House of Lords

Wednesday 23rd July 2014 Lords Chamber

Wednesday, 23 July 2014.

15:00

Prayers—read by the Lord Bishop of Coventry.

Uganda: LGBT People

Wednesday 23rd July 2014 Lords Chamber

Question

15:07

Asked by

[Lord Lexden]

To ask Her Majesty’s Government what action they propose to take over the abuse of the human rights of LGBT people in Uganda as a result of the passing of the Anti-Homosexuality Act there.

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

My Lords, we continue to press Uganda to defend human rights without discrimination on any grounds. The safety of LGBT individuals in Uganda is of great concern. We have sought assurances about their protection and, with our support, EU Heads of Mission in Kampala have initiated strengthened political dialogue. We are committed to engaging closely with civil society groups and are stepping up our support to organisations that protect minority rights.

[Lord Lexden (Con)]

I know my noble friend understands the deep concern that exists on this matter, in both this House and the other place, and I thank her for it. What progress, if any, are the Government making in their efforts to persuade the Ugandan authorities to repeal this terrible law which infringes some of the most fundamental human rights? Will the Government reconsider urgently their decision not to impose carefully targeted sanctions on those responsible for this appalling law?

[Lord Tomlinson (Lab)]

My Lords—

[Baroness Warsi]

My noble friend raised this issue when the Anti-Homosexuality Act was passed in Uganda. We have deep concerns about that Act and the then Foreign Secretary, William Hague, raised these in a Statement at the time. Noble Lords will be aware that the Act criminalises the promotion of homosexuality, the owning of property where homosexuality may take place and a range of other actions which raise huge concern about how the LGBT community can be protected. With regard to sanctions, we keep all matters under review. However, it is important that whatever action we take, including sanctions, actually has a real impact. At the moment, there is a difference of opinion, even among LGBT NGO groups, about whether sanctions would have the desired effect.

[Lord Tomlinson (Lab)]

My Lords, I apologise for my excess of enthusiasm. Does the noble Baroness agree that we diminish our international reputation on all matters concerned with human rights when we constantly denigrate the European Court of Human Rights, when we constantly criticise the European Convention on Human Rights and when we sack an Attorney-General because of his support for those two things?

[Lord Luce (CB)]

My Lords—

[Baroness Warsi]

I get the distinct impression that maybe I am not needed any more. The noble Lord raises an important issue and it is one that I have raised at the Foreign and Commonwealth Office. As the Minister with responsibility for human rights I have said consistently that the way in which we conduct ourselves nationally impacts on our international reputation. What we do internationally will impact on who we are as a domestic nation. Therefore, the noble Lord does make an important point. I would stress to him that, certainly, the Government take the issue of human rights incredibly seriously. It is a huge part of my brief and he will see the commitment in the work that the Government do.

[Lord Luce]

My Lords—

[The Lord Bishop of Coventry]

My Lords, I apologise to the Minister for my enthusiasm. I have not asked a question in this House before so I wanted to get on with it. The Minister will be aware that the most reverend Primates the Archbishop of Canterbury and the Archbishop of York wrote to the President of Uganda in January to reiterate a statement made by all the Primates of the Anglican Communion, in which they said:

“The victimisation or diminishment of human beings whose affections happen to be ordered towards people of the same sex is anathema to us”.

In that spirit, do the Government intend to provide asylum to those who are fleeing the worrying consequences of this law which enshrines such diminishment?

[Noble Lords]

My Lords—

[Baroness Warsi]

We have an eager House today.

We take our responsibilities in relation to people who come to this country to apply for political asylum very seriously, which is something that we should be proud of. I think that the right reverend Prelate would accept that it would not be possible for us to offer asylum to anybody who has been suffering persecution on the basis of sexuality, gender, race or religion around the world. Therefore, the approach of successive Governments has always been to work with the country to ensure that the country itself protects those citizens. There is some hope. The Ugandan Government made a statement on 7 July reiterating their commitment to the rights of individuals and to ensuring that minority communities had access to healthcare, NGOs and civil society organisations. It is important that we ensure that the Ugandan Government stick to those commitments they have made.

[Lord Luce]

My Lords, I must apologise to the Minister for trying to answer questions for her. Does she not agree that the Commonwealth is the right forum in which to discuss such issues, particularly as we have all signed the Commonwealth charter committing us to certain values and principles? Is that not what the Commonwealth is for?

[Baroness Warsi]

I am a supporter of the Commonwealth, as are noble Lords across this House. We are all realistic enough to acknowledge that despite the Commonwealth charter, which was supposed to be a watershed moment, there are numerous Commonwealth countries that do not live by that charter, including in their approach towards LGBT communities. It is, therefore, important that we use the Commonwealth as a vehicle but that we use all other vehicles available to us to ensure that these rights are protected.

[Lord Chidgey (LD)]

Is my noble friend aware that President Barack Obama has described Uganda’s Anti-Homosexuality Act as odious, and that in June the US Government announced sanctions against Ugandans involved in human rights abuses? There has also been a shift in funding from the Ugandan health ministry to alternative organisations. Will our Government reconsider and follow the lead of the Americans?

[Baroness Warsi]

I am aware that the United States reviewed its position after the passing of the Act in June this year. They brought forward a number of proposals, including ceasing support for certain programmes, redirecting healthcare funding and reallocating funding for a public health institute. That is the approach taken by the United States. I come back to this: LGBT campaigners say that different approaches work in different places. It is important that whatever we choose to do, we do it in a way that is in line with the campaigning that is going on, is effective and actually works on the ground.

[Lord Collins of Highbury (Lab)]

My Lords, homosexuality has been criminalised in Uganda since British colonial rule and that position, regrettably, has been reflected in 42 out of the 53 Commonwealth countries. However, this new Act has unleashed a new wave of extreme and violent homophobia, including physical attacks, arbitrary arrests, blackmail and evictions. People’s lives are at risk now. I ask the Minister to reconsider her position in these unique circumstances. If the United States can act now so should we.

[Baroness Warsi]

We need to challenge the culture change that this Act has led to on the ground. Countries in the West have an additional responsibility because there is a real concern in Africa at the moment that much of the radicalisation and preaching that creates the culture that leads to this hatred and consequences for LGBT communities is coming from preachers who come from the West. There is a job we can do in our countries to make sure that we do not perpetuate this.

Economy: Productivity

Wednesday 23rd July 2014 Lords Chamber

Question

15:15

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to raise the United Kingdom’s productivity.

[Lord Popat (Con)]

My Lords, the Government’s long-term economic plan is working, with GDP increasing by 0.8% in the first quarter of 2014. Productivity is also growing, with output per worker increasing by 0.6% in the first quarter of 2014. Alongside deficit reduction and an active monetary policy, we are making longer-term structural changes to support long-term growth. The Government’s industrial strategy policies and four key growth ambitions are also attracting investment and creating jobs.

[Lord Haskel (Lab)]

I welcome what the Minister says but is it actually working? Thanks to the Government’s policy of the job-rich, low-wage, low-skill, long-hours economy, as a nation we are producing fewer goods and services than we did six years ago. With such a policy, how do the Government intend us to pay our way in a competitive world, reduce our balance of payments deficit and raise living standards, if not through productivity?

[Lord Popat]

My Lords, the party opposite is quite often desperate to find worrying economic news. I will talk about productivity: our growth is up, exports are up, manufacturing is up, employment is up, SMEs are up and inward investment is up. Productivity is an area that has remained static. From experience, noble Lords will know that this is a long-term project; it takes time to filter through our economic cycle, to see more productivity.

[Lord Taverne (LD)]

My Lords, one of the most important factors in the improvement of our productivity lies in our strong record in scientific research and development. Does the Minister agree, as most of the vice-chancellors of our universities have made clear, that the greatest threat to our research and development in science would lie in our exit from the European Union?

[Lord Popat]

My Lords, let me cover the European Union. We need the European Union for trade and the European Union needs us so exit is not an option. What is important is that we negotiate reforms within the European Union to make it more practical in terms of business and productivity. The noble Lord is quite right. One of the areas in which we invest heavily to increase productivity is research and development. It is important that we continue doing that.

[Lord Lea of Crondall (Lab)]

My Lords, does the Minister agree that productivity has something to do with the 30 million workers out there? If the Minister agrees with that, is he aware that many of the countries doing much better than us—10%, 15% or 20% better in northern Europe—have something called works councils where everybody is involved in looking at all the questions about world market share, technology, productivity and so on? There is a big gap in this country, under this Government, who are doing nothing about it.

[Lord Popat (Con)]

My Lords, there are several reasons why our productivity has been a little weak. The good news is that it has gone up by 0.6% in the first quarter of 2014. Yes, we need more investment to increase our productivity. Compared to the G7 countries, a larger proportion of our productivity comes from our active involvement in the financial services industry. We need to encourage more manufacturing. We have the right tools and policies in place for that to happen. It is happening but it will take time to filter through the system.

[Lord Vinson (Con)]

My Lords, one of the best ways of raising productivity is to increase demand. Unfortunately, the pound is rising so fast that it has now gone well above its purchasing power parity, making it much harder to export and much easier to import, the very converse of what needs to happen. Will the Government continue to look at every possible way of import substitution and, in particular, look at why a trading nation should not have some concern over its rate of exchange, the rate at which it trades? Could they suggest to the governor that he might begin to raise an eyebrow about the high pound and deleterious effect it is having on trade, productivity and, ultimately, employment?

[Lord Popat]

My Lords, import substitution is not the answer in this very competitive world. As to depreciation of the currency, experience tells us that our currency is worth 25% less than it was at its peak in 2007. Depreciation is not the answer. We should let our currency fluctuate freely in the open market. Experience tells us that a depreciating pound will not result in higher exports.

[Lord West of Spithead (Lab)]

My Lords—

[Lord May of Oxford (CB)]

Building on the admission that one of the greatest drivers of productivity is research and development, does the Minister agree that we need to do something to promote a more risk-taking culture? In the United States, bankruptcy is almost a condition for going forward in Silicon Valley; in our case, it means that it is hard to get a credit card afterwards.

[Lord Popat]

I will cover the points raised by the noble Lord. First, on research and development, we are investing £30 million in the sector and we are giving incentives to companies to carry out research and development. As to low productivity compared to other countries, we have the right industrial and growth strategies in place to make sure that productivity goes up. With regard to asking companies to invest, we have given the right fiscal tools, including higher tax allowances, for companies to invest more.

China: United Kingdom Trade

Wednesday 23rd July 2014 Lords Chamber

Question

15:22

Asked by

[Lord Whitby]

To ask Her Majesty’s Government what steps they are taking to increase trade with China.

[Lord Popat (Con)]

My Lords, trade with China is at record levels. The Government are committed to helping even more British companies to do business in China. We have invested significant additional resources into UK Trade & Investment and the China-Britain Business Council that will substantially increase the support available for British companies. The Prime Minister, the Chancellor and the Secretary of State for Business, Innovation and Skills have all led large trade delegations to China.

[Lord Whitby (Con)]

I welcome the Minister’s reply. My question relates to visa applications. When the Chancellor of the Exchequer, George Osborne, visited China recently, he vowed to address the visa difficulties confronting Chinese tourists, business employers and students wanting to come to Britain. Will my noble friend kindly update the House on what progress has been made to ameliorate these difficulties? Also, having visited Birmingham International’s extended runway yesterday, where he witnessed the inauguration of a direct flight from Birmingham to Beijing, will my noble friend welcome that extra airport capacity, and will he use his office to ensure that Chinese airlines use it?

[Lord Popat]

The noble Lord raises an important question on the subject of visas and tourism. Tourism is our fourth-largest export earner. The number of UK visas issued to Chinese nationals continued to rise in 2013. We have issued 373,000 visas to Chinese tourists and have increased the number of students coming to the UK to the tune of 14%. We encourage Chinese students to come and study at our best universities in the UK. As regards airport capacity, which has been an issue for a long time in this House, yes, we do have a capacity issue with airlines, but I am pleased to say that I was able to receive the first chartered flight from Beijing to the regional airport in Birmingham yesterday morning.

[Lord Cotter (LD)]

My Lords, the Government recently announced that 60 new Foreign Office staff have been placed across China. Can the Minister give me an update on that? Hopefully, the numbers are increasing, the staff will be more widespread throughout China and increased language training will be part of the approach. Do the people involved have experience in business, particularly to help small businesses to trade within China?

[Lord Popat]

My Lords, small businesses are the engine of the economy. I am pleased to say that we have a large number of people from UKTI now based in our Chinese embassy. English is an international language, but it is important that they all learn Mandarin as well. Language plays an important part in bridging the gap between us and the Chinese when it comes to trade. I am pleased to say that UKTI is proactive. In fact, one of our embassies that I visited, which was a diplomatic centre, has become more of a business centre, too. Embassies play an important role in enhancing trade, both in China and in other emerging markets.

[Lord Singh of Wimbledon (CB)]

My Lords—

[Lord Davidson of Glen Clova (Lab)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, there is time for both noble Lords to be able to ask a question.

[Lord Singh of Wimbledon]

My Lords, according to a report on 17 June in the Times, the Business Minister, Michael Fallon, said that human rights must not stop trade with China. Does the Minister agree that that statement demeans the very concept of human rights?

[Lord Popat]

My Lords, human rights are a major concern for this House. In fact, there was a Question on human rights earlier today in relation to Uganda, which is the country of my origin. We take human rights very seriously, but to address them we must quite often cement our relationships with countries by having more trade. I am pleased to say that we raise this issue every time our Ministers meet their counterparts in China—my right honourable friend, Hugo Swire, did so during his trip to China in May, and the former Foreign Secretary did the same thing in February. Our concerns are publicly outlined in our annual human rights report, which was published on 10 April 2014.

[Lord Davidson of Glen Clova]

My Lords, there is concern that the new UKTI China initiative is marked by a number of features: a large amount of public relations; considerable new expenditure; an astonishing paucity of Mandarin speakers among the new recruits; and a focus on what is called internal reorganisation rather than business getting. Can the Minister identify, aside from the usual aspirational platitudes, what measurable targets are going to exist for UKTI and all the new expenditure in terms of the benefits to UK business?

[Lord Popat]

My Lords, extra resources given to UKTI by the Chancellor will help UK companies to enter the Chinese market to win business. Jaguar Land Rover is a classic example and is benefiting hugely from the demand from China. UKTI plays an important role in engaging Chinese business with UK businesses. At the same time, it is also promoting “Exporting is GREAT”, and that is working very well. Soon we will see the benefits; indeed, we already see the benefits, as bilateral trade between the UK and China is to the tune of £75 billion. The growth rate of the exports is much higher than that of our imports.

[Baroness Wilcox (Con)]

My Lords, I am sure the Minister will correct me, but am I right in saying that the Intellectual Property Office has sent out Mandarin-speaking ambassadors from this country to protect the intellectual property rights of people with small and medium-sized businesses who go to China? I understand that they are working extremely well and that the project has been an enormous success.

[Lord Popat]

The noble Baroness has made an important point. We are addressing the issue of intellectual property and we now have legislation in place. We are asking our Chinese counterparts to comply with our regulations on intellectual property.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

[Lord Popat]

My Lords, I am afraid that I did not hear the question.

[Lord Brooke of Alverthorpe]

Can the noble Lord tell the House how many additional flights from Heathrow to China have been introduced since this Government came to power?

[Lord Popat]

My Lords, some 39 flights depart from Heathrow to China every week.

Pensions Advice

Wednesday 23rd July 2014 Lords Chamber

Question

15:30

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what safeguards will be in place to ensure that people receive sound advice when seeking to access their pension funds.

[Lord Newby (LD)]

My Lords, every individual with defined contributions pension savings will on retirement have a new right to free and impartial guidance to help them make informed decisions about how they use their pension savings in retirement. The Government will legislate to give the Financial Conduct Authority responsibility for setting standards for guidance and monitoring compliance with those standards. The FCA has published a consultation paper alongside the Government’s response on its proposed standards.

[Lord Kennedy of Southwark (Lab)]

My Lords, what has been announced by the Government so far is wholly inadequate. We all remember the pensions mis-selling scandals of the 1980s when people were enticed out of SERPS and then fleeced. What qualifications will individuals need to have in order to be able to give this advice, and what guarantees will be put in place to ensure that people do not see their pension pots go in fees, charges and wholly inappropriate products?

[Lord Newby]

My Lords, the key innovation in the way we are planning to introduce this change is that of giving every individual coming up to retirement an entitlement to free guidance. To ensure that the guidance is impartial, we have decided that it will be provided by independent organisations which have no actual or potential conflicts of interest; it is not going to be the pension companies providing that guidance. A team has been established within the Treasury to lead on service design and implementation, bringing together expertise from across government, the Pensions Advisory Service and the Money Advice Service. The FCA will be the ultimate backstop in terms of the quality of the advice given and the monitoring of it. We will legislate to give the authority that explicit power in the Pension Schemes Bill later in this Session.

[Lord Jopling (Con)]

My Lords, will the Minister endorse the wisdom of my father who, in giving me an instruction shortly before he died, said that after his death I was to ensure that my mother took no advice whatever from either the vicar or the bank manager?

[Lord Newby]

My Lords, being married to a vicar, I could not possibly say that vicars are not always good sources of advice. The key challenge raised by the Question is that for many people pensions are a subject of complete bemusement. This reform, which I believe is very welcome, will give people much more choice over how they spend their money in retirement. However, they will be able to spend it wisely only if they are given proper guidance, and that is what the Government are committed to ensuring.

[Baroness Drake (Lab)]

My Lords, guidance to help people make choices about how to spend their pension funds is of course to be welcomed, but given that the Government expect the industry to respond to greater choice by providing new retirement income products, how will they ensure that these new products meet the interests of savers in terms of quality standards, transparency and level of charges, so avoiding new manifestations of consumer detriment occurring yet again in the pensions and investment industry?

[Lord Newby]

My Lords, this is why we have set up a new framework for regulation and why we established the Financial Conduct Authority. We have given the authority much greater powers than the FSA had to deal explicitly with these problems. We have to be sure that the new products which are coming forward meet the standards that the noble Baroness wishes to see. The FCA is tasked with that job and is absolutely determined to avoid the problems of mis-selling that we have seen in the past.

[Baroness O'Cathain (Con)]

My Lords, is it at all possible that any information on pensions that goes to the ordinary man or woman in the street, like me, could be passed by the Plain English Campaign because there is nothing worse than page after page of small print in stupid words?

[Lord Newby]

My Lords, I completely agree. For many years I have been trying to persuade the financial sector to do as the medical sector does and establish a professional body of writers to try to ensure that the material that people get is comprehensible. As far as this particular process is concerned, the FCA is looking to provide a template that pensions providers will complete, which might be on as little as a single sheet of paper, that will provide the basis for the guidance that is subsequently given.

[Lord Hughes of Woodside (Lab)]

Do the Government recollect that millions of people, even today, are bombarded on a daily basis by different companies, offering help to get payment protection policies returned and so on and so forth? How will they guarantee that this new policy will not mean that we will be bombarded daily by people telling us that we must try to draw down our pensions?

[Lord Newby]

My Lords, the key thing is that people get guidance from a trusted source. There will be a commonality of approach. The FCA is producing very detailed technical guidance, which everybody providing the personalised guidance will provide. I recommend that the noble Lord looks at the FCA consultation document that came out earlier in the week, which explains how it is going to do that. There is a danger that we are so concerned that things might not work that we never innovate.

[Baroness Sherlock (Lab)]

My Lords, I remind the House of my interest in the Financial Ombudsman Service board. In the Budget, the Chancellor announced that everybody would get,

“free, impartial, face-to-face advice”.—[Official Report, Commons, 19/3/14; col. 793.]

on their retirement options. Now we learn that it will be guidance, not advice, and that face-to-face could mean online or over the phone. Will the Minister please tell the House how many people in 2015-16 will actually get face-to-face guidance? Will he reassure the House that that commitment will not be watered down any more? People coming up to retirement need advice they can trust.

[Lord Newby]

My Lords, the difference between guidance and advice is simply that within the financial services sector advice is a regulated activity which, as the noble Baroness knows, requires those who offer it to have gone through a significant process. This is a different level of advice. As far as face-to-face advice is concerned, the Treasury has undertaken a considerable amount of consultation. Many people have said that they would much prefer, in the first instance at least, to get their advice online or to do it on the phone. We have said, however, that any individual who wishes to have face-to-face advice will have it, and they will. It is simply that not everybody wants it that way.

Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014

Wednesday 23rd July 2014 Lords Chamber

Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014

Motions to Approve

15:38

Moved by

[Lord Newby]

That the draft orders laid before the House on 25 June be approved.

Relevant document: 4th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 21 July.

Motions agreed.

Police and Crime Commissioner Elections (Amendment) (No. 2) Order 2014

Wednesday 23rd July 2014 Lords Chamber

Motion to Approve

15:38

Moved by

[Lord Taylor of Holbeach]

That the draft order laid before the House on 30 June be approved.

Relevant documents: 5th Report from the Joint Committee on Statutory Instruments, 6th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 21 July.

Motion agreed.

Criminal Justice and Courts Bill

Wednesday 23rd July 2014 Lords Chamber

Committee (3rd Day)

15:39

Relevant documents: 2nd Report from the Constitution Committee, 3rd Report from the Delegated Powers Committee, 14th Report, Session 2013-14, from the Joint Committee on Human Rights

Clause 29: Secure colleges and other places for detention of young offenders etc

Debate on whether Clause 29 should stand part of the Bill.

[Lord Ramsbotham (CB)]

My Lords—

[Baroness Anelay of St Johns (Con)]

My Lords, I wonder whether I might assist the noble Lord, Lord Ramsbotham, as I appreciate that the microphone did not come on at the beginning. I also appreciate that he is speaking from a position where many noble Lords are leaving either side of him. Perhaps noble Lords could leave speedily and the noble Lord, Lord Ramsbotham, might just hesitate for a few seconds to allow them to speed past him.

[Lord Ramsbotham]

My Lords, on Monday I listened with great interest to what the noble Lord, Lord Marks of Henley-on-Thames, said about the proposed secure college in moving his comprehensive Amendment 43C and to what the noble Lord, Lord Carlile of Berriew, said about the site selected for it and the unanimous opposition of all involved NGOs to the proposal. Both explained vividly why the noble Lord, Lord Beecham, and I feel sufficiently strongly about it to oppose Clause 29 standing part.

Before explaining my case, I compliment the Minister on honouring his admonition to the House at Second Reading to keep an open mind and for not resorting to the rhetoric used by his Secretary of State about what he clearly regards as his pet project. At Third Reading in the other place, Mr Grayling said that it was beyond him how the Opposition could criticise his once-in-a-generation reforms, urging them to “think again” before they played party politics,

“with the future of young people … and to turn away from siren voices that said that this was a brutal new regime”.—[Official Report, Commons, 17/6/14; col.1071.]

At a public conference I attended, he said that opposition to the secure colleges that he and the Deputy Prime Minister were committed to delivering with haste was a “totem of the left”.

Independent Cross-Benchers do not play party politics. I entirely agree, along with, I suspect, the vast majority of this House, with the Secretary of State’s analysis of why reform is needed and that the educational content of child custody must be improved. My criticism is not about the imposition of an alleged brutal new regime but, rather, that we lack any information about what regime is to be imposed on an establishment whose formation flies in the face of all the evidence of what does or does not work to satisfy the needs of children in custody. The Minister made much of the importance of allowing potential contractors to be creative and innovative but, as many noble Lords have pointed out, there are practical limits to that, such as the perpetual movement of children in and out of places of detention, requiring many individual syllabi.

My criticism is based on what I saw, marked, learnt and inwardly digested of the practical realities when responsible for inspecting secure children’s homes, secure children’s centres and young offender institutions, and on what I have seen and heard subsequently. Both at Second Reading and on Monday, the Minister said—unarguably—that we need to do better at rehabilitating young offenders because youth custodial outcomes are presently not good enough. By recognising that some people would continue to require separate specialist accommodation, the purpose of Part 2 of the Bill remains to establish a statutory framework for a pathfinder secure college, which the Government suggest is a solution to the problem. Educationalists and others will be invited to deliver a broad and intensive curriculum to support and engage young people. The House has already debated a consultation on the rules to ensure that establishments operate safely and securely, which is to be launched before Report.

In that connection, can the Minister confirm or deny that the person in NOMS responsible for writing the rules and policies for secure colleges is the former governor of HMYOI Brinsford, who was moved after the Chief Inspector of Prisons gave it a dreadful report, describing it as the single worst jail he had ever visited, to HMP Hewell—which is about to receive a dreadful inspection report—and from there to this role in NOMS? If that is true, I must question the judgment of whoever made the appointment.

While admitting that transformation could not happen overnight, the Minister claimed that the Government’s vision was justified by the fact that small local facilities simply could not deliver the high-quality and broad-ranging facilities that meet the diverse needs of young people. If Parliament did not share that vision, the construction of the next generation of facilities would have to take place within the existing framework.

15:44

I entirely accept that the proposed secure college is a possible solution to the problem but, unlike the Government, as expressed in the impact assessment, I contend that it is neither the right nor the only one. I question the Minister’s comparison with free schools because parents are not free to choose a place of custody; providers can make a profit; and I suspect that current minimum statutory requirements on the curriculum may be increased, judging by yesterday’s Statement about some free schools in Birmingham.

The Government have presented no evidence that they have tested or costed a means by which their anticipated improvements in education and training will be realised, giving them a benchmark against which to judge competitive bids. Nor do they have a basis to support their claim that the college will instil in young people, many with dreadful records of exclusion from, and poor attainment at, school, a commitment to, and desire for, continued engagement in learning. Experience shows that this results only from dedicated one-to-one support over time, and time is not on the side of staff who have an average of only 79 days to provide it.

Additionally, as anyone who has had anything to do with troubled young people knows only too well, there are no quick fixes in turning their present and future around. Therefore, the Minister will understand why so many hope that the Secretary of State’s haste is based on proof that he can do what he says in the stated time and not just that the Government have had planning permission to build a YOI on the Glen Parva site since 2008. The plans that I have seen appear to be of what can be crammed into a given area, rather than a careful design to accommodate the various and varying needs of 320 damaged children, including space to let off the steam of adolescence.

As many noble Lords have said during the debate, I submit that the secure college proposal is so undeveloped that it is both unreasonable and irresponsible of the Government to expect Parliament to rubber-stamp it until it knows more. Neither as a soldier nor as chairman of an NHS hospital trust would I have been happy to launch any initiative on such flimsy evidence. I say that not only because construction is not due to start until the next Government are in power but because of the proposal’s impact on countless young people. I will not repeat any of what was said on Monday; instead, entirely in line with my agreement with the Secretary of State’s analysis of the problem, I want to be constructive and outline two alternative solutions, both known to NOMS and the Youth Justice Board but apparently ignored by the Government.

In conclusion, I will suggest alternative ways forward. My first alternative is one that I have mentioned many times on the Floor of this House. I declare an interest as an original member of the advisory board of what was previously known as the Young Offenders Academy and is now the Secure Foundation. At its heart is the provision of each young offender with long-term contact with a responsible adult, achieved by conducting everything on one site, with a catchment area of one hour’s travel by public transport. By “everything”, I mean education, job training, healthcare, substance abuse treatment and activities, including those associated with youth clubs and cadets, that are accessible on a 24/7 basis.

In addition, there will be a hostel for the homeless and a low-level custody centre for those serving community sentences, who go home at night. Originally a pilot project was planned for Greenwich and adjacent boroughs but, following the riots, the mayor asked that it should be somewhere more affected by them. It is now hoped that it will start next year in Haringey under the direction of a highly respected former member of the Youth Justice Board.

There is widespread support for the project, not just among local authorities but among organisations that contribute to the integration and settlement of young people. These are far more appropriate words than “rehabilitation” or “resettlement”, because too many young people have been neither integrated nor settled into the community before. Some of these organisations are chambers of commerce, which see the opportunity to identify and train potential employees, and those responsible for healthcare and substance misuse treatment, which see the benefit of continuity and availability.

Furthermore, the project, which has been proved to be far cheaper than a young offender institution, has attracted the attention of Birmingham, Manchester and Leeds, among others, not least because it combines manageable size with preserving the principles of maintaining closeness to home, development of good family contact and links to local authorities of children in care, all ignored in the Government’s vision.

My second suggested alternative is the solution run very successfully in Spain for more than 20 years by the not-for-profit organisation, Diagrama, which is currently competing to run an STC in this country. One of its 38 establishments, of varying size and each with a catchment radius of 30 to 50 miles, has just been awarded the title of best children’s custody centre in Europe. Diagrama’s child-centred ethos is to create living environments and services conducive to the main task of integrating young people and consistent with the needs of developing children; to provide children and young people with the skills they need to lead positive and fulfilling lives; and to do whatever it takes to meet the needs of children, formal and informal, in partnership with their parents, families, communities and existing support services.

This child-centred approach is also being replicated in the United States, where the growing trend is to turn away from large establishments in favour of what is called the Missouri model, in which no facility has more than 50 beds. Family therapy is practised and there is general recognition that trained specialist staff building relationships with children are better able to deliver a positive regime than less qualified custodial officers.

The key to Diagrama’s success is the quality of its staff, all those working with children being required to have university degrees. Education, which forms the basis of every working day, is broad—academic, vocational, physical and relationship with both staff and fellow offenders. Much work is provided by and done in local communities. As the noble Lord, Lord Carlile of Berriew, will remember, during the inquiry he chaired into the use of restraint and seclusion on children in custody, we visited Orchard Lodge, a secure home then run by Southwark Council and tasked with holding children with mental health problems. We found that experienced staff, who had been there on average for 11 years, did not need to restrain as much as less experienced staff elsewhere. Negotiation rather than punishment is also the norm for the experienced Diagrama staff, who have been in post on average for 13 to 15 years, and there has never been a suicide in any establishment. I first heard of the organisation when completing my own thematic review of young prisoners in 1997, and the then director of secure units for children at the Home Office reported:

“The whole atmosphere was quite different from that in UK establishments. It was more relaxed, but it was also very purposeful”.

Only last week, two people who really know what they are talking about in this context contacted me separately to praise what they had just seen in Spain. When I asked Diagrama’s United Kingdom director to sum up its ethos in two words, he replied. “Love and boundaries. Children need to have both”. To satisfy the Secretary of State, the word “tough” can safely be added as a prefix to both.

It seems to me that the Government have two choices. Either they can charge ahead in haste, committing a vast amount of public money to an untried vision about whose delivery they will know nothing until they open the competitive bids for an unspecified contract, employing an unspecified number of staff with unspecified qualifications—which runs counter not only to experienced advice but to readily available evidence about what works and does not work with children in custody. No responsible chief executive would dare to make such a proposal, riddled as it is with such uncertainty either to their board or its shareholders. I contend that the Government should feel similarly about their duty to their board, Parliament, and to their shareholders, the public—their electorate—for whose protection they are responsible.

Or the Government can call a halt to the secure college proposal, which they would be perfectly justified in doing thanks to the success of the Youth Justice Board in reducing the number of children in custody to a relatively small number of the most damaged, dangerous and disruptive, all of whom need specialist treatment. This is not to suggest calling a halt to trying to find a solution to the problem of better educating young people in custody and better integrating them into the community, but rather that the Government should adopt a different approach by co-ordinating the contributions of all ministries involved: justice, education, health, communities and local government, and work and pensions, as well as voluntary sector organisations such as Childhood First, which look after the most troubled and difficult children on behalf of local authorities.

I fully accept that no single small local facility can meet the diverse needs of a large cohort of young people, but a number with different facilities can. That could be done by interconnecting all existing establishments used to detain different categories of child offender into a national network designed to meet all needs with similar provision in every region in England and Wales. The £85 million currently earmarked for the secure college could be better spent on refurbishing some of the existing accommodation. A national network along the lines of Diagrama’s operations in Spain could include some establishments being made secure foundation hubs, thus combining all that is best about localism with all that is known to work with and for young children in custody and in the community.

Children will be in custody whichever party is in power and, as I said, there are no quick fixes for improving how their needs are met. Therefore, I suggest not only examining this proposal on an all-party basis but acknowledging and exploiting its success in custody and the community. Rather than appoint another one-off inquiry, responsibility should be delegated to the chairman of the Youth Justice Board. I have not consulted him, but I can think of no one better than the noble Lord, Lord McNally, to carry out the task.

I do not expect the Minister to answer in haste; indeed, I hope that he will not attempt to do so. Necessarily, opposing that a clause should stand part seems destructive but, in trying to persuade the Government to think again before embarking in haste on a project I fear they will come to regret at length, I am thinking about the long-term future for young people in custody. If the Government agree to do so, I hope that those made responsible for the thinking will accept the importance of listening to those who know far more than they do about the practical realities of dealing with difficult and damaged young people. As I have said many times, people are not things, particularly when they are young. If I decide not to seek the opinion of the Committee at this stage, it is because I hope for a considered government response before Report. I beg to move.

[Lord Cormack (Con)]

My Lords, I had not meant to speak but feel moved to do so because I was very persuaded by what the noble Lord, Lord Ramsbotham, said. He spoke of the Brinsford young offender institution, which is in my former constituency. He and I became acquainted because of the assiduous attention that he devoted to that institution. His initial report—which was an exceptionally damning one, as I am sure he would agree—led to a turnaround in that institution of a very marked nature, and, indeed, he reported on it more favourably later on. It seems to me that we have had no more effective or dedicated Chief Inspector of Prisons than the noble Lord, and he devoted particular time and attention to young offenders. He speaks with an authority that very few people can begin to command. All I would say, very briefly, is that if the noble Lord—having looked in detail at a proposal which does have certain superficial attractions—has come to this conclusion, it behoves government and others to think again very carefully indeed.

I hope that my noble friend the Minister, for whom I have a very great regard, will give an undertaking to have further consultations with the noble Lord and others to try to come up with a solution that meets the requirement that we all surely have—the rehabilitation of young offenders, many of whom have backgrounds which do not condone their actions but explain what they have done. Young people need, above all, that tough love and care and concern of which the noble Lord spoke. I found his remarks exceptionally persuasive. If he believes that what we need in this country is to learn from what has been achieved in other countries, particularly Spain, we should seek to do that.

Clearly it would be wrong to divide the House today on this—the whole purpose of this House is to have exploratory Committee sessions and then to come back, perhaps to vote, on Report. I hope that a vote will not be necessary, because this is not a subject that ought to divide us on party lines. We should have a totally common concern about it. I urge my noble friend to have the sort of discussions that I have just mentioned so that we can put some flesh on the bones. It is a very vague proposal. We do not really know what we are voting on. It is a little reminiscent of that extraordinary episode a couple of days ago.

Let us take to heart what the noble Lord said in his extremely persuasive speech and try to find a solution that really will fit all. I suspect that would be a solution that relied on a number of disparate facilities rather than creating one institution which would be—I hate to think of this—a sort of national for-profit institution. The only profit that can truly be achieved from having any sort of change in the way we treat our young offenders is the profit that rehabilitation brings and the fact that they do not offend again.

16:01

[Baroness Butler-Sloss (CB)]

My Lords, I am a patron—probably the only patron—of a secure unit in Exeter, which, when the children are there for long enough, does an extremely good job. The education there is excellent. The unit receives children under the terms of the Children Act—Section 25, I think—and, certainly in the past and probably still now, children who have offended. It is a good institution. I very much support what the noble Lord, Lord Ramsbotham, said. I am very concerned that this excellent small unit, which does a useful job in Exeter, will be completely got rid of in favour of a large secure college situated somewhere which is miles away for the children who are not from Devon and Cornwall.

[The Earl of Listowel (CB)]

My Lords, earlier today I spent some time with an academic who left a young offender institution at the age of 15 without any qualifications. He has some sympathy with what the Government are proposing. As my noble friend said, the impulse to put education at the heart of meeting the needs of these young people is absolutely right. My difficulty, I am afraid to say, is that there is so little detail in what the Minister is proposing that I can see many very poor outcomes arising from it. As parliamentarians, we need to know more about what is going to be delivered to these young people.

I visited the Orchard Lodge unit that my noble friend described and, like him, I was most impressed by the high quality of multidisciplinary services that these young people receive. There may be lessons to be learnt from the research into the educational outcomes of looked-after children. I think that Professor Sonia Jackson was the academic who first drew attention to the disparity in educational outcomes between looked-after children and the general population of children at the end of the 1990s. This is relevant because many among the population in the secure estate have come from local authority care. She wrote to me recently, updating her research and looking again at the continent. She found that the United Kingdom has the best statutory framework for looked-after children and care leavers that we know of. That is a great endorsement of what this Government and the previous Government have done in terms of the legislative framework around these vulnerable young people. However, she also found that we have poorer educational outcomes than many countries on the continent. She ascribed this to the fact that we have such low expectations in terms of the educational qualifications of those who work near these young people.

As I mentioned earlier, in Denmark 90% of staff in children’s homes have a degree-level qualification and in Germany 50%. However, only 30% do in this country. As an authority was telling me recently, less than half of the managers of children’s homes have a degree-level qualification. If we are looking carefully at the policy to improve educational outcomes for our troubling, and often very troubled, children, we must take on board what my noble friend has said and his example from Missouri, where units are staffed by people with degree-level qualifications. I am reminded of the very interesting fact that the principal indicator for a good educational outcome for any young person is the level of qualification of their parents. If a parent has a degree, it is likely that their child will get a degree. It seems to make sense to look at the level of qualifications of people who work near these young people and to ensure that, as far as possible, they are well educated, so that those young people are likely to do far better in their own education.

[Baroness Howe of Idlicote (CB)]

My Lords, for the first time I have some hope that there may be an answer to the problem of that part of the Bill that has troubled everyone on all sides of the House, and which will never work in practice no matter how well intentioned it may be. We have now had from my noble friend a very clear outline of the sort of institution that would make sense.

As we all know, so many of the children who end up in this position not only have had appalling backgrounds but often have had no education at all. One of the first things needed is a basic test of the extent to which they are able to read or write. I hope that the Minister will take this issue away and be persuaded that his proposals are absolutely no good and will not have the support—let alone the extra cost that they would involve. They would provide a solution that would be totally unsatisfactory.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I rise to support the noble Lord, Lord Ramsbotham. In his introduction, he gave a very comprehensive analysis of the secure college proposals and came up with positive alternatives, which he has every reason to believe would be more favourable than the secure colleges model.

I want to concentrate on one particular aspect that, as far as I know, no other noble Lords have looked at, and that is the costs involved. As I understand it, an adult male prison place costs about £40,000 a year; a place in a male young offender institute costs about £80,000 a year; a secure training centre place costs about £140,000 a year; and a place in a secure children’s home costs about £210,000 a year. Not surprisingly, those costs are completely dominated by the staffing ratios, which are what control the costs of running prisons. When I put the issue to the former Minister, Jeremy Wright, regarding the proposed staffing levels for the secure colleges, his answer was that that would be a matter for the company that was bidding for the contracts. However, this is fundamental to the cost and the quality of the education provision for young people in custody.

Why are the Government so reticent in talking about what they hope to be the running costs of these institutions when they are up and running? Like all noble Lords, I have had many briefings on this matter, and there was reference to a cost of £60,000 a year per boy in a secure college. I have not found any further reference to that and I do not know whether the figure is right, but the House would be better informed if we knew exactly what the Government aspire to in reducing the per-year costs of having boys in these secure colleges. The Government should not be reticent; there is nothing wrong with trying to save costs, but the Committee would be much better informed if it knew what cost they aspire to.

[The Lord Bishop of Rochester]

My Lords, I hesitate slightly to speak in this debate, not least because I am still rather new to your Lordships’ House and new in my role as bishop to prisons. However, I cannot help but note the wise advice of the noble Lord, Lord Cormack, in encouraging some space for rethinking. Many of us would applaud the overall intention expressed by the former Prisons Minister to establish somewhere that is primarily an education facility but with detention aspects. The difficulty for some of us is that we cannot at the moment see the detail of how that might be provided. Some of the points that have just been raised by the noble Lord, Lord Ponsonby, about staffing levels and so on are key to this. We encourage the Government to have the courage to be a bit more prescriptive regarding who might be the eventual provider than is the case now.

If a mechanism could be found for us to move forward without the need for the Committee to divide on this—which would put some of us in a difficult position—I am sure that it would be appreciated. Like others, I look forward to the Minister’s response in the hope that some consultative way forward on this might be found. I am sure that many of us around the Committee would be more than happy to be part of such a process.

[Baroness Howarth of Breckland (CB)]

My Lords, having seen fashions come and go in a long career of working with young people, I am concerned that this proposal might be yet another fashion. What we know of the young people we are talking about is that we have reduced the number of those needing these sorts of facilities to those with the greatest level of disturbance, who come from the most complex backgrounds, and who are going to need extraordinary intervention.

What we know most of them have in common—in my experience and, I am sure, that of my noble friend Lord Ramsbotham or any of us who have worked with these young people—is that they have had failed relationships. In fact, few have had any consistent relationship, many of them from when they were babies. This will have affected their total development. We know that the one thing that works for young people who have had a series of failed relationships in their families and thereafter, including in their education with their teachers, is one-to-one, close intervention, where they build a relationship—sometimes for the first time—and are able to learn from that that one does not have to have negative consequences.

I applaud the Government’s intention in building this college to pay attention to the education of these young people. Other people who have heard me speak on the Floor of this House about the previous Government’s phrase “Education, education, education” will have heard me say that, “Without welfare, welfare, welfare, children do not learn”. Relationship understanding helps children to learn; a deficit in it cannot be made up unless they have some sort of understanding of what makes people work and that they have value. They can then build their esteem.

I join other noble Lords, following the noble Lord, Lord Ramsbotham, in asking the Government to think about this programme again. The intention is good, but they would regret the outcomes. I say very seriously to the Minister that, in my time, I have run these huge establishments as a director of social services and as an assistant director. I have closed them. I have run small establishments. I have seen what works. I have no doubt that this fashion will be regretted in the future if it goes forward. The Government have a wonderful opportunity to put something else together that will cost less, be of better quality and really make a difference to these children’s lives.

16:15

[Lord Marks of Henley-on-Thames (LD)]

My Lords, I said everything I wished to say about secure colleges and the proposals when I spoke to the amendments in my name on Monday. However, I associate myself with the positive suggestion made by my noble friend Lord Cormack, backed up by the right reverend Prelate the Bishop of Bristol and others, that, given the very serious difficulties that face the present proposals for the implementation of the clause, this might be an opportunity for the Government to consider withdrawing it and coming forward with something else.

I repeat that we all applaud the proposal to give young offenders in the prison estate more educational opportunity. We all share the view that young people in the prison estate are there often precisely because they have not had educational opportunities in the past. In a sense, it is not what is in the Bill—the provision that the Secretary of State may provide secure colleges—that we object to; secure colleges would be capable of having all the aims that were set out in our amendment, but would be provided in a very different way from that which is presently proposed. Our concern, which my noble friend now understands is shared across the House, is that the proposal for implementation by the single pathfinder college that is now envisaged runs counter to all the evidence on the future of our penal system for young offenders. For that reason, I suggest the Government may wish to reconsider the whole future of the secure college proposal.

[Lord Woolf (CB)]

My Lords, I am not as expert in the matters raised as many who have already spoken in this important debate, but I have one advantage, which is that I am fully instructed by the Prison Reform Trust. The second is that, at one stage, I had to make a report—known as the Strangeways report—into deep problems in our prison system. Certain general lessons were set out in that report, which I think I am right in saying all those who are knowledgeable in this area still regard as being the right recipe for positive progress. We have had great advantage in hearing from the noble Lord, Lord Cormack, based in turn on what was said by the noble Lord, Lord Ramsbotham. I urge the Minister to take the very wise course that is being pressed upon him. We do not want to make a mistake of the sort that has been indicated could happen.

[Lord Beecham (Lab)]

My Lords, as noble Lords have already demonstrated, there is no shortage within your Lordships’ House of people with not only an interest in but considerable expertise of—derived perhaps from professional or even judicial experience—the problems that we are discussing. However, I think we would all agree with the noble Lord, Lord Cormack, that there is none with the particular degree of involvement and expertise of the noble Lord, Lord Ramsbotham. The House is indebted to him for his continuing interest in this problem and for the positive way in which he seeks to assist the Government and, through the Government, society in dealing with an intransigent and difficult problem affecting numbers of our young people.

I was particularly interested to hear from the noble Lord today about the local academy which is to start, I think he said, next year, and also about the Missouri experience. If indeed there is—and it is clear that there will be—an opportunity to see how the proposed academy, which I think he said would be built in Haringey, works, then surely it would be sensible to learn from that experience and, if it is successful or even if it is not, to build on that experience in order to craft a way of dealing with the Government’s proposal here. As I said at Second Reading, and again on Monday in Committee, we all agree with their proposal to the extent that we recognise the importance of providing education as part of the way of dealing with the problems of these young people. If, instead, the Government go ahead with their own proposal, next year there will be built an institution catering for 320 youngsters. There is a widespread view in this House and certainly outside it that that is simply too large a number of young people to afford a realistic possibility of attending adequately to their problems.

It so happens that I had tabled an amendment which proposed a much smaller college as a pilot. The number of places that I suggested was 50. I did not know about the Missouri experience in suggesting that figure but, on the basis of some of the discussions that have been held outside this Chamber, it seemed to be a reasonable size. I am reassured by the noble Lord’s confirmation that that appears to be a very successful project. Again, I commend that kind of approach to the Government in looking at how they might carry forward their very well intentioned objectives. I also refer them to the experience of Finland, which has a very good record in dealing with youngsters who have committed offences, and it has a successful record in ensuring that they emerge from care—let us call it that rather than “custody”—into society.

I do not know the extent to which the Government have looked beyond these shores, as the noble Lord suggested and as I am now suggesting, to see what the experience of other countries and jurisdictions might contribute. However, as matters stand, many of the criticisms that were voiced earlier remain unanswered. The noble and learned Baroness, Lady Butler-Sloss, asked a perfectly valid question about her local institution. She asked where the secure unit in Exeter will go. The same question remains to be asked about a whole range of institutions that are currently operating at, as I acknowledge, different rates of cost.

In Committee on Monday, I referred to the fact that the number of places in secure children’s homes has been reduced to 138, so there has clearly been a reduction—of 28 places nationally—in that area. It remains to be seen what the future will be not only of those homes but of the other training facilities, because it is envisaged that some of those who are currently in other institutions will transfer to this new college and presumably any other new colleges that might come on stream. Therefore, there is a very real risk to the kind of institutions that the noble and learned Baroness referred to.

As the noble Earl, Lord Listowel, and my noble friend Lord Ponsonby said, there is so little detail in the proposal that it is difficult to be confident that, at the end of the day, we will emerge with a fully developed project that will do the job which the Government intend—we agree with that intent—to see carried out. I do not expect the Minister, just two days later, to answer the questions that I posed on Monday. However, some of them are worth repeating. As is his normal, courteous practice, he said he would identify questions asked by noble Lords, write to us and place the reply in the Library. I will touch on some of them as a gentle reminder of some of the issues that were raised. One was the report of the Joint Committee on Human Rights and, in particular, its concern that there was no equality impact assessment. That seems particularly important in relation to gender, as there is a real concern about the current proposal of having girls in the same large institutions as boys. A second concern was the requirement for special educational needs to be catered for.

There are also questions around the secure children’s homes, to which I have already made reference. The Minister implied that there were, perhaps, some shortcomings in these establishments. What improvements in service have been identified as requiring attention? We have heard from the noble Earl, Lord Listowel, that a place in one of those homes costs around £200,000 a year. If that is regarded as too high, what do the Government consider an appropriate figure, both for the individual, on a per capita basis, and in terms of the aggregate cost? Reverting almost to the question posed by the noble and learned Baroness, Lady Butler-Sloss, how many children now in secure homes do they envisage will transfer to the larger college? It is slightly disturbing that the duty to use best endeavours to ensure that the needs are met of children who have been assessed as needing EHC plans would be placed on the principal of a secure college. On Report in the other place, the Minister said that,

“a great deal of further thought will be given to how those needs can be met”.—[Official Report, Commons, 12/5/14; col. 538.]

It is only two months since that observation was made, but can the Minister indicate—not necessarily today—that that has been followed up and with what result?

Many noble Lords are concerned, as I am, about staff to children ratio. Can we be assured that it will not simply be left to the contractor to opt for a figure just in terms of numbers, but that these will be numbers with the sort of qualifications that, as noble Lords have indicated today and in previous debates, would surely be required to attend to the complex needs, including the educational needs, which are the main object of the project?

16:29

There are still, as I have indicated, a number of questions that will have to be addressed by the time we get to Report. I note that the Minister in replying referred to the issue that was mentioned by the noble Lord, Lord Ramsbotham, of the relatively short period in which, on average, these young people will actually be present in the college. I believe that the average will be some 79 days. The Minister acknowledged that,

“a sufficient bank of time in a secure college would be intended, with an individually tailored plan”.—[Official Report, 21/7/14; col. 1035.]

What sort of time are we talking about and who determines what sort of time will be ultimately allocated? Will it be a matter for the college or for the department in entering into the contract?

However, there is still the overriding problem that at the moment we are talking about a 320-place institution to be built in Leicestershire. We have heard from the noble Lord, Lord Ramsbotham, about a 50-place institution that operates within a fairly narrow geographical area and has a catchment radius of 30 to 50 miles. That will not happen unless one is built in London. We might then achieve that kind of proximity, but we will not achieve it if we seek to house one-third of the total number of youngsters nationally within one institution in Leicestershire. It simply will not happen. That means that they are a very long way from their homes and communities. Moreover, it means that the relationship with the local authorities from which they have come and to which they will return is bound to be more difficult. Yet, as I think the noble Lord, Lord Cormack, implied, it is very important that there should be that connection between the children’s services department of the relevant local authority and any institution which is dealing with these young offenders—and, for that matter, with the relevant arm of National Health Service England which commissions the medical services. It obviously makes it much easier on that side if the same body is commissioning the service for the youngster when he or she is at home and wherever they are resident if they are sent to an institution of this or, indeed, any other kind. It cannot be helpful if a case is passed to and from different arms of the health service any more than it can if there is a problem around regular contact with the relevant local authority.

I want to make a final point about distance and I cannot recall whether this was mentioned when we discussed these matters in Committee on Monday. There is no provision within the plan for this college for overnight accommodation for visiting families. I do not know whether that is an oversight or whether it is deliberate, but it is a significant omission. If we are talking about people having to travel a considerable distance, and on the face of it that will be the case, it is clearly necessary to facilitate overnight accommodation, at any rate for some people. However, absolutely no provision was made in the presentation that we received recently.

There are very many unanswered questions here. None of us wants to see the Government’s objectives of supplying education undermined in any way. We want to help the Government to achieve those objectives. However, we do not think that there is sufficient detail here or sufficient indication of how the Government will commission the provision of such an institution. We think that there is too much reliance on someone out there, one of the four selected potential contractors, to come up with a scheme of their own devising over which, as matters stand, Parliament would have no oversight whatever. It is too big a risk to take without having some element of parliamentary oversight. For those reasons, unless matters can progress—I hope they can—the Opposition would certainly support the noble Lord if he felt constrained to put these matters to the test by a vote of the House on Report.

[The Earl of Listowel]

My Lords, listening to the debate three further brief points occur to me. First, I discussed the matter of cost with an academic who currently works in the area of care leavers and has done through his career. He is a graduate who came through care and spent time in the secure estate. How much should we spend on young people while they are in care? He pointed out the immense cost of failing to intervene effectively. It could be many millions of pounds if one thinks of time in the adult secure estate, time spent in the health service, and time just not working. That is one aspect to keep in mind when thinking how much one needs to spend at this point to avoid poor outcomes later.

Another point is on gender equality. The noble and learned Baroness, Lady Scotland, and I visited the first mother and baby unit to be opened in a secure training centre. A significant number of young girls, if they are included in this college, may be pregnant or may already be mothers, so we need to think about how to manage that particular issue. There is one more point on the question of cost. It may be cheaper to employ more qualified staff. Research on the continent shows that one can have lower ratios of staff if the staff are more qualified. Indeed, this question of cost is very interesting. It should not, perhaps, discourage us hiring very well qualified people to work with these young people if the ratio can be less because of their higher qualification.

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

My Lords, this has been a very useful and well informed debate. It continues the debates we had on Monday. I respectfully ask those in the Chamber at the moment to read the debate on Monday in which I gave a reply—I think for more than 20 minutes—in which I dealt with a considerable number of the points raised, although I did not purport to deal with all points. Indeed, I said on that occasion that I was proposing to write to sweep up any points that on examination of Hansard I had not dealt with adequately. I adhere to what I said then and will include any further points that have arisen out of the debate today.

What has emerged—as my noble friend Lord Cormack quite rightly said—is that we all have the same concern about providing the most helpful outcomes for troubled young people. It was also common ground that the focus on education is most welcome. What there is a lack of confidence in at the moment is whether the secure colleges can provide precisely what all of us in this House would wish to achieve for young offenders. The noble Earl, Lord Listowel, is quite right, of course, that many of those who find themselves in this situation come from troubled backgrounds. Many have been in care and present particular challenges for whatever establishment is going to have them when they are serving the sentence passed by the court.

The clause which is the subject of this stand part debate is the statutory framework for the creation of secure colleges so that the Government can trial a new approach to youth custody. Clause 29 provides the Secretary of State with the power to provide secure colleges, which is a new form of youth detention accommodation in England, and replaces the current Section 43 of the Prison Act 1952 with the new section. The current section gives the Secretary of State a power to provide young offender institutions, remand centres and secure training centres. As your Lordships will know, there are no remand centres in operation. The new Section 43 will additionally give the Secretary of State the power to provide secure colleges in England and Wales. Clause 29 introduces Schedule 5, which makes a number of amendments to other legislation to reflect the fact that secure colleges are being introduced.

I remind the Committee of the context for our proposed reform of the youth custodial estate. At present, we pay around £100,000 a year for a place in youth custody, and yet almost 70% of young people go on to reoffend within 12 months of release. In the case of secure children’s homes—the advantages of which were very much emphasised by those in debate on Monday—the cost rises beyond £200,000 a place, and yet the reoffending outcomes are no different.

[Lord Marks of Henley-on-Thames]

Does my noble friend accept that the comparison of costs for secure children’s homes with other institutions is perhaps a little unfair? It is the nature of secure children’s homes that they take the most difficult and troubled children, so the costs per year of a place in such institutions is necessarily considerably higher.

[Lord Faulks]

It is true, and I am going to come on to deal with that. The different establishments are there, in the view of the Youth Justice Board, to deal with the different challenges that the individuals present. My point is that secure children’s homes are no panacea. The starting point is that the overall rate of reoffending is simply not acceptable. That is why we are introducing secure colleges.

I entirely accept the point made by the noble Earl, Lord Listowel, that the Government should be aware of the long-term cost as well as the short-term cost. Indeed, the whole purpose of secure colleges is that, with the benefit of proper education, the Government consider that there should be a cost-saving in the long term because of the accrued benefit for young people who go to secure colleges.

[Lord Beecham]

I am sorry to intervene at this point, but it is sensible to do it now rather than later. Are we to infer from that that the Government’s ultimate intention is to dispense with the 138 places in secure children’s homes or is it their view that there will still be some place for secure children’s homes? If so, how will they approach determining how many?

[Lord Faulks]

I respectfully ask the noble Lord to be a little patient; I am going to deal with that point in the course of my remarks. I have not been speaking for long. I have been much criticised for not giving the House information. I should perhaps remind the Committee that there were meetings offered first to the party opposite, then to this side and to Cross-Bench Peers. There has been written information and there was a further meeting at which the details of secure colleges, including demonstrations on visual display units, were supplied. That, together with the answers I have given and the answers I propose to give further, should give the Committee at least as much information as it can reasonably expect.

I have heard in the course of the debate arguments that there are better ways to improve the youth custodial estate and particular emphasis was placed on the secure children’s homes. The noble Lord, Lord Ramsbotham, for whose expertise the Committee is indebted, mentioned a number, in particular Diagrama, a Spanish not-for-profit organisation that runs custodial facilities. The Ministry of Justice is aware of the work of Diagrama, and it is an example, as I understand it, of the type of innovation that we want to introduce and attract into secure colleges. We have, as I said previously, an open mind, and we are anxious to encourage innovation. However, as the noble Lord quite rightly said, he would not expect me to comment from the Dispatch Box on the advantages or disadvantages of the specific matters that he raised in his speech, valuable though his contribution is to the general approach to trying to find the right answer to these difficult problems.

16:44

The truth is that no current model of youth custody is delivering the outcome that we all want to see, nor is it providing sufficient value for the taxpayer. It is for that reason that we are introducing secure colleges, which we think will foster a culture of educational development and provide enhanced rehabilitative services, while also achieving savings. All young people deserve access to high-quality education, which will allow them to fulfil their potential. Secure colleges will have education at their heart, with all other services designed in support of raising educational attainment. That is all the more important for young people who set off on the wrong path, as many of those young people will have done.

In the government response to the Transforming Youth Custody consultation, we set out our plans to develop a pathfinder secure college in the east Midlands. It is proposed that the purpose-built establishment will accommodate up to 320 young people and will open in 2017. The proposed size of the pathfinder reflects both the regional demand for custody in the Midlands and the east of England and the Youth Justice Board’s considerable experience of commissioning youth custodial services. With careful and detailed planning we are confident that we can deliver a secure college that will not only provide a broad curriculum and a range of services to young people but ensure their welfare and safety.

At the meeting on 8 July, I was pleased to share with a number of noble Lords, many of whom are present in the Chamber, the design plans for the secure college. I have listened to the concerns expressed about the ability of a single establishment to meet the needs of a broad cohort of young people. These matters are at the forefront of our minds as we work with Wates to design the pathfinder secure college. I want to reassure noble Lords that the opening of the pathfinder secure college will be extremely carefully managed. As I said previously, we recognise that there can be many challenges in establishing the culture and regime in a new facility, and we expect the introduction of young people to the pathfinder to be carefully phased over a period of time.

Clause 30 introduces Schedule 6 to the Bill, which,

“makes provision about contracting out the provision and running of secure colleges”.

Under this framework the Secretary of State will be able either to contract out the operation of a secure college or directly manage it. These provisions are similar to the contracting out provisions for young offender institutions and secure training centres. They also set out the duties which will apply to secure college custody officers.

There was considerable debate in the other place and, indeed, when the Bill was debated here on Monday about the relationship between the Bill and the use of force to ensure good order and discipline in secure colleges. The Bill provides for the use of force by a custody officer in discharging his duties, but only in the circumstances authorised by secure college rules. Secure college rules were also the subject of debate, and I gave a fairly full answer about how those secure college rules should be arrived at.

The noble Lord, Lord Ramsbotham, asked a specific question about who was to be responsible for the draft. It will be for the Ministry of Justice to draft the secure college rules, drawing on the expertise of the Youth Justice Board, and taking into account the outcome of the consultation to which I referred on Monday. That will influence and decide our approach to the appropriate rules. Our position on force is that it may be used only as part of ensuring good order and discipline when there are clear risks to maintaining a safe and stable environment for young people. The use of force is a necessary and proportionate response to protect the safety and welfare of the individual or of others. The rules are the correct place to set out the boundaries on the use of force, and our proposed approach, as I said on Monday, will be the subject of public consultation.

The Youth Justice Board is responsible for commissioning the provision of secure accommodation for young people who are either on remand or have received a custodial sentence. It was established to provide leadership to the new youth justice system, the principal aim of which is to prevent offending by children and young persons. One of its functions is to commission places for children and young people who are remanded or sentenced in custody.

The Youth Justice Board currently has the power to secure accommodation for young people who are in custody for various reasons, as set out in Section 41(5)(i) of the Crime and Disorder Act 1998. Clause 31 provides additional powers to the Youth Justice Board to enable it to commission secure accommodation for young people who have received certain sentences under the Criminal Justice Act which are not currently referred to in Section 41(5)(i). These are a sentence of detention for serious offences, an extended determinate sentence of detention and an extended sentence of detention for public protection. In addition, Clause 31 omits two provisions which have become unnecessary as no young person is serving these sentences.

I understand that the noble Lord, Lord Ponsonby, is concerned about cost. The average cost of a place in youth custody is about £100,000 per annum. We are confident that the operating cost of the pathfinder secure college will be substantially lower, but I hope the Committee will understand that the exact price will be determined through competition, and there is a degree of commercial sensitivity about that. Providing detailed cost estimates at this stage would risk prejudicing the outcome of the competition which will follow.

We believe that this proposal is one which, as a pathfinder, and gently introduced in the way that I described on Monday in terms of younger people and women, will provide an answer and will help the very real problem that has been identified by the Government and acknowledged by all noble Lords who participated in this debate. Of course I remain open to meetings with the noble Lord, Lord Ponsonby, or any other noble Lords who wish to draw my attention to particular features of the inadequacy, or indeed the adequacy, of the plans. These colleges, with their emphasis on education, are a genuine answer to what has been an intractable problem of reoffending.

I say once again what I said about the block of education. These are not supposed to mimic precisely school terms. Very many of these young people have simply had no continuity of education at all, and a sufficient block with an individual learning plan, which I described at some length on Monday, will, we say, provide real benefits to these young people.

While respecting the profound reservations that have been expressed by the noble Lords, I ask that relevant clause stand part of the Bill.

[Baroness Butler-Sloss]

My Lords, I have a question. I apologise if the Minister dealt with it on Monday, when I was unable to stay for that part of the discussions. I referred, in my brief speech, to the family provisions for putting children into secure accommodation under, I think, Section 25 of the Children Act. Will any of those children go into secure colleges? If they will not, there is a real danger that there will not be any places for them if small secure units do not have both the children who offend under the criminal law together with the children who are beyond control under the Children Act.

[Lord Faulks]

I dealt with these points on Monday. We are proposing to keep these secure children’s homes open for the appropriate offender. The involvement of the Youth Justice Board will, we suggest, ensure that the right offenders find their way into secure colleges.

[Lord Ramsbotham]

My Lords, I must admit that I am disappointed by the line that the Minister has taken, particularly in view of the very helpful contributions made by the noble Lords, Lord Cormack and Lord Marks, and the right reverend Prelate. I had hoped that, by outlining all these suggestions, we would not have merely one solution put forward to us—pathfinder or not, staged or not—but there appears to be no give on the general intent. Yes, the Youth Justice Board is responsible for commissioning, but what the Youth Justice Board has always been responsible for commissioning is a situation that it inherited. So far, I am not aware that there has been any attempt to look right across the whole system and perhaps design something using the existing situation to make better use of it to provide the aims that we all want. The Government have come up with the solution of the secure training centre, which has attracted opposition from all those who have had anything to do with young offenders. I hope they will be given more attention.

I am grateful for the contributions that have been made across the Committee. As I said at the start, I do not intend to seek the opinion of the Committee with a vote at this stage, because we all have to go away and read not only what happened on Monday, to which the Minister referred—indeed, some of it has come up again—but what has been raised here. I hope that the Government will have considered this, on calm reflection, when we come back to it on Report. The Government will know that many people long to take part in the deliberations and contribute what they have because they feel excluded from this. They feel that this is a solution that has been put to them without any explanation. Yes, there have been meetings and they have had the site explained, but we have not had all the details of the regime and answers to all the other questions that have come up, because the Government have admitted that they simply will not know the answers to those until they have opened the envelopes from the competitive bidders.

Personally, I would have been much happier if any development of a site by a contractor was in conjunction with the provider of the education to make certain the contractor is doing what the education provider needs. However, as we do not know who the education person is, what is the point of a designer going ahead with something that the person who is going to use it has not had any say in?

I very much hope there will be a great deal of consideration. As I say, I hope the Government will engage those who want to get involved to make sure the solution for our young children is the best possible, based on all the experience there is and all the good practice that is known.

Clause 29 agreed.

Schedule 5: Secure colleges etc: further amendments

Amendments 42M to 43 not moved.

Schedule 5 agreed.

Clause 30 agreed.

Amendments 43A to 43D not moved.

Schedule 6: Contracting out secure colleges

Amendment 44

Moved by

[Lord Beecham]

44: Schedule 6, page 92, line 28, at end insert—
“(4) Where the Secretary of State enters into a contract with another person under paragraph 1(1), and that person is not a public authority for the purposes of section 3 of the Freedom of Information Act 2000 (public authorities), that person shall be designated by the Secretary of State as a public authority for the purposes of that section in relation to that contract.”

[Lord Beecham]

My Lords, the Committee will be pleased to hear I will not detain it long on this amendment, which follows similar amendments moved during earlier parts of the Bill. The amendment seeks to ensure that the Freedom of Information Act procedures will be available in respect of the operation of the secure colleges, if they are built, by designating them as a public authority. The amendment would require the Secretary of State, when entering into a contract to provide or run a secure college with another person that is not a public authority, to designate that person as a public authority for the purposes of that section of the Act.

The Minister just referred to two possibilities: one is that the Secretary of State enters into a contract with such an outside body to provide the facility; the other is that the Secretary of State, the department or some other public body—perhaps the Youth Justice Board, which is a recognised public body—would carry out that function. The intention, clearly, is that it should be a contracted-out service. I understand that four bidders to provide the service have been selected, and I believe them to be—I may be wrong and, if so, no doubt the Minister will correct me—effectively private sector bodies.

17:00

Schedule 6 states:

“The Secretary of State may enter into a contract with another person … to … provide a secure college or part of such a college”,

which in effect the Secretary of State has done, and to,

“run a secure college or part of such a college”.

Interestingly, paragraph 1(2) of Schedule 6 also provides that:

“The contract may provide for the running of the secure college, or the part of the college, to be sub-contracted”.

So you could have more than one layer of contactor engaged in the provision of this service.

Similarly, Part 3 of Schedule 6 goes on to empower the Secretary of State to,

“enter into a contract with another person for functions to be carried out at a directly managed secure college”—

which is not currently envisaged—

“by secure college custody officers provided by that person”.

In that case—as I say, this is not envisaged for the initial college—the Secretary of State or a public body could effectively sub-contract the position of custody officers to an outside organisation.

Two aspects of this are of some concern. First, by definition, we are dealing with a troubled and potentially troublesome group of young people. We have debated discipline but other problems, not necessarily of that kind, could also arise. It is therefore important that there should be access to freedom of information where issues arise that need to be explored. As it stands, the Bill would not allow that in a contracted-out institution, whereas it would if the service was provided by a public authority. I cannot understand why a distinction should be made between the two.

The second point that I wish to raise relates to the monitoring of a contracted-out secure college. That is dealt with in paragraph 5 of Schedule 6, which provides that:

“Every contracted-out secure college must have a monitor. … The monitor must be a Crown servant appointed by the Secretary of State. … The monitor must … keep the running of the secure college by or on behalf of the principal under review, … investigate any allegations made against secure college custody officers … and … report to the Secretary of State on the matters described”,

in that part of the schedule. That is precisely the kind of area in which freedom of information requests might be thought relevant. That is one point.

My second point is a question to the Minister, and again I do not ask for an immediate reply. Given that a report is to be made to the Secretary of State, is it envisaged that such a report and the Secretary of State’s response to it will at some point be placed in the public domain, either by a report to Parliament or in some other way? It seems to me that that would be a necessary condition. I invite the Minister to give an indication of the Government’s thinking on these matters. I beg to move.

[Lord Faulks]

My Lords, Amendment 44 seeks directly to extend the Freedom of Information Act to providers of secure colleges who have entered into a contract with the Secretary of State under Schedule 6 to the Bill. The amendment, as the noble Lord, Lord Beecham, said, is similar to Amendment 11, which we debated in Committee on day one. It would provide for private providers not currently subject to the Freedom of Information Act to make information available both in response to FoI requests and proactively through publication schemes.

As the noble Lord said, the amendment differs in one respect from Amendment 11 in that it would lead to the formal extension of the FoI Act to providers of secure colleges, whereas the amendment debated previously sought to achieve the same ends in relation to providers of outsourced electronic monitoring services through the code of practice that the Secretary of State would issue under new Section 62B of the Criminal Justice and Court Services Act, which is being introduced through Clause 6 of the Bill.

As we set out in the debate on Amendment 11, the Government recognise that there are concerns about the position of private providers of public services, under the Freedom of Information Act. The issue of outsourced public services was considered in some detail during the post-legislative scrutiny of the Freedom of Information Act carried out by the Justice Select Committee in 2012. The committee recommended the use of contractual provisions, rather than the formal extension of the Freedom of Information Act, to ensure that transparency and accountability are maintained. In particular, the committee said that it believed that,

“contracts provide a more practical basis for applying FOI to outsourced services than partial designation of commercial companies under section 5 of the Act”.

The committee also felt that,

“the use of contractual terms to protect the right to access information is currently working relatively well”.

The Government recognise not only that concerns exist in this area but the potential challenge that the increased delivery of public services by non-public sector providers poses to transparency. It is for that reason that the Government accepted the committee’s recommendation. Later this year, the Government will issue a revised code of practice under Section 45 of the Freedom of Information Act to promote transparency about outsourced public services in response to FoI requests. As we explained in the debate on Amendment 11, the guidance to be provided in the code will promote and encourage the use and enforcement of contractual or sub-contractual obligations to ensure that contractors provide information held on behalf of public authorities. It will go further than the current obligations under the Act. It will encourage contractors voluntarily to provide additional information beyond that held on behalf of the contracting public authority where, for example, doing so would help the contracting public authority to provide a more meaningful response to requests.

The Government and the Information Commissioner will monitor the effectiveness of the code. If it does not prove successful, the Government have said that they will consider what other steps may be necessary to ensure accountability, including the possible formal extension of the Freedom of Information Act to contractors. As I have indicated previously, we believe that our approach represents an appropriate balance between transparency and minimising burdens on business. As a result of the steps that we are taking, I suggest to the House that the measures proposed through these amendments are, with respect, unnecessary. I invite the noble Lord to withdraw his amendment.

[Lord Beecham]

My Lords, I will withdraw the amendment and I am grateful to the noble Lord for reaffirming the Government’s general position. He did not—I do not criticise him for this—quite deal with the further point I made about having a monitor, particularly the issue of the Secretary of State reporting on the outcome of such issues. He may wish to consider that. I hope we can clear up that point because, if the Secretary of State is issuing or preparing a report, it should be in the public domain. That may very well be intended but perhaps we can deal with that matter before Report. I beg leave to withdraw the amendment.

Amendment 44 withdrawn.

Amendments 44A to 48 not moved.

Schedule 6 agreed.

Clauses 31 and 32 agreed.

Amendment 48A

Moved by

[Lord Ponsonby of Shulbrede]

48A: After Clause 32, insert the following new Clause—
“Application of reporting restrictions to social media
Sections 39 and 49 of the Children and Young Persons Act 1933 shall apply in relation to public electronic communications networks as they apply in relation to newspapers, and sound and television broadcasts.”

[Lord Ponsonby of Shulbrede]

My Lords, I shall speak to Amendment 48A and others in this group. Amendment 48A is largely self-explanatory. The Children and Young Persons Act was enacted in 1933, well before the advent of the internet or any sort of social media. The purpose of this amendment is simple: to make it beyond any doubt that any repeating of things that are sub judice to do with a child’s identity would be prohibited and that orders under Sections 39 and 49 apply to social media just as they do to print and broadcast media. That is the effect of Amendment 48A.

Amendment 48B, which is in my name and the names of other noble Lords, seeks to close a legal loophole whereby children can be named before they are charged and appear in court. This is an anomalous situation that makes a mockery of the anonymity protection. In the recent tragic case of the murdered Leeds schoolteacher Ann Maguire, the Sun newspaper printed the name of the boy accused of her murder before he was charged. Now that the matter is before the court, it is illegal to name him. This is an illustration of the loophole that this amendment seeks to close. Pre-charge naming undermines any anonymity later afforded by the court. I am pleased to see that noble Lords from other sides of the House have added their names to this amendment.

The purpose of Amendments 48C and 48D is that anonymity provided by Sections 39 and 49 of the Children and Young Persons Act 1933 should last for a lifetime. Lord Justice Leveson has ruled that Section 39 orders expire when the child reaches the age of 18. This judgment is being appealed and the appeal is due to be heard in autumn this year. Lord Justice Leveson has said:

“It is for Parliament to fashion a solution: the problem requires to be addressed as a matter of real urgency”.

He is referring to precisely this question of whether anonymity should continue beyond the age of 18. The purpose of Amendments 48C and 48D is that the default situation should be that anonymity should be granted for life unless a court orders that it be lifted.

Why is this a good principle? The principal aim of all youth justice is to prevent reoffending. I would argue that naming a child as an offender, particularly in this day and age, would work against that child’s interests. Their name is likely to get on to the internet and to stay on the internet. It will make it more difficult, once the child is identified and named as an offender, for that child to change their ways. More than that, it will punish innocent families. We know that children identify very strongly with their siblings, more strongly than adults do. I have been made aware of a number of cases where the names of children who have been charged with an offence have come to light and the families, particularly the siblings, of the children have suffered as a result. This only serves to worsen the situation and to set back the prospect for rehabilitation. That is the purpose of Amendments 48C and 48D. I beg to move.

17:15

[Lord Marks of Henley-on-Thames]

My Lords, I have added my name to Amendment 48B, as have my noble friends Lady Linklater and Lord Carlile of Berriew. We have also tabled Amendment 48F. However, the purposes of our amendment are identical to those of the noble Lord, Lord Ponsonby, so I will be brief.

There are three purposes to this group of amendments. The first is to ensure the extension to electronic media of those provisions dealing with restrictions on reporting of offending by children—restrictions that in a previous era applied to newspapers and standard television broadcasts. The public electronic media should all be treated in the same way. The second purpose, as the noble Lord, Lord Ponsonby, said, is to deal with pre-charge naming of children, which undermines the anonymity granted to them only later. Section 44 of the Youth Justice and Criminal Evidence Act 1999 would deal with that but has not yet come into force. The purpose of the final subsection of the proposed new clause in Amendment 48B is to deal with that. The third point, as the noble Lord explained, is to amend Sections 39 and 49 of the Children and Young Persons Act 1933 to establish that anonymity given to children should last beyond their 18th birthday unless there is a substantial reason why the position should be changed. That would be subject to an order of the court. In those circumstances, I invite the Minister to accept these amendments and ask the Committee to do so, too.

[Lord Beecham]

My Lords, it would appear that in this area, as in others, we are short of information about the number of cases in which young offenders are named. There does not appear to be a dataset indicating how many of these young people are being named and, apparently, has there been no research of any great depth on the impact of being named on such young offenders or their families—as my noble friend pointed out, particularly in relation to their siblings.

The UN Convention on the Rights of the Child, as long ago as 1989, stated that as well as the right to privacy, “best interests” of the child should always,

“be the primary concern in making decisions that may affect them”.

It is striking that, although it is a matter for the courts whether the child should be identified, the applications tend to be made by the media on the grounds of public interest. The capacity of the media to identify their interests with the public interest is of course unlimited, but in this rather sensitive area it might be thought that the principles of the convention should be taken a great deal more seriously. Some of the ways in which the media have portrayed young offenders, complete with photographs—my noble friend mentioned a case where a child’s photograph was prominently displayed—and emotive language such as how “young thugs” should be dealt with, are not conducive to meeting the requirements of the convention, which we should all respect.

I understand that the Government are looking at the existing law on reporting restrictions and had indicated that they would be coming to a conclusion some time this year. They may not have done so, but I do not know whether the Minister is in a position to indicate when that review might be completed. It would be helpful to the House to know when that might occur. In fact, the Government—I should, in fairness, say successive Governments—have not responded to the UN committee’s report, which is dated as long ago as 2008. In addition to the general principle to which I referred, that report made the strong point that respecting privacy should extend especially to avoiding messages that expose the child to shame and are against their best interests.

This is potentially quite a serious issue. From my experience as a councillor and, indeed, as chairman of the social services committee in Newcastle in the 1970s, I recall very well the famous case of Mary Bell, who was a young child when she committed offences that became notorious. Rather like the subsequent Bulger case—or rather, those who were guilty of killing Jamie Bulger—she became exposed to a great deal of publicity. That made assimilation into adult life extremely difficult for her, as it has for other defendants, it would appear, including those in the Bulger case. This is a very sensitive area in which we need a clear position from the Government in terms of a response not only to the amendment but perhaps more importantly to the UN convention requirements of as long ago as 2008.

Of course, there may be public interest in knowing what is happening, but a public interest in knowing does not necessarily amount to a matter of public interest. The two terms become confused. I hope that that is not the position that the Government ultimately end up with. There are clearly issues here that can have a long-term impact on young offenders. I entirely take the Minister’s point: the whole point of dealing with these young offenders is to ensure they do not offend again and can assume their place in society. We should not facilitate making that any more difficult by permitting disclosure when it is not necessary. I hope that the Government will look sympathetically at the amendment moved by my noble friend and respond to the long outstanding report and recommendations of the UN convention.

None of us would say that people—even young people—who commit serious crimes should not be punished or go through the processes that the law prescribes. They should not, however, be subjected to public obloquy in addition to that. It is rather disconcerting that, at the time of the riots in London a few years ago, the Home Secretary seemed keen to publicise the identity of some of those, particularly young people, who were involved in criminal and quite disgraceful behaviour. I think that many of us would feel that, in that sort of case and for that sort of young offender, publicity might be regarded as almost a badge of honour and is therefore not to be encouraged from any perspective. I hope that that situation will not recur. In the mean time, we have a number of offenders, some of whom are involved in very serious offences, whose anonymity has been done away with in a way that cannot be conducive to helping them to reform and to assume a normal place in society.

[Lord Faulks]

My Lords, I am grateful for the amendments tabled by the noble Lord, Lord Ponsonby, and those tabled by the noble Lord, Lord Marks, the noble Baroness, Lady Linklater, and the noble Lords, Lord Carlile and Lord Dholakia. All have shown considerable commitment to the subject of how we respond to children and young people in the youth justice system. Some have direct experience of how children and young people are dealt with in court, as magistrates, lawyers or counsellors, in one or more of those capacities or in some other capacity. I welcome the opportunity to debate the issue of youth reporting restrictions. Noble Lords’ amendments bring into focus a range of issues, each of which I will deal with in turn.

First, as to online content, noble Lords are seeking to address a potential lacuna in the existing reporting restrictions framework which was remarked upon by the High Court in the case of MXB v East Sussex Hospitals NHS Trust. The court commented that information that would normally be prohibited from publication in a newspaper could be published and made available to the public via Facebook or Twitter. The present position therefore appears to be not entirely clear, although it may conceivably become clearer in the light of further developments in case law. However, we know that the publication of information through online content is in many ways quite different from the more traditional forms of communication that Sections 39 and 49 of the Children and Young Persons Act 1933 were intended to cover. For example, information can now be published, updated, viewed and replicated almost instantaneously in a way that could not have been envisaged by Parliament many decades ago.

However, the ability to view such information may be restricted by the author of the online content to a very limited set of individuals indeed. We must be mindful of the boundary between private correspondence via e-mail, which the current youth reporting restrictions framework, rightly, in no way seeks to curtail, and publication to the world at large. It is worth noting that, in its recent reports on the law of contempt, the Law Commission considered what statutory definition might capture online content and identified a drafting solution very different from that put forward by the noble Lord. I wish to reassure noble Lords that the Government are aware of the concern that has been raised and are giving further thought to this very technical and complex issue. In light of that assurance, I hope that, in due course, the noble Lord will withdraw his amendment.

As to criminal investigations, Amendment 48B, also in the name of the noble Lord, Lord Ponsonby, seeks to commence Section 44 of the Youth Justice and Criminal Evidence Act 1999, which has been on the statute book for some time. Section 44 applies whenever a criminal investigation begins into an alleged offence and means that no information enabling the identification of a young person under 18 suspected of committing the offence may be reported by the media. Section 44 also gives the Secretary of State the power to extend the protection to children and young people who are alleged to have been the victims of, or witnesses to, a criminal offence but only by means of an affirmative order. Hansard indicates that on 29 June 1999, during Committee stage in the other place, the affirmative procedure in respect of victims and witnesses was introduced by the Opposition when in government. A number of objections were raised in respect of Section 44 and were considered in a process in which parliamentary scrutiny went hand in hand with discussions with the print and broadcast media. I have recently received letters from the Newspaper Society and the BBC outlining similar misgivings.

During what I referred to as hand-in-hand discussions, it was suggested that it may be time to look at whether the media’s own regulatory arrangements to protect vulnerable young people could be strengthened in a way that is specific to young people who might be harmed by publicity about crime. Given the significant restriction that Section 44 potentially imposes on the freedom of the press and the possibility that its aims might be achievable through other means, it was determined that Section 44 should be extended to victims and witnesses only after both Houses had been given the opportunity to debate the issue again. Since then, the section has never been commenced and guidance and regulations have been pursued instead.

17:30

The noble Lord’s amendment seeks to nullify the affirmative resolution procedure and, instead, commence the whole of Section 44 on Royal Assent of the Bill. No case has been made that a previous decision by Parliament, to ensure that an extension of Section 44 is debated fully by both Houses before it can be implemented, should now be reversed, nor that this is the appropriate mechanism for commencing provisions in legislation. A decision will have to be taken by the Executive to commence this amendment should it become part of the Bill.

Of course, the noble Lord’s purpose in tabling this amendment may be to prompt a debate on the merits of Section 44—whether now is the time to commence the section and whether all alternatives have been exhausted. This is not the right time to consider commencing Section 44, in the light of the significant changes to press self-regulation recently introduced by the Government. As is well known, the royal charter was granted by the Privy Council on 30 October and has been sealed. Both the industry and the Government agree that independent self-regulation is the way forward. The Government believe that a royal charter is the best way to ensure that independent self-regulation operates successfully. We should therefore give this new approach a chance to succeed. I would, therefore, ask noble Lords to pause to consider whether Section 44, as enacted, might pose at least as many problems as it is designed to solve.

It appears that Section 44 would impose restrictions on the press that are so broad as to be potentially impractical. For example, in the case of the tragic murder of Ann Maguire in a Leeds school, to which the noble Lord, Lord Ponsonby, referred, Section 44 would have stopped the identity of the alleged offender being released into the public domain. However, it could also have meant that little could have been reported about the crime other than that a teacher had been killed in a school somewhere in England and Wales. Therefore, in the light of the recent developments in press self-regulation and the breadth of the restrictions that Section 44 appears to impose, I ask the noble Lord not to press his amendment.

I am grateful to noble Lords for raising the issue of extending youth reporting restrictions beyond the age of majority. They have, no doubt, done so in response to a recent High Court judgment that considered the existing law in this area. In the case of JC and RT v the Central Criminal Court and Others, the President of the Queen’s Bench Division, Sir Brian Leveson, stated that a reporting restriction under Section 39 of the Children and Young Persons Act 1933 expires automatically once the child or young person reaches the age of 18. Noble Lords have carefully made sure that this amendment also applies to Section 49 of the Children and Young Persons Act 1933, thereby capturing proceedings in the youth court, where the majority of criminal cases involving children and young people are heard.

While there are some technical flaws with the amendment as tabled, the Government intend to address the lacuna in the current reporting restrictions framework. Further to the quotation referred to by the noble Lord, Lord Ponsonby, the President of the Queen’s Bench Division remarked:

“It is truly remarkable that Parliament was prepared to make provision for lifetime protection available to adult witnesses in appropriate circumstances … but not to extend the protection to those under 18 once they reached the age of majority”.

He went on to identify victims and witnesses as requiring protection within the criminal justice system as a matter of urgency.

I would like to revisit this matter on Report. In the light of that request, which I hope noble Lords will accept is entirely sincere and an appropriate response to this debate, I hope that they will, in the mean time, not press their amendments.

[Lord Ponsonby of Shulbrede]

My Lords, I thank the noble Lord for that response, which I found constructive in a number of respects. On Amendment 48A, the noble Lord said that he would give further thought to this matter and pointed out the issue of the amendment being so broadly worded that it might include private correspondence by e-mail. I acknowledge the point: the matter needs to be looked at more carefully.

On Amendments 48B and 48C, the noble Lord referred to the previous Government introducing the affirmative procedure and the adoption of new self-regulation procedures within the media. These are probing amendments and we on these Benches will consider whether to bring them back on Report. I acknowledge the points that the noble Lord made in addressing them and I was pleased with his response to Amendment 48D, when he said clearly that he wants to revisit the issue on Report. Therefore, I beg leave to withdraw Amendment 48A.

Amendment 48A withdrawn.

Amendments 48B to 48D not moved.

Clauses 33 to 35 agreed.

Amendment 48E

Moved by

[The Earl of Listowel]

48E: After Clause 35, insert the following new Clause—
“Duties of custody officer before charge
In section 37(15) of the Police and Criminal Evidence Act 1984 (duties of custody officer before charge), for “17” substitute “18”.”

[The Earl of Listowel]

My amendment would give 17 year-olds detained by the police the right to be held in local authority accommodation rather than a police station. I draw the Committee’s attention to the “Newsnight” programme broadcast on Monday 14 July, in which parents whose children had been affected by the current arrangements spoke very movingly about their experiences. I would be glad to furnish your Lordships with a link to that. Certainly, I will make it my job to ensure that those taking part in the debate have that link.

Children under the age of 17 already have the right to be placed in local authority accommodation, and for good reason. Police custody is an unsuitable environment for children. It is a highly intimidating environment and staff are not trained to support vulnerable children, unlike in local authority accommodation. Recent cases have demonstrated the terrible consequences that can result from detaining children in such an unsuitable environment at what is a deeply frightening time for them.

Kesia Leatherbarrow was a vulnerable 17 year-old. Her inquest has not yet taken place but we know that she was discovered dead in a garden in December 2013, after being arrested and held in a police cell for three days. Kesia was arrested for possession of cannabis and criminal damage. She was kept in custody at Ashton police station over the weekend before being sent to Tameside magistrates’ court on the Monday morning. She was bailed to return the following day, when the youth court would be sitting, but died shortly afterwards. Being held in the more supportive environment of local authority accommodation might have made all the difference. She could still be with us today.

Seventeen year-olds can appear very adult, but they are not: they are children. The UN Convention on the Rights of the Child is clear on this point—children are those below the age of 18, and all are entitled to the same protections. A 17 year-old should not be treated differently from any other child. However, the Police and Criminal Evidence Act is inconsistent on this point. The police station is the only remaining part of the criminal justice system where 17 year-olds are not uniformly recognised as children. The one other part where an anomaly exists—the Criminal Justice Act 1991 in relation to cautioning—will be amended by this Bill.

In police stations, 17 year-olds have some of the protections afforded to children but not all. This is an ongoing issue and one which the Home Secretary has said she will resolve. However, I am disappointed that she has not yet done so, despite a clear ruling from the High Court. In 2013, in the case of HC v Home Secretary, Lord Justice Moses ruled that it is unlawful for 17 year-olds in the police station to be treated as adults and denied the protection of having a parent or other adult with them, which is given to younger children. The court ruled that they must not be treated as if they were adults. In particular, they must be allowed to have a parent or appropriate adult with them. After the case, the Home Office accepted the court’s ruling and gave assurances that it would conduct a full review of all laws that treated arrested 17 year-olds as adults, not just the provision of an appropriate adult. For example, in a letter to Nick Lawton, whose son Joe killed himself after being treated as an adult in police custody, the Home Secretary wrote:

“We will ensure that in future that 17 year olds will receive the appropriate assistance and support while they are in police custody”.

Then in response to a Parliamentary Question in October 2013 the Minister for policing said:

“We will consider all legislation which appears to treat 17-year-olds as adults in the criminal justice system and bring forward legislative proposals as necessary”.—[Official Report, Commons, 21/10/13; col. 65W.]

Despite these assurances, the Home Secretary has so far made only limited changes that were specified by the High Court, which means that 17 year-olds now have the right to have a parent with them, as I have mentioned.

The point of most concern is the fact that young people have no right to be transferred to local authority accommodation even if the police are concerned about them and can see that they are very vulnerable. The police still do not have the right to make such a transfer. This is the matter that my amendment addresses. The parents of Kesia Leatherbarrow, along with the parents of Joe Lawton and Eddie Thornber, two other children who died after being treated as adults in police custody, are campaigning to get the Home Secretary to make the changes necessary to ensure that 17 year-olds are always treated as children in law. A recent letter to the Home Secretary said:

“I personally am very upset and feel wronged by both your letters because you have only changed one part of the code and failed to take the steps to get Parliament to amend any other relevant legislation. Had you looked into and changed all the legislation, as you intimated in your letter to me, there was a good chance that Kesia would be with us today. You could include in the current Bill before Parliament changes to Section 38(6) of PACE about the transfer to local authority care as opposed to being kept in a police cell overnight … We are distraught that another 17 year old has died unnecessarily when you as Home Secretary were fully aware of your duty to 17 year olds. While we cannot bring back our own children, we will not stop campaigning on this issue until every piece of legislation that treats 17 year olds as adults in the criminal justice system is amended to give the most vulnerable among us the help we are entitled to under the UN Convention on the Rights of the Child and other laws”.

We owe it to these families and to 17 year-olds throughout the country to ensure that they have the protection to which they are entitled. The right to local authority accommodation is a fundamental protection that is available to all other children, and I hope that the Government will make good on their promises and accept my amendment. I recognise that they have been looking at this issue, I beg the Minister to bring something into this legislation, perhaps by the time we reach Report. We can then be confident that no more young lives will be lost in these circumstances. I beg to move.

[Baroness Kennedy of The Shaws (Lab)]

My Lords, I support this amendment. I urge the Minister, before we reach Report, to take the opportunity to contact a really wonderful NGO, Just for Kids Law, which is run by a remarkable set of lawyers led by Shauneen Lambe. The lawyers have been supporting and sometimes acting as intervenors in cases involving young people of 17 who are being kept in custody or interrogated without an accompanying adult. Anyone who is the parent of a teenager or whose children were recently teenagers knows that at that age a person is on the cusp of adulthood. They are moving out of childhood and into adulthood. It is often a very difficult stage where young people appear to be very mature and yet at the same time they are childlike and vulnerable, as the noble Earl said. I know that the Home Secretary and the Home Office have been looking at this issue—I see that the Minister is nodding his head in confirmation. For some time there has been a problem around the ages defined in different pieces of legislation. I would urge the Government to look at this amendment closely. Even if a categorical answer cannot be given to us today, I hope that the opportunity is taken to speak to the people at Just for Kids Law because they really know their stuff in this area. They have all the details about the families who suffer so terribly at the loss of their children.

17:44

[Baroness Howe of Idlicote]

My Lords, I support the amendment in the name of my noble friend Lord Listowel. Article 1, as he said, of the United Nations Convention on the Rights of the Child defines a child as a person under the age of 18. In 2010 the Government made a commitment to have regard to children’s rights when developing law and policy affecting children. In the majority of the youth justice system, 17 year-olds are rightly treated as children and so are entitled to the same protection as all other children. The police station is the only part of the criminal justice system where 17 year-olds are not—uniformly, at any rate—recognised as children.

At present, one other anomaly remains: 17 year-olds are still not entitled to the protection afforded to other children when they are cautioned. However, I think we all welcome the fact that Clause 32 rectifies that. Of particular concern is the fact that if they are detained by the police, 17 year-olds are not entitled to a local authority bed—my noble friend made the point firmly that they must still be detained in police custody.

Police custody is an intimidating and frightening environment that is unsuitable for children, particularly the sort of children who are as damaged as those who are likely to be in that situation. We have heard about the tragic consequences that can result, and I offer my condolences to the family of Kesia Leatherbarrow, the 17 year-old who was found dead following detention in police custody. By contrast, local authority accommodation has trained staff. As my noble friend Lord Listowel has mentioned on many occasions, trained staff are important in such situations. They are more supportive and far more appropriate.

I cannot see the rationale for denying 17 year-olds access to local authority beds. It is clearly desirable and is in keeping with the UNCRC. The Government are still making progress in other areas to ensure that 17 year-olds are treated as children in the youth justice system—for instance, under Clause 32. I urge them to do the same with regard to the provision of local authority beds, and to accept the amendment.

[Lord Beecham]

My Lords, the Committee is indebted to the noble Earl, Lord Listowel, and to other noble Lords who have spoken in the debate, for raising a matter of concern and for pointing out the inconsistency that now applies, particularly in regard to the welcome change that the Bill incorporates, and to which other noble Lords have referred, about having an appropriate adult present when a 17 year-old is being charged or interviewed.

Noble Lords have spoken in moving terms about the problems faced by vulnerable young people in the circumstances that the amendment addresses. Clearly, from their point of view, it would be highly desirable for a different sort of accommodation to be made available. Perhaps the noble Lord, Lord Paddick, who has not participated in the debate, might agree that it is better from the police’s point of view if they do not have responsibility in an area where, as the noble Baroness has just pointed out, they do not have the expertise to look after vulnerable young people who might be capable of inflicting harm upon themselves in a difficult and unusual situation.

Both sides of the equation, as it were, argue for a change and a degree of consistency across the legislative framework. It would, however, be desirable, if it has not yet been undertaken, to consult with the Local Government Association representing local authorities in England and Wales to ensure that the local authorities have an awareness that this will, necessarily, impinge to some degree upon their responsibilities, and for an adjustment to be made in the financing that would no doubt be required to provide a safe, temporary haven for these young people before they make their court appearance. If the Minister is unable to give an unequivocal response today, I join others in hoping that, between now and Report, matters might be progressed.

This may be seen primarily as a matter for the Home Office but it is clearly of interest for the Ministry of Justice and I hope that the two departments between them—possibly with, as I said, the involvement of the Department for Communities and Local Government and maybe even the Department for Education, which has a potential interest in respect of children’s services—might come to a fairly rapid conclusion about what is not an inherently complex matter in a way that would satisfy the noble Earl, Lord Listowel, and, more particularly, those who have undergone a traumatic experience with their own children and do not wish to see that repeated in respect of other 17 year-olds and their families.

[Lord Faulks]

My Lords, I begin by acknowledging the contribution that the noble Earl, Lord Listowel, has made to our debates generally on the plight of young people, particularly those who are or have been in care, who, sadly, often find themselves in the position that this amendment particularly focuses on. I join others in expressing the Government’s deepest sympathy with the family of Kesia Leatherbarrow. It was, as all noble Lords have pointed out, a tragic case.

The main purpose of the amendment is to include, within the definition of “arrested juvenile” in Part 4 of the Police and Criminal Evidence Act 1984, 17 year-olds in the context of police detention following charge. I acknowledge that although 17 year-olds may often appear confident and adult, that can conceal vulnerability, as the noble Baroness, Lady Kennedy, pointed out. In line with the current treatment of 10 to 16 year-olds the amendment would have the effect of requiring a 17 year-old who has been charged and denied bail to be transferred to local authority accommodation when it is both appropriate and practicable for the police to do so.

I understand that this proposed amendment, which has at its heart a laudable intention, is related to the Hughes Cousins-Chang High Court ruling of April last year. The Government did not appeal that ruling and accepted the findings of the court, which related solely to the Police and Criminal Evidence Act codes of practice C and H. Specifically, the ruling required that 17 year-olds, when arrested on suspicion of committing an offence, must be provided with an appropriate adult and have a parent or guardian informed of their detention. The Government made these changes in full as soon as possible, allowing for the statutory obligation to consult on all changes to the PACE codes, and these provisions were made mandatory in October.

Since the implementation of the High Court ruling, the Government made clear their commitment to review the primary legislation relating to the treatment of 17 year- olds as adults in the criminal justice system. This was to consider whether changes should be made for similar reasons. I can confirm, as noble Lords have already indicated, that an internal review has already been launched and that the work is continuing. Whereas this amendment concerns specifically the case of detention following charge, the review covers all the legislation where 17 year-olds are treated as adults in the criminal justice system. It includes, for example, Section 65 of PACE, which relates to the age at which a person can give their independent consent to the taking of fingerprints, impressions of footwear, and intimate and non-intimate samples at the police station.

The Home Office review also covers the consequential changes that would need to be made to other legislation should 17 year-olds be regarded as juveniles. For example, an amendment to Section 37(15) of PACE, which is the proposition here, would also require amendments to the Children (Secure Accommodation) Regulations 1991, the Bail Act 1976, the regulations of 1991, the Children and Young Persons Act 1933, and so on. These are just some examples, for which other departments have responsibility. Those examples demonstrate the breadth and complexity of the legislation, which needs to be properly thought through before change is made.

It is of the utmost importance that any change in the law is workable in practice and not merely symbolic. We need to be sure, for example, that local authority accommodation will be available to 17 year-olds were the law to be changed, that adequate transportation exists and that police officers are trained properly to understand the requirements of this change. The appropriate adult change, which has been referred to, is considerably less complicated operationally than that which is the subject of this amendment. Any amendment to primary legislation needs to be subject to proper consultation, appropriate consideration and full scrutiny by Parliament. This amendment, though laudable in its aims, represents, we respectfully say, a somewhat hurried approach to the issue of how we treat people at the age of 17 at the front end of the criminal justice system.

The noble Baroness, Lady Howe, referred to the police’s knowledge of young people in dealing with 17 year-olds. The noble Lord, Lord Beecham, tried to elicit a contribution from my noble friend Lord Paddick as to the unsuitability of the police to deal with 17 year-olds.

[Lord Beecham]

In fairness, I was not saying that the police were not suitable but that it is placing an undue burden upon them. That is a rather different point.

[Lord Faulks]

I stand corrected by the noble Lord. I would remind the House nevertheless that the police are under a duty, under Section 11 of the Children Act 2004, to make arrangements to safeguard and promote the welfare of children. The statutory guidance accompanying Section 11 makes clear that these arrangements include adequate training and dealing with children aged under 18.

While this is clearly an important issue and one that the Government take extremely seriously, for the reasons that I have given I am unable to commit myself to having an answer by Report. I hope that we will have, but I am afraid that I am unable to give that commitment. I can say that the review is a matter of importance and will be thoroughly undertaken. I hope that, with that reassurance, the noble Lord will withdraw his amendment.

[The Earl of Listowel]

I am grateful to the Minister for his careful and considered reply and his kind words to me. Perhaps he could write to me on whether or not he has a final date for the internal review. I am grateful to the Minister for his considered and sympathetic response to the amendment. I will take away what he says and consider it over the Recess. I thank all the noble Lords who spoke in the debate for their contribution and for their support for the amendment. I beg leave to withdraw the amendment.

Amendment 48E withdrawn.

Amendment 48F not moved.

17:59

Clause 36: Instituting proceedings by written charge

Amendment 49

Moved by

[Lord Faulks]

49: Clause 36, page 35, line 5, leave out “court” and insert “designated officer specified in the notice”

[Lord Faulks]

My Lords, the Government have tabled a total of 14 minor and technical amendments to this clause, Clauses 38 and 39 and Schedule 7. As noble Lords will be aware, the intention is to introduce a new single justice procedure alongside the current written charge and requisition procedure. These changes are necessary in order to ensure that our new procedure fits together with some older provisions on the summary justice procedure in the Magistrates’ Courts Act 1980.

Amendment 49 is essentially a drafting amendment, clarifying that the single justice procedure notice must be served on a designated court officer, rather than a court building.

Amendment 50 relates to an issue raised during the House of Commons Committee about the information sent with the notice about the defendant’s DVLA record in cases involving driving offences. We undertook to consider this further and ensure that the provisions allow a single justice to view a defendant’s driving record before sentencing, as is currently the case under the written charge and requisition procedure. We believe the current drafting is too restrictive, so this amendment introduces a new provision that will enable a single justice to try cases using documents that have been described to the defendant, as well as those served on the defendant. It makes clear that in order to rely on any previous convictions, the prosecution must give the accused notice of their intention to do so at the time of serving the single justice procedure notice.

The noble Lord, Lord Ponsonby, has tabled an amendment to Amendment 50. As I have said, Amendment 50 allows the prosecution to give notice to the defendant of their intention to rely on certain information. The noble Lord’s amendment would limit that information to information that is specified as relevant to the charge.

With great respect to him, I do not think that amendment is necessary. The existing and cardinal rule of evidence will of course apply: all evidence which is irrelevant or insufficiently relevant to the facts in issue should be excluded. It has never been our intention, in tabling Amendment 50, to depart from these rules. Prosecutors can be trusted, as they currently are under the written charge and requisition procedure, to abide by these rules and put before the court only information relevant to the case.

The weight attached to the evidence will remain a matter for the single justice, on the advice of his or her legal adviser. We have introduced further safeguards, which I will come to in a moment, to make clear that a single justice can, of course, consider the nature of the evidence when deciding whether to refer a case to a traditionally constituted magistrates’ court. Therefore, if the single justice has doubts or concerns about the evidence before him or her, he or she can refer the case to a Bench of two or even three magistrates. I therefore respectfully ask the noble Lord, Lord Ponsonby, not to move his amendment.

Amendment 53 relates to Amendment 50 and provides further clarification on admissibility. The principle behind Amendment 53 is that evidence is admissible as long as it has been served on the accused at the same time as the single justice procedure notice. This provision also introduces additional safeguards in Section 16F(2), which points a single justice to consider whether he or she should proceed with a case under the new procedure where the nature of the evidence suggests that it would be not be appropriate to do so.

Amendment 51 introduces a provision that makes explicit that, where the accused has indicated that he or she wishes to plead guilty in their response to the single justice procedure notice, the court can try the case as though the accused has indeed pleaded guilty.

Amendment 52 provides some clarification to new Sections 16B(1) and 16C(1), which are to be inserted in the Magistrates’ Court Act 1980 by Clause 38. It makes clear that there are two distinct occasions when a single justice will consider the appropriateness of using the single justice procedure: prior to conviction and post conviction. This amendment aims to avoid the situation where a single justice may decide to refer a case to a traditional magistrates’ court simply because it would be inappropriate to sentence without first having convicted and issued a summons in the proper way.

Amendment 54 adds to the range of sentencing powers available to a single justice in respect of driving offences resulting in penalty points on an offender’s licence.

The next set of amendments modifies current legislative provisions to ensure that they operate effectively in cases heard under the single justice procedure. Amendment 57 makes changes to Section 11 of the Magistrates’ Courts Act 1980, which provides that a court cannot impose a disqualification from driving in the absence of the defendant unless a hearing has resumed after an adjournment. Where a single justice is considering imposing a driving disqualification, and the defendant has indicated they wish to make representations on that, the single justice will already have adjourned the case and summonsed the defendant to a traditional magistrates’ court. This amendment ensures that the traditional magistrates’ court can decide the case without having to go through the process of adjourning it again.

Amendment 58 provides that in any case where the single justice considers that the accused is “likely” to have been misled by a variance between the written charge and the evidence presented by the prosecutor, the matter is no longer appropriate for consideration under the single justice procedure and should be referred to a traditional magistrates’ court. This will ensure that a less stringent test applies for cases dealt with under the new procedure.

Amendments 59 and 60 apply to cases involving prosecutions for traffic offences which may result in disqualification from driving. They concern the requirements in such cases for the defendant to present his or her driving licence to the court on the day of the trial. These arrangements are set out in Section 7 of the Road Traffic Offenders Act 1988. Amendment 59 modifies these arrangements for cases heard under the single justice procedure. Instead of having to present their driving licence on the date of the trial, defendants will be required to present their licence post conviction once they have been notified by the court of the intention to disqualify. Amendment 60 is a consequential amendment resulting from these modified arrangements. It provides that in cases where the defendant has been issued with a receipt after having surrendered their driving licence in relation to another offence, it would be appropriate for them to produce this receipt instead of their driving licence.

The final set of amendments is purely consequential amendments to other legislation. Amendment 56 enables a summons to be served in Scotland and Northern Ireland following a decision by a single justice that it is no longer appropriate to continue trying a case under the single justice procedure. Amendments 61 to 63 ensure that the single justice procedure applies to Section 68 of the Pension Schemes Act 1993, Section 55 of the Vehicle Excise and Registration Act 1994 and Section 164 of the Criminal Justice Act 2003.

As I have indicated, all these amendments are necessary to ensure that the single justice procedure works effectively, that it works well alongside other relevant provisions within our legislative framework and that it works in a way which continues to protect the rights of defendants. I beg to move.

[Lord Ponsonby of Shulbrede]

My Lords, I welcome the Government’s move to single justice procedures. I have sat on many hundreds of these types of cases and it is absolutely not necessary for three justices to sit to make such determinations.

I have three amendments—the noble Lord referred to them in his comments—which the Magistrates’ Association has asked me to put forward to clarify particular issues. As the noble Lord said, Amendment 50A is an amendment to the Government’s amendment which seeks to add that specified and relevant information should be made available to the court. The concern raised by the Magistrates’ Association is that magistrates should have access to the right information, such as DVLA records, as appropriate. The amendment was worded in a wider sense because if one was dealing with television licences one would need information on non-payment. The amendment is to ensure that magistrates, when sentencing, have specific and relevant information in front of them.

Amendments 50B and 51A would require the court to give public notice of trials under the single justice procedure and to publish the outcomes of these trials. I know the Magistrates’ Association has been consulted fully on these changes and everyone is aware that we are dealing with high volume, low level regulatory cases more than anything else. Nevertheless, it is important that these cases are dealt with properly and that the public should have confidence in our legal system. Therefore they need to know when the trials are happening and the results of those trials. The purpose of the amendments is to provide some clarity on what the Government intend to do in making sure that the trials and their results are well published.

As the Minister pointed out in his comments, if anyone turns up for a trial, the matter would be put off to be dealt with by a Bench of three. That is, of course, right and proper.

[Lord Beecham]

It is some 23 years since I last appeared before Newcastle magistrates. I should make it clear that I was in a professional capacity, although I had the pleasure recently of seeing them in a political capacity. As I think I mentioned at Second Reading, I attended a meeting of what is now the Northumbria Bench—in the current state of play, of course, there is no longer just a local Newcastle Bench. Unlike my noble friend Lord Ponsonby, who of course has long experience as a sitting magistrate, I was initially attracted to the notion that some have suggested; namely, that, although the procedure is generally to be welcomed, it should be not one magistrate but two who sit on these matters. However, I am persuaded not only by the eloquence and logic of my noble friend but, perhaps more relevantly, by the almost unanimous opinion of the local Bench in Newcastle and Northumbria that such a precaution is unnecessary.

There are, however, a number of issues, which are the subject of amendments to which I shall now refer. The first of those is Amendment 49A, which would ensure that there is a proper procedure for determining which offences can be tried under the new system. It is obviously sensible for many of the offences which have been canvassed in discussion—television licences and matters of that sort—to be dealt with in this way, but the amendment would require that the issues be determined by regulations and approved by Parliament. We do not want added to the list for disposal in this way matters which are not necessarily the first that come to mind as more or less formalities. It would not be asking too much of the Government for them to indicate what they intend and how many offences and for them to proceed by way of regulation. In this case, the negative procedure would be quite acceptable.

Amendment 49B would remove the automatic paper trial if the defendant did not respond to the notice that would have been given. There is a potential for difficulty to be encountered here if, for example, the defendant does not understand English or the purport of the document. What is sought in the amendment is that failure to respond would not itself trigger the automatic transfer to dealing with the case on the papers.

Amendment 49C, on the provision of evidence in respect of vehicle licensing cases, would require the court to be satisfied with the position as recorded by the DVLA, so that the defendant would have an opportunity to say that matters had been dealt with on the basis of the DVLA providing information. It is a relatively modest requirement.

18:14

Amendment 50C would, contrary to the provision of the Bill as we understand it, remove the provision that would require the court to proceed as if a party were absent, even if he or she appeared after the beginning of proceedings. So if someone is late in coming to court but turns up, the procedures should not take place without a hearing.

Amendment 50AA is important and would remove the provision that permits the court to proceed in chambers. It is envisaged that the court would simply operate behind closed doors, as it were, with no possibility of the public being present. Many of us feel that that would be unsatisfactory. Justice needs to be seen to be done. I suspect that it is unlikely that there would be a queue of people to sit enthralled while decisions are made and handed down, but it is nevertheless better for justice to be administered openly so that, if there is an interest, members of the public and, for that matter, the press could attend.

Publicising the results of the hearing is the subject of Amendment 51B. Again that is a question of justice being seen to be done and information being available. The Magistrates’ Association, if I recall correctly, is sympathetic to those suggestions. I hope that the Minister will recognise that the Opposition certainly support the principle of the Government’s proposal, which we welcome. It may well speed up matters. Nevertheless, there need to be safeguards, particularly in relation to the public aspect of the administration of justice, which is not normally conducted behind closed doors in this country, even in routine matters. I hope that the noble Lord will give consideration to these amendments.

[Lord Faulks]

I thank noble Lords who have taken part in this useful debate. In addition to my response and the moving of government amendments, the debate has enabled the Government to place on record the rationale behind these provisions, which are broadly welcomed. I am reassured to hear, as I knew was the case, that the Magistrates’ Association is very much in sympathy with this, as are magistrates such as the noble Lord, Lord Ponsonby, and Newcastle magistrates’ court, which, sadly, misses the noble Lord, Lord Beecham. There is general consensus that this is a move in the right direction. Nevertheless, I also understand that there is the feeling that there should be safeguards to ensure that there is no sense that these hearings take place behind closed doors unless it is entirely appropriate that that should be the case.

I shall deal first with Amendment 49A, which seeks to require that the list of offences to which the new single justice procedure should apply is set out in secondary legislation. Our intention is that all summary, only non-imprisonable, offences should be in scope of the procedure. However, we anticipate this procedure being used only in the more straightforward cases, such as where the particular circumstances of the case mean there is no direct victim or specific threat to public safety involved, or cases that involve offences designed to regulate the conduct of some particular activity in the public interest where there is a minimal or no mental requirement needed to prosecute. In legal terms, this would mean cases where there is no mens rea or it is easy to prove mens rea.

We expect offences that are technically in scope of the legislation but which might not be suitable for the new procedure to be initially filtered out by prosecutors who make decisions on the handling of these types of cases on a daily basis. It will, of course, be for a single justice to decide whether a case is appropriate for this procedure, and he or she can refer it to the ordinary court at any time. I fully understand the temptation to try to limit or specify a list of offences to which the single justice procedure might apply. However, we have high-quality magistracy in this country who are well used to exercising their powers to determine the right forum within which cases should be heard.

Amendment 49B relates to the rights of the defendant under the single justice procedure. Our provisions allow the court to use the single justice procedure unless the defendant explicitly states that he or she does not want that to happen or intends to plead not guilty, in which case it will automatically be referred to a traditional magistrates’ court. The objective of the single justice procedure is to address the current situation, whereby a significant number of defendants fail to engage with the process at all. Although the effect of the amendment would be to allow a single justice to consider any case, regardless of the defendant’s response, I understand that the intention is to remove the ability of the single justice to hear cases where the defendant has not responded. I recognise that this may be in response to concerns about the assumption that, where a defendant does not engage, the case should nevertheless still be heard by a single justice. However, it should be remembered that the defendant will have the right to request a traditional hearing in open court at any point before his or her case is considered by the single justice. If a defendant does not know about the case until after it is finished, they can make a statutory declaration to that effect, which will start the proceedings again from the beginning.

Amendment 49C would introduce a new requirement that the documents sent to the defendant with the single justice procedure notice should include a copy of the submission from the DVLA informing the court of any penalty points on the defendant’s driver record. It is the explicit responsibility of the holder of a driving licence to ensure that it is kept up to date by surrendering it as and when required for details to be changed or endorsements added. If there are endorsements on a driving record that do not appear on the counterpart of the corresponding driving licence, the licence holder might well be committing a further separate offence. I assure noble Lords that courts will have direct access to DVLA records. The days that the noble Lord, Lord Beecham, remembers of a moth-eaten driving licence being handed up to the justices have departed. A single justice will have information about an offender’s previous offences before them when trying a motoring offence.

[Lord Ponsonby of Shulbrede]

My Lords, I am sorry to disabuse the noble Lord, but those days are not departed. In fact, it is far more common for the defendant not to be able to produce a driving licence at all.

[Lord Faulks]

I defer to the noble Lord’s experience in that regard, although the new format of the driving licence makes it slightly less destructible than its predecessor. I maintain nevertheless that the courts do have access to the DVLA records, so, when trying a motoring offence, a single justice will have the information even if the defendant does not produce a driving licence at all. I am therefore confident that the safeguards we have built into this procedure make the amendment unnecessary.

Amendment 50AA would remove the provision that a court can decide a case under the single justice procedure other than in open court. That would undermine one of the main drivers behind this policy. We consider the time wasted and costs incurred in requiring magistrates to sit in open court and decide cases disproportionate in the type of straightforward, low-level cases that this procedure will apply to. Safeguards are in place to enable a prosecutor to ensure a case is heard in open court by issuing a requisition and a defendant to ensure the same by indicating his or her wishes in response to the single justice procedure notice. I reassure the noble Lord that the fact that a case is heard under the single justice procedure will not impact on the court’s duty to ensure that proceedings are open and transparent. The press and public will continue to have access to information about these cases, as they do now.

Amendment 50C would allow a single justice to hear and consider evidence from a party to the case if they turn up when the single justice is considering the case. In practice, parties will not know when a case will be considered by a single justice under this new procedure, so it is extremely unlikely that this situation would occur. However, there is a risk that it could be seen as encouraging prosecutors to turn up and assist the court. That could be perceived as unfair and unequal, particularly if the case was being heard other than in open court. We could not allow evidence to be heard by a magistrate when a single justice was making a decision, as that would lead to unfairness if the other party had not been given the opportunity to consider that evidence. In any case, there is clear provision in the Bill stating that when a person wants to be heard by a magistrates’ court, they are perfectly able to request a hearing.

Amendment 51B would introduce a legislative requirement to publish in advance details of cases to be heard under the single justice procedure and to publish the outcome of these cases. It is, of course, vital that the media and the public continue to have access to information on these cases under the new single justice procedure. However, the appropriate place for such provisions is within the Criminal Procedure Rules. Those make it clear that certain specified information must be made available to journalists and other members of the public on request. The rules also allow the court to make certain additional case information available to third parties on request. The Criminal Procedure Rule Committee will be invited to review the Criminal Procedure Rules to make sure that they are fit for purpose for the single justice procedure.

I can reassure the noble Lord that the fact that a case is heard under the single justice procedure will not impact on the court’s duty to ensure the proceedings are open and transparent. The press and public will continue to have access to information about cases, as they do now. There is a protocol in place between Her Majesty’s Courts and Tribunals Service, the Newspaper Society and the Society of Editors whereby magistrates’ courts routinely make written lists of cases and results available to local media, most often by e-mail. This arrangement will continue.

Amendment 52A introduces another condition on which a defendant can make a statutory declaration so that, in addition to being unaware of the proceedings, the defendant can state that they did not understand the information contained in the single justice procedure notice and the accompanying documents. This deals with the point made by the noble Lord, Lord Beecham, about things such as language difficulties. The associated documentation sent to defendants under the single justice procedure will be no more complex that the documentation which is currently sent in this type of case; indeed, we are confident that the flexibility afforded by this new procedure will enable us to make the whole system for these cases more easily understood by defendants. As with the existing process, prosecutors have developed strategies to identify those who may require further assistance and Her Majesty’s Courts and Tribunals Service is also considering, as part of implementation planning, how it will continue to discharge its duty to provide assistance to unrepresented defendants. The provisions, as set out, provide magistrates’ courts with the flexibility they need to operate the single magistrate procedure effectively while ensuring that the rights of defendants are protected.

I will say a little more about the suggestion put forward by the noble Lord about the availability of information on case outcomes. I agree that the information should be available as soon as possible after the trial has concluded. In both cases, the noble Lord suggests that this should be within 21 days. However, such detailed procedure should not be contained within the legislation itself. As I said earlier, the appropriate place for such detail is within the Criminal Procedure Rules.

We know that journalists and the general public seldom attend to watch this type of hearing and this is the reason behind the protocol to which I referred. As to the listing, we accept that it is vital for there to be access to information and we anticipate that cases will initially be listed in the same court buildings as they are at the moment. This arrangement with local media will replicate exactly what currently happens in practice. In future, we will want to take advantage of the fact that consideration of cases in writing can happen anywhere, and maximise the efficiency that can be derived from this greater flexibility. In doing so, we will want to maintain flexibility and transparency.

There are opportunities, as part of the criminal justice system digitisation agenda, to look more radically at how we can use the opportunities of digital to preserve and perhaps enhance open justice. It is our intention to make case information available on a self-service basis and enable the press and public to access cases in real time and follow the progress of the digital process online in a more meaningful way than they can at present. The rule committee will be invited to review the rules to ensure they are fit for purpose for the single justice procedure. I am sure that such a review will want to take into account the proposals made by the noble Lord, Lord Ponsonby. Any necessary amendments can be made, subject to annulment by either House of Parliament in the usual way.

I hope that, in the course of rather too long a response to those amendments, I have been able to allay any concerns and explain the thinking behind the single justice procedure. With that reassurance, I hope noble Lords will not press the amendment.

[Lord Beecham]

That was a very thorough response for which I am extremely grateful, but one thought has just occurred to me in relation to some of the noble Lord’s later remarks. I may be wrong, but I understand that it is possible that some of these cases will be taken, as it were, to some other court and thus will not necessarily be heard in the place where the offence was committed. Perhaps I have misunderstood the noble Lord, but if that is right, does that not make the question of the openness of the process in terms of recording the outcome more difficult? There will not be a local reporter in, say, Newcastle for a case that has been transferred from there to Middlesbrough. Perhaps the noble Lord could look into this because I would be interested to hear his views on it. I think that it would be regrettable. If we are to have this process, it should be based in the local court where the offence occurred and where it would normally be dealt with.

18:30

[Lord Faulks]

Perhaps I may look into that and confirm the position in writing to all those who have taken part in this debate.

Amendment 49 agreed.

Amendment 49A not moved.

Clause 36, as amended, agreed.

Clause 37 agreed.

Clause 38: Trial by single justice on the papers

Amendments 49B and 49C not moved.

Amendment 50

Moved by

[Lord Faulks]

50: Clause 38, page 37, leave out lines 9 to 12 and insert—
“(3) The court may not hear any oral evidence and may consider only the contents of the following—
(a) the documents specified in subsection (2),(b) any document containing information to which subsection (3A) applies, and(c) any written submission that the accused makes with a view to mitigation of sentence.(3A) This subsection applies to information if—
(a) a notice describing the information was served on the accused at the same time as the documents specified in subsection (2), and(b) a copy of the notice has been served on the designated officer specified in the single justice procedure notice.”

Amendment 50 agreed.

Amendment 50A, as an amendment to Amendment 50, not moved.

Amendments 50AA to 50C not moved.

Amendment 51

Moved by

[Lord Faulks]

51: Clause 38, page 37, line 19, at end insert—
“( ) If the accused served on the designated officer specified in the notice a written notification stating a desire to plead guilty and to be tried in accordance with this section, the court may try the charge as if the accused had pleaded guilty.”

Amendment 51 agreed.

Amendments 51A and 51B not moved.

Amendment 52

Moved by

[Lord Faulks]

52: Clause 38, page 37, line 32, leave out “try the written charge” and insert “convict the accused in proceedings conducted”

Amendment 52 agreed.

Amendment 52A not moved.

Amendment 53

Moved by

[Lord Faulks]

53: Clause 38, page 40, line 7, at end insert—
“16F Admissibility of statements
(1) A statement contained in a document is admissible in proceedings conducted in accordance with section 16A as evidence of a matter stated if, in the particular case—
(a) the document is one in relation to which section 16A(1)(c) is satisfied, or(b) section 16A(3A) applies to the information in that document (as the case may be).(2) Subsection (1) does not prevent a court taking into consideration the nature of the evidence placed before it when deciding whether it is appropriate to try the written charge in accordance with section 16A.
(3) In this section “statement” means any representation of fact or opinion.”

Amendment 53 agreed.

Clause 38, as amended, agreed.

Clause 39: Trial by single justice on the papers: sentencing etc

Amendment 54

Moved by

[Lord Faulks]

54: Clause 39, page 40, line 32, at end insert—
“( ) making an order under section 30A of the Road Traffic Offenders Act 1988 (order to disregard penalty points if approved course attended);”

Amendment 54 agreed.

Clause 39, as amended, agreed.

Clause 40 agreed.

Amendment 55 had been withdrawn from the Marshalled List.

Amendment 55A

Moved by

[Lord Low of Dalston]

55A: After Clause 40, insert the following new Clause—
“Protection arrangements for children and dependants
(1) The Criminal Justice Act 2003 is amended as follows.
(2) After section 174 (duty to give reasons for, and explain effect of, sentence) insert—
“174A  Duty to ask about children etc left behind
(1) Directions must be made in accordance with Part 1 of Schedule 2 to the Constitutional Reform Act 2005 to secure the results referred to in this section.
(2) Immediately after a court has given its decision to pass an immediate custodial sentence on a defendant who was on bail when awaiting sentence, the court must ask whether the defendant has children or elderly, disabled or otherwise vulnerable adults dependent on them for their care (“dependants”), and, if the defendant or any other person in court states that the defendant does have such responsibility, the court must ask what arrangements there are for their care.
(3) If it appears that there are no arrangements in place for any such dependants, the court must either —
(a) allow the defendant to make a telephone call to secure such arrangements, or(b) direct any appropriately skilled person present in the court to make enquiries with the aim of ensuring that such dependants are provided with suitable short-term care to meet their needs;where necessary, this may require contacting the appropriate local authority children’s or adult social care team.”(3) The Bail Act 1976 is amended as follows.
(4) In section 5 (supplementary provisions about decisions on bail), after subsection (5) insert—
“(5A) Directions must be made in accordance with Part 1 of Schedule 2 to the Constitutional Reform Act 2005 to secure the results referred to in subsections (5B) and (5C).
(5B) Immediately after a court gives its decision to withhold bail in criminal proceedings from a person to whom section 4 of this Act applies, the court must ask whether the defendant has children or elderly, disabled or otherwise vulnerable adults dependent on them for their care (“dependants”), and, if the defendant or any other person in court states that the defendant does have such responsibility, the court must ask what arrangements there are for their care while the defendant is on remand in custody.
(5C) If it appears that there are no arrangements in place for any such dependants, the court must either—
(a) allow the defendant to make a telephone call to secure such arrangements, or(b) direct any appropriately skilled person present in the court to make enquiries with the aim of ensuring that such dependants are provided with suitable short-term care to meet their needs;where necessary, this may require contacting the appropriate local authority children’s or adult social care team.”(5) The provisions inserted by this section shall come into force two months after the day on which this Act is passed.”

[Lord Low of Dalston]

My Lords, I can be quite brief. This amendment arises from a conversation which began at Second Reading when the noble Lord, Lord Blair, and I identified the problem of children and vulnerable adults who are dependent on an adult who is sentenced to a prison sentence being left without support when the offender is sent to prison. It is estimated that some 200,000 children have a parent in prison at any one time, which is nearly three times the number of children in the care system. They are twice as likely as other children to experience behaviour and mental health problems, and three times as likely to go on to commit an offence themselves. Sixty-five per cent of boys with a convicted father will themselves go on to offend. Therefore, there is an obvious need for these people to be picked up and supported, yet there is no official way of identifying them or ensuring that their need for support is taken care of.

Organisations such as Barnardo’s and other members of the Families Left Behind campaign report from their work in prisons that a lack of identification of the children or vulnerable adults dependent on a parent or carer remanded in custody or sentenced to imprisonment often puts the child or vulnerable adult at risk. They have records of cases where children have been left with friends or neighbours as a temporary measure and are then passed on to other friends or associates; cases where children have been left with individuals who misuse drugs and alcohol; cases of children left at school with no one to collect them and with no one contacting the school; and cases of children left with elderly relatives, relatives with disabilities, relatives in distress or relatives living in poverty who have offered to step in to provide emergency care but do not really have the resources to do so.

In the past, the probation service would have stepped in to bridge the gap but, with the probation service progressively becoming more of an offender management and less of a social service, a vacuum has opened up. In 2011, with the support of the NSPCC, Action for Prisoners’ Families and HM Courts and Tribunals Service, Pact published a range of resources aimed at promoting good practice in relation to children and dependent adults whose primary carers had been sent to prison, including guidance asking magistrates to check that there were no immediate welfare needs. Three years on, however, it is clear that many courts are not following this guidance, and there continues to be a lack of awareness of the need to make sure that arrangements are in place for the care of children and dependants of people placed in custody. Accordingly, the Families Left Behind campaign is calling for a statutory duty to be placed on courts to ask an individual, when they are sentenced to prison or held on remand, whether they have any dependants. If they do, steps can then be taken to ensure that appropriate care arrangements are in place.

At Second Reading, the Minister acknowledged the problem and undertook to consider it. I am very grateful to him for the constructive discussions he has made possible and to the members of the Bill team for the positive contribution they have made and for all their help in getting the amendment right. As a result, I am hopeful that we now have an amendment that the Government can broadly support. The Minister felt that a statutory duty might be a bit heavy-handed and suggested that the amendment might be better couched in terms of guidance. Accordingly, the amendment now seeks to achieve its effect through directions, although I note that the word “duty” remains in the heading of the proposed new clause. The Minister may have something to say about that.

The amendment would amend the Criminal Justice Act 2003 and the Bail Act 1976 to put in place a system for courts to establish whether an individual sentenced to prison or held on remand has children or vulnerable adults who are dependent on them and who may need immediate welfare support. The proposal is that, immediately following the decision to send someone to prison, the defendant will be asked by the court whether they have children or vulnerable adults dependent on them and, if so, whether care arrangements are in place. If there are no such arrangements, the defendant will be given the opportunity to make a phone call to family members to inform them about the situation and make the necessary short-term arrangements, such as for collecting a child from school or nursery, or ensuring that they are not left at home alone. If this does not achieve a satisfactory result, the court should direct an appropriately qualified person in the court—for example, probation staff, the defendant’s legal representative, court staff, a voluntary sector organisation or a police liaison officer—to take specific action before the defendant leaves court. Where necessary, this may entail contacting the appropriate local authority children’s or adult social care team.

I hope the amendment may give us a basis for moving ahead consensually on a matter which, once pointed out, has prompted concern across the whole House. I beg to move.

[Lord Blair of Boughton (CB)]

My Lords, I support the noble Lord, Lord Low, in this matter and I am grateful to the Minister for the co-operation that he and his office have shown in relation to the amendment.

I declare an interest as the chairman of the Thames Valley Partnership, a criminal justice organisation which, as it says on the tin, is in the Thames Valley. I came across this problem in relation to some of the partnership’s work, as there is at the moment absolutely no statutory requirement for anyone, for instance, to inform a school that a child attending the school has a parent who is now in prison. The failure to do this is also often compounded by the embarrassment of the other parent. She is not going to mention it but the other children in the playground will know who has just had their father sent to prison and the bullying and exclusion start. This relatively short amendment, which imposes the lightest of requirements on the sentencers, fills an obvious lacuna.

I apologise to the House that I was not in attendance for the first 30 seconds of the speech of the noble Lord, Lord Low, so I do not know whether he mentioned the fact that the numbers are vast—200,000 children, which is three times the number in care. Obviously, that is not every year in terms of sentences but there is a long-term impact. Some of the work done by the Thames Valley Partnership shows that children increasingly, as they grow older into their teenage years, lose contact with the parent in long-term custody.

I hope the Government will accept the amendment. I understand there are a number of routes we can take between now and Report. Whether this is done through statute or practice direction, I hope that we can close the gap which leaves children vulnerable when some parts of the agencies of the state know what has happened but are not talking to one another.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, my name is on the amendment. The noble Lord, Lord Low, has made a powerful speech. I do not intend to repeat his arguments and I shall not detain the Committee long.

In this case we must surely be seeking a balance. There is the need to ensure that the position of children or dependents of a person detained in custody is properly protected at a time of considerable trauma and family disturbance. The impact on the children of a parent, particularly a mother, going to jail has been well documented—it has been referred to by the noble Lord, Lord Low, and in briefings that your Lordships will have received from Barnardo’s and other NGOs—and that is one side of the balance. The other side of the balance is that we have to do this without tying up the courts in extensive bureaucratic form filling, much of which is time consuming and may prove ineffective. It is the balance between those two considerations that Amendment 55A seeks to achieve.

All that remains for me to do is to thank the Minister, his officials and, indeed, the Government for the courtesy they have shown in considering this difficult matter. I hope that this redrafted amendment will commend itself to him.

[Lord Touhig (Lab)]

My Lords, I support the noble Lord, Lord Low, and other noble Lords on Amendment 55A. I do so having supported a similar amendment to the Anti-social Behaviour, Crime and Policing Bill in November 2013, to which an amendment was tabled by the noble Lord, Lord Ramsbotham, with my support. This is a straightforward request. It simply requires the courts to inquire whether individuals who are refused bail or are sentenced to prison have caring responsibilities for any children or vulnerable adults; and, if they do, to allow them or another—probably social services—to take the appropriate action to provide care and support. With representatives of the Families Left Behind campaign, the noble Lord, Lord Ramsbotham, and I had a very good meeting with the then Minister, the noble Lord, Lord McNally, who was very helpful and encouraging to us at that time. I was even more encouraged later when I received a reply to a letter I had sent to Lord Justice Gross, the senior presiding judge in England and Wales, who agreed to reissue existing guidelines to the courts on this matter. Although that is certainly most welcome, we need to underpin the whole issue with this amendment.

18:45

Young children and vulnerable adults are being put at risk, and we have a chance to do something about it. The proposed change would not have any bearing on decisions of the courts about length of sentence or whether or not bail should be granted. It would place no burden at all on the courts to make care arrangements. It is simply a safety net and, had it existed before, the cases which were brought to my attention would not have occurred. A seven year-old boy would not have been neglected and left alone when his mother was sentenced. A woman, on being sentenced, was not aware where her daughter had been placed and a social worker had to make calls to four different councils before finding that the child had been hospitalised. There was a case where a 19 year-old was left in charge of five brothers and sisters when his mother was unexpectedly denied bail.

The noble Lord, Lord Low, and others, have already referred to the fact that 200,000 children in England and Wales live with the experience of a parent being in prison. There are no figures available for the number of vulnerable adults who might suddenly be without a carer who is imprisoned. However, that figure, too, is likely to be significant when we consider that the prison population is around 80,000 and one in eight adults in Britain is a carer. This is a big problem, which would become much smaller if this amendment were agreed to. I hope the Minister sees the sense in this.

[Baroness Benjamin (LD)]

My Lords, I also support the noble Lord, Lord Low, and other noble Lords on Amendment 55A, which will help meet the needs of a vulnerable group of people. As we have heard, they are children and adults dependent on someone who is sent to prison. This amendment is supported by the Families Left Behind campaign, which includes a number of organisations that offer support to the children and families of offenders through direct provision of services, advocacy and research. One such organisation is the children’s charity Barnardo’s, and I declare an interest as one of its vice-presidents.

In an Oral Question last year, I asked the Government to give consideration to this issue by putting measures in place to protect vulnerable children. Barnardo’s has found that children of prisoners are a highly vulnerable group who are twice as likely to experience depression and problems with mental health, alcohol and drug abuse. They are more likely to live in poverty and poor accommodation or to be part of the care system. We have recently been hearing about how many children and young people have been abused while in care—something which destroyed their lives for ever and imprisoned them. Sadly, many of these young people go on to offend and are disproportionately represented among young offenders. These children suffer through no fault of their own.

The reasons for parental imprisonment often relate to family problems, including domestic violence or drug and alcohol abuse. This is not a perfect environment for any child to be brought up in. It can seem to them that the whole world is against them. Despite all this, there is currently no requirement to identify any child or dependent adult that an individual remanded or sentenced to prison may be leaving behind. Believe it or not, there is not even the slightest check on arrangements for their safety, care or well-being. Therefore, these children—as we have heard, there are around 200,000 of them—are unlikely to be offered any targeted support because often there is no record of them and no requirement to identify them. Disturbingly, they are not known to children’s services.

This is why Barnardo’s and the Families Left Behind campaign call for the introduction of a statutory duty on courts to ask whether an individual has dependants when they are sentenced or held on remand, in order that it can be confirmed that appropriate care arrangements are in place. This will not impact on courts’ resources or create any additional work. It will just be a case of asking two simple questions. Barnardo’s has found that defendants will not necessarily volunteer this information without being asked.

Therefore, I ask the Minister whether the Government will create a statutory duty on courts to identify defendants who have children dependent on them. By collecting this data, we will be better placed to detect vulnerable children with a parent in prison and ensure that these children get the support they need. Like the Families Left Behind campaign, I believe that Amendment 55A will ensure that children and adults are better protected when their loved ones are in prison.

[Baroness Howe of Idlicote]

My Lords, I, too, have had correspondence from those very concerned about this issue. I do not intend to take up your Lordships’ time by going further into this whole matter, but in as far as this is not already in place it clearly needs to be, and the sooner it is put into effect the better. I am still rather surprised that it does not exist automatically as a natural procedure in court.

[Lord Ponsonby of Shulbrede]

My Lords, first, I apologise to the noble Lord, Lord Low, for not being in the Chamber for the whole of his contribution. I wish to make a couple of points. The first is that this is good practice within magistrates’ courts at the moment. Certainly, every court I have sat in has made these inquiries. Nevertheless, I take the point that it may not be universal practice and it may not be a statutory requirement.

Secondly, I wanted to pick up the point made by the noble Lord, Lord Blair, about informing the schools and so on. It seems to me that this amendment does not go that far; all it does is allow the defendant to make a telephone call. Some of the defendants I see in front of me would make a telephone call, but one might not have confidence in the telephone call that they made. Therefore, I think there needs to be a more active inquiry by, for example, social services or the probation service about the possibility of dependants at home. Nevertheless, I agree with the objectives of the amendment. I look forward to the Minister’s response about the practicalities and also whether the amendment goes far enough.

[Lord Kennedy of Southwark (Lab)]

I am delighted to support the amendment in the name of the noble Lords, Lord Low of Dalston, Lord Blair and Lord Hodgson of Astley Abbotts. With their wide range of experience they have correctly identified that, despite the best of intentions, the support of the Courts Service and of charities, in too many cases courts are not making sufficient checks with regard to the immediate welfare needs of children and dependent adults. The amendment seeks to put in the Bill what should happen at present but has clearly not been delivered in many cases, and that is a matter of much regret. I agree with the noble Lord, Lord Blair, that this is a fairly small measure but it deals with an important issue that needs to be addressed.

My noble friend Lord Touhig told the House of a number of young people and children who were put into difficult situations because simple provisions were not in place. I agree also with many noble Lords when they said that the children of prisoners were a highly vulnerable group of people who need to be looked after.

As the noble Lord, Lord Low of Dalston, explained to the Committee, the amendment will require the courts to inquire of a defendant who has been sentenced or remanded to prison whether they have dependants and whether arrangements have been made for them. If they have not, they would be allowed to make a phone call to make arrangements or, where that is not possible, the court could direct someone to take action before the defendant leaves court.

People sometimes need to be sent to prison. All this amendment does is to seek to ensure that adequate immediate provision is made for dependants. As the noble Baroness, Lady Benjamin, said, all we are requesting is for two simple questions to be asked. I do not think this amendment in any way places a burden on the courts that could not be handled. If the noble Lord, Lord Faulks, is going to say that, I hope he will explain very carefully why he thinks that is the case and answer the point that I and other noble Lords have made in this debate, which is that the voluntary provision has failed and that continued failure is likely to cost far more to dependants and to their welfare.

I see the provision working fairly simply. When I sat in court as a magistrate, although that was some time ago, courts adjourned for all sorts of reasons. It is very easy for questions to be asked and action taken. It is also true that in many cases, especially if the defendant fully expects to receive a custodial sentence, arrangements for dependants will have already been made.

All we are looking for is a clear set of proportionate responses to come into play with the welfare of the dependants of someone who has received a custodial sentence at their heart. I hope that the Government can either accept this amendment or at least look at this issue again and the problems that have been identified before we come back to it on Report.

[Lord Faulks]

My Lords, the amendment from the noble Lords, Lord Low and Lord Blair, and my noble friend Lord Hodgson, seeks to place a statutory duty on a court to inquire into the arrangements for care of dependants of those being sent into custody. I recognise that the proposed new clause is a revised version of one debated by this House during the passage of the Anti-social Behaviour, Crime and Policing Bill 2013. I welcome the contribution of the noble Lord, Lord Touhig, and the interest that he continues to show in this important issue, just as I welcome the contribution of the noble Baroness, Lady Benjamin, with her connections with Barnardo’s. I should also reiterate that I was grateful, too, for the opportunity to discuss some of the details of the previous version of this new clause, not the one that finds its way into the amendment, with the noble Lords whose names appear on the amendment, together with some staff from Barnardo’s.

As my noble friend and predecessor in this position, my noble friend Lord McNally, said last year, the Government completely understand the concern behind this proposed new clause. We should all be concerned with the welfare of children and other dependants of those who are about to be sent into custody. I do not disagree with anything noble Lords have said about the importance of protecting these children and vulnerable adults. We should all recognise that the children of those sent into custody can be subject to immediate risks to their welfare, and there is the risk that they themselves will fall into crime.

The Government support the desire to identify and ensure that children of offenders are cared for. Unfortunately, the Government cannot accept this new clause, even in its revised form, for the reasons that I will explain. The new amendment seeks, via an amendment to the Criminal Justice Act 2003, to require the Lord Chief Justice to issue a practice direction under his powers in the Constitutional Reform Act 2005. In this way, Parliament is being asked to approve a provision which would require the Lord Chief Justice to issue a practice direction and require the Lord Chief Justice to issue a direction with the particular content set out in this proposed new clause. This, noble Lords will appreciate, would amount to an inappropriate restriction on the Lord Chief Justice’s powers and discretion to issue practice directions which the Constitutional Reform Act is designed to protect. However, I understand the thinking behind this amendment and the Government agree that it would be better to approach this problem not by a statutory duty, but by more practical measures. This might include, via the independent bodies that are responsible for these things, guidance, practice directions or procedure rules.

We welcome the changes that noble Lords have made to the clause, which goes some way to addressing the concerns expressed in regard to the earlier version. We remain concerned, however, by the focus on post-sentence or post-remand consideration.

The proposed new clause applies only to the post-sentence process, or the process following the decision to withhold bail, but the existence of dependants is also of vital importance to the decision to remand or sentence to custody—in other words, pre-sentence. As for the Sentencing Council, the current sentencing guidelines already specifically mention care of dependants in relation to the approach to the sentencing decision. There is a clear process for making representations to the court with regard to sentence. Information supplied post-sentence, although it may help with making care arrangements once a person is sent into custody, is simply too late to enable the court to consider the full circumstances of the offender.

19:00

The need to care for children, and the impact of the loss of a parent or carer, is a well established mitigating factor in sentencing. As the noble Lord, Lord Ponsonby, said, it is often at the forefront of inquiries made by the court, and it is likely that anyone represented is bound to explain, through their lawyer, the circumstances that exist in an offender’s home. The weight to be given to the impact of separating a parent and child is set out in case law. The courts can, and in certain circumstances must, consider and inquire into the potential impact of a custodial sentence on dependants. If they do not where it is relevant, that could give rise to an appeal against the sentence. We therefore encourage information about dependants to be placed before the court as soon as possible.

I should make it clear that the Government have never had any concerns about the consideration of dependants before sentence being likely to lead to “soft sentences”. As I have indicated, it is clearly a responsibility of the court to consider these factors in remand and sentencing decisions. This amendment, I suggest to noble Lords, would place a specific requirement on the Lord Chief Justice and is too focused on the post-sentence process.

In view of the importance of this, I will say a little more about specific issues which arise, in particular as regards female offenders. I will mention some practical things that are already happening and how we might develop things further. I start by making the point that offenders who are primary carers are likely to be —although they will not always be—women. The National Offender Management Service already takes steps to ensure that dependants of women sentenced to custody are identified and their needs addressed. Prison Service orders state that, as part of the reception into custody process, female prisoners should be offered at least one free phone call to enable them to resolve urgent family and childcare issues. Women should be allowed more than one call where it is necessary to sort out complicated childcare arrangements.

We are developing the custodial estate so that women who the courts have decided must go into custody can stay closer to home and maintain links with their families. Under our transforming rehabilitation reforms, all women’s prisons are to become resettlement prisons—I am due to visit Holloway this Friday. This will mean that most female prisoners will serve their sentence as close to their home, and importantly their children, as possible, which is vital if we are to help women break the pernicious cycle of reoffending. In addition, as part of the implementation of the estate review, the provision of family days in women’s prisons is being reviewed, with a view to developing and increasing the number of events held across the women’s estate. This work is being taken forward with input from governors, commissioners and members of the advisory board on female offenders.

I have stressed that we consider it is too late if we are identifying dependants after the sentencing decision, but this has to be an issue that we look at in the criminal justice system as a whole. I am sure that the noble Lord, Lord Blair, will agree that the police have an important role here. It is often the police who have the best information on the existence of children and are likely to be the first authority to detain a person, and therefore to have an impact on any dependants. We need to ensure that information on dependants that is gathered at all stages of the criminal process is recorded and shared where appropriate.

[Lord Hodgson of Astley Abbotts]

My noble friend talks about the importance of this information being inquired about before sentencing. But is it not better that it should be inquired about at some point rather than not at all?

[Lord Faulks]

I entirely agree with my noble friend. It is important that it should be acquired before sentence rather than after sentence.

The Children Act 2004 already requires inter-agency co-operation to safeguard and promote the well-being of the child. It is important that probation staff—albeit that in the view of the noble Lord, Lord Low, they have become more concerned with offender management —those working in court or those preparing pre-sentence reports have a responsibility to consider the impact of custody on an offender’s children. All those who have read such reports will realise that that is almost always a central feature of them. If there is a likelihood of custody then children’s services will be alerted by probation to ensure that arrangements are in place to safeguard the well-being of any children. We are working to ensure that this system of assessment and referral is as robust as possible for both pre-sentence report assessment and court practice. This is a very important role for the new National Probation Service.

Much reference was made to the existence of troubled families, and quite rightly so. The Government understand the challenges and poor outcomes faced by children dealing with parental imprisonment, including higher risk of mental illness, poor educational outcomes and offending in later life. I agree it is important that these families receive appropriate support, alongside support for offenders’ rehabilitation and for tackling inter- generational offending. We have already had conversations with organisations such as Barnardo’s to discuss the issues raised by its report On the Outside, published in May this year, and intend to expand our discussions wider to other government colleagues, criminal justice system agencies and practitioners such as legal representatives.

The scope of this approach is potentially very wide—childcare is obviously a pressing concern—but there are also other concerns for families of offenders: financial support, continuing accommodation and so on. This is another reason why it is simply not realistic for the criminal courts to step in and manage an offender’s life after they have been convicted. However, there is a role for government here. That is why we are working across government, and in partnership with local authorities under the troubled families programme, to turn around the lives of 120,000 families suffering from the most complex problems by May 2015. We have already announced an expansion of the programme to an additional 400,000 families from 2015-16. The next phase of the programme will focus on families with a broader range of problems.

I should also mention the important role of the charitable voluntary sector. My noble friend Lord McNally has in the past paid tribute to the work that organisations such as Pact have done and continue to do to support the families of those in custody. I add my own appreciation of that important work and my commitment that the Government will look at how we can both publicise and support the services those organisations provide. I am glad to hear that Lord Justice Gross is concerned that some further guidance should be given in relation to the problem identified by the amendment.

[Lord Touhig]

Perhaps I did not make it clear that, in his reply to me, Lord Justice Gross said he would reissue the existing guidelines, not set out any new ones.

[Lord Faulks]

I am grateful for that clarification. Perhaps reissuing the guidance will bring it home to those who see it. Perhaps for the first time it will remind them of the pre-existing obligation.

I started my response with a list of reasons why the Government could not accept the proposed new clause, but we believe that the issue should be addressed. It is a difficult area but we are now making progress in developing consensus on the best approach. I hope we can continue to work with noble Lords who have consistently shown an interest in this matter, with Barnardo’s, with the judiciary and with the legal profession to develop the best way to tackle this issue. Although I cannot accept the amendment, we are very much concerned to ensure that nobody should slip through the net in the way that the amendment is directed. I hope that, with the reassurance I have given, the noble Lord will feel able to withdraw the amendment.

[Lord Kennedy of Southwark]

The amendment identifies a problem. The Government refer to guidance and advice. The noble Lord, Lord Ponsonby, said that in his court there is not a problem. What worries me is that there will be best practice in lots of courts but there will be one or two cases where that is not the case. That is why we want this duty on the face of the Bill. I am worried that guidance will not be enough. That is my main problem.

[Lord Faulks]

In fact, the amendment places a statutory duty on the Lord Chief Justice. Of course, whatever one does in terms of guidance, not all courts are necessarily going to be as good as each other, but we hope that, by taking various different steps, we can ensure, in so far as it is possible, that the problem that can exist is unlikely to arise in practice.

[Lord Kennedy of Southwark]

Is the noble Lord saying that if the amendment was worded to put a duty on the courts and not on the Lord Chief Justice, the Government would look at that?

[Lord Faulks]

No, I am saying that I do not think that a statutory duty is the answer.

[Lord Low of Dalston]

My Lords, I am grateful to all those who have spoken in this debate. It bears out my contention that there is concern about this issue across the House. Indeed, that concern is shared by the Government. Like the Minister, I would hope that we are not yet at the end of this discussion and that discussions and work can continue with a view to finding a solution around which we can all unite. We have a bit of time because of the Recess and we will not be coming back to this until Report in the autumn. In particular, I would like to thank the Minister for his meticulous reply, to which I have listened carefully. There are obviously a number of issues that need to be addressed. There was the question that the amendment related purely to after sentence. We put that in because we were concerned about issues of this kind contaminating the sentencing process. However, if the noble Lord feels that that is not an issue, that can certainly be revisited. The noble Lord, Lord Ponsonby, made some useful points about the inadequacy, perhaps, of a telephone call and that in some respects it is important that whatever process we put in place should go further than this amendment. I very much welcome having further discussions with the noble Lord, Lord Ponsonby, about that and seeing whether there are ways in which we can take account of the concerns that he raised.

The most important points came from the Minister about the inappropriateness of trying to achieve what we want to achieve through a practice direction. We thought that, in that way, we were seeking to put in place a more light-touch process than creating a statutory duty, but if that is not appropriate, we can certainly revisit that and avoid trying to do things by statutory practice direction—trying to effect practice directions by referring to them in the amendment.

I would make this point, to which I think the noble Lord, Lord Kennedy, also referred. The Minister indicates that we should work through a range of pragmatic steps that can be taken by a variety of bodies and that they might be collected together in guidance, but there is evidence that guidance is not working. There is guidance around but there is still a problem. I continue to feel that there is a need for whatever we put in place to have a statutory basis. Therefore, I would like to continue discussions with the Minister to see whether we can get a statutory basis with which he is happier and which would give what we are all trying to achieve a bit more teeth than the guidance, which is not working, would appear to have. With those remarks and, in the hope that we can do more work over the summer and come back with an agreed result in the autumn, I beg leave to withdraw the amendment.

Amendment 55A withdrawn.

19:15

Schedule 7: Trial by single justice on the papers: further amendments

Amendments 56 to 63

Moved by

[Lord Faulks]

56: Schedule 7, page 101, line 39, at end insert—
“( ) After subsection (1) insert—
“(1A) The documents falling within subsection (1)(a) include a summons directed to a person that is issued after the person’s trial has begun.””

57: Schedule 7, page 102, line 7, at end insert—
“3A In section 11 (non-appearance of accused: general provisions), after subsection (5) insert—
“(5A) Subsection (4) does not apply in relation to proceedings adjourned under section 16C(3)(a) because of section 16C(2) (adjournment of a section 16A trial because the accused indicates a wish to make representations).””

58: Schedule 7, page 102, line 7, at end insert—
“3B In section 123 (defect in process), after subsection (2) insert—
“(3) In the application of this section to proceedings conducted in accordance with section 16A—
(a) a reference in subsection (1) or (2) to evidence adduced on behalf of the prosecutor at a hearing is to be read as a reference to evidence placed before the court on behalf of the prosecutor, and(b) subsection (2) is to be read as if for the words from “has been misled” to the end there were substituted “is likely to have been misled by the variance, the court shall treat the written charge as not being appropriate for trial in accordance with section 16A.””

59: Schedule 7, page 102, line 34, at end insert—
“5A The Road Traffic Offenders Act 1988 is amended as follows.
5B (1) Section 7 (duty of accused to provide licence) is amended as follows.
(2) After subsection (1) insert—
“(1A) Subsection (1B) applies where—
(a) proceedings in relation to an offence involving obligatory or discretionary disqualification are instituted by a written charge and a single justice procedure notice,(b) the person prosecuted is the holder of a licence, and(c) after being convicted in proceedings conducted in accordance with section 16A of the Magistrates’ Courts Act 1980, the person is given the opportunity to make representations or further representations under section 16C(2)(a) of that Act. “(1B) Where this subsection applies, the person must (instead of complying with subsection (1))—
(a) cause the licence to be delivered to the designated officer specified in the single justice procedure notice within such period as the person is allowed for indicating a wish to make such representations,(b) post it, at such time that in the ordinary course of post it would be delivered within that period, in a letter duly addressed to that officer and either registered or sent by the recorded delivery service, or(c) if the person indicates a wish to make such representations, have the licence with him at the hearing appointed to be held because of that indication.“(1C) Subsection (1B) does not apply (and subsection (1) applies instead) if, before the period mentioned in subsection (1B)(a) comes to an end, a summons is issued under section 16B(3)(b) or 16C(3)(b) of the Magistrates’ Courts Act 1980.”
(3) In subsection (2)—
(a) for “In subsection (1) above “proper officer” means—” substitute “In this section—“proper officer” means—”, and(b) at the end insert—““single justice procedure notice” and “written charge” have the same meaning as in section 29 of the Criminal Justice Act 2003.””

60: Schedule 7, page 102, line 41, at end insert—
“6A (1) Section 27 (production of licence) is amended as follows.
(2) After subsection (4) insert—
“(4A) Subsection (3) does not apply where section 7(1B) applies in relation to the proceedings and the holder of the licence—
(a) has caused a current receipt for the licence issued under section 56 to be delivered to the designated officer specified in the single justice procedure notice within the period described in section 7(1B)(a),(b) has posted it to that officer within that period in such manner as is described in section 7(1B)(b), or(c) surrenders such a receipt to the court at the hearing described in section 7(1B)(c),and produces the licence to the court immediately on its return.”(3) In subsection (5)—
(a) for “In subsection (4) above “proper officer” means—” substitute “In this section—“proper officer” means—”, and(b) at the end insert—““single justice procedure notice” has the same meaning as in section 29 of the Criminal Justice Act 2003.””

61: Schedule 7, page 102, line 41, at end insert—
“Pension Schemes Act 1993 (c. 48)6B (1) Section 68 of the Pension Schemes Act 1993 (unpaid premiums: supplementary) is amended as follows.
(2) In subsection (1), after “1980” insert “or in proceedings conducted in accordance with section 16A of that Act”.
(3) After subsection (1) insert—
“(1A) Where subsection (1) applies in relation to a person being tried in accordance with section 16A of the Magistrates’ Courts Act 1980, the reference in subsection (1)(b) to the designated officer for the court is to be treated as including a reference to the designated officer for a magistrates’ court specified in the single justice procedure notice in question.””

62: Schedule 7, page 102, line 41, at end insert—
“Vehicle Excise and Registration Act 1994 (c. 22)6C (1) Section 55 of the Vehicle Excise and Registration Act 1994 (guilty plea by absent accused and amount payable under section 30 or 36) is amended as follows.
(2) After subsection (2) insert—
“(2A) This section also applies if—
(a) a person is convicted of an offence under section 29 or 35A while being tried in accordance with section 16A of the Magistrates’ Courts Act 1980 (trial by single justice on the papers), and(b) it is proved to the satisfaction of the court, in the manner prescribed by Criminal Procedure Rules, that a relevant notice was served on the accused with the written charge.”(3) In subsection (3)—
(a) in paragraph (a), for “in a case within subsection (1)(a)” substitute “if the offence is an offence under section 29”, and(b) in paragraph (b), for “in a case within subsection (1)(b)” substitute “if the offence is an offence under section 35A”.(4) In subsection (5), for “The court shall not so proceed” substitute “Where this section applies by virtue of subsection (1), the court shall not proceed as described in subsection (4)”.
(5) After subsection (5) insert—
“(6) Where this section applies by virtue of subsection (2A), the court shall not proceed as described in subsection (4) if the written notification served by the accused or the legal representative of the accused in accordance with the single justice procedure notice includes a statement that the amount specified in the relevant notice is inappropriate.
(7) In subsection (6) “single justice procedure notice” has the meaning given by section 29 of the Criminal Justice Act 2003.””

63: Schedule 7, page 104, line 37, at end insert—
“Criminal Justice Act 2003 (c. 44)16 In section 164 of the Criminal Justice Act 2003 (fixing of fines), after subsection (5)(a) (but before the “or”) insert—
“(aa) an offender has been convicted in the offender’s absence in proceedings conducted in accordance with section 16A of the Magistrates’ Courts Act 1980 (trial by single justice on the papers),”.”

Amendments 56 to 63 agreed.

Schedule 7, as amended, agreed.

Amendment 63A

Moved by

[Lord Faulks]

63A: Before Clause 41, insert the following new Clause—
“Low-value shoplifting: mode of trial
(1) In section 22A of the Magistrates’ Courts Act 1980 (low-value shoplifting), in subsection (2) (right to elect trial by Crown Court), for paragraph (b) substitute—
“(b) the court must proceed in relation to the offence in accordance with section 51(1) of the Crime and Disorder Act 1998.”(2) In section 51 of the Crime and Disorder Act 1998 (sending cases to Crown Court: adults), in subsection (2)(b), after “21,” insert “22A(2)(b),”.”

[Lord Faulks]

My Lords, Amendment 63A is designed to provide clarity about the operation of Section 22A of the Magistrates’ Courts Act 1980, inserted by Section 176 of the Anti-social Behaviour, Crime and Policing Act 2014, which made low-value shop theft a summary offence. Your Lordships may recall that although theft from a shop of property valued at £200 or less became a summary offence, the defendant’s right to elect to be tried by the Crown Court was retained. Where it is exercised, Section 22A provides that the case is to be sent to the Crown Court. The basis on which the magistrates’ court would now do so is that once the defendant has elected, as the court has no option but to send to the Crown Court, the offence becomes indictable only and falls to be sent there on that basis under Section 51 of the Crime and Disorder Act 1998.

Amendment 63A provides absolute clarity about the basis on which such a sending takes place as it is not sufficiently clear in the legislation. It makes clear that a low-value shoplifting case in which the defendant elects is to be treated in the same manner as an either way offence in which the defendant has elected. The magistrates’ courts will still be obliged to send the case to the Crown Court where the defendant elects and will continue to do so under Section 51 of the Crime and Disorder Act. Amendments 84A and 84B provide for that change to come into effect two months after the Bill is passed. Amendment 63F is required to put beyond doubt the role of the court in relation to the imposition of the criminal courts charge.

The Serious Crime Bill includes a provision that amends Section 13 of the Proceeds of Crime Act 2002 to make clear that the imposition of the confiscation order should not be taken into account when the court makes a victim surcharge order. That is because the court has no discretion over whether to impose victim surcharge, or how much. In a similar way, the court’s charge will be imposed by the court in any case where an adult is convicted of a criminal offence and the charge levels will be specified in secondary legislation. Amendment 63F therefore makes a similar change to Section 13 of the Proceeds of Crime Act to include the criminal court’s charge as an order in relation to which the imposition of a confiscation order should not be taken into account. I beg to move.

[Lord Beecham]

My Lords, I am grateful to the Minister for explaining the amendments. I am not quite sure what difficulties have been occasioned by the subject of the first amendment, in particular, or whether this proposal will make any difference in the real world. Could the noble Lord kindly explain it a little further? Unless he can show that it has, in fact, led to difficulties, I am somewhat puzzled.

In respect of the second matter, I suppose the question of consistency is relevant. I wonder whether there has been any review of the impact of the victim surcharge order in relation to outstanding fines. This, of course, deals with the confiscation order but, as we have established, there is a huge backlog of confiscation orders that have not been enforced and fines that have not been collected. While this is a tidying-up exercise, the practical effect may be negligible unless considerably greater efforts are made to enforce both fines and confiscation orders. Perhaps the noble Lord will enlighten us as to what the Government will do about the substantial backlog running into, as I recall, something like £2 billion under these heads. Otherwise, this will become a cosmetic change, with no real likelihood of the grave current situation being improved. In fact, unless additional resources are provided, matters will potentially get worse since efforts are presumably not now being made which would be brought into the scope of the provisions on confiscation. That might be an added case load which there seems little realistic prospect of achieving. Perhaps the noble Lord could clarify, in respect of both these matters, where the Government are and, more particularly, what they will do to make sense of the confiscation order procedure under whatever head it takes.

[Lord Faulks]

The noble Lord asked whether any problems have arisen. We are not aware of any, but the purpose of the amendment is simply to clarify the position for the purposes of a good law. The Government’s view on the existing drafting is that, after election for trial, this offence is sent up under Section 51(2) of the Crime and Disorder Act 1998. The noble Lord is no doubt anxious to know the answer to the question. This is not stated clearly in the 2013 Act and the interpretation has consequences which, although not significant in practice, make little sense. One example is low-level shoplifting cases where the defendant, as elected, would be brought within the ambit of the unduly lenient sentence scheme. The present amendment clarifies the position and avoids the consequences; it is the simplest way to deal with the issue.

Amendment 63F is simply a consequential amendment to remove any possible doubt as to whether the court has any discretion over imposing the criminal courts charge or the level of that charge. It would not be appropriate for courts to exercise discretion over a charge that directly contributes to the funding of the courts, but we will consider the role of charging in the next group of amendments. If I may, I will deal then with the questions of charging and victim surcharge and the appropriateness of those.

Amendment 63A agreed.

Clause 41, as amended, agreed.

House resumed. Committee to begin again not before 8.24 pm.

Euro Area Crisis Update (EUC Report)

Wednesday 23rd July 2014 Lords Chamber

Question for Short Debate

19:25

Tabled by

[Lord Boswell of Aynho]

To ask Her Majesty’s Government what is their response to the Report of the European Union Committee on the Euro area crisis: an update (11th Report, Session 2013–14, HL Paper 163).

[Lord Harrison (Lab)]

My Lords, on behalf of my noble friend Lord Boswell of Aynho, and at his request, I beg leave to ask Her Majesty’s Government what is their response to the report of the European Union Committee on the Euro area crisis: an update. I thank my colleagues behind the scenes—namely, Stuart Stoner, our indefatigable clerk, Sarah Yusuf, Rose Crabtree and Katie Kochmann—who all helped and contributed over the years to these important deliberations.

I am delighted to speak to this short debate on the Euro area crisis: an update. This work was undertaken by the Economic and Financial Affairs Sub-Committee, which I chair. The report brings together four short update inquiries undertaken since the European Union Committee’s previous February 2012 report on the crisis. The most recent update was undertaken in February and March 2014. We heard from a stellar line-up of witnesses, including: Senator Mario Monti, former Prime Minister of Italy and a former Commissioner; likewise Erkki Liikanen, a former Commissioner, now the governor of the Bank of Finland and author, of course, of the Liikanen report on the European Union banking structural reform; Sir Jon Cunliffe, erstwhile UK ambassador to the European Union and now deputy governor for financial stability at the Bank of England; as well as a panel of economic experts, which included the Mayor of London’s chief economic adviser, Gerard Lyons.

We took as our starting point a very simple question: was the euro area crisis over? The answer we received was that the crisis had undoubtedly eased. In particular, the existential crisis afflicting the euro had diminished, in no small part thanks to the European Central Bank president Mario Draghi’s authoritative commitment in 2012 to “do whatever it takes” to save the euro. There were other encouraging signs: the reduction in sovereign bond spreads; Ireland’s exit from its adjustment programme; the entry of Latvia into the single currency; the hint from Poland—not only in terms of its financial line-up but even from so venerable a colleague as Lech Walesa—that it also had aspirations to join the euro; the return to growth in many member states; and even a growing confidence in Greece, the epicentre of the crisis. I thank also the noble Lord, Lord Boswell, who presides over the European Union Committee. He and I were in Athens recently at a COSAC meeting to hear of a very good report that was given by Prime Minister Samaras.

Having said that, we found that fundamental weaknesses remained, including: the extremely high levels of unemployment, particularly youth unemployment; immense economic imbalances between core and periphery member states of the eurozone; anaemic growth; inhibited bank lending, particularly to small businesses; and perhaps incomplete and uncompleted structural reforms in a number of the member states. There was also an overstrong euro on the exchange rates. Perhaps most of all, there were growing fears of a damaging deflationary spiral. All of this fed into wider political tensions about the effect of the austerity on the lives of European Union citizens—tensions that the May 2014 European parliamentary elections in part illustrate.

Our conclusion was that, while the crisis may have abated, it would be wholly unwise to conclude that the storm had entirely passed. In particular, the economic fragility of many member states meant that the euro area remained vulnerable to future shocks. Events since the publication of our report have borne this judgment out. The recent crisis of the Portuguese Banco Espírito Santo led to nervous jitters spreading across the euro area periphery. Industrial production remains low and overall growth is running at only 0.2% a quarter. The recovery remains as ill balanced as ever, as Germany leaves other members of the single currency in its wake—although even with Germany more recently there has been some holding back in its traditional economic growth. Inflation is currently running at only 0.5%, as growth continues to bump along. The threat of a prolonged period of low inflation or even a deflationary spiral looms ever larger. The European Central Bank was applauded for its action in June of this year, when it announced that the deposit rate for banks would be cut from zero to minus 0.1%, alongside targeted long-term refinancing operations, and yet the jury is out as to whether these measures will have any tangible effect.

The euro area crisis has also had a prolonged impact on the EU institutions. The European Central Bank has emerged with well deserved credit for its handling of the crisis. Nevertheless, it faces significant challenges, not only from the deflationary effect but also over the handling of its comprehensive assessment of the banking system, including of course the so-called stress tests, the result of which will be announced in October. Reports last week suggested that banks would have two weeks to plug any gaps in balance sheets that the ECB uncovered. This process will test the robustness of the euro area’s recovery and future health as never before. Overall, we found that the crisis had seriously altered the institutional and decision-making structures of the European Union. Those representing the euro area, such as the European Central Bank and the euro group, have grown in importance. By contrast, the Commission’s powers and influence in determining the crisis response have perhaps diminished. I should remind colleagues that the new Commission President, Jean-Claude Juncker, was a former chair of the euro group, with all the implications that that has.

This trend has significant implications for the United Kingdom. Closer integration is vital if the single currency is to prosper. We therefore agree with the Chancellor that the UK must do all in its powers to support its EU partners on this path. Nevertheless, such moves towards integration leave the United Kingdom in an increasingly isolated position. Noble Lords will be aware that the EU institutions are in a state of flux. As I mentioned, the newly elected European Parliament is finding its feet, the new President of the Commission has been chosen and the shape of the new college of Commissioners will emerge over the coming weeks. In this context, the Government and the Bank of England must maintain and develop constructive relationships with the increasingly powerful euro area authorities. All parties should redouble their efforts to convince euro area colleagues of the benefits of having the City of London as the leading global financial centre for the European Union as a whole. If they can be convinced of the mutual benefits of prosperity for the euro area and the single market, then the UK and the City of London will have much to contribute and much to gain.

I look forward to the Minister’s response on the steps that the Government are taking to ensure that the UK and the euro area enjoy such mutually beneficial relationships in the months and years to come.

19:36

[Lord Maclennan of Rogart (LD)]

My Lords, this report is helpful and I am glad to acknowledge that the committee proposes to continue reviewing these developments every six months. I think that will be exceedingly important.

There have been some positive developments, which have flowed largely from the European Central Bank. That is acknowledged by, among others who gave evidence to the committee, Sir Jon Cunliffe of the Bank of England, who noted that the redenomination of currencies was now very unlikely. However, as the noble Lord, Lord Harrison, said, we cannot take anything for granted, and we must watch very carefully. As the report suggests, and the Minister who replied to the report agreed, we must maintain and develop constructive relationships with the euro group and the ECB.

Will the Minister tell the House how that process is being maintained, particularly as we in this country appear to be the odd man out, seeking special deals for Britain without allies or even being particularly specific about what these deals are? It is quite clear that the United Kingdom must support our EU partners on the path towards greater integration of the euro area, but there is of course a risk, if that goes ahead, that we shall find ourselves increasingly isolated as a country and decreasingly influential in decision-making. I entirely endorse the view of the committee that we should be looking to strengthen the role of the City of London as the banking centre for Europe. However, if we remain completely at arm’s length from these developments, that will be an increasingly difficult project.

In their letter of reply to the committee, the Government suggested that we should,

“tackle unsustainable levels of debt, reform labour markets, and support business creation and innovation”.

It would be helpful if the Minister could indicate how these steps are to be taken. With banks currently withholding loans and, as Sir Jon Cunliffe said, with cross-country lending diminishing, that seems quite difficult. The Government should make it clear that they do not intend to limit cross-border immigration of skilled workers as part of the European Union’s so-called reforms. We need these developments if we are to have new business creation and innovation. Without them, there will be particular difficulties for small and medium-sized enterprises.

We look forward to hearing what the comprehensive assessment process of the European Central Bank will reveal. It is a difficult exercise for it because if it reveals too many banks being in difficulties, that could actually not strengthen the system, although we were very happy to hear from Mario Draghi as long ago as June 2012 that the bank would do anything to safeguard the future of the euro. It would be interesting to know what the Government are doing in the negotiations that they are participating in with the euro group to ensure that new arrangements work for those outside the euro area. I do not hear much about that specifically, but it would be helpful to know.

The noble Lord, Lord Harrison, spoke about the deflationary spiral. It seems that that is not an imminent threat but it is something that we have to watch. I would also be interested to know how the Government view that and what they are saying about the austerity programmes that could induce such a spiral.

This is a factually interesting report with interesting evidence from witnesses, but we need more particular replies from the Government. They are generally supportive of the report, but they have not given much indication of how they intend to proceed.

19:42

[Lord Davies of Stamford (Lab)]

My Lords, it was a pleasure once again to combine with colleagues in producing this report. It is fair to say that all possible perspectives on the issues were represented round the table in our committee and our debates were extremely stimulating and very instructive.

I want to use my time to address three illusions—or delusions, I should perhaps call them—that are extremely widespread, making it very difficult for people to appreciate the problems dealt with in this report. They are serious delusions and very erroneous, and I hope that in the very short time that I have to speak, I can go some way towards destroying them. The first delusion is the idea that the euro crisis is what it sounds like; that is to say that it is a crisis resulting from the existence of the euro and is the fault of the euro project. It is nothing of the kind. The so-called euro crisis is a debt crisis. There is no way in which the existence of the euro, or the existence of any particular currency, would necessarily have produced the outcomes in terms of excessive debt which we have been coping with in the last few years in the euro zone and indeed, elsewhere in the western world.

The reasons for the unbelievably irresponsible and often incompetent excessive lending practices go beyond the subject of this debate, but we are familiar with the general picture. Suffice it to say that we had banks in the European Union—in Ireland and Spain particularly— which lent on real estate projects with less than 10% equity. They were allowing more than 50% of their total assets to be exposed to the real estate sector.

Of course, as a result of the weakness of banks’ balance sheets, the government funds standing behind them produced a move from a banking crisis to a state funding crisis in countries such as Ireland and Spain. The position was made much worse in Greece by the falsification of the national accounts but elsewhere it was almost entirely a result of lender irresponsibility, or even worse than irresponsibility.

I have no doubt that incentives have an important effect on human behaviour, and some of the incentives in terms of short-term bonuses and so on were undoubtedly extremely perverse. They led to people lending to bad risks, taking a bonus on the basis of capitalising the profits to be generated from the loan and then walking off and getting a job somewhere else. We have had to deal with those matters decisively and thank heaven we have.

This was a debt crisis not a euro crisis. Irrespective of the currency these countries had, they would have faced the same magnitude of problems given the levels of debt that had been incurred, the bad debts that had been incurred and the central mispricing of risk that was going on. There was a quite disgraceful mispricing of risk. Again, serious professional incompetence was directed at the management of the enormous resources of the banking system in the European Union. It was a very serious matter indeed.

Some people say that one reason why it was the fault of the euro was because lenders thought that somehow a hidden or covert guarantee was being given by Germany or the other more solid economies to any other economy in the EU that got into trouble. Of course, such people were not only incompetent but they presumably could not read because the treaty precluded such a bail out or guarantee.

I am not suggesting that we had in place all the necessary measures to cope with the crisis and the shock which ensued from this bad lending—we did not. In three areas there was a deficiency of measures and institutions available to cope with this kind of scenario, one of which was that there was insufficient co-ordination of fiscal policy. We had under the euro until recently—until the stability and growth pact in fact—one monetary policy but 17 or 18 fiscal policies. That is not a good situation, but it has now been remedied. There was insufficient co-ordination and no centralisation of banking supervision which, in some areas, was plainly inadequate. The single supervisory mechanism, with the ECB taking charge, is taking place this year and will come into force next year. It is an encouraging measure.

There were, and still are, inadequate mechanisms of automatic stabilisation in the European Union. There is some measure of automatic stabilisation in the working of the cohesion and structural funds, but there should be much more. I am drawn to the idea—I have defended it in many contexts, including in this House—that we should have in the eurozone a single, integrated unemployment insurance system, which would certainly have a major automatic stabilisation effect in a crisis or an asymmetric shock affecting different members of the Union or different parts of the Union in different ways.

There are lessons to be drawn from the crisis. However, under no circumstances can it be called a euro crisis to the detriment of the reputation of the euro because that would not be consistent with the facts. It was a debt crisis.

I move now to the second great delusion, which is even more commonly held. In many places it is an assumption that people take for granted and, therefore, it is never challenged and never thought about. I hope that my mentioning it today might begin to remedy that. It is the assumption that we were quite right to stay out of the euro, that we are much better off out of it, and that it would have been a crazy, inconceivable thought that we would want to join the euro because the euro is in such a crisis. First, that is a misreading of the crisis, as I have already explained. Secondly, it is mathematically incorrect as a description of where the country would be if we had joined the euro. I remind the House of the figures, which I have noted down to make sure that I get them right. In the 15 years from 2000 to 2014—from the beginning of the euro project, if you like—sterling parity has fallen against the euro from 65p to 82p. That is a fall of 27%. So, all other things being equal, we would have been 27% richer—we would have had 27% higher net assets and net revenues—if we were in the system than if we were out of it.

One could say that we would not have had the same growth rate over the same period if we had been in the euro system. I have no idea whether that is the case. Our growth rate over that period has been an average 1.8% per annum. If you take the original EU 12 which were members of the eurozone—and the figures are more or less exactly the same if you take the larger number of countries that joined the EU subsequently—you will see that their growth rate over that period has been 1.2%. That is a difference of 0.6%, which, on the basis of compound interest over 15 years, works out at about 12%. If you make the assumption that our growth rate had been that of the average eurozone member over the period since the beginning of the euro, which is less than we have actually had—it may not be a realistic assumption; it certainly seems odd to make an assumption that our growth rate would have been less than the average eurozone growth rate because we pride ourselves on having a more efficient and more flexible supply side than most of the eurozone— the result would have been that we would have been some 15% better off today, so that is a significant difference.

I refer to a final delusion: the idea that we still face dire consequences from the crisis. The general indicators seem to be rather favourable. Unemployment is falling in the majority of EU countries, including all the four problematic ones—Ireland, Spain, Portugal and Greece. Growth has resumed in the eurozone. The best predictor of the future which I know is the stock market, which tells one really quite an encouraging story about both the future of the eurozone as a whole and about that of the problematic countries within it.

19:51

[Lord Flight (Con)]

My Lords, I pay tribute to the noble Lord, Lord Harrison, for chairing our committee and for the production of this report, which, given the spread of views on the committee, is very fair and accurate. I think that the noble Lord, Lord Kerr, began to get slightly worried that he found himself agreeing with me on too many issues.

The report is, as the noble Lord, Lord Harrison, has suggested, slightly optimistic in that recovery in southern Europe is pretty weak, the public finances are still worsening, the threat of deflation remains and the unemployment position is terrible. The real problem is that the euro locked Europe into a gold standard. Italy, Portugal, Spain and so forth had happily devalued 2% or 3% every two or three years, but when they could no longer do that and Germany put great effort into becoming super-competitive by holding wage rates down, it ended up with about 30% uncompetitiveness among the countries of southern Europe as against Germanic Europe, and they are stuck with it. They have taken measures to address that. The only scope is internal devaluation, but that is extremely painful and, candidly, I am quite surprised that predominantly socialist politicians, in the cause of sustaining the euro, have been apparently happy to see the lives of a whole generation of young people in southern Europe wrecked with a massively high level of unemployment, so there is a slight problem there.

[Lord Davies of Stamford]

My Lords—

[Lord Flight]

No, I shall not give way because I do not have long to speak.

The prospect of real political and economic union is for the time being not particularly promising. The big issue is that if you are going to share a currency, you have to have transfer payments. Britain has £70 billion or £80 billion of transfer payments from the prosperous south-east to other parts; in America, some 30% of federal spending goes on transfer payments. When we went to visit every element of Germany and asked them about transfer payments, the answer we got was “Not a pfennig”. Nobody in Germany was willing to face up to the fact that, if they wanted a united Europe and if they wanted to sustain the euro, they would have to be willing to make transfer payments to the less prosperous parts of Europe.

As the noble Lord, Lord Harrison, mentioned, we have yet to see how robust the banking system is with the stress test coming in October. I hope that the test will be genuine and robust, but if it reveals serious undercapitalisation of the banking system, that presents its own problem, because, in essence, it will have to be the relevant Governments who bail out the banking system. Thus the link between government debt and banking problems is not removed but, if anything, worsens.

I cannot help but comment that we have been here before in that in the 1860s, the French established a common European currency, the silver franc. We spent most of the 1870s debating whether to join it, and indeed in the British Museum there are notes and coins which were produced showing what they would be like if we did join. Walter Bagehot, the great economist, was wholly in favour of doing so. It lasted for 30 years until eventually the author, France, became so uncompetitive with something like 35% unemployment that it ditched the silver franc and ended the first attempt at a common European currency. I should add that everyone participated, including Switzerland, other than the German states because Germany had not yet united.

As the noble Lord, Lord Harrison, and others have pointed out, the report makes the point that the crisis has created the eurozone versus the peripherals. Although it is slow, I think that from now onwards there will be a gradual process towards political, economic and financial integration. Noble Lords will know the story of when Kohl and Mitterrand were discussing the euro. Kohl said, “We can’t start the euro because there isn’t much political integration”, and Mitterrand responded by saying, “We’ll never get political integration unless we put the euro into effect, which will force it”. I think that may be true. However, the UK is obviously not part of the eurozone and, as the report states, it is already a semi-detached member of the European project. In particular the loss of sovereignty over financial regulations has damaged the City of London. I describe it by saying that the City enjoyed a boom for around 40 years. It then plateaued and now it is on the way down in terms of earnings, activity and the number of people employed. The AIFMD has been particularly damaging and has moved a lot of business to New York and Singapore, and the biggest threat is the financial transaction tax. If noble Lords have not read it, I particularly recommend the report of EU Sub-Committee A on that.

The point is that although the report exhorts everyone to be friendly and co-operative—indeed the representative and lobbying bits of the City in Brussels never cease to grow, with around seven different institutions that are all there to be friendly and lush up their colleagues—there is a difference of interest. I am afraid that London is at the mercy of what suits Europe, along with its particular jealousies of London’s dominant position. The City has put up with that and got on with it, but beneath the surface there is mounting resentment. If the financial transaction tax were to go ahead, I think that it would be the straw that breaks the camel’s back.

I end by making the point that there is the irony of the British Government being the first to recommend that Europe should get its act together and get a move on with financial, political and economic unification, and yet that is the very thing which has led to Britain being a semi-detached member. The view is becoming clearer and more widely held that the right relationship for the UK is as a member of the EU customs union and the single market, but not of the EU political union. I detect that, one way or another, this is now the direction in which we are heading.

19:59

[Lord Kerr of Kinlochard (CB)]

My Lords, my text is taken from the fourth chapter of the book of Harrison. I pay tribute to the prophet for his skill in achieving a consensus, but I shall now try to demonstrate that there is a wide range of views on the committee, as I shall not agree with everything that the noble Lord, Lord Flight, has just said.

I am not competent to follow the noble Lord, Lord Davies of Stamford, into the economics, so I shall stick with chapters 3 and 4 of our report, where we argue about the institutional effects and the impact on the United Kingdom. In particular, paragraph 71 states:

“The economic fortunes of the UK and the euro area are intrinsically linked … moves towards integration leave the UK in an increasingly isolated position. In order to ensure that the UK’s interests are effectively promoted, the Government and the Bank of England should therefore maintain and develop constructive relationships with the increasingly powerful euro area authorities, notably the Eurogroup and the ECB”.

The initial brief reply from Nicky Morgan, who was briefly Financial Secretary to the Treasury, said that we had correctly identified,

“that the changes in governance precipitated by the euro area crisis has seriously altered the EU’s decision making structure and that, in turn, impacts on the UK”.

However, she assured us that,

“going forward the Government will remain, as it has done so far, closely involved in negotiations … to ensure that proposals fully take into account the interests of all Member States”.

I thought that a little complacent. I was also struck by the passage in the balance of competences review that was published by the Treasury yesterday that states:

“Access to the single market in financial services and the Free Movement of Capital provides significant benefits for the UK financial services industry and for consumers … While the ultimate impact of the banking union is hard to predict at this stage, it is likely to pose a number of challenges to the UK’s interest in maintaining a central role of influence in an internationally competitive financial market in the EU”.

We got some advice, as has been mentioned, from Sir Jon Cunliffe, deputy governor of the Bank of England, who advised that the Government would do well to try to maintain,

“contacts with the Eurogroup, ensure its meetings took place in the context of other EU meetings, and being ready to offer technical advice without lecturing or providing unwanted counsel”.

I thought that rather good advice. Maybe Sir Jon could persuade the Governor of the Bank of England, or the Minister could persuade the Chancellor, that the euro group should be invited to hold one or two of its meetings in London, where it could be briefed about, and familiarise itself with, its key market—the City. Maybe the Minister could think about a suggestion made in evidence to the committee yesterday by Sharon Bowles, who until the European Parliament elections chaired the ECON committee of the European Parliament, that the eurozone should be encouraged to meet after, rather than before, meetings of ECOFIN so that it would be better able to take account of the interests of all 28 member states, as the treaty requires it to do.

The balance of competences is right to talk of challenges. I can think of five. First, the eurozone will have a qualified majority from November. Secondly, the UK, as a non-eurozone member, is in practice now ineligible for any of the top economic jobs in Brussels, including: the president of the ECB; the president of the euro group; the Economics Commissioner, who might be combined with the president of the euro group; and the President of the Commission and the President of the European Council, because such a large part of their agenda relates to the euro.

The third challenge is that the UK is in a different position from most other member states, including most other non-eurozone member states. Most non-eurozone member states purport to be, or see themselves as, pre-ins. They say that they want to join one day; we say very firmly that we have no intention of ever joining, which rather singularises us. We said the same about fiscal union—not that it was very stringent; it turned out to be a rather loose form of discipline to apply the austerity that we were at that time loudly preaching. But we chose, with our Czech friends, to flounce out. We alone have refused to contribute to any bailouts of member states in trouble during this crisis and we take great pride in that as one of our great achievements. We report that we have managed to avoid being involved in any bailout. On banking union, it is my impression that most of the pre-ins, such as the Poles and the Swedes, who are certainly not going to join the euro in a hurry, have managed to keep rather closer to banking union than we have done. That could be damaging to the City.

The fourth challenge is that we cannot have any key position on the economic side of the European Parliament as non-eurozone members—Sharon Bowles’s successor is an Italian. Regarding the institutions, the British Bankers Association brought out an interesting report the other day saying that the representation of UK public servants in the institutions is down to under 5%, proportionally lower than at any time since we joined. If that figure was based on our population share, it would be 12%. Only one in every 25 new recruits to the institutions is a British citizen, although one in every five comes from a British university. Why are the Brits not going? It reflects a wider problem: just as young people cannot be sure that a career in Brussels would not be brought to a sudden end, so other member states cannot be sure that it makes sense for them to do deals with us when, as the President of the European Council puts it, they can see that our hand is on the door-handle and when they hear the new Foreign Secretary saying—without defining what we want—that, if they do not give us what we want, he would be ready to recommend that we leave.

None of these problems is easily soluble. We are in a hole and, as the report says, we are “increasingly isolated”. We could remember the first law of holes, which I remember the noble Lord, Lord Healey, explaining: when you are in a hole, stop digging. It would be quite good, as Sir Jon Cunliffe said, to avoid lecturing people. We could also avoid hectoring or denouncing them, for example in articles in the weekend press. It would be good to try to avoid deliberate distancing. The French have a saying: “Les absents ont toujours tort”, or “Those not present are always in the wrong”. Alternatively, you could say, “We’ve got to be in to win”. Given that we are not in the eurozone, it behoves us, and the interests of the City, to stay as close to it as we possibly can.

20:07

[Lord Davies of Oldham (Lab)]

My Lords, I, too, congratulate the committee on this latest stage of its continuous hard work on these issues. I very much appreciated the excellent introduction by my noble friend Lord Harrison, who covered all the significant points in the report and rendered nugatory any intention on our part to mention them in detail. However, of course, we need to look at the report as a pointer to what needs to be done and the situation that we are in as far as Europe is concerned. There is some cause for optimism: the euro appears to be out of crisis although, as I think my noble friend Lord Harrison said, the storm has not exactly and entirely passed by. That will do as an analogy, but the situation is a good deal better than the one we were facing only a short while ago. Clearly, several countries have significantly improved their economies on the way to some recovery. Ireland in particular has made progress in these terms, as have Spain and Portugal, although, as has been mentioned and is emphasised in the report, employment levels are very low. That leads to an important issue, which I will comment on later, about the level of demand in the European economy.

I am grateful to my noble friend Lord Davies for expanding on what the report makes clear, which is that the euro crisis is part of a global crisis. We are so used to the Conservative perspective on the crisis as being manufactured in the UK and being solely the responsibility of the Labour Government, who spent too much money. There is no comment of course about the collapse in receipts going to the Labour Government at that time because of the crisis that affected the banking and financial sector in particular, which is such a crucial part of our economy. This report puts the euro position into the broader perspective. It is important, therefore, that we recognise that a great deal still needs to be done.

As the report indicated, austerity has been costly. It is costly, of course, in terms of living standards. We have seen that in our own country but, because the margins for some in the euro area have been so low, austerity has had a very bleak impact on populations there. As has been indicated in this debate, we have seen a loss of confidence in and support for Europe because austerity brings discontent where people’s living standards fall as rapidly as they have been doing. The report indicates that it is essential that we see policies that return to growth, and we have to make sure that we pursue the necessary reforms to create that growth. None of us underestimates in a number of European countries how deep the problems are—referred to as requiring structural reforms. They are mighty challenges but it is clear that both Europe and particularly Britain, with its relationship to the European economy, want to see those reforms carried out because it is very much in our interests to have an effective single economy.

The single market is of great advantage to this country in our trading relations but it is also important to the City of London, which is a pivotal point of our economy as a major financial centre. I agreed very much with the point made by the noble Lord, Lord Kerr—that we had better take steps to ensure that there is a close relationship between the institutions in Europe. The Central Bank also clearly helped to avert the crisis in the eurozone and we now need to see the Bank of England establishing closer relationships for the good of all countries in the Community.

The problem with all this is that the challenges are big but we have a Government who seem to exacerbate the issue. The Prime Minister says that he is setting out to reform Europe in meeting these challenges. The task that he has set himself is to effect significant reforms in Europe in the next 24 months with the support of 27 states, when at the moment his support extends to none, except for the United Kingdom, of which he is Prime Minister. We saw a dimension of the failure of diplomacy in the rather ham-fisted attempt to prevent the appointment of Juncker as head of the Commission.

How can we make progress when the Prime Minister seems to be more concerned with negotiating with his party than with Europe? We saw an instance of this in this House this very day. On Monday, we all read in the press and on Sunday we had seen on “The Andrew Marr Show” the new Foreign Secretary making it absolutely clear that he had a terminal point when it came to membership of Europe, and that if there were not very significant changes in the structure of Europe and Britain’s relationship to it, he was voting for “out”. In this House today, the Government’s business spokesman said in answer to a question that there is no question of withdrawal. These are not just members of the same party; they are important figures in the Government of this country because of the role that they play in the party, yet, from what I can see, they have quite contrary positions. What does the Minister have to say about how he proposes to wrestle with those kinds of difficulties?

Finally, I want to make what might be regarded as a minor but quite clear point. We are also losing influence in Brussels because we no longer provide people who operate part of the civil service there. In 2004, more than 9% of civil servants in Brussels were British. That is down to 5.3%. Not a single Briton has gained entry to serve the Commission through the highest-level examination. That is loss of influence and it is a reflection of the fact that the Community’s confidence in Britain is being lost by the stance the Government are taking. It is being reflected in a grievous way, which will adversely affect this country.

20:15

[Lord Newby (LD)]

My Lords, I thank the noble Lord, Lord Harrison, and European Union Sub-Committee A for publishing the updated report. I also thank members of the sub-committee for organising the debate, and everybody who has spoken.

It is blindingly obvious that a stable euro area is in Britain’s interests. Some 40% of UK goods and services exports go to the euro area and the economic uncertainty emanating from the euro area at the height of the crisis had a chilling effect here. The Government welcome the return to growth in the euro area, but vulnerabilities obviously remain. We agree with the committee that the storm has not entirely passed. While growth has returned, it is weak and unemployment remains high. As the noble Lord, Lord Harrison, pointed out, growth across the euro area is ill balanced. The balance of payment surplus of Germany, for example, has reached record highs, while obviously other member states are still suffering very considerable economic problems.

The ECB’s announcement of its outright monetary transaction mechanism and its clear commitment to stand behind the euro have clearly helped relieve the pressure from the sovereign debt crisis. However, the euro area has to make some important steps to strengthen the single currency for the longer term. Countries in the euro area periphery are undergoing a painful but necessary adjustment. They need to carry on confronting head-on their problems of high deficits and low competitiveness. They are making very considerable progress. By the end of 2014, Spain is forecast to have reduced its deficit by almost five percentage points since 2012, while it, Italy and Portugal all registered current account surpluses in 2013.

My noble friend Lord Maclennan asked whether that adjustment was too quick. It is interesting to see that the rate and path of deficit reduction in Spain, for example, is much sharper than the one we have decided to follow here. It has had a number of consequences, one of which has been high unemployment and a fall in real wages. What is interesting about the Spanish economy is the extent to which it is rebalancing away from property and rebounding. The absolute pace at which some of these economies are adjusting and the extent to which that is optimal will not be clear for some time. However, they have made very significant steps and are to be congratulated, not least against a background, two or three years ago, in which many people in the UK said they would never be able to do it and that the euro would collapse as a result.

A well designed banking union comprising centralised decision-making on supervision and resolution supported by credible financing arrangements, can, in our view, support the long-term stability of the single currency. The ECB’s comprehensive assessment process is critical to restoring market confidence over the medium term and is an important step in implementing the single supervisory mechanism. We strongly support the announcements on stress tests and believe they provide for a robust process. However, all elements of banking union must protect the unity and integrity of the single market and the interests of non-participating member states and be legally sound.

Some progress has also been made on closer oversight of fiscal policy. Exit from the crisis will be easier the more the euro area does to support demand and share the burden of adjustment. The noble Lord, Lord Davies of Stamford, and my noble friend Lord Flight referred to the challenges of greater fiscal co-ordination. The noble Lord, Lord Davies, suggested an integrated unemployment insurance system, but I think my noble friend Lord Flight answered the question of how plausible that is, certainly in the short to medium term, by pointing out that the country making the transfer payments in such a system would be, to a large extent, Germany. There is very little evidence that Germany feels that is an appropriate way forward.

The Chancellor has long made clear his view that there is a remorseless logic that the euro area, like any single currency, needs closer economic and fiscal integration. The euro area needs the right governance and structures to address its current challenges, but the change in governance precipitated by the crisis has altered the EU’s decision-making structure and affected us, as we have heard from a number of noble Lords. We must ensure that any new arrangements work for those outside the euro area as well as for those within it.

My noble friend Lord Maclennan asked how we would maintain our position given these new arrangements and, although the noble Lord, Lord Kerr, thought it was slightly thin, the Financial Secretary to the Treasury pointed out that we will be and are closely involved in negotiations on EMU and in ensuring that proposals fully take into account the interests of both the euro outs and the euro ins. In answer to my noble friend Lord Maclennan’s question about how we are doing this, we are in constant contact with euro area partners at European Council and ECOFIN meetings, and we are pursuing the informal interpersonal relationships that we discussed at some length when we last had a discussion on the issue. I completely agree with the suggestion that in these interactions, we need to avoid hectoring and denouncing—something that UK Ministers of all parties, over several decades, have found exceptionally difficult in dealing with our European partners.

My noble friend Lord Maclennan asked how we are supporting the leveraging labour market reform and innovation. The Government support the attempts to tackle these issues. We support the ECB’s comprehensive assessment—stress test—and the asset quality review as a means to improve confidence in the banking system. We support the ECB’s moves further to develop the European securitisation market as an alternative to bank lending. Labour market reforms need to be undertaken on a country-by-country basis, along with wider structural reforms to promote growth.

The noble Lord, Lord Kerr, referred to the balance of competencies review and the challenges that it identified. It is a helpful and formidable document and has the great advantage of having a large number of sensible and practical suggestions of how decision-making processes might move forward. He identified a number of key challenges, none of which I suspect anyone in your Lordships’ House would disagree with. The one I highlight, which the noble Lord, Lord Davies of Oldham, also mentioned, is the question of staffing, which we have discussed in your Lordships’ House on a number of occasions. We discussed it at our last debate on the subject, and following that debate I wrote to the noble Lord who raised the issue of staffing and I hope that other noble Lords who took part in that debate, most of whom are here today, will have seen a copy of that letter about the initiatives that the Government were taking.

It seems to me that the banking sector needs to be willing to encourage its staff to participate in the European institutions. The sector is quick to denounce the Government but slow to take action itself and, in private moments, will admit that if it has somebody really good who would do it really well, the last thing they are prepared to do is to give that person up to do it. As long as that remains the view of the sector, the current situation will continue.

The noble Lord, Lord Kerr, made a couple of interesting and practical suggestions about the euro group and where and when its meetings might be held. I will draw those suggestions to the attention of the Chancellor.

The Government could not agree more with the points made in the report about the importance of the City of London as a leading international centre. We do not altogether share the gloomy prognosis of the noble Lord, Lord Flight, for the City. The City will evolve. Some areas of business will undoubtedly move elsewhere as global markets evolve. However recent developments, such as renminbi trading in the City and the Government’s decision to initiate a sovereign sukuk and therefore promote Islamic finance, offer very significant new areas of activity for the City which will help underpin its position as Europe’s leading international financial centre.

My noble friend Lord Maclennan asked about cross-border workers and pointed to the important role that they play in the UK economy. As I pointed out at Question Time recently, the growth in house building in the UK, that all parties now believe to be very important to the period ahead, will happen only if we continue to employ large numbers of skilled workers from the rest of the EU because it is physically impossible to train large numbers of skilled workers in the short term. For the future growth of the British economy, the continued involvement here of skilled workers from the rest of the EU is very important.

We have had an extremely interesting debate across some relatively familiar themes. I would like again to thank the committee for this contribution to the debate, and I look forward to its next update.

Criminal Justice and Courts Bill

Wednesday 23rd July 2014 Lords Chamber

Committee (3rd Day) (Continued)

20:26

Clause 42: Criminal courts charge

Amendment 63AA

Moved by

[Lord Beecham]

63AA: Clause 42, page 41, line 26, leave out “must” and insert “may”

[Lord Beecham (Lab)]

My Lords, the amendments in this group deal with the Government’s proposal to require a charge to be levied on those convicted of offences, in addition to any financial or other penalty which may be levied on them. Characteristically, this would be a mandatory provision, judicial discretion thereby being further eroded, and the proposition is unsupported by an impact assessment. Out of thin air, Ministers pluck a figure of some £65 million for the estimated yield of this new charge, which will be calculated not merely on the costs of the individual case but on the overall costs of the court system.

As I pointed out at Second Reading, this sum is but a fraction of the vast amount of money owed under court orders: some £2 billion as at March 2013, two-thirds of it represented by unenforced confiscation orders. At that point, £420 million was outstanding by more than 12 months and there were no fewer than 1.2 million individual accounts outstanding. That puts into perspective the amount which this proposal would, perhaps, realise. Not all the figures that I have referred to relate to criminal matters. However, Liberty, to which I am indebted for a most informative briefing, averred that in the first quarter of this year £549 million was outstanding. Collection rates are poor across a range of orders, with 48% of fines and 35% of costs unpaid after 18 months. The Ministry of Justice does not even bother to collect statistics in relation to older debt.

There are serious difficulties with the Government’s policy, quite apart from the likelihood that, on present form, they will be very unlikely to recover anything like the amount ordered. Several of the difficulties are identified in Amendment 63AF, which seeks to prohibit an order where the court thinks it might affect a decision on how the accused pleads. This is clearly a serious matter. Defendants should not be deterred from advancing a defence on the grounds that they may be liable for not only punishment for the offence but what might be a significant amount to be paid under the provisions for a court charge. The amendment would deal with the issue of where enforcement costs are likely to mount to more than the charge, as enforcement costs could well be significant, and where the charge relates to any part of the hearing for which the defendant is not responsible—for example, adjournments—or any appeal, as the charge would apply not just to the original trial but to any potential appeal. The deterrent effect could, again, come into play. Finally, the amendment would seek to preclude the operation of the charge if a written means assessment had not been carried out.

20:30

Amendments 63AA, 63AJ, 63AK and 63AL seek to restore judicial discretion. This would replace the obligation laid down in respect of the magistrates’ courts, Crown Court and the Court of Appeal which, under the terms of the Bill, must make an order to levy the charge. It is quite improper, in my submission, for this to be made a binding obligation on the courts irrespective of the circumstances. Amendment 63AD would therefore require the court, before making such an order, to find it just and reasonable to do so in all the circumstances. Amendment 63AG would require the court to give reasons for imposing or, to be fair and balanced, not imposing an order. Amendment 63AE would require a reasonable assessment of the defendant’s finances before a collection date is decided. Finally and, again, reasonably, Amendment 63AH would prescribe that, where there is more than one defendant, any charge as a result of the case should be divided equally between the defendants and not be imposed just on one or less than the total number convicted. In addition, Amendment 63AA would restrict orders to defendants over the age of 21. That relates to our earlier discussion about the position of younger defendants but, in this case, it is not just those under the age of 18.

It should be borne in mind that the court currently has the power to award prosecution costs where it considers it just and reasonable to do so. However, the Bill’s provision allows no consideration of the defendant’s means or other issues such as health or family considerations. Data on the background of prisoners cited by Liberty indicate that a substantial proportion of prisoners—especially women—earn less than half the national average, with 64% in receipt of benefits. The profile of prisoners may be somewhat different from those who do not receive custodial sentences but there is nevertheless likely to be an approximate equation of these factors between the two categories. Even allowing for the possibility that the average might be different for defendants receiving non-custodial sentences, it is clear that mandatory orders would inflict considerable difficulties on large numbers of offenders. The Joint Committee on Human Rights has pointed out the risk that the change envisaged by imposing this charge may infringe Article 6 of the European Convention on Human Rights if it is seen as restricting access to a court or tribunal—for example, by way of appeal. In addition, given the serious concerns about the measure, it would be inappropriate to wait three years for a review of the operation of the charge as predicated by Clause 43. Hence Amendments 63FA and 63FB call for a review after a year. Given the number of cases in the courts, particularly if the Bill passes unamended, there should be ample evidence on which to base a review after such a period.

Finally, Amendment 63FC requires any variation of an order to be made by an officer of the court directly employed by HM Courts and Tribunals Service rather than an employee of whichever private contractor that will no doubt be added to the lengthening list of private sector organisations taking over public services. In other words, if there is to be a variation, it should be done by an officer of the court for whom there is perhaps less incentive than for a private contractor to take a decision that might be prejudicial to the defendant.

I conclude by raising a point made by my honourable friend Andy Slaughter in the Public Bill Committee considering the Bill. He put an interesting question. If the Government are intent on proceeding with the charge, why will they not apply the proceeds—that £65 million or some other figure—to reducing the savage cuts in criminal legal aid which everyone, from criminal law practitioners to civil society organisations and the judiciary, is warning will have dire consequences for our criminal justice system? In the Opposition’s view, this is an unnecessary and unhealthy provision, but if it is going to be implemented, if a certain amount is to be collected, and if the Government are right in thinking that those sums will amount to around £65 million, that would be one-third of the entire cuts made in the legal aid budget. As this is a late and novel introduction, I cannot see why the Government should resist that conclusion if, against our advice and the advice of other organisations, they press ahead with this retrograde and ill-thought out change to our system. I beg to move.

[Lord Marks of Henley-on-Thames]

My Lords, I rise to speak to the group of amendments to Clause 42. As the noble Lord, Lord Beecham, has made clear, Clause 42 proposes the imposition of the criminal courts charge to cover the costs of providing the judiciary and the rest of the court system. Such a charge is proposed, as he has also made clear, to be compulsory for offenders of 18 and over unless the offence is of a class listed in regulations as excluded.

I have put my name to a number of amendments, along with my noble friends Lady Hamwee and Lady Linklater, and in some of those we are joining with those proposed by the noble Lords, Lord Beecham and Lord Kennedy of Southwark. Our principal purpose in those amendments is to ensure that the criminal courts charge is recoverable on a discretionary basis. I put that quite apart from the arguments about whether the sums sought to be recovered will in fact be recovered and I agree with the analysis of the noble Lord, Lord Beecham, that the Government’s expectation in this regard is entirely optimistic.

Quite simply, we can see no point in setting out a requirement that the criminal courts charge be imposed in cases where it will not do any good and is unlikely ever to be recovered. It will no doubt be argued by my noble friend the Minister that the power to remit the criminal courts charge under new Section 21E at a later date, some time after it is imposed, will provide an answer to the point we make. However, I am bound to say that I doubt it will. Will the Minister clarify what the Government see as the point of imposing a mandatory requirement that a defendant pay a charge and coupling that with a power to let the defendant off the charge if he cannot pay it? In many cases, the reality is that the inability to pay the charge in the first place is obvious throughout.

That really is the problem. In a very large number of cases, there is absolutely no prospect that the criminal courts charge will prove to be recoverable. We entirely accept that in those cases where a defendant can afford to pay the charge because he or she is in work or has means, then the court should be able to impose one. The courts charge in those circumstances would make it clear to the defendant that the public insist that the cost of providing the services of the court should be met, at least in part, by the defendant. That would have two salutary effects in those cases. First, the public would recover some of the costs that have been defrayed in order to bring and prosecute the case. Secondly, the court would be making it absolutely clear to the defendant what trouble, inconvenience and expense he has caused, and that he should pay for at least some of the extra costs.

However, as we all know and as was made absolutely clear in Committee, many offenders come before the court without work and means, beset by complex problems of inadequate education, physical and mental health, harsh and criminal backgrounds, dysfunctional families and, above all, a lack of employment opportunities. What such offenders need, as has again been repeatedly stated, is rehabilitation and support. Generally, we are all agreed in this House that where a custodial sentence is not absolutely necessary, rehabilitation and support should take place in the community. One of the cardinal aims of any rehabilitation programme should be to enable offenders to secure employment. Until they do so, there is no prospect of their being able to afford to pay the criminal courts charge.

I suggest that saddling all offenders, regardless of circumstances, with outstanding debt is a thoroughly bad idea. I am concerned that the existence of an outstanding charge will make it much more difficult for an offender to secure credit. That, in turn, may make it that much more difficult for him to secure employment. Even if it is only that he needs to buy suitable clothes for interviews or perhaps a bicycle or other transport to get to work, he will not be able to fund them. Furthermore, the fact that such an offender has a charge hanging over his head is likely to be a disincentive to his securing employment because he will know that the repayment of the charge will come from any income he may earn. Now, that may be a less meritorious argument but it is none the less valid for that.

It is also important that the court should have the discretion to set the charge at an appropriate level. There is no such discretion in the proposal made in the Bill. Where the court decides to impose one, it should be for the court to set the level of the charge. It should not be a one-size-fits-all penalty, any more than a fine should be. Plainly, there must be a maximum. That is appropriately defined in new Section 21C as,

“the relevant court costs reasonably attributable to a case of that class”.

However, to say that a charge in that maximum amount is the only charge that may be imposed is unhelpful and unrealistic. It is not sensible to rely on a power—again, at a later date—to remit a proportion, because that involves effectively indicating to a defendant that some of the charge will not have to be paid. The advice will be: “If you cannot pay it all don’t worry, pay what you can and you will be let off the rest”. That is hardly an incentive to pay. It would be far better for the courts to set a sensible and achievable figure at the outset.

Turning to our amendments therefore, we would make the charge entirely discretionary. Our Amendment 63ABA would make it clear that the court would have to consider the justice of the case, having regard to the circumstance of the offender and of the offence and, where appropriate, to the circumstances of any failure to comply with the requirements of a court order. That last point is necessary to deal with the fact that the charge may be imposed for failure to comply with the requirements of a community order or a suspended sentence order or with a supervision requirement.

Amendment 63AFA would leave out subsection (4) at the end of page 41. That subsection rather strangely requires a court to leave out of account a defendant’s liability to the criminal courts charge when considering the penalty,

“for an offence or for a failure to comply with a requirement”.

I see no reason for that provision. If a court regards it as being important to bring home to a defendant the extent of the costs he has caused to the system, why should it not be free to impose a criminal courts charge and lower any other financial penalty accordingly? That salutary discretion is specifically removed by the subsection, and we suggest that it should therefore go. Amendment 63AM would enable a charge lower than the maximum to be imposed, while Amendment 63AN is a tidying-up amendment that would enable the court not just to remit some of the charge, but to remit any interest on the charge when remitting it.

In summary, our position is that a criminal courts charge will be a useful new tool in the court’s armoury when sentencing, but we do not see it as sensible simply to tie it to the overall cost of the justice system. We do not see any reason for tying the court’s hands in such a manner as inevitably to reduce its power to do justice in ways that are not tailored to the individual cases before it.

20:46

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I shall speak to Amendments 63B to 63E, tabled in my name. The effect of these amendments would be to remove the requirement to delay remitting the criminal courts charges; in other words, magistrates could remit in the same breath as imposing the charge, although only if they were satisfied that that was in the interests of justice. It is a different method of achieving the same aims as those of the noble Lord, Lord Marks, and my noble friend Lord Beecham. As the noble Lord, Lord Marks, has said very clearly, what is the point of imposing court charges on people when it is plainly obvious that they will not be able to pay, and the court in any event has the power to remit the charges in the future?

I want to say a little more about the general principle of criminal courts charges. Magistrates’ courts, particularly those in London, very often deal with people who are poor and who have mental health problems and/or drug and alcohol problems. It is not that unusual to find defendants in front of one who have no national insurance number, no money, no benefits and no legal status within Britain. They come before the court for whatever reason has brought them there, and they are living off the kindness of friends with no recognisable status. It really is ridiculous for a court to be required to put a charge on these people in addition to the victim surcharge and other possible charges when there is absolutely no chance of them paying. It is already the case that one ranks the payments that are to be made. It is compensation which is discretionary so far as the courts are concerned. Compensation would be paid first, to be followed by prosecution costs, which are discretionary. Third in the rank would be the victim surcharge, which is non-discretionary, and then after that will come the courts charge, which is also non-discretionary. If defendants are made aware of the non-discretionary nature of the victim surcharge and the courts charge, poorer people could be more likely to plead guilty so that there are less extensive court charges, rather than going into a lengthy trial where there is an unpredictable but mandatory level of courts charge if they are found guilty.

I understand that there will be a three-year review period; I presume that one purpose of that review period is to look at whether there is any statistical basis for poor people being more likely to plead guilty. That is a very profound question, because it would be a consideration of some of the poorest people that we see in our courts today.

I will check one point with the noble Lord. I hope that I know the answer to it, but I wanted to check that it is open to the courts to deem the criminal courts charge served by time spent in custody—one day deemed served—in a similar way that that discretion exists regarding the victim surcharge. Therefore in that very specific way, with someone drunk and disorderly who has spent some time in the cells, you can deem both the victim surcharge and the criminal courts charge as served. I am not in favour of that in principle. My group of amendments try to restore finding a particular way to restore discretion to judges and magistrates so that they can deal with the reality of the situation they come across every day.

[Lord Kennedy of Southwark (Lab)]

My Lords, I will speak briefly from the Back Benches. I agree very much with the comments made by the noble Lord, Lord Marks, and my noble friend Lord Ponsonby. I was a magistrate many years ago. I do not sit any more, but when I lived in the Midlands I used to sit on the Coventry Bench. Again, like my noble friend Lord Ponsonby, there were times when people came in front of me who had absolutely nothing. In particular, I used to sit in the fines court, to which people were brought back because they had not paid their fines. When you looked at their circumstances, the only way they could pay those fines was to go out and commit more crime; it was impossible otherwise. Now we have an additional charge here. It is important that we take into account people’s circumstances: not to allow the court to have that discretion is a bad move. To have loads of fines when there is no possibility of their ever being paid back is a complete waste of time. It makes a mockery of justice, and we should not do it.

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

My Lords, the criminal courts charge scheme has been designed to be clear and transparent, with charge levels that reflect the costs reasonably attributable to a particular type of case, and offenders expected to pay at a rate they can afford. The changes proposed by these amendments make the scheme far more difficult to understand and apply.

Amendments 63AA, 63AD, 63AG, 63AJ to 63AL and 63ABA would provide the court with significant discretion over whether to impose the criminal courts charge. As the court is the main beneficiary of the charge, there is a risk that this would be perceived as providing the ability directly to influence the funding of the criminal courts. The judiciary is an integral part of the courts system, and it has a vested interest in its success. Furthermore, where there is no clear indication as to what the court should base its decision on, other than the broad definition of the imposition being “just and reasonable”, accepting these amendments risks offenders being treated unequally.

If what lies behind these amendments is to protect poorer offenders, this is unnecessary. The offender has the opportunity to provide means information that the court can take into account when setting the rate of repayment for the charge, as it does with court-ordered financial impositions. Offenders can manage their repayments so that they pay the charge at a rate they can afford. For instance, they can apply to pay by instalment, and if necessary request subsequently to vary the rate of repayment. Also, those offenders who make their best efforts to comply with payment terms and do not reoffend will be able to apply to have the charge cancelled after a specified period of time.

Amendment 63AB proposes to limit the charge imposed to no more than 50% of the total cost they have imposed on the courts.

Amendment 63AM enables the court to impose a charge up to the amount specified by the Lord Chancellor. If an offender has committed a crime and imposed a cost on our criminal justice system, the Government believe it is right that they should be liable to pay back up to the full amount of costs reasonably attributable to that particular class of case. I have already outlined the protections in place to avoid placing an offender in hardship as a result of the charge.

Amendments 63AC and 63AF seek to limit the circumstances in which the criminal courts charge would be imposed. Specifying that an order imposing the courts charge should not be made if doing so would, in the opinion of the court, affect a decision on plea is unnecessary. I can assure noble Lords that the courts charge will come into play only once a verdict has been reached—long after the defendant makes a decision about plea.

Amendment 63AF also provides that the courts charge must not be imposed where the enforcement costs are likely to amount to more than the value of the charge. The charge will be enforced in the same way as existing financial impositions, so it is unlikely that the costs would exceed the level of the charge. Furthermore, it would not be possible for the court to anticipate how much enforcement activity will be required in a particular case.

We believe that excluding from the charge any costs associated with part of the hearing for which the defendant was not responsible would be unworkable. Charge levels will be set up to the cost reasonably attributable to that type of case, not based on a costs calculation of each individual case. Attempting to cost each individual case and then determine whether or not the offender was responsible for each element would be extremely time-consuming and totally impracticable.

Amendment 63AF also seeks to prevent the courts charge being imposed in relation to any appeal. The principle behind our courts charging policy is that offenders should bear some of the costs that have been incurred by the criminal courts as a result of their actions. It is appropriate to charge offenders a contribution towards the cost of an unsuccessful appeal. Finally, the amendment inserts a condition that the courts charge cannot be imposed before a written means assessment has been carried out. Amendment 63AE also prevents it from being collected before an assessment of the defendant’s finances has been made. The criminal courts already impose a number of financial impositions and established systems are in place to ensure that the court is provided with an offender’s means information. For these reasons Amendments 63AF and 63AE are unnecessary.

Amendment 63AFA would allow the court to consider the court charge imposed when sentencing or dealing with breach of a community order, community requirement, suspended sentence order or supervision requirement. The scheme is designed so that the charge reflects the cost an offender imposes on the courts system. It is not a punishment that relates to the severity of the offence committed. It should not therefore be taken into account when deciding on the appropriate sentence.

Amendment 63AH would divide the payment of criminal court costs between defendants where two or more defendants are convicted during a single hearing. The Bill currently makes each offender liable to pay the criminal courts charge as prescribed in secondary legislation. We expect that each offender will pay the full amount, although the power will exist to charge multiple defendants less when they are convicted at the same time as others. The amendment creates unnecessary complexity and is likely to result in one offender, who has been tried with one or more co-defendants, paying less then an offender who has been tried on their own, despite the fact that they may have committed identical offences. This raises questions of fairness. Our approach is the fairest approach and should be both simpler to operate and simpler for offenders and the public to understand.

Amendments 63B, 63C, 63D and 63E seek to withdraw the conditions that must be met for the courts charge to be remitted and give the courts a wide discretion about doing so. As previously mentioned, the clause currently allows a court to remit the charge where the offender has taken all reasonable steps to pay and does not reoffend. This provides a powerful incentive for offenders to repay the charge and refrain from reoffending, while also ensuring that those who meet these conditions are not necessarily required to make payments over an excessively long period.

Amendment 63AN specifies that, where the charge can be remitted, it includes the remission of interest. The purpose of the provisions to remit the charge is to relieve the offender of the debt where they have paid accordingly and not reoffended. It is therefore logical that any remission of the charge should include the whole debt—both the principal amount and the interest. The amendment is therefore unnecessary.

Amendment 63EA has the effect that offenders aged 18 to 21 who are sentenced to detention or imprisonment would be eligible to have their charge remitted earlier. The current proposal is that a court may remit the charge after a specified period that begins either when an offender is convicted or, if they have received a custodial sentence, released from detention or imprisonment. In practice it is unrealistic to expect many offenders to pay the charge while they are being detained. By setting the period after which the charge may be remitted to run from conviction rather than release for 18 to 21 year-olds, the amendment would mean that more serious offenders are likely to end up paying less than offenders who are not sentenced to custody. That would not be fair.

21:00

As to reviewing after three years, Amendments 63FA and 63FB would make changes to the provisions for the review of the criminal courts charge. At present, Clause 43 requires the Lord Chancellor to carry out a review of the operation of the criminal courts charge three years after the provisions come into force. Amendment 63FA would reduce this from three years to 12 months. It is intended that the review will consider various aspects of how the policy is operating in practice, including an assessment of enforcement costs and direct income arising from the policy. However, in order to be able to consider these issues in a robust way, the review must be after a period that will allow the criminal courts charging provisions to bed in and produce reliable results. We would simply not be able to do so after 12 months.

Amendment 63 FB relates to the mechanism for the repeal of the criminal courts charge in response to the review of the charge. Should the Lord Chancellor consider it appropriate to repeal the criminal courts charge, there is a related power to deal with consequential and transitional matters. This amendment would oblige the Lord Chancellor to make such consequential and transitional provision. The duty to create such provision is not needed. It is important that we consider, in any repeal process, the consequential and transitional issues of doing so. This is a complex exercise and I can assure noble Lords that any Government exercising the repeal power would consider these matters carefully.

Amendment 63FC would prevent the power to vary an offender’s rate of repayment being exercised by anyone other than an officer of court directly employed by HMCTS. Fines officers already have powers to vary repayment rates for existing financial impositions prior to default. Clause 44 extends these powers to enable repayment rates to be varied after default and to vary on less favourable terms to the offender, with the offender’s consent. HMCTS is in the process of procuring an external provider for the future delivery of compliance and enforcement activity for criminal financial impositions. This would improve efficiency and the collection of financial impositions as well as reduce the cost of current service. A court will impose the obligation to make payments. Fines officers will simply apply collection measures to satisfy that obligation. It is not inappropriate for an external provider to use powers to vary the collection.

The noble Lord, Lord Beecham, asked various questions. He asked what proportion of the financial impositions is currently collected. Of the financial impositions imposed in quarter 2 of 2012, 58% were paid within 18 months of the imposition month and, of the fines imposed in quarter 2 of 2012, 54% were paid within 18 months of the imposition month. The noble Lord complained that there was no impact assessment. There is, in fact, an impact assessment, which has been published on the Bill’s website.

He asked a question about confiscation orders in relation to an earlier amendment, when I said that perhaps it was better to consider the matter when we were considering criminal charges. Confiscation is a key tool in depriving criminals of their access. The Government are committed to improving confiscation and taking steps to improve the confiscation regime in the Serious Crime Bill, as he may well be aware. That is the right place, we respectfully suggest, for a debate on these matters. There are, indeed, provisions in the Bill that strengthen the default system. We are planning, in due course, to allow confiscation orders to be made in the magistrates’ court for the first time. These matters are part of an overall serious and organised crime strategy.

The noble Lord, Lord Beecham, asked about Article 6 of the ECHR on access to the courts. We are satisfied that the criminal courts charge provisions are, in fact, compatible with the European Convention on Human Rights, Article 6 of which contains an implicit right of access to the courts. The charge would not interfere with that right in any way.

Preventing the use of the powers that these provisions contain would mean that offenders would have to face the consequences of defaulting on payment, which might include the use of bailiffs or a return to court to seek a variation, including additional costs for the court. We suggest that, notwithstanding the difficulties that are presented by those who do not have substantial means, as the noble Lords, Lord Kennedy, Lord Ponsonby and Lord Beecham, and my noble friend Lord Marks, mentioned, they are met by the various provisions that I have outlined to mitigate the harshness, and that the transparency and consistency of this provision is an advantage and should result in financial benefit accruing to the whole criminal justice system. I therefore ask the noble Lords not to press their amendments.

[Lord Ponsonby of Shulbrede]

I have a point that is slightly tangential to the group of amendments we have just been debating. When magistrates are fining somebody, for a huge proportion of the time they do not know the existing level of outstanding fines; so they are fining somebody when they do not know what debts to fines they already have. I understand that this is a practical problem and a difficult issue that the court service is reluctant to address. Surely, however, if one is serious about reducing the level of outstanding fines, one should try to address it so that when a court sets fines it knows the level of the outstanding fines when it puts in place the sentence.

[Lord Faulks]

It is certainly the case that the court should know, as far as possible, the level of outstanding fines. I understand the practical difficulties that can be encountered by courts but, with great respect to the noble Lord, we are concerned here with a definite, fixed cost in relation to the particular nature of the offence, which will not depend on fines outstanding. That is not a question—reasonable though it is—that arises on consideration of these amendments.

[Lord Beecham]

My Lords, I am struck by the direct relationship between the speed with which the Minister is racing through his brief and the embarrassment he no doubt feels at the material he is giving to the Committee. I cannot believe that the good and noble Lord is really convinced of the case he has been asked to put. That would not surprise me, because much of what we have heard is simply beyond credence. The noble Lord, Lord Marks, in a very powerful speech, made the essential point that—among other things—the court should have discretion on the amount. None of us is any the wiser about what kind of sums we are talking about. The Minister certainly has given no examples, except to say that it will be related somehow to the cost of the individual case. How is that to be calculated? On what basis will that be apportioned? Are we just talking about the cost of prosecution? That can be covered anyway, under the existing framework. Are we talking about a contribution to the cost of maintaining the court building or the cost of the judicial salaries in a higher court? There is no indication of how this cost is to be calculated and then passed on.

Equally, although the noble Lord rightly pointed out the provision in the Bill that the Lord Chancellor will prescribe the class of case to which the charge will apply, he has given no indication tonight—and I do not think that it was done in the other place either—of what kind of cases are envisaged. Why do we not know which cases are likely to be included? What will be the process, if any, for parliamentary approval of the classes as prescribed by the Lord Chancellor? Will Parliament be permitted any consideration in this, or will it simply be a matter of the Lord Chancellor’s fiat?

The Minister’s suggestion that it would be improper for the court to determine the amount because that would somehow reflect a vested interest on its part is simply risible. It is an absurd suggestion. The notion that magistrates or High Court judges will be influenced to make rather larger requirements of prisoners because that will somehow affect them, or the court system, is an insult to both the judiciary and the magistracy. It cannot be something that the noble Lord seriously believes. His scriptwriters need to go back to wherever they were taught their craft.

In addition, and worryingly, the Minister suggested that there is no deterrent effect because the charge will be imposed only long after a plea was entered. That is absurd. The fact that the court is in a position to impose a charge is known to the defendant before he appears there; it certainly ought to be. Of course, it may influence a defendant as to the nature of a plea, particularly in the case of an appeal.

[Lord Marks of Henley-on-Thames]

Is not the noble Lord slightly mistaken? It is the fact that the court is bound to impose the charge that is known to every defendant before they go into court.

[Lord Beecham]

I am not known for being mistaken, but I am happy to concur with the noble Lord’s judgment of me. However, I am not happy to concur with the Minister’s judgment of the situation because it is simply fallacious, particularly in relation to an appeal, when the costs will necessarily be significantly more than they would be at first hearing. Of course, appeals are not just confined to going from the magistrates’ courts to the Crown Court. There is also the question of an appeal from the Crown Court to the Court of Appeal and, I suppose, ultimately to the Supreme Court, the costs of which would presumably be unimaginable to an ordinary defendant.

In my view the Minister’s case is in tatters, but let me put a further point. If we are talking about the cost of the case and the cost to the courts, where is the logic in not extending that to the costs—I am now looking at the noble Lord, Lord Paddick—of the police force or the probation service, which might also be involved with a particular client? Why are we confining this charge to the court process? There is no logic to this at all.

We still do not know how the £65 million figure is computed. No doubt the Minister, in fairness to him, does not know either. I cannot imagine he has been supplied with the information. Even if that figure were right, it is something like 3% of the total amount outstanding. The noble Lord gave figures for the uncollected sums for two quarters of 2012. I think my figures were slightly more up to date, if they were correct. However, he did not answer the point—I do not blame him, because presumably nobody has told him—as to why the Ministry of Justice does not know how much has been outstanding for longer than 18 months. Is there an implication that, if money is outstanding for more than 18 months, it would be written off? That would be curious, in the circumstances. There is also the point that the charge will apply to those who are sentenced to a period of imprisonment, presumably to be met after they come out, no doubt as part of their rehabilitation. Does this make any kind of sense, I ask rhetorically? The Minister may think it does; there will be few in this House or outside who would agree.

Of all the misconceived and less than half-baked ideas we have seen in the Bill, this proposal must surely rank in the front line. It is simply appalling and I hope the Minister will use his long experience of these matters, as both an advocate and as a recorder, to persuade his ministerial colleagues, in particular the Lord Chancellor, that he is bringing the whole system into a serious collision with reality, one that will do no good to the defendants, to the court system, or, frankly, to the reputation of those who are putting forward these proposals. However, as we are in Committee, I will not press the matter tonight. It is very probably one to which I and others will wish to return on Report. I hope the Minister will use his influence with the Lord Chancellor to see that some significant changes, at the very least, are made to these appalling, deeply flawed proposals. I beg leave to withdraw the amendment.

Amendment 63AA withdrawn.

21:14

Amendments 63AB to 63EA not moved.

Clause 42 agreed.

Schedule 8: Further provision about criminal courts charge

Amendment 63F

Moved by

[Lord Faulks]

63F: Schedule 8, page 106, line 18, at end insert—
“Proceeds of Crime Act 2002 (c. 29)10A In section 13(3)(a) of the Proceeds of Crime Act 2002 (effect of order on court’s other powers), after “other than” insert “an order under section 21A of the Prosecution of Offences Act 1985 (criminal courts charge) or”.”

Amendment 63F agreed.

Schedule 8, as amended, agreed.

Clause 43: Duty to review criminal courts charge

Amendments 63FA and 63FB not moved.

Clause 43 agreed.

Clause 44: Variation of collection orders etc

Amendment 63FC not moved.

Clause 44 agreed.

Clause 45: Personal injury claims: cases of fundamental dishonesty

Amendment 63FD

Moved by

[Lord Hunt of Wirral]

63FD: Clause 45, page 46, line 17, leave out “fundamentally”

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interest as a practising solicitor and partner in the international law firm DAC Beachcroft and as chairman of the British Insurance Brokers’ Association, and I have other interests recorded in the register.

The “have a go” culture has infected our civil compensation system for far too long. Claimants—and it is always claimants—see that there is no real penalty for trying on either that they have been injured at all or a deliberate exaggeration of the symptoms that they have suffered. The advertising by claims farmers and solicitors has undoubtedly played a part in this. The adverts for personal injury and for financial mis-selling continue to give the impression of free money. The starkest example that I can immediately recall was a full-page advert last November showing simply a bundle of £50 notes done up in Christmas ribbon. We all recall those original adverts saying, “Where there’s blame, there’s a claim, and it won’t cost you a penny”.

That is why I welcome Clause 45 as part of the Government’s initiative to tackle this. I certainly support its introduction. Measures are, of course, already available to tackle the completely fabricated claim, but I fully support the idea that a claimant with a genuine claim who then dishonestly exaggerates it should put their whole case at risk. That, after all, is what would happen if one was unwise enough to put in a consciously exaggerated claim to one’s own insurance company. Why should it be any different if one proceeds with the same intent against another person’s insurance company?

I would like to hear more from the Minister on the choice of the phrase, “fundamentally dishonest”. I recognise that my noble friend has great experience of the English language, and I should declare an interest as having been for six years chairman of the English-Speaking Union, but, with due respect for his grasp of the English language, it seems to me that dishonesty is one of those absolute concepts: either you are dishonest or you are not, in the same way that you cannot refer to something as “very unique” or to someone as “slightly pregnant”. I know that a similar phrase was used in the Civil Procedure Rules following the seminal—perhaps I should now call it the “fundamentally seminal”—review by Lord Justice Jackson of civil legal costs, but I am not aware that it has been tested or scrutinised by the Appeal Courts as yet. I would welcome clarification from the Minister about the thinking behind the choice of this phrase.

I have received, no doubt like other noble Lords, material from those representing claimant personal injury lawyers who have expressed concern that this measure might go too far. I cannot agree with that. If a claim is brought which contains a dishonest element—and dishonest always means that there is proof of a deliberate intent to deceive—then that behaviour should rightly put the whole claim at risk. The effect of this clause is clearly a deterrent one which, as I have already explained, I strongly welcome.

It might be helpful to point out to noble Lords that Clause 45 is not unique—not even slightly unique—because an analogous provision can be found in Ireland, in Section 26 of its Civil Liability and Courts Act 2004. There, any plaintiff, as they are still called in Ireland, who knowingly gives false or misleading evidence will find their claim dismissed in total. The test is simply one of dishonesty rather than fundamental dishonesty. If there is a fear that the power in Clause 45 would be abused by overzealous defendants, the experience of more than 10 years in Ireland proves otherwise: the courts are alert to any attempts to abuse a provision that is expected to apply in only a small number of cases, and of course if the clause truly has a deterrent effect, it should mean fewer cases coming to court in the first place.

Let me finish by illustrating the concern over “fundamentally dishonest” with a stark example that was recently brought to my attention. It was a case tried in Stoke-on-Trent County Court earlier this year. Mr Steven Cotton is a 31 year-old heating engineer who now lives in Swadlincote, Derbyshire. In December 2008, he sustained an injury to his neck and shoulder while at work. It was frankly a modest injury and he was able to go back to work the following month, in January 2009, before a disciplinary matter at work intervened. At that point, he decided to bring a claim against his employers and to include in that claim an allegation of a lower-back injury. Matters progressed and, just a few months before trial, he put in a claim schedule for in excess of £1 million, despite his solicitors, Woolliscrofts in Stoke, being aware of video surveillance evidence showing Mr Cotton as being much less disabled than he was making out. I understand that the insurers facing this claim, AXA Insurance, were not impressed. They rightly defended the case to trial and the judge agreed that Mr Cotton had invented the lower-back injury as a deliberate exaggeration of his genuine neck and shoulder injury. The judge awarded Mr Cotton just over £18,000 for the genuine injury, which was less than 2% of the amount that he had falsely claimed, plus some of his solicitor’s costs. One might think that this degree of exaggeration would be enough to knock out the entire claim but, sadly, it was not so. On the one hand, Mr Cotton’s case is a classic example of why the clause is badly needed. On the other hand, it raises a question in my mind as to whether the addition of a second injury to an already genuine injury would be seen by the courts as fundamentally dishonest. The court in Stoke stopped short of declaring that Mr Cotton’s lower back injury was not a genuine medical condition, despite the surveillance evidence. I have a real fear that Mr Cotton might still be awarded damages after the new clause comes in when all right-thinking people would agree that someone whose claim had already been knocked out to the extent of 98% not being allowed should not receive a penny.

I turn to the second amendment in my name: Amendment 63FE. To me, the meaning of subsection (5) of Clause 45 is unclear. Subsections (2) and (4), for example, impose obligations on the court to follow a particular line of conduct by use of the word “must”. In contrast, subsection (5) is different in tone and appears to offer more leeway. I hate once again to split linguistic hairs with the Minister, but I would like some clarification on whether subsection (5) is really intended to be a discretionary “may”. I reassure noble Lords that there is some substance behind the point I seek to make. Subsection (5) appears to limit the legal costs consequences of a claim being dismissed in its entirety under the clause by restricting the costs award that could be made to the defendant to a sum net of the damages that would have been awarded to the claimant if he had pursued an honest claim. I wonder whether there is even a risk that subsection (5) simply undoes the good work of the rest of the clause. The dishonest claimant who is found out ends up paying his opponent’s cost but is able to offset the money he has forfeited by his dishonesty. To return to the example of Mr Cotton, he would still, in effect, get credit for the £18,000 awarded for his genuine injury. Does that not encourage the likes of Mr Cotton to have a go at the expense of insurers, which is where I was when I started? I beg to move.

[Lord Marks of Henley-on-Thames]

My Lords, I rise to speak to Amendments 63FDA to 63FFA. I do so with some diffidence because, in part, I disagree with my noble friend Lord Hunt. After the humorous and intelligent way in which he introduced his amendment, and given that I agree with a great deal of the sentiment he expresses, I am concerned about the extent to which I disagree with him.

I agree with my noble friend that there has been a culture of “going for it”. There has been an outbreak of “compensation-itis” that we no doubt acquired, in part, from the United States and which has bitten particularly deep into the culture of people who have had motoring accidents. I greatly agree that something needs to be done. The question is whether the clause does what needs to be done in the way it needs to be done.

As my noble friend explained, Clause 45 deals with claims for damages in personal injury cases where the claimant is guilty of fundamental dishonesty in the prosecution of his claim. Clause 45(2) provides that,

“The court must dismiss the primary claim”—

that is, the claim for damages—

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”.

The question I seek to pose is how far subsection (2) would leave judges free to do justice.

In my view, the subsection works against the interests of justice, or certainly risks doing so, in two ways. The first is by imposing a presumption in favour of dismissal, subject to a modest saving provision that, frankly, is difficult to understand. I am not sure I agree with my noble friend Lord Hunt that the word “fundamentally” adds nothing, but I certainly am of the view that the saving subsection,

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”,

is very difficult to understand. On one view of justice, and the view of justice which appears to be intended by the proponents of the clause, if there is dishonesty, it is not unjust for the whole claim to go. If that is the meaning, how does the saving provision come in at all? If, on the other hand, it means that the interests of justice seem broadly to require the claimant still to get some of his damages, does that amount to a duty to dismiss or is it merely a power to dismiss, which is what my amendments are directed to?

21:30

The second area where I believe there is a risk that justice will not be done is that the clause as it stands allows for no middle course—no way of allowing a judge to reduce the damages rather than dismiss the claim, where a reduction in damages is really what is required to do justice between the parties.

I am not sure whether my next point constitutes a declarable interest, but it is in the register. Over the years, I have conducted many personal injury claims on both sides—for claimants and for defendants. In more recent years, some of those have been very substantial indeed. Regrettably, many of those claims are marked by dishonesty. Such dishonesty can arise from relatively minor exaggeration, such as happens in any number of insurance claims in the experience of all of us. However, it can range to entirely fraudulent claims, where whole elements of the claim are simply made up or fabricated by the claimant.

I suspect that the word “fundamentally” is intended by the drafters of the clause to limit the provision to those cases where the dishonesty goes to the heart of the whole claim, or certainly to a very important element of it. I agree with my noble friend Lord Hunt that it is difficult to see exactly what it means, although it cannot refer to aspects of dishonesty that are on the margins and refer only to exaggeration. He is right technically to say that being dishonest is dishonesty; it is attempting to obtain money to which the claimant is not entitled. However, if that refers to making out a claim for five bus fares when one bus fare was, in fact, incurred, is that enough to tell the judge he should allow for not just no bus fares but no damages at all to a seriously injured claimant?

I have long believed that judges are presently far too limited in what they can do to reflect dishonesty in disallowing dishonest claims. It is right to consider what they can do. They can reflect the dishonesty, of course, by cutting out the dishonest part of the claim. They can also reflect the dishonesty in their award of costs by disallowing costs to the claimant on certain issues and allowing costs to the defendant—indeed, in a serious case, allowing all the costs to the defendant. Occasionally, a judge might send the papers to the Crown Prosecution Service or the Director of Public Prosecutions for him to consider prosecution for perjury, but in practice, as anyone who practises in this field well knows, prosecutions for perjury arising out of this sort of case are very unusual indeed.

I believe that judges should have the power to disallow claims, just as the clause proposes. However, I believe that should be a discretionary power of the courts and that there should be no presumption one way or another. The exercise of the power should be governed by the overriding objective of dealing with cases justly, which was introduced into the Civil Procedure Rules proposed by the noble and learned Lord, Lord Woolf. I submit that that is a proper and sensible way of approaching this. I also believe that the courts ought to have the power to reduce an award of damages not merely relative to the area where there has been dishonesty but, if necessary, relative to the whole case, so that they can disallow a dishonest claim and parts of the rest of the claim if they wish.

There may be many cases where dishonesty in presentation is so significant in relation to the whole claim as to make it just to dismiss the lot, but there should be no general rule to that effect. I put before the Committee the hypothetical example of a middle-aged middle manager who is severely injured in a road accident which renders him tetraplegic. He has 10 years left or thereabouts of his working life. He therefore has a claim for loss of earnings of about £500,000. However, he has a whole life claim for full-time residential care of, say, £4 million. He has a claim for medical help, for adjusted housing and for incidentals of about another £1 million. He has a claim for general damages for pain, suffering and loss of amenity of about £200,000 to £250,000. All in all, his claim is worth about £6 million. This claimant, in a way that is fundamentally dishonest, suppresses the fact that a week before the accident he had received notice that he was to be made redundant. He is unlikely, because of his age and limited skills, to get any further work. His loss of earnings claim, far from being worth £500,000, is worth a residual £20,000 to £30,000 at most. Is that fundamental dishonesty? Of course it is.

What would the outcome be under Clause 45? It may well be that somebody could say that that is so dishonest that it would not offend against justice for the claim to be dismissed. Furthermore, the saving provision requires the claimant to suffer “substantial injustice”. However, in the example that I have given, the National Health Service would be given the task of caring for the claimant, while social services would be meeting a lot of his social service needs, such as his adjusted housing and so forth and the care needs that he may have at home. The people who would be let off the claim if Clause 45 was applied would be the defendant’s insurers, and the public purse would bear the cost of that. It is not the claimant who suffers the substantial injustice in that case, so Clause 45 would be applied and the whole claim dismissed. However, I suggest that most judges and most lawyers would think that the right result would be that his general damages should be removed and that his loss of earnings claim should of course fall. The defendant’s insurers would nevertheless be left with the cost of his care claim and his medical claim—he is, after all, a tetraplegic.

I agree with my noble friend Lord Hunt on his other amendment, Amendment 63FE, that subsection (5) lacks sense. I would be tougher and suggest that the Committee invite the Government to be tougher than the proposers of the clause. As my noble friend Lord Hunt rightly pointed out, subsection (5) would give a dishonest claimant credit for the damages he had forfeited against the costs that he would otherwise have to pay the defendant. I simply do not agree that there is any reason for that. To take an example of a small claim, where he would have got £10,000 for an injury that has been exaggerated, under subsection (4) that sum of £10,000 would be recorded but his claim would be dismissed. The costs he ought to pay to the defendant come to, say, £30,000. Under subsection (5), he would only have to pay £20,000. Why, in a case where a dishonest claim is dismissed, he should get credit for the damages that he has forfeited, I cannot tell. The only answer I can think of is that the defendant would not have to pay the £10,000, but the claimant might not have brought that claim for £10,000 anyway so the defendant would not have to pay it.

Finally, Amendment 63FG, which is the amendment in the names of the noble Lords, Lord Beecham and Lord Kennedy of Southwark, effectively reverses the point so that if a defendant is dishonest, the defence will be struck out and judgment will be entered. There is a difficulty about that. It is superficially attractive because it proceeds on the basis that what is sauce for the goose is sauce for the gander. However, unless the amendment goes only to the defence on liability, it is bound to be wrong because the judgment that should follow is a judgment only for damages to be assessed. It cannot be right that the defendant cannot put forward a counterschedule of damages, and that the claimant will get a windfall in damages of an amount to which he cannot possibly be entitled, because of the fact that the defendant is precluded from defending the claim. While I see the attraction of the way that the noble Lords have put it, I would not support that amendment.

[Lord Beecham (Lab)]

My Lords, I find myself not for the first time playing Spencer to the noble Lord, Lord Marks. We are almost ad idem on most of this evening’s discussions.

Clause 45 contains yet another mandatory instruction to the courts. On this occasion, as we have heard, it relates to findings of “fundamental dishonesty”. The noble Lord, Lord Hunt, raised some semantic issues about the terminology. I am personally rather anti-semantic but there is a possible interpretation of the phrase so that it is the effect of the dishonesty being fundamental to the claim, I think, rather than the nature of the dishonesty. As the noble Lord pointed out, the phrase is used in the Civil Procedure Rules. However, we need not worry particularly about the precise terminology. The problem is that if,

“on the balance of probabilities”,

such a finding is made, the court has to strike out the claim unless, as we have heard,

“the claimant would suffer substantial injustice”,

whatever that purports to mean.

Amendment 63FG seeks, as the noble Lord, Lord Marks, pointed out, to even up the balance by putting the defendants in the same position as a dishonest claimant, such that the defence would be struck out. It would certainly be legitimate to apply that to the issue of liability. Frankly, if the Government were to insist upon the full operation of their proposals in terms of the quantum issues, it would not be unjust to apply the same principle to the defendants. That is perhaps a debatable point.

However, I want to explore generally the issues a bit more widely as they have been discussed before this evening by the noble Lords, Lord Hunt and Lord Marks. Certainly there are in my mind a number of questions about Clause 45, which is clearly another example of the Government’s Pavlovian reaction to pressure from their friends in the insurance industry, this time including the noble Lord, Lord Hunt. I am not criticising the noble Lord, who perfectly properly declares an interest, but I am saying that the Government—particularly the Conservative Party—do rather seem to be beholden to the interests of the insurance industry, which is one of their more prominent supporters. I am not suggesting for a moment that the noble Lord is in any way to be criticised personally for that. However, it is a matter of fact that—

21:44

[Lord Faulks]

Is the noble Lord suggesting that in order to bring in a provision saying that one cannot recover damages if one is fundamentally dishonest, that is simply serving the interests of the insurance industry?

[Lord Beecham]

Of course it is not simply serving the interests of the insurance industry, but it is serving its interests and there is no reason why the insurance industry should not lobby to that effect. But let us not be unrealistic. I repeat that it is perfectly proper for the noble Lord to make his case, and I have no criticism of him whatever. My criticism is of the Government. In any event, there are a number of questions about the situation, as created by the Bill.

First, why single out personal injury claims? There are many damages claims to which such a provision might apply. There are claims, for example, of breach of contract over the supply of goods or services, damages to property or professional negligence. Indeed, paradoxically or ironically, the driver of a car might be caught by this provision in respect of a personal injury claim arising out of an accident but not if he claims only for damages to the vehicle. Where is the logic in that? In fairness to the noble Lord, he quoted an example of a potential for a claim other than a personal injury claim. But that is not what the Bill says; it concentrates purely on the aspect of personal injuries.

The second question is why, particularly given the drastic consequences, should the balance of probabilities test apply only to something that after all amounts to fraud, and is capable, as pointed out by the noble Lord, Lord Marks, of being prosecuted? In that event, it should be prosecuted if it is committed, but a different standard of proof would apply to the treatment of the conduct, deplorable as it is, in a civil claim as opposed to a criminal claim. As we have also heard, claimants, in addition to the possibility of prosecution, which would be amply justified, could face contempt of court proceedings in which again the applicant for the contempt case must prove fraud beyond reasonable doubt. I do not think that different standards of proof should apply to the same conduct in this context.

The third question is on why the entire claim should be struck out instead of judicial discretion being exercised to reduce damages or penalise the claimant in costs. The noble Lord, Lord Marks, has dealt very effectively with an example in which that situation might occur. The fourth question is whether the Government have considered the impact on third parties, notably the National Health Service, which in personal injury claims can recover treatment costs from the person causing the injury. Again, the noble Lord, Lord Marks, was ahead of me, not for the first time, and was quite right to say that if the defendant escapes scot-free because of some misconduct on the part of the claimant in relation to part of his claim, it is the health service—and the taxpayer generally—that will suffer.

The fifth question is: what is meant by fundamental dishonesty? The CPR, as the noble Lord, Lord Hunt, pointed out, coined the phrase in relation to qualified one-way cost shifting when a party loses the protection of QOCS if he has been found to have behaved in this way. However, as far as I am aware, there has been only one unreported case. It may be the case to which the noble Lord referred; it rings a bell. I think it was the case of Cotton. That is the only one that has so far come to light since the provision came in. I assume that the Minister will confirm that the Bill’s provisions have the same meaning, as far as that is ascertainable, as the Civil Procedure Rules.

The sixth question is: yet again, why are the Government seeking to fetter judicial discretion? This is one of the most fundamental points. In Fairclough Homes Ltd v Summers in 2012, the noble and learned Lord, Lord Clarke, said:

“It is for the court, not parliament to protect the court’s process. The power to strike out is not a power to punish but to protect the court’s process”

The Supreme Court said that its already existing power to strike out,

“should be exercised where it is just and proportionate to do so which is likely to be only in very exceptional circumstances”.

The court referred to other ways of punishing fraudulent claimants in costs, criminal or contempt proceedings.

Let me be clear: the Opposition are not in favour of tolerating, let alone encouraging, fraudulent claims whether or not the fundamental dishonesty applies to the whole claim or any part of it. To that extent, all of us who have spoken tonight—the noble Lords, Lord Hunt and Lord Marks, myself and no doubt the Minister are absolutely agreed. But the Opposition are content to allow the courts to deal with any abuse, both in determining the issues of damages and costs and in pursuing criminal proceedings when they are appropriate, and would regard that as applicable to all kinds of claims, not just personal injury claims. That would be illogical, in my submission. The Minister may wish to take that back as a matter to consider. I do not see why personal injury claims should be singled out for this particular treatment.

There is certainly a need to deal with people who abuse the system, but in my submission what is proposed here goes too far and leaves too little discretion to the courts, which are really capable of dealing with it. I beg to move.

[Lord Faulks]

My Lords, I am grateful for the contributions of all noble Lords to this useful discussion of Clause 45. Until the conclusion of the remarks of the noble Lord, Lord Beecham, I was beginning to wonder whether he thought that there should be any problem with people grossly exaggerating or being fundamentally dishonest in pursuing their personal injury claims. However, by the end I realised that the party opposite is not in favour of that, although he asked why we singled out personal injury claims.

The answer to the noble Lord’s question was provided very elegantly by my noble friend Lord Hunt. There has been—and the Government seek to address this by this clause—an epidemic of people claiming in circumstances that most right-thinking people would find deeply unattractive. The Supreme Court recently in the case of Fairclough had to deal with this particular issue, which the Government seek to address in Clause 45. So it is a particular problem that is troubling most people in society generally, with the so-called compensation culture, but also with a specific problem that has come before the courts. We suggest that it is entirely appropriate for the Government to endeavour to address this difficult problem; indeed, the Supreme Court found it difficult to find a satisfactory answer.

I am grateful for some of the constructive suggestions that have been made about how the clause ought best to have been drafted. At the moment, it requires the court to dismiss in its entirety any personal injury claim when it is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest, unless it would cause substantial injustice to the claimant to do so. That is of particular relevance when the claimant has grossly exaggerated his claim, and in cases where the claimant has colluded with another person in a fraudulent claim relating to the same incident—also, sadly, a far too common feature of the whole claims industry at the moment.

This is part of a series of measures taken by the Government to discourage fraudulent and exaggerated claims, which arise often in motor accident cases and so-called “trips and slips” claims. Such claims cause substantial harm to society as a whole, not least in increasing the insurance premiums that motorists have to pay. I notice that the noble Lord criticised the Government; I think that the inference was that they were in some way in league with the insurance industry. We are talking here about insurance premiums paid by members of the public. These cases also eat up valuable resources of local and public authorities and employers, which could otherwise be used for the benefit of business and in providing services to the public.

Under the current law, the courts have discretion to dismiss a claim in cases of dishonesty, but will do so only in very exceptional circumstances, and will generally still award the claimant compensation in relation to the “genuine” element of the claim. The Government simply do not believe that people who behave in a fundamentally dishonest way—and I will come to address the adverb in a moment—by grossly exaggerating their own claim or colluding should be allowed to benefit by getting compensation in spite of their deceit. Clause 45 seeks to strengthen the law so that dismissal of the entire claim should become the norm in such cases. However, at the same time, it recognises that the dismissal of the claim will not always be appropriate and gives the court the discretion not to do so where it would cause substantial injustice to the claimant. To that extent, some of the remarks of my noble friend Lord Marks were entirely apposite. The clause gives the court some flexibility to ensure that the provision is applied fairly and proportionately.

The amendments tabled by my noble friend Lord Marks and others would considerably weaken the effect of the clause by simply giving the court a wide discretion were it satisfied that the claimant had been fundamentally dishonest, which would enable it to either dismiss the claim, reduce the amount of damages or to do neither. That would make it much less likely that those provisions would be used, even in cases where the claimant has clearly been fundamentally dishonest. I do not believe that that would be appropriate. We do not believe that people who behave in a fundamentally dishonest way should be able to benefit by getting compensation regardless.

I assure the Committee that the way that the clause is drafted should not result in the courts using the measures lightly. Civil courts do not make findings of dishonesty lightly in any event; clear evidence is required. The sanction imposed by the clause—the denial of compensation to which the claimant would otherwise be entitled—is a serious one and will be imposed only where the dishonesty is fundamental; that is, where it goes to the heart of the claim. That was very much what my noble friend said about what it was aimed at.

Of course, “fundamental” has an echo in the Civil Procedure Rules and the qualified, one-way costs shifting. An adverb to qualify a concept such as dishonesty is not linguistically attractive, but if we ask a jury to decide a question such as dishonesty, or ask a judge to decide whether someone has been fundamentally dishonest, it is well within the capacity of any judge. They will know exactly what the clause is aimed at—not the minor inaccuracy about bus fares or the like, but something that goes to the heart. I do not suggest that it wins many prizes for elegance, but it sends the right message to the judge.

The amendments tabled by my noble friend Lord Hunt, who has enormous experience in this area, reflect the fact that in his view, any degree of dishonesty, unless the court is satisfied that dismissal would cause substantial injustice to the claimant, would be sufficient. It is a difficult balancing act, but we do not believe that that would be proportionate or practical. The sanction imposed by the clause is a serious one—denial of compensation to which prima facie somebody is entitled—and we believe that it should be imposed only where it goes to the heart of a claim. It would be disproportionate to require a claim to be dismissed in its entirety. It would also not be practical as it would be likely to lead to a large number of disputes between the parties over whether the claimant had or had not dishonestly exaggerated the claim. There is potential for it to impede settlements, leading to an increase in contested litigation.

My noble friend is quite right; the Government hope it will act significantly to deter people from bringing claims or exaggerating in any way at all. The fact that there may not be many reported cases about fundamental dishonesty and the QOCS scenario may be an indication that the concept does not engender great difficulties for judges applying it in practice, and therefore, there is no need for reported cases.

It should not be forgotten that the courts still have powers available—for example, the awards of costs to penalise claimants whose behaviour falls short of financial dishonesty—if it considers the sanction is merited. We consider that the courts will be able to apply the test. In addition, supplementary provisions are included to ensure that the sanctions imposed on the claimant are proportionate. Subsections (6) and (7) ensure that in the event of subsequent proceedings against the claimant for contempt or criminal prosecution, the court has a full picture of the consequences of the dishonest conduct for the claimant when deciding what punishment to impose.

Subsection (5) ensures that when a court dismisses a claim under this clause, it can award costs against the claimant only to the extent that these exceed the damages that would otherwise have been awarded. I thought that I understood what that meant, but I hear what my noble friend says about it, and what my noble friend Lord Marks says about it, and if it is not as clear as it might be I will take that back to consider the drafting before Report. The intention is to limit the extent. We think that that is what it says, but I will definitely take that back and consider it.

22:00

As to Amendment 63FE, this would delete it. We do not for the moment think that that is appropriate, subject to amendment.

Amendment 63FG, tabled by the noble Lords, Lord Beecham and Lord Kennedy, seeks to apply a similar provision to defendants who are fundamentally dishonest. Unfortunately, we believe that this amendment is fundamentally misconceived. The clause focuses on the denial of damages to claimants who behave in a fundamentally dishonest way. Where a defendant brings a counterclaim for damages, the clause will apply to that counterclaim. However, damages are not otherwise awarded to defendants. They are not in an equivalent position. A defence which has no merit can be struck out, and there are a number of ways in which a defendant who behaves dishonestly can be penalised—for example, through an adverse costs order or through action for contempt or fraud. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, who has had considerable historic exposure to personal injury claims, indicated at Second Reading that there is,

“no possible logic in suggesting that this provision should … be mirrored in regard to the defendant’s conduct of their defence”.—[Official Report, 30/6/14; col. 1589.]

Therefore I am afraid that we are unable to accept the amendment.

Subject to the possible improvement of the drafting in relation to subsection (5), we believe that this clause adopts a fair, measured and proportionate approach to a difficult problem. We believe that it will send a strong message to deter dishonest behaviour and give a greater incentive to defendants and insurers to investigate and challenge dubious claims. One of the problems is that defendants are often not incentivised to investigate claims properly and pay them out far too easily. I therefore hope that the noble Lords will be prepared not to press their amendments, and I beg to move that Clause 45 stand part of the Bill.

[Lord Hunt of Wirral]

My Lords, I thank my noble friend the Minister, in particular for his generous tribute to the way in which I introduced the amendment. However, I am gravely disappointed by the reaction of the noble Lord, Lord Beecham, whom I have always felt to be my noble friend, in seeking to categorise me in some way. Perhaps I should have declared an interest as a solicitor for many years for the Transport and General Workers’ Union, acting in many claims. Perhaps I should have declared an interest as acting for the child most seriously damaged by the thalidomide drug, in a lengthy court action against Distillers. Perhaps it is all my fault that he should have categorised me in the way that he did—but I regret it.

As to my noble friend Lord Marks, I think that we are more or less in agreement, and I thank him for what he said. All I would say is that I do not think that we should have just a discretionary power because, as my noble friend the Minister just said, we all surely want to combine to send a strong message from this House that dishonesty must never pay. That is the purpose behind this.

I say to the noble Lord, Lord Beecham, whom I still regard as my noble friend, that he ought to have a word with Mr Jack Straw, who has been fighting hard on behalf of genuine claimants and seeking to eradicate this tendency to exaggerate claims and to make us the whiplash capital of Europe.

I think that the Government are taking a step in the right direction. I am very grateful to the Minister for agreeing to look at certain aspects again. In the light of that, I beg leave to withdraw the amendment.

[Lord Beecham]

My Lords, I have clearly upset the noble Lord. It certainly was not my intention to do so. We have a very long association, going back to the time when we were involved in the inner city partnership in Newcastle. We have always got on very well. I intended no imputation whatever upon the noble Lord. I do think that the insurance industry, as an industry, has been overpersuasive with the present Administration, in particular with the Conservative Party.

However, that is no reflection on the noble Lord. I made it clear that he has behaved with complete propriety, as he always has. I am sorry if I have upset him; I can say no more than that. I apologise if that has been the effect—it was certainly not intended. I look forward to engaging in civilised conflict with him from time to time over this and other measures in the spirit that we have enjoyed hitherto. I certainly would not like him to leave the Chamber tonight feeling that I have cast any slur or imputation upon him. He is widely recognised as extremely able and a man who has devoted a great part of his life to public service. I would not wish in any way to detract from his record or his sincerity.

[Lord Faulks]

I want to ask the noble Lord about that comment. He redirected his fire at the Government and said they had been improperly influenced by the insurance industry. Perhaps he can assist the Committee as to the basis of that allegation and how it is relevant to the amendment that the Committee has before it tonight.

[Lord Beecham]

I was trying to say that the Government have frequently changed the law in relation to claims, not just with regard to tonight’s amendment but on a range of issues in a way that adversely affects claimants and generally favours insurers. Whenever the Labour Party makes a proposition that affects working people and trade unions, it is accused of being in the pockets of trade union leaders, dancing to Len McCluskey’s tune. If that is a legitimate comment for the Conservative Party to make about the Labour Party, it is quite legitimate for us to point to some of those industries—not just the insurance industry; there are others—that seem to be willing to fund the Conservative Party, whether or not that involve tennis matches with the Prime Minister.

Amendment A63FD withdrawn.

Amendments 63FDA to 63FG not moved.

Clause 45 agreed.

Amendment 64

Moved by

[Lord Faulks]

64: After Clause 45, insert the following new Clause—
“Rules against inducements to make personal injury claims
(1) A regulated person is in breach of this section if—
(a) the regulated person offers another person a benefit,(b) the offer of the benefit is an inducement to make a claim in civil proceedings for—(i) damages for personal injury or death, or(ii) damages arising out of circumstances involving personal injury or death, and(c) the benefit is not related to the provision of legal services in connection with the claim.(2) An offer of a benefit by a regulated person to another person is an inducement to make a claim if the offer of the benefit—
(a) is intended to encourage the person to make a claim or to seek advice from a regulated person with a view to making a claim, or (b) is likely to have the effect of encouraging the person to do so.(3) A benefit offered by a regulated person may be an inducement to make a claim regardless of—
(a) when or by what means the offer is made,(b) whether the receipt of the benefit pursuant to the offer is subject to conditions,(c) when the benefit may be received pursuant to the offer, or(d) whether the benefit may be received by the person to whom the offer is made or by a third party.(4) The Lord Chancellor may by regulations make provision as to the circumstances in which a benefit offered by a regulated person is related to the provision of legal services in connection with a claim, including provision about benefits relating to—
(a) fees to be charged in respect of the legal services,(b) expenses which are or would be necessarily incurred in connection with the claim, or(c) insurance to cover legal costs and expenses in connection with the claim.”

[Lord Faulks]

My Lords, this measure complements significant reforms that the Government have already introduced to control the costs of civil litigation. In particular, it is part of our focus on discouraging fraudulent and grossly exaggerated personal injury claims, as is Clause 45 on fundamentally dishonest claims. In all this work, our intention has been to allow appropriate personal injury claims to proceed at proportionate cost. However, we are determined to root out the disproportionately high costs and frankly unacceptable behaviour that has tainted the personal injury world in recent years.

These clauses address the practice of offering inducements to bring personal injury claims. There are many examples of lawyers offering potential clients money or items such as tablet computers for pursuing a personal injury claim. One recent advertisement read:

“If you bring a successful claim”—

to X Solicitors—

“you will be eligible for a free iPad. We believe in thanking those who entrust us with their claim, and as well as providing clients with a professional legal service, we hope a complimentary iPad can make things easier for you after your accident”.

Another stated:

“On acceptance of your case we will pay you £250 as an upfront ‘welcome’ payment. This payment is on top of your eventual compensation payment”.

Such incentives contribute to the so-called compensation culture by offering rewards for bringing a claim, regardless of its merits. Expenditure on these inducements might also have a detrimental effect on the quality of service provided to the client. Furthermore, in a significant number of cases, the client is then denied the money or benefit initially offered because of terms and conditions. This practice has no doubt developed because of the excessive legal costs in personal injury cases which have already been addressed by our reforms in Part 2 of the LASPO Act 2012, but it is a practice that we need to stop to protect consumers and, indeed, the reputation of the legal profession more widely. We are grateful for the cross-industry support for introducing a ban on the offer of such inducements; reputable lawyers recognise the harm that this does to their profession. The House of Commons Transport Committee has also recently endorsed a ban.

Consequently, these clauses prohibit legal services providers from offering monetary and non-monetary benefits to potential clients as an incentive to make a personal injury claim. They define what is considered to be an inducement and require regulators to monitor and enforce the ban, as breaches of the ban will not be considered as a criminal offence.

Amendment 87 amends the extent provisions in the Bill to make clear that those provisions apply only to England and Wales.

As to Amendment 64A, I thank my noble friend Lord Hunt of Wirral for bringing this issue to my attention. I know that he has a long-standing constructive interest in making sure that the Government get the drafting right on this kind of issue. I am extremely grateful for that. I will ask officials to consider the matter carefully during the Recess with a view to returning to it at a later stage.

Subject to that point, we believe that the new government clauses are a proportionate response to what has been a thoroughly bad practice. I beg to move.

Amendment 64A (to Amendment 64)

Tabled by

[Lord Hunt of Wirral]

64A: After Clause 45, line 24, after “party” insert “, or
(e) whether the benefit is offered by the regulated person or by a third party”

[Lord Hunt of Wirral]

In view of my noble friend’s comments, I do not wish to speak to this amendment but will return to the matter on Report.

Amendment 64A (to Amendment 64) not moved.

[Lord Beecham]

My Lords, I am perfectly satisfied that the Minister makes a very good case. We support it and would also support the amendment of the noble Lord, Lord Hunt. He and I between us have nearly 100 years—God help us—as practising solicitors and we have seen our profession change from a profession to a more conventional, perhaps even less than conventional, business. Professional standards seem to me—and, I dare say, to the noble Lord—to have suffered considerably from the commercialisation of the profession in a way that I find distasteful. I dare say he does as well. So we welcome this.

The problem does not stop with the inducements offered by solicitors or other people. All of us, I suspect, are constantly beset by unsolicited telephone calls raising the possibility of claims where there is no foundation to them, and all kinds of other calls selling services and the like. Quite apart from this legislation, the Government generally need to look at what can be done to make it much more difficult for this cold-calling industry across a range of issues—and certainly in the areas of promoting claims for PIP or accidents that have never occurred and so on. They should consider whether there cannot be a framework that makes it much more difficult.

Many of us have signed up to a system that is supposed to screen such calls but it simply does not work. Although it is impossible, I suppose, to stop e-mails, telephone calls which constantly occur—whether they are about this specific issue or more generally—are a nuisance. They are expensive and they are extremely irritating. It is not a matter for the Bill but perhaps the noble Lord could take back to his colleagues in BIS, and possibly other departments, that this issue generally needs addressing in addition to the specifics referred to in the government amendments and the noble Lord’s amendment, which we support.

Amendment 64 agreed.

Amendments 65 to 67

Moved by

[Lord Faulks]

65: After Clause 45, insert the following new Clause—
“Effect of rules against inducements
(1) The relevant regulator must ensure that it has appropriate arrangements for monitoring and enforcing the restriction imposed on regulated persons by section (Rules against inducements to make personal injury claims).
(2) A regulator may make rules for the purposes of subsection (1).
(3) The rules may in particular provide that, in relation to anything done in breach of that section, the relevant regulator may exercise any powers that the regulator would have in relation to anything done by the regulated person in breach of another restriction (subject to subsection (4)).
(4) A breach of section (Rules against inducements to make personal injury claims)—
(a) does not make a person guilty of an offence, and (b) does not give rise to a right of action for breach of statutory duty.(5) Subsection (6) applies in a case where—
(a) a regulated person has offered a benefit to a person, and(b) it appears to the regulator that the offer of the benefit is an inducement to make a claim as mentioned in section (Rules against inducements to make personal injury claims)(1)(b).(6) Rules under subsection (2) may provide for the offer of the benefit to the person to be treated as an inducement to make a claim as mentioned in section (Rules against inducements to make personal injury claims)(1)(b) unless the regulated person shows—
(a) that the benefit was offered for a reason other than encouraging the person to make a claim or to seek advice from a regulated person with a view to making a claim, or(b) that the benefit is related to the provision of legal services in connection with the claim (see regulations under section (Rules against inducements to make personal injury claims)(4)).”

66: After Clause 45, insert the following new Clause—
“Inducements: interpretation
(1) In relation to an offer of a benefit which is an inducement to make a claim in civil proceedings for damages for personal injury or death or arising out of circumstances involving personal injury or death—
(a) a regulator is any person listed in column 1 below;(b) a regulated person is any person listed in column 2;(c) a regulator in column 1 is the relevant regulator in relation to the corresponding person in column 2.

Regulator	Regulated person
The General Council of the Bar	A person authorised by the Council to carry on a reserved legal activity within the meaning of the Legal Services Act 2007
The Institute of Legal Executives	A person authorised by the Institute to carry on a reserved legal activity within the meaning of the Legal Services Act 2007
The Law Society	A person authorised by the Society to carry on a reserved legal activity within the meaning of the Legal Services Act 2007
A licensing authority for the purposes of Part 5 of the Legal Services Act 2007 (alternative business structures)	A person who is licensed by the authority to carry on a reserved legal activity
A regulatory body specified for the purposes of this section in regulations made by the Lord Chancellor	A person of a description specified for the purposes of this section in regulations made by the Lord Chancellor in relation to the body specified under column 1

(2) For the purposes of this section and sections (Rules against inducements to make personal injury claims) and (Effect of rules against inducements)—
“benefit” means—
(a) any benefit, whether or not in money or other property and whether temporary or permanent, and(b) any opportunity to obtain a benefit;“claim” includes a counter-claim;
“legal services” means services provided by a person which consist of or include legal activities (within the meaning of the Legal Services Act 2007) carried on by or on behalf of that person;
“personal injury” includes any disease and any other impairment of a person’s physical or mental condition.
(3) For the purposes of this section and section (Effect of rules against inducements) whether an offer of a benefit is an inducement to make a claim is to be determined in accordance with section (Rules against inducements to make personal injury claims).”

67: After Clause 45, insert the following new Clause—
“Inducements: regulations
(1) This section applies to any regulations under section (Rules against inducements to make personal injury claims) or (Inducements: interpretation).
(2) The regulations are to be made by statutory instrument.
(3) The regulations may include consequential, supplementary, incidental, transitional, transitory or saving provision.
(4) Regulations under section (Rules against inducements to make personal injury claims) may not be made unless a draft of the instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.
(5) A statutory instrument containing regulations under section (Inducements: interpretation) is subject to annulment in pursuance of a resolution of either House of Parliament.”

Amendments 65 to 67 agreed.

22:15

Clause 46: Appeals from the High Court to the Supreme Court

Amendments 67A to 67E not moved.

Clause 46 agreed.

Clause 47: Appeals from the Upper Tribunal to the Supreme Court

Amendment 67F not moved.

Clause 47 agreed.

Clause 48: Appeals from the Employment Appeal Tribunal to the Supreme Court

Amendment 67G not moved.

Clause 48 agreed.

Clause 49 agreed.

Amendment 68

Moved by

[Lord Hope of Craighead]

68: After Clause 49, insert the following new Clause—
“President of the Supreme Court
(1) Section 5 of the Constitutional Reform Act 2005 (representations by senior judges) is amended as follows.
(2) After subsection (5) insert—
“(6) The President of the Supreme Court may lay before Parliament written representations on matters that appear to him to be matters of importance relating to the Supreme Court or the jurisdiction it exercises.””

[Lord Hope of Craighead (CB)]

My Lords, I am very conscious of the lateness of the hour and I shall be as brief as I possibly can.

This amendment, together with Amendment 69 which follows it, seeks to deal with matters which may have been overlooked when the Constitutional Reform Act 2005 was passing through Parliament. They both relate to the Supreme Court, provision for which was made in Part 3 of the Act. I tabled both amendments at the request of the President of the Supreme Court, the noble and learned Lord, Lord Neuberger.

Amendment 68 would extend to the President of the Supreme Court the same opportunity to lay representations to Parliament on matters that appear to him to be of importance that Section 5 gives to the heads of the judiciary in each of the three separate jurisdictions within the UK: England and Wales, Scotland and Northern Ireland.

So far as I can recall, no thought was given to the position of the President of the Supreme Court when the Bill that became the 2005 Act was passing through Parliament. There may be various reasons for that. I do not recall the matter being discussed at all. I do not think that there was any policy decision on the matter either one way or the other. There may have been a drafting explanation, because Part 2, which contains Section 5, appears in the Act before Part 3, which created the Supreme Court. The separation of those two parts may have led to the matter being overlooked. Whatever the matter, the fact was that the point was concealed from us by the events that were going on at the time. If we had been thinking of the matter now, we would certainly have asked for the president to be included.

I should say that there are no issues of current concern to the president. However, unless the statute is amended, he would be unable to make representations should something of concern arise. He has been looking for quite some time for a suitable vehicle to introduce an amendment to that effect and it seemed to him that this Bill contains that kind of vehicle, which is why this has been brought forward now.

I will say just a brief word about the wording of the provision that is being proposed. The heads of the judiciary in each of the three jurisdictions have no objection in principle to what is being proposed. However, some thought has been given—especially by the noble and learned Lord, Lord Neuberger, and myself—to the precise wording. The words,

“that appear to him to be matters of importance relating to the Supreme Court”,

which is the first part of the formula, are simply a translation of the first part of the formula in Section 5(1) to accommodate the new court. It has been a little more difficult to find a formula that is appropriate to the situation of the new court in place of the words,

“or otherwise to the administration of justice”,

in Section 5(1). The wording in my amendment uses the phrase “or the jurisdiction it exercises”—that is, the jurisdiction of the Supreme Court. The intention of that formula is quite simple: to ensure that the responsibilities of the heads of the judiciary in their respective jurisdictions are respected by the president, which of course he would seek to do.

Finally, I will address two very short points on this amendment. The first is that it would be highly desirable for this formula—or at least one that the Minister can be assured has the agreement of all concerned—to be adhered to in any revised version of this amendment. The second is that between now and when we come back on Report the president and the heads of the three jurisdictions will be seeking to agree a mutually acceptable form of words that will ensure that their respective areas of jurisdiction are respected. They may come up with the same form but, if there is any difference, we will of course let the Minister know.

The second amendment is quite short. It relates to the composition of the supplementary panel, provided for in Section 39 of the Constitutional Reform Act, from which the president may invite someone to sit as an acting judge of the court under Section 38, as is necessary from time to time when places need to be filled. The section contains a number of different sources from which that supplementary panel may be drawn, but time has marched on and subsections (2) and (3), which extended membership of the panel to Members of the House of Lords under conditions which are set out, are no longer relevant as there is now no one who can possibly satisfy those conditions. That is a feature of time marching on. Subsection (6) is of no help for the present either, for the same reason.

Therefore, the only subsection that can now be relied on is subsection (4), which is very tightly drawn, but it requires a decision to be made as to membership of the panel before the individual retires. The president, the noble and learned Lord, Lord Neuberger, has found that embarrassing in at least one case. He wanted to appoint somebody who was eminently suitable and who had retired very recently, but it was too late to catch him to put him on to the panel. The amendment seeks to retain the principle of tightness to avoid individuals becoming too, perhaps, stale after retirement but nevertheless to make it a little easier to draw in people who are suitable for appointment to the panel. That is the purpose behind the amendment. I do not think there is any dispute between any of the heads of jurisdictions about this amendment; it is just a simple matter of facilitating the sensible provision in the Act. I beg to move.

[Lord Beecham]

My Lords, I am very happy to support the noble and learned Lord’s amendment and I take it that the Government will accede to it. It is a very sensible change.

[Lord Faulks]

My Lords, Amendment 68 would have the effect of allowing the President of the United Kingdom Supreme Court to make written representations to Parliament about the Supreme Court and its jurisdiction in the same way as the Lord Chief Justice of any part of the United Kingdom is able to do under Section 5 of the Constitutional Reform Act 2005. The Lord Chief Justice of England and Wales has used the provision under Section 5 of the 2005 Act to lay before Parliament his annual report, which highlights his accountability for oversight of the judiciary in England and Wales.

Amendment 69 would have the effect of allowing the United Kingdom Supreme Court the flexibility to appoint judges to the supplementary panel within two years of their retirement, providing they are under the age of 75.

First, I should very much like to thank the noble and learned Lord, Lord Hope, for all his work on these issues and for being so patient in waiting for this amendment to be reached at such a late stage. Given his background, he is of course well placed to speak with authority on these matters. I know that he has been working closely with the judiciary on these amendments and he has also recently written to me regarding them.

The Government understand the rationale behind the amendments. However, before we can agree to make such changes, we will need to consider the matter and the impacts of the proposed changes further and discuss them in more detail with the President of the Supreme Court, the Lord Chief Justice, the Lord President of the Court of Session and the Lord Chief Justice for Northern Ireland. I will also be happy to have further discussions with the noble and learned Lord about the amendments and will respond fully to his letter shortly. On that basis, I hope that he will feel able to withdraw the amendment.

[Lord Hope of Craighead]

My Lords, I am grateful to the Minister for his very helpful reply. It is indeed the reply that I expected. It is sensible to take time to consider the matter a little more fully. In view of the undertakings that he has given, I am happy to beg leave to withdraw the amendment.

Amendment 68 withdrawn.

Amendment 69

Moved by

[Lord Hope of Craighead]

69: After Clause 49, insert the following new Clause—
“Supplementary panel
(1) The Constitutional Reform Act 2005 is amended as follows.
(2) In section 39(4) (supplementary panel)—
(a) after “but only if,” insert “either”,(b) after “while he holds such office” insert “or within two years of ceasing to hold such office”.”

[Lord Hope of Craighead]

My Lords, perhaps I may be quite clear about where the Minister stands on Amendment 69. I do not think that he indicated where he stood on it. It is a very simple matter. Perhaps he could come back to it on Report, but I should be grateful if he would say where he stands. I beg to move.

[Lord Faulks]

It is also a matter where we would like to consider the full implications of the changes. The reply that I gave was supposed to embrace both amendments.

[Lord Hope of Craighead]

I am most grateful. In view of that indication, I am happy to beg leave to withdraw the amendment.

Amendment 69 withdrawn.

House resumed.

House adjourned at 10.25 pm.