Lord Stevenson of Balmacara (Lab)
My Lords, this amendment probes the changes to Section 10 of the Outer Space Act 1986, which requires people carrying out certain space activities to indemnify the UK Government against claims arising from their activities. The clause makes provision for limiting the amount of the liability, which until now has been unlimited. We accept that for British companies considering projects in outer space, unlimited liability is very difficult to manage in terms of financing. Given the global nature of space work—no pun intended—this could result in work being lost to other countries. Indeed, one could say other universes but perhaps one should not.
We support the intention of Clause 13, which is to cap the liability at €60 million for the majority of space missions and to give the Secretary of State powers to vary this limit by secondary legislation. However, I have three questions for the Minister. Where precisely in the government accounts will the uncapped portion of the liability, which I assume is a contingent liability, be recorded? Under government accounting rules, does this not score against the deficit? If so, how much will that be in a typical year and will the individual amounts be recorded in the notes?
Secondly, the Explanatory Notes state that a minority of space missions will retain an uncapped liability. What criteria will be used to determine whether to cap or not? When the Minister responds, could he give me some more detail on that? If necessary, he may write to me if he does not have the detail to hand.
Thirdly, I note that the regulation of space activity is currently a reserved item, so it is not a matter for the devolved Administrations in Scotland, Wales and Northern Ireland. Therefore, has this issue been offered to the Smith commission as a possible devolution item? I am sure there would be wide support for Scottish space missions being covered by the new financial powers now available to Scotland or those that are likely to be available in the near future. As a rather more technical question, are there any Barnett consequentials? I beg to move.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, I thank the noble Lord for his amendment and his questions. The United Kingdom’s space sector contributes more than £11 billion a year to our economy, with an average annual growth rate of more than 7%. The sector directly employs more than 34,000 people. The Government are committed to the goal of raising the UK share of the projected £400 billion global space market to 10% by 2030, from approximately 6% currently. The proposed amendment to the Outer Space Act 1986 contained in the Bill is one of the measures designed to help us achieve this ambitious target.
The Outer Space Act 1986 is the legal basis for the regulation of activities in outer space carried out by organisations or individuals established in the United Kingdom, its Crown dependencies and certain Overseas Territories. The aim of the Outer Space Act and its licensing regime is to ensure compliance with the United Kingdom’s obligations under international treaties covering the use of outer space. One of these is the liability convention, under which the UK Government are ultimately liable for third-party costs for accidental damage arising from UK space activities. Section 10 of the Outer Space Act 1986 requires licensees to indemnify the Government against liabilities resulting from their space activities. This is an unlimited liability on licensees.
Since it is not possible to insure against unlimited liability, there is a requirement on licensees to obtain third-party liability insurance, usually to a minimum of €60 million for the duration of the licensed activity, with the UK Government a named beneficiary. If a claim were to exceed that amount, the Government could seek to recover the remainder under Section 10 of the Act.
As the noble Lord said, UK space operators have long argued that the unlimited liability placed on them is very difficult to manage in terms of financing. Furthermore, they say that licence conditions relating to insurance place them at a significant disadvantage. Given the global nature of the space industry, this could result in work being lost to countries outside the UK, in particular to countries where operators may not be subject to unlimited liability, such as the USA or France.
The UK Space Agency has reviewed the Act and identified areas where there is room for improvement. In particular, the treatment of contingent liabilities under the Act is now out of date compared with other space-faring nations and other United Kingdom sectors that have comparable contingent liabilities. A public consultation was undertaken and the majority of respondents were positive about the benefits of capping the unlimited liability requirement to €60 million for the majority of missions. The Government therefore decided to undertake a two-part approach to address the industry’s concerns. In the first part, we reduced the insurance requirement from £100 million to €60 million. This was well received by the industry. Clause 13, which we are discussing today, is the second part. It amends the Outer Space Act to cap the unlimited liability. This will be managed through the Outer Space Act licensing regime, as the amendments to the Act provide for the Secretary of State to specify the maximum amount of a licensee’s liability under the indemnity in each licence.
Our initial intention is to set the cap at €60 million for the majority of missions. Clause 13 gives the Secretary of State the power to set or vary this liability limit on a licence-by-licence basis. This will provide the flexibility to ensure that UK space operators remain competitive internationally without the need to undertake further legislative reform. For example, companies are now developing ever-smaller satellites, such as CubeSats. These offer lower-cost, and possibly lower-risk, access to space, and potential growth opportunities for the UK. For non-standard, high-risk missions we would retain the flexibility to increase the liability cap.
The UK Space Agency is currently reviewing its approach to this emerging class of satellite and this amendment will allow the Government to react quickly if a lower liability cap is appropriate for a particular mission, thereby ensuring the UK industry remains competitive. An impact assessment has been completed and the benefit to business is estimated to be in the region of £13.5 million over 15 years. Clause 13 is designed to balance the risks to the Government arising from UK space activity against the need to enable UK industry to exploit the opportunities available to them.
The noble Lord asked how these liabilities would be represented in the national accounts. I think I shall have to write to him about that. The noble Lord also asked what criteria would be used to determine which missions will be within the cap. As I suggested in my answer, there will be a risk-based approach; we feel it is appropriate to retain the flexibility to set the amounts under the amendment on a case-by-case basis.
The noble Lord asked about the devolution position. We are not planning any change in that area. He kindly said that it was a probing amendment. I hope that that will satisfy him and I ask him to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for a very full response and for answering two of the questions. The third one about devolution might bear further examination at some other stage, but I am sure that it is way above our respective pay grades, if there are any. On the other hand, I will look with interest at the letter that deals with the way in which these contingent liabilities—which I think the Minister confirmed they were—are going to be recorded in the accounts and whether they have any impact on the deficit. In the mean time, I beg leave to withdraw the amendment.
Baroness Thornton (Lab)
My Lords, I rise to speak to this amendment in place of my noble friend Lady Worthington. It concerns shippers of gas.
The existing regulations for gas importation and storage came into force in 2009 and applied to activities within the offshore area comprising both the UK territorial sea and the area extending beyond the territorial sea designated as a gas importation and storage zone—a GISZ. This clause alters the regulations that currently prohibit the use of an offshore installation for the unloading of gas without a licence.
Under the proposals, a third party wishing to unload their gas at an installation owned by and licensed to another party would not themselves need to be covered by a licence as long as the owners of the facility had the correct licensing documentation. The question that I should like to pose to the Minister concerns the related health and safety legislation and whether that would still apply. Can he tell us what enforcement regime is being considered, if one is necessary? What laws and processes has he put in place to ensure safety in this potentially dangerous area, and how will that enforcement appear on the ground? I beg to move.
Lord De Mauley
My Lords, the purpose of this clause is to correct an oversight in the Energy Act 2008. Sections 2 to 16 of that Act provide for a licensing regime governing the offshore unloading of natural gas from liquefied natural gas tankers to installations sited offshore so that it can then be transported to the UK by subsea pipelines. The intention behind the 2008 Act was to create a streamlined consenting regime for the construction and operation of such an installation, and the key purpose of the licence is to apply appropriate regulation to the construction and operation of the installation. The Secretary of State is responsible for granting licences for this purpose.
Clause 15 will amend an oversight which has led to a duplication of licensing requirements. As things stand, it is not only the company which owns and operates an installation that needs to hold a licence but a company that owns liquefied natural gas and is having it imported into the UK via the unloading installation. This is an unnecessary burden on the gas trader. Clause 15 will make an amendment to the Energy Act so that a person—the gas trader—who, by agreement, uses an unloading installation does not also require a licence provided that the installation is already operated by another person who has a licence for that purpose.
In answer to the noble Baroness’s specific question, all existing legislation in relation to the protection of the environment and health and safety considerations remains unchanged by this change to the Energy Act. I hope that that satisfies her and that she will therefore be prepared to withdraw her amendment.
Baroness Thornton
I thank the Minister for his answer, which has indeed satisfied me. I beg leave to withdraw my amendment.
Lord Grantchester (Lab)
My Lords, the relevant clause before us amends Part 3 of the Clean Air Act 1993; these provisions relate to smoke control areas. The Act requires the Secretary of State to publish lists of authorised fuels and exempted fireplaces that can be used in smoke control areas. Currently, this is done through regulations that are updated every six months. Clause 16 removes the need to issue regulations, replacing them with online lists to be published by the Secretary of State, which will be revised,
“as soon as is reasonably practicable after any change is made”.
The Secretary of State must keep an up-to-date and easily accessible authorised list on the gov.uk website.
This is a probing amendment. Will the Minister confirm that the criteria for selecting which fuels are considered safe and clean enough to be used will not change? If the clause is designed purely to speed up this process, it is one that we would thereby support. It should not be meant to change the terms or processes for the selection of fuels. It is important that it is made absolutely clear to people that this provision is about speeding things up, as opposed to making any back-door changes to which fuels could be used. I beg to move.
Lord De Mauley
My Lords, the Clean Air Act, which was first introduced to combat the smogs of the 1950s, designates smoke control areas within which it is an offence to emit smoke unless using authorised fuels and/or exempted appliances. Clause 16 amends the procedure by which the Secretary of State specifies authorised fuels and exempted fireplaces. They are currently specified by way of six-monthly statutory instruments, as the noble Lord explained. The clause will enable the Secretary of State to specify the products by publication of a list on the Defra smoke control web pages instead. The list will be published on a monthly basis and therefore reduce the delay that businesses and consumers currently face when new products are brought on to the market. The Act provides local authorities with powers to designate smoke control areas, within which it is an offence if smoke is emitted from a building’s chimney unless an authorised fuel or exempt appliance is being used. It is also an offence under the Act to acquire or sell an unauthorised fuel for use in a smoke control area.
The Secretary of State currently has the power under the Clean Air Act 1993 to exempt fireplaces by order and to authorise fuels by regulations, if she is satisfied that such products can be used without producing any smoke or a substantial quantity of smoke. Following assessment by technical experts to ensure compliance with eligibility criteria, the authorised fuels and exempt appliances are specified in statutory instruments which are made every six months. Under the current system, manufacturers face a delay of up to eight months between that assessment and bringing new fuels and fireplaces on to the market because they have to wait for that legislation to be made.
In answer to the noble Lord’s question, I confirm that the amendment made by this clause will not change the technical standards that products have to meet to be specified. Applicants will still be required to prove via testing that their products are capable of being used without producing any—or any substantial—quantity of smoke, thus keeping the inherent safeguards for air quality. The technical experts who currently provide advice with regard to the statutory instruments will continue to assess test results and provide recommendations to government with regard to the suitability of products for use in smoke control areas.
The details of specified products in the legislation are highly technical. The authorised fuel schedules are defined in technical terms covering matters such as the composition of the fuels, the manufacturing process, the shape of the fuels and their weight and sulphur content. Similarly, the exempted fireplaces schedules contain highly technical conditions of exemption relating to how individual fireplaces should be used and what fuels should be used in them to qualify for exemption.
It is worth noting that my department is not aware of the smoke control statutory instruments, which have been issued since 1957 and biannually since 1970, having been debated in Parliament on any occasion. The lists published on the internet will be subject to defined and robust audit procedures to ensure the accuracy of the data entered. These will include checks being undertaken and the lists being signed off by senior, responsible Defra staff. The process will enable specified product lists to be updated on a monthly basis.
In addition to including the same level of detail as the statutory instruments, the lists of specified products on the internet will also indicate the dates of new product specifications and of any variations or withdrawals. This is an improvement on the current system, where it would be necessary to compare lengthy SIs for consumers and local authorities to identify any changes. Therefore, there is an element of safeguarding for consumers as it will ensure that there is legal certainty with respect to which products may or may not be used at any given time. Members of the public without access to the internet will be able to request paper copies of the lists from my department.
The Delegated Powers and Regulatory Reform Committee initially expressed concern over the move from a legislative to an administrative process. However, I understand that it now finds the explanation provided by the Government with regard to the procedures for specifying products and the levels of control that will be in place sufficiently compelling in favour of the amendment—that is, the amendment made by the clause rather than the noble Lord’s amendment. It has, however, requested assurance that adequate steps will be taken to ensure that persons who have been lawfully using specified products do not end up inadvertently committing offences as a result of specifications being withdrawn. The Government would not want to create a situation in which people could inadvertently end up being in breach of the law.
A decision to withdraw an approval may take place only if evidence demonstrating that a product is not eligible for use in a smoke control area comes to light. Defra has advised that it is not aware of any specified products ever having been removed from the lists previously. Based on this information, while it is possible that a specified product may need to be withdrawn, it would be highly unusual. Given what I have said, I hope that the noble Lord will agree to withdraw his amendment.
Lord Skelmersdale (Con)
My Lords, before the noble Lord, Lord Grantchester, does that, and of course he will, perhaps I may say that for more than 10 years in your Lordships’ House I was a member of the Joint Committee on Statutory Instruments, although I am not now. With the volume of statutory instruments that goes through that committee, any diminution of those orders is obviously a good thing. Even though, until now, no complaints have been made about individual smokeless fuels or individual smokeless fuel burners, that does not mean that there never will be. In a parliamentary setting—in other words, if the order is to continue—that gives the opportunity for any Member of either House to speak to the order, whether it is an affirmative or a negative. My noble friend did not say which it was and, for the purposes of my argument, it does not particularly matter. When we have this list system, how can anyone, whether a member of the public or a Member of either House, question, for example, a new smokeless fuel?
Lord De Mauley
My Lords, the answer to that is that the inclusion in the published list will be information that the public need. They certainly can contact my department. Ultimately, it would remain subject to judicial review if it ever needed to come to that. The information will be public. All that will happen is that we will streamline the process so as not to clog up my noble friend’s committee.
Lord Grantchester
My Lords, I am grateful to the Minister for giving me those assurances and for his comprehensive assessment of the clauses in the Bill. I am very pleased that, from his assurances, the technical standards will continue to be monitored. On this occasion, I am happy to comply with the pleadings of the noble Lord, Lord Skelmersdale, and beg leave to withdraw the amendment.
Baroness Thornton
My Lords, I know that this is the amendment that everyone has been waiting for. This is in the Bill because, previously, there was a provision in European law to sell knitting yarn in specified quantities. That has been revoked, so the clause will remove the UK law that specified quantities in UK law and knitting shops will be able to sell yarn by whichever weight or length they choose. I hope that the Benches opposite will join us in celebrating the fact that this is a deregulation of European law, and that they will agree that this is a very good thing. I hope it is not just as a sop to UKIP that the Government are revoking this regulatory law. There is a celebration to be had here of European deregulation, which I hope everyone will agree is a good thing.
Whom did the Government consult about this? I know that there is no cost involved in the implementation of this deregulation, but will it benefit business and has there been an assessment of how it will benefit those very important people who run knitwear shops?
Lord De Mauley
My Lords, I entirely share the noble Baroness’s celebration of the deregulatory activity of our friends in Brussels. If she did not point this out, I will: this is by no means an isolated example. We have worked, and will continue to work, with our European colleagues to reform the law to make it more appropriate for business in the modern age.
Clause 17 on the sellers of knitting yarn is a good example of straightforward deregulation. It scraps the Weights and Measures (Knitting Yarns) Order 1988 and its requirement that non-prepackaged knitting yarn be sold only in prescribed quantities. It will give greater freedom to manufacturers and retailers to decide what quantities of yarn to sell, and will give consumers more choice. Consumer protection will be maintained. The Weights and Measures (Packaged Goods) Regulations 2006 will still require both prepackaged knitting yarn and yarn sold with an enclosing band to be labelled with net weight. This will ensure that consumers can continue to compare prices and quantities when choosing which one to buy.
Clause 17 also makes a consequential technical amendment to the Weights and Measures (Specified Quantities) (Pre-packed Products) Regulations 2009. This measure is entirely deregulatory and, as I think the noble Baroness said, the costs arising will be zero. Manufacturers and retailers will not be required to change their existing practices or introduce new sizes as a result of this new clause; it will be their choice whether to introduce any new sizes. She asked about consultation. This is part of the Red Tape Challenge and so was subject to consultation through that process. On that basis, I hope that she will agree to withdraw her amendment.
Baroness Thornton
I thank the Minister. If the Red Tape Challenge ran the consultation on this, and if it was anything like some of the other consultations that it has run, it probably involved three people. The clause is probably emblematic of the Act as a whole, which contains lots of minor changes that one hopes might lead to significant growth. On the basis of the Minister’s answer, of course I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, this has been a very good and interesting debate. It proves that we were wrong to bank on knitting yarn deregulation to be the star of today’s show, although I suspect that we might get a little more of a buzz when we get to byways and highways, and the green and black ones and all the varieties we are going to come to in later amendments. It is probably good that we are dealing with a range of issues today, and of course no debate could possibly be topped if it was addressed by the noble Baroness, Lady Trumpington, whose recollections and memories are all so important to us. We should bear them in mind as we think through this issue.
The amendment would change the Sunday Trading Act to allow an exemption for garden centres undefined. We oppose the amendment because we are concerned that there is significant scope for confusion in defining garden centres. A number of businesses could be included because they sell garden products. However, we also oppose it because we think that such a change would amount to an erosion of the law that has stood the test of time since 1994. That could cause confusion and undermine the legislation as a whole. As the right reverend Prelate the Bishop of St Albans said, the main thesis underlying the speech of the proposer of the amendment was the need to revisit and, if possible, deregulate the whole Sunday Trading Act. Repealing that without going through the process of discussion and debate which, as we have heard, was so much a part of the process of building the consensus around the 1994 Act is obviously something that we would have to think about very hard. This issue is about rights. It is about the rights of some people to keep Sunday special and of those who want to do more with their Sundays. We have, in the words of the noble Lord, Lord Rooker, to be careful about this and take our time to make sure that we get the balance right.
It is important that we get the definitions right. A garden centre can be anything from a very small operation selling plants raised locally to a large store within a much bigger department store. Most garden centres are now large operations that include, as we have heard, indoor and outdoor trading spaces, a wide variety of products, outdoor and indoor furniture, kitchenware, giftware, toys and games. It is hard to distinguish between these multifunctional garden centres and do-it-yourself stores that have large gardening departments, or even supermarkets that sell a wide range of plants and garden products in spring—or all year—sometimes in the car park surrounding the store. Without a definition, we do not know what we are talking about. An exemption for garden centres would therefore inevitably open up loopholes in the Sunday Trading Act and, as we have heard, large stores might seek to have themselves defined as garden centres, as some have already done.
As we have heard, the Sunday trading legislation is a compromise, but it is valued by retailers, employees and consumers. It gives people the opportunity to trade, work and shop on a Sunday but at the same time preserves a sense of Sunday being different from other days of the week. The Government have consulted on this issue three times in this Parliament and have found, as many other surveys have, that the laws have the support of the majority of the public—the latest report that I saw found that 77% supported the current laws—and the majority of the grocery retail community, which is a powerful alliance.
The amendment is premised on the view that if shops were to open for longer, it would be a good thing in terms of the so-called growth agenda, but longer opening hours do not mean that consumers have either the funds or the inclination to buy more goods. That was rather proved in the Olympic period when the Sunday trading hours extension, which was agreed by Parliament, coincided with a 0.4% decline in retail sales in that period. Sunday trading laws also currently provide an important advantage to small stores in a market that is heavily weighted in favour of big supermarkets. Indeed, the removal of Sunday trading legislation temporarily during the Olympics resulted, as we have heard, in a displacement of sales from small stores to large stores.
If the current laws were ever to change, they would need far more scrutiny and due process than is possible with this amendment. The existing Sunday trading laws were put in place after extensive consultation and several years of negotiation with interested parties to build the sort of consensus that has remained in place to date. Any wider change would need the same due process. It is clear that scrapping Sunday trading legislation is not pro-growth and will not deliver higher consumer spending. I hope that the Government will give this short shrift.
Lord De Mauley
My Lords, my noble friend’s amendment would relax restrictions on garden centres by adding them to the list of retailers exempted from the Sunday trading regulations. At present, they can already open for six continuous hours between 10 am and 6 pm. When my wife told me that she wanted a wheelbarrow on Sunday, despite the burdens of office, I was able to acquire one at my local garden centre within that six-hour window and attend church on Sunday morning. This measure would mean that garden centres could open at any time on a Sunday and open on Easter Sunday, from which they are currently prohibited.
Having thought about this carefully, the Government believe, in line with the noble Lord, Lord Rooker, the right reverend Prelate and my noble friend Lady Trumpington, among others—although I could not have put it as eloquently as they did— that the current Sunday trading laws represent a reasonable balance between those who wish to see more opportunity to shop in and sell from large shops on a Sunday, and those who would like to see further restrictions.
Those advancing the case for further liberalisation of the Sunday trading laws claim that there will be worthwhile economic benefits, including an increase in revenue for garden centres. However, as a matter of interest, the evidence to date is not entirely compelling. The ONS’s assessment of the liberalisation during the Olympics found no significant growth associated with the longer opening hours during the event. Instead, sales tended to be spread out further over the additional opening hours. Likewise, with this proposed liberalisation, customers may not end up spending more but merely spreading their spending over a longer period.
As my noble friend Lord Skelmersdale mentioned, the industry has talked of a potential £75 million increase in revenue but no details on the increased costs of extended opening have so far been forthcoming. As I have just mentioned, we do, however, have the useful example of the measures taken during the London Olympics. The Government suspended the Sunday trading laws during the Olympics in 2012 so that retailers could take advantage of the unique opportunity that the Games presented. The suspension of the law applied only to the specified period, from 22 July to 9 September 2012. There was an increase in footfall in London but this may merely have reflected increased visitor numbers to the country. An evaluation of the suspension of hours during the Olympics found that the overall sales increases seem to have been modest for large retailers, but that there was in fact a loss of business for the smaller retailers.
Lord Skelmersdale
Perhaps I may be allowed to interrupt my noble friend briefly. During the Olympics, there were of course many people up and down the country watching them on television and many people in the Olympic park who were watching the events live. Does my noble friend not think that that could be a reason for there being no real, material difference in sales during the relaxation which he was talking about?
Lord De Mauley
I am sure that my noble friend has a point and that there were complex factors in several directions. I merely state what happened because it is a recent example of a relaxation of the Sunday trading laws and it may be interesting for noble Lords to hear it.
My noble friend Lord Trenchard asked about the impact on smaller shops at that time. He may be interested to know that the Association of Convenience Stores reported a reduction of as much as 20% in sales over the eight-week Olympic period, and a 30% reduction in footfall. However, I acknowledge what my noble friend has said. During the peak month of August 2012, non-seasonally adjusted national data show that the amount being bought decreased by 2.4%, compared with that July. Over the same period, large stores saw a fall of 3.1% and small stores one of 0.6%. This more than outweighed the benefits to larger London-based competitors, which were the prime beneficiaries. I hope the Committee will understand that such results are at odds with the Government’s Small Business Strategy.
It is sometimes argued that the relaxation of constraints on large shops will provide benefits to their smaller brethren by bringing people into the town or shopping centre but most garden centres—or most that I have been to, anyway—are located away from other retail centres. They are out of the centres of towns, so that argument does not apply to them. It is not clear what makes garden centres a special case in the same way as those currently included on the exemption list. Despite what my noble friend Lord Trenchard said, it is not as though people will have a sudden medical need to visit a garden centre, as they might have with, for example, a pharmacy.
Moreover, garden centres have increasingly diversified their products, as the noble Lord, Lord Christopher, said. Many will now sell furniture, pets, food, books, toys and stationery. As such, garden centres are in direct competition with other large stores, which are still constrained by the Sunday trading rules and it would be difficult to justify giving them preferential treatment, particularly so at a time when we are looking at ways to regenerate local high streets. Additionally, there is no obvious mood for change among the public. In a recent study, 77% were found to be happy with the existing rules while, of those who were in favour of change, 56% wanted further restrictions rather than liberalisation.
This exemption would also enable garden centres to open on Easter Sunday. This would be contentious for those who see Easter Day as a highly important religious day, when families should be free to be together. Garden centres say that this is the middle of their busiest period. However, they are already able to open as they wish on three of the four days over that bank holiday weekend. Some smaller family-run garden centres welcome the opportunity to close and to give staff the day off on Easter Day in the knowledge that none of their competitors will be open. Removing that constraint might distort the playing field in favour of bigger national garden centre networks. Consumer spending is such that longer opening hours are unlikely to achieve additional sales.
I am aware of the various campaigns on Sunday trading and I will continue to monitor the response of the public and the market, but we see no significant change in the situation that might suggest the need to reconsider Sunday trading in relation to garden centres or more broadly. I hope that is clear enough to the noble Lord, Lord Judd. On that basis I hope my noble friend will withdraw his amendment.
Baroness Hayter of Kentish Town (Lab)
My Lords, I move Amendment 12 but also give notice that I will oppose the Question that Clause 18 stand part of the Bill. I hope that the Government will accept, as a minimum, Amendment 12, even if they cannot accept the bigger—and in my view better—alternative, which is to drop the clause altogether.
The Government have come up with the rather strange idea of partial authorisation for insolvency practitioners. This would split in two the regulation of what is quite a tiny profession—fewer than 2,000 people. You would then have a profession for company insolvencies and a different one for individual insolvencies. On the basis of no evidence whatever, the Government have decided, in effect, to dumb down the specialist profession of insolvency practitioners. By doing so, they risk helping the larger insolvency firms at the expense of smaller companies, over 80% of which do not believe that they would get much benefit from lower training costs. Indeed, 90% said that they would not train a partial licence holder. The Government admitted to R3, which is the professional organisation involved, that the clause was not being introduced to fix a problem and they have cited no evidence of any undercapacity in the market or any evidence of complaints about the current system. The Joint Committee on the draft Bill, which was ably chaired by the noble Lord, Lord Rooker, was worried about the lack of stakeholder consultation on the issue. Subsequent discussions with the industry have not alleviated any of its concerns.
Clause 18 would allow insolvency practitioners to undertake corporate bankruptcies, which will almost always affect the financial status of individuals involved, with absolutely no training or qualifications relevant to the needs of such individuals when they also face insolvency. Indeed, insolvency practitioners very often do not know at the outset of a case, particularly with micro-businesses, whether they are dealing with a corporate bankruptcy or with a personal insolvency, given the involvement of personal guarantees and the nature of the creditors. The clause would harm small firms, two-thirds of which do both corporate and personal insolvency, just when the Government’s small business strategy is meant to be helping small firms. They do not like this one. Furthermore, it would add enormous expense to the profession, as it would require the development, the delivery and the oversight of new and additional systems of exam qualification. This would be on the basis of the Government’s own estimate that there will be about only 100 such partial licences.
It is hard to imagine how the Government dreamt up this clause. There is no significant demand—we could not find any—for any change. The only suggestion ever to have been around has been for a personal insolvency-only regime, but never for a corporate-only insolvency regime. There is no evidence of there being a group of people who would just love to be IPs and who are dying to enter the market. Indeed, a number of firms are reducing their workforce and there is no evidence for the argument that we need more.
The Insolvency Lawyers’ Association has questioned the logic of operating this proposed two-tier, mixed system. Indeed, in a way, it would be a three-tier system because some insolvency practitioners would be licensed to do individual insolvency only, some would opt to do corporate insolvency only and some would qualify to do both. R3, the professional body, which knows rather a lot about insolvency, has serious concerns about this change. It considers that partial licences would have a negative impact on business and individuals seeking financial advice, as well as on the quality and competitiveness of the UK’s insolvency regime, which, as I am sure the Minister knows, is assessed by the World Bank as being one of the world’s best.
If we look across all the professions, be they doctors, lawyers or accountants, we see that they always start by getting their initial qualification through a broad training that crosses the whole area of their discipline and they then go on to specialise. The Government seem to want to carve insolvency practitioners out of this, making them jump directly to a specialism. Even worse, it could lower standards. Jenny Willott MP, speaking as a Minister in the other House, said that partial licences will reduce a little,
“the high bar on entry to the profession”.
That sounds to me like a dumbing-down.
We are talking about people’s futures—whether jobs are to be saved or a company liquidated, whether it can be sold off so that some of those jobs can be retained, whether individuals will be made bankrupt, whether creditors will get back money that they have already sent to the insolvent company, whether someone with unsupportable debts can be helped to find a way through or whether a company can be sold to someone else who can keep at least some of it running as an ongoing concern. These are big issues that affect people’s futures.
The clause is misguided; it is unnecessary; and it has been criticised by the profession and other stakeholders. The Government would do well just to withdraw it gracefully rather than be forced to do so. My guess is that the clause would never be commenced and that wiser heads would finally prevail. The provision may be in law but I doubt that it would ever be put into practice, so better perhaps to lift the threat now. I beg to move.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, I thank the noble Baroness, Lady Hayter, for moving her amendment and speaking to Clause 18. When I came into the Grand Committee—I think that it was during the debate on Amendment 10—I saw the Benches absolutely crowded and I thought, “I didn’t realise insolvency practitioners commanded such interest, not even on a Sunday”.
The noble Baroness made some important points, which I will certainly seek to address, although I think that I will disappoint her, because neither do I feel able to indicate that the Government will accept the amendment nor do they have an intention to withdraw the clause. As she pointed out, Clause 18 will amend the law by introducing a new regime for the partial authorisation of insolvency practitioners. In future, those wishing to become insolvency practitioners will be able to qualify in relation to personal insolvency cases only, in relation to corporate insolvency cases only or in relation to both, as is currently the case.
The effect of the noble Baroness’s amendment would be to allow insolvency practitioners to be partially authorised but only in relation to individual insolvency. As I will come on to when I discuss the clause itself, partial authorisation will remove barriers to entry for those who wish to specialise in just the one discipline. However, I make it very clear that it is not the Government’s intention to restrict this opportunity only to those who wish to deal with individual insolvency. We believe that there should be an opportunity to specialise in individual insolvency, in company insolvency or, and as things stand at the moment, in both. There is no compulsion here; it would be the choice of those wishing to pursue a career as an insolvency practitioner.
The insolvency body R3, to which the noble Baroness referred and which, I acknowledge, is opposed to partial authorisation, has told the Government that 27% of insolvency practitioners work in firms that specialise in corporate insolvency. This compares with 5% who work in firms that deal only with individual insolvency.
The noble Baroness said that take-up of the measure will be small and she asked why we should proceed with it. Existing insolvency practitioners who have gained authorisation for both personal and corporate matters want to continue to cover both areas, but that will not necessarily be the case for new entrants. The Government believe that partial authorisation will be attractive to a minority within the profession who, by focusing on a specific sector or on specific clients, will find that partial authorisation allows them to take appointments in the types of insolvencies that they deal with.
We believe that the changes proposed in Clause 18 will result in lower entry costs into the profession for those who seek partial authorisation and that they will, over time, increase competition and lower fees. That, in turn, can lead to improved returns to creditors in insolvencies. That was certainly my experience when I was a Member of Parliament dealing with companies and small businesses that were often at the receiving end when larger companies went into administration. Very often, it is small businesses that suffer the most when there is an insolvency. If we can improve returns to creditors, including many small businesses, that must surely be a good thing.
It is important to have highly skilled professionals. While we are talking about partial authorisation, company insolvency practitioners and those engaged in personal insolvency matters require a full authorisation. I cannot accept what the noble Baroness says about this being a dumbing-down. Those who pursue that one part of the profession will have a full qualification and therefore I cannot accept that this is about lowering standards. It is important to have highly skilled professionals. We must not forget that imposing unnecessary regulatory burdens on entry into a profession itself has a detrimental impact, particularly on the public, who pay for the services of such professionals.
The noble Baroness mentioned exams and seemed to think that there would be an increased cost. I suspect that if someone is aspiring to become an insolvency practitioner and there are fewer exams to take, there will be a lesser cost for that individual. With regard to exams, I make it clear that the Insolvency Act 1986 provides that the recognised professional bodies that authorise and regulate insolvency practitioners must have in place rules to ensure that insolvency practitioners meet acceptable requirements in relation to education, practical training and experience. A memorandum of understanding between the Secretary of State and the regulators that underpins the Insolvency Act requirements provides that applicants for authorisation must hold a pass in the Joint Insolvency Examination Board exams. I assure the Committee that officials will work with the profession to modify the current exam structure to ensure that partially authorised insolvency practitioners can demonstrate a broad knowledge of both disciplines. The exam structure will obviously have to change, but I cannot see that it is going to lead to the greatly increased costs that the noble Baroness indicated.
As I said, Clause 18 is not about lowering standards; it is about setting appropriate standards. We are asking: why should someone who deals with only personal bankruptcy and individual voluntary arrangements have to know about the finer details of corporate administrations, unless of course they choose to do so? If they do, then of course that choice will still be there. For those insolvency practitioners who at present choose to practise only in corporate or only in personal insolvency, the time and money spent studying an area in which they do not practise will add little or no value to the service that they offer their clients.
Lord Sharkey (LD)
My Lords, to take up some of the points made by the noble Lord, Lord Rooker, the Joint Committee noted that there appeared to be some confusion about the extent of consultation on this clause. We recommended that there be further consultation on what was then Clause 9. In their response to the Joint Committee’s report in January this year, the Government took the opportunity to repeat the arguments in favour of the clause in some detail. They also stated in paragraph 116 that,
“following the Committee’s recommendation, the Government is inviting any further views on this Clause during the passage of the Bill”.
How did the Government go about soliciting these further views? Who did they invite to give those views and what was the general burden of any of those responses that were made after the Government’s response?
As things stood when the Joint Committee reported, we did not feel that there had been sufficient consultation, as the noble Lord, Lord Rooker, was saying, to enable us to express a firm view on the merits of the clause. I note what the Government have said, but I also note the case put forward by R3. In particular, I note R3’s view that partial licences are not being introduced to fix a problem. It claims that there is insufficient evidence of undercapacity in the market and no evidence that the current regime causes concerns about the quality of the advice given. Essentially, it asserts that the system is not broken and asks why the Government are trying to fix it.
The Government, in their turn, advance two reasons for reform. The first is that the partial licences will benefit insolvency practices of all sizes and the personal insolvency market as a whole. R3 has advanced survey data that it says refutes these claims. Secondly, the Government say that partial licences will increase competition, decrease training costs, lower fees and deregulate access to the IP profession. R3 maintains that there is no evidence of the need for more IPs; in fact, it claims that the market is oversupplied. It also challenges the Government’s other assertions.
All this illustrates the position that the Joint Committee found itself in during December. There are competing claims, somewhat unevidenced, and a narrow consultation base, while the Government have not provided an impact assessment on this clause. It would be easier to make a judgment on the merits of the clause if we knew more and had more evidence. There is a strong case for the Government to agree to further substantive consultation on this issue before we reach a conclusion.
Lord Wallace of Tankerness
My Lords, I say first to the noble Lord, Lord Rooker, that I did not mention that the provision had started life under the previous Labour Government because I did not know that until he informed me of it. Of course, not everything that the previous Labour Government did was wrong, as I recall from going through the Lobbies at times in your Lordships’ House. I will take the point that the noble Lord makes and find out just who was behind that, if I might make that inquiry.
There were some specific questions asked and I will certainly respond in writing to those who have contributed to this debate. However, it is also important to make the point that existing insolvency practitioners are, by the very nature of their business and profession at the moment, people who are qualified in corporate and personal insolvency. I understand that my noble friend Lord De Mauley has in the past been an insolvency practitioner and he has indicated that these are two different specialisations. Clearly, however, the practitioners are duly qualified and may well question why everyone coming behind them should not go through the same route that they followed.
It may well be, as we believe, that aspiring insolvency practitioners have shown a desire for some partial authorisation. A survey of members of the Insolvency Practitioners Association showed that non-IP members were in favour of this. It would be wrong to go so far as to say that there is an element of protectionism here. However, one of my arguments is that we are looking at people who want to come into the profession—by their nature they are not already there, giving their views—and there are many benefits to allowing that specialisation.
Since I stood up, I have received a further response to the noble Lord, Lord Rooker. I understand that this clause is a development of a policy started under the previous Government. An earlier version of it was proposed for inclusion in a legislative reform order, although the measure was withdrawn and, in the event, the order did not proceed. I will not to try to decipher this note further in case I get it wrong—I will write to the noble Lord.
With regard to the question from my noble friend Lord Sharkey, on 23 January the Government, on the recommendation of the Joint Committee, launched further consultation on whether any changes were required to what is now Clause 18. Responses were considered and included representations from insolvency practitioners, creditor representatives and others. I am not sure whether the responses have been published or whether there is any intention to do so, but perhaps I could write further to my noble friend and give him a flavour of the responses before Report.
My point is that we are dealing with people who are looking to the future and may aspire to a career as an insolvency practitioner but who do not particularly want to take on the whole gamut of it, preferring to specialise in one form or the other.
Baroness Hayter of Kentish Town
My Lords, perhaps I should mention—though it is not an interest, being from so long ago—that I was a member of the Insolvency Practices Council, which oversaw insolvency practitioners. I was there as a consumer, not as a trade union member, of the noble collection of insolvency practitioners.
One of the strange things is that this is a deregulation Bill, but it is going to create a new system of exams, oversight and monitoring. That is somewhat odd in a deregulation Bill, but that is beside the point. The assertion is made that it will attract new entrants, without any evidence. The assertion is made that IP fees will be reduced, without any evidence. The assertion is made that training costs will be reduced. Actually, the main training provider, BPP, has to apply its overheads across the exams, so the cost per exam will go up even if you do two exams rather than three. These are assertions, not evidence.
When I was involved in this area—this may answer the question posed by the noble Lord, Lord Rooker, though not to me—there had been suggestions about a personal insolvency-only regime, never a corporate insolvency-only regime. The idea was that people working in debt management companies in particular might want a personal insolvency-only regime. However, despite the fact that I spoke on this at Second Reading and have had lots of lobbying and approaches from everyone else, none of the debt counselling people has approached me to support the idea of a single licence. There has been silence on that. However, it explains why the amendment would be to allow a personal-only insolvency regime. None the less, I remain worried about the idea of a corporate-only insolvency regime, whereby people dealing with corporates would have no training in personal insolvency. It is an issue that we may want the Government to reconsider, but for the moment I beg leave to withdraw.
Lord Grantchester
My Lords, public right-of-way legislation is complex, often archaic and certainly plentiful. Looking around the Committee today, I notice that there may well be previous Ministers of Agriculture in the Room who put some of this legislation through. It all builds into an important picture that needs some clarity, and I am very pleased that certain aspects of this are in this Deregulation Bill. They cover important aspects of the Wildlife and Countryside Act 1981, the Highways Act 1980 and the Countryside and Rights of Way Act 2000, building on the National Parks and Access to the Countryside Act 1949.
I declare my interest from the register as an owner of farmland in Cheshire over which there are a number of footpaths. These are not controversial; they are intermittently walked and do not cause disruption to farming operations. However, across the country the situation is considerably less clear. Under the 1949 Act, local authorities are required to produce a definitive map and statement of public rights of way. This is taking some time and continues, such that in the Countryside and Rights of Way Act 2000 a cut-off date of 2026 was introduced, after which routes pre-existing 1949 cannot be added to the definitive map.
Not only is the process of registration slow and complex, certain elements of the legislation have yet to be implemented and are considered to be flawed. In 2008 a stakeholder working group was set up by Natural England with membership drawn up from public access user groups and land management and business interests, including farming, and the local authorities. In 2010 it produced the Stepping Forward report, which proposed the changes that we are discussing today around the procedures introduced in the various legislation.
The stakeholder working group is to be commended on finding and building consensus around the main interested parties to recommend these changes as a package, to streamline the process and to make quicker progress, even though there may appear to be plenty of time until 2026. Some of the recommendations will no doubt help farmers to manage access safely, others will help to bring clarity to user groups and a large number will aid local authorities in bringing forward proposals to reduce confrontation and red tape. The approach from these Benches is to retain this consensus and build on it. The stakeholder working group is still continuing and, with these proposals agreed and implemented through the Bill, it can press forward in addressing further problems and bring these forward as quickly as possible.
Meanwhile, there is the task of following up on these proposals. The amendment before the Committee today is to do just this and annually publish a report on how effective this process has now become, how much quicker applications have become to deal with and any unforeseen issues that have arisen. The whole of Schedule 7 defines the new speedier and more streamlined process, but will it find snags? For example, paragraphs 4 to 6 of the schedule change the procedure for initiating action in the magistrate’s court. That procedure has charges applied to it, and these charges for initiating court action have increased substantially. Will this become a deterrent to the effective working of this provision?
Clause 26 opens the way for full cost recovery from a landowner seeking an order. The effect will need to be carefully monitored. Clause 24 revisits the CROW Act 2000 to correct those perceived flaws. It is important that the impact of this so-called right to apply for orders, both on local authority workloads and on the network itself, is properly monitored. The amendment would enable this and other measures to be monitored and their operations made transparent to ensure that the stakeholder working group is working on the right track.
One effect of the amendment would be to continue to build the esteem of the stakeholder working group and encourage it to continue trying to seek consensus on the most controversial aspects of our rights of way. It should be an important aid to the Minister in communicating the effectiveness of the process to draw up a definitive map and statement of public rights of way, and he should welcome it. I beg to move.
Lord De Mauley
My Lords, before I start, like the noble Lord, Lord Grantchester, I should declare an interest in that I am the owner of land over which pass public rights of way.
Perhaps I may also say by way of preamble that the rights of way reforms package, of which Clauses 21 to 27 will form the basis, is founded on the recommendations of the independently chaired stakeholder working group on unrecorded rights of way. The group consists of 15 members—five from each of the key sectors: local authorities, landowners and rights of way users. It contains members of the Ramblers, the British Horse Society, the National Farmers’ Union, the Country Land and Business Association, the National Association of Local Councils and the Local Government Association. I may say a bit more about that in a debate on a later group of amendments.
Amendment 13, in the name of the noble Lord, Lord Grantchester, seeks to ensure that the Government monitor the success or otherwise of the rights of way reform package after implementation. That is a worthy objective and one with which I have no disagreement. That is why the Government have already given a commitment that they will arrange for the stakeholder working group to carry out a review. We said in the other place during the Committee stage that,
“the stakeholder working group’s advice will be sought on the constitution of the review panel, as was set out in another of the group’s proposals. The panel will be able to advise on how well the reforms are working and whether any further measures need to be taken before the cut-off date”.—[Official Report, Commons, Deregulation Bill Committee, 6/3/14; col. 238.]
While it is important to monitor the implementation and effectiveness of the rights of way clauses, it seems ironic to use a deregulatory Bill to impose on government and, in turn, on local authorities the statutory burden of making a formal report to Parliament. The additional bureaucracy that such a formal reporting mechanism would create runs contrary to the aims of this Bill. Indeed, the proposal runs contrary to the recommendations of the stakeholder working group itself. In its proposal 21, the group said:
“A stakeholder review panel should be constituted after implementation of the Group’s proposals to review progress with recording or protecting useful or potentially useful pre-1949 rights of way before the cut-off”.
Since the stakeholder working group has shown itself to be so effective in working together to develop solutions, I suggest that it would be wrong not to entrust the group with advising on the most appropriate mechanism for carrying out a review of the reforms. It is in the interests of each of the stakeholders on the group that they do so. On that basis, I hope that I can persuade the noble Lord to withdraw his amendment.
Lord Grantchester
I thank the Minister for certain of those clarifications but I should like to press him on the further work of the stakeholder working group. While the amendment limits the annual assessment to a report on the measures in the Bill, it would be helpful if the Minister could clarify any further aspects of this group and how he sees further progress being made. Having confirmed that it will continue, does he believe that its membership is sufficiently widely drawn to tackle more controversial aspects, and will the group be encouraged to come forward with proposals in a timely manner? Even though this is a long way ahead, we are aware of the urgency to make progress, as we will see in debates on further amendments that will be coming up shortly. It would be extremely interesting to hear how the working group may approach the more controversial aspects. The noble Lord should be mindful that we may well return to this at a later date, having considered further debate on the amendments. We reserve judgment about how appropriate it is that the Deregulation Bill should include a proposal to monitor its work going forward.
Lord De Mauley
I think that I have explained that the stakeholder working group is quite broadly constituted in its membership. It has tackled some pretty contentious issues successfully, and I hope the noble Lord will accept that. In terms of how it will work as this goes forward, once all the rights of way reforms have been put in place in both primary and secondary legislation, that group can start preparing a review. Of course, any review by that group will be published by Defra and put on its website. I hope that that helps the noble Lord.
Lord Grantchester
I thank the Minister for his further clarifications. While it is a complex and controversial area that we may revisit at a later stage, in the mean time, I beg leave to withdraw the amendment.
Lord De Mauley
My Lords, this has been a full and interesting debate and I am grateful to my noble friends who have moved amendments and to all noble Lords who have spoken to them. I will begin with Amendments 14 to 16, in the name of my noble friend Lord Skelmersdale. The rights of way reforms package, of which Clauses 21 to 27 will form the basis, is founded on the recommendations of the independently chaired stakeholder working group on unrecorded rights of way. That group, as I explained earlier, consists of 15 members: five from each of local authorities, landowners and rights of way users. The group was founded in 2008 with a remit to develop a package of reforms to facilitate completion of the definitive map and statement—the local authority’s legal record of public rights of way. This is a daunting task on a topic where views are highly polarised, but it is a task in which they succeeded.
Of key significance is the fact that the group has unanimously agreed the key proposal that the 2026 cut-off date—after which it will no longer be possible to record pre-1949 rights of way—should be implemented. However, this is subject to the caveat of what my noble friend Lady Parminter described as a finely balanced package of reforms being implemented as it stands and not being tampered with or cherry-picked.
My noble friend’s amendment seeks to address the issue of intrusive public rights of way. This is an issue to which the Government have been giving careful consideration in discussion with the rights of way stakeholder working group and members of the Intrusive Footpaths campaign. The Government acknowledge my noble friend’s point that for householders and farmers an intrusive footpath can have a substantial impact on their quality of life or on their ability to run a business, and several noble Lords have spoken about that. It can cause severe difficulties and there are a significant number of cases where people have been through years of considerable inconvenience and stress. We recognise that there is a need to find an acceptable solution. That is why the Government have worked with the stakeholder working group to include measures in the rights of way reforms package that will make a significant difference to the way that requests for diversions and extinguishments of rights of way will be dealt with by local authorities. I am confident that they will help to alleviate the difficulties experienced by those affected.
The Bill proposes to implement the right-to-apply provisions introduced by the Countryside and Rights of Way Act 2000. These provisions give landowners the right to apply for diversion or extinguishment of a right of way. Through clauses in the Bill we are amending them in such a way as to enable people with rights of way through their gardens to make applications. These provisions will come into force, along with the rest of the reforms package, when all the elements of the package are in place. We are working towards implementation by April 2016. With the right-to-apply provisions in place, local authorities will no longer be able to ignore requests for rights of way to be moved or extinguished, or to dismiss them out of hand. They will be obliged either to make an order or to be prepared to justify their reasons for not doing so. There is also—
Lord Skelmersdale
My Lords, before my noble friend leaves that point, can he explain why the right to apply automatically implies the right for the local authorities to consider? I just cannot see it.
Lord De Mauley
My Lords, I was some way from leaving that point. I will get there in a moment. There is also the question of whether any orders made would be confirmed. The right to apply provisions will be supplemented by guidance that will effectively act as a presumption to divert or extinguish public rights of way that pass through the curtilage of family homes where privacy, safety or security are a problem.
Under the right to apply provisions, any appeal made by an applicant, whether it is because the local authority has refused an application or because it has failed to confirm a diversion order it has made, will be submitted to the Secretary of State for a decision. The Government will therefore be in a prime position to promote implementation of the revised policy set out in the guidance by setting a clear precedent in those decisions. A draft of the guidance has been deposited in the Library of your Lordships’ House. We recognise that it needs further refinement, which is why it remains open for comment.
The rights of way reforms will also give local authorities more scope to deal with objections to orders themselves rather than having to submit every single opposed order to the Secretary of State as at present. The combined effect of these provisions will offer the prospect of real improvement for those people experiencing problems with a public right of way across their property. We want to evaluate how the measures work out in practice before seeking to add to the legislative burden.
The issue of intrusive public rights of way is very emotive. I understand why it arouses strong feelings and why those affected want something done. While putting a presumption on the face of the Act might seem desirable, the new clauses would create regulation where it is likely to prove unnecessary and create more problems than it resolves. The clauses proposed by my noble friend would impose a duty on each local authority to divert or extinguish every right of way that passes through the curtilage of a residential dwelling unless they are satisfied that the privacy, safety or security of the premises are not adversely affected by the right of way and extinguishing it would not remove access to a vital local service or amenity not otherwise reasonably accessible.
Carrying out a survey to identify rights of way that fulfil these criteria would place a significant new burden on local authorities. The proposed clauses would also have the effect of removing the tests in current legislation that ensure that the public interest in the right of way is safeguarded where that right of way passes through the curtilage of a residential dwelling. My concern is that the proposed new clauses do not strike the right balance between public and private interests, which is critical to the agreement reached over the guidance by the stakeholder working group. I invite your Lordships to agree that legislative solutions imposed without a consensus or consultation could result in more disputes and legal challenges.
As the draft guidance on diversions and extinguishments has been developed by the stakeholder working group, it is founded on a strong stakeholder consensus, which means that it is likely to be complied with. We firmly believe that solutions based on agreement and mutual interest result in less conflict, as several noble Lords have said, and less need for enforcement in the long run. The stakeholder working group consensus is the result of many years of hard work and difficult discussions between stakeholders who have commendably agreed to put their differences to one side and work towards solutions that are for the common good. We should not risk putting all that progress in jeopardy by adopting measures that are not founded on that agreement. These proposed new clauses would impose a significant new burden on local authorities and all but remove the current public interest tests.
My noble friend Lord Skelmersdale questioned the right to apply and whether the guidance would have the intended effect. There is pretty clear agreement among stakeholders that the major difficulty for landowners is in getting local authorities to make a diversion or extinguishment order in the first place. Our plans to implement and extend the scope of the right-to-apply provisions for such orders will overcome this, because landowners will be able formally to apply and appeal if the authority refuses to make an order or fails to respond.
The other hurdle is getting orders confirmed. However, according to Ramblers, which keeps accurate records of these matters, of the slightly in excess of 1,200 diversion orders which have reached a conclusion in the last three years, 94% did not attract any objections. Of the remaining 6%, less than 1% were not confirmed following submission to the Secretary of State. I am not saying that 100% of proposed diversions should necessarily go through. Clearly, that would depend on the proposal’s merits. However, given those statistics we believe that the combination of the right-to-apply provisions and the guidance will have the desired effect and that we should not rush to legislate before seeing how these measures work out in practice.
My noble friend Lord Skelmersdale asked why a landowner should have to meet the entire cost of a diversion and I understand his concerns. Where the diversion or removal of an existing right of way is for the benefit of the property owner rather than for the public, I think it is not unreasonable that the property owner should meet the cost. Authorities will not be able to recover more than the actual costs and would have to make clear exactly what was covered by those costs. In addition, as part of the rights of way reforms package, we will be introducing a framework within which local authorities will be required to make it clear to landowners what each stage of the process will cost and what they will be getting for that money.
We expect the costs of making alterations to public rights of way to reduce as a result of the reforms package as a whole, specifically through the following measures: significantly reducing the cost of publicising orders; giving local authorities more discretion to disregard spurious or irrelevant objections; making the exchange of written representations the default for dealing with opposed orders, rather than a public inquiry; and encouraging local authorities to enable landowners to make their own arrangements for undertaking some of the work normally undertaken by the local authority.
My noble friend also asked about the likely average costs to a landowner of diverting or extinguishing a right of way. Those costs will of course vary considerably across the country. They will depend on whether the relevant order is objected to and whether the matter goes to a public inquiry. Information we have gathered through our work gives us an estimated average cost, over a range of circumstances, for making and implementing a legal order to divert or extinguish a public right of way. The least cost is where an order is unopposed or written representations are used to deal with any objections; these average less than £2,500. Costs increase to an average of more than £8,000 where a public inquiry is held and experts and barristers are appointed.
I turn to my noble friend Lady Byford’s Amendment 17. This proposed new clause would give the Secretary of State the powers to issue statutory guidance on the making and confirming of a range of orders to divert or extinguish public rights of way. I recognise that the objective here is to give a statutory basis to the draft guidance on the diversions and extinguishment of rights of way that has been agreed by the stakeholder working group and placed in the House’s Library. We developed this draft guidance in collaboration with the stakeholder working group. The guidance sets out the proposed government policy on the diversion or extinguishment of rights of way that pass through gardens, farmyards and commercial premises. It effectively acts as a presumption to divert or extinguish public rights of way that pass through such properties where privacy, safety or security is a problem and exhorts confirming authorities to act on that presumption, wherever possible.
We have great sympathy for those people who experience problems with public rights of way that pass through the garden of their family home. We are on track to implement the right-to-apply provisions introduced by the Countryside and Rights of Way Act 2000, which give landowners the right to apply for diversion or extinguishment of a right of way. Through clauses in the Bill, we are amending the provisions in such a way as to enable people with rights of way through their gardens to make applications under those provisions. With the right-to-apply provisions in place, local authorities will no longer be able to ignore requests for rights of way to be moved or extinguished, or dismiss them out of hand. They will be obliged to make an order or justify their reasons for not doing so, on appeal to the Secretary of State.
There is of course also the question of whether any orders made would be confirmed. Under the right-to-apply provisions, the Secretary of State will be the confirming authority for all disputed orders. Government will, as I have said, therefore be in a prime position to promote implementation of the revised policy set out in the guidance, by setting a clear precedent.
As I have said, getting broad agreement on this guidance is a fairly significant development. Because it has been developed by the stakeholder working group, there is a strong consensus on it. I am sure that the Committee will agree that new measures such as this are more likely to prove successful in practice because they have been introduced through agreement among stakeholders, regardless of whether they have statutory backing.
Baroness Byford
Before my noble friend responds to the Minister, I wonder if I might raise two issues with him. I thank him for his full response to my two amendments. Do I understand the Minister to say now that the stakeholder working group has not agreed with the two amendments that I tabled? My understanding was that they had been agreed to, and it is important that we have on the record whether or not they were. I do not wish to embarrass him, but from the inference of that he then went on to say that further discussions would take place because this had not been totally agreed. I am a little lost.
Perhaps while the Minister is thinking about that, because I will not get another chance later in the Bill, I thank everyone who has contributed. In an ideal world we would all want the best, and that should be done by agreement and by making things possible, but clearly at times they are not possible and some of the examples we have been given clearly reflect that. However, I would hate to think that we were not tackling an issue that had actually been agreed. If there has been some misunderstanding, perhaps the Minister would come back at a later stage and clarify that for us. In my opinion, it is slightly concerning that at the end of the day we are not clear exactly what has happened.
Lord De Mauley
My Lords, I am sorry if I was not clear. With great respect to my noble friend, I ask her, once she has read what I said in Hansard, might we have a discussion after today? Perhaps that would be helpful.
Lord Greaves
I wonder if the gist of that discussion could be circulated to the rest of us. I am not wholly opposed to the amendment from the noble Baroness, Lady Byford; there is a lot of common sense in it. However, local agreement ought to be possible, and it would be very helpful for all of us to know what the facts are.
Lord De Mauley
If it is helpful to your Lordships, the point that I was trying to make was that the stakeholder working group agreed in principle but that there are also points of detail which we have not yet resolved.
Lord Grantchester
My Lords, the proposals in the Bill will make great progress on many aspects and procedures covering rights of way legislation. We welcome this further debate on many aspects that the stakeholder working group raised. While we have addressed and debated some of them, there is as yet no agreement and it may be a long way off. However, we have welcomed the debate and look forward to further progress after these provisions have been enacted.
Lord De Mauley
My Lords, my noble friend’s Amendments 19 to 22 seek to introduce measures that reflect the valid concerns of landowners and farmers about the impact that claims for rights of way can have on their businesses, and about the costs of dealing with such claims during due legal process.
I am aware that there are concerns about the potential effect on some landowners of applications to record a right of way, particularly about multiple applications in an area or even on a single property. An application fee has been suggested as a solution to this issue. However, the introduction of such a fee or charge would be highly contentious. Ministers specifically asked the rights of way stakeholder working group to look at the impact of applications to record a public right of way, particularly at multiple applications, and what measures, including a fee or charge for an application, might be introduced to mitigate this perceived problem. The group agreed to report back to Ministers in the following terms:
“The problem of multiple applications could be an acute one in some cases but it is not widespread and there is little prospect of coming up with a solution, particularly on application charges, on which the full range of stakeholders could agree”.
However, the group’s view was that measures already agreed as part of the reforms package will in any case alleviate most of the problems. The first measure is to raise the threshold for applications. A local authority would be able to reject applications that did not meet a basic evidential test, effectively eliminating spurious or speculative applications. We are proposing to apply this retrospectively, as agreed by the stakeholder working group, by means of the transitional regulations provided for in Clause 27(7), so it would apply to any existing applications that have not yet resulted in an order.
The second enables newly discovered rights of way to be diverted and/or reduced in width before being recorded. This would be by agreement between the local authority and the landowner, with no scope for the agreement to be thwarted by objections. It is possible that this could also be applied retrospectively through the transitional regulations, thus reducing the overall administrative and cost burden of the procedures for recording rights of way.
Taking each of the proposals in my noble friend’s amendment in turn, the proposition to introduce a time limit on applications for an order to modify the definitive map is not as straightforward as it may appear. While it is possible to envisage such a measure for applications that are based solely on evidence of recent use, most rights of way applications are concerned with recording a right of way for which there will be both user evidence and historical documentary evidence, which may not come to light until many years after a landowner makes a statutory declaration under Section 31(6) of the Highways Act 1980.
Lord Deben (Con)
Could my noble friend explain why it is reasonable for documentary evidence, unaccompanied by usage evidence, to come into discussion many years after an application has been made? This is a matter of history and should remain so. It is surely not an acceptable argument against my noble friend’s amendment.
Lord De Mauley
My Lords, I said that there will be both user evidence and historical documentary evidence. Let me continue and try to go some way towards satisfying my noble friend. The time limit on the claiming of town and village greens introduced by the Growth and Infrastructure Act 2013 is often cited as a precedent. However, this fails to recognise that the legislative framework relating to public rights of way is different from that of town and village greens. Most notably, a green is not created until it has been registered as such whereas public rights of way already exist in law, regardless of whether they are recorded on the definitive map. The recording process is simply ascertaining something that already exists. Rights of way can come into being though a variety of mechanisms, not just a qualifying period of use. In addition, rights of way can be diverted or extinguished to accommodate development whereas town and village greens cannot.
The stakeholder working group discussed the question of a time limit on applications but has not yet been able to reach consensus on it, despite a willingness to try. However, the group suggested that developments on Section 31(6) deposits should be monitored, following recent amendment to the provisions by the Growth and Infrastructure Act 2013, to evaluate the scale of the problem over time. We intend to continue to do this in collaboration with the group.
The proposed amendment to Section 31 of the Highways Act 1980 appears to be linked to the proposal to introduce a time limit for applications. However, the amendment appears to provide that the presumed or deemed dedication of a public right of way on the basis of 20 years’ use cannot have taken place unless someone has made a valid application to add the right of way to the definitive map.
I am not entirely clear if that consequence is intended but, if it is, it would prevent the local authority from recording the right of way on the basis of evidence that it has discovered itself. It would also no longer be possible to establish the public right of way through a court declaration. If this were to be the case, there is an argument that it would create an incentive for users of rights of way to make more applications to ensure that in these cases the presumed dedication had taken place.
Introducing a fee for an application for an order to modify the definitive map would be at odds with the whole basis of the legislative framework that has been in place since the National Parks and Access to the Countryside Act 1949, under which local authorities are charged with recording all the public rights of way within their areas and asserting and protecting the public’s right to use them. The fundamental problem with this proposal is therefore that, in the main, applications are made not for the benefit of the individual applicant but in the public interest. In addition, it is worth affirming that local authorities are already funded for this statutory duty through the revenue support grant. Even if there were no formal application process, if someone provided a local authority with evidence of the existence of a public right of way, the authority would still be statutorily obliged to consider whether to make an order.
The amendment seems to recognise this fundamental flaw in the proposals and seeks to remedy it by seeking to charge a fee even where evidence is submitted without a formal application. This seems unworkable, though, as I do not see how a fee can be charged when the person submitting the evidence is not making a formal application and receives nothing tangible as a result of their actions.
The final proposal seeks to amend the existing form of application for an order to modify the definitive map, which is set out in regulations, by requiring the submission with the application of a statement of truth. There is a case for strengthening the quality of user evidence to accompany applications for an order to modify the definitive map, but we do not believe that further regulation is needed to achieve this. We intend to bring about improvements in the quality of user evidence but through non-statutory means, as part of the review of existing guidance that will be required to implement the reforms package. In addition, we will be looking at extending the new preliminary assessment of applications to cover the quality of user evidence as well as documentary evidence. Moreover, it is already possible for rights of way inspectors to require evidence to be given under oath at inquiries.
Not only do the amendments proposed here go considerably beyond the finely balanced package of reforms agreed by the group but the proposed amendments on charges for applications to modify the definitive map, and on time limits for such applications, are highly contentious. They risk jeopardising the hard-won stakeholder consensus behind the proposed package of rights of way reforms.
My noble friend Lady Byford asked for specific information about costs. I am afraid that they are not collated centrally. I hope that she will understand that.
My noble friend Lord Deben asked why claims should be made many years later. Highway law is predicated on the fundamental principle, “Once a highway, always a highway”. However, the 2026 cut-off date that we are working towards, and which is a key element of the stakeholder working group package, will eventually close off the possibility of recording a right of way on the basis of historical evidence. On the basis of everything that I have said, I hope that I have persuaded my noble friend to withdraw her amendment.
Lord Stevenson of Balmacara
My Lords, I am grateful to the noble Earl, Lord Clancarty, for raising this issue. He makes a good case for this matter to be given more consideration. We are in debt to previous generations—he ended on this—for the substantial collection of public statues that there is in London. According to Westminster City Council’s guide to its process for obtaining permission for statues, they date from the Charles I statue of 1633. I had a look at that the other day and it is in very good nick. We are still seeing modern examples of material being put up and, as the noble Earl says, there are huge impacts on the way in which we view our city, on tourism and in other aspects, so it is important.
Behind the individual questions that the noble Earl has posed for the Government I think there is a real worry about their attempts to deregulate here. While the Government are clearly achieving something by taking responsibility away from the Secretary of State—although that is a deregulatory measure on a Minister and not on business—I am not sure whether they are taking the right step. As the noble Earl mentioned, there is a gap regarding who has responsibilities in this area. Given her previous experience, our Deputy Chairman, the noble Baroness, Lady Andrews, might be in a better position to answer some of the questions about whether English Heritage has a role to play in this. I am sure that she will be too discreet to mention anything at this stage, and certainly not from the chair. However, I am sure that she will have some ideas about that. I am also sure that the Arts Council, in its wisdom and knowledge of these matters, will have things that might be brought to bear.
Whatever those ideas are, it is wrong for any individual politician to take responsibility for this area. That point was well made. I am not entirely clear whether substituting the GLA for the City of Westminster would solve that problem, because we are still talking about political control, but it raises the question: “Why just Westminster?”. Why would we not have wider consideration about where statues might be placed in London as a whole? My feeling is that statues are too important to be deregulated simply by the measure proposed by the Bill. I am not sure what the right solution is but I wonder whether the Minister might think about having a little more discussion about this.
The reflection I have, which I think is shared by the noble Earl whose amendment this is, is that there will be a bit of a gap here. It is not just a planning issue. The issues around putting up any memorialising form, whether it is a physical representation of somebody or an object whose presence is intangible, require aesthetic and other considerations rather than simply being about planning. I am not sure whether the planning system is quite the right place for this to be left. If there is therefore a gap, how would we find a way around it? It may be by having a statutory committee of some kind or simply by inviting some other body to take on a responsibility, which might be advisory. Whatever it is, I share the noble Earl’s concern about this issue.
Lord De Mauley
My Lords, the purpose of Clause 28 is to remove the current requirement on persons seeking to erect statues in public places in Greater London, excluding the City of London and the Inner and Middle Temples, to obtain consent from the Secretary of State before doing do. Controls to prevent the unsightly proliferation of statues in Greater London are already provided for by the Town and Country Planning Act 1990. This requires that planning permission be obtained from the relevant local planning authority prior to the erection of a statue in a public place in Greater London or the remainder of the country. I am not sure that I entirely agree with the noble Lord, Lord Stevenson, but I am sure we can have a useful discussion about it. Given that the aim of this change in Clause 28 is to streamline the current double-handling of applications to erect statues, I cannot really see a benefit in removing the requirement to seek the consent of the Secretary of State only to replace it with a requirement to seek the consent of the Mayor of London.
The mayor plays a key role in the planning for London’s continued success. His London Plan provides the economic, environmental, transport and social framework for development in the region to 2031. He ensures that local plans fit with the London Plan, works with boroughs to develop planning frameworks for major areas of brownfield land and considers planning proposals of strategic importance. In this way, he already has input to the preparation of policies relating to public statues, such as those produced by the City of Westminster. The noble Earl asked why keep the 1854 Act at all? It is worth saying that it provides a power for the Secretary of State to repair and restore, for example, any public statue. I might be so bold as to suggest we would all find that an important power to retain. He also asked whether there are archives. I do not believe there are such archives—I am happy to have a rootle around but I am pretty sure there are no centrally held archives. I have little more to add. I hope I have said enough to persuade him to withdraw his amendment.
The Earl of Clancarty
I thank the Minister very much for that reply. I think it is useful to open discussion on this issue. I am slightly surprised that after 160 years there would not be some kind of substantial file. As I said, Westminster had to submit quite detailed plans and drawings and that has been going on for a long time. Could the Minister promise to look very carefully to see if there is anything there that would be useful? Meanwhile, I beg leave to withdraw the amendment.
Lord Grantchester
My Lords, the problems arising from recreational motor vehicles—4x4s and motorbikes—using green lanes, unsealed tracks and other classified county roads have become very serious. For today’s Committee I have received a large postbag of submissions highlighting the disruption to quiet enjoyment of the countryside, and indeed the destruction of the pathway that precludes any other use. The Green Lanes Protection Group, made up of some 20 organisations ranging all the way from the Lake District in Yorkshire through North Wales and the Brecon Beacons to Somerset and the South Downs, has provided evidential photographs of the damage, and this is supported by many green lane alliances and concerned individuals.
This is becoming a serious, pressing matter to sort out. We recognise this and, in expressing sympathy, urge the Government to commit to a way forward. However, I hesitate to prescribe how the Minister should approach this, as the amendment does when it says, for example, that within one year of the Bill’s enactment the Secretary of State must lay before Parliament the report that the amendment calls for.
Perhaps the Minister could say which body, and which process, might be the best way to respond. Would it be once again a stakeholder working group or a sub-committee of wider interest groups that could make recommendations? Legal changes introduced by the NERC Act 2006 have improved the situation by limiting claims for the recognition of additional BOATs and by giving traffic regulation order powers to national park authorities. In places, though, particularly in some national parks, the problems remain extensive and further legislation is most likely to be necessary, along with better enforcement. Any debates on this issue that arise in the context of the Deregulation Bill will be important in paving the way for future legislation.
Lord De Mauley
My Lords, in what is an understandably contentious and partly ideological debate about the recreational use of motor vehicles on unsurfaced routes in the countryside, particularly inside national parks, my noble friend’s proposal seeks to place a duty on the Government to assess the burdens and costs caused by the use of mechanically propelled vehicles on unsealed rights of way. Presupposing that the review would conclude that motor vehicle use gives rise to a burden and cost, the clause would give powers to alleviate these but would not seek any assessment of any possible benefits, or seek to weight burdens and cost against such potential benefits.
I have to say that I have considerable sympathy with the genuine concerns of my noble friend and others about the problems that can arise from the recreational use of motor vehicles on unsealed roads. Like the noble Lord, Lord Judd, and others, I think that my noble friend is right to raise it today. Furthermore, I agree that this issue needs to be tackled and some means of resolution to it found. The Government’s published response to the Joint Committee’s report of pre-legislative scrutiny on the Bill said as much, but recognised that this Bill was not the right mechanism for doing it.
The issue of recreational off-road motor vehicle use is a complex, emotive and contentious one where one person’s pleasurable pastime is anathema to another. Research conducted on byways open to all traffic—admittedly, some years ago in 2005, although I am not aware of there being a significant change—found that although there are some acute cases of damage by recreational motor vehicle use in hot-spot areas, some of which my noble friend and I discussed earlier today, there was no evidence of widespread damage to the byway network from motor vehicles. The research found that 85% of byways open to all traffic in England carried either light traffic, at an average of 0.6 motor vehicles per day, or moderate traffic, at an average of 5.0 motor vehicles per day. Not all damage to unsealed roads and tracks is caused by the recreational use of motor vehicles. The research found that 62% of byway traffic is due to land management and dwelling access and just 38% is due to recreation. In addition, it found that 70% of byways were without any drainage. Much of the damage is due to a combination of farm vehicles, water erosion and poor maintenance.
I must also say that there is good evidence that the use of unsealed roads during organised motoring events, such as hill climbs, puts significant amounts of money into rural economies. There are about 150 hill climb events around the country every year, with over 12,000 participants. The motorcycle club trials in the south-west alone are estimated to bring about £120,000 to the local economy. Some groups of motor vehicle users engage in volunteer activities to repair and maintain unsealed tracks, which I think is something that we would all want to encourage.
It is our contention that the most appropriate way to review policy on the recreational off-road use of motor vehicles is for it to be based on the stakeholder working group model and, in answer to my noble friend Lady Parminter, such a group will be established as soon as possible after the passing of the Bill. Despite my noble friend Lord Bradshaw’s scepticism, I point out that the stakeholder working group approach has proved to be successful, as demonstrated by the consensus in the face of diametrically opposing positions over the rights of way reforms package, of which the clauses in the Bill form the major part. This has resulted in agreement being arrived at through discussion and negotiation.
Lord De Mauley
I was just coming to the noble Lord’s earlier question on timing in a moment.
My noble friend asked what would happen if there was no consensus between the pro-vehicle and anti-vehicle groups. Clearly, consensus would be the preferred outcome but of course we recognise that ultimately this may not prove possible. Even without consensus, at least all the viable policy options will have been properly explored and evaluated by stakeholders, enabling Ministers to make better informed decisions on which proposals to take forward.
On the point raised by the noble Lord, Lord Judd, the original stakeholder working group took 18 months to reach its conclusions and there is no reason why we should not set a similar timeframe for another. I am grateful to have my noble friend Lord Jopling’s support for this route. Within such a group, recognised experts can explore all the viable possibilities and their likely consequences. Solutions arrived at in this way, based on agreement and mutual interest, are likely to result in less conflict and reduce the need for enforcement.
My noble friend’s proposed new clause would create new regulation, which may not prove necessary after the issue has been properly analysed and discussed by the stakeholder working group and other stakeholders. Furthermore, subsection (3) of his proposed new clause contains a power to adopt some sort of measure to remove public rights of way by regulations. We believe that this would be an inappropriate use of delegated legislation and does not recognise that the best solutions to problems are often those that do not resort to legislation.
I am happy to have further discussions with my noble friend between now and Report but, on the basis of what I have said today, I hope that he will agree to withdraw his amendment.
Lord Bradshaw
I thank my noble friend very much. The Minister’s offer of further discussion is very pertinent because many people in your Lordships’ House feel very strongly about this issue. I was not convinced by the statement that there were only a few places; this is happening all over, and is growing. Urgent steps must be taken to deal with it. I may not be the expert on what those steps are but I am happy to engage in further conversations. With that, I beg leave to withdraw the amendment.