House of Commons
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Oral Answers to Questions
Mr John Baron (Basildon and Billericay) (Con)
1. What recent steps he has taken to increase the power of local authorities to tackle unauthorised development and protect the green belt.
Caroline Nokes (Romsey and Southampton North) (Con)
13. What steps he has taken to increase powers of local authorities to tackle unauthorised development.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
We have previously made it absolutely clear that Traveller sites are inappropriate development in the green belt. We are also considering responses to our recent consultation on proposals to give councils more freedom to use temporary stop notices to take swift and effective action against unauthorised caravans in the green belt and elsewhere. This builds on our earlier reforms to strengthen councils' enforcement powers, increase protection for the green belt, and ensure fair play throughout planning.
Mr Baron
We are very grateful locally to the Government for their help during the clearance of the illegal Dale Farm Traveller site. I know that the Government are considering a series of further measures to tackle unauthorised development, which is grossly unfair on local communities, but may I urge the Secretary of State to go further than he is considering at the moment? For example, will he consider whether illegal development should become a criminal offence, always bearing in mind what is reasonable?
Mr Pickles
My hon. Friend has been a doughty defender of his constituents and was instrumental in finding a solution to Dale Farm. Should we decide to give councils more freedom to use temporary stop notices, subject to consultation, they would allow an unlimited fine, which may give people pause for thought. The Government are reluctant to make it a criminal offence.
Caroline Nokes
In the immediate Romsey area there have been several instances of retrospective planning applications involving Traveller sites. What reassurance can my right hon. Friend give my constituents that planning law is a level playing field that applies equally to everyone and that local authorities will have more robust powers to deal with the problem?
Mr Pickles
My hon. Friend raises an important point. The Localism Act 2011 gives applicants a chance to appeal either the enforcement notice or retrospective planning. The problem with the previous regime was that it was possible to appeal both and thereby prolong occupation of land where it was inappropriate.
Bill Esterson (Sefton Central) (Lab)
A developer in Lydiate in my constituency has made clear his plans to build in the green belt, despite the existing urban development plan making it clear that it is against the policies. Is not the best way to protect the green belt and valuable urban green space to go back to a system with a more regional approach so that there is not this push for development in the green belt?
Mr Pickles
The short answer is no. The regional approach was about handing out targets that were never met. I have the basic old-fashioned view that his constituents are in a much stronger and better position to decide where a development should go than I am.
David Wright (Telford) (Lab)
There is a real problem in Telford, not just with illegal Traveller encroachment on green space but on industrial estates, which is really bad for businesses. When companies come to visit Telford, they do not want to see Traveller encampments all over our industrial estates. There is a mixed land ownership pattern, with some owned by the local authority, some privately owned and some Homes and Communities Agency land. Will the Secretary of State meet representatives and me to see whether we can toughen the law to get these people moved on so that businesses can operate effectively in Telford?
Mr Pickles
It is always a pleasure to meet the hon. Gentleman. As he knows, I have a soft spot for Telford. I spent a lot of time during the last election trying to unseat him, without any success. The point about industrial land is a good one. Telford is clearly a key strategic location and, subject to the consultations, the announcement that we may or may not be about to make will help with that process. We have issued guidance to local authorities, but if my sitting down with him and local authorities to try to work something out would help, I am happy to do so.
Julie Hilling (Bolton West) (Lab)
2. What assessment he has made of the effect on working families of changes to council tax benefit to be introduced in 2013-14.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
An assessment of the impact of the Government’s policy framework for localising council tax support is available on the Department’s website. Local authorities are responsible for the design of local schemes and the assessment of their impact.
Julie Hilling
In Bolton, 3,200 families will have to find up to £15 a week to cover the Government’s cut in housing benefit, and they might also be affected by the bedroom tax and tax credit and disability benefit cuts. Does the Minister agree with Lord Jenkin that for my families in Bolton West that is a “poll tax mark 2”?
Mr Foster
Council tax doubled under the previous Labour Government and it was necessary to take action. I am pleased that the hon. Lady’s local authority has developed a scheme that protects the most vulnerable and ensures that work pays and that, as a result, it has an additional £500,000 in the transitional grant.
Andrew Bridgen (North West Leicestershire) (Con)
The Government have stated that all schemes must contain measures that incentivise local authorities to ensure that recipients either stay in work or find work. Does that not show that the reforms are based on ensuring that all those who are willing to and can work do work?
Helen Jones (Warrington North) (Lab)
Why do Ministers keep claiming that they are freezing council tax when they are actually increasing it for 700,000 of the poorest working people in this country? Does it not say everything about the Government’s priorities that a low-paid couple with children will have to find between £96 and £304 a year, and a single working parent will have to find up to £577, while they are giving a tax cut to millionaires? Is not the truth about this Government that, despite their rhetoric, they are giving a slap in the face to hard-working people while putting out a bowl of cream for the fat cats?
Mr Foster
May I give the hon. Lady two basic facts? First, the reduction we have made in council tax benefit represents less than half of 1% of a council’s budget. Secondly, as a result of the pressure we have put on local councils, the average reduction in council tax since we took office is now nearly 10%.
Jake Berry (Rossendale and Darwen) (Con)
Will my right hon. Friend join me in congratulating Conservative-controlled Lancashire county council on its decision not to freeze council tax but to give hard-working families a 2% cut, which will benefit all families whether or not they receive benefit?
Mr Foster
I am more than happy to praise my hon. Friend’s local council and all those that have done their utmost in difficult times to protect working families through a real-terms reduction in council tax, which makes a huge difference to working people, and at the same time introducing schemes that will protect the most vulnerable and ensure that work pays.
Nicholas Soames (Mid Sussex) (Con)
3. What plans he has to close the funding gap between urban and rural local authorities.
Andrew George (St Ives) (LD)
6. What his policy is on the funding gap between rural and urban local authorities; and if he will re-open the 2014-15 settlement.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I recognise the case that has been made for funding for rural authorities. In February we made some adjustments to the financial settlement for 2013-14 and confirmed changes to sparsity top-ups.
Nicholas Soames
I thank my hon. Friend for that answer, but does he agree that rural authorities are due to receive, on average, a 5.58% reduction in formula grant, which is more than two percentage points greater than urban authorities, which are due to receive, on average, a 3.54% reduction? Is not that actually extremely unfair and not a sensible way to encourage growth in the rural economy?
Brandon Lewis
This year we changed the sparsity levels within the banding so that the reduction for rural areas is not as great as that for urban areas, thereby slightly narrowing the gap. I appreciate that Members who represent rural areas have made a strong case this year for going even further, which is why we brought in £9 million-odd in extra finance to help local authorities servicing those rural communities with deprivation.
Andrew George
I am grateful to the Minister for that response, but surely if he will applaud Cornwall council, for example, for freezing its council tax this year, he must accept that it has been persistently underfunded despite being the poorest region of the UK. When will Cornwall and places like it get a fair share of the available money?
Brandon Lewis
The hon. Gentleman is absolutely right: Cornwall has frozen its council tax this year. That is good news for residents across Cornwall, and I am pleased that the council decided to do it. Throughout the finance-setting debate we discussed the difference between rural and urban areas, and that is why we put in the extra money to help to narrow the gap. Over the course of the year, before next year’s settlement, we will continue to discuss the situation with Members representing rural areas, although I must be clear that only in exceptional circumstances would we reopen the settlement.
Mr Gerry Sutcliffe (Bradford South) (Lab)
One of the reasons for the gap is that urban areas have to deal with the influx of European workers who come here under freedom of movement, and cities such as Bradford have to bear the brunt of that. Has the Department looked at this issue in relation to the concentration of new workers coming to areas such as Bradford?
Brandon Lewis
When we do the setting every year we look at all the developments in different communities. People are also moving into rural areas. In Norfolk we would class ourselves as rural, but we have a population coming from overseas as well. It is something that we consider across the board.
Alison McGovern (Wirral South) (Lab)
I am proud to be from Wirral, not least because we are the perfect mix of rural and urban together, but people in Wirral are suffering from the severity of the Government’s cuts, which are linked to deprivation levels. When will the Government say what they will do to tackle deprivation, especially in areas such as Merseyside where it has hit councils so hard?
Brandon Lewis
It is sometimes easy to forget, and I remind the hon. Lady, that an area such as Liverpool has a much higher base start in the first place. A constituency such as mine, which has some very high deprivation, has a spending power of £2,200 per dwelling, whereas Liverpool’s is up at about £3,000. There is a big difference in the first place, and we have to bear that in mind when we are trying to make comparisons between different authorities.
Mr Philip Hollobone (Kettering) (Con)
4. Which county council has set the lowest council tax in England.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
Councils are in the process of setting their budgets for the coming financial year, and we will, as a Department, publish official figures in due course. As well as recognising areas such as Lancashire that have done superb work in cutting council tax, as has Dorset by 5% this year, I can confirm that Northamptonshire county council currently has the lowest council tax of any county without a separate fire authority.
Mr Hollobone
Northamptonshire county council is proud to have the lowest county-council council tax in the whole of England, and it has frozen its council tax for the past three years. Will my hon. Friend the Minister congratulate Councillor Jim Harker and his team of Conservative councillors on Conservative-controlled Northamptonshire county council on delivering the most affordable county-council council tax in the whole country?
Brandon Lewis
I am absolutely delighted to give those congratulations. It is superb to see Conservative county councils across the country, of which my hon. Friend’s is a particularly good example, working hard to deliver cost-effective services for their residents. It is also appropriate to say, while I am at the Dispatch Box, that his district council should be commended for the excellent work it is doing on freezing council tax. It is taking this financial settlement in the right way and looking to the future in terms of how it can deliver growth for its area and thereby create real benefit for its residents locally.
Stephen Mosley (City of Chester) (Con)
5. What steps he has taken to help pensioners with their council tax bills.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
Under Labour, council tax more than doubled, hitting pensioners the hardest. We have worked with councils to freeze council tax, cutting bills by almost 10% in real terms. This April, taxpayers will also have the new right to pay their bills over 12 months if they wish to do so, helping those on fixed incomes, such as pensioners, to manage their monthly outgoings.
Stephen Mosley
My right hon. Friend is totally correct that the doubling of council tax under Labour hit those on fixed incomes, such as pensioners, the hardest. May I welcome the work he has done on this over the past three years? Will he endeavour to make sure that the council tax freeze programme continues until, and beyond, the next general election?
Mr Pickles
That will of course largely be up to the willingness of local authorities to take the freeze or not. We managed to stop and to reverse the bill that just kept on rising, and that is an important milestone that will have enormous effects in putting more money back into people’s pockets.
Andrew Percy (Brigg and Goole) (Con)
This year North Lincolnshire council has frozen council tax for the third year. In this year’s budget-setting meeting, the opposition Labour group made proposals to cut social care to 25% of those in receipt of it, and that was voted down by the Conservatives. Will the Secretary of State congratulate North Lincolnshire council on protecting social care for elderly and vulnerable residents in these tough times?
Mr Pickles
I have to say that I am shocked at the very thought that the Labour party would cut help to the most vulnerable, but I am afraid that that has been the pattern throughout the land. Labour has been hitting the poor and its Members would also have hit pensioners if it had been up to them.
Amber Rudd (Hastings and Rye) (Con)
7. What steps he has taken to help local authorities to deliver sensible savings in local government.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
We have published “50 ways to save”, a practical guide to councils on how they can save money and still protect front-line services. We are also supporting councils with more detailed guidance, including how to save money by scrapping taxpayer funding of trade unions and sacking town hall pilgrims.
Amber Rudd
My own Hastings borough council has recently entered into a shared recycling and waste service with three other local councils, saving up to £600,000 for Hastings alone. Does the Secretary of State have any other suggestions for shared services that councils can enter into in order to make greater savings?
Mr Pickles
My hon. Friend will recall that Hastings was the council that the previous Labour Administration forgot, in that they abandoned it with regard to the level of grant and we had to put in transitional measures to help it. I recently met the leader of Hastings council, who suggested his willingness to work alongside us to increase the council’s efficiency. Adur and Worthing councils are not far away and have saved more than £9 million by forming a single senior officer structure and by sharing services. I urge my hon. Friend to urge her council to adopt a similar approach.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
21. Is the closure of children’s centres one of the Secretary of State’s top 50 ways to save money? Many local authorities are closing them because of the economic situation they find themselves in and the lack of Government support.
Mr Pickles
Conservative councils throughout the country are doing exactly the opposite. It is about time that Labour councils stopped shroud waving and accepted that they do these things under their own decision. If they want additional resources, there is nothing to prevent them from applying for an increase in council tax. The only problem, of course, is that they have to persuade their population of that, so I suggest that the hon. Gentleman become slightly more silver tongued with his population than he is with me.
Andrew Selous (South West Bedfordshire) (Con)
20. Central Bedfordshire council has managed to reduce its costs by £52 million while maintaining and, in some cases, even improving standards. Does the Secretary of State agree that where Central Bedfordshire leads, other councils could usefully follow?
Mr Pickles
That is, of course, true of many things that Central Bedfordshire does. I urge my hon. Friends to be careful about making such points because of the pain they are causing Labour Members, whose stress levels are enormous. They obviously feel desperately ashamed of their own Labour councils.
Graham Jones (Hyndburn) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
Lancashire county council has just produced a 12-page, full-colour newspaper of propaganda on the rates, which the Secretary of State has criticised in the past. Does he agree with 12-page, full-colour propaganda being put out just before an election, wasting ratepayers’ money?
Mr Pickles
I tell you what: if every council cuts its council tax by 2%, I might re-look at some of the unpleasant things I have talked about. I will look carefully at what the hon. Gentleman has mentioned, but I suspect that it is an honest assessment of the current situation, that it gives information to people and that we will not find horoscopes or TV listings in it. Lancashire has a vibrant local press.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
8. How many new homes were started in England in 2012. [R]
The Minister for Housing (Mr Mark Prisk)
The number of new homes started in the year to April 2012 was 105,090. Overall, the net additions to the housing stock stood at 134,900, the highest level for four years.
Mr Raynsford
I draw attention to my interests in the register.
I remind the Minister that the number of new starts in 2012 was fewer than 100,000. The latest figures from the National House-Building Council show that private sector housing starts were down 13% in the three months to the end of January 2013, and those for affordable housing starts for the same period showed an annual fall of 19%. Do not those figures show a terrible story of the failure of the Government’s housing policy?
Mr Prisk
I am sorry to disappoint the right hon. Gentleman, who was an experienced Minister performing my role in the last Government, but if we look at completions—homes that families can actually move into —we see that there has been a rise of 8% over the past two years. I would have thought that the Labour party welcomed that.
Mr James Gray (North Wiltshire) (Con)
19. Does the Minister agree that one problem is that developers buy large quantities of land and get planning permission for it, but do not build on it? That means that when the next lot come along and ask for planning permission for more land, they get it because not enough houses are being built. Surely it is time that we had time-limited constraints on planning permission so that developers are required to build on land before the planning permission runs out of time.
Mr Prisk
The key issue is that by getting rid of regional spatial strategies and moving towards local plans, under this Government local people and their representatives will have the opportunity to set that agenda. I take my hon. Friend’s point. We want to ensure that planning permissions are used properly.
Jack Dromey (Birmingham, Erdington) (Lab)
With the toxic combination of the biggest housing crisis in a generation and a flatlining economy, Britain badly needs a Budget for jobs, homes and growth. We are now told that there is to be the fourth “get Britain building” launch. Will the Minister confirm that the third launch last September of a £10 billion guarantee fund has seen not one brick laid and not one house built? Will he explain why, if his policies are working, housing starts fell by 11% in 2012 to just 98,000? Has the time not come for the Government to stop talking and start building?
Mr Prisk
As always, the hon. Gentleman provides entertaining rhetoric, but the facts are wrong. The net addition to the housing stock, taking into account new homes and our work on empty homes, which we rarely hear about from the Labour party, is 11%. He needs to rehearse his rhetoric more often.
Mr Speaker
Order. If the hon. Member for Mid Dorset and North Poole (Annette Brooke) had been standing, I would have called her, but she was not, so perhaps I will not. If she wants to, I will.
Annette Brooke (Mid Dorset and North Poole) (LD)
22. I was going to stand on the next Question. Will the Minister for Housing consider a mechanism by which the borrowing capacity of an authority that has chosen not to use or is unable to use all its borrowing facilities can be passed to an authority that, in turn, could facilitate arm’s length management organisations to build housing when there is capacity to do so?
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
A recent report by Shelter, “The Rent Trap”, shows that rents are rising across the country by an average of £300, but that people are struggling to pay them because of stagnating wages. Does the Minister accept that the housing shortage is putting up rents?
Mr Prisk
I accept that the sad loss of 421,000 social homes under the last Labour Government has created, to use the words of the hon. Member for Birmingham, Erdington (Jack Dromey), a deep-seated housing crisis. However, the picture on rents is more mixed than the hon. Lady suggests. In some areas, rents have risen, but the overall evidence suggests that over the past 12 months they have been static.
Richard Graham (Gloucester) (Con)
9. What steps he has taken to enable social housing managers to provide new housing.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
The coalition Government’s reforms of council housing finance have given local authorities direct control of their rental income. That has given them the freedom to borrow nearly £30 billion, of which £2.8 billion remains available to use for new housing.
Richard Graham
The Minister and his colleagues know how keen I am to help restructure Gloucester’s social housing arm’s length management organisation, Gloucester City Homes, which is one of The Sunday Times top 100 employers, so that it can play a significant role in providing homes in Gloucester without adding to the public sector borrowing requirement. My hon. Friend the Minister for Housing sees the importance of that to Gloucester’s growth and regeneration. Will he agree to see me before the Easter recess to discuss where the talks have got to and how we can make things happen?
Mr Foster
My hon. Friend is right to give huge praise to Gloucester City Homes, which is an excellent arm’s length management organisation. I congratulate him on the pressure he is putting on my Department to ensure that we bring forward as quickly as possible a new scheme to support housing transfers. While the Minister for Housing will be keen to meet him beforehand, I am sure that we will make an announcement later in the spring.
Caroline Lucas (Brighton, Pavilion) (Green)
Is the Minister aware that some housing associations are excluding poorer people from tenancies because of concern over their ability to pay in the face of Government welfare cuts? Southern Housing Group, for example, has said that reluctantly it tends to let affordable homes in new schemes only to working households. Will the Minister tell the House who exactly will house vulnerable people who are being excluded by housing associations as a result of this Government’s so-called reforms?
Simon Hughes (Bermondsey and Old Southwark) (LD)
Many Liberal Democrat councillors around England would like to see more council housing and housing association property built in their areas. What can the Government do to encourage and support both those initiatives?
Mr Foster
My right hon. Friend has long championed the importance of local councils being able to do more in developing further housing for people in their areas, and he must wait just a few days for a further announcement on that issue. As I have already said, given the changes that the Government have made to the housing revenue account system, £2.8 billion is still available for local councils to spend on housing.
Miss Anne McIntosh (Thirsk and Malton) (Con)
10. What recent representations he has received on the implementation of the national planning policy framework in rural areas; and if he will make a statement.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
I receive representations from all sorts of people, and most of them—I am glad to say—recognise that local authorities are making excellent progress preparing local plans, and that the framework is helping those deciding planning applications to strike a balance between the protection of our environment and support for sustainable development.
Miss McIntosh
Will my hon. Friend clarify advice that he recently made public about building wind farms in inappropriate areas where there will be blight on the countryside, and on building on flood plains which may also be inappropriate?
Nick Boles
My hon. Friend will be aware that the Minister of State, Department of Energy and Climate Change, our hon. Friend the Member for South Holland and The Deepings (Mr Hayes), has issued a call for evidence on the role of communities in helping decide applications for wind farms. That evidence is now being considered and the Minister and I will meet soon to discuss what implications it should have for local plans. The national planning policy framework is clear about the importance of taking flood plains into account when preparing local plans and making decisions on appropriate development.
Roberta Blackman-Woods (City of Durham) (Lab)
Last year while considering the national planning policy framework, the then Planning Minister failed to listen to Labour Members and the many campaign groups who said that, with no assistance, 12 months would not be long enough to get all areas covered by local plans. We now learn that 52% of local authorities do not have a local plan in place. Will the current Minister learn from his predecessor’s mistakes and act now to ensure that those areas unprotected by a new local plan are not inundated with inappropriate development when transitional arrangements end in nine days’ time, or is that part of his scheme to replace planning with chaos?
Nick Boles
The hon. Lady would be arguing on stronger ground if she admitted that, under the previous Government, by May 2010 only 17% of local authorities had a local plan adopted, and 32% had one published. Now, 48% of local authorities have plans adopted and 71% have plans published. Progress has been excellent and we will keep the pressure on local authorities to produce those plans.
Sir Bob Russell (Colchester) (LD)
Is the Minister concerned about urban creep into rural areas destroying the open countryside within urban fringe fields and between towns and adjoining villages?
Nick Boles
I would be concerned if that were happening, but it is not and so I am not concerned.
Sir Tony Baldry (Banbury) (Con)
I was waiting for a question from my hon. Friend the Member for Wellingborough (Mr Bone)—
Mr Speaker
I normally think the hon. Gentleman is waiting behind the curve but he is ahead of the curve and we are grateful to him for that. After 30 years in the House his enthusiasm is undiminished.
Mr Peter Bone (Wellingborough) (Con)
11. What steps he is taking to encourage development on brownfield sites.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
I hope that in 30 years’ time my enthusiasm will be equivalent.
The national planning policy framework is clear that planning should encourage the effective use of land by reusing brownfield land if it is not of high environmental value.
Mr Bone
I thank the wise, intelligent and helpful Minister for that answer. In my constituency, we have a derelict brownfield site at Rushden Lakes Skew Bridge. The local Conservative-controlled council has given planning permission for a large retail and leisure development, which will create 2,000 new jobs. Does the Minister agree that that is exactly the sort of project the economy needs?
Nick Boles
My hon. Friend is aware that that application has been called in by the Secretary of State. I therefore cannot comment on it specifically, but I can reassure him that the Secretary of State, in all planning decisions, takes into account economic benefits, and all other impacts on the economy and the environment.
Mr Clive Betts (Sheffield South East) (Lab)
Les Sturch, the head of planning and development at Sheffield city council, has drawn to my attention what I assume is an unintended consequence of chapter 6, paragraph 47 of the national planning policy framework, which requires local authorities to identify in their local plans a five-year supply of sites that are deliverable and viable. The problem is that developers say that, in the current circumstances, most brownfield sites are not viable. That forces the local authority to go back and identify far more greenfield sites for development than the local community wants. That is happening all around the country. Will the Minister meet me and officers from Sheffield to discuss how that situation could risk completely undermining the Government’s “brownfield first” policy?
Nick Boles
I would be happy to meet the hon. Gentleman, who is Chair of the Select Committee on Communities and Local Government and very knowledgeable on the subject. There is no point putting into a plan sites that have no chance of being developed. A balance needs to be struck on whether they are potentially viable.
Sir Tony Baldry (Banbury) (Con)
In north Oxfordshire, we want to build new houses on former Ministry of Defence brownfield land; we want new social housing, new self-build housing and new housing; and we want a new garden city in Bicester. Will Ministers assist us in our endeavours?
Nick Boles
That is exactly the kind of local leadership that we are looking for, and that we believe will produce more housing development that is more acceptable to local people, unlike the failed top-down approach of the previous Government.
Barry Gardiner (Brent North) (Lab)
I was astonished but delighted to hear the caveat that the Minister inserted in his initial response to the question—that brownfield developments should be environmentally suitable. Does he acknowledge that many brownfield sites have specific value for what is often unique biodiversity on previous industrial and chemical sites?
Nick Boles
I thank the hon. Gentleman for making that point, because it is an extremely important one. That is why we changed the policy from the one adopted by the previous Government, under which there was a strong, blanket nudge to use brownfield land. We are saying that if the brownfield land is of high environmental value, it should not be a priority for development.
Andrew Gwynne (Denton and Reddish) (Lab)
12. What recent assessment he has made of the results of Government schemes to increase house building.
The Minister for Housing (Mr Mark Prisk)
The Government monitor the rate of house building very closely. For example, we have completed 58,000 affordable homes in 2011-12. We assess that to be one third higher than the average delivery of affordable homes in the 10 years before the last general election.
Andrew Gwynne
But the Prime Minister over-hyped his NewBuy guarantee by saying that it would help around 100,000 families to access affordable mortgages—so far, only 1,500 households have benefited from that initiative. Will the Minister pull his finger out and help the 98,500 families that were promised access to affordable mortgages by the Prime Minister?
Greg Mulholland (Leeds North West) (LD)
In the Leeds city council area, developers are exploiting the planning framework to build expensive housing on greenfield land. At the same time, there is an acute shortage of social housing, and there are empty homes, in Headingly and Hyde Park. Will the Minister join me in encouraging Leeds city council to use its powers to buy some of those homes for social housing, which they can do under new powers?
Stella Creasy (Walthamstow) (Lab/Co-op)
In answer to the question from my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell), the Minister seemed to suggest that the cost of rent is a mixed picture across the country. Let me be clear: research from Shelter shows that rents have gone up in 83% of areas. In my community alone, families are spending 60% to 70% of their monthly income on housing. Can I again press the Minister to say whether he thinks that the shortage of housing is causing a cost of living crisis, and what is he going to do to ensure that families keeping a roof above their heads do not have to go without food on their tables?
Mr Prisk
Let us look at the figures. Shelter’s numbers relate solely to new rental and not to the whole market—a very small proportion. Have we inherited a crisis? We have taken on difficult circumstances. Unlike the previous Government, under whom 421,000 affordable homes were lost, we are committed to ensuring that there are 170,000 more. We are committed to building more rented, social and owner-occupied housing.
Laura Sandys (South Thanet) (Con)
14. What steps his Department is taking to support neighbourhood planning.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
Following Upper Eden’s resounding yes vote in the first neighbourhood planning referendum on 7 March, the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster), announced a £9.5 million support programme for the next two years. This will offer direct support and grants of up to £7,000 to help more communities follow in Eden’s footsteps.
Laura Sandys
Communities in Sandwich, Ramsgate, Broadstairs and Margate are keen to take up local neighbourhood planning. What would you say are the critical success factors, and what are you giving local authorities to support these communities develop exciting new planning?
Mr Speaker
Order. I am not giving local authorities anything for this purpose, but I have a feeling that the Minister will claim that he is.
Nick Boles
Indeed we are. In 2013-14, we are offering local authorities £30,000 per neighbourhood plan to help communities defray the costs of achieving their plan. The most important success factor is to involve local people, consult them throughout the process, and then remind them that an adopted neighbourhood plan will bring 25% of future revenues from the community infrastructure levy, which can be spent by the community on its priority.
Andrew Stunell (Hazel Grove) (LD)
15. What steps he is taking to address the gap between the energy efficiency standards for new homes and their energy performance.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is vital that new homes achieve the levels of energy performance expected, and not all are. The industry has put together a programme of work led by the zero carbon hub to identify problems and put in place solutions. The Department is pleased to be able to support, through a grant, the hub’s work.
Andrew Stunell
I welcome my right hon. Friend’s words. I draw his attention to the Prime Minister’s speech on 4 February to the Royal Society, in which he set out the Government’s intention to be the most energy efficient country in Europe. Will my right hon. Friend take that as strong encouragement to publish the revisions to part L and the improvement in building energy efficiency, which are somewhat overdue?
Mr Foster
I thank my right hon. Friend. I am always happy to take advice from my right hon. Friend the Prime Minister, but I can assure both my right hon. Friend and the Prime Minister that I hope to make an announcement before the summer about improvements in the energy efficiency of buildings in part L of the building regulations.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I hope that the Government will honour their zero carbon home commitments. Yesterday I was at the Ideal Home exhibition, and I understand the housing Minister will be visiting it on Wednesday. In the exhibition is a home on which the Government have spent thousands of pounds to promote their green deal energy efficiency scheme. Do the Minister and the Department share my serious concern that there is no one on hand to explain to the public what the green deal scheme is, or to answer any questions they may have?
Mr Foster
We will certainly have a look at attendance at the exhibition, but already 1,803 green deal assessments have been lodged and 77 green deal assessor organisations are in place. We are making significant progress, but I will look at the point raised by the hon. Lady.
Rushanara Ali (Bethnal Green and Bow) (Lab)
16. What representations he has received which support the privatisation of fire and rescue services.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
The short answer is none. The Labour party’s claim that the Government are privatising, or seeking to privatise, the fire service is completely untrue. Rather, we are supporting locally led mutuals and co-operatives, which I would have thought the Labour party would have backed, given that its coalition partner is the Co-operative party.
Rushanara Ali
The fire service Minister has written to the Chair of the House of Commons Regulatory Reform Committee outlining plans that could lead to 112 fire stations across Greater London being run by a private company. Why is he planning to take such risks? I do not agree that there is no plan. We know already that companies such as AssetCo have cost taxpayers millions of pounds. Will he give a straight answer?
Brandon Lewis
I just did. The Labour party is giving out information that is simply not correct. We are looking to work with an area such as Cleveland, for example, where the Labour-led fire authority wants to mutualise. We think that mutualisation is good and the right thing to do, so I am disappointed that the Labour party seems to be turning away from co-operatives and mutuals. I would have thought it supported them, given the discussion in a recent publication by the Co-operative party containing a foreword endorsed by the leader of the Labour party.
Chris Williamson (Derby North) (Lab)
Nobody believes the housing Minister—the fire Minister, I mean, although I do not believe the housing Minister either, given his answers to previous questions. Nobody believes the fire Minister when he says he has no plans to privatise the fire and rescue service. After all, the Conservative party has form on this. If he does not want to privatise it, why did he write to the Regulatory Reform Committee seeking its views
“on our proposals for a Legislative Reform Order that would enable fire and rescue authorities in England to contract out their full range of services to a suitable provider, including a public service mutual...or other appointed contractor?”
Brandon Lewis
I have to congratulate the hon. Gentleman, who spoke about this last week at the Local Government Association’s fire conference, on his ability to start a campaign to stop something that was never started in the first place. As I have outlined, the simple fact is that Labour-led Cleveland fire authority wants to consider mutualising. Unlike the Labour party, it seems, we are happy to support employee ownership in mutuals, and will continue to do so. I hope that the Labour party will go back to supporting co-operatives.
Mr Stephen Hepburn (Jarrow) (Lab)
17. What plans he has for reform of council tax benefit; and if he will make a statement.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
Council tax benefit was abolished and replaced by local council tax support schemes in the financial settlement and will take effect from 1 April. We must remember that council tax benefit spending more than doubled under the previous Administration. Our reforms mean that local authorities will have control over what they do locally and an incentive to drive local economic growth.
Mr Hepburn
Thousands of the poorest families in my constituency are facing huge council tax rises as a result of the changes to council tax benefits. Will the Minister try to justify on the one hand slapping down poor people—people who live from hand to mouth day after day—while on the other hand giving millionaires tax cuts?
Brandon Lewis
I call on the hon. Gentleman to put pressure on his local authority to come up with a really good scheme that delivers good local growth and protects people. The Government have put in place support to protect the most vulnerable, as well as setting out guidelines to protect pensioners. I am disappointed that he could not persuade his local authority to do the right thing, like many Conservative authorities are doing.
Mr John Baron (Basildon and Billericay) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
The Government today published their response to Lord Heseltine’s comprehensive report, which reinforces the Government’s local approach to growth and the economy and would give more powers to councils and local enterprise partnerships. I have also announced today the revocation of the regional strategies for the east midlands and the north-east, showing that we are transferring power down to local communities from Whitehall and unelected regional quangos. Also, as religion comes within my Department, I would like to take this opportunity to wish His Holiness the Pope a long and fruitful ministry.
Mr Baron
I thank the Secretary of State for his response, but may I suggest that a bit more clarity about the duty, set out by the Government, to co-operate with neighbouring authorities when identifying land for development would be helpful for local councillors? For example, if one council asks another for help or co-operation, but that council refuses, has the box been ticked or is there further recourse?
Mr Pickles
We will be issuing further guidance on the duty to co-operate. My hon. Friend makes an important point, because this is a new thing. This and other adjoining measures are designed to ensure that local authorities, in co-operation with their local enterprise partnerships, start to think strategically, and from small beginnings I expect this to grow.
Hilary Benn (Leeds Central) (Lab)
All round the country, hundreds of thousands of low-income households are starting to receive letters from their councils telling them that they will be hit by the Secretary of State’s new poll tax, so taking money out of their pockets. Can the right hon. Gentleman tell the House how many people in his local authority of Brentwood are being affected?
Mr Pickles
I was giddy with excitement, along with my constituents, to learn that the right hon. Gentleman paid us a visit last Thursday to see the Labour group. There are two members on the Labour group; they are called Mike and Julie. We have to point out that each local authority has to come to its own decision and publish its own facts. We do not do this centrally anymore. We also need to understand that each local authority is responsible for its schemes.
Hilary Benn
The Secretary of State has imposed the tax, but he does not even know what is going on in his own local authority. I will tell him the answer to the question: Brentwood council says that 2,000 households will be affected. Last week on my visit I did indeed meet one of those affected. She was a woman who will be hit by the bedroom tax and by his new poll tax. She cannot afford it. She will probably have to move out of the area with her son, taking her away from friends, family, neighbours and the support that she relies on. She does not think it is fair, and I do not think it is fair. What has he got to say to her?
Mr Pickles
In the town hall, the Labour party has a very small room, and everybody heard what she had to say and everybody heard him planning this particular question. The figures he has produced are approximate, because nobody entirely knows yet. He knows that any figure with a nought at the end is an approximate figure—or he should know that. It is about time that he and the Labour party woke up to their responsibilities. If they are imposing a tax on the poor, it is entirely up to the local authorities to act. They have the power—indeed, a number of authorities have the power—to remove this completely, but they hide behind and seek to persecute and to tax the poor.
I know that the right hon. Gentleman knows plenty about a bedroom tax, because he has got plenty of spare bedrooms himself.
Lorely Burt (Solihull) (LD)
T2. What assessment has been made of the number of new homes that could be built if relatively small patches of local authority-owned brownfield land could be sold to provide private landlords for house building?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
I thank my hon. Friend; she is absolutely right. She knows that the Government are keen to see building on brownfield land where it is not of environmental value. We have provided a number of separate funds to help to unlock that. The Residential Landlords Association is now coming forward with some other interesting, additional ideas for ways to move forward and we look forward to hearing those proposals.
Mr Speaker
Order. The hon. Lady does not get a second bite of the cherry. She has had one go. She may feel like another, but I am not sure the House will necessarily feel the same way. We are grateful to her; we will bear her in mind for another day.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
T4. Oldham council estimates that more than 2,500 households will be affected by the bedroom tax, yet there are only 500 one-bedroom flats that families are able to move into. Knowing that, why did the Government make funding available for only 100 new affordable homes to be built last year?
Mr Pickles
Oldham should put in a scheme that protects those people from having to pay anything. I have to say that people in Oldham pay £900 a year per household to subsidise housing benefit. If they want to pay more to subsidise it, they can do.
Miss Anne McIntosh (Thirsk and Malton) (Con)
T6. May I ask my dear chum the Secretary of State for his advice on the help available from his Department for community projects such as the Pickering “Slow the flow” defence project and the Filey swimming pool? Will he give me a teach-in on how we can apply for such help and the criteria that we would have to meet?
Mr Pickles
It is always a great pleasure to meet my honourable chum. Perhaps, shortly after these deliberations are concluded, she will join me for a warming beverage in the Tea Room.
Rosie Cooper (West Lancashire) (Lab)
T5. West Lancashire borough council has just entered into an agreement with One Connect, a joint venture between Lancashire county council and BT to provide specified services. What steps is the Secretary of State taking to ensure that all councillors on both authorities will not be prevented from exercising their fiduciary duty to their council tax payers under the guise of commercial confidentiality? Will he investigate the openness and transparency of those arrangements in relation to the use of public moneys?
Mr Pickles
I think I have actually visited that site and that venture of co-operation. It is a very good thing, and I think it will help out the process. If the hon. Lady has a particular problem about a lack of transparency in relation to the importance of councillors ensuring that their constituents are treated fairly, I will happily look into it.
George Eustice (Camborne and Redruth) (Con)
T8. Will the Secretary of State update the House on the progress on implementing the Government’s home on the farm policy, which will make it easier to develop housing on derelict farm sites to meet local needs?
Mr Foster
I am delighted to be able to tell my hon. Friend that the Department is having discussions with the National Farmers Union and with local authorities on ways of developing the scheme further. A number of neighbourhood plans have already produced some exciting ways of addressing the problem, and he can look forward to hearing further announcements on the issue in the near future.
Graham Jones (Hyndburn) (Lab)
T7. The Government talk about localism, but they still set the caps for the licensing of various shops in town centres, including bookmakers and sex shops. Will they consider abolishing those caps and allowing local people and local authorities to set the levels?
Mr Pickles
That is an interesting and brave request, and I will consider it.
Neil Carmichael (Stroud) (Con)
Does the Secretary of State agree that neighbourhood planning is an excellent example of localism and that its empowerment of local communities, through producing statutory powers enabling them to plan, makes a great difference?
Mr Foster
As the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), has said, some 500 communities are already availing themselves of the opportunities provided by neighbourhood planning. We have made additional funds available to take the scheme forward, and he will be aware of the exciting developments that are really putting communities back in control of what is happening in their local areas.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T9. Contrary to the Minister’s answer, the national planning policy framework is proving to be an all-too-predictable fiasco—not least because we predicted it would be. The lack of sequential planning has put greenfield sites above brownfield regeneration, endangering cities and countryside alike. When will Ministers rethink this disastrous strategy, stop the sprawl, revive our cities and promote affordable homes?
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
The hon. Gentleman can use as much purple prose as he likes—his books are full of it, and very good they are, too—but that will not change the fact that the national planning policy framework is succeeding far better than any previous planning regime in getting local authorities to draw up local plans that put them in charge of making decisions about development in their areas. That is the truth, and he knows it.
Duncan Hames (Chippenham) (LD)
I know that the Minister will want to avoid unnecessary job losses in front-line local government services, so what guidance will he give to local authorities on the retention of marriage registrars once the Marriage (Same Sex Couples) Bill becomes law?
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I am very happy to look at this matter. The hon. Gentleman asks a fair question and I am happy to have a discussion with him about it once the Bill becomes law.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Secretary of State is on record as saying that councils that flout the law in the Regulation of Investigatory Powers Act 2000 should face justice, so why have 27 local authorities spent millions of pounds of taxpayers’ money on flouting the law by employing private investigators to conduct unauthorised surveillance operations?
Mr Pickles
I believe the law has been changed. These powers can be secured only on application to a magistrate. If an application to a magistrate has not been made, the law has been broken and criminal sanctions will apply.
Michael Fabricant (Lichfield) (Con)
I spent Sunday afternoon at the launch of the Heseltine review under the auspices of the Greater Birmingham and Solihull local enterprise partnership, chaired by Andy Street, whom I know you know, Mr Speaker. It was a real pleasure to see the leader of Birmingham city council, whose name I have temporarily forgotten—no, it is Sir Albert Bore—a Labour councillor, support this. Does my right hon. Friend agree that this is a real step forward for the midlands, and will he soon go up to the midlands to help with this exciting project?
Mr Pickles
Obviously, I regret that my hon. Friend forgot the name of Sir Albert Bore—an important man in local government who I am pleased to say seems to have changed his tune. He was predicting disaster; he was predicting that all kinds of things would go terribly wrong—yet here we are, with him co-operating with the Government. That is a marvellous sign for the future.
Ian Lavery (Wansbeck) (Lab)
Can the Minister confirm that in order to proceed with the mutualisation of the fire service in any region, there must be full agreement among all the employees in that region?
Brandon Lewis
I can confirm that we are looking at how to work with Cleveland to deliver a mutual fire service, if it wants to do it that way. We are working through this at the moment and may be looking at consultation. We will go through that process and look at the feedback we get from it.
Mr Philip Hollobone (Kettering) (Con)
Will the Planning Minister instruct the planning inspectorate not to sanction on appeal entirely inappropriate housing development outside town and village envelopes using the five-year rolling housing supply targets where the local authority concerned is doing all it can and more to meet Government guidelines on the development of local plans?
Nick Boles
What I can confirm is that the planning inspectorate will interpret the national planning policy framework and the policies contained in local plans and arrive at decisions that reflect the policies in both those documents. What I cannot do is give any particular instruction not to do something in a particular place, but national policy and local plans will be followed.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I noticed on Twitter that the Secretary of State shares my concern about the libel case brought by the chief executive of Carmarthenshire county council against a local blogger, which was paid for by public funds. Now that the trial has concluded, will the right hon. Gentleman consider amending the guidance and, if necessary, legislating to ensure that senior public officials do not use public money to fund such actions?
Mr Pickles
This is a matter for the Welsh Assembly. We have taken regulations within England that say basically that the use by senior officers of libel provisions should be a shield and not a sword and that, should a chief executive or senior member seek to initiate an action, the full permission of the council is needed before embarking on such an event. The case also illustrates the need to ensure that new technology should be allowed in the council chamber.
Simon Danczuk (Rochdale) (Lab)
I have been contacted by a Rochdale retailer who has just two instalments to pay on his business rates and should get until the end of the month to pay them. The council has involved the courts and the bailiffs are banging on the door, threatening to close the business down. Is this any way for a council to act to improve the high streets? Will the Minister have a look at this?
Brandon Lewis
I will happily have a look at it. I have to say that the local authority should do what it can to help deliver further economic growth locally by working with businesses, but if the business rates were due, the authority would obviously have to go through proper due process. I will be happy to talk to the hon. Gentleman outside the Chamber about this matter.
Cyprus
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Greg Clark)
With your permission, Mr Speaker, I shall make a statement about banks in Cyprus.
In the light of the financial difficulties faced by the Republic of Cyprus, that country’s Government have requested a programme of financial assistance from its fellow members of the eurozone. Britain is obviously not part of the eurozone and was not party to the negotiations, and there is no contribution from the United Kingdom, either through the European financial stabilisation mechanism or bilaterally.
At the end of a meeting of eurozone Finance Ministers at the weekend, it was announced that it had been agreed with the Cypriot Government that a programme of assistance worth up to €10 billion would be provided, subject to the following measures: a fiscal consolidation amounting to 4.5% of Cyprus’s gross domestic product over four years; a privatisation programme to raise €1.4 billion, or 8% of GDP; an increase in corporation tax from 10% to 12.5%; a gold and assets swap from the reserves of €1.5 billion, or 8.5% of GDP; a withholding tax on interest of €1 billion, or 6% of GDP; and a levy on deposits of €5.8 billion, worth 33% of Cyprus’s GDP, which, it has been reported, will consist of a 6.75% levy on deposits below €100,000 and a levy of 9.9% on deposits above €100,000. In return, the assistance package will allow €5 billion-worth of bond redemptions, excluding the Russian loan which will mature in 2016; €2 billion-worth of deficit financing, less privatisation proceeds; and an injection of €4.5 billion into the banks’ balance sheets.
The agreement established terms of reference for an independent evaluation of the implementation of the anti-money-laundering framework in Cypriot financial institutions.
Those are the main features of the agreement, but parts of it, including the deposit levy, require legislation in the Cypriot Parliament, and that is expected to be considered tomorrow. Accordingly, the situation in Cyprus remains uncertain and is subject to change. What is clear from the proposal so far is that the levy will not apply to foreign branches and subsidiaries of Cypriot banks, including those operating in the UK. Indeed, the two Cypriot banks in the UK, the Cyprus Popular Bank and Bank of Cyprus UK, have been open for business today.
Of course, there are British nationals who have accounts with Cyprus-based branches of Cypriot banks and who would be affected by the proposed levy if it were agreed by the Cypriot Parliament. They include serving British servicemen and women who are required to be based on the island and so, in order to go about their day-to-day activities, maintain local bank accounts. Approximately 3,000 members of the armed forces are on overseas postings serving our country in Cyprus. The Defence Secretary and the Foreign Secretary have made clear that, should these measures be approved, the British Government, as their employer, will compensate those personnel for reasonable losses incurred as a result of the situation.
Several thousand UK pensioners are resident in Cyprus. Today is a bank holiday there, and, to ensure that any payments made by Her Majesty’s Government to banks in the country reach the intended recipients, all future pension payments made by the Government to British citizens there will be temporarily put on hold until at least tomorrow. That will allow us to take stock of developments in Cyprus. All UK pensioners in the country can be assured that their future pension payments are being held safely, and that a normal payments service will resume as soon as the situation has become clear. However, recipients of these payments can switch the bank account into which payments are made with immediate effect by contacting the international pensions centre, the details of which are available on the website of the Department for Work and Pensions.
As soon as more information on the final measures taken is available, I will arrange a briefing for Members whose constituents have been caught up in the situation. I understand that this is a worrying time for other British nationals who have deposits in banks in Cyprus, but, as Members will be aware, deposits in Cypriot banks are subject to the laws and regulations of the Republic. Ministers from the Foreign Office, the Ministry of Defence and the Department for Work and Pensions will update the House as soon as they have information that is relevant to their areas, and will keep the House updated.
This is a worrying situation, not only for the people of Cyprus but for many of our constituents. It is a situation that is uncertain and subject to change, and I will return to the House with updates as events become clearer. However, I wanted Members to have the opportunity to be informed from the outset of what is known so far.
Chris Leslie (Nottingham East) (Lab/Co-op)
The terms of the Cypriot bank bail-out are extremely concerning, and the market reaction today may be only the beginning of the fallout. While it is, of course, important for the Cypriot banks to be put on a secure footing, it is extremely dangerous to wider economic confidence for the fundamental trust of retail depositors to be undermined in such a way. This was a very risky decision, and we would expect the British Government to caution against such a sequestering of the funds of ordinary bank customers.
The so-called bail-in of banks in jeopardy does not always need to punish savers and depositors in this way. It is essential that the trust and confidence of ordinary bank customers across the European Union is immediately restored, with guarantees that no future bail-in arrangements will operate in this way. Surely one of the lessons from recent history is that rock-solid guarantees for depositors are a prerequisite to stability and recovery. EU Finance Ministers would not have countenanced a move such as this in larger members of the EU, yet somehow it is acceptable for smaller ones. It is never a good message to send to the public in any country that they would have been better off keeping their life savings under a mattress than in a bank.
It is particularly concerning that international institutions with UK input, including the EU and the International Monetary Fund, have adopted this precarious strategy, so I have to ask the Minister some specific questions. First, were the UK Government made aware of this proposal beforehand and, if so, when? Was the Chancellor consulted and, if so, what view was expressed? The UK may not be able to attend the meetings of the Eurogroup of Finance Ministers in a non-voting, observer capacity, but any informal decisions taken there still need referring to ECOFIN, so would it not be sensible, in future, to secure a right for observers, including the UK, to attend such crucial decision-making meetings, given the ramifications of eurozone decisions for the whole of the EU?
The Opposition welcome the decision to compensate UK armed forces personnel stationed in Cyprus who are affected, but can the Minister set out the estimated cost to the Exchequer of that policy? Are British consular officials providing assistance to other affected UK nationals? What is the Government’s estimate of the number of UK nationals affected by this decision in Cyprus? What will happen if the Cypriot Government and Parliament do not actually go along with this proposal? They are obviously between a rock and a hard place, as the further two days of impromptu bank holidays go to show, but surely such public brinkmanship by the EU and the IMF just creates even more uncertainty. What is the extent of British banking exposure and British business exposure to the Cypriot banks? How much does the Treasury estimate that UK investors will lose under this arrangement?
Many EU citizens expected that their deposits were guaranteed up to €100,000, or £85,000, under the deposit guarantee scheme directive, but we now learn that there was a caveat excluding special taxes such as this one. Should consumers be aware of any other aspects of the small print in the deposit guarantee scheme? Does this whole episode not show that we should clarify our own banking bail-in rules in this country as soon as possible, rather than, as Ministers are saying in the Banking Reform Bill process, waiting for the European Union to draw up the bail-in directive in several years’ time? Waiting years for the EU to tell us how a bail-in arrangement might operate suddenly looks like an unwise course to take. Surely we should get these issues sorted out here at home as soon as possible. This is not a matter where the UK Government can just sit on the sidelines, because issues that could fundamentally affect our own stability, growth and prosperity are involved, and we expect Ministers to take firm steps within the EU to reduce these risks now.
Greg Clark
I am grateful for the hon. Gentleman’s points and questions. Let me say at the outset that we will have the chance to discuss these things in more detail, but the situation is very fluid; we understand that tonight there will be a meeting of the Eurogroup members—a video conference—to discuss some aspects of it, and the Cypriot Parliament is meeting tomorrow, so I think it would be unwise to assume that the information that has come out over the weekend will necessarily represent the shape of things to come. However, I will make sure that the hon. Gentleman and, indeed, all hon. Members are kept abreast of things.
The hon. Gentleman’s point about fundamental trust needing to be established in the banking system goes to the heart of the matter. It is crucial that that applies not just in this country, but across the eurozone. It is one of the reasons why we have been supportive of the efforts being made by the eurozone to stabilise the financial system there, including by the introduction of a single supervisory mechanism. Cyprus, as I think he would acknowledge, is in a particularly acute situation, as a very large proportion of its GDP is exposed to international financial transactions and its domestic fiscal situation also leaves a lot to be desired. I think all hon. Members would recognise that the importance of maintaining fiscal discipline as well as adequate supervision of the banking system is exemplified by what has happened.
In terms of the negotiations so far and the parties to them, the hon. Gentleman should know and is, I think, aware that the discussions are among the members of the eurozone, who bear financial responsibility for bailing out Cyprus, and the Cypriot Government. They have negotiated with each other and the plan can be approved only if the Cypriot Parliament endorses it. The UK understands and has intelligence about what went on in those discussions, but was not part of them and had no influence and no votes. Ultimately, this is a matter for the Cypriots and the eurozone.
The cost of the protection that my right hon. Friends have offered to UK serving servicemen and women will depend on the final state of the arrangements, which, as I say, are not certain at this stage. I mentioned in my statement that about 3,000 UK military personnel and their support staff are employed, which gives us a limited ability to estimate the context.
On the question of the supervision of UK banks and any potential exposure, the Bank of England, as the hon. Gentleman would expect, maintains close involvement and is supervising all the banks that might have any exposure to the Cypriot authorities. The hon. Gentleman is quite right that it is necessary at both a European and domestic level to agree a means of bailing in the contributions of holders of capital so that the banks can be resolved without the types of problems we are seeing in Cyprus. We have been very clear that we want to see that and the Irish presidency is making good progress with the recovery and resolution directive. We have said that if that progress does not proceed at the pace we hope and expect to see, we can use the banking Bill to make the necessary amendments.
Mr Andrew Tyrie (Chichester) (Con)
This looks to be very poorly thought through, possibly dangerously so, not least because it risks triggering a run on the banks of other indebted countries. Is it not also the case that this could be a breach of EU deposit regulation, which requires a full guarantee of up to €100,000? It is not supported entirely by a tax but by shares—which clearly and demonstrably are not a tax. A minute ago, the Minister described the situation as fluid, but a fluid bail-out does not sound like a very robust policy to me. Does that not illustrate the gulf between the rhetoric and reality of the so-called banking union? Does it not illustrate that the eurozone’s problems are unresolved and blighting the UK economy?
Greg Clark
I agree with my hon. Friend to the extent that I think that it underlines the importance of having arrangements across the eurozone to anticipate and provide robust measures to ensure that resolution plans for such problems are agreed in advance so that there will not be this fluidity of negotiation. I completely agree with that. The measures that are being taken for banking union are designed to resolve precisely that set of circumstances. As for the legality of the situation, we will need to be assured that the arrangements proceed in accordance with the treaty.
Mr Jack Straw (Blackburn) (Lab)
The lack of effective supervision of the Greek Cypriot banking system has been notorious for many years and it has become a haven for Russian money laundering. What steps, either through this package or through other measures, are being taken better to control the banking system in Cyprus?
Greg Clark
The right hon. Gentleman will know that the agreement reached at the weekend includes action to address the reputation Cyprus has established as a potential home for money laundering and that is part of the conditionality for the package.
Mr John Redwood (Wokingham) (Con)
Given the importance of the euro’s stability to the London banking system and the wider world, will the British Government be lobbying the European Central Bank to ensure that it provides sufficient liquidity at all times should a run develop in a weaker bank or a weaker country, given the invitation to people to withdraw their deposits from any difficult institution?
Greg Clark
The pace of negotiations, thanks to the fact that today is a bank holiday in Cyprus and that that could potentially be extended, is meant to resolve the matter before a run on the banks is possible. My right hon. Friend is right that the situation is unsatisfactory and it is necessary to establish a more orderly system for anticipating or managing potential bank failures in the future. It is in everyone’s interest to ensure that there is no such collapse of the banking system in Cyprus.
Mr Dennis Skinner (Bolsover) (Lab)
Does the Minister realise that we have reached a sorry state of affairs when the eurozone—we are not members, thanks to the Labour Government last time round—[Interruption.] Oh yes; that is when it happened. I know Conservative Members like it, but we did it at the time. Is it not a sorry state of affairs that the eurozone can implement a poll tax, and that the Government were made aware of it at some point or other and have not told us at any time that they condemn this move? I am giving the Minister a chance now: condemn it!
Greg Clark
It was the policy of the Labour party to be committed in principle to joining the euro, and it was our right hon. Friend the Member for Richmond (Yorks), now the Secretary of State for Foreign and Commonwealth Affairs, who was the first in the House to say that the Conservative party would campaign against the euro and would not join. As a result of being outside the eurozone, we are not responsible for the arrangements there. We are not part of those negotiations. This is a negotiation between the Government of Cyprus and members of the eurozone.
Stephen Williams (Bristol West) (LD)
The amounts involved are eye-watering as a proportion of the Cypriot economy. We are used to bail-outs involving a haircut for creditors. This is the first time I have ever seen a complete scalping of depositors in order to finance a bail-in. Given that we are outside the various institutions of European decision making, how will the Government safeguard British depositors against future scalpings of this sort?
Greg Clark
My hon. Friend makes an important point. To put it into context, the European Central Bank said this morning that the situation of Cyprus and the Cypriot banking sector is unique. I think Members will reflect that it has unique problems that have required a unique and very difficult solution.
Helen Goodman (Bishop Auckland) (Lab)
Surely the Minister agrees that we have been in this situation before. Taking emergency measures that cause alarm is not the same as making fundamental reforms which are necessary. Will the Minister be pressing for more responsible tax and financial controls? For example, the corporation tax is to increase from 10% to 12.5%. Surely he would agree that a responsible financial policy would mean a much bigger increase.
Greg Clark
I do not think anyone is suggesting that the measures that have been taken are not rigorous and exacting. The reaction in Cyprus and across the eurozone indicates that these are regarded as very tough measures, including on the transparency of the banking system, particularly to avoid the reputation for money laundering. However, this is a matter for the Cypriot Government. They have had to convince their partners in the eurozone that this programme represents a credible set of conditions which can give confidence to those who are helping to bail them out.
Mr William Cash (Stone) (Con)
The Minister will no doubt appreciate that Mr Draghi’s comment that the European Central Bank will do whatever it takes clearly includes daylight robbery of British pensioners, among others. Does he agree that this is symptomatic of the dysfunctionality of the European Union? Will he also note that Germany has very much driven the measures itself, and furthermore that it has a surplus of £29 billion with the rest of the European Union, whereas we have a deficit of £48 billion?
Greg Clark
Clearly, it is a matter of regret, and lessons should be learned from the situation that Cyprus finds itself in. One of the clear lessons is that it should not have been allowed to descend into this state of indebtedness, and the banks should not have been allowed to get into their present position of vulnerability. It is in our interests, as well as in the interests of other members of the eurozone, that we have a much more soundly based banking system right across Europe.
Mr Nigel Dodds (Belfast North) (DUP)
I welcome the action that has been taken to protect the deposits of members of our armed forces in Cyprus, but to follow on from what has just been said, is not the lesson of this whole episode to spell out very clearly to anyone who advocates in future any greater European integration or any joining of the euro, “Hands off our money”?
Greg Clark
I am sure that our constituents in this country will be relieved and reassured that we are not part of these arrangements and not exposed to the consequences of the failure that is sought to be averted in Cyprus.
Margot James (Stourbridge) (Con)
This is a truly shocking development, impacting very unfairly on savers who are already feeling the impact of the very low interest rates brought about by quantitative easing; it is acting as a real disincentive to save for one’s older age. I congratulate my right hon. Friend on protecting members of the armed forces, but will he clarify his intentions for British pensioners, having put on hold pension payments? Can anything more be done to reassure British pensioners living in Cyprus that they will not be affected?
Greg Clark
It is open to British pensioners to have their pension paid into another account. They can nominate that account from now on through the Department for Work and Pensions’ website. Their pensions are safe; we will make sure of that. The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), will update the House. Once the details of the final package become known, in so far as they have implications for the payment of pensions, we will update the House.
Mr Andrew Love (Edmonton) (Lab/Co-op)
My Cypriot constituents are shocked and angered that the much-publicised deposit guarantee scheme appears to be worthless. They are further outraged that the reason given for that is that the banks have not gone bankrupt, therefore the deposit guarantee does not apply. What action will the Minister take to speak to his EU colleagues to see what can be done, even at this late stage, to repair the damage to trust and confidence in our banking system?
Greg Clark
The hon. Gentleman and I had a conversation this morning. I know that he has many constituents who are very worried at this time, and I have said that I am happy to meet them so that we can understand their particular situation. It is clearly an unsatisfactory situation in which the Government of Cyprus, as I understand it, faced a choice between a measure such as this and contemplating the collapse of the banking system. That is a choice that no one would want to make. It is a choice that they made and that they are putting to the Cypriot Parliament, but just as this Parliament is sovereign, so that is true in Cyprus, and the debates that they will be having during the next two days will determine whether what has been proposed over the weekend is what pertains.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
The Government are right to protect the position of members of our armed services, but the Minister knows that many pensioners are exposed and I hope that he will consider extending the guarantee to British pensioners living in Cyprus. On a practical note, I believe that the Cypriot Parliament is due to vote on Tuesday evening and that the bank holiday in Cyprus has been extended until Thursday in order to keep the banks shut. Does that apply to branches of Cypriot banks in other countries, and what will happen if the vote in Parliament on Tuesday does not go the way that the Cypriot Government wish it to go?
Greg Clark
Discussions are continuing with the eurozone members as well as the Cypriot Parliament, so it would be wrong to speculate on the outcome. I can confirm that Cypriot bank branches in this country are open and operating normally today.
Kate Hoey (Vauxhall) (Lab)
The public will be outraged that British nationals are having their money stolen from them on the orders, let us be frank, of the German Government. Can we now move forward with legislation in this Session of Parliament to put on the statute book the power to have a referendum in this country on our relationship with the European union?
Greg Clark
The hon. Lady will know that these matters have been discussed in the House. The Prime Minister has made a speech in which he said that if he is re-elected there will be such a referendum. As to whether the legislation should come before the House before the general election, that is for others.
Mr David Burrowes (Enfield, Southgate) (Con)
The Minister will no doubt sympathise with a new Government picking up an appalling financial legacy and having to make tough decisions, but the raid on deposits was extraordinary and unprecedented. Will he provide assurance to my constituents that not only are the Laiki bank branches and the Bank of Cyprus, the headquarters of which is in my constituency, open for business, but the deposits are guaranteed, and that that deposit guarantee scheme applies and will continue to apply whatever the decision of the Cypriot Parliament?
Greg Clark
I applaud the work that my hon. Friend does as chairman of the all-party group on Cyprus. The proposal that has been made would certainly protect his constituents who have deposits in those banks, and the final terms are being discussed in the Cypriot Parliament. Certainly, those banks that have subsidiaries in the UK are governed by the UK regulators and subject to the UK financial compensation scheme.
Mr Kevan Jones (North Durham) (Lab)
The Minister has mentioned members of the armed forces, but clearly no scheme is yet in place. What advice is being given to members of the armed forces currently serving in Cyprus, and has the Ministry of Defence stopped the payment of wages and expenses into Cypriot bank accounts?
Greg Clark
The arrangements for advice on implementation of the commitment to compensate members of the armed forces cannot proceed until the Cypriots have decided on the final arrangements, which will be in the next few days. Having made the commitment to ensure that pensions are not paid into bank accounts to which access might be questionable, I will discuss the hon. Gentleman’s point with my right hon. and hon. Friends to ensure that similar arrangements are considered for the MOD.
Sir Bob Russell (Colchester) (LD)
The Minister is presumably unable to say how many of the 3,000 members of the armed forces serving in Cyprus will be affected, but does he agree that serving military personnel who have Cypriot bank accounts, even if they are not in Cyprus, should also be included in the scheme? Also, why will the Government be compensating only for “reasonable” losses and not full losses?
Greg Clark
I know that many of my hon. Friend’s constituents will be in that situation and will have bank accounts in Cyprus. We have made a commitment, but these are very early days—we learned only over the weekend that these matters are being discussed. I think it is appropriate for the Government to make an immediate commitment of reassurance to those members of the armed forces. They have no choice about being sent to Cyprus, and when they go on this country’s business it seems to me to be reasonable to make that commitment.
Mr William Bain (Glasgow North East) (Lab)
Does the Financial Secretary have a view on how it looks to the world that ordinary savers are losing proportionately more of their deposits than institutional investors are? Is there not a strong case for the eurozone to get on and complete arrangements to create a single resolution mechanism so that banks can be resolved in an orderly way?
Jacob Rees-Mogg (North East Somerset) (Con)
As the EU has now arbitrarily abandoned its £85,000 deposit insurance scheme, what advice would my right hon. Friend give British subjects in other European countries, such as Ireland, Portugal, Spain, Greece and Italy, whose deposits might also be at risk in future? Would it be best for them to repatriate their funds?
Greg Clark
The ECB made a clear statement today that the situation in Cyprus is unique, and I think that a study of the situation there would confirm that.
Barry Gardiner (Brent North) (Lab)
The ECB action was supposed to create stability, but it has created instability. The Minister has made it clear that the Chancellor was not consulted on that beforehand, but has the Chancellor made it clear to the ECB that, although this particular deal may be renegotiated, the instability will linger in precisely the way the hon. Member for North East Somerset (Jacob Rees-Mogg) suggests?
Greg Clark
The whole House has an interest in ensuring that right across Europe, in countries that are members of the eurozone or those that are not, there is confidence in the banking system. This period of several days of uncertainty is undesirable. We need to get arrangements in place, as the hon. Member for Nottingham East (Chris Leslie) said, to have clear resolution plans in advance. It needs to be sorted out quickly, because the situation is undesirable. I think that it is in everyone’s interests that it is resolved very soon.
Dr Matthew Offord (Hendon) (Con)
I am grateful to the Minister for the conversation he and I had about the issue earlier today. I am also grateful to Councillor Andreas Tambourides, who has discussed it with me, and to my constituent Wayne Boothroyd, who e-mailed me to ask specifically about British service personnel on the island. What assurances can the Minister give me to pass on to my constituent that members of the armed forces will be compensated for their total losses, not their “reasonable” losses, as the Minister said in his statement?
Greg Clark
The Defence Secretary and the Foreign Secretary have given a voluntary commitment to making sure that we do right by our armed forces, and their intentions are absolutely clear—that we should not be putting at a disadvantage the men and women who serve our country overseas, in this case in Cyprus.
Caroline Lucas (Brighton, Pavilion) (Green)
I am a bit surprised by the lack of moral outrage from the Minister on behalf of the people who live in Cyprus. He calls the measures vigorous and exacting, but are they not actually immoral and unfair? Will he simply say that it is wrong for the Cypriot authorities to pilfer the savings of ordinary people living in Cyprus?
Greg Clark
Not having been part of the negotiations, it is difficult for any Member of this House to know what the alternative was. The elected representatives of the Cypriot Government clearly accepted what was proposed in contemplation of a fate that they considered to be worse, which was the collapse of the Cypriot banking system. This is a situation that none of us wants to be in. Thank goodness that in this country, as a result of being outside the eurozone and having introduced discipline into our finances, we are not going to be.
Stephen Mosley (City of Chester) (Con)
We may well find that some of the biggest British losers are people who are in the process of buying or selling property in Cyprus. Can the Minister offer any reassurance to people who may have lodged money with a solicitor in an escrow account, for example, that the solicitor will be responsible for the losses and not the person who is trying to buy a property?
Greg Clark
My hon. Friend raises an important point. I have made a commitment to the House to provide further statements once we have more detailed information on how all these arrangements are likely to apply.
Kelvin Hopkins (Luton North) (Lab)
This is clearly deeply worrying for the people of Cyprus, and we have to condemn what is being done to them, but it is also worrying for millions of working people across the whole eurozone. Is this not just the beginning of a situation in which Cyprus and other countries withdraw from the eurozone and, indeed, the euro itself may be wound up? Are the Treasury, the Government and the Bank of England making preparations for that eventuality?
Greg Clark
The Treasury and the Government always make contingency plans for many eventualities. It is important to reflect on the statements made by the German Government and by the ECB that the situation in Cyprus is very dissimilar to that prevailing in other countries. It would not be right to draw a parallel between what is happening in Cyprus and the situation that exists elsewhere.
Andrew Percy (Brigg and Goole) (Con)
Many British citizens who move themselves or their assets to Cyprus will have done so believing that going to another EU country offered them some protection. This theft clearly shows what a pup we have been sold on Europe over the years. Will my right hon. Friend take up the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and ensure that proper advice is offered to British pensioners in other eurozone nations on how they can protect their pensions or return their deposits to this country?
Greg Clark
The agreement that was reached at the weekend was an agreement between the Government of Cyprus and the eurozone members. The ECB has said clearly:
“It’s the Cyprus government’s adjustment programme. If Cyprus’ president wants to change something regarding the levy on bank deposits, that’s in his hands. He must just make sure that the financing is intact.”
The Cypriot Parliament will, quite properly, be discussing and debating this matter. It has some influence, and indeed some control, over how these measures are levied.
Alison McGovern (Wirral South) (Lab)
As the Minister made clear, whether in the eurozone or not, what affects one country in Europe affects us all. Will he therefore answer the question asked by my hon. Friend the Member for Bolsover (Mr Skinner) and give us his view on this levy on deposits?
Greg Clark
The Government of Cyprus agreed to this proposal. The spokesman for the German Government was very clear that how Cyprus makes its contribution—how it makes the payments—is up to Cyprus. If the Government of Cyprus, recently elected by their people, make this decision, it is for them to justify it to the Cypriot Parliament.
Mr Philip Hollobone (Kettering) (Con)
Is this not proof positive, if any were needed, that if a country signs up to the euro it is effectively abandoning its economic sovereignty and national independence?
Greg Clark
My hon. Friend makes a point that finds an echo throughout the Chamber. As the days go by, I think we are all reassured and relieved that we did not make the decision that the Labour party made in principle to join the euro.
Wayne David (Caerphilly) (Lab)
One of the fundamental rules of banking has been broken, in that the deposits and savings of ordinary people have been, in effect, taken over in part by the state. That is a fundamental breach. What assurances can the Government give us that this precedent will not be followed by other countries in the near future?
Greg Clark
As I said, we need to get resolution arrangements in place, but the ECB and the spokesmen for different members of the eurozone have been clear that the decision to impose this kind of levy was taken by the Cypriot Government with the eurozone. They could have done it in different ways, but that is the mechanism they chose.
Mr Brooks Newmark (Braintree) (Con)
Although it is absolutely right that the Government should support our armed forces personnel, I share the sense of moral outrage expressed by the hon. Member for Brighton, Pavilion (Caroline Lucas) that ordinary pensioners who have retired to Cyprus, who are citizens of ours and who do not think of themselves as members of the eurozone but as British citizens, will feel abandoned. Will the Minister assure me that he will fight hard, particularly for those pensioners who have less than €100,000 on deposit, to try to protect their money?
Greg Clark
Yes, but discussions and negotiations are taking place between Cyprus and the eurozone—and, indeed, in the Cypriot Parliament—on whether the proposals that were agreed over the weekend will be enacted. We have some way to go before we get to that stage and I will, of course, update the House if and when we get to that final stage.
Chris Bryant (Rhondda) (Lab)
I am amazed that the Minister is not more scandalised that thousands of ordinary Cypriots, in this country and in Cyprus, are going to lose money. Money will be filched from them when, frankly, the people who caused the problems—the Government of and the bankers in Cyprus—will not lose anything. Leaving that aside, how much British Government money from the Ministry of Defence and the Foreign and Commonwealth Office will be lost in Cypriot banks?
Greg Clark
I am scandalised that the situation in Cyprus was allowed to happen in this way. It should not have happened in terms of the supervision of the banking system or the country’s fiscal performance. We will not be able to make an assessment of our guarantee to the armed services until we see the final shape of the negotiations, but when we do I will make sure that the House knows about it.
Bob Stewart (Beckenham) (Con)
Further to the question asked by the hon. Member for Rhondda (Chris Bryant), it is undoubtedly true that the Ministry of Defence has funding in the Bank of Cyprus for operational expenses on our bases, including pay. Are we likely to be scalped? In other words, is it likely that our Government will bail out the Government of Cyprus?
Greg Clark
It is too early to make that assessment, but we should know in the next few days and I will, of course, update the House when the situation is clear.
Andrew Stephenson (Pendle) (Con)
Having visited our sovereign bases on Cyprus and seen the training facilities and some of the excellent decompression facilities for our troops returning from theatre, I am very concerned about the effect this proposal could have on our bases. Although I welcome what my right hon. Friend has said about compensating service personnel, will that include family members who have relocated to Cyprus with servicemen and women during their overseas posting?
Greg Clark
Yes, that is the intention. Clearly, if the family of a serving member of the armed forces has to relocate to Cyprus and maintain a bank account for everyday living expenses, it seems reasonable to include that in the proposed compensation arrangements. That seems to be the just thing to do.
Mr Crispin Blunt (Reigate) (Con)
What is the Minister’s assessment of the exposure of London financial markets to the potential crisis that may follow from this?
Greg Clark
The Bank of England keeps the arrangements under constant review. I think it is fair to reflect that Cyprus is an infinitesimal part of the European banking system and an even smaller part of the world banking system. Although this is an extremely worrying time for citizens of Cyprus and our constituents who have investments or connections in Cyprus, in the wider context Cyprus does not have the systemic importance of other countries.
Harriett Baldwin (West Worcestershire) (Con)
Whatever the Cypriot Parliament decides this week, this has been a torpedo across the European banking system. What advice would the Minister give to pensioners who live in Spain and Portugal about whether they should maintain large deposits in eurozone banks?
Greg Clark
I agree that this is a warning and that it is necessary to have more robust financial arrangements in place to prevent this sort of crisis from happening in other countries. However, I reinforce the advice of the ECB that this problem is unique to Cyprus, which is particularly exposed and is in a state of particular indebtedness.
Mr David Nuttall (Bury North) (Con)
Does the Minister agree that what we are witnessing in Cyprus is yet further evidence of the disastrous consequences of what happens when a country loses control of its economy by giving up its own currency?
Greg Clark
It is perfectly clear that the problems in Cyprus are related to its membership of the euro. Thankfully, we are not part of the euro, we do not have those problems and we have control of our own arrangements in this country—and long may that continue.
Royal Charter on Press Conduct
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
I call the Prime Minister to make an application for leave to propose a debate on a specific and important matter that should have urgent consideration under the terms of Standing Order No. 24. The right hon. Gentleman has three minutes in which to make such an application.
The Prime Minister (Mr David Cameron)
I seek leave to propose that the House should debate a specific and important matter that should have urgent consideration, namely the welcome publication of the draft royal charter by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition today, and the Prime Minister’s intention to submit the charter to the Privy Council for Her Majesty’s approval at its May meeting.
What happened to the Dowlers, the McCanns, Christopher Jefferies and many other innocent people who had never sought the limelight was utterly despicable. It is right that we put in place a new system of press regulation to ensure that such appalling acts can never happen again. We should do that without further delay. The royal charter, which I would like us to take note of now, will help do exactly that.
Furthermore, the cross-party agreement that has been reached today will allow the Bills that had been blocked or amended with concepts of statutory press regulation to be unblocked, including the Defamation Bill, which makes important libel reform, and the Enterprise and Regulatory Reform Bill, which sets up the green investment bank. As a result, the Government’s legislative programme will be able to proceed. I would therefore be grateful, Mr Speaker, if you granted this application.
Mr Speaker
The Prime Minister asks leave to propose a debate on a specific and important matter that should have urgent consideration, namely the welcome publication of the draft royal charter by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition today, and the Prime Minister’s intention to submit the charter to the Privy Council for Her Majesty’s approval at its May meeting.
I have listened carefully to the application from the Prime Minister and am satisfied that the matter is proper to be discussed under Standing Order No. 24. Has the right hon. Gentleman the leave of the House? The Prime Minister does indeed have the leave of the House.
Application agreed to.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. I am sorry to do this, but it is all very well to talk about the publication of the draft charter, but it is not available in the Vote Office or in the Library. The Clerk has a copy of it, but hon. Members do not have copies of it. It is an odd way of doing business for us to debate something that we have never had an opportunity to see.
Mr Speaker
I say to the hon. Gentleman, whom I thank for his point of order, that my copy and that held by the Clerk came from the Vote Office. Therefore, my understanding is that copies of the document are lodged in the Vote Office, and I say that only on the basis of my experience. If copies are not so lodged, they most certainly should be. I can deal only with the exigencies of the situation as they arise. I am not knocking the hon. Gentleman; he has raised his point of order and I have sought fairly and accurately in my terms to respond to it. The responsibility now is for the House to move on to debate the matter. I call the Prime Minister to move the motion and I emphasise that the debate can last for up to three hours.
Royal Charter on Press Conduct
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
I beg to move,
That this House has considered the welcome publication of the draft royal charter by the Prime Minister, Deputy Prime Minister and Leader of the Opposition, and the Prime Minister’s intention to submit the charter to the Privy Council for Her Majesty’s approval at the Privy Council’s May meeting.
My right hon. Friend the Deputy Prime Minister, the Leader of the Opposition and I have today reached cross-party agreement on a royal charter that will help deliver a new system of independent and robust press regulation in our country. As Lord Justice Leveson recommended, we need a system of tough, independent self-regulation that will deliver for victims and meet the principles set out in his report. This system will ensure up-front apologies, million pound fines, a self-regulatory body with independence of appointments and funding, a robust standards code, an arbitration service that is free for victims, and a speedy complaint-handling mechanism. We can put all that in place without the need for statutory regulation.
Let me set out for the House the significance of the decision to go with a royal charter instead of a statutory approach, and give details of the deal that has now been agreed. First, however, let me remind the House of the two key recommendations that Lord Justice Leveson made. First he said there should be a new powerful self-regulatory body that the press themselves had to establish—he was very clear about what that should involve and that the press had to establish it. Secondly, and crucially, in order that the press do not mark their own homework, he said there should be a recognition body to oversee the new system of press self-regulation.
The House will recall that Lord Justice Leveson’s own proposal was that legislation would give Ofcom the power to act as that recognition body. I said to the House on the day the report was published that I had serious misgivings about passing detailed legislation on press regulation. I also had grave misgivings about that task being given to Ofcom, which is already a very powerful body. I was determined to try to find a better way of establishing a tough regulatory body to enforce Lord Justice Leveson’s principles, and a different way of establishing the recognition body to check it was doing its job properly. That is what the royal charter does, without the need to write down in legislation the title, definition, functions, power, rules or composition of a new system of regulation—it puts those in place in a royal charter rather than in legislation and, as a result, it does not cross that Rubicon of which I spoke.
Angus Robertson (Moray) (SNP)
I thank the Prime Minister for taking an early intervention. He is aware that discussions are ongoing in the Scottish Parliament involving all parties, given that there are devolved powers, and that the position of Scots law is important. Will he give an assurance that the UK Government will meet the Scottish Government and the relevant all-party group in the Scottish Parliament to discuss progress?
The Prime Minister
I am very happy for the Secretary of State for Culture, Media and Sport to talk to her opposite numbers in the Scottish Government to discuss how we go about these issues. As I understand it, the Scottish Government are taking a rather different approach from ours, but I am sure that they can have that discussion.
Let me remind hon. Members why I felt that a full legislative response to Lord Justice Leveson’s report would be the wrong approach. I stated that there would be problems of necessity, practicality and fundamental principle. As I believe we have shown today, statutory regulation of our media, and statutory regulation to create a recognition body, is not necessary to achieve the Leveson principles. We can do it—indeed we will do it—via a royal charter.
There are reasons of practicality. If we are to have a system of voluntary self-regulation, as Lord Justice Leveson specifically proposed, it is vital that those who are being regulated participate in it. In my view, there was a danger that, if we pursued a detailed legislative approach, as Leveson recommended, we simply would not establish a regulatory system in which the press would take part—we would have been part of an exercise in grandstanding and something of a charade, rather than something that will actually deliver for victims.
Most importantly of all, detailed legislation is fundamentally wrong in principle. It is wrong to create a vehicle whereby politicians could more easily in future impose regulation and obligations on the press.
Ian Lucas (Wrexham) (Lab)
But will the Prime Minister confirm that the deal to which he has agreed requires the passing of legislation?
The Prime Minister
Two important but relatively small legislative changes need to be made. Let me explain what they are. First, Lord Justice Leveson said—the Government agreed at the time—that, in order to create an incentive for newspapers to take part in the system, we should establish a system of exemplary costs and damages that would not apply to newspapers that take part. We have accepted that recommendation and will be legislating for it—it can be done only via legislation.
I will come on to the second change we are making, but we are not embedding the charter in legislation or legislating about it; we are simply repeating the words of the charter. The charter says clearly that it can be changed only if there is a vote of two thirds of this House and two thirds of the House of Lords. Why have we put that in the charter? We have put that in the charter because we want to make it difficult to change the charter. We will repeat exactly that point in legislation in the Enterprise and Regulatory Reform Bill. The legislation is to protect the royal charter; it is not legislation to recognise the royal charter.
I believe it would be wrong to run even the slightest risk of infringing free speech or a free press in that way. As Winston Churchill said:
“A free press is the unsleeping guardian of every other right that free men prize; it is the most dangerous foe of tyranny”.
Today, by rejecting statutory regulation but being in favour of a royal charter, the House has defended that principle. I very much welcome the agreement that we have on the withdrawal of amendments from the amendment paper that would have created a new press law in our country—the amendments will either be withdrawn or, if they are pressed to a Division, we have agreed that we should all oppose them.
Let me set out for the House the cross-party agreement on the royal charter. As I have said, the new system of press regulation will deliver Lord Justice Leveson’s principles, including up-front apologies and £1 million fines. As I have just explained, we will use the Crime and Courts Bill to table the minimal legislative clauses needed to put in place those incentives, which Lord Justice Leveson regarded as important. They will give all newspapers a strong incentive to participate in the voluntary scheme of self-regulation.
Exemplary damages will be available against publishers who do not join a regulator if they utterly disregard the rights of ordinary people. We will also change the rules on costs in civil claims against publishers so that there is a strong incentive to come inside the regulator, with its independent arbitration system.
Mr David Winnick (Walsall North) (Lab)
I am keen that there should be agreement between the three parties and welcome the agreement, but can the Prime Minister explain why the Secretary of State for Culture, Media and Sport has spent a great deal of time on the airwaves bad-mouthing the Labour party and giving the impression that the Opposition want to undermine press freedom? That is not true, and he knows it.
The Prime Minister
I commend my right hon. Friend the Secretary of State for the incredible work that she and others have put in. Her point was that it is important that we go down the royal charter route rather than the legislation route. That has been our position consistently, because we do not want a situation in which politicians can meddle with the system. That is why we have agreed the no-change clause in the Enterprise and Regulatory Reform Bill, which will be debated tonight in another place. The measure will have the effect that the charter, now that it has been so carefully agreed, can be amended only if the process contained within it is followed. As I have said, that means that both Houses of Parliament must agree to a motion for change by a two-thirds majority.
Let me be clear. This is not by any stretch statutory regulation of the press, and nor is it statutory recognition of either the self-regulatory body or the recognition body.
Sir Edward Garnier (Harborough) (Con)
I am most grateful to my right hon. Friend. Will he confirm that awards of exemplary damages and awards of cost will be made not by the self-regulatory body, but by the courts?
The Prime Minister
Yes. My hon. and learned Friend is absolutely right: they will be made by the courts. The point of what we are doing is to create an incentive for publishers to be part of the self-regulatory system, because, other than in exceptional circumstances, they will not be subject to exceptional costs or damages if they are within the regulatory system—that is important.
Keith Vaz (Leicester East) (Lab)
I am most grateful to the Prime Minister. He mentioned the victims in his opening remarks. He will know that 97 people have been arrested and 24 people charged as a result of the phone hacking issue. Given that hundreds of potential victims still have not been interviewed by the police, does he now accept that it is unlikely that part two of the Leveson inquiry, which he announced on 13 July 2011, will take place until after the next general election?
The Prime Minister
It is difficult to answer the right hon. Gentleman’s question, because of course it depends on the timing of the police investigations. What I am clear about is that the police must have the proper resources to carry out their work, which they do. On that basis, the second part of Lord Leveson’s investigation should indeed go ahead.
The Prime Minister
I will give way to the right hon. Gentleman who has a number of amendments in his name on the Order Paper, but let me briefly address the concern raised on whether the “no change” clause in the Enterprise and Regulatory Reform Bill could be used for a more aggressive approach to regulation of the press.
In my view, because the clause does not mention press regulation, or even this specific royal charter, it is no more in danger of being used in this way than any other piece of legislation on our statute book. That is an important point to make. It merely ensures that for generations to come Ministers cannot interfere with this new system without explicit and extensive support from both Houses. That is an important step forward.
Mr Bradshaw
I am grateful to the Prime Minister for giving way, and I commend him for his statement. Will he explain to the House exactly what it is that has changed between Thursday, when he pulled the plug on the all-party talks and described the gaps as “unbridgeable”, and today?
The Prime Minister
What has changed is that the party for which the right hon. Gentleman used to speak from the Front Bench on these issues has come forward with a royal charter proposal which, with some changes, could be made acceptable. My concern was that last week the talks were drifting on and on and on, more and more issues were being asked for, and less and less was being dealt with. The move I made on Thursday has, I believe, unblocked the logjam, which is why we are here today.
Let me explain another way in which the logjam was unblocked. We have agreed that all Leveson-related clauses in the Enterprise and Regulatory Reform Bill will be opposed by all three main parties unless they are withdrawn. They include the clauses in the name of the right hon. Member for Exeter (Mr Bradshaw). His clauses on the Order Paper have to be withdrawn, because they are unacceptable clauses of legislative press regulation. If they are not withdrawn, the agreement between all parties is that they should be voted against. The Defamation Bill will proceed. Its clauses relating to the Leveson report will be reversed by all three parties voting together, so it can now go through the House. All the other Leveson-related clauses in the Enterprise and Regulatory Reform Bill will be opposed by all three main parties unless they are withdrawn. As I have said, all parties have agreed that statutory underpinning clauses must be opposed in both Houses.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my right hon. Friend, and everybody involved, on reaching this agreement. For my own information and for those outside, what is the difference between a royal charter and non-statutory clauses in legislation? Will the Prime Minister please confirm that we are not asking victims, at their own expense, to seek damages through the courts?
The Prime Minister
On my hon. Friend’s second point, the whole point about what we are establishing is that there will be a free arbitration service that victims can use—that is vital. The key point about the difference between a royal charter and setting out in legislation what a press regulator needs to look like, is this: if we pass a law in this House on press regulation that says, “This is what the recognition body has to look like; this is what the press regulation has to look like; this is what the fines are like; this is what the processes are like”, we cross the Rubicon. It would give the House and future Governments the ability to legislate in a totally illiberal way and to restrict freedom of the press. At the time of Leveson’s publication, I said that that was not an acceptable approach and that we should not take it. I said that we would consider alternatives, and we have found one—a royal charter—that means that we are safeguarded from taking that step.
Let me conclude by saying a word about the process by which the agreement has been reached and about the next steps. The royal charter agreed today has benefited hugely from hundreds of hours of detailed negotiations with representatives of victims, all main political parties and the press themselves, and has been further improved by the hours of discussions between the parties this weekend. I am grateful for the spirit of give and take on all sides. We stand here today with a cross-party agreement for a new system of press regulation that supports our great traditions of investigative journalism and free speech and protects the rights of the vulnerable and the innocent. If this system is implemented, the country should have confidence that the terrible suffering of innocent victims, such as the Dowlers, the McCanns and Christopher Jeffries, should never be repeated. My message to the press is now very clear: we have had the debate, now it is time to get on and make this system work.
Edward Miliband (Doncaster North) (Lab)
I second the motion and thank the Prime Minister for calling this debate and for setting up the Leveson inquiry 20 months ago, with cross-party support. We would not be here today without that inquiry, following the appalling revelations about the hacking of Milly Dowler’s phone and what her family endured. It is her family’s bravery in speaking out and the bravery of all the other victims of abuse—the McCanns, the Watsons and many others—that has brought us here today. They were failed at every turn: by the press, who treated them like commodities simply to sell newspapers; by the Press Complaints Commission, which did nothing about it; and by politicians of all parties who failed to stand up for them because of fear.
Today we break the pattern of decades and decades of politicians promising to act on wrongdoing by the press but failing to do so. Some people will ask why we are here at all, given the many pressing issues that the country has to deal with. My answer is simple: because I do not want to live in a country where sections of the press can abuse their power to wreak havoc on the lives of innocent people and, equally, because I want to live in a country that upholds the rights of a fearless, angry, controversial press which holds the powerful to account, including those in the House. Today’s agreement protects the victims, upholds a free press and is true to the principles of Lord Justice Leveson’s report.
Lord Justice Leveson said there needed to be a
“genuinely independent regulator, with effective powers to protect and provide redress for the victims of abuse”.
That is what we will achieve today, with the approval of the House. First, in its appointments and how it works, the new regulator will be independent of the press. Secondly, it is a regulator with teeth, with the powers to direct apologies and corrections of equal prominence. That matters because we know the history: a front-page story that turns someone’s life upside down, followed by an apology buried in the small print on page 36. Thirdly, this system will endure, because of the statutory underpinning being considered in another place today, which will protect the system from being tampered with by Ministers or watered down. It is important that this underpinning has been endorsed by the Prime Minister and several newspapers.
I understand the heat and passion that this debate has aroused, including the concerns about press freedom, but we are today agreeing a system similar to that which already operates in Ireland and which includes many of our own newspapers. It is not direct regulation of the press either, but, as Leveson recommended, independent regulation with membership voluntary on the basis of incentives. I join the Prime Minister in urging all members of the press now to join this new system. Why do I do this? It is because doing so means that we can all move forward. Members of the press will be joining a system that commands the confidence of the victims and allows the press to hold the powerful to account without abusing its own power.
Today represents a huge moment for the House. We are doing the right thing. Politics has failed to grasp this issue for decades, but today politicians have come together to put the victims first. I want to thank the Prime Minister and the Culture Secretary. I also want to thank the Minister for the Cabinet Office for his indefatig—[Interruption]—for his limitless patience, including at 2.30 this morning; the Deputy Prime Minister for his determination to do the right thing; Members in all parties right across this House, including the minority parties, for supporting a new way forward; and the deputy leader of the Labour party for her important role in making this happen.
I also want to acknowledge the vast majority of decent, law-abiding journalists, who want to get back to doing their job. But let me end by paying tribute to the victims who have had the courage to stand up and make their voices heard—the McCanns, the Dowlers, the Watsons and, yes, their representatives. Today is the day we stand up for them. Today is above all their day.
The Deputy Prime Minister (Mr Nick Clegg)
I am delighted to support this motion and welcome the royal charter.
The last time the three party leaders addressed the House on this issue it was because we could not agree; this time, thankfully, it is because we have. I would like to thank your office, Mr Speaker, and the Clerks of the House for accommodating today’s unusual procedure. I am also delighted to see that all sides are claiming victory today. If everyone acts like this after the general election, they will have trouble fitting us all into Downing street.
The Deputy Prime Minister
The hon. Gentleman is always on cue, even at the most solemn moments.
When Lord Justice Leveson published his recommendations, the Liberal Democrats supported them. I agreed with his basic model of a new, independent, self-regulatory body for the press, with the new recognition body authorised to check periodically that the system is working properly. Given the importance of the relationships between politicians, the public and the press, I said at the outset that we should not become fixated on the means of change, but stay focused on the end we all seek: an independent press watchdog in which people can place their trust. My party has been clear from the outset that the worst outcome of all would be for nothing to happen—a very real possibility at points.
Kevin Brennan (Cardiff West) (Lab)
Just so that the country and the House can be clear, are we getting some statutory underpinning of Leveson as part of this agreement?
The Deputy Prime Minister
Of course. This model is a mix of royal charter and statute in two areas: one to install the system of costs and damages and the other to entrench the royal charter, such that it cannot be tampered with at whim by Governments in the future. If I may, I will turn to both issues in a minute.
Throughout this process I have sought to be pragmatic on the details while ensuring that any reforms must satisfy three tests. First, they must deliver the model of independent self-regulation set out by Lord Justice Leveson; secondly, they must command the widest possible cross-party support, which Lord Justice Leveson also said was critical; and, thirdly, they must strike the right balance between protecting the great tradition of a free press in this country and also protecting innocent people from unwarranted intimidation and bullying by powerful interests in our media. Let us not forget that the hacking scandal was caused by some of our biggest newspapers, but it was still a minority of newspapers and certainly not the local and regional press, which must not pay the price for a problem they did not create. A free press is one of the most potent weapons against the abuse of authority in our society, holding the powerful to account. Equally, however, the media must not abuse their own power at the cost of innocent people.
Richard Drax (South Dorset) (Con)
Does the Deputy Prime Minister agree with me—and, I think, with most people in the House—that the terrible practice of phone hacking is already a criminal offence, and that no further legislation is needed, not even a tiny bit, to deal with the problem?
The Deputy Prime Minister
Lord Justice Leveson looked at this matter extensively and said that, in addition to taking action when the criminal law had been broken, further reassurance was needed to ensure that innocent people had recourse to justice when they were being intimidated or bullied in an unjustified way.
Our royal charter meets all three tests: it delivers Leveson, it commands cross-party support and it strikes the right balance between the freedom of the press and the rights of individuals. One of the biggest hurdles that we have all had to overcome has been the polarisation of this debate, with the idea that someone is either for a full statute or against it, and that they are either on the side of the victims or on the side of the press, when in reality most people are on the side of both. We have not succumbed to those false choices, however.
We have forged a middle way with a royal charter protected by legislation—a system of independent self-regulation, a voluntary system just as Lord Justice Leveson outlined—but with two specific statutory provisions. First, there will be a legal provision to ensure that if a newspaper is signed up to the regulatory regime, judges will be able to take that into account when awarding costs and damages in the courts. Newspapers will be rewarded for playing by the rules, and I very much hope that the newspaper groups will now see the logic of that incentive and get behind the reforms.
Secondly, there will be an entrenchment clause to prevent future Governments from chopping and changing the royal charter on a whim. I have been pushing consistently for that legal safeguard since the royal charter model was proposed. Without it, the royal charter would leave the door open to political meddling by future Governments, and that is a risk that we must not take.
Mr Jack Straw (Blackburn) (Lab)
In 2008, the House agreed, on an all-party basis, in sections 77 and 78 of the Criminal Justice and Immigration Act 2008, to strengthen the penalties in section 55 of the Data Protection Act 1998 for breach of data protection. Alongside that, a separate section guaranteed press freedom and a public interest defence. Does the Deputy Prime Minister agree that this is now the time, more than four years after they were passed, to bring those sections into force?
The Deputy Prime Minister
The right hon. Gentleman makes a strong case, and that course of action was recommended by Lord Justice Leveson as well. It is not covered by this cross-party agreement, but it is one of the issues that we will need to sweep up.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Will the Deputy Prime Minister give way?
The Deputy Prime Minister
If the hon. Gentleman does not mind, I would like to conclude my remarks.
With these protections, the royal charter represents the best possible outcome.
The Deputy Prime Minister
If the hon. Gentleman does not mind, I would like to conclude—[Interruption.] All right, I give way.
Mr Cash
In relation to the question of statutory underpinning, will the Deputy Prime Minister explain whether the fact that only two thirds of the Members of each House, rather than the whole of each House, will have to vote on the matter will make a difference to the outcome?
The Deputy Prime Minister
Hallelujah! A question that was not about Europe. I do not think that it will make any difference whatever to the status of the statutory entrenchment governing the circumstances in which the royal charter could be changed.
The Deputy Prime Minister
If the hon. Gentleman does not mind, I will not give way. Many hon. Members wish to participate in the debate, and I want to conclude.
With these protections, the royal charter represents the best possible outcome. I want to pay tribute to the campaigners, the victims and the families, without whom none of this would have happened. Their ordeals forced us to sit up and take notice, but it has been their tireless efforts and remarkable determination that have kept up the pressure. Throughout the sometimes fraught political negotiations, they have remained steady and consistent, asking simply that we do the right thing.
Finally, I would like to commend Members across the House, and the Prime Minister and the Leader of the Opposition, for working across party lines to get this done. The truth is that this is not a victory for any one individual or any one team; it is a victory for working together, for putting narrow interests to one side and for sticking with it. Today we turn a page on the mistakes of the past and, finally, establish a proper independent watchdog to serve the British people while protecting our free press.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I commend the Prime Minister, the Deputy Prime Minister and their colleagues and congratulate my right hon. Friend the Leader of the Opposition and his deputy, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman)—and, indeed, Lord Charlie Falconer, who has done excellent work with them—on finding what I believe to be not a fudge, but an elegant and sophisticated solution to squaring the circle. I have a registered interest both as a contributor to the press, and, with my family, as a victim of hacking—an issue that has not yet run its course.
What happened to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) in the courts today indicates just how far we still have to go to get some branches of the press to understand what they have done and what they need to put right for the future. I also commend the victims of press attack who have been so assiduous in carrying through—sometimes with great pain to themselves—the campaign to get to where we are today.
Let me say that the solution that we have reached—and I am very glad that we have reached it—protects the freedom of the press while also protecting the reputation of Britain across the world. It is important that what is done in this House or in our media cannot be misused or abused when it comes to the oppression of a free media in other parts of the world. We still have a problem in this country, however, in respect of what is now described as “the new media”. I hope that the charter and the sophisticated way in which penalties will be applied to those outside it will help us. I was sorry that Lord Justice Leveson’s report did not deal with the future, but we have an opportunity to do so now.
I make this brief speech because I believe that Parliament and politicians of all parties have demonstrated a professionalism, sophistication and maturity that, if applied to other areas of our lives, would be commended by the British people. Let me also make an appeal to some branches of the media and some campaigners who still “don’t get it”, to quote the words originally used when Leveson was being debated.
I want to ask Index on Censorship, which was on the radio at lunchtime, please not to mislead people into believing that this agreement achieves something that it does not or says something that it does not. I want to say to those in the media who have been extremely vocal over the weekend that they should please accept today’s agreement as the best possible outcome to a situation that was at one point seen as virtually impossible to resolve, with no squaring of the circle. The circle has been squared; Parliament has lived up to its historic reputation; the leaderships all political parties have stood up and been counted—and we should be proud of this Parliament and our leaders today.
Mr John Whittingdale (Maldon) (Con)
I join those who have already congratulated the leadership and members of all three parties on achieving at the eleventh hour an agreement on a way forward. It is now more than six years since Clive Goodman and Glenn Mulcaire were convicted of unlawful interception of communications. The reverberations from that are still continuing, but what we know for certain is that the initial claim that it was one rogue reporter was completely untrue. We now have evidence to suggest that the claim that it was one rogue newspaper was also untrue. We await further developments, but we are now on the point of getting what was needed for at least that six years or, arguably, for far longer—a tough independent regulator of the press with real powers, able to carry out investigations. That is necessary to avoid any repetition of the abuses we have seen.
Paul Farrelly
I thank the Chairman of the Committee on Culture, Media and Sport for giving way. After the journey we have all been through, does he agree that to command public confidence, what we need now for the new regulator is a new chairman and also a new chairman of the code committee so that we can have a clean break from the discredited past?
Mr Whittingdale
We do need a new tough regulator, and the appointments to it will be conducted under the processes now contained in the royal charter. There is a recognition body to be established that will make sure that those appointments are compliant with the requirements of the Leveson report.
I want to make sure that the House does not lose sight of the fact that although there have been terrible abuses committed by the press, we still need to recognise the vital role that the press play in a democratic society. The press have also been responsible for uncovering acts of corruption and abuse of power, and that does not apply only to the broadsheet newspapers: some tabloids have an equally honourable record in conducting such campaigns. As I think the Deputy Prime Minister said, we should recognise the vital importance of local newspapers, and ensure that whatever system we introduce does not add to the burden on them at a time when they are experiencing very difficult economic circumstances.
The majority of Lord Justice Leveson’s recommendations have always been the subject of agreement on all sides. Everyone agrees about the need for a tough, independent regulator. It may well be that the outside world will wonder why, in that case, it took until two, three or four in the morning for agreement to be achieved on what might appear to be a very small issue. However, I commend the Prime Minister for his recognition of the fact that even a small amount of legislation could—I repeat, could—be very dangerous. Certainly the suggestion of statutory underpinning caused real concern, and not just among people who were singing to the tune of the press. Organisations that are dedicated to fighting for civil liberties in this country and abroad also raised genuine concerns about the implications.
Caroline Lucas (Brighton, Pavilion) (Green)
I welcome the agreement, but does the hon. Gentleman agree that it is disappointing that the proposals do not deliver equality in terms of women’s representation on the regulatory and overseeing bodies, and thus do not address the endemic sexism that is sadly very present in the British press today?
Mr Whittingdale
I am afraid that I do not share the hon. Lady’s disappointment. The last thing I want is for the royal charter, or the House in particular, to dictate who should or should not serve on the regulatory body. That is a matter for the press, although it will need to meet the requirements laid down by Lord Justice Leveson, which will be enforced by the regulatory body. However, I am sure that the press will have heard what the hon. Lady has said, and will want women to be represented on the body when it comes to make its appointments.
This will be a voluntary system. It will be possible for Private Eye, perhaps The Spectator, perhaps even a major newspaper, to stand outside the system, and maybe to have its own regulatory body; but if the press are to enjoy protection from the award of exemplary damages in defamation actions, some legislation will be required. I think that that has always been accepted, and I think that it is sensible. It is ironic that some of those who have been campaigning on the issue were prepared to jeopardise the Defamation Bill, which they themselves recognised as being so important, and which is vital to the protection of not just the press but individuals who suffer defamation.
Mr Peter Bone (Wellingborough) (Con)
Will my hon. Friend say a little about the process that has taken place? A major reform has been decided behind closed doors with representatives of party leaders, perhaps unelected. Members of Parliament did not even have a chance to look at the draft until the beginning of the debate. Is he in any way concerned about that?
Mr Whittingdale
The original draft was published some days ago, although it has been subject to amendment. I fear that the truncation of the process over the past 24 hours has prevented us from having as much time as was desirable, but if the outcome has been the achievement of all-party agreement and the opportunity to have this debate, I personally welcome that outcome.
The safeguard in the charter—the requirement for a two-thirds majority in both Houses—is welcome because it will send the message that politicians will tamper with the royal charter at their peril. It is, of course, somewhat cosmetic, as any future Government with a majority in Parliament could overturn it and legislate if they chose to do so. It does, however, send the additional, powerful message that this is something in which politicians should not become involved. That issue has always underlain all my misgivings—and, I think, those of my hon. Friends—about the original recommendations in Lord Justice Leveson’s report.
I greatly welcome the fact that we have now achieved this agreement. I hope that it will deliver what we all want: a free press, protected from interference or pressure from politicians, but at the same time subject to clear rules enforced by a tough and independent regulator. If that is the outcome, the House will have done a good job.
Mr Tom Watson (West Bromwich East) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests.
For every one of the five years that I have been worrying this bone, people have been telling me to leave it. They have been some very dark years—though latterly rather euphoric, I suppose. Most of the time it has been quite lonely and bleak. We have learnt some pretty dark things about ourselves. By “ourselves,” I do not just mean politicians and the media; I mean the whole of what used to be called the establishment—the quiet cabal that runs the country, all within five miles of where we sit tonight. I am talking about not just politicians, but prosecutors; not just journalists, but judges, industrialists and editors; policemen, commentators and publicists; the bold with the meek; and the guilty and the damned. We were all part of this. This was not a conspiracy that no one knew about—not in the establishment anyway. Among the people I am talking about—the few thousand most powerful people in the land, in whose collective charge are the freedoms of everybody else—in that wealthy, privileged powerful group with so much to lose, everybody knew.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Will the hon. Gentleman give way?
Mr Watson
In a minute. They did not all perhaps appreciate the scale of what went on, but everybody knew that a crucial part of our nation’s body politic was rotten. We did not know that they were hacking Milly Dowler’s phone, but we knew that that was the kind of thing they did. We knew that there were virtually no limits to the kind of things they did, and we did nothing. For years, perhaps decades, we collectively looked the other way. To be candid, even now we have let families such as the Dowlers shoulder a heavy load. They should not have been put in a position to mediate on these proposals, but they were and they did so—they had to—under great duress, but with customary dignity. They did so because while the most atrocious things were being done by people charged with upholding the highest standards, we averted our eyes—or we actively conspired. We joined in with what they did to other people because it made it less likely—we thought—that they would do it to us.
At the root of all this was fear: an abject, dark-hours-of-the-morning screaming terror that they would turn the lights of hatred on us, destroy us and humiliate us—with pure lies or half truth, it did not matter which—deliberately and viciously, for no reason other than because they can, it makes money and it is just what they do. The effect was that the lives of the not-rich and the not-powerful—the utterly innocent, so much less able to defend themselves—were laid equally bare to the random acts of malice that we came to believe were inevitable.
That was the dark hour of our parliamentary democracy, whose lessons we must not forget as we congratulate ourselves today. But we can also take heart from having finally fought back. Parliament showed its strength where Governments failed. Brave journalists showed that the profession itself is a proud one. Honest police—more than any in the person of Sue Akers—showed that the long arm of the law, once unshackled, can still reach where it should.
Today’s agreement is a good one; it is more than just a moral victory. It took patience and strength to see it through. It almost feels like a kind of closure—but I do mean almost. We have a responsibility to give something back to journalism with strengthened freedom of information laws, a proper public interest defence and imaginative ways to support investigative journalism through the disruption of digital transition. At this late hour, I hear that the charter extends its remit to internet publishing. I hope that we can make the distinction between self-publishing for pleasure and digital news reporting for profit.
The central characters in this tragedy are Rupert Murdoch and his News Corporation. He still sits at the head of the most powerful media conglomerate the world has ever seen and he still has politicians in his pocket. They still will not change the media ownership rules because they are frightened of him and they curry his favour. Amid it all, the Prime Minister looks over his shoulder as Murdoch’s people start to replace the current generation of leaders with the next. It is most naked on the Conservative Benches, but let us not avert our eyes again and pretend that it is not happening on the Labour and Liberal Democrat Benches, too.
As we reflect on the terrible cost of failures today, let us not leave the lessons half learned. Our children will not thank us for leaving the hydra with one head.
Simon Hughes (Bermondsey and Old Southwark) (LD)
This whole debate began because the public felt that some of the press, not all of the press, were far too close to some politicians, not all politicians, and particularly to politicians in government. It began because the public felt that some of the press, not all of the press, were far too close to some police, not all police, in a way that was very corrupting. It also started because people were worried that some of the press would become all-powerful, leaving no pluralism among those looking after news and current affairs, which is a guarantee of real freedom and understanding.
In many years since the war, Parliament and Governments have perfectly properly and reasonably commissioned inquiries into the press. When the most recent scandals broke and the Prime Minister took his brave decision to announce that an inquiry would be carried out by Lord Justice Leveson, with the agreement of the Deputy Prime Minister and the Leader of the Opposition, it seemed to me that Parliament and the parties all agreed that such matters should be reconsidered as things had gone badly wrong. There was consensus; I have never known such strong consensus in this House as there was at the moment when Parliament said that we had to put our house in order.
I commend Lord Justice Leveson and those who worked with him on his inquiry, to which the three party leaders, I and many others gave evidence. Lord Justice Leveson came up with an extremely balanced report and its credibility is strongest because it is so well balanced. It did not come up with a draconian new regime to deal with the press, but understood the desirability of, the need for and the absolute imperative for a free press in this country while saying that we needed systems in place.
We had a bit of a debate in this place and in the media about what the structures should be and Lord Justice Leveson spent a large part of his time and conclusions on that subject. He was clear about two things, however. He was clear that there should be an independent self-regulatory system, and that that should be underpinned by statute. He made that explicitly clear and today, in a clever but appropriate way, we have ensured that there is a charter at one remove from legislation through which we can guarantee the new system and that is locked in by a legislative safeguard. I commend those who thought of the idea and I think it gets the balance right. There is underpinning in legislation, but the key document is a charter agreed by this Parliament and by all the parties in this place.
Paul Farrelly
Another advantage of today’s agreement is that the Defamation Bill, on which we have worked so hard, will be free to proceed. The amendments made by Lord Puttnam will be dropped, but another important amendment to the Bill raises the bar on the ability of corporations to use the chilling effect of libel law on legitimate investigative journalism and wholly helps the press. Will the right hon. Gentleman commit to supporting the retention of that provision when the Bill returns to the House of Commons?
Simon Hughes
I thank the hon. Gentleman, who is a journalist by training, for his work on the subject. One of the good things about today is that we liberate the Defamation Bill and enable it to become the law of the land. We have a very out-of-date defamation law. It has fallen into disrepute and one of the things that we will have done—I was going to mention it—is make sure that we do not clog up other legislation on which both Houses have worked very hard, and prevent it from becoming law—the Crime and Courts Bill, the Enterprise and Regulatory Reform Bill and the Defamation Bill. I hope we can now go on to get the legislation as right as is humanly possible in the remaining weeks of this Session.
There is a suggestion that some parts of our society should be outwith any legal construct. I do not think that has ever been accepted in this country, and when we have not seen adequate self-regulation, Parliament has intervened. We have done it in recent years in respect of doctors, solicitors and ourselves. We have taken complete self-regulation away from this place because we did not think we were doing the job properly, and The Daily Telegraph and others showed that we were not doing our job properly. I commend them for what they did.
We have always followed the adage of the old judge, “Be you ever so high, the law is above you”, and that applies to the press too. We have never had a press free from the laws of the land, but—returning to the intervention from the hon. Member for Newcastle-under-Lyme (Paul Farrelly)—the libel law, the defamation law, was not available to most of the public. It was available to the rich and famous, and very difficult for ordinary people to pursue. Yes, there is criminal law governing the press, and phone hacking was illegal under criminal law. That did not deal with all the complaints and all the problems that had arisen.
I, like others here, am one of the victims of those illegalities, but I do not think any of us here think that the problem was that we were getting it in the neck or that celebrities were getting it in the neck. We felt moved to act because people who were entirely out of the public eye suddenly found themselves entirely in the public eye, vilified, abused, misrepresented, traduced or publicly humiliated. It is people in the estates in Bermondsey and in the constituencies of all of us whom we are seeking to support, not because they do not need a free press—they do—but because on occasions the press had abused them without adequate remedy.
Mr Bone
The right hon. Gentleman is making a powerful statement, but is he really arguing that something like the Independent Parliamentary Standards Authority is being set up? There is a serious point here. We know that IPSA has reduced the effectiveness of Members of Parliament, and if we are setting up a similar body which reduces the power of the press, we have something to worry about.
Simon Hughes
If I tried to defend IPSA now, I think I would be lynched, so I shall not do so. That is not the model that has been followed, and the royal charter is as far away from IPSA as anyone could have contrived.
Let me make two final points. The important thing to come out of today is that we have established a regulator which nobody can veto, a code of conduct which, yes, will be drafted by the press but has to be agreed by somebody independent of the press, the rights of third parties to complain, and probably most important, the right of the regulator, if necessary, to direct both an apology and the method of the apology.
The greatest abuses recently have been the sort of examples that the Prime Minister and the Leader of the Opposition gave. Somebody appears on the front page, the subject of a story that is totally untrue. Their career may be ruined, their reputation damaged, their lives, their mental health and their finances decimated, and there is no remedy available. What happens and has always happened is that a very small correction or apology appears later, sometimes. That is the real failure of the system to date and that will now change. All our constituents should have some hope that there may be a fairer system.
Bob Stewart (Beckenham) (Con)
Is the right hon. Gentleman suggesting that if there is a calumny on the front page of a red top, the apology will also be on the front page? If he is, that is great.
Simon Hughes
That is exactly what I think the public want. That is why it has been a privilege to work with colleagues of all parties and their staff. I pay tribute to the Prime Minister and his team, to the Deputy Prime Minister and his team. and to the Leader of the Opposition, his deputy and their team, and to their staff, the civil servants, the special advisers and others who have worked beyond the call of duty, and to the Clerks, including the Clerk of the House. There has been an absolute will to try to solve the problem in time.
Mr Adrian Sanders (Torbay) (LD)
Is not the prize here the fact that a free press will still be able to expose wrongdoing, but not at the expense of trashing people’s lives?
Simon Hughes
That is a very good summary. We want the best and freest press in the world, but we do not want a press that is marred and tarred by being seen to cosy up to the Government of the day, and compromised, and parties compromised. We do not want a press that does dubious deals with the police behind closed doors, not in the interests of members of the public. We want people to be able to be supported by the press, not trashed by the press. My hon. Friend is quite right.
Simon Hughes
No, please, many others want to speak.
For 20 or 30 years, colleagues of mine in both Houses have said that we needed an inquiry such as this—Lord McNally, Matthew Taylor and many others—and we have now had one. Whenever people ask me what I stand for, I do not invent my own words; I look at the little card that my party issues, which quotes from the preamble to our constitution. I hope that we have all done what one sentence of that preamble says, and that we have all today taken action
“to build and safeguard a free, fair and open society, in which we seek to balance the fundamental values of liberty, equality and community”.
Today is about getting the balance right. I think that we have corrected the balance and it is a tribute to all who got us here.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
For me, this day marks the end of a journey that began 21 years ago when I became Chairman of what was then the National Heritage Committee. Our very first inquiry was into privacy and media intrusion. At that time, we were particularly concerned not so much about what the press does to public figures—although sometimes what it does to public figures can be cruel and unjustified, but we are in the game and we know what we face—but about what the press does to private individuals who have never had any experience of a journalist knocking at their door or coming through their garden gate, and who suddenly, through no fault or initiative of their own, find themselves hounded and harassed by the press. We referred in that inquiry in particular to families of murder victims. We referred to families of soldiers who had been killed in action. They could neither control what had happened to their families nor in any way respond or cope with journalists looking for a story.
We made a recommendation that the remedy should be a privacy Act with a public interest defence. We were looking at parallels with the United States constitution, which defended the freedom of the press while at the same time defending the freedom of individuals. It is very sad that although the remedy that we proposed might not necessarily have been the most effective or the most appropriate, nothing was done. Nothing was done by the Government who were then in power; nothing was done by the Labour Government who succeeded it. We are having this debate today only because of the exposure of the scandal of phone hacking, particularly concerning the Dowler family, but also relating to a considerable number of victims of intrusion into privacy.
I congratulate all involved in arriving at the solution that has been put before the House today. When the Prime Minister made his initial announcement, I made clear, as I did in the subsequent debate, my opposition to statutory regulation of the press. I was a working journalist for nine years on Fleet street, and I was proud of the privilege of working in communications, establishing facts and investigating wrongdoing. Whatever we might think of some of the worst excesses of the press, a free press is indispensable to a free democracy. Indeed, I would go so far as to say that if the choice were between a corrupt and irresponsible press or a state-regulated press, I would—obviously with great reluctance and while biting my tongue—opt for the irresponsibility and corruption. I want a free press in this country, and I want it to be able to do what it does without fear or favour. Today we are getting the possibility that that can be achieved while protecting decent, innocent people from intrusion.
I congratulate my right hon. Friend the leader of the Labour party. Other leaders of the party could have worked on this but did not, however much I admired them and however much they were my friends. I congratulate the Prime Minister, because his agreeing with my right hon. Friend to have a royal charter—I congratulate the right hon. Gentleman who thought that up, because it was very clever indeed—made what is happening today possible. I congratulate the Deputy Prime Minister, too, and my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the deputy leader of my party, on her hard and detailed work.
What we have today is the possibility of proper regulation. All my experience of the Press Complaints Commission, both personally and as Chair of what became the Culture, Media and Sport Committee, showed me that it was a total waste of time. It was a façade behind which the most irresponsible parts of the press did whatever they wanted. Over the years, and even after publication of the Leveson report, they still dragged their feet and had many more drinks over the eight in the last chance saloon. Well, the last chance saloon is putting up its “Closed” sign today, which is a very important achievement.
Although no newspaper is faultless, I think that it is appropriate to pay tribute to the journalists on The Guardian, who worked very hard on this and were not stymied or deterred. That is important, because they demonstrated that in the middle of all the scandal and uproar, journalists could still do the job of a journalist.
Mr Bradshaw
Does my right hon. Friend agree that as well as The Guardian, the Financial Times, The Independent and the Mirror Group deserve credit for having last week agreed with the Labour and Liberal Democrat versions of the charter?
Sir Gerald Kaufman
I do agree. Of course, I am always ready to pay tribute to the Mirror Group in view of the fact that it paid my wages for nine years and I wrote leading articles for it.
We now have a chance—the equivalent of a public interest defence. With luck, but with far more than just luck—with an enormous amount of detailed consultation and work—we have got to this position today. When I spoke in the debate on the previous occasion, I said that when I was a working journalist I was proud to be a working journalist. The House of Commons, working as a British Parliament should—it does not all that often do so—has now made it possible to restore the pride in being a journalist, and that is a great achievement for all of us.
Mr Charles Walker (Broxbourne) (Con)
This House is at its best when there is an element of tension in the debate, and I am concerned that there is not that tension today.
We have a pretty revolting press in this country; I realised that from about the age of 18 onwards. It is pretty unpleasant, to be perfectly honest; there is not much merit in much of its coverage. However, I am concerned that so many speakers are saying that we must have a free press, must respect that free press, and must enshrine the freedom of the press in some form or in some law, because I thought that a free press was simply part of the deal of living in this democracy. I also worry when we say that we are not enshrining these new laws in statute. We have amendments on the Order Paper and we talk about having to pass this into law both in this House and in the House of Lords. To me, that feels very much like statutory regulation and legislation.
I have the greatest sympathy for all the people who were turned over by the press. Although it is unfashionable to say so, I also have a great deal of sympathy for many of our former colleagues who were turned over the press; I think that many of them were very good men and women. The truth is that more than 50 journalists have been arrested and face a date in court.
The police seem to be getting their act together. They are rooting out the bad practice whereby police officers sell stories or are in the pockets of the media. We are getting to grips with that issue. Another part of the problem we are facing up to is that the leaders of the main political parties have been far too cosy with the media for far too long. We cannot separate those relationships from what is happening here today. As a political class, we have failed as well.
Penny Mordaunt (Portsmouth North) (Con)
I understand why my hon. Friend is unhappy, but does he take any comfort from the fact that we have been able to argue that it is right to take the route of the royal charter, which was once a minority view, as opposed to other forms of regulation?
Mr Walker
I note my hon. Friend’s intervention, but I remain concerned about the royal charter. Even changing the royal charter requires the changes to be laid before both Houses and to secure a resolution by two thirds in both Houses. We do not do things by two thirds in this place; we do things by 50% plus one.
Jacob Rees-Mogg (North East Somerset) (Con)
The two-thirds thing is obviously nonsense, because this House cannot bind its successors and a future Parliament can simply delete it.
Mr Walker
I thank my hon. Friend for his intervention. I agree that the two-thirds provision is nonsense. It first appeared in this House as part of the fixed-term Parliament legislation. It was wrong then and it is wrong now.
I have probably gone on for far too long. Many better speeches than mine will be made today, and already have been. All I would say is that we have to strike a note of caution. I am not sure that today is the wonderful day that everyone is portraying it to be; in fact, I think it is a very sad day. I hope that we do not live to regret this at some stage in the future.
Chris Bryant (Rhondda) (Lab)
I refer hon. and right hon. Members to my entry in the Register of Members’ Financial Interests.
This morning was quite exciting. Last week’s papal conclave lasted only two days, but a conclave that had lasted five days, or even 10 weeks, brought forth white smoke this morning. I hope that I do not have to say this too often, but I commend the Prime Minister. We now agree on two issues—press regulation and same-sex marriage. It is getting to be a habit, so let us hope that he joins us on the bedroom tax and a few other things.
Dr Wollaston
Does the hon. Gentleman agree that it was more white flag than white smoke? I agree with my hon. Friend the Member for Broxbourne (Mr Walker) that this is a sad day. This is more than just a toenail in the door of regulation of the press and we may live to regret it.
Chris Bryant
I am afraid that I am going to take the Prime Minister’s side on this. I think that the proposal is well crafted, necessary and sufficient and that more might have been harmful in the way suggested by the hon. Lady. Incidentally, I am not particularly in favour of Popes, so the white smoke analogy is almost irrelevant.
I also commend the leader and deputy leader of my own party, because they have driven resolutely towards a sane and sensible conclusion, which is what we are discussing today.
Kevin Brennan
Does my hon. Friend take with a pinch of salt all this stuff about Winston Churchill and a free press? It was Churchill, after all, who published a state-funded newspaper, The British Gazette, to try to suppress the general strike.
Chris Bryant
I think I will leave that to one side, but I did object slightly to the front page of The Sun today, because its hyperbole did it no favours. It did not inform the debate and I think it was unwise.
My interest in this issue started before I was elected as an MP, when the two girls were murdered in Soham. A friend of mine, Tim Alban Jones, was the vicar of Soham and I remember clearly that every door in that village was knocked, not just once but many times, because members of the press—and, sometimes, television and radio crews—were desperate to find some new angle to the story in order to sell their newspapers. Frankly, that community was in complete and utter shock. The press was not doing anything illegal, but it was unethical and immoral and it bullied and hounded the local community, which was deeply distressing, particularly to the families who had lost loved ones.
It took the vicar to stand up for the community and say, “Listen folks: will you please just leave this community alone?” The Press Complaints Commission in that instance was completely and utterly useless. I think the Prime Minister once referred to the PCC as a busted flush and that is exactly what it has proved to be.
Jacob Rees-Mogg
The BBC has a royal charter. Will the hon. Gentleman remind me of how well it has behaved in recent years, particularly in relation to Jimmy Savile? Is a royal charter an amazing thing that prevents abuses from ever taking place?
Chris Bryant
No, of course not. I think it was Thomas Hughes, who wrote “Tom Brown’s School Days”, who said that simply passing a law will not make everybody obey the law and that making theft illegal did not prevent everybody from being a thief.
I was in the High Court this morning to hear yet more revelations about how a phone belonging to a Member of this House was stolen from her car in 2010 and then, only late last year, its private details accessed by The Sun. Personally, I do not think that the editor of that newspaper should still be in his job. It is incredible that an organisation that had said that it was cleaning out the Augean stables was still, in September and October of last year—long after the Milly Dowler revelations came out—behaving in this extraordinary way.
Mrs Madeleine Moon (Bridgend) (Lab)
I totally endorse everything that my hon. Friend has said about Soham. That is exactly the experience that we had in Bridgend. The difference between Soham and Bridgend is that the Press Complaints Commission did come to our rescue. I will always be grateful to it for that. The PCC standards were changed and it made a difference in Bridgend. The PCC was toothless in many ways, but that was because the regulations under which it was set up made it toothless. Where it could act, it did.
Chris Bryant
I hate to say it again, but I rather agree with the Prime Minister. The PCC was toothless because it was not independent. It was not independent from the press in any shape or form. The code committee consisted substantially of editors, many of whom adjudicated on whether they had broken their own code. When they had broken their own code and it had been decided by the rest of the committee that they had done so, they stayed on the committee. They had an extraordinary way of marking their own homework, giving themselves an A and, when their colleagues said that it should have been a B, deciding that it should have been an A-plus.
Not only was the PCC not independent; it was held in contempt. Throughout the revelations on phone hacking by the News of the World, the PCC decided not to investigate. That was partly because it did not have the power to investigate, but I believe that it also chose not to investigate. It always took the line of the News of the World. It hung out the line about one rogue reporter for everybody else to bite on for longer than even the News of the World. In the end, the chairwoman of the PCC had to pay damages to a journalist because she had completely and utterly got the story wrong.
Damian Collins (Folkestone and Hythe) (Con)
When we debated the Leveson report last year, many hon. Members said that self-regulation had clearly failed. I think that the hon. Gentleman is saying that we never had a system of self-regulation because the PCC was never a regulator. What we have today, which the House can unite behind, is the first ever proper system of self-regulation for the press.
Chris Bryant
Spot on! I completely and utterly agree with the hon. Gentleman.
This point matters, because if a body is not seen by the public to be genuinely independent, why would any member of the public choose to go to it for fair redress? If they think that it will always adjudicate in favour of the press, why on earth would they use it, even if it is cheaper or, as it will now be, free? I am glad that we have got that into the charter.
I am not a big fan of royal charters, and have not been from the beginning, because it is a much more autocratic way of doing business. A royal charter can be changed automatically just by the will of Ministers. That is why, at first, I was wholly opposed to the idea of the Minister for Government Policy, the right hon. Member for West Dorset (Mr Letwin). I think that he came up with the poll tax as well and I was not in favour of that either.
Chris Bryant
Sorry, we have to rename all of these things. It is great to be heckled by the leader of my own party.
Article 9 of the charter specifies that the charter cannot be changed except by a two-thirds majority. Incidentally, the answer to the hon. Member for Stone (Mr Cash) is that the two thirds applies not to all Members of the House, but just to those who vote. The most important thing is that that provision in article 9 has to be put into statute. That is the statutory underpinning that protects the charter, the House and everybody else from Ministers.
Chris Bryant
I will not give way, if Members do not mind, because I have given way quite a lot and I am sure that hon. Members think that I speak too much anyway. [Hon. Members: “Hear, hear!”] It is nice to unite the House. Again, it is nice to see the leader of my party agreeing.
We can all agree to this system today, but if the press does not sign up to it, it will have been a complete and utter waste of time and energy. The money that was spent on the Leveson inquiry—wasted; the efforts of all the families who put themselves through another form of upset and humiliation—completely and utterly wasted. I say to the press that there are times when their hyperbole is wonderful, entertaining and lovely. Even when vicious hyperbole is addressed at oneself, one can sometimes take the joke. However, some of the ways in which the press have put forward their argument in the past week have not been helpful to their cause. I hope that the press will now come on board.
There is a proud press tradition in this country of being able to tell the truth to the Government, politicians and those in authority. The Guardian revealed the truth about phone hacking at the News of the World, despite many other people trying to prevent that from coming out, and that is important. For myself, I bemoan the fact that the Rhondda Leader is not quite the newspaper that it was nine years ago; it is not as read as it was then, which means that local politics are probably even less scrutinised than Parliament today.
I wish to make one brief point about the way we are conducting our business today. I now have a copy of the charter—I think it is your copy, Mr Speaker, and I am grateful to you for finding one for me. In the end, however, this is not a good way for the House to do business. We are dealing with a motion that we have not seen—the motion we are debating is not printed anywhere—and a draft charter that people have only just seen, halfway through the debate as it is handed round. We have manuscript amendments in this House and the House of Lords, and on the whole we tend to make bad legislation when we do it on the hoof and those on the Back Benches are asked to trust in those on the Front Benches.
We are doing a good thing today and it is something we should have done a long time ago. I take no pride in the fact that the Government whom I supported when the Labour party was in government did not do enough in this field and could have acted earlier. In the past, we as politicians have tended either to chase or to run as far away as possible from a headline, which on occasion has meant that we have not been brave enough, or been too cowardly, in matters of press regulation. We let the victims of crime become the victims of the press as well, and—let us face it—we let Parliament be lied to time and again. I am glad we are putting a full stop on that today.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
I congratulate my right hon. Friend the Prime Minister on preventing us from going down the route of full-scale statutory legislation of the media. Undoubtedly, what he has achieved was the best possible measure that could command a majority in the House. I urge the House, however, to remember that when Members on both Front Benches agree, we invariably make our worst blunders because the normal adversarial process of criticising measures is put aside. I hope we will consider what may be wrong with this measure, as well as what may be right.
The Leveson inquiry was set up because of phone hacking and libel, both of which were and are against the law, and neither of which is tackled by this royal charter. Those who always—rightly or wrongly—wanted to legislate to control the press have seized on the abuses of hacking and libel to propose legislation that tackles quite other problems that they see and have always wanted to deal with.
I sympathise with those who have been victims of press abuse—I, my family and relatives have probably been subject to more defamation and intrusion than almost anybody else in this House. Only last month I sent another cheque for 20 grand to a charity in my constituency after the latest offensive defamation. I do not think, however, that we should automatically presume that those who have been victims of abuse have great expertise in legislative matters, or grant those of us who have been victims a licence to legislate without criticism. That is simply mawkish sentimentality and it has led the House to focus exclusively on the legal framework we are establishing—a royal charter versus statutory regulation —and not on the powers we are giving the regulator, or that the regulator will be able to give itself.
I asked the Hacked Off lobby group, which was lobbying me and saying that it was keen to answer my questions, what powers to prevent or require publication the regulator will be given by this royal charter, what sort of material it could prevent or require the publication of, and what limits there are to the sorts of material it could prevent or require publication of.
On first inspection, it appears that the charter can require prominent apologies for abuse of individuals. If that were all it could do, I would be fine with it. In my time, I have had a banner front-page headline apology—I forget which newspaper it was, but the bottom banner headline on the front page was, “We apologise to Peter Lilley”. I hope others get the same when they are similarly abused.
However, that is not all the charter can do—the powers go beyond that to enabling the regulator to do other things, such as requiring those who subscribe to publish a factual correction. That is a pretty dangerous step. We are giving a body the right to decide what is fact and what is true. At best, that is a recipe for multitudinous time-wasting complaints that something is factually incorrect; at worst, it will establish a mini, self-appointed “Ministry of Truth”, which can decide what is true and must be published and what is false and must be withdrawn.
We note that no similar powers are taken with respect to the BBC, which will never be required by an outside body to publish corrections when it is factually incorrect, as it frequently is—[Interruption.] The hon. Member for Rhondda (Chris Bryant) advises me how to get corrections, but it is difficult enough even to get a reply.
Mr Lilley
No; I have got the hon. Gentleman’s point.
My third point is on prevention. The charter says:
“The board should not have the power to prevent publication of any material”.
I am not sure what the legal power of “should not” is. The charter also states that the board “should” be able to do other things.
Mr Robert Buckland (South Swindon) (Con)
My right hon. Friend raises an important point about the wording of the document. The document sets out the criteria for recognising the regulator, not the terms of reference for the regulator itself, which will be a separate matter for the independent regulator. That is why the word “should” is used.
Mr Lilley
My hon. Friend reinforces my point. The document does not prevent the regulator from preventing publication; it says merely that publication “should” be prevented by someone else if they get around to it.
In any case, since the regulator can offer advice to editors of subscribing publications on how they should best comply with the code, and punish editors with fines of up to £1 million if they subsequently do not follow such advice, it effectively means that the regulator has the considerable power to prohibit or discourage publication.
The final question I asked Hacked Off was whether there were any limits in the measure as to how far the body and the code can go in future when it is annually reviewed. Each time it will be made more intense and its scope will be extended because that is how regulators work—they always increase their powers. As far as I could work out from Hacked Off’s rather incoherent reply, there are no limits to the powers that the body can grant itself or the extent to which it can go.
It find it worrying that we are, so far with no discussion, setting up a body with open-ended powers. It will have the ability to levy £1 million fines and effectively to deprive people of a livelihood if they break the code it establishes—[Interruption.] As my hon. Friend the Member for Clacton (Mr Carswell) says, like the Climate Change Act 2008, which we have subsequently learnt to regret, the charter has the support of those on both Front Benches.
I hope that when the body is established, a lot of media organisations will have the courage to follow The Spectator and stand aside from it and remain free while, hopefully, adopting the highest standards in how they publish and how they treat the public.
Mr Nigel Dodds (Belfast North) (DUP)
I am grateful for the opportunity to participate briefly in this important debate.
At the outset, it is right that we remember what has brought us to this point: the terrible abuses and suffering inflicted on the Dowler family, the McCanns and many, many others. Nobody in this country in the 21st century should have to go through what they went through. As a result of the action taken today, we hope that such abuses will not happen, but that if they do there will be appropriate, speedy and fair mechanisms in place to deal with them. Many hon. Members have referred to laws that are in place, in both criminal and civil law, to deal with such abuses. However, the law of defamation and the ability to take action in the civil courts for libel are not available to many people, because of the punitive nature of the costs and the fear that they may end up bankrupt. I am glad to hear that the right hon. Member for Hitchin and Harpenden (Mr Lilley) has had success in the civil courts, but many ordinary citizens, and even many with greater means than those in this House, have been prevented from getting justice because of their fear of the consequences of going to court.
We on these Benches have always believed that the Leveson report offers a balanced way forward. We did not subscribe to the view that it would impose statutory regulation of the press—far from it. I commend the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition, and all those who worked with them, for coming up with what I believe is a fair, balanced and sensible way forward. It is better that the House of Commons should speak with a virtually united voice on this issue, as that makes it harder for any section of the press to stand outside what is agreed, and that is extremely important. There has never been any question of any threat to the freedom of the press, and the freedom of the press is not endangered by what has been suggested here today through a royal charter.
Paul Farrelly
I commend the right hon. Gentleman and his party for their support. On that point, we congratulate ourselves today, but does he agree that the press itself sets up the regulatory arrangements and the press itself sets up the appointment panel? The only requirement is to demonstrate that the people appointed to the panel are independent of the industry, whatever that means. Must we not be vigilant all the way through, so that we do not repeat history and allow regulatory capture from day one?
Mr Dodds
I absolutely agree. It is important to emphasise that today’s provisions, and Leveson himself, propose a means of independent self-regulation. Some of the hyperbole and over-the-top commentary has been deeply counter-productive and simply wrong. The idea that there should be nothing in legislation is deeply flawed. How else will we properly apply the issue of incentives and disincentives unless we pass something in this House that deals with exemplary damages and cost? There has to be legislation. I welcome statutory underpinning—for that is what it is—to non-interference in the royal charter.
As was said earlier by a number of hon. Members, including the Chair of the Select Committee, the hon. Member for Maldon (Mr Whittingdale), no Parliament can bind another Parliament. The doctrine of the sovereignty of Parliament means that the two-thirds majority is open to being changed by a simple majority and the passage of any legislation in the normal way in any future Parliament. However, it sends a message and draws attention to the fact that if Parliament wishes to legislate on the matter, in overturning a distinct and discrete piece of legislation it is doing something significant.
Geraint Davies
Does the right hon. Gentleman think there is any risk, over time, of a political appointment to the oversight body—with the advent of a right-wing UKIP Parliament or whatever—that will constrain the freedom of the press?
Mr Dodds
No, because the system put in place for appointments to the regulatory body makes it very clear how that body should be populated. The terms of the royal charter are very clear that appointees will not be drawn from the political classes, will not be parliamentarians, and will not be involved in government or legislating. That is very important. Of equal importance, and why my party supported the version of the royal charter proposed by the Leader of the Opposition and the Deputy Prime Minister, was the issue of the press industry having a veto over who could be appointed. We believed that that was wrong and would not be tolerated in any other walk of life. It is absolutely proper and fair that there should be an appointment system that is not populated by the political classes and that is not capable of being vetoed by the industry. It was important for us that the regulator should have the power to direct apologies and corrections, including where they should be printed. That was recognised in the alternative version of the royal charter published on Friday, and we welcomed that. I therefore welcome its adoption in what is being presented to the House this evening.
We support what has been done: we welcome the fact that the royal charter has been changed for the better by cross-party agreement. I understand fully and endorse the reasons for proceeding by means of a royal charter as opposed to legislation. However, there is an irony in that we are now saying that the proper and best recourse is to proceed on the basis of a very antiquated means that is not subject to line-by-line scrutiny by elected Members of Parliament, or in any way subject to amendment. This is being brought forward on the basis of a draft by Her Majesty. Now, as a royalist and a monarchist I am all for that, and have no difficulty with it. However, in the modern, democratic world in which we live, it is ironic that we have decided that this is the way forward, rather than saying that the people’s representatives should have the opportunity to discuss, amend and vote on it. I understand the reasons, but surely there is an irony for all democrats in that.
Sir Edward Garnier (Harborough) (Con)
May I invite you, Mr Speaker, to imply into what I am about to say all the paeans of praise, self-congratulation and mutual congratulation there have been in the course of the afternoon, because that would save time? May I also draw the attention of the House to my interest in the Register of Members’ Financial Interests?
Much of the debate we have had—not this afternoon, but in the course of the previous six months or so—has been somewhat mis-focused: Lord Justice Leveson never recommended statutory regulation of the press. Just as there has been inaccurate criticism of what he recommended from the more hysterical commentators in the media, so there has been equally inaccurate and exaggerated criticism from the other end of the market. I suspect that what we have managed to do today is to come down sensibly and gently into the middle, which is probably where we would have been in the first place if we had all read the Leveson report carefully. But there we are and here we are, and that is a good thing.
Boiling Leveson down, in essence he said that the Press Complaints Commission was not up to snuff, and that we needed a better version to achieve public protection and to ensure that the press, in the appropriate cases, behaved itself. To achieve that, clearly what we do not need—as the Prime Minister has said on a number of occasions—is the press or the media to mark their own homework.
Mr Jim Cunningham (Coventry South) (Lab)
Does the hon. and learned Gentleman think that we need to clear up the relationship between the regional press and the local press, which often finds itself in financial difficulties, especially with the many cutbacks in that area recently?
Sir Edward Garnier
I am sure that that is a very good point, but it is not quite the one I am addressing.
We need to ensure that press regulation, insofar as we have it, is independent of the press and enabled to achieve justice for those affected by misconduct, but we must be careful not to oversell this project. I have a hunch—it is only a hunch, but we will find out in due course; it might be that my right hon. Friend the Secretary of State for Culture, Media and Sport, who I think will be winding up the debate—[Interruption.] Oh, the Prime Minister will be winding it up—that is even more wonderful. May I go back and regurgitate that praise after all? It is splendid news. I almost feel like sitting down.
We need to be careful not to oversell the project being launched today. I have a suspicion—I have no evidence for my hunch, but we will see over the next year or so—that not many cases will come before the new body, because it will be unable to deal with issues of huge factual or legal complexity. One problem with the PCC—it had its fans and its critics—was that it could not disentangle hugely complicated issues involving disputes about whether the sting of a libel or the words complained of were true or false. It could not gather together and sift huge volumes of documents exchanged on disclosure, which can be done by a judge and advocates in court. I suspect that this necessarily more informal system will be able to deal with only fairly simple cases. There is nothing wrong with that; I just urge the House not to be persuaded that this cross-party agreement will replace the royal courts of justice.
Barry Gardiner (Brent North) (Lab)
We have heard how exemplary damages are supposed to drive people into this voluntary arrangement, but will the hon. and learned Gentleman confirm that no judge would penalise somebody for not being part of the voluntary arrangement and would be no more likely to impose exemplary damages on somebody outside it than in the normal run of events? In that sense, the whip of exemplary damages would not be there, although I recognise that the incentive for those inside it would be.
Sir Edward Garnier
The hon. Gentleman makes a good point. The point about exemplary damages, as set out on the amendment paper, would incentivise people to join the scheme, although as I understand the amendments—I might have misread them—they do not mean that if someone is in the scheme, they will be immune from exemplary damages, and that if someone is outside it, they will always be milked for them. The old rule in Rookes v. Barnard and so forth would still apply, insofar as it is relevant nowadays, but, as the Defamation Bill will make clear, juries will be taken out of exemplary damages cases, which will be decided by a judge alone. To that extent, exemplary damages will play a part in the proposals, but in my experience they are quite rare in libel actions nowadays, although not unheard of.
Geraint Davies
Does the hon. and learned Gentleman believe that the proposed system is resilient enough to be exported? Could it be taken off the shelf by Egypt or Kenya, for example, or would it work only in a mature democracy, such as ours, where checks and balances are already in place?
Sir Edward Garnier
The Prime Minister and the leader of the Labour party were extremely busy over the weekend, as were their representatives, dealing with England and Wales—
Sir Edward Garnier
And I am not sure that their minds were on libel tourism to Cairo and other places along the Mediterranean, but who knows what will happen? Let us try and get it right for England and Wales.
Mr Speaker
Order. The hon. Member for Rhondda (Chris Bryant) keeps chuntering from a sedentary position that Wales won. His point is now on the record. I trust that he is satisfied.
Sir Edward Garnier
The hon. Member for Swansea West (Geraint Davies) will have to wait and see whether the Egyptians cut and paste our system.
On the point about overselling, I have a suspicion that we will not see many of these cases. The arbitration system will be free, which will increase access to it for those without means of their own, so I suspect that many self-represented people will come before it. That will place a strain on the panels deciding complaints.
Leveson recommended a ring-fenced monetary penalty system under which money recovered from malefactors would help to fund the system and the cases being brought before it. It would be interesting to find out from the Prime Minister whether a system of compensatory payments would be available to the body, or whether it would simply be a question of punishing the respondent newspaper or media organisation. If a victim of newspaper misconduct required compensation, would they have to go to the courts to settle or get an agreement from the respondent, or would the independent body be entitled to award the newspaper’s money as compensation? The latter, too, would incentivise claimants to use the system, rather than going to the expense and trouble of clogging up the courts with less important cases.
Barry Gardiner
What would happen if a newspaper failed to enact a decision appropriately—for example, if it printed an apology on page 32, instead of page 1? Who would quantify, and how would they quantify, that failure, and what would be the redress? Who would actually enforce the contract?
Sir Edward Garnier
The short answer is that I do not know, but I would hazard a guess that if a signed-up member, which would therefore be susceptible to the jurisdiction of the body, failed to do what the body commanded, it would be in breach of contract, and arrangements would be put in place to ensure either that the contract was complied with or that damages were payable for breach of contract. Someone might have to litigate the breach of contract, but the system might contain fail-safe measures allowing the independent body to revisit the matter and deal with the malefactor in some preordained, but sensible, way.
Sir Edward Garnier
I will take this interjection, but I am beginning to waffle, and it is high time I sat down.
Sir Edward Garnier
I am afraid that that is just one of the things we have to live with, and if we cannot cope with it, we are probably in the wrong place. I noticed that the hon. Member for Rhondda (Chris Bryant) was able to speak for 12 fluent minutes without having seen the motion or read the charter—but then he might have prepared something earlier.
Sir Edward Garnier
That is also probably true.
To wrap up, something good seems to have happened over the course of this weekend and it is about to be translated into further action this evening, but I urge us not to oversell it or think that we have solved the problem of press misconduct. It will go on—it is all part of human nature. However, we have made a small step—indeed, rather more than that—towards bringing the press and the public to a better place. I therefore commend the Prime Minister and all who took part in the negotiations.
Dame Tessa Jowell (Dulwich and West Norwood) (Lab)
I want to make just a brief intervention in this debate. I draw the House’s attention to my entry in the Register of Members’ Financial Interests and also record the fact that I am a witness to proceedings that have yet to be heard before the court in relation to phone hacking and other matters.
I join others in congratulating the Prime Minister, the Deputy Prime Minister, the Leader of the Opposition and the deputy leader of the Labour party. I also pay tribute to my hon. Friends the Members for Rhondda (Chris Bryant) and for West Bromwich East (Mr Watson). It is unlikely that we would have reached this point had it not been for their tenacity and courage at an early stage in the unravelling of this saga. I believe that the settlement announced today by the Prime Minister after negotiation represents a popular consensus—a proportionate balance between the interests of a free press, and the public interest and the reasonable expectation of the public to a measure of protection.
In the unlikely event that many members of the public will read the proceedings of today’s debate, they might at moments regard it as a debate that is rather overly concerned with the position of politics and politicians. I believe that Members of this House have to roll with the punches a lot of the time—to live with the fact that journalists will write things about us that are disobliging, that we do not like and that we do not agree with—but to some extent that is part of being a public figure. The focus of our concern and all the work done to get us to today’s settlement is those wholly private people who find themselves suddenly thrust into the spotlight of passing public curiosity, usually because something dreadful has happened to them. Their grief and distress have been compounded by the insensitivity and intrusion of the media, and that extends way beyond the individuals and families whose cases are well publicised.
Richard Drax
Is the right hon. Lady saying that, for emotive cases where, as she claims, intrusion is an issue, the press of this country should not cover such stories?
Dame Tessa Jowell
I am certainly not saying that, but I hope that the new regulatory body will establish a code of conduct that strikes a proper balance between the public interest—separating it from public prurience and curiosity—and the real and lasting harm done to people at what in so many cases is the worst moment of their lives. That is the balance that is so often lost.
Dame Tessa Jowell
With respect to the hon. Gentleman, I will bring my remarks to a conclusion. I am sure he wants to take part in the debate later.
I had particular experience of this issue as a Minister, when I was responsible for victims of terrorist attacks after 9/11 and 7/7. It was truly shocking how the grief of many of those families was compounded by insensitive and uninvited intrusions by journalists who were in the grip of the competitive pressure of their newspaper against another. Because of that, I welcome the fact that the new body will have the power of initiative, which has been one of the great weaknesses of the Press Complaints Commission.
We will condemn the new system to failure if we believe that this is the end of the story, because there will always be tension in the operation of the new set of arrangements between how the new body works, the maintenance of a free and untrammelled press and the proper protection for public interest that I know the House is united to achieve.
Sir Roger Gale (North Thanet) (Con)
I hope—and I think I believe—that my right hon. Friend the Prime Minister, with the Culture Secretary, the Deputy Prime Minister and the Leader of the Opposition, has come up with a solution to the regulation of the press through the royal charter route, addressing a problem that has lain on the table unresolved for far too long.
It was when my right hon. Friend Lord Wakeham was chairman of the Press Complaints Commission that I first raised with him my concerns about the manner in which only the super-rich could obtain redress through libel action, while ordinary people nursing ordinary grievances had nowhere to run to, because at that time the PCC was the creature of the press. It was paid for by the press, it was run by the press and it was self-serving. It was a sadness that even the black arts of my right hon. Friend, learnt in the Whips Office over many years, failed to address the machinations of newspaper proprietors and newspaper editors.
I say “I hope” that what we are doing will work because I have some reservations. My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) said that it was an updated version of the Press Complaints Commission. God forbid that it is, because if it is remotely like the Press Complaints Commission, it is doomed to failure. My concern is about the membership of the regulatory bodies, the recognition panel and the appointment panel that will appoint the recognition panel, because if there is the slightest chance that all or any of those bodies are dominated by newspaper proprietors and/or newspaper editors or senior journalists, I fear that we will again end up with yet another self-serving body.
Damian Collins
Does my hon. Friend agree that one of the key differences between the new model being proposed and the PCC is the power to initiate investigations? There were plenty of warnings about phone hacking, bad practices and the trade of confidential information, but the PCC was unable to do anything about them because it was not a proper regulator and therefore had no genuine investigative powers.
Sir Roger Gale
I understand where my hon. Friend is coming from, but we need to remember that the Press Complaints Commission set its own code of conduct, in precisely the same way, as I understand it, as the press will be invited, under the terms of the draft charter before us, to set its own code of conduct.
Sir Roger Gale
I give way to my hon. Friend the Chairman of the Culture, Media and Sport Committee.
Mr Whittingdale
My hon. Friend is correct that the code committee will remain with a majority from the industry, but does he accept that nobody, as far as I am aware, has ever complained about the code? It is generally recognised that the code was fine; the problem was that nobody paid attention to it.
Sir Roger Gale
The code may have been honoured more in neglect than in recognition. There is a danger, depending on who is the regulator—or, in this case, who are the regulators—that that could happen again.
I do not want to take up any more time. I welcome what has been achieved by my right hon. Friend the Prime Minister and by colleagues. I hope it will work, but we will have to keep a very watchful eye indeed on the implementation and—to take the point raised by my hon. Friend the Member for Maldon (Mr Whittingdale) —the enforcement of the code of practice.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
This is an important debate, but there has been a bit of hyperbole surrounding it. Today has been described as momentous, but I think that it is momentous for being the 10th anniversary of the war in Iraq; we should remember that.
No one in any part of this Chamber, or anywhere else in Parliament, would deny that a strong and free press is an essential pillar of our democracy. However, the corrupt press behaviour that we are trying to deal with, even though it takes place only in a minority of areas in the fourth estate, is a side effect of near-monopolies. We have had legislation for many years to combat unhealthy near-monopolies, but we have failed to apply that legislation properly or scrupulously to the media. This scandal is an exemplar of that fact.
I want to place on record my party’s gratitude—I am sure I speak for others—for the careful way in which Sir Brian Leveson undertook his inquiry. I also want to associate myself with some of the comments made about the proceedings over the past few days, which have perhaps not been the best demonstration of parliamentary democracy at work. During the last few hours, however, a broad compromise has been reached, and I am pleased about that. I am glad that Her Majesty’s Opposition have now reached agreement with the Government.
I should like to say in passing that I am grateful to the official Opposition for keeping me and my colleagues, and those in the Scottish National party and the other minority parties in the loop. The Prime Minister is in his place, and I want respectfully to place on record that, during the last Parliament, my party played a vital part in setting up the rather imperfect body known as the Independent Parliamentary Standards Authority. I could give him details of some of the changes that were made as a result of arguments put forward by me and my hon. Friends. Some of our arguments won the day and, in one case, we preserved the freedom of Members of Parliament to speak out in this Chamber when the draft proposals would have defeated our privilege in that regard. With the greatest respect, I urge the Prime Minister to remember that, should there be a similar occasion, we are ready and available as good parliamentarians and democrats to get stuck in, if I may use an inelegant phrase.
On the events of last week, I shall leave aside the matter of the amendments that were tabled, but I would welcome some clarification from the Government on what exactly has happened and why we have suddenly reached this decision in such a short time. The hon. Member for Wellingborough (Mr Bone) made the important point that we have not had sufficient time to decide these matters. Be that as it may, we are now dealing with the decision. Today, we have at least got an agreement that we can work on, and that is to the good of all. I commend the Prime Minister, the Deputy Prime Minister and Her Majesty’s Opposition for arriving at that agreement. Our proceedings will have been listened to by Joan Smith, Ben Loakes, Paul Dadge and Jacqui Hames, who were all in their own ways victims of the awful behaviour that we are complaining about. Today, we have an institution on which to build.
The press is the latest institution to have taken a knock as a result of scandal, corruption and illegal practice. Since the establishment of the Leveson inquiry, my party has called for the establishment of a regulatory body that is independent of Government and of industry, whose independence is guaranteed by law. We have argued, as have others, that access to restitution and a simple, easy-to-navigate complaints process should be central to any new system that is established. The new compromise provisions before us have dealt with those aspects, but the question of statutory underpinning is open to debate. If we go further into that question we might appear to be dancing on the head of a pin, however.
Geraint Davies
I agree that any response to a mistake should be equal and proportionate, but does the right hon. Gentleman think that the proposals could make investigative journalists more risk-averse, if there is a chance that they might not get a complete answer?
Mr Llwyd
No, I do not think so. It is a time-honoured practice for journalists always to check their sources, and they will need to revisit that aspect of their behaviour and ensure that they get it right the first time round. The proposals will not be welcome in all areas, however. The hon. and learned Member for Harborough (Sir Edward Garnier), for example, could find himself considerably disadvantaged financially if what the hon. Member for Swansea West (Geraint Davies) said were true. I make that joke in passing, weak as it was.
Lord Leveson’s report stated that statutory underpinning was necessary in order to set up a statutory recognition process and to provide for costs and damages incentives for publishers who subscribe to a recognised regulator. The Government have at least seen the merits of the latter provision, and tabled amendments accordingly. Sir Brian’s report recognised that publishers would need to be incentivised to sign up voluntarily to recognised regulators. He also recognised that there would be circumstances in which a court would determine that a publisher must give a claimant exemplary damages, albeit rarely, as a result of reckless behaviour. The cross- party amendments to which I initially put my name would have implemented Leveson’s suggestion that incentives should exist for publishers in respect of exemplary damages and costs in such situations. I am pleased that the Government saw fit to table similar amendments.
I have some concerns about the proposals before us, however. I realise that, due to the short notice for tabling amendments, it will not be possible for us to enter into a deep debate on these points, but I wish to put my concerns on the record none the less. First, the amendments to which I was a co-signatory, and which were due to be debated today and have now been withdrawn, would have ensured that any new commission that was established, as well as any regulatory body, would have been subject to freedom of information provisions. That is a crucial provision that would have ensured greater transparency in the new bodies, and I sincerely hope that the Prime Minister, or the Minister responding to the debate, will be able to give us an assurance that that will still be the case.
Secondly, I welcome the assurances from the Government that any arbitration service will be free for claimants to use. I am pleased about that. Another amendment to which I had put my name would have placed a duty on courts to take account of a defendant’s means, including readership and assets, when awarding exemplary damages. I welcome the fact that the proposals fulfil that requirement. Although the proposals do not meet every recommendation made by Lord Justice Leveson, I welcome the fact that the House has been able to reach a compromise, albeit at the eleventh hour, to get at least some reference to the royal charter in statute.
Caroline Lucas
The right hon. Gentleman has spoken powerfully about the perils of media concentration and the fact that today’s agreement, while welcome, is still unfinished. Does he agree that, in addition to what has been agreed today, we should call for urgent attention to be paid to measuring and tackling the concentration of media ownership, as Lord Justice Leveson recommended?
Mr Llwyd
That is a vital issue for the health of the press, and for the health of democracy. I see that the Chair of the Culture, Media and Sport Select Committee, the hon. Member for Maldon (Mr Whittingdale), has heard what my hon. Friend has said, and he will no doubt consider the matter.
It is surely clear by now that we need, and will get, a credible alternative to the Press Complaints Commission that will work in the interests of the public and of the responsible parts of the press. In Ireland, the press has been regulated by an independent voluntary body since 2008. Although the Press Council of Ireland is not a statutory body, it is recognised in legislation—namely, the Defamation Act 2009. Interestingly, all UK papers that are also published in Ireland have joined the PCI, even those that oppose statutory regulation in the UK.
Press regulation is devolved to the Scottish Parliament, and I am aware that a panel is considering the Leveson recommendations and their application in Scotland, headed by the former Solicitor-General and senator of the College of Justice, Lord McCluskey. I understand that the First Minister, Alex Salmond, has suggested in the past that he would be keen to implement Leveson’s recommendations in full, advocating an independent ombudsman and a Scottish press council similar to the Irish model.
I welcome today’s announcements and I am very pleased that this accommodation has been reached, but I agree with the right hon. Member for Belfast North (Mr Dodds) that we must be extremely vigilant as we go along. This is the beginning of the story, not the conclusion. I am sure that people who have been aggrieved will now see that something positive is and will be happening, and I am pleased about that.
George Eustice (Camborne and Redruth) (Con)
I start by acknowledging that the discussions and negotiations on this matter have been incredibly difficult and contentious for those of us who have been close to them. It would be fair to say that no love has been lost between the editors on the one hand and the Hacked Off campaign group on the other. It is also no secret that immediately after the Leveson report was published, I found myself in the slightly unusual situation of being closer to the position of the Opposition Front-Bench team than to that of my own Front-Bench team.
Mr Bradshaw
At the risk of doing dreadful damage to the hon. Gentleman’s career, may I congratulate him on his courage and attention to detail on this issue? To be perfectly honest, without the work that he and other Government Members did, we would not have produced an agreement today that was compliant with Leveson.
George Eustice
I thank the right hon. Gentleman for doing that damage. Before I move on, it is important to note that all party leaders have behaved very responsibly in this matter and I would like to give credit to the shadow Secretary of State, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), for the way in which she has approached it; she genuinely tried to seek agreement in a very difficult situation. I find myself in the unusual, almost unique, position of agreeing even with the Liberal Democrats. I speak as someone who campaigned against the euro and dislodged a Lib Dem MP to get elected here. [Hon. Members: “Hear, hear.”] I campaigned against the alternative vote and then voted against Lords reform to boot. On this issue, however, I have been able to work with the Liberal Democrats.
Most of all, I want to thank and congratulate the Prime Minister, the Secretary of State and, indeed, the Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin), because it is good to be re-united with my own party on this issue. The Prime Minister told me back in November not to worry, as he had a plan to deliver Leveson, and I think that what is before the House today does deliver the Leveson proposals—perhaps even in a slightly better way than in Leveson’s own plan, as I shall explain in a few moments.
As my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) pointed out, the important thing to understand about the Leveson report is that it explicitly said that statutory regulation of the press was not being recommended. Rather, Leveson was recommending a system that was about self-organised, voluntary regulation, to which news publications would be encouraged to subscribe voluntarily. He recommended statute to do two quite simple things. One was to establish the right incentives to join such a body, and that is the protection afforded through exemplary fines and costs; I am delighted that those will be debated later today. The second was simply to establish an independent public body that would judge a regulator—not every week, every month or every year, but every two to three years—on whether it was working effectively and meeting a certain set of criteria.
This may appear a rather ancient device to achieve what we want, but it is undoubtedly the case that a body established by royal charter is an independent public body that can perform the task equally well. There is one important advantage of establishing the body in this way, and that is that the press are more comfortable with it. Before people say, “Well, we should not be doing what the press want,” it is important to realise that in Lord Justice Leveson’s own plan he said that this would be a voluntary system. If we want publications to join something voluntarily and to seek recognition under a system, there will be a benefit in their being comfortable with it—provided, of course, that we get the detail right.
My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) picked up on some detailed points that I would like to touch on. He said that all the crimes committed related to defamation and breaches of privacy, so that the measures before us will do nothing to address those problems. That is not right, because what we have before us establishes an arbitral arm, which is a new thing, and it will provide affordable or even free adjudication on issues where there is a cause of action that previously only millionaires or celebrities could afford to take up through the courts.
My right hon. Friend also seemed to suggest that it was a bad thing for newspapers to make corrections and put right errors, but in all the difficult negotiations we have had the press did not raise this as a problem; indeed, it is what the PCC already does. There is nothing new about this. The criteria in the charter explicitly say that pre-publication advice is simply that—just advice, with no obligation on anyone to take it. A regulator will not have the explicit power to prevent anyone from publishing anything.
The £1 million fines are reserved for very serious and systematic breaches of the code, after prolonged investigations have taken place. I personally believe that we will not see many people being fined £1 million. Whenever I hear people mention them, I am reminded of the Austin Powers film in which Dr Evil says that he is going to hold the world to ransom for $1 million. What we have is a backstop power if there are really serious breaches, but what we are likely to see—this is a good thing—are more prominent apologies, corrections or perhaps lead page corrections for serious breaches.
Damian Collins
On that point, does my hon. Friend agree that there is genuine concern in the advertising industry about the commercial and reputational risks of being found to be non-compliant with the code? Has not one of the problems with the press been that legal managers and news managers have not shared the same respect for the code and have been more than happy to fly in the face of it?
George Eustice
My hon. Friend makes a valid point. The serious problem has not been the code itself, but the fact that it has not been enforced rigorously enough.
Although it has caused us several days of anxious scurrying around to get an agreement, the Prime Minister was right, in my view, to bring the matter to a head, so in some ways that was a relief to us. A number of us have spent week after week in very difficult negotiations trying to reach a conclusion. I remember one particularly dispiriting moment at the end of a meeting with some of the campaign group Hacked Off when we thought that after three and a half hours we had identified the six key things we needed to put right and one of the campaign directors said, “Shall we now move on to the next set of 20 problems that I have?” I am therefore very pleased that we have all been put out of our misery by the Prime Minister’s taking us over the brink and focusing minds in the final few days.
It is important to note, too, that the last few days have not been in vain, as some important changes have been made to the charter. The first change is that it is now clear that the board of the regulator will be independent and that there will be no press veto. That is an important step forward. Secondly, it is clear that where the investigations take place, there must be a simple and clear process so that there is no chance of a regulator putting up all sorts of barriers to make sure that it does not happen. The third point is that when the press code is written, there will be a role for working journalists for the first time. It will no longer be just an editor’s code. That is important because we need younger journalists with a stake in the future of their trade or profession—however they choose call it—to have a role in writing the code. It will be an important step forward and breath of fresh air to get working journalists, not just editors, involved in the code.
We should all get behind this compromise solution. I hope the press can overcome the apprehension it has about such a body. I do not think that there is anything for them to fear. I hope, too, that groups such as Hacked Off will be a little less hacked off and feel a little cheered up by today’s agreement.
Mr John Leech (Manchester, Withington) (LD)
I add my congratulations to the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition. I am delighted that we have reached the position where there is agreement between the three main parties on a royal charter, backed up perhaps by just a small bit of legislation to ensure independence and to avoid political interference by future Governments.
The Liberal Democrats have said from the outset that we support a strong and independent press regulator, free from political interference, that would protect the innocent victims of media abuse. What has been agreed over the last couple of days achieves that: the press remains free from political interference and able robustly to challenge politicians and expose wrongdoing, including wrongdoing by politicians. At the same time, however, those innocent victims of press abuse will have a robust regulator to hold the press to account when they have got it wrong.
I have already gone on record as saying that, in my view, the Prime Minister got it wrong when he decided to pull the Conservatives out of the all-party talks. Significant progress had been made, with both the Liberal Democrats and the Labour party giving ground on the royal charter and with only a few areas of disagreement remaining—in relation to an industry veto on membership of the regulator, changes in the code of conduct, the nature of apologies, third-party complaints, and political interference with the royal charter. I pay tribute to the Prime Minister for returning to the talks, and I am pleased that the party leaders were able to reach an agreement.
We had argued that the press should not have an industry veto over members of the regulator, while the Conservative position had been that any industry representative on the appointments panel should be able to veto any nominee for the board of the regulator about whose impartiality that representative was concerned. Schedule 3 of the agreed royal charter ensures that there will be no industry veto. That change was essential if the regulator was to have real power over the press, and I welcome the concession that it represents.
We proposed that the regulator, not the press, should have the final say on changes in the code of conduct. The Conservatives proposed that the press should be able to recommend changes in the code, and that the regulator should be obliged to accept them. That, too, would have limited the real power of the regulator. Schedule 3 of the charter states that the code
“must be approved by the Board or remitted to the Code Committee with reasons.”
The original draft stated:
“The standards code must ultimately be adopted by the Board”.
That is another welcome concession.
All too often, victims have received apologies that have been hidden between other stories rather than given the prominence accorded to the original, offending stories. A number of Members have mentioned that. We propose that the regulator should be able to direct newspaper apologies when mistakes are made. The original draft charter stated that the regulator should be able to tell a newspaper to apologise, but should have no say over the manner of that apology. It seems obvious to me that a regulator of the press should be able to influence the manner of any necessary apologies to bodies within its remit, so I am pleased to note that schedule 3 of the charter states that the regulator will “direct”, not “require”, remedial action and apologies.
We proposed that the regulator should have maximum discretion when deciding whether to accept complaints from third parties. The Conservatives proposed that the regulator should accept such complaints only when there had been a “serious” breach of the rules, and when there was “significant” public interest. In schedule 3(11) the word “substantial”, which was used in the original charter, has been eliminated, which gives the regulator discretion to decide whether a third-party complaint is appropriate.
In relation to the question of political interference, we argued that there should be a clause in legislation making it much more difficult for future Governments to amend or abolish the royal charter. Under the agreement that has been reached, the Government will insert a clause in the Enterprise and Regulatory Reform Bill in the House of Lords, which will prevent future Governments from amending or abolishing the royal charter without consulting Parliament. That is fundamental to the future of press regulation, protecting the press from the clutches of future Governments while also ensuring that the regulator cannot be watered down.
We can argue about whether this amounts to statutory underpinning of the royal charter—we would argue that it does, while others might argue that it does not—but that really does not matter, as long as it does its job and protects the new independent regulator. No doubt all the political parties will want to claim the agreement as a victory for them, but the real winners are the innocent victims of press mistreatment. The press have nothing to fear from the royal charter, but when they get things wrong, the innocent victims of their mistakes can be confident that there will be a robust system in place to put it right.
Mr Speaker
Order. According to my reckoning, there are still five Members seeking to catch my eye. I am keen to accommodate them, but we have scarcely half an hour before I ask the Prime Minister to wind up the debate. I appeal to Members to help me to help them.
Mr Robert Buckland (South Swindon) (Con)
I am mindful of your exhortation, Mr. Speaker. I shall curb my natural exuberance, and my wish to wax lyrical about a subject that has occupied my waking and, dare I say, sleeping hours in the last few weeks. I share that experience with my hon. Friend the Member for Camborne and Redruth (George Eustice).
I pay warm tribute to my right hon. Friend the Member for West Dorset (Mr Letwin), who, I know, has spent many hours when he should have been sleeping working extremely hard to secure an agreement, and I echo the warm tributes that have been paid to my right hon. Friend the Prime Minister, my right hon. Friend the Secretary of State for Culture, Media and Sport and all other Members on both sides of the House who have been involved for ensuring that the royal charter can genuinely proceed to approval by the Privy Council as a result of a cross-party consensus. I believe that without that consensus, use of this prerogative power would have been very difficult indeed. Negotiations were key if this was to work.
Today is not a day for euphoria, and it is certainly not a day for self-congratulation, but it might, just might, mark a welcome new chapter in the life and role of the press in our society. It is clear why Lord Justice Leveson had to embark on his 15 months of work. Let us not forget the reasons, which have again been outlined eloquently in the House today. If we stay true to the reasons why the Prime Minister rightly set up that inquiry, we must recognise that it was inevitable that we, as a House of Commons, would have to reach the decision—a tough decision—to make a change, and we have reached that decision today. We have broken the logjam of generations of politicians who have gone before us and who have said much about the need for reform, but have done precious little. There is a moment, perhaps, for just a bit of quiet pride in the fact that we, as a Parliament, are able to make that break.
Many speakers have rightly expressed concern, and want to understand more, about the nature and meaning of the royal charter, but let us not forget that this document is not the constitution of the regulator. It sets out, in clear terms, what a regulator should look like according to the recognition body, which is why it includes terms such as “should” and why it is exhortatory rather than prescriptive. That has to be right. Some of my right hon. and hon. Friends have asked what is the full ambit of the regulator. My answer is simply this: it is an independent body and a voluntary body, but, for the first time, we are to have a body that can be periodically assessed in relation to objective criteria. That is what the schedules to the royal charter are all about.
Before I sat down to watch the wonderful Six Nations victory by Wales in the match against England on Saturday, I donned my anorak and spent a few hours comparing and contrasting the royal charter published by Her Majesty’s Opposition with the one published by the Government. I came up with very few differences. Most involved a word here and there, but I considered one difference to be important. It related to the power of any new regulator either to “require” or to “direct” appropriate remedial action following a breach of standards.
We have heard a great deal about the difference between the meaning of the word “require” and the meaning of the word “direct”. I must admit that before I looked at the wording carefully, I did not think that there was much of a difference. However, I think it right for us to put the position beyond peradventure and include the word “direction”, which implies an order, a mandate, a compulsion for the member of the body to right the wrong that it has done. That could lead to the printed apologies on the front page, and to the remedies that actually mean something to those who have been affected by wrongdoing. That may sound boring, but it is very important to those concerned. It is the job of the House of Commons to do the boring but important things. That is why I think it is vital for us all to consider the detail of this important document as carefully as we can.
Much has been made about the use of statute, but I think it was inevitable. There had been a hope, at one stage, that the civil procedure rules that govern the way in which civil trials are held in England and Wales could be amended to allow for the regimen of aggravated damages and costs that is now in statute. That proved not to be the case, which is why, sensibly and inevitably, it has to be in statute. As for the entrenchment clause, whether we call it underpinning or supporting matters not. The point is still well made that this charter should not be subject to the whim of the Executive, to be amended by them at their pace, in their time and in their way; it should be for this House to consider any amendment. The role of the politician in the new system of regulation should and must stop there. This system is not about politicians interfering with the life and work of journalists; it is simply an important and significant step along the road to make sure that all the work of decent professional journalists, who spend their lives investigating wrongdoing and exposing that which should not be secret, is supported. So it will be good for them, just as it will be good for those who have been and those who may still be the victims of wrongdoing.
Some years ago, my profession, the legal profession, went through a similar process, and we now have an overarching body, the Legal Services Board, which recognises independent regulation. There was a worry that that would interfere with the independence of the Bar and solicitors, but the truth is that solicitors and barristers go about their daily work without having to look over their shoulder at a recognising body. In fact, that body is enshrined in statute and has a wider remit that anything I have read about in this royal charter. For those reasons, we can confidently support the agreement that has been reached between all parties in this House and look forward to a time when the victims of wrongdoing will receive a fairer deal.
Sir Gerald Howarth (Aldershot) (Con)
May I join my hon. Friend the Member for South Swindon (Mr Buckland) in congratulating my hon. Friend the Member for Camborne and Redruth (George Eustice) on the fantastic job that he has done in articulating the concerns that many of us had, particularly on this side of the House, for which we did not get much thanks in the press? He behaved with extraordinary dignity and great tenacity.
Sir Gerald Howarth
Funnily enough, no, and I am happy to put that on the record. I also wish to congratulate Hacked Off because, whatever else one may say, it did act as a focal point, it did provide a concise briefing and it did help us along a tortuous path. I congratulate my right hon. Friend the Prime Minister on having shown serious leadership in this matter; it needed bringing to a head and he has brought it to a head. I also wish to put on the record the fact that he has been here throughout these proceedings, which is more than I have been here for. So I congratulate him on what he has done, as well as the Leader of the Opposition. He has not been able to be here the whole time because he has had other things to do, but the Prime Minister has shown his commitment to trying to resolve this matter.
It is very important that we hold fast for a moment and remember that we did not create this crisis in the first place—it was created by others. It was created by a total failure of self-regulation over decades, by a failure to implement the findings of successive inquiries and by serial criminality in the press. The only point I would make to my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) is that although these were criminal offences and they are now going through the courts, this serial criminality betrayed a corruption at the heart of our media—if not condoned, this behaviour was certainly overlooked. So the hysterical response to much of what we have been saying has been out of place. The day after 44 of us signed a letter to The Guardian—this is the only time I have knowingly signed something for The Guardian—The Daily Telegraph had half of its page 2 saying, “Tory MPs tainted by scandal in bid to end free press”. What sort of responsible press is that? I hope that The Daily Telegraph is taking note, but of course I will be denounced for this tomorrow as being “Closetly determined to end a free press.”
I wish to make three brief points. First, it is good that all three main parties, and indeed the minority parties, have agreed this outcome. It would have been bad news if there had not been agreement. We would have seen divide and rule, and acrimony, so those from all parts of the House who participated in bringing this about deserve our congratulations. It is also important to put on the record the fact that it is the historic duty of this House to remedy injustice—that is not the job of the European Court of Human Rights; it is the job of this Parliament and this House—and in seeking to bring about this change, we have sought to do that.
My second point is that my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) is absolutely right to say that we should not set too much store by what has been achieved today. A huge amount of detail still has to be worked out and it will require a lot of good will on the part of all the media and the regulators to bring that about. May I just indulge the House for a moment on a slight word of caution to those who wish to see their apologies on page 1? When I sued Private Eye for libel—sadly, my hon. and learned Friend was not my Queen’s counsel at the time—we had agreed the damages, the apology and everything else, but the late Mr Peter Carter-Ruck said that it would not agree to put the apology in a box. Private Eye had agreed to put it on the same page as the offending article had been but would not agree to a box. I insisted that I could not possibly agree without having my apology in a box. Eventually Private Eye agreed, so on the day of publication I went down to the news stand and turned to page 4 or whatever it was. Sure enough there was the apology in the terms agreed—absolutely wonderful—and it was in a box. And so was every other story on the page! So we must beware what we wish for.
My third and final point is that this approach should be seen on all sides as an opportunity. It is an opportunity for a free press to move forward and to act fearlessly but to remedy the wrongs that they have recently perpetrated. It is an opportunity to ensure that ordinary people are given a fair crack of the whip and that we do not see a repetition of the kind of dreadful character assassination and misery caused to ordinary people, who have no remedy and have no voice in this House. If we achieve that, we shall have strengthened the British press and made them an example for the rest of world, and we shall have done a great service to the citizens of these islands.
Jacob Rees-Mogg (North East Somerset) (Con)
May I join in the praise of the Prime Minister, which has become commonplace in this debate, although I do so for a different reason—not for this royal charter, but for accepting the constraints of collective responsibility? He has fought a valiant battle for the freedom of the press but, unfortunately, the Liberal Democrats do not believe in it and we therefore have the restriction on the freedom of the press that we find with this royal charter and this debate. Collective responsibility required that the Prime Minister should lead a united Government on this and I think he was right to do so, because the alternative was to have the Lib Dems with us in the Division Lobby one day and with Labour the next, and that is not a Government; it is, as I believe Palmerston put it, a mere coalition of atoms.
Why is a free press important? Why is freedom of speech important? Why is it a right that this House demands as an absolute? Since the Bill of Rights was introduced, we have been free here to say anything that we like. We can cast aspersions upon anyone we want, powerful or weak; we can make them up. The only constraints we have—not to be rude about the royal family, about judges or about ourselves—are those that the House itself has imposed. We have those freedoms because, as my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said, we recognise that the way to redress grievance is by being free to do so and having no constraint on what we say in this place. As soon as a constraint is imposed, we find that the Crown, as it used to, will use its powers to suppress a free press.
Before the Bill of Rights, what happened? MPs who said the wrong thing got sent to the Tower. The Prime Minister might think that that is an attractive option to have at his command, but freedom increased the power of the people against the Executive. We see that with newspapers: they hold us to account; they expose wrongdoing, corruption and criminality; and as they do it, they upset powerful people. Indeed, many Members of Parliament were upset over the expenses scandal—a scandal that was revealed only because a brave press was willing to use stolen information.
I am concerned about deciding to license the press—and that is what we are doing. If newspapers do not sign up to this agreement, they risk paying a high level of costs on any occasion when they are sued for libel, and that will be introduced by statute. If they do not sign up to the agreement, they risk punitive damages. Members of the House who are interested in their history will know that the law of criminal libel was used to put down the power of those who criticised Governments. Why was John Wilkes arrested? It was for a criminal libel. By increasing such powers and the viciousness of the laws against those newspapers that will not be registered and licensed by the state, we undermine our freedoms.
As for this wonderful charter, I, like the right hon. Member for Belfast North (Mr Dodds), am reluctant to criticise the power of the Crown. The introduction to the charter reads:
“NOW KNOW YE that We by Our Prerogative Royal of Our especial grace, certain knowledge and mere motion do by this Our Charter for Us, Our Heirs and Successors will, ordain and declare as follows”.
By the sovereign’s mere motion, those who regulate the press are to be chosen, appointed and selected. It is the state that is taking on this power, with some minor protections against its being changed—but, oh, how minor those changes are! We hear that there will be three lines of legislation—three lines—to prevent the charter from being changed. Three lines of legislation can be repealed by one line of subsequent legislation; there is little protection in that. The motion of one charter may be created with further charters. It might perhaps be hard to alter it, but there is always the possibility of new charters to come.
We see, therefore, the risk of increasing state power over our media, leading not immediately to direct censorship but to self-censorship, which we are already seeing with the press being reluctant to criticise the great and the good. I am reluctant to disagree with my hon. Friend the Member for Aldershot, but I think that Hacked Off is a most disreputable body that used the sad tales of a small number of victims whose bad treatment was often against the law as the cover for a campaign for celebrities who had disreputable pasts that they did not like being reported.
Richard Drax (South Dorset) (Con)
It is a pleasure to follow my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and I concur with every single word he said. I want to speak briefly from a journalist’s perspective, as I was one for 17 years, working for the local and national press and for BBC television and radio. In that time, 99% of those with whom I worked were decent, honourable people whose sole task in life was to hold the powerful, the corrupt and others to account and to stand up for the small man and woman. They did and they do. Regrettably, a tiny minority has ruined the barrel for the majority of the press, who in my view do an extremely good job and have held many people in this House to account. Some in this place have had to leave and have even gone to jail because of the press’s research and diligence. We risk treading on that power at our peril.
I rather liked the papal reference used by the hon. Member for Rhondda (Chris Bryant). This latest charter has come from a private meeting held behind closed doors and was introduced to us today. If the hon. Gentleman was correct, the information reached us only just after the debate had started. There will be no further debate and for something so serious, which is fundamental to the freedom and democracy of our country, to be swept through by a small minority of highly placed people is wrong and undemocratic.
Knee-jerk reactions lead to unintended consequences and we see that in politics again and again. This subject needs a lot more thought, a lot more diligence and a lot more attention. The press protect this country. Yes, they make mistakes—of course they do. When I joined, an editor said to me, “Richard, accuracy is key. If in doubt, leave it out.” That is a very good bit of advice. The blame lies with the independent editors. They are the chief executives, they are the commanding officers—call it what you like, it is they who have failed in many cases to command properly the men and women in their structure. That is where the blame should lie and it is they who should lose their jobs and careers.
Already we have heard from my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) that in most cases we have laws already. We have hacking and libel laws to protect people who suffer from such things. The Milly Dowler case was simply appalling—I do not defend it for one minute—but the laws are there. We do not need any more laws. When I heard about the royal charter, I was informed by my right hon. Friend the Prime Minister’s office that there would be no statute and I agreed to support it. There is now a smidgen of statute—just a little tiny bit—for which the support of two thirds of this House or the other place is required to effect change. Today, we will agree—regrettably, in my view—to push the charter forward without further consideration. If parts of the press do not sign up, what will happen? What will the Opposition, the Liberal Democrats or some of my colleagues do if not every publication signs up to the royal charter? Will they instruct them to sign up? Will they threaten them if they do not?
As we have heard, we do not know what powers the new body will have. Will it have more powers? Will we come back to this place to pass more legislation to make the press do what it does not want to do? I will not go on any longer, as other Members want to speak and we are running out of time, but I warn those on the Front Bench and everyone in this House to think very carefully before taking too many further steps down this road, as it will in the future undermine the democracy and freedom we are in this place to defend and represent.
Dr Sarah Wollaston (Totnes) (Con)
We have to read up to schedule 4 of the charter before it sets out to whom it applies. It states that a
“‘relevant publisher’ means a person…who publishes in the United Kingdom…a newspaper or magazine…or…a website containing news-related material”.
That is why it is so unrealistic, because websites can be set up anywhere in the world. My hon. Friend the Member for South Swindon (Mr Buckland) said that the code was voluntary, but if the stick being carried is sufficiently big, the code becomes coercive.
What will happen when our press become more bland and we see the people who read newspapers deserting them for the internet? Will the code apply to Twitter? There is a risk that we will abandon the printed press for the online news media, and what will happen then to our particularly vulnerable regional and local press? Who will be there to report from the courts? What will happen if our national press go into further decline and can no longer afford to fund world-class investigative journalism?
There has rightly been much talk today about the victims of the press, but we forget at our peril the victims of big pharma, of big corporations and of big state. I would far rather have our two-fingers-to-the-establishment, slightly out of control press than a nervous press, a bankrupt press or a bland press. Although we can all be commentators through the internet, we cannot all be investigative journalists. We owe a huge debt to investigative journalism and we should be very mindful of any threat to it. I hope that when he responds to the debate, the Prime Minister will feel at least that a free press deserves a free vote.
The Prime Minister
First, let me say that this is a matter on which people should feel absolutely free to express their opinions and to vote according to their conscience. We have had a good debate and a serious debate. It comes, as a number of hon. Members have said, after decades of this issue not being properly sorted out. Tragically, it has taken a crisis in the press, a very thoughtful report by a senior judge, and then a lot of political will and political co-operation, but we can be proud of the fact that the issue is finally being sorted out, with what I believe is a practical, workable, deliverable solution.
Let me say to my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who spoke eloquently against all that is being proposed, that I and everyone in the House care deeply about a free press, but a free press does not mean a press without a means of redress. It does not mean a press without a need to put things right when they get things wrong. It should not mean a press where the rich and the powerful can sue, get injunctions and take action, but where innocent victims have been left to suffer because the regulatory system does not work. A proper free press needs a proper, effective, independent regulatory system, and that is what we aim to achieve.
I thank right hon. and hon. Members for their kind remarks. I do that also on behalf of the Leader of the Opposition and the Deputy Prime Minister. This has been a genuinely cross-party effort. The royal charter has been hugely improved by the many hours of work that have been put in by all sorts of people to try to get it right. I would like particularly to thank my right hon. Friend the Secretary of State for Culture, Media and Sport, my right hon. Friend the Minister for Government Policy and the deputy leader of the Labour party, who I know have worked extremely hard to try to reach all-party agreement.
A number of hon. Members pointed out that this has been a complicated and at times interesting process. It is complicated when one is trying to achieve something when there are different opinions within all political parties in the House and a need to work across party to get this done.
I note from the debate that there was a warm welcome for the proposals from all parts of the House. I thought it particularly interesting that the current Chair of the Culture, Media and Sport Committee welcomed what is being proposed, as did a number of past Chairmen of similar Committees. So I believe the proposal starts with good will.
I make the point, which echoes remarks made by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), that this is only one part of what Leveson discussed. There is obviously the relationship between the police and the press. That needs to be put right, and new rules are being put in place. We need to get the relationship between the politicians and the press right, and there are new rules and new transparency in respect of that. There is the issue of press ethics, and I believe we have made some real progress today.
A number of hon. Members made the point about how much time there had been to study the royal charter. Obviously, in its final incarnation it has been produced only today, but the first version of a royal charter was published on 12 February, so there has been time for people to make points and to consider how it would work. A number of Members pointed to the irony of using a royal charter, even pointing out that some of the language in it is on the flowery side. Yes, it is perhaps ironic, but there is a real purpose. I believe that if we opted for legislation, even about the nature of the recognition body, we would be taking a bad step, so it is better to use the royal charter, which allows us to set up an independent body without using statute to describe its purposes.
I join the hon. Members, particularly the hon. Member for Rhondda (Chris Bryant), who urged the press to sign up. The point made by my hon. Friend the Member for South Dorset (Richard Drax) is correct: this is a voluntary system. What Leveson said we should establish is an independent self-regulatory body that the press have to set up. They then apply for recognition, if they want to, to the recognition body, and it is the recognition body that the royal charter establishes. I think there has been some misunderstanding about that point in the debate. The royal charter does not set up a self-regulator; that is for the press to do. We urge them to do it, and to do it rapidly. I know that work is already under way. It is our task, through the royal charter, to set up the recognition body. The press can decide to seek recognition from it, and then they get the advantages in terms of the exemplary costs and damages, which the House will debate a little later.
A number of Members made the good point that we must not oversell what is being set out today. It is a neat solution to the problem, but it is not a panacea, as my hon. Friend the Member for North Thanet (Sir Roger Gale) said. Those who will be responsible for making the self-regulation work will be the press. They have to set up their self-regulatory body, make sure that it has teeth, make sure that it can seek recognition, and then put in place something that we can be proud of.
I thought the quote of the debate was from the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman)—it is now closing time in the last-chance saloon was the phrase he used. The point that I would make in commenting on that is that we are not replacing a self-regulatory system with a statutory regulatory system. We are trying to replace a failed system with one that will work because, crucially, it has real independence at its heart.
A number of Members referred to the fact that the regulatory body will have an independent board. Crucially, not only is it independent, but it will be properly overseen by the recognition body, and crucially, that oversight is established in a way that does not endanger a free press or give Parliament a locus endlessly to interfere. That is important. Of course we all have strong views about the press, press freedom and press regulation, but it would not be right for Parliament to pass laws and then go on amending laws and making changes to laws about what the press should and should not do. It is important that the method that we have chosen means that not only will we not be able to do that, but the royal charter specifically says that it cannot be changed unless there is a two-thirds motion in both Houses of Parliament.
In a way, this is what the whole debate is about: Leveson gave us the architecture, the independent self-regulatory body, and the recognition body to make sure that the press was not marking its homework. My right hon. Friend the Minister for Government Policy played a key role in providing the solution that I think is best, which is using a royal charter so that we do not cross the Rubicon of writing all the rules into the law. I commend the leaders of the Labour party and the Deputy Prime Minister, the leader of the Liberal Democrats, on all the work that they have done to choose to work together to try to deliver something that is practical. It is notable that, when those talks broke down on Thursday, they chose to come up with a royal charter which was workable, rather than for us to get back into the trenches and have a fight over whether we should write these changes into law. I am pleased that everyone has taken the opportunity of doing a deal and having an outcome that will be good for our country.
It was right to commission the Leveson inquiry, it was right to listen to the outcome of the Leveson inquiry, and it was right to work out the best way of putting it in place. I know that many people thought it would be kicked into the long grass. It has not been. It has been acted on and acted on properly, and this should be done for the victims above all. I commend the motion to the House.
Question put and agreed to.
Resolved,
That this House has considered the welcome publication of the draft royal charter by the Prime Minister, Deputy Prime Minister and Leader of the Opposition, and the Prime Minister’s intention to submit the charter to the Privy Council for Her Majesty’s approval at the Privy Council’s May meeting.
Mr Speaker
We come now to the Crime and Courts Bill [Lords] (Programme) (No. 3) (Motion).
Mr Speaker
Order. The hon. Gentleman does not always choose quite the best moment. Obviously, I am bursting with anticipation to hear the observations of the hon. Gentleman through his point of order, but if he can just be a tad patient we will come to him. We could not forget him.
On the programme motion, it may be helpful to the House if I point out that manuscript amendments (d) to (i) to the programme motion have been tabled by the hon. Member for Wellingborough (Mr Bone), with the support of a number of other hon. Members. Copies of those manuscript amendments, I understand, are available in the Vote Office. I have selected amendments (d) to (i), but not Mr Bone’s tabled amendments (a) to (c). I will therefore invite the hon. Gentleman to move amendment (d) in the course of debate.
When in a moment I call the Leader of the House, it will be to move the programme motion, but I am sure that he will indulge the hon. Member for Stone (Mr Cash).
Mr Cash
On a point of order, Mr Speaker. On Thursday, the Leader of the House announced the business for this week, and he added that following the European Council meeting there would be a statement by the Prime Minister. We have not had an occasion before when the European Council has not been followed by a statement. My point of order is therefore to ask why the Leader of the House suggested there would be one, but we have not had one today.
Mr Speaker
We have not had one today. The Prime Minister has heard the point of order and he is very welcome to reply if he wishes.
The Prime Minister
Further to that point of order, Mr Speaker. We now have more European Councils than sometimes is altogether healthy, and certainly more than there have been in the past. There are almost always oral statements, but I think that on this occasion, when it was very much a take-note European Council rather than one packed with exciting things, a written ministerial statement will probably suffice.
Mr Speaker
I thank the Prime Minister for his reply. [Interruption.] An hon. Member is chuntering “Tomorrow” from a sedentary position. I do not know what tomorrow will bring. All I know is that the hon. Member for Stone has not yet exhausted the resources of civilisation, and I dare say he will return to these matters as and when he thinks fit. I thank the Prime Minister very much for staying to hear that and responding. It is a kind of pre-emptive gratification, and we are grateful for that.
Crime and Courts Bill [Lords] (Programme) ((No. 3)
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:04 - The House divided: - Ayes: 40 / Noes: 508 - Question accordingly negatived.
The Leader of the House of Commons (Mr Andrew Lansley)
I beg to move,
That the Order of 13 March 2013 (Crime and Courts Bill [Lords] (Programme) (No. 2)) be varied as follows:
1. Paragraphs 2 to 5 of the Order shall be omitted.
2. Remaining proceedings on Consideration and Third Reading shall be taken at today’s sitting.
3. Remaining proceedings on Consideration shall be taken in the order shown in the following Table.
4. Each part of the remaining proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.
TABLE
Proceedings | Time for conclusion of proceedings |
|---|---|
New Clauses and new Schedules standing in the name of the Prime Minister and relating to press conduct; remaining new Clauses and new Schedules relating to press conduct. | Three hours after commencement of proceedings on the Motion for this Order. |
New Clauses standing in the name of a Minister of the Crown and relating to Legal Aid; amendments to Clause 22, Clauses 24 to 30, Clause 32 and Schedule 16; new Clauses and new Schedules relating to protection of children or to vulnerable witnesses; remaining new Clauses and new Schedules; amendments to Clauses 20 and 21, Clauses 35 to 40; Schedules 19 and 20 and Clauses 43 to 46; remaining proceedings on Consideration. | 11 pm |
5. Proceedings on Third Reading shall (so far as not previously disposed of) be brought to a conclusion at midnight.
Last Wednesday, when moving the programme motion for the Report stage, the Minister of State, Home Department, my hon. Friend the Member for Taunton Deane (Mr Browne), said that the Government would introduce a supplementary programme motion if the cross-party talks on Leveson had concluded, either with or without agreement, to allow a debate on Leveson-related amendments on this second day of Report. This supplementary motion fulfils that undertaking. It allows for three hours, starting now, for the debate on this motion and on the Leveson-related amendments. Thereafter, the House will have until 11 pm to consider the remaining amendments to the Bill, with a final hour, minus Divisions, to midnight for Third Reading.
The House will be aware that the Leveson report was published at the end of November and it is now mid-March. The sooner that legislation relating to exemplary costs and damages is on the statute book, the sooner we can get on with implementing the new regulatory framework. If we do not legislate in the remaining weeks of this session, we risk a further delay of some months or more. We therefore needed to secure the debate today on the amendments relating to press conduct, and it is a consequent fact that the amount of time available to consider other amendments today is necessarily curtailed.
Mr Philip Hollobone (Kettering) (Con)
It is severely curtailed, because even if there were no Divisions, were the clauses on Leveson to last their full three hours, less than 40 minutes would be left for all the other clauses, dealing with some very important issues, some of which would probably never be reached.
Mr Lansley
My hon. Friend will note that it is a matter for hon. Members to determine to what extent they want to make progress on the next group of amendments, and the rate at which they make progress depends on the character of the debate. That is often true when we consider Report stages. The extent to which later groups of amendments can be considered depends on the time that Members choose to take in debating earlier groups. It may, of course, be that the time to consider amendments relating to press conduct will not occupy all the time available.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I hope that the Leader of the House will remember that I and others have suggested that he might look with colleagues at the very simple principle that when we use up some time for other business on a Report and Third Reading day, we have injury time to replace it, so that there is an automatic carry-over to give us the guaranteed time that we were expecting.
Mr Lansley
I do recall my right hon. Friend making that point previously. I simply say that it is an inflexible approach. It is our intention to assist the House in the way we structure programme motions, and that is precisely why this programme motion has been constructed around extending two hours beyond the moment of interruption. I emphasise that we are now four hours and 40 minutes away from the closure of the debate. If a normal Report stage falls on a Monday, it is not unusual for there to be two statements or an urgent question and a statement, which takes the House from 3.30 pm to about 5.30 pm, at which point we are four and a half hours away from the moment of interruption on that day, so I stress that we are not an unusual length of time away from the moment of interruption for a debate on Report.
Mr Nigel Dodds (Belfast North) (DUP)
The Leader of the House is right in what he says about the time, but surely what is unusual and exceptional about this programme motion is the importance of the matters that we are debating. The Leveson-related amendments are some of the most important that we could be debating, given the interest out there among the public and in the House. That is the difference, and we should therefore allow sufficient time for them to be debated, as well as the other remaining important matters.
Mr Lansley
The programme motion gives sufficient time for debate on the amendments relating to exemplary costs and damages. On the wider issues relating to press conduct and the Leveson report, the House has had the opportunity for three hours of debate arising from the Standing Order No. 24 application made by my right hon. Friend the Prime Minister.
Mr Peter Bone (Wellingborough) (Con)
What is exceptional today is the Standing Order No. 24 application being granted. On the rare occasions that that has occurred, the Leader of the House has always, in my recollection, changed the remaining timetable so that proper debate took place. I do not understand why that has not happened on this occasion.
Mr Lansley
The point today is that the Standing Order No. 24 application related to matters that were part of the planned debate on amendments on Report in the first three hours. In any case, if the House agrees it, the programme motion will take us two hours beyond the normal moment of interruption. I accept that as a consequence of the pressure on the time for debate today, some hon. Members may be disappointed if a particular amendment that they have sponsored or signed does not receive the amount of discussion that they had hoped.
Sir Edward Garnier (Harborough) (Con)
This has nothing whatever to do with personal disappointment. These are matters of some considerable importance; otherwise, they would not be in the Bill. The fact that we wish to debate amendments or new clauses—indeed, the amendments and new clauses have been selected—suggests that they are considered to be of some importance by people other than their individual proponents.
Another point that my right hon. Friend perhaps needs to address is that the emergency debate that we have just had surely cannot have been in his mind when the timetable motion was drafted and tabled. He did not know that Mr Speaker would grant the three-hour debate, so the three hours taken out of the debate—or, as he might say, put in the debate—cannot have been in the calculation. We need to be clear about the thinking behind the timetable motion.
Mr Lansley
I am quite clear about the thinking behind the timetable motion. We wanted to make sure that there was sufficient time to debate Leveson-related issues. Also, it will also not have escaped my hon. and learned Friend’s notice—it did not escape the notice of my hon. Friend the Member for Stone (Mr Cash), who is no longer in his place—that we did not anticipate necessarily that the debate would start at 3.30 pm, not least because I anticipated that the Prime Minister would make a statement on the European Council. Thus, when we consider the overall time available, we find that we are not very far from where we anticipated we would be. My right hon. Friends and I understand that if we cannot have a full debate on all the issues to which the later groups of amendments relates, there will no doubt be future opportunities for us to do so.
Mr Speaker has selected the amendment in the name of my hon. Friend the Member for Wellingborough (Mr Bone) and other right hon. and hon. Members. Its effect would be to restrict today’s debate to the clauses relating to press conduct and provide an additional third day for consideration on Report, with Third Reading to be scheduled for a future date. I will not trouble the House with questions of how we could fit further days into the diminishing time remaining before the Session concludes, but I would like to make it clear that, as Leader of the House, I have sought with colleagues to provide at least two days on Report for important Bills where necessary and possible. My right hon. Friend the Parliamentary Secretary to the Treasury, my predecessor as Leader of the House, and I have done that for 14 Bills in this Parliament, which stands in stark contrast to the previous Administration’s record. Indeed, today’s consideration is in addition to what was originally set out in the programme motion the House agreed on Second Reading. It is wholly exceptional to move to three days on Report; that has been given to only two Bills in this Parliament, and only three between 2001-02 and 2009-10.
I reiterate that if we crack on we will have four and a half hours available for further consideration of the Bill on Report and on Third Reading. Given the widespread interest in the issues before us, I hope that the House will agree to the programme motion quickly so that we can proceed with the substantive business.
Ms Angela Eagle (Wallasey) (Lab)
I rise to support the programme motion moved by the Leader of the House in this short debate. Clearly, the House is having to deal with an unusual situation, because the Bill has become a vehicle for implementing the Leveson proposals on press regulation. The fact that it has evolved in this way has certainly made for some unusual processes that would hardly be considered best practice for the routine passage of legislation through the House, but sometimes needs must.
We must all remember that it has been 20 months since MPs from all parties came together to set up the Leveson inquiry after the revelations about industrial-scale phone hacking and indefensible press intrusion into the lives of families such as the Dowlers and the McCanns. It is time the issue was gripped, and today’s programme motion will allow it to be resolved.
Over 100 days have passed since Lord Justice Leveson’s inquiry reported and all parties promised that we would work together to find a lasting solution to prevent such scandals from ever happening again, while also protecting press freedom. As cross-party talks took place last Wednesday, the Opposition withdrew an amendment to the programme motion that would have allowed some new clauses relating to the Leveson report to be taken ahead of some other parts of the Bill. We withdrew the amendment following an assurance from the Minister of State, Home Department, the hon. Member for Taunton Deane (Mr Browne), that changes to the order of consideration would make it impossible to talk out any attempt to deal with the Leveson amendments in the Bill. The Government were as good as their word and produced a programme motion changing the order of consideration for the clauses in the Bill.
However, on Thursday the Prime Minister decided to pull the plug on the cross-party talks and table his own amendments to the Bill, which did not comply with the Leveson principles. Consequently, a raft of new amendments was tabled seeking to implement Leveson with statutory underpinning and other safeguards of independence. Today’s debate was looking as though it would offer a straight choice between a Leveson-compliant and a non-Leveson-compliant approach. However, as we have heard today, overnight a cross-party agreement was reached that will put in place an enduring solution, protected against pressure from the press, or indeed from Ministers in the Privy Council.
As part of that agreement, an amendment will be made—I understand that it has been tabled in the other place—to the Enterprise and Regulatory Reform Bill to ensure the statutory underpinning necessary to protect the royal charter vehicle from being arbitrarily changed in the Privy Council without reference to Parliament. Essentially, therefore, the programme motion before us ensures that the Leveson new clauses can be debated and added to the Crime and Courts Bill today. We therefore agree that the new clauses on press conduct should be taken ahead of the consideration of other parts of the Bill and that this debate should last for the requisite time.
Mr Hollobone
There is no disagreement between the Leader of the House’s programme motion and the amendment that will be moved by my hon. Friend the Member for Wellingborough (Mr Bone); all agree that the clauses relating to Leveson should be debated and decided upon today. However, the hon. Lady’s support for the Government’s programme motion means that all the other clauses will probably not be reached, including new clause 12, which relates to the provision on intermediaries for very vulnerable witnesses and has been signed by 57 colleagues on the Opposition side of the House.
Ms Eagle
There are important debates that need to take place on the clauses that come after those relating to Leveson. If everybody co-operates and speaks succinctly—I am about to demonstrate this by sitting down—we ought to have time to consider them all. I note, in passing, that some of the amendments to be considered are manuscript amendments and that the House will have had only a short time to examine them before they are debated. It is undesirable in principle to have manuscript amendments, but it is inevitable in the context of the fast-moving cross-party talks on Leveson, which continued into the early hours of this morning. The House has to be flexible and its procedures have to enable agreements to be enacted if the circumstances are exceptional, as I believe they are in this case.
I know that many Members are disappointed that debate on other parts of the Bill will be curtailed or truncated by the programme motion, but I am sure that if we work together we can ensure that we can debate all the parts of the Bill. I hope that Members on both sides will accept the programme motion, which will enable us to implement the findings of the Leveson report on regulation of the press, ensuring that any future victims can have redress, while maintaining press freedom. I also hope that we will be able to debate in an appropriate manner all the other parts of the Bill before finishing those stages at midnight.
Mr Peter Bone (Wellingborough) (Con)
I beg to move amendment (d), at end of paragraph 2, leave out ‘at today’s sitting’ and insert
‘in two days (in addition to the First Day already taken)’
It is normally a great privilege to follow the hon. Member for Wallasey (Ms Eagle), but this evening the opposite is the case. I am afraid that what has happened today is part of the deal that has been done to reach all-party agreement. The deal was: “Okay, if we agree to this, we won’t object to the fact that these very important amendments and new clauses won’t be discussed.” It is clear that there will now be a maximum of only 40 minutes in which to discuss some really serious issues. I fail to understand how the Leader of the House or the shadow Leader can say that there will be other methods and time to discuss them.
I have moved a manuscript amendment to the programme motion—the first time I have done so—because of the unusual circumstances. In the short time since it was prepared and we knew what was happening today, 15 right hon. and hon. Members from both sides of the House have signed it, including two former Home Secretaries and the Chair of the Home Affairs Committee.
When we were in opposition, we always used to criticise the then Government for curtailing debate on legislation, but I must say that this is the most outrageous example I have ever seen. These are really serious issues affecting extradition and vulnerable people, and to say that, effectively, they will not be discussed because of a clever way of guillotining their consideration is, to my mind, completely unacceptable.
Over 20 amendments have been selected, never mind all those that were tabled but not selected, and very many Back-Bench Members have signed them. It cannot be right to have tabled a programme motion last Thursday at 5.15 pm, after a huge row at business questions, saying that there would supposedly be plenty of time to discuss the Bill—although people had queries about that—without any knowledge that a Standing Order No. 24 application was going to be tabled and granted. I absolutely believe the Leader of the House when he says that when the Government tabled the new programme motion very late on Thursday they did not know—indeed, they could not have known—that there would be a Standing Order No. 24 application and that three hours of today’s debate would be lost.
If the Leader of the House thought that that amount of time should be available, we are going to be three hours short of it today. It would be possible, even now—I know that it is not going to happen because I have been here and seen this too often—for him to get up and say that this is a perfectly reasonable amendment to the programme motion and accept it. All the Leveson clauses would still be debated exactly as was proposed in the original programme motion; all that would happen is that the important amendments that we have lost would be debated on another day. If the Leader of the House is saying that so much legislation is rushing through this House that we have no time to find on any other days, that is hard to believe since the House of Lords has been given an extra week’s recess because we are not progressing enough business.
In May 2009, when we were in opposition, the Prime Minister-to-be made a speech called “Fixing Broken Politics”—I would recommend it to every right hon. and hon. Member—in which he made it clear that the one thing he was not going to do when he was in power was restrict debate; he was going to have open, transparent debate and allow enough time to scrutinise really important issues.
Mr David Winnick (Walsall North) (Lab)
Did the hon. Gentleman really believe what the then Leader of the Opposition, now Prime Minister, said? Did not those of us on the Government Benches during those years say that the programme motions that were being tabled and passed would almost certainly happen in the same way if the Conservatives won the election? I am sure that the hon. Gentleman is not so naive.
Mr Bone
I am very naive, because that is exactly what I believed. At that time, the hon. Gentleman would have gone through the same experience of the expenses scandal, when there was a real movement in the country for this place to change so that proper scrutiny would take place in this mother of Parliaments.
Previously, any scrutiny occurred down the corridor; we never got the chance to reach important clauses and amendments in Bills. We complained about that week in, week out. Yet here we are tonight having lost any debate whatsoever on really important clauses. Even when the situation was at its worst, under the Blair regime, I cannot remember anything being so dramatically curtailed. Why on earth could not the Leader of the House simply have said that we were going to have another day because of the Standing Order No. 24 debate? We could have extended tonight’s timetable by another three hours—that would have been sufficient—but given that that has not happened, the only way that we could, at the very last minute, come up with an acceptable, in-order amendment, was to say, “Deal with Leveson today and finish that at the time the Government suggested”, which will now be 10.44 pm, “and then move on to these important issues another day.” It is condescending to say that a few Members will be upset. It is not about a few Members being upset; these are really important issues that we should be debating as a House.
Sir Richard Shepherd (Aldridge-Brownhills) (Con)
What my hon. Friend says is true. He did not mention, but could easily have done so, that glorious sunlit day in Birmingham—perhaps he attended the party conference that year—when we were exhilarated to hear the then shadow Leader of the House give the greatest pleasure to us all when he announced that we would no longer automatically guillotine. That is the substance of the matter that has animated so many of us on the Government Back Benches. The deliberate intention not to debate things—to manipulate the order of play, so to speak, on the Floor of the House—deceives the public out there and corrupts the purpose of our being here.
Mr Bone
My hon. Friend puts it far better than I do. Of course, I did rejoice at that. I went into the new coalition Government with a real feeling that we were going to be different—that things would change. Tonight we are taking a huge step backwards. As I said, I cannot recall any occasion on which an SO24 application has been granted and we therefore lose X amount of business that is not then rearranged.
Some cynical people—I am probably one of them—would say that this has suited the business managers enormously, because an amendment had been tabled that they did not want to debate. If I am wrong about that, it would be very simple for the Leader of the House to accept my amendment and we will see how well the Government respond to it.
The other problem is that this debate on the programme motion eats into the time that is allowed for debate on the substantive issues. That is a trick the previous Government introduced. We said it was wrong, but it is exactly what has happened tonight. The previous Leader of the House promised that we would not automatically programme business. This is the worst abuse that I have seen since becoming a Member of this House. I urge the Leader of the House, at this late stage, to show that he is a democratic champion of this House, to stick up for Back Benchers, not for the Executive, and to accept my amendment.
Chris Bryant (Rhondda) (Lab)
It is a great delight to follow the hon. Member for Wellingborough (Mr Bone), not least because I want to take him up on something that he said the other day and has said again today. He uses the phrase, “the mother of Parliaments”, as though this Parliament is the mother of Parliaments. That is completely and utterly incorrect. John Bright referred to England as being the mother of Parliaments, and his point was to criticise England because it had not yet managed to bring the full franchise to all working men; he was not quite so enlightened as to include women at that time. I know that the hon. Gentleman knows this to be the case because he told me so in the gym the other day, so I hope he will stop misleading the House. [Interruption.] It is not inadvertent; it is deliberate, and I know it is, but I say it in a kindly way.
This has been a very odd day. I have scoured the history books and I cannot find an example of Standing Order No. 24 being used by the Prime Minister to hold himself to account. It was a delight to see him do so, but slightly odd.
The Leader of the House said that he would always, or nearly always, try to provide two days on Report—although we have not ended up with that—and boasted about the fact that there have been 14 such occasions so far. I agree that, broadly speaking, that is a good principle. It may be important to have more than one day’s debate on a long and contentious Bill, particularly a Bill such as this, where the Government are rewriting large chunks of it, or on a Christmas tree Bill that has baubles, tinsel and fairies on top. However, if there are statements or other business, that trammels up the debate on Report. All too often, Whips will try to make sure that certain matters are not reached.
I have some sympathy with what the hon. Member for Wellingborough is saying, but my complaint is that it is a bit rich for the Government to complain, as they have been doing in the media and in the House today, that Members are trying to hijack other Bills. Perhaps the Leader of the House should timetable in the hijacking of Bills between now and the general election, because we have every intention of hijacking as many as possible in order to make sure that we get better legislation. That is what the whole process is about. If we can persuade the Liberal Democrats, as well as the minor parties, to join us on more occasions than thus far, we hope that we will manage to get better legislation.
Part of the problem is that last week one programme motion was tabled within 10 minutes of the close of play. Such practice makes it impossible for ordinary hon. Members to know what the next day will hold and when we will discuss individual Bills. If the whole idea of programme motions is that they are for the convenience of the House, it is for the multiple inconvenience of the House if they are tabled at the very last minute, especially when, as I understand it, the Government did not even understand last week that such a motion is amendable or that there is no way that the Opposition or any other Member can seek to amend it until it has been tabled. That happened at the very last minute last Tuesday night and last Thursday night, so Mr Speaker was left with a very difficult decision on whether it was right to allow the House to proceed on the basis of manuscript amendments such as those that have been tabled by the hon. Member for Wellingborough or other manuscript amendments that have even been tabled by the Government. That is a shabby way of doing business. It brings this House into disrepute when people cannot make proper arrangements.
Last Thursday the Government were not even aware that, if they wanted to discuss certain things relating to Leveson, they had to table a motion under Standing Order No. 75. That motion was eventually tabled five minutes before the close of play on Thursday, but it has not been moved. We have all ended up looking like we are living in cloud cuckoo land.
The Leader of the House also said last week that he would table amendments when the discussions had concluded. I asked him what he meant by “concluded” and he rolled his eyes and pulled the slightly grumpy, Deputy Dawg face that he is pulling now. The papal conclave ended and amendments were tabled a long time afterwards. Incidentally, the one good thing about this papal conclave is that at least a woman—my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the deputy leader of the Labour party—was allowed to be on it.
A lot of important issues need to be considered with regard to extradition. The hon. Member for Wellingborough is right that under the current programme motion we are unlikely to reach the amendment tabled in his name and the names of, I think, 95 other Members, most but not all of whom are Conservative.
Sir Gerald Howarth (Aldershot) (Con)
I agree with the hon. Gentleman that today has been an odd day, but it has been extremely beneficial to discuss all the issues relating to Leveson. However, the issues of extradition and the European arrest warrant are of huge concern to the people of this country. I say to my right hon. Friend the Leader of the House, through this intervention, that, given the many cases when the United States in particular has sought the extradition of people from this country and raised huge concern among the British people, debate on the issue should not be truncated. The House should be given more time to debate it.
Chris Bryant
Indeed. I commend those who brought issues of extradition to the House’s attention on the basis of Back-Bench motions. However, given that it is now exactly a year since this House unanimously agreed a motion on the visas of those involved in the death of Sergei Magnitsky, we now know that a motion of the House means absolutely nothing unless it is part of the legislative process.
The hon. Gentleman is right. I would like to be able to debate extradition and the European arrest warrant and we have tabled an amendment in the names of my right hon. Friend the Leader of the Opposition and others. Indeed, many people will be looking to this House to have a proper debate on the provisions that will end the right to appeal for those applying for a visitor visa. The hon. Gentleman and I may take a different view on that, but the Government have ordered the business in this way when they could easily have said last Thursday that they would not debate the Bill today, but would do so tomorrow, Wednesday or Thursday. That would have made it perfectly possible to have a debate on Leveson and then on something else, which would have been a much better way of proceeding.
I am afraid that there is not much point in supporting the amendments tabled by the hon. Member for Wellingborough. Frankly, I hope he will withdraw them, because a vote would waste another 16 minutes when we could be getting on with business. I say to the Leader of the House that it is a shame that we are proceeding in this way.
Mr Philip Hollobone (Kettering) (Con)
I do not think that defending the right of this Chamber to scrutinise the Executive is a waste of time and I hope that my hon. Friend the Member for Wellingborough (Mr Bone) will press his amendment to a vote. To be frank, this is an abuse by the Government of their privilege in setting the timetable of this House and it is a huge shame that Her Majesty’s loyal Opposition are joining in that exercise.
There is no disagreement at all that we should debate the Leveson clauses until 10.21 pm. Whether the amendment or the Government’s programme motion is passed, that will be the effect. We have already had a very interesting three-hour debate and by the time the vote on the amendment to the programme motion is finished we will probably have time for another two-hour debate on the relevant clauses. There is no disagreement about that.
The disagreement lies with all the other clauses, schedules and amendments that will be lost as a result of the Government’s programme motion. For example, new clause 12 has been signed by 57 Members, mainly Opposition Members, and relates to the provision of intermediaries for very vulnerable witnesses. New clause 14 has been signed by 110 Members, mainly Government Members and also relates to very vulnerable witnesses. New clause 13 will probably never be reached, but it relates to exceptions to automatic deportation and has 104 signatories from both sides of the House. Those are important new clauses, which we will either not debate at all or to which we will give very little and totally inadequate attention. This is not the way that this great House of Commons ought to behave. Of course, it would not behave in this way if we had the business of the House committee that Her Majesty’s Government promised they would deliver by 2013.
Some Members present may think that the effect of the amendments tabled by my hon. Friend the Member for Wellingborough would be to extend tonight’s sitting, but, unusually for my hon. Friend, that is not the case. If the manuscript amendments are passed, tonight’s main debate would finish at 10.21 pm. If the Government’s programme motion is passed, we will be here until midnight. Members should not turn around and blame my hon. Friend or me when they are moaning about being here at midnight. What the two of us want to see is another day given for discussion of the Bill’s important extra clauses. What is unreasonable about that? All we want is for this Chamber to scrutinise those clauses and come to a decision on them. It will not be able to do that in the 40 minutes that the Government feel are adequate.
It is a great shame that the Leader of the House did not go into any detail about possible alternative days to discuss these issues. We finish our main business on a Tuesday at 7 o’clock. We have had exceptional circumstances today and everybody understands that. I think that most Members would be supportive, given the circumstances, of staying longer tomorrow night. Were the Government to extend tomorrow’s sitting to 10 o’clock, we could probably deal with the extra new clauses and amendments, but the Leader of the House has not made any such suggestion. Next Tuesday, we have a Back-Bench afternoon. The Government could have replaced that with the remaining stages of the Crime and Courts Bill. We could therefore wrap it all up before the Easter recess in a perfectly satisfactory way, with proper scrutiny of all the new clauses and amendments.
However, that kind of imaginative thinking does not seem to come from the Government, which is a great shame. The Prime Minister, the Leader of the Opposition and the Deputy Prime Minister have been innovative today in knocking their heads together and agreeing on this Chamber’s response to the Leveson report. Most Members would agree that that is a good thing. But now, we are being let down by Her Majesty’s Government, who refuse to extend that innovative thinking into ensuring that this House scrutinises legislation properly. That is a great shame.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
I appreciate everything that has been said by the hon. Member for Kettering (Mr Hollobone) and I support the amendment tabled by the hon. Member for Wellingborough (Mr Bone).
When the Leader of the House made an announcement last week about rescheduling the business for today, naively, given my 21 years’ experience, I presumed that a good part of the crime and courts work would be taken elsewhere. For the past few months, we have been treading water. There have been many Opposition days and Back-Bench business days flying around. That is not a bad thing and I am not running those things down, but there has been plenty of slack in the system and there remains slack in the system. The hon. Member for Kettering has identified two opportunities in the past couple of minutes.
What are we dealing with at the moment? An Executive who are treating this place with contempt. Earlier, we were all back-slapping and grinning, and saying that we were doing something about Leveson and getting stuck into doing something for the public. The public should know that conscientious parliamentarians, such as those who have spoken today, are being denied the opportunity to scrutinise important legislation, such as provisions on the all-important European arrest warrant, exceptions to automatic deportation and provisions to deal with vulnerable witnesses. As a lawyer, I find it abhorrent that we are not able to discuss provisions that deal with vulnerable witnesses.
Mr Winnick
The Leader of the House said that there would be other opportunities to discuss those issues. Would it not be useful, arising from the strong representations and speeches that have been made from both sides of the House on the right of Parliament to debate such issues, if the Leader of the House indicated when we will be able to discuss such issues if he is not willing to agree to the amendment?
Mr Llwyd
I am grateful to the hon. Gentleman for making that point, with which I agree fully.
The Executive are overriding completely the will of this place. The matters that we are not able to discuss are not minor ones; they are vital matters that concern people out there. They are not matters for the twittering classes of Westminster alone; they are vital matters that affect ordinary citizens up and down the UK. For example, we are dealing with automatic deportation and ensuring convention rights. We cannot be expected to run through such vital issues in a matter of minutes. I find the whole thing utterly unacceptable.
I was in Parliament in 1992 when the then Conservative Government thought better of such practices and provided time for debates to take place. Very rarely were debates truncated in this way. It is utterly unacceptable and I am sure that people outside this place will see that. We took a step forward this afternoon, but we are taking a major step back this evening.
Sir Edward Garnier (Harborough) (Con)
It is always great to be a legend in one’s own—whatever the saying is.
The Government’s response to the amendment is unwise and intolerable.
Mr Winnick
On a point of order, Mr Deputy Speaker. Would it not be appropriate for the Leader of the House to show respect for the views that have been expressed in the past 15 minutes and at least come to the Dispatch Box and make some comments? He is just sitting there grinning and showing indifference. What sort of respect does that show for the views of the House of Commons?
Mr Deputy Speaker
Clearly, that is not a matter for the Chair.
Question put, That the amendment be made.
Crime and Courts Bill [Lords]
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
22:21 - The House having divided: - Ayes: 530 / Noes: 13 - Question accordingly agreed to.
23:01 - The House divided: - Ayes: 215 / Noes: 307 - Question accordingly negatived.
The Secretary of State for Culture, Media and Sport (Maria Miller)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss the following:
Government new clause 22—Relevant considerations.
Government new clause 23—Amount of exemplary damages.
Government new clause 24—Multiple claimants.
Government new clause 25—Multiple defendants.
Government new clause 26—Awards of aggravated damages.
Government new clause 27A—Awards of costs.
Government new clause 29—Meaning of “relevant publisher”.
Government new clause 30—Other interpretative provisions.
Government new schedule 5—‘Exclusions from definition of “relevant publisher”.
Government amendments 121A and 122.
Maria Miller
The Leveson inquiry shone a spotlight on the worst excesses of the press. As a result of the revelations involving the hacking of Milly Dowler’s phone and all that went before it, we have seen the closure of a national newspaper and a range of ongoing criminal investigations.
Lord Justice Leveson heard evidence for more than a year. I should like to pause for a second to pay tribute—[Interruption.]
Mr Deputy Speaker
Order. Please will Members leaving the Chamber do so quietly? I am finding it very difficult to hear what the Minister is saying.
Maria Miller
Thank you, Mr Deputy Speaker.
I should like to pay tribute to those who gave evidence that involved them revisiting those harrowing experiences. I hope it will be clear today that that ordeal has not been in vain.
Today marks a turning point. We can move on from simply talking about Lord Justice Leveson’s report to starting to act on it, with a new package that is agreed by all three party leaders. The package includes a new royal charter, as announced by the Prime Minister earlier; a new costs and damages package that seeks to maximise incentives for relevant publishers to be part of the new press self-regulator; and one short clause reinforcing the point that politicians cannot tamper with the new press royal charter, which is the subject of debate in the other place.
Before I discuss the Bill, I should like to make clear what we are not talking about. The Prime Minister said to the House on the day the report was published that he had serious misgivings about statutory press regulation. He—I agreed with him—was determined to find a better way of establishing the recognition body that would oversee the tough self-regulatory body that Lord Justice Leveson envisaged. That is what our royal charter does.
Our proposals will provide the toughest system of regulation that this country has ever seen. The system will protect the public and ensure that the freedom of the press is not undermined. Alongside our proposals, we will include a three-line clause that reinforces the language within the charter and says that it cannot be changed without a two-thirds majority in both Houses. The clause ensures that, for generations to come, Ministers cannot interfere with the new system without explicit and extensive support from both Houses.
We have achieved all of that without needing to set out a system of press regulation in legislation—hence, our proposals are not statutory underpinning. The three-line clause applies to all royal charters of a particular nature from this point onwards. It is simply a safeguard.
We are in the House to debate amendments that will put in place a new, tough set of incentives for publishers. There are two such incentives—the first relates to the award of exemplary damages, and the second relates to the award of costs in litigation involving relevant publishers. The package forms a crucial part of the new regulatory regime, providing strong new incentives to relevant press publishers to join the press regulator. When they choose to join the press regulator, they will receive a series of benefits on costs and damages. However, those that choose not to join the regulator will be exposed to the tough new regime, which includes payment, in most cases, of the costs of people who bring claims in the courts against publishers on civil media laws, regardless of whether those people win or lose; and exposure to a new exemplary damages regime—we are introducing a new punitive damages regime for breaches of those media laws for those who do not sign up to the regulator.
Victims of press mistreatment will, for the first time, have access to a new toughened complaints mechanism with prominent apologies, tough £1 million fines, and access to a new arbitration system.
Paul Flynn (Newport West) (Lab)
The Secretary of State gives us the welcome news that this is the toughest regulatory system in the UK, but will the system impose on newspapers the duty of political balance that is imposed by the royal charter on the BBC and ITV?
Maria Miller
The hon. Gentleman knows that we are trying exactly to protect freedom of speech, so that newspapers have the ability to comment on proceedings in this place and more widely. We are protecting that important ability and maintaining and promoting freedom of speech.
Jacob Rees-Mogg (North East Somerset) (Con)
I want to clarify schedule 4 of the royal charter, which states that a “relevant publisher” is
“a newspaper or magazine containing news-related material”.
Does that include, for example, newspapers published by local Conservative associations? Might we therefore have to register?
Maria Miller
My hon. Friend is slightly jumping the gun—we will come to that in more detail later—but I can give him a sneak preview of the answer, which is no. Clear tests included in new clause 29 make it clear that such publications will not be covered.
Sir Bob Russell (Colchester) (LD)
Will the right hon. Lady confirm that the legislation has been driven by the behaviour of certain national newspapers, and that our local newspapers and provincial press have not been responsible, but will have to pay for the sins of Fleet street?
Maria Miller
I understand the sentiment behind my hon. Friend’s question. I can reassure him that we have been working directly with representatives of the local press to ensure that the new system does not, as he suggests, burden them unnecessarily. Perhaps the right hon. and learned Member for Camberwell and Peckham (Ms Harman) will remark on that further; I will do so in my comments later.
Exemplary damages will be awarded only in the most serious cases, in line with both the Leveson report and the report of the 1997 Law Commission. The test for the award will be: where the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights; where conduct is such that the court should punish the defendant for it; and where other remedies would not be adequate to punish that conduct. The supplementary new clauses ensure that the new exemplary damages system works in practice.
New clause 22 sets out factors that the court must take into account in deciding whether an award of exemplary damages is appropriate, and whether membership of an improved regulator was available to the defendant at the time of the events giving rise to the claims. If so, what reasons the defendant had for not being a member are factors that can be considered. The court must also have regard, so far as it is relevant, to whether the defendant has internal compliance procedures of a satisfactory nature in place and how they are adhered to.
Sir Edward Garnier (Harborough) (Con)
I wonder whether my right hon. Friend could provide me with some clarification. She says that the exemplary damages regime will apply as per the new clauses and so on. One of the exclusions from the definition of a “relevant publisher”, which she will find in new schedule 5, is:
“A person who publishes a title that relates to a particular pastime, hobby, trade, business, industry or profession”.
Maybe the “hobby” relates to the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). What is the position of an irrelevant publisher, if I can describe him as that, who publishes a magazine or some other publication about a pastime, hobby or trade, but who none the less behaves within the terms of Rookes v. Barnard? Would the court still be able to award exemplary damages in that circumstance?
Maria Miller
My hon. and learned Friend raises an issue in which he is well versed. If I do not provide a complete answer, then I will get back to him with all the details. Clearly, if somebody is not a relevant publisher then they are not drawn into the self-regulatory scheme. They would not be subject to exemplary damages or be eligible for the scheme. Therefore, they would not be caught within this remit. We have so drawn the definition of “relevant publishers” to ensure that the scheme does not catch people we do not need to catch, and that is why we have been careful to set out the three tests in new clause 29—to ensure that we are clear about who is covered. Some individual organisations might well fall close to the line, but then it would be for the courts to decide.
New clause 23 sets out matters to which the court must have regard in deciding the amount of exemplary damages appropriate, and the key principles governing the court’s consideration are that the amount should be no more
“than the minimum needed to punish the defendant for the conduct complained of”
and that it should be “proportionate”. New clauses 24 and 25 ensure that those provisions will operate effectively in cases involving more than one claimant or defendant.
For completeness, I shall also mention new clause 26 and amendment 121A. New clause 26 implements recommendation 71 in Lord Justice Leveson’s report and confirms that, in cases under the new system, aggravated damages should be awarded only to compensate for mental distress and should have no punitive element. Amendment 121A provides that the provisions on exemplary damages come into force one year after the date on which the body is established by royal charter. That will be a powerful incentive to the press to establish the new regulator on a timely basis. For all their rarity, the availability of exemplary damages should send a powerful signal to publishers.
I turn to the provisions relating to costs in new clause 27A. The proposals are designed to give further real and powerful incentives and give effect to Lord Justice Leveson’s recommendation that the award of costs should be another tool to encourage publishers to join the regulator. The new clause would provide a clear presumption that where a claimant took a publisher inside the regulator to court, even if the claimant was successful, the normal rule that their costs would be met by a losing publisher would not apply. In other words, a defendant publisher that had joined the regulator should pay a claimant’s costs only in limited circumstances—if the issue could have been resolved at arbitration, had the defendant agreed to its being referred, or if it was just and equitable for the defendant to pay the claimant’s costs.
Guy Opperman (Hexham) (Con)
The fundamental problem is not necessarily the costs paid at the end of the case, but the costs of a litigant’s bringing an action against a publisher. I and my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) have represented many individuals who would have struggled to bring such actions without protections. Will the Secretary of State advise the House of what protections are in place, and may I highly recommend the protective costs order regime that provides protection to an impoverished, but justified, litigant as against a very wealthy publisher?
Maria Miller
My hon. Friend pre-empts something that I will cover in more detail later. I will not only deal with the cost regime, but explain that to comply with Leveson the new self-regulatory regime will include free arbitration, so giving those individuals the access to justice that he rightly says they should have.
New clause 27A establishes a second presumption—that a relevant publisher that chooses to stay outside the regulator would generally have costs awarded against it in proceedings for media tort, whether or not the claim is successful. In other words, a defendant publisher that does not join the regulator should always pay the claimant’s costs, unless the issue could not have been resolved at arbitration if the publisher had been a member of a regulator, or unless it were just and equitable for the defendant publisher not to pay those costs. These provisions deal with defendants and the costs they should or should not pay to claimants. The issue of claimants and the costs they might have to pay to defendants is also important and is addressed in subsection (5).
Lord Justice Leveson endorsed Lord Justice Jackson’s recommendation that qualified one-way cost shifting should be introduced for defamation and privacy cases. QOCS is a form of cost protection. The Government accepted that recommendation, and we have asked the Civil Justice Council, chaired by the Master of the Rolls, to make recommendations by the end of this month on appropriate cost protection measures to be introduced for defamation and privacy cases. The Government then expect to introduce a cost protection regime through the civil procedure rules.
Let us be clear: the new provisions on the awarding of costs, coupled with the provisions I have set out on exemplary damages, provide a powerful incentive to join the regulator and for disputes to be resolved through arbitration that meets the standards set out in the royal charter. Those defined as a “relevant publisher” for the purposes of the new legislation will, if they choose to sit outside the regulator, be exposed to the full force of the new exemplary damages and costs provisions. We want to ensure that the new provisions act as a powerful incentive—as I am sure you can hear me say, Mr Deputy Speaker—but we do not want to draw in too broad a range of publishers.
Mark Reckless (Rochester and Strood) (Con)
Is it not the case that the incentives are so powerful—with the exemplary damages and the requirement to pay the other side’s costs, even if their claim may be very poor —that, in essence, we are almost forcing the press into joining the new regulator and being subject to the regulation framework determined by Ministers through the Privy Council?
Maria Miller
I gently remind my hon. Friend that the criteria used in reaching judgments will not be determined by Ministers, as he will know from the earlier debate. The reason we are establishing a royal charter is exactly so that all this is put very much at arm’s length from Ministers. I suggest to him that every publisher has a choice it can weigh up. Publishers can come inside the self-regulatory process and get the support of the regime for exemplary damages and costs, or they can choose to stay outside. That was absolutely the essence of Lord Justice Leveson’s recommendation not to have compulsion, and that is why the Prime Minister and I were so against taking a statutory approach—because we did not feel the press would want to take part in such a regime, which would be a fundamental weakness in the system.
Mark Reckless
But is it not the case that Ministers, albeit with senior members of the Opposition, have agreed the royal charter on Privy Council terms—in some ways that is worse than statutory regulation, because MPs have had no opportunity to debate it on behalf of our constituents—and that in many cases the only choice the media face will be whether to join or be bankrupted?
Maria Miller
I would say to my hon. Friend that when I have heard people talk about the approach they want the Government to take, they say that they want regulation of the press to be very much at arm’s length from politicians. What we are talking about is a self-regulatory body for the press, set up by the press. The royal charter is a verification panel that will ensure that the press is doing what it should do. It will not be under the eyes of Ministers; it will be independent. However, I urge him to look at the detail of the charter so that he does not take just my word for it, but sees it written down in black and white.
Maria Miller
There are lots of people who want to take part in the debate on these amendments, so if my hon. Friend lets me make a little progress, perhaps he can intervene on me a little later.
In new clause 29 we set out a definition of “relevant publisher” that captures national newspapers and their online editions, local and regional newspapers and their online editions, and online-only edited press-like content providers, as well as gossip and lifestyle magazines. Exemplary damages and costs are designed to catch larger news publishers—those at the centre of the circumstances giving rise to Leveson. As highlighted by my hon. Friend the Member for Colchester (Sir Bob Russell), who is no longer in his place, many of those are not necessarily the smaller publications.
Jacob Rees-Mogg
We in this corner of the Chamber have been discussing definitions and wondering which magazines would count as hobby magazines. How, for example, would my right hon. Friend define Hello! magazine? It is surely not a newspaper, given that it indulges in the publication of gossip and celebrity pictures. Would it be covered, or would it be exempt, and who will decide where the line is to be drawn?
Maria Miller
My hon. Friend tempts me to repeat what I have just said, but perhaps he should read Hansard or the Bill instead.
New clause 29 describes in great detail who will be caught by the definition of “relevant publisher”. The publisher would have to meet the three tests of whether the publication is publishing news-related material in the course of a business, whether their material is written by a range of authors—this would exclude a one-man band or a single blogger—and whether that material is subject to editorial control. This is specifically designed to protect small-scale bloggers. Lone bloggers clearly do not meet those criteria. I hope that that clarifies that point.
Mr Richard Bacon (South Norfolk) (Con)
One could easily envisage a railway enthusiasts’ magazine which had a range of authors whose material was subject to editorial control but which many people would nevertheless consider to be a hobby magazine. It would fall outside the regime because it was aimed solely at enthusiasts. What would happen, however, if such a magazine were to get hold of some information, perhaps confidential information, about High Speed 2? Would it then be caught by the regime? Does my right hon. Friend not see the path that she is going down?
Maria Miller
We have clearly set out the direction that we are going in, and it is there in the information for my hon. Friend to read. Ultimately, the court will decide whether any particular issues fall near the line. If a publication is concerned about whether it would be caught by the new regime, it can of course seek legal advice, but we have done a great deal to make this clear to individual publications. I am sorry—I did not make it clear to my hon. Friend the Member for North East Somerset whether Hello! magazine would be caught by the provisions. Yes, it will be. People tell me that it is a gossip magazine. I am not a regular purchaser of it.
Mark Durkan (Foyle) (SDLP)
The Minister mentioned publications that would not fall into the category of “relevant publisher”. If a publication posing as a constituency newsletter—perhaps with a title like Target Marginal South—were to make a serious allegation against someone in another party, what would happen if a relevant publisher were to pick up the story and publish it? Where would they stand if they published a controversial story that had originally been published by a non-relevant publisher?
Maria Miller
I am sure that the hon. Gentleman knows that such instances already arise and that they are covered by the normal laws of libel. That would continue to be the case because those organisations would not be deemed to be relevant publishers. The normal laws would therefore be in play. Hopefully, that provides him with some clarification.
In conclusion, getting the balance of incentives right is clearly important, as it was really important in the Leveson report. We are, I believe, striking a balance through these amendments that will present a tough new system of press regulation, but equally one that does not compromise the freedom of the press or investigative journalism. We are all clear that investigative journalism and freedom of the press should be given paramount importance in the process. Throughout cross-party talks, we agreed a set of proposals that will create a tough new system of self-regulation.
I believe the package put in front of us all today provides real incentives with real effect. It embodies a crucial part of Lord Justice Leveson’s proposals and part of the tough new regime for press regulation. These amendments have been put forward with cross-party support, so I commend them to the House.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
I rise to support the Government new clauses in the group and the manuscript new clauses standing in the name of the Prime Minister, the Secretary of State, the Deputy Prime Minister and the Leader of the Opposition. The manuscript new clauses arise out of the cross-party talks, into which I thank the Secretary of State for inviting us. That explains why hon. Members have not, I am afraid, had much time to look at them. We all want to be sure that hon. Members have the opportunity to scrutinise provisions in advance, but because we worked late into the night in attempting to agree them, they have been brought before the House with inadequate notice. I offer my apologies for that.
I hope to add to the points made by the Secretary of State, with which I greatly agree. Also, because hon. Members have not had much chance to look at the manuscript amendments and consider what they mean, I shall try to explain my understanding of how they sit with the new framework set out in the royal charter.
As the Secretary of State has said, the choice Leveson made was not to impose direct regulation on newspapers as a complaints system, but to invite them instead to set up their own regulation system and to encourage subscribers to it, not only because it is a good idea as the framework is fair and reasonable, but because incentives and disincentives have been provided. That, of course, leaves the choice to them—the point of incentives and disincentives is that they incentivise and disincentivise—but encourages them to go into the new regime.
It is also crucial—this is a major change—that a new arbitration system is being set up. Over the years, people have wrung their hands about how inaccessible the courts are to people who have been defamed, while newspapers have wrung their hands about being tied up for ages with the enormous costs that can arise if some oligarch takes a newspaper to court. Importantly, therefore, arising from the Leveson report is not just a new complaints system but a new arbitration system. Media torts, defamation and privacy claims that would otherwise have gone to court will instead go into the arbitration system. The manuscript new clauses on cost will incentivise not only newspapers but individual complainants to go into an arbitration system and not straight to court. There is an incentive for a complainant who wants to bring an action against a newspaper that is a member of a regulatory body to agree to arbitration, which will be available to members of the body and which will be run inexpensively. A complainant who does not want to go to arbitration, who says “I will take my chances in court” and who then wins the case will not win the costs, and costs may be awarded against that complainant. Arbitration will involve no cost to complainants, and they will benefit from a top-rate, legally kosher procedure without having to go to court.
Guy Opperman
I am delighted to observe that the Labour party studied the legislation in such detail before presenting it.
I should probably declare that I am a qualified mediator and arbitrator. Under the current system, people involved in arbitration can appeal against the process if they are not happy with it, and the litigation can begin anew. Would that arrangement continue, and how would an individual litigant defamed by a newspaper or any other publication bring an action, given that—contrary to what the right hon. and learned Lady has just said—the costs of arbitration are very high?
Ms Harman
The royal charter requires the regulator to provide for an inexpensively run arbitration service which will impose no costs on complainants. As the hon. Gentleman will know, things can happen further along the chain after arbitration has been agreed to, but the essence of arbitration is that both sides embark on it agreeing that the arbitrator will settle the issue.
I think that this will be a great step forward, because it will deal with the problem of inaccessibility. Most people who are defamed, or whose privacy has been invaded in what is termed a media tort, would never dream of being able to go to court, although many lawyers are prepared to act on the basis of conditional fee arrangements. A free-to-use arbitration service is therefore an important component of the Leveson package contained in the royal charter. It is good news for claimants, but it also means that newspapers will be well and truly incentivised not to remain outside the regulatory body. If they are not in the regulatory body and arbitration is therefore not available to those who may complain about them, it is possible that when the case goes to court, costs will be awarded against them even if they win.
Ms Harman
That is how we understand that the system will work. May I invite the hon. and learned Member for Harborough (Sir Edward Garnier) to answer his question at the same time as asking it? I suspect that he thinks he knows the answer better than I do. He does not, but he probably thinks he does.
Sir Edward Garnier
What a charming way of allowing an intervention! I should have thought that a fellow member of the former Solicitor-Generals’ club would be a little more polite to me. I shall have to take our dispute to arbitration as soon as possible.
There is no doubt that the proposal presented by the Government, and agreed to by the Opposition, to encourage people to become members of the regulatory body and to make use of an arbitration scheme has its attractions, but I think that the right hon. and learned Lady and my right hon. Friend the Secretary of State should be careful not to be seduced into thinking that arbitration equals no expense, no time, and simplicity. The sorts of cases that go to arbitration can be just as complicated as those which go to court and the expense involved in a fully tuned-up arbitration is no less than that of a piece of litigation. So this is a jolly good idea and let us all say how wonderful it is, but let us not seduce ourselves into thinking that arbitration is some magic answer, because there will be plenty of cases where the interlocutory procedures will be far too complicated for speedy mediation or arbitration under the regulatory scheme.
Ms Harman
I am well aware that many arbitration cases are incredibly complex—for example, those in the construction industry. However, one thing that the recogniser established under the royal charter is charged to do is to see that the regulator, which is coming forward to seek recognition, has an inexpensive arbitration system. Obviously, it is not automatic that an arbitration system will be inexpensive—it could be very expensive—but the regulator, seeking recognition, has an opportunity to put forward a brand new system that starts off by trying to be as inexpensive as possible; it is free of cost for the complainant but there are the costs of running it. I apologise for my slightly waspish response to the hon. and learned Gentleman’s intervention; I must have been trying to get my defence in first.
That deals with the point about arbitration and costs, and I now wish to deal with the issue of exemplary damages. Obviously, the bar for those is set very high and they are rarely awarded. As hon. Members will know, they occur where the court wants not only to quantify the compensation for the claimant’s suffering and loss—mental, physical and financial—but to teach the defendant a lesson. Sometimes called punitive damages, exemplary damages are awarded to make an example; they are like a public policy intervention that gives a good bonus to the claimant, because the court wants to teach the defendant a lesson and so imposes extra damages.
New clause 21A sets the bar for exemplary damages very high, as it provides that the “defendant’s conduct” must have
“shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights”.
In addition, the conduct must have been
“such that the court should punish the defendant for it”.
We know what we are dealing with here—very extreme conduct.
Mr John Redwood (Wokingham) (Con)
We are being asked to legislate for exemplary damages here in this House, so does that mean that this really is a statutory system and that the right hon. and learned Lady won?
Ms Harman
No, because there is no statute that says, “We are setting up a system and we are passing a law to make all the newspapers be in it.” The newspapers have a choice as to whether or not they enter the system. However, the point is that we are incentivising them to enter it and disincentivising them from staying outside. They could make a judgment that they want to stay outside. They could decide that they do not want to go to arbitration and that they will take their chances with the court. They might decide that they will be so careful that they will never commit a media tort, and even if they did, that they would never get anywhere near the “outrageous” behaviour that would justify exemplary damages and so would not need to worry about that. I hope that they will not take the view. I hope they will think that, even if they are not behaving outrageously, they would want to shelter themselves from the prospect of exemplary damages. I hope that they will go into the system willingly. Exemplary damages will still be available to the courts to award against people who are in the regulator, but it is more or less a presumption that those people will not be in it. That is a major disincentive.
Mel Stride (Central Devon) (Con)
There is clearly a very strong disincentive to go into the scheme for those who might qualify, but there is a grey area about which publications should fall within the scope of the scheme. Would it be possible under these arrangements for those publications that might not be sure to establish whether they should or could qualify for the scheme?
Ms Harman
Any publication could apply to be a member of a regulator. It would find out whether it came within the purview of that regulator, as the regulator might reply saying, “Sorry, we don’t regulate you.”
Exemplary damages simply give newspapers another incentive to join the regulator. The court is left with the opportunity to award exemplary damages, only in much narrower circumstances. I hope that all the newspapers—including those that did not agree with the setting up of the Leveson inquiry, with how Lord Leveson took evidence or with his report—will propose regulators and join them now that the report has been published and all parties have agreed that we should have the royal charter and the accompanying bits of statute. I am sure that the Secretary of State, the Deputy Prime Minister and the Prime Minister will want to do everything they can to say to the press, as the Prime Minister said in today’s debate, that it is impossible for the newspapers to hold the powerful to account if they are abusing their own power. A good complaints system, which is respected and has public confidence, is a good thing in principle, so it is important that the newspapers step forward and join the regulator.
After Leveson reported, he said that the ball was now in the politicians’ court. He asked us all to work together to agree and we did. Now, the ball is in the press’s court and I hope that they will rise to that challenge.
Mr Bacon
I am listening to the right hon. and learned Lady with interest, although she reminds me of George Orwell’s comment about the sort of people who play with fire without knowing that fire is hot. That comment is directed at those on both Front Benches, including my right hon. Friend the Secretary of State, who is a very old friend. They have no idea what they are playing with—no idea. Does the right hon. and learned Lady not understand that one person’s outrageous behaviour is another person’s sensible and moderate behaviour? Does she not understand that after Lord Hutton issued his whitewash report, some of those who criticised it were accused of acting outrageously?
Ms Harman
We are not talking about any old person’s view of deliberate or reckless disregard or conduct of an outrageous nature. We are not talking about my view of what might constitute deliberate or reckless disregard or conduct of an outrageous nature, or even the view of the Secretary of State. We are talking about the judge’s view—not any old person but a judicial personage—
Ms Harman
The hon. Gentleman needs to calm down and relax. We are giving the courts an opportunity to exercise their judgment so that when something is so outrageous that they do not think that the normal quantum of damages assessed on what has been suffered is enough, they can add to it. It is right that that should apply to media torts.
As I have said, Lord Justice Leveson urged us all to work together and we have. The Secretary of State invited us to cross-party talks and I thank Lord Wallace, who was the Liberal Democrat there. It just goes to show that one should not believe what one reads in the newspapers. I had read a lot about the Minister for Government Policy, the right hon. Member for West Dorset (Mr Letwin),in the newspapers and thought he was an absent-minded professor type who was absolutely ditsy. I had read it in the newspapers, so I thought it must be true—[Interruption.] He is now in the Chamber. I discovered that it was not at all like that, and that he was very intelligent and purposeful. He played a key part in reaching this agreement, which is very important indeed.
We were ably assisted by a number of the Culture Secretary’s Conservative colleagues. I do not want to do what my right hon. Friend the Member for Exeter (Mr Bradshaw) did and blight their reputations, but we found it incredibly helpful to be joined at our very long meetings—we had one meeting that lasted seven hours—by the hon. Members for Camborne and Redruth (George Eustice), for Stratford-on-Avon (Nadhim Zahawi), for South Swindon (Mr Buckland) and for Richmond Park (Zac Goldsmith) and the right hon. Member for Bermondsey and Old Southwark (Simon Hughes).
We tried to work on a cross-party basis because what the press have always done in the past is divide and rule. They have always sought to play one party off against another. We have to win elections, so having the press shining a light on us and saying how great we are is very tempting. It is hard to win the support of the voters. If we have the backing of the press, it seems much easier, especially if they are slagging off our opponents. That is what the press have always relied on—that we have never worked together to put a proper complaints system in place, but have allowed the press to divide us and rule.
Sir Bob Russell
Would the right hon. and learned Lady like to clarify that? Will she make it clear that when she refers to the press, she is referring to elements of the national press, not the local or the provincial press? They have got caught up in this, and they are not responsible.
Ms Harman
The Leader of the Opposition, the Prime Minister and the Deputy Prime Minister all acknowledged that successive Governments have not taken action to put in place a proper, sensible, reasonable complaints system, not because of the regional or local press, but because of the power of the national press, particularly the monopolistic power of the national press. We will have to move on to the question of monopolistic ownership, but not now because we are exhausted. However, the regional and local press have nothing to fear from having good standards and having a complaints system. One of the reasons why we worked to narrow the arbitration system was the great fears of the regional and local press. We know that they are facing very tough times so we do not want to do anything to make matters more difficult for them.
I agree with the hon. Member for South Dorset (Richard Drax), who is no longer in his place. He said there was something uncomfortable about dealing with matters behind closed doors. The royal charter is an agreement that is not subject to scrutiny. It does not go before a Committee or to the House of Lords. It drifts by in a flash, then it is up to the Privy Council. However, we cannot have it both ways. We can have Parliament crawling over legislation that applies to the press, which makes the press feel very uncomfortable and makes the Prime Minister apparently feel neuralgic. I do not have the same sensitivities, but apparently the Government do. We can avoid that through the royal charter process, in which case there is no parliamentary scrutiny. We cannot have both, and the choice has been to have a royal charter and a self-regulatory system, without parliamentary scrutiny of it, beyond the discussion that we have had.
In that respect, I shall mention one issue which is not the subject of the amendments but which comes into the question of the charter. I refer to conscience clauses for journalists. Many journalists gave evidence to Leveson and said, “We knew that we were being asked to do things that were in breach of the code and we wanted not to do them, but we feared that we would be sacked if we said, ‘We won’t do this.’” Journalists talked of being asked to do outrageous things but because it is so difficult, and fearing that if they lost their job they would never get another, they never dared speak up.Lord Justice Leveson proposed that the industry and the regulatory body should consider encouraging conscience clauses in journalists’ contracts. The relevant new clause has not been selected, so I will not mention it because that would be out of order. However, in schedule 2, on page 13 of the charter, which hon. Members have had scant opportunity to look at, there is what the Foreign Office calls a brush past. Basically, this is mentioned in paragraph 4.
Sir Edward Garnier
I thank the Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Basingstoke (Maria Miller), and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) for introducing this section of the debate. It is clear that Members on both sides of the Chamber have worked extremely hard to bring the matter to a head. As I said in the debate opened earlier by the Prime Minister, everyone must be congratulated, but we must not oversell it or exaggerate the claims for the solution that may have been found.
I was interested in looking at some of the new clauses and new schedules to see that the statutory framework that seems to have been set down for the Crime and Courts Bill makes some changes to the law, but only up to a point. If one looks at new clause 21A, provision is made for the award of exemplary damages unless the defendant was a relevant publisher. But that is cancelled because the court can disregard subsection (2), and that is cancelled because under subsection (4) the court is not prevented from making an award of exemplary damages for other reasons. It rather disappears up its own grammar—I was about to use a rather unparliamentary term. We might need at some stage to reconsider the English used in the new clause if it is to be understood by the people we wish it to attract.
The other point we ought to think about—something my hon. Friend the Member for Hexham (Guy Opperman) and I were discussing only a moment ago—is that we must be careful not to set up two regimes for exemplary damages. There already exists a common law regime for exemplary or punitive damages. Broadly, it is available where a state actor has behaved in an unconstitutional or high-handed fashion, for example when the police or the Prison Service grossly misbehaves in relation to someone in custody. That example is perfectly easy to describe: the court will award punitive and exemplary damages to mark society’s disapproval of the behaviour of that arm of the state.
Guy Opperman
Does my hon. and learned Friend agree that there appears to be, in effect, almost a mirror image of the common law system of exemplary damages? Under the present system, which he rightly describes, for an unlawful arrest involving a police officer verballing an innocent defendant, for example, a judge would give exemplary damages. Surely that would be mirrored in exactly the same way in the provisions proposed in the new clause. All that might be good, but surely those provisions would apply on an ongoing basis in any event. Does he agree that the concern is that the provision on exemplary damages does not necessarily change the common law?
Sir Edward Garnier
I think that I largely agree with my hon. Friend. The first limb relates to unconstitutional state behaviour, which he described and I mentioned, but the second limb relates to situations in which, under the common law, the defendant has calculated that the gain he could make from the civil wrong he commits will lead to greater profit for him than any potential damages he might have to pay as compensation to the wronged person. The court can recognise that by punishing the defendant, and deterring others from doing the same thing, through the separate and additional award of exemplary damages. Those two limbs of the exemplary damages regime are well described in the 1964 case of Rookes v. Barnard, but I will bore the House no further on that.
What we are creating is a regime that will be similar to the common law regime but not exactly the same and that will be limited to “relevant publishers”. We need to think carefully about whether we are setting up two systems that are close, but not quite parallel, for securing exemplary damages. While we are legislating to adjust exemplary damages for the perfectly sensible and understandable motive of encouraging newspaper publishers, or those who will become “relevant publishers”, to enter a scheme under a regulator, I wonder whether we ought to bring together everything relating to exemplary damages under one statutory umbrella. I say that not simply because I think that it would be neater, but also because of what is said in subsection (4) of new clause 30, which defines a relevant claim. It states:
‘“Relevant claim” means a civil claim made in respect of any of the following—
(a) libel;
(b) slander;
(c) breach of confidence;
(d) misuse of private information;
(e) malicious falsehood;
(f) harassment.’
Under the common law, libel, slander and malicious falsehood are already susceptible to punitive and exemplary damages, but as we know from Max Mosley’s case against Mirror Group Newspapers—I will not rehearse the facts of the case—the judge, when asked to award exemplary damages to the claimant in respect of the behaviour of the defendant newspaper, said, “Under the common law I do not think that I can extend the ambit of exemplary damages beyond the categories of libel and slander and so forth to a claim involving a breach of confidence or the misuse of private information.”
In the Bill we are extending by statute what that judge could not do, but we are extending it only to cases involving “relevant publishers”; we are not extending it to what I will crudely call “irrelevant publishers” or individual defendants who might misbehave in such a way that brings them within the regime of either of the two limbs of exemplary damages. I do not want there to be two separate types of exemplary damages. One statutory system should govern the consideration and awarding of exemplary damages, not one and a half or two systems. I urge the Government to consider this when they are thinking about how to take these matters forward. Perhaps having done so they will think that my concerns are of no importance or account, but I raise them nevertheless, admittedly in the light of having seen the document only during the course of this afternoon.
New clause 27A on the award of costs mirrors the arguments about exemplary damages. I entirely understand that the policy behind exemplary damages and the statutory costs regime as described in this set of manuscript amendments is intended to incentivise relevant publishers to come within the regulatory scheme. That is understood and perfectly sensible. However, we are in danger of misleading ourselves if we think that that is going to lead to easy and early resolution of media disputes. A moment ago I had a brief discussion with the right hon. and learned Member for Camberwell and Peckham (Ms Harman) on arbitration and so forth. New clause 27A(2) —I will read it, if I may, because it might be helpful—says:
“If the defendant was a member of an approved regulator at the time when the claim was commenced (or was unable to be a member at that time for reasons beyond the defendant’s control or it would have been unreasonable in the circumstances for the defendant to have been a member at that time), the court must not award costs against the defendant unless satisfied that…the issues raised by the claim could have been resolved by using an arbitration scheme of the approved regulator, or…it is just and equitable in all the circumstances of the case to award costs against the defendant.”
That involves a bit of saying, “On the one hand but then on the other.” It is not quite clear which is the desired policy because there is a bifurcation.
On the question of whether
“the issues raised by the claim could have been resolved by using an arbitration scheme of the approved regulator”,
we would of course first have to see what that arbitration scheme looked like. Going back to the days of the now-no-longer-regretted Press Complaints Commission, that organisation, because of how it was set up and staffed and how the panels of adjudicators were composed, was wholly incapable of dealing with hugely complicated factual issues or with matters that required quite a nice calculation, or a nice discussion, of matters of law.
One might think that it would be very sensible that if a series of grossly defamatory allegations were made in a front-page article in a tabloid newspaper, or any other newspaper, that would lead to a dispute resolution process of the sort envisaged under this regime. Of course, it has a spurious attraction: “Let’s mediate, let’s settle, and let’s get it all dealt with quickly and cheaply and with the least possible intervention by lawyers.” As a matter of theory, that is a jolly good idea, but disputes come in different shapes and sizes. One can have the simplest possible dispute that does not require evidence or looking at complicated documents. I give the example of the meaning of words. If an article is defamatory on the face of it, a professor of English does not need to come and give a lecture about what this word means or that word means. The judge, if he is the arbiter, or the arbitration panel, can say, “This, in its natural and ordinary meaning, bears the following defamatory meaning”—end of story. Then the defendant, or the respondent to the arbitration, can say, “Okay, I accept what you say and I apologise—I didn’t mean that.” If meaning is the only question that has to be considered, some form of early, non-court dispute resolution, assuming that the panel is competent, would be a perfectly sensible way to do it.
Let us assume, however, that four contended meanings can be derived from the words under discussion. The defendant newspaper, be it a relevant publisher or otherwise, may say, “We don’t think that the words have those two highest meanings, but we do think that they have the two lower, less serious and less defamatory meanings. In so far as those meanings are to be derived from the words, we say they are true and we intend to justify them. We will also go further by saying that those meanings are not only true as a matter of fact, but that, in so far as they comprise or include comment, they are honest comment.” That will require the proposed system’s mediation procedure to go into all sorts of complicated questions with regard to the disclosure of relevant evidence, documents and so on.
Guy Opperman
My hon. and learned Friend is making a very good case. Does he agree that the PCC was notoriously fallible when resolving large newspaper disputes, but very effective at resolving disputes involving local media and newspapers, which genuinely respected and obeyed its procedures? The danger with the new system, which my hon. and learned Friend is outlining eloquently, is that the local paper will be stuck with the same regulatory process, which is clearly meant to be a sledgehammer, as large national newspapers such as The Sun and the Daily Mirror. I suspect that that will result in the process being more expensive for the smaller paper—
Mr Speaker
Order. The hon. Gentleman’s intervention is exceptionally lengthy. I know that he has a distinguished record at the bar. If he were being paid by the word he would be greatly enriched, but I trust that he has made his point to his satisfaction. If not, he can always have another go in a moment.
Sir Edward Garnier
What the PCC was good at was dealing with unfairness—the hideous intrusion on private grief, the doorstepper, the camera coming through the letter box, the knock on the door demanding a photograph of the dead child and so on. The PCC dealt with that extremely well, but what it could not deal with was the multi-issue disputes that I have outlined.
It is not just a question of assessing the truth or falsity of words or of whether they are defensible and honest comment. On honest comment and certain forms of qualified privileged defence, the judge or the arbiter has to consider the question of malice and the respondent newspaper’s motive when it published the words complained of. I do not think, even with the best will in the world, that the proposed arbitration system for relevant publishers, under a recognised regulator, good though it will be, will be sufficiently well breeched and resourced to substitute itself for a disinterested judge when dealing with the case.
When it comes to disciplinary measures or the incentivisation of costs to bring people into this scheme, either as claimants or defendants—this goes back to a point that I made in the earlier debate—it will not be possible to deal with many expensive cases cheaply and quickly. They will need to go to a more formal, court-like, if not court, system. They will require proper arbitration with qualified arbiters, the sifting and assessment of evidence, the judging of witnesses and the reading of lots of documents. Those are functions of any form of arbitration dispute and it will not be quick or cheap.
Richard Drax
Is my hon. and learned Friend saying that this proposed policy is a complete waste of time and that the system we have is perfectly workable, so long as it is more accessible to the many people who are not well off and cannot afford a listening?
Sir Edward Garnier
I most certainly am not saying that it is a complete waste of time. I am saying that we should not seduce ourselves into thinking that it will do more than it can. It will be a far better system, all being well, than the PCC. It will have real teeth. It will have the ability to discipline respondent newspapers that are within the scheme by awarding costs and penalties of one sort or another.
The cases in which the new system will award a penalty of £1 million will be so rare as to be unthinkable. I imagine that it will deal with cases rather similar to those that are dealt with under the provisions of the Defamation Act 1996 on summary decisions, for which there is a limit of £10,000. I suspect that many of the cases that at the moment go to the High Court under those provisions will, if people are sensible, go into the new scheme. It will look at low-level damages, low-level punitive sanctions and cases that do not involve lots of complicated factual and legal issues.
Just because the new system will not look at many cases and just because the cases will not be hugely complicated does not mean that we should not do it; we should. We need access to some form of arbitration system for the people who have been bullied and disturbed by tabloid newspapers sticking their lenses through people’s letterboxes and so on. However, I urge the House not to think that we have suddenly waved a magic wand and that all future disputes will be resolved between victims or individual claimants and large media organisations through a cheap and speedy system; they will not. We ought to be a little cautious about that.
Mark Reckless
I have been enjoying my hon. and learned Friend’s speech for the past 20 minutes and I believe that the House benefits greatly from his exposition of these concepts. However, I am still unclear whether he supports or opposes what is proposed.
Sir Edward Garnier
I do apologise if I did not make myself clear. I will try to do so again, but perhaps rather more speedily. I support what is in the measures. It is easy to understand that point, I suspect.
Sir Edward Garnier
The second point is that, although I support the measures, I suspect that they will be of limited availability and limited use. However, that they will not solve every problem does not mean that we should not deploy them to solve some problems. As I said a moment ago, the sorts of problems that I think they will be used to solve are those that are currently dealt with summarily under the Defamation Act 1996 with a damages limit of £10,000. There is no suggestion of a damages limit here, but I think that it is in that area of dispute that the system will work. It will be broadly in disputes over meaning, unfairness or beastly behaviour by a newspaper that it will work.
The new system will also bring into the exemplary damages regime, to go back to my first set of arguments, causes of action for which punitive damages cannot currently be received under common law, such as breach of confidence and misuse of private information.
There is a lot to be said in favour of what is proposed. I just urge Members not to get excessively excited about what we are achieving. There will come a time when we have to look at the guts of the regulatory system, including at who is to be on the panels that decide the cases and so on. There is therefore a lot more work for the Minister for Government Policy and the Secretary of State for Culture, Media and Sport to do, with co-operation, I hope, from the Opposition parties and our coalition partners.
I am probably going to the church by way of the moon, but I really do think that much of what has been said today is commendable, but that much of it is too overexcited. Yes, we should celebrate the consensus, but let us not be misled by it.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
It is a genuine pleasure to follow the hon. and learned Member for Harborough (Sir Edward Garnier), who made a considered and reasonable contribution in a mellow way. It is right to say that the royal charter is not a solution to all the problems that occurred in the past, and that it is possibly not a solution for the future if malevolent forces out there wish to break the law and the arrangements in the charter.
I welcome the Leveson-compliant solution—that is the key: it is Leveson-compliant. I did not take part in the earlier debate, although I listened to all the contributions in what one of my constituents phoned to say was a bit of a love-in in the House of Commons, given the amount of self-congratulation across the Chamber. Let us be frank—I am a very frank person as you know, Mr Speaker: my constituents and the general public know that the Government, the Prime Minister and the Secretary of State were cajoled, bullied and harassed into solving the problem with a Leveson-compliant solution. Let us not avoid that. If MPs had not been present in large enough numbers to vote the Government down, there was no possibility that the weak proposal put forward by the Prime Minister would have been amended to what we have now. That must be said so that people know the truth.
I heard the atrocious comments on the radio this morning by the person I now consider to be not the Minister for Culture, Media and Sport, but the Minister for spin, about dragging the Labour party along and defending the press from the terrible things that the Labour party was going to do through statute. In fact, however, what those on the Labour and Liberal Democrat Front Benches, including the Deputy Prime Minister, sought all along was a Leveson-compliant solution, and that is what we have.
I am worried about the Minister’s approach to the amendments in her speech. She was either incentivising publishers and publications to join up to the charter—I thought that was done in a better and more balanced way by the deputy leader of the Opposition—or it sounded to me that she was trying to assure publishers and publications that if they sign up to the arrangement as amended, they will not find it much more demanding of their own self-discipline than under the discredited Press Complaints Commission. People should read her speech in some detail because lots of signals were put out that I believe were wrong.
This is an opportunity for the press to right the wrongs of the past by signing up to self-discipline through this form of charter. If, however, the system is not more demanding or effective than the Press Complaints Commission, the first time the press create another victim of a new abuse, perhaps of a different sort, Parliament will be brought into serious disrepute. That is what the Leader of the Opposition and the Deputy Prime Minister were trying to avoid by putting together a measure that is Leveson-compliant.
Bob Stewart (Beckenham) (Con)
I very much hope that the charter will act as a catalyst for good behaviour, as well as everything else. My children were doorstepped in their school when I was in Bosnia and not a public figure, and my mother had her door pushed in and photographs were taken. I hope that the press will try to regulate itself and stop such things so that they never happen and the press never have to come before any regulator.
Michael Connarty
I normally lean on the optimistic side—the sun rises every morning; I am glad I am still alive and my heart is still beating. That is two-up for me and I am happy to go on with the day with a positive view. Recently, however, some of my constituents were in Algeria, one of whom was a captive and in the trucks that were bombed. He managed to run away but he had bombs hanging round his neck as he did so. The press insisted on trying to get to that person’s home. I must pay a compliment to MSP colleagues in my constituency, who both happen to be SNP. We agreed that we would not talk to the press or the media, and that we would not give out the names of the people involved. The press still found a way to the family home and tried to get into the house to interview the young people involved, one of whom was still very traumatised by their experience. The press therefore still have a form of approach to the public whereby they see them as another byline without thinking about the consequences of what they do. The charter might help with that. It might not help, as the hon. and learned Member for Harborough said, but I hope it does.
Mr Speaker
Order. Just before I call the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), I will just point out that there are four Members seeking to contribute. The Secretary of State will want briefly to wind up on the new clause, and the knife falls at 10.21 pm. I am sure all Members will wish to take account of that; it would be good to get them all in.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I rise to thank the Secretary of State for introducing this group of new clauses and amendments, and to support them. They are in the name not just of the Prime Minister, the Secretary of State, the Home Secretary and the Leader of the Opposition, but the Deputy Prime Minister. They are the additional provisions on exemplary damages and costs agreed as a result of the labours of recent days. I have paid tribute to various people, but I just want to add my tribute to my hon. Friend the hon. Member for South Dorset (Richard Drax), who was more thoroughly engaged, and later into the night, than many of us throughout pretty much all of this process. He must be thanked, too.
I am relieved that agreement was reached, because otherwise it would have been my name leading on 10 amendments, new clauses and schedules, and I would have had to explain all the technical matters on exemplary damages, costs and so on, on behalf of the coalition and other parties, instead of the Secretary of State. I therefore thank those who came to the rescue and did the deal. I will make just a couple of simple points and follow your request, Mr Speaker, to make sure there will be time for the other Members who wish to speak.
As we have all done, I went back to what Lord Justice Leveson said on these matters in his report. He was clear, in paragraphs 66 to 70, about what he was seeking to do. He led into that in paragraph 57, in relation to the body he recommended. He stated that it should
“order appropriate redress while encouraging individual newspapers to embrace a more rigorous process for dealing with complaints internally…and provide a fair, quick and inexpensive arbitration service to deal with any civil law claims based upon its members’ publications.”
I agree absolutely with the deputy leader of the Labour party that an arbitration service is an indispensible part of the structure. I hear, of course, what the hon. and learned Member for Harborough (Sir Edward Garnier) said—that that does not necessarily produce a quick, speedy or cheap outcome—but to get something by agreement, rather than full-frontal litigation, is clearly a good thing.
Paragraphs 66 and 67 read:
“The need for incentives…has led me to recommend the provision of an arbitration service… Such a system…would then make it possible to provide an incentive in relation to the costs of civil litigation. The normal rule is that the loser pays the legal costs incurred by the winner but costs recovered are never all the costs incurred”—
everyone who has been to law knows about that—
“and litigation is expensive not only for the loser but frequently for the winner as well. If, by declining to be a part of a regulatory system, a publisher has deprived a claimant of access to a quick, fair, low cost arbitration of the type I have proposed, the Civil Procedure Rules (governing civil litigation) could permit the court to deprive that publisher of its costs of litigation in privacy, defamation and other media cases, even if it had been successful.”
Lord Justice Leveson then sets out how that would happen in relation to exemplary damages, and concludes in paragraph 69:
“Such a system would also work the other way round. If an extremely wealthy claimant wished to force a newspaper publisher that was a member of the regulatory body into litigation (in the hope that the financial risk would compel settlement), it would be open to the publisher to argue that having provided a recognised low cost arbitral route, that claimant, even if successful, should be deprived of costs, simply because there was another, reasonable and cheap route to justice which could have been followed.”
Then there is an easy-to-understand set of recommendations at the back of the Lord Justice Leveson’s introduction on the process for damages.
The really good thing is that, without anybody, including the Secretary of State, pretending that the drafting is perfect for all time, those of us who were involved in the discussions have sought to strike a balance: if a publisher is part of the system, the presumption—I use the word in a non-legalistic way—will be that it will not be subject to exemplary damages, but if it is outside the system, the presumption will be that it could be subject to them. It is not quite that straightforward, but that was the general idea—and it was a good idea. It is an incentive-disincentive system, which was what everybody was working towards, so I join others in calling on the press to join up. If they do, there will be a system ready for them to make. This is not a pre-made system. The starting point is the existing code, but it will be up to the press to make the system work, and we all encourage them to do that. I am glad, then, that we have a platform from which to proceed.
I want to make three final points. First, I understand that further amendments might be necessary. The House of Lords has that opportunity, and the Liberal Democrat team is certainly willing to collaborate with Conservative colleagues, Labour colleagues and colleagues from elsewhere to ensure that we get it right, if we need to make further, more technical amendments in the Lords. We have time to do it. Secondly, I join others in thanking Hacked Off, which became the assembly of people speaking on behalf of victims. It was hard work at times, as all of us who were in the negotiations know, but it had a justified case. Its job was to remind us why we went down this road and, rightfully, to hold our feet to the fire and ensure that we did not forget why we were doing this. It is about the lives of people not in the public gaze.
Finally, we have referred to people—the McCanns, the Dowlers and others have been cited—who suddenly find themselves unexpectedly in the public eye. The other people referred to by at least one colleague are those who become part of the public commentary simply by their association with somebody who is in the public eye. That is equally unacceptable. It is the children, the mother, the elderly parent, the former wife, husband or partner, the friend or the associate—those people often get dragged in completely unwittingly. Perhaps they happened to be in a photograph or were at the house when somebody knocked on the door. We have to have a system that understands that if there is due cause for complaint about a politician, a sports celebrity or a business person, that is fine, but that does not mean that anyone has a free rein to go after all the other people who are absolutely innocent appendages to their lives, which happen to be public lives.
Richard Drax
Is the right hon. Gentleman saying that if a journalist goes to someone’s door and there are other people in the house, the press should be stopped from commenting on them? If that is the case, who on earth is going to make those judgments, when so many stories we read involve other people? It is never just one person; there are always other people involved in a story.
Simon Hughes
I do not want to elaborate—I want to sit down and let others get in—but let me give an example. I refer my hon. Friend to Lord Justice Leveson’s inquiry—to the evidence he took and the commentary he made in his report. He made the case that people who are associated with others can get swept into the press’s undermining or attacks entirely unjustifiably. The example given by one of our hon. Friends was that of an elderly mother who is nothing to do with the individual concerned—she lives somewhere else, in another house—but is pursued by the press, who go after her, knock on her door, go up her drive, sit outside her house and have cameras focused on it, drilling her with questions and trying to get things out of her. We are talking about people who are totally ill-equipped and unprepared for that degree of exposure and who never asked for it. Obviously I am not seeking to stop the press if they knock on the door of my neighbour, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), the deputy leader of the Labour party, at her home in my borough or at my home. That is fine, but it is not fine if they suddenly start pursuing all sorts of other people and giving them grief.
I think we now understand much better what the parameters are. We are hoping to protect the innocent who have been the victims, not to make the press have a more difficult job to do in pursuing proper inquiries into people who are properly the subject of public interest.
John McDonnell (Hayes and Harlington) (Lab)
There are other victims of this whole process, some of whom were revealed in the evidence to Leveson by the National Union of Journalists. They were the journalists who stood up and said, “I refuse to implement some of these strategies”—these tactics, manipulations or whatever we want to call them—and as a result lost their jobs, while others were victimised. The culture of bullying in some newsrooms was exposed in the NUJ’s evidence. That is why part of the union’s policy was to advocate a conscience clause.
I am grateful that, as my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) said, there is a “brush past” in schedule 2 to the charter, with the reference to Leveson’s recommendation that:
“The industry generally and a regulatory body in particular should consider requiring its members to include in the employment or service contracts with journalists a clause to the effect that no disciplinary action would be taken against a journalist as a result of a refusal to act in a manner which is contrary to the code of practice.”
That would add to the architecture of protection and lift the standards of journalism in our country. That is why I welcome the important reference in schedule 2, which my right hon. and learned Friend shared with us. I regret the fact that it is a brush past, rather than something more specific, but I understand the negotiations that had to take place. We will need to return to this issue in the coming months. As the board of recognition panel is established, the regulator then applies for recognition. Consideration of whether the regulator has taken the recommendations into account is critical. One of this House’s roles will be to explore whether full consideration has been given to the conscience clause.
When the idea of a conscience clause was introduced into the debate by Leveson, there seemed to be cross-party support for it. Certainly the Deputy Prime Minister made a statement in support and the Prime Minister said he would consider the matter. Since then, the NUJ has been invited to go off and negotiate a conscience clause with individual employers. Unfortunately, that has not been taken seriously by a number of the employers. Negotiations have not proceeded and so far a conscience clause has not been inserted into a single contract. This is therefore an important factor to be taken into account by the recognition panel, and the regulator needs to put it firmly on the agenda for the future. A conscience clause would be an additional bulwark of support in establishing the point that we should not go through this cycle again and that there is a standard of journalism that we do not expect any journalist, editor or publisher to resile from. This will be beneficial in the long run. It will not impose onerous conditions on employers or publishers, and it should be welcomed as it will ensure a level playing field and a high standard of journalism right across the profession.
I am grateful for the reference in schedule 2 to Leveson’s recommendation 47, but I believe that the House needs to pay close attention to the roll-out of the process to ensure that it is considered by the regulator and that it forms part of the considerations of the recognition panel when the regulator is appointed.
Guy Opperman
Our constituents want a press that does not abuse the innocent, but that exposes the wrongdoer, the charlatan and the fraudster. I pay tribute to the work of Lord Justice Leveson, and to the people who have given evidence. Anyone who has ever given evidence or conducted legal proceedings will know that giving evidence is a traumatic and upsetting process, and to give evidence to the Leveson inquiry was a brave thing to do. Credit must be given to the Prime Minister for setting up the inquiry, and to all the parties for reaching some sort of agreement. However, it is a truism in legal circles and certainly in parliamentary circles that last-minute law is normally bad law. It is a matter of concern that the provisions have been produced overnight and that, even today, we are receiving manuscript amendments—only in Parliament are manuscript amendments typed—on important issues relating to exemplary damages, costs and the like.
Jacob Rees-Mogg
Is not the key to the matter the fact that this will be the law, and that it therefore constitutes statutory regulation of the press, with penalties and coercion if the press do not go along with it?
Guy Opperman
I hesitate at any stage in my parliamentary career to disagree on a matter either of parliamentary protocol or of statutory interpretation with the éminence grise that is my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). However, on this point I would disagree with him, because although the charter has to be brought to fruition through this House, it is clear that it is part of the common law. Its ongoing interpretation will be a common-law interpretation by a variety of High Court judges, who will spend a lot of time decoding, interpreting and attempting to fathom the provisions not only in the manuscript amendments but in the original proposals for the charter and the subsequent amendments that we received overnight. So, on this particular point, I disagree with my hon. Friend.
I suggest that this is a pragmatic resolution of a difficult parliamentary dispute. It is an all-party solution that accepts the fundamental principle that the Press Complaints Commission was patently not fit for purpose and was clearly letting people down. As my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) made clear in his well thought-out and eloquent speech, the PCC was unable to handle the large disputes of fact and law pertaining to the serious libels and slanders that take place in the media. It was extremely good at dealing with the local press and with low impact resolution-type cases such as those involving £10,000 payable for defamation, for example, but it struggled desperately to cope with the large media organisations and the particularly malign and difficult cases that, sadly, had to go to court.
That brings me, in the limited time I have, to the issue of costs. It fusses me tremendously that the position of an individual litigant in a case will not change that much. The royal charter might introduce a free process, in the sense that there is no claim form, unlike in normal litigation, but it will be free to those who are successful, because they will have some form of protection. The problem is that an individual litigant without means who lives in a suburban street in Hexham, for example, will still be unable to bring a course of action against a large media organisation. Contrary to the best efforts of those on both Front Benches, arbitration is still a complex, expensive and difficult process through which to navigate. It is also the case that while simple arbitration can and will be resolved on a relatively speedy basis, for the large cases that so concern us—everything from the Dowlers downwards—arbitration will take months at the very least, if not years, and will cost money.
That brings us back to the point of whether an individual who is so maligned by the press will be in a position to bring a course of action against a newspaper on the present basis of financial support. If that is lacking to such an individual, I struggle to see that happening. The individual would have to go to organisations such as the Free Representation unit or the Bar Pro Bono unit. I suppose I should make a declaration not only that I was involved with those organisations as a mediator, but that, statutorily speaking, I am still owed money by the Government for the work I did on behalf of the Government. That is, however, a side matter.
Finally, speedy laws done at the last minute—despite the massive efforts over many months by the Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin) and others—will always need improvement. The improvement ability of this royal charter is exceptionally difficult and, as was explained earlier, is part of the problem of having a royal charter. The difficulty is now passed to the House of Lords, which has a solitary day to consider all the provisions in the charter, the amendments and the manuscript amendments in circumstances in which, I suggest with respect, there cannot be reasoned debate or reasoned assessment. If we could address that particular problem, things would improve massively. The reality in the end will be that High Court judges will assess the royal charter on a common-law basis and interpret it as best they can—with all the ramifications that we would not wish to see on an ongoing basis.
Paul Flynn
I rise to challenge the hyperbole of the Government Front-Bench team on this particular measure, which will not be a great Act that will bring new liberty to the country. It describes itself as a royal charter presumably in the hope that it will gain the respect that other royal charters have. One effective example is the one under which the BBC operates. At one time in my life, I had duties as a member of the Broadcasting Council for Wales to decide on political balance in broadcasts. Everything was decided on the basis of ensuring that those broadcasters who had air time represented the views of the country—not easy when it came to deciding on Welsh language broadcasts where one party was predominantly represented by Welsh speakers. It had to be done, and we found a way of dealing with the press that was effective and balanced.
No attempt could really be made to impose a political balance on our national press, which was described by Aneurin Bevan as
“the most prostituted in the world”.
We see that that is still true if we look at today’s newspapers and examine the way in which the Daily Mail, for example, devoted six days of front-page headlines, including in The Mail on Sunday, to one subject—to attack the Liberal Democrats. Other things were happening in the world, but day after day we had this political tract seeking to affect the results of a by-election.
As my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) said, we should look at the proprietors as people who have immense power—power without responsibility—so that even elected Prime Ministers pay court to them. John Major, for example, was threatened with having a bin dumped on his desk by the editor of The Sun. Tony Blair flew to Australia to pay court to the empire of Murdoch. We know that my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the present Prime Minister were in close relationships, socially, with editors, and we have been given a very unhealthy revelation about cabals who are far too close to, and have too much interest in, the press, the police and politicians. That is a worrying situation.
Maria Miller
The right hon. and learned Member for Camberwell and Peckham (Ms Harman) spoke of the importance of working together. One group of people to whom we have not yet paid tribute is the amazing team of officials at the Ministry of Justice, the Department for Culture, Media and Sport, and the Cabinet Office. Those people have gone above and beyond the call of duty in all that they have done, and I salute them.
I entirely understand why my hon. Friend the Member for Colchester (Sir Bob Russell) raised the issue of the local press twice today. Leveson recognised that the local press were not the main cause of the problem, and the system that we propose allows them different and appropriate terms of membership so that they will not pay more than they do at present.
My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) spoke of the importance of arbitration, but pointed out that it should not be expected to fix everything. Of course he is absolutely right. The provisions that we have drawn up will comply with the Arbitration Act 1996, and the arbitrators will be appropriately qualified expert lawyers, as recommended by Leveson.
The hon. Member for Linlithgow and East Falkirk (Michael Connarty) rightly raised the issue of Scotland. The charter is capable of applying to newspapers in Scotland that wish to be recognised under the system, and I have had discussions about that with Scottish Ministers. Lord McCluskey has now reported, and we wait to hear how his proposals will be dealt with. Like the hon. Gentleman, I hope that attention will be paid to the views that have been expressed in the debate.
The hon. Member for Hayes and Harlington (John McDonnell) raised the issue of a conscience clause, as he has done previously. I think it important for newspapers and the journalists who work for them to abide by the standards code of the industry self-regulator. I know that the hon. Gentleman has a long-standing interest in that. I can tell him that Leveson said that it was an issue for the industry itself to consider, and not something that the recognition body should require. As my right hon. Friend the Prime Minister himself said to the hon. Gentleman in November, the press do not have to wait for any further discussions or for the charter, but can start putting the system in place immediately.
A number of thoughtful contributions were made by learned colleagues, and of course we will pay great heed to the advice and thought contained in those. Although the discussion of these provisions on the Floor of the House may be somewhat brief, it clearly cannot be said that these issues have not been given long consideration, because they have been. More than a year of evidence was given to Lord Justice Leveson as part of his inquiries and since his report was presented to the House last November it has had some three months of consideration, on a cross-party basis and involving other groups, including those representing people affected by the problems of the press.
We have before us an important set of real incentives that have real effect to make sure that we can move forward, with today as a turning point where we stop talking about the theory of Leveson and start putting the practice of Leveson out for everybody to benefit from it. The provisions are a crucial part of this new tough regulatory regime and I commend them whole- heartedly to the House.
Mr Speaker
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
The Minister for Policing and Criminal Justice (Damian Green)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
Government new clause 16—Restraint orders and legal aid: supplementary.
Amendment 1, in clause 24, page 21, line 22, at end insert—
‘(6A) In fixing such an amount, and subsequent additions, account must be taken of the person’s relevant weekly income, excluding housing benefit and child related benefits, and allowance must be made for the protection of a reasonable financial subsistence level, in the manner used to determine the initial fine.’.
Amendment 103, page 21, line 25, leave out subsection (2).
Amendment 96, page 22, line 3, at end insert—
‘(5A) The Lord Chancellor must, by regulation, in statutory instrument of which a draft has been laid before and approved by resolution of each House of Parliament, provide the amount of any costs for services carried out for the purposes of collecting sums.’.
Amendment 97, in clause 25, page 23, line 11, leave out ‘person’ and insert ‘civil servant’.
Amendment 98, page 24, line 1, leave out paragraph (3).
New clause 12—Provision of intermediaries for very vulnerable witnesses—
‘(1) The Secretary of State must provide for intermediaries to be assigned to very vulnerable witnesses in all court cases.
(2) In the Youth Justice and Criminal Evidence Act 1999, after section 29 there is inserted:
“29A Intermediaries for very vulnerable witnesses
(1) A special measures direction must be made to provide for any examination of a very vulnerable witness (however and wherever conducted to be conducted through an interpreter or other person approved by the court for the purposes of this section (“an intermediary”).
(2) In addition to the functions set out in subsection 29(2), an intermediary must be assigned to very a vulnerable witness through their whole experience before, during and after court.
(3) For the purposes of this section, “very vulnerable witness” has the same meaning as defined in section [Court arrangements for very vulnerable witnesses] (5) of the Crime and Courts Act 2013.”.’.
New clause 14—Court arrangements for very vulnerable witnesses—
‘(1) The Secretary of State must make arrangements for specialist courts for very vulnerable witnesses.
(2) A specialist court for very vulnerable witnesses will consist of a partnership programme within the criminal court structure.
(3) In establishing the specialist court, the Secretary of State must involve the following partners—
(a) the judiciary;
(b) court officials;
(c) the Crown Prosecution Service;
(d) police forces;
(e) witness support services;
(f) victim support services; and
(g) any other specialist services that the Secretary of State deems appropriate.
(4) In cases where there is a very vulnerable witness—
(a) no judge can sit on the case unless he has taken part in appropriate training provided by the Judicial College;
(b) a single court usher, who has taken part in appropriate training provided by Her Majesty’s Courts and Tribunal Service, must be assigned to the witness throughout their time at court;
(c) the case will be assigned to a court with all necessary facilities to offer the full range of special measures set out in sections (23) to (30) of the Youth Justice and Criminal Evidence Act 1999;
(d) before allocating time for trials the court must take into account the impact of delays on very vulnerable witnesses; and
(e) the services of independent sexual violence advisors must be offered to very vulnerable witnesses in cases involving sexual offences.
(5) The Secretary of State must issue a code of practice giving guidance about court arrangements for very vulnerable witnesses, which must be published, and may be revised from time to time.
(6) Before issuing or revising a code under subsection (3), the Secretary of State must lay a copy before each House of Parliament for approval within a 40 day period.
(7) For the purposes of this section—
“very vulnerable witness” includes the victim in a case of child sexual abuse.
“independent sexual violence advisers” are victims-focused advocates who work with victims of recent and historic serious sexual crimes to enable them to access the services they need in the aftermath of the abuse they have experienced.’.
Government amendment 119.
Damian Green
Given the time pressure on our consideration of this large and disparate group, I propose to speak to the Government amendments—new clauses 15 and 16 and amendment 119—which relate to legal aid, and then, if possible, respond to the other amendments once I have had an opportunity to hear the arguments put forward by their sponsors. I hope that will provide a proper balance between Front-Bench and Back-Bench contributions to the debate.
Access to legal aid is a fundamental part of our legal system. However, difficult decisions relating to how the legal aid budget should be spent are made every day. We must remember that legal aid is not free and that we do not have unlimited resources. As such, we need to ensure that the limited funds are used effectively and directed to those who really need them.
At present, the Proceeds of Crime Act 2002 prevents restrained funds from being released to a defendant for legal expenses in relation to the offences to which the restraint order relates. Before the 2002 Act, there was a risk that individuals might recklessly dissipate assets through lavish spending on their defence in order to try to secure an acquittal at any cost. In 2002, the then Government decided that it was better to allow access to legal aid than to allow a defendant to draw down restrained funds to pay for their defence. However, that has led to a public perception that rich offenders with significant restrained assets are receiving vast sums of legal aid when they could afford to make a contribution to their defence. For example, over the past three years more than £14.3 million in legal aid was paid to just 49 high-profile individuals. Let us not forget that we are talking about individuals suspected of involvement in serious and organised crime, including drug smuggling and large-scale fraud, the victims of which are all too often numerous. [Interruption.]
Mr Speaker
Order. I apologise for interrupting the Minister. May I gently say to the House that a number of Back Benchers on both sides have new clauses or amendments to which they wish to speak, and there is such a hubbub that it is quite difficult to hear properly what the Minister is saying? Let us please have a bit of order, in everybody’s interests.
Damian Green
Since the introduction of the 2002 Act, a system of means-testing for legal aid has been introduced for all Crown court defendants. Those who can afford to pay some, or all, of their legal aid costs are required to do so. Although anyone charged with a criminal offence and facing imprisonment or loss of livelihood is entitled to legal aid, I think that the whole House would agree that if the defendant can pay some, or all, of their legal bill, they should do so. After all, as we ask people on modest incomes to pay something towards their defence costs, it is only fair and reasonable that we ask millionaires to do so. As such, new clause 15 amends section 41 of the 2002 Act to allow payment of a contribution towards, and up to the full amount of, their publicly funded legal aid costs.
The detailed mechanisms of how that will operate in practice will be set out in legal aid regulations made by the Lord Chancellor and, as provided for in new clause 16, regulations made by the Home Secretary, the latter being subject to the affirmative procedure. Both sets of regulations will be developed taking into account the potential impact on returning money to victims and assets that are used to incentivise further asset recovery work.
We can already freeze criminals’ assets to make it easier to recover ill-gotten gains and compensate victims, but that often leaves the state picking up their legal bill, even if the offender has plenty of money to pay that as well. I am sure that the whole House would agree that our aim should be to increase the overall amount of money taken from criminals. As I have said, the full details of the scheme will be set out in secondary legislation that will be subject to debate and approval in both Houses.
Jenny Chapman (Darlington) (Lab)
We support new clauses 15 and 16 and we welcome their inclusion in the Bill, although the Government have dragged their heels on this matter, which should more appropriately have been dealt with in the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
I am pleased to have the opportunity, alongside colleagues, to speak in favour of new clauses 12 and 14 on support for vulnerable witnesses. It is welcome to see such important proposals brought forward with support from Members in all parts of the House. In particular, I pay tribute to my hon. Friend the Member for Stockport (Ann Coffey) and the hon. Member for Oxford West and Abingdon (Nicola Blackwood) for their work on this. The new clauses would provide for a number of positive support mechanisms for very vulnerable witnesses such as a victim in a case of sexual abuse of a child. These are exceptionally distressing cases, and court proceedings are complex and stressful even for the most able adult. Justice is done when, and only when, victims feel able to come forward and report abuse and to cope with court proceedings.
New clause 12 deals specifically with registered intermediaries and calls for the provision of that support to every child who is in court as a victim of sexual abuse. An intermediary offers support to a vulnerable witness in communicating comfortably with the court throughout the trial. They are also able to assess the victim and advise the court on how best to meet their needs and provide effective but manageable questioning.
New clause 14 would provide for a wider array of improvements to court arrangements, making provision for a specialist court to handle cases involving a very vulnerable witness. The provisions include training for judges; assigning to the witness a single, consistent and familiar court usher; and taking into account the effect of time delays on the witness. It is difficult to overstate the importance of having such sensitive measures in place. It is our duty to ensure that a trial is as accessible and bearable for a victim as it could possibly be. We will support new clauses 12 and 14 should they be put to a vote.
I should also like to speak in support of amendment 1. I commend my right hon. Friends the Members for Torfaen (Paul Murphy) and for Wythenshawe and Sale East (Paul Goggins) for bringing these matters before the House and I thank Lord Touhig for raising it earlier in another place. The amendment would make no change to the premise of the Government’s proposals on liability for enforcement costs, nor would it introduce any new premise into the law. It would simply replicate a system of basic means-testing that is already in use and that the Government already accept as a reasonable and proportionate method for setting fines. It is right that an offender feels the financial hardship of their given fine and that they are expected to pay on time. The means-testing system is in place as a low-level safety net to ensure that penalties imposed do not jeopardise a basic level of subsistence for vulnerable debtors. The amendment would extend this safeguard, which is already subscribed to in law, to the stage where the Government have added the costs of recovery into the final system. I commend it to the House.
Nicola Blackwood (Oxford West and Abingdon) (Con)
I rise to speak to new clause 14, which stands in my name, supported by the hon. Member for Stockport (Ann Coffey) and many colleagues. I also express my support for new clause 12.
New clause 14 is designed to introduce specialist courts for very vulnerable victims. It is no secret that I have been deeply affected by a child sexual exploitation case in my constituency, but in addition the Home Affairs Committee inquiry has been hearing about the realities of child sexual exploitation across the country. I am repeatedly told that these girls do not appear to be victims—that they are just bad girls making bad choices and voting with their feet. The process of grooming makes them believe they are complicit in their abuse. Even if they manage to get away, heartbreakingly they too often go back to their abusers, feeling that that is their best option. They simply see no way out. But there are ways out. There is now more support available for victims of sexual abuse, conviction rates are on the up, and prosecutions in Rochdale and Keighley and excellent work in Lancashire show that we are getting our act together.
That is not, however, always the case and it is certainly not the perception. Keir Starmer made it clear just days ago that traditional tests by the Crown Prosecution Service to evaluate witnesses have the potential to leave this category of vulnerable witnesses unprotected. He used the example of the Rochdale witnesses, stating that if they were tested
“solely by asking questions such as whether they reported their abuse swiftly, whether they returned to the perpetrators, whether they had ever told untruths in the past, and whether their accounts were unaffected by drink or drugs, the answers would almost always result in a decision not to prosecute.”
Last year ChildLine received more than 15,000 calls relating to child sexual abuse, yet the National Society for the Prevention of Cruelty to Children thinks that more than 60% of child sexual abuse goes unreported, which is unsurprising when witnesses are being told that they are not credible owing to the very behaviours that arise from their abuse. I am delighted that the Director of Public Prosecutions has made it clear that he intends to act on this, but it will be effective only if it is fully supported by the whole system.
Victims, charities, senior police officers and lawyers all confirm that a barrier to victims coming forward is not only the fear of not being believed, but a potentially traumatic court process. A lot has been done, including the introduction of special measures, but certain very vulnerable witnesses face higher credibility barriers and questioning on much more distressing evidence and are inclined to react negatively or aggressively to intimidating situations. These witnesses respond differently and unpredictably in court situations and it is for these victims that new clause 14 is designed.
Much of this cannot be avoided in an adversarial system and I will be the first to defend the principle of innocent until proven guilty, but if a witness is deeply vulnerable because of previous abuse and therefore unable to give clear evidence, understand the questions asked or remember events, that undermines the quality of justice served and is not in the interests of the witness or the defendant.
New clause 14 seeks to assist by proposing that such cases be assigned to a specialist court where everyone, from the ushers to the judges, has specialist training in witness management and the special measures. Those mechanisms would ensure that the measures would be implemented consistently and to the highest standards for such cases, which need to be handled differently owing to the nature of the evidence and the vulnerability of the witnesses.
This is a partnership programme that does not require primary legislation, which is why this is a probing amendment. I hope that the Minister will acknowledge that the proposed new clause has attracted significant cross-party support, which is why I want him to make a clear commitment to take forward this proposal in a timely manner. I know that he will raise the issue of cost, but I would pre-emptively respond that preventing cases from collapsing is nothing if not a good investment.
In the wake of Savile, the Welsh care homes, Rochdale and ensuing cases of child sexual exploitation, there will be a significant increase in highly sensitive cases in the courts. I want victims to have the confidence to be able to go to court and give evidence. I want them to know that we did everything we could to support the most vulnerable witnesses in the most sensitive cases. It is in the interests of justice for all involved.
Mr Speaker
Order. Before I call the next speaker, I would like to accommodate others as well, if at all possible, and that requires extreme self-discipline.
Paul Murphy (Torfaen) (Lab)
I rise fleetingly to speak in support of my amendment 1, which relates to the payment of fines. It was moved in the other place by my noble friend Lord Touhig and its purpose is to introduced safeguards to ensure that the new financial penalties imposed on people who make late or incomplete fine payments do not plunge them into poverty when they have to pay that second fine. In no way is it a wrecking amendment, but the new system should not jeopardise housing security, the well-being of children or basic household outgoings.
The magistrates court sentencing guidelines say that fines should have
“an equal impact on offenders with different financial circumstances. . .but should not force the offender below a reasonable ‘subsistence’ level.”
I do not want people to be forced to go to payday lenders—I do not believe that that is necessary—and I hope that the companies that the Government propose to engage in this matter take these things into account. Above all else, we have to understand that the reason why some people do not always pay fines is not that they are persistent non-payers, but for other very important reasons, such as debt, a family crisis or illness.
I hope that in the seconds available to the Minister, he will accept my argument and avoid a vote later this evening.
Tim Loughton (East Worthing and Shoreham) (Con)
I rise briefly in support of new clauses 12 and 14, which were put forward so ably by my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) and are supported by the hon. Member for Stockport (Ann Coffey).
A key part of the four-point action plan “Tackling child sexual exploitation”, which was launched in November 2011, was a better court procedure for vulnerable young witnesses. Too many girls, having been abused, have effectively been re-traumatised in the courtroom by a phalanx of defence barristers. For many of them, it has meant that they have not given credible evidence or that the case has not come to court and has collapsed. In many cases, the witnesses run away rather than go through the procedure and appear in court.
The two new clauses, which I hope the Minister will take away and look at favourably, are about ensuring that we get justice in our courts and, in particular, that vulnerable witnesses and victims appear to get the justice they have been denied for so many years. The cases that are coming to court now are a sign of success. They are at least beginning to be taken seriously. We want to ensure that more people come forward and that more perpetrators are nailed. The new clauses will help to achieve that.
Ann Coffey (Stockport) (Lab)
I will speak to new clause 12, which I tabled along with the hon. Member for Oxford West and Abingdon (Nicola Blackwood) and other hon. Members. I agree totally with the comments that she made in arguing for specialist courts.
Under new clause 12, registered intermediaries, which were first introduced in 2004, would be assigned to support all very vulnerable witnesses. Children are very vulnerable witnesses because they do not communicate in the same way as adults. Recent NSPCC research showed that more than 90% of children under 10 do not understand the questions that they are asked in court. It also showed that more than half of young witnesses experience stress symptoms ranging from sleeping and eating problems to self-harming. Children under stress become confused in the witness box.
Registered intermediaries are communication specialists, such as child psychologists, who are trained to help child witnesses to communicate their evidence effectively, both at the police interview and the trial. However, NSPCC figures show that only 2% of young witnesses were assigned a registered intermediary. That has to change.
In view of the tremendous cross-party support for new clauses 12 and 14 today, and in the wake of the Rochdale and Jimmy Savile scandals, I hope that the Minister will feel able to give a positive response to the new clauses tabled by the hon. Member for Oxford West and Abingdon and me that call for specialist courts and registered intermediaries to give the victims of sexual abuse the confidence to come forward so that justice can be done.
John McDonnell
This is the parliamentary equivalent of “Just a Minute”.
I will speak to the amendments in my name, which are amendments 103 and 96 to 98, which relate to clause 25. Clause 25 commences the process of privatising the work of the fines officers of the courts. They are not just bailiffs, but officers who exercise judicial powers. This will be the first time that the House has privatised any office holder who has judicial powers. What do I mean by judicial powers? These officers can make a deduction from a benefits order, make an attachment of earnings order, and order the variation of the length of time over which a fine can be paid.
Clause 25 will privatise the 2,000 jobs of the fines officers and hand the work over to private bailiffs. We have seen the report by Citizens Advice on the role of private bailiffs. They are misrepresenting their powers, using intimidating behaviour, charging fees in excess of what is allowed in law, failing to accept reasonable offers of payment and failing to recognise debtors in vulnerable situations, as required by the national standards for enforcement agents. We are handing over these powers to private bailiffs, who have failed significantly and have intimidated many of our constituents, and yet we know that the existing fines officers are performing well and meeting every target that is set by their management and the Government.
This is a privatisation too far. We have never privatised the roles of judicial officers. This matter needs the consideration of the House. I urge the Government to think again. This measure is just an enabling part of the legislation and I hope that the Government will step back before they implement it.
Damian Green
On the last point, I think it is fair to say that the hon. Member for Hayes and Harlington (John McDonnell) thinks that every privatisation is a privatisation too far. He is wrong. Choosing the sanction or collection method, which is what fines officers do, is not a judicial function. Those are essentially case management decisions and have been performed by administrative staff since 2006.
On amendment 1, we recognise that we must make allowances for the fact that some people find themselves in hardship and find it difficult to pay their debts, but that does not mean that the court should permit those convicted of an offence to ignore the sentences imposed on them. Fines are a criminal sentence, and taxpayers should not be subsidising those who avoid payment for whatever reason.
I have a great deal of sympathy with what was said about new clauses 12 and 14 by my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) and the hon. Member for Stockport (Ann Coffey), who has a distinguished record in this field. The Government and HM Courts Service already do a huge amount to protect victims and witnesses. There is always more we can do and we will take this issue away and consider it.
The Secretary of State for the Home Department (Mrs Theresa May)
I beg to move, That the Bill be now read the Third time.
The Bill has undoubtedly been enhanced by the process of parliamentary scrutiny, so I would like to pay tribute to all right hon. and hon. Members who served on the Bill Committee and to those who spoke on Report, as well as to the Clerks and the Bill teams in my Department and the Ministry of Justice for their advice and support. In particular, I would like to commend the work in Committee of the Minister for Policing and Criminal Justice, my right hon. Friend the Member for Ashford (Damian Green), and the Minister of State, Home Department, my hon. Friend the Member for Taunton Deane (Mr Browne), who is unable to be here this evening owing to the imminent—it might even have happened in the past few hours—arrival of the baby that his partner has been expecting.
The Bill already had many excellent features when it was first introduced in the other place last May, but it now returns to that House with a number of important new additions to which I shall refer. I welcome the broad measure of support for many—indeed, for most, I think it fair to say—of the provisions in the Bill. Over the two days on Report, the Government have, quite properly, been probed on a number of detailed aspects of the Bill, but the approach of the official Opposition, in Committee and again on Report, has been to seek to weigh down the Bill with a litany of requirements to produce impact assessments or to undertake reviews. Of course, we must properly assess the impact of these important measures, but the Government are determined to get on with the task of implementing these much-needed reforms to our justice system, not to procrastinate and delay by undertaking review after review.
I commend the efforts of all those who work with professionalism and dedication in our criminal and civil justice systems, but reforms are undoubtedly needed if we are to continue to see further reductions in crime, including serious and organised crime, and drive further improvements in the efficiency, effectiveness and responsiveness of the police, prosecutors, the courts, and prisons and probation services. Our reforms must be judged, first and foremost, by whether they help us to cut crime and lead to a reduction in harm to our communities and to fewer victims of crime.
For too long, too many organised criminals have managed to stay one step ahead and beyond the reach of law enforcement. That will be the case no longer. The new National Crime Agency will have the capabilities, powers and authority to bring about a step change in our response. It will have a global reach and a local impact. It will lead the fight against the gangs that traffic drugs, people and guns; who abuse and exploit children; and who corrode and subvert our institutions and cost our economy billions of pounds a year. It will not do this alone, but in partnership with others. We are redrawing the policing landscape, with the NCA at the centre. The public will be better protected, as will our national security, for its establishment
The introduction of the new drug-driving offence will bear down on those who put other road users at risk of death and serious injury by taking illegal drugs and driving, and the enhanced protection for householders who honestly act in self-defence, and in the defence of their loved ones, when faced with an intruder in their home will ensure that the criminal justice system treats them as the victim, not as the perpetrator, of a crime. Furthermore, in helping the NCA and its law enforcement partners to tackle serious, organised and complex crime, the Bill provides for an innovative new tool—the deferred prosecution agreement—that will enable more organisations that commit economic and financial crimes to be brought to justice.
Among the important changes made to the Bill in this House is the provision to strengthen the civil recovery regime. As well as seeking to prosecute and convict those who commit crimes for financial gain, we must also ensure that we use all legitimate means to deprive such individuals of their ill-gotten gains wherever they may be. The Bill plugs a significant gap in the Proceeds of Crime Act 2002 that had opened up as a result of the Supreme Court’s judgment in the case of Perry. It cannot be right that someone who commits crimes in this country should be able to escape the reach of our courts by siphoning off the profits of their criminal activity to buy property and other assets in another jurisdiction or to hide away cash in some foreign bank account. The Bill makes good the damage done to the civil recovery regime by the Perry judgment and ensures that, provided there is some connection with the United Kingdom, the reach of our courts continues, as before, to extend worldwide.
We have also made another important change to the 2002 Act. The system of restraint orders under that Act is designed to ensure that someone suspected of profiting from crime cannot squander or squirrel away their assets while the proper legal processes leading to the forfeiture of those assets is under way. However, it cannot be right that those with significant restrained assets can then qualify for publicly funded legal aid, free from any contribution. Those who can afford to pay towards their defence costs should do so, even if their assets are frozen. I am pleased that the House has today agreed to add provisions to the Bill to end this abuse. In implementing the scheme, we will want to be assured about the potential impact on the moneys paid as compensation to victims or to the police and prosecutors to fund further enforcement activity. Our aim should be to ensure that more is received from criminals, rather than simply to redistribute funds around the criminal justice system.
The Bill also includes some important reforms to the system of immigration appeals. There are two drivers for these reforms. The first is to ensure that the limited resources available in this tight financial climate are focused on those immigration decisions, such as a refusal of asylum, that have the more significant impact on the persons affected. The refusal of a family visit visa simply does not fall into that category of seriousness. No other category of visit visa attracts a right of appeal and the costs of the appeals process in such cases simply cannot be justified, particularly when the more timely and cost-effective option is to submit a fresh application.
The second driver underpinning the reforms to the immigration appeals system is to ensure that those who are a threat to our national security are removed from this country as quickly as possible. It simply makes no sense for those whose presence in this country the Home Secretary has personally deemed not to be conducive to the public good should then be able to return to the United Kingdom to challenge the cancellation of their leave, nor should someone who is being deported on national security grounds be able to delay their removal from this country by raising any and all objections on human rights grounds, which must then be determined before the deportation can be effected. Following an amendment in Committee, such a person will now be entitled to an in-country appeal only where they would face a real risk of serious, irreversible harm if their deportation were to go ahead before the appeal had been heard.
Finally on this issue, I thank my hon. Friend the Member for Esher and Walton (Mr Raab) for his implacable resolve that the qualified right to respect for private and family life under article 8 of the European convention on human rights cannot be allowed to stand in the way of the will of Parliament on the deportation of foreign nationals who commit serious offences. Last June the House gave its unanimous support to changes to the immigration rules for this purpose. I have already indicated that I now intend to bring forward primary legislation as soon as parliamentary time allows to establish the correct approach to article 8 in immigration cases. I am determined that the will of Parliament on this issue will prevail.
My hon. Friend has also been assiduous in seeking to strengthen the safeguards in our extradition arrangements. It is vital that we have effective extradition arrangements with our European partners and countries further afield. This country must not become a safe haven for those who commit offences abroad, nor should those who commit crimes here be able to escape justice by fleeing our shores. However, I will be the first to accept that our extradition arrangements must not only be fair, balanced and proportionate, but be seen to be such. That is why I have brought forward a significant change to the arrangements—namely, to introduce a new bar on extradition on grounds of forum, so that wherever possible decisions about where a trial should be held must be made in open court, where they can be challenged and explained. We will continue to examine whether we can make additional changes to the Extradition Act 2003, both to add further safeguards where they are needed and to improve its effective operation. I am determined to bring forward such changes as soon as parliamentary time allows.
Sir Edward Garnier
I want to press the Home Secretary further on that point. When does she think parliamentary time will be allowed? Will it be before the end of this Session, or are we talking about later in the year or just some time in the future? [Laughter.]
Mrs May
I think the chances of it being before the end of this Session are pretty slim—the Leader of the House’s reaction from a sedentary position probably indicated that—but it is certainly my intention that the changes should be brought forward in the next Session, in suitable legislation. One further point on extradition is that I believe our extradition treaty with the United States is fair and balanced, and I think the changes being put through will increase public confidence in the system.
Lastly, I want to mention briefly three further matters before the Bill returns to the other place. These relate to areas of disagreement between the two Houses, which I hope can be quickly resolved. When the Bill was in the other place, their lordships removed the power to confer counter-terrorism functions on the National Crime Agency by order, and they also added unnecessary and unworkable proposals in respect of the adjudication of complaints against bailiffs and the management of female offenders. These were removed from the Bill in Committee. Last Wednesday this House voted to restore what was originally clause 2 and voted—again, by a wide margin—against the Lords amendment on bailiffs.
I would urge the other place to respect the views of the elected House and, when it comes to consider these Commons amendments in a week’s time, to agree to them all so that the Bill can be speedily enacted and we can get on with the business of implementing the much-needed reforms that it contains. The Bill, of course, now goes back to the other place with amendments on press conduct, and I am pleased that these have now been agreed by those on both sides of the House. On that final note, I commend the Bill to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
So, at this late hour, we finally reach the Third Reading of the Crime and Courts Bill and gather to bid it farewell and send it on its way back to the other place. I have to say that it is lovely to see the Home Secretary in her place. We missed her last week—at least on this side of the House—and now that she is here, perhaps she would care to intervene and tell us what her alcohol pricing policy is. We would love to hear it, because unfortunately, her crime prevention Minister, the Minister of State, Home Department, the hon. Member for Taunton Deane (Mr Browne), struggled to tell us what it was. He took the flak for her, and given the news about his new arrival, she really does owe him one. She needs to ensure that she pays that debt.
Opposition Members owe thanks to my right hon. Friend the Member for Delyn (Mr Hanson), my hon. Friends the Members for Walthamstow (Stella Creasy), for Darlington (Jenny Chapman), and for Middlesbrough (Andy McDonald), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), my hon. Friends the Members for Walsall South (Valerie Vaz), for Birmingham, Selly Oak (Steve McCabe) and for Sedgefield (Phil Wilson), all of whom have led our efforts on the Bill.
We support the Bill overall, and we support many of its key measures and objectives. We clearly support the Leveson measures that we have discussed extensively this afternoon, and the aims to strengthen the fight against organised crime. We also support the efforts to increase judicial diversity, although we wish that the Government could have done more in that regard, and we support the action on drug-driving.
The Home Secretary has done an admirable job of attempting to create a theme in what many Members have repeatedly described as a Christmas tree of a Bill that has had an increasing number of different things attached to it during its passage through the House. That leaves the right hon. Lady and me to take it in turns to play the fairy on the top in the debate this evening.
Although we support the principles behind many of the key measures, the detailed debates have revealed considerable weaknesses in the Government’s implementation plans and a chaotic approach to some serious aspects of the fight against crime and terrorism. The Home Secretary made great play of the issues regarding the National Crime Agency, which, as she knows, will simply pick up much of the valuable work now being done by the Serious Organised Crime Agency. However, the Bill will leave this House with the Government still having failed to reach agreement on how serious organised crime will be dealt with in Northern Ireland. The Bill will abolish SOCA, which has done a considerable amount of work on human trafficking, drug smuggling and other organised crime in Northern Ireland, yet the National Crime Agency will be unable to operate there or to continue any of that work because the Government have failed to reach agreement on that matter. We have no idea how long it will take to sort that out, or how that work will be done in the meantime.
Jim Shannon (Strangford) (DUP)
It is a matter of concern that we read in the papers back home today that someone who is involved in crime in south Armagh has been able to launder some £85 million through various banks. That is an example of an issue that cannot be addressed, and it is down to the intransigence of Sinn Fein at this time.
Yvette Cooper
There are some very serious gaps as a result of the Bill. The Government chose the timing of its passing. I think it was nearly two years ago that the Home Secretary announced that she wanted to replace SOCA with the NCA, yet they have failed to reach agreement on the way in which the NCA should operate in Northern Ireland. That is a matter of concern. As a result of the joint work between SOCA and the Police Service of Northern Ireland, more than £13 million of drugs were seized, 33 potential victims of human trafficking were rescued, and more than £4 million of criminal assets and 23 million counterfeit and smuggled cigarettes were seized. There were also 23 criminal convictions for serious environmental offences.
That was all as a result of the important joint work being done by the PSNI and SOCA. As of tonight, however, we do not know whether any of that work will continue, or how and when a solution will be reached. And if that was not bad enough, there is no agreement on handling the overseas proceeds of crime with Northern Ireland either. Again, the Home Secretary made great play of the importance of overseas and global reach. Criminals in England, Scotland and Wales, however, who have assets abroad will rightly find under this Bill that they can be seized by the courts, but because of the Government’s failure to reach agreement, criminals in Northern Ireland will be able to keep those assets abroad untouched. Again, we have no idea when that will be sorted out. The Home Secretary chose the timetable, yet she failed to get agreement and has created this gap.
On terrorism, too, the Home Secretary’s approach is chaotic. After the Government were defeated in the other place on their plans on counter-terror and the National Crime Agency, she told the House on Second Reading that she would “listen and reflect” on the concerns of the experts, including the former Metropolitan Police Commissioners in the other place, but she has done nothing of the sort. Instead, at the last minute, she has simply reinstated an order-making power to deal with a major change to counter-terror action in Britain, yet with no reason given in her Third Reading speech when she had the opportunity to do so. She has told us repeatedly that she has not made a decision whether or not to transfer the powers from the Met to the NCA. In that case, why put an order-making power in the Bill? We can guarantee that there will be another Christmas tree Bill coming from the Home Office, if not many more, which will give her the opportunity to do so and to have a proper debate after she has taken a decision, when she can set out for Parliament the grounds for her decision rather than trying to pre-empt serious debate—either in this place, or in the other place—despite the serious concerns raised with her. I am sure that the other place will want to look at this again.
We have had other concerns, such as the watering down of protection against abuse by bailiffs; ignoring the concerns of the Lords; removing the obligation inserted by the other place to address problems for women offenders; the lack of implementation plans for drug-driving; removing immigration visitor appeals even though a high proportion of decisions are wrong in the first place; and the Government’s failure to bring in the stronger immigration enforcement powers we called for. We are concerned that the Government were late in bringing forward the proposals on a forum bar without consultation. I hope that the Home Secretary has got the details of this right. Clearly, it is extremely complex, but given the importance of extradition issues, it is unfortunate that she still proposes to pull out of the European arrest warrant.
There are some very important issues in the Bill, and we will support it. The Government have, however, wrongly ditched some of the improvements that the noble Lords made, and I hope they will be made to think again. We will support the Bill tonight; we hope the Lords will improve it; and we very much hope that the Government will sort out the serious gaps and failings in the detail and implementation that these debates have exposed.
Sir Edward Garnier
I congratulate all those who have had rather more to do with this Bill than I have on getting to this point, and I hope that it will have fair passage in the other place next week. I am particularly pleased that, after a great deal of to-ing and fro-ing, the Bill still contains clause 32 on deferred prosecution agreements. I have a bit of a one-track mind on the subject, but I suspect that this piece of the Bill is going to earn, rather than cost, the Treasury some money—acting as a criminal justice weapon that will be to the advantage of the Chancellor. I hope that as he thinks about this Wednesday, he will remember clause 32 of this Bill.
I urge my right hon. Friend the Home Secretary—and the Justice Secretary, who is temporarily absent—to get on with the underlying secondary legislation, Crown court rules and so forth, which will allow the deferred prosecution agreements to be implemented. I hope that we can prosecute the first deferred prosecution agreement before the end of this year and, if not before Christmas, very shortly after it. It will be a valuable addition to our criminal justice armoury.
I heard what my right hon. Friend the Home Secretary said about further consideration of extradition matters. It was, if I may say so, pretty dreadful that we did not have an opportunity to discuss any aspect of extradition this evening. This was an entirely self-inflicted wound, and I suspect that with a little more flexibility it could have been achieved—but there we are. I know that my right hon. Friend has said that something will be done about it later in the year. I am sure she will be as good as her word. I shall certainly be watching to see that she is.
Paul Goggins (Wythenshawe and Sale East) (Lab)
The Home Secretary began by noting how much the Bill had improved since Second Reading. As one who has sat through all the Bill’s stages so far, I must admit that I found it difficult to remember what was in it, given the huge range of other issues with which we were confronted at a very late stage. However, it is indeed a very important Bill, and I compliment those on both Front Benches on the assiduity with which they have debated the issues and led the argument, both in Committee and in the Chamber.
The National Crime Agency is now with us. I have never accepted the Home Secretary’s premise that it had to be introduced because what had gone before had failed—I think that the Serious Organised Crime Agency was an excellent organisation—but if the Home Secretary has judged that the NCA can take SOCA’s work forward, it has my full support. I do not quibble with that for a minute.
I am pleased that, in Committee and in other debates, we were given clear assurances that the Child Exploitation and Online Protection Centre would remain as an independent force for good in our society. It is a global leader, and I am delighted that Ministers have ensured that its reputation and its work will be protected.
My right hon. Friend the Member for Belfast North (Mr Dodds) mentioned the difficulty involving the legislative consent motion. We debated that extensively last Wednesday. It is deeply regrettable that the National Crime Agency will not be able to operate fully in Northern Ireland, and I urge the Home Secretary and all Ministers who are concerned with the issue to do everything that they can. I urge them to negotiate, to discuss the issue in detail, and to bring Northern Ireland into line with the rest of the United Kingdom in this regard. As my right hon. Friend said, it is essential for the same rule of law to operate there, and for the same resources to be applied to the combating of organised crime. I know that the Home Secretary shares that view, and I hope that she will be able to secure an agreement soon so that all those additional amendments can be implemented and the NCA can work properly in Northern Ireland.
Mr Nigel Dodds (Belfast North) (DUP)
Because of his experience in Northern Ireland, the right hon. Gentleman is well aware of the importance of establishing measures for it. He has appealed to the Home Secretary to do what she can. Will he also appeal to the parties in Northern Ireland that have blocked such action, namely Sinn Fein and the Social Democratic and Labour party? The Democratic Unionist party, the Ulster Unionists and the Alliance party are strongly in favour of it. I am sure that the right hon. Gentleman will widen his appeal still further.
Paul Goggins
I am happy to agree with my right hon. Friend. That is a very important point. Let me put a rhetorical question to those who are not in the Chamber tonight, but who represent all the parties in Northern Ireland. SOCA was able to sit alongside the Police Service of Northern Ireland from 2006 onwards, and did an excellent job. Why should that work not be continued to ensure that those whose organised criminality poses a threat are dealt with, and dealt with properly?
Mark Durkan
My right hon. Friend will recall from the debate last week that some of us made clear that we had drawn attention for a long time to problems about which no one in the Northern Ireland Office, the Ministry of Justice or anywhere else had talked to us. Since people have talked to us, the negotiations have made progress. Let me also say that, unlike Sinn Fein, my party has never had any problem with the provisions relating to asset recovery. We want asset recovery to go the distance.
Paul Goggins
I warmly welcome what my hon. Friend has said. He will recall that last week I intervened on his speech to observe that it was strange that the Minister had not leapt to his feet and embarked on negotiations with him there and then, because he was clearly willing to discuss this matter. I urge the Home Secretary, in good faith, to talk to the parties in Northern Ireland and work with Northern Ireland Ministers to ensure that legislative consent is secured as soon as possible.
We discussed community orders at some length in Committee. I thank the Minister for Policing and Criminal Justice, who, along with the Under-Secretary of State for Justice, the hon. Member for Kenilworth and Southam (Jeremy Wright), has had constructive discussions with the Restorative Justice Council, with me and with others about the merits of moving restorative justice to the mainstream of the criminal justice system. I know that the Minister shares that aim and aspiration, and I welcome amendment 110, which the Government tabled last Wednesday. We did not have time to debate it, but the substance is there, and that is important. I thank the Minister for the attention that he paid to the issue.
I hope that the amendment relating to women offenders, which was cruelly removed from the Bill in Committee, will be reinserted when the Bill returns to the House of Lords, because I think it important to focus on the needs of women offenders. The aim of working with any offender is to try to ensure that they do not reoffend and that they can re-establish their lives in a proper way. The Lords amendment was right to focus attention on the needs of women offenders and if that is re-inserted into the Bill, I urge Ministers to accept it as a positive move that they can work with.
May I also thank the Ministers who have responded to the debates on child neglect? Again, we did not have time to debate an amendment on that on Report, but the Minister for Policing and Criminal Justice made positive assurances about continuing to discuss the matter. The law is very outdated and it is important that we try to modernise it in a way that works and protects our children. Again, I pay tribute to him for what he has done on that.
Finally, I think that the Home Secretary is wrong to bring the super-affirmative order proposal back. I say to her that the way in which this has been done is not acceptable. She told us on Second Reading that she had not made her mind up, the Minister in Committee never raised it there, except obliquely, and yet right at the end it is brought back in. There is a debate about who should lead on counter-terrorism, but I find it odd—it is nice to be able to say this to her personally, as I said it the other day when she was not here—that this Home Secretary told us that to extend pre-charge detention beyond 14 days and to get the enhanced terrorism prevention and investigation measures we had to have fresh primary legislation, but to change the lead responsibility for counter-terrorism we need only secondary legislation. I ask her to reflect on that again. I hope that their lordships will take that measure out of the Bill again, and I urge her to think carefully before she moves to try to put it in.
Let me end by saying to the Home Secretary, to her colleagues and certainly to my Front-Bench colleagues that they have done a fine job in leading this difficult and complex Bill to the conclusion that we have reached tonight.
Mark Reckless (Rochester and Strood) (Con)
The Home Secretary introduced her remarks by referring to how the Bill had been enhanced by parliamentary scrutiny. I have no doubt that the Public Bill Committee did good work, but as a description of the 20 minutes we have had in today’s debate to consider all the remaining non-Leveson clauses, “enhanced by parliamentary scrutiny” is probably not the appropriate one.
I welcome what I see as the core of this Bill: the creation of the National Crime Agency. The shadow Home Secretary cavils in respect of how it is not going to be greatly different from the Serious Organised Crime Agency, but surely the key difference is that the NCA will be able to task police forces with carrying out necessary policing activities in the national interest. SOCA has not had that power and has been reliant on persuasion to get co-operation from local forces, and the creation of the NCA is the other side of the coin of the election of police and crime commissioners. We are making local and democratic what properly should be local and democratic while ensuring the necessary central control over national policing, which we have not really had in this country previously.
I very much regret the attachment to this Bill of what I consider to be, in all prospects, a press law. An organisation, Hacked Off, seems to have taken over both the Liberal Democrat and the Labour party positions on this issue. In response to an apparent allegation that the Labour party was the political wing of Hacked Off, the deputy leader of the Labour party did not deny it; she merely gave great congratulations to Hacked Off on what it had achieved. I am concerned that what it has achieved is eliding two different groups: the genuine victims of the press, such as the Dowler family, and a group of celebrities who would like to engage with the press on their own terms. I fear that what is coming out of today’s proceedings will benefit that latter group at least as much as the former. Some older Members of the House may recall the days of the industrial relations court in the early 1970s. When trade unions did not co-operate with that body, it failed in its objectives. That could, and I hope will, also happen to the royal charter, with its statutory underpinning that we are pushing through today.
The problem with the royal charter is that in many ways it is worse than a statute, because we cannot actually scrutinise it; it is just Ministers and senior people in the Opposition meeting behind closed doors to cook up these instructions to the press, and next to no scrutiny is provided in this House. For instance, article 11.7 of the royal charter states that the board
“shall have the right to request further reasonable sums from the Exchequer. In response to such a request, the Exchequer shall grant such sums to the Recognition Panel as it considers necessary”.
It could be argued that that was a disbursement of public funds without scrutiny from this House.
Another area of concern to me in the charter can be found in paragraph 11 of schedule 3, which states:
“The Board should have the power (but not necessarily the duty)”—
whatever that means—
“to hear complaints…from a third party seeking to ensure accuracy of published information.”
The schedule goes on to say:
“Although remedies are essentially about correcting the record for individuals, the power to direct a correction and an apology must apply equally in relation to…matters of fact where there is no single identifiable individual who has been affected.”
Instead of the interplay of ideas between different journalists and individuals competing to have their material published and heard in the public sphere, a regulator will determine the meaning of truth—a Ministry of Truth, as it were.
People will have to submit to this process, and if they do not there will be exemplary damages or they will have to pay the costs of anyone who wants to take up a case against them, however ill-founded it might be. We are not going to the right place with this royal charter; it is not where we should be heading.
It is also extraordinarily unclear how the charter will apply in the blogosphere and to the web. The definition of relevant publisher almost suggests that one particular blog, that of Guido Fawkes, has been singled out to try to ensure that it is caught by the terms of the charter. Let us consider the statutory underpinning. Public bodies are exempted under paragraph 6 of new schedule 5, and apparently a public body
“means a person or body whose functions are of a public nature.”
I hope that my blog will be exempt and I will not have to answer to the Home Secretary for any transgressions I make within that sphere. The final issue in considering the charter is where it will go next. We are setting it up without any idea of its final destination.
One thing we failed to consider in today’s debate was the excellent new clause tabled by my hon. Friend the Member for Esher and Walton (Mr Raab). The Home Secretary referred to the respect in which she holds my hon. Friend, but judging by the letter she issued earlier today he would have caused the release on bail and the non-deportation of 4,000 people a year. We were not told that his advice has been signed off by three eminent QCs, whereas the record of the Home Secretary’s officials and, in particular, her lawyers in this area is, to put it mildly, less than stellar.
We heard yet again from the Home Secretary about the supposed binding rule 39 injunctions when, as the Abu Hamza case showed, they are merely indications to the Government of the European Court’s view according to its rules of what might be in the interests of justice. They are not binding on the Court and it is the Home Secretary who decides that these people will not be deported. It is as if she has not even read the second leg of article 8, under which she is able to interfere in the operation of the right to a private life in the interests of national security, public safety and the prevention of crime. What else could be covered by a rule saying, “You cannot consider this”, when a crime has been so serious that the foreign national has been imprisoned for more than a year? Those people should be sent back and if we had agreed to the new clause tabled by my hon. Friend the Member for Esher and Walton, they would be sent back. Because we ran out of time, and because the Home Secretary is not prepared to take on his far better ideas, the situation will, unfortunately, continue.
Richard Drax
I want to speak very briefly on the royal charter, if I may do so again. As a former journalist of some 17 years’ experience, I am extremely concerned about where the House is going. What has happened today has been described by those outside as a bit of a love-in; it was self-congratulatory. When all the parties agree, I am pretty concerned that something is wrong. In this case, to use a military analogy, we have dragged a tank out with nothing on it—just the frame. We have parked it on the press’s lawn and said, “Here’s our latest toy, our latest weapon, that we are going to use to control you.” What frightens me about this toy is that inevitably, now that the royal charter is underpinned by statute—whatever people say, however they disguise it, that is the fact; it is—politicians in the future will not be able to resist the temptation to slap on an extra gun, a mortar tube, because they need it to control the press because the press have done something that does not please the House.
This, for me, is a red line, and my biggest fear. I have spoken to many of the local press down in my constituency and already, because of the Data Protection Act and other law, it is a nightmare for them to get hold of the facts. When I was a journalist, the police, the fire brigade and others used to tell us what was going on because it was in the public interest. Local journalists now are finding it harder and harder to get information from local authorities, the police or the fire brigade—information that is in the public interest. Freedom of information requests, which have been mentioned, have increased because journalists have to use that method to get information that is in the public interest and which this place, on occasions, is trying to hide. That cannot be right and it certainly cannot be in our interest in the future.
I do not believe the House will divide on Third Reading, but I leave it with this thought. I fear that this tank will rumble forward in the years ahead. As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, the next Government—for example, the Opposition—can get rid of this and bring in their own legislation anyway. What we are doing is purely notional, nothing more.
I conclude on this cautionary note: what we are doing affects the freedom of our country and the freedom of our press. As the final irony, I understand from a source—perhaps the Minister who sums up can reassure me that this is not the case—that former MPs who have been disgraced in the expenses scandal could stand for the new regulatory body. If that is the case, what an irony it would be.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
Under-occupancy Penalty (Nottingham)
(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lilian Greenwood (Nottingham South) (Lab)
“Nowhere to go”—that is how today’s Nottingham Post describes the crisis facing thousands of social tenants in our city. Why? Because two weeks today the Government are set to play the cruellest joke on more than 6,000 of our city’s poorest households. On the same day as they deliver a huge tax cut to the UK’s highest earners, they plan to take £4.23 million from the pockets of those people in our city who are least able to afford it. Whether we call it the bedroom tax, the under-occupancy penalty or the spare-room subsidy, it is a heartless policy that, the Cambridge Centre for Housing and Planning Research concluded, will create “severe hardship” for affected households.
Let us look at the households affected. Two thirds of them include someone who is disabled, one third are families with children, more than a fifth are working households on low wages, and many of them do not have a spare room at all. They include families whose children have their own rooms. Let us face it, some bedrooms are so small that they are barely big enough for one child, let alone two. Many families do not think it is fair to expect their teenage son or daughter to share with a toddler, even if they are the same sex, and children’s education can suffer if they do not have somewhere quiet to study.
So-called spare bedrooms are also needed where couples sleep separately, especially where a husband or wife cares for their disabled partner and desperately needs a decent night’s sleep. Some are used to store disability-related equipment. Where parents are separated, these bedrooms are needed for when their children visit at weekends. Are the Government really saying that people who live in a council or housing association home cannot have a spare room for their children or grandchildren to sleep in when they come to visit? It seems so. People who have lived in the same house for decades and spent time and money making it their home all face the same impossible situation: move out or find the extra money.
For people in Nottingham, that means on average an extra £11 a week if they have one room more than they are allowed, or £22 a week if they have two rooms. That may not sound like very much to the Minister, but for someone on jobseeker’s allowance of £71 a week, it is the difference between eating or going hungry, turning on the heating or sitting in the cold, borrowing money to pay your rent or going into arrears. This morning on Radio Nottingham, a local Tory Member of Parliament did not know what the fuss was about. She had explained to her constituent that she should simply move house. But of course, it is not that easy.
Jim Shannon (Strangford) (DUP)
The bedroom tax and the under-occupancy terminology will affect people throughout the United Kingdom. In Northern Ireland, we will be £10 million shy in the money available, and 32,000 households will be affected. Is not one of the greatest discrepancies of the whole process that there are not the smaller occupancy houses to move to, so all these people will have to find the extra money?
Lilian Greenwood
The hon. Gentleman is absolutely right, and I shall come to that point.
In Nottingham, 6,103 people face the bedroom tax in two weeks’ time. The key website is Homelink, which advertises properties for the arm’s length management organisation, Nottingham City Homes, and most of the local housing associations. This week, 21 one-bedroom properties and 14 two-bedroom properties are available. So even if they were all allocated to households that are currently under-occupying, that would help only 35 households—fewer than 1% of those affected. That is before one considers the 2,269 families in Nottingham waiting for a two-bedroom property, or the 7,333 individuals or couples waiting for a one-bedroom property.
In my constituency, 1,423 households are affected by the bedroom tax. In the whole of the last 12 months only 175 of Nottingham City Homes’ one or two-bedroom properties became available to let in Nottingham South, and on average people had waited 78 weeks on the list. Worse still, evidence from the local homelessness charity, Framework, reveals particular problems for tenants who are in arrears. They have been told that even if they have repayment plans in place, they cannot be considered for a move. As Jon Leighton, who helps co-ordinate the crisis team for Framework, says:
“Essentially they are stuck. Pay the additional charge or get into more arrears. And given this is the choice, the likely outcome is eviction proceedings.”
The Minister may argue that social tenants should move into the private sector. How will that cut the housing benefit bill when, according to figures produced by the National Housing Federation, the average social rent for a two-bedroom property in Nottingham is £64.02, but the average private rent for a one-bedroom property, into which a household occupying a two-bedroom social home might be expected to downsize, is £88.85? There is also a question about whether landlords in the private sector will be willing to take on tenants on housing benefit, given their significant concerns about the risks posed by the introduction of direct payments under universal credit.
The truth is that most people cannot avoid paying the bedroom tax, and the Government know it. Their 2012 impact assessment is clear:
“Estimates of Housing Benefit savings are based on the current profile of tenants in the social rented sector, with little tenant mobility assumed. If a significant number of tenants wished to move, this would reduce direct savings and place extra demands on social landlords”.
It is clear that the burden of cutting public spending on housing benefit relies specifically on the inability of tenants to move; balancing the books on the backs of poor and vulnerable people.
Of course, the Minister might claim that this is not about saving money, but about making better use of our social housing stock. Action to tackle overcrowding is important, which is why the Labour Government published good practice guidance on managing under-occupation and, in 2007, allocated funding to 38 pathfinder areas to devise solutions to address overcrowding and focus on under-occupation.
Last year Nottingham city council received a grant of £75,000 to help tackle overcrowding and under-occupation through its “Right Size” project, a modest amount that it used to good effect. It worked with people to look at their options, provided intensive support to help them overcome the hurdles to moving home and effectively held tenants’ hands through the process, in some cases covering removal costs. The project was effective, and between 1 April 2012 and 28 April 2013, 81 properties were freed up for families. However, last Friday, after a prolonged period of uncertainty, the council finally received an e-mail from the Department for Communities and Local Government confirming that:
“Ministers have now decided not to make any further special grants to councils specifically to tackle under-occupation”
Now we know that this is not about addressing under-occupation or overcrowding; it is about cutting public spending, taking money from the very households that are least able to bear the burden. It is not just unfair; it is immoral.
Chris Leslie (Nottingham East) (Lab/Co-op)
My hon. Friend is making her case exceptionally well. In my constituency, which neighbours hers, the cases that really pull at the heart strings bring the issue most to life, particularly when they involve a disabled person in the household. The majority of cases seem to be like that. I think of the young man who had serious problems with schizophrenia. He was just getting into independent living and needed an extra bedroom so that his father could occasionally stay overnight in order to reassure him when things got particularly difficult. Now, because of the bedroom tax, his whole quest for independent living has been thwarted, and he will have to move back in with his parents. It is the individual cases that illustrate just how heartless and callous the policy is.
Lilian Greenwood
My hon. Friend is exactly right. I wonder how Government Members sleep at night after what they have done.
The Minister might claim that the Government are protecting the most vulnerable, such as the individual my hon. Friend has just mentioned. Ministers have been saying that for months. It was only continued pressure from the Opposition Benches that forced them to concede that the Prime Minister’s assurances about protection for disabled children, foster parents and members of the armed forces were completely hollow and that exemptions needed to be put in place.
Unfortunately, to suggest that discretionary housing payment will provide the answer is disingenuous. Nationally, the DHP allocated for 2014-15 makes up less than 6% of the £2.2 billion in planned housing benefit cuts for the same year, and the Government have failed to provide any assurances on the level of DHP funding as part of the next spending review. The National Audit Office is critical of how the level of DHP funding has been determined, stating that
“it is not clear how the overall level of funding has been determined or whether it is likely to be sufficient to tackle the effects of reforms.”
Sheila Gilmore (Edinburgh East) (Lab)
My hon. Friend is making a powerful case. Has her council, like mine, considered trying to top up the DHP fund so that it can help people? Is this not simply a central Government cut being imposed on the shoulders of local government, because topping up the fund means a cut for councils? Also, the administration involved in the whole process is huge, and that is another cost for local government.
Lilian Greenwood
My hon. Friend is exactly right. Of course, this comes on top of huge cuts to local government.
Nottingham city council was allocated £696,000 to support tenants affected by the bedroom tax in the coming year. That amount will be reduced to take account of the U-turn on foster carers and armed forces personnel, and tenants in Nottingham face a shortfall of £4.23 million. I do not know whether it will be enough to protect the disabled tenants whose homes have had significant adaptations, but it certainly will not be enough to help all those with disabilities, for whom the prospect of finding an extra £11 or £22 a week is simply terrifying. Of course, when local authorities target DHP they will have to make impossible choices on whether to protect disabled people or the tenants most at risk of homelessness. The Government do not know how many people will be left short, either. When I asked the Minister how many households in Nottingham would be affected, including households with children, the answer was stark: he did not hold the information. So how can he possibly come to this House and offer assurances that the vulnerable will be protected?
As a responsible landlord, Nottingham City Homes is taking action to help its tenants to cope with benefit changes. It has a welfare reform action plan and has undertaken a range of activities to support tenants, but as chief executive Nick Murphy acknowledges,
“The combined effect of the bedroom tax, reductions in council tax benefit, changes to disability benefits and direct payment under Universal Credit are creating confusion and uncertainty. At Nottingham City Homes we are doing what we can to help with information, advice and support but many of the poorest people in Nottingham are going to get poorer as a result of these changes.”
Of course, we should never forget that behind the statistics and the numbers are real people: people whose voices and stories deserve to be heard; people such as my constituent Paulette Williams, who lives in Radford. She has rented her three-bedroom house from Nottingham Community Housing Association for the past 21 years. She had offered to downsize some years ago when her youngest daughter left home but was told that she did not qualify for a transfer. Last year, Paulette had to take ill-health retirement. She has not been offered a suitable small property and does not know how she is going to make up the shortfall from her benefits. I am interested to know how the Minister thinks a 57-year-old woman with serious health problems, including a permanent incapacity, should try to do so.
According to the Government, pensioners are not affected by these changes. Try telling that to my constituent Pat Lister and her husband, who live in Wilford. Pat’s son has serious mental health problems and has battled heroin addiction and homelessness. He has achieved some stability since he got a two-bedroom council flat. He has been in the same flat since 1996. Now all that is at risk. Pat and her husband want to support their son but cannot afford to pay the bedroom tax from their pension. Pat told me:
“We have reached the end of the line. We are retired and support him wherever we can, but this additional burden will place his social housing home out of reach and he must leave…And the wretched cycle of homelessness will begin again. For our vulnerable son, and nameless others like him.”
I called for this debate after I had sat in my surgery facing Paulette, Pat, and many others whom this Government are abandoning to a life below the breadline.
I have focused on the impact of the bedroom tax, but the situation is even bleaker. On the same day that tenants face a shortfall in their housing benefit, they, along with low-income households in the private rented sector, face a cut in the help that they get with their council tax. According to Nottingham city council, the shortfall for the scheme is £6.2 million in 2013-14—a reduction of nearly 18% in funding as a result of central Government cuts. This year 19,000 people in Nottingham will have to pay at least 8.5% of their council tax bill. In 2014-15, when transitional protection expires, that could rise to 20% or more. The situation is set to get worse, not better. Rents and prices are currently rising by more than 2.5%. With benefits capped at 1%, the poorest households will find their incomes squeezed even further over the coming months.
This chaotic policy is wreaking havoc on the lives of many of my constituents. I hope that I have convinced the Minister of the disastrous effect that it is having in Nottingham, as it is in cities across the country. He should take this opportunity to do the right thing and scrap this wretched bedroom tax.
The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this debate. She made no reference whatsoever to the context in 2010 in which an incoming Government had to make decisions or to the fact that the previous Government spent £150 billion more in their final year in office than they had coming in. She knows perfectly well—she did not mention this, but she knows it—that any incoming Government, including an incoming Labour Government, would have sought to take tens of billions of pounds out of public spending. She also knows that out of public spending there are two big things on which Governments spend money. The first is public sector pay, on which the Opposition were very slow to agree with us—they have now finally agreed—that restraint was required. The second is what is loosely called welfare—benefits, tax credits and pensions. It is completely implausible that an incoming Labour Government would not have cut social security spending. This is not a debate about whether social security spending has to be cut back; it is about how.
Lilian Greenwood
Will the Minister explain why his Government will deliver a tax cut at the beginning of April for the highest earners in the UK? Individual millionaires will get more than £100,000 each. Why is he choosing to balance the books on the backs of poor people in my city?
Steve Webb
I would be happy to respond to the hon. Lady’s question, although I was trying to keep to the subject of her debate. The higher rate of income tax in April will be 45%. For 13 years under the previous Labour Government the highest rate of income tax was not 45% but 40%. If she thinks that a 45% rate of income tax is immoral, why was a 40% rate acceptable for 13 years under the previous Labour Government? In addition, higher earners will pay a bigger share of tax as a result of a combination of measures. The hon. Lady has chosen to mention one, but if she takes the capital gains tax increases and the cuts in pension tax relief into consideration, she will see that overall we are taking more from higher earners than the previous Government did.
Let me focus on the specific issues that the hon. Lady raised. A number of voices were silent in her remarks. She used the word “fairness” and seemed to think that the suggestion that benefits should, broadly speaking, support a household size that a family needs rather than spare rooms was immoral, but that had been the case for private sector tenants for a long time under Labour party policy. The local housing allowance scheme introduced by the previous Government was, broadly speaking, for benefits to cover the household size needed. Why is it immoral to ask social tenants to pay the cost of a spare room, but not private sector tenants?
Steve Webb
I am sure that the hon. Gentleman will forgive me if I continue to respond to the points raised by the hon. Member for Nottingham South.
Why is it acceptable to restrict private sector tenants on a low income, but okay to allow social tenants to have a spare room?
Steve Webb
I hope that the House will forgive me, but I want to respond to the points raised by the hon. Member for Nottingham South and have limited time to do so.
There is an issue of fairness as between private sector tenants on a low income and social tenants on a low income, but there is also a second issue of fairness. Our estimates for Nottingham are ballpark figures—the hon. Lady is right to say that we do not have exact figures for her constituency, but we do have regional figures and we can estimate overcrowding—but we estimate that of the order of 2,000 or so households there are overcrowded.
Lilian Greenwood
I thank the Minister for giving way. I specifically asked Nottingham to provide me with the figure for the number of people who face overcrowding and it is just short of 630 households, compared with 6,103 households that face the bedroom tax.
Steve Webb
One figure over which there is no dispute is the number of people on the housing waiting list in Nottingham, which is 12,000. They are desperate for a family home or for family accommodation, whereas 6,000 households have spare bedrooms.
Steve Webb
No. There is an issue about fairness between social and private tenants and between those who face overcrowding and are desperate for a home and those who have spare rooms, and about fairness for those on the waiting list.
The hon. Member for Nottingham South raised a number of specific issues to which I want to respond. She asked whether people who will find themselves in the private sector will be able to rent if they are on housing benefit. The number of people in the private sector on local housing allowance recently passed the million mark, so more than a million people in the private sector are getting housing benefit. The suggestion that landlords will not rent to people on housing benefit is therefore demonstrably false.
Lilian Greenwood
I would be interested to hear whether the Minister ever speaks to anybody in Nottingham, because the experience of social tenants who are finding it difficult to move into the private sector was provided to me by the local homelessness charity, Framework, which has a pretty good idea of what is happening in our city.
Steve Webb
All I can say to the hon. Lady is that there are more than 1 million people on housing benefit in the private rented sector. There is not a little island called Nottingham where those people do not exist. Across the United Kingdom, private sector landlords are renting to people on housing benefit.
The hon. Lady mentioned Nottingham City Homes. I welcome some of the measures that it is taking to assist people who are affected by this measure. For example, it has produced a lodger guide so that any tenant who wishes to take in a lodger has information about how to do so. That will not be the answer for everyone, but it will be the answer for some. It will mean that there is better use of the scarce resource that is the empty or unused bedroom in social housing.
The hon. Lady mentioned HomeSwapper, a mutual exchange website that Nottingham City Homes is encouraging people to refer to. That is very welcome because it tries to make better use of the valuable social housing that we have. Nottingham City Homes ran what I think it called a speed-dating event to help match people who want to move to smaller properties with those who want to move to larger homes. It is true that this measure saves money, but it also leads us to make better use of the very underutilised resource of our social housing stock. As these initiatives demonstrate, there are some people living in overcrowded accommodation, whose voice was silent in the hon. Lady’s speech, and some people who are living in accommodation with spare rooms.
There is an issue with what one might loosely call “hard cases”. Those include people for whom a spare bedroom is not spare, but is very important. The hon. Lady dismissed in a very new Labour sort of way the £700,000 that is being given to Nottingham next year in discretionary housing payments, as if it is a drop in the ocean or a trivial sum of money. That money is being given to local authorities so that they can assist people on a case-by-case basis who approach them and say that there is a particular reason why the measure would be unfair or adverse in their case.
Steve Webb
I hope that the hon. Gentleman will forgive me if I try to respond to the hon. Lady.
It is said that the money will help only a relatively small proportion of people. That is entirely true because it is for exceptional cases. The basic principle is that if people have spare bedrooms, they should either put somebody in them or pay for them, perhaps by earning more if they are able to.
It is important to say that the price we are asking for a spare bedroom is just under £2 a day in Nottingham. That is what we are asking private renters on a low income to contribute anyway.
Steve Webb
No.
We are asking private renters in Nottingham and elsewhere to pay just under £2 a day for a spare room. Obviously, if somebody is on benefit, that it not easy. However, for those who want to retain their spare room, that is the contribution that we are asking. Many people on a low income who are renting in the private sector pay that money.
There were scare stories about mass evictions and homelessness before the limits came in for the private rented sector, but those things have not happened. Just the sort of alarmist language that the hon. Lady used about mass evictions and the rest of it was used before the caps came in for the private rented sector. In some cases, people have traded down. In other cases, people have made a contribution towards retaining the spare room.
The hon. Lady mentioned the Department for Communities and Local Government and ring-fenced funding for under-occupation. She will know that the strategy of the DCLG has been to let local authorities decide their own priorities and not to have ring-fenced funding.
The hon. Lady mentioned the combination of this measure and other measures. She mentioned the reduction in support for council tax benefit. Nottingham city council has taken the decision to charge some of its working-age benefit recipients a contribution to the council tax. Not all local authorities have done that.
Steve Webb
Well, other local authorities have avoided doing that. It is noticeable that many Labour-led local authorities have decided to pass the cost on to their tenants. For example, my local authority of South Gloucestershire has not passed on the cut to tenants, so they will receive full council tax benefit. Nottingham city council, however, has decided to expect its low-income tenants to make a contribution. The hon. Lady said that Governments have to make choices, but so do local authorities. Nottingham council has decided to charge low-income working age households a contribution towards their council tax. That was its decision.
Looking forward to the changes we have made, foster families were mentioned and the Government have been clear throughout that we want to protect such families. Our original strategy was to put the £5 million that we think it will cost to protect those families into local government budgets through discretionary payments, but, partly because of the alarmist scaremongering about foster families, we decided it was far better to avoid any anxiety on that point and simply to entitle foster families to an extra bedroom at the same cost. We have not had to find extra money for that measure because it was there already. We always said that we would protect those families, and we will. However, we will do so directly because when we relied on discretionary payments, Opposition Members claimed that we were not going to support foster families, which caused concern among those families. Giving foster families a right to a room seemed a more direct way of providing that support. Likewise, we have made it clear, as the Prime Minister did—
Steve Webb
No. I only have a couple of minutes left. I have made my point clear. As the Prime Minister made clear from the Dispatch Box a couple of weeks ago, families with disabled children who cannot share a room will have the right to an extra room if they approach their local authority and make their case. Provided that case is accepted, they will have a right to a room. There are a number of elements where we have either given a right to a room, and the hon. Gentleman for, I think, Shipley—
Steve Webb
No. I apologise. I am sorry, I cannot remember the hon. Gentleman’s constituency, but he cited a case where a carer had to come in and use a spare bedroom. To be clear, the rules allow for a non-resident carer who has to stay overnight to have a room. Obviously, I do not know the full details of that individual case, but a spare bedroom is allowed for a non-resident carer.
Chris Leslie
I am afraid that the carer rules do not capture that particular case, but I wanted to ask the Minister a particular question about the bedroom tax—sorry, the spare room subsidy. I know the name is important, much like the community charge which some people did not want to call the poll tax. Can the Minister provide a figure for the number of households affected by the bedroom tax that include a disabled person?
Steve Webb
The hon. Gentleman glossed over his constituent’s case, but to be clear for the record, a spare bedroom is allowed for a non-resident overnight carer and it is important that he does not alarm people about the issue. In our impact assessment we published the number of disabled people affected by the change, and, as he knows perfectly well, around one in three—broadly speaking—of those affected by the measure is receiving the disability living allowance. Time is running out, but simply to say—
Written Ministerial Statements
(11 years, 9 months ago)
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Industrial Strategy
(11 years, 9 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
In September last year, I set out the Government’s new industrial strategy for the UK. This would be a long-term, whole of Government approach, with partnership with industry at its heart.
As part of the UK’s new industrial strategy, I was clear that the Government will continue to support successful sectors.
Reflecting this commitment, today I am delighted to announce the Government are committing over £1.6 billion during the next 10 years to back our industrial strategy. This includes over £1 billion new money from Treasury and over £500 million from my Department’s budget. Working in partnership with business we will aim at least to double this with industry funding.
The first strategy we will support with this funding will be aerospace. Further strategies will be published in the coming months, including agri-tech in May and automotive in July.
The strategies will set out how our partnerships will help the UK respond to and seize the challenges of new forms of aircraft and low emission, low-noise engines; the cars of the future in a low-carbon environment and the challenge of harnessing agricultural science to achieve sustainable improvement of agriculture in the UK and overseas.
Today, we are publishing the aerospace industrial strategy. The delivery of the strategy will be supported through a joint, equally funded Government/industry investment of £2 billion over seven years to create a new UK Aerospace Technology Institute (ATI). Based on the UK’s potential to develop technology to sustain and grow its future market share in aerospace, the ATI could secure up to 115,000 jobs in the sector and its supply chains in the long term.
The strategy has been developed jointly with business through the aerospace growth partnership, which we established in 2010. It builds on the strategic vision published at the Farnborough air show last July. It sets out an ambitious programme to keep the UK firmly at the forefront of world aerospace manufacturing and ensure that we can address the challenges of increasing global competition and changes in technology. It is based on ensuring that the UK has the capabilities to be at the leading edge of the design, development and production of wings, engines, aerostructures and advanced systems.
The aerospace sector employs 230,000 people across the UK. It is a key part of our advanced manufacturing base providing work for around 3,000 companies of all sizes. With forecast demand for around 27,000 new large passenger aircraft, worth $3.7 trillion, between now and 2030 this is a sector with real growth potential. However, new manufacturing processes, new skills and a flexible and adaptable supply chain will be critical if the UK is to grasp these opportunities. This strategy sets out how Government and industry will work together to address these challenges.
(A step change in technology is needed if these aircraft are going to deliver the improvements in efficiency and environmental performance needed to make air travel sustainable. The UK is well placed to lead on developing many of these technologies, but we need to start now if we are to have the right capabilities in place. As part of the strategy we will build on our earlier investment in the UK Aerodynamics Centre and create a new Aerospace Technology Institute. Over the next seven years the Government will invest £1 billion in this initiative, a commitment that industry has pledged to match.
It can take up to 15 years to develop a new aircraft. This strategy gives industry the long-term certainty it needs to ensure that the UK remains ones of the world’s most attractive location for aerospace manufacturing).
A copy of the strategy has been placed in the Library of the House.
Double Taxation Convention
(11 years, 9 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
New double taxation conventions with the Kingdom of Norway and the Kingdom of Spain were signed on 14 March 2013. The texts of the conventions have been deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ website. The texts will be scheduled to draft Orders in Council and laid before the House of Commons in due course.
Economic Development
(11 years, 9 months ago)
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The Financial Secretary to the Treasury (Greg Clark)
Today the Government are publishing their response to the Heseltine review, copies have been laid in the House. Lord Heseltine set out an ambitious vision in his review and the Government have responded, accepting the overwhelming majority of his recommendations.
At the centre of the Government’s response is action to tackle excessive centralisation. The Government will create a new single local growth fund from 2015 that will include the key economic levers of skills, housing and transport funding. Full details will be set out at the spending round. The Government will negotiate a local growth deal with every local enterprise partnership (LEP)—with the allocation of funds and flexibilities reflecting the quality of the LEP’s strategic economic plan and the capacity of the local area
Counter-Terrorism Act 2008 (Schedule 7)
(11 years, 9 months ago)
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The Financial Secretary to the Treasury (Greg Clark)
My noble friend the Commercial Secretary to the Treasury, Lord Deighton, has today made the following written ministerial statement:
Paragraph 38 of schedule 7 to the Counter-Terrorism Act 2008 requires the Treasury to report to Parliament after each calendar year in which a direction under the schedule is at any time in force. This report provides details of the Treasury’s exercise of their functions under schedule 7 during the calendar year 2012.
The Schedule 7 powers
Schedule 7 provides HM Treasury with powers to implement a graduated range of financial restrictions in response to certain risks to the UK’s national interests. The risks it addresses are those posed by money laundering, terrorist financing and the proliferation of chemical, biological, radiological and nuclear weapons.
Direction given under the powers in Schedule 7
The Financial Restrictions (Iran) Order 2011 (“the 2011 order”) came into force on 21 November 2011. The order contained a direction by the Treasury requiring all UK financial and credit institutions to cease business relationships and transactions with all banks incorporated in Iran, including all subsidiaries and branches of such banks, wherever located, and the central bank of Iran.
The 2011 order was issued on the basis that activity in Iran that facilitates the development or production of nuclear weapons posed a significant risk to the national interests of the UK. The decision was made because of the risk caused by the activity of Iranian banks in facilitating the development or production of nuclear weapons. Iranian banks play a crucial role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes. Iranian banks can be exposed to the risk of being used by proliferators in Iran’s nuclear and ballistic missile programmes.
In accordance with paragraph 15(4) of schedule 7, the 2011 order ceased to have effect at the end of the period of one year beginning with the day on which it was made, on 20 November 2012.
The Financial Restrictions (Iran) Order 2012 (“the 2012 order”) was made and came into force on 21 November 2012, immediately on expiry of the 2011 order. The 2012 order contained a direction by the Treasury in the same terms as that in the 2011 order. The decision to give the direction in the 2012 order, in effect maintaining the restrictions in the 2011 order in place, was made because of the continued risk to the national interests of the UK caused by the activity of Iranian banks in facilitating the development or production of nuclear weapons. The direction mitigates the risk to the financial sector of being involved in proliferation financing.
Licensing
Under paragraph 17 of schedule 7, the Treasury can exempt acts specified in a licence from the requirements of a direction requiring the cessation or limiting of transactions or business relationships between UK and Iranian banks.
In operating the licensing regime in respect of the 2011 and 2012 order, the Treasury’s aim was to minimise the impact of the restrictions upon third parties, without compromising the objective of the direction.
Six general licences were issued by the Treasury exempting certain activities from the requirements of the 2011 order:
General Licence 1—permitted existing and new transactions involving transfers of under €40,000 for humanitarian purposes;
General Licence 2—allowed personal remittances under €40,000. (This licence included cover for payments of up to €40,000 to students studying in the UK);
General Licence 3—permitted existing or new transactions related to the provision of insurance permitted by EU regulation 267/2012;
General Licence 4—allowed UK banks to continue to hold accounts for asset-frozen Iranian banks and credit payment to those accounts in accordance with EU regulation 267/2012;
General Licence 5—allowed UK banks to continue to hold accounts of non-frozen Iranian banks, although they could not process any transactions on these accounts; and
General Licence 6—provided a seven-day grace period to allow payments in progress under existing contracts to be completed.
On 21 November 2012 the Treasury issued six general licences exempting certain activities from the requirements of the 2012 order. General licences 1 to 5 replicated the provisions of those issued in respect of the 2011 order. The new general licence 6 permitted transactions or business relationships already authorised under the 2011 order.
Applications for licences in respect of transactions that fell outside the scope of the six general licences were assessed on a case-by-case basis.
Between 1 January 2012 and 31 December 2012, 142 licences were issued and none were refused:
Seventy-two licences were issued under the 2011 or 2012 order, and 70 licences were issued in relation to transactions that were caught under both the UK order and EU regulation 267/2012 (or EU regulation 961/2010 which it replaced in March 2012).
Over half of the licences were issued in connection with payments due by an agreement or contract concluded before the prohibitions. Licences were also issued to facilitate UK banks exiting their relationships with Iranian banks in accordance with the order and the winding down of frozen Iranian banks in the UK, for business relationships, and to permit specific transactions such as humanitarian payments, personal remittances, legal expenses and the repayment of loans.
The Financial Restrictions (Iran) Order was revoked on 31 January 2013. The Treasury will report further on the revocation in the 2013 report.
Tax Avoidance
(11 years, 9 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Autumn statement 2012 announced that HMRC would review the use of offshore employment intermediaries. As a result of that review, the Government will strengthen obligations to ensure the correct income tax and national insurance contributions are paid by offshore employment intermediaries. Cracking down on this avoidance will benefit the Exchequer by almost £100 million a year. HMRC will publish a consultation on the detail of the changes in May and the Government will legislate in Finance Bill 2014.
Regional Planning (Abolition)
(11 years, 9 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I am pleased to announce the coalition Government’s decisions to revoke the regional strategies for the east midlands and the north-east. These decisions follow region-specific assessments as outlined in the written ministerial statement of 25 July 2012, Official Report, House of Lords, columns WS66-68. Orders giving effect to these decisions will be laid in Parliament shortly.
The revocation of these regional strategies is another step forward for localism. It completes the decentralisation of planning powers in the former Government office regions of the east midlands and north-east and sends a powerful message to local councils and local people across those parts of the country. It says that we trust them and believe that they, and not central Government, are best placed to plan and deliver communities that reflect the aspirations of local people. Once the regional strategies are revoked, development plans across these two areas will comprise local plans, and where they exist, neighbourhood plans. This is a significant shift of power that will benefit the everyday lives of people.
Policy S5 of the Northumberland County and National Park Joint Structure Plan First Alteration (February 2005) will remain in place because it enables the extension of the green belt around Castle Morpeth and so plays an important role in preserving the cultural and environmental heritage of the local area. This reflects the Government’s commitment to safeguarding green belt protection.
The reasons for the decision to revoke these regional strategies are set out in the post-adoption statement for each region, which will be placed in the Library of the House and published on the Department’s website at:
East Midlands
https://www.gov.uk/government/consultations/strategic-environmental-assessment-about-revoking-the-east-midlands-regional-strategy-environmental-report.
North East
https://www.gov.uk/government/consultations/strategic-environmental-assessment-about-revoking-the-north-east-regional-strategy-environmental-report.
These decisions follow the revocation of the regional strategies for the east of England, Yorkshire and Humber and the laying of an order to revoke the regional strategy for the south-east.
Further decisions on the remaining regional strategies will be made in due course.
EU Transport Council
(11 years, 9 months ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
I attended the first Transport Council of the Irish presidency (the presidency) in Brussels on Monday 11 March.
The Council held a debate on the proposal for a directive of the European Parliament and of the Council on the interoperability of the rail system—part of the Commission’s fourth railway package. The aim of the proposal is to address concerns about significant delays and costs associated with vehicle authorisation that can occur in some member states (although this is not a problem within the UK). The proposal would also make a key change to the process for the authorisation of rail vehicles in the EU. It is proposed that this activity is only carried out by the European Railway Agency instead of by the national safety authorities within each member state. I noted that while there were clearly problems with the authorisation process which merited consideration, these were not causing particular problems in the UK. I suggested that the rail undertaking could be given a choice to go to either the national authority or the European Rail Agency for approval of rolling stock.
The Council also debated the recently published legislative proposal that would require member states to make available adequate infrastructure for alternative fuels. I welcomed the proposal and supported work to harmonise technical standards for alternative fuels, but noted that a technology neutral approach was needed.
The presidency reported on progress at official level discussions on the air safety reporting on occurrence. The Commission stated that the aim of the proposal was to provide a more efficient and uniform occurrence reporting system, focused on improving safety which would enable personnel in safety critical roles to freely report incidents without fear of recrimination.
Under any other business, the Commission gave an update on its “Stop the Clock” proposal on the aviation ETS directive. This proposal which is in the final stages of adoption, aims to facilitate a global agreement on tackling emissions from aviation at the General Assembly of the International Civil Aviation Organisation (ICAO) in September 2013.
State Pension Reform
(11 years, 9 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I shall shortly be making a statement about changes to the timetable for the introduction of state pension reform.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the House the Committee will adjourn for 10 minutes.
Immigration and Nationality (Fees) Regulations 2013
(11 years, 9 months ago)
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Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) Regulations 2013.
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I am sure the Committee will recall that after discussion in Grand Committee I came to the House on 28 January and obtained approval to amend the Immigration and Nationality (Fees) Order 2011, which provides powers to charge for visa, immigration and nationality applications and services. I indicated at the time that I would return to debate the specific fees charged for the applications and services within the scope of that order.
These fees are set out in regulations made under Section 51 of the Immigration, Asylum and Nationality Act 2006. A subset of those fees set above costs is then set out in accordance with the powers granted in Section 42 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, as amended by Section 20 of the UK Borders Act 2007. Noble Lords will have seen the Immigration Minister’s Written Statement of 25 February, and I am happy to take points on any of the fee proposals here today, whether contained in these regulations or in those that will be laid shortly for fees set at or below the cost of processing.
We have sought to limit most increases to 3%, which is in line with recent measures of inflation. The fees that have increased by more than 3% include the following. First, the indefinite leave to remain fee is increasing from £991 to £1,051. The right to stay indefinitely in the UK is the most valuable entitlement provided by any product offered by the UK Border Agency. It is right that the fee for this product should not be exceeded by that for any products for migrants staying temporarily in the UK.
Secondly, for dependants applying to extend their leave in the UK at the same time as the main applicant, their fees were previously set at half the main applicant’s fees. We are reducing the concession on these fees so that those dependants will pay 75% of a main applicant’s fees. This is consistent with our policy to better align fees for applications made in the UK with those made overseas, where all dependants pay the full fee. It also reflects that each individual on an application may receive an independent set of entitlements, which will result in additional administration costs.
Thirdly, on registering for British citizenship, different fees currently apply to applications for naturalisation and those for registration, even though 99% of registration applicants receive the same status: namely, British citizenship. It is fair that those who receive the same entitlements pay the same fee. The fee for applying to register for citizenship will therefore increase to £673 as a first step towards alignment with naturalisation fees.
The fees for some applications have increased to reflect unit costs. These include those for reissues of or corrections to nationality certificates, nationality status and non-acquisition letters, and sponsors’ fees for tier 5 certificates of sponsorship and the tier 4 confirmation of acceptance for studies. It should be noted that some fees have also reduced in line with unit costs, including those for the transfer of conditions, renunciation of nationality and settlement visas for refugees’ dependent relatives.
We are also introducing some new fees. As I said when we debated the fees order, we are amending the way in which fees for applications made in person are structured. The main changes are as follows. A single uplift fee of £375 is payable, in addition to the relevant standard fee for applications made in person. This replaces a large number of public enquiry office fees in the existing regulations. The £375 in-person fee includes £100 payable for the arrangement of an in-person appointment. The fee is being introduced to tackle abuse of the public enquiry office booking system by organisations and individuals who have been making speculative appointments but then failing to attend. Such actions deprive genuine applicants of the opportunity to attend a PEO and damage a legitimate revenue stream for the UK Government.
A priority service fee of £275 for the expedited processing of standard applications via some routes will also be charged within the UK. Initially, this will be offered to selected tier 2 in-the-UK applicants, although we intend a phased rollout of the service to remaining temporary and permanent migration routes in future. In response to requests for such a service from universities and colleges, we are introducing, following a successful pilot, an extension of optional premium services to education sector sponsors in tier 4. Sponsors will pay £8,000 per year for an enhanced level of customer services.
A further £55 charge will be made for applications for documentation from EEA nationals and their non-EEA family members who are exercising free movement rights in the UK. Charging for these documents is common across Europe, and £55 will help the UK Border Agency to cover some of the administrative costs of this facility. Further, an extended-validity visa will be charged at £80 for those involved in the preparation of the Commonwealth Games, which are being held in Glasgow next year.
We have also taken the opportunity to split the fee for the tier 1 exceptional talent route to encourage more people to apply. As a result, migrants will know whether they are considered talented by the competent bodies before making and paying for a leave application. Following recent policy changes and a significant fee reduction, we also expect to see more applications via the graduate entrepreneur route.
The latest published data on UK Border Agency processing show that 91% of all applications received by the agency are processed within service standards. The majority of those applications are for visas for people coming to the UK, and we are exceeding our service standards for non-settlement visas. Where issues have arisen, particularly in the UK, the agency has taken steps to address them and expects that most of the affected application routes will be back within service standards by spring 2013.
Legal migration brings economic, cultural and social benefits to the UK. We shall continue to ensure that fees for immigration and nationality send a clear signal overseas that this country welcomes genuine visitors and the brightest and best migrants. These proposals support that message. We shall continue to monitor the economic, equality and diversity impacts of our changes. We shall ensure that our fees continue to be priced at competitive levels when compared with those in other key countries. These regulations provide a basis for a sustainable immigration system that will command public support, and I commend them to the Committee.
Lord Eatwell
My Lords, I shall refer to the applications-in-person fees that the Minister mentioned in his introduction. The idea that an efficient service is being provided in this case will, certainly in Cambridge, generate hollow laughter. I refer him to the case of a colleague of mine who, as a tier 1 applicant in person, has made a consistent series of applications for a personal appointment in order to secure an extension of tier 1 permission in good time so that she can attend important international conferences that are fundamental to her career and to the performance of her high-quality services here in the UK. Despite numerous telephone calls, hanging on for over an hour on one occasion, she was unable to obtain an appointment for a month. However, she was offered an appointment by a person in Turkey for £3,000. The Minister referred to the abuses that there have been in respect of applications in person, but I ask him why we are imposing a fee of £375 on such applications in person when the person making a profit of £3,000 will regard this as a perfectly good bet.
Why are we not improving the service? One thing that the Minister did not mention in his entire presentation was value for money. The service provided is lamentable. The British public, and indeed people resident here from overseas, are not receiving value for money. He described the fees as competitive with other countries. So what? Why do we not provide a basic service?
Eventually my colleague got an appointment in Cardiff. She went there to have her permission to stay renewed. The UK Border Agency office in Cardiff was deserted, although she had not been able to obtain an appointment. The reason, of course, was that the appointments had been jammed up by those who were illegally making appointments in order to jump the queue, because of the sheer inefficiency of the border agency in managing this process. Can we not say about applications in person that within the UK, for people who as tier 1 applicants are so important for the future of our economy, we will provide a decent service, which we are not doing at the moment, instead of imposing a higher fee upon them?
Lord Rosser
My Lords, I thank the Minister for explaining the effect of the regulations in what appears to be more detail and greater depth than was the case with the Minister in the other place. However, I am sure he will be relieved to know that I still intend to be brief, despite his very thorough explanation.
As we know, the UK Border Agency first conducted a full public consultation on charging for immigration and nationality applications in 2006, and that consultation led to the principle being established that the UKBA should operate a flexible pricing approach to setting fees for immigration services, to take account of wider policy objectives while reducing the contribution made by the taxpayer. As the Minister said, the regulations that we are considering today, which are pursuant to the Immigration and Nationality (Fees) Order 2011, come into force on 6 April and replace similar regulations that have been effective since April last year. They set out the changed fees to be paid for immigration and nationality applications or services, which will also enable a significant part of the costs to be recouped.
We support the principles involved, including premium services that the Government intend to introduce. However, I am sure the Minister will wish to respond to the specific point made by my noble friend Lord Eatwell, which certainly deserves a considered response, about what appears to be a far from satisfactory situation.
Beyond that, I do not intend to say anything further about these regulations. I would simply comment that in the light of a recent Written Answer that I received from the Minister, it appears as though the Home Office might not be having as much success as it would wish in reducing or containing the number of orders and regulations in existence. I had understood that to be a government objective in pursuit of their objective to reduce what they have described as unnecessary regulation. No doubt at some stage in the future we will have the opportunity to consider that question in greater detail.
Lord Taylor of Holbeach
I thank both noble Lords for their contributions. Although different, both were very valuable. I say to the noble Lord, Lord Rosser, that the complexity of immigration rules and regulations is a matter of concern. I am fairly certain that we will have opportunities to discuss these matters in full.
This is a little like Topsy. Successive Governments have tried to deal with the complex issues raised through immigration rules and regulations. They need dealing with. I hope that Parliament can play its part in ensuring that this matter is made much easier to manage. That is no excuse, however, for the situation described by the noble Lord, Lord Eatwell, and there are aspects of the UKBA that are of concern to the Home Office and to the Government in general. While I cannot comment on the specific case in point, I hope that I made it clear in my introduction that we were aware that there was abuse in this area and that false appointments denied people the opportunity of having a personal appointment to deal with their case. It is important to emphasise the value of such personal appointments. They enable key people to make sure that their application is dealt with and to have a face to face encounter.
Much of this is designed, as I think noble Lords will see from the university sponsor’s fee of £8,000, to try to make the UKBA much more consumer focused. The UKBA exists to serve the process whereby people can move in and out of this country and contribute to our economic, cultural and social life, points that I made at the beginning.
Perhaps I may ask the noble Lord whether he would mind documenting for me the case that he described. Government and opposition have a joint interest in making sure that the UKBA achieves, at least in governance terms, what I think we across the House and in this Committee would wish to see. It would be very helpful if the noble Lord could take the time to do that for me.
Lord Eatwell
My Lords, since I was very critical of the border agency in my earlier remarks, I should say that when my friend arrived at the deserted office in Cardiff, she received an excellent service.
Lord Taylor of Holbeach
That is very reassuring. I think that the individual staff members of the UKBA are determined to turn the body around. I am satisfied that the organisation is heading in the right direction, but it is very useful to know where the pinch points are.
As noble Lords will know, we will consolidate regulation because we review the fees on an annual basis. It is right that we review the fees, but primary legislation requires them to be affirmed by Parliament. I hear the concerns expressed by noble Lords, both those of the noble Lord, Lord Rosser, in the generality and those of the noble Lord, Lord Eatwell, in the particular. Meanwhile, I commend the regulations to the Grand Committee.
Guardian’s Allowance Up-rating Order 2013
(11 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Guardian’s Allowance Up-rating Order 2013.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I shall also introduce the Guardian’s Allowance (Northern Ireland) Up-rating Order 2013 and the Tax Credits Up-rating, etc. Regulations 2013. It is the Government’s view that the regulations and orders are compatible with the European Convention on Human Rights.
The regulations and orders before the Committee put into effect a number of reforms to tax credits and child benefit announced at the spending review 2010, the June Budget 2010 and the Autumn Statement 2012. In the spending review 2010, we announced that the basic and 30-hour elements of working tax credit would be frozen for three years from 2011-12. The regulations confirm that policy for 2013-14.
At the June Budget 2010, we announced that the rates of child benefit would be frozen for three years from 2011-12. We also announced that the income disregard, which is the amount by which a family can increase its income within a tax year without a recalculation of its tax credit award, would decrease from £10,000 to £5,000 in April 2013. At the Autumn Statement 2012, we announced that the child element of child tax credit, and the couple and lone-parent elements of working tax credit, would be uprated by 1% for three years from April 2013.
Benefits that help with the extra cost of disability have been protected. The regulations increase the disability elements of tax credits—that is, the disabled child and severely disabled child elements of child tax credit, and the disabled worker and severely disabled worker elements of working tax credit—in line with CPI. The rate of guardian’s allowance will also be uprated by CPI.
The Committee will be aware that the decisions on uprating contained in these regulations are part of a wider package of uprating measures. My noble friend Lady Stowell has already presented the Social Security Benefits Up-rating Order for 2013-14, which increases certain working-age social security benefits by 1%. The Welfare Benefits Up-rating Bill, which confirms the 1% uprating decision for 2014-15 and 2015-16, including for certain elements of tax credits and child benefit, is now entering its Report stage in the House.
I will start by saying that tax credits and child benefit provide valuable support to millions of families, so the decisions to freeze child benefit and tax credit rates or to increase them by less than CPI were difficult. They will mean that the rates will reduce in real terms. However, they are necessary decisions that should be considered in the context of the exceptional fiscal challenge that we inherited: namely, the largest deficit since the Second World War.
The Government are committed to reducing the deficit. Around four-fifths of the total consolidation in 2015-16 will be delivered by lower spending. This is consistent with OECD and IMF research that suggests that fiscal consolidation efforts that are focused on spending are more likely to be successful.
Tackling the unsustainable welfare budget is a key part of addressing our fiscal challenge. From 1997 to 2010, spending on welfare increased by some 60% in real terms, which is equivalent to an extra cost of £2,900 per household in Great Britain. It is an increase from 11% of GDP in 2007-08 to more than 13% today. Welfare now accounts for £1 in every £4 of public spending. Tax credits have significantly contributed to this increase. Under the previous Government, spend increased by an extraordinary 340% compared with the benefits it replaced. Tax credits will cost around £30 billion this year, and child benefit costs a further £12 billion. Together, they make up over 40% of working-age welfare spend.
Freezing the basic and 30-hour elements for three years will save almost £1 billion in 2013-14, while uprating the child, couple and lone parent elements by 1% saves £320 million, and decreasing the income disregard will save £125 million in 2013-14. The three-year child benefit freeze will save an additional £1.25 billion. If these savings were not delivered, this could clearly put additional pressure on spending on public services. While they are tough decisions, they are necessary and will be implemented through these regulations.
I assure noble Lords that while we are taking these tough and necessary decisions on welfare, we are also ensuring that high earners pay their share. The top 20% of households continue to make the greatest contribution towards reducing the deficit. This is true both in cash terms and as a percentage of their income and benefits in kind from public services. Overall, the richest will pay more tax in this Parliament than under the previous Government’s plans. As a result of this Government’s actions, a high earner pays an additional £10,000 on a £100,000 capital gain; pays an extra £60,000 on the purchase of a £3 million house, and an extra £300,000 if purchased via a corporate envelope; loses up to £4,500 a year in entitlement to tax reliefs on annual pension contributions, for an individual previously claiming the maximum annual tax-free pension allowance and paying the additional rate; can no longer benefit from tax relief on contributions to pension pots over £1.25 million in value; and will no longer be able to use income tax reliefs to reduce their tax bill excessively year after year.
These measures clearly affect benefits that are designed to support families with children. I am conscious that there has been much discussion, both in the House and through the media, about the impact that this might have on child poverty. The Government are committed to tackling child poverty and focusing on interventions that transform lives rather than push up benefit incomes to lift people just above a relative income line. We already know that focusing on the relative income line alone yields perverse results. In 2010, 300,000 fewer children were said to be in poverty because the recession had caused median incomes to drop. In other words, people were said to be pulled out of poverty not because anything changed in their lives but because the rest of society had got poorer.
The Government are consulting on a better measurement that includes income, which is of course an important part of tackling child poverty, but goes beyond income to tackle the root causes of poverty, including worklessness, educational failure and family breakdown. I re-emphasise that one of the most important things that we can do to support children is to tackle the nation’s debt and restore economic growth. In doing so, we can create a future of prosperity and opportunity. I simply disagree that what is best for children is to continue spending unaffordable amounts on welfare while building up debts to pay for it.
The Government are prioritising our resources into reforms that really help families with children. We have invested £2.5 billion in the pupil premium for disadvantaged pupils. We have put £1.2 billion into capital investment in schools. We are investing in making work pay through universal credit, sending out a clear signal that we believe that work is the best route out of poverty for parents and their children. As part of universal credit we are spending an extra £200 million to support families with childcare costs, and for the first time this support will be made available for families who work fewer than 16 hours per week. This will mean that 100,000 more working families will be helped with their childcare costs. Of course, we also provide significant support to families through the National Health Service and schools, which, even in these difficult economic times, we have protected the budgets for.
Lord Eatwell
My Lords, I am grateful to the Minister for introducing these statutory instruments. He concentrated, as indeed I will, on the uprating of tax credits. He said little about the guardian allowance uprating, which is the only issue that gives rise to the traditional debate between RPI and CPI, which I shall certainly leave aside. Enough has been said about that to expose the Government’s use of that device to extract money from the welfare system.
The noble Lord pointed out in his introductory remarks that the measures that he described were withdrawing a total of £2.7 billion, I think it was, from the pockets of the poorest in this country. These contemptible measures represent a fundamental economic failure and a fundamental misunderstanding of the role of tax credits and of the security system in our economy. He referred extensively to the idea that this was somehow fair. In particular, when addressing the issue of working tax credits he justified what is being done by referring to the personal allowance change, from which the noble Lord himself benefits; from the fuel duty change, from which the noble Lord himself benefits; and from the freezing of council tax, from which the noble Lord himself benefits.
My point relates not to the motivations of the noble Lord but to the fact that these benefits benefit everybody in the economy. The changed personal allowance benefits 24 million people, which is just about every taxpayer, including the noble Lord and me. These measures are no justification whatever for withdrawing support from those who are on the lowest incomes and who need support the most.
I was struck by the table of the decline in benefits that was attached to the Explanatory Memorandum for these measures. The basic element of tax credits is down by £45 in real terms. The second adult element is down by £25 in real terms. The lone parent element is down by £25 in real terms. For child tax credits, the family element is down by £15, the child element is down by £30 and the disabled child element is down by £30. These may seem trivial sums, but for families who are absolutely on the edge of survival they are absolutely fundamental. The £2.7 billion that the Government are extracting from this part of our community in order to attempt to reduce the deficit is a direct attack on targeted benefits that were actually associated with the poorest in our community.
The Government have also, perhaps unintentionally, weakened a fundamental aspect of the Chancellor’s economic policy. The Chancellor has referred on several occasions to the fact that his measures are designed to attack the structural deficit and not the deficit as it occurs from year to year, as it may be affected by fluctuations in economic activity. There, the Chancellor has pointed out, the effects of any decline in activity are mitigated by what are called the automatic stabilisers: the fact that benefits rise automatically as people become more impoverished and are reduced automatically as the economy grows, although the Chancellor has of course not experienced that. Now we are weakening the automatic stabilisers.
Have the Government calculated the effect on the overall multiplier consequences on government expenditure of the weakening of social security payments that we have before us? Can the noble Lord tell us what the overall impact will be of this reduction in spending for the poor on the level of activity in the economy, now that we know, by virtue of the IMF, that the multiplier consequences of reducing government expenditure are much higher than was contained in either the Treasury’s or the OBR’s calculations? Can he tell us the impact of this on the overall level of activity and the consequential impact on the increase in the deficit that these spending changes will bring about? It is a trivial economic error to look at first-round effects and not to look at subsequent consequences on levels of activity and revenue.
We have before us the first step in a steady attack on the welfare system, which is to be progressed year after year over the next three or four years. I find it a dispiriting image of our country that we are prepared to do this in the most dire economic circumstances, attacking those who are the weakest while simultaneously, from this April, reducing the top rate of tax for those with the highest levels of income, over £150,000, from 50% to 45%. The noble Lord referred to this group, telling us that the top 20% are contributing a major share of tax revenue to the reduction in the deficit. Does he not realise that, arithmetically, that arises because they are so darn rich compared with everybody else?
The distribution of income in this country has deteriorated and become so skewed that the higher tax revenues contributed by those on higher incomes are a direct function of the extraordinarily high pre-tax incomes observed in the top portions of our society. The Minister’s references to the proportion of revenues now being derived from the purchase of £3 million houses, or from the impact on £1.25 million pension pots, will seem like a Hollywood fantasy to the people with whom we are dealing in these measures.
Will the Minister also confirm that the reduction in real incomes of the lowest two deciles in the economy is greater in proportion than that of the top decile, once one takes out the tax increase introduced by Alistair Darling, which the Government always put into their calculations in order to produce the spurious argument that the top decile has contributed most? Once one strips out the measures taken by the previous Labour Government in the March 2010 Budget, the proportionately larger contribution of the top decile disappears.
These measures directly attack the weakest members of our society and reduce the overall welfare budget at a time when it is needed more than anything else. It is not only inequitable but economically illiterate, because it reduces the transfer of funds to that section of society that provides the overwhelming economic benefit of spending every penny it gets, thereby helping to sustain activity in the overall economy. These are vicious measures from an economically illiterate Government.
Lord German
My Lords, I had hoped that we would not have a second round of our debate in the Chamber about the welfare uprating Bill, but clearly we have just had it. It slightly disappoints me because we will be re-rehearsing similar arguments. However, I must say to the noble Lord, Lord Eatwell, that I support interventions that help people in their lives. I support very much the pupil premium, and investing heavily in helping young people, particularly young children, to find a better way of life. I also support the uprating and raising of tax thresholds, because we can raise the bottom tax threshold and adjust other tax thresholds in a different direction.
I note also, by way of a second round in this debate, that I heard no answer to the question about savings, except the £100 million according to the OBR, which was the only example that we heard of another way of saving money. In order to get this concretely in my mind, I would be grateful if my noble friend would say, for the year 2013-14, what the savings will be from the freezing of tax credits and from the elements that are before us in these regulations when they are added together. We can then compare them with the £100 million offer that we have just heard.
I have two further small questions. First, the Government are obliged under the Tax Credits Act 2002 to review the level of tax credit payments. They have done so for 2013-14, but while the review may have been made public it is not very easy to find. Perhaps my noble friend would either point me in the direction of the report or send me a link so that I can have a close look at it. I should add something in response to the noble Lord, Lord Eatwell, who talked just now about the freezing of council tax benefits. I live in a Labour-run authority and my council tax has gone up. It does not benefit me at all. It is also managed by a Labour-run administration.
The second part of my question relates to the guardian’s allowance. I can understand why it has been excluded, given that the majority of people who are guardians will tend to be of an older age. I wonder whether that is the only logic or whether there is another logic behind uprating fully by CPI. I welcome the move, but I just want to understand why it has been taken.
Lord Freud
It is worth just reminding noble Lords that we have to take pretty urgent action to tackle the situation left by the previous Government, which was an unsustainable welfare bill that has been rising and that continues to rise, as I said, from 11% in 2007-08 to more than 13% today.
Lord Eatwell
That is a good point, which I forgot to bring up. Could the noble Lord tell us whether that rise is due to the change in the rate of benefits or to the recession?
Lord Freud
That is a complicated and rather interesting question, so if the noble Lord will accept this I would like to reflect upon it and write to him. One thing is that in the past couple of years we have in effect held level the number of people on out-of-work benefits. It is really quite a complicated question, and I shall go away and try to come back to him with a proper answer.
My noble friend Lord German asked about the 2013-14 savings. The three-year freeze of the basic rate and the 30-hour element of working tax credit have saved £975 million from 2011-12. The three-year freeze of child benefit saves £1.25 billion from 2011-12, and uprating certain elements of tax credits by 1% saves £320 million for the same period.
On the automatic stabilisers, the multiplier that we use is decided by the OBR, which is using a rate of 0.6 for welfare spending. That compares with a fiscal multiplier for capital expenditure of one. Clearly, one of the attractions of moving an extra £5.5 billion into infrastructure over the next two years is that it has that larger multiplier effect. The investments for the next two years are in new roads, science infrastructure, free schools, cutting the rate of corporation tax and increasing the annual investment allowance to £250,000. The OBR has said that it expects the level of GDP to be higher as a result of Autumn Statement policies.
My noble friend asked about the location of the reports on tax credits. I shall send the link to the relevant website. I apologise that it is difficult to find.
On the point raised by the noble Lord, Lord Eatwell, about who pays and about the rich, there are very good reasons for changing the top rate of tax, not least that the analysis of the rise from 40p to 50p, which was meant to have raised £2.5 billion, found that it raised considerably less. HMRC has found that it would raise at most £1 billion, and even less than nothing when indirect effects are taken into account. Clearly, that analysis is of the rising effect; one could look at the argument the other way when one starts to reduce it.
Lord Eatwell
My Lords, can the Minister elaborate on that point? In the Treasury’s initial assessments, and despite what seemed to be the obvious impact of the cut in top-take tax from 50% to 45%, its estimates were far lower than £1 billion. It has therefore significantly increased its estimate of the take; I refer to the estimates published at the time of the announcement of that measure. Will the Treasury publish a full assessment of the impact of the change in tax rates? Will it do so on a rolling basis, because we will know much more in four years about what has really happened during the past year than we know now?
Lord Freud
My Lords, I shall come back to the noble Lord on the plans. I am reporting that HMRC has looked at the projection made at the time of the top rate being raised from 40p to 50p. The projected revenue was £2.5 billion. It is currently saying that the figure is less than £1 billion, with a warning that it could raise less than nothing when indirect effects are taken into account. As the noble Lord said, some of the effects take some time to be realised. I am not sure what the plans are for more reports. Rather than hurrying around to find an answer for what is a detailed point, I will write to him.
Clearly, the freezing and indexation of benefits is not an easy decision to take. Our rationale is that one of the most important things that we can do to support families and children is to bring down the deficit and secure the economic recovery. It is only fair that we tackle the deficit now so that future generations are not burdened with unsustainable debts, higher taxes and diminished public services. I commend the regulations and orders to the Grand Committee.
Guardian’s Allowance Up-rating (Northern Ireland) Order 2013
(11 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Guardian’s Allowance Up-rating (Northern Ireland) Order 2013.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments.
Tax Credits Up-rating, etc. Regulations 2013
(11 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Tax Credits Up-rating, etc. Regulations 2013.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments.
Loss of Tax Credits Regulations 2013
(11 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Loss of Tax Credits Regulations 2013.
Relevant document: 19th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, these regulations were laid on 4 February 2013. I confirm that in my view they are compatible with the European Convention on Human Rights. They support the new powers introduced in the Welfare Reform Act 2012 to enable HMRC for the first time to apply a loss of tax credit penalty to fraudsters.
First I will explain why we need these regulations. Benefit and tax credit fraud has reached a level that is far too high. Around £1.9 billion a year is fraudulently claimed in benefits and tax credits, of which £0.7 billion relates to tax credit fraud alone. The Government have introduced a number of measures to reduce the level of fraud, such as working with credit reference agencies and developing screening technologies to check for potential fraudulent tax credit claims. However, we now need to move towards improving deterrents in order to stop in their tracks those who are thinking about committing fraud. We also need to change people’s perception that tax credit and benefit fraud is acceptable behaviour and worth the risk.
Research conducted by the Department for Work and Pensions shows that 41% of benefit claimants believe that benefit fraud is “easy to get away with”, and one-third thinks that the current penalties are “not too bad”’. Therefore, we need to send a strong message that fraudulent behaviour by tax credit claimants will not be tolerated by the taxpayer or by honest fellow claimants. Our aim is to provide even stronger deterrents to those who set out to defraud the tax credit and benefit systems. We are therefore introducing tougher penalties, increasing the length of penalties, and extending their scope to include tax credits.
The Department for Work and Pensions has already introduced comparable regulations that contain tougher powers to apply a loss of benefit to those making fraudulent benefit claims. These were debated and agreed by your Lordships’ House on 13 February. The draft regulations before noble Lords today support the wider joint DWP-HMRC strategy to reduce benefit and tax credit fraud, which was introduced in the Welfare Reform Act 2012. Jointly they will send a clear message to fraudsters that claiming benefits or tax credits to which they are not entitled will have severe consequences. They will also tackle the perception that tax credit and benefit fraud is too easy to get away with. We also intend to ensure that those who commit the most serious offences, such as organised or repeat offences, will receive the most severe penalties: losing their benefits or tax credits for up to three years. Most claimants are honest and abide by the rules, but to those who are not we want to send a clear message that if they try fraudulently to claim benefits or tax credits, they will face the consequences of their actions.
Noble Lords will be aware that tax credits comprise two elements: child tax credit and working tax credit. Child tax credit provides financial support for families with children whereas working tax credit provides financial support for working families. The Welfare Reform Act 2012 enables HMRC to withdraw payment of working tax credit for those who are convicted or cautioned, or who agree to pay a DWP administrative penalty as a result of a benefit offence. The 2012 Act also provides for the length of the loss of working tax credit period, and the loss of tax credits amount, to be reduced where there is an innocent party in a couple claiming tax credits. Finally, the Act prescribes what constitutes a benefit offence.
The length of time a loss of tax credit penalty is imposed will escalate depending on the number and severity of the offences. It will be applied for four weeks, 13 weeks, 26 weeks or three years. The 2012 Act also introduced provision for an immediate three-year loss of tax credit or benefit penalty to apply where a person is convicted of a relevant offence. “Relevant offence” generally means an offence of serious organised or identity fraud.
Although the loss of tax credit penalty will be applied to working tax credit, I reassure noble Lords that while child tax credit will be a disqualifying payment from April 2013, it is not a payment to which a loss will apply. In other words, although a fraudulent claim for child tax credit will count as an offence, the penalty will be applied only to working tax credit or another relevant benefit. I therefore reassure noble Lords that child tax credit payments will not be reduced or stopped for claimants who receive a loss of tax credits penalty.
On the detail of the Loss of Tax Credits Regulations being debated today, the regulations prescribe that the loss of tax credits penalty will begin from the 30th day after which HMRC is notified of the benefit or tax credit conviction, administrative penalty or caution. The regulations also provide for the payment of working tax credit to be reduced by 50%, not 100%, where there is an innocent party in a couple who have made a joint claim for tax credits. Where both partners are subject to a benefit or tax credit offence, the deduction would be 100% of the payment of working tax credit. This will include any element of working tax credit to which a claimant would be entitled, including childcare costs or disability elements. The regulations provide that the loss of tax credits will apply only to an applicable benefit offence that is committed wholly on or after 6 April 2013. It will not apply to offences committed before that date in relation to which a conviction is obtained after 6 April.
To summarise, in order to send a clear message to those who are thinking about committing benefit or tax credit fraud, we have strengthened the loss of the benefit penalty regime and expanded the scope to include tax credits for the first time. The increase in scope and the length of penalties reflect the seriousness of benefit and tax credit fraud, and aim to provide an effective deterrent. These regulations were referred to the independent Social Security Advisory Committee on 7 November 2012. I therefore seek your Lordships’ support for the regulations here today, and commend them to the Committee.
Lord Eatwell
My Lords, I am grateful to the Minister for introducing these regulations. Broadly, from this side of the Committee, we support them wholeheartedly. However, they raise a number of questions in my mind which I would be grateful if the noble Lord could answer.
On my first, broad-brush, question, the Minister referred to the scale of benefit fraud as £1.9 billion a year. Can he tell the Committee how this compares to the Treasury’s estimate of the losses due to tax avoidance and evasion? I think he will find that the estimate of losses in those areas is many, many times greater than that for benefit fraud, even though there is, quite rightly, a condemnation of benefit fraud.
The specific measure, as the Minister told us, removes benefit from those who have been fraudulently claiming it. Has the department or the Treasury investigated whether those people from whom benefit is being removed actually needed the money, and whether there are those who did not need the money? If a relatively wealthy crook is pursuing benefit fraud, taking the benefit away from them costs them nothing. They have just taken a punt on a particular scam and now they have lost out, so this measure does not really matter very much. However, if they were people who were actually impoverished but for some reason or other were not adequately covered by existing regulations and were then behaving fraudulently, they may not now have anything to live on. What are they supposed to do? Do we have an estimate, among these fraudsters who are depriving us of £1.9 billion, of those who needed the money and those who did not?
I raise this particularly because the Minister’s welcome remarks on child tax credit suggest that there is a feeling, perhaps not in the Treasury but in the department, that people may need the money; the Treasury never thinks that anybody needs any money. I am a bit puzzled as to the nature of this penalty. Of course, if somebody is fraudulently extracting funds from the Government, from the taxpayer, they should be stopped from doing so. However, if it so happens that this person will then be completely impoverished, we must ask what our society will do about them. This comes back to whether they needed the money. How many of these fraudsters are in fact quite well off crooks from whom this is a trivial change, and how many of them are people whose circumstances are so desperate that they are willing to break the law? Of course we should not allow them to break the law, but can we consider what the circumstances of such families might be once the appropriate penalty is applied?
Lord German
My Lords, I, too, welcome these regulations, but again they are a round two as they match the Social Security (Loss of Benefit) (Amendment) Regulations 2013. I have a number of questions. The first relates to what happens under universal credit to the various sets of regulations that we have been discussing today, which also have their mirror in regulations brought forward by the DWP. It may be a bit of a heresy to say this, but if we are to have separate regulations from separate departments, might it not be a little more useful if we were to back to back them in the same slot so that we could at least look at them together and perhaps save a fair bit of time and effort? Universal credit gives us that opportunity, since we will be looking at these regimes in the round.
My second question relates to the three-year sanction, which is the heaviest of all the sanctions, and the use of the words “deliberative or organised offences”. Has that definition of what is a deliberative offence and what is an organised offence been codified in the handbook and regulations given to decision-makers—both those in the Treasury and obviously those who are to be responsible for universal credit—in order that the level of understanding is of a high nature? When someone goes to court and gets a sentence, we can see that being clearly identified. However, there may be occasions when this is dealt with outside the court through an administrative procedure, in which case there needs to be a clear understanding of when these heavier sanctions will be applied.
I understand that the decision-makers will also be given a level of discretion about the boundaries between some of these sanction periods. Can my noble friend say a little more about the nature of that discretion and whether a framework will be given to the decision-makers in each of these cases, so that we have some certainty that the worst and most difficult offenders will be given the heavier sentences? Will there be any form of appeal internally, apart from the normal tribunal case, where someone has appealed against their sanction? Perhaps my noble friend could give us some idea of how that mechanism will work.
Lord Freud
My Lords, let me try to deal with the points raised. There was a rather interesting question from the noble Lord, Lord Eatwell, about the division between what I think he would call the crooks and the desperate. The best way I can approach that is to look at the way in which fraud develops. I think it is right to say that 80% of the fraud develops out of people not informing of a change of circumstance. There is a drift there that indicates that we are not talking about that many who are desperate because, in one circumstance, people were clearly functioning at a certain level of benefit or tax credit. They then got supplemental income elsewhere and kept the extra, to which they were not entitled. That is quite a typical fraud, so on balance we are talking about crooks here. That is the best figure that I can give the noble Lord. I certainly have not seen anything better, and as your Lordships can imagine I see quite a lot of data.
One of the points that my noble friend made at the end of his last question was about discretion. I must make the point that we are now talking not about the conditionality sanctions, which this can often be confused with, but about people who have committed fraud, have usually gone to court and have had a punishment laid down by the court. There is no doubt about that and it is not in the discretion of our decision-makers. That is not true at the margins, where people accept an administrative penalty, which is at a much lower level. However, as you move up the scale, with repeat offences and the serious offences that we are most concerned about, it becomes a court matter and, to that extent, is not a matter of our codification. The serious offences that I am talking about are laid down in regulations. I speak from memory but I think we are talking about £50,000 offences, serious identity fraud such as trying to pass yourself off with a different identity: that kind of thing.
On my noble friend’s last point, we are bringing the regulations on working tax credit closely together with what happens to today’s benefit system, with a view to pulling both of those into the UC sanction regime. They are being pulled together with a view to there being relatively little change in the overall approach and amount when UC comes into effect for particular people.
I think that covers all the issues that have been raised. The amount of money, £1.9 billion, is substantial, and we want to make sure that it is fully realised that this is not acceptable or safe behaviour. I do not have to hand a comparison with our estimates on tax evasion and tax avoidance. Tax avoidance, as the noble Lord, Lord Eatwell, will be fully aware, is a different matter from tax evasion, but our concern about tax evasion is at absolutely the same level—it is the same offence as defrauding the benefits system.
We need to send out a strong message that this type of fraud is not tolerated. We also believe that, although fraudsters must be promptly and severely dealt with, innocent parties should be protected, which is why this relates only to working tax credit and not to child tax credit, and why we will only reduce working tax credit by 50% in households where one member of a couple has not committed an offence.
I seek the support of noble Lords for these regulations. Indeed, I hear that I have it and I commend them to the Committee.
Neighbourhood Planning (Referendums) (Amendment) Regulations 2013
Lord Ahmad of Wimbledon
That the Grand Committee do report to the House that it has considered the Neighbourhood Planning (Referendums) (Amendment) Regulations 2013.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments.
Lord Ahmad of Wimbledon
My Lords, neighbourhood planning is a vital part of the Government’s reforms to help local communities play a much stronger role in shaping the areas in which they live and work and in supporting new development proposals. For the first time, community groups can produce plans that have a real statutory weight in the planning system. Neighbourhood planning is therefore one of the most exciting innovations of the localism agenda.
We are delighted that neighbourhood planning is taking off across the country. Indeed, we are aware of more than 500 places looking to bring forward a neighbourhood plan and to shape the development and growth of their local areas. More than 400 of these have taken formal steps to have their area designated. Three plans have already passed the independent examination stage, and the first to reach a referendum was in Upper Eden, which saw 90% of local people, based on a turnout of 34%, voting in favour of the neighbourhood plan. This was a positive result for the 17 parishes of Upper Eden that are now able to deliver new homes on farms, houses for older people and more affordable housing in a way that suits their local character and needs. Other areas are hot on the heels of Upper Eden and we expect to see many more neighbourhood plans in the very near future. Regulations governing the conduct of neighbourhood planning referendums, of which Eden was the first, were considered last year.
The Localism Act also provided for some areas to be designated as business areas where they are wholly or predominantly commercial in nature. In such areas, non-domestic ratepayers will be able to vote in a business neighbourhood planning referendum. This provides the opportunity for businesses to take the lead in neighbourhood planning. We are already seeing this happen in practice in central Milton Keynes, where it is proposed to develop a dynamic city based on high-quality buildings and spaces. Businesses are also taking the lead in areas such as Trafford Park, central Ealing and Liverpool Innovation Park.
The Neighbourhood Planning (Referendums) (Amendment) Regulations 2013 amend the 2012 regulations to provide for the conduct of “business referendums”, which will be required to be held alongside a “residential referendum” where it relates to whether a neighbourhood plan or a neighbourhood development order should come into force in a designated business area.
I shall briefly summarise the main provisions of the amending regulations. Regulation 4 requires a local authority to fulfil certain publicity requirements relating to the referendum and imposes certain time limits by which notice of the referendum taking place must be given. This is 56 days where a referendum in a designated business area is required to be held, rather than the 28 days where a referendum is held in the residential neighbourhood area. This longer period was the outcome of discussions with the Electoral Commission and local authorities and was considered necessary to allow for the effective registration of non-domestic ratepayers.
In a designated business area, there will be two referendums, one for residents and one for non-domestic ratepayers. Regulation 7 therefore provides for the residential referendum to be held on the same date as the business referendum. As with referendums more generally, a register of those eligible to vote is required. In order to compile this register, a specific registration process is needed. Schedule 1 provides for the creation of a business voting register of all the non-domestic ratepayers who register to vote in a business referendum, for the purposes of that referendum only. The business voting register lists the names of all the non-domestic ratepayers who have registered to vote and the addresses of the premises within the referendum area on which they pay non-domestic rates. In practice, a local authority will send a registration form to each non-domestic ratepayer of which they are aware, and each ratepayer will nominate an individual, which may be himself or herself—the “named voter”—to vote on behalf of the business.
Schedule 2 sets out the detailed rules to be followed when conducting a neighbourhood planning business referendum. This includes the rules in relation to the content of ballot papers and other voting forms, the operation of polling stations, the counting of votes and the declaration of results.
Schedule 3 applies, with necessary modifications to existing electoral law, to the conduct of neighbourhood planning business referendums. In short, the amended regulations will put in place the rules needed to ensure the effective administration of neighbourhood planning referendums in business areas, in which the electorate can have confidence. In large part, they follow a tried and trusted practice. An external group of interested parties has been used to help develop the amended regulations in a manner that ensures that they can be effectively implemented. This particular group includes the Electoral Commission and the Association of Electoral Administrators, both of which have fed into the process and commented in detail, in particular on the business referendum registration forms. I take this opportunity to thank them for their contributions in assisting us to develop these particular regulations. In line with best practice, the registration forms have been tested with business users for design, clarity and impartiality. I am therefore confident that the amended regulations will ensure efficient and effective administration of any neighbourhood planning referendum in a designated business area. I commend the regulations to the Committee.
Lord McKenzie of Luton
My Lords, I start by thanking the Minister for a very full and clear explanation of the order we are considering today. Like the Government, we very much support neighbourhood planning and the engagement of business with that. However, it is important that we do not make the process overly bureaucratic and expensive. In introducing this, the noble Lord referred to the fact that 500 places were developing a neighbourhood plan. How many business districts have been created to date? I am just trying to see the dynamics of that. Can the Minister tell us how the timing works? If a neighbourhood plan is being developed but there is a business district component, or a potential one, how does that all work? If the plan is some way to being finalised, does that preclude a business district coming in? Presumably the idea is to get the business district there at the start. Given that nothing like 500 business districts have been created yet, how does that all work in practice?
I have one or two questions on the specifics of the regulations. It is clear that there is one vote per business, however many separate hereditaments are involved. How does that work within a group? Are separate members of a group separate voters for this purpose or is there some sort of aggregation of that for connected parties or formal group companies? What happens if a business goes into administration? Is it then precluded from participating? Presumably, that depends a little on what stage the administration has reached.
In Part 2, in Regulation 8(2)(c), there is a requirement to specify the rateable value. Why is that? Presumably that itself is not relevant to the entitlement to vote. What happens to a hereditament that is entitled to 100% relief on one basis or another? Does that still create an entitlement to vote under these regulations? I think the question has to be the same for individual voters and a voter on behalf of a business hereditament but perhaps the noble Lord could confirm that.
Obviously, we broadly support the thrust of these regulations but I would be grateful if the Minister could say a little more about the dynamics of how these fit together, how that is working in practice with all this activity in the development of neighbourhood plans and how business districts so far are fitting into that.
Lord Ahmad of Wimbledon
My Lords, first, I thank the noble Lord, Lord McKenzie, for his broad support. I am delighted that we are putting forward these particular regulations. The noble Lord asked how the two are linking up, at a very high level. It is very much the final piece in the jigsaw of how neighbourhood planning comes together, which is allowing neighbourhood planning referendums to happen up and down the country.
There were some very specific questions and I will seek to answer each one in turn. If I do not answer all of them, I will write to the noble Lord in detail on those particular matters. He raised the question of how many business districts have been created. Only three neighbourhood areas have so far been designated as business neighbourhood areas but there are a number of other neighbourhood areas that are seeking to be so designated. I believe it to be at least another seven. There is a particular measure or standard to be met for the designation—that the area is in effect wholly or predominantly commercial—so there are criteria in this regard. The regulations will also allow leading businesses and neighbourhood plans to proceed towards examination and referendum, and provide a powerful opportunity for local residents and businesses to work in partnership to attract investment and to shape the future development and growth of their local areas.
The noble Lord asked how the timing works. As I indicated earlier, I believe that the two referendums will work in parallel to ensure that the results, when they are taken in, are consistent and the decision can be based on the outcome of both together. One of the things I would raise that is linked to that, which was a question I certainly raised when looking at this, was what would happen if there was a variation between the result of the business referendum and the residential one? Bearing in mind the spirit of local neighbourhood plans, it would remain the remit of the local authority to adjudicate on the difference between the two referendums.
The noble Lord also asked about one vote for every business. That is true irrespective of size. He raised a quite specific issue of registered groups of businesses. Speaking with my business hat on—I will seek clarification if what I say is not correct—if it is a separate established entity within that local area, it would be one business, one vote. If there is a single group with a single address then, no matter how large the actual business, there would be one particular vote for that business as well.
The noble Lord raised the issue of what happens if the business goes into administration. It would depend on the exact situation and I will seek clarification on that. I am being told that as long as they are on the non-domestic rating list, they have a vote. However, that is a separate question and, coming back to the issue of whether they have gone into administration, I will clarify that point. If they are in a business that has already gone into administration at the start of that referendum process, I assume they would not be included.
The noble Lord, Lord McKenzie, also asked how companies that have 100% rate relief would be managed. As long as they are on the non-domestic rating list they have a vote as well. He also asked about how and when an area is designated. When designating a neighbourhood area, local planning authorities must consider whether to designate the area as a business area, which is a neighbourhood area that, as I have already said, is wholly or predominantly business in nature. These are areas in which an additional business referendum is required to be held alongside the residential one. He asked about the question that would be posed on the business referendum and the residential one. As far as I understand, bearing in mind that the results would need to be consistent, the question posed would be the same as well.
As I have said to the noble Lord, if there are issues that I need to clarify I will, of course, write to him. However, I think I have covered, if not all, most of the questions he raised.
Lord McKenzie of Luton
I thank the Minister, who has indeed covered a lot of the questions that were posed, but would be grateful if there was anything further that he could say about the dynamics of business districts. If there are 500 neighbourhood plans on the way but only there business districts, clearly business districts are not leading the charge on this. Where a neighbourhood plan is being contemplated by the residents of a designated area and then a business district is created as part of that, which could happen, I am trying to see how it gets its foot in the door in terms of participating in the development of the plan. Is there a risk here, or could the circumstances be such, that the neighbourhood plan is developed by the residents of an area and a business district is created later? I think that a referendum would have to take place at the same time, with the same question, but is the business district the business community’s opportunity to engage in the development of that plan? Perhaps the Minister will write if he is not able to cover that issue today. I thank him for his other answers.
Lord Ahmad of Wimbledon
I will write to the noble Lord specifically in response to that point, although I am sure that he will know from his own experience that the neighbourhood planning issue will remain, in his word, “dynamic”. Input into it, to see how neighbourhood plans can be improved for each local area, needs to be reflected and dynamic in its own nature. Based on the answers that I have given and my earlier comments, and acknowledging the noble Lord’s support, I commend these regulations to the Committee.
Non-Domestic Rating (Levy and Safety Net) Regulations 2013
Lord Ahmad of Wimbledon
That the Grand Committee do report to the House that it has considered the Non-Domestic Rating (Levy and Safety Net) Regulations 2013.
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments.
Lord Ahmad of Wimbledon
My Lords, these regulations put in place the last elements needed for the operation of the rates retention scheme in 2013-14. That scheme, as we have discussed previously, is designed to deliver the Government’s objective of returning an element of business rates to local control in a way that incentivises authorities to work with their local business communities to improve economic conditions in their local areas. It does so through a partial redistribution of business rate resources, taking account of the individual authority’s needs, in order to provide a fair starting point for each local authority. That starting point is fixed until the next reset of the scheme in 2020, and any growth in business rates above this starting position is shared between central and local government and can be used by authorities to support local services and stimulate further growth.
As the Committee will appreciate from looking at these, and earlier, regulations, while the principle of the rates retention scheme can be explained simply enough, the mechanics needed to deliver it are both complex and technical. Therefore, before turning to the detail of the regulations, it may be helpful to the Committee if I first remind noble Lords of the technicalities of the scheme and the mechanics of establishing authorities’ starting positions.
The key to the scheme is the establishment for each authority of two numbers: its baseline funding level and its business rates baseline. Its baseline funding level reflects the level of resources that the authority should have under the rates retention scheme, taking account of its needs and the availability of other resources such as council tax. Its baseline funding level, together with the level of revenue support grant that it will receive, the RSG, represents the authority’s share of general government funding—the 2013-14 equivalent of its formula grant entitlement.
The second number, its business rates baseline, is the estimate of each billing authority’s business rates income in 2013-14, apportioned between that authority, central government and major precepting authorities in accordance with the shares approved by Parliament in the local government finance report. If the authority’s business rates baseline is more than its baseline funding level, it is required to pay the difference to the Government in the form of a tariff. Tariffs are then used to provide top-up funding to those authorities whose business rates baselines are less than their baseline funding levels. Because of the way in which the scheme is set-up, tariffs and top-ups sum to zero and, moreover, are fixed for the duration of the scheme. This provides the fixed starting position against which future growth can be measured and retained.
However, as we discussed during the passage of the Local Government Act 2012, while incentivising growth is vitally important, we all recognise that business rates at the local level are, by their nature, subject to a fair degree of volatility. This is a key issue. As a result, if we did nothing else, in any year authorities could see their resources fall, perhaps quite considerably, and this could leave them with less money than implied by their starting position. Reductions in income could be because of changes to commercial property. To take an example that has recently been in the news, one need only think of the impact on North Warwickshire’s business rates of the closure of Daw Mill colliery to understand the impact of such changes. I know that this is a challenge for local authorities that find themselves in similar situations. It could also be because of successful appeals against rateable values, which lead to an authority having to refund rates in respect of a number of previous years. For whatever reason, we quickly concluded that the scheme needed some way of mitigating the effect of local volatility. Having looked at this and discussed it with the local government sector, we concluded that the best way to do this was through a safety net.
Overall, the rates retention scheme provides authorities with about one-fifth of the general funding available to them through business rates, council tax and revenue support grant. The safety net works by ensuring that the one-fifth available through business rates can never fall by more than 7.5% before the authority receives assistance. The safety net is financed from a levy charged on the most highly resourced local authorities when they see growth in their business rates.
With that preamble, I turn to the regulations themselves. These give effect to the levy and safety net by reference to baseline funding levels and business rates baselines that have already been set out in the local government finance report, and which are set out for each authority in Schedule 2. Importantly, Regulation 5 provides that the baseline funding level is indexed every year so that the level of protection available through the safety net keeps pace with inflation.
The regulations provide for the calculation of levy rates and safety net thresholds in Regulation 6. The safety net threshold is set so that no local authority can see more than a 7.5% reduction from its baseline funding levels. This gives force to the policy that I have just described and ensures that authorities will have reasonable stability of income from which to deliver important local services.
The way that the levy is calculated means that only those authorities that pay a tariff—that is, those that, at the start of the scheme, have more business rates than their baseline funding levels—will ever be levied. Authorities with relatively small business rates bases will never be levied, and will be allowed to keep all of the growth that they achieve.
Regulation 7 means that authorities are able to receive a safety net payment on account during the course of the year. The payment will be based on the authority’s own estimates of the business rates income that it seeks to collect. This provision ensures that authorities do not have to wait for the final outturn figures before receiving safety net assistance, and therefore do not suffer cash flow problems through having to wait for funding.
I do not pretend for a moment that these regulations are not complex; indeed, I said that at the start. However, they have been developed with the working group that we set up to help us work through the finer details of the implementation. They have therefore benefited from the practical help and advice of those in local government finance departments who will have to work with the scheme and with the detailed regulations. We are confident that, with their input and the consultation that has taken place, the regulations will deliver the policy to which the Government are fully committed. I commend them to the Committee.
Lord McKenzie of Luton
My Lords, I thank the Minister for introducing these regulations. As the Minister said, they are quite complex. Holding concepts such as business rates base line, base line funding levels and retained rates income in one’s mind is a challenge—certainly for me—as one goes through the detail, but I think I understand the thrust of what is before us.
Clearly, we support a safety net system, but as we argued during the passage of the primary legislation, we would wish to see the threshold at a level higher than 92.5%. Just as the noble Lord raised the example of the dire consequences of particular closures on the finances of a local authority, we argued when the primary legislation was being considered that, when a local authority is faced with the prospect of the major regeneration of an area, there ought to be arrangements in place so that it would of its own volition see a significant drop in its business rate base for the specific purpose of regenerating an area, and hopefully building a much bigger rate base in the future. I do not think that those circumstances are specifically catered for here. We also anticipated the problem that a local authority might cope with a 7.5% fall for one year, but there is no additional relief should that recur year on year. This may not happen in many circumstances, but the cumulative effect is not catered for here.
What is the overall estimate of levy amounts and safety net payments to be collected next year? I think the noble Lord said that tariffs and top-ups will sum to zero, but for the provisions that are before us—the safety net and the levy—what are the separate estimates of those two amounts for next year?
I have one or two other specific questions. On the safety net, why is the schedule of payments cast in the way that it is under the regulations and what is wrong with a Friday? Apparently, when a payment falls due on a Friday, one is not permitted to send or receive it; one has to wait until the next business day. I am not quite sure why that is. Can the Minister expand a little on the types of adjustment that flow from paragraph 1(4) of Schedule 1—for example, the effect of adjustments made for amateur sports clubs and the circumstances in which deductions are permitted or not? What are the criteria that separate the different categories of arrangements? Subject to those points, I have no further issues to raise.
Lord Ahmad of Wimbledon
My Lords, again I thank the noble Lord, Lord McKenzie, for his support for what the Government are seeking to do. As a general point, I know—and I am sure the noble Lord will share my experience—that when we were looking at introducing the whole issue of business rates and the ability of local authorities to retain the 50% business rate, it was done irrespective of political affiliation. It has been campaigned for long and hard at a local authority level. I am glad that a broad level of support has been given.
The noble Lord raises some general points, particularly in relation to places that struggle to attract growth, which is indeed a driver for increasing the level of business rates. This system of tariffs and top-ups is intended to ensure a stable starting point. There may be some local authorities that fall from year to year below the 7.5%. For them there is additional funding available—for example, the efficiency support grant for those councils that face a loss of more than 8.8% in their spending power.
A few other aspects in this regard are index-linking tariffs and top-ups to RPI, which ensure that councils with low tax bases and high needs see a major part of their income uprated by RPI. Also, the concept of a safety net will ensure that public service provision does not suffer as a result of the local volatility mentioned in my opening remarks. A safety net threshold of 7.5% is the most generous level consulted upon. As the noble Lord acknowledged, this will guarantee local authorities a minimum of 92.5% of their business rates levy.
Lord McKenzie of Luton
I thank the Minister for his answers, but I do not think I asked a question that I intended to ask about the baseline funding level, which is uprated each year. I think I read that it is uprated by the small non-domestic rate multiplier. Why that metric?
Lord Ahmad of Wimbledon
This is the point where I look over my shoulder. I think the noble Lord is correct on this. There may be some elements of local government finance that during my time I sought to understand. He is correct in his interpretation.
Lord McKenzie of Luton
Why is that multiplier used? The Minister can write to me.
Defence: Procurement
(11 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Dean of Thornton-le-Fylde
To ask Her Majesty’s Government what are their policies towards and priorities for defence procurement.
Baroness Dean of Thornton-le-Fylde
My Lords, this Question for Short Debate covers a huge area and we are not going to be able to cover it all in one hour, so maybe we need to come back to this issue at a future date. My work for today has been substantially assisted by the helpful report by the House of Commons Defence Select Committee dated 5 February.
Defence procurement has dogged Governments from all sides of the House for many years because of delay, cost overruns and changing capability. Taken together, all of these have often had an impact on the capability of our Armed Forces. Despite many reports from the House of Commons Select Committee, the National Audit Office and others, the problem appears to be intractable and one that Governments somehow cannot get to grips with. In 1997 the incoming new Labour Government were faced with cost overruns and delay on the Eurofighter, Merlin and Tornado programmes, to name a few. So the statement after the 2010 election about the budget deficit being so big and it being down to the previous Government entirely is not quite the full picture; it is an issue that has faced many Governments, including this one. As the Select Committee report says in paragraph 15, “The decision in 2010”— after the coalition Government were elected—
“to change to the carrier variant of the Joint Strike Fighter was … rushed and based upon incomplete and inaccurate policy development. It … led to increased costs to the carrier strike programme and a delay in the in-service date of the carrier”,
as well as,
“the early decommissioning of the Harrier”.
The decommissioning of the Harrier has, of course, attracted an awful lot of attention and, certainly, critical comment from many people who know a lot more about this issue than I do. There has been regret in the services about the early demise of the Harrier jump jet.
However, Ministers in the MoD have been extremely active. We have a report from Bernard Gray, commissioned in 2009 by the previous Government, and the Levene report, to name just two major pieces of work, as well as the National Security Through Technology White Paper. Through those, together with the Defence Committee report, I have been able to gather together information for our debate today. It is impossible to cover all the issues, as I said, but I would like to cover the transition of security and the UK-based skills requirement that it brings with it; the defence procurement structure itself; research; and the defence budget.
On transition, we are witnessing a Government who have moved from a defined list of sovereign capabilities, which we had under the previous defence industrial strategy, to the current approach in the defence and security White Paper—it appears to be reflected in government documents—for off-the-shelf acquisition where that is possible, with a less defined list of sovereign capabilities. That leads me to my first question for the Minister. What are the Government’s plans to ensure that the need for skills and for an affordable programme is met? In industry, transitional periods are always more expensive than a flat state. New skills will be required for this different type of procurement. What are the Government’s plans on that?
For instance, there is a need to ensure that decisions are made about the long-term sustainability of the complex warship build programme and the transition from the Type 45 to the Type 26 programme, which will require key skills, some of which are not there today. That brings with it questions of related affordability and how that impacts on the MoD budget. Decisions are also required on the capability of Typhoon, particularly if we want to maximise our potential for export markets in that area. Another area is the topic of unmanned systems. We are good at this in Britain—we have extremely good skills—but what is government policy in this area?
Those are merely three areas of capability, but all are resource-demanding. What priorities have the Government set across the general board of procurement? Decisions such as these have a profound impact on the defence industry and on provision, so that industry can plan and have the confidence to invest in its workforce rather than making people redundant, providing the right skills to make sure that we can manufacture defence here in the UK. It is an issue to which the Defence Committee report refers as important in its last recommendation, number 198, about the skills base.
The structure of defence procurement is a wide area. The Bernard Gray report talks about changing it. There were two possible models of procurement: an executive non-departmental public body or a government-owned contractor-operated organisation, commonly called a GOCO. At a conference in March 2011, the author of the report, Bernard Gray, said that it,
“seems extremely unlikely this idea, GOCO, will be pursued given the lack of support it received”.
Yet the Government appear to have stopped all work on any other model and are concentrating on GOCO. I thank the Minister for the briefing that we had on that at the MoD. I now ask him where government thinking is on this. What hurdles do the Government anticipate, and how do they intend to overcome them when we are talking about our international allies? How will our allies react to that change to a government-owned but contractor-operated system? Defence procurement is an expensive business, and getting more expensive. It is highly unlikely that any one nation will be able to fund its own defence in future. In fact that is already not the case today; we have to work in concert with our allies.
We have a good research base in the UK. It has worked well for SMEs, academia, the MoD itself and the defence industry. Paragraph 114 of the Select Committee report asks the Government to target 2% of the MoD budget to be spent here in the UK on UK-based research and development. What is the Government’s response to that? Do the Government agree that we should be aiming for that target?
In the Statement on 14 May 2012, the Secretary of State announced that the budget had been brought into financial balance. He also announced that, for planning purposes, it had been agreed with the Treasury that a 1% per annum real increase in the equipment and support budget would apply from 2015. Can the Minister confirm that this additional 1% in real terms for the defence budget will be new money, not money that the MoD has to find from its overall budget? Obviously, a large part of the rest of the budget is personnel spend. Will that increase apply from 2015? In conclusion on the defence budget, it seems odd logic that, whereas all our non-allies—China, North Korea and other countries—are increasing their defence spend, we in the western world are reducing ours, and doing so to an extremely concerning point.
I said that I could not cover all the points in this short debate; I hope that we can return to this topic. It would be helpful if the Minister could answer those questions. On the key issue of GOCO, will the Minister confirm that no final decisions have been taken? I look forward to his reply, and to hearing what the small number of colleagues taking part in the debate have to say.
Lord Palmer of Childs Hill
My Lords, I thank the noble Baroness, Lady Dean, for instigating the debate. We are obviously not the popular debate in this and the other House today. I thank in advance my noble friend the Minister who, as the noble Baroness has said, gives us such good briefings. I am also grateful for the briefings that we get when we have such eminent speakers, which have always been incredibly useful.
The noble Baroness, Lady Dean, has covered a wide area in her 10 minutes. I will try to add a few things, having made notes as I have listened. The sad fact is that defence procurement has for far too long been a drag on our forces’ expenditure and national expenditure. Purchases have proved sluggish and inflexible, delivering equipment and resources late and over budget. That is not only the case now; it has been in the past as well. That is why the coalition Government have been right to challenge the way in which defence procurement has operated. As the noble Baroness has just said, the Government have a full battery of reviews to consider. She mentioned a couple: the Levene review, Bernard Gray’s materiel strategy work and the procurement review of the noble Lord, Lord Currie.
The Government have also had the benefit of what is described as the,
“large number of responses with a wide variety of views”,
to their own Green Paper, Equipment, Support, and Technology. As has been mentioned, there comes a point when decisions must be made, improvements found and efficiencies delivered. One example is the question of the future of defence equipment and security examined in detail by Bernard Gray, as the noble Baroness has just said. His proposals for government-owned contractor- operated procurement created wide ripples, and the Government need to be clear, as the noble Baroness, Lady Dean, said, how they intend to take that forward. That is obviously very important.
How will the Government respond to the broader concerns about the skills required to reform our process of defence procurement: finance, engineering and project management? Above all, the skills of estimating cost, both on expenditure and available resources, must be strengthened. We are pretty weak in estimating the cost of the final bill. Overall, procurement for our forces must meet our responsibilities both to our service personnel under the Armed Forces covenant and to the British taxpayer in securing value for money. The coalition Government have much overdue work to do on both fronts.
How much value, or cost, do we have in store on the shelves, and how often are these stores called upon? Does the MoD just order from suppliers rather than look around the shelves on some stock control system to see what we have? Very often it is easier to ring up your supplier rather than take it off the shelf. What of value do we have on our shelves and would we be wise to seek a buyer, or buyers, for this equipment if it is not moved or even required for a long time?
I thought hard about an example, which came to me because I was talking to some United States Air Force colonels who came to this House a few days ago. I talked to them for 30 minutes. They use Harriers. Do we have spare parts for Harriers? The noble Baroness, Lady Dean, mentioned them when she spoke. If we have spare parts for Harriers, perhaps we should sell them off to the United States Air Force. When we spoke about parts, it said, “We need Harrier parts”. I did not initiate that; it is what it said.
Before the Government go on even a moderate ordering or buying spree, all in the correct defence of the realm, what work is done on estimating what conflicts are likely? Procurement cannot be taken in isolation; it is about estimating what is going to happen. I could give many examples but I do not think you can divorce the discussion on procurement from what is going to happen with Trident, which is a very expensive weapon. I know that a review is being undertaken, supervised by Danny Alexander MP, but the actual cost of Trident is going to weigh down on a lot of our procurement strategy, whether we have it or not and whether we have like-for-like renewal.
Do we want armoured vehicles for hot or cold climates? Should they be for coping with roadside explosive devices? The old vehicles used to get blown up because they could not cope with that. Can we think what conflicts are going to happen and where those vehicles will be needed?
The noble Baroness, Lady Dean, talked about the Armed Forces covenant. Uniforms and other personal equipment are also part of our procurement strategy. Do we need uniforms for the Arctic—there was a piece on television recently showing our forces training in Arctic circumstances—or will they be needed in the desert? We may have the horrible feeling that they are training in the Arctic, as I saw on television, but the next conflict may be on sandy terrain. Perhaps we need to know what equipment and uniforms they will need when a large proportion of them will be based on Salisbury Plain. Salisbury Plain, the Arctic, the desert—we have to make a good guess at where the conflict will be.
The noble Baroness, Lady Dean, mentioned carriers and various other warships. It is no good harking back to the past, but we have two carriers. The expenditure on them gave lots of good employment—but did we need them and do we need them? We do not have the right aircraft to fly off them at this time. Our estimation of what we need is easily exemplified by the fact that the previous Government made a decision to build carriers when we did not have the need for them, the facilities to build them or the aircraft to fly off them. The defence picture facing the United Kingdom is changing rapidly.
Lord Davies of Stamford
I am sorry to interrupt but I cannot let that remark go unchallenged. The previous Government indeed committed themselves to buying two new carriers. We would have continued to have the aircraft to fly off them—the Harriers—and we ordered the F 35s to replace them. It was an entirely coherent, responsible and balanced decision.
Lord Palmer of Childs Hill
I thank the noble Lord for his intervention, but the fact is that we have two carriers that are not well used at the moment, and there is also a story that one of them will be sold off or mothballed. That is the situation now, but I take the point that the decision on aircraft was changed. That had an effect, and the Minister may wish to reply on that point.
To conclude—which is what I was about to do when I took the intervention—the defence picture facing the United Kingdom is changing rapidly, and our Armed Forces demand and deserve equipment that is up to date and responds to the risks and challenges that they face on our behalf. Nothing is more important than working out what conflicts there might be, where we estimate that they will be, what equipment will be needed for them, whether we should buy off-the-shelf equipment manufactured in this country or use the goods we have in store, and whether we should realise the money invested in the goods in store if we are not using them.
Lord Touhig
My Lords, last July the Minister repeated a Statement in your Lordships’ House in which the Government acknowledged the MoD’s historical budgeting woes. By now, most who are familiar with defence procurement agree that the Government underbudgeted and overassigned, that the Civil Service was challenged to manage such complex programmes because of its lack of expertise and skills, and that the policies of procurement unfairly burdened taxpayers. Clearly the Government now want to correct these failings, and it would appear that their preferred option is a privatised, government-owned contractor-operated partnership, about which we have already heard.
When one remembers the G4S security contract awarded for the 2012 London Olympic Games, it would seem that the Government’s record on privatised partnerships leaves much to be desired. I wonder also whether the Olympics security project suggests that even stable private partners struggle with assignments of unpredictable scale. The history of defence procurement over recent years certainly shows that scale is unpredictable. In an interview with the Defence Management Journal on 28 January, ADS chief executive Rees Ward warned that no country, and especially no military superpower, had adopted a government-owned contractor-operated scheme for procurement. In February this year, the Defence Select Committee in the other place expressed worries about GOCO and stated that it was vital that we consult our allies to ensure that there will be no adverse impact on co-operation. This point was made by my noble friend Lady Dean. Indeed, the chairman of that committee, Mr James Arbuthnot, said:
“We expect to be given more detail about the GoCo proposals”.
If the Government pursue this private partnership, that will require aligning with a company or companies that can manage a diverse programme of responsibilities and needs including armaments, supplies, training and the welfare of our nation’s Armed Forces. The partnership will certainly require invalidating or restructuring existing contracts, negotiating new business procedures, determining the Government’s ownership stake and rethinking the role of the Civil Service.
However, the GOCO strategy raises a series of questions that few in government appear to have considered. For instance, do the Government expect to find a private partner of equally diversified expertise in infrastructure—one that can manage acquisitions for Britain’s defence system? Can one partner reasonably manage an entire nation’s defence or will the partnership mean multiple private partners? Restructuring and managing Britain’s defence procurement operations is a project of paramount scale and importance. Considering the G4S summer Olympics embarrassment and the very costly outcome it had for G4S, is defence partnership attractive to the private sector or is the task simply too risky for investment? What happens if the private partner falls short of its commitment, as G4S fell short in 2012 at the Olympics? What happens if needs outgrow the resources of the business partner or, worse, if the partner goes bankrupt? Poorly thought out schemes are risky and the Government have exposed themselves to scrutiny without supportive answers to encourage taxpayers or potential investors.
I have three questions for the Minister. Will the Government consider wealth creation and job opportunities in awarding the defence partnership? Will they maintain a golden share of ownership in any or all of the companies included in the contract to operate the partnership? Will they share a company’s financial burden in partnership, and how will they scrutinise the spending of millions of pounds of taxpayers’ money? The need to ask these questions reflects the Government’s overall indecision and unpreparedness on this matter. Until the Government prepare a more detailed position on procurement, we are simply left with many daunting and outstanding questions.
Lord Rosser
My Lords, I add my thanks to my noble friend Lady Dean of Thornton-le-Fylde for securing this debate on the important issue of defence procurement, on which there are areas of concern and uncertainty, a number of which my noble friend raised. The Government claim to have a balanced budget for defence, but it applies only to the equipment budget, which represents 40% of total Ministry of Defence annual expenditure. The recent National Audit Office report did not even cover that 40% as it did not look at equipment support costs, which make up just over half the total equipment plan cost. The report stated that,
“there is systemic over-optimism inherent in the Department’s assumptions around the costing of risk”,
and that,
“the cost of … procurement projects in the Equipment Procurement Plan has been understated by £12.5 billion”.
The National Audit Office also said:
“Achieving affordability is … contingent on savings being achieved elsewhere in the budget”,
which can only mean the non-equipment budget comprising welfare, housing and manpower.
One of the major outstanding procurement matters, as has already been said, is a decision on the future of Defence Equipment and Support, on which there appears to be some delay. The Government favour moving to a government-owned, contractor-operated organisation, but have not answered many of the points of concern that have been raised, including those raised by the Defence Select Committee in the other place. The opposition position is that private expertise should be integrated in policy-making, since a partnership delivers positive policy outcomes. We have, however, practical reservations about the GOCO model for reform of Defence Equipment and Support. Accountability to Parliament must be retained, and the reasons for outsourcing a £160 billion equipment programme must be much more explicit than is the case at present.
It is not clear with a GOCO what risk is being transferred from the public sector to the private sector. The risk lies with the body or organisation that pays the cost in either financial or reputational terms if equipment is not delivered to specification, to time and within budget. Where that risk currently lies with the Ministry of Defence in the public sector it is not going to be transferred to the contractor-operated but government-owned organisation, not least because no contractor would be prepared to take on such a risk. It is difficult to see what risk at all would be taken on by the contractor. Should the full burden of risk continue to be with the Ministry of Defence, the benefits of the GOCO model and the outsourcing of procurement decision-making become harder to see.
In order to gain or retain an advantage over potential aggressors and enemies, new defence equipment, by definition, will be at the leading edge of technology. That can increase the likelihood of overruns, since new ground is being broken, and, with it, the uncertainties that have to be addressed and the unexpected that may well occur. In that situation the risk has to be borne by the public sector since no company would be prepared to take on such a risk that could well jeopardise their very existence if it materialised.
A private contractor operating a GOCO is presumably going to achieve its return through equipment that is procured rather than through equipment that is not, even though in some cases dropping, or making significant changes to, a project would appear the better option than continuing with it. Under the GOCO proposal with the private contractor, how would the contract incentivise or reward a project manager to meet the time and cost targets of a project if it had become clear either that the costs would be well in excess of what had been estimated or, alternatively, that the specification could no longer be met within the timescale—or, indeed, adequately met at all? We need a broader new culture, with the Government being prepared to return a project to the main gate stage when forecast cost or timescales exceed set targets. Changing specifications and an acceptance of missed targets should not be the norm.
Presumably, under the GOCO, many of the same people as now would continue to be involved in defence procurement, as the TUPE arrangements would apply, with those currently involved being transferred over to the new organisation. If the argument is that a private contractor will somehow be better able to buy in and bring in talented people, then why can the Ministry of Defence not do this? We have a model of private sector management operating an activity in the defence field at Aldermaston. What exactly does the Ministry of Defence feel has been achieved from this that has been beneficial in terms of cost and performance? What experience do other countries have of outsourcing responsibility for defence acquisition? Under the government-owned, contractor-operated scheme, how would the Ministry of Defence retain overall responsibility for UK defence acquisition? Would such a development in this highly sensitive security field have an adverse impact on levels of co-operation with allies?
The greater the extent to which responsibility for UK defence acquisition is outsourced to the private sector then the less knowledge on this vital and security-sensitive area of activity is retained within the military and the Ministry of Defence. There must surely be an argument for nurturing and developing these skills within the Ministry of Defence and providing opportunities for worthwhile and satisfying careers within defence acquisition, rather than seeing defence acquisition as a step on the ladder to another career within the military field. This would help to ensure that the expertise and knowledge are acquired to work with maximum effectiveness with both manufacturers and suppliers, as well as within the Ministry of Defence and the military. We need to be able to offer a permanent professional career choice in procurement, ending two-year stints.
This is surely an area of activity where the Ministry of Defence must retain real knowledge and expertise, bearing in mind the sensitive security nature of defence acquisition, the sums of money involved and the need for a defence industrial strategy which supports appropriate national sovereignty. The House of Commons Defence Select Committee stated in its recent report that,
“the absence of a defence industrial strategy which supports appropriate national sovereignty puts the UK at a disadvantage against competitor countries”.
Procurement power should be used to provide certainty, support supply chains, increase transparency and establish an active industrial strategy in partnership with business. Since the Government seem to regard buying off the shelf as their default position, it is increasingly important to give industry greater certainty—and that means being explicit in the capabilities the Government intend to purchase off the shelf and those they regard as sovereign.
When an effective market exists, competition is the best procurement policy. The reality, though, is that there is seldom a viable market for major defence projects. There must be a case for considering how certain value-for-money tests might be taken into account, including wider employment, industrial or economic factors. Given the social and economic impact of defence procurement, it should be looked at on a cross-departmental basis. Defence decision-making could be made more transparent through the MoD publishing the cost-benefit analysis that provided the basis for awarding contracts, while respecting commercial sensitivities and any classified security issues. This would also add greater accountability, something that was exposed as necessary during the Department for Transport’s west coast main line franchising debacle.
I hope that the Minister will be in a position to provide more information on the Government’s intentions and reasoning on future defence procurement. Defence procurement is technical, and reform to Ministry of Defence internal structures is necessary, but we should surely always remember that the goal and objective for procurement is about delivering equipment when and where it is needed on the front line in order that battles can be won, lives can be saved and operations brought to a successful conclusion.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, I thank the noble Baroness, Lady Dean, for securing this debate to discuss the important issue of defence procurement. It is a privilege to wind up in such an informed debate, and I am very sorry that the noble Lord, Lord Davies of Stamford, was not able to speak, because I always enjoy hearing his contributions.
Lord Davies of Stamford
The Minister is very kind. I was not intending to intervene in his speech, but I take this opportunity to apologise to the Committee for having got the timing so badly wrong and arriving late for this debate, which I thought was going to start a little later than it did.
Lord Astor of Hever
The noble Baroness suggested that we should have another debate on this issue, and I would very much welcome that. A lot of noble Lords have mentioned the GOCO issue in particular. When the situation is clear on that, maybe we could return to it in a more detailed debate.
Today’s debate provides me with an opportunity to explain our policies and priorities for defence procurement and to set them in the wider context of our ongoing defence transformation programme. The noble Baroness has spoken many times in support of our Armed Forces and demonstrated her steadfast concern for the welfare of our service men and women and their families. I know that those concerns are also shared by other noble Lords here today, so I start by paying tribute to the men and women who serve in Her Majesty’s Armed Forces, who provide the ultimate guarantee of our security and independence. That is also why defence procurement, particularly defence equipment acquisition and support, is vital. We need to be able to adapt and configure our capabilities to address tomorrow’s threats and to build more agile forces for the future. Support operations will always be our first priority.
Our approach to defence acquisition is a key element in delivering military capability and ensuring future operational success. The Government’s strategic priority remains to bring the national deficit under control. In defence, we must play our part in meeting that objective. However, we must also meet the commitment in the 2010 strategic defence security review to deliver well resourced and well equipped Armed Forces. To achieve that, the Ministry of Defence is in the process of delivering its largest and most far-reaching transformation programme. We are reforming defence procurement to ensure that we do it better in future and derive better value for money from the defence budget in so doing. We continue to contribute to the goal of reducing the deficit by looking for ways to conduct our business more efficiently, and expect to make £13.5 billion of efficiency savings over 10 years.
As announced in May last year, we have addressed the black hole in the defence budget. Through implementing changes flowing from the SDSR, we have brought the budget into balance. That means that, for the first time in a generation, our programme is affordable within the resources that we expect to have available to us. It provides a necessary foundation for our future approach to defence procurement and the implementation of the reforms recommended by the noble Lord, Lord Levene.
Having established a core equipment programme last year, we are now concentrating on its delivery. We will spend around £160 billion on equipment over the next 10 years, covering our current commitments, the major equipment programmes announced in the SDSR, and deterrent and equipment support costs. In January this year, we published for the first time a detailed summary of our equipment plan, setting out priorities and budgets for equipment procurement and support over the next 10 years. This was accompanied by a National Audit Office assessment of its affordability, and we are delighted that, in its report, the NAO recognised the progress that we had made in putting in place the changes needed to achieve and maintain affordability.
The core programme delivers the major force element set out in the SDSR. This, with the headroom and contingency provision that we have built in to protect the programme from emerging risks, will provide us with the flexibility to determine our procurement priorities in accordance with operational priorities and not simply on the basis of immediate affordability. It will also provide the defence industry with greater clarity on which to plan for the future.
Through the equipment plan we will deliver significant enhancements to our fighting capabilities, including completion of the two Queen Elizabeth class aircraft carriers, significant investment in the Lightning II aircraft—which together will provide a high-end power projection capability for decades to come—completion of the Astute class attack submarine programme, an upgrade to our fleet of Warrior infantry fighting vehicles, continued development of the Scout and significant enhancements to air transport through the new A400M aircraft.
Our first priority for defence procurement has therefore been to establish a solid foundation from which we can deliver the necessary capabilities for our Armed Forces to do their job. We have made good progress in this and, as an ongoing priority, will continue to apply rigorous management to ensure that the budget remains in balance in the years to come.
I would highlight that the latest NAO Major Projects Report, published in January this year, stated that annual cost increases for our 16 biggest programmes in the financial year 2011-12 were only one-seventh of what was in the comparable report two years earlier. Although we have much more to do, we are moving in the right direction.
We have also sought to reform our approach to how we conduct procurement. In February last year, the Government published their White Paper, National Security Through Technology. This provides a framework for equipping our Armed Forces with the best possible capabilities that we can afford through the equipment plan and, in so doing, for achieving the best possible value for money.
We will seek to fulfil the UK’s defence and security requirements through open competition in the domestic and global market and buy off the shelf, where appropriate, to take full advantage of the competitive international market. However, where capabilities are essential to our national security, such as nuclear submarines and complex weapons, we will seek to protect our operational advantage and freedom of action. We will also maintain our investment in science and technology. In taking this approach, we recognise the important part played by the UK defence industry. Our policy, through the White Paper, is designed to provide the catalyst for making UK industry competitive and therefore able to win a large proportion of additional orders within the global market through successful exports. A healthy and competitive defence industry in the UK is able to sustain many UK jobs and thus make a vital contribution to growth and a rebalanced economy. We are also opening up opportunities for small and medium-sized enterprises. In the last financial year, some 40% of contracts by volume were awarded to small and medium-sized enterprises, and there is scope for this to increase still further.
Looking to the future, reforming the acquisition system is a key priority and a core element of our work to transform defence. We will take a major step forward in April, when the new defence operating model goes live and the newly empowered service and joint forces commands assume responsibility for setting equipment and support requirements. This is an important part of our work to implement the recommendations of the defence reform report of the noble Lord, Lord Levene.
Major structural reform of defence equipment and support organisation is also central to this process. It will ensure that we have the structures, management and skills necessary to deliver the right equipment to our Armed Forces at the right time and at the right cost. Preliminary work undertaken to date has identified a government-owned, contractor-operated entity known as GOCO as the preferred future operating model for defence equipment support. This needs to be tested further before any final decisions are made. A decision will be made shortly on whether to move into an assessment phase. If agreed, this would see the GOCO model tested against a robust public sector comparator. This would work towards producing a final business case that will recommend a future operating model for defence equipment and support. We would expect a decision to be made in 2014.
A lot of very important questions were asked. I will do my best to answer them, but I am conscious that I may not be able fully to answer all of them, so in some cases I will write to noble Lords in more detail. The noble Baroness and other noble Lords asked about GOCO and whether a compelling case had been made for reform. Proposals for an assessment phase are currently being considered. If approved, the assessment phase will involve developing GOCO options through negotiations with potential private sector partners. A robust public sector comparator will be developed in parallel. As I said, a decision will be made shortly.
The noble Baroness asked whether a final decision on GOCO had been made. The answer is no. We are currently considering whether to move into an assessment phase that will allow us to make a comparison between GOCO and an in-house comparator. It will look at how far defence equipment and support can be improved in the public sector. The noble Baroness also asked about our allies’ views on GOCO. We are working closely with our international partners to assess the impact of any potential changes and will continue to do so.
The noble Lord, Lord Touhig, asked whether one partner could cope. We envisage that there is likely to be a consortium to cover a diverse range of activities. He asked whether there was an appetite in the private sector. We have engaged with potential partners throughout, and they seem keen. He asked about bankruptcy and falling short. We will ensure that procurement activity does not collapse.
The noble Baroness asked whether there was a government plan to ensure both skills and an affordable programme, and what new skills would be required. The noble Lord, Lord Rosser, also asked about skills and apprenticeships. For defence equipment and support, we are ensuring that we have the necessary skills to ensure that safety is not compromised. We place the highest priority on filling safety-critical posts with suitably qualified people. We continue to recruit apprentices, for example in the field of engineering, to continually refresh our skills base and ensure that we will have the right skills in future to support our Armed Forces.
The noble Baroness asked about the 1% rise from 2015. This applies to the equipment part of the budget, which is 40% of the overall defence budget. It is not a 1% year-on-year increase from 2015. We have taken what we thought was adequate for the equipment budget and increased it by 1% from 2015. The equipment programme is now affordable within available resources.
Finally, the noble Baroness asked about science and technology. A White Paper, National Security Through Technology, recognises the importance of science and technology. The Government are committed to sustaining investment in science and technology at a minimum of 1.2% of the defence budget. The publication of our 10-year equipment plan will enable industry to plan future investment with greater confidence.
I have run out of time. I am aware that I have not been able to answer every question, but I will write to noble Lords.
House of Lords
Northern Ireland: Corporation Tax
(11 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Lexden
To ask Her Majesty’s Government, further to the answer by Lord Newby on 15 October 2012 (HL Deb, col. 1251) and the Written Answer by Lord Sassoon on 6 December 2012 (WA 187), when they plan to announce whether or not corporation tax is to be devolved to the Northern Ireland Assembly.
Lord Newby
My Lords, the joint ministerial working group on rebalancing the Northern Ireland economy has concluded its discussions on the potential devolution of corporation tax and reported its findings to the Prime Minister. The Prime Minister is committed to meeting the First Minister and Deputy First Minister on 26 March to discuss these findings.
Lord Lexden
My Lords, my noble friend will be aware of the deep concern that exists in Northern Ireland over this issue, which is taking so long to bring to a conclusion. I welcome very much the news that he gave us about the forthcoming meeting. Since the Republic of Ireland has a corporation tax rate of 12.5%, it is widely felt that Northern Ireland needs its own low rate to help it to compete for new inward investment. Will my noble friend confirm that there is widespread support among businessmen and employers in the Province for the devolution of corporation tax to the Assembly, and that all the main parties are in favour of it? Have their views been fully taken into account? Finally, I pay tribute to my noble friend and his colleagues for their commitment to rebalancing the Northern Ireland economy by stimulating the growth of the private sector, which the Province needs so badly.
Lord Newby
My Lords, I think that account has been taken of views expressed from many quarters. However, the complication, as the noble Lord will be aware, is that if the Northern Ireland Assembly were to cut the rate of corporation tax significantly, its own budget would have to be cut by an equivalent amount.
Lord Wigley
My Lords, will the noble Lord confirm that the Government have taken on board the recommendations of the Silk commission, which, in the context of corporation tax, recommended for Wales that, if Northern Ireland were to have corporation tax powers, so should the National Assembly for Wales? Given that the Government have welcomed the Silk commission’s first report, will he confirm that that will now happen?
Lord Newby
I am not absolutely sure what the noble Lord is asking me to confirm because no decision has yet been taken on corporation tax and Northern Ireland. The Government are sympathetic to much of what has been said on the Silk report and are now in discussion, as he is aware, with the Government in Wales.
Lord Shutt of Greetland
My Lords, bearing in mind that it is the rebalancing of the Northern Ireland economy that is the reason for people being concerned about the rate of corporation tax, and that is why the joint ministerial group gathered, were there any other ideas that came from that group that would assist the rebalancing of the Northern Ireland economy?
Lord Newby
My Lords, a number of measures were announced in the Autumn Statement aimed at rebalancing, or rather promoting, the Northern Ireland economy, including another £132 million of capital expenditure, science and technology funding for the research partnership at Queen’s University and the slightly earlier decision to give the Northern Ireland Assembly decision-making powers over air passenger duty on long-haul flights.
Lord Richard
My Lords, as I understand it, the noble Lord, Lord Wigley, was asking the noble Lord to confirm that if this happens in Northern Ireland, the Government accept that it would happen in Wales, too. Can he confirm that?
Lord Newby
My Lords, that is something that we will confirm once we have a final decision in Northern Ireland.
Lord Foulkes of Cumnock
My Lords, does the Minister agree that any decision in relation to Northern Ireland does not constitute a precedent for any other part of the United Kingdom because Northern Ireland is the only part of the United Kingdom that has a land border with another European Union country?
Lord Newby
My Lords, that is the reason why this has become such a big issue in Northern Ireland. The same considerations do not apply elsewhere in the United Kingdom, although I remind the House that the differential between the rate of corporation tax in Northern Ireland and the rate in the Republic of Ireland is now significantly less than it was when this Government came into office.
Lord Browne of Belmont
My Lords, will the Minister confirm that the Government will take steps to ensure that any reduction in corporation tax rates in Northern Ireland does not lead to a proliferation of artificial tax avoidance arrangements such as the manipulation of transfer prices and formation of shell companies, which could lead to a loss of tax revenue both in Northern Ireland and in the rest of the United Kingdom?
Lord Newby
My Lords, that is one of the issues which obviously has to be considered as part of this overall discussion. As the House knows, the Government take artificial tax avoidance schemes extremely seriously.
Lord McAvoy
My Lords, I welcome the fact that, after two years of dithering, the Government look as if they are finally coming to a conclusion and a response. However, does the Minister agree that we need action now and not just on the issue mentioned here? Will the Government support our proposals temporarily to cut VAT, give support to small businesses through national insurance breaks and bring forward major infrastructure projects—all of which will give real help to business, construction and manufacturing, get Northern Ireland’s economy moving and put young people back to work?
Lord Newby
No, my Lords. Sadly—from the noble Lord’s point of view—we will not be supporting the noble Lord’s proposals, not least because, taking just the VAT proposal on its own, it would cost about £12 billion. I am not sure where he suggests we should get that money from.
Lord Mawhinney
My Lords, is not the major but unspoken problem that there would be widespread concern that, if corporation tax was devolved to the Northern Ireland Assembly, the Scottish Government would wish to be treated in a similar fashion? If that were the case, by how much would the budget of Scotland have to be reduced from central moneys if corporation tax in Scotland was reduced to 12.5%? Would the Minister expect the First Minister of Scotland to demand that the Scottish budget not be reduced by that amount?
Lord Newby
My Lords, it would not really be at the discretion of the First Minister of Scotland because the Azores criteria mean that if there is a differential cut of tax the region or nation that bears that cut has to take the full fiscal consequences of doing so. I do not have the figure on the cost of such a cut to Scotland. However, bear in mind that the estimate of such a change in Northern Ireland is that there will be a cut in its grant of between £300 million and £400 million. I think that the noble Lord can scale that up for Scotland.
Park Homes: County Court Judgments
Lord Graham of Edmonton
To ask Her Majesty’s Government whether they monitor the resolution of county court judgments, especially in the case of the park homes industry; and, if so, how.
Lord Ahmad of Wimbledon
My Lords, we recognise that there are issues within the park homes industry, and the Government have supported the Mobile Homes Bill to ensure that home owners are better protected and that local authorities can enforce against breaches of site licences. On the resolution of county court judgments, these are not monitored and the civil courts only provide a forum in which individuals can resolve their disputes. However, the Government believe that an effective enforcement system is important and reforms have been made to strengthen these methods.
Lord Graham of Edmonton
My Lords, I am grateful to the Minister for his reply, as far as it goes. Is he aware that last year a park home owner admitted or acknowledged to the Communities and Local Government Select Committee that he had £150,000 standing against his name as unpaid? Does the Minister recall that in the West Country a family of park home owners have £150,000 against their names? Earlier this year, the Isle of Wight dealt with this matter and two park home owners, who have form, were convicted on 11 counts. They were then fined £300,000, and according to the local authority’s press release £275,000 was for compensation. Can the Minister explain why in some cases compensation is guaranteed, when in others it has to be fought for?
Lord Ahmad of Wimbledon
My Lords, as the noble Lord has acknowledged, the Government are taking steps in this regard. Again, I highlight some of the methods we have looked at. The civil courts offer several enforcement methods, including warrants of execution, attachment of earnings, third-party debt orders, charging orders and orders for sale. We have also looked at the ways by which debtors should be providing means. For example, people can apply for orders to obtain information. As I have already said, the Government recognise that effective enforcement is crucial to ensuring a successful civil justice system. However, we are not planning a return to imposing prison sentences for debtors who do not pay their debts.
Lord Marks of Henley-on-Thames
My Lords, does not the Question highlight the need for effective enforcement in many areas—of sanctions against directors of companies of dubious commercial legitimacy and, in particular, a more determined use of directors’ disqualification proceedings against directors who trade fraudulently or while insolvent?
Lord Ahmad of Wimbledon
My Lords, I agree with my noble friend. There are more than 85,000 park homes across 2,000 sites and such instances occur. That is why the Government are taking steps to tackle site owners who take advantage of tenants and then reregister themselves as another company. Through the changes we are bringing forward, we are ensuring that local authorities will issue licences to directors who apply to set up other companies, therefore giving them greater control over the issuing of such licences to people who have been found to be neglectful of their responsibility to their tenants.
The Earl of Courtown
My Lords, the noble Lord, Lord Graham of Edmonton, is well known throughout the House for his support of park home owners’ properties. What sort of protection and advice can Her Majesty’s Government give to such owners on their heating appliances? I gather that in Cornwall in the past 12 months, four people have died as a result of gases and noxious fumes from their heating appliances. Do the Government have any advice for park home owners to help them with this problem?
Lord Ahmad of Wimbledon
I thank my noble friend for his question, which raises a very important issue. Again, this comes down to the site owners, who are responsible for the provision of utilities on the sites. The Government are considering more effective enforcement and looking to work with local authorities to ensure that utility provision is effective and, as my noble friend has highlighted, specifically that the health and safety of people who often may be unable to fend for themselves is protected against unscrupulous site owners.
Lord Kennedy of Southwark
My Lords, why do the Government not monitor county court judgments? It would give them valuable information that they could use in policy development.
Lord Ahmad of Wimbledon
I have already observed that we have to strike a balance. The other side of the coin is that various options are open to people in pursuing county court judgments, which are decisions of civil courts. It remains primarily the responsibility of creditors to achieve a resolution. A range of measures is available, including warrants of execution, attachments of earnings, third-party debt owners and orders for sale, all of which can help in getting a resolution on outstanding issues relating to the obtainment of payment.
Lord Cormack
My Lords, will my noble friend try and ensure that all owners of park homes are given clear guidance on the extra protection that they will have when the Bill that is completing its stages through Parliament becomes an Act? Will he do his very best to ensure that these vulnerable people are aware of their new rights?
Lord Ahmad of Wimbledon
My noble friend is correct. The Bill to which I alluded, and with which the noble Lord, Lord Graham, was greatly involved, seeks to ensure that those with mobile park homes are made aware of their rights and that the obligations of site owners are made clear. My noble friend makes a valid point that I shall take back to the department about the effectiveness of communication across the board in ensuring that the tenants in these properties are made fully aware of their rights.
Lord Hunt of Kings Heath
My Lords, on carbon monoxide poisoning, to which the Minister referred, will he institute talks with the Health and Safety Executive to ensure that installers receive appropriate training in the heating appliances that are appropriate for park home owners? The quality of installation is well recognised to be a big problem.
Lord Ahmad of Wimbledon
I agree with the noble Lord. I remember that when I was a local councillor dealing with these issues on Traveller sites, exactly that kind of undertaking was given by the local authority to ensure the effective and safe provision of utilities. The noble Lord makes a valid suggestion that I am sure we all want to take forward.
Roads: New and Young Drivers
(11 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Gardner of Parkes
To ask Her Majesty’s Government, in view of the proportion of fatal accidents involving young drivers, whether they will introduce measures similar to those in force in Northern Ireland placing restrictions on new and young drivers.
Earl Attlee
My Lords, the Government are committed to improving the safety of young drivers. As part of the ongoing work to reduce the risk of accidents involving young and newly qualified drivers, the department is considering several options to ensure that they are properly prepared and drive safely. We continue to work with young people, insurance companies and key partners in considering any changes affecting learner drivers and those who have just passed their test.
Baroness Gardner of Parkes
Has the Minister seen the case, settled only this month since I tabled the Question, of Courtney Meppen-Walter, aged 18—a £1,000-a-week junior footballer who has played 17 times for his country—who killed two people and injured two children, and was jailed for 16 months? He was exceeding the 30 mph speed limit by 100% and it had been noted that he had been playing games with a VW Golf before the accident occurred. He has now been disqualified for three years. Does my noble friend think that this was just a case of bravado or was it a most unfortunate example of a young person whom other young people would look up to? Is not the matter very serious and should not something be done? That has been resisted by too many Governments in the past when I have moved amendments in favour of such action.
Earl Attlee
My Lords, it is an extreme case but, sadly, it is not unique. Young drivers are prone to immaturity and reckless driving. They can also be easily distracted, especially when driving while carrying other youngsters. We are seeking to reduce the risk of these very sad accidents and will carry on the work of the previous Administration in doing so.
Earl Attlee
My Lords, my understanding is that the work is concentrated on car drivers but, if I have any more information about young motorcyclists, I will write to the noble Lord. Over recent years, there has been a tightening-up of the rules for acquiring a motorcycle licence. I understand, however, that there is a problem in relation to more mature drivers starting to use motorbikes for recreational purposes, and, sadly, the accident rate there is not very good either.
Lord Bradshaw
Can the noble Earl tell the House what progress is really being made? Accidents and serious injuries among young drivers cause the largest number of deaths in that age group. I know he said that the department is considering something, but can he give us concrete evidence of any move which may reduce this toll of unnecessary suffering?
Earl Attlee
My Lords, I agree with my noble friend that a motor accident is a very high risk for youngsters—probably the worst risk for an untimely end. However, the previous Government made good progress in reducing the accident rate and we will continue that work.
Baroness Masham of Ilton
My Lords, would the Minister consider having probationary plates on the cars of young drivers until they are about 21 years of age? If he did something useful, it would be very helpful for all those parents who have lost young people under the age of 21 who were driving too fast.
Earl Attlee
My Lords, probationary plates are one of the things that we are considering in order to deal with that sort of problem, possibly linked with other measures—for instance, not allowing young or new drivers to carry young passengers.
Lord Davies of Oldham
My Lords, of course we are happy to support any measure that improves the safety record of young drivers. However, that does not mean that we support the pricing of young drivers off our roads. The increase in insurance for young drivers last year was 53%. How do we expect young people, particularly in rural areas, to be able to get to jobs, apprenticeships or even education institutions if they cannot afford to run a car?
Earl Attlee
My Lords, the noble Lord makes an important point. Some of the measures we are thinking of have a cost and could have an adverse impact, perhaps meaning that young drivers do not bother with a driving licence at all. Therefore, we have to be very careful about what measures we put in place. As to the noble Lord’s substantive point about the cost of insurance, we are well aware of this. At a previous encounter, I said that my right honourable friend the Secretary of State was shortly to have a meeting with the insurance industry. We intend to hold a further meeting with the motor insurance industry on 25 March, following the successful summits held last year aimed at tackling the high cost of premiums, especially for young drivers.
Lord Howell of Guildford
My Lords, I may be a little out of date but in my day as a Minister in Northern Ireland, which was three decades ago, Northern Ireland had the very useful practice of all drivers having a green sign for the first year after they had acquired their licence. That was 30 years ago. Twenty years ago when I was Secretary of State for Transport, we considered that idea in the department. Would it now be a little premature to reach a decision?
The Countess of Mar
My Lords, does the noble Earl agree that it is very hard to legislate for the exuberance of youths, especially when egged on by other exuberant youths, and that, even with a green plate on the back of their cars, they will test the boundaries of the law as hard as they can? I am not advocating that they should ignore the law but we have to face the facts. We were all young once and did silly things.
Earl Attlee
My Lords, experience from Sweden shows that a longer period of learner driving supervision can reduce the risk of accidents later. It is one of the things that we are looking at and we hope that it will address some of the behavioural issues.
Baroness Farrington of Ribbleton
My Lords, will the Minister ensure that in government discussions with the insurance companies, the issue of young learner drivers, particularly those on motorcycles and scooters who are working and trying to read maps when delivering pizzas, is dealt with? I understood that it was illegal to employ such drivers for deliveries. It is certainly very frightening to look at them trying to read where they are going and not being fully in control of their equipment.
Earl Attlee
My Lords, during the passage of the Road Safety Bill through your Lordships’ House, in opposition I tried to run an amendment along those very lines but it did not find favour. The reason was that a balance needs to be struck between the impact of the measures put in place and the adverse impact, including the adverse economic impact, on youngsters. It is a difficult balance but I understand the point made by the noble Baroness.
Leveson Inquiry
Baroness Boothroyd
To ask Her Majesty’s Government what progress has been made in their response to the Leveson report.
Lord Gardiner of Kimble
My Lords, perhaps I may first remark on the noble Baroness’s extraordinary sense of timing.
Lord Gardiner of Kimble
The all-party talks have been a productive process. It is appropriate to acknowledge the many hours, day and night, that all parties and interests have devoted to these discussions. As your Lordships will appreciate, the Prime Minister hopes that Mr Speaker will allow him and the other party leaders an opportunity later this afternoon to set out what has been agreed. Until then, I can say little more but I know that my noble friend the Chief Whip proposes to make a short statement after Questions about our own business today.
Baroness Boothroyd
My Lords, as we have been told by the media during the course of the morning and by leading Members of Parliament that the cross-party talks have been successful, I feel entitled to put my Question and to have an Answer from the Minister today. Therefore, will the Minister assure the House that the proposed royal charter will be protected by statutory regulation? With great respect, I ask the Minister to answer me clearly on this point: will the charter be legally underpinned against future changes without the consent of Parliament?
Finally, last week, the Prime Minister told us:
“There’s no point in producing a system that the press won’t take part in”.
How many publishers or editors were kept informed of the proposals and have agreed to them? Can they opt out if they wish to do so?
Lord Gardiner of Kimble
My Lords, I am sorry to disappoint the noble Baroness but, as I said earlier, this will be the subject of debate in the other place, and it would be unreasonable to answer now. It would be a courtesy to the Prime Minister and the other leaders if those matters were left for later this afternoon.
Lord Fowler
My Lords, perhaps I may ask a question on Leveson that is not dependent on this afternoon’s events. My noble friend will remember that there was a majority of more than 130 on the Leveson-related amendment proposed by the noble Lord, Lord Puttnam, to the Defamation Bill. He will also remember that a number of people totally overreacted to that and alleged that the Government would withdraw the whole Bill. Will my noble friend confirm that that is not the intention of the Government; that it never has been their intention; and that the Defamation Bill will go through its normal parliamentary process?
Lord Gardiner of Kimble
My Lords, I well understand the point that my noble friend raises about the Defamation Bill and its progress, and I am sure that these matters will be clarified.
Baroness Jones of Whitchurch
My Lords, first, I place on record our welcome for the cross-party agreement that was announced today. In the light of that and following the Question asked by the noble Baroness, Lady Boothroyd, may I push the Minister a little further? Does he agree that it is important that this House debates the contents of the royal charter, which was published only today so many noble Lords will not have seen it? Will he give us an indication of the scheduling of whether and when we might be able to debate the whole of the royal charter, and not just parts of it in other Bills that have already been scheduled for debate?
Lord Gardiner of Kimble
I am afraid to say that, again, this is rather above my pay grade. It is obviously a matter for the usual channels in the first place. I am not in a position to suggest business for your Lordships’ House and that is where the position will have to remain for today.
Lord Soley
I put it to the Minister that the royal charter, a draft of which I read today, is statutory underpinning. I understand the problem that he has about the timing, but we should not worry too much about that. The central message is that we need the agreement of the whole of Parliament to take this forward, if only to give the public the confidence in the press that they need. We also need to remind the press that this is an opportunity for it to change the culture that has done it so much damage over the years. I say that as someone who introduced the Freedom and Responsibility of the Press Bill 23 years—nearly a quarter of a century—ago. Much of what was in that Bill is in a combination of the royal charter and the Leveson report. Therefore, let us work together jointly and give the press the opportunity that it needs to improve its standards.
Lord Gardiner of Kimble
What the noble Lord has said is a powerful statement of a view that many will share; I certainly do. This is an opportunity for the press to change some of the practices that have occurred but should never have occurred. The important thing is not just that we think of the victims but that we ensure we have in place something that means these things do not happen again. What the noble Lord said certainly chimes with me. I am sorry that the timing of this Question is such that I am not in a position to discuss the detail. It would be a courtesy to the leaders of the two political parties in the other place—
Lord Gardiner of Kimble
Three parties—there is no guessing which two I mean. Forgive me, my Lords. It is a courtesy that I would like to retain: the leaders of the three political parties should have their opportunity very shortly.
Lord Dykes
I fully understand my noble friend’s reticence in this matter, but will he confirm at least that the Hacked Off campaign, which mainly represents the victims, has apparently accepted the outline framework of the deal, which should make it easier for all the newspaper proprietors to join in?
Lord Gardiner of Kimble
I saw some of the Hacked Off press conference and I understand that, as the noble Lord said, there is agreement all round. I hope that is the spirit in which your Lordships, and indeed those in the other place, will take this. We need to unite around the proposals if we possibly can and take the matter forward.
Draft Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013
Viscount Younger of Leckie
That the draft order laid before the House on 12 December 2012 be approved.
Relevant documents:15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 12 March.
Enterprise and Regulatory Reform Bill
Baroness Anelay of St Johns
My Lords, I beg to move that further consideration on Report of the Enterprise and Regulatory Reform Bill be postponed until after the debate on the Motion of my noble friend Lady Tonge.
As my noble friend Lord Gardiner of Kimble has just said in response to the Question of the noble Baroness, Lady Boothroyd, this is when I hope to set out the procedure for the rest of today. In doing so, I make it clear that what I am about to say is against the background of very productive and constructive talks among the party leaders, but also, as is usual in this House, constructive talks with Her Majesty's Opposition. The Chief Whip of the Opposition has not only seen what I am about to say, but has been involved in agreement on that matter. Clearly, this House has a prime interest in knowing how it may contribute to the debate on the deal which is coming to fruition and has been long in negotiation over the past weeks but certainly into the early hours of this morning.
There is also a procedural background, which as a business manager I must operate within. I think my English grammar is going a bit awry here, but I will explain to the House where we are in terms of what is happening elsewhere and here, and I will then explain what it means for us today. The House is of course fully aware that my right honourable friend the Prime Minister, together with the leaders of the other main parties, has asked the Speaker of another place for an emergency debate this afternoon on the matter of the party leaders’ response to the report from Lord Justice Leveson on the culture, practices and ethics of the press. Until that debate has started, we will not know absolutely for certain what has been agreed between the party leaders. That is not saying that there is no agreement, it is saying that as a matter of practice we will give them the courtesy of being able to set out what they believe may be contained within that agreement. Until then, we simply have nothing on which we can proceed effectively.
On the timing, we expect the House of Commons to start that debate at about 4.30 pm. In procedural terms, I have moved that our further consideration on Report of the Enterprise and Regulatory Reform Bill be postponed until after the Motion in the name of my noble friend Lady Tonge. To do so will of course enable the House to hear what the party leaders have to say on the matter of the press before we then turn to it ourselves. As noble Lords will know, we have core amendments on the matter of Leveson in the Enterprise and Regulatory Reform Bill today.
I have spoken to my noble friend Lady Tonge. She is aware that we will deal with her Motion first so that she has the first debate. It is my expectation, as it is hers, that the debate on her Motion may not take the full time until 4.30 pm or 5.30 pm. In order to give noble Lords certainty about when this House will be able not only to listen to the leaders in the Commons but also to have its own debate here, I propose that the debate on the Enterprise and Regulatory Reform Bill will start at 5.30 pm. In other words, we will go from this to the Motion of the noble Baroness, Lady Tonge. If that does not take us to 5.30 pm, a Whip will adjourn the House further to 5.30 pm. This House will have full opportunity to debate the amendments on Leveson, of which there are many, at 5.30 pm. As I have said, I have discussed this with the Opposition Chief Whip, who is in agreement. Therefore, at this stage I formally beg to move that further consideration on Report be postponed until after the Motion in the name of my noble friend Lady Tonge.
Lord Hughes of Woodside
My Lords, without in any sense disagreeing with what the noble Baroness has said, is it not the case that in the other place today there will be a Statement on Cyprus and that that Statement is not being taken in this House? The decision on Cyprus is possibly the most calamitous decision that has ever been taken for Europe, for the finances of this country and for the European zone. Is it not inconceivable that the Statement is not being taken here, especially, as the noble Baroness has said, when we have plenty of time?
Baroness Anelay of St Johns
My Lords, that is, of course, a very proper question. The noble Lord, Lord Hughes, asks about things that are on the point. It is the case that whenever a Statement is to be made by the Government in another place, it is offered to the Opposition, but against the background of all the proceedings that are taking place today, I understand that the Opposition decided not to take the Statement. If there is another opportunity when it may be properly taken, we will certainly look at a way of facilitating a debate. I may be sending shivers down the spines of the business managers here who have to schedule these matters, but I understand the strength of feeling. There may indeed be other opportunities when we are able to deal with the issue, but for the moment the Opposition decided that perhaps this is not the time. I know that the noble Baroness, Lady Royall, is keen to contribute and I am happy for her to do so.
Lord Skidelsky
My Lords, I am a little unhappy about the procedure set out by the noble Baroness, which is to postpone consideration of the Enterprise and Regulatory Reform Bill until the other place has had its debate. It is always open to noble Lords in moving amendments to withdraw them in the light of any decisions reached in the other place, but that is no real reason for fiddling around with the order that has been established. It is not a sufficient reason to do that.
Baroness Anelay of St Johns
My Lords, perhaps I had better respond before the noble Baroness, Lady Royall, rises to speak. It is merely a matter of timing. The noble Lord, Lord Skidelsky, has ownership of most of the amendments in the first group. The reason it is convenient to do it in this way is that the House would not have a chance to listen to the leaders by the time that any mover of those amendments decided whether to withdraw or even to press them. Again, it is simply a matter of timing so that we all have an opportunity to listen to what the leaders set out. Just the opening remarks alone will make it too late for us to get into the Enterprise and Regulatory Reform Bill. I think it would be difficult for this House to proceed with a fair consideration of the amendments today.
Lord Campbell-Savours
My Lords, do the amended arrangements for business have implications for the deferred Procedure Committee meeting to be held at 5.30 pm today?
Baroness Anelay of St Johns
My Lords, the committee will meet at 5.30 pm as previously agreed.
Lord Fowler
My Lords, I in no way disagree with the procedure, but is it a fact that a government amendment to the Bill will be placed before the House?
Baroness Anelay of St Johns
My Lords, I have given as much information as I am able to at the moment. Clearly what the Government are keen to do is ensure that every opportunity is given to the House to discuss the agreement. I know that we are working closely with the Opposition, and particularly with the noble Lord, Lord Stevenson, because his name is attached to Amendment 84KA.
Lord Cormack
My Lords, we cannot all go to the gallery of another place to listen to what the leaders say, nor can we all crowd around television sets. Will there be a Statement before we begin the debate on the substantive amendments so that we know the background against which we will be debating them?
Baroness Anelay of St Johns
My Lords, in this House it is possible within the proper proceedings of Report stage that, when a Peer moves an amendment, the Minister can get up very shortly afterwards. It is completely within the procedure of Report to be able to set out the Government’s response. I hope that that will be the case. I do not think I have ever heard anyone complain before about a lack of television monitors in this place.
Lord Stoddart of Swindon
My Lords, perhaps I may comment further on the point made by the noble Lord, Lord Hughes, about the Statement being made in the House of Commons on what has happened in Cyprus. People’s savings are apparently going to be raided by the Government. That is a very important matter which has implications not only for the eurozone but perhaps throughout the EU and the world. Bearing in mind what the noble Baroness has said about the timing of the debate, I know the House of Commons well and I know that when it gets hold of the Statement on the press, there could be a very long debate indeed. There is no guarantee that we will get the timetable that the noble Baroness and the Government would like us to have. I have to say that I am disappointed that the usual channels on both sides of the House have agreed that such an important Statement should not have been put before this House today.
Baroness Royall of Blaisdon
My Lords, perhaps I may say two things. First, it would be an excellent idea if the Minister, at the beginning of the proceedings on the Enterprise and Regulatory Reform Bill, could inform the House by means of a Statement or whatever exactly what has been happening in the Commons. That would be extremely useful. On the Statement on Cyprus, as is usual, the Government informed Her Majesty’s Opposition that there would be a Statement on Cyprus and we were asked whether we wished to take it. Notwithstanding the importance of the situation in Cyprus, and not underestimating the importance of the Statement, it was offered to us before we knew of the changes to the procedures today, and the Statement would not have come until much later on. We deemed it important for the House to discuss and debate the issues pertaining to Leveson on the Enterprise and Regulatory Reform Bill. That is why we did not ask for the Statement to be repeated. It does not undermine the importance of that issue at all and I will support the noble Baroness the Chief Whip in ensuring that we have a debate on this issue in the very near future.
Lord Hughes of Woodside
My Lords, in view of what has been said, is it possible for the Chief Whip to rearrange things now so that we can deal with Cyprus today?
Baroness Anelay of St Johns
My Lords, in this place we work on a procedure whereby we at least have the courtesy of giving notice of such matters as Statements. We offer Statements to the Opposition as soon as they are known and we wait for a response. That response was given against the background of what was known at the time today. Negotiations were clearly in play both in this place and in another place. We cannot at this stage simply turn things on their head. However, I do understand the view of probably the majority of this House that at some stage there should be a debate on the matter. It is clearly something that is not going to be easily resolved, so it is not something that has to be done today, but I will actively look into the matter. In doing so I know that this House is keen to devote itself today to the matter in hand, which is that of the Enterprise and Regulatory Reform Bill, in which this House will play a significant part in achieving a resolution.
I do not propose to answer any other questions. We have a Motion in front of us. I have given the answers as far as I can. I feel I cannot give any more information. If other noble Lords wish to ask questions I suspect that I will not be able to help them even though I will do my best to do so.
Lord Richard
My Lords, I would like to ask a practical question which the noble Baroness may be able to answer. It is quite often the practice, in this House at any rate, that when Statements are made copies are made available in the Printed Paper Office at the same time. A very important Statement is to be made in the House of Commons. Could it not be arranged that it is in the Printed Paper Office before we start the debate at 5.30 pm?
Baroness Anelay of St Johns
My Lords, that is the normal procedure. As a former Leader of the House, the noble Lord raises a perfectly valid point. It will indeed be in the Printed Paper Office.
Lord Lucas
My Lords, I should be very grateful if the Chief Whip could confirm or deny that the Government are contemplating a manuscript amendment this evening on something as important as this, because I would like to adjust my attendance or otherwise at the House accordingly.
Baroness Anelay of St Johns
My Lords, I can go only as far as I have already explained. I have answered that question already by evasion, one of the few occasions when I evade, because clearly until an amendment may have been tabled, cleared and published, it would be wrong of me to try to second-guess what is about to happen. As I explained earlier, the Opposition have been in negotiation with the Government, and we hope to proceed. I am optimistic about proceeding in a way later this afternoon in which the whole House is able properly to play a significant part in the resolution of the debate on the Leveson proposals.
Lord Skidelsky
My Lords, before the noble Baroness sits down, perhaps I may ask one question. Can she give an assurance that the debate on the Enterprise and Regulatory Reform Bill will start at 5.30 pm?
Baroness Anelay of St Johns
My Lords, yes. The only reason I said “as close to 5.30pm” is simply in case it starts a matter of a minute or two earlier, but the House will be adjourned to 5.30 pm and I expect that the House will start on Leveson at 5.30 pm. As I explained earlier, if the Motion in the name of my noble friend Lady Tonge were to take us to 5.30 pm—I do not think she hopes it will—then we will go seamlessly into it. However, what I expect to happen is that the Motion of my noble friend Lady Tonge will take a shortish amount of time. She may find some supporters she did not expect, but after that we will adjourn. It will be on the monitors, but the House can be assured that it will not be debating Leveson until 5.30 pm.
Building Regulations &c. (Amendment) Regulations 2012
Baroness Tonge
That this House regrets Her Majesty’s Government’s decision to lay the Building Regulations &c. (Amendment) Regulations 2012 (SI 2012/3119) before Parliament, and in particular their decision to change the provisions on electrical safety in the home, which will be detrimental to public safety.
Relevant documents: 23rd Report from the Secondary Legislation Scrutiny Committee.
Baroness Anelay of St Johns
My Lords, I know that noble Lords have heard enough from me already, but I remind colleagues that the noble Baroness, Lady Tonge, is trying to assist the House by going first after Questions, so if colleagues could leave fairly quietly, we can get going on her Motion.
Baroness Tonge
My Lords, I thank the noble Baroness for bringing this Motion forward. It was delayed four weeks ago and we waited a long time for it, but now, thanks to her, it has been brought forward. I wish I could provide a little light entertainment for noble Lords while they wait for this hugely momentous Motion, Statement or whatever it is that is going to be coming later this evening, but sadly this is not light entertainment. In a lot of people’s opinions, electrical safety in the home is as important, if not more important, than regulation of the press—but maybe that is a personal view.
In placing this Motion of Regret before the House, first, I declare an interest. Nearly nine years ago my daughter was electrocuted in her own kitchen in front of two small boys aged two and four, with no one else in the house. We discovered that this had happened because of dangerous electrical work carried out when her kitchen was extended and refitted four years previously. I will not go into detail; the full story remains on the Electrical Safety Council website alongside other tragic stories of electrical accidents, including another young mother—also with two little children, also alone at the time—electrocuted in the bath of a rented holiday cottage because of faulty wiring in the bathroom. These stories remain as a warning to householders about the danger of electricity in the home and to people doing electrical work without proper training.
I was amazed at that time to find out that electricians were required to work only to guidelines and that there were no statutory regulations controlling their work. When I approached the Labour Minister at the time, Phil Hope, I discovered to my delight that his department was aware of this problem and was working on additions to the building regulations. These additions are now known as Part P, and required electrical work to be done or inspected by a registered electrician and notification to be sent to the building regulations department of the local council, to ensure that the work was done properly. I was invited to help with the campaign to introduce Part P and to publicise the new regime, which of course I did willingly. I have since become a patron of the Electrical Safety Council.
Part P regulations have been protecting us since 2005. The introduction of residual current detectors—RCDs—has been a great safety measure but, again, there is a question about how many homes are covered and whether the devices they have are adequate. A poll of 4,000 registered installers in 2011 found that 53% believed that the standard of electrical installation work had improved under Part P.
In 2012, to my dismay, the coalition Government decided in their bonfire of the regulations that Part P must go and with it the regulations for electrical installations in the home. Can the Minister tell us what pressure the Government were under to scrap Part P? Was it pressure from a few disgruntled, unqualified cowboys who did not want to be registered or have their work inspected? Some of them certainly wrote to me. Why was the decision made on Part P in particular? No one has suggested scrapping the regulations for gas fitters. They are equally dangerous, why the electricians?
After protest from safety campaigners, the Department for Communities and Local Government agreed to go out to consultation and announced last December that minor electrical work undertaken in kitchens, in bathrooms, more than 0.6 of a metre away from water, and outdoors should no longer be notifiable or subject to inspection. Work done in the very places in the home where electricity and water can be close together—and dangerously so—the Government have decided needs no regulation. Why?
Although statistics are sketchy, the impact assessment published by the department in December showed that since the introduction of Part P regulations, 2.3 deaths per year from electrocution alone have been prevented and, in addition, there have been up to a 30% reduction of mains wiring incidents. In terms of electrical fires, they are estimated to have prevented 2.6 deaths a year and cut by 15% the number of domestic incidents due to faulty electrical equipment. Twenty-seven thousand contractors have had their work inspected for safety on an annual basis in the past nine years and sales of electrical safety testing equipment have gone up by over 100%. I hope, too, that the skills and expertise required by a good electrician are now being valued more as more and more of them seek registration from an approved body so that their work does not have to be inspected. This is all a result of the Part P regulations.
Since the proposed changes to Part P were announced last December, several electrical contractors concerned have contacted the Electrical Safety Council to say that electrical alteration work undertaken by kitchen fitters, in particular, will once again go under the radar and not be inspected.
The department, in its wisdom, has concluded that it is not possible to say whether Part P has delivered health and safety benefits, and yet the Minister, Don Foster, in the Westminster Hall debate last September said that the Government do not want changes to Part P unduly to diminish safety. At an extra session of the Select Committee for Communities and Local Government two days ago, the same confused message came over, with the additional nugget of information that scrapping the regulations would save £14 million. We were also told that the building regulations challenge panel would oversee what was going on in the industry. How much will that panel cost and will it challenge shoddy electrical work? Where does the figure of £14 million come from? It all sounds a bit confused to me.
The consultation undertaken by the department, we are told, showed that of the 158 respondents, 65% supported making more electrical work non-notifiable, but that was the response to an open question. When asked about electrical work in kitchens, specifically, and low-risk areas of bathrooms, a much higher percentage opposed scrapping the regulations. It is also worth noting that although electrical contractors supported the proposals to scrap Part P, building control bodies were not supportive of reductions to notifiable work and the Which? organisation and the Trading Standards Institute were also opposed.
The House of Lords Secondary Legislation Committee has also expressed reservations about the consultation. Its report notes:
“In his Statement, Mr Foster said that the new Part P of the Regulations sought to ‘achieve a reasonable balance of risk’. The House may wish to note that the detail given in the Department’s consultation summary indicates that large numbers of interested parties may not be persuaded that this is the case”.
Can the Minister tell us how many consumer organisations, beyond those mentioned, were against reducing the scope of Part P?
This all leaves great cause for concern. Refitting kitchens is big business and very popular with householders. It often requires adjustment to electrical wiring, as happened in my daughter’s kitchen. In 2004, the year she died, an impact assessment carried out by the Department for Communities and Local Government showed that some of the worst electrical work at that time had been carried out by kitchen fitters. Recent statistics for 2010-11 on electrical fires originating in the kitchen listed 14,700 incidents. The kitchen is a dangerous area and surely electrical work there should remain notifiable, as it should in the bathroom and outdoors where water and electricity are also in close contact. There is no requirement, either, for do-it-yourself outlets, such as Homebase and B&Q, to insist or even recommend that their products should be installed by a registered and qualified electrician. I ask the Minister: why not? How do the Government intend to monitor these changes over the two-year period of the review that they have announced? Will she promise that Part P regulations can be restored if necessary?
The Select Committee for Communities and Local Government has spent a great deal of time on this issue and I thank the committee and its chair, Clive Betts MP, for its hard work and recommendations. I close by reminding noble Lords that regulations are an irritant, a nuisance and sometimes cost money, but when a much loved person is killed because of a lack of regulations, they all become worth while. I beg the department to reconsider.
Baroness Smith of Basildon
My Lords, I thank the noble Baroness, Lady Tonge, for giving the House the opportunity to debate these regulations. Her own appallingly tragic experience brings home to us how important they are.
I must admit that I gave little thought to broader regulations and the impact they have until 2006, when I moved from the Northern Ireland Office to become Minister at the DCLG and was told that I was responsible for, among other things, building regulations. If I am honest, I was not exactly overjoyed at the thought, yet my view quickly changed because it is through building regulations that we set standards. Their purpose is not rules and regulations for their own sake but for reasons of health, safety, practicality, equality in ensuring good access to public buildings and, more recently, the environment. Those are sound, practical reasons for regulations, as the noble Baroness, Lady Tonge, said.
Regulations also create a level playing field for the building and associated industries. I clearly recall small, medium and some large companies, and individuals, telling me why good regulation was important to them and their business. It sets standards and prevents good companies and individuals being undercut by cowboys reducing standards. It is important to get the right balance and to be proportionate, providing regulations which offer protection to consumers and businesses but which, at the same time, do not impose unreasonable or unsustainable costs. Whenever building regulations are introduced, that is the guiding principle, as it was in the debates leading to the introduction of Part P regulations in 2005 that are the focus of today’s debate.
My understanding is that negotiations on this regulation of electrical installation started in 1995 following a recommendation from the construction industry deregulation taskforce. That led eventually to the Part P regulations. It would be helpful, as the noble Baroness, Lady Tonge, asked, if the Minister could clarify the reason for reviewing Part P now to make the changes that we are seeing. On page 18 of the impact assessment, there is a summary of costs and benefits of the current operation of Part P that appears to show a significant net benefit of more than £75 million. The analysis also suggests that these benefits would build up over time, although that cannot be accurately measured. The Minister, Don Foster, told the House of Commons in a Written Statement that,
“we do recognise that there is scope to streamline the requirements by removing the requirement to notify smaller-scale, lower-risk electrical work to a building control body”.—[Official Report, Commons, 18/12/12; col. 83WS].
Is the Minister confident that the Government have got it exactly right where they have drawn the line between what is described in the Statement as “lower-risk electrical work” that will no longer be notifiable and electrical work that should remain notifiable? What exactly is “smaller-scale, lower-risk”?
I understand that the Government consulted on this, and in the Minister’s statement in the Explanatory Memorandum considerable support is drawn from that consultation. Indeed, following the consultation, the Government announced why they were proceeding with that rationalisation of Parts K, M and N of the building regulations. In the Explanatory Memorandum, the Government relied significantly on the consultation responses as the justification for change, saying:
“65% of respondents supported making more electrical work non-notifiable (with 27% opposed). Of those that were opposed, many had concerns that the proposed changes might undermine electrical safety. Others disagreed because they believed these areas of work were not actually lower-risk and were therefore not appropriate to make non-notifiable”.
The situation seems very clear-cut when seeing those figures. However, I am grateful to the Secondary Legislation Scrutiny Committee, as mentioned by the noble Baroness, Lady Tonge, for a more detailed analysis of those figures. When consultees were asked about specific areas of work, the consultation was far more balanced in its responses and there was not such a clear-cut divide as is implied in the Explanatory Memorandum. The scrutiny committee made it clear that:
“Of the 132 responses relating to whether electrical alteration work in kitchens should be made non-notifiable, 51% supported the proposal, while 43% opposed it. Of the 133 responses dealing with alteration work outdoors, 49% of respondents supported the proposal … with 41% opposed. Of the 133 responses”,
to lower-risk work in bathrooms,
“54% supported the proposal while 39% opposed it”.
The committee further said that,
“large numbers of interested parties may not be persuaded”,
that the regulations achieve,
“a reasonable balance of risk”.
I appreciate that the information that the Government give in their Explanatory Memorandum makes a greater case for change than does the scrutiny committee’s analysis of the results. However, it has to be accepted that there are significant concerns about the Government’s approach that the Explanatory Memorandum glosses over and does not indicate as correctly as it should. Can the Minister confirm that the consultation responses specifically on making more work non-notifiable are significantly less supportive of the Government’s position than outlined in the Explanatory Memorandum and that the Secondary Legislation Scrutiny Committee is correct in concluding that,
“large numbers of interested parties may not be persuaded”,
that these regulations,
“achieve a reasonable balance of risk”?
The scrutiny committee got it right.
One difficulty is that if there are any significant problems with the Government’s approach, they may not emerge for some time. As the Government admit in their economic assessment:
“Part P is thought to have raised the average competence of domestic electrical installers”,
and the statistics bear that out. Since Part P was introduced, more than 27,000 additional contractors have had their work inspected for safety annually, sales of testing equipment, as the noble Baroness, Lady Tonge, said, has increased by over 100%, and the coverage of life-saving residual current devices—RCDs—in homes has risen significantly. In 2009, 62% of homes had RCDs, but prior to Part P coming into effect in 2001, only 40% had them. It is that device that prevents most electrical shocks that can be fatal.
It is difficult to get accurate figures on whether that has contributed to a fall in the number of accidents, injuries and electrical fire-related incidents, because the way in which data are collected is not comprehensive and has changed over time. However, in the absence of that information, the Government’s own impact assessment says that Part P has prevented more than 2.5 deaths each year from electrical shocks, 30% of mains wiring incidents and 15% of portable appliance incidents. With that number of deaths and that number of incidents being prevented, it is a very serious matter that the Government wish to remove that protection.
Among the areas that raise the most concern is electrical work being undertaken in the kitchen, as borne out by the detail in the consultation responses. Kitchen fitters who undertake electrical works currently have notifiable work checked, but that is going to change under this order.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, like the noble Baroness, Lady Smith, I thank the noble Baroness, Lady Tonge, for bringing this debate to the House today. We all understand that a terrible tragedy occurred to her family, and I am very grateful to her for the measured way in which she has brought forward this Motion.
Building regulations play an important role in ensuring that buildings are constructed to meet reasonable standards of health, safety, welfare, convenience and sustainability. This Motion gives me an opportunity to update the House on this important issue and to deal with the many questions, or as many of them as I can, that have been raised this afternoon. Noble Lords may also wish to note the important report from the Communities and Local Government Select Committee, which was published last year in the other place and which has been referred to, and that on 11 February my right honourable friend the Building Regulations Minister discussed further matters raised in the report with the Select Committee.
There are relatively few building regulations in total. Last year the Government publicly consulted on changes to them in England and on associated technical guidance in the approved documents. Prior to that the Government asked the building industry and other interested parties to share their ideas about what needed to be improved or extended, where it would be possible to reduce the regulatory burdens, and how even better levels of compliance might be delivered. Having sought these views, and taking account of the responses to the Your Freedom consultation and my department’s Cutting Red Tape websites, a range of proposals were developed and subjected to a further, detailed consultation. I can now confirm that those consultations and changes were discussed with building control systems and local authorities. The changes are expected to deliver an even better and more cost-effective way of ensuring that buildings remain safe.
I now turn to the specific issue of electrical safety. Discussions with trade bodies within the electrical installation industry and with individual electrical contractors show that they continue to value the national minimum standards provided by the building regulations. However, where there are concerns, we ought to address them. Part P of the building regulations, which deals, as the noble Baronesses said, with electrical installation in dwellings, has come under some criticism for its procedural complexity and bureaucracy. In fact, some respondents called for the provision to be completely revoked. The question that needed to be addressed was whether Part P could be simplified while retaining the safety benefits that it has undoubtedly brought about.
Currently, home owners can face building control fees of upwards of £240 for simple electrical work, such as putting an additional plug socket in a kitchen, approved by a local authority. In practice, such fees also prove a strong disincentive to those carrying out these small jobs—including home owners, who often do it themselves—to inform the local authority that the work is being carried out in the first place. Even for the majority of work that is carried out by electrical installers who are registered to certify their own work, notification imposes additional bureaucracy, as they have to tell the local authorities about the work they have been doing. This leads to consumers, who themselves are not competent in electrical work, relying on somebody else who may not follow the notification rules. Therefore, the scope of notifiable work has been changed, but otherwise this is a reduction in the amount of red tape. By law, all electrical work must still be safe, and this is most easily demonstrated by following the British Standard for electrical installations—BS7671—and the Institution of Engineering and Technology’s wiring regulations.
The changes will see the notification requirements focused on higher-risk jobs such as the installation of new circuits or work undertaken in the vicinity of showers and baths. The noble Baroness rightly drew attention to the problems caused by mixing water and electricity. This reflects the additional technical requirements applied by the British Standard in bathrooms and the skills required for working inside a consumer unit—that is a fuse box, for novices. In kitchens, notification will be necessary only when a new circuit is provided from the fuse box. When notification is not required, we would expect the work to be carried out to the appropriate safety standard, which I have just read out. Quite simply, it still needs to comply with that.
Baroness Tonge
I thank my noble friend for giving way. I think there is some confusion because, at the moment, there are statutory requirements in regulations for electricians to do things safely. What the Minister is referring to are advisory guidelines for electricians to work, which happened nine years ago, before Part P came in. The guidelines may be there but they do not have to follow them. This is the problem: we are going back to the old days. They do not have to follow the guidelines because they are just guidelines.
Baroness Hanham
I shall pursue my speech and make sure that we cover those points when I get to the end. The previous regime of notification tended to penalise the competent, conscientious installer with additional paperwork, while the unscrupulous installer could ignore these procedures with impunity. The changes that have been made reflect a more pragmatic approach. However, while the notification requirements are being reduced, the department will work with the registration scheme providers and trade bodies to raise general awareness of the safety issues and legal requirements, and how to meet them. Promotion of the competent person schemes, to which I do not think either noble Baroness referred, is now a requirement imposed on scheme providers by my department. My officials are working with the forum of competent person scheme operators, including the Electrical Safety Council, to see how the marketing message can be improved and co-ordinated. We will monitor the impact of the changes to Part P to make sure that we are better informed about how this work is going.
The competent person schemes now have around 40,000 registered electrical installers. Professional electrical installers will stay with the register. It is still in their interest to be able to self-certify their work as compliant with building regulations and not have to pay building control charges. This should mean lower prices for the householder. Whenever a registered electrical installer is used, they also benefit from the knowledge that the work has been carried out to standards of quality and safety. The new Part P will retain the core benefits that have been achieved while keeping administrative costs and burdens to a reasonable minimum. The indicators that can help identify the impact of the changes will be kept under review.
In addition, my department will bring forward further regulations later this year. The noble Baroness, Lady Smith, asked me when. They will introduce an alternative route to demonstrating compliance with Part P by allowing for a registered third party, such as an electrical installer, to certify electrical work carried out by somebody doing DIY or an unregistered electrical installer.
It is not exact to say that safe work would rely only on the guidelines. Compliance will still be required and it is only the bureaucracy that has been removed, rather than the requirement to carry out things to safe standards.
Baroness Smith of Basildon
I apologise for interrupting the Minister, but she was addressing a point that both I and the noble Baroness, Lady Tonge, raised. In her last sentence, if I have understood correctly, she said that only the red tape has been removed and that compliance is still required. How will we know?
Baroness Hanham
My Lords, I was asked about monitoring and if I may address monitoring, I hope that I will be able to answer the noble Baroness’s question. The plan will comprise a monitoring and evaluation strategy, which will cover electrical shock incidents and fires of electrical origin. We will also be looking at statistics on the operation of competent person schemes: that is, the number of registered installers and the number of jobs notified to schemes. Other areas which we will be looking at in preparing the impact assessment will be sales of electrical test equipment and awards of electrical qualifications.
There is a number of potential sources of evidence and it is not always easy to isolate the impact of regulatory changes. However, we will keep this carefully under control and will bring forward the available evidence in two years’ time at the time of the review.
The noble Baroness, Lady Smith, also asked me what pressure had been put on the Government to scrap Part P, and where that pressure had come from. I have explained that there was a consultation to which responses were made. As the noble Baroness said, there were some differences of view, but 71% of all respondents agreed that Part P should be amended. The analysis of Part P impacts on improvements in electrical safety was not entirely conclusive. It is difficult to show that Part P is singularly responsible for a reduction in electrical accidents. However, the Government felt that it had been in use long enough to allow us to form a conclusive view on its influence. Therefore, Part P has been retained, although, as I said earlier, a number of people suggested that it should be abandoned.
I was asked about the reason for excluding kitchens. Most minor alteration work to existing alterations is already non-notifiable. The change that we are making is to make all minor alteration work non-notifiable except when it is close to baths and showers. The British standard for electrical installation work has special rules on that.
Baroness Tonge
I thank the Minister for giving way again. I feel that I must put this on record because I think she has now said at least twice that minor electrical works in the kitchen need not be inspected and are perfectly able to be done by unqualified people, if necessary. I want to put on record that my daughter’s death was caused by a plug and a cable to a cooker hood—a very simple thing, indeed—which was atrociously done and, four years later, killed her.
Baroness Hanham
My Lords, I thank the noble Baroness for that but I hesitate to go into what actually happened. We take note of what she said but that might have been considered to be more than minor works because it would almost certainly have involved work in a fuse box, which will still be covered.
I think that I have answered many of the questions that I was asked. Discussions and debates have taken place with my right honourable friend in the other place, Don Foster. We are confident that what we are doing will ensure that there is still safety within the Part P process and that householders will be clear about the requirements around electrical work and how they go about ensuring that work is carried out by someone who is registered with one of the competent person schemes. The industry has not been as successful in this regard as it could be, and this is something that new requirements for registration scheme providers will help to address.
Part P has always been based on all work being required to be safe, but only certain types of work needed notification. We have simply changed the balance of what is or is not notified and we still mean to see that there is proper safety and regulation under Part P. It is important to ensure that the building regulations regime remains current and up-to-date to ensure that regulations continue to fulfil their important role. It is also necessary to make sure that they are understood by as many people as possible, and we will ensure that there is proper publicity. I hope that, with that, the noble Baroness will be able to withdraw her Motion.
Baroness Tonge
My Lords, I thank the Minister and the noble Baroness on the Opposition Front Bench for joining me in this debate. I think that it is a very important one. I appreciate that the Government need to get rid of red tape—everyone dislikes red tape. I can well see that it may cost an individual electrician, and therefore the householder, a little bit less to do a job in a kitchen or a bathroom.
However, I, and all the people I have been in contact with over the past nine years who have had accidents in their family, would willingly have paid £200 or £300 extra on a job to make sure it was done safely and that no one died as a result. There is a balance to be had here.
Part P regulation has done an enormous amount of good for the electrical industry and could still do so. I do not see that the bureaucracy that is being introduced to replace will be any less extensive. We have not been given any figures and I do not see how the challenge panel and the monitoring will be less expensive than the existing system. I thank the Minister for her reply and I only hope that in the next two years of the review there are no fatalities as a consequence of the Government’s action. I therefore beg leave to withdraw the Motion.
Enterprise and Regulatory Reform Bill
“Royal ChartersRoyal Charters: requirements for Parliamentary approval
Where a body is established by Royal Charter after 1 March 2013 with functions relating to the carrying on of an industry, no recommendation may be made to Her Majesty in Council to amend the body’s Charter or dissolve the body unless any requirements included in the Charter on the date it is granted for Parliament to approve the amendment or dissolution have been met.”
Lord Stevenson of Balmacara
My Lords, the amendment is jointly in my name and that of the noble Viscount, Lord Younger of Leckie.
Although the words are overused almost to the point of lacking any meaning, today is, I believe, a historic one. In signing up to this amendment and agreeing to support its inclusion in the Bill, the Government are joining with the Opposition in putting in place an agreed, all-party, Leveson-compliant solution to the long-standing problem of how to regulate the press.
Taken together with the royal charter, which will recognise and certify an independent regulatory body for the press, this means that we are seeing the conclusion of 70 years of inaction, despite seven major reports. It is now up to the press to make this system work, in the full and certain knowledge that all political parties have agreed the proposals, that the victims are content and that polls continue to show that this is what the people of this country want.
In his report, Lord Justice Leveson proposed a framework that provided for the continuation of self-regulation by the press, but with a legal guarantee that self-regulation would be effective, independent and continue to meet high standards. However, the role of the law, the legal underpinning, was to be limited to setting up a body whose task would be to recognise the self-regulatory system and check it once every three years. Lord Justice Leveson said that that was essential to ensure that, despite all the protestations of a willingness to change and countless expressions of good intentions, the press did not once again slip back into their old ways, as they have done after all the other inquiries and reports.
There is no doubt that some parts of the press are attempting to derail these proposals, despite the fact that they deliver the Leveson principles, ensure that those who are wronged have an effective and cheap route to redress, and ensure a free and vibrant press. However, implementing the Leveson proposals does not censor the press. There is no recommendation for pre-publication regulation. It would not create “a slippery slope” to “a government-controlled press”. It would not restrict reporting or investigative journalism in the public interest. Quite the reverse. As Nick Davies, the Guardian investigative reporter who largely uncovered the phone hacking story, wrote after the report was published:
“From a reporter’s point of view, there is no obvious problem with the core of Leveson’s report, his system of ‘independent self-regulation’ ... There is a nightmare here, but it is for the old guard of Fleet Street. To lose control of the regulator is to lose their licence to do exactly as they please”.
The families who suffered press intrusion and gross violations of their privacy have been pressing for the changes that will in future protect people from what happened to them. The harassment and character assassinations laid bare before the Leveson inquiry were not mere technical breaches of the rules or victimless crimes. For many of the victims, appearing at the inquiry meant reliving the pain and trauma of their abuse by the press, but they did so with enormous courage and determination; and the stories they told made many people feel moved, incredulous, appalled and very, very angry. They included people such as: the McCanns who were falsely accused of murdering their missing child; the parents of Milly Dowler, who were given false hope that their daughter was still alive; John Tulloch, the 7/7 bomb survivor who was tricked into giving an interview; Christopher Jeffries, who was falsely accused of the murder of Joanna Yates; and the noble Baroness, Lady Hollins, whose daughter Abigail was hounded for stories following her tragic stabbing while out walking with her son.
It is important to remember that the voices heard in the inquiry represented just a small sample of press harassment and misrepresentation that became commonplace, week in and week out, for those struggling with tragedies in their lives who never sought to become the story. We should also remember that the public overwhelmingly support the establishment of an independent regulator, backed by law. That was borne out by a series of polls conducted prior to the publication of the report by the Media Standards Trust, Hacked Off, the Carnegie Trust and the IPPR. YouGov’s latest survey for the Sunday Times finds that 90% want a system that forces newspapers to print corrections when they say things that are not true. A smaller but still substantial majority wants to punish newspapers that opt out of a new system of regulation; and 62% want such papers to face damages of up to £1 million when they are found guilty of libel.
The sad fact is that the Leveson inquiry should never have been necessary, and the catalogue of incidents that were described and the many more that they represent should never have been allowed to happen. At the end of the day, we in Parliament have to be able to say to these victims that we have seen them right.
Your Lordships’ House has earned a justifiable reputation for keeping the recommendations of Lord Justice Leveson in the forefront of political thinking. Indeed, the former Leader of your Lordships’ House said on the occasion of the publication of the report in November 2012 that if the central recommendations of the report,
“can be put in place, we truly will have a regulatory system that delivers public confidence, justice for the victims, and a step-change in the way the press is regulated in our country”.—[Official Report, 29/11/12; col. 340.]
It has been 20 months since politicians from all parties came together to set up the Leveson inquiry. It is nearly four months since the report was published and all-party talks commenced, and here we are at the brink of introducing the results of that process. The Leveson proposals received near-unanimous approval when we debated the report in your Lordships’ House on Friday 11 January, and the House voted by a majority of 131 in favour of similar amendments to those that we are to consider at Report on the Defamation Bill.
This amendment, although it is couched in general terms, ensures that the agreed royal charter on self-regulation of the press may not be amended by Ministers through the Privy Council unless Parliament has given its prior approval to the changes. It is therefore an important entrenching measure, and I very much hope that it will receive support from Members of your Lordships’ House.
The royal charter published today creates a new, independent, voluntary system of self-regulation for the press. It is a welcome step, and the amendment ensures that this can be an enduring settlement, as it underpins the royal charter with the minimum amount of legislation needed to guarantee its success and independence over time. It is worth pointing out that while my amendment ensures that Ministers cannot tamper with the new system—for example, by watering it down under pressure from the newspapers—it also ensures that they cannot introduce new measures that would threaten the freedom of the press. There must be comfort in the fact that it works both ways.
Therefore, my amendment completes the virtuous circle of an all-party solution that is Leveson-compliant and is as entrenched in our constitutional arrangements as anything can be, requiring as it does a two-thirds majority in both Houses for change. In so doing, your Lordships’ House is fulfilling its proper role in scrutinising legislative proposals and offering the other place a chance to improve on what has been proposed. As the Prime Minister said a few minutes ago in another place:
“We stand here today with cross-party agreement for a new system of press regulation that supports our great traditions of investigative journalism and free speech and protects the rights of the vulnerable and the innocent”.
He ended by sending a message to the press. He said that, “we have had the debate” and reached our conclusions, and he added:
“Now it is time to get on and make this new system work”.
I beg to move.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, in advance of this debate, it may be for the convenience of the House if I explain the Government’s position on the amendment. Following the statement made in the other place today, I want to make it clear that the Government support the amendment. This measure is part of the announcement made by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition today in relation to proposals for a royal charter to recognise and certify an independent regulatory body or bodies for the press.
I am sure that noble Lords will join me in welcoming the successful conclusion to the cross-party talks which the Prime Minister set up following the publication of Lord Justice Leveson’s report. The Prime Minister has made it clear that the amendment before us is not statutory underpinning. The Prime Minister said all along that he wanted to avoid a press law which said what the recognition body is and what it does. That has been delivered. This is not statutory underpinning but a safeguard that says that politicians cannot meddle with this.
The clause put forward by the noble Lord, Lord Stevenson, to which I have added my name, establishes requirements for royal charter bodies established after 1 March 2013 which have functions relating to the carrying on of an industry. It will have the effect that the charter can be amended only if the terms of the charter are met and both Houses of Parliament agree. Let me be clear that this means that any royal charters created to date will be unaffected and that a royal charter created in future will be affected only both if it is a royal charter with functions relating to the carrying on of an industry and if it has requirements set out within it which require the approval of Parliament.
The press royal charter will be the only such charter in existence when it comes into force. It is the Prime Minister’s intention to submit the charter to the Privy Council for Her Majesty’s approval at the Privy Council’s meeting in May. This will deliver a new system of press regulation in this country. It is a system of tough, independent self- regulation that will deliver for victims.
Viscount Younger of Leckie
Perhaps I may be allowed to finish; I have just a few lines. It will ensure fines of up to £1 million, suitably prominent apologies, a standards code and a new arbitration service that will be free for victims. I will respond to points made in the normal way at the end of the debate, bearing in mind that this is the Report stage of the Enterprise and Regulatory Reform Bill, but I hope that noble Lords will support this important new provision.
Lord Foulkes of Cumnock
Can the Minister clarify one point in his statement? He said “this” country. Can he say whether this applies to the whole of the United Kingdom?
Viscount Younger of Leckie
I will certainly respond to that point at the end, in my concluding statement.
Lord Fowler
My Lords, I think there is something rather odd about the procedures of this House. It is no criticism of my noble friend at Question Time, but we all remember his rather cautious replies to questions. The first point to make is that all the detail was actually in the Evening Standard, which could be found in the Library. The second point is that it has now been confirmed that the Defamation Bill will be returning to the House and will go through the normal parliamentary processes. That is the point that I wished to establish when I asked about the Defamation Bill. It was totally uncontroversial and, frankly, I think that it could have been confirmed.
I should like to make the same point that was made by the noble Lord who opened for the Opposition. As he said, it is an historic day. This is a compromise solution, but it is a solution to which all three parties have signed up. We have all had to give up something, but that is what happens in compromises. Rather than one party or another making claims that they, and only they, have won, it would be much better to ensure that, by the rules set down, the scandals that have affected some parts of the press never happen again in this country.
This debate is not just about press freedom; it is also about the power of the press and the misuse of that power. That is why the News of the World was closed down, why journalists have been arrested and why dozens of victims of phone hacking have been paid very substantial damages. We now understand that even more victims have been discovered. It is a discreditable episode in the history of the British press, so it is not enough just to say, “I am in favour of the freedom of the press”, as dozens of editorials have been doing over the past months. In spite of the newspapers’ black propaganda about those of us who support Leveson, we all believe in the freedom of the press—there is no question about that. However, we are also in favour of effective measures to deal with the scandal of press intrusion that has been revealed over the past months.
Lord Soley
I do not wish to delay the House very long but I have a very long history as regards this matter. I want to make only three brief points. First, as the noble Lord, Lord Fowler, has said, this is a compromise. It was not the first that I would have come to but the negotiations have led to it being much better. I certainly do not want to make the best the enemy of the good. This is good. That leads me to my second point. It is profoundly important that all Members of both Houses give the agreement as much support as possible in order to convey to the media that this is the will of the people of this country speaking through their Parliament.
As the noble Lord, Lord Fowler, has indicated, it has been the job of the press to hold power to account. But one of the things that have gone wrong over the past 40 or 50 years is that the power of the press has been abused in too many cases. They have done some wonderful work and there are some wonderful journalists but some journalists have betrayed that trust. Some editors and owners have also betrayed it and it became the abuse of power. That abuse of power had to be held to account. I have given evidence to many committees and I produced my own Bill some 20 or so years ago, which tried to draw attention to this issue. Getting to this point has been a long, hard journey and we should all be grateful.
In many respects, my final point is the most important. I would almost plead with the press to recognise that this is an opportunity for a change in the culture of the press. What let the press down was an acceptance of standards, attitudes and values within the press that would not have been tolerated outside the press. They let themselves down in that way and not enough of them—although, very credibly, one or two journalists have been particularly outstanding—challenged it. Now, we need to put that behind us and to say that the culture of the press can change.
The press should recognise that people have rights and that the freedom of the press was an extension of the freedom of speech and the freedom of association, which allowed people to meet together and to put forward their views. That was dangerously undermined when the phrase “press barons” came in somewhere around the end of the 19th century. That was something different from the press freedom for which people had previously fought. The press barons need to be held to account. We have taken a step in the direction that allows that to happen. If the press have the right approach to this, it will be an opportunity for a new start for everyone. I for one would be willing to sign up to that.
Baroness Hollins
With freedom comes responsibility and that is what this is all about. It is extraordinary what has happened to this debate in the 100 days since Lord Justice Leveson’s rigorous report was published. For a time, the debate descended into what the Guardian last week described as,
“bipartite discussions between Conservative ministers and newspapers”.
Then it returned to public debate via the anachronism of the royal charter. But at last an agreement has been reached by all three parties recognising what has been clear to the victims of press abuse from the beginning—this is not party political but a cross-party matter.
I congratulate the leaders of all three parties on reaching an historic agreement to put the building blocks in place to enable the establishment and recognition of an independent and effective press regulator. Before Lord Justice Leveson reported, many people assumed that he would recommend a statutory body to hold the press to the standards they profess to believe in and statutory compulsion for newspapers to join it. However, Lord Justice Leveson did no such thing. Instead, he recommended that the press be given yet another chance to set up their own voluntary self-regulator. Some victims were taken aback but accepted this as the result of careful and diligent public inquiry. The only thing he did ask—perhaps it is the very least he could have asked—was for a body to be set up in law which would from time to time scrutinise whether the industry’s new body met certain tests of independence and effectiveness. He said that those news publishers that met those standards should have benefits in law to give newspapers an incentive to join. He carefully set out some recommendations to ensure that any new body was a real regulator and not just a beefed-up version of the Press Complaints Commission—a new body that would be independent of those it regulates and committed to upholding standards for the benefit of the public. These recommendations now seem to be faithfully reflected in the royal charter, as they are in the amendment in the name of the noble Lord, Lord Stevenson, and in the amendment in the name of the noble Lord, Lord Skidelsky, which may not now be needed. The issue of exemplary damages will also need to be dealt with.
Some editors have argued at every opportunity to weaken these requirements. However, as set out in these amendments, if the industry sets up a regulator that meets Lord Justice Leveson’s criteria, the recognition body would recognise it. If it does not meet the criteria, it would not be recognised. It is as simple as that. I have no doubt about the sincerity of those who said that the Press Complaints Commission was effective or of those who say that a new regulator could be established without this mild level of scrutiny. But the time for take-my-word-for-it regulation is over.
Your Lordships know that my family was deeply affected by the unrestrained power of the press to intrude and to distort. The fact is that I have been hesitant about speaking out on this issue for fear of the consequences for my family. This is some proof, if it were needed, that the issue is not about individual free speech but about institutional power—power which is so concentrated in the hands of a few that it can be used to undermine good journalism and good journalists.
I too respect Sir Harold Evans, an editor of high reputation, for having the courage to point out what he called the “amazingly gross distortion” of the Leveson report by his former colleagues in Fleet Street. There has been so much distortion and so little reason to trust. Very senior people appeared to have gone back on their word on this issue, seemingly breaking promises solemnly made to people who have been badly hurt. For all these reasons, it is essential that this amendment and the royal charter succeed. They offer a vital guarantee that Leveson will be implemented in full.
In an earlier debate, the noble Lord, Lord Alli, pointed out that sometimes leadership must come from the Back Benches. Noble Lords on all sides rose to that challenge. Speaking for myself and, I believe, for many others, I am grateful to those on all Benches who saw and acted on the need for reform and I should like to take this opportunity to thank noble Lords for supporting victims of press abuse. I would also like to place on record my thanks to Hacked Off for representing and supporting victims and for its tireless work which has helped to bring truth to power.
While the abuses of power from press companies have saddened and sometimes shaken us, the best journalism makes us all proud. I believe that the royal charter agreed today offers the best chance to ensure much more good journalism in the future.
Baroness Bonham-Carter of Yarnbury
I join in supporting this amendment. It actually underpins freedom of the press in that it stops future politicians in the form of privy counsellors interfering in the regulation of the press. I offer my thanks to my noble and learned friend Lord Wallace of Tankerness who I believe first suggested this solution in a letter to the Secretary of State. I commend my right honourable friend the Deputy Prime Minister for maintaining faith in the cross-party process and the Prime Minister and Leader of the Opposition for responding. We have achieved consensus on this hugely important matter, something both Lord Justice Leveson and the victims of press abuse particularly desired. This process has been a victory for working together and for the continued freedom of the press, as well as for the victims who campaigned so vigorously and courageously.
Lord Lipsey
My Lords, I speak as a former deputy editor of two national newspapers and perhaps I may say, straight at the beginning, that I see in this royal charter, with the backing that it will get in legislation, no threat whatever to the freedom of the press which we all cherish so much.
There is, after this good day for our democracy, just one question that we should think about. Is there a danger that what we have achieved will be undermined by large sections of the press refusing to join the new regulatory body? From where we sit, the idea that they might not may seem fantastical but—noble Lords have long memories—there was such a case in our legislative history, and in many ways it is analogous. The Industrial Relations Act 1971 was passed by a majority in Parliament but was then scuppered because the trade unions refused to register under it although they had enormous incentives—as there exist for the press in this Bill—to do so. It did not do the unions any good at all because what they got in consequence, a decade later, was Thatcherism. They would have done much better to stick with the Heath proposals. I would say the same to the press now. If they do not join up to this body, they will face something far more draconian than what we have in front of us this afternoon.
There are incentives to join—for example, the relief from exemplary damages. However, there are greater incentives to join than that. I think that newspapers that do not join risk their circulations. Just as Liverpool punished the Sun for its reporting of Hillsborough, so the British public will punish newspapers that fail to sign up to this system. If the public do that, how much more so may advertisers who do not wish to place their advertisements in journals which have placed themselves beyond the pale? The odds are that newspapers will be inclined, when they consider it rationally and coolly, to sign up.
However—and this is the true importance of today—if they do not, they will know that it is the united will of all three national political parties and of both Houses of Parliament that they are trying to thwart. If there is a confrontation between our Parliament—reflecting, as in this case it does, the will of the people—and the press, there must be only one winner.
For all those reasons, plus the fact that a number of newspapers have in recent days evolved to a much more sensible approach to these things—I pay tribute to the editors of the Financial Times, the Guardian and the Independent on this, and I think that others will follow—when they weigh this and see the united will coming from this Parliament, they will understand that they have to take part in a full and open spirit, and our nation’s life will be the better for it.
Lord Phillips of Sudbury
My Lords, I apologise to my noble friend the Minister for not raising this rather gritty little point before this debate, but of course this is all hot off the press. There could be a lacuna in this amendment. It requires the approval of Parliament for any amendment to the royal charter or dissolution of the recognition body. However, might it be possible—and one is thinking of possibly years hence—that the newspaper industry could decide not to dissolve these arrangements but simply to sidestep them by establishing a parallel and separate body? I would like to have the answer to that question, because I think it is germane.
Lord Elystan-Morgan
My Lords, I wholeheartedly applaud the intentions of those parties that have brought about this compromise and their integrity. I make that observation, however, subject to one factor. If I am indulging in a pettifogging lawyers’ argument then I apologise if it has no substance. However, if I happen to be right, it will be something that I can regale my grandchildren about for some time to come. A royal charter is, of course, a sovereign prerogative. How far can that prerogative be circumscribed, if at all, by any decision of either or both Houses of Parliament?
Let me test my doubt in this way. The creation of Peers, as we well know, is the prerogative of Her Majesty the Queen. Any decision taken by either House to circumscribe that authority to the slightest degree would be invalid. If I am correct in that submission, does it not apply to this situation equally so? In other words, any decision by both Houses of Parliament to circumscribe that absolute, sovereign royal authority will be less than valid. It may well be, and probably would be the case, that Her Majesty would graciously surrender her prerogative, but that is a different matter. I am raising this point now as a very narrow, legalistic point, and I would be grateful if I could be told exactly what the constitutional answer to it is, if you please.
Baroness Deech
My Lords, following on from my noble friend’s comments, will the Minister explain how any future Parliament could be stopped from repealing this amendment by a simple majority? There is, as far as I understand it, no such thing as entrenchment in our law because our Parliament is sovereign. Were a future Parliament to become extremely annoyed with excesses of the press in some way or whatever it might be, I cannot see any mechanism for preventing a future Parliament from simply repealing this amendment by a straightforward majority.
Lord Wigley
My Lords, I intervene very briefly to indicate that it is not just the three main parties that have taken an interest in this. To the extent that it has been possible for my colleagues in another place to be in communication with the larger parties, we are grateful to have been in on the arguments.
I added my name to the subsequent bank of amendments, which may or may not be necessary now, so perhaps I may raise two questions to the Minister. First, will any new commission or regulatory body be subject to freedom of information applications? Secondly, can we have an assurance that any arbitration service will be free for claimants to use so that ordinary people can have their opportunity to get redress against being abused by the media?
Lord Lucas
My Lords, I am concerned that the words,
“with functions relating to the carrying on of an industry”,
may introduce a lacuna into this amendment. I am not at all sure that we are dealing with an industry now, and I am certainly not at all sure that what we will have in a few years’ time can be described as an industry. The press function in society is undergoing radical changes and may well emerge in a completely different form. The royal charter, as we have it at the moment, seems to anticipate that. So I wonder why we have those words in there. It merely allows someone to argue that this thing that we are regulating is not actually an industry, it is an activity. I cannot see why those words add anything or are necessary. It seems to me that they make this amendment vulnerable to a Government sidestepping it by just saying that it does not apply because it is not an industry.
I am grateful for the advice of the clerks that I do not need to pursue this by means of a manuscript amendment to a manuscript amendment. This being a subject that has been introduced for the first time at Report, we are allowed to pursue amendments at Third Reading. At the moment, I certainly intend to take that course.
Lord Morris of Aberavon
My Lords, I add my concerns to those just expressed regarding the requirement of a two-thirds majority in both Houses. I was a little baffled when I read this for the first time. Perhaps we could have an explanation of how it will work in practice. Our understanding, gained from student days, is that no Parliament can bind its successor. If another Parliament, by a simple Act of Parliament—in Churchillian terms, by a majority of one—deletes this provision, then this cannot stand.
I am sure that greater minds than mine have considered the matter and that we can have an explanation, but the House deserves one on this point of how it will work in practice, given past practice that you cannot bind a successor Parliament.
Lord Low of Dalston
My Lords, I do not wish to delay your Lordships for long, because I imagine that the House will wish to move to a resolution on the amendment fairly speedily. Nor do I wish to sow doubts about the viability of the compromise which has been reached on grounds of high jurisprudential and constitutional matter. Instead, I raise a rather more down to earth and practical question for the Minister to respond to. I imagine that I am not the only person who has not been able to pore over the detail of the proposed royal charter, but I am aware that two of the things that Lord Justice Leveson required of any guarantee of the regulation of the press were that it should be both independent and effective. I wish to address the question of independence.
There has been much discussion in the media over the last few days of an intervention by some members of the press who sought to ensure that the press should have a veto over the membership of the regulatory body. I would like to be assured that that requirement on the part of the press has been abandoned, and that the regulatory body will be entirely independent in that sense and not subject to press interference over its membership.
Lord Jopling
My Lords, my old friend, the noble Lord, Lord Elystan-Morgan, said that he did not want to make a pettifogging lawyer’s point. I am no lawyer, but I would like the Minister to look at what may be a pettifogging point. I raise it only because this is a draft charter, and therefore, I imagine, subject, if necessary, to amendment. Schedule 1, paragraph 3.2 of the draft royal charter states:
“a) That every Member shall have:
i. senior board level experience in a public or private sector organisation, including significant leadership responsibility”.
I do not argue with that, but it then goes on to state:
“b) That at least one Member shall have:
i. legal qualifications and skills, together with an understanding of the legal framework within which the Board must operate”.
That implies that it must be somebody trained in the law who has practised, whether as a solicitor or a barrister. It rules out somebody who has qualified for the Bar but then never practised. It occurs to me that there can be relatively few people of whom one can say that they have senior board-level experience in public and private sector organisations, including leadership responsibility, as well as having practised in the law. Of course there are such people, but I would have thought it must be rather a narrow field. I do not ask the Minister to reply to this now, but I ask whether thought could be given to the possibility of moving the provision for senior board-level experience into the lower category, which requires one person on the board to have that experience. That seems to bring all the benefit, but without having to choose from a very narrow field of probably highly successful people.
Lord Clinton-Davis
My Lords, I follow the remarks of my noble friend Lord Lipsey. In this debate, many important points have of course been made. I am troubled by dissension among certain organs of the press. I am not sure that I can be as optimistic as my noble friend about the consequences of that. I think that there is every possibility that those dissenting organs will decide to ride out the views of Parliament, and I am concerned that they might succeed in that direction. I hope not. I hope that the optimistic views of my noble friend Lord Lipsey will prevail, but what happens if they do not? I hope that the Minister will reply to that.
Baroness Wheatcroft
My Lords, this compromise is to be welcomed, and I suspect that the majority of newspaper groups will take the differing interpretations being offered to enable them to sign up to it. It makes no difference whether it is underpinned by statute or by a royal charter protected by statute. Whether it is a dab or a little bit of statute, a workable compromise is being offered, and I welcome it. As somebody who spent a long career in newspapers, I have been appalled to learn—and it has been a process of learning—just what terrible things went on. We should remember that many of the worst things that newspaper groups got up to were criminal. What was wrong was not just their behaviour, but the failure of the police to deal with those crimes. What is going on now is far too late. It was the very close relationships between newspapers and some sections of the police which allowed things to fester for far too long.
It may well be that the climate has now changed, but it is not Leveson that will deal with that. Leveson—or the royal charter and the regulatory bodies that will come about as a result of that—will deal with a much greater wariness on the part of the press as to what and what not to write. That is not a bad thing; a degree of care beyond that which has been exercised in the past would be welcome. Although the damages may well be exemplary in some situations, believe me, what will frighten the press more than anything is the prospect of being directed to publish an apology or a correction with exactly the same prominence as they gave the original story. That will really make people think very hard. My question regards the internet, because what goes on in the media now, as Lord McAlpine would vouch, is far more online than it was even 10 years ago, and the trend is moving very fast. Can we expect anything to put online publishers in the same category as paper publishers?
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, this is a defining moment in the future of press self-regulation and the response to Lord Justice Leveson’s admirable report. I am most grateful to Members on all sides of this House for their positive and encouraging comments on the conclusion of the cross-party talks. The Prime Minister committed at the outset to a cross-party approach as the best way to identify a strong and durable solution to the question of future press regulation. After many hours of probing and thorough discussion we have reached the conclusion we always hoped for: a tough, new, self-regulatory model that has the support of the Prime Minister, the Deputy Prime Minister and the leader of the Opposition.
A number of noble Lords have expressed concern about the impact of these changes on the freedom of the press, but we have been clear throughout this process that any solution we implement must protect press freedom, a vital pillar of our democratic society. This clause is an additional safeguard against government interference. Its purpose is to ensure that parliamentary approval will be required before a recognition body set up by royal charter may be amended or changed. Of course, Parliament is sovereign and no Government can bind their successors, but this is an additional step. We believe that it is a constructive and workable solution, which protects press freedom.
The charter lock clause applies only to charters that are established after 1 March 2013. Therefore, it will not apply to charters that were established before that date, even if they are amended in the future. It remains the Government’s position that a royal charter is the right vehicle for the BBC, which for many good reasons was established at arm’s length from politicians. As for the origins of the royal charter, a point raised by my noble friend Lord Fowler, I suppose I am equally happy if it came from a Times letter or a man on the Budleigh Salterton omnibus. The main issue is that we are there with it. Further, it is worth noting that there was extensive parliamentary engagement on the development of the present BBC charter.
I should like to pick up on a number of points made by noble Lords, and I shall commence with those of the noble Lord, Lord Foulkes. He asked whether this applies to the whole of the United Kingdom. He may well have said it, but I would hazard a guess that he had Scotland in mind. The Government are currently discussing these issues with the devolved Administrations and we will bring forward provisions to ensure that the territorial extent of this measure is clear.
Lord Foulkes of Cumnock
My Lords, can the Minister clarify that point? Most of us from Scotland would want it to apply to Scotland, just as it will to the rest of the United Kingdom. Is that the Government’s intention?
Viscount Younger of Leckie
I think I can best reply by saying that I shall stick to my previous remark, which is that talks are happening at the moment to work out a way forward. We need to come back on that particular question when we can.
Lord Cormack
My Lords, is it within the power of the devolved Scottish Government to ignore this or is it not?
Viscount Younger of Leckie
As I say, talks are ongoing, so it is best if I respond to noble Lords on the matter raised initially by the noble Lord, Lord Foulkes.
The noble Lord, Lord Elystan-Morgan, asked whether arbitration would be free to use for complainants. I can confirm that the charter provides that a self-regulator must provide an arbitration process that is free to use for complainants. The noble Lord also asked whether freedom of information would apply. Shortly we will debate an amendment on freedom of information, but the Government do not intend to extend the Freedom of Information Act to the regulatory body or, indeed, the recognition body.
Lord Elystan-Morgan
My Lords, the real question I raised is whether the royal prerogative in relation to charters, which is utterly sovereign, can be circumscribed in any way by any decision of Parliament. Has the noble Viscount obtained specific advice and information on that matter?
Viscount Younger of Leckie
No. The noble Lord deserves a full answer to that question. I think that the best thing would be for me to come back to him in writing.
Lord Wills
Before the Minister leaves this point, can he explain a little more about the Government’s thinking on why freedom of information will not be extended to the proceedings of this new body? It seems rather curious, when transparency is such a cardinal virtue, that it should be denied in the case of this body.
Viscount Younger of Leckie
I think it would be best to address that question in the next group of amendments. As I mentioned, we have tabled some amendments there and I will address the point then.
I believe that the noble Baroness, Lady Deech, raised the issue of dissolution. I think it is best if I quote from the draft charter:
“This Charter, and the Recognition Panel created by it, shall not be dissolved unless information about the proposed dissolution has been presented to Parliament, and that proposal has been approved by a resolution of each House. For this purpose ‘approved’ means that at least two-thirds of the members of the House in question who vote on the motion do so in support of it”.
That is how I read it.
Baroness Deech
With all due respect to the Minister, what I asked him about was this: what is to prevent the amendment that I imagine we are about to pass in order to bring the royal charter being repealed by a future Parliament of a different nature?
Viscount Younger of Leckie
I believe that there are safeguards in place, but I think that the best thing would be for me to respond to the noble Baroness with a succinct answer in writing.
Lord Morris of Aberavon
The noble Baroness, Lady Deech, made the point, as I did, that surely we are entitled to have the views of the Law Officers on this very important matter. It is a matter of long standing that you cannot bind a successor Parliament. A simple majority can overturn the whole of this mechanism, requiring a two-thirds majority in both Houses. I find it very difficult to understand and I may be wrong, but I should like an explanation. Moreover, I think that the House is entitled to one.
Viscount Younger of Leckie
I am certainly not denying that the House deserves an explanation, but I should reiterate that it is better to offer one in writing where the point will be presented thoroughly. I can certainly agree to do that.
The noble Lords, Lord Phillips and Lord Clinton-Davis—
Lord Clinton-Davis
The answer given by the noble Viscount to my noble and learned friend is not adequate. He should be able to reply on this fundamental point immediately, but he has not done so.
Viscount Younger of Leckie
I admit that the answer is not here, but I have pledged to write to noble Lords. We should remember that this debate has arisen out of an amendment to the Enterprise and Regulatory Reform Bill but, having said that, I am happy to answer questions raised today about this very important matter.
Lord Cormack
My Lords, I appreciate that it is difficult for my noble friend but the House is being invited to approve this amendment this evening, and therefore letters that arrive subsequent to any vote can have no effect. This Parliament can bind this Parliament; we all understand that. If there is to be any change, it must be made by a two-thirds majority in both Houses, but after 2015 there will be another Parliament. We really must have an absolute assurance from the Law Officers that they are confident that this will hold. I do not believe it will.
Lord Stevenson of Balmacara
My Lords, I hesitate to interrupt what is a bit of a spat on this, but perhaps I may make it clear, as the prime mover of the amendment, that it was not my intention in any sense to commit future Parliaments to the amendment that has been tabled today. In other words, I hope that this amendment will be passed by this House today, and then by the House of Commons, by simple majorities. It is therefore open to any future Parliament, if it has the guts or is foolish enough to do so, to bring an amendment to repeal it on a similar basis. The effect of this is simply to safeguard that which is in the royal charter, which is protected. However, of itself, only a simple majority is required.
Lord Low of Dalston
My Lords, perhaps I may try to offer the noble Viscount a little solace. Doubt is being cast on the viability beyond this Parliament of the compromise set out in the amendment that we are being asked to support. If it is not viable beyond the lifetime of this Parliament, it is difficult to think of a better solution that would be more viable. On that basis, it seems that probably the best course would be to support the amendment and the course of action which is enshrined in the agreement between the parties that we are being invited to endorse. We can move forward in the same spirit of good will and determination to make it work that we are asking of the press in return.
Viscount Younger of Leckie
I am most grateful to the noble Lord, Lord Low, and indeed the noble Lord, Lord Stevenson, for their interventions. All I can say is that I have pledged to write to noble Lords to clarify the position further. The position at present is that Parliament cannot bind its successors. However, as the noble Lord, Lord Stevenson, said, we have confidence that this will be an enduring settlement.
The noble Lords, Lord Phillips and Lord Clinton-Davies, suggested that members of the press could side-step the self-regulatory umbrella. They could do that, but at their peril. To pick up the point made by the noble Lord, Lord Lipsey, those members of the press who chose to do so would be more likely to lose respect and therefore circulation and they would be liable to greater punitive costs.
Several of your Lordships raised the issue of entrenchment—that is the description that is used. Parliament is sovereign, so could this provision be amended in future? As the noble Lord, Lord Stevenson, rightly recognised in opening this debate, we cannot bind future Parliaments, but we have every confidence that this will be an enduring settlement, which is just a reiteration of what I said a few moments ago.
The noble Lord, Lord Low of Dalston, asked whether the regulatory body would be subject to interference from the press. As the charter sets out, the recognition panel will be independent of the press and will not be subject to any interference.
Noble lords have raised a number of points about whether this is indeed a statutory underpinning of the regulatory body. We may disagree about whether this clause is statutory underpinning, a “dab of statute” or something that avoids politicians fiddling with the royal charter, but I hope that we can agree that the agreement between the Prime Minister, the Deputy Prime Minister and the leader of the Opposition is something which we can all support and which will deliver the tough press regulation that we all want to see.
Lord Lucas
Before the noble Viscount sits down, may I hope for an answer to the question that I asked? A letter will suffice.
Viscount Younger of Leckie
I pledge that a letter will indeed be written to my noble friend.
Lord Reid of Cardowan
Before the Minister sits down, let me just say that I am absolutely sure that the questions that have been asked by noble Lords are predicated on their desire that this will be successful. However, they are also asked in the context, as the noble Lord, Lord Lipsey, pointed out, of those who may well decide that they wish to oppose applying the rules of this charter. Therefore, it is absolutely essential that this is thought through in fine detail. If we do not know whether it applies to Scotland—where, incidentally, one of our highest-selling newspapers is printed and published—if we are not sure whether we can bind successive Parliaments and if we are not sure whether constitutionally we can constrain the sovereign through a royal charter, it seems that, although we have absolute agreement on what we want to do, we may not have the nuts and bolts firmly pinned down. The reason why this is important is that, if there is any lacuna or window of opportunity through which people can remove themselves from the process, we should understand that some people will do so. I hope that, before this returns to us, the Minister will make sure that every single dot and comma is bolted down so that we have confidence not only in the will of the people and the will of Parliament, but in the fact that we have produced something that is operationally effective.
Baroness O'Neill of Bengarve
My Lords, before the Minister replies, like many other noble Lords I have been trying to clarify where we are. I think that it is the case that the detour through the royal charter, which is where the two-thirds majority is mentioned, means that an ordinary vote in both Houses of Parliament would not be sufficient. This royal charter is an instrument of the Privy Council. We are not voting to create a royal charter, as that is beyond our powers. It is the Privy Council that will create it. We are indicating, as it were, a mechanism of access to that which it is intended the Privy Council will create at a future date.
Lord Phillips of Sudbury
My Lords, I am sorry to prolong this, but it seems rather important. The Minister said in answer to my question that the industry could indeed side-step the whole of this mechanism. Therefore, what we have here by way of protection—namely, you cannot amend and you cannot dissolve—could be rendered nugatory by the industry simply saying, “We are going to set up a parallel, separate body”. I wonder, therefore, whether some of what has been said is not perhaps misleading in terms of its efficacy.
Lord Stevenson of Balmacara
My Lords, the last few comments made by noble Lords obviously need to be picked up and looked at by the Minister. He has promised several letters, so I will not try and anticipate them, but I think that several of the questions bear on a point that was made earlier, which I would like to endorse. What we are looking at today is, of course, a compromise. It is a compromise in the best interests of the country. Indeed, it led my noble friend Lord Lipsey to say that this was a good day for democracy, not just because this was a step forward in the right way but because it was something in which we could perceive, behind the appurtenances of government and opposition, a real willingness to try to work together to create something that will last and will be substantial in addressing problems that we all know are there and whose solutions have been eluding us for some 70 years.
However, compromises, although they can work, will often leave one or two things unsettled. My noble friend Lord Reid and others have pointed out one or two that we really have to address. That is something that we can do, although time is short. The rationale for attempting to amend this Bill, and hopefully successfully doing so, was such that it was too obvious for us to ignore, but it raises questions of timescale. In order to get the Bill processed and brought into law, so that it underpins the work in the royal charter, we have to adhere to the timetable. I accept the points that have been made. I think that the Minister will take them away and do what he can with them. There are simple answers to a number of the points that were raised, but it will be important for those to be available to us as we see the process of the Bill going forward. There will be opportunities for that to be done.
I would just like to say three things. First, I feel bad at not having thanked a number of people for the work that has been done in bringing forward the arrangements that we are considering today. Primary among these, the noble Lord, Lord Fowler—we should have acknowledged this when he was speaking—has been an inspiration to many of us. I pay tribute to him and the constant work that he has put in to get us to where we are today. We have learnt a lot from him and we hope that he will see us through to the end of the journey.
The noble Lord mentioned—I echo his support—the work done by Hacked Off. The organisation started off as a rather odd collection of people but it found a rationale in that it provided two things that were really important. The first was that it recognised early on that the people who had the most of a lock on this process were the victims, but that they did not have an organisation. Hacked Off has provided that for them in a positive and supportive way, which was not to shut off the words that we wanted to hear from those who had been so badly affected by this whole process but to encourage and empower them to put across their points of view in such an extraordinarily effective way—we heard a small part of that from the noble Baroness, Lady Hollins, today. Hacked Off should be given a huge amount of support for what it has done.
It is also important to mention that, although this has largely been a creature of the major parties, the minor parties, from which we heard some evidence, were a key part as well. We would not have got to where we are today if they had not registered firmly in the last 48 or so hours that they had strong views and that they needed to be part of the solution and not ignored. I say thank you to all those.
Secondly, as part of the process, we should also acknowledge the work of many journalists. The noble Baroness, Lady Wheatcroft, spoke up for many of them and I salute what she said. She also gave us a helpful insight into possible behaviours by those with whom she used to work and perhaps still does. How sad that we did not hear from or have the benefit of the advice of the noble Lords, Lord Hunt and Lord Black, who I think appeared like ghosts at the Bar and indeed in the Chamber but did not contribute to our debate. We are the worse off for that, although we might speculate a little bit as to why that was the case.
My third point is simply to say that we should recognise that in entering into this compromise arrangement all parties have had to surrender a little bit, but in particular we have committed to two things, which should be on the record. First, during the passage of the Crime and Courts Bill, the three main parties will vote together to oppose any Leveson-related amendments unless they are agreed by all three parties. There are some exceptions that have still to be dealt with, one of which was referred to by the Minister. I put it to him that, as I understand it, it has not yet been agreed that the status of the charter body should be such that it would be outwith the responsibilities of the Freedom of Information Act. That is very much a live issue and bears back to the point made by my noble friend Lord Wills that it is rather odd to try to exclude from that process a body that should be concerned with information and information flow. Secondly, in an earlier debate, we in this House imposed some amendments to the Defamation Bill and it has been agreed that the clauses relating to the Leveson report in that Bill will be removed, if necessary by all three parties voting together. That will unblock the Bill, which, sadly, has languished and has not been seen since we passed our amendments some time ago.
I conclude by thanking the Minister for his support on this amendment. I have noticed that Ministers get quite attached to the Bills that they have to deal with. The noble Viscount, Lord Younger, took over from the noble Lord, Lord Marland, half way through the Bill and therefore perhaps has less attachment than he otherwise would have. Nevertheless, he has become a bit ferocious and protective of some things and I was a bit scared that he might take that attitude to this amendment, but he has not done so. He has been more than welcoming; he has been very supportive and has spoken warmly in support of this amendment today and I am very grateful to him for it.
Lord Skidelsky
“The PressInterpretation: “the media”, “news publishers” etc
(1) In this Act “the media” means—
(a) media organisations, and(b) servants and agents of media organisations in the performance of functions relating to the activities of those organisations.(2) In this Act “media organisations” means organisations which—
(a) make broadcasts within the meaning of section 95(1) of the Wireless Telegraphy Act 2006;(b) publish, for circulation anywhere in England or Wales, a newspaper, magazine or periodical (or online content associated with a newspaper, magazine or periodical), a substantial proportion of which consists of news of, or opinion and discussion about, current affairs;(c) in the course of a business, publish content on a website, a substantial proportion of which consists of news of, or opinion and discussion about, current affairs in England or Wales. (3) In this Act “news publishers” means media organisations referred to in subsection (2)(b) and (c).
(4) In this Act “regulated publisher” means a news publisher which subscribes to a recognised regulator.
(5) In this Act a reference to “conduct” includes a reference to omissions; and a reference to a person’s conduct can include a reference to a person’s conduct after the events giving rise to a claim.”
Lord Skidelsky
My Lords, this group of amendments stands in my name and those of the right reverend Prelate the Bishop of Wakefield and the noble Baroness, Lady Kennedy.
Like the Minister and the noble Lord, Lord Stevenson, I welcome the royal charter proposed by the Prime Minister with all-party support. Noble Lords have asked what is to happen to retrenchment if Parliament chooses to overturn it by a simple majority. That is a valid question. My answer is that this is the best we can do with the constitution we have. As the noble Lord, Lord Low, said, it ought not to obstruct the progress of the royal charter. I pay tribute to the vital part that our House has played in keeping pressure on the Government to act. It has shown resolution and dignity in playing this vital constitutional role.
I am speaking to this group of amendments solely for the purpose of keeping open the possibility that further amendments may be required if the very good solution that we have all agreed on unravels. I am not going to speak any further to them.
Amendment 84FA (to Amendment 84F)
Lord Whitty
“(6) Within eight months of the Royal Assent to this Act the Secretary of State shall lay before each House of Parliament an Order setting out the specific scope and terms of operation in relation to competition, mergers and plurality of ownership of the media and news publishers under the provisions of Part 4 of this Act and relevant provisions of the Enterprise Act 2002 and the Competition Act 1998 and that Order shall amongst other things specify—
(a) a requirement that the CMA shall carry out periodic assessments of the ownership and diversity of the news media;(b) a specific threshold of ownership or potential ownership within a specific news media sector or cross ownership between media sectors beyond which competition or merger concerns can lead to an investigation;(c) procedures under which the CMA is to conduct investigations into market situations or merger proposals within news media sectors;(d) procedures as to how the Secretary of State shall deal with recommendations from the CMA relating to issues of plurality within the news media sectors;(e) procedures whereby the Secretary of State can invoke public interest criteria in relation to issues of plurality of ownership within the news media.An Order under this section and any subsequent Orders amending this section, or Orders under this section, shall be subject to a vote of each House of Parliament.”
Lord Whitty
My Lords, I put down this amendment to the amendment tabled by the noble Lord, Lord Skidelsky, simply to draw to the attention of the House, and particularly to the Government, that the royal charter—like everybody else, I greatly welcome it—does not include one major dimension of Leveson, relating to the plurality of ownership of the media. At every stage of this Bill, I and others have asked whether we were going to act on the plurality dimension as well. The noble Lord, Lord Stoneham, asked about this only the other week. He was told, as I have been told, that the Government are still thinking about it.
In view of the nature of the debate this afternoon and the fact that the noble Lord, Lord Skidelsky, is going to withdraw his amendment, I will not debate this tonight. But I would be interested—and would be grateful if the Minister could take note of this—to understand what the intentions of the Government, and indeed of other parties, are in relation to the final eight recommendations of Leveson, which deal with an equally important aspect: the plurality of ownership. In the circumstances, I will not move my amendment.
(e) an amendment, repeal or revocation made by Schedule (Abolition of Agricultural Wages Board and related English bodies: consequential provision) has the same extent as the provision amended, repealed or revoked, subject to subsection (5A).(5A) The repeals of the following provisions in Schedule (Abolition of Agricultural Wages Board and related English bodies: consequential provision) extend to England and Wales only—
(a) section 67 of the Agriculture Act 1967,(b) paragraph 32 of Schedule 2 to the Social Security (Consequential Provisions) Act 1975,(c) paragraph 10 of Schedule 4 to the Social Security Pensions Act 1975,(d) paragraph 12 of Schedule 17 to the Employment Protection Act 1975, and(e) paragraph 4 of Schedule 2 to the Social Security (Consequential Provisions) Act 1992.”
( ) sections (Power to add to supplies protected under Insolvency Act 1986), (Corporate insolvency: power to give further protection to essential supplies), (Sections (Corporate insolvency: power to give further protection to essential supplies) and (Individual insolvency: power to give further protection to essential supplies): supplemental) and 78 extend”
“( ) section (Individual insolvency: power to give further protection to essential supplies) extends only to England and Wales.”
“( ) section (ACAS: prohibition on disclosure of information);”
“( ) section (Transitional provision: consultation);”
“( ) sections (Power to add to supplies protected under Insolvency Act 1986), (Corporate insolvency: power to give further protection to essential supplies), (Individual insolvency: power to give further protection to essential supplies) and (Sections (Corporate insolvency: power to give further protection to essential supplies) and (Individual insolvency: power to give further protection to essential supplies): supplemental;”
Broadband: Communications Committee Report
Lord Inglewood
That this House takes note of the Report of the Communications Committee on Broadband for all—an alternative vision (1st Report, HL Paper 41)
Lord Inglewood
My Lords, it seems a very happy coincidence that the House will now consider the report of the Communications Committee, Broadband for all—an alternative vision, just after the debate about aspects of Leveson, not least because of the point raised by my noble friend Lady Wheatcroft about the impact of the internet on the provision of news in this country. Of course, it is broadband and the technology on it that are driving forward that particular phenomenon.
There is an old joke about the man, normally in Ireland, who, when asked for directions, replies: “If you want to get there, you don’t want to start from here”. For me at any rate, this became a recurring theme of our inquiry and I hope that my remarks will make clear why.
The first reason is historical. The UK has various legacy communications infrastructures that do not reach some areas, overlap in others, and were built by companies, often for entirely different purposes, in previously unconnected sectors such as telecoms, transport, energy and cable television. There was no overall plan; none of them was conceived and built as part of a general-purpose communications infrastructure. This means that the UK does not start from scratch, as some other countries have been able to. It has had to start from where, ideally, you would not want to begin if you were setting out now to provide the whole country with world-class, state of the art connectivity.
The second reason why the old joke chimed with me, if I might be forgiven for labouring this old favourite, is that the Government’s strategy started from the wrong place. We believe they did not ask the right questions at the outset. This may have been due partly to the context I have just described, and possibly to financial constraint as well, but in our view, the Government’s strategy lacks just that. There has been insufficient proper strategic analysis, which in particular has led to a failure to recognise the real requirements of rural and dispersed communities, which in many ways have most to gain and hence the greatest need—but more of this later.
As your Lordships will know, there is hardly an aspect of our daily lives that is not touched in some way or other by the internet. It is simply extraordinary, indeed almost miraculous, how in really quite a short time the internet has utterly revolutionised “the way we live now”. It has had a transformative effect on commercial and social transactions, creating an information world sans frontières. The possibilities seem limitless: from telemedicine to the so-called internet of things, and everything in between. In fact, I note that just today, speaking at a conference in San Jose, Cisco’s Rob Lloyd, president of sales and development, stated that the company’s predictions indicate that the “Internet of Everything” will create £9.6 trillion of value for companies over the next decade, with the number of connected devices predicted to rise to 50 billion by 2020. In this regard, I welcome the news that the Universities and Science Minister, my honourable friend David Willetts, has recently announced that £6.2 million of government money will be set aside for a competition focused on the “Internet of Things”.
To give credit where credit is due, the Government are to be congratulated on making enhanced broadband provision a public policy priority. Progress is clearly being made. Certainly it was a relief when, shortly before Christmas, the European Commission finally granted state aid clearance for the BDUK scheme. As I say, it is indisputable that, in many respects, we are moving forward and more and more of our citizens are able to access better broadband. However, we found during our inquiry that there is a very real possibility that some people and businesses are being left behind badly and a digital divide will ensue. Inadequate access to the internet and all its benefits is causing great uncertainty, anxiety and frustration that the benefits of the information revolution are not going to be available for all.
We contend that the Government have proceeded with a flawed prospectus and that some of what looks like progress may prove illusory in the longer term. As I have already said, we believe that there has been an insufficient focus on rigorously thinking through questions of first principle, and an absence of an overall vision and understanding of pervasive broadband connectivity and its implications which are an essential component of national infrastructure in the 21st century. Broadband is not an optional extra; it is not a “nice to have” luxury. It is essential and must be thought of in the same way as we think about the road and rail networks as essential components of today’s economy and society.
Government policy appears to have become preoccupied with and derailed by the almost mono-focus on the delivery of speed to consumers. The Government’s specific target is to provide superfast broadband—defined as 24 megabits per second, although that figure has seemed over time to be a bit variable—to at least 90% of premises in this country by 2015, and to provide universal access to standard broadband with a speed of at least 2 megabits per second by 2015.
In our view, this preoccupation has had a detrimental effect on policy-making and the long-term national interest. I can readily understand that committing to the delivery of certain speeds was an attractive way to badge the policy with the public. However, in our view, the delivery of certain speeds should not be the lodestar of policy. What is most important is the long-term assurance that as new internet applications emerge, everyone—and I mean everyone—will be able to benefit, be they inhabitants of inner cities or residents in the remotest areas of the country.
In our report we proposed an alternative vision for UK broadband policy which is not target driven but identifies the establishment of the national broadband network as a national strategic asset which has got to be built in a way so that everyone can connect in different ways according to their own needs and demands. This, we believe, should be the policy’s focus.
In operational terms, we believe that the Government’s strategy has focused on the wrong part of the network—broadly speaking, the outer edge and margins and not the centre. We argued that the Government should be focusing on delivering a high-specification infrastructure which is future proof and built to last. I refer, of course, to fibre-optic cable, the most future-proof technology, which has got to be driven out as close as possible to the eventual user. Once that has been achieved, as well as mandating open access on fair, reasonable and non-discriminatory terms to this optical fibre from the cabinet to the exchange, we need to ensure that there is the same open access to links between the exchanges that feed the cabinets and to the higher level links into national and global networks.
Just as there is national planning for the national, regional and local hubs of our transport network, so there should also be national planning for a communications network of local, regional and national internet exchanges, all linked by ample optical fibre that is open to use by competing providers, on which different operators can site equipment and exchange traffic and develop their own services.
The model that the Government have fixed upon for rolling out broadband has led to BT dominance: it is now effectively the only show in town. This lack of competition is a concern because competition is a driver of value for money, innovation, excellence, and consumer services. Indeed it surprised us that a partly Conservative Government have designed a scheme which has led to so little competition. In saying this I hasten to point out that I am not in any way chastising BT, which is a very effective, sophisticated, world-class business which is behaving exactly as you would expect such a business to behave. Indeed, it must be commended for the investment it is making.
Certainly it has been a bit unfortunate that our report has been seen by some as an attack on BT. This suggests that they may not have fully understood what we were saying. No, our criticism lies with the Government’s strategy and the way in which they have set up a framework insufficiently open and available for competition of all kinds and have paid insufficient attention to bridging the digital divide that is opening up.
Our report has argued that broadband policy should have three key elements. First, it should be driven, above all, by the need to arrest and ultimately eliminate the digital divide. Secondly, it should also be driven by an avowedly long-term, but also flexible view of the infrastructure’s future. Thirdly, it should also strive to reinforce the robustness and resilience of the network as a whole. The spectre of a widening digital divide is a profound source of concern. We believe that that obliges the Government to address their cause with greater commitment and vigour than we believe is currently the case.
As I have already pointed out, our alternative vision is simple. It is of a robust and resilient national network linked primarily by optical connectivity, which in turn brings open-access fibre-optic hubs into or within reach of every community. This would enable diverse providers, both large and small, to contribute to the reach and resilience of our national connectivity and allow each and every individual to benefit from services, both private and public of whatever kind, which will run over it in time to come.
In addition, in order to realise this vision, it is our view that the country’s future broadband infrastructure should deliver the following. First, every community should be within reach of an open-access fibre-optic hub. Secondly, every such hub should be fed by ample fibre-optic cable, providing open access to optical links back to the exchange, and from it back to the public internet. This, of course, will not be free, but it will be made available to all on fair, reasonable and non-discriminatory terms, allowing anyone to build their own local access networks out from the hub as long as they meet appropriate technical standards, using whichever technologies they choose. Thirdly, at the very least, we expect a hub to be able to provide backhaul for a wireless network where there is demand. In this way all premises would be able to gain access to a wireless internet service from at least one of these hubs, assuming that they can afford to do so.
The Government set their course long ago but I hope that our model will inform their plans for the future. The Government’s response to our report was a disappointment; it did not, it seemed to us, engage substantively with our arguments. I hope that my noble friend the Minister can say something more today.
A crucial point is why there seems to be more focus in government policy on so-called superconnected cities at the expense of improving broadband in rural communities. Let me make it absolutely clear: I am not claiming that the superconnected cities programme is without merit; and it is very important to recognise that there is some very poor provision in some built-up areas, just as there is in rural areas. It is, however, mystifying to us that superconnected cities appear to have trumped improving provision in our remotest communities. Let us be clear, businesses in rural communities could and would tap the enormous opportunities presented by the internet and instant worldwide communications. For many it would be a real game changer. This would in turn contribute to economic growth generally, and more particularly to the diversification and strengthening of the rural economy, which seems to many to be being marginalised.
I read with interest the recent Institute of Directors’ survey of its members about broadband, which makes for worrying reading. It found a wide and real divide between rural and urban internet services, with satisfaction rates significantly lower for IoD members in rural areas. Only 34% of members in rural areas are satisfied with the speed of their fixed-line downloads while 45% are dissatisfied; a mere 13% of rural business leaders are satisfied with mobile download speeds while 60% are dissatisfied; and 21% of IoD members in rural areas are satisfied with the reliability of their mobile internet service compared to 46% who are dissatisfied.
In a similar vein, I note that Digital Business First, a campaign group made up of businesses from Buckinghamshire and Oxfordshire, recently released a report in which it calls for,
“better broadband and mobile infrastructure”.
It states that,
“the Government’s present course is paved with good intentions, but failing too many communities”.
It argues that a 10% increase in broadband reach could generate a 1% increase in GDP per capita—a significantly better rate of return than other infrastructure projects.
As I have already said, fast, reliable internet connections are vital these days for businesses, but clearly the existing infrastructure is falling short. Of course I appreciate that there are difficulties in reaching remote areas, that everything cannot be done at once, and that the availability of public money is especially limited at the present time. Nevertheless, public spending is a question of priority and I hope that more attention can be paid to those parts of the country that are missing out. In this regard, I am particularly interested to hear the Minister’s view on the important role of fixed wireless in areas where it is very difficult to get fibre-optic cable close to people. In those circumstances, fixed wireless offers real opportunities.
As I mentioned, the Government’s specific target is to provide universal access to standard broadband with a speed of at least two megabits by 2015. To explain what that means, two megabits per second is the speed required to watch the BBC iPlayer. There is some way to go to achieve that. I urge the Government to go further as they ponder the next phase of their strategy. They must ensure that nowhere in this country becomes a broadband ghetto. The real risk is greatest to those parts that are most marginalised now in the availability of public services, and hence most vulnerable to further marginalisation. This includes making rural Britain a priority. As a final thought, I wonder about the emphasis placed on grand projects such as the HS2 high-speed rail scheme, which involves multibillion pounds of public expenditure. That might have been better spent on broadband provision. I will just leave that there for now.
Finally, I thank our specialist adviser, Professor Michael Fourman, for the expertise and enthusiasm that he transmitted to all of us, both members and clerks. The jargon used in this field is endless and utterly bewildering at times. For some of us at least, the technology is not far behind it and Michael was adept at guiding us through the jungle. I look forward to the debate and the Minister’s response. I beg to move.
Lord Haskel
My Lords, I congratulate the committee on and thank it for its report. I welcome the committee’s higher ambitions for broadband. The Government’s concentration on practical limits expressed in their reply, although understandable, is hardly inspiring. I agree with the committee that a vision for broadband is more than just speed and targets.
There is no doubt that fast broadband promises jobs, growth, new businesses and new business methods—all things that we are trying to achieve to get some life into the economy. There are also the social promises of broadband: health, education, skills, training, social and cultural elements, entertainment, and, as the noble Lord, Lord Inglewood, reminded us, news. It is the promise of this digital oxygen that makes broadband the infrastructure of the future. But I have a nightmare: a nightmare that we will build this infrastructure and then find that it is not used to its full extent, that the promise falls short not only because of the “not spots” but also because of the non-use.
I remember more than 30 years ago when we all got our first computers. Mine was a BBC Micro—a wonderful bit of technology at the time. You switched it on and there on the screen you got the “>” prompt. Then you were on your own. We had to wait for user-friendly software to come along before ITC became a real benefit. Can something like that happen again, by concentrating on the delivery of broadband without at the same time concentrating on its use and application? New uses are being discovered every day but will we take advantage of them?
Last week, I attended the Digital Business First presentation of its report on high-speed broadband for Britain. The response was given by vice-president Neelie Kroes, who is responsible for the digital agenda for Europe at the European Commission. Incidentally, we were also promised a response from the Secretary of State for Culture, Media and Sport, but neither she nor somebody from her department turned up. Vice-president Kroes told us that 98% of the population of Denmark has access to fibre, but only 10% take full advantage. She contrasted this with Estonia, where things are the other way round and the country has gone completely digital. She told us that 40% of Italians never visit the internet. I think that her message was that even if you provide the broadband, do not assume that people will automatically take it up. It needs a positive effort. I agree with her. Does the Minister agree? If so, what are the Government doing to encourage the use of broadband so that the infrastructure that we are building is fully utilised and reaches its full potential here in Britain?
Yes, I know that there are initiatives. We get a bit off our income tax if we send in our returns electronically. Farmers get their payments electronically. We can receive TV and radio broadcasts over the internet and a start is being made on smart metering, education and monitoring health. But all these things happen slowly because, as we all know, social changes take time. Meanwhile the technology is racing ahead, and so is mobile technology. Will the technology leave the users behind?
New concerns are emerging. How can we ensure that mobile technology and fixed line can work together? What will the structure of the market be to accommodate this? Vice-president Kroes told us that she hoped that we might be able to use several operators on the same equipment as we moved around. There are other concerns, such as confidentiality. It is getting more and more difficult to protect confidentiality regarding our health, personal lives and finances. People are concerned about that.
I was in the US recently and was closely questioned on the proposed European rules regarding privacy, because there is talk there of a consumer privacy Bill of Rights. I was introduced to a company that had a database of 190 million US citizens. It offered me lists of people classified by profile. There is concern about the way that the data companies access this information and market it. This ties in with concerns about big data and the use of secret algorithms that do everything from making money on the stock market to finding love. Hand in hand with this, broadband development must campaign on how to be connected, free from worry and concern. Content should encourage participation, indeed, demand it, but we must also know what our rights are when we are online.
Surely these are matters on which the state and the market have to work together and innovate together. If we are to get the full benefit from our investment in broadband, and if our ambitions for broadband connectivity are to be realised, all this has to be combined in a single vision. Do the Government have one?
Lord Clement-Jones
My Lords, first, I declare an interest as a former member of Huawei International’s advisory committee. It is a pleasure to follow the noble Lord, Lord Haskel, and his thoughtful speech. He clearly needs to join the Communications Committee.
The economic and cultural benefits of broadband are considerable, as stated by my noble friend Lord Inglewood, who was our tireless chairman during this inquiry and who continues to be tireless on further inquiries. It was a pleasure to serve under him on the committee. I congratulate him on his lucid introduction to what is a very complicated subject.
Connecting Communities, the study by Dr Tim Williams, describes in a light-hearted and amusing way the various activities that now can be conducted. He can do these, as he says in the study, all before breakfast from my living room in Hackney. He puts it in graphic ways:
“Organise a street party with people I’ve never actually talked to before”;
“Libel fellow professionals and other enemies”;
“Complain bitterly about potholes in Birmingham”;
“Watch councillors in Kent make budget-decisions live, whether wisely or not”;
“Campaign against new development anywhere”;
“Petition, in an act of ‘crowd sourcing’, national government to change the law”;
and finally, an example that demonstrates the age of this document:
“Participate in the worldwide community of long-suffering Welsh rugby supporters”.
You could not write that now.
The internet, broadband, has become indispensible for both private and public use. In certain areas there has been a great acceleration in its use, not least in the area of entertainment, where increasingly over broadband people access iPlayer, YouView, Netflix, Lovefilm and so on. Smartphones and tablets have made us demand better, faster and more reliable broadband, whether fixed line, wi-fi or mobile. However, the key aspect that the Communications Committee addresses, as my noble friend made clear, is that it is important that no one should be left out of getting the benefits of broadband.
I welcome an early success for the Secretary of State in her new role as regards the Government’s securing the consent of the EU for state aid requirements in their investment of £530 million in rural broadband deployment last November. However, of the two preferred bidders in the government scheme, only BT—as again mentioned by my noble friend—has received any money so far. However, it seems that currently some 7.5 million taxpayers are still not online. Much of the rollout of the new services will cater for them in the plan to reach 90% of homes with 24 megabits per second or greater. This is all designed, in the words of the previous Minister, to create the best superfast broadband network in Europe. However, the key question is increasingly: can we provide adequate services for the last 10% who not receive superfast broadband? Will the target of at least 2 megabits per second be enough for them? Are we creating a digital divide?
Broadband is clearly vital for communities, but even with mainstream business the temptation to be self-congratulatory should be resisted. As my noble friend mentioned, we should look at last year’s IoD survey of internet infrastructure. I welcome provisions in the Growth and Infrastructure Bill, as recommended by the Communications Committee, to ensure faster broadband infrastructure rollout with fewer planning restrictions for five years, subject to new guidelines agreed between local authorities and the digital stakeholders’ group. I also welcome the Government’s acknowledgement that speed is not the only factor; choice, coverage and price are important, too. There is also the Law Commission review of the Electronic Communications Code. When will that come to fruition?
I welcome those developments. That said, there is a difference of philosophy between the Government’s vision and the committee’s recommendations. As my noble friend made clear, the Communications Committee would prefer to focus on open access fibre optic hubs initially—cabinets, essentially—which we believe would have the best chance of eliminating any digital divide and delivering the final 10% more effectively through attracting innovative solutions to delivering higher broadband speeds to rural areas. Network access conditions do not by themselves go far enough. The Government, in their response, talk about the expectation that consumers will be able to benefit from competitors deploying competing networks using BT’s ducts and poles, but this is only an expectation. What obliges the opening up? Likewise, we believe that the opening up of dark fibre is crucial and that the adoption of common standards to allow bespoke local solutions should be adopted.
Secondly, there is the question of whether Ofcom should have the additional duty given to it of ensuring the efficient utilisation of existing capacity to provide affordable access to wholesale and retail connectivity. Is that not exactly what Ofcom should exist to ensure?
Thirdly, there are the deficiencies in the procedures for the Rural Community Broadband Fund, particularly the requirement to raise 50% of the funds up front. Surely this is a serious criticism, and communities are finding it difficult to raise the necessary funds.
Now, after the publication of the report, we see that the Government have allocated a further £300 million to be spent after 2015 on broadband infrastructure. The recent Carnegie UK Trust paper, Going the Last Mile, discusses a number of options for how this should be best spent. The options include superfast broadband rollout to the final 10%, promotion of the community enterprise approach, the provision of greater infrastructure competition and the attraction of additional investments, all of these solutions using specialist investment intermediaries.
Have the Government yet formulated how this expenditure will be allocated? Can the Minister reply on that? I look forward generally to the Government’s reply.
Baroness Deech
My Lords, in my view, we stand at a moment comparable to the start of the provision of universal electricity, water, phone lines or railways, where we have to consider the future of the whole country, a future beyond even that which we might envisage today. For so fast are the developments in the field of internet that in 10 years, let alone 100, there will be usage that could not have been envisaged today, and for that it is the duty of our generation to lay the solid foundations. We need a nationwide communications structure.
As with railways and manufacturing, we in this country risk paying the price of being one of the first in the field and commencing our infrastructure without the benefit of today’s insights. Countries that have started from scratch after us have, rather irritatingly, been able to do better. One example is our widespread use of soon to be outdated copper wire rather than fibre optic.
Anyone who has followed scientific developments in the past few decades will agree that there is no need to justify greater access to the internet and faster broadband speeds. If they are available, innovation will follow. It would be tragic if the recent clamp on blue skies science thinking—that is, government demanding instant impact if grants are sought—were to spill over into broadband provision.
The internet is as essential to a new home as electricity and plumbing, and broadband connection should be an integral part of all new housing developments, preferably fibre to the house. If we see broadband connectivity as a facet of the national infrastructure, then there must be coverage for rural communities, and coverage matters more than speed. Speed is less important than getting a national network constructed with an eye to the future. For as long as some in our community have no access to broadband at all, or the very minimum, the Government’s ambitions for speed remind one of the unfeeling remarks wrongly attributed to Queen Marie Antoinette. When told that the peasants had no bread, she said, “Qu’ils mangent de la brioche”—let them eat cake. Or one is reminded of the ancient Chinese Emperor Hui of Jin, who, on being told that his subjects had no rice, commented that they should eat meat instead. If you have no coverage at all, the availability of speed is no substitute.
The Government’s target is for the UK to have the best superfast broadband in Europe by 2015. It is now available to about 60% of households, and we are the 16th fastest in Europe. The final 10% of the population is the difficulty where they are spread thinly across a large terrain and it is not profitable for operators to install broadband. That could be 2.5 million households. Ofcom reported recently that the actual British broadband speed had risen by one third in the six months from May to November 2012 as take-up of the superfast service increased. It has trebled in the past four years from 3.6 megabits per second in 2008 to 12 megabits now.
Why does coverage, let alone superfast speed, matter? It matters for economic and social reasons. The internet economy accounts for 8% of UK GDP and a quarter of our economic growth. The internet creates 2.6 jobs for every job made obsolete, according to McKinsey. We are a nation of online shoppers: 23% of UK retail is likely to be online by 2016, so the contribution of the internet, not necessarily superfast, is very significant.
On the social front, we must take account of the needs of the deprived and of rural communities. There are the poor who never use the internet at all and rural communities which cannot access broadband. The Government themselves are a leader in placing services online, whether it is tax returns or NHS Direct, but the benefits cannot be realised if there is no fast broadband and, a fortiori, if there is no internet access at all. Many of the population who must use and need the government offerings of benefits online are those who have no access and are therefore doubly deprived. Eight million people in the UK have apparently never been online; they are the older, the disabled and the non-English speakers.
This is a good opportunity to welcome the appointment of Martha Lane Fox, the UK digital champion, to your Lordships’ House, and we look forward to the contribution she may make in elucidating the internet needs of the nation. A PricewaterhouseCoopers report undertaken for her estimated that there are 4 million adults who are digitally, as well as socially, excluded. Without internet, they are missing out on annual savings that might amount to £560 per household. Their children, who have no internet or computers at home, risk falling behind in educational performance and may fail to find jobs that are advertised only online. The whole population, but especially the less well off, need to make the savings and profit from shopping and paying online, getting educational and job opportunities and thus helping the Government to make the savings they envisage from increased internet use. Of course, there are the running costs of internet and the purchase price of computers to contend with; arguably, some of the funds set aside for superfast broadband might assist certain groups to get set up online.
The Select Committee on Communications, on which I am privileged to serve under the brilliant chairmanship of the noble Lord, Lord Inglewood, discovered that simple county and local loans are needed to enable rural communities, whose needs are so urgent, to set up superfast broadband. In Wales and Scotland, only 30% to 40% have superfast broadband. Rural communities are in particular need of broadband because travel presents more difficulties, and they can save money and journeys by going online for business and social purposes. The purely commercial approach will not work: it has to have an element of the universal and social. Our committee heard too many stories of difficulty in accessing such loan money as there is because of inflexible and arbitrary rules. It was alleged that Defra’s Rural Community Broadband Fund was confused in ambit and that it requires communities to spend on the network first and claim a refund later, which is not a practical proposition. Reaching everyone in the most far-flung corners would cost several billion pounds. There are differing estimates about how much it would take for the national provision of hubs and then on to the home. Whatever the sum, it will be too much for the public sector to bear right now, and it is not realistic to expect normal commercial providers to operate it because of the risk. Rural deprived communities offer low financial returns because of the sparse population and distances from existing fibre. If, as our report suggested, there were to be open access fibre-optic hubs within the reach of every community, local groups could access broadband in the short term by their own organising and upgrade over time to faster speeds.
Our committee was clear that superfast broadband requires fibre optic, not copper, and that what is important is not speed but getting fibre-optic hubs near every community and getting the entire nation online. We trust that the Government will agree with our recommendations and recognise the future investment value of the great infrastructure building that we have commenced.
Baroness Fookes
My Lords, I, too, want to pay tribute to my noble friend Lord Inglewood, not only for his excellent chairmanship of the Communications Committee but for the wonderful summary he gave of the work of the report we are discussing tonight.
I listened with great care to the noble Lord, Lord Haskel, particularly when he suggested—I hope I have this right—that the technology is perhaps galloping ahead but use is not necessarily following behind. I differ from that. As far as I can see, the take-up in this country—apart from in the pockets the noble Baroness, Lady Deech, mentioned of those who are not connected at all—is enormous and galloping. Our concern must be to make sure that the technology catches up with it.
I shall give one small example. I am a governor of a school in Devon. I was there for a governors’ meeting and, yet again, we were discussing electronic communications, their use in the school and how we could make sure that we had good services. In the morning, we went to two lessons. In one lesson that I went to, the electronic side was a key part. It was a history lesson looking at the rise of Nazism; the electronic part was very cleverly integrated and used, and the preparation would come in that format. That, therefore, is one example of how it might be used in education, and there are endless other ways of doing it.
I must confess that when we first embarked on this I was not a little alarmed. There was a whole range of jargon with which one had to become familiar, such as “dark fibre”—which sounded positively evil although it simply means that it is not being used—cabinets, copper wiring and fibre-optic wiring. All this became slightly clearer after we had paid a visit to a division of BT where we saw an example of a cabinet—which looked like a cabinet—copper wires and the amazing fibre-optic wires, which are the size of a human hair. What one can get through them is beyond my real comprehension, but I realised the immense capacity of this form of communication, which, even by the way in which we are now going forward with technology, looks as though it will be useful to us for decades to come.
That is why I am so keen, along with other members of the committee, that the Government should embrace the idea of fibre-optic cabling and not rely on more outdated technologies that will not be able to meet our needs, both now and certainly in the future. I share with others this desire that fibre optics should be taken as near to people’s premises or homes as possible, as a prudent way of developing broadband. In connection with that, I hope that the Government will go so far as to introduce regulations to require every new building to be given the ducts and requirements that are needed for this to be introduced. Installation in existing buildings will be difficult enough but this is absolutely essential, and I hope that when the Minister answers tonight he will be able to give us some assurance on that point.
This is an amazing new technology that represents immense opportunities for us as a nation. Others have indicated the varying uses towards which it is already put, and one cannot see that there will be any lack of new opportunities. Some of us went to what I suppose you could call the BBC’s future technologies department, where a teenager’s bedroom had been set up with all the various things teenagers like to use. It was very instructive and, for someone as old as me, exceedingly frightening. However, at least it gave an indication of the manifold uses to which all these modern tablets, televisions and interactive TV sets can be put. We are entering what the heroine of The Tempest might have called a brave new world—one that I am seeking to embrace as best I can.
Lord St John of Bletso
My Lords, I join in congratulating the noble Lord, Lord Inglewood, on his able chairmanship of this very topical inquiry, and in thanking our specialist adviser, Professor Michael Fourman. All too often, excellent Select Committee reports from your Lordships’ House get scant media coverage, but it was encouraging that this particular inquiry received extensive coverage.
While I welcome the Government’s target of having the best superfast broadband network in Europe by 2015, I fear that it is a bit of a pipe dream. It is well known, from the raft of current statistics on broadband availability, that the UK is currently 16th in Europe on average connectivity speeds, and 21st globally on percentage of connectivity above 10 megabits per second.
The noble Lord, Lord Inglewood, referred to the recent IoD broadband services report, which concluded that faster internet services would improve the productivity of companies by some 83%—a staggering statistic—and would encourage 13% of businesses to hire new staff.
Both this survey and our report concluded that there is, sadly, a very wide divide between rural and urban internet services and connectivity. I entirely agree with the recommendation in our report that if Her Majesty’s Government or indeed private enterprise are serious about providing a fast, resilient, reliable and cost-effective broadband service to consumers, including businesses, we need a long-term and flexible approach to broadband infrastructure policy. I also agree with what the noble Baroness, Lady Fookes, has just said: there is no doubt that the silver bullet to providing a long-term solution to the ever-burgeoning demand for superfast broadband, particularly as a result of increased data traffic, is the provision of a nationwide, point-to-point, fibre-optic network, ideally installed directly into homes.
Fibre-optic cables are cheap, long-lasting and have scalable capacity. Moreover, they do not suffer from the limiting primary characteristics of copper and aluminium cable. Unfortunately, our legacy communications have been designed predominantly using copper. This has proven to be ineffective for the demands of ever-increasing data traffic.
I concur with other speakers that the Government should not be too concerned about speed; they need to be more concerned about coverage. In this regard I wish to make brief mention of the importance of better utilisation of ducts. It is becoming increasingly evident that the best way to link fibre optic to homes is by using ducts, routed through a multiplexer cabinet situated beside existing PCPs, which are the green cabinets that we see on pavements. It is well known that the UK has a well established underground duct network, and BT and other utility providers also have extensive duct networks. If the Government are to have any chance of achieving their stated objective of providing the best superfast broadband network in Europe by 2015, more should be done to encourage the utilisation of these ducts for an improved rollout of the fibre network.
Clearly, the last mile provides a major challenge to the effectiveness of providing a superfast broadband network to consumers and businesses alike. Our report made reference to there being,
“no proposed technologies that can offer comparable data rates over long distances”.
It went on to say:
“The bandwidth limits of fibre are around 100,000 times those of copper”.
There is one radio frequency technology that has not been fully embraced, particularly in the remote rural parts of Britain, where there is low population density. White space spectrum was specifically referred to in paragraph 282 of the report. Extensive research was commissioned by the University of Strathclyde a few years ago, partially funded by the Westminster Technology Strategy Board and in collaboration with BBC and British Telecom, in which white space spectrum was used on the Isle of Bute using masts which could deliver, to residents who had previously had almost no broadband access, download speeds of up to 14 megabytes per second and upload speeds of 4 megabytes from a single mast with a three-mile radius. Unfortunately, this technology, which could provide a massive boost to rural communities in Britain, has not been embraced. I certainly support paragraph 282 of the report, which says:
“Loosening the reins a little could very quickly have the effect of bringing enhanced broadband capacity to the final 10%”.
I should perhaps also add that the white space spectrum broadband solution has recently been backed by Microsoft in Kenya, where there is a desperate need for broadband services, and is being installed right now. It is reliably forecast by the experts to provide up to 18 megabytes of broadband within a 10-kilometre radius from a single mast. Technology such as this should be embraced in the overall solution in this country.
I also endorse the recommendation in our report that the Government should incorporate open access to dark fibre, particularly as a feature of the framework agreement with suppliers. Clearly, as the Government’s response points out,
“a mix of technologies will be needed in the UK, given the topography and commercial challenges faced in the more rural and remote areas of the UK”.
While I appreciate the budgetary constraints of the Government, I wholeheartedly support the recommendation in paragraph 266 that the Government,
“should, as an intermediate step, aim to bring national fibre-optical connectivity”,
and, more specifically,
“fully open access fibre backhaul”—
these cabinets referred to by other speakers—
“within the reach of every community”.
This would go a long way to ensuring that the digital divide is not widened.
While much has been achieved, particularly in the past five years, in improving the plumbing and wiring of broadband infrastructure, as my noble friend Lady Deech mentioned, not enough support is being provided for the 7 million adults in the United Kingdom who still do not have the skills and motivation to use the internet and the inherent advantages therein. I should declare an interest as the past chairman of the charity Citizens Online, which has been promoting universal broadband coverage across the United Kingdom, as well as measures to bridge the digital divide. Very few of the new NGA contracts for high-speed broadband under the Broadband Delivery UK remit include any provision for digital inclusion or demand stimulation.
In conclusion, while I believe that a lot more can and should be done to provide a longer-term solution in the provision of superfast broadband across the UK, I found many of the Government’s responses to our report encouraging, although I do not feel that they have gone far enough in their long-term strategy for this crucial utility. Clearly, there needs to be a lot of collective working between government, regulators and industry. In this regard, I wholeheartedly support the recommendations of this report and look forward to the Minister’s reply.
The Earl of Selborne
My Lords, I join others in thanking the chairman, my noble friend Lord Inglewood, for the way in which he chaired the committee and introduced the debate today. From the speeches that we have heard, it is clear without doubt that the future of our economy will depend to a large extent on our ability to connect to broadband throughout all communities and sections of the population. It is not just about wealth creation and social cohesion. The ability to participate in healthcare and whole tranches of public activity will depend on connectivity. The Government must have a policy, and the Government are right to have a policy, but perhaps, as we have said in our report, they have been preoccupied by one aspect, which is to try to be the leader in Europe on superfast broadband.
The first priority has to be to achieve connectivity. If you have excluded populations, you will have a social divide and a lack of social cohesion. The Government need not worry about speed. That will follow. There are not very often market failures when it comes to cities. I therefore agree with those who have said that to spend money on improving superfast provision in cities is not something that the Government need to worry about if the market can do it itself. But there will be market failure in remote areas, where the costs of pushing out the broadband structure are too great. There will be market failure where the incumbents have an advantage, which inhibits other incomers who can help to provide some of the very many solutions that will be required to get this connectivity to all parts of the population. That is something that we are failing to harness—the undoubted innovation and enthusiasm from local communities, small and start-up companies, all of which would have a contribution to make. We go into some detail in the report. It gets pretty dense, I admit, when we talk about things such as passive optical networks and physical infrastructure access. But this is the key to it.
At the moment, we have what my noble friend Lord Inglewood called “the only show in town” for many rural areas. Whether we like it or not, because it is in the very nature of broadband to have high fixed costs, low marginal costs and great economies of scale, inevitably the incumbents will have a strong advantage. I think that we should be proud of what BT has done. It has improved enormously, by technical innovations, the ability to provide broadband on the existing infrastructure. Of course, it is rolling out broadband at great speed. It says that it hopes to achieve 90% coverage by 2017, but that immediately begs the question as to whether in national terms that is a satisfactory objective. I would certainly say, particularly as I am from a rather remote corner of the rural community and likely to be one of the 10% left out, that it is not satisfactory. So let us see what we can do to achieve that connectivity well before 2017. I do not think that anyone has mentioned yet the 4G mobile broadband technology, which is very soon to be with us and will certainly provide greatly enhanced mobile internet access to areas within adequate connectivity.
There are many different contributions to be made. The case for government involvement and public funds to be deployed rests, as I say, on achieving this reduction of the digital divide. The long-term solution will, ultimately, be fibre to the premises and the home. As others have rightly said, the cost of rolling out fibre to the home is exorbitant. We have a temporary solution, and a good one—the BT solution of fibre to the cabinet. It achieves the objective of reducing dramatically the costs. Usually, you have copper or some other connection from that cabinet. But whether BT likes it or not—it is in something like denial over this—it has the disadvantage that it does not provide open access, as I would understand it. In other words, as a local access network provider, you cannot simply move in with a compatible bit of machinery, stick it in there and do what you are trying to achieve. It is not an open access hub, as we have tried to demonstrate. That is where you come back to the technology of the passive optical network, which is a bit of a fix, as those will know who have read the report with great care. It certainly does not achieve what some of those independent service providers would have hoped for.
I think that the Government should ask quite firmly that, for the next tranche of money, which we hear will come in 2015, there should be proper open access. It is not beyond the wit of man. Clearly, there is no great financial advantage to the incumbents to roll out proper open access, but that is what is needed. If it is what is required, that is what will happen. It must be future proofed. We know that the technology changes dramatically fast. We know that some of the existing solutions, including the cabinet, will not stand the test of time for very long, but the fibre-optic cable will. Ultimately, it will be able to handle this vast amount of information. Therefore, we must make sure that as we improve the broadband infrastructure, we have the ability to upgrade and upgrade. That is why I say that, frankly, the cabinets are not very easily upgraded. You have to go back to the exchanges and think again. That is why we should look on them only as a temporary expedient.
When public money is distributed to extend the commercial network, as is happening at the moment, the Government should insist on the long-term solution. We took evidence from a particularly impressive consultant, Lorne Mitchell, who is setting up a community scheme in Goudhurst, Kent. I think he was the first to put it to me how important it was for local groups to be able to access the middle mile and to get the backhaul back into the infrastructure. He said that the key to the problem is the openness of the middle mile, which is the connection back to the internet. If this can be designed in a way that gives each community a chance to get to one of these community hubs, it would be a massive leap forward. That is precisely what the committee report has tried to promote. I think it makes a lot of sense. However, the government response simply quoted a report which said that it was unrealistically expensive to have hubs in every community, and so it would be if you were to launch it all overnight. However, ultimately, it would be no more expensive than the cabinets. It is the same technology but it is a question of making sure that when you roll out the hubs, you do what you are not doing at the moment with the cabinets, and that is making them available to all. To say that they will cost far in excess of the funds available to the Government at present, as the government response does, simply misses the point. If the Government can fund any hubs such as cabinets or exchanges, they should be accessible to the community and to other providers. This simply requires a change in specification, not a change in the scale of funding.
I hope the Minister will recognise that, however impressive BT’s record of rolling out broadband is—it has, indeed, been most impressive—the interests of the BT shareholder and of wider society, particularly the 10% in rural communities who will remain without adequate connectivity in 2017 if present policies are continued, are not always the same.
Baroness Bakewell
My Lords, this is a wonderful report and I endorse all its findings. I am very proud to sit on the committee that produced it and I commend the noble Lord, Lord Inglewood, for his wonderful chairmanship. I wish to add just a few points as I am not on the speakers list.
We think that we are in the middle of a revolution but we might just be at the start of it. It is important that we endorse what is going on at the moment because it is not always possible for a contemporary society to know where it is. I agree with what the noble Baroness, Lady Deech, said in that regard. Did the 18th century realise the significance of a few cotton mills in Derbyshire? Did Victorian society appreciate the global impact of the Stockton to Darlington railway? Things could be much greater than we believe them to be at the moment. I believe that the Government’s policy has the wrong priority. As we have heard, their priority is the speed of delivery, and there is clearly room for improvement in that regard. The numbers have been quoted before. The UK ranks 16th in Europe and 25th globally. However, the high level of internet use and its economic contribution to the UK’s GDP—up to 23% of total retail—shows that something is working very well. E-commerce activity does not need the top speeds that are recommended. It is flourishing at lower than maximum levels. As we have already heard, what matters is to bring broadband within the reach of all and to maximise the use of broadband across the country. That is crucial for the economy.
In his recent report, No Stone Unturned, commissioned by the Government, the recommendations of the noble Lord, Lord Heseltine, for regional growth emphasised the need for local infrastructure, singling out skills as one of the main areas to be covered. A major component of such infrastructure must surely be broadband for all. We know that the demand is there and is urgent. As we have already heard, the committee heard many examples of local communities eager to move in this direction. Things are already working well. For example, only last week Cornwall increased its target goal for fibre roll-out from 80% of premises to 95% of premises. Cornwall has 250,000 homes and 20,000 businesses that have purchased superfast services from more than 30 retailers. They even reach the Scilly Isles. This is a trailblazing county well aware that its tourism industry, worth many millions, receives huge benefits from such coverage.
This proposal would constitute an economic advantage. The numbers are great but the investment for the future is very important. We need a long-term, thought-through strategy that will transform the economic connectedness of the country in much the same way as our railways sprang from the Stockton to Darlington railway line.
Lord Stevenson of Balmacara
My Lords, I was briefly a member of the Communications Committee and participated in about one and a half reports. It was good to hear so many of my former colleagues speak today on this very important topic. I thank the noble Lord, Lord Inglewood, for his very helpful introduction to the debate which helped those of us who are not so expert in some of these issues to get a handle on what the committee had been up to and how it was expressing its concerns. I particularly enjoyed his jest—if it was one—about the expenditure on HS2. I secretly think that the Minister who is about to respond may also have some sympathetic thoughts in that regard, although, of course, he is far too well bred to reveal them to us today.
The committee report, which is a very good read, and the government response to it, which is not quite as good, raises some very good points on the way in which broadband will influence society in its broadest context, how coverage is perhaps more important than speed as a basic understanding of what the aims and objectives should be, on the problems of the rural divide and the very real difficulties of exclusion that may follow from that and on the sustainability of the initiatives that have been put forward, particularly whether or not there will sufficient commercial competition to maintain the drives that are required. The report also covered a question which was raised by several noble Lords, including my noble friend Lord Haskel, about whether uptake will be one of the biggest stumbling blocks. However, there is general agreement that broadband infrastructure will drive significant economic value for the United Kingdom and its economy and is obviously central to our future prospects of growth.
The projected explosion of data consumption over the next five years presents a huge challenge requiring large-scale investment to upgrade the capacity of existing networks and deliver new connectivity. As we have heard, consumers demand high definition video and audio content both inside the home and on the move and are using all sorts of devices. Those of us with teenage children will know how complicated it looks when you are able to get inside the bedroom of a 19 year-old or 20 year-old and discover what exactly they are doing on all the machines that they have. These are all consuming huge amounts of data. It is that sort of response and connectivity that this report is trying to arrive at. Clearly, consumers will be the driving force of that, and indeed have been driving about a 30% increase year on year in terms of usage, but how do we realise the demand for that and the economic value of it if we fail to allow private network operators to commit large-scale investment to increase the capacity that is required? These providers are operating in a market where the dynamics of investment are extremely finely balanced. Indeed, it is interesting that one of the larger suppliers dropped out recently.
Surely the Government’s central objective for broadband interventions in both rural and urban UK markets should be to create the conditions in which private-led investment and innovation can flourish. Yet the policy to date has suffered from what seemed to be fundamental weaknesses. The rural broadband programme, to which the committee drew attention, has failed to stimulate private, competing investment and will be awarding £1 billion of public subsidy to a single incumbent. The urban broadband fund risks critically undermining continued investment in broadband capacity by overbuilding existing networks, and not enough has been done, as we have heard, to promote usage.
It must be a real concern that the Government have failed through their rural broadband intervention to replicate the conditions of infrastructure-based competition that have served the urban market so well. Markets that benefit from infrastructure-based competition are better served in terms of innovation and penetration than those in which the incumbent is placed under no pressure to supply better, cheaper products. Across Europe broadband penetration in markets with infrastructure competition is nearly 20% higher than in countries that rely on service level competition alone. This is something that the Government must take into account.
Driving growth among SMEs is critical to the future success of the UK economy and increasing uptake of digital technologies among those businesses is central to that goal. Yet the potential benefits offered by digital technologies are not currently being realised by UK businesses. Only two-thirds have a website and only one-third sell goods and services online. The Government’s advisers suggest that the central barrier to small businesses realising these benefits is a lack of practical, digital skills and a shortage of resources to undertake digital training. This is hardly referred to in the Government’s response. Given the current economic climate, and a context in which recent EU budget negotiations have cut broadband funding by 90%, it is absolutely vital that the Government adopt a smart approach to broadband intervention that targets public finance where it can deliver the greatest economic gains.
I want to conclude by asking the Minister a few questions. The Government say that their key ambition is to have the best superfast broadband network in Europe by 2015. However, as we have heard, the latest figures suggest that we are only 16th in Europe and perhaps 24th overall. What is happening about this? Can we have some detail about the plans that will deliver the best superfast broadband in Europe within a couple of years?
The lack of broadband provision in rural areas is holding back the countryside, both economically and socially. The NFU ran a poll in 2010 regarding broadband access in rural areas. Around 40% of respondents said that they could not get broadband at all, while 90% who could access broadband did not get a reliable connection. What are the Government doing about this?
The Countryside Alliance believes it is important that there is competitive rollout of broadband services if the current problems of high prices and poor service in rural areas are to be overcome. There should not be one single technology to deliver broadband. Competition should be promoted between technologies, as we heard from a number of noble Lords. Can the Minister explain what the Government are doing to promote competition here?
Industry studies agree with the Government that the cost of putting together a superfast broadband network is probably going to be close to £15 billion. According to a recent freedom of information request, of the four pilot superfast broadband areas, which were named by the Chancellor in the Pre-Budget Report in 2010—the Highlands and Islands, north Yorkshire, Cumbria and Herefordshire—a couple of them have not spent a penny and two of the others were just moving towards finding local suppliers. Can the Minister update us on what is going on here?
Finally, as my noble friend Lady Bakewell mentioned, in the Heseltine report, No Stone Unturned, the suggestion is made that broadband for all is a critical step towards what the Government are doing. We have heard in recent press reports that the Budget will contain some details of that. Obviously no Budget secrets can be released but it would be interesting to know whether the Minister believes that the recommendations in the Heseltine report would be effective in bringing forward the proposals that have been made.
Lord Gardiner of Kimble
My Lords, first, I thank my noble friend Lord Inglewood and his committee for the report. It clearly identifies many key issues and challenges that we face in developing our broadband policies. The report is an important contribution to the general broadband debate. I agree with my noble friend Lady Fookes that dark fibre-optics and point-to-points have definitely now taken a new dimension. The report has indeed been stimulating and thought-provoking. What struck me were the many areas on which the Government and the committee agree, as my noble friend Lord Inglewood mentioned. We both seek improvements to the communications infrastructure so that the digital divide does not widen but narrows, and we need to be mindful of the longer term.
Communications infrastructure is recognised as a priority across the Government, with the Secretary of State for Culture, Media and Sport and the Minister for Culture, Communications and Creative Industries regularly meeting with counterparts in the Cabinet Office, the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs, as well as with the Prime Minister, to discuss progress. I want to set the record straight because the noble Lord, Lord Haskel, mentioned that the Secretary of State and her team were not in a position to be at that conference. It was reported that they were required for parliamentary Divisions on that day. It was not a case of their not turning up; they were not in a position to do so because of parliamentary business.
Lord Haskel
I thank the Minister for that but it would have been helpful if the department had sent somebody, possibly the Minister from the House of Lords.
Lord Gardiner of Kimble
I would have been delighted to have obliged. I just wanted to say that to the noble Lord.
We agree with the committee and share the common goal that a world-class communications infrastructure is something that the UK requires and deserves. Indeed, the noble Baroness, Lady Deech, mentioned infrastructure in this connection. The overriding objective of the Government’s broadband ambitions is that the economic and social benefits are available to all, as soon as conceivably possible. My noble friend Lord Selborne mentioned these benefits.
It might be helpful, in setting the context of the Government’s response, to bring your Lordships up to date on progress with the Government’s broadband ambitions—I am particularly mindful of this because it was referred to by the noble Lord, Lord Stevenson—and why we have taken the direction that we have. This is important, as it relates directly to many of the recommendations in the report. There has been significant progress since the committee first considered the matter last year, and indeed since the Government’s response was published in October. Upgrading the communications network is essential, as the report recognises. It is massively important for economic growth, both in our cities and towns and more rural areas. The noble Lord, Lord Haskel, mentioned economic growth. My noble friend Lady Fookes mentioned education, which is clearly an area on which we need to concentrate.
The £1.2 billion investment that the Government and the 41 local authority partners, as well as the devolved Administrations, are putting in place is focused on those areas to which the market will not deliver alone—a point I want to emphasise—given the higher cost of deployment in certain locations. Through this investment, and working in partnership with industry, we will see much faster speeds, millions more homes and businesses able to enjoy these speeds and a market which boasts high competition and low prices, particularly compared to our European neighbours. Already, the Government’s strategy is seeing 100,000 more homes and businesses getting access each week and 50,000 new superfast connections taken up a week.
We have the best internet economy in the world. The noble Baroness, Lady Bakewell, referred to the use of the internet, as did my noble friend Lord Inglewood. This is worth £82 billion a year to the UK economy and contributes 8.3% to the UK economy as a whole, which is the highest proportion for any G8 country. Some 71% of the UK population bought goods and services online in 2011, more than any other country. By 2015, the UK will have achieved a transformation in broadband. By 2015, average speeds will be three times faster than in 2010, at around 15 to 20 megabits per second, and 10 million more homes and businesses will be connected—an increase of 75%.
The UK’s broadband market is in vibrant health, according to Ofcom’s European scorecard. This was published recently and showed that the UK currently benefits from low prices and a high degree of competition in the broadband market, and that the UK has the best deals in the major European economies for consumers who consider taking broadband in a package with subscription television and telephone. However, Ofcom’s survey also recognises that we need to do more regarding superfast broadband access, given that Germany and Spain are ahead of us.
Perhaps I may refer to rural Britain and declare that in another life I was a board member of the Countryside Alliance and deemed to be a champion of rural Britain. Indeed, this is a matter on which many of us who hold rural Britain dear to our hearts feel strongly about. Almost every noble Lord who has spoken has raised this matter—and quite rightly so. The more remote and rural areas must not be left behind when it comes to broadband access. Our aim is for the investment of public funds to bring superfast broadband access to 90% of UK premises, and a minimum of 2 megabits per second to everyone else. Our approach is technology-neutral, and we expect to see a mix of technologies including wireless, as mentioned by my noble friend Lord Inglewood, and satellite solutions. Indeed, satellite broadband is available now to anybody who wants to take it up, although I acknowledge that it is expensive. I am very conscious of what the noble Baroness, Lady Bakewell, said about Cornwall and the Isles of Scilly. It is an encouragement to all.
However, rapid progress is being made on the rural programme. Fifteen projects have now signed contracts and are either in progress already or about to start work. The remaining projects are entering procurements at a rate of one per week, and all should have completed their procurement phase by the end of the summer. I will indeed look at the particular counties that the noble Lord, Lord Stevenson, mentioned. My noble friends Lord Clement-Jones and Lord Selborne mentioned the £300 million of additional funding. I understand that options are being assessed, but I am extremely mindful of what both my noble friends have said.
Investment is already delivering faster connections for consumers. Indeed, in December, north Yorkshire saw its first active fibre cabinet and, at the end of February, there was the unveiling of the first cabinets in Bangor, north Wales. The devolved Administrations in Scotland, Wales and Northern Ireland will all benefit from significant central government investment in their broadband infrastructure, thereby delivering a key part of driving UK growth and investment. Similarly, our £150 million urban broadband programme, by working closely with local authorities and the private sector, will ensure that our cities can compete with the best in the world. Tech City in London shows how establishing a digital hub with world-class connectivity and expertise can be so successful. It is an example for all rural and urban Britain.
It is vital that the Government provide the right environment for investment. Our aim is to remove the barriers preventing investment and innovation, and demonstrate that Britain is one of the best places in the world to do business online. We will therefore remove barriers and red tape. We cannot allow rollout to be delayed by planning refusals, by confusion when carrying out street works or by long-running legal issues over access to private land. Our goal is to provide certainty to ensure that the money invested in rollout is used to take superfast broadband further.
Delivering consumer benefit from a competitive market was a founding principle of the Government’s intervention. To this end, they share the committee’s aim to see more reliable broadband services for a greater number of people and at affordable prices. The framework process was competitive, with 13 organisations expressing interest and nine entering submissions. It was important to identify organisations that could demonstrate the capacity and capability to deliver sustainable commercial services for the wholesale supplier market and the retail consumer services market. The framework agreement requires suppliers to meet all these conditions. In addition, Broadband Delivery UK has included price controls, clawback mechanisms and an independent audit process to ensure that the value from the investment being made by the public sector is maximised.
The regulatory framework governing the telecoms sector must be fit for purpose and competitive. While this of course sits with Ofcom, we are committed to ensuring that the market fosters competition, supports multiple innovative providers, and results in greater consumer choice. I know that my noble friend Lord Inglewood and the noble Lord, Lord Stevenson, referred particularly to competition. We are already seeing a healthy market emerging. Virgin Media has two-thirds of superfast broadband connections, while Sky and TalkTalk already provide services over BT’s network. I am mindful of what the noble Lord, Lord St John of Bletso, said about ducts, but BT is required to offer access to its network on equivalent terms, and is required to offer access to its duct and pole network. Any networks built using government funds will be required to offer wholesale access. We are therefore starting to see genuine retail competition emerging at this early stage. Ofcom continues to monitor this market and has already begun the process for the next wholesale local access market review, which will determine whether stronger action is needed to ensure greater competition. Ofcom will publish a consultation later this year on this matter.
My noble friend Lord Selborne mentioned the G4 spectrum auction, which has been successful, and the winners were announced recently. This was vital. The Government directed Ofcom to proceed with the auction and brokered agreement with the mobile operators to allow this not only to happen but to happen six months earlier than had previously been thought.
We are planning for the future by overseeing the release of significant bands of public sector spectrum to the market. This is spectrum that is currently used by the Ministry of Defence, the Department for Transport and the emergency services, among others, which may be better used for mobile broadband.
My noble friend Lord Inglewood referred to the “internet of everything”. Indeed, the pace of change in the world of mobile is very fast. We are determined to ensure that Britain is ready for the challenges ahead. My noble friend Lady Fookes mentioned new build. This is clearly extremely important. The Government have already issued guidelines on ducting for developers, and I will give careful consideration to what she said on this matter.
We cannot create a world-class connected Britain just by laying more fibre in the ground or building new base stations. It is crucial that we get as many people as possible online with sufficient knowledge and confidence, enjoying the benefits presented by better connectivity. We must also encourage British companies to expand and develop their internet-based operations. Many noble Lords—the noble Lord, Lord Haskel, the noble Baroness, Lady Deech, and the noble Lord, Lord St. John of Bletso—particularly referred to this. Ultimately, it is users who will turn infrastructure investment into growth. Many of the recommendations in the report recognise this. The noble Lord, Lord Stevenson, mentioned SMEs. SMEs utilising the internet have reported more than double the export revenue of those who do not use the internet. That in itself is a very strong story.
The noble Baroness, Lady Deech, mentioned Martha Lane Fox. Her tireless work and that of Go ON UK have been vital in getting more people online and demonstrating how people’s lives can be changed for the better by embracing the digital world. We are exploring ways to encourage high-speed take-up as part of our urban programme. Demand stimulation also remains a key focus of our local rural broadband projects, with a particular emphasis on SMEs.
We have made significant progress since the publication of the report, but there is still very much more to do. There was much in the report with which we agree, such as the reform of the planning system, to which my noble friend Lord Clement-Jones referred, which directly reflected your Lordships’ recommendations. The report provides a rich resource for government as our policy continues to evolve.
I accept that there were also areas where the committee advanced a different approach, perhaps most notably in the report’s recommendation that the long-term objective should be directed towards a specific technology—universal point-to-point fibre to the premises. The report also recognised that this was a costly solution and this was acknowledged by a number of noble Lords. Certainly, at this time it is beyond available resources.
With that in mind, the Government firmly believe that our policies and financial interventions have put us on the right track to see a step-change in broadband access right across the country in an affordable manner, without prejudging the technological solutions needed to make that happen. This will lead to greater growth for the whole economy and improve the lives and well-being of millions. The nature of the enterprise is that engineers, policymakers and the public will continue to debate the best way to get there. I am sure that many of your Lordships will also continue to do so. The UK needs and deserves the very best superfast broadband network that the private sector and the Government, working in partnership, can deliver. It is an objective to which we all aspire, and the committee’s report has undoubtedly enhanced the debate.
Lord Inglewood
My Lords, I am grateful to all the speakers in this debate who, without exception, have supported the thrust of our report and its recognition of the social and commercial significance of broadband for this country. They were not applying the same arguments; that in its own way is equally significant, because we do not advocate any single solution to the problems of the last 10%. It is horses for courses, and there are different arguments for different aspects to the general approach we are advocating. I was interested that the Minister criticised the report for advocating a single technology. I do not think that is quite fair: we are advocating a single outcome from the application of whatever technology may be the most appropriate to bring it about.
We have been talking about something that is important and revolutionary. That is why I was very pleased that a number of speakers referred to both the historical and the global contexts of what we are discussing this evening. I was particularly impressed by the noble Baroness, Lady Deech, talking about Marie Antoinette and what she might have said in France. Then she moved on to talk about the Chinese emperor. I am sure it was an oversight that she did not tell us what he would have said in his own language.
The Government are doing things, and that is good. I congratulated them on this in my opening remarks, but we must ensure that what is being done is progress and that we are not seduced or misled by averages disguising areas of deprivation in a much more satisfactory landscape. We have had a good debate this evening; I have no doubt that this subject will, in the years to come, be debated again—and so it should be. I beg to move.