and mixed communities.

Amendment 55AF is the link to Amendment 55BB and is concerned with circumstances where the value of land on which planning consent has been granted with an affordable housing requirement has increased. If the requirement has not been met and the obligation not fulfilled within two years, the amendment would enable the local authority to initiate modifications to the obligation. The implication was that there could be an upward revision of the affordable housing requirement. This is consistent with Amendment 55B of the noble Lord, Lord Best, which would delete provisions that prevent modifications to affordable housing obligations that are more onerous. Such a provision would clearly encourage developers to make speedy progress on their affordable housing obligations and discourage them from sitting on their sites, waiting for land values to increase. This is an issue of basic fairness. If affordable housing is to take the hit when land values fall, why should the reverse not apply? We recognise the need for due process in this approach—perhaps a right to appeal to the Secretary of State—but this amendment seeks just to establish the principle.

Amendment 55BD addresses the timeliness of an implemented and modified affordable housing obligation that has been determined by the local planning authority —that is, an obligation that has not involved an appeal to the Secretary of State under new Section 106BB of the Town and Country Planning Act 1996. It requires the revised obligation to be met within two years; otherwise the original obligation will stand. This approach is consistent with that provided for in modifications determined by the Secretary of State, except that there is a three-year period in that case, which we will seek later to amend to two years. I beg to move.

18:59

[Lord Best]

My Lords, Amendment 55B in this group, which is in my name and those of the noble Lords, Lord Tope and Lord McKenzie, would enable the planning inspector to rule, after looking at the situation, that the level of affordable housing should be increased, rather than only being able to decide that the affordable housing component must be reduced. Without this amendment, the housebuilders have a one-way bet. They cannot lose by going to appeal, and they might win. This is a recipe for developers to simply “have a go”. The amendment would ensure that there are appeals only where a robust and well evidenced case can be made for a reduction, so it should deter frivolous and unsupported applications.

[Baroness Hanham]

The noble Lord, Lord Best, has spoken to Amendment 55B, which seeks to allow the modified obligation on first applications to be more onerous than the original obligation. If a developer undertook a voluntary renegotiation, he would neither expect nor agree to more onerous terms. He would expect to come out with something better than he went in with. He would revert to the original, agreed obligation if the negotiation was unsuccessful. Under this application process, we want to replicate these circumstances for the first application. It provides an important incentive for developers to come forward and review their schemes. We need housebuilders to bring sites forward and I hope that this provision will ensure that they do this.

The clause also provides an important distinction between the first and subsequent applications to encourage the developer to proceed quickly. Under the first application, the affordable housing requirement must be reconsidered if it is found to be causing the scheme to be unviable. The local planning authority must modify or remove it so as to make the development viable, and the outcome must not be more onerous than the original obligation.

In relation to a second or subsequent application relating to the same planning obligation, the authority has more flexibility in amending the affordable housing requirement. Where it is justified on the basis of economic viability, the affordable housing requirement could be made more onerous than in the original obligation. The only restriction is that the amended obligation must not make the development economically unviable.

The distinction between first and second applications provides a real incentive for developers to reach a new agreement on their affordable housing requirements on the first application and to get on with building. It discourages repeat applications unless the developer is very clear that viability evidence supports their case. It also provides an important incentive for them to come forward and review their schemes. The purpose of these provisions is to ensure that development goes ahead and is not delayed because of unviable affordable housing requirements.

This amendment prevents a developer requesting the local authority to remove the affordable housing requirement, even if viability evidence justified this. It is not our intention that developers should remove all affordable housing requirements. We want affordable housing to be justified on the grounds of viability. In the clear majority of cases, we expect that evidence will demonstrate that some—probably most—affordable housing is viable

However, there will be some cases where evidence demonstrates that no affordable housing at all can be supported by the development. The developer must have the option to apply for this and the local authority must have the option to agree to this. Stalling development with unviable affordable housing requirements serves no purpose. Stalled development brings no local benefit to anybody. I hope that I can reassure the noble Lord that this clause does not encourage applications to remove all affordable housing but looks to ensure that viable applications are agreed to enable development to proceed.

Amendments 55BB and 55BD propose a review of affordable housing after two years where land value has increased. These amendments aim to put in place primary legislation incentives to ensure that developers build their schemes. They look to allow local authorities some control where obligations have not been delivered within two years. The drafting of Clause 6 does not prevent local authorities agreeing a mechanism with developers to increase obligations should markets improve. I am aware that this is the practice in many local authorities where obligations are “staircased” according to market conditions.

We will be clear in guidance on the options open to local authorities, and I urge that this be allowed to be negotiated locally, according to local circumstances. I do not agree that a fixed period for review in primary legislation would be helpful. I hope that the noble Lord will now think that the clauses are helpful.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for her response. I would like to read the record on the issue between first and second applications, but I think that I have understood the point being made. I will take this opportunity to ask again for a response with respect to the equality impact assessment, which runs through all these groups. It cropped up earlier, and I do not think that we have had a response.

I accept that there is always an opportunity to negotiate an improvement in affordable housing numbers. However, it is the extent to which, under the provisions, the local authority has a right to drive that, just as the local authority has an obligation under these provisions when lack of economic viability suggests that these affordable housing numbers are too great. If that is the analysis, the local authority clearly must do something to modify that in a downward direction. However, where land values have increased, why on earth does it not have the right to reciprocal arrangements and to obtain increased affordable housing? I accept that one can always make these arrangements through negotiations and agreement. However, we are looking for something more positive to balance the other side of the coin. Otherwise, in the words of the noble Lord, Lord Best, this is a one-way bet for developers. Having said all that, does the Minister have any more news on the impact assessment?

[Baroness Hanham]

I enjoy Committee; there is always this bobbing up and down. It seems inconceivable that developers would want to renegotiate affordable housing at the first chance, on the basis that it might end up going up. They must produce a viability assessment to prove that it has gone down. If the assessment does not prove that, they go back to the original number. If they then rethink and decide to have another go with the second application, at that stage, if the local authority assesses that things have improved a lot it can require an increase in the amount of affordable housing. From a developer’s point of view, it is therefore a bit of a gamble to come back a second time. We suspect that it is better to stick to the original commitment and to get on with it. Regarding the equality impact assessment, I apologise. It will be available on Report, and I will see that the noble Lord gets a copy as soon as possible.

[Lord McKenzie of Luton]

I beg leave to withdraw the amendment.

Amendment 55AB withdrawn.

Amendment 55AC

Moved by

[Lord Tope]

55AC: Clause 6, page 6, line 15, at end insert—
“(2A) An authority can only make a determination in accordance with subsection (3)(a) if it is satisfied, having regard to the development plan, that modifications to planning obligations other than the affordable housing requirements affecting the development or a reduction in the level of the community infrastructure levy payable would not be more appropriate.”

[Lord Tope]

My Lords, Amendment 55AC is in my name and that of my noble friend Lord Shipley. The intention of the amendment is to ensure consideration of all planning obligation costs, including possibly the cost of the community infrastructure levy.

The concentration of this clause solely on affordable housing has understandably caused a good deal of concern—which I am certain was not the intention—that in some way the Government are downgrading the importance of affordable housing and their commitment to providing it. I know that that is not the case. Nevertheless, that impression is inevitably given when a piece of legislation refers to only one aspect of a Section 106 agreement. The provision of affordable housing is often a very important part of a Section 106 agreement, but it is rarely the only part. There are many other aspects of such an agreement, such as contribution to transport and transport infrastructure, or to education in the local area, and the community infrastructure levy itself. Therefore, if consideration is to be given to the viability of a Section 106 agreement, surely it should take into account all those matters, not just one of them.

The purpose of this amendment is to ensure that all aspects contributing to the viability or otherwise of a Section 106 agreement are considered. Other aspects of it may be varied, not necessarily and certainly not only the provision of affordable housing. That seems to be a fair and equitable way of recognising that economic conditions have changed since the Section 106 agreement was agreed, and of finding the best and most equitable way of varying it, without necessarily focusing solely or even at all on affordable housing. I beg to move.

[Lord McKenzie of Luton]

My Lords, our Amendments 55AD, 55AE and 55CA are in this group. Amendment 55AD touches on the basis on which a local authority views economic viability. It requires the local authority to proceed to determination of the modified requirements if it assesses that the affordable housing requirement is the sole reason that the development is not economically viable. We will come on to discuss viability and how it is to be determined, but the reality under such a determination is likely to be that a number of factors influence economic viability. One problem with this clause is that it can lead to adjustment only of the affordable housing obligation, as we have discussed. This is unfair.

The Minister in the other place sought to differentiate affordable housing obligations from other Section 106 items on the basis that they were somehow discretionary and not in the same category as road improvements or school enhancements, the need for which might flow directly from the development. This gives scant regard to the validity of the local plan, and to the benefits of building sustainable mixed communities, by suggesting that somehow they are far less important than housing or having sufficient road capacity. Obviously, not having the benefit of proposed new Sections 106BA and 106BB does not mean that there are no other remedies for the developer. A negotiated arrangement with the local planning authority would be one, conducted without the Secretary of State’s powers looming large over the process.

Amendment 55AE requires that if a local planning authority determines to modify an affordable housing obligation, the modification must not materially conflict with the strategic policies of the development plan, and it must be the case that any other form of development that would accord with the development plan would not be economically viable. This is to emphasise the point that planning is not only about economic viability but should be anchored in the democratically derived local plan, with the intricate balances that this sometimes entails.

Amendment 55CA excludes from the definition of affordable housing that can be modified under the clause situations where an obligation would include land to be reserved and transferred to the local planning authority or RSL. The purpose of the amendment is to keep available land for affordable housing in the future. We support Amendment 55AC, moved by the noble Lord, Lord Tope, and Amendment 55BA, which would not preclude a modification being more onerous if there was a compensating, less onerous modification.

19:15

[Lord Greaves]

My Lords, the noble Lord, Lord McKenzie, briefly spoke to my Amendment 55BA, which states that,

“a modification under this subsection may have an effect that the obligation is more onerous in one aspect in return for being less onerous in another or others without becoming more onerous overall”.

It is part and parcel of the feeling throughout the amendments in this group that there ought to be more flexibility in the system, and that if there are Section 106 agreements in relation to a development, they should be looked at as a whole, on the lines drawn by my noble friend Lord Tope, rather than simply in relation to obligations for affordable housing.

Earlier, my noble friend the Minister said that the question of non-housing Section 106 agreements would be dealt with by regulation, and that housing was in the Bill because it was quicker to get it into effect; regulations covering non-housing Section 106 agreements would take longer. That does not answer the question of why the Government have not done both together. Common sense suggests that they could either both be in the Bill or both be covered by regulation, whichever is most convenient. I do not understand the lack of logic in doing them separately.

Perhaps the Minister will tell me—I am not clear on this—whether the regulations for non-housing Section 106 agreements will be seen in the same light as those in the Bill. In other words, will developers be given a right to appeal against a local authority that refuses, or does not want, to relieve them of the obligation? Will the same sort of regime apply under the non-housing regulations, or will they simply state that there is an opportunity to ask the authority to look again at development plans, which of course exists at the moment? It would be interesting to know what the Government are intending.

Common sense suggests that in some circumstances it might be better to look at non-housing obligations. For example, if there is a requirement to produce a park or a play area on the edge of a development or as part of the development, for some reason that may become impractical, or it could be thought in the light of viability studies that it is not absolutely essential, but that it is a less undesirable penalty to incur than having no or less affordable housing. There might be a situation in which a Section 106 agreement required a contribution to a local bus service. The way that local bus services are going at the moment, with some county councils cutting subsidies, by the time the estate is built, the bus service might not exist. It might be that that would be an appropriate let-off for the developer. Flexibility is a good idea.

It seemed to me that some noble Lords speaking in this debate were referring to a different world from that in which some of us are trying to make the best of things. In the case of new housing developments—greenfield housing developments in my part of the world—when planning applications come in, the local authority in general does not ask for affordable housing as part of the development, because an affordable housing requirement would very quickly make that development unviable. That is a fact of life. Local authorities in my part of the world—we will debate an amendment on this later—are finding it very difficult to set up a CIL regime, because imposing CIL on developments would make them unviable. Therefore, none of this applies if development is required or is thought to be reasonable.

Coming back to the point I raised earlier in an exchange with the noble Lord, Lord Beecham, what is a local authority supposed to do when it owns a brownfield site where housing or industry has been recently cleared and the site flattened and made reasonable, when development on that site for housing for sale or rent is simply not viable in present conditions, even if the local authority has put the land into the equation for free? It is simply not viable to develop given the current equation between local development costs and local house prices. The intention was that there would be a degree of gap funding to cover this; it was assured through the housing market renewal scheme, which has now been stopped. There is no gap funding.

What do the Government expect us to do in those circumstances when development of a perfectly good vacant site—for example, on the edge of a small town with wonderful views across Pendle Hill—is nevertheless not economically viable, so development cannot and will not take place? Somebody somewhere has to provide some gap funding to allow that development to take place if an area such as that is going to contribute to the Government’s aims of more housing. That is a slight variation on this amendment but it is a point that needs to be made and I will keep making it time and again because it is a question that nobody seems to be facing up to at the moment.

[Baroness Hanham]

My Lords, I shall start by trying to answer the points made by the noble Lord, Lord Greaves, because from what he says he will come back to them again. As I understand it, these sites are unviable but are not included within a Section 106 agreement; they are outside that.

[Lord Greaves]

The sites are not viable on a commercial basis. It is not proposed to be affordable housing, it is proposed to be commercial housing sold at the market price in the local housing market. It is not possible to build houses in those locations that will sell for a price that will pay for the development. An organisation can build for virtually no profit but it is still not viable.

[Baroness Hanham]

For the moment I am going to say to the noble Lord that it is not quite relevant to this amendment but I would like to consider it further and perhaps come back to him at a later stage.

Clause 6 introduces a fast-track application and appeal process to ensure that quick decisions can be made on stalled sites. These amendments would undermine this simplicity and add complexity, for very little benefit. Amendments 55AC and 55AE seek to bring into the application process consideration of the development plan and strategic policies contained in it. The development plan will already have been taken into account when the decision to grant planning permission was first made and the development plan will presumably be the same at this stage as it was then. I am aware that local planning policies may include policies for the delivery of affordable housing to meet local needs. It is usual practice to apply these policies in the context of individual site viability. The effect of this clause is to help deliver those policies by bringing forward viable development. It does not require a revisiting of the local plan.

Amendment 55AE seeks also to require an assessment of whether an alternative form of development would be economically viable. This would tie the process into lengthy consideration of alternative schemes. The effect of this amendment would be to establish a complex and lengthy process and clearly act as a deterrent to developers. Similarly, Amendment 55AC seeks to prevent a determination to reduce affordable housing requirements if modifications to other planning obligations would be more appropriate. There is nothing to stop the local authority agreeing to vary any obligation on a voluntary basis, as has been said a number of times this evening. The authority could negotiate with the developer to alter the Section 106 agreement outside the process of this legislation if that would be beneficial to both parties. The purpose of Clause 6 is to provide a quick, targeted review process based on viability related to affordable housing only. The imminent regulation change, which provides for a full review of Section 106 agreements in pre-April 2010 obligations, will enable these older agreements to be reviewed across the piece.

I do not think it helpful to bring community infrastructure levy payments into this consideration. The community infrastructure levy has been introduced to provide a non-negotiable levy that is up front and predictable, and set at the local level in accordance with local viability. Local authorities do not have a general discretion to waive or reduce community infrastructure levy payments. The regulations make provision for exceptional circumstances relief but this is subject to strict criteria.

Amendment 55AD seeks to require that the authority must assess the affordable housing requirement to be the sole reason for the site being economically unviable before it modifies the requirement. This amendment is not necessary. The current drafting requires that if the affordable housing requirement means that the site is unviable, the council must vary the obligation. The applicant will have to present evidence to the authority to demonstrate this. The local authority will have regard to this evidence and have the opportunity to prepare its own evidence to justify any decision.

Affordable housing often comprises the largest single contribution on residential schemes, which is why we have focused there. Research from 2007 and 2008 found that about 50% of all planning obligations are for affordable housing. The local authority and the developer are free to renegotiate any aspect of a Section 106 agreement on a voluntary basis at any time. If an obligation which is not affordable housing is causing the site to be unviable, both parties are free to negotiate around that item.

Amendment 55CA would allow land transferred at nil cost to be excluded from the assessment of viability. I understand the importance that land transfers of this type play in creating mixed communities. This is particularly important in high-value areas. I can understand the temptation to think that we should exclude land transfers from the assessment of economic viability. However, the value of this land can be a significant cost to house builders. It is right that the value of this obligation is considered as part of the overall economic viability of the scheme. If the value of that land transfer is causing the site to be unviable, it should be adjusted; this does not necessarily mean removed completely but adjusted to suit economic conditions. Only where it is no longer viable to transfer the land at nil cost will an adjustment be made. Our policy for mixed communities will be upheld and delivered in a realistic and viable way by these clauses. With these assurances, I hope that the noble Lord will withdraw his amendment.

[Lord Tope]

I am grateful to the Minister for her reply. I am still struggling to fully understand why it is focused solely on affordable housing. Of course, local authorities and developers can agree voluntarily to vary any of the other planning obligations. They can agree voluntarily to vary the affordable housing obligation. We know that such negotiations are going on all over the country and we hope, believe and expect that the vast majority will be varied and agreement reached voluntarily without having to use this appeal mechanism.

However, I take it from what the Minister has said that what gets appealed to PINS—the Planning Inspectorate—can be only the affordable aspect of it and not any of the other planning obligations. For instance, would it be possible for the Planning Inspectorate to agree or determine that some other aspect of the planning obligation could be varied or reduced in order to make the scheme viable, but to retain all or the greater part of the affordable housing obligation? It is that element that is troubling us and to which I suspect we may return at a later stage, but in the absence of any further illumination on the point—

19:29

[Lord McKenzie of Luton]

I wish to raise a number of points and to refer to the matter that the noble Lord has raised. I thought that the current rule outside these new provisions for affordable housing is that if a Section 106 agreement is not implemented within five years, there is a right of appeal to the Secretary of State. I am not sure whether the same criteria would have to apply to the Secretary of State in making a determination of that appeal, but I thought that it was that process which has been the subject of the parallel consultation. For example, it had a cut-off point of April 2010. That may be wrong and no doubt the Minister or her officials in the Box will tell me if that is the case. However, I thought that that was the issue.

I want to come back on the issue of the local plan and development policies. No one is suggesting that we need to revisit the local plan, but simply to ensure that any change to the affordable housing requirement as a result of these provisions is still consistent with the plan. That does not mean revisiting it.

Perhaps I may also come back on the issue of whether affordable housing is the sole reason for a development not being economically viable. Are we saying that if two reasons of broadly the same magnitude make a development not viable, nevertheless it is right and just that it is the affordable housing that is changed as a result? That does not seem to be particularly logical or fair. If the affordable housing component is the sole reason why a development is not viable, one can see how the logic flows for what the clause provides. However, when it is not the sole reason, why is it that only the affordable housing has to take the hit?

[Baroness Hanham]

My Lords, I have tried to say several times during the course of our debate that this clause relates only to affordable housing. It relates to the developer saying that what is holding things up and why he is not developing is that the affordable housing aspect, for whatever reason, is making it unviable. Any other aspect of Section 106 can be negotiated with the local authority. A developer does not have to do it. It is absolutely only the affordable housing element.

[Lord McKenzie of Luton]

Perhaps I may press the point. I understand that the clause is focused only on affordable housing and changes and modifications to it, but if the reality is that the assessment of viability shows that affordable housing and other things are making the project not viable, you will nevertheless look to the affordable housing component as that which has to take the hit and bear the adjustment. I accept that everything else can be negotiated under the current provisions, but if it is not solely the affordable housing component, why is it that, to the exclusion of everything else in this clause, the affordable housing component is focused on to bear the consequences of the modification?

[Baroness Hanham]

It is because that is what this clause is all about. It concerns situations where it is believed that affordable housing is causing the block. Every other aspect of Section 106 can be negotiated voluntarily. Under Section 106 in its totality consideration can be given to other aspects, but it is only where affordable housing is the only aspect that is said to be causing the lack of viability that this clause will impinge.

[Lord McKenzie of Luton]

I think that that was a gem for which I am grateful to the Minister. I think she said that if the affordable housing component is the sole reason for it not being viable, that is when the clause operates. I think that that is a different position from that which I thought we debated earlier. Perhaps we should read the record because no doubt we shall come back to the issue on Report.

[Baroness Hanham]

My Lords, unless I have been deluding myself, I thought that that was what I had been saying the whole way through our debate this evening. We will check Hansard and make it clear that that is the situation. I will write to the noble Lord if I have said anything recently which does not bear out what I said before.

[Lord McKenzie of Luton]

I am most grateful to the Minister and, in the circumstances, I beg leave to withdraw the amendment.

[Lord Tope]

My Lords, I think that it will be me who begs leave to withdraw this time, and I was about to do that when the noble Lord intervened some minutes ago. It has been an interesting debate. I cannot help feeling that we have gone around in circles a little, but that is not unknown. I am equally certain that we will return to this issue at a later stage. In the mean time, I beg leave to withdraw the amendment.

Amendment 55AC withdrawn.

Amendments 55AD to 55BB not moved.

[Baroness Stowell of Beeston]

My Lords, before I move that the House be resumed, perhaps I may give some guidance to those involved in the next debate. Two noble Lords have scratched from the speakers list so we will go from the noble Viscount, Lord Montgomery of Alamein, straight to the noble Lord, Lord Davies of Oldham. With the reduction in the number of speakers, it is my pleasure to offer a little extra time for noble Lords to speak. With the exception of the noble Lord, Lord Palmer, and my noble friend the Minister, who will continue to have 10 minutes and 12 minutes respectively, all other speeches are now limited to four minutes. I shall be handing over shortly to my noble friend Lord Attlee and I know that he will assist the House by making sure that all noble Lords stick to four minutes. I beg to move that the House do now resume and, in doing so, I suggest that the Committee stage begin again not before 8.37 pm.

House resumed.

Air Passenger Duty

Monday 28th January 2013 Lords Chamber

Question for Short Debate

19:37

Tabled By

[Lord Palmer]

To ask Her Majesty’s Government what plans they have for the future of Air Passenger Duty.

[Lord Palmer]

My Lords, I am grateful for the opportunity to raise an issue that I know vexes many in this House and puts significant burdens both on British business and ordinary families. I must declare my interests. I open my home in Berwickshire to the public and I am a residual beneficiary of a banana plantation on St Lucia.

Air passenger duty has become an increasingly contentious issue over recent years and it is worth reflecting on the reasons. When it was first introduced back in 1994, the maximum that any passenger paid in air passenger taxes on departing a UK airport was just £10, and for those flying short haul it was half that. But, as is often the way with these things, once a tax has been established it is almost impossible for the Treasury not to resist the temptation to find ways to increase it—and what a truly astounding increase we have seen. From that modest beginning, the tax is now generating almost £3 billion each year for the Treasury and costing passengers who pay the highest rate more than £180 in tax alone for a single journey.

Some of the most dramatic increases have been introduced in the past decade. In 2006, a family of four flying to Florida paid £80 in APD—still a significant additional cost on a summer vacation but nothing compared with the £260 they now pay to fly to North America. That is an increase of 225% in just six years. Following the Chancellor’s Autumn Statement, we now have confirmation that APD is set to rise again in April. I offer this example because it illustrates just how rapid the increases have been and explains why there is a growing concern about its impact not just on families, but perhaps more importantly, on the UK’s business community. Indeed, there is a growing body of evidence that points to the damage the tax is having on jobs, growth and in various regions of the economy with various estimates, for example, that more than 90,000 additional jobs could be created were it to be scrapped.

It is tempting to say that the tax should be significantly scaled down. After all, we levy the highest APD anywhere in the world. We are one of only six EU countries to levy APD, the others having recognised the damage such a tax inflicts on economic growth.

As an island nation we depend on inbound air travel to carry three-quarters of overseas tourists into the United Kingdom. Yet, the World Economic Forum’s tourism competitiveness report ranked the UK 134th out of 138 countries for air ticket taxes and airport charges.

I could go on, but today I am merely asking not for the abolition of APD, not for a reduction of APD; not even for it to be frozen. I am simply asking Her Majesty’s Government to review the tax: a proper macroeconomic impact assessment into APD across the whole of the UK economy. That is all. No spending commitment implied, just good old-fashioned evidence-based policy-making.

The reason for this is quite simple: there is a growing body of evidence that points to the profoundly damaging impact of APD on our economy. Among the most compelling research that I have seen includes data from the British Chambers of Commerce which estimates that were APD to be increased by 5% in real terms every year—admittedly less than this year’s rise—there could be a loss to the economy of £3 billion by 2020. They add that this effect could reach £100 billion by 2030.

The World Travel and Tourism Council has estimated that removing APD altogether would result in an additional 91,000 British jobs being created and £4.2 billion being added to the economy in just 12 months.

Just as compelling is the documented damage that we know the tax is already having on airports and airlines across the UK. To give just one example: the BCC in a recent report states that, following the doubling of APD in 2007 and its subsequent rises, Liverpool’s John Lennon Airport has lost six domestic, five European and two long-haul services.

I strongly believe that Her Majesty's Government must take this grave situation into account. It is no wonder that this tax—which started out so modestly—is now one of the most hated indirect taxes that the Government levy, along with capital gains tax and inheritance tax. Indeed, part of the reason I wanted to raise this issue tonight is precisely because of the growing public anger at the tax, with which colleagues in the other place will be much more familiar

Last summer, an incredible 200,000 people wrote to their local MP asking for the Treasury to review the tax—as I am asking now. In addition to this, 100 MPs have publicly stated their support for a comprehensive Treasury review. The APPG on Aviation has also called for a review. Even senior members of the party, such as one of its former leaders, have joined the growing chorus of voices who back this. In other words, this is not the preserve of a few low-tax puritans—it has gained genuine cross-party support.

As expected, this proposal has been supported and championed from the tourism and aviation industry. Indeed, A Fair Tax on Flying, whose research and tireless campaigning have helped bring this issue to the attention of policymakers and the media alike, deserves to be praised for its work. This tide of support is irresistible—or so one would think. The Government have been—I know that the noble Lord, Lord Newby, likes his cricket—playing a rather repetitive game of forward defensive on this, if I am being kind, or stonewalling, if I am being a little more honest.

In almost all their responses to the request for a review—both to constituents and to MPs—the Treasury has, I am afraid, claimed that an impact assessment has already been carried out. Its response to the honourable Member for Crawley on 19 October is typical. He asked what research the Treasury has conducted to assess the impact of APD on the economy. He was told by the honourable Member for Bromsgrove, a Treasury Minister:

“Given that we recently completed a comprehensive consultation on the subject, we have no plans for further review”.—[Official Report, Commons, 19/10/12; col. 536W.]

There are plenty of other similar responses to very similar inquiries, yet there has never been such a consultation. It is a great phantom that has been created by the Treasury—a wonderful piece of misdirection of which the illusionist Derren Brown would be proud.

The fact is that the oft-cited 2011 consultation was to look at the merits of changing the banding of APD—a completely separate issue—and did absolutely nothing to review the macroeconomic impact of the tax. Indeed, even when they had this opportunity, the Government failed to address the gross unfairness of the banding structure. It is quite ridiculous that APD to the Caribbean—which is 6,000 miles from London—should be considerably more expensive than APD levied on passengers travelling to Hawaii, which is 10,000 miles from the United Kingdom.

I implore the Minister not to play the forward defensive on this. Perhaps he might consider playing to the stands and pavilion and giving the 200,000 constituents what they have asked for: a comprehensive review of APD.

On a more positive note, I am in fact supportive of one of the Government's increases in APD to finally, at long last, levy the tax on private jets—an omission that was an affront to reason and fairness, and was long overdue. It has taken 19 years since the introduction of APD for this change to be adopted. Can the Minister assure us today we will not have to wait another 19 years before the Government undertake a review of APD?

All the evidence suggests that our economy and the UK’s international competitiveness are being strangled by APD. If we want to send the message that the UK is open for business then I can think of no more damaging or perverse policies than year-on-year rises in this tax, making it prohibitively expensive for inbound tourists and overseas business travellers to come to Britain to spend their money and to do business —precisely the things we surely need to help grow our economy.

I urge the Minister to make representations to the Chancellor ahead of this year’s Budget. Surely a wise Government would accept that sometimes having money in the Treasury’s coffers instead of circulating around the economy has a damaging overall impact. A really comprehensive review would at least provide us with that evidence.

I hope that the noble Lord can offer us more today than his Treasury colleagues in the other place have been able to do thus far, and I look forward to his response.

19:47

[Lord Howell of Guildford]

My Lords, I warmly commend the noble Lord, Lord Palmer, for promoting this debate, because there can be very little doubt at all that the UK air passenger duty at its present rate and in its present form is a damaging tax measure. It is also a tax of fantastic complexity, with pages of detail from HMRC as to which flights are liable, who is a chargeable passenger, how long between connections and so on. Heaven knows how much it truly costs to administer.

The very high levels are the real problem. Six European countries, as the noble Lord, Lord Palmer, has reminded us, levy a form of APD, but the UK level is double that of the next highest, which is Germany, and very probably the highest in the world. We have probably reached the stage where the damage to our national economy well exceeds the gains to the revenue.

The present banding discriminates directly against our Caribbean island friends, to many of whom we owe a special responsibility over and above our general duty as a richer nation to maintain our traditional concern for smaller states and their welfare. It creates a plethora of mad anomalies. First, it drives long-distance passengers from the UK to start from Paris or Amsterdam rather than London. Secondly, when I visited Glasgow last year, to view its dazzling and well on-time preparations for the Commonwealth Games in 2014, I was told that many of the tens of thousands of visitors from all over the world will fly into and out of Belfast and then hop across to Glasgow rather than flying to and from Glasgow direct. The reason is that Northern Ireland is exempt from the APD. Lucky Northern Ireland, but poor old Glasgow, considering that it has made such superb efforts to be the ideal host to the Games, which I hope it will be once visitors get there.

This is Treasury obfuscation and short-termism at its worst. Some claim that the APD is all about curbing aviation carbon emissions. We all know, and the latest BP energy projections confirm, that it will be China and India’s performance with their vast increases in coal burning which will determine whether we achieve the CO₂ targets we want to see. I doubt whether APD will make a smidgeon of difference in combating global warming or climate volatility.

The only interest I have to declare in this matter is that I am chair of the Council of Commonwealth Societies and therefore very much aware of the vital need for this country to keep friends around the world, large and small. I have no hesitation in saying, after serving for two and a half years as Commonwealth Minister, that APD in its current inflated form is working against our friends, against our foreign policy goals and against the national interest. The alleged revenue loss from minor adjustments to make it less unfair will be far exceeded by the gains to the UK economy as a whole. It was meant to be a modest tax; it is now a massive tax. The damage caused by APD has increased, is increasing and ought to be curtailed.

19:50

[Lord Monks]

My Lords, I rise to add my voice to the concerns that have already been expressed by other noble Lords in this debate. In doing so, I declare an interest as president of the British Airline Pilots Association. There can be very little doubt that the APD is an important revenue raiser for the Chancellor and substituting it would be an extremely difficult task. However, the rapid increases that have taken place in recent years make the UK stick out like a sore thumb, in the European airspace in particular, but rather more widely even than that. At present levels, it is unfair and regressive. It is one-tenth of the French level, and the Dutch have abolished this kind of duty at Schiphol, which is perhaps the major competitor to Heathrow. As other noble Lords have said, to fly to Australia via Amsterdam, which is a very viable option for much of provincial Britain, could mean a saving of about £85 in tourist class and more in the premium classes.

Given the other pressures that British aviation is under—particularly the shortage of capacity at Heathrow, as confirmed again by the recent snow, which demonstrates that the airport is always operating at the margin—we are adding further, self-inflicted damage to ourselves with this tax and we risk losing ground against major competitors. Airlines are being disadvantaged, and workers and employees of those airlines are also at risk. I understand that the Flybe redundancies that were announced just last week are being put down to the level of this duty and its effect on the business, which has one or two more marginal routes than perhaps some of the bigger airlines. I also understand that AirAsia recently abandoned the Kuala Lumpur to Gatwick route, citing the level of air passenger duty, as well it might. With those figures, it is difficult to be sceptical.

Civil aviation is a big British success story and we need big British success stories in the UK. Hobbling the industry in the way that this tax does is very unfortunate, and I strongly support the calls that are being made by noble Lords for a review of the tax. I do not think it has a major environmental impact, for reasons already expressed, and the anomalies make it a very difficult tax to defend, except as a valuable source of revenue. Justice demands that this tax is reviewed and that we find other sources of revenue, perhaps from all those whom the Prime Minister accused of aggressive tax avoidance, last week in Davos.

19:54

[Lord Foulkes of Cumnock]

My Lords, along with other noble Lords, including the admirable noble Lord, Lord Palmer, I have had representations on the general issue, calling APD a tax on exports, on business, on inbound tourism and on families, and pointing out that it is the highest air passenger tax in the world. However, I want to concentrate on, and say just a few words about, a particular anomaly and to suggest a solution to the Minister.

First, I declare a non-pecuniary interest as president of the Caribbean Council, which is not as exotic as the banana plantation of the noble Lord, Lord Palmer. The Caribbean Council meets regularly with Caribbean high commissioners, and we recently met many of the Tourism Ministers from the Caribbean when they were in London. The unfairness of the APD in general, and the Caribbean anomaly in particular, is top of the agenda of all those meetings. The four bands, A to D, which have been described by the noble Lord, Lord Palmer, are measured by the distance to the capital of the country concerned, so because California is nearer to Washington, the capital of the US, it is cheaper in APD terms than the Caribbean, which is in the dearer band C. Travel to the Caribbean is disproportionately costly, yet the Caribbean is the most tourist-dependent region in the world; in Antigua and Barbuda, for example, 74% of their GNP comes from tourism. The high APD has resulted in British tourists choosing not to visit the Caribbean. Between 2008 and 2011, there was more than a 10% decrease in UK-Caribbean air traffic, in spite of a general increase of 1% in air traffic generally.

One of the groups most affected is the Caribbean diaspora. Agencies have suggested, for example, that the visiting friends and relatives, or VFR, market has been particularly hard hit. That is worrying. The Government have in fact admitted that the banding is arbitrary. The Chancellor—I am sure the noble Lord, Lord Howell, will use all the influence he can in relation to this—said in his 2011 Budget that he was,

“consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California”.—[Official Report, Commons, 23/3/11; col. 963.]

However, by November 2011, the willingness to tackle the anomaly had petered out.

To help the Minister—noble Lords know that I am always keen to help the Government when I can—the Caribbean Council proposal is to reband the Caribbean from band C into band B by designating Bermuda as the capital of the Caribbean, for APD purposes only. There is no reason why that cannot be done; it can be done technically and it has been suggested to the Government. The cost to the Government would be just over £18 million out of a total projected revenue of £3 billion. The benefit to the Caribbean and the resulting benefit to the United Kingdom Government would be enormous. In conclusion, I ask the Minister whether he will say in his reply or give us a pledge—I am not expecting an answer today—that he will take this away, look at it sympathetically, discuss it with the Chancellor, remind him of his pledge in the Budget in 2011 and come back to the House with, I hope, a positive response.

19:57

[Lord Lee of Trafford]

My Lords, first, I congratulate the noble Lord, Lord Palmer, on securing this debate. I want to focus my brief remarks on the deleterious effect that APD has on UK tourism. I declare an interest as the chairman of the Association of Leading Visitor Attractions. Tourism is our fifth-largest industry and arguably the number one industry in more parliamentary constituencies than any other single industry. In an Oral Question on 12 November last year, I pointed out that,

“a potential visitor from China must fill in a 30-page visa application form … and find £650 for a family of four in visa fees and air passenger duty. Is it therefore surprising that mainland Europe gets four times as many visitors from China as we do?”.—[Official Report, 12/11/12; col. 1273.]

Thankfully, there has been some improvement on the visa application front, but no give on the APD front.

What is the point of the Government putting an additional £22 million into the GREAT campaign, announced by the Chancellor of the Exchequer in his Autumn Statement, if this is countered by a further rise in APD on long flights and in premium cabins? Since 2007, APD increases have vastly outpaced inflation over the same period, which was 17%. Non-economy visitors in band C from China or India—potentially wealthy spenders—have seen APD increase by no less than 305%. From Australia, it is even worse, with an increase of 360%. In overall terms, the UK levies the highest level of APD of any country in the world. Why is that? Britain’s aviation tax is now so high that the Treasury will collect more than twice as much in passenger taxes in 2012—£2.5 billion—than the total of all other European countries combined, which is £1.2 billion.

Other countries have realised the error of deterring passengers. Belgium, Denmark, the Netherlands and Ireland have all introduced APD charges lower than those now being applied in the UK and subsequently reduced or abandoned them, due to the adverse impact on their inbound tourism. In 2011, the Irish Government acknowledged the negative impact of APD on their economy and removed it to stimulate tourism revenue. Happily, our Government woke up the following year, removing APD from flights from Belfast when it was realised that it made those flights uncompetitive, compared with flights from Dublin.

Of course, we all appreciate that tax revenues must be generated, but why clobber tourism, a great world growth industry? Tourism and hospitality have the near-unique distinction of offering rising job opportunities across the range, from the skilled to the unskilled. It is surely madness to stunt their growth by excessive APD. The Manchester Airports Group tells us that in 2010 AirAsia X dropped plans for a Manchester-Kuala Lumpur service in favour of one from Paris Orly, purely because of the high APD. As the noble Lord, Lord Palmer, said in his opening speech, is it not high time that the Treasury instigated a full economic impact assessment of APD, which has not been done for 19 years?

20:00

[Lord Fowler]

My Lords, I congratulate the noble Lord, Lord Palmer, on promoting this debate and on his excellent speech. I make one point, on the impact that air passenger duty has on jobs. All parties are agreed that it is a national priority to bring more people into employment, but we seem to be set on a policy with APD that destroys jobs, not creates them. I declare an interest as a non-executive director of ABTA, but also a past interest as Secretary of State for Employment. When I did that job, tourism was in the brief. My noble friend Lord Lee, who has just spoken, was my excellent Tourism Minister. The reason that tourism was in the Department of Employment was that it had one of the greatest potentials for creating jobs—and still does, particularly for young people.

Inbound tourism creates jobs, but so too, and this is often forgotten, does outbound tourism—the travel companies in the high street, the big internet companies and the aviation industry that is the transport carrier. We would be mad to turn our back on this source of employment. Yet that is precisely what we are doing. By piling more cost on the traveller, we deter people from coming to this country and at the same time price out many people who want to take a holiday abroad. We also hit the aviation industry and business itself. We seem to forget that we are in a competitive international market. There is an increasing demand for travel, which will come from countries such as China, Brazil and India, but it would be all too easy to price ourselves out of the market and lose jobs as a result.

Britain currently has the highest air taxation of all European Union and G20 countries. Britain’s aviation tax is now so high that the Treasury will collect more than twice as much in passenger taxes in 2012 than the total of all other European countries combined. What is interesting is that in 2009 the Netherlands followed Belgium by abandoning its equivalent to APD because, although it raised the equivalent of £266 million in one year, the Dutch calculated that the loss to the wider economy from the tax was more than £950 million. So I entirely agree with all those in this debate who have argued for an independent economic assessment of APD. My view is also that this needs to be done quickly, before more damage is done and more jobs are lost.

20:04

[Lord Morris of Handsworth]

My Lords, on behalf of the humble and proud people of the Caribbean region, I thank the noble Lord, Lord Palmer, for securing this important debate. As someone born in Jamaica, I have more than a passing interest in this debate, which I declare. I will therefore address my remarks not to the APD tax in general, but to its specific impact on the Caribbean region. However, let me make it clear from the outset that the Governments and people of the Caribbean region do not seek favours from the Government. All they seek is fairness. As we have heard, APD was introduced in 1994. It was argued then that the duty would make a contribution to the overall cost of carbon emissions. It was a green tax. So let me say why the current banding system is unfair and offer a few words about its impact on the economies of the Caribbean.

As we have heard, the tax was originally introduced as a flat-rate charge for flights, but in 2009 it was changed to a four-band system, calculated on the distance between the capital city of the country of departure and the capital city of the country of destination. Let me remind the House of the anomalies of the banding system, which have already been given in this debate. Caribbean capitals, which are just over 4,000 miles from London, are in band C. The capital of the USA and London are less than 4,000 miles apart; consequently, every city in the United States is in band B. That includes Los Angeles, which is more than 5,300 miles from London and 1,300 miles further than any Caribbean-location flight—hardly a green tax.

The outcome of the rebanding means that the APD cost for a family of four flying to the Caribbean is £324. As we have already heard, for an equivalent family flying to the US it is £260. This unfairness will get worse when the inflationary increases announced in the 2012 Budget are introduced. They will not be applied evenly, which emphasises that the APD structure has no logic and discriminates against long-haul flights, particularly to the Caribbean region. The Governments of the Caribbean do not seek to challenge the right of the UK Government to impose this tax. What they seek is an equitable structure, a level playing field and a fair application of the tax.

It cannot be fair that the banding system discriminates against the Caribbean, the most tourism-dependent region in the world. It is not fair that the APD banding system favours the United States, which is a competitor destination. It cannot be fair that the UK takes no account of the impact that the tax has on the Caribbean economies which are still in transition towards being service-based economies. It is not fair, as suggested, that the APD will now be increased annually by the rate of inflation. Let us be clear: this is not a tax without victims. Data from the CAA make it clear that there was a 10.7% decrease in passenger traffic between the UK and countries in the Caribbean region. This is having a devastating effect on local economies, but it is not just having an effect abroad; it is having an effect here, at home, particularly among people in the aviation industry.

No wonder, British Airways has reduced its flights to the Caribbean due to APD and has switched its holiday focus from the Caribbean to the United States. The impact of APD can be felt by small travel operators up and down the high streets in London, Birmingham, Manchester and many of our cities in the UK. Above all, the APD is now becoming a barrier to inward investment in the Caribbean. No one intended that.

When the policies of one country knowingly damage the economy of another, it becomes a question not just of economics but of morality. That is why the review being asked for in this debate is largely supported in the Caribbean and elsewhere. Lest we forget, the Caribbean countries are not seeking favours; they seek only fairness.

20:10

[Baroness Gibson of Market Rasen]

I thank the noble Lord, Lord Palmer, for instigating this important and timely debate. I declare my interests: I am a member of both the Air League Council and the Air Cadet Council, both of which obviously have an interest in this issue.

Air passenger duty affects every passenger travelling by air from a UK airport. It is a tax that we cannot avoid; it is imposed on us. As we have heard, it is a tax which causes considerable damage to the UK economy and which needs an urgent and thorough review.

I opposed the changes to APD introduced by the Labour Government and I oppose APD under this Government, who seem to be facing in two directions at the same time. There is little point in the Prime Minister saying that he wants more business investment in this country on the one hand and raising APD higher to make it more difficult for business on the other.

As the noble Lord, Lord Palmer, said, when APD was introduced in 1994, each travelling person paid £5 for a short-haul flight and £10 for travelling elsewhere. Passengers can now pay up to £184 on some long-haul flights. What an absolute nonsense.

I am not economist, but even I can see that, at a time when we should be doing all we can to encourage more foreign investment and increasing our efforts to encourage tourists to spend more in the UK, this tax is a barrier to both business and tourism. APD is the highest aviation tax in the European Union and among the G20 countries, thereby placing the UK at a direct disadvantage to its business competitors. Why can the Government not see this? Belgium, the Netherlands, Australia and Germany have all scrapped, or are in the process of scrapping, their own air travel levy. Why not the UK?

All that I have said so far has implications for employment in the aviation industry. A Fair Tax on Flying, a campaign group which consists of 40 leading travel organisations, including airlines, airports and trade associations, estimates that the aviation industry supports 963,000 UK jobs. Of those, 352,000 are directly supported by the sector, 344,000 are supported indirectly through the sector’s supply chain and 266,000 are supported by the spending of employees in the sector and its supply chain. The loss of such things as conference business, lost routes from our airports—both short-haul and long-haul—and loss of potential tourism because of APD mean the loss of employment for UK workers.

I support the call for an urgent review of the impact of APD on the UK economy. I support those in the other place and prominent organisations such as A Fair Tax on Flying in asking for a Treasury-led review. Organisations belonging to the campaign know what they are talking about, and I beg the Government to listen to them and to individuals who have written on these matters. How many more people will have to write before notice is taken? The Treasury has never sought fully to understand the impact of APD on economic growth, which speaks volumes. It is time for this anomaly to be rectified.

20:14

[Viscount Montgomery of Alamein]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Gibson, and I agree entirely with what she said. I thank my noble friend Lord Palmer for introducing this subject very fully and for making such a very cogent speech on it. I am afraid that I am going to join the chorus of opposition to this tax that has been revealed so far in this debate.

As has been pointed out by the noble Lords, Lord Morris and Lord Foulkes, most Caribbean islands live off tourism and earn foreign exchange by so doing. In fact, for some, it is their only foreign exchange earner. As things stand at the moment, it is cheaper to fly to Paris, Frankfurt or Amsterdam and change planes, thus avoiding the high tax in the UK. That has the effect of increasing emissions, which is contrary to EU directives on this subject, and causing further distress all round.

I suggest not only that this is an inefficient tax but that the best way to proceed would be to abolish it altogether, because, as has been said, it does not produce a great deal of revenue and causes a lot of irritation and hard work for the airlines. I therefore propose that the tax be abolished altogether.

20:15

[Lord Davies of Oldham]

My Lords, I congratulate the noble Lord, Lord Palmer, on securing this debate and on introducing it in a speech which covered all points at issue. Each subsequent contribution highlighted some of those points with dramatic and significant effect. I thought that I would have a little sympathy for the Minister if most speeches were critical of the position which presently obtains. I am afraid that I have to inform him that every speech has been in that category. When one is on the Front Bench, one always thinks that one may be in a little trouble if one glances over one’s shoulder and sees not a soul behind. It is even worse if, as on this occasion, two privy counsellors and members of former Conservative Cabinets join in the criticism.

The Minister has a case to answer and that case has been very effectively deployed. The other place has of course been greatly exercised over this matter in recent months, having responded to a 100,000-signature petition by holding a debate. Again, scarcely a contribution was made there which supported the APD in its present form. It was also pointed out—the Minister would not expect me to ignore this fact—that the coalition agreement and the manifestos of the two contributing parties indicated that they intended to reform radically this tax.

The Minister has to realise that he has a major task ahead. I will make the most obvious point, which is that there clearly needs to be a review of a tax in circumstances where such a ridiculous anomaly as the Caribbean anomaly obtains. Several noble Lords emphasised that point with great force. My noble friend Lord Foulkes fitted into the category of not bringing on this occasion problems for Conservative Ministers but solutions for them with regard to the Caribbean position. We should not underestimate the degree of concern that obtains on that point in all parts of the House. The noble Lord, Lord Morris, who is so familiar with the background of the Caribbean, emphasised how much this anomaly represented.

I hope that when the Minister replies to the debate he does not simply reiterate that matters will be considered. Let us have a review. The case has been established that this tax is not working now in the way in which it was first intended, and it has also become increasingly onerous over the past two years. I therefore urge the Minister to take on board the representations that have been made from all sides of the House that a proper review is necessary and urgent.

20:19

[Lord Newby]

My Lords, I join all other noble Lords in thanking the noble Lord, Lord Palmer, for securing this debate. I should perhaps declare a former interest as a former adviser to the Caribbean Banana Exporters Association. In addition, until I took this job, I was a regular traveller to the Caribbean in connection with the Sport for Life international educational programme, so I was a regular payer of APD to the Caribbean.

I will begin by acknowledging the important contribution that the aviation and tourism industries make to the economy. The United Kingdom’s aviation sector connects millions of consumers and businesses with international markets. The five airports that serve London offer at least weekly direct services to more than 360 destinations worldwide. That is more than Paris, Frankfurt or Amsterdam. Overall, the United Kingdom has the third-largest aviation network in the world, after the United States of America and China.

Tourism is our fifth-biggest industry and our third-highest export earner, worth around £116 billion to the economy, or roughly 9% of GDP. Despite the tough economic conditions, the UK’s tourism sector is growing at around 3% per year. As the noble Lord, Lord Lee, pointed out, we are seeking to promote tourism as part of the GREAT campaign—one of the most ambitious and far-reaching marketing campaigns ever undertaken by the UK. We have also, as he mentioned, made changes to the rules for Chinese visitors to make it easier for them to obtain visas for travelling to the UK.

Turning to APD itself, I would like to reiterate some of the history, which I know a number of noble Lords have already done to a certain extent. APD was introduced in 1994 as a pure revenue-raising tax. It was introduced in recognition of the fact that air travel was otherwise undertaxed compared to other sectors of the economy. Air travel is zero-rated for VAT, and the fuel used in air travel and in nearly all domestic flights is entirely free of tax. The initial rates of the duty were £5 for flights to destinations within the European Economic Area, and £10 for flights to other destinations.

In 2008, the previous Government announced a restructuring of APD, increasing the number of bands from two to four. The reason given was that this would improve the environmental signal given by the tax. As a result of that restructuring, the highest rate was increased to £170. These changes were enacted in the final Finance Act before the 2010 election.

In the period since the election, the Government have limited increases in air passenger duty to inflation only. During this time, rates have increased by only £1 for the majority of passengers. Budget 2012 set out rates from April 2013, which will also rise only by inflation. The real burden of the duty will therefore remain unchanged for at least a further year. Therefore, the fears of the BCC are, frankly, greatly exaggerated.

I will respond to the point made by the noble Lord, Lord Monks, that this is a regressive tax. This is not a regressive tax. In terms of its impact on deciles of income-earners, households in the highest decile pay more passenger duty as a proportion of their income than those in the bottom income decile. As the noble Lord, Lord Palmer, pointed out, to improve the fairness of the tax overall the Budget 2012 also confirmed the extension of air passenger duty to business jets from April this year.

Concern has been raised by virtually all speakers—I suspect it was every speaker—about the impact of APD on the competitiveness of the United Kingdom. There have been widespread calls for a cut in the level of the tax or for its abolition. The noble Lord, Lord Palmer, was kind enough to mention my interest in cricket. My boyhood cricketing hero was Geoffrey Boycott. I hope that the noble Lord will not be too disappointed if I proceed more in the manner of Boycott playing an innings on a troublesome Headingley wicket than Brian Lara at the Antigua Recreation Ground.

The Government’s view is that there can be a sustainable platform for economic growth only if we are willing to tackle our overspending. Demands for cuts in air passenger duty must therefore be balanced against the Government’s general revenue requirement and the need for a fair contribution from the sector towards reducing the deficit. Air passenger duty is forecast to raise about £2.9 billion in 2013-14. This revenue is essential if we are to maintain progress toward our goal of deficit reduction. If APD were reduced or abolished, other taxes would have to be increased or public expenditure cut by an equivalent amount.

The noble Lord, Lord Palmer, and many other noble Lords have asked the Treasury to undertake a study into the macroeconomic impact of air passenger duty. The Treasury keeps all taxes under review and considers them in the round. This is not the only tax that many people would like to see abolished. In fact, it is almost impossible to find a tax whose abolition would not be cheered to the rafters, so the fact that people would like this tax abolished is not in itself a good reason to abolish it. I am afraid that I must reiterate the context in which we are working. Our central goal as a Government remains tackling the fiscal deficit. This requires the aviation sector to make a fair contribution, which is what we believe APD does.

[Lord Morris of Handsworth]

The Caribbean Governments are not asking for the APD tax to be abolished. What they are asking for is equity of application.

[Lord Newby]

My Lords, the noble Lord, Lord Morris, anticipates me. I was just coming to the Caribbean but a number of noble Lords have called for the tax to be abolished tout court. There have been strong arguments—

[Lord Howell of Guildford]

We must have accuracy in this debate. I am aware of one calling for abolition; sensibly, none of the rest of us is calling for abolition. For the Minister to pin his arguments on the abolition plea alone really is to distort the debate and not to do justice to this House.

[Lord Newby]

My Lords, I was simply stating that I thought that several noble Lords—at least one—have called for abolition.

[Noble Lords]

One.

[Lord Newby]

Okay, one noble Lord has called for abolition. I am sorry if I exaggerated the opposition but it certainly felt as though a number of noble Lords were calling for the abolition of the tax.

On the Caribbean, there have been strong arguments presented tonight and over the years about the effect of APD there. I am aware of the strength of the arguments because in a former existence I made them myself. In response to these arguments, changes to the structure of APD were considered as part of the 2011 consultation. For a number of reasons, it proved much more difficult to do it than appeared at first sight. One of the main challenges is that if you adopt the pure principle of a distance-based tax, it would be seen— bizarrely, in my view—as a proxy to taxing fuel. That would be illegal under the Chicago Convention on international aviation, so the Government looked at a rather simpler restructuring. However, they found that the only way they could have done it that would have dealt with the disparity of treatment between the US and the Caribbean would have required an increase in the duty for about 90 per cent of passengers, including those flying to Europe and the USA. The Government felt that, in the current economic climate, it would not be fair to ask the majority to pay more to help fund a cut for the minority.

[Lord Foulkes of Cumnock]

I think the Minister has been listening carefully to the debate. He will recall that I gave him a suggestion; my understanding is that it was not considered in the review. It came up very recently from a meeting between the Caribbean Council and Ministers from the Caribbean. I asked the Minister for a very simple pledge to take this new suggestion back now and discuss it with the Chancellor: Bermuda should be designated the capital of the Caribbean for this purpose only. Surely that is the least he can do for the people of the Caribbean, on behalf of whom my noble friend Lord Morris spoke so eloquently.

[Lord Newby]

The noble Lord, Lord Morris, anticipated me two minutes ago and the noble Lord, Lord Foulkes, has anticipated me just now. I was about to say that I had not heard the Caribbean Council’s suggestion of designating Bermuda the capital of the Caribbean. My experience of the Caribbean does not fill me with hope that, when push comes to shove, there would be much agreement to designate anywhere as its capital. I am not sure whether you can designate somewhere as a capital for one purpose but not a capital for every other purpose. However, it is a new suggestion; I will certainly take it back and we will see whether it deals with the problem. My initial thought, not having heard the suggestion before, is that it is probably not quite as simple as that.

The Government recognise the mutual benefit of tourism and trade between the United Kingdom and the Caribbean. We welcome the work of the UK-Caribbean Forum to establish a new and improved strategic partnership to promote prosperity, growth and development within both regions. No doubt this topic can be discussed in that forum.

The noble Lord, Lord Howell, and other noble Lords referred to the devolution of air passenger duty to Northern Ireland. The Finance Act 2012 devolved to the Northern Ireland Assembly the power to set rates on direct long-haul flights leaving from Northern Ireland. The rate on short-haul flights will remain the same as that for the rest of the United Kingdom. In devolving direct long-haul rates to Northern Ireland, the Government responded to the wishes of the Northern Ireland Executive. We also recognised that Northern Ireland is in a unique position within the United Kingdom in that it shares a land border with another EU member state that has a lower rate of aviation tax. Further devolution of air passenger duty to Scotland or Wales is a subject that requires careful continued evaluation before we can be confident of its effects across the UK as a whole.

I return to my initial comment that I thank the noble Lord, Lord Palmer, for securing the debate. The Government want to ensure that aviation and tourism continue to grow to promote economic growth and support jobs across the country more generally. However, we also believe that aviation must bear its fair share of the fiscal burden so that we remain on course to address the record deficit. Air passenger duty makes an essential contribution to the public finances and to this Government’s plans to create a stable platform for growth.

20:33

Sitting suspended.

Growth and Infrastructure Bill

Monday 28th January 2013 Lords Chamber

Committee (2nd Day) (Continued)

20:37

Relevant documents: 11th Report from the Delegated Powers Committee, 10th Report from the Constitution Committee.

Amendment 55BC

Moved by

[Lord McKenzie of Luton]

55BC: Clause 6, page 7, line 10, leave out “guidance issued by the Secretary of State.” and insert “regulations, subject to consultation, setting out the criteria upon which viability, for the purposes of this section, is to be assessed.
(8A) Regulations under subsection (8) shall be in the form of a statutory instrument and shall not be made unless a draft of them has been laid before and approved by both Houses of Parliament.”

[Lord McKenzie of Luton]

My Lords, Amendment 55BC is concerned with criteria for evaluating viability. Given our earlier discussions, I do not see any great merit here and now in delving into the RICS draft guidance note on financial viability and where that might lead us. The particular purpose of this amendment is to see that there is some parliamentary process which sets out the framework for the criteria rather than just guidance—I think guidance is the preferred choice of the Liberal Democrat amendments.

I will leave it there tonight but it would be extremely important to have a chance before we get to Report to at least see some outlying guidance or direction of travel from the Government so that we do not have to revisit this in detail on Report. I still hang on to my point about how to divide viability among the various components and what that means. That is an issue that we will come back to, but on that basis I beg to move.

[Lord Burnett]

I gather that there has been a consultation paper and consultations have closed. I understand that there might be a government response. Can my noble friend let me know when that response is likely to be published? I am led to believe that it might be next month. Can my noble friend help me on that?

[Lord Greaves]

My Lords, I have Amendment 55CB in this group, which has the same effect as that of the noble Lord, Lord McKenzie, so I will not repeat what he said.

Viability is increasingly important, and not just in relation to Section 106 and the removal of obligations to make things viable. It is inherent in planning applications and local plans, in which pieces of land should be developed before others and in whether it is any longer possible, in old industrial towns such as in the area in which I live, to prioritise brownfield, formerly developed and regeneration sites over and above greenfield sites. That is fundamental. The definitions which the Government, Planning Inspectorate and local authorities will use for viability on particular sites will also be fundamental. I look forward to future discussion on this.

[Lord Beecham]

My Lords, can the Minister enlighten us on the robustness of the attribution to affordable housing allocations in terms of the 75,000 houses affected by this lack of viability? The information was given in a Written Statement last September by Mark Prisk MP, the relevant Minister. It did not distinguish between general viability issues and those that might have been occasioned by the inclusion within the affordable housing provisions, which have not been acted on.

Mention has been made of the £300 million the Government are making available to compensate for losses under Section 106. Has any of that been used to reduce this number of 75,000 and, if so, upon what basis? Can the Minister enlighten us on that—if not tonight, then subsequently? Viability can of course be called into question. There is a variety of problems, as the noble Lord, Lord Greaves, has just mentioned. They might particularly relate to buying at the top of the market and finding that land and other values have fallen since. That makes the problem of viability clear, but there could be other factors as well. If we are moving towards a position where guidance is to be given on viability after the consultation that has already been referred to, it would be sensible to distinguish between the different factors that contribute to the viability problems that are perceived to occur.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I thank the noble Lord, Lord McKenzie, for his brevity in moving the amendment. He was so brief that I thought I might be able to leap up and be as brief in response; I have been thwarted on that.

There are two or three questions with which I want to deal quickly. First, on the availability guidance, I cannot promise to have the guidance available but I think I will be in a position to talk to noble Lords in a general way before Report, which they might find helpful. So I am arranging to set up meetings to discuss one or two technical aspects of the Bill before we get to Report. That will be for all Peers, so I hope that that will be useful.

With regard to the question raised by the noble Lord, Lord Burnett, the consultation was on the pre-2010 regulations rather than Clause 6 of the Bill. The Government’s response to the consultation will be made available to noble Lords shortly. I cannot say when “shortly” is, but I hope that we will have it before us.

I have a long reply here for the noble Lord, Lord Beecham, but I suggest that I write to him. With that, I hope that the noble Lord will be willing to withdraw his amendment.

20:45

[Lord McKenzie of Luton]

My Lords, I thank the Minister for her brief reply, matching the length of the moving of the amendments. The noble Lord, Lord Greaves, raised an important point about this being a wider issue than just Section 106. I look forward to seeing what the guidance includes. If it is not formally ready, I hope to have the opportunity for some detailed discussion before we get to Report. I am grateful to the Minister for that.

From what the Minister has just said, I understand that the parallel consultation on Section 106 has been completed but the Government’s response has not yet been issued, and that should be with us shortly. If that is the case, I hope that that will be with us before Report. I look forward to sharing with my noble friend Lord Beecham the response on the points that he raised. Perhaps the Minister can just confirm that issue about the availability of the pre-April 2010 consultation. Subject to that, I beg leave to withdraw the amendment.

[Baroness Hanham]

My Lords, I think I indicated that I hope to be able to share at least some of the ideas behind the response. I do not know whether I will be able to share the whole response, but I have offered the discussions and it will be much clearer by the time we get to them.

[Lord McKenzie of Luton]

I beg leave to withdraw the amendment.

Amendment 55BC withdrawn.

Amendment 55BD not moved.

Amendment 55C

Moved by

[Baroness Hanham]

55C: Clause 6, page 7, line 26, at end insert—
“(11A) This section and section 106BB do not apply in relation to an English planning obligation if planning permission for the development was granted wholly or partly on the basis of a policy for the provision of housing on rural exception sites.”

[Baroness Hanham]

My Lords, this amendment serves to exempt planning obligations attached to planning permissions on rural exception sites from the provisions of this clause. Some time was spent on the issue of rural exception sites during consideration of this clause in the other place. We have considered very carefully the arguments and evidence put before us then and since, and I hope that the resulting amendment will be welcomed by this House.

Rural exception sites are unique in that they are not allocated sites. They come forward when a landowner is willing to provide land to enable housing for local people to be built. They are sites, often in sensitive locations, where housing would not normally be permitted. Rural exception sites do not operate in a competitive land market. Landowners provide land at generally low value, with no expectation of market values or high levels of return. Planning obligations are used to secure the housing for local people. Clause 6 would introduce a risk of unsettling the practice of rural exception housing by introducing the possibility of a challenge to the planning obligation. I am concerned that this could prevent sites coming forward in the future. I hope that noble Lords will welcome the exemption that we are providing and I beg to move.

[Lord Cameron of Dillington]

My Lords, perhaps I could ask a question about this amendment. It seems to me that one of the underlying concepts behind Clause 6 is that some affordable housing is better than none. In my opinion, that concept applies in spades, as it were, in rural areas and villages. In the current economic circumstances I worry about the ability to build rural affordable housing on exception sites. Of course, in large-scale developments, the affordable housing element is calculated at nil return to the developer and the landowner, but it is hoped that the remaining houses will provide the landowner and developer with a reasonable profit. In addition, non-affordable and affordable houses will be provided to house buyers. Therefore, the scheme goes ahead, operates and both sorts of houses are provided.

However, none of that applies in a village scheme of, say, six affordable houses. Often, everything is staked against you. It requires public funding—some of the £300 million, I hope—or charitable or semi-charitable funding to make it happen, as well as, usually, a generous landowner who often gives up what he or she sees as potential future “hope value” land to make these projects happen. However, it is not unknown for housing departments, housing providers—RSLs or whatever—planning departments and landowners to do a deal whereby planning permission is given for full-market houses on the exception site or nearby land to ensure the release of the land for affordable housing. Funding or part-funding may even be provided for these small schemes.

Therefore, while I understand that the Government’s desire is to reinforce the sanctity of exception sites, can the Minister clarify that it is not intended to discourage or prevent such deals being done? Rural affordable housing is something that we feel deeply about where I come from.

[Baroness Hanham]

My Lords, I think I can reassure the noble Lord that that is precisely what we are looking for. We recognise that there are philanthropic landowners who will give land; we know that there are housing associations and RSLs that will work for a specific scheme, and that is precisely what we want to ensure continues to happen.

It is important that small-scale developments in villages can be carried out. That is what the clause does. It ensures that nothing stands in the way of rural exception sites being developed, and the Section 106 agreement that will be negotiated to enable that to happen should make sure that the housing is for local people. That will be the only area where Section 106 would have relevance on this matter. It will be a straightforward process of land being released and a developer being available for affordable housing, social housing or, indeed, private housing. There will be no constraints on that taking place.

[Lord McKenzie of Luton]

My Lords, I place on record our thanks to the Minister for fulfilling a commitment made in the other place.

Amendment 55C agreed.

Amendments 55CA to 55CD not moved.

Amendment 55D

Moved by

[Lord Best]

55D: Clause 6, page 8, line 16, at end insert—
“( ) This period should be consistent with that prescribed to authorities under subsection (9) of section 106BA of the Town and Country Planning Act 1990.”

[Lord Best]

My Lords, I shall speak also to Amendments 55E, 55EA and 55F. Amendment 55D, standing in my name and that of the noble Lord, Lord Shipley, would require the Secretary of State—that is, the Planning Inspectorate—to adhere to the same timetable as that imposed on local authorities when the inspectors consider appeals under Clause 6. This means responding within 28 days or within a period specified by the Secretary of State. Given that much of the Bill is about speeding up the planning process, I guess that the amendment will find favour with the Government.

Amendment 55E in my name and those of the noble Lords, Lord Shipley and Lord Tope, would ensure that the Planning Inspectorate gives material weight to the original decision made by the local authority and looks at all the evidence on which it was based. There will be local considerations and local issues with which the inspectorate may not be familiar; this amendment will ensure that these are taken on board. Going through the evidence collected by the local authority also prevents duplication of effort by the inspectorate.

Amendment 55EA would guard against the developer obtaining an unjustified windfall gain where estimates of future sale prices, on which the inspectorate has judged the viability of the scheme and decided to sanction a reduction in the affordable housing requirement, prove too pessimistic. The amendment would mean a clawback, or so-called overage payment, to the local authority of a portion of the sales proceeds above the predicted levels. It seems only fair that if developers are to benefit from Clause 6 where prices have fallen, that they share their extra profits if, in fact, prices are better than feared. We have already aired Amendment 55F very fully in combination with Amendment 55ZA, and it goes to the heart of the matter. It would ensure that society gets at least something—a swift start on site—in return for the loss of precious affordable housing. I beg to move.

[Lord Cameron of Dillington]

My Lords, I will speak to two of these amendments. First, I cannot support Amendment 55EA. It has a mild whiff of retrospective taxation which I do not approve of. More importantly, it fails to understand the motivation of an entrepreneur, and his or her assessment of risk. If a particular project is marginal, then the developer does their own assessment of the upside and downside risk. They will proceed only if they personally believe that the upside returns are sufficient to justify the downside risks. If the upside is threatened, as seems to be the case in this amendment, and only the downside risk remains, I do not believe that they will proceed. In that case, one nullifies the whole purpose of this clause.

Furthermore, it occurs to me that if the local authority wants to share in the upside benefits, it should equally share in the downside risks. I cannot believe that the local authority would be happy to pay the developer if the housing price should drop below the estimated figure. In other words, it seems only fair that if it is going to share in the upside, it might also share in the risk. This applies if it wishes to see the development take place as soon as possible; of course, I would personally prefer that it did neither.

[Lord Burnett]

The noble Lord, Lord Cameron, is making a series of very good points. Does he also believe that were the local authority to share in the upside gain, it might cloud its objectivity?

[Lord Cameron of Dillington]

It would. Local authorities are not the right bodies to involve in entrepreneurial activity. I share the noble Lord’s opinion.

I move on to Amendment 55F. At the risk of being boringly obvious, this surely underlines the whole purpose of the clause and it is amazing that it has been omitted. We are urgently trying to promote infrastructure development and to prevent any further delays at a time when we might be entering a triple-dip recession. Housing development, as we are all aware, is very good for kick-starting our economy. It employs a local workforce, and to a large extent uses UK raw materials, while clearly performing a social good. In fact, the House Builders Federation claims that every £1 spent on housing puts £3 back into the economy, and that increasing housebuilding by 130,000 units per year, which is the Government’s projected level, could create 195,000 direct jobs and 400,000 in the supply chain. We want housebuilders to get on with it. I therefore cannot see the point of renegotiating affordable housing demands if there is not going to be a quid pro quo whereby the house developer has to get on with the development and build now. Otherwise, they are going to renegotiate and wait for the market to recover.

20:59

[Lord McKenzie of Luton]

My Lords, we have Amendment 55EB in this group. Before I speak briefly to that, I will say that I am happy to support all the other amendments in the group. I heard what the noble Lord, Lord Cameron, said about Amendment 55EA, but it refers to a developer paying a contribution proportionate to the increase in value; it does not mean that there is no upside for the developer.

Amendment 55EB seeks to amend the relevant period from three years to two. This is another point I will pursue. The relevant period in these circumstances is the period within which, if the Secretary of State route is taken, the planning obligation has to be completed. However, if the development is only partly started, I do not think that that applies. Proposed new subsection (12) states that the modifications are,

“the modifications necessary to ensure that, if the development has been commenced before the end of the relevant period”—

in other words, within three years—

“the requirement or requirements apply only in relation to the part of the development that is not commenced before the end of that period, and … such other modifications as the Secretary of State considers necessary or expedient to ensure the effectiveness of the requirement or requirements at the end of that period”.

Does that not mean that if you start a development, you have to complete it within three years, but if you start part of it, you neither have to complete the bit you have started or the other portion, otherwise you will revert to the original Section 106 requirement?

Perhaps I am misreading the provisions. I certainly understand that the intent is that a development must be completed within three years. We say three years is too long; we would like to set the time limit at two years. The issue is how proposed new subsection (12) will work when there is only partial commencement of a project. For me it is less clear. Perhaps the noble Baroness will write to me on that if she cannot deal with it this evening.

[Baroness Hanham]

My Lords, I thank noble Lords who tabled the amendments in this group. They seek to introduce some constraints to the appeals process. Before I turn to each issue, I will reiterate some of the main principles of our thinking. The appeal is meant to be impartial and evidence-based. It will be a targeted review of viability, and it will be dealt with quickly. It will result in a viable, affordable housing requirement that will be valid for three years—I will come back to that—at which point the original requirement will be reinstated. In other words, if a project has not been started within three years, the appellant will lose all the benefits they gained from the appeal.

Amendment 55D covers the 28-day period for a planning appeal decision. Currently a default 28-day determination period applies to authorities determining the applications made under new Section 106BA. The appeals are made to the authorities, which already have a huge amount of information relating to the original application. It should be noted that the 28-day period can be extended if that is agreed in writing between both parties—the authority and the applicant. The procedures for planning appeals are set out in secondary legislation. We will consult on a streamlined process for new Section 106BB appeals. That consultation has not gone out. Again, I will be happy to discuss it when we have our meeting.

Placing the same default 28-day period to determine appeals is not practical. The Planning Inspectorate does not have the knowledge that the local authority had when it first dealt with the application. The local authority has already negotiated the existing planning obligations and should be very familiar with the evidence on which the agreement is based. Also, the Planning Inspectorate’s procedures do not replicate those of a local authority. The inspectorate will need to consider what form of appeal may be required, whether it be written representations, a hearing or public inquiry. I am sure the noble Lord will understand that it is not possible to undertake a full inquiry, however speedily done, within 28 days. That is pushing it too hard. However, I hope I can offer reassurance that we fully intend this to be a quick process. We shall be placing challenging time limits on the Planning Inspectorate to turn around decisions on these appeals as quickly as possible.

Amendment 55E, introduced by the noble Lord, Lord Best, requires the Planning Inspectorate to give “material weight” to the decision and evidence of the local authority when considering an appeal; that is, the local authority’s case must be considered at the same time. As a point of principle, planning inspectors must be seen to make their own decisions impartially. In this case, they must take an impartial assessment of all the evidence submitted; they cannot just look favourably on some. It would therefore be wrong to provide an advantage to the evidence of one party—the local authority—by requiring in law that it is given particular weight. What if the quality of the evidence submitted by the local authority was very poor?

An inspector is not required in any appeal casework to give material or indeed any other defined weight to particular evidence. Rather, it is for the inspector to decide what weight should be given to any evidence, which could include the local planning authority’s decisions, according to the cases put, and then to justify that assessment. I hope the noble Lord agrees that we should not be trying to prejudice the Planning Inspectorate’s decisions but should let it take an impartial view.

Amendment 55F would require the development to commence within six months of an appeal decision. Amendment 55EB would make it valid for two years, rather than three, and Amendment 55EA seeks to ensure that the appeal decision should include a requirement that the local authority receives a contribution if market values rise. The noble Lord, Lord Burnett, has added his weight against this.

I believe that the clause already provides incentives for the developer to get on and build. Where the Planning Inspectorate issues an appeal decision in these cases, the revised affordable housing requirement is only valid for three years. Any part of the development which has not been commenced in that time will be subject to the original affordable housing requirement. One way or another, the original affordable housing requirement has to be dealt with within that timescale. We must give developers a reasonable amount of time to get on site. Following an appeal decision, the developer may need more time to begin development for legitimate reasons, such as compliance with pre-commencement conditions or securing vacant possession of the property. For more complex schemes, a limited time period to get on site would mean that the whole reassessment of viability could be wasted. We must balance our desire to get stalled sites moving with a realistic understanding of the development process. I am particularly concerned that we do not inadvertently constrain complex projects, such as regeneration schemes, by limiting the revised agreement inappropriately.

I would like to respond to the amendment requiring the Planning Inspectorate to include a provision for market uplift. On a question of principle, Section 106 is intended to be a mechanism by which development is made acceptable in planning terms. The amendment appears to introduce a wider purpose for Section 106, related to profit rather than mitigating the impact of development. I would be extremely concerned that this could set a precedent for the use of Section 106.

The intent of this amendment is to give local authorities some return if markets improve. This provides an incentive for developers to start building. However, the legislation does not prevent local authorities making their own judgments as to whether there should be some incentive within the revised agreement to start development, such as an improved affordable housing provision, if market conditions rise. The only constraint on the local authority is that the outcome should not be more onerous than the original obligation. In the event of an appeal, local authority proposals for such flexibilities could be submitted to the Planning Inspectorate as evidence. We will be clear in guidance that such evidence is appropriate. Again, I see this as a matter for local discretion, depending on site circumstances. We will be ensuring that guidance on this matter is included in our statutory viability guidance which, as I have said, we hope will be available before Report.

I hope that noble Lords will be reassured by those comments. The noble Lord, Lord McKenzie, asked whether, if a development is partly commenced at the end of the three years, the original obligation applies to that part of the development which is not commenced. So if the developer has built only part of the development and there is an obligation to develop affordable housing, and they have had a reduction, that lasts for only three years. If the developer has not got that part in hand, he will have to go back to the original amount agreed before the negotiation.

[Lord McKenzie of Luton]

Perhaps I may pursue that point. I understand generally the points around the three years, but if it is partly commenced and partly not commenced, in relation to the part that is commenced there is no requirement to complete that part within the three years in order to retain the benefit of the modified Section 106 agreement. That was the point I was pursuing. I understand clearly that if you do the whole lot, you have to do it within three years.

Perhaps it is the convoluted language used in proposed subsection (12), and we may pick it up subsequently, but that is what is not clear to me, particularly in view of what the noble Baroness has just said.

[Baroness Hanham]

I may need to write to the noble Lord on this. The whole development has got to start within three years. The noble Lord is looking as bewildered as I feel.

[Lord McKenzie of Luton]

I will not dwell on this because we have other things to discuss. As I understand it, the relevant period is three years—we would like to see a period of two years, but it is to be three years—in which the developer has to complete under the provisions of proposed subsection (11). I am trying to tie that up with what the noble Baroness has just said about starting to commence the development when it is only partly commenced. That is what is confusing me.

[Baroness Hanham]

My Lords, I do not want to cause any more confusion because it is too late for that. However, I may be able to respond. It is always a relief to know that I am right. The completion is not legally defined. It does not have to be finished within three years, but it must start within three years. I hope that that clarifies the position.

[Lord McKenzie of Luton]

I understand what the noble Baroness has said, but perhaps we will return to the issue.

[Lord Best]

My Lords, I am grateful for the support of the noble Lord, Lord Cameron, for the absolutely crucial Amendment 55F, and indeed for the support of the noble Lord, Lord McKenzie, for all these amendments. It might be worth spending a minute or so on Amendment 55EA which talks about the prediction by the inspector that prices are going to be lower than expected when properties come to be sold being proved wrong, and whether the local authority would benefit from that. Let me run through this briefly. I hope that the noble Lord, Lord Cameron, will be clearer about the position and see that this is not such a foolish suggestion.

The developers say to the inspectorate that when they agreed to the Section 106 agreement, they expected prices to be X thousands of pounds at the time of sale. They now tell the inspector that a lower figure is expected from the sales. The inspector agrees and says, “Okay, we will let you off and allow you to break the contract you have already signed with the local authority. You will be let off the obligation to provide as much affordable housing”. But what happens later is that prices rise and it turns out not to be such a bad deal after all. If, instead of saying, “Good luck to the developers. They paid over the odds for the site. It was foolish at the time, but everything has come right. They have not had to build any affordable housing, they have made their profits, and that is the end of the story”, one says, “If the prediction is wrong and prices rise so that the developers make a handsome profit, over a certain pre-agreed level, there should be a share back to the community in lieu of the affordable housing that has been sacrificed”.

The Minister makes the very fair point that dealing with this in cash may be unwise and it may be that one should return to the agreement for more affordable housing. One should get back some of the affordable housing. I would certainly favour that over the hard cash and that would fit in with other requirements here. That would be a good way of doing it. It would give an opportunity for that deal to be negotiated at the time that the inspector provides their judgment, saying, “Less affordable housing, but, if I am wrong in my predictions and prices rise, then we will have some more affordable housing later”. It must not be any better than the original deal, however. That would be a fair way of handling the unforeseeable circumstances of when properties are actually sold in the future as opposed to guessing.

21:15

[Lord Cameron of Dillington]

The noble Lord hoped he would make it clearer to me, but I had understood all that. The point is that, if the house is sold at a lower price than the new agreed price, is the local authority going to give either cash or some form of payment back to the developer, because it has agreed the sale at a price that is still too high?

Local authorities under these circumstances are getting involved in trying to prevent local developers assessing the risk and proceeding with the development as soon as possible. I still think it is very bad for them to get involved in entrepreneurial activity of this nature.

[Lord Best]

I have failed in my mission to convince the noble Lord, Lord Cameron, but there was a good deal of food for thought from the Minister on a number of those points, which I will study with care. In the mean time, I beg to withdraw the amendment.

Amendment 55D withdrawn.

Amendments 55E to 55F not moved.

Amendment 56

Moved by

[Lord Tope]

56: Clause 6, page 9, line 38, at end insert—
“106BC Modification or discharge of affordable housing requirements: Greater London
(1) Where an application is made under section 106BA for the modification or discharge of an affordable housing requirement in respect of a development falling within section 62B(2), the appropriate authority shall notify the Mayor of London.
(2) Where the Mayor is notified of an application under subsection (1), the Mayor may decide to make any determination in relation to the application that would otherwise be made by the appropriate authority under section 106BA.
(3) The Mayor must consult the relevant local planning authority before exercising any function under this section.”

[Lord Tope]

My Lords, Amendment 56 stands in my name and that of the noble Lord, Lord Jenkin of Roding. I am pleased to see that the noble Lord has been able to join us.

We return to the situation in London, which seems surprisingly to have been completely overlooked throughout the Bill. We have a Greater London Authority and a Mayor of London and, once again, in view of sensitivities on both sides of the House, I have to point out that we refer to the office and not to past or present office-holders. We have a Mayor of London and we will continue to have a Mayor of London, to whom Parliament has given responsibility for strategic planning in London. Yet the Bill seems to take no account of that at all. In this case, the amendment would ensure that the mayor is notified of any application to modify or discharge affordable housing requirements in London and that, if he deems it necessary, he can call in such applications.

I move the amendment because I recognise that affordable housing, particularly in London, is of crucial importance to the role of strategic planning. It is largely central to it and a very high priority for past, present and, I hope, future mayors. I make the same case as I did the other day in Committee on another amendment. The Mayor of London has been given that responsibility by Parliament. He has been elected by the people of London. He is publicly accountable, first of all to the London Assembly, which is elected by the people of London, and also accountable—in a fairly high profile way, which will always be the case whoever the officeholder is—to the people of London. That must be more appropriate, better and certainly more in tune with localism than giving the responsibility to an unelected, unaccountable body, which is unversed, as yet, in this work, elsewhere in the country.

The added advantage, again, is that the GLA’s planning department knows the planning departments of all the London boroughs and the local housing situation in all the London boroughs. On the whole, most of the time, there is a very good relationship, so it will be making its judgments and decisions with knowledge and will be able to hear, and take proper account of, all arguments put forward both in the local context and in the strategic planning context for the whole capital. That seems to be entirely appropriate for an elected mayor with a strategic planning role. There is really no need at all to involve the Planning Inspectorate, which is based elsewhere and does not have either the knowledge or the accountability to carry out that role.

I move this amendment in the hope that the Government will belatedly start giving some consideration to the role that they and their predecessor Government have created in London: a mayor with responsibility for strategic planning. It is very hard to understand an argument that says that the mayor responsible for strategic planning should have no role in this process. I believe that must be an oversight and I am pleased to offer the Government the opportunity to correct it. I beg to move.

[Lord Jenkin of Roding]

My Lords, I am very pleased to be here to support my noble friend Lord Tope. It is about six hours since I was moving amendments in Grand Committee about copyright so it is pleasurable to come back to a rather more familiar scene. I do not think that I can add very much to what my noble friend has said. He has put the case extremely well. The centre of the case is that the mayor is there and has these powers accorded to him by Parliament. It seems very strange that he should have no function in relation to this important matter. Affordable housing in London is enormously important, as I think my noble friend on the Front Bench will acknowledge. From his own knowledge, he will be well aware of the need to find proper housing for people who cannot afford to go out into the market. The mayor has this overall responsibility. Why should he not be entitled to have this role rather than it going to the inspectorate in Bristol? I very much support the amendment.

[Lord McKenzie of Luton]

My Lords, I am not unsympathetic to the thrust of the amendment that has been moved by the noble Lord, Lord Tope, and supported by the noble Lord, Lord Jenkin. However, it does not seem to be quite right to say that the Bill makes no reference to the Mayor of London, because new Section 106BB(18) states:

“In the application of Schedule 6 to an appeal under this section in a case where the authority mentioned in subsection(1) is the Mayor of London, references in that Schedule to the local planning authority are references to the Mayor of London”.

I was not quite sure whether the noble Lord was proposing that the Mayor of London’s role in this should be as the local planning authority—in which case the question is what happens if the Mayor of London does not support the applicant’s appeal—or whether the Mayor of London sits in substitution for the Secretary of State. When the noble Lord replies, it would be helpful if he could clarify and unpick that issue.

[Lord Ahmad of Wimbledon]

My Lords, I must admit that, as I heard my noble friend Lord Jenkin making his contribution, I looked over my shoulder, because earlier this afternoon I did just that and noticed he was not in his usual place. We of course welcome him and, indeed, his contribution to the Committee.

My noble friend Lord Tope proposes amendments that seek to allow the Mayor of London to determine applications made under new Section 106BA, where the development, as he rightly pointed out, is of strategic importance. He also made the important point about affordable housing and its particular importance in London, which I fully support, as do the Government. The Government are supportive, in particular, of a proactive approach to stalled sites being taken forward by the Mayor of London. The clause is clear that any application for review of affordable housing requirements under Section 106 that the mayor himself negotiated and signed is made directly to the mayor.

In other cases there is also a need to balance carefully the need for a rapid, focused mechanism for reviewing affordable housing obligations, where the viability of the scheme is at stake. We must also weigh up whether an additional notification and the argument being made at consultation stage with the mayor would cause unnecessary delay.

I have listened to the arguments that, in the majority of cases, the borough is best placed to respond to any applications made under this clause. Where the borough that negotiated the agreement was party to the original viability evidence and must legally enforce the agreement, I am sure that all noble Lords would agree that the borough would seem best placed to deal with an application for review. That said, the Government do listen and I have listened carefully to my noble friend Lord Tope. There are cases where the mayor has a formal role in determining the planning permission to which the existing Section 106 agreement relates. I can certainly see that there is an argument that, in certain specific cases, the mayor should have an ongoing role. This is something that my noble friend Lady Hanham and I have discussed with the Minister. On that basis, we would like to come back to this issue on Report. With those reassurances, I hope that my noble friend is willing to withdraw his amendment.

[Lord Tope]

My Lords, I welcome those reassurances very warmly. I am grateful. Let me clarify for the noble Lord, Lord McKenzie, though he probably understood. I am not sure how to phrase this, but I was proposing that the Mayor of London should in London have the role otherwise ascribed to the Secretary of State. I must be careful how I phrase that, because I am not sure that either would wish to be likened to each other. I was not suggesting for one moment that the mayor should take the role of the local planning authority. I agree with the Minister that in most cases I would hope that the issue would be resolved with the local planning authority in an amicable and fair way.

The mayor would be notified, which is not very difficult these days. There are not that many projects under review in London. I would hope that in many cases he would not feel the need to call it in, but that if he did there would certainly be a good reason to do so. After 12 and a bit years in London, I have more confidence that not only would a better decision come from City Hall than from PINS in Bristol, but that it would be a quicker decision than if it were referred to the Planning Inspectorate, which is likely to have a considerably increased workload. All round, it is a better solution and I am pleased and reassured to hear that the Government are giving positive consideration to it. On that basis, I beg leave to withdraw the amendment.

[Lord McKenzie of Luton]

Can the noble Lord help me out on this point? Where Clause 6 refers to 106BB appeals, it states in new subsection (18) that:

“In the application of Schedule 6 to an appeal under this section in a case where the authority mentioned in subsection (1) is the Mayor of London, references in that Schedule to the local planning authority are references to the Mayor of London”.

If there are circumstances where, for a Mayor of London or a local planning authority, you have to read “Mayor of London”, then the Mayor of London duly cannot then act instead of the Secretary of State. Maybe this is not the occasion to unpick that particular provision, but I would like some clarification on it and I imagine the noble Lord would as well.

[Lord Tope]

I should have been a little quicker begging leave to withdraw. I would indeed welcome clarification. I am sure it will be forthcoming when we hear further what proposals the Government have.

[Lord Jenkin of Roding]

The Mayoral Development Corporation that is set up under the Localism Act might well be the sort of place where the mayor would have the primary role.

[Lord Tope]

Not for the first time, I am grateful to my noble friend and I quickly beg leave to withdraw the amendment.

Amendment 56 withdrawn.

Clause 6, as amended, agreed.

21:29

Amendment 57

Moved by

[Lord Tope]

57: After Clause 6, insert the following new Clause—
“Indebtedness
(1) The Localism Act 2011 is amended as follows.
(2) Section 171 (limits on indebtedness) is repealed.
(3) In Part 7 of the Localism Act 2011 insert—
“Definition of indebtedness
(1) A local authority shall determine and keep under review the amount of housing debt held by that authority.
(2) A determination under this section must have regard to the duty to determine an affordable borrowing limit under section 3 of the Local Government Act 2003 (duty to determine affordable borrowing limit).
(3) A determination under this section must have regard to any guidance issued or approved by the Secretary of State.
(4) A local housing authority may not hold debt in contravention of a determination under this section.
(5) In this section “housing debt”, in relation to a local housing authority, means debt—
(a) which is held by the authority in connection with the exercises of its functions relating to houses and other property within its housing revenue account, and(b) interest and other charges in respect of which are required to be carried to the debit of that account.””

[Lord Tope]

My Lords, I rise to speak to this amendment standing in my name and that of my noble friend Lord Shipley, who is engaged at a Holocaust memorial function in Speaker’s House.

This is arguably the amendment that might make the most difference to achieving growth in the housing market, because it seeks to remove the housing borrowing cap. The measure that has been called for by a large number of bodies—most recently, the National Federation of ALMOs, the Chartered Institute of Housing, the Local Government Association, the Association of Retained Council Housing and London Councils. All of them say that removal of the housing borrowing cap to enable local authorities to start more building would make a huge and almost immediate difference to the provision of housing, particularly in the capital but also throughout the country.

I hope that there is some movement on this; I have heard some encouraging noises elsewhere. I recall asking the Minister, the noble Baroness, Lady Hanham, about it in Questions a week or two ago and she replied that it was a matter for the Treasury. Unfortunately, I was not allowed a supplementary. Of course it is a matter for the Treasury; some would say that that is the whole problem. But it is still the responsibility of the Minister’s department and all of us who support this Government —and of those who do not support them—to take the measures that would enable housebuilding to get under way. This is certainly not the only measure but it is a single measure that would make an enormous difference. If authorities were still governed by all the prudential rules in the same way as normal, they would still have to act responsibly, but if they were able to borrow against their housing stock, it would make a significant difference. It would get housebuilding moving on a greater scale. I hope that discussions within government are moving in the right direction and that, if not tonight then before the end of this Bill, we will hear that the housing borrowing cap is being lifted. I beg to move.

[Lord Jenkin of Roding]

My Lords, I strongly urge the amendment on my noble friend the Minister. My noble friend Lord Tope said that a great many organisations were in favour of the change. I have to say that none is more in favour than London Councils—I should perhaps have again declared my interest as a joint president. It has said firmly that, of all the measures, this could be one which really helps the housing situation in London—which, as noble Lords know well, is pretty desperate at the moment.

The cap exists on top of the normal constraints on local government borrowing. It is an additional barrier to development which seems absurd in the present circumstances, given that everybody is quite rightly saying to the Government that growth and getting things moving should be absolutely top of the agenda. It seems absurd that there should be duplication of the protection against irresponsible borrowing by local authorities. It seems not to have any sensible purpose now. The usual controls operate perfectly satisfactorily. I simply do not understand the case for retaining the cap.

I have perhaps not had my ear quite as close to the ground as my noble friend Lord Tope, but I cannot believe that the Chancellor and his colleagues in the Treasury have not been made aware of this and do not recognise that, if they really want to move housing forward in London and the rest of the country, the cap should be removed. I hope that my noble friend will be able to respond positively.

[Lord Best]

My Lords, I support the noble Lords, Lord Tope and Lord Jenkin, and pledge the Local Government Association’s support. Is its support stronger than that of London Councils? It is equal to that from London Councils.

I talked at Second Reading about the growing national housing deficit. I was trying to get into common parlance the idea that, every year, we are building up a bigger and bigger deficit. We are adding another 100,000 homes a year to the deficit that we already have because we are building at least 100,000 less than we should. We must do something dramatic to try to turn the deficit into a positive.

Local authorities are sitting on assets against which they could borrow. A lot of housing associations have run out of space to borrow any more, and they have used up the opportunity to borrow against the properties that they own. Many local authorities have plenty of headroom to borrow more against that security. This is prudential borrowing that will be repaid out of rents. It is not frightening to overseas investors and bankers to see another £7.4 billion, which is the amount estimated by the report Let’s Get Building, produced by John Perry from the Chartered Institute of Housing. Over a period of five years, £7.4 billion is not enough to frighten the horses but it would produce 12,000 homes a year—60,000 homes in all. That is about 5% of what we need each year, but it is about 10% more than we currently provide. That is one relatively dramatic way in which, without any subsidy, we could get at least a few thousand more homes built every year.

I chaired a commission for the LGA and the Department for Communities and Local Government called Easing Housing Shortages: The Role of Local Authorities, which sent me around to see what local authorities had been doing. Were they up to it? Did they have any sites on which they could develop? They were using what was called local authority new-build funding, and I saw how councils can demolish those garages on the end of the site and put in 14 bungalows, perhaps, for elderly people, who can then move out of underoccupied council housing into those bungalows, thereby releasing 14 family houses on the council estate. It is creative action; the land is already there; the garages do not get used any more; it is a place where people congregate for nefarious purposes—everyone is delighted to see the development. Local authorities could get on with schemes of this kind up and down the land. I support this amendment.

[Lord McKenzie of Luton]

My Lords, this proposed new clause is the same as that which my colleagues moved in Committee in another place by way of a probing amendment. It has been very powerfully moved by the now traditional triumvirate of the noble Lords, Lord Tope, Lord Jenkin and Lord Best—a powerful group indeed. In the Commons, I am bound to say, it did not elicit much information, and drew a rather aggressive diatribe from the Minister—something to do with Labour and borrowing. Thank goodness we have a Minister at this end with whom we can have a measured and sensible discussion. We have an innate sympathy with this amendment, and would like to use the opportunity to press the Minister on some particular issues.

First, perhaps we can ask something that has been touched upon by the noble Lords, Lord Tope and Lord Jenkin; and if reported hints from senior Treasury officials at the time of the Autumn Statement that the Government were considering at least relaxing the cap are true and under active consideration, it may save us some time. I hope that they are, but perhaps the Minister can tell us whether they are.

I will also make it very clear that we accept that in the interests of macroeconomic management the Government are entitled to have powers to limit the amount of money borrowed by local authorities. In fact, the Labour Government legislated to that effect in 2003, and that power extends to setting limits on individual councils, and different limits for different kinds of borrowing.

When we were debating these provisions in what is now the Localism Act, I tried to get an answer as to why Section 171 was needed as well as Section 4 of the 2003 Act. I do not believe we ever got a satisfactory reply, so perhaps I can use the opportunity to ask again, in the hope that the Minister can now clarify the position. That is my second question.

We have had the benefit of several briefings on this matter from the LGA, the National Federation of ALMOs, CIH and others, and in particular, as has been referred to, we have had the Let’s Get Building report, which was commissioned by the National Federation of ALMOs. The case for more housing is overwhelming, and the need for more affordable housing is desperate. We can debate until the cows come home which Government have delivered what, but it is surely common ground that we need to build more, and that this is becoming increasingly urgent.

Therefore, this is not just about providing decent homes for people. The boost to the economy is surely well understood, as is the strong multiplier effect on GDP of construction and the boost to employment. Given the grim GDP figures delivered last Friday, this could not be more urgent. The need to boost construction and build more social housing is clear. The Let’s Get Building report also lays out why councils, together with ALMOs, are particularly well placed to play a role, especially in using their land assets, and to link it in with their apprenticeship and work experience scheme. Do the Government accept that analysis from the report? It would seem that at least part of the coalition does.

As the report points out, the revenue costs and savings of an expanded council new-build programme are complex and depend on such factors as whether a grant from the HCA would be needed, the extent to which council tenants would require housing benefit—or universal credit in future—and the prior housing status of new tenants. To the extent that additional council housing reduces demand for supporting people in the private rented sector or temporary accommodation, there is a potential saving for the Government. Additional build also provides an opportunity to get a better balance in the local stock offering. As the noble Lord, Lord Best, said, it is a reasonable way of dealing with underoccupation.

Of course, the crunch issue is borrowing. It is accepted that, under current rules, additional borrowing by councils will form part of public sector debt, notwithstanding that it will be effectively financed out of rental income. There may be arguments about recasting the treatment of that debt, but they are probably not for us today. As we have heard, the Let’s Get Building report proposes that additional borrowing of some £7 billion over five years would facilitate the provision of 60,000 additional homes, although the amendment does not call for this. It calls for the housing cap to be removed. Even if the Government were not minded to support the amendment, would they at least be minded to raise the level of the cap? Have they given recent consideration to this? The Minister will doubtless tell us that there is existing headroom of some £2.8 billion, but this is not evenly distributed.

It is worth putting these borrowing numbers into context. According to the December OBR report, the forecast for debt at the end of this March is £1.2 trillion. Moreover, the forecast increased by £27 billion between March and December last year. Given the upside that it could bring to GDP growth, £7 billion over five years would not seem of itself to be critical to our chances of hanging on to our AAA rating—whatever they may be—or to the Government’s chances of meeting their fiscal rules. That £7 billion over five years is within the margin of standard statistical error for public borrowing figures. As for removing the cap entirely, the evidence from CIPFA is that the introduction of prudential borrowing for councils in 2004 has been a complete success and that borrowing levels have remained modest and prudent. Total local government borrowing is in the order of some £81 billion.

The reform of council house finance from April 2012 has boosted councils’ ability to manage their housing finance more positively. They all have 30-year business plans, while average council housing debt is reported as being just over £17,000 per property. I ask the Minister: why not trust local councils on the basis of their track record to date? These are some serious questions for the Government to answer.

[Lord Ahmad of Wimbledon]

My Lords, first, various questions have been raised about comments from the Treasury, when those comments may not have been heard. I am sure noble Lords will appreciate that it is not for me to comment on such rumours. What I can outline is the Government’s position on where we stand, particularly with regard to these amendments and the issue of housing debts with regard to local authorities.

It is notable that we have been talking about affordable housing; there is also an issue about affordable debt. That is the question which we cannot forget in our deliberations. I therefore regret to say that while I agreed with my noble friends on their previous amendment, on this occasion the Government cannot accept this amendment because it would put at risk the first and key priority of the Government, which is to reduce the national deficit.

21:45

I remind the Committee that Section 171 of the Localism Act 2011—as was mentioned by the noble Lord, Lord McKenzie—provided powers for the Secretary of State to set a limit on the amount of housing debt each stock-holding local authority can hold. I will come back to his question in a moment, if I may. This was felt necessary because the self-financing settlement, which was successfully concluded in April last year, gave local authority landlords direct control over a very large rental income stream and, therefore, the potential to increase levels of borrowing beyond what we as a country can afford—a rise in borrowing far beyond that which would be accommodated within the prudential code.

Just to be clear: why have Section 171, when borrowing by local authorities is already controlled by the Local Government Act; that is, the prudential code? As the noble Lord, Lord McKenzie, pointed out, the prudential code in the Local Government Act did not take account of the actual rental stream from council housing, and therefore Section 171 and the caps. The code has worked well, but borrowing arising from self-financing must be affordable within national fiscal policies, which the prudential borrowing rules do not address.

Noble Lords and others cite this amendment as a means to increase housebuilding. The Government are completely committed to seeing an increase in housebuilding, but not if it increases public sector debt beyond that which we can afford. In response to the noble Lord, Lord McKenzie, yes, we want to see local authorities active in promoting housebuilding, but through working with housing associations and other developers to release land and maximise private investment. For example, from 2011 to 2015, 170,000 more affordable homes are being delivered with more than £19.5 billion of investment—over 75% of which is being provided by the private sector.

Moreover, if local authorities themselves want to build, I remind noble Lords that the vast majority of council landlords—139 out of 167, more than 80%—collectively have £2.8 billion of borrowing capacity within the settlement, as the noble Lord, Lord McKenzie highlighted, some of which could be used for this purpose.

It is not that we do not favour more housing; we do. Equally, it is a central priority for the Government to ensure that debt is controlled, and this has spiralled out of control. I will not do the noble Lord a discourtesy in any sense, but the important issue is that this is about ensuring fiscal responsibility in all our policies. In proposing that local authorities work with the private sector and housing associations, we believe that this is the correct way forward. As I said at the start of my comments, it is not just about affordable housing; it is also about what level of debt is affordable. On that basis, I hope that, while the noble Lord may not agree with the Government’s position, he will see fit to withdraw his amendment.

[Lord Greaves]

The Minister referred to the 170,000 units of social housing which he said were being delivered. Is he absolutely confident that they are going to be delivered and, if so, can he provide us with a list or details of where they are going to be?

[Lord Ahmad of Wimbledon]

I did say that this would be a figure up to 2015, so we can certainly provide details of the ones that have already been delivered. We will make sure that we write to him about that.

[Lord Tope]

My Lords, I would indeed have been very pleasantly surprised if the Minister had stood up and accepted my amendment; I did not expect that, but I must admit to being a little disappointed with the reply. Perhaps I should make clear that I do not have a direct line to the Chancellor: my references were really only to what we can all see, read and hear in the public media. There are calls not least from the Mayor of London—who seems to have found favour again—to increase investment, and that would inevitably mean some borrowing. The borrowing we are talking about is very much prudential borrowing, in all meanings of that word. Without question, this issue is going to continue. I hope we will see some movement, but it will not continue further tonight. I beg leave to withdraw the amendment.

Amendment 57 withdrawn.

Amendment 57A

Moved by

[Lord Greaves]

57A: After Clause 6, insert the following new Clause—
“Planning obligations: limitations on use
Paragraphs 122 and 123 of the Community Infrastructure Levy Regulations 2010 (planning obligations) shall cease to have effect.”

[Lord Greaves]

My Lords, Amendment 57A introduces a new clause. Its purpose is to probe further into the future of planning obligations, and particularly the future of Section 106 agreements and their relationship to the community infrastructure levy, otherwise known as CIL. I am aware that I am continuing with what I said when the CIL regulations came out in 2010 and probably going even further back to the Planning Act 2008.

This is a probing amendment about incredibly obscure and esoteric things. I apologise to members of the Committee for introducing them at this time of night but I think they are important. I have attempted to understand the position but I cannot. That may be due to a lack of information, a lack of understanding or even a lack of intelligence on my part. If I cannot understand, I hope that the Minister can explain what is going to happen so that at least we can assess whether it will be satisfactory.

The future of Section 106 comes from paragraphs 122 and 123 of the CIL regulations 2010. They come from concerns that in some areas the substantial transfer of planning obligations to CIL from Section 106 will not be satisfactory, not least because CIL itself will not yield very much, if anything at all. It is perhaps a minor pending disaster in those parts of the country which are not very prosperous, where property and land values are not very high, and CIL levies may not be possible at all.

Paragraph 122 of the regulations puts a limitation on Section 106 planning obligations which in future must be,

“(a) necessary to make the development acceptable in planning terms;

“(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development”.

This has already happened and it means that Section 106 is more restrictive than it used to be. Paragraph 123 brings in further limitations and sub-paragraph (2) states that Section 106 obligations,

“may not constitute a reason for granting planning permission … to the extent that the obligation provides for the funding or provision of relevant infrastructure”.

I am paraphrasing to some extent but reading from parts of the regulations. Sub-paragraph (3) says that it,

“may not constitute a reason for granting planning permission to the extent that …

(b) five or more separate planning obligations … within the area of the charging authority; and

“(ii) which provide for the funding or provision of that project, or type of infrastructure, have been entered into before the date that obligation A was entered into”.

In other words, within a planning authority there will be a limit of five within each category of types of projects of Section 106 agreements. This rather oddly applies no matter what size the planning authority may be. The definition of infrastructure is related to the authority’s list of types of infrastructure that may be funded by CIL. The intention is that these new restrictions under paragraph 123 will be introduced in April 2014.

I have various questions for the Minister which I will put on record. I am quite happy for replies to these in writing because they are fairly technical, although they may just show my lack of understanding. After April 2014, how will the five-project limit work? Is it the same for large authorities and small ones? What type of project will be allowed for Section 106 obligations after April 2014 and how will they vary from what they are now? Do these restrictions cover all Section 106 agreements and do we assume that the council concerned has agreed to and has examined a CIL scheme? What is the position if a CIL scheme has not been agreed to, as in certain financial environments in less prosperous areas it may simply be impracticable? My advice is that in areas such as east Lancashire, it is not likely to be possible within the next four years.

How will viability, which we have discussed in the Committee today, affect all this? Does all this have any relationship at all to the Section 106 affordable housing agreements, and that whole agenda we have been talking about? What is the definition of infrastructure? Are there other Section 106 possibilities connected to an application that are neither housing nor infrastructure? When we discussed this earlier, the Minister said that not all authorities have yet got CIL schemes in place. It would be interesting to know what proportion of authorities already have CIL schemes in place, where they are, and, therefore, which authorities do not have them.

All this seems very complicated, and that may be because I do not understand it. It may all be crystal clear when the Minister explains it, but if I do not understand it then maybe one or two other people in the country do not, even those involved in the planning system. We need to get this sorted out. If the system that we have, and the changes which are going to take place, are simply not going to work or be satisfactory, then the Government need to look at it again. I beg to move.

[Lord McKenzie of Luton]

My Lords, not for the first time, we are indebted to the noble Lord, Lord Greaves, for a list of incisive and important questions. I simply ask that the Minister will copy the reply which I hope he will commit to give to the noble Lord, Lord Greaves, to others so that we can have it in good time for subsequent sittings.

[Lord Ahmad of Wimbledon]

My Lords, I am grateful to my noble friend Lord Greaves. He does himself an injustice in describing himself as not understanding issues to do with local authorities and planning. I certainly always learn a great deal from his contributions, as I have again today.

My noble friend’s amendment would remove the statutory tests for the use of planning obligations, the effect of which would be to return to a much broader use of Section 106. These statutory tests were introduced by the previous Government. Their purpose was to scale back the use of Section 106 so that it must be necessary, proportionate and directly related to the development in question. In these times of market uncertainty, it seems absolutely right that Section 106 is used to mitigate the impact of developments and no more.

The second purpose was to ensure that Section 106 could operate alongside the community infrastructure levy in a fair way. I remind the House that the community infrastructure levy was brought in to provide a transparent, non-negotiable and fair charge, addressing many of the concerns around the operation of Section 106. At this late hour, I will write on the specific question my noble friend raised about how many local authorities are already within this. Of course, as the noble Lord, Lord McKenzie, has asked, I will ensure that I copy that letter to all who have taken part in this debate.

The levy continues to be the Government’s preferred mechanism for collecting contributions to infrastructure. The scale-back of Section 106 sits alongside the roll out of the levy and prevents developers being charged twice for the same item of infrastructure. The effect of this new clause would undermine this, causing a dual system, which would serve to confuse; I am sure that that was not my noble friend’s intention. We therefore do not support the inclusion of this new clause which would undermine the progress that we are making with the community infrastructure levy. I hope that my noble friend is willing to withdraw his amendment.

[Lord Greaves]

My Lords, I made it absolutely clear that this is a probing amendment. It is simply a means of putting these questions on the table. The questions will clearly be set out in Hansard and I hope that the Minister’s welcome offer to write on some of these matters will tackle each of these questions in turn and provide some answers fairly quickly.

I will bring the amendment back on Report if I am not satisfied. This is an important question. There are parts of the country that CIL is really designed for. Where there are developments which are clearly profitable, even in the present financial circumstances, then CIL will work. In parts of the country, even on the best sites that may be available through the planning system, the imposition of CIL will make the developments unprofitable and unviable. That is the problem. If you do away with Section 106 on the one hand but you cannot impose CIL on the other, there is nothing left. That is the stark problem that is facing probably more parts of the country now than was the case when CIL was introduced five years ago. I am happy to withdraw the amendment now but I would be very grateful indeed to hear from the Minister. No doubt I will spend some happy hours trying to understand his letter and perhaps have some further discussions.

Amendment 57A withdrawn.

Schedule 2 agreed.

22:00

Clause 7 : Disposals of land held for planning purposes

Amendment 57B

Moved by

[Lord Greaves]

57B: Clause 7, page 10, line 10, leave out from “disposals,” to end of line 11

[Lord Greaves]

My Lords, the proposed amendment is to subsection (2) of Clause 7, which is about the,

“Secretary of State’s consent required for certain disposals for consideration less than the best that can reasonably be obtained”.

Subsection (2) is an amendment to Section 233 of the Town and Country Planning Act 1990. The new provision states:

“The Secretary of State may give consent under subsection (3) … in relation to any particular disposal or disposals, or in relation to a particular class of disposals”.

The next paragraph states,

“in relation to local authorities generally, or local authorities of a particular class, or to any particular local authority or authorities”.

The purpose of the amendment is simply to probe the Government’s intentions in relation to the particular class of disposals and in relation to broad categories of local authorities or, indeed, all local authorities. If the Government are putting this in legislation, they must have some idea of the kind of consents that will be given in a much broader way perhaps than exists at the moment. This could be extremely helpful to local authorities and very welcome.

I should say that I put down the final amendment to take out subsection (3) because I could not understand it. I looked at it and I looked at the legislation, and I still could not understand it. I thought that perhaps the Government can explain to me what it means. I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, my noble friend Lord Greaves has spoken to his amendments. I want to outline the Government’s position because we will be resisting them. However, he said that they are probing amendments. I also take on board his final point. I will refer to his comments when I get to Amendment 57D.

Before I respond specifically to the amendments in detail, it might help the Committee if I set out briefly what Clause 7 is intended to do. Local authorities have wide powers to acquire, appropriate and dispose of land. The main constraint on disposals of land is that if an authority wishes to dispose of land at less than the best consideration reasonably obtainable, it must obtain the consent of the Secretary of State. In order to avoid having to give decisions on minor disposals, the Secretary of State has the power to give general consents for specified classes of disposal for housing land and other land not held for planning purposes. However, there is no power under Section 233 of the Town and Country Planning Act 1990 to give a general consent for the disposal of land held for planning purposes at less than best consideration. So local authorities must apply to the Secretary of State each time such consent is required.

Before I continue, I remind the Committee that this clause had the support of all parties in the other place. The shadow Secretary of State for Communities and Local Government stated at Second Reading in the other place that the clause was sensible—I am sure that he did not say that about other clauses—and he supported the removal of the anomaly on disposal of land for less than best consideration.

Amendment 57B will stop the power of having a general disposal consent by preventing consent being given for a particular class of disposals. Perhaps I may illustrate this by reference to the general disposal consent under the Local Government Act 1972 for all land not held for housing or planning purposes. The class of disposal in that consent is all those disposals where the difference in value between the open market value and the selling price is less than £2 million, subject to certain conditions.

Amendment 57C will also wreck the point of having a consent by preventing it applying to local authorities generally or those of a particular class. I do not want to anticipate how a new general consent might be worded but I might speculate that the Government would want to give consent under this new provision to all local planning authorities, or all authorities to which Section 233 of the 1990 Act applies. Amendment 57C would prevent this.

My noble friend Lord Greaves referred to the deletion by Amendment 57D of subsection (3), which he said he did not quite understand. Here is my attempt to explain it and I hope he is clearer at the end. Subsection (3) adds a new subsection (9) to Section 233 to directly apply the protection set out in Section 128(2) of the 1972 Act. I am sure that that is clear but I will nevertheless continue to explain. The protection set out in Section 29 of the Town and Country Planning Act 1959 will no longer apply. This will mean that disposals of planning land and “other” land under the 1972 Act will be subject to the same procedures. The amendment would therefore remove a convenient provision for local authority users who are accustomed to using the Local Government Act.

I accept that that last point may require some re-reading of Hansard and some technical points may arise, but we will, if we can, between this stage and Report make any other clarifications that are sought. I hope that my noble friend will withdraw his amendment.

[Lord Greaves]

My Lords, noble Lords will understand why, in working my way through all those references, Acts and regulations, it felt like a game of snakes and ladders and I was not getting anywhere. However, I am grateful to my noble friend for those explanations, which I shall read carefully. It will form some good bedtime reading if I have difficulty getting to sleep one evening. Clause 7 is clearly highly desirable and I am pleased to beg leave to withdraw the amendment.

Amendment 57B withdrawn.

Amendments 57C and 57D not moved.

Clause 7 agreed.

House resumed.

House adjourned at 10.08 pm.