Agriculture Bill

Lord Wallace of Tankerness Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Tuesday 22nd September 2020 Lords Chamber

[Lord Wallace of Tankerness (LD) [V]]

My Lords, I wish to speak to Amendment 92A, which is in my name and enjoys the welcome support of my noble friend Lord Tyler and the noble Lord, Lord Foulkes of Cumnock.

I am sure that there is common ground across the House that geographical indication schemes, GIs, bring marketing benefits to a considerable number of products. This amendment is very similar to the one that I supported in Committee, tabled by my noble friend Lord Tyler. Although the Minister, the noble Lord, Lord Gardiner of Kimble, gave some helpful responses on 23 July, I still seek important clarifications.

Protected geographical indication schemes provide rules designed to protect the geographical names of food, drink and agricultural products. As I noted in Committee, the National Farmers Union of Scotland describes the Scottish ones, not least the Scotch beef PGI and Scotch lamb PGI, as being of strategic importance to Scottish agriculture’s output. In speaking to his amendment, my noble friend Lord Tyler referred to the importance of protected GI schemes for Cornish pasties, clotted cream, Melton Mowbray pies and Stilton cheese. I am sure I do not need to remind your Lordships again of their importance to Scotch whisky.

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I conclude by asking: why would we put all this progress at risk by not making the simple change set out in this amendment? It places on the Trade and Agriculture Commission the responsibility for expressing its opinion on individual trade deals, the equivalence of the production standards, and how standards will be monitored in countries from which we import food. Importantly, this amendment requires the Secretary of State to lay reports from the Trade and Agriculture Commission on each trade deal before Parliament. This is a key feature of the amendment. I look forward to the response from the Minister and hope that he will accept this amendment. Depending on that response, I may wish to test the opinion of the House.

[Lord Wallace of Tankerness (LD) [V]]

My Lords, I very much support the amendment, the purposes of which have been so well articulated by the noble Lord, Lord Curry of Kirkharle; I was pleased to add my name to it. The noble Lord clearly sets out the progress that has been made, and the need to ensure that that is sustained and not undermined.

In Committee, I subscribed to and supported a similar amendment in the noble Lord’s name. On that occasion, I quoted from a letter which the president of the National Farmers Union of Scotland, Mr Andrew McCornick, had sent to MPs during the passage of this Bill in another place. It was admittedly before the Government announced their Trade and Agriculture Commission; nevertheless, I believe that the sentiments expressed are still relevant and worth repeating.

Mr McCornick wrote

“it is vital that future trade deals do not curtail our ability to grow our reputation as a nation of provenance and quality by undercutting domestic production with imported produce, with which we cannot compete on price and production method.”

This amendment is drafted in similar terms to the one tabled in Committee, but there is a crucial difference. We have heeded the concerns expressed during the debate in Committee about the short life of the Trade and Agriculture Commission which was proposed then. So this amendment proposes a continuing existence for the commission, after producing its important primary report, to make recommendations to the Secretary of State to promote, maintain and safeguard current standards of food production through international trade policy, including standards relating to food safety, the environment and animal welfare. This continuing role may be achieved by the Secretary of State prescribing further functions for the Trade and Agriculture Commission after its initial report is published, and in any event, because the TAC will have a continuing responsibility to report on any trade agreement negotiated by the Government, to consider its impact on the trade of agri-food products and to assess its impact on the ability of the Secretary of State to promote, maintain and safeguard standards of agri-food production, including in relation to food safety, the environment and animal welfare.

The amendment would give the commission an explicit additional duty to advise Parliament on all trade deals and how they would impact on food and farming standards. That is one of the reasons the National Farmers’ Union of Scotland has indicated that it would encourage support for the amendment.

I shall conclude by giving two compelling reasons why this amendment should commend itself to Parliament, and an equally good reason why it should appeal to the Government. While providing for the Trade and Agriculture Commission to make recommendations, the amendment gives a key role to Parliament to consider recommendations as well as to determine Motions on the Government’s response to them—so Parliament would have a direct role.

Secondly, the provisions in relation to the new trade treaties supplement the rather limited role given to Parliament under the Constitutional Reform and Governance Act 2010 in relation to the ratification of treaties. Both bring back more control to Parliament. As for the Government, the amendment would help them to secure their pledge set out on page 57 of their 2019 manifesto:

“In all of our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards.”


It seems to me that this is a win-win situation all round.

[Lord Rooker (Lab) [V]]

My Lords, I am pleased to follow the noble and learned Lord, Lord Wallace, and particularly the noble Lord, Lord Curry, in supporting this amendment. Indeed, it is the only amendment tabled on Report which has my name attached to it. I shall be brief.

The point encapsulated in the last two speeches is very important. The National Farmers’ Union of England and Wales, the National Farmers’ Union of Scotland and the Ulster Farmers’ Union, which I worked very closely with when I was the farming Minister in Northern Ireland, all support this amendment. It is also supported by the CLA. That is incredibly widespread support that should enable the Minister to grab it with both hands. It cannot be anything but good for the Government to have the kind of support from the farming community that an amendment such as this carries.

Before I make my other comments, I want to respond to the noble Viscount, Lord Trenchard, who was kindly paying attention, or partly paying attention, to what I said in the previous debate. What I said was that in the United States of America, over 400 people a year die of salmonella. You can get the figures from the Centers for Disease Control. I did not say that they all died from eating chicken. What I also said was that nobody has died from this in the UK in the past 10 years. There may have been one case, but there was a dispute about it.

So it is not a question of looking at populations. The number of deaths in America is huge. Per head of population, food poisoning cases in the United States are 10 times higher than in Great Britain—although I did not go into that. People in America die from salmonella, but here it is not a cause of death. That is the difference, and the point I was making.

This amendment is very important for providing the checks and balances for what is a somewhat haphazard Government. I am not criticising the Minister or his team in this respect, or indeed the Bill team, but it is a haphazard Government, and this would provide checks and balances. The Government cannot rely on the existing structure. For example, I do not think that the Food Standards Agency is resourced or has the overall competence to get involved in the details of trade deals, as the proposed commission would. Of course, bodies such as the FSA and Food Standards Scotland would advise the commission, but the commission would have the main role.

It is also quite important that Amendment 101 not just involves but respects the primacy of Parliament, which Amendment 97 clearly does not. As I read that amendment, it seeks to give a veto over trade deals, and that cannot be right. I shall not recite the contents of Amendment 101, as that would be quite wrong. However, proposed new subsection (4)(d) in Amendment 101 is quite useful. In fact, I think that the Minister himself would probably quite like a list of the existing powers of the Minister, as it would be useful to know. Basically, we would like to know which powers they have got that they are not using. The powers are spread throughout a massive amount of legislation and it would be useful to have a list of them so that we could check which ones they are not using. Proposed new paragraph (f), which ties in with paragraph (c), would make the monitoring of imported foods—something that will not be easy—practical and workable.

We also have to remember that the EU does that for us now. The EU, on behalf of the member states, sends inspectors all over the world to check that farms and food factories are safe and of sufficient quality to supply the EU. We will have to repeat all that ourselves, and therefore it is very important that we have a system for monitoring the situation.

On the efficiency of UK agriculture—I am speaking from memory here—I think that the UK is so efficient in producing milk from dairy cattle that, if the rest of the world replicated our systems, there would be less than half the number of dairy cattle in the world. In other words, we are very efficient, and if we could spread that technology around the world, we would have fewer dairy cattle, less methane, less pollution and much more efficient production.

In short, on the idea of a standing rather than a temporary commission, a standing commission would consist of consumers, traders and producers, and it would instil far more confidence than the six-month commission that the Government have set up. The Minister and his team would be very wise to embrace Amendment 101.

Agriculture Bill

Lord Wallace of Tankerness Excerpts

Committee stage & Committee: 7th sitting (Hansard) & Committee: 7th sitting (Hansard): House of Lords
Tuesday 28th July 2020 Lords Chamber

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I am delighted to follow the noble Lord, Lord Wigley, and to support Amendment 270 in the name of the noble Baroness, Lady McIntosh of Pickering, to which I have added my name. I also support the other amendments in this group.

This debate on food and trade standards is one of the major issues in the Bill. It directly correlates with the debates we had last week on food security and insecurity. If we have strong food standards, as we do, and which we do not want undermined or undercut in any way, it therefore relates back to the issue of food security. The major issue then was that, as a result of Covid, many people were experiencing insecurity and an inability to access that sound food supply.

Like the noble Baroness, Lady McIntosh of Pickering, I welcome the establishment today of the Trade and Agriculture Commission. I welcome its official launch as it contains representatives from the farming unions and the hospitality sector throughout the UK, including the devolved regions. Where I am disappointed is that it does not have a statutory base, as referred to by the noble Lord, Lord Wigley, is time-limited and will simply report after six months. Like him, I see it as a staging post for the Government. It should be a means for the Minister, who has been very gracious in all his responses to us during the seven days of debate in Committee, to have talks within the usual channels and with ministerial colleagues in Defra on how they can put this commission into the Bill and give it the required statutory basis.

None of us, particularly our farmers and those involved in food production and the food supply chain, wants to be undermined by cheap imports of lower standards from other countries. Coming from Northern Ireland, I definitely do not want to see that. I know that the noble Lord, Lord Empey, has referred to the peculiar and different situation of Northern Ireland, which for agricultural purposes will still be subject to the state aid rules of the EU. In that respect, because there has been little movement on the development of the protocol, will the Minister have conversations with ministerial colleagues to find out what discussions have taken place between the Government and the Northern Ireland Executive, particularly the executive office, about not only the implementation of the protocol but what efforts are being made on a no-deal Brexit? What discussions have been taking place generally about Brexit? It is my understanding that, because of divisions within the executive office on policy and stances, such discussions have not yet taken place.

However, there is the facility of the Joint Ministerial Committee, which the noble Lord, Lord Empey, and I, along with former Ministers from the Northern Ireland Executive would be fully aware of. That would be a very good mechanism for ironing out difficulties because, at the end of the day, we want to see proper trade and agricultural standards right throughout the UK, and with our neighbours as well. But we do not want to see unfair competition or any undercutting of our farmers; we want to see good husbandry and the very best agricultural standards.

I want to see the commission become permanent, like it is in the United States, Australia and New Zealand. Any advice that comes from the commission should not be advisory; it should be binding on the Government, as is the case with the Migration Advisory Committee; and the commission should be independent of government. There is such a wide range of people already on it that it has the ability and capacity to do that.

In supporting Amendment 270 I thank the Ministers, the Front-Bench teams for the Opposition and the Liberal Democrats, and the Cross-Benchers, for all their work during these seven days. I thank them for their advice and support. I support the general thrust of the amendments on underpinning good agricultural standards. That is what we all want to see. I urge the Minister either to accept the amendment today, subject to the name change, or to come back with a revised amendment on Report, indicating that the Government are prepared to put this commission into the Bill and give it the statutory basis that is required.

[Lord Wallace of Tankerness (LD) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Ritchie of Downpatrick, who has eloquently articulated the concerns that are the theme of this group of amendments and referred to the ways in which they might be effectively addressed.

I speak in support of Amendment 279, which contains a proposed new clause on a trade, food and farming standards commission. The noble Lord, Lord Curry of Kirkharle, tabled this amendment and has comprehensively described it. He also indicated the flexibility in it, to address the point raised by the noble Baroness, Lady McIntosh of Pickering. But I take on board the comments made by the noble Lord, Lord Cameron of Dillington, about why it might be better to have any extension of that commission in the Bill, rather than it being in the hands of the Secretary of State. That can be considered before we reach the next stage.

As explained in the Marshalled List, the purpose of this new clause is to give real substance to underpinning the Government’s manifesto commitment

“not to compromise on the UK’s high environmental protection, animal welfare and food standards through its international trade policy”.

I note that my noble friend Lord Greaves speculated that this might be the kind of issue which would go to more than one or two rounds of ping-pong in subsequent stages, later in the year. It might be pertinent that what we seek to do in some of these amendments is actually to give substance to the Government’s manifesto commitment.

In a letter last month to MPs the president of NFU Scotland, Andrew McCornick, urged support for the kind of trade, food and farming standards commission set out in this new clause. He argued that as the UK embarks on negotiating future trade deals,

“it is vital that future trade deals do not curtail our ability to grow our reputation as a nation of provenance and quality by undercutting domestic production with imported produce with which we cannot compete on price and production method.”

Subsequent to that letter, the Secretary of State for International Trade announced a Trade and Agriculture Commission and, on 10 July, she announced its membership together with those issues on which the commission must directly report to her. As we have heard, it has been formally launched today; indeed, I believe that it met last Friday.

Agriculture Bill

Lord Wallace of Tankerness Excerpts

Committee stage & Committee: 6th sitting (Hansard) & Committee: 6th sitting (Hansard): House of Lords
Thursday 23rd July 2020 Lords Chamber

Debate on Amendment 209 resumed.

[Lord Wallace of Tankerness (LD) [V]]

My Lords, as I was about to say before our proceedings were cut short just before midnight on Tuesday evening, I speak in support of Amendment 267, to which I have added my name. I also say at the outset that shortly before the House adjourned on Tuesday, the noble Lord, Lord Wigley, made a compelling contribution in support of his Amendment 291, which makes a strong case for a United Kingdom framework for agriculture. I would readily support that.

In speaking to his Amendment 267, the noble and learned Lord, Lord Hope of Craighead, put the issue in context. He reminded us that Part 6, of which Clause 40 forms part, relates to the WTO Agreement on Agriculture. As he pointed out, as a matter of international law the United Kingdom Government are responsible for ensuring that UK policies are compliant with the agreement. Clause 40 makes provision for regulations to be made to secure compliance with the UK’s obligations under the WTO Agreement on Agriculture but, as the noble and learned Lord said, as the devolved Administrations see it,

“the starting point for any system of regulation to ensure WTO compliance by the UK as a whole must be that it is the responsibility of each of the devolved Administrations to devise its own system for the support of agriculture with whatever resources may be available”.—[Official Report, 21/7/20; col. 2195.]

What is of concern is that, specifically, regulations can by virtue of Clause 41 impose limits on the amount of domestic assistance available to each of England, Scotland, Wales and Northern Ireland. Those could be at a lower ceiling than exists under the current arrangements. Thus it is self-evident that this is crucial to the operation of the devolved competence of agriculture, yet there is nothing that requires consultation with the devolved Administrations, let alone consent.

Agriculture is prima facie a devolved matter. Although negotiations on the CAP were the responsibility of the UK Government, the devolved Administrations had direct input into the preparations of the UK negotiating position. It is the case that while implementation of the CAP was devolved, as is the management of direct payments to farmers, the allocation of agricultural budgets between the devolved Administrations has been reserved to the United Kingdom Government. However, that allocation invariably involved detailed consultation, even if not always agreement, as the disputes over the allocation of the EU convergence uplift illustrated.

This amendment proposes that there ought to be consultation before any such regulations are brought forward. I would recognise government Amendment 268, which removes the regulation power in respect of requisitioning information from devolved Governments. That is a welcome move and the Government should be given some credit for responding to representations on that matter. But it is because of this apparent overlap between devolved and reserved responsibilities that great sensitivity will be required.

In its recent report on the constitutional issues arising out of the Brexit legislation, the Constitution Committee of your Lordships’ House, of which I am privileged to be a member, said:

“We recommend that powers for UK Ministers to make delegated legislation in devolved areas, including the power to supersede law made by devolved legislatures, should include a requirement either to consult devolved ministers or to seek their consent, depending on the significance of the power in question.”

In its report on the present Bill, the Constitution Committee said in paragraph 22:

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[Lord Gardiner of Kimble]

My Lords, the noble Lord makes a fair point. I am not the Minister having these discussions, but I will make sure that the noble Lord’s point is put to my ministerial colleagues. Again, consideration and discussion of all these matters is the healthy way forward. I will certainly ensure that a record of Hansard is passed on to my ministerial colleagues. It is a good point.

[Lord Wallace of Tankerness [V]]

My Lords, in his response to the debate, the Minister indicated that, in another place, Victoria Prentis had committed to consulting on regulations arising from Clauses 40 and 41. If that is the Government’s position, what cogent reason is there for not including this amendment in the Bill?

[Lord Gardiner of Kimble]

The noble and learned Lord makes an interesting point. I am just repeating the commitment that my honourable friend made. Perhaps I might take that one back.

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[Lord Blunkett (Lab) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady McIntosh, given her historic links to Yorkshire. It is not surprising that she has advocated a kind of danegeld in terms of this levy.

I am intervening in this debate because my name was not on the speakers’ list for the debate that took place earlier in Committee in which my noble friend Lady Mallalieu drew attention to the plight of small and niche abattoirs, many of which have gone out of business. This issue was flagged in the long-standing Radio 4 series “The Archers” when people engaged in a dialogue on it. I had been thinking mischievously of moving an amendment to try to get dialogue back into “The Archers” via this Bill. However, I take note of the stricture of the noble Baroness, Lady Bakewell, that many people have spoken at great length in these debates and so we are moving slowly through the Committee stage. For example, I spoke in the Chamber on 7 July and again at 11.05 pm on Tuesday night.

The point is that we need to coalesce the debates that have taken place. On Tuesday, I said that I have learned a great deal by following the debates and listening to those who have a great deal more knowledge than I do. My early time in politics was mainly informed by listening to my predecessor in the Sheffield Brightside constituency. His home and roots were in north Yorkshire, and his campaign to protect the rights of tenure of farm workers was successful. I come at this as a novice, but I believe that unless we get some clarity, both today and on Tuesday, on how we are going to take the Bill forward on Report, it is unlikely to see the light of day for a very long time.

I say to the mover of the amendment, the noble Baroness, Lady Jones, that I hope that in debating this levy, we take into account an earlier debate in Committee that revealed, to my surprise, the very small amount of land in the UK that can be described as being of grade one quality. Be careful what you do when allocating a levy, given the impact it could have on the different nations and geographic regions of the UK, as well as avoiding proselytising for vegetarianism.

[Lord Wallace of Tankerness [V]]

My Lords, I am pleased to follow the noble Lord, Lord Blunkett, and I can assure him that my wife would be delighted if there were some means of restoring dialogue to “The Archers”. I want to speak briefly in support of Amendment 212, tabled in the names of the noble Lords, Lord Hain and Lord Wigley. Clause 33 is a welcome step forward in making provision for a scheme which will address the long-running issue of a levy on livestock produced in one part of the UK but slaughtered in another being retained in that other part of the UK. This has long appeared to me to be unfair and has been the source of some contention, so the Government are to be commended for their initiative in this clause.

I support the amendment because it puts further flesh on the scheme to be devised by providing for the levy to be repatriated to the devolved Administration of origin, thus making it clearer what a key objective of that scheme should be. Quality Meat Scotland estimates that over £1.5 million of levy on Scottish animals is lost each year due to the fact that some cattle, sheep and pigs produced in Scotland are slaughtered elsewhere in the UK. I rather suspect that little goes in the opposite direction. If such a sum were repatriated, it could be applied to the promotion of quality Scottish beef, lamb and pig products. I therefore support the amendment and I hope that it commends itself to the Minister.

[Lord Adonis (Lab) [V]]

I am not wanting to speak on this amendment.

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[Baroness Neville-Rolfe (Con) [V]]

My Lords, Clause 35 on marketing standards is an extremely important part of the Bill. It is odd at this late stage to add a lead amendment slotted in ahead of it containing a new clause on a carbon levy and a carbon sequestration reward scheme. I am against both new suggestions, particularly as part of this Bill. Adding some new idea without costing or analysis, albeit with the excuse that it is just a consultation, sets an unfortunate precedent and reflects badly on this House’s role as scrutineers of legislation. I am disappointed to see the suggestion coming from the Cross Benches, especially in the wake of Covid-19, as it would impose huge burdens on mainly small and struggling rural businesses. It also suggests a carbon levy on imports, which would put up consumer prices at a time when households will be under growing pressure and at risk of unemployment.

The lead amendment should be that in the name of my noble friend Lord Carrington. Amendment 247 tries to focus the extremely wide powers in Part 5 so that they are used to improve the economic conditions of production, marketing and quality of agricultural products, taking account of the expectations of consumers. This seems very sensible and I support him.

I will not delay the House at this late hour with my doubts about various amendments on labelling, except to say that in my long experience in the industry, here and overseas, politicians and other interests are much more interested in labelling than is the consumer whom we are meant to serve, and that there is not nearly enough evidence-gathering and research into the effectiveness of food labelling.

Finally, I agree that standards are important and help to support UK production, as we will discuss in the next group. However, the horsemeat scandal dates back to 2013. Lessons have been learned, and it should not be a driver for the wrong kind of new regulation.

[Lord Wallace of Tankerness [V]]

My Lords, I support the new clause in Amendment 263, which has already been spoken to by my noble friend Lord Tyler and to which I have added my name.

Before addressing the issue of geographical indication schemes, I will say a word about the related issue of countries-of-origin labelling and express support for the relevant provisions in Amendment 254 in the names of the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Holmes of Richmond. My right honourable friend Alistair Carmichael, MP for Orkney and Shetland, recently raised this issue at Prime Minister’s Questions and received what might be interpreted as an encouraging response. Having drawn the Prime Minister’s attention to the fact that Orkney beef producers have their efforts to market a quality product undermined by the labelling legislation in this country, which allows beef from anywhere in the world to be labelled as “British beef” as long as it is packaged in this country, he asked whether in light of any future trade arrangements the Prime Minister would do something to close that loophole. In reply, the Prime Minister said that

“we intend to take advantage of the freedoms that we have—the freedoms that the British people have decided to take back—to make sure that Scottish beef farmers have the protections that they need.”—[Official Report, Commons, 17/6/20; col. 805.]

So this evening the Minister has the opportunity to indicate that the Government will indeed give Scottish beef farmers the protections that they need and to signal a willingness to use this legislation to close a loophole in country-of-origin labelling, thus giving confidence and reassurance to producers and consumers alike.

I would have thought there was common ground that geographical indication schemes bring market benefits to a considerable number of products. Scotland has 14 protected geographical indications. The NFUS describes some—the Scotch beef PGI and the Scotch lamb PGI—as being of strategic importance to Scottish agriculture’s output.

I assume that in future the starting point will be Article 54.2 of the European Union/UK withdrawal agreement of 19 October 2019. It provides that persons who under EU law are entitled to use the geographical indication or the designation of origin

“shall be entitled, as from the end of the transition period … to use the geographical indication, the designation of origin”

concerned in the UK, and that they

“shall be granted at least the same level of protection under the law of the United Kingdom as under the … provisions of Union law”.

Can the Minister confirm how, with less than six months to go, that binding treaty obligation is to be implemented? Is there yet a United Kingdom register?

Of course, this ensures protection in the United Kingdom for a number of geographical indication products that are of importance to European Union countries and for UK produce currently given protection by these EU schemes. The object of this proposed new clause is to probe what continuing protection will be given to the United Kingdom’s geographical indications in the European Union and further afield after the end of the transition period. That is important, not least given the somewhat alarming reports referred to by my noble friend Lord Tyler.

In the Government’s response to a consultation paper on GIs published last year, Defra claimed that

“we anticipate that existing UK GIs will continue to be protected by the EU’s GI schemes after we leave the EU. This is because UK GIs are already protected by virtue of being on the EU’s various GI registers. That protection will continue automatically in the EU unless relevant entries are removed, which would require additional EU legislation.”

Can the Minister confirm that that remains the Government’s expectation, or are the kind of newspaper reports referred to by my noble friend founded and do they give rise to a matter for concern?

Moreover, GI protection has hitherto been afforded to UK products by way of free trade agreements with a large number of non-EU countries. In replying to the debate, can the Minister tell us how many rollover agreements have now been reached, what proportion of UK trade agreements with these countries represent and whether GI provisions have been agreed in each case?

That leaves the question of countries with which we have not yet managed to reach a rollover agreement or where there has yet been no EU free trade agreement to roll over. The USA springs to mind, where there is believed to be some scepticism of GIs in trade agreements. Will the Minister indicate whether the incorporation of GI protection for UK products will be a negotiating objective in any trade agreement with the United States?

Then, of course, there is the proviso of Article 54.2, which states:

“This paragraph shall apply unless and until an agreement as referred to in Article 184 that supersedes this paragraph enters into force or becomes applicable.”


On 2 April, the Financial Times reported:

“The UK is pushing to water down its obligation to recognise valuable EU regional food trademarks for products like Parma ham and Champagne”.


Is that the case? Can the Minister confirm that, in the absence of any agreement by the end of the transition period or if the agreement does not amend the provisions of Article 54.2, the United Kingdom continues to be bound by those provisions as a matter of international law?

I am currently within six or seven miles of two distilleries—Highland Park and Scapa—and my son-in-law works for the Tullibardine distillery in Perthshire, so before concluding I wish to say a word about one of the most valuable protected geographic indications, namely Scotch whisky. It has been defined in United Kingdom law since 1933 and has been protected in a US federal code as whisky

“manufactured in Scotland in compliance with the laws of the United Kingdom”

since the 1960s. Nevertheless, GI schemes have been of enormous benefit to the Scotch whisky industry. It is believed that the protection enjoyed in the United Kingdom as an EU GI is stronger than that provided under our domestic law. The provisions of the EU withdrawal agreement are therefore particularly important in that respect. It is therefore vital that the Minister makes it clear that the protection currently offered to UK GIs will be maintained through the EU withdrawal agreement or any further treaty agreement with the European Union and that, in seeking rollover agreements and other free trade agreements, GI protection, not least for Scotch, will be a negotiating objective. Sláinte.

[Lord Lilley [V]]

My Lords, it is a pleasure to follow the noble and learned Lord, Lord Wallace. I support what he said about ending the absurdity of allowing beef to be labelled as British or Scottish if it is merely packaged in this country. I cannot understand why that has ever been permitted. If it was something to do with EU law, we should change it as soon as we are free to do so. I also agree with him on the importance of Scotch labelling. He mentioned that it began in 1933. I am old enough to remember that in the post-war period Japan started producing its own, supposedly Scotch whisky. One brand sold under the label, “Genuine Scottish whisky made from genuine Scottish grapes”. I do not know how successful it was.

I will focus on the issue of labelling, which is behind a number of these amendments. In principle, giving information to consumers is a good thing, but the proposals in the amendments raise several issues. First, why does labelling need to be compulsory? If food producers have adopted high standards, it is in their interest to publicise this if they believe the public would be more attracted to their product if they knew it was produced to high standards. Of course, they often do so, as another noble Lord mentioned in the case of free-range eggs; some two-thirds of our eggs are now labelled “free range”. I suspect, however, that what is actually sought by some noble Lords is not positive labelling about the virtues of a product but negative or pejorative labelling, or simply labelling it as coming from a country of which they disapprove—usually America.

The second issue is: will voluntary labelling work? Will people choose products which are produced to a high standard rather than the less expensive variety? The sad truth is that less than 2% of the poultry that people buy is labelled as organic; for pigs, the figure is less than 1%, and for cattle, it is less than 3%. In general, people seem to prefer the least expensive product as long as it is safe for them to eat, and that is perfectly reasonable. It is all right for Members of your Lordships’ House to sneer at people buying on the basis of price, but a lot of people have to. Food is one of the biggest items of their budget and they want it to be available to them as cheaply as possible.

The third issue is: would compulsory labelling be compliant with WTO rules? Very probably not, although there are some doubts about that. Historically, under the GATT rules, there were cases which suggested that it would not. Some think that under the rules on non- tariff barriers there might be arguments for introducing some labelling. It seems to me rather unlikely that compulsory labelling would be permitted, particularly relating to imports.

Fourthly, if there is a health risk, as the noble Baroness, Lady Finlay, suggested, we should not deal with it through labelling or banning imports. If a certain type of product is a risk to the health of the consumer, it should be banned. The health regulations rather than the measures in this Bill are the appropriate way of dealing with it

Fifthly, will labelling protect UK farmers, particularly from US products—which is clearly what a lot of noble Lords want to achieve? That clearly depends on what the label says. If the label simply gives the facts and says, for example, in respect of poultry that if it comes from the UK, the maximum density under which it may be produced is 39 kilograms per square metre, and if, for the US, the label says that its rules are that, for young poultry, it has to be less than 31 kilograms per square metre, which is significantly less dense than ours, and, for larger birds, a maximum of 43 kilograms per square meter, which is not very different from ours, I do not know that that will convince people that American standards are so different or so much worse than ours.

According to Compassion in World Farming, the UK has some 800 US-style mega farms, as it calls them —for example, warehousing 40,000 birds or 2,000 pigs. The largest UK farm houses 1.7 million birds and the biggest pig factory houses 23,000 pigs. We have large- scale farming in this country; we have smaller-scale farms too, and they compete successfully with the bigger farms.

Ivory Bill

Lord Wallace of Tankerness Excerpts

Report stage (Hansard - continued): House of Lords
Wednesday 24th October 2018 Lords Chamber

[Lord Cormack (Con)]

My Lords, I thank my noble friend for adding his name to some of the amendments that I tabled and for listening clearly and sympathetically to what was said in Committee. I had the privilege of a brief conversation with the noble and learned Lord, Lord Judge, yesterday and he told me that he was pretty well satisfied and very sorry that, because of the engagement to which my noble friend referred, he could not be with us this evening. I said that I would mention our conversation and his satisfaction was certainly influential as far as I am concerned.

I have not got the whole loaf that I asked for in Committee, and my noble friend will recognise that, but he has gone a long way to easing our concerns. I shy away from the idea of civilian accredited officers but I accept the logic of what my noble friend said a few moments ago and I am content. I only wish that he could have been as conciliatory and obliging on some of the other amendments that I moved on the Bill, but I realise that his room for manoeuvre was somewhat limited. I thank him very much and give my full support.

[Lord Wallace of Tankerness (LD)]

My Lords, as a member of the Constitution Committee I subscribed to the amendments which were moved by the noble and learned Lord, Lord Judge, in Committee and I was delighted to be able support the concerns that he articulated so well about these provisions, which the Government have addressed very fairly. They have gone a considerable way to meeting the concerns that were expressed in the Constitution Committee’s report.

I know from conversations that I have had with the noble and learned Lord, Lord Judge, that he has been very appreciative of the time and consideration that the Minister has given to these issues. We have here a set of amendments which very much address these concerns, in terms of the restriction of the powers of accredited civilian officers, the role of OPSS and the designation that will be forthcoming under the 2006 legislation. It is a very good model of how this House works where a Committee produces a report and the Government listen and engage and come forward with some substantive changes which acknowledge the concerns that were originally raised. I am happy to support the amendments.

[Lord Grantchester (Lab)]

My Lords, I rise briefly in appreciation of these amendments, which are designed to address concerns about civilian use of policing powers. I, too, thank the noble and learned Lord, Lord Judge, for his interventions in Committee. I am grateful to the Minister for his willingness to carefully consider these issues and bring forward these amendments tonight. I also place on record our gratitude to your Lordships’ Constitution Committee for its scrutiny of the Bill and the recommendations that prompted the Government to rethink its approach to civilian enforcement bodies. These amendments deal with the concerns over policing functions, including the power of entry, search and seizure being exercised by civilian officials, and bring a more reassuring approach to their enforcement.

Ivory Bill

Lord Wallace of Tankerness Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 12th September 2018 Lords Chamber

[Lord Wallace of Tankerness (LD)]

My Lords, I do not wish to detain the House long, because the noble and learned Lord, Lord Judge, has set out very clearly the reasons—elaborated on by the noble Lord, Lord Cormack—for the concerns that this clause and ensuing clauses, which refer to an “accredited civilian officer”, have given rise to. Like the noble and learned Lord, I very much share the objectives of the Bill. Indeed, as the Constitution Committee said in its brief report published at the outset of the Summer Recess, we do not wish the progress of the Bill to be delayed as its fundamental objective was widely welcomed at Second Reading.

However, we are concerned that the important policing functions, including powers of entry, search and seizure, are to be exercised by civilian officers working directly for the Minister. As the noble and learned Lord has indicated, the Bill as it stands makes it very clear that the accredited civilian officer is an officer of the Secretary of State, authorised by the Secretary of State for particular purposes. There are no qualifications for that, although I anticipate that when he comes to reply, the Minister will elaborate on that—he gave us a foretaste when he replied to the amendment moved by the noble Lord, Lord De Mauley, in the previous group. But that is only elaboration; it is not in the Bill.

We can anticipate some things. Indeed, we will be told, as stated in the letter from the Parliamentary Under-Secretary of State, David Rutley, to Mr Alex Chalk MP, which has been put in the Libraries of both Houses, that,

“the Office for Product Safety and Standards … which is part of BEIS”,

will be the enforcement body and will be “the Office”. But there is no reference to that body in the Bill, its power and what it does. Again, we will be told that,

“the Office will fully adhere to the provisions of the Regulators’ Code”.

What is the Regulators’ Code? Parliament cannot see what it is in the Bill; nor is there even any reference to it. No doubt we will get explanations and elaborations as to the intention, but we should not easily pass legislation without any reference to it. There are serious concerns because of that absence. Even if there is reference to it, fundamental points have been made about wide-ranging powers being given to civilian officers—people who, no matter what might be said about how it would happen, ultimately will be the appointees of the Secretary of State. That is a matter of fundamental principle which the Government need to address and justify.

In conclusion, in the letter to which I have referred, the Minister said:

“We envisage close working of the Office with other enforcement bodies. The Office will use civil sanctions and criminal sanctions are likely to fall to the Police”.


The implication is that in not all circumstances will criminal sanctions fall to the police; they could fall to this body. That is quite significant: criminal sanctions might fall to a body that is appointed by the Secretary of State, without more. Some considerable reassurance will therefore be required when the Minister replies.

[Lord Norton of Louth (Con)]

My Lords, I, too, have signed to give notice of opposition to the clause standing part of the Bill. I endorse the words of the noble and learned Lord, Lord Judge, with whom I agree totally. Like him, I have no problems with what the Bill seeks to achieve; the principle is wholly worthy. Indeed, I have no problem with other parts of the Bill either. My concern is with this clause. I do not see why it cannot be excised from the Bill leaving the other parts in place.

Given the clauses that precede and succeed it, I do not see why this clause is necessary. It confers a particular power on civilian officers and civil servants in a way that is remarkable. The Explanatory Notes seek to claim that the powers conferred in the clause are not unusual, but they cite only one example as a means of doing that. One example is not sufficient to demonstrate that this is “not unusual”. It strikes me that these are remarkable powers in themselves, which means that there would have to be a compelling case for this House to go along with them.

There is already a problem with the actual powers, therefore, but then, as the noble and learned Lord indicated, we have to look at what they are designed to achieve. Subsection (2)(a) is free-standing. It confers on civil servants the power to enter purely for the purpose, as the noble and learned Lord put it, of giving a pep talk. I would be rather amazed if even police officers wanted the power to come in and simply give one a pep talk, so to confer that power on civil servants strikes me as remarkable. It is not linked to the enforcement powers; it is simply to go in and, effectively, to seek to educate people about the provisions of the Bill.

Therefore, the power of entry is remarkable but so is what it is used for. Perhaps the Minister can tell us whether there are provisions in any other Acts that confer on officials powers of this sort to go in and simply remonstrate or give a pep talk to those whom they feel need to be educated. I am at a loss to understand why the clause is in the Bill, given the other provisions that it contains.

[Lord Gardiner of Kimble]

My Lords, I express my gratitude to the Constitution Committee for publishing its valuable report, which raised some important points regarding the powers conferred by the Bill on accredited civilian officers. I place on record that I am most grateful to the noble and learned Lord, Lord Judge, for meeting me and officials so that we could discuss and, in turn, reflect on the concerns that he and the committee expressed. I am also mindful of the amendments tabled by my noble friend Lord Cormack.

The issue of enforcement is critical and I am sure that the Committee would agree that it is paramount that the enforcement of the ivory ban must be both proportionate and robust. As noble Lords will be aware, when I refer to accredited civilian officers, I am referring to the officers of the regulator, which will be the Office for Product Safety and Standards. OPSS is part of the Department for Business, Energy and Industrial Strategy. It is an experienced enforcement body that currently enforces a range of regulations on behalf of the Government, including regulations on timber, biodiversity, waste and chemicals, and carbon reduction. For example, OPSS ensures that timber traders are complying with the regulations to ensure that their products are made from legally sourced timber.

OPSS also has experience of co-working with the police, the National Wildlife Crime Unit and Border Force, which will also play a critical role in the enforcement of the ivory ban so that we make sure that the enforcement is effective and that all parties are clear on their role and remit. For all those reasons it was considered to be the most appropriate regulator.

[Lord Wallace of Tankerness]

I am interested to hear examples of the work set out in the letter to which I referred, but can the Minister tell us—this reflects the question asked by the noble Lord, Lord Norton—about the underpinning statutory basis? Which Acts relate to, for example, EU timber regulation, which underpin any work done by the Office for Product Safety and Standards?

[Lord Gardiner of Kimble]

I am waiting for some assistance to give some precise detail, but clearly, with the timber trade, there must be some legislative basis on which we ensure that timber is legally sourced. If I do not receive the full detail for the noble and learned Lord, I will of course write to him and place a copy of my letter to him in the Library.

Our intention is to ensure that the Ivory Act will be well understood and abided by and, to that end, to define clear roles for the accredited civilian officers, police officers and customs officers. For example, we expect accredited civilian officers to raise awareness and assess compliance with the ban. As such, they will play a critical but distinct role from the police. It is our intention that the accredited civilian officers will focus on low-level offences, while the police will be responsible for pursuing higher-level offences and all criminal offences. Clear protocols between the enforcement bodies will be in place ahead of the commencement and will underpin effective joint working to ensure the effectiveness of the Ivory Act.

The Constitution Committee’s report provided a number of extremely useful recommendations on how we could more clearly define the role of accredited officers in helping to enforce the ivory ban. I would like to assure all noble Lords that we are fully seized of the importance of this issue and are looking carefully at how we might consider these points further on Report.

The Constitution Committee’s recommendations also included a point about the Regulators’ Code. This is a statutory code of practice provided for by the Legislative and Regulatory Reform Act 2006. It sets out the Government’s expectations of how regulators will behave and expands on the statutory principles of good regulation. For example, regulators subject to the code must ensure that activities are carried out in a way that is transparent, accountable, proportionate and consistent, while regulatory activities should be targeted only in respect of cases where action is needed.

In practice, either a regulator or the piece of legislation that is being regulated can be listed under this Act via secondary legislation under Section 24(2) and therefore be subject to the code. A number of existing pieces of legislation that OPSS regulates—I am waiting on the detail for the noble and learned Lord—are subject to the Regulators’ Code and therefore OPSS adheres to the code in these cases. We are considering further the recommendation raised by the Constitution Committee with regard to the Regulators’ Code.

Brexit: Fisheries Management

Lord Wallace of Tankerness Excerpts

Tuesday 20th March 2018 Lords Chamber

[Lord Gardiner of Kimble]

My Lords, clearly Her Majesty’s Government are seeking a deal and an arrangement. As is plainly obvious, at the end of the day this will involve a huge amount of work and we will all need to see how that goes. Our intentions are in good faith. We want there to be a deal. We think that it is in the interest of this country and, indeed, of the EU 27 that we come to a reasonable, responsible deal.

[Lord Wallace of Tankerness (LD)]

My Lords, the Minister has on three occasions, I think, emphasised the fact that the quotas will remain the same during the transition period. From my recollections of times past, during the December negotiations one of the most important arguments and discussions was on the size of the total allowable catches to which the quotas apply. What will be the role of British Ministers and officials in the 2019 discussions on total allowable catches?

[Lord Gardiner of Kimble]

My Lords, I was very clear about the UK’s “share” of the quota. Obviously that goes back to the issue of sustainability. As the noble and learned Lord will know, at the Council there is a discussion about catch sizes on the basis of proper consideration of the analysis of the fish stocks. This is why I precisely said “the share” in the 2019 Council—I said it specifically for that reason.

Deregulation Bill

Lord Wallace of Tankerness Excerpts

Tuesday 3rd February 2015 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Government’s new partial authorisation for insolvency practitioners would split the existing regulation of this quite tiny profession—some 1,350 who take appointments, according to the noble and learned Lord the Minister—into three. There would be company-only and individual-only insolvency practitioners, and some of course doing both. On the basis of no evidence, the Government have decided to dilute this very small but specialist profession. Amendment 6 would preclude the development of corporate-only licences.

The Government admitted to the insolvency practitioners’ professional body, R3, that Clause 17 was not being introduced to “fix a problem”. Indeed, the Government cited no evidence of undercapacity in the market, nor of complaints about the current system. Virtually all the insolvency practitioners consulted, and their major representatives, said that the proposal was a bad idea. The ICAEW’s consultation evidenced no support for the partial qualification. Indeed, the only body cited as being in support, the IPA, found that 61% of its respondents were against—they did not think that the proposals were a good idea.

According to the Government, it was only some of the IPA’s non-practitioner members who were in favour. More than that, having finally seen the IPA’s survey last week, I discovered that its questionnaire did not distinguish between individual insolvency-only licences, which we support, and corporate-only licences, about which we have grave reservations. So the IPA has no idea whether any of its respondents support the idea of practitioners undertaking corporate insolvencies without also being qualified in individual insolvency. Furthermore, despite finding that a majority of its respondents did not think it was a good idea, the IPA dismissed these views as being those only “of current licence holders”. Surely those are exactly the people who know what they are talking about.

Without Amendment 6, Clause 17 would allow insolvency practitioners to undertake corporate bankruptcies, which almost always also affect the financial status of individuals, with no qualification as to the latter’s needs. Indeed, insolvency practitioners often do not know at the outset of a case, particularly with micro-businesses, whether they are dealing with a corporate or personal insolvency—or, indeed, with both, given the involvement of personal guarantees and the nature of creditors.

It is strange that this Deregulation Bill will create three types of licence—rather than the current one—with new exams, oversight and monitoring. The assertion has been made, but with no evidence, that it will attract new entrants; the assertion has been made by the Government that IP fees will be reduced, without any evidence; and the assertion has been made that training costs will be reduced. Again, no evidence was supplied. This whole shake-up is on the basis, by the Government’s own estimates, that there will be only about 100 partial licences.

Furthermore, it is likely to be the large insolvency firms that train corporate-only practitioners at the expense of smaller insolvency firms, of which two-thirds do both corporate and personal insolvencies. More than 80% of smaller firms do not believe that they would get much benefit from lower training costs. Indeed, 90% said that they would not train a partial licence holder. Smaller firms are least likely to specialise and are therefore least likely to benefit from the change. So there is no help to smaller firms—just when the Small Business, Enterprise and Employment Bill is aimed at trying to help small firms.

Why have the Government dreamt up this clause? There is no evidence of a waiting group of would-be IPs dying to enter the market if only they could train simply in corporate insolvencies. Indeed, a number of firms have been reducing their workforce. The Insolvency Lawyers’ Association questioned the logistics of operating a two-tier mixed system, while R3 has serious concerns about the change. It considers that partial licences will have a negative impact on businesses and individuals seeking financial advice, and on the quality and competitiveness of the UK’s insolvency regime, which is currently rated one of the world’s best by the World Bank. Meanwhile the Institute of Chartered Accountants of England and Wales, the largest authorised body regulating insolvency practitioners—regulating, I think, about half the profession—opposes this partial insolvency licence system. It set out its reasoning to the Government a year ago. The Government, however, ignored that, despite the reputation and expertise of the ICAEW. The institute sees no need for partial licensing; it is unaware of any demand for it; and it does not consider that regulatory costs would be lower.

The ICAEW is also concerned that an insolvency practitioner with partial authorisation would not acquire the broad range of knowledge and expertise necessary to provide appropriate advice in a corporate insolvency. We also fear that the proposal would lower standards, given that Jenny Willott MP, the Minister in the Commons, said that the partial licence would,

“reduce a little the high bar on entry to the profession”.

As the ICAEW retorted:

“Reducing the breadth of knowledge required of IPs could be regarded as a lowering of standards”.

We are talking about people’s futures: whether jobs are to be saved or a company liquidated; whether individuals will be made bankrupt; whether creditors will get their money back; whether a company will be sold to someone who can retain at least some of the business.

The Institute of Chartered Accountants of England and Wales, which operates under a royal charter, works in the public interest. Given the potential impact on standards of practice that partial authorisation might have, it does not believe that the proposed reform would be beneficial to the public. The proposal to allow corporate bankruptcies to be handled by people who are unqualified in personal insolvency is misguided, unnecessary, criticised by the profession and other stakeholders and based on unsubstantiated claims. Apart from that, it seems a very good idea.

I urge the Government—even at this late stage—to think again, to listen to R3, the ICAEW and other specialists, and to accept Amendment 6. I beg to move.

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, I am grateful to the noble Baroness for tabling this amendment. We have debated this matter in Committee and I met her and representatives of R3 a few weeks ago to discuss it. The amendment seeks to limit partial authorisation to personal insolvency. This debate allows the Government to set out why we believe that allowing specialised authorisation for insolvency practitioners for both personal and corporate insolvency is the right thing to do.

I recognise that this is a matter of considerable interest to those in the insolvency profession. However, there is a wider impact. The purpose of generally requiring insolvency practitioners to have certain qualifications and experience is that they are given significant powers by statute and it is important that there is confidence that they will use such powers appropriately. It is not to protect insolvency practitioners as a profession as such. It is important, therefore, that the barriers this places on entry—there is quite properly a barrier because of the statutory responsibilities and powers—are no higher than needed for the purpose. I think this was the context in which my right honourable friend Jenny Willott was speaking. The noble Baroness has not provided any evidence whatever that having separate authorisations for personal and corporate insolvency would in any way lower the standards in each of these disciplines.

Most insolvency practitioners are already qualified, usually as accountants, sometimes as lawyers. What we are discussing is what specific training and qualifications they need in order to act as insolvency practitioners. The amendment would allow specialised authorisation in personal insolvency but not corporate, so I will focus on why we believe that it would be helpful to allow specialised authorisation for corporate insolvency.

Opponents have said—as the noble Baroness herself did in moving her amendment—that there is no evidence of the need for change. However, there have been reports on the insolvency profession that have raised concerns about the level of competition in this profession. Two independent reports have noted failings in the current regime that result in fees being higher than they should be. We believe that partial authorisation will increase competition and place downward pressure on fees, which in turn could benefit creditors in the form of higher dividends.

Deregulation Bill

Lord Wallace of Tankerness Excerpts

Tuesday 28th October 2014 Grand Committee

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I move Amendment 12 but also give notice that I will oppose the Question that Clause 18 stand part of the Bill. I hope that the Government will accept, as a minimum, Amendment 12, even if they cannot accept the bigger—and in my view better—alternative, which is to drop the clause altogether.

The Government have come up with the rather strange idea of partial authorisation for insolvency practitioners. This would split in two the regulation of what is quite a tiny profession—fewer than 2,000 people. You would then have a profession for company insolvencies and a different one for individual insolvencies. On the basis of no evidence whatever, the Government have decided, in effect, to dumb down the specialist profession of insolvency practitioners. By doing so, they risk helping the larger insolvency firms at the expense of smaller companies, over 80% of which do not believe that they would get much benefit from lower training costs. Indeed, 90% said that they would not train a partial licence holder. The Government admitted to R3, which is the professional organisation involved, that the clause was not being introduced to fix a problem and they have cited no evidence of any undercapacity in the market or any evidence of complaints about the current system. The Joint Committee on the draft Bill, which was ably chaired by the noble Lord, Lord Rooker, was worried about the lack of stakeholder consultation on the issue. Subsequent discussions with the industry have not alleviated any of its concerns.

Clause 18 would allow insolvency practitioners to undertake corporate bankruptcies, which will almost always affect the financial status of individuals involved, with absolutely no training or qualifications relevant to the needs of such individuals when they also face insolvency. Indeed, insolvency practitioners very often do not know at the outset of a case, particularly with micro-businesses, whether they are dealing with a corporate bankruptcy or with a personal insolvency, given the involvement of personal guarantees and the nature of the creditors. The clause would harm small firms, two-thirds of which do both corporate and personal insolvency, just when the Government’s small business strategy is meant to be helping small firms. They do not like this one. Furthermore, it would add enormous expense to the profession, as it would require the development, the delivery and the oversight of new and additional systems of exam qualification. This would be on the basis of the Government’s own estimate that there will be about only 100 such partial licences.

It is hard to imagine how the Government dreamt up this clause. There is no significant demand—we could not find any—for any change. The only suggestion ever to have been around has been for a personal insolvency-only regime, but never for a corporate-only insolvency regime. There is no evidence of there being a group of people who would just love to be IPs and who are dying to enter the market. Indeed, a number of firms are reducing their workforce and there is no evidence for the argument that we need more.

The Insolvency Lawyers’ Association has questioned the logic of operating this proposed two-tier, mixed system. Indeed, in a way, it would be a three-tier system because some insolvency practitioners would be licensed to do individual insolvency only, some would opt to do corporate insolvency only and some would qualify to do both. R3, the professional body, which knows rather a lot about insolvency, has serious concerns about this change. It considers that partial licences would have a negative impact on business and individuals seeking financial advice, as well as on the quality and competitiveness of the UK’s insolvency regime, which, as I am sure the Minister knows, is assessed by the World Bank as being one of the world’s best.

If we look across all the professions, be they doctors, lawyers or accountants, we see that they always start by getting their initial qualification through a broad training that crosses the whole area of their discipline and they then go on to specialise. The Government seem to want to carve insolvency practitioners out of this, making them jump directly to a specialism. Even worse, it could lower standards. Jenny Willott MP, speaking as a Minister in the other House, said that partial licences will reduce a little,

“the high bar on entry to the profession”.

That sounds to me like a dumbing-down.

We are talking about people’s futures—whether jobs are to be saved or a company liquidated, whether it can be sold off so that some of those jobs can be retained, whether individuals will be made bankrupt, whether creditors will get back money that they have already sent to the insolvent company, whether someone with unsupportable debts can be helped to find a way through or whether a company can be sold to someone else who can keep at least some of it running as an ongoing concern. These are big issues that affect people’s futures.

The clause is misguided; it is unnecessary; and it has been criticised by the profession and other stakeholders. The Government would do well just to withdraw it gracefully rather than be forced to do so. My guess is that the clause would never be commenced and that wiser heads would finally prevail. The provision may be in law but I doubt that it would ever be put into practice, so better perhaps to lift the threat now. I beg to move.

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, I thank the noble Baroness, Lady Hayter, for moving her amendment and speaking to Clause 18. When I came into the Grand Committee—I think that it was during the debate on Amendment 10—I saw the Benches absolutely crowded and I thought, “I didn’t realise insolvency practitioners commanded such interest, not even on a Sunday”.

The noble Baroness made some important points, which I will certainly seek to address, although I think that I will disappoint her, because neither do I feel able to indicate that the Government will accept the amendment nor do they have an intention to withdraw the clause. As she pointed out, Clause 18 will amend the law by introducing a new regime for the partial authorisation of insolvency practitioners. In future, those wishing to become insolvency practitioners will be able to qualify in relation to personal insolvency cases only, in relation to corporate insolvency cases only or in relation to both, as is currently the case.

The effect of the noble Baroness’s amendment would be to allow insolvency practitioners to be partially authorised but only in relation to individual insolvency. As I will come on to when I discuss the clause itself, partial authorisation will remove barriers to entry for those who wish to specialise in just the one discipline. However, I make it very clear that it is not the Government’s intention to restrict this opportunity only to those who wish to deal with individual insolvency. We believe that there should be an opportunity to specialise in individual insolvency, in company insolvency or, and as things stand at the moment, in both. There is no compulsion here; it would be the choice of those wishing to pursue a career as an insolvency practitioner.

The insolvency body R3, to which the noble Baroness referred and which, I acknowledge, is opposed to partial authorisation, has told the Government that 27% of insolvency practitioners work in firms that specialise in corporate insolvency. This compares with 5% who work in firms that deal only with individual insolvency.

The noble Baroness said that take-up of the measure will be small and she asked why we should proceed with it. Existing insolvency practitioners who have gained authorisation for both personal and corporate matters want to continue to cover both areas, but that will not necessarily be the case for new entrants. The Government believe that partial authorisation will be attractive to a minority within the profession who, by focusing on a specific sector or on specific clients, will find that partial authorisation allows them to take appointments in the types of insolvencies that they deal with.

We believe that the changes proposed in Clause 18 will result in lower entry costs into the profession for those who seek partial authorisation and that they will, over time, increase competition and lower fees. That, in turn, can lead to improved returns to creditors in insolvencies. That was certainly my experience when I was a Member of Parliament dealing with companies and small businesses that were often at the receiving end when larger companies went into administration. Very often, it is small businesses that suffer the most when there is an insolvency. If we can improve returns to creditors, including many small businesses, that must surely be a good thing.

It is important to have highly skilled professionals. While we are talking about partial authorisation, company insolvency practitioners and those engaged in personal insolvency matters require a full authorisation. I cannot accept what the noble Baroness says about this being a dumbing-down. Those who pursue that one part of the profession will have a full qualification and therefore I cannot accept that this is about lowering standards. It is important to have highly skilled professionals. We must not forget that imposing unnecessary regulatory burdens on entry into a profession itself has a detrimental impact, particularly on the public, who pay for the services of such professionals.

The noble Baroness mentioned exams and seemed to think that there would be an increased cost. I suspect that if someone is aspiring to become an insolvency practitioner and there are fewer exams to take, there will be a lesser cost for that individual. With regard to exams, I make it clear that the Insolvency Act 1986 provides that the recognised professional bodies that authorise and regulate insolvency practitioners must have in place rules to ensure that insolvency practitioners meet acceptable requirements in relation to education, practical training and experience. A memorandum of understanding between the Secretary of State and the regulators that underpins the Insolvency Act requirements provides that applicants for authorisation must hold a pass in the Joint Insolvency Examination Board exams. I assure the Committee that officials will work with the profession to modify the current exam structure to ensure that partially authorised insolvency practitioners can demonstrate a broad knowledge of both disciplines. The exam structure will obviously have to change, but I cannot see that it is going to lead to the greatly increased costs that the noble Baroness indicated.

As I said, Clause 18 is not about lowering standards; it is about setting appropriate standards. We are asking: why should someone who deals with only personal bankruptcy and individual voluntary arrangements have to know about the finer details of corporate administrations, unless of course they choose to do so? If they do, then of course that choice will still be there. For those insolvency practitioners who at present choose to practise only in corporate or only in personal insolvency, the time and money spent studying an area in which they do not practise will add little or no value to the service that they offer their clients.

--- Later in debate ---

[Lord Sharkey (LD)]

My Lords, to take up some of the points made by the noble Lord, Lord Rooker, the Joint Committee noted that there appeared to be some confusion about the extent of consultation on this clause. We recommended that there be further consultation on what was then Clause 9. In their response to the Joint Committee’s report in January this year, the Government took the opportunity to repeat the arguments in favour of the clause in some detail. They also stated in paragraph 116 that,

“following the Committee’s recommendation, the Government is inviting any further views on this Clause during the passage of the Bill”.

How did the Government go about soliciting these further views? Who did they invite to give those views and what was the general burden of any of those responses that were made after the Government’s response?

As things stood when the Joint Committee reported, we did not feel that there had been sufficient consultation, as the noble Lord, Lord Rooker, was saying, to enable us to express a firm view on the merits of the clause. I note what the Government have said, but I also note the case put forward by R3. In particular, I note R3’s view that partial licences are not being introduced to fix a problem. It claims that there is insufficient evidence of undercapacity in the market and no evidence that the current regime causes concerns about the quality of the advice given. Essentially, it asserts that the system is not broken and asks why the Government are trying to fix it.

The Government, in their turn, advance two reasons for reform. The first is that the partial licences will benefit insolvency practices of all sizes and the personal insolvency market as a whole. R3 has advanced survey data that it says refutes these claims. Secondly, the Government say that partial licences will increase competition, decrease training costs, lower fees and deregulate access to the IP profession. R3 maintains that there is no evidence of the need for more IPs; in fact, it claims that the market is oversupplied. It also challenges the Government’s other assertions.

All this illustrates the position that the Joint Committee found itself in during December. There are competing claims, somewhat unevidenced, and a narrow consultation base, while the Government have not provided an impact assessment on this clause. It would be easier to make a judgment on the merits of the clause if we knew more and had more evidence. There is a strong case for the Government to agree to further substantive consultation on this issue before we reach a conclusion.

[Lord Wallace of Tankerness]

My Lords, I say first to the noble Lord, Lord Rooker, that I did not mention that the provision had started life under the previous Labour Government because I did not know that until he informed me of it. Of course, not everything that the previous Labour Government did was wrong, as I recall from going through the Lobbies at times in your Lordships’ House. I will take the point that the noble Lord makes and find out just who was behind that, if I might make that inquiry.

There were some specific questions asked and I will certainly respond in writing to those who have contributed to this debate. However, it is also important to make the point that existing insolvency practitioners are, by the very nature of their business and profession at the moment, people who are qualified in corporate and personal insolvency. I understand that my noble friend Lord De Mauley has in the past been an insolvency practitioner and he has indicated that these are two different specialisations. Clearly, however, the practitioners are duly qualified and may well question why everyone coming behind them should not go through the same route that they followed.

It may well be, as we believe, that aspiring insolvency practitioners have shown a desire for some partial authorisation. A survey of members of the Insolvency Practitioners Association showed that non-IP members were in favour of this. It would be wrong to go so far as to say that there is an element of protectionism here. However, one of my arguments is that we are looking at people who want to come into the profession—by their nature they are not already there, giving their views—and there are many benefits to allowing that specialisation.

Since I stood up, I have received a further response to the noble Lord, Lord Rooker. I understand that this clause is a development of a policy started under the previous Government. An earlier version of it was proposed for inclusion in a legislative reform order, although the measure was withdrawn and, in the event, the order did not proceed. I will not to try to decipher this note further in case I get it wrong—I will write to the noble Lord.

With regard to the question from my noble friend Lord Sharkey, on 23 January the Government, on the recommendation of the Joint Committee, launched further consultation on whether any changes were required to what is now Clause 18. Responses were considered and included representations from insolvency practitioners, creditor representatives and others. I am not sure whether the responses have been published or whether there is any intention to do so, but perhaps I could write further to my noble friend and give him a flavour of the responses before Report.

My point is that we are dealing with people who are looking to the future and may aspire to a career as an insolvency practitioner but who do not particularly want to take on the whole gamut of it, preferring to specialise in one form or the other.

[Baroness Hayter of Kentish Town]

My Lords, perhaps I should mention—though it is not an interest, being from so long ago—that I was a member of the Insolvency Practices Council, which oversaw insolvency practitioners. I was there as a consumer, not as a trade union member, of the noble collection of insolvency practitioners.

One of the strange things is that this is a deregulation Bill, but it is going to create a new system of exams, oversight and monitoring. That is somewhat odd in a deregulation Bill, but that is beside the point. The assertion is made that it will attract new entrants, without any evidence. The assertion is made that IP fees will be reduced, without any evidence. The assertion is made that training costs will be reduced. Actually, the main training provider, BPP, has to apply its overheads across the exams, so the cost per exam will go up even if you do two exams rather than three. These are assertions, not evidence.

When I was involved in this area—this may answer the question posed by the noble Lord, Lord Rooker, though not to me—there had been suggestions about a personal insolvency-only regime, never a corporate insolvency-only regime. The idea was that people working in debt management companies in particular might want a personal insolvency-only regime. However, despite the fact that I spoke on this at Second Reading and have had lots of lobbying and approaches from everyone else, none of the debt counselling people has approached me to support the idea of a single licence. There has been silence on that. However, it explains why the amendment would be to allow a personal-only insolvency regime. None the less, I remain worried about the idea of a corporate-only insolvency regime, whereby people dealing with corporates would have no training in personal insolvency. It is an issue that we may want the Government to reconsider, but for the moment I beg leave to withdraw.