House of Commons

Wednesday 11th December 2013 Commons Chamber

Wednesday 11 December 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 11th December 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 11th December 2013 Commons Chamber

The Minister for the Cabinet Office was asked—

[Dr Matthew Offord (Hendon) (Con)]

1. What steps he is taking to control the amount of trade union facility time in the civil service.

[Karl MᶜCartney (Lincoln) (Con)]

4. What steps he is taking to control the amount of trade unions facility time in the civil service.

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

10. What steps he is taking to control the amount of trade union facility time in the civil service.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

At the time of the last general election, there was no proper monitoring of trade union facility time in government. That has now changed, and paid time off for any trade union activities and full-time union officials now requires the specific consent of a senior Minister. We expect the cost to the taxpayer for paid time off for trade union duties to fall by 60% from the level we inherited.

[Dr Offord]

I am very reassured by the Minister’s response, but will he outline to the House how much money has been saved as a result of those reforms?

[Mr Maude]

So far, by reducing significantly the number of full-time union officials who are paid by the taxpayer as civil servants, we have saved more than £2.3 million just from that element of the reforms. Overall, we are on course to meet our benchmark of spending no more than 0.1% of the civil service pay bill on facility time.

[Karl MᶜCartney]

Further to the kind answers that my right hon. Friend has given, will he tell the House how many civil servants were given paid time off to attend the Public and Commercial Services Union conference this year and last year?

[Mr Maude]

In May this year, 651 PCS reps had paid time off to attend the PCS conference—fewer than half the number of the previous year. Next year, paid time off to attend the conference will be entirely at the discretion of the Secretary of State or the Minister in charge of that civil servant’s Department.

[Alun Cairns]

This issue is a significant cost to the public purse. Will the Minister please advise the House how many taxpayer-funded trade union representatives there were in May 2010, and how many there are now?

[Mr Maude]

It has taken some time to establish the facts about that because there was no proper monitoring. We believe, however, that in May 2010 in the region of 250 civil servants were full-time officers of their trade union and doing no work on behalf of the taxpayer. Several of them had been promoted in post while doing no work as a civil servant—and one of them had been promoted twice, which seems remarkable.

[Ian Lavery (Wansbeck) (Lab)]

It is clear that the Minister has planted these questions in order to union-bash again, which seems to be something he relishes. Is he man enough at this point to say how beneficial trade unions are in the workplace in terms of the economy, the taxpayer and the employer?

[Mr Maude]

I have always been at pains to say that there is benefit to the employer in having union representatives in the workplace. What is not acceptable, however, is having those representatives uncontrolled, unmonitored and growing like Topsy, to the extent that they were costing the taxpayer £36 million a year at a time of financial stringency caused by the grotesque budget deficit we inherited from the Labour party. That is completely unacceptable.

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

The Minister knows that I have a lot of time for him, and I congratulate him on winning a famous design award for his Department recently. However, I am a proud trade unionist and member of Unite, and I am a proud Co-operator. In a democratic society in which unions have an important part to play—as does the co-operative movement—why is there a feeling coming from the Government Benches that they are out to get us?

[Mr Maude]

I am certainly not out to get the hon. Gentleman, for whom I have—if I may return the compliment—a great deal of respect. I have never said that there is no role for trade unions or for trade union representatives having paid time off in the workplace. I have always stressed that there is value for the employer in the ability to have disputes resolved quickly, effectively and at local level. What was going on in the civil service, however, was way out of line with any other workplace, even in the public sector. The taxpayer is entitled to expect that the Government will grip that issue, which, for the first time, is being done.

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

2. What assessment he has made of the effect on small towns of outsourcing under the shared services programme.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Our assessment showed that any employment impacts arising from outsourcing are likely to be substantially mitigated through redeployment. I expect that additional new employment opportunities will be generated through what I hope will be a thriving UK-based service provider that will result from the joint venture we have created.

[Sir Alan Beith]

Does my right hon. Friend recognise that offices in rural locations, such as the Alnwick DEFRA office, can be excellent locations for shared back-office services because they have good staff and low staff turnover? Will he therefore do all he can to encourage the public-private partnership company to make sure that the Alnwick location is used, either for its existing work or for alternative work in the field?

[Mr Maude]

I absolutely take the point that my right hon. Friend makes. It is very well made. I know that the new joint venture company will look very carefully at all the implications. It will want to be able to do the work effectively and to create a new provider in the marketplace that has the opportunity to create more jobs rather than lose jobs. I know that he will talk to the new company and that it will want to hear his views.

[Nick Smith (Blaenau Gwent) (Lab)]

3. What recent progress he has made on the Government ICT Strategy.

[The Minister of State, Cabinet Office (Mr Nick Hurd)]

We have created a world-class Government web presence. We believe that we saved £500 million in 2012-13 through better IT spend controls, and our digital by default strategy is transforming 25 of the most significant Government transactions by making them easier for users and cheaper for taxpayers.

[Nick Smith]

Meanwhile, in the real world, the new Army recruitment contract with Capita is a shambles. Why did the Government not plan the ICT better so that the new recruitment processes and Ministry of Defence systems worked better?

[Mr Hurd]

I have to tell the hon. Gentleman that the real world we inherited was an absolute shambles in terms of how Government managed IT transactions. His is the party that gave us tax credits and the NHS IT system. What we have done is to put in proper controls and create the conditions in which smaller and leaner organisations can come in and offer better value.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I commend my hon. Friend the Minister and the Minister for the Cabinet Office and Paymaster General for the excellent work they have done in ICT? But is it not still ludicrously impossible to get around the silly Treasury rules about recruiting, retaining and rewarding the necessary staff with the necessary expertise to be the single responsible owners with continuous oversight of projects? Does that not show that civil service reform has not gone nearly far enough, and that that justifies a commission on the future of the civil service that only Parliament can provide?

[Mr Hurd]

I recognise my hon. Friend’s consistent commitment to the idea of improving the capability of the civil service. However, I do not think I agree with his premise, and I invite him to visit the Government’s digital service because he will see a department that feels unlike any other in Government. It is full of extraordinary talent that has come in to work for Government, often at below market rates, because they want to make that difference.

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

The arrogant complacency of the Minister’s answers shows just how out of touch he is. Some 80% of Government interactions take place with the bottom 25% of society, but only 15% of people living in deprived areas use a Government service online. The promised assisted digital provision is still nowhere to be seen, locking our citizens out of his digital democracy. That is why Labour has announced a review of digital government, to make it work for the many, not the few. Is it not time that he did the same?

[Mr Hurd]

Again, we absolutely will not take any lessons from the Labour party about digital government. We are committed to the idea of transforming the great digital service. The feedback has been tremendous so far, and we have a hard commitment that every transformation will be accompanied by an assisted digital programme.

[Mr Philip Hollobone (Kettering) (Con)]

Kettering borough council, of which I have the privilege of being a member, is having great difficulty in complying with the Cabinet Office protocols on e-mail traffic with local government. May I arrange a meeting with the Minister and a representative from the authority so that we can get this sorted out?

[Mr Hurd]

I have heard that from other sources, not least in my own local authority, so I am happy to take that matter up with my hon. Friend directly.

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

5. What steps he is taking to increase the number of people involved with charity.

[The Minister of State, Cabinet Office (Mr Nick Hurd)]

Our recent report encouraging social action set out what we have done to make it easier for people to give time and money, and I hope that the hon. Gentleman will join me in welcoming the news that volunteering has risen sharply since 2012 after years of decline.

[Mr Cunningham]

I hope the Minister will elaborate further. Only 9% of people are responsible for giving two-thirds of donations to charity. Will he elaborate on his previous answer?

[Mr Hurd]

The hon. Gentleman makes an important point and he is right to say that we rely on an extremely generous minority who do most of the giving. Britain has risen in the league table and is now the sixth most generous country in the world. Millions of our fellow citizens and constituents give time on a regular basis, and volunteering has risen since 2012 after years of decline. We think we have made a contribution to that.

[Mr Gary Streeter (South West Devon) (Con)]

May I add my support for the many people who volunteer to support charities? Does my hon. Friend agree that the investigation by the Public Accounts Committee into the pay of senior executives of charities is a good step in the right direction to ensure that volunteers are following people who are being reasonably paid?

[Mr Hurd]

I certainly agree that our voluntary sector relies on trust and integrity, and there should be transparency on administration costs and salary expenses. Individual salary pay is not an issue for Government; it is an issue between trustees and donors.

[Mr Gregory Campbell (East Londonderry) (DUP)]

In any discussions the Minister may have with some of the main charities, will he debate with them the need for them to promote their work in a proactive way, while safeguarding against what some regard as assertive and over-aggressive actions by charity collectors who try to obtain direct debits on the street? There is concern about the level of assertiveness on the street.

[Mr Hurd]

We certainly do have those conversations with the chief executives of some of the largest charities. The activity the hon. Gentleman describes raises at least £100 million a year, so we cannot ignore that. We must, however, ensure that it is regulated effectively so it does not put people off and tarnish the brands of the charities we need to support.

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

Will my hon. Friend join me in thanking the many people in my constituency who work for charities and who volunteer? Will he update the House on what is happening in schools to encourage the next generation of young people to work for charities and volunteer more?

[Mr Hurd]

My hon. Friend is a great champion of the voluntary sector in her constituency. I am delighted to place on record my appreciation of volunteers across the country. As she points out, it is vital that we inspire the next generation. That is why national programmes, such as the National Citizen Service and the cross-sector and cross-party campaign—Step up to Service—we support to double the number of young people involved in regular volunteering are so important. I hope she welcomes them.

[Gavin Shuker (Luton South) (Lab/Co-op)]

6. What recent discussions he has had with charities and voluntary organisations on levels of demand for their services.

[Andy McDonald (Middlesbrough) (Lab)]

9. What recent discussions he has had with charities and voluntary organisations on levels of demand for their services.

[The Minister of State, Cabinet Office (Mr Nick Hurd)]

I have regular discussions with charities and voluntary organisations. The anecdotal evidence is that many are experiencing higher demand for their services. It is a challenging environment and we all know that. However, I am encouraged that charity income appears to be steady, volunteering is up, giving has remained stable and social investment has risen. It is challenging, yes, but there is good news out there.

[Gavin Shuker]

The Government expect charities and voluntary organisations to step in in many places where the state has pulled out. However, the Minister recently said:

“frankly I don’t think the government does understand civil society.”

Why did he say that?

[Mr Hurd]

Because for years, not least under 13 years of Labour, government and civil society did not mix or take the time to understand each other. Our commitment to open public service is not about replacing things but trying to create the space for charities and social enterprises to help us deliver better public services. There are different cultures and we have to take the time to understand each other better and make the process work better.

[Andy McDonald]

A recent survey by The Guardian’s voluntary sector network revealed that 47% of respondents had no confidence in the Government’s approach to the third sector. Rather than just yet another failed relaunch of the big society initiative, would it not be better if Ministers started to actually listen to charities, large and small, to find out what support they need?

[Mr Hurd]

I have spent a lot of my time listening to charities and voluntary sector organisations over the past five or six years, and I would point out to the hon. Gentleman and the Labour party, which continues to talk down the sector, that the sector’s greatest asset, the British public, continue to support it more and more. Charitable giving has been steady through difficult times and levels of volunteering and social investment have been rising. The Government have done a great deal to make it easier for charities through difficult times.

[Robert Halfon (Harlow) (Con)]

My hon. Friend will be aware that Essex county council is currently consulting on the future of youth services and that some difficult decisions lie ahead. He is meeting the Essex county councillor concerned. Will he give every support possible to youth services in Harlow and do everything he can to support Essex council so that we can protect our youth services?

[Mr Hurd]

My hon. Friend has written to me about this matter, and I congratulate him on his work. I am committed to meeting the decision makers at Essex county council, as I met with decision makers in Cornwall yesterday. There is a very real issue about the future of youth services and why they have been so easy to cut, and I remain passionately committed to young people having access to high-quality youth work.

[Richard Fuller (Bedford) (Con)]

Church leaders in Bedford have been instrumental in setting up and operating the food bank there. With demand for food bank services increasing across the country, will my hon. Friend join me in meeting representatives from local churches in Bedford to understand the complex reasons why demand for food bank services is increasing?

[Mr Hurd]

I thank my hon. Friend for that question, because the Labour party tries to make far too many political points about food banks. The underlying issues are complex and their number is growing, and the Government are supporting them with investment through our social action fund. Food banks are a magnificent human response to difficult times, and we should place on the record our recognition of the work being done to support them across the country in responding to need.

[Mr David Hanson (Delyn) (Lab)]

7. What recent progress his Department has made on improving efficiency across Government.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The efficiency and reform group supported Departments across Government to deliver savings of £5.4 billion in the first half of 2013-14, which was an increase of 73% on savings over the same period in the previous year. I am extremely proud of the hard work that civil servants across Whitehall have undertaken to achieve this success for the taxpayer.

[Mr Hanson]

Will the Minister tell me why the costs of the efficiency and reform group, which now employs 440 members of staff, have ballooned to £60 million? More importantly, will he tell the House today what he would not tell my hon. Friends on the Front Bench—how many people work there now and what is the cost?

[Mr Maude]

A lot of this work simply was not being done under the previous Government, but the predecessor organisations employed more than twice as many members of staff as the efficiency and reform group now employs, and the simple fact is that in the last financial year it was responsible, with its colleagues across Government, for delivering savings of more than £10 billion by eradicating waste left by the Government of which the right hon. Gentleman was a member.

[Jonathan Ashworth (Leicester South) (Lab)]

We know that universal credit will not be delivered on time, that £40 million has been wasted, that £90 million will be written down and that the IT system Agile was deeply inappropriate. The Opposition have learnt that Agile was used on the insistence of the Cabinet Office, so will the Paymaster General, who boasts of his efficiency drives, give us a full explanation of his Department’s role in this debacle and publish all guidance the Cabinet Office sent to the Department for Work and Pensions?

[Mr Maude]

Oh dear. Is that the best the hon. Gentleman can do? I suggest he read the report by the Public Accounts Committee on what went wrong with universal credit. The problems only came to the attention of the DWP because of a review commissioned by my right hon. Friend the Secretary of State for Work and Pensions.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

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

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities are for the public sector efficiency and reform group, civil service issues, industrial relations strategy in the public sector, government transparency, civil society, cyber-security and civil contingencies. In that context, I would like to thank all those in the emergency services who did a brilliant job working to prepare effectively for and respond to the effects of last week and weekend’s storm surge. I am sure the whole House will want to send its best wishes to those adversely affected and our thanks to those who worked massively to prepare for it.

[Stephen Metcalfe]

May I take this opportunity to congratulate my right hon. Friend on the open government partnership conference held in London last month and ask what plans there are for the open government partnership for the coming year?

[Mr Maude]

We passed on our chairmanship of the open government partnership at the conference. I thank my hon. Friend for his remarks; it was very successful, with contributors and participants from civil society and from Governments right across the world. It was attended by a number of UK Ministers, including my right hon. Friends the Foreign Secretary and the Prime Minister. We hope that this will develop, with more Governments taking part and with a deepening of the relationship with civil society organisations in some countries where their life is not nearly as protected as the life of civil society organisations here. [Interruption.]

[Mr Speaker]

Order. The Minister is providing serious answers to serious questions, but I am not sure that he is getting the serious attention that he and I would think those answers warrant. Perhaps we could have a bit of order.

[Michael Dugher (Barnsley East) (Lab)]

It was revealed in a leaked letter yesterday that the Minister for the Cabinet Office tried to use emergency powers to block a freedom of information request for the Government to publish the HS2 project assessment review from 2011, which he did because of “political and presentational difficulties”. Those who support HS2 in principle know that public confidence is vital. Concerns have already been expressed about accelerating costs because of the Government’s failure to get a grip on the project. Questions have been raised by the National Audit Office about the economic benefits. Will the Minister now publish that project assessment review?

[Mr Maude]

Under the last Government, when the hon. Gentleman resided in Downing street, information about the progress on major projects had to be extracted by force. Earlier this year, we published the ratings for all major projects. We did that voluntarily—the first time it has ever been done—and we will continue to do so. We are now the world’s leading Government on transparency, so lectures from the hon. Gentleman come pretty thin.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Given the continued funding pressures on youth services, will the Minister update us on how his Department is using the Positive for Youth policy to maximise resources for a better joined-up youth offer between local authorities, voluntary services and businesses to provoke young people’s engagement and a youth voice?

[The Minister of State, Cabinet Office (Mr Nick Hurd)]

First, let me recognise my hon. Friend’s long-standing advocacy for young people and his authorship of the initial Positive for Youth programme. Yes, we are very concerned about cuts to youth services at the local level. The Cabinet Office is mapping exactly what is going on at the moment and stands ready to work with local authorities to help them comply with their statutory duty and work more creatively with other local partners in delivering fantastic opportunities for young people to develop themselves through access to high-quality youth work.

[Mr Speaker]

It is time for the lion’s roar. I call John Robertson.

[John Robertson (Glasgow North West) (Lab)]

T2. Thank you, Mr Speaker. Following the question on outsourcing from the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), we have now passed £100 billion-worth of contracts to large companies that have absolutely no transparency. Is it not time to revisit the Freedom of Information Act 2000 to make sure that these companies do have the necessary transparency and are brought into the scope of the Act?

[Mr Maude]

The hon. Gentleman will know that my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), who chairs the Justice Committee, presided over an inquiry into the working of the Freedom of Information Act 2000 and did not recommend that any such change should happen. The hon. Gentleman refers to large companies taking part in outsourcing, but one of the things we have done is to reduce the Government’s dependency on large companies by opening up procurement to small and medium-sized enterprises across the country, which was not even measured under his Government. We have made big steps—though not yet enough—to open it up to many smaller UK businesses.

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

Last week’s tidal surge devastated hundreds of homes in my constituency when our flood defences were breached by the Humber, the Ouse and the Trent. During that emergency, the real heroes in communities such as Burringham and South Ferriby were—apart from the emergency services—our parish councils, which had in place emergency plans that ran 24/7. Will my hon. Friend pay tribute to those parish councillors and urge other such councillors to ensure that they have proper community emergency plans in place?

[Mr Maude]

My hon. Friend is completely right: there was an amazing community response to the emergency caused by the storm surge. He is quite right that parish councils, particularly in rural areas, play an incredibly important role in a completely voluntary way. I would also like to pay tribute to my hon. Friend, who I understand was out there in the small hours of the morning, working alongside his constituents to support them.

[Ms Margaret Ritchie (South Down) (SDLP)]

T3. Can the Minister tell us what proportion of the files subject to the 30-year rule the Department has released to the National Archives, and how many of them relate to Northern Ireland?

[Mr Maude]

Not off the top of my head, but I will write to the hon. Lady and let her know.

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

May I invite my right hon. Friend to visit Matrix SCM at Milton Keynes and see how it is helping local authorities to save an average of 17% on public procurement contracts, increase the number of small and medium-sized enterprises winning those contracts, and speed up the payments process?

[Mr Maude]

I shall be happy to do that. I know how much support my hon. Friend must have given the company in his constituency. We have opened up procurement, which was being run in a way that, in many cases, froze out SMEs and prevented them from doing work for councils and the Government, but, although we have made some progress, we still have much more to do.

The Prime Minister was asked—

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

Q1. If he will list his official engagements for Wednesday 11 December.

[The Prime Minister (Mr David Cameron)]

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

[Stella Creasy]

I am sure that the Prime Minister is as concerned as Labour Members are about the 42% increase in long-term unemployment among young women that has taken place on his watch. Will he confirm that the reason he does not support the No More Page 3 campaign is that, like his hon. Friend the Member for South Dorset (Richard Drax), he believes that at least page 3 provides jobs for the girls?

[The Prime Minister]

We have seen quite a rapid reduction in unemployment over recent months under this Government, and there are a million more people in work than when I became Prime Minister. Of course, there is a lot more to be done to get the long-term unemployed, in particular, back into work, but the Work programme is performing twice as successfully as some of its predecessors. I think that the hon. Lady should get behind such programmes, rather than making points such as the one she has just made.

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

Last Tuesday Joshua Folkes, aged 17, died in my constituency following a knife attack. Serious youth violence has fallen by some 19% in Enfield, and the Government have toughened knife laws, but what more can be done to rid the streets of Enfield, and those elsewhere in the country, of the carnage caused by knife attacks?

[The Prime Minister]

My hon. Friend makes a very good point in speaking on behalf of his constituent. As he has said, we have toughened the law, and I think that that has made a difference, but I think that the most important thing for us to do now is get rid of this dreadful culture of people carrying knives and educate young people about the dangers of carrying them. Those who carry knives often end up being stabbed themselves, and sometimes tragically die. It is to that work that we should now give priority.

[Edward Miliband (Doncaster North) (Lab)]

Does the Prime Minister agree that, given the crisis in living standards that ordinary families are facing, Members of Parliament should not be awarded a pay rise many times above inflation in 2015?

[The Prime Minister]

I do agree with the right hon. Gentleman about this issue. I think that it would be wrong for MPs to be given a big pay rise at a time of public sector pay restraint. All three party leaders agree on that, and we have all made the point to the Independent Parliamentary Standards Authority. However, we should be clear about the fact that what IPSA has said is not a final recommendation.

Let me briefly make three points. First, I think that the idea of an 11% pay rise in one year at a time of pay restraint is simply unacceptable. Secondly, I think that IPSA needs to think again, and that unless it does so no one will want to rule anything out. No one wants to go back to the system of MPs voting on their own pay, but we must have a process and an outcome that can build public confidence. Thirdly, I think that all this should be accompanied by a cut in the cost of politics.

[Edward Miliband]

I am glad that the Prime Minister agrees with me about this issue. Does he also agree that we should not let it hang around as an issue until after the general election, and hang over trust in politics? May I urge him to work with me, on a cross-party basis, to find a way of making IPSA think again, and to stop this package happening?

[The Prime Minister]

My door is always open to the right hon. Gentleman, and I am always happy to discuss this or, indeed, any other issue. Let me stress, however, that what IPSA has said is not a final recommendation. I think that if the three party leaders and others in the House unite in saying that it is not right to award this pay rise, that will be the strongest message we can give.

[Edward Miliband]

I agree with the Prime Minister, but I hope he agrees with me that waiting and seeing will not work and that we do have to get together to deal with this. The reason this is not the right time for this pay rise is that most people are going through the biggest cost of living crisis in a generation, and I want to turn to that cost of living crisis. Last Thursday, the Chancellor claimed living standards were rising. That just is not the case, is it?

[The Prime Minister]

Let me add one point on the issue of MPs’ pay. This Government have shown respect for the difficulties people face: when we came into office we cut Ministers’ pay by 5% and froze it for the whole of the Parliament. That is not something Labour did.

The right hon. Gentleman wants to get on to the economy and, frankly, after last week’s exchange I cannot wait to get on to the exchange on the economy. We discovered a new duo: red Ed and redder Ed. I am looking forward to discussing these things. I thought the Institute for Fiscal Studies put this very clearly. It said: we have had a great big recession. We have had the biggest recession we have had in 100 years. It would be astonishing if household incomes had not fallen and earnings had not fallen, but the fact is that is the legacy of what Labour left us. The right hon. Gentleman’s entire approach seems to be: “We made the most almighty mess, why are you taking so long to clear it up?” Well, we are clearing it up.

[Edward Miliband]

In case the right hon. Gentleman has forgotten, he has been the Prime Minister for three and a half years. But I think we are making progress, because last Thursday the Chancellor said that living standards were rising. [Interruption.] His own Office for Budget Responsibility says:

“Almost whichever way you look at it…average earnings, wages and salaries…the levels have been falling”. [Interruption.]

[Mr Speaker]

Order. Mr Blenkinsop, you are yelling across the Chamber. Be quiet. Calm yourself. Take up yoga.

[Edward Miliband]

The OBR went on to say that it is “inconceivable” to suggest otherwise, but that is exactly what the Chancellor did last Thursday. Why will the Prime Minister not just come out and admit it: there is a cost of living crisis in this country?

[The Prime Minister]

Well, it comes to something when the right hon. Gentleman is being heckled from his own side. I do not know how you are going to keep us all in order, Mr Speaker.

I will tell the right hon. Gentleman what has been happening over these three years: we have got the deficit down by a third, we have got 1 million more people in work, we have got 400,000 more businesses operating in Britain, and we have got one of the fastest rates of growth now of any major western economy. But the truth about living standards and the cost of living is this: if we do not have a long-term economic plan to get our economy moving, we do not have a plan to deal with living standards. We have a plan. Our plan is to keep interest rates low, to get the country back to work, to cut people’s taxes, to boost business. Our plan is working. The right hon. Gentleman does not have a plan, as we discovered last week, apart from more borrowing, more spending, more taxes—all the things that got us into the mess in the first place.

[Edward Miliband]

Utterly complacent and out of touch with the country—that is this Prime Minister absolutely all over. Let us be fair to him: he does understand that some people are really struggling because today we learn of his plan to cut the top rate of tax further, from 45p to 40p. Can he explain why he is even contemplating a further tax cut for millionaires, who have received hundreds of thousands of pounds-worth of tax cuts, when ordinary families are so squeezed?

[The Prime Minister]

The top rate under this Government is higher than at any time when the right hon. Gentleman was in the Cabinet, the Government or was working in the Treasury trying to wreck the economy in the first place. If he wants to talk about the cost of living, let us compare our records. The Labour Government doubled council tax; we have frozen it. They put up petrol tax 12 times; we have frozen it. They put up the basic rate of pension by a measly 75p; we have increased it by £15 a week. I am happy to compare our records any time of day, but the British public know this: if we want to sort out the cost of living, if we want to help families, we need more jobs, we need more growth, we need a long-term economic plan. We have got one; he has not.

[Edward Miliband]

I will tell the right hon. Gentleman what happened—[Interruption.]

[Mr Speaker]

Order. Members must calm down. I have said that before, but some people are slow learners. We will go on for as long as it takes. They can shout and scream and bawl in the most juvenile manner, but we will just keep going.

[Edward Miliband]

I will tell the right hon. Gentleman what happened. Under the last Labour Government, real earnings went up £3,600. Living standards went up: under him, they are down £1,600. Living standards are down under this Government. We have always known how out of touch he is, but he is now taking it to a whole new level. The Government are in denial about the cost of living crisis, and they are not satisfied with one millionaires’ tax cut—they think it is time for another. Once again, the Prime Minister proves that he stands up for the wrong people.

[The Prime Minister]

Oh, dearie me! At the end of six questions, we are back to denial and the record of the last Labour Government. I know that I have had a long flight, but I could not have written the script better if I had done it myself. The last Labour Government gave us the biggest budget deficit virtually anywhere in the world, and the biggest banking bust anywhere in the world. They created a giant mess that this Government are clearing up. That is the truth. Since the autumn statement, why cannot the right hon. Gentleman mention the fact that business optimism is up, manufacturing is up and the number of job vacancies is up? Pretty soon, we will be able to add two to that list.

[James Morris (Halesowen and Rowley Regis) (Con)]

Q2. Unemployment in my constituency is 21% lower than it was at the time of the last election. We have had a 90% increase in apprenticeship start-ups, manufacturing output is up and business activity is at a 32-month high in the west midlands. Does the Prime Minister agree that, due to the hard work of my constituents and people across the country, the Government’s long-term economic plan is working and delivering benefits to every region of the United Kingdom?

[The Prime Minister]

My hon. Friend is right. During the boom years, the number of people employed in the private sector in the west midlands actually went down, but we are now seeing better news. Employment is up 25,000 since the election, with private sector employment up 14,000 this year. The youth claimant count is falling in the west midlands. I know how much time my hon. Friend puts into things such as the apprenticeship fair that he held earlier this year. This shows that our long-term plan is the right plan, and that it is beginning to work.

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

Q3. What does the Prime Minister have to say to women across the country who are working full time and whose disposable incomes have fallen by an average of almost £2,500 since his Government came into office?

[The Prime Minister]

The first thing to say is that we welcome the fact that there are more women in work than at any time in our history. The second thing to say is that, because we are lifting the first £10,000 that people earn out of income tax, they will be better off by £705 next year. That is progress, but if the hon. Gentleman is asking whether it takes time to recover from the mess left by his party, the answer is yes it does, but we are going to do it.

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

Dementia is the disease most feared by the over-50s in this country. The Government are rightly doubling investment in dementia research during this Parliament, and the Prime Minister is hosting the G8 summit on dementia this week. Will he now lift the country’s and the Government’s sights by committing to doubling again this country’s investment in dementia research?

[The Prime Minister]

I am grateful to my right hon. Friend for that question. He is absolutely right to say that this is a real challenge facing not only this country, where there are 670,000 people suffering from dementia, but the whole world. We are having the G8 conference today in London to share intelligence, expertise and scientific research and learn lessons from each other. And yes, I can confirm that this Government are already planning to double research into dementia up to 2015, and we plan to double it again thereafter.

[Dan Jarvis (Barnsley Central) (Lab)]

Q4. Given that the implementation of universal credit has become a shambles, how can the public have confidence in those who are responsible for it?

[The Prime Minister]

I think it is absolutely right that we introduce this benefits system in a very slow and deliberate way. I remember sitting in my surgery as a constituency MP when the tax credit system came in, in one big bang, and having case after case where people’s household finances were completely wrecked by the last Labour Government. I will not let that happen again. As we introduce this vital benefit, let us remember the fact that 480,000 fewer people are on out-of-work benefits and it is this Government who are making work pay.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Does my right hon. Friend agree that the best way to raise the living standards of my constituents is for the Government to stick to their long-term plan to rebuild this economy and not abandon it in favour of more borrowing and more taxes, as proposed by the Labour party?

[The Prime Minister]

My hon. Friend is entirely right. The biggest hit to living standards would be if we let spending and borrowing get out of control and interest rates went up. That is what we want to avoid, which is why we got the deficit down, and we must continue with our difficult spending decisions. That has enabled us to cut the taxes of people working and living in Basildon. By next year, with the first £10,000 of income coming out of tax, people on the minimum wage who are working a full-time week will see their income tax bill come down by two thirds. That is real action on the side of people who work hard.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Q5. Is the Prime Minister aware that FTSE 100 directors now get £86,000 a week on average, while at the other end of the scale 5 million workers get less than the living wage and three quarters of a million people who cannot get a job and get sanctioned get nothing at all and are left to starve? Is there no end to the brutality and nastiness of Tory Britain?

[The Prime Minister]

I say to the right hon. Gentleman, who served in Labour Government after Labour Government with a 40p tax rate—it is now 45p—and a bonus bonanza in the City 85 times higher than it is now, that he has a lot of brass neck.

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

New figures show that the second largest pub company in this country, Punch Taverns, overcharged the British consumer in its pubs, on beer alone, by £4.3 billion over 10 years. Clear market manipulation is taking place, so will the Prime Minister commit to deal with this crony capitalism? Will he listen to the Federation of Small Businesses and back the Business, Innovation and Skills Committee’s solution to this problem?

[The Prime Minister]

I know of my hon. Friend’s long-standing interest in not only beer, but pubs and how pub landlords are treated, particularly by the pub companies. Let me look very carefully at what he said. I am a great believer in a healthy pub industry. Pubs are often the heart of the village and the heart of our communities, and I will look carefully at the beer report that he mentions.

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

Q6. During his autumn statement, the Chancellor said that “people should expect to spend…a third of their adult lives in retirement.”—[Official Report, 5 December 2013; Vol. 571, c. 1106.]Given that life expectancy in some communities in my country is only 75, what does the Prime Minister think would be a fair retirement age in a Welsh context?

[The Prime Minister]

The point my right hon. Friend the Chancellor was making is that this should be assessed independently but it is right to set a guide—an expectation—rather than just having Ministers announce from time to time what retirement ages should be. If the point the hon. Gentleman is making is that we need to tackle health inequalities better in our country and that we need ring-fenced budgets for public health, as this Government have brought in, then I would agree with him.

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

Q7. Bomber Command veteran Stan Franks recently passed away at the age of 88. As a teenager, he flew some 31 missions, a staggering achievement for such a young man. Will my right hon. Friend congratulate the Thurrock RAF Association and the Thurrock Enquirer on their efforts in raising the funds to ensure that his passing is marked appropriately?

[The Prime Minister]

I would certainly praise all those in Thurrock who have raised money in this way. The story of Stan Franks is a truly remarkable one. He is believed to be the youngest airman to complete more than 30 missions—he did this in 1944-45, before he was 20 years old. It is a real reminder to our generation of just how much previous generations put in to make sure that we could live in freedom. One of the greatest privileges I have had in this job has been welcoming veterans of Bomber Command to No. 10 Downing street and making that announcement about ensuring that they have that clasp on their medal, which I know many value so much. As Winston Churchill rightly said in 1940:

“The fighters are our salvation but the bombers alone provide the means of victory.”

We should never forget those brave crews in Bomber Command. So many now are coming to the end of their lives—so many who did so much for our country.

[Mr Speaker]

I call Mr Tom Harris.

[Hon. Members]

Bomber Harris!

[Mr Tom Harris (Glasgow South) (Lab)]

Q8. A great start.I thank the Prime Minister for saving my marriage. Carolyn was just about to sign the divorce papers when she heard the report that if we stayed together we would be in line for a sweet £150 a year tax break. If, as the Prime Minister says, marriage must be underpinned by the tax system, why is it that, since the married person’s tax allowance was abolished in 2000, the divorce rate has gone down?

[The Prime Minister]

I am delighted that happiness is maintained in the Harris household. I could put it another way. It was only when I started to talk about the married couple’s allowance that the Leader of the Opposition tied the knot. The tax system moves in mysterious ways.

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

In the light of the call by the Leader of the Opposition for urgent action in response to the Independent Parliamentary Standards Authority’s proposal for an increase in MPs’ pay, will my right hon. Friend immediately retable the Boundary Commission report, which would simultaneously pay for any increase and increase the workload of MPs? It would surely be hypocritical for the Leader of the Opposition or the leader of the Liberal Democrats to oppose that measure.

[The Prime Minister]

My right hon. Friend tempts me. The point I was trying to make is that cutting the cost of politics has a role to play alongside this argument—[Interruption.]

[Mr Speaker]

Order. Members must not shout at the Prime Minister. It is discourteous to keep gesticulating at the man. Let us hear the Prime Minister.

[The Prime Minister]

It is no good shouting from the Opposition Benches. Labour Members had the opportunity to reform the Lords, and they were the ones who stopped it.

[Mark Durkan (Foyle) (SDLP)]

Q9. The Prime Minister says that the G8 and his attendance at the investment conference advertised his commitment to Northern Ireland and its economy. However, his Whitehall is busy removing jobs from Northern Ireland in the Driver and Vehicle Agency and now also in Her Majesty’s Revenue and Customs, with the proposal to close offices in Newry and Enniskillen and halve the office in my constituency of Foyle. How does the removal of jobs by Whitehall contribute to balancing both the economy in Northern Ireland and that region?

[The Prime Minister]

I understand why the hon. Gentleman makes his point. My hon. Friend the Exchequer Secretary will meet him to talk about the HMRC issues. As for the Driver and Vehicle Licensing Agency, the Department for Transport is still considering the results of its consultation. Let me make this point. Employment in Northern Ireland has risen by 32,000 since the election, and he knows, as I do, that the real long-term answer for the economy in Northern Ireland is a private sector revival. The public sector is very large in Northern Ireland. We need more small and medium-sized enterprises and more investment in Northern Ireland, and we need those jobs to come, which is what the G8 and the investment conference were all about.

[Jeremy Lefroy (Stafford) (Con)]

Q10. My constituent Jack Scerri, who has recently completed the National Citizen Service programme, visited my surgery on Saturday with Lisa Farrell of Staffordshire NCS to let me know just how much the programme had given him personal confidence and a clear sense of what he wished to do with his future. What plans does my right hon. Friend have for enabling as many young people as possible to take part in that transformative programme that he has championed?

[The Prime Minister]

I am grateful to my hon. Friend for what he has said. It is a transformative programme. Some 66,000 young people have already been through it since 2010. It now forms part of what Prince Charles wants to see—a decade in which we encourage volunteering and we get 50% of all young people taking part in volunteering. I hope that Members from all parts of the House are having an experience similar to that of my hon. Friend, with people stopping them and talking about the NCS and what it has done for young people and their confidence. It really is a good programme, and I am delighted that it has all-party support.

[Fiona O'Donnell (East Lothian) (Lab)]

As the Prime Minister is trying to come over all family friendly, can he confirm whether maternity and paternity pay will be included in the benefits cap announced in the autumn statement?

[The Prime Minister]

As the Chancellor announced at the time, what is out of the benefit cap is the basic state pension. I think that is important. On all other welfare spending, we need to ensure that we are distributing properly the different sorts of welfare.

[Sir Tony Baldry (Banbury) (Con)]

Q11. Three hundred and thirty new jobs were created in my constituency in the past three months alone and I expect many more to be created over the next few months, particularly as housing and construction projects accelerate. Does my right hon. Friend agree that it is important that young people are not left behind and that abolishing the jobs tax on young people aged under 21 shows that the Government are serious about tackling youth unemployment?

[The Prime Minister]

I am grateful to my hon. Friend for what he says. As the economy recovers, it is vital that it is a recovery for all—that it is a recovery for north and south, for young and old. There is always a danger in an economy that young people who are not in the work force will be locked out of it, and that is why the change that the Chancellor announced about abolishing the jobs tax on those young people to make it cheaper for employers to take them on can have a real impact on ensuring that young people participate in our growing economy.

[Mr Dave Watts (St Helens North) (Lab)]

Given the fact that the Work and Pensions Secretary was left alone on his Benches when he made his statement on universal credit, does the Prime Minister still have confidence in him and in the universal benefit changes?

[The Prime Minister]

I think the Work and Pensions Secretary has probably done more than anyone else in British politics to transform the debate about welfare. That is happening because of his dedication to the issue. We see fewer people out of work and the number of workless households at its lowest since records began. He is introducing a system that includes the benefit cap that Labour voted against and the household benefit cap that Labour voted against, and that is making work pay. We should be proud of that work.

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

Q12. Does the Prime Minister agree that in the long term the best plan to improve the living standards of my hard-working constituents in Bury, Ramsbottom and Tottington is to continue to cut their income tax, which can only be achieved by a growing economy and by the Government cutting spending so that our country lives within its means and does not have to borrow every month to pay its bills?

[The Prime Minister]

My hon. Friend makes a very important point. At the end of the day, you can talk all you like about how you want to help people with their living standards and to keep their tax bills—[Interruption.] Is it not extraordinary? After last week, and all that, the shadow Chancellor is at it again—heckling. We learned something last week: he can dish it out but he can’t take it—[Interruption.] I will tell the House what is going down: his career. That is what is going down. The simple point is that if we want to get people’s taxes down, we have to make difficult decisions about spending. That is what we have done. That is why we can cut taxes, whereas the Opposition would have to put them up.

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

In towns across the United Kingdom, there are parents in deep despair because they cannot afford a decent Christmas for their children. Why is that?

[The Prime Minister]

What is happening in our country is that we are recovering from the longest, deepest and most difficult recession in living memory. It takes time, but what we see is 1 million more people in work—that is a positive development. We see 400,000 more businesses operating in our country—that is a positive development. The growth rate in our country is now the second-highest of any major western economy. The job is not done yet; it is not halfway done yet. That is why we need a long-term economic plan, which is what we are dedicated to delivering. Frankly, we would get nowhere if the first thing we did was to increase spending, increase borrowing and increase taxes—all the things that got this country into the mess in the first place.

[Mr Nigel Evans (Ribble Valley) (Ind)]

Q13. British Aerospace has 1,000 apprentices at any one time, and 221 in Samlesbury in the Ribble Valley and neighbouring Warton in Lancashire. What can the Prime Minister do to encourage other firms to follow the excellent example of British Aerospace and take on more apprentices, particularly in engineering and science? That would in itself encourage more youngsters to study those subjects in school and university.

[The Prime Minister]

I have seen with my own eyes what BAE Systems does in respect of apprenticeships, including higher level apprenticeships, and it is extremely impressive. We have to take action at every level. We have to make sure that more young people are studying science and maths subjects, and that is beginning to happen. We have to make sure that setting up apprenticeships is simpler. It must be less expensive. We need a culture where companies really want to get involved in this programme, including small companies, but we also need to attract more investment to our shores. That is why it is particularly good news today that GSK, one of the giants of the pharmaceutical industry, is announcing another £200 million invested into our country, because alongside engineering, life sciences is an area where Britain can win in the global race.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

Q14. When the House debated Syria in late August, the estimate of dead in the conflict was around 100,000. Just over three months later the estimate is over 120,000. We cannot allow this to become a conflict in a faraway land that we do not know anything about. Is it not time for the Government and, indeed, the whole House to urge greater action by the international community and show that we do care about the suffering of the Syrian people?

[The Prime Minister]

I absolutely agree with the hon. Lady, who has a long record of speaking out on this issue and believing, as I do, that Britain should be fully engaged in all the work to try to bring those involved in this dreadful war to the negotiating table, under the terms of the Geneva II process. At the same time, we must continue with the work that we are doing on humanitarian aid to help those who are suffering because of the conflict, but we should also, in my view and, I suspect, in hers too, continue to work with all those in Syria who want a free, democratic and pluralistic future. We must not allow the argument to develop that the only opposition in Syria is an extremist opposition. That will become the case only if we stop working with those who care about democracy in the future.

[James Duddridge (Rochford and Southend East) (Con)]

In Rochford and Southend, employment is up, the number of apprentices is up and small business numbers are up, largely owing to the impact of the expanding Southend airport. I know the Prime Minister is probably a bit sick of airports, having just come back from one, but would he consider coming to Southend airport in the new year to celebrate its success Essex-style, bringing the family, if he wants? I promise to buy them all a Rossi ice cream on the sea front.

[The Prime Minister]

Who could resist the idea of an Essex-style celebration in the new year—although I might need to find out a little bit more of what it involves before I fully commit? We should not underestimate the importance of airports in driving regional growth. Clearly, that is the case in parts of Essex.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Q15. Despite the Government’s savage cuts, next year Liverpool will host the international festival of business. Why will the Prime Minister not commit to attending the event? Will he ensure that the same level of support that Boris would enjoy is afforded to the mayor of Liverpool? Will he tell his green-eyed bête noir that despite a short sleepover in London, the Beatles are and always will be made in Liverpool?

[The Prime Minister]

Having happily visited the Beatles museum many years ago and enjoyed being there, I can confirm what the hon. Gentleman says. I have never had any problem working with the mayor of Liverpool and enjoyed appearing on a platform with him to advertise the brilliance of that city, and I will continue to co-operate with him in all the work that he is doing to attract investment into the city.

[Martin Horwood (Cheltenham) (LD)]

Abolishing roaming charges is one of the big wins for British consumers that we might get from remaining in the European Union. Has the Prime Minister had the opportunity to discuss international mobile phone usage with any other European Heads of Government in the past day or so?

[The Prime Minister]

You could say I have, in a roundabout way. It should be remembered that the television cameras are always on, but in my defence I would say that Nelson Mandela played an extraordinary role in his life and in his death in bringing people together, so of course when a member of the Kinnock family asked me for a photograph, I thought it only polite to say yes.

Points of Order

Wednesday 11th December 2013 Commons Chamber

12:34

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

On a point of order, Mr Speaker. In a named day question on 5 December this year, I asked the Attorney-General how many libel settlements, and of what value, the Crown Prosecution Service had made in each year between 2007 and 2012. I was given the answer that the CPS had made no libel settlements in that period. Unfortunately, in May 2008, in a case adjudicated by Master Eyre between Hardcash Productions and the Director of Public Prosecutions and the chief constable of West Midlands police, there was a settlement of £50,000 between the two defendants. I am certain, because I know him well, that there is nobody less likely to mislead the House than the Attorney-General. Therefore, he must be depending upon information given to him by the Crown Prosecution Service. If this House cannot depend on the organisation that is supposedly committed to promoting justice in this country to give us the truth, the whole truth and nothing but the truth, what can you do to defend us?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. In the first instance, I can ask the Attorney-General to respond, and we will see what happens.

[The Attorney-General (Mr Dominic Grieve)]

Further to that point of order, Mr Speaker. I am grateful to my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) for indicating to me a short time ago that he wished to make that important point. At the moment, I am not in a position to answer his question. He is absolutely right that the answer I gave him was based on information provided to me by the Crown Prosecution Service. He has given me some information that gives rise to a question as to whether that is accurate. I take that very seriously and the matter is being looked into urgently. When I have an answer, I will of course ensure that it is not only supplied to him, but made available to the House.

[Mr Speaker]

I hope that satisfies the right hon. Gentleman for today. I thank him for raising this important matter, which really is a public service. I am sure that clarity will be established, and hopefully very soon.

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

On a point of order, Mr Speaker. You will recall that recently I have twice raised the issue of the response, or lack thereof, to my correspondence from the Minister for Immigration. Following the point of order I raised last Monday, on which you ruled, and about which I remind the House, I have continued to receive letters signed not by the Minister for Immigration, but by Lord Taylor of Holbeach, against whom I have no resentment whatsoever. That continued until yesterday, so I asked my secretary to telephone the office of the Minister for Immigration to say that if I continued to receive letters that were not signed by him by Friday of this week, I would raise the matter on the Floor of the House. However, when my secretary made that call, the lady who answered said—I quote from my secretary’s note—that

“this was noted but that it would not make any difference and that Lord Taylor will still be replying, as he does to other Members of Parliament.”

I regard that response as a serious discourtesy from a civil servant to a Member of Parliament in any case.

Mr Speaker, when you responded to my point of order last week, you said:

“It should not be a matter of any controversy from now on. I hope that the Home Secretary can pass on the message to the Minister for Immigration and that the Minister for Immigration will behave in a seemly manner both towards the right hon. Gentleman and towards other Members.”—[Official Report, 2 December 2013; Vol. 571, c. 658.]

I should add that two Cabinet Ministers have told me that as a rule they always reply in person to letters from Privy Counsellors. In view of the fact that what you described as a “seemly manner” is not being observed by the Minister for Immigration, I ask you to rule on the matter. Furthermore, with your permission, if I receive any more letters from Lord Taylor, I will send them to you.

[Mr Speaker]

I wonder whether the Leader of the House wishes to say anything now—or he and I can discuss the matter.

[The Leader of the House of Commons (Mr Andrew Lansley)]

indicated dissent.

[Mr Speaker]

The right hon. Gentleman is shaking his head. Perhaps we will have a conversation afterwards; I think that that in itself would be perfectly seemly.

May I say for the avoidance of doubt, so that nobody thinks that I am sitting on the fence on this matter, which I most certainly have not done, that I think the concern expressed by the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) is a reasonable one, and reasonable people should respond to it in a reasonable way, which, as far as I am concerned, means that he should get what he has reasonably requested. I am not sure whether something in the system is causing the problem or whether an individual is being obstinate, but it is not necessary. I think that the right hon. Gentleman, who has served in the House without interruption for 43 years and coming up to six months, should be treated with courtesy. He has not been, and I am sorry about that and hope we can put the matter right. I really do not want this matter to have continually to be raised on the Floor of the House. The reputation of the Department is at stake, and the Department must, frankly, raise its game. The Leader of the House and I can talk about it afterwards.

Surveillance of Telecommunications (Judicial Oversight)

Wednesday 11th December 2013 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:40

[Mr David Heath (Somerton and Frome) (LD)]

I beg to move,

That leave be given to bring in a Bill to amend the Regulation of Investigative Powers Act 2000 and the Intelligence Services Act 1994 to ensure judicial oversight of the use of material derived from British citizens by means of surveillance of telecommunications; to make provisions concerning the operation of the Investigatory Powers Tribunal; and for connected purposes.

Having unfortunately been on Capitol hill in Washington on 9/11 and in Aldgate on 7/7, I need no lessons on the threat to this country from terrorism and from those who wish to do us harm. I want to start my comments by paying tribute to the security services for all their hard work and the dangers they encounter on our behalf. I would include in that GCHQ, which provides invaluable information, often on the basis of fragmentary evidence, in supporting our safety.

Any surveillance and any clandestine operation in an open, democratic society raises questions that cannot be answered by the agencies themselves or by the Executive but only by the legislature—by this Parliament. They are questions such as these: where are the boundaries between privacy and legitimate information gathering? What controls are in place to prevent either abuse or the suspicion of abuse? What are the limits to what inevitably has to be done in secret? What information is legitimately withheld? How does our legislation and, for that matter, our capability measure up to the ever-changing potential of technology? How effective is our parliamentary scrutiny? How comprehensive is the legal framework within which the security services work?

It is only by asking those questions and, more importantly, coming up with answers that Parliament can ensure not only the safety but the protection of the interests of our citizens. Only by having adequate safeguards in place can we retain people’s confidence that what is being done is being done in an appropriate and proportionate way, and that they can safely use technologies where they believe they have a right to privacy without that privacy being invaded without good cause by the state.

Recent revelations have, at the very least, called into question some of those suppositions, not—I make this clear having received assurances from Ministers—such that the security services are acting outside the law, but that the law is inadequate to meet the present circumstances. That is why my Bill proposes amendments to the legislation passed in 1994 and 2000 to fill in those gaps. Let us remember how far the technology has moved in those intervening years and the extent to which the use of social media, for instance, and various technologies is so very different from the circumstances in which that legislation was framed.

We need to deal with not only the direct interception of communications, but the collection of communication data. Those metadata—the derivative data—that can be analysed are just as important, but I believe that the law is silent on that area. We also need to deal not only with what is collected directly by the United Kingdom agencies, but with the actions of overseas allies. We need to ensure that such material is subject to judicial oversight and on the terms of warranted action rather than those of subsequent review, which is a key difference.

The Bill would enable the man or woman on the street to know that their communications were not the subject of inappropriate and disproportionate intrusion. Just as importantly, it would provide the legal framework by which the security agencies would ensure that they would not be subject to legal challenge in their essential work. No such framework exists at present.

That review and updating of legislation is very necessary—those working within the security world agree about that as much as commentators on the outside, including the senior judiciary. If my Bill does not reach the statute book, I hope nevertheless that post-legislative scrutiny of the Regulation of Investigatory Powers Act 2000 will now be undertaken as a matter of urgency, because we need to answer some of these essential questions.

Parliamentary scrutiny is critical. I salute the work done by the Intelligence and Security Committee, particularly the announcement of its forthcoming inquiry into these matters. How much stronger would it be, however, were it to be more properly constituted as a Select Committee chosen by this House and given the resource to do its job properly? That is something I advocated in government and I renew my plea now. I do not believe it is impossible to achieve the security clearances needed to ensure that information is not inappropriately shared while also following the selection procedures of this House. Other legislatures do it. The Americans do it. Why on earth are we incapable of following their example? I see no obvious reason.

Finally, the Investigatory Powers Tribunal should be reformed to make its operation more transparent and the basis for its decisions more open. There are very good reasons—I understand that—for not revealing every detail of a strand of investigation or a technique that is at the disposal of the authorities, but a total lack of transparency and accountability for decision making is not the answer. I believe we can do better.

As I briefly alluded to earlier, other countries are taking these matters very seriously indeed. I am struck by the work being undertaken by the Senate Committee led by Senator Feinstein in the United States. Its legislature is leading a very public debate on where the limits—the boundaries—ought to be set. We are not having that same debate in this country and I think that is because we in Parliament are not taking the lead that we should. I believe that we have a duty to do so.

If we do not do that, I believe we will be failing our citizens and, incidentally, our security services. If we simply close our eyes to what are real issues with difficult answers, we will be letting down not only the public, but the people we ask to do these terribly difficult jobs. They cannot police themselves. They cannot do everything through better training or through being given better information because, at the end of the day, their focus is on doing the best possible job, not on setting the boundaries for their work, which is the proper job of Parliament.

I believe that we owe it to all those with intelligence interests not just to visit, but to revisit the legislative framework regularly, because unless we do so it will never keep up to date with technological advances or keep pace with the techniques of those who would wish to harm us, let alone the techniques of those with whom we entrust our security.

The Bill will at least allow us to debate the matter properly. I hope that it will also enable us to amend the law appropriately and to do the job that our electorate expect us to do, which is not just to give the security services the ability to ensure our protection, but to provide people with the security of knowing that there are boundaries provided by a framework of regulation and that those who necessarily work in a clandestine way will keep to those rules because that is the law.

Question put and agreed to.

Ordered,

That Mr David Heath, Mr Dominic Raab, Mr Tom Watson, Dr Julian Huppert, Mr Elfyn Llwyd, Rory Stewart, Simon Hughes, Mr David Winnick and Caroline Lucas present the Bill.

Mr David Heath accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February 2014, and to be printed (Bill 143).

Delegated Legislation

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

Value Added Tax

That the Value Added Tax (Flat-rate Valuation of Supplies of Fuel for Private Use) Order 2013 (S.I., 2013, No. 2911), dated 18 November 2013, a copy of which was laid before this House on 18 November, be approved.—(Anne Milton.)

Question agreed to.

Financial Services (Banking Reform) Bill (Money)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Financial Services (Banking Reform) Bill, it is expedient to authorise:

(1) the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by a Minister of the Crown or government department;

(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided;

(2) the payment out of the Consolidated Fund of any increase attributable to the Act in the sums which in urgent cases are payable out of that Fund under the Banking Act 2009;

(3) the payment out of the National Loans Fund of any increase attributable to the Act in the sums payable out of that Fund under any other Act.—(Sajid Javid.)

Financial Services (Banking Reform) Bill (Ways and Means) (No. 2)

Resolved,

That, for the purposes of any Act resulting from the Financial Services (Banking Reform) Bill, it is expedient to authorise:

(1) the charging of fees on persons authorised under Part 2 of the Compensation Act 2006 for the purpose of meeting expenditure of the Office for Legal Complaints; and

(2) the payment of sums into the Consolidated Fund.—(Sajid Javid.)

Financial Services (Banking Reform) Bill (Programme) (No. 3)

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

That the following provisions shall apply to the Financial Services (Banking Reform) Bill for the purpose of supplementing the Order of 11 March 2013 in the last Session of Parliament (Financial Services (Banking Reform) Bill (Programme)) and the Order of 8 July 2013 (Financial Services (Banking Reform) Bill (Programme) (No. 2)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion six hours after their commencement at today’s sitting.

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

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

Table

Financial Services (Banking Reform) Bill

Wednesday 11th December 2013 Commons Chamber

Consideration of Lords amendments

[Mr Speaker]

I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 35, 37, 40, 64, 149, 150, 162, 163, 169, 171, 172, 173 and 175. If the House agrees to any of these amendments, I shall ensure that the appropriate entry is made in the Journal.

After Clause 12

Part 4

12:53

[The Financial Secretary to the Treasury (Sajid Javid)]

I beg to move, That this House disagrees with Lords amendment 41.

[Mr Speaker]

With this we may take Lords amendments 42 to 62, 160 and 174.

[Sajid Javid]

It is a pleasure to introduce these amendments. Much work has been undertaken in this House and in the other place since my predecessor closed the Second Reading debate in March. That work has improved the Bill. The Bill has expanded greatly in length and content since it left this House. In large part, the variety of new issues that it covers reflects the Government’s acceptance of the vast majority of the recommendations that were made by the Parliamentary Commission on Banking Standards, which published its final report after the Committee stage in the Commons.

I pay tribute to the members of the PCBS and especially those who sit in this House: my hon. Friend the Member for Chichester (Mr Tyrie), the right hon. Member for Wolverhampton South East (Mr McFadden), the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), the hon. Member for Edmonton (Mr Love) and my hon. Friend the Member for Wyre Forest (Mark Garnier). It was their hard work that led to the reports.

I will speak in support of the amendments that resulted from the work of the parliamentary commission, but ask the House to reject the Opposition amendment that was made in the other place, Lords amendment 41. I will begin by explaining how the former amendments will deliver the goal of improving the standards of conduct in banking.

The Parliamentary Commission on Banking Standards concluded that the current system for approving those who hold senior positions in banks, the approved persons regime, had failed. The commission’s central recommendation was the creation of a senior persons regime that applies to senior bankers. The Government accepted that recommendation. The amendments will deliver on the recommendation by putting in place a senior managers regime with five key features.

First, the regime will reverse the burden of proof so that senior bankers can be held to account for regulatory breaches in their area of responsibility, without the need to prove that they were personally involved in the wrongdoing. Secondly, there will be mandatory statements of responsibility for senior managers. Thirdly, the regulators will be able to make conduct rules for senior managers in banks. Fourthly, there will be provision for time-limited and conditional approvals of senior bankers. Fifthly, the financial services register, which is kept by the Financial Conduct Authority, will state who is a senior manager in a bank and give details of the regulatory action that has been taken against them. The amendments will provide a clear and effective system for raising standards and increasing accountability among the country’s senior bankers.

Lords amendment 53 introduces a certification regime for bank staff. That will apply to all staff below senior management level who have roles in which they could seriously harm the firm or its customers. The Prudential Regulation Authority and the FCA will therefore be given a far-reaching new power to make enforceable rules of conduct for all employees in a bank. Banks will have to verify that employees who have roles in which they could do significant harm to a bank or its customers are fit and proper for those roles. Banks will have to do that on appointment and annually thereafter. They will have to issue certificates, which may be electronic, to those employees, confirming that they are fit and proper for their role.

The Government have always supported the spirit and substance of the commission’s licensing regime recommendations. However, we do not consider it appropriate to call it a licensing regime. That would imply that the individuals concerned had been given licences by a regulator. That is precisely the opposite of what the commission recommended. We therefore cannot use the words “licence” or “licensing”. It is in order to refer to “certificates” and “certification” because certificates will be issued by the banks. Banks will also have to notify employees of the banking standards rules that apply to them and take steps to ensure that they understand them.

I would like to say something about the firms that are covered by the senior managers regime and the new obligations under the certified persons regime. The parliamentary commission naturally focused on banks. However, the definition was extended to include systemically important investment firms that do not take deposits, but that are regulated by the PRA. We have also included a power to extend the senior managers and certified persons regimes to cover UK branches of foreign banks and investment firms if it is considered appropriate to do so. Some large branches of foreign banks and investment firms operate from London, so it is prudent to equip ourselves to bring them into the new regime.

[Neil Parish (Tiverton and Honiton) (Con)]

Does the Minister agree that it is essential that companies can trust their banks in order that they can do business? We must get the legislation right so that companies can again trust their banks. Companies must feel able to give banks confidential information in the expectation that it will remain confidential. Companies need to be able to access finance to compete in business and create employment. The banks are holding back our businesses.

[Sajid Javid]

I agree wholeheartedly with my hon. Friend, and I hope that he agrees that all the effort that has gone into setting up this new regime—in particular the senior managers regime and the certification regime—is a huge step forward in achieving that aim.

13:00

The Government are committed to bringing branches of foreign banks and investment firms that operate in London into the regime. At the same time, such a shift may be disproportionate for some small branches with few real decision makers, and the Government will consider the case for not extending the regime to such branches in due course.

I do not accept Lords amendment 41 because it would do nothing other than rename the existing approved persons regime as a licensed persons regime—that is about all it does. It would not deal with problems with the existing regime identified by the Parliamentary Commission on Banking Standards, or deliver the improvements recommended by that commission. I assure the House that, under the Government’s approach, which is based on the commission’s recommendations, firms will have to certify that people who perform roles through which they could do significant harm to the firm or its customers are fit and proper to perform those functions. That will include ensuring that they have received suitable training and have any relevant qualifications required by the regulator. That will not be a one-off check; it will be done annually.

The Opposition amendment would place all the burden of raising banking standards on the regulator. The PCBS concluded:

“Banks should not be able to offload their duties and responsibilities for monitoring and enforcing individual behaviour on to the regulator or on to professional bodies. The tools at their disposal have the potential to be much more usable, effective and proportionate for the majority of cases than external enforcement,”.

That is the approach the Government have adopted in their amendments. They place clear responsibility on the banks to ensure that anyone who is appointed to a post where they might cause significant harm to the bank or its customers, is fit and proper and able to perform their role. That will require consideration of the person’s qualifications, characteristics, experience and training, and the banks will have to consider each year whether that person is still fit and proper to continue in that job.

The regulator will specify those functions that may cause significant harm to a bank or its customers in rules, and can specify what qualifications must be held by anyone appointed to that role. The bank’s implementation of that regime will be subject to monitoring by the regulators, who will be able to take enforcement action against any bank that does not meet requirements laid down by the regulators.

The Government have worked tirelessly to replace the failed system of financial regulation we inherited from the previous Government. We supported the PCBS in its work and are implementing its recommendations. It seems that all the Labour party can offer at this point is a change of name. I therefore ask the House to reject Lords amendment 41.

Another key recommendation of the PCBS is the introduction of a new criminal offence of reckless misconduct in the management of a bank. The introduction of such an offence means that, in future, those who bring down their bank by making thoroughly unreasonable decisions can be held accountable for their actions, which, as we have seen, can lead to severe economic disruption and considerable losses for taxpayers.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

With hindsight, will the hon. Gentleman help the House and say whether Fred Goodwin would have been prosecuted under that provision?

[Sajid Javid]

It is possible, although it is difficult to answer that question specifically as it would depend on the legal process, as anticipated in the Bill. As I progress with my remarks, the hon. Lady will see the kind of actions that can lead to prosecution.

[Mark Garnier (Wyre Forest) (Con)]

Does the Minister agree that a lot of the changes that are coming through as a result of PCBS recommendations should in some respects be treated rather like the nuclear deterrent? It is not necessarily about trying to punish people; it is about trying to drive behaviour that avoids a crisis in the first place. Had these rules been around at the time, it is far more likely that Fred Goodwin would not have led his bank over the cliff, that we would not have had the financial crisis, and that we would have a more stable banking system as a result. That is the intention behind the proposed law.

[Sajid Javid]

My hon. Friend has explained well the reasoning behind the recommendation from the PCBS—which, of course, he was part of—and the deterrent effect this change could have should not be underestimated.

[Emily Thornberry]

I thank the Minister for giving way again; he is helpful in giving me the time because I am genuinely confused about this. If the proposed legislation is to have a deterrent effect and deter the sort of behaviour that was seen before the banking crash, had it been in place at the time, presumably people would have been prosecuted. All I want to know is: which people, and can the Minister give the House some examples?

[Sajid Javid]

As I discuss the issue I will provide more information on how the measure could work, and perhaps the hon. Lady will judge for herself, given the situation she has in mind, whether the measure would have acted as a deterrent, and whether a prosecution could have taken place.

[Mr Andrew Tyrie (Chichester) (Con)]

First, I think it would be inappropriate to try to assess the impact of the proposed legislation on any specific case that has passed, and secondly, we are trying to devise legislation that will work for the future. I completely endorse what my hon. Friend the Member for Wyre Forest (Mark Garnier) has just said. We must emphasise that we expect a change and improvement in behaviour as a consequence of much more considerable risks and responsibilities being placed on those individuals than currently pertain with the approved persons regime and system of regulation.

[Sajid Javid]

I thank my hon. Friend for his comments. As Chair of the Parliamentary Commission on Banking Standards, he helps to explain the commission’s reasoning, which the Government share.

The introduction of this offence means that, as we have heard, in future those who bring down their bank by making thoroughly unreasonable decisions can be held accountable for their actions, which, as we saw in the recent financial crisis, can lead to severe economic disruption and considerable loss for taxpayers. In line with the commission’s recommendations, the new offence will be applicable only to individuals who are covered by the senior managers regime I mentioned earlier. Senior managers could be liable if they take a decision that leads to the failure of the bank, or if they fail to take steps available to them to prevent such a decision from being taken.

The offence will apply to behaviour that falls far below the standard that could reasonably be expected of a person in their position—that is similar, for example, to the test applied in corporate manslaughter. Importantly, the offence will apply to senior managers in banks, building societies and investment firms, and be subject to PRA supervision. That reflects concerns expressed by their lordships that the failure of systemic investment firms could lead to similar adverse consequences for financial stability, and that the taxpayer may have to bail out a collapsed retail bank. The maximum sentence for the new offence will be seven years in prison, and/or an unlimited fine. That reflects the seriousness that the Government, and society more broadly, place on ensuring that our financial institutions are managed in a way that does not recklessly endanger the economy or the public purse.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Minister struck the correct note when he mentioned the seriousness of such situations. Much concern has been expressed that this provision applies only to financial institutions, but the conditions that would have to apply for it to be used—in other words, a serious threat to the systemic nature of our financial system—are such that it is likely the measure will not be used often.

[Sajid Javid]

I completely agree with the hon. Gentleman and I think we all hope that the new criminal sanction will not actually have to be used because the offence will act as a genuine deterrent against such recklessness.

[Emily Thornberry]

If I were a senior banker to whom this law applied, what would affect my decision on whether to behave recklessly? Would it be the thought, “If I do this, there’s a risk my bank and the whole financial system will crash around my ears and I will be seen as personally responsible”, or would it be the possibility of being prosecuted under this new legislation?

[Sajid Javid]

Both cases would be a deterrent. A key point of the change to criminal sanctions is that they would apply if a senior manager took part in any reckless action—there is a very strong test, as we have just heard—that led to the failure of a bank. It would not be appropriate to perform a legal analysis of what has happened in the past because we do not have the full facts before us, but if a board full of senior managers makes a decision on, let us say, a potential acquisition and they fail to carry out proper due diligence or they deliberately ignore certain risk factors, and that eventually leads to a failure and collapse of that bank, that will be an example of the situation that the new offence tries to capture. It is reasonable to say that, as those senior managers will be aware of the new criminal sanction, which did not exist before, it will bear on their minds when they make those important decisions. The Government amendments in this group will improve standards and the culture in banking.

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

I have listened with interest to the Minister. May I first add my thanks to all the members of the Parliamentary Commission on Banking Standards, who have done us a great service in examining the issues in great detail? They include not only Members of this House but Members of the other place—the Archbishop of Canterbury, my noble Friend Lord McFall, Lord Turnbull and Lord Lawson. Other Members in the other place, including my noble Friends Lord Eatwell, Lord Mitchell and Baroness Hayter, have ensured that particular issues have been put on the agenda.

It would be remiss of me not to say a few words about how we have arrived where we are today—considering a vast number of Lords amendments at this stage. The concerns about that have been well rehearsed during discussion of the Bill and how it has been brought forward and considered. The Government commissioned the Parliamentary Commission on Banking Standards to ensure that recommendations could be added to the Bill, but we had a very thin Bill for Second Reading and in Committee. The commission recommended a three-month gap between the publication of the Bill and the commencement of the Committee stage, but the Government rejected that idea. Instead, this House had to consider the partial Bill before the final report on standards and culture had been published. It is pertinent to reflect on that, given some of the comments made by the Minister. Many of the issues that will be taken forward when the legislation is enacted will still depend on judgments being made and on getting the message across that the culture of banking, at whatever level, has to change. That would have been helped by further scrutiny at various points.

We must also remember that the Government’s response to the commission’s report was published only three or four hours before we started considering the Bill on Report. We had 183 amendments tabled during the next stage of the Bill, and I wish to put on record our concerns about that method of legislation. The Bill is now three times bigger than the one that was originally introduced, and consideration of Lords amendments took place only a couple of days after Third Reading—again, without much opportunity to consider matters in detail.

[Mr Gordon Marsden (Blackpool South) (Lab)]

My hon. Friend is detailing, forensically and importantly, the logjam that this process has produced. Does she agree that if we had had longer, organisations and groups outside the House, which feel very strongly on these issues, would have had more opportunity to make representations? The Government’s failure to allow that, by tabling these amendments as they have done, has circumscribed the public process.

13:15

[Cathy Jamieson]

My hon. Friend makes an important point. It is vital that the public has confidence in the process. The public need to know that the culture of banking will change; that we have given the Bill thorough scrutiny; and that we have considered and put in place every possible method to limit bad judgments and errors in the future. In the end, however, it will be down to individuals, and from my experience of various pieces of legislation I would always guard against the notion that any individual piece of legislation will guarantee that nothing will go wrong in the future. That always depends on individuals making judgments. It is important that we get the culture right so that individuals within it make judgments not just because they fear that they will be prosecuted and go to jail, but because they believe they are doing the right thing by their customers and by the wider economy.

[Mr Love]

Before my hon. Friend moves on, does she agree that while we should congratulate Members in the other place on the role that they played in amending the Bill, it would have been correct to delay the Bill so that the House of Commons had proper time to scrutinise the changes recommended by the commission, rather than leaving that to the other place?

[Cathy Jamieson]

My hon. Friend makes a valuable point. It would have stood us in good stead had we had such an opportunity. I have only been a Member of Parliament for a relatively short time, and others will have much more experience, but it seems to me unusual to have so many amendments at this stage of a Bill. External bodies have made significant representations at this stage, which is also unusual and shows the strength of feeling about the issue of banking and its culture. It also shows that people have been thinking about how to future-proof the Bill, not simply to repair damage done in the past, but to ensure that we do all we can for the future. Some people may feel that this has been a tick-box exercise and a part of the process that does not matter as much, and it is rather sad if that has been the case.

We know that we have a huge amount more to do. Only today we have seen the latest news about Lloyds bank being fined again. It is also fair to say that as the weeks and months have unfolded during the Bill’s passage, we have seen various situations emerge. I have written to the Minister on the recent issues on forex, and we have also had the sad events at the Co-operative bank and the outcome of investigations into the LIBOR rigging. Those all show that more issues may arise that will have to be dealt with properly, and we want to ensure that the legislation we put in place is able to do that.

[Emily Thornberry]

Is my hon. Friend satisfied with the definition of senior bankers as those who would be liable to be prosecuted? Is it sufficiently clear and is it felt that it covers those people who really would be directing proceedings?

[Cathy Jamieson]

My hon. Friend makes another interesting point. She has already raised the likelihood of criminal proceedings, and in that context the Minister made comparisons with other legislation. I was concerned about the comparison with legislation on corporate manslaughter, which my hon. Friend obviously knows a considerable amount about. We have to ensure that definitions are as tight as possible, so that things do not slip through the net at a later stage. I hope the Minister will be able to provide clarity on those concerns.

We wish to ensure that Lords amendment 41, on professional standards, stays in the Bill. Earlier this year, the Government committed to implementing the main recommendations of the Parliamentary Commission on Banking Standards. Those recommendations included the creation of the new criminal offence of reckless misconduct by senior bankers. We want to ensure that that is as tight as possible. As the Minister outlined, the Government also agreed to introduce a new two-tier authorisation process for bank staff.

Our concern is that the Government have consistently failed to go far enough on the professional standards required of bankers. When the Bill was first introduced, Ministers resisted, on three separate occasions, Opposition attempts to put tougher professional standards in the Bill. Introducing the proposal at an early stage would have allowed us the opportunity to debate and finesse it, if required. At that stage, we included proposals for an annual health check on senior bankers. Indeed, Labour first pushed for a licensing regime with an annual validation of competence during the Committee stage of the Financial Services Bill in March 2012, so we have been pressing this case for a lengthy period of time.

Lords amendment 41 states that there needs to be

“minimum thresholds of competence including integrity, professional qualifications, continuous professional development and adherence to a recognised code of conduct.”

The recognised code of conduct is important. The then Minister, the hon. Member for Fareham (Mr Hoban), opposed the amendment, saying:

“I…argue very strongly that the amendment is not necessary. In fact, it could have unintended consequences.”––[Official Report, Financial Services Public Bill Committee, 1 March 2012; c. 235.]

I cannot recall what those unintended consequences he feared were. Given that the Government have now seen fit to change their view, I am sure they no longer have those concerns.

A similar amendment was tabled again in April 2013 to this Bill and once again it was voted down by the Government. We on this side of the House never give up: if we think something is the right thing to do, we will come back and come back again. We tabled the same amendment again in July 2013, and again the Government failed to support it. We tabled the amendments because we believe that the persons we are talking about must have adequate standards of competence and integrity. The debate on managing the process and legislating for it may seem technical, but it is important for people in the real world to know that we are trying to introduce reforms. There has been a degree of discussion across the House, and I accept that, but people need to know that we are trying to introduce reforms that complement the attempts to change the culture of the banking sector.

[Mr Marsden]

I am listening carefully to my hon. Friend as she lists the specific attempts that we on this side of the House have made to bring this into clear sight for the Government. Is it not worrying that the Government seem to have reacted as though we need do something only when the deathwatch beetle in these financial institutions has done its work and we need only press on the institution for it to collapse into powder? Unless we press the Government, there will be no mechanism to examine the process.

[Cathy Jamieson]

We pressed for an earlier introduction of the measure so that we could debate and finesse it if necessary. However, the Government were prepared to move only at the last minute, through a successful amendment in the other place, and it is disappointing that they now want to strike it down.

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

My hon. Friend is making a strong case. I, too, served on the Committee and witnessed our efforts on this matter. Why have the Government been on the back foot throughout the process? We are talking about the culture of banking, but I wonder whether there is an issue with a Government culture of continual caution, rather than the challenge that ought to be presented to some of those interests in society that have failed our country.

[Cathy Jamieson]

I thank my hon. Friend for his comments. I do not know what was in the Government’s mind, but in Committee the Bill was very thin. We raised the matter on a number of occasions, but the Government resisted every attempt to amend the Bill in Committee, apart from on one minor detail. In retrospect, that is not the way to produce the best possible legislation. The Bill will undoubtedly have been improved by the end of the process—I do not detract from the work that has been done—but it would have sent a stronger message to the general public and the financial services industry that this place took the matter seriously if the Government had accepted amendments at an early stage.

[Ian Swales (Redcar) (LD)]

As a member of an accountancy body that deals with police professional standards and continuing professional development, I understand this issue. I also understand that the financial services industry is diverse, with many different roles. Has the hon. Lady tried to list all those roles and thought about what professional qualifications and standards are appropriate to each and every one?

[Cathy Jamieson]

I understand the hon. Gentleman’s point. Our approach has been to suggest that that responsibility lies, rightly, with the Financial Conduct Authority. It would not be for me, as a shadow Minister, to list those roles. In relation to the definition of a professional, it is important for people to have professional development, with qualifications, on a continuous basis. One fundamental issue for professions is an adherence to a code of conduct. We tabled amendments on that consistently because we believe strongly that that is important. The wider world wants to know that the banking industry culture has changed and that malpractice, which unfortunately is still coming to light, is being dealt with.

[Mr Love]

As a member of the parliamentary commission, I note that despite our many recommendations, which my hon. Friend has illustrated, six years on from the credit crunch there are continuing difficulties with the culture of the banking system. Is it not the case that we need to do more to change that culture, and that we need to do it now?

[Cathy Jamieson]

My hon. Friend is absolutely right. If we believe the Bill to be the end of the story, we will do a disservice not only to the hard work done already, but to the industry and to the wider public. I hope the Minister and the Government will take that on board. We must always be vigilant and look to the future.

13:30

The commission was unable to consider several areas, which no doubt will come before us in the future, concerning the culture of banking—not just in retail banking, but in investment banking and on the trading floors—and other areas on which I am sure there will be more to do. Millions of consumers have fallen victim to the mis-selling of products in the past 15 years, but although many have successfully claimed money back, the general public see only that those who sanctioned the products and oversaw their mis-selling have not necessarily been held to account. That will remain a concern. Despite the huge economic and social importance of the banking industry, there are still no uniform professional standards for bankers. As I pointed out earlier, those with responsibilities in other professions—teachers, lawyers, medical health professionals—must comply with certain professional standards and codes of conduct, which is important.

There is concern that standards have not improved enough in the years since the initial banking crisis—as I said, we still hear of ongoing malpractice in the industry. Recent research from Which? has found that 65% of bank staff with a sales role say there is now more pressure than ever to meet sales targets and that almost half know of colleagues who have mis-sold products in order to meet their targets. It was reported today, in the context of the latest fine on Lloyds, that one bank employee sold products to his family and others in order to meet the incentives and not be demoted. If that is the case, it is exactly the kind of thing that the general public are concerned about.

One in four of those surveyed said that targets drove employees to sell inappropriately. Surely there can be nothing more inappropriate than people feeling under that kind of pressure. The report also found that two thirds of people thought that bankers were unlikely to lose their job if they lied or cheated. Despite the tougher regime and legislation we are putting in place, the general public are not convinced. A similar proportion think that bankers are unlikely to lose their job if they fail to comply with industry codes of conduct and even if they deliver consistently poor service or receive a lot of customer complaints.

Interestingly, given that we tried at various stages to introduce the concept of a fiduciary duty to look after customers, only 6% of people thought that bankers acted in the best interests of consumers. Only one in four felt that bankers were properly trained or qualified. Clearly, then, the industry has a long way to go to regain the public’s confidence. In discussing these issues, however, we need to think about those in the banking industry who are not making the big decisions at the top but are doing the front-facing work with customers. We must protect them and ensure that they are not put under pressure to sell or provide products incorrectly. On a wider issue, of course, we also need to protect the taxpayer from ever again having to bail out the banks.

The Opposition are not alone in thinking that. Sir David Walker, the chairman of Barclays, said on 5 February 2013 in his appearance before the commission:

“My view is that the best thing that could happen is for the Commission to say that it thinks that something like a banking standards board, designed to professionalise banking…be put in place and commend that as an initiative to be undertaken with urgency”.

The chief executive of the Chartered Banker Institute told the commission on 14 January:

“My predecessors tried to encourage banks and bankers to support professional qualifications and membership of professional bodies… I have tried in the past five years to say, ‘Look, in order to rebuild the banking industry, it’s fine to look at rebuilding regulatory structures and the structure of the industry, but the whole issue of culture and standards is one that is equally important.’”

He said he had been trying to bring attention to that for the past five years and arguing for a re-professionalisation of banking.

If the Minister does not wish to listen to us or those individuals, I should quote the Chancellor, who himself told the commission in February that we should develop the

“kind of professional standards...that you see in the medical profession or the legal profession”.

[Mark Garnier]

Is the shadow Minister aware that the banks have already initiated the creation of a professional banking standards body?

[Cathy Jamieson]

I thank the hon. Gentleman for that comment. I know that he has done considerable work in his role on the commission, but it is important that these issues be put on the record. It would have been useful to consider them in Committee, and I mention them now to show that significant pressure has been applied to move things forward and bring about change. The Government appeared to resist that and some of the commission’s recommendations until, of course, their recent change of heart following their defeat in the other place on the amendment for the licensing regime. At that point, they felt they had to bring forward their own plans.

The Opposition might have expected the Government to be reasonably gracious and accept the decision of the other place, but today they have tabled an amendment to disagree with and remove Lords amendment 41 from the Bill. To be fair, what they have tabled, under pressure to replace that amendment, is better than nothing, but it does not go anywhere near as far as the amendment they wish to strike out. The main difference essentially concerns the code of conduct. Lords amendment 41 states specifically that the

“licensing regime must…apply to all approved persons exercising controlled functions, regardless of financial sector;…specify minimum thresholds of competence including integrity, professional qualifications, continuous professional development and adherence to a recognised code of conduct and revised Banking Standards Rules”.

That is important, given that the Government’s position does not call specifically for a code of conduct. In some ways, their regime legislates for the commission’s recommendations, but by failing specifically to legislate for an open and transparent code of conduct, they risk failing to address some of the ethical issues surrounding so-called casino banking. Their more permissive amendment does not focus specifically on a code of conduct.

Several other hon. Members wish to speak, so I shall conclude with some brief comments about remuneration. As hon. Members might be aware, the Opposition have given considerable thought to the regulation of bankers’ remuneration, and there remain certain issues that the Government must consider before the general public can have confidence in the industry. The public find it difficult to understand, and have concerns about, the culture of high risk, high reward that was evident in the previous system and which contributed to the crisis.

[Mr Love]

Does the banking industry not make it more difficult for the public to understand, given that, even in these difficult times, it has gone back to the massive bonus culture we have all been complaining about?

[Cathy Jamieson]

Once again, my hon. Friend is absolutely correct. The general public expected the industry to show some humility and make every effort not only to repay the taxpayer, where appropriate, but to reflect on its actions, perhaps take the view that this culture was now outdated and move on and operate differently.

The general public’s concern will not be alleviated by the latest list of scandals. We have had LIBOR, EURIBOR, PPI—payment protection insurance—forex, yen LIBOR—the list seems to go on and on. Almost every day, every week, every month, something else is being put into the public domain. We have recently heard concerns about lending from RBS, with businesses having gone into administration. It is right and proper, of course, that these issues are investigated. We continue to talk about these issues, but however much we will things to change, people are concerned that if the bankers do not accept that their culture has to change, we will just continue to talk and put legislation in place, but without the messages having got through. I believe that the general public are particularly concerned about that.

As I said, we believe that the amendment unsuccessfully launched in the other place should remain in the Bill. I am disappointed that the Government have chosen to disagree with it and want to strike it out. I do not expect the Minister to change his view at this stage. I am sure he will revert to the position held in Committee, which was to disagree with us on this matter.

[Mr Tyrie]

Before addressing the amendments in the group, I would like to say a few words—this is the only and last opportunity to do so—about the work of the Parliamentary Commission on Banking Standards. The task that Parliament set it was

“to consider and report on: professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting process”

and on

“lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy…and to make recommendations for legislative and other actions.”

That was a very large canvas. The backdrop was a profound collapse of trust in parts of the banking sector—triggered by, among other things, deep lapses in banking standards.

We should bear it in mind, however, that the banks were only partly responsible for all these problems, and that the commission’s proposals represent only part of the solution. On the first point, responsibility for the problem also lies with regulators, central banks, Governments, auditors, risk-rating agencies and consumers, both retail and wholesale, who over-borrowed. They all need to take their share of the responsibility.

On the second point—finding the solutions—the Banking Commission’s proposals need to be set alongside both reforms to the regulatory structure, such as the creation of the Prudential Regulatory Authority and the Financial Conduct Authority after the abolition of the Financial Services Authority, and the structural reform of the banks, as proposed by Sir John Vickers.

I doubt whether the Government or the man who led the regulatory changes, Sir John Vickers—or indeed any member of the Banking Commission—thinks that, even taking together all the proposals we have put forward, we can solve everything. In any case, many on the commission were sceptical about the extent to which culture can be changed by legislation—a point made from the Front Bench earlier this afternoon. Legislation can, however, play an important role by incentivising good behaviour and penalising bad. Nevertheless, we concluded that, if fully implemented, our proposals should put us in a better place to protect taxpayers and the country from systemic risk and to protect consumers from lapses in standards.

As the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) said a few moments ago, there will continue to be regulatory failures, so only with the exercise of judgment and a good deal of vigilance are even these proposals likely to make a big difference in the long run. Our job today is narrower—to complete the task of making sure that those responsible for exercising that vigilance have the statutory tools to do the job.

13:45

The Banking Commission made a number of far-reaching proposals. It has been a massive collaborative effort for and by Parliament and parliamentarians. I would particularly like to thank all the commissioners for their hard work, determination and ideas, without which virtually nothing could have been achieved. I see that two of the five Commons commissioners are in their places with us this afternoon. I would like to thank, too, the staff: the Clerks, those seconded from other work and the specialist advisers, all of whom worked long hours to deliver five reports in under a year. With respect to this specific legislation, I would like to thank our legal team—both former parliamentary counsel—for their professional help over the past few weeks.

A measure of the scale of what we are trying to scrutinise this afternoon is the fact that the Bill went to the House of Lords 35 pages long but has come back to us with an extra 170 pages. I do not think that does much for parliamentary scrutiny of legislation—however important, necessary and urgent it might be. Is it so urgent that we could not have found more time for it?

It was clear on Report that the Government’s commitment to implement our proposals was, frankly, somewhat lukewarm. Our first report was cherry-picked, and of the two other reports that had made recommendations, one, on proprietary trading, was ignored, and the other, the final report, received only a partial commitment for implementation. So I am delighted to report that there has recently been a dramatic change of heart from the Government. Over the past few weeks, this Bill has been transformed.

[Cathy Jamieson]

The hon. Gentleman mentioned proprietary trading. Is he now satisfied that the Government’s recent actions take account of all the commission’s recommendations?

[Mr Tyrie]

Broadly, yes. Given that I am already stretching things a little in my opening remarks, I will try to deal with prop trading at the most appropriate parts of my speech—but the short answer is, as I say, broadly yes.

The commissioners met yesterday to discuss progress. We believe that the Government have converted the lion’s share of the Banking Commission’s recommendations into statutory action, where required. It is worth listing what has changed. The following amendments have been made to the Bill in order to implement our recommendations: electrification of the ring fence has been considerably improved since Commons Report stage; an independent review of the ring fence, which can consider the full separation of the banking industry, has been introduced; the Banking Commission’s recommendations on prop trading, which we just discussed, have, for the most part, been implemented; the proposals for the senior managers regime have been improved; a certification or licensing regime has been added to the Bill; a proper definition of a bank—the Bill’s definition was defective when it left this place, and it was a major lacuna—has been added to the Bill; the PRA has acquired a competition objective to complement that of the FCA; and audit requirements have been tightened for systemically important firms.

Furthermore, a good number of undertakings and assurances have been given in response to specific recommendations. Most importantly perhaps, the bank will almost certainly be given the Financial Policy Committee responsibility for the leverage ratio, and the Government have said that they will legislate to that effect after a review. We would otherwise have had to wait until 2017-18 to have that considered.

[Mr Love]

Will the hon. Gentleman give way?

[Mr Tyrie]

I give way to my fellow commissioner.

[Mr Love]

How long does the hon. Gentleman think the handing of control over the leverage ratio to the Bank of England will take? Time is moving on, and we need to get there sooner rather than later.

[Mr Tyrie]

I have pressed the Bank of England on that issue with my Treasury Select Committee hat on. A subsequent exchange of letters between the Governor and the Chancellor makes it pretty clear that by the end of next year the issue will be resolved and responsibility will lie with the Bank. Indeed, I think that for anything else to happen, given that exchange of letters, would be considered extraordinary, unless the review came up with some major obstacle that no one had previously spotted.

Another important assurance has been given in respect of so-called special measures. We proposed the establishment of an intermediate tool between enforcement at one end of the spectrum and day-to-day supervision at the other, which regulators could use to keep an eye on banks and help to improve standards. The Americans have something of the kind, which is known as a memorandum of understanding. The Government said that the statutory underpinning that we proposed would not be necessary, but the regulators have now announced that they will produce a full and detailed guidance note after consultation, which will set out how the new tool will be created and administered.

[Emily Thornberry]

I am listening with great interest to the hon. Gentleman. As he may know, the United States operates a regime called the deferred prosecution agreement, under which an institution accepts that it has committed an offence and agrees to pay a large fine on the understanding that it will not be prosecuted. Part of the deal is that the institution must allow auditors in, and must change its behaviour. Is there a similarity between the DPA structure and the structure the hon. Gentleman is describing?

[Mr Tyrie]

In some cases, the “deal”, as the hon. Lady called it, is accompanied by a memorandum of understanding, in order to achieve exactly the result that we intend by means of special measures. However, the primary purpose of special measures is to provide a tool that need not lead to escalation and full enforcement. That is a step back from the example given by the hon. Lady.

We were also assured that there would be a review of the system of enforcement decision making, which is currently very unsatisfactory. We had proposed that the regulatory decisions committee should be separated further from the enforcement division of the Financial Conduct Authority and given statutory autonomy in relation to its decisions. The Government did not accept that proposal, but they did accept the need for the issue to be re-examined and the need for a fresh and independent pair of eyes to look at each enforcement action before it proceeds, and a review is now to be carried out.

The important issue of remuneration was raised, later in her remarks, by the hon. Member for Kilmarnock and Loudoun. The PRA has committed itself to aligning the maturity of the rewards for bankers with the maturity of the risks that they have incurred. That is crucial. It is the collecting and taking of bonuses in return for the creation and selling of a new financial instrument or tool when, although the full risks will not mature for many years, the individuals concerned have had the money in advance that has created so many misaligned incentives and so much poor behaviour. Those individuals need to know, even several years later, that there may be a clawback, or, better still in most cases, that their bonuses are deferred. They need to know that the product had better be robust enough to survive the test of time before they start selling it.

Let me now mention a few measures that the commission did not succeed in inserting in the Bill. I shall not describe any of them in detail—although I note that when I have tried to deal briefly with the measures that I have described so far, Members have intervened to ask me about a number of them.

Both the Select Committee and the commission concluded that the governance of the Bank of England was still in a mess, and would have to be sorted out. The Bank of England still has no board worthy of the name, and the cross-cutting lines of responsibility and accountability between various new institutions are, to put it mildly, very confused. One of the most senior people in the Bank told me recently that he thought the situation was like the Schleswig-Holstein question: the former Governor probably understood it, and one other guy had forgotten it—and the third was this person himself, whose name I had better not reveal on the Floor of the House.

We also failed to achieve change with our proposal to abolish United Kingdom Financial Investments Ltd. UKFI has been exposed as a fig leaf: it seems to be of very little practical use. The Labour Government’s intention in introducing it was good, but when the Government want to intervene directly in the activities of institutions they simply do so, and UKFI does not seem to be performing the “buffer” function that was intended for it.

We argued that the regulator should have a duty to compensate whistleblowers who had been disadvantaged by their firms. There are still risks, at least perceived risks, for whistleblowers, which will tend to deter them. It is a remarkable feature of the current crisis that there has been so little whistleblowing, and I am not yet convinced that we have managed to sort the matter out.

[Cathy Jamieson]

Will the hon. Gentleman give way?

[Mr Tyrie]

I will give way again, but I do want to get on to the amendments.

[Cathy Jamieson]

I thank the hon. Gentleman for his generosity. The question of whistleblowers was raised in a Labour amendment in Committee. Does the hon. Gentleman think that the Government must return to it in the future?

[Mr Tyrie]

I think that, in the first instance, it is the job of regulators to advise us—we shall see whether they do—and that it is the job of Parliament to keep an eye on the position. The Treasury Committee will need to be vigilant.

We failed to secure the abolition of the strategic objective of the FCA, although we see no logical reason why it should remain. It seems to serve as a licence to allow the FCA to do whatever it wants, and to override its own operational objectives. We also failed to secure a statutory duty for the Governor to raise the issue of excessive lobbying by banks. It is regrettable that there is to be no statutory duty to require the production of a second set of accounts designed to identify systemic risks in the balance sheets of banks, and we will ask regulators to return to that issue.

Nevertheless, if everything is taken into account, it is clear that the commissioners in the House of Lords won the argument, and secured the lion’s share of the measures proposed by the commission. Although the group has been depleted by the loss of Baroness Kramer to the Government, the remaining four have worked assiduously and very persuasively to improve the Bill, and, on behalf of the commissioners in the House of Commons, I thank them heartily. Let me also record my appreciation of the constructive way in which Treasury Ministers have engaged with me, and with other commissioners, on these subjects in recent weeks. They have been extremely helpful, as have their officials, and that has enabled us to make rapid progress. What is more, and equally important, the Government have made clear their support for a number of measures—some of which I have mentioned—that it will be the duty of regulators to implement. As I have said, the work of the regulators, and the supervision of it, will be at least as important as the statute itself

That brings me to the statute itself, and to the amendments that are before us. The first major change that is proposed is the introduction of a senior managers regime. One of the commission’s central objectives was to make a reality of individual responsibility, particularly at senior levels. I lost count of the number of witnesses from failed institutions who were not prepared to take personal responsibility for what was going on in their firms. In principle this should have been the task of the approved persons regime, but it was a disaster. It failed both at ensuring that competent people were appointed and at checking up on their subsequent performance.

The commission concluded that the APR was a complex and confused mess that did not perform any of its supposed roles adequately. It had become little more than a bureaucratic, box-ticking exercise. Its unsuitability has been illustrated by the fact that it seemed to pass the recently departed chairman of the Co-op bank as fit and proper to run a bank. Another indication of its irrelevance was the fact that most of those responsible for steering our major banks on to the rocks over the past five years were not even reassessed for their suitability after those banks had failed. The APR gave us the worst of all worlds: the appearance of regulatory oversight and the reality of none.

14:00

An essential task, therefore, has to be the abolition of the APR. To replace it, we recommended a much more judgment-based and proactive supervisory approach for the most senior people in banks, a much smaller group than under the APR regime. Specific responsibilities should be allocated to named individuals at the very top of firms. Secondly, for the much wider group of all those whose behaviour could seriously harm a bank, its reputation or its customers, we proposed a licensing system that in the legislation is now called certification. I shall return to that.

On the senior persons regime, both the Government and the regulators accepted our proposals for the most part, but for reasons beyond everybody they have not accepted the name. Instead they have replaced the phrase “senior persons” with “senior managers”. I think that is guaranteed to confuse because some at the top of banks who clearly should qualify for supervision of this type will not be managing anybody. A non-executive chairman of a large bank does not have a management responsibility. For much of his time at Barclays, Bob Diamond did not have a direct management responsibility. This scheme should, therefore, have been called the senior persons regime. I have not heard any reason why it cannot be called that. That is a relatively minor nomenclature quibble, however, and we are otherwise delighted that the Government have accepted our proposals.

On certification or licensing, the picture has been somewhat different. Although the Government response to the commission initially promised to implement our recommendations on licensing, there was no sign of it in the Bill until Third Reading in the Lords. I am glad to say that that has now been put right.

The purpose of licensing, or certification, is to ensure that banks themselves have identified those employees—whether traders, senior salespersons, financial managers or whatever— who can do serious harm to the bank or to markets. One of the shocking discoveries of this crisis—including the LIBOR scandal—has been that in many cases the banks did not know who these people were. They certainly should. For them not to do so should constitute a regulatory breach. It should also be a breach to add staff to the certification regime who do not satisfy the harm test—to add staff who cannot do serious harm to an institution. That would defeat the purpose of certification.

It should be the responsibility of banks, using methods that best fit their organisation, to maintain a certification system, and it should be the responsibility of regulators—using periodic checks—to ensure that they do. Just to be clear, it should certainly not be the job of the regulators to try to identify all these staff themselves. That would guarantee the return of the very bureaucratic box-ticking that we want to leave behind with the abolition of the APR. Those in such jobs should know that their bank may withdraw their certificate, and therefore possibly their ability to earn a living performing that function, and inform the regulator, who may in turn inform other regulators in other jurisdictions, should there be misconduct. It can be a great opportunity for many young staff to sit in front of a computer screen and trade LIBOR and earn a considerable amount of money, but that opportunity should also carry with it responsibility. In many cases that sense of responsibility was found to be wholly lacking.

[Ian Swales]

As I expected, the hon. Gentleman is making an incredibly thoughtful and powerful speech. We have used the expression “culture change” a few times in the debate today and he talked a few minutes ago about failures causing serious harm to an organisation. Does he believe the banks now pay due regard to reputational harm as well as purely financial harm?

[Mr Tyrie]

I think the banks have discovered that the scale of the damage done by the revelations and the scale of the fines that are now being imposed are systemic in implication for their institutions and that has shaken them up a lot. But I do think the culture at the top of our banks is changing. The task of our legislation is to entrench that change for a generation. We have had this crisis. The horse has bolted. What we have got to do now is devise a stable door that can keep the next horse in.

[Emily Thornberry]

Will the hon. Gentleman give way?

[Mr Tyrie]

I will this one last time, but I get a sense that Members might want me to draw to a close in a minute.

[Emily Thornberry]

The hon. Gentleman mentions LIBOR. In respect in particular of fraud, does he agree that if an individual working within an institution is behaving dishonestly for the benefit of that institution, the institution itself should be liable? If the law were to be changed to allow that, there really would be institutional change.

[Mr Tyrie]

The fact that an individual is found responsible should not in any way exculpate the institution from its own responsibilities. On the other hand, a key recommendation of the Banking Commission was to restore individual responsibility. To return to a situation where it is primarily the institution that carries the can for what had been a series of individual pieces of bad behaviour would be a profound mistake. There is a lot behind the exchange we have just had that I am not going to go into now, but which we thought about quite deeply on the commission. I shall now move on as there are a few more remarks I want to make about this group of amendments.

Everyone now seems to be agreed that the APR adds little or nothing, yet over the past few weeks we have discovered that the discredited APR will survive in legislation. In doing that, the regulators are perpetuating a myth that the APR affords any real protection. It will continue to apply to several groups. First, about 20,000 people in the financial services industry outside banking will still be covered, mainly in fund management and insurance.

This is unfinished business. The Banking Commission had the remit to look only at banking. It would be absurd to retain a system for one part of financial services that has so clearly failed in another. The Government and Parliament both need to encourage the regulator to look at this and do what is necessary to extend the coverage of the new regime and to remove the APR from other parts of financial services. To rely on the APR is asking for trouble.

It is also regrettable that the APR will remain in a few isolated pockets within the banking industry. This is because the APR will continue to apply to firms’ LIBOR submitters and to persons with anti-money laundering responsibilities in banks. This amounts, I gather, to only a few dozen people, but I think it would be far better if we removed what amounts to “triple running”. We will have three layers: the senior persons regime, now called the senior managers regime, licensing, now called certification, and the APR in the case of these people. The extra APR layer confers no extra protection, but adds bureaucracy and creates a business cost. There will be plenty of scope for legal wrangling in the event of a regulatory failure, given the great scope for confusion, and for an equal measure of recrimination by regulators who will say they were asked to do too much by Parliament. Banks will have a point when they complain about that. For all those reasons, I hope that the Government will come back to this issue and remove the APR from banking entirely in due course.

The Banking Commission’s proposals do not guarantee better standards. Much will depend on the judgment of regulators and the common sense of the banks, but identifying responsibility for key roles offers a much better prospect of higher standards than does retaining the APR. The commissioners are delighted that our proposals on this are now going to be put on the statute book.

[Mr Speaker]

The hon. Gentleman’s speech is characterised, as always, by a combination of scholarship and erudition. May I just inquire whether we are now nearer to the end of his speech than to the beginning?

[Mr Tyrie]

I can give you a firm assurance, Mr Speaker, that I am coming very close to the end of my remarks. Indeed, I am no closer than I would have been before that intervention, unless I had been told to sit down, because I really am almost at the end.

I just want to say a word about the Opposition amendment before I sit down. It draws on a number of the Banking Commission’s proposals and, by seeking to put it on the face of the Bill, the Opposition have contributed something by forcing the Government to think again about their rejection of our proposals on licensing. The amendment was therefore probably worth while. However, the Government have now thought again and are implementing our proposals.

There are two aspects of Lords amendment 41 that would make me cautious about supporting it. The first is it would require regulators to pre-approve all people covered by licensing—or what is now going to be called certification. I fear that would risk recreating many of the problems we had with the APR—the box-ticking bureaucratic culture that we are trying to get rid of.

My other concern with the amendment is that it appears to mix up licensing with the professionalisation of the banking industry. It would be imprudent to link professionalisation to licensing too closely. Licensing needs to happen now. Professionalisation is not a substitute for it. Even if banking is something that could acquire the characteristics of a profession—which many people are not yet convinced of—it would, as the commission reported, take a generation to build that sense of a professional standard.

For those reasons, although I strongly sympathise with the intent of the Opposition amendment, it is not a Banking Commission proposal and I shall not be supporting it. The House could do better by implementing the commission’s proposals, which are now embodied in Government amendments.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I should explain to the House that I have exercised some latitude so that the hon. Member for Chichester (Mr Tyrie) could offer a bit of background on the parliamentary investigation. I did that because I thought that it would be genuinely helpful to the House and because there would be no other opportunity for those observations to be made. That said, I would not want it to be thought that that will be the normal rubric on these occasions. The normal rule of thumb, which must continue to apply, is that Members should attend to and focus their remarks exclusively on the amendments and should not engage in what might be called a wider dilation. I hope that that is helpful to the House.

[Yasmin Qureshi (Bolton South East) (Lab)]

I will bear in mind your observations, Mr Speaker, but I hope you will indulge me if I occasionally say something a bit different. I will of course spend most of my time on the amendment.

I want to set the matter in context. I volunteered to serve on the Bill Committee. I am told that it is traditional for Members to have to be nudged into serving on Committees for Finance Bills, unless of course they are Ministers or shadow Ministers. I wanted to serve on the Committee perhaps because I am a bit geeky or because I am interested in esoteric things; perhaps it is because of my legal background that I am interested in these matters.

I also had a more serious reason for volunteering. We need to bear in mind that this country’s economy relies heavily on the financial services industry, and that a massive banking and financial crisis occurred in 2008, not only in the UK but in similar economies around the world. We know that the crisis started as a result of the collapse of Lehman Brothers and of the sub-prime mortgage market in the United States, which led to the collapse of many banks around the world. Economies like ours—in the USA, Japan, France and Germany, for example—suffered as well.

14:15

It is important to consider these matters in that context, because they inevitably get caught up in the political debate. This Government have often stated that the financial crisis was caused by the Labour party. Indeed, the Minister said earlier that one of the reasons for the crisis was that the Labour Government had not put in place enough rules and regulations. I think it might be helpful if I remind him what his current boss and the Prime Minister have said about those rules and regulations in the past. I refer him to Hansard of 27 November 2006, when the right hon. Member for Tatton (Mr Osborne) said of the then Chancellor:

“In an age of greater choice, he offers more overbearing control; in an age of greater freedom, he gives us more interference…in an age of flexibility”.—[Official Report, 27 November 2006; Vol. 453, c. 835.]

The right hon. Gentleman also said in 2006:

“I fear that much of this regulation has been burdensome, complex and makes cross-border market penetration more difficult.”

The right hon. Member for Witney (Mr Cameron) said in 2008:

“As a free-marketeer by conviction, it will not surprise you to hear me say that a significant part of Labour’s economic failure has been the excessive bureaucratic interventionism of the past decade…too much regulation…to little understanding of what our businesses need”.

The Minister and other members of his Government often say that it was a lack of regulation by the Labour Government that caused the mess, but they need to realise that the Labour Government were trying to regulate at that time and that the then Opposition, who should have been supporting them, were carping from the sides and saying, “No, don’t do this.” A little trip down memory lane might be helpful for everyone concerned.

I chose to serve on the Committee, and I have chosen to contribute to the debate today because the financial collapse, the LIBOR scandal and other events have shown that the financial sector—an important part of our economy—has not got things right over the years. I will not go into the details of every aspect of the Bill, but my party has been pressing for various changes. The amendment that we won in the House of Lords covers the regulation of people employed in the financial services sector, and I would argue that there is a need for licensing. I am proud of the fact that those on my Front Bench are insisting that the amendment should be accepted and I ask the Government to reconsider their view.

I am a barrister, and I am subject to regulation. I have to have a licence to practise law, as do solicitors. Members of other professions also require a licence to practise, including doctors, dentists and chartered accountants. They are all regulated by independent bodies that oversee cases of misdemeanour or negligence. Why should bankers not be subject to the same rules and regulations? After all, stockbrokers and people who work in commodities and bonds are experts in their field; they are not just pulled in off the street and told to start commodity trading, banking or whatever. They have had professional training and learned their trade.

The Financial Conduct Authority covers every aspect of the financial services sector, so what is wrong with asking for a licensing system? What is wrong with asking these people to take a professional exam? What is wrong with requesting that they should be regulated properly? If they commit an error—negligence, criminality and so on—why should they not be dealt with appropriately? Why should they not have a licence to practise? We have to re-emphasise how big a part of the United Kingdom’s trading is done by the financial sector. Given that, it is surprising that there has been no regulation of the people carrying out that trading. The Government are missing a big trick if they fail to regulate, because this is important. I do not see why people in this sector should be given a exemption. In all other professional walks of life, people are regulated. We could regulate properly and have it supervised by an independent body.

It is not enough just for a company to say, “You are fit to work.” That is just not right. We must have an outside, independent body—somebody removed from the institution—to say whether someone is a fit and proper person, and if they do something wrong they should be struck off. What is wrong with that? As a lawyer, I can be struck off if I make a mistake. Doctors, too, can be struck off, so why cannot bankers? Policemen can be struck off, and other people may be told to leave their job or are struck off and prevented from practising their profession, so why not bankers? Labour’s proposal is perfectly sensible and logical; it would be the right amendment to make.

The hon. Member for Chichester (Mr Tyrie), Chairman of the Treasury Committee, said that this Bill started off 35 pages long and now runs to some 180 pages, after some 192 amendments. That shows that the Government were not thinking things through properly when they were putting the Bill together. One expects some amendments as a Bill passes through both Houses and one expects the number of pages to increase, but the fact that the Bill has increased in size by more than 100 pages shows that it was not thought out properly and things have been happening as we have gone along. Again, that demonstrates that although the Government have done some things, they have failed to address one really important aspect of the whole thing: the regulation of the behaviour of the people involved.

It was individuals, not machines, making the decisions that caused the whole world to collapse, and the ordinary person in the street in my constituency is suffering as a result of the mess caused by a small group of people. We cannot let that happen again, so it is important that the people making these decisions—the people playing with our money—and the organisations they work for are held accountable and need to explain themselves. Proper training, and a proper certification system and licensing system, are a must for our economy.

[Ian Swales]

I will keep my remarks relatively brief. Neither of the two major parties has too much to crow about in this area, because the regulatory system is a product of both their Governments over time. However, at least this is one area where the Leader of the Opposition and the shadow Chancellor have said sorry for something they have left behind.

I am pleased with the work done by the Banking Commission, and I pay tribute to my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and my colleague Baroness Kramer for the work they have done on it. I am delighted that the Government have, perhaps kicking and screaming, at last agreed to adopt the vast majority of the proposals. I am particularly delighted that the Bill puts in place powerful measures on ring-fencing, as the Liberal Democrats have been arguing for that for years. Not only was it in our 2010 manifesto, but it was on the front page, so I am pleased to see it happening.

The background to this is clear: taxpayers should not be held to ransom by these giant organisations, particularly for high-risk activities—casino banking, as it is sometimes called. We must also remember that a lot of these institutions are highly international, so the UK taxpayer is having to stand behind organisations that have a lot of activities overseas—that, too, does not seem right. So it is good that all these measures are being introduced.

We have seen banks that used to be on the side of customers, both individuals and businesses, increasingly behave very much on the side only of themselves. We have seen scandals involving payment protection insurance, LIBOR, foreign exchange and interest rate swaps, which is the one I particularly wish to highlight. I made a speech on that a few weeks ago in this House. I said that the banks appeared to be moving at a tortoise-like pace when we were not having debates and suddenly acted like hares for a few days when we did have them. I can report that they have become tortoises again since that debate a few weeks ago. Constituents of mine who were expecting repayments in very quick time are still waiting, so I hope the Minister will keep the pressure on, although that is not strictly relevant to today’s debate. We have also seen the Co-op bank scandal and predatory activity by banks in the corporate restructuring area—that is the current scandal and I am sure we have a lot more to hear about it.

The Government have been acting on matters such as transaction levies, and making sure that fines for institutions leave the industry and do not just go around in a magic circle. The current round of fines is being used to help pay for the military covenant, which has to be a great idea. The Secretary of State for Business, Innovation and Skills, my right hon. Friend the Member for Twickenham (Vince Cable) is trying, although it is sometimes a lonely furrow, to do something about high pay: shareholders are being given binding votes on their company’s pay policy; companies are being forced to publish single figures for executive deals; and companies are being encouraged to inject more diversity by hiring non-executives from a broader pool of academics, public servants and lawyers. So, to a limited extent, the Government are trying to do something about that.

I particularly wish to discuss Lords amendment 41, which deals with professional standards. A joke doing the rounds when the banking crash happened named the four chairs of the big banks and asked which of them and Terry Wogan had a banking qualification. Of course, the answer is Terry Wogan and none of the others. That illustrates that for too long we have had under-qualified people in important positions. The hon. Member for Bolton South East (Yasmin Qureshi), who is not in her place, was talking about the legal, medical, pharmaceutical and accountancy professions, which have professional standards of the type she would like to see. However, it is important to note that those standards are not set and regulated in this place; they are set by the professions themselves, which have a huge vested interest in ensuring their own high reputation. Those professions also carry out much more specific and autonomous work in terms of knowing whether an individual has transgressed or not. It is much more difficult in large organisations with long decisions chains to say who is actually responsible for each individual activity. However, I urge the banking profession to think a lot more about how it can enhance its reputation, which, let us face it, is pretty much at rock bottom at the moment. It should think, “How can we have professional standards which are enforced? How can we ensure that people are kept up to date with continuing professional development and that people will be struck off?” However, that is increasingly a role for professional bodies such as the Chartered Banker Institute to be thinking about; it is not something for legislation in this place.

I welcome the work of the Banking Commission and the Government’s response to it. I welcome the extra powers that regulators are going to have as a result of this legislation, but the onus is on them to use those powers. I would like the Minister to say, at some point during today’s debate, how we are going to scrutinise the regulators to make sure that they use their new powers to their full extent.

[Emily Thornberry]

It has been said that one of the great innovations of this Bill is the introduction of the offence of reckless banking. It is not beyond our imagination to think that in 2015 the measure will be promoted on many a doorstep by people who perhaps do not fully understand what it is that is being introduced. It is one of those proposed offences that promises a great deal, but delivers very little indeed. There is nothing like it in existence in English law, and I will go on to explain why that is in a moment.

14:30

In the House of Lords, Lord Newby said that

“we had to put in the Bill a form of words that would create a credible offence that could be successfully prosecuted. The two requirements that an individual’s conduct had to fall far below what could reasonably be expected of them and that they were aware of the risk they were taking”.—[Official Report, House of Lords, 15 October 2013; Vol. 748, c. 427.]

There are many people, myself included, who believe that this is not a credible offence and that it will not be successfully prosecuted. When passing law in this place, especially potential criminal charges, we should be confident that the offence created has a reasonable chance of being prosecuted. If people are doing wrong in the City of London, we should be passing criminal offences that people are afraid of and that they believe they might be charged with. Passing legislation for the sake of gesture is a slippery slope, and we should be careful about it.

[Mr Tyrie]

The question the hon. Lady should ask herself is that if she were a banker, would she be prepared to take the risk?

[Emily Thornberry]

There are other things that can be done, and I shall briefly touch on some of them. May I begin with the difficulties that exist in relation to this offence? Under the Bill, it would be an offence for a senior manager recklessly to take a decision. I appreciate that some of the additional 175 pages that have been added to the 35-page Bill have been to backfill exactly what a senior manager is and how they will be defined. That is clearly an improvement, and it is unfortunate that it was even suggested that the Bill would be sufficient in its original form. One must remember that even if a definition of senior manager is now one with which we can all be happy, there have been banks that have been brought down by people other than senior managers. Nick Leeson from Barings bank comes to mind, as does the £2 billion that was lost to UBS by Kweku Adoboli.

[Mark Garnier]

I am fascinated that the hon. Lady chooses to use Nick Leeson as an example, because he went to jail, in Singapore, for four years.

[Emily Thornberry]

The point is that he was not a senior manager and he brought down a bank. This measure will not solve the problem of banks being brought down. An offence of reckless banking that will apply only to senior managers is not by itself sufficient, which is why I want to go on to say what I think should be done instead.

[Mr Tyrie]

I think the hon. Lady is misunderstanding the intentions of each bit of legislative change. The primary purpose of this measure is to change bankers’ behaviour. It is not primarily to protect banks from being brought down. That task lies with ring-fencing and a range of other proposals, particularly with all the structures being constructed around bail-in and resolution. It does not lie with the criminal offence.

[Emily Thornberry]

With respect, I am even more confused than before. What is the point of bringing in an offence that will change the behaviour of bankers, but will not, by itself, defend the banks? As I understand it, if the behaviour that we seek to stop is reckless banking, the reason that it should be criminalised is in order to stop banks failing and the financial system crashing.

There are other difficulties with this offence, which include recklessly to take a decision or to fail to prevent the taking of a decision that results in the failure of a bank. That sets a high threshold and, as has already been pointed out, it is not clear who, of those who may have behaved in a reckless way in our banks and who may have brought down the banking system before, would have been prosecuted. The Minister has not been able to assist us as to who might have been prosecuted under the offence. [Interruption.] It is unfortunate that the Minister is distracted at the moment, but the point I am making is important, and I hope that he will be in a position to address it.

It is difficult to prove that aspect of the offence, and prosecuting it would be a risky undertaking for the prosecuting authorities who will be expected to invest public money in prosecuting such matters. There is no point in putting something in legislation that can be discussed on doorsteps but will never be used to prosecute. We have seen the Serious Fraud Office struggle with high-profile, high-risk prosecutions. Too often such prosecutions end in shambles because of the behaviour of the Government, which have cut the SFO’s funding from £53 million in 2008 to £30 million by the end of this Parliament. Differences can be made to the behaviour not only of banks but of businesses generally. May I just add that of course I support Labour’s position on a stringent licensing regime for bankers, the imposition of a fiduciary duty of care on financial-sector staff for clients and customers and its call for a dedicated financial crime unit. In a moment, I will move on to what will work better, but before I do that, I give way.

[Guy Opperman (Hexham) (Con)]

Let me take the hon. Lady back to her last point on prosecutions. I speak as a former prosecutor of serious fraud work, although not for the SFO. Either there is the 51% test of prima facie evidence at the start of the case, or there is not. How the case then ends up, once the matter has been examined by a jury, is a matter for a jury and occasionally a judge. She is being a little harsh on the SFO, which is doing a fantastic job under very difficult circumstances.

[Emily Thornberry]

I am more than happy to put it on the record that I am a critical friend of the Serious Fraud Office. Sometimes the emphasis is more on the word critical, especially after what we have seen in the newspapers today, with the crash of yet another serious fraud case because the SFO asked an agent, which clearly had a conflict of duty, to do its investigation. That is yet another mistake that the SFO has made. If we want the SFO to turn a corner, we need to do more than show good will. This Bill provided us with an opportunity to change things. It is unfortunate that more attention was not paid to changing corporate liability.

I listened carefully to what the hon. Member for Chichester (Mr Tyrie) said in his contribution, and I undertake to send him, as a Christmas present, Labour’s policy paper in relation to fraud. If we can change corporate liability to ensure that if an individual within an organisation behaves in a way that is dishonest and to the advantage of the larger organisation, we can prosecute the organisation, unless it can show, in the same way that it can under the Bribery Act 2010, that it has in place controls over its staff, it would have an impact on our banking system. If I may say so respectfully, introducing such legislation will have a greater impact than the measures proposed in this Bill. If we were to introduce a different form of corporate liability, we could increase the fines hugely, and that money could be ploughed back into the Serious Fraud Office. Then we would have an organisation of which people in the City of London would be afraid. They would be prepared in most circumstances to come to an agreement with the SFO to have a deferred prosecution agreement.

DPAs will not ever exist under the status quo. The DPA legislation has been passed but, as I understand it, no one has come forward to say that their company has been doing wrong, that they want to admit that, that they will pay a fine, that they will change their ways, that they want auditors to come and see how they are behaving and that they will point out the individuals who have been behaving in a criminal way. I respectfully submit that that is how to change the culture. That is how we ought to be working and I look forward to discussing it with the hon. Member for Chichester once he has read the Christmas present I intend to send him. If elected in 2015, Labour intends to introduce its own economic crime Act, and I hope that we will take the issues further and develop them. Obviously, I would be interested to hear the hon. Gentleman’s reactions.

[Mark Garnier]

I intend to talk principally about Lords amendment 41, but before I do so let me echo the comments made by the Chairman of the Parliamentary Commission on Banking Standards, my hon. Friend the Member for Chichester (Mr Tyrie), at the beginning of the debate. He said that he was grateful to the Government for moving such a long way along the road towards the commission’s recommendations. That is a tribute to the organisation that he chaired extraordinarily well for about 18 months and that came up with such sound proposals. It was a great honour for me to be part of that process. It also says a huge amount for the Government that they have taken great heed of what the commission said and have moved a great deal further towards implementing the proposals.

On Lords amendment 41, I suspect that there is not too much of a difference of opinion in the House about what we are trying to achieve through the Bill—that is, a change in the culture of banks. I take slight issue with the hon. Member for Islington South and Finsbury (Emily Thornberry), because it is not just about preventing banks from collapsing. It is about getting better standards and better service for consumers. Many constituents will complain about their treatment by banks and that has nothing to do with criminal matters; it is simply about the culture and how certain people address other people in their everyday lives. We want to drive that out and to ensure that the banking culture is one of which we can be proud and which consumers can trust enormously.

[Mr Love]

Is the hon. Gentleman not disappointed that, since 2007, when there has been such a focus on the problems and difficulties of banking, no greater progress has been made in creating the type of culture we all want to see?

[Mark Garnier]

I do not necessarily agree. I speak not only as a Member of Parliament, a member of the Parliamentary Commission on Banking Standards and a member of the Treasury Committee but as a former investment banker and investment manager. My hon. Friend the Financial Secretary is also a former banker, so to a certain extent we have a private interest in ensuring that banking standards are greater than they have been. There has, however, been an enormous amount of progress. We have a new regulatory regime, there have been a number of changes in the banks and we have seen a complete change of culture at the top of many of the banks. Things are moving in the right direction but it will take a long time and this Bill is part of that process.

Although we are all trying to achieve the same thing, the important question is how we will achieve it and who, ultimately, we should ask to ensure that the licensing regime is upheld and looked after. The Parliamentary Commission on Banking Standards was perfectly clear that we felt that the approved person regime was complete and utter nonsense. One of the Bank of England’s greatest thinkers, Andy Haldane, highlighted why that was the case: if regulation is devolved to a regulator, all that happens is that the individuals at the head of the banks think that they have nothing to worry about. It becomes the regulator’s problem to worry about such things, and not that of those individuals.

When we met a number of the banks—particularly UBS, the Union Bank of Switzerland, the senior directors of which appeared in front of us just after it had been fingered for its share in the LIBOR scandal—we discovered that there was an incentive to be ignorant of what was going on within them. The senior managers of UBS who were running the bank when the LIBOR scandal happened within their organisation knew nothing about it until they read about it in the Financial Times three or four weeks before our hearing. That gave rise to the accusation that there was an accountability firewall between the management of the banks and the individuals working on the front line—that is, those at the coal face on the dealing room floors and servicing our consumers.

We were trying to work out how on earth we could reach a system in which those at the top of the bank took accountability for the work and standards of the individuals in the lower part of the bank. That is crucial in leading me to support the Government in rejecting amendment 41: it does not deal with that accountability but rather gets around the problem. That is why it fails to hit the nail on the head.

14:45

The people running the banks must at some point wake up at 3 o’clock in the morning in a muck sweat worrying that some decision or lack of decision that afternoon or that year will result in a serious problem in the organisation. If they think that the regulator will take responsibility, they will not take that personal interest. That is crucial.

Over the three years for which I have been a member of the Treasury Committee, and particularly over the past year for which I have been a member of the Parliamentary Commission on Banking Standards, I have had the opportunity to meet a great number of senior bankers. Most have come on to the scene since the crisis and, in some cases, since I have been elected, and I am convinced of the sincerity of their desire to do the right thing in those organisations. They genuinely want change. They see reputational risk as a commodity that affects them and want to do something about it.

To that end, the banks have got together and employed the wisdom of Sir Richard Lambert, who is looking into setting up a professional standards body for the banks. The banks will run it, pay for it, finance it, ensure that it works and put it in place. We have some good thinkers working on that and it is symptomatic of the fact that the banks want to change their culture.

An organisation such as HSBC has 270,000 people working for it, so no matter how sincere the integrity of the individual at the top, we must work out a mechanism to drive integrity throughout the system. Personal accountability for the senior management of the banks is crucial in that. I keep coming back to this point: if Douglas Flint is waking up at 3 o’clock in the morning worrying that somebody in Kidderminster is getting something wrong, that is a good thing.

[Stewart Hosie (Dundee East) (SNP)]

The personal responsibility argument is extremely strong and powerful, but does not the hon. Gentleman see some merit in the fact that Lords amendment 41 talks about a code of conduct? Is not the code of conduct described in the amendment a mechanism that could be used to drive the change in culture throughout the organisation that he describes?

[Mark Garnier]

I agree entirely. A number of professional bodies in the banking industry have a code of conduct. I, for example, am a fellow of the Chartered Institute for Securities and Investment, which has a code of conduct. Many people working in investment banks will be fellows of the CISI. Indeed, Sir Richard Lambert’s proposals, about which we shall hear more in the new year, will include a code of conduct. It is also worth bearing in mind that the banks are producing their own code of conduct that is being fed back to the regulator, which will consider what they are saying.

Let me wind up, because I think the Minister would like to speak at some point. I would be the last person to stand in his way, because I know that he will have some intelligent things to say. Suffice it to say that I think amendment 41 will prevent the behavioural changes we desire, and that is why I will reject it.

[Sajid Javid]

I thank the shadow Minister, the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), for her comments and all other—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. With the leave of the House, Minister.

[Sajid Javid]

Thank you, Madam Deputy Speaker. With the leave of the House, I thank the shadow Minister for her comments and all other Members who contributed to the debate. In particular, I thank my hon. Friend the Member for Chichester (Mr Tyrie) for the work that he has done in this area, especially in chairing the Parliamentary Commission on Banking Standards. I have listened to all hon. Members with great interest over the past couple of hours, but in particular to my hon. Friend. I thank him for all his efforts and also for his supportive comments, which I take as broad support for the Government’s amendments.

In the time available, I shall deal quickly with some of the key issues that came up. The shadow Minister raised the issue of timing and her understanding that there was not enough time to scrutinise the Bill and the amendments. She will know that the Bill started with the recommendations of the Independent Commission on Banking, which were scrutinised extensively in the House and in the other place, including the recommendations of the PCBS. The Government produced their response as quickly as they reasonably could to the PCBS, which was in July, in advance of the Commons Report stage so that it could inform debate as soon as possible.

The shadow Minister also asked why the Government resisted Opposition suggestions on improving professional standards. Again, she will know that because the PCBS had been set up and had been asked specifically to look into this area, the right thing to do was to listen to the commission and take its views into account when drafting amendments, before anything was settled upon. She asked about minimum standards and competence. She is right to do so, as we all recognise the importance of those. It is worth pointing out that, because of Government amendments that were introduced, banks will be required to check all new applicants to ensure that they are fit and proper, and not just at the point that they start with the bank; annual checks will have to take place and regulators will have important powers to specify any qualifications that they believe are required for the job.

A number of hon. Members raised the issue of a code of conduct. The regulators, both the Financial Conduct Authority and the Prudential Regulation Authority, will have broad powers, including the ability to set up a code of conduct for banks in general or for a particular bank, as they see fit. These are the kind of powers that regulators can use in future. My hon. Friend the Member for Redcar (Ian Swales) asked how we could scrutinise regulators. He is not in his place, but he will know that an annual report produced by the regulators about how they discharge their functions will be provided to Parliament, where it can be given proper scrutiny.

There was a discussion about remuneration. Hon. Members will know that the PCBS made recommendations on remuneration which the Government have accepted, particularly on longer deferrals and clawbacks, including a full clawback if a bank ends up receiving state aid. I understand that the PRA will make further recommendations on that next year.

I have time only to touch on Lords amendment 41 which, as I said, the Government oppose. It is worth taking into account the comments of my hon. Friends the Members for Chichester and for Wyre Forest (Mark Garnier) that, although the amendment is well intended, it will lead us back to a box-ticking culture and confuse regulation and professional standards. Both are necessary, but it would be wrong to conflate these—

14:53

Two hours having elapsed since the commencement of proceedings on consideration of Lords amendments, the debate was interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House disagrees with Lords amendment 41.

14:53

Division 157

Ayes: 299

---

Conservative: 249
Liberal Democrat: 42
Democratic Unionist Party: 5
Independent: 2

Noes: 222

---

Labour: 214
Scottish National Party: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Green Party: 1

Lords amendment 41 disagreed to.

After Clause 12

regulation of payment systems

[Sajid Javid]

I beg to move, That this House agrees with Lords amendment 63.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Lords amendments 64 to 154.

Lords amendment 155, and amendments (a) and (b) thereto.

Lords amendments 156, 161 to 163, 169 to 172, 175 to 180 and 182 to 184.

[Sajid Javid]

The second group of amendments introduce substantial changes that will ensure that consumers get a fair deal. They will drive up competition and improve outcomes for consumers. Amendments 63 to 134 introduce a new competition-focused, utility-style regulator as a separate legal entity established under the FCA.

The Government have concerns about the payment systems market, with particular problems in three main areas: competition, innovation and responsiveness to consumer needs. Under the current arrangements, there is nothing holding big banks, payment scheme companies and infrastructure providers to account for consumers. The regulator will therefore have strong powers and objectives: to ensure that the operation of payment systems promotes fair and open competition in banking; to promote innovation in payment systems, for the benefit of consumers; and to support the interests of end users.

The regulator will have bespoke objectives and powers to address problems particular to the market for payment systems, allowing for the benefits of close co-ordination with the FCA. Once a payment system is brought into scope, the regulator will have powers over the system’s operators, infrastructure providers and providers of payment services using the system.

The payment system regulator will be equipped with a broad range of regulatory powers, enabling it to address the significant issues causing problems in the market for payment systems. To open up access and encourage greater competition, the regulator will be able to intervene and require changes to any anti-competitive fees or terms and conditions of an agreement for access to regulated systems. It will have powers to require the provision of access to payment systems. The regulator will also have competition powers exercisable concurrently with the Competition and Markets Authority.

My hon. Friend the Member for South Northamptonshire (Andrea Leadsom), who is in her place, will be pleased to know that the regulator will examine the case for full account number portability within 12 months of its establishment—although, with the successful seven-day switching service, which was launched by banks in September, hon. Members should know that they do not have to wait until then if they want to switch their account quickly.

[Ian Swales]

With regard to account number portability, is the Minister concerned that in the period between now and spring 2015, when the regulator will come into force, work might slow down, rather than speed up, because of the unpredictability of the regulator?

[Sajid Javid]

I have listened to my hon. Friend carefully, and others have made that point previously, but I do not share those concerns. I think that the regulator will move on that swiftly. The changes that have so far been made to payments, such as the switching service, are already making a real difference.

Ultimately, if the payments system regulator determines that the current ownership structures need to be broken up to achieve adequate competition, it will have the power to require disposals of interests in operators of the regulated systems. It will also have the power to enforce Competition Act 1998 prohibitions against anti-competitive agreements and abuse of dominance and to make market investigation references to the Competition and Markets Authority.

The amendments create a competition-focused regulator in this key market.

[David Mowat (Warrington South) (Con)]

I very much welcome the role that the payments regulator will have. For the avoidance of doubt, though, can the Minister confirm that part of its scope will be credit interchange fees and that it will have a role in potentially regulating their level over time?

[Sajid Javid]

Yes, I can confirm that. Although it remains for the regulator, once set up, to deem the regulated systems, we envisage that that will be part of its scope. My hon. Friend will know that the issue is being considered right now through a proposed European Union initiative. We would expect the regulator to take that into account as well.

[Cathy Jamieson]

What analysis have the Government undertaken of the impact of designating card payment systems for regulation? If the system will not come in until spring 2015, is there not a genuine danger of blight in terms of planning the way forward?

[Sajid Javid]

Before we made the final decision to create the regulator, a full consultation was carried out. We received input into that consultation from many stakeholders, and that formed part of the analysis of how the regulator could carry out its function, as well as the importance of having such a regulator. We expect not only that the regulator will be fully up and running in around 2015, but that once the Bill receives Royal Assent the FCA will begin the process of setting it up early next year. The FCA has resources that can be called on, and it has already started working on exactly how the regulator would operate, so I think that it will be able to start at least some of its work sooner than 2015.

Amendments 135 to 152 establish a special administration regime to be known as the financial market infrastructure, or FMI, administration. Inter-bank payment and settlement systems are integral to the efficient operation of the financial system, processing transactions worth hundreds of billions of pounds a day. Currently, if such a system becomes insolvent, it will typically enter the normal administration procedure and the administrator will be under a duty to look after the interests of the company’s creditors without regard to the implications for the wider UK economy. In those circumstances, the continued operation of crucial payment and settlement services could be threatened, which could have a significant adverse impact on the market and the wider economy. The amendments will ensure the continuity of crucial service provision of recognised inter-bank payment systems and security settlement systems in a time of crisis by imposing a duty on an FMI administrator to maintain the company’s crucial services during administration.

The key features of FMI administration are: the FMI administrator is placed under a duty to maintain the company’s crucial services during the period of FMI administration; the Bank of England is given the ability to apply to the court to place a relevant company into FMI administration and has conferred on it a power of direction over the FMI administrator; powers are granted allowing for the property, rights and liabilities of the relevant company to be transferred; and restrictions are established on early termination of contracts for the supply of certain goods and services to a company that has entered FMI administration.

15:15

I now turn to payday lending—a subject about which many Members in all parts of the House rightly feel very strongly. The Government are deeply concerned about consumer detriment in the payday market and committed to taking action to protect borrowers from the harm that these lenders can cause. I know that this concern and commitment to act is shared and supported by Members in all parts of the House. This Government have already taken decisive action to overhaul regulation on the payday lending sector, with the Financial Conduct Authority taking on its broad new powers in relation to consumer credit from April next year.

However, the Government will do more. We want to put an end to the unfair costs of borrowing from payday lenders and to prevent the spiralling costs faced by those struggling to repay.

[Yasmin Qureshi]

We welcome the change, but it will not start until January 2015. Our amendment (a) says that it should start from October 2014, because people spend the most, and often build up the most debt, in the period up until Christmas. Therefore, what is the harm in bringing the date forward by three months?

[Sajid Javid]

If the hon. Lady will allow me, I will answer her questions when I consider the amendment she mentions.

There is a growing evidence base, including lessons from other countries, that a cap on costs is the right way forward for consumers. That is why the Government tabled an amendment in the other place to require the FCA to impose a cap on the cost of high-cost credit and short-term loans—not just an interest rate cap but a cap on all fees and charges, including default charges and roll-overs.

[Bob Stewart (Beckenham) (Con)]

Does my hon. Friend have any idea what level of cap there might be on such charges?

[Sajid Javid]

My hon. Friend asks a reasonable question that I am sure many Members would be concerned about. The cap should be set by the FCA at a level designed to protect consumers. I hope that when I go on to talk about the process, that will give him a bit more definition regarding his concerns.

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

I do not really understand what the Minister says about a cap protecting consumers. Before we had these payday lenders who get so much opprobrium, the alternative was very often door-to-door loan sharks who would break your legs if you did not pay them back. The great feature of the payday lenders is that they do not do that. What assurance can he give that any caps we impose will not force people back into the hands of unscrupulous and illegal lenders instead of the payday lenders, who at least work within the law?

[Sajid Javid]

My hon. Friend raises a good point. A number of charity groups involved in the debt advisory sector share those concerns. However, most of them agree, especially in the light of emerging evidence from other countries such as Australia and from certain parts of the United States, that it is possible, if researched properly, to set a cap at a level that can protect consumers but at the same time prevent extortionate costs. That will be the job of the FCA when it looks at the matter, and I know that it will take it very seriously.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Following on from the previous question, surely the Minister agrees that we can do better than offer people a choice between having their legs broken and interest rates of several thousand per cent. Government Ministers accepted that logic in their recent announcement about an interest rate cap. Surely it is possible to bring in a system that gives some measure of protection to the consumer without driving them into the arms of illegal loan sharks.

[Sajid Javid]

I agree with the right hon. Gentleman that it is certainly possible to have a better system than the current one. There will be a number of changes, including the moves towards a cap and the change of regulator from the Office of Fair Trading to the FCA, which set out in October some of its planned measures with regard to continuous payment authorities, roll-overs, advertising and affordability. Those are all part of a package that will help to protect consumers in the sector.

[Sir Edward Leigh (Gainsborough) (Con)]

I am sorry to say this to the Minister, but he has not replied to the point made by my hon. Friend the Member for Beverley and Holderness (Mr Stuart). Of course, the Government can do what they like—they can set a cap—but the Minister must respond to the point that the Government cannot legislate against sin. The fact is that people are desperately hard up. If we legislate or put a cap on one thing, the evil moves to another, almost worse practice. The Minister must make some effort, in the real world, to answer my hon. Friend’s point.

[Sajid Javid]

If my hon. Friend will allow me, I will, as I move on, provide more information on that particular point.

[Mr Love]

I thank the Minister for giving way so liberally on this issue. He mentioned the FCA’s role not just in setting the cap, but in other critical arrangements, such as roll-over, continuous payment authorities and proper administration of the high-cost credit sector. Does he think that that goes far enough? If we are going to get this sector right, many organisations think that the consumer needs more protection.

[Sajid Javid]

The measures that the FCA has already suggested, and on which it is currently consulting, go a long way to protect consumers in this sector. Of course, the FCA has broad powers in this area and there is nothing to prevent it from considering future measures as it learns more about aspects of the market. For example, the hon. Gentleman may know that the Competition Commission is currently looking into this sector. It is due to report back with its preliminary findings next May and a final report around November. It will look at the sector for about 18 months in total. I am sure that the FCA will take that into account and see what further measures it could take, if necessary, with the broad set of powers it already has. I hope that is of some reassurance to the hon. Gentleman.

Designing the cap on the cost of credit is a job not for the Government but for the independent and expert regulator. Nor is it right that the detail of a cap should be enshrined in primary legislation, given that the industry it is intended to bind is so fast-moving and innovative.

Lords amendment 155 makes clear the FCA’s overarching objective in this endeavour: it must make rules to impose a cap to protect consumers from excessive charges imposed by high-cost, short-term lenders. This language echoes the FCA’s consumer protection objective. The FCA must make rules to advance one or more of its operational objectives, namely consumer protection, market integrity and competition. That applies to the rules to implement the cap, just as it does to all FCA rule-making. The FCA’s competition duty also applies. It must consider how the rules affect the ability of the market to serve consumers’ interests.

As we have heard, introducing a cap is not without risks or potential adverse consequences, including reducing access to credit for some individuals who find themselves in financial difficulty. The FCA will not be able to eliminate those risks, but it will seek to manage them. It will be important that the FCA strikes the right balance in designing and setting the cap.

[Stephen Doughty]

Given that the Government have moved belatedly on this issue—I hope it will make a big difference, notwithstanding the risks mentioned—will the Minister pay tribute to organisations such as Sharkstoppers and Movement for Change and the many community activists around the country who have highlighted the dangers posed by the payday loan industry, which is getting people into thousands of pounds’ worth of debt? The Government have listened to those voices, so will the Minister pay tribute to them?

[Sajid Javid]

I assure the hon. Gentleman that we as a Government have spoken to many stakeholders, including hon. Members, on this issue. Many people have done a good job and deserve credit for looking at the evidence in more detail.

[Yasmin Qureshi]

rose—

[Sajid Javid]

I will take this as a final intervention, because I need to plough on in the interests of time.

[Yasmin Qureshi]

I thank the Minister for giving way; it will not take long. Following the point made by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), will the Minister also congratulate my hon. Friend the Member for Walthamstow (Stella Creasy), who has played a great part in raising and campaigning on the issue?

[Sajid Javid]

I will. The hon. Member for Walthamstow, my hon. Friend the Member for Worcester (Mr Walker) and many other Members have shown great concern in this area and have made a welcome contribution to the debate.

[Nigel Mills (Amber Valley) (Con)]

Will the Minister give way?

[Sajid Javid]

I will give way for the last time.

[Nigel Mills]

I am grateful to the Minister for giving way one very last time. I am not sure that I agree with him that it is not for Parliament to decide roughly where the cap should sit, because if we set it too high it will be meaningless and if we set it too low we will drive too many people out of the loan market. What will the Minister do if the FCA pitches the cap in a different place from where the Government think it ought to be? Would he want to come back to Parliament to take another look at the situation?

[Sajid Javid]

I thank my hon. Friend for his intervention. I think that the FCA, acting independently and looking at the evidence, is the right organisation to set the cap. I do not think that politicians setting the cap would be as productive; actually, it could be counter-productive.

I now turn to the cost-benefit analysis that the FCA will have to conduct, which I think will help reassure Members that it will approach the task in the proper way. The amendment specifically requires that the FCA must consult the Treasury before it publishes and consults on any draft rules. To reflect the importance of keeping the rules current and effective, the FCA must report, each year in its annual report, on any rules it makes under its capping powers.

Finally, it is worth spending a moment on the issue of defining payday lending in primary legislation. Putting a narrow definition in primary legislation could lead to unintended consequences. Lenders may just try to circumvent the definition. The amendment therefore allows the FCA to specify precisely which types of high-cost, short-term loans are captured when it makes its rules to effect the cap.

Amendment (a) to Lords amendment 155, which was tabled by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), relates to data sharing. I am grateful to her for raising that important issue and the Government fully agree that urgent action is necessary to tackle it. The whole system needs to improve to support responsible lending. Lenders must make proper assessments of an individual’s ability to repay before they lend, based on accurate, timely and comprehensive information on their outstanding loans.

The FCA plans to put strict requirements on firms to undertake affordability assessments to ensure that a borrower can afford to make sustainable repayments. The FCA is not stopping there. It has warned the industry that it must improve the way in which data sharing works, including how quickly lending data are made available. The chief executive of the FCA, Martin Wheatley, has made a commitment to me today in writing that if the industry fails to improve, the regulator

“will not hesitate to act”.

The Government wholeheartedly endorse the message to the industry that the FCA will act if it does not respond quickly enough. This matter is a priority for the FCA. It is committed to improving the way in which data are shared and lending decisions made.

I therefore believe that amendment (a), although well intended, is not necessary. I hope that on the basis of those reassurances, the hon. Member for Kilmarnock and Loudoun will not feel the need to press it.

The hon. Lady also tabled amendment (b) to Lords amendment 155, which relates to the timetable. The Government want the cap to be in place as soon as possible. That is why we are taking this opportunity to introduce legislation that requires the FCA to impose a cap on costs. The FCA will then be able to get on with implementation without delay. Let us be clear that the Lords amendment provides a statutory backstop date for implementation. The cap must be in place by 2 January 2015. If the FCA can deliver it sooner, it will. However, it must not rush and risk getting the wrong result for consumers.

15:30

I will share with the House what Martin Wheatley told me today. I understand that he has published the letter on the FCA website. He wrote that

“it is very important that we are clear with you on the practical implications of any further shortening in the timetable, the principal one being that we believe it is impossible to have as strong a cap based on a shorter deadline. This cannot be the intended outcome from a consumer protection standpoint”.

I believe that the hon. Member for Kilmarnock and Loudoun has received a copy of that letter. I received it only just before I stood up to speak at the Dispatch Box.

I hope that Members from all parts of the House agree that a compromised outcome for consumers would not be the right result. The FCA’s current timetable for implementing the cap is ambitious, but deliverable. Crucially, it enables the FCA to draw on the findings of the Competition Commission’s current investigation of the market, which I referred to earlier. It is vital that the FCA can benefit from the Competition Commission’s insight into the market when designing the cap.

The FCA is already getting on with gathering the evidence and detailed analysis that it needs. It will consult in the spring on its draft proposals, at around the same time as the Competition Commission is due to publish its provisional findings. Consultation will take place over the summer and the FCA plans to make the rules in the autumn of next year. Again, that is likely to be at about the same time as the Competition Commission issues its final report. The cap will come into effect, at the latest, by the beginning of January 2015.

[Stephen Doughty]

Notwithstanding the points that the Minister is making, many consumers and campaigners on this issue will be concerned about what he has said about the time scale. The Government have dragged their heels on this issue for a number of years and could have taken action well before the date that has been set. I would like to see a cap before this Christmas. I agree with other hon. Members that it is crucial that the cap is in place before next Christmas. One of the campaigners from Swansea whom I met, a woman called Serai, got into more than £1,000-worth of debt with one of these lenders after taking out a very small loan to help pay for her kids’ Christmas presents. This is a crucial point, so I hope that the Minister will give a little more hope to the many campaigners who would like to see the cap introduced before next Christmas.

[Sajid Javid]

I will say a little more about the timetable in a moment, but it is a bit unfair of the hon. Gentleman to say that the Government have had years to introduce the cap, when the Government whom he supported had 13 years to introduce a cap and did nothing.

A number of steps must be taken before the cap can be implemented. All of those steps are important and if they are rushed, it will put consumer protection at risk for the sake of speed. There must first be evidence gathering and analysis. That is critical in getting the cap right. The FCA will draw on the evidence that the Competition Commission has collected. It might also have to get information from lenders and others in the market to get on with its work as quickly as possible. Yesterday, the Government laid secondary legislation before Parliament that will allow the FCA to seek information from the industry. That will support the design of the cap and the cost-benefit analysis that the FCA must issue.

The second and most vital part of the process is the consultation with interested parties on the proposals and their impact, as set out in the cost-benefit analysis. The final component that is necessary for the successful implementation of the cap is that lenders must be given a short period in which to update their systems and processes to meet the new requirements and become responsible, compliant lenders. Difficult though that is, we are not prepared to compromise on the process because that could lead to poor outcomes for consumers.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

rose—

[Sajid Javid]

I need to plough on; I am sorry.

I thank the hon. Member for Kilmarnock and Loudoun for giving me the opportunity to set out the FCA’s plans for implementation. I hope that has provided reassurance that the FCA is committed to taking action as soon as possible, and that she will feel able to withdraw her amendment.

In summary, the Government believe that a cap on the cost of payday loans is necessary better to protect consumers from excessive spiralling costs, working alongside regulatory interventions that the FCA is already proposing to clamp down on the causes of consumer harm in the payday lending market.

Amendments 162 and 163 will provide significant benefit to consumers and financial services businesses that have been affected by poor practice in the claims management industry. Claims management companies have a legitimate role in helping consumers claim compensation, but a minority have acted irresponsibly. Despite the threat of suspension or cancellation of authorisation, some CMCs act speculatively and submit illegitimate claims that clog up the system and ultimately impose costs and delays on consumers. The amendments will give the claims management regulator power to impose financial penalties on CMCs that are guilty of misconduct.

The Government’s amendments provide a new form of redress—including financial compensation for consumers affected by a poor service from CMCs—by introducing a mechanism for the cost of handling complaints to be recouped from the industry. Together, the amendments will help ensure that the claims management industry acts more responsibly, and where it does not the regulator and Office for Legal Complaints can take action.

The Government agree with Lords amendments 153 and 154 that provide the PRA with a secondary competition objective and the FCA with competition powers that are exercisable concurrently with the Competition and Markets Authority. The Government are committed to improving competition in our banking sector to drive up consumer outcomes. A secondary competition objective for the PRA was recommended by the PCBS, and the Government accepted it. That objective will ensure that the PRA remains above all the watchdog for financial stability, but we will require it to play a more proactive role on competition.

[Nigel Mills]

If the Minister had had the pleasure of sitting on the Bill Committee, he would know that I tabled an amendment to suggest we cap the market share that banks could have in certain markets. What will he do if, perhaps by 2020, we have not seen a great increase in competition and still have too few banks with too high a market share? Does he think further action by Parliament would be needed?

[Sajid Javid]

My hon. Friend will know that the Government have introduced many initiatives to increase competition in the banking sector. Just today we heard that Tesco Bank will enter the current account market next year, creating hundreds of jobs in Scotland. That is welcome news, and other innovations such as current account switching also help to engender more competition. I do not think any of us know what the situation might look like in the future, but I am sure a future Government will take that into account in 2020, and beyond, and see whether any further measures are required.

[Mr Tyrie]

The Treasury Committee and the Banking Commission are extremely grateful that the lion’s share of the proposals on competition have been implemented. We think that will be a step forward, and the Treasury Committee has been pretty active in that field for more than three years. As I alluded to earlier, one recommendation has not been acted on by the Government, and I would be grateful if the Minister explained why. Perhaps it can be best summarised in this way: what additional benefit is conferred by the FCA’s strategic objective that is not provided for through the operational objectives of the FCA?

[Sajid Javid]

My hon. Friend will know that the FCA currently has an objective to promote competition, and I know that he supports that. The Government have accepted the recommendation from the commission to give this secondary objective to the PRA, so those two objectives for the key regulators—the FCA and the PRA—will make a difference. If my hon. Friend has some further suggestions for the future, I will certainly take a closer look at them.

The FCA’s consumer panel, which represents the interests of consumers, is well placed to communicate its views to the PRA, and in the other place the Opposition have called for a role for the FCA’s consumer panel. Following constructive debates in the other place, I am pleased that the Government have been able to include amendment 156, which delivers the Government’s commitment to ensure that the FCA’s consumer panel can provide its views to the PRA effectively. This was warmly welcomed on both sides in the other place and by the chair of the consumer panel.

The amendments will simplify day-to-day operations for building societies, other banks and all the other entities that I have mentioned. They will enable banks and other institutions to compete on a more level playing field and improve things as suggested in the Bill and by the commission and others. I commend them to the House.

[Cathy Jamieson]

I will develop my arguments in a moment, but I give notice that at the appropriate stage we will seek to divide the House on both of the amendments that we have tabled in this group.

I shall start with the payments system regulator, because I was somewhat surprised by the number of representations on the Bill from the industry, even at this late stage, including on the payments system regulator. The Minister has responded to interventions on that point, but I hope that, when he has the opportunity to respond later, he will address some of the questions raised by the industry, such as the concerns expressed by VocaLink. Although it has said that it is broadly supportive of the regulator and welcomes the change in the Government’s position, it is none the less very keen to ensure that there is no planning blight—a gap between the point at which the legislation becomes law and the time at which the system would be fully operational.

We have also had representations from other sectors of the industry, including Visa and MasterCard, on the need for a level playing field and ensuring appropriate and clear definitions of which payment systems come under the regulator, taking into account the broad range of players that facilitate payments for consumers and businesses. Further representations have been made about the need to look in detail at the whole system and the challenges of establishing the PSR, creating the right skill set and ensuring that it operates correctly. The work load of the regulator will also need to be taken into account as part of its remit.

The Minister said that he believed that the FCA had the resources to ensure that the system will be set up on time and will make progress as planned. I contrast that to the approach on payday lending, and I shall move on now to considering that issue.

At the outset, I must say that we welcome the Government’s U-turn on the issue of capping the costs of the controversial payday loans. [Interruption.] I hear the hon. Member for Braintree (Mr Newmark) saying that that was not a U-turn. I gently remind him that the Government have repeatedly refused demands to deal with legal loan sharks. They now appear to have been dragged, kicking and screaming to their current position as a result of pressure from Labour and countless other campaigners, including many of my hon. Friends in the Chamber today who will no doubt wish to speak.

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Cathy Jamieson]

Let us remember that, during the passage of the first Financial Services Bill, Labour tabled amendments to give powers to the FCA to cap the cost of credit. Perhaps the hon. Gentleman will explain why the Government opposed them.

15:49

[Mr Newmark]

I am sure we all agree that the abuse of payday lending is a scourge, and has been a scourge for many years, on our constituents’ lives. The hon. Lady seems to have a form of selective amnesia. Perhaps she can explain to the House why, during 13 years in power, Labour did absolutely nothing to deal with this pernicious form of payday lending.

[Cathy Jamieson]

I had hoped that the hon. Gentleman would explain why the Government opposed Labour’s amendments. I will come on to talk about the explosion of the payday sector, particularly in the past couple of years on this Government’s watch. [Interruption.] It is no good the hon. Gentleman shaking his head and saying, “Oh come on.” We have the opportunity now to tighten up legislation. That is what I wish to do.

[Stephen Doughty]

I apologise for omitting to mention my membership of the national committee of Movement for Change, which has been campaigning on this issue, Madam Deputy Speaker.

Does my hon. Friend share my surprise at the continual chuntering from the Government Benches? As she rightly says, there has been an explosion in the past few years on this Government’s watch, and they have been dragged, kicking and screaming to this point. I have seen an explosion of these stores on high streets across Cardiff, and an explosion in cases of people who have got into trouble with payday lenders.

[Cathy Jamieson]

My hon. Friend makes valuable points, which I will come on to address.

The Government opposed the proposals initially, but eventually gave in and passed their own amendments in the other place. The FCA has so far failed to use its powers to introduce a cap. There were concerns that unless pressure was applied it would not necessarily have been able to speed up new powers, and we could have seen a further delay in real-time monitoring across the high-cost loan sector. That is why, some months ago, the Leader of the Opposition promised to introduce a cap. He also suggested an extension to a levy on payday lenders’ profits, which would be used to double the level of Government funding for alternative low-cost providers, such as credit unions, for those struggling with the cost of living crisis.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am sure my hon. Friend agrees that, had there been an agreement earlier, some of the people still waiting for protection that will not appear until early 2015 would be protected by now. I share the view of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that the sector’s visible expansion in recent years is remarkable. In many years of living in my city, I have never before seen such proliferation of this kind of lending, let alone the advertising on television.

[Cathy Jamieson]

My hon. Friend makes a valid point. Members in all parties will have seen the sector’s expansion on their high streets. I do not normally refer to the Daily Mail, but it published an article on the increase in payday loan advertising, which is a concern. I am cautious about the process of normalisation, particularly children and young people seeing these businesses on our high streets and in advertising.

We must remember the extent of the problem of payday lenders charging interest rates of up to 4,000%, for example, on temporary loans taken out by desperate families who often have nowhere else to turn. Someone commented earlier that so-called legal loan sharks did not break the legs of those who borrowed from them like illegal loan sharks perhaps would, but we have to understand that the many desperate families who turn to these services to borrow, sometimes for the basic necessities of life, often end up broken in different ways.

Up to 5 million families plan to borrow money from payday lenders in the next six months; as we have heard, between 2009 and 2012 the market more than doubled to about £2.2 billion; more than one third of those who take out a payday loan do so to pay household bills, such as gas and electricity; 1.5 million households spend more than 30% of their income on unsecured credit repayments; and personal debt is expected to rise to 175% of household income by 2015—that is the concern about what is happening to families in the real world.

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

I am sure the shadow Minister watched the recent item on “Newsnight” on this issue with great interest. One of the major issues now is that those who take out these payday loans damage their credit rating and then cannot access mortgages down the line. Is that not an issue we must challenge, if we do not want to store up major troubles?

[Cathy Jamieson]

That is an important issue that ought to give us more food for thought. In certain circumstances, families might need to borrow on a short-term basis and be perfectly able to pay it back on time without it causing them long-term damage, but they would want to know, before taking out such a loan, that it could damage their credit rating.

I want to return to those who perhaps suffer most from the payday lending sector. Despite changing their tune and bowing to pressure from the Opposition and campaigners at the sharp end, the Government have not gone far enough to protect hard-working families from falling into unmanageable debt. That is why, even at this late stage, we have tabled our amendments. On the first, which relates to data sharing, I am sure the Minister will be aware of the concerns set out by StepChange Debt Charity about how the FCA’s proposed responsible lending rules fail to make payday lenders use real-time credit data in their loan decision making. It says that evidence from its clients suggests that payday lenders often use out-of-date credit data and therefore fail to pick up on whether borrowers have existing payday loans. Understandably, it then makes the point that lenders cannot be sure they are lending responsibly.

As we have heard repeatedly, multiple payday loans from different lenders are a major cause of debt problems. Two thirds of StepChange clients reporting financial difficulties with payday loans have been granted overlapping payday loans from different lenders. It also argues that the regulator’s responsible lending rules transpose Office of Fair Trading guidance into binding rules but continue to allow payday lenders to make loans without using that up-to-date information about borrowers’ existing financial commitments. That is obviously causing particularly severe problems for those who get into difficulty with multiple payday loans.

We should listen to what StepChange tells us about the growing problem of people being lent one unaffordable loan after another as they struggle to pay off the loans falling due. It tells us that more than 30,000 people contacted it for help with payday loans in the first six months of 2013—almost double the figure for the previous year. The average amount owed on payday loans by its clients has risen to more than £1,600, creating severe financial difficulties for those clients. In some circumstances, even a whole month’s income would not cover the repayments. It also tells us that a typical client with payday loans now has three payday loan debts and that one in five have five or more with different lenders.

Therefore, it is clear that different payday lenders granting overlapping loans is a major cause of payday debt dependency and that current procedures are not working. It is thus sensible for the FCA to require payday lenders to make use of up-to-date credit information on a borrower’s short-term commitments when they decide whether to issue or extend a loan. Payday lenders have long claimed to be working towards a system of sharing credit data in real time. They have been talking about it for more than two years, but there has been no solution.

[John Woodcock]

My hon. Friend is making a very good speech. We have heard the Minister say at the Dispatch Box that the Government are now committed to tackling this issue, whether belatedly or not. This is such a good opportunity to show that we can all be as one in the House and to take action where there is still clearly a problem, as she is so amply setting out.

[Cathy Jamieson]

I thank my hon. Friend for his kind words about my comments. I am simply putting forward the views brought to us by the people at the sharp end who have experienced the worst problems from payday lending. I pay tribute to those people again for doing so. I agree that it would be wonderful if we could secure some further consensus on these problems and send a clear message to the industry, particularly on advertising. The advertising spend of the top five payday lending brands apparently stands at about £36 million a year. That seems to suggest that they are investing heavily in attracting new borrowers at the same time as being not quite as willing to invest in responsible lending.

[Stephen Doughty]

My hon. Friend has made an important point about the amount of money such companies are investing in advertising. Many Members will have noted how much investment those companies are putting into advertising in football. Fans are targeted, which I think is particularly heinous, and a number of organisations have campaigned against that. Does she agree that football clubs should resist that type of advertising, which will put their supporters into great debt?

[Cathy Jamieson]

My hon. Friend tempts me to talk about football, which is one of my favourite topics. I will resist that temptation, except to say that I share his concerns about that.

Returning to our amendments and what the industry could do, I understand that there are differences of opinion about how best to tackle the problem. As we have seen, however, technology is available. The Veritech software is, I understand, used in 14 states in the US. Arguably, lenders would have the resources to bring that in if they wanted to. If lenders will not do something voluntarily, surely it will make sense to require them to do that, because in the meantime consumers are falling into debt. The Government should therefore act as soon as they possibly can.

Interestingly, we have heard that this issue is not just about the impact on consumers. The 118 118 company has told us that it believes the introduction of data sharing would enhance levels of competition, arguing:

“It is probable that if real time data was available, and lenders could be more confident in their lending decisions, many more of them would be attracted to this market segment. We would hope and expect that the FCA would be very cognisant of this point in view of its explicit competition objective”.

That is an interesting view. Where lending is being done, we want to know that it is being done by reputable companies, backed up by the proper technology and proper principles.

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

My hon. Friend is making a fantastic case to show why real-time credit checking is so important in this industry. Does she agree that, in any other industry where money was being lent, the lenders would want to know about any other obligations that the people being lent to had. Is it not curious that this industry seems not to want to know what others are lending to their customers, and does this not reflect their irresponsible approach to their consumers?

[Cathy Jamieson]

My hon. Friend, who has campaigned for many years on this particular issue, makes a very good point again. It seems to me to make perfect sense for anyone who is lending money to want as much information as possible to ensure that the correct decision can be taken. Our amendment would mean that the FCA would have a duty to introduce a system for sharing credit data so that payday lenders could not continue to evade their responsible lending obligations.

[Mr Newmark]

Following the intervention by the hon. Member for Walthamstow (Stella Creasy), I have to say that, unfortunately, many normal credit card companies also do not carry out due diligence, and let individuals’ debts pile up.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) made a very good point, which was relevant to my beloved Newcastle football club. Unfortunately, Wonga is one of its major sponsors. Does the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) agree that there should be far greater restrictions on advertising, particularly advertising by payday lenders in parts of the country where many individuals are vulnerable to them?

16:00

[Cathy Jamieson]

I thank the hon. Gentleman, whose comments were slightly more supportive than I expected them to be. He made a good point about his beloved football club. I am sure that he agrees with what I said earlier about the amount that is spent on advertising, and the worrying way in which it is normalised by being associated with football clubs and similar organisations. That particularly affects children and young people, as well as perhaps those on lower incomes.

The Minister referred to the challenges that would be faced if amendment (b) were passed and the date of implementation were brought forward. I am well aware that Martin Wheatley of the FCA set out those challenges even before writing the letter from which the Minister quoted earlier. He said that the Minister was

“aware of the challenges that we face in bringing a price cap into force by January 2015.”

The Minister said in response:

“The Government is…committed to ensuring that you can access the information you need to design the cap. The Government will bring forward secondary legislation to allow you to collect information to support your new duty as soon as possible.”

I heard him say that those regulations have now been laid. However, this strikes us as a matter of political will. If he wants the price cap to be introduced, and if he is willing to make the necessary resources available, it seems reasonable for us to press the case for the introduction of the cap by October 2014 rather than January 2015, especially as that would help us to prevent even more families from falling into the clutches of the high-cost credit market this Christmas.

Will the Minister tell us what will be done to speed up the process of the secondary legislation to which he referred? He described January 2015 as a “backstop”, but it was not clear to me whether he genuinely believed that the cap could be introduced earlier, and I think it reasonable for us to press for that to happen.

The Minister will be aware that organisations such as Which?, while welcoming the introduction of a cap on the cost of credit, suggest that it should apply to all credit products. Members have already raised the issue of authorised and unauthorised overdrafts, which, according to research findings, are often just as expensive as payday loans. It has been reported that borrowing £100 for 31 days costs £30 with a Halifax authorised overdraft and £20 with some Santander accounts, and that borrowing the same amount for the same period from a payday loan company costs between £20 and £37. Some of the banks may not feel particularly comfortable about that comparison. An unauthorised overdraft is even more expensive. I am told that in the case of the Halifax reward account and the Santander everyday account, a £100 unauthorised overdraft can cost £100 in charges. I wonder whether the Minister has taken that into account during his discussions with the FCA.

[Ian Swales]

Is the hon. Lady aware that some of those charges apply even if the overdraft lasts for only a day, let alone a month?

[Cathy Jamieson]

The specific examples that I cited had been reported to me, but I understand that in many instances high charges are applied even if people slip into an unauthorised overdraft for a very short period.

Let me ask the Minister another question. In a letter to the Minister, Martin Wheatley said:

“In designing the cap we will, as far as possible, seek to minimise potential avoidance measures. It is possible for firms located in other EEA Member States to provide a payday lending service through the internet to UK consumers within the Electronic Commerce Directive. This is not something that the FCA can mitigate.”

What assessment has the Minister made of the extent of that problem, and what can be done to reduce that? As we take things forward, it will be important that we do not simply move people from one payday lending system on to something else that could be equally difficult.

I want to say a few words about the relationship between the banks and the payday lending sector, and to focus on the question of the banks lending to the payday lenders. During the consideration of the Bill in the other place, Lord Mitchell raised this issue, and his understanding was that Barclays lent Wonga over £250 million. When he investigated that further, he discovered that the sum was apparently much higher. He raised concerns about the mission and the guiding principles of the bank and asked whether lending money to the payday lenders so they can then lend it at higher rates to people who need loans is the right thing for the banks to be doing. That raises the question of what the banks’ responsibilities are to those on lower incomes, and also the issue of the banks’ relationships with the credit unions, for example.

I feel that we must press the amendments we have tabled to a Division. I hear what the Minister has said and I have heard the comments and concerns raised by the FCA about the timetable, but I think it is reasonable to press for this to be done as quickly as possible. The Minister has said that January 2015 is the backstop date—the latest point when it could happen. I think it is reasonable for us to bring that forward and to press the amendments on data sharing to a Division.

[Mr Tyrie]

On payday loans, I only want to make two very quick points. First, we need to be very careful that EU regulation does not drive a coach and horses through anything we might try to do domestically. I also want to reinforce the point that it is extremely important not to displace what we may disapprove of in the formal sector into the informal sector of very nasty loan shark practices. This will require a great deal of supervision and care.

[Stella Creasy]

Will the hon. Gentleman give way?

[Mr Tyrie]

If the hon. Lady will forgive me, I will not, because I promised the Chair that I will speak for only three minutes. The hon. Lady will have an opportunity to make her own speech in a moment, and she has been a doughty campaigner on this subject for some time.

I want to speak briefly about part 5 of the Bill, which is the part that creates the payments regulator. This implements a recommendation the Treasury Committee made two years ago. It is worth explaining the origins of our recommendations.

The Payments Council—which is dominated by the banks and other firms involved in the payments system—decided in 2011 to abolish the cheque, without providing any explanation of how it would provide an adequate replacement. That was a profound mistake, and the Committee decided to investigate. The justification for that decision looked pretty threadbare and the abolition also carried a considerable consumer detriment both for charities and for a lot of people who use cheques. I did 20 radio and TV interviews on this subject after the report was published. I asked each of the interviewers whether they had a chequebook; 19 of them said they did and they very much wanted to keep it. I think that brings home the value of cheques. This does not affect only the elderly; quite a large group of people want to keep some kind of paper-based transaction system for the time being.

Under pressure the Payments Council did a U-turn and cheques have been retained. The Treasury Committee also looked at how such a crass decision could have been taken in the first place. We concluded that the explanation lay with the structure of the Payments Council itself. Frankly, it has been little more than a poodle of the industry, and it certainly could not reasonably claim to act on behalf of consumers. A reasonable case can be made, however, that it is a monopoly controller of a crucial banking service. We recommended that that responsibility for the payments system be brought within the ambit of regulation, and we gave an outline of how that should be achieved. Amendments 63 to 134 would implement that central recommendation of our report. It is now up to Parliament to ensure that the FCA is much more responsive to the needs of consumers and competition, on this and a good number of other issues, than was its predecessor. I warmly welcome this part of the Bill.

[Yvonne Fovargue (Makerfield) (Lab)]

I regard payday lending as a new industry. We have heard talk about how Labour did nothing for 13 years, but in the 23 years I worked in a citizens advice bureau—I left in 2010—I did not see people with payday loans. I think we saw our first person with a payday loan in 2010. It was always the home credit industry that people came to us about. The payday loan industry—and, in particular, the way in which it targets its market—is a new thing.

I wish to speak to amendment 155, which relates to the importance of a high-cost payday lender reporting in real time to a third party. The industry is really keen to embrace new technology when it suits it to do so. It has phone apps, and it advertises on television and online. New technology is meat and drink to it. However, it is less keen to operate a real-time database. It has had two years in which to do so voluntarily, and it still cannot come to an agreement on it.

Part of the reason for that could be that the industry is not keen on guidance. A lot of our payday lenders have American ownership. When I was at a conference recently, I was harassed by some of those American owners asking me what the rules were. I started to explain the guidance, but they were not interested. They just wanted to know about the rules. If something is not written down, they do not want to do it. They do not want to be the first, or just one of a few, to do something. For that reason, this provision needs to be mandated.

The present reporting system, involving a period of 30 to 60 days, is completely inadequate for a short-term, high-cost loan. A constituent who came to see me recently had taken out 14 payday loans in a week. Yes, that was irresponsible borrowing. I could see that he had been desperate, but it was also irresponsible. The system allowed him to do it. Had the lenders had a real-time database when they agreed to those loans, we could have got them for irresponsible lending. Their excuse, however, was that they did not know how many loans he had already taken out. The lack of a database gives them an excuse to lend irresponsibly, without penalties.

We also need to consider the responsible customers who pay back their loans on time and for whom taking out a payday loan is a perfectly rational decision. Perhaps their fridge is broken and needs to be replaced urgently, and they are expecting some money at the end of the month. Taking out such a loan in those circumstances could be more sensible than going to a company such as BrightHouse. Those responsible customers get no credit for paying back on time, however, because there is no database and because it is not mandatory to report their repayment record. In fact, on occasions, they are penalised for taking out a payday loan. We need a system that will help people to build up a record of creditworthiness, to allow them to get into the mainstream credit market.

As we have heard from my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), the present system can deter new entrants to the market. Companies tell me that they would like to get into the market, and that there is a gap for providers of loans between £500 and £1,500 taken over six months to a year at an interest rate of around 30%. However, the business risk is too great, because there would be no way of knowing whether their customers already had payday loans and when they had taken them out. Entering such a market would add to their business risk, and they also worry that raising their rates would involve a degree of reputational risk.

The Government should look again at this matter and consider mandating the introduction of a real-time database and reporting to a third party. That is important if we are to protect customers and lenders. It is also important if we are to help people to move into a credit stream with lower interest rates, and to help new entrants to move into the market, which we all agree is vital.

16:15

[Andrea Leadsom (South Northamptonshire) (Con)]

I rise to congratulate the Minister on the excellent introduction of an independent payments regulator. I am amazed that this absolute game changer has not received more press attention, because our banking system still, on today of all days, faces the threat of being undermined in the eyes of consumers by its appalling behaviour. Today, Lloyds bank has been fined £28 million for its appalling treatment of retail customers—that is the biggest fine for retail misconduct ever. I stress that the reason for that, as the investigations by the Treasury Committee and the Parliamentary Commission on Banking Standards showed, is a profound lack of competition in the UK banking sector. Even worse, we even have the last great remaining closed shop, because the Payments Council regulates the banks, yet the banks own the Payments Council, and the banks both clear through and own the payments infrastructure. So there is no incentive to innovate and no self-regulation, and there is a deliberate suppression of competition. What the Minister has done by introducing an independent payments regulator is open that can of worms. The regulator will be a real game changer for the competitive outlook in the UK in future, and I wish to explain why that is.

The proposal is for the payments regulator to look at access to the payments system. As we know, the big clearing banks access the payments system directly, but challenger banks such as Virgin Money, Metro Bank and Aldermore have to go through an agency clearer. If its systems break down, those banks cannot serve their customers. Not only that, but because these banks have to go through the clearer to access the payments system, they get charged up to 10 times or 20 times as much as the clearers have to pay for one payments transaction. It is an absolute closed shop and it is appalling.

The payments regulator’s first job will be to examine access to the payments infrastructure and to say to the big banks, “You have to give direct access to every player.” The big banks argue, “You can’t do that because we all mutually underwrite one another’s payments.” As with any other clearing system, however, it is perfectly possible to leave a deposit up front and then to be called for more margin should you be running out of money, so the reason given for not allowing other banks direct access to the payments system is a completely spurious one. That will be item No. 1, and dealing with it will, in itself, create a completely different playing field for all those who want to come into the banking sector.

[Ian Swales]

The hon. Lady is making a powerful point. Does she agree that a parallel situation would be having the big six electricity companies owning the grid and not allowing any other supplier on to it?

[Andrea Leadsom]

Yes, my hon. Friend is absolutely right. There are huge parallels between the banking closed shop and the energy closed shop. That is something I have been picking up, and I was recently in the media with him addressing this very subject.

Giving direct access to the payments infrastructure to all banks will reduce the barriers to entry, so I want further to congratulate the Minister on accepting the Treasury Committee’s recommendation that the PRA should have a specific competition objective. That is key, because the barriers to entry do not just relate to access to the payments system; there are regulatory barriers to entry. In other words, “If you are small, you cannot become a bank. Until you become a bank, you cannot become big. Therefore, you cannot ever become a bank.” We have created an environment where there are massive barriers to entry, so the payments system changes will really start to unravel that closed shop.

Importantly, I wish to put in one plea for full bank account portability. I know that the Minister has absolutely agreed that one of the first jobs of the new payments regulator will be to undertake a full cost-benefit analysis of account number portability. That would mean that if I want to switch banks in future, instead of waiting for even seven days, having to change all my direct debits, standing orders and bank account details, and having to be issued with new credit cards and cheque books and so on, I would simply be able to have my bank account details re-pointed at a new bank and so everything would remain the same. It would be instantaneous account switching.

When we move our mobile phone account number now, we can take our phone number with us. In a world where we had full number portability, we would also be able to take our bank account details with us. That would be a radical game changer for competition. New entrants could come in and attract new business on the promise that if a consumer does not like them they can always move somewhere else tomorrow. Banks would lie awake at night wondering how to retain their customers through excellent customer services rather than what next they can fleece them with, which happens all too often now.

Competition is not the only issue. There are two other items I wish to mention. The first is about resolution. We have put in all this effort to try to ensure that, in future, a bank cannot fail. We have increased capital requirements and changed the regulatory structure, which is all to the good. None the less, we know that in future, as sure as eggs are eggs, a bank will fail. What bank number portability will do is to give an instant means of resolution to avoid ever seeing again queues of people down a street trying to get their money out of a bank that they are concerned about.

If we in the UK become the first country to introduce full bank account number portability, we will be leading the world. By creating a shared infrastructure for payments, we will create a massive business opportunity for UK plc. I congratulate my hon. Friend, the Minister, but urge him to go even further and to support, when the time comes, the prospect of full account number portability.

[Paul Blomfield (Sheffield Central) (Lab)]

Like my hon. Friend the Member for Makerfield (Yvonne Fovargue), I rise to speak on amendment 155. The Minister has acknowledged that data collection is at the heart of effective regulation. Like many Members on both sides of the House, I welcome the Government’s conversion to capping the total cost of credit, but we need to recognise that it is not a silver bullet.

When I was fortunate enough to have the opportunity, through the private Member’s Bill ballot system, to prepare the High Cost Credit Bill back in July, I brought together Members from both sides of the House—I am pleased to see that one of them, the hon. Member for East Hampshire (Damian Hinds), is in his place—and all the major consumer voice and debt advice organisations, such as Which?, Citizens Advice, StepChange and the Centre for Responsible Credit, to try to develop a holistic approach to the regulation of payday lenders, with appropriate interventions at every stage of the relationship that lenders have with their borrowers from advertising right through to debt collection. At many points in that relationship, the issue of real-time data collection is absolutely vital to tackle multiple lending. We know that multiple lending is the source of many of the problems that people face. Unable to repay one loan, they are forced to resort to taking out additional loans, moving from a single unaffordable debt to multiple loans, creating completely unmanageable debt.

As my hon. Friend the Member for Makerfield has pointed out, the current reporting framework for credit reference agencies of 30 to 60 days simply cannot protect people from the problems that result from multiple lending. Only real-time data collection can effectively do that.

Secondly, we have the impact on the market. As part of the debate on payday lending, many people have argued that we cannot solve the problems by regulation alone and that we need a wider range of more affordable products. That is absolutely right, and real-time data are key to that too, because they will enable lenders to assess risk.

At a recent hearing of the Business, Innovation and Skills Committee, one of the lenders selected by the Consumer Finance Association as a representative of the industry said:

“We do not know in real-time what loans the customer has with other lenders.”

He said that they would

“love to know that information.”

It is impossible for lenders properly to evaluate risk, set interest at manageable levels and develop new products. As other Members have said, the opportunity that real-time data would provide for new entrants to the market is also crucial.

Above all, real-time data are essential to ensuring affordability, which is at the heart of the measures needed to protect people. The industry works in a distorted market. We know that: success is measured by the time it takes to get money into somebody’s bank account, not by the ability to repay. It sounds perverse that many lenders are not primarily concerned about ability to repay. As the OFT has highlighted, up to 50% of payday lending revenue comes from 28% of loans—those that are unaffordable—so providing real-time data is at the core of shifting the business model for payday lending from speed of lending to affordability and is the key to protecting people from spiralling and unaffordable debt.

I mentioned the recent Select Committee inquiry, which will report soon. My hunch is that it will say something along the lines of the report we published two years ago—that real-time data collection is critical to transforming the payday lending industry. We have heard from a number of Members that debt advice agencies are clear that we need real-time data collection and sections of the industry also want it. As the shadow Minister, my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), has pointed out, the industry has been slow to respond. It has been considering the issue for two years and has failed to find a solution that all participants will buy into. As the industry has failed to produce an initiative, it is our responsibility to step in and secure real-time data collection.

I would cite in support of that assertion the response of the Financial Services Consumer Panel to the Financial Conduct Authority’s consultation on its proposals on payday lending. As Members will know, the Financial Services Consumer Panel is the statutory body that monitors how far the FCA fulfils its statutory objectives for consumers. It is a critical voice in this debate. The panel has said that

“better creditworthiness assessments must be underpinned by real-time data sharing capabilities.”

On affordability, it has stated:

“In order for this information to be available we believe the establishment of real-time data sharing is vital.”

It has also stated:

“In addition to limiting rollovers, the Panel also feels that real-time data sharing is essential in ensuring people do not end up with excessive numbers of loans at the same time.”

It goes on:

“The speed at which loans are granted is often cited as the reason for”

unaffordability and rollovers, and:

“Real-time data sharing would overcome this and should be something the FCA encourages…There are examples of other jurisdictions, such as Florida…where this has been achieved.”

Indeed, the Minister cited Florida as an example earlier.

The panel comes to the conclusion that it strongly calls for the establishment of real-time data sharing and I hope that the Government will listen to that.

[Sajid Javid]

With the leave of the House, Madam Deputy Speaker. I thank all hon. Members for their contributions. It has been a good debate and a number of important issues have been raised, so I want to take a few minutes to respond.

The shadow Minister, the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), started by making a number of points on the payments system regulator. One issue she raised was whether there could possibly be a gap before the payments system regulator came into full force. That is a reasonable question and of course we will do all we can to minimise that.

It is worth pointing out that although the Payments Council, to which my hon. Friend the Member for Chichester (Mr Tyrie) referred, has not always done a spectacular job as an industry body, particularly on cheques, it has recently put in place some useful innovations under the influence of the Government, such as the current account switching service. It is also developing a mobile phone database. We have been assured that such initiatives will continue and will not slow down because of the plans to set up a payments system regulator.

16:30

The hon. Lady mentioned VocaLink and concerns about payment service providers and who will be designated as part of the payments system and therefore be regulated. As she knows, and as set out in the clauses, the Treasury will designate the systems. To provide clarity we set out in the other place and elsewhere during the consultation the kinds of systems that we expect to be designated, which will be the main interbank systems, international card schemes such as BACS, CHAPS, Faster Payments, LINK, Cheque and Credit, Visa, MasterCard, and Amex. I hope that is helpful.

A number of hon. Members spoke to the Opposition amendment on data sharing, amendment (a), including the hon. Member for Makerfield (Yvonne Fovargue), who I know has considerable expertise from her experience at Citizens Advice, so I take her comments very seriously indeed. The hon. Member for Sheffield Central (Paul Blomfield) referred to his private Member’s Bill, which, as he said, had cross-party support in the House. What hon. Members, including the shadow Minister, said on the subject of data sharing is very important and I agree with all the concerns they articulated, especially the importance of real-time data collection and the difference that it can make. I share all their concerns and I agree with the benefits of consumer protection that data sharing can provide. The hon. Member for Kilmarnock and Loudoun mentioned StepChange, a charity whose representatives I have met a number of times. I discussed the matter with them and they, too, raised a number of important points. I agree with their analysis.

We all agree about the benefits of sharing information. The question is what we can do about it. The good news is that, because we agree, the Government have discussed the matter with the regulator, the FCA, which made a clear commitment that it plans to take action. It has already started down that course and is working with the industry on this. In the letter that I referred to at the start, the FCA said clearly that if the industry does not help to bring about the sharing of information sooner rather than later, it will not hesitate to make rules. It already has the powers to make such rules.

[Yvonne Fovargue]

Will the Minister therefore set a time scale for the FCA to give the industry to work towards voluntarily, which will be imposed on the industry if it does not meet it?

[Sajid Javid]

There is already the tightest possible time scale. In his letter today Martin Wheatley of the FCA says that the industry is already working on this. He states:

“If the industry cannot overcome the obstacles, and we are best placed to bring about data-sharing we will not hesitate to act.”

The chief executive of the FCA and the Government understand the importance of this. We can all agree on its importance and the need to take action quickly. I do not consider it necessary to pass any legislation as action is already being taken.

[Cathy Jamieson]

To follow up the point from my hon. Friend the Member for Makerfield (Yvonne Fovargue), it would the help the House to know whether the Minister has had discussions on a time scale.

[Sajid Javid]

I have had discussions with the FCA about this. We expect that by the end of next year the process will be set up, but there are a number of issues to be dealt with before that can be confirmed with more certainty. That is the time scale that the industry is working towards.

Let me move on to some of the other issues that were raised in relation to high cost credit. The hon. Member for Kilmarnock and Loudoun mentioned excessive bank charges, and I agree with her concerns. The Government are concerned about default charges across the unsecured lending market, not just the payday loan market. The Government are strengthening regulation for consumer credit across the board by giving responsibility to the FCA. The FCA recently committed to consider carrying out a thematic review of market practice in relation to fees and charges, once it has full regulatory authority over consumer credit.

I will turn briefly to the timetable for introducing a cap on the total cost of payday lending, which we discussed earlier. As the shadow Minister said, 2 January 2015 is just a back-stop. Of course I would like to see it introduced sooner, as I think we all would. However, as we have discussed, it is better to have a cap that works and protects consumers, rather than one that has been forced on the regulator by an artificial time scale. It is important to listen to the FCA, the regulator that will establish the cap, so it is worth reiterating what Martin Wheatley has said:

“It is very important that we are clear with you on the practical implications of any further shortening in the timetable, the principal one being that we believe it is impossible to have as strong a cap based on a shorter deadline. To such a tight timetable we would be forced to perform less analysis on the methodology and level for any cap, and so would be forced to set the cap at a more conservative level (that is, higher) to reflect the inherent legal risks. This cannot be the intended outcome from a consumer protection standpoint.”

It would be foolish for this House to ignore the FCA’s view, as I am sure we all share the objective of having a cap that works and protects consumers.

[Stella Creasy]

We know that 1 million families in this country have already said that they will pay for Christmas this year with a payday loan because of the cost of living crisis they are facing. The Minister is talking about delaying the introduction of any form of cap until 2015, so there is a real question about the impact that might have next Christmas, which will be the default position of not supporting the proposed amendment. Introducing even a conservative cap before next Christmas might do something to lessen the damage that those toxic types of lending are doing to people, given that the cost of living crisis will continue for the year ahead.

[Sajid Javid]

I thank the hon. Lady for her comments. As she will have noted from the letter I just quoted from Martin Wheatley, one of the concerns about a conservative cap is that it would be open to much greater legal risk. It would serve nobody in this House if there was some kind of legal challenge to a cap and how it works if the process has not been followed properly and if some people believe that the FCA has not followed its own rules, particularly on the time for consultation. Had the hon. Lady been here at the start of the debate, she might have heard that the Competition Commission’s investigation into payday lending, which is already under a tighter timetable than it usually has—it is normally around two years, but it has agreed to make that 18 months—will report in November next year. I think that everyone would agree that it is very important that the FCA takes into account the results of that investigation.

[Cathy Jamieson]

The Minister might have already answered this, but what specific legal risk has he identified in relation to the cap being introduced sooner rather than later?

[Sajid Javid]

I refer the hon. Lady again to the letter from Martin Wheatley, which states that the FCA

“would be forced to set the cap at a more conservative level (that is, higher) to reflect the inherent legal risks.”

I believe that she has a copy of the letter.

I will finish by answering an important point the shadow Minister made about the possibility that lenders from elsewhere in the European economic area will be able to passport their services and avoid UK legislation. She is entirely right to make that analysis, because that is indeed possible under the EU commerce directive and the single market in financial services. There are mitigations, although the situation is not ideal. Under the EU consumer credit directive, there is not a cap but there are certain rules that all lenders within the EU need to follow. Of course, there is nothing to prevent the UK regulator from contacting the comparable authority in another EU-based country to see whether there is any way in which pressure can be put on indirectly through the two bodies working together.

Lords amendment 63 agreed to.

Lords amendments 1 to 40; 42 to 62 and 64 to 154 agreed to, with Commons financial privileges waived in respect of Lords amendments 35, 37, 40, 149 and 150.

Before Clause 13

Duty of FCA to make rules restricting charges for high-cost short-term credit

Amendment (a) proposed to Lords amendment 155.—(Cathy Jamieson.)

Question put, That the amendment be made.

16:42

Division 158

Ayes: 225

---

Labour: 213
Scottish National Party: 5
Democratic Unionist Party: 4
Social Democratic & Labour Party: 2
Plaid Cymru: 2

Noes: 289

---

Conservative: 250
Liberal Democrat: 37
Independent: 1

Amendment (b) proposed to Lords amendment 155.—(Cathy Jamieson.)

Question put, That the amendment be made.

16:55

Division 159

Ayes: 228

---

Labour: 217
Scottish National Party: 5
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2

Noes: 297

---

Conservative: 256
Liberal Democrat: 39
Independent: 1

Lords amendments 155 to 184 agreed to, with Commons financial privileges waived in respect of Lords amendments 162, 163, 169, 171, 172, 173 and 175.

Motion made, and Question put, That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendment 41;

That Sajid Javid, Nic Dakin, Cathy Jamieson, Amber Rudd and Ian Swales be members of the Committee;

That Sajid Javid be the Chair of the Committee;

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Sajid Javid.)

Question agreed to.

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.

[Mr John Denham (Southampton, Itchen) (Lab)]

On a point of order, Madam Deputy Speaker. Earlier this afternoon I was alerted to a tweet from the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), which referred to his parliamentary written answer to me on parking charges. It states:

“when the right hon. Member for Southampton, Itchen (Mr Denham) was Secretary of State for Communities and Local Government…he noted that it was…Government policy to encourage councils to “creatively” and “extensively” make use of parking charges”.—[Official Report, 10 December 2013; Vol. 572, c. 161W.]

That is a gross distortion of the evidence given at the time. As the submission makes clear, the word “extensively” was not used as a description of Government policy, but as a description of fact about the activities of local councils. The word “creatively” was not used in relation to parking charges, but as an approach to improving accountability and responsiveness in service delivery. I have a fairly thick skin, but such a deliberate and cynical misrepresentation is surely out of order. Will you, Madam Deputy Speaker, advise me what steps I can take to have it put right?

[Madam Deputy Speaker (Dawn Primarolo)]

Obviously, the contents of comments on Twitter are not a matter for the Chair, but if this has occurred, it is an extreme discourtesy to the right hon. Gentleman, and I hope that the Treasury Bench has taken note. Ultimately, Ministers are responsible for what they say, but perhaps in future the Minister could say it in a written answer and be accountable to the House. That way, I could make a ruling; otherwise, I cannot. Nevertheless, the right hon. Gentleman’s point is on the record.

Business without Debate

Wednesday 11th December 2013 Commons Chamber

Delegated Legislatoin

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

Infrastructure planning

That the draft Infrastructure Planning (Business or Commercial Projects) Regulations 2013, which were laid before this House on 31 October, be approved.—(John Penrose.)

Question agreed to.

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

Defence

That the draft Armed Forces (Remission of Fines) Order 2013, which was laid before this House on 24 October, be approved.—(John Penrose.)

Question agreed to.

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

Energy

That the draft Renewable Heat Incentive Scheme (Amendment) (No. 3) Regulations 2013, which were laid before this House on 28 October, be approved.—(John Penrose.)

Question agreed to.

Sittings of the House

Motion made, and Question proposed,

That on Thursday 12 December there shall be no sitting in Westminster Hall.—(Tom Brake.)

17:11

[Mr Philip Hollobone (Kettering) (Con)]

I apologise to my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) for delaying his extended Adjournment debate, but given that he was expecting a half hour’s debate but can now have the best part of two hours and 15 minutes, I hope he will forgive me on this occasion. As somebody who no doubt has travelled a lot on the West Anglia rail line, he will be used to delays in any event.

I wished to catch your eye, Madam Deputy Speaker, because we have just had absolutely no explanation from the Deputy Leader of the House for why tomorrow’s sitting in Westminster Hall is to be changed. [Interruption.] The Chief Whip, who is just leaving, will be familiar with this argument, because we had this debate when he was Leader of the House. The Leader and Deputy Leader of the House are being too cavalier in simply excising three hours of parliamentary airtime. I take the view, and I hope other right hon. and hon. Members do as well, that the sittings in Westminster Hall are extremely important. If they were not, the House would not have decided to set them up in the first place. I am pretty sure that the Liaison Committee also regards them as important, because it regularly schedules important debates from the various Select Committees to be debated for up to three hours in Westminster Hall.

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

I appreciate the hon. Gentleman’s concern for the Liaison Committee, but I can assure him that it wants to take cognizance of other events happening tomorrow adjoining Westminster Hall and that I have made provision for the debate that my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), the Chairman of the International Development Committee, was going to introduce tomorrow to take place on another suitable occasion soon.

[Mr Hollobone]

I am sure that the right hon. Gentleman is acting with the best of intentions, but he was sitting in his place, as I was sitting in mine, when the Deputy Leader of the House rose simply to move this motion formally, without giving any explanation of the circumstances tomorrow whatsoever. I think the House deserves a better explanation. I understand that tomorrow there is an important celebration in the main Westminster Hall relating to the death of Nelson Mandela. No doubt, that will be a wonderful occasion, and it is right for the House to celebrate the great man’s life in that way, but we have been given no explanation for why the sitting in the small Westminster Hall tomorrow afternoon is to be cancelled. Is it to do with security, logistics, staffing? I do not know. I would welcome an intervention from the Deputy Leader of the House, if he wants to apprise the House of the reasons, but as far as I can tell no one in the Chamber knows why the sitting is to be cancelled.

I have no doubt that the Chairman of the Liaison Committee is acting in good faith, but scheduled on the Order Paper, as we speak, are two very important debates from the International Development Committee. I see in his place the esteemed Chairman of that Select Committee, who has been good enough to attend this afternoon, no doubt also anticipating an explanation from the Deputy Leader of the House for cancelling the sitting. These debates would have been on the subjects of global food security and violence against women and girls.

[Sir Malcolm Bruce (Gordon) (LD)]

Perhaps to help the hon. Gentleman let me explain that I was asked whether the Committee would agree to postpone tomorrow’s debates. It was not me who took the decision; my Committee took it. Our decision was that, in the circumstances, provided we were reassured that we would be able to conduct the debates in short order subsequently, we would agree to do so. We have already been offered dates for both debates in January.

[Mr Hollobone]

I have no doubt at all that the right hon. Gentleman, along with his Committee, has acted entirely in good faith. I put it to him, however, that his rescheduled debates will replace other debates, which will never see the light of day, because we are losing three hours of important parliamentary airtime—with no explanation to this House of why that is happening.

If on today’s Order Paper, along with this motion, a suggestion had been made—I guess it would have been another item rescheduling the sitting in Westminster Hall to another day—I could just about have lived with it. Why have we had no suggestion from the Deputy Leader of the House that the International Development Committee have its debate in Westminster Hall tomorrow morning, before the Nelson Mandela celebration takes place there? Why does today’s Order Paper not suggest that the International Development Committee has its important debates on Monday afternoon from 1.30 to 4.30 or from 4.30 to 7.30? Sittings in Westminster Hall take place on Monday afternoons so why, given the importance of these subjects and the reassurance of the Chairman of the International Development Committee that his debates would take place in short order, did the Deputy Leader of the House not make provision for these debates to take place on Monday?

I never had the privilege of meeting Nelson Mandela, but I am pretty sure that he was concerned about violence against women and girls. I am pretty sure, too, that he was also concerned about global food security. I am thus pretty sure that he would have wanted the British House of Commons to discuss those important items. I have a feeling that he would have been rather upset if his celebration—if I make the correct assumption—displaced three hours of important debates on those crucial subjects.

I do not think I am being unreasonable in saying that, in putting forward this motion tonight, in failing to provide us with an explanation for why the Westminster Hall sitting is not going to take place and in not putting forward an alternative time slot, the Leader of the House and the Deputy Leader of the House are not playing fair by this House. This is a matter I have raised previously. I regard debates in Westminster Hall as very important, and I am pretty sure that the House of Commons does, too. It is simply not good enough to come here at the end of today’s sitting to wipe out three hours of parliamentary airtime on important debates without first giving the House an explanation or secondly providing an alternative time and date for those debates to take place.

17:18

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

In the circumstances, I think it appropriate to make a few points. First, this motion will allow us to resolve not to sit in Westminster Hall tomorrow. This follows the decision of the International Development Committee, many of whose members one assumes will want to attend tomorrow’s events in Westminster Hall to commemorate Nelson Mandela, not to proceed with its business, as agreed by the Chairman of the Liaison Committee, who intervened a few minutes ago to confirm that.

The hon. Member for Kettering (Mr Hollobone) made a number of alternative proposals about the timing, for example, although I do not know whether the International Development Committee considered that because I was not party to the discussions. If we do not proceed with this motion, the impact would be that the business would still appear on the Order Paper and a Chair, Clerks and Doorkeepers would need to be on a rota to attend tomorrow’s business even though it was not taking place. On that basis, it seems sensible to ask the House to resolve the matter in order to clarify the position to the public, and for the convenience of everyone else.

[Bob Stewart (Beckenham) (Con)]

My right hon. Friend has just mentioned the public. Given the importance of the Westminster Hall debates, some members of the public may have made arrangements to come to London specifically to attend them, so we are probably inconveniencing members of the public as well.

[Tom Brake]

My hon. Friend has made a telling point. I cannot disagree with him: some people may indeed have been inconvenienced as a result of this decision. I therefore hope that the alternative dates will be widely publicised to enable them—we hope—to attend the debate in future. I also hope that they will take account of the fact that there was a strong demand for this event, and the fact that, because of the way in which things happened, it was not possible to predict that it would clash with a debate initiated by the International Development Committee that they had wished to attend.

Question put and agreed to.

West Anglia Rail Line

Wednesday 11th December 2013 Commons Chamber

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

17:21

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

It was almost three years ago, on 19 January 2011, that I last had the opportunity to address the House on the subject of the West Anglia rail line. The line runs from Liverpool Street to Cambridge and beyond, serving many stations in my constituency and in other important towns and villages. In the speech that I made in 2011, I castigated every Government from 1985 onwards for first willing the expansion of Stansted airport—which is served by the line—and then branding the M11 corridor, as it is described, ripe for major development, while doing absolutely nothing about the capacity or quality of service on a line that served all those different needs. I regret to say that not much has changed in the intervening years, apart from the fares that long-suffering passengers have to pay.

I acknowledge that there was a timetable change in December 2011—in the teeth of opposition from Transport for London, I should add—which made possible the reinstatement of some peak services. That returned the journey time between Audley End and London to something like it was in 1977: although it was not quite as good, there was certainly a major improvement. I also acknowledge that, as the then Minister, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), told me in her reply to my speech in January 2011, some of the new type 379 train units did come our way. I am not sure that that was entirely due to my persuasion; it was probably rather more to do with the fact that business at Stansted airport had slumped rather badly, and 10 of the 30 new train units were spared to supplement services for other passengers on the line.

Despite those two welcome steps, however, not much has changed. I am tempted to use the term, “Same old railway.” There is no new track and no sign of fleet replacement. It is true that there is a new train operator, Abellio, under the colours of Greater Anglia, and a new airport owner, with Manchester Airports Group having bought Stansted from BAA.

[Robert Halfon (Harlow) (Con)]

My right hon. Friend is an incredible champion for commuters in our area and I am very proud to have him as my neighbouring MP. I recently did a survey at my local railway station, Harlow Town. Some 73% of commuters said they had to stand too often, and 60% of them want longer trains. Does he agree that there needs to be investment in rolling stock and that the trains that go through Harlow need to be extended?

[Sir Alan Haselhurst]

I certainly do not disagree with that in any way, and I would think that quite a number of other colleagues whose constituencies are served by this railway line would echo my hon. Friend’s sentiments. I acknowledge his support in the campaign to bring the Government’s focus more sharply on to this line.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I strongly endorse what has been said: my right hon. Friend is an informed and persistent challenger of what has been a poor service for all our constituents. Does he share my concern that, while we understand the problems created by the storm this autumn, we noticed that it was our line that was least able to cope? We had three days—not one—of disruption. Does he share my view that alongside the overcrowding, poor service and rising fares, we simply seem to be getting what I would describe as a Cinderella service?

[Sir Alan Haselhurst]

I am grateful to my hon. Friend, who has been another staunch ally in the fight for a better deal for regular passengers on the line. I agree that that is another example of how our service has fallen below the standards, which have been raised in certain other parts of the country. In terms of statistics, it is possible to argue overall that a higher performance rating has been achieved, but when the lapses occur, they are very serious indeed.

I could add to what my hon. Friend has said by describing my experience this morning. At the Audley End ticket office there are two counters. Both were closed, with a notice up to say that the one person who was in on this particular morning would be back at 9.45, which was one minute after the departure of the train to London. The rumour was that the ticket agent was having a break, but that meant that there were no tickets available to purchase except from one of the machines on the platform, and those machines are not flexible in what they can offer—they can only provide fairly simple fares. It would certainly appear to be a shambles that we do not have a proper standard of service in that way.

As I have said, there is a new train operator and a new airport owner, and there is seemingly a new franchise policy because when my right hon. Friend the Member for Chipping Barnet spoke in response to my Adjournment debate in 2011 she suggested that good times would come when we had new longer franchises, but I am not sure that that policy still holds; that may have now changed to having rather shorter franchises. I would be interested to know what my hon. Friend the Minister has to say on that subject.

Indeed, in addition to those other new circumstances, we have a new Minister. In fact he is the second since the previous debate. [Interruption.] Yes, I have no doubt at all that he is an excellent Minister, but he will be judged in part by the nature of his reply to me and my hon. Friends.

What is absolutely incontrovertible is that there has been no investment in the line. That is the problem.

[Bob Stewart (Beckenham) (Con)]

I am very interested in this line because I have been to Cambridge four times in the last year, and on two occasions I had to take a very long journey on buses. My right hon. Friend says the line is poor, and that seems to be borne out by my own empirical experience as a Member of Parliament from south of the river.

[Sir Alan Haselhurst]

I am sorry that my hon. Friend was inconvenienced on those occasions, but that illustrates a further problem that we experience on the line. I hope that the problem did not prevent him from collecting the honorary degrees that he was no doubt going to Cambridge for.

I might have suggested that not much has been happening, but in fact I suspect that things are now stirring, although not necessarily in a helpful way. The Mayor of London has shown great interest in acquiring control over part of this railway. More disturbingly, my right hon. Friend the Secretary of State seems to have given assent in principle to that taking place. The Mayor would then have control over the services to Enfield Town, Chingford and so on, although not further up the main line between Tottenham Hale and Broxbourne. That is interesting, because one of the justifications for bringing together the services out of Liverpool Street in a single franchise was that it would make the operability of Liverpool Street more effective. If a second franchise holder were to be introduced, that could start to complicate matters in what is already a very constricted station.

My next point is that, to run those services, the Mayor will need some rolling stock, and I suspect that a portion of the rolling stock currently being operated flexibly by Greater Anglia would be painted a different colour and handed over to the Mayor. It is not clear, however, what would replace that rolling stock. I regard this as an aggressive, acquisitive policy on the part of the Mayor. I am not denying that it could be good for the people he serves, but it would have an adverse effect on the people served by me and by my hon. Friends the Members for Hertford and Stortford (Mr Prisk) and for Harlow (Robert Halfon) and others. Also, it cannot be right if there is to be no investment in the track. The situation would become altogether different if we had four-tracking. It might then be possible to accept that the two operators could work without the one interfering with the other.

A further disturbing matter, from the point of view of railway passengers, is that Stansted airport is starting to expand again in terms of passenger numbers, and I imagine that, under the dynamic new ownership of the Manchester Airports Group, those numbers will continue to rise over the next few years. That will build demand to a point at which we will look back on the history and say to Ministers, “Excuse us, but we would now like to have back those trains that you allowed to run on the Cambridge line to serve the commuters, so that the original intention of having 12-car trains going to the airport can be fulfilled.”

I have no particular complaint about there being a decent rail service to the airport; indeed, I am in favour of it. However, it could pose a second threat to the fleet that is available to Greater Anglia. The question would then arise: where are the substitute carriages to come from? I am advised by Abellio that there are no trains that can obviously be cascaded down to us. We would, I suppose, be grateful for second-hand trains, but we have been living with second-hand trains for far too long anyway and we deserve a full fleet of new trains.

A report has appeared recently from an organisation called London First. It puts forward what, on the face of it, seems a reasonable proposition. I replied initially to Baroness Valentine, the chairperson of the organisation, to say that I welcomed the contribution to the debate, and that anything that brought attention to the needs of the line was to be welcomed. But the more one examined the proposal, the more one became aware that the clue was in the title—London First; the approach was just that, and it would not be to the advantage of those of us who are further away from London and rely on services on that line. London First is proposing a third track over a short distance north of Tottenham Hale, as much as anything to facilitate services to Stratford. In principle, I see nothing wrong with that, but the proposal is not going to be to the benefit of the passengers we represent in ever-increasing numbers. It is a diversion from the real need of the line, which is to get four-tracking so that flexibility can be achieved.

[Mr Prisk]

My right hon. Friend mentions the London First report, and perhaps I might add my thoughts on that in a moment, if I can catch your eye, Madam Deputy Speaker. The report is a distraction, but is he aware that, worse for my constituents, it includes ideas of looping around Bishop’s Stortford and Sawbridgeworth, which would leave my commuters watching visitors from abroad getting a better service than those who actually pay for it?

[Sir Alan Haselhurst]

I agree. I do not represent people in Sawbridgeworth and Bishop’s Stortford, but I am sufficiently familiar with the two places, and passing through on the train, to wonder exactly how these passing loops are going to be effected without the most appalling disruption. In any case, I do not believe they serve any real purpose. Four-tracking between Coppermill junction, south of Tottenham Hale, and Broxbourne is the way in which most people’s interests can be served. If we take our eye off that goal, we will end up with miserable scraps. I worry that, if London First gains favour for its proposal, which is not only inadequate but very damaging the further north one goes, it will be all too easy for Network Rail or the Department for Transport to say, “Job done, we have helped there, at last” and for that to be it. It would not do anything to transform the railway.

We must also consider the interest in Crossrail 2 and suggestions that perhaps it would serve to bring people back and forth from Stansted airport. I am in favour of the regional version of Crossrail 2, because it makes sense to link at Cheshunt, bringing in to the west end people who do not necessarily want to go to the City, where Liverpool Street station is situated. But it is not helpful to have eyes diverted from the West Anglia line and suddenly say that we might start spending money on Crossrail 2. I found it extraordinary that that possibility was apparently being touted by another representative of London First in a different forum, with the suggestion to get Crossrail 2 and then four-track between Cheshunt and Broxbourne. That seemed entirely at odds with what is in the main London First report. Therefore, I am not too happy about being diverted in that direction; we need to concentrate on the main line and seek investment there.

I have been saying that the Mayor, London First and the airport activity are stirring, but, sadly, not a great deal appears to be stirring in the Department for Transport. I wish to say straight away that I am absolutely behind what is being invested in our railway network throughout the country, and I am also a strong supporter of HS2 and a great believer in the railway. As such, it is understandable, surely, that I am a great believer in the railway that serves my constituents, and that is the one that is constantly forgotten. It has been forgotten since 1985 and something has to be done to reverse that position. Our line has simply not been favoured. I accepted that it was reasonable to wait for the report by Sir Roy McNulty, but surely the lessons to be learnt from his report have been digested by now. Unfortunately, what has happened is that we have seen an extension to a franchise. There will not be a new franchise—we are not sure of what length—until 2016. The scope for continued indecision is considerable and deeply worrying, because fares will no doubt continue to rise in that time.

I say to the Minister, who I am delighted has this portfolio—he might feel slightly less delighted after my remarks—that we need more than warm words. We are looking for cast-iron assurances that the problem of the West Anglia line is understood and that something meaningful will be promised within a reasonable time. We are looking for investment in track and trains, as that is, after all, investment in people.

17:40

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I repeat my view that the good people of Saffron Walden are very fortunate to have, in my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), an informed and persistent champion. It has been a pleasure working with him on these issues. He has taught me more about the railways than I thought that I would ever know. Indeed, there is possibly more to learn.

We are talking about a railway line that is, sadly, the Cinderella of railway services. Those of us in the northern and eastern home counties have watched other investments being made and listened to the way in which priorities have been set elsewhere. Our commuters, as my hon. Friend the Member for Harlow (Robert Halfon) rightly points out, feel that what they have seen are rising fares, falling standards, overcrowding getting worse and a sense that they are being left behind. Indeed this autumn the overcrowding has got worse. When we saw the storm, we understood the need to close the railway lines on the day. On the second and third days, our constituents found themselves not only inconvenienced but without the information they needed to make alternative arrangements. They rightly complained to us, which is why we want to challenge and speak with the Minister.

Very often, when commuters get information, it is the wrong information. The options available to those who work hard and want to get to work are immensely limited.

[Robert Halfon]

I am hugely grateful to my hon. Friend for giving way. He is also a neighbour, and I am delighted to serve alongside him. Does he not agree that it is important to invest not just in the rolling stock but in some of the smaller stations? He will know that Harlow Mill station is in bad need of refurbishment. We need to consider that, because commuters have a right to a proper station when they need to go to work.

[Mr Prisk]

My hon. Friend is absolutely right. The quality of the rolling stock, which my right hon. Friend has mentioned, is important, as are refurbishment and expansion of the railway stations and investment in track. It is that final point on which I want to focus in my brief remarks.

I strongly endorse the analysis and the solution that we have just heard from my right hon. Friend. Having looked carefully at the proposal from London First—I am the last person to want to decry positive suggestions for investment—I must warn the Minister to be careful, as it makes no sense. The good folk of Bishop’s Stortford and Sawbridgeworth ask me why they should pay good money to watch folk being whisked in to this country—they are very welcome—on a better service than that which they receive, which they actually pay for. That causes them natural concern.

There is a real danger of our being diverted, as my right hon. Friend rightly said, from the real opportunity. The core of the issue is the funnel—the last five or six miles into Liverpool Street—running back towards Tottenham Hale. If we solve that capacity issue, people in London—whom I am sure the Mayor is concerned about—Essex, Hertfordshire and Cambridgeshire will see a service that is punctual and has the capacity to deal with many of the changes in our area—an increasingly important issue, because alongside that investment is the debate about the number of additional homes that need to be built in our areas.

Sadly, we have a railway line that is recognised as having had over recent years the worst record for overcrowding of almost any railway line coming into London. With the prospect of thousands more homes, which we understand and recognise are needed where there are difficult and long council waiting lists, our constituents will rightly ask how on earth the railway line will cope and what that will mean for their ability to get to work.

The West Anglia line is a line for people in London but it is also a line for Hertfordshire, Essex and Cambridgeshire. Investment is undoubtedly overdue, but the additional housing means that it is urgent that we have some signal that we will get the investment required. Four-tracking into Liverpool Street is the key and the Minister should not be diverted or distracted by the suggestions that we might loop one town or another. That will not solve the central problem and that is the key message that I and my constituents want to send to the Department for Transport and our excellent Minister today.

17:45

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I congratulate my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) on securing this evening’s debate on investment in the West Anglia line. I was, of course, slightly perturbed when he opened his speech with remarks about castigating every Government since, I think, 1970—I cannot quite remember the year.

This is an important matter to my right hon. Friend and his constituents, to other Members of Parliament and their constituents and, of course, to all passengers using the line. My right hon. Friend and my hon. Friends the Members for Hertford and Stortford (Mr Prisk) and for Harlow (Robert Halfon) have all made the point that the two-track commuter line between London and Stansted and Cambridge is very busy. The commuter flows it carries are some of the busiest around. It covers not only the areas they have talked about but carries commuter flows from Essex and north-east London and provides the link with Stansted airport.

I recognise that demand has been growing quickly and significantly. To explain to my right hon. and hon. Friends some of the investment that has been made, it might be helpful to consider the line in separate parts. Demand has been growing quickly, particularly in the lower Lea valley, and the Government’s rail investment strategy has provided approximately £80 million to deliver three and four-tracking at the south end of the route. That will allow the introduction of some new services, will increase operational reliability, and should support regeneration in the lower Lea valley. I hope that my right hon. and hon. Friends will recognise that that shows that the Government are aware of the need for four-tracking.

The Department also rightly recognises that there is some suppressed demand as regards the need to connect the West Anglia line with Stratford in east London. My right hon. Friend made that point. We are taking steps to address it and Stratford is increasingly becoming a destination for leisure, retail and entertainment in its own right. It is therefore becoming a significant transport interchange. It is important that we ensure that the connections into that significant place in east London are operationally the best they can be.

From 2019, Stratford will become part of the Crossrail network through Crossrail 1, providing direct connections to a large number of destinations. I accept that that will have a knock-on effect through London and the West Anglia line. The important point is that as soon as the Crossrail operation starts in 2017 there will be the chance to introduce new connections to the West Anglia line. I recognise that this is not in my right hon. and hon. Friends’ constituencies, but to suggest that the Government have done nothing about the line is not exactly true as there has been investment in new stations at the southern end of the line and the new stations fund is also starting to work through, as can be seen with the new station at Lea Bridge and the new services between Angel Road and Stratford.

[Robert Halfon]

As I mentioned to my right hon. Friend, I have done a survey with commuters. We know about Harlow Town station, but one of the big concerns was the lack of facilities at Harlow Mill station. The ticket office is open only during weekday mornings, closing at 11.15 am. There are no toilets and very little shelter from bad weather, despite trains to London leaving once every hour. Will my hon. Friend look at this and see whether there are any plans for the Government to invest in this station?

[Stephen Hammond]

My hon. Friend is right to point out the concerns of his constituents. As Ministers, we try not to get into the micro-management of the toilets of various stations, as he will understand. None the less, I will look at the matter.

The point which I hope my hon. Friend will consider is that, yes, there are some concerns about ticket offices and this is a feature across the whole network, but many people are choosing to buy their tickets in different ways. Although important, ticket offices are not central to many people’s buying habits. He is right that there should be facilities, and there has been a new stations fund and a station improvement fund.

My right hon. Friend the Member for Saffron Walden spoke about the new franchises and what might happen. I hope he might have had a chance to look at the east coast prospectus. Although we are not saying that every new franchise will be of a particular length, we are encouraging longer franchises, particularly in that franchise and the prospectus that we have released. I hope my right hon. and hon. Friends will acknowledge that we have given the operators the chance to recognise some of the things they could do to the benefit of customers outside the standard package. There is a real determination from the Department in the new round of franchising to understand that the consumer must be at the heart of the franchise bids. I hope the prospectus that we have released for the east coast main line will show that.

There is demand not only at the southern end of the line. Cambridge is a fast- growing economy, making a significant contribution to the local and the national economy. That is why we continue to make significant investments in that part of the route as well. The station at Cambridge will undergo significant redevelopment, provided the planning authority comes through. In addition, we are working with Network Rail and Cambridgeshire county council to develop plans for a new station at Chesterton, approximately 2 miles north of the city centre, as well as providing direct access to the rapidly expanding science park, for which rail connections are key.

Throughout the line brand-new 379 class trains are already operating the service between London Liverpool Street and Cambridge, which is benefiting customers along the whole West Anglia main line, including, as my right hon. Friend rightly acknowledged, his constituency, particularly at Audley End. These trains are modern, spacious, high performing, high capacity and highly reliable, and they are widely recognised by passengers as a benefit and an increase in the service.

I shall make a few specific remarks about my right hon. Friend’s constituency, or I would be castigated for failing to do so. I have just mentioned the 379 class trains and I know he recognised that his constituents were benefiting from them. I hope the introduction of those trains will see continually improving reliability on the route. My right hon. Friend, as well as my hon. Friends the Members for Harlow and for Hertford and Stortford, commented on the concern about overcrowding. This is undoubtedly the challenge for the next decade. It is the challenge of the success of the railways. Twenty years ago I used to travel from Hertford North and Hertford East. Services may or may not have got worse in the past 10 years, but they are a significant improvement on 20 years ago when the line was known for its unreliability. This is the challenge of success. Privatisation has brought a doubling of the number of passengers on broadly the same network as we had 40 years ago. That success means that we now have to meet the challenge of overcrowding.

With the introduction of the new Thameslink trains, which will come into service post 2016, and some of the financing of that rolling stock cascade, there will be an opportunity for the trains currently being used on Thameslink to be cascaded to other locations. There is no reason why they could not be used on the West Anglia rail line in future.

[Sir Alan Haselhurst]

My hon. Friend moved rather swiftly from lauding the type 379 as a high-performance train to identifying some Thameslink trains that might be passed down to us. There is quite a distinction there. I had rather hoped that he might indicate that we would not lose the 379s in the way I suggested, or indeed that he might try to give some encouragement to the idea that whoever gets the franchise after 2016 will be committed to having more of the 379s or their equivalent.

[Stephen Hammond]

I can give my right hon. Friend some Christmas cheer by confirming that the 379s will be staying on the West Anglia rail line and will not be moved in the way he suggested. When we consider the new franchise for post October 2016, I am sure that the need for rolling stock enhancement will be part of the tendering process.

As I highlighted at the beginning, I recognise that there is a key limitation on the West Anglia rail line: it is a very busy two-track railway. The plans to three-track and four-track some of its southern sections will undoubtedly be welcomed right along the line. However, my right hon. and hon. Friends are right to recognise, and to pursue, the aspiration for faster and more frequent services. That could be met only by infrastructure interventions.

Four-tracking of the route could undoubtedly be part of that intervention. Unfortunately, if we look at it in the short term, that is unbelievably expensive. The plans developed by BAA in 2007, when it ran Stansted airport and there was higher demand, merely to three-track a section of the route were estimated to cost between £800 million and £1 billion. At the moment, such investment would represent a significant portion of the Government’s rail investment budget. It would therefore require a robust business case. In the medium term, that business case might be made, but my right hon. Friend was right to acknowledge that the Government are spending more on railway infrastructure—£19 billion between 2014 and 2019. None the less, my right hon. and hon. Friends are right to make that case, and I hear them making it.

In the medium term, the Government are supporting the development of the Crossrail 2 proposals, which would link the West Anglia rail line with the South West main line via a tunnel under central London and free up capacity for increased services. Plans are still in the early stages, but the Government are supportive.

In the shorter term, there are still some opportunities for us to improve capacity, reliability and journey times along the route. With the active participation and support of local stakeholders, I am keen to look at some of the short-term operational restrictions linked to level crossings and user-worked crossings. Where trains currently need to reduce speed on the approach to such crossings, I would like to see them able to maintain running speeds and therefore reduce journey times and improve operational reliability.

The Government are looking to develop the rail investment strategy beyond 2019. That work will be influenced significantly by an Anglia route study that Network Rail is shortly to begin. The study, which is due to report in 2015, is aimed at identifying the priorities for investment in the Anglia network. Right hon. and hon. Members will also be aware that the Chancellor announced in his autumn statement that the study will place special attention on the services between London and Stansted, and that extra focus should deliver benefits to passengers right along the West Anglia rail line.

I heard the comments by my hon. Friend the Member for Hertford and Stortford about the London First proposals, which are currently just that. In addition, the interim findings of the independent Airports Commission are due shortly. Clearly, Ministers are not aware of what its recommendations might include, but they will provide some greater clarity on the long-term future of Stansted airport and the future capacity that it might need regarding the rail network, and that will inform decisions regarding my hon. Friend’s constituents.

On the Network Rail study, I encourage my right hon. and hon. Friends and, indeed, all Members representing constituencies along the route to make clear and reasoned submissions to Network Rail. It is important that those representations come from local authorities, local enterprise partnerships, businesses, passenger groups, and of course Members of Parliament. That will help to make a compelling case for future investment. I have no doubt that if that case is made, the Government’s rail investment strategy post-2019 will feature the West Anglia rail line very heavily.

My right hon. Friend the Member for Saffron Walden asked about devolution to the Mayor and TfL. The devolution proposal applies to only three routes, it will happen post-2015, although no formal dates have been agreed as yet, and it will result in a transfer of staff and trains to the Mayor’s jurisdiction. I understand that that will probably not make my right hon. Friend as happy as my earlier announcement.

[Robert Halfon]

While I completely agree with my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), will my hon. Friend consider extending Oysterisation to Harlow, as has been considered in the past, or at least examine the possibilities of smartcard technology so that the many Harlow residents who commute to London can get the benefits that people commuting from other stations, including Ware, now have?

[Stephen Hammond]

My hon. Friend will know that we are undertaking a smart ticketing trial in various other parts of the south-east network. I am happy to consider his proposal. If he were to write to me and seek a meeting, I would be delighted to discuss it with him in greater depth, and with any other Members who wish for the further extension of smartcards to their area.

My hon. Friend the Member for Hertford and Stortford mentioned several times the problems we had with the storm a few weeks back. I particularly remember travelling on that line all those years ago when it was one of the worst-hit lines. I think he will recognise that in certain places a large number of trees overhang the line, more so than on many other commuter routes, simply because of its structure. I am afraid that there was also a certain amount of overhead line damage that significantly delayed the reintroduction of services. None the less, he can be assured that the Secretary of State and I, and other Ministers in the Department, took a great interest in the situation and were in discussions with Network Rail about trying to ensure that lines were brought back into service as quickly as possible.

As I said, it is important that passengers and other interested parties influence the West Anglia route study. That is a chance to make an important contribution to the case for significant investment in the line post-2019.

I am delighted to have been able to respond to this important debate. My right hon. and hon. Friends have rightly made the case that we should not take our eyes away from the problems of overcrowding that their constituents suffer. I have been able to talk a little about some of the investment that is going in and is planned. I hope that that will have given my right hon. and hon. Friends at least some reassurance that the Government take the West Anglia main line very seriously.

Question put and agreed to.

18:04

House adjourned.

Westminster Hall

Wednesday 11th December 2013 Westminster Hall

Wednesday 11 December 2013

[Mr George Howarth in the Chair]

Immigration

Wednesday 11th December 2013 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(John Penrose.)

09:30

[Mr Andrew Turner (Isle of Wight) (Con)]

It is a pleasure to serve under your chairmanship, Mr Howarth.

I asked for the debate today because of public concern about immigration levels. We all know, not least because Members now in opposition have admitted it, that the previous Government had a deliberate policy of encouraging uncontrolled immigration. The right hon. Members for Blackburn (Mr Straw), for Sheffield, Brightside and Hillsborough (Mr Blunkett) and for Edinburgh South West (Mr Darling) have been queuing up to blow the whistle on the Labour record. Lord Mandelson told us in May that they even sent out search parties to find people to come and live in this country, seeking to fulfil their key political aim of making the UK truly multicultural, by encouraging mass migration.

The annual net immigration figure under Labour rose from 48,000 in 1997 to 198,000 by 2009. Between 1997 and 2010, net migration into Great Britain totalled 2.2 million people—more than twice the population of Birmingham. It is no wonder we had a crisis. Members on both sides of the House know that immigration is not just a population problem; it is also an NHS, education and welfare problem. Government figures cited in The Sunday Telegraph last week show that, on average, each immigrant costs the taxpayer more than £8,000 a year in health care, education and benefits. That applies whether they come from inside or outside the European Union.

[Dr Julian Huppert (Cambridge) (LD)]

The hon. Gentleman lists the downsides of immigration. Does he accept that there are also huge benefits and that immigrants contribute substantially to the economy, the NHS and many other aspects of the life we enjoy in Britain?

[Mr Turner]

If the hon. Gentleman listens a moment or two longer, he will find that I come to those points.

No one ever thought to ask the British people whether they wanted what happened. Plans and policies were concealed, and mass immigration happened by stealth. One can only speculate whether Tony Blair would have been swept to power had he gone into the 1997 general election saying, “I will oversee an unprecedented increase in immigration.” Perhaps not—but now we must deal with the consequences of his policy.

Other hon. Members and I sit in our surgeries listening to tales of people living in overcrowded social housing or being on the waiting list for years with no hope of ever getting a home. It is no coincidence that with high net migration, from 2002, there was an increase of more than 60% in social housing waiting lists. Foreign nationals now occupy 8.4% of the housing stock, and among those aged 16 to 40 the figure is 12.6%. On the Isle of Wight we have a relatively small immigrant population, and overwhelmingly those residents work hard and make an important contribution to the community—indeed, they are an important and integral part of it. However, that is not the case everywhere.

I have lost count of the number of people who have told me that they moved to the Isle of Wight because they no longer recognised the places where they grew up; that now, in streets where their grandparents lived, no one appears to speak English; and that they moved to get away from ghettos where they felt they no longer belonged. The effects of mass immigration, mostly into our cities, are felt even in rural areas such as the Isle of Wight. We must recognise that.

I am thankful that the Government have begun to make a difference. They have made progress in cutting immigration from outside the EU. They cracked down on the abuse of student visas, unjustified family visas and—I am glad to say—bogus marriages. However, they have been unable to close our borders to a huge influx of EU nationals who can come whether or not there are jobs and homes for them, schools for their children or doctors and hospitals to care for them. Many British people believe that that must come to an end.

I have recently, in the words of one of my staff, joined the 21st century: I have signed up to Twitter and exchanged views with the intriguingly named Wight Car Tipper. I tweeted that we should extend transitional arrangements for Bulgarian and Romanian nationals and that our Government should have control of our borders. Wight Car Tipper asked me whether I thought his daughter, who has a French passport, should be able to live in the UK and retain the rights she currently has. I replied that it depends on the circumstances. Presumably, with the fine name of Mr Wight Car Tipper, her father is British, and in that case I think that she should be able to come and live here. However, I do not believe that foreign nationals from the EU or elsewhere should have the same rights as a British citizen, and I strongly believe that our Government must have the right to decide who can live and work here.

There is a fine British principle of fair play—of not getting something for nothing, and of making a contribution to society before being entitled to benefit from it. That principle must be applied to those who come to the UK. Someone who has only just arrived cannot have contributed to society. Some people claim that we need more immigrants to pay the pensions of an ageing population. That, of course, glosses over what happens when the immigrants get old—it is simply an argument for an endless influx of new migrants.

I am grateful to see the Minister here to respond to the debate, and extremely pleased that the Home Secretary has recognised at least part of the problem. She has suggested that free movement for future accession countries could be controlled, and that future member states should reach a certain economic threshold before full free movement is allowed. However, that would not deal with the current treaties that we have signed, or the issues that we will face in only a few weeks.

The Government are seeking to deal with some of the problems—the things that attract those who want to come to the UK to take advantage of our generous welfare system—but that approach does not deal with the basic right of so many foreign nationals to live and work here. They have those rights regardless of how overcrowded our island becomes, or how many of our own people are unemployed.

[Mr David Hanson (Delyn) (Lab)]

How many British citizens live and work in Europe at the moment, and how many of them would be affected by the proposals that the hon. Gentleman contemplates?

[Mr Turner]

I do not know the figure, but it is certainly substantial.

[Mr Hanson]

What would happen to those individuals if the policy that the hon. Gentleman suggests—of immigrants not having the right to live and work in this country—were applied to British citizens in France, Spain or elsewhere in Europe?

[Mr Turner]

That is entirely up to the Governments of those countries. I feel that they should have the right to determine that issue for themselves, just as we should for our country.

The Government must try to deal with the concerns of many British people and, indeed, many settled and integrated migrant communities—those who recognise that we simply cannot retain an open-door policy for all current EU citizens. We need a more nuanced policy that is controlled by our elected Government and that works in the interests of the British nation.

In 1973, we signed up to the treaty of Rome, which established the free movement of people across the then common market. Let me be frank: it was a rich man’s club, and the number of people coming to the UK was small. In 1975, net migration was 3,000. Since then, the club has expanded to places such as Croatia, where the average wage is a 10th of that in the UK. It is hardly surprising that people there want to move to the more prosperous parts of the EU.

[Mr Philip Hollobone (Kettering) (Con)]

My hon. Friend is making an excellent speech, which I am following closely and enjoying immensely. Is he as concerned as I am that large numbers of non-EU citizens are now entitled to EU passports and therefore entitled to come to this country? Up to 3 million people from Moldova, for example, can access Romanian passports and will be able to come here from 1 January.

[Mr Turner]

I did not know about that, but I certainly believe it.

Figures published just last week show that net migration unexpectedly jumped to 182,000 in the year to June 2013, due in part to a rise in prospective workers coming from Spain, Portugal, Italy and Greece.

People cannot be blamed for wanting a better life. Let me be clear that I do not blame them; I blame the outdated rules of the EU and the previous Labour Government, who sent out the message that anybody and everybody could and should come to the UK if they want. Britain, however, simply cannot provide a better life for everyone who wants to come here. We do not have the infrastructure or jobs to do that.

[Mr Nigel Dodds (Belfast North) (DUP)]

I congratulate the hon. Gentleman on securing this timely debate. Has he received or been able to obtain any estimate of the number of Bulgarians and Romanians who are likely to come to the UK when the labour market restrictions are lifted on 1 January?

[Mr Turner]

I have not seen any information from the Government. I do not blame them, because they cannot guess. How could they? There is a range of figures that go all over the place. I am interested in sorting these things out once and for all. Whether we get the changes through by January or later, we continue to work on the matter.

I want to pay tribute to the role that so many foreign people have played in our history and still play in our society today. In 1942, the Polish destroyer ORP Blyskawica saved Cowes from Luftwaffe bombs; every year, we from the island commemorate that event and the brave Polish crew. The NHS employs many EU-born and non-EU-born doctors and nurses across the UK—indeed, it could not function without them.

Those are just two of many examples, but shared history and our reliance on skilled workers cannot mean that everybody in the EU has the right to live here. We cannot provide places for people from overseas while less-educated people from the UK cannot find a job. The treaty of Rome was a product of its time. The unfettered, free movement of people is no longer appropriate and polls show that, for the majority of people, it is no longer acceptable.

My hon. Friend the Member for Wellingborough (Mr Bone) recently suggested a five-year extension to the restrictions. That would be a good start, but there is an even better answer: the one recently proposed by the European Scrutiny Committee, which is chaired by my hon. Friend the Member for Stone (Mr Cash).With unanimous support, the Committee believes, as I do, that we should legislate to restore our country’s sovereignty. We should make provision for the British Parliament to disapply EU laws and give British courts the duty to uphold British laws.

The time is overdue for us to stand up to the EU and tell it that this Parliament takes precedence and that we will make our own decisions about who can live here, work here and benefit from our welfare state. The time is fast approaching when the calls for change will be so many and so loud that they can no longer be denied.

[Several hon. Members]

rose—

[Mr George Howarth (in the Chair)]

Order. It should be possible for everybody who hopes to speak to do so. That does rely, however, on people exercising some restraint. If they do not, I may decide to apply a time limit on speeches.

09:46

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to contribute to this debate under your chairmanship, Mr Howarth. I am pleased to have the opportunity to speak. Although I speak from the Opposition Benches, I am not in the business of defending everything that the previous Government did in relation to immigration, but frankly, the suggestion by the hon. Member for Isle of Wight (Mr Turner) that the decisions that we made about the A8 accession countries—which we recognised were a mistake, and perhaps arose from listening too closely to the calls of the business community and its desire for free movement of labour into the UK—were some sort of ideological plot to transform the nature of our society is perhaps something that is better placed in the pages of the Daily Mail.

Let me describe a personal experience. Last Friday, when I was conducting one of my regular advice surgeries, I was talking to a Romanian citizen currently living in the UK. She is a student and is making a significant contribution to our local economy in Sheffield. She was volunteering for AIESEC, which is a student society committed to promoting business, finding business placements, developing skills in an industrial and commercial context and growing global-minded entrepreneurs. She was enthusiastic when she came to Britain, but she was deeply depressed by the public discourse around Romania and Bulgaria and their citizens, which made her feel unwelcome. I think we need to take care how we debate the issue, not only for her sake and others’, but also for the sake of all those UK citizens who have raised concerns, of which all hon. Members have experience, about immigration. They deserve proper leadership from us as politicians, which means being honest about the facts and coming up with the right solutions to the real problems.

I have some sympathy with the Minister. He was right a couple of weeks ago to talk down the fear of a mass influx of Romanians and Bulgarians. He will not be surprised, however, that I have only some sympathy. Much of the problem has been created through the Government talking up the problems of migration for political advantage. We need an honest debate. We have heard a lot of noise, some of which was reflected in the speech by the hon. Member for Isle of Wight, about benefits for newly arriving EU migrants. The impression being given is that EU migrants are freeloaders who come simply to claim our benefits and to exploit our generosity. However, all the evidence, as I am sure the hon. Gentleman knows, suggests that EU migrants make a net fiscal contribution.

A study was published last month by the centre for research and analysis of migration—CReAM—at University college London, which is one of our country’s greatest universities and one of the world’s leading universities. It concluded that recent immigrants—those who arrived after 1999, who constituted 33% of the overall immigrant population in 2011—were 45% less likely to receive state benefits or tax credits than UK natives. Over the same period, recent European economic area immigrants have on average contributed 34% more in taxes than they have received in transfers. By contrast, over the same period, the total of UK natives’ tax payments were 11% lower than the transfers they received.

We welcome the most talented migrants. In 2011, 32% of EEA immigrants and 43% of non-EEA immigrants had university degrees. The estimated net fiscal contribution of immigrants increases even more if we consider that immigration helps to share the total cost of fixed public expenditure among a larger pool.

The main reasons for the large net fiscal contribution of recent EEA immigrants are their higher average labour market participation than UK natives and their lower receipt of welfare benefits. Professor Christian Dustmann, the director of CReAM and the co-author of the study, said:

“Our research shows that in contrast with most other European countries, the UK attracts highly educated and skilled immigrants from within the EEA as well as from outside. What’s more, immigrants who arrived since 2000 have made a very sizeable net fiscal contribution and therefore helped to reduce the fiscal burden on UK-born workers. Our study also suggests that over the last decade or so the UK has benefited fiscally from immigrants from EEA countries, who have put in considerably more in taxes and contributions than they received in benefits and transfers. Given this evidence, claims about ‘benefit tourism’ by EEA immigrants”—

that myth—

seem to be disconnected from reality.”

Another example of the Government talking up the migration issue but introducing measures that damage the economy by targeting the wrong issue is on the issue of international students. The Minister will not be surprised to hear me speaking about that again. I agree that the Government are right, as were the previous Government, to clamp down on bogus students who not only are exploiting our system, but are themselves in many cases exploited by bogus colleges. However, overall, international students bring huge benefits to the economy.

Oxford Economics conducted research on behalf of the university of Sheffield, which looked at the students’ net contribution after all costs to public services—such as traffic congestion and everything else it could think of. The survey was published in January 2013 and showed that during the previous academic year the 8,000-plus international students at our two universities made a net total contribution of more than £120 million to the Sheffield economy. Probably about 6,000, 7,000 or 8,000 local jobs depend on those students. Furthermore, the net benefits generated by the indirect supply chain advantages were assumed to account for approximately an additional £22 million to the local economy. International students obviously bring further external benefits, such as boosts to demand as a consequence of increased familiarity with locally produced goods and the potential for our status as a city and a country to be boosted by the relationship that they build while they are in the UK.

International students are a growing market internationally. The Department for Business, Innovation and Skills has calculated that by 2020 the market could double. Instead of being worth £8 billion to our economy, it could be worth £16 billion; instead of 6,000 jobs in Sheffield, it could be 12,000 jobs. Currently, international student numbers are flatlining, while our competitor countries are taking advantage of some of the measures that this Government have put in place. We should be concerned about that.

The hon. Member for Isle of Wight expressed concerns about things that are happening in the labour market. My concern is that he did not focus on the things that can be done to address issues in the labour market. The Minister for Immigration made a useful contribution before the Home Affairs Committee this week when he was challenged about a statement from the head of Domino’s Pizza about why it was unable to recruit sufficiently from within the UK domestic work force. The Minister rightly made the point that the company should perhaps look at its employment conditions and wages. It would be helpful to consider positive labour market interventions that can create the sort of level playing field that the hon. Member for Isle of Wight seeks.

[The Minister for Immigration (Mr Mark Harper)]

To be clear, it is worse than the hon. Gentleman suggests. The chief executive of Domino’s Pizza was not arguing that he could not recruit in the UK alone. He was arguing that he could not recruit enough people from the whole EU labour pool, and that we needed to start importing low-skilled workers from outside the EU in order that he could keep low wages in his business. That is why I said he perhaps ought to reflect on the terms and conditions. So he was arguing that we should have an unrestricted free-for-all, but I do not think it is the role of Government policy to let multinationals keep wages low when, frankly, they should pay their staff a little more.

[Paul Blomfield]

I agree entirely with the Minister on that point. We should ensure that multinationals pay wages that will attract people to do the jobs. We should also ensure that companies do not recruit exclusively from eastern Europe, as they seek to do. Jobs should be available to local workers in the market. We should also do more to ensure that companies that flout the minimum wage rules are prosecuted. The number of businesses that are fined for employing illegal workers has halved, plummeting from more than 2,000 in 2009 to a little more than 1,000 in 2012. We can talk positively about those sorts of labour market interventions to address many of our concerns.

I will conclude by commenting on something that the hon. Member for Isle of Wight said about a constituent, who is concerned about the way in which their community has been transformed by the influx of migrants. I am sure that if we look back in 50-year snapshots, we will find that people have always expressed such concerns. I am sure that they expressed concerns about my wife’s family, who came across from Ireland to supplement the work force in the UK. I was brought up in Sheffield in the 1960s and it was a relatively monocultural city. The city in which I have brought up my son in the 1990s is stronger, richer and better for having welcomed people from around the world—some to build better lives, some fleeing persecution. I am proud that we are the country’s first city of sanctuary.

09:57

[Mr Philip Hollobone (Kettering) (Con)]

It is a pleasure to serve under your chairmanship, Mr Howarth, and to follow such an excellent introductory speech by my hon. Friend the Member for Isle of Wight (Mr Turner).

I would say to the Romanian constituent of the hon. Member for Sheffield Central (Paul Blomfield), who sounds like an excellent citizen, that the hon. Gentleman rather misses the point. This country should be able to say to someone like her, “Yes, we want you to be an immigrant to our country, because you offer us skills that we don’t have enough of.” The problem is that this country does not have the right to select her; this country has been told by the European Union that it must accept as many Romanians and Bulgarians as apply to these shores.

With respect to the hon. Gentleman, he spoke for far longer than he should have done, given the number of Members who want to contribute. The problem for his constituents is that their concerns are not being properly reflected by him in the Chamber today, because they are very concerned indeed that there will be far too many Romanians and Bulgarians heading to Sheffield from 1 January next year. The concern is not that those individuals are Romanians and Bulgarians; it is about the number of people who can potentially come to this country.

British citizens are concerned that immigration from the European Union is on far too large a scale. It is not about the colour of somebody’s skin or the skills that they can bring, but about the numbers of people. How on earth has this country got itself into the situation where we are opening our borders to all and sundry with absolutely no control at all over the numbers who can potentially come to our shores? That is the concern of the British people.

I am afraid that this esteemed House of Commons is out of step with public opinion. The fact that fewer than 15 out of 650 hon. Members are in this Chamber this morning suggests to me that far too many of our colleagues are not listening closely enough to their constituents. The big issue in the country, about which people are talking every day of the week, is immigration.

My constituency, Kettering, has had a very welcoming attitude to immigration on an appropriate scale and to individual immigrants. But the view of my constituents is that our country is full—we have taken far too many people in and far too many of the immigrants coming to our shores do not have the skills that our economy needs. All my constituents want is for this country to be able to decide how many immigrants we should take, deciding who can come in on the basis of the skills that they can offer. What my constituents do not want us to do is open our doors so that anyone can come in.

I have to say that it is a dereliction of duty on the part of Her Majesty’s Government not even to attempt an estimate of the numbers of people who may come in from Romania and Bulgaria on 1 January. I can understand politically why the Government have decided not to publish an estimate: they do not want to make the horrendous mistake of the previous Labour Government, who said that the number of immigrants from the A8 eastern European countries would be only 13,000 a year. I understand that the population that has come in is 1.1 million and climbing. If people from Romania and Bulgaria come in at the same rate, we will be looking at a figure of 425,000 Romanians and Bulgarians—a number with which, I would suggest, our country cannot cope.

The big magnet for many people from the EU and outside it is London. We often forget that London is the biggest city in western Europe, the second biggest in the whole of Europe, second only to Moscow, and the most cosmopolitan city in the world. But London is full. For my sins, in my spare time I am a special constable with the British Transport police. This weekend I was on duty on the London underground network; on Saturday night I was on duty outside Piccadilly Circus underground station. Leicester Square, Piccadilly Circus and Green Park underground stations were all shut at 7 o’clock in the evening, because too many people were using them. That was not peak time on a Saturday night—it was 7 o’clock.

As the population of this country is driven ever upwards by immigration, 43% of all new house building comes from immigration. That affects not only areas such as London but places such as the Isle of Wight and Kettering, where green fields are being built over to provide the homes that we will inevitably need if we fail to stem the influx of people to our shores. As my hon. Friend said, the issue is not just immigration. It is the NHS, schools— far too many primary school children do not have English as their first language—and all the pressures on our local public services. Frankly, those services need to be guided by Her Majesty’s Government as to how many people they can expect from the new entrant EU countries.

I am therefore concerned that Her Majesty’s Government have ducked the issue. I shall take no more time, because I know that many hon. Members want to contribute, but I would say that this House and this Government are not listening carefully enough to the concerns that my constituents—and I believe a big majority of the country—have about immigration.

10:04

[Dr Julian Huppert (Cambridge) (LD)]

It is a pleasure to follow the hon. Member for Kettering (Mr Hollobone), who I thought made an excellent case for investment in public transport. I hope the Transport Secretary was listening to him.

I agree with the hon. Gentleman on one other issue: when I talk to businesses in my constituency of Cambridge, immigration is one of the issues they raise most often. They have huge concerns about the processes and about the times when it is harder to get people in—for example, when it is hard for people to whom those businesses wish to sell in the US to get into the country because they are Chinese nationals. That is hitting our economy, and we need to work on it as a priority, to make sure that we can get people into this country who will benefit the economy. I thank the Minister for coming to talk to a small handful of such people recently. There have been some improvements.

Overall, immigration is a good thing: it benefits us socially, culturally and economically. There are associated problems—it is not an unalloyed triumph—and there are constraints in terms of housing needs, schools and many other matters. But when we net it all together we find a substantial benefit from immigration—I am not talking about a completely open border but well-managed and well-controlled immigration. It is a huge positive.

There is much we could do to reduce the associated problems. For example, we could run more programmes to make sure that people are able to learn to speak English. It is a shame that the Government cut back English classes for some new immigrants a few years ago, although work is going on now to remedy that. It would be good for people to be able to communicate in our language: it would help them and would also help the state. There are also concerns about people in the UK not being able to find employment. We should therefore be training people in the UK better. I agree completely with that, but it does not mean that we should not also have immigration.

The way the rhetoric on this issue has been going is a real danger. It scares people—I am not surprised that the hon. Gentleman’s constituents are so concerned when he and so many others tell them they ought to be. But it does us harm when we use that rhetoric: when people overseas are looking for where to invest and where the best and the brightest should be going—where people pay huge amounts of money to study—they will look at the rhetoric on this issue in the UK and they will be worried. We are in danger of appearing isolated and closed off, and so missing out on all the benefits we could have.

Yesterday at the Home Affairs Committee I asked the Minister about the balance of competences report into freedom of movement. I agree with the hon. Member for Sheffield Central (Paul Blomfield) that there is a lot of evidence—the best I am aware of is the UCL study he cited—showing that we have seen over £20 billion of net benefit from EU migration. I am sure the numbers are not exact, but that is a very substantial contribution. I would love to hear from the Minister—slightly more accurately than in the masterful answer he gave yesterday—when that report will come out.

This debate feels a little like a rerun. Many of us have been in such debates many times: the Immigration Bill Committee; the Select Committee yesterday; and indeed in this Chamber on 22 October, when the hon. Member for Witham (Priti Patel) played the role the hon. Member for Isle of Wight (Mr Turner) is playing today. Many of the comments were the same; my first intervention was almost exactly the same then as the one I made today, and was made for the same reasons.

I do not think that the previous Government got everything wrong, but they did not get everything right. There was too much abuse and too many loopholes, student migration being an example. I agree with the hon. Member for Sheffield Central that student migration is important, but we definitely saw people coming through to bogus colleges. The previous Government also did not do enough to control the people I blame for many of the problems we face, namely rogue immigration advisers—people who give dud advice. That shows how complex the system is, which is another issue we have to work on.

I say to the Minister today as I have many times before that the most important thing he can do has nothing to do with changing any laws or with anything in the Immigration Bill: it is to get the UK Border Agency, now within the Home Office, to work better. He will be well aware of all the criticisms and problems and the amount of work that has to be done. I also know that he intends to deal with the matter; no Minister would want to run an organisation with such a huge number of problems and complaints. Some 92% of complaints made about the Home Office to the ombudsman are upheld, and they are almost all to do with the workings of the UK Border Agency.

Dealing with the Border Agency will do more than anything else that has been suggested could do. For example, landlord pilots have been suggested—we rehearsed the arguments about those in the Immigration Bill Committee. I disagree with them. The Bill Committee compromised on having a single pilot, although the right hon. Member for Delyn (Mr Hanson) wanted to have five, helpfully listing Lambeth, Derbyshire, Flintshire, Glasgow and Belfast, as he thought that was perfectly acceptable. We disagree on that but we have rehearsed those arguments, and it will be interesting to see the results of that one pilot.

In the Bill Committee we also rehearsed the arguments about child detention. It is a source of great shame for the previous Government that more than 7,000 children were detained in the last five years of their time in office, one of them for 190 days. I argued in the Bill Committee that we should put a measure on the statute book about child detention—I hope the Minister will continue to deal with the issue in the helpful manner of his previous comments. I was surprised to hear the former Labour Minister, the hon. Member for Hackney South and Shoreditch (Meg Hillier), defend child detention; she said that some of her constituents would be “envious” of the conditions at Yarl’s Wood detention centre, which was a rather surprising comment.

Much more can be done, but ultimately it comes down to the basic question: how do we get things right? How do we make sure that we do not spend hundreds of thousands of pounds trying to remove an ill man—again, the Minister was questioned about this case yesterday— such as Isa Muazu? Surely we can think of better things on which to spend such sums. We should try to promote international business, so that people who want to try products made in Britain can get into the country to do so and find out whether they want to buy them.

We should promote students and do what we can not to make it easier for other countries to compete. I talked to the Minister about charging for the NHS. He is right in saying that other countries charge students more to use their health service than we do here, but any marginal step that makes it easier for other countries to compete will make it harder for our students. I hope the Minister will reconsider.

We must change some policies, principally the operation of our visa and immigration system, to ensure that the right people can get in and the wrong people cannot. Those decisions should be made quickly and promptly. We must ensure that our rhetoric shows that we are welcoming to those who should be coming to this country, and that we will not engage in a rant about foreigners.

10:10

[Mr Brooks Newmark (Braintree) (Con)]

I am delighted to be here on what I believe is the first occasion I have spoken on immigration. We do not have an immigration problem in Braintree, which is very much a British, white, working-class area, as are many in Essex. However, the fear of immigration seems to grab people’s attention. My hon. Friend the Member for Kettering (Mr Hollobone) hit the nail on the head in his many reasons why. I congratulate him on an excellent speech.

Immigration is a highly emotive subject, but we must not forget that we are a nation of immigrants. Since Roman times we have had wave after wave of immigrants: from Angles, Jutes and Norsemen in the dark ages to Normans, Jews and Huguenots in the middle ages, to Italians and Irishmen in the 1800s, to West Indians, Ugandan Asians—

[Sir Gerald Howarth (Aldershot) (Con)]

Will my hon. Friend give way?

[Mr Newmark]

No.

[Sir Gerald Howarth]

Thank you.

[Mr Newmark]

—to Indians and Pakistanis in the 1900s, to north Africans and others in the past decade. Indeed, the star of the London Olympics was Mo Farah, a Somali immigrant.

This House has many sons and daughters of immigrants, including the hon. Members for Hackney North and Stoke Newington (Ms Abbott), for Birmingham, Ladywood (Shabana Mahmood) and for Walsall South (Valerie Vaz); my hon. Friends the Members for Windsor (Adam Afriyie), for Maidstone and The Weald (Mrs Grant), for East Surrey (Mr Gyimah), for Spelthorne (Kwasi Kwarteng), for Stratford-on-Avon (Nadhim Zahawi) and for Witham (Priti Patel); and Mr Speaker himself. We must not forget my hon. Friend the Member for Wolverhampton South West (Paul Uppal), who now holds the seat of the late, great Enoch Powell.

Immigrants come here because they want to contribute to our society. They tend to fill a skills gap rather than simply replacing British workers. The City, the arts and sports are full of immigrants who contribute to our society, as is education and the health service. Our national dish today is as much curry as roast beef and Yorkshire pudding or fish and chips. So what went wrong?

Unfortunately, at some stage during the previous Government’s tenure, we lost control of our borders. That resulted in the largest migration in our history and the system broke. There was huge pressure on housing, health care and even education. Something had to be done, and the present Government have grasped the nettle and cut immigration by one third. The Prime Minister announced recently that EU migrants will have to wait before claiming benefits and there will be tests for those who want to do so. Newly arrived jobseekers will not be able to claim housing benefit without a minimum period of residency.

We are tightening up on immigration not because we are little Britain, but because, in the words of the Minister:

“Hard-working people expect and deserve an immigration system that is fair to British citizens and legitimate migrants and tough on those who abuse the system and flout the law…We will continue to welcome the brightest and best migrants who…contribute to our economy and society and play by the rules.”

I say, “Hear, hear” to that.

I am an immigrant. I moved here with my family when I was nine years old. I have always contributed more to society than I have taken. I have built up a successful business, paid my taxes, raised my family and now have the privilege of representing my country and my community in Parliament. The vast majority of individuals who come to the United Kingdom do so, like me, because they want a better life for themselves and their families. They want to make a contribution to society. Let us therefore continue to welcome those who wish to contribute to our society, but let us also toughen up on those who seek only to take advantage of our generous benefits system without giving anything back. This Government are seeking to get the balance right, and I welcome their initiatives on immigration.

[Mr George Howarth (in the Chair)]

Order. Two more Members want to take part in the debate, and I intend to call the Front Benchers at 10.30. Members can do the maths so that there is time for both to speak—[Interruption.] The Front Benchers have indicated that they would be willing to take a little less time, so if the two remaining speakers exercise a little restraint, there should be time for everyone to speak.

10:15

[Martin Vickers (Cleethorpes) (Con)]

It is a pleasure, Mr Howarth, to serve under your chairmanship again. I congratulate my hon. Friend the Member for Isle of Wight (Mr Turner) on securing this timely debate. He described the change that has taken place in this country, on which the British people were not consulted. I refer particularly to the free movement of labour under the European Union.

I am old enough to have taken part in the 1975 referendum when, thankfully, I voted no—I say “thankfully”, but it came to nothing of course. I do not recall that free movement of labour ever played a significant part in that debate. Indeed, had it done so, I am sure that it would have been glossed over by the leaders of all political parties at that time; they assured us that the United Kingdom would have a veto and that we had nothing to fear. Clearly, we were misled, to put it mildly. Unfortunately, the British people fear that their political leaders are not taking note of their concerns.

My part of the United Kingdom has a small immigrant population. The two local authority areas that make up my constituency have 5% and 3% non-British populations. The latest figures from the Office for National Statistics show that 7% of those in north Lincolnshire and 4% in north-east Lincolnshire were born outside the UK. Those figures are remarkably low compared with many parts of the country, but that does not alter the fact that immigration is the No. 1 issue on the doorstep.

People are concerned. To say that they fear change is putting it too strongly, but they are certainly concerned about change. One role of the political process is to manage change, and one reason why people believe the political process is failing them at the moment is that change is coming so quickly that Governments throughout the world find it extremely difficult to manage that change.

My constituents are not opposed to all immigration, and they recognise the important part that existing communities play in voluntary and charitable organisations, churches and the work force. Spanish nurses have recently been recruited at our two local hospitals. People recognise that they bring a skill and can see the value of that. They may regret that we do not have enough trained nurses in our own work force, but they see an obvious advantage in recruiting Spanish nurses, so they are prepared to accept it.

However, my constituents can also see the tensions only 50 miles down the road in Boston. They are reported on regularly on the regional television news and that causes concerns. We as politicians and as Governments in particular bury our heads in the sand if we do not recognise that we are not serving the best interests of those we represent if we allow unlimited immigration into our provincial towns and cities. Places such as Boston and other provincial towns find it much more difficult to integrate than a large multicultural city does. London is the exception, but the point can equally be applied to, say, Birmingham or Manchester.

Public opinion is clear in this country and if we go by media reports in France, Germany and elsewhere in the EU, populations there are equally concerned. Perhaps the political systems in some other EU countries—where there are list systems and national lists, inevitably making the politicians somewhat more remote from their electorate— allow Governments, as it were, to get away with the fact. Here, however, we have a very close contact with our voters, which is something we are all grateful for.

As I mentioned, it is clear that areas such as north and north-east Lincolnshire are more remote from large-scale immigration, but there is still concern. The Government do people a disservice if they do not recognise that and take appropriate action.

I pay tribute to the Government and to the Minister, who was good enough to visit my constituency in July. We saw then the Border Force’s excellent work and looked at how the considerable container traffic that comes in through the port of Immingham was scanned for potential illegal immigrants and so on. It does great work. We are not a soft touch, as many of our critics would have us believe, but that does not take away the concerns of those we represent. We have a duty to articulate those concerns.

The transition period that expires on 1 January with regard to Bulgarians and Romanians has put the issue under the microscope. Let us be honest: our electorate—I suggest that this applies in Cambridge and Sheffield just as it does in Cleethorpes, Immingham and the towns that I represent—would like that transitional period to be unilaterally extended. I suspect that the Minister will not stand up in a minute or two’s time and say, “Yes, we entirely agree with that and that is exactly what we are going to do,” but we must have more robust action, otherwise the Government and we politicians collectively will pay the political price.

10:22

[Sir Gerald Howarth (Aldershot) (Con)]

As your namesake, Mr Howarth, it is a pleasure to serve under your chairmanship. I am grateful to my hon. Friends for curtailing their speeches to enable me to make a contribution.

I start by paying tribute to my hon. Friend the Member for Isle of Wight (Mr Turner), not only for securing this important debate, but for the significant points that he made. As he said, this is the most important issue facing our constituents. My constituents in Aldershot are constantly raising the issue of immigration with me. They feel that nobody is speaking up for them and that they are on their own. Indeed, they preface all their remarks by saying, “I am not a racist, but—”. They then go on to express opinions that are denounced by our opponents as racist, so they have felt intimidated from expressing their perfectly legitimate and perfectly honourable concerns about how they see their country has been transformed.

Yes, my hon. Friend the Member for Braintree (Mr Newmark) rejoices in being an immigrant; I rejoice in tracing my roots to nowhere else but into the soil of this kingdom. What my hon. Friend needs to understand about the wave of migration, which has so upset the people of this country, is that between 1066 and 1950, we had about a quarter of a million migrants to this country. We have now seen a massive change, with something like 8 million people coming into this country. The numbers are what is upsetting people. It is not necessarily the colour of people’s skin, although, of course, that brings different cultural challenges. It is the numbers—that is what Enoch Powell was trying to draw attention to in 1968, for which, of course, he got roundly traduced.

Of course, it is now okay to talk about immigration. It is extraordinary—apparently, the Leader of the Opposition has declared that it is all right to talk about immigration. As my hon. Friend the Member for Isle of Wight said, we have had successive former Labour Ministers, including the right hon. Members for Blackburn (Mr Straw) and for Sheffield, Brightside and Hillsborough (Mr Blunkett), apologising for the mistakes that were made. Of course, it was Andrew Neather, a speechwriter for the Labour party, who let the cat out of the bag when he said that it had been a deliberate act of policy to encourage mass migration—the 2.2 million that my hon. Friend the Member for Isle of Wight mentioned. It was a positive decision, as Andrew Neather said, in order to

“rub the Right’s nose in diversity”.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does the hon. Gentleman agree that what adds to the frustration of the people of the United Kingdom is the unwillingness and inability of the Parliament and Government that they elect to deal fundamentally with opinion and the decisions that they should make about who comes to this country and who does not?

[Sir Gerald Howarth]

The hon. Gentleman is absolutely right; that point has been made by my hon. Friends the Members for Cleethorpes (Martin Vickers) and for Kettering (Mr Hollobone), so I think there is unanimity here about that.

There is a feeling in this country that we are full up. We accept that many people wish to come to this country; it is a most fantastic country—the most fantastic country in the world. I do not blame people for wanting to come here, of course not. I can perfectly see why they want to, but it is adding enormous pressure to our way of life, and there are other changes to which I wish to refer in a moment.

However, I am not suggesting that all immigration is bad for this country—quite clearly, it is not. My hon. Friend the Member for Braintree is clearly one of the most outstanding examples of why we should accept migration into the country—[Hon. Members: “Hear, hear!”] I hear my hon. Friend the Member for Braintree say “Hear, hear!” He is never short of confidence in his own opinions, which is encouraging to see in a politician.

I say to the hon. Member for Sheffield Central (Paul Blomfield) that he is absolutely right about overseas students. I could not agree with him more. I was the Minister for international security strategy, with responsibility for defence exports. The most fascinating thing about going around the world was finding people who had been trained in the United Kingdom.

Take, for example, Prime Minister Najib, the Prime Minister of Malaysia, who went to the university of Nottingham. I do not think there is a more enthusiastic supporter of the university of Nottingham than the Prime Minister of Malaysia. That has been of huge benefit to the United Kingdom, and that is repeated all round the world. I can see the merit in that, but the fact is that our people are concerned about the practical and cultural effect.

Let me touch briefly on the practical effect. As MigrationWatch has pointed out, there is massive pressure on housing and services. We are constantly reading in newspapers that house prices are going up. Of course they are—there is a shortage of supply and an increase in demand. Where are all these 100,000 Somalis going to be accommodated? Where will all the incoming people from Romania and Bulgaria be accommodated?

We are not building houses, and why not? In part, because our constituents feel that we are already full up in our communities, so there is a massive challenge there. As MigrationWatch has said, we will need to build the equivalent of eight of the largest cities outside the capital in 15 years. For the next 20 years, we will need to build a new home every seven minutes, night and day, just for the new migrants and their families, because it calculated that the UK population will reach 70 million in the next 15 years. Parliament cannot allow itself to ignore those massive pressures on our country.

My second point is about the cultural considerations. I do not know when I was ever given the opportunity to vote on diversity. Everybody said, “What a wonderful thing diversity is.” Personally, I happen not to like curry, but I understand that many people do. Indeed, I represent the garrison town of Aldershot—I am proud so to do—and the Army seems to eat nothing but curry. That makes my visits to the Army slightly tricky, but there we go.

Diversity has been a mask to distract attention from people’s concerns that their own way of life has been changed. One of the interesting things about the latest wave of migration is how those new migrants to our country are not content simply to accept our way of life, our customs or even our laws. That is wholly contrary to the practice adopted by previous waves of migration to this country—most of which, of course, one has to say, have been from other European countries.

We now have the problem—it is a problem—of Islamic fundamentalism in this country. These are people who are demanding that we change our laws—that we have sharia law. I read in the newspapers that in parts of east London, people are challenged not to adopt certain practices—not to drink and not to show affection in public—because “This is an Islamic area.” In the House of Commons, we need to wake up to what is going on in our country. I freely accept that it is not happening in Aldershot, but it is happening, it would appear, in other parts of the country.

We also have the graphic account being given in court at the moment of the complete savagery—there is no other way of describing it—of the murder of Drummer Lee Rigby. Listening to the proceedings in court at the moment, I hope that the whole nation is completely shocked by the savagery—the brutality—that is happening in our capital city. We cannot in Parliament ignore these issues.

The assistant commissioner of the Metropolitan police said last week that in the last two years there have been 400 arrests for terrorist offences, with 80 people charged. He was very fearful for the future of this country, and I do make the connection that this is associated with migration into this country. We have a growing threat to our way of life. There is a man called Anjem Choudary whom I have denounced in this House for the last 15 years. He seems to be able to act with complete impunity, advocating hatred of our way of life.

My hon. Friend the Member for Kettering has done a marvellous job in proposing a Bill to ban the burqa. That is something that I find deeply offensive—that women are wandering around in our country and we cannot see their faces. It is contrary to our culture. I have asked my right hon. Friend the Home Secretary to ban it. She has said that she will not, but I think that there is a very strong case that the wearing of the burqa should be banned in courts and where people are encountering officials. After all, if a young lad goes into a shop these days, he is told to take off his hoodie; that does not seem to me to be any different in principle.

I agree with my hon. Friend the Member for Braintree again—my hon. Friend the Minister is doing a sterling job in this field, and it is a massive challenge. The Home Secretary was in Brussels last Friday, arguing the case for the kind of changes in the migration rules within the EU that are necessary. I warmly welcome that, but I say to the Minister that I find two things in my constituency surgeries.

One involves the women who have been inveigled into marrying a foreigner, generally on holiday, principally in north Africa. They get back here. The guy is given leave to remain, and then he sugars off. Can we get them deported? No, because we get told that this is all about data protection and all the rest of it. I say to my hon. Friend that that has to stop.

The second category of people is those who come to my surgery with a litany of appeals that have been rejected. Why are they still here? Why are we not deporting these people? I am perfectly happy to name them and to help my hon. Friend to remove them from this country. The failure of the Government to remove these people is itself undermining the Government’s stand on immigration.

Mention has been made of the contribution that immigrants have made, and we have all seen that the Poles and other east Europeans work incredibly hard. Our country is suffering from a lack of aspiration among our young people. I am not the first to have said that. Our education system has to do a great deal more to teach our young people the five R’s—reading, writing, arithmetic, right and wrong—to prepare them for a world that is becoming, as my right hon. Friend the Prime Minister says, extremely competitive.

We need only go to countries such as India and Malaysia to see and feel the palpable sense of aspiration. When we talk to a publican who cannot get anybody even to turn up for an interview to come and work in his pub, our people have to start accepting that they have to do some of these jobs, that they have to have more aspiration in their lives, because otherwise, I am afraid, the prospects for the country are grim.

I will leave the House with this reminder. In 1960, the population of this country was 52 million, in 2010 it was 62 million, and in 15 years’ time it will be 70 million. There are practical and cultural considerations that the House must not and cannot ignore.

10:36

[Mr David Hanson (Delyn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Isle of Wight (Mr Turner) on allowing us one and a half hours of parliamentary time to debate a very important issue. You will have seen, Mr Howarth, that it is clearly a complex and multilayered issue. We have had discussions about the importance of integration and of the impact of European migration, but we have also heard very strong contributions about the need for business, for students and for tourism. We need to reflect on all those in any positive response to the debate that we are having today.

I start by echoing what the hon. Member for Braintree (Mr Newmark) said in what I thought was—I hope I will not upset him by saying this—an excellent contribution: that immigration has benefited the United Kingdom over many centuries. People have come here to build our biggest companies, to create our national health service and to win our sports prizes. I am struck by the fact that we are meeting just off Westminster Hall, which was built by William Rufus, the son of an immigrant, in 1098. I say to the hon. Gentleman that we have a proud history of contribution from immigration, but I also say that we need to examine the fact that real concerns and tensions are caused by some of the issues that have been raised and accepted here today.

I hope that I can help to assuage the fears raised by the hon. Members for Cleethorpes (Martin Vickers), for Aldershot (Sir Gerald Howarth), for Kettering (Mr Hollobone), for Braintree and for Isle of Wight by saying that, yes, mistakes were made by the previous Labour Government. If I may say so, however, I do not think that it was as the hon. Member for Isle of Wight said. There was no mass plan for increasing multi- culturalism, but I think that there was a willingness and a wish to ensure that we had a positive approach to eastern Europe.

Under the communist yoke, that part of Europe was not free, not engaged in free-market economies, not trading with us and not developing some of the economies in which we are going to invest resources for the future. That was the case for many years, so I think that there was a willingness. However, my right hon. Friend the Member for Blackburn (Mr Straw) and others have said that there was a lack of transitional controls that should have been, potentially, put in place, and that that has created some community tension. But let us not say that it was in total a bad thing, because I think that we do have some very positive benefits from migration generally.

I can look at my own constituency. The biggest employer there makes aeroplane wings with contributions from French, Spanish, German and British workers. Only last week, there was a £30 billion order for aeroplanes for my constituency. The neighbouring constituency has the site of the Toyota factory—a Japanese factory managed in my area by Japanese staff, creating employment for people in my constituency. Kimberly-Clark in my constituency is also a major employer in my area. That is an American-based company with American staff helping to invest in that company. Immigration brings wealth, prosperity and businesses, but it also brings challenges, as has been expressed.

Particularly in view of the potential for Romanian and Bulgarian immigration from 1 January—like the Minister, I do not know what that figure will be—we must look at labour market issues associated with the exploitation of those who come to this country to work. My hon. Friend the Member for Sheffield Central (Paul Blomfield) and the hon. Member for Cambridge (Dr Huppert) touched on those issues as being important.

I want the minimum wage to be strengthened to stop exploitation. I want local authorities to step up enforcement, and I want fines for non-compliance to be increased. The Prime Minister and the Minister have alluded to the potential for a move in that direction. It is not acceptable for wages to be forced down in this country by immigration from eastern Europe. I want gangmaster legislation to be strengthened and extended to areas such as catering and tourism, which it does not cover at the moment.

[Mr Andrew Turner]

The right hon. Gentleman is making some fair points. The question that he has not yet answered—he has another five minutes in which to do so—is whether those decisions should be made here in the UK or there in Europe.

[Mr Hanson]

I am a believer in a wider Europe, and I do not think we should retrench into the position that the hon. Gentleman has set out. We might look at what changes are needed, but our position in the European Community is a strong one for our markets. We may disagree on the matter, but that is my view.

My hon. Friend the Member for Sheffield Central mentioned recruitment agencies. As we discussed in the Immigration Bill Committee, there are websites on which people try, in contravention of the Equality Act 2010, to recruit staff solely from eastern Europe or, increasingly, from southern Italy. I do not think that that is fair or right, and we should look at measures to outlaw such recruitment. In my constituency, local people cannot access vacancies in certain factories because staff are recruited solely from eastern Europe. That has to be wrong, and we should deal with that labour market issue.

We must strengthen and enforce housing legislation. I believe that the Minister agrees, because he has mentioned beds in sheds. We need to end the practice of shifts of people in the same accommodation sleeping for eight hours, working for eight hours and spending eight hours on the street, as happens in my constituency and in many others. We must take action to tackle that, because it undercuts the UK labour market and exploits those who come here legitimately for work.

We must also focus on the positive aspects of immigration. I have had representations from businesses—I even met some this morning—through London First and others. They tell me that, as the hon. Member for Cambridge and my hon. Friend have said, we need to attract people from the student community abroad, to ensure that they not only bring fees and spending power to the country but carry the good will of this country with them into their future work. The Prime Minister of Malaysia, or the future chairmen or chief executives of businesses abroad, will look back on their time in the UK with fond memories. That is an unseen export that we should contribute towards.

In addition to attracting students, we must also focus on tourism. I discovered last week that Chinese tourism is worth £103 billion to the rest of the world, but in this country we benefit from only £300 million of that amount. We need to increase our share of that market. To give credit where it is due—I try to be fair—the Prime Minister has tried to do just that. We must not ignore the fact that immigration is not only about eastern Europe; it is about opening our borders to allow people to get in for tourism purposes and to spend their money. I agree that we also need to look at business issues, which are important. If someone wants to come here to invest £1 million or £2 million in creating a business, we must allow them to.

I share the view of the hon. Member for Cleethorpes that integration is extremely important. In many of our towns and cities, including my constituency, the sudden influx of people speaking different languages in supermarkets and on the streets has created tensions, which I hope will ease with time. We must look at how we can maximise the benefits of Europe while having fair and appropriate immigration controls.

That leads me to say that we must ensure that we have strong borders. The report “The Border Force: securing the border”, published yesterday by the Public Accounts Committee, raised some criticism. No one says that the problem is easy to deal with; it was not easy when we were in charge and it is not easy now. We need to look at strong border controls. We need to ensure that those who have been through the system and have failed the residency test are removed from the United Kingdom in a fair way. We need to ensure that people who come here integrate and speak English and that we have a proper and effective immigration system.

I do not think, however, with due respect to the hon. Member for Isle of Wight and some others who have spoken today, that closing our borders in the way they have described by repatriating powers would be a good thing. I do not think that putting up a “Britain is shut” sign will help the economy or the residents of the country, however long they have been here, in the long term.

We have had a useful debate, and discussion of the matter will continue. I would be grateful for the Minister’s response to the points I have raised. There are real steps that the Government could take, but are not taking, to deal with labour market issues, which would assuage some of the concerns that have been raised today.

10:46

[The Minister for Immigration (Mr Mark Harper)]

It is a great pleasure to serve under your chairmanship this morning, Mr Howarth, and it is a rare treat to have two Howarths in the Chamber at the same time. I suspect that you are at rather different ends of the political spectrum—although you, as Chair, are completely neutral.

I thank my hon. Friend the Member for Isle of Wight (Mr Turner) for securing the debate. As the right hon. Member for Delyn (Mr Hanson) said, it is always good to have one and a half hours of valuable parliamentary time to talk about issues that are of concern to all our constituents. Some are concerned, as my hon. Friend the Member for Cambridge (Dr Huppert) said, about attracting the best and the brightest. Others are worried about the numbers of people coming here and whether they are all making a contribution.

I am also pleased to see that the right hon. Member for Delyn has some friends today. Last time we debated immigration, he was completely by himself with no Labour Back Benchers to support him. Today, however, one Labour Member spoke in the debate and another is in the Chamber, so the right hon. Gentleman’s powers of oratory are clearly attracting a wider audience.

My hon. Friend the Member for Isle of Wight was right to highlight the failure of the previous Labour Government, and one can argue about whether that was the result of a conspiracy or a cock-up. The former Home Secretary, the right hon. Member for Blackburn (Mr Straw) leans towards the view that a “spectacular mistake”, in his words, was made. A significant number of people came into the country when the previous Labour Government were in power, which is partly why people have concerns. It was partly to do with the fact that at the time of the eastern European accession, we were the only major country to have no transitional controls, so most of those who left their own countries to work came to Britain.

It is worth remembering, however, that eastern Europe was not where the largest number of people came from. During the Labour party’s time in office, more than twice as many migrants came from outside the European Union. Although the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), was presented with that information in a clear graphical format during a recent edition of “Sunday Politics”, and she was sitting right in front of the screen, she denied that it is true. I am afraid it is, however. Although the Labour party may argue that it made some mistakes on eastern European migration, in an area in which it had complete control over who came to the United Kingdom, it failed. That is behind many people’s concerns, so we have tried to demonstrate that we are able to take tough decisions to reassure people.

My hon. Friend the Member for Cleethorpes (Martin Vickers) said that even in an area such as his constituency where immigration is low, people see significant numbers of migrants from eastern Europe in neighbouring towns, such as Boston in Lincolnshire. People are concerned about the numbers of people who have immigrated in a relatively short space of time and how successfully they have integrated. That is why we have to address those concerns.

We have made progress. Several Members have referred to the fact that net migration is down by nearly one third since its peak. We are building a system that works in the national interest. Immigration from outside the EU is now at its lowest level for 14 years, and almost back to the level it was when the previous Conservative Government left office.

The good news is that we are being more selective. According to the latest figures, there is a 7% increase in students coming to our excellent UK universities. The hon. Member for Sheffield Central (Paul Blomfield) has made that point before and I am sure he will make it again, as will my hon. Friend the Member for Cambridge. We welcome international students coming to our excellent universities, and both the hon. Gentleman and my hon. Friend have more than one excellent university in their areas. It is important that we welcome students who come to Britain to study. Most will leave, some will stay, some will start businesses and some will help create economic growth, and we very much welcome them. I think my hon. Friend the Member for Aldershot (Sir Gerald Howarth) was being slightly unfair earlier—the “hear, hears” when he congratulated my hon. Friend the Member for Braintree (Mr Newmark) were coming not from him but from the rest of us. He made an excellent speech focusing on those who are going to contribute. People who come here and contribute are important.

I listened carefully to what my hon. Friend the Member for Kettering (Mr Hollobone) said about numbers, which was also a concern of my hon. Friend the Member for Isle of Wight. Two things are worth remembering. First, my hon. Friend the Member for Kettering was concerned that we will see a repeat of what happened in 2004, but the situation now is different, because in 2004 we were the only country to have no transitional controls. This time, we have had such controls and at the end of September, the controls of eight other European countries—including large countries with successful economies, such as Germany—will expire at the same time as ours. We are not the only country that will have a policy change. Secondly, 48% of immigrants come from outside the EU, 36% come from within the EU and 15% of the people coming to Britain are British citizens who have lived overseas for more than a year who are returning home or who have never lived here. It is worth putting the numbers into perspective.

Most hon. Members talked about employment. We have made a difference, which my hon. Friend the Member for Isle of Wight put his finger on when he talked about our immigration policy, our welfare policy and our education and training policy. The difference is in the combination of the three—a tougher immigration policy; a tougher welfare policy that encourages people to work and contribute; and an increase in the number of apprenticeships and more rigour in schools. In the five years to December 2008, under the previous Government, when there was economic growth and jobs were being created, more than 90% of the increase in employment was accounted for by foreign nationals. That is probably what provoked the comment of the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), about

“British jobs for British workers.”

Since the second quarter of 2010, under the current Government, more than three quarters of the 1.1 million new jobs in the economy have gone to British citizens, which is of benefit. Talented people are still coming to Britain to fill gaps in the labour market and contribute, but the growth in employment now benefits British citizens. That is, first, what we are in business to do in Parliament, and, secondly, very welcome.

We are committed to continuing to bring net migration down. My hon. Friend the Member for Aldershot referred to removing people who have no right to be here. The Immigration Bill currently before Parliament contains measures to reduce the rights of appeal and make it easier to remove foreign national offenders, for example, from the UK when they have no right to be here, which is welcome.

[Sir Gerald Howarth]

I salute the Minister for what he is doing. My point is not so much that further measures, which I welcome, are being taken, but that many people in this country have already exhausted the extensive appeals procedures and have still not been removed. Despite people like me writing to say, “Why aren’t they being removed?”, officials do not seem to take action.

[Mr Harper]

I agree with my hon. Friend. We will certainly give ourselves the powers to take action. Since we split up the UK Border Agency earlier this year, there has been a change in the culture of the two new parts. The immigration enforcement branch now feels that it is a law enforcement organisation and its job is to deal with those who break our immigration rules.

On the subject of those who break the law and want to come to the UK, I would like to make a bit of a public service announcement. I noticed in media coverage this morning that Mike Tyson, who wants to visit the UK, is not able to come here because we changed the immigration rules for those guilty of serious offences. A column in The Sun says that he received a “knock out blow”—the first time I have ever, in effect, got in the ring with a boxer. Mr Tyson is a convicted rapist. If people have been convicted of an offence for which they have been sentenced to a period of imprisonment of at least four years, we will refuse them entry to the UK. I say that because his publisher, who organised his UK book tour, said:

“There was a change in the UK immigration law in December 2012 of which we were unaware.”

That is a fault on their part. I will say in Parliament, therefore, to make the position clear, that we have toughened the immigration rules and people who are criminals who want to come to the UK will not be able to if they are guilty of serious crimes. The measure is welcome and has been welcomed by many who support victims of violence. The child protection campaigner, Sara Payne, said:

“I think the Home Office got it right.”

I savour those words; I do not often hear people say them. She said:

“The rules don’t change just because the offender is famous.”

That is an important point. People have to obey the law. The Government make no apology for toughening up the rules in 2012, and those rules will apply to people equally, whether they are famous or not.

Before I move on, I shall pick up on the intervention from my hon. Friend the Member for Aldershot. The Immigration Bill will reduce the number of appeals and tighten up the rules on article 8, putting them in primary legislation. People who have no right to be here, for example a foreign national offender we are trying to remove, will have fewer opportunities to argue that they should be able to stay, and we will be able to remove them more effectively. I hope my hon. Friend welcomes that.

There was much discussion about labour market rules. The right hon. Member for Delyn mentioned advertisements that aim to hire only foreign nationals, which are unlawful already. I said during a debate on the Immigration Bill that I would draw such advertisements to the attention of the Equality and Human Rights Commission, which is the regulator and enforcement body in that area, and I have done so. It wrote back to me and, to paraphrase a relatively lengthy letter, it is on the case. I will be able to update hon. Members when the Bill returns to the Floor of the House.

My hon. Friends the Members for Cleethorpes and for Braintree referred to what we are doing as we move towards the end of the year. We are preparing for the transitional controls expiring. Last week, I signed an order, which we laid before the House on Friday, amending the European economic area regulations, to take steps to restrict access to benefits, guard against the abuse of free movement and prevent individuals who are removed from the UK for not fulfilling the requirements of the free movement rules from coming straight back again. Those changes will be helpful. A number of them come into force on 1 January. Those we remove for begging or rough sleeping, for example, will not be allowed to come back unless they can demonstrate that immediately on re-entry they will be exercising a treaty right, coming back to work or study, or that they will be self-sufficient.

I am pressed for time and I want to deal with the other issues my hon. Friend the Member for Isle of Wight raised. We will restrict access to jobseeker’s allowance to six months for foreign nationals who become unemployed. This week, the Department for Work and Pensions is rolling out a toughened habitual residence test to increase the range and depth of evidence collected from benefit claimants to ensure that they are entitled to be here. The Home Secretary has consistently raised that issue at the Justice and Home Affairs Council, and she did so again last week. She received support from a number of member states and, I note, robust support from my hon. Friend the Member for Aldershot.

The Government are taking the tough measures necessary. We are bearing down on numbers, but also ensuring that Britain is open to those who want to come to contribute, to put something back and to make our country wealthier. We have the balance right. I want to continue to make changes and I am confident that hon. Members on both sides might even support them.

Corruption (International Business)

Wednesday 11th December 2013 Westminster Hall

11:00

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

It is a pleasure to serve under your chairmanship this morning, Mr Howarth. I am pleased to have been granted this debate, which I secured as co-chair of the all-party group on anti-corruption, a role that I share with my hon. Friend the Member for Glasgow Central (Anas Sarwar). I am pleased that a number of other members of the all-party group are present today.

We are here to highlight the United Nation’s international anti-corruption day, which took place on Monday this week. Citizens and parliamentarians have been marking the day right around the world, and I am pleased that the United Kingdom is playing its part, too. It is very appropriate that legislators in this country should highlight international anti-corruption day, because we are in a particularly good position to do something about it. Many of the tools that allow corruption to happen are within our control. I therefore hope that today’s debate, albeit brief, will contribute to the momentum of calls for change.

When we speak about corruption, we think about malevolent characters in places far removed from the UK, such as Nigeria, Afghanistan and the Democratic Republic of the Congo. While those might be the sites of theft and where the devastating consequences impact on people, the deals themselves might be taking place just down the road from Parliament, in our capital city. In truth, corrupt officials in developing countries would find it much harder to steal from their citizens if they were unable to use the tools provided by international business, which includes UK citizens, UK-based companies and those listed on the London stock exchange. Those are all elements over which we can exercise some control. We are rightly proud of our aid spending in this country, and I strongly welcome the Chancellor’s confirmation in Budget 2013 that the Government intend to meet and build on Labour’s legacy, which was to set the UK’s historic target of spending 0.7% of gross national income on overseas aid.

It is time, however, to take that a step further. We must ensure that resources are provided in a broader context that ultimately reduces developing countries’ dependence on aid. To do so, we have to look in our own backyard at how domestic business legislation can have a major impact on international poverty. Western business frameworks facilitate illicit financial flows out of Africa. Shockingly, those flows outweigh the amounts that those countries receive from aid and foreign direct investment. We have the power to prevent that, but until we do so, we will effectively keep giving with one hand and taking away much more with the other.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on the hard work that she does in her all-party group, as well as on bringing this matter to Westminster Hall for consideration. Does she agree that, while it is important that we strengthen business connections across the whole world, those businesses must be transparent and accountable? Does she agree that the UK ambassadors in those countries could act as a catalyst to make change happen and to prevent corruption?

[Catherine McKinnell]

The hon. Gentleman makes an interesting point, and I am interested in what the Minister will say in responding to this debate. As the Government, they could exercise their influence to ensure that UK ambassadors play their part in tackling international corruption, which we know damages developing countries.

It is important to recognise the context in which we are speaking. Today is 11 December, and on this day, 800 women will die unnecessarily in childbirth, 29,000 under-fives will die from preventable causes, 67 million children are not in school when they should be and almost 1 billion people will go to bed hungry. The money to remedy that appalling situation is entirely available but is often being stolen for private gain.

Since the creation of the Department for International Development by the previous Labour Government in 1997, the UK has played a leading role in tackling these problems, and we should celebrate that important work and recognise that it is very much being continued under the coalition Government. It is vital that we continue to provide targeted, efficient and comprehensive aid where we know it will have a significant impact on the life chances of our fellow global citizens. However, those citizens are not simply asking us for direct assistance; they are asking us to look at how the conditions that we regulate continue to make and keep poor people poor.

To consider the role of western countries in this scandal, let us take a hypothetical example. A corrupt Minister tenders the mining rights to his country’s substantial mineral wealth. A multinational company guarantees winning the tender by sweetening its application with a large bribe. It most likely does so using a shell company to provide anonymity and an almost total guarantee that the money will be unrecoverable by officials. Alternatively, perhaps the Government sell the mines directly to a recently registered company with no employees, premises or registered activities. The Minister oversees the sale of the assets at as little as 5% of their market value, and the company then sells the assets on for a hefty profit, making sure that the corrupt Minister is well compensated personally for his generous deal. The shell company hides the often overly close relationship between the individual buying the assets and the person selling them, and corporate vehicles essentially render owners unaccountable for their actions.

After the deal, both the Minister and the company have illegitimate wealth from which they wish to benefit, and that is where the second element implicating international business comes to the fore: the laundering of ill-gotten gains through western financial institutions. To access the global marketplace, individuals need reputable banks in countries with strong property rights, such as our own. Without banks willing to take their cash, criminals would be unable to reap the rewards.

Shell companies and money laundering are two major tools provided by western businesses that facilitate devastating global corruption. Before I go on, it is worth commenting on the scale of the problem. Deals very similar to those that I just described lost the Democratic Republic of the Congo—a country at the very bottom of the UN’s human development index—more than its total annual health and education budget combined. In Nigeria, General Sani Abacha stole an estimated $1.3 billion while in power from a country where the national income is just $260 a head.

I suspect that the Minister, who is from the Department for Business, Innovation and Skills, is wondering what he is doing here, or is slightly concerned that he has arrived to respond to the wrong debate, because much of what I have discussed so far relates to the Department for International Development. However, many of these deals, such as the lost funds in the Abacha case, are alleged to have been laundered through British banks, and it is our own country’s role in this global scandal to which I turn.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing the debate. Does not the point that she just made highlight the fact that this issue needs a cross-governmental approach? It is not about one Department looking at this, but a joined-up approach that includes the Department for International Development, the Treasury, the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office. Through that, we can ensure that the UK continues to be a gold standard when it comes to its relationship with the world.

[Catherine McKinnell]

My hon. Friend makes the case very well and I thank him for his work in the all-party group promoting these issues. He succinctly highlights the key message that we want to convey to the Minister. He can work with other Departments, which will help us do what we can to bring an end to some of the corruption that is causing devastation in developing countries.

Our role is in part a consequence of the sheer scale of our financial services, which undoubtedly play a major role in the nation’s economy. The UK accounts for 18% of cross-border banking and houses 251 foreign banks—more than any other country. London has been voted the most attractive financial centre for asset management and is the largest currency trading centre in the world. However, we are also implicated through our links to British overseas territories and Crown dependencies, which, together with the UK mainland, account for one third of all shell companies. A number of thefts from the Democratic Republic of the Congo, for example, were routed through the British Virgin Islands.

Thirdly, and on a very positive note, we are also linked by our potential international leadership on this issue. Since 1997, the UK has proved itself at the forefront of international development work and has recently taken steps to lead the world in global transparency too. We very much support the steps that the Government have taken in relation to transparency, particularly the recent Lough Erne declaration, after the G8 summit there.

[Tessa Munt (Wells) (LD)]

I just wanted to comment on the benefits that the Government have introduced through the G8 open data charter and getting agreement to have more transparent company ownership and more transparency about those who control companies. I just wonder what the hon. Lady thinks about beneficial company ownership registry. We have agreed that it will be open, but there is an awful lot that we can do in the way that companies are formed in this country to ensure that this problem is sorted out and that Companies House helps to do so.

[Catherine McKinnell]

I thank the hon. Lady for that intervention. In fact, I was just coming to that point about what we can do on the issue of shell companies and beneficial ownership. I very much welcome—we all do—the steps that the Government have taken to date. Indeed, I personally called for those steps to be taken in my role as shadow Treasury Minister during the consideration of this year’s Finance Act. We have become the first country in the world to commit to developing a public register of beneficial ownership, but it is vital that we implement it effectively. Above all, it must achieve its fundamental purpose of identifying the individuals who benefit from and control a company.

[Mark Durkan (Foyle) (SDLP)]

Like my colleagues, I congratulate my hon. Friend on her success in securing this debate and on her work with the all-party group. As she says, the Government’s commitments in relation to making public the register of ownership are very important, but we have to be absolutely clear that the register will extend to trusts, because trusts in particular have been used to hide ownership, not least—as she said herself—in some of the overseas territories and Crown dependencies.

[Catherine McKinnell]

The hon. Gentleman makes an important point. The key is that this register of beneficial ownership cannot be used as a smokescreen to hide the identities of companies and the individuals who control them. It must be part of the solution to ensure that we have greater transparency, and it must have the effect that I know the Government want it to have.

It is important that beneficial owners are required to provide information such as a passport number or date of birth, so that the register provides a unique, verifiable identifier for every person listed. It is also important that the information goes through some means of verification by Companies House. For example, it could be cross-checked with other registers, such as those of the Driver and Vehicle Licensing Agency or the passport authority. Where company ownership is not direct, individuals should be asked to explain how they exercise control, and when control changes it should be noted within a reasonable time period. Lastly, it is important that the information is published in line with the principles outlined in the G8 open data charter, to which the UK is a signatory, and on a very practical note, it must be machine-readable and searchable, because the amount of information contained will be vast and it is of no use if it cannot be searched.

[Tessa Munt]

The UK Companies Registry already requires changes of names of directors to be made within a 14-day period, so it should not be difficult to require other changes, particularly as something like 98% of companies that are registered with the UK Companies Registry are actually private, small, family businesses, where the ownership is terribly clear already. It is only the very small percentage of companies that are trying to hide things that we need to get to.

[Catherine McKinnell]

The hon. Lady makes a very important point. This register of beneficial ownership should not be an onerous burden on business. It should not only make it as easy as possible for banks’ due diligence officers, civil society groups, investigative journalists and foreign law enforcement officials to use the information on it, but for companies themselves to register the relevant information with the necessary authorities. The more people who are able to access this information easily, the more we can guarantee its accuracy.

It is vital that the register is fit for purpose, so the eyes of parliamentarians from across the House will be on the Government as they implement their own pledge next year. I and other members of the all-party group on anti-corruption will make sure that the Government make every effort to introduce the legislation to make that happen.

Money laundering has been much discussed in recent days, during the passage of the Financial Services (Banking Reform) Bill. Noble members, including former members of the respected Parliamentary Commission on Banking Standards, not least the Archbishop of Canterbury, have been calling on fellow legislators to take this opportunity to tighten up our anti-money laundering regulations, because our current checks are inadequate. In 2011, the Financial Services Authority found that 75% of banks, including the major ones, had inadequate checks in place and a Treasury report published just last month described the common failures as

“fundamental Anti-Money Laundering/Counter-Terrorist financing obligations... that all firms should be aware of.”

The new banking standards created by the Bill present an ideal opportunity to embed anti-money laundering compliance, both at the very top and throughout the culture of British banking.

Finally on the subject of money laundering, it is worth noting that this week is the anniversary of the imposition of a $1.9 billion fine on HSBC for transacting with Mexican drug lords, terrorist financers and those in countries subject to sanctions, including Libya, Burma and Iran. As a result of the deferred prosecution agreement that HSBC signed in order to avoid more serious punishment, its compliance with anti-money laundering laws is being independently monitored for five years. HSBC will be monitored not just in the United States; the Financial Conduct Authority will also be monitoring HSBC’s compliance with UK laws during the next five years. I would be interested to hear the Minister’s views on whether those monitoring reports should be published.

There are some general anti-corruption steps that the Government should consider taking. I draw to the Minister’s attention a Transparency International report on asset recovery that was released this week. Clawing back the money stolen in the type of deals that I have talked about is vital, but at present it is extremely rare. Currently, 99% of illegally obtained money flows undetected through the financial system. The seizure rate could be as low as 0.2%. How many people would steal millions of pounds if they had a 99.8% chance of keeping it?

The report suggests that there should be a new law against corrupt enrichment, which would allow suspicious assets that vastly outweigh the declared wealth of a politician or public official to be seized until proven legitimate. That would shift the burden of proof to the individuals wishing to invest, and away from businesses, which are already under significant obligations. I would be interested to hear the Minister’s views on this proposal.

It is also important to stress the important work of law enforcement in this area. As legislators, we are often very quick to add to the statute book, but of course it is vital that existing laws are enforced. The all-party group on anti-corruption was recently briefed by the head of the Metropolitan police’s proceeds of corruption unit. The unit, which is funded by DFID, costs just 2% of the amount of money that it has recovered, and just 0.3% of the amount of money that it is currently investigating. A £50 return for every pound of investment seems to be a pretty good deal.

The overseas anti-corruption unit, which sits within the City of London police, is also funded by DFID and since its creation in 2006 it has investigated more than 155 cases where corruption or bribery were alleged, resulting in more than 115 suspects being investigated and in the arrest of 80 individuals involving a number of sectors, including energy and natural resources, security, humanitarian aid, construction and engineering, and publishing. For every pound invested in that unit, Her Majesty’s Revenue and Customs retrieves between £10 and £30 from the clutches of shell companies and returns it to the UK public purse. In times of austerity, the Government should clearly be prioritising areas of work that provide such good value for money.

I will conclude by turning once again to those who suffer the impact of these devastating crimes. I would like to relay the words of a Zambian nurse quoted by ActionAid in one of its reports about the alleged abuse of shell companies. She describes what her hospital would do if it received the money that was owed to it. She says that

“maybe that money would be used...to access hard to reach places.”

She goes on to say that at present the hospital staff can only reach

“surrounding areas which we are able to walk to.”

The President of Equatorial Guinea’s son purchased a Gulfstream jet with suspicious funds, so he could probably solve that problem for them. However, I doubt that he will do so on his own. Instead, let us take the opportunity that we have here in the UK Parliament to do it.

11:19

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

This is an important topic and I, too, congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate. The trade and investment White Paper, published in 2011, stated:

“Bribery and corruption are barriers to trade and growth. They hinder development, distort competition and perpetuate poverty.”

That is the Government’s view.

The hon. Lady paid tribute to the United Kingdom’s strong reputation for tackling corruption. Earlier this month, the respected non-governmental organisation Transparency International released its latest corruption perceptions index, which ranks 177 countries and territories around the world on the perceived levels of public corruption. Of those 177 countries, the United Kingdom was ranked 14th. Transparency International’s 2011 bribe payers index ranks 28 of the world’s largest economies according to the perceived likelihood of companies from those countries paying bribes abroad. The United Kingdom ranks joint sixth, alongside Australia, Canada and Singapore. We are ahead of the United States and France.

In its “Exporting Corruption: Progress Report 2013”, which assesses enforcement of the OECD convention on combating foreign bribery, Transparency International recognises the United Kingdom as one of only four active enforcers of foreign bribery. That is the challenge. Beyond the United Kingdom, Germany, Switzerland and the United States, enforcement effort is poor or non-existent.

The United Kingdom is a signatory to the United Nations convention against corruption and the OECD bribery convention. Those conventions require the signatories to criminalise the bribery of foreign public officials by individuals and companies. Transparency International believes that 20 countries, accounting for about a quarter of the world’s exports, including major exporting nations, such as Japan, the Netherlands, South Korea, Russia, Mexico, Brazil and Turkey, do little or no enforcement. Enforcement in France, Canada and Argentina is limited.

To be effective in tackling corruption and bribery, both the demand and supply of bribes must be addressed. That means that we cannot address the problem alone; it requires a concerted and co-ordinated effort, and other countries must contribute more equally to tackling corruption. The reality is that the risks of wrongdoing being discovered and of being prosecuted around the world are uneven. To address that, we are increasingly leading the international agenda on these issues.

When we held the G8 presidency earlier this year, my right hon. Friend the Prime Minister championed an agenda of tax, transparency and trade, and put tackling corruption at the heart of the G8 agenda. At Lough Erne he secured landmark agreements on tax transparency, transparency in the extractives industries and transparency of company ownership and control. That is in the interests of British firms, and those across the world, that play by the rules. It is about ensuring a level playing field for companies, so that trade delivers the benefits that it should for both rich and poor countries.

We are now taking forward those commitments, including establishing a central registry of company beneficial ownership information, and will be ensuring that the other G8 countries meet their obligations, too. We are working actively with our international partners in the fight against foreign bribery. UK law enforcement departments and agencies have provided training and technical assistance to a wide range of overseas law enforcement and anti-corruption agencies, including the Afghan Attorney General’s Office and Bangladeshi prosecutors, and we have participated in a number of joint investigations.

One of the strengths of the OECD convention is that 40 countries have signed it: more than just the OECD members. Through the OECD bribery working group, the monitoring body of the OECD bribery convention, countries are held to account for their efforts to tackle corruption through peer review. We are fully committed to the OECD bribery convention and we make a full contribution to the working group, which is meeting in Paris at the OECD this week and includes a review of the position in Ireland, in which the UK is a lead reviewer.

[Catherine McKinnell]

I apologise for taking the Minister back slightly, but he somewhat glossed over the register of beneficial ownership. I welcome the Government’s making a verbal commitment—he said that they are working on producing that register—but will he comment on the specific requirements that I proposed about the detail in respect of how it will be produced? He must accept that it is not enough simply to have a registry that is titled “Beneficial Ownership” but has no practical function, as such.

[Michael Fallon]

The hon. Lady knows that we are about to publish our formal response to the “Transparency and Trust” discussion paper and we will take forward primary legislation to implement a publicly accessible central registry, as soon as we find parliamentary time to do so. I will, if I may, respond to the hon. Lady in detail in writing on her specific point about monitoring.

The working group on bribery has not been shy about shining the spotlight on the UK. In 2008, it made a point of criticising the UK for having prosecuted no legal persons. Today only nine of the 40 signatory countries—Canada, Germany, Italy, Japan, Korea, Norway, Switzerland, the United States and the UK—have sanctioned a company for foreign bribery. Italy’s first corporate sanction was a temporary ban on public procurement. The German corporate sanctions have all been administrative fines. Our first corporate conviction for foreign bribery in July 2009 may well be the first in the European Union.

The Bribery Act 2010 provides the legal foundation here. In that Act, we have a modern, effective law against bribery that is second to none. It encourages and supports the establishment of ethical standards that are meaningful in the commercial world and society generally. The offence in the Act of failure to prevent bribery reflects the best practice from the working group, in terms of an effective model of corporate liability for foreign bribery. That has better equipped investigators and prosecutors to tackle bribery in the 21st century. Alongside the Act, investment in dedicated anti-corruption police resources has seen a dramatic increase in the number of investigations into allegations of foreign bribery by UK nationals and companies—up from just four investigations in 2006 to more than 20 live cases currently.

Foreign bribery offences are complex and demand considerable international co-operation, and can take years to investigate and bring to court. Consequently, although there have been several domestic bribery convictions using Bribery Act offences, we have yet to see a foreign bribery prosecution using those same offences.

The Serious Fraud Office also continues to pursue foreign bribery cases under the law that preceded the Bribery Act. In August, it charged four individuals with the first Bribery Act offences in relation to corporate behaviour.

Our ambition is to go beyond minimal technical compliance with the various UN and OECD conventions and to maintain a leadership position through best practice legislation that provides a fully effective deterrent to rogue traders. That means ensuring that we have the right tools. The Serious Fraud Office was given new legal tools to investigate foreign bribery allegations and confiscate the proceeds of crime through civil recovery. Earlier this year, we consulted on the introduction of deferred prosecution agreements for use in cases of economic crime, including Bribery Act offences, by corporate offenders. A new scheme for deferred prosecution agreements is provided for in schedule 17 to the Crime and Courts Act 2013, which received Royal Assent in the spring. We intend to implement that legislation in spring next year.

It is understandable that businesses will want to know how they can best comply with the law. We have published advice and guidance on UK Trade & Investment’s overseas business risk website, to ensure that businesses do not spend unnecessary time on disproportionate measures.

The issues that we are debating today are important for the well-being of our economy and the global economy, and for the standing of British businesses across the world. We are committed to ensuring that the UK leads the fight against practices of bribery and corruption. We have come a long way, but we are not complacent. Many points made in this debate challenge us to go further.

11:29

Sitting suspended.

Badger Cull

Wednesday 11th December 2013 Westminster Hall

[Mr Mike Weir in the Chair]

14:30

[Chris Williamson (Derby North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Weir.

I make it clear for the record that I am a long-standing trustee of the League Against Cruel Sports. I want the cull to be abandoned because I do not believe there is any justification for its continuation. Indeed, prior to the recent cull, there was a debate in the main Chamber in which we implored the Government not to proceed. We made it clear that there is no evidence to support a cull. I said that the cull was likely, according to the scientific evidence, to make matters worse.

[Neil Parish (Tiverton and Honiton) (Con)]

The hon. Gentleman says that there is no justification for the cull, so why is it that the Republic of Ireland only got control of tuberculosis once it started culling badgers? This is about badgers infecting cattle with TB, and we need to react strongly. I entirely reject what the hon. Gentleman says.

[Chris Williamson]

I will develop my argument, but the hon. Gentleman is misquoting the statistics relating to Ireland. If we dig a little deeper into the situation in Ireland, it is pretty clear that north of the border, where I believe culling has not taken place, the situation improved considerably more than it did in the south of Ireland.

[Several hon. Members]

rose—

[Mr Mike Weir (in the Chair)]

Order. Quiet in the Chamber. A lot of people want to speak in this debate, so I ask for quiet and for short interventions.

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

Does not the evidence show that, even with the cull, the targets cannot be achieved? More importantly, would it not be better to use the Scottish system?

[Chris Williamson]

My hon. Friend is absolutely right, and I will address his point if I have time.

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

Does my hon. Friend agree that this debate is on so-called control of mainland badgers? Will he please address the intervention by the hon. Member for Tiverton and Honiton (Neil Parish)? This is about scientific evidence; the scientific evidence from Lord May and the breadth of scientific opinion in this country are against the cull.

[Chris Williamson]

My hon. Friend is absolutely right.

[Mel Stride (Central Devon) (Con)]

Will the hon. Gentleman give way?

[Chris Williamson]

May I develop my argument a little further, because I have only just started? I have read only the first couple of lines of my speech, and I have already had five people seeking to interject. Please let me develop my argument before making further interventions.

As I was saying before I was intervened on, the Government disregarded the scientific evidence and my and other hon. Members’ assertions that the cull would make matters worse. They disregarded public opinion. The scientific views of a range of eminent individuals have been completely disregarded by Ministers; we have been confronted by Ministers who from day one have simply been gung ho for the cull and determined to proceed, irrespective of the evidence. It seems to me that Ministers are impervious to reason. Disregarding scientific evidence and public opinion so cavalierly is no way for a Government to make policy.

[Mel Stride]

Will the hon. Gentleman give way?

[Chris Williamson]

May I carry on a little longer?

As we know, the cull has been a dismal failure. The policy is an absolute shambles. Instead of accepting the Government’s mistake, we have seen the Secretary of State for Environment, Food and Rural Affairs indulging in shameless propaganda to try to justify the unjustifiable. The Independent reports him as saying:

“These lovely black and white creatures you see on the telly and you put in your newspaper. They don’t relate to these miserable, emaciated sick animals spewing out disease.”

There is no evidence for that.

In response to my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) on 10 October, the Secretary of State said that

“some of the animals we have shot have been desperately sick—in the final stages of disease”.—[Official Report, 10 October 2013; Vol. 568, c. 281.]

In a written answer to the hon. Member for Brighton, Pavilion (Caroline Lucas), the Minister said:

“The Secretary of State’s comments about sick badgers relate to the comments made to him by contractors and farmers during the culls.”—[Official Report, 18 November 2013; Vol. 570, c. 714W.]

So there is no evidence at all. We are simply getting scaremongering nonsense from the Government. The cull has been a very costly failure.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

I congratulate my hon. Friend on securing this debate.

Scotland is virtually clear of TB in cattle. Is there not an awful lot to be said for the argument that the Government down here, whose experiment has been a folly, should look at the Scottish situation instead of continuing a cull that nobody recognises as being of any use?

[Chris Williamson]

My hon. Friend is right that the Government should look at evidence from elsewhere in the United Kingdom—and, indeed, listen to the expert scientific evidence.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Gentleman on securing this debate. He mentioned my parliamentary question, but does he also share my concern that the Government appear to have done so few post-mortems on badgers that we do not know what the results are? Does he further agree that, in light of the shambles around the current culling policy, there is a real danger that the Government will go down the route of gassing? Gassing is incredibly inhumane. The real answer, which is also cheaper and more effective, is to vaccinate badgers. That is what we should do.

[Chris Williamson]

The hon. Lady is absolutely right. I will address her point a little later.

[Ian Paisley (North Antrim) (DUP)]

Will the hon. Gentleman give way?

[Chris Williamson]

I will carry on before taking a few more interventions.

What I find so scandalous about the whole process, apart from the fact that the Government have disregarded scientific and public opinion, is that the Government have withheld information about the humaneness of the cull. We were assured by Ministers that of course the cull would be humane. We had crocodile tears from Government Members in the debate earlier this year, when they said how concerned they were about animal welfare and that of course the procedure would be humane.

[Ian Paisley]

Will the hon. Gentleman give way?

[Chris Williamson]

I will give way in a moment.

The Department for Environment, Food and Rural Affairs is withholding information about the criteria on which the humaneness of the cull has been based. Surely if the Government have nothing to fear, they will release that information—but of course they have been singularly unwilling to do so.

Public safety has been compromised by the cull. Monitors who are there to watch over the cull have been intimidated by some of the people employed to do the culling. Shots have been fired over the heads of monitors—shots have been fired in the United Kingdom over the heads of people going about their lawful business of monitoring the activities of a cull set up by the Government. They have had shots fired over their heads! That is appalling and disgraceful, and it should be condemned by Ministers, but we have not heard any condemnation from the Government. On at least one occasion, people monitoring the culls have had their vehicle rammed by people who favour the cull.

[David T. C. Davies (Monmouth) (Con)]

Does the hon. Gentleman not accept that there is some scientific evidence in favour of a cull, as well as strong arguments against a cull? Is it not the case that the Labour party in Wales, which is now in government, was in favour of a cull when it was in coalition with Plaid Cymru? It was only when they won an overall majority that they changed their mind and ceased their battle in the High Court. Why is the hon. Gentleman trying to politicise the matter when his colleagues in Wales were determined to fight in the High Court for the right to go ahead with a cull? What has changed since then?

[Chris Williamson]

The fact is that the Welsh Government rejected any suggestion of a cull and are going ahead with a vaccination programme, which I hope this Government will accept for England. It seems a more appropriate way forward, rather than proceeding in the current manner. I am about to come on to some of the scientific evidence, which clearly refutes the assertion just made by the hon. Member for Monmouth (David T. C. Davies).

Public safety has been compromised and costs have spiralled out of control, but the Government say that the policy is based on the previous randomised badger cull from, I think, 1998 to 2006. The conclusions of that cull showed that, far from actually making things better, it actually resulted in a 29% increase in the incidence of TB outside the cull area. I will quote from paragraph 9 of the independent scientific group on cattle TB’s final report, which is a weighty tome that runs to some 200 pages:

“After careful consideration of all the RBCT”—

randomised badger cull trials—

“and other data presented in this report, including an economic assessment, we conclude that badger culling cannot meaningfully contribute to the…control of cattle TB in Britain.”

There we have it. The scientific evidence from the randomised trials could not be clearer. It is there in black and white. I invite the Minister to read it. It was actually produced for the Government, and I simply do not understand why they have been so unwilling to take account of the evidence before them.

The cull has been utterly unsuccessful. It was supposed to kill 70% of badgers, but it has managed only 39% even though it was extended from six to 11 weeks. Cattle have been put at greater risk. Ministers say they are standing up for the farming community and that they want to eradicate this terrible disease, but they are embarking on a programme that is making matters worse. They knew it would make matters worse, because the evidence from the scientific report told them so.

[Andrew George (St Ives) (LD)]

I congratulate the hon. Gentleman on securing this important debate. He mentioned the science and scientific assessment, and he will be aware that Lord Krebs, in the Grand Committee debate on Monday, described the trials as a “complete fiasco.” There is a critical question that the Minister needs to be asked today. Without prejudging the findings of the independent panel, which was charged with assessing the cull’s effectiveness and humaneness, if it finds that the cull was neither effective nor humane, would the Government stop the cull?

[Chris Williamson]

One would certainly hope that the Government would. I am going to refer to Lord Krebs in a moment, and I share the hon. Gentleman’s concerns.

Professor Woodroffe, who is a leading expert in such matters, said:

“It’s very likely that so far this cull will have increased the TB risk for cattle inside the Gloucestershire cull zone rather than reducing it.”

Scientific evidence from a few years ago and contemporary scientific opinion both say that the cull is making matters worse. Yet the Government still want to proceed with more culls.

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

The hon. Gentleman is making a most impassioned speech, albeit one with which I do not entirely agree. Leaving aside the substance of his arguments, perhaps he could address one particular question. One criticism of the trials in Somerset and Gloucestershire is that, according to his argument, insufficient badgers were killed. Had a larger number been killed, would he be congratulating the Government on their success?

[Chris Williamson]

I have fundamental objections to the cull. All the evidence demonstrates that it is likely to make matters worse. Even if the 70% target had been reached, scientific opinion suggests that a cull is not the way to proceed. I urge the Government to follow the route taken by the Welsh Government and to embark on a programme of vaccination.

The Secretary of State seems deluded. Even though the scientific evidence stated that the cull would make matters worse and even though only 39% of badgers, rather than the 70% that was claimed necessary to have the required impact, were killed, the Secretary of State said in a written statement:

“The extension in Gloucestershire has therefore been successful in meeting its aim in preparing the ground for a fully effective four year cull.”—[Official Report, 2 December 2013; Vol. 571, c. 34WS.]

It is unbelievable. The Secretary of State is absolutely gung-ho. The evidence does not matter; he will simply argue that the cull has been a success when, even by the Government’s own terms, it has been a catastrophic failure. The target was culling 70% of badgers, but only 39% was achieved. That is barely half.

[Several hon. Members]

rose—

[Chris Williamson]

The culls are making matters worse, and yet Members are straining at the leash to intervene to support the badger cull. I will give way to the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), whom I know is an inveterate supporter of killing badgers.

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

I am grateful for the opportunity to speak in the debate. The hon. Gentleman gives the impression that the evidence is completely one-sided. Does he accept to some extent the evidence of the British Veterinary Association? We have accepted its evidence in other debates, such as on circus animals. It is concise and focused on this. Does he accept that there are at least some scientists out there who take a contrary view and that the matter is not as one-sided as he maintains?

[Chris Williamson]

I of course concede that some small percentage of individuals—pseudo-scientists, some might call them—[Interruption.]

[Michael Fabricant (Lichfield) (Con)]

On a point of order, Mr Weir. The British Veterinary Association has just been referred to as a group of “pseudo-scientists”. I wonder whether the hon. Gentleman may like to withdraw that statement.

[Mr Mike Weir (in the Chair)]

That is not a point of order. Interventions as points of order are not going to help matters. Many people want to speak in this debate, so I urge hon. Members to control themselves.

[Chris Williamson]

I actually said that some might say that they are—[Interruption.] I urge hon. Members to check Hansard, where they will find that I said that some might refer to it as pseudo-scientific evidence. Irrespective of the fact that some veterinary surgeons argue that the badger cull is justified, many other vets actually take a different and contrary view.

[Mel Stride]

Will the hon. Gentleman give way?

[Chris Williamson]

I will not give way at the moment.

I wonder what on earth the Secretary of State is doing. I am reminded of Einstein’s definition of madness, which is doing the same thing over and over again and expecting different results. Lord Krebs, to whom the hon. Member for St Ives (Andrew George) referred earlier, seems to agree with me. He oversaw the randomised badger culling trials in the 1990s and has labelled this cull a “complete fiasco”, saying that it has been “even crazier” than anticipated. After the schemes in Somerset and Gloucester missed their targets, he said that

“there is no point in doing something if it is the wrong thing.”—[Official Report, House of Lords, 9 December 2013; Vol. 750, c. GC144.]

It could not be clearer. I am not saying that the Secretary of State is mad, but he is deluded if he thinks he can pull the wool over the British people’s eyes. The cull in Gloucestershire failed to meet the Government’s target of a 70% kill rate—it only managed 39%, as we know.

[Bill Wiggin (North Herefordshire) (Con)]

I wish to take up the hon. Gentleman’s point about doing the same thing over and over again. My guess is that there are about 365,000 badgers in this country, and they would need to be vaccinated annually. I would like to support vaccination, but how on earth will we vaccinate 1,000 badgers a day just to keep the population healthy?

[Chris Williamson]

The hon. Gentleman is exaggerating slightly. That will be necessary only in the hot spot areas. However, I will explain in a moment why vaccination is a far better and less costly route.

The Secretary of State’s attitude to the badger cull is deluded. We know that the Government’s cull has failed, we know that it makes matters worse, we know that it is cruel and inhumane and we know that vaccinating badgers is cheaper and more effective. The vaccination of badgers in Wales seems to be working. How it will work in the future remains to be seen, but we think it will work better than the cull.

The magazine Farming Monthly National said:

“Out of nearly 1200 badgers caught in Wales for vaccination, none showed any signs of illness.”

That is revealing, given that the Secretary of State said that badgers are “spewing out disease”. When he was probed on that claim, it turned out to be anecdotal hearsay from the National Farmers Union, which represents only 18% of farmers, and the people who were employed to do the culling. There is no evidence for his claim.

In a written answer to the hon. Member for Brighton, Pavilion, the Government said:

“TB testing in culled badgers is not being undertaken as a routine procedure”.

They went on to say that

“the numbers of badgers found to be carrying TB is not known at present.”—[Official Report, 18 November 2013; Vol. 570, c. 714W.]

They do not even know whether any of the badgers that they have killed so far were carrying TB. They are ignoring all the evidence. It seems that the Government are blind to this matter.

[David Morris (Morecambe and Lunesdale) (Con)]

Does the hon. Gentleman agree that even if we killed every badger in the UK it would not eradicate TB?

[Chris Williamson]

The hon. Gentleman is absolutely right. It is a moot point whether badgers are responsible for infecting cattle with TB. Vaccination is a far better route, with biosecurity measures and restrictions on movement.

14:54

Sitting suspended for a Division in the House.

15:08

On resuming—

[Chris Williamson]

I am about to conclude my remarks. I simply say that I hope that the Government listen to the debate.

[Caroline Dinenage (Gosport) (Con)]

The hon. Gentleman has been generous in taking interventions. I want to make one quick point. During his opening remarks, he presented the issue as a red versus blue one, but it really is not. It is a black and white issue, not a red versus blue one, as many Government Members feel as strongly about it as he does.

The case against vaccination has always been based on its cost as much as anything else, but the cost of policing the cull has spiralled to four times the original prediction. Does the hon. Gentleman agree that the cost of not vaccinating looks increasingly serious?

[Chris Williamson]

The hon. Lady is absolutely right. I am delighted that Government Members are as passionate as I am about wanting to—

[Mel Stride]

Will the hon. Gentleman give way?

[Chris Williamson]

I will not take any more interventions, as I know other people want to speak. I know that some Members on both sides are passionate about this issue. It is important that we have cross-party support, and I hope the Minister will listen to Government Members.

On the cost, there is considerable evidence making it clear that vaccination is a less expensive way of dealing with this problem. When we take into account the cost not only of culling, but of policing the cull, which would obviously not be necessary in a vaccination programme, we see not only that the cull is useless and failing, given the context in which it was introduced, but that it is an expensive failure and much more costly than vaccination.

I hope the Minister will give us an assurance today that, having listened to the scientific evidence, public opinion, parliamentary opinion and Government Members, the Government will abandon the cull. If he will not give that commitment, I hope he will, at a bare minimum, give a commitment to do what I am about to set out. Given the controversy over the cull, I call on the Government—

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Will the hon. Gentleman give way on the point about the controversy?

[Chris Williamson]

If the hon. Gentleman will let me finish on this point, he will, I hope, be able to come in before the end of the debate.

I hope the Minister will support an independent and systematic review by the likes of the Royal College of Veterinary Surgeons or the Royal Society. Such a review could evaluate all the scientific, social, economic, ecological and ethical aspects of the Government’s policy. If Ministers are so sure—

[Mel Stride]

Will the hon. Gentleman give way?

[Chris Williamson]

I am about to conclude.

If Ministers are so sure of their position, they should have nothing to fear from a thorough appraisal of this controversial policy. Such an appraisal would provide the evidence base on which policy decisions could subsequently be based, and it would certainly command public confidence. That is something the Government should consider seriously, and I hope that, when the Minister responds to the debate, he will at least give an assurance on supporting such a review, if he will not give the assurance that the overwhelming majority of the British people want and abandon the cull altogether, as the overwhelming majority of scientific opinion urges.

[Several hon. Members]

rose—

[Mr Mike Weir (in the Chair)]

Order. A very large number of Members are seeking to speak in the debate. I do not know whether we will manage to get everybody in, but in an attempt to do so, I am imposing a four-minute time limit from now on.

15:12

[Sir John Randall (Uxbridge and South Ruislip) (Con)]

It is a delight to be able to speak in this Chamber again, having emerged from my sett. I congratulate the hon. Member for Derby North (Chris Williamson) on introducing the debate. The last time I spoke in this Chamber, I rather thought it was designed to encourage rational debates and to take some of the heat out of our arguments. Speaking as someone who might even be veering slightly towards the hon. Gentleman’s point of view, I have to say that we sometimes have to try to take the passion out of these things, although I know it is difficult.

The hon. Gentleman declared that he is a member of the League Against Cruel Sports. We are not talking about sports, and if we were talking about blood sports, my voting record would show where I stand. I am a member of four wildlife trusts, and I have been a keen wildlife conservationist all my life. I watched badgers from an early age, and I read the seminal work on badgers in the New Naturalist series by Ernest Neal. Generally speaking, therefore, I am a badger fan. However, the debate is not about whether badgers are great creatures; it is about a terrible disease that is causing misery for many farmers and that is affecting their livelihoods and communities.

[Michael Fabricant]

Does my right hon. Friend agree that the issue is not only the misery of farmers and the impact on their livelihoods and families? There is also the misery of other sentient beings—cattle. Some 35,000 cattle are destroyed every year, more than half of which are dairy cows. I do not know whether the solution should be culling badgers, but we do need a solution.

[Sir John Randall]

My hon. Friend is absolutely right. I did not oppose the cull when it was first proposed, simply because the arguments on both sides are very strong, and the reason for setting up the trials was to find out whether culling works. From what I have seen, the trials have not gone according to plan, for a variety of reasons, which other colleagues will go into in more depth.

I am not sure about the issue—I disagree slightly with the hon. Gentleman, who initiated the debate, on this—because I think there is scientific argument on both sides. That is why it is difficult for lay people such as me and for the public to get to grips with this issue.

[Mr Donohoe]

The right hon. Gentleman makes an important point. Lay people do not necessarily get the information, because the Government do not give the facts out. Is that not the case?

[Sir John Randall]

I could not possibly comment, and the hon. Gentleman would not expect me to. I have not looked into that issue. I trust the Government to give out all information properly. Occasionally, if they do not, they need a bit of a nudge. If there are nudges to be given, perhaps they are listening. However, the hon. Gentleman is absolutely right that we need all the facts, but it is difficult to give us all the facts, because everybody’s opinion seems so polarised.

Reluctantly, I did not oppose the cull. I say “reluctantly” because, although I represent a suburban seat—there are badgers there, and a lot of other wildlife—the cull is not something I particularly wanted to happen. However, despite the beard, I am not a bunny hugger just for the sake of it, and there are times when we have to control wildlife.

I want to find out how the culls have gone. I want to be sure that they are assessed properly and that we have all the facts. If they have not been successful, I would propose that no further culls take place. However, if it is proved that the culls have been effective, I may, reluctantly, have to let them proceed again. On balance, I do not think there is necessarily a need for further culls, but I am waiting to be convinced.

None of us in this room or outside must ever forget what this issue really means for individual farmers, their families and, as my hon. Friend the Member for Lichfield (Michael Fabricant) said, cattle. This is an incredibly difficult subject, and we cannot just rush into things on the basis of sentiment.

15:17

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

It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Derby North (Chris Williamson) on securing the debate.

There is agreement in the Chamber that bovine TB is a major issue, especially for farmers. I acknowledge that TB in badgers is part of the problem, and no one has ever denied that it is—it is the Government’s response to that problem that is in dispute.

As we all know, the previous Government spent a significant sum on scientific research, and the overall conclusion from the randomised badger culling trials was that the culling of badgers could have no meaningful impact on the incidence of bovine TB. The pilot culls recently completed were not, therefore, supported by scientific evidence.

[Mel Stride]

Will the hon. Lady give way?

[Angela Smith]

I will give way just once, because of the time limits and because other Members want to speak.

[Mel Stride]

I thank the hon. Lady for generously giving way. On the point about scientific evidence, the debate is, in a sense, slightly premature, because we await the outcome of the independent expert panel report, which will assess whether the culls were safe, humane and effective. In the event that the panel concludes that they met all three of those tests, will the hon. Lady accept, as I do, that the culls should proceed?

[Angela Smith]

The scientific evidence I was referring to was the 10-year, £50-million project, which is the fundamental basis for any science relating to the cull.

The pilot culls recently completed were not supported by scientific evidence. The justification for them was that they were to

“test the assumption that controlled shooting is an effective method of badger removal, in terms of being able to remove at least 70% of the starting population in the area, over the course of a six week cull.”—[Official Report, 15 April 2013; Vol. 561, c. 70W.]

Thus, the pilots were designed to test not the science, but whether controlled shooting could achieve the crucial target of removing 70% of the badger population in the cull zone, that figure being key to achieving even a modest reduction in bovine TB.

Therefore, my first question to the Minister is, what percentage of badgers was culled in the two pilot zones? Furthermore, will he confirm the scientific advice, which indicates that if there is an underachievement of the 70% target, culling is liable to make the incidence of bovine TB worse because of the impact of perturbation? Given that the current performance in the pilot zones could only be improved by the use of cage trapping, surely the Minister will agree that the pilot has failed in its testing of the assumptions I referred to. That is the key point: the pilots were testing controlled shooting against cage trapping.

It is generally accepted that vaccination presents an effective method of disease control; yet we are often told that the cost of badger vaccination is too high. However, as has been mentioned, according to a written answer from the Minister for Policing, the cost of policing the two pilot culls was around £1.6 million. Does the Minister acknowledge that if an effective cull requires cage trapping, it is more cost-effective to tackle TB in badgers by vaccinating than by killing? I should have said earlier that a greater problem is the incidence of TB in cattle. Will the Minister acknowledge that the Government need to focus more on securing an approved cattle vaccine?

The previous Government’s response to the trials was to authorize six badger vaccine trials, which, combined with the vaccination programme in Wales, offered the opportunity to measure the effectiveness of the approach scientifically over time. The coalition, however, announced in June 2010 that

“it would be reducing the number…from six to one in view of its intention of reviewing policy on badger control, and the need to reduce spending.”

Will the Minister now agree that it was short-sighted to destroy the opportunity of making a rigorous scientific assessment of the effectiveness of vaccination in the field? Will he review that decision?

It is clear from scientific briefing that in Britain, badger behaviour is tightly defined territorially, which means that TB in badgers is to some extent contained by the animals’ social structures; so it is hard to fathom why the incidence of bovine TB has climbed so rapidly in recent years. One can only conclude that there is a need to focus on cattle movement and biosecurity to work out long-term solutions with a view to eradicating the disease.

I support my hon. Friend the Member for Derby North in calling for a review.

15:22

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

I shall be brief, and stick to practical concerns including one or two claims that have been made about practical matters, rather than talking about the science, which I shall leave to the Minister.

There are four myths that I want to discuss. The first is the ineffectiveness or otherwise of shooting. As my right hon. Friend the Member for Uxbridge and South Ruislip (Sir John Randall) said, we need to be careful about leaping to conclusions before the independent expert panel reports, but it is worth factoring into the investigations how much of a bearing the quite high level of animal rights activity had on the effectiveness of the shooting exercise. If it emerges that protest activity—whether those involved were innocently exercising their right to protest, which is fine, or were more strident, active and militant—had a negative impact on the exercise, that should be reported in full. The report should cover the question of what the result would have been without that activity.

As I mentioned in the debate that we had in the main Chamber, I detect a little hypocrisy in arguments about the effectiveness of shooting. The same organisations that now claim that shooting is an ineffective method of controlling or destroying a mammal of the size in question said something else on the subject of foxes, in a different debate only a few years ago. The RSPCA said:

“Shooting is widely held to be a humane method of control in skilled hands”.

The League Against Cruel Sports, the organisation that the hon. Member for Derby North (Chris Williamson) is associated with, said:

“Culling should be carried out by the most efficient and humane methods available. In practice we believe this means the use of high velocity rifles by users who have passed a competency test or by humane trapping”.

It seems odd to me that the method that was deemed to be the answer to all the queries a few years ago is now deemed inappropriate.

[Caroline Lucas]

I know that the hon. Gentleman said he would leave the science to the Minister, but it would be good if he knew a little of it. There is a vast difference between culling badgers and culling foxes, and if he had availed himself of yesterday’s briefing by a scientist who works in this field, he would have seen that those animals act differently, so such a correlation cannot be made.

[Simon Hart]

I am grateful for the lesson on countryside management. Actually the method of control is similar and the activity of the animals is very similar. If the hon. Lady had, as I have, spent many hours studying how they behave at night, in the lights of a vehicle or the lights used by an expert, she might reach another conclusion. Perhaps that is a debate for another day.

[Tessa Munt (Wells) (LD)]

Surely it would have been most sensible to mark the ammunition used in the pilot, so that the public could be assured about whether the bullets that were fired reached their target. There has been no such marking of ammunition, so it is not possible to be certain that it did not damage and wound badgers. I have mentioned the issue time and again, and I do not understand why the Department is so loth to do it, so that we know exactly what happens.

[Simon Hart]

The Natural England licensing conditions are clear about the sort of ammunition and weaponry that should be used, and the degree of expertise to be deployed. We all need to wait to see if there was any wounding—let alone what the rate of that was—so I shall not answer the question and I do not suppose the Minister can either.

Opponents of the cull have quite reasonably pointed out that cage trapping can be more effective; but they have also said that it is ineffective, or less effective than it could be. I find that odd. If it is ineffective for the purpose of removal, why should it be effective for the purpose of vaccination? If we can learn anything from what has been said, it is that it is very difficult to trap wild animals, whether to dispose of them with a weapon or to inject them with a vaccine. I do not say that it is not possible. I live almost next door to the vaccination operation that is going on in Wales, and am well aware of the practical difficulties that are being encountered; but we cannot say that trapping badgers to shoot them is ineffective, but trapping them to vaccinate them is effective. That does not wash.

The third myth is that public safety has been compromised. There does not seem to be any evidence. Perhaps the hon. Member for Derby North can come up with hard and fast evidence. Before we bandy scare stories around we need examples. I mentioned the endorsement given by animal welfare organisations in the past few years to the use of high-velocity weapons for the control of other mammals in Britain. It is odd: if it does not pose a public safety issue to put fox control into the hands of someone with a high-powered weapon who knows what they are doing, why should it pose a safety issue when someone engages in precisely the same activity to control badgers, with the same weapon, ammunition and training, in the same place? If someone can answer that question I should be grateful.

The fourth myth is that the cull has increased police costs. The history of the hon. Gentleman in the animal welfare movement is perfectly reasonable, but I venture to suggest that had it not been for animal rights activity—violence, intimidation and damage—carried out in or around the cull areas, there would have been no need for any policing costs. The only policing costs are to do with policing animal rights activity. They have nothing to do with the cost of the cull itself.

[Ian Paisley]

rose—

[Simon Hart]

I give way, because no one else gave way to my hon. Friend.

[Ian Paisley]

It is nice of the hon. Gentleman to take pity on me; don’t cull me.

The only body that has been sanctioned for its activities in connection with the issue is the RSPCA, which has today been accused by the Advertising Standards Authority of being alarmist because of what it has said.

[Simon Hart]

My hon. Friend makes a good point.

I have 21 seconds left, so I shall say that farmers do a fantastic job. They have been through hell in the past 20 or 30 years, and animal welfare organisations have been involved only in the past few years. To my mind, for my family, in my area and for my constituents, farmers are the celebrities we should listen to.

15:29

[Caroline Lucas (Brighton, Pavilion) (Green)]

I add my congratulations to those given to the hon. Member for Derby North (Chris Williamson) on securing the debate. It is critical that MPs should be properly involved in future decisions about the control of TB, and that those decisions should be voted on by the House.

The pilot badger cull can be judged only a spectacular failure, including against the Government’s own terms of reference. No one is leaping to premature conclusions because some of the figures speak for themselves. The policy specified that a minimum of 70% of the badger population should be removed within a single six-week period but, as colleagues have said, contractors are estimated to have removed 65% of the population in the Somerset zone after nine weeks of culling, and less than 40% of the Gloucestershire population after 11 weeks and two days.

We know that killing too few badgers over an extended time frame not only risks further reducing the already modest long-term reduction of new herd TB incidence in cattle that the Government were predicting, but crucially is likely to make things even worse for farmers because of perturbation of the remaining badger populations leading to increased prevalence of bovine TB infection among badgers.

The pilots were also supposed to determine the humaneness of controlled shooting as a method of culling badgers, but only 155 badgers have been subject to post mortem examination during the pilot culls—almost 100 fewer than the low number that DEFRA originally said would be examined. There are no guarantees that all the badgers will have died as a result of shooting. Like me, hon. Members will have heard reports of contractors picking up badger carcasses from roadsides, for example, to meet their quotas.

I have asked the Minister how many of the badgers submitted for post mortem examination were killed as a result of free shooting. He assures me that any cause of death other than shooting would have been identified, but he has so far been unable—perhaps unwilling—to give me the numbers. The issue is important because it impacts on whether we have sufficient evidence to judge the humaneness of controlled shooting. I hope the Minister will provide the information today.

I am anxious that any assessment of humaneness should take account of badgers shot and wounded but not immediately killed. DEFRA has not released details of the exact criteria that the independent expert panel will use to determine humaneness. Having observed the shambles in the pilots to date, I have no confidence that the remainder of the process will be scientifically robust.

The pilots have proved conclusively that shooting is ineffective in removing the number of badgers required if there is to be any chance of reducing the incidence of bovine TB. We know that contractors resorted to cage trapping, which has been more effective than shooting and which any badger expert could have told DEFRA about before the start, but it is more expensive and ineffective overall compared with the alternatives to culling.

I want to make two key points. First, vaccination is a far better way forward.

[Charles Hendry (Wealden) (Con)]

Does the hon. Lady agree that newer approaches to vaccination are emerging and could reduce the cost significantly? Is she aware of the work of the Sussex badger vaccination project, which has a team of volunteers who want to vaccinate? Such organisations should be given a chance to demonstrate their work.

[Caroline Lucas]

I thank the hon. Gentleman for his helpful intervention. I agree with him absolutely, and I am familiar with the Sussex badger vaccination project. As he rightly said, it is a service run by volunteers to offer landowners and farmers in East Sussex the chance to vaccinate badgers at very low cost, thereby providing a humane and less controversial method of tackling the disease. It has said that there is strong evidence that a programme of badger vaccination, combined with a robust cattle control programme, will produce better medium and long-term results than culling in eradicating bovine TB. It has many volunteers on hand to do that. It is just one example of how we could, with the right political commitment, take action that would make real gains in reducing bovine TB and its terrible consequences for our farmers.

The cost of the culls has spiralled out of control when the increased cost of cage trapping and expenditure on policing is taken into account. Based on analysis of DEFRA’s estimates, badger vaccination would cost the equivalent of £2,250 per sq km per year compared with the estimated £2,400 price tag per sq km for the pilot culls. Vaccination is the cheaper option and many other figures show that culling is even more expensive than the DEFRA figure that I cited.

My second reason, and the last point I want to make, is that vaccination works. It reduces the probability of infection by 70 to 75%, even allowing for the fact that not all badgers will be reached and that vaccination needs repeating year on year to include new cubs. It is still more effective and more cost effective than shooting, not least because vaccination allows the badger population structure to remain in place, granting considerable benefits for disease limitation.

My plea is that the Minister should focus on vaccination and rule out gassing, which is inhumane and ineffective. I have asked questions about that, and I am concerned about the responses. Investigation of a cattle vaccine should be a priority to provide some chance of getting rid of the disease.

15:34

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am grateful to you, Mr Weir, for allowing me to catch your eye. I grew up on a dairy and pig farm where my father lost his entire pig herd to swine vesicular disease and my mother was frightened that she would lose her entire dairy herd to foot and mouth disease. I can therefore empathise with my farmers in Gloucestershire whose cattle have had to be slaughtered because of this dreadful disease, which causes a painful death for badgers and other wildlife. Last year, 28,000 cattle were compulsorily slaughtered because of their susceptibility to TB. The cost to taxpayers has been £500 million over the last five years and it will be £1 billion if nothing is done over the next five years.

My constituency is fairly close to the cull and the preliminary results are that it has been successful on two counts: humaneness and effectiveness. If the hon. Member for Derby North (Chris Williamson), who proposed the debate—he is laughing—has a serious accusation about shots being fired above people’s heads, he should report that to the police. They will investigate and if anyone did that, they will have committed a criminal act and should be prosecuted. Let him produce the evidence before he makes such statements.

The real answer is an oral vaccine. The trouble is that it has been around the corner for the 21 years that I have been a Member of Parliament. It solved the rabies problem. An oral vaccine fed to foxes on the continent now renders it sufficiently rabies-free for us to take our pets there.

Much nonsense has been uttered in this debate about the cost of trapping and a licensed injectable vaccine. The realistic figures from the Welsh trial show that that costs about £3,900 per sq km. If that is extrapolated to the Gloucestershire trial alone, the figure each year would be a staggering £1.170 million; I expect that the policing costs of the cull would be less than £1 million. Those who are against the trial cull—I emphasise that it is only a trial cull—should bear that in mind.

Nowhere in the world has a significant reduction taken place without elimination of a significant TB reservoir in wildlife. We saw that in relation to possums in New Zealand, to deer in Australia, and in America.

[Angela Smith]

Will the hon. Gentleman acknowledge that the social structure of the badger population in Britain is completely different from the social structure and behavioural habits of possums in Australia and New Zealand?

[Geoffrey Clifton-Brown]

Having watched badgers, I know that when a badger gets TB it goes into the bottom of the sett, dies slowly over a long time and infects other badgers. That is a fact. The disease is painful and must be eliminated one way or another. Surely we can unite around that. It is not something we want in our wildlife or our cattle.

In closing, I want to make one or two points. A lot of nonsense has been talked about the safety of shooting. If it were not safe, we would have seen more incidents in Gloucestershire. My information is that there has not been unsafe shooting and that there has been humaneness. I do not know of any cases of a badger going away to die. Again, if the hon. Member for Derby North, who represents the League Against Cruel Sports, can produce evidence, I would be interested in seeing it. He made many exaggerated claims in his speech.

We must do something about this dreadful disease. Our farmers have to use one of the strictest biosecurity devices in the world to ensure that their cattle are free of TB, and it costs them a great deal of money.

[Tessa Munt]

Will the hon. Gentleman give way?

[Geoffrey Clifton-Brown]

I will give way to the hon. Lady in a moment.

If we keep imposing those costs on our farmers, vast areas of the south-west—the hon. Lady’s constituency area—will have no beef cattle. We will then import more and more beef into this country and we will lose jobs. That has happened in the pig industry, and it will happen in the beef industry.

[Tessa Munt]

Many farmers in my constituency have an enormous problem with DEFRA and its agencies in respect of taking cattle off farms when they have been proved to be infected according to the criteria. If cattle are waiting on a farm, not isolated, for 21, 22 or 23 days before they are removed, how on earth can we say that biosecurity is at a high level? That is not the case.

[Geoffrey Clifton-Brown]

Nobody would condone any farmer or anybody breaking the biosecurity regime. In fact, the Government, as no doubt the Minister will tell us this afternoon, have tightened regulations still further so that they are some of the toughest in the world. They are imposing a great deal of economic strain on the farmers who have to implement them.

In closing, I simply say that if we want to import more and more of our food, let us get rid of our cattle industry in the south-west by not doing something about TB. For goodness’ sake, let us do everything that we can with the armoury in our box to see if we can at least reduce it, if not eliminate it.

15:39

[Kerry McCarthy (Bristol East) (Lab)]

I, too, would like to congratulate my hon. Friend the Member for Derby North (Chris Williamson) on securing the debate. I, for one, think that he can be very proud of his many years of activism on the animal welfare front.

My hon. Friend quoted Lord Krebs as saying that the “crazy scheme” of badger culling had got “even crazier”. As we have heard, the two pilots carried out in the west country have been a complete shambles, and the worst thing is that that was utterly predictable. The aim of the pilots was to kill 70% of the badger population in the chosen areas, but in Somerset, only 58% had been killed at the end of six weeks, while 64% had been killed at the end of the extended cull period. In Gloucestershire, it was even less successful: 30% had been killed at the end of the six-week period, and 39% had been killed at the end of the 11 weeks and two days after it was extended.

Those figures are based on the figures that the Government came up with after the pilots had already started, when they dramatically revised down the estimates of the number of badgers in the cull areas. Somewhat mysteriously, the number of badgers estimated to be in the Somerset area had fallen from 2,490 to 1,450, and in Gloucestershire, from 3,400 to 2,350. That simply looks like pure guesswork, yet back in October 2012 when the pilots were postponed due to uncertainty over badger numbers, the Secretary of State said:

“It would have been quite wrong to go ahead when it was not confident of reaching the 70% target and could have made the position worse.”—[Official Report, 23 October 2012; Vol. 551, c. 847.]

Why was DEFRA so convinced that it had got the figures right this year, and why did it get them so wrong?

That was not the only time that the Government moved the goalposts. We saw an extension of the time limits to which I have already referred, and we saw a move to cage trapping when shooting proved to be a shambles. As we have heard, extending the culls beyond the original six-week time frame could be very dangerous for farmers. We have heard about perturbation and the fact that if less than 70% of the population is killed, traumatised badgers will be moving out of cull areas. The longer the pilot culls and the shooting are going on, the more likely badgers are to do so, and potentially they could spread TB to surrounding farms that were previously TB-free.

As David Macdonald, chair of Natural England’s science advisory committee and one of the UK’s most eminent wildlife biologists, said at the time of reviewing an extension of the pilots for Gloucestershire:

“Perturbation has undoubtedly been caused in Gloucestershire already and an extension by six to eight weeks is likely to worsen the perturbation even more.”

I also want to talk briefly about the comparative costs of culling versus vaccination. The Somerset badger group’s volunteer-led vaccination programme works with farmers who would prefer to vaccinate badgers on their land. They have vaccinated 140 badgers, which works out at £83 per badger, of which the group charges £25 per badger to the farmer. The group said that if DEFRA is prepared to cage-trap the badgers, it will cover the cost of vaccinating the badgers at a cost to the group of £14.50 each for the vaccine. Is the Minister prepared to consider that offer?

Finally, I pay tribute to the many activists who have protested against the culls and maintained vigils. I met many of them at a demonstration in Bristol a couple of weeks ago. It is quite shocking that people such as the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) described the protesters as “malingerers and scroungers”. I was contacted by a constituent who said that she was deeply upset by that description. She had cared for her husband for five years when he was suffering from dementia. I would also like the Minister to confirm that not one protester has been arrested, and that the Secretary of State’s referring to a small minority who resorted to widespread criminality in their determination to stop this was wrong.

[Several hon. Members]

rose—

[Mr Mike Weir (in the Chair)]

Order. There are still a lot of Members trying to speak. I want to call the Front-Bench Members at five minutes to 4 to give them time for a reasonable summing up, so I am going to reduce the time limit from now on to three minutes to try and get everybody in.

15:44

[Mrs Anne Main (St Albans) (Con)]

I pay tribute to the hon. Member for Derby North (Chris Williamson) for securing the debate; he managed to achieve what an early-day motion signed by about 170 Members from across the House could not. I want to ask the Minister today why the matter has not been brought back before the House. Several other Members who seem to be in favour of the cull have said, “This is only a trial. It is only a pilot.” Yes, it is. It is what the House voted for. I abstained from the vote because I had not had badger incidents in my constituency, and I knew that there was a great strength of feeling about farmers.

I have had my eyes opened since then—I have moved from being neutral to being opposed. I thank my constituent, Mr Cotton, who brought to my attention the dodginess of some of the science that was being referred to, but I will not explore that now, because we do not have the time. Why is the issue not coming back before the House? I am sure that many hon. Members at the time lent their support to the Bill out of sympathy and a real feeling that something needed to be done, but only if it was science-based, and only if it was a trial. This has all the makings of something that will roll on, regardless of the outcomes of these particular trials. I am very concerned that it seems we can move from controlled shooting, which is what the pilots were supposed to be looking at, to caging, which would be achieved if we were going to be using vaccines, and yet we do not say, “Hang on a sec, let’s stop what we are doing. Bring it back before the House and see if the House would rather explore those options.”

Some people have said today that shooting a fox is not particularly different from shooting a badger. Well, one is a protected species and the other is vermin, but also, as I have been reliably informed by people who are very knowledgeable about such things, a badger has a particularly strong head structure. It is very difficult to shoot a badger. It has to be shot in a particular way—potentially down its side or under its arms—and that makes the controlled shooting of badgers difficult. I do not know why it is being said one minute that the pilots are a success, and the next minute, that we are going to evaluate them.

The Secretary of State seems to judge them as a success. I had a letter from him today, which I asked for in October. He said that he believes that there has been a success:

“The extension…has therefore been successful in meeting its aim in preparing the ground.”

Success keeps being referred to. That does not speak to me of an open mind. It sounds to me like a Minister who may consider just rolling it out.

Bring the issue back before the House. It is what Members want. They have made their views clear, and I think the public will understand the concerns of people such as myself, who have moved from neutral to negative. I am sure that if the matter came back before the House now, there would be a very different vote unless the proposals were very different. Please will the Minister listen to the views of Members and the public? It is not all about hugging cuddly creatures; it is all about deciding whether a protected animal should be treated in this way or in another way that may deliver the same result that we all want, which is protecting farmers but ensuring that we are dealing with the problem in the most humane way possible.

15:47

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Weir. I congratulate my hon. Friend the Member for Derby North (Chris Williamson) on securing what is evidently a very popular debate.

The Government’s badger cull policy has been described as nothing more than a fiasco from the start to the finish, which this will hopefully be. Truly, it can be described as a shot in the dark at trying to eliminate the disease. We have clearly seen what has come out of the cull: nearly 2,000 badgers have been killed, millions of pounds have been spent and communities have been divided. Unbelievably, the Government are still considering rolling out the policy of slaughtering badgers in 10 new areas next year.

We call on the Government to cancel their killing plans once and for all, and to focus instead on improving cattle welfare, controlling cattle movements, increasing biosecurity and developing badger and cattle vaccination. I welcome the announcement that the badger cull pilot trial has been stopped after marksmen failed to meet the Government’s target of a 70% kill. Remember that that trial was extended by some weeks after DEFRA confirmed that marksmen had only killed 39% of badgers.

Still, DEFRA Ministers pressed ahead with the cull, despite scientists warning against that untested and risky approach. Instead, what we need is a science-led policy to manage cattle movements better and a vaccine to tackle TB in cattle. The Government have now been warned for more than two years that the badger cull was bad for farmers, bad for taxpayers and bad for wildlife. However, the cull has not helped to resolve the issue at all. Based on recent evidence, culling clearly does not work. Culling risks spreading the disease further, it costs more than it saves and it increases the risk of wildlife crime and of wiping out local badger populations.

It is clear to me that the Government’s policy does not make sense. Instead, they should be implementing a science-led strategy in the fight to reduce bovine TB, including the use of vaccination. In contrast, the Government, I believe, are still proposing to shoot free-moving badgers as the main method of culling. The Government say that the vaccine is not ready. Why is that? It could be because one of the first acts of the Government in 2010 was to cancel five of the six vaccine field trials commissioned by Labour. Also, DEFRA has cut funding for the research and development of a badger vaccine and a cattle vaccine. It seems that the Government still believe that bullets cost less.

I will finish now, because many other hon. Members still wish to speak, by asking the Minister to pause, cancel the culls for good and initiate a robust and genuinely independent scientific review of what went so badly wrong with these pilot culls.

15:50

[Andrew George (St Ives) (LD)]

My primary concern as I approach this subject is for the lives and livelihoods of livestock farmers in my constituency that are affected by bovine tuberculosis. Until people see the impact that it has, they do not fully understand why it is such a significant issue for livestock farmers, particularly in my part of the world, where the number of reactors has been very high.

I am extremely passionate about evidence-based policy making and in 1998 I strongly backed the randomised badger culling trials, which have been mentioned, and that was the right approach at the time. In my view, the evidence has been used rather selectively to advise on the way in which policy should be rolled out by the Government. The worry that I had when the Government came up with their proposal was that it ran the risk of making the situation significantly worse.

In view of the fact that in the Penwith area, where there was a proactive cull, there was only 50% co-operation among farmers and there was a large element of activist intervention as well, it was clear that we would never get a licence there. It was on that basis that I went to the Zoological Society of London, and Professor Rosie Woodroffe and I came up with a proposal to establish a vaccination programme that was community-led, volunteer-led, using the big society approach, across the Penwith area. I am pleased that DEFRA is supporting us—it is doing so in a rather minuscule way, I am sorry to say, but at least it is a start—in providing the vaccine ampoules during the whole programme, up to 2019. This is across 200 sq km of Penwith. We have strong buy-in by the local community. The farmers are coming on board. We have undertaken a pilot in the area. Indeed, I have been out to oversee that and I can confirm, as a result of having been in the field and seen the badgers moving the goalposts and doing various other things in the countryside, that even slimy politicians do not seem to have a perturbation effect on badgers when they are being vaccinated.

I raised one of my questions for the Minister earlier. It relates to what the independent expert panel will conclude. Of course, there has been the “what if” question. What if it finds that, on all three counts, the trials are effective, humane and safe? But what if it finds that they are not effective? It is not even there in terms of judging whether the cull is effective in controlling bovine TB, because it would take years to undertake that. Also, I understand that the independent expert panel has been given only a six-week window; it is looking only at the six weeks. I hope—I have asked the Minister this already—that it will be given an extension to the full 11 weeks or more to review the effectiveness, safety and humaneness of the cull, but I cannot see that there is any sense in allowing the cull to continue.

15:53

[Ian Paisley (North Antrim) (DUP)]

I appreciate your stewardship of the debate, Mr Weir. I want to make three brief points and try to give other hon. Members an opportunity to speak as well.

I am a member of the British Veterinary Association and I think that the aspersions cast on the British Veterinary Association today—the character assassination that was attempted—were wrong and shameful. The many Labour party-supporting vets up and down this country will, I am sure, be very concerned at the way in which they were character-assassinated today by the hon. Member for Derby North (Chris Williamson). I think that he should consider what he said, because his passion in the debate does not give him a right to character-assassinate members of the British Veterinary Association, who have the interests and welfare of all animals in this country at heart.

When I intervened earlier, I mentioned the Royal Society for the Prevention of Cruelty to Animals and I was concerned that its advertising campaign is the only thing that publicly, by an independent body, has been described as “alarmist” in terms of how it has tried to suggest that the only thing to do is vaccinate or exterminate. I wish that we could vaccinate our wildlife in this country and protect it all, but we have to be realists and to make a judgment call about what is more important: sacrificing a few wild animals to ensure that our beef and milking herds up and down this country are protected from a pernicious and nasty disease that ruins lives and ruins many thousands of our cattle in this country, or not doing that. We have to face reality.

The rant from the hon. Gentleman today was very disappointing, because he failed at every opportunity—

[Andrew George]

To take an intervention from the hon. Gentleman.

[Ian Paisley]

No, not to take an intervention; I do not care if the hon. Member for Derby North does not want to hear an intervention from me. He failed to take the chance to support our bovine herd and our farmers and basically tried to portray a picture of it being either them or us. We are all in this one; we have to find a solution to it; and we have to recognise that if an animal is carrying a pernicious disease, it needs to be put down, not only for its own welfare, but for the welfare of the bovine herd.

15:55

[Glyn Davies (Montgomeryshire) (Con)]

This is a very difficult, complex, sensitive and not straightforward issue, but despite all that, I have always been in favour of a targeted pilot cull; I just need to explain why. Perhaps it will be helpful if I describe a bit of the context from which I come. Before I entered public life, I was a livestock farmer; that was my occupation. We lambed the sheep out on the hills, and nothing ever gave me more pleasure than seeing a badger. It was a rare sighting 30 or 40 years ago and a great thrill. I have always been very proud of the fact that we had badger setts on my farm and we protected them. I do not farm those animals any more, but I still insist that the badger setts and, indeed, all wildlife are protected.

Another aspect of the context in which I speak is that I have always had a huge interest in wildlife. I was a trustee of the Montgomeryshire Wildlife Trust before coming here and retain an active interest in developing diversity and balance in our wildlife.

The aspect of the context in which I speak that is perhaps most relevant to today’s debate is that I was a Member of the National Assembly for Wales for eight years until 2007, and for most of that time I was the Chairman of the rural affairs Committee—it had one or two different names. During that period, bovine TB and the control of it was a huge issue for the Welsh Government. In fact, we went to Ireland on a fact-finding mission. We met the various bodies in Ireland, including the badger protection association. When we came back, it was interesting that one of the members became a Minister in the Labour-led Government in 2007 and introduced a piloted cull. It was complex at that stage to introduce a law in Wales, and they made a mistake in the legislation. The intention of that Government for four years was to introduce a targeted piloted cull in Pembrokeshire, and that is what would have happened, only they made a mistake in the legislation.

In 2011, a new Minister took over and decided to introduce a system of vaccination. There is now another new Minister. If I had been allowed to intervene on the hon. Member for Derby North (Chris Williamson), that would have been the question that I asked: what discussions have there been in terms of the view that he was taking and the Welsh Minister? To me, this is crucial. If vaccination would work, everybody would be in favour of it.

[Simon Hart]

Is my hon. Friend aware that the advice of the chief vet in Wales to the former Government in Wales was exactly the same advice as she gives now to the current Government, which is that a cull is the best way forward?

[Glyn Davies]

I thank my hon. Friend for that intervention, principally because it gives me another minute. I actually welcome the fact that there is a different process involving vaccination taking place in Wales, because a number of people are saying that it would be much preferable to move to a system of vaccination, and how could I not agree? But ever since I have been involved in this issue, which is probably about 40 years, I have always been told that an effective vaccination is probably about 10 years away, and the situation is not much different today. It is possible to vaccinate badgers; I am told that in Wales, it costs about £662 per vaccination. Every badger has to be caught every year. All the discussions I have had suggest that what is happening in Wales will not work, will not be cost-effective and probably will not be repeated.

One or two Members have referred to different types of vaccinations. I think they are great, and I hope that the Minister will tell us that he is open to all such suggestions. We want a way of dealing with a hugely complex issue that causes the death of huge numbers of perfectly healthy animals, which disrupts and causes massive distress to a huge number of farming families, and which disrupts and causes disease among our wildlife. We need a way of dealing with this. In the short term, I think we need a targeted pilot cull to make certain that we know that going down the cull route is the best way to deliver what we want.

16:00

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

It is great to be here under your chairmanship, Mr Weir. I will have to rattle through some of my points to try to deal at speed with many of the issues that have been raised. First, I thank my hon. Friend the Member for Derby North (Chris Williamson) for securing the debate. I would like to single out the contributions from my hon. Friends the Member for Penistone and Stocksbridge (Angela Smith), for Bristol East (Kerry McCarthy) and for Inverclyde (Mr McKenzie), and the hon. Members for Brighton, Pavilion (Caroline Lucas), for Carmarthen West and South Pembrokeshire (Simon Hart) and for St Ives (Andrew George).

I would also like to mention the contributions of others of various parties who made significant points in favour of vaccination. I pay particular tribute to the hon. Member for St Albans (Mrs Main), who made it clear that she had changed her mind based on the evidence. She made a passionate contribution, demanding that the matter should be brought back to the Floor of the House of Commons, debated in full in Government time and put to the vote. As she said, I think the outcome of such a vote would be very different from the previous one.

The Government’s badger culls have been an expensive failure for farmers, for taxpayers and for wildlife. For the Prime Minister and DEFRA Ministers to pretend otherwise is to ignore the evidence. In 2012, the culls had to be abandoned because the number of badgers had been counted wrongly, which is a pretty fundamental mistake. There were too many badgers. This year, the badgers have been miscounted again. This time there were too few, but with no satisfactory explanation, which conveniently allowed the Government to revise the targets downwards. That numbers problem should not have been a surprise to Ministers, because in November 2012, 30 leading scientists wrote to the Secretary of State objecting to the culls and noting:

“Setting such minimum and maximum numbers is technically problematic, especially when local estimates of badger numbers are very imprecise.”

The Minister’s estimates of badger population numbers for the first two culls have been repeatedly wide of the mark. For the Secretary of State to add insult to injury by talking nonsense about badgers moving the goal posts was ridiculous. That is not good enough, when there is a risk of spreading tuberculosis by culling too few badgers or eradicating an entire local population by killing too many. The first two pilots, failures as they have unarguably been, have at least taught us one important lesson. We can have no confidence whatsoever in the accuracy of badger population estimates. That knowledge reveals a risk of perturbation or of localised extermination. On that basis alone, until sound population baseline analysis is undertaken, we cannot proceed with these culls, let alone the further 40 that the Government desire.

After last year’s cull cancellations, the Secretary of State told us in October 2012:

“Evidence suggests that at least 70% of the badgers in the areas must be removed.”

That was one of his fleeting dalliances with the concept of evidence. He added:

“It would be wrong to go ahead if those on the ground cannot be confident of removing at least 70% of the populations.”—[Official Report, 23 October 2012; Vol. 551, c. 836.]

The postponed culls were rearranged for 2013. They spectacularly failed to meet the Secretary of State’s targets, which had also been transposed into the essential guidelines set by DEFRA for Natural England stipulating that 70% of badgers had to be culled in six weeks to avoid an increased risk of perturbation. At that point, the Government should have stopped, in accordance with their own guidance and the Secretary of State’s words. There was no grey area, but they turned their backs on the science. They extended one cull by 42 days and another by 93 days. Four of the nine members of the Natural England board expressed concerns, including the chair of Natural England’s science advisory committee, who went on public record in November with his concerns:

“I fear there will be two tragic losers, the farmers who are paying the crippling bill for extending this trial”—

that was the Gloucester trial—

“and the badgers whose lives may be lost for little purpose.”

Professor Rosie Woodroffe described the extension of the Gloucester pilot from six to 14 weeks as “uncharted territory” and added that the additional time risked increasing perturbation and the detrimental effects of the cull. The Minister’s cull policy may have increased the risk of TB in pilot areas and surrounding areas.

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

Does the hon. Gentleman agree that it is a bit of a cheek for the Government to say that the pilot culls have been a success, when those of us who are anti-cull have been told not to leap to conclusions until the independent panel has concluded?

[Huw Irranca-Davies]

That is absolutely right. I do not have time to cover everything, so I will write to the Minister on some issues.

I turn to the meat of the matter. Will the Minister agree to examine the evident problems with baseline badger population analysis and bring forward proposals for more accurate population counts? In the interests of good science and evidence-based policy, will he support a vaccination trial in the south-west of England and compare the results with the cull pilots to establish whether it will be more effective, and more cost-effective, to vaccinate instead of shooting or gassing?

In the interests of transparency, will the Minister agree to publish the full taxpayer and landowner costs of the extended culls, including the cost per badger culled—we anticipate that that will be at least £2,200 per badger—and place a report on the full costs in the Library of this House? Will he agree to strengthen the membership of the independent expert panel to provide additional scientific expertise, and will he be open to suggestions for the composition of that strengthened panel from Labour and others? Will he agree to strengthen and clarify the remit of that panel to ensure that its original task of monitoring humaneness, safety and effectiveness deals adequately and separately, as needed, with the original cull period, the extended cull period and, specifically, the later weeks in which humaneness and effectiveness may have been especially compromised?

Will the Minister publish in full and without delay the transcripts of the independent expert panel, together with any evidence presented, so that full and transparent scrutiny of the decision making by scientific and other peers can take place? Will he also publish in full a report by the independent expert panel? Will he halt any further culls and postpone any announcements on further culls until that report from the independent expert panel has been debated in Parliament with the Secretary of State answering questions? Will the Secretary of State, who has not come to Parliament to answer in full the debate on the extended culls, put any further culls to a vote in Parliament and test the democratic legitimacy of the culls in the country? There has been no vote whatsoever on the extended culls, which is an affront to parliamentary democracy on so controversial an issue.

The numbers attending the debate and the lack of time available for speakers demonstrate the need for the Secretary of State to come to Parliament in Government time to debate the issue, instead of hiding behind repeated written statements. We all accept that we have to eradicate TB for the good of our farmers, but we have to do so in a way that is based on evidence. That is where the Government have failed.

16:07

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

I congratulate the hon. Member for Derby North (Chris Williamson) on securing what has been a lively debate. I welcome the opportunity to outline to hon. Members the Government’s strategy to eradicate bovine tuberculosis and the role that a targeted badger cull can play in that strategy. As my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) set out, we should first recognise the huge impact that the disease is having on the farming industry. Our farming communities continue to suffer as a result of the spread of bovine TB. In the 10 years to 31 December 2012, more than 305,000 cattle were compulsorily slaughtered as a result of the disease. Statistics published only today show that a further 24,600 cattle were slaughtered up until the end of September, solely as a result of bovine TB. Over the past 10 years, the disease has cost the Government more than £500 million, and it is estimated that it will cost taxpayers another £1 billion in the next decade if we do nothing.

Let me start by saying that no one, least of all me, wants to kill badgers. I recognise the sentiment that many people feel towards the animals. As my right hon. Friend the Member for Uxbridge and South Ruislip (Sir John Randall) said, that feeling is shared by many people in the country, and we recognise and understand that. If there were an easy way to tackle bovine TB, we would have done it. There are no easy answers when it comes to reversing the spread of bovine TB, and there is no example in the world of a country that has successfully tackled TB without also dealing with the reservoir of the disease in the wildlife population. In Australia, a national eradication programme spanning almost three decades enabled the achievement in 1997 of official freedom from bovine TB and an infection rate of less than 0.2%. The comprehensive package of measures included a cull of feral water buffalo. The comprehensive and successful package of measures to eradicate the disease in New Zealand focused on the primary wildlife reservoir of brushtail possums. As a result of those efforts, New Zealand is on the verge of achieving bovine TB-free status. Closer to home, the Irish Republic has also had a comprehensive eradication programme, which included the targeted culling of badgers in areas where the disease is attributed to wildlife. Since 2000, there has been a 45% reduction in TB breakdowns.

[Angela Smith]

Will the Minister give way?

[George Eustice]

I will make some headway.

A number of European countries that have a known problem with TB in wildlife are tackling that reservoir of disease. Badger culling is undertaken in Switzerland and France, and deer and wild boar are culled in the Baltic countries, Germany, Poland and Spain. International experience clearly shows that one part of a coherent strategy to tackle the disease must include tackling it in the wildlife population.

[Angela Smith]

The Minister makes the case with international comparisons, but he must acknowledge that the structure of badger populations in Britain is different from that in southern Ireland and across Europe, which makes the case for culling in Britain unsustainable.

[George Eustice]

I do not accept that, because the randomised badger culling trial, cited by many hon. Members today, showed that culling contributed to a significant reduction in disease in the areas where it ran. It also showed that, even in those areas that had a slow start, where less than 40% of the badgers were culled in year one, there was still a significant reduction in the incidence of the disease provided the cull was sustained in subsequent years.

The Government have developed an ambitious and comprehensive plan for containing the spread of the disease through our 25-year strategy. It has several components, but at its heart is a recognition of a simple and unavoidable fact: there is no magic solution and no one measure will eradicate the disease on its own. TB is an incredibly difficult disease to fight and we need a range of different measure to tackle it.

Some, such as the hon. Member for Brighton, Pavilion (Caroline Lucas), have suggested that vaccination is an easy answer. I wish it were that simple, but it is not. Members will remember that last year, there were concerns about the Schmallenberg virus, a disease that affects sheep. It was relatively straightforward to develop a vaccine that was virtually 100% effective, and the disease is now fully under control. TB is not a simple virus. It is a complex bacterial disease. The bacteria reside inside the cell walls of the host, which makes it incredibly difficult to develop an effective vaccine. As a result, the current BCG vaccine provides only limited protection in about 60% of cases, and even then, the level of protection given is variable. Notwithstanding those difficulties and limitations, we are nevertheless investing large amounts of money in developing methods of deploying vaccine to both badgers and cattle, because, although vaccination is not a solution on its own, it could have a role in creating buffer zones or containing the spread of the disease.

Since 1994, more than £43 million has been spent on developing the cattle vaccine and the oral badger vaccine. We have committed to investing a further £15.5 million in vaccine deployment over the spending review period.

[David Morris]

I pay tribute to the Minister for the work I know he has been doing on this subject. Farmers know where the badgers are. Does he agree that if we could roll out the vaccine programme to the farming community, it would help all concerned and stop anguish in all parts of our communities?

[George Eustice]

We have a badger vaccine deployment fund of approximately £250,000 a year. Uptake has been slightly disappointing so far. We must also recognise that vaccination does not provide protection to all badgers, even once they are vaccinated. In Northern Ireland, a trial has been discussed, described as, “Test, Vaccinate and Remove”, meaning that the badgers are first trapped, then tested, and the ones that are not infected are vaccinated and released and the ones that are infected are culled. That test is only 50% effective, so for every infected badger that is culled, another is pointlessly vaccinated and released back into the wild to spread the disease further.

[Bill Wiggin]

My constituents are deeply concerned about the issue, as everyone knows. We have to explain to farmers why someone is taking away the cattle, but doing nothing about the badgers at the end of the field. What progress is the Minister making on a DIVA test?

[George Eustice]

We are working on a DIVA test, but, as hon. Members pointed out, it will probably take eight to 10 years to get a licensed vaccine for cattle.

We are constantly refining cattle movement controls, which a number of Members have mentioned. In 2012, we introduced tough new controls on cattle movements and TB testing. In January this year, we significantly expanded the area of the country that is subject to annual testing and further tightened cattle movement controls, including the conditions that need to be met before TB breakdown herds can restock. Last month, we launched the risk-based trading scheme to encourage farmers to share details of the bovine-TB disease history of the cattle they sell, and to encourage buyers to act on that information. Less than two weeks ago, we went further.

[Mr Mike Weir (in the Chair)]

Order. We have run out of time.

Gary Dunne

Wednesday 11th December 2013 Westminster Hall

16:15

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

I am delighted to have the opportunity to raise a constituency issue in Westminster Hall. Gary Dunne was tragically murdered on 3 March 2006 in Benalmadena on the Costa del Sol in southern Spain. He was attacked by 12 men and stabbed to death with a machete by Victor Posse Navas. For his family, nothing will bring Gary back. Every day, they remember him as a son, a partner and a father. Although nothing can be done to soften the horror of the tragedy for the family, much more could have been done, and still can be done, to make life that bit easier for them.

Our British consular staff deal with thousands of deaths of British nationals around the world, often in difficult, traumatic and complicated situations. They deserve praise for their work. More often than not, the support from consular staff is of the highest standard. In this case, however, the Dunne family were left vulnerable; they felt alone and received little help. In the midst of dealing with the news of the cruel murder of their son, they were told that they would have to pay to bury him, not in Liverpool, but in Andalucia in southern Spain, due to local legal restrictions about hygiene. The Spanish authorities said that before Gary could be brought home to Liverpool, he would have to be cremated in Spain. The family received no assistance from the Spanish police and were not met by liaison officers.

Mr and Mrs Dunne had to endure three years of campaigning simply to ensure that their son’s body could be repatriated and buried at home. In 2009, Gary’s parents were finally able to bury him. The intervention of the then Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), helped enormously. He made personal representations to the then Spanish Prime Minister, Jose Luis Zapatero, which resulted in progress being made.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing the debate and on his incredibly important campaign. I also congratulate the Dunne family on all the work they have done. What happened to them could happen to any of our constituents. Does he agree that the ordinary citizen would expect the EU to ensure that everyone has decent treatment in such appalling circumstances?

[Stephen Twigg]

I am grateful to my right hon. Friend for his intervention; I agree with him entirely. Further on in my remarks, I will talk about the work that the excellent MEP for the North West, Arlene McCarthy, has done to support the Dunne family and to raise the broader issues.

The Prime Minister played his part. The community and people of Liverpool were a constant support to the Dunne family. A petition lobbying for Gary’s body to be returned home was signed by more than 40,000 people. When his body was finally returned for a funeral in Liverpool, hundreds of well-wishers turned out in the streets to applaud. It is not often that civilian funerals are held at Liverpool cathedral, but the dean agreed to host the service there. Everton football club provided Goodison Park as a venue for the wake. No family should have to face the trauma and struggle that the Dunne family have had to endure—waiting for years before they could finally have a funeral and bury their son. There are lessons that we must learn.

My constituents, Gary’s parents—Stephen and Lesley—have worked tirelessly to ensure that no other family has to suffer such an ordeal. In 2010, I raised their case at Prime Minister’s Question Time with the current Prime Minister. He agreed to meet Mr and Mrs Dunne, who emphasised the need for changes at a European level, as my right hon. Friend the Member for Oxford East (Mr Smith) rightly said, to prevent apparently obscure local rules stifling a family’s ability simply to bring their loved one back for a funeral.

I remain grateful to the Prime Minister for meeting Mr and Mrs Dunne and for his support in that meeting. What progress have the Government made since then? Do the Government see any way in which we could ensure that the system of repatriation does not cause even more suffering and agony to grieving family members?

The Spanish authorities had insisted that due to rules related to their hygiene laws, Gary’s body could not be repatriated for at least five years. However, since then, the Dunne family have discovered that other families who suffered tragedies in Andalucia were told that they did not have to wait such a long time. Will the Government look into why there seems to be an inconsistency in the application of the rules? If the rules indeed state that a body can be repatriated only after five years unless it is cremated, will the Minister make the case, through the appropriate channels, both directly with the Spanish and through the European Union, for reform of what seem to be unreasonable and unfair rules?

After all that, the tragic saga still goes on for Gary’s family. The Dunne family were not informed by the Spanish authorities when the murderer was caught; they had to find that out through a friend phoning them. Owing to their frustrations with the Spanish legal system, the Dunne family tell me that they still do not know whether the killer is still in jail, and if so, when he will be released. Will the Minister make representations on behalf of the family to ensure that their case is brought to the attention of the relevant Minister in Spain? It is critical that the Government of Spain undertake the responsibility to keep the Dunne family informed of developments as and when they occur.

While the process up to this point has been handled atrociously by the local and national authorities in Spain, there is still a lot more that they can do. Gary’s partner, Ashley, and his young son, Kieran, have struggled to receive any compensation. The Spanish court has ordered the perpetrator to pay €125,000 in compensation, yet so far, only €1,500 has been received. Payments stopped some time ago, and the small amount that was paid was of little comfort, as it had to be used simply to pay court costs.

Stephen and Lesley have spent time themselves in Andalucia, at their own expense, fighting for justice for Gary. Due to a legal error during the formalities of applying for the money from the Spanish Government, the Dunne family were only receiving €100 a month from Gary’s killer, which came from the wage that he gets from his work in the prison kitchens. Now even that has stopped. Neither the killer nor his family has significant assets, and they are apparently unable to pay the compensation.

With the support of Arlene McCarthy MEP, the Dunne family have been lobbying the relevant Spanish authorities. In December 2011—two years ago—Arlene McCarthy wrote to the Spanish Minister who leads on this area of policy, but she has not even received the courtesy of a reply. Will the Minister look into that issue as a matter of urgency and make representations on behalf of the Dunnes?

I got to know Mr and Mrs Dunne well, as their constituency Member of Parliament. I have known them now for six years. Their focus has always been on the fight for justice for Gary and his surviving partner and child, but also, more broadly, on trying to ensure that no other family has had to endure what they have endured. However, the court in Spain had ordered compensation of €125,000. Although the issue of compensation has never been the one that the family has asked me to prioritise, I feel that I owe it to them, as their MP and a friend, to say that it seems to me a basic minimum that the compensation should be paid out to the family as a matter of urgency.

Finally, will the Minister assure me that more is being done to ensure that standards are maintained and improved in our consulates around the world? The Foreign Secretary has said that the Foreign Office is always seeking to improve the consular support and assistance in such tragic circumstances. Will the Minister set out what measures are being or will be taken to fulfil that? It seems critical that the staff who are involved in what is by its nature delicate and sensitive work are equipped fully to do their job professionally and compassionately.

I am aware that the Foreign Office has signed an agreement with the national homicide service run by Victim Support to provide the same level of support to families who lose a loved one as a result of a murder or manslaughter overseas as they would receive if the crime had taken place in the UK. That is a welcome commitment on the part of the Government and Victim Support. Will the Minister tell us how that new service will work and whether the Government have reached their goal of offering the level of service that one would expect in the UK for families who find themselves in such tragic circumstances abroad?

Gary’s family have suffered terribly for almost eight years now. They have lost a son, a partner and a father; they have battled for three years just to have a proper funeral for Gary; and they are now trying to receive the compensation that a court has ordered should be paid to them. It is a great tribute to them that they continue to campaign for justice for others, as well as wanting justice for themselves. I believe that they have been let down, and they deserve more from the relevant authorities. I urge the Government to do everything in their power, both bilaterally with Spain and through the European Union, to help us take the matter forward.

16:27

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

I am grateful to the hon. Member for Liverpool, West Derby (Stephen Twigg) for securing a debate on this case. I also thank the right hon. Member for Oxford East (Mr Smith) for his intervention.

May I add my own condolences to the family and pay tribute to their unwavering determination in the face of their loss? The death of a loved one is always distressing, and the grief of Mr Dunne’s family has clearly been compounded by the circumstances of his death and the procedural difficulties they faced thereafter.

The Foreign and Commonwealth Office is committed to making the process for those bereaved abroad as simple as possible. Providing consular assistance to British nationals who are the victims of serious and violent crimes overseas and their next of kin is a priority and a central function of our embassies and posts around the world.

Before I address the points raised by the hon. Gentleman, I would like to outline the involvement of the Foreign Office in the case to date. Following Mr Dunne’s death, British officials were in close contact with the family to provide consular assistance. When, as the hon. Gentleman said, the family experienced difficulties in bringing Mr Dunne home to Britain, consular staff did all they could to help. However, it became clear that under local law, the possibility of a further autopsy during the trial process prevented an individual’s remains from being repatriated, cremated or embalmed. The only option therefore was a local burial until the trial was complete. After that, exhumation before a period of five years had passed would only be permitted if an immediate cremation within the cemetery was arranged.

Representations were made to the director general for the Costa del Sol health district in November 2007 and to the provincial delegate of Andalucia’s health district in February 2008, to see if an exception could be made to these requirements, based on the compelling compassionate circumstances of the case. While sympathising with the family’s wishes, both the director general and the provincial delegate explained that, because Mr Dunne was a victim of murder, his case was considered a judicial one.

Understandably, Mr Dunne’s family continued to fight for his return and in July 2008 they petitioned the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). In October 2008, the right hon. Gentleman raised the case with the then Prime Minister of Spain, Jose Luis Zapatero, and secured an agreement from the Spanish authorities to allow Mr Dunne’s repatriation without a cremation, on exceptional humanitarian grounds. So, with guidance and support from consular officials, Mr Dunne’s family made an application for his exhumation. As we have heard, three years after Gary Dunne’s murder his family and friends finally held the funeral, at home in Liverpool, which they had long sought. Later that year, Mr Dunne’s family contacted the Prime Minister and the Foreign and Commonwealth Office to express their gratitude for the assistance they had received.

I now turn to the points the hon. Gentleman raised in his speech. First, I will address the question of whether EU-wide procedures for repatriation could be agreed, to prevent other families from facing the horrifying and distressing situation the Dunnes faced. As the hon. Gentleman will be aware, this is a difficult and complex issue. The power to act lies with other Governments, and the ability of the Foreign and Commonwealth Office to intervene in domestic matters—such as the variations in Andalucian law on repatriation, burial and cremation, which the hon. Gentleman outlined—is limited. However, it is clear that, as my right hon. Friend the Prime Minister said when he met the Dunne family and—I think—the hon. Gentleman in 2011, we should do all we can to prevent other families from facing the suffering endured by the Dunnes.

Therefore, I have asked that, as a matter of urgency, officials follow up with the hon. Gentleman and the Dunnes’ MEP, Arlene McCarthy, on who has done what following the Downing street meeting, so that we can collectively agree appropriate next steps. Secondly, I know that the hon. Gentleman and the Dunne family are deeply concerned about the apparent inconsistencies in the application of the rules governing repatriation. The advice we have received from the Andalucian authorities consistently made it clear that an unembalmed body can only be exhumed and repatriated after five years, unless it is cremated. The hon. Gentleman will appreciate that there may be factors at play in the other cases that he mentioned that we are not aware of. Exceptions can clearly be made if the grounds are sufficiently strong, as indeed they were in the Dunnes’ case. However, as I have said, I have asked officials to provide a progress report on efforts to establish common practices across those parts of Europe that currently require delays in repatriation.

The hon. Gentleman also highlighted the lack of support that Mr Dunne’s family felt they received from the Spanish authorities, and indeed the authorities’ level of support continues to fall short of the family’s expectations when it comes to their being kept informed of the current status of the perpetrator of this terrible crime. It is important that the Spanish authorities keep the family informed of any developments in the case, either directly or through their legal representatives. I have asked my officials to contact the relevant authorities in Andalucia to see if lines of communication can be re-established. For his part, I urge the hon. Gentleman to consider raising the matter directly with the Spanish ambassador.

On the issue of compensation, I am aware that, as the hon. Gentleman said, although an award of €125,000 was made by a Spanish court to the family, they have only received €1,500 to date. I am conscious that that can only add to the distress they have already suffered. However, the British Government cannot interfere in another country’s judicial process or direct the Spanish courts to enforce payment, particularly when the offender may not have assets with which to pay the outstanding compensation, which I understand to be the case in this instance. Therefore, I am afraid that our consistent advice to Mr Dunne’s family has not changed. Their Spanish lawyer is best placed to help them pursue this issue through legal channels and to advise them on applying to the Spanish state for payment of the outstanding compensation.

Also, my right hon. Friend the Minister for Europe, with whom the hon. Gentleman has been in communication about this tragic case, has previously provided him with information on the Criminal Injuries Compensation Authority, which Mr Dunne’s family may wish to approach for advice—if they have not already done so—about whether they can submit a separate application for compensation from the Spanish authorities.

Our consular staff often have a difficult and frustrating time, but on the whole they carry out their job—as the hon. Gentleman was kind enough, and right, to say—with patience, dedication and a great deal of tenacity. I am sure the hon. Gentleman and the right hon. Gentleman will join me in commending their efforts.

Having said that, I assure the House that the Foreign and Commonwealth Office is not complacent. We continually review our consular policy so as to provide British nationals with the best possible service. As part of that work, we have put in place a number of processes to ensure that high standards of consular assistance are provided to British nationals. Our new consular strategy for 2013-16 focuses on doing more for the most vulnerable, including victims of violent crime overseas and their families. Consular teams also undertake regular complex case reviews to ensure that we are providing the most appropriate and effective service in particularly complex and long-running cases, and we employ professional specialists, such as legal advisers and social work advisers, to provide expert advice. In addition, early next year we will undertake a review of the methods used by similar organisations to see how we can develop our own quality control and audit processes.

Cases such as that of the Dunne family highlight the extra support that is needed by those who have lost a loved one to murder or manslaughter overseas. The hon. Gentleman mentioned Victim Support’s National Homicide Service, which in part was set up to address the problems encountered by families such as the Dunnes. Since 2010, the Foreign Office has provided funding to Victim Support so that it can offer such families a dedicated caseworker and give practical support to help with the added trauma, complications and costs that a murder overseas can cause. Those bereaved by murder or manslaughter are now entitled to identical levels of support whether the crime was committed in the UK or abroad, and since 2011 many bereaved families have already benefited from this enhanced support.

In conclusion, I again thank the hon. Gentleman for securing this debate. I am aware of the very great support for the Dunne family that has been demonstrated by the people of Liverpool. This is a tragic case that has been compounded by the anguish that Mr Dunne’s family had to endure in order to bring him home to Britain. I hope they have been able to find some degree of comfort and closure in his return. I also hope that, through their legal representative, they are able to seek the full amount of compensation that is due to them.

[Mr Mike Weir (in the Chair)]

Order. The Minister who is responding to the final debate today, which is due to start at 4.45 pm, is not present, so I shall suspend the sitting until 4.45 pm.

16:37

Sitting suspended.

16:37

Sitting suspended for Divisions in the House.

Children’s Centres (Dudley)

Wednesday 11th December 2013 Westminster Hall

17:00

[Margot James (Stourbridge) (Con)]

It is a pleasure to serve under your chairmanship, Mr Weir, and to see my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) present for the debate. I suspect that he, like myself, is here because he was deeply concerned last month when proposals to cut by 40% the budget for children’s centres in Dudley were published by Dudley metropolitan borough council. I was outraged further because three of the seven children’s centres earmarked for closure were in my constituency. Virtually half of the centres earmarked for closure were to come from a quarter of the borough.

That there was no reasonable basis for the proposal ensured its early demise, and I am pleased and relieved that Dudley council withdrew the proposal two weeks ago. Undoubtedly, a major reason for the council’s change of heart is the excellent work of our children’s centres and their ability to galvanise hundreds of parents, together with the wider community that they serve, to communicate in no uncertain terms just how vital is their contribution to families and communities not only in my constituency, but across the metropolitan borough of Dudley.

Three weeks ago, I held a meeting with the principals and parents from Hob Green, Quarry Bank and Peters Hill, the three main children’s centres that were to be closed by the proposals. I was tremendously impressed by their commitment, excellence and the breadth of work undertaken on the behalf of families and communities.

The council’s proposal, albeit withdrawn, has unnerved everyone involved. A will therefore now exists to ensure that the role of children’s centres and the value that they provide are properly understood. It has also been recognised that, as with all public services, there is a need constantly to assess service delivery and value for money in ways that work ever more efficiently in future. For those reasons, I am pleased to be holding this debate today.

Children’s centres provide many new parents with a structure of support that is a lifeline to them and their children. To help new parents and babies get off to a good start, they offer antenatal classes, breastfeeding support, baby massage, maternal mental health support and other such classes. Maternal mental health support can be absolutely crucial to women suffering from post-natal depression and other mental health states that can impact so negatively on babies and small children.

As babies grow into toddlers, a social divide can start to open up, but children’s centres are doing outstanding work to counter it. Parenting classes, help with behaviour, healthy eating and educational play sessions form the bedrock of support for families with toddlers. Since Hob Green children’s centre opened in 2008, the percentage of children attaining the standard expected at the early years foundation stage has increased from 78% to 88%. That is an increase of 10% in only four years.

Dawn Swingler, the foundation stage manager at Hob Green primary school, in whose premises the children’s centre is sited, said:

“It is very apparent when children join the nursery if they have attended sessions in the Children’s Centre. If they have, they arrive ready to engage, happy to leave their carers and ready to learn. If they have not then we as a staff have to devote time to settling children in, building trust and relationships from scratch, all of this takes time and for these children learning cannot begin for many weeks, sometimes months. Whilst we are happy to do this, the knock on effect is that our range of activities for all children is diminished as staff are involved in this crucial work with individual children.”

Although it is right that children’s centres should help families that are deemed hard to reach, the needs of babies and families with young children do not always correlate with their socio-economic status. A single parent who uses our children’s centres told me of her struggle to get off benefits and into work, but she said that she felt strongly that her children are not deprived. That is true of many parents in similar positions. There are many families who struggle on low incomes and benefits, but whose children cannot be described as deprived or disadvantaged. Conversely, there are families on average or above average earnings whose children are seriously disadvantaged.

[James Morris (Halesowen and Rowley Regis) (Con)]

I congratulate my hon. Friend on securing this important debate. She is making an important point about disadvantaged backgrounds. Does she agree that the Government’s provision of free nursery care for two-year-olds from disadvantaged backgrounds is extremely valuable? Does she also agree that central and local government should look at ways of using the new funding to offer a package of holistic support for two-year-olds and their families, and that children’s centres are often an ideal place to provide support, because they have the benefits and services that she described?

[Margot James]

I strongly agree. I was not implying that we should disregard socio-economic status. I merely meant to point out that it is just one factor that we should consider. I support the Government’s decision to increase the support for disadvantaged two-year-olds by providing 16 hours a week of nursery care. Children’s centres are an ideal place for some of that learning to take place.

There are also families on above average earnings whose children are victims or witnesses of domestic violence or some other horror. Although those children do not fit neatly into a disadvantaged sector by socio-economic standards, they are seriously disadvantaged by any other measure. Domestic violence is not defined by socio-economic status, yet it is a substantial indicator of deprivation among the children of families who are affected by it. The same can be said for alcoholism and drug addiction.

The Government’s classification of wards by socio-economic data, which labels some areas as deprived, is a useful indicator of need but it is only one of many indicators. In isolation, socio-economic analysis is too limited to be the sole driver of policy at a local level. The original proposal to close our children’s centres in my constituency was determined almost entirely by that one measure of socio-economic advantage or disadvantage.

[James Morris]

My hon. Friend is making a very important point. In my constituency, the centre that was proposed for closure at Tenterfields was deemed to be not serving a disadvantaged community. In reality, the people living in the Highfields estate in Halesowen who used that centre would have had to travel 2 or 3 miles down the road to other service providers, had the centre closed. The whole of the Dudley proposal was predicated on a nonsensical analysis.

[Margot James]

I thank my hon. Friend for that excellent intervention. I completely agree. The Hob Green children’s centre, which I mentioned earlier, covers a huge area. When Hob Green was started in 2008, a similar proposal to start a children’s centre approximately 2 miles away was dropped. The Hob Green centre therefore covers a huge area, which takes in many different communities with different levels of socio-economic advantage. The strength of our children’s centres is that they serve a wide community and bring together people of different backgrounds, who get on together and learn from each other. That cannot be done if children’s centres are confined to narrow disadvantaged communities.

If any thought had been put into the proposals that we are discussing, the number of children under the age of five years might have been considered as an additional factor relevant to the decision-making process. If the constituencies of Dudley North and Stourbridge are compared, for example, we find that 5,508 children under the age of five live in Dudley North, while 8,020 children under the age of five live in Stourbridge. It is illogical to propose the closure of three children’s centres in the area with many more under-fives while proposing to close only one in the area with far fewer children under five.

Having made the case for the vital importance of children’s centres and the work they do, I will conclude by looking to the future. According to a survey undertaken this year by the charity Action for Children, which runs the excellent Stourbridge children and families centre, more than 1 million families are now using children’s centres nationwide. That is an increase.

I am pleased that the Government have increased the total funding for early intervention from £2.2 billion in 2011 to £2.5 billion in the current year. In addition, there is a national fund of £70 million held by the Department for Communities and Local Government to help local authorities reconfigure services. Does the Minister think that the children’s services department of my local authority should be encouraged to apply to access such funding to bring in more joint working between health and education?

Ideally, children’s centres should act as gateways, so that families can receive the support they need, whether for parenting, health services or child development and early learning. On the health side, I am delighted that many children’s centres are acting as hubs for the increased number of health visitors that the Government have deployed. If children’s centres act as gateways for such services, it is far better that they take a joined-up approach. More can be done locally as well as nationally through the greater integration of health and education. That not only means that families will get a better, more holistic service; it also means that those services will be delivered more cost-effectively.

In conclusion, local authorities now have responsibility for public health and additional funding for social care that has been assigned directly from the NHS budget. There is also now a separate funding stream for disadvantaged two-year-olds for 16 hours a week of nursery education. There is therefore a diverse array of funding sources that a fully integrated children’s centre service can now access. It seems quite wrong to be looking at cutting great swathes of our children’s centres just at the time when the focus nationally is on children’s centres doing more, not less, and accessing more funding streams to enable them so to do.

On behalf of all the parents and children in my constituency, I congratulate children’s centres in Stourbridge and across our borough on the excellent and incredibly valuable work they do on a very modest budget. Long may that work continue.

17:21

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

I congratulate my hon. Friends the Members for Stourbridge (Margot James) and for Halesowen and Rowley Regis (James Morris) on their excellent work, first, in securing today’s debate on this important topic, and secondly, in stopping the closure of those children’s centres in Dudley. My hon. Friends’ work seems to have had the desired effect, so parents and children in Dudley will continue to benefit from the excellent services of local children’s centres.

Children’s centres provide a vital service to parents and families. As my hon. Friend the Member for Stourbridge pointed out, even though our financial position is not good due to our inheritance from the previous Government, we have increased funding for early intervention over the period of this Government. In Dudley we have been able to increase the level of investment in early intervention from £12.7 million to £13.1 million. We have done that because children’s centres and the associated early years services that local authorities provide are so important.

The early intervention grant comes from the budget of the Department for Communities and Local Government, and money for funding for two-year-olds comes from the direct schools grant. We want local authorities to use that money as flexibly as possible to make sure that the maximum amount of funding gets through to the front line to provide services in the way that parents and children want.

My hon. Friend made some interesting points about types of support given by children’s centres, and the idea of universal support versus targeted support. It is important that all parents feel that they can access a local children’s centre. That is the only way we are going to identify families that might have a particular need. She pointed out that although that could be because of socio-economic reasons, there are other reasons why such services might be useful.

Children’s centres are also a useful way of linking a whole community. As a young mother—well, perhaps not so young—I attended the post-natal group at my local children’s centre and found it a really useful way to meet other local parents. Many people have been through similar experiences and really value them.

The Department for Education has recently issued guidance to local authorities, making it absolutely clear that they should ensure that

“a network of children’s centres is accessible to all families with young children in their area”,

and that

“children’s centres and their services are within reasonable reach of all families with young children in urban and rural areas, taking into account distance and availability of transport”.

The guidance also states that

“together with local commissioners of health services and employment services”,

local authorities should

“consider how best to ensure that the families who need services can be supported to access them”.

[James Morris]

On the subject of statutory guidance, local authorities are under a statutory duty to consult on matters such as these. In the case of Dudley there is a peculiar situation whereby the leadership of Dudley council has withdrawn the original proposal but is continuing to consult on it. One concern is that the council might use the results of that consultation to revise the proposals. Does the Minister agree that it is important that if Dudley council comes back with a revised proposal, it should have to consult again, and should not be able to use the contents of a consultation that is still going on, despite the fact that the council is saying it is withdrawing the proposal?

[Elizabeth Truss]

My hon. Friend makes a good point. I will look into the specific position of Dudley council. We are clear in our guidance, however, that the starting point should therefore be a presumption against the closure of children’s centres. That is an important part of our guidance, because having a wide network is important, so that parents are able to access a children’s centre near their home. Other research by the Department for Education suggests that parents are not willing to travel great distances for early years services, as obviously, with young children it can be difficult to travel long distances. That is why we have a presumption against the closure of children’s centres. In fact, less than 1% have been closed since the start of this Parliament, and new centres have been opened.

I also commend the points made by my hon. Friend the Member for Stourbridge on joined-up services and how important it is that families and children have a joined-up service and experience. Too often, people have to go to different locations for antenatal classes, health checks or parenting classes. Would it not be better for all those services to be on a single site? I went to see some excellent children’s centres with my hon. Friend the Member for Watford (Richard Harrington) recently. We saw an on-site midwife who was able to give people advice pre-birth, and stay-and-play sessions and parenting classes were taking place on the same site. Other centres have also done birth registration on site, which is often far more convenient than going to the registry office and helps parents to access a children’s centre. That is something local authorities should be looking at. I am speaking to the Local Government Association about that at the moment.

Some children’s centres provide child care on site, although that amounts to less than 1% of total child care in the country. Centres also provide access to child care through other routes, such as local schools and school nurseries, which provide 30% of child care, as well as private and voluntary sector providers and local childminders. I am pleased that children’s centres are involved in our new trial of childminder agencies, and are providing some training to and support for childminders. We want to see more locally integrated networks of services, so that parents who go to children’s centres have a clear steer on what is available locally and where they can get support and help—a one-stop-shop vision.

The Department for Communities and Local Government is supportive of that vision. It has created a £75 million transformation fund, to which local authorities can submit bids. When I met my hon. Friend the Minister for Local Government recently, he said that there had not been many applications for children’s services, but we want more integration between health and children’s centres. My hon. Friend the Member for Stourbridge said that in 2015 more of those responsibilities will be devolved locally, so that seems an ideal opportunity for local authorities to consider co-locating services and making them much more integrated and parent-friendly.

[Margot James]

Does the Minister agree that the more that services are co-located and brought together, the more sustainable the whole children centre model is in the long term?

[Elizabeth Truss]

My hon. Friend makes an extremely good point and she is absolutely right. She mentioned the Hob Green primary school and its improvement in outcomes from having a children’s centre on site. Some 50% of children’s centres are located on school sites and we are encouraging schools and children’s centres to work more closely together. That, again, is an excellent model.

Children’s centres can be based in schools and health services. That will vary according to area, but we give local authorities freedom to decide exactly how the configuration might work. Services in rural areas where there may be more child minders, for example, may be different from those in densely populated urban areas. The overall idea is that children’s centres should be accessible for local families and provide a gateway to other services.

A record number of parents—more than 1 million, for the first time—use children’s centres. That shows their popularity and massive success, which we should celebrate. My hon. Friend referred to the early years foundation stage and said that she has seen improvement in outcomes as a result of children’s centres.

Another major focus for the Government is the quality of early years provision overall. This year, we have seen a record number of people going into the early years teacher programme—a 25% increase on last year—and that is good news. All those programmes are about improving the attainment gap and outcomes for children. We have a large outcomes gap in this country between children in lower and higher income families, and we know that much of that gap has developed by the age of five. These services are vital and combine to create the best outcomes for children.

We want local authorities to be creative in developing services and thinking about the parent and child being at the centre of services rather than in the configuration of different parts of the health and education system. Services must be parent-friendly. Children’s centres have shown that they are parent-friendly and the fact that more than 1 million families use them is fantastic news.

I am keen to discuss further with my hon. Friend and her colleagues how we can help councils such as Dudley put together applications for the transformation fund, how to look at best practice throughout the country—centres in York are registering births at children’s centres, for example—and how to spread those best practice models more widely.

The Government have funded the Early Intervention Foundation, which is looking at research into best practice so that that can be disseminated more widely across children’s centres and we can ensure that all children’s centres understand the best way of working with parents and improving outcomes for children.

I congratulate my hon. Friend on her interest in the subject, and the clear progress she has already made in Dudley. It sounds from the comments of my hon. Friend the Member for Halesowen and Rowley Regis that more can be done under the current proposals. Let us ensure that as much as possible of the Government’s funding is spent on high-quality, front-line professionals working with parents and children.

Question put and agreed to.

17:32

Sitting adjourned.

Written Statements

Wednesday 11th December 2013 Written Statements

Wednesday 11 December 2013

Insolvency Service (Statistics)

Wednesday 11th December 2013 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The Insolvency Service has today released official statistics covering the number of individual insolvencies (bankruptcies, debt relief orders and individual voluntary arrangements) in each parliamentary constituency in England and Wales, for the period 2000 to 2012. These show that:

the rate of total individual insolvencies per 10,000 adults in England and Wales peaked at 30.9 in 2009, and has fallen each year to 24.5 in 2012;

the rate of total individual insolvencies per 10,000 adults in each constituency in 2012 ranged from 6.7 to 59.2;

any comparison of rates between years at this local level should take into account that small changes in the number of insolvencies can have a large impact on the rate.

Full details are available at:

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/regionalstatisticsmenu.htm.

Statistics at local authority level were published on 12 July 2013 at the same web address.

Related statistics, covering individual and company insolvencies in England and Wales up to 2013 Q3 are available at:

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/insolvency-statistics.htm.

Ministerial Responsibilities

Wednesday 11th December 2013 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The new list of ministerial responsibilities has been published today. Copies have been placed in the Vote Office and the Libraries of both Houses. Copies will also be sent to each hon. Member’s office in this House.

The list can also be accessed on the Cabinet Office website at:

https://www.gov.uk/government/publications/government-ministers-and-responsibilities.

EU Energy Council

Wednesday 11th December 2013 Written Statements

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

In advance of the forthcoming Energy Council in Brussels on 12 December, I am writing to outline the agenda items to be discussed.



We expect the Council to reach political agreement on the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land.

The UK continue to believe the most appropriate way to address ILUC is through the introduction of ILUC factors and a cap of 5% on biofuels from food crops. However, the majority of member states favour a high cap on biofuels from food crops. The current proposal is for a 7% cap, which represents a compromise between member states. The proposal also includes incentives for advanced biofuels, which seek to support them in a cost-effective way.

However, a number of member states still have significant concerns about the proposed political agreement and discussions will continue at the Council to try to resolve these issues. The UK will seek to ensure that any political agreement includes the best possible outcome for the UK.

Following the identification of five priorities in the area of energy policy at the May 2013 European Council, the Lithuanian presidency will report on progress towards completing the internal energy market and invite Ministers to endorse a Council report to go to the European Council in March 2014.

The presidency will then present a report on the progress and achievements in EU external energy policy since the November 2011 European Council conclusions, and set out further measures to strengthen and improve EU external energy policy. Ministers will be asked to endorse the report. The presidency will also present a round-up of recent and upcoming events and developments in international energy relations.

The presidency will provide information on the agreement reached with the European Parliament on the recast regulation concerning the notification to the Commission of investment projects in energy infrastructure in the EU, which requires member states to report biennially on their planned new energy infrastructure investment projects or those to be decommissioned. The previous regulation was annulled after successful European Parliament action to change the legal base (to an energy base, which requires co-decision). The EP also proposed a number of substantive amendments. The UK with other member states and the Commission successfully resisted most of these, mainly on the grounds of the need to avoid increasing the reporting burden on member states. The limited changes which have been agreed would not substantially increase the reporting burden.

We expect the presidency to provide an update on negotiations of the nuclear safety directive, which is currently being discussed at official level in Brussels.

The Greek delegation will outline priorities for its forthcoming presidency: advancing the internal energy market, energy security and infrastructure, energy pricing and costs, external energy policy, the 2030 framework and energy efficiency.

Over lunch, Ministers will discuss energy prices and competitiveness.

Waste Prevention Programme for England

Wednesday 11th December 2013 Written Statements

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

Today I am announcing the publication of the waste prevention programme for England. The programme fulfils a commitment in the 2011 Government review of waste policy in England.

Preventing excess waste from arising delivers environmental, economic and social benefits, and is key to moving towards a more sustainable economy. The programme demonstrates the benefits of reducing waste, making the link to wider work on resource efficiency and sustainable consumption and production. It sets out the aims and priorities, along with actions businesses, the wider public sector, civil society and consumers can take to benefit from waste prevention.

Many individuals and organisations are already taking action to reduce waste, which is highlighted in the programme. To encourage further action, we will support change in a number of ways. For example, we will bring industry together under a new sustainable electrical action plan to catalyse action and seek commitment on designing products for optimum life. Alongside this, we are supporting pilot projects and trials of takeback and hiring and leasing schemes to demonstrate the benefits of resource-efficient business models and supply chain innovation.

Supporting and making it easy for individuals to take action is equally important. We are developing a two-year, £800,000 scheme to support communities to take forward innovative waste prevention, reuse and repair activities. We will also develop a web-based postcode locator to provide a practical tool to enable householders to find their local reuse and repair services.

Specific actions for Government are highlighted and we will lead by example by continuing to reduce waste across the public sector and using Government buying standards to support cost-effective sustainable procurement. The programme does not propose any new regulation. It also fulfils a requirement of the revised waste framework directive (2008/98/EC).

At the same time as publishing the programme, we are also publishing:

An evaluation of the usefulness of measures identified in the revised waste framework directive along with a summary of existing activities.

A summary of the responses received and the Government response to the call for evidence and consultation published earlier this year.

An overview of evidence used to produce the programme.

As waste is a devolved matter, Wales, Scotland and Northern Ireland have developed their own programmes.

Further information on the programme is available on the Government website.

Development Foreign Affairs, Foreign Affairs and General Affairs Councils

Wednesday 11th December 2013 Written Statements

[The Minister for Europe (Mr David Lidington)]

My right hon. Friend the Secretary of State for International Development will attend the Development Foreign Affairs Council on 12 December, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will attend the Foreign Affairs Council on 16 December, and I will attend the General Affairs Council on 17 December. The Development Foreign Affairs Council and the Foreign Affairs Council will be chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland, and the General Affairs Council will be chaired by the Lithuanian presidency. The meetings will be held in Brussels.

Development Foreign Affairs Council

Post-2015 agenda

Ministers will discuss next steps for the EU in the international post-2015 process, following the UN millennium development goals review event in September and current discussions in the open working group. Conclusions on “financing poverty eradication and sustainable development beyond 2015” will be adopted.

Agenda for change

Ministers will receive an update on implementation of the agenda for change, including programming of EU financial instruments. Baroness Ashton will also update on progress on joint programming and the results framework. Ministers will be invited to exchange views on these issues.

Progress on policy coherence for development

Baroness Ashton will reflect on the progress the EU is making on policy coherence for development, and Ministers will adopt conclusions on the 2013 annual report on policy coherence.

Regional issues

Ministers will discuss the great lakes. Other regional items are still to be confirmed.

Foreign Affairs Council

Introduction—Review of the European External Action Service

Baroness Ashton will outline the recommendations made in her review of the European External Action Service and comment on the views received from member states.

Introduction—Democratic Republic of the Congo

Baroness Ashton will cover recent political progress in the Democratic Republic of the Congo during her introductory remarks, focusing in particular on the opportunities this represents.

Iran

Baroness Ashton is expected to update the FAC on the E3+3 talks with Iran taking place on 9-13 December in Vienna. Discussion is likely to focus on the outcomes of the negotiations, the implementation timetable of agreements, and any implication for EU sanctions.

Southern neighbourhood

On Syria, the UK will ensure intensive preparations for the Geneva II peace talks. This will include encouraging the EU to give the National Coalition its political backing, so the moderate opposition can negotiate from a position of strength. We will encourage EU institutions and member states to donate generously at the UN’s humanitarian aid conference in January. We will use the attendance of Russian Foreign Minister Sergei Lavrov to send a united message that the Syrian regime must allow this aid to get to those who need it in Syria.

Lebanon is the country hosting the most Syrian refugees—over 830,000—and most at risk of overspill from Syria. The UK has increased hugely our humanitarian and security support to Lebanon this year. We hope the FAC will agree conclusions reiterating EU support for Lebanon’s stability, and to call for the urgent formation of a new Lebanese Government and for all parties to abide by the policy of disassociation from the Syria conflict.

Eastern Partnership and EU/Russia relationship

Ministers will discuss the outcomes of the Eastern Partnership summit in Vilnius and how this may impact on EU-Russia relations. Recent events in Ukraine are also likely to be covered. The UK was disappointed with Ukraine’s decision to delay signature of the EU-Ukraine association agreement, which it regards as a missed opportunity. We are watching events in Ukraine closely and continue to call for dialogue between all parties and for the rule of law to be respected. The UK will stress that the door remains open for Ukraine if it decides that it wants to sign the association agreement in the future.

Central African Republic

The Central African Republic (CAR) will be discussed in light of the UN Security Council resolution which authorised the deployment of the African-led international support mission to CAR (MISCA) and the deployment of French forces to support MISCA in the discharge of its mandate.

Middle east peace process

In support of the ongoing talks, the UK will press for a firm offer of EU economic and security incentives to both parties in the event of a deal, while making clear our concern at the possibility of actions that might damage the progress of these negotiations.

Western Balkans

Baroness Ashton is likely to update Ministers on the EU-facilitated Serbia/Kosovo dialogue and Ministers will discuss opening accession negotiations with Serbia, which will also be discussed at the GAC. We were pleased to see broadly successful municipal election reruns in Kosovo, which are a key part of the April dialogue agreement, while acknowledging that there is more to do on other dialogue agreements. The UK is clear that Serbia’s negotiating framework must ensure full normalisation before Serbia can join the EU. We also want to see Kosovo’s stabilisation and association agreement proceed swiftly towards completion in the spring and avoid reopening questions of status.

Burma

Our priority is to agree conclusions that incorporate language calling for reform of the Burmese constitution in advance of the report from Burma’s parliamentary constitutional review committee, which will present its recommendations for reform on 31 January 2014. We will stress the importance of reviewing those clauses which prevent the participation of individuals from being selected for Burma’s presidency on the basis of the foreign nationality of spouses or offspring. We expect the conclusions will also reflect the outcomes of the Baroness Ashton-led EU-Myanmar taskforce which visited Burma on 14 and 15 November.

Lunch with Lavrov

Russian Foreign Minister Sergei Lavrov will join Ministers for a discussion over lunch at the FAC. The UK will use this as an opportunity to reiterate the benefits that can accrue when the EU and Russia co-operate fully, for example, the E3+3 negotiations on Iran. We will also set out our view that the EU’s relationship with Eastern partners will bring benefits to Russia as well as the region and that Russia’s pressure on the region is counter-productive.

General Affairs Council

The General Affairs Council (GAC) on 17 December will focus on: preparation for the 19-20 December European Council; the review of the European External Action Service; and the enlargement and stabilisation and association process. The GAC will also receive a debrief from the informal ministerial meeting on cohesion policy held on 26 November in Vilnius.

Preparation of the 19-20 December European Council

The GAC will prepare the 19 and 20 December European Council, which the Prime Minister will attend. The December European Council agenda will focus on three main issues: common security and defence policy (CSDP); economic and monetary union; and economic and social policy. There will also be conclusions on enlargement, the content of which will be discussed at this GAC. I additionally expect there to be an update on the Taskforce for the Mediterranean and on completing the internal energy market.

The UK priorities for the European Council are likely to be: protecting the integrity of the single market, in relation to economic and monetary union; and on CSDP, agreeing a range of actions to improve CSDP’s effectiveness, strengthen European nations’ capabilities and improve competition and transparency in the European defence market, in a way that is complementary to NATO.

European External Action Service

The presidency hope to agree GAC conclusions on the review of the European External Action Service (EEAS). The review was sent to Foreign Ministers by Baroness Ashton in July 2013. As the Government set out in their 27 August explanatory memorandum to Parliament on this issue, we welcome the review as an opportunity to strengthen the EU’s collective weight in the world in areas that support and complement UK international objectives.

We agree that despite a difficult start, the EEAS has started to contribute to UK and wider EU foreign policy objectives, including Baroness Ashton’s role in securing the Serbia-Kosovo agreement and in leading the E3+3 process with Iran. We support Baroness Ashton’s assessment in the review of the three main elements of EU foreign policy to have emerged from the first two years of operation of the EEAS; namely the “neighbourhood”, the “comprehensive approach to crisis management”, and “international issues where our collective weight allows the EU to play a leading role in the world”. Of course, the EEAS is not perfect and there are still some outstanding issues to be resolved. To this end, we broadly welcome the proposals for change in the EEAS review.

Enlargement and stabilisation and association process Council conclusions

The GAC will discuss the Commission’s annual enlargement package, published on 16 October, and agree conclusions on the enlargement strategy and the western Balkans, Turkey and Iceland. The December GAC is the annual opportunity for the Council to take stock and give direction to the EU’s enlargement strategy and pre-accession reform priorities for individual countries.

The Government’s views on the package were set out in my explanatory memorandum of 28 October 2013. We will broadly welcome the Commission’s approach in this year’s package, reiterating our continued firm support for future EU enlargement on the basis of strict but fair conditionality, with countries moving forward on merit as they meet the conditions. We will also take the opportunity to introduce our thinking, in the context of future enlargement, on how to return the concept of free movement to a more sensible basis and look forward to a future debate.

The GAC will be considering progress by all of the western Balkans countries and Turkey, with particular attention on Serbia and Albania.

Cohesion policy

Ministers with responsibility for cohesion policy met in Vilnius on 26 November to discuss progress in preparing programmes for the 2014-20 funding period. This included their experiences to date in applying new arrangements in the regulatory package agreed between the Council and European Parliament, such as the preconditions to be met before spending on specific priorities can start, the requirement to concentrate funding on a limited number of objectives, the strengthening of results orientation and improved co-ordination between different funds. For this item, the presidency will present its conclusions from the meeting.

G8 Dementia Summit

Wednesday 11th December 2013 Written Statements

[The Secretary of State for Health (Mr Jeremy Hunt)]

A Health Ministers summit of the Group of Eight was held in London today. The summit identified and agreed a new international approach to dementia research, to help break down barriers within and between companies, researchers and clinicians and secure a new level of co-operation needed to reach shared goals faster than nations acting alone. The following items were on the agenda for discussion:

Pre-summit briefing on the UK Prime Minister’s Dementia Challenge

The UK presented to the meeting on the UK Prime Minister’s dementia challenge which includes dementia friendly communities, health and care and research.

Ministers’ and European Commission’s Prepared Statements

Statements were made by Canada, France, Germany and Italy. These were followed by statements from Japan, Russia, UK, United States and the EU.

Improving Life and Care for People Affected by Dementia and their Carers

The meeting held an exchange of views on the action that can be taken to provide better and more concrete measures for improving services and support for people with dementia and their carers.

Preventing and Delaying Dementia

The meeting held an exchange of views on the action that can be taken to stimulate greater investment and innovation in dementia prevention, diagnosis, treatment and care.

Social Adaptation to Global Ageing and Dementia

The meeting held an exchange of views on the action necessary to adapt to ageing society and to reduce the impact of dementia.

As part of the agreement reached, countries have agreed to:

set an ambition to identify a cure or a disease-modifying therapy for dementia by 2025—backed by a commitment to together significantly increase the amount spent on dementia research and increase the number of people involved in clinical trials and studies on dementia;

a new global envoy for dementia innovation, following in the footsteps of global envoys on HIV and Aids and on climate change—the global envoy will bring together international expertise to stimulate innovation and co-ordinate international efforts to attract new sources of finance, including exploring the possibility of a new private and philanthropic fund to support global dementia innovation;

develop an international action plan for research—in particular to identify current gaps and how to fill them;

share information and data from dementia research studies across the G8 countries to work together and get the best return on investment in research; and

encourage open access to all publicly-funded dementia research to make data and results available for further research as quickly as possible

A copy of the declaration and communiqué has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Multilateral Aid Review

Wednesday 11th December 2013 Written Statements

[The Minister of State, Department for International Development (Mr Alan Duncan)]

I would like to inform the House of the publication today of the multilateral aid review update report.

In 2011 this Government published the multilateral aid review (MAR)—the first systematic assessment of the performance of the 43 multilateral organisations that the UK supports through core funding. The MAR is a central part of our wider efforts to ensure that we scrutinise the value for money of each pound we spend, whether we do so directly or through other organisations. Our efforts in this area were recognised by the Public Accounts Committee (PAC) who gave us their civil service award for the most improved Government body on value for money and financial management in 2013. Other donor countries have emulated our approach.

The findings of the review confirmed the important role multilateral organisations play in supporting the UK to meet its development and humanitarian objectives —delivering humanitarian support in countries affected by conflict such as Syria or by natural disasters such as the Philippines, on promoting the rights of women and girls, and in ensuring that developing countries have the infrastructure they need to support their economic growth. The review also had a major impact on our spending decisions. While some high-performing organisations received considerable increases in funding, some poor performing institutions had their funding stopped altogether and others were asked to make urgent reforms if they wished to secure any future funding from DFID. The review also highlighted the strengths and weaknesses of multilateral organisations, and enabled us to give them a clear list of future priorities and essential reforms.

The MAR update has been undertaken to assess whether the multilateral organisations have made the progress we asked for. The report being published today sets out the results of this work. It shows that all of the multilaterals have made improvements over the two years since the multilateral aid review, that those organisations we asked to make urgent reforms are making progress, and that some multilaterals which were already doing well are doing even better. There have been significant improvements in crucial areas such as the management of finances, and how organisations work with others. This is encouraging, but more needs to be done. Not all organisations made the progress we expected of them, and the performance of some in critically important areas, such as the empowerment of women and girls, could be improved.

The Department for International Development (DFID) remains committed to strengthening multilateral effectiveness. Over the next year we will use the evidence from this update to work with multilaterals and other partners to bring about further change. There will be a particular focus on areas where progress has been too slow. We will also work with other Governments to ensure that the methodology and evidence base for future multilateral effectiveness assessments continue to improve, providing a sound basis for a full reassessment of the value for money that multilateral organisations offer in 2015. In doing so, we will seek to address issues raised with us by multilateral organisations, and in the informed commentary by the International Development Committee and others.

I am placing a copy of the MAR update report in the Libraries of both Houses.

Grand Committee

Wednesday 11th December 2013 Grand Committee

Wednesday, 11 December 2013.

Arrangement of Business

Wednesday 11th December 2013 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)]

My Lords, welcome to the Grand Committee. We are expecting Divisions, in which case I ask the noble Lord who is speaking to stop while we adjourn for 10 minutes.

Olympic Legacy (S&T Report)

Wednesday 11th December 2013 Grand Committee

Motion to Take Note

15:45

Moved by

[Lord Krebs]

That the Grand Committee takes note of the Report of the Science and Technology Committee on Sport and exercise science and medicine: building on the Olympic legacy to improve the nation’s health (1st Report, Session 2012-13, HL Paper 33).

[Lord Krebs (CB)]

My Lords, I start by thanking the members of the Science and Technology Select Committee for their excellent contributions to this report, and our specialist adviser, Professor Ian Macdonald, Professor of Metabolic Physiology at the University of Nottingham. I also thank the Minister for the Government’s response to our report. I am particularly delighted to see that the Minister who will respond to the debate is from the Department of Health as many of the recommendations in our report refer to health as well as to sport and exercise.

We conducted the inquiry, which resulted in the report Sport and Exercise Science and Medicine: Building on the Olympic Legacy to Improve the Nation’s Health, during the run-up to the 2012 Olympics. The inquiry had two purposes. First, we wanted to find out how robust the research and evidence base for improving the performance of our elite athletes is. Secondly, we asked how this knowledge for helping elite athletes might be translated into treatments and preventive interventions that could help improve the nation’s health. Our focus was on biomedical research rather than the engineering science that refined and improved the equipment used by elite athletes and amateur sports men and women alike.

Our inquiry included sport and exercise science, which is about understanding the physiology, nutrition, genetics and biomechanics of the human body in order to improve performance as well as sport and exercise medicine, which is about the treatment and prevention of ill health that might arise from exercise: for instance, muscle strain or joint injury. We did not investigate the important issue of behaviour change—how to encourage people to become more active—because we had already completed an inquiry into this topic in 2010. Although we focused on sport, we recognised that exercise includes a much broader range of activities, such as recreational walking, gardening and housework.

Both of our questions were highly relevant to the Government’s two objectives for the Olympics. These were, first, to ensure top performance of our athletes in winning medals and, secondly, as part of the legacy of the Games, to encourage the nation to be,

“healthier, happier and more active”.

On the first of these two objectives, Team GB surpassed expectation, winning more medals than in any Olympics since 1908. The haul of 65 medals, against a target of between 48 and 70, included 29 gold, placing Britain third in the gold medals table and fourth in the total medals table. This was a stunning success, but might the performance of Team GB have been even better with more systematic appliance of better science? One of Team GB’s greatest Olympic successes was in cycling, winning seven out of 10 track cycling gold medals. While the majority of this remarkable success is down to the athletes themselves, it is thought that some of it is attributable to the meticulous attention to detail of Matt Parker, “head of marginal gains”. He analysed down to the last detail the factors that might make that marginal difference between a medal and no medal: techniques such as spraying tyres with alcohol to remove dirt and increase the friction at the start of a race; heated shorts for the cyclists to keep their muscles warm; and measures to reduce the chance of athletes succumbing to performance-diminishing infections may all have contributed to the fraction of a second difference that is needed to win gold instead of silver.

However, as our inquiry showed, even in the outstanding cycling team, not all the techniques believed to enhance performance of elite athletes are based on sound evidence. For instance, we were told by an expert witness that feeding elite athletes large quantities of antioxidants to help muscle recovery not only does not have a beneficial effect but may even be detrimental. So when we look ahead to the next Olympics, there may be room for even better performance by our athletes by deploying the best scientific knowledge.

Our second question was about using scientific knowledge to help the Government’s objective of getting the population as a whole to become healthier through exercise. The health benefits of exercise are undisputed and affect a wide variety of health outcomes. The Department of Health told us that there was research to show that exercise could help to prevent or manage more than 20 chronic conditions, including coronary heart disease, stroke, cancer, type 2 diabetes and a number of mental health problems. Yesterday’s news story about an article in the British Journal of Sports Medicine lamenting the lack of exercise by children even used the emotive language of “child neglect” to refer to the health problems that will arise because children are not encouraged to do enough exercise.

Scientists do not yet understand the biological mechanisms that give rise to such far-reaching benefits of exercise. One theory is that exercise promotes a process called autophagy, in which worn-out surplus or malformed proteins and other components of our cells are recycled. Perhaps an understanding, through research, of exactly how exercise benefits our bodies would help to improve and enhance the advice to the population at large on exercise, and thereby increase the benefits.

How robust is the research into sport and exercise science and medicine? One fundamental problem of research on elite athletes is that, by definition, there are very few individuals to work on. Furthermore, elite athletes are understandably reluctant to be exposed to invasive measurements that might interfere with their training or become part of a control group in an experiment to test the efficacy of a particular intervention. For this reason, most of the research on elite athletes is observational and anecdotal. That is not to say that all sport science and medicine is weak, but several of our witnesses, including the Physiological Society and the Ministry of Defence, were critical of weak methodologies.

One way to improve the quality of research is to carry out the work on non-elite athletes and the wider public and explore the two-way flow of understanding between those groups and elite athletes. We heard about examples of well known techniques that are supported by good evidence—altitude training to improve stamina, and carbohydrate loading for long-distance runners—as well as those for which there is no evidence of benefit, including taking ice baths after vigorous sport and, as I have already mentioned, taking antioxidant supplements.

UK Sport is the arm’s-length body of DCMS charged with funding research to enhance the performance of elite athletes, with a budget, we were told, of about £20 million over the period between 2009 and 2013. We were surprised that DCMS did not appear to have in place any mechanism to ensure that UK Sport was commissioning science of the highest quality, comparable to that in fields of basic biomedical research. The Government’s response did not specifically address that point, and I would welcome clarification from the Minister about how DCMS carried out that quality assurance.

I now turn again to the relevance of sport and exercise science and medicine to the wider public. Most but not all of our witnesses agreed that the findings from research on elite and non-elite athletes had relevance to the wider population. Examples include the use of exercise and muscle conditioning to improve back and knee pain in osteoarthritis, conditions that affect many people in this country.

Advice to the public on exercise is contained in the Chief Medical Officer’s guidelines on physical activity. These guidelines exist, but how many people are aware of them? I have no doubt that all noble Lords in this Room are acutely aware that the CMO recommends that 19 to 64 year-olds do 150 minutes of moderate exercise or 75 minutes of vigorous activity a week, and that there are specific guidelines for people such as myself who are over 65, but we found in our inquiry no strategy for ensuring that those guidelines were more widely disseminated to the public. Indeed, we were told of one survey of 48 GP practices in 28 London boroughs, which found that none of the GPs was aware of the latest CMO guidelines.

The Government welcomed our recommendation that training at all levels for health professionals should include the need to support the prescription of exercise for both prevention and treatment of ill health. We also suggested that physical activity should be added to the quality outcomes framework for GP practices. I would welcome comment from the Minister on what progress has been made in this area and whether any measurable change in disseminating activity guidelines and encouraging physical activity by health professionals has been achieved.

At the same time, the National Institute for Health and Clinical Excellence—NICE—has a role in ensuring that any prescription of exercise for chronic disease is based on sound evidence. Could the Minister please update us on NICE’s assessments and how they are being translated into recommendations? Many of us who exercise do things that we believe—and are told—are good to do, like stretching before or after exercising, or engaging in muscle-strengthening as well as aerobic exercise. I would be interested to know how robust the evidence is to support these particular pieces of advice and information that are in the general public’s mind.

Finally, I turn to the National Centre for Sport and Exercise Medicine, which the Government established as part of their commitment to a lasting public legacy from the Olympic Games, as well as to improve support for elite and non-elite athletes. The Department of Health’s vision for the centre was for it to be,

“a hub of clinical and research expertise”,

used for the following objectives:

“increase exercise in the community; develop strategies to prevent diseases related to inactivity; and prevent, diagnose and manage injuries for both professional and amateur athletes”.

The centre was established with a £30 million grant to three consortia. However, we were told in our inquiry that no ongoing funding for posts or research was provided and therefore there is a question about the sustainability of the centre. We also suggested that the centre should take the lead in developing a national strategy for sport and exercise science and medicine. Could the Minister please update us on the progress of the national centre and how its sustainability is being established, and also on the production of a national strategy?

No one can doubt the importance of sport and exercise. The health of the population at large would be hugely enhanced if people exercised more. The prestige and entertainment provided by our elite athletes was vividly demonstrated by our national success at the 2012 Olympics and by Andy Murray’s Wimbledon triumph. Science and medicine can make an important contribution to the realisation of these benefits of sport and exercise. The United Kingdom has an absolutely outstanding science base in the biomedical sciences but the evidence that we heard suggested that there is insufficient cross-fertilisation between this excellent science base, carried out in our world-class universities and institutes, and the application of that science to improving the performance of our elite athletes and the health of the nation. I look forward to hearing other noble Lords’ contributions to this debate and the Minister’s reply. I beg to move.

15:58

[The Earl of Selborne (Con)]

My Lords, the Committee will be most grateful to the noble Lord, Lord Krebs, for the way he introduced this debate and for chairing the inquiry. I served on that committee and was enormously interested and impressed by it, particularly at the seminar that started our deliberations where I learnt a lot about the quality of the sport and exercise science and medicine in this country. It seemed very timely with the Olympics just about to start to have an inquiry into the extent to which the two objectives set out in paragraph 1 of our report were being delivered.

I will confine my contribution this afternoon to the second of those two objectives: how can the R&D base,

“be translated into treatments and preventative interventions to improve the nation’s health?”.

After all, if one thinks about it, the justification for spending public money on sport and exercise science must ultimately rest on its role in improving national health. That is not to say that winning more medals is not a perfectly laudable objective; it is clearly good for national morale and we should be proud about it. However, Dame Tessa Jowell, who we quote on page 8, paragraph 3, was right when she said that the goal of increasing participation in sport was,

“not just about increasing participation in sport for the sake of it … it was also to tackle one of the most serious health epidemics facing the UK, that of obesity”.

When you realise that the Department of Health had put an estimate on the direct and indirect cost of physical inactivity in England among our population at large at approximately £8.2 billion, you realise that we are talking of sums that concentrate our minds wonderfully.

We have not gone into behavioural change. It is one thing to estimate the cost but one knows how difficult it is for the most observant commentators to change even their own behaviour, let alone that of other people. Nevertheless, it is clear that this goal is well worth achieving, and if sports and exercise science and medicine can impact on the population at large and reverse what is, in the case of obesity, an epidemic that has been running for many years, it will be something well worth attempting. As well as mentioning obesity, as the noble Lord, Lord Krebs, reminded us, Tessa Jowell could have mentioned the 20 other chronic conditions identified as lending themselves to prevention or alleviation through physical activity. So we seek to increase participation levels in sport and exercise for all ages in order to capture the health benefits for the population at large.

The Government must be given credit for having put together a number of cross-departmental initiatives, listed at paragraph 45. They involve, of course, the Department of Health, the Department for Transport and the Department for Education. It was a bit of a surprise, I have to say, that the then DCMS Minister, when giving evidence to us, said that,

“the baseline for ... the whole sport plans, is driving up participation in sport; it is not a bigger drive on the nation’s health”.

That does not make a lot of sense. We all agree that we want more people to participate. Why? I think we all recognise that it is because there are going to be those benefits. I say again that it is perfectly reasonable for UK Sport—a DCMS arm’s-length body, as the noble Lord, Lord Krebs, reminded us—to spend government money and, for that matter, lottery money on promoting the agency’s primary objective of winning more medals in competitions. I am all for that. UK Sport also receives money from third parties that are not subject to the same commitment to share the benefits that derive from public funds. With commercial organisations there may well be a confidentiality clause, and I recognise that. However, it should be a condition of receiving public funds for there to be an obligation to promote the sharing of the research findings that I mentioned in order that the wider public might benefit. That is not happening; the links between some of the elite research, other athletic research and the wider public are not as strong as one would have hoped.

For healthcare professionals plenty of information is available. We have heard about the Chief Medical Officer’s guidelines on physical activity. However—I repeat what the noble Lord, Lord Krebs, told us—there does not seem to be an effective mechanism for promoting this information, the guidelines and other advice, to the medical professionals. Surveys show that their knowledge of the guidelines is, frankly, disappointing. At paragraph 36 we point out that Sport England told us that exercise prescription should “sit alongside” pharmaceutical and surgical interventions. Yet GPs have no incentive to prescribe exercise; I can quite see that many GPs say that that is all very well but it is most impractical for them to tell some of their more obese patients to go out and take exercise. What they want is a prescription. Nevertheless, as a layman, I am fairly confident that in many cases a prescription which simply said “Go out and take more exercise” would be a jolly sight more effective than a surgical or pharmaceutical intervention.

If you think about the quality and outcome framework, there are incentives to GPs to do this, that and the other. One incentive is to list those of their patients who fall into the category of obese, but the incentive is to put them on the list, not to take them off it. Once they are on the list, GPs get paid for keeping them there. That is not exactly an incentive for them to tell their patients how to get below the magical figure at which they are considered obese. Clearly the quality and outcome framework needs to be revised. Adding physical activity to the quality and outcome framework, as Sport England suggested, might be a good start. It would save a lot of money—I am quite confident of that. You would perhaps even make a very modest dent in the culture change we are looking for so that people recognise that exercise can help solve some of the problems that we are facing as an ageing and ever more obese population. We need to raise the profile of physical activity.

We have heard that there are up to 20 different chronic conditions which could benefit from physical activity, and I shall not repeat them. I am surprised, as a complete layman, how little understanding there appears to be of why physical activity can help with so many of those conditions, including, for example, mental health problems, cancer, type 2 diabetes and the like. This is clearly a field of great potential interest and benefit and one where sports and exercise medicine has a unique contribution to make alongside the medical and biological sciences. It would be enormously helpful if there could be much greater collaboration in order to ensure that these helpful insights are captured. However, as I said earlier, that will happen only if we have a culture where research findings—particularly those funded by the public—are made available to the wider research community and, through that, to the public at large.

16:04

[Lord Addington (LD)]

My Lords, this is one of those papers that when you pick it up and read it makes you think, “Oh!”. I have raised sport and exercise medicine on numerous occasions, and the noble Lord, Lord Hunt, and the noble Earl, Lord Howe, have been dragged in. My approach has always been about enhancing general medicine and making sure that people are encouraged to take up sport, because they are put back together again quickly to carry on with the rest of their lives and to carry on with sport.

This report is a fairly academic paper, and I feel that it misses some of the point. You do not play a sport or push yourself to keep fit; that is a by-product. If we could all stay fit by jogging 2.3 miles every third day or whatever it is, everybody would be happy. We would have the medical benefits. We could get on with it without trouble, but we do not. We know we do not. We need an incentive and a reason to take the exercise to get the benefit. This report slightly missed the point that you do sport because it gives you a buzz. Enjoyment is not quite the right word. Sport at various levels gives you a buzz, a feeling of achievement, the competition and the thrill. Exercise sometimes provides you with another good feeling: the chance to get outside. These feelings are going on. Although the report mentions the psychology, I do not think it got under the skin of why you are doing it.

Having said that, the report is right about the fact that we do not co-ordinate, in trying to make sure that we get the benefit of the health agenda—and, presumably, the preventive health agenda—and the saving that the nation gets. The two bits do not speak to each other.

I have come to the conclusion that sports are slightly worse than political parties for wanting to sit in darkened rooms talking to each other about themselves—only slightly, but probably worse. They do not like people intervening on what they do, and change is usually forced on them—usually by a failure to perform at a certain level, to achieve an increase in numbers or, classically, to compete at the level to which they aspire or that they are used to. So when the report says that the science of elite-level sport is unclear, that does not surprise me very much. I suspect that the art of coaching and getting the best out of people is at odds with scientific method. The psychology involved, and the signs that you are responding to what goes on around you, are probably not approached best by this. There is also resistance to intervention. Sharing—and we are much better at sharing now than we were before, probably because we have to take on funding from outside government, and it is taken seriously—still has not gone into the culture.

One obvious thing that I had not even thought about until this report came out is that, if you are an elite-level sportsman, you do not want to be experimented on. It is a bit of a no-brainer. Who does want to be experimented on, to be perfectly honest? They want to be treated, helped, supported—yes. But they will take on a revolutionary new course of action only if they absolutely have to. That is a very logical point of view to take. It is always going to be anecdotal when slight changes in practice occur.

I am increasingly aware that I am not qualified in my own sporting life. Although I flirted with the top of my sport, I am totally aware that we were amateurs; although we did not think that we were amateurs, we absolutely were. I remember the shock when a first-class rugby club got its first diet sheet. Those days are long gone. But having worked a little bit with the elite level, I can say that trying to change the culture of behaviour, when people’s whole lives have been dominated by trying to achieve performance, is something that acquires scientific language, if nothing else. Trying to identify exactly what you are getting out of it is a very important factor here. To get benefit for wider society in terms not just of health but of community support and interaction is another very important point that is not covered here.

Sports medicine has important lessons to teach ordinary medicine. It is a simple fact that a sportsman knows that, if you get a bump, you get it treated quickly; you do not go to your GP and wait three weeks for a physio appointment, because then you would find that a muscle was weakened or that there was a slight imbalance in how you walked that has led into an imbalance in your entire body, which means that you might have to take time off work. The noble Lord, Lord Hunt, said that it was a very sensible idea to get more physios involved in accident and emergency, when I raised this issue a few years ago. We are still not quite there yet, because we do not take soft tissue injuries seriously enough. Sport has already taught us, and given us examples, that you should intervene early on those things to stop them becoming chronic. We have simply not adopted that yet.

I have always been something of a fan of having sport more closely linked to the Department of Health so that we can get those benefits together, especially preventive stuff. Certainly, exercise is a factor in controlling weight and gives you an incentive not to carry extra weight—by which I mean surplus weight. My rants against the body mass index are well recorded here, and I think that we will leave the subject there. But a sensible approach to how to control weight and stay healthy is something that probably should be led by the Department of Health.

The report is interesting because it starts to open a door to what is going on. When you open a door you do not know what you will find, but here was a corridor leading to interesting places which was perhaps felt to be irrelevant to sport, at least at the moment. It is an interesting start but to think that the Olympics would change the culture overnight was a total misconception. It will not be the only misconception about the Olympics. My noble friend and I have been sitting on a committee which looked at this issue and we got the impression that many people felt that, once the Olympics arrived, the days would be longer, the summers warmer and we would be guaranteed to win gold medals not only for the next 20 years but for the next 30 years.

This has been an interesting start to a debate that needs to go further, and for that I thank all noble Lords who sat on the committee.

16:15

[Lord Moynihan (Con)]

My Lords, I congratulate the noble Lord, Lord Krebs, and his Select Committee on their report on sport and exercise science. It considers in detail whether there is any evidence that the Games have left a lasting legacy to encourage the nation to be,

“healthier, happier and more active”.

It questions whether the science-based support for high-performance athletes, as measured by medals at the Games, was sufficiently comprehensive and adequately disseminated to assist future generations. In commending the work of the committee on reviewing sport and exercise science as applied to elite athletes and how that work can be disseminated to a wider public, it is of no surprise to me that very little elite research is published in the United Kingdom.

It is certainly true that some sports fare better than others in this respect but in our flagship sport—football—those who earn a living dance to the tune of the paymaster. When Alex Ferguson employed a team of sports scientists, he did not want its work made publicly available to Chelsea. As a result, the Premier League has no research-based ethic, in part because of the powerful marketing machine of professional sport in the United Kingdom, and in part because there is little equipment research as the great confounder is the constant change of kit for commercial gain. The public want to buy the style of football boots used by Messi or Bale. The money is in the kit that people want to own. Tennis players will employ one model of shoes for a year and the likes of Adidas and Nike, with their research teams, will fiercely guard their commercial-in-confidence research. Every season brings a new range of kit—new ski shapes and sizes; new tennis shoes. That commercial reality is a major inhibitor to long-term research.

Secondly, it is very difficult to extrapolate the science of elite sport down to the recreational player. The science required to provide a marginal gain to Chris Hoy is of little relevance to the recreational cyclist in the country lanes this weekend. The outstanding work that Sir Clive Woodward, his team, the coaches and the intricately woven sports scientists undertook for Team GB in 2012 only marginally impacts on wider participation. For this is specialist science; it is world-leading scientific knowledge. It was borne out by 29 gold medals, as opposed to one in Atlanta only 16 years before when such specialist knowledge was absent.

This valuable work is now being taken forward by UK Sport and its subsidiary the English Institute of Sport, focusing as they are on performance solutions based around a holistic range of science, medicine, technology and research designed to increase the probability of success by optimising training programmes, maximising performances in competition and reducing the number of training days lost to injury. Clive Woodward was a pioneer in aligning and integrating this approach for the British Olympic Association—I declare an interest in having had the privilege of being chairman from 2005 to 2012, through Beijing and London—and while there are wider benefits we should not overstate the case for its application to recreational sport.

That said, there is room for wider dissemination of research where it does not impact competitive advantage for young athletes. Other countries do better in this respect. The NHL and NFL in the United States are examples. The NFL collates data centrally and provides public awareness programmes without disclosing the internal secrets of the sports scientists at the Miami Dolphins or Seattle Seahawks. Australia and South Africa deliver excellent sports science research.

The main reason for the difference is the sources of funding. In countries where research is funded by those without vested interests, the prospect for dissemination is enhanced. For countries such as ours, where tight funding control is exercised via our Premier League football clubs and governing bodies of sport, operating as they do in a highly competitive global market, the opportunity for long-term funded research is restricted.

On the wider issue of an Olympic legacy to improve the nation’s health, it is universally accepted that we need to address the challenge caused by obesity among young people, the expensive consequences we face as a country from having low levels of physical activity, inadequate facilities, and an absence of policies to address improving the nation’s health. I regret that we still have a department of sickness, whose default position to sport is the treatment of sports injuries, rather than a proactive Department of Health geared to improving the nation’s health. It is not as if the challenge came to light only during the Games. I would argue that government had a better approach to the subject 150 years ago, when the modern Olympic Games were constructed on the premises of preparing a physically active and fit generation—in that case, principally of men to fight for king and country.

Indeed, between the two world wars the British Government made comparisons with Germany and Italy and quickly recognised that as a nation we were physically ill prepared. The then Minister for Health, Sir Hilton Young, later Lord Kennet, asked at a dinner of the BMA in 1935 whether something could not be done,

“to bring home the benefits of physical culture, which was a culture of mind as well as of muscle”.

The challenge was accepted and was followed by the establishment of the BMA’s Physical Education Committee, the Central Council for Recreative Physical Training, which became the CCPR and now thrives as the Sport and Recreation Alliance under the chairmanship of Andy Reed. It was established then, in 1935, as the first significant body to receive government funding to meet the grave concern about the physical health of the community. It is indicative of the approach at the time that of the 34 original members of the council, no fewer than 14 were members of the medical profession. I declare a somewhat distant interest in that one of them was my grandfather, who was the president of the Royal College of Surgeons at the time.

Alongside those 14 sat seven physical educationalists and three prominent politicians, including Herbert Morrison. The wider aims they pursued resonate to this day. They sought,

“to establish the closest link between the Council and those responsible for physical activities in voluntary organisations and to investigate the best methods of placing the specialised knowledge of the physical training associations at the service of the population”.

They wrote their own mandate,

“to help to improve the physical and mental health of the community through physical recreation, by developing existing facilities for recreative physical activities of all kinds and also by making provision for the thousands not yet associated with any organisation”.

The last 80 years have seen successive Governments struggle to translate these aspirations into political reality, despite subsequently hosting the Olympic Games in London on two occasions.

However, as the Select Committee report and its recently published sister report on Olympic legacy highlighted, hosting the Olympic Games in London offered a unique opportunity to this country to raise the bar. Those of us involved with sport saw this as being a once-in-a-lifetime opportunity to take wide-ranging steps to create opportunities for a more active society on a national and integrated scale. Hosting a great Games was always, in my view, more than 17 brilliant days of Olympic sport and the breathtaking excellence of the Paralympic Games. As important was the objective to leave a lasting sports legacy for young and old, able-bodied and disabled, the length and breadth of the country. The sponsoring department for the Games—the DCMS at the time we won the bid to host the Games in 2005—set a target shared with the departments for education and health in the DCMS public service agreement 2005-2008 to:

“Halt the year on year increase in obesity among children under 11 by 2010”.

In reality we have witnessed a growing prevalence of obesity among all age groups during this time.

So why were the Olympic Games so important in this context? I would argue that the remarkable success of the Games—the brilliance of Sir John Armitt and Sir David Higgins in overseeing the design and build of the facilities for the Games on time and on budget, and the platform they created for the BOA to field its largest and most successful British team in over a hundred years, coupled with the work of the organising committee in putting on the Games—led to a level of national commitment and inspiration that was unparalleled in our time.

16:24

Sitting suspended for a Division in the House.

16:30

[Lord Moynihan]

My Lords, for politicians the Olympic Games were manna from heaven. The inspiration was there, and public enthusiasm backed by all-party support was in abundance. What was needed was the political will to translate inspiration into participation through improved facilities and a transformational change in priorities capable of matching the brilliance of the Games.

The opportunity for health and education to lead this agenda remains as strong as it did 80 years ago. Physical activity, not just sport, is the key to keeping people healthy and reducing the burden on the healthcare system. In Raising The Bar, the report I wrote with Kate Hoey when the bid was won in 2005, we called on the Government to: begin work on pioneering a nationwide programme of sport and exercise medicine, echoed in parts of this new report; substantially increase the number of training schemes for GPs as well as for sport and exercise positions; prescribe physical activity to patients, both for remittal and for preventive healthcare goals; and plough half the money saved by the proposals into the provision and maintenance of suitable sport and recreational facilities.

Of course, at the heart of such a programme is the need for co-ordination in government. In my view, the Department of Health should lead a major cross-government strategy to promote the health benefits of physical activity, so as to reinforce its importance. It was hoped that the Cabinet committee would launch this nationwide sports legacy to encourage the nation to be, to quote from the report,

“healthier, happier and more active”.

Indeed, we have had a raft of welcome initiatives labelled legacy projects, but no more initiatives in total than have been launched on an annual basis since the inception of the National Lottery. To us who are passionate about sport they are very welcome—to many other people they may pepper the daily bulletins with government press releases—but they have not transformed the landscape of the health of the nation. Now we have this report which concludes with disappointment at,

“the apparent lack of joined-up thinking in Government about the Olympic health legacy”.

The scientific case for a unified, high-priority national campaign could not be stronger. The twin causes of so much of the burden on the National Health Service are either genetic or environmental. On the environmental side, so many diseases are preventable if you maintain a healthy lifestyle. We need lifestyle departments, with teachers qualified in relevant disciplines in every school, both primary and secondary. We need to design opportunities which young people enjoy. If you want to try to improve the health of the nation it has to be through a sport that people can do by themselves. A sport requiring 22 people to take part is never going to be easy to facilitate and roll out nationwide. If you want to get girls involved, which should be a priority, it has to be in activities they want to do. They do not all want to take part in outside team sports, which is why dance is such an important option.

In closing, the report also calls for further work to be undertaken on international best practice. There is no better place to begin than Finland. No more than 30 years ago—I speak with affection and respect for that great country—it was characterised as a heavy-smoking, heavy-drinking, unfit country. It has completely changed. The past two decades have been marked by a major shift in emphasis from competitive and elite sports to health-enhancing physical activity for all, as seen most clearly in two successive sports Acts and a government resolution. Now, increasingly, multi-sectorial initiatives have led to substantial changes in the public funding of sports organisations, services and the construction of sport and recreational facilities. It is a system built on the enthusiasm of volunteers. In stark contrast, it is also a country where local authorities are central to the delivery of facilities. In the UK, sport and recreational provision is a low-priority, discretionary-line item in local authority budgets, too often to be cut first.

Finland’s sports policy places health enhancement before competitive or high-performance sports. It prioritises well-being and health and supporting children’s and young people’s growth through sports. It recognises the health benefits of the cradle-to-grave approach that is so important. We need a health and fitness programme that is both low-cost and designed from cradle to grave. Cycling, swimming and, in Finland, cross-country skiing figure prominently—all activities that you can do from five to 105. A similar nationwide approach in this country would be politically popular. I can think of no better leader of that initiative than the Minister.

We have a nation inspired by the Games. Surely it is time to translate that inspiration into participation and, in so doing, embed recreational activity as a fundamental building block for a true Department of Health in the 21st century.

16:38

[Baroness Grey-Thompson (CB)]

My Lords, I thank noble Lords for allowing me to speak briefly in the gap.

I am a huge fan of the benefits of sport and exercise science if it is used in the right way. In my career I have undergone numerous tests, aerodynamics, skinfold measurements, maximum lung capacity testing, something called a VO2 test—there is nothing like pushing on a treadmill until you feel you are about to collapse, and then having needles stuck into you—and I can confirm that ice baths are indeed vile. On one memorable birthday, my husband bought me three metres of aluminium so that I could build a racing wheelchair that was one kilogram lighter than that which was commercially available.

I agree with the noble Lord, Lord Moynihan, about history. There is an assumption that not much has gone on before and that sports science testing has been used for a long time. I also agree with the noble Lords, Lord Krebs and Lord Addington, that athletes do not want to be used as guinea pigs—I certainly did not—unless it is your own idea, and then it is marvellous. However, it is quite difficult sometimes to get sports scientists to think about doing things in a different way.

Within limited careers, it is important that we disseminate the information so that it goes through to quality coaching, the teaching of good physical literacy, and enables us to educate our young athletes right through to senior squad level, so that they remain injury free for as long as possible.

One of the problems I see going forward—and I have seen way too much of it—is that of literally reinventing the wheel: we do not learn from the past, somebody comes along with a new idea and sometimes wastes money doing things that have previously been done. Overall, lottery funding has significantly helped our athletes by ensuring they get the right support at the right age. As an athlete who benefited from it, I think that is tremendous. We need to keep urging national governing bodies to invest and use sports science. Some sports are using less of it now than they were 15 years ago.

Overall, there has been a positive influence on the general population. The design of sports equipment at Paralympic Games level has led to better design of day chairs. They are lighter, stronger and more aesthetically pleasing. Certainly in amputee running, the work that has gone into the development of prosthetics for sprinters has had a massive positive influence on non-runners in terms of their walking gait and equipment, and it is more generally accepted that they deserve really good prosthetic equipment. There have been some very positive things that we need to keep pushing forward.

Finally, I commend the work of the committee. I am very pleased and I am grateful for being allowed to speak.

16:40

[Lord Hunt of Kings Heath (Lab)]

My Lords, I, too, welcome this debate and the report of the committee chaired by the noble Lord, Lord Krebs. I think it is a truth universally acknowledged that the Olympic Games in London were outstanding and never to be forgotten and that the legacy is as important. The argument for investing in sports science in elite performance and in non-elite sports and exercise has been very persuasively put by all noble Lords who have spoken in the debate this afternoon.

The question first posed by the noble Lord, Lord Krebs, was: the performance of Team GB in the Olympics was outstanding, but could it have been even better if even more use had been made of science? The noble Lord, Lord Moynihan, answered in the affirmative and pointed the way forward in terms of there being a very strong case for future investment in science in relation to elite sport.

The noble Lord, Lord Krebs, referred to heated shorts. As a commuting cyclist, I am very attracted to the idea, particularly as Christmas is coming up and the winter will, no doubt, get colder. More seriously, it would be good to hear from the noble Earl, Lord Howe, about future investment in sports science in elite and non-elite sports. The noble Lord, Lord Moynihan, made a very important point when he said that there is a problem with the sharing of knowledge with the vested interests of investors in sports science as opposed to the non-vested interests. That does not necessarily have to be government, but government can, no doubt, play an important role.

The other question that arises from this is about the extent to which we are investing in science to increase our knowledge of the impact of exercise on good health. This is the second argument that has been put in your Lordships’ debate this afternoon. The noble Lord, Lord Krebs, and other noble Lords referred to the health benefits of exercise, and it is striking that although this is increasingly known about, it does not seem to have much impact on the general public’s desire to exercise. The post-legacy figures for the public taking up sport or more generally taking part in exercise have been very disappointing. The figure of 150 minutes of moderate exercise per week seems as far off for many of the population as it ever was. Noble Lords probably know that I live in Birmingham, and my understanding of the latest statistics there is that 22% of young people in Birmingham are classified as obese. That is a shocking figure. We know the impact that that will have in future years in terms of health inequalities and demands being made on the health service. As we know, we have an epidemic of diabetes in many parts of society and of the country. As regards the figure of 22% obesity among young people in Birmingham, you do not need much knowledge of science to know that that will lead to huge pressures being put on the health system in that city in the coming years.

I wish to ask the noble Earl, Lord Howe, about the role of general practitioners. A number of points have been made in that regard. It was argued persuasively that if GPs were to prescribe exercise that might have a positive impact in terms of people’s response. We know that as regards health issues, particularly smoking, nothing is more effective than a GP telling a patient that he or she needs to think about giving up smoking. It would be helpful to ensure that GPs are all facing in the right direction on this issue.

Does the noble Earl think that health and well-being boards ought to prioritise investment in sport and exercise vis-à-vis local authorities and the health service? After all, health and well-being boards recognise that local authorities have a big role to play in this area. Local authorities are also responsible for running extensive leisure services—or at least they were—and have a wider role in this area in liaising with schools. Surely sport and exercise ought to be a major priority in joint strategic needs assessments, which attempt to bring together wider health policies. Will the noble Earl assure the Committee that the Government will push health and well-being boards in that direction? I would argue that they could be the local equivalent of the committee set up by the BMA in the 1930s, and its successor organisations, to which the noble Lord, Lord Moynihan, referred.

Another very important point raised by the committee of the noble Lord, Lord Krebs, was the attitude of the Department for Culture, Media and Sport towards the health benefits of sport. The Government reject the committee’s assertion. My own experience in government suggests that there is a gap between the Department of Health’s policy of encouraging exercise and the DCMS’s focus on sport. Indeed, I have taken part in theological debates between the two departments on where one element ends and the other begins. This is a fruitless exercise as it is patently obvious to anyone with any common sense that sport and exercise go together. If those departments find it difficult to resolve that issue, something else needs to happen. That could involve assistance in the form of a Cabinet committee, to which the Government refer in their response to the report of the noble Lord, Lord Krebs, or, as the noble Lord, Lord Moynihan, suggested, we should simply make it clear that a good health outcome is the number one priority. I believe that something more needs to happen in this area.

Noble Lords have not really mentioned the role of the Department for Education despite the fact that it has a crucial role to play in this area. We have seen very regrettable reductions in government support for school sport and I hope that the noble Earl’s department has actively pointed out to Mr Gove the error of his ways. Following the reaction to the original cuts in government support for school sport, the Department for Education partly retracted its proposals and established the School Games project—as we are told in the Government’s response—which attempts to provide more opportunity for pupils of all abilities to take part in competitive sport in schools. But I would like to see more—and I would like to see the Department of Health become the champion in Whitehall of the need to promote school sports, competitive sports and other exercises.

I would also like to hear more about how we can encourage sports clubs to work in schools. The noble Baroness, Lady Heyhoe Flint, has done so much to encourage girls to take part in competitive sports; she will know of the Chance to Shine project, which is about encouraging state schools to come back to playing cricket. Part of that approach is to encourage local cricket clubs to send their coaches into schools. I would like to hear more about how the Government might encourage that in future.

We then come to the issue of investment. The noble Lord, Lord Krebs, referred to the role of the National Centre for Sport and Exercise Medicine. Clearly, there is a concern here about its future viability. Can the Minister give the Committee some comfort that the Government recognise that continued funding support needs to be provided? Does he think that the Department of Health’s own research and development fund could come up with some support? It seems a persuasive argument that, given that the department is concerned with improving the health of people in this country, and given that sports and exercise clearly have a vital role to play in doing so, I would have thought that the argument for some support and funding from his own department’s R&D fund, which is not extensive but is very significant, ought to be considered.

The noble Lord, Lord Addington, suggested that the noble Earl, Lord Howe, and I were interlopers in this debate. However, I have no doubt that the encouragement of sports and exercise can play a critical role in improving the nation’s health and well-being. I am also in no doubt, having listened to the debate and read the report, that investment in science and science research could help us and use that knowledge to encourage more of the population to play a part. When one looks at some of the great health problems that we face—of frailty, dementia and obesity—one can see emerging research that suggests that exercise and sports can very much help us to meet some of those challenges. Given the department’s role, does the Minister not accept that it could play a much bigger role in this whole area in future? I hope that the department will accept that opportunity.

16:53

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, first, I congratulate the noble Lord, Lord Krebs, on securing this debate and on the excellent work of the Select Committee on Science and Technology, which he chairs, in highlighting the important issues associated with sport and exercise science and medicine. The Government have welcomed the Committee’s report and its focus on the quality and application of research in this area.

We agree that the biomedical basis for improving performance of elite athletes needs to be of the highest quality possible and meet international peer review standards. For this reason, UK Sport and the English Institute of Sport have robust processes in place to quality-assure the projects that they support. For example, all projects are reviewed by an independent research advisory group, which includes a number of leading experts in the field of sport science.

Our elite sport programme is the envy of the world. UK athletes continue to perform strongly at the highest levels, thanks to the funding and technical support they receive from UK Sport and the home country sports institutes. Based on Team GB’s performance, there is no reason to doubt the quality or appropriateness of the research.

In the light of this success, it makes sense for this knowledge to be shared so that it might benefit non-elite sports men and women. Indeed, there are a number of ways in which UK Sport disseminates research findings. However, it is important to remember that the end goal of research is to support and maximise athletic performance on the world stage. Although UK Sport and the English Institute of Sport concede that more could be done to disseminate their findings, they need to do so without compromising the UK’s competitive edge.

The committee’s report rightly highlights the societal and economic costs of inactivity—a point well made by the noble Lord, Lord Hunt—and the benefits of exercise in promoting health and treating chronic disease. Indeed, the UK CMOs’ report, Start Active, Stay Active, contains recommendations across the life course on the levels of physical activity needed to achieve these benefits. The noble Lord, Lord Hunt, mentioned the research funded by my department. I can tell him that the department’s National Institute for Health Research funds a wide range of research on the benefits of physical activity.

I completely agree with my noble friend Lord Selborne that it is of crucial importance that breakthroughs in sport and exercise science and medicine are translated into health benefits for patients and the public whenever relevant and applicable. For example, characterising the mechanisms by which heart function improves with exercise in elite athletes and the military can help explain how heart function is impaired in people with diabetes or with high blood pressure. There are numerous examples of where the work of UK Sport and the English Institute of Sport is linked to benefits in the health and wellness domains. These typically involve partnerships with universities and necessitate the sharing of knowledge—for example, vitamin D supplements for bone injury and soft tissue injury recovery. There are a number of other channels, including formal and informal events where knowledge is shared within and outside the elite sport community. I think we can therefore be reassured about one of my noble friend’s central points—that taxpayer funding should lead to benefits to the wider public.

Translational health research is a high priority for the Government. In August 2011 we announced a record £800 million to support this through biomedical research centres and units funded by the National Institute for Health Research. Some of this money has been used to establish a new research unit at Leicester and Loughborough. This unit is helping to expand lifestyle interventions available for the prevention and treatment of chronic diseases. The funding is also enabling the NIHR biomedical research centre at University College London Hospital to study the mechanisms through which exercise promotes health, and how to deliver effective exercise strategies.

An important link in all this, which was mentioned by the noble Lord, Lord Krebs, is the first ever National Centre for Sport and Exercise Medicine, a legacy bid commitment of the 2012 London Games. The £30 million project funded by health is on track, with the London hub now actively functioning and treating patients. Loughborough is anticipated to become operational in 2014, and Sheffield will be the final site to become operational in late 2015. As well as supporting elite athletes, the centre’s influence will extend to local NHS hospitals and primary care facilities to provide a service for anyone who plays sport. Public Health England is overseeing the continuing development of the national centre and is keen to ensure that the centre performs a clear leadership role for sport and exercise science and medicine for the next five years and beyond. Public Health England is supporting the national centre to position it as an international voice on sport and exercise medicine, with strong links with the wider physical activity agenda and a global academic platform. PHE is considering an outline business case for funding in 2014-15 to support co-ordination across the national centre and as pump priming for long-term sustainability. The centre is keen to be seen as an independent organisation which generates income through direct patient care and research funding. It has appointed R&D leads to start that work. We can see the makings of the centre as a sustainable long-term organisation going forward.

The noble Lord asked about the centre as a source of a national strategy. Public Health England is, once again, working with the national centre to develop a sport and exercise medicine network of academics to help collaboration in research funding bids across multiple academic units. However, potential for conflict of interests has emerged as a stumbling block in developing a national research strategy.

In the context of public health, the noble Lord, Lord Hunt, asked about the role of health and well-being boards and his view that they should be prioritising investment in exercise. Many noble Lords would identify with that view but we must remember that health and well-being boards have been given, quite explicitly, the freedom to prioritise their own spending in relation to local public health priorities. However, I expect Public Health England to show the way in the area for local health and well-being boards to follow.

We envisage that the national centre will continue to attract grants from the research councils and deliver work of the highest quality, with the support of their world-leading host institutions.

Given the important health benefits of physical activity, the Select Committee was right to focus attention on the training of health professionals at all levels to be able to prescribe exercise for prevention and treatment. Clearly, the content and training curricula for doctors is determined by the medical schools and royal colleges, but the Department of Health will work closely with Public Health England and other interested organisations to make the case for physical activity in healthcare. On a more practical level, I am pleased to announce that Public Health England has commissioned an e-learning module on physical activity for healthcare professionals, to be distributed by BMJ Learning.

The noble Lord, Lord Krebs, mentioned the National Institute for Health and Clinical Excellence. NICE plays an important role in turning research evidence into authoritative and practical guidance for practitioners and commissioners. Where appropriate, both its public health and clinical guidance recognise the contribution that physical activity can play in the prevention, management and treatment of particular conditions, ranging from obesity to osteoarthritis and low back pain. I assure the noble Lord that many of NICE’s clinical guidelines recognise the important role that exercise and physical activity can play in the management of individual conditions. For example, its clinical guidelines on osteoarthritis and low back pain already recommend exercise. I am confident that NICE will continue to consider the role of exercise and physical activity in the management of particular conditions, where the evidence allows.

The noble Lord, Lord Hunt, asked about the scope for disseminating exercise guidance for specific chronic conditions to GPs. We are exploring the options for a national dissemination of this learning, which would need to be underpinned by better training for doctors in the benefits of physical activity. The new e-learning package commissioned by Public Health England represents an important step in that direction.

Exercise professionals also play an important role in supporting the most vulnerable patients to exercise as part of their treatment for a range of conditions—for example, as part of cardiac rehabilitation. Ukactive has been working with the royal colleges and training organisations for the fitness industry to develop new professional and operational standards for exercise referral. That work is awaiting the update by NICE of its existing recommendations on the use of exercise referral schemes, which it plans to publish in September next year.

The noble Lord, Lord Krebs, asked about the possibility of incorporating physical activity into an indicator in the quality and outcomes framework. This year saw the introduction of two new QOF indicators for physical activity. Those measured the percentage of patients with hypertension who had been screened for inactivity and, of those not meeting the guidelines, the percentage offered brief advice on how to be active. I have to tell him that these indicators have been retired from the 2014-15 QOF as part of the exercise to free up space for GPs to provide more personalised care. That agreement saw a reduction of the QOF by more than a third. However, the NHS health check programme continues to recommend that patients should be screened for their physical activity levels and the delivery of brief advice or an exercise referral for those who are shown to be inactive. At the same time, we are actively considering the case for continued monitoring of the retired QOF indicators to help inform NHS England’s developing primary care strategy.

We are committed to the dissemination of the UK Chief Medical Officer’s guidelines for physical activity, to both the public and medical professionals, and we are working with Public Health England and other organisations to help make healthcare professionals aware of those guidelines.

My noble friend Lord Addington asked why there are not more sports injury people in A&E to treat soft tissue injuries. I agree that athletes understand the importance of prevention. Sport and exercise medicine is, as he knows, a young specialism. Part of the work of the National Centre for Sport and Exercise Medicine will be to scale up sports and exercise medicine services and it will be important to ensure that supply is linked to demand.

The noble Lord, Lord Krebs, asked about the quality assurance of research initiated by the DCMS. I have already alluded to that very briefly. There is no specific monitoring or assessment undertaken by the DCMS of the research commissioned by its arm’s-length bodies. However, UK Sport acknowledges that further steps are necessary to provide stringent assessments of standards and has already made progress on this for the next funding cycle from 2013-17. This includes the appointment of an independent, technically structured sub-committee in addition to the research advisory group that has been in existence for a number of years. That will provide a more extensive overview of all investments in science, medicine and engineering.

Sport is a key part of a wider physical activity agenda, with an important role to play in getting and keeping people active and thereby improving their health and well-being. All sport is physical activity but an important part of Sport England’s youth and community strategy is pilot funding to support how sport can best contribute to improving health and, at the same time, grow weekly sports participation. There are important links between elite sport and the health of the public.

Aligned to the ambition of getting more people participating in sport once a week, Sport England has focused its work on tackling inactivity as this is where we can make a significant contribution to reducing health inequalities and produce the greatest potential health benefits.

Returning to elite sport, the fruits of National Lottery funding are there to be seen in Team GB’s recent success in the Olympics. I was reminded today that in 1996 GB won only one gold medal. In 2000, that went up to 11; in 2004 it was 9; in 2008 it was 19; and last year it was 29 gold medals.

However, the lasting impact of sport and healthy living has always been at the centre of the legacy ambitions of the Olympic and Paralympic Games. Our 10-point plan includes: elite sport, world-class facilities, major sports events, community sport, the strategy for youth and community sport, the charity Join In, school games, physical education and disability sport. For example, there will be £150 million a year for primary school sport starting in September 2013 and £1 billion over four years to boost youth and community sport.

In his Autumn Statement, my right honourable friend the Chancellor of the Exchequer announced that the Government will provide £150 million of funding to continue the school sport premium into the academic year 2015-16, meaning that primary schools will be able to put in place longer-term plans to improve their PE and sport provision. This is not just about elite sport. It will help people start to be and stay active, whether through sport or wider physical activities.

My noble friend Lord Moynihan asked about a cross-government push. The Olympic and Paralympic Legacy Cabinet Committee is the focal point for legacy and is well placed to ensure a joined-up approach to sport and physical activity. The Department of Health is obviously the lead department for health in promoting physical activity. We are working with other departments to support active lifestyles. Departments have jointly made available £300 million to raise the game in primary school sport. The Department for Transport awarded £77 million to increase cycling in eight of our major cities, with £1.2 million from the Department of Health to support walking. More than a million more people are playing sport than in 2005. I suggest to noble Lords that that progress is positive. As regards the Government’s effort, all this adds up to a significant investment in health-enhancing physical activity, driven by what we have learnt from sport and exercise science and medicine.

17:11

[Lord Krebs]

I thank all those who have taken part in this debate. It has been a privilege to hear the contributions of all noble Lords, but particularly of those who have first-hand experience of participating in elite sports as Olympians or other forms of competing at a very high level.

One theme has come through repeatedly: the huge importance of the health benefits of sport and exercise in tackling the chronic diseases that plague the population of this country and will cost us huge amounts of money in future. The noble Lord, Lord Addington, raised a very important point when he talked about the enjoyment of sport and exercise. Perhaps the key to encouraging people to be more active is to show them the enjoyment that can be obtained from it. He also referred to the art of coaching elite sports men and women. There may well be an art to it but that does not mean there cannot be science as well working alongside the art. The point made by the noble Lord, Lord Moynihan, and others about learning the lessons of history and from other countries is immensely important. Although we are obviously doing many things very well, we must not forget the possibility of healthy plagiarism from other countries and the history books.

I thank the noble Earl, Lord Howe, for his responses to the questions raised during the debate. I was encouraged to hear about additional investment in sport and exercise science and medicine, the sustainability of the national centre and the e-learning module that will help professionals to disseminate the importance of exercise to patients and the public at large. I also noted and welcome that he said that there was an emphasis on disseminating and publishing the results of work on elite athletes so that it could benefit the wider community. I still very much hope that a national strategy for sport and exercise science and medicine will emerge in the not-too-distant future, but I am very pleased with the responses obtained.

Motion agreed.

EU: Fraud (EUC Report)

Wednesday 11th December 2013 Grand Committee

Motion to Take Note

17:15

Moved by

[Lord Stoneham of Droxford]

That the Grand Committee takes note of the Report of the European Union Committee on The Fight Against Fraud on the EU’s Finances (12th Report, Session 2012–13, HL Paper 158).

[Lord Stoneham of Droxford (LD)]

My Lords, this Motion was at one stage in the name of the noble Baroness, Lady Corston. As noble Lords may already know, the noble Baroness was unwell last week and is recuperating at home. Therefore, I am speaking on her behalf.

The European Union Committee’s Sub-Committee E on Justice, Institutions and Consumer Protection, of which I am a member, prepared the report which is now before the Grand Committee. The Motion invites the Grand Committee to take note of the report The Fight Against Fraud on the EU’s Finances. I welcome the involvement in this debate of my noble friend Lord Newby. Given his experience in Customs and Excise, I cannot think of a Minister more qualified to reply to a debate on fraud.

In July last year, under the considered and diligent stewardship of the predecessor of the noble Baroness, Lady Corston—the noble Lord, Lord Bowness—the sub-committee of which I am a member decided to launch an inquiry into fraud on the European Union’s finances. The committee sought to gauge the vulnerability of European Union funds to fraud and assess the effectiveness of the European Union’s anti-fraud system and the effectiveness of the member states in pursuing any crimes perpetrated against the European Union’s budget.

In addition, the inquiry was timed to coincide with the publication of a directive aimed at protecting the European Union’s financial interests through the criminal law. We saw more than 30 individual witnesses and some members of the committee, including myself, travelled to Brussels, where we saw all the relevant EU agencies and bodies tasked with dealing with fraud, plus a number of MEPs. We are very grateful to all those who submitted evidence to our inquiry.

Since 2011, the Commission has produced a number of legislative proposals designed to improve the protection of the EU’s financial interests which are highlighted in the report. In addition, since the report’s publication in April this year, the Commission has also brought forward a regulation reforming Eurojust—the European Union’s criminal justice agency—and the controversial proposal introducing the concept of the European Public Prosecutor’s Office, which is designed to prosecute crimes affecting the Union’s financial interests. The Government have decided not to opt in to the Eurojust proposal, against the express view of this sub-committee, and the coalition agreement has ruled out the UK’s participation in the European Public Prosecutor’s Office.

European law makes combating fraud on the EU’s finances the responsibility of both the European Commission and the individual member states, but the member states’ authorities remain responsible for administering 80% of the money. Given this fact, the overwhelming weight of responsibility for the protection of the EU’s financial interests falls on the individual member states and, in the context of criminal frauds, their crime-fighting bodies.

The report recognises the hidden nature of criminal fraud. We understand that estimating the levels of fraud perpetrated in the individual member states with any degree of accuracy is very difficult. These problems are magnified once you introduce the additional complexity of the European Union’s 28 member state structure, but these difficulties should not allow the member states to ignore their responsibilities.

I plan to concentrate on four key aspects of our report: first, the vulnerability of EU funds to fraud and their potential scope for fraud; secondly, fraud specifically in the UK related to EU funds; thirdly, the European fraud concerning VAT; and, fourthly, the European Union’s anti-fraud structure. I turn first to one of the main conclusions of our report; namely, the vulnerability of EU funds to fraud. In 2011—the year that forms the main focus of the committee’s inquiry—the EU’s budget was €141.9 billion. In 2011, the total government revenue in the UK for the same year was £589 billion. The UK’s budget is three and half times the EU budget.

Under its obligation to report annually on its anti-fraud work, the Commission produces a figure for fraud in the European Union based on the frauds reported to it by the relevant member state authorities. The figure for 2011 was €404 million, or 0.28% of the EU’s 2011 budget. Many of our witnesses told us that this was an underestimate of the problem, and Rosalind Wright QC, former director of the Serious Fraud Office in the UK, said this figure represented the tip of the iceberg. The Commission rejected the iceberg analogy and suggested that EU funds were no more prone to fraud than national budgets, while the UK Government argued that EU funds,

“will always be vulnerable to fraud”.

The UK’s National Fraud Authority which, until its recently announced abolition by the Home Secretary, was tasked with co-ordinating anti-fraud action in the UK, told us that the current level of fraud suffered by the UK public purse amounts to about £20.3 billion per annum, which suggests that for 2011 in the UK, 3.4% of the public purse was lost to fraud. So, in line with the Commission’s evidence that the EU’s budget is no more prone to fraud than national budgets, the committee took the estimate for fraud in the UK and applied it to the EU’s annual budget for 2011 and arrived at a figure for fraud on the EU’s budget for 2011 of €4.82 billion, a figure more than 10 times more than the Commission’s official figure.

The committee’s report recognised the various caveats and warnings that have been applied to the process of deriving these figures for fraud on the EU’s budget from national figures. Nevertheless, it is clear to the committee that the Commission’s official figure for 2011 of €404 million offers only a glimpse of the levels of fraud perpetuated against the EU’s finances. If the Government are right that EU programmes will always be vulnerable to fraud, and in some member states increasingly so, the final figure will be even greater. I note that in its recent impact assessment in support of the proposed European Public Prosecutor’s Office, the Commission suggested that the actual level of fraud on the EU’s budget was in the region of €3 billion, so it is moving towards the committee’s figure.

In their formal response to this report, the Government expressed concern about our estimate of the level of EU fraud, adding that they did not recognise the committee’s figure. We were disappointed with the Government’s lack of engagement with this key conclusion of our report, so I offer the Minister an opportunity during this debate to engage with this aspect of our conclusions. Given this disappointing context, we were unable to see how the member states’ and Commission’s claims to protect the EU’s financial interests could be justified. We hope that the introduction of the directive on protecting the EU’s financial interests via the criminal law, which introduces an EU-wide definition of fraud on the EU’s finances, will help to alleviate this problem.

We also looked specifically at the extent to which fraud against the EU’s budget was committed from within the UK and assessed the rigour of the Government’s duty to report evidence of fraud to the Commission. I regret that the picture that emerged was not good. The committee recognised that the same difficulties that apply to estimating fraud on the EU’s budget also apply to assessing the levels of EU fraud committed from within our shores. None of our witnesses was willing to place a precise figure on the problem, but the National Fraud Authority suggested a figure of £41 million, about 1% of the total EU-funded expenditure in the UK. However, it warned us to treat this estimate with a “high degree of scepticism”.

What emerged is that no single government department or body appeared to co-ordinate or take ownership of the UK’s fight against EU fraud. The Government told us that they take all these matters seriously and EU fraud “extremely seriously”, but the responsibility to deal with fraud and to report it to the Commission falls on the individual department dealing with the relevant funds. When asked, the Minister was not “sure” whether the Government collated all the different departmental figures into one place. This lack of co-ordination concerned us and confirmed our view that individual member states, including the UK, do not devote significant resources to pursuing EU fraud and, as is their responsibility under EU law, to reporting it to the Commission.

We therefore recommended in the report that the Government nominate a single department or agency to co-ordinate the fight against EU fraud in the UK and to take responsibility for attempting to quantify the problem. In their response to us, the Government agreed that this information should be shared between government departments and that, while there is room for improvement, such sharing already takes place. We welcome this, although we have wondered why it has been so difficult for the committee to get a clearer estimate of the level of the problem in the UK, even allowing for the nature of fraud, from those witnesses we saw from the relevant national bodies.

Furthermore, on 2 December the Home Secretary by way of a Written Statement announced the abolition in March 2014 of the National Fraud Authority. I note that her Statement makes no mention of EU fraud, nor does it assign responsibility for dealing with the problem to any specific UK body. I therefore have to ask the Minister: who will be responsible for leading the fight against EU fraud in the UK after 31 March 2014?

I turn now, briefly, to VAT fraud or carousel fraud, as it is often known. This is a highly technical fraud perpetrated against the VAT system involving a series of often non-existent transactions involving the purported movement of goods and services within the EU’s single market. At the outset of our inquiry, the Government were of the view that VAT fraud was outside the scope of our investigations, but it was clear from the evidence received that this remains a very significant problem throughout the EU. The report is clear that the committee understands the Government’s opposition to any EU measure or action which would extend the EU’s competence into tax enforcement in the UK, but we argue that this legitimate concern should not allow fraud which diminishes the amount due to the EU to be ignored or not pursued with vigour. We have our doubts that existing EU measures are tackling this problem and, therefore, the report called on the Government to suggest alternative robust measures to combat VAT fraud. In their response the Government reassured us that they are fully committed to fighting VAT fraud and that it is “pursued with vigour” by HMRC. Perhaps the Minister will confirm what that figure will be. We do not doubt their determination, but are the Government sure that the other member states’ authorities pursue this problem with similar enthusiasm and vigour?

The committee considered the quality of the EU’s current institutional framework for dealing with fraud. We found that OLAF—the EU’s anti-fraud body— remains an agency of limited powers. Budgetary restrictions force it to be selective about the cases it pursues. We are concerned that if OLAF were to be seen as a body whose recommendations are never followed up by the individual member states which lack enthusiasm in dealing with EU fraud, its effectiveness will be questionable. We also fear that the relationship between the EU’s crime-fighting agencies—Europol, Eurojust and OLAF—as currently constituted represents a tangled web which undermines any co-ordinated response to fraud on the EU’s finances.

Finally, given that it was repeatedly proposed as a solution to the problems inherent in the EU’s anti-fraud system, the report briefly addressed the then unpublished proposal for a European Public Prosecutor’s Office. This was brought forward by the Commission in July, and we issued a reasoned opinion challenging the proposal on subsidiarity grounds. We concluded the report by asking the Government how they would propose tackling the flaws identified in our report without participating in the European Public Prosecutor’s Office proposal. We have as yet not received a satisfactory reply to that question and would be grateful if the Minister could address the issue in his reply.

While combating fraud in the EU’s finances may pose unique challenges for both the EU’s institutions and individual member states, protecting the public purse in these difficult economic times remains the responsibility of us all, as we say in the opening chapter of the report. Those of us committed to countering negative public scepticism about EU institutions also have every interest in a more vigorous approach to eradicating the perception and reality of fraud. I beg to move.

17:29

[Lord Bowness (Con)]

My Lords, I thank my noble friend Lord Stoneham of Droxford for his comprehensive introduction of this report and for his support—together with that of the noble Lords, Lord Rowlands and Lord Anderson of Swansea, the noble Earl, Lord Sandwich, and my noble friend Lord Eccles—during the conduct of this inquiry under my chairmanship of the sub-committee. I am sure that we all want to send the noble Baroness, Lady Corston, good wishes for recovery from her illness.

I am delighted that the House, albeit eight months after publication, now has the opportunity to debate this report. I will emphasise a few points, although they have been covered very adequately by my noble friend. I particularly regret the rejection by Her Majesty’s Government of the suggestion that one department have overall responsibility for ensuring that the fight against fraud is kept to the forefront of everyone’s attention. I note from the response that the Government believe that individual departments are best placed to detect, prevent and rectify fraud or irregularities and that reducing this to a single department would lead to duplication and slow down the process. Of course, the report did not advocate that but rather that one department should have responsibility for co-ordinating the efforts of each. While we understand a lack of knowledge of the amount of undetected fraud, it is less understandable why, in evidence, the Government were unable to give us a total figure for detected fraud.

We also advocated one point of contact between OLAF and the United Kingdom. The Government highlighted the difficulties of different jurisdictions within the United Kingdom. However, that should not create a problem. This is still one country with a national Government. There could well be a single point of contact. What happens thereafter would and should remain a matter for the relevant devolved Administrations.

We are also well aware of the Government’s position on the European Public Prosecutor’s Office. Indeed, the Committee and the House made their position on that clear. I do not know whether the present proposal will go ahead under enhanced co-operation but the recommendation in the report urged the Government to make clear what proposals they would bring forward to tackle this problem. Like my noble friend Lord Stoneham, I ask the Minister to explain further.

We were singularly disappointed by the apparent lack of engagement by the Government and HMRC in the course of this inquiry and report. That appeared to stem from the belief—a proper one—that matters of taxation are the exclusive prerogative of the member states. However, protecting one’s turf should not exclude recognition of a problem or the search for a solution. That I felt particularly true of the problem of VAT fraud and its international elements, coupled with the complicated and some may say tenuous connection between VAT gathered and money due to the European Union. It seemed and still seems to be an area of legitimate inquiry for the committee. That view was confirmed when the Minister told us, “Oh, it was only a very small proportion of the money that went to the European Union compared with VAT totals as a whole”. That small sum was £2 billion.

The committee went to Brussels and saw OLAF. We were singularly concerned about the apparent discord between the director and the supervisory committee, which evidenced itself in the morning that we were there. I do not know what the outcome is. Perhaps the Minister, having seen our report and the response, will be able to bring us up to date on the present position.

We also talked to a number of MEPs and the relevant committees. They showed considerable concern and awareness of the problem—a view shared, I believe, by my colleagues on the committee—but perhaps do not have the power necessary to make a real difference. I will be interested to hear from the noble Baroness, Lady Morgan of Ely, who is winding up for the Opposition for the first time in a European debate in which I have taken part, how, in the light of her considerable experience in the European Parliament and of matters of this kind, she sees the problem being dealt with.

Having been got up at a somewhat ungodly hour to be interviewed about this report by a radio presenter, he missed the whole point of the report and raised with me the question of the European Union’s accounts not having been signed off by the auditors. I suggested to him that it was not really relevant to the point. However, perhaps we should remember that it is not an easy matter to deal with. The stringency of the rules and the fact that the money is dealt with by member states leads to a difficult situation in the Union’s accounts. To put that in context, I read in the Times this morning that the Auditor-General has declined to sign off the accounts of the Department for Work and Pensions and that depending on whether you believe the Telegraph or the Daily Mail this is the 24th or 25th consecutive year in which that has occurred.

17:36

[Lord Davies of Stamford (Lab)]

My Lords, I congratulate the noble Lord, Lord Bowness, who was the chairman, and his sub-committee on their decision to focus on this extremely pertinent matter and on the thoroughness of their engagement in this revealing inquiry. I also take the opportunity to welcome my noble friend Lady Morgan to the Front Bench on a European issue. It is the first time I have had the privilege of standing beside her or behind her on a European subject on which she has been leading for my party.

Three particularly striking and salient points emerge from this report. The first relates to the amount of fraud. The Commission suggests that fraud was running at €400 million in 2011—I have taken this figure from the report—which would be 0.28% of the current budget of the EU. That is a very low figure indeed. The committee obviously thinks that that is an understatement and has decided that it wants to multiply that to produce a figure that corresponds to the fraud estimated to exist in this country as a proportion of its public expenditure. It came up with a figure roughly 10 times greater than the commission has proposed. It does not have any reason for that particular multiple and it may be that the truth lies between those two figures. However, what is inconsistent with the picture given by this report is the notion, which is purveyed the whole time in Eurosceptic propaganda, that the European Union is a sink of iniquity in terms of fraud. Clearly the level of fraud is, at worst, comparable with the level of fraud in this country. That is a bad situation. All fraud is regrettable and must be dealt with thoroughly. It should be of particular concern to parliamentarians because it is our job to monitor the performance of governance in this area. Nevertheless, the figures before us will be quite surprising for the British public, who are used to being fed the propaganda line by the media in this country that the level of fraud in the EU is vastly greater than here. Some of the analogies that the noble Lord, Lord Bowness, has cited about British government departments’ records in that area reinforce that.

The second matter is very salient. It is quite clear that the overwhelming majority of fraud, perhaps 99%, arises in the area where national Governments are disbursing EU programmes. It does not arise in the institutions of the Union where fraud is an extremely rare event. That is even more striking in relation to the false propaganda that I referred to. There is an irony here because the Eurosceptic lobby in this country, which is very powerful, as we know, always makes out that this fraud is a consequence of too much European integration and is part of the evil of European integration or, they would say, the evil of European federalism. In actual fact, ironic as it is, it is quite clear from these figures and from the reality of the position that the reverse is true. If in fact these programmes were all run by the European Commission with disbursements under the CAP, the structural funds or the cohesion funds and were the responsibility of European officials, there would not be anything like the same kind of problem. There would be vastly less fraud. The problem is that the national states are disbursing this money, and it is in the national states that the losses, fraud and corruption occur, in some nation states much more spectacularly than in others. I shall come on to that in a moment.

In a way, the reality is not evidence of an excess of federalism in the European Union but an argument for an insufficient degree of federalism in the European Union. I do not suggest for a moment that it is practical to have all the community budget disbursed by an enlarged Commission. In the United States, a lot of federal programmes are actually run by the individual states, and they are responsible for making disbursements under those programmes. Nevertheless, that is a very important and authoritative corrective to the prevailing and utterly false impression given in this country quite cynically by the media purveying a picture that is the exact obverse of the truth.

The third salient point that emerges very strikingly from this report is that there have been quite serious impediments in some of the member states in following up on allegations of fraud or prima facie evidence of fraud that have been brought to their attention by OLAF. I refer noble Lords to the very interesting Table 1 on Page 29 of the report. It is headed,

“OLAF referrals to Member States”.

The left-hand column shows the number of referrals by OLAF of prima facie evidence of fraud. All the columns are interesting but for the sake of brevity I switch right away to the far right-hand column which shows the level of convictions. Noble Lords will see that for all 27 member states—there were 27 at that time—there were 199 convictions out of 1,030 referrals. I calculate that as being roughly 18%. That is the average. One sees immediately that the United Kingdom is slightly below that. I calculate that figure as being about 15%; so in this country we are not quite as good as the average. The worst performers are Italy, Poland and Greece, which all have a record of about 6% or 7% of convictions in relation to the number of referrals. Far and away the star performer is Germany, with almost 40% of referrals resulting in convictions.

OLAF is a single organisation involving people who will be working on different cases involving different fraud allegations in different parts of the Union at any one time, so one can assume that their standard of performance and the solidity of the cases that they make will be the same irrespective of the member state where the fraud happens to have occurred. That means that there is an enormous discrepancy in the extent to which these allegations of fraud are followed up. That is a very serious matter for EU taxpayers as a whole. The question is: what do we do about it?

The report does not avoid the question of what we do about it and the inquiry took a lot of evidence on that subject. For example, I refer noble Lords to the testimony given to the committee and quoted on pages 34 and 35. Paragraph 97 states:

“The Director-General of OLAF”—

that is one perspective, but a very important one—

“gave us a vivid account…of the multi-jurisdictional problems confronting OLAF on a routine basis. He argued that such multi-jurisdictional crimes against the EU’s budget are ‘European by nature, because you cannot say it is specific to this nation or that one’. He was clear”—

this is my emphasis—

“that the solution to this problem is an EPPO”—

in other words, a European Public Prosecutors Office.

“Most of the witnesses agreed … Rosalind Wright QC”—

she is, of course, a former director of the Serious Fraud Office—

“offered two reasons in favour of an EPPO; first, the current unwillingness of the Member States to prosecute these crimes … and, second, the fact that ‘most of these very large frauds are committed across national boundaries’. Drawing on her time at the Serious Fraud Office, she explained that in such cases it had been hard to bring everyone together under one jurisdiction and that an EPPO would help”.

The committee itself, which is an all-party organisation and has always to express itself with great reserve and care—I understand these things because I sit on another sub-committee of this House—is absolutely clear, using parliamentary language. It said that,

“it is unfortunate that the Government have ruled out participation without first having had the opportunity of considering the details of any proposal and without knowing what form an EPPO would take”.

It is quite obvious what is going on here: the Government are not taking into account the national interest. They are not making, or even attempting to make, an objective analysis of where the national interest lies in this matter and what the right solution to those serious problems should be. They are not doing that and should be. It is what they are paid to do and it is what we expect a Government to do in a democratic country but they are not doing it. They are excluding the obvious, pragmatic solution, a priori, without waiting for the details and on the basis of what one can only describe as prejudice or ideology. That is simply not good enough.

Now, I am very familiar with this Eurosceptic prejudice—it is nothing more than that: a refusal to look pragmatically and open-mindedly at issues involving anything to do with the European Union. That is very pervasive in the Tory party and was one reason why, seven or eight years ago, I left the party. We have before us now a Minister who is a Liberal Democrat. I did not think such prejudice was pervasive in the Liberal Democrat Party and look forward with great interest and expectation to see how he will defend the actions, or deliberate inaction, of this Government in a case where an important national interest is being explicitly and deliberately neglected.

17:47

[The Earl of Sandwich (CB)]

My Lords, I follow the noble Lord, Lord Davies, in much of what he said. As a former member of sub-committee E, I thank the noble Lord, Lord Stoneham, for his introduction of the report and our chairman, the noble Lord, Lord Bowness, for all that he did. I also thank our senior legal adviser Mike Thomas, ably supported by Messrs Ridout, Mitchell and others. Mr Thomas’s outstanding work on this made the evidence much more intelligible and our conclusions more fit for purpose. We wish him well in his retirement next year.

As the noble Lord, Lord Davies, said, the subject of fraud in the European Union is enough to get everyone excited, not only the Eurosceptics but also those who consider the UK to be free of blame and squeaky clean. The fact is that fraud exists everywhere: not just abroad but in this Palace, in the City and in businesses all over the country. Noble Lords will remember that one of the biggest frauds occurred in the al-Yamamah contract. After that was investigated by the SFO and discussed at length in Parliament, it was abruptly hushed up by the then Attorney-General in the public interest. Of course, that was all about a princely sum, even for a prince, and it was assumed by most people that it was the way things worked in Saudi Arabia. But no: the SFO calmly and correctly reminded us that there are two parties to every contract who shared responsibility equally. That is worth mentioning in this case.

This country is in no position to complain about the European Union or other EU states. In fact, if our consultants wish to teach anti-corruption measures to developing countries, as they do daily around the world, they may be qualified to do so but they cannot expect countries such as Kenya and Afghanistan to look up to us as angels of accountability. We may be higher in the transparency index but we are all in the mud together. The Commission protests that fraud in the EU is no worse than fraud in the member states and it is right that there always seems to be a presumption of member state innocence. The EU institutions usually get blamed for the failure to prosecute when in fact it is more likely to be the individual country concerned. As our report states, responsibility for avoiding fraud does not rest solely with the Commission. The treaties require both the EU institutions and the member states to counter fraud affecting the financial interests of the EU.

There are, of course, recent examples of general fraud in both the EU and national Parliaments, and the issue can lead to strong emotions. In some cases, it can come to blows; last June, an Italian MEP called Raffaele Baldassarre was caught red-handed on YouTube entering a lift in the European Parliament. He proceeded, on camera, to box the Dutch journalist who was accusing him of fraud. Astonishingly, in southern Europe, the public do not always notice when their representatives are accused of fraud. There was another case, which I shall not go into, of a Maltese MEP who faced criminal charges for alleged fraud over three years. This was uncovered by the anti-fraud office, OLAF.

That brings me to one of our main recommendations, that while OLAF itself needs to improve its act and protests that it is already doing so, member states must give more support to OLAF, including taking the decision to prosecute. We were told that, in principle, to investigate a case of fraud against the EU budget, OLAF is supposed to request information from the judiciary in the member state involved. As the noble Lord, Lord Davies, said, one of our key witnesses, Rosalind Wright QC, said that judiciaries in member states are,

“in some cases … reluctant to investigate their own nationals for a fraud on a subsidy that is being paid centrally from Brussels”.

We heard from Professor Spencer and others that, even after an investigation, OLAF has no powers to compel member states to act. Some call it toothless—but that is just the point. It was a conscious decision of the member states not to give it those powers. Because of this, at €404 million in 2011, the total amount of fraud is being wholly underestimated by the Commission.

The Government’s response throws doubt on the estimates of €5 billion, although they are derived from National Fraud Authority figures. As the noble Lord, Lord Stoneham, said, in explaining the difficulty of estimating the amount, the Government say that the Commission’s database is constantly being updated and that it makes no distinction between “suspected and established fraud”. Irregularities are sometimes included and sometimes not. Again, if we and other member states are reluctant to investigate, we are never going to find out how serious the problem is; we are just going round in circles.

Communications with OLAF have been inadequate, to say the least, and what we call a lack of enthusiasm all round for reporting fraud is, to me, the most serious issue. A related problem for OLAF is that there is no single point of contact in the UK Government and very likely not in other Governments either. The Commission’s response agrees with our analysis, saying that member states have a continuing duty to provide the information. The Commission refers to the recent tightening of the system through new investigative procedures, mentioning a new regulation establishing a clearer legal framework. Her Majesty’s Government’s comment is that “progress is being made”. We shall hear in a minute what that means.

The Commission invests rather a lot of hope in establishing an EPPO, which it conceives as a “decentralised structure” integrated into the national judiciaries. We all hope that that will never happen.

On the question of a UK focal point, the Commission says that there must be a national body designated to co-ordinate what it calls anti-fraud co-ordination services, which will strengthen the co-operation between OLAF and member states. Perhaps the Minister will update us on the likelihood of any such co-ordinated service in the UK, and on any further conversations between the Home Office, the City of London police and others involved.

The Government’s response merely says that there is room for improvement; it quite reasonably rejects the idea of a new department, mentioned by the noble Lord, Lord Bowness, but it seems to me and to him that we are putting off the more fundamental question of co-ordination—unless the Minister proves us wrong.

17:55

[Viscount Eccles (Con)]

My Lords, I go back a long way to 1949 and the Council of Europe. If ever there were a referendum, I cannot imagine voting to come out of the European Union. That does not mean that I cease to think about the problems facing Europe and speculate a bit on how much of a contribution we can make to the solutions to those problems.

I have to record that I was new to the committee when it started this inquiry, and new to the procedures of sub-committees preparing reports, although I had read quite a number of them. As I went into that I thought about the background—the financial crisis, fairly rapid change, the expansion of the membership of the Union and the identification of problems. There is of course a rather large gap between the identification of problems and the practicality of solutions to them. I was also minded to think that many empires have fallen because they were top heavy. Today we know very many things and how to do them; in fact, there is a lot that we know about how we could do them if we had the resources, but we do not. We do not have the money and, more importantly, we do not have the people. The people who are capable of implementing some of the things that we would like to see implemented are spread very thin.

In considering the report, I wondered: where do we, the United Kingdom, rightly come into this picture? The report says with great accuracy that fraud is opaque. As the noble Earl, Lord Sandwich, said, it is also endemic. It does not matter what we are going to do, it will not disappear, because human nature is best seen as a constant. Therefore, the first question that we might ask is: how many programmes do we want? What level of expenditure within those programmes do we want? What complexity do we want those programmes to have? What are we actually trying to do with them? If we had fewer programmes we would have less fraud. The more complex the programmes are, the greater the army of people. I have applied for European money in the past, and the number of people who will advise you on how to knock down that money from the tree is legion. It is a profession—and, of course, those people could be doing something else, perhaps adding more value. So is that the right use of resources? We should think rather more seriously about the objectives we are looking for.

We then come to another danger and another question. Are we right to be judging others by ourselves? Almost certainly not. The Commission, after all, is sui generis, and I join others in saying that there is absolutely no point in being highly critical of the Commission because there is fraud against its programmes. That does not make any sense at all. I completely agree with that. Then we think about the members, their objectives, the reasons why they are members in the first place and their capacity to implement programmes. If they take advice, which they do, there are many imaginative ways of providing that advice. That imagination can extend into how you spend the money, as well as how you get it in the first place.

I cannot get excited about the uncertainty in the figures. My question is: what do you do about the situation? What is the United Kingdom’s contribution to wise implementation of answers to these problems? When there are problems there is always a temptation to design new institutions or seek more legal procedures. However, in my experience, for all the people who claim to have a good plan to do this or that, few could implement such a plan if it were put into place. Therefore, for me, it is important to implement measures within the existing systems. How can we make the existing structures work better? Reference has been made to OLAF and I completely agree that there is a pressing need to co-operate and exchange data. Whether it is sensible to have that channelled into one place, I leave to others to decide. If people are willing to work with and talk to one another, we do not necessarily need just one focal point.

However, of one thing I am certain: that is, in the difficult circumstances that pertain, particularly within the eurozone, we need to work with what we have. I do not see any future in having new centralised institutions. As for the United Kingdom, we should cope better than we do with any fraud that is perpetrated here. We should seek to minimise fraud and prosecute those committing it. As regards cross-border fraud, we should offer others maximum co-operation, but seeking a centralised, European Union-wide silver bullet to solve these problems will not work and we should not contemplate it.

18:01

[Lord Rowlands (Lab)]

My Lords, while I have listened to the debate I have tried to recall the evidence we received and the witnesses we heard. I regret to say that my abiding impression of the evidence we took and the witnesses we heard was that there was a kind of collective buck-passing going on and that no one was willing to accept responsibility. Everybody said that they hated fraud and that it was a serious issue, but you did not sense that dealing with it was a priority for any of the institutions. I do not know whether other members of the committee were left with that impression.

Our report found a lack of enthusiasm, a lack of uniformity of approach and weakness in the ability of OLAF to fulfil its remit. The noble Lord, Lord Bowness, reminded us of the rather extraordinary day when we witnessed a kind of internal warfare going on before our very eyes. I hope to goodness that when the Minister replies to the debate, he will reassure us that OLAF has got over that spat. This lack of co-ordination and enthusiasm are partly reflected in the incredible divergence of assessment in relation to the size of the fraud, which reflects the fact that there is no collective grappling with this problem. Incidentally, there is no lack of activity on this issue. I calculated that no fewer than 13 documents and legislative proposals dealing with various aspects of fraud were presented to our committee. It is not a question of lack of activity on the part of the Commission or anyone else but rather, it seems to me, a lack of effective follow-up, and of matching that activity with effective operational action on the ground across the piece.

There have been suggestions about reforming OLAF and Eurojust, and my noble friend Lord Davies mentioned the EPPO. The committee did not, and has not, endorsed the concept of the EPPO. I am sure that he did not intend to create the impression that it had. It did not endorse that concept in the report and has not undertaken a full inquiry into it. I hope that noble Lords do not have the impression that it has endorsed that concept. That is certainly not the case. Of course since we did our report, the Commission has come forward with a proposal. I am afraid to say that, as it was brought forward, it certainly would not have gained my support in any shape or form; I am not sure about other members of the committee. I shall tell my noble friend why. First, this House, the other House and indeed 11 Parliaments found the Commission’s EPPO proposal offensive to the whole principle of subsidiarity.

It is not only that. I have one other suggestion why the Commission’s proposal is fundamentally flawed, and it is exactly one of the points that my noble friend made. The draft seeks to propose exclusive criminal jurisdiction to one office, seeking to override national needs and priorities. I am afraid that that does not make any sense. As my noble friend rightly points out, 80% of the budget is delivered at national level. It cannot be the exclusive criminal jurisdiction of one new office to deal with the issue, when in fact the disbursement of such money is overwhelmingly conducted at national level. It has to be a shared responsibility with shared co-operation. Indeed, the treaty obliges the Commission and member states to deal with this together. Therefore, rather than looking for a solution in a brand new, single office of the kind my noble friend obviously rather likes, I would look for an alternative form of enforced shared co-operation between institutions, governments and national and European agencies. That is where the future solution to these problems lies.

My final point is that, within those improvements that we should have in co-operation and shared responsibility, and within our own arrangements, is the question of having a single agency or point of contact. Interestingly, over a year ago in the evidence that we received, there was a volunteer: Commissioner Leppard of the City of London Police volunteered to be the first point of contact, as members might recall. Indeed, in his evidence, he said that his force was in discussion with the Home Office to develop the concept of the first point of contact being the City police. That was November 2012. We are a year on. How much progress has been made? Is the proposal still considered significant? How far have we got with it? If we have got very little from it, it will only reflect what we all fear: that there is not a willingness to carry some of the reforms and changes through.

That specific proposal was put on the table just over 12 months ago—one organisation saying, “We will be the only point of contact to co-ordinate activities, including the devolved Administrations”. When the Minister comes to reply I would be grateful if he would tell us how far that proposal has gone. I would judge the success of the changes that have occurred by our doing at least the one thing that we can do ourselves: to decide on one single point at which the co-ordination of these activities takes place. If we do not do that, we will not be seen as combating European fraud.

18:08

[Baroness Morgan of Ely (Lab)]

My Lords, I thank the noble Lord, Lord Stoneham, for his introduction. I also thank the committee for its work not just on this report, but over many decades. The reputation of this committee is second to none. Certainly during my years on the budget control committee in the European Parliament, we used to look forward to giving evidence to your committee because we knew that there would be a thorough investigation, with sophisticated understanding of the complexities of the way in which EU finance works—so I feel privileged to speak in front of you today.

The clamour for change and the screaming headlines against the EU when the Court of Auditors published its annual report were things we learnt to live with on an annual basis. I learned then—this is underlined in the report—that the picture is much more complicated. There needs to be a better understanding than the one those screaming headlines suggested.

We need to be absolutely clear of what we are talking about when we discuss fraud. The Court of Auditors first takes sample payment transactions in the EU at EU level, national level, regional level and even down to individual beneficiary level. Any errors found in these audits are classified as either quantifiable—which means there is a potential impact—or not. The impact rate of the error is then extrapolated to reach a most likely error rate. That then applies to each department, and then to the budget as a whole. It is completely different from the way in which we do things in Britain and that is probably part of the reason for the misunderstanding.

We should be clear that those error rates cannot simply be translated into an amount lost. Let me give an example. If you have a tender process to build a road and someone completed the forms in a way which did not comply with all the rules, that does not mean that the road was not built or that you did not get value for money; it means that the forms were not completed in the correct way. That would be counted as a problem; it would be put into the figures as problematic.

As the noble Lord, Lord Stoneham, reminded us, 80% of finance is controlled by member states. In fact, the money never leaves Britain. It does not go to the EU and come back; it never leaves Britain. Therefore it is expected that member states should put systems in place to protect the EU’s financial interests.

It is also worth noting that the Court of Auditors has signed off the EU account for the sixth year in succession. It has given a clean bill of health to the Commission’s accounting books. That means that every euro spent from the EU budget was duly recorded in the books and properly accounted for. However, for payments the court requires an error rate of less than 2% before the EU budget can be declared to be free from material error. At the moment the error rate is below 5% but, as it is not close enough to that 2%, it will not sign off the payments account.

Turning to the subject of the report, deliberate fraud is different from errors. It constitutes a criminal action and has to be dealt with severely. The question being asked in the report is whether the systems and mechanisms that are in place are adequate to measure fraud and defend the EU against it. Is the UK taking up that responsibility and policing this area seriously?

The recommendations made in the report seem eminently sensible. The proposals to establish a government agency or department to take overall responsibility and for OLAF, the anti-fraud unit of the EU, to have one point of contact make sense. OLAF did not exist when I was in the European Parliament but was set up while I was there. I can assure noble Lords that there was a great deal of in-fighting when it was set up, but I hope things have settled down since then.

It makes sense to have one point of contact. I was a member of the budget control committee in 1999 when the Commission was forced to resign in response to the failure to take seriously the matter of fraud against the EU budget. The subsequent report written by the wise men suggested that it was impossible to find anyone, at any level, in the Commission to take responsibility. That phrase stood out to everyone. My concern is that having sat in the European Parliament for 10 or 15 years considering this issue and hearing that it is up to the member states to do something about it, I do not want to come back to the UK and hear, “It is not our problem. It is a difficulty for the EU. We all have to work together”.

This falling between two stools is the problem here. It is a fate that we must avoid in the UK. Knowing who is responsible for collecting and collating information and where the buck stops is fundamental to good governance. I take issue with the suggestion that the multiple jurisdictions of the UK provide a block to this. We manage to organise this for every other aspect of the EU’s relationship with the UK, so why not in the area of fraud?

Of course, the amount of fraud is by its nature difficult to quantify, so the Commission’s figures are only estimates, but it seems that there is a lack of enthusiasm to engage with the detection and reporting of fraud against the EU. This is underlined by the fact that the Commission has reported a very low number of irregularities as fraudulent in the UK, which has a relatively high EU spending rate compared with other member states, suggesting a degree of non-compliance with reporting principles. Will the Minister therefore explain what control systems and mechanisms are being put in place to detect fraud, in particular in the higher risk areas?

It was extremely disappointing that the Government did not answer the issue of VAT fraud against the EU budget seriously. Of course, a larger proportion of VAT goes to member states, but the contribution to the EU’s budget is fundamental. The figure of £2 billion that was suggested by the noble Lord, Lord Bowness, is fundamental to the revenue stream of the EU. Carousel fraud is not insignificant. While nobody is suggesting that the EU should extend its competence into tax enforcement, it is entirely legitimate for the Commission to question member states on their pursuit of this fraud which has a material effect on the Commission’s budget.

The prosecution of fraud remains a national matter, and while the UK does not want to sign up to the European Public Prosecutor’s Office, I question whether we take our responsibilities seriously in terms of prosecuting fraud against the EU budget. I remember on several occasions hearing how OLAF investigations were passed on to member states but were not pursued with any vigour in the member state. We heard evidence from some very senior British police enforcement representatives who suggested that although they understood their responsibilities, they had an inbox full of domestic crimes and targets on specific crimes that they had to meet so, somehow or other, EU fraud cases always seemed to find their way to the bottom of the in-tray. What is the Government’s target for prosecution? We have heard that 18% are prosecuted. What is the target? That seems to be a way to get this to the top of the in-tray of those police enforcement agencies.

Finally, will the Minister outline the timetable for the proposed fraud directive, and explain how he intends to use the expertise of the European committee in the Lords for those deliberations?

18:18

[Lord Newby (LD)]

My Lords, I am extremely grateful to my noble friend Lord Stoneham for his introduction to this report, to all noble Lords who have spoken and to the committee itself for the detailed report into the fight against fraud on the EU’s finances.

It may be blindingly obvious, but I start by saying that the Government also take fraud and the management of taxpayers’ funds very seriously. We have adopted an increasingly robust stance on financial management, and we remain committed to securing and enforcing the most effective means of fighting fraud at both a national and EU level. Fraud against the EU budget remains a matter of great concern, and this Government have adopted a leading role in calling for improvements to the way EU finances are managed.

I remind noble Lords that we are the first Government to take a firm stance on fraud against the EU budget by voting against the Council’s decision to recommend discharging the Commission of its responsibility to manage the EU budget. We took a stand by abstaining on the Council position on discharge of the 2009 EU budget and increased the pressure by voting against the Council’s recommendation to discharge in 2010 and 2011. We have also continued to encourage like-minded, budget disciplinarian member states to join us in sending the strongest possible message that financial management needs to be improved. In 2010 and 2011, Sweden and the Netherlands joined the UK in voting against the Council’s discharge recommendations and issued a joint statement calling for improvements to the way EU funds are managed.

We have also been at the forefront of the drive for real changes to improve errors within EU budget expenditure. For example, in the light of the European Court of Auditors’ reports confirming that much of the expenditure error is due to excessively complex rules, the Government successfully worked with allies to push for the significant simplification of the complex rules for beneficiaries of EU funds. I note what the noble Lord, Lord Bowness, said about it being disappointing that the Court of Auditors has been unable to provide a positive statement of assurance for the most recent budget, as has been the case for a number of years. The noble Baroness, Lady Morgan of Ely, explained why it is quite difficult to get to the necessary level of assurance. As the noble Lord reminded us, and as I have, over the years, reminded Eurosceptics within your Lordships’ House, it is a very long time since the DWP budget received a similar assurance statement.

When the Government replied to the report in July, the Financial Secretary gave a detailed response to all the findings. While that response still reflects the Government’s overall position, I will seek to respond to some of the additional requests for clarification made by noble Lords.

A number of noble Lords raised concern over the estimated level of fraud against the EU budget. The Government appreciate that the Commission’s assessment of the amount of fraud against the EU budget is an estimate and cannot give a full picture, by which I mean that the real level of fraud is necessarily going to be higher than the figure that it has produced. In order to get more nearly to a figure, it is therefore important to ensure that the quality and consistency of reporting by all member states is of a standard that allows the Commission to receive accurate information upon which to base its estimate.

It is also important that other contributing factors, such as the constant updating of the database, are resolved to improve the data that the Commission receives and holds. The noble Baroness, Lady Morgan of Ely, explained some of the complexity of the process, and although it is very easy to damn it on the basis that it should be possible to sort this out, in practice it is extremely difficult in a 27-member Union to get the kind of consistency and quality of reporting that gives us absolute confidence that the final correct figure has been reached. As the recipient of reporting information from member states, the Government believe that the Commission is best placed to provide such a clear estimate, but more work needs to be done.

I am sorry that the committee finds the Government’s decision not to recognise its estimate of actual fraud disappointing, but we maintain the view expressed by the Financial Secretary in his substantive response. I have a lot of sympathy with the noble Viscount, Lord Eccles, who said that we should not get excited about the absolute estimate of fraud but should worry much more substantively about bearing down on it.

With that that in mind, I turn to our reporting of fraud against the budget. The Government remain committed to this work and do not accept the view that we are lacking in enthusiasm or drive in our approach to tackling such fraud. In line with existing reporting obligations, the Government rigorously collate comprehensive data on fraud and consistently report them to the Commission.

As identified in the committee’s report, the UK does not have a central department or agency responsible for the fight against fraud. Individual departments and agencies are responsible for monitoring and acting on fraud against the EU funds they receive and spend. This does not demonstrate a lack of commitment or dedicated resource but reflects the UK’s national arrangements for handling EU funds. When one is talking about funds being spent by Administrations in Northern Ireland and Scotland, it is natural for them to be contacting the EU directly with information. Furthermore, the Government have a new approach to fraud because the creation of the National Crime Agency has given us the opportunity to pull expertise in anti-fraud work into a dedicated Economic Crime Command. The ECC will work closely with national police forces and partners, as well as with the EU and international equivalents. However, the Government remain of the view that the Commission, as the recipient and collator of fraud statistics, is best placed to provide a breakdown of fraud at an EU level and within individual member states. I shall come back to the question of the single point of contact.

A number of noble Lords raised the issue of VAT fraud, which has been and remains a significant problem. It is, however, worth pointing out that since 2005-06 NTIC fraud estimates have decreased from between £3 billion and £4 billion to around £1 billion in 2011-12, which demonstrates that effort has been put in to tackle this very serious, arguably the single biggest, area of EU fraud that affects the UK. We have had a significant positive impact.

We take seriously all forms of fraud, which is why in the 2010 spending review HMRC was allocated an additional £917 million to help it recover unpaid tax and excise duties in the next four years, of which some £90 million is being spent on tackling organised criminal attacks, and we have had some significant successes. Further, the number of criminal prosecutions across a range of taxes, including VAT, is to be increased fivefold. I am not sure that that is quite the target that the noble Baroness was looking for, but it is an indication of the Government’s ambition in this area. However, it is clear that VAT fraud is not solely a concern for the UK and, noting the committee’s concern and points raised by noble Lords, I can confirm that we encourage other member states to maintain the pressure to reduce VAT fraud within their jurisdictions with the same enthusiasm and vigour that we employ.

I turn to our engagement with the European anti-fraud office, OLAF. It is clear that its success relies on effective co-operation with partners in member states, third countries, international organisations and EU institutions. The Government fully cooperate with OLAF’s work in the UK. Its efforts to detect and tackle fraud, including through seeking financial redress for the EU budget where possible, is highly important to us. The UK, through the National Crime Agency, provides a number of UK-wide liaison services and is taking steps to improve our engagement with Europol, Eurojust and OLAF. This includes, through the NCA, providing bureau services to Europol and Interpol and being home to the UK Financial Intelligence Unit. It does this through the Europol national unit, which is based in the UK International Crime Bureau of the NCA and is supported by the UK national unit based in The Hague. The ENU provides a channel for all UK law enforcement engagement with Europol. The Government believe that the NCA’s work with these agencies and services, including Eurojust, Europol and OLAF, will strengthen co-operation with our European and international partners to fight cross-border fraud.

I return to the question that many noble Lords raised about our response to the requirement to provide a single point of contact. This is, as noble Lords mentioned, something that has been under discussion for some time. City of London Police has indeed offered to be such a contact point and continues to be in discussion with the Home Office. As noble Lords will be aware, the Home Office works in an extremely deliberative way and I hope that we will have a decision on this as soon as possible.

[Lord Rowlands]

I apologise for interrupting the Minister. What is “as soon as possible”, given that we have already had a 12-month pause?

[Lord Newby]

My Lords, it is a slightly flexible definition. The best I can do is draw to the Home Office’s attention the strength of feeling that clearly exists in your Lordships’ House that this decision should now be taken quickly.

Moving on to the European Public Prosecutor’s Office, the Government accept that multijurisdictional crime against the EU budget is European in nature but believe, as noble Lords pointed out, that an EPPO is not the only or the right solution to the problem. The noble Lord, Lord Rowlands, gave some of the arguments for that, but I repeat our view: a centralised European prosecutor with harmonised powers to initiate investigations and order investigative measures is incompatible with the division of responsibilities in many EU countries where law enforcement and prosecutors have different roles from that of the independent judiciary. As such, it would require fundamental changes to those member states’ legal systems and existing operational structures to implement the Commission’s vision of a supranational body with powers of investigation or prosecution within UK jurisdiction.

The Committee asked how the UK would address the shortcomings in existing processes for tackling fraud in the absence of being a participating member of the EPPO. The Government will continue to focus on preventing and tackling fraud against the budget and draw on their new approach to policing fraud. On the response to identified crimes, the Serious Fraud Office uses a similar model to the EPPO by bringing prosecutors and police together to fight serious fraud but there are differences. There are limits to the SFO’s statutory investigative powers but the existence of the SFO at national level is evidence of a domestic model that is similar to the EPPO proposal. Further, the creation of the National Crime Agency’s Economic Crime Command means that we have an opportunity to pull expertise in anti-fraud work into a dedicated policing unit. The ECC will work closely with national police forces and partners as well as the EU and international equivalents.

[Lord Davies of Stamford]

I am grateful to the Minister for giving way. If, as on the Minister’s own admission, the Serious Fraud Office and the ECC have structures that are very similar to the proposed EPPO in that they combine investigative and prosecuting functions, what is the ideological objection to accepting the EPPO? It appears that we have already accepted that those two functions should be shared by the same agency. The Minister will know that there is no suggestion that the courts—the judicial function—should be combined with the EPPO. The EPPO having decided to prosecute would have to do so in front of judges who would be quite independent from it.

[Lord Newby]

As I said, among other things there are differences between the SFO’s investigative powers and the EPPO proposal’s powers. As I should have said, it was a component of the coalition agreement that the UK would not support our involvement with such an organisation. That remains our view.

[Lord Davies of Stamford]

I am grateful for what is clearly a very honest and frank statement by the Minister. That gets to the heart of it. His previous remark left the impression that he was desperately trawling around to find some minor detail of difference between the structure of the SFO and the proposed EPPO to justify a decision that cannot be justified on pragmatic grounds. As he said, it is essentially a political decision. The Committee, the House and the public will be grateful for his frankness.

[Lord Newby]

My Lords, I think that the noble Lord is slightly confused about the difference between a political decision and a sensible decision. Just because something is in a political agreement does not mean that there are not very serious substantive reasons for it, apart from any reasons that he would disapprove of. I am sure that that is the case in this particular example.

There were two final things that I wanted to pick up on. The noble Lord, Lord Bowness, asked about the relationship between OLAF and the Supervisory Committee and what could be done and might be happening. This is an extremely unfortunate dispute that has arisen, and there is a limited amount that the UK Government can do on their own to resolve it. We accept that the Supervisory Committee has an important role but, equally, it is important that it does not operate in such a way as to impede OLAF’s work. We are trying as best we can not to knock heads together—that is perhaps too strong—but to use what influence we have to get these two bodies to work together. It is extremely depressing to read that part of the committee’s report and evidence because it is the kind of thing that legitimately gets the EU and its ways a bad name.

The final issue that I want to address, which the noble Baroness raised, is on how we would engage with committees on the PIF directive. This has raised difficult issues for the UK, and Ministers across government have been considering how best to approach the proposal. Discussions within government are now reaching their final stages, and we hope to be in a position to offer the relevant scrutiny committees a fuller explanation shortly. At the same time, we will seek to address the concerns about the opt-in trigger point.

This has been an extremely useful debate on an extremely important issue. I hope that I have been able to explain how the Government are tackling it. I realise that I will not have satisfied noble Lords in every respect, but I will speak sternly on noble Lords’ behalf to colleagues in the Home Office so that we might make progress at least in that respect.

Finally, I thank the committee for its work and for holding the Government to account in this area of our work.

18:37

[Lord Stoneham of Droxford]

I thank my noble friend for his response and everybody who has spoken in this debate. I have already thanked, but would like to do so again, the noble Lord, Lord Bowness, for his leadership of this group. I would also like to mention Tim Mitchell, as well as Mike Thomas, and thank them for their support during this investigation.

We had a number of speeches from members of the committee, and I appreciate their support and also that of the noble Lord, Lord Davies. It was good to hear a pro-European being so pointed in his comments, both on our report and on the Government’s approach.

On the Government’s response, I understand that my noble friend was in great difficulty in going further than the response that we have already had, but those of us who were listening carefully appreciated a number of his comments. He said that more work needs to be done on estimating the level of fraud, and the committee will certainly welcome that. He talked about the new approach with the National Crime Agency; that is something that we will want to look at, particularly with its additional emphasis in setting up a special group on economic crime. I am not sure that we got quite the single-source co-ordination that we were looking for, but we appreciate the efforts that the Government and Treasury are making on tax fraud in general and his reassurances on the work being done on VAT.

I accept that it is very difficult to give a perspective on OLAF, but my noble friend said that the National Crime Agency would strengthen relationships with OLAF and Eurojust, which we welcome.

I am sure that we wish to emphasise and support the strength of feeling that my noble friend will communicate to the Home Office, via the strong arm—we hope—of the Treasury, in relation to what needs to be done regarding the single point of contact. We look forward to the Government developing their alternative to the European Public Prosecutor’s Office proposal. I thank all Members of the Committee for their support in what has been a very interesting debate.

Motion agreed.

Committee adjourned at 6.40 pm.

House of Lords

Wednesday 11th December 2013 Lords Chamber

Wednesday, 11 December 2013.

15:00

Prayers—read by the Lord Bishop of Truro.

Northern Ireland: Royal Residence

Wednesday 11th December 2013 Lords Chamber

Question

15:07

Asked by

[Lord Lexden]

To ask Her Majesty’s Government what arrangements are being made to establish a permanent Royal Residence in Northern Ireland.

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)]

My Lords, in Northern Ireland Hillsborough Castle is the official residence of Her Majesty the Queen and has been the sovereign’s residence since 1922. The castle is also the residence of the Secretary of State and of the Minister for Northern Ireland. Current proposals are to pass the operation of Hillsborough Castle to Historic Royal Palaces and significantly to increase public access. However, full royal and ceremonial use will continue unchanged.

[Lord Lexden (Con)]

My Lords, I thank the Minister for telling the House about the important decision to place Hillsborough in the guardianship of the Historic Royal Palaces trust. Does not the existence of a permanent royal residence both symbolise and underline the enduring commitment of the Royal Family to all sections of the community in this part of our country—a commitment perhaps best expressed by the late Queen Elizabeth the Queen Mother, who once told my noble friend Lord Molyneaux that each night she included in her prayers, “God Bless Ulster”? Does my noble friend also agree that it is most fitting that the decision should come in the year that His Royal Highness the Prince of Wales celebrated his 65th birthday, for the cross-community work of his many charitable organisations contributes significantly to progress in Northern Ireland today?

[Baroness Randerson]

My Lords, I agree with the noble Lord that the Royal Family is to be commended for its loyalty and for the work that it has done with Northern Ireland. We all remember the significance almost two years ago of the Queen’s handshake. The existence of Hillsborough Castle as a royal residence is guaranteed under the new arrangements, and full facilities for royal access will be there. It will be easy for members of the Royal Family to use the castle when they wish for their royal duties in Northern Ireland.

[Lord Alderdice (LD)]

My Lords, does my noble friend accept that, given the extraordinary—indeed, transformational—effect of Her Majesty’s visit to the Republic of Ireland, and the fact that Hillsborough Castle is not only a royal residence but a place of enormous political significance on the island of Ireland because of the signing of the Anglo-Irish agreement and the importance of other negotiations, there is a real possibility of tourist potential not just from within Northern Ireland and the rest of the United Kingdom, but that many people south of the border will be keen to come to Hillsborough Castle for its associations with Her Majesty and the Royal Family, as well as the important political associations that it also has?

[Baroness Randerson]

My Lords, the intention is that the new arrangements will make it easier to attract both domestic and foreign tourists to visit Hillsborough Castle. It is important to remember that as well as being a beautiful castle—a beautiful building with beautiful grounds—it has tremendous historic significance. It is important to remember that royal tourism alone is estimated to be worth £500 million a year to the United Kingdom. Therefore, it is important that we open up the castle as much as possible—and considerably more than has been possible in the past.

[Lord Empey (UUP)]

My Lords, in welcoming the Minister’s reply, I will ask her two questions. First, Hillsborough Castle is owned by the Northern Ireland Office. When is it anticipated that it will be transferred to the Historic Royal Palaces trust, and will any additional trustees, including a trustee from Northern Ireland, be added to the trust board?

[Baroness Randerson]

There will be no change to the ownership of Hillsborough Castle. An agreement will be signed with Historic Royal Palaces. It is anticipated, following negotiations, that it will be signed next April, but there will be a transition period of two to three years before the full handover to the new arrangements is complete. On the question of trustees, a Northern Ireland group already exists in relation to Hillsborough Castle. It is intended that this should be refreshed and set up anew under the new arrangements. It will have a strong representation from Northern Ireland, as well as trustees appointed by Her Majesty the Queen.

[Lord Hamilton of Epsom (Con)]

Does my noble friend accept that if Scotland votes for independence, the future of Balmoral must be called into question? Would that situation not make it even more important that there is a royal residence in Northern Ireland?

[Baroness Randerson]

My Lords, along with many of your Lordships, I am concentrating on supporting the Better Together campaign. I am not making plans, and neither are my noble friends, for any future situation in Balmoral.

[Lord Bew (CB)]

My Lords, does the Minister accept that the fact that she is able to make this announcement today reverses the great historic error of the 19th century in not having a royal residence in Ireland, and that it can only be done because of the stability brought to Northern Ireland’s constitutional status as a result of the Good Friday agreement of 1998?

[Baroness Randerson]

Hillsborough has been in its current situation since about 1922, I believe, but the noble Lord makes a very good point. It is the stability of the political situation that has made it possible for the Northern Ireland Office to consider new arrangements for the management of Hillsborough Castle, and to ensure at the same time that security levels are maintained. That will be possible under the new arrangements because of the security and political situation.

[Lord Dannatt (CB)]

My Lords, I declare an interest as a trustee of Historic Royal Palaces. Will the Minister confirm that there has been very widespread consultation both within Northern Ireland and in Ireland itself, and that the experience of Historic Royal Palaces in running five additional palaces in the United Kingdom gives the charity great experience? I hope that the Minister will also agree that we can have every confidence that this will be a successful and prominent move for the future that will make the castle more available to all people, both tourists and local residents.

[Baroness Randerson]

I am delighted to confirm that the Northern Ireland Office sought a secure and prosperous future for Hillsborough, and one that would enable it to be opened up to the public. Historic Royal Palaces was the obvious choice, because as an organisation it does not depend on public money and it has a very well established position through the five palaces it already runs. Indeed, it is the case that the Royal Family has already signed an agreement with Historic Royal Palaces about the future use of Hillsborough Castle.

Schools Careers Service: Apprenticeships

Wednesday 11th December 2013 Lords Chamber

Question

15:15

Asked by

[Baroness Bakewell]

To ask Her Majesty’s Government what steps they are taking to ensure that career services in schools make pupils fully aware of apprenticeship opportunities open to them.

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, schools are legally required to secure independent careers guidance for 12 to 18 year-olds, and that includes information on all education and training options, including apprenticeships. We will publish revised statutory guidance to help schools deliver better support to pupils, including about apprenticeships. Young people are most likely to be influenced by hearing directly from employers and apprentices. We will be strengthening the importance of partnerships between schools and businesses via the National Careers Service. Ofsted is ensuring that careers guidance and pupil destinations will be given greater priority in inspections.

[Baroness Bakewell (Lab)]

My Lords, I thank the noble Lord for that Answer, but given that the House of Commons Business, Innovation and Skills Committee report of 2012-13 found that,

“awareness and resources in schools and colleges remains lacking”,

expressed disappointment with the National Apprenticeship Service and recommended that the NAS should be given statutory responsibility for raising awareness of apprenticeships, can he explain how far these recommendations have been carried out?

[Lord Nash]

The National Apprenticeship Service funds the Education and Employers Taskforce, which is a programme to deliver knowledge about apprenticeships to schools. We also had 70 advisers from the National Careers Service and Jobcentre Plus stationed at the Skills Show in November. The National Careers Service and the National Apprenticeship Service ran a jobs bus road show, and we are pursuing a number of other measures in this area.

[Baroness O'Cathain (Con)]

My Lords, is my noble friend aware of the huge amount of work going on in the area of apprenticeships? Sub-Committee B of the European Union Committee is taking evidence on youth unemployment at the moment, and the great finding is that many large companies are actively getting involved in apprenticeships for the first time in many years. We have heard about some outstanding examples of this, and when our report comes out I think that he might be surprised.

[Lord Nash]

I am grateful for my noble friend’s comment. Our priority is to expand apprenticeships, particularly where they deliver the greatest benefits to young people, are of high quality, last longer and are more rigorous. Of course, since this Government came into power, we have delivered 1.5 million new apprenticeships.

[Lord Young of Norwood Green (Lab)]

My Lords, is the noble Lord aware that, when I speak to young people in a wide variety of secondary schools as part of the House of Lords outreach scheme, there is little or no knowledge of 16-to-18 apprenticeships, and that schools are focused on sixth form recruitment? What action are the Government taking to ensure that all secondary schools offer impartial guidance, have links with local businesses, and invite young apprentices to speak to pupils?

[Lord Nash]

I agree entirely with the noble Lord that links between schools and businesses are key. Schools can no longer feel that they need just to teach; they have to open their doors to businesses, and businesses have to engage with them. In my travels around the country, I have not found any difficulty with businesses wanting to engage with schools; it is usually a question of putting in place the structures. The organisation Business in the Community has a marvellous programme called Business Class which is providing careers advice, mentoring and workplace experience to 300 groups of schools. There is the Glass Academy in Sheffield and a number of other such models. However, we need to widen these efforts, and I know that the Social Mobility and Child Poverty Commission made some excellent recommendations in this area a couple of months ago.

[Baroness Howe of Idlicote (CB)]

My Lords, will the Minister confirm the steps that I am sure the Government must be taking to ensure that as many girls as boys are aware of these apprenticeship schemes, particularly in engineering, where there are certainly very many more young boys than young girls taking up these apprenticeships at the moment?

[Lord Nash]

I entirely agree with the noble Baroness. It is very important that we get a higher participation rate of girls in STEM subjects. We are funding the Stimulating Physics Network and the Further Maths Support Programme to increase the take-up of A-level physics. The STEM Ambassadors programme gives careers advice on more technical qualifications and apprenticeships. However, as my colleague Liz Truss said recently, it is excellent teaching and a culture of equal aspirations for all that will help engage more girls, so all we are doing to improve the quality of teaching helps in this regard.

[Lord Addington (LD)]

My Lords, can my noble friend assure me that a teacher or careers adviser will be able to advise a dyslexic pupil in a one-to-one interview that he or she can now access, or will soon be able to access, the apprenticeship system, as the barriers to dyslexics getting through the functional skills test in English and maths will be removed?

[Lord Nash]

My noble friend speaks with great passion and personal experience on this subject; I have heard him do so many times, and we have already met on this subject. The Government are aware of the technical issues with assisted technology in the English and maths assessments. We are meeting the British Dyslexia Association, Ofqual and the Dyslexia Trust to try to ensure that we send a very clear message to all involved, providers and examiners, that there is the ability to use screen readers, in the case of dyslexia, as well as other assistive technology. I think that my noble friend knows that he has my personal commitment —if he does not know, I give it to him now—that we will do as much as we can to sort this out.

[Baroness Wall of New Barnet (Lab)]

My Lords, in response to my noble friend’s earlier question, the Minister said that it was really down to employers to do more work. Is he aware that employers try very hard to be in touch with schools, but that there is an issue around head teachers, in particular, encouraging that? As my noble friend Lord Young said, rather than aiming primarily for academic qualifications, this country needs very good apprentices; we need women apprentices, as the noble Baroness, Lady Howe, said, but we also need people to get engaged with apprenticeships and be encouraged to do so. That is not evident.

[Lord Nash]

I am sorry to hear the noble Baroness make that comment. I think that it is a two-way street. We need schools willingly to engage with all walks of business for all apprenticeships, but I still hear shocking stories about schools being reluctant to send their pupils on them and heads being too focused inwardly. They cannot give their children a good education unless they give them a direct line of sight. I have been so impressed talking to young people about how the experience of going to the workplace and meeting people in work has raised their aspirations. From this they have managed to reverse-engineer backwards what they need to do to achieve this themselves.

Payday Loans

Wednesday 11th December 2013 Lords Chamber

Question

15:23

Asked by

[Lord Selsdon]

To ask Her Majesty’s Government what steps they are taking to regulate the issue of payday loans to those without a regular income.

[Lord Newby (LD)]

My Lords, the Government have made it clear that payday lenders should make loans only to those who can afford to pay them back. From April 2014, the Financial Conduct Authority will require lenders to undertake thorough affordability assessments to ensure that borrowers are able to make sustainable repayments. No later than January 2015, the FCA will cap the cost of payday loans so that borrowers in financial difficulty do not face spiralling debt.

[Lord Selsdon (Con)]

My Lords, I am most grateful to the Minister for his reply, but he has not actually given me the answer I needed because my skills at mathematical calculations are not great at the moment. If my noble friend wanted, for example, to take out a payday loan for £1,000 to cover him over the Recess, what would the rate of interest and repayment be over a matter of a few weeks?

[Lord Newby]

Almost certainly too high, my Lords.

[Lord Mitchell (Lab)]

My Lords, in 2008, 12 million people viewed advertisements for payday lending companies. Last year, the total was 7.5 billion. Do the Government feel that the time has come for us to ban advertising for payday lending on television, particularly when it is directed at children?

[Lord Newby]

My Lords, the Advertising Standards Authority has been looking at a rising number of complaints about payday loan advertising on television. It has the power to ban misleading ads and already has done so in respect of ads placed, for example, by Cash Lady and FirstPayDayLoanUK. From April next year, the FCA will have the power to ban misleading financial promotions. It will be able to look at advertising and the whole way in which payday loans are promoted under that new power.

[Lord Martin of Springburn (CB)]

My Lords, there is deep concern in the social and community-based housing movement because the payday loan operators get access to people’s personal accounts to take the direct debit. The danger is that when people receive a rollover loan, in many cases the payday loan company has taken all the money out of that account and left the housing association with a tenant who is in deep arrears. Sometimes they are forced to take out eviction notices, which they are very reluctant to do. Can this be looked into?

[Lord Newby]

My Lords, this matter has been looked into. The Financial Conduct Authority, which takes responsibility in this area from next April, has already proposed limiting continuous payment authorities to two payments and reducing rollovers to two. It has the power to constrain them further than that if that is still seen to be an issue. That is one of the things that the FCA will look at as part of its assessment of the total cap of the cost of payday loans, which it is currently considering.

[Lord Razzall (LD)]

My Lords, I will follow the previous two speakers but extend the question a little more widely. What steps do the Government propose to take to ensure that payday loan operators cannot simply move their headquarters overseas and operate outside the restrictions that are going to be brought in?

[Lord Newby]

My Lords, under the e-commerce directive, which was introduced during the lifetime of the last Government, payday loan operators are able to relocate. However, a majority of EU member states already have some kind of cap on the cost of payday loans, even if not necessarily as comprehensive a cap as we have, and there is an ongoing debate in those member states that do not yet have a cap about implementing one. There are already a majority of EU member states to which it would almost certainly be uneconomic or pointless for payday loan lenders to switch their bases of operation.

[Lord Kinnock (Lab)]

My Lords, when the lenders invariably advertise the ease of access to money and, even more crucially, the ease of repayment, can their adverts ever be anything but misleading?

[Lord Newby]

My Lords, a lot of effort is being undertaken by the FCA to make sure that the adverts are not misleading. We debated this at Third Reading of the banking reform Bill. The key thing is that people should know what the repayments are, not just in terms of the interest rate—people are very often not desperately familiar with that—but in terms of being absolutely clear about what they have to repay and when. The point that possibly lies behind the noble Lord’s question is whether there should be payday loans at all. As long as payday loans are legal, people have to make some sort of assessment about whether they are going to be in a position to repay them. What the Government and the FCA are committed to doing is to make the costs as clear as possible and limit the potential downside of less than prompt repayment.

[The Lord Bishop of Truro]

My Lords, what consideration, if any, has been given to introducing a real-time database of payday loans in order to ensure that the proposed FCA rules can be properly monitored and enforced and, in particular, to avoid the problem—a special one at this time of year—of people being able to take out multiple loans from different companies at the same time?

[Lord Newby]

My Lords, a real-time database is one of the things that the FCA will be looking at. In some of the countries and US states where they have effective caps on the cost of payday loans, such systems have been seen to work efficiently and be very effective.

[Lord Davies of Stamford (Lab)]

My Lords, we heard a moment ago about the danger of lenders from other EU countries undercutting any legislation or regulation that we introduce in this country. Has the noble Lord considered discussing with the European Commission the possibility of legislating on an EU-wide basis for the single market as a whole?

[Lord Newby]

My Lords, this is a rapidly moving area. If you go back five years, it was not an issue. We are discussing with other member states the operation of the consumer credit directive, for example, and the way in which the market is evolving. As the FCA moves towards putting in place a cap of the total cost of payday loans, we will see exactly how the system is working in the majority of those member states that already have a cap and whether there is any real advantage in moving to a Europe-wide system, or whether the series of national caps is proving effective.

China: Exports

Wednesday 11th December 2013 Lords Chamber

Question

15:30

Asked by

[Lord Wei]

To ask Her Majesty’s Government what assessment they have made of the prospects of increasing United Kingdom exports to China following the trade missions led by the Prime Minister and the Chancellor of the Exchequer.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, last week I was delighted to help the Prime Minister lead the largest ever UK business delegation to China. Our bilateral trade and investment relationship with China is improving. Exports to China have almost doubled since 2009 and more Chinese investment has come into the UK in the past 18 months than in the past 30 years combined. However, there is more to be done, especially in focusing on areas where the UK has particular strengths and where these match China’s emerging demands. Many of these strengths—healthcare, education, the creative industries and agri-tech, to name but a few—were showcased last week. Several agreements in these sectors were signed during the visit and these will open further opportunities for UK exporters.

[Lord Wei (Con)]

I thank my noble friend the Minister for his response. I look forward to the future growth in exports that will result from these significant and much needed visits, and congratulate him on the role that he played in the most recent one. We know that inward investment from countries overseas such as China and India can help build our capacity for exporting, with Jaguar Land Rover, Aquascutum and many other companies showing the way. However, our current measures of success do not necessarily capture the interactions between such investment and exporting. What are the Government doing to encourage, measure and link investment and exporting activities from countries such as China to grow total trade?

[Lord Livingston of Parkhead]

I thank my noble friend Lord Wei for that point and his efforts in promoting UK-Chinese trade. He is right to raise a number of areas, including export from the UK, imports from China and our relationship as regards investment. During the trip, I was delighted that we announced programmes that will help UK investment in China and Chinese investment in the UK, particularly in the area of the supply chain. We have found that, in a number of areas, to be important in improving our overall trade performance.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, the noble Lord mentioned the creative industries. He will be aware that the delegation of which he was part included members from the cultural sector, including Sir Peter Bazalgette, chair of Arts Council England, Nick Starr, executive director of the National Theatre, and Joey the Horse, the puppet star of the National Theatre’s production of “War Horse”. Does he agree that the cultural sector in this country, particularly the performing arts, is widely respected the world over for the skills and products that it can export? Does he also agree that this is a good reason for the Government to continue to give the cultural sector the maximum possible support?

[Lord Livingston of Parkhead]

I thank the noble Baroness for her comments and absolutely agree that this was one of the highlights of the trip, particularly Joey the Horse, who got a standing ovation at the gala lunch that we held. Joey was the star of the trip, after the Prime Minister of course. It was not just in culture that our DNA was represented, but in the Premier League as well. This not only has export potential in its own right but is an expression of British soft power and its opportunities. We will certainly make sure that we include the creative industries as part of our overall export effort, and I thank the noble Baroness for her comments about our support of the cultural sector.

[Lord Clement-Jones (LD)]

My Lords, I warmly welcome my noble friend to his new role, and the success of the Prime Minister’s visit to China. I declare an interest as a partner of a law firm. Why did the Prime Minister not find room in his huge delegation for any representative of the UK legal services sector? The sector contributes some £3 billion to our professional services exports; it provides crucial commercial and dispute-resolution services and support for British businesses around the world; and, not least, will help them to take advantage of the new Shanghai free trade zone. I realise that not everybody wants to be accompanied by a lawyer on their travels.

[Noble Lords]

Hear, hear!

[Lord Clement-Jones]

However, seriously, how does this square with the continuing support that is being given by the MoJ and UKTI to boost the growth of the legal services sector internationally?

[Lord Livingston of Parkhead]

My noble friend is correct that the legal services sector is one of the most important sectors for the UK. He may not be comforted by the fact that we took some accountants on the trip. The law firms were represented, particularly in discussions on the Shanghai free trade zone, in which the UK is going to provide excellent support. The UK legal sector is a great strength, not just as an export in its own right but as a reason for FDI into the UK, because it shows that the rule of law and support from professional services are very strong. I will certainly seek to champion the legal sector going forward.

[Lord Davies of Coity (Lab)]

My Lords, we know that nothing happens in China except by the leave of the Communist Party, which controls the whole of China. We know what the British delegation wants from China. Can the Minister tell the House what the Chinese want?

[Lord Livingston of Parkhead]

The Chinese refer to us as partners for growth. Particularly since the third plenum, the Chinese see a real opportunity to partner the UK in key areas, as China expands its cities and needs to make its environment greener—there are a lot of environmental issues in China. UK products are loved in China. The cultural sector was mentioned earlier. Yes, we can mention whisky. We have even been selling tea to China, which is remarkable. Going forward, the UK’s products and services are ideal for what China needs as a result of the change in its economy. We look forward to continuing to increase our exports to China, because we have a lot of ground to make up.

[Lord Howe of Aberavon (Con)]

No doubt my noble friend is aware that during the past year, the China Investment Corporation—a sovereign wealth fund—has taken a 9% stake in Thames Water and a 10% stake in Heathrow. This year, another Chinese corporation, Advanced Business Park, has said that it will undertake a £1 billion redevelopment of the Royal Albert Dock. Is it not clear that we are looking not at a single arrangement but at a joint, substantial, two-way partnership between the two countries?

[Lord Livingston of Parkhead]

I thank my noble and learned friend for that comment. We are certainly seeing substantial investment from China into the UK—and, indeed, vice versa. We visited a city where Diageo has made a large acquisition. WPP is a very strong firm in China. It certainly is a partnership. China, as one of the most powerful nations in the world, having a stake in the success and growth of the UK economy is certainly no bad thing either.

National Insurance Contributions Bill

Wednesday 11th December 2013 Lords Chamber

First Reading

15:38

The Bill was brought from the Commons, read a first time and ordered to be printed.

Energy Bill

Wednesday 11th December 2013 Lords Chamber

Commons Reason

15:39

Motion A

Moved by

[Baroness Verma]

That this House do not insist on its Amendment 105, to which the Commons have disagreed for their Reason 105A.

105: Page 125, line 3, at end insert—
“(iii) substantial pollution abatement equipment dealing with oxides of sulphur, oxides of nitrogen, heavy metal emissions or particles is fitted to the generating station.” Commons Disagreement and ReasonThe Commons disagree to Lords Amendment No 105 for the following reason—105ABecause it is inappropriate for the fitting of pollution abatement equipment to cause the emissions limit duty to apply to existing generating stations.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, we return to discuss the emissions performance standard and whether it should be possible to apply it to existing coal plant in wider circumstances than the Bill currently envisages. The Government set out in earlier debates, both in this House and in the other place, why we believe Amendment 105 is unnecessary. It has become clear over the course of the debates that there is an almost unanimous consensus on the need substantially to decarbonise our electricity generation by 2030. There is a similar consensus that there will be little or no role for unabated coal generation in that future.

In this Bill, the Government have brought forward a suite of measures that they believe will deliver the outcomes that we all wish to see. The Bill will do so without risk to our security of supply and at the lowest possible cost to the consumer. The Government believe that they already have the right balance of measures to deliver a secure, low-carbon electricity system at the lowest cost.

Amendment 105, proposed by my noble friend Lord Teverson, would allow application of the emissions performance standard to any coal-fired power station that fits the pollution clean-up equipment needed to meet the requirements of the industrial emissions directive. To date, only one station, Ratcliffe-on-Soar, is fitting the equipment needed to comply with the directive and there is no evidence that a large number of others are seeking to do the same. However, this amendment could result in all but one of the 12 coal-fired power stations expected to be operational after 2015 being subject to limited hours or forced closure under the directive. There is a risk that this, in turn, could lead to a scenario where more stations close earlier than might otherwise be the case. Were this to happen, it would require more gas generation to be built earlier than we currently project and, crucially, result in increased cost to consumers.

As my right honourable friend the Minister set out in the other place, we already face a significant investment challenge that will require an estimated 16 gigawatts of new gas plant to be built over the decade from 2015 to 2024 and around 45 gigawatts in total of all forms of generating capacity in this period. My department has therefore looked at a scenario where all our coal-fired power stations close by 2025, which is one possible risk of this amendment. The results of this analysis show that, as a result, in the 2020s average household electricity bills would be around 3% to 4% higher, average non-domestic bills would be around 4% to 6% higher and average energy-intensive industry bills would be around 5% to 7% higher.

The Government are taking a balanced and precautionary approach that seeks to protect consumers and ensure our security of supply. Our emissions performance standard is ambitious—the first in Europe—but it is right that ambition should be balanced with measures for a sensible transition. Ultimately we must ensure that we transition to a low-carbon economy in a way that provides certainty for investors, secure energy and is deliverable at the lowest possible cost to consumers.

Amendment 105B proposed by the Motion of the noble Lord, Lord Oxburgh, would bring all existing fossil fuel plants within the EPS regime from 2025, thereby requiring them to operate within the annual emissions limit set by the EPS. In common with fossil fuel plants that are consented after the EPS comes into force and to which it will apply, the power to suspend the EPS contained under Clause 48 could be used to allow those existing plants to operate over and above their limit should it be necessary to avert a threat to security of supply. I am grateful for the spirit in which the noble Lord proposes this amendment but, ultimately, what is at stake with both these amendments is an assessment of risk. I ask noble Lords to consider carefully whether they can be confident that the amendments will not give rise to risks that, were they to materialise, would be difficult and costly to address. The Government do not have that confidence. The question that noble Lords need to ask themselves is: do they have the confidence to take that risk?

It is through the measures in the Bill that we will reform the UK electricity market and attract the capital investment needed to decarbonise our electricity sector at the lowest cost to the consumer. The Government have listened carefully during the passage of the Bill through this House and the other place and have accepted measures that have improved it greatly, but the amendments would add an unacceptable risk. This House insisting on an amendment today will delay the Bill and will serve only to undermine investor confidence. I therefore urge noble Lords to consider both the direct and the wider implications of insisting on their amendments, given those impacts, and that a significant majority opposed this amendment in the elected Chamber. The Government do not believe that the amendments would provide greater certainty without, at the same time, creating risks to our security of supply and of increased costs to the consumer. On the contrary, causing delay to this vital legislation will only create uncertainty and risk delaying investment in our energy sector when it is needed most. I beg to move.

15:45

Motion A1

Moved by

[Lord Teverson]

As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 105.”.

[Lord Teverson (LD)]

My Lords, I am very aware of my noble friend's remarks. I am also aware of the various matters around this issue. I believe that it is important that we still try to reach a compromise of some sort. Therefore, I wish to reserve my remarks and withdraw my amendment in support of the noble Lord, Lord Oxburgh, in trying to reach a compromise. I therefore beg leave to withdraw my amendment.

Motion A1 (as an amendment to Motion A) withdrawn.

Motion A2

Moved by

[Lord Oxburgh]

As an amendment to Motion A, at end insert “, and do propose Amendment 105B in lieu”

105B: Page 46, line 31, at end insert—“( ) No fossil fuel plant shall operate after the year 2025 if its emissions are not less than the statutory rate, unless it has been exempted under the provisions of section 48 (suspension etc of emission limit in exceptional circumstances).”

[Lord Oxburgh (CB)]

My Lords, I do not think that I have any relevant interests to declare, but I draw attention to the published record.

We have heard why the Minister feels that we should not persist with the amendment of the noble Lord, Lord Teverson, which was passed by this House with a substantial majority. Noble Lords may also have read the Minister of State’s speech in the other place. Having read the arguments, I concluded that there was little between the Government and those supporting the amendment. For that reason, I am today offering a differently worded amendment that to many of us seems both to meet the spirit of the amendment of the noble Lord, Lord Teverson, and to satisfy government concerns.

I am doing that in my capacity as unofficial chairman of this House’s unofficial cross-party Energy Bill group, which first carried out the unofficial pre-legislative scrutiny of the Bill at the request of the then Energy Minister in our House, the noble Lord, Lord Marland. The group has held widely advertised regular meetings with the Minister and officials during the passage of the Bill, and I take this opportunity to place on record our gratitude.

I also thank the Minister for yesterday convening another meeting of the group and for securing the attendance of the Minister of State for Energy. We heard what he had to say, and he heard what we had to say. We offered him the amendment that is before you today, but his officials advised him not to accept it. I think that to pretty much all those present the reasons offered for not accepting it were pretty thin.

The fundamental purpose of the present amendment —and, indeed, the original Teverson amendment—is to make clear that a role for unabated coal in the national energy mix is not foreseen beyond 2025. Indeed, that is the Government’s position. In the other place, the Minister indicated that he expected the overall contribution of coal to our electricity generation in 2025 to be about 3%. In the unlikely event that external events made it look as though unabated coal would be needed longer, the Bill already contains provisions to deal with that unlikely eventuality.

Noble Lords may ask why we are bothering with this now. It is simply to provide an additional crumb of confidence to those who are contemplating investing in new, gas-fired power generation. It is a bad time for investment in energy utilities and it would be helpful to have a clear indication that gas will be our main means of fossil-fuel generation from the 2020s onwards. It is probably unnecessary to point out that this amendment could have no real effect on energy prices in the foreseeable future. This is mostly because the amendment would have no effect on generation until well into the next decade and partly because power price is largely determined by the swing producer, which is gas. At present, coal is cheap and is making an increased contribution to our power generation. However, you will have noticed that this does not translate into lower electricity prices but rather into better margins for coal-fired power stations.

The Government have said it is urgent that this Bill should become law. We agree, and a simple way of ensuring this is to accept this constructive and simple amendment. I beg to move.

[Baroness Worthington (Lab)]

My Lords, if there is no one else who wishes to speak now, I will.

Here we all are, almost at the end of the process of electricity market reform in the Energy Bill. We have spent many months debating these interventions in the electricity market and felled a fair few trees printing all the documents. However, despite all this effort, the Bill is still deficient in a number of important respects. It fails to bring about true competition in generation, handing yet more power and money to incumbents via the capacity mechanism, and it fails to make clear that the objective of all this intervention is to decarbonise our electricity. The net effect of these deficiencies is that the process of decarbonisation, which the Bill seeks to introduce, is more expensive than it need be.

The original Amendment 105 and the new compromise amendment tabled by the noble Lord, Lord Oxburgh, seek to achieve the same thing: providing a back-stop for existing government policy that seeks to make unabated coal a diminishing part of the energy mix by preventing lock-in to high-emissions plant in the 2020s. This plant can be upgraded to comply with tighter air quality standards. The more coal we burn, the more effort we have to undertake, using more expensive options, to meet the same emissions reduction targets.

The Government’s chosen policy to constrain coal investment is the carbon floor price, but this is a deeply unpopular and very expensive policy. It lacks credibility as it is a financial Bill measure that can be easily done away with. It therefore creates a huge amount of political risk for investors.

The emissions performance standard underwrites that policy, reducing risk. The EPS is a tried and tested policy and it has the benefit of providing absolute clarity to the market about what is required. It is already used in California and Canada and in both cases the limit on emissions applies to old coal plant, not just new. In Canada the clarity of that regulation has brought forward investment in the world’s first commercial-scale CCS plant, which will open next year. In the UK we have not followed this but have opted instead to try to tax coal off the system—an option that is not delivering at the moment. Unfortunately, there is a great risk that this course of action will continue to fail and operators of coal will decide to sweat their assets for longer, using the large up-front payments they will now receive from the capacity market.

The original amendment required the old coal stations seeking life extensions to operate for only 40% of the time, under the EPS limit, guaranteeing that they would be available for the peak but not allowing them to baseload. In rejecting the amendment, the Government argued in the other place that this change might dissuade some plant from upgrading at all and therefore reduce the amount of plant available for peaking.

The noble Lord, Lord Oxburgh, has listened to these concerns and now tabled an amendment which offers a different approach. His amendment would require the limit on emissions equivalent to 40% of capacity to apply only in 2025, 12 years from now. Operators of upgraded plant would therefore be able to use their three-year capacity payments to offset the costs of upgrading and continue to sweat their assets for another five years at full capacity, which would then be available for 40% of the time thereafter. This seems like a good deal. By 2025, all but one of the six plants that this amendment would apply to will be more than 55 years old, having emitted together over 1 billion tonnes of CO₂ over their lifetimes, so 2025 is well past their closure date.

This amendment is a compromise but one which still has the benefit of clarity for everyone: clarity for the coal plant; clarity for gas investors; and clarity for the environment. To leave things as they stand is to allow a known unknown to persist needlessly. With no decarbonisation targets to guide government policy—

[Lord Forsyth of Drumlean (Con)]

The noble Baroness is probably drawing her remarks to a close but before she does so, can she explain to me how what she is saying in supporting this amendment is consistent with the leader of the Opposition’s declared policy to hold down energy prices and with maintaining security of supply?

[Baroness Worthington]

It is absolutely consistent because what we have said is that we will seek out the least costly forms of carbon abatement. There is no cheaper way of reducing carbon dioxide than using existing gas stations in place of existing coal stations. That is how the UK decarbonised its economy in the 1990s and that is how we should be doing it again now. However, there is sufficient doubt about that, because of the price of coal relative to the price of gas. It is absolutely consistent to say that we want to keep prices low by supporting this amendment.

One of the things that the Government are currently struggling with is that, at the root of this, there is not sufficient clarity in the backing of these decarbonisation objectives. It would obviously be very easy to solve the energy trilemma by simply lopping off one of the legs. If you simply say, “All we need to do is keep the lights on at least cost”, there is no problem; you would stick with the coal. It seems that this Government are not actually committed to decarbonisation as they have lopped off one of the legs and are seeking a return to coal at just the time when, internationally, we are pressing everybody else to move away from unabated coal.

This is a sensible and moderate amendment, and it gives clarity to everyone. It reduces investor risk, particularly for those people operating gas stations and seeking to invest in new gas stations. I hope that noble Lords on all sides of this House will find that they can support this amendment and I hope that the Minister will ultimately support it, too.

[Viscount Hanworth (Lab)]

My Lords, we have been told that the Energy Bill has two purposes. The first purpose is to secure the much needed investment in new plant for generating electricity. The second is to decarbonise our electricity supply. Amendment 105, which has been rejected by the Government, was closely aligned with these two purposes. Its effect was to ensure that if there were major upgrades to coal-fired power stations, such as to enable them to meet the European emission requirements in respect of sulphates, nitrates and heavy metal contaminations, they should also be constrained to meet the emissions performance standards in respect of carbon dioxide that are imposed by the Bill. The subsequent amendment tabled by the noble Lord, Lord Oxburgh, reinstates this requirement but includes a let-out clause that would allow the Government to alleviate the requirement, if necessary. Presumably, this would be appropriate in a case where the lack of capacity was so pressing as to imply a real danger of the lights going out.

The Minister, Michael Fallon, argued in the Commons that to include such amendments would add to the risks faced by investors. The logic of his position escapes most of us, who believe that the original Amendment 105, or its replacement by the amendment of the noble Lord, Lord Oxburgh, would clarify the intentions of the Bill in a way that would actually encourage investment. Why does that Minister insist on the rejection of these amendments? Is it that he wishes there to be a loophole in the legislation that would allow dirty, coal-fired power stations to remain in operation, notwithstanding the ostensible purpose of the Bill? There are certainly grounds for such a suspicion. However, the Minister has asserted on several occasions that he doubts, even with the allowances the Bill affords, whether any of the old coal-fired power stations have a future.

Perhaps we should believe in his good intentions and allow ourselves to look elsewhere for the reasons for his intransigence. The reasons are not hard to find. The Minister has a need to conciliate a faction in his party that is firmly opposed to all measures aimed at staunching the emissions of carbon dioxide. They point to the cases of Germany and the Netherlands, which are in the act of commissioning unabated coal-fired power stations. They demand to know why Britain should be imposing constraints upon itself when others are failing to do so.

16:00

I believe that the Minister’s stance has the sole purpose of allowing this faction to believe that the intentions of the Energy Bill can be eventually subverted. If he does not himself intend this outcome—and we must be generous enough to believe this—then he must be intent on bamboozling some of the members of his own party whose objectives differ from his own. This is not the sort of consideration that should influence the legislation. The legislation will be greatly clarified by the inclusion of these amendments, which would make its intentions unequivocal. On this basis I would urge your Lordships to support the amendment of the noble Lord, Lord Oxburgh.

[Lord Jenkin of Roding (Con)]

My Lords, I will be brief about this. I understand the argument put forward by the noble Lord, Lord Oxburgh, and I accept that he is trying to reach a compromise. This Bill started with the support of all parties in Parliament. I was a little disappointed to hear the noble Baroness’s complaints that the Bill does not meet many of the requirements that she would wish to see in it, but on the whole her party has supported the Bill. Indeed, it has gone further and recognised that the Bill’s passage is deeply important to the future of our energy industries here.

My noble friend Lord Lawson described it as the worst Bill he had ever seen, took part in the first day of Committee and we have not heard from him since. The fact is that everybody else who has taken part in the passage of the Bill has recognised that the new machinery, which sets up the electricity market reform as an essential part of our generation and consumption measures, is crucial for foreign investment—for all investment, but particularly when we have some of the larger foreign companies willing to invest in this country. Nothing upsets them more than if they see that there is uncertainty in Parliament over the Bill.

Picking up one point made by my noble friend Lady Verma, we have offered the other House a chance to consider the amendment that was carried in this House. It was firmly rejected by a much larger majority there than passed it here. That is the purpose of this House. We have done it. It would be extremely damaging to the general intentions of this Bill if, yet again, we were to send it back to the other place. It would send the wrong message.

I understand the points, made by the noble Viscount, that there may be some marginal advantages. I have had representations from the gas industry about this. The overwhelming reason, however, that we should reject the amendment of the noble Lord, Lord Oxburgh, is that the Bill needs to be passed. It should be passed without any further delay. For that reason, I intend to vote very firmly against his amendment.

[Lord Turner of Ecchinswell (CB)]

My Lords, I speak in favour of the amendment. I find it difficult to understand, for anybody who concentrates not on tactical issues such as the speed of passing of the legislation but simply on the wording, what their opposition in principle could be. The simple fact of the case is that Parliament several years ago passed an Act of Parliament by huge majorities, committing us to the very significant decarbonisation of our economy: an 80% reduction in CO₂ emissions by 2050. It is the clear conclusion of all analysis, including that of the Committee on Climate Change that I used to chair, that there is no believable path to that emissions reduction by 2050 which does not involve the very significant—almost total—decarbonisation of electricity in particular by around 2030.

Clearly that is completely incompatible with a role for coal other than as providing a small number of hours a year of peaking capacity into the mid or late 2020s. This amendment would simply ensure that that possibility would clearly be excluded—with, however, a get-out under Section 48 if that at all endangered an adequacy of supply. It simply seeks to ensure that we will not have unabated coal in significant quantities in the late 2020s, and it does so 12 years ahead, in order to influence the decisions on investment that are required for security of supply.

I fail to see what the disadvantages of the amendment are. It would give greater clarity over our plans for coal and over the opportunities for gas, and I therefore support the noble Lord, Lord Oxburgh, in his amendment.

[Lord Forsyth of Drumlean]

My Lords, I am prompted to rise because of the rather unwarranted attack that the noble Viscount made on Ministers. None of us takes responsibility for security of supply in the future. The late Baroness Thatcher used to say that the only thing that was certain in politics was uncertainty. None of us knows what the future holds or what the likely position will be in 12 years’ time. This amendment would remove the flexibility that a future Government would have in order to keep the lights on. It is really quite wrong of the noble Viscount to present this as some kind of political matter that is exercising Back-Benchers in the other place, as he did, with Ministers responding to that rather than to their responsibility to ensure that we have security of supply. I notice that when I asked the noble Baroness on the Opposition Front Bench about security of supply, she did not deal with the issue.

At the end of Question Time, we had a Question about China. We are now importing vast quantities of carbon from China because of the expansion of coal-fired power stations there, and exporting jobs that would otherwise have been here. To present this as some kind of neutral political argument—

[Baroness Worthington]

My Lords—

[Lord Forsyth of Drumlean]

I shall give way in a second, if I may. I bow to the considerable experience of the noble Lord, Lord Turner, in this matter, but there was a thing called the financial crisis, which he is also very familiar with, which followed and which has big implications for jobs and prosperity in future. Ministers are entirely right to take account of that.

[Baroness Worthington]

I thank the noble Lord for giving way. I referenced security of supply in indicating that this would create greater certainty for gas investment, not least by changing the merit order so that gas operated for more of the time. The noble Lord’s interruption made me lose my place at the time, but I was going to go on to mention that I learnt yesterday that one of our biggest renewable projects, the biomass conversion at Eggborough, is now in jeopardy because Ministers in this Government have changed the early CFD feed-in rules in this Bill, which we have yet even to sign into law. The rules have been changed midway through so that the Eggborough project, which currently accounts for 4% of our supply and gives us firm renewables that mean that we can back off from wind, is now in deep jeopardy and is expected to have to close as a result of this Government changing their mind.

[Lord Forsyth of Drumlean]

The noble Baroness makes my point for me: there is no certainty in the future.

[Baroness Worthington]

Under this Government.

[Lord Forsyth of Drumlean]

Under this Government, under future Governments—whatever. All that the Government are arguing in this regard is, “Don’t close off options that may, in the event of the unforeseen happening, occur”. The noble Baroness, who presumably has concluded that she is never going to be in government again, has no interest in that, but those of us who believe that our parties will be in government would like to see our Ministers keep their options open. I hope that the House will reject this amendment.

[Baroness Worthington]

Does the noble Lord accept, though, that because demand for electricity is currently flat, keeping options open squeezes out investment in new options?

[Lord Forsyth of Drumlean]

Before I sit down, I say to the noble Baroness that I would be more persuaded by her if she and her party were to be more open-minded about the prospects for fracking, for example, in her advocating the future generation of electricity by gas. As always, though, the noble Baroness wants it both ways, and I hope very much that the House will support my noble friend and reject this amendment.

[Lord Teverson]

My Lords, I will comment on the amendment of the noble Lord, Lord Oxburgh. I agree and sympathise with my noble friend Lord Jenkin’s point that the Bill needs to proceed and that we must get it on to the statute book. The only reason I have pursued this is that, as the noble Lord, Lord Turner, suggested, the issue of the continued generation of electricity by coal is fundamental to the policies of both this and the previous Government, and therefore needs to be clarified. These two amendments are attempts to increase as far as possible certainty for investors and clarify the way forward. As the noble Lord, Lord Forsyth, said, that is not completely possible, but at least we can start to close down the risks and probabilities, which is one of the main purposes of the Bill. That is why the amendment has been pursued. I have been happy—although reluctant—not to pursue my own amendment but to try to reach a compromise.

Pricing is not a problem here. Would coal being removed from electricity generation lead to the threat of price increases? In the past few years, when coal has come on, we have not seen prices fall; in fact, the more coal has come on the system, the more they have gone up. That is the correlation; I would not say it is directly causal, but that is the history of how this has worked.

On security of supply, the vast majority of that coal comes from Russia and Colombia, with a little bit from the United States as well. The security of supply arguments do not, therefore, all run in one direction. On the question of how the coal generating industry is treated under any of these amendments, it will be free to operate at peak times for a long time. That, along with contributing into the capacity market, will be greatly to the financial benefit of the power station operators.

That is why these amendments are important. I know that this is not important to everybody, but it is estimated that our carbon emissions went up by 4.5% last year, at a time when we were hoping to bring them down. That was because of the increase in coal generation of electricity, according to the Department of Energy and Climate Change.

This is a good Bill. I congratulate my noble friend the Minister on all that she has succeeded in doing during the passage of the Bill. This is the only contentious Lords amendment, and I seriously regret that the Government have not been able to find a compromise or to help us through this important, core issue.

[Lord Dixon-Smith (Con)]

My Lords, I had not expected to intervene in this debate, but the previous two speeches have forced me to my feet. I remind the House that these amendments, and this part of the Bill, are talking about 2025. There is only one significant carbon target which must be met, which applies in 2050. The rest of it is interim planning. If we are being silly here, of which I am quite capable, and sticking to an interim target, we are taking a very short-term view.

16:14

[Lord Turner of Ecchinswell (CB)]

My Lords, I simply point out that the interim targets in the form of the actual budgets are legally binding commitments of the Government under the Climate Change Act. Once the budgets are set—three budgets in advance—they are not merely planning guidelines but are part of the Government’s legally binding commitments.

[Lord Dixon-Smith]

I am used to the Chancellor of the Exchequer making annual Budgets and I have been involved in politics indirectly and directly for a very long time. If the Chancellor of the Exchequer is forced to, shall we say, amend interim budgets, it seems to me that sticking our feet in the ground over an energy budget is not exactly wise.

[Baroness Verma]

My Lords, I am grateful to all noble Lords for their contribution to the debate. I hope that in my opening remarks I made it clear that the Government recognise the intention behind this amendment. Of course we share that intention, but I believe that the differences between us are very narrow, even though they are very important.

It boils down to an assessment of risk. All sides in this debate can agree that we neither expect nor desire large amounts of unabated coal to be operating in the 2020s, but, as my noble friends Lord Forsyth and Lord Jenkin of Roding have rightly pointed out, we cannot be sure today exactly what will be required in those years. The Government’s position is that we should take a precautionary approach, given the serious potential for security of supply implications and the impact on consumer bills if we get it wrong. We should send a clear signal that unabated coal has only a limited future in helping us to transition to a lower carbon economy by creating an EPS that applies to any new coal plant. I appreciate the attempt of the noble Lord, Lord Oxburgh, to find an alternative, but no responsible Government could or should take risks that potentially put energy security in danger.

The noble Baroness, Lady Worthington, raised a point on the capacity market; our view is that capacity payments are likely to have only a marginal impact on the overall economics of coal plant and more important drivers on occasions where upgrading will relate to the overall state of an operator’s plant, an operator’s view of the market and the value that they place on retaining coal as a hedge. Even were they able to do so, this could mean that coal plants stay open longer, but they would operate at low-load factors and hence have low carbon emissions, given the evolution of the energy market with more low-carbon generation and carbon pricing. The noble Baroness could not give complete assurance that energy security would not be at risk. She could not say that prices would stay the same—her own party’s policy does not say that.

It is time that we looked at the elephant in the Chamber—the investors. After months of uncertainty, investors are looking at us in dismay. The most important thing we need to do is to provide certainty for investors by securing Royal Assent. The Confederation of British Industry has said that the Energy Bill has undergone significant scrutiny within Parliament as well as by industry and other stakeholders and it has the broad support of industry and investors in its current shape. It is important to the success of EMR that the Energy Bill receives Royal Assent in 2013, allowing investors to make those well needed decisions about investment.

[Baroness Worthington]

I thank the noble Baroness for giving way. Will she comment on my questions about Eggborough, as that is the very first test of whether this Bill is actually going to deliver? It was part of DECC’s announcement on projects that are going forward under the FID enabling scheme but I hear that next week they will receive a letter saying that they are not eligible for the first tranche because of a new system that the Government have introduced of rationing out the CFD contracts.

[Baroness Verma]

My Lords, the noble Baroness is of course aware that negotiations that are commercially sensitive cannot be discussed; I will not go further than that because these are sensitive issues and it would not be right of me to discuss individual plants, particularly on issues of commerciality.

[Baroness Worthington]

I will just say that the Secretary of State was at Drax unveiling a new project that is being enabled under the CFDs. If it is that confidential, why was he there?

[Baroness Verma]

My Lords, I shall continue by trying to conclude quickly. The Bill has undergone thorough scrutiny and the Government have listened very carefully to all the concerns raised during its passage through this House. I am grateful to my noble friend Lord Teverson for his warm words. We have responded to a great many of the issues raised by colleagues from all sides of the House on, for example, domestic tariffs and access to markets, and we have introduced new topics—for example, carbon monoxide and smoke alarms.

We must acknowledge that the other place has accepted 112 amendments and, moreover, has welcomed them. It has recognised the expertise that this House has brought to the scrutiny of the Bill and the real improvements to it that this House has made. However, the other place has decided with a considerable majority that it does not agree with this amendment. The elected Chamber saw an unprecedented majority for the Bill as it completed its passage through the other place. Today, we can decide that the Bill proceeds to the statute book—a Bill that is essential for protecting consumers and for ensuring security of supply and decarbonisation of our economy. Nothing will send a firmer signal to investors than that this House will do nothing that prevents the Bill receiving Royal Assent.

[Lord Oxburgh]

My Lords, so much for my attempts to find an uncontroversial middle way of bringing all sides together. The temperature of this debate has been a little higher than I would have expected and, indeed, than I would have hoped. I agree with a great deal that the Minister has said on both security of supply and the Bill’s importance for investors. However, the fact is that the amendment increases, rather than reduces, both those things. If Members with a keen sense of smell have detected a faint aroma in the Chamber, it is the aroma of red herrings.

The Minister spoke of concerns about certainty for investors if my amendment is agreed, and the noble Lord, Lord Forsyth, said the same thing. He is quite right: we do not really know what is going to happen in 10 years’ time, but the Bill contains a measure that allows the Government to disregard these constraints if severe circumstances mean that it is necessary to do so. Therefore, that question of security of supply does not really exist.

As far as looking at certainty for investors is concerned, in the near term the necessity is for investment in gas-fired power stations. Everyone agrees with that. This amendment would improve, not reduce, certainty for investors in the time that we can look forward to. I do not know anyone who does not think that we need new gas-fired power stations, and the amendment would help investment in that regard.

The noble Lord, Lord Jenkin, rightly said that we have to get on with it. I am going to press this matter to a vote. I do not think that it need delay the passage of the Bill for more than a few days. As far as investors are concerned, getting the right Bill before Christmas, which the Government can certainly do if they are so minded, will be the main thing. The fact that that happens a day or two later is neither here nor there, and there will be a much more certain basis for investing in new gas.

16:24

Division 1

Ayes: 215

---

Labour: 145
Crossbench: 48
Independent: 7
Liberal Democrat: 3
Green Party: 1
Conservative: 1
Ulster Unionist Party: 1
Bishops: 1

Noes: 262

---

Conservative: 161
Liberal Democrat: 75
Crossbench: 20
Democratic Unionist Party: 1
Bishops: 1
Labour: 1
Ulster Unionist Party: 1
Independent: 1

Motion A agreed.

Anti-social Behaviour, Crime and Policing Bill

Wednesday 11th December 2013 Lords Chamber

Committee (7th Day)

16:40

Relevant documents: 12th Report from the Delegated Powers Committee, 4th Report from the Joint Committee on Human Rights.

Schedule 7: Powers to seize invalid passports etc

Amendment 56YG

Moved by

[Baroness Hamwee]

56YG: Schedule 7, page 169, line 38, leave out paragraph (b)

[Baroness Hamwee (LD)]

My Lords, in moving Amendment 56YG I shall speak also to Amendment 56YH. I have to say that I am amazed by the influence of my noble friend the Chief Whip, who just by sitting there has prevented anyone walking in front of me.

Schedule 7 deals with the powers to seize invalid passports, and these are two quite small, probing amendments, although they are serious. The first amendment would leave out the provision for a constable, who has various powers of search and seizure, to authorise a person—any person,

“to carry out on the constable’s behalf a search under this paragraph”.

That is a search which may involve the use of force—reasonable force, but nevertheless force. I question whether it is right for such powers to be authorised—perhaps not technically delegated, but to the outside world they would seem to be delegated.

My second amendment would leave out the requirement to return an expired travel document, but not where it is thought that it might be intended to be used for purposes for which it is no longer valid. My question, of course, is: why not? If the document has expired, what harm is there? Are there no other systems that are sophisticated and efficient enough to pick up whether an expired travel document is, in fact, expired? This seems an odd sanction, merely on the basis of reasonable belief. My particular reason for questioning it is that it might really irritate people quite unnecessarily. I have written “unnecessary aggro” against this, and I genuinely think that we should avoid causing unnecessary aggro, because there are enough sensitivities around passport and immigration controls and so on without adding one which, to my mind at any rate, is not necessary. I beg to move.

[Lord Ahmad of Wimbledon (Con)]

I thank my noble friend Lady Hamwee, who explained that these two amendments relate to the powers to seize invalid passports. As she has said, they are probing in nature. Such powers may be necessary where a passport has been withdrawn in the public interest; for example, to disrupt a person’s travel overseas due to the serious issue that they may be engaged in terrorism.

Amendment 56YG relates to the ability of a constable to authorise a person to carry out a search on their behalf. The purpose of this provision is to allow a constable to make use of support if required when carrying out a search at places other than a port. Such support would be exercised under the authority of a constable, and I reassure my noble friend that, in view of the type of case to which this paragraph applies, it would in practice be likely to be carried out in the presence of a constable. The authorised person—such as a police community support officer—would not be empowered under the provision to use reasonable force or to require a person to hand over the passport for inspection purposes.

Amendment 56YH, which I think my noble friend labelled the “avoiding unnecessary aggro” amendment, relates to expired travel documents. I agree with my noble friend that there is often little harm in returning an expired document to the passport holder. Indeed, there is provision in paragraph 4 of Schedule 7 for that very purpose. The provision recognises that the passport holder may wish to retain the expired passport because, for example, it may include extant visas for travel to other countries. It may even provide memories of places that they have travelled to previously; as well as a visual record, for good or bad, of how we may have looked some 10, or even 20, years ago.

However, on a more serious point, the British passport does of course remain the property of the Crown at all times. There is no entitlement to a passport and no statutory right to have access to it. If a person intends to make use of an expired passport for a purpose for which it is no longer valid—in other words, for a fraudulent purpose—it is right that a constable should be able to remove the document. This would prevent it being used elsewhere for fraudulent purposes, where the level of checks may not be so robust.

It is also entirely inappropriate that a constable should hand back an expired passport to a person where he or she reasonably believes that it is intended to be used for a fraudulent purpose. It would send out the wrong message to the passport holder and would simply allow—if not, indeed, encourage—them to continue to make use of the document for wrong and potentially unlawful reasons. I hope, in light of the explanation I have given, that my noble friend will withdraw her amendment.

[Baroness Hamwee]

My Lords, I will do so but I have to say that, first, on the issue of the expired passport, there are some good reasons which a passport holder may not even think of at the time. One that immediately occurs to me is the need to be able to show the number of days you have been in the country, which involves showing when you have travelled out of and back into the country. There are tax reasons why a number of people need to be able to show that. It is a matter of the officer’s discretion and reasonable belief but I find it difficult to imagine how the conversations would be conducted. I should perhaps ask my noble friend whether he can tell the Committee how one challenges an officer’s decision. His notes may say, even if I did not think of it beforehand.

As regards whether someone other than a constable can exercise the powers of search and seizure, my noble friend says that, in practice, it would be the constable. If that is the case, the obvious question is: why allow for anyone else to do it? Another question is whether there will be instructions to officers—guidance, codes of practice or whatever—that might deal with this. I do not know whether my noble friend can deal with either of those at the moment—I know that colleagues are here particularly to talk about the next group of amendments—but if he has anything to say, that would be good. If not, perhaps he could write to me.

[Lord Ahmad of Wimbledon]

I will just assure my noble friend that I do not think I can add to what I have said other than, on the first point about why we should not restrict the power in that way, it is important that there is a level of flexibility that allows the constable to exercise it. In most cases, as I have said, the person would be someone such as a community support officer. As far as the document is concerned, my noble friend raised the point about other reasons. Of course it is at the discretion of the officer, but one hopes that at that point a case could be made. She raised the issue of tax, which is not one that I was thinking through as she spoke. I am sure that there is a list of other circumstances. However, ultimately, it boils down to the document being the property of the Crown, and it should remain so.

[Baroness Hamwee]

Perhaps after today the Minister could let me know what arrangements there will be for a challenge, and about a code of practice. He nods and, on that basis, I beg leave to withdraw the amendment.

Amendment 56YG withdrawn.

Amendment 56YH not moved.

Schedule 7 agreed.

Clause 132 agreed.

Amendment 56YJ

Moved by

[Baroness Hamwee]

56YJ: After Clause 132, insert the following new Clause—
“Report by Secretary of State
The Secretary of State shall, no later than three months after the coming into force of section 132, report to Parliament his or her recommendations—(a) for the introduction of safeguards in respect of legally privileged material, excluded material and special procedures material in respect of a person detained under Schedule 7 or 8 to the Terrorism Act 2000, and(b) for the introduction of a statutory bar to the introduction in a criminal trial of admissions made by a person detained under Schedule 7 or 8 to the Terrorism Act 2000.”

[Baroness Hamwee]

My Lords, in moving Amendment 56YJ I will speak also to Amendment 56YK. I also have Amendment 100A in this group, which is a consequential amendment. The whole of this group deals with Schedule 8, which is Schedule 7—port and border controls—in the previous legislation. My amendments have come up as a curtain raiser, though in this debate they are probably more of an epilogue. They relate to future possible action rather than to anything that might happen immediately, as would other actions flowing, in most cases, from the work of the JCHR. I am not suggesting that noble Lords who are moving and speaking to them are merely acting as mouthpieces—I know that that is not the case.

My noble friend Lord Lester is unwell and very sorry not to be here to speak to amendments in his name and to which he has added his name; my noble friend Lord Avebury has his instructions. I do not want to make a Second Reading speech at this point—perhaps speeches on these issues will be longer on Report—but I will make some general remarks. I acknowledge that the Government have moved forward a little on the relaxing of the arrangements to which this schedule applies, but like others I am eager for more.

I was interested in some of the comments that the Government included in their publication responding to the response to the review of the operation of Schedule 7. We do not have the responses published, but there are some interesting and telling comments. A self-declared police officer says:

“Schedule 7 should also incorporate a clear commitment and implementation process to the Equality Act 2010 general duty of ‘fostering good relations’”.

There are comments about,

“More tactful or less intimidating examinations”.

The report says of the community engagement events which the Government undertook that,

“The conduct of examinations was raised repeatedly”.

The Equality and Human Rights Commission commented at length on the lawfulness of stopping without suspicion. It said that,

“there should be no power to detain and question for more than 1 hour”,

on the basis that if an officer cannot articulate suspicion after 30 minutes of questions, he certainly should not detain for up to nine hours.

The Government asked whether respondents had any personal experience of being stopped and detained. I note that the proportion of those who said that,

“Schedule 7 powers are unfair, too wide ranging and should be curtailed”,

was considerably higher than the proportion who said they had personal experience. Even if you add the “prefer not to say” responses, it is still a higher proportion.

I was also interested to see the advice to examining officers following the recent case about,

“the right to consult a solicitor in private, in person and at any time during the period of detention”.

I know of a man who was detained but did not exercise that right because he was told by the officer who detained him that this was bound to lead to a delay, meaning that his wife and his elderly, infirm mother, with whom he was travelling, would be left even longer not knowing what was going on—a practice that I hope never to hear of again. Clearly, training in this is an issue.

Of course, my underlying point is about the balance between protection and security, and individual liberty, some of which is about what the Government can do through officers and some of which is about safeguards written into the legislation.

My amendments anticipate what we might be seeking if this debate were following the report by the independent reviewer of terrorism legislation when we know the outcome of the Miranda case, but I have picked up on his evidence to the recent Home Affairs Select Committee inquiry into this. Amendment 56YJ picks up two of his recommendations, 4 and 7, on the introduction of safeguards in respect of legally privileged material and on a bar to the use in a criminal trial of admissions made in the circumstances of such a detention.

Amendment 56YK shows that I am ever the optimist. I would never expect wording such as this to be used in legislation, but we are only in Committee. It seeks assurances from the Government about following through on—although I would say, for the purposes of the debate, looking seriously at—recommendations made by the independent reviewer following the Miranda case. I am sure that my noble friend the Minister will give assurances about that. I remain optimistic but also vigilant. As I said, Amendment 100A is consequential. I beg to move.

[Baroness Kennedy of The Shaws (Lab)]

My Lords, I will speak to Amendments 57 to 64. It is important to consider the backdrop here. Schedule 7 of the Terrorism Act 2000 is a highly intrusive police stopping power and it operates outside the normal regulatory framework that covers other police powers of stop and search.

Under Schedule 7, individuals are stopped and they are not under arrest but they are examined for up to nine hours, under the current arrangements, where they can be questioned, searched and have their belongings searched; they can be strip-searched; and they can have samples of their biometric data, including their DNA and fingerprints, taken from them, regardless of the outcome of the encounter and in the absence of a lawyer. People are stopped under it and are obliged to co-operate or face arrest, a period of imprisonment or a fine for any refusal. In addition, there is no right to compensation or assistance in rearranging any flights or other transportation that they might have missed as a result of this examination or detention. It is important to see just how extraordinary these powers are.

Recent research has shown that in 2011-12—the examination of this material has only just been encapsulated in a report—63,902 stops were carried out under Schedule 7. Of these, 2,240 lasted more than an hour and 680, which is less than 1%, resulted in a detention. Although no information has been provided on the number of people convicted, and on what charges, there were just 10 terrorism-related convictions between 2009 and 2012. I have been involved in most of the cases and can tell you that none was as a result of a stop at an airport or any port. We have no convictions based on these stops.

17:00

Black and minority ethnic groups make up the majority of those subject to the stops—some 56%—even though they account for approximately 14% of the national population. Asians accounted for 27% of Schedule 7 stops but are only 7.5% of the national population. Blacks accounted for 8% of stops but they are only 3.3% of the population. People from mixed backgrounds accounted for 3% of stops but are only 2.2% of the population. People from other ethnic groups, including Chinese and other, accounted for 18% of stops, although they are only 1% of the population.

The targeting of black and minority ethnic groups continues to be even more marked when we consider the most intensive Schedule 7 stops. It appears that shorter stops are made, basically, of white people. The people who are detained for any length of time almost invariably are from ethnic minority groups. Of those stops that lasted for more than an hour, 36% were of Asians, 14% were of blacks, 3% were of people from mixed backgrounds and 24% were of people from other backgrounds. Fewer than 12% of stops that lasted more than an hour were of white people. Therefore, when a police officer says, as the noble Baroness, Lady Hamwee, mentioned, that this is interfering with the fostering of good relations, we can understand why.

Politicians in this House and in the other place have raised concerns, as have civic groups and the Equality and Human Rights Commission. Indeed, the United Nations Human Rights Committee has expressed grave concerns over the use of counterterrorism measures in this country and was particularly concerned over what it judged to be religious and ethnic profiling in the use of these powers. It should concern us as a House that this is the perception.

David Anderson QC—the terrorism watchdog if you like—said:

“I have not been able to identify from the police any case of a Schedule 7 examination leading directly to arrest followed by conviction in which the initial stop was not prompted by intelligence of some kind”.

He is basically saying that when the police make stops that go on to lead to further investigation it is invariably because there has been a reasonable suspicion. Yet, reasonable suspicion is not what is required. The police can stop people without any reasonable suspicion at all. Despite this, official statistics on the use of this power illustrate that it has not been used in an intelligence-led approach and that people from ethnic minority backgrounds are more likely to be subjected to the more extreme aspects of the power, particularly people from Asian backgrounds. That is the basis on which I bring these amendments to this legislation.

I know, as the noble Baroness, Lady Hamwee, said, that a number of groups are calling for a reduction of the maximum period of detention to one hour. However, I am not taking it down as low as that. In my amendments I am suggesting that going down to six hours, as the Government have promoted in this Bill, is an advance and to be welcomed, but it should be much lower than that. I am suggesting that we should take the moderate course and reduce it to three hours, at which point the person should either be released or arrested. It is worth noting that 97.2% of examinations take less than an hour, so if we give the police, or those who are involved in exercising these powers, the additional couple of hours that I suggest in my amendments, we will give the authorities as much practical power as they need.

I turn to the issue of the power to take non-intimate biometric data, including DNA and fingerprints. I suggest that that should be repealed in the light of the huge concern about its impact. The Government have already said that they will repeal intimate samples being taken, but I am asking that that be extended to non-intimate samples.

Most of the community, legal, academic and equality groups are calling for a much greater awareness among officers of the way in which special powers should be used and that there should be better training. Advice and assistance should be provided to people who miss their flights, and so on. The kernel of the amendments is that the minimum threshold of suspicion should be reasonable suspicion. It should be on that basis that any individual is stopped. Otherwise, it is impossible to have any independent scrutiny of the exercise of those intrusive powers. We cannot test the use of the powers if someone says, “It was my sense of smell. It was my policeman’s nose that told me that I should stop this person”. That is not good enough.

The independent reviewer suggested that there might be some test of subjective suspicion, but that cannot be a test that could be scrutinised in any acceptable or sensible way. The PACE code, which governs other stop powers, should be extended to cover stop and searches conducted under Schedule 7, and Schedule 7 stops should be monitored under the same framework as all the stop and search powers that we currently have, and data should be shared with community and monitoring groups.

That is the basis on which I have put forward my amendments, and I look forward to hearing the Minister’s response to those recommendations to the House.

[Lord Avebury (LD)]

My name is attached to the amendments in this group in the name of my noble friend Lord Lester, who, as my noble friend Lady Hamwee has already said, is unfortunately indisposed and unable to be present for this debate.

Let me say at once that I agree with all the amendments proposed by the noble Baroness, Lady Kennedy, as well as those in our name. She made a convincing argument, particularly on the ineffectiveness of the legislation. In spite of the vast number of stops and searches that have taken place, we have not had a single conviction. This is not a device for catching terrorists or even being able to question them—the noble Baroness added that none of them had even been charged. This matter has caused enormous concern to the Joint Committee on Human Rights and to the Equality and Human Rights Commission, with which we have an opportunity to discuss the amendments. It is as worried as we are that Schedule 7 to the Terrorism Act could violate human rights and equality laws and cause immense damage to community relations because of its widespread negative impact, particularly on our Muslim population. The EHRC made submissions to the Home Office consultation on Schedule 7 powers, and again, in 2013, it made a further submission to the Joint Committee on Human Rights in relation to its scrutiny of the Bill. It seems to me that the EHRC has been ignored.

We recognise the importance of stop and search powers as a tool for crime detection and prevention, and we acknowledge that Schedule 7 forms part of the UK’s counterterrorism strategy, which is aimed at protecting people in ports and airports and on the chief modes of transport which have been targeted by terrorists in the past. It could also prevent terrorists from entering UK territory.

However, we believe—with others—that the legal form and practical exercise of these powers should comply with equality and human rights legislation. The powers have to be used appropriately, proportionately and in a non-discriminatory manner. In its report, The Impact of Counter-terrorism Measures on Muslim Communities, the EHRC noted that Schedule 7 is eroding Muslim trust and confidence in policing and called for greater transparency and accountability around its use. Following the consultation already mentioned, Clause 132 and Schedule 8 to the Bill propose certain changes to the provisions in Schedule 7 to the Terrorism Act 2000 for stopping, examining and detaining people at ports. However, I agree with the EHRC that to do this without the need for reasonable suspicion or other limitations is far too broad, lacks efficient safeguards, and could be a breach of the requirement that such an interference should be prescribed by, and in accordance with, the law pursuant to Articles 5 and 8 of the European Convention on Human Rights.

This point has also been made by the Joint Committee on Human Rights and several of the amendments in this group are based on its recommendations. This is especially the case when an individual is questioned about his political and religious beliefs and activities, as well as those of others in his community and family. The Islamic Human Rights Commission says it has received dozens of complaints of inappropriate questioning, such as officers asking Muslims whether they pray, whether they would be willing to spy on their communities and which party they voted for at the last election. The commission concludes that,

“Schedule 7 has done more to alienate people than address the issue of national security.”

I will give two examples from my own experience. First, a British Shia imam, returning to the UK through Heathrow terminal 1, was detained, interrogated at length and had his fingerprints and DNA taken. I was told the samples would be retained indefinitely, for comparison with samples taken at the scene of terrorist offences. I wrote to Jacqui Smith, then Secretary of State for the Home Office, on 5 December 2008, asking for the samples to be destroyed, in the light of the case of S and Marper at the European Court of Human Rights. I finally got the samples destroyed and the imam’s name expunged from the database on 25 January 2010 after 13 months of correspondence and telephone calls with Ministers and their offices and various branches of the police, including SO15, or Counter Terrorism Command.

In a second case, which is still ongoing, a friend of mine, who is a Bahraini national, has been stopped several times at Heathrow and King’s Cross and his complaint was taken over by the IPCC, which issued proceedings against the Metropolitan Police on 10 October 2013 because it would not investigate the basis for the stops. It was expected that some months could elapse before the case was heard in the High Court, and I would be grateful if my noble friend could give me an update on that. As I said to the Security Minister, James Brokenshire, it is clearly unacceptable that our police should be harassing and intimidating Bahraini refugees here, including British citizens, when they are entitled to protection from the regime that persecuted them. Instead, it is clear that our police are acting as agents of the al-Khalifa oppressors. It is odious that peaceful opponents of any state which violates human rights should continue to be persecuted after they seek asylum here. It is not simply an operational matter for the police, but one that touches on our obligations under the refugee convention. As I also said to Mr Brokenshire, I do not believe the police would have acted in this disgraceful way unless they had been told from on high that this is how they were expected to behave.

More widely, the EHRC’s statistical analysis of examinations and detentions under Schedule 7 suggests that disproportionately high numbers of black and Asian passengers are being stopped and the disproportion increases further with over-the-hour examinations and still further with detentions. The code of practice on Schedule 7 prohibits reliance on ethnicity as the sole reason for examining a person, so the EHRC suggests that an investigation be undertaken to see whether that is the practice. However, statistics alone cannot prove that a power is being used in a discriminatory manner; a more comprehensive study is needed to see whether the conduct of the police under Schedule 7 breaches the Equality Act. I hope that my noble friend will say that in light of the experience, such an inquiry will be undertaken.

17:15

To look at the amendments for a few minutes, Amendment 57 would ensure that Schedule 7 powers cannot be used inappropriately where the dominant purpose is to gather general intelligence, or evidence for the security services or others, to use in legal proceedings beyond the statutory purpose of the power, which is solely for the examining officer to determine whether the person appears to be,

“concerned in the commission, preparation or instigation of acts of terrorism”.

Amendment 57 provides that there is adequate ongoing monitoring and analysis of the use of the power, and that no individual can be forced to answer questions under the threat of criminal sanction unless they are arrested as a suspected terrorist who is or has been “concerned in ... terrorism”.

We are advised that statements made by individuals during Schedule 7 stops cannot lawfully be relied upon in control order or terrorism prevention and investigation measures proceedings, nor in asset-freezing proceedings, because that is not the statutory purpose of Schedule 7. That needs to be made clear. This amendment adds safeguards by ensuring that Schedule 7 powers should not be used where the dominant purpose is to gather general intelligence, or evidence for the security services or others, to use in legal proceedings beyond the scope of the statutory purpose of Schedule 7.

Amendments 57A, 61A and 61B, in the name of my noble friend Lord Lester, concern the accessing, searching, examining, copying and retention of data on personal electronic devices. The JCHR said in paragraph 122 of its fourth report that these powers in Schedule 7 were,

“so wide as not to be ‘in accordance with the law’”.

It welcomed the express reference to necessity and proportionality in the working draft of the revised code of practice but does not consider that the code is sufficient to circumscribe the width of the powers. The Joint Committee said that the powers should only be exercisable on reasonable suspicion; these amendments give effect to its recommendations.

Amendment 58 provides that the power to detain and question for more than an hour can be exercised only if the examining officer has by that point formed a reasonable suspicion that the person being questioned is or has been “concerned in … terrorism”. This is another of the amendments recommended by the JCHR. I hope that your Lordships would agree with the distinction that it draws between, on the one hand, the powers which can be exercised without reasonable suspicion—such as the power to stop, question and request documentation, and physically search persons and property—and, on the other, the more intrusive powers such as detention, strip-searching, searching contents of personal electronic devices, the taking of biometric samples and the seizure and retention of property, including personal information on electronic devices, which should be exercisable only if the examining officer reasonably suspects that the person is or has been “concerned in … terrorism”. This amendment gives effect to the JCHR proposal for a reasonable suspicion requirement before the more intrusive powers under Schedule 7 are exercisable, and to its suggestion that the threshold for these powers should be the point at which the person being examined is formally detained, after one hour of questioning.

As to Amendments 59, 60 and 61, paragraph 2 of Schedule 8 removes the current nine-hour maximum time for questioning under Schedule 7. Paragraph 2(3) proposes new paragraph 6A that provides that a person may be questioned for up to one hour under paragraphs 2 and 3 of Schedule 7. If the examining officer wants to question the person for more than one hour, then the person will have to be detained under new paragraph 6 of Schedule 7, which triggers the safeguards contained in Schedule 8 to the Terrorism Act 2000. As the noble Baroness, Lady Kennedy, pointed out, between 1 January 2009 and 31 March 2012, only 3% of examinations continued for more than one hour, and only one in 2,000 examinations lasted more than six hours. It is therefore correctly proposed in these amendments that the maximum length of detention under Schedule 7 should be reduced from six to three hours. That is appropriate.

On Amendment 62, paragraph 4 of Schedule 8 inserts new paragraph 11A in Schedule 7 to the 2000 Act enabling examining officers to copy anything which is given to them or is found during a search and to keep a copy of such material for as long as it is necessary for the purpose of determining whether the person is or has been “concerned in … terrorism”.

This is a very wide power, which could lead to sensitive personal data being retained for indefinite periods of time. Even with a reasonable suspicion that the information retained may prove that the person is “concerned in... terrorism”, this power has the clear potential to infringe the Article 8 rights of persons examined under Schedule 7, because of its highly intrusive and open-ended nature. In addition, even if further safeguards were implemented, such as limits on the length of time the data could be retained or prohibitions on sharing the data, there is still the potential for breaches of Article 8 to occur, resulting from the retention of the data. Therefore Amendment 62 correctly proposes that this provision should be removed entirely from the Bill.

I will not go through the remaining amendments because time is short, but your Lordships may wish to note the recent Administrative Court decision in the case of Elosta v The Commissioner of Police for the Metropolis, in which it was held that it is unlawful to restrict a person who has been detained at a port or airport under Schedule 7 to the Terrorism Act to being entitled to have legal advice from a solicitor on the telephone only prior to a police interview, rather than having the right to have a solicitor present in person during the questioning where the detainee has specifically asked for that greater form of protection. I am pleased to see that Amendment 63 would give effect to that provision.

Finally, Amendment 64 would prohibit the collection of non-intimate DNA samples without consent from people who have not been arrested or charged. Taking and retaining samples from a person who has not been arrested or charged, and who is not the subject of reasonable suspicion, has serious privacy implications and should not be allowed.

I hope that all these amendments will be acceptable to the Government.

[Baroness Kennedy of The Shaws]

My Lords, before the Minister rises, perhaps I may indicate, as I did not specifically mention it, that I, too, am urging that the threshold of reasonable suspicion should be the standard before downloading, retaining and copying material on electronic devices of any kind. Even if the Government do not accept the amendment on stopping—that there should be reasonable suspicion at that point—at the very least we should move on to reasonable suspicion before we start taking people’s devices and entering into private material and retaining it.

[Lord Faulks (Con)]

I, too, am a member of the Joint Committee on Human Rights. Discussion, as your Lordships will anticipate, ranged far and wide over this new Schedule 8 amending Schedule 7 to the Terrorism Act. Giving the perfectly proper right to stop and seize and, at the same time, preventing so far as possible any abuse of that power is a difficult balance to strike. However, it is worth recording that we concluded that the Government had made out a case for a without -suspicion power to stop, question and search travellers at ports and airports, given the current nature of the threat from terrorism, the significance of international travel, the overall threat picture and the evidence seen by the independent reviewer demonstrating the utility of non-suspicion stops at ports in protecting national security. Therefore, we also concluded that the retention of this power under Schedule 7 was not inherently incompatible with Articles 5 and 8 of the European Convention on Human Rights.

We are in the slightly unfortunate position of still awaiting the report by the independent reviewer of terrorism legislation on the David Miranda case, which will perhaps shed some light on this power generally. The Government clearly pay considerable heed, quite rightly, to what the independent reviewer of terrorism recommends but, with great respect to my noble friend Lady Hamwee, simply subcontracting responsibility, as her Amendment 56YK would, from the Secretary of State to the independent reviewer would go rather too far.

This is a very difficult balance to strike. The Government have come some way towards a balance in favour of those who might become the victims of an abuse of power. The question is whether they have come far enough.

[Baroness Smith of Basildon (Lab)]

My Lords, this has been a useful debate. The issues that have been raised are around the difficult balance between civil liberties, national security and counterterrorism measures that the noble Lord, Lord Faulks, referred to. The points made today about those issues are extremely useful and I look forward to hearing the Minister’s comments on them.

We are greatly assisted today by the supplementary written evidence of David Anderson QC. We are indebted to him because, when giving evidence on 12 November, he was asked to spell out what changes he would recommend to the port powers in Schedule 7 and the Minister, Damian Green, had already said in the other place that he expected recommendations. At Second Reading in your Lordships’ House, I said that I thought it was optimistic of the noble Lord, Lord Avebury, to hope that we would be able to see any such recommendations from David Anderson while we were still debating the Bill. I thought he was being optimistic but that optimism was well founded. We are indebted and grateful to David Anderson for the efforts that he must have gone to in order to ensure that we had his recommendations before we had completed our deliberations—indeed, as we were having our Committee debates. I hope that the Minister will endorse that. That is very helpful and greatly welcomed.

I shall not comment on each individual amendment, but a number of the amendments before us today relate to his report. As I said, I will be interested to hear the Government’s response to them as there are areas to which the Government may want to give further consideration and on which they may want to bring forward amendments before the conclusion of proceedings on the Bill.

On Amendment 56YJ and the issue of privileged material, although David Anderson reflects that identifying the details of changes is difficult before we have the Miranda judgment, he identifies this as an area where there need to be safeguards and clarity around those safeguards. It is not an area where there should be any confusion or ambiguity. It would be helpful today if the Minister were to say on behalf of the Government whether they accept the principle of David Anderson’s recommendation in this regard. We are certainly sympathetic and would welcome the opportunity to consider further the kind of safeguards that could be introduced.

Also on Amendment 56YJ, I think it was in the Beghal v DPP decision that the court supported the introduction of a statutory bar to Schedule 7 admissions in a subsequent criminal trial, although it also recognised that this would have to be given detailed consideration. David Anderson has now added his support to that of the court and that also forms part of his recommendations. Again, we would be very sympathetic to that and would be interested to know whether the Government intend to support that recommendation, which this amendment reflects.

Amendments 56YK and 100A refer to a process by which effect could be given, almost automatically, to the recommendations of the independent reviewer of terrorism legislation. There is some merit in looking at how recommendations could be acted on more quickly but we would welcome the opportunity to see more detailed proposals. It would be helpful to have a mechanism to take action more quickly than always having to wait for the next legislative slot for primary legislation in the Government’s timetable. However, whether secondary legislation, even with the affirmative procedure, would give adequate opportunity for effective scrutiny by Parliament, which should be making the decisions, has to be looked at in some detail.

On Amendment 62A, in the names of the noble Lords, Lord Lester and Lord Avebury, we would certainly be supportive of removing the restrictions if the interview takes place in a police station. Amendments 57A, 61A and 61B would establish limits on the duty to give information and documents that are held electronically. We have concerns about how this law is currently being applied. I note that David Anderson has also called for appropriate safeguards regarding the use and retention of such data. It would be helpful to hear from the Minister whether the Government consider that the problem is a lack of clarity in the existing law or whether further action needs to be taken.

We would also be sympathetic to Amendment 64ZA on the periodic review of an individual’s detention. I would welcome the Government’s comments on David Anderson’s recommendation that the intervals for review should be specified in the schedule, as outlined in the amendment, and not just in guidance. There can sometimes be a lack of clarity around the purpose of guidance. The importance of it being in the schedule and not just in guidance was also included in the JCHR report. The Government have indicated that they may support this, so I am optimistic about a positive response on that one.

This is quite a difficult area in which to find the appropriate balance. The House has heard about the attention to detail that has been given to this range of issues. It would be helpful if the Minister could clarify in his response the Government’s views on these issues, particularly in the light of the amendments which reflect so much of what is in David Anderson’s recommendations.

17:30

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)]

My Lords, I thank the noble Baroness, Lady Smith, for the way in which she has contributed to the debate. All noble Lords have recognised the seriousness of this issue. I understand that all noble Lords who have spoken have tried to exercise their best judgment in this particularly sensitive area. My noble friends Lady Hamwee and Lord Avebury, the noble Baroness, Lady Kennedy, and my noble friend Lord Lester—I am sure we all wish him a speedy recovery in his absence—have all raised a number of issues through their amendments.

As has been pointed out, the independent reviewer of terrorism legislation, David Anderson QC, has recently made some recommendations for further reforms to the powers contained in Schedule 7 to the Terrorism Act. These recommendations, as my right honourable friend Damian Green reported, are being considered by Ministers. We are grateful to the independent reviewer of terrorism legislation for his report.

I have to say that, as Mr Anderson has also observed, there is a limit to how far these matters can be considered before the conclusion of the judicial review proceedings in the case of David Miranda. That being the position, while I welcome the opportunity to air these important issues in debate now, I propose only to set out the Government’s preliminary view of the amendments before us today. Subject to the timing of a judgment in the Miranda case, I hope to give a more definitive view before the Bill moves on to Report—I will make sure that noble Lords are aware as soon as we are in that position.

As the noble Baroness, Lady Smith, invited me to do, I begin by touching on Amendments 56YJ and 56YK, which deal with some complex issues. The first of these is around safeguards for legally privileged and related material and the use of admissions in criminal proceedings. It is right that the Government are considering these matters and they are doing so now. There is no need for the Bill to require that consideration in future.

I would like to be clear that the current compulsion under Schedule 7 to the 2000 Act to answer questions means that admissions made in an examination would not normally be considered admissible in criminal proceedings. Both the High Court and the independent reviewer of terrorism legislation have suggested that a statutory bar be introduced to this effect, and this is something that we are examining carefully.

It is right that the independent reviewer of terrorism legislation makes recommendations, but Amendments 56YK and 100A seek to tie the hands of the Secretary of State by, in effect, requiring her to implement the recommendations of the independent reviewer. It is for the Government and Parliament to decide what legislative changes should flow from the independent reviewer’s recommendations. Given the importance of these issues, any such legislative proposals should be subject to full parliamentary scrutiny—as with the provisions in this Bill—rather than implemented through secondary legislation, as my noble friend has suggested in Amendments 56YK and 100A.

Amendments 57 and 58 deal with fundamental principles of the powers. First, Amendment 57 seeks to qualify the definition of the purpose for which these powers can be used. The legislation is already clear: they are for the purpose of determining whether a person appears to be someone who has been concerned in the commission, preparation or instigation of acts of terrorism.

The noble Baroness, Lady Kennedy, has expressed concern that the powers may be used in a discriminatory way. Accordingly, Amendment 57 also includes requirements on collecting data. Requiring examining officers to collect data on all protected characteristics from all individuals examined under Schedule 7 would be both very intrusive and extremely bureaucratic. It would also prolong the majority of examinations, of which 63% are completed within 15 minutes. There is a question as to how useful such data would be.

Direct comparison with the UK population is not really relevant here. A significant proportion of those who travel through ports are not UK residents. The use of the powers is based on the current terrorist threat to the United Kingdom, meaning that certain routes are given greater focus. Consequently, some ethnic groups may be more likely to be examined, but not because the powers are being used inappropriately. As the independent reviewer of terrorism legislation reported in his recent annual report:

“If the power is being properly exercised ... one would expect”

that those examined, in terms of breakdown, would,

“correlate not to the ethnic breakdown of the travelling population, but rather to the ethnic breakdown of the terrorist population”.

He went on:

“Police are however entitled and indeed required to exercise their Schedule 7 power in a manner aligned to the terrorist threat. As in previous years, I have seen no evidence, either at ports or from the statistics, that Schedule 7 powers are exercised in a racially discriminatory manner”

That said, we are working with the police and the Equality and Human Rights Commission to find a balance between increasing transparency without increasing the bureaucratic burden. I would also like to reassure the noble Baroness that the statutory code of practice for examining officers makes clear that someone cannot be examined based solely on their ethnicity or their religion.

The final element of Amendment 57 would remove the compulsion on individuals examined at ports and airports to provide information. This would fundamentally undermine the whole purpose of the legislation. Schedule 7 examinations have led to individuals being convicted for terrorist-related offences and have produced information which has contributed to long and complex intelligence-based counterterrorist investigations and the disruption of terrorist activity. If someone could simply refuse to answer questions, the utility of the provision would be fundamentally brought into question.

Amendment 58 seeks to introduce a reasonable suspicion test to be met before an examining officer may detain a person under Schedule 7. Again, this would undermine the capability of the police to identify individuals who are involved in terrorism as they passed through our ports and borders. Examinations are not simply about the police talking to people who they know or already suspect are involved in terrorism. They are also about talking to people travelling to and from places where terrorist activity is taking place or emerging to determine whether those individuals appear to be involved in terrorism, whether that is because they are or have been involved, are going to become involved or are at risk of becoming involved either knowingly or unknowingly.

For those reasons, I am not persuaded that it would be right to introduce a test of reasonable suspicion. I am pleased that my noble friend Lord Faulks has been able to explain that the Joint Committee on Human Rights has supported this position. However, the independent reviewer of terrorism legislation has recently recommended that detention be permitted and continue on periodic review only when an officer is satisfied that there are grounds for suspecting that the person appears to be a person concerned with terrorism. We are reflecting on this recommendation ahead of Report.

Amendments 59, 60 and 61 would further reduce the maximum period of detention. The police need time to carry out checks and questioning. The person may have a lot to say, detailed or complex questioning may be required, inconsistencies in the person’s account or documentation may need to be understood, or time may be needed to allow the person to consult privately with a legal adviser or to allow for interpretation. We are already reducing the maximum period by a third but there is a balance to be struck, and for that reason I do not believe that it should be reduced further.

Amendments 57A, 61A, 61B and 62 seek to restrict examining officers’ powers in respect of the property of people who are examined. The power to search for and examine property, including on personal electronic devices, is an essential part of the Schedule 7 powers. As the independent reviewer of terrorism legislation has observed,

“it is of vital importance that the copying and retention of data from mobile phones and other devices should be provided for by a law that is clear, accessible and foreseeable”.

New paragraph 11A of Schedule 7 to the 2000 Act, by clarifying the law, meets a requirement of the European Convention on Human Rights that interference with convention rights be in accordance with law that is adequately accessible and foreseeable. Amendment 62 would take away that clarification.

On Amendment 62A, noble Lords will understand that ports, airports and international rail terminals are quite different from police stations, and, as such, recording facilities are not always going to be available. If recording were mandatory, more individuals would be liable to being transported from the port to a police station where facilities are available, extending the duration of the examination. The questioning of any person detained for examination under Schedule 7 at a police station already falls under a code of practice for the video recording of interviews.

Amendments 63, 64 and 64ZA relate to areas where we are already introducing reforms through the Bill. While the Bill ensures that all persons detained under these powers will have a right to consult a lawyer and to have someone informed of their detention, Amendment 63 would extend those rights to everyone examined. As I have explained, some 63% of examinations last less than 15 minutes. More than 96% are concluded within an hour. Extending statutory rights to all those being examined, even briefly, would create an unnecessary burden and could well lead to longer examinations than are necessary. I would also like to remind noble Lords that the Bill already ensures that anyone examined for more than an hour must be formally detained, so there is no question of prolonged examination without these rights applying.

17:45

Amendment 64 relates to biometrics. Biometrics play an important part in establishing the identity of those travelling through the ports and in assisting the determination of those involved in terrorism. Samples are taken from less than 1% of people examined under Schedule 7. However, a small but significant number of samples have provided links to counterterrorism investigations and identified individuals using alias details. It is therefore important to retain this power. However, perhaps I can reassure my noble friend Lord Avebury that DNA and biometric material obtained under a Schedule 7 examination must be destroyed in line with the Protection of Freedoms Act 2012. If the person has not been convicted of an offence, the sample cannot be retained indefinitely. We recognise the impact that taking a sample could have on a person’s privacy and we are taking steps to limit it. I would remind the noble Baroness that the Bill will repeal the current provision in Schedule 7 to obtain intimate samples.

Finally, Amendment 64ZA would build on one of the key changes we are making in the Bill: we are introducing a statutory review of detention. We recognise the importance of clear review periods as part of the new provisions. Our intention is to address this in the code of practice for the examining officer, and this is clearly set out in the draft code we have published. However, in the light of the debate today, the Government will reflect further on whether these periods should be set out in the statute itself.

This debate has been well worth while. It has given me an opportunity to explain how the Government are responding to the independent reviewer’s report and how the Bill is moving this issue forward. I hope that I have been able to give noble Lords some reassurance on the issues raised. As I said at the start of my remarks, we continue to consider these issues in the light of the recommendations in David Anderson’s recent evidence to the Home Affairs Select Committee. That evidence was submitted only on 20 November and noble Lords would expect us to take a little time to consider our response given the sensitivity and complexity of the issues. However, above all, we are awaiting the outcome of the judicial review in the David Miranda case. We want to reflect carefully on the points made in the debate today because they have been valuable.

On that basis, I hope that my noble friend will withdraw her amendment and that the noble Baroness, Lady Kennedy, will not press her amendments in the knowledge that we will come back to this issue at Report with clarification of the Government’s position in the light of the report and the judicial review.

[Baroness Kennedy of The Shaws]

My Lords, I thank the Minister for his very considered response to the matters that have been raised. I am grateful to him for indicating that further thought will be given to some of the matters that have been part of the debate here. I know that there will be no movement on certain things, but that there might be some movement on others. On that basis, I will not press my amendment.

[Baroness Hamwee]

My Lords, I am extremely grateful to my noble friend for his very helpful response and I am glad that there will be further opportunity to discuss these things. He has given some important assurances on a number of points. My amendment 56YK was really rather tongue-in-cheek, of course. It was also a bit of a nod to my honourable friend the Member for Cambridge, who had it down in the Commons but did not really manage to speak to it. I would not subcontract such matters, but the assurances of further consideration are very helpful to hear. I have never doubted the very serious way in which the Government are considering this.

A number of noble Lords will want to take part in discussions of this on Report. In particular, the noble and learned Lord, Lord Lloyd of Berwick, was not able to stay long enough this afternoon, and I am sure that my noble friend Lord Lester will be back to discuss it. I think that I can assure the Committee that there will be a pretty substantial debate next time round. Most importantly, we will be looking at where the Government’s thinking is going before we come back onto the Floor of the House. There are clearly very important discussions to be had. On that basis, I beg leave to withdraw the amendment.

Amendment 56YJ withdrawn.

Amendment 56YK not moved.

Schedule 8: Port and border controls

Amendments 57 to 64ZA not moved.

Schedule 8 agreed.

[The Deputy Chairman of Committees (Baroness Gibson of Market Rasen) (Lab)]

We come to Amendment 64A. I call the noble Lord, Lord Taylor of Holbeach. I am sorry; I call the noble Lord, Lord Ahmad of Wimbledon.

Amendment 64A

Moved by

[Lord Ahmad of Wimbledon]

64A: After Schedule 8, insert the following new Schedule—
SchedulePowers of community support officersIntroduction1 Part 1 of Schedule 4 to the Police Reform Act 2002 (powers of community support officers) is amended as follows.
Additional powers to issue fixed penalty notices2 (1) In paragraph 1 (powers to issue fixed penalty notices), in sub-paragraph (2)(b), for the words after “in respect of an offence” there is substituted “listed in sub-paragraph (2B)”.
(2) In sub-paragraph (2) of that paragraph, after paragraph (ca) there is inserted—
“(cb) the power of an authorised officer of a borough council to give a notice under section 15 of the London Local Authorities Act 2004 in respect of an offence under section 38(1) of the London Local Authorities Act 1990 or section 27(1) of the City of Westminster Act 1999 (unlicensed street trading);”.(3) After sub-paragraph (2A) of that paragraph there is inserted—
“(2B) The offences referred to in sub-paragraph (2)(b) are—(a) an offence under section 72 of the Highway Act 1835 (riding on a footway) committed by cycling;(b) an offence under section 5(1) or 8(1) of the Road Traffic Regulation Act 1984 involving a contravention of a prohibition or restriction that relates to—(i) stopping, waiting or parking at or near a school entrance,(ii) one-way traffic on a road, or(iii) lanes or routes for use only by cycles, only by buses or only by cycles and buses;(c) an offence under section 24 of the Road Traffic Act 1988 (more than one person on a one-person bicycle);(d) an offence under section 35 of that Act (failing to comply with traffic directions) committed by the rider of a cycle;(e) an offence under section 36 of that Act (failing to comply with traffic signs) committed by the rider of a cycle who fails to comply with the indication given by a red traffic light;(f) an offence under section 42 of that Act of contravening or failing to comply with a construction or use requirement about—(i) lighting equipment or reflectors for cycles,(ii) the use on a road of a motor vehicle in a way that causes excessive noise,(iii) stopping the action of a stationary vehicle’s machinery,(iv) the use of a vehicle’s horn on a road while the vehicle is stationary or on a restricted road at night, or(v) opening a vehicle’s door on a road so as to injure or endanger a person;(g) an offence under section 163 of that Act (failing to stop vehicle or cycle when required to do so by constable or traffic officer).(4) After sub-paragraph (4) of that paragraph there is inserted—
“(5) In this paragraph “cycle” has the same meaning as in the Road Traffic Act 1988 (see section 192(1) of that Act).”Powers to issue fixed penalty notices: consultation with local authorities3 In paragraph 1, after sub-paragraph (2B) (inserted by paragraph 2(3) above) there is inserted—
“(2C) Before a chief officer of police makes a designation applying this paragraph to any person and specifying or describing an offence listed in sub-paragraph (2B)(b)(i), the officer shall consult every local authority any part of whose area lies within the officer’s police area.
(2D) In paragraph (2C) “local authority” means—
(a) in relation to England, a district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly; and(b) in relation to Wales, a county council or a county borough council.”General power of seizure4 After paragraph 2A there is inserted—
“General power of seizure2B Where a designation applies this paragraph to any person—
(a) that person shall, when lawfully on any premises in the relevant police area, have the same powers as a constable under section 19 of the 1984 Act (general powers of seizure) to seize things;(b) that person shall also have the powers of a constable to impose a requirement by virtue of subsection (4) of that section in relation to information accessible from such premises;(c) subsection (6) of that section (protection for legally privileged material from seizure) shall have effect in relation to the seizure of anything by that person by virtue of sub-paragraph (a) as it has effect in relation to the seizure of anything by a constable;(d) section 21(1) and (2) of that Act (provision of record of seizure) shall have effect in relation to the seizure of anything by that person in exercise of the power conferred on him by virtue of sub-paragraph (a) as if the references to a constable and to an officer included references to that person; and(e) sections 21(3) to (8) and 22 of that Act (access, copying and retention) shall have effect in relation to anything seized by that person in exercise of that power or taken away by him following the imposition of a requirement by virtue of sub-paragraph (b)—(i) as they have effect in relation to anything seized in exercise of the power conferred on a constable by section 19(2) or (3) of that Act or taken away by a constable following the imposition of a requirement by virtue of section 19(4) of that Act; and(ii) as if the references to a constable in subsections (3), (4) and (5) of section 21 included references to a person to whom this paragraph applies.”Powers with regard to charity collectors5 After paragraph 3A there is inserted—
“Power to require name and address etc: charity collectors3B Where a designation applies this paragraph to any person, that person shall, in the relevant police area, have the powers of a constable—
(a) under section 6 of the House to House Collections Act 1939 to require a person to give his name and address and to sign his name; and(b) under regulations under section 4 of that Act to require a person to produce his certificate of authority.”Power to stop cycles 6 In paragraph 11A (power to stop cycles), in sub-paragraph (2), for the words after “has committed an offence” there is substituted “listed in paragraph 1(2B)(a) to (e), (f)(i) or (g)”.”

[Lord Ahmad of Wimbledon]

One of the memorable parts of the Bill’s passage has been my attempts to be my noble friend Lord Taylor—which I have succeeded in doing on a number of occasions now.

We have made significant reforms to policing to enable the police to respond to the individual concerns of their communities and to give local communities direct access to engage with and challenge their local force. Community-focused policing is key to improving satisfaction rates and public perceptions of police legitimacy, as well as to reducing the fear of crime and perceptions of local disorder. Police community support officers are, of course, vital in delivering this method of policing. Taking time to engage and really get to know their communities, the problems they face and their priorities is central to building these strong links and helps to shape an effective police response.

When the Bill was considered in the other place, my honourable friend Steve Barclay, the Member for North East Cambridgeshire, highlighted inconsistencies in police community support officers’ powers. We have already taken steps to remedy the specific issue he raised by adding Clause 135 to the Bill, but we want to go further to support the important role that PCSOs play. We want to ensure that they have the necessary tools to keep the public safe and tackle the issues that really matter to the communities they serve. We believe that 18 new discretionary powers introduced by these amendments will do just that. These provisions will give chief constables greater discretion and flexibility in how they deploy police community support officers to tackle low-level crime and anti-social behaviour.

I turn first to new cycle powers. Failing to comply with road regulations can expose both cyclists and their fellow road users to danger, including pedestrians, as we sometimes see. That is why we want to do more to ensure that road safety regulations are well understood and adhered to. In addition to giving police community support officers the power to issue a fixed penalty notice for cycling without lights, the amendments will give them power to issue a fixed penalty notice for cycling through a red light, failing to comply with a traffic direction and carrying a passenger on a cycle. We believe that giving police community support officers a more comprehensive package of cycle-related powers will put them in a better position to drive improvements in cycle safety.

I turn to new traffic powers. We are introducing a new package of measures to give police community support officers additional powers to issue fixed penalty notices. These include for failing to stop for a police constable, driving the wrong way down a one-way street, sounding a horn at night, sounding a horn when stationary, not stopping the engine when stationary, causing unnecessary noise, contravening a bus lane and opening a door so as to cause injury or danger. Paddy Tipping, the police and crime commissioner for Nottinghamshire, has indicated a desire to see PCSOs tackling traffic offences. While we do not agree that they should be given the power to issue notices for more serious traffic offences, we believe that the new package I have outlined is practical at this time. I want to be clear that these measures are not intended to provide a means to pick on drivers or cyclists, or to raise revenue. Our focus is improving safety for all road users and to do that we must ensure that road regulations are respected and enforced.

A third area we are covering is parking outside schools. The power to tackle dangerous parking outside schools is an issue that has been raised in previous debates and it is something we wish to address. We know that patrolling outside schools is a core function for many PCSOs and this makes them well placed to use their engagement and problem-solving skills to educate drivers about the risks of dangerous parking. However, we recognise that, on occasions, stronger action is needed and to address this issue we are giving them the power to issue fixed penalty notices to individuals who park in restricted areas outside schools. Local authorities currently play a core role in parking enforcement and we know that a collaborative approach to tackle these types of offences is essential. We believe that chief constables should consider the role a local authority plays before making any decision to designate this power and we have therefore imposed a duty to consult within this provision.

Illegal street vendors and house-to-house collectors is another area of concern. In addition to the measures I have outlined, the amendments aim to support the role PCSOs play in promoting crime prevention and tackling anti-social behaviour issues. Illegal street vendors and bogus house-to-house collectors can cause a nuisance to communities and have a detrimental impact on those working legitimately. Tackling this type of behaviour is important. We recognise that illegal street vendors may be more common within highly populated cities and that is why we are giving PCSOs in London the power to issue a fixed penalty notice to illegal street vendors. This is in line with existing local authority powers. Giving PCSOs the power to confirm the identity of house-to-house collectors will support their role in providing community reassurance and tackling nuisance behaviour.

Finally, we will be aligning the powers of PCSOs to seize and retain material during premises searches with those of police officers. PCSOs already play an important role in supporting police officers to execute search warrants but their authority to seize material is limited. Granting PCSOs this power will free up police time by enabling PCSOs to operate more independently of police officers when carrying out this function.

We know that the public value the presence of PCSOs within the community and we have been clear that engagement is at the heart of their role. This should continue to be their core function. We believe that a distinction between the role of a constable and a PCSO should remain and that is why we have taken time to fully consider the implications of conferring the powers contained within this proposal. We are confident that they will enhance, not dilute the community engagement role of PCSOs and I commend the amendments to the Committee. I beg to move.

17:59

[Lord Rosser (Lab)]

I should like to raise one or two questions about this proposal. As the Minister has said, the role that we currently associate with police community support officers is one of public reassurance through visible street patrols and, as again the noble Lord said, through community engagement, including engaging residents more actively in local policing. Indeed, in my own personal experience, on one occasion two police community support officers knocked on my front door—fortunately they were not there to take me away—to ask me what issues, if any, were causing me concern in my own particular locality. Presumably they were doing a survey of residents’ opinions about issues of concern to them. What we now have is a list of additional powers for police community support officers to issue mainly fixed penalty notices. It could therefore be argued that these powers will put police community support officers potentially into a more confrontational position with members of the public than perhaps we normally associate with their role at present.

As I understand it, under the original terms of this Bill it had not been the Government’s intention to make considerable additions to the powers of police community support officers. Indeed, in the letter that the noble Lord, Lord Taylor of Holbeach, kindly sent to us setting out the Government’s intentions in this amendment, he referred, as has the noble Lord, Lord Ahmad of Wimbledon, to Stephen Barclay’s amendment in the other place that led to the Government tabling a new clause, which I think is Clause 135, conferring powers on police community support officers to issue fixed penalty notices for cycling without lights. As a result of that, something led the Government to say, “Let’s have a further look at what additional powers we can give to police community support officers”. We now have before us a much greater list. The original Stephen Barclay amendment was one additional power, but now we have a long list of additional powers not just affecting cyclists and not just in connection with traffic-related powers; they go further than that. One could make a case for saying that this is beginning to change the role of PCSOs.

We are not standing here opposing this, but my question is this: what led the Government to believe that the extension of powers now being proposed—in Committee stage here, the Bill having been through the other place—is appropriate when they did not believe it to be so at the time it was drawn up and when, bearing in mind the title of the Bill, we can presume that virtually all issues related to policing and the powers of the police were in fact under review and up for consideration? I would be grateful for an explanation of why this has been brought forward at this stage, but was not considered appropriate when the Bill was being drawn up. I understand that these further powers are the Government’s own view of what they want to do and are not, subject to what the noble Lord, Lord Ahmad, may say to me in response, due to any particular pressure from someone. I can see why the Stephen Barclay amendment was made. He raised and then pursued it, and obviously Government Ministers said that they would accept it and take action.

Since it appears that these additional powers have been put forward at a pretty late stage, and therefore presumably over a short timescale, who has actually been consulted on this proposed extension? Has there been wide consultation with those who might have an interest in this change of approach? Have the police themselves been pressing for this extension for some time but to no avail, and now they find that, metaphorically speaking, they have hit the jackpot, because what they have been pressing for has now been agreed at a rather late stage in the proceedings?

I am putting these points as questions for the Minister and my final question is this. Since the Government have clearly now had a look at what additional powers it would be appropriate to give police community support officers, powers that begin to change the nature of the job—the operative word is “begin”—without taking away their former functions, are the Government now going to carry out a full review of the role and responsibilities of PCSOs? I ask this because what is now in front of us gives the impression, again subject to what the noble Lord, Lord Ahmad, may say in reply, of something that has been drawn up in quite a short time and is being put forward in the Bill now when it had not been the Government’s intention to do so not very many months ago when the Bill originally arrived in the House of Commons and throughout its passage through that place.

[Lord Paddick (LD)]

My Lords, I should like to say a few words arising from my policing background and experience. I support to some extent the noble Lord, Lord Rosser, in what he said, at least initially. Police community support officers, if they have a useful role, are seen by the police as a bridge between police officers and the community. Part of the reason they are able to perform that role is that they have very limited powers when it comes to enforcement. They can be seen as friends of the community and not necessarily come into conflict with it. As we know from what happened with traffic wardens when they were introduced, they in fact became the enemies of motorists. We certainly would not want to erode the useful role that police community support officers play in terms of being friends of the community and a bridge between the community and what it increasingly sees as enforcement officers; that is, police officers.

The second issue is the need to keep a very clear distinction between police officers and police community support officers. The recruitment standards and the training that police officers receive are far higher than is the case for police community support officers, particularly in the training of police officers in the use of discretion. If we are asking police community support officers to use their discretion as to whether they issue fixed penalty notices to erring motorists or cyclists, considerably more training needs to be given to them on the circumstances in which they should use that discretion. As I say, there is a clear danger that the distinction between the police and police community support officers will be eroded if slowly but surely we give police community support officers more and more powers.

Thirdly, there is already confusion in the minds of the public as to what police community support officers can and cannot do. When police community support officers arrive at the scene of an incident, the public look to them to act as police officers would, and are surprised to find that they do not have the powers or the ability to intervene in a way that the public expect of them. Gradually giving police community support officers more powers will add to that confusion among the public.

[Lord Ahmad of Wimbledon]

My Lords, perhaps I may say first that when those PCSOs arrived at the door of the noble Lord, Lord Rosser, I am glad that they did not take him away. We would have been without his expertise and input in this Bill, so we are grateful for that. Equally, he made an important point in mentioning it. I come back to a point I made earlier: PCSOs are distinct from police officers, and I think I made that clear in my comments. What they do in terms of reassurance is something that the police themselves do. Again, speaking from my experience of working with neighbourhood teams when I was a local councillor, the police also did similar reassurance exercises.

I turn now to the specific questions that have been put to me. The noble Lord, Lord Rosser, asked why we are proposing this now. Of course, we are responding in line with the scrutiny of the Bill in the Commons. My honourable friend Stephen Barclay raised the issue, but it did go wider and beyond the specifics of his amendments. This is not something that the Government have only just thought about. I referred in my earlier comments to a Labour police and crime commissioner, Paddy Tipping, who wants us to go further. We have consulted on this and we have looked at the position with relevant experts in the field to understand the implications of the change. We have included discussions with the police at both the operational and the strategic level, the College of Policing, the partnership agencies and, indeed, national police leaders. As I said in my earlier remarks, this is about enhancing the powers of PCSOs and not about taking away from their engagement. We believe it is right that the engagement role performed by PCSOs is vital in making police accessible to all, and we do not want to overburden them with enforcement powers that would detract from that. That is why we have taken a considered position on these new packages.

The noble Lord, Lord Rosser, also asked whether we will consider more powers. These changes will mean a significant increase in the number of powers available for designation to PCSOs. That is an important distinction: this is not something that is carte blanche; it is right that the chief officers should have the freedom to take account of local circumstances and priorities when determining how their PCSOs are deployed. That will be the case in these additional powers that are being proposed. That is why we have taken the time to consider and, while we will be exploring a wider role for PCSOs, the Government believe that their particular role is being enhanced.

I hope that I have covered the specific questions asked by the noble Lord, Lord Rosser.

[Lord Rosser]

Were local authorities consulted?

[Lord Ahmad of Wimbledon]

There was not a general consultation with all local authorities but, in our consideration, as I have said, we talked to partnership agencies and national police leagues; that, of course, in some respects includes local authorities’ opinions. This is not trying to take away from local authorities: anyone who has worked at local government level knows that local authorities, the police et cetera all work in partnership in ensuring that we get the maximum level of reassurance.

I turn briefly to the points raised by my noble friend, who speaks with great expertise in this area. I would not in any sense seek to challenge that. I believe that the vital distinction remains between police officers and PCSOs. We are merely seeking to enhance the functions of PCSOs to allow them to engage more effectively in the community and to address the very issues he has raised about their effectiveness when they arrive at a particular point. Our proposals are a proportionate response to what is needed. It will help in community engagement and effective enforcement in respect of some of the lower-level issues that are raised. Neighbourhood policing will be in a better place for that. I beg to move.

Amendment 64A agreed.

Clauses 133 and 134 agreed.

Clause 135: Power of community support officer to issue fixed penalty notice for cycle light offence

Amendment 64B

Moved by

[Lord Taylor of Holbeach]

64B: Clause 135, leave out Clause 135 and insert the following new Clause—
“Powers of community support officers
Schedule (Powers of community support officers) (which amends Part 1 of Schedule 4 to the Police Reform Act 2002) has effect.”

Amendment 64B agreed.

Clause 135, as amended, agreed.

18:15

Amendment 64C

Moved by

[Lord Rosser]

64C: After Clause 135, insert the following new Clause—
“Long-term police authorisation requiring independent approval
(1) The Regulation of Investigatory Powers Act 2000 is amended as follows.
(2) After section 32A (authorisations requiring judicial approval) insert—
“32AA Long-term police authorisations requiring independent approval
(1) This section applies where a relevant person has granted a long-term authorisation under section 29.
(2) The authorisation is not to take effect until such time (if any) as the relevant independent body has made an order approving the grant of the authorisation.
(3) The relevant independent body may give approval under this section to the granting of an authorisation under section 29 if, and only if, the relevant independent body is satisfied that—
(a) at the time of the grant—(i) there were reasonable grounds for believing that the requirements of section 29(2), and any requirements imposed by virtue of section 29(7)(b) are satisfied in relation to that authorisation, and(ii) the relevant conditions were satisfied in relation to that authorisation, and(b) at the time when the relevant independent body is considering the matter, there remain reasonable grounds for believing that the requirements of section 29(2), and any requirements imposed by virtue of section 29(7)(b) are satisfied in relation to that authorisation. (4) For the purposes of subsection (3), the relevant conditions in relation to a grant by an individual holding an office, rank or position in a relevant law enforcement agency, that—
(a) the individual was a designated person for the purposes of section 29,(b) the grant of an authorisation was not in breach of any prohibition imposed by virtue of section 29(7)(a) or any restriction imposed by virtue of section 30(3), and(c) any other conditions that may be provided for by the Secretary of State were satisfied.(5) In this section—
“relevant law enforcement authority” means—
(a) a police force in the United Kingdom, and(b) the National Crime Agency;“relevant judicial authority” means—
(a) in relation to England and Wales, the High Court of Justice in England and Wales,(b) in relation to Scotland, the Court of Session, and(c) in relation to Northern Ireland, the High Court of Justice in Northern Ireland;“relevant person” means—
(a) an individual holding an office, rank or position in a police force in the United Kingdom, and(b) an individual holding an office, rank or position in the National Crime Agency.(6) In this section—
“relevant independent body” must be set out by the Home Secretary in a motion passed by both Houses of Parliament before this section is enacted;
“long-term” must be set out by the Home Secretary in a motion passed by both Houses of Parliament before this section is enacted.””

[Lord Rosser]

We indicated at Second Reading that we intended to propose a new clause on this issue since it was clear that action had to be taken to address how covert policing operations were authorised and managed. Of course, we support undercover policing, since such operations are a vital part of the fight against organised crime and terrorism and are essential in keeping communities safe. We recognise the dedication and bravery of those officers who undertake this work. However, any such operations must be subject to the highest ethical and operational standards. That is essential for both their operational effectiveness and public confidence. Our amendment today, therefore, seeks to deal with the issue of accountability.

There are two cases that highlight how important it is that changes of the kind that we are proposing are made. The first is the case of Mark Kennedy who, as a police officer, infiltrated—I think that is the word—protest groups over a period of years: groups which said that they were involved in lawful demonstrations, rather than crime. The former policeman, it appears, had relationships with women in the protest movement and travelled to eco-protests across Europe. He later told a Channel 4 documentary of his remorse, including his regrets about and feelings for a woman with whom he had had a long affair. HMIC reviewed the activities of Mark Kennedy and other undercover officers and stated that his actions had led to the collapse of a trial of environmental protesters and that he had “defied” management instructions. The report found that Mr Kennedy had helped to unearth “serious criminality”. However, Mr Kennedy said that, while the subject had never been broached directly, it was “impossible” that his superiors had not known he was having a sexual relationship with some protesters. The report suggested that an independent body might be required to authorise such undercover operations. It also said that Mr Kennedy was inadequately supervised and that oversight of undercover officers needed to be strengthened.

The second case is that of the Lawrence family. Twenty years ago, Stephen Lawrence was murdered at the age of 18. He was, of course, the son of Neville and Doreen, who is now my noble friend Lady Lawrence of Clarendon, a Member of your Lordships’ House. Stephen was cruelly murdered by racists and there was evidence of racism in the way the police inquiry was conducted. Serious allegations have now been made that the police spied on the Lawrence family with a view to discrediting them. Peter Francis, a former undercover police officer and a member of the somewhat controversial Special Demonstration Squad, has spoken of his activities as part of an operation to spy on and attempt to smear the Lawrence family.

These two cases and other incidents have led to serious concerns about the accountability of the undercover police operations that were undertaken and raised questions about the accountability of future undercover police operations. Our amendment seeks to ensure that all long-term undercover operations are signed off by a relevant independent body, to ensure that, where needed, covert operations are used proportionately, sensitively, only when necessary and with clear and improved accountability arrangements. Additionally, we do not currently have effective oversight of these operations. There are various options we can explore and we hope that the Government will look at these options carefully. Judicial oversight is just one that could be considered.

There also appears to be an anomaly, because currently, if the police or security services want to enter—perhaps to break in, to bug a room or to intercept a phone call—they need justification that to do so is in the interests of national security in order to get a warrant. Attaining a warrant requires judicial approval. However, those undercover police officers who entered into relationships in an attempt to retrieve certain information needed no warrant.

Of course—and we appreciate this—undercover operations vary. Some will be as short as an hour or so and may involve relatively minor matters; it would be impractical to ask for independent approval for all such operations. However, our proposed new clause is intended to target long-term covert police operations, and these can span from six months to 12 months or even several years. When such operations are undertaken, there needs to be clarity about the goals, the methods and the priorities. Therefore, there should be independent approval prior to any such lengthy operation. It does not necessarily have to come from a judge, but it must be truly independent, and the very process of seeking such approval would help to ensure proportionality, and clarity of objectives and methods. Our proposed new clause would help to ensure that operations such as the hugely inappropriate and totally wrong campaign against the Lawrence family cannot take place again. That campaign and operation against the Lawrence family showed appallingly bad judgment. Surely, we all want to ensure that any operation undertaken is accountable, justifiable and in the wider public interest.

On Report in the other place, the Minister Damian Green stated that it was the Government’s,

“intention to legislate to enhance oversight of undercover law enforcement officer deployments”,

and this could,

“be done through secondary legislation”.

He outlined the Government’s proposals to increase accountability and oversight. However, proper scrutiny is necessary and we need the opportunity to scrutinise those proposals as part of this Bill. Damian Green promised in the House of Commons that he would,

“lay the appropriate order before the House shortly”.—[Official Report, Commons, 15/10/13; col. 634]

As I understand it, we have not yet seen the order, although I may be wrong in saying that. However, we feel that it would be much better to deal with an issue of this importance in what the Government regard as a flagship Bill on crime and policing. I hope the Minister, when he replies, will be able to give a helpful response.

[Lord Taylor of Holbeach]

My Lords, I am very grateful to the noble Lord, Lord Rosser, for tabling this amendment because I agree with him that the whole question of undercover policing is very important. I do not think that any noble Lord should be in doubt that covert techniques, including undercover policing, are an important weapon in the fight against terrorism and other serious and organised crime. Undercover police officers play a crucial role in keeping us all safe. It is difficult and dangerous work and I welcome this opportunity to pay tribute to all who undertake it.

The new clause proposed by the noble Lord seeks to introduce a system of independent authorisation for undercover policing operations. I do not believe there is any great difference of view between the noble Lord and me on this point. We both believe that there must be proper safeguards to ensure that these covert techniques are used only where appropriate and that the mechanisms for approving all such deployments are fit for purpose. However, I hope that it will help noble Lords if I set out why I do not believe that this amendment is required, not least because the Government have already instigated changes that are designed to meet the concerns that have arisen in the light of some allegations of past misconduct, which were sympathetically described by the noble Lord, Lord Rosser.

Undercover deployments are authorised under the Regulation of Investigatory Powers Act 2000, commonly known as RIPA, which stipulates that the use of an undercover deployment can be authorised only at a senior level within the police force or other law enforcement agency concerned. In giving an authorisation, the authorising officer must balance the seriousness of the crime being investigated, and the value of the evidence likely to be gathered, against the right to privacy of the person under investigation and of those others who are likely to have their privacy intruded upon, such as family, friends and other associates.

Her Majesty’s Inspectorate of Constabulary conducted a rigorous and independent review of undercover policing last year and made a number of recommendations to improve the way authorisations and deployments are made. Earlier this year, the inspectorate reported on the progress made in implementing its 2012 report and was generally positive about the work already done. The noble Lord referred to the role played by my ministerial colleague, the Minister for Policing, Criminal Justice and Victims, the right honourable Damian Green, who announced to the Home Affairs Select Committee our intention to strengthen this regime to enhance oversight of undercover law enforcement officer deployments. I am pleased to say that the order to give effect to this commitment was laid in October and is due to take effect on 1 January next year.

I will set out the effect of the changes that the Government are bringing forward. First, law enforcement agencies will need to notify the surveillance commissioners —all retired judges—of undercover deployments. In practice, what will happen is that a surveillance commissioner will see the same papers that were presented to the authorising officer and will have the opportunity to raise any concerns. Noble Lords will appreciate that most deployments are short-term in nature and, in many cases, last no more than a few hours. However, some are long-term, and these may give rise to the greatest concern. Initial authorisations last for a maximum of 12 months. Accordingly, the second change we are putting in place is that an authorisation can be renewed beyond 12 months only with the prior approval of a surveillance commissioner—who, I remind your Lordships, is someone who has held a senior judicial office.

In addition, we are increasing the rank of the authorising officer. Deployments of undercover law enforcement officers will henceforth need to be authorised at assistant chief constable level or equivalent. Any deployments lasting longer than 12 months will be authorised by a chief constable or equivalent, as well as by a surveillance commissioner, as I have already explained. The seniority of those who will now be required to authorise these deployments is an indication of how seriously the Government take proper oversight of undercover law enforcement activity. We believe that these changes will promote the highest standards of professionalism and excellence in this most sensitive area of policing. We also believe that they will achieve the aims of this proposed new clause by ensuring judicial scrutiny of long-term deployments while preserving the flexibility of law enforcement agencies to act swiftly where necessary.

Covert activity is a necessary part of the armoury of law enforcement but it is absolutely right, as is the intention behind this amendment, that it must be properly controlled and regulated. That is why the Government are making the changes that I have described. In the light of these changes and the new regime that we are now putting in place, I do not believe that this amendment is required and I hope the noble Lord will withdraw it.

[Lord Rosser]

I shall of course withdraw the amendment but, before I do, I have one question for the noble Lord. Does the proposal that is to be implemented in relation to the role of the surveillance commissioners also include, for particularly lengthy covert operations lasting many months, any sort of regular oversight of the operation by the surveillance commissioners, or is it a case of getting their approval beforehand and, once that prior approval has been given, that is the end of the independent oversight?

[Lord Taylor of Holbeach]

The prior approval is of course designed to make sure that there is no extension without the surveillance commissioner being a party to the decision. I cannot give the noble Lord a clear answer on this but I would suspect that the surveillance commissioner could make his approval dependent on an update at some point during the extended 12-month period. I will write to the noble Lord and give him some indication of how this would operate. I understand entirely what he is getting at and am quite happy to investigate and provide that to him.

[Lord Rosser]

I thank the noble Lord for his reply and for his offer to write to me on the issue that I have just raised. I will obviously want to reflect on the reply that we have received but I beg leave to withdraw the amendment.

Amendment 64C withdrawn.

Clause 136 agreed.

Clause 137: Extradition barred if no prosecution decision in requesting territory

Amendment 65

Moved by

[Lord Hodgson of Astley Abbotts]

65: Clause 137, page 104, line 20, leave out “prosecution decision” and insert “decision to try”

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, in moving Amendment 65, I will speak at the same time to Amendments 66 to 75. With this group, we come to Part 12 of the Bill, which is concerned with extradition. As this is the first time I have spoken at this stage of the Bill, I need to remind the Committee of my interest as a trustee of Fair Trials International. I am very grateful to that organisation for many of the real-life examples that underlie the amendments that I shall move to this part of the Bill in the next hour or so. I also acknowledge the help that I have had from Justice and several other interested parties.

18:30

I spoke about my general concerns about Part 12 at Second Reading and I do not wish to make a Second Reading speech tonight. But I hope that the Committee will forgive me if on this first group of amendments I explain some of the more detailed background factors that underlie my concerns and that have led to my tabling these amendments. They are the framework into which the seven groups of specific amendments that follow will fit, like pieces in a jigsaw.

These amendments are concerned with what is known as a Part 1 warrant, more familiarly known as a European arrest warrant, or an EAW. While the EAW has had some undoubted successes, there have been concerns about its practical application. To their credit, the Government asked Sir Scott Baker to undertake a review of the country’s general extradition arrangements, including specifically the operation of the EAW. Sir Scott Baker produced a report containing a set of recommendations. To their credit, the Government accepted some of them and to their additional credit they have gone beyond Sir Scott Baker’s recommendations in certain areas, such as the introduction of a forum bar. However, the Government did not accept all the Baker proposals and meanwhile the continuing operation of the EAW has led to further concerns about the way in which it is being practically applied.

A few minutes ago I referred to the successes of the EAW. It is incontrovertible that it has led to some very nasty people being returned to face justice in EU member states far faster than was possible under the legislation prevailing before the EAW was introduced. Nowhere is this more important and relevant than in this country’s relationship with the Republic of Ireland and its implication for the border in Northern Ireland. No doubt that is why the Government, having exercised their general opt-out over justice and security under the Lisbon treaty, have decided to opt back into the EAW directives, a decision I strongly support.

Understandably, governments of every persuasion have focused on the achievements that concern terrorists, serious criminals, paedophiles and so on. The overwhelming majority of our fellow citizens who become involved with the EAW do not fall into these high-profile categories. As I will attempt to illustrate with real-life examples, too often they concern what Edmund Burke called the “little platoons”: people who are caught up in a process that their knowledge, experience and contacts—unlike, for example, Members of your Lordships’ House—do not equip them to challenge.

What is the scale of this issue? Every day, about four of our fellow citizens are served with an EAW, and about three of these will be surrendered. It is with this group in mind that I have tabled these amendments. If we are to deprive one of our fellow citizens of his or her liberty and hand him or her over to another state for trial and possible imprisonment, which by any yardstick is a very fundamental decision, we need to be sure that the appropriate level of safeguards is in place. While safeguards undoubtedly exist, they do not yet provide a sufficiently balanced position. As many noble Lords are aware, I am not a lawyer, so some of my arguments may seem to those Members in your Lordships’ House who are learned in the law to be legally clumsy. On this occasion, I am afraid that I am the man on the Clapham omnibus, or at least the man in the saloon bar of the Dog and Duck.

In so far as the man on the Clapham omnibus is concerned about these matters he is reassured by the fact that there are two hearings before British judges as part of the EAW process. He has a touching faith in the British judicial system. Unfortunately, in large measure this confidence is misplaced, because the hands of a British judge, in hearing an EAW, are substantially tied. The first hearing that takes place within 48 hours of arrest is essentially entirely procedural: it concerns issues of identity and whether the person arrested is the right one, a point I shall return to in the debate on my Amendment 94. It sets the date for the second hearing, normally within 21 days, and it decides whether to remand a person in custody or on bail, or to accept surrender if the person accepts the charge.

The second hearing is also highly restricted on the matters that the judge can take into account in determining whether the warrant should be executed. Here, there are some technical issues including double jeopardy and specialty, considerations of age and passage of time since the alleged offence was committed, and concerns about the physical and mental condition of the subjected person. What is not discussed are the facts of the case. So in as little as 35 days a person can be on their way to another jurisdiction, with all that that means for their family, their employment and indeed their whole life. In short, that is why I believe that proper safeguards need to be in place.

As I said at Second Reading, similar amendments were tabled at the Committee stage of this Bill in the other place. Not one was debated, because of the operation of the guillotine. Procedurally, the Government should have the chance to explain their thinking on this important issue of public policy.

With that perhaps overelaborate explanation of the background to my amendments I turn to the substance of this first group. As can be seen from the wording, Amendments 65, 66 and 67 seek simply to change the words “prosecution decision” to “decision to try” in that part of Clause 137 entitled “Absence of prosecution decision”. Amendments 70, 73, 74 and 75 are consequential amendments to the later parts of the clause.

This group brings us to an important issue raised by the different nature of the UK’s judicial system from most of those of our European partners. Along with Ireland and Malta, this country has a common law system, with a familiar adversarial judicial system where prosecution and defence parade their arguments before a judge and jury for them to determine. Other European states have an investigative system. This is not better or worse; it is just different. It does mean, however, that a decision to prosecute can mean a decision to continue to collect evidence that may or may not lead to a trial.

The current drafting is ambiguous and could be interpreted as allowing the execution of an EAW where a decision to prosecute has been taken, but a decision to try has not been. I am aware that under Section 2 of the 2003 Act and Article 1.1 of the EAW framework decision, an EAW is defined as a decision issued for the purpose of prosecution. However, I argue that the test for execution of an EAW should be whether the case is trial-ready in the issuing state. Concerns have been consistently raised about the lengthy pre-trial detention of those extradited prematurely as a result of EAWs being issued before the case is trial-ready.

A well known case is that of Andrew Symeou, a British student who was extradited to Greece in July 2009 to face charges in connection with the death of a young man on a Greek island. Andrew was extradited long before the Greek court was ready to try him and endured a year in appalling prison conditions before being granted local bail in Greece. Andrew was finally cleared by a Greek court in June 2011, almost four years after the events in question, during which time he had not been able to continue his university studies and his family had had their lives turned upside down. The fact that a decision is taken at some stage to charge may mean that the issuing state intends to proceed to trial, but as Andrew’s case showed, what matters is whether the issuing state is ready to do so. Accordingly, these amendments set the test for executing the EAW as trial-ready.

Amendments 68 and 71 address the problem of too-early extradition by putting pressure on the requesting state to make use of other less disruptive measures, such as videoconferencing and temporary transfers. These amendments would ensure that the issuing state could not rely on its own refusal to use alternative arrangements, such as videolinks or temporary transfers, to justify extraditing the person in order to charge them. I have already referred to the different legal investigative and adversarial approaches. The Government’s objective in the proposed Section 12A(1)(a)(ii) and 12A(1)(b)(ii) is to cater for the situation in which a decision has not been made formally to charge the person, but only because their presence is required in order to do so. In some countries, such as Sweden, it is a basic defence right for the person to be charged in person. Thus the English and Irish courts have accepted that an EAW issued in such cases can nevertheless be considered to be for prosecution even though it may include a decision to charge taken in the future. However, I repeat that one of the dangers of the EAW system is that people may be extradited too early in the process, when the case is not trial-ready, resulting in prolonged pre-trial detention and uncertainty.

I have already mentioned Andrew Symeou. Equally, Michael Turner was extradited to Hungary in November 2009 and was held in a high-security prison for four months before being allowed to return home. He then had to bear the cost of repeated trips to Hungary while the case was investigated further. He was finally tried in October 2012, three years later.

The issuing authority might legitimately insist that the person be present in order to be charged but I am concerned that this might simply begin a protracted process between charge and trial. In these circumstances, the use of a temporary transfer under proposed new Section 21B would be more appropriate, enabling the person to attend and be charged and then return to UK while the case is readied for trial. Equally, if the law of the issuing state allows the remote attendance of a suspect using video technology, and this does not risk prejudicing the suspect by reason of poor quality or lack of recording, this option should be used. These amendments allow the judge to refuse extradition where the issuing state unreasonably refuses to consent to use either method.

Amendment 72 requires the judge to consider external evidence when determining whether there are “reasonable grounds” to believe that no decision has been taken to charge or try the person wanted on an accusation EAW. Section 2(3) of the 2003 Act already requires the Part 1 warrant to contain the statement that the person is accused of the offence, and it is possible to raise the issue of whether the EAW has been issued as an aid to investigation. However, at present the courts will assume that if the EAW contains the statement in Section 2(3) of the 2003 Act that the person is accused, and is unambiguous in this wording, this correctly reflects the state of proceedings and external evidence will not normally be taken into account.

This approach is based on the mutual trust that needs to exist between judicial authorities, and the need to ensure that proceedings are swift and uncomplicated. There are concerns that under the current drafting of proposed new Section 12A no change to existing practice will result. It may be difficult for the requested person to establish that there are reasonable grounds for believing that no decision to prosecute has been taken if the EAW states unambiguously that the person is the accused and that the EAW was issued for the purpose of prosecution. In order to fulfil the intention behind the amendment, it should be specified that the judge should take into account external evidence, which might include documents from the case file or expert evidence on the state of the proceedings in the requesting state. The judge should also have sufficiently broad direction to be able to take into account evidence such as the past record of issuing states in this regard, as evidenced by other documented cases involving the same country.

To conclude, the Government’s proposed amendment of Section 11 of the Extradition Act by referring to a “prosecution decision” in Clause 137(1) has moved the game on, and I am grateful for that. But for the reasons explained, I do not think it goes far enough. In this very critical area, the decision to try must surely be the gold standard and these amendments will ensure this. I beg to move.

[Lord Faulks]

My Lords, I will add just a few comments to the excellent and clear introduction of these amendments by my noble friend Lord Hodgson. He stressed the importance of the matter being trial-ready before extradition takes place, and quite rightly drew a distinction between the adversarial system, which prevails here, and systems elsewhere of a more inquisitorial nature.

Of course, if somebody is awaiting trial here, the question of bail becomes highly relevant before a judge. Indeed, a judge will be able to exercise some pressure on prosecuting authorities to get on with it, in order to ensure that somebody is not kept in custody for too long. That becomes impossible once somebody has been extradited. The matter is then in the control of the local court, and there may be just the sort of delay described by my noble friend in the case of Symeou; not only was he in Greece for a very long time but when he was granted bail it was so-called local bail, which is not the same as being granted bail in your own country, because of all the compromises that have to be made in terms of work and family life.

As my noble friend acknowledged, the Government have responded to the Baker review but there is still anxiety, as he has so skilfully pointed out.

18:45

[Lord Taylor of Holbeach]

My Lords, I am grateful to my noble friend Lord Hodgson for giving us a chance to debate these issues. He has tabled a number of amendments—some in this group and some to follow—and it was good that he was able to put the different groups in context of the overall value of the European arrest warrant. The Government attach great value to this facility but are seeking to improve its operation by provisions in the Bill.

As the Committee will be aware, the Home Secretary announced in July that she would introduce legislation to reform the operation of the European arrest warrant in the UK and increase the protections offered to those wanted for extradition, particularly British citizens. My noble friend has drawn attention to circumstances in which the system did not operate as we would have wished. His amendments would revise the resulting provisions in the Bill.

Clause 137 will require the UK courts to bar surrender of the requested person where the issuing state has not taken both a decision to charge and a decision to try the person, except where the sole reason that such decisions have not been taken is that the person’s presence in the country is required in order for those decisions to be taken. This will have the same effect as that intended by my noble friend’s Amendments 65 to 67, 69 and 70 and 73 to 75; that is, a person will not be surrendered before the issuing state is ready to try the person. However, the clause has the added benefit of requiring the issuing state to prove that both a decision to charge and a decision to try the person have been made, if the judge has any doubt that either—or both—of those decisions has been taken. This provides greater protection for the requested person.

I can also reassure noble Lords that when deciding whether there are reasonable grounds for believing that the issuing state has not taken these decisions, the judge can consider any factors or external evidence that could inform his or her decision. We do not believe it is necessary to set this out in explicit terms, as Amendment 72 would.

Finally, Amendments 68 and 71 seek to add a further restriction, so that extradition could not occur where the person’s presence was required in the issuing state for the required decisions to be made, if that could have been achieved by temporary transfer or video-conferencing. I understand my noble friend’s concern about the need for safeguards. However, I do not believe that this additional restriction is necessary. As I have explained, Clause 137 already ensures that extradition cannot occur in the early stages of an investigation when the issuing state is nowhere near a decision to try.

In addition, if the judge is satisfied that the sole reason that a decision to charge and a decision to try have not been taken is the fact that the person is absent from the issuing state, there is no reason why the person should not be extradited so that those decisions can be taken and the case proceed to trial. In these circumstances, requiring temporary transfer simply to charge does not seem to us to achieve anything in terms of safeguards and seems unnecessary.

Having heard these explanations and assurances and the explanation of how Clause 137 is designed to meet my noble friend’s concerns, I hope he will be able to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

I am grateful to my noble friend for that full and very considered response. We are, of course, going around the track for the first time today and I have some difficulty understanding the conflation of prosecution charge and try and the interpretation of Clause 137 in which I think he said—I hope I have quoted him right—that the judge can consider any external factor. Certainly the advice I have received is that that is far from the case, that the judge’s hands remain very carefully circumscribed and tied and that the judge would not have the width and breadth of discretion that my noble friend’s remarks suggested. It would be helpful if one could read in some detail what he had to say, as it is obviously highly complicated and technical, and then see whether expert external advice believes that the extraordinarily plausible answer he gave actually holds up when we come to discuss it further. I beg leave to withdraw.

Amendment 65 withdrawn.

Amendments 66 to 75 not moved.

Clause 137 agreed.

Clause 138: Proportionality

Amendment 76

Moved by

[Lord Hodgson of Astley Abbotts]

76: Clause 138, page 105, line 23, leave out from “proportionality” to end of line 24

[Lord Hodgson of Astley Abbotts]

My Lords, I will speak also to Amendment 78. These amendments expand the issues a judge can consider in testing the proportionality of a European arrest warrant. Amendment 76 deletes the words,

“but the judge must not take any other matters into account”.

Amendment 78 extends judicial discretion as regards proportionality by a list of factors, including the cost of extradition, the consequences of extradition for the suspect and the public interest aspect.

Under the Bill, the judge must have regard to the specified matters relating to proportionality so far as he or she thinks it appropriate to do so, but must not take other matters into account. Thus, the judge is limited to the three specified matters but has discretion to ignore them. As a starting point, I would like the Government to justify why a judge should be able to ignore factors that will always be germane to the issue of proportionality. If an offence is serious, extradition is more likely to be proportionate but that does not mean that the proportionality test has no place in serious crimes. Amendment 76 therefore removes the discretion to ignore relevant factors.

Under the proposed test, the judge can take into account just three factors but it is unclear how they are supposed to relate to each other. In any case, the current list of specified matters does not allow a useful proportionality analysis. As drafted, the judge would be able to take into account the seriousness of the offence and the anticipated sentence, but since regard cannot be had to any other matter, the judge cannot balance these against the relevant considerations. For example, it is difficult to see how the judge can decide whether a less serious offence would make extradition disproportionate if the judge cannot also take into account the implication of extradition in terms of the human impact or, indeed, the costs for the UK taxpayer. The financial costs of extradition are high. The Government estimate that the execution of each EAW costs on average £20,000. In addition, the human impact of extradition can extremely severe. Recent cases under Article 8 of the ECHR have shown that the extradition of single parents can drastically disrupt the development of their children. There was the judgment of Lady Hale in HH v Deputy Prosecutor of the Italian Republic in 2012.

Recognising the need for proportionality checks on the operation of the EAW, the European Commission recognised that the issue was with,

“very minor offences which do not justify the measures and cooperation which execution of an EAW involves”,

and that there is a,

“disproportionate effect on the liberty and freedom of requested persons”,

when the EAW is used in such cases.

The point of a proportionality test should be to determine whether, on a case-by-case basis, the human and material costs are justified. Indeed, the Council of the European Union’s handbook on how to issue an EAW is 125 pages long and explains that,

“considering the severe consequences of the execution of an EAW with regard to restrictions on physical freedom and the free movement of the requested person, the competent authorities should, before deciding to issue a warrant consider proportionality by assessing a number of important factors. In particular these will include an assessment of the seriousness of the offence, the possibility of the suspect being detained, and the likely penalty imposed if the person sought is found guilty of the alleged offence”.

The Bill excludes a balancing exercise that takes into account all these relevant factors.

These amendments therefore provide the judge with sufficient discretion to consider these key factors and others, including the passage of time, since prolonged delays in prosecuting an offence and issuing an EAW may provide evidence of its very low level of seriousness, and the public interest in extradition, since this will vary in line with the seriousness of the offence. Other factors might include, for instance, the person’s conduct, in particular, whether they absconded in order to evade prosecution or left the issuing state unaware that they were being pursued.

I recognise that this will call for a case-by-case test and a fact-sensitive assessment. However, this need not affect the length or complexity of EAW proceedings. An issue raised in relation to human impact would in any event have to be considered under Article 8 of the ECHR. Under the operation envisaged by these amendments, the factors considered under Article 8 of the ECHR will be considered as part of the statutory proportionality test but alongside the cost of extradition to the United Kingdom and having greater regard to the seriousness of the extradition offence. Indeed, under the Government’s proposal, it can be argued that there will often have to be two separate proportionality analyses—one under the statutory test, excluding anything to do with family life, and another under Article 8 of the ECHR, potentially resulting in confusion and complication. Unifying the two tests, as would be achieved by these amendments, would, if anything, simplifying proceedings. I beg to move.

[Lord Faulks]

My Lords, Clause 138, “Proportionality”, will not be an easy one for a judge to interpret, as my noble friend has outlined. The question of proportionality under the Human Rights Act 1998 is one matter and then there is the statutory proportionality, which apparently is to be restricted to certain specific matters mentioned in subsections (2) and (3) of the new Section 21A that Clause 138 inserts into the Extradition Act 2003. I respectfully ask the Minister to explain why it is so necessary to distinguish between the two types of proportionality. Proportionality is a fundamental principle in EU law and, in particular, under the Human Rights Act. I suggest there is scope for confusion and therefore possible litigation if a judge misdirects himself or herself in applying proportionality in one sense and not in another.

19:00

[Lord Taylor of Holbeach]

My Lords, as my noble friend Lord Faulks has just said, Clause 138 is dedicated to addressing this issue and bringing the fundamental concept of proportionality into extradition matters. Much of what my noble friend Lord Hodgson of Astley Abbots proposes has already been included within the Extradition Act 2003, as it will be amended by the Bill.

It is important to recognise that the judge will consider proportionality in addition to the existing bars to extradition, such as the passage of time and human rights considerations, including any impact on family and private life. Consequently, new paragraphs (d) and (e) as provided for in Amendment 78, which seek to merge these existing considerations into the proportionality bar, are unnecessary and would have little practical impact.

Turning to the proposed new paragraphs (f) and (g), which relate to the cost of proceedings in the UK and the duration and cost of proceedings in the issuing state, I do not believe that those considerations are relevant. The proportionality bar is designed to provide additional protection to those whose extradition is sought. It is appropriate that the matters concerned should relate to the alleged crime and the potential impact on the person concerned. Of course, costs are an issue for us all, and that is why the totality of our proposals is designed to improve the workings of the Extradition Act, including reducing unnecessary delays. However, costs to the UK arising from the extradition process should not mean a denial of justice where it is right that a person is extradited. On new paragraph (g), the costs and the duration of proceedings in the issuing state are a matter for the issuing state.

New paragraph (h) would require a consideration of the public interest. That is implicit in any consideration of extradition by the courts, which look at a range of factors alongside the proportionality bar. Taken together, the statutory bars to extradition provide a broad public interest test, so it is not necessary to include a separate test here in the Bill.

Finally, new paragraph (i), which refers to other matters that the judge believes relevant, is too open-ended and leaves too many issues that could be considered. It could lead to duplication and potential delay as a result of proportionality considerations overlapping with other considerations. My noble friend Lord Faulks talked about the complexity of these issues and the opportunity that he believed the provisions give for judicial consideration, deliberation and challenges. I think that the proposals in the amendment would complicate the matter further. I must emphasise that the proportionality bar is one among a number which must be considered already, not least whether extradition would be compatible with the requested person’s human rights.

Let me assure my noble friend that, in addition to the provisions in Clause 138, we will also take a more pragmatic approach to our administrative processes when an EAW is received. This will ensure that the most trivial requests are identified and, where appropriate, dealt with administratively before even getting to the courts. The aim will be to work practically with other member states to identify alternative solutions for trivial requests.

My noble friend Lord Faulks asked: why not merge proportionality and human rights? The proportionality bar deals specifically with the proportionality of extradition as a way to deal with the conduct alleged. Proportionality is indeed a factor when considering interferences with various rights under the ECHR, but it is considered when examining the specific rights one at a time. Our bar adds to that, but deals with the wider issue of human rights within the EAW.

I hope that both my noble friends are happy with the reassurances that I have given them and that my noble friend Lord Hodgson of Astley Abbots will be content to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

I am grateful to my noble friend. He rightly chided me about the list of matters in Amendment 78 and the wide-ranging nature of my proposed new paragraph (i), which would insert the text,

“any other matter which the judge considers relevant”.

Although I entirely accept that, I do not understand why three matters are chosen in subsection (3) and why a judge must not take any other matters into account. That seems to me to be erring on the other side of the argument. I hope that he will forgive me if I say that, when I hear Ministers say, “We should be pragmatic about this”, it does not reassure me, because in this area, where we are dealing with people’s liberty and livelihoods, pragmatism can go awry.

[Lord Taylor of Holbeach]

I understand the complexity of the issues that my noble friend is attempting to address in the amendments. If he feels it helpful for me to write a fuller explanation than I am able to give the Committee today, I would be very happy to do so. It may be easier if I do that; I hope that my noble friend will accept that.

[Lord Hodgson of Astley Abbotts]

Of course I would be delighted to receive a letter from my noble friend. That would also enable me to reflect fully on what has been said, take expert advice on the technical matters which we are discussing this evening and decide whether to take the matter further. In the mean time, I beg leave to withdraw the amendment.

Amendment 76 withdrawn.

Amendment 77

Moved by

[Lord Hodgson of Astley Abbotts]

77: Clause 138, page 105, line 30, leave out “possibility of the relevant foreign authorities taking” and insert “availability, to the relevant foreign authorities, of”

[Lord Hodgson of Astley Abbotts]

My Lords, in moving Amendment 77, I shall also speak to Amendments 79, 80, 81 and 87. This set of amendments keeps us in the area we have just been talking about: one of the three specified matters. The amendments emphasise the importance of less coercive, less disruptive measures than a full European arrest warrant. Where a state issuing an EAW refuses to use them, the judge could take that refusal into account before granting an EAW.

New subsection (3)(c), which sets out the third of the three matters we have just been discussing, currently reads,

“the possibility of the relevant foreign authorities taking measures that would be less coercive”.

Amendment 77 replaces “possibility of”—a pretty low test, in my view—with “availability of”. Amendments 80 and 81 are essentially consequential.

The assumption underlying the provision relating to less coercive measures is that the severely restrictive measure of extradition, involving deprivation of liberty and the physical transport of a person away from home and family, should be used only as a last resort. The issuing state should therefore use that mechanism only when other, less restrictive measures are unavailable. If other such measures are available—for instance, because of the existence of mutual legal assistance mechanisms or, once it is negotiated, the European investigation order—extradition should be refused if they have not been used. The reference to the possibility of using such alternative measures may result in an issuing state avoiding their use due to a lack of resources and/or bureaucratic difficulties in liaison between the competent authorities of the issuing state and the judicial authority that issued the EAW.

I argue that, although the EAW system provides for extradition between judicial authorities, the physical transfer of a person under an EAW is still a process between two EU member states which are, as a whole, bound to observe the principle of proportionality. All their authorities, such as ministries of justice or the interior—where these are responsible for mutual legal assistance requests—should, therefore, be jointly expected to search for alternative solutions before choosing the heavy-handed option of extradition. Accordingly, if an alternative is available, under bilateral or multilateral arrangements between member states, this should be used before the EAW.

Amendment 79 would ensure that, if there are alternative mechanisms available to the issuing state, its failure to use them will always result in the refusal of the EAW, irrespective of the gravity of the offence or any other matter. The inclusion of the less coercive measures test appears to rest on the assumption that the step of issuing an EAW—which involves deprivation of liberty and serious human impact—should be taken as a last resort. The responsibility is on the issuing state to use less coercive measures if these are available. In the handbook on how to issue an EAW, to which I referred, the section on proportionality encourages the authority considering an EAW to use alternatives, including mutual legal assistance, videoconferencing or a summons. The logic that less restrictive alternatives should be used before issuing an EAW applies regardless of the seriousness of the allegation in question. The amendment therefore ensures that extradition is always considered disproportionate if other measures are available.

The case of Andrew Symeou demonstrates the need for it to be made clear that alternatives should be used in preference to the EAW, irrespective of the offence at issue. The Greek police and prosecution authorities could have made use of mutual legal assistance; for instance by asking UK authorities to obtain evidence from the witnesses who had allegedly incriminated Andrew. These witnesses would have been able to explain that they had been subject to police brutality and did not stand by their earlier evidence, which had been taken under pressure and without the assistance of an interpreter. Instead, the Greek authorities opted to have an EAW issued, requiring Andrew’s extradition to Greece to face trial for allegations which might have been found to be without basis much earlier if MLA had been used. The English court should have been able to refuse Andrew’s extradition on the ground that alternative measures were available. I beg to move.

[Lord Taylor of Holbeach]

My Lords, as my noble friend explained, his amendments in this group seek to widen yet further the proportionality bar to extradition in Part 1 cases. As I have already indicated, Clause 138 will allow the UK courts to deal with the long-standing issue of proportionality, which, as I have already said, is a fundamental principle of EU law.

Amendments 77, 79, 80 and 81 would require a judge to consider whether the requesting state has less coercive measures available to it. If so, the judge must bar extradition on proportionality grounds. However, even where such measures may exist, they may not be appropriate in each case, depending on the nature of the crime and other factors such as relevant previous criminal history. It would not be right to require a judge to bar extradition wherever less coercive measures are available. I therefore prefer the existing subsection (3)(c) of the new section inserted by Clause 138—to which my noble friend drew attention—which addresses the issue more attractively than the choice of words proposed in the amendment. That said, the existence of alternatives is clearly a relevant factor, and that is why the clause specifies that this is one of the factors that the judge must take into account when considering proportionality.

Amendment 87 to Clause 140 is consequential on the amendments to Clause 138. It would require a judge to conclude that less coercive measures were available if a person had made a request for temporary transfer, as envisaged by Clause 140, but the issuing state had refused that request unreasonably. This would mean that the judge would have to bar extradition on proportionality grounds. This would require our courts to make an assessment of the rationale of a decision made by the authorities in another member state. Given this, we do not think it appropriate automatically to link a decision not to agree to a temporary transfer with the consideration of proportionality. The EAW framework decision is clear that temporary transfer must be agreed by mutual consent, and it is therefore open to the issuing state to refuse a request, including the UK where we are seeking someone’s extradition to the UK.

19:15

I turn to the government Amendment 81A in this group. This seeks to build on the proportionality bar operated by the courts by ensuring that robust, pre-court administrative procedures are also in place. Amendment 81A amends Section 2 to stipulate that the National Crime Agency must not issue a certificate if it is clear to the NCA that a judge would be required to order the person’s discharge on the basis that extradition would be disproportionate. To facilitate this, the amendment will enable the Lord Chief Justice of England and Wales, with the agreement of the Lord Justice General of Scotland and the Lord Chief Justice of Northern Ireland, to issue guidance in relation to the proportionality bar to the NCA, which it must apply in deciding whether to issue a certificate under Section 2 of the Extradition Act 2003. The content of any such guidance will, as noble Lords will understand, be a matter for the judiciary.

I welcome the broad support for the principle of a proportionality bar to extradition. I recognise that my noble friend takes a slightly different view of how the proportionality bar should be constructed. However, I hope that he will accept that the provisions in the Bill, augmented by Amendment 81A, achieve much of what he is seeking and that he will understand our reasons for not wishing to deviate from this approach. I ask my noble friend to withdraw his amendment and support government Amendment 81A.

[Lord Hodgson of Astley Abbotts]

My Lords, I support my noble friend’s amendment. The point at issue is the extent to which we are determined to make the physical transfer of somebody the last resort. How easy is it for a state that cannot be bothered to take somebody, on an EAW, without taking all the measures necessary to ensure that the person’s life is interrupted as little as possible? I am not convinced that my noble friend has the balance right, but we need to read carefully the detail of his remarks. In the mean time, I beg leave to withdraw.

Amendment 77 withdrawn.

Amendments 78 to 81 not moved.

Amendment 81A

Moved by

[Lord Taylor of Holbeach]

81A: Clause 138, page 106, line 5, at end insert—
“( ) In section 2 of that Act (Part 1 warrant and certificate), after subsection (7) there is inserted—
“(7A) But in the case of a Part 1 warrant containing the statement referred to in subsection (3), the designated authority must not issue a certificate under this section if it is clear to the designated authority that a judge proceeding under section 21A would be required to order the person’s discharge on the basis that extradition would be disproportionate.
In deciding that question, the designated authority must apply any general guidance issued for the purposes of this subsection.(7B) Any guidance under subsection (7A) may be revised, withdrawn or replaced.
(7C) The function of issuing guidance under subsection (7A), or of revising, withdrawing or replacing any such guidance, is exercisable by the Lord Chief Justice of England and Wales with the concurrence of—
(a) the Lord Justice General of Scotland, and(b) the Lord Chief Justice of Northern Ireland.””

Amendment 81A agreed.

Clause 138, as amended, agreed.

Amendment 82

Moved by

[Lord Hodgson of Astley Abbotts]

82: After Clause 138, insert the following new Clause—
“Person unlawfully at large: human rights and proportionality
(1) For section 21 of the Extradition Act 2003 there is substituted—
“21 Person unlawfully at large: human rights proportionality
(1) If the judge is required to proceed under this section (by virtue of section 20), the judge must decide both of the following questions in respect of the extradition of the person (“D”)—
(a) whether the extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998; and(b) whether the extradition would be disproportionate.(2) In deciding whether the extradition would be disproportionate, the judge must take into account the specified matters relating to proportionality.
(3) These are the specified matters relating to proportionality—
(a) the seriousness of the conduct for which the requested person was convicted of the extradition offence;(b) whether the sentence which the person received in respect of the extradition offence was initially suspended;(c) the conduct of the requested person;(d) the passage of time since the person became unlawfully at large; and(e) any other matter which the judge considers to be relevant.(4) The judge must order D’s discharge if the judge makes one or both of these decisions—
(a) that the extradition would not be compatible with the Convention rights;(b) that the extradition would be disproportionate.(5) The judge must order D to be extradited to the category 1 territory in which the warrant was issued if the judge makes both of these decisions—
(a) that the extradition would be compatible with the Convention Rights;(b) that the extradition would not be disproportionate.(6) If the judge makes an order under subsection (5), he must remand the person in custody or on bail to wait for extradition to the category 1 territory.
(7) If the person is remanded in custody, the appropriate judge may later grant bail.”
(2) In deciding any question whether section 21 of the Extradition Act 2003 is compatible with European Union law, regard must be had, in particular, to Article 1(3) of the framework decision of the Council of the European Union made on 13 June 2002 on the European arrest warrant and the surrender procedures between Member States (2002/584/JHA) (which provides that that decision shall not have the effect of modifying the obligation to respect fundamental rights and fundamental legal principles as enshrined in Article 6 of the Treaty on European Union).”

[Lord Hodgson of Astley Abbotts]

My Lords, I now seek to move Amendment 82 and will speak to Amendment 93. The background to these amendments is the existence of two different types of European arrest warrant: a prosecution warrant where a person is to be prosecuted for a crime, and a conviction warrant where a person has been convicted and has fled to another country, knowingly or unknowingly. As drafted, the Bill provides for a proportionality check for prosecution warrants but not for conviction warrants. Amendment 82 seeks to remedy this by inserting the new clause shown. The amendment creates a proportionality check for EAWs to parallel the existing human rights bar in Section 21 which will, under the Bill, be relevant only to prosecution EAWs.

Fair Trials sees many cases where suspended prison sentences imposed in respect of minor offences have been reactivated, several years after the person left the category 1 territory, with an EAW then being issued on that basis. This leads to the drastic measure of extradition being used inappropriately in respect of minor offences. There is the case of Natalia Gorczowska, who was convicted of possession of 4 grams of amphetamines and given a 10-month suspended sentence. She left to begin a new life; several years later, with no apparent reason for the delay, the sentence was reactivated and, still later, an EAW was issued, leading to significant expense and very nearly to a drastic impact upon her young son’s life. The Committee might like to note that, had the same conduct been the subject of a prosecution EAW, it would probably have fallen to be considered as one of minor gravity and unlikely to attract a lengthy prison sentence in application of the specified matters relating to proportionality to be considered before granting a prosecution EAW but not in the case of considering a conviction warrant.

This rather lengthy amendment to Section 21 allows a proportionality analysis, including a broad range of factors tailored to conviction EAWs. Applying the proposed test, the judge would be able to take into account the person’s conduct and other circumstances when addressing proportionality—for instance, whether the person deliberately evaded onerous community obligations by leaving the country, or whether the sentence was reactivated systematically, long after the person left the country and without his or her knowledge.

Amendment 93 provides discretion to refuse a conviction warrant where the subject is a British national and will serve his or her sentence in a UK prison. The proposed amendment would allow the judge at the extradition hearing to refuse to surrender a person under a conviction EAW if that person is a British resident or national, and if it is possible for them to serve their sentence in the UK. It is worded in similar terms to Section 3(1) of the Repatriation of Prisoners Act 1984, which also provides for the issue of a warrant to authorise a person’s detention to serve or complete in the UK a sentence imposed by a foreign court.

Currently, UK courts have no discretion to refuse to extradite a British national or resident to serve a sentence in another country on the basis that it is more appropriate that he or she serves that sentence in the UK. This issue has been highlighted in a number of Fair Trials cases. Individuals have been extradited from the UK following conviction in another jurisdiction yet, following surrender, have been transferred back to the United Kingdom after the lengthy and bureaucratic prisoner transfer process. This is a waste of time and money. UK courts should be given the option of refusing extradition and allowing the defendant to stay in the UK to serve the sentence. Other member states including Belgium, Denmark, Italy and Poland have included this ground for refusal in their implementing legislation.

In the announcement that my noble friend referred to earlier, the Home Secretary stated:

“Where a UK national has been convicted and sentenced abroad, for example in their absence, and is now the subject of a European arrest warrant, we will ask”,

the issuing state’s,

“permission, for the warrant to be withdrawn, and will use the prisoner transfer arrangements instead”.—[Official Report, Commons, 9/7/13; col. 179.]

The flaw in this approach is the possibility that the issuing state will simply not grant permission.

This amendment establishes a legal basis for the judge to refuse extradition and order that the person serves the sentence in the UK. This possibility is provided for in the EAW framework decision, in which paragraph 6 of Article 4 provides that the executing judicial authority may refuse to execute the EAW,

“if the European arrest warrant has been issued for the purposes of execution of a custodial sentence or detention order, where the requested person is staying in, or is a national or a resident of the executing Member State and that State undertakes to execute the sentence or detention order in accordance with its domestic law”.

Given this clear legal basis to provide the judge with discretion to refuse extradition and allow the person to serve the sentence in the UK, it is disappointing that the Government have opted for a slightly different policy, which is not placed on a statutory footing.

The reference to UK nationals in the Home Secretary’s announcement suggests that this reluctance may be because the Government wish the policy to benefit only UK nationals and not non-national residents. It follows clearly from the case law of the Court of Justice that, if the UK implemented paragraph 6 of Article 4 of the EAW framework decision, which applies to both nationals and those staying in or resident of the executing member state, it would not be able to reserve the benefit of this provision to UK nationals only. The drafting in the Bill appears to be a way of avoiding that constraint. However, the policy discriminates in favour of UK nationals and could be the subject of legal challenge, irrespective of whether or not it is placed on a statutory footing.

The policy adopted in lieu of implementation of paragraph 6 of Article 4 of the EAW framework decision is also an ineffective protection. If the issuing state refuses to use the prisoner transfer arrangements, there is no recourse and the person has to be extradited in any event. As the Home Secretary said in her announcement, the proposed change,

“could have prevented the extraditions of Michael Binnington and Luke Atkinson”,

UK nationals who,

“were sent to Cyprus only to be returned to the UK six months later”.—[Official Report, Commons, 9/7/13; col. 179.]

to serve the rest of their sentences. However, this would have been dependent on the Cypriot authorities co-operating. Had Cyprus declined to use the prisoner transfer arrangements, the judge would not have had any legal ground on which to refuse extradition.

It would make more sense for the Government to put the policy on a statutory footing, providing proper protection for UK nationals and other residents whose social reintegration would be served by their serving their sentences in the UK, in line with the relevant provisions of the framework decision. These amendments allow the judge to identify residents on a discretionary basis; equally, Parliament could set reasonable statutory criteria. By example, I understand that Dutch law provides a five-year residence criterion, which has been considered lawful by the Court of Justice of the European Union. I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, as my noble friend has said, Amendment 82 seeks to introduce a proportionality bar for post-conviction cases. As my noble friend Lord Taylor has said, Clause 138 will allow the UK courts to deal with the long-standing issue of proportionality, which is of course a fundamental principle of EU law in cases where a person is sought for prosecution. Under the EAW framework decision, an EAW can be issued in a post-conviction case only if a sentence of at least four months has been imposed. We believe that this is a sufficient proportionality safeguard in such cases.

Perhaps I might also reassure my noble friend that the courts will still consider any representations made that the extradition would breach a person’s human rights—I believe that he mentioned this in his comments. As now, a person would be extradited only if it was compatible with their rights under the European Convention on Human Rights. This includes and applies to those people who are wanted to serve a sentence.

I turn to my noble friend’s Amendment 93. I draw your Lordships’ attention to the terms of the Statement made in July by my right honourable friend the Home Secretary—again, my noble friend referred to this—about the reform of the operation of the EAW to enhance the safeguards available for British citizens wanted for extradition. In that Statement, the Home Secretary set out our commitment to make greater use of EU prisoner transfer arrangements. Where a UK national has been convicted and sentenced abroad, for example in their absence, and is now the subject of a European arrest warrant we will ask for permission for the warrant to be withdrawn and will use the prisoner transfer arrangements instead. My noble friend acknowledged that.

Whereas this policy is limited to UK nationals, Amendment 93, put forward by my noble friend, would broaden the scope of this safeguard beyond UK nationals to those who are resident in the UK, with the consequential impacts that would lead to, including those on the public purse. This Government’s policy is that foreign nationals should, wherever possible, serve their sentences in their home country. Therefore the scope in terms of broadening this beyond UK nationals is not something the Government subscribe to, based on the policy I have indicated. I hope, based on the explanations I have given which underlie the Government’s approach, that he will at this time seek to withdraw his amendment.

19:30

[Lord Hodgson of Astley Abbotts]

My Lords, I have just one question. As I understood my noble friend’s remarks, he said that we now have an effective proportionality test for conviction warrants. My advice is that we do not have that and that there is no chance of a proportionality test for that.

While he is reflecting, my other point is on the question of how we are going to be able to deal with situations where countries do not collaborate. I appreciate the point about non-national residents. I hope, however, the Government will consider following up examples like that of the Dutch. They have established cases where non-nationals would not qualify and therefore the issue which he very properly raises about the impact on public funds could be avoided.

Could he just confirm that there is a proportionality test for conviction warrants, because as I understand it there is not?

[Lord Ahmad of Wimbledon]

For clarification, I repeat that I said that under the EAW framework, an EAW can only be issued in a post-conviction case if a sentence of at least four months has been imposed. We believe that is the sufficient proportionality safeguard in such cases.

[Lord Hodgson of Astley Abbotts]

I will not try to absorb all that now; I will read about it in Hansard. In the mean time, I seek to withdraw the amendment.

Amendment 82 withdrawn.

Clause 139 agreed.

Clause 140: Request for temporary transfer etc

Amendment 83

Moved by

[Lord Hodgson of Astley Abbotts]

83: Clause 140, page 107, line 26, at end insert “(which must include a specific timeframe within which the person must be returned to the United Kingdom)”

[Lord Hodgson of Astley Abbotts]

My Lords, in moving Amendment 83, I shall speak also to Amendments 84 to 86. With these amendments I am seeking to address some of the weaknesses of the temporary transfer system. Amendments 83 and 84 seek to ensure that temporary transfers remain temporary. Amendment 83 would insert in proposed new Section 21B the words,

“a specific timeframe within which the person must be returned to the United Kingdom”,

and Amendment 84 would insert the words,

“within the period specified in the judge‘s order made under subsection (5)”.

They make a temporary transfer conditional on the issuing state providing assurance that the person will be returned within the time allotted for the transfer. The purpose of the temporary transfer system is to enable the issuing state to complete certain steps in the criminal case which we referred to earlier, such as charging the person, and to allow the person to return home, without seeking their extradition. However, in the Bill as drafted, there is no system for ensuring the return of the person.

The concern is that a person brought before a judge or court in the issuing state in the course of a temporary transfer could rapidly find themselves processed in accordance with the usual course of procedure and detained pending trial. I believe that it is therefore necessary to enable the judge to obtain specific assurances that the person will be returned within a fixed period by the judge. The amendment allows the judge to refuse to grant a temporary transfer in the absence of such assurances.

Amendments 85 and 86 permit the temporary transfer system to be used more than once. The Bill allows for the temporary transfer scheme to be used once only. I entirely accept that there is a need to ensure that the temporary transfer process is not used repeatedly to delay extradition, but I believe the current restriction to one use may be too blunt. If a new point comes to light later in the proceedings suggesting that further progress could be made by the requested person attending again, then, provided it is not an abuse of the system, the procedure should be available again. It must also be unfair to prevent a requested person using a temporary transfer just because they have previously agreed to a request, perhaps by the requesting state. There is an issue here of equality of arms. I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, the provisions in Clause 140 will allow a person to speak with the authorities in the issuing state before any extradition takes place. The clause allows for the person’s temporary transfer to the issuing state and for the authorities in that state to speak with the person while he or she remains in the UK, for example, via videoconferencing. I understand my noble friend’s concerns that there should be safeguards, but I believe that there are sufficient safeguards already in place.

Both parties must consent to a temporary transfer—a temporary transfer is only possible where the person concerned agrees to it—and in doing so the issuing authority would be agreeing that the person would be returned to the UK. If the person was not returned, the issuing state would, of course, be in breach of that agreement and the clear terms of the European arrest warrant framework decision. Neither are we aware of any cases among our EU partners where such agreements have been disregarded.

Amendments 85 and 86 relate to the circumstances in which a person may make a request for temporary transfer or videoconferencing. I am grateful to my noble friend for bringing to the Committee’s attention the suggestion of allowing more than one request to be permitted by a UK judge.

In this particular case the Government are not persuaded that there are sufficiently compelling arguments for making such a change. Allowing more than one request could be used to delay the extradition process to no good end. We would expect the cases to which my noble friend refers to be very rare, and if such a situation did arise, the individual would still be able to approach the requesting authorities via their legal representatives to provide further information to consider in that case.

Noble Lords are aware, as my noble friend Lord Taylor has emphasised, of the importance we place on getting the balance right between ensuring efficient extradition processes and the protection of the requested person. We believe that this potential for unnecessary delay would outweigh any marginal benefits it may bring.

I therefore hope, with the explanation I have given, that my noble friend will be minded to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

I certainly will withdraw it. I am convinced about Amendments 83 and 84, but I cannot see how the ability to get a second temporary transfer is going to cost the Government anything. In fact, it would greatly improve the efficacy in the administration of justice. If I were an EAW subject, I would be very disappointed that because the requesting state had used the temporary transfer system up for its own purposes, I was not then able to use it for myself. It is a shame that we do not have even a measure of equality of arms, always providing for the fact that this should not be allowed to detain and block up the process. I beg leave to withdraw the amendment

Amendment 83 withdrawn.

Amendments 84 to 87 not moved.

Clause 140 agreed.

Clause 141: Appeals

Amendment 88

Moved by

[Lord Hodgson of Astley Abbotts]

88: Clause 141, page 108, line 1, leave out paragraphs (a) and (b)

[Lord Hodgson of Astley Abbotts]

In moving Amendment 88, I shall speak also to Amendments 88A and Amendments 89, 90, 91 and 92. Clause 141 is about appeals against EAWs. I note that the noble Baroness, Lady Smith of Basildon, and the noble Lord, Lord Rosser, have tabled a stand part debate to remove this clause. I look forward to hearing their remarks in support of that fairly blunt instrument. My amendments, by contrast, offer my noble friend the Minister a focused, surgical approach to this issue.

Amendments 88 and 90 remove the requirement for leave to appeal. We have spoken about how extradition has an enormous impact on suspects’ lives and those of their families. Given the problems that, for example, Fair Trials regularly sees arising at first-instance extradition hearings, there are concerns about any measure that limits access to appeal courts. The vast majority of those subject to extradition procedures—the “little platoons” that I referred to in my first group of amendments —cannot afford a lawyer and are therefore represented by a duty solicitor. Many duty solicitors have little experience of extradition cases and therefore may not be familiar with the complex conditions of the 2003 Act and associated case law. This can be contrasted with the position of the requesting state, which is automatically entitled to representation by a specialist unit of Crown Prosecution Service lawyers. The complexity of extradition cases also means that there is often inadequate time at a first-instance hearing for consideration of all the relevant facts and issues. If suspects lose their automatic right to appeal then, so long as these problems at first instance remain, there may be cases that result in people being wrongly extradited.

These problems are demonstrated by the recent case of Krzysztof Juszczak, who in February 2013 appealed successfully against extradition to Poland on the basis that his removal from the UK would constitute a disproportionate interference with his family life under Article 8 of the ECHR. Although Mr Juszczak is the primary carer for his severely disabled stepdaughter, this was not raised by the duty solicitor before the district judge, an omission that was criticised as a failure of duty by Mr Justice Collins in his appeal judgment. As this evidence was obtained late in the process, there is a clear danger that under the proposed system Mr Juszczak would have been denied leave to appeal.

I recognise the problems raised in the Sir Scott Baker review in relation to the large number of unmeritorious appeals in the extradition process, and understand the need for a process to ensure that appeals with merit are heard and disposed of more quickly. It must be in the interests of both defendants and the state that the appeal process works to correct genuine errors rather than to delay the judicial process. However, it is surely equally true, and vital, that suspects are given a full opportunity to get a case together and identify any valid grounds on which their extradition should be refused, and any appeal process should reflect that.

The Sir Scott Baker review recommended that any leave-to-appeal test should follow the standard required for judicial review—namely, that the defendant must show an arguable case in order to be allowed to appeal. The inclusion of any higher standard of proof would be inappropriate, not least because the requirement to demonstrate an arguable case, as is the case in the judicial review process, would suffice to weed out those cases with no merit. Leave should be sought on paper, with written reasons provided for the outcome. Defendants must then have a right of appeal against refusal to a judge at an oral hearing. Only the judge at first instance or the High Court judge who would hear the appeal should consider applications for leave to appeal. If all these safeguards were guaranteed, a requirement for leave to appeal might be acceptable.

There has been concern that the lack of information about how the Government’s proposed amendments will work in practice makes it far from clear that they satisfy the above recommendations of the Sir Scott Baker review, and people could still have their lives ruined by an unjust extradition. As this concern remains unanswered in the Bill as currently drafted, the argument regarding appeal remains flawed and liable to create unfairness and inequality of arms. It has also been pointed out that the Government’s proposed amendments did not affect the requesting state’s automatic right to appeal if an extradition request is refused, thus introducing a further inequality of arms into proceedings that are already heavily weighted in favour of requesting states, which have far greater resources than individuals and benefit from a strict “no questions asked” regime that gives courts very little power to refuse extradition.

The Government have taken concerns in this regard into account, with the introduction of a requirement of leave to appeal against discharge at extradition hearing in Clause 141(2), but this amendment proposes that that requirement should also be omitted in line with the proposed approach to appeals against extradition orders in Clause 141(1).

Amendment 88A would extend the deadline for bringing appeals against extradition from seven days to 14. I reiterate my welcome for the introduction of flexibility in relation to appeal deadlines, but I remain concerned that the current drafting may be insufficient to address potential injustices, particularly when linked to the proposed removal of the automatic right to appeal. Given the impact of extradition on individuals, a standard period of seven days to appeal or seek leave is pretty short. This is often exacerbated by the need to obtain evidence from other jurisdictions and can raise enormous challenges when a person decides to change their lawyer after the first-instance hearing.

19:45

We have already discussed the introduction of the leave-to-appeal requirement of the person to comply with the appeal deadline, but it should also be taken into account if the leave requirement is to be introduced. If the proposal set out in paragraph 10.14 of the Baker review is followed, with leave to appeal being sought and granted or refused on paper, the drafting needed to produce the leave application could become more onerous, complex and time-consuming than for the current notice. It is therefore proposed that the timeframe flexibility introduced in the amendments to Sections 26(5), 103(10) and 108(5), as amended in accordance with paragraph 4.1 above, be retained but that the permitted period in Section 26(4) should also be extended to 14 days. This would follow the recommendations of the Baker review at paragraphs 11.75 to 11.76. I beg to move.

[Lord Rosser]

My Lords, I will be brief with what has been described as my blunt instrument on Clause 141. I will not repeat the detailed arguments put by the noble Lord, Lord Hodgson of Astley Abbots. As he said, Amendments 88 and 90 seek to preserve the automatic right to appeal against an extradition order by deleting provisions in the clause that would make the ability to appeal against an order subject to obtaining the permission of the High Court. Essentially, it appears that the Government are now proposing to remove a key safeguard for individuals at risk of extradition by repealing the automatic right of appeal. We have real concerns about this change, which of course removes safeguards for UK citizens.

The automatic right of appeal is a key safeguard against the wrongful extradition of individuals, which allows them to raise new evidence that was not available at the time of the extradition hearing or to challenge the decision of the original judgment. It was surely this automatic right of appeal that allowed Gary McKinnon and his family to challenge the initial decision to extradite him to the US, leading ultimately to the decision not to extradite him at all. Without the right of appeal, he might have been extradited without any further consideration of the evidence, old or new, showing that extradition posed a serious risk to his right to life. Indeed, in the Statement that the Home Secretary made on 16 October 2012, she specifically referred to this issue when she said:

“After careful consideration of all of the relevant material, I have concluded that Mr McKinnon’s extradition would give rise to such a high risk of him ending his life that a decision to extradite would be incompatible with Mr McKinnon’s human rights”.—[Official Report, Commons, 16/10/12; col. 164.]

Yet, subject to what the Minister may say, the Government appear to be introducing changes to the Act that would mean that if a similar case occurred after this Bill had been passed, the Home Secretary would not be able to make the same decision.

Clause 141 amends Sections 26 and 108 of the 2003 Act to provide that an appeal will lie only with permission from the High Court, and no indication is given in the Bill of what criteria will be used to decide whether permission should be granted. I hope that the Minister will be able to indicate the reason for the Bill being so vague over an issue—namely, the criteria—that could have significant human rights consequences. What in fact do the Government expect the criteria to be, do they expect them to be evidence-based and will they be available for scrutiny? What impact do the Government believe any likely criteria will have on the number of cases able to be appealed?

Once an individual has been extradited, of course, there is virtually nothing that can be done if new evidence arises to show that that was not the appropriate or fair decision and was contrary to the interests of justice or their human rights. Does the Minister not agree that, because of that, it is crucial that people effectively have an automatic right to appeal against a decision to be extradited, or at least some other means of ensuring that justice is done, and that we do not end up in a situation which, frankly, does our own extradition system no credit?

I cannot vouch for this personally, but Liberty says that extradition experts are of the view that a large number of cases that have been successful on appeal probably would not have been granted leave under the Bill. Removing the right of automatic appeal will potentially have considerable human rights and legal implications. If the Minister cannot offer some movement on this issue when he replies tonight, I hope that he will at least be able to explain why the Government appear to be taking such a major backwards step, having previously placed such emphasis on their concern for Gary MacKinnon’s human rights.

[Lord Taylor of Holbeach]

My Lords, as my noble friend has explained, Clause 141 makes the right of appeal against a decision to order extradition subject to the leave of the High Court. Similarly, it makes the requesting state’s right of appeal against a decision to discharge a person from extradition proceedings subject to the leave of the High Court. Clause 141 also allows the requested person to make an application for leave to appeal out of time in certain circumstances. This does not apply to the requesting state.

The noble Lord, Lord Rosser, using his blunt instrument, gives me the opportunity to broaden the debate beyond the immediate amendments and explain how this process will work and why the Government feel justified in introducing Clause 141. My noble friend Lord Hodgson, in tabling his Amendments 88 and 90, challenges us on why we are making these changes. At present, a person has an automatic right of appeal against a decision to order his or her extradition, and the requesting state also has an automatic right of appeal against a decision not to order extradition—an important factor to bear in mind.

As noble Lords are aware, the Government commissioned a review by Sir Scott Baker of the UK’s extradition arrangements. One of the key findings of his review was that the success rate of appeals was extremely low: less than 13% in 2010. In other words, the court system is burdened by unmeritorious appeals, a fact to which my noble friend Lord Hodgson referred, which then delay hearings for all appellants and means that justice is deferred. Clause 141 addresses this problem by making appeals subject to permission from the High Court. This filter applies to appeals against, for example, a judge’s decision to order extradition to a Part 1 territory, that is, another member state; a judge’s decision to send a case to the Secretary of State to consider extradition in Part 2 cases, that is, where the requesting country is not an EU member state; and to a decision by the Secretary of State to order extradition in Part 2 cases. To provide parity, it also applies to appeals against decisions to discharge a person.

My noble friend Lord Hodgson asked what sort of issues a court would consider in deciding whether to allow an application to be heard. This will be, as one would expect, a matter for the judge concerned. They will, of course, give full consideration to all the relevant factors raised by the appellant before reaching a decision. We do not think that they are appropriate to be set out in legislation, as it is a matter for the court itself to consider. I understand that noble Lords will have questions about what safeguards will be available. Let me reassure noble Lords that this provision does not prevent anyone from applying for permission to appeal. Once an application has been made, the High Court will decide which cases proceed to a hearing, but each application will be considered by a High Court judge. Furthermore, Clause 141 sets out that the High Court must not refuse to entertain an application for leave to appeal by the requested person solely because it has been submitted outside the normal time period, if the person did everything reasonably possible to ensure that the notice was given as soon as it could be.

That point brings me to the matters that my noble friend Lord Hodgson raised in relation to this in his Amendments 88A, 89, 91 and 92. My noble friend proposes to amend Clause 141 to insert a requirement for the courts to allow an appeal to be made out of time if it is in the interests of justice to do so. As I said, Clause 141 allows the High Court to hear an out-of-time appeal where the person has done everything reasonably possible to bring the appeal as soon as possible. Our approach follows that of the Supreme Court, which ruled last year that out-of-time appeals should only be considered exceptionally. We believe that this provision gets the balance right: the timetable for an appeal is clear and there must be an onus on an appellant to meet the statutory requirements, as happens in the vast majority of cases.

My noble friend is also proposing to extend the time limit for appeals in Part 1 cases from seven days to 14 days. As he has explained, this was one of the recommendations that Sir Scott Baker made in his review of our extradition arrangements. We have therefore considered it very carefully in developing the provisions in the Bill. Our view is that extending the time limit in this way would have no practical effect beyond increasing the likelihood for delay. As I said, we have introduced new protections where people are unable to submit their appeals on time through no fault of their own. We believe that this new provision will address the concerns raised by my noble friend, and indeed by Sir Scott Baker, on this issue.

What safeguards will exist under these new provisions? We do not believe that we are removing any existing safeguards. We need to get the balance right between ensuring proper protection for those subject to an extradition request while ensuring that people do not delay their proper surrender by burdening the courts with unmeritorious appeals. We believe that this approach gets these matters right. The court itself will decide the issues and the relevance of any out-of-time considerations.

The changes set out in Clause 141 will allow the courts to focus their attention on the right appeals, removing the burden of unmeritorious appeals while ensuring that proper safeguards are in place for those subject to extradition. I commend the clause to the Committee and I hope that my noble friend will be prepared to withdraw his amendment, and that the noble Lord, Lord Rosser, will see the merit in the clause.

[Lord Hodgson of Astley Abbotts]

I am grateful to my noble friend for that fulsome reply. I am disappointed that the Government have not seen fit to follow up the Scott Baker proposal for 14 days instead of seven days, given the complexity of the appeal process, particularly when linked to the additional steps that the Government are taking to introduce prohibitions on and difficulties in getting an appeal process going in the first place. Obviously, however, this is not the time to take the argument further. I look forward to reading with care in Hansard tomorrow what the Minister has said. I beg leave to withdraw the amendment.

Amendment 88 withdrawn.

Amendments 88A to 92 not moved.

Clause 141 agreed.

Clause 142 agreed.

Amendment 93 not moved.

20:00

Amendment 94

Moved by

[Lord Hodgson of Astley Abbotts]

94: After Clause 142, insert the following new Clause—
“Request of further information where suspicion of mistaken identity
In section 7 of the Extradition Act 2003 (identity of person arrested), after subsection (4) there is inserted—“(4A) If the judge decides that question in the affirmative, he must decide whether the person in respect of whom the warrant was issued is the person who is alleged to have committed, or to have been convicted for, the offence on which the warrant is based.
(4B) The judge must decide the question in subsection (4A) on the balance of probabilities, but if he considers there is reasonable doubt as to that question, he may not decide it in the affirmative unless he has first requested the issuing authority to provide further information within the time specified in the request (which must not be less than a reasonable time in all the circumstances) and the issuing authority has provided him with the information requested within that time.
(4C) If the judge decides the question in subsection (4A) in the negative, he must order the person’s discharge.””

[Lord Hodgson of Astley Abbotts]

My Lords, Amendment 94, which is concerned with mistaken identity, and Amendment 95 would insert two new clauses into the Bill. Amendment 94 would enable the judge at the extradition hearing—whether it is a prosecution or a conviction warrant—to request more information where there is a real doubt as to whether the person sought is actually the person suspected or convicted. This would be particularly valuable in cases where there is a reasonable belief that the person sought has had his or her identity stolen or where there is a clear case of mistaken identity. In these days of cybercrime, the former is an increasingly common occurrence.

There are currently no grounds in domestic law on which to refuse extradition where there are serious doubts about whether the person sought is the person who committed the crime or is suspected to have committed the crime. Such a situation has arisen in several cases where the person subject to the EAW has had their identity stolen by the real perpetrator or where that perpetrator has identified someone else as the person who committed the offence.

This is demonstrated by the case of Edmond Arapi, who was tried and convicted in his absence in Italy and given a sentence of 16 years. He had no idea that he was wanted for a crime or that the trial or subsequent appeal had taken place until he was arrested at Gatwick Airport in 2009 on an EAW on his way back from a family holiday. The British courts ordered that Edmond be sent to serve the sentence in Italy, despite clear proof that he was at work in the UK on the day of the alleged offence. On the day that the High Court was due to hear his appeal against extradition, the Italian authorities decided to withdraw the EAW following a campaign, admitting that they had sought Edmond in error. He narrowly avoided being separated from his wife and children, including a newborn son, and spending months or years in an Italian prison awaiting a retrial. This amendment is needed to give courts greater discretion to request further information where there are reasonable grounds to believe that the person sought under an EAW is the victim of mistaken or stolen identity.

Amendment 95 seeks to clarify the approach that a judge should follow in relation to human rights and provide a stronger basis on which to refuse to execute an EAW on human rights grounds. Many have argued that the underlying assumption of the EAW system—that other Part 1 territories can always be trusted to respect the fundamental rights of those extradited—rests on shaky foundations. For instance, it has been reported that in the years 2007 to 2012, Greece violated Article 6(1) of the ECHR 93 times in criminal cases.

Garry Mann, giving evidence to the Home Affairs Committee, described his 2004 trial in Portugal as follows, stating that,

“the police … just told me it was some kind of public order offence … we went into court and there were 12 of us … we had one interpreter … she would try to say something and pass it down the line of 12, but we did not understand what was going on at all … They asked me what I thought in broken English, but again the judge and the lawyer did not speak much English … I never knew the charge that I was facing until 30 minutes before I was convicted at 11.30 that night … They said there was no time to call any witnesses. I said I would like CCTV; no time to call CCTV”.

An English court later called on to issue a football banning order against Garry refused, finding that the trial had not complied with Article 6 of the ECHR.

The courts have, however, given very short shrift to arguments alleging that extradition would lead to a violation of human rights. In accordance with the concept of mutual trust, on which the operation of the EAW is based, the courts assume that the issuing state will protect the extradited person against any unfairness and that past proceedings giving rise to convictions on which EAWs are based were fair. A person must show that they are at risk of a “flagrant” breach of their fair trial rights in order to resist extradition. The approach is difficult to sustain when there are ongoing systematic deficiencies in a justice system, which are liable to impact upon an extradited person. For instance, the European Court of Human Rights recently found Italy in violation of Article 3 of the ECHR and applied its pilot judgment procedure, recognising that widespread overcrowding was leading to systematic infringements of Article 3. The concept of mutual trust is difficult to defend in such circumstances. If an extradited person is going to be detained in the same prison, it is plainly likely that their human rights will be infringed.

The Government have taken the view that the EAW framework decision implicitly allows refusal to execute an EAW on human rights grounds, relying on recital 12 and Article 1(3) of the framework decision, which affirm that the latter shall not have the effect of modifying the obligation to respect fundamental rights and fundamental legal principles, as recognised by Article 6 of the Treaty on European Union and reflected in the European Charter of Fundamental Rights. However, the precise content of those fundamental rights obligations is not clear. In her opinion on the Radu case, Advocate-General Sharpston suggested that, under the charter, the test was whether there was a “substantially well founded risk” of a violation which would,

“fundamentally destroy the fairness of the trial”,

a slightly different test from the ECHR flagrancy test. However, for the time being, the precise requirements of fundamental rights are not defined in EU legislation. Accordingly the member states enjoy some discretion to apply fundamental rights as they understand them, provided that this does not compromise the unity and effectiveness of EU law. This amendment therefore falls within the permissible bounds of the EAW framework decision. I beg to move.

[Lord Taylor of Holbeach]

My Lords, the additional safeguards that my noble friend has proposed through Amendment 94 seek to introduce matters of mistaken identity. It is not something that we believe is necessary. Clearly, we do not want the wrong people to be extradited; the wider issues relating to identity were carefully considered during the review of the UK’s extradition arrangements. Sir Scott Baker did not find any evidence that a person who was subjected to mistaken identity had actually been surrendered to stand trial. He concluded that there was no need to amend the Act to require a judge to request further information concerning the requesting person’s identity. Nor did the Metropolitan Police, the Crown Prosecution Service or the Crown Office raise concerns about the issue.

I agree with expert opinion and I am not persuaded that a change is needed here. My noble friend asked about the case of Mr Arapi—I will try to avoid talking about particular cases—but, as my noble friend will be aware, Mr Arapi was not extradited and the Italian authorities admitted their error in making the request for him rather than another person of the same name. In his review, Sir Scott Baker found that no amendment was needed to the protections already afforded in the Act with regard to identity as there are already sufficient procedures in place to protect people who are sought as a result of mistaken identity.

The amendment raises the particular issue of a judge being clear that the person who has been arrested and appears in court is the person who is alleged to have committed the crime. This goes to the heart of the trial in the issuing stage. It is not a matter for the UK courts. The courts’ consideration of an extradition request is not one of guilt or innocence but of whether any of the statutory bars to extradition apply.

Turning to Amendment 95, my noble friend seeks to make changes to a judge’s consideration of human rights in EAW cases, including expanding the matters to which the judge should have regard when considering whether extradition would breach a person’s human rights.

We believe that there are already sufficient safeguards in the Extradition Act to allow a judge to bar extradition on human rights grounds. The 2003 Act is drafted to allow the courts to give the fullest possible consideration to human rights issues. We discussed this matter in earlier deliberations in Committee. In all cases, the judge must decide whether extradition would be compatible with the convention rights and must discharge the person if he or she decides that it would not be compatible.

In his review of the UK’s extradition procedures, Sir Scott Baker found that the human rights bar to extradition did not need amending. The review found that the bar did not permit injustice or oppression, and the Government agree with that assessment. We do not accept that a judge’s approach to human rights needs to be changed.

In conclusion, I am very grateful to my noble friend for giving the Committee this opportunity to consider various aspects of Part 12 of the Bill.

[Lord Lamont of Lerwick (Con)]

Am I not right in saying that the European Commission has been quite critical of some of the new entrants into the EU’s legal systems and has instanced poor training of judges and problems of corruption? As long as the criticisms continue to be made, does not my noble friend’s amendment have a real point, or is the Minister saying that the human rights considerations that he has been talking about would cover that instance?

[Lord Taylor of Holbeach]

The European arrest warrant provisions are indeed Europe-wide, so they cover a number of different jurisdictions. None the less, proportionality and human rights considerations are written throughout these particular parts of the Bill. As I said, Sir Scott Baker investigated this. He felt that the human rights bar to extradition did not permit injustice, if it was believed to exist, or oppression, and the Government agree with that assessment. I hope that I have satisfied my noble friend and that he will accept that the Government are not operating this mutual extradition facility which the European arrest warrant provides for in a way which is unreasonable to people who are subject to extradition requests.

[Lord Hope of Craighead (CB)]

Perhaps I may assist the Minister in replying to the question that has been raised. Recently, the Supreme Court had to consider a case where an individual was being sought to be extradited to Albania. The court was told that there was a high degree of corruption among the judges and the extradition was stayed so that the degree of corruption could be investigated further. The matter is now in the hands of the Lord Advocate in Scotland. That is an example of the kind of phenomenon to which the noble Lord referred—where the standards in one of the new countries are not up to the standards that one might expect. However, I suggest that the courts are very astute in ensuring that the human rights protection in relation to a fair trial is preserved. That is a very recent example which I think meets the point that the noble Lord, Lord Lawson, had in mind.

[Lord Taylor of Holbeach]

Not for the first time, I am very grateful to the noble and learned Lord, Lord Hope of Craighead, for his intervention in this matter. I should say that Albania is not a member of the European Union at this stage. However, the principle applies, as the noble and learned Lord said. Section 21 of the existing Act already requires the judge to be satisfied that extradition is compatible with the human rights convention, and that includes the right to a fair trial. Therefore, that already exists in law.

In conclusion, I am grateful to my noble friend for giving the Committee an opportunity to consider various aspects of Part 12 of the Bill. On a number of the issues he has raised, I think that we share the same policy objectives, and in such cases where we have differences between us, they may well simply be a matter of drafting. Having had this important debate and in the light of my comments, I hope that my noble friend will agree to withdraw his amendment. If, on reading the record, he finds that there are still aspects with which he is concerned, I hope that he will not hesitate to raise them with me.

20:15

[Lord Hodgson of Astley Abbotts]

Of course, I shall not hesitate at all. Again, I am extremely grateful to my noble friend. He is quite right to remind me that Edmond Arapi was not extradited, although, in the words of the Duke of Wellington, it was “a damn close-run thing” in the sense that the appeal was heard on the day that he was about to go.

I acknowledge the points that my noble friend made concerning the Scott Baker issues of identity and human rights, although I think that identity is going to become more and more important because of cybercrime and people assuming other identities. I think that that will come back for discussion. I am disappointed that we have not been able to find a way through that because, in my view, it will rise in importance and relevance.

My noble friend Lord Lamont asked the critical question: do we have sufficient mutual trust? The noble and learned Lord, Lord Hope of Craighead, said that we should have. The point, of course, is that unlike Albania, for which there would be a Part 2 warrant, the process of a Part 1 warrant, which the EAW would be, is a great deal swifter. Standing here on my feet at this moment, I do not know whether the court has more powers to make investigations in the case of a Part 2 warrant, as would be provided by my amendments, than it has in the case of a Part 1 warrant. That is something on which I cannot give an answer off the top of my head. However, I am grateful to my noble friend because I think that he has put his finger on it: is there enough mutual trust?

I am grateful to my noble friend and to the Committee for having let me rabbit on at some length about these issues. I beg leave to withdraw the amendment.

Amendment 94 withdrawn.

Amendment 95 not moved.

Clauses 143 to 146 agreed.

Clause 147: Non-UK extradition: transit through the United Kingdom

Amendment 95ZA not moved.

Clause 147 agreed.

Clause 148 agreed.

Amendment 95ZB

Moved by

[Lord Ahmad of Wimbledon]

95ZB: After Clause 148, insert the following new Clause—
“Electronic transmission of European arrest warrant etc
In section 204 of the Extradition Act 2003 (warrant issued by category 1 territory: transmission by electronic means), in subsection (5)—(a) for “subsection (1), a” there is substituted “subsection (1)—(a) a”;(b) at the end there is inserted—“(b) information contained in the warrant is treated as being received by the designated authority in a form in which it is intelligible if the authority receives—(i) a summary of that information in English, and(ii) the text of the warrant itself,in a form in which it is legible.”

[Lord Ahmad of Wimbledon]

My Lords, this group of government amendments to Part 12 and Schedule 9 deal with three distinct and largely technical issues.

First, Amendment 95ZB, and the associated Amendment 98B to Schedule 9, make minor amendments to Section 204 of the Extradition Act 2003. That section makes provision for cases where the information contained in a European arrest warrant is transmitted to the United Kingdom electronically.

The amendments to Section 204 are needed to support the implementation of the second generation Schengen information system, otherwise known as SIS II. Under SIS II, the NCA will be required to certify requests entered by other member states for,

“arrest for surrender or extradition purposes”,

from the information received electronically under the SIS II process. This information will be an English language summary of the information contained within the EAW, together with the original language version of the EAW. Section 204 therefore requires amendment so that certification can take place on the basis of this English language summary, rather than a translation of the full contents of the EAW.

Amendments 95ZC and 95ZD relate to Clause 149. That clause amends the Prison Act 1952 to ensure that, in all cases where a person spends time in custody in another member state awaiting extradition to the UK, that time is counted as time served towards the UK sentence. As it stands, Clause 149 provides only for cases in England and Wales. Therefore, following discussions with the Scottish Government, we have agreed that analogous provision for Scotland can be made through administrative means. However, with the agreement of the Scottish Government, we are taking the opportunity to update relevant provisions in Scots law in relation to cases where a person is extradited to the UK to be sentenced. Section 210 of the Criminal Procedure (Scotland) Act 1995 makes provision for taking into account time spent in custody awaiting extradition to the UK in cases where a person is extradited to be sentenced. It is out of date in that it refers to the Extradition Act 1989 which is no longer in force. Amendment 95ZC amends this provision to update it in respect of extradition.

In respect of Northern Ireland, Section 38 of the Prison Act (Northern Ireland) 1953 makes equivalent provision to Section 49 of the Prison Act 1952 in cases where a person is sentenced before extradition to the UK. Amendment 95ZD, and the consequential Amendment 98A to Schedule 9, ensures that time spent in custody awaiting extradition to the UK from another member state is always credited. There is currently no legislative provision in Northern Ireland for taking into account time spent in custody awaiting extradition to the UK from another member state where a person is sentenced after extradition. Amendment 95ZD also amends the relevant law in Northern Ireland to ensure that such credit is given.

Amendments 104A, 104B and 104C to Clause 159 make consequential changes to the extent provisions arising from the two new clauses inserted by Amendments 95ZC and 95ZD. These new provisions will ensure that the UK law is fully in line with Article 26 of the EAW framework decision. Finally, Amendment 99 implements one of the recommendations in the 12th report of the Delegated Powers and Regulatory Reform Committee. That committee recommended that the order-making power in new Section 189E of the Extradition Act 2003 should be subject to the affirmative procedure. New Section 189E enables the Home Secretary to specify descriptions of persons, other than constables, who may exercise powers of detention, search and seizure in respect of people who are in transit through the UK and being extradited from one foreign territory to another. Such a power might be used, for example, to designate immigration officers. The Government are content to accept the committee’s recommendation in this regard. I beg to move.

Amendment 95ZB agreed.

Clause 149 agreed.

Amendments 95ZC and 95ZD

Moved by

[Lord Taylor of Holbeach]

95ZC: After Clause 149, insert the following new Clause—
“Discount on sentence for time spent in custody awaiting extradition: Scotland
(1) Section 210 of the Criminal Procedure (Scotland) Act 1995 (consideration of time spent in custody) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (a), after “United Kingdom” there is inserted “otherwise than from a category 1 territory”;(b) in paragraph (c)(ii), for “for the purposes of this section” there is substituted “who was extradited to the United Kingdom otherwise than from a category 1 territory”.(3) After subsection (1) there is inserted—
“(1A) Subsection (1B) applies where—
(a) a court is passing a sentence of imprisonment or detention on a person for an offence, and(b) the person is an extradited prisoner who was extradited to the United Kingdom from a category 1 territory.(1B) The court shall specify—
(a) the period of time spent in custody awaiting extradition, and(b) the date of commencement of the sentence in accordance with subsection (1C). (1C) The date of commencement of the sentence is to be a date the relevant number of days earlier than the date the sentence would have commenced had the person not spent time in custody awaiting extradition.
(1D) In subsection (1C), “the relevant number of days” means the number of days in the period specified under subsection (1B)(a).”
(4) After subsection (2) there is inserted—
“(2A) In this section, “category 1 territory” means a territory designated under the Extradition Act 2003 for the purposes of Part 1 of that Act.”
(5) Subsection (3) is repealed.”

95ZD: After Clause 149, insert the following new Clause—
“Discount on sentence for time spent in custody awaiting extradition: Northern Ireland
(1) In section 38 of the Prison Act (Northern Ireland) 1953 (arrest, etc, of persons unlawfully at large), for subsection (3) there is substituted—
“(3) The provisions of subsection (2) shall not apply to any period during which any such person—
(a) is detained in pursuance of any other sentence of any court in the United Kingdom in a prison or other institution, or(b) is kept in custody in a category 1 territory before, and only for the purpose of, being extradited to the United Kingdom to serve the term of imprisonment or detention referred to in that subsection,but shall apply in addition to any other provisions of this Act imposing any punishment for an escape. (3A) In subsection (3) “category 1 territory” means a territory designated under the Extradition Act 2003 for the purposes of Part 1 of that Act.”
(2) In section 26 of the Treatment of Offenders Act (Northern Ireland) 1968 (duration of sentence), at the end of subsection (2A) there is inserted “; or
(c) any period during which he was in custody in a category 1 territory with a view to his being extradited to the United Kingdom to be tried or sentenced for that offence (and not for any other reason).In paragraph (c) “category 1 territory” means a territory designated under the Extradition Act 2003 for the purposes of Part 1 of that Act.””

Amendments 95ZC and 95ZD agreed.

Clause 150 agreed.

Amendment 95A

Moved by

[Lord Beecham]

95A: Before Clause 155, insert the following new Clause—
“Discretion in ordering victim surcharge to offenders under the age of 18
In section 161(A) of the Criminal Justice Act 2003 (court’s duty to order payment of surcharge), after subsection (4) there is inserted—“(5) In the case of offenders under the age of 18, the ordering of payment of a victim surcharge may be at the discretion of the sentencing body.””

[Lord Beecham (Lab)]

My Lords, I rise to move the amendment in the name of my noble friend Lord Ponsonby, who cannot be in his place tonight. I shall be uncharacteristically brief. My noble friend draws the attention of the Committee, and indeed mine, to an anomaly in the present situation on victim surcharge orders. The payment may be ordered to be made by the parents of a young offender who are themselves the victims of a crime. That situation cannot possibly have been envisaged originally, but it appears to be the case and there seems to be no court discretion to avoid imposing what many of your Lordships would feel is a ridiculous outcome. The noble Lord may not be able to accept the amendment tonight, but I hope that he will look at it, as it seems to be anomalous and ought to be corrected.

[The Minister of State, Ministry of Justice (Lord McNally) (LD)]

My Lords, let me confirm at once that the noble Lord, Lord Beecham, has been uncharacteristically brief. I am sorry that the noble Lord, Lord Ponsonby, was unable to move his amendment because I know of his deep and continuing concern on these matters.

The Government are determined to provide the best support for victims of crime, which must be properly funded, but increasingly by offenders rather than taxpayers. In 2010-11, offenders contributed less than £1 in every £6 of funding that supports victims’ services. We intend to raise up to an additional £50 million from offenders to pay for services to support victims of crime. That is why we brought forward reforms to the victim surcharge last year, following public consultation, to ensure that all offenders bear a greater proportion of the cost of victims’ services. Proceeds from the surcharge are ring-fenced to fund support services for victims and witnesses. From October 2012, the victim surcharge for adult offenders was increased when ordered with a fine and extended to a wider range of in-court disposals such as conditional discharges, community sentences and custodial sentences. Similar provision was made for juvenile offenders who even before the changes made in 2012 were required to pay the surcharge when sentenced to a fine.

A key point of the victim surcharge is that all offenders, including juveniles, take responsibility for their offending behaviour and make a contribution towards funding victims’ services. Juveniles have therefore always been within its scope and I do not believe that it would be right to introduce discretion to exempt them. Having said that, I recognise the concerns of the noble Lord about the practicalities. When the offender is a juvenile, Section 137 of the Power of Criminal Courts (Sentencing) Act 2000 provides that the parent or guardian might become liable to pay a financial order made by the court. There may, therefore, be circumstances where the parent or guardian of a juvenile becomes liable to pay the victim surcharge when they have been the victim of the offence. We recognise the issue that such cases raise.

Let me reassure the noble Lord that the court does have the discretion not to order the parent or guardian to pay the surcharge if, having regard to the circumstances of the case, it considers that it would be unreasonable to do so. While the court would still need to order the surcharge in respect of the juvenile, there are a number of options open to it when it comes to payment. In this vein, the Justices’ Clerks’ Society issued a circular to its members in June this year outlining some of these approaches. These could include inquiring as to any income the offender may be receiving, particularly if they are older juveniles, in which case responsibility for paying the surcharge would fall directly to the young person. Additionally, in exceptional circumstances, the court has the power to defer payment of the surcharge until such time as it considers the offender would be able to pay it, again making responsibility for paying the surcharge the offender’s rather than that of his or her parents.

We believe that it is right that all offenders, including those aged under 18, should take responsibility and make greater reparation towards the cost of victim support services as a result of their actions. It is therefore appropriate that the surcharge should continue to be ordered when a court deals with an individual, whether as an adult or a juvenile. I hope that I have been able to reassure the noble Lord on the points he raised and that he will be content to withdraw his amendment.

[Lord Beecham]

My Lords, I am grateful for what I might best describe as an uncharacteristically helpful and informative response from the noble Lord, which I undertake to convey to my noble friend. We are, of course, entirely with the noble Lord and the Government in wanting to ensure that victims are compensated, especially by those who wrong them. He has adequately explained the situation and my noble friend’s fears seem to be unfounded. I beg leave to withdraw the amendment.

Amendment 95A withdrawn.

20:29

Clause 155: Court and tribunal fees

Amendment 95AA

Moved by

[Lord Beecham]

95AA: Clause 155, page 125, leave out line 9

[Lord Beecham]

My Lords, I shall also speak to Amendments 95AB, 95BA and 95D in relation to the issue of court and tribunal fees. At Second Reading I described the Bill as not so much a curate’s egg as a curate’s omelette, comprising as it does so many ingredients, both good and bad, mixed up together. It is perhaps fitting that the Committee should end with a debate on a clause which impels me to produce another culinary analogy, for this clause and the process which has informed it can best be described as half-baked.

It is perfectly reasonable to update the fees for proceedings in courts and tribunals to keep pace with inflation and, in appropriate cases, to seek full-cost recovery, provided there is a reasonable and effective scheme for the remission of fees, in whole or in part, for those of modest means or less. Equally, I have few qualms about fees in cases such as those in the commercial court which the Government are anxious to promote internationally as a forum of choice, but the approach of the Government to this clause has been cavalier in the extreme.

On 4 December the Minister wrote to me to say that the Government had launched a consultation on the provisions of Clause 155, as announced the previous day, that is to say four working days before the clause comes to be considered by this House. Had progress been quicker on earlier clauses, we would have reached this clause on the very day that the Minister’s letter reached me. The consultation, incidentally, is to last seven weeks, including the Christmas and new year period. It will end on 21 January, by which time we will presumably have reached Report, if not concluded it, and there will be little or probably no time at all for the Government to give their response before the Bill’s final stage is reached.

That is not all. Impact assessments for these proposals published on 2 December say next to nothing about the impact on claimants applying to tribunals or to the courts, as opposed to the amounts the Government hope to rake in from increased fees. The Government’s attitude to consultation is underlined by paragraph 20 of the current consultation paper which refers to an earlier consultation, CP15/2011, Fees in the High Court and Court of Appeal Civil Division, to which, the consultation paper records,

“the Government has not yet responded”

after some two years, and which are, the consultation paper says, “superseded”—without, I may say, any explanation—by the current proposals.

The saga does not end there—perhaps I should say does not start there—for the Government launched yet another consultation last April, this time on fee remissions for courts and tribunals, with a four-week period for responses, and published their response, conveniently, no doubt, for them on 9 September, when Parliament was in recess. Interestingly, that document introduced a disposable capital test and airily dismissed concerns that this might have a deterrent effect on claimants. There is, incidentally, currently concern about an apparently significant drop in employment tribunal claims following the hotly contested introduction of fees, which were widely regarded as too high. Perhaps the Minister would save me the trouble of tabling a Question by agreeing to write to me in the new year with details of the number of claims before and after the imposition of charges. It is, after all, an analogous situation to that which this clause deals with.

The Government’s latest consultation paper refers to interviews and research, both of which are said to have been the subject of a full report published alongside the consultation, but for which no references are given. Painting, as ever, with a broad brush, the Government say that they believe,

“that all those who issue a court case benefit equally from the existence of the civil justice system as a whole and should share in contributing towards its indirect costs”,

and, therefore, they divide the indirect costs of the system between all cases that are issued. It is not clear to me whether the apportionment applies equally to all cases, or whether it is in some way proportionate to the amount claimed. On the face of it, this looks very like the application of the principle of the poll tax to the cost of making a claim to a court or tribunal.

Paragraph 60 of the consultation proposes to combine the fees for issue and allocation to a track—the small claims track, fast track or multi-track—without any clear explanation of the rationale. Paragraph 63 acknowledges that the hearing fees for the higher track cases are higher than the average cost of such, but it does not propose to adjust them, thereby importing the concept of more than full-cost recovery by the back door. In divorce cases, while the Government say, at paragraph 71, that they will maintain the issue fee at £410, already above the actual cost price of £270, they will impose an extra charge of £300 to cover the cost of the remainder of the proceedings. Given that, in many cases these will be a mere formality, this looks suspiciously like another example of more than full-cost recovery, though not, of course, for the complex cases where there are major issues as to income and property, where such charges might be thought to be not unreasonable.

Ominously, the Government propose changes to the fees in money claims, including, no doubt at the behest, yet again, of their friends in the insurance industry, in personal injury cases. They go so far as to say that their proposals, if applied in their entirety, would lead to reduced fees on claims of around £10,000 or less but, typically, they will not be changing those fees.

The Committee will understand that there are many questions about these proposals, but there is an overriding question about the abuse of the legislative process which, not for the first time, is being perpetrated by this Government. I acknowledge and welcome the concessions made in the Government’s amendments as far as they go. They will ensure that any increase in fees other than inflation-related increases will have to be approved by affirmative resolution, and that is a welcome improvement. But will the Government consider the amendments I have tabled, which seek to ensure that access to justice is a prime consideration before setting the size of the fee increases, and that the remission arrangements are properly scrutinised and agreed? Will they revise the existing remission arrangements in the light of the proposed major changes, and will they review the proposals to take disposable capital into account?

Given the shambles of the process thus far, I have to say that on Report the Opposition may well press for a sunrise clause along the lines of Amendment 95D to ensure that there is proper parliamentary scrutiny of the complete package when its final contents are developed. As I say, that is unlikely to be the case before this Bill receives its Third Reading.

In addition, in the mean time it will be helpful to know whether, in the indefinite age of austerity that the Chancellor has decreed for public services, the principle of full-cost recovery, and especially of more than full-cost recovery, will be extended to other services such as further and higher education, prescription charges or other parts of the health service. By what logic, one wonders, would the Government differentiate between some of the proposals they are making in this Bill, incorporating more than full-cost recovery for access to justice, and those or other public services? I beg to move.

[Lord McNally]

My Lords, I shall not try to follow the noble Lord, Lord Beecham, down his culinary route. One of the pleasures of responding to the noble Lord is that it is almost like doing a school exam. So many questions are fired at you in quick succession. If I do not cover them all in this reply, I will carefully read what he has said, note the question marks that Hansard inserts and try to send suitable replies, including on the point he made in opening about the figures for claims at employment tribunals after the introduction of charges.

Perhaps I may deal first with the two government amendments in the group, namely, Amendments 95B and 95C. These give effect to the recommendation made by the Delegated Powers and Regulatory Reform Committee relating to the power to charge enhanced court fees. Clause 155 currently provides that, when the power to set a fee or fees at an enhanced level is used for the first time, the relevant statutory instrument should be subject to the affirmative resolution procedure, with any subsequent changes to the fee or fees being subject to the negative procedure. The Government’s intention was that the principle of charging an enhanced fee should be subject to a full debate in Parliament, after which the negative procedure would provide the necessary level of parliamentary oversight for any subsequent changes to the fee.

However, the Delegated Powers and Regulatory Reform Committee was concerned that this would provide the Lord Chancellor with a very wide discretion to set the level of fees. Although the legislation requires the Lord Chancellor to have regard to the financial position of the courts and tribunals and to the competitiveness of the legal services market when setting fees, the committee felt it was possible that, in future, very different considerations might apply and that these should be taken into account. The committee therefore recommended that the power to set an enhanced fee should be subject to the affirmative procedure unless the amendment is being made solely to reflect the change in the value of money. The Government agree that this change would be appropriate and, accordingly, Amendments 95B and 95C will implement this recommendation.

I turn now to the amendments in the name of the noble Lord, Lord Beecham. Amendments 95AA and 95AB seek to require the Lord Chancellor to have regard to the principle of “access to justice” when setting fees. I can wholeheartedly agree with the noble Lord that this is an important consideration. However, the Lord Chancellor is already under a duty to do exactly this when setting fees under Section 92 of the Courts Act 2003. Subsection (3) of that section provides that the Lord Chancellor,

“must have regard to the principle that access to the courts must not be denied”.

Amendment 95BA seeks to make the remission scheme subject to the affirmative resolution procedure. As noble Lords will be aware, there is already a remission scheme in place. Indeed, the scheme has been in place for a number of years, but was updated and revised as recently as 7 October 2013 when the Courts and Tribunals Fee Remissions Order 2013 came into force. It is the Government’s intention that the existing remission scheme will continue to apply in all cases where enhanced fees would be introduced.

The current scheme provides for certain court and tribunal fees to be remitted in whole or in part where litigants meet certain criteria based on their disposable capital and gross monthly income. The existing scheme is made under the same order-making powers as apply to the setting of fees, for example, Section 92 of the Courts Act 2003, which relates to fees payable in respect of proceedings in the senior courts, county courts and magistrates’ courts. As the remission scheme relies on the same order-making powers as the statutory instruments prescribing court and tribunal fees, they are subject to the same level of parliamentary procedure—namely, the negative procedure. In its seventh report of Session 2002-03, the Delegated Powers and Regulatory Reform Committee welcomed a government amendment to make the order-making power in what is now Section 92 of the Courts Act 2003 subject to the negative procedure. Given that previous endorsement by the committee, and the fact that the current arrangements have been in place for some years, I see no good reason why we should now alter the level of parliamentary scrutiny.

Finally, Amendment 95D would require the Lord Chancellor to report to Parliament on the outcome of the public consultation on these proposals and to obtain approval for its response. As the noble Lord indicated, the Government on 3 December set out their detailed proposals for using the power to set enhanced fees in the consultation paper, Court Fees: Proposals for reform. This seeks views on a series of proposals for charging enhanced fees, including for money claims, in commercial proceedings and for divorce, alongside proposals for reducing the current deficit of £100 million in the cost of running the Courts and Tribunals Service. The consultation closes on 21 January. In the normal way, we will publish a response to that consultation in due course and Parliament will have an opportunity to consider it when we lay a draft order under Clause 155. I therefore take Amendment 95D as a probing amendment rather than an attempt to enshrine in statute the normal process of reporting on the outcome of a consultation.

20:47

As I have said, it is our normal practice to publish a government response to a consultation once we have considered the views of consultees, and we will do so with the response to these proposals. Those enhanced fees we decide to introduce following the consultation will be brought forward by statutory instrument, subject to the affirmative procedure. The Government believe that a full debate in both Houses with the benefit of the consultation outcome will provide sufficient parliamentary scrutiny of the proposed enhanced fee increases.

For all these reasons, the Government consider the amendments of the noble Lord, Lord Beecham, to be unnecessary. I hope that, as I intend to read his speech carefully to see his questions, he will read my speech carefully to see my answers. I hope he will withdraw his amendment.

[Lord Beecham]

My Lords, I always read the noble Lord’s speeches carefully and I am certainly willing to do so on this occasion. I am grateful to the Minister for his reply, and I suspect that this short debate will be seen as something of an aperitif for the rather more weighty matters that we are about to discuss when the noble Lord, Lord Carlile, moves his prayers to annul two other orders.

The Minister fails to acknowledge, however, that a negative procedure might be sufficient when one is dealing with a stable situation, but the Government are here proposing an entirely new basis for the levying of fees: in the first place, to ensure full-cost recovery, but, more significantly, potentially going beyond that to ensure more than full-cost recovery. That puts a whole different perspective on the likely impact of fees on litigants or applicants to tribunals. In these circumstances, a different procedure than the conventional negative procedure is required, at least in the early stages. This is a matter to which we may wish to return on Report.

The consultation effectively comes after the completion of the process of enacting this Bill, which will allow the Government to introduce new principles. It is the wrong way around: the consultation should have taken place and we should have had the result of that before we discussed this clause, which makes a significant difference to the way our courts operate. It is now too late for that to happen and that is a matter of regret. I am afraid that I do not resile for a moment from the criticisms I made, not of the Minister, who is not personally responsible—he is well aware of that—but of others occupying, perhaps, more senior positions, who ought to reflect on the way they are treating Parliament and its due processes when they push forward proposals of this kind in this way. Nevertheless, in the circumstances, I beg leave to withdraw the amendment.

Amendment 95AA withdrawn.

Amendment 95AB not moved.

Amendment 95B

Moved by

[Lord Taylor of Holbeach]

95B: Clause 155, page 125, line 24, leave out “for the first time”

Amendment 95B agreed.

Amendment 95BA not moved.

Amendment 95C

Moved by

[Lord Taylor of Holbeach]

95C: Clause 155, page 125, line 27, at end insert—
“(8) But subsection (7) does not apply if the statutory instrument only adjusts a fee to reflect changes in the value of money.”

Amendment 95C agreed.

Clause 155, as amended, agreed.

Amendment 95D not moved.

Clause 156 agreed.

Schedule 9: Minor and consequential amendments

Amendment 96 not moved.

Amendments 97 to 99

Moved by

[Lord Taylor of Holbeach]

97: Schedule 9, page 193, line 21, at end insert—
“Police and Criminal Evidence Act 1984 (c. 60)(1) Schedule 2A to the Police and Criminal Evidence Act 1984 (fingerprinting and samples: power to require attendance at police station) is amended as follows.
(2) In paragraph 1 (fingerprinting: persons arrested and released)—
(a) in sub-paragraph (2), for “section 61(5A)(b)” there is substituted “section 61(5A)(b)(i)”;(b) after sub-paragraph (3) there is inserted—“(4) The power under sub-paragraph (1) above may not be exercised in a case falling within section 61(5A)(b)(ii) (fingerprints destroyed where investigation interrupted) after the end of the period of six months beginning with the day on which the investigation was resumed.” (3) In paragraph 2 (fingerprinting: persons charged etc)—
(a) in sub-paragraph (2)(b), for “section 61(5B)(b)” there is substituted “section 61(5B)(b)(i)”;(b) at the end of sub-paragraph (2) there is inserted “, or(c) in a case falling within section 61(5B)(b)(ii) (fingerprints destroyed where investigation interrupted), the day on which the investigation was resumed.”(4) In paragraph 9 (non-intimate samples: persons arrested and released)—
(a) in sub-paragraph (2), for “within section 63(3ZA)(b)” there is substituted “within section 63(3ZA)(b)(i) or (ii)”;(b) after sub-paragraph (3) there is inserted—“(4) The power under sub-paragraph (1) above may not be exercised in a case falling within section 63(3ZA)(b)(iii) (sample, and any DNA profile, destroyed where investigation interrupted) after the end of the period of six months beginning with the day on which the investigation was resumed.”(5) In paragraph 10 (non-intimate samples: persons charged etc)—
(a) in sub-paragraph (3), for “within section 63(3A)(b)” there is substituted “within section 63(3A)(b)(i) or (ii)”;(b) after sub-paragraph (4) there is inserted—“(5) The power under sub-paragraph (1) above may not be exercised in a case falling within section 63(3A)(b)(iii) (sample, and any DNA profile, destroyed where investigation interrupted) after the end of the period of six months beginning with the day on which the investigation was resumed.””

98: Schedule 9, page 196, line 21, at end insert—

“Police Reform Act 2002 (c. 30)

In Schedule 4, in paragraph 1(2), the word “and” at the end of paragraph (ca).”

98A: Schedule 9, page 197, line 2, at end insert—
“Prison Act (Northern Ireland) 1953 (c. 18)In section 38 of the Prison Act (Northern Ireland) 1953 (arrest, etc, of persons unlawfully at large), in subsection (4), for “the last foregoing sub-section” there is substituted “subsection (2)”.”

98B: Schedule 9, page 199, line 11, at end insert—
“(1) Section 204 of that Act (warrant issued by category 1 territory: transmission by electronic means) is amended as follows.
(2) In subsections (1)(c) and (2)(c), for “a qualifying form” there is substituted “a form in which it is intelligible and which is capable of being used for subsequent reference”.
(3) In subsection (6)—
(a) at the end of paragraph (a) there is inserted “and”;(b) paragraph (c) and the word “and” before it are omitted.”

99: Schedule 9, page 199, line 28, at end insert—
“section 189E(1)(b);””

Amendments 97 to 99 agreed.

Schedule 9, as amended, agreed.

Clause 157: Orders and regulations

Amendment 100

Moved by

[Lord Taylor of Holbeach]

100: Clause 157, page 126, line 5, leave out “containing an” and insert “containing—
( ) an order under section 4(5),( ) an order under section 50(4), or( ) an”

Amendment 100 agreed.

Amendment 100A not moved.

Clause 157, as amended, agreed.

Clause 158 agreed.

Clause 159: Extent

Amendments 101 to 104C

Moved by

[Lord Taylor of Holbeach]

101: Clause 159, page 126, line 40, at end insert—
“( ) sections (Information about guests at hotels believed to be used for child sexual exploitation) to (Offences);”

102: Clause 159, page 126, line 41, leave out “section” and insert “sections (Power to take further fingerprints or non-intimate samples), (Power to retain fingerprints or DNA profile in connection with different offence) and”

103: Clause 159, page 126, line 42, leave out “135” and insert “(Powers of community support officers) and Schedule (Powers of community support officers)”

104: Clause 159, page 127, line 5, leave out “, 101” and insert “to (Possession of firearms by persons previously convicted of crime)”

104A: Clause 159, page 127, line 21, leave out “and” and insert “to”

104B: Clause 159, page 127, line 23, leave out “Section 109 extends” and insert “Sections 109 and (Discount on sentence for time spent in custody awaiting extradition: Scotland) extend”

104C: Clause 159, page 127, line 24, leave out “Section 120 extends” and insert “Sections 120 and (Discount on sentence for time spent in custody awaiting extradition: Northern Ireland) extend”

Amendments 101 to 104C agreed.

Clause 159, as amended, agreed.

Clause 160: Commencement

Amendment 105 not moved.

Clause 160 agreed.

Clause 161 agreed.

House resumed.

Bill reported with amendments.

Criminal Defence Service (Very High Cost Cases) (Funding) Order 2013

Wednesday 11th December 2013 Lords Chamber

Motion to Annul

20:52

Moved by

[Lord Carlile of Berriew]

That a Humble Address be presented to Her Majesty praying that the order, laid before the House on 1 November, be annulled. (SI 2013/2804)

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee.

[Lord Carlile of Berriew (LD)]

My Lords, in speaking to the two Motions standing in my name on the Order Paper, I should start by saying that I do so with sadness and regret. The fact that we are having this debate on annulment Motions at all is a symptom of the breakdown in trust between barristers in criminal practice and the Lord Chancellor’s Department. I have been at the Bar for 43 years now, with 42 years in practice. Over that period there have been pinch points, there have been negotiations about costs, but they have always been resolved by constructive engagement. We are now in a situation in which, for the first time in my time at the Bar, barristers are intent on withdrawing their labour, and they are at loggerheads with a Government who a great many of them have supported over the years. That is a sad state of affairs.

I declare my interest at the outset. I am a barrister who has conducted several very high cost cases, the category on which I will focus. I was but am no longer involved in a still current case which is not affected by the changes. I am very grateful to my noble friend the Minister for meeting me, with two officials present, on 26 November. I thought the meeting was useful and possibly constructive for the future. I hope he shares that view.

What are VHCCs? They are called “very high cost cases” but that is somewhat pejorative. In truth, the letters could also stand for “very high complexity cases”. They are few in number and among the most complex cases that come before any court, criminal or civil, in terms of the law that is involved and the facts that they engage. All, by definition, have to be expected to last more than 60 court days—they are massive cases. Substantial prison sentences may ensue for the people convicted, and usually those convicted in this class of case are not career criminals but people of previous good character.

A current case of which I am aware involves nine parties, including the prosecution; 20 counsel, including nine QCs; and between 5 million and 8 million pages of documents disclosed. One might ask, “What all those lawyers are doing, trying to read between 5 million and 8 million pages for the defence. Are they just making work for themselves?”. No, not at all. “Disclosed” in this context means that the documents have been described by the prosecution as either materially undermining the prosecution case or materially assisting the defence case; there is a clear obligation on the defence to examine those documents as best as it can.

These cases are every bit as complex as some of the legendary civil cases involving Russian oligarchs and the like about which we read, and the huge commercial disputes that some of the distinguished noble and learned Lords now sitting in the Chamber were involved in in practice and as judges. They demand the same legal and analytical skills as the most difficult civil cases. There is an added element. All these cases are heard by juries; so the hugely complex material has to be translated, as it were—transposed—into a situation where it can be understood by a jury.

Some defendants are wealthy and would like to pay for their own defences, but they are not allowed to by the state. For the most part they cannot use their assets to pay for their defences because they have been seized by the state. They are the unwilling people who have been thrown on to legal aid and basically obliged to take it or defend themselves. We have had arguments in this House in the past about whether these assets should be unfrozen under careful scrutiny and management to allow them to be used to pay for their defences, but for a completely strange reason the Government are not prepared to allow this to happen. I suggest to your Lordships that that is a stubborn, unreasonable and unrealistic approach.

As I have said, these defendants are thrown unwillingly on to legal aid representation, like it or not, and the public pay. Theoretically, if they are convicted some of the costs can be recovered, but I would like to hear from my noble friend what proportion of the defence costs have been recovered in these cases. Defence costs are notoriously difficult to recover. There are a legion of anecdotes, mostly true, about how the families of those convicted can sit quietly on the assets that have been frozen and live, for example, in expensive family homes for years. Recovery is very unsuccessful.

There seems to be an implication that the Bar is being greedy, setting fees that are totally unrealistic, but I remind your Lordships and particularly my noble friend that these fees have never been set by the Bar or by any other advocate. They have always been set by the Government of the time, and, until now, after consultation, discussion and negotiation, which is a process founded on reason.

Unfortunately VHCCs have developed a substantial bureaucracy which is extremely frustrating to those of us who have had to conduct them. They involve case managers who are civil servants. I have occasionally suggested to these case managers that they are “valued members of the defence team”, a phrase that I have repeated on a few occasions in messages to them. Even that flattery has failed to secure a single attendance by a case manager at a conference in the case, or a single attendance at court when there was a critical incident occurring in a preparatory hearing or the trial. This is mere bureaucracy, which adds totally unnecessarily to the cost of these cases, the fees for which could be assessed by the very people who are sitting in the court—as used to be the case—the associates or court clerks, who saw what was going on and were able to see how much work each advocate had done in the case. The lazy got less than the assiduous.

21:00

These two statutory instruments imposed, without consultation, cuts of at least 30% in the fees for these cases. It is an extraordinarily brutal way of approaching a perceived problem. The system is broke, actually. It is founded on payment per hour for preparation and per minute for documents. This is not by any means a satisfactory basis. Already much of the work on the old fees is unpaid. If we say that 30 seconds per page is allowed for reading what are sometimes extraordinarily difficult financial documents—and that does happen, commonly—much work is unpaid. In some cases, there is a vast proportion of unpaid work because of the massive detail that takes much longer to assimilate than the time that is allowed. In other cases, payment by the hour may create less rather than more efficiency of preparation.

The system is not ideal. It is worthy of root and branch reform. Improvements can be made, but they have to be made by co-operation and negotiation. Cutting fees by 30% at a stroke is a crude way of dealing with these problems. I say to my noble friend that it would be far better to suspend the operation of these instruments and renegotiate with a profession that is willing to help.

Some specific issues have arisen in relation to these instruments. The statutory instrument on VHCCs has been strongly criticised by the House of Lords Secondary Legislation Scrutiny Committee in its 18th report. Among other things, the committee suggested that,

“the House may wish to press the Ministry of Justice to provide a more robust argument to support its assertions that the instruments will not have an impact on the administration of justice”—

by which it means an adverse impact—and the committee therefore drew these instruments,

“to the special attention of the House on the ground that they may imperfectly achieve their policy objectives”.

I agree.

Then we have the extraordinary point that the Ministry of Justice is committing wholesale state breach of contract, using statute to justify wholesale breach of contract—quite simply reneging on contracts it has entered into. On previous occasions when the Government of the time have cut legal aid fees, they have always reduced the fees paid to all future cases. Here, they have cut the fees in mid-case. People who have been committed to cases have seen a savage reduction in their fees—I repeat, without consultation. They will be paid 30% less. It does not set a good example of how professional organisations should behave and it is a shabby example of government behaviour.

In addition, legal aid advocate fees have been cut disproportionately in comparison with other publicly funded professions. We are used to hearing figures trotted out. Usually Ministers quote VHCC category 1 fees from the most serious cases, which in fact cover only 1% of VHCCs. Last year 59% of VHCC fees were paid at category 3, which pays £91 per hour for a QC and £61 for a led junior. In crude terms, that sounds like quite a reasonable amount of money, but let us not forget that every barrister has a chambers, staff, office costs and VAT; as self-employed individuals, they have no pension provision unless they pay for it, they have no sick pay and they do not get paid when they are on holiday. The reality of those hourly rates is that the barrister is lucky if, in truth, he or she is taking home more than about 30% of the gross fee to pay for family life.

They are not high fees when we remember that these cases are, as I said, the most complex and serious ones, requiring the most skilled and most experienced advocates—people who, if they were doing other work, would be earning several times that amount in the private market, which the Lord Chancellor has quite rightly been saying is one of the jewels in UK plc’s crown. There is sheer hypocrisy, in my view, in saying that we want the jewel in the crown in those civil cases for which foreigners are paying but we do not want to have the same quality of representation in domestic cases, albeit for lower fees, but reasonable ones.

What has happened? The rates in the statutory instrument came into force on 2 December and they have already been proved to be below the market rates at which those with the necessary skills will work. To take a single case as an example, on 6 December at Southwark Crown Court, in a VHCC with five defendants, the advocates of three of them exercised their contractual right to terminate their VHCC contract when the 30% cut came into force. One solicitor contacted 47 sets of barristers’ chambers and 330 barristers with suitable experience. At the new rates, not one was prepared to do the cases. The result is going to be that either these cases are done by people who do not have any relevant experience and do not have the requisite skills, or people simply go without advocates.

What will happen in court? There are people in your Lordships’ House who have immense experience—I hope that we shall hear from them—about what happens in court when a case is not done properly. It takes extra time. It takes more intellectual energy from the judge. It is very tiring. Above all, it raises the danger of serious miscarriages of justice. In complex cases lasting many months, as most of these do, the cost to the country of a failure because of the case not being done properly because of not having appropriately skilled advocates, is immense. The figures that the Government have produced are simply misleading.

I have taken up enough time, and I look forward to hearing from others in this debate. However, I urge my noble friend to accept that he should go back to the drawing board. I urge the House to accept that this is an issue on which—unpopular as barristers sometimes are—they are probably right. At the very least, the introduction without any proper consultation, in breach of contract as I have described, is really not acceptable.

[Baroness Deech (CB)]

My Lords, I speak in support of the noble Lord, Lord Carlile. The extent of the concern about this is evident in the noble and learned Lords and noble and legally aware Lords who are gathered here tonight. In fact, the cuts to legal aid and the way in which they are being implemented are set to take their place in the great pantheon of government failures, which were foreseen but went ahead anyway. The list includes home improvement packs, ID cards, the Millennium Dome, child support and so on. I predict with confidence that, in a few years’ time, people will look back at the legal aid cuts and add them to that list. They amount to the suffocation of the criminal Bar and the weakening of the quality of the judiciary who would have been expected to emerge from it.

I have an interest to declare as the regulator of the Bar, but not as its representative, so I am reluctant to comment on the level of the cut—30%—to payments to the Bar, but the effects are clear to a regulator. They will damage the administration of justice, the rule of law and equality and diversity at the Bar. There will be too few advocates ready to take cases at those miserly rates, as we have seen. They are dropping them now, mid-case, and will refuse new instructions at those rates. We are talking about contracts entered into before 2 December where the case will be heard after 31 March, so advocates are being forced by the statutory instrument to take a 30% cut in their contracted rates mid-case.

The Ministry of Justice may be relying on the profession’s sense of duty to continue the case at 30% less, but if the case is dropped, it will end up spending more because of the cost of getting another advocate to repeat months of work already undertaken. The Ministry of Justice is breaching contracts retrospectively and placing future VHCC cases in the statutory instrument category, not the former contract mode.

As a regulator, I say right now that the retrospectivity of the statutory instrument is the most offending feature. If the Government simply changed the date of effect, so that only new instructions offered in future were subject to the cuts—objectionable although they are—some of the worst effects on the administration of justice would be mitigated. Will the Minister tell the House why that should not be the case? Retrospectivity is contrary to the law of contract and the rule of law. For example, when income tax rates are cut, the Government do not expect the payer to take advantage of the new rates before the starting date. In fact, such cuts are normally given a starting date well in advance, to allow parties to plan their affairs accordingly.

The Government have tried to make the UK the world’s pre-eminent destination for swiftly resolving international high-value legal disputes. That is increasing revenue. The UK legal sector output was £27 billion in the most recent figures, and is set to grow. It has exported £3.6 billion of services and is the largest, by a long way, in Europe. Some 14% of the world’s largest law firms are headquartered in London. The Government should not trumpet the excellence of the UK—as indeed it is—as a global legal centre whose success and desirability depends on the utter reliability of adherence to the rule of law and the quality of its lawyers, and then cut at the roots of access to justice and the development of lawyers here. I can describe it only as double standards.

There cannot have been a proper impact assessment of the cuts in terms of lost business, delayed trials and the effect on equality and diversity at the Bar. The Bar is proud of its record in enabling the underprivileged and those from non-traditional backgrounds and ethnic minorities to enter the profession. Up to 19% of pupillages in recent years have gone to such young people. That cannot now be maintained. Young people cannot be expected to go into criminal or family law at those rates when they have higher than ever university debts behind them and, of course, the cost of qualifying as a barrister. In the past, they were happy to take that on the chin because they knew that at the outset, they would get some legal aid work—low rates though they were, they were enough to survive on. Now, in all conscience, how can we encourage them to join the Bar?

21:15

We are talking about saving £220 million per annum. Submissions to the Ministry of Justice on this topic allege that cuts have already been made and that there are other ways of making economic efficiencies without damaging the product itself. Most government cuts have a policy behind them which is often controversial but comprehensible. For example, cuts have been made in welfare so that it pays to work; unpopular charges for spare bedrooms have been applied to try to rationalise housing allocation. One may not agree with it, but there is a policy. In legal aid, there is no policy in cutting, save a crude cut. It is not alleged that these cuts will make the courts run better, free more funds for them, make professionals more efficient or increase consumer access. There is no rationale at all except a cut.

One must thus consider the relative morality and effectiveness of government expenditure in these times of austerity. Take, for instance, the recently reported loss of some £40 million on failed universal credit technology, or reports that much foreign aid goes into the wrong pockets and does not reach the victims of disaster. The Public Accounts Committee recently pointed out that the national programme for IT in the NHS has spent more than £3 billion with next to nothing to show for it, and that the benefits do not outweigh the costs which will, in the end, be at least £10 billion. The regional fire control project was scrapped after £500 million had been wasted. One could go on and on.

The Government need to consider what is good economy and what is bad. The savings of £220 million a year in legal aid will not materialise if courts and cases are disrupted. To maintain the rates, miserly though they already are, would be a good investment in the administration of justice and the rule of law. I am certain there are ways—noble Lords will, no doubt, think of others—whereby funds can be taken from projects that are not delivering, such as the ones I just mentioned, to keep going the administration of justice and the rule of law for which Britain has been famous for centuries.

Having put on record my concerns and those of others about the effects on our renowned legal system, the regulator’s main difficulty would be eased if the Government made the changes wholly prospective, so that they applied only to instructions newly offered after 2 December. Then, at least, the strictures about breaches of contract and the rule of law will be minimised. I urge the Government to think again about the date of implementation. Will the Minister assure us that he will do so and tell the House how much it would cost to extend the date of activation so that the new fees apply only to instructions first offered after 2 December? I urge the ministry to consider the legal system and its international reputation with due care. Do not kill the goose that lays the golden eggs.

[Lord Woolf (CB)]

My Lords, I must start by making a disclosure about my judicial career, my career at the Bar and the fact that, since I retired as a judge, I have been a non-resident member of a barristers’ chamber. Of course, in accordance with the rules within this jurisdiction, a retired judge cannot go back to the Bar.

I congratulate the noble Lord, Lord Carlile, on bringing this Motion and on the way he presented it. I draw significance from the fact that the House has heard two speeches from people who, in very different ways, are able to talk about the issues before us, which have been rightly described as highly relevant to the administration of justice and the rule of law.

Having said that, I should make it clear that I also support what the noble Baroness, Lady Deech, has said from a different aspect, except that I would draw a different view from hers as to the benefits of merely postponing the date of implementation. I suggest that that would merely be sticking plaster on a very gangrenous wound. Something much more is required of the Government if they are to recognise the responsibilities that they have to the rule of law, and to which I know that the Minister attaches great importance.

Equally, I understand why the Government felt that there was a need to take action to curb the costs of the cases with which we are concerned. However, in considering whether the action taken is appropriate, I suggest that we have to ask ourselves three questions. First, will the action proposed achieve its purpose—that being to save money? Secondly, is this action disproportionate in the way that it affects a particular section of the legal profession? Thirdly, does it create a serious risk of damaging severely the criminal justice system of this country? I suggest to the House that, judged by those questions, this proposal fails all three of the matters that I have referred to as requirements.

It is the third effect with which I am primarily concerned, although indirectly that involves consideration of the first and second questions that I have identified as well. We are considering here the most eminent practitioners in the field of criminal law in this country. The noble Lord, Lord Carlile, has painted a vivid picture of the sort of cases that we are involved in. It is vital for this country’s justice system that those most difficult and demanding cases are properly tried. If they are not properly tried the whole of our criminal justice system will be under a dark shadow, which this Government will have created without proper consideration of the information available, to the extent to which consultation has taken place. I say that having been in practice at a time when the Bar would, to fulfil what it saw as its obligation to justice, take on cases up and down the country for the princely fee of two pounds four shillings and sixpence, irrespective of your seniority. Eminent counsel took those cases and took their share of responsibility for that. From what I know of the Bar standards today, I have no doubt that they would do it today if they had to.

However, you cannot expect people to go into a profession, rise to its top and be treated to the imposition of an arbitrary cut of the scale proposed here without damaging the reputation of that profession. These people are not only those on whom we rely to conduct the most difficult cases at present; they are also those we rely on to be our great criminal judges of the future. We also rely on them, by the way they conduct their practice, to ensure that the Bar gets in its recruitment programme among the brightest and the most able youngsters going through our universities today. Each of the Inns of Court has programmes whereby the senior members of the Bar—the sort of members of the Bar I am talking about—visit universities and talk to the students who want to know whether they should come to the Bar and, if they do, what sort of work they should do. They want to know whether they should take the risk of coming to the Bar in the present circumstances.

Certainly, when I was doing that, I was always able to say to them, “You will have a profession which demands a tremendous amount from you, but you will have the satisfaction of knowing that you are involved in a profession where the public at large respect what you do and which contributes to producing a quality of criminal justice that is admired around the globe”. In those circumstances, they have continued to come to the Bar. Who, however, will be able to tell people to come to the Bar when they know that they will be dependent on a Government who apparently consider it appropriate to impose a cut retrospectively, as the noble Baroness, Lady Deech, indicated, on the profession? How can you do so, as a person who has the well-being of these youngsters who are thinking of coming to the profession at heart—I speak as the father of three sons who have come into the law—if you know that what we have heard about will be on the cards when it comes to their career?

There is very real reason for the Government to reconsider their approach in this matter. It is very important that they do so. If they do not, they will unintentionally cause serious harm to a profession that it will take years, if not generations, to undo. What is at present a profession that the brightest and most able want to enter, will be one that they will feel they cannot possibly enter because the risks of doing so are so great.

I have read, of course, the report of the statutory instruments committee. I note what it says about the Government thinking it will be possible to get people not out of the top drawer but from a lower drawer to do these cases. The Government may be right in saying that, but what will be the calibre and quality of those persons? I can say, on the basis of my judicial career, that, as the judiciary works in this country, it is dependent on the Bar. It is dependent on the Bar not only for recruits but for the help it gives to the judiciary to do justice. You do not save money just by fiddling with fees. If there is the need to create savings that the Government say there is, they should have taken action before to ensure that judges have the benefit of barristers who are paid not by the hour or by the day, but on a more sensible basis in respect of cases so that they have the same incentive as the justice has that cases should be disposed of expeditiously and not in the way that sometimes happens because of how our fees are structured. Reforms were possible. Cases require management, but it has to be possible for the management to take place economically.

21:29

[Lord Brown of Eaton-under-Heywood (Non-Afl)]

My Lords, I do not think I have any relevant disclosures to make. I have not had a private client for some 34 years since I followed the noble and learned Lord, Lord Woolf, as Treasury Counsel, and I shall never have another.

This very afternoon, in answer to a Question about our trade prospects with China, the Minister, the noble Lord, Lord Livingston, said:

“The UK legal sector is a great strength … the rule of law and support from professional services are very strong. I will certainly seek to champion the legal sector going forward”.

I believe that I quote him accurately. I just wish that he would share his views and commitment with the Lord Chancellor.

For many years the criminal Bar has been the poor relation of the various specialist Bars. Over the past decade it has already suffered a series of cuts in public funding. Of course it does not earn for the Exchequer the riches that, for example, the commercial Bar earns when acting, very often on both sides of the litigation, in commercial disputes. However, I argue that the work undertaken by the criminal Bar is altogether more important than most commercial work. Most commercial cases result ultimately just in the adjustment of companies’ balance sheets and book entries; they rarely affect the quality of people’s lives. The outcome of criminal cases, by contrast, is generally critical to real people; usually their very liberty is at stake. More than this, the strength of the rule of law, and indeed public respect for it, depends above all else on the proper administration of the criminal justice system.

Very high cost cases, the subject of the swingeing further cut in fees under consideration here, are generally the most demanding of all the cases in the criminal calendar, as the noble Lord, Lord Carlile, has explained, and usually, and appropriately, they are undertaken by the elite of the criminal Bar. There already exist few financial attractions for those contemplating practice, or indeed already practising, in crime at the Bar. If you impose these additional cuts, that elite will fall away.

The Attorney-General himself is said to have acknowledged at a recent Bar conference that he no longer expected people of excellence to come to the criminal Bar. Consider, if you will, the effect of that upon the future quality of those who practise at the very heart of the criminal justice system. Consider its impact on recruitment, as the noble and learned Lord, Lord Woolf, has made plain. Consider its impact on the rule of law, and consider its inevitable consequences in terms of the future judiciary. Where shall we find the next generation of criminal judges? What indeed about the present position, as described by the noble Lord, Lord Carlile, with current cases going hopelessly awry because, understandably, Counsel are on occasion declining to continue with cases with their fees savagely and retrospectively cut?

Of course I recognise that the Ministry of Justice has many calls upon its budget and that we live in harsh economic times, but I just cannot accept that these difficulties justify cuts so inevitably and gravely damaging to the criminal Bar, to the administration of justice and to the very rule of law. If drastic economies in the legal aid budget are required, and if they must be found in relation to the kind of cases in question here, better far to my mind that the department revisit a measure long ago suggested but, regrettably, hitherto rejected: the ending of the automatic right to jury trial in complex and protracted fraud cases. Indeed, it is my own clear opinion that not merely would this save countless millions of pounds of legal aid funds, it would also make for better justice.

That, of course, must be for another day. In the mean time, let us surely strive to safeguard rather than destroy the quality of the existing criminal Bar. Let us annul, not merely postpone, this order and these regulations. I, too, support the Motion.

[Lord Hope of Craighead (CB)]

My Lords, along with others, I am extremely grateful to the noble Lord, Lord Carlile, for tabling these Motions so that we can debate these important measures. I should make it clear that I have never practised at the English Bar and never sat in an English court. My experience has been of practice, both civil and criminal, north of the border. However, although I have never sat in an English court, I have sat in a United Kingdom court, have had some experience of dealing with criminal cases and think that I can speak with some authority in support of the points which have been made so effectively by the noble and learned Lords, Lord Woolf and Lord Brown of Eaton-under-Heywood.

A cut of 30% on fees previously set by the Government surely must be regarded in the present financial climate as severe. I appreciate, of course, that the Minister and those for whom he speaks in this House have very little room for manoeuvre, given the cuts that already have to be made across the entire department. However, it would help if the Minister in his reply were able to put these two measures into their overall context. As I understand it, we are dealing here with cases that take a very long time and provide the advocate with the benefit of continuity of employment throughout a long period. As has been pointed out, these are complex cases which require unusual amounts of work outside the court room and are, in comparison with rates elsewhere in the system, better paid. I could therefore perhaps understand it if the strategy behind these measures was to reduce the cost of legal aid at this level, so as to keep any reduction at the lower levels, with which we are not concerned this evening, to an absolute minimum—or even to preserve the existing position at the lower levels. After all, it is at the bottom of the scale that there is real hardship. One hears not infrequently that the costs of travel and other overheads exceed the amounts payable as fees to the advocate. If there is any margin over that, it is often very small. I would be grateful if the Minister would say whether this is what the Government have in mind, and give us an assurance that there is no question of cuts of this dimension being made elsewhere across the system. That would be some reassurance to those who are deeply concerned about what the Government have in mind in the overall planning.

I will direct my remarks to the amendment set out in regulation 3(5) of the Criminal Legal Aid (Remuneration) (Amendment) Regulations 2013, as the provision which it seeks to insert affects the advocate’s freedom of contract. The standard terms already provide for their amendment within the terms of the contract. There is a contractual power to do this, but it is not entirely unqualified; this is not the place to debate how extensive that power is. However, when it comes to altering the terms for payment, I suggest that it is a question of degree. The stage may be reached when the amendment proposed, purportedly within the contract, is so great that it cannot be altered without the advocate’s agreement. In that situation, if agreement is not reached, the advocate would have a right to terminate the contract.

That leads me to consider what the effect would be if the amendment goes through. As I understand it, it would tie the advocate who agrees to this form of contract to the rates set out in Schedule 6. That being so, those rates can then be amended by a further order without the need for the advocate’s agreement. There is no need to alter the contract: what one does is to look at the schedule and alter the schedule by a further order. Once the advocate is tied in to such a contract, he or she has no escape from it, however much the reduction in the rates may be. As there is every prospect, if one is realistic, that the cuts now proposed will not be the last, the stage could be reached when the rates will become wholly uneconomic—indeed, some may say that this stage has already been reached. That amendment is a profoundly unattractive change in the existing arrangement. I do not understand why it is there and I suggest that the Government are taking a great risk by proceeding along these lines.

Members of the Bar, after all, are not civil servants. One of the strengths of the Bar, vital in our modern democratic society, is the independence of each one of its members from each other and from anyone else. That is an essential part of the system, which lies at the centre of maintaining the rule of law, which we all believe in. One of the characteristics of their independence is that advocates cannot be forced to accept terms to which they have not agreed or which they find unattractive. That leads directly to the consequences—to which the noble and learned Lord, Lord Woolf, drew our attention —which could be very far reaching and very damaging. Those already engaged in work of this kind might be well advised to withdraw from their contracts, lest they be sucked into an ever increasing pattern of cuts. There are many who might be attracted to this kind of work in other circumstances who would not wish to subject themselves to the reformed contract where they are subject to change without any further amendment of the contract itself.

I therefore have this further question for the Minister: what assurance can he give to those who may be willing to accept employment on these amended terms as to what the future holds for them? This is very relevant to the issue of recruitment. Schedule 6, as I have suggested, is open to further amendment. Are we to expect further cuts in these rates next year or is it proposed to do so within the life of this Parliament? If so, what further opportunity will there be—indeed what opportunity will there be at all—for consultation before any further amendments are proposed? What opportunity will there be for an advocate to withdraw if he decides that the rates that are then proposed are so completely unattractive that he is not prepared to carry on with that work? These are questions that all those engaged in this kind of work would wish to be answered and I hope very much that the Minister will be able to do so.

Lastly, on the point raised by the noble and learned Lord, Lord Brown, about jury trials, I come from Scotland where, as it happens, there is no right to a jury trial. It is up to the prosecutor to decide whether the offence should be tried by a judge alone in the sheriff court, with a sheriff and a jury, or in the High Court with a jury. The length of sentence is affected by that decision, but there is no reason why a case of very considerable complexity should not be tried before a single sheriff. The accused has no right to object to that. It raises the issue as to whether there is not considerable force in the point of the noble and learned Lord, Lord Brown, that we are reaching the stage where a jury trial in some of these cases may need to be reconsidered.

[Lord Faulks (Con)]

My Lords, my noble friend Lord Carlile has summarised the arguments against the statutory instruments with his usual clarity and vigour, and I do not wish to weary the House with repetition. I would, however, like to add a few words and in doing so should declare an interest as a practising barrister. I am not a barrister who does criminal cases and I very rarely do cases where legal aid is involved. However, I have sat until recently as a recorder in the Crown Court and am thus familiar with our criminal justice system.

I entirely understand the desire on the part of the Government to reduce spending on legal aid. The LASPO Act was the Government’s first move in reducing costs. There is no reason why lawyers should be in any way immune from austerity, nor should justice be recognised as some sort of special case, up to a point. Nevertheless, what troubled many noble Lords in scrutinising that Bill as it went through the House was the risk of real injustice not to lawyers but to those who encountered the system and would be at risk of being denied access to justice. The Minister reassured those of us who were anxious, particularly in relation to Part 1 of the LASPO Bill, as it then was, and made some important concessions. However, the impact of the Act is going to need careful watching to ensure that real injustices do not result.

21:45

The Secretary of State has now proposed further cuts in the legal aid budget, focusing principally, but not exclusively, on criminal legal aid. Perhaps I may say how much I am looking forward to the response of the party opposite to these proposals. During the passage of the LASPO Bill, it was often said by the party opposite that, had it won the last election, it would have made significant cuts in the legal aid budget, but it was not apparent from the stance that it took to the proposals in the Bill where those cuts would in fact have occurred. On a number of occasions, the noble Lord, Lord Bach, whom I see in his place, indicated that the cuts would have come in criminal legal aid. I think that the House would regard it as important for the party opposite to be clear—if not on the detail then certainly in general terms—as to how those cuts, necessary as they were, would have fallen on criminal legal aid.

The previous Government were in the habit of publishing figures for the top earners, in both criminal and civil work, in receipt of funds from legal aid. This was no doubt seen to help in the softening-up process in relation to public opinion before any changes were made to legal aid funding. The figures were usually misleading. Unfortunately, this Government have followed suit in that respect.

In a sense, barristers are an easy target; the average member of the public has better things to do than drill down for the truth about their earnings and is happy, for the most part, to accept some of the stereotypical pictures of an overpaid man or woman in a wig quietly milking the legal aid system. However, I acquit the Secretary of State of describing barristers as “fat cats”. He has been at pains to emphasise that he is not set upon destroying the criminal Bar, and I entirely accept that that is not his intention.

Over the years, successive Governments have attempted to cut the fat off the criminal justice system and, as we have heard this evening, it is beyond argument that criminal barristers are, for the most part, very moderately paid. They are self-employed and have little muscle or obvious appeal in any negotiating process. There is no doubt that the criminal Bar is a profession in crisis. However indifferent the public may be to the individual circumstances of barristers, there will, I apprehend, be far more concern if the system as a whole is degraded.

Very high cost cases are now likely to be ignored by the most competent barristers. There will thus be a position where the most complex cases will be conducted, if the defendants are represented at all, by barristers with considerably less experience and competence than is appropriate. When cases are subject to the control of an experienced judge assisted by experienced barristers, as we have heard from noble and learned Lords, the outcome is very often a significant saving in costs through the sensible use of admissions and a clarifying of issues. This results in a saving on the legal aid bill and, just as important, a streamlined and well conducted trial process. That is unlikely to remain the case.

It is not only barristers who are alarmed at the effect of these changes but, as we have heard, judges, who will have to preside over trials in the future. Our criminal justice system, for all the criticisms that it attracts from time to time, is still held in very high regard not only by the occupants of this country but by those in other countries. Its reputation, hard won as it is, is now at serious risk.

I have referred to the Secretary of State. He of course will also have close regard to his obligations as Lord Chancellor, requiring him to ensure access to justice. I fear that the fat has been so far removed from the carcass of criminal legal aid that these further cuts really threaten our justice system. There are changes and improvements that can no doubt be made in the disposal of very high cost cases, but I venture to doubt that a simple, crude reduction in fees is the way to go about making the necessary changes. Here, I entirely agree with what the noble Baroness, Lady Deech, said. The changes in welfare are based, as she rightly said, on a principle. It is difficult to discern what principle lies behind these changes.

I ask the Minister to consult the Secretary of State for Justice and Lord Chancellor and to think very carefully about whether the effect of these changes—short, medium and long-term—is really worth the apparent saving.

[Lord Mayhew of Twysden (Con)]

My Lords, I acknowledge that I have something to declare, which is that many years ago I used to conduct criminal cases as a member of the Bar. I recognise very well what the noble and learned Lord, Lord Woolf, was saying about the fee of two pounds four shillings and sixpence. The difference between the scenario that he described and my own was that he described people of the highest eminence accepting two pounds four shillings and sixpence as it was their duty. I was at the bottom of the heap—the opposite—and was very glad indeed to have it.

The debate so far has been of the highest quality and I shall be very brief as I do not wish to diminish the impact that it undoubtedly had on my noble friend who is about to reply. The trick that the Government have to fulfil is that they have to make provision to reduce the deficit, and must do so in a way that avoids unintended consequences. I believe that it is a tragic fact that the reduction of 30% that has been described this evening will have an unintended consequence. Fewer people will take the work and the consequence will play over to the task of reducing the deficit. It will increase the deficit for the reasons that high judicial authority has emphasised again tonight.

I want to add one additional circumstance that I can foresee. If you are doing a very long case which, as my noble friend Lord Carlile described, is one of high complexity, you become associated in the minds of instructing solicitors with that case—“Oh Mr Mayhew will not be available; he is tied up in this case which has gone on for months and with many more to come”. When you finish that case, you will find typically that there is no work left and you will have a long gap in your practice before you are instructed again. That will bear on the decision of the advocate as to whether to accept the fee that is offered. That point has not been made tonight, but it is one that is similar in character and perhaps easily overlooked.

The Secondary Legislation Scrutiny Committee, in its 18th report, has drawn attention to what has been said about these measures by three professional bodies. It has called for a more robust defence, and I look forward very much to hearing from my noble friend that the Government believe they have a more robust defence to the many points of criticism of profound weight that have been put before your Lordships this evening.

[Baroness Scotland of Asthal (Lab)]

My Lords, this has been an extraordinary but sad and rather sobering debate. I am grateful that, from the powerful opening by the noble Lord, Lord Carlile, until the noble and learned Lord, Lord Mayhew, sat down I have found no reason to disagree with one word that has been said, save that I shall make a few comments a little later to help clarify the views of these Benches for those who sit opposite. The reason I say “sad and sobering” is that we should be very clear that this is not a parti pris debate.

So far we have had the benefit of hearing from two former Lords of Appeal in Ordinary, one former Lord Chief Justice, the current regulator and now a very eminent member of the Bar and recorder. I declare my own interest as not only a member of the Bar, a recorder and deputy High Court judge, but someone who is in practice and who, although I have not taken legal aid criminal cases since leaving Government, certainly did in the past. The voices I have just spoken about are joined now by two former Attorneys-General of different complexions politically and, some would say, physically. This is something upon which those who are committed to justice and the rule of law and concerned about the quality of justice in our country have now spoken, and so far we have spoken with one voice.

It is very important to hear the echo of what has been said, because it is an echo of real alarm and concern. I was struck by the comments of the noble Baroness, Lady Deech, about the effect of retrospection, an issue I had intended to alight upon. I was struck by the description of the noble and learned Lord, Lord Woolf, when he talked about these provisions as “a gangrenous wound”. It is a description with which, regrettably, I wholeheartedly agree.

I was also grateful that mention was made of the Lord Chancellor’s responsibility in terms of his oath. Members of this House will be familiar with it, but I shall repeat it so that the House and others may be reminded of what the oath of the Lord High Chancellor of Great Britain is. The oath that the current Lord Chancellor swore was this:

“I … do swear that in the office of Lord High Chancellor of Great Britain I will respect the rule of law, defend the independence of the judiciary and discharge my duty to ensure the provision of resources for the efficient and effective support of the courts for which I am responsible. So help me God”.

How does the Minister contend, on behalf of the Government, that that oath by the Lord High Chancellor of Great Britain is being discharged?

Let me help the House as to why I am concerned about whether the Lord Chancellor has taken that oath into account in bringing these orders forward. I know that when he gave evidence to the Select Committee he seemed to suggest that it was not possible to grant access to justice to all people at all times. That, if I may respectfully say so, is a fundamental misunderstanding of the Lord Chancellor’s role. It is his duty to ensure that there are sufficient resources so that access to justice for all people at all times can be equally made available. Moreover, the wounds that the changes proposed in these orders will inflict may so damage the availability of good access to justice that the cost will be very difficult to bear. There are those who say that they know the cost of everything and the value of nothing. Let us be clear: the value of our justice system is very high indeed.

22:00

We have already had significant cuts in costs. Noble Lords have talked about the 30% cut, but the House will be aware that in more serious cases such as those of murder, rape, historic sexual abuse, non-very high cost cases of fraud and kidnap, fees have been cut three times since October 2010. Some fees in murder cases have been cut by 59%, in rape cases by 70% and in non-VHCC fraud cases by up to 83%, so this 30% cut comes on top of the very significant cuts which have been made since 2010, when our Government were last in place.

Fairness and equality are right. We in this country believe that because of the changes we have made over the past 30 or 40 years, the diversity of the Bar and the diversity of the judiciary, which has started but which perhaps is not yet complete, has been of great benefit to our nation. Increasingly, our profession reflects the people it serves. I am therefore grateful to the noble Baroness, Lady Deech, for raising the issue of diversity. There was a time when in order to be a member of the Bar, you had to be a person of independent means because it was by no means assured that the money you would derive from your profession would be sufficient to keep you in a manner that was reasonable as opposed to even comfortable. That changed to allow a greater number of people to join our profession. I joined the Bar in 1977. I was a person without comfortable means, state educated, non-Oxbridge and with very little opportunity, some might have thought, of succeeding. Looking at the position we are now faced with, I must ask myself what a Patricia Scotland of today would think of her chances of surviving in this new regime. Will we have as diverse a profession in the future or not? I think that there is only one answer to that. If we want fairness and parity of treatment then, to a certain extent, we have to pay for it.

There is a moment when we have to decide what our values are, what justice means to us, and whether justice in our country is or is not for sale. I hope that our view is that justice is not for sale, that we understand its value and not just its cost, and that the Government will think very carefully indeed before they take the matter forward, for all the reasons given by noble Lords who have spoken already. The points have been validly made and I thank those who have spoken because, as I listened to them, I have been able to tick off every single thing that I wanted to say, save and except for those which I know my noble friend Lord Bach intends to cover, and therefore I will not trouble the House. However, I ask the Minister to think very carefully, and I add my voice to each and every question he has been asked without repetition.

[Lord Alton of Liverpool (CB)]

My Lords, perhaps a non-lawyer might be permitted to detain your Lordships’ House for just a few moments. Although I am not a lawyer, I have a daughter who has this year qualified as a barrister and should declare that. I was particularly struck by what my noble friend Lady Deech said in her remarks earlier on, when she reminded us of the deleterious effect that the Government’s policies may well have on this rising generation of young lawyers. Taken together with what the noble and learned Lord, Lord Woolf, said in his remarks about the high ideals that so many lawyers have when entering the legal profession, in pursuing this vocation, I think that the Government need to listen extremely carefully to the very distinguished contributions that have been made this evening and with such force.

I support the noble Lord, Lord Carlile, for two principal reasons. The first is that I think that the Government’s policies will significantly impede the possibility of younger people from more disadvantaged backgrounds from entering the law—the point that the noble and learned Baroness, Lady Scotland, has just made. Secondly, having represented and been associated with inner-city areas of Liverpool since I was first elected to the city council there as a student some 40 years ago—at about the time when the noble Lord, Lord Carlile, began to practice at the Bar—I am acutely aware that social justice does not just require access to health, welfare and decent housing: it also requires access to law. That was a point that I made several times during the course of the LASPO legislation and return to again tonight.

Over the past few decades, much has been done to improve the diversity of those working at the criminal Bar. However, the further reduction of barristers’ remuneration proposed by the Government has alarming social mobility implications. Criminal banisters have already sustained a disproportionate reduction in remuneration over the last decade. The noble and leaned Lord, Lord Mayhew, and others have rightly emphasised the dramatic effect that a devastating 30% reduction will have on those who are now working in the profession. In return, they are expected to work long, unsociable hours and tackle difficult and, as we have heard, complicated issues of public importance.

These further swingeing cuts are simply unsustainable and the reality is that they will deter talented individuals from middle and low income backgrounds from entering or staying within the profession. Instead, the criminal Bar will once again become the preserve of the independently wealthy. Those without independent wealth to sustain them will turn to more financially rewarding areas of practice or to another profession altogether; we heard about the alluring effect of commercial law. They will do so not out of greed but simply out of a desire to receive an income comparable to the earnings of other equivalent professionals.

Yet instead of treating criminal barristers like other professionals, the Government have asked them to bear wholly disproportionate cuts to their incomes. As the Criminal Bar Association has pointed out in its correspondence with Members of your Lordships’ House, no other public service professionals have been asked to shoulder cuts on the scale proposed by the Ministry of Justice. I think that the noble Lord, Lord Carlile, was quite right to say to us at the very outset that this is simply crude.

As a consequence of these measures, the criminal Bar will see an exodus of talent. The results will be far reaching and the consequences borne by society as a whole. That is my second point. People accused of serious crimes face the prospect of not having anyone of sufficient quality to represent them; and there will also be a lack of experience to prosecute the more serious cases in due course. As we have heard, it will also influence the make-up of the Bench as well as the years pass.

It is all too easy to forget the important part that criminal legal aid has played in ensuring a fair and just society because the criminal law is not something that impinges on the everyday life of most of us. Yet when liberty and the protection of the public are at stake, it is paramount that both the defendant and the state have quality of representation. If we accept the fundamental principle that all defendants are innocent until proven guilty, and may not have actually done what they are accused of, we should ask ourselves this simple question: “If I found myself in court accused of a serious crime and was trying to defend my innocence, who would I want defending me?”. If the answer is a highly qualified, independent and dedicated advocate, it has to be understood by us all that the price of these measures is that we will forfeit that, and justice will be the loser. It is for those reasons that the arguments of the noble Lord, Lord Carlile, deserve our support tonight.

[Lord Thomas of Gresford (LD)]

My Lords, it is a privilege to follow the noble Lord and the comments that were made in particular by the noble and learned Baroness, Lady Scotland. Referring back to my own beginnings, I was one of those who, having left university, was not in a position to go to the Bar as I had wished. I became a solicitor, and as a young articled clerk I instructed Lord Elwyn-Jones, leading Emlyn Hooson, in a number of cases. I was attracted by the lustre that surrounded the Bar at that time. Elwyn-Jones was a Nuremberg prosecutor, as was David Maxwell Fyfe, which my noble friend has recently had brought to his attention. Maxwell Fyfe really wrote the European Convention on Human Rights. It was the attraction of this profession that drew me, after serving as a solicitor for five years, to pay my 100 guineas to my pupil master and to enter on a different track as a barrister.

I played my part thereafter in civil cases, but more often in criminal cases, prosecuting, defending and later sitting on the Bench as a recorder. I was proud of the system in which I played such different roles. I was proud of the way in which justice could be achieved under the system that we had inherited over so many centuries. I am really sad today—a word that has been used by a number of people—that we seem to be coming to the end of that great tradition at the Bar. I know that my noble friend says no, but that is not how I see it. I agree with the noble Baroness, Lady Deech, who talked about the suffocation of the criminal Bar by these proposals. That is what I think it is.

I do not wish to repeat everything that has been said so well and ably, and with his usual eloquence, by my noble friend Lord Carlile. He has been an opponent on many occasions but I have also worked with him on a number of cases. We have worked together on some serious matters. I want to focus on the way in which entry to the Bar will be so curtailed by these provisions. When I go to see young people being called to the Bar at the various Inns of Court, particularly Gray’s Inn, it saddens me to look at them and their parents, who are so proud of them for what they have achieved and how they have worked to get their degrees to become qualified. Finally, there they are in their fresh wigs and gowns, all ready to start on a career which has been so fulfilling in my own life—they are ready for it but there are no openings.

Today, if you wish to get a pupillage, you will struggle. Very properly, you receive a minimum level of payment, £12,000 a year, as a pupil in the common law field and criminal field. Last year, a commercial set advertised that it was prepared to pay £65,000 per year to a pupil. That, I think, illustrates the huge gap between the commercial Bar and the Bar with which I am familiar. I accept so much of what the noble and learned Lord, Lord Brown, said—that we deal with people’s lives, and not just with money and contractual obligations and so on, as the commercial Bar does. We make a difference to people’s lives in the profession that we follow. These young people who have come so far will not get the pupilages—and if they do, will they ever get the tenancies?

22:15

I am now leaving the Bar for various reasons. One reason is that I do not want to be around to watch the struggle that will take place at the criminal Bar and family Bar as chambers disintegrate because there is not enough income as a result of the changes that we have seen over these past few years. I just do not want to watch it. I do not want to have to deal with the sort of disintegration that I foresee.

I appeal to my noble friend Lord McNally to think again about these measures that are being brought in today, to consult properly on them and to take the advice of people who know what they are talking about. When I see some statements from the Ministry of Justice it annoys me so much because it is clear that they do not know what happens at the coal face. They do not understand how the legal profession works. I ask him to think again and take back these measures.

[Lord Bach (Lab)]

My Lords, I declare an interest, rather an old one, in having been a junior member of the Bar doing criminal law, pretty uniquely, for many years. I was calculating a few minutes ago that the last time that I practised was some 14 years ago. I am not a Queen’s Counsel, although once or twice in this House I have been called that inadvertently—and much worse besides—and I have never sat. If anything, I speak as someone who was once a junior criminal barrister.

The House owes a huge debt to the noble Lord, Lord Carlile of Berriew, for tabling these two Motions. His speech and the speeches of noble Lords who have spoken have attacked these proposals with passion and in trenchant terms. I regret only that this important debate is being held effectively at dead of night, when the points made demand a greater audience at a better time of day, because the principles that they concern are of huge importance. All that I can say is thank goodness for Hansard.

My position on these regulations is fairly simple. Some cuts to criminal legal aid are justified; some cuts to VHCC costs are also justified. I had to make such cuts some years ago in criminal legal aid and VHCC rates. I do not resile from having to do that—any Government would have to do that at a time of economic difficulty. But frankly the percentage of cuts that is being proposed—the crude and absurd figure of 30%—seems to be much higher than any figure for which I was responsible and which can possibly be justified. I say “absurd”, because quite a lot of the burden of this will not necessarily fall just on eminent Queen’s Counsel who lead in these cases, but on junior barristers, either those being led or who sometimes in these cases are the sole advocates for a defendant. It will fall too on solicitors, which has not been mentioned: that is, solicitor advocates in court and solicitors who have to do the preparation for these very long cases. The damage that will be done to them has been described extremely eloquently already.

If my speech now becomes slightly less generous to the Ministry than others have been, I hope the House will forgive me, but one is left with a fairly strong impression that the Government really do not care very much any more whether there is a credible, high-quality legal profession practising criminal law, either now or, more importantly perhaps, in the future. We should not be surprised by what I call this recklessness. One must see it in context.

Anyone who has followed the Government’s approach to legal aid from almost the day they came into office—a point made by the noble Lord, Lord Carlile—will know that almost immediately they removed the Legal Services Commission’s grants for young trainee lawyers in social welfare law firms and advice centres. Anyone who has followed this approach will know that the Government do not care very much about the consequences of their actions, culminating in the tragedy—my word—that is Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act, which has already come close to destroying access to justice for hundreds and thousands of our fellow citizens.

To remove legal aid from social welfare law was tantamount to an attempt to kill it off. Was it ideological? It seems that way. Why would any Government have done something so ridiculous in financial terms and so monstrous in social terms, destroying a system of law that gave some access to justice, often in the form of fairly cheap legal advice, to poor people at the point in their lives when they needed it and in order that their lives could be put back on track? In exactly the same way that many noble Lords and noble and learned Lords have spoken tonight about how criminal law affects people’s lives, we must not forget how those acts of legal advice on housing or welfare benefits that have been given to people on legal aid also affected their lives in very important ways, often so that their lives could be put back on track.

It was a policy of supreme ignorance as well as utter recklessness. Now we see that Act in practice, this hard-nosed, ignorant approach to our law continues—all of it forecast in the debates that took many hours in your Lordships’ House some time ago. Law centres have been allowed to close. The exceptional cases provisions of the Act are now so rarely allowed that they might as well not exist. The anecdotes and evidence as far as domestic violence is concerned are something that this House will really have to consider at some stage in the future—all the net results of this Government’s approach to legal aid from the moment they were elected.

Here we are again. Anyone in legal circles, practising lawyers who thought that they could just keep quiet while the first stage of legal aid cuts was taking place, because all that was about was a few solicitors who did this kind of work or advice centres that advised in civil law, and that criminal law legal aid would be seriously touched, could not have been more mistaken. At least the Bar Council and the Law Society were very much part of the fight against the LASPO Bill and they should be commended for that. However, we are in this position now with this only the first of a number of orders that the House is likely to have to consider. The Government are not satisfied with the havoc—again, I chose my word carefully—they have already caused and are causing day by day and have turned their attention in a very real way to criminal legal aid and then potentially to destroying a great deal of the principles behind judicial review. All of which, no doubt, will come before us in due course.

These are all to be put into effect, at best, by statutory instrument. There is no primary legislation involved here, so the Government tell us. We have these big changes taking place with all the restrictions that statutory instrument legislation has for Parliament. All the while, this country’s deserved and historic reputation for having a legal system that protected everyone in its own way and allowed everyone some access to justice is seriously threatened by a Government who—and I do not like having to say this—seem to have so little idea of what is actually important. Instead of treasuring our legal system they are in serious danger of demeaning it.

[Lord Beecham (Lab)]

My Lords, I rise from the lower ranks of the legal profession and many years ago was apt to brief members of the criminal Bar, few—with the exception of the late and much lamented Lord Taylor of Gosforth—of the eminence of many of those who have spoken tonight. I ought therefore to declare my interest which is, of course, registered. I also have, like the noble Lord, Lord Alton, a paternal interest because my daughter is a barrister. She also sits as a part-time deputy district judge but she is not at the criminal Bar.

In the earlier debate tonight, I raised the issue of how the Government go about or do not go about consulting on matters of great significance. We are in exactly the same position in relation to the present proposals. The noble Lord, Lord Faulks, on the other hand, perhaps to protect himself from his colleagues, threw the question at the Opposition regarding our stance. If he looked at the record he would have seen, as my noble friend Lord Bach’s reply has indicated, that there were some cuts under the previous Government —indeed, my noble friend Lord Bach put through a 5% cut in fees. That is one-sixth of the present cut this Government is inflicting.

We made it very clear in discussions over the legal aid bill that there is a need to look at the cost of the whole system of justice, not to isolate a particular part like this and impose a massive swingeing cut on it. One can look, for example, at the Serious Fraud Office which unfortunately again is in the news, having again incurred a significant cost, perhaps because it is underresourced. In all events, there are other areas under the auspices of the Ministry of Justice that would repay attention and if we are looking for savings—and it is accepted that there have to be savings—then we ought to be looking not just at this end of the system but at the system as a whole to find sensible savings that would not impact on access to justice.

22:30

In this case, we have proposals which have not been subject to consultation. They were not discussed with the Criminal Bar Association, the Bar Council, nor the Bar Standards Board. There is no impact analysis beyond what passed for one—pretty flimsy as it was—in respect of the original Transforming Legal Aid White Paper, 18 months or two years ago.

To add insult to injury, as other noble Lords have pointed out, the Government have entered into the dangerous territory of, effectively, retrospectively changing people’s contracts. That is, frankly, outrageous in any field. It is an appalling thing for a Government to do to the justice system, and I very much hope that they will look again at that. They have made a tentative move, because they tempered slightly the cuts in fees for transitional cases but, as others have pointed out, it still seems to be open to members of the Bar to decline to proceed with a reduced fee. As others have said, that seems likely to lead to increased costs.

The Minister must tell the House tonight how the Government will respond to the Bar Council’s concerns as to whether any future changes will be made subject to proper consultation. One difference between this situation and that obtaining under the previous Government, to which the noble Lord, Lord Faulks, implicitly referred, was that those matters were discussed. They were negotiated. I dare say that it was felt that the Government had the stronger hand in the negotiation, but, nevertheless, there was consultation and a position was, however reluctantly, agreed. That is not the situation here. It has never been attempted in this case thus far. I hope that we may have some assurances from the Minister on that account.

The Secondary Legislation Scrutiny Committee has, as we have heard, made it very clear that it does not feel that the Government have made their case for those changes and that they should do so. Others have pointed out that it is wrong just to cite the figures, and the noble Lord, Lord Carlile, referred to the fee figures as being gross and not referring to the fact that there are substantial overheads. I think that he said that VAT was included; he may be mistaken in that respect. In any event, as far as savings are concerned, it should be noted that counsel will be paying tax. Counsels of the eminence of the noble Lord, Lord Carlile, will be paying tax at 40%—hopefully, a little higher, in due course. The net savings to the Exchequer, in the bald assertions of the documents, do not refer to the fact that a substantial loss of tax revenue would also occur, so the net savings to the Exchequer are not as large as the Government might claim.

As the Criminal Bar Association points out, an inquiry is going on at the moment commissioned by the Government—the Jeffrey inquiry into criminal advocacy. One might have thought that a sensible Government looking at that problem would have awaited the outcome of the commission’s work; the Government have chosen not to do so. Will the Government look at fees again in the light of what the commission produces? It would have been better to have waited; if they are insisting on going ahead with the changes now, will they review the situation in the light of the Jeffrey inquiry’s report? I assume that that will take some time. Will they also look at the impact of these changes not only on costs but on how cases are handled, the length of time that is taken and the problems that may arise by eminent, senior counsel refusing to undertake that work?

The longer-term effects on recruitment to the service, to both prosecution and defence counsel in complex cases and, later, into the judiciary, have been touched upon by other noble Lords. These effects will not become apparent immediately but there is a real concern about how those things might be affected.

The discussion tonight thus far has been—for understandable reasons, given the history of those participating in the debate—exclusively devoted to the impact of these proposals on the criminal Bar. That is a major issue, but there is another group affected by the regulations: expert witnesses. We had some debate, during the discussions on LASPO, about the cuts for expert witnesses of broadly 20%. This is differentially higher in London, because London expert witnesses are, in many cases, being paid significantly less than those in other parts of the country. They cover a wide range of professional services, many of which apply to both criminal and civil cases.

I have spoken with somebody who is very active in representing experts who give evidence in the family courts, but the same people often also undertake criminal work. She told me that, in the last few days, she has spoken to two medical experts who will no longer undertake work in the criminal courts. She has spoken to a solicitor who is finding it extremely difficult to find expert witnesses to give evidence in the criminal court. He quite understands that and thinks it will be increasingly difficult to find experts. We must not forget that this is not just a matter for the Bar but for people who play a crucial part both in very complex cases and in more general ones, because the cut applies whatever level of case they are operating in. That can only impact on the way the system works.

As ever in this House, this debate has involved a huge amount of experience at the highest level of our justice system. However, it is not just this House that is indebted to the noble Lord, Lord Carlile, for raising these problems and initiating the debate. Everyone who has an interest in our system of justice is indebted to the noble Lord and other noble Lords who have spoken. That means everyone, because all of us have an interest in our system of justice and securing access to it.

I have referred before to the book The Pursuit of Justice by the noble and learned Lord, Lord Woolf. The pursuit of justice is what those of us who have participated in tonight’s debate—and the Minister—are interested in. The pursuit of justice will be made more difficult if the Government press on relentlessly with the changes we are debating tonight. There is still time for them to think again before they inflict great damage on the system in which all of us have, hitherto, taken such pride.

[The Minister of State, Ministry of Justice (Lord McNally) (LD)]

My Lords, like the noble Lord, Lord Bach, I have, on a number of occasions, been promoted above my abilities in terms of legal qualifications. I have been referred to this evening as “learned” and I was recently introduced, at a conference, as “Lord Justice McNally”. My more mundane task this evening is to set out the Government’s position on the Criminal Legal Aid (Remuneration) (Amendment) Regulations 2013 and the Criminal Defence Service (Very High Cost Cases) (Funding) Order 2013. Both these instruments were laid before the House on 1 November 2013.

Before I get into the detail of the two instruments, I want to set the legal aid transformation in context, as was requested by the noble and learned Lord, Lord Hope of Craighead. The need for reform of legal aid-funded services to ensure a cost-effective, sustainable legal aid system is recognised by all the major political parties and has been the subject of debate for a decade or more. It was the Labour Party that instituted the Carter review. It was the Labour Party that made cuts in legal aid prior to 2010 and promised further cuts in its 2010 manifesto. During the passage of LASPO, it said that it would not cut civil legal aid but would cut criminal legal aid. Now, it does not like the legal aid cuts. I still wait to hear whether the Labour Party would restore the legal aid cuts if it were to come into office in 18 months’ time.

The fact is that changes in technology and its increasingly fundamental role in the functioning of the criminal justice system demand the kind of changes to working practice and business models seen throughout the public and private sectors in recent years. The introduction of alternative business structures and an increasingly well informed customer base are examples of changes that present their own challenges, and which the legal professions must meet. Those changes are accompanied by the fact that the number of businesses providing criminal legal aid services now exceeds demand for such services. To put it bluntly, there are too many lawyers seeking the work available. New entrants to the market, new technologies, new working methods and oversupply in relation to demand are all factors that force change in any industry, sector or profession. I urge the Bar to recognise that the change is necessary to deliver efficient and effective legal services in new and innovative ways.

For our part, the Government recognise that the services the profession delivers are a vital component of our legal system and, where necessary, ensure access to justice and equality before the law. That is why, looking more widely, the Lord Chancellor has asked Sir Bill Jeffrey to review the provision of independent criminal advocacy in the courts of England and Wales, as just referred to. That review is intended to consider the experience, skills and future structures that might best support the continuing provision of quality, independent advocacy services. However, alongside the need to ensure access to justice and a healthy, sustainable legal sector, the profession must also recognise that the Government are obliged to seek the best possible value for money from the legal aid budget.

I turn now to the instruments that are the subject of this debate. They apply a reduction of 30% to the legal aid fees paid to litigators and advocates in what are known as very high cost criminal cases, although I will accept the description of them by the noble Lord, Lord Carlile, as being very high complexity cases as well. This will save £19 million per annum in a steady state. The noble Lord, Lord Carlile, will be familiar with these cases; as he told us, he has undertaken this sort of work in the past. For the benefit of others, I should explain briefly that VHCCs are the longest and most expensive Crown Court trials funded by legal aid. Under the current system, they are those cases which are expected to last more than 60 days at trial; the overwhelming majority of them relate to fraud offences of one type or another.

These cases are managed by the Legal Aid Agency under contracts with service providers, with work being agreed in three-month stages in advance as the case progresses. Typically, these cases are complex and run for a number of years; the amount of preparation involved can be enormous. Although the debate today has concentrated on fees in VHCCs, I should also mention, for completeness, that the remuneration regulations also make two other changes to the criminal legal aid scheme. As the noble Lord, Lord Beecham, indicated, they reduce fees paid to most expert witnesses involved in legally aided criminal cases by 20%. They also amend the category of work in which a provider of legal aid services can claim a fee. This is a consequence of the changes in the scope of criminal legal aid for prison law, which is being implemented through separate secondary legislation.

22:45

Noble Lords will know that this Government have given priority to repairing the public finances. Every part of government has had to face the brutal reality that we are not as well off as we thought we were and we cannot borrow our way out of trouble. The Ministry of Justice will see its budget reduce by nearly one-third between 2010 and 2016. No area of our spending has been immune from scrutiny in these circumstances. Our legal aid system is a major part of the department’s budget, and it is therefore appropriate that we make savings there, too. Sometimes, when I hear some of the heartbreaking stories about the legal profession, I think of the 20,000 people that I have had to see go from the Ministry of Justice in the past three years as part of that programme as well.

The policy implemented by these instruments was the subject of public consultation for eight weeks. Transforming Legal Aid: Delivering a More Credible and Efficient System set out a package of reforms intended to ensure a sustainable, efficient and credible legal aid system. Around 16,000 responses were received from representative bodies, practitioner and other organisations, individual members of the judiciary—

[Lord Carlile of Berriew]

My Lords—

[Lord McNally]

It is very late and noble Lords have all had a very good time.

[Lord Carlile of Berriew]

It is very late, but this is an important debate, as has been made clear. I have one question to ask. If my noble friend thought it right that there should be an extensive consultation on the generality of legal aid, why was there no consultation on VHCC cases?

[Lord McNally]

This is the first time that VHCC cases have been cut by this Government. I do not think that they were cut by the previous Government. Were they? I stand corrected.

There was a consultation and this has not come out of the blue. I have been talking to the Bar for three and a half years about these cuts.

I hope we do not get an interruption from my noble friend Lord Phillips. He came in very late.

[Lord Phillips of Sudbury (LD)]

I was not going to.

[Lord McNally]

Okay, I am sorry—not guilty.

[Lord Phillips of Sudbury]

Does the Minister want me to?

[Lord McNally]

No. These matters have been discussed over a long period. We received 16,000 responses from representative bodies, practitioners and other organisations, individual members of the judiciary, Members of the House of Commons and the House of Lords, individual solicitors and barristers, and members of the public. The majority of responses did not support the Government’s original proposals for reform, although there was some support for particular measures. Some, including the Law Society, specifically acknowledged that VHCCs were an area where the Government might be able to make savings.

As we said in responding to consultation, the Legal Aid Agency analysis of fraud VHCCs shows that the average value of a contract is £1 million and such contracts run for three or four years on average. Even with a 30% reduction in fees VHCCs will remain high-value, long-duration cases that, because of the way these cases are managed with regular phased payments, bring certainty of income for providers for the extended period in which they are instructed in these matters. That is why the Government believe that a reduction in fees is sustainable in this area.

We believe it is right that our reductions should affect advocates who receive higher levels of legal aid fee income, rather than those who are on much lower fee income. In 2012-13, more than half of those with fee income of more than £200,000 worked on VHCCs, compared with just 20% of those with fee income of between £100,000 and £200,000. Just 4% of barristers who earned below £100,000 worked on a VHCC in 2012-13.

Concerns have been raised about the impact of this fee cut on existing contracts. It is precisely because these cases run over a number of years that we must ensure that the ongoing fees represent value for money. We are therefore reducing rates in existing contracts where cases are at a relatively early stage and where the ongoing costs are likely to be significant. I cannot give any assurances about changing the position that we have taken on this because we are under responsibilities to make these cuts.

We have taken a fair and balanced approach to applying the new rates to existing contracts. The new rates do not apply to contracts where cases were at trial on 2 December or those that, before 2 December, were set to come to trial on or before 31 March 2014. These include cases that had a date set at any point in the past for trial on or before 31 March 2014 but that date has been vacated and a new date fixed, even if that trial date is after 31 March 2014; where the trial has taken place but there remain outstanding proceedings, such as confiscation proceedings; and where the original trial has concluded but a retrial will take place, even if the retrial is after 31 March 2014.

A number of points have been raised but I am conscious of both my time limit and the House’s. I have referred to the fact that VHCCs represent a tiny number of total cases; fewer than 1% of the total Crown Court trials over the past year were VHCCs. I understand the points that the noble Lord, Lord Carlile, was making about the returning of cases, but we will just have to see how this works out. I do not want to bandy figures about.

I hope that the Bar itself thinks very carefully about how we navigate through these matters. I believe that when a very distinguished profession talks about going on strike, it crosses a Rubicon that is very difficult to re-cross.

As for the idea of funding legal aid from restrained assets, it may be that one or more parties might put that as a suggestion in their manifesto; maybe we will see that, although I remember the debates in this House about removing jury trial from High Court cases. We have had lots of suggestions but none with the immediacy with which we can address the issue.

I accept the point that was made about the present system being bureaucratic and the hourly rate-based system not being ideal. I cannot remember which noble Lord it was—was it the noble and learned Lord, Lord Woolf?—but one of them got very close to suggesting one case, one fee, which was one of the first things rejected by the Bar when we were having those negotiations that apparently have never taken place. The fact is that we have explored alternatives, and I have no doubt that ideas will continue to be floated.

I have said to my own party and I say to all three parties that, after what has been a very painful period, we should look at how we handle legal aid. As we have said so often, although to listen to some speeches you would not believe it, since 2010 to when this exercise is finished, which is some three or four years away, legal aid will have been cut from just over £2 billion to £1.5 billion. That leaves us with a legal aid expenditure about which I will not bandy words as to whether it is the most generous in the world, but it is an extremely generous allocation of money by the taxpayer. It is incumbent on all parties to see how we can look at that kind of sum and get a better and more efficient outcome from it. That requires a willingness to contemplate change and flexibility from all parts of the legal profession. I would hope that we can look at it in that way.

I hear what my noble and leaned friend Lord Mayhew said about the sacrifices that the high-cost barristers make in losing other business and being out of the loop. However, even with a 30% reduction in fees, VHCCs will remain of high volume and long duration, with regular payments that bring certainty of income to providers. We believe that it will continue to attract lawyers once they come to see the points that are on offer.

There is no sign of a lack of young people entering the profession. We all wish the daughter of the noble Lord, Lord Alton, well in it; she certainly knows where to come for advice.

We are looking at the review under Sir Bill Jeffrey. We cannot accept all the existing contracts but we have, as my noble friend Lord Carlile knows, tried to widen that as far as possible. We had to bring in a cut-off point somewhere. Noble Lords will have heard in many other professions where they have had responsibility the suggestion, “Why don’t you put it off?”, or, “Why don’t you have a review or do it some other way?”. I wish that both the Treasury and the Government worked differently than they do. The noble Baroness, Lady Deech, has the idea that you can, as it were, go across the meadow picking flowers from here and there to finance things. The fact is that my department, as part of an overall spending review in response to a very real economic crisis, has had to take across the board cuts of 23% in 2010, a further 10% after a further review in 2012, and a further 1% in this review. We cannot go plundering other parts of Whitehall to make up the difference. We have to make hard, tough decisions about our expenditure at this moment, and try to make them in the fairest and broadest way that we can. Somebody asked whether we were also targeting other earners. The figures that I have, and I will confirm this, are that the cuts that we have consulted on were of about 7% on average. Of course we have targeted the higher earners.

Noble Lords made a number of points and I have tried to explain the context. We have had a very frank debate. I will close by saying to the noble and learned Baroness, Lady Scotland, that my right honourable friend the Lord Chancellor is well aware of his responsibilities and those of his office. I am sure that he will read the report of this debate in Hansard very carefully. I hope that in the mean time the noble Lord, Lord Carlile, will withdraw his Motion.

23:00

[Lord Carlile of Berriew]

My Lords, it is now 11 pm so I shall be very brief but I do want to reply to the debate. Twelve out of the 13 Members of your Lordships’ House who have spoken in this debate have spoken consistently with the same thread, criticising the Government for the introduction of these statutory instruments. As I listened to those contributions, I reminded myself of what a privilege it is to be a Member of your Lordships’ House. There were magnificent speeches, many of them from the Cross Benches, three from noble and learned Lords who have held very senior positions in the judiciary, and two from noble and learned Members of this House who have been Attorney-General on opposite sides, with very different types of practice in their experience.

I believe that your Lordships have provided my noble friend the Minster with the finest debating tutorial he could ever have had and that the Lord Chancellor could ever have had in how wrong the Government’s decision to introduce these statutory instruments has been.

[Lord McNally]

My noble friend interrupted me and I shall interrupt him just once. It is only for this reflection: yes, we have had a good debate and I do not doubt the eminence of those who contributed to it, but I have said it before: the legal profession must not exist in a bubble and congratulate or commiserate with itself. I sometimes wish that this House was full to the gunwales so that we could have a proper debate on these matters and see whether this unanimity of view about the sufferings of the legal profession was quite so evenly spread as a debate like this might sometimes indicate.

[Lord Carlile of Berriew]

My noble friend is a much liked, popular and witty Member of this House and I will not rise to the uncharacteristic and unjustified provocation of that intervention. I was about to say that I hope that the Lord Chancellor himself will read every word of this debate and will take note of what I think I described earlier as the finest debating tutorial one could have. If my noble friend is saying that all that has happened in this House in the past couple of hours has been a demonstration of self-interest by lawyers, one or two non-lawyers, judges and others who are acting in concert to defy the Government then, in my view, that demeans what has been a magnificent debate. I thank all those who have taken part for giving me the privilege that I described earlier.

I have some sympathy for my noble friend the Minister who sought to respond to the debate. He read out a familiar litany, but it was a litany without a message save the message of mistake. He allowed himself to stray into the suggestion that there had been consultation about the VHCC changes. He sought to elide into the VHCC changes consultation that had taken place on completely different legal issues. It is important to emphasise at the end of this debate that there was no—zero, zilch—consultation on these VHCC changes, and that is fundamental to the complaint that the Bar makes about the high-handed way in which this unilateral breach of contract has occurred.

My noble friend said that the Government were “under responsibilities to make these cuts”—those were his very words; I noted them as he said them. However, with great respect to my noble friend, that phrase is meaningless. The Government have the responsibility to get it right, not just to make cuts for the sake of making them. He said in relation to what is going to happen to these VHCC cases, in which there are now no advocates, that “we will just have to see how this works out”. That took my breath away. It is an acceptance that there are now cases with no advocates, that there is no plan B for these cases and that the promises that the Government made to everyone that it would all be all right on the day have simply been shown to be wrong. I would never accuse my noble friend of being incoherent but the brief that he had was full of incoherence, and we saw it displayed this evening.

At this late hour, I do not propose to divide the House but I believe that I do not need to do so. This debate has been well worth having because of its overwhelming effect of showing that the Government are wrong in what they have done with these cases and that the explanation which my noble friend sought to give just did not hold water at all. With the permission of the House, I beg leave to withdraw the Motion.

Motion withdrawn.

Criminal Legal Aid (Remuneration) (Amendment) Regulations 2013

Wednesday 11th December 2013 Lords Chamber

Motion to Annul

23:06

Tabled by

[Lord Carlile of Berriew]

That a Humble Address be presented to Her Majesty praying that the regulations, laid before the House on 1 November, be annulled. (SI 2013/2803)

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee

Motion not moved.

Humber Bridge Bill

Wednesday 11th December 2013 Lords Chamber

Returned from the Commons

The Bill was returned from the Commons with the amendments agreed to.

City of London (Various Powers) Bill [HL]

Wednesday 11th December 2013 Lords Chamber

Returned from the Commons

The Bill was returned from the Commons agreed to with amendments. The Commons amendments were considered and agreed to.

House adjourned at 11.06 pm.