Proposed Media Mergers

Debate between Lord McNally and Lord Stevenson of Balmacara

Tuesday 5th June 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am obliged to the Minister for repeating the Statement made earlier by his right honourable friend the Secretary of State in the other place. On the decisions announced today, the best thing that can be said is that they are not unexpected. Comcast cast a shadow, but not as long as that of 21st Century Fox or indeed the Murdoch Family Trust. The key issue raised today is the question of what undertakings would be accepted to ameliorate the CMA finding that a Sky-21st Century Fox merger is likely to operate against the public interest on media plurality concerns. I do not disagree that divestment of Sky News to a suitable third party such as Disney is the least worst of the available options, provided that appropriate remedies are put in place to assuage media plurality concerns.

The CMA report sets out some draft terms for such a divestment and Fox has indicated that these are acceptable. However, the Statement makes it clear that more work is required on this issue and we will want to scrutinise carefully what is finally proposed, to ensure that Sky News remains financially viable over the long term, is able to operate as a major UK news provider and is able to take its editorial decisions independently, free from any potential outside influence. Will the Minister confirm that Parliament will be kept informed of progress in these negotiations?

In the conclusion to his Statement, the Secretary of State says that the Government have followed,

“a scrupulously fair and impartial process, based only on relevant evidence and objectively justified by the facts”.

I was glad to hear that. As required by the Enterprise Act 2002, the Secretary of State has been operating in a quasi-judicial role and I accept that both he and his predecessor have been punctilious in following that approach. However, if we are reaching the end of this complex process, does the Minister accept that if,

“we want to see a broadcasting industry in Britain that is strong and effective and competitive”,

as the Statement has it, we need urgently to review whether we have the right regulatory structure and statutory powers in place for the modern world?

Does the Minister agree that there are aspects of the public interest test on media mergers which now need to be reconsidered? Many of the powers are found in the Communications Act 2003, which first brought in the public interest test for media mergers. Fifteen years on, the media landscape has greatly changed and with it comes the need to review, strengthen and future-proof this important legislative measure. We need to widen the definition of “media enterprises” to which the public interest test refers. Currently, the definition does not include enterprises such as Google, YouTube, Facebook, Twitter, Snapchat and others. Nowadays, many people take more of their audio-visual content off YouTube than from conventional broadcast channels, or they seek their news through Twitter or from apps on smartphones and thus not necessarily through broadcast platforms and channels. If the public interest can be engaged by the dominance or inappropriate control of a broadcast channel, why is it not engaged by the platform or channel through which large-scale news-related and other material is delivered to the whole population?

Ofcom needs the same powers when carrying out its Enterprise Act competition functions as are currently available to the Competition and Markets Authority, and specifically the power to require the attendance of witnesses and the production of documents. Without these powers, Ofcom is playing second fiddle. We need to think harder about the fit and proper test itself, which is currently couched as the,

“commitment to the attainment in relation to broadcasting of the standards objectives”.

However, these standards relate only to television and radio services. We need to think about how a commitment to the attainment of standards can be evidenced through the control of media enterprises that are more widely construed. This test would eliminate the risk that behaviour outside the scope of television and radio, and beyond the specifics of the broadcasting standards code, would not be able to be drawn in aid in determining fitness. Presumably we are also thinking about the question of control over other channels, newspapers and organisations. I also think that we could learn from the experience of the “fit and proper test” in other sectors such as financial services.

Finally, we need to think harder about how to protect the editorial freedom of the news services of media enterprises and see that safeguards are in place. Media plurality—the plurality of ownership—does not necessarily mean that editorial freedom is protected and safeguarded.

[Lord McNally (LD)]

My Lords, I thank the Minister for repeating the Statement. For someone who is not always clear on these great battles, where does this put the Comcast bid and the Fox-Disney bid? Are they now parallel bids and will Sky shareholders now decide which is the best deal? I read somewhere that Sky has advised its shareholders that it no longer stands by an earlier recommendation to accept the Fox bid. Once the procedure has been gone through, will it be a straight fight on price for Sky or are there other considerations?

I associate myself with what the noble Lord, Lord Stevenson, has just said: this keeps on happening. No other country in the world would allow important parts of its media industry to be fought over by foreign interests in such a way. We have here a battle between three massive American media conglomerates over a key part of our media industry. Moreover, as the noble Lord has just said, all this is being done in the long shadow of even bigger technology companies that may be coming in. We need a framework of defences for this key sector. As we said when we considered these issues 20 years ago, we are not talking about tins of beans. When these companies pass on to different control, we are talking about an essential part of a functioning democracy. There is a case for looking at the powers of Ofcom and the CMA and the Government’s responsibilities in this media area, which are badly in need of an overhaul.

The only other thing I have to say is that it is important that we get the decision right. I am always worried when the Secretary of State gives himself timetables of 15 days, or whatever. The important thing is making sure that we get it right. I also underline the importance of Parliament being kept fully informed and consulted on decisions that are taken.

Data Protection Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Monday 14th May 2018 Lords Chamber

[Lord McNally (LD)]

My Lords, as the noble Lord, Lord Grade, said, this has been a passionate and, actually, very balanced debate. A number of noble Lords have expressed concern about the amendment before us and have, sort of, made a case against it.

When the noble Lord, Lord Black, came in, struggling on his crutches, I did think: is there no end to which this man will not go to get sympathy from this House? I wish him a speedy recovery.

When introducing the debate, the Minister said first that these amendments have no place in the Bill because it is about data protection and then began to dazzle us with the number of government amendments that pertain to the media. Of course it is perfectly sensible that this matter should be in the Bill.

By the way, I say to the noble Baroness, Lady Cavendish, that I did not say I object to journalists; I object to journalists at the Times. She mentioned the growing power of the ICO in all this, which is something that the press should think hard about. The press have been so busy trying to avoid having a proper regulator for themselves that they find themselves well and truly regulated by a powerful ICO. Where the ICO does not regulate the press, the courts may with some of the judgments that are coming down the track.

As always, the perorations against, as with the noble Lord, Lord Hunt, have been about freedom and liberty, as though we on this side are not as passionate in our defence of those. Today’s debate has produced the usual press stories that crop up when either House debates the issue. They always either rubbish one or other of the more popular proponents of reform or carry, as did the Evening Standard just before the Commons debate, such headlines as that from the Commons Culture Minister, Margot James: “We will lose freedom of the press if MPs back new curbs”. It is my belief that the real defenders of press freedom are not the Ministers scrambling to close Leveson down but those of us who want to see a press that is respected and trusted, as well as free.

When the Commons debated our amendment, Mr Jacob Rees-Mogg, the new Erskine May, said rather imperiously that Parliament had every right to renege on promises made by a predecessor. Of course, he is right—we know that, Jacob. However, it is also a long and honourable convention that there is a continuity of responsibility from one Parliament and one Government to another. We saw it last week when the Prime Minister gave a full and unequivocal apology to the Libyan family for Britain’s part in their rendition and subsequent torture, although it did not happen on her watch. The long tradition of continuity of responsibility means that a promise given by one Prime Minister and one Parliament is unlikely to be abandoned by another. There is a double matter of honour when the promise in question was made by a Prime Minister of the party now in power. David Cameron gave such commitments, and the amendment from the noble Baroness, Lady Hollins, gives the House of Commons a way of redeeming that promise while taking into account the passage of time since it was made.

I often find that, when I am indignant having read in the newspaper or seen on TV some summing up or sentence by a judge, my lawyer friends will say, “Ah, but the judge who has heard all the evidence is the best placed to make a balanced judgment on the matter”. In this case, we have the balanced judgment of Sir Brian Leveson himself. Let us remember, after the speeches of the noble and learned Lord, Lord Brown, and the noble Lord, Lord Pannick, that Sir Brian had all the information they had to make their speeches but came to a different conclusion: that it should go on. As I said when the Leveson letter first came up, here is the third most senior judge in the land taking six pages in a very carefully argued letter to give his views on the inquiry on which he spent a year of his life. Some noble and learned Lords in the House should have a little modesty when challenging his judgment because it is absolutely clear that Leveson 2 should go ahead. The noble and learned Lord, Lord Falconer, has already quoted from the letter, so I will not waste time.

The amendment before us is proportionate to the task at hand in addressing issues not yet adequately addressed. It redeems a solemn promise made by our Prime Minister and our Parliament. Jodie Ginsberg, the CEO of Index on Censorship, when briefing against these proposals before the Commons debate, said that she wanted,

“a free, vibrant, independent and troublesome media”.

So do I, and so does the proposer of the amendment. The biggest threat to a free, vibrant, independent and troublesome media is one so held in public contempt because of corrupt and illegal practices that few defenders will come to its aid if press freedom is really threatened.

I say to the noble Baroness, Lady Cavendish, that, when the Leveson inquiry exposed sins and criminality, the Government of the day could at that time have done anything they liked to the press. What they did was make a strong attempt to create something as far from political control as possible—I was one of the privy counsellors who signed the royal charter. It is absolutely false to claim that the attempt was to create a state-controlled press. That was never on the table and it is not on the table now.

The noble Earl, Lord Attlee, who has been brave in carrying through on Section 40, has said that we will not press it beyond tonight. I am interested to see which bit of legislation will include its repeal and how that will be favoured when it comes back to us. I say to the Minister: this is not the end of Section 40.

Tonight, we are looking for something more. As the noble Baroness, Lady Hollins, and the noble Lord, Lord Kerslake, have shown, we are looking at something for the victims. The noble Baroness, Lady Cavendish, should note that it is also something for journalists who need protection from being bullied into illegal acts by their employers. Most of all, it is for our own self-respect in keeping a promise made. I urge support for this amendment.

[Lord Stevenson of Balmacara]

My Lords, we are 90 minutes in and we have heard lots of familiar tropes rehashed and replayed, but have we achieved very much in this debate? While sitting here I have been wondering how on earth one brings together the two very different sides that are emerging in this debate. I whispered to my colleagues on my right and left asking for help and support, and all I got was, “You need the judgment of Solomon on this”, and I do not have that. However, we are going to ask noble Lords to vote on this issue, and so I want us to think very hard about what we have been doing here.

Leveson Inquiry Update

Debate between Lord McNally and Lord Stevenson of Balmacara

Thursday 1st March 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am very grateful to the noble and learned Lord for repeating the Statement made by his right honourable friend the Secretary of State for—is it D2CMS? I forget how you pronounce it these days, with “digital” being added to the department name.

We need to consider three main issues addressed in the Statement. First, this announcement of the Government’s formal decision, albeit it was prefigured in their manifesto, terminates the Leveson inquiry established under the Inquiries Act 2005. It also gives notice that the Government will repeal Section 40 of the Crime and Courts Act 2013. But we gather from the Statement that Sir Brian Leveson, who has rightly been consulted about this, agrees that his inquiry should not proceed but believes that it should continue in an amended form.

But is that what is happening? Could it be, as was patently clear from the huge response to the consultation carried out by the Government, that Sir Brian believes that there are still many unanswered questions? Do they include which editors and other senior newspaper executives were commissioned or otherwise responsible for data theft, phone hacking and other illegal conduct by journalists and investigators? Does it cover the full extent of hacking and data protection breaches at certain national newspapers, the extent of alleged corruption between some politicians, media representatives and the Metropolitan Police, and the nature of the relationships between the police and the press, in particular the long-term cover-up of police responsibility for the Hillsborough disaster?

The Statement gives the impression that this has all been sorted. It says that,

“the terms of reference for a part 2 of the inquiry have largely been met”.

Well, I do not think that Sir Brian agrees with that—or that the victims will agree with it. I certainly do not. It would be very helpful for your Lordships’ House if the noble and learned Lord could explain what precisely the words used by Sir Brian meant in that enigmatic phrase that he believes that the inquiry should continue in “an amended form”. Will he put copies of the correspondence in the Library so that we can all see it?

Secondly, on Report on the Data Protection Bill your Lordships’ House voted by 238 to 209 to add Amendment 127A in the name of the noble Baroness, Lady Hollins. This new clause effectively requires the Government to proceed with a second part of the Leveson inquiry. The House also agreed amendments in the name of the noble Earl, Lord Attlee, which replicate Section 40 of the Crime and Courts Act for data protection claims only.

It is possible that the Government will find the arguments—I have every confidence that we will listen to them with great interest—that will persuade the other place to remove these two amendments, but the parliamentary arithmetic being what it is, I am not sure that that is certain. In any case, if the amendments are reversed, they will come back here on ping-pong under considerable time pressure. After all, the Bill has to have Royal Assent by 25 May. Could the noble and learned Lord speculate about what might happen on the assumption that the Bill remains unamended? Perhaps we should explore the common ground here, because there is potential for working together on this. I look forward to discussions that were started prior to discussions on the Data Protection Act.

Will the noble and learned Lord also explain what the timetable is for the repeal of Section 40 of the Crime and Courts Act? The Statement says that it will not be commenced—again, that was in the Conservative manifesto—but the Statement adds that the Government will seek repeal “at the earliest opportunity”. When is that? “Soon” and “before Christmas”, which are the usual words in the lexicon used by the noble and learned Lord, will not be sufficient on this occasion. I look forward to more detail.

Thirdly, the saddest thing about this Statement is that it makes it clear that the all-party consensus that informed the Leveson report and oversaw the parliamentary process immediately after its publication has been destroyed. The Conservatives have reneged on the promises made by successive Prime Ministers not to let down the victims of press intrusion, and they are clearly setting their face against ensuring that we learn the lessons of the past. It is a disgrace that the Government are betraying the trust placed in them by the victims. Who now will stand up for them and make sure that their pain and suffering will not be repeated?

I believe that there is a willingness in Parliament to encourage an independent system of press regulation, as recommended by Sir Brian Leveson. I will go further: I am sympathetic, and I think others are, to the idea that if IPSO would clearly meet the standard for recognition establish by the PRP, it might be sensible for Parliament to revisit the complex set of interrelated measures of inducements and penalties set up under the rather baroque arrangements of the Privy Council.

Alongside this, we need to take into account the parallel developments mentioned in the Statement. Mainly because of loss of sales and the collapse in advertising revenues, the traditional press is in serious decline. The new, unregulated electronic sources of news and information are growing rapidly and the internet is constantly innovating and expanding news, fake news and other services. I agree with the Secretary of State that one result of these trends is that we may be witnessing the end of a fine tradition of serious journalism and the elimination of space for independent opinion which has always underpinned our democracy and polity in the UK. I agree with him that this is really important.

I welcome the proposal for a review of the sustainability of high-quality journalism and suggest to the noble and learned Lord that there may be considerable advantage in making the review cross-party and ensuring that its evidence and proceedings are open to the public. Perhaps he could comment on that—and if he cannot do so now, will he be ready to respond to an Oral Question on this later in the month, of which I have given him some notice?

If this marks the end of Leveson—and I echo the thanks expressed by the Secretary of State to Sir Brian for his considerable efforts—I am left with the following thoughts. The key question raised by Leveson is how in a democratic society we enshrine the press’s freedom to publish in the public interest while ensuring a proportionate balance so that individuals retain their rights to privacy and the security of their personal data. We have not got this right yet, but I do not think that we are far away from coming to a proper solution.

We must learn the lessons from the culture of abuse, illegality and criminality that has flourished for too long in our newspapers. There is no point in trying to cover over that and not look at it. We need to examine all these things and come up with reports—and we have to make sure that the victims of press intrusion can get effective redress when such abuse happens.

As I have said, there is more that unites us on this than divides us. Now would be a good time to reach out to all parties and attempt to re-establish the cross-party agreement that led to the original Leveson report and ensure that its good work is carried on.

[Lord McNally (LD)]

My Lords, it is never a pretty sight to watch a Government capitulating to vested interests. At such a time, it is always useful to look around and see who is smiling. Certainly, Mr Rupert Murdoch will be smiling, as will Lord Rothermere, Mr Paul Dacre and the Barclay Brothers—owners or editors of the Times, the Sun, the Mail and the Telegraph respectively.

It was nearly 30 years ago, in 1990, that the Calcutt commission recommended the setting up of a Press Complaints Commission. The Government of the day welcomed that report and set up the Press Complaints Commission, but warned that it was a “final chance” for self-regulation, or, as the then Secretary of State, David Mellor, put it, the press were,

“drinking in the last-chance saloon”.

The trouble is, what has happened since? There was no learning of lessons or improvement of behaviour, with the addition of corruption and criminality to the cocktail of press failings under the stones that Lord Justice Leveson turned over.

This Statement is littered with high-minded declarations, such as,

“free to … investigate without fear or favour … underpin our democracy … integral to the freedom of our nation”,

and,

“safeguard the lifeblood of our democratic discourse”,

but the truth is that none of those high-minded aspirations would be put at risk either by implementing Section 40 or by continuing with part 2 of Leveson. They are put at risk by behaviour that undermines public trust and diminishes confidence in our democracy.

Will the Minister clarify a number of points? First, will he put in the Library of the House the precise terms on which Sir Brian Leveson believes his inquiry should have continued? Secondly, when will the terms of reference and chair for the new review into the sustainability of the press be announced? Will it be that review or Ofcom that looks at the increasing overlap between print journalism, online journalism and broadcast news, which now sits with the various oversight bodies that regulate them?

The sentence in the Statement with which I agree entirely states that challenges that were only in their infancy in 2011 have now to be faced. Issues such as misinformation, fake news, malicious disinformation and online abuse all threaten both the quality of journalism and the fundamental rights of our citizens.

But this Statement is not a response equal to that challenge. For all the crocodile tears, it will do nothing to preserve local newspapers. It leaves the victims of press abuse with their hurt still raw and unassuaged by any sense of justice done. It was very interesting that a few hours after the Manchester bombing, journalists were knocking on the doors of victims, intruding into the private grief of people who had lost their children that night. So much for conscience and regret.

It leaves a self-serving regulator, IPSO, which is as ineffectual and compromised as its predecessor, the PCC. As the noble Lord, Lord Stevenson, said, it is open to IPSO to come within the Leveson recommendations, and if there were any sense of trying to meet the all-party approach that the noble Lord, Lord Stevenson, advocated, that is what IPSO would do. It leaves our media landscape not, as it should be, a balance of quality, diversity and choice, but again simply an accident waiting to happen, as those guilty of past abuse remain in power, with no sense of contrition or shame, and there is still no effective means of holding the perpetrators of that abuse to account.

It is not even an outcome of the consultation. It is the fulfilment of a squalid political deal between the press barons and the Conservative Party which the Secretary of State will live to regret. What is certain is that the name of Leveson will rank higher in the list of defenders of freedom of the press than any member of this Government.

Sky-Fox Update

Debate between Lord McNally and Lord Stevenson of Balmacara

Tuesday 23rd January 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble and learned Lord for repeating the Statement made by the Secretary of State in another place. I take this opportunity to congratulate Mr Matt Hancock on his appointment and pay tribute to the fact that, on this issue, he says he intends to continue his predecessor’s practice of being as open as possible while respecting the quasi-judicial nature of the decision. In this regard, I respectfully request that the Minister suggests to the new Secretary of State that he might wish to continue the informal all-party meetings with Members of your Lordships’ House, which were very helpful in previous rounds of this and related issues. We would welcome that.

As we have heard, the provisional findings of the CMA are that if the Fox-Sky merger went ahead as proposed, it could be against the public interest. It would result in the Murdoch family having too much control over news providers in the UK and too much influence over public opinion and the political agenda. I do not think that there can be much dispute about that. We now move on to a public consultation of possible remedies, which I am sure will attract a great deal of attention, as did the original investigation, with some 16,000 responses.

The Statement that we have just heard did not, for obvious reasons explained by the noble and learned Lord, go into the detail of the possible remedies, but I think it is worth commenting that, even at this stage, it is fairly clear that the CMA largely discounts what are called “behavioural remedies”, which are largely firewalls aimed at keeping entities and their information separate within a merged group. We agree that that would not be a preferred solution. Secondly, the CMA is unenthusiastic about structural remedies; namely to either spin off Sky News into a new company, or recommend the divestiture of Sky News, as this may threaten the viability of Sky News. This is something that has already been threatened: indeed, it is interesting to note that the CMA warns parties that the closure of Sky News while the investigation is ongoing would not be permitted. We are left, therefore, with the third recommendation which is out for consultation, which is the prohibition of the transaction. We think that that is the right solution.

Clearly, a lot of this is dependent on whether and when the sale of Fox to Disney goes ahead. It is subject to considerable regulatory issues in the United States and we do not know enough about what the final structures will be; we therefore have to wait. It is a complicated issue on its own without these other factors intervening, and it is good that the CMA seems to be on top of this, keeping a watchful eye on it and making sensible proposals in the eventuality of this coming through within the timescale of its review. The most surprising issue in the Statement is that the CMA says it is not concerned about the proposed merger on broadcasting standards grounds. I make two points here.

We have argued consistently that the fit and proper person test of individuals who seek to acquire and operate a broadcasting licence is central to having a fair and plural press in this country. However, the test itself is flawed and outdated and needs to be revised. I refer the noble and learned Lord to amendments to the Digital Economy Act which we debated in the last Parliament and which we withdrew on the basis that the Government were considering amending the current provisions and would be looking at this in the near future. I do not think it would be difficult to find a way of bringing into the 21st century a system which, after all, is similar in many respects to the one routinely operated in the financial sector. Will the Government consider this? If so, will they tell us when they will bring forward some recommendations?

Secondly, we have consistently said that if we are to reach a proper assessment of the broadcasting standards question as it affects the Murdoch Family Trust and others, we need to get to the bottom of the corporate governance issues that gave rise to the original Leveson report and should be looked at again as part of part 2 of the Leveson inquiry. I am trying to be helpful here to the noble and learned Lord—I hope he will not need to be reminded that, as a result of amendments in the name of the noble Baroness, Lady Hollins, which were agreed by this House to the Data Protection Bill, the Government are likely to be required to carry out a review of this type one way or the other. Once Sir Brian has reviewed the recent consultation responses on this issue, I urge the Government to simply get on with it.

[Lord McNally (LD)]

My Lords, I associate myself with the points made by the noble Lord, Lord Stevenson, about the second stage of Leveson and also the remedies that have already been put forward on media regulation. I welcome this Statement and the ongoing commitment of the Secretary of State to keep both Houses informed. I also appreciate the continuing interest of the Minister in this House, the noble and learned Lord, Lord Keen, in the matter. Like the noble Lord, Lord Stevenson, I would welcome a continuation of that informal dialogue. We welcome the interim findings concerning the public interest not being served in terms either of diversity or the influence of the Murdoch Family Trust.

On the commitment to broadcasting standards, I share the concern and puzzlement of the noble Lord, Lord Stevenson. I find it odd that in terms of commitment to broadcasting standards, the proposed merger does not operate against the public interest, echoing an earlier and very disappointing finding by Ofcom. In three continents over 60 years—in Australia, the UK and the USA—Mr Murdoch has been a major factor in lowering standards in both print and broadcast media. I am pleased that the Secretary of State is taking his time to think and consider. Frankly, he has been a little too eager to shoot from the hip in his first few days in office, so this more considered response is welcome.

I still believe that a healthy media ecology rests on a mantra of quality, diversity and choice. All three are threatened by an extension of Murdoch power. It is important to defend the integrity of Sky News, where the lack of 100% control has mitigated against the Murdoch effect. But the Secretary of State needs to go further and consider carefully how we protect our public service broadcast news on the BBC, ITV and Sky News. We need to review the protection of news sources in the light of the impact of new technologies. Here again, Ofcom needs to be proactive in reviewing and bringing advice on these matters.

We must also keep an eye on the implications of the Disney takeover of Fox. Does the Minister have a timetable or guesstimate about how soon the US authorities will come to their conclusions? For we must make sure that any remedies to protect the public interest are real and effective, not simply fig leaves to cover up a surrender to big media power. This is a welcome Statement but it is not the end of the matter. We need a robust Secretary of State to defend the public interest but, on that, I am afraid the jury is still out.

Data Protection Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Committee: 6th sitting (Hansard): House of Lords
Wednesday 22nd November 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I apologise to the House because my voice is annoyingly masked. I urge noble Lords to put their hearing aids on because it might not last until I have said what I want to say.

Every now and then in this House, we have a debate of such importance and significance that the House behaves in a completely different manner from its normal routine. We have had that today. There is a sense of stillness, expectancy and interest that we do not always get, and it is important that we hold on to it because we are touching on some very important and deep issues. While we obviously need to deal with the narrow question of the amendments before us, I hope very much that the wider resonances of this debate might help unpick some of the difficulties that have been raised in our discussion and which are relevant in society today.

I am so taken by the debate we have had that I want first to mention to the House that our amendment in this group, which was laid as one of the first amendments, is an entirely “fake” amendment, if I may use that word. It is a probing amendment and does not mean anything. I can tell the House now that I will not be pressing it. I hope the Minister will do me the justice of not even bothering to respond to it because it has lost all relevance in the light of the issues that have been raised subsequently. My second point is a slightly cheeky one: since I am no longer involved with our amendment in this group and we do not have any names attached to any of the others, I will bring a completely new and independent view to the discussions. I hope that noble Lords will enjoy that.

I hope that the noble Lord, Lord Black, does not take this my final opening point the wrong way. I am not going to follow the line of the noble Lord, Lord McNally, and accuse him of crimes he is not going to commit, but this is so important that we need to come back to it in another place and at another time. I hope that he will understand that. I think that it probably needs a Bill of its own to get this right. We can discuss that later.

Okay. Trying to make sense of what we have in front of us—in this alphabet soup that we often have in complicated parts of Bills—I want to approach this in the following way. I said at Second Reading, and I repeated in the debate last week, that I do not think the Bill is the right place to rerun some of the long-standing arguments about Leveson. I do not think that anything said today should be withdrawn; it is really important stuff that needs to be resolved. But this is probably not the Bill to do that in and I will give some reasons for that.

The main worry that I have, and several noble Lords have mentioned this, is that we are talking about a package of measures that were the product of a particular time. For all the reasons that have been given, bits have succeeded and bits have not succeeded; bits have been implemented and bits have not been implemented, and I do not think that it is right for this Bill at this time to try to kick-start some of the bits that need to be looked at, particularly the amendments that relate to the Crime and Courts Act 2013. The speech of the noble Earl, Lord Attlee, was a very good introduction to those. He made a very good case for them. That case does need to be answered, but this is not the right place for that, so I do not support them.

I do not think that Amendment 179A works in the context that I am trying to sketch out. The case made by the noble Baroness, Lady Hollins, as always, was incredibly powerful and one’s heart reaches out to everything she says, which was also picked up by the noble Lord, Lord Low. We want to do something about this and we think that the way that the Government have treated Leveson 2 is a disgrace. It is a shameful way to behave, given the treatment of the victims. We must never forget that.

The third group of amendments here—the amendments of the noble Lord, Lord McNally—also makes very good sense. They are sensible amendments but, for the same reason, we should not continue with them today.

[Lord McNally]

The noble Lord is giving the Government a “get out of jail free” card, unless he has something else to say. There are areas in all these amendments that have massive implications for data and data protection. If they do not fit into the scope of a Data Protection Bill, where on earth will they fit?

Data Protection Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Committee: 3rd sitting (Hansard - continued): House of Lords
Monday 13th November 2017 Lords Chamber

[Lord McNally (LD)]

My Lords, when the famous French long-serving Foreign Minister Talleyrand died and the news was taken to his long-term rival Prince Metternich of Austria, Metternich looked at the telegram and said, “What does he mean by this?”. Some of my friends have a similar reaction to any amendments that carry the name of the noble Lord, Lord Black, but I am not among them. I think that we share a common belief in a free and a vigorous and independent press. He knows that when at Second Reading he referred to the Defamation Act 2013, my ears pricked up, because it is one of the things that I am most proud of from my time as a Minister. With my noble friend Lord Lester as my mentor, we piloted that Bill into legislation. I am certainly very interested in any amendment that would prevent this Bill becoming a backdoor to getting around the protections that the Defamation Act gave to free comment and academic freedom to have peer comment, and so on. The Act has worked—we are no longer considered the libel capital of the world—and there is a great deal more freedom in the academic world for peer comments and criticisms, without the threat of libel actions, which had a chilling effect.

The problem is that this is an alphabet soup of amendments, which the noble Lord, Lord Black, has put forward with great clarity, so we will be able to study what exactly he wants to do and how he wants to do it. I am interested in a number of things; I am interested in the idea, which he quite rightly pointed out, of investigative journalists having to give prior notice of what they are doing, which seems rather counterintuitive to the idea of investigative journalism. I have certainly received that point of view from the BBC and other forms of journal about the effect of that proposal. The noble Lord, Lord Black, is quite right. We have seen only recently the Paradise papers as another example of investigative journalism exposing things that people would rather keep quiet, which is massively in the public interest. He also referred to the number of exposés of care homes, prisons and young offender institutions, all of which are massively in the public interest. It would be wrong to allow the Bill to bring into law provisions that would chill, prevent or curb the great traditions of a free and vigorous press. In the spirit of Committee stage, I would like to look carefully at what the amendments of the noble Lord, Lord Black, seek to do. As he knows, after Second Reading I offered to collaborate with him on amendments but that would probably have been too great a shock to both our constitutions. However, I would certainly be interested to see where we can work together on the broad aim of ensuring that the Bill contains no accidental curbs on the activities of a vigorous and free press and media.

As I have said before, the noble Lord, Lord Black, and his friends would be in a stronger position if the background to this was not one of previous criminality and invasion of the privacy of people who had every right to see their privacy protected. Therefore, there is bound to be a certain scepticism about whether these proposals give overgenerous access to overbroad exemptions. But let us have a look at them and at some of the issues that have been raised in other quarters—as I say, by the BBC and journals that are not members of IPSO that have expressed the concerns raised by the noble Lord, Lord Black. Following that and what the Minister is about to tell us, we can then make judgments about how we shall approach these issues on Report.

[Lord Stevenson of Balmacara]

My Lords, we are all very grateful to the noble Lord, Lord Black, for his very full introduction to these amendments. I shall read very carefully what the noble Lord, Lord McNally, said and take his remarks on their merits. I have no problem with that.

I am sure that the noble Lord, Lord Black, will not mind if I quote what he said in Committee only a week ago and pose a question to him. He said:

“This Bill is very carefully crafted to balance rights to free expression and rights to privacy, which of course are of huge importance. It recognises the vital importance of free speech in a free society at the same time as protecting individuals. It replicates a system which has worked well for 20 years and can work well for another 20”.—[Official Report, 6/11/17; cols. 1667-68.]


What a difference a week makes to one’s thinking. The noble Lord was pressed by a number of noble Lords, including his noble friend Lord Attlee, to come up with a much more detailed and engaged critique. We would love to hear from him again if he is prepared to tell us why there has been a change in his thinking. However, I do not think that gets in the way of what he is saying, which is that some issues need to be addressed. We will look at them carefully when we have the chance to see them in print. I shall also be interested to hear what the noble Baroness makes of this when she replies.

Data Protection Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Committee: 2nd sitting (Hansard): House of Lords
Monday 6th November 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords—

[Lord McNally (LD)]

My Lords, my name is also on this amendment. It is a great pleasure to follow the noble Lord, Lord Puttnam, who has championed these issues for 20 years or more. It is worth while having a reality check for ourselves. One of the good things about the House of Lords is a certain continuity. I was in this House for the Data Protection Act 1998, which we are now reviewing, and for the Communications Act to which the noble Lord, Lord Puttnam, referred, and I served on his committee. We had no idea what revolution was coming our way. Indeed, in the Communications Committee, we were asked not to look at the internet; it was for the future. If we think about what has happened in those 20 years, what on earth is going to happen in the next 20, when we are reliably told we are on the verge of a fourth industrial revolution driven by data?

We were quietly asked by the noble Baroness, Lady Kidron, not to include this amendment in the previous group in case the whole thing became hijacked by a debate about education, and she was shrewd in that, but it was useful that she pointed out—I love this point—that data literacy should be as important as the three Rs as a core competency for the 21st-century child. If we are going to achieve that, we have to get out of the silo mentality: “It’s not our job, it’s the Information Commissioner’s job”; “It’s the Department for Education’s job”; “It’s DCMS’s job”. Somebody has to take responsibility for what we are saying because it is one of the great challenges.

There is a danger, particularly in a House of this age group, that we overestimate the capacity of the young. We all have our anecdotes about our grandchildren or our children being able to work the gadgets that we cannot work, but that does not mean that they have the competence or the maturity to make proper rational, responsible decisions about some of the factors that come within their ambit with this new technology. My noble friend Lord Storey referred earlier to a story in today’s paper about the increase in sexting among young children. We also know the extent of cyberbullying that goes on between children and about the naivety of children in being willing to reveal personal information online. Navigating the digital world is very complex.

The noble Lord, Lord Lexden, is in his place, and I am always worried about quoting history, but when the reform Act was passed in 1867, somebody said, “We now must educate our masters”, and that brought about the Elementary Education Act 1870. Nobody can now be in any doubt about the enormity of the task of preparing the whole population, but especially our children, to handle the new powers that are coming down the track at us. Educating for digital is one of the most important tasks facing us. I enjoyed and appreciated the way the noble Baroness, Lady Kidron, delivered her amendments. She made the point that that education is not to make this generation of children able to fit into the needs of Silicon Valley; it is to give them the power to make sure that Silicon Valley responds to their needs as citizens. That is the task that this amendment is trying to promote.

Data Protection Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 30th October 2017 Lords Chamber

[Lord Stevenson of Balmacara]

As a Scot I can hardly complain, and I am always bewildered, too—not only about this but about many other things. Our Amendment 17 in this group is also one of bewilderment. Clause 8 is headed:

“Child’s consent in relation to information society services”,


and refers to “preventive or counselling services” not being included. This goes back to an earlier amendment, when we established that these references are actually recitals and not part of the substantive GDPR, so we are back in what is not normative language and issues that we cannot possibly talk about in relation to the wider context because we are talking about the law that will apply.

There are three points that need to be made and I would be grateful if the noble Lord would either respond today or write to me about them. The first is to be clear that the reference to “information society services”, which is defined, has nothing in it that would suggest that it is a problem in relation to the lack of inclusion of preventive or counselling services. The answer is probably a straightforward yes. Secondly, what are the preventive or counselling services that we are talking about? I think the context is that these are meant to exclude any data processing relating to a data subject if the data subject concerned—with parental consent if the subject is younger than 13 and on their own if they are older than 13—who is taking a form of counselling that may be related to health or sexual issues would not be allowed to be included. Is my understanding of that right? I am sure that it is.

Thirdly, could we have a better definition of preventive or counselling services because those are very wide-ranging terms? Yes, they come from a recital and perhaps in that sense they can be tracked back to earlier discussions around the formation of the GDPR, but they have to be applied in this country to situations in real life. I am not sure what a preventive service is and I should like to have it explained. Counselling services I probably do get, but do they include face-to-face counselling or is this about only online counselling services? Is it the same if the child is being accompanied by a parent or guardian? There are other issues that come into this and there is a need for clarity on the point.

While I am on my feet I should like to respond to the amendment moved by the noble Baroness, Lady Howe, who has campaigned long and hard on these issues. We would be bereft if she did not enter into this Bill with all its implications for children, given the wisdom and experience that she brings to the table. The point she makes is one of simple clarity. There is a need to be very careful about the evidence gathering on this issue and it is probably not appropriate for it to be left to Ministers in regulations. There needs to be a wider discussion and debate on the matter, perhaps involving the Children’s Commissioner and other persons with expertise. She has made her point very well and I should like to support it.

[Lord McNally (LD)]

My Lords, I associate myself with the amendment in the name of the noble Baroness, Lady Howe. We are in Committee and it is a probing amendment. When we discussed it with colleagues the feeling was that 13 might be the right age but, as the noble Baroness indicated, it needs probing and some thinking about.

There is a danger, particularly in a House with our age group, that we assume these technologies are understood by the young—even the very young. We all hear anecdotes of parents or grandparents who have to consult their eight year-olds on how to make various gadgets work, but that misses the point. A frightening amount of information is being freely given. I mentioned at Second Reading that my generation and my parents’ generation had thoughts of personal privacy that my daughter and her contemporaries seem to have no thought of. They are very happy to exchange information about themselves, what they do and where they are with gay abandon.

When we get to the very young it is very important to make sure—we will discuss this in later amendments, if not tonight—that there is sufficient understanding and information to make informed choices, otherwise we get into very dangerous territory indeed. Therefore we are, not for the first time, in the noble Baroness’s debt for raising these questions. Late as it is, it is right that we put on record that these things, along with the amendments that will follow in the next couple of groupings, need to be taken as a whole before we make a final judgment as to the right age.

Fox-Sky Merger

Debate between Lord McNally and Lord Stevenson of Balmacara

Thursday 20th July 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the Minister for repeating the Statement made in the other place. I am grateful to the Government for returning to the Houses of Parliament, both here and the other place, just before Recess to update us on progress.

We have been following the twists and turns of this saga closely. It is obvious, and absolutely right, that the Secretary of State is taking her quasi-judicial responsibilities very seriously. While we regret that she is minded not to refer the bid on grounds of broadcast standards, we support her decision, as I take it to be, to refer the bid to the CMA on the grounds of media plurality.

I have three main points that I hope the Minister will be able to respond to. The first is on the timing. Could I press the Minister on the possibility that the Secretary of State might announce her decision during the Summer Recess? Surely Parliament must have the opportunity to scrutinise any decision that she makes. It is not her job to operate to 21st Century Fox’s corporate timetable; in my view, the company would be better to abide by the rules as they currently are and respect the role of Parliament in this, and it should signal that very clearly. In my view, the Secretary of State should demonstrate to those at Fox that it is she, as an elected representative of the people, who is in charge, not them. I ask that the usual channels in this House also be kept abreast and that we be informed if there is to be a Statement so that we can respond to it.

Secondly, I want to press the Minister on the broadcasting standards investigation. I suggest it needs a bit more work before a decision is finally reached. Recently, compelling arguments for this have been made in the other place by my right honourable friend the Member for Doncaster North and the right honourable Members for Twickenham and for Rushcliffe—noble Lords will be aware that that is a pretty distinguished cross-party alliance. The truth is that the Murdochs have a history of regulatory non-compliance and of corporate governance failure that calls their commitment to broadcasting standards into serious question. Ofcom says that there are,

“significant concerns about Fox’s approach to ensuring Fox News content complies with the Broadcasting Code”.

We saw in the phone hacking scandal that senior employees and executives at News International failed to comply with criminal law or with acceptable standards of journalistic conduct—and, frankly, acted with a flagrant disregard of basic human decency. We see from the ongoing sexual and racial harassment scandal at Fox News in the United States that there is ample evidence of what Ofcom calls “significant corporate failure”.

Does the noble and learned Lord agree that it is time to look again at the fit and proper person test applied in the case of broadcasting standards? I heard it said by a distinguished former member of Ofcom that that test could be satisfied only if the person concerned was caught in the act of murder, had been prosecuted and that the body was exhibited before any such decision could be taken. That is probably a test too far. The noble and learned Lord will recall that, in the Digital Economy Act, several noble Lords from around the House joined together to table an amendment that suggested that there were other models for the fit and proper person test that might be more appropriate—particularly those applying under the Financial Conduct Authority. At that stage, we were persuaded by Ministers that it would be inappropriate to press the amendment to a vote, which I now regret, because they promised an early opportunity in the legislative timetable to bring forward recommendations on it. Can the noble and learned Lord confirm that that is still the plan and share with us which legislative vehicle will be used for it?

Of course, the best way to get at a lot of these corporate failure issues would be to proceed with the inquiry that has already been promised, which is specifically to look into part 2 of the Leveson inquiry. Will the noble and learned Lord confirm that that could still be implemented, because that could be very germane to what we are discussing today?

There is a third issue that we need to look at. On one hand, a lot of the problems that have been caused here are to do with the way in which the corporate veil hides individual actions in a way that would be inappropriate in the broadcasting area. This issue is really about control of media organisations. This is not a battle for the control of a particular broadcasting entity called Sky News; it is really a battle between old media and new media. At the heart of that lies control of personal data, in which there is considerable interest and investment being made. It is about data power—the power to know who is watching what and what their interests are will be more important as competition increases. We are talking about battles between the organisations concerned in this merger and organisations such as Google and Facebook. Does the noble and learned Lord believe that the CMA has the powers to investigate this aspect of media plurality? Without knowing where the data sources and how they are being used, it will be difficult for it properly to assess the impact on media power going forward? I look forward to hearing from him.

[Lord McNally (LD)]

My Lords, like the noble Lord, I welcome the Statement and the courtesy and openness with which the Secretary of State has approached her responsibilities. That is why I find it extraordinary that, having emphasised and carried out her duties to Parliament so assiduously, it could even be suggested that she should make a decision during an eight-week gap between Parliament rising now and returning on an issue that has been before her, regulators and Parliament for years. That would be an absurd assault on parliamentary dignity and responsibility, and I strongly urge her not to follow that road.

Part of the problem is the siloed nature of the decision, when what is needed, as the noble Lord said, is a holistic judgment about the fitness of this takeover. But that is how it has been played. The problem is also the siloed nature of modern business structures. Various parts of the structures can clear part of the siloed questions when we all know, as I have said, what the web is and that the spider is at the centre of that web.

I also press the Minister on whether this could lead to the second stage of Leveson and on the point made right at the end. I remember a few years ago somebody buying a canal and everybody thought what an absurd price he had paid for a canal—the age of canals was over. Then it suddenly dawned on everybody that he had not bought a canal; he had bought miles and miles of land on either side of the canal and made a fortune as a property developer. The same is true now, as the noble Lord has said. I have often pondered what on earth niggles Murdoch that he has tried, year after year, to get 100% control of Sky. What act of vanity is this? He may be vain but he also knows where a quick buck is to be made. It occurs to me that there is ample evidence that what Sky has is a database of some 13 million people, which could become increasingly valuable in the data battles ahead. I wonder whether the Secretary of State has asked the Information Commissioner’s advice on this aspect of the takeover and on how it fits into other legislation that we are considering. This is a foreign bid for a British database, which should give concern about how it is being handled. I go back to the friendliest of warnings: the Secretary of State would be very wrong to consider making this decision while Parliament is in recess.

Sky and 21st Century Fox: Proposed Merger

Debate between Lord McNally and Lord Stevenson of Balmacara

Thursday 16th March 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am obliged to the noble and learned Lord for repeating the Statement made in the other place. On this side of the House we welcome the decision that has been reached, that having been minded to go ahead with a full referral, the Secretary of State today confirmed that that is what she is doing. That is entirely right and appropriate. It is perhaps worth mentioning in the process, as alluded to in the Statement, that 21st Century Fox also welcomed the referral. That needs no further comment from me.

The two grounds on which the referral is made are broadcasting standards and the question of being a fit and proper person. I will deal with them both and ask a couple of questions around them. The broadcasting standards ground is a relatively new departure in this area because previous referrals have been done on much narrower grounds. Broadcasting standards is a very broad term but I welcome this. It is right that the consideration of this merger, since it involves a global media company, needs to engage with all areas that might affect the plurality of sources of information but also the entertainment and other features of the broadcasting world today. Will Ofcom have the power to investigate all corporate governance issues affecting 21st Century Fox, including anything that may arise from the phone-hacking scandal, any cover-up of illegality at News International, the rehiring of people responsible for corporate governance failures and ongoing sexual harassment claims currently being heard by a grand jury in the United States which, if proved to be the case, might lead to withdrawal of that company’s licence to broadcast there?

Secondly, plurality is a term that probably needs to be reinterpreted as technology has moved on considerably since the first time this issue was raised in the events of 2010-11. The work done at that time by Ofcom, which involved a 40-day period of investigating similar but not necessarily the same issues, resulted in a report provided to the Secretary of State. The Secretary of State has the power to publish that report but, as far as I can understand, that has not yet been published. Can the report now be made available, since it clearly bears on the issues before us? Whether or not it is published, can and will the issues raised in that report by Ofcom with the then Secretary of State be considered in the work going forward at this point?

I welcome Ofcom’s announcement that it will conduct the assessment under the fit and proper regulations at the same time as the other work it has been commissioned to do, so that we have a timetable of 40 days. That may prove a bit challenging given the amount of material that must be covered but it is important that we do so. The question of the “fit and proper” assessment is undefined in the legislation and it may be that there are, as we discussed in the Digital Economy Bill before your Lordships’ House, questions raised about exactly what tests are required for this. In some ways, it may be appropriate to reconsider those, and we may be able to find time in the remaining stages of that Bill to do so. Today, could the noble and learned Lord confirm that while the report issued after the fit and proper assessment at the time of the last merger investigation was largely couched in terms of directorial duties, this report will deal with not only individuals but the corporate structures within which they operate and that the level at which “fit and proper” persons are concerned will be adjusted to make sure that it covers the responsibilities inherent in a corporate as opposed to an individual structure?

Many of the questions I raise today and which are raised more generally by the approach that the Government are taking—which, as I said, we welcome—would have been considerably aided had they been informed by the work that could have been done under part 2 of the Leveson inquiry. That has been delayed and, for reasons that the Secretary of State gave at a recent meeting in this House, cannot be reopened until such time as judicial processes going forward are complete. I understand that and do not seek to raise any questions about it. But I put it to the noble and learned Lord that the issues that are likely to be part of that review will be germane to what we are discussing today, and I wonder if he has any comments on that.

Finally, on the question of powers, the founding document for the investigations being announced today is the Enterprise Act 2002. The current thinking is that sufficient powers to carry these out are available to Ofcom and the CMA under the different regulations that affect them. But will the Minister confirm that the Ofcom investigation has the power to obtain documents and compel witnesses to appear before it? That power is available to the CMA but may not be explicit in the regulations that are operating this investigation.

[Lord McNally]

My Lords, I, too, welcome the Statement and the way that the Secretary of State is approaching her responsibilities in this regard. The big problem is that we have been here before. In many ways, we are dealing with an issue that we have faced many times—since the end of the war there have been five royal commissions on the press, and Leveson—and yet we still have these concerns about power and influence.

I am still haunted by the word that Mr Murdoch used at the height of the hacking scandal when he appeared before the Select Committee and said it was the humblest day of his life. I always thought that that was an odd word to use. It is not humbling, it is not regretting, it is not “I am going to mend my ways”. In fact, everything that has happened since has warned us that there has been no change in the approach.

Can the Minister tell us what were the points that Fox contested? It would be interesting to know how it contested what we thought a week ago was a very good Statement. As the noble Lord, Lord Stevenson, said, where does this sit in the timetable of other decisions to be made about Leveson 2 and about setting up one of the great prizes of Leveson—a genuine, low-cost arbitration system under Section 40? It is important that we look at this in a holistic way, not a siloed way. I also worry about the 40-day time limit. We should not put false timetables on these decisions because we will be stuck with them for a very long time.

I welcome the Secretary of State’s emphasis on her assurances about respecting her quasi-judicial authority. Will the Government also guarantee that any meeting or communication between Mr Murdoch and the Prime Minister, or their emissaries, is made immediately public, as well as the record of any meetings that do take place? There is a long record of Mr Murdoch having access outside the direct ministerial responsibilities, in all the jurisdictions in which he operates.

The wording of the Statement gives us confidence but will the Minister assure us that we are in a process which is going to satisfy somebody he will be well aware of—the man or woman on the Clapham omnibus? When we get to the end of this process, will it feel right? Will it smell right? Will it look right? If it does not, we will have created another problem that we will have to face further down the road.

Sky and 21st Century Fox: Proposed Merger

Debate between Lord McNally and Lord Stevenson of Balmacara

Monday 6th March 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am obliged to the noble and learned Lord for repeating the Secretary of State’s Statement in another place. I am also very grateful to the Secretary of State for coming at what I think must be the earliest possible moment, because she said that she received notification of this only on Friday 3 March. It is very good that she was able to come so quickly. I also put on record our thanks to her for attending a meeting convened by the noble and learned Lord last week where a number of Peers from all sides of the House were able to ask her questions and examine a bit more closely some of the issues that relate primarily to the Digital Economy Bill but also to this subject.

My first question is about who is caught by the quasi-judicial mode, which was mentioned several times by the noble and learned Lord. The Statement refers to the Secretary of State and the Government. Will the noble and learned Lord confirm or deny whether that is departmental Ministers in DCMS or whether there are any other Ministers involved? I will be interested to know to what extent we are able to ask questions and gain answers over this period, which may last a number of weeks.

An important point is that the Statement does not cover the corporate structure which we are now facing with this proposed merger. We know that 21st Century Fox indicated on 9 December that it was making a takeover approach for Sky. It already owns just over 39% of Sky shares, so it is the balance of the shareholding. We know that, after a period of pre-discussion and debate, the European Commission was formally notified of the bid on Friday 3 March. It is important to get it right because there have been changes since we were in this process six years ago. 21st Century Fox is one of two successor companies of News Corporation, which was split up in 2013. It is important that we recognise that Fox is the legal successor of News Corporation and deals primarily with the film and television industries and another company, new News Corp, is a new company focused on newspapers and publishing that was spun out of News Corporation. In the UK, new News Corp owns the Sun, the Times and the Sunday Times. The point is that, although the corporate vehicle under which the acquisition is being made is 21st Century Fox, it is common understanding that the same principles are involved on both sides of that split and therefore the inquiry needs to take account of that. From what the Secretary of State has said, I think there is a willingness to go a little bit further than the straightforward 21st Century Fox approaching Sky. I will be grateful if the noble and learned Lord can respond to that at this stage.

The Secretary of State made the point that there are two dimensions to the inquiry that she is minded to look at. One is plurality. The point was made that, if this bid is successful, it will put an even greater amount of media power in the hands of the Murdoch family in particular and the people involved. Ofcom therefore needs to look at the whole of the group of Murdoch companies in assessing whether the Sky takeover would threaten media plurality. That is a very important aspect in relation to what I have just said about the ownership and control of the family companies that are involved.

The world has changed since 2010-11 when we last looked at this, and Ofcom will need to range much more widely across the media and look at not just newspapers and traditional news delivery through broadcasting but at social media, news aggregators and others from which news is taken. This is quite a substantial change in operation, and I will be grateful if the noble and learned Lord has any observations on whether the resources that are available to Ofcom will be sufficient to cope with that new approach and challenge.

The second ground on which the Secretary of State says she is minded to intervene is on commitment to broadcasting standards. I notice that this section of the Statement is quite carefully phrased. The convention is to refer to the fit and proper test required under the Broadcasting Acts for those who hold a broadcasting licence. Sky holds a broadcasting licence and therefore the controllers of Sky have to be fit and proper persons. The narrow point here is the extent to which that is focused as a process on individuals who may or may not be the named licence holders or on the corporate structure within which they operate. I would be grateful if the noble and learned Lord can confirm that the intention, even though it is not explicit in the Statement, is to look at not only at the individuals but at the corporate structure within which they operate because clearly there are issues on both sides of that.

This is a very important issue, which we will return to in a few days when we understand more about the European intervention notice and whether or not that has been called, and also the extent to which Ofcom will report and whether or not that Ofcom report will lead to further work by the CMA. It is important we get some of the facts on the table now, and I look forward to hearing further from the noble and learned Lord.

[Lord McNally (LD)]

My Lords, from these Benches, I welcome both the speed and tone of the Statement from the Secretary of State. She has been careful to keep to the legal niceties, although any reading of this would welcome what she considers the merits of the case, particularly, as has been said, her emphasis on media plurality and the commitment to broadcasting standards. These were at the heart of the debate we had over a decade ago—putting into legislation the right to intervene on public interest grounds—led by my noble friend Lord Puttnam, with the support of the noble Lord, Lord Lansley.

It is important to remember that, if anything, the arguments we had then which finally persuaded the then Government to accept the public interest test have got stronger over the last decade, in no small measure because of the behaviour of companies and organisations in which Rupert Murdoch has had an influence. We now face that problem again. Does the noble and learned Lord agree that this is still a major issue with the Murdoch empire in particular, and given the need to take on board how these companies change their structures without really ever changing the spider at the heart of the web?

The other, equally important point, as has been said, is the changes in broadcasting and media over the last decade. Mr Murdoch may play a big part in many ways, but he will soon be a small player compared to some of the giants wandering the media jungle. Does the Minister agree that the danger is that, if we get this wrong, we will set precedents which, when those big boys come along, will leave us in a very weak position in defending the very principles the Secretary of State so eloquently expressed in the Statement?

Crime and Courts Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Tuesday 23rd April 2013 Lords Chamber

[Lord McNally]

I am reliably informed, post haste, that such aggregates in clouds are not covered. If by any chance that is not true I will write to the noble Lord and make sure the letter is circulated to the House. I cannot see over my shoulder but I sincerely hope that the Box is currently nodding firmly.

[Lord Stevenson of Balmacara]

I can inform the Minister that the Box looked absolutely transfixed by that recent exchange. I do not know who is more surprised, them or us, by the ability of the noble Lord, Lord Avebury, to come to the white heat of the technological revolution and ask a question that has stumped us all. On this side of the House, we would venture to say that we think they are covered, but that just adds a little piquancy to the debate which will, I am sure, be resolved before we get too far down the line.

Following the Leveson trail is a bit like appearing in “Rosencrantz and Guildenstern are Dead”. We pop up at odd times as other events seem to be filling the spaces. We pay a small contribution to it and then we discover that the whole event has moved on, another Bill has appeared, and yet another set of amendments appears which look awfully like the ones we have just been discussing. Only earlier today, we knocked out one set of amendments, yesterday we could have done the same, today we hope they will stick. I want to reassure the Minister that we will be supporting him in this event and he will not need to use the wiles he displayed when he almost reached across the Dispatch Box to my noble friend Lady Hayter to try to persuade her not to push her vote. The vote was unsuccessful so he won out in the end anyway: he has all the luck.

As the Minister has explained, these amendments, inserted into the Bill late in the process, provide for new rules on exemplary damages and costs. They are an essential part of the cross-party agreement on a royal charter which is part of the new framework of independent self-regulation, guaranteed by law, as recommended by Lord Justice Leveson. This part of the Bill aims to provide publishers with incentives to sign up to the new system of self-regulation that should meet the criteria set out in the royal charter. Publishers that join a recognised regulator will receive protection from the award of exemplary damages in media disputes, the opportunity to use an arbitration service and cost benefits from having access to this service. That is one reason why it would benefit local as well as national newspapers. If a complainant chooses not to use the arbitration service, they can still be liable for costs even if they win.

Lord Justice Leveson’s report was mainly about the press but the original drafting of this Bill had the unintended effect of catching blogs. That said, Lord Justice Leveson did express the hope, in Recommendation 73 of his report, that online publishers would also join a regulator. The Bill therefore needs to be amended to ensure that exemplary damages did not apply to blogs and they could receive the benefits of joining a recognised regulator. In recognition of the fact that this is a complex area, your Lordships’ House agreed a placeholder amendment on 25 March. The Government’s decision to hold a mini consultation and pause for reflection to consider how the Bill should deal with the blogosphere was sensible and we agree with the policy objectives that the Government are seeking to address to exempt micro businesses from the definition of relevant publisher where they are a blog or where their publications are merely incidental to their other businesses and to enable such micro businesses to receive the benefits and cost incentives of joining a recognised regulator. The Minister has been helpful in setting out a number of accompanying thoughts around these points and the issues relating to what would and would not qualify, and I think they will bear further consideration once we see them written up in Hansard.

However, the main point is that the amendments we are now looking at and which we support define a small blog as one whose turnover is below £2 million and has up to 10 employees. It exempts such businesses from exemplary damages and enables them to benefit from the cost advantages of an arbitration service if they join a regulator, and that last point will be particularly welcome to the community. As I say, we support the proposals, and I am grateful for the manner in which they have been pursued within the all-party agreement which has underpinned the whole process, so we will not be dividing the House.

In the time available, I would like to make a couple of ruminations about some of the issues that we are talking about today, and within that are two questions to which I hope the Minister will be able to respond. The first is that the digital world as we know it is changing rapidly and the complexity and parliamentary arithmetic of changing the royal charter means that it will be hard to alter the legislation after this Session, so it needs to be right. What consideration have the Government given to the health and future of the blogging industry, and can the noble Lord share with us the Government’s thinking on this point? I understand that the indicators for a micro-business have come from a definition used by BIS, and in that sense they are not specific to the blogosphere. I have had representations already, and I am sure that other noble Lords will also have received them, from those who argue that the figures being used are on the high side, as rarely do we find 10 employees or even an annual turnover of £2 million in a blog company. That would make for a very healthy company, but it is not how the sector operates. Can the Minister estimate roughly how many blogs this definition would capture at present?

I turn to a related but more general point. We are talking about an industry that is in the process of change. For example, the print circulation of newspapers is estimated to shrink by at least a quarter in the next five years and yet we are facing a rather bizarre situation where newspapers are exempted the full 20% rate of VAT on print sales despite the fact that in many cases online traffic now represents the majority of their audiences. This is something which is bound to grow as we go forward. In fact, we are fast approaching a situation where what we previously believed, which is that we in this country do not tax reading, is becoming the reverse of what will happen. Those who read using electronic means, which will include those who are caught by this amendment, will be paying 20% VAT. Is this something that the Minister can say is under consideration, because it seems to me that we will need to face up to it before too long?

I am very grateful to the Minister for mentioning Mumsnet because it was the subject of discussions in another place, and others have raised it. The break point that he expressed is one to which we may need to return. Perhaps when he concludes he will reflect on this. At what point do those who blog and use it as a campaigning tool get caught? There is some doubt in what he has said about whether Mumsnet, which is not a charity but exists largely to circulate material that is in favour of a particular point of view, could possibly be caught by this exception. It is one of a number of areas in which, as the Minister has said, time will show us what emerges. However, a little more clarity at this stage would be helpful.

Finally, the Minister was keen to assert that it would not be sensible at this stage to define a blog. He was then caught quite quickly by a question related to blogging which illustrates that sometimes it might be sensible to have in primary legislation clear definitions which we can all use. I understand and support the idea that it is probably wrong to try to be definitive at this stage and that we should see how things go, but if that is the case, are there are any thoughts about how the Government might consider revisiting the issue within a reasonable time if it turns out that we need to move? After all, as I have said, this is the digital age and things are moving fast. What is a blog today may change into something else, and we want to be sure that we have the flexibility which I do not currently see in the Bill.

[Lord McNally]

I thank the noble Lord, Lord Stevenson, not only for that reply but for the constructive role he has played in getting us as far as we are today. It is important to retain an all-party approach as we take this through. The noble Lord asked how many blogs this amendment will cover. We cannot provide an accurate estimate because blogs are constantly started up and then stopped. However, we feel that this is the right figure in order to exclude all those who we hope and intend to exclude. On the definition of a blog, I was tempted to call in aid that used by Clement Attlee when he wanted to exclude Trotskyists from the Labour Party. They said, “How do we know who are Trotskyists?”, and he said, “It’s a bit like an elephant—when you see one, you know one”. In a way, we are groping with blogs in an age of technology that is constantly and frighteningly rapidly changing.

We have tried to get some key features which distinguish blogs from online newspaper reporting. A blog is used primarily for an expression of opinion. Multi-authored blogs usually cover a single subject of interest. In all cases, blogs do not report in a factual and neutral way on news or current affairs but are led by the personal views of the individuals. While an online news site may contain comment, opinion or bias, comment pieces are not its principal focus. What constitutes a blog may change over time as convergence increases.

It is a difficult area. When we debate these areas, we often point out that future-proofing is virtually impossible. We hope that the definition I have given today has been sufficiently carefully drafted to provide the maximum possible clarity to organisations seeking to know whether they are caught. We have produced a handy set of questions on our website to help organisations to work this out. This is intended as guidance only. Ultimately, as in the case of all legislation, the decision on whether an organisation comes within or outside the scope of any particular piece of legislation will fall to the courts. The intention of the definition is to capture news publishers who were the focus of Lord Justice Leveson’s inquiry and his subsequent recommendations. They are intended to act as the key incentive for those publishers to join the new press regulator, while also protecting those not intending to join.

On Mumsnet, protection is the interlocking test, but such an organisation may branch out or develop a kind of activity which takes it into the realms of news and newspapers—a news media. Again, we would have to be flexible. If an organisation develops in a way that makes it a news organisation, it would have to consider its position. Lord Justice Leveson, in making his recommendation and recognising the changing architecture of our media, specifically said that he hoped news organisations that were primarily online would consider themselves willing to join any new regulator.

Parliament at both ends of the Corridor has done a good bit of business in dealing with a specific concern that was raised. I thank the noble Lord, Lord Stevenson, for his very constructive and helpful approach, not only at the Dispatch Box, but in bilateral discussions.

Crime and Courts Bill [HL]

Debate between Lord McNally and Lord Stevenson of Balmacara

Monday 25th March 2013 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I am grateful to all noble Lords for participating in this debate, which has echoed a number of occasions on which we have been able to touch on these topics in the context of several Bills over recent months. We have not always stood opposite the noble Lord, Lord McNally, although he has been quite strong, particularly as we saw his cherished Defamation Bill begin to slip away from him. However, I think I see it looming in the background, and the noble Lord has cheered up again, which is nice. We also touched on them in the Enterprise and Regulatory Reform Bill, where we did a great deal of work with the excellent amendments tabled by the noble Lord, Lord Skidelsky. They were not moved, but they certainly raised the issues that we are considering today. Of course, we now have the Crime and Courts Bill before us, so there is endless flexibility, and long may that last. I should like particularly to thank the noble Lord, Lord Skidelsky, who has been tireless in tabling amendments that give effect to the detail of the Leveson recommendations and reinforce the fact that the royal charter and its statutory underpinning have been agreed by all three parties in an historic agreement.

We need to recognise that the debate on Leveson has moved on. The most important thing now is to be clear on what the government amendments intend to do and avoid any unnecessary scaremongering. I shall focus on a number of the amendments before us and, like the noble Lord, Lord Skidelsky, I should like the Minister to comment on how he intends to respond to them.

My first strand is on exemplary damages, but I have been sufficiently warned off by the noble Lord, Lord Phillips, even to go down this route. However, there are a couple of points that I would like the Minister to respond to. I understand that a considerable amount of time was spent in the all-party talks on the question of what happens to damages when it transpires that the facts of a case have changed in that the court has facts which were not available to the regulator. Can the Minister help us on this issue as it has happened in recent months? Can he confirm that this is a matter which will be returned to?

Amendment 11C clarifies that the common law gateway for exemplary damages will not apply. Can the Minister confirm that the “for profit” test is not required if the “outrageous” test is met? Amendment 11D makes it clear that a relevant publisher will be vicariously liable for wrongdoing by an employee or a person contracted to work for a publisher which results in liability for exemplary damages in accordance with the ordinary common law tests. Can the Minister confirm that further work will be done on this question? It is a key issue that is dealt with succinctly in the amendment tabled by the noble Lord, Lord Skidelsky. Vicarious liability bears on the morality and culture of the press. It is important that the Government should put on the record today that they agree with the noble Lord, Lord Skidelsky, and that they intend to return to this issue in the Commons to the extent that this may be required. The recent history, after all, shows that it matters. We do not want a situation where publishers literally have a get-out-of-jail-free card, and it would be strange if the media were to be in a privileged position in relation to vicarious liability compared with all other interests in this country. Lastly in this group, Amendment 13A is intended to reassure small publishers that, in deciding the amount of exemplary damages, the court will have regard to the means of the defendant. Can the Minister confirm that the Government will return to this issue when it is considered again in the Commons?

The second group of amendments that I would like to look at contains those amendments that are intended to make it clear that to benefit from cost protection the publisher would have to participate in the self-regulator’s arbitral scheme. With regard to Amendment 17E, the Government’s intention is that in order to benefit from cost protection the publisher would not only have to be a member of an approved regulator but would also have to participate in the scheme. There are those who have argued differently. Surely it makes no sense to provide benefits to publishers simply on the basis that they recognise that an arbitration scheme exists. The point here should be that it is the active participation by publishers in the scheme that entitles them to get cost benefits. In any case, as Lord Justice Leveson pointed out, an incentive to join an arbitration scheme is good for all publishers and will help them and the claimants. Can the Minister confirm that this is his understanding of the situation and that the Government stand ready to confirm this position in the other place?

Amendment 17J asks for clarification, as raised by the noble Lord, Lord Skidelsky, about the commencement of Sections 44 and 46 of the LASPO Act 2012, which was taken through the House by the noble Lord, Lord McNally, so he should know his stuff on this. I should be grateful for some confirmation about the issues that arise from that question. Amendment 19B would require that the recognition panel, which approves the self-regulator, is subject to freedom of information. This is an important matter which surely should be brought forward at this stage. After all, it is something that can be dealt with by secondary legislation. No one would surely expect that the recognition body wishes the power to act in secret. This really is important, so will the Minister give us an assurance that the relevant statutory instrument will be brought forward in good time before the regulator starts its work? Amendment 131A concerns relevant publishers which hold broadcasting licences. The drafting here is a little opaque. We seek an assurance from the Minister that a person who holds a broadcasting licence is excluded only in so far as they publish news-related material in the course of their broadcasting activities. Can the Minister confirm that this is not intended to cover the whole publishing activity of such licence-holders but only their broadcasting activity?

My Amendment 131F, which was put down earlier and is part of this group, has, I think, been overtaken by events. I refer to the extensive introduction which the Minister gave to Amendment 131BA, which provides for:

“A person who publishes a small-scale blog”.

I think it is meant to be a peg to allow for further discussion and debate for this event to happen in the House of Commons. On the basis of that understanding, for which I am grateful to the Minister, I will not press that amendment when the time comes.

Finally, there has been some talk about dates and the time that all this comes into effect. I should be grateful if the Minister could be very clear about what he understands the implementation date to be.

[Lord McNally]

My Lords, I am extremely grateful to all noble Lords who have contributed to what has been a very thoughtful debate. I should perhaps start with the intervention by the noble Lord, Lord Black, because I am not sure whether it was the case for the defence or a warning of battles to come. He said that Lord Justice Leveson was as immune from being criticised as Florence Nightingale. I would have thought that the lady would have got a fair old battering from the noble Lord, Lord Black, if his speech was anything to go by.

Looking round the Chamber and listening to the contributions, and following this debate right through, I have never been in any doubt that many of the politicians in this Parliament would literally lay down their lives for the freedom of the press. It is not the case, as has been suggested in some of the very newspapers over which the noble Lord, Lord Black, has influence, that this is some Orwellian plot against the freedom of the press. As my noble friend Lord Phillips said, if by chance we saw what follows as an attack on the freedom of the press, I believe that the people who would be most likely to leap to the defence of the press would be not some of the media barons but noble Lords in this Chamber tonight and Members in the other place.

Although it was a well thought out and well delivered critique, I regret a little bit that nowhere in the remarks of the noble Lord, Lord Black, was there any apology. There was no recognition of the law-breaking on an industrial scale, no understanding of how deeply wounded the victims of press intrusion have been and no recognition of the deep disgust of the general public, which is reflected in the opinion polls that we have seen. I understand the message that was delivered. He asked me to pause. I genuinely ask the noble Lord, Lord Black, to pause and think whether he could not go back to those with whom he has immense influence and say, “Rather than trying to wreck this, couldn’t we see if we could make it work?”. To my mind, the prize is a great one—a free press, but a free press operating to the highest standards of ethics and one that is law-abiding. I believe that that is within our grasp if we can work together on this.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord McNally and Lord Stevenson of Balmacara

Tuesday 27th March 2012 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, the noble Baroness, Lady Coussins, has introduced this group of amendments with her customary fluency and passion, and she has been joined by other speakers who have made the case well. As has been pointed out, this measure risks damage to the UK’s reputation for justice to those people who have suffered damage to their human rights caused by companies based in the United Kingdom. I am sure that none of us wishes to see that happen.

We have support from all around the House, and we are grateful to those who have joined in on these amendments. The settled view of your Lordships’ House is clearly that there is a real danger that, if this Bill goes through in its present form, the changes that it makes to the way in which international human rights cases are to operate, combined with the restricted damages that the Rome II regulations impose on the level of damages that can be awarded to claimants, will make it impossible for such cases to be mounted in the UK in future.

As the House has heard, several very important independent charities have been lobbying hard on this issue. Several meetings have been held with the Minister and correspondence has been exchanged. We hoped that an accommodation could be reached, and we went to see him yesterday in the hope that that might be possible. He e-mailed us today to say that he could not accept our amendments.

It is clear to me that while on the one hand the Government do not want to be responsible for preventing these cases continuing in future, they have not so far been convinced that it is highly probable that they will occur in future. Why is that? The arithmetic, as has been said, is very clear. We seem to be in a situation where the department’s overriding concern that the architecture of the Bill should be retained is working here against good legislation. What other arguments can there possibly be? We have heard from those directly involved in these cases and we know what the figures are. It is clear that the facts outlined by the noble Baroness, Lady Coussins, and my noble friend Lord Brennan that the Government are wrong. I hope that when the time comes the noble Baroness will test the opinion of the House, and we will be supporting her in the Lobby.

[Lord McNally]

My Lords, I confirm that we have been in regular discussions about these amendments, and I regret that I am not able to accept them today.

There have been a number of comments about costs and indeed about the Trafigura case. What strikes me most about that case is that the £30 million that was won in damages worked out at about £1,000 per victim—against, as has already been accepted, legal costs that at one time, until they were beaten down, were running at £100 million. To me, that is an obscene system.

With regard to the reforms that we brought forward, we have said that we believe CFAs will continue. We are also introducing damages-based agreements. Far from welcoming them, though, the CBI and others worry that those may well provide funding in this area. So, it is not that the Government are opposed to bringing companies to account for their behaviour. I just do not believe in the rather broad claims by the noble Lords, Lord Brennan and Lord Judd, that this issue will dramatically affect the lives of people in developing countries. There are other areas of policy that are going to do much more than that.

I make clear that the Government strongly support claims arising from allegations of corporate harm in developing countries being brought, and we support the protection of damages for personal injury. Where we disagree with the supporters of the amendment is that we do not believe that our plans would prevent such cases being brought or ultimately damage the ability of NGOs and others to hold big business to account.

An exception along the lines proposed is in our view neither necessary nor justified. It is not necessary because reformed “no win no fee” arrangements will still allow cases to be brought. It is not justified because it would undermine the wider rationale for the Jackson reforms in Part 2 of the Bill, which should apply across civil litigation without any exceptions. In doing so, it would introduce unfairness between different types of claimant.

We recognise, however, that, following the Rome II regulations, damages in these cases can be relatively low, and they will not be subject to the 10 per cent increase available for other claims. The costs awarded can nevertheless be extremely high, as was demonstrated by the Trafigura case. The question is whether any exception should be made for these cases either on a wider basis, as proposed in Amendments 21, 22, 23 and 26, or on a narrower basis, as proposed in Amendment 27. I concede that in putting forward Amendment 27, the movers tried to put forward a narrow-based solution.

The Government have listened to this debate and those that went before, and we have reflected carefully on the points raised. We have held many meetings with interested stakeholders and NGOs over the past months, and the Government are fully aware of the strength of feeling on this issue. I have looked again at the evidence that has been presented, including reports by Professor Rachael Mulheron of the University of London and Mr Smith of First Assist. Both reports make the general case for recoverable success fees and insurance premiums to continue in these cases, but they do not present any figures showing why these cases could not be brought in future. During our discussions with the NGOs we have asked for such evidence but it has not been forthcoming, even though we have asked them for more detailed figures.

The truth is that the available evidence shows that these cases, though few in number—about 10 in a decade—have historically been highly profitable for the legal firms involved. Although under our plans the margins available would be reduced, they are still likely to remain attractive. I remind noble Lords of the sums involved. Since the previous Government introduced the recoverability of success fees and insurance premiums in 2000, we know that there have been only around 10 of these cases, mainly undertaken by a single firm of solicitors. Most of these cases have succeeded or settled, but some claims have been pursued in which costs have not ultimately been recovered. The figures suggest that in those cases that were not pursued to trial, there were disbursements of some £131,000 and legal costs in the region of £1.4 million. I appreciate that those figures will not cover all costs in all cases but they should be a fair ball-park indication. £1.4 million sounds like a lot of money for a firm to bear in what are effectively losses on a case not pursued and won until the substantial sums that have been received in success fees are considered. We know that in the case of Trafigura alone, success fees—intended to cover the costs in lost cases—of around £29 million were allowed by the Court of Appeal. Those figures amount to a net gain for claimant lawyers from these cases over the past decade of more than £27 million from the success fees for Trafigura alone. That does not include all the success fees in the other successful cases.

These figures speak for themselves. They cast all emotion aside and demonstrate the substantial gains in legal costs from these cases and the proportionately much lower costs expended. When the ratio of earnings to losses is more than 10:1, the current system can, to put it mildly, bear some reform. Therefore, while I recognise that claims against multinationals can be complex, the changes that we are making to the CFA regime will not prevent these cases being brought in the future. They can still be brought but the costs will be more proportionate. As Lord Justice Jackson recognised, a greater incentive for claimants’ lawyers to work more smartly is needed so that they incur only costs that are justified when bringing a claim, rather than allowing costs to escalate.

It is worth pointing out, as I have previously in the House, the criticism by the Court of Appeal of the costs claimed by the claimants in the Trafigura case. In that case, the court itself questioned whether some of the work undertaken by the claimants’ lawyers was necessary. It criticised them for seeking costs of £100 million in a case that resulted in payment of £30 million in damages. It is not for me to question the conduct of those involved, but it needs to be borne in mind when looking at the extraordinary costs claimed in that case alone. I should add—again, as I have pointed out to the House previously—that in that case the defendant’s costs were approximately £14 million, which is around one-seventh of the costs claimed by the claimants.

I turn now to Amendment 27, which seeks to allow for the recoverability of “after the event” insurance premiums to pay adverse legal costs, including expert fees and other disbursements. In doing so, the amendment goes much wider than just the cost of funding the expert reports for which we have provided in the special situation of clinical negligence cases. The amendment would potentially cover paying the other side’s costs, too, but this is not necessary because we are introducing a system of qualified one-way cost shifting in personal injury cases, which will protect losing claimants from having to pay the other side’s costs. We have discussed making exceptions in relation to expert reports in other contexts, but we do not believe that an exception is more needed here than in other cases. As I have said, the costs recovered in successful multinational cases have been substantial and could provide funds towards paying up front for reports where needed.

As I indicated on Report, on several occasions my officials and I have met representatives of the NGOs that support these cases. However, we have not been persuaded that such cases cannot continue to be brought when our changes are implemented. Nor are we persuaded that they justify an exception in the Bill that would be unfair to other, no less deserving claimants.

The House will be aware of all the arguments that I have rehearsed today, in Committee and on Report. We have treated subsequent discussions with the seriousness they deserve, and we have listened carefully. However, the Government continue to believe that reform is unavoidable, necessary and overdue. In this case in particular, we should not mix up a challenge to overgenerous costs with a denial of access to justice. Access to justice is precisely what the reformed CFA regime will protect, but as part of a more proportionate and balanced system. Therefore, I urge the noble Baroness to withdraw her amendment.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord McNally and Lord Stevenson of Balmacara

Monday 12th March 2012 Lords Chamber

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

The noble Lord, Lord Clinton-Davis, was always known for his impetuosity.

I pay tribute to the noble Lord, Lord Stevenson, and his ongoing interest in debt matters. However, this amendment would have the effect of broadening the availability of legal aid for debt cases, contrary to our current proposals, which are to retain legal aid for priority debt cases only, where the individual’s home is at immediate risk of possession because of rent or mortgage arrears or involuntary bankruptcy.

It is never an easy decision to restrict the availability of funding but economic reality dictates that we focus scarce resources on the cases that are the highest priority. The Government have taken a principled approach to making spending reductions, prioritising funding for those categories of case that are most serious, such as where life, liberty or immediate loss of home are at stake. The necessary corollary of protecting funding in the most important areas is that we have to make tougher choices in the lower-priority areas.

When making these decisions, we have taken into account the presence of alternative appropriate forms of advice. It is simply not the case that legal advice is the only—or even the best—response to debt problems. Figures show that liability for the debt itself was reported as successfully contested in fewer than 2 per cent of cases in 2009-10, and also reveal that 62 per cent of legal help funding for debt matters was spent not on complex matters of law but on negotiating payment arrangements and advising clients on managing their affairs better.

We recognise that debt problems can be difficult and stressful for the individuals concerned, but we believe that what people often need is practical advice and support, rather than specialist legal advice. This help is quite widely and effectively available from organisations such as Credit Action, the National Debtline, the Consumer Credit Counselling Service and the Insolvency Service inquiry line and website. Local authorities also signpost people to local sources of advice and assistance on debt matters. In addition, the Money Advice Trust, to which the noble Baroness, Lady Coussins, referred, has recently launched “My Money Steps”, an online tool for providing advice for people with debt problems. The Consumer Credit Counselling Service also offers a free online “Debt Remedy” service.

Such sources of help are best placed to deal with issues like debt relief orders, which this amendment suggests should be brought back into the scope of legal aid. These orders are relatively informal procedures, used by people who owe limited amounts of money and do not have assets. Indeed, the current legal aid scheme does not pay for their completion.

Given the availability of alternatives, and the pressing choices forced upon us by the economic situation, it does not seem a wise use of scarce resources to continue funding widely available legal advice, much of which replicates advice available elsewhere. We must move away from the assumption that for many problems that are fundamentally non-legal, the only answer is for the state to pay for legal advice.

I understand that this amendment is motivated in part by the noble Lord’s concerns about funding for citizens advice bureaux to provide debt advice. As I have said in earlier debates, we share that desire to see what can be done to help to ensure sustainability for the non-profit sector. However, let us not overstate the impact of our changes in legal aid on CABs. Legal aid funding is intended for specialist advice, not for cross-subsidy of other activities. As a matter of practice, in 2010, 85 per cent of all bureaux funding came from sources other than legal aid and half of all bureaux do not hold a legal aid contract at all. Moreover, it should be borne in mind—I am sure that the Opposition will be glad to know this—that we have already provided £20 million, which has come ahead of reductions in legal aid spend.

It is worth remembering that CABs have not had any cut in legal aid spend and will not until 2013. Of that £20 million, £16.8 million assigned to England is being used for the Advice Services Fund to support not-for-profit providers in delivering essential advice on debt, welfare benefits, employment and housing. Despite the concerns of the sector, the Money Advice Service will continue resourcing the existing free face-to-face debt advice services after 31 March, so that people in need have access to good, free advice. The Financial Services Authority has agreed to fund this provision from April.

I also understand that the Cabinet Office’s review is expected to conclude shortly and will provide recommendations on proposals to secure long-term sustainability of the sector. As my noble and learned friend Lord Wallace pointed out, it is only nine days to my right honourable friend the Chancellor’s Budget. Therefore, I would ask the House to be patient and to allow us to bring this important work to its conclusion.

It is always easy to make the case for spending but tough times require tough decisions. I hope that even our critics accept that we are making genuine attempts to protect the not-for-profit advice sector, not least by the pressures brought to bear by my noble friend Lord Shipley at earlier stages of this Bill and by other Members of this House who have raised the specific issue of the CABs and the not-for-profit sector. I have given assurances about this and, against that backdrop, I urge the noble Lord to withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Baroness, Lady Coussins, for her contribution to this debate and for sharing her experience of working directly in this field, which I echo. I recognise many of the points that she made around that. It was also nice to have the unprompted support of the noble Lord, Lord Clinton-Davis. I seem to be having a little run of these things because the previous time I tried to speak about this subject, the noble Lord, Lord Best, came in on housing, which, although again relevant, was not exactly helpful to my support. Never mind, we will battle on.

At last weekend’s Lib Dem conference, a Motion was passed calling for:

“The protection of fair and equal access to justice, through … A properly funded system whereby access to legal advice and representation before the courts is not denied to those otherwise unable to bear the costs”.

It was unanimously passed but I notice that the Minister did not mention it when he made his remarks a few minutes ago.

A lot of the points that I made, which were picked up by the noble Baroness, Lady Coussins, were about the difference that had to be made between legal advice and generic advice. It is certainly true that a lot of work is going on in the generic debt advice field but we have been facing problems in terms of legal advice. I notice that in his comments the Minister made more of a case for support of the voluntary sector in this area, which of course we are grateful to have, than about the individuals who we think will be affected by this. For example, if the bailiffs are at the doorstep seeking to seize someone’s goods and chattels, I think that everyone in this House would agree that they are reasonably said to be facing serious direct consequences. Yet, under the present proposals, they would neither be eligible for legal aid to contest the original order nor would they be able to access legal aid to challenge the manner in which the order had been carried out. Indeed, we know a lot about that. There are quite serious difficulties within the legal advice sector of debt which have not really been picked up in this debate so far.

It was interesting that the Minister made the point that currently debt relief orders were not being funded to any great extent by legal aid and that, to some extent, legal aid should perhaps not be used at all for this. The key reason why the DRO scheme is successful is its lower cost, which was much trumpeted by the Insolvency Service. That is because the administration fee is £90, of which £80 goes to the Insolvency Service, leaving £10 for those who have to administer it. I have looked carefully at the way in which these forms are created. It would take me a great deal of time to work through these things and I am an accountant. However, specialist support and advice is needed. I think that it is ingenuous of the Minister to say that somehow this will survive. My charity estimates that it costs us about £350 per case to deliver a completed DRO. Where will that money come from? I do not think that we have had any answer to that.

Finally, the way in which the noble Lord went on seems to suggest that he has not read the BIS Select Committee report on debt management, which was published last week. The report states:

“Citizens Advice informed us that the legal aid budget for debt advice in England and Wales is due to fall by 75 per cent from 2013”.

The noble Lord admitted that there would be some changes after 2013. The report continues that the,

“figures, from the Justice Department, suggest that the number of people currently helped with debt problems will fall by 105,000”,

which is a significant number.

Later in the report, a BIS Minister is reported as recognising that,

“the cuts to legal aid could be a problem. Clearly for particularly some Citizens Advice Bureaux and other advice agencies, it may well have quite a big impact … I am afraid these are not easy times. There are cuts being made”.

The situation facing those in debt in this country—very often not of their own accord and they certainly are not the feckless poor—is really difficult. I do not think that these proposals will help. I should like to seek the opinion of the House.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord McNally and Lord Stevenson of Balmacara

Thursday 9th February 2012 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I support the amendment so eloquently introduced by the noble Lord, Lord Ramsbotham. From what he said, I got the sense that it is really a probing amendment and that he did not expect to receive much support for it. However, he made such a powerful case that I hope the Minister might be swayed to think again about some of these points. As we have already heard in this Committee, it is obvious that many people enter prison without the capacity to read and write, let alone to hold down a job when they come out on release. Therefore, examples such as the Toe by Toe programme should be mandatory. Indeed, it is a pity that the amendment has not specified that it should be a requirement on the Secretary of State.

We have no objection at all to what is being proposed. Indeed, we would regard its prescriptive nature as being of benefit in the sense of tying down, as the noble Lord, Lord Ramsbotham, said, what is required of prisoners—that they should have a full, purposeful and active day, and that every prisoner should undertake something instead of staying in their cells so as to at least become engaged and appreciate what is necessary in order to succeed outside prison. It would therefore also reduce the level of reoffending.

There are some good examples of work with prisoners having been done by private employers. National Grid had a project at Reading in which I was involved in an earlier life, and I thought it was absolutely exemplary. It provided what seemed to be the critical path forward for those due to leave custodial sentences in the sense that it provided them with housing, jobs and training. It started before the prisoners left in order to bring their reading and writing up to speed, and it allowed them to learn a skill—in this case, fitting—which meant that they were able to operate as soon as they left. As I understand it, that programme is still going. The recidivism rate was very small indeed, so the programme was certainly worthy in that regard. It also had the advantage of satisfying a need on the part of employers—they had realised that they were not getting an adequate supply of people to do the necessary jobs, and they found that this programme provided a ready supply.

Therefore, there can be a win-win in what the Government and private enterprise are looking for. Indeed, one might say that it could apply to charities and public bodies and not just to private companies. However, the essential point of the amendment is that, if it is decided that there will be employment from such activities in prisons, it should be done properly so that those who benefit from it have skills and qualifications that are nationally recognised, and it should be done in all cases so that we have a better outcome from the prison element.

[Lord McNally]

My Lords, like the noble Lord, Lord Stevenson, I have had the opportunity to look at some organisations that have become involved in providing work for prisoners and, like him, I am impressed. It is encouraging that those who have taken the risk, as some may see it, of employing ex-prisoners, helping to train them, and doing work in prisons, find it a very fruitful experience.

Sometimes I think that the noble Lord, Lord Ramsbotham, is a little hard on NOMS. I fully accept that it is obvious that the vast majority of the prison estate was not designed for operating work regimes. Many very competent prison governors and prison officers are not equipped to run businesses. That is a given, which makes the idea of work in prisons difficult but not impossible. One of the things that we have tried to do in the past 18 months is to tackle in a practical way the realities to which the noble Lord, Lord Ramsbotham, referred. Several hundred organisations already provide work and training opportunities inside prisons, but many are small and want to do more to attract business.

We aim to provide a competitive package for business. We will make involvement as straightforward as possible and get the commercial model right for both prisons and the private sector, subject to our paramount interest in ensuring security, in line with our legal obligations. NOMS is developing new structures and putting in place the right people to operate in a businesslike way. That includes the recruitment of a new chief executive for the prison industries team within NOMS and a business development manager who will have responsibility for finding new businesses and managing relations with customers.

We are trying to address some of the issues raised by the noble Lord, Lord Ramsbotham, and as of now around 9,000 prisoners are employed in prison industries, which my rough arithmetic makes it to be around 10 per cent, or perhaps just a little over of the prison population. It is clear that there is much to do, but there are great prizes if we can get this right. Clause 118 is central to our plan to achieve our aim to make prisons places of meaningful and productive work where prisoners make reparation. Ensuring that prisoners and those detained in young offender institutions or secure training centres have access to training and can obtain qualifications is important. The Government certainly recognise the importance of this area and agree with the intent behind the amendment.

Let me assure noble Lords that we are already doing much of what we aim to do. Through our desire to increase the amount of meaningful and productive work done in prisons, the Government will give many more offenders the chance to learn the discipline and skills of working. As study after study has shown, offending patterns diminish once employment has been found. However, it is not just through prison working that we aim to reduce reoffending. Experience of a proper working week will be augmented by ensuring that their work links them to the right opportunities to develop the skills necessary to their finding employment when they are released.

We plan to deliver learning bases on clusters of institutions that regularly transfer offenders between them. The learning and skills offer will focus on the needs of employers in the areas into which prisoners will be released, as well as on key issues, such as numerous, literacy and communication skills. Here again, I pay tribute to Toe by Toe, which is a marvellous way of tackling illiteracy—one of the problems that comes through time and again in offending. Decisions on the most appropriate learning and skills offer will be taken locally with the key aim of giving offenders the skills that they need to find and keep jobs and apprenticeships on release. There will be no one size fits all approach, nor should there be. Within this new framework we are retendering the offender learning and skills services—a process that gives the chance to look afresh at how to work with the best range of providers. As well as learning the necessary skills and having the right qualifications, many offenders have barriers to entering the labour market that must first be tackled.

As the Deputy Prime Minister announced in August 2011, from the summer of this year offenders leaving custody and claiming jobseeker’s allowance will have to engage with a work programme provider on release, who will be paid for getting them into work. As well as creating this “day one” service, we are bringing together the claiming of jobseeker’s allowance and the processing of benefits before release rather than after it, so prisoners should have a shorter wait for their first benefit payment, which will help their resettlement. In addition, any prison leaver who claims jobseeker’s allowance within 13 weeks of release will be mandated to the work programme from the point of claim. We will also test, in two work programme areas, the addition of a reducing reoffending payment as part of our payment by results approach, in which we will use a variety of methods in the pilot phase.

We recognise that equipping children under the school leaving age with the skills they will need to succeed in life is vital. There is already an expectation that they will be in education rather than paid work. The raising of the participation age will mean that from 2013 all young people, including those in custody, must continue in education or training until the age of 17, and until 18 from 2015. Young people in secure training centres and under-18 young offender institutions will have access to a full day of education and constructive activity. In secure training centres, young people participate in education or training for at least 25 hours per week. In the under-18 young offender institutions, each young person will receive at least 25 hours per week of education and other constructive activity.

We believe that the amendment is constructive but unnecessary. Section 47(1) of the Prison Act 1952 allows the Secretary of State to make rules concerning the regulation and management of prisons, young offender institutions and secure treatment centres, and the treatment of those required to be detained therein. Subsection (3) states:

“Rules … may provide for the training of particular classes of persons”.

Clause 118 will not change those aspects of the 1952 Act, which cover the same ground as Amendment 181A.

For adults detained in custody, the rule-making powers contained in the Prison Act are augmented by provisions in the Apprenticeships, Skills, Children and Learning Act 2009, including a duty on the chief executive of Skills Funding to,

“secure the provision of reasonable facilities for education suitable to the requirements of persons who are subject to adult detention”,

and, in doing so, to take account of a range of factors such as facilities and equipment. In carrying out this duty, the chief executive must have regard to various matters, including the desirability of prisoners continuing the education or training that they have begun, and making the best use of resources.

I have listened often to—and have always welcomed—the noble Lord, Lord Ramsbotham, championing the concept of making work, training and education a priority. They are the key to rehabilitation. I hope that what I have said has convinced him that, although we may not have achieved all that he desired, we are listening and trying as best we can to move in the direction that he advocates. For that reason, I hope that he will withdraw his amendment.

--- Later in debate ---

[Lord McNally]

My Lords, I cannot resist commenting on the last point made by the noble Lord, Lord Ramsbotham. He is such an old Whitehall warrior that he is always between one department and another, asking, “What are the difficult questions that I can ask them?”.

Clause 120 provides that prisoners who are being transferred under escort from one state to another for the purpose of serving a sentence of imprisonment may transit through the territory of Great Britain. Transit will normally involve a prisoner and escort changing aircraft at an appropriate UK international airport. The clause is required to enable the UK to fulfil its international obligations under existing and future prisoner transfer arrangements. Following discussions with the authorities of the Channel Islands and the Isle of Man, it has become clear that further powers are necessary to enable escorts from these territories to transit through Great Britain when transferring a prisoner to another state. This group of amendments address that particular issue with the Crown dependencies. They have no other, wider or ulterior motives, despite talking about transiting through territories et cetera. They are to enable the Crown dependencies—the Channel Islands and the Island of Man—to participate in what are already international obligations. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, I am deeply sad that my appearance before the witching hour did not receive the approbation of the Minister, who did not welcome me to the Front Bench with my comments. I make no further comment on that. I also make it absolutely clear that the comments which follow have not been solicited by me creeping around Whitehall. The noble Lord, Lord Ramsbotham, has gone, but I will obviously take lessons from him about how to do that in future. He concealed his briefing very well to the end. Perhaps he should have done so until after the Minister responded.

The Minister is right. The wording of these amendments looks pretty innocuous on the surface but we wonder why they are there. I have five questions to leave with the Minister. He said that these were necessary to fulfil international obligations. That of course raises in one’s mind the words “extraordinary rendition”. Could he reassure the Committee that, as he said at the end, there is nothing that one should be worried about in that? Clearly, we are worried about extraordinary rendition. Is this a part of that overall process and, if not, could he explain precisely why the Channel Islands and the Isle of Man need to have this legislation at this time? I am sure that there is an innocuous explanation, but we would be grateful to have that. Perhaps in answering that he could also say what he estimates the effect will be of the provision. I cannot imagine that many international flights carrying prisoners and escorts, or without escorts, land in the Channel Islands and require this sort of arrangement; so it would be interesting to have the figures and, if he does not have them to hand, perhaps he could write to me.

Since we are on extraordinary rendition, which has been a sensitive issue for some time, perhaps the Minister could use the opportunity to refresh our memories about where we are on this. Is it still the case that the UK will not undertake extraordinary rendition of detainees in a manner that may be illegal? Confirmation of that would be gratefully received.

[Lord McNally]

On the last point, of course I can give that guarantee. I very much welcome the noble Lord as part of the nightshift. I apologise for the omission during his earlier contributions.

The Isle of Man, Jersey and Guernsey are not part of the United Kingdom; they are Crown dependencies. Whether it was an oversight or not, I do not know, but this just clears things up so that they can operate through UK airports if that was needed. I understand that there have been two or three cases in the past three or four years, so this is not some mass movement of people. They are applications on a voluntary basis, with people wanting to be repatriated back to their own country, and for prisoner exchange purposes.

It may help if I speak to Clause 120. The clause would enable prisoners who are being transferred from one state to another for the purpose of serving a sentence of imprisonment to transit through the territory of Great Britain. Transit will normally involve a prisoner and escort changing aircraft at an appropriate UK international airport. It is required to enable the UK to fulfil its international obligations under existing and future prisoner transfer arrangements. The United Kingdom is party to a number of international prisoner transfer arrangements which require the United Kingdom to facilitate transit wherever possible. In the absence of a specific power to authorise transit, and where necessary to detain a prisoner during transit, applications have been routinely refused.

Clause 120 will enable the relevant Minister to authorise transit through the territory of Great Britain where a request is made in accordance with a relevant international prisoner transfer agreement to which the UK is party—in particular the Council of Europe’s framework decision which requires a member state to facilitate transit between member states when requested. It also provides a power for the police to detain a prisoner in transit only for a period necessary to complete the transit.

The Government fully support the principle that foreign national prisoners should be able to serve their sentences in their own country and we need to support partner jurisdictions in achieving this end. For this system to work effectively, Governments must to co-operate with each other in facilitating transfer. Indeed, the UK regularly seeks and obtains permission to transit through other countries when returning British nationals here.

I recognise that concerns have been raised about the rights and protection of individuals subject to transit, but I remind the House that only when a person has been convicted and sentenced by a court of law and when that person is being transferred for the sole purpose of the enforcement of that sentence in another country would transit through the UK take place. The prisoner concerned is unlikely to have any connection with the United Kingdom and any challenge to the prisoner’s transfer and detention should be made either to the sentencing or receiving state, not the United Kingdom.

This is a technical amendment and has none of the sinister implications that might have arisen at first blush. I hope that the assurances that I gave at the beginning to the noble Lord’s questions will satisfy him.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord McNally and Lord Stevenson of Balmacara

Monday 30th January 2012 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, this has been a very interesting debate that has been well supported all round the House. I hope the fact that so many noble Lords have spoken in support of these amendments will weigh on the Minister when he responds.

I would like to spend a few minutes talking about the dichotomy between the rhetoric that we have heard from the Government about the importance of human rights, which we support, and the impact of the measures before us. Under the existing regime, it is already extremely difficult for the cases that we have talked about to be brought in the UK. In the past 15 years, only nine or 10 such cases have been brought. However, these cases have had a significant impact not only on the lives of thousands of people directly affected but—this is important—on corporate practices and international norms in business and human rights.

When the Prime Minister met the Colombian President Juan Manuel Santos in London on 21 November, we were delighted to hear him say:

“Governments of the United Kingdom and Colombia reaffirm their shared commitment to respect, protect, and promote human rights. We reaffirm our commitment to uphold the human rights treaties and agreements we are signatories to, in particular the Universal Declaration of Human Rights, and the International Covenants on Civil and Political Rights and Economic, Social and Cultural Rights”.

I am sure the Minister and his Government want to match reality to that rhetoric. The problem is that, possibly as a result of an unintended consequence or possibly of trying to get one cap to fit all cases, the considered view from all those involved in this area is that the practical result of the proposed changes will be that it will be almost impossible for poor individuals and communities from the developing world to pursue justice in UK courts. We think that this is wrong in principle but also because of the message that it sends to multinational companies based in the UK. Our amendments would create an exemption so that vulnerable victims of human rights abuses in the developing world would still be able to bring cases to the UK. There is no evidence of any need to address the possibility of a spate of spurious claims here; the truth is that it is already very difficult to bring these kinds of cases against UK-based companies in our courts.

Amending the Bill will be essential if the UK is to meet its commitments on business and human rights and to avoid giving the impression that somehow the Government have gone soft on the way they wish to treat business that causes abuse overseas. The rhetoric is good. We know that the Government have consistently supported the UN “protect, respect and remedy” framework for business and human rights and the guiding principles developed by Professor John Ruggie and adopted by the UN in June 2011. In those framework and guiding principles, Principle 26 explicitly states:

“States should take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing human rights-related claims against business, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy”.

As recently as December 2011, the UK submission to the UN Working Group on Business and Human Rights stated:

“The United Kingdom has placed human rights as central to and indivisible from the core values of British foreign policy. We believe the potential of business to impact on the human rights of individuals worldwide has only been fully recognised in recent years. The endorsement by the Human Rights Council of the UN Guiding Principles on business and human rights in June 2011 marks a high point of international consensus on the issue”.

In light of the praise for Professor John Ruggie’s achievements, it is vital that we keep open the chance of mounting human rights actions in the United Kingdom. The reality of today’s world is that global companies play an increasingly important role and can impact on almost all aspects of our lives. While many UK transnational companies act responsibly, it is important that in situations where human rights abuses occur abroad, poor and vulnerable victims can still seek justice in our courts.

As the noble Baroness, Lady Coussins, said, the Government have already made an exception in the Bill for ATE in clinical negligence cases. Is it not possible to do the same for this limited set of cases? As has been mentioned, the mover and supporters of the amendment met last week the noble and learned Lord, Lord Wallace of Tankerness, and the noble Lord, Lord McNally, who I thank for their time and courtesy in listening to us. I came away from the meeting feeling that there was a willingness to find an accommodation on this issue. If the Minister is happy to signal his willingness to continue those discussions, I am sure that there will be a way of resolving the differences, and I look forward to having a chance to do that.

[Lord McNally]

My Lords, I pay tribute to the noble Baroness, Lady Coussins, and her record in this area. Looking down the list of noble Lords who have spoken in this debate, I see the names of many with whom I have been shoulder to shoulder in many debates. I do not think that there is any division between us on that.

To address the point made by the noble Lord, Lord Stevenson, about the Government’s rhetoric on human rights, I shall, to quote Tony Blair, “leave it to history” to make judgments about the coalition Government. However, one thing that I am absolutely proud of is that in a time of great austerity the sustaining of our aid programme and the follow-on impact on human rights around the world will always be to our Government’s credit—as, too, will their decision to implement the Bribery Act, to take the lead in international anti-corruption campaigns and to be strong advocates for human rights around the world. There is more than rhetoric in this Government’s record on this issue.

I talked with the noble Baroness, Lady Coussins, and the noble Lord, Lord Stevenson, on these issues and, as they know, I am not convinced that the amendments are necessary or appropriate. Let me try to explain why. The Government believe that it is still possible to bring claims against multinational companies once our changes to CFAs are implemented, but the costs involved will be more proportionate to the sums at issue. The proposers seek to address not the validity of the claims but the iniquity of a system that can allow legal costs to escalate to significantly more than the damages at issue.

It is worth emphasising at this stage that the current system of recoverable success fees and recoverable ATE insurance premiums, with the consequence of high civil costs, is not seen in any other jurisdiction in the world. However, I should emphasise that while we should do all we can to ensure that UK business continues to flourish abroad, this will never be done at the expense of violating any of the rights and laws of the host country. The Government are committed to ensuring that UK companies continue to conduct themselves to the highest standards, especially when carrying out trade and transactions in other countries.

CFAs will continue to be available, but the Bill also extends another funding option, to which the noble Baroness, Lady Coussins, referred: the Government are making available alternative methods of funding—such as the use under Clause 44 of damage-based agreements, DBAs, which could be used to fund group actions against multinational companies. Some say that our proposals will decrease the number of these claims, while others, including the Confederation of British Industry and some American companies, are concerned that DBAs will in fact increase the number of such claims. The Government believe that they have the balance right between protecting access to justice and making costs more proportionate. Our aim has been to ensure that litigation is available to stop corporate harm.

It has been mentioned that we were among the champions of the Ruggie guidelines, and it is true that the Government strongly support the UN guiding principles on business and human rights that were developed by Professor Ruggie. We co-operated closely with him on his mandate and fully support the international working group that has been established to take his work forward. I was pleased that I was able to announce that support immediately after that report was published.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord McNally and Lord Stevenson of Balmacara

Wednesday 18th January 2012 Lords Chamber

[Lord McNally]

No, of course I cannot give that assurance, but neither do I assume the absolute worst case in everything that we discuss, as the noble Lord seems to do in each of his interventions.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Best, for trying to come to my aid. I am sorry that he was not able to continue with that. I am sure that he would have been able to include debt into the case that he was making, skilled orator that he is. However, this is a dialogue and I would like to respond to a few of the points that the Minister made.

We have heard the rhetoric about tough choices a number of times in these debates and no doubt we will hear it again. I wonder whether we might get a second script. Perhaps we could work together on that and enjoy a variation on the theme. We on this side of the House accept that legal aid costs have to go down, and have said so. We understand what the Minister is saying but we think that we have other ways of doing that. However, the same question emerges whichever way you approach this: namely, in saving a cost on an annual basis are the Government providing value for money in the long run? We have severe doubts that that is happening.

As my noble friend Lord Howarth mentioned, debts are increasing although perhaps not quite in the way that he indicated. CCCS, the charity which I chair, receives approximately 500,000 inquiries a year. Our average client owes more than £25,000 to more than eight different lenders. These people have a debt problem. The debts are not necessarily related to housing, to which a different contractual basis often applies, but arise because people overstretch themselves. As I tried to say in my opening address, they also arise because other things happen to these people; for example, they lose their jobs, suffer bereavement or become ill. This is not an easy area to talk about. It is not helpful to be overly simplistic and talk about owner-occupiers whose mortgages are at risk when many of these people will be in rented accommodation. However, the problems arising from losing their homes will be just as bad. I do not see any solution coming forward for those people.

The main point that I was trying to get across in my address concerned the DRO effect. I am afraid that the Minister did not answer the question that I posed: namely, what fee will be necessary to enable this service to be continued? It is presently £90. It seems to me that it will go up to nearer the fee that is charged for a full bankruptcy of £900. What will happen to debt advisers? Will funds be available to keep that generic debt advice going, particularly in the citizens advice area? As we explained, the only reason that the DRO system has continued is that the debt advisers are largely paid for by legal aid funds. If that goes, are we saying that those people who are in severe difficulty with their debts will have to rely on a website, which they probably cannot access because they do not have the necessary equipment, or guidance in leaflets? I do not think that that is a satisfactory solution to what is clearly a very serious problem.

These are very difficult issues that are part of a broader context of social welfare law. We shall probably have to come back to them but in the interim I beg leave to withdraw the amendment.