Grand Committee
Consumer Rights Bill
The Deputy Chairman of Committees (Lord Geddes) (Con)
My Lords, it is now 3.30 pm. I must start, as I am obliged to do, by advising that, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Clause 51: Reasonable price to be paid for a service
Amendment 50A
“( ) Where the consumer is required to pay for a service via a third party as part of another contract, for the purposes of assessing whether the charges they are required to pay are reasonable, they will have a right to the full details of any contract including all charges and costs to which they are contributing.”
Baroness Hayter of Kentish Town (Lab)
My Lords, Amendment 50A is about transparency of charges. This is something we know that the Government support. They are very much in favour of transparency, particularly given their very welcome provision elsewhere in the Bill to make letting agents disclose their charges. However, other groups of home owners and tenants have a similar need to know what they are being asked to pay, whether it is insurance in respect of a holiday or an add-on to a main product. I hope that the example I am about to give will help the Minister to respond to the amendment. It concerns leasehold management where there is leasehold ownership of a block of flats and either the managing agent or the ground landlord takes out an insurance policy or has building work done, but then, because of the contract, the leaseholders have to pay up although they are not shown the details of the cover, if it is insurance, or, indeed, of the price and bids for the work if it is, for example, building or gardening. These details are available to the freeholder, and probably to the managing agent, but not to the leaseholder. When they ask for this, the insurance company or, indeed, the contractor in the case of buildings often says that their agreement is with the freeholder and therefore they will not give the leaseholder the information, even though the leaseholder is paying.
We have had an example of this from my colleague in the other place. It will be obvious who it is when I say that this was about some leaseholders in Walthamstow. They managed to get their hands on their insurance policy and discovered that there was an extra premium covering terrorism. We were slightly surprised that Walthamstow should be high on that agenda. When they inquired, they discovered that it was because a newspaper article had once reported that somebody involved in a plot to blow up a plane lived in the area. That may be an extreme example but I think that we all know of cases where the person who actually pays is not the contractor or is not the person who is party to the contract; they have to pay via a different contract. Therefore, Amendment 50A says basically that when somebody has to pay via a third party, they should have the right to obtain the information relating to the charge to which they are contributing. I beg to move.
Baroness Jolly (LD)
My Lords, like other noble Lords, I, too, have looked carefully at the discussions on this issue which took place in the other place and I am aware of the circumstances and purpose which has given rise to the amendment. As I understand it, the purpose of the amendment is to assist leaseholders in establishing whether the insurance cover and the contributions paid towards the insurance premium are reasonable. I entirely agree that transparency is important and that leaseholders should have access to information about insurance and, indeed, other service charges.
Having carefully considered the amendment, its purpose and effect, I am happy to reassure noble Lords that the law already provides leaseholders with the right to obtain the information that this amendment seeks to provide. Leaseholders contributing towards the cost of building insurance and service charges more generally have for some years had the right to access and obtain copies of this information. This includes being able to request in writing a copy of the insurance policy or the landlord/managing agent providing reasonable facilities to inspect the policy and all other supporting documents, for example. This is in addition to the ability to request a summary of service charges in general, which would include the costs of insurance, and to inspect the invoices, receipts and other supporting documents that make up the costs.
If a landlord or, indeed, a managing agent on their behalf, fails to comply with a request for information without reasonable excuse, they commit a summary offence, which is subject on conviction to a level 4 fine on the standard scale of up to £2,500. Ultimately, as noble Lords will be aware, leaseholders can apply to the First-tier Tribunal Property Chamber for a determination about the reasonableness of the costs of insurance that they contribute towards and other service charge payments. Grounds could include, for example, that the level or type of insurance is not appropriate, in addition to the reasonableness of the premium.
It is, of course, in the interests of parties to try to resolve concerns or disputes amicably, by discussion or alternative dispute resolution where possible, before resorting to the tribunal system. Noble Lords will also be aware of the requirement for letting and managing agents now to belong to one of three redress schemes approved by the Government. This requirement came into force on 1 October 2014, and is something that the noble Baroness, Lady Hayter, inspired through the Enterprise and Regulatory Reform Act. It is also important that we avoid creating a situation in which changes to legislation result in confusion or doubt about how existing legislation operates, or in weakening that legislation. This could potentially act to the detriment of the very leaseholders whose interests noble Lords are looking out for.
Guidance about leaseholders’ rights, including acquiring information about insurance, can be found on the GOV.UK website. Free, independent, initial legal advice about leasehold law and the rights available, including accessing information is also available from the government-sponsored body, the Leasehold Advisory Service. I hope, therefore, that I have been able to reassure the Committee that the law already provides leaseholders with the protections and rights the amendment seeks to introduce, and on why the Government are not convinced that noble Lords’ amendments will achieve their goals. For those reasons and the reassurance I have provided, I ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
I particularly thank the Government for giving serious consideration to this. It is interesting that the Minister said, quite rightly, that we do not want conflicting laws. Part of the problem is that what she quoted about the right of leaseholders to take the freeholder to the leasehold tribunal to get this information does not enable them to get it from the insurance company. It seems to be the insurance companies that do not seem to know that they should be providing residents with information on their cover. Residents can obviously get a copy of the insurance but it will not cover all these small points. What we were trying to write into the Act was to make sure that everyone knows their responsibility, including insurance companies, who should not wriggle out of giving this information. I think that the noble Baroness is going to give me some more helpful comments.
Baroness Jolly
Certainly. The landlord or freeholder has to get the information from the insurer in the first place in order to show it to the resident.
Baroness Hayter of Kentish Town
I thank the noble Baroness for that clarification. The point was that leaseholders were hoping to get the information directly from the insurer because that is where their money went. I will withdraw the amendment because there is another issue that we shall come to about the amount of risk that is covered. That is for the next amendment. I beg leave to withdraw the amendment.
“( ) Where the consumer is being supplied with a financial service, the consumer shall be provided with such information as shall enable them to know the risks that were taken into account in calculating the applicable premium and the profit that either—
(a) the financial services company, or(b) the financial broker,anticipates to make on that premium if there is no claim on the policy.”
Baroness Hayter of Kentish Town
In moving the amendment, I shall speak also to Amendment 50D in this group. Amendment 50B does what all good financial service providers should, which is to help people to understand risk so that they can make an informed choice about the sort of product to buy and the sort of price that is worth paying. The amendment very much covers financial products such as annuities, where consumers are really buying blind as very often providers fail to reveal the risks covered or their service charge. It is bundled up in one price, without knowing the degree of risk that is covered or, indeed, the service charge being taken by the provider. So consumers are presented with an insurance quote for terrorism, in the example just given, but that may not explain the underlying risk that it has been assessed that they face and therefore need to be covered for, and they have no way in which to find out why that quote comes to be. Is the risk associated with where they live, underneath a plane that might drop, or is it based on their life expectancy or assumptions about future market movements—or, as we have seen, some change in the likelihood of flooding, terrorism or anything else? In other words, the underlying risk is not obvious.
The amendment tries to get greater clarity, in addition to the financial market, about life annuities and things like that, and car insurance. The Competition Commission in 2013 reckoned that car insurance was not working well for consumers, as they have very little information about the add-on to insurance products, such as replacement cars in the event of an accident. It is impossible to know how much that cover is worth when it is in with your car insurance.
In the Commons, the Minister said:
“The amendment is unnecessary because the Financial Conduct Authority’s conduct of business rules already cover the provision of pre-contract information”,
and claimed that,
“the requirement to disclose risk information … could have an adverse impact on the insurance market”.—[Official Report, Commons, Consumer Rights Public Bill Committee, 4/3/14; col. 428.]
According to the Government, it would require insurers to disclose their business model and confuse consumers, because companies use different models to calculate risk. What it means is that the degree of risk that the insurance company thinks it faces, and therefore why the charge should be there, is absolutely not explained to customers or clients.
The Minister also cited an apparent absence of demand for consumers to know how their premiums are calculated. I consider that that somewhat underestimates people’s attitude for information. As soon as they understand the importance of it, and therefore the effect that it has on the price and how much they are willing to pay, they may understand more. If young drivers, who get a very high premium, are told that that is because so many young people drive at night, they may be able to say, “I promise not to drive my car at night—could I have a lower insurance premium?” We know that exactly that has happened, but it took that degree of knowledge for young drivers—admittedly, represented more as a group—to be able to negotiate a different sort of insurance once they knew the underlying risks for which the insurance company was charging them more.
Transparency from providers to consumers should be one of the things that we try to get. It is particularly important with car insurance because it is a captive market—we all have to have it. I am assured that that means 26 million cars, which sounds like rich pickings for any industry. It is not a very competitive industry, in that only four companies account for half the £13 billion market. So premiums are high, and it is an example of where groups of consumers, if they understand more about their risk, might be able to negotiate a better deal. It is probable that everyone in this Room has managed to lower their car insurance premium by phoning up and complaining. You can usually get your car insurance reduced, which tends to suggest that it is not a very competitive market.
We will come on to another issue, which is that the add-ons often cover things like legal expenses, but again we are not told what the real degree of risk is and therefore it is impossible to know whether they are worth buying or whether it would be better to cover oneself through the house insurance premium for all legal costs rather than just those for the car. Without this knowledge, it is very difficult to shop around.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, I have a lot of sympathy with the intention behind Amendment 50B. It seeks to help consumers get a better deal from their insurers through the provision of more information, which would help them to make an informed choice. I am glad that we are discussing the issue today. But I am equally concerned that the amendment could lead to customer confusion and might even hamper competition in the insurance market, which ultimately is not in the interest of consumers. I shall first address the requirement under the amendment to disclose risks taken into account when setting insurance premiums. An example of that would be the age of a driver, as has been mentioned.
The idea of equipping the consumer to make informed choices is in my view an admirable one, but mandating the provision of complex information would be likely to result in the opposite outcome. A complex algorithm would not help the consumer and competition could be affected. In my experience, there is good practice out there. As it happens, only yesterday I was renewing my motor insurance on my mobile phone, which kept giving up on me, so I had to ring in again. However, in the end I did succeed. It was actually quite interesting because I had a discussion about some of the options. I asked, “If I take one of my sons off the insurance, will it be cheaper?” and so on. They were very clear and also went through extra things that one might want to purchase but had no obligation to do so. Those were the sorts of thing that the noble Baroness mentioned, such as legal expenses or a replacement car.
As we know, it is important that consumers—who are busy and not always financially literate—take in the key information needed to decide whether to buy an insurance product. To overload them with more information can put them off reading any of it at all. There appears to be little appetite from consumers to understand the complexities of how premiums are arrived at. We know that consumers concentrate on price. A key part of price competition comes from the respective capabilities of insurers to assess risk. Asking insurers to disclose these assessments could harm competition as it would be tantamount to giving away the secrets of an insurer’s business model. I think that that was the argument discussed in the other place. Further, the price of premiums could increase as a result of this amendment as it imposes an additional cost burden on insurers to provide a breakdown of detailed premiums—which inevitably will be passed on to consumers. This cost burden could damage an industry that employs 320,000 people in the United Kingdom.
The amendment also has a requirement to disclose profit relating to a policy where no claim has been made. Information about expected profit if there is no claim on a policy can be only speculative. Insurance works by pooling risks together—that is the whole principle of it. If no claim has been made on a policy, this does not necessarily mean that an insurer makes a profit on that policy. I also highlight that the Financial Conduct Authority’s conduct of business rules already cover the provision of pre-contractual information by insurers—that is, what you are told before signing up—so creating a separate set of rules in this area is unnecessary.
The Financial Conduct Authority’s General Insurance Add-ons Market Study highlighted that there is currently no consistent or common method for measuring the value of these products, and proposed that insurers should publish claims ratios to increase transparency and focus on value. This would be an aggregate: how much they pay out relative to income for the whole fund. The FCA has not yet concluded that work so it is important that we allow the regulator space to draw its conclusions before taking additional action. Of course, it has powers to add or amend its rules—in this case, the Insurance: Conduct of Business Sourcebook.
Turning to Amendment 50D, I am again concerned about the risk of adverse consequences for consumers and about the potential conflicts with existing rules on claims handling set by the FCA. I will explain my concerns by going back to the fundamental nature of some insurance claims. For example, as the noble Baroness mentioned, property insurance claims for riot or flood damage can take a long time to resolve simply because of the scale and nature of the damage. A flooded property can take many months to dry out and it is vital that the property is dry before any renovation takes place. In these cases, to assist the claimant through a period and alleviate hardship, interim payments and temporary accommodation are usually paid immediately.
Instead of helping consumers, the amendment could have perverse effects. It could encourage insurers to rush people back into their homes and close the claim just to be within the law rather than because it is the best outcome for the customer. I am sure that that is not the noble Baroness’s intention but that is a risk, as was suggested in the other place—and one that I am very keen to avoid in this important piece of legislation. Further, I am particularly mindful that artificial deadlines would put a strain on customers to quickly evidence the loss to validate their claims, and might even encourage what could be seen afterwards as fraud.
I know from experience that processing and verification can take some time. I also know that insurers, in general, take their obligations very seriously. Insurance is an important industry and pays out £452 million every day. Good insurers earn loyalty and a good reputation which allows their business to flourish and grow.
I think it is also relevant to set out how the Government have responded to recent flooding in the UK. To ensure that home insurance is affordable for 350,000 properties at highest flood risk the Government have worked with the industry to create Flood Re. We debated this during the passage of the Water Bill. When up and running in 2015, Flood Re will effectively limit the amount that most UK households at the highest flood risk will pay for flood insurance. We have also announced record levels of government investment in managing flood risk.
Still on the subject of delays, the insurance industry complies with all-encompassing consumer protection and redress rules set down by the FCA which in many cases exceed the measures proposed in the Bill. The FCA’s Conduct of Business Sourcebook, which I have already mentioned, requires that insurers settle claims promptly once settlement terms are agreed. The FCA has recently undertaken work on household claims in particular. This year, it conducted a review which concluded that there was no evidence of insurers deliberately delaying settlement. Where things go wrong, as they unfortunately occasionally do, consumers have the right to complain to their insurer and can also go to the Financial Ombudsman Service. A ruling made by the service is binding on the financial service provider.
We have discussed a very serious matter. I feel we have the balance right in this Bill, for all the reasons I have outlined, and I ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
The Minister clearly needs some advice about topping up her phone battery if she is going to be renewing her insurance that way. We trust she got it through all right.
I am delighted that the insurance industry is paying out £452 million a day. We do not know how much it is getting in per day, which from the point of view of the consumer is the interesting figure. I was trying to multiply 452 by 365, but I did not manage to do it. However, that is the issue. If you get a no claim bonus for not having made a claim in the previous year, which I hope the Minister got, the real issue is that you have no idea of its value. In other words, you do not know how much the insurer has saved by the fact that you have not claimed.
I think I made it clear, after what was said in the Commons, that we are not saying that this will be an artificial deadline. The amendment states only that the fact that someone has had to move out of their primary accommodation can be taken into account when determining the timeframe. We were not saying that it was the determinant.
On Amendment 50B, the issue is that we want consumers to shop around. We want them to have the details to be able to judge price, and without some of the underlying assumptions it is hard to do that. I hope we can find a way of strengthening the consumer in this way, whether through the FCA or this Bill, but the FCA’s responsibilities are wider than just consumers whereas this Bill has consumers at its heart.
Baroness Neville-Rolfe
We have consumers at our heart in relation to this Bill and many other pieces of legislation, but there has to be a balance. I am sure we agree that if you put up costs inappropriately, the consumer is the loser because costs tend to be passed on in higher prices. We have to work together to find the right balance.
Baroness Hayter of Kentish Town
I certainly agree with that, but I am not always convinced that having better-informed consumers leads to higher prices. That may be for another discussion. I beg leave to withdraw the amendment.
Baroness King of Bow
“( ) Where the service provided is for an additional assistance service, a reasonable price will be one which is judged by reference to the guidance set out by the original provider of the service who has approved the provision of such an additional service including specifying a range of costs for its provision which can be considered reasonable.
( ) An “additional assistance” service for the purposes of this Act is any service assisting a consumer to use the original service that does not alter the original service provider’s intent in operating this service.”
Baroness King of Bow
My Lords, Amendments 50C and 56A both seek to ensure that the final provider of services approves any website offering services through them. This area is the digital equivalent of the cowboy mechanic charging people left, right, and centre for services they do not need. We know it is important to take action on copycat websites: the question is, how far will we go?
I start by examining how far they go to con consumers out of money. The examples are legion. I shall not detain the Committee for too long, but I will follow the top three copycat websites with a special commendation for con artistry, because I simply could not resist. Here are the top three copycat websites, in reverse order, identified in a poll of 1,750 people for moneysavingexpert.com. These people were all caught or nearly caught by those website scams.
In third place are websites for driving licence applications and renewals. They are supposed to cost £20 but these websites were charging up to £80. In second place are passport applications and renewals. They are supposed to cost £137; people were being charged up to £237. In first place are European health insurance cards. These are free, yet hundreds of people were being charged £25 for a free service.
There is a special commendation for con artistry. This goes to the copycat websites covering tax returns, because they are simply superb at what they do; that is, conning and scamming people. As we know, HMRC provides a free service to all taxpayers, yet the taxreturngateway.com website charges consumers between £150 and £1,000 for processing a self-assessment tax return. The company said this was justified because forms were checked for mistakes, but Which? points out that this is clearly misleading as that is exactly what the HMRC official site does.
You might think that you would have to be a bit of an idiot to pay for a free service; in that case I put myself in the idiot bracket. To be slightly gentler, we might be called idiots/people in a rush. You know how it is: you have a lot of things to do, you go online, and you click on what you believe to be an official site. I did that before I travelled to America. Instead of paying $14 for an ESTA visa I paid $40. Yes, I did feel like an idiot when I realised that I had paid a 300% surcharge simply because I was convinced I was on an official website when I was not.
The important point is that as the Government move to put more public services online, it is incumbent upon them to take all possible measures to prevent public service users and consumers being ripped off on an hourly basis. The Government have taken action on this. It is good news, for instance, that Google have removed misleading sponsored adverts. But at the end of the day it is the Government who need to take responsibility in this area, certainly more than a private company.
This is about consumers being legally scammed and ripped off in a calculated manner. The new single web domain, GOV.UK, is indeed welcome for providing the best way to access government services. But the Government can do more to prevent this problem at source, and this is what the amendments propose. Agencies should be able to detect, for instance, when mass applications are coming from the same IP source, because at that point there is an opportunity to evaluate whether the companies are providing a service that is actually value for money. If they are not, these websites can then be blocked by the agency.
For instance, many noble Lords in this Room will presumably be aware of what TfL has done, for instance. Consumers were regularly being overcharged for the congestion charge by copycat websites, with between £2 and £8 being added to their payment. TfL has now said in a public consultation:
“We are proposing an amendment to the Congestion Charging legislation so that we can refuse to accept Congestion Charge payments which are made by these unofficial websites or other unauthorised third parties which mislead road users into paying a fee in addition to the Congestion Charge. TfL will accept payments from third parties for someone else’s vehicle where there is no charge or commercial gain for making payment on their behalf; for example, payments made by people using car hire vehicles. We are planning to refuse payments from unauthorised third parties from December 2014”.
That is incredibly welcome, but instead of every single provider having to change legislation, why can we not ensure through this legislation that other providers can do the same?
The Transport Select Committee is the latest body to criticise the Government on this, saying:
“It is illegal to deliberately mislead the public or obtain money by fraud; the agencies providing services on behalf of the Government should do everything practicable to prevent users of their services from being misled or becoming the victims of fraud”.
TfL’s work here is a really strong and practical example of why just getting Google to police the internet is not the only thing on which the Government should concentrate. It is not the only practicable action that the Government can take.
Another point is that companies and service providers want to be able to control who sells on their services. We can all understand that—sometimes they may be a good thing. One option to explore is around having approved retailers, and we have that example with the Post Office. The ASA has also taken action on misleading adverts and websites. Can the Minister confirm that it cannot take further action against those websites as they exist at present? What further protections will the Bill give consumers in dealing with that problem, above and beyond what the Government have done to date? Does the Minister see a case for expanding “check and send” style services available in local post offices, where they provide a clear benefit for consumers?
In summary, I recognise that the Government have taken action in this area. Indeed, the letter from the Cabinet Office Minister dated 8 October illuminates the impact of government activity to date, which is a very good thing. But the fact is that clearly more could be done to stop copycat websites at source. That is what these amendments ask for, and that is why I beg to move the amendment.
Lord Harris of Haringey (Lab)
My Lords, I repeat my declaration of interest: I chair National Trading Standards. Its particular relevance to this amendment is that that body funds and supports the work of the National Trading Standards eCrime unit, which has recently taken action that has led to the arrest of a number of people associated with the delivery of copycat websites.
In moving this amendment, my noble friend highlighted the sorts of issues that arise in this regard. The most striking example is that of the European health insurance card, which is provided free. Those who have applied for renewal, as I have recently, will have found it an extremely simple and easy process. The fact that people were persuaded to pay up to £25 demonstrates how easy it was for the scammers behind some of these sites.
It is also clear that this is extremely big business, and there is no doubt that the area is under-reported. My noble friend in moving this amendment admitted her embarrassment in realising that she had been caught in this way. I rather suspect that most of us would feel embarrassed and stupid. Because people do not apply that often for European health insurance cards or passports, they would simply write it off to experience and hope to remember to do it differently in 10 years’ time, or whenever the time came.
The reality is that this area has been under-reported for many years. I am reluctant to comment too much on the arrests that have taken place, or the individuals involved, but I saw an article in the Mail on Sunday, which no doubt checked its legal position, about the scale of the revenues, and so on, that may be involved in this. It is clear to me that we may be talking about tens of millions of pounds, and maybe more, which individual citizens have paid unnecessarily through these copycat websites. The profits for those behind them are no doubt extremely large. So something needs to be done.
Again, my noble friend referred to the recent letter from the Cabinet Office setting out a number of initiatives that should take place, but there are a number of areas where everyone needs to make their contribution. Clearly, we as members of the public need to be better informed, and I am pleased that the National Trading Standards eCrime unit recently produced a public information guide called The Owl and the CopyCat, which was designed to demonstrate to people exactly how they ought to behave, and the dangers of going on copycat websites. So the public have a responsibility.
Secondly, the search engines have a responsibility. It may well be in their commercial interest to accept ads from these dubious websites and to place them at the top of search results, but that is not acceptable, and I am pleased that the Government have sought to persuade the search engines that this is inappropriate.
Thirdly, there is a responsibility on law enforcement and trading standards to investigate and to establish whether offences have been committed in terms of misleading the public.
The fourth area relates to the legitimate websites themselves. This is what the amendments in this group are all about. They will know—they must know—where the money is coming from. They will know if it is being channelled through particular IP addresses. They should take steps to monitor what is happening; they should take steps to intervene. The amendment clearly makes it an offence to charge unreasonably for any services associated with applying for a particular public service: the additional assistance element. The second amendment in the group suggests that the legitimate websites should look at whether the charges are legitimate, appropriate and proportionate to what is required.
I mentioned the European health insurance card. The process for applying for this is extremely simple. It is difficult to see what conceivable value additional assistance could provide as far as that is concerned; you would still have to provide your national insurance number or whatever it is to the copycat website, and that is all you have to enter. I recently had the experience of applying for a Russian visa for my daughter. This is an arduous process at the best of times. It is even more arduous when dealing with the bureaucracy of the Russian state. When I embarked on the process, I found what I assumed were a number of copycat websites. I thought, “No, I won’t be caught like this, I’ll go through the GOV.UK website, which will refer me to the correct Russian visa site and so on”. I embarked on the process and I have to say that at the end of it I would happily have paid somebody fifty quid to deal with the bureaucracies involved.
That is why we should take this back to what is an appropriate and legitimate charge for additional assistance. What the copycat websites are doing is saying somewhere in the small print that they are not the official site but are providing a service. We need to get beyond that and ask, first, whether the service that they are providing is necessary and, secondly, whether the charge that they are making is proportionate to the complexity of what they are providing to the consumer.
These amendments go beyond that to say that it would be entirely possible for the official websites to determine which additional service providers are authorised and to produce a scale of legitimate charges that could be made.
If we are placing an obligation on members of the public to be more vigilant and to carry out their own due diligence, and if we are placing an obligation on the search engine providers to be more vigilant and provide that service, surely it is legitimate to say to the legitimate websites that they should exercise due diligence and provide information and a measure by which we can determine whether any additional assistance provided is worth it. Where it is not, they should not accept payment from those sources.
Baroness Neville-Rolfe
My Lords, I make it clear that sites that try to palm themselves off as legitimate government services need to be stopped. We do not want cowboys battening on the services that are legitimately provided by the state. Therefore I sympathise with these amendments. This is a problem that the Government recognise and are taking action on. I was to glad to hear from the noble Lord, Lord Harris, about some of the successes that trading standards has had. He is right to emphasise the scale of the issue and the numbers involved in copycat websites.
We know that the way most people inadvertently end up on misleading websites of this kind is by clicking on adverts that are prominently displayed on search results pages. The Government Digital Service, which the noble Baroness mentioned in relation to the Cabinet Office letter, has been working with search engine providers such as Google to take down adverts for these sites. They are in breach of the search engines’ own policies and many of them have been removed.
There are a lot of parallels here with the problem of websites offering copyright-infringing material which also tend to be found through search results. We have been working on that, too. I have had meetings with some of the ISPs and others, and I am pleased to say that the main search providers are fully engaged on the issues.
We have also made sure that the existing law is being effectively enforced. Earlier in the year, my colleague Jenny Willott MP provided £120,000 in additional government funding to the National Trading Standards eCrime Team to support enforcement action against copycat websites. In late June, four search warrants were executed on properties in England. The operation led to the arrest of five individuals and disrupted the operation of at least 25 copycat websites. A criminal investigation is ongoing. This sort of action matters because it sends a message to the cowboys that this will not be tolerated.
Government agencies are also proactive in this area. The Intellectual Property Office is pursuing, prosecuting and putting out of business two operators of websites masquerading as official IPO services. That action was pursued successfully using the common-law remedy for passing off.
The noble Baroness, Lady King, mentioned the ASA. It continues to take action on a case-by-case basis and can take action on repeat offenders. It took action in November 2013 on Jars Services Limited which was trading—wait for it—as www.drivinglicence.org.uk. In September 2013, it took action against TAD Services trading as UK-Passport.net, and in June 2013, it took action against European Health Insurance Card trading as EHIC. The noble Baroness made a good point about the areas where this fraud is being perpetrated. We need to work to get those sites taken down.
The IPO case has been helped because for the first time ever, we have set up a website where consumers and traders can report copycat sites. This is specifically to protect and empower other consumers. Full details can be found on the excellent GOV.UK website which we are all pleased to see up and running. It allows a modern and dynamic response appropriate to the online era.
I reassure noble Lords that there is already law in place to protect consumers from being misled into a purchase. The Consumer Protection from Unfair Trading Regulations 2008 have been much mentioned during our debates and are very important. We also take enforcement action against these websites under intellectual property law. With a robust legal framework in place, we have been working to enforce the law and go further in partnership with industry.
However, I am not convinced that the law needs to be changed in the way proposed today. The amendment would in effect require government to regulate every third-party service. Government would need to approve it, issue guidance and determine reasonable cost scales. That would be a significant intervention in this marketplace. We should not take such steps unless the interventions we already make are not working and there is clear evidence that further intervention is needed.
People’s behaviour and expectations with regard to online services are constantly evolving and difficult to predict. We are keen not to stifle innovation or negatively impact websites that are honest and legitimate and provide value-added services. The most effective option is to enforce the existing legal sanctions against misleading websites which breach consumer protection legislation or IP law. In addition, we are going further by supporting search engines in assessing whether a third party offering services related to a government service is actually a genuine service. This complies with the search engines’ own guidelines and polices.
Lord Harris of Haringey
Could the Minister elaborate on that point? If the Government are working with search engine providers and essentially saying to them, “This is a legitimate additional service provider”, or, “That is not”, are they not already starting the process of regulating what she talked about as a legitimate marketplace? They must make that judgment already to be able to say to the search engine providers, “This is an illegitimate, copycat website”, or, “That is a legitimate service provider”.
Baroness Neville-Rolfe
My Lords, I thank the noble Lord for raising that point. I know what is happening in certain areas but not across the board. If I may, I will take the noble Lord’s question away and come back to him. It is also important to publicise better the sort of things that are being done in this area. I have tried to do that in a small way today, as has the noble Baroness, Lady King. For the present, I ask her to withdraw her amendment.
Baroness King of Bow
My Lords, from what the Minister said and in conjunction with the points raised by my noble friend Lord Harris, I think the Government are saying, essentially, that it would be too much work for government departments to approve websites offering additional services. The point I wanted to make—as my noble friend did—is that that does not really make sense, for a couple of reasons. First, the extra work is minimal. Indeed, as my noble friend pointed out, it appears that it is already being done to some extent at the moment. Secondly, that extra work—whatever it may be—is insignificant when compared to the detriment being done to the consumer. That is the point we must consider here.
We also have to take into account all the time currently spent by government departments or other offices answering consumer complaints in this area. For example, the DVLA has received 170 complaints about scam websites since 1 March. The Home Office, in nine months in 2013, received 590 written customer complaints about scam passport sites. As for TfL, it had an extraordinary 1,000 complaints a day. Does not that shed some light on one of the reasons why TfL has been so proactive in this area? Would it not be helpful if Government encouraged other providers to be just as helpful to the consumer?
The other problem with the Government’s approach of leaving it really up to Google to monitor websites is that although Google has agreed to take down some of the adverts and monitor future ones, this requires much more continuous monitoring work than cutting off copycat websites at source. Critically, this approach also inevitably leaves some consumers unprotected for some stretches of time, and therefore undermines consumer rights. As my noble friend Lord Harris made clear, these websites are big business. They make their living by inflicting detriment on the consumer in an entirely parasitic manner. If we are all to play our part, it must include legitimate providers taking the time to say whether a site provides an additional service. That is the purpose of these amendments.
At the start of her speech the noble Baroness said that these sites need to be stopped. I welcome that forthright attitude, but I am sure she will understand my disappointment that it simply is not being followed up with what would be very simple measures.
Baroness Neville-Rolfe
Perhaps I could make one point about the idea of new legislation, which I think is what the noble Baroness is calling for. We are very concerned not to stop legitimate organisations that do provide added-value services related to those provided by government from advertising via search engines. That is an important objective; there are always two sides to these questions. At the same time, as I said earlier so robustly, we want to stop those who make false or misleading claims, who do not provide any added value to users, and who thus understandably frustrate and upset those who, as in the example given by the noble Baroness, choose the wrong sort of website.
The difficulty is that people’s behaviour and expectations with regard to these services are constantly evolving and difficult to predict. That is why we are pursuing the option of supporting search engines in assessing whether a third party that is offering services related to a government website is actually a genuine one which complies with the search engine’s own policies. I think that it would be difficult for us to do this on our own. We have set up the website page www.gov.uk/misleading websites, which I mentioned earlier, and we will monitor the effectiveness of this approach over the coming months. We need to work in this evolving and important area, and I can assure the noble Baroness that we are determined to make a difference.
Baroness King of Bow
The problem I have with the Minister’s response is twofold. First, the legitimate business issues she is talking about would not suffer any problems as a result of the amendments we have put down because they would be providing additional services. Secondly, when the Minister tells us, as she just has in her intervention, that Google is looking at which copycat websites are appropriate and which are not—obviously if they are appropriate, they are not copycat websites, but I am sure the Minister gets my meaning—if we take the example of TfL and the congestion charge, surely TfL is better placed to determine whether a website is providing an additional service or not. Why should the people at Google, clever as they may be, essentially have to do the job that a provider is far better placed to do? I genuinely do not understand the Government’s persistent objections on these points and I would be very grateful if the Minister could pay serious attention to reviewing them. However, until that point, I will withdraw the amendment.
Baroness Neville-Rolfe
Before we finish on this important matter, which I think we both care about a lot, perhaps I may say a few more words. Before we decry the work being done with Google—I think the noble Baroness is asking whether it is sufficient—in the period between November 2013 and June 2014, click-through rates to the official sites improved as a result of work with Google. From November 2013 it was 43% on passports and by June 2014 it was 72%. Obviously there is still a problem, but we are seeing an improvement. Driving licences: 41% in November 2013 and 69% in June 2014, and of course we are now in October. I believe that this is an area where we have to work with the industry. However, I will respond to the point made by the noble Lord, Lord Harris, about how we can link in and identify the third parties in every relevant area. As I say, I will come back to him and to the Committee on that issue.
Baroness King of Bow
I thank the Minister for that intervention. One of the issues comes back to what I have heard the Government say—namely, that they are going to take all practicable measures to deal with this matter. Our point is that these amendments represent very practical measures that could deal with it. I mentioned the letter from the Cabinet Office setting out the impact that the Government’s steps had had, and I welcomed them. The Minister just referred to driving licences and said that the relevant figure had gone up from 41% to 69%— that being the number of consumers coming through legitimate routes as opposed to other routes where they may face surcharges. However, that still leaves approximately a third of consumers uncovered. Given that we are discussing the Consumer Rights Bill, I simply cannot understand why we would not want to strengthen the position of the one-third of consumers and ensure that they have the whip hand rather than the parasites who are out to make money unfairly. Therefore, although I shall withdraw the amendment, I do so with a heavy heart, albeit a hopeful one, because I am sure that the Government will agree that these are fair amendments that would help consumers save money and stop legal scams. I beg leave to withdraw the amendment.
“(3A) Where the conduct of the service can be reasonably considered to lead to a risk to the personal safety of the consumer, the consumer has a right to—
(a) a full refund of the cost of the contract, and(b) any additional fees associated with the service.(3B) Any action taken under subsection (3A) will not prevent the consumer from seeking other remedies or further compensation for the consequences of this installation.”
Baroness Hayter of Kentish Town
I am feeling very proud as I managed to renew my passport online and got it from the Passport Office in, I think, 48 hours. I thank the Passport Office for being able to do that online and for its incredible efficiency.
In moving Amendment 50F, which stands in my name and that of my noble friend Lord Stevenson, I will speak also to Amendments 50H and 50J. These concern issues that we addressed when we discussed the Bill’s provisions in relation to goods. We are worried about consumers whose personal safety is at risk due to the quality of workmanship in their house. They should not have to have the same people back to make a first attempt at repairing whatever they have botched before being able to ask for a refund of their money and any associated costs. The importance of the amendment will be clear to all consumers.
A trading standards representative gave written evidence to the Public Bill Committee in the other place that the remedy in the Bill was insufficient where dangerous service was involved. In these circumstances consumers should have the right to end the service and get their money back. At present, the Bill enables consumers who find that a service is not undertaken with reasonable skill and care—a normal service, if you like—to have that service undertaken again and to get their money back or obtain a price reduction only if the repeat service does not work. These amendments address the problem whereby a consumer’s personal safety is at risk and would allow them to move straight to obtaining a refund rather than risk their safety any further by having to have a repeat performance by an incompetent or careless supplier.
On a previous occasion we gave the example of a gas fitter who services a boiler and causes a leak or a builder who knocks down the very wall that he is meant to be building. These may appear extreme cases but, sadly, we know that they happen and we know that we would not want such tradesmen back in our houses. Therefore, we would like a consumer to be able to obtain a refund and employ another company in these circumstances without first having to have the same company attempt to repair the damage.
I know that the Government have looked at these measures in another place and feel that they are not necessary as the consumer will retain access to a common-law remedy for damages. The Bill sets out clear remedies and courses of action but for consumers to have to argue with the tradesperson in court in order to solve this problem does not seem to us a clever way forward, in addition to all the expensive legal action that is bound to be involved. This amendment would give clarity and keep these issues out of court. I beg to move.
Lord Harris of Haringey
My Lords, I will speak in support of this amendment. I declare a personal interest in this matter. I appreciate that this Committee has turned into an opportunity for all of us to explain our recent experiences of various sorts, but I suspect that this is one of the most recent experiences. Having had a series of problems with a boiler installed in my home, we called out—for the second time in this instance—a contractor to come to try to put it right. Last Tuesday evening I got home and, despite a slight cold, detected what I took to be a smell of gas. We summoned the appropriate people, who came with their little sniffer things, and so on, and declared that whoever had allegedly repaired this boiler and the flues had left it in a state whereby not only was there a serious gas leak but there was a serious leak of carbon monoxide. Fortunately, the boiler is in a basement area, although presumably it could have become an excitingly combustible place. However, the reality was that it had been left in a seriously dangerous situation.
After I had spent some time swearing at the contractors—and I am tempted to use parliamentary privilege and name them, so that residents of north London are warned of these people—the offer was made that they should come to put it right. They were shocked, as I was, that they might have left this in a dangerous situation. My immediate reaction, which remains my reaction, despite the fact that we have no gas at all in the house, because the gas board has been in and disconnected everything for the sake of safety, was that these were the last people whom I would like to come in and rectify the problem. Indeed, I notice that the contractor has e-mailed and phoned me today, clearly because he wants to be paid for the work that was originally done.
This is precisely one of those areas where the consumer needs a very clear legal position. I had not actually looked at my noble friend’s amendment until today, but this is exactly what is required under these circumstances. I wish that this could be made retrospective and that I would simply be able to point to Section 54 of the Consumer Rights Act, as it would then be, and say, “Hang on, there’s no question that we’re having a full refund of the cost and any additional fees associated with bringing somebody else in”. That is what most sensible people would expect. If the Government are serious about giving the consumer sensible rights, they should provide that in the Bill.
Baroness Jolly
My Lords, we have taken great care in developing these remedies, for obvious reasons, and we have had a very good example today. Services are a vital part of our economy. In addition, SMEs and micro-businesses make up the vast majority of services businesses. It is therefore essential that we get these remedies right.
When we consulted on these remedies in 2012, respondees supported the approach that we are taking. They considered it a sensible, balanced approach. Based on the support that we received for this approach to remedies, I am not convinced we need to amend them as this amendment proposes. The remedies that we have are clear for traders and consumers, and it is set out clearly in the Bill when the consumer can ask for each remedy. This is important: The British Retail Consortium told us that it agreed that,
“this approach would be helpful to the extent it is practical and realistic”.
However, we have also catered for the more extreme cases where personal safety is at risk. Here I should say that these notes were written before we had heard the story just told by the noble Lord, Lord Harris. Let me reassure him that the Bill does not force the consumer to have a trader whom they do not trust back in to repeat a service. The remedies set out in detail in this chapter of the Bill are not the only remedies available. To make this clear, we have written into Clause 54 that the consumer retains their access to common-law remedies.
Baroness Oppenheim-Barnes (Con)
Before my noble friend goes too far, what are the other remedies and how soon are they available?
Baroness Jolly
I will come back to the noble Baroness with chapter and verse on the remedies, but they will not be available until the Bill has been passed.
The remedies consumers retain under common law are the right to damages or, in some cases, the right to treat the contract as at an end, rather than being limited to the statutory remedies in the Bill, as long as they do not claim for the same loss twice. I am sure that no noble Lord would do that.
I recognise that consumers and traders will not want to go to court in most cases. That can, in some cases, be expensive and time-consuming. However, knowing that they retain the right to go to court is intended to empower the consumer to ask for their money back. It should also encourage the trader to agree with the consumer to do this. The consumer’s rights under this chapter of the Bill are not the only legislation ensuring that services are performed safely. For example, building regulations require that building work does not compromise the safety of people in and around the building.
Many service providers rely on their reputation and word-of-mouth recommendations. If they have made a mistake, they will want the opportunity to return to fix it. It would not be fair on those traders to take away that opportunity. Many consumers would also want the trader to rectify a problem with a service rather than have the inconvenience of finding another provider. There is also nothing to stop the trader volunteering to give the consumer a price reduction without a re-performance. The trader and the consumer are free to come to an arrangement separate to the statutory remedies in the Bill. Reputable traders will negotiate a remedy with the consumer, taking into account what the consumer has asked for. Given that consumers will be able to access compensation where re-performance is not desired and that our consultation showed broad support for our approach, I ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
The noble Baroness, Lady Oppenheim-Barnes, asked a wonderful question. It was short and acute and went to the heart of the issue because the other remedies, the common-law remedies, are expensive and take a long time and any trader will know that no one is going to take them to court for £200 or £300—even my good and noble friend Lord Harris of Haringey. I am tempted to offer to come and help.
Lord Harris of Haringey
Is this on the public record, because I am still in discussion with the trader concerned?
Baroness Hayter of Kentish Town
I take my noble friend’s point about making this retrospective.
There is a serious issue here. The consultation at the beginning may not have thrown this up because when any of us respond to consultations we have not always thought about all the implications and what could happen and that there might be something dangerous. I urge the Government not to rely too much on consultation on what was a big Bill at the time. No one actually thought about this.
There are a number of issues. The major one is that on quite an important issue it reverts to the old way, which is to go to court, and that does not suit consumers. I do not think it is very good for court expenses or for the trader. Just because the consumer has a right to a refund and to find another trader, it does not mean that they will. The Minister said that some consumers will want the same trader back because they do not want to look for another one. That is fine. Nothing will stop them doing that. The amendment does not require the consumer to have a refund instead of having the old trader back. It states that they should not have to go through one repair before they have their money back.
As I think we said when we raised this and the other safety issues at an earlier stage, this is something we will need to come back to because if consumer rights do not provide the basics such as keeping consumers safe, there is something missing. We will have to think about how we can pursue this on Report. For the moment, I beg leave to withdraw the amendment.
“Services delivered on behalf of a commissioning bodyServices delivered on behalf of a commissioning body
(1) In this section “commissioning body” means a government department, local authority in England or other public body.
(2) Where a commissioning body commissions another person to deliver a service to a consumer, the contract between the commissioning body and the provider of the commissioned service must include—
(a) a requirement for the provider of the commissioned service to operate a complaints procedure;(b) provision for reporting any complaints to the commissioning body; and(c) a requirement for the provider of the service to provide information about the complaints procedure to the consumer.(3) The information required by subsection (2)(c) must include—
(a) an explanation that the complaint can be referred to the commissioning body;(b) where the commissioning body is named in Schedule 2 to the Parliamentary Commissioner Act 1967, an explanation that the complaint can be referred to the Parliamentary Commissioner for Administration; (c) where the commissioning body is named in section 25 of the Local Government Act 1974, an explanation that the complaint can be referred to the Commission for Local Administration in England.”
Baroness Hayter of Kentish Town
I move Amendment 50K in this group on behalf of my noble friend Lord Stevenson and I will speak to Amendments 50M and 105A. This is an important and rather different set of amendments. Amendment 50K was tabled because of the increasing use of private or voluntary sector bodies to deliver services that historically were carried out by central or local government. In the UK, we have a long-standing and highly regarded system of ombudsmen for such services—for local or national government—whether provided by the NHS or by local councils, with such ombudsmen being free, independent and easily accessible. Indeed, it is one of the many advantages that users of local government services have, including recipients of social care. Where they have a complaint about any service, they can at a final stage take that to the independent Local Government Ombudsman, who adjudicates on the matter and can award redress if the service was found not to be up to standard. However, it is not clear to everybody whether users of contracted-out or commissioned services have equal access to the relevant ombudsman, so the amendment seeks to clarify this, not least to mandate clear signposting to first-tier complaints systems as well as to the ombudsmen.
There are wider questions about the redress landscape, which the Public Administration Select Committee has described and which Oliver Letwin, I understand, is now about to review. There are issues about the way things work now—for example, with, we hope, increasing and better co-ordination between hospitals and social care and a seamless move between the two. Interestingly enough, if there is a problem on the health side, it goes to one ombudsman, whereas if it is on the social care side, it goes to a completely different ombudsman. On the handover between the two, it can be difficult to know who was at fault. Even if you can identify that, you then have to find which ombudsman is the appropriate one. Luckily—I hope that some people in the Room will excuse me for saying this—both those ombudsmen are women, so they tend to get together and sort it out, but of course that will not always be the case with such organisations. The Committee will understand the problem.
This amendment does not try to solve the particular problem of overlap, but it deals with situations where a public authority contracts out work to a private provider. It aims to ensure that the user still has a clear pathway to the relevant ombudsman. Given that many public services are delivered these days through a range of bodies, it is hard for the consumer to follow the chain of accountability and to know where to turn if a service lets them down. Indeed, people do not always realise that if a local council has contracted out, it is still accountable, even though it may be another organisation that is delivering the service on the council’s behalf. Whoever is delivering publicly funded services, we believe that users should have access to clear, effective complaints processes, as well as the reassurance that in the final analysis they could take their complaint to an independent ombudsman.
Amendment 50K would ensure that the contract between the commissioning authority and the provider requires a proper complaints procedure, in addition to users knowing that they can refer their concern back to the local authority and then to the ombudsman. At the moment, councils always signpost complainants to the Local Government Ombudsman, but this amendment would ensure that all users of public services—we are particularly talking about social care—are equally well informed.
A brief example from the Local Government Ombudsman was where it had to remind councils that they remain responsible for the actions of, for example, care homes with which they work. The LGO undertook an investigation into Merton Council, which was responsible for a contracted private home. That home asked the family of an elderly resident to pay a top-up fee, but in fact the home had no right to that fee. The family happened to contact the council about where the payment should go and it was only then that it came to light that they were not due to pay the fee because the council had paid everything and the care home was not entitled to any more money. Interestingly, that complaint ended up in the right place because it had come to the notice of the local authority. However, in her findings, the Local Government Ombudsman, Dr Jane Martin, found against the local authority, reminding it that the law is clear: the actions of the care provider shall be treated as actions on or on behalf of the council, so the council was responsible for the care home seeking to extract funding from the family. She went on to warn other councils that they are responsible for any contracted activities that are provided. Clearly, not all councils and not all care homes know that and, even more obviously, not all users know it. We want public providers to ensure that all users are clear about their right to go to the independent ombudsman.
In the case of the Parliamentary and Health Service Ombudsman, the health service is already required to signpost patients to the ombudsman. However, that is not the case for government departments, agencies or other bodies, such as the Electoral Commission, the Charity Commission and Monitor, against which complaints can be taken to the Parliamentary and Health Service Ombudsman. If even those bodies do not know, certainly anyone they contract to do their work will not know either. An individual consumer could be applying to find out something from the Charity Commission and have a complaint, but of course they would not be signposted on. If they were involved in any payment, which they could be if it was for a service, they should be covered by this Bill.
The Parliamentary and Health Service Ombudsman knows that, where signposting is inadequate, there is a strange absence of complaints. Research undertaken in 2012 showed that almost half of the inquirers said that they had not been informed about the Parliamentary and Health Service Ombudsman by the service provider. It is interesting to note that the remit of ombudsmen allows them to follow the public pound and therefore review the actions of bodies acting on behalf of the relevant public bodies, but few citizens know that. Under this Bill, where there is any sort of consideration or payment, as there could well be in respect of a day centre or for other services, we want to ensure that people are absolutely clear about their right to go to an ombudsman.
Amendment 50M speaks for itself. It asks the Government to look at how consumers who use contracted-out or commissioned public services are going to get a better deal along the lines provided for in the Bill. The chapter on services is pretty clear. When we have our windows cleaned or a kitchen installed, as we discussed last week, we know our rights. We know from earlier discussions that the Bill is also going to cover public services where there is an element of payment. We will be interested to know how the users of publicly funded but privately provided services will have their rights under this Bill enforced, as well as what independent advice they might be given to help them in this regard.
Finally, Amendment 105A would require statutory regulators to ensure that they develop proper user or consumer representation on their boards, as well as reviewing annually the consumer experience of the industry, including whether they are sufficiently well represented and listened to so that their rights under this and other legislation are protected.
Regulators exist in exactly those industries where the consumer cannot on their own behalf get a fair deal because the industries are effectively monopolies, or because the nature of the service is so complicated and specialised, as in the law, that clients are in no position to evaluate it or shop around, or because it is an essential service, or for some other market failure. Despite this, not all regulators put the consumer, in whose interest they are meant to work, first—sometimes because of industry capture or sometimes because they fail to see the consumer impact as they work at such a helicopter level. However, it is usually because they do not embed the end-users’ views into their decision-making. They decide policy without researching the consumer’s experience or views. They simply do not understand the ordinary person who pays the bill. This amendment would embed the consumer voice into the regulators’ governance, where it should have been from the start. I beg to move.
Lord Knight of Weymouth (Lab)
My Lords, the amendment raises an interesting question, which I thought I should take the opportunity of posing to the Minister. A cursory glance at Hansard from the other place suggests that the Government’s intention is that consumer rights in this legislation should apply to consumers of public services as well as private services, which is what the amendment addresses. The question that arises refers back to the last time I attended this Committee, when we were discussing consumers’ rights in the context of digital.
With normal goods, one has the right to return them and seek a refund or replacement. I am intrigued as to how that would work with some public services. For example, does this apply to the licence fee? If I do not like what I consumed on my television, do I have the right to a refund or replacement? Of course not, but how does that work in the context of the Bill? If I have paid tuition fees and I am not satisfied with the nature of the service that I receive from a university— I hazard a guess that quite a few students might at times have problems with, for example, the amount of access they have to face-to-face tuition—am I considered, in the context of the Bill, to be a consumer with the same rights as I would have in the private sector? I should be interested to know how that plays out. Or do we, as the amendment suggests, rely on the regulator? In which case, is that all pinned down properly in the Bill?
Lord Whitty (Lab)
My Lords, I support what my noble friend has said in moving the amendment. I want to address for a couple of minutes Amendment 105A, which deals with the issue of consumer representation and how it is reflected within the structures of our regulators.
In general, it is stated early in each of the relevant Acts that the regulators are there to protect, advance or reflect the interests of consumers of gas, electricity, water, telecoms or whatever it may be. Much of the drive within those regulators is indeed geared towards that. However, it is also true that a whole lot of other broader, less direct duties in relation to consumers fall to those regulators. Successive Governments have, rightly or wrongly—I will not go into that too much—placed additional responsibilities on regulators to have regard to wider issues, to long-term and short-term issues, and to social and environmental consequences, for example. One understands all this if we are to develop industry in a way that meets those wider objectives and looks after the interests of consumers.
Put gently, in some cases the duty to look after the interests of consumers, in a simple sense, has been slightly lost. Some of that reflects the fact that the personnel who form the boards and the senior management of these regulators by and large do not come from a consumer background. They come from various technocratic and business backgrounds and in some cases from an academic background and they have the expertise that is necessary to understand the industry that the regulator is dealing with. However, the voice of the consumer in a clear sense is much more difficult to identify.
Baroness Jolly
My Lords, this has been a fascinating debate. Some really interesting questions have been posed, not least by the noble Lords, Lord Knight and Lord Whitty. I reassure noble Lords that I will write to all noble Lords who I have not answered by the end of my response and place a copy in the Library.
We all care passionately about the provision of public services. I am sure I do not need to remind noble Lords that our reason for not including improvements to our public services explicitly in the Bill is not that we do not consider them important. They are vital, and I am proud to say that this Government have done much to change and improve public services.
This Bill will benefit all consumers by setting out in one place consumer rights. This Bill will empower consumers. To maintain that clarity and consolidation, we have not included specific provisions for public services in the Bill. When asked in the other place, the Office of Fair Trading said:
“If you want to deal with consumer rights and the public sector, there is probably a different way to go. This is a simplification and consolidation Bill that is trying to ensure that consumer rights are clear and in one place”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 49.]
While there are no explicit provisions in the Bill on public services, some public services will attract the rights and remedies under the Bill. Services will attract these rights and remedies if they are supplied under a contract between the consumer and a public body. That is the test. This is because the definition of “trader” is wide enough to capture the activities of any government department or local or public authority. Consumers of public services provided under a contract with the provider will therefore benefit from the Bill with clearer rights, clearer remedies and ultimately better outcomes. That is a good thing. We will make it clear in our guidance to consumers and traders that this is the case.
Turning to those public services that are not covered by the provisions in the Bill, let me be very clear that these consumers are nevertheless protected—and in a way that often provides more tailored, specific and appropriate safeguards, designed to fit the particular service. Many of these tailored regimes already incorporate just the sorts of protections that these amendments discuss: independent advocacy, regular reporting and established ombudsman schemes.
Several sectors have well established alternative dispute resolution services. For example, the role of the Parliamentary and Health Service Ombudsman is to investigate complaints that individuals have been treated unfairly or received poor service from government departments, other public organisations or the NHS in England. The ombudsman’s powers are set out in law and the service is free for everyone. In 2012-13, the Parliamentary and Health Service Ombudsman resolved 26,358 inquiries for consumers. In 2012-13, the Local Government Ombudsman responded to more than 90,000 contacts from the public.
We all share the vision of public services provided to a high standard, where consumer feedback and consumer choice work to push up standards. The noble Baroness, Lady Hayter, mentioned the issues of signposting to ombudsmen. As my honourable friend Jenny Willott explained in the other place, the Minister for Government Policy, my right honourable friend Oliver Letwin MP, commissioned Robert Gordon to review the ombudsman landscape, thus considering the case for a single public sector ombudsman. He will report to the Minister before Christmas and we are committed to considering his recommendations. It would be premature to take action in this Bill before the review is completed.
I turning to the specific amendments tabled. The first is Amendment 50K. I am sure that all noble Lords are aware of the Open Public Services agenda. It is based on five principles for reform: decentralisation; choice; diversity of provision; fair access; and accountability. To achieve these objectives, we want to ensure that consumers of public services are empowered to raise concerns and that service providers learn from those complaints. In March, the Public Administration Select Committee published a report following its inquiries into complaint handling across government and the role of the Parliamentary and Health Service Ombudsman. As my right honourable friend the Minister for Government Policy made clear at the time, we agree that the ombudsman can play an important role in improving complaints handling and we are committed to working collaboratively with the Parliamentary and Health Service Ombudsman and other public service ombudsmen to deliver an accessible and effective complaint-handling process from first contact with a service to final resolution by an ombudsman.
There is now a set of choice frameworks covering NHS care, social housing, schools, funded early education and adult social care. These documents clearly set out the choices available to service users, as well as instructions for seeking redress if those choices are not satisfied. To offer clarity to the noble Baroness, Lady Hayter, these frameworks tell the consumer who is responsible and who to complain to. We are now looking at new digital channels for the public to register complaints about public services. This is in response to the Public Administration Select Committee’s report on complaint handling in the public sector. By way of example, we are working with the Department for Work and Pensions and the Land Registry on initial trials during the autumn.
On independent advocacy, as we said before in Grand Committee, we also prioritise making sure that consumers know their rights. Consumers of public services have access to advice, information and advocacy from government-funded channels such as Citizens Advice or GOV.UK. In addition, other bodies such as Age UK act as consumer advocates, especially for more vulnerable consumers.
Citizens Advice provides much of this advocacy. A spokesman was asked in the other place about including reforms to public services within the Bill. He said:
“I am not sure about that, if I am honest. It is not something that we have thought through sufficiently to get to a yes or no answer to that question. There are other ways of dealing with public sector services problems than a consumer rights Bill”.
When asked the same question, Which? said that,
“there are so many things that could fall within the scope of the Bill or could be added to it, and it could become unwieldy. So it is a question of priorities”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 7.]
I agree with those views. Public services are indeed important. We are committed to their improvement, but that is ongoing—outside this Bill.
Moving to the regulated sectors and Amendment 105A, it is important that consumer rights in regulated sectors are protected and that they are given sufficient information to make informed decisions. Regulators already have a statutory duty to look after consumer interests and must report annually on how they do this. Also, consumers within the sectors regulated are represented by relevant consumer bodies: for example, the Consumer Council for Water, Passenger Focus and Consumer Futures, which is now part of Citizens Advice.
There is also a lot happening to ensure consumers are able to get the best possible information across the board. In 2012-13, Citizens Advice helped 2.1 million clients through its bureaux with free advice. There were nearly 1 million contacts through its consumer helpline and also 14 million hits to its website. Some 91% of consumers reported that they would use the service again. This service reports to Government twice yearly on its performance against agreed standards.
Noble Lords can therefore feel reassured that regulators indeed do a lot for consumers already. With regard to the provision of advice and information, Citizens Advice reports twice annually on its performance. There is also much being done both by regulators and government to help consumers. Therefore, the amendment proposed is an unnecessary duplication of effort. I ask noble Lords not to press their amendments and to withdraw Amendment 50K.
Baroness Hayter of Kentish Town
My Lords, I thank my noble friends Lord Knight and Lord Whitty for the questions they raised and for their support. The public service issue is really interesting. It is no secret that now that universities have realised that it will affect them, one or two are getting a little jumpy. That shows what a very good Bill we have here. There is an interesting thing between those students who would pay a fee—the word in the Bill is “consideration”—and those who would not, where the latter would not be in as good a position as regards their rights. We will come back to this when we move an amendment on higher education. It might be useful at that stage—I give a bit of notice—to tease out some of those things. There was a lot of interest in this from colleagues around the House, many of them chancellors of universities, who I think have already been in touch with the Minister. Certainly, those of us interested in consumer rights are very happy that it will cover this, but I know that some clarity will be needed.
Working backwards, I am very sorry about the comment on regulators. As someone who chaired one of the consumer panels, was vice-chair of another panel and sat on another, it was not the same as being embedded in and a member of the regulator. Partly, you do not get things until they are more or less in the public domain, by which time of course decision-making is a long way down its route. Actually, it is in getting questions asked at the beginning, and the beginning of the formulation of policy and decision, where we want to embed a real consumer voice.
Baroness Hayter of Kentish Town
I think that I have made the point that the difficulty, even with consumer panels, is that they are not included at the beginning of policy development. That is even more the case as regards external bodies such as Citizens Advice, which see something only once it has been published and are therefore always in the negative position of trying to take action afterwards. As my noble friend Lord Whitty said, the whole point is to get the voice of the consumer absolutely embedded into the way in which the regulator defines the problem, what it looks for and how it does its research.
I want to make only one other point in response to the Minister on the issue of signposting to an ombudsman. She mentioned that Robert Gordon is looking at—and I welcome the report he is preparing—the possibility of there being a single ombudsman. The Minister said that it might be premature to require signposting but it seems to me that whatever we come out with, the issue of signposting will still be key.
Baroness Jolly
I think that the noble Baroness may have misheard me. What I actually said was not that it would be premature to signpost but that it would be premature to take action in the Bill before the review was completed.
Baroness Hayter of Kentish Town
While I understand that, the only action that we want is on signposting. If anything were to be commissioned, signposting would have to take place, and whatever Robert Gordon comes out with, that requirement should still be there. Indeed, if there were to be a single ombudsman, there would have to be a new name and, no doubt, a new location and website. It would be even more important to signpost.
As I said, we will come back later to the issue of public services, in which I know there will be a lot of interest. However, I hope that the Government will look at the regulators. Even if it is not in this Bill, they could still take action with each regulator because the issue represents the other side of the Bill. It is not simply about providing consumer rights but about making sure that those rights are looked after by every regulator. I beg leave to withdraw the amendment.
Lord Whitty
“Access to data
Schedule (Access to data) has effect.”
Lord Whitty
I shall speak also to the rather more substantial Amendment 81A for which Amendment 50L is the paving amendment. For this purpose I have briefly and temporarily transformed from a humble Back-Bencher to speak on behalf of the Labour Front Bench, but it will not last.
These amendments are about access to data for consumers. It is true that under existing data protection legislation British consumers have a legal right to request access to the personal data that businesses hold about them, but the majority of consumers have no idea of that, very few of them do it and, for those who do, it takes an inordinately long time to get the information out. Which? did a survey indicating that for those who do, it can take up to 40 days.
The Government are seized of this issue because in 2011 they set up the midata project, which is a voluntary programme covering four specific sectors. They are very important sectors, but there are only four: energy, mobile phones, providers of credit cards and providers of current accounts. The aim was to give consumers better access to their personal data in portable electronic form. The midata project has so far been somewhat disappointing. After 2012, the Government took an order under the Enterprise and Regulatory Reform Act to compel businesses within those areas to release consumers’ consumption and transaction data in a machine-readable portable electronic form on request. This has not really worked, and there has been no extension beyond those sectors. Data sharing between individuals and service providers and between intermediaries and those suppliers is still clunky and limited and, particularly for vulnerable consumers, difficult and potentially hazardous.
Our amendment in the new schedule which Amendment 81A would introduce is designed to tackle these problems by, first, ensuring that access to data is clearly a key consumer right and, secondly, by making sure that the Government use the powers that, in general, they already have to ensure that consumers are able to access portable data through the midata project and the provisions of the Enterprise and Regulatory Reform Act. That includes engaging third parties—the so-called next generation intermediaries in particular—to that data with appropriate protections. That can lead to redressing the balance significantly by at least allowing for the possibility of some collective bargaining for a group of consumers.
The amendment also asks the Government to report on other sectors to which the present midata provisions should and could apply; provides for traders to have to ensure that they have the best information; ensures safe data handling, including the consent of the individuals concerned and the appropriateness and identity of those concerned; and ensures that where there is a public benefit from generalising that data on an anonymised basis, it is genuinely anonymised and that consumers know their rights about their own data.
This amendment requires the Government to use their existing powers and to report back on how those powers should be extended. It requires them to look at other services and at the interplay with the intermediaries. First-generation intermediaries are what we call, generally speaking, comparison sites. There are problems with the quality of the data in comparison sites, as recent reports have shown. It is not always clear what range of companies within the sector comparison sites cover, nor is the commercial relationship between the comparison site and the providers clear.
The authentication of comparison sites is not yet substantially in place. The former Office of Fair Trading attempted to establish a confidence code. In the energy sector, there was a point when my old organisation, Consumer Focus, was subcontracted by Ofgem to look at the effectiveness of comparison sites, but there is no overall approach to ensure that those sites are genuinely doing the intermediary job of providing a range of information that would ensure that consumers can make a sensible and understandable choice. Millions of consumers benefit from access to comparison sites, but some sites are significantly better than others. Some are more subject to possible corruption—although corruption may be too strong a word. The relationship with the people whose information they provide to consumers is on a commercial basis and excludes other providers. This is an area in which the Government should intervene, as technology allows us to move further into the use of consumer data in these areas.
My noble friends under earlier amendments referred to the issue of the public sector, which also runs major projects on consumer transactions, particularly in the NHS and social care. Access to and knowledge of that information needs to be covered by any regulation and any provision of extension of rights for consumers on the data that public services provide. That includes not only the public services in the sense of the NHS itself but those organisations commissioned by the NHS to provide public services—so when they are outsourced, data also need to be covered by the provisions. We need tough penalties for the public sector as well as for the private sector when such information is misused.
This is a wide area on which we are asking the Government to report, but an important one. An empowered consumer should be able to rely on these intermediaries to present the information to them and to ensure that their own transactions are not misused in the compilation of both the providers’ and the intermediaries’ use of data. I would hope that the Government could at least accept the principle that a report on these areas should be required and should be, in our words,
“within six months of the passing of this”,
Bill, so that we can look at what further provisions are necessary. Then we can protect the consumer while enhancing the effective use of data and access to data in a way that empowers rather than threatens consumers, particularly the more vulnerable ones. I beg to move.
Lord Knight of Weymouth
My Lords, I strongly support this amendment. There are many good reasons to want to extend access to data for consumers of both private and public services. When Tim Berners-Lee famously invented the world wide web, he as famously said, “This is for everyone”. The use of digital products and services is something on which consumers are demanding movement, given that they observe a concentration of power over the internet in five companies globally, and have an increasing concern over the privacy of their data.
To give those consumers access to their personal data, as a starting point, is a way of giving more public reassurance about how their data are being collected and stored. It is also important in respect of innovation in the delivering of services. We have seen in public service delivery terms some of the innovation around the use of personal budgets. The ability to bring together services is an aspect that the use of personal budgets has demonstrated. That in turn can be significantly enabled by the use of personal data.
The register shows that I am the chair of the Tinder Foundation. It is nothing to do with the dating app, more to do with the organisation that runs all of the UK online centres. It is the main digital inclusion delivery organisation here in the UK. I am aware of the issues around exclusion by dint of access to technology and access to age; but I am also aware of some of the extraordinary stories of how people using data and using technology are able to join services together and improve their own personal outcomes.
I am also deputy chair of the Nominet Trust, which is a trust funded by Nominet, which registers domain names, to invest in social innovation, and I see some of the extraordinary innovation that is starting to come through from, largely, the voluntary sector, but also the private sector and just occasionally the public sector. It is that innovation that I am particularly keen to see. So I am delighted to see in this new schedule a section around access to information on public services.
If, for example, I had a chronic health condition and I went to see my GP, it would be great if the GP could say, “License to me just for five minutes, so I can put them through this digital tool, your shopping data from, say, Tesco, along with some of your health data, and some of your housing data”. The GP could see my lifestyle through the temporary licensing of personal data and then be able to give a much more accurate diagnosis of what was going on, how I might make some lifestyle changes and perhaps reduce my reliance on prescription drugs because some other behavioural changes can have a better outcome than use of those drugs. Similarly, I can see how advisers working for Jobcentre Plus could join up data on a temporary basis and provide a much more personalised service for people. Also, when I look at the GOV.UK site for its explanation of midata, it gives the important reason of improving buying choices for consumers as one of the reasons why it has set up midata.
This amendment is exceptionally modest in what it asks the Government to do. It is asking the Government merely to report. It is not really asking the Government to do very much except tell us what is going on. In that respect it is highly flexible; it accepts that there may implicitly be some burdens on small and medium-sized enterprises and that the Government will need to tell us which regulated persons should provide consumer data—so it is perfectly reasonable in the way that it has been drafted. It is the natural next step on from the Data Protection Act to the Enterprise and Regulatory Reform Act of last year that we should be pushing further on this. These digital services are moving extremely quickly, and it is important that this Parliament shows the same agility that is being shown in the outside world. I strongly support these amendments.
Baroness Wilcox (Con)
I found it quite frightening listening to what the noble Lord was saying there. That sounded like the beginning of a great fire that he was putting his foot into. I go to my doctor and give him permission to find out data from me: where I shop, where I do this, where I do that. It is a simple thing to say, but where does it move next? I go to my moneylender and he says, “Well, tell me about this, give me permission to see that”. This sounds terribly frightening to me.
Baroness Oppenheim-Barnes
On the same point, I am appalled at what is being proposed for doctors. As things are, they never look at their patients any more. They screw up their eyes and look at the screen; they cannot see the current condition of their patient. On a very good World Service programme a little while ago, three people were interviewed about the medical profession. One very prominent doctor in America, who had previously been in the deepest jungles, said that doctors in America could not compete with those in the jungles because they knew their patients and their patients’ background and did not sit staring at a screen instead of at the patient.
Lord Knight of Weymouth
The noble Baronesses articulate concerns that I know are active, and they do a great job in doing so. I am not suggesting that doctors should have rights to any of that data but that it would be up to the individual patient as to whether they temporarily license that data, to assist—
Baroness Wilcox
A patient who has gone to a doctor is more than likely not feeling well and is frightened and looking for any help they can get. It is so easy to say yes and to open up that can. It is such a dangerous subject to put in as a lightweight amendment to a Bill like this.
Lord Knight of Weymouth
My Lords, I was using an example that I thought was perfectly realistic. We have seen with the furore around how care data have been handled or mishandled by the Government that the subject of health data is very sensitive, so perhaps I should have used a different example. However, personally, I am of the view that there are times when I want people who are advising me and the professionals assisting me to have rich sources of information about me and my condition, and that is a decision that I can make.
We need all to ensure that we are properly informed as consumers—and this legislation is trying to do that. To me, data are not a scary thing as long as we have proper individual rights over them. What scares me is that I cannot see what data people have about me and I cannot see how other people are using them. I may have some rights through the Data Protection Act but that does not give me any rights to see digital data. It gives me rights to see things on paper. Tesco can come and deliver in a pantechnicon all the data that it has about me, but I cannot then manipulate the data, which is in the end what I would really like—the ability to see them, manipulate them and then decide what I want. There are examples where you might want to use some of your data and license them on a temporary basis to people who then advise you so that they can better personalise their services. But that is a debate that this House should and I am sure will have.
Baroness Jolly
My Lords, Amendment 50L, proposed by the noble Baroness, Lady Hayter, and the noble Lords, Lord Whitty and Lord Stevenson, and the accompanying schedule are about consumers having wider access to the data held on them. I make it clear that the Government support the principle that the public should have access to the data that is held on them; it is in line with our open data policies and activities and with the approach we are taking to the new European data protection regulations. We embrace the principle that, when social benefits can be obtained from anonymised datasets—so-called big data—that should also be supported. That is why, alongside the midata programme, which is concerned with commercially held data, we are also exploring how the data held on individuals by government departments might be made available to those individuals in a useful way. This work is in its early stages, but it is designed to ensure that individuals have access to the information that is held about them by the public sector. It is probably worth mentioning now that the Secretary of State for Health has committed that by 2015 we should all have access to our full health records. In parts of the country where this has been trialled, it has hugely empowered individuals.
I turn now to personal data held by companies and the midata programme. There have been two developments this year that are relevant to the debate. In the personal current account sector, we secured a commitment earlier this year from the big banks to provide consumers’ transaction records—their midata—as downloadable files with a consistent format. This work is progressing well and in June we were able to announce that the technical specification of the data fields to be made available has been agreed. This is no mean achievement. The work is on track to be completed by the end of March next year. This is something that Which? and the comparison sites have been calling for, and so it is very encouraging that the large majority of current account holders in the UK will soon have easy access to their midata files.
The second development is in the energy sector where the facility to download midata files has been available for some time. The Secretary of State for Energy and Climate Change and the Minister for Consumer Affairs held a round-table meeting in June to discuss how the user experience of comparing the market could be made easier using automation. The round table involved energy suppliers, comparison sites, app developers, consumer groups, the Connected Digital Economy Catapult and Ofgem. As a result, a working group comprised of representatives of all these stakeholders has been looking at the feasibility of providing third parties with automated access to consumers’ energy data at those consumers’ request and with their explicit consent. This will avoid the rather tedious process for many of looking for their energy consumption and manually filing it in an online form in order to get an accurate comparison.
The noble Lord, Lord Whitty, raised the issue of collective switching, which is becoming very popular and is reducing energy bills for those who engage. In 2013, DECC awarded 31 successful projects a share of a £5 million competition for collective energy purchasing. I am pleased to report that the work has gone well and that a second ministerial round table at the end of the month will discuss the rollout of this project. The Government hope that the facility for consumers to compare deals quickly and with accurate energy consumption will be available this winter. Again, this is something that has the support of consumer organisations as well as the comparison sites.
The noble Lord also raised the issue of the Consumer Focus Confidence Code. In energy, Ofgem has taken over the former consumer confidence code. Other regulators such as Ofcom and the FCA also oversee comparison sites. In July, the Minister for Consumer Affairs published the results of a review of the voluntary approach to the midata programme that has been followed so far. It addressed the issue of whether the Enterprise and Regulatory Reform Act 2013 powers that became available to us were needed to speed up implementation. The conclusion of the review, in the light of the good progress I have described, was that it is not useful to proceed with legislation at the moment, but that the situation would be kept under regular review. Similarly, where it may be useful to apply the powers to other sectors, the Government are open to this where there is a strong case that doing so would deliver tangible benefits that a voluntary programme could not. The amendment encourages us to go faster and to use the legislation to force the pace. This could disrupt the voluntary programme which has already achieved a great deal. While it is a useful challenge, we do not need new laws to do this, as I hope I have demonstrated; we are doing it already.
The amendment also proposes that the midata powers should be extended to all services provided by the public sector. I have referred to work that is under way to explore how data held on individuals by government departments may be made available to those individuals in a useful way. I have also explained the reasons why services not provided by a trader to a consumer under a contract are not covered by this Bill. The amendment proposes that the Bill should require a report on the information that is provided to consumers about the services they may be commissioning themselves. A good example of where this is already happening is in the provision of care and support under the Care Act 2014. The obligations of local authorities to provide the information people need in an appropriate way are set out in statutory guidance that was published last week. This is just one example of where I believe the Government are already delivering what is being asked for in this amendment.
Finally, the amendment asks for an annual report about the impact of government policies in these areas. I have already talked about the Open Public Services agenda, and the Cabinet Office publishes an annual report on its work on this agenda, which has as an explicit objective to give people the power of choice about what services they receive and the information and insight they need to support that choice.
This year’s report was published in March on the GOV.UK website. One example given is about supporting parental choice on education: the Department for Education’s school and college performance tables provide parents with detailed performance data on primary and secondary schools and providers of 16 to 18 education. The tables received 2.8 million unique visitors in 2013. They provide contextual information, including absence rates, workforce numbers and finance and school census data. The Ofsted School Data Dashboard, which has received 800,000 unique visitors since it was launched in February 2013, provides an analysis of school performance over a three-year period, adding further insight to support parents.
In the light of what I have said, I hope that the Committee is persuaded that the Government take the provision of information to consumers of both public and private services seriously and that good progress is being made. I therefore ask that the amendment be withdrawn.
Lord Whitty
My Lords, I am grateful to the Minister for outlining the developments that have taken place in midata and related projects in recent months. Clearly, the Government have in mind the need to address some of the problems that arise from this range of data and the opportunities that they give and the dangers that they present.
The exchanges between my noble friend Lord Knight and the noble Baronesses, Lady Oppenheim-Barnes and Lady Wilcox, indicate the difficult road that we have to travel on this because there are some serious potential public benefits from the use of aggregated data and their use in individual circumstances provided the individual understands and knows that that is what is being done to their own individual information and has clearly consented to that.
In many fields this is not yet an issue but it will become one in a range of fields, as was recognised when the midata project was first being discussed. I am grateful for the information on the progress that has been made in relation to current accounts, for example. The purport of my amendment is not to tell the Government where they are to draw the line or where the need to protect the consumer should prevent potentially beneficial use of the data, or vice versa—that is, where the rights of the consumer could be overridden by the use of public data—but to assess across the board where we are on all this.
We ask for a report within six months. That may be a bit fast given that one or two other things have to happen within the next six months. However, the Government should pull all this together within a reasonable period. This is not a prescriptive amendment; it would require an overall analysis by the Government. I still think that is necessary. Some big issues are involved here and there is great potential in both the public and private sectors but there are also issues around confidence, control and vulnerability on the part of individual consumers which also need to be addressed, and I do not think that an entirely sector by sector approach will be sufficient.
I hope that the Government will consider this again, perhaps over a slightly longer timescale than is prescribed in the amendment. We will have to return to this issue at some stage, not necessarily during the passage of the Bill, but within a relatively short period of time. In the mean time, I accept that I should withdraw the amendment.
Baroness Oppenheim-Barnes
“Display of information about rights under this Part
(1) Suppliers of goods and services to which this Part applies shall be required to display at the point of sale information in plain and intelligible language and in a reasonable format which explains to consumers the relevant rights of consumers under this Part.
(2) The “point of sale” in subsection (1) means—-
(a) the trader’s premises;(b) any other premises at which the contract is agreed;(c) if the contract is agreed via the trader’s website, that website.(3) If the contract is agreed via email, the requirement in subsection (1) is for the information to be given in the email offering or (as the case may be) accepting the contract.
(4) If the contract is agreed orally but outside premises as mentioned in subsection (2), the supplier must at the point the contract is agreed give to the consumer a written notice containing the information required by subsection (1).”
Baroness Oppenheim-Barnes
My Lords, I start by apologising if I repeat things that I said at Second Reading but I regard all three of my amendments that I have tabled as a dress rehearsal for Report. I am particularly grateful to have been joined in support for these amendments by two other former chairmen of the National Consumer Council: my noble friend Lady Wilcox and the noble Lord, Lord Whitty.
My first amendment, Amendment 51, is something that I feel deeply about and is important to any sort of success in the Bill. I think of all the years that I and others have spent introducing consumer legislation and sitting on Committees—Second Reading Committees and other Bill Committees. At the beginning the of the Bill’s Committee stage in the other place, witnesses were called from all three consumer bodies that are best known and have the most experience. The stunning information that they gave was that 75% of all consumers had no idea of their rights or obligations. Therefore, every piece of past consumer legislation that I and others have been involved in has proved to be fairly worthless. We now have this important Bill, which is very welcome and comprehensive, and on which the Government have spent time, involving witnesses and great expense. We should realise that without this amendment, we might all be wasting our time.
Not only do consumers want this legislation but businesses do, too. The British Retail Consortium said that it would be only too happy to join in this. The point of sale is the point at which the consumer decides to buy the goods or pay for services. It is essential that they know what their rights and obligations are at that stage. This is possibly the most crucial of all amendments because without it the Bill could simply go through, be welcomed by all who knew about it—certainly by most noble Lords here—and be worth nothing. This amendment, I hope, is the first crucial step in righting that wrong. It probably needs more detail by the time it comes to Report, and needs to provide precisely what information is required. I was very impressed by similar amendments tabled by my noble friend Lady Neville-Rolfe regarding goods bought online, which will be covered in this way.
This is a matter for which under no circumstances would I accept anything less than approval. It is fundamental; it says what it says quite clearly. I am grateful to the National Consumer Federation for helping me to draft these amendments and for its support. I hope that other Members of the Committee will also be in support.
Lord Blencathra
My Lords, I support my noble friend in this amendment, in particular subsection (4). I am glad that my noble friend used the word “obligations” because if I had looked at this earlier I would have wanted to move an amendment calling it “Display of information about rights and obligations”, because that can have a greater impact on the consumer. I support the amendment because I concluded, in the last few years that I was a Member of Parliament in another place, that some of the worst cases coming to my constituency surgeries were people who had been stitched up by the big utility companies and the mobile phone operators. In many cases there were only oral contracts. When they had a concern, they would get on to the helpline. As innocent constituents, they kept making the mistake of thinking that if they phoned and got through to the special helpline the problem would be solved. Of course, the people on the special helpline would say, “Yes, that’s fine, we’ll take your point into consideration and it will be amended”—but still the threatening letters and the bailiff’s letters came because, very often, the people running the helpline had no power to alter the computer accounts for the company.
A written statement is absolutely essential if there is an oral contract. As the noble Lord, Lord Harris of Haringey, pointed out that we seem to go by personal example. I shall cite one example of why I think the mobile telephone companies in particular are among the worst offenders. Some years ago, I took out a contract for a mobile phone. It was clear when I had the paperwork the first time that, if I cancelled the contract within two years, I would pay a heavy penalty. I was content with that and went blithely on my way. As it transpired, exactly 23 months later, I got a telephone call, “Hello Dave, it’s your mobile phone operator here—do you realise, Dave, that you can get a better tariff from us? We’ve looked at what you pay and you can reduce the Bill by about £2 a month, and you’ll get a free telephone upgrade”. I thought that was jolly good and asked what the catch was. “Oh, no catch, Dave, that’s it”. So I agreed to it. A few months later, when I fell out with that telephone company because I did not like the service and wanted to cancel, they said, “You can’t cancel, your contract’s only three months old”. I said, “No it’s not—it’s 27 months old”. “Oh,” they said, “that telephone call you had created a new contract”.
I appreciate that all of you here are commercially savvy and knew that, but in 2009 or 2010, I did not realise that. But then I found more and more constituents with the same problem. They were being sold things over the telephone, particularly electricity contracts from one particular supplier, and they never got the follow-up paperwork. It is absolutely essentially that when any contracts are made or revised orally, the consumer gets a written statement pointing out their rights and obligations. I hope that with changed or improved wording my noble friend the Minister will be able to accept the principle of this amendment.
Lord Harris of Haringey
My Lords, I should add that this is not simply about protecting the consumer—poor Dave, or whoever else it might be. It is also about protecting the legitimate businesses that are operating properly, because it makes it more difficult for those trying to pull a fast one on Dave or anybody else, because they will not get away with it. For that reason, to protect the consumer and legitimate businesses, I hope that we get some progress on this amendment.
Baroness Wilcox
I shall make only a brief comment because I want to hear what the Minister is going to say. It would be useful to reflect upon the fact that the National Consumer Federation is the only consumer organisation in the country that is not supplied with money from anyone other than its members. It is a small organisation that was set up originally by the National Consumer Council and Which? because they wanted a grassroots response rather than simply remain in their ivory towers writing their great papers. I was the chairman, then my noble friend Lady Oppenheim-Barnes, followed by the noble Lord, Lord Whitty, who took it to greater heights. For a small group like that to have got as many people into this Room as there are at this moment says good things about our country and about our consumer representation. There is always a place for a small group which can get someone like my noble friend Lady Oppenheim-Barnes to take it forward. I am very proud that she has done so.
Baroness King of Bow
My Lords, I support Amendment 51 tabled in the names of the noble Baroness, Lady Oppenheim-Barnes, and my noble friend Lord Whitty. My Amendments 48B and 50G were spoken to last Wednesday, but they were originally grouped with Amendment 51. I know that the Committee is pushed for time, so I will not repeat in detail the arguments that we had around point of sale. Suffice it to say that if consumers do not have clear and transparent information, their consumer rights are effectively undermined. That is the crux of the matter and it is the argument which has been made again now.
This is an amendment essentially to ban smoke and mirrors and to ensure that consumers actually get their rights in practice as well as in theory. The noble Baroness, Lady Oppenheim-Barnes, said how deeply held her feelings are on this matter, and she is quite right. We have to get the basics right. To my mind, this amendment will serve to do just that. Without the basics, consumers will not have their rights safeguarded. For those reasons, we are delighted to support this amendment.
Baroness Jolly
My Lords, as I said when we discussed point of sale information for goods and services in previous sessions, the Government believe that it is really important that consumers should feel confident about exercising their rights. Last Wednesday the noble Baroness, Lady King, reminded us that Martin Lewis from moneysavingexpert.com had stressed the importance of a simple and clear version of our consumer rights when he gave evidence to the BIS Select Committee on the Bill. We agree with him, which is why I am delighted that moneysavingexpert.com is one of the consumer organisations that is working with us on the high-level summary of consumer rights that the Minister and I have mentioned on a number of occasions. This summary covers our rights when we buy goods, services or digital content, and members of the implementation group are working to ensure that it is written in plain English.
In the debates relating to previous amendments concerning the requirement to provide consumer information at the point of sale or at the point of complaint, I set out the Government’s objections to requiring every single business providing goods, services and digital content to set out a consumer’s rights every time they make a purchase. Perhaps I may briefly reiterate. These were, first, that consumers are already faced with a lot of information at the point of sale, and I suspect that most of us are not going to take in information that is not immediately relevant to our purchase decision. Secondly, it is will be particularly irritating to be faced with an oral statement or handed a piece of paper setting out our rights every time we buy a newspaper in the corner shop or arrange by phone to have the dog walked—not to mention the burden this would place on the trader. Thirdly, it could cause significant confusion where the trader’s own policies were more generous than consumers’ statutory rights or where sectoral regulation of services requires specific remedies that the trader must offer.
My noble friend the Minister mentioned the concerns of a major retailer that a requirement to set out a consumer’s basic rights would completely undermine its core message. This was that a customer who is dissatisfied for any reason could bring the product back because it wanted to do what it and the customer thought was right in the circumstances, even if that went beyond what the law would require.
In answer to a point made by the noble Baroness, Lady Oppenheim-Barnes, the British Retail Consortium has said that it would happily join in providing information at the point of sale but does not support the mandatory provision of consumer information for reasons I have given. The BRC, the Federation of Small Businesses and the British Chambers of Commerce all oppose this too.
Fourthly, it would be perplexing for consumers to have to have their attention drawn to their full rights at every point in the complaints process even in circumstances where they have said what they want and the trader has immediately agreed.
On the point made by the noble Lord, Lord Blencathra, on consumers who are sold things over the telephone and have no written follow-up, the consumer has to be given a range of pre-contractual information under the Consumer Contracts Regulations 2013, so a situation in which a consumer does not know they are entering a contract should no longer arise, with effect from 2013. For all these reasons, we do not believe that requiring this information to be given to all consumers before they purchase goods or services or, indeed, afterwards, would achieve the best outcome for consumers or for businesses.
Lord Harris of Haringey
The noble Baroness gave the horrifying image of someone’s rights having to be read to them before they could buy a newspaper. Would her objection to this provision disappear if there were a de minimis element within it so that the transaction had to be worth more than £5 or £25, for example? It would be helpful to know that. Secondly, is the argument that consumers will be confused if they are told that they have more rights rather than less the best that the Minister can deploy, because that is essentially what she said? Given that the noble Baroness, Lady Oppenheim-Barnes, suggested that she might bring this amendment back on Report, it is important that the Minister who is to reply on that occasion deploys some rather better arguments.
Baroness Jolly
I can rely on the noble Lord, Lord Harris of Haringey, to put me on the spot. The de minimis element of £5 may be worth looking at but that sort of decision is considerably above my pay grade. Noble Lords should consider how irritating it is to listen to commercial adverts. The advert itself may be absolutely fine but then all the rights are read out so quickly that you cannot take them in, or at least I cannot do so.
We have strong backing from business organisations to promote the summary of consumer rights to their members on a voluntary basis. It will be a central tool that we provide to businesses in April. It will help them comply with the new obligations they will have and explain these rights to their customers, so avoiding costly shop-floor mistakes that undermine their reputation. We do not need every single retailer in the country to be obliged to display the summary of consumer rights to achieve our objective of increasing consumer knowledge and confidence but we will be looking for a significant take-up. We consider that this approach, supported by Which?, will be far more effective, and far less burdensome, than the mandatory approach proposed by these amendments. Therefore, I ask the noble Baroness, Lady Oppenheim-Barnes, and the noble Lord, Lord Whitty, to withdraw this amendment.
Baroness Oppenheim-Barnes
I am very disappointed because the response we have had sounds like a wonderfully constructed Civil Service briefing. There is a very simple definition of merchantable quality. When I was Minister of State for Consumer Affairs, I was already very concerned about people not being aware of their rights. I therefore introduced an education pack into schools. I introduced it in every type of school. First, the children—young men and women—concerned were very interested. They did not find any difficulty in defining merchantable quality. One, who was only 10 years old, said, “My mother just bought a knife that says it was extremely sharp. It doesn’t cut anything. Is that merchantable quality or not?” That is simple to answer. I am not suggesting the kind of information provided at the point of sale needs to be complicated; it is very important that it would be drafted in a way that was comprehensible to most people, not too long and not too detailed. If this amendment was finally passed I would want to have a great deal to say about a description of merchantable quality, both from experience and, believe it or not, from school children.
Baroness Oppenheim-Barnes
“Application of this Part to regulators
(1) This section applies to regulators which are involved in protecting consumers (“consumer regulators”).
(2) It shall be the duty of consumer regulators to promote the rights of consumers under this Part.
(3) In exercising their functions, consumer regulators shall have regard to the desirability of promoting—
(a) accurate, plain and intelligible information for consumers about goods and services;(b) fair and reasonable practices in the selling of goods and services;(c) fair and reasonable pricing of goods and services;(d) the inclusion of comprehensive information on goods and services in contracts;(e) quick and fair means for consumers to make complaints and have disputes resolved. (4) Any fines levied by a consumer regulator on a trader for breaches of rights under this Part shall, following deductions by the regulator for its reasonable administration costs, be used to compensate consumers for breaches of their rights under this Part.”
Baroness Oppenheim-Barnes
This amendment is also very important. It is common knowledge that not a great deal is known about the actual defined duties of the regulators. I remember when I received the first Monopolies Commission report in my department, to the effect that the nationalised electricity industry was of positive disadvantage to consumers for all sorts of reasons. At that point we were able to start looking at privatising the industry, because one of the most cogent parts of the report was that it was not operating either in the interests of its customers or of its employees, which was true. So we then started to embark on a long series of denationalisation and privatisation of the utilities. When we did so, it was implied that the regulators would be very important, they would have great powers, and that they would exercise those powers on a regular basis, and also investigate. There has been a feeling recently that the regulators are not necessarily asking all the right questions.
Once again, the National Consumer Federation has given a number of examples which refer to the actual requirements as far as these people are concerned. It is its job to identify risks, scan the horizon and use consumer insight, creating the right incentives for the market to work well for consumers, ensuring that the data is published, and working closely with other regulators. It does not give the impression of being in touch at all at the moment. It needs to involve consumers and their representatives, including consumer bodies, to have a regular dialogue. What is most important is to ensure compliance with licence conditions and other rules through investigations and effective enforcement as well as imposing penalties for firms which, as we know, often amount to many millions. Only recently one of these regulators has, for the very first time, insisted that in the case of that particular fine, a certain amount had to be paid in refunds to consumers as a result of the firm not doing what was necessary, or what the regulators required them to do.
The very important first move that I would like to see, as part of this amendment, would allow them to go a lot further than that. We hear about the multimillions that are paid in fines and we are not sure where it all goes, although we know that it goes to the office of the regulators. But there is no reason now why my proposal should not be a requirement on regulators, without any real change of law, when a really bad result, certainly as far as consumers are concerned, has led to a fine. This is another very important amendment, because it is very basic and deals with problems that a lot of people do not comprehend today. They see these big fines—they read about them in the newspaper—but do not actually see them directly benefiting them. They will do, but it is not all that clear.
As I said, this amendment is a quick and fair move for consumers to make complaints and involve themselves in disputes, and also proposes, in subsection (4), that these,
“fines levied by a consumer regulator on a trader for breaches of rights … shall, following deductions by the regulator for its reasonable administration costs, be used to compensate consumers”,
who have been put at a disadvantage. Again, this is not asking the Government to do anything but to define more clearly the role of the regulator: what it should be and how this should be carried out. I beg to move.
Baroness Maddock (LD)
My Lords, I support my noble friend on this, partly because during the passage of the Energy Bill—the noble Lord, Lord Whitty, was there when we did this—I managed to get the Government to accept my amendment to promote more accurate information on energy bills. In reading my noble friend’s amendment here, I would like the regulators—just as in my amendment that is now law—to “uphold” rather than “promote” in subsection (2). I would also want them to be “upholding” rather than “promoting” in subsection (3)(a), with reference to energy bills. That is something that they should make sure happens. It is part of the law. I strongly support my noble friend here. It would be very good if we could get this in other areas. We have something rather better in energy bills thanks to the Government accepting an amendment last year in the then Energy Bill.
Lord Berkeley (Lab)
My Lords, very briefly, I support this amendment. Subsection (2) says:
“It shall be the duty of consumer regulators to promote the rights of consumers”.
I have been looking at the duties of Ofwat, the water regulator. It says that,
“our primary duties are to: … protect the interests of consumers, wherever appropriate by promoting competition … ensure that the companies properly carry out their functions … ensure that the companies can finance their functions”,
and,
“ensure long-term resilience”.
In the case of Thames Water, which is the biggest water utility, the regulator over the past 10 years has allowed the company to reduce its asset base to about a quarter of what it was, so it cannot now finance the tunnel that it wants to built under the Thames—the Thames tideway tunnel—without going into a kind of complex financial structure involving a separate infrastructure provider. The relationship between the infrastructure provider and Thames Water is extremely unclear. Who is liable if something goes wrong? That is also unclear, but the Government have been very nice and given them a guarantee if they run into financial trouble, because the provider is Macquarie Bank—and we would not want it to get into financial trouble, would we?
The extraordinary thing is that the regulator seems to think that this does not need any questioning or that any information should be given to the 12 million customers of Thames Water who are going to have to pay. There is a debate about how much they are going to have to pay a year, but it will be somewhere between £60 and £80 extra. This is a sewage charge, but all the people living in Oxford, Witney, Newbury or anywhere which is part of the group, even though they are not going to benefit from the Thames tideway tunnel, will have to pay. I think the regulator has been asleep on the job.
This amendment should make things better, but Ofwat already has a primary duty to protect the interests of customers, and it is clearly not doing so. Therefore, this amendment, if it is accepted by the Government, should put more pressure on it and some of the other utilities to do what they should do: to look at the needs of the customers, see whether there is an alternative and keep customers informed about what is going on. It is a good amendment and it will be interesting to hear what the Minister says in response.
Baroness Wilcox
My Lords, as we know the regulators were set up at very different times and in very different ways. There is not one thing that all the regulators sign up to. They have all been established individually. This comes up again and again, and here it is again: who guards the guards? Who regulates the regulators? Last time round, the great argument was that we must be totally independent because then and only then can we serve the people we are supposed to serve well. I understand that, and I understand regulators wanting to keep their independence, because it is very important. However, the differences between the ways in which the regulators work and live keeps coming up, so I ask the Government: who is guarding the guards?
Lord Blencathra (Con)
My Lords, I support the thrust of this amendment. As my noble friend Lady Wilcox said, the regulators were all set up at different times and in different ways. I am not sure whether it is best to have an amendment in this Bill or to look at regulations applying to all the different regulators and toughen up their charters, so to speak. Perish the thought that I should disagree with the noble Lord, Lord Berkeley, but, leaving aside the London tideway tunnel, my experience of Ofwat was that it was slightly better than many of the other regulators because while the water and sewage industry needs billions of pounds’ worth of infrastructure development, at least Ofwat keeps a tight grip on many of the companies and guards consumers’ interests slightly better than some other regulators.
Leaving water aside, in my experience the worst regulator was Ofcom, which is utterly wet and useless in regulating telephone operators. Perhaps it is, understandably, too focused on radio and the independent television sector and on selling off 4G and things like that, but I do not feel it has been very effective in regulating mobile telephone companies.
I hope the Minister will accept the principle that regulators have to do more to protect consumers’ interests, tailor-made to their current legislation and the job they are doing in their own regulatory field. This Bill may not be the best vehicle for such legislation, but I hope the Minister will accept the principle that regulators have to do more to protect consumers’ interests.
Lord Whitty
My Lords, I, too, support the thrust of this amendment. As I said on an earlier amendment, the consumer interest has often been lost or redefined in the way in which regulators operate. They have often very effectively—I accept that some are more effective than others—looked at the outcome for consumers in terms of price and particular aspects of consumer service. This amendment requires them also to look at process—as to how customers are treated and informed and how prices are set and complaints are dealt with. It would probably be better if something relatively common appeared in the individual pieces of legislation for each regulator, but we have an opportunity in a general consumer Bill to set down the principle. I would hope that the Government could accept that the principle should be set down in something like the words here. The noble Baroness is probably pushing the boat a little far with subsection (4) in that no doubt somebody at the Treasury has already had a look at it and will be advising the Minister appropriately from that point of view. So while I support the principle, in reality the Minister will not be able to accept that—but I hope that she can accept the rest of it.
Baroness Hayter of Kentish Town
I was about to thank the noble Baroness, Lady Oppenheim-Barnes, for this amendment but, having seen all the troops she has on her side, it might be better for Labour to say, “We think this is dreadful”. It might make it easier for the Minister to accept it. However, I shall resist that temptation because I think that it is a brilliant amendment, and we are happy to support it. Earlier today we clearly failed to persuade the Government to embed the consumer voice right in the top echelons of regulators—that has been the tone of the debate—but this is another way to achieve the same end. The examples given by the noble Baroness, Lady Maddock, as well as those from the noble Lords, Lord Blencathra and Lord Whitty, about different regulators show how often, without that consumer voice, they fail to protect the consumer. The question from the noble Baroness, Lady Wilcox, about who regulates the regulators is very interesting because the answer ought to be, “the consumers”. The more that it is open to them, the better it will be.
The amendment is excellent. It would put in place the possibility of redress without consumers necessarily having to take their individual case to an ombudsman. It would ensure a proper complaints procedure for mistakes and poor service, falling short of a breach of rights, that nevertheless lead to substantial losses to the consumers. As has been said, it is extraordinary that regulators, which are supposedly in existence because a particular market has failed consumers, still often fail to put consumers first. They have allowed users to be muddled by confusing prices, ripped off by poor deals and ignored when making complaints. Consumers are often made to feel like the least important part of the food chain. As my noble friend Lord Berkeley says, it is often without their long-term interests being placed at the centre of regulators’ thoughts.
I look forward with interest to how the Minister is going to accept this amendment—because I am sure that she will.
Baroness Jolly
This has been a very interesting debate, interwoven with sorry tales about regulators. Of course, the noble Lord, Lord Blencathra, as an MP, regularly heard these tales from constituents coming into his constituency surgery. One of the regulator’s primary objectives is to take account of consumer interests. They must report annually on how they fulfil their functions, and they have done much good work for consumers. Water companies have agreed to return £1 billion to consumers after negotiating with Ofwat and the Consumer Council for Water. All but two water companies agreed in their plans to keep prices at inflation levels. Ofcom has capped second class mail prices, while Ofgem has made npower pay £55 million to consumers due to incorrect billing. However, it is also important to know that Citizens Advice does a lot of advice in this area.
I refer noble Lords back to my comments on Amendment 105A regarding the good work that Citizens Advice is doing. In addition to those comments, I shall expand on the benefits that that body provides to consumers. It promotes consumer rights and clear, intelligible information for consumers. Sixteen million people were helped through the Citizens Advice digital service, while 84% of clients said that their understanding of their rights had increased and 86% of clients reported a positive impact of advice on their lives. All this is a key port of call for consumers in the regulated sectors. I also mention that relevant consumer bodies play a vital role in this regard, especially in helping consumers on matters around redress, complaints and securing the best deals in issues such as utilities. The effect of this amendment would be to place extra requirements on regulators and increase bureaucracy when there is a drive to cut the costs of regulation and increase efficiency. The Government believe that in many cases it would also replicate protections that already exist and take away the discretion of regulators to decide what is appropriate in the circumstances.
On regulators levying fines for breach of any part of this amendment, the enhanced consumer measures set out in Clause 79 and Schedule 7 to the Bill would achieve a similar aim. In summary, there is a limited benefit in adding more duties on the regulators. Noble Lords can be reassured that much is being done for consumers by regulators, but of course we salute the wonderful work being done in the world of consumer rights as championed by my noble friend, and we will be happy to meet her to discuss the amendment. However, I ask her to withdraw it.
Baroness Oppenheim-Barnes
I thank my noble friend for that reply. She will not be surprised to hear that I am, shall we say, disappointed, but obviously I am not put off. I do not want to be accused of currying favour with the Opposition because that is not my primary objective, but nevertheless from time to time they do seem to have a closer grasp, although not as close as those of us who have been MPs and have held constituency surgeries where these things come up over and over again. There is a distinct division in your Lordships’ House between those of us who have such experience and those who do not. I think that this is one of the occasions when it shows. For the moment, I reluctantly withdraw the amendment.
Baroness Oppenheim-Barnes
“Obligations on suppliers of utilities
(1) This section applies to suppliers of electricity, gas, water, sewage systems, telephony (including mobile telephony), internet connections and analogous utilities (“utilities suppliers”) and consumers of those utilities.
(2) Utilities suppliers shall provide consumers with the options of receiving bills in paper or electronic format.
(3) Utilities suppliers may not levy a charge on consumers who opt to receive bills in paper format, and may not reduce prices for consumers who opt to receive bills electronically.
(4) Utilities suppliers shall provide consumers with the option of paying bills by cheque.
(5) Utilities suppliers may not levy a charge on consumers who opt to pay by cheque, and may not reduce prices for consumers who opt to pay by means other than a cheque.
(6) In this section “cheque” has the meaning given in the Bills of Exchange Act 1882.”
Baroness Oppenheim-Barnes
I know that this is also very popular with people throughout the country. Again, it deals with obligations on the suppliers of utilities and the way in which the regulators would actually set about ensuring that all the provisions set out in the proposed new clause are met. They define what the duties should be in relation to these utilities. Once again, I am grateful for the support I have been given by supporters of the Keep Me Posted campaign around the country in drafting the amendment.
The use of digital information is not just a matter for old crones who cannot actually operate the technology. Although I am one of them, I nevertheless realise that there are many who can but who have the same problems. I am hoping that all the various obligations that this amendment would put on the suppliers of utilities, being a little more prescriptive than the previous one, are acceptable. That applies absolutely more than ever to subsection (4) of the proposed new clause:
“Utilities suppliers shall provide consumers with the option of paying bills by cheque”,
as well as not levying a charge. I went into that part of the new clause in some depth recently when I looked up some old bills. I could see that in 2005, the postage cost 45 pence. It is now 52 pence, but the actual amount that you have to pay can be anything upwards from £6, although it is less than that for some of them. The postal costs of sending out those letters are 22p, not 45p or 52p. My noble friend Lady Neville-Rolfe said in reply to my noble friend Lord Hodgson’s good amendment on this point that it is not for the Government to tell companies how they should organise their costs. I entirely agree; it is for the regulators to do that. It is not a thing for Governments but the regulators.
Many people feel dismay when they receive these extra charges because some 7 million people do not have access to broadband. They are being fined for something they have no hold over whatever. Everyone objects to being charged for something that has been their right for many years. Suddenly they have to pay something extra, and it affects in particular the elderly and those who rely on carers. It is not only those people who are affected, although they are obviously the most important; it affects many people who do not have the computer skills they need because they say they cannot take anything in until they have typed it from the computer on to a piece of paper. That applies through all levels of education and age. I am not going to name names, but one of the most senior physicians in the country expressed exactly that view and said to me: “Can I write to someone about this? Who should I tell?”. I said: “You’ve told me”, and so have many other people.
It is a cruel policy to fine people in this way. It is a form of fine for being unable to do something digitally, perhaps due to other conditions. The subsections in the amendment deal particularly with each problem. It does not involve huge ramifications or costs for the Government. It does not even have marginally big costs for the industry; so, once again, I consider the amendment to be crucial. I am sorry to have to bring all of them out like this, one after another in a non-yielding way, which is not my normal way. I therefore hope that noble Lords will support me.
Lord Clarke of Hampstead (Lab)
Noble Lords will know that I am not a regular attender on the Bill but the amendment, once I had read it, sparked off all sorts of thoughts, particularly for those who I meet in branches of the Post Office and desperately want to use normal transaction methods. The terms of the amendment will be welcomed by countless customers who have not been, and perhaps do not want to be, involved in electronic transactions. It is a fact of life that many find the modern method of conducting exchanges with suppliers, especially of utilities, by electronic means a convenient way to settle their accounts or bills. It is also a fact that many do not want to avail themselves of this advantage of modern technology. They are quite happy writing out their cheques, sending off payment for their bills and getting a nice receipt back through the post. I must declare an interest as a former postman, so the idea that people might start using the post gives me a lot of satisfaction.
A particular point of the amendment which I am delighted to see is the safeguard against the form of financial punishment that comes in if people do not want to take up the advantages of getting 10 direct debits, paying three weeks in advance and all that nonsense. People who do not want to do it should not be made to pay for those people who do. If people are getting the advantage of these financial rebates or discounts, they are being paid for by somebody, and they are being paid for by the other people who are not involved in reductions in tariffs.
I came in tonight to say how pleased I am to see this amendment because it is what a lot of people want: straightforward exchange, paying bills, getting receipts and tucking them away in a drawer. If you ever have to tidy up people’s affairs after they have departed this earth, you will find that some people keep their bills for many years.
The debate on the previous amendment gives me the opportunity to talk about a particular regulator. The noble Baroness, Lady Oppenheim-Barnes, referred to the cost of postage, and I am delighted that she did because the regulator has not done much of a job on the question of payment to Royal Mail by its competitors. Are talks going on which will make it a bit fairer? The competitors of Royal Mail are dumping their post into the system and under the universal service obligation, Royal Mail has to deliver it, which is the expensive part. Are any discussions going on that will bring this downstream access, as it is called, under some control so that the competitors’ payments to Royal Mail bear some relation to the true cost? At the moment, to maintain the universal service obligation Royal Mail has to subsidise its competitors because there is a requirement they are all owed a margin of profit. The Government should be looking at that margin of profit with the regulator.
I am delighted with this amendment. I just hope that the people of this nation will be able to say that they can sleep in their bed at night not having to worry about www dot coms. My noble friend Lord Harris made me feel much more competent when he explained the difficulty he had dealing with a particular whatever they call these websites. That is me. It shows that I am not all that dim. I am fairly dim, but I am in good company with my noble friend Lord Harris.
Baroness Maddock
My Lords, not for the first time, I am supporting my noble friend Lady Oppenheim-Barnes on the thrust of this amendment. I declare an interest. As somebody approaching 70, I pay my bills by cheque and I do no money transactions, if I can possibly help it, online. That is how I like to do it. My mother died in the summer aged 95. In the end, I had to keep track of what was happening with her bills. It would have been very difficult if she and I had both being trying to do things online. It is not that I cannot use a computer, but I do not choose to do finance on one. It would have been extremely difficult. When I was sorting out her estate, I noticed that you are always paying in advance so they always have your money when you have not had the utility, whichever it is: gas, electricity or something. That is one of the reasons why I do not want to do it. I will pay for it when I have had it, thank you.
The issues that we are discussing here in one way amount to age discrimination because people like me, people who are older than me and people who are caring for people older than me find this extremely difficult. It is quite a serious thing. It may be that it will not matter to my grandchildren. We will all have died out and the utilities will not have to worry about these things, but for the moment it is quite a serious issue for people who are older, and particularly for their carers.
Lord Hodgson of Astley Abbotts
My Lords, I rise briefly to support my noble friend’s amendment. We had a preliminary canter over this ground when the Committee sat last week. I said then that I thought Amendment 53 was far more felicitously phrased than my amendment, and, indeed, it has so proved. The case is powerfully made. However, I take slight issue with the noble Baroness, Lady Maddock: this is not about age discrimination but about a consumer’s right to choose the way they receive bills and the way they wish to pay them. They should not face additional charges or discrimination in that sense. It does not matter whether they are 21, 81 or 101, that is the way it should be because that is the right the consumer should have. I support my noble friend’s amendment. I would like her to have thought of a way of ensuring that the banks do not charge for providing statements, which they are doing now increasingly, as statements are often important as a means of identification. Her amendment is much better than mine and I hope that the Government will be more sympathetic towards it than they were towards mine last week.
Lord Berkeley
My Lords, I, too, support this amendment. As the noble Lord just said, it does not apply just to old people like me but to many people who do not have access to the internet, or they or their carers are unable to use it, as other noble Lords have said.
I should point out one thing one has to watch if one is doing things electronically—that is, how do you file things? It is fine getting a bill on your mobile phone, but what do you do with it subsequently? How do you keep a record of it? There are many ways of doing it but it is not just a question of paying it directly through bank transfer, you have to keep a record and feel comfortable that it is secure. Security is becoming more and more difficult so these regulated monopolies, as many of them are, need to be aware of the importance of people getting paper bills if that is what they want.
When you read a meter you can put the reading on a postcard, if you want, or you can fill it in online. One of these days, I think that meters will be read down the phone line or the electricity line with no human input. They might get it right. If they do not, heaven help us. A friend bought a house from me and six months later he got a bill for £10,000 for water because there had been a leak. That had probably been happening since the war, about 50 years before, and it had soaked away into London gravel. You can imagine how you end up with a bill like that electronically but it was all quite difficult.
The other issue is paying by cheque. I tried to pay my EDF bill by direct debit this weekend and failed completely. My bill did not say how you could do direct debit, although there was lots of detailed stuff on the back of the paper bill. So I thought I would phone them up. I hung on for half an hour for a nice, friendly voice but got nothing at all, so in the end I went on the website. I found that EDF has a new website and you could do it on the web. But how many other people will think, “What do you do?”. You get a second reminder every two months. You put a cheque in the post or whatever you do but you cannot even talk to them down the phone. A friend of mine in the Isles of Scilly has four BT lines because they have four houses that they let out in the summer. This weekend, she told me she spent a total of six hours on the phone to BT. They have not had two of the lines working for a month. They tried dealing with this electronically and down the phone. Today they spoke to five different people at BT and still do not know if it is working. Before the utilities start charging people, they should get the service right. This is a very important amendment for both the paper/electronic debate and paying things by cheque. I strongly support it.
Baroness Wilcox
My Lords, the one thing we must not do is sound naïve. For all we would agree with this, and all the reasons we have heard, we should not penalise the energy companies for doing something that cuts the price for a lot of people by using a mechanism that makes things work better. If we need to be able to help a group of people who cannot yet benefit from that mechanism, then we are asking the utilities to subsidise them. I just want to be sure that we realise we are saying that. We should not be saying that we need to penalise utilities for doing what they are doing. Really, we are looking for there to be access or some other way to do this. Many hard-pressed households welcome the opportunity to save money this way, et cetera. I just put that point in.
Lord Berkeley
Is the noble Baroness straying into the territory of Animal Farm: four legs good, two legs better—or whichever way it is? Is not everybody equal?
Baroness Wilcox
Does the noble Lord mean equal opportunity? No, we are not born equal, that is for sure. Some people are tall, some fat and some short. We are not born equal but we should have equality of opportunity. That is what the noble Lord is arguing for.
Lord Harris of Haringey
My Lords, I think we are straying into unnecessary territory here—very philosophical points which are no doubt extremely interesting. I will not rehearse at length the argument I made when this Committee last discussed this matter. However, there is an obligation on government as far as this is concerned because government do not enable us to have some simple system of verifying who we are. When we need to verify our identity, we are required to turn up with a paper copy, sent to us via the post, of a utility bill. All my utilities are trying to move over to sending everything electronically but an electronic copy does not suffice for those purposes. Until such time as we have a system of identify verification, people will rely on receiving paper utility bills.
I have one other point why paper utility bills are important. We are encouraged by government to switch suppliers. This is part of the philosophy of improving competition. You switch suppliers. You move to another supplier. You have a new website to go into and a new password. All these passwords, I am sure, we do our best to remember and not write down somewhere. Of course, you can no longer access the website of your previous supplier because you are no longer their customer. If you need to check back on whether the prices are indeed comparable, that data are no longer available unless you, the customer, spend money on printing them out and keep a paper copy. Surely that is the wrong way round.
Lord Stoneham of Droxford (LD)
My Lords, I am slightly reluctant to speak against the experience of the noble Baroness, Lady Oppenheim-Barnes, and indeed that of my noble friend Lady Maddock, but, going against the grain of the debate, I think that I ought to do so. We have to say that the digital economy has provided huge savings and efficiencies in payment, booking and ticket systems, and the consumer should be allowed to benefit from that. We have to encourage these changes and simply to say that we are not going to do so is basically saying that the future is the past. I do not think we can ignore them.
I take the example of easyJet, an independent company away from the utilities. Are we saying that the equivalent of easyJet, which started competing against British Airways, would not have been allowed to discount its prices and reward customers who book online? I just do not think that that is the way forward. By all means say that we do not want extra charges put on people who are paying by cheque during the transition, but do not say, as it does in this amendment, that we should not offer a discount to those who are actually giving up their money more quickly by paying with a card or by direct debit. They are allowing the banks to release the money four days ahead, so why should they not get the benefit of that? It is a cheaper way of paying. It is wrong to say that this form of progress should be held up.
The other thing I would say is that I find it slightly patronising of older people. I chair a housing association for retired people. I was staggered when we did a survey for our annual conference, where the average age was the late 70s. We asked people whether they used IT to do a certain number of things. Some 80% said that they used the internet as a phone because they were using Skype, which is cheaper. Some 80% said that they bought tickets and booked their holidays on the internet because it is cheaper. What really shocked me as someone who worked in the newspaper industry and who thought that newspapers would always have a future because retired people would always want to read a newspaper was that 80% of them get their news from the internet. We cannot ignore these changes. What we should be concentrating on here is what the noble Lord, Lord Hodgson, was talking about in the debate last week. We want regular paper records to be sent to customers who are using the internet process as well as to people who pay by cheque. But please do not let us say that we are going to go back to the past by letting the banks hold on to our money for four days when we can pay directly and get a cheaper price by doing so. Retired people can get that benefit as well. We must not end that progress.
Lord Blencathra
My Lords, I strongly support almost all of this amendment except that I agree with the noble Lord, Lord Stoneham of Droxford, that we should not penalise those who pay by direct debit. I also agree that there should be incentives for people to pay by direct debit if they wish to do so. But the danger is that we are heading towards it becoming compulsory for all. Whether it is old people, young people or old gits like me, we have the right to get things on paper and not be cajoled, threatened and blackmailed by the utility companies and others into making all our transactions by direct debit.
Lord Stoneham of Droxford
Can I interrupt the noble Lord? Fifty years ago my father used to go to the retailers and pay every single bill in cash. Are we saying that progress should not have allowed him to pay by cheque?
Lord Blencathra
Of course not. The point I am making is that we should have the freedom to choose. I am one of those who for contrary and bloody-minded reasons goes to the Post Office in the Central Lobby to collect £145-worth of postal orders to pay my TV licence. I do that because I resent the fact that the Post Office is losing that business. It costs me an extra £10 or £12, but over the years I have despaired as all Governments have accidentally or deliberately driven business away from the Post Office and have moved more and more things on to direct debit. What would we have said 30 years ago if a Government had said, “We’re going to drive all those old age pensioners into getting their money in their bank accounts and they won’t be able to get it in cash”? We would have been appalled, but we are rapidly heading that way. All Governments are enthusiastically persuading pensioners to do that.
Lord Hodgson of Astley Abbotts
If my noble friend looks at his BT bill more closely, he will see on the right-hand side of the page in small print, “If you wish to avoid this charge you can do so by getting a direct debit or by calling this number”. It is a direct push to try to stop people getting paper bills and paying by cheque.
Lord Blencathra
I entirely agree with my noble friend. To be fair to my noble friend Lord Stoneham of Droxford, that is going further than providing an incentive. There is a threat involved there, and that is not right and not fair.
I am not careless with money, but I then checked other bills, which I had not bothered to do properly before to find other mistakes. When I get a paper bill, I see the level of my gas bill and I go around switching off the heating for a while. If it is being taken directly from your bank account and you have no bill, just some annual statement, you do not see what gas, electricity and utilities are costing. There is a saving to consumers if they can see their bill in paper format.
A further point: I believed when I was a boy and growing up that the decent thing to do was to pay one’s bills within 30 days. Now it seems to be down to about 21 days. However, the demands that one should pay everything by direct debit or only get 10 days to pay a telephone bill are obscene. It is wrong and we should have legislation that forces the utility companies not to charge extra for cheques and not to give an unfair disadvantage to cheque-payers. Finally, not that it concerns this House, there are votes for whichever party defends consumer interests on this issue. There are votes to be lost unless we let the dying minority of consumers pay by cheque.
Baroness Hayter of Kentish Town
I think we will just call the noble Lord, Lord Stoneham, a brave man. I would not take that lot on.
The noble Lord, Lord Hodgson, is right. We had a brief canter around this area last week on his amendments. I just want to thank the noble Baroness, Lady Oppenheim-Barnes, for focusing the Government’s attention on this. As I think the noble Lord, Lord Hodgson, said, this is a Consumer Rights Bill and this is a very basic right: to be able to have a choice about whether to have your bills on paper and to pay by cheque—without paying for the privilege.
We need to keep at the centre of our debates those customers who struggle to get paper bills, and easily accessible and understandable information. The figure of 7 million has been mentioned of people who do not have internet access. We have a lot of people who find that even reading is quite difficult, let alone trying to do it on a small handheld telephone. But as we mentioned last week, there are other people as well, not just those who do not have access to printers, but who, for example, need a domestic bill to prove their identity, as my noble friend Lord Harris of Haringey has said. But there are also carers and cared-for people, as the noble Baroness, Lady Maddock, has highlighted. There are also divorcing couples, which is the time when you have to start splitting bills; the self-employed who need to make claims; people who work away or are in hospital for a long time, who may not have access to their normal internet and can quickly lose track of what is happening.
I will take two minutes to tell you the very sad story of a friend of mine who was virtually battered to death. She was in hospital for a very long period after this. But the only way she was able to help the police find the culprit was when she woke up in hospital. The usual thing happened, her post came in. Her bills came in and she was able to see that a credit card had been used. The police could then go and see where that money had come from, and find a photograph of the culprit. I am glad to say that the attempted murderer is now well locked away. But there are all sorts of reasons why people feel secure when they are able to see that sort of data on paper.
That may be an extreme example, but people want to check on what bills have come; they want to check on who paid them; flat sharers want to be able to divvy them up; and people who have got any problems, particularly with paying bills, as we mentioned last time, where they have to work out which bill to pay when in order to make sure that nothing is cut off. They literally do this with paper. I sometimes think that those who run the utilities just do not understand how people live. Maybe they should spend a day with my noble friend Lord Clarke of Hampstead sitting in a post office and hearing about how people do things; they would learn a little more.
Finally, some companies take particular advantage of their poorer customers. On the wider issue of price, we know that energy suppliers target their lowest price at the big users and actually penalise their smaller customers for not using very much, and then go on to make it even worse by charging those very customers if they want their bills on paper.
It is great that some people can do all of this electronically, but they are likely to be younger, and more savvy. I wonder whether the utilities really have to make life difficult for the rest of us—who want paper bills and the use of cheques—to encourage others to take up the electronic option. People who choose to do it electronically do not do it to save £6; they do it because that fits in with their way of life. I doubt very much they need a £6 bribe, if you like, to go electronically. That may have been the case earlier on, but now it is not the reason. Rather it is an excuse for the utilities to get a bit of money out of people who want to pay by cheque rather than, any longer, acting as an incentive. I hope that the Minister hears the strength of feeling. She may recall when we had the debate in the Chamber that this was the feeling across the House, and there will be a lot of support. It would be advisable for the Government to take the initiative and do this rather than have the sort of defeats that we have seen tonight in the Chamber.
Baroness Oppenheim-Barnes
My Lords, I would like to make a point in the limited time remaining, which is that the companies that continue to give paper bills and continue to give the sort of services we have asked for are not losing anything, because of all the extra money they have earned from the vast majority of people who are paying online. So there is no financial loss to any of these companies, and particularly to BT.
Baroness Neville-Rolfe
My Lords, first, I thank my noble friend Lady Oppenheim-Barnes for her amendment, for her previous two amendments and for providing us with a useful and constructive discussion. She was not here for what I was going to describe as a gallop, but my noble friend Lord Hodgson rightly described as a canter, around this issue in our previous session. I shall not, in the interests of time, repeat everything I said on that occasion. For example, we had a good discussion about the point that the noble Lord, Lord Harris, made about ID. While I have the floor, I also pay tribute to everything that my noble friend Lady Oppenheim-Barnes has done for the consumer over many years. Things have improved as a result of things done recently, from domestic and EU sources. This Bill, if we can get it through, will make further improvements.
I was also glad to hear of my noble friend Lady Maddock’s experience, which I shall come back to in a minute. I am well aware of the Keep Me Posted campaign, which the noble Lord, Lord Harris, mentioned, and have indeed talked to some of the campaigners about their plans. It is good for the postal angle to have been articulated by the noble Lord, Lord Clarke of Hampstead, whom I thank. I also understand that this amendment is talking about the regulated areas, not everything in general; that point is well made.
We are returning to an issue that has been debated in the House on a number of occasions. It is very much a House of Lords issue and I therefore thank everyone for their thoughtful contributions. The amendment is addressed to utility suppliers but my noble friend Lord Hodgson mentioned banking, which is not in the amendment but, no doubt, similar considerations apply. All these sectors have regulators to ensure that consumers are treated fairly, in accordance with licensing rules and wider consumer protection law, including those intended to protect the more vulnerable in our society—a point that I am going to come back to.
Customers may take queries or complaints to the relevant regulator and receive some form of assurance on their position—for example, should a business seem to be charging excessively for supplying a paper statement or for processing a cheque payment. I believe that we have already established a consensus that some individuals value retaining the option of paper transactions. We are all clear that the terms of the contract must be set out at the outset, at the time of agreeing the contract, and that they must be clear and transparent. In particular, consumers need to be clear and agree if there is to be a change in the way in which they receive and pay their bills. In this way, the customer knows how bills and statements are to be provided and on what terms. As I mentioned in our previous debate, paper bills and cheque payments have never been free. The fee for processing them was always borne by the consumer but was tied up in the administrative costs of the utility, and the charge was spread across the customer base. Thankfully, today these charges are more transparent and linked to costs.
This amendment would be of particular disadvantage to online customers, for whom statements are readily available and can be printed if necessary, especially by the young but increasingly by our digitally aware “silver surfers”, because many people are embracing the internet at every age in a very surprising way. I welcome the opportunity to save money that paperless bills offer, and so do many people. Paying by direct debit, which was condemned by my noble friend Lord Blencathra, can also enable people—some of them vulnerable and elderly—to budget more effectively than being faced with quarterly or lump-sum bills. There can be some value there. For them, the proposed statutory requirement set out in these amendments adds little but the possibility of extra costs.
It is undoubtedly more expensive for a regulated business to print out and post bills to its customers than it is to deliver them electronically online. It is not for the Government to dictate that certain costs cannot be accounted for with the consequent burden instead being potentially passed on to all customers. It is surely reasonable to incentivise customers to use the cheapest processing mechanism by sharing savings with them. This amendment would outlaw that and almost certainly drive up the charges to online customers.
Baroness Maddock
When my mother died, the utilities were all very good. They have special sections to deal with this. I had thought that things would be terrible as I do not usually find them terribly helpful but actually most of them deal with these situations quite well. However, for me, having the paper copies was important as I could see what was going on. However, I cannot fault the utilities as they were very good.
Baroness Neville-Rolfe
It is always good to have that sort of good experience on the public record. I thank the noble Baroness for that intervention.
The noble Lord, Lord Clarke of Hampstead, asked whether there were any talks going on with the regulator to ensure that payments to Royal Mail are fairer. I will need to write a letter to the noble Lord on what is largely a Royal Mail competition issue, if I may. I was also pleased that the noble Lord, Lord Blencathra, shared his experiences, knowing that he comes from the north of England, even though I do not think that I agreed with him on every aspect. The noble Lords, Lord Hodgson and Lord Blencathra, talked about meters. The Government are working with industry on smart meters which will enable readings without a visit to a house and therefore make the cost of energy use more visible. That will be better for consumers.
In conclusion, this is a difficult area, as we do not want society to incur the costs of printing and sending off bills to everyone if that is not needed. The trouble is that if there is no cost to paper bills, people will just opt for paper anyway even if, like me, they can manage online. I think that that is a risk. I know that is not a popular thing to say but I hope that noble Lords will reflect on that aspect of things. There is already a range of billing, payment and statement options available on the market. We agree that it is important that the appropriate protections on access to paper bills are kept in place, and are doing that through our licensing regimes and specific regulatory and sector interventions and by driving quality, choice, fair prices and value for money for consumers through good competition and good consumer law.
We will of course reflect on what has been said in this lengthy and important debate, and see if anything can be done. However, in the light of what I have said, I ask my noble friend to withdraw her amendment.
Baroness Oppenheim-Barnes
I thank my noble friend for that very careful and detailed response, which was extremely interesting. She paid a lot of attention to what has been said. I am afraid that she will not change my mind but on this occasion I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
“(2) References in this Part to treating a contract as at an end are to be read in accordance with section 19(13).”
House of Lords
Introduction: Lord Lennie
Introduction: Baroness Pinnock
Schools: Academies
(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Jones of Whitchurch
To ask Her Majesty’s Government what steps they are taking to improve the financial regulation of academy schools.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, academies are subject to considerably more rigorous financial regulation than local authority maintained schools. For example, they have to publish annual, independently audited accounts; local authority maintained schools do not. They are subject to the rigorous oversight of the Education Funding Agency and anyone in a governing relationship with an academy, or an organisation closely linked to it, can provide services to a local authority maintained school at a profit; they cannot to an academy. However, we are continually looking at ways to refresh the financial regulation of academies.
Baroness Jones of Whitchurch (Lab)
I thank the Minister for his reply, but is he concerned about the increasing number of stories of academy chiefs being paid inflated salaries, heads employing family members and friends to provide school services, lavish expenditure on hotels and travel and, recently, a head paying £26,000 for furniture for her office? This is not their money, it is taxpayers’ money, but it seems that a small minority are using the academy funding system as a cash cow. Does the Minister accept that the Government’s centralised oversight of these schools makes it more difficult to supervise academy school expenditure effectively? Does he now accept that that was a mistake?
Lord Nash
The noble Baroness picks out some isolated examples. I point out to her, as I have before, that 36 of the 55 pre-warning notices that this Government have issued to academy sponsors have been to sponsors approved under the previous Government. This Government have considerably tightened up financial oversight and improved things such as control of grants. Of course, these figures are but nothing compared with the £10 billion overspend the National Audit Office tells us that the previous Government were heading for under the Building Schools for the Future programme.
Baroness Perry of Southwark (Con)
Will my noble friend tell us whether there is any information about the innovations and improvements that heads have been able to make since so many of them were given the freedom to manage their own budgets?
Lord Nash
My noble friend is quite right that there have been many examples of this, including more efficient purchasing, longer school days, greater freedom over the curriculum, the ability to employ subject-specific teachers in primary schools, the ability to find the money to engage more effectively with the professional communities and business, and the generation of income more effectively from their own facilities.
Lord Singh of Wimbledon (CB)
My Lords, while rigorous financial regulation is important, I am alarmed to hear of a high-achieving school in a deprived area in west London where children are made to endure classroom sizes of up to 80 without adequate toilet facilities. The DfE will not release money for new premises until the financial management is completely up to scratch. Does the Minister agree that it is wrong to use children in this way?
Lord Nash
I do not recognise the example to which the noble Lord refers. I would be grateful if he would write to me as regards his specific example. The pressure on pupil places has been considerably relieved by the amount of money that this Government have spent on them, but I would be particularly interested to hear about this case.
The Earl of Listowel (CB)
My Lords, is the Minister concerned to hear that a head teacher said at a recent seminar that she was having to pay rent arrears and pay for food in her impoverished community to enable children to get to school, to be able to concentrate and to do well? She was embarrassed to do this but she felt that she had to.
Baroness Garden of Frognal (LD)
Will the Minister say, where instances of apparent fraud have been notified in accordance with the guidelines, what action the Government have taken?
Lord Nash
Where we receive an instance of fraud we immediately investigate. The EFA has investigated 35 cases of fraud in academies in two years. That compares with 191 reported in maintained schools over one year. If we feel that there are causes for concern we will inform the police or, in more minor cases, introduce a financial notice to improve.
Baroness McIntosh of Hudnall (Lab)
My Lords, can the Minister tell the House how many of the cases of fraud that have been alleged were uncovered by investigation by his department or by Ofsted, and how many by whistleblowers?
Lord Lexden (Con)
Is my noble friend confident that the Government’s financial controls are sufficiently extensive and rigorous?
Lord Foulkes of Cumnock (Lab)
My Lords, since we have time, could the Minister now try to answer the question posed by my noble friend Baroness Jones?
Green Climate Fund
The Lord Bishop of St Albans
To ask Her Majesty’s Government what plans they have to pledge funding to the Green Climate Fund.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, the UK recognises the importance of a successful initial resource mobilisation process, and is keen for the fund to become operational as soon as possible. We aim to pledge at the initial Green Climate Fund pledging meeting arranged for 19 and 20 November, ahead of the United Nations climate change negotiations at the start of December. We are a strong supporter of the Green Climate Fund, because we see it as a key new vehicle for helping developing countries adapt to climate change and follow low-carbon development paths.
The Lord Bishop of St Albans
I thank the Minister for her reply, and I am grateful for all that the Government are doing in this important area. So far, 10 countries, I think, have pledged contributions to the Green Climate Fund, but despite his warm words recently in New York the Prime Minister was not among those offering to make a pledge. Can we have some information about how much Her Majesty’s Government intend to pledge, and can we know what else we shall put on the table, if we are to have credibility at the discussions in December in Lima?
Baroness Verma
My Lords, the UK is committed to scaling up climate finance, and we have already committed £3.87 billion from our International Climate Fund between 2011 and 2016. The first £1.76 billion of this has already been committed from the International Climate Fund, and is expected to achieve the following lifetime results. However, the right reverend Prelate is right that we need to encourage all member states to come up to the mark and ensure that they are all contributing. This is a very important area. The UK is absolutely committed, and the Prime Minister has made that very clear. He will announce his pledge in November.
Lord Teverson (LD)
My Lords, regarding recent international climate negotiations, does my noble friend agree with me that we should congratulate the DECC team and the Secretary of State on the climate energy deal done at the European Council over the past couple of days? Does she agree that that illustrates that, by leadership from Britain, by persuasive argument and by building up a team of other member states around us, we can succeed in European negotiations and win for Britain?
Baroness Verma
My noble friend is absolutely right, and I could not have put it better than he has.
Lord Clark of Windermere (Lab)
My Lords, the Minister carefully explained to the House the expenditure by HMG on international climate initiatives, but can she be quite specific? Is she saying that in November the Prime Minister will actually make a pledge to the Green Climate Fund?
Baroness Verma
My Lords, in case I was not clear in my initial Answer, I repeat that the Prime Minister, like leaders from a number of other countries, will pledge our support in November.
Lord Tebbit (Con)
My Lords, will my noble friend say whether this money, if it is produced and paid out, will be from some magic source of which we are not yet aware, or will it be simply more borrowing to add to the deficit and to our debt?
Baroness Verma
My Lords, with other countries, we pledged to ensure that £100 billion will be made available to tackle global climate change issues. Our contribution to that thus far is £3.87 billion.
Baroness Worthington (Lab)
My Lords, on Friday the IPCC will publish the synthesis report for its fifth assessment report into climate change. It is likely to say, yet again, that there is now incontrovertible proof that climate change is a serious issue and we all must take notice of that. Does the Minister accept that Friday might be a good opportunity to point that out to some of the Back-Benchers in her party?
Baroness Verma
The noble Baroness is right. The fifth assessment report has concluded that, and many around your Lordships’ House recognise that. It is not just about Back-Benchers on my side; it is about ensuring that we deliver an informed debate, and perhaps thus far that debate has not really taken place.
Lord Lawson of Blaby (Con)
My Lords, I echo my noble friend Lord Teverson in welcoming the agreement reached within Europe the other day because it was clearly non-binding, as the noted energy expert Nick Butler has pointed out in an excellent article in today’s Financial Times. It is non-binding in two ways: it applies to the European Union and not to any of the member states, where decisions are in fact taken; and it is explicitly open to review in the light of the forthcoming global conference on these matters.
Baroness Verma
My noble friend is absolutely right: that it is not a binding target. However, in the UK we have not been under binding targets before but have managed to ensure that our uptake of renewables has increased. We have almost doubled our renewable energy sources since coming into government in 2010. It does mean that we have an agreement now from 28 members, all agreeing that the targets, being non-binding, enable each member state to be free and flexible in how it reaches those targets.
Viscount Ridley (Con)
My Lords, does my noble friend the Minister agree that the fifth assessment report of the Intergovernmental Panel on Climate Change has confirmed, in the same words, that there has been a “hiatus” in global warming for at least the past 15 years? Will she give us the opinion of her scientific advisers as to when that hiatus is likely to end?
Baroness Verma
My Lords, my noble friend raises a couple of issues that we would dispute in a longer debate. What we do recognise is that a change in weather patterns is happening across the globe and that climate change is occurring; it may have slowed down but that is a good thing, and it could well be that some of the measures we are taking today have helped that to occur. If we are to respond seriously to climate change and changing weather patterns, we need to be able to put in place things that mitigate and adapt to those different patterns.
Baroness Farrington of Ribbleton (Lab)
My Lords, would the Minister care to confirm my understanding that, on greenhouse gases, this agreement is binding?
Baroness Verma
My Lords, the UK Government asked for a 40% carbon emissions ambition to be reached. That is something the Prime Minister put forward earlier this year. I am glad to say that all the European countries have agreed to that 40% greenhouse emissions target.
Lord Tomlinson (Lab)
May I ask the Minister to return to the question asked by the noble Lord, Lord Tebbit? It is a very pertinent question. Is the money that is going to be pledged in November already in the Budget, or is it to be an increase in the borrowing that the Government will have to undertake, at a time when they have just hit a record for the amount of borrowing?
Baroness Verma
My Lords, we are clear that we need a Green Climate Fund. We will use a number of financial instruments to be able to achieve that.
UN Security Council
(10 years, 1 month ago)
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Lord West of Spithead
To ask Her Majesty’s Government what benefits being a permanent member of the United Nations Security Council brings to the people of the United Kingdom.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, as a permanent member of the United Nations Security Council, the United Kingdom is in a privileged position to play an active role in maintaining international peace and security. We use this position to work hard towards constructive solutions to international crises, to promote British values and to confront threats to UK security. This gives us a positive impact on stability overseas, which directly affects the security and prosperity of the people of the UK.
Lord West of Spithead (Lab)
My Lords, I thank the Minister for that reply. Clearly membership is of use and value to our nation. In that case, and in the context of the national security strategy, have we looked in detail at what capabilities and attributes we need as a permanent member, bearing in mind that many countries feel they ought to be there? Does the Minister feel that the 14% cut in our defence budget since 2010 and the cut to our diplomatic capability enable us to continue in that position? Having mentioned the military, I am sure all of us want to express our admiration for the bravery and sense of duty of our men and women who have just finished 13 and a half years in Afghanistan.
Baroness Anelay of St Johns
My Lords, I gladly add my words to that sentiment for our serving personnel now and in the past and, indeed, for the United Nations peacekeepers who come from around the world to carry out such difficult tasks. With regard to matters of defence spending and the calculation of how a contribution may be made, in looking at our participation in United Nations matters we take into account overall plans with regard to security at home, in NATO and overseas more broadly. That is part of the work that is done. On the second limb of his question regarding defence spending, we are committed to allocating 2% of GDP to defence and that will continue at least until the general election. After that, of course, there is another spending review.
Baroness Falkner of Margravine (LD)
My Lords, does my noble friend agree that the privileged status that permanent membership brings also carries a responsibility to have a leadership role among other nations and organisations? In the light of that, have Her Majesty’s Government carried out an assessment of what might happen to Britain’s privileged status if it were to withdraw from the European Union?
Baroness Anelay of St Johns
My Lords, it is clear that at the formation of the United Nations, after the problems with the League of Nations, we were one of the major five states and therefore part of the permanent five members of the United Nations Security Council. We remain there and our position is strong. I do not see any future in discussing our removal. Indeed, the discussion in the United Nations area is about enlarging the Security Council. There is no threat to our membership that I can foresee now or in the future.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister, in the same sense in which she has just replied, confirm that there is no possibility that Britain could lose its place as a permanent member of the Security Council unless it developed suicidal tendencies? The charter makes it perfectly clear that you would have to change the wording to remove one member, and that could be done only if all five permanent members then ratified it. It is, therefore, up to us. As far as the qualifications for permanent membership are concerned, it might be useful to look at the report of the High-level Panel on Threats, Challenges and Change, which set out a long list of criteria which it believed any new permanent member ought to be able to fulfil before being accepted.
Baroness Anelay of St Johns
I entirely agree with the noble Lord, Lord Hannay, who has great experience of these matters not only in the diplomatic field but because of his role in the All-Party Parliamentary Group on the United Nations. I was very glad last week to be invited to stand alongside the United Nations Association to celebrate its 69th birthday. He is right with regard to membership, and our position there is secure.
Baroness Morgan of Ely (Lab)
My Lords, the costs of UN membership are charged proportionately according to the size of a country’s population and national income. Will the Government make an equally strong song and dance about UN membership if fees go up, as they have done with the EU? Will we see members of the Minister’s party advocate withdrawal from the UN if they do?
Baroness Anelay of St Johns
My Lords, our position on the United Nations is something of which we are proud. We are proud that it works for peace and we are proud that we are part of the multicultural approach to resolving the world’s crises and the humanitarian efforts. We are going to stay there.
Lord Howell of Guildford (Con)
Does my noble friend agree that if we are looking for benefits for the British people from international institutions we might invest more time and effort in developing our links with the Commonwealth, which contains 2.3 billion people who use English as their working language and most of the big growth markets of the future?
Baroness Anelay of St Johns
I entirely agree with my noble friend about the importance of the Commonwealth. The main objectives of the Foreign Office are always to look at policy through the prism of security and prosperity. The Commonwealth is a crucial aspect of that.
Troubled Families Programme
Lord Horam
To ask Her Majesty’s Government what progress is being made with the Troubled Families programme.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, the Troubled Families programme is performing very well and strongly. By June this year, more than 116,000 of the 120,000 families we pledged to turn around had been identified. One hundred and ten thousand of these were being worked with, and almost 53,000 have already been turned around. Updated figures will be released shortly, showing that the programme remains firmly on track.
Lord Horam (Con)
My Lords, this is an important programme because it affects the most disadvantaged families in the country. Does my noble friend think that the co-ordination between the Department for Work and Pensions and his own department which has been criticised in the past is now good? I see from his figures that the programme has been expanded since it started. What are the financial implications of that?
Lord Ahmad of Wimbledon
My noble friend raises two important points. Co-ordination was a challenge, but, increasingly, we are working well across the board, both centrally and locally, in the delivery of what is an important programme. More recently, we announced joint working with the Department of Health in identifying certain issues pertinent to troubled families. My noble friend referred also to the expansion of the programme. The programme is indeed being expanded further to include up to 400,000 more families, meaning help for even more people.
Lord McKenzie of Luton (Lab)
My Lords, I hope we all agree that it is important that the Government provide effective and hands-on support to families with multiple and complex needs. But can the Government clarify whether a family once “turned around”—in their parlance—by a local authority can subsequently re-enter the Troubled Families programme? If so, how many have and what does that say about the sustainability of outcomes which the Government are claiming?
Lord Ahmad of Wimbledon
The noble Lord raises an important point. This is about ensuring that the issues which lead to families being defined as troubled—I am sure that many noble Lords are aware of the criteria—are intervened on for the long term and turned around. The noble Lord asked specifically about re-entering the programme. The issue is not about the families concerned re-entering the programme but ensuring that the mentor and the local officials who are appointed continue to work with them. As the noble Lord rightly points out, our intention is not just to take them out of the programme on a temporary basis but to ensure long-term sustainability in education, work and good health.
Baroness Benjamin (LD)
My Lords, every day before we went to school, my beloved mother used to say, “Education is your passport to life. You go to school and learn, learn, learn”. Sadly, not many parents, especially those with troubled families, motivate their children in this way, even though research has shown that reading with your child for just 10 minutes a day can have an enormous effect on their education. What are the Government doing to encourage parents in troubled families to get their children not just to attend school but to be ready to learn? How is the pupil premium helping families in this regard?
Lord Ahmad of Wimbledon
My noble friend refers to what she did before she went to school. Often, when I returned from school, I would turn on the television, albeit briefly, and I would see her teaching me a few things, and I am sure that she will continue to do so in the years ahead. Of course, the Troubled Families programme is targeted specifically at the importance of education and ensuring not just attendance at school but development and achievement there. That is why the Troubled Families programme is so important. It is about a person going in and ensuring that they deal with all facets of what is challenging a particular family.
The Lord Bishop of Rochester
My Lords, tomorrow morning the Prison Reform Trust will publish the latest edition of its well regarded Bromley Briefings Prison Factfile. Among other things that will show the continuing correlation between exclusion from school, being brought up in care and offending behaviour. In the light of this and of other responses already given, can the Minister give an assurance that the Troubled Families programme is being well co-ordinated with the Ministry of Justice’s young offenders policy?
Lord Ahmad of Wimbledon
I can give the right reverend Prelate that assurance. Indeed, in a previous incarnation when I was the Whip for the justice department, I saw the importance of many rehabilitation programmes directly through visits programmes. He raises an important part of the mix that defines troubled families. As he is well aware, one of the key elements is youth crime and targeting youth crime and anti-social behaviour. Again, what we are seeing, for the first time I believe, is not just departments working together, but people at a local level working well together to ensure that all people involved, whether in youth crime, those involved in not attending school, as my noble friend said, or those who are not in employment, get sustainable solutions for the long term.
The Earl of Listowel (CB)
My Lords, I pay tribute to Louise Casey, who has provided admirable leadership in this area and, previously, in removing rough sleepers from the streets of London and elsewhere. I declare my interest in the register in property. Is the Minister concerned about the unfit housing available to many of our poorest families—overcrowded, often damp, neglected, and without play areas for children? Can he say what he is doing with his colleagues to ensure that pregnant mothers and mothers with very young children have decent homes so that they can feel comfortable to rear their children, making strong bonds of affection with them and avoiding this route into troubled families, with their children developing poorly and their relationship with their children deteriorating over time?
Lord Ahmad of Wimbledon
First, I join the noble Earl in his tributes to Louise Casey. She has undertaken a great initiative on the programme referred to. She is also, as the noble Earl is aware, dealing with the very challenging issues that we currently face in Rotherham and we wish her well in the inquiry there. I am sure that is the sentiment of all in your Lordships’ House. On the issue of housing, of course the Government appreciate the importance of good, sustainable housing. Therefore, as many noble Lords will know, we have embarked on a programme of housebuilding that is helping those who are most challenged in the rental sector. We are encouraging buy to rent and we are also encouraging more people to enter the housing market. The Government have a raft of different housing initiatives because we believe, as the noble Earl rightly points out, that a good home and a good home for a family at the beginning is the keystone, pivotal point and foundation to ensure that a child and, indeed, the whole family progresses.
Baroness Corston (Lab)
My Lords, quite a proportion of troubled families are headed by women who are in contact with, or have been in contact with, the criminal justice system. Is it not vital that the Government continue to support the more than 50 women’s community centres in England and Wales which help such women turn their lives around and make them parents of whom their children are proud? Will the noble Lord speak to his colleagues in the Home Office and the Ministry of Justice to make sure that the Transforming Rehabilitation programme does not leave these women’s centres behind? That is what I am most concerned will happen.
Lord Ahmad of Wimbledon
The noble Baroness raises a very important point. Indeed, in raising that issue she has both great experience and has done an incredible amount of work in the area of women’s rehabilitation, particularly women offenders, and I pay tribute to that. She has raised an important point about the need to work together and to ensure that the women’s groups work at a local level. On a slightly different matter, before coming to the House, I met a women’s group dealing with domestic violence and identifying those issues. I talked about extending the programme to 400,000. One of the defining criteria now will be looking at domestic violence to ensure that those who are impacted are assessed and, most importantly, helped and brought back so they can be proud of their own contribution and the contributions of their families to society as a whole.
Lord Cormack (Con)
Is there not a chance that we would have fewer troubled families if there was a greater emphasis on citizenship education in our schools?
Lord Ahmad of Wimbledon
As ever, my noble friend raises an important and pertinent point. Of course, I agree totally, but citizenship alone cannot turn everything around. Unfortunately, we have identified families up and down the country who need such intervention in education, employment, health. Together with that, they will want to serve as proud citizens, and citizenship classes are important in that.
Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014
Baroness Neville-Rolfe
That the draft regulations laid before the House on 7 July be approved.
Relevant document: 6th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 October.
Legal Services Act 2007 (Approved Regulator) (No. 2) Order 2014
Lord Ashton of Hyde
That the draft orders laid before the House on 13 June and 7 July be approved.
Relevant documents: 4th and 6th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 October.
Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2014
(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Tankerness
That the draft order laid before the House on 7 July be approved.
Relevant document: 6th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 October.
Criminal Justice and Courts Bill
(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:14 - Division on Amendment 146 - Ayes: 247 / Noes: 181 - Amendment 146 agreed.
17:55 - Division on Amendment 157 - Ayes: 228 / Noes: 195 - Amendment 157 agreed.
18:45 - Division on Amendment 164 - Ayes: 219 / Noes: 186 - Amendment 164 agreed.
Lord Pannick
Lord Pannick (CB)
My Lords, the amendment and some of the other amendments in this group are in my name, that of the noble and learned Lord, Lord Woolf, and those of the noble Lords, Lord Carlile of Berriew and Lord Beecham. Under this group of amendments, your Lordships turn to Part 4, with its provisions relating to judicial review. On Second Reading and in Committee, noble Lords from across the House expressed concern that the provisions in Part 4 would damage judicial review for no good reason. It is very disappointing that, since Committee in July, the Government have not come forward with any amendments of their own to address those concerns. I would be very surprised to be told that the Minister made that decision.
I invite your Lordships to bear two principles in mind when considering all of the Part 4 amendments. First, judicial review is a vital means by which central and local government and other public bodies can be held to account to ensure the legality of their actions before independent judges in public. Secondly, when proposals for amendment of judicial review are brought forward by Ministers—who are, after all, the main defendants in such litigation—the proposals require the most careful scrutiny by the House.
Clause 70 would prevent a judicial review application proceeding to a full hearing and any remedy—I emphasise, any remedy—at the full hearing if the defendant shows that it is highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred. I have three main objections to the clause.
First, it ignores the fact that one of the central purposes of judicial review is to identify unlawful conduct by the Government or other public bodies. If Ministers have applied the wrong rule, or they decided a matter without giving a person a fair hearing, the court will say so and it will give a declaration, even if, on the particular facts, the error made no difference. This surely serves the public interest because the risk of a public hearing before independent judges encourages high standards of administration, and once the court has given its judgment, Ministers and civil servants know that they must change their conduct for the future. That is precisely what they do. Clause 70 would undermine these valuable purposes of judicial review.
My second concern is that Clause 70 ignores the fact that even if the defect did make no difference on the facts of the individual’s case, the individual may have a personal reason to seek a declaration that there was unlawful conduct. Last year Lord Reed emphasised for the Supreme Court in the Osborn case that the law requires public bodies to adopt a fair procedure to ensure not only that the right conclusion is reached on the merits of the case but also that the subject of such a decision is not left with a sense of injustice.
My third and final concern about Clause 70 is that, far from speeding up judicial review procedures, it would require the court at the preliminary stage to conduct a detailed review of what would have happened if the defendant had acted differently. That would be time consuming, expensive and an extremely difficult exercise for the judge. It would promote satellite litigation.
Clause 70 would have very damaging effects—nor is it necessary. Judges have ample powers, which they use, to dismiss hopeless or abusive cases. To those of your Lordships who think that there is too much judicial review and that it takes too long, I say that Clause 70 is a blunt instrument to use in such a sensitive context. It would impose an absolute duty on the court. It would prevent the judge from considering whether, in the particular circumstances of the individual case, there is good reason to allow the claim to proceed or to grant a remedy such as a declaration.
Amendment 146, which I commend to the House, would maintain a judicial discretion to consider the circumstances of the individual case. That is surely appropriate in this context. Amendment 146 is to be read together with Amendments 147, 149, 151, 152 and 154, each of which substitutes judicial discretion for the judicial straitjacket which is proposed by Clause 70.
I have spoken briefly in moving this amendment because there is a great deal of business for the House to get through today on Part 4. I hope that that will not lead your Lordships to doubt the importance of this issue. I beg to move.
Lord Beecham (Lab)
My Lords, the last four years have seen the construction of major roadblocks on access to justice. Some 650,000 claimants a year, and their dependants, can no longer benefit from civil legal aid or advice, resulting in the collapse of law centres, extreme pressure on advice agencies and the expense and delays caused by litigants in person unable to receive legal advice in the preparation or presentation of their case. As we heard just last week, the family courts are often now clogged with litigants in person. The imposition of charges for employment tribunal claims have led to an 80% reduction in applications. Large cuts in fees for criminal legal aid threaten to reduce the chances of a fair trial.
However, as the noble Lord, Lord Pannick, has made clear, Part 4 of the Bill proposes even more insidious changes which would narrow the scope of judicial discretion in cases in which the lawfulness of decisions made by the Government themselves, or by public agencies, is challenged through the process of judicial review. As the Equality and Diversity Forum reminds us in its briefing, the Master of the Rolls, Lord Dyson, has asserted that,
“there is no principle more basic to our system of law than the maintenance of the rule of law itself and the constitutional protection afforded by judicial review”.
The Bill seeks deliberately to make it more difficult and potentially more expensive for citizens, either as individuals or whose interests may be represented by a charity, to seek a ruling from the courts as to whether decisions which might have far-reaching effects were properly made. I remind your Lordships that they already have first to obtain the leave of the court to bring such a case, and very often matters can be and are resolved at that stage.
Lord Horam (Con)
My Lords, the noble Lord, Lord Pannick, said in his introduction to this group of amendments that he could see no good reason why the Government have brought in these changes. However, he will recall that these changes in this Bill, and in the Infrastructure Bill, were first mentioned by the Prime Minister in his speech to the CBI in 2013. That was the genesis of this group. The noble Lord is nodding, so I think I am right.
The reason for that is that the Government are concerned, as the Minister has said on a number of occasions, about the fact that we have fallen behind as a nation on infrastructure. I am not making a party point; it happened under the Labour Government and the coalition Government as well, which means that, frankly, we have too few trains to deal with commuters, too many jams on the roads, too few houses, too few schools in the right place, et cetera. Now is the perfect time to give a kick-start to infrastructure. This is why Christine Lagarde. the chief executive of the International Monetary Fund, is pleading with Governments around the world to give more attention to infrastructure spending in their economies. Larry Summers, the ex-US Treasury head has said that at the moment infrastructure spending on housing, trains, or whatever is virtually a free lunch because interest rates are so low.
This is the situation that we face and which the Government are addressing. Therefore, they brought forward the Infrastructure Bill, which we are considering in another part of the House, and these clauses to this Bill. The reason is that judicial review has and is causing delay to many projects up and down the country. I will not go into the details that were advanced before the Recess. My noble friend has outlined some of the examples and I will not weary the House with them again. The examples of delay are obvious. It is also inhibiting the decision-making in government bodies. James Morris, the Member of Parliament for Halesowen and Rowley Regis, who before becoming a Member of Parliament was the chief executive of Localis, the local authority think tank, made the point that judicial review has now entered the bloodstream of decision-making in local authorities and other government bodies to the extent that when a decision is made they have to know whether it will be judicially reviewed and have to hire a barrister to find out the implications of all that. That is slowing down the decision-making in local authorities when we are urging them simultaneously to get a move on with lots of projects up and down the country. Indeed, I think that the Chancellor of the Exchequer is in the north of England at the moment urging local authorities to do more there.
Judicial review is also undoubtedly abused. My noble and learned friend Lord Mackay of Clashfern made the point in our earlier debates that it is very often used as a blocking device. It is meant to be about the process but very often the people who use judicial review are not concerned with the process; they are using it merely as a means to stop a particular development.
Lastly, judicial review is costly. There have been arguments about exactly how much it has increased in quantum over the past few years, and if you take out the immigration cases I can see that there has been an increase, but it is certainly not that much. None the less, as was made plain once again at Question Time today from the opposition Benches, the deficit has proven difficult to control and we are spending far more money than we are raising from taxation. This is an area where public expenditure has increased, and it has not received the cuts and restraint that other areas in this field have.
The professional interests here—the lawyers and so forth—have objected to the Government’s measures. There can be no objection to their objections; I fully understand where they are coming from, and it is very reasonable that the Government’s argument should be tested fully as to why they are using this particular technique to try to improve infrastructure in this country. The professional interests have used a number of arguments. The first is that there is no reason for this measure, but I think we have now demonstrated that there is clearly a need for further help with infrastructure and to clear away some of the roadblocks from it.
It is understandable that they would be concerned about human rights and the rule of law. We are discussing a clause that would make no difference, or would be highly unlikely to do so, to any end result from a judicial review. It is very difficult to argue that there is a significant change or a significant diminution to human rights if the end product of any particular judicial review would make no difference to the reality of the situation.
Even if that were the case, as my noble friend Lord Marks said at an earlier stage, we should trust the judges. If, let us say, the quantum of judicial review were 100 and it came down as a result of this Bill to 80, I would trust the judges to make the appropriate judgments about what was important and what was not—which cases merited discussion and which did not. That is their role; they are clearly very experienced at it and they have a good reputation, and I see no reason why that should not carry on.
The noble Lord, Lord Pannick, said again today that the measures would not work and would actually slow things down. The Minister gave a detailed rebuttal of that at an earlier stage before the recess—he set out various points on 28 July at col. 1462 of Hansard—and I will not go into that again. However, the truth is rather different. I would make a general point here: no Government of any shape or kind can always predict exactly what the consequences of any measures are. All those who have been Ministers know that you take a suite of measures and apply them, and some will work while some will not and some will work better than others. That is the nature of government; you do not always know what will work. Therefore, for the noble Lord to say that these measures will not work is stretching credibility. It is not a sustainable argument to say in advance what will work and what will not.
I also think, although obviously I am not a lawyer, that it is very unlikely that the judges will make things work in such way that they are inefficient. We know that there is a long trail of meritless cases and that about only 20% of cases get through to the final stage so there is a lot of unmerited work there, and surely that can be conducted more efficiently. It seems to me, looking at it as an economist, not as a lawyer, that there is a pressing need to ensure that this process does not, as many people are saying, inhibit decision-making in the public body. It does not, it seems to me, have an implication of a serious kind for human rights or the rule of law. As the Prime Minister said in his speech to the CBI, when the conditions are so right, it is necessary that we get a move on with infrastructure building in a significant way as soon as possible. It has coalition support. The noble Lord, Lord Beecham, made a plea to the Liberal Democrats; but I point out to him that at the other end of the Palace the Bill has the support of the Liberal Democrats. It is a coalition Bill, not just a Conservative Bill, and the coalition has supported it thoroughly.
We should look at this extremely carefully and consider whether this relatively small adjustment to judicial review—which is valued, and will continue—is not the right thing to do in the present circumstances and for the future of our country. It is in the public, and also the national, interest.
Lord Woolf (CB)
I am grateful to the noble Lord. I had prepared a speech of some length, but I realise, as did the noble Lord, Lord Pannick, that it is important to confine the argument at this stage of the Bill as far as possible. I detain your Lordships only because the Bill is extremely important so far as Part 4 is concerned. In deference to the eloquent speech we have just heard, I want to make a few submissions that are important for the context of why noble and learned Lords—who perhaps do not have interests of their own in raising this matter, which the noble Lord, Lord Horam, hinted at—are very concerned about the Bill.
The reason is that judicial review is the final resort available to the citizen to protect himself against unlawful action. It is a residual remedy and is not available in cases where a specific remedy is given, for example by statute. The only course it is then proper to take is the statutory route that has been laid down by Parliament. Having been a counsel for about five years who frequently was involved in the sort of planning and development matters to which the noble Lord referred, I can say that in most, although not all, of the areas we are concerned with there is specific legislation with specific provisions that explain the circumstances in which proceedings can be challenged before the court. The nature of those circumstances is carefully laid down and is now well known. I do not dispute that that may well need to be looked at again and taken through a critical examination.
However, I emphasise that what the noble Lord, Lord Pannick, was objecting to, and what I object to, is this limitation being placed on judicial review, which is part of the explanation of why in this country we have not needed an entrenched constitution that defines the responsibilities of the Executive and the judiciary and why in the United States they attach so much importance to the separation of powers, which is not part of our law.
We are dealing here with the residual remedy of citizens to deal with their fear of unlawful action by the Executive; that is what we are dealing with in most cases of judicial review. That being so, I suggest that the discretion of the judge to examine the position of the Government, the position of other public bodies and the position of the citizen, and then in accordance with the facts of each individual case decide whether it is appropriate to give relief and what relief should be given, is extremely important.
The amendments that bear my name, following that of the noble Lord, Lord Pannick, are designed not to tackle what is proposed root and branch, but to tackle those parts which say that a judge “must” do something as opposed to “may”. We do so not because we think that judges will be offended if they are told that they “must” do something. We do so because it is critical, if judges are going to get the right answer and do their best to get a just result, that they have the discretion to tailor their response to the facts of a particular case. However carefully we legislate, it is dangerous to go down the line of telling the judges what they have got to do. Everybody accepts that the independence of our judiciary is important. I emphasise the importance of that independence not because it is some right of the judiciary; it is important because the citizens know that a matter in issue, particularly in these important areas, will be considered by a judge who is independent. If we protest that we do not want the judiciary’s discretion cut away, we do so for that reason.
I will say no more because the other matters will, I know, be canvassed by others. However, I hope that I have made it clear why I think that this is a worrying piece of legislation, why I think that Part 4 needs to be carefully considered, and why I share the regret of the noble Lord, Lord Pannick, that although an array of legal talent spoke at Second Reading and explained their worries, it has not been felt right to consult them and try to find better ways of doing this, as has happened in many other parts of the Bill.
Judicial review deals with the public’s rights. In those circumstances, I suggest that if we are not going to fall into the trap indentified by Lord Hailsham in his Dimbleby lecture of 1976 of having an elective dictatorship in this country, we have to safeguard judicial review.
Lord Marks of Henley-on-Thames (LD)
I cannot support Part 4 of the Bill. I hope that the House will forgive me if I, too, make some general observations on the whole of Part 4, not limiting myself to Clause 70, to avoid taking up too much time later. As the noble Lord, Lord Pannick, says, there is much work to be done.
At Second Reading, the Minister assured the House that this package of proposals amounted to no more than “proportionate and common-sense reform” of judicial review. My noble friend Lord Horam called it a “small adjustment”. I regret that I see Part 4 as a serious infringement of the right of the citizen to challenge unlawful action by the Executive before the courts and thus, frankly, as an assault on the rule of law. This was the point made so eloquently and forcefully by the noble and learned Lord, Lord Woolf.
This part of the Bill aims to choke off challenges to unlawful action by the Executive. I fear that, if enacted, it will achieve precisely that. The degree to which it is proposed that judicial discretion be curtailed by these proposals is consonant only with a determination that judges should be limited so far as is possible in the exercise of their power to overrule unlawful government action. As the noble Lord, Lord Pannick, pointed out, the effect of Clause 70 would be to stifle any challenge right at the outset of permission stage, where the Executive may have acted unlawfully but where it appears highly likely that that unlawful action has not made any difference to the outcome for the applicant. Whatever superficial attraction there is for such a rule as between the parties to a particular application, the net effect on the public interest, in what are public law cases, would be that unlawful action by the Executive would go unchecked and unreversed.
Clauses 71 and 72 taken together would provide a code for ensuring that any person of means who is minded to support a challenge to an executive decision is to be obliged to provide information, again at the permission stage, about all his current resources and all his likely resources—full financial disclosure, in other words. The court is then to be told that it must consider making an order for costs against any such person based on that information. Many applications for judicial review are funded by public-spirited supporters seeking to have unlawful action by the Executive corrected. Frequently, such supporters have no financial stake in the litigation at all. No one can pretend that the provisions of these two clauses are not calculated to deter public-spirited individuals from lending financial support to judicial review applications.
Clause 73 on interveners provides for a draconian scheme of punishing those who intervene in costs. The general rule—subject to departure in only exceptional circumstances—would be that an intervener would be unable to recover costs from the losing party, win or lose, no matter how meritorious the intervention, how much the intervention is found by the judge to have assisted the court, and how far the intervener brought their broad experience in the field and new and telling arguments to the hearing of the application. Furthermore, and perhaps even more iniquitously, the court would have to order the intervener to pay all the costs of the other parties in the proceedings as occasioned by the intervention. Again, the court would be able to depart from this rule only in exceptional circumstances.
No one can fail to see that that code will deter interventions. It will make it very difficult for those many well known and thoroughly respected charities, and other campaigning organisations with relevant experience and a deep knowledge of their fields, to mount legitimate challenges to unlawful executive action. It will make it very difficult for those organisations to raise money in those circumstances.
At Second Reading, the Minister said in relation to interveners that the Government were,
“persuaded that there may be a case for some modification of the provisions”.—[Official Report, 30/6/14; col. 1542.]
and that he looked forward to “considering possible amendments”. As has been said, a number of amendments have been proposed by noble Lords, but none has been accepted for consideration by my noble friend and his colleagues in his department. The proposed rules on cost-capping in Clauses 74 and 75 again would severely restrict the ability of the courts to protect meritorious applicants in public interest cases from adverse orders for costs. Again, the effect would be to chill and to stifle such applications by the financial threat posed to those of limited means by the risk of an adverse costs order. The fact that a cost-capping order would be available only after permission was granted would only add to the overall effect.
I turn very briefly to my amendments to Clause 70, which are in my name and those of my noble friends Lord Carlile of Berriew and Lord Macdonald of River Glaven. All the amendments in my name should have my noble friend Lord Macdonald’s name to them as well, but for some reason his is not in the Marshalled List. He apologises that he is unable to be here at this stage but he will be here later. I should make clear at the outset that I support the amendments in the names of the noble Lords, Lord Pannick and Lord Beecham, the noble and learned Lord, Lord Woolf, and my noble friend Lord Carlile, which import a general judicial discretion in this area. However, our amendments are designed to ensure that, even where unlawful executive action may have made no difference to the particular applicant before the court or tribunal, the court or tribunal will still be entitled to consider the lawfulness or otherwise of the executive action concerned, to rule on it and to hold the Executive to account accordingly if the public interest so requires it. That principle should apply at the permission stage as well as at the stage of final hearing. We should not forget that these are public law applications designed to protect the citizen and to hold the Government to account. We should be astute, in this House in particular, to ensure that where government acts unlawfully the courts are not debarred or otherwise prevented from saying so.
Baroness Campbell of Surbiton (CB)
My Lords, I, too, wish to add my support to these amendments for the reasons so clearly explained by my noble friend Lord Pannick and others. As noble Lords are aware, I have contributed to the debate on this part of the Bill throughout its passage through the House. Let me explain why. I have supported the amendments because I want to show how these government reforms will affect disadvantaged citizens, especially the 10 million disabled people in this country who seek legal justice. Sometimes I think that we forget about the disadvantaged, the poor and the disabled who have no means or recourse to abuse. They simply want access to justice.
I know—I really know—what disabled people experience on a daily basis. I do not need to remind the House that when public authorities get it wrong, my God, they get it wrong and it has devastating effects on the individual. It hits disabled people particularly hard because they are the most in need of taking public authorities to court to get justice for their services—the services that they rely on to survive and live. They are absolutely, disproportionately dependent on public services and judicial review. As I said before, I have never known judicial review to be abused by disabled people or the charities that support them.
Claude 70 will effectively allow public authorities to ignore due process. That cuts across the public sector equality duty, which is so crucial in holding public authorities to account. Coupled with the cuts to legal aid, Clause 70 will effectively deny access to justice to those who most need it—not the big companies or multinationals, but just the people who need it, those at the margins of society. That is not the kind of justice we want in our democracy for vulnerable citizens. This clause has absolutely no place on the statute book in these terms.
Lord Carlile of Berriew (LD)
My Lords, my name is added to a number of these amendments, and I will not repeat everything that has already been said, most especially by the noble Lord, Lord Pannick, the noble and learned Lord, Lord Woolf, and my noble friend Lord Marks. However, I cannot let this debate pass without making three comments about the unusual speech made by my noble friend Lord Horam.
First, his speech was inaccurate. He blamed judicial review for delays in infrastructure development and for making infrastructure development more expensive. Had my noble friend taken the trouble to read the successful judicial reviews of infrastructure development, he would have found that in 95% of the cases—and I may be underestimating that—the judicial review was granted because of the incompetence and sloppiness of officialdom ranging from government departments through to local authorities and other statutory organisations. The answer to that is for those public authorities to prepare their cases properly, to make their planning applications in due form and for Ministers, in appropriate cases, to call in major planning issues so that they can be decided more quickly.
Secondly, my noble friend’s speech was unusually statist. In his career he has, in a very distinguished way, exercised his principles repeatedly, having been a member of three political parties. As I understand it, he left his first party—the old Labour Party—because he regarded it as too statist, yet nothing could sound more statist than what he said just a few minutes ago. I am personally in favour of HS2, fracking and the Severn barrage.
Lord Carlile of Berriew
My thanks to the noble Lord, Lord Thomas. However, I would be the last person to deny those who are opposed to those sometimes controversial schemes the opportunity to question them, if appropriate, by way of judicial review. Taking the contrary view is statism of the most extraordinary kind.
Thirdly, my noble friend’s speech was unjust because it seemed to remove the notion that there should be issues of principle about which people can take dramatic action. He has done it himself twice by changing parties as he moved from old Labour towards the party which he now represents with distinction in your Lordships’ House. However, that is the sort of exercise of principle, on more than one occasion, which the noble Lord, Lord Pannick, was talking about in moving the amendment. These are not pragmatic actions over small sums of damages; they are actions over great issues of principle. Even if some claimants would not actually win their personal actions for judicial review, we know, from the cases which we have all read and in which some in your Lordships’ House have appeared, that enormously important issues of principle for the future arise from them.
I will stray into future amendments, as others have done. Some of those points of principle have been made extremely successfully by interveners—NGOs that have chosen to put in submissions. Some have done so so effectively that their written submissions have changed the course of a case. Surely we should not inhibit justice by these rather mean provisions, which, in my view, my party—the Liberal Democrats—should never have given a single piece of powder or a single piece of shot to support.
Lord Irvine of Lairg (Lab)
My Lords, I will make a few remarks in support of the noble Lord, Lord Pannick, my noble friend Lord Beecham and the noble and learned Lord, Lord Woolf. In their consultation paper, which preceded the proposed changes, the Government acknowledged:
“Judicial review is a critical check on the power of the State, providing an effective mechanism for challenging the decisions, acts or omissions of public bodies to ensure that they are lawful. The Government will ensure that judicial review continues to retain its crucial role.”
So far, so good. Unhappily, however, to my mind the Bill fails to deliver on that pledge. I shall confine my remarks to Clause 70 but, as other noble Lords have demonstrated, it is only one example of many.
The judiciary is a vital component in our separation of the powers. Judicial review is indispensible in a democracy proud to be governed by the rule of law. It ensures that public bodies act according to law. They cannot be above the law. Ministers, who are politicians, often will be frustrated if their decisions are challenged or quashed, but that is an intrinsic aspect of government subject to the rule of law, as is the need for Ministers to be aware of their duty to comply with the law. A Government who are confident that their decisions cannot be readily challenged risk becoming a Government who no longer have to respect the rule of law. That is a risk that no Secretary of State for Justice, who also bears the title of Lord Chancellor and is under a duty to uphold the rule of law, should be prepared to countenance.
Clause 70 would enable the Government to escape the consequences of unlawful action if they could persuade the courts that it was “highly likely” that they would have taken the same action had they acted lawfully. The current legal position is that where a public body has acted unlawfully the court may in the exercise of its discretion refuse to grant relief if it is satisfied that the decision would inevitably have been the same had the public body acted lawfully. That discretion is very rarely exercised, for good reason.
Procedural failures are more than “mere technicalities”. It is important that decisions are made properly by those entrusted with them by Parliament or Ministers. Procedural protections are built into Acts of Parliament or statutory instruments because of the importance of participation in decision-making by those affected by decisions or by the public at large. If a decision is unlawful because a defendant has acted unfairly, failed to observe a consultation obligation imposed by Parliament or failed to follow a procedure prescribed by Parliament, the rule of law requires that a claimant should have a remedy. To hold otherwise runs the risk of unlawful administrative action going unremedied. To my mind, the current law gets it right. The only exception should be those exceptional cases where a defendant can persuade the court that the same decision would have been inevitable.
Clause 70 is likely to encourage decision-makers to ignore participation rights. Yet the failure to comply with procedural obligations results in worse decisions as the decision-maker will not have taken into account the full range of relevant material before making the decision. It also undermines public confidence in the decision-making process. Those who have had the right to be heard before a decision is made will feel a justified sense of grievance about the fairness and quality of these decisions.
Moreover, and perhaps more importantly, lowering the threshold to “highly likely” will require the court to second-guess government decisions. The court will be required to substitute for the decision that has actually been made the decision it thinks the Secretary of State would make if the evidence that the court has looked at had been looked at by him. That is entirely inappropriate because the role of the judiciary in judicial review is to examine the lawfulness of public decision-making, not to substitute its own decision for that of the original decision-maker.
Finally, law reports are littered with cut-and-dried cases that turned out to be nothing of the sort. The best known expression of this came from that distinguished judge, Mr Justice Megarry, in John v Rees in 1970. He said that,
“experience shows that that which is confidently expected is by no means always that which happens … the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were”,
completely “answered”.
The effect of Clause 70 is best summed up in the words of the senior judiciary of England and Wales in response to the Government’s consultation:
“A lower threshold than inevitability for the application of the ‘no difference’ principle envisages judges refusing relief where there has been a proved error of law and the decision under challenge might have been different absent that error”.
I agree. The threshold defined in Clause 70 would immunise unlawful decisions from challenge before the courts, and I say that it should be rejected.
Lord Tebbit (Con)
My Lords, as the noble and learned Lord, Lord Irvine, was speaking, I was trying to cast my mind back to a certain event. I think the noble and learned Lord said that politicians should take action only after due and proper thought, and I seem to recollect an occasion when this House was impaired in its meeting because the Prime Minister had accidentally kicked the Lord Chancellor off the Woolsack. I wonder whether that was what the noble and learned Lord had in mind when he was speaking just now; certainly it is what came back to my mind.
I find myself concerned about a number of matters before us today. The noble Lord, Lord Pannick, talked about the “legality” of Ministers’ words and about “unlawful conduct” of Ministers. The noble and learned Lord, Lord Woolf, spoke of “unlawful actions”. That is all fine. I think that there should be the capability for judicial review in such circumstances. But those circumstances conform to my understanding of the only three grounds on which judicial review used to be granted: that the act or decision of the Minister or official concerned was contrary to law; that the act or decision was ultra vires; or that no reasonable man could possibly have reached such a decision.
I would be much happier if I could be assured—not only by my noble friend who will answer the debate, but by some of the distinguished lawyers who have spoken—that that remains the case. I have had the impression recently, when reading about some cases in which judicial review has been granted, that a judge has decided that a rather better decision might have been the one that he proposes to make now. I am glad that the noble and learned Lord, Lord Woolf, shakes his head at that, but I think that he understands a little of my anxiety, and that of a number of others. It seems to me that it would not be right for judges to substitute their judgment for that of officials or Ministers who lawfully took a decision.
Even worse, the noble Lord, Lord Beecham, quoted a judge who said that he thought that Parliament might not have the right to change the law that it had made. That seems a very peculiar doctrine. In that case, who does have the right to change such a law? Would it be the judges, or would it be, I do not know, a mob in the street, perhaps? Surely it is only Parliament, which has made a law, that has the right to change it.
The noble and learned Lord, Lord Woolf, spoke of the dangers of elected dictatorship. Of course those dangers are there. I do not like elected dictatorships, but in this country there is a very good mechanism for getting rid to them—at the next election. I would rather do it that way than have some judicial process for getting rid of them. I hope we shall hear no more talk about that, because I do not like unelected dictatorships either, even if they sit in law courts.
I have some very clear worries about the manner in which judicial review has developed in recent years. I hope that we will be able to come to a conclusion here, all of us, that we should go very firmly back to those three criteria alone and no others—no talk about judges perhaps deciding that there is an elected dictatorship and something should be done about it; otherwise, their places on their benches might be at risk.
Lord Lester of Herne Hill (LD)
My Lords, the House will be glad to know that there is a limiting factor on how long I can speak for, which is the state of my bronchial tubes; they are so excited by the subject that I am danger of choking altogether.
I am very glad to be able to reassure the noble Lord, Lord Tebbit, and I am particularly glad to follow the noble and learned Lord, Lord Irvine of Lairg. I remember when he had ceased to be Lord Chancellor and a Labour Government were tabling an obnoxious provision, I think to take away the rights of asylum seekers in the courts, and the noble and learned Lord simply put his name down to speak—that was all he had to do and the Labour Government saw the error of their ways and did the right thing.
I wish I could say the same of the present Government, whom I support within the coalition. They have had two warnings from two different committees, on both of which I serve: the Joint Committee on Human Rights, which has given two reports; and the Constitution Committee, chaired by the noble Lord, Lord Lang, five of whose members are members of the Conservative Party and, not as far as I know, dangerous radicals. One might have thought that the warning given by the Constitution Committee that, the judges having expressed their concerns, the Government should heed the warning, might have cut some ice within the Ministry of Justice and with Mr Grayling. I am very sorry that that has not been the case.
Part 4 places obstacles in the way of people seeking to challenge the legality of the actions of the Government and other public authorities. It interferes with the discretionary powers of the courts by placing handicaps in the way of public interest groups and their lawyers, and the ordinary woman and man in the street, in seeking to ensure that the Government and other public authorities act lawfully, fairly and rationally in accordance with logic and accepted moral standards of good government.
Judicial review is the process by which the courts enforce compliance by public authorities with the law. It is an appropriate and necessary judicial function because, as Lord Bingham pointed out in his great little book, The Rule of Law, the courts act as,
“auditors of legality: no more, but no less”.
Tom Bingham summed up the basic principle in the following way—and this I say to the noble Lord, Lord Tebbit, because even if he regards me as an unreliable Liberal Democrat, perhaps he will take it from Lord Bingham, one of our greatest judges, in his book—when he said:
“Ministers and public officers at all levels must exercise the powers conferred on them in good faith, fairly, for the purpose for which the powers were conferred, without exceeding the limits of such powers and not unreasonably”.
Those are the principles of administrative law in this country—no more and no less—and they remain as they were when Lord Bingham wrote and as they were 30 years ago.
Lord Tebbit
Who does my noble friend think should make the judgment as to whether the powers that were legally used were fairly used? Different people have different judgments about what is fair. That of the Liberal Democrats is very different from that of the Conservatives—indeed, it is sometimes different from that of the Labour Party.
Lord Lester of Herne Hill
I ask the same question of the noble Lord, Lord Tebbit. If he thinks that Ministers, not judges, should make the judgment, then we are in wholly different places. The answer to the question of the noble Lord is that in the end it is for Parliament to make the laws, it is for the Executive to administer the laws, but it is ultimately for the courts to decide and to declare what the law is when it comes to public law, as for any other kind of law.
It is important to emphasise, for the benefit of the noble Lord, Lord Horam, in particular, that there is no automatic right to judicial review. It has to be applied for. It is granted only if the administrative court is satisfied that the application raises a properly arguable case by someone with a sufficient interest—not a mere busybody—who has exhausted any effective alternative remedy, such as a planning appeal.
The application has to be made without inordinate delay. The concerns of the noble Lord, Lord Horam, about delay are, therefore, met by the strict requirements of the administrative court. If the application succeeds, the court has a broad discretion that the remedy is necessary and proportionate. It will not permit the procedure to be abused. It will punish any abuse of procedure with an appropriate cost order.
If, as the Justice Secretary contends,
“‘left-wing’ campaigners have exploited the process of judicial review to frustrate government initiatives”,
—dear me!—the courts have ample powers to ensure that judicial review is not abused, including making cost orders against those who abuse the procedure.
It is an ancient principle, probably going to back to Magna Carta, that under the common law, which is at the heart of our system, no one shall be judge in his own cause. In seeking to interfere with the powers of the courts, and to place obstacles and handicaps in the way of application for judicial review, the Justice Secretary and the other Members of the Government—Liberal Democrat as well as Conservative—are judges in their own cause. They have a political self-interest in what is in Part 4.
But this House is in a different position. We have a vital constitutional role in protecting the rule of law and the accountability in law of Ministers and of government departments and of all public authorities. The House has the opportunity this afternoon to fulfil that role by placing the wider public interest against party-political interest. That is why, though I do not enjoy being a rebel, if there are Divisions on any of these amendments in the name of the very distinguished supporters of this one, I shall cross the floor and shall vote with them.
Lord Deben (Con)
My Lords, many Members of your Lordships’ House will understand that I very often come to debates on legal matters in order to make sure that legally trained people do not have it all their own way. I have always felt it a danger of this House that legal issues are debated by judges, who, it is often suggested, may have ulterior motives. I speak today because I think the judges are entirely right, and the concern that I have is a concern for my own historic profession of politician.
I well remember the occasion on which I was able to use the fact of judicial review to get my civil servants to understand why I would not accept a particular appeal on a planning matter. It was because it was quite clear to me that the very powerful interests, whose infrastructure aim I entirely approved, had failed in their duty to look for alternatives to the proposal that they were putting forward. They had not, therefore, fulfilled the law. Now, sometimes it is easy for a Minister to make such a decision, but sometimes it is inconvenient. It is important that embarrassment and inconvenience should not be allowed to go so far that it means that Ministers make decisions which are unlawful. Somebody has to decide when a decision is lawful and when it is not. That is what judicial review is about; it is a very simple concept.
Lord Spicer (Con)
I am most grateful to my noble friend for giving way. He is making the distinction, in a brilliant speech, between judges making the law and interpreting the law, but is that not precisely what the European Court does: it makes the law, which is then interpreted back?
Lord Deben
Happily, we are not discussing the European courts at the moment. In case anyone did not know, I am entirely in favour of our membership of the European Union. I think we should keep the defence of people’s freedom by the Bill of Rights that we have in the European Union, invented after Winston Churchill. I could go on for a long time, but I will not be led there by my noble friend. The truth is that we are talking about British law, British judges, British courts and the British defence of freedom that is judicial review. I hope that your Lordships’ House will remember the words of the noble and learned Lord, Lord Woolf, when he remarked that this is part of the structure that saves us from having to have a written constitution. This is the mechanism that we have invented. As a mechanism, every now and again it is annoying to Ministers. That should be a judgment of its correctness. That is what it is there for: to make Ministers annoyed enough to make sure that they do the right thing. In that sense, I have in the past—as is bound to be true after 16 years as a Minister—been annoyed by the facts of judicial review, but it made me a better and fairer Minister because I had to think of the law and not of my opinion at a particular point.
I want to say just one other thing. My noble friend Lord Horam said we should trust the judges. That is precisely what those of us who support the amendments are asking. We are saying that we should not say the judge shall not; we should say that the judge has the right to decide. We think there ought to be discretion but the Government are saying that there should not. I find that unacceptable. I do not want the division of powers that one sees in the United States. I want the kind of elegant association of powers that we in this country have worked out over the years. However, an elegant association of powers is held in place by very delicate mechanisms, which we fiddle with at our peril. This is one of those very delicate mechanisms that we will not fiddle with without very considerable effects. Just in case anybody heard the comment about left-wing people misusing this, I remind the House of what happens in the United States where it is almost universally right-wing people who make life almost impossible for elected Governments by using their system of separation of powers. How extremely clever we have been over the centuries to produce something that works so well, is so delicate and interrelates so well. Having done that over centuries, let us be a bit careful about being too clever with it now.
Baroness Williams of Crosby (LD)
My Lords, we have heard a brilliant speech. I associate myself very much with what the noble Lord, Lord Deben, said about the absolute necessity for Ministers to be obliged to bear in mind all the time how far their policies and decisions are in line with the law. Like the noble Lord, Lord Deben, I was also a Minister for a long time. During that period, on more than one occasion, I was confronted in a very direct way with challenges to the decisions I had made, particularly about issues around comprehensive schools. What I learnt from that experience was, first, to be very careful and thoughtful about any proposals that my department made in my name. Secondly, I learnt to have great respect for the often painful occurrence of reviewing my decisions in great detail, no doubt to the displeasure of a number of local authorities who did not share my view.
I want to make two other quick points. First, our own great Conservative Party has always been deeply suspicious of statism, unlike many right-wing parties in Europe and elsewhere, and has always had a commitment to the idea that the Government might be wrong and that they should be subject to the rule of law like all other citizens and parties in society. I find it, therefore, all the more puzzling that a party with that record and reputation can put forward this extraordinary Bill. I am here, not having taken part in the earlier stages—I had no intention of taking part—only because, when I read in detail both the Bill and the amendments, I became very troubled indeed.
The second crucial point is that the Conservative Party has always been centrally loyal to the concept of its patriotism to the British tradition and British values. As my noble friend Lord Marks, the noble Lord, Lord Deben, and the noble and learned Lord, Lord Woolf, have all said, at the very heart of the best of British values is the concept of accepting the rule of law. It is worth saying that almost no other country in the world—certainly no court, such as the European Court of Human Rights, which is nothing to do with the European Union, as may not be realised; it is to do with the Council of Europe—allows an individual, someone with no standing, no resources and no money to challenge the might of the state itself.
I am very troubled by some of the clauses, which will make it difficult for that same humble individual citizen to stand up to the state because he or she lacks the resources to do so or the ability to pay for brilliant lawyers. That is exactly the opposite of what we thought—what I have always deeply believed—that judicial review was all about. Whatever the process may be called, the truth of the matter is that the public broadly, to put it bluntly, trust the judiciary rather more than Governments, who come and go. Our judiciary has undoubtedly formed itself a substantial reputation.
The noble Lord, Lord Deben, rightly referred to the judicial system in the United States. Many Members of this House will be aware that over the past five or six years, there has been an absolutely steady uniformity of verdicts—five to four, five to four, five to four—on one issue after another, because, like it or not, the judiciary in the United States is politically chosen. That is why you cannot treat it in the fullest sense as independent; it is heavily dependent on who was President at the time that a particular judge was appointed.
Let us take pride in what we have been and what we are: one of the few countries in the world where an individual is treated as having the full right to challenge the Government and other forms of the Executive. Let us recognise that that has been treated in much of the rest of the world—not least on the continent of Europe —as one of the outstanding claims for the United Kingdom to be treated as an exceptional country, one that, ever since the days of Winston Churchill and the Council of Europe, has been persistently followed. It has had a huge influence on, for example, eastern and central Europe who follow us in that concept of the rule of law.
I conclude by saying that it would be an act of absolute tragedy if we were to allow a law to go through that begins to put in doubt that reputation.
Lord Cormack (Con)
My Lords, not for the first time, the noble Baroness, Lady Williams, has delivered a brilliant speech—a wonderful defence of Conservative values. I congratulate her on that. She made an extremely telling point when she talked about the politicisation of the judiciary in the United States.
I am very proud to be an honorary citizen of Texas, but when I was in Texas in 1984, at the time of the presidential election, I was invited to go to a $1,500-a-plate barbecue in aid of the man who was running for chief justice of Texas. I said to my congressman colleague, “We don’t do it like that in the UK, and I am bound to say that I am extremely glad of that”. I am very glad that that is still the case.
We have heard some outstanding speeches this afternoon. My noble friend Lord Deben was at his very best. We heard a very powerful speech from the noble and learned Lord, Lord Woolf, and a short, telling, moving speech from the noble Baroness, Lady Campbell of Surbiton, who was, in effect, speaking for the least of the little ones—to use a biblical phrase.
It is a pity that we are here again, because we have been around this course before in debates on the Bill. I had very much hoped that my noble friend who will be responding to the debate, for whom I have a genuinely high regard, would have been able to persuade the Lord Chancellor and others to have taken note of the telling points made in your Lordships’ House. I cannot help but wonder if the fact that we no longer have a distinguished lawyer as Lord Chancellor has something to do with it.
In his speech, the noble and learned Lord, Lord Woolf, talked about the significant and powerful difference between the words “must” and “may”. It is a disservice to our democracy to fetter the judiciary. Of course, they can sometimes be exceptionally tiresome. There is not a single Member of your Lordships’ House—other than, perhaps, those who are learned in the law—who has not been exasperated and annoyed from time to time by what judges have said, but the rule of law is what guarantees our liberties in this country. I am so glad that the noble Lord, Lord Lester, quoted from that brilliant book by Tom Bingham. We must not allow any Government to fetter the freedom of the judiciary.
I have mentioned Magna Carta before and I make no apology for mentioning it again. It was alluded to by the noble Lord, Lord Lester. Next year we shall commemorate Magna Carta and celebrate its 800th anniversary. Already, two of the barons who look down on us in this place have gone: one is gracing an exhibition of Victorian sculpture in the United States and the other is to guard the entrance to the British Library’s great exhibition devoted to Magna Carta next year. Much of Magna Carta is not relevant today, but its centrality is:
“To no one will we sell, to no one deny … justice”.
We are moving in that direction if we do not amend the Bill in this way. That is not a good way to commemorate and celebrate.
The Prime Minister has made a number of extremely powerful comments about Magna Carta, after the first unfortunate one on American television. He has said how crucial it is that we recognise the values encapsulated in that most seminal document in our constitutional history. For all the pettifogging, interference and annoyance that might be caused, one of the things that we have to defend is the right of people like the noble Baroness to take on the big powers and the establishment.
How much I agreed with my noble friend Lord Carlile of Berriew when he was talking about those infrastructure projects. I do not agree with him on the infrastructure projects—on some I do, on some I do not—but that is another matter entirely. I agree that there must be the opportunity to challenge. No Government should have the power to prevent such a challenge simply because it is inconvenient.
I hope that, in winding up, the Minister will be able to indicate that he has listened to the almost unanimous voice in this debate. I hope that, even at this late stage, he will do something—perhaps introducing an amendment at Third Reading—to recognise that the case made by the noble Lord, Lord Pannick, in his opening speech and the case made so very powerfully with such quiet effectiveness by the noble and learned Lord, Lord Woolf, has been listened to in government circles and will be heeded.
Lord Phillips of Worth Matravers (CB)
My Lords, if those in this Chamber who were opposed to these amendments at the start of this debate have not been converted by what they have heard, nothing that I can add is going to convert them. I simply say to the noble Lord, Lord Tebbit, that Parliament did not create judicial review; the judges did. It was, I hasten to say, before I became a judge and was one of the best things that our common-law judges have ever done. These amendments are designed to ensure that Parliament does not damage that which the judges created, and they deserve the support of this House.
Baroness Kennedy of The Shaws (Lab)
My Lords, I know that there is always a sigh in this House when a debate is dominated by lawyers. However, I remind the House that sometimes it is lawyers who know the pain that citizens in our country experience, because we represent them, and that this is about the actual lives on which judicial review has an impact. It is always about the person whose business is to be closed down from trading, based on a department’s or a local authority’s decision that they want to challenge, or the person whose mother is in a care home and suddenly finds that it is being moved or closed down, with no consultation as to the impact on her and her family. It may be about the effect on a disabled child of a decision about their schooling. Those things are about real people’s lives and that is why this is not just a constitutional debate of high flown words or complicated legality—it is about the real impact on the lives of ordinary people.
When your Lordships come to vote in our Lobbies, as I am sure you will be asked to do, I say to those of you who are not lawyers that this is really about people’s lives and about the law coming into play to protect citizens. That is why lawyers and organisations such as the Bar Council, the Law Society and Justice—cross-party and no-party organisations—know why the rule of law matters in our nation and our democracy. This is not, I say to the Minister’s noble friend Lord Tebbit, about judges somehow usurping the power of Parliament. This is about justice, fairness and the things that we hold dear, so I say to my colleagues in this House who are not lawyers that this is not a festival of lawyering. It is about ordinary people.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, we now turn to Part 4 of the Bill, which has proved to be one of the more contentious areas at Second Reading, in Committee and today. The debate has ranged far and wide and it has been magnificent. We have discussed the constitution of the United States, the merits of the European Union, the Council of Europe, King Charles I, fracking, the Severn barrage and HS2, to name a few topics. I am sure that noble Lords will understand if I do not deal with all of them.
Similarly, there have been speeches of an omnibus nature, particularly by the noble Lord, Lord Beecham, and my noble friend Lord Marks, in the sense that they have covered matters beyond Clause 70. I will deal with those arguments when we come to the relevant groups. We are focusing on Clause 70 at this juncture. The Government have listened with great care to the arguments raised by noble and learned Lords and noble Lords during those debates. I assure my noble friend Lord Cormack that I have listened carefully again this afternoon to the speeches made by a large number of your Lordships. However, we do not resile from our central contentions, which I trust the House will allow me to set out briefly.
First, it is our contention that judicial review, when used properly, is an essential component of the rule of law. It allows individuals and businesses to invite the court to test the lawfulness of public bodies’ actions. Secondly, judicial review as it presently stands is not always perfect. On several occasions, the Government have set out some of the examples of delay and cost which can be caused, such as the challenge to the exhumation licence concerning the mortal remains of King Richard III which the noble Lord, Lord Beecham, described as “ludicrous”, despite his own view that York is the more appropriate resting place.
Thirdly, while we have taken some steps, working with the judiciary where appropriate, to rebalance the current approach, such as through the creation of the planning court, some further reform is needed. Noble Lords may be aware that the use of judicial review has increased more than threefold in recent years from around 4,200 in 2000 to around 15,600 in 2013.
The noble and learned Lord, Lord Woolf, was kind enough during our Committee debates to offer me a copy of De Smith’s Judicial Review, of which he is a distinguished editor. I have to say that he honoured his pledge most generously. I have been in receipt of De Smith and I have done my best to reacquaint myself with its contents. The preface to the seventh and most recent edition reads as follows:
“English administrative law is now one the most celebrated products of our common law and doubtless the fastest developing over the past half century”.
We accept that many judicial reviews will be well founded and brought in good faith, and that much of the growth has been driven by the number of immigration and asylum cases, but it remains a simple fact that a well timed judicial review can delay the implementation of crucial policies or projects for months or even years. Even when decisions are perfectly in line with due process, months can be spent preparing for and defending claims when that time would be better spent taking forward the reforms that the country needs.
The debates have been, perhaps predictably, dominated by those with long experience of the law and, of course, on the government Benches we welcome the expertise which has been brought to bear, even if we do not always welcome the contents of all the speeches. However, there is another side to judicial review—one which pertains to what happens, or does not happen, outside the courtroom as judicial reviews proceed. As they proceed, arguments are made and countered; witness statements are prepared and probed; and fine points of law are weighed and determined. Crucial projects with direct implications for jobs are delayed, perhaps lost.
For example, a judicial review was initiated by a competitor to the proposed development of a supermarket in Skelton, North Yorkshire. That challenge was described by the judge at the earliest possible opportunity as “a hopeless case”. Yet work was delayed for six months. Irrespective of the rights and wrongs of the case itself, is it right that a hopeless judicial review can be used to such effect? The risk of this happening was recognised by that great judge Lord Diplock who, when emphasising the importance of the permission stage in judicial review said:
“The requirement may also prevent administrative action being paralysed by a pending, but possibly spurious, legal challenge”.
I quote from Inland Revenue Commissioners v National Federation of Self-Employed and Small Businesses 1982 appeal case 617 at page 643.
It is important that we do not ignore the fact that such cases place a considerable burden on the public purse in terms of the time of judges, lawyers, Ministers and officials. Overall figures are not recorded, and are probably not recordable, but by way of illustration, I can report that the total legal costs of the Richard III case to the Ministry of Justice alone have been put at more than £90,000, none of which is recoverable. Consequently, we make no apology for having taken some sensible steps already, and none for making a few more small but important changes.
Outside your Lordships’ House the debate about these reforms has been rather long on hyperbole. Reference has been made during the debate today, and indeed in Committee, to left-wing causes. Of course, I entirely accept that it is irrelevant whether a cause is left-wing, right-wing or apolitical. What matters is whether the challenge is justified and whether it has merit. However, I have seen it suggested that the Government wish to do away with judicial review altogether and even that these reforms will lead to imprisonment without trial. As I will explain, these fears are entirely ill founded. The Government believe that the roles of Parliament and the courts should exist within a relationship of mutual respect and co-operation. In that context, I should emphasise what the provisions do not do: they do not seek to undermine or fetter judicial discretion; they do not seek to challenge the basis on which judges approach questions of judicial review; and we have not altered legal standing, much as that was open to criticism. That was a response to the consultation paper.
Lord Pannick
I am grateful to all noble Lords who have spoken in this fascinating debate. Clause 70 has been defended by the noble Lords, Lord Horam and Lord Tebbit, and by the Minister, whom I thank for his very full response to these amendments, on the basis that there is too much judicial review, it takes too long and is too expensive, and that something needs to be done about it. However, as so many of your Lordships have explained this afternoon, that fails to recognise the threat that Clause 70 poses to the rule of law. As we have heard, that is not something, as the Minister was suggesting, that only lawyers are concerned about.
For my part, I am perfectly prepared to accept greater powers for the courts to throw out abusive cases. I am happy that we should speed up the legal process and make it less expensive. My concern is that Clause 70 is a blunt instrument. It would impose a duty on the judge to dismiss cases which raise issues of public and legal importance. That is why Amendment 146 proposes that Clause 70 should confer a discretion rather than impose a duty; the Minister repeatedly referred to a “fair balance”, and that is a fair balance.
As the noble and learned Lord, Lord Woolf, said this afternoon, if the judge is to do justice in this important and sensitive context, he or she must retain a discretion so that judges can continue to decide issues of great public importance. That is what is at stake here. Should an Act of Parliament say that the judge has no power to rule that a governmental exercise of power is unlawful? With all due respect to the Minister, that is not a modest reform. I invite your Lordships to retain judicial discretion. The Minister spoke of mutual respect between Parliament and the courts. I think that mutual respect is best maintained by writing judicial discretion into Clause 70.
I am sorry that the Minister should suggest today that this House performing its vital role of scrutiny of the Bill by retaining judicial discretion is somehow an inappropriate challenge to the elected House. It is nothing of the sort.
Lord Pannick
Amendment 146 is to be read together with Amendments 147, 149, 151, 152 and 154, each of which would substitute judicial discretion in Clause 70 for absolute judicial duties. I wish to test the opinion of the House.
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Lord Beecham
Lord Beecham
My Lords, in the interests of making progress with more important matters, I shall not move this amendment.
Lord Pannick
Lord Pannick
My Lords, I shall speak to Amendments 157 to 163. Clause 71 requires the provision of information about financial resources in judicial review claims. Clause 72 will regulate the use of information about financial resources on the assessment of costs in judicial reviews. The position is that the Government are seeking to impose duties on applicants for judicial review to provide information about financial resources when no such duties are imposed on claimants in other forms of civil litigation. I am aware of no general evidence of any mischief which these clauses are designed to remedy. They will have a severely inhibiting effect on judicial review applications.
If a claimant is able to demonstrate that they have a properly arguable case on the merits and they satisfy other requirements such as standing and time limits, they should not be further obstructed and deterred by complex requirements to disclose financial information. Even if there were a problem which needed to be addressed, I am concerned that Clauses 71 and 72 again, like Clause 70 on which the House has just expressed its view, are drafted in terms of judicial duties rather than conferring a discretion on the judge which would enable him or her to have regard to the circumstances of the individual case. Amendments 157, 158 and 160 would replace judicial duties with a judicial discretion. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I support these amendments. First, I declare an interest as the honorary president and a former director of the Child Poverty Action Group. It is an organisation which helped to pioneer the use of judicial review for the marginalised citizens about whom we heard in debating the previous amendment, thus emphasising that we are talking about not just the interests of lawyers but the interests of some of the most deprived, marginalised citizens of our country. I speak also as a member of the Joint Committee on Human Rights. I remind your Lordships’ House that in the first of our two reports on our grave concern about the human rights implications of these changes, we said:
“We therefore do not consider the Government to have demonstrated by clear evidence that … judicial review has ‘expanded massively’ in recent years as the Lord Chancellor claims, that there are real abuses of the process taking place, or that the current powers of the courts to deal with such abuse are inadequate”,
notwithstanding what the noble Lord, Lord Horam, said with regard to the previous amendment. I have reread our debates on this issue and I have read all the briefing that we have received. I can only come to the conclusion that the provisions in Part 4 are a series of highly imperfect solutions looking for a problem—a problem that no one else can see.
As regards Amendment 157, in Committee I raised the concerns of NGOs. I said that they warn of,
“the chilling or deterrent effect of these clauses, which appear to mean that people who are not directly party to the proceedings but who have supported an applicant could be held liable for costs”.—[Official Report, 30/7/14; col. 1601.]
Michael Spencer, solicitor for the Child Poverty Action Group, said:
“If individuals or groups fundraise or seek donations to help bring their case, the financial clauses of the Bill will put their donors and funders at risk too”.
The Minister responded quite fully to my concerns and fears. He said that,
“we do not believe that the provisions would affect the common law position concerning when costs would be awarded against a party … These clauses should not cause anyone to pay costs who would not do so under the current law, except those who should but of whom the court is unaware. I hope that will allay, to some extent, the fears that some have about making challenges to a school or some other small project, which they might reasonably hope would be the subject of a judicial review”.—[Official Report, 30/7/14; col. 1612.]
However, I fear that the concerns and worries of groups outside this House have not been allayed. As the most recent briefing from this very wide group of NGOs, which represents a wide range of lawyer and non-lawyer interests in this area, still raises concerns, I discussed with Justice why it was still worried about this, despite the reassuring words that the noble Lord gave us in Committee. Justice said:
“While the Minister’s assurance is welcome, as the Minister explains, he cannot predict how the courts will respond to the change in position proposed by the statute. Similarly, Parliament cannot have a full picture of the rules which the court will be applying, as the Bill provides for the detail of the change to be in the rules to be set down by the rules committee. Yet, there is nothing in the Bill which would send a message to the courts that they should not depart from their previous approach to the allocation of costs. If the Government doesn’t intend to change the position in the common law, the question is: ‘Why not make that clear on the face of the Bill?’. Instead, by leaving the ambiguity in place, and creating a clean statutory slate of instructions for the courts, Ministers are creating a real risk that individuals will be deterred from litigating while the costs risk is ascertained. As and until the position is clear, individual solicitors will be unable to advise their clients on the likely costs risk, if any. Caution will be required. The breadth of the disclosure requirement in Clause 71 makes this chilling and deterrent effect particularly dangerous”.
I will not go on but there is a real danger here that I hope we in this House will prevent happening.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I, too, support Amendment 157 for the reasons already given by the noble Lord, Lord Pannick, and the noble Baroness, Lady Lister. There are indeed currently real perils in Clause 71 in the way of the chilling effect that it must inevitably have. In Committee on 30 July, as reported at col. 1607, in relation to what was then Clause 65 and is now Clause 71, the Minister twice said that the senior judiciary welcomed this provision. I was troubled by that and looked at the response of the senior judiciary of last November. I hope that I have the right document and that I have isolated the right paragraphs; that is, paragraphs 34 and 38. I am sure that the Minister will correct me if I am wrong, They suggest that, in certain circumstances, there should be mandatory disclosure of financial circumstances. As I read that response—and I am unsurprised by this—the important point is that it refers only to when determining whether to make a protective costs order or when questioning,
“whether to make a costs order against a non-party”.
Those are not routine events, and they would not require, as the clause as it stands does, a disclosure of financial resources on all applications. If I am wrong about that the Minister will correct me, but if I am right, with respect, that wholly deprives him of the support on which he rested in Committee: the senior judiciary’s response.
Lord Marks of Henley-on-Thames
My Lords, I simply do not accept that it is right that a requirement for financial disclosure should be imposed before the permission stage in a judicial review application. The time for considering such information is when the order for costs is considered, and not before. At the costs stage—the stage with which Clause 72 is concerned—it is clear which side has won, and the judge knows who is and who is not vulnerable to a costs order. Only at that stage is the issue of financial support relevant, and at that stage the present position is that the judge already has the power to make a costs order against a non-party who has financially supported an unmeritorious application. There is no utility in expanding or developing that power further. But if there is to be legislation, I urge the House to accept that it should be left to the discretion of the judge as to what order for costs he makes. There may be some sense, however, in legislating for the court at that stage to have the power to require financial information in order to help the judge form a conclusion. That is the limited purpose of my amendments to Clause 72. With your Lordships’ consent, I shall detain the House no further.
Lord Mackay of Clashfern (Con)
My Lords, those of your Lordships who were present in Committee will remember that I read out a substantial section of a book by the noble Lord, Lord Adonis, in which he described what I understood to be the use of judicial review as a means of frustrating a government policy that had been passed by Parliament. I shall not repeat the detail now; it is in the book and I have put it on the record here. The problem on which the noble Lord focuses in that passage is that the arrangements made for pursuing this policy involved looking round for somebody who could be a legally aided litigant, and would therefore be provided with legal aid and also protected against costs in the event of his losing. The full detail is given in those passages.
It seems to me that some mechanism is required to enable the judges to deal with such points as part of the decision on whether permission will be granted to a particular individual to proceed. So far as I am concerned, judicial discretion in this area would be perfectly reasonable and, as has been said earlier, rules of court would be required to deal with it. There is definitely a problem here that needs to be dealt with at the opening stage of the proceedings in order that justice may be done in relation to that kind of campaign, which I have no reason to doubt is accurately described by the noble Lord, Lord Adonis, whom I am sure your Lordships know and respect.
Lord Lester of Herne Hill
My Lords, my experience of protective costs orders arises from the Corner House case. Corner House was a tiny NGO with almost no money and it was challenging the lack of proper consultation when the export credit guarantee issues arose in relation to possible corruption. My recollection is that the Court of Appeal developed at common law the idea of a protective costs order, but it was extremely careful to limit that so that anyone with real funds would have to account at the earlier stage before such an order would be made.
I have not been aware, in subsequent case law since the decision of the Court of Appeal in the Corner House case, of protective costs orders being abused. My impression is that the courts have been strict, disciplined and very jealous of the need to avoid any waste of public money. Therefore, although I agree with the noble and learned Lord, Lord Mackay of Clashfern, that there may be some scope for rule-making, I do not believe that there is any need for a statutory requirement such as the one we are now considering.
Lord Beecham
My Lords, the Opposition will support the amendment moved by the noble Lord, Lord Pannick. It seems to me quite possible, within the framework of that amendment, to proceed along the lines mentioned by the noble and learned Lord, Lord Mackay, and the noble Lord, Lord Lester.
Lord Faulks
My Lords, Clauses 71 and 72 are about transparency. They require an applicant for judicial review to provide, with their application, information on funding for their case and that the court considers this information when exercising discretion to order costs. It is important to emphasise that, while permission will not be granted until information has been provided, there is no question of preventing permission if the applicant’s funding is insufficient, and the judiciary continue to have complete discretion in relation to the making of costs orders against third parties disclosed in that information.
Requiring the applicant to provide this information to the court will give the court the information necessary to achieve flexibility in apportioning costs fairly, and to prevent a third party from using a front man or shell company to shield themselves from incurring their share of costs. Your Lordships have heard that there is a potential problem, and although it is not always easy to know what the situation is, this provision should enable the courts to make their decision based on evidence. We say that the judges do not always have all the relevant information available or presented to them, which has the potential to hinder their ability to order costs in a just and equitable manner.
Amendments 157 and 158 would stop the provision of information about financial resources being mandatory, allowing for permission to be granted where no information has been provided but permission is “nevertheless appropriate”—which is undefined. The Government consider this unnecessary, as the clause does not stop permission being granted if insufficient finances are available. It requires only that the court should be provided with an accurate picture. The court still has discretion.
The clauses will not require onerous or invasive information from applicants, and the information requested should always be information that the applicant would have, even if they did not have funding at that stage. The clauses are designed to promote transparency in court proceedings, not to provide for a time-consuming forensic examination of an individual’s financial affairs.
The noble Lord, Lord Beecham, has not moved Amendment 156. The amendments tabled by the noble Lord, Lord Marks, and Amendment 162, tabled by the noble Lord, Lord Pannick, seek to change when the court should have regard to funding information, and what that information should be. My understanding is that they rely on Clause 71 being removed from the Bill and set out the power for the court to require the applicant to provide certain information about funding when the court is determining, or intends to determine, costs. They also limit the information to sources of funding that are actually available to the applicant, rather than sources that are likely to be available, and rather than looking at the applicant’s ability to fund the judicial review generally, the information would be limited to how the applicant would meet the other side’s costs.
Amendment 161A would mean that those who are likely to fund and drive litigation could escape the appropriate costs liability simply by not promising to provide the support. Amendments 160 and 161 seek to instate a position where the court need not consider financial information provided by the applicant, even if it considers it appropriate. In my view, these amendments are unnecessary and defeat the point of Clause 71 in making sure that the court has clear and transparent information early in proceedings.
The key to Clauses 71 and 72 is they do not create new cost liabilities for claimants, nor does the sufficiency of funding they demonstrate have an impact on the progression of the case. In answer to the noble Baroness, Lady Lister, the courts would not be expected to make an award against a third party who was simply funding the litigation and not seeking substantially to control, influence or benefit from it. I said words to that effect in Committee; I say them again now, and I hope those words will be useful when anyone comes to interpret this provision should it become law. It is clear that the applicable case law requires more than only funding; as in the case law referred to by my noble friend Lord Lester, the person must be seeking to drive the litigation or to benefit from a potential remedy in the case. I should emphasise that.
Under those principles, costs awards are not prescriptive, nor is it our intention that they should be. We are simply allowing the court to make decisions with the appropriate information available to it. For example, the court will not have to make an award against a parent in a school challenge case and would not be expected to do so. We do not agree with Amendment 162 that prospective funding or the ability of company members to provide financial support can be excluded from this consideration, nor do we agree that the court should consider only those who have promised to provide funding. In our view, that creates an easily avoidable threshold.
We also do not agree that this information should be provided only on the making of an order by the court, as stated in Amendment 159B. There is no reason why the court should not be informed of the parties driving litigation early on in proceedings, as this would enable the judge to make decisions on costs without having to order the parties to provide information. Essentially this amendment seeks to favour the opaque, rather than the transparent. What information an applicant should provide will be set out in court rules. The rules will not require invasive financial information but will require the claimant to be clear about the sources of their funding. It will be perfectly acceptable to update the court if funding does not materialise; that was a point made in Committee and I would like to make that clear. The requirements will not be burdensome for claimants. The Government have on many occasions stated that they wish to see a light-touch approach, and I am sure that any rules will be fair and proportionate to the court’s need for transparency.
The noble and learned Lord, Lord Brown, made reference to the judiciary’s response. I am sure he has read carefully what it is and I am in no position to contradict it. My understanding was that the judiciary had welcomed transparency, although, having revisited what I said in Committee, I did not seek to rely specifically on that as the only basis for this argument. He may well be right that the comments were directed more at non-parties than in the situation of an applicant. If I inadvertently misled Parliament, I make it absolutely clear that that was not my intention.
The requirement for transparency is wholly understandable and wholly consistent with judges making decisions on the best possible information. The question is: is this going to be chilling? I suggest that it will not be chilling to those who have good reasons for bringing claims and who are, as one would expect, open and frank about what, in financial terms, is driving the challenge.
This has been a useful debate and I hope it has enabled me to be clear about what lies behind Clauses 71 and 72 and to allay any remaining concerns. The Government take the view that these clauses do not take away the judge’s discretion. As is always the case, he or she will make the decision on the basis of the facts of each case. These clauses enable the judge to have better information before exercising the discretion. No judge wants to exercise a discretion in the absence of all the information that could reasonably be made available to them. It is not obvious to me why this is as objectionable as it is said. With that reassurance, I hope that the noble Lord will be prepared to withdraw his amendment.
Lord Pannick
My Lords, the purpose of Amendments 157, 158, 160 and 161, which are all of a piece, is simply to ensure that the court has a discretion rather than a duty in relation to information about the funding of judicial review. It is very important to be clear in the Bill that the court retains a discretion in relation to these matters. That is what these amendments seek to do in relation to funding issues. I wish to test the opinion of the House on Amendment 157.
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“( ) The High Court and the Court of Appeal shall have a discretion whether to order an intervener to pay the costs of a relevant party to the proceedings, and shall have a discretion whether to order a relevant party to the proceedings to pay the intervener’s costs.”
Lord Pannick
My Lords, I shall speak also to Amendment 165. Your Lordships now turn to Clause 73, which concerns the costs of interveners in judicial review proceedings. Your Lordships will know that often in judicial review cases the court allows a person or body to intervene because they have knowledge or experience which may assist it in resolving the legal issues. Clause 73 states that interveners may not receive their costs other than in “exceptional circumstances”, and it adds—this is my concern—that, unless there are exceptional circumstances, an intervener must pay any costs that have been incurred by a party as a result of that intervention.
I cannot understand why such a provision is necessary or appropriate. The current legal position is clear and fair: the court has discretion over whether to order a party to the judicial review to pay the intervener’s costs or whether to order the intervener to pay costs to a party. Clause 73 is manifestly unfair. It will create a strong presumption that the intervener must pay costs, even if the intervention is helpful to the court in raising points that assist it in arriving at its substantive judgment. The Minister may say that the intervener can resist paying costs on the basis that there are “exceptional circumstances”, but there is nothing exceptional about the intervener assisting the court: it happens every week in judicial review cases. In any event, if there is a statutory presumption, rebuttable only by showing exceptional circumstances, that the intervener must pay the costs, public interest bodies will be far less likely to intervene. The courts will be denied assistance from those public interest bodies, which will be greatly to the public detriment and greatly to the detriment of the legal system, whether the intervention is from Liberty, the GMC, the UN High Commissioner for Refugees or, indeed, the Home Secretary—because a number of interventions in judicial review cases are made by government departments. None of this makes any sense whatever.
Amendment 164 would provide that it is a matter for the discretion of the court whether to order costs to be paid by or to an intervener. I commend that amendment to the House. I beg to move.
Lord Hope of Craighead (CB)
I support the amendment. It is a feature of Clause 73, as I am sure the Minister will have noticed, that it does not mention the Supreme Court—one should be thankful for small mercies—but it creates a very unbalanced situation. As the noble Lord, Lord Pannick, has explained, interventions are extremely helpful. Nobody has a right to intervene—courts at every level give permission if they are persuaded that the intervention would be of use to them—so that I cannot see that there is any compelling reason for turning interveners away. The court values them, and certainly, from the point of view of the Supreme Court, in my experience where we allow an intervention we derive benefit from it.
The regime that the clause seeks to create seems rather unbalanced. From the Supreme Court’s point of view, as we are a court of appeal, it would much rather, I am sure, that those who had a point to make were able to make it at the Court of Appeal level if not at the level of the High Court. While I welcome the absence of the Supreme Court from this clause, it adds to my feeling that there is something wrong about it. Given that the intervener has no right to intervene and that the courts are perfectly capable of controlling the volume of intervention and the time taken by interveners, which the Supreme Court does regularly, I cannot see any value in the reform, if one can call it that, that the clause seeks to bring about.
Lord Low of Dalston (CB)
My Lords, it is a pleasure to find myself speaking after the noble and learned Lord, Lord Hope—not for the first time. I am very worried about a particular aspect of the provisions we are considering today; namely, their impact on children. That is thrown into sharp relief by Clause 73, which requires that interveners pay the costs of their intervention in the circumstances outlined by the noble Lord, Lord Pannick, save for those which are “exceptional”.
We had a briefing here, which a number of noble Lords may have attended, from a number of children’s organisations representing children and manifesting their concern for the rights of children. The points that they made were extremely powerful, and I am glad to have the opportunity of raising them in this debate.
Following cuts to legal aid, children are increasingly forced to face court proceedings without a lawyer. In these circumstances, litigation brought by charities, NGOs and children’s rights organisations in the public interest is ever more important. Equally, in the new environment where they are increasingly faced by litigants in person, the courts increasingly value the contribution of third-party interveners providing expert advice to assist them on specific points of law and fact, including points on what is in the children’s best interests.
As the noble and learned Baroness, Lady Hale, said in a speech that she gave to the Public Law Project conference in October 2013:
“Once a matter is in court, the more important the subject, the more difficult the issues, the more help we need to try and get the right answer … interventions are enormously helpful”.
That is the testimony of a justice of the Supreme Court. As the noble and learned Lord, Lord Hope, pointed out, the noble and learned Baroness will not necessarily be deprived of such interventions in the Supreme Court, but I am sure that she was referring also to the value of interventions in lower courts.
Children and young people are disproportionately affected by the legal aid changes. They are often powerless to prevent the circumstances that give rise to the legal problems for which they seek resolution, such as homelessness, and they certainly cannot assert their rights without the help of a lawyer. They are either forced to fend for themselves as litigants in person without the skills to do so, have their problems inappropriately channelled to overstretched and inadequate complaints procedures, or have them go unresolved altogether.
The effect of the proposals about which we are talking today will be to inhibit legitimate challenge, limit judicial discretion to act in the public interest and shield public agencies from effective scrutiny. Despite what the Minister said earlier, it is difficult to escape the feeling that these provisions curtailing the scope of judicial review are animated by a belief that applications for judicial review are somehow vexatious. However, consider the sort of cases that we are talking about—cases where highly vulnerable children and young people seek protection from abuse and exploitation. Those affected include homeless children and young people; children who have been sexually exploited or abused—how salient is that today?—trafficked children; those with mental health problems and learning difficulties; children in care, care leavers and children affected by care proceedings; and young refugees and asylum seekers. The changes we are considering will inevitably have a chilling effect on charities and other organisations that seek to protect children’s rights through court action in the sort of cases I have mentioned. I urge noble Lords to support the amendments, which would negate these provisions, Clause 73 specifically.
Lord Lester of Herne Hill
My Lords, I wish to make a couple of points in addition in support of the amendment. My personal experience in cases has been that third-party interveners in judicial review proceedings perform a vital task in enabling the judicial review court, if it so wishes, to open its windows on to a wider range of considerations. We are not dealing with a dispute between two civil parties. We are dealing, as has been said, with judicial review designed in the public interest to resolve questions of public law. One such case has been implicitly referred to by the noble Lord, Lord Pannick—the case in which the High Commissioner for Refugees intervened in a difficult point about the proper construction of the refugee convention read with our other provisions. The court found it extremely valuable and it enabled the court, led by Lord Bingham, to give an authoritative ruling on what were novel issues about the refugee convention.
Another case was from Northern Ireland. One of the strange things about the Bill, which I hope the Minister will deal with in his reply, is that this provision does not apply to Northern Ireland or Scotland. The Northern Ireland Human Rights Commission had to struggle for some years to have a right of audience at all and to be able to make third-party interventions. Members of the House will remember that a couple of years ago, the Attorney-General for Northern Ireland wanted to commit Peter Hain for scandalising the judiciary by daring in his memoirs to criticise the Northern Ireland High Court judge. The Attorney-General applied to commit for contempt. I was instructed by the Northern Ireland Human Rights Commission to make a third-party intervention. I like to think that the result of that written submission is what caused the Attorney-General to drop the whole idea, as he did.
Unless I am completely wrong, we are now in the curious position that the Northern Ireland Human Rights Commission will be able, with its very limited budget, to be a third-party intervener without this costs effect, whereas the Equality and Human Rights Commission, for example, with its limited budget, will not be in the same position. That seems arbitrary and it will make it harder for our senior judiciary to be helped by third parties, which is the whole object of the third-party intervention.
Another example from the distant past concerned privacy in relation to the disclosure of patients’ medical information in the Court of Appeal. I seem to remember that a third-party intervention in that case was absolutely crucial. It is vital that small NGOs and ordinary citizens who have something to contribute, if the court decides that it wants to hear from them or read their written submissions, should be able to do so without the threat of costs orders being made against them.
Baroness Campbell of Surbiton (CB)
My Lords, I wish to add my support for the amendments proposed by my noble friend Lord Pannick. This provision will, indeed, deter interventions from organisations with limited resources—organisations, as my noble friend Lord Low suggested, that are likely to have the best and most pertinent expertise about the more vulnerable sectors of our society: children, disabled people, elderly people. Judges have publicly recognised the value of specialist knowledge in helping them to make informed decisions, as demonstrated by my examples in Committee. I had the privilege to be involved in interventions in two landmark cases where my organisation and individual knowledge could contribute to the outcome, which everybody heralded as a great success. I know that the Government’s reforms would have deterred me and my organisation from intervening. I believe that cases will be very poor for that.
It is critical that intervention remains readily available and that we do not deter weak charities and individuals who are quite sceptical about getting involved at all. Let us face it, intervening in a High Court case is a scary prospect. I know because I remember I was terrified. Therefore, I believe that these provisions will have a devastating effect, particularly on the community that I know best, disabled people—the very people who need the most support, protection and expert advice, coming from maybe some of the people who know them best and who have themselves experienced what they might have been going through or might go through. Clause 73 cannot be allowed to stand because there will be no interventions of such knowledge and value—interventions that have literally changed the lives of some disabled individuals and interventions that will change the lives of those who come before the courts in the future.
Lord Faulks
My Lords, I am grateful to all noble Lords who have taken part in the debate on interveners. The position is that any person may apply to the court to give evidence or make representations in judicial review proceedings. However, we think it is right that people who intervene in judicial reviews should have a fairer financial stake in the case and do so in a way that does not cause the true parties to the judicial review additional costs.
Clause 73 aims to strengthen the costs rules in relation to third parties who voluntarily apply to join in judicial review cases as interveners. It does this by establishing two presumptions: first, that the court will order an intervener to pay their own costs—that is normally the position now; secondly, that it will order an intervener to pay the reasonable costs that they cause a party to the judicial review to incur by their intervention. However, neither would apply where, in the view of the court, there are exceptional circumstances making it appropriate for that presumption to be rebutted. Neither presumption will apply when the court invites an intervention—and courts do quite often invite interventions. The clause will not affect the judge’s ability to invite whichever interventions, from whichever interveners, he or she sees fit.
The clause has been subject to significant debate and, as I said at Second Reading and in Committee in this place, and as my honourable friend Shailesh Vara said in the other place, the Government wanted to look again at how best to ensure that interveners consider carefully the costs implications of intervening, while not deterring appropriate interventions in appropriate cases, and, as a result, whether any changes to the clause were required. We have taken into account the views expressed in this House and the other place. The Government have listened to the concerns raised in Parliament and by stakeholders but consider that the current clause is right and are not persuaded that amendment is needed. The Government have considered and discussed the clause in some detail. I know that my ministerial colleagues have also discussed it with fellow Peers. I regret to say that we have been unable to agree an alternative formulation. The Government recognise that interveners can add value to a case and we do not want to stop that. However, interventions should be made in the right cases after careful consideration beforehand. That means that interveners should have a fair financial stake in the case.
Lord Deben
My Lords, I am grateful to my noble friend for giving way. I am listening very carefully. The tiny bit that I do not understand is why the judge should not have discretion to decide whether the case merits payment of costs or not. The discretion is very bound, because he has to maintain that these are exceptional circumstances. I find that difficult. Why cannot he be given the right to say, “In this case, they ought to pay because they have been in one way or another negligent”, or have overcharged, and in another case that they should not? Why cannot we leave it to the judge? It is his court and he should make the decision.
Lord Faulks
My Lords, of course that is the burden of the argument in favour of the amendment, and that is the current situation. The clause is intended to place a higher burden—we accept that it is a higher burden—on interveners to think carefully about the intervention that they intend to make as to whether it is truly worth while.
Before my noble friend’s intervention, I was stressing that the judge has discretion over both aspects: causation and quantum. The intervention may have caused only a degree of additional costs, rather than the entire costs of the action, which will modify the intervener’s exposure to costs. That will be a matter for the discretion of the judge. Of course, it is ultimately up to the judge to decide what are exceptional cases. Judges have different views as to what constitutes an exceptional case, but ultimately it is for the judge. It is very rare, if at all, that one sees appeals on questions of costs having any success. Amendment 164 would remove both presumptions that the clause creates, replacing it with a general discretion, which my noble friend would like, for the court to award costs either for the intervener against a party or to require the intervener to pay the parties’ costs. That is the status quo.
Clause 73 has been criticised for being too broad and meaning that interveners could be expected to pay costs in any circumstances. Critics have said that that means that an intervener would not be able to intervene in important cases and provide assistance to the court, as the risk of adverse costs is too unclear and potentially too great. Under Clause 73, what amounts to exceptional circumstances will ultimately be set out in court rules. That will provide clarity for an intervener at the point where they are considering whether to intervene on the manner in which they should carry out their intervention or risk costs.
Clause 73 does not mean that in every case where an intervener is involved they will be forced to pay all the costs of all of the parties, but it is right that they have a fairer financial stake. All those with experience will confirm that, just as interveners can add value, they can delay and hinder and make arguments that simply amplify or repeat—
Lord Lester of Herne Hill
I am grateful to the Minister, and I apologise for intervening at this late stage, but I do not understand from his reply how he can cite cost saving as a justification for giving detailed instructions to the courts about matters that are well within their discretion. Nor do I understand why a different rule should apply to the Supreme Court from that applied in others or in Northern Ireland from that applied in England and Wales.
Lord Faulks
I think that I have answered my noble friend’s point on the difference between the Supreme Court and the courts at a lower level. On costs, as I said, with this clause we hope to deter inappropriate interventions and also to make interveners think about the scale of their intervention so as to reduce the costs for all parties, whether applicants or respondents, and to ensure that those interventions are relevant and genuinely assist the court.
These clauses apply to judicial review in England and Wales. Scotland and Northern Ireland have separate legal jurisdiction on this question because it is devolved, but of course if they intervene in a court in England and Wales that would be a different matter.
Interveners can also, as I think is accepted, make arguments that go beyond what is necessary. The changes that Clause 73 introduces reflect the Government’s intention of ensuring that they do so in an appropriate manner. We submit that the overall effect of the clause, while not drastic, will reduce the number of cases—and the noble Lord, Lord Pannick, says that there are very many cases where interventions take place—in which the taxpayer is expected to shoulder the burden.
That is what Clause 73 does and why the Government, having considered the issues, are of the view that the provision represents a sensible, workable and balanced position that takes proper account of the role of the judiciary, which will remain at the centre of this issue. Therefore, having provided an explanation of the Government’s thinking, I ask the noble Lord to withdraw the amendment, and I commend Clause 73 to the House.
Lord Pannick
I am grateful to the Minister and to all noble Lords who have spoken. This short debate has, I think, illuminated and emphasised just how bizarre Clause 73 is, because there is no dispute that interventions by third parties at all levels of judicial review assist the court by the provision of information. That is simply not in dispute.
There is also no dispute that interventions by third parties are already under the control of the court. They are under the control of the court as to whether they are allowed, on what grounds, and with what consequences on costs, having regard to the issues in the case. It is true, as the Minister says, that there have been more interventions in recent years, but that is only because courts find them helpful and have allowed third parties to intervene. If interveners act inappropriately —and I am not aware of any cases where this has occurred, with the exception of one possible case in the Appellate Committee, which, as it is now the Supreme Court, would not be covered by this provision in any event—the judge has ample power, at present, to order the payment of costs. That point was correctly made by the noble Lord, Lord Deben, who also rightly referred to the limited scope of the exceptional circumstances provision. The problem is that there is nothing exceptional about interveners assisting the court. That is what they normally do.
When an expert body is deciding whether to intervene and assist the court, it will know, if Clause 73 is enacted in its present form, that there is a strong presumption that it must pay the costs. The inevitable consequence is that it is unlikely to intervene. This will not achieve the Minister’s policy aim of, as he said, deterring inappropriate interventions; it will deter interventions, however helpful they may be to the court.
Clause 73 makes no sense whatever. It makes no sense, with great respect, to speak of a need to make interveners have a financial stake in the proceedings. The court has ample power to penalise them in costs. Amendment 164 will maintain judicial discretion in Clause 73, just as your Lordships have decided that judicial discretion should remain in Clauses 70, 71 and 72. I wish to test the opinion of the House.
Lord Ashton of Hyde (Con)
My Lords, in moving that further consideration on Report be now adjourned, and before those who are participating in the Bill depart from the Chamber, it may be helpful to confirm expectations of timings for the next items of business. The Leader of the House will shortly repeat a Statement on the EU Council. The dinner break business, in the name of the noble Lord, Lord Hunt of Kings Heath, will follow immediately after. I would urge noble Lords to monitor the business, as that for the dinner break is not time-limited. The Report stage of the Criminal Justice and Courts Bill will therefore start immediately after the conclusion of the dinner break business at, very approximately, 8 pm.
Consideration on Report adjourned.
EU Council
(10 years, 1 month ago)
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The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:
“Mr Speaker, yesterday British forces concluded their combat mission in Afghanistan. I know that the thoughts of the whole House will be with the friends and families of every one of the 453 British soldiers who lost their lives in this long campaign. We will never forget their sacrifice for us. When al-Qaeda attacked the twin towers in 2001 it planned that attack from Afghanistan, operating freely under the Taliban regime. Our incredible service men and women have driven al-Qaeda out and they have built up and trained the Afghan forces, none of which even existed in 2001, so that the Afghans can take control of their own security. I said when I became Prime Minister that I would bring our combat troops home. Today, they are coming home and we should be incredibly proud of all that they have done to keep our country safe.
With permission, I would like to make a Statement on last week’s European Council. Before turning to the issue of our contributions to the EU, let me first update the House on three significant agreements where the UK played an important role: on Ebola, on climate change and on the situation in Ukraine.
First, on Ebola, the world is facing one of the worst public health emergencies in a generation. Playing our part in halting the rise of this terrible disease is not just about meeting our moral obligations; it is also the single most effective way of preventing Ebola infecting people here in the United Kingdom. That is why Britain has been making such a major contribution to the international response, pledging more than £205 million, and sending troops and health workers to West Africa. However, it also means that Britain must use its influence to get other countries to step up their contributions, too.
Before the Council I wrote to all my fellow leaders, urging that we significantly step up our collective response. At the meeting, member states agreed to my proposal to more than double the EU effort by pledging more than €1 billion in assistance. The Council also agreed to increase the deployment of medical and support staff in the region and for member states to guarantee proper care for our courageous health workers.
Secondly, it is vital that Europe plays its part if we are to secure a global deal on climate change in Paris next year. One of the problems we have faced in the past is that instead of just setting a binding target on carbon emissions, the EU has set binding national targets on things such as renewables and energy efficiency. These diktats over how each country should reach its commitments can pile up costs on our industries, consumers and families who do not want to pay any more on their energy bills than they have to. They also create an unnecessary trade-off between cutting carbon emissions and promoting economic growth. At this Council, we have chosen a different path. We have reached a landmark commitment to deliver at least 40% reductions in greenhouse gases by 2030. We rejected any new binding national targets for renewables or energy efficiency, giving us full flexibility over how we reduce our carbon, allowing us to do so at the lowest possible costs for consumers and businesses. This is another example of where British leadership has helped the EU to step up and meet its international obligations, while at the same time protecting our national interest by keeping energy bills down for businesses and Britain’s hard-working families.
The Council also discussed the situation in Ukraine and relations with Russia. We welcomed the Minsk agreement between Kiev, Moscow and the separatists. However, the Council was also clear that much more must be done to implement that agreement before the EU should consider lifting any of the sanctions put in place in response to the conflict and in response to Russia’s actions. The Council welcomed the parliamentary elections that took place in Ukraine yesterday. It made clear that it would not recognise the outcome of any elections organised by the separatists outside the framework of Ukrainian law.
Let me turn to the issue over the UK’s contributions to the EU. I want to be clear with the House how the demand for the UK to repay money has come about and why the scale and timing of this demand is unacceptable. In an organisation like the EU, if your economy grows a little faster or a little slower, then there can be adjustments every year to the amount you pay. In some years the UK adjustment has been negative, as it was in 2008, 2009, 2011 and 2012. In some years we contribute a little bit more. This happens every year. When the UK is growing at 3% a year, and many European economies are growing much more slowly, it would not be surprising to find Britain being asked to pay a little bit more this year. What has never happened is for €2 billion to be demanded. This represents around 20% of our net contribution to the EU last year. Member states collectively are being asked to pay almost four times the highest gross figure requested in recent years.
It is simply not acceptable for the EU to make these kinds of demands, and to do so through a fast-tracked process lasting barely a month. Two billion euros is bigger than many countries’ entire gross contributions. It cannot just be nodded through by the EU bureaucracy as some kind of technical adjustment. It is British taxpayers’ money and it is not small change—it is a vast sum. So this has to be examined in detail and discussed properly. That is why I interrupted the Council meeting on Friday to seek an urgent resolution to this issue. I was supported by the Prime Ministers of Italy, Holland, Malta, Greece, and others. The Council agreed that there would be an urgent discussion with Finance Ministers to resolve this issue going forwards.
It is not just about the scale of the money being demanded; it is also the timetable. The Commission admits that it does not actually need this—indeed, the President of the Commission was not even aware of it on Thursday evening. So there is no pressing need for the money to be paid. There are fundamental questions over the fairness of these payments. For example, the proposal is for funds to be taken from the UK to correct historic contributions to the EU budget dating back to 2002 and to be redistributed based on the current share of gross national income to countries which only joined the EU in 2004 and 2007. It is not just Britain that would lose out. It is perverse that a country such as Greece, at the heart of the crisis in the eurozone, is being asked to find money to pay back to countries like Germany. The revised gross national income statistics on which these adjustments are based are also not yet finalised. The numbers are a ‘provisional estimate’ and the EU-wide process to quality-assure the figures will not conclude until well into 2015. So Britain will not be paying €2 billion to anyone on 1 December, and we reject this scale of payment. We will be challenging this in every way possible. We want to check on the way that the statistics were arrived at and the methodology that was used. We will crawl through this in exhaustive detail.
The events at last week’s Council will not—to use some British understatement—have enhanced the reputation of the European Union in the United Kingdom. As the Italian Prime Minister put it, ‘Even the EU’s founding fathers would turn to Euroscepticism when faced with some of the things that you’ve seen see here’. The European Union has to change. It has to regain trust. That starts by understanding and respecting the fact that these payments and adjustments are about the hard-earned taxes of its citizens. This is just one of the many challenges in our long campaign to reform the European Union. It is vital that we stick to the task. We have already cut the EU budget, got Britain out of the bail-out schemes, vetoed a treaty that was not in our national interest, made vital progress on cutting red tape and completing the single market, and we are leading the push for what will be the biggest bilateral trade deal in history, between the EU and the US.
None of this is easy. Progress is hard-won. It requires perseverance and hard work. We will carry on defending our national interest and fighting with all we have to reform the EU over the coming years. At the end of 2017, it will not be the Brussels bureaucracy or the politicians of any party who will decide whether we remain in the European Union or not. If I am Prime Minister, it will be the British people who make that decision through an in/out referendum. Others who aspire to this office and who refuse to give the British people their say should explain themselves to this House and the country. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Royall of Blaisdon (Lab)
My Lords, I am grateful to the noble Baroness, the Leader of the House, for repeating the Statement given by the Prime Minister in the other place.
Let me begin by echoing the words of the Prime Minister about the contribution of our Armed Forces in Afghanistan. On these Benches, as in the rest of the House, our thoughts are with those who have served our country and the families of those who have lost their lives. Britain’s commitment to Afghanistan will continue beyond the handover of Camp Bastion. We must continue to support the Afghan Government through both political and humanitarian aid as well as in our training mission. Every one of our troops who served in Afghanistan can take pride in both their mission and in what they achieved, and our whole country is proud of them. I also echo the Prime Minister’s words about Ukraine and support for its Government.
On climate change, we welcome the climate and energy package, paving the way for the global UN summit in Paris next year. What action will the Government be taking in the coming months to encourage other countries, particularly China and the US, to agree a more ambitious target, sending a clear leadership signal to all countries in advance of the summit next year? Specifically, why was the energy-saving goal watered down from the Commission’s recommendation of 30%? All opportunities must now be taken to strengthen these elements of the package over the coming months.
I turn briefly to the Ebola crisis in west Africa. The whole world has been horrified by the devastating scenes in West Africa, and our hearts go out to the communities that are confronting this threat on a daily basis. We welcome the UK’s efforts to help affected countries. We are proud of the work of our Armed Forces, our health professionals and our aid community. I welcome the fact that the Statement said that member states agreed to increase the deployment of medical and support staff in the region.
I turn to the EU budget change. The Commission’s handling of this matter has been cack-handed and unacceptable and, as the noble Baroness said, has caused consternation in a number of other member states. The urgent priority now is for the Government to pursue all diplomatic means to get the best deal for Britain. We are bound to wonder if they have done due diligence in their handling of what one might term a fiasco. The Prime Minister says that he was made aware of this matter only on 23 October, and the Chancellor said that he had no warning. However, that is simply not the case. These changes to the budget arise from changes to estimates of gross national income, or GNI. Can the noble Baroness confirm that the Office for National Statistics agreed to, and has been part of, the substantial and planned changes to GNI across Europe for the past two years, since 2012? Can she further confirm that the ONS stated publicly in May 2014 that these changes would impact on our budget contribution? It said in its press release:
“GNI … is used in the calculation of a Member State’s contribution to the EU budget”.
Clearly, the Treasury was aware of this. My right honourable friend the leader of the Opposition quoted in another place from a letter from the then Economic Secretary to the Treasury, the right honourable Member for Loughborough, who wrote to the parliamentary committee on Europe a full seven months ago on 11 March. In her letter she said that changes to GNI were going to take place in time for 2014, and wrote about the high priority that the Government were giving to addressing them.
So these changes were planned for a number of years, the ONS publicly declared that they would impact on our budget contribution, and Ministers knew about them and claimed that they were a high priority. Are there any further budgetary adjustments coming down the line that will affect any amounts due or owing—adjustments that are currently not in the public domain? I think that we deserve to know.
It is hard to see how the Prime Minister can maintain his assertion that there was no warning and that Treasury Ministers knew nothing about these changes. Surely the Treasury must have made its own estimates of the impact on the EU budget that would follow. The reason why this matters is that in our view the Prime Minister could have done much earlier what he did at the last minute on Friday when he called for a meeting of Finance Ministers and entered negotiations about this demand. I think we would all be interested to know how he plans to go ahead and sort out this fine mess.
It is clear that the Prime Minister spends all his time negotiating with his party about Europe, when what he should be doing is negotiating with our partners in the rest of Europe about a reformed Europe and getting a better deal for the British people in the European Union. It is the British people who are paying the cost for the Prime Minister’s focus on his party rather than working in the best interests of the country.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Baroness, Lady Royall, for her comments in response to mine on Afghanistan and Ukraine.
In starting my response to the points that she has made, it is important for me to make it clear that the Prime Minister played a leading role in Brussels last week on climate change and Ebola, two very important matters on the agenda at the Council meeting. He achieved very good results that were good for Europe and for the United Kingdom; they felt right and they felt fair. This is in stark contrast to the way in which the previous Government approached some of the negotiations on matters such as climate change in the past. The same cannot be said, though, in terms of it being right or fair, when we consider what happened on the EU budget surcharge.
Taking the questions that the noble Baroness put to me, and starting with climate change, the target of at least a 40% reduction in carbon emissions has been described as ambitious, but it is a very sensible one. The way that we are approaching this, in not having the subtargets as binding agreements on member states, is very important. However, we are now in the best possible position to push our international partners, such as America and China, to bring forward ambitious climate pledges to reach a global deal next year.
On Ebola, the noble Baroness was right to say that the Prime Minister succeeded in ensuring that we attracted a financial commitment from member states, so Europe as a whole now will be contributing €1 billion to fighting Ebola. However, it is not just about the money; we also got a commitment that other European member states will help with their healthcare workers and ensure that they travel to affected countries. This is something that we need to continue to apply pressure on and ensure that we all do our fair share in ensuring that Ebola is properly tackled out there in west Africa.
As far as the budget is concerned and the points that she made about the surcharge, I do not think that it is right to focus on who knew what and when. What people really care about is how much is being demanded and the fact that this amount is unprecedented in the level that is being sought by the EU. It is true to say that there is a process every year that is standard in calculating these contributions, but it has never led to the kind of demand that we have seen on this occasion. Importantly, with regard to the level that the UK is being asked to contribute, no member state will know what amount it is being required to contribute in terms of its net contribution until it is clear what amount the EU is going to return, having identified what the countries’ gross contributions are. It is the net contribution that is key in this context, and it is that net contribution that the Prime Minister has made clear is absolutely unacceptable. He has made it clear that the way in which the European Commission has behaved in going about this process is not right, and that is something that we will ensure is properly addressed in the way in which the Prime Minister has described today.
Lord Wallace of Saltaire (LD)
My Lords, we now have 20 minutes for questions on the Statement. I remind noble Lords that it is not a short debate. Noble Lords are asked to keep their questions short so as to enable others to follow.
Lord Hamilton of Epsom (Con)
My Lords, does my noble friend accept that it is quite acceptable for the EU to want to recalculate the basis for calculating gross national income? However, why does this tax have to become retrospective? Can she explain to us why this has to be a retrospective exercise? Why is it not just being taken forward from here, if we get the agreement of Ministers, with the tax applying in the future, not the past?
Baroness Stowell of Beeston
My noble friend has highlighted one of the issues that we have to explore in greater detail in the process of talks that will start in the emergency discussions between Finance Ministers later next week.
Lord Tomlinson (Lab)
My Lords, I think we can all agree that the figures that have been produced need to be pored over in the greatest detail and justified, if they are justifiable. However, we have all read in recent days and weeks about the domestic changes that we have made to the calculation of GNI. I ask the Minister —as the Government seem to have been quite coy about this—whether, in the recalculation of GNI, we have included two service industries that have not been included previously, one of which is the illegal drugs trade and the other prostitution. If that is the case, what was their contribution to the increase in GNI and are we in fact the victims of our own success in boasting about the growth of GNI?
Baroness Stowell of Beeston
There is a lot of talk going on at the moment and many suggestions are being made. People are trying to complicate yet further something that is already incredibly complex. As the Prime Minister has been emphatic in saying, this is a standard process that happens on an annual basis. The UK expects to play its part in this process in the way it has done in the past. What has not happened before, but has happened this time, is this kind of demand being made at this sort of level. We need to understand the detail before we can go any further forward on this matter.
Baroness Falkner of Margravine (LD)
My Lords, I associate myself with the Prime Minister’s remarks on the drawdown from Afghanistan in offering our deepest support for the 453 men and women who gave their lives in that cause. I also say to the Minister that we must not forget the many thousands who have been injured and maimed and who continue to live. We must remember our obligation to them as well.
On the EU budget contribution, does the Minister agree that since these reservations, voiced by Eurostat, go back to 2002—indeed, I understand that there were six reservations—they would have been known about by the Labour Government in all the years since 2002, and that the statistics that needed to be looked at have not come out of the blue for either side? Will she tell the House whether the emergency Finance Ministers’ meeting on 7 November will hold bilateral discussions with the other eight states that are similarly affected in order to build a consensus that this cannot go down the route which the Prime Minister is resisting and which they are trying to make him take? Will she also tell the House whether I am right to say that the amount sought is 0.01% of GNI?
Baroness Stowell of Beeston
My noble friend is right to remind the House that in the context of Afghanistan we must also remember those Armed Forces personnel who were very badly injured through their service on our behalf in that country. I am grateful to her for reminding us of that.
On her point about bilateral conversations on 7 November, I do not have the detail about the way in which the meeting and the conversations are going to be constructed that day. However, it is important for us to be clear that other member states are affected by this and that they feel as strongly as we do. The Italian Prime Minister has it made clear, as he said when he was talking about the demands put on some member states by the surcharge, that this is not a figure but a lethal weapon. On my noble friend’s specific point, I may have to write to her if I am not able to give her an answer during the course of answering the Statement.
Lord Kerr of Kinlochard (CB)
Will the Minister confirm that the GNP funding stream was invented here in London, was introduced 20 years ago and has worked extraordinarily well for this country in comparison to the old VAT-based stream? Will she also confirm that the reason the sums are large is that the refund to those who have overpaid is a multi-year refund, covering up to 20 years? Furthermore, will she confirm that for the United Kingdom to refuse to contribute to those who have overpaid would be illegal, unreasonable, unwise and unjust?
Baroness Stowell of Beeston
As I said in an earlier response, the Prime Minister is clear that this demand, and the scale of it, have come out of the blue without any proper preliminary discussions. We now have to consider it very carefully and in great detail, and that is what we are going to do.
Lord Pearson of Rannoch (UKIP)
My Lords, in all the hullabaloo about yet another £1.7 billion of our taxpayers’ money going down the drain in Brussels, I notice that the Statement fails to mention a brilliant new spending spree to which the Council agreed—a mere €300 billion over 2015 to 2017. However, the Council conclusions mention it on page 10, where it is referred to as the,
“Strategic Agenda for the Union in Times of Change”.
Can the Minister tell us what the UK’s share will be of this new €300 billion and when we will pay it? Presumably we are looking at about another €30 billion or so over the next two years. Can she also tell us whether the Prime Minister was a party to this further lunacy or whether he was outvoted?
Baroness Stowell of Beeston
The package to which the noble Lord refers is the new investment package that the new Commission is proposing for the eurozone. Clearly, if it is the eurozone, that does not include the United Kingdom.
Lord Howell of Guildford (Con)
My Lords, is not the real and deeper lesson of this whole budgetary saga that the European Union administration is struggling to cope with a 20th century, highly centralised EU model in 21st century conditions that are completely different and in which these heavily centralised provisions no longer operate or are even necessary? Are the Minister and the Prime Minister not right to focus on the need for fundamental reform, such as many people throughout Europe, as well as many Governments, are calling for, and on winning the allies to build up a course for a better European Union that will fit 21st century conditions?
Baroness Stowell of Beeston
My noble friend is absolutely right. That is what the Prime Minister is seeking to do and he is attracting a great deal of support from other member states in reforming the European Union, because it is clear that that is what needs to happen.
Lord Davies of Stamford (Lab)
My Lords, the Prime Minister is putting it about that there is nothing he could have said or done about this until he knew the full details, which happened only on Thursday, and the Minister has been trying to defend him on that basis. However, is that not complete and obvious nonsense? It has been known for many months that these negotiations were continuing between Eurostat and the ONS. Anybody half awake would have known that, even if the recorded growth discrepancies in any one year were fairly small, resolving the whole matter by a single payment could amount to paying a very considerable cash sum. All that the Chancellor and the Prime Minister had to do was simply to follow carefully, via the ONS, how the discussions were proceeding to see whether that danger was materialising. They monumentally failed to do that: they took their eyes completely off the ball and have no one but themselves to blame for the surprise that they found on Thursday and Friday.
Baroness Stowell of Beeston
I know that the noble Lord follows European matters quite closely but, from what he has just said, he is clearly not familiar with this process, which happens every year. Each country puts forward the calculations of its own measures and then the Commission has to look at each country’s submissions alongside one another. It then proposes what will be refunded in the light of that. No nation state will know the net payment until the last minute. That is why all of the nation states that were affected by this dramatic increase were as surprised as Mr Cameron.
Lord Hannay of Chiswick (CB)
Will the Minister not agree that it is sad that we should be welcoming, as I welcome, the three points on which the Council made great progress with British leadership—climate change, Ukraine and Ebola—but yet again we are caught up in one of these kerfuffles? Would the noble Baroness not accept that, frankly, to suggest that the Prime Minister only heard about this from the British Permanent Representative in the car on the morning of the meeting, when the matter had been notified by the Commission about 11 months ago and had been agreed with various emanations of the British Government in the summer, is not credible? There was a slip-up somewhere and the Prime Minister was not properly briefed; that is surely the truth of the matter.
Given the point of the noble Lord, Lord Kerr of Kinlochard, about the great benefit to this country of the switch from TVA to gross national income calculations from the time of the Edinburgh European Council in the 1990s onwards, would it not be helpful to the House if the noble Baroness were to let us have the Treasury calculation of just how much Britain has benefited over the years from having a GNI calculation? It is surely also important to recognise that the EU is not the only organisation that works in this way. The United Nations assessed contributions are based on GNI calculations; no doubt our GNI contribution will go up a bit as a result of the success of the Government’s policies. This is the normal way in which these organisations work. Should we not be a bit calmer about it?
Baroness Stowell of Beeston
I have tried to make it clear, both in the Prime Minister’s Statement that I have repeated and in the responses I have given to points made today, that the Prime Minister has been very active in taking a leading role in Europe, both on the specific agenda items that I have talked about and in saying that we believe, as do others, that the European Union needs to reform. The Prime Minister is absolutely clear that there are real benefits to this country from being in Europe and he has spoken loudly about those benefits.
However, the situation in which we find ourselves with the budget on this occasion cannot be as the noble Lord describes. Why are other European leaders also surprised to find themselves in receipt of a big bill, as the UK was last week? I will see whether there are any specific further data that I can share in response to the noble Lord’s point, but I say to him that people in this country see the benefit of Britain’s place in Europe. They see that it has an important place in achieving some important international objectives, whether about Ebola or climate change. However, those successes and important advances do not come at any price. The way in which the European Union sometimes behaves and operates means that it lets itself down in the eyes of the people who have to fund its membership.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend not agree that what the noble Lord, Lord Hannay, describes as a “kerfuffle” is about £1.7 billion? We have not got any money. We are borrowing money in order to pay our bills. Surely the point is that the European Union is spending too much. It simply cannot issue continuing demands as it has and argue that that fits some formula or other. Will my noble friend note that the Opposition have singularly failed to indicate whether they would pay this money or not? The truth is that they are a pushover as far as this is concerned. Is my right honourable friend the Prime Minister not right to try to get the European Union to put its house in order and live within its means, as everyone else has to do?
Baroness Stowell of Beeston
My noble friend is absolutely right on every point. I would add that we should remember that it is not clear for what purpose the European Union needs this extra money, and that this is an organisation whose accounts have been qualified for many years.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
The noble Lord was not here for the beginning of the Statement.
Baroness Royall of Blaisdon
My noble friend was not in the Chamber. It is not appropriate for him to speak.
Lord Dubs (Lab)
My Lords, I pursue the point of my noble friend Lord Tomlinson because I was a bit puzzled by the answer. To what extent has the increase in GNI been caused by estimates for drugs and prostitution? Is this the first time that we have done that, and how large were those figures? Above all, were they accurate? Are we not, in fact, making it difficult for ourselves by adding in such figures in such a way that we are then being hit on the head by Brussels?
Baroness Stowell of Beeston
The noble Lord is focusing on the wrong thing. What is vital is that we have been presented with a massive bill which is wholly unacceptable and have been given a wholly unacceptable timeframe in which to pay it.
Lord Lawson of Blaby (Con)
I think that the noble Lord has already had a go. Is it not the case that the agreement on climate change, happily, does not amount to a row of beans? The official conclusions say that,
“all Member States will participate in this effort, balancing considerations of fairness and solidarity”.
In other words, there is no target for any individual member state, and I commend the Government for having made it clear that energy policy is the responsibility of member states, not of the European Union as a whole, so it does not mean anything.
Is not the fundamental question of the contributions a problem? While the late Lady Thatcher succeeded in securing a substantial improvement in the net contribution which we paid, not only was that net improvement insufficient to do us justice but the previous Labour Government also gave a large part of it away in exchange for a promise of reform of the common agricultural policy, which has not happened. This is why the issue is so sensitive. We already pay more than our fair share into the European Union budget.
Baroness Stowell of Beeston
My noble friend is absolutely right to point out that the previous Government gave away our rebate, to the tune of £2 billion. That has really affected the demands that Europe makes on our budget.
On my noble friend’s point about climate change, I certainly disagree with his description of what has been agreed in Europe on emissions reduction targets of 40%, but I say to him and the House that the way in which we have reached that agreement is different from the way in which previous Governments did so. We have made sure that we are able to retain flexibility in this country and are able to deliver on these targets in a very cost-effective way.
Lord Soley (Lab)
Will the Minister accept that there are a number of people besides myself in this House who would like a clearer answer to the questions asked by the noble Lord, Lord Kerr, who has great experience and knowledge of these matters? I would be grateful if she could look at them in Hansard tomorrow and put answers of some type in the Library. They are important. I know that they are complex, and I am not necessarily saying that she ought to have the answers at her fingertips, but I would like to hear them.
Finally, as long as the Prime Minister keeps giving into and appeasing those in his party who want to take us out of Europe, sooner or later they will push him into a corner, where he will have to abandon that appeasement. Frankly, he needs to stand up and fight for whatever it is that he believes in.
Baroness Stowell of Beeston
On the question asked by the noble Lord, Lord Kerr, and reinforced by the noble Lord, Lord Hannay, as I have already said, I will see what it is possible for me to provide by way of a written answer. As to the noble Lord’s broader point, I restate that the Prime Minister is absolutely committed to securing good reforms in Europe. He is approaching this in a very constructive way because he wants to see a Europe that works properly for the people of Europe. That is what he will succeed in achieving. When he has done that he will hold a referendum in 2017 in which people will have the final say.
Care Quality Commission (Reviews and Performance Assessments) Regulations 2014
(10 years, 1 month ago)
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Lord Hunt of Kings Heath
That this House regrets that the Care Quality Commission (Reviews and Performance Assessments) Regulations 2014 include no provision for the regular assessment of performance by clinical commissioning groups and local authorities in the commissioning of health and social care and of the NHS Commissioning Board in relation to specialty commissioning (SI 2014/1788).
Lord Hunt of Kings Heath (Lab)
My Lords, the statutory instrument that we are debating tonight arises from an amendment that the Government sought parliamentary approval for during the passage of the Care Bill in 2013 and 2014. That amendment related to the scope of periodic performance assessments to be undertaken by the CQC and the method by which such reviews are to be devised and will allow an aggregate performance rating to summarise and compare the performance of organisations or the services provided. It is for the CQC to devise such quality standards and methodology in consultation with the Secretary of State and those key stakeholders that the CQC considers appropriate. The scope of those performance assessments is set out in these regulations, which by virtue of Regulation 1 will come into force on 1 October this year. That means that the CQC will be under a duty to undertake performance ratings of those registered service providers and regulated activities that such providers carry out, as prescribed by Regulation 2 and the schedule to these regulations.
I remain somewhat sceptical of the ability of the CQC to place such huge organisations as hospitals in one of only four categories. The Explanatory Note to the SI refers to work commissioned by the Secretary of State on the use of aggregate ratings of providers. This is not the first attempt at performance ratings, but the fascinating piece of work produced by the Nuffield Trust and commissioned by the department has a number of warnings on this. The trust says in its report:
“A rating by itself is unlikely to be useful in spotting lapses in the quality of care”,
particularly for services which “complex providers like hospitals” give.
“It is here that the analogy with Ofsted’s ratings of schools breaks down. Hospitals are large, with many departments and different activities, seeing large numbers of different people every day, carrying out complex activities, many 24/7, and in which people are sick and can die. Put another way, the risks managed by hospitals vastly outweigh those managed in schools. For social care providers the risks may be lower, but many are still dealing with frail, ill and otherwise vulnerable individuals”.
Its conclusion is that,
“unless there is a ‘health warning’ on a rating to clarify to the public what it can and cannot say about the quality of care, there is an inevitable risk that the rating (and the rating organisation) will be discredited, as lapses occur in providers scored as ‘good’ or ‘excellent’”.
It says that it will be just a matter of time. In summary the Nuffield Trust concluded that,
“the overall approach to ratings should allow complex organisations to be assessed at different levels and to promote service-specific ratings where possible, particularly in the case of hospitals”.
I would be grateful if the noble Earl could comment on this, particularly on how he considers the rating outcomes of individual providers are to be communicated to the public in an understandable way that none the less pays due regard to the complexity of the ratings so well described by the Nuffield Trust.
My real objective in bringing these regulations before your Lordships’ House is not so much what is in the statutory instrument as what is not. I go back to our debates during the passages of both the Care Bill and the Health and Social Care Bill in 2012. The noble Earl will know that I have expressed considerable concerns about the fact that the way in which clinical commissioning groups and local authorities commission services is no longer to be subject to regular review, audit and, indeed, rating by the CQC. During the passage of the Care Bill only a few months ago we discussed concerns about the quality of local authority commissioning of care services in the context of the scandal of 15-minute visits and zero-hours contracts. We argued then that the CQC should undertake regular inspections of local authority commissioning performance.
I suggest that the same goes for clinical commissioning groups in the National Health Service. When we debate NHS issues the noble Earl frequently—indeed, consistently —refers to the importance of commissioning. Whenever he is pressed on problems or gaps in services he has put his trust in more effective commissioning. However, it is very difficult to see how the performance of commissioners is properly assessed and held to account in the current structure. The noble Earl has previously argued that we should rely on such things as CCG outcome indicators, backed up by scrutiny from local Healthwatch. I think that that is a pretty weak response. So far there is scant evidence to show that this is effective. I am sure we would acknowledge that often when things go wrong in a health system it is a failure of the system—of course of the providers giving the services, but also of commissioners and, indeed, local authorities. Let us take the four-hour A&E target, which is proving to be a major challenge up and down the country. There will of course be issues in the organisation of the hospital itself, but there will also be issues around the organisation of primary care, the way in which services are commissioned and the ability of local authorities to ensure that there are specific and sufficient facilities in the community for when patients are discharged from hospital.
It is a matter of regret that the CQC, as the primary regulator on quality and standards, is no longer concerned on a regular basis with the performance of local authorities as commissioners, and with clinical commissioning groups. It is true that the CQC has the power to conduct special reviews where concerns have been raised about a particular commissioner. I do not know whether that has happened yet—maybe the noble Earl will be able to tell me—but it seems to me that that is not anywhere near sufficient.
I also want to discuss the position of NHS England. The noble Earl will know that, although the original changes brought about by Mr Lansley were designed to hand over nearly all the commissioning budget to clinical commissioning groups, a rather substantial amount of money was ultimately retained by NHS England for commissioning of specialist services. It would be fair to say that NHS England’s performance on that has given cause for concern. The noble Earl will be aware that the budget for specialist commissioning is hundreds of millions of pounds overspent. In essence, we had an out-of-control budget and the board of NHS England seemingly unaware of what was going on. If an NHS provider had performed so lamentably its board would have been sacked, and rightfully so. I ask the noble Earl how the board of NHS England has been held to account for its lamentable performance relating to specialist commissioning. Have sanctions been applied? At the very least, should the CQC not assess NHS England’s commissioning performance?
In our previous debate on NHS England, the noble Earl informed us:
“NHS England has its own governance processes in place, including the development of the direct commissioning assurance framework to demonstrate that it meets the standards required. As this is developed further, elements will be introduced to bring external scrutiny to its board and function”.
He also said:
“Ultimately, NHS England is held to account by the Department of Health for its commissioning activity against its delivery of the priorities set in the mandate”.—[Official Report, 21/10/13; col. 813.]
I am sure the noble Earl thought that they were comforting words, but how on earth does this apply to the debacle over specialised commissioning? To my knowledge, that has still not been properly resolved.
I am not convinced that the Government have the right approach to commissioning. If commissioning in the health service and in local government is as important as the Government say it is, surely it is in the public interest that the CQC should take a much stronger role in checking and rating the performance of commissioners, and indeed of health and care system performance generally. I hope that this leads to a good debate. I beg to move.
Baroness Wall of New Barnet (Lab)
My Lords, I support in principle the wording of the business that we are dealing with, particularly the emphasis on regular assessment of other than the provider trusts. I share with the House and the Minister why I now feel that that is even more important. I declare an interest as chairman of Milton Keynes Hospital NHS Foundation Trust. Just last week, we were inspected by the CQC. Obviously, we do not yet know the outcome of that. The CQC was with us for four days and there were 40-odd people there.
As the noble Earl is aware, I have been very supportive of the CQC and share his aspirations for it. To be honest, our inspection was extremely thorough. We have to wait with bated breath for the outcome, but the enthusiasm, what was described as the buzz around the hospital and the way that people felt strongly about the services that they were giving made a huge difference to the whole thing. I am only three months into that trust, but this was not about preparing for the CQC; it was about the culture of the organisation and wanting to improve. I hope that the CQC comes back with recognition of that, whatever the outcome might be.
The inspection was carried out under the new way of doing things, which I think is great. There were many more people across all the spectrums of our services, at a professional and clinical level. That was superb. The reporting back every night was very good and helpful to the chairman and chief executive. All that felt good and thorough, which is what it is all about. I agree with my noble friend’s view about extending that for the very reason that he just gave. The importance of that inspection to the outcome for our patients was absolutely paramount, regardless of what the outcome might be in terms of the grading or level of assessment we might be given. But without that thoroughness and rigour, particularly with the CCGs, who are the ones making decisions about our services, with the GPs who run them—unless there is a deep dive, as we would call it, into any other part of the health service—the gaps that are still a worry for us may remain.
In particular, my noble friend Lord Hunt said that there was an issue around local authorities. All trusts are struggling terribly with A&E. There are many reasons for that, as my noble friend has said. But one of the big reasons is the lack of rigour in social care and local authorities’ commitment to or understanding of the role that they play. From the experience that we have had over the past week, I believe that this is not a threat to people: it is empowering for them to have the CQC in there, ensuring that the rigour that they are supposed to apply to their work is there and that the role they play in patients’ experience really makes a difference. I urge the noble Earl to consider this opportunity yet again. We made a decision in the Care Act, which I think even more now is really a mistake from which we need to move on. I do not share the cynicism of my noble friend, but I share the concern about whether the CQC can embrace all that.
The investigation into my trust was supported, as I understand it, by far more clinicians than ever before and far more people had a much greater knowledge of the health service. If the CQC can continue to develop in that way, I believe it is in its interest—and, more importantly, in our patients’ interests—that those commissioning groups go wider and deeper into other than the provider trusts.
Baroness Barker (LD)
My Lords, I spent a happy weekend making a start on the 500 pages of regulations that have been issued under the Care Act. What can I tell noble Lords? I am living for pleasure alone. I regard this Motion as the first of many to come our way.
I thank the noble Lord, Lord Hunt, for the opportunity to go back to some of the discussions that we had during the passage of the Bill, particularly on commissioning. We had long debates about commissioning and the extent to which it did or did not impact on services. We also talked at considerable length about the differences between the commissioning of healthcare in the NHS and commissioning in social care. In these regulations, we are beginning to see some attempt to have proportionate and slightly different attitudes towards commissioning in both those settings. I would like to see us taking a more proportionate look at commissioning across the board. To a certain extent, these are the first of the regulations that begin to do that.
We also had extensive discussion about whether performance ratings should be specific to particular services within hospitals or whether they should go across the piece. My recollection, informed quite often by people with valuable experience such as the noble Baroness, Lady Wall, was that there would be a lot of data generated in hospitals, particularly clinical governance data, which would be there to inform one’s opinion about a particular service in a hospital. However, what would have been missed, and what was missed so spectacularly in Mid-Staffordshire, was the across-the-board bad management practices throughout a hospital that undermined patient care. That was why we ultimately took the decisions that we did about the nature of performance review.
I want to pick up two particular issues that are brought to the fore by these regulations. I notice that prison healthcare has been exempted. I understand that there is a sense in which the NHS or the CQC would be able to look at the performance of only a part of prison healthcare. But prison healthcare is, in terms of mental health, addiction services and so forth, becoming much more important. There is a much clearer focus on the amount of ill health that people have within the criminal justice system. I want to be sure that we are not enabling those prison health services to escape proper scrutiny.
My final question to the noble Earl is more fundamental. We had extensive debates during the passage of the Care Bill about the right of entry for those people who are involved in carrying out performance reviews and the extent to which the people responsible for them should be able to go into any service to assure themselves that those services are safe and the people within them are not being abused. I do not see anything in these regulations that gives comfort to those of us who believe we took the wrong decision during the passage of the Bill and that, as a consequence of our failure, there may well be people in health and social care settings who are being abused at worst or ill treated at best.
Baroness Wall of New Barnet
I thank the noble Baroness for giving way. In response to her comments on nurses and hospitals, she is absolutely right. I emphasised the clinical stuff. However, the CQC interviewed everyone on our board: the non-executive directors, me—as chairman—for an hour and a half, and all our executive directors. It interviewed not just the clinical staff but the whole of the trust to make sure that we all understood what we were doing in the job we are employed to do.
Baroness Barker
I thank the noble Baroness for that. I trust that if the CQC was doing its job, it would really go to the seat of power in a hospital and interview the porters.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, this has been a useful debate. Although the Motion to Regret moved by the noble Lord, Lord Hunt, relates to regulations which, as he said, cover a certain area of the CQC’s activities, I note his broader questions and will come to those.
These regulations set out which health and adult social care providers will be rated following inspection by the Care Quality Commission. They came into force at the beginning of this month. However, it is clear that the noble Lord’s main concern is not so much about the regulations, although he did query aspects of them and I will address those in a second. I think—or, at least, I hope—that there is a good deal of agreement between us about the way in which the CQC now approaches its task of assessing service providers. The noble Lord’s concern lies largely around the accountability arrangements for commissioning. I will begin by setting out the purpose of the regulations and summarise the considerable progress that the CQC has made in inspecting and rating service providers.
Noble Lords will recall that the Care Act put in place a new system of reviews and performance assessments of providers to be developed by the CQC. The regulations referred to in the Motion specify which providers will be rated by it. They cover NHS hospital trusts and foundation trusts, general practices, independent hospitals and providers of adult social care. The CQC has set out its approach to inspection and ratings in a series of handbooks for each regulated sector. Each service is judged against a number of key questions: is it safe; is it caring; is it effective; is it responsive; and is it well-led? The CQC produces a rating against each of these areas at both location and provider level.
This new system is providing information about the quality of care that goes beyond mere compliance with minimum standards. This information is of value to patients and service users, to commissioners and, of course, to the providers themselves. The noble Lord, Lord Hunt, referred to the comments of the Nuffield Trust around hospital ratings and questioned how such ratings could be communicated to the public in an understandable way. We have committed the CQC to publishing clear, authoritative ratings of providers. Not only are these ratings broken down into the five key questions about services that I have just referred to, but the CQC has also published, where it has been possible, ratings of specific hospital services. The CQC is under an obligation to consult on the development of its ratings methodology. It has done so, and will continue to do so as its methodology grows more sophisticated over time. I completely take the point that ratings must be robust and stand up to scrutiny, but the CQC’s view is that it is more than possible to construct indicators that are genuinely representative of an organisation’s performance.
The CQC has made rapid progress on developing and implementing the ratings system. It has already published more than 130 ratings of NHS providers, and has recently published the first ratings of adult social care providers. Over the next few years, it will inspect and rate every provider that is covered by the regulations. Noble Lords will recall the debate we had last year on whether the CQC should also carry out routine inspections of commissioners. The CQC’s primary purpose is to regulate service providers and the Care Act clarified this by removing its power to carry out periodic reviews of commissioners of both health and adult social care.
Some providers argued that the system we were putting in place left them solely accountable for failings in care that could have some of their roots in commissioning decisions. I listened carefully to the comments of the noble Baroness, Lady Wall, and the noble Lord, Lord Hunt. I accept that there is a link between commissioning and quality of care and that, in some instances, it would be appropriate for the CQC to review commissioners. We have therefore maintained a power for the CQC to carry out special reviews of commissioners under Section 48 of the Health and Social Care Act 2008. However, this will be used only where there is clear evidence that failings in commissioning are leading to poor care for patients and service users and it is subject to the approval of the relevant Secretary of State. Let me be clear: where it is justified by the circumstances, the CQC will be able to inspect commissioning.
Although the CQC is not routinely reviewing commissioning, there are other arrangements for the oversight of commissioners. The noble Lord, Lord Hunt, asked me whether any special inspections of commissioners had happened yet. The answer to that is no in relation to local authorities’ commissioning of adult social care, but the CQC is undertaking a special review of children’s safeguarding in Doncaster. I understand that this review will look at both the provision of services and their commissioning by the local NHS. The review is due to be published in the coming months.
For adult social care, the Care Act puts in place clear duties on local authorities to have regard to the importance of ensuring the sustainability of the market as a whole in order to meet the care needs of local people. Last week, my department published statutory guidance for local authorities as part of a package of secondary legislation which implements the Care Act. This includes a chapter on commissioning and market shaping. Furthermore, the Local Government Association and the Association of Directors of Adult Social Services will shortly publish a set of new standards for commissioning services that has been produced with stakeholders. These standards will provide clarity on what good quality commissioning looks like. They will build on best practice and encourage councils to conduct more thorough self-audit and peer review in order to move towards excellence, covering, for example, commissioning for outcomes, integrated commissioning and workforce issues.
Where local authorities struggle to meet these commissioning standards, they are able to seek support through a system of sector-led improvement. Where a need has been identified, a variety of improvement support can be offered. This may include advice and visits from peers in high performing local authorities; mentoring and leadership training for councillors and officers; and bespoke support from national experts. This approach has been developed in partnership with local government partners in order to improve local authorities’ performance and capabilities. It supports local authorities to take responsibility for their own performance and drive improvement, developing a system of performance management by councils for councils. Sector-led improvement is based on the principles that councils are primarily accountable to their local communities; they are responsible for their own performance and improvement; and they have a collective responsibility for the performance of the sector as a whole.
Turning to commissioning of NHS services, NHS England is responsible for the performance management of clinical commissioning groups and has a statutory duty to carry out an annual performance assessment of each CCG. NHS England must be assured that commissioners are acting efficiently and effectively on behalf of local patients. Using the principles set out in the CCG assurance framework, NHS England supports and challenges CCGs to meet the needs of their local population. The assurance process is informed by robust and diverse sources of evidence, including the CCG outcomes indicator set and a detailed delivery dashboard.
Where concerns are identified, improvement actions are agreed. NHS England has broad powers to ensure that these improvements are made, whether this is through the provision of support and advice or by taking action when a CCG is at significant risk of failure. Examples of the support that can be made available are advice and expertise, facilitating peer review and partnership with other CCGs, or the brokering of conversations between CCG and providers by the area team.
The CCG assurance process has so far worked well. NHS England’s year-end CCG assurance assessment for the year 2013-14 showed that 210 out of 211 CCGs were assured, with 132 receiving some support to improve in particular domains of the assurance framework. An NHS England-commissioned survey of stakeholders, including local health and well-being boards, Healthwatch and patient groups, found that 68% had confidence in CCGs to commission high quality services.
The approach taken in this first year rightly focused on developing the capacity and capability of CCGs, as relatively young organisations, building on the domains which were the foundation of CCG authorisation. This focus on developing the organisational health of CCGs has meant that, as of July 2014, only 13 CCGs still have conditions or directions remaining in relation to their authorisation, compared with 153 CCGs initially authorised with conditions. In one case, a CCG was not assured and NHS England has put legal directions in place to improve its performance. As intervention is the element of the assurance framework which most affects CCG autonomy, careful consideration is, of course, required before NHS England will take this course of action.
Assurance ratings are based on the area team’s assessment of the level of the CCG’s insight of the identified issues and its willingness to take the necessary steps to improve. In cases where serious concerns arise, NHS England has shown that it will take necessary and appropriate intervention action. These legal interventions can take many forms, such as directing the CCG how to perform a certain function or asking another CCG to perform that function. They may even require the removal or replacement of the accountable officer or dissolution of a group.
Noble Lords may have seen recent reports of how NHS England is considering developing the CCG assurance framework to emphasise CCG achievement as well as capability. The detail of the assurance framework is, of course, a matter for NHS England but I am sure that noble Lords will be encouraged that NHS England is reflecting on how the assurance system can be improved. Ultimately, the Secretary of State is accountable to Parliament for the performance of the health system and will hold NHS England to account for how it has fulfilled its responsibilities, including how it has ensured that the health services which both it and CCGs commission are high quality and deliver value for money.
The noble Lord, Lord Hunt, asked about how NHS England is held to account by the department. The Secretary of State has formal accountability meetings with the chair and chief executive of NHS England every two months, which are structured around the mandate objectives and NHS England statutory duties. These are also attended by other NHS England board members, Ministers, the senior departmental sponsor and the Permanent Secretary. These meetings focus on strategic issues and any issues of delivery. Actions for NHS England are agreed in the meetings, recorded in the minutes and followed up in subsequent Secretary of State meetings. This process feeds into an annual assessment of NHS England by the Secretary of State. It is a legal requirement that this is laid before Parliament in response to NHS England’s annual report and covers NHS England’s performance in respect of mandate objectives and fulfilment of its statutory duties.
Meanwhile, NHS England is holding itself to account internally for its commissioning responsibilities. Just as there is a CCG assurance framework, a reciprocal direct commissioning assurance framework has been produced to demonstrate that NHS England is also exposing itself to similar scrutiny of its own commissioning responsibilities. NHS England has made a commitment to CCGs and wider stakeholders that it will apply the same level of scrutiny to its own direct commissioning responsibilities as it does to CCG commissioning. The assurance framework is used to identify concerns where the direct commissioning functions of area teams are particularly challenged. In these circumstances, the issues will be escalated through the line management arrangements in order to ensure that extra scrutiny or support is given as required. Ultimately, NHS England’s board will assure direct commissioning processes.
The noble Lord’s particular concern was around specialised commissioning and the overspend that we saw last year. In quarter 4 last year, NHS England forecast an overspend in specialised services of £172 million, an adverse variation to plan which was in excess of £291 million. Departmental analysis found that last year’s overspend in specialised services was due to a combination of factors, some historical and intrinsic, others unique to 2013-14. In April this year NHS England established a specialised commissioning task force in order to make some immediate improvements to the way in which it commissions specialised services and to put commissioning arrangements on a stronger footing for the longer term. The task force is led by Richard Jeavons, Director of Specialised Commissioning, NHS England. Additional resource from within NHS England has been diverted to the task force to ensure that it has the right mix of skills and expertise to enable it to meet its objectives. The task force comprises seven distinct work streams, which are focusing on financial control during the current year and planning for the 2015-16 commissioning round.
NHS England provides updates on the work of the task force to external and internal stakeholders every three to four weeks. There are also briefings given at key meetings and to key groups—for example, the Patient and Public Voice Assurance Group. Updates can be found on the NHS England website. NHS England describes its specialised commissioning task force work as a way to secure financial control in 2014-15 and to plan for 2015-16; it is not a wholesale review of specialised commissioning. The aim is to improve ways of working and to ensure that specialised commissioning is undertaken in the most efficient and effective way possible. The department is working closely with NHS England as it develops proposals for change. NHS England will continue to be held to account through the regular accountability meetings and the annual assessment that I have referred to.
Although these arrangements for the oversight of commissioning are new, I am confident that they are robust. The CQC’s new approach to inspection and the information that it provides about the quality of care through ratings is itself of use in commissioning, and where there is evidence that commissioning decisions are leading to poor care, it will, as I have said, be possible to escalate this to the CQC. I believe that these arrangements strike the right balance, allowing the CQC’s focus to remain on its core task of inspecting and regulating health and adult social care, but retaining an ability to look at commissioning issues when necessary.
Lord Hunt of Kings Heath
My Lords, I am sure that the House is most grateful to the noble Earl for such a comprehensive description of the relationship between the department, NHS England and commissioners for health and social care. I congratulate my noble friend Lady Wall on her appointment to the chairmanship of the Milton Keynes Hospital NHS Foundation Trust. I echo her thoughts about the new inspection regime, which is a vast improvement on the old regime. I also acknowledge that the CQC has made some excellent appointments at senior level to help the inspection process.
That is a very good start, but there are gaps in relation to the commissioning of services. I would like to follow up the question asked by the noble Baroness, Lady Barker about prison health services. The Explanatory Memorandum states that regulated activities provided by prescribed service providers in prisons are excluded because:
“A performance rating might be helpful to the commissioners of these services, but only if it can be uniformly awarded to all providers in the sector and at present, not all prison healthcare is regulated by CQC”.
This is not the time to go into that in more detail, but I should be grateful if the noble Earl would be prepared to write to us about it—unless he wishes to intervene now. I am grateful that he indicates that he would be prepared to write to us, because it is an important point. There have been vast improvements in the health service within prisons in recent years and I would have thought that they would welcome some ratings from the CQC. I hope that the Government will look into that.
On the substantive point, I simply want to say to the noble Earl that many of the issues that the health service and care services face are very pressing and very challenging. Those services depend on all the people within a system—both commissioners and providers —working together. I still believe that there is a strong case for there to be assessment by the CQC to help systems generally to learn from others, to see where weaknesses are and to improve the whole system approach—something that is missing from the current regime. This has been a good debate. I beg leave to withdraw my Motion.
Criminal Justice and Courts Bill
(10 years, 1 month ago)
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20:40 - Division on Amendment 166 - Ayes: 58 / Noes: 149 - Amendment 166 disagreed.
Lord Pannick
Lord Pannick (CB)
My Lords, this group of amendments is concerned with Clauses 74 and 75, and it relates to costs capping orders, or protective costs orders, as they were previously called. In a case that raises issues of public importance, the court has a power, before the case is heard, to set the maximum figure for the costs that a claimant will be required to pay should the claim not succeed. The object of such an order is to ensure that a claimant who raises an issue of public importance is not deterred from bringing the claim because of the risk of having to pay unquantified costs should the claim fail.
At the moment costs capping orders are a matter for the discretion of the court. They are rarely made, particularly in contexts other than environmental claims, which Clause 76 rightly recognises to raise special considerations because of an international convention, the Aarhus convention. The Minister, in correspondence, has helpfully referred to three or four cases a year of protective costs orders being made outside the environmental field. It is not a major problem. I have seen no evidence to suggest that the current exercise of the costs capping order power by the courts has caused any problems at all, other than the general problem that government departments would much prefer not to be the subject of judicial review applications at all.
Amendment 166 addresses a particular vice of Clause 74. Clause 74(3) provides that a costs capping order may be made,
“only if leave to apply for judicial review has been granted”,
but such a provision would defeat the very object of a costs capping order. If an applicant cannot seek and obtain a costs capping order in an appropriate case until leave to move for judicial review is granted, applicants will inevitably be deterred from bringing those judicial review proceedings in the public interest in the first place. They will be deterred because of the risk of having to pay an unquantified amount of costs at the permission hearing. I suggest to your Lordships that protective costs orders should remain available, if and only if the judge considers it appropriate in the circumstances of the individual case, prior to the grant of permission to move for judicial review. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I am sorry I missed the beginning of the noble Lord’s introduction of this amendment but I got called out. I simply want to speak on behalf of the Joint Committee on Human Rights. Our latest report says:
“We remain of the view expressed in our Report on judicial review that restricting the availability of costs-capping orders to cases in which permission has been granted would be a disincentive to meritorious public interest challenges being brought”—
that argument has been made—
“and we maintain our recommendation that the Bill be amended to remove this restriction”,
and that we explicitly support,
“Lord Pannick’s amendment … which would preserve the court’s current power to make a costs-capping order at any stage of judicial review proceedings, including before permission is granted”.
I hope that your Lordships’ House will feel able to support the amendment moved by the noble Lord, Lord Pannick.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I, too, support this amendment. By the same token that the House approved the earlier amendments, logically this amendment must be allowed as well. The vice of the proposed legislation is once again the narrowing of the courts’ discretion and the chilling of the judicial review. In this case, in the most important area of public interest litigation, it is really imperative that this amendment succeeds.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, I am grateful once again to noble Lords for their contributions—brief but helpful. Your Lordships will understand that the amendments tabled by the noble Lord, Lord Pannick, seek significantly to undermine Clauses 74 and 75. I will begin by reminding the House what the clauses do. They build on case law, in particular the Corner House case, to establish a codified costs capping regime for judicial review proceedings with the aim of governing what we ordinarily refer to as protective costs orders.
The Government’s position, which I made clear throughout Committee, remains clear. We believe that costs protection should be available in appropriate cases but costs capping orders should not be made widely or, indeed, routinely. Alongside Clause 76, to which the noble Lord, Lord Pannick, referred, which excludes certain environmental cases from the new regime, these clauses ensure that costs protection is granted only in cases where there are serious issues of the highest public interest that would not be taken forward without an order. It is only in these cases that a public body defendant should have to pay its own costs regardless of whether it wins or loses.
As noble Lords have explained already, part of Amendment 166 would remove the effect of Clause 74(3), which provides that costs capping orders should be made only where permission to proceed to judicial review has been granted. I do not believe this is correct. It would mean that claimants with weak cases would benefit from costs protection even if the court subsequently decides that their case has no merit and that it should not be given permission for judicial review. This would leave the public body paying the costs of dealing with an ex hypothesi unmeritorious case.
As it stands, the clause does not mean that the costs of applying for permission will not be covered by the order. As is the situation now, if made, an order will be able to cover costs incurred prior to the grant of permission. This, I think, is the answer to what the noble Lord, Lord Pannick, described as a particular vice of these provisions. The claimant can, as now, ask the court to make the order as part as the permission application. But we feel that it is right that a claimant should bear the financial risk of bringing a weak claim.
Amendment 166 once again seeks to remove the requirement for the court to be provided with information on funding available, as well as what is likely to be available to a claimant, for use by the court when deciding whether to make a costs capping order, and for court rules to set out what that information should include.
As I have said, it is the Government’s position that a claimant should be required to provide information on how their case will be funded. Under the current regime, and as set out in the Corner House case, courts are required to consider the financial resources of those who request costs capping orders. This is the very essence of why we have costs capping orders, something that we should, of course, replicate in this new regime.
Furthermore, setting out what information is required in court rules will give clarity to applicants about exactly what they need to provide. We cannot prejudge what the rules will say; I am sure noble Lords will be aware that this is a matter for the Civil Procedure Rule Committee. During the course of debates, some doubt seemed to be cast on the independence of the Civil Procedure Rule Committee. With respect, I think that doubt was misplaced. It is a committee chaired by the Master of the Rolls and contains, among others, Lord Justice Richards, all of whom, I am sure, with their experience and independence, will provide rules entirely independent of what the Secretary of State might or might not want. Of course, we expect that the information requested will be proportionate.
I turn to Amendment 167, which seeks to remove the third requirement in subsection (6), which is that an order can be made only if, without an order, it would be reasonable for the claimant to discontinue the judicial review. Again, this was a requirement of the Corner House case, and it is right that this remains. Doing anything other than this would make no sense. It would mean that well resourced claimants, including large companies, would be eligible for a costs capping order provided they could show that, without one, they would discontinue the claim, even though it would be entirely unreasonable for them to do so. This simply cannot be right. Indeed, it would mean they could be granted a costs capping order despite not being eligible under Corner House and the current regime.
Amendments 168 and 173 of the noble Lord, Lord Pannick, seek to remove entirely from Clauses 74 and 75 powers afforded to the Lord Chancellor to amend lists of matters within these clauses through statutory instrument. It is the priority of the Government to respond at pace to any future developments. These amendments would simply prevent our doing just that. It may well be that, in future, developments mean that it is considered necessary to make changes to the matters set out in these lists. Of course, as I have said, Parliament will still be able to scrutinise any changes as both powers are subject, not to the negative, but to the affirmative resolution procedure.
Turning now to Clause 75, which sets out in subsection (1) five non-exhaustive factors that the court must consider when deciding whether to make a costs capping order and its terms, Amendment 170 seeks to make it optional for the court to have regard to these factors. With the exception of paragraph (e), these factors are based on the principles taken from the Corner House case, and all five factors are important in ensuring that a costs capping order is not awarded where it is unnecessary, as is the Government’s case.
The courts retain significant discretion, as the clause does not dictate how much weight, if any, should be given to each factor. Furthermore, the list is not exhaustive, so the court may consider any other factors that it considers relevant.
The other amendments proposed by the noble Lord, Lord Pannick, would amend that list, first, so that the courts would not be required to have regard to whether the applicant might receive funding in the future and, secondly, so that the courts would not have to consider whether someone who might provide future funding would benefit from the judicial review. They would be told to ignore factors which, I respectfully suggest, are relevant. This would mean that the court would not have available to it a full picture of the claimant’s financial position when deciding whether it was appropriate to grant costs protection and, if so, at what level that protection should be set.
It is vital that the courts are made aware of the full financial underpinnings of a claim. This allows the court to assess whether a claim, although notionally brought by a claimant of limited means, is sufficiently well resourced not to require taxpayers’ subsidy by way of costs protection. It also allows the courts to ensure that, if they do make a capping order, the cap is made at the right level. Otherwise, it could result in the taxpayer being asked to pick up the bill for the defendant’s costs when the claimant would in fact have been in a position to pay.
If—and this is an important point—future financial support is not forthcoming, the claimant will be able to inform the court so that it can take the change of circumstances into consideration. We will invite the Civil Procedure Rule Committee to include this safeguard, which may be necessary, in court rules.
On removing the requirement that the court consider the benefit to a potential third-party funder, the Corner House case recognised that a claimant’s private interest in a case is a relevant factor when considering whether to grant a costs capping order. This requirement reflects that principle and the court should consider it as part of the full picture.
The clauses retain the principle that costs are a matter for the judiciary, a theme which has run through our debates today. When considering an application for a costs capping order in an individual case, it will be for the judge to decide whether the particular proceedings are in the public interest, whether an order should be made and, if so, what the terms of that order should be. That represents no change to the current position.
The noble Lord, Lord Pannick, effectively posed the question, “What’s wrong with the current position?”, and he did not understand there to be many cases concerned. I have asked for further data on this. I have to confess to the House that the Government’s data on costs capping orders are limited, but we have indicative figures from the Treasury Solicitor’s Department which estimate that, between September 2010 and August 2014, it was involved in at least 38 cases where protective costs orders were awarded, of which 14 related to non-environmental cases. However, these figures will not represent all judicial reviews, as the Treasury Solicitor’s Department does not represent all government departments, nor will the figures cover non-governmental defendants such as local authorities, so that the actual number of such orders may be that much higher. The noble Lord, Lord Beecham, may be fed up with references to the Richard III case, but a protective costs order was made there and, as he will well know, the Government were unable to recover any money from the claimants because it was a shell company. It was created entirely to pursue the litigation, which turned out to be entirely baseless.
These are unusual orders. They should be made where the judge has as much information as he or she should have in order to be able to make them. Any other provision is simply saying, “The judge shouldn’t take into account matters which most people would think were relevant”. These clauses are to ensure that costs capping orders are made only in cases that genuinely need them—we are talking about public money here—and are set at a level that properly reflects the financial position of the claimant. With that perhaps rather overlong explanation, I ask noble Lords not to press their amendments and to agree to Clauses 74 and 75 standing part of the Bill.
Lord Pannick
I am grateful to the Minister for his detailed explanation, which, far from being overlong, was very helpful, because I see the force of what he says—except in relation to Amendment 166, which addresses the removal of a power in the courts to make a costs capping order at the outset of the proceedings. There is no question of a costs capping order being made routinely, which was the Minister’s concern. These orders are in the discretion of the court. The court will not make such an order unless it is satisfied that the claim is sufficiently well founded to justify such an order.
I do not think it is any answer for the Minister to say that if leave is granted, a costs capping order can then be made. The problem, as the Minister knows, is that if a costs capping order cannot be made at the outset then these public interest claims will be deterred. As the noble and learned Lord, Lord Brown of Eaton-under-Heywood, pointed out, Amendment 166 has precisely the same purpose and effect as the three amendments already debated and voted on in your Lordships’ House this afternoon—that is, to retain judicial discretion, in this case as to when it is appropriate to make a costs capping order. In relation to Amendment 166, I wish to test the opinion of the House.
“Capping of costs: environmental cases
(1) This section applies to judicial review proceedings which constitute or concern an Aarhus Convention claim.
(2) Sections 71, 72 and 73 shall not apply to proceedings to which this section applies.
(3) Notwithstanding anything in sections 74 and 75, in proceedings to which this section applies the court shall make a costs capping order in favour of an applicant for judicial review of its own motion or upon the application of any party in any case where the court considers that if a costs capping order is not made the proceedings are unlikely to be fair, equitable, timely and not prohibitively expensive as required by the Aarhus Convention.
(4) Rules of court may prescribe the terms upon which a costs capping order may be made in accordance with subsection (3) provided that such terms are calculated to ensure that the proceedings will be fair, equitable, timely and not prohibitively expensive.
(5) In determining whether proceedings are likely to be fair, equitable, timely and not prohibitively expensive, the court shall have regard to any relevant reports of the Compliance Committee established pursuant to the Aarhus Convention.”
Lord Marks of Henley-on-Thames (LD)
My Lords, I moved amendments in these terms in Committee and so I will try to be brief, although the area they cover is quite complicated. Clause 76 is in the Bill because the Aarhus convention of 1998, which was ratified by this country in 2005, committed the United Kingdom to ensuring that environmental litigation will be,
“fair, equitable, timely and not prohibitively expensive”.
My amendments are founded on the principle that Parliament has a duty to ensure that this country acts in a way that is compliant with its international obligations.
Clause 76 recognises that the restrictions on costs capping orders as proposed in the Bill have the effect of making environmental litigation prohibitively expensive in any case. That is true ex hypothesi, because in a case where a judge would decide that a costs capping order is needed in order to enable an applicant to pursue the application, it follows that the application, if pursued without such an order, would be prohibitively expensive. It is for that reason that rules of court have already introduced rules limiting costs awards in Aarhus convention judicial review claims to relatively low fixed sums. Those sums are £5,000 against an individual applicant, £10,000 against a corporate applicant and £35,000 against a defendant.
However, the costs capping provisions are not the only provisions of the Bill that would put us in breach of the Aarhus convention: so would the provisions on disclosure of actual and likely financial resources and on the consequential orders for costs based on that information, as disclosed. Those provisions would have the effect that sources of support for judicial review applications would be choked off, making them prohibitively expensive for applicants without means, who would be left without the support of those people deterred from giving such support. The provisions on interveners and on costs capping would also have the effect of making environmental cases prohibitively expensive. Our amendments are therefore directed at broadening Clause 76 to exclude Clauses 71 and 72 on information about resources, and Clause 73 on interveners, for environmental cases as well as the costs capping provisions.
A further difficulty with Clause 76 is that it is permissive only and not mandatory, so that the Lord Chancellor is not required to make any regulations excluding the operation of the restrictions on costs capping. The provision is limited to ensuring that he is entitled to do so, if he chooses. Any such regulations that he chooses to make may also, under Clause 76(2), be as wide or as narrow as he chooses. Regrettably, this Lord Chancellor has given us little confidence that he is concerned to make challenges on judicial review less expensive.
Our amendments would also allow for costs capping orders in any case where the court considers that without such an order, the proceedings are unlikely to be,
“fair, equitable, timely and not prohibitively expensive”,
so as to bring the provisions squarely in line with our obligations under the convention. In our Amendment 174A, subsection (4) of the proposed new clause would introduce an objective test which would,
“prescribe … terms upon which a costs capping order may be made”,
to ensure compliance, once again by using the words of the convention. This is particularly important because the compliance committee established under the Aarhus convention has already found the United Kingdom to be non-compliant in a number of respects. The safe course is to ensure that the statute complies with the convention specifically and that there is a requirement that the regulations and rules of court do the same.
A further problem arises regarding definition. Clause 76(1) says that the definition of environmental cases is those cases which are environmental,
“in the Lord Chancellor’s opinion”.
Amendment 174B, which introduces a definition squarely based on the convention, is intended to address that difficulty and introduce an objective test. I beg to move.
Lord Faulks
My Lords, Clause 76 allows for judicial review claims on issues which relate entirely or partly to the environment to be excluded from the revised costs capping regime established by Clauses 74 and 75. This is to ensure continuing compliance with our obligations under the Aarhus convention and the various European directives which implement it. The requirements include that relevant procedures must not be prohibitively expensive. This is relevant to judicial reviews in certain environmental cases. Consequently, Clause 76 allows for environmental judicial reviews to be excluded from the approach in Clauses 74 and 75.
Lord Marks of Henley-on-Thames
My Lords, I am rather surprised that my noble friend regards my performance on this Bill as meriting promotion to “noble and learned Lord”.
We have both been brief. I rehearsed the arguments for the amendments in Committee and my noble friend rehearsed the arguments against. I will seek leave to withdraw the amendment but I say only this: I have a prediction that if these provisions are enacted in their present form, it will not be very long before the Compliance Committee established under the Aarhus convention draws attention to non-compliance by this country with its international obligations under Aarhus, not only in respect of Clauses 74 and 75 but in respect of Clauses 71 to 73 as well. I would regard that as a great pity because international obligations are a matter of great importance. With that observation, I beg leave to withdraw the amendment.
Lord Faulks
“Reporting restrictions: providers of information society servicesChildren and Young Persons Act 1933 (c. 12)1 After Schedule 1 to the Children and Young Persons Act 1933 insert—
Schedule 1AProhibition on publication of certain matters: providers of information society servicesDomestic service providers: extension of liability1 (1) This paragraph applies where a service provider is established in England and Wales (a “domestic service provider”).
(2) Section 39 applies to a domestic service provider who—
(a) includes matter in a publication in an EEA state other than the United Kingdom, and(b) does so in the course of providing information society services,as well as to a person who includes matter in a publication in England and Wales.(3) In the case of an offence under section 39, as it applies to a domestic service provider by virtue of sub-paragraph (2)—
(a) proceedings for the offence may be taken at any place in England and Wales, and (b) the offence may for all incidental purposes be treated as having been committed at any such place.(4) Nothing in this paragraph affects the operation of paragraphs 3 to 5.
Non-UK service providers: restriction on institution of proceedings2 (1) This paragraph applies where a service provider is established in an EEA state other than the United Kingdom (a “non-UK service provider”).
(2) Proceedings for an offence under section 39 may not be instituted against a non-UK service provider in respect of anything done in the course of the provision of information society services unless the derogation condition is satisfied.
(3) The derogation condition is satisfied where the institution of proceedings—
(a) is necessary for the purposes of the public interest objective,(b) relates to an information society service that prejudices that objective or presents a serious and grave risk of prejudice to that objective, and(c) is proportionate to that objective.(4) “The public interest objective” means the pursuit of public policy.
Exceptions for mere conduits3 (1) A service provider is not capable of being guilty of an offence under section 39 in respect of anything done in the course of providing so much of an information society service as consists in—
(a) the provision of access to a communication network, or(b) the transmission in a communication network of information provided by a recipient of the service,if the condition in sub-paragraph (2) is satisfied.(2) The condition is that the service provider does not—
(a) initiate the transmission,(b) select the recipient of the transmission, or(c) select or modify the information contained in the transmission.(3) For the purposes of sub-paragraph (1)—
(a) the provision of access to a communication network, and (b) the transmission of information in a communication network,includes the automatic, intermediate and transient storage of the information transmitted so far as the storage is solely for the purpose of carrying out the transmission in the network.(4) Sub-paragraph (3) does not apply if the information is stored for longer than is reasonably necessary for the transmission.
Exception for caching4 (1) This paragraph applies where an information society service consists in the transmission in a communication network of information provided by a recipient of the service.
(2) The service provider is not capable of being guilty of an offence under section 39 in respect of the automatic, intermediate and temporary storage of information so provided, if—
(a) the storage of the information is solely for the purpose of making more efficient the onward transmission of the information to other recipients of the service at their request, and(b) the condition in sub-paragraph (3) is satisfied.(3) The condition is that the service provider—
(a) does not modify the information,(b) complies with any conditions attached to having access to the information, and(c) where sub-paragraph (4) applies, expeditiously removes the information or disables access to it. (4) This sub-paragraph applies if the service provider obtains actual knowledge that—
(a) the information at the initial source of the transmission has been removed from the network,(b) access to it has been disabled, or(c) a court or administrative authority has ordered the removal from the network of, or the disablement of access to, the information.Exception for hosting5 (1) A service provider is not capable of being guilty of an offence under section 39 in respect of anything done in the course of providing so much of an information society service as consists in the storage of information provided by a recipient of the service if sub-paragraph (2) or (3) is satisfied.
(2) This sub-paragraph is satisfied if the service provider had no actual knowledge when the information was provided that it consisted of or included matter whose inclusion in a publication is prohibited by a direction under section 39.
(3) This sub-paragraph is satisfied if, on obtaining such knowledge, the service provider expeditiously removed the information or disabled access to it.
(4) Sub-paragraph (1) does not apply if the recipient of the service is acting under the authority or control of the service provider.
Interpretation6 (1) This paragraph applies for the purposes of this Schedule.
(2) “Publication” has the meaning given in section 39.
(3) “Information society services”—
(a) has the meaning given in Article 2(a) of the E-Commerce Directive (which refers to Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations), and(b) is summarised in recital 17 of the E-Commerce Directive as covering “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service”, (4) “Recipient”, in relation to a service, means a person who, for professional ends or otherwise, uses an information society service, in particular for the purposes of seeking information or making it accessible.
(5) “Service provider” means a person providing an information society service.
(6) For the purpose of interpreting references in this Schedule to a service provider who is established in England and Wales or an EEA state—
(a) a service provider is established in England and Wales or in a particular EEA state, if the service provider—(i) effectively pursues an economic activity using a fixed establishment in England and Wales or that EEA state, for an indefinite period, and(ii) is a national of an EEA state or a company or firm mentioned in Article 54 of the Treaty on the Functioning of the European Union;(b) the presence or use in a particular place of equipment or other technical means of providing an information society service does not, of itself, constitute the establishment of a service provider;(c) where it cannot be determined from which of a number of establishments a given information society service is provided, that service is to be regarded as provided from the establishment at the centre of the service provider‘s activities relating to that service.”Youth Justice and Criminal Evidence Act 1999 (c. 23)2 After Schedule 2 to the Youth Justice and Criminal Evidence Act 1999 insert—
Schedule 2ARestriction of reporting of criminal proceedings for lifetime of witnesses and victims under 18: providers of information society servicesDomestic service providers: extension of liability1 (1) This paragraph applies where a service provider is established in England and Wales, Scotland or Northern Ireland (a “domestic service provider”).
(2) Section 49, so far as it relates to a publication falling within subsection (1A)(a) of that section, applies to a domestic service provider who—
(a) includes matter in a publication in an EEA state other than the United Kingdom, and(b) does so in the course of providing information society services,as well as to a person who includes matter in a publication in England and Wales, Scotland or Northern Ireland.(3) In the case of an offence under section 49, as it applies to a domestic service provider by virtue of sub-paragraph (2)—
(a) proceedings for the offence may be taken at any place in England and Wales, Scotland or Northern Ireland, and(b) the offence may for all incidental purposes be treated as having been committed at any such place.(4) Section 49, so far as it relates to a publication falling within subsection (1A)(b) of that section, applies to a domestic service provider established in England and Wales who—
(a) includes matter in a publication in an EEA state other than the United Kingdom, and(b) does so in the course of providing information society services,as well as to a person who includes matter in a publication in England and Wales.(5) In the case of an offence under section 49, as it applies to a domestic service provider established in England and Wales by virtue of sub-paragraph (4)—
(a) proceedings for the offence may be taken at any place in England and Wales, and(b) the offence may for all incidental purposes be treated as having been committed at any such place. (6) Nothing in this paragraph affects the operation of paragraphs 3 to 5.
Non-UK service providers: restriction on institution of proceedings2 (1) This paragraph applies where a service provider is established in an EEA state other than the United Kingdom (a “non-UK service provider”).
(2) Proceedings for an offence under section 49, so far as it relates to a publication that includes matter in contravention of a direction under section 45A(2), may not be instituted against a non-UK service provider in respect of anything done in the course of the provision of information society services unless the derogation condition is satisfied.
(3) The derogation condition is satisfied where the institution of proceedings—
(a) is necessary for the purposes of the public interest objective,(b) relates to an information society service that prejudices that objective or presents a serious and grave risk of prejudice to that objective, and(c) is proportionate to that objective.(4) “The public interest objective” means the pursuit of public policy.
Exceptions for mere conduits3 (1) A service provider is not capable of being guilty of an offence under section 49, so far as it relates to a publication that includes matter in contravention of a direction under section 45A(2), in respect of anything done in the course of providing so much of an information society service as consists in—
(a) the provision of access to a communication network, or(b) the transmission in a communication network of information provided by a recipient of the service,if the condition in sub-paragraph (2) is satisfied.(2) The condition is that the service provider does not—
(a) initiate the transmission,(b) select the recipient of the transmission, or(c) select or modify the information contained in the transmission.(3) For the purposes of sub-paragraph (1)—
(a) the provision of access to a communication network, and(b) the transmission of information in a communication network,includes the automatic, intermediate and transient storage of the information transmitted so far as the storage is solely for the purpose of carrying out the transmission in the network.(4) Sub-paragraph (3) does not apply if the information is stored for longer than is reasonably necessary for the transmission.
Exception for caching4 (1) This paragraph applies where an information society service consists in the transmission in a communication network of information provided by a recipient of the service.
(2) The service provider is not capable of being guilty of an offence under section 49, so far as it relates to a publication that includes matter in contravention of a direction under section 45A(2), in respect of the automatic, intermediate and temporary storage of information so provided, if—
(a) the storage of the information is solely for the purpose of making more efficient the onward transmission of the information to other recipients of the service at their request, and(b) the condition in sub-paragraph (3) is satisfied.(3) The condition is that the service provider—
(a) does not modify the information,(b) complies with any conditions attached to having access to the information, and(c) where sub-paragraph (4) applies, expeditiously removes the information or disables access to it.(4) This sub-paragraph applies if the service provider obtains actual knowledge that—
(a) the information at the initial source of the transmission has been removed from the network,(b) access to it has been disabled, or(c) a court or administrative authority has ordered the removal from the network of, or the disablement of access to, the information.Exception for hosting5 (1) A service provider is not capable of being guilty of an offence under section 49, so far as it relates to a publication that includes matter in contravention of a direction under section 45A(2), in respect of anything done in the course of providing so much of an information society service as consists in the storage of information provided by a recipient of the service if sub-paragraph (2) or (3) is satisfied.
(2) This sub-paragraph is satisfied if the service provider had no actual knowledge when the information was provided that it consisted of or included matter whose inclusion in a publication is prohibited by a direction under section 45A(2).
(3) This sub-paragraph is satisfied if, on obtaining such knowledge, the service provider expeditiously removed the information or disabled access to it.
(4) Sub-paragraph (1) does not apply if the recipient of the service is acting under the authority or control of the service provider.
Interpretation6 (1) This paragraph applies for the purposes of this Schedule.
(2) “Publication” has the meaning given in section 45A.
(3) “Information society services”—
(a) has the meaning given in Article 2(a) of the E-Commerce Directive (which refers to Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations), and(b) is summarised in recital 17 of the E-Commerce Directive as covering “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service”,and “the E-Commerce Directive” means Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce).(4) “Recipient”, in relation to a service, means a person who, for professional ends or otherwise, uses an information society service, in particular for the purposes of seeking information or making it accessible.
(5) “Service provider” means a person providing an information society service.
(6) For the purpose of interpreting references in this Schedule to a service provider who is established in England and Wales, Scotland, Northern Ireland or an EEA state—
(a) a service provider is established in England and Wales, Scotland, Northern Ireland or in a particular EEA state, if the service provider—(i) effectively pursues an economic activity using a fixed establishment in England and Wales, Scotland, Northern Ireland or that EEA state, for an indefinite period, and(ii) is a national of an EEA state or a company or firm mentioned in Article 54 of the Treaty on the Functioning of the European Union;(b) the presence or use in a particular place of equipment or other technical means of providing an information society service does not, of itself, constitute the establishment of a service provider;(c) where it cannot be determined from which of a number of establishments a given information society service is provided, that service is to be regarded as provided from the establishment at the centre of the service provider‘s activities relating to that service.””
Lord Pannick
“Legal aid for judicial review
(1) The Lord Chancellor may not use the powers in section 2 or 9 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 to impose further eligibility criteria for receipt of legal aid, or further to restrict the scope of legal aid, for judicial review proceedings (including applications for permission to apply for judicial review).
(2) Any statutory instrument made or to be made under the provisions referred to in subsection (1) and which otherwise conflicts with the restrictions set out in that subsection ceases to have effect in relation to legal aid for such proceedings.”
Lord Pannick
My Lords, Amendment 176 raises an issue of some constitutional importance. The proposed new clause would prevent the Lord Chancellor using the powers that he was granted under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, or LASPO, to restrict eligibility for legal aid in judicial review proceedings. Your Lordships will recall that during the debates on LASPO Ministers repeatedly assured the House that the restrictions on legal aid contained in the LASPO legislation did not affect judicial review. Had the Bill made express provision restricting legal aid for judicial review, I think that Ministers would have found it difficult to secure the approval of the House for such provisions.
Instead of bringing forward proposals for restrictions on the availability of legal aid for judicial review by way of primary legislation so that such proposals could be fully scrutinised, the Lord Chancellor has limited legal aid in judicial review by subordinate legislation. Such subordinate legislation, as your Lordships well know, receives only limited scrutiny in this House. Detailed amendments cannot be tabled and debated, and the convention is that we very rarely indeed table, far less approve, a fatal Motion. To give one example of the problem, on 7 May your Lordships’ House debated a Motion of Regret that I had tabled in relation to the Civil Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014.
Restrictions on legal aid for judicial review are far too important a matter for secondary legislation. If the Lord Chancellor wants to restrict the scope of legal aid in the context of judicial review, let him bring forward proposals in primary legislation. Those proposals can then be properly scrutinised and amended as appropriate. The purpose and effect of Amendment 176 is to secure that objective, and I commend it to the House.
Amendment 177 would introduce a further new clause to prevent the Lord Chancellor implementing a residence test for legal aid in judicial review proceedings. If I may, I will leave the noble Lord, Lord Beecham, to explain the purpose of that amendment, which I support. I beg to move.
Lord Beecham
Having been given that cue by the noble Lord, Lord Pannick, I cannot resist the temptation to rise now and speak to the amendments. Both of the amendments, as the noble Lord has said, relate to the issue of the availability or otherwise of legal aid in judicial review cases, and the noble Lord’s amendment deals with the broad problems implicit in the Secretary of State’s use of delegated powers to remove funding for applications for legal aid except where permission is granted or subject to an ex gratia scheme. In his characteristic way, the noble Lord has dealt comprehensively, not to say devastatingly, with that general issue.
Amendment 117 focuses exclusively on the Government’s attempt to deny legal aid for applications for judicial review by the imposition of a residence test. Noble Lords will be aware that an order under the provisions of LASPO to implement this approach was laid in the summer and was due to be debated under a Regret Motion in July, but that it was withdrawn in the light of the decision of the Divisional Court, with Sir Alan Moses—then Lord Justice Moses—presiding, which pronounced the provision unlawful.
The order would have imposed a prohibition on anyone over the age of 12 months—I repeat, 12 months—who had not been continuously resident in the UK for 12 months at some time from obtaining legal aid for judicial review cases. In its seventh report of 2013-14 the Joint Committee on Human Rights had criticised the Government’s proposals on a number of grounds, including their reliance on the possible availability of exceptional funding when, as we know, only 2% of applications for exceptional funding are successful. It took exception to the Government proceeding by way of secondary legislation, as the noble Lord has already mentioned, given the important human rights considerations urging that changes should be effected through primary legislation. Of course this Bill could have provided such a legislative vehicle if the Government had not chosen to use it in the way they have by tabling amendments on other, less fundamental, issues.
The Joint Committee was particularly exercised about the position of children, people with problems affecting their mental capacity and detainees seeking a remedy, for example, for abuse inflicted while in detention. It made the obvious point that the Government’s ostensible justification for denying legal aid to non-residents, on the grounds that they do not make a financial contribution to taxation, could not in any event apply to children. In its first report of the present Session, the committee joined the Children’s Commissioner in condemning the application of the residence test to children as a contravention of the UN Convention on the Rights of the Child. How long, one wonders, might it be before UKIP or the Tea Party tendency call for us to withdraw from the UN, on that sort of approach?
Some 30 highly reputable organisations have supplied a briefing which I commend to Members of your Lordships’ House, if you have not already seen it, setting out in clear terms 10 powerful objections to the proposed test. Interestingly, the first of those contained quotations from the noble Lord, Lord McNally, and the former Lord Chancellor, Ken Clarke, in debates on the then LASPO Bill. At that time the noble Lord, Lord McNally, affirmed that,
“the reforms establish an affordable system while ensuring that no one is denied … justice”.—[Official Report, 20/12/11; col. 1717.]
He went on to say that,
“there is no question as to what services might be funded; they are in the Bill for all to see”.—[Official Report, 5/3/12; col. 1569.]
Mr Clarke said that,
“we are continuing legal aid in all cases involving judicial review ... That applies to every kind of judicial review, because we do not think that the Government or a public body should be resisting a claim about abuse of their powers from a litigant who cannot get legal advice”.—[Official Report, Commons, 17/4/12; col. 227.]
Those remarks are of course entirely consistent with much of the debate that we have heard tonight and the amendments that have been carried already. They would, and should, apply to this proposal to restrict legal aid in cases involving a residence test, even to the extent of applying to children.
However, those assurances given at that time clearly carried no weight with the present Secretary of State; nor did the criticisms to which I have referred, although some of us are, if anything, astonished by their moderation, especially when set alongside the court judgment mentioned earlier and which is now under appeal. That judgment held that the residence test was both ultra vires, because it was not authorised by LASPO, and discriminatory, unlawful both at common law and under the Human Rights Act; but, significantly in the light of the threatened onslaught on the latter to garner votes from UKIP, that it was unlawful with or without the latter. Lord Justice Moses, as he then was, stated that,
“it is not possible to justify such discrimination in an area where all are equally subject to the law, resident or not, and equally entitled to its protection, resident or not … In the context of a discriminatory provision relating to legal assistance invoking public confidence”—
which, I note in passing, was an ostensible reason for the measure given by Ministers—
“amounts to little more than reliance on public prejudice”.
Sir Alan went on to identify a number of situations described in the large volume of evidence filed in the case which underlined the force of his concerns. Incidentally, it was a case of judicial review, which perhaps demonstrates the merits of that process. He then went on to refer to the extraordinary comments of the Lord Chancellor, who, during the case and pending judgment, went on record as saying,
“most right-minded people think it’s wrong that overseas nationals should ever have been able to use our legal aid fund anyway … And yes, you’ve guessed it. Another group of Left-wing lawyers has taken us to court”.
On this Sir Alan remarked that Mr Grayling was:
“Unrestrained by any courtesy to his opponents, or even by that customary caution to be expected while the court considers its judgment, and unmindful of the independent advocate's appreciation that it is usually more persuasive to attempt to kick the ball than your opponent”.
That is a perfect depiction, one might think, of the Lord Chancellor as the Luis Suarez of our justice system—which are my words, not Sir Alan’s. Sir Alan went on to quote a 40 year-old judgment of Lord Scarman:
“Every person within the jurisdiction enjoys the equal protection of our laws. There is no distinction between British nationals and others. He who is subject to English law is entitled to its protection”.
It is shameful that while the Government are justifiably promoting the use of our courts and lawyers to wealthy foreigners and overseas corporations, they should seek to deny access to justice to those in dire need of it but without the means to procure it on the grounds that they have not been resident for 12 months. In a previous debate this afternoon I referred to the Minister who advised organisations like those who have supplied briefings for Members on these issues to “stick to their knitting”. I had hoped that Members of your Lordships’ House would not emulate those earlier knitters, the tricoteurs of the French Revolution, but would instead have sought to prevent the guillotine falling on some of the fundamental rights enshrined in and enforced by our system of justice. However, it is apparent that there would not be a majority to achieve that objective, given the late hour and the fact that most Members have now departed. In the circumstances, I will not be asking the House to divide on this issue, but I very much regret that the Government have set their face solidly against doing anything to retract an obnoxious and objectionable proposal which does them no credit whatever and, in fact, given his attitude, demeans the position of the Lord Chancellor.
Baroness Campbell of Surbiton (CB)
My Lords, I strongly support the two amendments in this group. My noble friend Lord Pannick has explained their crucial importance, as has the noble Lord, Lord Beecham. I wish to highlight only one point, which is why I am here at this hour—very usual for me.
It is crucial because if there is one element in the Government’s so-called “reforms” that causes me the most anguish, it is restrictions on legal aid. For many, many disadvantaged people, legal aid is the only way they can pursue their legitimate rights. When it is denied, justice is denied. This is particularly true of judicial review proceedings. I want us to leave here tonight contemplating the fact that, in the landmark decision this summer, the residence test was found unlawful. The court reviewed real-life examples of people who would be ineligible for legal aid in future. The one that struck me the most was the example cited of “P”, a severely learning-disabled adult who had been forced to live in a dog kennel outside the house, had been beaten regularly by his brother and mother, and starved over an extensive period of time. For me, this story encapsulates why we must support these amendments in some way. If we do not vote tonight, we must truly think about how we are going to address this situation. The Government’s residence test for legal aid has no basis in law and, I am afraid, will without doubt deny justice to those who need it most—perhaps the man in the dog kennel.
Lord Deben (Con)
My Lords, many cases have been put before us in these debates in which we have argued the facts. We have disagreed about whether particular measures will have this or that effect. This is not the same kind of discussion. I can see that we could have quite a lengthy discussion about the access to our courts of foreign nationals and the cost to the nation of that.
However, that is not what I want to argue here. I want to argue something that is more serious because it is not a matter of opinion but of behaviour. If a responsible Minister has made an undertaking about a law and that has been accepted by the House, if that undertaking is to be changed, it must be changed in front of the House in circumstances in which the House can make a decision. I am a bit tired of the constant statement by Ministers that there is the affirmative resolution procedure, as if that made any real difference. We all know perfectly well that the system that we have means that there is very little effective parliamentary control over legislation that is passed by those techniques.
If Parliament has been assured by a Secretary of State that a particular situation pertains, it is morally unacceptable that some other Secretary of State can reverse that without Parliament being able to argue the case. I say that as somebody who may not have gone all the way along with some of the arguments about access to justice for people wherever they come from and the rest. I certainly have some concerns—I think many Members of the House have concerns—about the way that our system has been used in the past. I certainly have a real concern about the exclusion of children; I agree with the noble Lord opposite on that. However, that is not the issue for the House today. That is why I am very sorry that we are debating it so late, at a point when the Opposition have decided that it is perfectly possible to send all their people home. Some people might ask why people thought that they would have an early night when matters of real importance—this amendment and the previous one—were being discussed. I think that many will ask that question.
The Government and the Minister need to stand up and explain to the House how it is possible, in a democratic society, for a Secretary of State to give an undertaking to the House as to what a Bill means and for that then to be changed without an opportunity for debate in the House. That is a really serious issue and not one of an ordinary kind. Although we will not vote on this, because one can see the nature of it, I hope that the Minister will take back to his colleagues that this is not a debate of the same kind that we have had up to now. It is a serious issue because people must trust the words of Ministers when they speak officially. I was a Minister for 16 years and I do not think that I can remember a moment when I would have reversed the public statement of a predecessor without giving an opportunity for that debate to take place publicly and clearly. On this occasion, the House has every reason to say that this is not good enough.
Lord Phillips of Sudbury (LD)
My Lords, in 1949, when the Legal Aid and Advice Act was brought in, the state of affairs in this country was radically different for the ordinary man and woman in the street from what it is now. I speak in terms of legal services and the availability of the same. In 1949, after the Legal Aid and Advice Act was passed and the scheme introduced, 95% of all law firms in the United Kingdom undertook legal aid. I can assure your Lordships that every single one of those firms would have done a great deal of pro bono work in the communities that they served. Indeed, not to have done so would have been a deathblow to their local reputation and workflow.
In the interim, everything has changed in that regard. Today, the number of firms doing substantial amounts of pro bono work and which are therefore available to the bemused citizen has, I am afraid, shrunk to a very small number. Indeed, the irony is that the bigger and richer the law firm, the less pro bono work it does. I speak as president of the Solicitors Pro Bono Group, or LawWorks as it is commonly known. In the mean time, the volume of legislation that we pass in this place has rocketed. Indeed, it is ironic that LASPO, the Act that underpins these amendments—I am speaking particularly to Amendment 176—is 302 pages long, is complex beyond measure and has rather more pagination than the entire statutes of 1906, which I had cause to look at the other day. Our output is something in the order of 13,000 to 15,000 pages of statute law a year, with only 2,000 or 3,000 pages of repeals. The problem for the ordinary citizen in terms of the law, access to the law and getting help and assistance when they desperately need it has never been remotely as great. Indeed, it is one factor in this strange mood that prevails in our country today—a mood of disillusionment and mistrust.
The amendment is absolutely essential. Make no mistake, judicial review is more and more important in the world that we inhabit, precisely because of the astonishing complexity and volume of the law with which we are surrounded and the need, therefore, to enable citizens and organisations to have access to the courts for judicial review when it is needed. One might think that JR cases are rocketing, but according to the report of the Joint Committee on Human Rights in April this year on the implications for access to justice of the Government’s proposals to reform judicial review, that is not the case. That may be surprising, but I suspect it has as much to do with the lack of pro bono availability —although there are some wonderful exceptions—and the legal aid position as is. The proposal in Amendment 176 to prevent a future Lord Chancellor from imposing further eligibility criteria or restricting the scope of legal aid without coming back to Parliament must be right. I hope that the Minister, for whom I have great respect, will see the importance of this.
Access to justice is surely the ultimate hallmark of a democratic society that is working. We as a Parliament do not walk our own talk unless, as well as passing these tidal waves of legislation, we make available to the citizen the means of accessing that legislation when needed. Otherwise, frankly, we are hypocrites and aiding and abetting a society in which money wealth is ever more dominant. Where justice is concerned, that must surely be wholly unacceptable.
Baroness Lister of Burtersett
My Lords, my noble friend Lord Beecham referred to the Joint Committee on Human Rights report on the residence test and legal aid for children. I want to return to a point I raised in Committee from the Joint Committee’s report, which referred to child protection cases. The committee said:
“We are confused as to why the Government excluded certain child protection cases from having to satisfy the residence test, but did not exclude from the test all legal remedies including judicial review. Whilst welcoming the funding of legal advice, we do not understand the justification that it is a good use of public money to give funding for advice that cannot be taken through to a judicial review”.
The Minister responded in Committee that,
“the Government’s position is that they do not believe that the JCHR should have concluded what they concluded in that respect. The committee appears to have proceeded on the basis that a child needs a lawyer in all cases to represent them and to ensure that their views are taken into account”.—[Official Report, 30/7/14; col. 1666.]
I am not sure that the committee actually said that. The committee acknowledged the Government’s argument that they would prefer that people do not have to make an application for judicial review. I am an adult and I would not want to go to judicial review without the help of a lawyer—lawyers do have their uses—and it is a bit unrealistic to expect a child to do so. However, the Minister carefully avoided the key point we were making, which is that,
“it is inevitable that judicial review will be a necessary remedy in certain cases. We are concerned that, if the residence test applies, there will no longer be the risk of a judicial review when a local authority fails a child in its care. This deterrent effect of a judicial review encourages local authorities to discharge their duties properly”.
We are therefore going back to the points made earlier about accountability and the deterrent effect. If a local authority knows that legal aid is not there, the chances of judicial review being brought are highly remote. The deterrent effect is, therefore, lost and the accountability of local authorities is diminished. That cannot be right.
Lord Faulks
My Lords, this has been a passionate debate. We heard from the noble Lord, Lord Pannick, in close co-operation with the noble Lord, Lord Beecham, who, to continue the football analogy, persisted with his tactic of man-marking the Lord Chancellor. The debate was also enhanced by the contribution of the noble Baroness, Lady Campbell. My noble friend Lord Deben made a number of criticisms of ministerial colleagues for announcements. I must, and will, deal with those. My noble friend Lord Phillips told us about bygone days, when the way legal practices functioned was very different. I have, through my relations, memories of rather a different approach to the law than that which pertains now. Legal aid was certainly commonplace in the provinces then and people were charged what solicitors thought they could afford. We live in a very different era now. The noble Baroness, Lady Lister, repeated her concern at the effect of the residence test on some children in some circumstances.
Amendment 180 would bring the new clauses into effect at the end of the period of two months beginning with the day on which the Act is passed. Amendment 176 seeks to prevent the Government making future changes restricting the availability of legal aid for judicial review through secondary legislation under LASPO. Specifically, the amendment would prevent future changes being made through the powers conferred under Sections 2 and 9 of LASPO. It is important to pause here as there is a danger of confusion. Section 2 deals with remuneration and Section 9 with scope, where these have the effect of imposing further eligibility criteria for legal aid in judicial review cases, or of restricting the scope of legal aid for judicial review. The amendment also seeks to annul any statutory instruments that have previously been made through the powers available under Sections 2 and 9 of LASPO, in so far as they restrict eligibility or scope in relation to judicial review.
As noble Lords will already be aware, remuneration arrangements for civil legal aid cases have recently been amended in regulations made under Section 2 of LASPO so that where an application for judicial review is issued, the legal aid provider will undertake work on the application at financial risk, unless permission is granted or a discretionary payment is made. This point was elegantly made by my noble and learned friend Lord Mackay of Clashfern. There is, of course, a difference between scope and remuneration in this context, and that is a partial answer to the point made by my noble friend Lord Deben. A theme correctly adopted by the Government, throughout the difficult period that has persisted since they came into power, is that limited legal aid resources should be properly targeted, particularly at judicial review cases where they are needed most. The legal aid system is there to command public confidence and credibility. It was in that context that we introduced amendments to the Civil Legal Aid (Remuneration) Regulations to limit the circumstances in which legal aid providers should receive payment for work carried out on an application for permission.
It may be helpful if I explain that our figures suggest that there are a significant number of unmeritorious cases—751 in 2012 and 2013 alone—which receive public funding but where permission is refused. Therefore, they have apparently satisfied the Legal Aid Agency that there is sufficient to justify legal aid. In fact, on the old test, they have failed to surmount the rather low hurdle of permission. This change was introduced to incentivise providers to consider more carefully whether to commence judicial review proceedings and hesitate before commencing claims that are unlikely to receive permission. In genuinely meritorious cases, the provider is still paid because the case is granted permission, the case concludes prior to permission and their costs are paid by the defendant, or, where the case concludes prior to permission and they cannot get costs, the provider can apply to the Legal Aid Agency for discretionary payment. Unfortunately, I do not think that my noble friend Lord Deben was able to be present when we had a lengthy debate on these issues, and the question of legal aid for judicial review and its limits in relation to remuneration and scope was debated.
Remuneration continues to be paid in the usual way for the earlier stages of a case to investigate the prospects and strength of a claim and to engage in pre-action correspondence aimed at avoiding proceedings under the pre-action protocol brought in by the noble and learned Lord, Lord Woolf, who is in his place, to discourage proceedings where the matter could be sorted out through an exchange of letters pursuant to the protocol.
I should stress that the regulations made under Section 2 of LASPO do not affect the availability of civil legal aid to individuals, the scope of civil legal aid for judicial review or the eligibility of applicants for legal aid in judicial review proceedings. Where a client is in receipt of legal aid, he or she will remain so for the life of the case unless it is withdrawn for other reasons. These changes relate only to the remuneration of legal aid providers. To put it more simply, it is the lawyer who loses out. The client does not lose legal aid.
As the amendment seeks to prevent the Government using Sections 2 or 9 of LASPO to impose further eligibility criteria for receipt of civil legal aid or to restrict the scope of legal aid, the amendment would therefore not achieve what appears to be the intended effect of, among other things, annulling the recent amendments I have referred to on remuneration. The amendment would however have the consequence of preventing the Government imposing additional eligibility criteria or restricting the scope of legal aid for judicial review, other than through primary legislation. It would also annul previous amendments debated and passed by Parliament in relation to the scope of legal aid for judicial review.
The form of legislation and level of parliamentary scrutiny to which provisions in relation to the remuneration of providers, and the eligibility for and scope of civil legal aid, are subject was considered only recently by Parliament during the passage of LASPO. We continue to believe that the level of parliamentary scrutiny is appropriate.
Perhaps I may remind the House about what happened during the passage of the LASPO Bill. Parliament was assured that the scope of judicial review would not be amended, which is entirely correct, but we do not accept that the proposals we are discussing are inconsistent with LASPO. In other words, the issue of bad faith, which is effectively alleged by my noble friend, simply does not arise. LASPO contains a very clear power to amend the scope of civil legal aid, as per Section 9, to which I referred earlier. There is no exception for judicial review.
Therefore, it is wrong to say that LASPO was enacted on the basis that the scope of legal aid would never be amended to create some sort of estoppel, as my noble friend seems to suggest.
Lord Deben
My noble friend will entirely solve my problem if he can say absolutely directly that nothing that the then Lord Chancellor said is in any way inconsistent with what we are now doing. In other words, what Kenneth Clarke said as Lord Chancellor, and what he promised, are entirely carried through and there is no contradiction whatever. In that case, I have no problems at all and will be happy to support him, but that is what we want to know.
Lord Faulks
I am sorry that my noble friend is not satisfied with the explanation that I have been rather laboriously making—which is that it all depends on the difference between scope and remuneration. The scope of legal aid has not been altered; we are simply talking about an amendment to remuneration at one stage of the process—a particular regulation which was considered in Committee. It was the subject of a debate on these matters. Admittedly there was opposition to it on the basis that this could stifle people from bringing judicial review, but it was not then suggested that there was some violent inconsistency between the LASPO Bill and what was said during its passage, and the change pursuant to Section 9. Now, however, it is being suggested that there is some bad faith on the part of the Government.
Lord Beecham
Did the Minister really say that the application of a residence test does not—
Lord Faulks
I am not talking about the residence test at all. I shall come to that shortly, but it is a different issue. Noble Lords are perfectly entitled to ask me questions about it at that stage. I am talking about the suggestion that—regardless of the residence test, which is a separate issue that I shall come to later —the provisions on legal aid for judicial review in some way breach an undertaking that was given to Parliament. That seems to be the burden of what is being suggested.
The power to make changes in the future should not be unnecessarily constrained as proposed. Any changes made to scope, under Section 9, and eligibility, under Section 11, are subject to the affirmative procedure, ensuring full parliamentary debate as appropriate. I am sorry that the affirmative procedure is not considered to be as satisfactory as primary legislation. Nevertheless, it remains a proper way to bring such matters before Parliament.
As I said in Committee, making such changes by primary legislation would be a cumbersome process and a disproportionate use of this House’s time. It would stop the Government of the day making necessary changes without primary legislation, even where change was necessary to ensure that the provisions remained up to date. The House may possibly remember—the noble Lord, Lord Pannick, may well remember—that during the passage of the previous Bill, certain noble Lords, of whom I was one, were anxious that the power should include both improving and increasing the scope of legal aid, if it was considered appropriate, and that became part of the LASPO Act.
Lord Phillips of Sudbury
I am sorry to interrupt my noble friend, but does he not accept that the procedure of dealing with changes via statutory instrument offers no protection whatever? There is no power to amend a statutory instrument; one can only reject it. I simply ask my noble friend: when did this House last reject a statutory instrument?
Lord Faulks
I am unable to answer that specifically. I am afraid that I do not know. I accept that there is a difference in the process, and I am sure that rejection is very rare indeed. However, that does not mean that a statutory instrument is not scrutinised. It is scrutinised, but there just happens to be a different method of scrutinising it—as my noble friend knows only too well.
Furthermore, there is no basis on which to distinguish judicial review from other, equally important, matters for which civil legal aid is available by necessitating primary legislation for such amendments. The approach envisaged by LASPO remains appropriate and effective, ensuring that any restrictions—indeed, any changes to eligibility or scope—whether technical or major, will get the scrutiny they require, but this should not necessitate primary legislation.
Finally, the amendment would have the serious effect of annulling any previous instruments made under Sections 2 or 9 of LASPO that restrict eligibility for, or scope of legal aid for, judicial review, including the provisions of an order debated and approved by Parliament in 2013 to ensure that the exclusions relating to judicial review agreed at the time of LASPO function as Parliament intended. Noble Lords will recall that the relevant amendment made under the 2013 order, which made it clear that legal aid for judicial review is governed by paragraph 19 of Part 1 of Schedule 1 to LASPO—and not any other provision—passed without opposition. The effect of the noble Lords’ amendment would be to annul the provisions for judicial review within the 2013 order, undermining the intention of Parliament.
Lord Pannick
I am very grateful to the Minister. As I mentioned in opening this short debate, Amendment 176 raises an issue of considerable constitutional importance. I am particularly grateful to the noble Lord, Lord Deben, for explaining so clearly and powerfully the nature and the importance of the constitutional issues.
As far as I am concerned, the constitutional issue is very plain: whether Ministers should be able to reduce legal aid for judicial review by the use of LASPO powers. Despite emphasising when the LASPO Bill was being debated that the scope of legal aid for judicial review was not being altered, the regulations certainly have reduced the scope of legal aid for judicial review. There is now no legal aid until leave to move is granted, other than in exceptional cases.
Lord Faulks
I am very grateful to the noble Lord for giving way, but does he accept that there is a distinction between the scope of legal aid and the remuneration of one stage of that scope? Legal aid can be available. Whether the lawyer is paid, in the case of an unsuccessful application for permission, does not remove the individual’s essential right to legal aid.
Lord Pannick
If you give an assurance that the scope of legal aid for judicial review is not being reduced or altered by LASPO, it seems that then introducing regulations which provide that there will be no remuneration for legal aid unless and until leave to move is granted and that there will be no remuneration for legal aid in residence regulations—although I appreciate they have been quashed—is indeed tantamount to reducing the scope of legal aid for judicial review. There is no point in saying that we are protecting legal aid as to scope for judicial review if you do not pay lawyers for providing the legal advice and assistance. That is what legal aid is about. So, with great respect, I do not accept the distinction between scope and remuneration. That simply will not wash, in my respectful submission.
Tonight I am not concerned with inviting the House to consider the merits or otherwise of the Government’s policies. We will all have our own view on the merits of the policy and whether legal aid is too wide or not wide enough. My concern is the constitutional one of whether it is appropriate to amend this important area of the law by secondary legislation in the light of the assurances we were given and when, I suggest, but for those assurances the Government would have had even more difficulty than in fact they had in getting the LASPO Bill through this House.
The Countess of Mar (CB)
I am sorry to remind the noble Lord, but this is Report and nobody should speak after the Minister except the person winding up.
Lord Pannick
I am very happy if the noble Lord wishes to clarify a matter. He does not; so be it. For my part, I remain troubled by this matter. I continue to think that it is important. I am not going to pursue it tonight but no doubt there will be other opportunities at some stage to do so. I beg leave to withdraw the amendment.
Lord Pannick
Lord Pannick
My Lords, your Lordships have heard today that Part 4 of the Bill contains a number of extraordinary provisions. Amendments 178 and 179, the final group of amendments for debate, provide an appropriate finale to our consideration of Part 4 because they address the quite extraordinary powers that are conferred on the Lord Chancellor by Clause 79.
If your Lordships take time to read Clause 79, you will see that the Lord Chancellor is given a power not merely to,
“make consequential … incidental, transitional, transitory or saving provision”,
to none of which I object. He is also given a power to make “supplementary” provisions by subordinate legislation. This power extends, so the Bill says, to amending, repealing or revoking legislation.
These are quite extraordinary powers, as the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Deben, explained to the House in Committee. I can see no justification whatever for conferring such powers on a Minister, far less in the sensitive context of judicial review, which, as your Lordships have heard this afternoon, is an essential element of the rule of law and the purpose of which—or at least one purpose of which—is to control the powers of Ministers. The Minister gave in Committee no explanation that I could understand as to why these extraordinary powers were required. I look forward to hearing his observations tonight. I beg to move.
Lord Deben
Happily, I am able to say now what I was going to say earlier, which is that I am one of those people who want to cut the amount of money that we have spent on legal aid. I take a very clear view that it is out of line with the arrangements in any other country that you might like to compare it with and that it is perfectly right for the Government to take those measures. However, that is why the Government should be a little concerned that people who are on their side have found unacceptable the mechanisms by which we have extended the powers of Ministers without due parliamentary control. This is the problem. Ministers should recognise that this is where the difficulty comes.
What we are saying is that the purpose is wholly acceptable but that to give Ministers powers of this kind is unacceptable and, as far as I can see, there is no good reason for doing it. That is the problem for the supporters of the Government and of their stance, which is why it would be helpful if the Lord Chancellor were to understand that we think that Parliament should have control in these very important areas, that we should not leave it to supplementary legislation even if it is of an affirmative kind and that—I am sure that my noble friend the Minister is entirely straightforward in his view about the connections between this and what was promised—when there is a fear that what has been promised has not been carried through, we should err on the side of being careful that Parliament should understand, accept and vote on those matters.
It is a matter not only of morality but of courtesy. I feel that we have not been given the kind of service which it is proper to ask of Ministers on this occasion. As one who supports these measures to a large extent, I am sorry that I shall be put in a position of not being able to support them simply by the mechanisms that have been presented. I suspect that quite a large number of my colleagues on this side of the House who have supported the Government would have been much happier in their support had the presentation been fundamentally different.
Lord Woolf (CB)
My Lords, I do not want to hark back to what I said earlier today, but when one comes to consider the powers given in Clause 79(1) and (2), it is important to bear in mind the special status of the matters which we have been dealing with in Part 4, to which I presume the final provisions in Part 5 are meant to relate. It is just a matter of discernment of the sensitivity of interfering with the basic means of the citizen to protect himself against excess of power by the Executive, among others. Where that is at stake, to give a power which allows supplementary provisions to be made by secondary legislation is wrong in principle. The Government, who I am sure are anxious to show that they are sensitive to the importance of judicial review and the independence of the judiciary—as they say so often—should feel uncomfortable with, at the same time, asking for a blank cheque with regard to the supplementary powers referred to in Clause 79(1) as well as those to amend, repeal or revoke legislation.
Lord Beecham
My Lords, it will come as no surprise to noble Lords that I support the amendment of the noble Lord, Lord Pannick, and the observations that both he and the noble and learned Lord, Lord Woolf, have made. It was interesting to reflect on the defence that the Minister made in Committee on these matters. He said:
“In particular, there is the sense, expressed by a number of noble Lords, that this particular Secretary of State and Lord Chancellor does not have sufficient regard for the rule of law and, essentially, there is a lack of confidence that he will exercise his powers in a way that Parliament would find satisfactory”.—[Official Report, 30/7/14; col. 1670.]
I think that summed up the position very well, not merely of your Lordships’ House but of the Joint Committee on Human Rights and many other bodies, not least the Divisional Court in the case about which we have heard and which is currently the subject on appeal.
The Minister, on that occasion, and in dealing with virtually the same amendment as that which we are now debating, described the situation created by the Bill—Clause 73—as “a pretty commonplace provision”. He said that,
“it is commonplace because noble Lords might like to know that Section 149 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 contains”,—[Official Report, 30/7/14; col. 1670.]
a similar provision, as does Section 53 of the Pensions Act 2014, and Section 20 of the Offender Rehabilitation Act 2014.
It is perhaps not surprising that that should be the case, given that it is precisely the same Government who have enacted all those measures. Whether there are antecedents under previous Governments, I do not know. Even if there were, the crucial point is that judicial review relates to the fundamental rights of the citizen. These other matters, important as they are—the noble Lord referred to other items of legislation last time—may well be significant, but there can be nothing more significant than the application of the rule of law and access to justice to test whether decisions have been made lawfully. That is an absolutely fundamental right. Even if there were precedents in respect of other legislation, that does not for a moment justify their extension to this very sensitive and important area.
The noble Lord, Lord Deben, has demolished any case for the robustness of the affirmative procedure as a process that allows effective scrutiny, and other noble Lords are, of course, aware of the limitations of the affirmative procedure. It is simply impermissible to frame legislation in such a way that the Secretary of State could act by secondary legislation without in any way defining what it might be, how far it might go, who might be affected and what it would do to the core principle we have debated for much of today about the right of the citizen to protection against unlawful decision-making by the Executive in any form—not merely the Government but other forms of executive agency. That strikes me as a very poor argument indeed.
The Minister is no doubt unable to depart from the stance that he has hitherto adopted. I, frankly, cannot believe that his heart is in it, whatever he will say at the Dispatch Box. It is a blot on the Government’s bona fides in this area to proceed with legislation in this form. Clearly, there is no way we can take it further tonight, but I hope that the Minister will report back to the Secretary of State and encourage him to redeem his reputation.
Lord Faulks
My Lords, the final speeches at this stage of our scrutiny of the Bill have very much echoed what was said in Committee. As I explained then, it is often necessary to give full effect to the provisions of an Act by making further provision in secondary legislation. Indeed, the noble Lord, Lord Pannick, acknowledged as much in his remarks in that debate. However, he and other noble Lords questioned, as they seek again to do in Amendment 178, the inclusion of a power to make supplementary provision.
Concern was expressed in Committee that the drafting would permit the power to be exercised to make provision about anything which the Lord Chancellor considered fell within the scope of the general area or subject matter of the Bill. This evening, the focus has been on judicial review. The noble and learned Lord, Lord Woolf, rightly stressed its importance and that of the independence of the judiciary. Of course I entirely accept that, and I hope that nothing I have said during the course of our debates has sought in any way to undermine those core principles of our system. However, Clause 79 refers to any provision of the Bill. As noble Lords will be aware, that is a final provision to deal with all the various provisions, which cover quite a wide field, it has to be said. Our debates have ranged over many areas of law and many provisions.
Lord Woolf
I am grateful to the Minister for giving way. Is he suggesting that Clause 79(1) would not as a matter of practice be applied in the case of Part 4?
Lord Faulks
No, I am simply saying that it is not exclusively directed at Part 4. It is to do with any provision in the Bill; it is a general provision for implementation. It would include it, but it would include anything else that came within the scope of Clause 79.
I explained in Committee the narrow construction given to such powers. The noble Lord, Lord Pannick, said that this was an extraordinary provision. The noble Lord, Lord Beecham, however, acknowledged that it found its way into other Acts of Parliament—apparently without demur from the Opposition, including the Coroners and Justice Act 2009, which, as the noble Lord will appreciate, was before this Government came to power. The suggestion that it is somehow the Conservatives or this Conservative-led coalition who have form for introducing such provisions is simply not correct. The Legal Aid, Sentencing and Punishment of Offenders Act and the Offender Rehabilitation Act contain powers to make supplementary as well as consequential and incidental provision. There are recent similar examples within the responsibility of other departments. Those cannot be levelled against the Lord Chancellor, who has been demonised in our debates. They include the Pensions Act, the Local Audit and Accountability Act and the Infrastructure Bill currently before Parliament.
Since Committee, we have considered carefully whether it would be sufficient to rely on that part of the power which is undisturbed by the amendment. Of course, the power is quite wide even without the supplementary provision. It is right to acknowledge, as I did in Committee, that there is a degree of overlap between the various concepts used and adjectives deployed. The fact that the existing powers agreed by Parliament included the power to make supplementary provision suggests that the overlap is not complete. For that reason, we think that the right course is not to amend the provision—with the reassurance as to the possible use of the power, which I mentioned. In other words, this will not be construed as giving any Minister the opportunity to make provisions which are not in the Bill—what he might have liked to have been in the Bill in retrospect—but construed very much in the way that such provisions are customarily construed.
Lord Beecham
In that event, is the noble Lord prepared to say that the supplementary power will not be applied to the judicial review provisions of the Bill?
Lord Faulks
I am not going to give any such undertaking from the Dispatch Box. It will be construed as a matter of statutory construction, and Parliament will view it if there is a change, but I am not going to limit any future Minister or future Parliament on what they want to do in any part of this legislation. This is a standard measure which the noble Lord’s colleague on the Labour Benches, the noble Lord, Lord Davies, though harshly critical of almost every provision in the Bill, said was absolutely standard in all legislation. He contrasted this with other provisions in the Bill which he found more offensive. He is unfortunately not in his place today to expand on his views.
Noble Lords have been concerned that such powers could be used unchecked. I accept, of course, that it can be difficult to determine whether a particular instrument falls within the power under which it is made, but that is the function of the Joint Committee on Statutory Instruments—which, as I am sure noble Lords will agree, is assiduous in reviewing secondary legislation, and, as part of its remit, specifically considers whether the power to make an instrument is wide enough to cover all that is in it.
I turn now to Amendment 179, which seeks to remove the power for any implementing provision to amend primary or secondary legislation in any way whatever, whether it falls within the category of “supplementary” or within any of the other categories mentioned in Clause 78. The noble and learned Lord, Lord Woolf, previously expressed some concerns about the meaning of this provision. In particular he asked why the drafting referred to both the repeal and revocation of legislation and why Clause 79(5) applied only to repeals but not revocations. I am happy to provide clarification on that score. Proper drafting practice is to refer to the repeal of primary legislation but to the revocation of secondary legislation. There is no practical difference between the two. Subsection (5) refers to repeals and not revocations because that provision is only about the enhanced parliamentary scrutiny for instruments which amend or repeal primary legislation, which I alluded to in Committee.
As I explained before, the removal of this provision from the legislation would be a serious constraint on the implementation of the Bill. It would, for example, prevent consequential amendments being made to primary legislation for provisions which have, despite the department’s best efforts, been missed. It may also impede the consequential amendment of existing secondary legislation, something which it is not normally appropriate to do in the Bill itself. Without such amendments it may not be possible to bring provisions of the Bill into force.
Amendments to existing legislation can of course only be made if they fall within the scope of the power. That means that they can only be made for the purpose of implementing what is already in the Bill. I would remind the House that any instrument which amended primary legislation would require approval both in your Lordships’ House and in the other place. I hope that the reassurance that I have already given about that will also go some way to alleviating concerns about the commonplace power in subsection(2), without which it may not be possible to properly give effect to parliamentary intentions.
I am sorry that my noble friend Lord Deben feels that there has been a lack of transparency in the way that the Government have approached this Bill, if that was what he was suggesting. I have endeavoured to assist the House in Committee and on Report. I am sorry that he, as a supporter, feels that we have not assisted him or the House sufficiently. It is a matter which I very much regret and I hope that it is not a view shared around the House by supporters of the Government. I hope that, with the further reassurance that I have given in this respect, the noble Lord will withdraw his amendment.
Lord Pannick
I am again grateful to the Minister. It is not much comfort that Clause 79 applies to a number of subjects, including judicial review, and that it is not the only subject of this odd clause. Nor is it much of an argument that provisions of this sort can be found in some other pieces of legislation. Perhaps we have not as a House adequately addressed the issues when those Bills came before us. That is no reason for not doing so now. Nor, if I may say so, am I much reassured by the Minister’s reliance on the comments of the noble Lord, Lord Davies of Stamford, in Committee. That is perhaps not the strongest point that the Minister has made during our debates tonight, although I recognise that the hour is late and some account can be taken of that. For my part, I still do not understand why the word supplementary is needed in this Bill.
Lord Faulks
Lord Faulks
“( ) Paragraphs 23 to 25 of Schedule (Mutual recognition of driving disqualification in UK and Republic of Ireland), and section (Mutual recognition of driving disqualification in UK and Republic of Ireland)(6)(b) so far as it relates to those paragraphs, come into force on the day on which this Act is passed.”
Lord Faulks
“(3A) Section (Reporting restrictions in proceedings other than criminal proceedings)(9) and paragraph 1 of Schedule (Reporting restrictions: providers of information society services) extend to England and Wales only.”
“( ) sections (Disclosing private sexual photographs or films with intent to cause distress) to (Meaning of “private” and “sexual”);”
“( ) Schedule (Disclosing private sexual photographs or films: providers of information society services);”
Lord Faulks