House of Lords

Monday 13th January 2014 Lords Chamber

Monday, 13 January 2014.

14:30

Prayers—read by the Lord Bishop of Newcastle.

Banks: Payment Protection Insurance

Monday 13th January 2014 Lords Chamber

Question

14:37

Asked by

[Lord James of Blackheath]

To ask Her Majesty’s Government what plans they have to require all banks which have refunded payment protection insurance (PPI) monies to customers to send each such customer a statement, without charge, setting out how much money has been refunded under each of the three separate elements comprising a PPI payout.

[Lord Newby]

My Lords, the Financial Conduct Authority requires banks to explain clearly to customers, free of charge, how their PPI redress offer has been calculated. The FCA is actively monitoring banks to ensure that they are complying with this requirement. If a bank has not provided this information, or it is not clearly presented, the consumer can bring a complaint against the bank and, if it is not resolved, raise a complaint with the Financial Ombudsman Service.

[Lord James of Blackheath (Con)]

I thank the noble Lord for that Answer, but will he take it into account that the banks got off on the wrong foot with the repayment programme by refusing to write a letter to everybody telling them that they owed them some money? It was left to customers to initiate their own claim and there is no certainty that many have not slipped through the net. The noble Lord’s Answer does not allow for the possibility that there are a great many people out there who have no knowledge that a great deal of money is still owing to them.

[Lord Newby]

My Lords, I can assure the noble Lord that the FCA is taking this matter seriously and I am sure that someone would be happy to meet him to discuss this in more detail. The FCA is already looking at this general area as part of the thematic review it is currently undertaking into PPI complaint handling.

[Lord Wrigglesworth (LD)]

My Lords, does my noble friend not agree that the breathtaking scale of the PPI scandal is matched only by the volume of telephone calls that have been received by many people throughout the country, offering to help, and taking a slice of the proceeds that are then obtained? Will the Government look into this to see whether another scandal is not under way?

[Lord Newby]

My Lords, I think that all Members of your Lordships’ House will have had such telephone calls. I can reassure the noble Lord that the Government have acted in this area. During last year’s passage of the banking reform Act, we gave the claims management regulator the power to impose penalties on claims management companies which make speculative claims. We are also giving the regulator more enforcement staff and requiring claims management companies to pay for this extra effort.

[Lord Campbell-Savours (Lab)]

But they are still doing it.

[Lord Newby]

My Lords, every call made in respect of PPI is not necessarily inappropriate. Some are. Many people have used claims management companies because they did not feel confident going through the process themselves. I accept that there has been abuse. The key thing we have done is to give the regulator power to crack down on firms which make speculative claims to the banks when there is no justification for it.

[Lord Eatwell (Lab)]

My Lords, the noble Lord has not answered the point made by the noble Lord, Lord James, which was that individuals have to apply to the banks for restitution of PPI claims rather than the banks recognising the obligation that they know they have. Why are the Government letting the banks off the hook?

[Lord Newby]

My Lords, the Government are not letting the banks off the hook. The banks have paid out almost £13 billion in respect of PPI claims, which is about 70% of the total we think is payable, and a lot more claims are in the pipeline. The concern raised by the noble Lord in his Question relates primarily to the way in which the detailed amounts were calculated and the extent to which individuals can understand those calculations from the material that they receive from the banks.

[Lord Soley (Lab)]

My Lords, is not the problem around individual complaints that very often those people who do not claim are the most vulnerable?

[Lord Newby]

My Lords, a great deal of publicity has been generated on this issue, and consumer organisations are looking at how they can do more. As I have said, a very considerable number of claims have already been made.

[Lord Davies of Oldham (Lab)]

My Lords, the noble Lord will recall that in 2011 the chief executive of Barclays said that the period of remorse and apology should now be over. Since then we have had this scandal, described by the noble Lords, Lord James and Lord Wrigglesworth, as breathtaking and utterly unacceptable. We have Lloyds Bank, which is still being funded from the public purse, in the middle of it. Since 2011, we have had the rigging of LIBOR and we have had RBS, another publicly supported bank, handing out massive bonuses while declaring a pre-tax loss. When are the Government really going to get tough with the banks and make sure that the Vickers reforms are honoured in spirit and in practice?

[Lord Newby]

I think that the noble Lord must have been somewhere else in recent months because I seem to remember spending many days over last autumn in your Lordships’ House putting through, under the banking reform Bill, the tougher new approval regime for senior bankers, instituting the new criminal offence of reckless misconduct and more generally looking at ways of vetting the suitability of bank staff to a greater extent. The legal framework within which the banks operate moving forward is substantially different from that in place when this Government came into office, and it will make it much more difficult, although not impossible, for many of the problems we have seen in the past to recur. It will be much easier for the regulators to take effective action if they think it is necessary to do so.

[Lord Elystan-Morgan (CB)]

My Lords, it is not for the claimant to put his or her claim forward, but for the banks to justify the holding of moneys to which they are in no way entitled. If the banks know that to be the case, are they not deliberately withholding those funds from their rightful owners? If they do not know, although in most cases and with few exceptions they should know, that puts them constructively in a position of trust with regard to the holding of those moneys. Is not that the way to look at it?

[Lord Newby]

My Lords, there is a certain amount in what the noble Lord says, but I repeat what I have said: there has been a huge amount of publicity around this issue and not only have a very considerable number of people made claims, but £12.9 billion has been paid out in respect of those claims.

[Lord Hamilton of Epsom (Con)]

When will my noble friend go a little further than Vickers and actually break up those banks that are too big to fail and seem also to be too big to manage?

[Lord Newby]

My Lords, again this is something that we have debated at some length. The Government have taken effective steps to ring-fence retail banks and to make sure that a resolution position is in place so that if they get into difficulties, there is a prearranged way of dealing with that to ensure that the Government are not faced with the problems they had in 2008, when essentially all the banks which got into financial difficulties had to be propped up.

Businesses: Business Rates

Monday 13th January 2014 Lords Chamber

Question

14:45

Asked by

[Lord Borwick]

To ask Her Majesty’s Government what assessment they have made of the impact on high street businesses and employment of measures relating to business rates announced in the Autumn Statement.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, our £1 billion package will benefit all 1.7 million business rate payers. The measures announced in the Autumn Statement include the annual increase to be capped at 2%, around 360,000 businesses to receive 100% small business relief, and around 300,000 shops, pubs and restaurants to get a £1,000 discount. The package exceeds expectations and was welcomed by the CBI and the British Retail Consortium, and it will provide the support that high streets need to grow and provide employment.

[Lord Borwick (Con)]

I thank my noble friend for that Answer, but does she agree about the importance of the problem of empty shops on the high streets, made worse by empty rates introduced by Gordon Brown and the Labour Party some time ago? What action are the Government taking to address that matter?

[Baroness Stowell of Beeston]

My noble friend is right that this pressure on businesses was made worse by the tax hikes on empty premises introduced by Gordon Brown. To help to relieve that pressure, and as part of our £1 billion business rate package announced at the Autumn Statement, we also included a relief that provides a 50% discount for 18 months for new occupiers of retail premises that have been empty for a year or more. This is on top of exempting all empty new-build property from business rates for 18 months.

[Lord Naseby (Con)]

Is my noble friend aware that the Government’s actions have been exceedingly well received and that many in the business community would like to say “Thank you for listening for once”? Nevertheless, is it not true that the business rate today, particularly in the retail sector, where more than 20% of trade is done online and those companies pay no business rate, is no longer fit for purpose? Therefore, will Her Majesty’s Government look to review in toto the impact and structure of the business rate as we move forward?

[Baroness Stowell of Beeston]

My noble friend is right that the measures that we introduced were born out of listening to businesses, and measures have been introduced that support them to grow the economy without adding any extra burdens on other taxpayers. I make two points. Online retailers do, of course, still pay taxes, including business rates, on the properties that they use to facilitate their businesses. As to the business rate system itself, as my noble friend will know, my right honourable friend the Chancellor keeps all taxes under review. He is certainly looking at the administration of business rates and this review will take place later this year.

[Lord McKenzie of Luton (Lab)]

My Lords, we are in the era of the business rate retention scheme but there are emerging representations from councils, via the LGA, that currently the risks of the new system outweigh the rewards. This is partly to do with appeals but also business rates avoidance—exploiting the current relief and discount framework. What specifically are the Government doing to address these concerns about business rates avoidance?

[Baroness Stowell of Beeston]

The noble Lord will know that one of the changes that we have introduced is to allow local authorities to retain 50% of all the business rates that they raise. This is so that they can enjoy and benefit from business activity in their area. We have also changed the law so that local authorities are able to introduce their own discounts, and since April this year central government is funding 50% of those discounts. We think this is the right thing to do to make sure that there is the incentive there for new businesses and local authorities to receive the benefit from that activity.

[Baroness Wheatcroft (Con)]

My Lords, many of the shops in secondary retail locations will never return to retail. Given the figures that we have seen on the growth of online shopping, it seems inevitable that they will remain empty. Does my noble friend agree that the sensible thing is for local authorities to encourage the ground-floor units, as well as those above, to turn into residential accommodation?

[Baroness Stowell of Beeston]

My noble friend is right to highlight the changes in the way that consumers are shopping and spending their money. We have introduced, as she has acknowledged, some flexibility to high streets and are currently consulting on additional measures that will allow towns and high streets to adapt even further to this new world.

Housing: Leasehold Valuation Tribunal System

Monday 13th January 2014 Lords Chamber

Question

14:50

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what assessment they have made of the impact on leaseholders of changes to the operation of the Leasehold Valuation Tribunal system, introduced in October.

[Baroness Gardner of Parkes (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interest as listed in the register.

[Lord Ahmad of Wimbledon (Con)]

My Lords, in October 2013, a revised fee remissions scheme was introduced across the courts and tribunals system. The impact of the revised remissions scheme will be reviewed after October this year.

[Baroness Gardner of Parkes]

I thank the Minister for that. Can he confirm that people will not be charged management costs unless their lease specifies that they must be and that they will not be obliged to pay—win or lose—the head lessee’s or freeholder’s slice of the action?

[Lord Ahmad of Wimbledon]

My noble friend comes to this issue with great experience and has been a long-standing campaigner in this regard. She raises the issue of administration charges on leases. Some leases contain covenants for the recovery of legal costs, which is a slightly different issue from the recovery of costs as service charges. I understand there have been calls for the Government to consider the feasibility of creating a provision to prevent the recovery of administration charges, similar to the protection over service charges already provided under Section 20C of the Landlord and Tenant Act 1985. We understand the concern that this topic provokes but, as I am sure my noble friend will agree, we need to look at this very carefully and consult quite widely before deciding on any action that can be taken in this regard.

[Lord Beecham (Lab)]

My Lords, I declare an interest as I have some interest in a leasehold flat. The former cap of £500 on costs has been removed, as the Minister has said, and the Church Commissioners, of all people, recently persuaded the court that a default judgment over service charges allowed them to forfeit a lease. Furthermore, in another case, a landlord recovered from two pensioners £40,000—not £500—as an administrative charge in a dispute over service charges. Is it not time that the Government acted to replace leaseholds for residential properties with commonhold?

[Lord Ahmad of Wimbledon]

My Lords, as the noble Lord will know, the Government have already taken forward the issue of legal costs in relation to service charges. I have already alluded to the Section 20C order, as provided for in the Landlord and Tenant Act 1985, which allows a leaseholder to seek for those service charges—if the landlord is claiming that—to be voided. He also raised the point about the £500 fee. Normally in tribunal cases, we have found that parties pay their own costs, and it is rare for costs to be awarded in the property chamber itself. Only where the tribunal considers that a party has behaved unreasonably could it make a costs order against them.

[Baroness Gardner of Parkes]

My Lords, I remember debating the Bill very carefully here in 1996, because it was stated that the total costs would be recovered from the applicants, down to,

“the milk for the office cat”.—[Official Report, 10/7/96; col. 348.]

These charges, under the previous system, were limited to a maximum of £500 and the only abuse was when the other side charged it back to all the leaseholders in the block, even if only one had brought the case. Now, it is a different matter. You have to put up the £500 even to take your case to the tribunal and you have to pay further costs all the way. Can we at least be assured that if, as the noble Lord says, it is not possible to limit it in some cases, the costs will not be charged to all the tenants, as is now the case, instead of just to the one person who brought the case? Will the court, or the First-tier Tribunal as it is now called, have the power to determine where these costs are actually justified?

[Lord Ahmad of Wimbledon]

Bearing in mind the series of questions that my noble friend has asked, perhaps writing to her in this regard would be more appropriate and beneficial.

EU: Free Trade Agreements

Monday 13th January 2014 Lords Chamber

Question

14:54

Asked by

[Lord Trimble]

To ask Her Majesty’s Government what progress is being made in European Union free trade agreements.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

The EU is currently negotiating 12 free trade agreements, including those with major trading partners such as the United States and Japan. The EU has also reached conclusion on 10 more agreements that have yet to enter force, adding to the 50 that have already been agreed and are now active. These negotiations are complicated endeavours, but I believe that the EU has made good progress. The Government will continue to be a champion for free trade and of the benefits that it brings to this country.

[Lord Trimble (Con)]

I thank the Minister for that Answer, which draws our attention to the huge number of free trade agreements that are in course. I would direct his attention to the EU-US free trade agreement. In that connection, has he seen the projections that were issued of the benefit there would be to both the EU and the US, which, interestingly, appears to be roughly evenly divided? Does he agree that the assumption of a virtually equal division of the benefits should be revisited in the light of the huge competitive advantage that the US now enjoys, thanks to its access to abundant supplies of cheap energy, whereas we are increasingly locked into expensive energy to the disadvantage of our businesses?

[Lord Livingston of Parkhead]

My noble friend is right to draw attention to TTIP, the US-EU agreement, which will indeed bring substantial benefits. I believe that the UK is expected to gain around £10 billion a year, which is about £400 for every family in the UK, the US is expected to gain about £80 billion and the EU about £100 billion, so there are very substantial gains. In addition, there will be very substantial gains for the rest of the world, which are believed to be in excess of £80 billion.

I take my noble friend’s point that energy presents some challenges. Certainly, we hope to see the US exporting energy, so that the benefits of shale to global energy prices would help all industry rather than just those in the US. In any event, we believe that helping to have openness and convergence of standards will assist all citizens, not just in the EU but in the US and around the world.

[Lord Pearson of Rannoch (UKIP)]

My Lords, if we left the political construct of the European Union, is there any reason why, as one of the world’s largest economies, we could not maintain our existing trade agreements and sign new ones with Commonwealth countries and the markets of the future? Surely we would enjoy our own seat on the World Trade Organisation.

[Lord Livingston of Parkhead]

If we were to exit the EU, there would be no certainty that any of the free trade agreements would actually continue. While the UK is a significant economy in its own right—and that is important—these agreements take many years to negotiate. Even assuming that we could renegotiate them, we would not have the leverage that the EU has, as the single largest trading bloc in the world, to make such agreements. Therefore, I think that it would be very difficult to replicate them, particularly within a short space of time.

[Baroness Kinnock of Holyhead (Lab)]

My Lords, will the Minister comment on progress on the negotiations between the European Union and African, Caribbean and Pacific countries, which have now been going on for 10 years and are meant to focus on development and reciprocal free trade? Is it not the case that there is a strong chance that, unless the October deadline is met, we will see an unprecedented situation wherein African countries will lose their preferential access to European markets?

[Lord Livingston of Parkhead]

The noble Baroness makes a good point in raising those countries. There has been a lot of focus on the most developed nations, but we also have an obligation to continue to push the economic partnership agreements that we have been trying to make with Caribbean and African countries. However, I would stress that there was a major breakthrough with the WTO agreements. The WTO agreement to aid trade facilitation is worth around £100 billion to the world economy as a whole and the vast majority of that will go to developing nations, which I think is to be welcomed. Certainly the UK will continue to push for trade agreements with Caribbean, African and ASEAN countries. We are great proponents of free trade and of the benefits that it brings for all nations involved in it.

[Baroness Suttie (LD)]

My Lords, does my noble friend the Minister agree that concluding the EU-India free trade agreement would bring enormous benefits to the economies of both sides and, therefore, that finding solutions to the remaining obstacles should be a priority this year?

[Lord Livingston of Parkhead]

Indeed, the Indian agreement would be of great benefit. Of course, India is one of the major powers and is growing fast. However, as we know from our debates in this House, there are challenges with internal Indian beliefs on trade and there are elections in India in, I believe, April this year. Discussions are ongoing, and I believe there will be discussions in Davos with the Indian trade Minister regarding progress on this agreement. We will certainly be pushing the Indian Government for a wide-ranging agreement, but whether that will be feasible this side of the Indian election is extremely doubtful.

[Lord Davies of Stamford (Lab)]

Will the EU-US prospective trade agreement as currently envisaged continue to allow the United States to ban the export of crude oil or natural gas, as they do at the present time?

[Lord Livingston of Parkhead]

The discussions are still ongoing. Clearly, we would like to see free trade of all descriptions, but the TTIP agreement will be largely focused on reducing import tariffs and particularly on the convergence of rules, which will help all countries. We would certainly like to see its energy exports being made available all around the world, as is the case with UK exports from the North Sea.

[Lord Tugendhat (Con)]

Does the noble Lord agree that the advantages of TTIP to the consumer need to be more emphasised? At the moment, most of the emphasis is on the benefits to producers on both sides of the Atlantic, but in terms of price reduction and a widening choice of products and goods the TTIP stands to do the consumer a great deal of good as well.

[Lord Livingston of Parkhead]

My noble friend is entirely right that the TTIP will bring a lot of benefit to consumers. When you get a convergence of standards, global models being made and lower tariffs, prices will come down and consumers will have more choice, not just in the UK or the EU but in the US as well. Certainly, we feel it is very important—Her Majesty’s Government have done a number of pieces of good work on this—to highlight the benefits that free trade will bring to consumers on both sides of the Atlantic. I absolutely agree with my noble friend that it is very important to highlight the positive impact that will arise.

[Lord Hannay of Chiswick (CB)]

Does the Minister agree that it is a very encouraging sign that the US Administration are now pressing for fast-track authority for this agreement, as with the Pacific one, and that this is essential if the agreement is to go through in a reasonable amount of time? Will the Government do what they can to let their friends in Washington know that this fast-track authority is really important and to let our friends in Brussels know that this is a sign that the negotiation really is for serious?

[Lord Livingston of Parkhead]

Indeed it is. The timetable for TTIP is very aggressive, with the aim of completion by 2015, which would be almost unprecedented. I met with the US ambassador to the UK just before Christmas and we discussed TTIP at some length. Certainly, his enthusiasm for it is there, albeit that I recognise that not everyone in the American political system feels that way. However, we made that point very clearly. The Prime Minister said at the G8 conference that this is a once-in-a-generation opportunity and, understandably, I would not disagree with the Prime Minister on this issue.

[Lord Howarth of Newport (Lab)]

Is the Minister confident that free trade agreements would be good for African economies? Historically, did not the US, our own country and the countries that are now successful—the industrialised countries of south-east Asia—build up their economic strength behind protectionist barriers? Is it not the case that when the countries of the advanced West pressure African countries into free trade agreements, they are doing so not for the benefit of those African economies but for themselves?

[Lord Livingston of Parkhead]

As I indicated earlier, from the free trade agreement that was recently conducted in Bali, for example, the biggest beneficiaries by far will be the developing nations. The improvement of trade facilitation will yield £100 billion in benefit, most of which will come to them. Actually, a lack of free trade, rather than the absence of it, has been the challenge for a lot of developing nations. The UK will continue to push to see free trade around the world, not just with developed countries but with developing countries.

[Lord Avebury (LD)]

My Lords, in all these agreements that the European Union makes with third parties, there is a standard clause on human rights. Can he tell me of any such agreement in which that clause has ever been invoked?

[Lord Livingston of Parkhead]

My noble friend is correct that EU agreements, including for instance the one with Canada, have standard clauses on human rights. I am not aware that any of these clauses have been invoked, although it is feasible to suspend all or part of the agreement if human rights have got worse in a particular country. I think that the engagement in free trade and the free movement of people, services and goods, is something that should help human rights. I certainly think that ensuring that human rights are on the agenda when we try to negotiate is a major help.

[Lord Alton of Liverpool (CB)]

My Lords, without doubting the importance of free trade agreements to lifting an estimated 800 million people in the world out of starvation, despair or poverty, will the noble Lord nevertheless take into account the exploitation of children in a country like India, for instance, or exploited labour elsewhere in the world? Will he tell the House what balance is struck in determining free trade agreements in relation to protecting the rights of those who are likely to be exploited?

[Lord Livingston of Parkhead]

The challenge of child labour in certain countries can happen irrespective of free trade, but I think that free trade will actually help through the exposure and openness of the economies, which is a major help to improving the conditions of workers in individual countries. That is something we will continue to push for. As I said earlier, we also put human rights clauses in the various agreements and the UN has certain statements on human rights, which we also look to comply with. It is an important subject, but it is not peculiar to free trade agreements.

[Lord Hamilton of Epsom (Con)]

My Lords, is it not inevitable that, as long as European energy prices are double—or, in the case of Germany, triple—that of the United States, there is inevitably going to be a transfer of manufacturing to the United States?

[Lord Livingston of Parkhead]

As I said earlier, energy prices are a significant issue for EU-US relations, but they are not the only issue and there are many industries that are not wholly reliant on energy prices. In fact, energy prices are just one part of the total package. We would also look to see the exploitation, for instance, of alternative energy sources in the UK, which will hopefully act to balance some of that. With that in mind, I was delighted to see the comments from the Prime Minister about looking for alternative energy sources. The UK, which is already an energy producer through conventional means, is also looking at alternative sources of energy, and that is going to be very important for the future of the UK.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Monday 13th January 2014 Lords Chamber

Report (1st Day)

15:07

Relevant document: 3rd Report from the Constitution Committee.

Clause 1: Prohibition on consultant lobbying unless registered

Amendment 1

Moved by

[Lord Hardie]

1: Clause 1, page 1, line 5, leave out “carry on the business of consultant” and insert “engage in professional”

[Lord Hardie (CB)]

My Lords, this amendment seeks to extend the legislation requirements introduced by Clause 1 to all lobbyists who are engaged in that activity on a professional basis. If the amendment is agreed, incidental amendments will be required, but these can be included at Third Reading. I do not intend to rehearse my observations at Second Reading or in Committee but will set out my reasons for this amendment.

The Explanatory Notes to the Bill state that the main purpose of the provisions in the Bill on lobbying is to ensure that people know whose interests are being represented by consultant lobbyists who make representations to government. To that end, Clause 1 requires that those carrying on the business of consultant lobbyists must register. They cannot operate unless they are entered in the register. I agree that lobbying undertaken in an open, transparent and responsible manner is integral to our democratic system, but it should be regulated to ensure, as was said by the Minister at Second Reading, that we dispel any public perception that,

“certain powerful organisations and individuals could exert a disproportionate influence on government”.—[Official Report, 22/10/13; col. 893.]

The registration system proposed in the Bill will not dispel that public perception. It is limited in scope and is confined to those businesses above the VAT threshold which are involved in lobbying as consultants for others. It does not apply to lobbyists employed by those firms of consultant lobbyists, nor does it apply to national or multinational companies or organisations which seek to exert influence on the Government and choose to do so by using in-house lobbyists. The public want to know who is engaged in lobbying the Government and are not interested in whether the lobbying is undertaken by consultants or in-house lobbyists. In short, the decision to restrict registration to consultancies is fundamentally flawed.

The desire to include in the provisions in-house lobbyists is not academic. They represent about 80% of the lobbying industry. Moreover, the statutory register would replace the current voluntary register operated by the Public Relations Consultants Association, which is the professional body that represents United Kingdom PR consultants, in-house communication teams and individuals. Those who have chosen to register with PRCA include the largest consultancies in the industry as well as the in-house teams of various organisations. Registration in the voluntary register requires members to update their entries about staff and clients on a quarterly basis and to sign up to the PRCA’s code of ethical conduct, which is supported by rigorous disciplinary structures. It is appropriate that there should be a statutory register, assuming that it is supported by enforceable codes of conduct—a matter to which we may return in later amendments.

However, it is unlikely that the voluntary register will survive after the introduction of a statutory scheme and, in any event, it might be confusing and undesirable to have more than one register. The existing provisions would have the effect of removing from the public domain information that already exists about certain in-house lobbyists. Rather than concealing such information, it would be more appropriate to extend it to those lobbyists who have not already registered on a voluntary basis.

I invite your Lordships to support this amendment for a number of reasons. First, it will increase transparency of lobbying. Secondly, it will give the public greater confidence in the political system by affording them greater powers of scrutiny of lobbying activity than is offered by the Bill. Thirdly, it will ensure that they are not denied information about the activities carried out by the vast majority of lobbyists in this country represented by those employed by large national and multinational companies representing the energy sector, alcohol, tobacco and gaming industries and many other activities affecting people’s lives. It is only right that the public can judge the extent to which government policy has been influenced by lobbying activities and the extent of such activities. The consequences for the public are the same, whether lobbying is by a consultancy firm or by in-house lobbyists. Finally, this amendment will ensure that the benefits of the current voluntary system of registration are maintained and indeed enhanced. I beg to move.

15:14

[Lord Norton of Louth (Con)]

My Lords, I will speak briefly, simply because my Amendment 136 is grouped with the other two in this grouping. My amendment is slightly different from the others, and signals what we will need to do if some of the amendments we are discussing this afternoon are not accepted. My amendment seeks to change the title of the Bill. As it stands, it is Transparency of Lobbying, but the Bill does not enhance transparency and it is not actually about lobbying. It is about lobbyists; it is about status, not about activity. There is a mismatch between the Short Title and the Long Title. The Long Title makes clear what the Bill is about: it is about the registration of lobbyists; it is not about transparency of lobbying. As I say, this is really to signal later debates, but unless the Bill is changed quite substantially, we will have to amend the title to bring it into line with what the Bill actually contains.

[Lord Campbell-Savours (Lab)]

My Lords, I want to speak for less than a minute; I spoke at some length on this matter in Committee. The Bill is deceiving the public. The public expect the matter of the registration of lobbyists to be dealt with in this legislation. However, Parliament is now considering a Bill which excludes the vast majority of people in the industry. I object and I hope that the amendment of the noble and learned Lord, Lord Hardie, is accepted by the House.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I also support Amendments 1 and 11. I hope that I will not also have to support the amendment tabled by the noble Lord, Lord Norton, as we hope that we will have made the changes that will make supporting it unnecessary. Amendment 1 also stands in the name of my noble friend Lady Royall and myself. It is already clear that establishing a register only of consultant firms would add nothing to the existing voluntary register. It would omit hundreds of employers—the in-house, public bodies, charities and, perhaps most importantly, trade associations—as well as more than 1,000 individuals who work in this industry.

We have heard the Government boast about being part of the Open Government Partnership, and Ministers say that the public should be able to see who is lobbying Ministers. However, as we know, the Bill will not do that. It will only tell us the companies for which, for example, Bell Pottinger has had direct contact with a Minister over the past quarter. It will not name the individual lobbyists concerned, nor will it identify the company on whose behalf that meeting took place. So if a lobbying company met a Minister, for example, on behalf of a defence company, we still would not know that. In the hypothetical Bell Pottinger case, it has, according to Marketing Week, some 900 clients; so we would only know that Bell Pottinger was meeting somebody on behalf of one of those 900 clients but not which one it was. If the Minister, instead of meeting a consultant, met the actual defence company itself, or its trade association, that would not appear on the register at all, because the lobbyists would be direct employees.

This is very different from the United States where, we understand, Mr Cameron’s election guru, Jim Messina, has just taken up a job with the American Gaming Association, which is about to lobby on online gambling. That will all be declared, but in the UK, there will be no record of such lobbying by organisations such as the Association of British Bookmakers, despite the public interest in knowing who is lobbying the Government, in this case, on gambling.

According to today’s Daily Mail, the Chancellor took the boss of one of the world’s biggest makers of betting machines on his trip to Beijing. That is something that the company would not have to declare because it would be doing that lobbying direct. It is interesting that the Rank Organisation discloses far more than the Bill actually asks. It has decided to set out the spending that it makes in its government and regulatory affairs work—for example, £115,000 to Luther Pendragon, Ernst & Young and FTI and another £88,000 in membership fees to three trade organisations: the Bingo Association, National Casino, and the Remote Gambling Association. However, none of those would be required under the Bill. So, congratulations to Rank but not to the Government.

Similarly, we would know nothing about meetings between the big six energy companies and HMT or DECC officials because they use their direct staff for that. Or consider the anti-electronic-cigarette lobby, largely funded, I understand, by the pharmaceutical industry, which produces nicotine replacement therapy and ideally would like e-cigarettes off the market. Johnson & Johnson, GSK and Novartis have teams dedicated to that lobbying work, and none of that would be known under the current provisions.

I am afraid that the Bill is rather a damp squib and, unless we amend it, it will exclude virtually all business lobbying, whether done by the companies themselves or by their trade bodies. Worse, even where one of the big agencies such as Weber Shandwick or Bell Pottinger register, we will still not have a list of their staff so that if one of their lobbyists met a Minister, we would be no more the wiser about who that lobbyists’ clients actually were.

In the debate on Part 2, the noble Baroness, Lady Williams, who is not currently in her place, warned us of the danger to our democracy of American-style lobbyists, and indeed her autobiography, which I recommend, draws on her wide experience of that side of the Atlantic. She talks of the powers of lobbyists there and the extraordinary influence of organisations such as the American Association of Retired Persons, the National Rifle Association and the American Israel Political Action Committee. As she and your Lordships’ House must know, though, none of those or their UK equivalents would have to be registered under the Bill—nor the British Insurance Brokers’ Association; the Building Society Association; Philip Morris; FOREST; the nuclear industry; One Hub or None, which is in favour of Heathrow’s expansion; the CBI; the TUC; or the drinks industry, despite 130-odd meetings with civil servants to resist minimum unit pricing.

What is the point of the Bill, particularly this clause, if it does nothing to shed light on what goes on behind closed doors in Whitehall? For the sake of democracy and good governance, we need to see who is lobbying whom and about what. The register should cover the act of lobbying—the status, I think the noble Lord, Lord Norton of Louth, said—not the type of lobbyist, otherwise this is open to abuse. If an issue becomes very sensitive, you can simply have the lobbyists who have been working for an agency become directly in-house and put on the payroll of a particular company at that time, and then none of their activity will have to be registered. Or a small lobbyist could simply work part-time for 10 clients and be paid directly by them, and then we would know nothing about them.

A list of lobbying firms is not enough. That is not what was foreseen in the coalition agreement, it is not what the lobbyists themselves want and it is not what Unlock Democracy or Spinwatch want. The charities and trade unions have told us that they are very content for their public affairs professionals to be registered and to disclose their lobbying meetings. We strongly support Amendment 1 regarding the production of a proper, comprehensive and statutory register of all professions lobbying the Government. Democracy demands nothing less.

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, the amendment moved by the noble and learned Lord, Lord Hardie, and supported by the opposition Front Bench would amend Clause 1 such that the register applied to professional, rather than consultant, lobbyists. The noble and learned Lord said that if the amendment was carried then it would need some consequential amendments. I respectfully suggest that it would need more than just consequential amendments because there is no definition of “professional lobbyists” in what he is offering to the House, of which I will say more in a moment.

From the discussions which I understand took place in Committee on this issue and on amendments previously tabled by the Opposition, it appears that they would capture—as the noble and learned Lord and the noble Baroness, Lady Hayter, made clear that they would wish them to—so-called in-house lobbyists in addition to consultants and, with Amendment 11, also employees. However, as I have said, there is no definition given of professional lobbying to accompany the amendment and its effect would therefore be that the provisions of this Part would be undermined such that a functioning register could not be established. I do not believe that that could simply be resolved by a number of consequential amendments.

We have discussed at length, in various debates on the Bill, the importance of clear definitions. Until now, the Opposition have struggled somewhat to define what they mean by “professional lobbying”, and now seem to have abandoned such a definition altogether. It is vital that we understand exactly who is intended to be captured by the amendments—whether this includes, for example, charities and all the paid employees of charities. Does it include church groups? Does it include the vicar who makes representations on behalf of his parishioners, because he is in paid employment? The noble Baroness shakes her head, but the problem is that without any definition we simply do not know who is intended to be covered by what she proposes.

[Baroness Hayter of Kentish Town]

We have said throughout that the definition used by the professional organisations—which would absolutely answer every point, as I am sure the noble and learned Lord must have read—is one that we are very content with.

[Lord Wallace of Tankerness]

My Lords, it is fair enough to say that, but it is not what the House is being asked to vote on today. It is being asked to vote on something which is devoid of any definition.

[Lord Campbell-Savours]

If the professionals have designed a system which includes them, why can that not be in the consequential amendments? Why do the Government not come back at Third Reading to include those provisions?

[Lord Wallace of Tankerness]

Because, my Lords, there have as I understand it been many attempts made to pin down and define what is meant by “professional lobbyists”, none of which has met with approval or the kind of certainty we want in previous debates. Perhaps we can answer two of the points of the noble and learned Lord and the noble Baroness. Simply to introduce ambiguity to a prohibition provision that is accompanied by serious criminal sanctions is unacceptable. That lack of clarity leaves the amendment fatally flawed.

As the Government have made clear throughout the passage of the Bill, our proposals for a register are designed to address the specific problem that we have identified. One of the things that gave rise to complaints in the media was that when consultant lobbyists were lobbying, people did not know who their clients were. That is the issue which the Bill addresses. It is not always clear whose interests are represented by consultant lobbyists when they meet Ministers and Permanent Secretaries. The context is that this Government have for the first time made it clear to the public exactly who Ministers and Permanent Secretaries are meeting. The Political and Constitutional Reform Committee’s report on the Government’s initial proposals for a statutory register of lobbyists made clear that identifying the problem that the register is intended to address is critical if successful regulation is to be achieved.

While we acknowledge that there are those who consider the focus of the proposed register too narrow—I am aware that these criticisms have been made—we have yet to see a clear articulation of the problem that would be addressed by expanding the scope to all so-called professional lobbyists. The point has been made about in-house lobbyists. It is quite clear whose interests are represented by an in-house professional lobbyist: it is the person who employs him or her. If you are an in-house lobbyist for the Scotch Whisky Association—I am not sure if that association has in-house lobbyists, but let us assume that it does—it does not take a genius to work out that if you are lobbying a Minister or Permanent Secretary, those are the interests that you would be representing. If you are an in-house lobbyist for one of the utilities and you meet a Minister or Permanent Secretary, it does not take a huge leap of the imagination to guess that you are representing the interests of the organisation which employs you. I cannot honestly see what is added by creating a list of people and their employers. If I have missed the point, I am more than happy to have it explained.

15:30

[Baroness Hayter of Kentish Town]

There are two issues. The first is that there are some enormously large employers and we do not know whether they are lobbying over a particular application for planning permission, for a new medicine or for something else. The second is that unless they meet a Minister or a Permanent Secretary under the silly bit of this Bill, we will know nothing; whether they meet senior civil servants, Bill teams or policymakers in the Civil Service, that will not be covered at all.

[Lord Wallace of Tankerness]

My Lords, we shall come on to the second point made by the noble Baroness. I think it is the subject matter of the next group of amendments. We would not know any more just by listing the names of in-house employees who engaged in lobbying. You would still not know from doing that—and that is what this amendment seeks to do—whether that person was actually lobbying with regard to planning permission or not. That is why it is important that the parallel provisions which the Government are doing in quarterly returns as to which people Ministers and Permanent Secretaries are meeting is an important part of the whole picture. We shall deal in a moment with the points made by the noble Baroness because I think that she is missing out that crucial part.

[Lord Norton of Louth]

Just on the example the noble and learned Lord was giving of the Scotch Whisky Association, if it was to buy in a consultant lobbyist to advise it but did the lobbying itself, how would that be caught by the Bill?

[Lord Wallace of Tankerness]

If the Scotch Whisky Association was lobbying itself, then the important thing is that if the Scotch Whisky Association is meeting a Minister or a Permanent Secretary, then that would be in the returns which the Minister or Permanent Secretary makes. That would make it very clear that it is the Scotch Whisky Association that the Minister has been meeting. That is what I think people wish to know. In a moment I will address my noble friend’s amendments to say some of the things which the Government intend to do to actually improve the openness to which we are already committed and delivering.

The position—as I understand it—which we have adopted or sought to adopt is the position in Australia. I am delighted to see my noble friend Lord Wallace of Saltaire here—I just wish he was actually right here because he has a wealth of knowledge and experience on this Bill. He very helpfully reminded me that we have modelled these provisions on the position as it is in Australia, whereas Canada has what might be described as medium regulation, which requires some of the information on employees and in-house lobbyists to which the noble Baroness and the noble and learned Lord referred. That system costs £3 million a year and, as my noble friend says, there is actually so much detail that it almost ceases to be useful. There is almost a detail overload, whereas our system replicates the Australian model. We expect it to cost considerably less, at £200,000 a year, and we believe that that is a very good system where the consultant lobbyists are identified, their clients are identified and the Minister works hand in hand with the regular returns from Ministers and Permanent Secretaries as to whom they have met.

I was actually struggling to see how the problems raised by the noble Baroness would be addressed by just adding more names to a register of people who are employed, unless—as we have committed to and are doing—you also indicate who Ministers are actually meeting. It does not add anything else by having the name of the person who was the in-house lobbyist, for the sake of argument, at one of the utility companies when they met the Secretary of State for Energy and Climate Change.

Until we see evidence of the case for introducing a register of all professional lobbyists, we remain reluctant to expand the scope of these proposals because we believe that what we have here is proportionate and problem-specific and will increase transparency without discouraging engagement by those who will be affected by policy and legislative decisions, such as businesses, charities, community groups and members of the public.

Amendment 11 would require consultant lobbying firms to disclose the names of all who undertake consultant lobbying activity on their behalf. The Government do not consider that such a requirement is either necessary or appropriate. The Bill requires the publication of the clients of consultant lobbyists, and the existing meeting publication scheme publishes both the persons Ministers and Permanent Secretaries meet as well as the body or firm that employs them. Transparency of who a consultant lobbyist is is therefore achieved on that information alone. To require the disclosure of the names of every private individual who is employed by a consultant lobbying firm would raise issues of proportionality and justification when the disclosure of such names provides no greater transparency, because we will know what the group, organisation or company is that meets the Minister or the Permanent Secretary. Therefore in return for listing a large number of names there seems to be no increase at all—not even a proportionate one—in the amount of the transparency than what is made available at the moment through the scheme of publication of persons whom Ministers and Permanent Secretaries meet.

[Lord Tyler (LD)]

The Minister will recall that at every previous stage of the Bill I have pressed that the Government should recognise that the key issue is not who the lobbyist is but who he or she meets, for what purpose and when. I very much welcome what my noble and learned friend has just said about the quality of the record of meetings that this Government have introduced. Perhaps he can go just a step further. He will be aware, from the discussions that have taken place across the House—and there has been support for this at every stage—that the present records of meetings are very often way out of date and not very detailed, and there is a grave discrepancy between the records that come from some government departments and those that come from others. In addition, it is very difficult to access them in a normal way through the computer. I instanced that we tried to find 23 different websites that would give us that information. Is my noble and learned friend now saying that there will now be active involvement by the Government to make sure that the situation is improved right across government?

[Lord Wallace of Tankerness]

I am very grateful to my noble friend and I recognise his long-standing interest in this, not just in terms of the Bill. I hope that I will directly address the points he has raised in responding to points made by my noble friend Lord Norton.

My noble friend’s amendment would revise the title of the Bill so that it referred to the registration of consultant lobbyists rather than the transparency of lobbying. His amendment appears intended to suggest that the provisions outlined in Part 1 of the Bill will not enhance the transparency of lobbying. He will not be surprised to learn that I respectfully disagree. This Government have done more than any before to enhance the transparency of government and decision-making, and these provisions will extend that transparency. We are the first Government to proactively and regularly publish details about Ministers’ and Permanent Secretaries’ meetings with external organisations, and we do so alongside a huge amount of open data regarding departmental spending and procurement. We are recognised as international leaders in open government and we continue to introduce initiatives to further extend transparency in government and the public sector.

We listened carefully to the concerns expressed during the Committee stage debate. In response to the question raised by my noble friend Lord Tyler, I am pleased that I can today commit to noble Lords that we will make further improvements to the accessibility of government transparency information. We will ensure greater co-ordination of the publication of data sets so that all returns within a quarter can be found on one page. I hear the criticism that he makes, and we ought to get better at the speediness with which we make this information available, but we will improve the access to and presentation of those data, including by improving the consistency of presentation and titling. We will also ensure greater consistency in the content of departmental reporting, particularly on including the subject of meetings. Finally, we will ensure that the gov.uk transparency pages contain a link to the statutory register of lobbyists so that the data can be easily cross-referenced.

The practical implications of those improvements are that: rather than having to visit a number of different sites or pages, all information will be accessed via one easily located page of gov.uk; the consistency of those data will be improved so that the transparency reports can be more easily located via search functions; and the subject of the meetings will be set out more helpfully—for example, rather than describing them as “introductory” or “catch-up” meetings, the detail of the meeting discussion will be outlined. Therefore, if, for example, my right honourable friend the Secretary of State for Energy and Climate Change was meeting someone, the subject would include not just energy policy but things such as fracking.

I hope that these practical proposals to which the Government are committing themselves will improve the transparency of decision-making further than we have already achieved, and that the Part 1 provisions will complement and enhance them. I dare say that they will do more to improve transparency than just having a long list of employees of a consultant firm. Obviously, if an employee—the noble Baroness mentioned Bell Pottinger, so for the sake of consistency let us say that this was an employee of that firm—had a meeting, the record would list not just “Joe Bloggs” but “Joe Bloggs of Bell Pottinger” and the subject of the discussion. As a result of the Bill, the list of Bell Pottinger’s clients would also be made available. I therefore believe that what we propose today does far more to improve transparency than simply making available a list of employees, and it reflects suggestions made by a number of colleagues who have made representations.

Although this does not relate directly to the actual register or to the Government’s scheme, I can also indicate that in our response to debates in Committee and to concerns that have been raised by Members of your Lordships’ House—I do not believe that this has been raised on any of the amendments now before us—we are committing ourselves to subjecting the appointment of the registrar to the scrutiny of the Political and Constitutional Reform Committee of the other place. By doing so, we are reiterating our commitment to the independence of the registrar.

[Lord Campbell-Savours]

If I put a scenario to the Minister, perhaps he will be able to give me the answer. If an in-house lobbyist from, let us say, IGas, the shale gas production company, were to meet a junior Minister or a civil servant in the department, by what means would a member of the public or a journalist know about that?

[Lord Wallace of Tankerness]

My Lords, if a lobbyist meets a Minister or the Permanent Secretary, there will be a scheme of publication—as, indeed, we are committed to publish at the moment, and we do. The noble and learned Lord, Lord Hardie, who moved the amendment, will recognise the name if I mention Mr Michael Clancy of the Law Society of Scotland. If I met Mr Clancy, at the moment I would register that, and put on my quarterly return that I had met Mr Clancy of the Law Society of Scotland. In the last term I think there was an issue relating to the banking reform Bill; I cannot remember if I actually met him or had correspondence with him about that—but this is what I would envisage would happen. There would be a reference to “Mr Michael Clancy, Law Society of Scotland: representations on the banking Bill”, or whatever its formal title was. That is how I would envisage the system working. The record would not simply say “catch-up meeting”—a term which has, perhaps, caused frustration to some in the past.

My Lords, these commitments show that the Government have listened—

[Baroness Neville-Rolfe (Con)]

Perhaps I may ask my noble and learned friend for further clarification about meetings. When I was in business I sometimes found that a note of a meeting was sent to the company before being made available under freedom of information or other provisions. The problem often was that the report of the meeting was not very accurate. Will there be any system of clearing or showing notes of the formal meetings that he has described to the people who were involved in them, simply for the sake of accuracy?

[Lord Wallace of Tankerness]

I am grateful to my noble friend for asking that question. I have not said that we will publish the minutes of meetings; the example I gave showed that we would record the detailed nature of what the meeting was about. I hesitate to use the word “subject matter”, because until now that term has also covered “catch-up meetings” and “introductory meetings”. It is not anticipated that we would publish minutes of such meetings. If a meeting had taken place on fracking, I do not think that any clarification would be needed between the Minister and the company as to whether the meeting was about fracking. It is not proposed that minutes would be made available, but there may be other ways—under, say, freedom of information provisions—in which other information might become available. None the less, what we are committing to today takes our commitment as a Government that much further. Ours has been a listening response, and I believe that it will do far more for transparency than—

[Lord Hardie]

Can the Minister help me in the following regard? He relies upon the fact that a system of recording meetings has been introduced. That is, of course, very welcome. He gave the example of a meeting with Mr Clancy of the Law Society of Scotland—and I am sure that he and his officials are very diligent in recording such meetings. However, what if we have a Minister or officials who are not as diligent and who perhaps record it as a meeting with Mr Michael Clancy full stop and do not explain who he is? Clearly, if Mr Michael Clancy is a lobbyist and my amendment is accepted, the cross-reference of the register will identify who he is and what his interests are.

15:45

[Lord Wallace of Tankerness]

My Lords, I hear the point that the noble and learned Lord is making. As I think my noble friend indicated, if the register is anything like the Canadian register you may have difficulty finding out who it is. However, more importantly, the transparency part of it comes in because of what Ministers would be obliged to put in their scheme. There is an ethics and propriety department in the Cabinet Office. I assure the noble and learned Lord and your Lordships’ House that when we submit our returns that department can get back to us. If we just put “Mr Michael Clancy” and there is no indication of who he is, we will be pushed to elaborate on that.

The noble Baroness said that, if a defence contractor was involved, we would not necessarily know that. In fact, under the publication scheme, the company’s name would have to be given. If that company was a defence contractor and the meeting was about the provisions of the defence Bill that is before your Lordships’ House, such information would be far more relevant, transparent and informative for the public than just giving the name of an employee of that particular company. Therefore, I ask the noble and learned Lord to consider whether his amendment advances transparency at all, given what I have indicated that the Government are willing to do, and whether it would lead to considerable uncertainty. Indeed, if it took the matter as far as the Canadian experience, it could, through an overload of information, be even less effective in promoting the transparency that we both wish to see.

[Lord Hardie]

I am grateful to noble Lords for their contributions to this short debate and to those who have spoken in support of the amendment. As regards the noble and learned Lord’s criticism that the amendment does not include a definition of professional lobbyists, I would say two things. First, is not that definition self-evident from the words “professional lobbyists”? Is it not a similar situation to that of a solicitor who is a lawyer performing legal services as either an employer—a principal—or as an employee? Equally, is not a professional lobbyist someone who lobbies as part of his profession as either a principal or as an employee? As regards the noble and learned Lord’s difficulties with the definition, what efforts have the Government made since the very full debate we had in Committee to try to come up with a definition? If that is a difficulty for the Government and this amendment is carried, perhaps they could put in a definition, although I do not think that is necessary.

[Lord Wallace of Tankerness]

The noble and learned Lord asks a fair question. The answer is that that is not the scheme that the Government have been following. We did not think that we needed to produce a definition of professional lobbyists. I ask him to reflect on the fact that if the managing director of a large drinks manufacturer were to meet the Secretary of State on a particular issue—for example, minimum unit pricing—I do not think that one would consider that person to be a lobbyist. Why should it matter that the name of a lower-ranking official in a company who lobbies on behalf of the company is in the public domain but not that of the managing director, when the information that the public want relates to the latter? I have said that we are willing to give that information, because a Minister would have to say that he had met the managing director of company X to discuss minimum unit pricing. Surely that is a much better route to transparency than putting the name of a much lower-ranking official than the managing director.

[Lord Hardie]

I take the noble and learned Lord’s point but it is not an alternative: it is not either disclosure by the Minister or registration. The transparency arises from the combination of the disclosure by the Minister and the registration, and the ability of the public to cross-reference the two to see precisely on whose behalf the lobbyist is speaking.

The noble and learned Lord also mentioned cost and referred to the Canadian system. He will be aware that the system has to be cost-neutral. The cost would be met by the various people who had to register. Of course, the larger number of entries in the register would—or should—offset the increased cost.

The professional body, the Public Relations Consultants Association, supports this amendment. Although it currently operates the voluntary register, it sees the benefit in having a statutory register provided that that register covers all in-house lobbyists as well. As I said earlier, some of the register already includes entries relating to in-house lobbyists. The noble and learned Lord also referred to charges, but there are already charges on the existing voluntary register. In all the circumstances, I wish to test the opinion of the House.

15:51

Division 1

Ayes: 185

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Labour: 134
Crossbench: 39
Independent: 3
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 218

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Conservative: 131
Liberal Democrat: 61
Crossbench: 17
Ulster Unionist Party: 2
Independent: 2

16:04

Clause 2: Meaning of consultant lobbying

Amendment 2

Moved by

[Lord Hardie]

2: Clause 2, page 2, line 6, leave out “or permanent secretary” and insert “, Parliamentary Private Secretary, civil servant or political adviser”

[Lord Hardie]

My Lords, this amendment reflects a similar amendment to that which was debated in Committee, along with other amendments, including an amendment proposed by the noble Lord, Lord Campbell-Savours. The Bill regulates lobbying activities only where the object of the lobbying is a Minister of the Crown, a Permanent Secretary, a Second Permanent Secretary or a person serving in the government offices listed in Part 3 of Schedule 1. Again, I do not intend to repeat what I said in Committee, but it is my respectful submission to your Lordships that the class is too restrictive, as was observed by many noble Lords both at Second Reading and in Committee. There seemed to be a general consensus across the Committee that the persons listed would not be the first port of call for lobbyists, who would probably concentrate on political advisers, Parliamentary Private Secretaries and more junior civil servants before approaching Permanent Secretaries, Second Permanent Secretaries and Ministers. Indeed, in the very helpful contribution made by my noble friend Lord Armstrong of Ilminster, who is not in his place, it appears unlikely that Permanent Secretaries will be lobbied if the noble Lord’s own considerable experience is taken into account.

The noble Lord, Lord Rooker, confirmed my own experience that Parliamentary Private Secretaries have direct access to Ministers and are involved in some meetings determining departmental and government policy. The noble Lord, Lord Norton of Louth, observed in Committee:

“When this Bill was considered in the other place, the point was well made that it appears to have been written by people who do not understand lobbying”.—[Official Report, 5/11/13; col. 139.]

Lobbyists would focus on the channel for reaching the Minister and that channel would include a political adviser, a Parliamentary Private Secretary or civil servants below the level specified in the Bill. It is clear that the Bill will be of little effect if it confines communications to those currently specified in it and does not focus on those people more likely to be the object of lobbying activity. If lobbying is confined to the more effective targets and the Minister is not directly lobbied, there will be no requirement for registration, not even by the restrictive category of consultant lobbyist. Such a result is contrary to the stated desire and the desirable intention of transparency that underpins Part 1 of the Bill.

In his response in Committee the Minister—I am delighted to see him in his place after his illness—referred to the number of civil servants who would be affected if the scope of this provision were extended as proposed. As noble Lord, Lord Norton of Louth, observed in his intervention at col. 149, the number of such civil servants is irrelevant. What is at issue is the identification of the class of persons the lobbying of whom will require registration. That class has to be sufficiently wide to make lobbying transparent.

In view of the discussion in Committee, it is disappointing that the Government have not come forward with their own amendment to improve the Bill in this respect. The amendment in my name is an attempt to remedy that omission. Without this amendment, the Bill will fail in its objective of increasing the transparency of lobbying Government. It will further undermine public confidence in our political system because it will be seen as an example of Parliament either failing to understand the lobbying process or failing to take effective measures to address and identify a problem. I beg to move.

[Lord Tyler]

My Lords, Amendment 3, in my name and that of my noble friend, is grouped with the amendment just moved by the noble and learned Lord. As has already been made very clear this afternoon, the key issue is not the role, title or job description of the people who take part in the activity of lobbying but the activity itself. That is absolutely critical. I have a lot of sympathy with my noble friend Lord Norton, who, in his usual way, has put his finger right on that point. That is why I thought that it was extremely important to have the statement from my noble and learned friend Lord Wallace of Tankerness a few minutes ago about the nature, character, efficiency and accuracy of the register of meetings with those who are taking decisions, or making proposals to Parliament, on behalf of the Government.

I should say in parentheses, in welcoming back my noble friend Lord Wallace of Saltaire, that way back at Second Reading, let alone in Committee, he expressed a lot of interest in the proposals that we were making from these Benches about improving the status of the record of meetings that was introduced for the first time—for which the Government should get credit—in the past few years. As I said in that earlier debate, I am not so worried about who the lobbyists are but am very worried that we know who they lobby, what they lobby about and when. The very full statement made by my noble and learned friend Lord Wallace of Tankerness a few minutes ago goes a very long way to meeting that anxiety. We have made it clear at every stage of the Bill that, for us, that is the core issue. The proactive publication of data on ministerial meetings by the Government makes a potentially huge difference. That is what transparency should be all about.

We also believe it is important that that record should indicate when the meeting with in-house lobbyists takes place. Whether they are the managing director of a whisky firm, or a lowly employee of any other firm, it is the subject matter of the meeting, when it happened and with whom that is of considerable importance. I agree with my noble and learned friend and I am delighted that the House agreed too, a few minutes ago, that simply extending the register into a sort of enormous directory, like a telephone directory, with every lobbyist in the land, whether from a church, charity or voluntary organisation, would not really seem to be anything more than disguising the wood for the trees.

Amendment 3 deals very specifically, and only, with the issue of special advisers. Many in your Lordships’ House have had enormous responsibility in the Civil Service. What is unusual about a special adviser is that he or she of course is not responsible to the head of the department: he or she is not a full-time employed member of the Civil Service, and their first loyalty and responsibility is to the political master for whom they work. The special adviser’s responsibility is to the Secretary of State, or other ministerial politician, and his or her relationship is with them. It is therefore our view that this is the one major exception that should be tackled, either in this Bill or in some other way, because these are special people—special advisers are, by definition, outwith the normal hierarchy of responsibility to the Permanent Secretary in the department.

The principle in the Bill is that if the consultant gains access to or influences a Minister on behalf of a client, the public should know who they and their clients are. However, anyone who has been in this building for any length of time or who has lobbied knows perfectly well that influencing a Minister does not necessarily mean seeing them yourself. There is sometimes an even better way: to meet the Minister’s special adviser. Spads have a rather unfair bad reputation in the press. Many will remember Clare Short’s description of them as living “in the dark”. I think that was about a particularly period in the previous Government, perhaps, and it may not be appropriate for all periods of recent history. That epithet then led to a thought-provoking analysis of the role of special advisers in a book of the same name by the respected academic Dr Andrew Blick. In my limited experience of being on the Government side of the House in the past three years and therefore having spads in my own party, it does not feel as though many now live in the dark. We see them all the time. They are helpful, they are influential; in many cases persuading a spad is the first step to persuading a Minister.

I know that this is also part of their job: to meet outside groups. It is very proper and very effective—a proper role that they should undertake. Perhaps it is a better one than a civil servant in the normal hierarchy. Ministers have only a certain amount of time and sometimes it is the right judgment to ask a senior adviser to see someone first, sound them out and explain the Government’s thinking—there is absolutely nothing wrong with that. However, these meetings with outside groups are important and details of them, like the ministerial meetings which were so fully referred to earlier, should be transparent.

The first step we could take today to make that point in this House is to say that in this Bill those consultants who lobby spads should have to register, just as if they were meeting Ministers. It would then follow, of course, that although this is outside the immediate scope of the Bill, for this to be meaningful spads would also need to publish all their meetings with all lobbyists, whether they be consultant lobbyists or in-house, just as Ministers do. I very much hope that when we look in detail at the record of meetings in future to see how these can be improved and made even more influential and transparent, my noble friends on the Front Bench will acknowledge that this would be an important step to take.

This is not in any way intended to malign spads or imply that anything they do is wrong. It is the opposite. It says that what they do is useful and, on many occasions, necessary, but keeping any aspect of it hidden feeds a largely unnecessary suspicion that they are up to no good. I referred at earlier stages of the Bill to the fact that two of the big lobbying scandals in this Parliament have involved close advisers to Ministers rather than Ministers themselves, and that resignations resulted.

For example, the Murdoch empire recognised these facts of life very early on. We should too. Both scandals would probably never have got to this stage had encounters between close ministerial advisers and outside groups been a matter of public record. It is therefore as much in the Government’s interests as in the public interest—surely the two should fit hand in glove anyway—for this information to be freely available. I quoted before and I shall quote again. The Prime Minister memorably said:

“Sunlight is the best disinfectant”.

I agree.

16:15

[Lord Norton of Louth]

My Lords, briefly I support the comments of the noble and learned Lord, Lord Hardie, and those of my noble friend Lord Tyler. I also associate myself with my noble friend’s comments about special advisers. He is absolutely right. This Bill is flawed in two major respects. First, political consultants rarely lobby directly. They advise clients and the clients do the lobbying. That point was well made in the other place, not least by those who have direct experience of the lobbying industry.

The second flaw is that when they do lobby, they rarely lobby Ministers or Permanent Secretaries directly. We know that from the debates in this House from those who have served as Ministers and Permanent Secretaries. The amendment before us goes at least some way to addressing that second problem. The Bill remains flawed and we want to look at that later in more fundamental respects, but at least this amendment would try to make a bad Bill less bad.

[Baroness Williams of Crosby (LD)]

My Lords, I strongly support my noble friend’s amendment and that put forward so effectively by the noble and learned Lord on the Cross Benches. Having been a Minister, I want to say a few words about what in my view is the absolutely vital importance of including special advisers in this Bill. I would add to that the first three ranks of the Civil Service, by which I mean under-secretary, deputy secretary and Permanent Secretary.

I find it very puzzling that the specific rank of civil servant mentioned in the Bill is that of Permanent Secretary. I can think of almost nobody less likely to be open to exploitation by lobbyists. To be a Permanent Secretary, you have to be somebody of outstanding integrity, whose honour cannot be doubted, who will be respected in his or her own department and who sets the quality and standards of that department. You are, frankly, the last woman or man to be likely to fall for the more dodgy approaches of some slightly dodgy lobbyists. In fact, it is close to inconceivable that this particular person is likely to be open to temptations of a kind that all of us would eschew.

However, I am asking the Government to include the first three levels because, as has been very rightly said, the much more tempting position is that of people near but not at the top. For example, I was for some years on the Government’s Advisory Committee on Business Appointments. We looked consistently at what the gap should be between a senior civil servant leaving his or her department and being free to take up other employment afterwards. Members of this House will know that certain departments have very close links with the private sector and that, therefore, their officials carry with them a level of expertise that is quite exceptional. They are indeed very attractive recruits to private business because obviously they have a great deal of experience and knowledge.

Generally speaking, in the Advisory Committee on Business Appointments, consideration is given to how wide the gap should be between leaving one’s employment as a civil servant and joining a private industry with which one may previously have had some kind of relationship. It is extremely tempting, obviously, for somebody to join a private sector business when they have a great deal of knowledge that would be useful to that business, but the longer the gap the less useful that knowledge may be. It is therefore strange, to say the least, that the level of seniority in the Civil Service that makes an individual so attractive to major industries that have close relations with a certain department should not be covered by this Bill.

I have suggested that we should limit that practice as much as possible. I quite agree with my noble and learned friend Lord Wallace of Tankerness, but it is no good having what he called a laundry list or a telephone list of names. Deputy and under-secretaries are very limited in number and particularly attractive to those who want their expertise. I do not doubt that both sides behave with full honour but I also think that lobbyists will be very attracted to people in that situation, and therefore it would be strange if the Bill did not cover that particular group of civil servants.

When I first became a Minister the number of special advisers was extremely closely controlled. According to Prime Minister Wilson, the absolute maximum number of special advisers any Minister, however senior, could have was two. They had to be shown to be knowledgeable about the kinds of organisations with which that Minister would interact; for example, in my own case as Minister of State for Education and Science, it was very clear that the special advisers I needed had to be able to show expert knowledge and evidence of science, universities or the education of children in schools. The two I had were both eminently well suited in that way. But the general attitude towards special advisers was very limited. They were experts, they were there to advise, but they were not there to substitute.

That has rather changed over the years. There are now many more special advisers than there were. There have been one or two worrying cases where a special adviser has taken upon himself or herself responsibility for something that clearly should belong to the Minister. My noble friend Lord Tyler gave an example. Some of your Lordships may remember the famous occasion when a special adviser told her Minister that it was a good time to issue bad news and crises were ideal because they meant that the bad news was hidden by the interest of the media in other issues. I do not want to push that very far, but there are certainly a few cases—not many—where special advisers have behaved as if they were autonomous, and beyond what seems to be either the wishes or the desires of the Minister concerned. Some people may remember that the previous Prime Minister, Mr Gordon Brown, had difficulties with at least one of his special advisers, which did not do him or his reputation any great good, despite the fact that he is undoubtedly a man of integrity and honour himself.

Quite straightforwardly, that means there is a very strong case indeed for recognising that special advisers are, as the noble and learned Lord, Lord Hardie, and my noble friend said, something of a highway to a Minister. They are the quickest route to his personal information; they are probably closer to him than anyone else in his department, with the possible exception of his PPS. Often, they are also people who have their own agendas, and those agendas may not invariably be the same as that of the department. I therefore feel that it is important that special advisers should be held accountable. Indeed I would go further and say that it is crucial that they should be held accountable, and that this Bill takes congnisance of the relationship between a Minister and a special adviser.

Therefore I hope that the House gives full consideration to the proposals in these amendments and will recognise that, without some movement towards including special advisers, the effectiveness of this Bill will be very much limited. I have already argued for the top three ranks of the Civil Service. I hope that the amendment will be seriously considered in this House, and that the Government will reconsider the narrowness of the interpretation of which people are open to lobbying. As the Bill stands, it is steadily getting better. I pay full credit to my noble and learned friend Lord Wallace of Tankerness and his noble friend Lord Wallace of Saltaire for the improvements that have been made to this Bill, but we should include special advisers in evidence that we are serious and committed to the idea of limiting unfortunate and ill-motivated lobbying to those who might be effecting it.

[Lord Woolf (CB)]

Could I ask for the noble Baroness’s assistance from her great experience on whether she sees any difference between special advisers, to whom Lord Tyler refers, and political advisers, to whom the noble and learned Lord, Lord Hardie, refers?

[Baroness Williams of Crosby]

My impression is that there is not any real difference between the two. It is possible that some Ministers prefer to use the term “political adviser” to indicate to the public the scope of a particular special adviser’s responsibilities, but I do not believe there is any more to it. I hardly dare say that to a former leading justice in this country, but I hope he will agree with me that there is no real difference between them in terms of their responsibility.

[Lord Aberdare (CB)]

My Lords, I, too, support the amendment put forward by the noble and learned Lord, Lord Hardie. I very much welcome the statement made by the noble and learned Lord, Lord Wallace of Tankerness, in terms of improving the quality, the usefulness and the timeliness of ministerial reporting of the meetings they have. But that makes me even more puzzled about what specific problem this Bill and this register are intended to solve. As we have heard, it is only going to cover consultant lobbyists who represent—if anything—less than 20% of all those operating in this area. Currently, this amendment extends only to Ministers and Permanent Secretaries.

When I worked for IBM in its public affairs function, I occasionally met Ministers, usually on what I might call ceremonial occasions. I hardly ever met Permanent Secretaries. What I did have was numerous contacts with other civil servants, and indeed with special advisers. That is where all the real lobbying activity went on, and where we pursued our interests as a company for IBM. I am completely baffled why my activities on behalf of IBM should be treated differently from the consultant lobbyists that we sometimes employed to advise us, one of which was an extremely good firm of which the noble Lord, Lord Tyler, was one of the leading lights. They would advise us on how we should approach civil servants, special advisers and others in the political process. It was not self-evident what we might have been lobbying for, because the range of interests that IBM had, and the range of issues in which it might have had an interest, was very broad indeed.

I am very conscious of the risk pointed out by some members of the lobbying industry that, under the Bill, transparency might end up being less than it was previously because the Bill sets such a low threshold that it might remove any incentive to go beyond it—although I welcome the intention to include reference to codes to which lobbyists have subscribed. If it turns out to be only a very small number of consultant lobbyists who need to register, I take the point made by the noble and learned Lord, Lord Hardie, that the burden of cost on that small number of firms of this rather elaborate structure may be unacceptable.

Finally, I am completely baffled as to how the Bill will address concerns among the public about who is saying what to whom on some of these issues. I therefore strongly support what the noble and learned Lord, Lord Hardie, has put forward and some of the related points made by the noble Lords, Lord Norton of Louth and Lord Tyler.

16:31

[Lord Bichard (CB)]

My Lords, as a former Permanent Secretary, I rise still bathing in the warmth of the comments from the noble Baroness, Lady Williams. Would that some of the current Permanent Secretaries were here to hear them; I think that they might have been moved to tears.

I shall speak only briefly in support of the amendments proposed by the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Tyler. It is one thing for Parliament to show that it does not fully understand, or understand very much, the lobbying process; it is a rather more serious thing for Parliament to show that it does not understand how Whitehall and the decision-making process work. That process works increasingly through special advisers and senior civil servants, not through Ministers and Permanent Secretaries. For this not to be recognised in the Bill is very odd and shows serious flaws.

[Lord Campbell-Savours]

My Lords, I spoke in Committee on this matter, so I shall be brief today. My concern is that special advisers often have more influence on ministerial decision-taking than do Members of Parliament, because they have daily access.

I want to tell a story of an incident that I experienced in 1999 on a train coming from my former constituency of Workington to London. To my side in the carriage was the Member of Parliament for Blackpool and opposite were two young men who were on their way to London, and we struck up a conversation. They told us that they were going to London to lobby in the department on the need to introduce new gambling legislation. As Labour MPs, we had absolutely no idea that discussions were going on in the department about gambling and gambling legislation. That was in 1999—some 14 years ago. Those two young men were going to meet the special adviser in the department concerned. I was very interested and asked them how they had made contact. They explained that they had done so at a political level, locally to start with, and had then been referred to the special adviser. There was no need as far as they were concerned to see Ministers.

In that particular case, the embryo of the debate had started with access from the industry directly to political advisers in the department. The discussion would then permeate within the department between, as has just been said, civil servants and the special advisers, to the exclusion of Parliament and individual Members of Parliament. I find that deeply troubling. One of the reasons why I want special advisers to be included in the Bill is that I want that process to become more transparent, so that individual Members of Parliament can at least see what is happening within a department, what influences are being brought to bear and the dangers that might arise. If those special advisers then organise meetings between various groups and Ministers without Members of Parliament being aware of the scale of the lobbying going on—I know that I am making a very subtle point—it is at that point that Members of Parliament need to know that such relationships are being forged. That is why I strongly support the amendment proposed by the noble Lord, Lord Tyler, and I hope that we have the opportunity to vote on it.

[Lord Turnbull (CB)]

My Lords, this is the first time I have got involved in this Bill.

The current structure is indeed rather peculiar: lobbyists or lobbyist consultants are to register themselves and report those whom they represent, but we will find out whom they lobby only by an indirect process of interrogating a list of external meetings of all kinds that Ministers and Permanent Secretaries have attended. The case for this amendment is that lobbying takes place with a much wider group of people, which in a typical department would be about five or six individuals. I was a Permanent Secretary for 11 years in three departments and I do not think I ever had a conversation with a lobbyist as defined in this Bill. The lobbying always took place with officials who were working on the policy or were experts on the subject or were working on a Bill team.

Should we extend the requirement to civil servants? Well, there are 412,000 of them, so we have to define whom we mean. The people working on a policy would probably include the senior Civil Service, which is probably about 3,000 people. The logic of this Bill is that we extend the requirement to assemble and publish a list of external meetings—of course, these are not only meetings with lobbyists—to a very much wider group. In my view, there would be a lot of dead-weight cost in this: most of those contacts are part of the regular and desirable interchange between government and industry. In the White Paper that launched this whole process, it was stated:

“The Government does not wish to create an obstacle to necessary interaction with policy makers”.

If that is the price—that we extend this to all of the senior Civil Service, who then have to report all external meetings involving not just these people but everyone—in my view that is a price too high.

On the other hand, I am taken by the arguments about special advisers. There are now 98 of them; there were 38 in 1997 at the exit of John Major’s Government; there were about 74 by 2010; the number dipped for about three months but now there are 98. If I really had to distinguish between the amendments in this group, I would vote against Amendment 2 but for Amendment 3.

[Baroness Royall of Blaisdon (Lab)]

I rise to speak to Amendment 2 in the name of the noble and learned Lord, Lord Hardie, my noble friend Lady Hayter and myself, which extends the parameters of who needs to be lobbied to prompt registration to include special advisers, civil servants and PPSs.

I, too, welcome the enhanced transparency in relation to reporting that was mentioned by the Minister in response to the earlier debate. However, I believe that will not be enough if the subjects who are principally lobbied are not asked to report. There has been progress, but it is simply not enough.

Both today and in Committee, a powerful and clear case has been made by former Ministers, former senior civil servants—which includes those in the Diplomatic Service, pursuant to the discussion we had in Committee—and former special advisers as to why the remit of the Bill must be extended if it is to have proper impact. As the noble Lord, Lord Norton of Louth, said in Committee, the target is normally the Minister and you therefore have to focus on the channels for reaching the Minister. The Permanent Secretary, as we have heard, is not a significant channel for this purpose. Indeed, the lobbying industry itself has said on numerous occasions that,

“we do not make personal representations to Ministers or Permanent Secretaries”.

So there we have it from the horse’s mouth. Yet the Government did not provide any convincing reason for why only meetings with Ministers and Permanent Secretaries should be subject to the provisions in Part 1. I hope that this short debate will persuade the Minister that there need to be some changes to this Bill in order to make it properly creditable.

Civil servants here and in Brussels should be included, not because there is any suggestion that they are conducting themselves in any inappropriate manner but to fulfil the purported aim of the Bill—that is, transparency. Last week it was revealed that there had been 130 meetings between representatives of the alcohol industry and the Government since 2010. The BMJ investigation showed that they had an extraordinary level of access to the Department of Health, which later decided to U-turn on the question of minimum unit pricing. It was a comment from the Minister for Public Health on the “Today” programme on Wednesday that caught my attention. Of those 130 meetings, she said, “But most of those were with officials”. Precisely. If the Bill is to increase transparency, the public should have access to this information.

I turn to special advisers. Naturally, I support Amendment 3 in the name of the noble Lords, Lord Tyler and Lord Greaves. Special advisers should certainly be subject to the same level of transparency, given how closely they work with their Ministers and the influence that they can and do have on policy. The case has already been well made but I make no apology for returning to the News International lobbyist Fred Michel, whose case proves quite how large the loopholes in the Bill are. He was summoned to the Leveson trial after DCMS released 164 pages of e-mails between him and Adam Smith, the then Secretary of State’s special adviser. This came to light only in what I am sure everyone would agree were quite extreme circumstances. Again, if the Bill is to increase transparency, the public should be able to access these details.

Given the stance taken in Committee, I imagine that the Minister may well object by saying that the provisions in our amendment are disproportionate; indeed, the noble Lord, Lord Turnbull, has just made that case. Of course that argument cannot apply to extending the Bill to cover special advisers—that should be a given now—but, if proportionality is the Minister’s only concern, I hope that he will commit to bringing an amendment back at Third Reading that at least includes special advisers, civil servants and Parliamentary Secretaries. There is time for the Government to work on an amendment that could ensure that these people are included in the least bureaucratic way.

The Minister may also point to the fact that the limits that the Government have put in the Bill mean that there is no obvious place to publish such information. In Committee I asked the Government to look at the least bureaucratic way of extending the scope of those lobbied, but they do not seem to have taken the opportunity to find a solution. We can provide the Minister with two solutions. No doubt the Minister will be aware that on the website data.gov.uk, the meetings between special advisers and newspapers editors, proprietors and executives are already published, so there is no convincing argument why that cannot be extended. The other solution may have been provided by the noble Lord, Lord Norton of Louth, and it is elegantly simple: the Minister, when publishing details of his own meetings, publishes information about the meetings of civil servants and special advisers in his department.

This House has explained—very graphically, in many ways—the problems relating to the Bill and its extent, but we have also pointed the Government towards solutions. I very much hope that they will accept these amendments. If not, I trust that they will go away and come back with an amendment at Third Reading that takes these crucial issues into account.

[Lord Wallace of Tankerness]

My Lords, the noble and learned Lord, Lord Hardie, has moved an amendment that would extend the scope of the register to include meetings with Parliamentary Private Secretaries, civil servants and political advisers, while the amendment of my noble friend Lord Tyler would extend the scope to include meetings with special advisers.

At the outset, I want to pick up the point that was made by the noble and learned Lord, Lord Woolf, who asked whether there was a difference between “political adviser” and “special adviser”. My understanding is that the term “special adviser” is defined in the Constitutional Reform and Governance Act 2010. In Committee the noble and learned Lord, Lord Hardie, indicated that the term “political adviser” was really referring to special advisers. One is a term of art already recognised in statute, but for the purposes of this debate I think that everyone is talking about the same entity, if that is the right word.

The Government have previously outlined that the register is designed to complement the existing government transparency regime, to which I referred and on which I made announcements in the previous debate, whereby Ministers and Permanent Secretaries proactively publish details of their meetings with external organisations—I should add, for the avoidance of doubt, that these will be external organisations whether the Minister meets them in Whitehall, Edinburgh, Brussels, Washington or wherever. The register will address a specific and discrete problem within that context: that it is not always clear whose interests are being represented by consultant lobbyists.

16:45

To extend the scope of the register to other public officials would provide no appreciable benefits because they are not required to publish their diaries. Yes, we accept that lobbyists make communications to government other than directly to Ministers and Permanent Secretaries but, ultimately, it is the Minister who makes the decision. I noted the point made by the noble Lord, Lord Bichard. Ministers are of course the ultimate decision-makers and Permanent Secretaries are the accounting officers for their departments; that is the thinking which underlies the scope of the Bill.

My noble friend Lord Tyler suggests that the register should apply to those who lobby special advisers. While special advisers may provide advice, they are not decision-makers. Indeed, my noble friend said that even talking to special advisers may be a first step towards trying to achieve a decision from a Minister. However, it is the Minister, not the special adviser, who ultimately has responsibility for the actions of the department.

The noble Baroness, Lady Royall, and my noble friend Lady Williams accepted that the cases cited in making their points were extreme. My understanding is that, in both the case of the special adviser who said that 9/11 was a good day for burying bad news and the example of Adam Smith, the special advisers resigned. We recognise that there is a code for special advisers. In cases where that code was breached, they took the significant step of resignation. It is therefore right that Ministers are the focus of the meeting reporting system and the register.

The noble and learned Lord, Lord Hardie, suggests that, in addition to special advisers, the register should apply to those who lobby civil servants and Parliamentary Private Secretaries. The amendment says, “civil servants”; my noble friend Lady Williams talked about the top three grades, but the amendment goes far further—further even than the senior Civil Service.

While registers are designed to reflect different contexts and to address broader problems sometimes cast their scope wider, by doing so they can greatly increase the cost, as referred to by the noble Lord, Lord Turnbull. The necessary complement to an extension would be the introduction of meeting reporting obligations for all public officials. Such a system would result in an unnecessary, disproportionate and unhelpful administrative burden. The cost to the public purse that it would involve could not be justified in the light of the limited transparency benefits that would be achieved.

The noble Lord, Lord Turnbull, suggested a figure of 412,000 civil servants; my speaking note says that there are 450,000 civil servants in the United Kingdom. One must ask whether there is really a public interest in seeing the details of all of their meetings with external organisations. Even if the scope were limited only to senior civil servants, it would still require the diaries of 5,000 individuals to be published. That would be a huge cost and would include, as the noble Lord, Lord Turnbull, said, much dead weight.

[Baroness Williams of Crosby]

On that point, I raise the question of whether the three most senior classes of the Civil Service are not in a much narrower area in terms of cost than the wider range of civil servants to which my noble and learned friend has been referring. They seem to be almost completely distinct in terms of the costs involved.

[Lord Wallace of Tankerness]

My Lords, I accept that it would be more proportionate, but I really am not in a position to say. One of the problems is that some of the terms used, such as “director-general”, mean completely different things in different departments. That has been another issue. At a time when we should be streamlining public services, not imposing additional costly burdens upon them, I do not believe that the added burden of 5,000 extra diaries would be proportionate.

[Baroness Royall of Blaisdon]

I should like to raise two issues. First, nobody is suggesting that all meetings with all civil servants should be included—I have some sympathy with what the noble Baroness, Lady Williams, said—only meetings with lobbyists. Secondly, the Minister has not answered the point made earlier in Committee, I think, or the suggestion made by the noble Lord, Lord Norton of Louth, that when publishing details of his or her own meetings, Ministers should also publish information about the meetings of civil servants and special advisers in his or her department. That seems a very unbureaucratic way of addressing the issue.

[Lord Wallace of Tankerness]

My Lords, the noble Baroness says that they are not asking to include all civil servants’ meetings with everyone, but the amendment does say all civil servants, although I admit that she says that it would cover any lobbyist who met civil servants. As for Ministers’ reporting regime, we have said that Ministers will report the people with whom they have had meetings whether they are lobbyists or non-lobbyists. To further subdivide that would be a considerable burden on 450,000 civil servants. I do not believe that it would add to the transparency that we have tried to enhance and improve by what we have already done as a Government, some of which has been unprecedented. I think that the noble and learned Lord is seeking to intervene.

[Lord Hardie]

I am grateful to the noble and learned Lord. The point that I am seeking to make in this amendment is that one has to go back to the definition in Clause 2. In the terms of that definition, it is people who fall within the category of persons carrying on the business of consultant lobbying who have to register under Clause 1. Clause 2(1)(a) states that they are required to register if, in short,

“in the course of a business and in return for payment, the person makes communications within subsection (3)”.

It is the communications that we are addressing. Subsection (3) states that the communications are,

“oral or written communications made personally to a Minister of the Crown or permanent secretary relating to”,

the various matters mentioned. I think that second Permanent Secretaries are on the list of people in the schedule.

The point of this amendment is to highlight that the narrow definition of people to whom communications are being made which require registration on the part of consultant lobbyists renders the whole concept of registration almost worthless because, as has been clear from the contributions across the House, these people are not just lobbying Ministers. To get round that, a lobbyist who lobbies a special adviser or a civil servant concerned with policy would not be required to register.

[Lord Wallace of Tankerness]

I think I understand the point that the noble and learned Lord is making about the requirement to register if you are making communications with these people. It may be that that would bring more names on to the register—I simply do not know—but to enhance transparency, the complement to such an extension would be the introduction of meeting reporting obligations on these public officials. Otherwise you have a list of names of consultant lobbyists and their clients but there is nothing there to which you can then relate them. It becomes fully meaningful only if you have that complementary extension of the scheme. On the amendment, I sought to make the point that that would be a huge burden and one that would not be consistent with efficiency in government; nor indeed would it be proportionate to improving transparency.

[Lord Campbell-Savours]

The Minister has not responded to the very narrow point that was made by my noble friend Lady Royall of Blaisdon. She asked a very simple question: why should a Minister, in his or her registration, not register the activity of that Minister’s individual political adviser? That political adviser is working on behalf of that Minister. No doubt the noble Lord, as a Minister, has political advisers of his own. In the event that they meet lobbyists from outside, they are meeting them on his behalf. Why should not he, in his registration, refer to those meetings?

[Lord Wallace of Tankerness]

My Lords, until I became Deputy Leader of your Lordships’ House I did not have a special adviser. I now have one but I am not sure that she has met anyone, although she has said that if she could get a diary secretary it might be a bonus. We take the view, as I indicated earlier, that it is the Ministers who are making the decisions. On that basis, we believe that it is communications with Ministers—and not just meetings, as the noble and learned Lord said—that are pertinent. We believe that these proposals are appropriate and proportionate. I therefore urge the noble and learned Lord—

[Lord Tyler]

I am grateful to my noble and learned friend, who is very good to take points from us all. I sympathise with the point he makes about the scale of the increase in the number of people who would be involved if Amendment 2 was agreed, and the potential enormous cost as a result. However, that does not apply to Amendment 3, as has been made clear on all sides of the House. The very specific nature of the character, responsibility and role of special advisers—I think the noble Lord, Lord Turnbull, said that there are 98 of them—would not require a great increase in the amount of information to be given by government in terms of both the record of meetings and who, as regards lobbyists, meets them. Can he give an undertaking that between now and Third Reading he will look very hard—in sympathy with the views that have been expressed on all sides of the House—at the practicalities of including special advisers? In terms of both the meetings they have and the nature of the people who they meet, there is broad support right across the House for their being exceptional. They are indeed, as their title states, special. In those circumstances I hope that my noble friend is prepared to look again at that issue.

[Lord Wallace of Tankerness]

My Lords, I know that my noble friend knows me well enough and I hope that I have made enough appearances at this Dispatch Box for noble Lords to know that I would not wish to give the kind of undertaking that my noble friend seeks if it were to raise an expectation that I am not necessarily able to deliver on. I therefore invite the noble and learned Lord to withdraw his amendment.

[Lord Norton of Louth]

Can my noble and learned friend clarify what he has said? If a consultant lobbyist lobbies a Minister directly to achieve policy X, that consultant lobbyist must register. If that consultant lobbyist only lobbies the special adviser, who then advises the Minister, who decides to implement policy X, they do not have to register. The second point is on civil servants. Does he think that lobbyists will lobby any passing civil servant as opposed to those members of the senior Civil Service who have responsibility in particular areas, and are therefore a very narrow and usually clearly defined group?

[Lord Wallace of Tankerness]

On the second point, I was responding to the amendment as it is tabled, which does not narrow it down at all to senior civil servants—it applies to all civil servants. I am sure that bodies make arrangements with junior officials as well as with members of the senior Civil Service. On the issue of special advisers, I cannot elaborate on what I have already said.

[Lord Hardie]

I am grateful to noble Lords on all sides of the House for their support for the amendment. I realise that the noble Lords, Lord Tyler and Lord Turnbull, suggest that the matter should be confined to special advisers. However, as I said in Committee, when I was in practice at the Scottish Bar I was standing junior counsel to the City of Edinburgh district council, and then, latterly, senior counsel—and it was clear from my experience there that it was not the senior director of administration or the director of planning who was the subject of contact by people seeking to influence policy. The contact was with the local authority officials—in this context, the civil servants—who were concerned with the formulation of policy. It strikes me that to exclude the very policymakers, whether civil servants or special advisers, makes nonsense of the registration process. I therefore beg to test the opinion of the House.

17:01

Division 2

Ayes: 191

---

Labour: 139
Crossbench: 39
Independent: 4
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 242

---

Conservative: 152
Liberal Democrat: 68
Crossbench: 15
Ulster Unionist Party: 2
Independent: 2

Amendment 3

Moved by

[Lord Tyler]

3: Clause 2, page 2, line 7, after “secretary” insert “or special adviser”

[Lord Tyler]

I beg to move, and to test the opinion of the House.

17:13

Division 3

Ayes: 213

---

Labour: 133
Crossbench: 34
Liberal Democrat: 29
Independent: 5
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 195

---

Conservative: 153
Liberal Democrat: 28
Crossbench: 9
Ulster Unionist Party: 2
Independent: 1

17:25

Amendment 4

Moved by

[Lord Wallace of Tankerness]

4: Clause 2, page 2, line 18, leave out “the Minister or permanent secretary” and insert “the person to whom the communication is made”

[Lord Wallace of Tankerness]

My Lords, the amendments in this group are a number of technical amendments in the name of my noble friend Lord Wallace of Saltaire. It may assist the House if I briefly go through them and explain their purpose.

Amendments 4, 5 and 6 clarify, and provide greater consistency to, terminology used in relation to the recipients of the lobbying communications and the communications themselves. The minor amendment, Amendment 6, which clarifies the term “Minister of the Crown”, does not, in the context of the Bill, capture the corporate bodies of the Defence Council and the Board of Trade. As Clause 2 makes clear, the communications that the register is intended to capture are those that are,

“made personally to a Minister of the Crown or permanent secretary”.

The definition in the Ministers of the Crown Act 1975 includes the Defence Council and the Board of Trade. Both these entities, however, are corporate bodies with which it is not possible to make personal communications. As such, these amendments remove those bodies from the definition and, in doing so, provide further clarity regarding the communications that fall within the scope of consultant lobbying.

Amendment 8 clarifies the position in relation to employees who make lobbying communications as a part of their employment. Specifically, the amendment provides that employees will not be considered as carrying on,

“the business of consultant lobbying”,

if they make lobbying communications as an employee in the course of a business carried on by their employer. The amendment therefore clarifies that in-house lobbyists are not captured by the Part 1 provisions, and that it is a consultant lobbying firm rather than its employees that are required to register in respect of any lobbying activity. As Ministers have made clear—indeed, as we have already debated—the register is designed to address the problem that it is not always clear whose interests are represented by consultant lobbyists.

Amendment 9 provides, first, that where an individual makes a communication in the course of the business of another, then both the individual and that other business or person make that communication. As such, the amendment ensures that the client on whose behalf consultant lobbying communications are made is always declared on the register even if that communication is undertaken by a subcontractor that the consultant lobbying firm has engaged. The amendment also provides that if the individual happens to be an employee—as opposed to a contractor, for example—then the employee is not to be regarded as making the communication on behalf of their employer but, rather, only on behalf of their employer’s client, reflecting the fact that in-house lobbyists and employees of consultant lobbying firms are not required to register.

Amendment 10 is intended to remove any ambiguity as to the maximum period of a reappointment term of the registrar, which is three years. An individual may be reappointed twice, and the maximum period for each of those terms is three years.

Amendments 18, 20 and 21 ensure consistency in the language used in the provisions relating to the cancellation of an information notice or the variation or cancellation of a penalty notice. By ensuring consistency of terminology, these amendments will further clarify the detail of the provisions relating to the cancellation and/or variation of these notices and ensure consistency with approaches to such matters in other legislation.

Amendment 19 clarifies that any individual, not just employees, can commit the offence of carrying on the business of consultant lobbying while unregistered if they and/or their organisation are unregistered. The amendment will remove any ambiguity as to whether the provisions apply to individuals who undertake consultant lobbying in the course of a business but are not employees of that consultant lobbying business—for example, contractors. It will therefore ensure that the application of the provisions in this respect is absolutely clear.

Amendment 24 has been tabled to clarify that the charges associated with registration will be set to ensure that the sums received offset the total costs of the registrar’s activities. Treasury guidance requires that if a charging regime recoups costs other than those directly associated with the service provided—in this instance, the keeping of the register—then the position should be made explicitly clear to Parliament. This amendment reiterates that the charges provided for in Clause 22 will be set to recover the total cost of the registrar’s activities, including those that are not directly connected with the keeping of the register, such as enforcement activity.

Amendment 25 removes drafting in relation to the netting-off of monies from the Consolidated Fund for the funding of the registrar. Such funding will instead be arranged administratively between the Cabinet Office and the Treasury.

Amendment 27 is tabled to fulfil the Government’s commitment to implement the recommendations of the Delegated Powers and Regulatory Reform Committee in relation to Part 1. The Government, as ever, are grateful to the committee for its thoughtful consideration of the delegated powers in Part 1 and have accepted its recommendations in relation to this part in their entirety. The amendment alters the part to require that regulations under Clause 4(5) or Clause 5(4), the first regulations to be made under Clauses 11(3) and 17(3), and any regulation which amends or modifies the provisions of the part, must be made by the affirmative procedure. As a result, Parliament will be provided with the opportunity to undertake detailed scrutiny of any regulations made under the powers in these clauses. Again, I express thanks to the Delegated Powers and Regulatory Reform Committee for its detailed report on this part of the Bill. I beg to move.

Amendment 4 agreed.

17:30

Amendments 5 and 6

Moved by

[Lord Wallace of Tankerness]

5: Clause 2, page 2, line 19, leave out “the communication” and insert “it”

6: Clause 2, page 2, leave out lines 24 and 25 and insert—
““Minister of the Crown” means the holder of an office in the government, and includes the Treasury;”

Amendments 5 and 6 agreed.

Schedule 1: Carrying on the business of consultant lobbying

Amendment 7

Moved by

[Lord Hardie]

7: Schedule 1, page 53, line 1, leave out paragraph 3

[Lord Hardie]

My Lords, in moving this amendment, I declare an interest. As I explained in Committee, I am a member of the All-Party Parliamentary Group on Taiwan and have received hospitality from that Government in the form of social events. Several years ago, I visited Taiwan on two occasions as a guest: the first was as part of a judicial delegation from Scotland and the second was as a lecturer at an international conference. As I advised the registrar of interests last week, I have now been invited to speak at another conference next month, and my expenses will be paid by the Taiwanese Government. It is a legal conference.

Paragraph 3 of Schedule 1 excludes from lobbying activities communications from an official or member of staff of a sovereign power. In Committee, I sought clarification on whether that included countries such as the Republic of China (Taiwan), which is not a member of the United Nations and with which we have no formal diplomatic relations, although we do have an office and a representative there and it has offices in this country. The Minister promised to write to me. I received a letter dated 7 January from the noble and learned Lord the Advocate-General to the effect that communications from any foreign Government, irrespective of their country’s membership status with the United Nations or its diplomatic status with UK, would not meet the criteria for lobbying for profit in Clause 2.

In view of that response, it seemed that paragraph 3 of Schedule 1 was unnecessary, and I wrote accordingly to the noble and learned Lord. I received a reply dated 9 January, in which he confirmed that communications from foreign Governments,

“will not be captured by the definition of consultant lobbying outlined in clause 2”.

However, he added that paragraph 3 of Schedule 1,

“provides helpful clarity, especially to international colleagues, in relation to the application of the register and it is not our intention to remove it by amendment at Report stage”.

It seems to me that Clause 2 should be sufficient assurance to sovereign powers, and the addition of paragraph 3 may have the unintended consequence of causing concern for foreign states that are not sovereign powers. For that reason, the amendment seeks the removal of this paragraph.

In moving the amendment, I seek clarification from the noble and learned Lord as to what is meant by the term “sovereign power” in the Bill. Sovereignty would seem to me to include such issues as control over a geographical area whose citizens are governed by its rulers, whether they have been democratically elected or not. Taiwan is a democracy whose citizens enjoy universal suffrage from the age of 20. There are elections for the President and the legislature every four years. The President can hold office only for two successive terms. The Government pass legislation and govern their citizens, and Taiwan has diplomatic relations with a number of countries, including the United States of America. Does the noble and learned Lord accept that sovereignty does not depend upon membership of the United Nations or having diplomatic relations with the United Kingdom? In those circumstances, will he confirm that Taiwan would satisfy the test of sovereignty for the purpose of this provision? Even if Taiwan does satisfy that test, what about countries which do not? Which ones are they? Does the inclusion of sovereign states not cause concern for those countries which do not come within that category? I beg to move.

[Lord Wallace of Tankerness]

My Lords, the noble and learned Lord, Lord Hardie, has moved an amendment which would delete paragraph 3 of Schedule 1 and, as such, remove the explicit exemption from the requirement to register for members of staff and officials of sovereign powers and international organisations.

As the noble and learned Lord very fairly explained in moving his amendment, we have been in correspondence over the past week on this matter. The Government believe that, by establishing a statutory register of consultant lobbyists, this part of the Bill aims to make clear whose interests are represented by consultant lobbyists when they meet Ministers and Permanent Secretaries. It is not our intention that the register should capture international or diplomatic communications by representatives of foreign Governments or authorities or of international organisations. Communications made by representatives of foreign Governments or authorities will not be captured by the definition of consultant lobbying, as the noble and learned Lord has said, as they will not meet the criteria outlined in Clause 2 and the associated schedule. Those include, among other things, that lobbying must be done,

“in the course of a business and in return for payment”,

and,

“on behalf of another person”.

However, out of an abundance of caution, the Bill also includes a specific exemption in paragraph 3 that explicitly excludes officials or members of staff of sovereign powers and international organisations from the requirement to register in respect of their communications to UK Ministers and Permanent Secretaries.

Noble Lords will recall that Schedule 1 provides a number of explicit exemptions that are designed to provide absolute clarity regarding the application of Part 1 provisions. Those exemptions include one specifically excluding parliamentarians from the scope of the register. Although the Government have been absolutely clear that communications made by parliamentarians to the Government will not be captured by the Clause 2 provision, I understand that, none the less, noble Lords and Members of the other place have been particularly grateful for the extra clarity and reiteration provided by paragraph 4. Paragraph 3 is intended to provide equivalent clarity to sovereign powers and international organisations and the Government are not persuaded that it should be removed.

The noble and learned Lord asked specific questions regarding Taiwan. I am sure that he and perhaps other Members of your Lordships’ House would agree that the Report stage of the transparency Bill is perhaps not the most appropriate forum in which to discuss matters of international diplomacy. Indeed, if the noble and learned Lord wishes to pursue the issue, he may wish to take it up with my colleagues in the Foreign and Commonwealth Office. In these circumstances, I ask him to withdraw his amendment.

[Lord Hardie]

I am grateful to the noble and learned Lord for putting those remarks on the record and, in the circumstances, I seek leave to withdraw the amendment.

Amendment 7 withdrawn.

Amendments 8 and 9

Moved by

[Lord Wallace of Tankerness]

8: Schedule 1, page 53, line 16, at end insert—
“3A An individual does not carry on the business of consultant lobbying by reason of making communications as an employee in the course of a business carried on by the individual’s employer.”

9: Schedule 1, page 54, line 10, leave out paragraph 9 and insert—
“9 (1) Where an individual (“A”) makes a communication in the course of a business carried on by another person (“B”), the communication is to be regarded as being made by B as well as by A.
(2) Where A is an employee of B, then (whether or not the communication is made on behalf of a third party) A is not to be regarded as making the communication on behalf of B.”

Amendments 8 and 9 agreed.

Schedule 2: The Registrar of Consultant Lobbyists

Amendment 10

Moved by

[Lord Wallace of Tankerness]

10: Schedule 2, page 55, line 1, leave out from “but” to end of line 2 and insert “the term for which a person is re-appointed must not be more than 3 years”

Amendment 10 agreed.

Clause 4: The register

Amendment 11 not moved.

Amendment 12

Moved by

[Lord Wallace of Tankerness]

12: Clause 4, page 3, line 12, at end insert—
“(fa) a statement of— (i) whether there is in place an undertaking by the person to comply with a relevant code of conduct, and(ii) if so, where a copy of the code may be inspected;”

[Lord Wallace of Tankerness]

My Lords, in moving the amendment standing in the name of my noble friend Lord Wallace of Saltaire, I will also speak to Amendments 15, 16 and 22. As the Government have made clear throughout the debates on this part of the Bill, the statutory register of consultant lobbyists is designed to address a specific problem—that it is not always clear whose interests are represented by consultant lobbyists. Our objective is to ensure increased transparency without disrupting in any way the fluency of the dialogue between government decision-makers and those who will be affected by policy and legislative decisions.

It is not, nor has it been, the Government’s intention to attempt to regulate comprehensively all those who communicate with government, and the register will not, therefore, be associated with a statutory code of conduct. Instead, the Government are committed to ensuring that the statutory register complements the existing self-regulatory regime by which the industry promotes the ethical behaviour that is essential to the integrity and reputation of the lobbying industry.

We have been very grateful to those Members of your Lordships’ House for their thoughtful suggestions as to how this might best be achieved. After careful consideration of the debates both in this House and in the other place, and discussion with the industry and transparency groups, we have concluded that the most effective option is to provide for a statutory link between the statutory register and the industry-hosted voluntary codes of conduct. As such, Amendments 12, 15 and 16 will require consultant lobbyists to state in their register entries whether or not they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed. Such a provision will enhance both the transparency and the scrutiny of registered lobbyists, and the Government hope that the measure will therefore be welcomed.

Additionally, the Government have tabled an amendment to clarify that the registrar can both revise and replace the guidance that he or she has published. I appreciate that this group also includes amendments in the name of the noble Baroness, and I will perhaps respond to these after she has moved them.

[Lord Campbell-Savours]

What are the circumstances in which a lobbying firm would not wish to sign up to the code of conduct?

[Lord Wallace of Tankerness]

I am not sure that this should be addressed to me as opposed to the lobbying firms, since it is sincerely hoped that they would sign up to a code of conduct. What we seek through these amendments is for them to indicate that they have signed up to a code of conduct and for there also to be a link as to where that code of conduct can be found.

Amendment 13 (to Amendment 12)

Moved by

[Baroness Hayter of Kentish Town]

13: Clause 4, line 2, leave out “of whether” and insert “that”

[Baroness Hayter of Kentish Town]

My Lords, Amendment 13 stands in my name and that of my noble friend Lady Royall. I shall also speak to Amendments 14 and 23. This Bill should be about raising standards within the lobbying industry, not least to provide reassurance for the public about the behaviour of lobbyists. While we therefore welcome the Government’s amendments, which build on the arguments that we made in Committee—because they at least recognise the existence of a code of conduct—it is extremely regrettable that the Government have not gone one step further and made it a requirement for registered lobbyists to undertake to abide by a code of conduct. Without something which makes a code of conduct obligatory, there will be absolutely no qualification as to who can get on to the register. Yet once someone is on a register, they will put it on the bottom of their headed notepaper and it will look as though there is some sort of approval for being on that register. That, of course, will not be the case.

I raised this question in Committee and as a result, the noble Lord, Lord Wallace of Saltaire, kindly wrote and clarified to me that even if someone was convicted under the Bribery Act, that would not prohibit them registering as a consultant lobbyist. As the noble Lord wrote in the letter, the register is not an accreditation system and anyone on it will not be considered to be “approved”. In other words, regrettably, this does nothing about raising standards or changing behaviour and nothing about giving assurance to the public that the lobbying of their elected Government is legitimate and above board.

Without any such a requirement to comply with a code, it will also be impossible to remove even the worst offenders from the register—the “slightly dodgy” lobbyists which were described by the noble Baroness, Lady Williams, in the earlier debate. Our amendment to the Government’s Amendment 12 makes the voluntary adherence to a code a requirement.

Our lesser amendment, Amendment 23, would permit the registrar at some time in the future to publish a code of conduct. This might simply be a best practice code, an indication of expected behaviour or an indication against which any allegation to a professional body might be judged. However, it would keep in play the idea that the register should be about behaviour and not simply a list of lobbying companies. I beg to move.

17:45

[Lord Tyler]

My Lords, in Committee I moved an amendment to deal with the linkage between the registration process and existing codes of conduct in the lobbying industry. I warmly welcome the movement that the Government have now undertaken. If I recall rightly, we were given encouraging noises on that particular point in Committee. Therefore I very much support Amendments 12, 15 and 16. I shall listen with interest to what my noble and learned friend has to say about the stiffening of that resolve—if I may put it like that—incorporated in Amendments 13 and 14.

Amendment 23 is, almost by definition, premature. I want to see how this works. I do not want to put more responsibilities on the statutory register than it can easily undertake at the outset. The noble Baroness was quite right to talk about the future. In this particular case, we legislate for the future when it arrives, rather than put more responsibilities on the registrar at this stage. I will listen with interest to what my noble and learned friend has to say about Amendments 13 and 14, to see if there seems to be a practical way in which these could be incorporated and therefore give an even stronger statutory link between the register and the existing codes.

[Lord Campbell-Savours]

My Lords, as I understand the present arrangement—and I am only going by memory from what was said in Committee—the Public Relations Consultants Association already has a code of conduct. If it is correct that the professional organisations may over the longer term actually wind up—and in the period between Committee and Report we were led to believe that this is the case—then I presume that no code of conduct will necessarily apply. That is unless the Government introduce a model code on the basis that my noble friend on the Front Bench has just argued for. I asked the Minister in what circumstances an organisation that registered would not wish to introduce a code of conduct. I presume that during the consultation to which the Minister referred when he moved his amendment, they made clear what those circumstances would be. I wonder if we can be told what Ministers were told. There must be some explanation for why they resist. If there is an explanation—perhaps it is in the written brief or something—maybe we could see it prior to Third Reading. I simply cannot understand what they are objecting to, and we need to know during the course of the debate what it is.

[Lord Hardie]

Perhaps I can answer the noble Lord, Lord Campbell-Savours. In the debate about the first amendment today, I referred to how the PRCA requires people who sign up to the voluntary register to sign up to the code of conduct, which has strong enforcement of regulations or provisions. My point earlier was that if that disappears and there is to be a statutory register in place, it would be appropriate that we have something which is at least as good, not something that detracts from the current position.

[Lord Wallace of Tankerness]

My Lords, I appreciate the welcome given to the government amendments by the noble Baroness, Lady Hayter, and my noble friend Lord Tyler. As I indicated, we listened carefully to the debate in Committee. We have responded by tabling these amendments, which will require consultant lobbyists to state in their register entries whether they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed.

The Opposition’s amendments, spoken to by the noble Baroness, Lady Hayter, would require that lobbyists declare on their register entry which publicly available code of conduct they subscribe to, implicitly requiring such a subscription in order to register. The Government are not persuaded that the amendment is appropriate. Moreover, there is no provision that would require compliance with such codes or provide for enforcement.

The objective of the Part 1 provisions is to enhance transparency and scrutiny. We are not seeking to regulate behaviour. The noble Baroness mentioned the exchanges she had in Committee with my noble friend Lord Wallace of Saltaire about lobbyists who breach the Bribery Act. Of course, breaches of the Bribery Act are punishable by unlimited fines and up to 10 years’ imprisonment, or both. The Government do not consider it appropriate for a Bill to contain separate sanctions in addition to those already included in the Bribery Act, which are clearly very substantial indeed. It is quite proper that the Bribery Act includes serious and proportionate sanctions but it would not be appropriate for the transparency Bill to duplicate those sanctions. The Government considered the option of including a penalty whereby a person could be removed from the register but concluded that imposing a limitless prohibition on someone conducting their profession was too extreme a penalty.

Requiring lobbyists to declare whether they subscribe to a code will expose those who do not abide by the ethical principles that are so essential to the integrity of the industry. It is not the Government’s intention, however, to introduce a high-regulation regime whereby the registrar is responsible for monitoring and enforcing subscription to, and compliance with, codes of conduct. The Opposition also suggest that the registrar should be responsible for publishing a code of conduct. As my noble friend indicated, that is premature. The Government’s amendments are intended to complement the existing self-regulatory regime, not to replace or undermine it.

To pick up the point made by the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Campbell-Savours, we do not anticipate that lobbying associations such as the PRCA, CIPR and APPC will withdraw their codes. Indeed, the industry has welcomed the link between its codes and the proposed register, which it recognises will enhance the existing self-regulatory regime. That was the feedback we got during the consultation. I heard the noble Lord’s inquiry but I am not aware that any explanation or example was given of circumstances in which a firm would not register. Rather, the industry anticipates that it will continue with its codes and that the proposed register—and the government amendment—will enhance the existing self-regulatory regime.

[Lord Campbell-Savours]

Would Ministers be happy to meet a lobbying company that did not subscribe to the ethical standards that have been set down, either by the association or any code that the Government might wish to introduce at some stage in the future? Indeed, are there circumstances in which Ministers would refuse to meet them?

[Lord Wallace of Tankerness]

My Lords, I do not think the noble Lord can reasonably expect a blanket application. There may be reasons—I do not know what they might be—that are not malign as to why a particular group has not signed up. We already know that a majority of lobbying firms sign up to and adhere to the respective codes of conduct, but we believe that making it a statutory requirement would lead to unnecessary pressure and that what we are proposing has struck the right balance.

I have a lot of sympathy for the point the noble Lord is making but it would not be appropriate to make a sweeping general obligation on all future Ministers when you cannot foresee particular circumstances that would occur at any time or place. I believe we have struck the right balance. I urge the House to support the Government’s amendments and I urge the noble Baroness not to press the amendment in her name.

[Baroness Hayter of Kentish Town]

My Lords, I thank the noble Lord, Lord Tyler, for what I think is his support for the approach we are taking on this.

Of course, Amendment 23 would be only permissive. It does not require the registrar to publish a code of conduct; it simply permits the registrar, should at some time in the future he or she feel the need to, to be able to do so. I am slightly surprised that the Government cannot even allow a registrar at some time in the future to be able to publish a code of conduct. They seem to be turning their back on any interest in raising standards.

The Minister spoke about the Bribery Act. Of course, the issue is that nobody will be able to be removed from this register for any criminal offence. We could have people convicted all sorts of tax evasion—anything—still on the register. I and others think that this would be very misleading as it will appear that they are on a statutory register and therefore have some stamp of approval.

As to the question of who would not sign up to it, I am sure that your Lordships’ House is well aware that the Association of Professional Political Consultants is supporting our amendment. It very much feels that it will be only the bad boy who does not bother signing up and that this really undermines the code of conduct.

I am not going to test the opinion of the House on this amendment. But in withdrawing it, I will say two things. First, it was very sad to read in the paper yesterday that the UN special rapporteur called this Bill,

“a stain on British democracy”.

Secondly, my fear is that, as per the warning of the Prime Minister, the next scandal waiting to happen will be from a consultant lobbyist, it will be behaviour that would have been caught by this code and it will be this Government who said they did not want to make signing up to a code mandatory. With those words, I withdraw the amendment.

Amendment 13 (to Amendment 12) withdrawn.

Amendment 14 (to Amendment 12) not moved.

Amendment 12 agreed.

Amendments 15 and 16

Moved by

[Lord Wallace of Tankerness]

15: Clause 4, page 3, line 29, at beginning insert “In this section—”

16: Clause 4, page 3, line 31, at end insert—
“(b) a “relevant code of conduct” (in subsection (2)(fa)) is a code of conduct which governs the carrying on of the business of consultant lobbying (whether or not it also governs other activities) and is open to inspection by members of the public.”

Amendments 15 and 16 agreed.

Clause 6: Duty to update register

Amendment 17

Moved by

[Lord Hardie]

17: Clause 6, page 4, line 27, at end insert—
“(6A) A registered person who is aggrieved by the Registrar’s decision in terms of subsection (6) may appeal to the Tribunal against that decision.”

[Lord Hardie]

My Lords, this amendment seeks to give a right of appeal to someone whom the registrar has removed from the register. Clause 6(6) says:

“If the Registrar has reasonable grounds for believing that a registered person is not (or is no longer) a consultant lobbyist, the Registrar may decide that—

(a) the person’s entry should include a statement to that effect, or

(b) the person’s entry should be removed from the register”.

If the latter course is taken, the consequence is that the person—although of course we may be talking about a company—who is operating the business of a consultant lobbyist, once he has been removed from the register, can no longer operate as a consultant lobbyist. Clearly, that will have implications for not only the business itself but its employees.

Moreover, this measure has implications for the criminal law. Clause 12 provides that it is a criminal offence to act as a consultant lobbyist if you are not registered: once you are removed you can no longer act as a consultant lobbyist, but if you choose to do so it will be an offence. What is worse is that Clause 12(1) states:

“If a person carries on the business of consultant lobbying in breach of section 1(1) (lobbying whilst unregistered), an offence is committed by … the person”—

that is understandable, because the person will presumably know—

“and … any employee of the person who engages in lobbying in the course of that business”.

So if an employee of the company is not told that their registration has been removed, he or she will be guilty of an offence. It is strict liability; there is no statutory defence for the employee in that situation, so the consequences for the person and for the employees are quite significant. This decision to deregister a person is at the instigation of the registrar, if he has reasonable grounds for suspecting that they are no longer trading or what have you. There is no right of appeal against that. I am suggesting that there ought to be a right of appeal to the tribunal. There is a tribunal in existence in terms of the provision. If the employee accepts that he or she should be deregistered, there is no issue; but if he considers that the registrar has made a mistake, that would enable an aggrieved employee to have the right of appeal.

The Minister’s answer in Committee was that the registrar will act in a bona fide way and will not make mistakes. I am not questioning the bona fides of the registrar, but we all know that people make mistakes and there ought to be a remedy for someone in that position. In those circumstances I beg to move.

18:00

[Lord Wallace of Tankerness]

My Lords, I thank the noble and learned Lord for his amendment. It might be helpful if in response I indicate the Government’s thinking on sanctions and appeals. When considering the most appropriate sanctions in respect of non-compliance with the register, Ministers did consider the option of removing a person from the register, thereby prohibiting them or the company from continuing to operate as a lobbyist. We concluded, however, that such a sanction would represent a disproportionate penalty as it would essentially take away their livelihood. There are very few industries where, unless one is imprisoned, one is prevented from carrying out one’s professional activities if one has made errors in the course of doing so, and the Government are not persuaded that the lobbying industry should be singled out for such treatment. The sanctions regime that we have designed is therefore a proportionate one, designed to provide appropriate deterrent against, and punishment for, non-compliance with the provisions of the register.

Clause 6(6) does, however—as the noble and learned Lord has pointed out—provide the registrar with the ability to remove a person from the register. That provision is not drafted as a sanction, but rather as an administrative housekeeping measure to enable the registrar to maintain the accessibility and relevance of the register. The registrar may, for example, wish to remove individuals who have retired, passed away, chosen a change of career, or who work for a company that has been wound up. The noble and learned Lord’s amendment would enable a person to appeal against the registrar’s decision to remove them from the register, as under Clause 6(6).

We do not envisage that the registrar would remove any person from the register unless they were confident that the person no longer engaged, or no longer wished to engage in future, in consultant lobbying. I take the noble and learned Lord’s point that there are potential criminal sanctions attached to it. Obviously, as a former distinguished Lord Advocate, he will know that there is a discretion. Indeed, Clause 12(9) indicates that proceedings for an offence under this part in England and Wales may be instituted only by, or with the consent of, the Director of Public Prosecutions, and in Northern Ireland by or with the consent of the Director of Public Prosecutions for Northern Ireland.

Therefore, if a person was to find that they had been wrongly removed, if they wished to object, they could immediately advise the registrar that they were still living, or that they had not given up consultant lobbying, and accordingly the registrar could reregister that person without the need for an appeal and without any difficulty. If they remained dissatisfied in spite of the fact that they could prove that they were still living and consulting, it would be possible to judicially review a decision, although that is very unlikely given the much simpler course of reregistering.

The important point is that this is not intended as a sanction or a penalty, but rather one of administration where the company or the individual is no longer believed to be performing the role of consultant lobbyist. Therefore in those circumstances, if a person becomes aware of that and wishes to challenge it, the best and most simple thing to do is to ask to be reregistered rather than to go to some expense in seeking an appeal to a tribunal.

I hope that the noble and learned Lord is reassured by that explanation. This provision is not intended as a sanction and I invite him to withdraw his amendment.

[Lord Hardie]

I thank the noble and learned Lord for that explanation. I simply comment in passing that if it got the stage of having to have a judicial review, then that is a sledgehammer to crack a nut. But in all the circumstances I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Clause 9: Notice to supply information

Amendment 18

Moved by

[Lord Wallace of Tankerness]

18: Clause 9, page 5, line 24, leave out subsection (7) and insert—
“( ) Where an information notice has been served on a person, the Registrar may cancel it by serving written notice to that effect on the person.”

Amendment 18 agreed.

Clause 12: Offences

Amendment 19

Moved by

[Lord Wallace of Tankerness]

19: Clause 12, page 6, line 25, leave out paragraph (b) and insert—
“( ) any individual who, not being entered in the register, engages in lobbying in the course of that business.”

Amendment 19 agreed.

Clause 16: Imposition of penalty

Amendment 20

Moved by

[Lord Wallace of Tankerness]

20: Clause 16, page 8, line 37, leave out subsection (7) and insert—
“(7) Where a penalty notice has been served on a person, the Registrar may vary or cancel it by serving written notice to that effect on the person.”

Amendment 20 agreed.

Clause 20: Further provision about civil penalties

Amendment 21

Moved by

[Lord Wallace of Tankerness]

21: Clause 20, page 9, line 41, leave out “of notices under section 16(7)” and insert “under section 16(7) of penalty notices”

Amendment 21 agreed.

Clause 21: Guidance

Amendment 22

Moved by

[Lord Wallace of Tankerness]

22: Clause 21, page 10, line 21, leave out subsection (3) and insert—
“( ) The Registrar may publish—
(a) revisions to any guidance published under this section;(b) replacement guidance.”

Amendment 22 agreed.

Amendment 23 not moved.

Clause 22: Charges

Amendments 24 and 25

Moved by

[Lord Wallace of Tankerness]

24: Clause 22, page 10, line 34, at end insert “(whether or not those costs are directly connected with the keeping of the register)”

25: Clause 22, page 10, line 40, leave out subsection (6)

Amendments 24 and 25 agreed.

Amendment 26

Moved by

[Lord Norton of Louth]

26: After Clause 23, insert the following new Clause—
“Publication of communications
(1) A Minister of the Crown, at the time of making a statement relating to any of the matters referred to in section 2(3)(a) to (d), shall publish details of any oral or written communication received in respect of that matter by the Minister of the Crown, or civil servants within the Minister’s Department, or a special adviser.
(2) Communications are exempt from the provisions of subsection (1) if in the Minister’s judgment they contain material that is commercially sensitive or have the potential to affect adversely national security.”

[Lord Norton of Louth]

My Lords, my amendment gets, I think, to the heart of Part 1 of the Bill. The purported purpose of Part 1, as we have heard, is embodied in the first three words of the title “Transparency of Lobbying”. The problem, or rather problems, is that Part 1 does not deliver transparency—it adds little, if anything, to what is already known—and it is not concerned primarily with lobbying. It covers lobbyists rather than lobbying. It registers those who engage in the activity, or rather some of those who engage in the activity, but does not enlighten us as to the particular activity. We may know who some of the lobbyists are, but not necessarily what they are doing in respect of individual measures. As has been argued throughout the stages of this Bill it will not capture the totality of those who are professional lobbyists. Indeed, given the exemptions, it will catch very few. Precisely how many is a matter for conjecture as the Government admit they do not know. The Bill introduces a new bureaucracy for the purpose of registration but achieves nothing substantial in terms of enhancing the transparency of lobbying.

My amendment is designed to ensure that the Bill does what it says on the tin, or rather what it says in the title. It shifts the emphasis from those who lobby to those who are lobbied. It is also comprehensive. By requiring Ministers at the time they make a statement on policy or any of the matters listed in Clause 2 to publish details of those who lobbied them on the matter, one ensures public awareness of who has sought to influence the outcome. Any representation made to anyone in the department would be within the scope of the provision, thus ensuring that those lobbying are not able to avoid their activity being made public. It would capture lobbying, whether direct to the Minister or indirect through someone else in the department. It would not matter whether the lobbyist was a consultant lobbyist, an in-house lobbyist or a part-time lobbyist: all would be caught by the provisions of the clause.

The clause therefore delivers transparency of lobbying. The principal case for the amendment is compelling. What are the arguments against? In Committee, the Minister argued that the objection was essentially practical. I do not accept that; I do not think that it is impractical. Under my amendment, transparency would be achieved through developing existing practices. There is already the quarterly publication of details of ministerial meetings. Ensuring publication of details of those who have lobbied at the point of a policy statement is thus not a paradigmatic departure from what is done already. As my noble friend Lord Tyler explained in Committee, it is achievable. Much information is already published, but it is a case, as he said, of being hidden in plain sight. As he went on to say:

“Indeed, by the time that department does publish that information, the influence that has been exerted over important legislation might have come and gone, right through Parliament. There is simply no opportunity to see what has happened … a simple and searchable central database for all their meeting data would mean that we could take the sting out of the calls, here and elsewhere, for an enormous lobbying register. We would have immediate access”.—[Official Report, 5/11/13; col. 164.]

As he mentioned, his office managed to draw together material from different departments, so it would hardly be beyond the wit or the limited resources of government to achieve. Indeed, I think that the case for that has been made today by my noble and learned friend Lord Wallace of Tankerness in what he said about the further publication of details. We are already moving in that direction, so I believe that it is achievable. It is a step—it might be more than a small step, but it is none the less a step—from what my noble friend developed to what is encompassed in my amendment.

The problem, as I argued in Committee, is not one of resources but one of political will. The Government have produced a mechanistic and very limited provision in order to be seen to be doing something. They have sought to hide just how limited it is by the use of the term “Transparency of Lobbying”, when, as I have said, it does not deliver transparency and it is not about lobbying. If the Government are serious about delivering on what the Bill says in the title and ensuring that the public can see who has lobbied government on a particular policy, they have to change the emphasis from lobbyists to lobbying, from status to activity.

Accepting this amendment would ensure that we are making a great stride towards transparency. As the Bill stands, it is not so much a great step forward as a faltering tip-toe. If the Government are keen, and have the political will, to deliver transparency, they should embrace this amendment. I beg to move.

[Lord Aberdare]

My Lords, the amendment proposed by the noble Lord, Lord Norton, seems to me an elegant and efficient way of achieving the principal aims of this part of the Bill and enhancing the transparency of lobbying, which is what it claims to be all about. I see it as a much more effective and less bureaucratic approach than the very limited transparency offered by the Bill.

The noble and learned Lord, Lord Wallace of Tankerness, has argued on a number of occasions that when Ministers and Permanent Secretaries are lobbied by consultant lobbyists, it is sometimes not clear on whose behalf that lobbying is being done. I find it hard to imagine such circumstances but, in any event, it seems to me that the amendment proposed by the noble Lord, Lord Norton, would fully address them.

Meanwhile, the register proposed looks to me increasingly like a Potemkin village: elaborately constructed to persuade the public that an effective process of regulating lobbying is in place. I very much fear that the public, not to mention the media, will not be fooled and that this Bill may only increase their appetite for a proper, comprehensive system to be put in place, as already exists in other jurisdictions, designed not only to enhance the transparency of lobbying but also to assure and improve the standards of conduct of the lobbying industry.

18:14

[Lord Campbell-Savours]

My Lords, about five or six years ago, I sat on a pre-legislative scrutiny committee dealing with the bribery and corruption Bill. During consideration of the draft Bill, there was a realisation within the committee that the Government were going into the issue from completely the wrong position. That was the view right across the committee. I always remember the civil servants sitting at the back of the committee wriggling in their seats as they saw their case being destroyed along with all the work that they had done in the production of the Bill. I tell that story because I believe that that is precisely what would have happened here if this Bill had gone into pre-legislative scrutiny. If it had done so, a very different approach would have been taken and I think that there would have been agreement on the way forward across the House. We would not have been going down this particular route; we would have taken the route set out by the noble Lord, Lord Norton, in moving this amendment. His is the right approach. The approach that the Government are taking is the wrong approach. His solution is cheaper; it is more efficient; it provides for a greater level of transparency; and it is what the public have expected of Ministers in the introduction of legislation. In the end, we will probably end up where the noble Lord is starting when we find, particularly in the light of the previous amendment, that there are problems in the way in which the system is operating. I know at this late stage that we will not see a change in the minds of Ministers, but I am really sorry that they missed a cue given by the noble Lord, Lord Norton of Louth, when he moved his amendment in Committee and gave the Government the opportunity of at least changing their approach.

[Baroness Royall of Blaisdon]

My Lords, I have little to add. Like my noble friend, I deeply regret that this Bill was not subject to pre-legislative scrutiny. I still do not see the urgency for this Bill. It would have been better if pre-legislative scrutiny had been undertaken now and we could have adopted the Bill in the next Session. Notwithstanding that, I strongly support this amendment from the noble Lord, Lord Norton of Louth, which, as he said, would enhance transparency. The Government have moved today in terms of improving the reporting in ministerial diaries of when lobbying takes place, but that is still a very narrow measure. This amendment is so clever but so simple in that all it does is develop existing procedures. It is not about a new bureaucratic mechanism; it is a very simple means of moving forward. I hope that, even at this late stage, the Minister will consider either adopting this amendment or coming back at Third Reading with the Government’s own. That would not only hold the Government in good stead but improve the governance of our parliamentary system and of government.

[Lord Wallace of Tankerness]

My Lords, I thank my noble friend Lord Norton for moving his new clause, which would require the Government to publish alongside any statement on a matter of policy, legislation or a contract or grant records of any oral or written communication directed to a Minister, the Minister’s Parliamentary Private Secretary or special adviser, and any departmental civil servants concerned with that matter. This is an issue in which my noble friend has long taken an interest. His amendment would also provide exemptions from the requirement to publish for commercial or security-sensitive material.

I do not think that this is a simple proposition, although I certainly think it is an intriguing one. However, at a time when we seek to ensure more efficient and effective government, one should pause to reflect that a statutory requirement that every oral or written communication received by every civil servant, special adviser, Parliamentary Private Secretary or Minister be recorded, collated and published in parallel with any relevant statement is not as easy and simple as was perhaps suggested.

Not only would the system impose a considerable bureaucratic burden on the public sector but one would wish to consider whether it would lead in turn to an information overload. Publishing information in relation to a very small public policy statement may well have some merit, but the volume of information that the Government would be likely to be required to publish in relation to, let us say, the Budget, the Autumn Statement or the Queen’s Speech could be so overwhelming that any transparency value would be undermined by the inaccessibility and quantity of the information.

The Government’s objective is to provide the public with valuable information which they can utilise to scrutinise our actions and hold us to account. The focus should be on the value of information and the insight it can provide, not on the volume. As I have already indicated, this Government have taken exceptional steps to publicise information about decision-making, and the register is intended to extend that transparency to those who seek to influence decision-makers. It is already standard practice that responses to government consultations are published in full or in summary, and if the public require further information about certain policies or decisions, then they have the right to request that information under the Freedom of Information Act.

I recognise that my noble friend is urging the Government to extend or improve their information publication regime, and I know that this view is shared. However, I hope that the commitments to the improvement of transparency that I made on behalf of the Government during the debate on the first group of amendments will show that not only have we already taken unprecedented steps, but we are furthering them. I recognise and acknowledge that they fall short of what my noble friend is seeking, but I hope he will reflect that to publish the volume which he is suggesting—particularly in circumstances such as the Budget—might not enhance transparency, but could lead to an overload that might not assist those he seeks to help with his amendment. I hope that it will be acknowledged that the Government have already taken steps and are committed to more steps; and that what we are doing will increase the level of transparency more than any previous Administration have done. In these circumstances, I urge my noble friend to withdraw his amendment.

[Lord Hardie]

My Lords, I seek a point of clarification. In light of the decision of the House to accept the amendment of the noble Lord, Lord Tyler, on special advisers, will the Minister tell the House whether it is the Government’s position that, notwithstanding that decision, the Government have no intention of adding information relative to special advisers’ meetings with lobbyists when the Minister makes his or her return?

[Lord Wallace of Tankerness]

My Lords, I stand by what I said when I replied to the question asked by my noble friend Lord Tyler in the first group of amendments. Obviously, the Government have not had an opportunity to discuss the matter, as I have been here since my noble friend’s amendment was passed. I have had no opportunity to discuss with ministerial colleagues and others how we will respond.

[Lord Norton of Louth]

My Lords, I agree with my noble and learned friend in that I certainly welcome what he announced earlier about the Government moving towards greater provision of information. However, I disagree with him on all the other points. I am inclined to ask, “What price transparency?”. I am not persuaded by the argument that, “Oh dear, this is all too much trouble”. The body of policymakers is a relatively small number of people who would actually be affected. The Minister seems to envisage some great body of civil servants that would be brought within this provision—they would not. It is doable and it is a fundamental point of principle. We have to go down that route. Either we are going to have transparency or we are not really going to do very much at all as far as this Bill is concerned. This is absolutely fundamental to Part 1 and this is the last chance we have to get it in order. Given the support that has been expressed for the amendment, I would like to test the opinion of the House.

18:23

Division 4

Ayes: 175

---

Labour: 136
Crossbench: 27
Independent: 3
Democratic Unionist Party: 1
Green Party: 1
Bishops: 1
Conservative: 1
Plaid Cymru: 1

Noes: 226

---

Conservative: 145
Liberal Democrat: 68
Crossbench: 7
Independent: 2
Ulster Unionist Party: 1

18:36

Clause 24: Regulations

Amendment 27

Moved by

[Lord Wallace of Tankerness]

27: Clause 24, page 11, line 27, leave out subsection (5) and insert—
“( ) A statutory instrument containing any of the following regulations may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament—
(a) regulations under section 4(5)(a) or 5(4);(b) the first regulations to be made under each of sections 11(3) and 17(3);(c) regulations under this Part which amend or modify the provisions of this Part.”

Amendment 27 agreed.

Amendment 28 had been withdrawn from the Marshalled List.

Clause 37: Duty to appoint an assurer etc

Amendment 28A

Moved by

[Lord Monks]

28A: Clause 37, page 40, line 9, at end insert—
“(c) to have a duty of confidentiality to the trade union and its members, and(d) to abide at all times by the trade union’s obligations under the Data Protection Act 1998 to protect the information of members.”

[Lord Monks (Lab)]

My Lords, I shall speak also to Amendments 28B, 28C, 28D and 31A, standing in my name and that of my noble friend Lord Stevenson.

To give some brief context to those who are new to this subject, we have moved from Part 1 of the Bill to Part 3, which is concerned with trade union administration. It seeks to strengthen the public supervision of union membership records, with a duty on unions to produce a membership audit certificate annually. Unions with more than 10,000 members would have additionally to appoint an assurer—a new term to me in public life—whose job would be to check the veracity of union records. Perhaps this is a precedent, and perhaps we could do with assurers to be appointed to check some companies’ tax affairs from time to time.

Why is union membership being singled out? Are there are a lot of complaints? Is there widespread public concern? Is there a lobby around to say that there are some scandals in this area? Let us have a look at the facts: between 2000 and 2004, the last time that any records were taken, six complaints had been received by the certification officer, and there has been only one since, which is current. Is there public pressure for this intrusion into internal union affairs? No one knows who has been asking for it because the Government have never been able to provide any information about that.

This provision seems to be the product of a fevered imagination, convinced that it is quite legitimate to pile a load of red tape on to unions when generally the policy is against red tape and overregulation. In today’s Conservative Party it does not actually seem necessary to have a reason to make union lives more expensive and complex; it is almost a reflex action that they wish to perform from time to time.

It is not just about the expense and trouble that this part of the Bill is likely to cause. The measures have only one parallel in the EU: in Malta, in connection with a specific circumstance of rivalry between unions, a public official got involved in checking membership records. Every other country keeps the state and employers out of union membership records.

This is not a theoretical discussion about what might happen. There are 2,000 cases currently in procedure over allegations of blacklisting, and the people being accused—some of them have admitted it—are eight of the major blue-chip construction companies in this country. This involves sites as huge as the Olympic site, which of course is being regenerated for other purposes, and the Crossrail site, which we are all aware of if we travel around central London. There is a risk of information falling into the wrong hands and becoming available to people who should not see it. We know that the more people get hold of records and information of this kind, the more likely it is to fall into the wrong hands and be used to people’s detriment.

That is what this series of amendments is about. They would strengthen protection for the individuals. The Data Protection Act 1998 classed trade union membership as “sensitive personal data”, and was quite correct to do so. A specifically protected category under the EU data directive is a derogation for unions. Unions should be affected only where there is a substantial public interest. Where is the substantial public interest in this measure? There have been hardly any complaints, and very few people have spoken on this subject.

Amendment 28A would make clear that the assurer, this new creature, would have a duty of confidentiality to the union and its members, and a duty at all times to abide by the trade union’s own obligations under the Data Protection Act to protect the personal information and data of members. It is important that we recognise that this information is very sensitive and the assurer should have a duty of care and proper responsibility. I hope that the Minister will be able to accept these rather simple points. After all, if you reverse the situation, will he be saying that there is no duty of confidentiality to the union and its members and no duty to help a union maintain its obligations under the Data Protection Act?

Amendment 28B would strengthen the hand of the union to get rid of an assurer who breaches confidentiality or some other statutory duty, or for some other justifiable reason. In the Bill, the only way in which an assurer can be sacked is by a resolution at a general meeting of members or delegates—an annual conference, if you like. That is limited scope indeed for termination of this position. Surely, a union, which will be paying the assurer, should be able to discharge a person who is unsuitable, just as it can an accountant, an auditor or its solicitor. The Bill’s assumption here is somehow that the assurer will be in conflict—an investigating officer looking into the affairs of a miscreant union and an adversary who must be protected. The Bill gives the game away on the Government’s rather hostile approach to what unions are doing and how they are administering their affairs.

Amendment 28C reinforces the point about the assurer complying with the Data Protection Act, and reminds us that information can easily be obtained nowadays by people who should not have it, particularly if it becomes too widely available.

Amendment 28D would narrow the circumstances under which the names and addresses of members can be disclosed. It would specifically remove requests from the certification officer, the government registrar, who already has significant powers over trade unions in this area but not normally to get personal data. We are trying to stop him from being able to ask for personal, individual data. There is an inspector in addition to the assurer in this cast list of new people who will be rolling around union administration. We also want to stop an inspector, appointed by the certification officer, getting this individual, personal information. In effect, we are seeking to establish the principle that the disclosure of an individual’s name and address is done only with the individual’s consent, and not with some blanket power given to the assurer, the assurer’s officials and the certification officer. In this way, we are trying to help to protect against breaches of the Data Protection Act.

18:45

Amendment 31A would impose a penalty on an assurer who has breached the confidentiality obligations. There can be serious implications for the individuals whose information is misused; I mentioned the 2,000 blacklisting cases, and others are being investigated by the Scottish Affairs Committee. Individuals can be out of work for years if they find themselves on one of these lists. For an assurer who is inefficient or incontinent with the trust that has been given, it seems only right that they should feel that they too could be at risk if they get this area wrong. I beg to move.

[Lord Morris of Handsworth (Lab)]

My Lords, I support this group of amendments in the name of my noble friend Lord Monks. My reason for doing so is the hope that, in his response, the Minister will spell out clearly the duties of the trade union assurer, particularly—a point made by my noble friend Lord Monks—the duties of confidentiality.

Confidentiality is of the utmost importance. We have all read about the blacklist constructed by the consulting association. It is a subversive list which can damage the individual both financially and in terms of their reputation. I have read nothing in the Bill, and have heard nothing at Second Reading or anywhere else, which gives any protection at all to the possible victims of this new office of assurer. I ask myself why the trade union is a target, because it has much less information than, say, the CBI, the IoD or the Federation of Small Businesses. Those organisations have information which is relevant to the whole notion of behaviour within the context of the workplace. Now, however, the trade unions are at the sharp end.

I will not rehearse here the names of the consulting association; I do not want to pollute the debate. If the organisations involved were not in the category of trade unions or any other membership association, I suspect that the consulting association’s behaviour would be the subject of criminal investigation. However, that is not a matter which we decide here. What we decide here is how to ensure that the new office carries with it the responsibility and obligation which it owes to the people who can be impacted by its decisions. The assurer’s task will be an onerous one, in so far as it relies on the co-operation not just of individual trade unions but of employers. I therefore hope that when the Minister replies he will make absolutely clear that this particular office carries with it the highest notion of responsibility because it has the propensity to ruin so many lives and so many reputations. For those reasons I support the amendments tabled by the noble Lord, Lord Monks, and look forward to hearing the Minister’s reply.

[Lord Lea of Crondall (Lab)]

The whole philosophy of Part 3 seems quite astonishingly inequitable between what you might call the TUC family on one side of industry and the CBI or the employers’ associations on the other. Now, the counterpart to a trade union—as set down by the famous Donovan royal commission in 1965-68—is an employers’ association, but it has no responsibilities, no obligations of transparency or membership finances or anything else. So this is a purely political measure. It was no doubt agreed by the quad over the heads of people in the department of business, but we are never going to be told that. This is going to be another trophy on the mantelpiece of the Conservative Party and other people will have their attention drawn to this trophy on that mantelpiece in due course.

[Lord Cormack (Con)]

I had not intended to say anything but I have listened with care and sympathy to what has been said. I hope that when my noble friend comes to reply he will be able to give at least some of the assurances which have been sought by the noble Lords, Lord Morris, Lord Monks and Lord Lea of Crondall. Every man or woman is entitled to privacy. It is more and more difficult in this modern age for them to have it but it is something we all cherish and prize. No one should be put into a position where it is in jeopardy. What has been said by the noble Lords on the other side during this very brief debate has convinced me that there is at least a case to answer and I very much hope that my noble friend, for whom I have very real regard, will be able to give at least some of the assurances that have been sought when he replies to this debate.

[Lord Martin of Springburn (CB)]

I support the noble Lord, Lord Monks, and others who have spoken regarding these amendments. At one time it went without saying that anyone who had private information or was privy to it would not divulge that information except when obliged to do so in legal circumstances. Recent matters have come up in the media—I will not stray into the sub judice area—exposing people who have been involved and pleaded guilty to misconduct in public office where they have handed over private and confidential information to those who are not entitled to that information and received payment for it. We need assurances from the noble Lord the Minister that things are going to be kept very tight indeed.

I notice in the Bill that the removal of the officer concerned has to be carried out either by a meeting of the whole membership or of the delegates. That can be a very cumbersome area. If the executive of a trade union found that such an officer was wanting in his or her behaviour, it would take a long time to get all the delegates together, find a venue for them and check their credentials before they met. If it was going to be the membership, bear this in mind: it used to be the cry of the employers and the Conservative Party—a cry they were entitled to make—that there were too many small unions. I belonged to a small union, the metalworkers’ union, which was only a few thousand members and everyone said, no, we should have larger trade unions. As a result, my own circumstances changed and I now belong to the union called Unite, which is an amalgamation of many other unions. I have got to be careful because perhaps next week the name might change—I have to keep track of the name of the union to which I belong. The downside of all those amalgamations means larger membership and if we carried out the legislation to the letter by saying we should have an aggregate membership meeting, it would be some venue that we would have to create.

The important thing is that sadly we have people in confidential situations who have divulged information, and some sides have done it in what we in Scotland call a very sleekit way because they put out information by e-mail. If an e-mail goes out in a certain way, you have a trail of other e-mails which divulges a great deal of information. This matter has got to be looked at.

[Baroness Williams of Crosby]

I very strongly support the amendments tabled by the noble Lords, Lord Monks and Lord Stevenson of Balmacara. Since we have seen some of the troubling issues—for example, the keeping of a blacklist in the construction industry—it is clear that somebody whose personal details have been revealed can be at risk in a way that should not be acceptable. It is very sound and sensible to propose that there should be very stringent sanctions against any inspector who fails to recognise that confidentiality of individuals. It is accepted in this country that very strong and good relations should exist between responsible employers and responsible trade unionists. An amendment like this should be supported by the House.

[Lord Stevenson of Balmacara (Lab)]

I declare an interest as a retired member of a large union. As the noble Baroness has just said, it is common ground that the unions in Britain play a significant part in the modern economy. They should be cherished, not castigated. As has been mentioned, if the Government had brought forward such a burdensome set of duties on any other section of civil society, there would have been an outcry. Well, there is an outcry and the Government should listen.

For many employees, their membership or lack of membership of a trade union is a private choice, and one which they desire to keep confidential for what may be very legitimate reasons. The knowledge that under these new powers, trade unions could be required to provide their membership register to a government-approved official for “good reason” may act as a disincentive for workers to join unions, particularly in light of the current concern over union blacklisting. As my noble friend Lord Monks said, the Government are introducing this series of measures at the same time as the full extent of the scandal of blacklisting in the construction industry is gradually coming to light. This is by no means the only industry in which members of a union may wish to keep their membership confidential for fear of being subject to discrimination.

These measures clearly go beyond what is necessary and they are certainly not proportionate if they are to achieve any legitimate aim behind the proposals, if indeed there is one.

[Viscount Younger of Leckie (Con)]

Before I address the amendments I would like to say a few words about blacklisting, which was raised by the noble Lords, Lord Monks and Lord Morris, and my noble friend Lady Williams, because at each stage of this Bill we have sought to emphasise how seriously this Government take any allegations of blacklisting. The Trade Union and Labour Relations (Consolidation) Act 1992 makes it unlawful to refuse to employ a person because they are a member or not a member of a trade union or because they refuse to join or leave a trade union. This position was strengthened in 2010, when in response to the Consulting Association blacklist uncovered in 2009, the Government introduced anti-blacklisting regulations and increased the penalties for unlawful processing of data. Data controllers can now be fined up to £500,000 for serious offences. There have been several allegations of new evidence of blacklisting to date, but no evidence of this practice recurring. The Scottish Affairs Select Committee and Information Commissioner are both currently investigating the potential for ongoing offences, and the Government continue to take a close interest in this issue. Therefore, the provisions that we are considering today do not increase the risk of blacklisting, because of the protections in place around the treatment of membership data.

19:00

Noble Lords have tabled a number of amendments, which I understand seek greater assurance that the confidentiality of union membership data will be protected. That is entirely understandable. Information about who is a union member is sensitive, as the noble Lords, Lord Monks and Lord Morris, have already eloquently pointed out, and it is right that it should be protected. However, existing data protection rules are sufficient for those purposes. I hope to be able to explain how the data will be protected and to reassure noble Lords that their concerns are unfounded.

I will begin by speaking to Amendments 28A, 28B and 28C, which are all concerned with the protections around the way the assurer handles membership data. Amendment 28A would place on the assurer a duty of confidentiality to the union and its members, and would require the assurer to comply with the union’s obligations in the Data Protection Act. Amendment 28B would prevent the appointment or reappointment of an assurer in the case of a breach of the union’s confidentiality, of its statutory duties or of its terms of appointment, or where there are reasonable circumstances not to appoint. Amendment 28C states that the assurer must comply with the Data Protection Act. Amendment 28D seeks to prevent the disclosure of member data in any circumstances, except with their consent or where required as part of criminal proceedings.

The intention behind all those amendments is already achieved by the Bill and the application of the Data Protection Act. I will explain that. The Bill explicitly states that the assurer will owe a duty of confidentiality to the union, which will be incorporated into the assurer’s appointment. Breach of that duty would mean that the union would have a remedy for breach of contract. The union may also choose, if it wishes, to include additional protections as part of its contract with the assurer. In addition, the assurer must comply with the Data Protection Act, because in performing their statutory functions they will be a data controller. Should the assurer breach data protection rules, the union may engage the Information Commissioner, who enforces the Data Protection Act. The Information Commissioner has a range of powers at his disposal, including imposing a fine of up to £500,000. Finally, the assurer is prohibited in the Bill from disclosing member data unless in specific permitted circumstances. Noble Lords also raised the issue of whether an assurer who breaches their obligations should be prevented from reappointment. I am happy to confirm that that is entirely within the control of the union. The Secretary of State will set out in an order who is qualified to be an assurer, but who the union chooses from that list is entirely at its discretion. If, for any reason, the union has doubts about the assurer’s suitability, including their handling of sensitive member data, it can pass a resolution to remove the assurer on agreement of the members.

On Amendment 28D, the intention seems to be to prevent the disclosure of member data in any circumstances except with member consent or where required as part of criminal proceedings. That would in practice prohibit a certification officer, inspector or assurer having the necessary access to the register, as they would be unable to identify the member in order to seek their consent. It would defeat the Government’s policy intention of giving assurance of union compliance with the duties to maintain a membership register. We believe that this amendment is unnecessary. The existing contractual and statutory arrangements surrounding use of membership data will be sufficient to ensure that membership data are protected.

I have already explained the protections with regard to the assurer and will now say something about the protections with regard to the treatment of membership data by the certification officer and the inspector. As part of that I will therefore deal with Amendments 31, 31A and 32. Amendment 31 would remove the explicit statement that the certification officer may require an explanation of documents from the assurer. In practice, that may interfere with the effective application of the new enforcement regime. It may be important for the certification officer to engage with the assurer in a particular case in order to make an informed assessment of a union’s compliance with Section 24 of TULRCA. Amendment 31A deals with the appointed inspector and seems intended to ensure that there are appropriate protections to ensure that they handle sensitive membership data properly. I reassure noble Lords that a range of safeguards are already in place to achieve that. That includes, for example, that first of all, the certification officer will have discretion to appoint an inspector as he does currently for inspectors of a union’s financial affairs. It will be for the certification officer to ensure that he appoints someone capable of fulfilling their responsibilities. Secondly, the inspector will owe a duty of confidentiality to the certification officer. Should the inspector breach that duty, it will be for the certification officer to decide the appropriate remedy, considering the circumstances and severity of the breach. A third party appointed as an inspector is likely to be someone in a professional firm. It would seem unnecessarily restrictive to require that the certification officer could never appoint that firm again, no matter what had happened to the individual concerned. A further example is that if the appointed inspector—or any other individual, for that matter—has breached data protection rules, they will be liable to the Information Commissioner taking action, including imposing a fine of up to £500,000.

I infer that the intention of Amendment 32 is to obtain explicit, cast-iron assurance that sensitive union member data will be adequately protected under the new investigatory powers introduced by the Bill. The amendment intends to prohibit the disclosure of data to third parties, but there is already provision in law to prevent the disclosure of documents to third parties, except as necessary for the performance of functions set out in the Bill, where the member consents or, of course, for criminal proceedings. In any event, as I have already explained, member data will be well protected by both existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union, as stipulated in the Bill. The Data Protection Act will also continue to apply whenever the assurer, certification officer or inspector handle union membership data, because in doing so they will be data controllers. Furthermore, the certification officer is obliged to act in concordance with the European Convention on Human Rights, which includes the individual’s right to privacy. We are confident that the certification officer is well placed to deal with sensitive data, and I can reassure noble Lords that the Government will not have access to member data through those provisions.

Finally, Amendment 33 changes the heading to new Section 24B. We do not think that that would have a substantive effect, but have assumed that the intention is that provisions relating to the appointment of the assurer would not be enforceable. We will come to the role of the assurer in the next group of amendments, but it is key to the achievement of the Government’s policy objective. I understand the desire to ensure that the Bill poses no risk to the confidentiality of union membership, and I have been listening this afternoon. I am sure that there are adequate safeguards in current data protection legislation and introduced by the Bill, to ensure that not only the assurer but also the certification officer and the certification officer’s inspector properly protect the confidentiality of union member data.

The noble Lord, Lord Monks, questioned why the legislation is needed, because the certification officer has had only a limited number of complaints. However, the current statute does not automatically provide assurance that the register is up to date for all members. The certification officer can investigate only in response to a complaint, and then only, as I mentioned in Committee, in response to a complaint from a union member. Not all members will be proactive about checking the register. A member who checks it may not see the register in its entirety. In any case, they cannot know whether the names and addresses of other members are accurate. Members cannot tell whether the register is accurate in recording all new joiners and leavers. We believe that those measures are an appropriate way to give greater confidence to union members and, importantly, to the public, so that unions know who their members are and can contact them.

The noble Lord, Lord Martin of Springburn, raised concerns because there has been some misuse of sensitive data by some public authorities. I assure him that the certification officer is subject to duties under the Human Rights Act 1998 to comply with the European Convention on Human Rights, including a person’s right to his private and family life and his correspondence. We are confident that the certification officer is well placed to deal with sensitive data. One respondent to the consultation conceded that, although they thought this was a risk, they had,

“no reason to believe the CO’s office has poor systems”.

The noble Lord, Lord Morris of Handsworth, stated that unions were more harshly regulated than other organisations. Noble Lords are sometimes fond of drawing analogies between trade unions and other membership organisations, but trade unions are unique in both purpose and design. They are explicitly defined by legislation, and in practice regulation is tailored to each type of organisation, to fit its role and function. Again, we believe that these measures are appropriate to the function of trade unions. I therefore ask noble Lords not to press their amendments.

[Lord Monks]

My Lords, I thank the Minister for that reply. I admired his straight bat, which could have been used down under, against the Australians, in the last few weeks.

I hope that noble Lords have noticed the complex web of officials who are going to be busying themselves around the union world. There is quite a cast list of people for unions to deal with. First there is the certification officer, whom they are used to dealing with, but now he has extra powers. Then there is the new assurer, who is unique in British public life. Nobody else has an assurer. No political party has an assurer. Do we have assurers to check the electoral roles in some inner city areas? Of course we do not. People do their best, and we get 80% accuracy, on average, in this area.

Why are we appointing this network of officials, who will no doubt be passing the buck if problems really do arise? I know that at the end of the day it will be the trade union that ends up in breach of the data protection legislation in the event of any complaints, despite the fact that it will all have passed through the hands of the certification officer, the assurer and an inspector. And of course, there have been no complaints—I remind people of that.

One of the problems with this debate is that the Committee stage was truncated. These measures were brought forward quickly. Because Part 2 of the Bill was paused, Part 3 was rushed forward to fill the timetable gap. So we have not had a chance to get many people interested in this particular issue. This is perhaps the best attended debate that we have had. I hope that people who are listening with an open mind—I know that that is the position of many in this House—will reflect on this complex, bureaucratic, red-tape way of spinning some kind of web around unions, causing expense, difficulty and possible problems where no problems exist.

Union members want to be confident that their information is not misused. Contrary to what the Minister said about confidence, they will be less confident with this measure than they would be on the ground that the union accountants are doing their job properly. They are reasonably confident about that now—as confident as they can be. I am not saying that union membership administration is perfect; of course it is not. But it is in the unions’ interest to make it perfect, and the certification officer keeps an eye on what is going on.

I appreciate the Minister’s straight bat, but I would like to test the opinion of the House.

19:13

Division 5

Ayes: 157

---

Labour: 133
Crossbench: 15
Independent: 2
Democratic Unionist Party: 1
Green Party: 1
Bishops: 1
Plaid Cymru: 1

Noes: 216

---

Conservative: 140
Liberal Democrat: 62
Crossbench: 9
Independent: 2
Ulster Unionist Party: 1

19:19

Amendments 28B to 28D not moved.

Amendment 29

Moved by

[Lord Whitty]

29: Clause 37, leave out Clause 37

[Lord Whitty (Lab)]

My Lords, Amendment 29 would deal with the problem that was alluded to in the previous debate. A number of my noble friends referred to the new office of assurer and queried why we needed it, what exactly the role of the officeholder would be and suggested that it was an additional level of red tape and bureaucracy for trade union administration. In replying to the previous debate, the Minister did not address this point but rather sought to reassure the House in relation to confidentiality. However, in seeking to leave out Clause 37, my amendment suggests that there is no point whatever in inventing this new role. The oversight of trade union administration is clearly in the hands of the certification officer, and has been so for many years.

The Government may feel that the certification officer needs new powers—they are contained in the Bill to a limited extent—or that he needs new resources to carry out his job, but the relevant apparatus for doing that is already in place. They have invented a new officer without defining that officer’s qualifications, which will be defined in technical regulations at a later stage. The Minister referred to a list from which trade unions could choose but, presumably, the list is drawn up by the Government. The House does not have before it the qualifications that are required for someone to be on the list, the details of how you get on to it or what professional standards the assurer should meet.

As my noble friend Lord Lea asked, why is no other body in society having an assurer imposed upon it? No reason has been given for that by the Minister so far; perhaps he will do so when he replies to this debate. The only reason given in the impact assessment for not moving entirely down this road is because, as he says, assurers are an important part of society and the public and union members need to be assured that their membership records are in order. As far as the rest of society is concerned—I include in that employers and the Government—clearly the membership records of a union are most important at times of possible industrial strife. The list of members taking part in a ballot on a potential industrial dispute must accord with the union membership covered by the issue under dispute. There are reams of case law in that area, so the assurer has not been invented in order to monitor strike ballots more rigorously as that issue is already covered.

The full union membership list, excluding members’ personal details, is an important document when union elections are held. We need to ensure that internal elections are proper and fair, that members who are given a vote in those elections have the right to vote in them and that everybody who falls into that category has a vote. However, that issue is also covered in existing legislation and there are already complaint mechanisms and potentially draconian sanctions for a union which breaches those rules. Therefore, I see no reason to invent another officer.

Unions, through their own rules and through legislation more generally, are already required to audit their financial records. A significant part of those financial records comprises the receipt of membership dues and the recording of those receipts. The auditor of a trade union already has to do that. The oversight of that process is already there with the certification officer, who has substantial powers to intervene. Where in this does the assurer rest? He is not an auditor, a lawyer or an officer of the certification office. No standards of professional attainment exist for such a creature. In the previous debate, the Minister failed to reply to my noble friends Lord Lea and Lord Morris of Handsworth as to why such a person was necessary.

19:30

Amendment 29 deletes the whole reference to the assurer. There would have to be other consequential amendments but the simplest and cleanest way to deal with it is to delete the whole of Clause 37. The other toughening up of the requirements on unions to keep a membership list is there, and the powers of the certification officer would remain. However, the role of this specious, unnecessary and, to use a House of Lords’ term, otiose officer is not spelt out in anything that the Minister has yet said or in any of the documentation that we have received. I therefore think that it would be more sensible for the Government, instead of engaging in the creation of more layers of red tape in this area, just to drop the idea of this new level of bureaucracy and to let the existing requirements and the existing regulator perform their jobs—if necessary, to tighter standards than they previously consider that they have done. To do so probably would require the certification officer to have more resources, which I am sure the Government have in mind, but it would be cheaper to give those resources to the certification officer than to invent a whole new and unnecessary profession. I therefore hope that the Government could either give us more cogent reasons than they have so far given as to why the assurer has been invented or that they will take the issue away and look at it again.

My other amendment in this group basically deals with the powers of the certification officer and when they require documentation from the union over and above that which is supplied to the certification officer in the normal course of events. My amendment refers to “if” the certification officer considers it necessary after receipt of a complaint. Otherwise, it is a very open-ended power to require a lot of very delicate documentation. The trigger for requiring that additional documentation needs to be the receipt of a valid complaint. That would amend the following clause accordingly.

My main point in these amendments is: why on earth do we need this new officer, if officer is the word, this new profession, if profession is the word, this new bureaucratic measure—I was trying to think of another word—to be imposed within the trade union structure but not in any other part of civic or economic society? I beg to move.

[Lord Lea of Crondall]

My Lords, I think the word that my noble friend Lord Whitty could not quite conjure up, because it is not often used in this House, is hypocrisy, and it has to do with red tape. My noble friend Lord Monks reminded us that, not only because of Christmas and the new year but also because of the pause, we are between Parts 1 and 2 of the Bill, and now are dealing with Part 3. It is all rather confusing. There is overkill of all these lists of people who have some sort of role. We mentioned the electoral roll and how 80% might be up to date. I think that 50% would be a very good score for a candidate examined on this set-up even when it has been a year in use. It is quite remarkable. I will not go through the whole list.

It reminds us of the point made by a number of colleagues at Second Reading to do with the famous impact assessment and the enormous costs falling on the trade unions and many other people as well, which requires some justification. In particular, some justification is required of a Government whose raison d’être seems at some times to be to cut out red tape. If this is not red tape, what is it? The Government are clearly are going to be obstinate and will stick to their guns, whether the bowling is fast bowling, a googly or whatever else. We know that they have been taken over by dogma on everything to do with industrial relations.

Finally, I have here the report about which my noble friend Lord Monks and I have had a conversation. We asked people in the international departments of European countries to tell us, in answer to a questionnaire, what goes on in these successful democratic countries on these sorts of questions. No one remotely has a top-heavy superstructure such as this. I have little doubt that the only reason why a Labour Government might not repeal this on day one is that they would have very much bigger fish to fry, no doubt, in some respects.

I have little doubt that the life of this legislation will be very short, which is the only saving grace I can think of to mention in support of my noble friend Lord Whitty on this amendment.

[Lord Stevenson of Balmacara]

My Lords, it is interesting that the questions we are left with keep coming back and keep being unanswered. What is the serious public policy issue behind this proposal? What exactly is the problem? What will this Bill achieve that current legislation does not achieve? Will the measures being proposed do more than simply increase the regulatory burdens on trade unions? We have all those questions and very few answers.

We know that union membership is already regulated by the Trade Union and Labour Relations (Consolidation) Act. Section 24(1) puts a duty on unions to maintain an up-to-date register of members’ names and addresses so far as reasonably practicable. This legislation has stood the test of time since the days of Mrs Thatcher. As has been said already, we are not aware of any calls having been made to the Government to extend this provision. BIS, the certification officer and ACAS have confirmed under freedom of information requests that they have received no representations for such a measure.

As my noble friend Lord Whitty said, it may be that a better self-certification system could be an advantage. I say “it may be” because we do not know what the problem is but cloaking the issue in some spurious idea that there is some public concern out there that would be remedied by having an additional checking arrangement is simply not sufficient.

[Viscount Younger of Leckie]

My Lords, I turn to two amendments which seek to drastically reduce the effect and extent of the provisions as drafted. This would in practice undermine the Government’s key policy objective, which is to introduce a proportionate and effective reporting and enforcement mechanism alongside the existing duty of unions to maintain an up-to-date membership register so far as is reasonably practicable.

Amendment 29 would remove Clause 37 and the role of the independent assurer from the Bill altogether. Clause 37 gives credibility to the assurance process by requiring independent scrutiny, which is in line with the Government’s overarching aim to provide greater assurance of the maintenance of trade union membership registers for the benefit of members, employers and, importantly, the wider public. As some unions become large organisations representing members across a variety of employers and workplaces, their administrative requirements become more complex. As a consequence of the prevalence of very large unions in recent years, there is also now an increased public perception of a union’s scope of influence.

This may be an appropriate moment for me to restate what I said in Committee: I am not minded to comment on the media coverage of particular industrial disputes, such as the Grangemouth refinery or, more recently, the issue affecting Howdens. Instead, as I should, I will focus on the separate issue at hand relating to the obligation of unions to maintain up-to-date membership registers. Perhaps this can also be described as playing a straight bat. I hope so.

The nature of union membership data means that they decay easily—for example, addresses can quickly become out of date. About 2 million people move in and out of union membership every year, which equates to around one in four union members. The register for a union which has a 25% turnover in membership could theoretically be entirely out of date in four years. Unions are already required by statute to maintain a register of the names and addresses of their members. What we are introducing is annual reporting on the compliance of unions with this duty where currently there is none. I believe—

[Lord Lea of Crondall]

I am most grateful to the Minister for giving way. This must be about the fourth time that he has said that, on the one hand, of course there is “churn”, as the word is now fashionably used, in trade union membership—20% or something like that. That is where I suggest the figure of 80% comes from; there is always churn going on. There is then a huge leap of logic, and the word “proportionate” in this context strikes me as astonishing. It is straight out of Alice in Wonderland—words mean what I say they mean, no more and no less. It cannot be proportionate to say that, because of churn, there is only 80% accuracy at any moment in time, therefore we will make it accurate by saying we will make it more accurate because we will have inspectors running around the country making it accurate. They will not make it accurate. In terms of what we have described as the problem with churn, how can they make it accurate? So the punishment will not fit the crime, even if there were a crime in the first place. Can the Minister give a more reasonable justification for an extraordinary lack of logic in his pronouncements?

[Viscount Younger of Leckie]

My Lords, the reasoning behind this is simply to look at the bigger picture in relation to unions. The noble Lord, Lord Lea, needs to be reminded that unions with 10,000 members or fewer will be self-certificating. We are looking at those unions which have large membership lists. Many colleagues of the noble Lord—certainly in Committee—acknowledged that it is a challenge to keep membership lists up to date. This is why—in a very light-touch way—we are bringing in an assurer so that we can be sure that the lists are up to date, so far as is reasonably practicable.

I believe that the membership audit certificate will be credible for larger unions only if it is independent, and this is because larger unions often represent workers across a range of different job types and employers. They have complicated branch structures—I am sure that the noble Lord, Lord Lea, would agree with that. They often have different IT systems and there may be greater time delays for updating information. A union official or rep would not, therefore, have the same credibility as an independent expert in ensuring that the systems used across the entire union are fit for purpose. This is the essence of what we are aiming to do. That may also be helpful in response to the comments made by the noble Lord, Lord Whitty.

Clause 37 requires trade unions with more than 10,000 members to appoint a qualified, independent person, called an assurer, who has a duty to provide an annual membership audit certificate to the union. The membership audit certificate must state whether, in the opinion of the assurer, the union’s system—and please note this word “system”—for compiling and maintaining the register is satisfactory to comply with the duties in Section 24. This is analogous with the regime in place for financial reporting, where all unions are required to appoint an independent auditor to approve their accounts. An assurer has the right to access the membership register and other relevant documents at all reasonable times, and to require information and explanations from the union. This is necessary for the assurers to be able to meet their duties and carry out their functions. However, as I mentioned in a previous debate, they will be subject to the obligations of the Data Protection Act when handling union membership data.

The assurer may request access only to documents which may be relevant to the union’s duties in Section 24. At the outset, when the assurer is appointed, the union and the assurer could agree terms as to the relevant documents to which the assurer should have access. If, after making inquiries, the assurer’s opinion is that the union’s system for maintaining the register is not satisfactory, or the assurer is unable to obtain the information necessary to provide the certificate, they must state this on the certificate and give reasons for doing so. If the certificate is not satisfactory, the assurer is required to send it to the certification officer as soon as is reasonably practicable but after submitting it to the union. Again, as part of the contractual arrangements, it would be possible for the union and the assurer to agree that the assurer must alert the union of any possible issues before the certificate is finalised.

19:45

Clause 37 also provides an order-making power for the Secretary of State to set out who is qualified to be an assurer. A person is not qualified if their independence is questionable, or if the union believes that they would not carry out their duties competently. An officer or employee of a union, or their partners or employers, may not perform the role of assurer for that union. In order to carry out their duties, the assurer is likely to want to understand how records are compiled and maintained. This could include looking at whether the union has mechanisms in place to ensure that it collects and records data accurately from new members, reminds members to keep their addresses up to date, and updates the register promptly once changes are notified. Unions will set out in their individual rules the provisions for appointing and removing an assurer, although certain provisions will have effect, notwithstanding this flexibility. The union retains ultimate control, however, because it can always remove an assurer from office by passing a resolution. As I have explained, Clause 37 is crucial to the credibility and effectiveness of the reporting regime introduced by the Bill in order to demonstrate the unions’ compliance with their existing duty to maintain an up-to-date register of members.

I now turn to Amendment 30. This would alter Clause 38 to make the certification officer’s powers to require the production of documents contingent on receiving a formal and qualifying complaint. As drafted, the amendment is difficult to follow, as there is no explanation of what would constitute such a complaint. The intended change seeks to undermine the key policy objective of Part 3 of the Bill, which is to give union members, employers and the public greater assurance that unions are complying with their existing duties to keep an up-to-date register of their members’ names and addresses. The amendment would make it more difficult for the certification officer to exercise the investigatory powers introduced by the Bill.

The principle underlying the existing duties has not been questioned. However, evidence from BIS’s consultation and from debate in this House and in the other place has indicated that unions face difficulties in keeping their records updated and that there is not always confidence in their compliance with the duties. As the noble Lord, Lord Monks, acknowledged in Committee, union membership records are not perfect. The noble Lord has a wealth of experience in this field, which I recognise and as has been demonstrated by his contributions to these debates. As he explained to the House, unions collect subscriptions in a variety of methods. He said:

“The record keeping could sometimes slip”.

Moreover, he said that high turnover in some sectors means that,

“a third of the members of USDAW, the main retail union, have to be replaced each year just for membership numbers to stand still”.—[Official Report, 11/11/13; col. 529.]

Current statute does not provide—

[Lord Monks]

I am grateful to the Minister for giving way. I just wonder how the assurer can help a union in a situation where there is very rapid labour turnover, lots of short-term contracts and great difficulty in keeping membership rolls up to date. What possible value can the assurer add to that situation, except to confuse it?

[Viscount Younger of Leckie]

It is certainly not to confuse, my Lords. As I explained, the role of the assurer is to provide that element of credibility which is not there at present. The assurer will also be working closely with the union and a contract will be drawn up with the union, notwithstanding the core powers that the assurer must have. That is why we believe this is necessary, in particular for the larger unions with 10,000 members and above.

The current statute does not provide an assurance of the union’s compliance as there is no sufficient enforcement mechanism. The Bill addresses this shortcoming by allowing the certification officer to investigate instances of possible non-compliance where there is good reason to do so. The certification officer will require access to the register and other relevant documents in order to determine whether a union is diligent in maintaining a register that is up to date so far as is reasonably practicable. The current system relies on individual members making formal complaints to the certification officer before he can investigate. As members can have no way of knowing the state of the register as a whole, the route for the certification officer to determine whether a union is compliant with its statutory obligations is not that effective to ensure that the existing duties are complied with. There may be a good reason for the certification officer to investigate a union’s compliance with the overarching duties even in the absence of a complaint including, for example, where a membership audit certificate has not been provided by the union or it is unsatisfactory.

We want to give members and the wider public an assurance that all unions are complying with their existing statutory duties. If the measure is applied only when the certification officer receives a complaint, we will not achieve this objective. Just because there are few formal complaints that we are aware of, it does not mean that there is no problem and this is an important point to make bearing in mind the comments that were made earlier by the noble Lords, Lord Whitty and Lord Monks. The access to and handling of union data is a concern that has occupied a great deal of time and debate. The Government understand the sensitivity of union membership data and agree with the importance of protecting them. However, for the reasons discussed at length previously, I reassure noble Lords that this amendment is unnecessary. Membership data will be well protected by both the existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union as set out in the Bill. The assurer, the certification officer and the inspector will be subject to the obligations of the Data Protection Act whenever they handle union membership data. Furthermore, the certification officer is obliged to act in accordance with the European Convention on Human Rights, which includes the individual’s right to privacy.

These two amendments between them would undermine the Government’s policy objective in Part 3 of the Bill. Amendment 29 would remove the independent scrutiny that is fundamental to the credibility of large unions’ annual reporting on duties. Amendment 30 would remove the provision for the certification officer to proactively investigate and assess a union’s compliance with Section 24 of TULRCA where there is good reason to believe that there may be an issue. For these reasons I cannot accept the amendments.

Just before I ask the noble Lord, Lord Whitty, to withdraw his amendment, I want to respond to a question he put to me. He raised the important issue of who would be appointed to be an assurer. We have already said that we will consult on who will be eligible to be an assurer, and further to this consultation the Secretary of State will make an order setting out who is eligible. They are likely to be qualified professionals such as solicitors and lawyers, which was alluded to by the noble Lord, Lord Whitty, auditors or independent scrutineers. This is similar to the system in place for independent scrutineers, and furthermore the unions will have discretion over whom to appoint from the list of eligible assurers and to remove them from the role on agreement with their members. Unions will be able to define the detailed terms of contract and their relationship with the assurer. I ask the noble Lord to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister for that lengthy reply, in which he repeatedly referred to the Government’s key policy objective. However, it is not clear to me what the policy objective of the whole of Part 3 is, and in particular the invention of this new category of assurer. I am glad that there is to be a consultation on it, but I do not see that anything is likely to emerge at the end of that consultation which could not be written into the terms of the annual audited return from the trade unions, whereby the external auditor would be required to certify that their membership system complied with the requirements. Why we have to invent a whole new structure is creating grave suspicion among the unions. The whole of Part 3 is very difficult to understand, but its effect will be a significant cost on union administration. The creation of an intermediate level between them and the certification officer is bound to increase distrust, and there is a suspicion that the Government’s motive in this is, at the very least, suspect.

Some of the motives that we have to tried to impugn have been denied by the Minister. It is not about tightening up on strike ballots. It is not about assurances on internal elections. It is not about the political fund. It is about imposing a cost and a bureaucracy on trade unions that will increase the likelihood of conflict between them and their regulator. I do not think that that is in the interests of trade union members and I cannot see that it is in the interests of wider society. The suspicion therefore has to be that other, sinister motives are involved here—that the Government wish to impose someone right in the heart of the administration of the trade unions, someone employed or contracted theoretically by the trade unions but who is actually a different type of person. I do not want to go too far down the paranoid road but I am quite a long way down it.

It seems to me that all the objectives that the Minister has mentioned can be achieved by a tightening up of the audit and by the certification officer and his or her powers. This intrusion of an assurer has not been justified. Had we not been voting so much today and we are all getting very tired, I would have asked the opinion of the House. I think that this is a bad part of the Bill and this is the worst part of that bad part. Before they put it into operation, the Minister and the Government need to think about this very carefully again. In the mean time, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Clause 38: Investigatory powers

Amendments 30 to 32 not moved.

Clause 39: Enforcement

Amendment 33 not moved.

Amendment 33A

Moved by

[Lord Monks]

33A: After Clause 39, insert the following new Clause—
“Part 3: Commencement
The provisions in this Part shall not come into force until the Secretary of State has received notification from the Certification Officer that all registered unions with more than 10,000 members have completed such rule changes as are required to satisfy this part of the Act.”

[Lord Monks]

My Lords, Amendment 33A concerns the commencement of Part 3. We have already debated the purposes of the Bill and I must say that I am still in a state of some mystery about exactly what it is supposed to do, other than give trade unions a provocative prod, and it is certainly doing that. For the Government to act in this way without any clear justification for doing so other than through some sense of confidence and assurance—for whom, I am not sure—is a dangerous road to go down. We will be watching other developments in this area, if there are any, very carefully.

I am not going to go through the speeches and points that have been made already. This amendment seeks to ease the regulatory burden by extending the period before the Act is brought into force. The Minister has learnt about union administrative procedures. To change the rules, which would have to be done to allow the assurer access to this kind of information, is a time-consuming, complicated and expensive prospect. The kind of costs we are talking about are those for a union with, say, 1 million members that holds a rules revision conference every two or three years of 1,000 delegates. If, because of the timing, a union has to hold a special conference, that will cost another £500,000. The Government’s estimate that the cost to unions collectively will be around £460,000 pales into insignificance against the costs of union conferences and administration. We debated earlier that the assurer can be got rid of only by the decision of a delegate conference, and again you can see the kind of costs that are beginning to stack up; they go way beyond where the impact assessment took us. In Committee, the Minister indicated some scope for flexibility about this aspect and I know that there have been talks about it. The TUC has been involved and some noble Lords have had contact with the Minister as well.

Let me emphasise that there does not seem to be any great urgency about the need to bring this in. It is not a matter of widespread public concern. There are no current, or indeed historical, problems screaming for attention and for the early implementation of this legislation. It would very much help unions, which would obviously have to comply with the law, if they had adequate time to prepare the necessary changes to their rules without the need to have special conferences and rules revision processes that are exceptional rather than in their mainstream work. It would be cost effective, economical and practical, and would minimise some—not enough but at least some—of the red tape that has been dolloped on the administrations of trade unions. Therefore, I ask the Minister if there can be an adequate period of digestion that avoids unnecessary costs and administrative complexities.

This is a probing amendment, so I wonder whether the Minister can say something about what talks he has had on this issue and whether he has been able to give any more thought to it that he could disclose today in addition to what was said in Committee. I hope that if there is a chance for further dialogue, he will agree to come back to the House on Third Reading to give a report about where we are. However, this is a plea for a road map of where the unions go in relation to full implementation, for some additional time and maybe even for a scintilla of sympathy for the union position as we are forced into this particular corset, which is unwelcome in so many aspects.

20:00

[Lord Balfe (Con)]

My Lords, let me first apologise for not taking part in the earlier stages of the Bill. As a new Peer I had not made my maiden speech and therefore under the conventions of the House could not intervene.

There is a common misconception in many parts of the United Kingdom that trade union membership equals Labour Party support. This is not true. Setting aside the fact that voter turnout among trade unionists is not dissimilar to that of the rest of the population, of those who do vote around one third of TU members vote for the Conservative Party—may that grow in the future.

Unions are already firmly regulated in two ways, first by provisions in the Trade Unions and Labour Relations (Consolidation) Act 1992, passed by the last Conservative Government and left on the statute book by the Labour Government. I noticed the noble Lord, Lord Lea, mentioned the life of legislation as being short, but that is not the precedent we have from the party opposite when it was in government—indeed, it left most trade union legislation firmly in place. Secondly, the contractual relationship between unions and their members is set out in each union rule book, which is a legal document that governs how unions operate. In order to change its rules, a union must obtain support from its members. Having received that support, the rule changes can be made only within the context of statutory legislation.

In order to ensure—and I am sure we all support this—that small and unrepresentative groups of members cannot change the rules of unions without fully consulting the members, unions all have democratic procedures in their rule books which must be followed if changes are to be made. In order to give effect to the provisions of the Bill, many unions will have to hold special rules revision conferences where members vote to change their union rule book to comply with the new provisions. This is, of course, especially and usually the case with larger unions.

Tonight I ask the Minister to consider two points: first, to raise the exemption limit in Clause 37 from the present 10,000 members to a figure of around 40,000. Mention has been made of turnover in big unions. Small unions often face a very different situation. Many are professional unions, such as the radiographers or the physiotherapists, who will be caught by this Act, but have a very low turnover indeed, as do many of the others. If we went from 10,000 to 40,000, we would go from 22 to 37 unions but we would exempt all the unions that traditionally have a low turnover and a highly professional membership.

The noble Lord, Lord Martin, who is not presently with us, earlier mentioned small unions. I had the privilege for many years to belong to a very good small union called AUEW-TASS. I must say that since TASS merged, it has got more and more out of touch. Now I am almost ashamed to say I am a member of Unite, as I remain a member of Unite. I still look forward to the day when we might have an engineering section in Unite that could compare with AUEW-TASS. None the less that is a digression. Even if this change were accepted, 90% of union members would remain within the assurer provisions of the Bill.

Secondly and finally, no doubt the Government and the certification officer will want to ensure that unions are able to make these changes following the agreed procedures. This will mean giving notice to members of a special conference. Good administration—which I am sure we all support—would indicate that a transition period of at least 17 months would be helpful. I would welcome an assurance from the Minister that the transition period after commencement will at least accommodate the 17 months, because it is in all our interests that this is done properly and competently.

[Lord Stevenson of Balmacara]

My Lords, I have never in my long life met a Conservative member of a trade union. It is very nice to be introduced to one and to hear him speak. It has been very evident from the speeches we have heard, both in this small debate and previously, that if the Bill is to progress and be brought into law it must operate with the best chance of success otherwise it will not have been worth a candle doing it. As my noble friend Lord Monks said in an earlier intervention, the right way to do this is to give the unions—particularly the larger unions—adequate time to comply with the Act in a way that is cost effective, economical and practical, but also from their point of view. Unions are, after all, independent self-governing bodies. As the noble Lord, Lord Balfe, said, they rightly have procedures for making complex changes in their constitutions and it will be necessary, as the Bill recognises, that the unions will make some changes through rules conferences and the like. This is not to say in any sense that there is not anything wrong with what is currently in the Bill, but I detect in some of the comments made that we are still not absolutely clear about how the procedures will operate and the timescales that will be on and that will interfere a little bit with transparency.

When he responded to this point in Committee, the Minister said that he shared the sentiment that,

“trade unions should be given sufficient time to prepare”,

and he hoped he could,

“offer a positive and emollient answer”,—[Official Report, 11/11/13; col. 596.]

to allow time for the bedding down of the new legislation. I take it from that that he is still interested in trying to make sure that this works well. Picking up on what has just been said, I get to 17 months from the comments that were made during Committee if I follow two tracks. The first is that a union whose reporting year ends on a fiscal basis—that is, 31 March—would not need to submit a report for the year ending 31 March until the end of August 2015, which I think is 17 months if I do my maths correctly. However, a union that reports on a calendar-year basis would have a little more time. It would not have to submit its report for the year ending 31 December 2015 until the end of May 2016.

That is the sort of level of complexity which we are operating on. If we are going to fit a 17-month period, which I think was mentioned earlier as being appropriate, combining it with a Royal Assent, possibly by March 2014, and a period of consultation on the question of how assurers are going to be both defined and appointed, that suggests that it would be sensible to have one further round of discussions before it is finalised. Will the Minister consider having a short meeting with me and a few colleagues to try to run over this so that we can get some absolute clarity on it? Thereafter, we can all work together, not in any sense to shake the principles which are part of this part of the Bill, but to make sure that they work effectively.

[Viscount Younger of Leckie]

My Lords, Amendment 33A could delay commencement of the provisions in Part 3, as they would not come into effect until the certification officer knows that all trade unions with more than 10,000 members have changed their rules to provide for the appointment and removal of an assurer. I know that noble Lords have been concerned that unions should have sufficient time to prepare for these new arrangements. In particular, we have been told that many unions do not routinely have an opportunity to make rule changes—I think the noble Lord, Lord Monks, alluded to that earlier. I am happy to offer reassurance to the noble Lord, Lord Stevenson, and other noble Lords that unions will have the time that they need. They will have at least 17 months to comply from the point at which the legislation takes effect, because the provisions will not apply retrospectively.

Unions will be required to submit a membership audit certificate alongside their annual return for the first full reporting year after the changes become law. The 17 months is the combination of the 12-month reporting period plus the five months that is allowed after that period to submit the annual return. The earliest that the provisions will take effect is October this year, which would depend on Parliament granting Royal Assent next month. That being the case, unions would have a minimum of 25 months from Royal Assent. In practice, many unions will have much longer.

Unions have different reporting years: many work on either a calendar or a financial year, which the noble Lord, Lord Stevenson, mentioned. Were the legislation to take effect in October 2014, a union with a calendar reporting year would first provide the membership audit certificate by the end of May 2016; for a union with a financial reporting year, it would be the end of August 2016. The noble Lord, Lord Monks, raised the issue of allowing unions sufficient time to meet the new requirement. I entirely sympathise with that and have said something about it just now. I have to confess that this is not the most straightforward of timetables to set out and I would be very happy to meet the noble Lords, Lord Stevenson and Lord Monks, and any other noble Lords to clarify the timings and state why we think this would be sufficient for trade unions to make the transition. That reflects the discussions that we have had with the TUC and others.

I take this opportunity to warmly welcome the noble Lord, Lord Balfe, and the experience that he brings on union matters, something I mentioned earlier in respect of the noble Lord, Lord Monks; it is only fair to acknowledge the experience that the noble Lord, Lord Balfe, has as well. I have had some discussions with him, at his request, on the question of whether the £10,000 threshold is set at the right level. Our primary objective is to supply assurance to union members, and to the wider public, about the existing statutory requirement to maintain an up-to-date register of members. The requirement to maintain a register applies to all unions, no matter what size. However, at the same time, the Government do not want to unnecessarily prohibit the creation of trade unions or undermine their ability to operate. We believe that it is possible for a union to be confident in the accuracy of all its records where its membership is small. We also believe that the wider public will think it reasonable that special provision is made for the smaller union and accept that where numbers are smaller it is reasonable to rely on the union’s own assessment.

Self-certification means a union officer assuring that every individual record is up to date, so far as is reasonably practicable. We think that this is achievable for unions with 10,000 members or fewer, but it becomes much more challenging where there are more members than that, which was part of the debate that we had earlier. The union official would have to be confident of the position and union members and the wider public would have to have trust that this was reasonable—a point, again, that I made earlier. By contrast, independent assurance focuses on whether the system in place for monitoring records is satisfactory, as opposed to making a statement about the accuracy of individual records. I therefore believe that this amendment is unnecessary and I ask the noble Lord to withdraw it.

[Lord Monks]

My Lords, it was a pleasure to hear the noble Lord, Lord Balfe. I welcome him to this House. It was a pleasure to hear him praising TASS, which, as its chosen acronym suggests, was not exactly aligned with the Conservative Party—nor, from time to time, with the Labour Party either. However, we all change and I am interested in what his views were when he was an active member of that union.

We appreciate the way in which the Minister responded on the timetable point. It will be useful to just see if we can tie this matter down in the next couple of weeks and see where the different positions that we hold meet, so that unions comply in a way which is sympathetic to the necessary costs and timetables. On that basis, I beg leave to withdraw the amendment.

Amendment 33A withdrawn.

Consideration on Report adjourned.

Co-operative and Community Benefit Societies Bill [HL]

Monday 13th January 2014 Lords Chamber

Second Reading

20:16

Moved by

[Lord Newby]

That the Bill be read a second time.

[Lord Newby (LD)]

My Lords, it is a pleasure to open the debate on the Bill. This is a consolidation Bill which brings together and modernises the law relating to co-operatives and community benefit societies, and other societies registered or treated as registered under the Industrial and Provident Societies Act 1965, with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission.

As a consolidation Bill, the Bill aims to remove ambiguities but does not seek to introduce any new policy or make substantial changes to law. It is still, however, an important step in reducing legal complexity for new and existing societies. In January 2012, the Prime Minister announced that, in support of the co-operative movement, the legislation dealing with co-operatives and other mutual societies would be consolidated into one co-operatives Bill. This Bill represents the Government’s delivery of that commitment.

The industrial and provident society sector forms a major part of the mutuals landscape, with a diverse mix of over 7,000 independent societies in the UK. Given their clear importance to the diversity and strength of the UK economy, the Government are keen to continue their support for the sector. This consolidation Bill is one element of the key reforms we are making to help ensure that industrial and provident societies are well placed to play a central role in the UK economy for years to come.

As part of the Government’s continued efforts to simplify and modernise legislation, the Law Commissions made a number of recommendations for modifications which have been incorporated into the Bill. For example, the language regarding the conditions for registration as a community benefit society has proved problematic. The Bill now clarifies this position and provides that a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community.

The Law Commissions also identified areas where some of the language used in the legislation was unnecessarily complicated. For example, there is no reason to distinguish between documents in electronic format and those in other forms. The approach has been harmonised in the Bill, with relevant sections applying to all of a society’s business correspondence and other business documentation in any form. The Bill has been warmly welcomed by sector trade bodies, particularly Co-operatives UK.

In addition to the consolidation Bill, we are taking further steps to modernise industrial and provident society legislation by commencing various sections of the Co-operative and Community Benefit Societies and Credit Unions Act 2010. The Government are also introducing a package of measures in support of co-operative societies through secondary legislation, and the consolidation Bill takes account of these measures. These are due to come into force in August 2014 and are: first, increasing the cap on the amount of withdrawable share capital that an individual can put into a society, which will increase from £20,000 to £100,000; secondly, allowing for troubled societies to enter insolvency rescue proceedings; thirdly, giving the FCA additional powers to investigate societies; and, fourthly, making electronic submission of registration documents simpler.

Following a public consultation earlier last year, all of these measures have been warmly welcomed by sector representatives. Co-operatives UK, the main industry trade body, has welcomed the changes, saying that:

“The appetite and commitment to do business the co-operative way has not waned”,

and that this is,

“a massive vote of confidence in the strength of the co-operative sector and recognises the movement’s ambitions for growth and development”.

This is a useful and overdue Bill.

[Lord Tunnicliffe (Lab)]

Will the measures that the Minister has just described come before Parliament, either as affirmative orders or as negative orders?

[Lord Newby]

My Lords, I believe that they will. I will confirm that to the noble Lord, but that is my understanding.

As I was saying, this is a useful and overdue Bill, which will allow the Government to continue their support for the mutuals sector, as underpinned in the coalition agreement where it sets out their commitment to foster diversity and promote mutuals. The Bill is a key part of wider legislative reforms aimed at strengthening the sector and encouraging increased investment in the country’s co-operative sector, allowing it to thrive. In short, this Bill is good for the mutuals sector, and I commend it to the House.

20:21

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I am grateful for an opportunity to speak briefly in the gap. I am afraid that I was away on business in the United States last week and I arrived back at Heathrow only at 10 o’clock last night. By the time I got my mind into gear, I am afraid that the speakers list had closed.

My two simple points refer to the point made by my noble friend in his opening comments. The heavy type on page 3 of the Law Commissions’ report, which is the first recommendation, says that,

“a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community”.

I would like to explore with my noble friend some of the practical implications of this. First, who defines “benefit of the community”, where is it defined, who judges whether the definition has been met and who hears appeals against judgments perceived to be unfair? Secondly, does the test precisely match the public benefit test applied by the Charity Commission, which is the key to charitable status? If not, is there not a danger that the unscrupulous will game the system to take advantage of whichever regime is laxer? As far as the charitable sector is concerned, which is under pressure with the Cup Trust and executive pay, further adverse publicity would be surely unwelcome.

My second point concerns the question of “to the FCA’s satisfaction”. Is my noble friend convinced that the FCA will devote sufficient resource to ensuring that the benefit to the community test is met? When I reviewed this as part of my charity review, it was clearly low on its agenda. At paragraph 10.29 of my report I said:

“Only a small proportion of IPS are charities; all of those are community benefit societies. Charitable IPS are exempt from registration with the Charity Commission and, although they are registered with the Financial Services Authority … the FSA undertakes no regulation in respect of any type of IPS. This, then, is essentially an unregulated sector”.

It needs to be a test that is not just a nod-through. It needs to be a test that is reapplied from time to time; it should not be the case that, once a society is through the hoops, it is in the pen for ever.

I appreciate that these are detailed comments made in very short order. I have not been able to give my noble friend any advance warning, and I apologise for that. I would be happy if he wanted to write to me, but these are potentially very important issues, which deserve a public response and airing.

20:24

[Lord Tunnicliffe]

My Lords, before I commence, I wonder if the Minister has some information from the Box that he might share with me in response to my question.

[Lord Newby]

My Lords, I am extremely pleased to be able to reassure the noble Lord that the four measures that I referred to will be brought before Parliament shortly. One will be brought forward in an affirmative resolution and the other three in a negative resolution.

[Lord Tunnicliffe]

I thank the Minister for that response, which will make my brief speech even shorter.

At somewhat short notice we were asked if we would take this consolidation Bill and it fell to me as the sort of second tier on our team—because we have only two now—to look at it. I thought, “What is a consolidation Bill?”, so I looked it up and it seemed that the first role of the Opposition was to have a reasonable confidence that it was a consolidation Bill. The test is in the Companion at 8.205 and there are five reasons, (a) through (e), and it is fair to say that the Bill seems to fall among (a), (b) and (c).

The first thing I did was to get a copy of the Bill. I was just about to start reading it when I got another document, the table of origins, which convinced me that I should not read it. Almost fortuitously, the Printed Paper Office offered me a copy of the Law Commission report, and I have read that. I take the point that these Bills have to be looked at very carefully to ensure they pass the test for a consolidation Bill but, reading the Law Commission’s report a little bit carefully, its recommendations seem to fall within the overall requirement.

Certainly, when one goes on to read how this Bill will now proceed, to the Joint Committee on Consolidation Bills, where there will be detailed scrutiny of the origins of the parts of the Bill and the Government, through their witnesses, will have to assure the committee that it meets the test, we can be comfortable that this is a proper consolidation Bill and serves a useful purpose.

The thing about consolidation Bills is that no parliamentarian—except when you are in government, I suppose—can be other than joyful about their arrival. I cannot think of parliamentary language to describe much of our legislation but, having sat through so many variations of financial services Bills—FiSMA and so on—in the sure and certain knowledge that no reasonable human being using the source document could possibly understand it, consolidation Bills are a joy to the eye.

However, one has to ask: why this one? The Government’s response to the consultation offers the rather nice words that it will,

“consolidate existing IPS legislation in one place, and is an important step in reducing legal complexity for new and existing societies”.

I agree that it is an important step but I ask the Minister: why this Bill and not many others? Do the Government have a plan for a programme of consolidation Bills? I particularly hark back to the travail that he and I and others have been through with the various financial services Bills. I have to say that the Treasury did a splendid job of producing Keeling schedules and such things to help us but even with all that help it was an uphill battle. Will the Government bring forward further consolidation Bills?

The next area I was going to venture into concerns the merits of the other actions that stand alongside the consolidation Bill and are set out in the consultation document. Because of the Minister’s assurance that they will come in front of Parliament as either negative or affirmative instruments, I will not waste the time of the House on those issues now and will not ask the Minister questions he would have to promise to write to me about.

Accordingly, we broadly support the concept of a consolidation Bill. We wish it well and I wish the members of the Joint Committee who have to go through all this paperwork all the luck in the world.

20:30

[Lord Newby]

My Lords, I am grateful to noble Lords who have spoken in this pleasingly short debate at this time of the evening.

The noble Lord, Lord Hodgson, asked me some very technical points and I will of course write to him as he suggested. He asked about the extent to which the FCA will prioritise looking at IPSs. The FCA is committed to maintaining the registration requirements of being a bona fide co-operative or community benefit society. One of the measures that the Government will bring forward will give the FCA additional powers to investigate these societies for irregular activities, as well as disqualifying directors where appropriate. There has been a long-held view that the FSA has devoted very little attention to this sector, but there is a logic in the regulators putting in more effort to make sure that, as the sector grows both in size and prominence, it is well regulated. However, I will certainly pass on his view that this is a sector which the FCA certainly cannot afford to ignore.

The noble Lord, Lord Tunnicliffe, very kindly welcomed the Bill. One advantage of consolidation Bills is that if you do attempt to read them, the first parts—until one gets into the schedules—are often a much better read than what preceded them. This is a consolidation Bill albeit with the Law Commission’s drafting amendments to clarify various ambiguities. Why, he asks, are we consolidating in this area rather than in a lot of others? We have been very keen as a Government to simplify and develop the law in this area. It has been a bit of a patchwork quilt. There has been a long tradition that mutuals legislation is introduced as private Member’s legislation, and more than with other types of legislation, little pockets of provision have developed over the decades. As the sector grew, however, it needed legislation that was commensurate to its new status.

There will be other consolidation Bills in due course. The challenge is, as much as anything else, around resources. Sadly, this Government are no less keen than their predecessor to produce a large volume of legislation; and sadly, from the parliamentary counsel’s point of view, there are limited resources. The other challenge, as always, is to consolidate at a time when there are often new changes which are sometimes difficult to provide for legislatively. However, the whole process of consolidation is an important one in terms of keeping the law up to date and useable. The Government are committed to maintaining that approach.

I am grateful to noble Lords who have spoken. We believe that this is a useful piece of tidying-up legislation, and I commend the Bill to the House.

Bill read a second time and committed to the Joint Committee on Consolidation Bills.

House adjourned at 8.34 pm.