Grand Committee

Tuesday 1st July 2014 Grand Committee

Tuesday, 1 July 2014.

Openness of Local Government Bodies Regulations 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

15:30

Moved by

[Baroness Stowell of Beeston]

That the Grand Committee do consider the Openness of Local Government Bodies Regulations 2014.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument)

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

My Lords, the regulations were laid before this House on 3 April. They are part of a series of measures, founded on the Localism Act 2011 and the Local Audit and Accountability Act 2014, which this coalition Government have taken to protect local democracy, enhance local scrutiny, and create 21st-century local accountability. Specifically, these regulations enhance the rights of the press and public to report council meetings in digital and social media. They also enhance the rights of people to know what decisions are being taken by council officers on behalf of elected members.

That the public can readily know what those they have elected to represent them are doing is the very lifeblood of democracy. This is fundamental and has long been recognised. It was my late friend Lady Thatcher who introduced the right for the press and public to attend and report council meetings back in 1960 through a successful Private Member’s Bill, which she first mentioned in her maiden speech in the other place. A well functioning democracy, however, is not something set in stone. It must keep pace with the way people live their lives, and the way they communicate and share and discuss information.

Use of digital and social media now runs through daily life. The rights which were given to people in 1960 to report and access council meetings now need to be updated to encompass the digital world of today. I know that when we debated the provisions of what is now the Local Audit and Accountability Act 2014 there was a general welcome across the House for the kind of changes I have just outlined. I also know that a number of noble Lords had concerns about how precisely we could implement these changes, and at the same time avoid creating circumstances in which the good conduct of business in a council could be put at risk, or where those using the digital media might inadvertently put themselves at risk through breaching laws on defamation.

We believe it is possible to give the public modern 21st-century rights of access and of reporting, and equally to address the concerns such as those that have been raised. The principal means of doing this will be through our plain-English guide that we are developing with local government. I will say more on this in a moment, but through it we envisage dealing specifically with issues such as defamation, disrupting a meeting, or inhibiting the free exchange of views among the council members.

When we sought views about these regulations, the Local Government Association stated that it does,

“not believe that further central government regulations are needed in this area”.

We agree that many councils are already opening their meetings to digital reporting. But sadly there have been occasions where councils have sought to prevent this, even in a few cases ejecting members of the public from meetings for trying to report them using the digital media of today. I am sure that if this can happen, it is not the modern democracy we all want. The regulations before us today will ensure that this cannot happen in future. They will ensure that local democracy everywhere in the country is on a modern footing. We want ordinary people to be clear about their rights.

Turning to specifics, the regulations will amend existing legislation to put beyond doubt the rights of the public to film, audio-record and use social media to report public meetings of their council or other local government bodies, their committees, sub-committees and joint committees. To be clear, these regulations apply to all principal councils—county councils, London borough councils, district councils, unitary councils, the City of London and the Isles of Scilly. They apply also to local government bodies such as fire and rescue authorities, Transport for London and the Greater London Authority.

The regulations apply equally to parish and town councils. I know that there was some concern about how this will work in practice, particularly for small parish councils, or indeed the parish meeting. The practicalities will be covered in the plain-English guide. It will specify, for example, that while the public can film, they can do so only from the area that the public normally use and that none of this requires the council to make equipment available or to provide special electronics or lighting.

In essence, where today a council has to provide access to the public, in future, those exercising that right of access will in addition be able, from that same public area, to use their own equipment to film, or to tweet from their own devices, such as an iPhone or iPad. In the interests of impartiality and to demonstrate that I am digitally savvy, I should say that they could also use tablets or Androids.

In every case these regulations give people the right to film, blog or tweet at meetings of the council or body and at meetings of any of the council or body’s committees or sub-committees. These same rights apply to meetings of a council’s executive and any committee or sub-committee of the executive.

Nearly two years ago we made the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012, which for the first time opened up the meetings of an executive to filming and reporting by social media. The regulations before us today now extend what we have achieved for council executives in 2012 to all the meetings of a council.

The 2012 regulations also gave the public rights to see a written record of decisions officers take on behalf of the council’s executive. The regulations we are considering today likewise extend these rights to decisions that officers take on behalf of the council or any of its committees or sub-committees.

Specifically, where a council or one of its committees delegates to officers decisions that affect the rights of individuals, grant a permission or licence, or that relate to incurring expenditure or awarding a contract that would have a material impact on the financial position of the council or local government body, there must be a record of the decision the officer takes. The record of the decision will include the reason for the decision, any alternative options considered and rejected and any other background documents. That will mean that there is transparency and openness in the way these bodies make the decisions that significantly affect the lives of those in their communities.

As I have explained, these are important rights which will ensure that our local democracy is fit for purpose in the world of today. To ensure that these rights are smoothly and effectively introduced and recognised everywhere, my department is working with the local government sector on publishing, if Parliament approves these regulations and they are made, a plain-English guide about what these rights mean for the public, for members and for officers. This will incorporate and extend the plain-English guide we published in 2013, Your Council’s Cabinet—Going to its Meetings, Seeing How it Works, following the 2012 regulations.

As I mentioned, a draft version of the plain-English guide has been published and deals with such issues as defamation and disruption. It contains guidance for the public on libel and the responsibility they must take for the comments they tweet or the videos they publish.

Regarding disruption, the guide will make clear that nothing in these regulations will impact on the chairman’s power to exclude members of the public in cases of genuine disruption, while explaining the clear legal position that the act of filming and using social media in itself cannot be considered as disruptive.

Turning to the timing of the coming into force of the regulations, the regulations provide that they will come into force on the day after which they are made. The Joint Committee on Statutory Instruments did not find a compelling justification for this timing of coming into force, and accordingly reported that the provision appeared to make an unusual use of the power conferred by Section 40 of the Local Audit and Accountability Act 2014.

The Government accept that it is important that there is a smooth introduction of the new rights which the regulations will give the press and public, and accordingly they have undertaken not to make the statutory instrument until at least 28 days after the day on which any parliamentary approval for the statutory instrument is given. In taking this approach the Government have had careful regard to the report of the Joint Committee.

In conclusion, these regulations will mean that in future local government everywhere is more open, more transparent and more accountable. People will more readily be able to see and know what those who they elected are doing. That is good for democracy, it is good for elected members, it is good for our communities and it is good for local government and the vital services that councils provide.

I commend the regulations to the committee.

[Lord Smith of Leigh (Lab)]

My Lords, before I start, I need to declare my interest as leader of a council, chairman of the Greater Manchester Combined Authority and a vice-president of LGA. I commend the Minister for the competent way in which she introduced the regulations today. I am sure we all agree that openness and transparency are as important in local government as anywhere else in public service.

I am grateful to my noble friend Lord McKenzie for pointing out that I am mentioned in dispatches today. I am mentioned in the appendix of the first report of the 2014 session by the Joint Committee on Statutory Instruments in evidence provided by the Department for Communities and Local Government. I hope that the rest of the evidence is more accurate than the bit that quotes me. The very famous news source is the Daily Mail. How reliable does anybody think the Daily Mail is in providing stories about Labour in local government? What it says is entirely untrue. It says that a member of Wigan council was ejected by the police for tweeting. He was ejected because he would not obey the order of the mayor. It was to do with me as leader of the council. The mayor asked him to behave. He refused to do so. What does one do? He just would not follow instruction. That is the basic rule in any form of organisation. If the Deputy Chairman of Committees were to instruct us, we would obey. That is a basic law.

The fundamental question about these regulations is: why? Why are we spending today debating these regulations? There are more crucial issues in local government that we ought to be talking about. Yesterday, the LGA produced a report stating that local government spending is probably underfunded by just short of £6 billion, caused by cuts to government services and increasing demand. Sir Merrick Cockell, the Conservative leader of the LGA, said that local government funding is on a knife-edge, yet all we are doing is passing regulations that increase unnecessary spending in local government, even if only in a small way. Councils should be left to determine how to tackle these issues.

Whatever happened to localism? In 2011, we passed the Localism Act with grand claims about what it would mean for local government. The Secretary of State who introduced the Bill said:

“The Bill will reverse the centralist creep of decades and replace it with local control. It is a triumph for democracy over bureaucracy. It will fundamentally shake up the balance of power in this country, revitalising local democracy and putting power back where it belongs … they managed to fulfil the wildest dreams of both Sir Humphrey Appleby and Mr Joseph Stalin. That strangled the life out of local government, so councils can barely get themselves a cup of tea without asking permission”.—[Official Report, Commons 17/1/11; col. 558.]

Those were strong words from the Secretary of State. I supported them then, and I still support them, but here we are introducing legislation about openness in every council.

Councils will have different ways of solving this problem because, as anyone who goes to different town halls knows, different town halls will need different solutions. There is no issue about whether members of the public should be allowed to do it. I am very pleased that people want to come and record me and film me. I would be very flattered if that were to happen as a regular thing, but I am sure it will not be after the first couple of meetings. We are stretching the point when we go into such detail about what each local authority will need to do to solve the problem about where people can and cannot film meetings effectively.

It is right that local government publishes what decisions are made, but to make non-compliance with some of this a criminal offence is perhaps going a little bit over the top. This is unnecessary legislation. We are back to the old days when anything that local government does is being determined not in each and every town hall but in Whitehall. I am sorry that we have reached that pass again. I hoped that we had gone beyond it, but, unfortunately, these regulations demonstrate that we have not.

15:45

[Lord McKenzie of Luton (Lab)]

My Lords, I start by thanking the Minister for her explanation of these regulations, and I am delighted to have heard from my noble friend Lord Smith, the experienced voice of local government, who put the Department for Communities and Local Government correct in some of its submissions and reminded us just how precarious the financial position is of local government.

We do not oppose these regulations, although they are not without controversy. Of course, the principle of ensuring that local authority decision-making is accessible to the public so that they can better engage with it and encourage the delivery of value for money is not controversial. We are on the record—or the shadow Secretary of State Hilary Benn certainly is—about supporting the use of modern technology in the course of doing this. There is controversy about bringing the regulations into force the day after they are made. The Minister referred to the Joint Committee on Statutory Instruments, which was clear that it did not find compelling the justification that the department offered for the provision. I was going to ask the Minister to have another go at convincing us, but I understand from what she said in her introduction that the regulations will not be made for 28 days in any event—so in a sense that would give some breathing space.

The Minister could perhaps tell us why the Government eschewed a consultation on these regulations and opted for a short, focused, informal soundings exercise with partners. How transparent is that? We understand that all comments were carefully considered before finalising the regulations but, of course, we are not privy to all these comments. In the interests of transparency, could they be made available? We are told that the LGA did not support the regulations, believing that guidance would have sufficed. The National Association of Local Councils raised concerns over the practical implications of the proposals, and we all had the benefit of the submission of Transport for London, which set out its concerns and those of the GLA.

Will the Minister comment on the points raised on the vague and broadly based category of decisions that will need a written public record? There is a risk that lack of clarity will cause a wider interpretation of what is required with unintended and disproportionate burdens, and the suggestion, for example, that TfL would have to record and publish in the region of several thousands of decisions, including in relation to taxi and private hire licensing. There are concerns, too, over contracts whose terms and conditions include granting a permission or a licence, adding burdens with very little impact on transparency, given DCLG’s local government transparency code of 2014. There are also concerns about provisions on background papers. I do not assert that Transport for London is correct in its concerns, but we are entitled to hear a response from the Minister to what seem to be the very real issues that were raised with us.

On what is perhaps a minor matter, we note that written records must be retained and made available for inspection for six years, but background papers for only four years. Perhaps somebody could explain the difference between those arrangements.

The Minister said in her introduction that it was agreed during the passage of the Local Audit and Accountability Act 2014 that the Government would bring forward new powers to ensure that the public can film, blog or tweet at all meetings of the council, its committees and sub-committees, that they can attend. This is about bringing local democracy up to speed with today’s fast-moving digital age.

These new communication channels enable local authorities to speak quickly and directly to their local communities. As my honourable friend Roberta Blackman-Woods said in another place, the local media industry is sadly in decline. The internet and social media mean that people are accessing news and information online. The circulation of local newspapers has declined and staff and resources have been cut. Today, more and more council meetings are taking place without a reporter in the public gallery.

Over recent years, we have seen local authorities experiment with new ways of broadcasting council meetings such as live streaming video or audio, using Twitter to post updates and uploading transcripts online. Although the number of people watching these webcasts may be small, the online audience is significantly higher than in the meeting room itself, and has the power to grow exponentially. A retweet or a shared Facebook post grows the potential reach of that piece of information by tens or hundreds of people with just one click. We know that many local authorities are struggling to deliver their statutory services so it is right that we give powers to the public to film and record council meetings rather than make it mandatory for councils to do it themselves.

We are used to having our proceedings televised but rules govern how this is done. It seems to me that these rules will not necessarily exist at the town hall, so will the Minister offer her thoughts on circumstances where filming or recording is focused on one member in particular, and done in such a way as to intentionally seek to damage his or her reputation, perhaps by capturing an unguarded and unflattering moment? My honourable friend Roberta Blackman-Woods also referred in another place to the extent to which accommodation must be made for big equipment such as spotlights, but I think the Minister dealt with that in her opening remarks.

We note that there are no formal plans to monitor and review these regulations, which is a pity, but we look forward to the plain-English guide and hope that it will clarify some of the uncertainties around the drafting of these regulations—which, as I said, we nevertheless support.

[Baroness Stowell of Beeston]

My Lords, I am grateful to noble Lords for their contributions. The noble Lord, Lord Smith of Leigh, talked about the need for these regulations and said that there was a reference to him in one of the documents that my department provided to the JCSI.

As I said at the start of the debate, we all believe in openness and transparency. We think that is a good thing and want people to have access to meetings. However, people’s expectations of what that means are changing because of the onset of social media. People no longer want to go to meetings and listen; they want to provide a commentary through tweeting or make a recording so that they can have an element of control in the way that they use the information they have gathered. That is the modern way in which democracy works in terms of public access.

Although the noble Lord is absolutely right to say that there is already widespread use of these forms of access on the part of local authorities, there is, however, evidence of some local authorities not allowing them. I do not think it is right that in this country in 2014 we should be put in a situation where it is possible for some people not to be able to tweet or record a public meeting just because a council thinks that they should not do so.

I can refer to few examples in addition to those to which the noble Lord referred, which I will not repeat. Tower Hamlets, for instance, barred a 71 year-old resident for filming, due to the risk of reputational damage to the authority. In November 2013, it was stated at a meeting of East Riding of Yorkshire Council that it would not allow filming or blogging of any meeting until forced to do so by law. In Middlesbrough, an AGM was suspended because an internet blogger refused to stop filming proceedings; people were told to leave the building after the meeting was suspended while the police were called.

I understand that they may be limited in number, but earlier this year I was in Strasbourg at a Council of Europe meeting, responding to a report of one of the committees there about local democracy in England. There were people in that committee from Turkey and other countries. I wanted to be able to demonstrate that, in our country, we have the kind of freedoms that people believe in and that we will, if those freedoms cannot be accessed, change the law where necessary to make it possible. We have done it in a simple and straightforward way.

The issue of expense has been raised. There is nothing in these regulations that should incur any cost to local authorities, because they are not required to provide any kind of additional facility whatever. I am aware that some local authorities record or even stream their meetings live as they are happening. That is a good thing, but they are not obliged to do so, and we certainly would not make that mandatory. The fact that there is some evidence of restrictions on the public means that we are now making absolutely clear what is possible, which local authorities are in most cases already doing. It should be quite a simple change for people to be able to cope with and implement.

That said—as I said in my opening remarks and as the noble Lord, Lord McKenzie, asked me to confirm—we will not bring the regulations into force until at least 28 days after they have hopefully been approved by Parliament. We have produced a plain-English language guide, a draft of which is available on my department’s website. It addresses the sorts of concerns that are legitimate, such as making sure that this access does not lead to inappropriate disruption. If noble Lords have not yet had a chance to look at it, I encourage them to do so.

I turn to some of the specific points raised by the noble Lords, Lord Smith and Lord McKenzie, which I have not already addressed in my remarks. The noble Lord, Lord Smith, asked about criminal sanctions. It is worth me being clear that the criminal sanction applies only to a situation in which a person without reasonable excuse prevents someone from accessing an existing document. It does not apply to the decision as to whether such a document should be produced; it is a question of there being evidence of somebody obstructing somebody from accessing a document.

On the categories of decisions made by officers on behalf of elected representatives, the regulations do not require the recording of day-to-day administrative decisions taken by officers. Rather, they require the recording of two categories of delegated decisions: those taken by officers under a specific delegation, and certain decisions taken under general delegation, as I mentioned. To the noble Lord’s point that most local authorities are already following good practice in this area, we believe that the work necessary in preparation for these regulations coming into force is quite minimal.

The noble Lord, Lord McKenzie, asked what steps we have taken to consult others about these changes and about our informal soundings. The comments that we received from our soundings are described materially in the Explanatory Memorandum. The plain-English guide will make clear that decisions such as operational ones about, say, tickets, which the noble Lord referred to, do not need to be recorded.

Noble Lords raised the issue of whether access to the chamber for the recording of proceedings might lead to intimidation of councillors. Although it is important to be considerate of members of the public who do not wish to be filmed, we believe that an elected representative should not shy away from being held accountable for their words and actions in council meetings. In cases of actual intimidation, there are of course existing laws that prevent any kind of intimidation that would be threatening in nature.

On the recording of decisions, the noble Lord, Lord McKenzie, asked why background papers need to be kept for four years and decision records for six. This is consistent with existing rules contained in the Local Government Act 1972 for decisions taken by members in council or committees. It is also consistent with the 2012 regulations about the openness of council executives.

The noble Lord, Lord McKenzie, also asked about recording the granting of licences. It is right that, where a licence is granted, there needs to be a written record of the decision taken by the officer concerned. It is right that there should be transparency about the granting of such benefits to private individuals. Indeed, such decisions today will invariably be in writing.

I think I have covered all the points that were raised during the debate. I think that I should thank the noble Lord, Lord McKenzie, for the Official Opposition’s support for the regulations, although I was not entirely sure whether he was supporting them or not. However, there is a certain spirit of support for ensuring that we are as open and transparent as possible.

Motion agreed.

Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

16:03

Moved by

[Baroness Stowell of Beeston]

That the Grand Committee do consider the Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments

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

My Lords, this order was laid before the House on 5 June. As the Prime Minister and the Chancellor of the Exchequer both recently reiterated, helping people buy their own home will always be part of this Government’s policy for housing, so I am delighted that the reinvigorated right to buy has already helped over 19,500 households achieve their home ownership aspirations since April 2012.

It is not just about buying but about building. Over £419 million from these right-to-buy sales has been ring-fenced to help local authorities fund new homes for affordable rent. Already, 3,000 new homes for affordable rent have been started on site or acquired by local authorities through additional right-to-buy receipts since April 2012. This includes authorities from across England such as Camden, Birmingham and Cornwall, to name but a few.

When we reinvigorated the right to buy in April 2012 by increasing the maximum cap to £75,000, we committed to keeping the discounts under review to ensure that they remain effective in helping people turn their home ownership dreams into reality. That is why we increased the maximum cash cap for social tenants in London to £100,000 in March 2013 in recognition of the unique nature of the housing market in London. It is why we are proposing, through a separate order, to increase the maximum cash caps annually in line with the consumer prices index rate of inflation, and it is also why we propose, through this draft order, to increase the maximum percentage discount available for houses across England from 60% to 70%.

This change, if it is approved, will provide tenants with a clear message about the discount levels available for all eligible tenants. It will ensure that those living in houses will be able to accrue the same maximum percentage discount as that available to those living in flats. Long-term tenants of houses will benefit from this policy—often those who have committed to the area for 30 years or more. Affording them the same opportunity to access up to the maximum percentage discount of 70%, just as their peers living in flats can, gives them every opportunity possible to achieve their home ownership aspirations and leave a legacy for their families. The revenue from additional sales will be ploughed back into delivering new affordable homes for rent.

The draft order also includes important transitional provisions, which will apply for this year only, to ensure that no eligible tenant currently in the right-to-buy application process misses out. Equally, however, we are mindful that some people who are near to completing the purchase of their property may not want to take up the new discounts, and the draft order will allow them to opt out if they wish.

We have listened to representations from social tenants who have asked to be allocated the same equality of opportunity as their friends and neighbours who are able to buy flats. My officials have also spoken to the Local Government Association and the National Housing Federation, as well as to social landlords.

Bringing parity between the maximum percentage discounts for all properties, combined with the changes we are making to increase the maximum cash caps, is the right thing to do to help more social tenants exercise their right to buy. I commend the order to the Committee.

[Lord McKenzie of Luton (Lab)]

I again thank the noble Baroness, Lady Stowell, for her clear introduction of this order, which deals with the maximum percentage discount. There are separate arrangements dealing with the change to the cap. The Labour Party supports those who want to buy their own home, which is why we support the right of tenants to buy their council home, including the preserved right to buy. However, at a time of national housing crisis, we do not want to see the stock of council homes diminished.

The Government have claimed that homes sold through the right to buy will be replaced one for one. Indeed, in March 2012, Reinvigorating Right to Buy and One for One Replacement stated:

“For the first time, every additional home sold under Right to Buy will be replaced by a new home for affordable rent”.

I shall probe that proposition a little.

The Government’s figures appear to show that currently for six homes sold, only one has started to be built. The evidence of the LGA during the passage of the Deregulation Bill was that in many local areas one-for-one replacement simply is not possible. As the LGA also made clear, replacement homes are not necessarily like for like. The rents in replacement homes will be higher, meaning the rents are unaffordable to many tenants and will increase the housing benefit bill. The houses are not necessarily the same size and may not even be in the same area. The LGA also expressed concern about the impact of these arrangements on councils’ business plans.

I shall ask the Minister a few questions. For a start, can she clarify the position of those who are deemed to underoccupy their social housing and who would, if they are on benefits, currently be subject to the bedroom tax—or, in the Government’s terms, have their spare room subsidy withdrawn? Should somebody exercising the right to buy and underoccupying their property be eligible for the full discount? Can the Minister confirm that, although the information we have before us for this order refers to the need to have at least five years as a public sector tenant, the Deregulation Bill reduces this qualifying period to at least three years? Assuming that the Bill is secured by the Government, it will provide that the qualifying period is to operate from a date determined by the Secretary of State. Can the Minister let us know what the Government’s intention is in respect of the starting date of those provisions? If this provision takes effect, will the starting discount rate still be 35%, with the additional 1% accruing after three years rather than after five years?

The assumption about the ability to replace one for one is that it would be at an affordable rent. Can we have an update on the definition of affordable rent in these circumstances? How does this replacement work where the sale is through preserved right-to-buy arrangements or previous stock transfers? Can we understand how many of the current sales are under preserved right to buy rather than the normal routine arrangements?

As for the changes that have taken place, there are changes to the cap: there will be CPI uprating of the cap—the qualifying period is going to be reduced to three years—and there is this change to the maximum discount. What are the estimates of the take-up that each of these changes has generated, and the estimates of the number of replacement homes? More specifically, I am trying to understand the financial model that drives the replacement arrangements—and, in a sense, who makes the decision. Is it always the council?

If we are talking here about a council that has sold the house and is in the driving seat in determining the nature of the replacement, in what circumstances is there wider provision by and engagement of government in the process? Having had one read of the documentation that was produced, it is less than clear to me. It is one of those issues that requires quite a lot of study. If the Government’s contention is that there is going to be one-for-one replacement, who is driving that? Who makes the decision about the nature of the replacement—the nature of the property that is going to replace the one that is sold—or its specific location? Is that primarily always the local council? At what stage is there a national or central input to that decision-making?

As I said, we will not oppose this order but we are seeking to understand how real the commitment is to one-for-one replacement, which we think is a very important part of the right to buy.

[Baroness Stowell of Beeston]

My Lords, I am grateful to the noble Lord, Lord McKenzie, for clarifying that his party supports the right of people living in council homes to buy them. This is something that we feel very strongly about. It is an important right that we want to see more people have the opportunity to exercise than has been possible over the past few years, because the reduction in discounts had rather diminished the number of houses that were being sold to people. We wanted to change that, because we believe that owning your own home is an important aspiration for people and we wanted to make sure the opportunity was widely available to as many people as possible.

16:15

In reinvigorating right to buy we wanted to ensure that we use the money raised from the sale of those homes, where they were in addition to the number of homes that we would have expected to be sold under the previous scheme, to fund the construction of new homes. We feel strongly about that. I have reminded the noble Lord before that in the four years of this Government we have seen more council homes built than in the previous Government’s full 13 years in office. We are trying to ensure that we both increase those homes and at the same time provide people with these opportunities.

The noble Lord asked me specific questions about where we are with those sales and I will give him a few specifics in response. The total number of council-owned properties sold to date under the reinvigorated scheme—in other words, since this Government came to power—is almost 17,200. However, in 2012-13 nearly 2,500 households bought their homes under the preserved right to buy. Therefore that brings the combined number of sales to 19,500, which I mentioned in my opening remarks. Therefore the total so far is at 19,500, of which 2,500 is preserved right to buy.

Under the reinvigorated right to buy, local authorities are able to keep the receipts from additional sales to pay off debt and fund replacement affordable housing. Since April 2012 the sales have generated a total £1 billion gross income. About £420 million of that total has been generated from additional sales receipts. That money is being recycled directly into providing new, affordable houses for rent. It is early days, but since April 2012 just under 3,000 dwellings have been started on site or acquired through the receipts from right to buy.

An important point to make to the noble Lord is our commitment that the money raised from the sales from the reinvigorated scheme must be realised within three years from point of sale. Therefore there is a lag. We did not commit at the time that the point of construction would immediately follow point of sale: there is a three-year period. However, we are closely following that.

The noble Lord also asked about decisions on the construction of new dwellings under this scheme and where decisions lay in terms of where they would be placed. Because the moneys raised from sales go back to the same local authorities responsible for selling those homes, it is for the local authorities to take decisions on the replacement homes.

The noble Lord asked me about affordable housing and affordable rent. Before I respond to his question on the definition of affordable rent, it is worth pointing out that in addition to the new homes that have been built from the receipts of sales of council housing, we have also delivered almost 200,000 affordable homes since 2010. Therefore, a combination of affordable housing and council housing is coming on stream, which is very important.

As regards the definition of affordable rent, the simple response is: up to 80% of market rent in the area. That is our definition of affordable rent. It is also worth making the point that if somebody is on housing benefit and is not able to cover the cost of their rent, having access to affordable housing rather than social housing is not in any way detrimental to them—so being placed in a home that is designated as attracting affordable rent, if somebody is in receipt of benefits, is the same as for those who are in social housing.

The noble Lord asked whether I could give estimates of the take-up in the light of these changes. The change, taken together with other right-to-buy proposals currently before Parliament, will help nearly 11,000 tenants who are expected to benefit from these changes over the next three years. He also asked about the measure in the Deregulation Bill. He is right to highlight that one of the changes we are making alongside that through this order and the other order to which I referred earlier, is to reduce the point at which somebody is eligible to purchase to three years rather than five. As no further information seems to be coming forward, I will have to write to him on his specific questions about the starting date and the 1% extra and when it kicks in—whether it is after three years or not. I think that covers most of the points that the noble Lord made.

[Lord McKenzie of Luton]

Before the Minister sits down, may I return to the issue of numbers? I thought I heard her say that the issue of one-in one-out applied to additional housing sales. Is that right or are we talking about the total sales here, minus perhaps the preserved right-to-buy disposals?

[Baroness Stowell of Beeston]

We have always been very clear that the right-to-buy scheme is about generating money that is used to construct replacement homes. The money comes from the sale of houses under the reinvigorated scheme. We are committed to that. As the noble Lord acknowledged, both his Government and my Government previously did not make that commitment to take steps formally to use receipts from housing sales to build new social housing. This Government have made that commitment but we said specifically that we would do so on the basis of the additional homes resulting from sales under the reinvigorated scheme.

[Lord McKenzie of Luton]

I am not sure that that was clear. It was certainly not clear to me that it applied only to additional sales. I took the replacement arrangements to be that every council house that was sold would lead to another one being provided at an affordable rent. If I understand the noble Baroness, she is now saying that that is not the case and that it is a question only of housing under the reinvigorated arrangements. I am not sure how that sits with the additional housing which is above and beyond that which was assumed in business plans and reflected in local authorities’ housing revenue accounts. Which is it? Does the commitment apply only to those additional sales, or additional sales minus the preserved right-to-buy ones?

[Baroness Stowell of Beeston]

All sales of council houses clearly generate income that returns to the Exchequer. That has been the case since right to buy was first introduced. That money will be used for a range of purposes. When this Government came to power, we introduced a reinvigorated scheme to encourage more people to buy their council homes than had done so over the preceding years. We wanted to make it possible for more people to purchase homes. When we did that, and because we knew that it would lead to an increase in purchases of council housing, we said that the money received from the sales of houses that were made available under the reinvigorated right to buy would, for the first time, go right back in full to the local authorities that had sold those properties, and they would have to use that money to build replacement social housing. That had never happened before; that is what is new, and that has been the policy since it was introduced.

[Lord McKenzie of Luton]

Could the Minister explain which houses are deemed to be sold under the reinvigorated right-to-buy arrangements and which are otherwise?

[Baroness Stowell of Beeston]

I think that I will need to follow up this debate with a specific letter that covers some of the specific detail. What has happened in terms of business planning is that, clearly, local authorities were preparing for sales on the basis of the previous scheme. On the introduction of the new scheme, sales have increased; when sales have increased in the light of us reinvigorating the scheme, and there is an increase above and beyond their estimates, the money goes straight back to local authorities. It has never happened before. That money must be used for the construction of new homes.

[Lord Deben (Con)]

May I say how pleased many of us are that we have at least moved to this stage? It means that at least some of the money that goes from selling council houses goes back to building new ones. The trouble is that the Minister is saying, rightly, that this is the first time that this has happened, which is true—but both sides of the House should be pretty ashamed of what has happened before.

The truth is that the sale of council houses, for it to be sensible, should mean that you sell a house to somebody who lives in it and it is therefore not vacant for anyone else to live in, then use the money towards building houses that are not lived in and which new people can move into. At long last, we are doing this. But let us not kid ourselves—neither the Labour nor the Conservative Party has done this before, and that is what was wrong about the whole system. It was supposed to be circular and, as usual, the Treasury pinched the money, under both Labour and Conservative, because the Treasury never changes. So congratulations—and I hope that the Minister will press for all the money to go to local councils for this purpose.

[Lord McKenzie of Luton]

To be fair, I think that, in the past, not all the money was snaffled by the Treasury—I think that 25% went to local authorities. I was not pressing the point to be pedantic, but because it is a very bold statement about replacement to say that you will sell one house and another will replace it. That will be a very important policy, but as we pick away at it we see that it is not quite like that; it does not seem to be every house that is sold that will give rise to this replacement.

I am not sure that we can take the discussion much further, as I think that we need some facts and clarification on this. I would be very grateful if the Minister would write on this and share the answer, because my understanding is that the Government’s position is not as strong as I had understood it to be from the pronouncements that they had made on this.

[Baroness Stowell of Beeston]

I am grateful to my noble friend for his intervention. I am absolutely clear, and I know that the Government have been very clear, in introducing the policy that they did—and as my noble friend has reinforced, this is the first time that it has ever happened; it has not happened before—the change in policy was about ensuring that the money raised through the sales of homes in addition to those that were forecast would go straight back to local authorities for building new homes.

I understand my noble friend’s point about whether there is scope to do more. There is always, of course, scope to do more, but I remind him that we have done more to increase affordable and social housing through a range of different measures than happened under the previous Government. I do not think that I can be any clearer than I have been, but I will none the less commit to review the noble Lord’s specific points and, of course, to follow up this debate in writing with supplementary information.

Motion agreed.

Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

16:31

Moved by

[Lord Bates]

That the Grand Committee do consider the Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments, 2nd Report from the Secondary Legislation Scrutiny Committee

[Lord Bates (Con)]

My Lords, these regulations were debated in the other place on 30 June 2014, and I am satisfied that they are fully compatible with our obligations under the European Convention on Human Rights.

With the labour market growing stronger and increasing numbers of companies able to hire workers, everybody who is able to should be able to share in this recovery by being supported to find, and stay in, work. Over the last four years, the Government have extensively altered the landscape of our employment support services, both in Jobcentre Plus and throughout contracted employment provision.

With the introduction of universal credit and the claimant commitment, there has been a cultural change in the expectations of claimants and a conscious shift towards full-time work search. It is right that we expect claimants to do all they reasonably can to find work, and this can be a full-time activity. At the same time, we are committed to doing what is best to support harder-to-help claimants to prepare for and find work. The Work Programme has been able to transform the lives of those furthest from the labour market. Performance is continually improving, and more than a quarter of jobseeker’s allowance claimants with sufficient time on the programme have spent at least three or six months in employment.

As part of our continuing commitment to supporting people off benefits and into work, the department is committed to continue testing what works best to assist jobseekers who are the hardest to help. This is why the Secretary of State for Work and Pensions announced the supervised jobsearch pilots in October 2013. These pilot schemes will test what works and what does not. We will ask providers to deliver the pilots in five areas across England from autumn 2014 until spring 2015 and will be testing how best to deliver extra support to those claimants who need it. The aim of the pilots is to explore the impact on claimants of daily attendance, supervision and support for job searching. In terms of outcomes, we will look at how different interventions affect jobseeker motivation and confidence, as well as measuring the impact on claimants leaving benefits and moving into employment.

Participants will be referred to a supervised jobsearch for 13 weeks. We expect participants to move off the scheme within this period as they find work, but it is important to consider that these are claimants for whom finding work may take significantly longer than for others, and 13 weeks will give providers a reasonable amount of time to work with them to ensure that the support is effective. This approach will have a positive impact on moving claimants closer to, or into, employment. It will also give us the opportunity to add to our evidence base of what works for those who are among the most difficult to help.

Currently, claimants not yet referred to the Work Programme receive the Jobcentre Plus offer: a flexible and tailored menu of support led by work coaches who can, among other interventions, refer claimants to outside training and provision to address barriers. Claimants at risk of becoming long-term unemployed are supported by contracted providers through the Work Programme. These providers provide support to claimants, making use of local provision and services, and using a “black box” approach, with payment by results for getting people into sustained employment.

We always knew that some people would be returning from the Work Programme. Those who have participated in it and remain on benefits afterwards then receive a period of more intensive support from Jobcentre Plus. Since June 2013, claimants have been referred to the mandatory intervention regime, where advisers have more time to spend with claimants with complex needs. From April 2014, we have rolled out the help-to-work package, which added two other elements of support, on top of the mandatory intervention regime, for Work Programme returners. These were daily work search reviews, which take place over a period of up to three months, and community work placements, where claimants undertake work of community benefit for up to six months. These additional measures have given the clear message that we will not write anyone off and will continue to provide increasingly intensive support the longer that someone is out of the labour market.

The supervised jobsearch pilots will complement these measures we have taken in the current journey by maintaining momentum and motivation at a critical point in the claim. Pre-Work Programme claimants will be referred when they are three months away from a two-year mandatory referral to the Work Programme. This will apply to post-Work Programme claimants following six months of intensive support.

These regulations will allow the department to select and refer certain suitable claimants to participate in the pilots. Claimants will then attend the pilots for 35 hours each week for a 13-week period. Claimants will have to attend for fewer than 35 hours per week if they have any restrictions agreed in their claimant commitment. During this time, they will receive expert support and supervision from providers. This might include help with jobsearch, job goals, covering letters, job application skills and interview techniques. However, the exact provision will vary depending on the claimant’s needs and the individual provider running each pilot scheme.

We already expect claimants to do everything they reasonably can each week to give themselves the best prospects of securing employment. This covers not just work search but a whole range of activity to improve employability. The pilots are in line with this but, of course, if an individual cannot work full time—for example, because of agreed caring responsibilities—then we would expect them to participate in supervised jobsearch only on a part-time basis. Those selected for these pilots will at all times have access to facilities and staff to encourage and guide them along their journey.

None of the claimants eligible for these pilots will be new to the benefits system and will have spent the months prior to referral having their jobsearch monitored and skills levels gauged by Jobcentre Plus work coaches before reaching the point of being considered suitable for this extra support. Everyone goes into a new activity with different skill levels and learning styles, and looking for work is no different. Some individuals will have just emerged from jobs feeling confident in what they need to do and having contacts in the right places. Others may need more comprehensive help, support and guidance in order to seek out opportunities and prepare to present themselves again to prospective employers. This is what we are looking to provide through the supervised jobsearch pilots.

In order to inform the design of the pilots, we ran a supervised jobsearch test bed in Wolverhampton Jobcentre from December 2013 to February 2014. The test bed explored some aspects to inform these pilots, including confirmation that Jobcentre Plus is able to support this system. As a result of what we learnt from Wolverhampton, we have incorporated several elements into the pilots’ design, including: induction sessions to set clear expectations and assess individuals’ abilities; basic IT training; integrating group sessions and one-on-one support to retain claimants’ concentration and engagement; and supporting participants to focus on tailored, quality job applications.

It is right to expect people who are able to work to do all they can to find a job. This Government are committed to supporting people in this ambition. We know that our programme of support works well for most people. Two-thirds of people leave jobseeker’s allowance within the first 12 months, which is the most common work programme referral point. The claimant count has fallen for 19 consecutive months. We know there was support for the very long-term unemployed trailblazer, which ran from November 2011 to July 2012, but for those who reach long-term unemployment and are among the hardest to help, increasing the intensity of support improves their chances of moving into work. We know that jobseekers see the switch to the claimant commitment, with its focus on full-time job search, as something that will genuinely increase their chances of finding employment, while at the same time taking into account their personal circumstances. These pilots will test what can be achieved if we bring this knowledge of what works—tailored support, intensity and full-time activity—together in a way that is sensitive to individual needs.

I conclude by saying that we believe these pilots have potential to improve the employment prospects of those who are struggling in their search for work. That can be done through increased jobsearching ability, heightened confidence, more effective interaction with others and improved punctuality and time-keeping. The scheme has the potential to help people into sustained work, enabling them to increase their independence and build better lives for themselves, their families and communities. I beg to move.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to my noble friend for the lucid way in which he introduced these important regulations. I declare an interest as a non-executive director of the Wise Group in Glasgow, which works in JSA service provision.

I am grateful also to the Secondary Legislation Scrutiny Committee, which looked at these regulations. It does excellent work; it is hard to overestimate the value it brings to some of these very complicated schemes. The committee came to the conclusion that it was not impressed. There are two issues here: the policy behind the pilot and the structure of the pilot—whether that is worth the candle. I want to rehearse some of its concerns, because they are self-evident to anybody who has studied these things. Pilots are very useful; they have played an important role in the past in developing policy and I am sure the Scrutiny Committee accepts that. But how do we expect to get real value out of something that starts on 6 October and ends on 15 April, when we are dealing with the possibility and the opportunity that these regulations provide, as the Minister rightly described, in helping people into sustainable work? In my book, sustainable work is a 12-month contract, with support that a jobseeker can take advantage of from being on benefits into that sustained job outcome. I have severe doubts, as does the Scrutiny Committee, that we will get anything of value in what I think is insufficient time. Why are we stopping on 15 April? Obviously, there is an election. I can see that coming—I am not that stupid. However, it is more important to get this policy right than to have niceties about purdah or any other technicality of that kind. I have serious doubts about what value we will get from the shortness of the period of the pilot. Indeed, client groups of 3,000 are not that useful, either. Before the debate started the Minister helpfully handed us a long list of exclusions of clients who cannot be included.

We have a very limited pilot here, and I think we could have had a much more useful opportunity to test some of these things. We have very minimal information about what will actually happen. Jobsearch is something that, if people have been in the Work Programme, should have been deployed for two years—and intensively, I would like to have thought. Now we have supervised jobsearch, which comes six months after two years so it will be really intense. The new system of Universal Jobmatch—which I have seen; it is very good—takes only about half an hour to prospect for jobs across the United Kingdom, because it is so efficient. This is a full-time commitment. People are being mandated to come in for 35 hours a week. How many hours will they spend over a Universal Jobmatch machine? They can get the full value out of it in half an hour, in my experience. It would help me to understand the value of these pilots better if the Minister could flesh out what would be done over this extended period of 13 weeks at 35 hours a week. What on earth are they going to do? We are told at paragraph 7.19 that:

“On day one, the provider must: assess the claimant’s skills and experience”,

et cetera. Then we are told:

“In week one, the provider must: carry out a number of activities with the claimant … On an ongoing basis, providers must: review and update the claimant’s portfolio, CV and action plan”.

These are things that I always assumed would be taken account of in the Work Programme anyway. Now they are doing it full time, for 35 hours a week for 13 weeks. I am in favour of providing support for people, but I do not know how that intense job-searching activity will look different from what they are supposed to have been doing for the previous two years.

I am interested in the pre-Work Programme group, because I do not understand where it came from. There is a logic to involving people who have been in the Work Programme. In any commonsense view, if someone has been unemployed for two years despite being in the Work Programme, in which they get a lot of help, it would suggest that more than their CV needs fixing. I do not know if it is possible to translate those people into the Troubled Families Programme; I hate that term, but the programme is interesting. It takes a holistic view, going beyond the front door of the family home, looking not just at the CV but at everything that is going on. Somebody who has been unemployed for two years despite the Work Programme’s assistance has got some serious issues behind the front door of the family home. It would be much more sensible for some of these people to at least be offered the option of taking a different route from that of looking at a Universal Jobsearch machine for 35 hours every week. That would drive me crazy.

The Scrutiny Committee says that there is scant information about the cost-benefit ratio for this. We have been told that there is a cap of £5,000 per head. I understand that if this is to be competitively tendered for, the department has got to be a bit canny in determining costs for contracts which will be bid for. However, Parliament requires a little more information, particularly given the department’s straitened circumstances, with departmental expenditure being squeezed so ruthlessly.

In passing, the whole-time staff equivalent costs are being substantially reduced. I looked at the annual report which came out a couple of days ago. In 2012, there were over 100,000 whole-time equivalent staff in the DWP. It fell to 98,000 in 2013. It is now 88,000. We are laying extra layers of responsibility on to a smaller cadre of hard-pressed staff. These job coaches will have their work cut out to do the work they already do on top of this pilot. The Minister was helpful in his introductory remarks, but any more information we can have about what will actually be done during this intensive period of job searching would certainly help me a lot.

I am looking at the Autumn Statement 2013, where the Chancellor said that,

“the Government will invest £700 million over 4 years in a new Help to Work scheme”.

He went on set out what that would do. He said it would,

“require all JSA claimants who are still unemployed after 2 years on the Work Programme to undertake intensive, often daily, activity to improve their employment prospects”

Is this part of that? Is this part of the £700 million four-year programme that the Chancellor set out in the Autumn Statement? I would like to know about that because, if it is, it would make it possible to place this pilot in a wider context. I must sit down. I have just realised how long I have been talking for.

My view about conditionality and support for getting people off welfare into work is captured accurately in the study that Paul Gregg did in 2008 for the previous Government. If the Minister will promise to read it at the weekend, I will say no more about it. That is a deal that he had better accept because, otherwise, it will take me another 20 minutes to explain its detail.

There are some opportunities here. I understand that. I am not against sanctions. I think sanctions should be restricted to a much smaller band of people than the 800,000 or 900,000 that we are headed towards. I am prepared to look at this. I know the Explanatory Memorandum states that the results of the evaluation will be published. I hope the Minister will confirm that on the record because that would give it some solidity and be an assurance. I hope this pilot produces something useful. I have great doubts that it will, but I understand why the Government are taking the powers they are taking. I wish the pilot well and I hope it works.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to this order and the noble Lord, Lord Kirkwood, who should not have worried about going on too long. I should apologise because I intend to go on for a great deal longer than that, I fear. My speech will be composed mostly of questions to which—like the noble Lord—I struggled to find the answers. The Secondary Legislation Scrutiny Committee, the noble Lord, Lord Kirkwood, and I have been together wandering around the Palace hunting. I was so much driven by desperation that I even went to watch the House of Commons Delegated Legislation Committee debate these regulations yesterday. I have to admit that that the exercise was slightly more entertaining than it was informative—and it was not actually that entertaining, in truth. It was an attempt to try to find out what was behind it. Yesterday, the Minister did not manage to answer many of the questions, but I have confidence in our Minister who I know will answer them. If he cannot, I ask him to write on any questions that may be outstanding at the end.

The noble Lord, Lord Kirkwood, mentioned the report by the Secondary Legislation Scrutiny Committee. It was interesting reading. It might be worth reading a bit into the record. It commented rather drily:

“While the Committee has in the past commended well-structured pilot exercises as a means of informing policy development, it is unable to do so on this occasion due to a lack of information on how the scheme will work in practice. The Explanatory Memorandum provides minimal information on the pilot scheme and none at all on the cost of the exercise. We found virtually no material in the public domain about this proposal. No evidence is offered on why DWP expects the format and 13 week duration to be more successful than the existing interventions or why a shorter intervention might not be more cost-effective. We understand that the pilots will cost more than the existing programmes to run but not how they are expected to provide value for money, particularly when the candidates selected will be those who have failed to engage with the Work Programme”.

Apart from that, it loved it. It goes on:

“We therefore suggest that, before the House is asked to approve these Regulations, DWP offers … a revised Explanatory Memorandum”.

I discovered this morning that DWP had produced a revised Explanatory Memorandum which was put on the website last Thursday. Will the Minister take back a thought, which is one for all sides to consider? In circumstances such as this, where a department revises an Explanatory Memorandum very late in the day, he might reflect on the best way to bring that matter to the attention of Members of the House who might be interested—which I say, for the purposes of the avoidance of any doubt, would include Her Majesty’s Opposition on occasions such as this. I wonder whether he might consider whether there is any way we could make the communication process work better.

The noble Lord, Lord Kirkwood, asked about context. These pilots were first announced by the Secretary of State for Work and Pensions, Iain Duncan Smith, at the 2013 Conservative Party conference. Their aim was made clear when he said that,

“alongside the Mandatory Work Programme and our tough sanctions regime, this marks the end of the something for nothing culture”.

That is the context. To understand what this is about, it is worth looking at those two other bits of the package because what is happening here is connected directly to the Work Programme.

Its record, as noble Lords will know, is not hugely encouraging. Its performance is inconsistent and it has helped primarily those who are already closest to the Labour market. In another place the Minister of State, Esther McVey, responded on this point by talking about unemployment levels. Thankfully, I know that we have in the noble Lord a Minister who is better able to distinguish between the level of employment and the contribution made to it by the Work Programme, which is carefully evaluated.

While it is good news when anyone gets a job, there are significant gaps in the Work Programme. Over 1.5 million referrals have been made to it but fewer than 300,000 job outcome payments have been made. The success among disabled people is particularly bad, and not much more than one in 20 people on ESA are getting a sustained job outcome. However, the key point is that that means that 477,480 people have gone back to Jobcentre Plus after two years on the scheme. This is over two-thirds of participants who have completed their allotted time. Can the Minister tell the Committee if it is the intention to roll out this scheme, should it be deemed successful, to all of those 477,000 people?

It may be the case—given the piece of paper he handed to us at the start—that once those 11 categories of people who will be excluded are taken out, the number is smaller. If so, by how much? What is the size of the population who would potentially experience this, should it be rolled out? If so, what would that cost? My back-of-envelope maths suggests that at £5,000 a head, the cost will be about £2.4 billion. Are the Government really considering spending that on rolling out this programme to 477,000 people? If not, why are they piloting it?

I am sure that the noble Lord, Lord Kirkwood, is of a more generous spirit than me—which I confess is not always hard—but I am ever so slightly suspicious that it was announced that the Work Programme was not doing well but there was nothing to say what you do to people who get to the end of it. Labour had suggested all kinds of things such as compulsory job guarantees. This scheme is not a good thing, but it is a thing. I will wait for the Minister to correct me, as he often does.

In relation to sanctions, the other part of the package, we have heard a lot of complaints repeatedly from people concerned that jobcentres are being pushed to sanction too many people, or inappropriately. As regards communication, the Minister has a job to do in reassuring the Committee about how the Government will make sure that anyone who is sanctioned is sanctioned appropriately.

There is, however, a serious issue behind this, as the noble Lord, Lord Kirkwood, pointed out. We need to do something to redress the position of those who are still struggling, even after having received considerable amounts of help. The Government could usefully look at a more effective process of assessing jobseekers right at the beginning. Also, the Government’s proposals are not ambitious enough for the long-term unemployed. The Minister knows the Labour approach. We would offer a compulsory job guarantee to any young person out of work for a year, and to anyone else who was out of work for more than two years; basic skills tests; a more devolved model of commissioning; and different support for young people. However, these regulations are what the Government have produced, so I should be grateful if the Minister would tell us why their proposal will make a difference that our kind of schemes will not.

I have some specific questions, and I apologise for their number. As the noble Lord, Lord Kirkwood, asked, can the Minister tell us what people will do for 35 hours a week for three months? Will they all be doing the same thing as one another? Yesterday in the House of Commons, Esther McVey said that the Government were refining and tailor-making support for individuals. How individualised will the programme be? Will all the participants from any one provider be doing the same thing or different things? What range of things will they be doing?

The Minister there also suggested that they would vary according to client need and provider inclination. How then will the Government ensure that provision and supervision will be of good quality? If a provider bids low and does only what the noble Lord, Lord Kirkwood, suggested and keeps claimants in a room with a computer screen and Universal Jobmatch for 35 hours a week, will that pass? It might be value for money because it would not be very expensive, but would it pass the quality threshold? The noble Lord is wrong to think that he would go completely mad; he could probably read the adverts for careers at CosaNostra Holdings several times to amuse himself before he became too bored with Universal Jobmatch; so he need not do it down too much.

Regulation 3(a) states that the scheme is to provide support,

“for up to 35 hours per week over a period of up to 13 weeks”.

Is it the intention to test varying periods and durations, or will everyone be expected to be there for 35 hours a week for 13 weeks?

17:00

Next, who will be delivering the provision? The revised memorandum told us something: there will be a procurement process involving suppliers on the employment-related support services framework. How many such suppliers are on that framework? Are they the suppliers that are already delivering the Work Programme? If they are, and they failed to deliver the Work Programme, why are the Government confident that they will be more successful in dealing with people who have gone through two years on the Work Programme without getting a job? Can the Minister also tell us how many of those suppliers are in the voluntary sector?

The revised memorandum also says that providers will be responsible for travel, childcare, replacement adult care and other additional support costs in line with guidance. Has that guidance been published? Can the Minister assure us that no claimant will be sanctioned for failing to engage as a result of adequate support not being provided to meet those costs? Specifically, could the Minister confirm that that funding will be provided in advance? After all, if someone has been unemployed for two years, it is very unlikely that they will have sufficient savings to allow them to finance the cash flow needed to pay for childcare upfront or possibly even travel costs. Will that money be made available before the costs have to be incurred?

Yesterday, the Minister in the Commons said that people would get four days’ notice of the need to attend the programme, although that would include the time taken for the letter to travel in the post. What happens if a client cannot arrange childcare or replacement adult care in time to turn up—potentially two days after getting a letter? Can the Minister also tell us whether some of the clients on the programme in the test bed had children, childcare needs or other additional support needs? If so, were they given help with travel costs, and was that funded upfront?

The next question is who will be going on this scheme. I listened quite carefully to what the Minister said, which I think was that the pre-Work Programme people would include anybody who was three months off mandatory referral into the Work Programme. Does that mean everybody who was at that point? Will everyone who gets to within three months of referral to the Work Programme be in the pool?

Yesterday, Esther McVey said that people will be chosen who would particularly benefit from this kind of support; as I think she put it, “The sort of people who need motivation and intensive support”. She said that advisers would decide who would benefit from it. The revised Explanatory Memorandum says:

“All potentially eligible claimants will be put into a selection pool”,

and that a randomised control trial will then be run. How can claimants both be carefully selected and be sampled on a randomised control-trial basis? Could the Minister explain how that will work?

Secondly, according to the revised memorandum, claimants who are referred to the pilot will apparently be able to make representations if they feel it would not be suitable for them. Their work coach can then take those into account before deciding whether to refer them. If the work coach ignores those representations, what recourse does the claimant have, if any?

Regulation 5 is very interesting. It provides for claimants to be taken from a group where,

“the Secretary of State is satisfied that the claimant (“C”) is not taking sufficiently effective steps to secure employment (for example, because C is failing to secure job interviews)”.

Could the Minister unpack this a bit? Two different things could be going on. Are these people who are not putting in sufficient effort and are therefore being brought into the scheme or are they people who are not getting results—for example, failing to get job interviews? It is perfectly possible that somebody could be doing all the right things, but not get a job, through no fault of his or her own. Perhaps there are no jobs in their area or no jobs for which they have the right skills. This matters quite a bit. If the Government intend simply to target people who are not doing enough, rather than people who are not getting results, they should say so.

If this is about people who are not getting the results, even though they are doing all the right things for jobsearch, can the Minister explain how the programme is appropriate? The memorandum says that the aim of the pilot is specifically to deliver,

“support and supervision to look for work and improve … jobsearching and application skills”.

If someone is doing all the right things but not getting a job, what is the point of bringing them in to teach them to do the things that they may already be doing well? In those circumstances, will those claimants be brought into the scheme? If they are, will they be given some support other than jobsearch skills? In that case, why are they in the jobsearch pilot?

On selection, are the 11 categories listed here out in the public domain? The Minister may not want to read them into the record, but could he just tell anyone reading Hansard where they might find the list of the 11 categories of people who will be excluded?

On evidence and evaluation, what evidence is there, from the test bed or elsewhere, to suggest that the activities covered by this pilot scheme are likely to be successful in helping its target audiences to move into work? That is one of the questions from the Scrutiny Committee. Pilots will last for 13 weeks, rather than the six months that were mentioned when it was announced at a Conservative Party conference. What evidence did the Government use to determine that 13 weeks was the appropriate period?

In following up the points made by the noble Lord, Lord Kirkwood, on this, can the Minister assure the Committee that the evaluation will be independent—that is, done by somebody from outside the department? Will its findings be published before any further rollout?

On communication, can the Minister confirm that the letters that will be sent to claimants will specify the time and date for all appointments but also tell the claimant precisely over what hours they will be expected to attend? That is particularly important for those who have to make childcare or other care arrangements. Could the Minister clarify that, as there have been issues with that in other programmes in the past?

Finally, could the Minister comment on one other thing? The Child Poverty Action Group suggested that a regulation should be added that provides that the requirement to participate in the scheme will be relaxed if the claimant can demonstrate that they are undertaking an activity that will make it more likely that they will obtain employment than they would under the scheme. Does the Minister find that attractive? I noticed that on the list of people to be excluded that was handed to us were claimants who are participating in voluntary work. In those circumstances, if a claimant was participating in voluntary work, does that mean that any claimant who is doing such work would be excluded from the scheme? Could the Minister clarify that?

It must be right that claimants are given the help and support that they need to get a job, especially after a long period out of work. But if the Government are going to spend some £30 million of public money on a scheme and allow providers to sanction claimants for not engaging with it, Parliament has a right to rather more information than I think has been forthcoming so far. I look forward to the Minister’s answers.

[Lord Bates]

I begin by thanking my noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, for their scrutiny, which compared and contrasted interestingly to the sparks flying and a lot of heat and not much light that took place in the other place when it considered these regulations. I totally accept their spirit of genuine inquiry and the need to flesh out the important issues and details, which we need to get on to the record. At the same time, I ask them to recognise the fact that what we are bringing forward here is a pilot, which in its nature is going to have areas of ambiguity that will be resolved as it takes effect and is rolled out. So a tolerance of that would seem fair.

Another thing should be said and needs to be put on the record. I accept that there is criticism of the Work Programme—but the noble Baroness will accept that there was criticism of the New Deal and even of the Flexible New Deal. The IPPR report came out just last week; it is not normally a champion of government social policy, but it actually said some very positive things about the way in which the Work Programme is going. Of course, 294,000 outcome payments have been paid to providers on the scheme, which suggests that something is happening in the labour market. In addition, at the risk of slightly straying into the territory of the other place, we need to put it on record that there is a changing employment environment. We have employment at record levels in this country and we seeing the number of vacancies increase quite dramatically; it is up 100,000 at 600,000. We are seeing a lot of people getting off benefits and into work; unemployment is down 27%, while youth unemployment is down 33% and long-term youth unemployment is down 39%. So in the interests of balance, one ought to put that record out there, to say that what Her Majesty's Government are doing in trying to help people is not without effect. Therefore, it is progressing.

I turn to the specific points. First, I recognise the sterling work of the Secondary Legislation Scrutiny Committee, which looked at these regulations and commented in a fairly detailed way. It asked that the Explanatory Memorandum be enhanced and updated with a lot more detail, and the department did that. That Explanatory Memorandum was published last week ahead of the scrutiny which is now taking place in Parliament.

The noble Baroness raises a very interesting point about whether there ought to be a mechanism. Whether it is for the House or the Secondary Legislation Select Committee, there should be something that says that when a report makes a recommendation there should be some mechanism for ensuring that people who have a close interest in this—certainly, perhaps, the spokesmen of the respective parties or groups—are systematically made aware. I will take that back to the department, and we will certainly try to respond to it.

Many points were raised. My noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, referred to many of the same issues, and I will work my way down them. On why the power is for 13 weeks and whether that is too long or too short, this is a new initiative and that is why we are testing it. The evaluation will help inform us about whether it is the right length of time to refer claimants to this more intensive activity. The length of the programme gives sufficient time for claimants to adapt and benefit from the enhanced jobsearcher’s routine. It also gives providers a reasonable amount of time to work with claimants to ensure that the support is effective.

I was asked why claimants will be on the programme for a maximum of 13 weeks. We will track them for as long as it takes after they have left the programme, typically for at least six months, to establish the impact of the pilot. I confirm that the pilot is being run on a randomised control basis, which is regarded as the gold-standard methodology for evaluation. I confirm that we will publish the results of the evaluation.

At this point, I turn to my colleagues behind me because the noble Baroness made a very interesting point when she focused on selection and randomised control and asked about the predominant methodology. The pilot we are talking about is a randomised control trial. The type, category and number of individuals will be the overriding methodology that will be used.

[Baroness Sherlock]

Something is either a randomised control trial or it is not. I am going to try to help the Minister here. It is not impossible that what the department is trying to do is select people to go into the pool, and then people from that pool of those deemed to be eligible will randomly be chosen to go into the programme or a control group. If that is what the department intends to do, will the Minister explain how people get to be in the selection pool in the first place? If I have got that wrong, he will of course correct me.

[Lord Bates]

The normally impassive officials behind me are nodding sagely to say that that is indeed the methodology that has been adopted. Advisers will have discretion on those who are eligible for the pool. Let me make a little further progress and perhaps some further inspiration will be on its way.

I was asked how claimants can possibly look for work for seven hours a day and what a typical day will look like. The Select Committee, the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, all asked this. A typical day will be tailored to meet the needs of each individual participant. While there are generic skills that underpin jobsearch activity, participants will have tailored work plans that address their specific needs. They may include work on IT skills, interview techniques and job application skills, which do not just involve visiting the jobsearch website, looking at this person who has been on the Work Programme and has applied for up to 100 jobs without success for two years, and asking what are they lacking that would ensure that they get off benefits and into work, which is the outcome that we all seek. The Government have introduced the principle that looking for work is a full-time job, as has been said.

17:15

On the reference to the Autumn Statement, this was announced as part of the Help to Work package, but the funding is separate. This is being funded by the European Social Fund, which is a matched-funding arrangement, which—to pre-empt a possible question—is why it is happening only in England and not throughout the UK.

I have a helpful note from the Box here: “Paul Gregg summary: will the Minister promise to read answer? Yes”. I take that as a stipulation as to how my own education needs to be enhanced, so I will certainly do that.

On the list of exclusions, the Minister for Employment’s letter, which will be coming shortly, will be placed in the House Library. That will be the mechanism via which those 11 categories will be put on the record.

On the providers being given certain employment officer functions and what checks are made to ensure that sanctions are applied consistently and in the same way as they would be by jobcentre staff, the provider makes the referral. A consideration of whether to apply any sanction, of either a high or a lower level, would be undertaken by a labour market decision-maker; this applies to both Jobcentre Plus and the pilots. The decision must take into account the claimant’s circumstances and any other relevant information to determine whether the claimant has good reason for the failure. In addition, there will be provider guidance in place detailing its role and responsibilities to ensure that referrals are applied consistently.

I have made that point about the Work Programme. As has been said, it is improving results, and I am sure we welcome that. Will it be for all Work Programme returnees? No firm decision has yet been made as to how this will be rolled out. We will need to consider carefully the results of the pilot and which delivery model will provide the best combination of positive outcome, service quality and value for money—hence the reason for the pilot.

How is the random allocation tool applied? Once a claimant has been selected for a suitable pilot they will then be randomly allocated to either the control or treatment group. What criteria will the work coach use when selecting claimants for the pre-Work Programme pilot? What if the claimant does the right thing but does not get a job? We are committed to providing an individualised service, ensuring that claimants get the help that they need at the right time. Guidance supporting work coaches will help them to identify suitable claimants who need additional support and assistance. Ineffective jobsearch does not meaning “unwilling to apply for work”. If a claimant, for example, is applying for many jobs and not getting invited for an interview, this would indicate that their jobsearch is ineffective. In this case, focused support from a supervised jobsearch scheme could support the claimant in improving the quality of their job applications.

Work coaches using their discretion to select claimants for certain programmes is nothing new. Throughout the Jobcentre Plus offer, work coaches will use their judgment to refer claimants to provisions that they think would be most suitable. Is four days long enough to allow a notification to be received? The four days includes time for the post. In the vast majority of cases, we expect the provider to supply the claimant with a notification at the end of the initial interview. Only in a small minority of cases might this be a problem; for example, with formatting, when the provider will send a notification by post.

[Lord Kirkwood of Kirkhope]

One of the experiences driven into my brain while working with the Wise Group is that there is a huge amount of ignorance about what is happening to some of these claimants. Some of that is because the letters sent to them are couched in language that is difficult to comprehend. Will the noble Lord pay special attention to making sure that the Queen’s English is used and that people understand exactly what they are being invited or required to do, and the consequences? The group that the Wise Group works with in Glasgow is often completely at sea about what is happening to them.

[Lord Bates]

We can certainly look at that. One of the reasons why it needs to be tailored, rather than just having a letter generated, is that a lot of those people will have literacy or numeracy problems. They cannot comprehend it, whatever form of English it happens to be delivered in. Therefore the ability to talk that through with someone in person, so that they can explain it at the meeting while giving claimants the formality of the letter, would seem to be the right way to do that.

In terms of how we will ensure quality of service throughout the contract, the majority of the payment made to providers will be based on service delivery. The standards of service delivery will be monitored throughout the contract and payment will be related to providers consistently meeting the required minimum service levels outlined in the specifications. In terms of what will happen if the work coach ignores the claimant’s view that they are not suitable, at the point of referral claimants will be able to make representations if they feel that a pilot will not be appropriate for them. The work coach would take this into account before making a referral. Where the work coach decides that a referral should nevertheless be made, the normal appeal route will be open to the claimant who refuses to attend and is sanctioned as a result.

In terms of varying periods and whether they will all be 35 hours, everyone will be attending for 35 hours unless they are not able to do so because of restrictions. That is the point that was made earlier. We acknowledge that people are caring for other people; for instance, there are parents caring for young children and they might have other responsibilities that are entirely legitimate and need to be built around. Again, that is the reason why it is a tailored and individual approach.

[Baroness Sherlock]

I thank the Minister for answering a great many of my questions. I shall flag up one or two that I think he may have missed. One is the question of childcare and travel costs. Can he confirm that those will be available up front—that people will not have to find the money to pay for childcare and then reclaim it from the provider? On the same point, will the Minister clarify the answer he has just given to the noble Lord, Lord Kirkwood? Is he saying that an individual judgment will be made about whether somebody does not need to do 35 hours because they have other needs or responsibilities, or is he—as I suspect—saying that if somebody is not required to be available full time for work, in a comparable manner they will not be required to be available full time for this programme? Perhaps the Minister can clarify that for the record.

I do not think that he answered the point about whether somebody was engaged in doing something at the suggestion of the Child Poverty Action Group, or if somebody is already engaged in doing something that in fact makes it more likely that they will get a job. With that, can he clarify that anyone doing voluntary work will therefore not be covered by the programme, because that is what the list seems to say?

Finally, will he clarify his answer about the randomised control trial? One of the biggest problems that can befall a randomised control trial is if the selection pool from which people are chosen is itself biased. One of the difficulties in having what is essentially a subjective judgment made by coaches about referring people into the pool is that it does not matter how rigorous the randomisation is from the pool if entry into the pool itself is not biased. Can the Minister say whether the Government have been thinking that through? Do they have any concerns in that direction?

[Lord Bates]

I am grateful to the noble Baroness for saying that there are only one or two issues to cover, which suggests that I have worked my way through the list. I feel as though I am doing well, or, rather, the wonderful officials behind me are doing well.

The point about childcare is a serious one and I want to get my reply on the record. As regards childcare travel guidance, extra costs incurred by claimants will be provided. This is not currently published but has been stipulated in the terms and conditions. The provider is encouraged to consider claimants’ circumstances when awarding this and, if possible, to do this in advance. Good reasons are always considered before applying any sanction, and whether travel costs had been issued would be taken into account.

As regards how the randomised control trial will work, for the pre-Work Programme strand of the pilot, the Jobcentre Plus adviser will first identify suitable claimants, after which they will be randomly allocated to a treatment or control group. I think that I have mentioned that already. The 35-hour period is currently part of the claimant commitment, so that would apply.

As regards the Child Poverty Action Group’s view on charitable or voluntary work, perhaps the noble Baroness would be good enough to send us more information on that group’s recommendation on that.

[Baroness Sherlock]

That group simply asked whether, if somebody was already doing something that made it more likely that they would get a job than by going on the programme, that would do. I am sure that it was not thinking about work experience at a high-level cultural institution, for instance, but I give that by way of example.

[Lord Bates]

I thank the noble Baroness for that very helpful further intervention, which enables me to confirm that those engaged in voluntary work will not need to participate. A work coach will consider any other activity in which the claimant is engaged before deciding what action is taken. I again thank my noble friend Lord Kirkwood of Kirkhope and the noble Baroness, Lady Sherlock, for their scrutiny. I hope that this debate has been helpful. I believe that it will make a positive contribution to understanding how we can help some of the hardest to reach people in our society and give them employment, hope and a future.

Motion agreed.

Political Parties, Elections and Referendums (Civil Sanctions) (Amendment) (No. 2) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:27

Moved by

[Lord Wallace of Saltaire]

That the Grand Committee do consider the Political Parties, Elections and Referendums (Civil Sanctions) (Amendment) (No. 2) Order 2014.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments

[Lord Wallace of Saltaire (LD)]

My Lords, the Political Parties, Elections and Referendums Act 2000—PPERA, as we all love to call it—was amended in 2009 to give the Electoral Commission certain investigatory and civil sanctioning powers. Those powers were given effect by the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010, as a result of which the Electoral Commission is able to apply civil sanctions against the criminal offences established in PPERA. The full list of criminal offences that have been so prescribed is available at Schedule 2 of the order, but includes offences such as incurring election expenses without authority, exceeding campaign expenditure limits and failing to record donations appropriately.

The draft order before the Committee for consideration seeks to extend the list of offences prescribed in the 2010 order to reflect changes recently made by the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. I am sure that noble Lords are already aware that Part 2 of that Act amends the non-party campaigning provisions of PPERA. The 2014 Act introduced certain entirely new controls that non-parties must comply with if they wish to campaign during election periods. A non-party’s failure to comply with these new controls currently constitutes a criminal offence. The new controls are limits on targeted expenditure and requirements for weekly donations reports and a statement of accounts.

However, the Act did not provide that the Electoral Commission could impose civil sanctions for breaches of these new rules. Under the Act, a breach of these rules would be considered a criminal offence only. However, the Government believe that a civil sanctioning power in respect of the new offences created by the 2014 Act should be made available to the Electoral Commission. This would be in line with the existing approach to the other offences in PPERA. To enable the Electoral Commission to apply civil sanctions to the new offences created by the 2014 Act, an amendment to the original 2010 order is required, which is what this draft order does.

I will make one further point, which is that it is not proposed that civil sanctions should apply to all the new offences created by the transparency of lobbying Act. Those offences known as “false declaration” offences are not prescribed by the 2010 order, and the order under consideration today does not amend this. False declaration offences are those where a person knowingly or recklessly acts in a way that contravenes the legislation. It is appropriate that such offences remain liable only to criminal prosecution, and the Government do not therefore intend to prescribe the new false declaration offences created by the 2014 Act either.

I assure noble Lords that the regulator, the Electoral Commission, has of course been consulted on the order. The commission supported the policy intention of making civil sanctions available for these offences. If the Motion is agreed, then the order will be made and come into force on 19 September. That is the start of the regulated period for non-parties campaigning in the 2015 parliamentary general election. I beg to move.

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Lord, Lord Wallace of Saltaire, for introducing the order. I say at the outset that we fully support it and I shall not detain the Grand Committee for long. Civil sanctions are a good way of dealing with breaches such as those listed in the order. I was until recently a member of the Electoral Commission, and saw at first hand how civil sanction powers helped make sure that breaches by the parties were dealt with more effectively.

The only thing I would say to the noble Lord is that these powers must be applied proportionately. In some cases, there may be mitigating or aggravating circumstances when dealing with issues. So far, the commission has been good at dealing with them proportionately. I have heard of many cases in which parties gave good reasons for what had happened and were dealt with fairly. I remember one party—which has no representation whatever in either House—that would not comply in respect of its accounts. An official dealt with that party very skilfully, and the powers of sanction were helpful in getting it to comply and file its accounts properly.

I shall leave it there. I am very happy to support these measures. All I would say is that proportionality is important, and the Government should always keep that under review when dealing with the commission.

[Lord Wallace of Saltaire]

I thank the noble Lord for that. I remind him and anyone else who may read this that the legislation was aimed at the non-party campaigners that have registered in the past two elections. This order gives greater flexibility to the Electoral Commission, which we entirely agree is a well organised and well functioning organisation.

European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Iraq) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:34

Moved by

[Baroness Warsi]

That the Grand Committee do consider the European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Iraq) Order 2014.

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)]

My Lords, we are today considering the draft orders for partnership and co-operation agreements—PCAs—between the European Union and its member states and four countries; namely, the Republic of the Philippines, the Socialist Republic of Vietnam, Mongolia and the Republic of Iraq.

The purpose of these draft orders is to declare the PCAs to be EU treaties as defined in Section 1(2) of the European Communities Act 1972. They provide a framework for political dialogue and further engagement between the EU, EU member states and each of these four countries in areas including: trade and investment; education, culture and environment; health, science and technology; justice, migration and human rights; and counterterrorism and counterproliferation. Respect for democratic principles, transparency and development are all essential elements of the agreements.

The draft orders that we debate today are a necessary step towards the UK’s ratification of these PCAs and, indeed, the treaties themselves are a necessary precursor to future EU free trade agreements with any of these countries. We have a strategic interest in developing our and the EU’s relationship with Vietnam, the Philippines, Mongolia and Iraq. While we recognise that progress in some areas is slow and challenges remain, we also believe that it is right to recognise the advances made in many areas in these countries including, for example, in the Philippines, which is the fastest growing economy in south-east Asia and too important to be ignored.

HSBC estimates that the Philippines could grow to be the 16th largest economy in the world by 2050. It is a vibrant, stable democracy with a leading role to play in ASEAN and, as the Administration of President Aquino has shown, in bringing peace and stability to the region. The UK is the largest investor in the Philippines, but there is potential for more, and now is the right time to deepen engagement. It is an emerging power, both economically and politically, with which we are keen to work more closely in order to make the most of the promising opportunities for both countries.

Vietnam is also a fast growing economy, an increasingly strong regional force and an important trading partner. The Vietnam PCA supports our bilateral strategic partnership signed in 2010 with Vietnam. It will provide a solid basis upon which we can strengthen ties between the EU and Vietnam, and will also provide the UK with an additional diplomatic tool with which to pursue complex and politically sensitive objectives, including on human rights, which continues to be of concern in Vietnam.

The UK has a strong and long-standing relationship with Mongolia. We celebrated 50 years of diplomatic relations last year. Mongolia shares our values in many areas. It is a member of the Organisation for Security and Co-operation in Europe and a valued contributor to peacekeeping forces in Afghanistan and South Sudan. Mongolia’s “third neighbour” foreign policy seeks to build friendly relations with countries such as the UK in its desire to diversify beyond its two heavyweight neighbours, China and Russia. The PCA would encourage the removal of restrictions to trade and promote measures to improve transparency, thereby helping to build British businesses. It will also support our ongoing work with third parties to embed democratic practice, good governance and respect for human rights.

Finally, I turn to Iraq. Despite the current violence, our hope remains that it will become a stable, prosperous country which plays a constructive role in the region. Greater engagement by both the UK and EU will allow it fully to realise that potential. Iraq successfully held parliamentary elections on 30 April, the third under the 2005 constitution, which demonstrates the commitment of its people to choosing their Government, despite the serious challenges the country faces. Increased co-operation through the framework of the PCA will also help to address many of the underlying causes of the current crisis, such as lack of jobs and access to education and basic services, as well as ensuring confidence in the security and justice systems and respect for human rights.

There is more that the Philippines, Vietnam, Mongolia and Iraq still want to do, and much that we want to encourage them to do. It is important that we continue to seize opportunities, through frameworks such as these agreements, to enable stable, sustainable and democratic states to flourish.

Although all these treaties have been signed, they will enter into force only once all 28 member states of the European Union and the Republic of the Philippines, the Socialist Republic of Vietnam, Mongolia and the Republic of Iraq have ratified them and the EU itself concludes the agreements.

Noble Lords will be aware of the recent European Court of Justice case regarding the Philippines PCA. In some ways, the judgment changes little: the UK will still be bound by the entire agreement once it is concluded either in its own right or as part of the EU, as was always going to be the case. However, the case raises some broader questions as to exactly how the UK is bound and the question of the opt-in. I take this opportunity to assure noble Lords that we are urgently considering these issues.

In conclusion, with specific regard to these PCAs, other countries’ ratification and parliamentary processes are in train. The agreements serve the interests of the UK, as well as the EU, other member states and the four countries concerned. They lay the foundation for stronger, mutually beneficial ties for the future. I commend them to the Committee and I beg to move.

[Baroness Morgan of Ely (Lab)]

I thank the Minister for that introduction. Developing co-ordinated agreements between the EU and other individual countries is just one of the many benefits of EU membership. Rather than the UK Civil Service spending hours on end developing bilateral relationships with countries around the globe, the EU uses all its combined political clout to negotiate more favourable terms using the political weight of 28 member states. That bargaining power is so much stronger than a bilateral dialogue.

The purposes of partnership and co-operation agreements are to provide a framework for political dialogue, to help strengthen democracies, to encourage the transition to a market economy and to encourage trade and investment. It is often a precursor to a closer trade agreement, which may or may not develop in the longer term.

Free trade is generally considered to be a good thing, and benefits both parties. Under these agreements, countries will accord to one another most-favoured-nation treatment. Nevertheless, it is important that, where possible, we ensure that those benefits are fairly distributed within those countries and that wider questions of human rights and democracy are respected.

Today, here in Parliament, we have an opportunity to determine whether we agree with the negotiation which has been thrashed out on our behalf by the European Commission: a demonstration that this is not a fait accompli until Parliaments across the EU have given their blessing. It is therefore not being imposed upon us in any shape or form. That is a message that we need to ensure that the public hear, loud and clear.

The orders in relation to the countries today and the kinds of areas that are covered were outlined by the Minister. Crucially, in these extremely testing times for Iraq and its authorities, the partnership agreement with Iraq refers to help in facilitating and supporting its stability and regional integration. That is much easier said than done. Al-Maliki’s pronouncement last week has done nothing to give us confidence that he believes in regional integration, despite the pronounced threat by ISIS forces to the stability of his country. What remained of the economy was largely shattered by the 2003 invasion and the subsequent violence. Attacks by insurgents on Iraq’s oil infrastructure have cost the country billions of dollars in lost revenues. Can the Minister therefore explain how the proposed agreement could be implemented in the light of the current security situation?

Since 1990, there has been a transformation in the way that Mongolia has been run, with the introduction of elections and privatisation. However, the withdrawal of Soviet support triggered widespread poverty and unemployment. Nevertheless, there is great hope for the country as it is now one of the world’s fastest growing economies. Its economy increased by 17% in 2011, driven in large part by investment, particularly from its Chinese and Russian neighbours, who are, of course, anxious to get their hands on the vast quantities of untapped mineral wealth.

There is, however, real concern about corruption in the country and it is surprising, perhaps, that this is not a more notable feature of this agreement, as European investors will need to be assured that their investments are secure. Will the Minister explain how this agreement will ensure that the benefits of strong economic growth will be shared more fairly by the whole of the Mongolian population? What pressure can we bring to bear on that?

We all remember the devastating pictures which appeared on our screens in 2013, when Typhoon Haiyan hit the Philippines. The EU was only just establishing and still recruiting for its European External Action Service and was slightly criticised for being slow in its response despite not having much in terms of infrastructure or staff in place at the time. Will the Minister explain how this agreement will help to develop and support the reconstruction efforts following the typhoon? The Philippines also has its own internal political threats. Terrorism attacks by the radical Islamist Abu Sayyaf group, which is linked to al-Qaeda, are frequent in some places. Guerrilla campaigns by the communist New People’s Army were commonplace in certain parts of the country.

The Philippines is perceived as one of the most promising newly industrialised countries, with its export economy moving away from agriculture into electronics, petroleum and other goods. The Philippines has a population of about 96 million people. It has one of the highest birth rates in Asia, and forecasters say the population could double within three decades. However, many leave the country and much of the economy, in the south in particular, is held afloat by remittances sent by people based overseas.

Finally, I turn to Vietnam. It has a population of about 89 million people and remains a one-party communist state. It has one of south-east Asia’s fastest growing economies. Private enterprise is allowed and investment, in particular from the US, has increased, while the country joined the World Trade Organisation in 2007. Of all the countries we are discussing today, Vietnam is the one I have most concerns about in terms of ensuring that any economic benefits of this agreement are felt by the whole population and are fairly distributed. My understanding is that, despite pursuing economic reform, the ruling Communist Party shows little willingness to give up its monopoly on political power.

I am extremely concerned about the situation in relation to human rights in the country, in particular about the treatment by the Government of the ethnic minority hill tribe people, the Montagnards. Amnesty International has voiced concerns in relation to fair trials, so how we can ensure that abuses are monitored and reported upon? What sanctions will occur if this aspect of the agreement is not respected?

Will the Minister also explain whether we can do anything in this agreement to ensure that firms with suspected links to slavery in these countries are rooted out? If the Minister can answer these questions satisfactorily, then my party will support all the proposed partnership and co-operation agreements.

[Baroness Warsi]

My Lords, I thank the noble Baroness for this interesting debate. She has raised a number of interesting questions in relation to the specific countries. I will deal with them in turn, starting with Vietnam.

The PCA contains a commitment by Vietnam to respect human rights as well as obligations in other areas such as counterterrorism and weapons of mass destruction. Vietnam is a country of concern in the FCO’s annual human rights report, and the PCA will provide an additional channel through which we can pursue UK objectives on human rights. We will continue to raise our concerns with the Vietnamese Government through the biannual EU-Vietnam human rights dialogue and also bilaterally, but this agreement provides us with a further opportunity to do that and raise the very issues to which the noble Baroness has referred.

Our relationship with the Philippines will focus on three key areas: prosperity, including trade and investment; continuing engagement on the Mindanao peace process; and a foreign policy that continues to be closely aligned to the UK’s. We will of course encourage the Philippines, as an emerging power, to become a responsible global player and to use its influence within ASEAN. The PCA will enrich our political engagement with the Philippines, including by consolidating co-operation on democracy, governance and human rights. As the Foreign Secretary has said, human rights and the rule of law are essential tools and indivisible from our national foreign policy objectives. The work in relation to the disputes within the Philippines could again form part of the discussions under the PCA.

The noble Baroness made an incredibly important point in relation to Iraq. Despite the recent instability and the current security crisis, we still believe that Iraq has considerable resource and potential which the international community should help it to realise for both for Iraq’s own interests and for the interests of stability and security in the region. The PCA is the centrepiece for EU and member state involvement with Iraq, and it underlines the EU’s determination to play a significant role in Iraq’s transition. The crisis in Iraq should not prevent us proceeding with ratification of the PCA. Rather, increased co-operation through the framework of the PCA will help us to address many of the underlying causes of the current crisis.

We welcome the PCA relating to market access in Mongolia, in particular through the removal of restrictions to trade and through measures to improve transparency, which was a specific issue raised by the noble Baroness. The PCA also includes provisions for the protection of the EU’s financial interests, which is of particular interest to the UK. The PCA will also help our current work with NGOs and government agencies to embed democratic practice, good governance and respect for human rights, and it will encourage action on climate change.

In conclusion, these draft orders provide us with an opportunity to enhance engagement between EU member states and the Republic of the Philippines, the Socialist Republic of Vietnam, Mongolia and the Republic of Iraq across a broad range of areas. They are testimony to the growing importance of EU links with these countries, and they have the potential to raise relations to a new level. These agreements give us the opportunity further to develop stronger ties and common approaches to global challenges. Further engagement with the Philippines, Vietnam, Mongolia and Iraq can help to make the most of the wealth of opportunities that lie in greater trade and investment links. It is also important to continue to strengthen our ties with these countries in response to emerging and constantly evolving security challenges while also remaining true to our core values.

As I mentioned previously, wide-ranging engagement with Iraq will enable us to assist the new Government, once formed, in addressing many of the political causes of the current instability and building, it is hoped, a more stable country in the future. The PCAs will all help to support our efforts to improve the human rights situation and to promote the principles of democracy and the rule of law in each of these countries.

I thank the noble Baroness for her support, and I commend the draft orders to the Committee.

Motion agreed.

European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Mongolia) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:52

Moved by

[Baroness Warsi]

That the Grand Committee do consider the European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Mongolia) Order 2014.

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments

Motion agreed.

European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Philippines) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:52

Moved by

[Baroness Warsi]

That the Grand Committee do consider the European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Philippines) Order 2014

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments

Motion agreed.

European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Vietnam) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:53

Moved by

[Baroness Warsi]

That the Grand Committee do consider the European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Vietnam) Order 2014.

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments

Motion agreed.

Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (Chartered Institute of Patent Attorneys and Institute of Trade Mark Attorneys) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

17:54

Moved by

[Lord Faulks]

That the Grand Committee do consider the Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (Chartered Institute of Patent Attorneys and Institute of Trade Mark Attorneys) Order 2014.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments.

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, first, on the designation order, the purpose of the order is to designate the Institute of Chartered Accountants in England and Wales—ICAEW—as an approved regulator under the Legal Services Act 2007 for the reserved legal activity of probate activities. I should also say that, if this is approved, a further order will be laid in the near future to designate the institute as a licensing authority for probate activities, which will mean that it will be able to license alternative business structures. This should help to promote increased competition and innovation in the legal services market.

The Legal Services Act 2007 established a new regulatory framework for legal services. Among the key aims of the Act was to deliver a more effective and competitive market. The Act contains eight regulatory objectives which include protecting and promoting the public interest; protecting and promoting the interests of consumers; and improving access to justice. The Institute of Chartered Accountants in England and Wales is a regulator and professional membership body for the accountancy profession in England and Wales. It provides leadership and practical support to its UK and international members and professional standards are maintained through working closely with Governments, regulators and the industry. It also undertakes education and training to support students studying to become chartered accountants.

The institute applied to the Legal Services Board in December 2012 to be designated as an approved regulator for probate activities. It also applied simultaneously to be designated as a licensing authority for probate activities. During 2013, the Legal Services Board very carefully and rigorously tested the institute’s proposals against the criteria in the 2007 Act. The Legal Services Board has also taken care to assess that the institute has both the capacity and the capability to undertake a regulatory role in the legal services sector. The board took advice from the mandatory consultees, as required by the 2007 Act. These are the Lord Chief Justice, the Legal Services Consumer Panel and the Office of Fair Trading—now the Competition and Markets Authority. The board additionally consulted the Financial Reporting Council and the Insolvency Service.

The Legal Services Board took care to ensure that the governance arrangements proposed by the institute are suitably robust in ensuring that its regulatory arrangements are independent from its representative functions, which is a key element of the 2007 Act. This is an important point, on which concerns were raised during the consultation, but the board has tested this issue and is fully satisfied that the arrangements that the institute has set out for its new probate committee will allow it to exercise the regulatory functions in a way that is not prejudiced by the institute’s representative functions. The Legal Services Board is fully satisfied that the institute has in place the safeguards required to regulate authorised bodies and protect the providers and users of such bodies. The Government accept that assessment.

The Government recognise the importance of the legal services market and want to encourage its growth. We believe that designating a new regulator, which has the appropriate safeguards for consumer protection, will help to achieve this. As for consultation, some issues were raised when the proposals were consulted on. The then Lord Chief Justice had long-standing general concerns that regulatory competition would have a detrimental effect on standards. The Legal Services Board was aware of these concerns and addressed them by setting out how the 2007 Act aims to achieve a more effective and competitive market, thereby improving standards. The Legal Services Consumer Panel strongly welcomed the application by the institute but was concerned that the institute was initially not proposing to have a majority of lay members on the probate committee or disciplinary committee. In response to the panel, the institute redrafted its regulations so that the probate committee was made up of a majority of lay members. The Office of Fair Trading had no objections. The Law Society wrote to the Legal Services Board to express concerns, in particular, as I have already noted, about the governance arrangements being proposed by the institute. The Legal Services Board copied this letter to the institute, which responded in detail to all the concerns that the Law Society had raised. The LSB was content with the response and the governance arrangements.

As I have also already mentioned, the Legal Services Board consulted the Financial Reporting Council and the Insolvency Service. Both the Financial Reporting Council and the Insolvency Service noted that the institute takes its regulatory responsibilities very seriously and supported the applications.

I appreciate that some might argue that the Government should not be pressing ahead with this and that an accountancy regulator should not be permitted to regulate legal services. Some may even suggest that there will be a lowering of standards, or a diminution of consumer protection. We do not accept these arguments. The Legal Services Board is satisfied that there will be no lowering of standards or lessening of consumer protection, and the Government agree. I am satisfied that the Institute of Chartered Accountants in England and Wales will be a highly capable and effective regulator in the legal services market. Its entry to this field will help contribute to the growth of the legal services market and bring further innovations, leading to benefits to consumers of legal services.

I turn now to the appeals orders. Noble Lords may be aware that the licensing regime for alternative business structures, as contained in the 2007 Act, became operational on 6 October 2011. In brief, alternative business structures are bodies that carry on reserved legal activities and are partly or wholly owned or controlled by non-lawyers.

In relation to that regime, as I have said previously, the ICAEW has applied to the Legal Services Board to be designated as a licensing authority. The Chartered Institute of Patent Attorneys—CIPA—and the Institute of Trade Mark Attorneys—ITMA—also made a joint application to the Legal Services Board to be designated as licensing authorities. Members of the Committee may be aware that the Legal Services Board made recommendations on 6 December, and earlier this year the Minister responsible for legal services agreed to make the following orders designating the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys and the Institute of Chartered Accountants in England and Wales as licensing authorities under the Legal Services Act 2007.

In accordance with that Act, before CIPA, ITMA and ICAEW can be designated as licensing authorities by order of the Lord Chancellor, it is necessary for there to be an appellate body with the power to hear appeals against its decisions made in relation to alternative business structures.

The purpose of these orders is to make provision for the First-tier Tribunal to act as the appellate body for the purpose of appeals from those three bodies in their capacity as licensing authorities. As required by the 2007 Act, these orders are made on the recommendation of the Legal Services Board, following public consultation.

In summary, the two appeals orders make provision: for the First-tier Tribunal to have the power to hear appeals from the decisions of ICAEW under Part 5 of the 2007 Act and its licensing rules and to hear appeals from the decisions of CIPA and ITMA, acting jointly or separately, under Part 5 of the 2007 Act and their licensing rules; for the orders that the First-tier Tribunal may make on appeals from decisions made by those bodies under their licensing rules; and for modifying the Legal Services Act 2007 so that these appeals fit into the existing structure of onward appeals from the First-tier Tribunal to the Upper Tribunal.

These orders have been brought before the House at the earliest opportunity, following recommendations from the Legal Services Board on 2 May. If approved, the orders will provide individuals and businesses that are subject to licensing decisions of the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys and the ICAEW with an opportunity to appeal those decisions through an independent and impartial appellate body. I beg to move.

[Lord Beecham (Lab)]

My Lords, having safely navigated the rather stormy waters of the Second Reading of the Criminal Justice and Courts Bill yesterday, it is a pleasure to renew acquaintance with the Minister over these crucially important statutory instruments. One or two questions occur to me about them.

The first is that we are talking effectively about alternative business structures, which are clearly well regulated. I do not know whether this is possible, but supposing that within a single alternative business structure you had both lawyers and accountants, what would be the appropriate framework? Would the professional body of which an individual within such a structure might be a member have a jurisdiction? Or is there an overarching mechanism for the structure as a whole as opposed to the individuals who work within it?

Secondly, grants of probate are issued to executors. My understanding is that if the executors chose to employ someone who is not part of a regulated profession, of course none of these safeguards would apply. Is it the intention of either the Government or the relevant bodies—I presume it would certainly be that of the latter, but it would also be sensible for the Government—to promote the use of properly regulated structures for these purposes? Having said that, I mentioned to the Minister before we began this Committee that I know of a solicitor who many years ago charged something like £90,000 in fees on an estate that was valued at just over £100,000. The regulatory body disposed of him in due course, but he was nevertheless guilty of an offence and seriously defrauding his client. The existence of a regulatory body itself does not necessarily mean that everything will be well.

There is one other matter, which may be slightly tangential. I am assuming that other accountancy bodies may be in a position to apply to be recognised for the same purposes as the chartered institute. In that connection, I have some involvement with an organisation called the Association of International Accountants. It is a non-commercial relationship; I just happen to know some of the people involved and I was recently asked to host a dinner in this House in lieu of my noble friend Lord Sawyer, which I did. The organisation is having some difficulties, not in this particular context, but in the more general context of being recognised for certain other purposes. It may not be possible for him to give me one at the moment, but I would like an assurance from the Minister that, if such a body were to apply to be recognised for the same purposes as the chartered institute, the same process that the chartered institute has successfully undergone would be available to it.

There is a feeling on the part of the Association of International Accountants that the two main accountancy bodies in this country—the chartered institute and whatever the appropriate body is for certified accountants—are, in one particular area, effectively operating a duopoly from which this association is excluded. I asked a Written Question about this some time ago, to which I received a not terribly helpful reply from the point of view of the association. An assurance that they would be treated on an equal footing in terms of passing whatever tests are necessary to be included in this would perhaps be of some comfort to them. Having said that, I cannot see anything to object to in these orders and we are perfectly content to see them go through.

[Lord Faulks]

My Lords, I am grateful for the questions that I have been asked by the noble Lord, Lord Beecham, who rightly says that regulation and discipline are no absolute guarantee against unprofessional, to put it mildly, practice on the part of a professional in whatever their particular role is. The Legal Services Board has been given by Parliament the task of approving as a regulator these various bodies. As your Lordships will be aware, the scope of their activities is limited. In terms of protection of the consumer, it was important that the effective arrangements were in place to ensure that members co-operated with the legal ombudsman. The Government also had to be satisfied that appropriate client protection arrangements were in place for any body designated as an approved regulator. The Legal Services Board undertook a detailed analysis and was satisfied with the arrangements of the probate compensation scheme, and the requirement for all authorised firms and accredited probate firms to hold professional indemnity insurance. That should protect someone in whatever particular professional role they perform within an alternative business structure.

In terms of these now multidisciplinary practices, there may well be lawyers working with what one used to regard as an accountancy firm. As I understand it, their work within the accountancy firm would be regulated in the way of the accountancy firm licensed to perform these particular activities, but if they were solicitors, for example, their activities would also be regulated by the Solicitors Regulation Authority as the disciplinary body. In so far as there can be protection for the individual, that will be ensured by these new arrangements.

[Lord Beecham]

In view of what the Minister has said, it is right that there should be professional indemnity insurance but that is basically for professional negligence. Certainly, the Law Society—as I know from the experience of having to contribute to these things—has occasionally to step in, not just in cases of professional negligence but also in cases of dishonesty, to compensate the clients of solicitors. Is it a condition of these bodies being recognised as regulatory bodies that they should assume responsibilities in that context of compensating those who have been defrauded of their entitlement as opposed to in claims for professional negligence? Again, it may not be possible to answer that question now but it would be interesting to find out.

[Lord Faulks]

I think that it would. I would be happy to write further with details about the arrangements. As I understand it, the Legal Services Board needed to be satisfied of the capacity for individuals to be compensated if mistakes were made in non-contentious probate. For historical reasons, probate is a reserved activity; hence the need for this whole process. The Legal Services Board was satisfied about professional indemnity insurance.

If I sound somewhat hesitant, the noble Lord will appreciate that Parliament has designated the Legal Services Board as the regulator. This is not directly the Government’s approval; it is the Legal Services Board’s approval. They have created this body, and the body has gone through the process. The Government have to be satisfied that the Legal Services Board has gone through the necessary process of consultation and satisfied itself of the adequacy of protection, for example, for consumers, and all the other aspects to which I referred in opening, but they do not have a separate governmental role. We do not think that there has been any inadequacy in the process of this approval. Essentially, the Legal Services Board, having been given that task, has satisfied itself. If an individual chooses a regulated person to undertake their probate, they naturally have protection and redress. As the noble Lord says, individuals have the choice of whether to undertake their own probate, in which case they do not, which is a matter of consumer choice. Further to what I said about lawyers and accountants within a single ABS, that will, of course, depend on which regulator licensed the alternative business structure. However, I understand that entity regulation applies over individual regulation, although, as I say, the individual may have some additional professional obligations of the sort that I described.

I do not think that I can answer from the Dispatch Box the other question that the noble Lord asked in relation to international firms. However, I will try to write him a more helpful letter than the one that apparently he received on a previous occasion.

[Lord Beecham]

I am grateful to the Minister for that. However, to be clear, the Association of International Accountants is not just a body of international accountants; it is a body with many UK members and some overseas members as well. It is therefore not operating solely in the international sphere. However, as I say, I am grateful to the noble Lord for his offer.

[Lord Faulks]

I hope that, subject to my providing further information by letter, I have satisfied the noble Lord. The debate has enabled me to put on record the importance of the alternative business structure and of the Government encouraging growth and innovation in the legal services market generally through these means. The order designated the ICAEW as a new approved regulator, which demonstrates our commitment to it. I hope that the debate has demonstrated the importance of the appeals order, which naturally needs to exist to support the effective operation of the ABS scheme. The appeals orders form a key component of the licensing arrangements. I commend these orders to the Committee.

Motion agreed.

Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (Institute of Chartered Accountants in England and Wales) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

18:16

Moved by

[Lord Faulks]

That the Grand Committee do consider the Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (Institute of Chartered Accountants in England and Wales) Order 2014.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments

Motion agreed.

Legal Services Act 2007 (Approved Regulator) Order 2014

Tuesday 1st July 2014 Grand Committee

Motion to Consider

18:17

Moved by

[Lord Faulks]

That the Grand Committee do consider the Legal Services Act 2007 (Approved Regulator) Order 2014.

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments

Motion agreed.

Committee adjourned at 6.18 pm.

House of Lords

Tuesday 1st July 2014 Lords Chamber

Tuesday, 1 July 2014.

14:30

Prayers—read by the Lord Bishop of Oxford.

Children: Television

Tuesday 1st July 2014 Lords Chamber

Question

14:37

Asked by

[Baroness Benjamin]

To ask Her Majesty’s Government whether they have given any consideration to the introduction of a tax credit for live action children’s television productions.

[Baroness Benjamin (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a children’s television practitioner.

[Lord Newby (LD)]

My Lords, the Government are committed to supporting the creative industries and have introduced three new tax reliefs for animation, video games and high-end television. A fourth relief for theatre production is due to be implemented in September. Any proposal for a new relief must be assessed for its effectiveness, wider economic impact, ability to stand up against abuse and the cost to the Exchequer.

[Baroness Benjamin]

I thank my noble friend for his Answer. Children’s television is not part of the success story of the creative industries because, despite the fact that there are about 30 dedicated children’s channels, only 1% of new children’s programmes are made here in the UK; the rest come from abroad. Producers cannot fully fund their UK productions. Children’s television is in terrible need of assistance; it is struggling. Does my noble friend not think that to have a tax credit for children’s live action productions would boost the economy, boost the industry, help with exports and encourage international investment, as it has done successfully for film, drama and animation?

[Lord Newby]

My Lords, I am sure that all those arguments will be deployed forcefully by my noble friend and the industry body, which is about to begin discussions with the Treasury to make its case. The reliefs that we have introduced have led to at least one children’s TV programme—an animation in Wales called “Llan-ar-goll-en”—being granted relief, so the beginnings of relief are already in place.

[Viscount Colville of Culross (CB)]

I declare an interest as a producer at the BBC. Investment by commercial public service broadcasters in original British children’s television has collapsed by 97% in the past decade to a mere £2 million. Is the Minister not concerned by the lack of competition in the market that this is producing and the dilatory effect that it is having on our exports?

[Lord Newby]

My Lords, obviously there has been a considerable reduction in original children’s television production in the UK. There are a number of reasons for this: for instance, the ability of the independent television companies to generate income from children’s television has reduced as a result of restrictions on advertising during children’s television programmes. However, these issues will be put by the industry and considered by the Treasury.

[Baroness Howe of Idlicote (CB)]

My Lords, do the Government think that it is appropriate that the BBC, a public service broadcaster, is the largest buyer of children’s live action TV?

[Lord Newby]

When I look back to my own childhood—it was a long time ago, although I am not that old—the BBC had a pre-eminent role in terms of children's television. It has continued in that capacity and in that role for many decades.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister was in self-congratulatory mood in response to the first Question. Does he accept that the Government’s television tax relief scheme is based on the hugely successful film tax relief introduced by the previous Labour Government? We would now like to know what is the impact so far of the measures that he is commenting on?

[Lord Newby]

My Lords, the noble Lord will know that we changed the basis of film tax relief. But as far as last year is concerned, some £868 million was generated by 37 major international firms making the UK their production base. As far as TV is concerned, the reliefs that we introduced last year—we have figures for only nine months—show that some £276 million worth of production has benefited from the reliefs, of which some 58% is from inward investment.

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords, my noble friend said a moment ago that animation tax breaks had already seen benefits in children’s TV, so is it not self-evident that this should be extended to live children’s TV?

[Lord Newby]

My Lords, the slight problem with that line of argument is that it would open the way to tax breaks on virtually every kind of expenditure. At the moment, as noble Lords will be aware, the Government’s ability to make tax cuts is severely constrained by the overall financial situation.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, does the Minister not agree that that is a counsel of despair? The children’s television that is produced in this country is, generally speaking, of a very high quality. He mentioned earlier that the problem for that sector of the industry is in finding a market. If there were more of it, there might be a bigger market for it overseas as well as in the UK. Some encouragement to what is a widely respected part of the industry might not come amiss and would certainly help to encourage our exports.

[Lord Newby]

My Lords, the noble Baroness makes a strong point. Again, this is the point that the industry is making and that the Treasury will listen to and consider over the coming months.

[Lord Christopher (Lab)]

My Lords, nobody so far has mentioned the regulator. To assist the Minister in the matter of age, I would like to cast noble Lords’ minds back to 1981, which certainly the noble Lord, Lord Grade, will recall, when the Independent Broadcasting Authority was interviewing candidates for franchises in independent television. The chairperson, Lady Plowden, always reserved to herself the question of children’s programmes. The regulator has, of late, fallen behind in addressing a number of issues, certainly children’s programmes appearing on television. Will the Minister approach the regulator to see whether some studies should not be made about what children today would like to see?

[Lord Newby]

My Lords, that is an extremely interesting point and I will definitely take it back. One of the key points to make about the difference between now and the period the noble Lord was talking about is that, paradoxically, there are now a lot more children’s TV channels and routes by which children get their entertainment.

National Voter Registration Day

Tuesday 1st July 2014 Lords Chamber

Question

14:45

Asked by

[Lord Storey]

To ask Her Majesty’s Government what plans they have to encourage educational establishments to take part in National Voter Registration Day 2015.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government welcome all initiatives that promote democratic engagement and increase electoral registration, such as National Voter Registration Day. The Government are keen to work with organisations that encourage young people to register to vote and look forward to hearing further details of next year’s event in due course.

[Lord Storey (LD)]

I thank my noble friend for that standardised reply. I wonder if he might not consider actually giving a bit more substance to what he said. Given that we had a debate last week about British values, one of which is democracy, would it not be a good idea to do what has happened in Northern Ireland with the school initiative, where electoral registration officers go into schools, talk about democracy and its importance, and encourage young people to register to vote? Could we not consider a pilot scheme in the rest of the UK?

[Lord Wallace of Saltaire]

My Lords, with the approach of the general election next year, it is a bit late for pilot schemes. The Government have given £4 million to local authorities to promote registration among vulnerable groups. I am aware of three local authorities, Dumfries and Galloway, Ceredigion, and Redcar and Cleveland, that have specifically allocated some of this to looking at how to register young voters. In Ceredigion’s case, it has an explicit partnership with Bite the Ballot while doing this. We encourage all those activities. I remind the noble Lord that electoral registration is managed at the local level, which as a former local councillor he will well know.

[Baroness Hanham (Con)]

What progress has been made on individual electoral registration? It is very important for young people to know about the democratic process, but as part of that they must also know that they have to register in order to vote.

[Lord Wallace of Saltaire]

My Lords, online electoral registration was introduced four weeks ago. I have the figures only for the first week and we were extremely encouraged by how many people had registered. We hope that we will have the figures for the first month by next week. That is part of why we think that we have moved on from the Northern Ireland experience, in which electoral registration officers took paper forms into schools. We think that young people are much more likely to register online. The experience of 2010 suggests that the registration rate rises rapidly in the few months before a general election. It rose by 700,000 in early 2010. We expect that to happen again.

[Lord Campbell-Savours (Lab)]

My Lords, is it not a simple truth that electoral registration is a waste of public and taxpayers’ money, and that we should have dedicated expenditure to the areas where there was an abuse of the electoral system?

[Lord Wallace of Saltaire]

My Lords, I am not entirely sure that I understand that. There are a number of problems with electoral registration. We have various categories of voters, including the substantial number of people in London who are citizens of the European Union but not of the UK. I have been very impressed by the sheer difficulty of getting access to some of the dwellings that are now behind gated communities, so we must spread our effort into them. Of course we are focusing on the vulnerable categories, with which we are well familiar.

[Lord Roberts of Llandudno (LD)]

My Lords, is the Minister aware that organisations such as Bite the Ballot, of which I am honorary president, can register an elector for 25p, while the figure for the Electoral Commission has gone up to £25 per individual registration? Can we somehow encourage more work in the voluntary organisations, which are going into schools already and doing things to this end, and can we as a Parliament say that we want the highest number of new youngsters possible on the register, even before the coming general election?

[Lord Wallace of Saltaire]

My Lords, we need a range of activities by a range of different organisations, including political parties, of course. We touched on citizenship education yesterday. The activities in schools—I hope that Peers and others will help in that by going into schools—are all part of the effort we need to make to engage young people in the registration process.

[Lord Wills (Lab)]

My Lords, why do the Government not send registration forms with every student loan?

[Lord Wallace of Saltaire]

It is partly because we want people to register to vote online. It is more efficient and cheaper. A number of efforts are going on with universities to ensure that students are also encouraged to vote. There will be various activities during Freshers’ Week. I will take that back as a suggestion but we feel that we are covering this in another, more effective way.

[The Lord Bishop of St Albans]

My Lords, the Question is about encouraging educational establishments to encourage a whole new generation of people to engage in the electoral process. Of course, next year is a hugely significant year, with the 800th anniversary of Magna Carta. Can we not only encourage our schools to use this as an opportunity to really inspire people to think about civil participation, citizenship and so on but find some imaginative ways to give people the information in the educational packs that will be used next year?

[Lord Wallace of Saltaire]

My Lords, certainly. We trust that the churches will play their own role, and perhaps we will have mentions in sermons of civic duty and what one should render unto Caesar as well as unto God.

[Lord Cormack (Con)]

My Lords, why do we not require young people to register?

[Lord Wallace of Saltaire]

My Lords, in this country, it has not been compulsory to vote or to register to vote. That would raise all sorts of questions about civil or criminal penalties, and some fundamental questions about the relationship between the citizen and the state. This country has not wanted to use compulsion where it can possibly avoid it.

[Baroness Jones of Whitchurch (Lab)]

My Lords, might I take the noble Lord back to the original point raised by the noble Lord, Lord Storey, which is the Northern Ireland experience? When individual voting was introduced there, there was an alarming drop-off in the number of young people registering, so we already know that that is a threat on the horizon. Northern Ireland came up with a good solution—the schools initiative—which effectively dealt with the point that the noble Lord, Lord Cormack, raised about formally registering all pupils. Surely, on the basis of the experience we already have from Northern Ireland, we should embrace that initiative and get schools to register all pupils when they come up to the age of 18.

[Lord Wallace of Saltaire]

My Lords, the Government’s mechanism encouraging schools to use Rock Enrol!, a slightly different package, has so far received a fairly good take-up from schools. We very much want schools to encourage their pupils to register online, but we are having a dialogue about it with schools and teachers.

Elections: Weekend Voting

Tuesday 1st July 2014 Lords Chamber

Question

14:52

Asked by

[Baroness Neville-Rolfe]

To ask Her Majesty’s Government whether moving United Kingdom elections from Thursday to Sunday has been considered in order to minimise disruption, especially for parents and schools.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government have no current plans to change polling day from Thursday to Sunday.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend for that brief reply, and welcome the news about the success of online registration that he has already referred to. I wonder if more thought can be given to this important issue. The biggest single thing that has not been covered in debates on electoral issues is the cost of days lost for millions of schoolchildren—and often, no doubt, their working parents—on election days. Does the Minister agree that this adds an extra dimension to the argument that should be considered in the interests of our education system?

[Lord Wallace of Saltaire]

My Lords, the previous Government conducted a consultation exercise in 2008 on whether or not to move the day of voting to the weekend. The majority of responses to that consultation were against such a move. Of course, there are additional costs of transferring voting to a Sunday. If one were to have voting on two days over the weekend, it is likely that those costs would be in the order of £100 million-plus. I know that the Department for Education has suggested that schools that have to close for voting should use that day for staff training as a means of minimising the loss of teaching time.

[Baroness Howarth of Breckland (CB)]

My Lords, is not the fact that elections take place on a Thursday and children are not in school a good way of ensuring that they know that something is happening? Would it not be a very good thing if teachers had to ensure that the day before an election they explained about elections? At least then we would have one day when democracy was discussed.

[Lord Wallace of Saltaire]

My Lords, my first ever awareness of politics was during an election in the early 1950s when we had a fight in my primary school playground about which side one should be on in the election. I have no memory of why we fought and which side we were on, but we did know that something important was going on.

[Lord Rooker (Lab)]

Is not the cost for pupils potentially the loss of 10 days schooling over a school life? Can the Minister tell us how many fee-paying schools are required to close on a Thursday so that the pupils lose that educational opportunity?

[Lord Wallace of Saltaire]

My Lords, that is a very fair question. We will clearly have to investigate which public schools we can use for polling stations in the future.

[Lord Deben (Con)]

Will my noble friend accept that, although I have the greatest of devotion to my noble friend who asked this Question and am a firm supporter of the European Union, this is one continental habit that we do not need to take on board? It is important for schools to take seriously their part in the community, and children learn considerably if the teachers are sensible enough, as the noble Baroness suggested, to use this time to explain to children what happens. I do not believe that they would do that were it on a Sunday.

[Lord Wallace of Saltaire]

My Lords, the table I have seen of the days on which other industrial democracies vote covers every day from Monday through to Sunday. The majority of Roman Catholic countries vote on a Sunday. Almost all Protestant countries vote on other days of the week.

[Lord Tyler (LD)]

My Lords, is my noble friend aware that one of the original objections to voting on a Sunday was that there might be rather too much advice or direction from the pulpit as to how people should vote? Does he recall that our party suggested that there should be two-day voting at weekends—Saturday and Sunday—but with reduced hours so that there would not be any conflict with religious observance? However, he has not answered the specific Question with which this discussion started: what is the actual impact on business, on the economy and on families from the disruption on Thursdays? We need to know and there seem to be no hard facts.

[Lord Wallace of Saltaire]

My Lords, elections cause a certain amount of disruption on whatever day of the week one holds them. That is unavoidable. The question of where the disruption falls depends on what day is chosen. On the question of the role of churches, I am reminded of the occasion when I took a young Liberal called Elizabeth Barker, now the noble Baroness, Lady Barker, whose father had been the Minister at Saltaire Methodist church, to Saltaire Methodist church one day when I was about to stand as parliamentary candidate in Shipley, and the sermon was wonderful. It did not quite go so far as to say that people should vote for the candidate who was there but it got very close. I would like to hope that the church will do things like that in the future.

[Lord Kennedy of Southwark (Lab)]

My Lords, I think that the noble Baroness, Lady Neville-Rolfe, has a point. Does the noble Lord agree that it is time for a root-and-branch review of polling day and that using schools should be a last resort for the community? We should look at other options and dismiss them from the whole process of voting.

[Lord Wallace of Saltaire]

My Lords, it is only six years since the previous Government looked at this. I am not aware of any strong pressure for change and there are disadvantages with all other days of the week. If we were to move to weekend voting there would be a strong argument for having two-day voting and that would be a much more complicated exercise in other ways.

[The Countess of Mar (CB)]

My Lords, we are getting the conception that all schools close on voting days. In my locality we vote in the village hall. In the next ward to us they vote in the village hall. Are there not enough community centres and village halls for people to be able to vote in them and for schools to remain open?

[Lord Wallace of Saltaire]

A whole range of places, including church halls, are indeed used for polling stations. It often happens, however, that the primary school is the most convenient place in a village or town district for people to get to and for disabled people in particular to be able to go into.

[Lord Low of Dalston (CB)]

Does the Minister agree that whether an activity is disruptive or not depends on the value of the activity? I do not find many people agreeing with me about how disruptive football matches are.

[Lord Wallace of Saltaire]

I merely reiterate that not all schools that are used as polling stations have to close entirely for the day of polling. There is some disruption, so it is a problem, but it is not a universal problem.

[Baroness Heyhoe Flint (Con)]

My Lords, if one is looking for a two-day voting system, perhaps all sports venues could open on a Sunday. It would increase attendances; the venues could offer free tickets to youngsters; and people would discover the joy of voting and the joy of sport—at the risk, of course, of offending my right reverend friends on my left.

[Lord Wallace of Saltaire]

My Lords, all sorts of suggestions have been made about where people might vote, including at supermarkets. One objection to choosing a particular chain of supermarkets in which people might vote is that, as we all know, there are certain gradations of supermarket. Depending on which supermarket one chose, one might possibly bias voting in one direction or another.

Payday Loans: Debt Collection

Tuesday 1st July 2014 Lords Chamber

Question

15:01

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what action they propose to take in respect of Wonga.com and other financial sector companies which have employed misleading debt collection practices.

[Lord Kennedy of Southwark (Lab)]

I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a director of London Mutual Credit Union.

[Lord Newby (LD)]

My Lords, the Government are determined that abuse in the payday lending market should be tackled wherever it occurs. That is why we gave the Financial Conduct Authority strong powers to regulate the payday lending industry and legislated to require the FCA to introduce a cap on the cost of payday loans. The FCA asked Wonga to make redress to customers, which Wonga has agreed to. Wonga will pay compensation totalling more than £2.6 million to around 45,000 customers.

[Lord Kennedy of Southwark]

Will the Minister join me today in condemning the disgusting activities of Wonga.com? Will he arrange for me, faith groups and other campaigners to meet a Treasury Minister to look at the idea of putting the fines imposed on companies in the financial services sector into a separate fund and using them to support the credit union movement, financial charities that work with adults and children, and similar organisations? Enabling people to make better-informed financial choices and to understand their options is a much better way forward.

[Lord Newby]

My Lords, I agree with the noble Lord on his first point and I am happy to arrange a meeting. I remind the House that the Government are putting £38 million into the credit union expansion plan and we strongly support the expansion of credit unions.

[Lord Elystan-Morgan (CB)]

The watchdog’s report shows that deceit on a massive scale has been perpetrated, but there are two questions that I wish to ask the Minister. First, with regard to the possible criminality involved, is it possible, if not likely, that offences have been committed under Sections 1 and 2 of the Fraud Act 2006 and Section 26—the blackmail section—of the Theft Act 1968? Secondly, is it not the case that such bodies hold statutory licences? Should there not be a rigorous examination to see whether they are fit to hold such licences?

[Lord Newby]

My Lords, the noble Lord is right that there is a question over whether Wonga in this case might have infringed both the Fraud Act and the Theft Act. The Law Society has asked the Solicitors Regulation Authority to investigate whether Wonga might also have breached Section 21 of the Solicitors Act 1974 and the Legal Services Act 2007. There is plenty of scope for legal action. On the fit-and-proper test, payday loan companies have been regulated by the FCA only since April. A full fit-and-proper test of each company will be undertaken in the autumn.

[Lord Razzall (LD)]

My Lords, is the Minister aware that the debt collection practice with which we are concerned has also been introduced by the Student Loans Company? Will he confirm that no other government agency follows the same practice and agree that it is difficult to complain about Wonga when a government agency is involved in similar activities?

[Lord Newby]

My Lords, there have been recent reports about the Student Loans Company. My right honourable friend David Willetts is in the process of establishing the facts of the practice. The offending letters that the SLC sent out are no longer being sent. Certainly, if it is found that the SLC or any other arm of government has adopted unsatisfactory practices, appropriate and firm action will be taken.

[Lord McFall of Alcluith (Lab)]

My Lords, it is important to note that no fine whatever has been imposed on Wonga. It has been asked only to redress customers at a rate of 8% interest, compared with the 5,853% that it charged its distressed customers. Despite the potential criminality in at least four areas here, Wonga has been allowed to continue as though nothing has happened, portraying itself as the good guy in a bad industry when it is the bad guy in what should be a good industry.

[Lord Newby]

My Lords, I think Wonga is finding it increasingly difficult to portray itself as the good guy. That has been demonstrated by this episode. The key thing to point out is that the action of the FCA has resulted in prompt redress and that 45,000 consumers will be getting a payment from Wonga. Until the FCA had the powers that it assumed in April, there was no provision under the previous regime for the OFT to secure redress for customers in that way. If, under the old regime, the OFT had initiated a criminal process, it is quite likely that it would have taken the best part of three years to reach a conclusion; whereas, under this process, consumers have got money back from Wonga very quickly.

[Baroness Wheatcroft (Con)]

My Lords, we hear much in this Chamber about how credit unions are a preferable alternative to the Sue, Grabbit and Run tactics of some of the payday loan companies, but many people working in Parliament would probably benefit from the presence of a credit union. Has my noble friend given any consideration to the establishment of a parliamentary credit union?

[Lord Newby]

My Lords, I think there may be one but, sad to say, I have not become a member of it. I will write to my noble friend explaining how she might join and put the letter in the Library of the House so that other Members may do the same.

[Lord Alton of Liverpool (CB)]

My Lords, will the Minister confirm that personal debt in Britain now stands at a staggering £1.4 trillion, and that in one recent year, payday loans were advertised in more than 400,000 spots on television? This included advertising, some of it by Wonga, that was targeted at young people and used puppets. Surely it cannot be in our national interest to promote indebtedness on that scale and to have a new rising generation encouraged to take out personal debts as well.

[Lord Newby]

My Lords, I agree with that, but the fact that we are now regulating the industry in a way that has never been done before is likely to have a significant impact on both the number of firms—firms are exiting the sector very quickly at the moment—and public perception of the industry. If we go back a year or two, the Wongas of this world were seen to be soft and cuddly institutions; nobody believes that any more.

Middle East Peace Process

Tuesday 1st July 2014 Lords Chamber

Statement

15:08

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)]

My Lords, with the leave of the House, I should like to repeat as a Statement the Answer given to an Urgent Question in the other place by my right honourable friend the Minister of State for the Foreign and Commonwealth Office on the death of three Israeli teenagers and the effect on the Middle East peace process. The Statement is as follows.

“I visited Israel and the West Bank from 17 to 19 June, just after the kidnapping of three Israeli teenagers. The whole House will share our sadness that last night the Israeli Government confirmed that they had recovered their bodies in the West Bank.

As my right honourable friend the Prime Minister has said, this is an appalling act of terror. There is no reason, belief or cause that can justify the abduction and killing of innocent civilians. We send our deepest condolences to the families of Gilad Shaar, Naftali Frenkel and Eyal Yifrach.

We are in close contact with the Israeli and Palestinian authorities. The urgent priority must be to hold those responsible to account, under the rule of law, and we stand ready to offer any help we can in that objective. The Home Secretary has been in Israel and the West Bank this week and has had discussions with political leaders on both sides.

I welcome President Abbas’s condemnation of the abduction. We are encouraging Israel and Palestinians to continue to work together in order to find the perpetrators. I saw evidence of that co-operation during my visit and it is vital it continues in the weeks ahead. It is vital that all parties avoid action that could escalate the situation further. All security operations must be handled with due care, restraint and the proportionate use of force.

It is too early to be clear about the full implications for the Middle East peace process. We will do our utmost with our allies and partners to keep open the prospects for a return to negotiations on a two-state solution, which is the only way to resolve this conflict once and for all”.

My Lords, that concludes the Statement.

15:10

[Lord Bach (Lab)]

My Lords, I thank the Minister for repeating the reply from another place. Every Member of your Lordships’ House will be saddened by this awful news. The suffering of the families will, of course, be unbearable and the nation of Israel and millions more around the world will be in mourning. I ask the noble Baroness three short questions. First, will she set out in a little more detail what contacts there have been with the Israeli and Palestinian Governments in the past 24 hours? Secondly, what assessment have our Government made of the impact these latest tensions are likely to have on the Palestinian unity Government and the Israeli Government’s policy towards them? Lastly, do the Government agree—I am sure that they do—with the United Nations Under-Secretary-General Jeffrey Feltman that both Israelis and Palestinians should exercise maximum restraint to prevent tensions escalating further?

15:11

[Baroness Warsi]

I thank the Benches opposite for their support in these matters, as always. I can confirm that the Minister with responsibility for the Middle East, Hugh Robertson, spoke to Minister Livni earlier today. The Home Secretary has been there this week and contact was planned today for the Foreign Minister to speak to his opposite number and a potential Prime Ministers’ call as well. The Foreign Secretary met the Security Minister recently. As for the impact on the unity Government, noble Lords will be aware that the unity Government were formed last month and that Government, who do not include members of Hamas, made very clear their commitment to the quartet principles. I agree with United Nations Under-Secretary-General Feltman. It is important that both sides exercise maximum restraint in their response to this matter.

15:12

[Baroness Falkner of Margravine (LD)]

My Lords, we on these Benches deeply commiserate with the families and friends of Naftali Frenkel, Gilad Shaar and Eyal Yifrach. We join their families and the whole Israeli nation in feeling their loss and in sharing their unity at this time of great suffering. The noble Lord, Lord Bach, asked about contacts. I wonder whether, in those contacts, her colleague the Minister has discussed with both sides the importance of proportionality. Find the murderers, the perpetrators of this act, and bring them to justice, yes; but it is hugely important that the unity Government and the peace process should not be imperilled at this time of justifiable anger on the part of the Israelis. Will she take away the idea that, at the end of this, both nations will have to live together?

[Baroness Warsi]

We have to accept that this kidnapping has consumed Israeli society over the past 18 days and therefore our thoughts are, of course, with the families and the friends of the young men who have lost their lives. However, it is important that all efforts should be directed at finding the perpetrators and nothing wider. That is the message that we are emphasising in our discussions.

[Lord Wright of Richmond (CB)]

My Lords, there can be no justification for kidnapping or murder, but can the noble Baroness assure the House that the European Union, as a member of the quartet, is urging the Israelis to avoid any retaliation, which will only increase the suffering, humiliation and deprivation of the populations of Gaza and the West Bank and can only reduce the already very slender chances of achieving a peace process?

[Baroness Warsi]

The noble Lord makes an important point and he will be aware, as others are, that in the operation in response to the kidnapping of these teenagers, 400 Palestinians have been arrested, seven Palestinians have lost their lives and more than 1,000 homes have been searched. For that reason, we are making it clear that it is important that the response to this matter is specifically targeted and done in a way that avoids escalation.

[Lord Campbell-Savours (Lab)]

Do the Government equally condemn the actions of the Israeli troops who recently killed two young Palestinian boys who were peacefully demonstrating in the West Bank of the Jordan?

[Baroness Warsi]

My Lords, the Government equally condemn the deaths on the Palestinian side. We can probably say that the one thing that unites both sides is the way in which families grieve for their young ones. We must make it clear that there can be no hierarchy of victimhood in this dispute and that whichever side loses a child, it is equally condemnable.

[Lord Palmer of Childs Hill (LD)]

My Lords, more than two weeks ago, when the three non-combatant young men were kidnapped, the result on the streets of Gaza City was celebrations and jubilation at the kidnapping and a call from Hamas for more kidnapping. Can the Minister tell me how we can try to stop this horrendous escalation of kidnapping, which is of no benefit to anybody in that area?

[Baroness Warsi]

The Government are rightly concerned about some of the responses to these kidnappings. However, we have been quite heartened by President Abbas’s approach to this matter, including his speech in Riyadh 10 days ago, the full security co-operation of the technocratic Government—the Minister had an opportunity to see that for himself on his visit—and the statement last night. We can take great comfort from the fact that President Abbas has responded in a positive way and one that has de-escalated the situation.

[The Lord Bishop of Derby]

On behalf of these Benches, we associate ourselves with the condolences to the families and the widespread grief on all sides. We welcome the statement by the unity Government but an inevitable reaction to grief, especially with the death of the young, is anger. Yet grief is something that is never handled by anger; it requires time for reflection, engagement and a deeper kind of approach to the issue at stake. Can the Minister assure us that, in our work to seek peace, we will do everything we can to mitigate the knee-jerk reaction of anger and invite people to think more deeply about the human content of grief and how to deal with it?

[Baroness Warsi]

We will of course do that. The right reverend Prelate makes important points, but I think he would also say—and on a very personal basis, I acknowledge this as a mother—that it must be incredibly difficult to reach that second phase when you have just lost your children.

[Baroness Symons of Vernham Dean (Lab)]

My Lords, the Minister is quite right to refer to this as an appalling act of terror. However, she has also pointed out on recent occasions that the window is closing on the viability of the Middle East peace process. I wonder whether the Minister could come back to the point of the Question, which is about the impact on the Middle East peace process, and what she and the Government see as the next positive step that might be taken in that process.

[Baroness Warsi]

The noble Baroness is right. I have answered a number of questions on this over the past two years but there is no doubt that the events of the last two or three weeks have made it much harder to reopen negotiations and, indeed, to start some meaningful conversations. However, I go back to what I have said on many occasions at this Dispatch Box: the two-state solution is the only long-term solution that will bring a safe and secure Israel alongside a viable, flourishing Palestinian state.

[Baroness Hayman (CB)]

Does the Minister agree that it is a tragedy for both peoples, whom it has been shown over the years support a peaceful two-state solution, that they have been let down by their leaderships being incapable of taking their countries to that point? In terms of the people concerned, the Minister mentioned the grief of parents, which is the same whether you are Israeli or Palestinian. Will she take this opportunity to pay tribute to the bereaved parents on both sides who have been active in the peace process?

[Baroness Warsi]

I of course pay tribute to the bereaved parents on both sides, Palestinian and Israeli, who have lost their children. The natural order is for children to bury their parents, not for parents to bury their children.

Consumer Rights Bill

Tuesday 1st July 2014 Lords Chamber

Second Reading

15:20

Moved by

[Viscount Younger of Leckie]

That the Bill be read a second time.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, let me begin this debate by setting out how important the Government’s consumer law reforms are for consumers, for businesses and for growth.

Consumer spending accounts for nearly two-thirds of the UK's economic activity. According to the British Retail Consortium, UK retail sales in 2013 were over £321 billion and the Office for National Statistics estimates that in quarter 1 of 2014 alone, household spending, when adjusted for inflation, grew by 0.8%—that is a growth of £2 billion just in that quarter.

Our aim is to foster high levels of consumer confidence so that people try new products and services and also shop around. This encourages businesses to enter the market and drives innovation, boosting competition and creating growth. However, in order for consumers to be confident, they need to know what their rights are and what they are entitled to if something goes wrong. Having clearer rights and remedies is also important for businesses because it means that they can more readily understand how they can best meet their responsibilities. Helping consumers to become more confident and businesses to become more responsive is the challenge that we face.

We have already taken action to reform the landscape of bodies which support efficient and competitive markets. Reforms announced in April 2012 have transformed the institutional landscape through, for example, the creation of the Competition and Markets Authority and the formation of the National Trading Standards Board. These reforms have made responsibilities clearer where previously they overlapped and have enabled consumer bodies and enforcers to be better co-ordinated, to identify and act on the real priorities affecting consumers.

We now have to get the legal framework right to make consumers more confident about the protection that they have and to reduce the costs to businesses of applying consumer law in practice—hence, the Consumer Rights Bill. The Bill sets out in one place key consumer rights and what consumers are entitled to if something goes wrong. It covers goods, services and, for the first time ever, digital content such as apps and film streaming.

The overall package of reform is estimated to be worth over £4 billion to the UK economy over 10 years. The Bill reduces costs for businesses and consumers by making it easier and clearer for people to understand what should happen when a problem arises. It will help to resolve complaints at an earlier stage and stop issues from unduly escalating into disputes, which are costly for all parties. It will also help create a fairer and more level playing field for businesses and enhance redress for consumers where problems emerge.

The provisions in the Bill have been carefully developed following extensive consultation, reviews and independent reports, including by the Law Commissions. The Bill was also published in draft last summer and received scrutiny by the Business, Innovation and Skills Select Committee. We are very grateful for the committee’s detailed consideration and we have accepted a good many of its recommendations. The Bill was then further improved following its introduction in the other place and I am confident that the Bill now before your Lordships’ House is stronger and better as a result.

I now turn to the main measures in the Bill. First, on goods, there are estimated to be over 350,000 retail businesses in the UK, making goods a critical part of the UK economy, yet much of the law on goods is over 30 years old. That is why the first part of the Bill sets out a simple legal framework to regulate the sale of goods in order to replace the current complexity that is, quite frankly, bewildering for consumers and which makes compliance so onerous for business.

We are setting out in one place the standards that goods must meet—for example, specifying that consumers have 30 days in which to reject substandard goods and receive a refund, to replace the current vague law that they have a “reasonable” time in which to return such goods; and making clear that, where the consumer prefers to have a faulty item repaired or replaced, this repair or replacement must remedy the problem the first time around or the consumer can insist on some money back. Currently it is unclear how many repairs or replacements of faulty goods a trader can give before the consumer can get some back.

Secondly, on digital content, because most consumer law has been in place for a long time, since long before the advent of digital content, there is significant legal uncertainty about what rights apply here. This uncertainty harms consumers and business, first, because consumers do not know how to go about resolving problems with digital content and, secondly, in contrast, some consumers may think that they are entitled to a remedy that the business does not think it is obliged to provide under the current law. This situation is unacceptable in a market that is both of a substantial size—around £200 billion—and still developing.

We are introducing a set of quality rights tailored specifically to digital content. For example, where a trader provides an update to digital content previously supplied, this update must not lower the quality of the original digital content. If it does, the trader must provide appropriate remedies to the consumer. Note that the onus in this example is on the trader because that is the person the consumer paid for the digital content. This in turn will raise consumer confidence to try new products, because consumers will be clearer about what they are entitled to if something goes wrong. This is good for businesses, too, because it makes it easier for new firms and innovative businesses to compete successfully for a share of the market.

I turn to the services sector. There are no statutory remedies to ensure that matters are put right if there is a problem with a service contract. That is unacceptable in a sector that is worth over 75% of UK GDP. We are addressing this in the Bill by setting out new statutory rights and remedies. Our key new remedy is for consumers to have the right to request the reperformance of a service. Alternatively, reperfomance might just be the element of it that is just not delivered in accordance with the contract, but we recognise that there are circumstances where that simply is not possible, or where it could not be done within a reasonable time and without significant inconvenience to the consumer, and in those cases the consumer is entitled to a reduction in the price of the service.

I focus now on unfair contract terms. The law on unfair terms in consumer contracts is particularly complicated. We need to tackle the complexity and ambiguity in this area of law, which has led to costly disputes that have even been taken to the Supreme Court. These court cases have still not established sufficient clarity about what a court may or may not consider for fairness in a contract. Some protection in law is necessary because consumers understandably focus on the product or service that they are purchasing rather than the contract. They often cannot, or do not wish to, investigate the detail of every contract term before they sign up to an agreement. They need protection where the small print could trip them up. However, this protection needs to be balanced against businesses’ need to be able to trade without the prospect of every single term being open to challenge. Contracts are a necessary part of providing products and services, and should enable rather than hinder consumers and businesses in that market.

Therefore, these reforms will make clear what the courts can and cannot consider for fairness. In particular, we are making a key test that price and subject matter terms in a contract need to be transparent and prominent to ensure that it cannot be challenged for fairness in court. That will give important protection for consumers against the small print and will give more certainty for businesses about what they need to do to avoid a term being assessable for fairness by a court.

On Part 3 of the Bill and consumer law enforcement powers, investigatory powers of consumer law enforcers are currently scattered across some 60 different pieces of legislation. That makes it difficult for enforcers and businesses to understand what the consumer powers are and in what circumstances they can be used, which is why we are consolidating them into one generic set in the Bill. We also want to make it very clear in the Bill that trading standards can work across local authority boundaries to tackle rogue traders efficiently and effectively, which will help to get rid of the red tape that currently stands in its way and prevents it from getting on with its important role. These important reforms will save businesses and enforcers time and money. We estimate a net benefit of approaching £50 million over 10 years.

Part 3 also contains enhanced consumer measures. If a business breaks consumer law, it is right that action is taken, and trading standards does bring criminal prosecutions. However, while that punishes the miscreants, it does little to help those who lose out as a result of the breach. We are therefore giving enforcers more flexibility to deal with such breaches so that they have additional ways to achieve better outcomes for consumers and create a level playing field for compliant businesses where consumer law is breached. Those tools include new powers to seek redress for consumers, which will help people get some money back where they have lost out as a result of a business not abiding by consumer law. However, they also comprise powers to help prevent future breaches. That may involve, for example, a business putting in place a better complaint handling system or putting details of the breach on its website together with what action it has taken to put matters right.

However, the Bill is not prescriptive. Instead, it provides flexibility to enable the response to be tailored to specific circumstances. More than that, we want to encourage businesses to work with enforcers to propose and agree appropriate measures, although ultimately the enforcer can seek a court order. As a balance—and the Bill is all about providing an appropriate balance—we are including safeguards for businesses that any such redress or other remedy is proportionate, just and reasonable.

On lettings, the vast majority of letting agents provide a good service to tenants and landlords. However, we are determined to tackle the minority of rogue agents who offer a poor service. We will require all letting agents and property managers to belong to an approved redress scheme, which will give tenants an effective way to address complaints. However, I believe we should go further, which is why the Bill has provisions to ensure full transparency of lettings charges. That is effectively a ban on hidden fees, giving consumers the information they want and supporting good letting agents.

Lastly, the Bill reforms the regime for private actions in competition law. Anti-competitive behaviour can harm consumers by lowering output, increasing prices, and reducing choice and innovation. It is estimated that cartels can raise prices by between 20% and 35%. Despite the strong competition framework that the Government are putting in place, research by the Office of Fair Trading shows that businesses believe the current regime for private actions is too slow and too costly. As a result, businesses and consumers rarely get redress where they have been harmed by anti-competitive practice. It is particularly telling that in 10 years there has been only one collective action case, and only 0.1% of those eligible signed up to the action.

To address that, first, the Bill will make it easier for settlements to be reached without costly court proceedings, by facilitating alternative dispute resolution. Secondly, it will create a more efficient and quicker process for private actions through allowing a fast-track regime for appropriate cases aimed at SMEs. Thirdly, it will introduce a limited opt-out regime to facilitate more effective collective actions for consumers and businesses where they have been harmed by an anti-competitive practice, with safeguards, to ensure the cases are appropriate and merit this approach.

This is the most fundamental reform of UK consumer law for more than a generation. It will streamline the law, and make it clearer and more accessible. It will enhance consumer rights and deregulate for business where appropriate. It will empower consumers and stimulate competition and growth. I beg to move.

15:35

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the Minister for the clarity of his introduction and, indeed, for his willingness to discuss the Bill with us. We look forward to working with him in Committee. I think he knows that our disappointment is about not what is in the Bill, but what is lacking. With only small exceptions, we like what is there, but that is because it is largely a consolidation Bill.

Our regret is that the Bill, with its wonderful title, is rather a wasted opportunity, which could have strengthened, rather than just clarified, consumer rights. We of course welcome the simplification and the improvements in the Bill, such as the right of returns and refunds, clarity on repairs, the reperformance of service and protection against small print. We very much welcome the possible redress for breaches of competition law, and, at least in theory, some possible collective redress for breaches of consumer law. However, as that depends on trading standards, and as it is being reduced to Lilliputian proportions, we worry this will be a measure in need of enforcement.

We will want to discuss why, despite the very good advice of the BIS Select Committee that the services definition,

“should apply an additional outcome-based liability standard”,

for services, the Government require only the exercise of “reasonable care and skill”, regardless of the actual quality of the outcome of the service provided. We will also want to debate how the Bill will cover public services where there is some payment or copayment by the recipient. Indeed, as that was acknowledged by the Minister only during the Bill’s passage through the Commons, the issue of the effect on the public sector is missing from the original impact assessment. It is slightly regrettable that we saw the extra 240 pages of the revised impact assessment only this morning. Noble Lords will not be surprised that I have not had time to digest that since then. Could I therefore shortcut that and ask the Minister to outline the scope, cost and benefits of the major, and welcome, advance of the consumer rights that apply to public goods and services where there is an element of payment or copayment?

Our approach to consumer rights is to put empowered consumers at the heart of the economy and society; to drive markets that work; to ensure that consumers get the benefit of any advances; and to have an economy that works for all. The generally accepted consumer principles promoted by representatives of consumers, across both goods and services, are access, choice, quality or safety, information, fairness, representation or advocacy, and redress.

On redress, we regret that the implementation of the EU directive on alternative dispute resolution is not part and parcel of the Bill, despite the Minister having just referred to the importance of redress, and despite that directive having sat on the Government’s desk for a couple of years. Rather oddly, it is running in parallel with the Bill, rather than as a part of it. We have been promised a response to the consultation by some unknown date. We have also been promised a response to the Public Administration Committee’s report on ombudsmen “by the summer”. It is 1 July, so we may have got there. Perhaps the Minister can enlighten the House on when we will have the details on that.

Despite the welcome that I have given to most of the Bill, we have one major difficulty with it—the, I have to say, preposterous idea that trading standards officers will have to give 48 hours’ written notice of inspections. That would seem to be a perfect time in which to dispose of counterfeit or mislabelled goods, and it will also add extra red tape for those hard-pressed local government trading standards officers. It is also in stark contrast to the new unannounced visits from Ofsted or indeed food standards inspections. Moreover, as the Minister has just said, the Bill will require letting agents to display their fees, but of course if trading standards officers have to give 48 hours’ notice rather than being able to pop into a letting agent as they walk past on the high street, there will surely be 47 hours in which the fees will go up.

My noble friend Lord Stevenson will raise our concerns over digital content later in the debate. For the moment, I want to draw the House’s attention to our regret at what is not in the Bill. There is nothing on secondary ticketing, on the rights of tenants or on double-charging by letting or estate agents. We have plenty of examples of charging both the tenant and the landlord or the seller and the buyer. There is nothing to strengthen point-of-sale information, nothing on the rip-off logbook loans, nothing to stop unreasonable charges on booking fees, nothing to help consumers to get a fair deal on car insurance, nothing to ensure that every regulator has the consumer interest at heart, nothing to help prevent micro-businesses being ripped off, and no guaranteed advocacy to assist consumers to challenge poor service or shoddy goods. There is nothing to ensure—something that I know to be of interest to this House—that people can continue to receive their invoices or pay bills by post, despite 7 million adults, some of them very vulnerable, still never having used the internet. Surely they should not have to accept online-only communication. There is nothing to tackle that scourge of consumer complaints, which we in this House have also had—nuisance calls.

Those are the sorts of problems facing today’s consumers, but the general demand for a better deal for consumers is not new. In 1962, President Kennedy laid out what we might use to test whether this Bill is fit for purpose. He wrote that all of us deserve to be protected against fraudulent or misleading advertisements and against unsafe products, and that we deserve the right to choose from a variety of products at competitive prices. He went on to outline steps to increase inspections of foods and cut back on deceptive trade practices and high utility bills, while recommending,

“a law to require consumers to know how much they are being charged in interest”,

and,

“laws to tighten safeguards against monopolies and mergers which injure the consumer interest”.

He saw such rights as being,

“immensely important to the well-being of every American family”.

I think that much the same applies in our own country today.

In 1975, that great campaigner and parliamentarian, Barbara Castle, sought a “society in which every producer remembers he is a consumer too”. The Labour leader, my right honourable friend Ed Miliband, has said:

“Unaccountable concentrations of power ... don’t serve the public interest and need to be held to account”.

However, all too often, whether with goods or services, it is the consumer who is weak and the provider who can take advantage of this. The Bill should be the tool to balance this unequal relationship where providers have all the knowledge and where the purchaser, for some reason, is unable to shop around, whether through lack of time, money, know-how and expertise, disadvantage or location.

Whether they are after credit, buying tickets online, going to a letting agent or a bank, needing electricity, or trying to catch a bus, surely there are times when consumers’ buying power is not enough for them to get a square deal or redress when something goes wrong. They are the issues on which we will test this Bill. We know that the Conservatives resisted plain packaging in the interests of tobacco companies. They abandoned minimum unit pricing in the interests of the drinks industry, refused to adopt a code of conduct for banking and insurance and abolished the National Consumer Council. We wonder whose side the Government are on.

The Government had to be forced to regulate letting agents—welcome though it is that they have got there—but they then accepted only that they had to belong to an ombudsman rather than empowering the OFT to ban unscrupulous agents. This Government have produced a regulators’ code that requires regulators to work ever more closely with the businesses they are meant to oversee, with no mention whatever of the interests of those the regulators are meant to be protecting—consumers and citizens.

We see an energy market effectively rigged, at great cost to consumers, with energy companies making £100 profit a year from every family, a doubling from last year, despite a fall of up to 38% in wholesale prices and with millions struggling to cope with spiralling bills. The coalition has done nothing to reform our broken energy market, which is one of the most basic disadvantages for consumers. Even with the new inquiry, customers will have to wait until the end of 2015 to discover whether they are being ripped off. Yesterday we heard that there is worse to come, with consumers being expected to fund two-thirds of the cost—some £250 billion—to modernise infrastructure that is built, owned and operated by private companies. The PAC has asked the Government to assess whether households can afford years of higher energy, water and transport bills to pay for updating our ageing infrastructure. Those questions still remain.

On nuisance calls which, as I said, are of great interest to this House, despite lots of promises there has been a lack of action. We are waiting for the Government to implement their promise to lower the hurdle of “substantial damage” or “substantial distress” required under PECR, the relevant legislation. That is a hurdle that First-tier and Upper Chamber Tribunal decisions acknowledge is set too high for the Information Commissioner to be able to protect consumers. Despite his best endeavours, the Information Commissioner is hampered. A £300,000 fine he had imposed was overturned on the grounds of “inadequate distress caused”, yet the relevant consultation and subsequent action from the Government have not yet appeared and consumers may have to endure another year of this on their phones.

That is a catalogue of problems that has not been addressed, so while we welcome what is in this Bill, with the exception of the 48 hours’ notice of inspections, we wish it had gone further to tackle today’s detriment. Every consumer should be able to demand “the quality I pay for, at a price I understand, delivered on the date agreed, and a remedy when things go wrong”. That is what we will seek to get from this Bill, to make it truly a Consumer Rights Bill.

15:48

[Lord Stoneham of Droxford (LD)]

My Lords, I am pleased to support this Bill, which has been led by my colleagues Vince Cable, Jenny Willott and Jo Swinson through the Commons. I have been asking myself in the past few days whether this is the first Bill that is the product of a formal ministerial job-share. I am glad Which? in its briefing fairly recognises this Bill as providing,

“a firm foundation for empowering consumers”,

and that it will,

“benefit businesses that treat their consumers fairly”.

Among my colleagues on this side of the House we see this ongoing commitment to strengthening consumer rights in the fine tradition of Liberal Democrat—and indeed Social Democrat—campaigners, on behalf of the rights of consumers. This is not simply a regulatory Bill. It aims also to encourage competition and to simplify, through consolidation, 12 pieces of legislation on consumer rights and 60 pieces of legislation on the investigatory powers of consumer law enforcement. It also aims to simplify the language of legislation by making it easier to understand. I think we will have to wait to appreciate that until the end of the passage of the Bill through this House. Time will tell.

I am sad that my colleague, my noble friend Lord Phillips of Sudbury, is not in his place. He has been a champion of simplifying legislation: he was a renowned consumer campaigner when he broke new ground as Jimmy Young’s champion on consumer rights—the legal eagle—on Radio 2 in the 1970s and 1980s.

This Bill combines a commitment to consumer rights with the Government’s strong commitment to greater competition to ensure fair and competitive pricing, and to ensure that competition encourages innovation and cost reduction, all of which are central to ongoing recovery and to developing the country’s competitive advantage. Vince Cable has highlighted these reforms as lying at the heart of a crusade towards trusted business and trusted capitalism. He sees the Bill as part of the overreaching overhaul of UK competition and consumer legislation which the coalition has been undertaking in the past few years. We fully support that work on this side of the House. This Bill complements the reforms of competition policy and the new Competition and Markets Authority, which came into force in April, with particular attention to dealing with price cartels.

There is also a European dimension to both consumer rights and competition policy: many issues have to be addressed at an EU level to open up markets, and to deregulate and increase competition. Increasingly, consumers make internet purchases on the web, regardless of national boundaries. With the EU so much out of favour it is perhaps appropriate to remember that free trade, regulatory competition and wider consumer rights are interlinked. The recent consumer rights directive, which came into force on 13 June 2014, produced a number of real benefits for UK consumers. Customer helplines must now be charged at only the basic rate. There is a ban on excessive card payment surcharges and on pre-tick boxes for additional purchases such as travel insurance. Consumers now have 14 days in which to return unwanted goods.

Competition has to be worked at. It is not necessarily a natural state of affairs. Given the opportunity, businesses normally prefer to eliminate competition if they can. It is also essential that consumers are able to make purchasing decisions with better information and with the confidence that, if they are misled or product quality lets them down, it will be put right quickly and cheaply. It is also important to business that clarity of what is expected of them and their responsibilities will reduce burdens on them and avoid costly problem resolution procedures. Standards that have to be met are now in one place, a 30-day period is set for inspecting goods, and procedures for repair and compensation are clear. The legislation applies to goods and services, and digital content. There will need to be further debate on how quality of service is defined for services and how in digital content “inherent buys” are dealt with.

We welcome the attempt to tighten up the prominence of small print and the measures to allow enforcers to have greater flexibility to get the best outcome for consumers. In the Bill received from the other place, we also welcome Clauses 81 to 86 to require letting agent fees to be more transparent. We also welcome Part 1, which requires any refund of goods, services or digital content due to be repaid to a consumer to be paid within 14 days, without any deduction by the business to cover fees and charges.

We will be following up on the detail as the legislation goes through the House. I agree with the previous speaker that we need to look again at the satisfactory quality test for service. It has to be reconsidered during the Bill’s passage through the Lords, which I think that the Government accept. Rather than the satisfactory quality test, we have set different standards at the moment calling on reasonable skill and care. However, it is more difficult for the consumer to judge that, which may leave consumers unprotected if things go wrong. Services are different from goods, but we need also to look at the exception where a repeat performance to put the work right cannot be contemplated. I hope that the Government will say more about their intentions as the legislation goes through.

My colleague the noble Lord, Lord Clement-Jones, who is much more of an expert than I am in this area, will comment on digital content, but we need to be aware that bugs are endemic to software and we need to be clear about whether this infringes quality and when, and about what the customer expects. We must not endanger innovative and necessary improvement work in this sector.

It is regrettable that the alternative dispute resolution directive is on a different timetable and cannot be included in this Bill, but we should have a discussion on how it will be implemented. We need to simplify the complex alternative dispute resolution landscape in the UK and create a strong, simple, competent ADR authority. I hope that the Minister will outline how the Government intend to respond to the alternative dispute resolution directive.

During the course of the legislation, I hope that there will also be some discussion of consumer and business education required to implement it successfully. Businesses can benefit if managers educate their staff that it is always cheaper and better for customer good will to put something right quickly rather than to argue over it. Customer service is more important to our economy as services become more exportable. There is huge potential with this and we cannot always rely on the price competitiveness of the pound to pursue British exports. Customers need to know how to put wrongs right speedily, which starts with providing proper guidance at the point of sale.

The Bill will help consumers reduce the time and cost of dealing with their consumer problems. It will provide more safeguards about small print in contracts and increase the means of redress. Through simplification and greater clarity, it will reduce legal complexity and costs for business and protect legitimate businesses from anti-competitive practices. Creating greater confidence among consumers will encourage them to buy new and innovative products and services. It will help encourage a vibrant, creative economy as we go forward from the foundations of economic recovery to one of sustainable economic growth.

15:57

[Baroness Heyhoe Flint (Con)]

My Lords, I fully support the general principles of the Bill. It will improve the rights of consumers, which will make for a fairer and more effective economy. Good progress has already been made on many issues in the other place.

Today I wish to raise an issue that is important to consumers whom I and many other noble Lords would more usually describe as fans or supporters, and the issue specifically concerns the occasions when those consumers have problems trying to buy tickets for sporting events. I thank the noble Baroness, Lady Hayter, for opening the door on this issue by pointing out that the Bill currently makes no mention of secondary selling. The issue is also of great concern to the major governing bodies of sport. We need to create absolute transparency for the purchaser about the seller so that every purchaser has full information about secondary sellers, thus providing much needed protection to the consumer.

I declare an interest in that I am on the board of the England and Wales Cricket Board, which is deeply concerned about this lack of transparency. I have also had representations from the Rugby Football Union, the Football Association and the Lawn Tennis Association. It is a concern of huge importance to those who stage major national and international sporting events.

Government regulations and law currently do not provide adequate protection for the consumer. We need to stress the importance of those fans getting access to sporting events. Britain probably has more people who attend sporting events than any other country in the world. Take just this summer as an example: we have Wimbledon tennis, Open golf, the Ryder Cup, the cricket series with England against Sri Lanka and India—although we might not mention the first in glowing terms—and, of course, the Commonwealth Games. Last year the Rugby Football League held a successful World Cup, and we all look forward to the RFU staging the Rugby World Cup next year. And how can we forget the millions of legitimate ticket holders who flocked from all over the world to the 2012 Olympics here in London? Increasingly, however, this desire of the general public and fans wishing to see the very best in sport is leading to a multimillion-pound business with secondary sellers seeking to rip off—I hope that is not too strong a phrase—and take huge advantage of those buyers when they try to purchase those much sought-after tickets.

There is a worthy debate to be had about the need to actually ban ticket touting by making it a criminal offence, and I know that my noble friend Lord Moynihan is currently giving thought to that approach. The Government banned ticket touting for the London Olympics and it helped a great deal. It meant that the Metropolitan Police was able to take action against the criminal element which infiltrates major events, and consequently there were no touts loitering on the pavements outside venues to menace consumers and spoil the ambience on the way to the events. However, that is a debate for another day.

Today I am raising the issue of using the Bill to strengthen the protection given to consumers who buy tickets, particularly from secondary sellers. How can we strengthen the regulations? There is a widespread feeling among the major sports governing bodies which host international events that we need to strengthen all the regulations that apply to the resale of tickets. This subject was raised in the other place, and I know that the Minister has had the matter raised with him too.

The sports world would like to see more rigorous regulation applied to that market and to those who act as intermediaries in selling tickets to fans. We must ensure—surely this is at the heart of effective protection—that we give the consumer more information at the point of purchase. For example, we should let them know at the point of sale the actual location of the seat they are buying and its face-value price. That would enable them to determine whether the seat was of the correct value and to ensure that it was not a concession seat to be sold to children or people with disabilities—sadly, that does occur. Perhaps noble Lords read in yesterday’s newspapers the story about tickets for centre court for the Andy Murray match being sold for £2,000 on one well known online selling site. That hardly seems fair, in my eyes, to those very keen fans who would like to support such an event.

Even more importantly, the consumer buying the ticket must be told what are the terms and conditions of the transfer of that ticket to them. Many sporting events do not allow seats to be transferred above face value or without their prior approval. It is patently not fair to allow someone to buy a product that is rendered worthless when doing so because it is not allowed to be transferred by the original terms and conditions. Indeed, we should consider whether it is appropriate to allow such a sale to take place at all.

I seek to show why the existing regulations are weak and do not work efficiently. I know that Ministers have already done some good work. Last year they introduced the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, and recently they published updated guidance to those regulations which refer to ticket sales. However, legal experts in the sporting world who administer national and global events advise us that these regulations will not work due to lack of information and transparency to the buyer. This is because those regulations apply only to sales by a trader, which is defined as being:

“A trader means a person acting for purposes relating to that person’s trade, business, craft or profession whether acting personally or through another person acting in the trader’s name or on the trader’s behalf”.

Therefore, that regulation does not apply to every sale. Indeed, it will probably not apply to the majority of sales on sites such as viagogo and Seatwave, where the claim is made that most sales are being conducted by individuals.

Furthermore, the guidance that the Government have issued is just that—merely guidance—and its definitions are weak. It talks of the seller providing key characteristics. My expectation is that sellers will not deem exact seat locations as key requirements. We need to spell out the exact requirements that are needed.

At this early stage of the Bill, several of my noble friends, from all parties, have expressed a wish to bring forward an amendment. Having met with the Minister, I hope that the Government will seek to make progress here and share the spirit of what other Peers and I are looking to achieve. I believe that we can build on what has already been done with a small and tidy amendment to the Bill. I therefore hope that we can debate the matter in more detail and review the exact form of such an amendment that will work best to make sure that sports consumers—the fans—are protected and given true and honest details about their ticket purchases.

There is a worldwide philosophy created by the MCC called “the spirit of cricket”. I would like to see a similar creation stated in a proportional amendment entitled “the spirit of secondary selling”.

16:05

[Lord Wills (Lab)]

My Lords, like other speakers, I welcome much of this Bill and I congratulate the Minister on his masterly exposition of its merits. As my noble friend on the Front Bench has already said, in many ways the Bill is a missed opportunity. Legislative time is scarce and precious, and I regret that the Government have not used this unusual opportunity to address some long-standing problems for consumers.

I want to focus on the issue of exploitative marketing calls. When I was a Member of Parliament, this was a recurring problem for my constituents. Vulnerable people, often elderly, were rung up and, without understanding all the implications of their decision, were persuaded to sign up for goods and services that they did not need and could not afford. The measures that offer protection against this are clearly inadequate, as the problem continues to grow and cause distress. The debt charity StepChange, for example, has estimated that 26 million people in this country have been contacted by companies selling high-cost credit. Although much attention has focused on notorious cases, such as this and the peddling of payment protection insurance and accident claims services, the problem goes far wider even than this.

Significant measures to tackle the problem have been proposed in the other place and by non-governmental organisations and such measures would significantly improve protections against abusive practices. For example, the threshold for firms breaking the ban on unsolicited promotional electronic messages should be lowered so that the Information Commissioner would not have to demonstrate damage or distress before issuing an enforcement notice. The requirements for consent to have personal data passed on to other companies should be toughened to make them more explicit. There could be a time limit of, say, a year on such consent. There is even a case for a ban on all such contacts. But the Government have shown no inclination to tackle such abusive marketing practices, despite the widespread demand from consumers and consumer organisations for them to do so.

In March the DCMS said:

“We will be consulting on making a change to the Privacy and Electronic Communications Regulations … to lower the threshold to remove the need to prove substantial damage or substantial distress. Following the consultation we will look to implement reforms as soon as parliamentary time allows”.

These are long-standing problems and the issues are well understood. There will have been time for that consultation to take place and be digested within Whitehall and for amendments to be produced before the Report stage, if not before the Committee stage. Parliamentary time will allow for it but will the Government? Do they have the political will effectively to tackle this abusive nuisance now and not leave it until the next time we have such a landmark consumer protection Bill?

It is time to put an end to any business model that relies on the exploitation of the vulnerable. This Bill offers a rare opportunity to help to do this. Even at this late stage, I hope that the Government will seize it.

16:09

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, this is a good Bill. It covers many issues that have previously been of concern to consumers and offers them reassurance and protection for the future. It is easily understood by the layman, without too much jargon. I welcome the clarity the Bill brings and look forward to the Committee stage.

I would just like to comment on the issue that has arisen in the Bill around unannounced inspections. As a vice-president of the Local Government Association, I am well aware of the concerns that councils have about the initial proposals to restrict their ability to perform such inspections. I understand, as do local councils, the stress that such inspections can put on businesses and their employees. However, sometimes, in order to preserve the safety of the general public, and often the most vulnerable members of the public, the ability of councils to inspect a business without warning needs to be protected. In my own council of South Somerset, the power is used extremely sparingly and generally only in conjunction with other agencies, such as the police and the county council.

In the south-west, the “Smokefree” campaign is focusing on the sale of illegal tobacco and the effects it has on encouraging young people into smoking. Recent research has shown that 89% of adults in Somerset believe that illegal tobacco is a danger to children because it can be bought easily and cheaply at pocket money prices. Cheap, illegal tobacco is easily accessible in communities across Somerset. It sells for less than half the tax-paid price of legally sold tobacco. Illegal tobacco therefore impacts on the business of legitimate traders in Somerset.

The south-west, unfortunately, already has the highest number of young smokers in the UK. Illegal tobacco sellers do not ask for proof of age or care if they are selling to children. Apart from advertising and raising awareness of illegal tobacco sales, a main plank of the campaign is enforcement alongside HMRC, the police and trading standards. Giving notice of enforcement visits and action is counterproductive to reducing the number of sellers in the marketplace.

Outside of illegal tobacco sales, the vast majority of local businesses abide by the rules, but there will always be some which do not. Where inspections are not necessary, the Local Government Association, through its local regulation initiative “Open for Business”, is promoting the advance notification of business inspections wherever possible. It is also key for best practice to be shared from councils where trading standards teams work closely with businesses to ensure that their practices are within the rules, while reducing their burden as much as possible. Therefore, I urge the Government to accept the recommendation of the Business, Innovation and Skills Committee in another place for an exemption from the requirement for 48 hours’ advance notification where an enforcement officer reasonably considers that to give advance notice would defeat the purpose of the visit.

Turning to letting agency fees, like many in the House before me, when I was introduced I began to look at possible accommodation in London. I found the various estate agent adverts confusing in the extreme. I could not tell whether the real rent was being charged or whether utilities and council tax were included or extra, and there was certainly no mention of fees to be paid by the renter. I welcome the greater transparency proposed in the Bill on letting agent fees. This is a great step forward. With rents in London on the increase, it is essential that we can all see what the actual cost of entering into the rented market is and how much it will cost us to change accommodation. At a time when household budgets are stretched to the limit, transparency is vital.

Lastly, I turn to children’s exposure to payday loan advertisements on television. We covered payday loans during Questions. Like others, I am sure, I have received a brief from the Children’s Society. Being a great supporter of that organisation and having received many important briefings from it over the years, I took particular notice of this one. Back in Somerset I chair a task group looking at the impact of the welfare reform programme on residents and families. The huge detrimental effect of the industry which has grown up around payday loan companies, both licensed and unlicensed, forms a key part of our deliberations. The statistics are stark. Ofcom research showed that in 2008 there were 17,000 payday loan television adverts. By 2012 this had risen to 397,000—an increase of 2,300% in just four years. In 2012 children aged four to five saw an average of 70 adverts for payday lenders during the course of the year. Children are exposed to payday loan adverts on a daily basis. These adverts do not flag up the penalties for non-repayment and give the impression that money is readily available, just for the asking. Anyone who has children will have suffered at some stage from the “I want” syndrome, especially in the weeks running up to Christmas. This can cause enormous stress to families struggling to make ends meet. By allowing children to think it is easy for their parents to get access to cash, the adverts are encouraging children to pester their parents to take out high levels of debt. It is exploiting children to reach parents, and this manipulative tactic must be discouraged. Finally, I should like to ask the Minister whether the Government will consider using this Consumer Rights Bill better to protect children from advertisements for payday loans.

16:16

[Lord Alton of Liverpool (CB)]

My Lords, like other noble Lords, I too support and welcome this Bill on consumer rights. It introduces a much needed single framework that clearly sets out in one place the rights and obligations of consumers and traders. The Bill succeeds in ensuring that consumers will be better informed about their rights and what they are buying. Simplifying and clarifying consumer law, as the Bill does, will mean that consumers spend less time trying to understand their rights and working out how to apply them. It also provides a firm foundation for empowering consumers. Where businesses treat their customers fairly, those enterprises will benefit and they have nothing to fear from this legislation. As the ombudsman services policy adviser, Simon Darby, has remarked:

“The Consumer Rights Bill represents an excellent opportunity to deliver an improved, enhanced and simplified rights and redress landscape that would tangibly improve the support and outcomes available to consumers”.

There is also, however, a widely held view that the efficacy of the Bill will rest entirely on the extent to which the legislation is enforced, both privately and publicly. Mechanisms such as the alternative dispute resolution referred to earlier by the noble Baroness, Lady Hayter, and the noble Lord, Lord Stoneham of Droxford, could significantly add to the Bill’s effectiveness. I was struck that a briefing from Which? stated:

“The powers on redress and enforcement could be improved in the Bill”.

I hope that the Government will, as the Bill goes through its further stages, give that further thought.

When considering Bills such as this, which, as the noble Baroness, Lady Hayter of Kentish Town, and the noble Lord, Lord Wills, correctly remarked, have a consolidating function, it is important that we do not limit our ambitions simply to consolidating but introduce new provisions where they are desirable or necessary. I have three issues that I should like to see addressed in the Bill. The first is one that the noble Baroness, Lady Bakewell, referred to in her remarks and which I raised during Question Time today. It was also flagged up earlier this year by the Business, Innovation and Skills Committee, which recommended banning payday loan adverts from programming aimed at children. The committee said:

“We do not believe that these are appropriate channels for payday loans. We recommend that payday loan adverts are banned from programming aimed at children … We are concerned that payday loans increase the pressure on families already struggling with unmanageable debt and believe that payday loan adverts should not be shown on children’s television”.

This Bill provides a timely and welcome legislative opportunity to implement that recommendation and to protect vulnerable children and families from advertising for high-cost loans.

The need to do so was underlined by the Children’s Society in a joint report with the StepChange debt charity, entitled The Debt Trap: Exposing the Impact of Problem Debt on Children. Certainly, this was an issue that I encountered during my time as a Member of the House of Commons representing a constituency in the heart of Liverpool. I saw it regularly even before this massive increase in advertising and the use of payday loans. Debt can have an incredibly corrosive effect on families and communities.

The report found that problem debt can have a severe impact on every aspect of children’s lives, from missing out on the essentials, to problems with family relationships, and even bullying in schools. It states that more than half of children in families with problem debt say that they worry about their family’s financial situation. It argues that the Government should use the Consumer Rights Bill to,

“review the case for tighter restrictions on loan advertising seen by children”.

Legislation in this area would undoubtedly help in preventing children being bombarded with advertising from moneylenders, usurers and loan sharks, but children should also learn from their parents and schools about money management and the dangers of debt, not least in a country where outstanding personal debt stood at £1.443 trillion at the end of April 2014. Put another way, £161 million was the daily amount of interest paid on personal debt in April this year, while 6,519 debt problems were dealt with by the CAB each working day last year.

Ministers should also reflect that a petition calling on Ofcom to ban short-term, high-interest lenders from advertising on programming aimed at children gathered almost 10,000 signatures. But in their official response to the report of the Business, Innovation and Skills Committee, the Government rejected the demand and played down the scale of the problem, saying:

“The increase reported by Ofcom in the number of payday lending ads seen by children is concerning, but it is also important to note that they comprise a relatively small 0.6% of TV ads seen by children aged 4-15”.

This is complacent and disturbing. A recent survey by the Children’s Society, already alluded to, suggests that 56% of children aged 10 to 17 are seeing advertising for loans “often” or “all the time”. Conversely, only 21% said that their school taught them about debt and money management. Research published by Ofcom last December showed that there were 17,000 payday loan advertisement spots on TV in 2008. That increased to 243,000 in 2011 and reached a staggering 397,000 in 2012. Put slightly differently from the way in which the noble Baroness, Lady Bakewell, who gave the percentage increase, expressed it, that is a year-on-year increase of 64%. According to Ofcom, the average child aged four to 15 saw 70 payday loan adverts just last year.

At a hearing of the committee last year, Martin Lewis, founder of the MoneySavingExpert.com website, called for a blanket ban on advertising designed to “normalise” the idea of short-term loans among children. He accused the firms of,

“grooming a new generation towards this type of borrowing. If you think we have got problems now, you wait until 10 years’ time. Grooming is the right term. We are talking about a market that did not exist five years ago”.

He condemned the adverts as “deliberately contrived and controlled”, singling out Wonga’s adverts featuring puppets to appeal to children. These concerns appear to be well founded. A survey on MoneySavingExpert.com found that a third of parents reported their under-10s repeating payday lenders’ slogans, while 14% said that, when they had refused to buy a toy, their child had nagged them to take out a payday loan.

It is completely unacceptable that payday loan companies should be allowed to target parents through their children. We should consider whether it is acceptable to allow payday loan advertising to continue to mushroom generally, but there is no doubt that immediate action should be taken with respect to the targeting of children.

I appreciate that the Government have suggested that the Advertising Standards Authority and Financial Conduct Authority could ban irresponsible and misleading adverts which breach their rules. However I firmly believe that, rather than regulatory bodies banning particular adverts, the Government should use this Bill to make it explicit that all adverts targeted at children should cease. If the Government are not prepared to act, we as a House should do so. When the noble Viscount replies, I would be grateful if he would tell us what discussions the Government have had with Ofcom about banning payday lenders from advertising on children’s TV; whether the Government will consider using the Bill better to protect children from the advertising of payday loans; and how the Government will ensure that young people get financial education from schools, not from advertising of high-cost credit.

I now want to refer briefly to two points. In particular, I support the point made about local authority trading standards officers providing 48 hours’ notice of routine business inspections. As originally drafted, that requirement would have restricted the ability of trading standards officers to undertake unannounced inspections where they have reasonable grounds to do so—for example, because of a known risk relating to a business or type of activity. Maintaining the freedom of trading standards officers to turn up unannounced in those contexts, where they have reasonable grounds to do so, is vital. During pre-legislative scrutiny, the Trading Standards Institute, along with the Local Government Association, of which I am also a vice-president, made it plain that although it welcomes the overall direction of the Bill, it felt that that provision required urgent revision. I am happy to say that the Government have, to some extent, responded positively, but additional clarity is required. Specifically, there remains doubt about whether the exemption can be applied in respect of unannounced inspections relating to a known risk in an area, rather than to specific premises. I will listen with interest when the noble Viscount comes to reply on that.

I turn to my third and final point. Right at the heart of any credible concern for consumer rights must be concern for the safety of consumers. With the Eldorado tendency within the biotech industry, which sees vast profits to be made from genetic engineering and streets paved with biotech gold, we need much clearer safeguards, tempering the desire to make breakthroughs with proper concern for the safety of the public.

One example is the growing public concern about the Government’s proposal to introduce regulations permitting pro-nuclear and maternal spindle transfer in the hope of creating children who do not inherit mitochondrial disease. That issue was raised during debate on the Bill in the other place. Regrettably, a bipartisan amendment tabled by the admirable Mrs Fiona Bruce, the Conservative Member for Congleton, and the equally admirable Mr Jim Dobbin, the Labour Member for Heywood and Middleton, was not reached or properly debated in another place.

In Committee here, there will be a further opportunity to discuss this important subject. For today, I shall not go into great detail, but, in short, the Government have asked the Human Fertilisation and Embryology Authority on three separate occasions to produce a report on the safety of the proposed procedures. In its report, the HFEA has concluded that there is no evidence to demonstrate that the procedures are unsafe, but it has recommended a series of pre-clinical research experiments, some of which it describes as critical.

In March this year, the head of the United States Food and Drug Administration warned that there are not enough data on animals or in humans to move to those new techniques, and it is unclear whether the procedures would be effective. The noble Lord, Lord Winston, who is of course a leading expert in fertility treatments, has expressed his deep concern, stating that,

“the problem is that I do not believe there has been enough work done to make sure mitochondrial replacement is truly safe”.

Like the head of the Food and Drug Administration, the noble Lord warns that not enough research has been done on animal models and that more tests should be done to assess the risks to the child.

In addition, only earlier this week, two leading bioethicists said that the United Kingdom is rushing to introduce mitochondrial transfer despite the profound safety risks. Donna Dickenson, emeritus professor of medical ethics at the University of London, and Marcy Darnovsky, executive director of the US Center for Genetics and Society, pointed to America, where there are “no plans” to allow those techniques. In an article for New Scientist magazine, the bioethicists highlighted concerns raised by an advisory panel to the US Food and Drug Administration that there is no evidence to support the use of GM techniques in humans. Despite the desire of the biotech industry to stampede us into giving a green light, the risks and safety concerns of those techniques are therefore considerable. Given the importance of public safety, it would be quite wrong to rush into those procedures.

In the context of a Bill that puts the safety and protection of people at the heart of its consideration, it is right to ask Ministers how they intend to provide the necessary scaffold of public protection when such developments occur. Clearly, unamendable regulations will not provide for safety thresholds but, as Members of the House of Commons argued, the Bill could do so.

The public need to know that Parliament has properly considered these matters and not been rushed pell-mell into signing them off while pre-clinical research remains unfinished. This is an issue I raised directly with the Secretary of State for Health only yesterday, and in correspondence and in questions to the noble Lord’s department and to the noble Earl, Lord Howe. At the very minimum, I hope that the Minister will reassure the House that no regulations will be laid before Parliament until all the pre-clinical research recommended by the HFEA has been conducted and written up in peer-reviewed journals that are in the public domain, where they can be scrutinised by Members of Parliament and concerned members of the public.

There is much more that could be said, but that can wait until another day and until later stages. For now, I welcome the Bill and hope that it makes good progress on to the statute book. I look forward to the reply of the noble Viscount at the conclusion of our debate.

16:30

[Lord Borwick (Con)]

My Lords, this is an important piece of legislation. The way that consumers buy products, the vendors they buy them from and the way that consumers receive them has all changed immeasurably in the last five years, let alone the last decade. The internet has given consumers unprecedented choice, and that is a wonderful thing. We now have access to an unimaginable number of products, we can buy and exchange goods at any time of the day or night and we can do the weekly food shop on our phones.

I know that the Minister’s intention in bringing the Bill through the House is to improve transparency and clarity for consumers—quite right, too. Anyone who has bought anything online, from airline tickets to sofa cushions, will know that not all websites offer the same information as clearly as others. However, there are certain things that are striking about the global nature of online sales. Purchases are usually very impersonal, with the buyer having no personal contact with the seller—usually to the extent that the buyer does not even know what country the seller is in. Last week, I took the opportunity to purchase a Kindle edition of one of my noble friend Lord Dobbs’s excellent novels, featuring a Conservative MP as the hero. I commend it to other Members of this House. The location of the seller was not abundantly clear until I received an e-mail containing this information. I presumed, therefore, that I had purchased it from Luxembourg. Surely this information should be made clearer to the buyer. I am aware that the consumer contracts regulations 2013, which came into force on 13 June this year, already stipulate that consumers should be made aware from where they are buying their products. The name of the seller is available on the product detail page, but you have to put in a bit of work to find it. I feel that in the spirit of greater transparency and clarity for the consumer, it is perhaps not clear enough.

The Bill will help to improve competition. If consumers are safe in the knowledge that they are protected while shopping online, then they may switch between sites more readily if they spot a good deal elsewhere. Choice and competition are wonderful things that we are right to encourage. In that respect, I believe that it would be beneficial to make clear to shoppers of all products, at all values, by all means, from where they buy their products. Furthermore, it should surely be possible for consumers to choose from where they buy their products—perhaps through a check box, when I was buying my noble friend Lord Dobbs’s book, asking, “Would you prefer to buy this product from Luxembourg or from the UK?”. This would give Governments all the more reason to drop their tax rates in order to compete. This would be a way for the average consumer to express his or her opinion about where they want to do business.

I share the concerns of the noble Baroness, Lady Crawley, and others about the proposed changes to powers of entry for bodies such as trading standards. I sympathise with the Minister, in that investigatory powers are currently scattered in around 60 different pieces of legislation. That surely makes it extremely difficult for businesses and investigators to know their rights. Bringing them all together in one Bill seems sensible, but a 48-hour notice period before trading standards raids does not seem particularly sensible. It merely gives rogue traders the time to cover up whatever it is they are up to. There will be significant costs in serving these notices, too. But overall the Bill is a good indication that the Government understand the need to keep up with the changing nature of the market.

Things are moving on so quickly that existing laws are looking increasingly dated. Consider the Sunday trading laws: most shops have to close their doors on Sundays, whether shoppers and traders like it or not. This is obviously not the case on the internet. In fact, you could browse in a supermarket on a Sunday morning, before they are legally open to sell you the products, and make the purchases with your iPad instead—a ludicrous state of affairs. This is not the legislation to deal with this particular anomaly but it shows the extent to which laws on the high street have not kept up with the digital age. To that end, regulations protecting consumers have to keep up.

As the internet has offered more choice, this Bill does a good job of protecting the consumer as they make those choices. It also helps ensure that there is reasonable redress for those who have been mistreated. For that, the Minister and his team are to be commended.

16:35

[Baroness Crawley (Lab)]

My Lords, from time to time a Bill comes along which gets the pulse racing and the heart thumping, and fills us with sheer elation. This may not be quite that Bill. That is not to say that we on this side of the Chamber do not welcome many of its aspects; we will not oppose them in principle, as my noble friend Lady Hayter has confirmed. We, too, thank the Minister for clearly setting out the Bill from the Dispatch Box. However, we believe that there is some way to go before the Bill is strengthened to meet the needs of modern British consumers.

As the gracious Speech of 2013 set out, there is a need for,

“a simple set of consumer rights to promote competitive markets and growth”.

As noble Lords are aware, the main elements of the Bill aim to consolidate legislation in one place. We welcome such consolidation. As the advice from eminent academic studies has shown to both the previous Government and this Government, the UK’s consumer protection has two key weaknesses: uneven enforcement and excessively complex law. If the Bill goes any way to properly addressing those weaknesses and that complexity, it can only be a good thing.

However, many important opportunities were missed to improve the Bill in its passage through the other place, as noble Lords have said. There were opportunities presented by amendments from Her Majesty’s Opposition, such as those to ban double charging or the outmoded and unfair logbook loans regime. There was the opportunity to legally assist consumers who have signed up to unfair contracts that are now sinking them into debt. As president of the Trading Standards Institute, there was also my own particular interest: the opportunity to restore the powers which trading standards officers currently have to investigate counterfeit or potentially dangerous goods. There were also several other amendments. Those were lost opportunities because of being voted down or lack of time in another place. However, I am sure that the Minister will not be surprised to learn that that is not the last he will have heard of such amendments.

We are debating the Bill at a time when people’s living standards are still under great pressure. Even those households still in employment are very often on low wages and unable to keep up with cost-of-living rises. The years of austerity have, yes, made many consumers cannier and more aware of where to get the best deal or find out more about their rights. Yet those years have also seen mounting debt, as the noble Lord, Lord Alton, has just set out. Those years have been a time when food bank use has increased dramatically and they have seen school breakfast clubs feeding many more children. So it is important that this Bill meets the actual and diverse needs of consumers today. The fact that the consumer landscape currently is more disparate and less statutory than it was four years ago does not help. We continue on this side of the House to raise questions about oversight and accountability in that consumer landscape.

In preparing for this Bill I have spoken to many in the advisory and enforcement community. The trading standards community welcomes the Bill and, like the Government, sees the crucial link between confident, informed consumers and a growing vibrant economy. That is why, like so many of us, it wants to ensure that the Bill is in the best possible shape to assist consumers to help themselves whenever possible, but to have the right powers and tools in place to be able to deal effectively with serious cases when consumers fall into dispute.

A number of key amendments to the Bill would both empower consumers and realise the Government’s intended ambitions. One would be to increase transparency and trust for consumers online. Many noble Lords have spoken about the increase of business online. Buying goods and services from the internet is growing at a phenomenal pace and, with access to information never having been so freely available, this in turn starts to shape how consumers make decisions about who to buy from. The most trusted recommendations for buying come from people we know or from other consumers online. The growth of this third party endorsement and information brings new problems, such as fake reviews, undisclosed competitor blogs and reviews, and a plethora of confusing accreditation schemes.

With information of varying kinds being such an important factor in allowing consumers to make an informed choice, surely the opening up of public data would serve as a valuable tool for consumers. Data from the Citizens Advice consumer service or the complaint data held by local authority trading standards officers about local traders could serve as an invaluable source of information and would give consumers a trusted steer with which to make decisions.

There is nothing to stop public enforcers publishing this kind of data and material, subject to there being an express right to do so. A powerful step forward for consumers would be for this Bill to make provision for such an express power. Such a power already exists for the Office of Fair Trading in the Enterprise Act 2002. Will the Minister look at that possibility in this Bill?

Other key issues that could strengthen the Bill include the removal of disincentives to action when it comes to enhanced consumer measures. Yes, we welcome the provisions in the Bill to give consumers redress, which are potentially quite powerful. However, our concern would be the possible modest take-up of such provision. The new measures are an extension of existing provisions within the Enterprise Act 2002 which allow enforcers to take legal action in the event of unfair trading. Use of these measures has, in the past, been modest at best, through a combination of complexity of process, cost and risk to enforcers. It would be a pity to have well intentioned legislation ignored or underused because of those disincentives. No doubt, again, we will return to this in Committee. Up to now, plans for the implementation of the Bill and education for consumers and businesses about it have been undercooked. I know that there is now an implementation document—my noble friend on the Front Bench has referred to it—but it has only just been received. We will be looking at it to see if there are any firm proposals to invest in a specific campaign to raise awareness of the Bill, as the Bill will bring an instant gap in understanding for many consumers and businesses.

My penultimate point looks at the section of the Bill that deals with powers of entry—or “48 hours”, as the Minister’s shorthand would have it. Several noble Lords have already raised this issue in the debate. We have yet to see any substantial evidence that should lead the Bill to alter the present investigatory regime undertaken by trading standards officers when it comes to visits to traders’ premises. I believe, as does trading standards, that the new provision to serve notice 48 hours before an inspection can be carried out, except where an exception can be made, is a real step backwards in consumer protection. Yes, the Government have made some changes to this area since the first draft of the Bill, but many of us do not believe that those changes have struck the right balance between the right to carry on a business unimpeded by officials and the right to protect consumers and honest businesses, which of course are the vast majority of businesses.

This relaxing of the focus on potentially fraudulent traders goes against the whole trend in another part of consumer protection; I am of course talking of food safety. Quite the opposite is happening there. Since the horsemeat scandal, successive government reviews, the European Commission and consumers alike are proposing more unannounced inspections and sampling as a solution. Indeed, the Government’s own review of food safety powers concluded that the use of unannounced inspections is proportionate to the risks involved and has left the current powers of entry available to trading standards officers untouched for the purposes of food safety enforcement.

I have to ask the Minister: what makes consumer fraud through adulterated food any different from any other kind of consumer fraud? The Government’s proposals on powers of entry create risks and a lack of clarity; bring unnecessary costs, as the noble Lord, Lord Borwick, said; add very little value; and could very well act as a disincentive to enforcers to take action. We will without doubt be returning to this point in Committee, which I am sure will be about as welcome to the Minister as Jean-Claude Juncker appearing at the Conservative Party conference.

Lastly, it is not possible to talk about the impact of the Bill on our regulatory system without raising once again the parlous state of trading standards budgets, which, according to the TSI’s recent workforce survey, have fallen by approximately 40% in real terms from 2010-11 to 2015-16. The number of staff employed in trading standards has fallen by 45% in England and Wales between 2009 and 2014, and by 52% in Scotland between 2009 and 2012. These results show that in some areas of the country trading standards services have become unsustainable. It is time for the Government to get a grip and find strategies to at least stem the decline of a UK enforcement service that has been one of the best internationally for over a century.

I am sure that the Minister is a good listener, and I look forward to the many debates that we will have in the coming months to strengthen the Bill as it moves through its stages in this House.

16:49

[Lord Clement-Jones (LD)]

My Lords, I very much welcome the Bill and pay tribute to the work of my honourable friends Jenny Willott and Jo Swinson in particular. I hope that the Bill eventually gains the same stature for digital content as the landmark Sale of Goods Act 1893 achieved in its time in consumer protection on the sale of physical goods. In this context, I am absolutely delighted to see the noble Lord, Lord Borrie, in his place. As the author of The Consumer, Society and the Law, with Professor Aubrey Diamond, he was required reading for ignorant law students, and many subsequent law students, like me.

The Bill achieves the feat of being both pro-business and pro-consumer by giving greater clarity about rights redress and enforcement to all concerned. As we have heard, the Bill has of course undergone extensive pre-legislative scrutiny, and the Government have responded comprehensively to many of the recommendations made by the BIS Select Committee. However, there are still quite a number of outstanding issues. There is the general question of whether software should be treated as content. Software has its own directive in copyright law—the software directive. The question is therefore whether software should have special provisions in consumer law, and whether those should be reflected in Chapter 3 of Part 1 of the Bill.

As the impact assessment makes clear, software is special. It states:

“Bugs are considered standard in digital content on issue”.

The Explanatory Notes also recognise that, but the legislation does not. As Professor Bradgate said in his report for BIS:

“Even with extensive testing, it is quite common, and an experienced computer user will be aware of the fact, that the complexity of modern programs is such that bugs in the program are likely to manifest themselves throughout the program’s lifetime. Modern complex programs therefore need regular updating and patching to correct bugs and/or other potential weaknesses in the program as they arise”.

There is therefore a strong area of concern in the software industry which relates to the implied terms as regards “satisfactory quality” in Clause 34, “fitness for purpose” in Clause 35 and correspondence to description in Clause 36. For example, in Clause 34—as techUK, one of the bodies representing the industry, says—the term “minor defects” is too broad. What is the distinction between a bug and a minor defect? Likewise, Clause 36 does not recognise the evolving nature of software, where functionality may change over time.

Plainly, breach of any of those requirements gives rise to a right of repair or replacement; the right to a price reduction or a refund; and a potential right to the measures referred to in Clause 46, which itself does not recognise the particular context in which software is often supplied. In addition, and very significantly, the effect of Clause 47 is that liability under most of these provisions cannot be excluded or restricted. The Federation Against Software Theft suggests that a more equitable approach would be to permit the exclusion or restriction of liability to the extent that it is reasonable to do so, taking into account factors analogous to those under the Unfair Terms in Consumer Contracts Regulations. That would enable the courts to develop a fair and equitable system on a case-by-case basis.

In summary, the overall difficulty with all the new implied terms as drafted is that they do not appear to cater explicitly for the presence of bugs. There is a real danger that an ordinary reader of these provisions may well be led to conclude that digital content containing bugs is not of satisfactory quality, fit for purpose or as described. Clearly, other forms of digital content are not expected to contain bugs, but that brings into question again whether software should be treated differently under the Bill. It is disappointing, too, that we can introduce these digital quality provisions only for the UK. It is absolutely crucial that we build a European single digital market with a common consumer regime.

I welcome the greater role envisaged in the Bill for trading standards officers, but like many other noble Lords, I have concerns about whether these powers are adequate for the digital age, particularly in terms of powers of entry. Not just trading standards officers but many suppliers of software believe that new requirements to serve advance notice of an inspection will act against the interests of consumers and businesses. Trading standards officers use their powers under the Trade Marks Act 1994 and the Copyright, Designs and Patents Act 1988 to enforce the criminal provisions of these Acts for counterfeit and pirated software. If notice routinely has to be given, then infringing software will be much more difficult to track down and identify.

The current power to inspect without notice has resulted in illicit copies of software being removed from possible purchase by unsuspecting consumers. Digital evidence can be destroyed easily; these changes may deter trading standards officers from carrying out checks and certain illicit activity may slip through the net unnoticed. By contrast, as we heard from the noble Baroness, Lady Crawley, and as the Trading Standards Institute says, reviews of food-safety powers have left powers of entry for trading standards officers untouched in this area, after concluding that the use of unannounced inspections is proportionate to the risks involved.

There are also some omissions from the Bill, some of which were debated in the Commons and about which we have heard today. I will also attempt to test the Government’s intentions in a number of areas. Look-alikes or misleadingly similar packaging is unfinished business from the Intellectual Property Act and is clearly a consumer issue. So-called parasitic copies are potentially unlawful under the existing consumer protection regulations as they mislead consumers. As I said when we debated the then IP Bill, the lack of enforcement of the CPRs appears to be at odds with the unfair commercial practices directive’s requirement for member states to provide adequate effective remedies against unfair practices. Earlier this year BIS launched a consultation on the enforcement of the CPRs for these issues. Is it not time for a new clause to be inserted in the Bill that would give brand owners the right to take private civil action under the consumer protection regulations?

There is then the whole question of ticketing abuse, which was dealt with so ably by my noble friend Lady Heyhoe Flint. Increasingly—as Channel 4’s “Dispatches” investigation and the BBC’s “Watchdog” have shown—professional secondary ticketing touts buy tickets solely with the intention of denying them to real fans, to whom they then resell their tickets at inflated prices. With internet ticket selling becoming more streamlined, touts are able to use sophisticated computer systems to buy large volumes of tickets automatically, seconds after they go on sale. That often means that it is practically impossible for genuine fans to access the event. An artificial shortage of tickets and an inflated secondary market are created. Content providers gain no share whatever of the inflated prices charged.

As the All-Party Group on Ticket Abuse—of which I am a member—noted, that market does not adhere to the same principles of transparency and consumer protection as other markets. Members of the group believe, as I do, that the large-scale, unauthorised resale of event tickets is against the interests of both consumers and content creators. We believe that the solution is greater transparency in the secondary market and a greater ability for event holders to control who can resell their tickets. The Metropolitan Police report drawn up by Operation Podium after the Olympic Games stressed the need for an open and transparent system for ticket reselling, with clear and appropriate regulations. Secondary websites should be required to publish full details of the ticket being offered, including the original face value, seat number and location. They should identify the seller, state whether or not the seller has the permission of the originator to resell the ticket, and declare where the tickets are being listed by the event organisers.

I welcome the revised guidance on consumer contracts referred to by my noble friend, but for all the reasons she adumbrated, they are not adequate. They should be reflected in statute.

There are two final further aspects. There is a need to examine further whether we have the balance correct between writers and performers and those with whom they contract. We looked at those issues during the passage of the Enterprise and Regulatory Reform Act. Is now not the time to revisit the question of whether the Unfair Contract Terms Act 1977 should continue to exclude contracts that relate to intellectual property?

Finally, why cannot the Bill include provisions to enable supplier-switching for mobile consumers? I look forward to my noble friend’s response.

16:59

[Baroness Oppenheim-Barnes (Con)]

My Lords, I have no doubt in saying that the Bill before your Lordships today is the most important piece of legislation, and certainly the most welcome, since the early 1970s, when the Office of Fair Trading was set up. I am really moved to see on the Front Bench to my right the person who was the original and first Secretary of State for Consumer Affairs in the House of Commons in our history. I am very grateful that he is attending the debate this afternoon.

The Government are to be very warmly congratulated not only on the production of the Bill but on their generosity in terms of the time that has been given to the proceedings in other places—I have read the reports of them all. In particular, the introduction of expert witnesses into the Committee proceedings in the other place and the presence of legislative screening and monitoring were of very great benefit and will continue to be so.

The Bill has been warmly welcomed by all consumer organisations, some of whose comments I will refer to in a few moments. Certainly none of the Bills that I was responsible for introducing in the late 1970s and early 1980s is alive today. They are as dead as dodos. That is because today a majority of consumers still do not know their rights or how to pursue those rights. That became very clear when the expert witnesses contributed to the Committee stage in the other place. From their very wide experience, they said that approximately 75% of all consumers still have no idea of their rights, and if we are not very careful indeed, that will be the case when this Bill is enacted.

I knew that that was a problem but I failed completely. I introduced consumer information packs into schools. I managed to get the money from our then Government to do so, although that was not easy. I taught some of the information in various schools and found that the children were very interested—they got the point immediately. They said things such as, “My mother has bought a knife that says it’s very sharp but it doesn’t cut anything”. I was able to ask them, “Do you think that it was fit for purpose?”. That was a perfect example, but it is not as easy as that. I am afraid that getting into people’s minds exactly what they may be able to do is much more complicated.

I know of all the consultations that have taken place about what remedies will be best. My view is that a clear presentation of the new rights in the Bill and of the responsibilities involved must be shown at the point of sale—not after the sale, not in later contracts and not in anything else. That must be the principal object throughout the Bill or the success that I believe it richly deserves will be greatly diluted. Just as important will be easy access to advice and support when things have gone wrong and people know they have gone wrong. My noble friend must have been as disturbed as I was to read that some local authorities are now cutting funding to trading standards in their areas. The workforce which is being asked to do more and more work will be reduced in number at a time when it will be expected to do more as a result of this Bill. I was shocked to find out that already in some areas trading standards offices can be approached only online. You can imagine where that would have left me. This cannot be allowed to happen and would clearly undermine the success of the Bill.

I hope I have established that a key factor is very thorough infrastructure in all areas from the beginning to ensure that the benefits that consumers deserve are delivered. We are very blessed in this country with a large number of very highly respected consumer organisations whose opinions have been expressed widely. In particular there is our excellent National Consumer Federation, which represents the views of all the other consumer bodies in the country and therefore is possibly one of the most important witnesses to the Bill. One aspect of its charter, which I particularly welcome, is crucial and overdue. It is the need to define much more clearly the role of the regulators. The regulators are powerful and are one of the most fundamental bodies representing the interests of consumers due to the nature of the markets we are talking about.

However, sometimes one gets the impression that when regulators have delivered their ruling involving perhaps a huge £1 million fine to the delinquent company they are interested in all the things they have found out—and want above all else to punish the firm so that it should be a lesson—but they do not really look at the consumer role in these situations. For example, with the billions in fines, surely there is a case to be made for consumers being given a rebate of their fees so that they are the recipients of the benefits that should be coming from the regulators. I think the National Consumer Federation has put this very clearly and has said among other things that it does not think that regulators always ask the right questions and that if they consulted consumers more about their experiences it might alter the balance and be more attractive. Certainly I hope it would result in some cases of refunds being made to the customers who have been so badly hurt.

What I welcome very much in the Bill is rather unusual. My friends will be surprised to hear me say that I welcome the new EU directive which seeks to cover, for the first time, consumers who make purchases online. I did not know that they were not covered. If I did not know that, I think I would be shocked and horrified if I tried to calculate how many other consumers in the country are unaware that they are not covered. It is very good that the directive will be implemented earlier, which I hope my noble friend will confirm, and that eventually it will be incorporated into the Bill.

The noble Lord, Lord Borrie, will be aware of another crucial EU directive. The last that he and I heard about it was in a debate on the financial industries. The Minister said that the Government were actively pursuing negotiations on the directive, which, at last, half-heartedly agrees that the cost of a loan can be displayed below the AER, which no one understands. I challenge anyone who understands it to stand up and explain what it is. I would be delighted to give them the time. It will allow the money cost to be displayed but only if it is in smaller print than the AER. I hope that the Government will hasten to conclude their negotiations on that matter, which will at least bring a small help to consumers.

Clearly, a good deal is to be done in Committee. I am not yet a “professional oldie” but I am well on the way. I therefore hope that I will be forgiven if I say that I do not propose to play an active part in those proceedings—that may be welcomed by many—as I realise how out of date I am. Towards the conclusion of the deliberations in the other place and after a request from a Member, the Minister, the excellent Jenny Willott, who did so well throughout, said:

“The Human Fertilisation and Embryology Authority set up an expert panel, which has conducted three reviews”.—[Official Report, Commons, 16/6/14; col. 922.]

The Member wanted reassurance that the HFEA would be covered. When we got to that, I knew the time had come for me to assume a back seat. Things have obviously gone too fast for me in this area. As I recall, there was a friendly reply. I warmly welcome the Bill and I congratulate the Government. I wish the Bill the speedy and successful outcome that it deserves.

17:13

[Baroness Drake (Lab)]

My Lords, the focus on updating and strengthening consumer law certainly is to be welcomed. I agree with the Government’s rationale for the Bill—that empowered consumers will make markets work more effectively and drive economic growth. However, there are provisions with regard to services which leave me with some concern. I hope that these matters will be considered further in Committee. As my noble friend Lady Hayter identified, under the Bill the statutory rights of the consumer that are implied in a contract between consumer and supplier are not fully aligned as between the sale of goods and the sale of services. Goods supplied must be “of a satisfactory quality”, whereas services must be provided,

“with reasonable care and skill”.

The liability standard for services is based on fault rather than on liability for satisfactory quality, which is an outcome measure, and I am concerned that it may not sufficiently support consumer protection and market effectiveness in the provision of services. It may prove more difficult for consumers to prove that a service has not been provided with reasonable care and skill. It focuses on the way in which a service is carried out rather than on the quality of the end result. It could fall short of reasonable consumer expectations on quality of outcome. A “reasonable care and skill” standard places greater emphasis on compliance with rules rather than on outcome for consumers.

In certain service sectors and markets, the asymmetry of knowledge and understanding between trader and consumer is extensive. In financial services, evidence frequently demonstrates that while provision of services may comply with the regulatory requirements, the product supplied often falls short of delivering a desirable quality for the consumer. A reliance on reasonable care and skill would not address the mis-selling or product design problems that have persisted in the sector. It is not the absence of skill that causes these problems. Something else goes wrong, such as a conflict of interest, complexity or lack of transparency, any one of which leads to consumer detriment.

A Bill that sets a statutory liability standard in the provision of goods on quality, with its focus on outcomes, and in the provision of services on reasonable care and skill, with its focus on compliance, risks a two-tier outcome to consumer protection. An argument frequently mobilised against an outcomes-based quality standard for services is the risk to traders of being held to unrealistic expectations by consumers, but this can be qualified by reference to reasonable expectations by a consumer. It should be remembered that the scale number of complaints from consumers comes from sectors such as energy, broadband, mobile phones and financial services.

I am also concerned by the possible continuing ambiguities in how the Bill addresses unfair contract terms. The court may assess a contract term for fairness unless it falls into a certain exempt category, such as terms that relate to the main subject matter of the contract or the adequacy of the price. The 2009 Supreme Court decision in the case of the OFT v Abbey National, which held that charges for unauthorised overdrafts were exempt from assessment for fairness because they were price terms, gave rise to uncertainties about whether ancillary charges could be assessed for fairness. This created a situation where, to use the Government’s own words:

“Some protection in law is necessary because consumers often cannot, or do not wish to, investigate the detail of every contract term before they sign-up to an agreement”.

This Bill introduces a requirement for “prominence”. For the core terms in a contract to be exempt from assessment for fairness by the courts, a term must be prominent and,

“brought to the consumer’s attention in such a way that an average consumer would be aware of the term”.

The emphasis on prominence is to be welcomed. However, any deficiencies in what the prominence requirement embraces could give rise to new uncertainties and disadvantage for both the consumer and the goods companies. I share the concern of the BIS Select Committee that bringing something to the consumer’s attention is not the same as a consumer appreciating its significance. The current wording of the Bill is unclear as to what would be sufficient to meet the prominence test for core contract terms. If it is too weak, the consumer’s level of understanding or behavioural bias may leave them not appreciating that the terms are unfair but the court could not intervene as to their fairness. Which? and the Law Commission have both stressed the importance of getting the definition of “prominence” right, and the OFT commented:

“Transparency alone cannot turn a substantially unfair term into a fair one”.

I also note that the Association of British Insurers and the Building Societies Association have stressed the importance of achieving clarity on what is needed to meet the prominence test, particularly given the increasing regulatory requirements on consumer disengagement and key information. Consumer products and markets are becoming more complex, which increases the risk that consumers do not understand the significance of certain information; asymmetries of knowledge and understanding between trader and consumer can create incentives for traders to frame information in certain ways. Consumers’ behavioural bias is very powerful. Consumers focus on the main element of a contract. If the most important goal is, for example, buying a house, they will focus less on the detail of the insurance policy for that house. The closer the consumer gets to signing, the less likely they are to walk away.

Prominence is very important and welcome, but its efficiency in providing a remedy both for unfairness and for a weak and ineffective market depends on how a consumer’s attention is drawn to a term and their understanding of its significance. What is required in the prominence test is something to be explored further in Committee.

Finally, echoing concerns articulated by my noble friend Lady Crawley, in order to deliver competitive markets there is a need to increase the range of measures available to enforcers under the civil law enforcement regime, as the Government have acknowledged. It is to be welcomed that the Government have increased and extended the range of measures available not only to the public enforcers but to private enforcement bodies. Good businesses need safeguards as to how these powers will be used and the Bill sets obligations and conditions that enforcement bodies have to meet to be allowed to use these civil law enforcement powers.

However, concerns have been expressed that the detail of the safeguards built into the Bill, particularly those in Schedule 7, may not provide the right incentives for enforcement bodies to utilise the extended civil law enforcement measures. Private enforcement bodies may be deterred by the costs regime, for example. Public enforcement bodies may consider that they face less organisational risk if they stick to the criminal law route, particularly if the trading standards bodies feel they have insufficient resources to take the potential risk around a cost regime. It would be unfortunate if some of the detailed provisions in the business safeguards as drafted actually became deterrents to enforcers utilising the otherwise positive changes in the civil law enforcement regime contained in the Bill. That is something to be explored in Committee.

17:22

[Baroness Howe of Idlicote (CB)]

My Lords, I am very pleased to be speaking in this important debate. Like other noble Lords, I firmly support the general principles underlying the Bill. It is crucial that consumers have greater choice, transparency and rights in the public services that they receive, and the Bill provides that.

The current approach, which involves setting out consumer rights across various pieces of legislation, between which there is on some occasions overlap and on other occasions tension, does not make for clarity. A call for evidence in the consumer law review in 2008 revealed strong support across the board for consolidating consumer legislation to make it clearer and more accessible. Respondents highlighted a number of benefits that a rewrite would bring, such as: removing discrepancies and inconsistencies; greater use of plain English; greater awareness of rights, remedies and obligations; greater flexibility; future-proofing and the aiding of business growth. The Bill provides these, too. As the Government have made plain, consumers who are well informed about their rights and what they are buying are more confident, and are more likely to spend money well, getting better deals or buying new goods and services.

There are of course aspects that consumer groups and voluntary organisations that have been in touch with us would like to improve even further. As the noble Baroness, Lady Bakewell, and my noble friend Lord Alton of Liverpool have rightly said, they would like the Government to use the Consumer Rights Bill better to protect children by banning payday lenders from advertising on children’s TV.

I am disappointed that the Government have not yet introduced a financial blocking measure in relation to transactions between people in the UK and online providers based outside the UK that do not possess a Gambling Commission licence. The Gambling (Licensing and Advertising) Act that we considered in the previous Session introduced important legal changes in relation to online gambling. The Government presented the Bill as a piece of legislation motivated very much by concerns for consumer protection. The Act requires that any online gambling provider wishing to access the UK market from another country must obtain a UK Gambling Commission licence, which of course sounds excellent, but there is a problem. The provision of this new licensing regime can enhance consumer protection only if it is harnessed to another provision that securely prevents online providers without a licence from accessing the UK market.

A second provision, however, was absent from the Bill. This problem was raised repeatedly in this House and in the other place. On Report, I moved an amendment to prevent unlicensed gambling providers selling to consumers in the UK. This has been termed “financial transaction blocking”. The amendment had the effect of requiring financial transaction providers not to service transactions between people in the UK and online gambling providers based outside the UK without a Gambling Commission licence.

The Government responded by announcing that the Gambling Commission had spoken to three financial transaction providers who had agreed to introduce financial transaction blocking on a voluntary basis. This was welcome news. At the meeting that I had with the Minister on that occasion, I was told that although the Government did not want a financial transaction blocking clause in the gambling Bill they would be open to making such a provision in a consumer protection Bill. Well, it so happens that we have a consumer protection Bill before us, but as I say no financial transaction blocking measure is proposed in it.

It is clear to me that while a voluntary agreement with three financial transaction providers is very welcome, what we need is a statutory approach covering all providers of financial transaction services. I am advised by online gambling providers that, if financial transaction blocking is not provided universally through law, financial transaction provision will simply migrate to providers that are beyond the voluntary agreement. I would like to ask the Minister whether he would update us on any developments in relation to the voluntary agreement. Are the Government willing to introduce an amendment to this Bill to make provision for financial transaction blocking in order to protect British consumers from unlicensed online gambling operators?

I turn to child protection from adult material and the system of age verification for 18 and R18 content online. In March this year, the online video watchdog ATVOD produced a report on children’s access to pornography. It reported that a staggering 200,000 under-16s viewed internet pornography in a single month in 2013. The study showed that one in five of all UK males aged 12 to 17 who went online looked at an adult website; the same age group was responsible for more than 110,000 visits to one pornographic website alone. The report went on to say that,

“it is very likely that the scale of use remains under-stated”,

because mobile phones and tablet computers were excluded from the research for technical reasons; only desktops and laptops were considered. ATVOD commented that the videos people looked at were similar to R18 videos that can be sold only to adults who visit sex shops.

ATVOD called on the Government to make it clear that adult websites must have a system of age verification in place to guarantee that only internet users aged 18 or over should be able to access material rated R18 by the British Board of Film Classification. But if we are serious about child protection, the system of age verification should block not just R18-rated video on-demand material but 18-rated video on demand material. I understand that the Government have suggested that they will aim to tighten up the Communications Act 2003 to make it plain that the providers of R18 video on-demand material must do so under a system of age verification. What steps have the Government taken so far, and does the Minister not agree that it would make no sense to require age verification in relation to only R18-rated material and not 18-rated material?

Finally, I turn to financial transaction blocking for adult online content. This will ensure that financial transaction providers do not process transactions between internet users in the UK and websites based outside the UK that provide 18 or R18 content without a system of age verification in place. This is a fundamental measure, which will cut the flow of money to such websites, ensuring that they act responsibly and introduce a system of age verification. Beyond filtering, what steps are the Government taking to protect British children from tube sites based outside the UK that show R18 material without any system of age verification? Does the Minister not agree that action must be taken and that financial transaction blocking presents the best way forward?

Like other noble Lords, I am looking forward to a lively discussion—and, I hope, some changes—during the next stages of this important Bill.

17:33

[Baroness King of Bow (Lab)]

My Lords, I welcome the Bill but I must repeat what several noble Lords have said, notably my noble friends Lady Hayter and Lord Wills, that it seems to represent something of a missed opportunity. It was described by the shadow Minister for Competition and Consumer Affairs, Stella Creasy, as,

“a once-in-a-Parliament opportunity”,—[Official Report, Commons, 28/1/14; col. 780.]

but it seems that we might be at risk of squandering it. As the noble Lord, Lord Alton, said to the Minister, we should not limit the ambitions of the Bill to consolidating previous law. It really should not be just a compendium of consumer law; it should be an extension of consumer power.

Many areas of the Bill are of great interest and I look forward to deliberations in Committee, particularly on digital goods and the huge changes under way as Britain becomes a digital nation. We are already the country that buys more goods over the internet than any other except the United States. That means there are massive societal changes across the board and those changes will also be felt very keenly in the area of consumer rights.

I want to focus on an area that was touched on by my noble friend Lady Hayter but which we have not dwelt on in this debate so far—the public sector. The Government have belatedly said that the public sector will be included in this Bill and so some of the rights in the Bill will extend to tuition fees, childcare vouchers and personal care budgets. So from now on in these areas, if a service is substandard, parents, patients or students can get a price reduction, a refund or “a repeat performance”. The mind boggles at the prospect of university lecturers providing repeat performances of substandard lectures on, say, Aristotle. Aristotle’s students would have heard him say:

“In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme”.

I guess Aristotle just could not imagine Wonga. And if he was teaching today, his students might ask for a refund, because in our democracy the poor clearly do not have more power than the rich. On the contrary, Aristotle would find it really surprising, as I do, that in our democracy the poor often pay more than the rich for the same product. This counterintuitive fact was demonstrated by Consumer Futures and the Joseph Rowntree Foundation, whose research shows that low-income families spend 10 pence in every pound on a poverty premium. Another way of looking at it is that they spend £19 a week extra on average because they pay a higher price for the same product.

Someone who has done more than anyone to expose this poverty premium is my honourable friend Stella Creasy, and I pay fulsome tribute to her groundbreaking work defending consumer rights. However, after following the progress of the Bill in great detail in the other place, she tells me that she still has not received any clear indication from the Government on how this Bill’s provisions will apply to public services. Of course we welcome the Bill’s aims but we need to understand how it will work. Can the Minister let us know which service contracts it will cover? For example, can the Minister let us know if it will cover the licence fee? I would also love to know whether it will cover prescription charges. Even just a hint from the Minister in these areas would be welcome.

I have a very useful briefing note from Unison, which states that it believes in principle that people should have the choice to exercise their consumer rights in public services, but that it must be done in the right way in a collaborative framework. I am sure we would all agree with that, not least because there are already many complaints mechanisms within public services and we will need to be careful that these are not inadvertently undermined or bypassed by the new set of rights. If you read the Unison brief, it becomes readily apparent that this is a vastly complex area. The key point that shines through is that we want to prevent a two-tier complaints system where richer, paying citizens can bring individual litigation that might secure them more favourable rights than others without those means. Can the Minister give us any indication of any impact assessment that might have been carried out in this area?

My noble friend Lady Crawley was right: the Bill has not yet got our pulses racing—we live in hope. However, a lot of the issues it deals with make our blood boil. We are talking about premium charges on telephone helplines that leave you stranded for what feels like hours at a time; nuisance phone calls, which in certain areas have blighted lives; people making profits out of the misery of payday loans; and ticket touts profiting at the expense of genuine fans. Basically, we are talking about being ripped off, either to a small degree or to a degree that ruins your life.

As my noble friend Lady Hayter said, this Bill should balance the current, unequal situation, which too often puts consumers in a weak position. Too often, consumers find themselves powerless on the end of sharp practices. For the last time today—I know that I have quoted her quite extensively—I shall quote the shadow Consumer Affairs Minister, who said:

“The fact that nothing in the Bill is of particular concern tells us everything we need to know about its narrow ambitions”.—[Official Report, Commons, 28/1/14; col. 780.]

I hope that the Minister and the Government will be more ambitious. As Aristotle also said, “Hope is a waking dream”. We all live in hope that the Government will take this once-in-a-Parliament opportunity to end the unfair nightmare that too many consumers face.

17:40

[Lord Whitty (Lab)]

My Lords, I apologise to the House for speaking in the gap. I thought that I had put my name down, but there was obviously a failure to complete a digital transaction.

I congratulate the Government on the main themes of the Bill, which brings together, clarifies, consolidates and makes more transparent a lot of those rights that exist for consumers. That was a very useful job; they took a long time to get there but they are to be congratulated on it.

My main point relates to what to my noble friend Lady King just said. A Consumer Rights Bill should also alter the balance of power between providers and consumers. In a number of respects, it does not do that. I shall be as quick as I can in listing them.

Other things that the Government are doing have undermined the ability to monitor consumer detriment. The information that the Minister gave me during the passage of the Public Bodies Bill and the Enterprise and Regulatory Reform Bill indicated a cut of 20% to Citizens Advice’s resources for dealing with precisely this area of general consumer law. We have heard that trading standards have been cut significantly across the country, in some areas by 40%. That greatly undermines their ability as enforcers.

We have also reduced the degree of national co-ordination. What used to be the OFT’s responsibility for major scams has now been devolved on to those already hard-pressed trading standards. There is no national oversight of it. Likewise, the role of consumer education and consumer information—which the noble Baroness, Lady Oppenheim-Barnes, rightly underlined—used to be with the OFT; it is now virtually nowhere except the little bits that Citizens Advice can do. The noble Baroness also referred to the inadequacies of the individual sector regulators in engaging with consumers about their rights.

My noble friend Lady King also referred to the need to set up or use the right machinery to ensure that we do not undermine what is already good about the relationships between users and providers within the public services.

The Bill provides for collective redress by consumers in one particular area: breaches of competition law. I have never understood why that cannot be extended, except by trading standards taking up the case, right across the board. A lot of these issues are collective. I have pressed successive Governments to write collective processes and collective redress into all Bills that deal with consumer matters, but we still do not have it here.

There is then the issue of alternative dispute resolution. I appreciate that the EU directive on this has yet to pass through its processes—that will be an important point—but we now have a situation where alternative dispute resolution is the main recourse. It is so difficult and expensive for many people to access the courts that the ombudsman system and parallel systems are the main way in which consumers can resolve unresolved disputes, yet we do not have an overall strategy on ADR. I should like to hear from the Minister not only how the Government propose to transpose the directive and in what timescale, but what the general direction of government thinking is. There should surely be a comprehensive system of ADR in all markets and for all consumers.

There is much that is positive in the Bill, but unless we have proper monitoring and enforcement, the fact that people may be better able to access and understand their rights will go for nothing.

17:44

[Lord Howe of Aberavon (Con)]

My Lords, I am glad to take this opportunity to say something that I said quite recently and identify an important aspect of consumer rights. The debate on this subject gives me great excuse to return to something I referred to the other day: namely, our total failure to change our system of measurements to a system which we had for a period, when we took account of the metric possibility. That is where we have to go.

There is no doubt now that we have a double shambles in the absence of any competent, comprehensive system of weights and measures. One can give endless examples of it. We have metres and kilometres for athletics but miles per gallon for cars. More important still, the metric system is used in schools—it is what pupils are taught—but, all too often, pounds and ounces are used in the market. Manifestly, that destroys consumer relations. It increases costs, confuses shoppers and managers, leads to serious misunderstandings, causes accidents, wastes our children’s education and, frankly, puts us all to shame.

Almost 800 years ago, Britain’s first charter of human rights, Magna Carta, proclaimed that there should be one measure of wine throughout the whole realm, one measure of corn and one unit of cloth. That was the principle that we should have established. In fact, we have been dithering for almost 150 years. As long ago as 1862, a Commons Select Committee unanimously recommended that we adopt the metric system. A century later, in 1965, the decision was finally taken to go metric over the next 10 years. The noble Baroness, Lady Oppenheim-Barnes, kindly referred to my presence on her right shoulder. We were among the first two consumer Ministers and therefore sing a common song, if she will allow me to say so.

For a very long time, we had shambles. We then did go metric for 10 years but unfortunately, the Metrication Board, when I was Chancellor of the Exchequer, greedy to find ways to save money, produced its final report saying that it had completed its task, so I readily abolished the Metrication Board, so I am not only clear in my sights of the problem and solution here but clear of my guilty responsibility for having allowed it to happen. Plainly, we cannot go on as we are with two confused, competing systems. It would be madness to go backwards, but also madness to disregard what the rest of the world has done.

The United States has talked about this a lot, but not taken any measure to move in the right direction. It sent one remarkable missile towards the moon. One mistake was made in the design of that missile. I think that the cost was something of the order of $500 million. That was because one crucial measurement in the wrong system was injected into the construction of the missile. We have not yet achieved that scale of disaster, but we have been foolish in having disregarded the fact that our Commonwealth has, almost completely, done the right thing. Australia, Kenya, New Zealand, South Africa, India and Jamaica have long completed the entire change, and even Ireland, our lovable neighbour, completed the process as quickly as the other countries.

This is not too much of an interjection or injection that would be unjustified in this debate; it relates wholly to consumer rights and to all other rights, rightnesses and common sense. When I mentioned this only a few days ago in this House, the noble Lord, Lord Desai, responded rather cautiously. He said:

“The first is to try out a somewhat novel idea, and maybe it will be one for the Government to take away and work on, and the second”—[Official Report, 10/6/14; col. 303.]—

[Baroness Jolly]

I remind the noble and learned Lord that, in speaking in the gap, he is restricted to four minutes.

[Lord Howe of Aberavon]

Four minutes? I have five seconds left. Disregard the Government’s rejection of my argument in the last debate; listen to it again, this time more effectively; and this time agree with me, not disagree with me.

17:50

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank all speakers for contributing to the debate this afternoon. It has been a very well informed one and one that has helped to pick out and distil for us some of the main issues which we face as we go forward with the Consumer Rights Bill. It is very appropriate that we should have with us the first Consumer Affairs Minister, whose comments we listened to with interest, particularly as he was able to point us back to Magna Carta and the ideas in that about the need for fair trading, on fair coinage and with fair measurement, which are, of course, still very relevant and important issues for us today.

My noble friend Lady Hayter explained, when she introduced the Bill, our general approach to and support for the Bill, limited mainly to its consolidation measures, but nevertheless sincere in that. Although we will be scrutinising with some vigour some of the points in the Bill, we do not want to give the impression in any sense to the Government that we are not in support of what is being said here, because it is a good thing. On the other hand, my noble friend Lady King made a very important point, which is that there are a number of missed opportunities here, since there will probably not be another Bill of this nature for some time. It can be regarded as a once-in-a-Parliament opportunity missed.

My responsibilities are limited to supporting my noble friend Lady Hayter across the Bill, and in particular to picking up on the digital points. I shall not go into detail on them, but the general point we will be making is that the Government are wrong to have ignored the advice of the Select Committee on this matter, which was, in scrutinising the Bill in its earlier stages, that the right approach to be taken for the sales of digital content—some of the largest in the known world and increasing significantly, as many noble Lords picked up on—is that it should be the same as for physical goods. The Government have not chosen that route and we want to check very hard with them why that is the case and how we might improve the Bill in order to get closer to that. There should be parity between rights in the physical exchange of goods and the e-commerce worlds.

A number of noble Lords mentioned our general concern that the Bill is a missed opportunity in that it does not seek to create more trust in the virtual world, where people are increasingly acquiring goods and services, as the noble Lord, Lord Borwick, said, from unknown parts of the world. We do not quite know sometimes where they are coming from, but more importantly, and more relevant to the tenor of the Bill, we need to think harder about what information should be available to all consumers, particularly those in the digital world, at the point of sale. That seems to be a key point at which we must bring together the information required for people to understand what it is they are purchasing, to understand their rights at the time of purchase and what their redress options are. Unless we do that, we are missing a very important trick here.

As has been picked up, the Bill takes a bold step towards the provision of services in relation to consumer rights. It would be good if the Minister could be very clear on this when he comes to respond. This is a really interesting and important point. If, as seems to be the case, the Government are set on going to a stage whereby services provided for a value, including those from public authorities, are subject to the same concerns within the Bill, it is important that we get the tests under which these will be looked at right.

The noble Lord, Lord Stoneham, and my noble friend Lady Drake made good points about the need to think harder about the question of a satisfactory quality test. This was discussed in another place and we think that the test that should be applied is that the goods and services supplied should be “of satisfactory quality”. The Government however, have adopted a different standard, that they must be performed,

“with reasonable skill and care”.

As has already been said this evening, and I think that it is important, that seems to be more to do with how the service has been performed, rather than whether or not the outcomes have been satisfactory. This is something we must return to.

Several noble Lords touched on the question of consumer advice and the need for business education, in the sense of making sure that businesses understood their responsibilities and their need to ensure that they have fulfilled all requirements in relation to consumers who purchase their goods. There is a case for the Bill to be more specific about consumer and business education. We have touched on point-of-sale information, for instance. I hope that the Minister will spend some time explaining what the implementation group is supposed to be doing in this area. A lot of the responsibilities that might have been in the Bill appear to have been offered to that group. What format is it taking? Is it working to a particular timetable and what outcomes should we expect to receive from it? To have further consideration of the Bill in Committee, it would be helpful if we had better information and an understanding of that work.

My noble friend Lord Whitty alluded to the changes that have been made and are ongoing in the Government’s consumer landscape. I think reviews are still needed in some areas but most of this seems to have emerged from review and is now in the implementation phase. One important thing is that many responsibilities which used to lie with the Government are now to be undertaken by independent charities such as Citizens Advice and the Trading Standards Institute, a body whose legal form I am still not quite sure about. However, it seems to have increasing powers and money to do work across the trading standards area. Some of those statutory responsibilities that used to lie with the Government are now with those bodies, to educate consumers and businesses. We will need to spend some time on this as we go through Committee because it is important to understand not only what power but what responsibilities are there, and how they relate to the Government’s responsibilities. At the moment, this is not clear.

When my noble friend Lady Hayter was giving her speech, she ran through a list of specific omissions which she felt could have improved and enhanced the Bill. A number of noble Lords came back to some of those omissions. I will touch on one or two points which still need to be brought through on that. On the question of how consumer rights will be applied in the public sector, if it is true that these rights are now available to those public service users who have acquired services at a reasonable price, how are these rights to be applied? How, for instance, will individual consumers be able to take up responsibilities for challenging university tuition fees that may not represent value for money, for personal health budgets, for the BBC licence fee, for controlled parking zones, for bus fares or for the provision of water and sanitation services? Is this now the world we are in? Can the noble Viscount run through some of that to make sure that we understand, as my noble friend Lady King was saying, exactly what is available as the subject of consumer redress on these matters?

The individual issues may well have been alluded to in debate and discussion but, when the Minister responds, perhaps he could also explain whether he is hoping for a single response from the government departments which are now responsible for responding to consumer interests in these matters or whether there will be variable responses and, if so, how that will be exercised across the piece.

My noble friend Lady Crawley raised the need for data to be more available across the consumer landscape. The issues here are largely to do with the information collected by those who, under the Bill, are responsible for carrying out investigations, such as trading standards officers. It is also important to recognise that much information lies with ombudsmen and with the courts, which have been responsible for implementing many of the measures for which protection is provided. How are we doing on access to data? We went through quite a lot of this in the exchanges over Midata, which was meant to open up this area. We have not seen much of that recently and I think that the Minister was responsible for it at one point, so perhaps he could enlighten us further. Clearly, the anticipation was that this sense in which data would be available to people so that they could exercise their own choices through, say, price comparison sites would be important to better consumer information. I think we broadly support that but we have not had much detail on it. It would be useful to have more information, as well as on the wider question of whether the data held in areas such as trading standards can be circulated and made available to consumers more widely.

My noble friend Lord Wills picked up on the question of nuisance calls and marketing problems which are still very prevalent across the country. We understand that the Information Commissioner, having set up an online reporting tool in March 2012, has had more than 240,000 complaints about unsolicited calls and texts, and Ofcom has also carried out research into this. This is obviously a major problem. It is a pest to the modern world, where the phone calls you receive are never the ones you expect. They are always the ones which offer you things that you could not possibly want or wish for and you have no reason to understand why these people were ringing you in the first place. My response to that is to leave the phone open so that they at least rack up the cost of the call. However, that means that I cannot ring my friends at the same time, so it is a bit irritating. We need to get hold of this issue. It is a modern-day problem which affects vulnerable people in particular, who have difficulties in dealing with it. I hope we will deal with it in the Bill.

Several noble Lords, including the noble Lord, Lord Borwick, and the noble Baroness, Lady Bakewell, raised a question about how we will operate proper scrutiny measures if the trading standards officers are not able to go into premises without giving 48 hours’ notice. The position is changing and several noble Lords have asked the Minister to respond on this. It is obviously crucial to understanding how a redress will happen.

The noble Baroness, Lady Bakewell, also mentioned, as did a number of other noble Lords, letting fees and agencies. This is an area on which we touched in previous Bills but this Bill seems an appropriate area in which to get more action on that.

I was involved in the Olympics Bill and I am therefore aware of the measures that were taken to make sure that ticket touting was eliminated from the process. Indeed, I think it was the Minister who took the Bill through the House on his first run as a Minister here. He will therefore be aware, as I was, about the doubts and reservations that we shared around the House on how this would happen. We resolved it on the day by a slick and effective system brought in by the Olympic authorities, which meant that ticket touting, effectively, did not exist across the whole range of the Games in 2012.

However, on a number of occasions we have had opportunities to think again about this. The Government have not taken up those opportunities despite the fact that police operations in this area seem to suggest that there are criminal actions at work, as the noble Lord, Lord Clement-Jones, mentioned, and that significant amounts of money—either through direct corruption or money-laundering—are passing through a system which now needs the attention of the Government. I hope that we can spend some time on this matter in Committee and get a resolution to it because it has reached a point where it needs to be looked at.

Several noble Lords referred to the need for the Bill to think more closely about the rights of children in relation to consumer activity. Payday lending is particularly worth looking at. There is also the wider question raised by the noble Baroness, Lady Howe, about whether or not we should use the opportunity of the Bill to consider gambling and the opportunities that were not taken up in the gambling Bill to deal with IP blocking and financial transaction blocking. Age verification in relation to child protection could also fit within the Bill. Perhaps the Minister will respond on this point when he comes to it.

Those are a number of points which we will go into in some detail in Committee, where I hope we will have a chance to firmly test the Government’s interests in these matters. If we can make progress together around the House, so much the better for the Bill.

As my noble friend Lady Hayter said, we welcome the Bill in principle. We think it is a contribution towards updating UK consumer law, which it is necessary to do. However, there are real concerns about the underpinning of the Bill. The success of the Bill will be heavily dependent on how consumer rights are upheld through public enforcement at a time when, as we have heard, trading standards departments up and down the country are being significantly cut back and, at the same time, being asked to take on new responsibilities.

As we have heard, a new private redress system will be coming through in relation to mechanisms such as ADR. It is not clear why the Bill does not deal with that—except that it is probably not in the right timeframe—but it is obviously an issue. There is a new link to the Competition and Markets Authority, which has only just established itself. It is not clear yet—although it may be by the time we get to Committee—how and in what way it will work with consumer interests at its heart. We also have to think harder about how the courts will be able to support private and group complaints. We think that one of the important themes that we need to address in Committee is the powers of redress and enforcement that need to be improved if the Bill is to make the sort of difference that it ought to.

As we have heard, the framework of consumer rights is complicated enough, so much so that it is a pity that one of the speakers today felt that she was unable to play a part in the later stages of the Bill; we regret that. The landscape needs to be clearly identified. We know that there is a Competition and Markets Authority and that the transfer of powers and responsibility to Citizens Advice is happening. We know that work is going on somewhere in the Government between now and July 2015 when they are required to implement the ADR directive. As well as the Bill, we have an update coming through regarding the EU consumer rights directive, which has been mentioned, and a number of welcome pro-consumer measures that have come through from the Law Commission recommendations on misleading and aggressive practices, so it is a very complicated area to keep in frame. It might be necessary to spend a bit of time in Committee on being clear about which parts the Bill addresses and which parts it cannot and will not, as well as understanding where the issues that some of us have raised today are being picked up and taken forward.

At the heart of all this work, we have to think harder, as a number of noble Lords have done, about the consumers who are currently overpaying for many basic goods and services and being short-changed by service providers, resulting in excessive costs, because they are not aware of their rights or able to exercise them effectively. We believe that healthy, fair and competitive markets are vital to building an economy that works for both consumers and businesses. In a modern, progressive society, consumer powers are the missing piece of the jigsaw for preventing problems from besetting the public and for opening up creativity and innovation in goods and services. We believe that savvy consumers make better customers for businesses, and that better informed citizens get better outcomes in dealing with the public and private sectors, both for themselves and for each other.

We need a three-pronged approach, which should underlie the discussions. First, there has to be better access to information, to ensure that consumers are able to make decisions themselves that are as accurate and efficient as possible. Secondly, there has to be advice or advocacy—that is, proper support that helps to guide consumers and businesses through what can be a complex and changing landscape of rights and responsibilities must be available and easy to access. Thirdly, there must be effective and speedy redress, which needs to be clear and as close to the consumer/trader interaction as possible. The Bill will not take us all the way down those three prongs, but nevertheless we look forward to scrutinising it in Committee.

18:07

[Viscount Younger of Leckie]

My Lords, I believe that there is still time to get hearts racing. We have an excellent opportunity before us to ensure that we have the best possible legal framework to empower consumers, drive competition and encourage growth. I am therefore very grateful to noble Lords for their wide-ranging contributions to the debate today on this important Bill. I appreciate the general support for its core elements that have come from so many Peers: from my noble friends Lady Oppenheim-Barnes, Lord Clement- Jones, Lord Stoneham and Lord Borwick, from the noble Lords, Lord Wills and Lord Alton, and even from the noble Baroness, Lady Hayter, although that was before she read out a full list of issues that means that I have much ground to cover. I also pay tribute to my noble and learned friend Lord Howe and my noble friend Lady Oppenheim-Barnes for their long contribution to consumer issues over many years.

I shall pick up on the specific points that have been raised today. The noble Baroness, Lady Hayter, and my noble friend Lady Oppenheim-Barnes, as well as the noble Baroness, Lady Drake, and the noble Lord, Lord Stevenson, talked about the importance of consumers knowing what their new rights are. I agree with that. Empowering consumers is a key objective of the Bill, and we have set up a group of consumer and business organisations that is working with us to develop a strong implementation programme to ensure that consumers and businesses are well aware of consumer rights. The group is considering the role of consumer rights information at point of sale, a point that my noble friend Lord Stoneham raised. I undertake to write to noble Lords before Committee to provide an update.

My noble friends Lord Clement-Jones and Lady Heyhoe Flint and the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson, raised the issue of regulating ticket sales. I sympathise with cases in which consumers are misled about the nature of what they are buying. We have seen many excellent examples of event organisers controlling how tickets move from the primary to the secondary market, some of which were discussed in the other place at length. That good practice needs to be extended where event organisers have concerns. I reassure noble Lords that legislation is in place to protect consumers. It is already an offence for a trader to mislead a consumer. It is also a requirement that the main characteristics of goods and services, as well as the name and address of the trader, must be given to a consumer before they buy. For ticketing, I stress that the main characteristics should include the seat number, if one exists.

The Government are committed to ensuring that the law is enforced. In 2013 alone, the Advertising Standards Authority looked at 130 websites to ensure that pricing was accurate and not misleading, and this year it is reviewing 650 more. In addition, further legislation will come into force in October to give consumers who are misled better access to compensation. Therefore we are tightening consumer protections. However, industry best practice also needs to be extended. My noble friend Lady Heyhoe Flint, at least, recognises that particular point.

I very much appreciate and agree with the sentiments expressed by the noble Baroness, Lady Hayter, and the noble Lords, Lord Wills and Lord Stevenson, on the important point about unsolicited nuisance calls—or as the noble Lord, Lord Wills, put it, marketing calls—which can cause inconvenience, stress and anxiety for many consumers, in particular the elderly and the housebound. I am sure that we are all only too aware of situations when we could do without having to answer such calls. A phone ringing when you are making supper is very distracting even when you know who is calling, but when the call is unwanted and of no interest then it can be an unacceptable intrusion. However, I firmly believe that banning unsolicited calls will not solve the problem.

That is not only my view but the view of the Culture, Media and Sport Select Committee. In its report of 5 December 2013, the committee said that a ban on cold calling should not be introduced because there were many legitimate reasons why such calls might be made, such as by the emergency services, medical practitioners, pharmacists, even elected politicians, charities, and companies with which the recipient has a genuine relationship. For example, in its report the committee says:

“The National Autistic Society told us that the telephone is ‘the single most successful way that—as a charity reliant on public donations—we raise money from individuals’. The Society’s evidence ends with an appeal: ‘Please do not curtail our use of this marketing channel—I would implore you to fully consider the implications for society before making any changes’”.

We also have the example of other jurisdictions as further evidence that a ban does not actually work in practice. For example, Germany has a system that prohibits direct marketing calls unless an individual positively opts in to receiving such calls. Yet according to a study undertaken by trueCall Ltd in 2011, the level of complaints about nuisance calls was found to be broadly similar to the UK.

Despite what the noble Baroness, Lady Hayter, says, we need to focus our efforts on catching those that break the law—I believe that she did say that—which is why the Government’s action plan, published in March, focuses very firmly on improving enforcement. For example, we will shortly be consulting on lowering the legal threshold to allow more enforcement action, including penalties, to be taken. I make the point that some action is taking place.

The noble Lord, Lord Wills, spoke about consultation —a point which was well made. As I said, we will shortly be consulting on lowering the legal threshold to allow more enforcement action, including penalties, to be taken. Only last week this House approved an order that enables Ofcom to disclose information to the Information Commissioner’s Office about organisations that break the rules.

[Lord Wills]

I am grateful to the Minister for giving way. On the specific point about consultation, can he undertake that the consultation will take no longer than three months and that his officials will process the results of it as quickly as possible? I am not quite sure what the timetable for the rest of the Bill is, but can he make sure that, if at all possible, the Government will bring forward amendments to deal with this, as a result of the consultation, while there is still this precious legislative opportunity to do so?

[Viscount Younger of Leckie]

I am very happy indeed to write to the noble Lord to provide some precise timetable information on that point. We would wish for this to be taken forward as soon as possible as well, but I will furnish him with some more information. There are regulations in place that offer protection for consumers. I would very much encourage consumers to report such calls to the relevant regulator so that action can be taken.

At this point I would like to address a point raised by the noble Baroness, Lady Hayter, on energy bills. We know that rising energy prices are hitting many households hard at a difficult time. We expect energy companies to justify commercial decisions on price changes openly and transparently. We have delivered a £50 reduction in energy bills by driving down the cost of the green levies on consumer bills. We are reforming the retail energy market by making it simpler for consumers to understand. We are ensuring that everyone is on the cheapest tariff their supplier offers that meets their preference. Our policies are keeping bills lower—by an average of £65 for a typical household—than if we did nothing.

The noble Baroness, together with the noble Lord, Lord Stevenson, and the noble Baroness, Lady Drake, asked why the Bill does not contain an outcome-focused test for services. We are strengthening consumer rights for consumers of services where a trader promises something about the service. If the consumer relies on that promise they can hold that trader to account; if not, they are entitled to statutory remedies, which are also introduced for the first time in the Bill.

My noble friend Lord Stoneham and the noble Lords, Lord Whitty and Lord Alton, raised the issue of the alternative dispute resolution, as did the noble Baroness, Lady Hayter. As the noble Baroness knows, the consultation seeking evidence about whether any kind of simplification of the ADR landscape is necessary or viable in the future recently closed. Although it focused on immediate action to implement the ADR directive, we understand that stakeholders from many quarters have views on how the current ADR landscape might be improved. Some have suggested creating a consumer ombudsman. We have therefore used the consultation as a call for evidence about whether any kind of simplification of the ADR landscape is necessary or viable in the future.

The noble Baroness, Lady Hayter, asked about giving consumer rights to small businesses, and particularly to the smallest micro-businesses. The Government are committed to helping SMEs, of which there are 4.9 million in this country, to grow. However, we are not convinced that it is in the best interests of small or micro-businesses to be defined as consumers in the Bill. To take a step back, the Bill is about consumers. As soon as we start including rights for other parties in the Bill, we believe that that core purpose will be diluted and we will risk losing valuable clarity.

[Baroness Hayter of Kentish Town]

The Commons made a welcome amendment to the Bill to make letting agents put up their table of fees. Those fees will apply also to landlords, and landlords are a business. Does the Minister mean that landlords do not also have the right to see those fees displayed simply because they are a business?

[Viscount Younger of Leckie]

We still want to make a distinction between consumers and businesses. We think that if we were to cherry pick and bring certain groups in to allow businesses to be included as consumers, that would cause confusion. However, I am very happy to talk to the noble Baroness again about letting agents and the specific point, as I know that she is much exercised by the issue.

The noble Baronesses, Lady Hayter and Lady Howe, my noble friend Lady Bakewell and the noble Lord, Lord Alton, raised the important issue of the effect that advertising has on children as regards payday loans. First, let me be very clear that consumers will be far better protected under the new FCA regime. Logbook loan providers and other high-risk lenders are required to meet the standards that the FCA expects of them, including making affordability checks. The FCA rules are binding on lenders and the FCA has a wide enforcement tool-kit to take action.

My noble friend Lady Bakewell and the noble Lord, Lord Alton, raised the issue of advertisements. The FCA will not hesitate to ban irresponsible adverts, and it has a strong record of doing so. The Broadcast Committee of Advertising Practice is reviewing the extent to which payday loan adverts feature on children’s TV. Separately, the Financial Conduct Authority has set out new rules for consumer credit adverts and it has powers to ban misleading adverts which breach its rules.

The noble Lord, Lord Wills, asked about payday loan firms and cold calling. The FCA is committed to ensuring that cold calling by phone or e-mail makes clear the identity of the firm and the purpose of the communication so that the consumer can decide whether to proceed.

I thank my noble friend Lord Borwick, who raised an important point about consumers being made aware of the country in which a seller is based. Under the consumer contracts regulations 2013, traders in distance contracts, such as online sales, must make available information on their geographical address before a consumer buys from them. I have been in correspondence with my noble friend concerning his recent purchases with Amazon. I cannot comment on the experience of the particular transaction that has been raised but I can confirm that obligation, which I hope goes some way to answering his questions.

My noble friend Lord Clement-Jones asked about exempting intellectual property contracts from the Unfair Contract Terms Act 1977. I sympathise with the situation in which some creators find themselves, but we have not yet seen evidence that amending that Act would address the issue. First, we would need substantial quantitative evidence of a problem and, secondly, we would need to be sure that any such amendment would solve that problem without unintended negative consequences.

My noble friend Lord Clement-Jones also asked about brand owners protecting themselves against misleading look-alike packaging—an issue that I know we have spoken about in the past—on the grounds of intellectual property infringement and the common law tort of passing off. As he will be aware, my department, BIS, is reviewing the case for granting brand owners a civil right of action against copycat packaging and it is aiming to report in the autumn.

There has been some discussion today about the vital role that trading standards officers have in protecting the public. Issues were raised in this respect by the noble Lord, Lord Whitty, and the noble Baroness, Lady King. The Government strongly support the work that trading standards does to protect consumers from rogue traders and scammers. We have better equipped trading standards to take greater responsibility for consumer law enforcement by transferring central government funding to the National Trading Standards Board and Trading Standards in Scotland. Last year, we invested £14.5 million in these bodies to fund co-ordinated enforcement action across the UK.

We also want to develop a better understanding of the impact that trading standards services have on our economy at both the local and national level. Therefore, in partnership with the Trading Standards Institute, we have commissioned a group of academics at the Institute of Local Government Studies in Birmingham to undertake a piece of research on which to build an evidence base on the economic, social and environmental impact of trading standards work, the impact that budget cuts have had on enforcement activity, and the efficiency of trading standards services across England, Scotland and Wales. The project will conclude in the autumn and the outputs will inform future policy considerations.

The noble Baroness, Lady Crawley, raised the question of trading standards publishing data. Trading standards will be able to name and shame a business, giving consumers more information to make better purchasing decisions. That is a key element of the new enhanced measures.

The requirement in the Bill for trading standards to provide 48 hours’ notice of a routine inspection was raised by the noble Baronesses, Lady Hayter and Lady Crawley, among others. I emphasise that this is about routine inspections; it is not about situations where there is any concern or suspicion that a trader is breaking the law. Other powers in the Bill can be used to check letting agents’ compliance with the duty to display fees. I also want to reassure the House that the powers and safeguards are designed to strike a balance—and it is a balance—between protecting civil liberties, reducing burdens on business and enabling enforcers to tackle rogue traders. Businesses, and particularly small businesses, welcome the requirement for notice. The Federation of Small Businesses has said that,

“booking inspections in advance … will allow the business to make the necessary arrangements … so that everyone gets the most possible from the inspection”.

However, I underline again that we have no intention of weakening the powers of consumer law enforcers to investigate rogue activities. That is why the Bill contains a number of clear exemptions from giving notice, such as where doing so would defeat the purpose of the visit—for example, when investigating the sale of illegal tobacco or the production or transit of fake food. Consumer law enforcers will still have more powers to enter premises than the police.

I turn now to an issue I know exercises a number of noble Lords, which is the right to receive bills in paper format. It has been raised today by the noble Baroness, Lady Hayter, and I know it certainly exercises my noble friend Lady Oppenheim-Barnes. I have heard the views expressed in this debate, and empowering consumers is a key objective of the Bill. My department is in the process of commissioning research regarding the issues that help and hinder the empowerment of consumers. We aim to use this research to identify the key target groups of consumers in need of greater assistance and the best ways to reach out to them. I can reassure the House that we will consider the comments made today alongside the conclusions from the research and act accordingly if this suggests the need for further thinking. Let me make one thing clear. There is no penalty for choosing paper—instead, people simply do not receive a discount. Choosing paper bills retains an additional service for those who wish not to take a paperless bill discount.

[Baroness Oppenheim-Barnes]

I apologise but I must interrupt my noble friend. That is not true. Clearly, at the end of a BT bill there is an item called, I think, charges for processing this bill. That means sending a piece of paper.

[Viscount Younger of Leckie]

I know that this is probably going to lead to some more discussions offline about this issue. My answer is that my noble friend then has the right to change supplier if she is not happy with that particular supplier.

[Baroness Oppenheim-Barnes]

She has.

[Viscount Younger of Leckie]

It sounds to me as if she has done so. We must also remember that many hard-pressed households welcome the opportunity to save money that paperless bills offer them—which is the other side of the coin—and the Government want this option to be available to consumers.

My noble friend Lord Clement-Jones, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Howe, spoke eloquently about the important new statutory rights for consumers buying digital content. As has been shown, there are competing arguments and a balance to be struck. The digital content provisions are reasonable and principles based. They require that traders put right faults free of charge or, failing that, give some money back. That is what reputable digital content businesses already do. Not all bugs would automatically render digital content faulty, as the magazine Which? recognised:

“consumers are very accepting of updates and patches”,

and,

“would be able to tell the difference between a faulty piece of software and one that is just evolving”.

The noble Baronesses, Lady Hayter and Lady King, and the noble Lord, Lord Stevenson, asked about the impact of the services provisions, especially on public services. This point was quite strongly made. As Peers will know, this issue was discussed at length in the other place. My colleague Jenny Willott has written to set out the position, which is that where a public service is provided by a trader to a consumer under a contract, the services chapter of this Bill applies. That is why our impact assessment of this part of the Bill was comprehensive and covered all sectors. That assessment shows significant benefits—of £33 million per annum—to consumers.

The noble Lord, Lord Alton, raised an interesting point—and at this point I hope my noble friend Lady Oppenheim-Barnes can be persuaded to listen carefully—about the safety of embryos, if I can paraphrase the points the noble Lord raised. We are considering the report mentioned and we will announce our plans as soon as possible. My honourable friend in the other place, Jenny Willott, has already assured the other place and I can assure noble Lords that any proposed regulations on this matter will be subject to debates in both Houses under the affirmative procedure.

The noble Baroness, Lady Howe, asked about an update on the voluntary agreement on preventing unlicensed gambling providers. I will ask my noble friend the Minister for Culture, Media and Sport to reply directly to the noble Baroness.

The noble Baroness, Lady Drake, said that prominence is not sufficient to ensure that consumers understand the terms. We agree that terms should be written in language that consumers understand and that is why all terms must be written in plain and intelligible language. We will be giving guidance on what prominence requires and how it is defined. Business prefers this guidance to detail on the face of the Bill.

The noble Lord, Lord Whitty, who spoke in the gap, raised the issue whether consumers have access to collective redress for breaches of consumer law. Our proposals on enhanced consumer measures offer a more flexible, balanced and proportionate approach with a wider range of remedies.

I am fast running out of time. I will write to noble Lords whose questions I have not managed to answer. I conclude by underlining once again how vital this Bill is for empowering consumers, promoting competition and encouraging growth, which so many Peers have emphasised today.

Bill read a second time and committed to a Grand Committee.

Chilcot Inquiry

Tuesday 1st July 2014 Lords Chamber

Question for Short Debate

18:30

Asked by

[Lord Dykes]

To ask Her Majesty’s Government what date they expect to agree with the Chilcot Inquiry for the publication of the Inquiry report.

[Lord Dykes (LD)]

My Lords, I am grateful for the opportunity, through the usual channels, to contribute today in a Question for Short Debate on the disturbing delays that appear to be building up in the publication of the much and long-awaited Chilcot inquiry report. The long-distance background to this goes back to the illegal war in Iraq in 2003 and the subsequent inquiry by Sir John Chilcot and his colleagues. At least one political party in this country—I am proud to say that it was the Liberal Democrat party—marched officially as a party to protest against the war. The estimated million to 1.5 million marchers going along Piccadilly were subsequently all disappointed that the then Prime Minister, Tony Blair, completely ignored their representations on the biggest march that had taken place in Britain in recent times.

I pay tribute to the newspapers and the press in Britain who followed this, especially the Guardian. I assure noble Lords that there is no consortation in any way in this respect. It is just another way to thank the Guardian for its relentless pursuit of the hacking scandal in this country. Its pursuit was much more than that of any other newspaper. Sometimes the Independent managed to keep up, for which we are grateful. The way in which the press generally dealt with it was much less thorough than in the Guardian. The same thing has applied on an unrelenting basis to the delays to Chilcot. It is with deliberate intent that I quote mostly from the Guardian.

On 29 October, I put down a Question to the then Leader of the House, the Chancellor of the Duchy of Lancaster, the noble Lord, Lord Strathclyde. I asked,

“Her Majesty’s Government what representations they have made to the chairman and secretariat of the Iraq Inquiry about possible delays in publication of its report due to responses from officials of the government of the United States”.

I was most grateful to the noble Lord for his reply. He said:

“The drafting of the inquiry’s report and the contents are entirely a matter for the inquiry, which is independent of government”.

I made a supplementary point and I said:

“We remember, of course, the many thousands of Iraqi civilians, including women and children, who were killed after this illegal invasion. Will my noble friend the Leader of the House reassure the House that the Government will attach every meticulous attention to the contents of the report when eventually it is published? It is a very long process and the sooner it is published the better, but there is still a considerable delay. The particular implications of eventual submissions to the ICC should also be borne in mind”.

I was most grateful when the Leader of the House added that,

“my noble friend is correct to draw attention to the report. I can confirm the seriousness with which the Government will accept the report. It perhaps is worth pointing out that Sir John Chilcot, the chairman of the inquiry, has advised that the inquiry will be able to submit its report to the Prime Minister once it has given those who may be subject to criticism in the report the opportunity to make representations to the inquiry before the report is finalised”.—[Official Report, 29/10/12; col. 406.]

I hope that noble Lords will forgive me for going into detail on this but that is the very serious background to it.

I fast-forward to 23 November 2013 and, once again, the excellent details in the Guardian, which stated:

“The Chilcot inquiry into the 2003 invasion of Iraq has been locked in dispute with top Whitehall officials over their refusal to release crucial records of conversations between Tony Blair and George W Bush”.

I quote further from the same article:

“Sir John Chilcot and his panel have seen the documents but have been told they cannot disclose them. He has told Cameron that without a decision on what he has described as documents central to the inquiry, he cannot go ahead with the … ‘Maxwellisation’ process”.

The article goes on:

“Blair is one of those most likely to be criticised for his handling of the crisis that led to the Iraq invasion”.

I am delighted to see the former Foreign Secretary, the noble Lord, Lord Owen, in his place today and I thank him for coming to speak in this debate—as I thank the other speakers. Going back a week to 15 November, again in an article in the Guardian, there was his call—which he gave me permission to mention—to get this report published as soon as possible. The first paragraph of this piece by Richard Norton-Taylor states:

“The former Labour foreign secretary, Lord Owen, has criticised Tony Blair and the coalition over the refusal to release key evidence about what Blair told George Bush in the runup to the invasion of Iraq. Blair's position was an ‘intolerable affront to democratic accountability’, Owen told the Guardian”.

Several paragraphs later, the article states:

“Owen said the whole dispute should be arbitrated by the lord chancellor, who is responsible for the release of official records, rather than any cabinet secretary … ‘Chilcot and his colleagues should stand firm and not be bullied,’ Owen said”.

I was grateful indeed for the noble Lord’s remarks and I look forward with great interest to his further remarks in this debate.

I am also grateful to the noble Lord, Lord Campbell-Savours, for being here. He is a doughty fighter for justice and morality in politics, in social matters and in the kind of emergency that arose from Iraq. I know he has somewhat different views so I shall be careful not to add any further comments.

I am equally grateful to the noble Lord, Lord Berkeley of Knighton, for his attendance today. Many of us are fans of his famous programme on BBC Radio 3, “Private Passions”. He will not mind me sounding corny when I say that we in this debate today have a public passion collectively for getting at the truth of the delays to Chilcot. To make matters worse, with all these delays and no proper explanations coming from government circles or anybody else, and allowing for the fact that Cabinet Secretaries are inhibited in anything that they might do or say—that is a serious problem in the public sector, which we have to admit and understand—I and others were quite appalled that last Friday, 27 June, an article in the Guardian said that there is now a further delay in the publication of this report. The main paragraph in that article states:

“Sir John Chilcot announced last month”—

that is, in May, as the article was written at the end of June—

“that after years of heated disputes with successive cabinet secretaries, and discussions with Washington, he had agreed to a settlement whereby summaries, and ‘the gist’, of more than a hundred records of conversations between Blair and George Bush in the runup to the invasion, and of records of 200 cabinet discussions, would be published, but not the documents themselves. Chilcot has described the content of the documents as ‘vital to the public understanding of the inquiry’s conclusions’. In a letter to Sir Jeremy Heywood, the cabinet secretary, last month, Chilcot said ‘detailed consideration’ of the information he has requested had begun, adding ‘it is not yet clear how long that will take’”.

With regard to this delay, I think “disgrace” is the right word to use, and I use it sadly. I do not wish to, but I think that is the essence of the matter.

The same article states:

“Philippe Sands QC, professor of law at University College London, said: ‘How painfully ironic that Britain used force in 2003 when it was manifestly illegal, but will … not do so now in response to a request from the government of Iraq, when it would more arguably be lawful’”.

It continues:

“Sands, a close follower of Chilcot and earlier inquiries into the invasion of Iraq, added: ‘The situation in Iraq today is terrible and tragic, but it’s a futile exercise to speculate as to the exact connection with decisions taken in 2003 … It would be more sensible to reflect on what might be learnt from the mistakes of the past.’ He continued”—

I support this question—

“‘Who exactly is responsible for the delay [in the Chilcot report] is unclear, but it is hard to avoid the suspicion that political considerations might have come into play’”.

This House and the whole of this Parliament need information on this. I am most grateful to the noble Lord, Lord Wallace of Saltaire, for attending this debate and replying to us today. I hope that we will have some good answers from him in so far as he can deal with these delicate and sensitive matters.

18:40

[Lord Campbell-Savours (Lab)]

My Lords, we are all indebted to the noble Lord, Lord Dykes, and welcome this opportunity to debate the timing of publication of the Chilcot report. It provides us with an opportunity to plead the case for a report that is comprehensive in content and fully exploits the inquiry’s original remit as set out by the Government.

Last week, on 25 June, I spoke on Iraq. I understand that my contribution was followed by an avalanche on the internet of vitriol, venom, accusation and language bordering on threat. It all followed an article in the Mail Online which, accompanied by a picture of me suitably clad in a provocative Peer’s robe, accurately reported half my contribution in which I had set out the position of those of us who had supported intervention in Iraq. What, sadly, the article did not reveal was that the thrust of my speech was to oppose further intervention and also to set out a strategy for us to pursue at the United Nations to deal with militant Islam.

I make no complaint. Indeed, in today's debate, I intend to go further and give those self-same critics a further dose of my thoughts in the context of Chilcot and further cause for them to express their anger by setting out another truth over the debate on Iraq—a truth that they conveniently ignore. It is a truth that I hope Chilcot draws on during the course of his inquiry.

In my view, the whole debate on Iraq has been dominated by ignorance of the background, misrepresentation of the facts and public attitudes to the conflict determined by totally inadequate reporting in the media. There are men and women today walking the streets of London, Paris, Washington, Amman and Istanbul who are the real criminals in the story of Iraq. There are hundreds if not thousands of them. They have built their fortunes on the back of sanctions-busting in breach of international law, but because they represented business and financial institutions, they have been left untouched. They have almost never been prosecuted because it was deemed not to be in the public interest in various countries concerned, while they have laughed all the way to their banks as politicians have taken the rap. It is they who are responsible for the war in Iraq and only they.

Blair and the nonsense of WMD divert us from the truth and if Chilcot fails to deal with their criminal activity he will, in my view, have failed. To establish the truth, we need to consider the Volcker report, a UN-sponsored report of 2005, which followed a detailed investigation over 18 months into allegations of bribery, corruption, illegal commission taking and the complete undermining of the Iraqi sanctions regime established under international law. Paul A Volcker, a former chairman of the Board of Governors of the United States Federal Reserve, led the inquiry that identified more than 2,000 cases of abuse and criminal activity. That report offers us a real insight into the scale of international criminal operations, which completely undermined the sanctions regime set in place to bring the Saddam Hussein regime to heel. But the western media gave the whole report a wide berth and scant attention as the story told was simply not sexy enough. The media needed someone to blame for what has turned out to be a qualified failure. I believe that Blair’s unfortunate and, in my view, wrong use of WMD in justification for the war gave them that person to blame.

As I explained last week, I, along with others, had repeatedly appealed to the powers that be in our visits to Washington for action on sanctions-busting. The Americans were just not interested and we could do nothing as they were calling the shots. I remember telling them that unless they acted military intervention to bring Saddam’s brutality to an end was inevitable. On one occasion I led an Anglo-American parliamentary group delegation to Washington and recall discussing sanctions-breaching with State Department officials. The noble Lord, Lord Howard of Rising, was there and he will remember what happened. In the critical years prior to the invasion I repeatedly raised in Parliament the issue of sanctions-busting and I understand that British civil servants had no more luck with the Americans than I did. I repeat: it was the failure to stop that criminal activity that made war inevitable. If the sanctions regime had been enforced, Saddam would have been contained.

In the many forums in which we made our case on the need to enforce the sanctions policy, particularly in the case of oil exports, we were able to draw on the extensive work that we had done in the early years of Saddam’s revenue-raising from illegal oil sales. In the 1990s, at a time when I was very closely following events in Iraq on an almost daily basis, I sent my former Commons researcher Jim Mahon to Iraq to investigate the scale of illicit oil trading with Turkey. He replied back at the time in the following words: “Trucks, bumper to bumper, in a line as far back as the eye could see, thousands of them, crossing the border into Turkey; some trucks just converted with large containers carrying oil on their backs”. It was the lack of monitoring of humanitarian imports under the UN sanctions regime, with the rake-off of commissions and Saddam’s oil revenues, that funded the whole machinery of Iraqi government and kept the upper echelons of Saddam’s murderous regime and republican guard in place.

With the failure to act on the sanctions-busters, I saw no alternatives to war, although I now believe that the war option failed for the reasons that I set out last week. I now look to Chilcot to establish the truth. At the time I challenged the Chilcot inquiry remit as being too limited. Nevertheless, they tell me that Chilcot is a wise old owl and if he deploys his wisdom, he should find a way of addressing the important issues that I am raising. Believe me, if Saddam’s revenues had been cut off, that regime would never have survived. There would have been no war in Iraq. Those who insist on attacking those of us who supported intervention as a last resort to end Saddam’s brutality would do well to consider the facts and ignore the media-generated stories that even some politicians have swallowed. I hope that Chilcot will do just that.

The irony in all this is that many of us who supported intervention in Iraq were totally opposed to intervention both in Afghanistan and Syria—unlike the Liberal Democrats. The noble Lord, Lord Dykes, mentioned the position of his party. His party supported the intervention in Afghanistan. I opposed it in Afghanistan and Syria. Perhaps on the next occasion it will be us who are on the streets of London, demonstrating for the enforcement of sanctions against the rogue regimes in an attempt to avoid some war in the future.

18:49

[Lord Berkeley of Knighton (CB)]

My Lords, I am most grateful to the noble Lord, Lord Dykes, for raising this pertinent Question. Before I make the very brief points I would like to make, perhaps I might, by way of a small tribute, say how sad it is that Sir Martin Gilbert, a member of the Chilcot inquiry, has been taken so gravely ill that he is unlikely to return to that kind of work.

We have recently been commemorating—if I may say so, very movingly—the fallen of the First World War. The noble Lord, Lord Dykes, very kindly mentioned “Private Passions”, and one of the pieces we most often get asked to play on that programme is part of the “War Requiem” by Benjamin Britten, setting to music, as it does, the poems of Wilfred Owen.

That is germane to what we are talking about because we owe it to the many people who gave their lives so bravely and to the many families that lost relatives to always look with microscopic attention at the reasons for going to war. We know now that many mistakes were made and we really should be trying to use the example of those errors to never make them again. That is why this inquiry is so terribly important. Then we have the families of those representing us who were bereaved in Iraq and—because of our actions there, arguably—the people who are still losing their lives.

This is an incredibly serious Question and the point that I put to the Minister is that in recent debates about other matters—for example, the police and, indeed, the conduct of Members of this House—the Government reassured us about the importance of the public having confidence in public inquiries, not just inquiries where people are investigating themselves, about which they are all very genuinely worried, but particularly inquiries that concern decisions that cost many people their lives.

I very much look forward to the Minister’s answers because this is a very pressing Question. The point that I put to him is that the public are mystified by what they fear are people covering their backs—by tins of whitewash possibly being opened. Perhaps this is not the case—I would like to think that it is not—but the public need that reassurance and one thing that will reassure them is to stop the shilly-shallying and get this report published.

18:52

[Lord Owen (Ind SD)]

My Lords, I will raise some of the issues that are going to face Parliament when this report is published, but first I will deal with the question of if this report gets delayed until next year, which now looks very likely, the appropriate way of determining when it should be published in relation to a general election. It would be naive to believe that in the immediate run-up to a general election there will be the sort of objective evaluation of the report that we have every right to do and the inquiry has every right to expect.

I have written to the chairman of the Electoral Commission, which is in my view the only real body that could objectively have a look at this, take the views of the different parties and come to a conclusion, and let the inquiry committee know before Christmas what its feeling is. Obviously, if it is published this year, that is fine, but since, because of fixed-term Parliaments, we know the election date, it would be very ill advised for it to go beyond January or the middle of February. It would be better, after we have waited all this time, to wait until after the general election.

I approach this from the viewpoint of the Suez crisis, which was one of the most emotional experiences that I went through as an 18 year-old. I have always believed that it was a terrible mistake not to have an inquiry into the Suez crisis. We would have learnt things from the handling of that crisis which would have been given greater weight in the counsels of government during the Iraq war. Then there is the question of how you treat the Cabinet in a time of war as distinct from Parliament. We know it is not possible to say everything to the general public in the run-up to a war, but I believe it is essential, if the authority of the Prime Minister is such that they have the prerogative to declare war, to understand that, provided they speak for the Cabinet, there is no way any Prime Minister can go to war in a minority in their own Cabinet. Therefore, the Cabinet discussions are extremely important.

The other thing which is troubling most of us is the fact that the Commission stopped taking evidence over three years ago. This is the real issue and if it is postponed into next year it will be close to four years. This is an intolerable delay and we have to determine how this matter can be resolved in future. It is very difficult for the Prime Minister of a different party to make a determination about a document which basically relates to another Administration. So it has been decided to involve the Cabinet Secretary, but if you are the Prime Minister’s Private Secretary during all this crucial time from 9/11 until 2003, you ought to recuse yourself from making these decisions, or at least when it becomes a matter of such controversy you should bow out and find another person to deal with the issue. This is particularly important since this Cabinet Secretary is almost a new creation. Normally Cabinet Secretaries come to this position having been senior civil servants in major departments. Although they are often Private Secretaries to a Prime Minister as part of their overall experience, which is very helpful to them, they are not in the rough and tumble of party politics. The present Cabinet Secretary has been Parliamentary Private Secretary to the Prime Minister for Tony Blair, Gordon Brown and now David Cameron. He has been almost constantly involved, both in government and outside government, in the party-political battle. This is not ideal. Since the job has been split, the present Cabinet Secretary having declined to act as head of the Civil Service, it would have been better for the head of the Civil Service to be the arbiter of this, or even the Lord Chancellor, as has been done on official secrets issues. I know the role of Lord Chancellor has changed, but some mechanism is necessary.

The other most troubling aspect about Sir John Chilcot’s letter to the Prime Minister was that it revealed that new information has been given to the committee only this summer—information that fills in gaps. What is the role of Parliament? It seems to me that one of the Select Committees, probably the House of Commons Administration Committee, should now look at why there has been this delay and come to some conclusions. It is no use leaving it until afterwards. But now that there is obviously a gap of four or five months, it should take a look at the administrative aspects, find out whether in future it is tolerable for a Cabinet Secretary to be the sole arbiter of this, and have some idea as to how much a Government, a civil servant and a Cabinet Secretary are obligated to follow the terms of reference and the explanation given by the Prime Minister.

When he was Prime Minister, Gordon Brown made it quite clear that all British documents would be made available to this committee. The record made by British civil servants of a British Prime Minister talking to the President of the United States is a British document. There should be no argument about that. Of course, if the exchange is taking place on the telephone, it is not reasonable to expect that an American President’s words in this conversation would be reported. It would be inappropriate and I do not believe anybody has asked for that. The Cabinet Secretary said that former Prime Minister Tony Blair has had no involvement in this delay. We are then told that the delay has come from America. Who is the person in America who is going to delay it other than former President Bush? It is not a matter for President Obama—again, it is difficult for him to comment. It beggars belief that former President Bush in his decision-making is not totally uninterested in, or unaware of, the views of former Prime Minister Blair.

This whole arrangement has been shown to be so damaging that it has already gravely damaged the credibility of the inquiry report. We need then to look again as a Parliament at how these public inquiries will be held in the future. They are a safety valve. The way in which the Cabinet Secretary has handled it, and the comments that seem have to been made, suggest that there is no understanding that a very serious situation has occurred that is far worse than was the case with Suez. This Iraq inquiry is probing into many things. I happen to agree that it would be a very good idea to probe economic sanctions. Economic sanctions ought to have brought the Saddam Hussein regime to account. After all, it was the intervention in 1991 that stopped the so-called turkey shoot, when an immense number of casualties were being made from firing on the troops as Saddam Hussein came back from Kuwait. A ceasefire was done under the authority of the United Nations. It was the breaches of those resolutions that were passed in the immediate aftermath that had been so serious. I shall not go into the merits or otherwise of the issue—we can discuss that.

There are aspects of this report which are bound to be parliamentary. The first of those will be: was Parliament told the truth? I happened to be in this Chamber in 2007 when the noble Lord, Lord Butler, who was in charge of the review of intelligence, stood up and read out a document, so these were calculated words, in which he accused the former Prime Minister of being “disingenuous”—we know what that word means outside this Chamber; it is the furthest that you can go to accuse the Prime Minister of lying—over the interpretation of the intelligence. I do not care whether the Prime Minister thought something—they were entirely his views—but, once he quotes the intelligence to Parliament, then that quotation has got to be accurate.

The Chilcot inquiry has already looked very carefully at this in terms of the foreword to the document on which much of the debate in Parliament was held, and one can take one’s own conclusions from those reports. Therefore, Parliament needs to have a procedure. We all know what happens with these reports. They are looked at 24 hours beforehand by the people who are criticised; there is great press briefing and distortion of the document; and most people find it very difficult to form a judgment on day one. I suggest that Parliament decides now that it will not have an immediate debate—letting the report be read for a fortnight or three weeks—but that it will ask a committee of the House to look at those aspects which relate to Parliament. Was Parliament misled? Was there a “disingenuous” interpretation of the intelligence? Did we know the full facts in Parliament before that debate? One draws on the report, but it is a parliamentary matter of great importance.

We rightly take very seriously perjury before a court, and many of us who have been in both Houses of Parliament take seriously a lie to the House of Commons. People forget that, in December 1956, it was because Sir Anthony Eden misled the House that it was inevitable that he would have to resign. When he said that there had been no prior sharing of knowledge with Israel and France over the so-called interposition of the British and other forces, that was known by then to be untruthful and it made it inevitable that he would have to resign very soon. In fact, he never came back to Parliament and resigned. I happen to believe that there were medical reasons why one needs to rather charitable in looking at Anthony Eden’s conduct over this whole thing; he was a sick man through most of it. However, that does not in any way diminish the fact that probity before Parliament is an essential question and one that we must face up to. In my view, contempt of Parliament is every bit as important as contempt of court.

19:05

[Lord Pearson of Rannoch (UKIP)]

My Lords, I rise not to make a speech in the gap but simply to ask the Minister whether he would care to comment on rumours that I have heard from friends in the Washington community to the effect that, before action started on the ground, we knew that the famous weapons of mass destruction were in fact in bottles and already in Syria. Would the Minister care to comment on that as part of the information to which the noble Lord, Lord Owen, and others have referred?

19:05

[Lord Morgan (Lab)]

My Lords, I think that the Chilcot inquiry is of such a nature that too much should not be expected of it. Many of the main issues confronting the inquiry were legal; the resignation of Elizabeth Wilmshurst from the Foreign Office was, I recall, on the legality of the Iraq operation. The Netherlands inquiry consisted entirely of lawyers and dealt very thoroughly with the issues. The Chilcot inquiry does not have a single lawyer. It has a couple of historians, which is a good thing, but not a single lawyer. We have been told—among others, by the late Lord Bingham—that the invasion was in clear breach of international law.

Why is the delay so crucial and worrying? First, because the inquiry explores the operation of government—indeed, the operation of government is a major reason for the delay. How could government so malfunction? How could the Cabinet be kept in almost total ignorance? How could the advice of the Attorney-General be so ambiguous and change from week to week? How could the security committee operate in such a way and briefly be chaired, incredibly, by Alastair Campbell? How could the Prime Minister arrogate such overwhelming power? How could he get away with such astonishing mis-statements, including the fact that it had all been agreed with Bush in Crawford a year before yet he pretended that it had not? Those things are very dangerous and should be explored. All serious students of the constitution—of whom I consider myself to be one—should consider them.

Secondly, how could perceptions of policy in the Middle East be so utterly wrong? How could the internal politics and history of Iraq be so misread? How could anyone seriously believe that the British and American invaders would be greeted as democratic saviours, not as brutal invaders killing hundreds of thousands of civilians in their wake? How contemptible a line of logic is that? How could so few preparations be made for the aftermath of the war? We are now seeing the effect in the ISIS militias operating in Iraq. How could people seriously believe that Iraq had its own integrity and that the Government of al-Maliki could be credible? The country of Iraq is now fragmenting into at least three parts. My noble friend rightly said that journalists should be well informed, and I rely heavily on my good friend—I think, the best journalist in Iraq—Patrick Cockburn of the Independent, who has shredded so many of the arguments in this area.

Iraq is a shameful episode. The moral was learnt by some in Syria. It was perhaps learnt the second time around in Iraq. It generated enormous popular protest, as the noble Lord, Lord Dykes, observed. I took part in the march, the greatest statement of popular opposition, popular protest, since the time of the chartists. I also wrote in the Guardian, which I heard get some praise in the opening speech. It was a debacle comparable to Suez, as we have heard. Suez marked the end of empire; Iraq, I think, marked the end of British foreign policy. Our legacy has been shredded in Syria, Libya, and Iraq as well, and there is nothing left.

It raises, finally, the problem of democratic control and, indeed, the role of Parliament, of which the noble Lord, Lord Owen, spoke. The issue of democratic control of foreign policy was first raised during the First World War—we will not hear much of that in the commemorations. We now need democratic control by Parliament to be explored in order to make sure that it never happens again. Michael Foot, of whom I once wrote, talked about the Guilty Men in relation to Munich and appeasement. This time we need to expose and bring to justice these latest guilty men.

19:10

[Baroness Morgan of Ely (Lab)]

I thank the noble Lord, Lord Dykes, for securing this debate. This is not the first time this year that we in this House have discussed the delay to the Chilcot report. We had a comprehensive and detailed discussion in this Chamber in February, initiated by my noble and learned friend Lord Morris, who is very sorry that he could not be with us today. Since then there has been an agreement, in May this year, whether right or wrong, about what the inquiry is able to publish in terms of correspondence between No. 10 and the White House.

At the outset it is worth recalling that we are not here today to debate the substantive issues that the Chilcot inquiry is addressing. We will, I am sure, have an opportunity to do that when it is published and it is probably worth pondering the proposal of the noble Lord, Lord Owen, that we need some time to digest it before we look at it in detail. Whatever the rights and wrongs of the Iraq invasion, it is worth recalling that it was a Labour Government under Gordon Brown that initiated the Chilcot inquiry in 2009—a public inquiry into the nation’s role in the Iraq war. The report will cover the run-up to the conflict, and it will be interesting to see if it picks up on some of the issues that my noble friend Lord Campbell-Savours talked about. It will look at the subsequent military action and its aftermath, and establish the ways in which decisions were made. It will examine what happened and try to identify lessons to ensure that, in a similar situation in future, the British Government are equipped to respond in the most effective manner in the best interests of the country.

It is important to make clear that the Labour Party continues to support publication at the earliest opportunity. Four and a half years on—it has already been four years—it is difficult to explain or understand the prolonged amount of time it has taken to complete. It is worth noting that the previous Labour Government made it clear that the inquiry would begin only once all combat troops had left Iraq, so as not to undermine their role there. As soon as the troops were home, in July 2009, the Labour Government allowed the inquiry to begin and we still believe, particularly in the light of recent developments in the region, that we need to identify the lessons that can be learnt from the conflict.

The delays in the publication of the inquiry’s findings have caused a lot of concern. It is worth taking into account the comments of the noble Lord, Lord Owen, about the need to consider carefully the possible delay of publication until after an election if it is not published this year. However, we also appreciate the vast scope of the report, both in terms of the period it covers and the range of issues that it seeks to address. The committee has faced a huge task and we hope that it will therefore be able to finish its work without undue delay and to submit the final report to the Prime Minister at the earliest opportunity, ideally before the end of this year. Tony Blair himself said in May this year:

“I have got as much interest as anyone in seeing the inquiry publish its findings”.

My understanding is that the blockage has been caused by discussions over certain classified documents, particularly those relating to correspondence with the US President. Members of the inquiry team have had access to and sight of this information; they are all privy counsellors and have had access to thousands of documents that have been declassified from a number of government departments, including the most sensitive intelligence documents. My understanding, therefore, is that Gordon Brown’s promise at the start of this inquiry that:

“No British document and no British witness will be beyond the scope of the inquiry”.—[Official Report, Commons, 15/6/09; col. 23.]

has been honoured. The question, therefore, is how much of this can be published and quoted in the final report to give evidential support to the inquiry’s conclusions.

It is also relevant in terms of the so-called Maxwellisation principle. That principle allows those named in the report to have the right to reply, which means that they will be allowed to see those elements of the report but only the evidence that is allowed to be published. I would be grateful if the Minister could let us know whether the final Maxwellisation letters have been sent and how much time people will be given to respond.

On 28 May this year, Sir John Chilcot wrote to Sir Jeremy Heywood, confirming that the inquiry has judged that the disclosure of quotes of gists from the content of communications between the Prime Minister and the President of the United States will be sufficient to explain the inquiry’s conclusions. We will be asked to take on trust that the inquiry members have read this information and that its conclusions will be based on what they have read. We need to be sensitive to the fact that the USA, one of our closest allies, may deal with us differently in future if it believes that any future correspondence or conversations can be put into the public domain at a later date. We are party to certain confidences and have been trusted to protect those confidences. There are therefore questions about what is a reasonable timeframe for us to disclose things which affect our closest allies. Apart from this, if anyone looks at the Chilcot website they will see reams of documents that can be analysed and digested. There has been quite an open process, apart from that one aspect.

It is essential that we get to the bottom of how and why we went to war in order to learn from our mistakes. Even the most cursory glance at the region today leads us to conclude that post-war preparation was ill conceived and ill prepared. We need to consider whether we can learn anything in terms of the conditions prior to any future intervention. How and to what extent should we take a lead or work with coalition partners in future, and how much influence do we have with them? Can the Minister therefore give an assurance that the Chilcot report will be published, at the very latest, by the end of this year?

19:17

[Lord Wallace of Saltaire (LD)]

My Lords, I thank noble Lords for their various contributions to this debate. The Government are also disappointed and frustrated that it has taken a good deal longer than we—or the Labour Government, which set up the inquiry—had originally hoped to complete the exercise. However, let me stress the exceptional nature of this inquiry.

I entirely welcome and agree with the emphasis of the noble Baroness, Lady Morgan of Ely, on this not being a matter of partisan debate between the parties. We need to get at what went wrong and the constitutional implications of what happened. We therefore want to keep this out of the election campaign, so far as we can. The sort of timings which the noble Lord, Lord Owen, suggested are well understood in government, in terms of not getting too caught up in the pre-election atmosphere.

Let me remind all noble Lords of where we started. The Chilcot inquiry was announced in June 2009 to identify the lessons that can be learnt from the Iraq conflict and the occupation which followed. It has looked at the UK’s involvement in Iraq in the period from the summer of 2001—at the time that the Prime Minister, Gordon Brown, announced the inquiry, that was some eight years previously and it is still less than 13 years away—to the end of July 2009, which is now some five years past. The inquiry embraces the run-up to conflict, the military action and its aftermath and the way that decisions were taken and it aims to establish as accurately as possible what happened to identify lessons to be learnt.

We have not previously published documents less than 30 years ahead, except in the most exceptional circumstances. Part of the delay and part of what has been going on is the product of having agreed that we will publish documents relating to recent events and referring to people who are still in active political life. That is part of the exceptional circumstances in which we are working.

Since 2009, the inquiry has taken evidence from more than 150 witnesses; it has travelled to Baghdad and Arbil for discussions with Iraqi politicians; to Washington to meet officials from the United States Government; to France to talk to French officials; it has met the families of British personnel killed in Iraq; and has read more than 100,000 UK Government documents. When Gordon Brown announced the inquiry in the House of Commons, he said that the committee would have access to the fullest range of papers, including secret information, and, as the noble Baroness has quoted, that,

“No British document and no British witness will be beyond the scope of the inquiry”.—[Official Report, Commons, 15/6/09; col. 23.]

It takes a long time to work through 100,000 documents, to consider where there are sensitive issues remaining and, in the process, incidentally, to consider a number of other documents which had not been provided to the inquiry. These are the supplementary ones which were discovered and have been provided in recent months. The inquiry is examining difficult and complex issues. The inquiry has estimated, it has told us, that its final report will be more than 1 million words.

The Sunday Telegraph remarked that the rate of spending had increased over the past two to three months. That is partly because the website has been revamped and expanded in order to cope with the amount of information which will be downloaded on to the website as it is published. It is a part of the preparation for publication.

As part of the process of drafting the report, the inquiry has sought the declassification of material from many thousands of documents from the Government. It says in my brief that this is absolutely unprecedented. If there is any comparison it would be the Saville inquiry in Northern Ireland, which also took a great deal longer than had been hoped, partly because the complexities it raised were much more difficult than had been understood fully at the beginning. As Sir John Chilcot has acknowledged, the process is labour intensive for both the Government and the inquiry. He said in November last year that he was grateful for the work done by departmental teams to deal with the disclosure of documents.

I hope that noble Lords have seen the letter of 28 May from Sir John Chilcot to Sir Jeremy Heywood as Cabinet Secretary, published on the website the following day, that agreement had been reached on the principles underpinning disclosure of material from Cabinet level discussions and communications between the UK Prime Minister and the President of the United States which the inquiry has asked to use in its report. My understanding is that most of the work on the 200 UK Cabinet meetings from which extracts will be provided has now been completed and that the inquiry is now working on the UK-US documents.

Again I have to stress that we regret that it has taken so much time, but we also recognise the sheer complexity of what the inquiry is working on. I have talked to a number of the Cabinet Office people assisting the inquiry and I am impressed by the pace at which they are now working and the hopes that they have that we are now within sight of the end.

The answer on the Maxwellisation process, which comes next, is that the second letters have not yet gone out but we hope to send them out within the near future. The Maxwellisation process will then take, we hope, a matter of weeks rather than months. The Prime Minister has stated clearly that it is his hope that the inquiry will be able to provide a report before the end of the year.

[Lord Tyler (LD)]

Will my noble friend specifically address the important point made by the noble Lord, Lord Owen? I recall very well, as a Member of the other place during the time—I am not sure whether any of my colleagues are here—the very specific information given to the House of Commons in preparation for that vital debate and vote. Will my noble friend give the House an explicit assurance that there will be careful consideration by the Government of precisely how we as a Parliament are going to look at the parliamentary implications of the Chilcot report? In that connection, it would be intolerable for the end of this Parliament to come before we yet had sight of the Chilcot report and its recommendations.

[Lord Wallace of Saltaire]

I understand fully what the noble Lord says and indeed what the noble Lord, Lord Owen, has said. I stress that this is an independent inquiry that the Government have stood back from, so the Government do not control what is happening in it. However, I entirely understand that when it is published it will be for Parliament, and a number of parliamentary committees, to take on board how much information was given and what the implications are for further information from the agencies and other aspects of government. That will be part of the follow-on to publication.

[Lord Dykes]

The noble Baroness was rightly concerned about the delay in Maxwellisation. My noble friend has just said that there is now a further delay in the letters going out. That seems to be excessive, bearing in mind all the delays that there have been so far. Could he explain to the House why there is this further delay?

[Lord Wallace of Saltaire]

The Maxwellisation process, in which those who are named in various aspects of the report are given a chance to look at those areas where they are named, depends of course on the prior decision being complete about exactly what will be used in the report. The most sensitive areas will be those that involve the minutes of Cabinet meetings and discussions with the United States. That is why you cannot go on to the Maxwellisation process until you have finalised the question of how far you are able to publish. I reassure noble Lords that my understanding is that the inquiry is trying extremely hard to publish as much as possible. This is an unprecedented expansion, lifting the traditional veil of secrecy that has covered Cabinet meetings and other such things in the past.

A number of noble Lords raised other questions. I entirely agree with the noble Lord, Lord Owen, that it was a historic mistake not to have a Suez inquiry. I would say that his remarks on the Cabinet Secretary were ungenerous. The Cabinet Secretary who was originally put in this position was of course the noble Lord, Lord O’Donnell; it was the institution of Cabinet Secretary, not the person, and “the Cabinet Secretary” includes those who assist him in the Cabinet Office. From my limited interactions with them, I have to say that they are a first-class team; it is not simply one individual.

The noble Lord, Lord Pearson, talked about rumours that he has heard in Washington. We have all heard many rumours in Washington. Since I am not privy to what is in the inquiry at present, I cannot comment on them; no doubt that will come out when the report is published.

[Lord Pearson of Rannoch]

Does the Minister agree that if the British and American Governments knew, before action started on the ground in Iraq, that the famous weapons of mass destruction had in fact been in bottles—they were that kind of weapon—and that they were already in Syria, that is not a fact that should be kept from the public in consideration of this matter?

[Lord Wallace of Saltaire]

My Lords, that is precisely the sort of thing that the inquiry will be looking at. I do not know how far it will go into the question of the evasion of sanctions in the period running up to war. Neither do I know whether the noble Lord, Lord Campbell-Savours, gave evidence to the inquiry; that is something else that might be covered.

The noble Lord, Lord Morgan, raised some large constitutional questions, which of course will be there. When the report is published, we will dive into it and draw what conclusions we can. The parliamentary vote on Syria was itself partly a reflection of the sense in Parliament that the Government were not entirely to be trusted on some of these issues.

[Lord Campbell-Savours]

My Lords, evidence was given on the question of sanctions. It was given by Ann Clwyd MP.

[Lord Wallace of Saltaire]

I thank the noble Lord for that. I hope that the inquiry may have touched in some detail on that issue.

The noble Lord, Lord Morgan, said in a very strong way that we need to expose and bring to justice the guilty men. This—as Sir John Chilcot has said on a number of occasions—is not a judicial inquiry; it is a historical inquiry intended to get at the evidence as far as possible. The question of guilt is one which perhaps a number of other people, such as the noble Lord, may wish to push once they have the evidence in front of them.

I hope that I have covered most of the issues. It is ungenerous to say that Sir John Chilcot could have been bullied by the Cabinet Secretary. He and his team have been remarkably robust on this.

[Lord Berkeley of Knighton]

I wish to say, not as a politician but as a member of the public, that the explanations that the Minister is giving are extraordinarily helpful—which is why this debate in the name of the noble Lord, Lord Dykes, is very useful. The more that that can be got across to the public—the complexity involved, and the secret documents—the better it will be. I still feel very strongly that we need to get there, but we all think that. It is very helpful that those matters are explained to a wider public. After all, we have a responsibility to the wider public, and we are sometimes out of touch with what they think.

[Lord Wallace of Saltaire]

My Lords, I should also have acknowledged the important point that the noble Lord, Lord Berkeley, made—that it is vital that we maintain and re-establish public confidence in public inquiries and in our political institutions as such. One of the biggest problems, which we all share, is the extent of public and media cynicism about the political process in this country. This inquiry is working with great care. Again, I stress that this is an independent inquiry—the Government are not in charge. The four active members of the Chilcot inquiry group are those who are responsible for what emerges, although of course a great deal of negotiation has gone on about the extent of publication. That is a very important part of ensuring that this is not in any sense a whitewashing inquiry.

On a previous occasion I was criticised by one or two noble Lords for suggesting that the Franks inquiry on the Falklands War was not entirely thorough or rigorous. I went back to the review that I had written in International Affairs on the publication of the Franks inquiry to demonstrate why I still hold that opinion. This inquiry is very thoroughgoing. It is being conducted by a number of people whom I personally trust and respect, and who are unlikely to be defenders of the “secret establishment”, so to speak. We very much hope that the report will appear before the end of the year; the Prime Minister has said that publicly. We are doing all we can—with a number of very hard-working officials, who are themselves doing all they can—to complete the final stages of the process of clearing these very difficult and delicate documents so that we can send out the second stages of the Maxwellisation process to those who will be named in the report. We will then move on from that to the presentation of the report to the Prime Minister and, we hope, to publication as soon as possible.

[Lord Desai (Lab)]

My Lords, given the complexity of the process and the point that the noble Lord, Lord Owen, made, that we should not publish it in the new year, would it not be best to wait until after the election, when a Labour Government are in power?

[Lord Wallace of Saltaire]

My Lords, we want to publish as soon as we can, and before we descend into the election campaign.

[Lord Judd (Lab)]

My Lords, the Minister is, above all, an honourable man—of that I am totally convinced. Will he give the House an unequivocal assurance that no Government of whom he is a part will allow the publication date to become part of political tactics in the run-up to the general election?

[Lord Wallace of Saltaire]

My Lords, we have already agreed that the Government are well aware that it is highly undesirable that publication should run into the election campaign. I stated clearly that I share the views of the noble Lord, Lord Owen, on what that means as regards publication. That is part of the context in which we are operating.

House adjourned at 7.34 pm.