Local Audit and Accountability Bill [HL]
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““(1A) The Chief Inspector may do anything the Chief Inspector thinks appropriate to facilitate the carrying out of an inspection under section 10 of the Local Government Act 1999 (inspection of best value authorities).”, and”
Lord Wallace of Saltaire
My Lords, these amendments refine the provisions in the Bill that enable existing inspectorates to co-operate with an inspector, appointed by the Secretary of State, to inspect a best-value authority under Section 10 of the Local Government Act 1999, as amended by this Bill. Clause 33 and Schedule 10 to the Bill give a similar power to the Secretary of State’s existing power to ask for an inspection of a best-value authority. This is intended for use as a last resort in very serious cases, such as the ongoing intervention in Doncaster.
Paragraphs 2, 25, 36, 38, 54 and 72 of Schedule 12 amend existing legislation to enable existing inspectorates to co-operate with such a corporate governance inspection, as they sometimes do at present. The relevant bodies and inspectors are Ofsted, the Care Quality Commission, Her Majesty’s Chief Inspector of Constabulary, Her Majesty’s Chief Inspector of Prisons, Her Majesty’s Inspector of Probation, and Her Majesty’s Chief Inspector of the Crown Prosecution Service. The amendments to each of these paragraphs of Schedule 12, which take the same approach in each case, achieve this policy intention more cleanly. They remove the provision suggesting that a chief inspector may be appointed under new Section 10 as an inspector by the Secretary of State to inspect a local authority. This is because it is unlikely that it would be the chief inspector himself or herself who would undertake the inspection. Instead, it simply states that the chief inspector—or the commission, in the case of the Care Quality Commission —may do anything they think appropriate to “facilitate” such an inspection. This could include releasing staff to form part of an inspection team. All these amendments allow bodies to co-operate; they do not compel them to do so. We believe that these amendments simplify and clarify our approach without significantly affecting the impact of the Bill. I beg to move.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord for that explanation. I was puzzled by what the substantive difference was between some of the clauses in the Bill and those that replaced them, but I believe the noble Lord’s explanation has helped me in that regard and I am happy to support his amendments.
“(1) Section 22 (other local authority capital controls in England and Wales) is amended as follows.
(2) For subsection (5) substitute—
“(5) In a case where the controlling authority of a public airport company are—
(a) a county council or county borough council in Wales, or(b) a composite authority of which both or all the constituent councils are county councils or county borough councils in Wales,it shall be the duty of the controlling authority to exercise their control over the public airport company so as to ensure that the company appoints as auditors of the company only persons who, in addition to meeting the requirements of Part 42 of the Companies Act 2006 (statutory auditors), are approved for appointment as such auditors by the Auditor General for Wales.(5A) In any other case, it shall be the duty of the controlling authority of a public airport company to exercise their control over the company so as to ensure that the company appoints as auditors of the company only persons who meet the requirements of Part 42 of the Companies Act 2006 (statutory auditors).”
(3) In subsection (6), after “(5)” insert “or (as the case may be) (5A)”.”
Lord Wallace of Saltaire
My Lords, this is another group of government amendments. It includes Amendments 49, 50, 54 and 55, 57 to 62 and 64, which remove redundant references to the Audit Commission and make clarifications to related provisions in existing legislation.
Amendment 49 is a consequential amendment to the Airports Act 1986. Amendment 50 makes a similar amendment to the Education Reform Act 1988. Amendment 54 repeals sections of the Public Audit (Wales) Act 2004, which place duties on the Auditor-General for Wales and the Audit Commission to co-operate with each other when necessary in undertaking value-for-money studies, et cetera.
Amendment 55 amends the Public Audit (Wales) Act 2004 to remove provisions which enable a transfer scheme of property, assets and liabilities from the Audit Commission to the Auditor-General for Wales.
Amendments 57 to 61 deal with the National Health Service Act 2006. Amendments 57 and 60 are tidying-up amendments, which simply clarify how an auditor may be appointed to a clinical commissioning group and other NHS bodies under the Bill. These bodies may not always appoint their own auditors; the appointment may be made on their behalf in certain circumstances by the commissioning body or the Secretary of State.
Amendments 58 and 61 replace the references to the Audit Commission Act in Schedule 4 to the National Health Service Act 2006 with the relevant provisions from this Bill which relate to reports and other information in respect of NHS trusts in England. Amendment 59 amends paragraph 23 of Schedule 7 to the National Health Service Act 2006 so that an NHS foundation trust can appoint an auditor who is eligible under this Bill, thus replacing the reference to the Audit Commission Act 1998.
Amendment 62 inserts an amendment to the National Health Service (Wales) Act 2006 to remove the reference to the Audit Commission Act 1998. The audit of Welsh health service bodies is now within the remit of the Auditor-General for Wales. Amendment 64 removes provisions in the Public Audit (Wales) Act 2004 which amend other legislation but which are now superfluous, given other amendments to those Acts made by this Bill. I beg to move.
“Education Reform Act 1988 (c. 40)The Education Reform Act 1988 is amended as follows.
In section 124B, omit subsection (5) (duty of certain higher education corporations to consult Audit Commission before appointing auditor in respect of first financial year).
In paragraph 18 of Schedule 7 (higher education corporations)—
(a) omit sub-paragraph (4) (duty of certain higher education corporations to consult Audit Commission before appointing auditor in respect of first financial year),(b) in sub-paragraph (5) for “that sub-paragraph” substitute “sub-paragraph (3) above”, and(c) in sub-paragraph (6) omit the definition of “the first financial year” and the “and” which follows it.”
“Section 20(2A) (general duties of auditors of accounts of health service bodies) is to be read as if—
(a) for “accounts of special trustees for a hospital” there were substituted “accounts of a health service body other than a clinical commissioning group”, and(b) in paragraph (c)— (i) for “the special trustees have” there were substituted “the body has”, and(ii) for “their” there were substituted “its”.”
Lord Wallace of Saltaire
My Lords, in response to the Delegated Powers and Regulatory Reform Committee report on the Bill, we have amended Clause 38. Provisions for compliance with the code now include the power for the Secretary of State to make a direction requiring individual authorities to comply with some or all of the code, and that the exercise of the power to ensure compliance with the publicity code in relation to classes of, or to all, local authorities should be made by an affirmative statutory instrument. As a consequence of this, we are required to amend the Long Title of the Bill to accurately reflect that a requirement to comply may not be the result solely of a direction. Our amendment makes this clear in the Long Title of the Bill. I beg to move.
Lord Beecham
My Lords, we have spent some time debating the requirements on local authorities to comply with the code of practice. I suppose this is our last opportunity to comment before Third Reading and the eventual passage of the Bill to the House of Commons. It is an opportunity to reiterate the problems that many of us envisage in the Government’s approach.
I suppose we ought to be grateful to the Government for clarifying the Title of the Bill, but the Title is almost irrelevant to the substance with which councils will have to contend. The further accretion to the Secretary of State of powers to direct individual councils is not a concession from the original proposition that a direction can be given to all councils. In replying to this short debate, will the Minister indicate exactly how the Secretary of State intends to go about giving his directions, whether to individual local authorities or to categories of local authorities? Would he envisage doing so after consultation and, if so, with whom: individual authorities or the Local Government Association?
Who else might the Secretary of State involve in the consultation process? For example, before making any direction, would he consult the local print media, which he purports to be most concerned about? How would he do that, particularly if he is issuing a general direction? Has the Secretary of State consulted at all, with anybody, about this proposal, thus far? It would be interesting to know whether he has had meetings with, for example, the Newspaper Society, if that is the correct name of the outfit in question, assuming that it has time to indulge in such consultations while the Leveson report remains undetermined.
There is a fundamental problem with the Government’s approach, which largely depends on what I have described —accurately, I think—as an obsession of the Secretary of State and has very little to do with the reality on the ground. I had the opportunity today of a brief conversation with representatives of the National Union of Journalists who were ensconced in Portcullis House. I do not know whether any other Members of your Lordships’ House were invited to meet them, but they stressed again their opposition, as members of a union that represents journalists both in local government and in the print media—
Lord Beecham
I certainly do, but it would be more relevant to know whether the Minister will accept that point. In a moment or two, I shall give him the opportunity to make his position clear.
As I said, the National Union of Journalists, representing journalists across the piece, feels very strongly that the Government’s stance on this is entirely unjustified. Having said that, it would be remiss of me not to point out to the noble Lord, Lord Tope, that the NUJ has great reservations about the amendment that he moved. However, I will be interested to hear what the Minister says in reply before the debate ends.
Lord Wallace of Saltaire
My Lords, I thank the noble Lord for those points. Many of them deserve further conversation in the Corridors and elsewhere. The Bill is part of a long process by which we hope to devolve more power to the cities and local authorities of England—an objective that I know the noble Lord shares. There are many difficulties in doing so, particularly during a recession when there are insufficient funds to do everything that one would like to. However, that is the objective, which I hope is shared across the House, and which I hope we will have the opportunity to explore further in future debates.
Digital Strategy
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Baroness Lane-Fox of Soho
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, declare an interest as chair of Go ON UK.
Lord Wallace of Saltaire
My Lords, we are setting up a cross-government team to lead and co-ordinate the Government’s work on digital inclusion. This will help offline adults and businesses to develop their digital skills. The team will work closely with Go ON UK, as the noble Baroness is well aware.
Design of assisted digital provision is in the early stages. This is how offline adults will access central government digital services. We are considering how to include an element of learning in that provision to encourage offline adults to use digital services independently in future.
Baroness Lane-Fox of Soho
My Lords, I thank the Minister for his Answer, and I commend the Government’s use of digital services. However, as he will be aware, all the data show that it is the lowest income households who have the most to gain from those services but are often the hardest to reach. I wonder what steps the Government are taking to ensure that this complex problem is addressed and that no one is left behind.
Lord Wallace of Saltaire
My Lords, I was visiting a large housing association in Bradford on Friday morning and was happy to learn that it provides for its tenants centres where people who do not have the skills can go to be helped to use the internet. That is very much part of what is in line. The noble Baroness will be aware that there is a joint DWP-DCLG scheme, which is working with the private sector to provide that for social landlords. That is one way in which one reaches one of the harder areas of the population which we must reach.
Lord Clement-Jones
My Lords, as regards the Government’s digital strategy, the NAO has recently pointed out that there are slipping projections for superfast broadband to rural areas, a lack of competition and the need to change the procurement model. Are not these serious criticisms, and is not the plan not to implement the Digital Economy Act until 2015 another disappointment?
Lord Wallace of Saltaire
My Lords, I am something of an expert when it comes to which parts of the Yorkshire Dales National Park one cannot get mobile access. I am conscious that there are all sorts of contradictions in wanting to develop rural broadband, with national parks resisting having mobile phone masts put up all over them.
Some weeks ago, the Chief Secretary to the Treasury announced, as part of the Investing in Britain’s Future package, that there will be an additional £250 million match-funded to extend superfast broadband to such hard-to-reach areas.
Baroness Bakewell
My Lords, are the Government aware that more and more councils are going online? In fact, they are offering a bribe—a reduction for people who pay their bills online—thus penalising the millions of older people who are not willing or able to go online themselves. Surely the health cost of isolating more and more older people from the free running of society and their councils is something the Government should take into account.
Lord Wallace of Saltaire
My Lords, the Government very much take that into account. Incidentally, the statistics do not show that all older people are incapable of using digital services. The assisted digital scheme is precisely a means of helping people who do not find it easy to access the internet. They are given incentives to encourage them to ask their friends and others in care homes and elsewhere to help them to access the internet. I admit that the only government service that I have yet used online is renewing my driving licence. I understand that the most complex procedure that you can currently do entirely online is the enduring power of attorney, which I suspect one needs younger people to help with.
Baroness Wheatcroft
My Lords, instead of a subsidised TV licence or free television licence for the elderly, might not subsidised broadband be a good idea?
Lord Wallace of Saltaire
My Lords, I had better take that one away and think about it.
Lord Wright of Richmond
My Lords, is the Minister aware—I doubt whether he is yet—that one way to acquire digital skills is to have as many grandchildren as possible?
Lord Wallace of Saltaire
Yes. I have also discovered that one of the ways to go backwards in digital skills is for your son to emigrate. You cannot then ask him to help in the middle of the night.
Lord Reid of Cardowan
My Lords, the disconcerting element of the Minister’s Answer to the noble Baroness in the first case was that this is at an early stage. We are now decades into the internet. We are at least a decade on from envisaging digital services. Whether it is a matter of the social justice of excluding people who cannot use this, of hygiene and security on the internet or, indeed, of the chronic shortage of skills that we have as regards cyber for the future, will the Minister reassure us that, while he may be at an early stage in this process, rapid progress will be made? I declare an interest as a twice-over grandfather.
Lord Wallace of Saltaire
My Lords, things are actually moving quite fast. This is not simply something that central government are attempting to impose. I am encouraged by how much is being done at the local level by voluntary organisations and by partnerships between the public and the private sectors. The assisted digital scheme is intended to pull a number of these together and make sure that they are encouraged to help precisely in those areas of the country where digital skills are least well developed. The speed at which people are moving over to digital as mobile smartphones expand is very rapid.
Lord Avebury
My Lords, I am sure my noble friend is aware that according to the Office for National Statistics, 3.8 million disabled people have never used the internet. How are those people going to claim universal credit when the applications have to be made online? If they all go to the centres that he mentioned, will they not be completely overwhelmed?
Lord Wallace of Saltaire
My Lords, that is precisely what the assisted digital and digital inclusion schemes are intended to deal with. They encourage people to learn how to use the internet themselves and, where they find it difficult to do so, to assist them and advise them on how to gain the access they need.
Lord Stevenson of Balmacara
In the last quarterly report of the GDS, the figure of 20% of the population needing some sort of assistance is quoted. I make that about 10 million people. Will the Minister comment on the fact that in the recent report on the rural broadband programme, the chairman of the Public Accounts Committee said that only 9 of 44 locally managed programmes are expected to meet the 90% superfast broadband coverage target? The programme now will not be delivered until March 2017—nearly two years late. What is plan B?
Lord Wallace of Saltaire
My Lords, things are actually changing very rapidly. I am fed up in Saltaire with the number of letters Virgin has put through my door telling me that it has now wired the entire village. The speed at which superfast broadband is being expanded is very rapid. This is not a matter simply for the Government. One of the things that worries me about the current statistics of where the Government need to catch up is that 60% of the population have shopped online and continue to shop online but less than 30% have accessed government services online. That is where we hope to catch up.
Local Audit and Accountability Bill [HL]
Lord Wallace of Saltaire Excerpts(10 years, 11 months ago)
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Lord Wallace of Saltaire
My Lords, this group of amendments deals with amending the scope of the auditors’ work. Amendment 12, which amends Clause 19, puts into the Bill a requirement for auditors of relevant authorities, other than health service bodies, to satisfy themselves that the statement of accounts presents a true and fair view. This requirement for health bodies is already in Clause 20.
The noble Lord, Lord McKenzie, moved a similar amendment in Grand Committee. In response, we provided assurance that it is indeed the Government’s intention to require larger relevant authorities to produce statements of accounts which are “true and fair” and for local auditors to give an opinion on whether this is achieved. We explained that this is not included in the Bill, but the same outcome will be achieved through a combination of the Bill and the regulations to be made under Clause 31, mirroring the same approach that is currently used.
We have reflected on this and other related discussions since Grand Committee, and consider that there are benefits to placing an explicit requirement in the Bill for auditors to give an opinion on whether the statement of accounts is “true and fair”, rather than retaining the current approach. The key benefit, of course, is alignment within the Bill between the audit requirements for health bodies in Clause 20, and those for local government bodies in Clause 19. Furthermore, presenting accounts that are “true and fair” is an established accounting and audit concept which is also used in legislation governing the audit of central government and companies.
The amendment will make clear that the accounts of the larger relevant authorities must meet the same high standards. However, because Clause 19 applies to all non-health bodies subject to audit under this Bill, this amendment will apply the “true and fair” standard to the audit of all relevant authorities. As we said in Grand Committee, the Government do not consider it appropriate that the “true and fair” standard should apply to smaller authorities. Smaller authorities are required to ensure that their accounts “present fairly” or “properly present”, which are briefer and more proportionate forms of accounting.
It will therefore be necessary to modify these requirements for smaller bodies, which the Government intend to do through the regulations under Clause 5. The modifications will retain the audit requirements on smaller bodies so that auditors of smaller bodies are required to continue to satisfy themselves that the accounts “present fairly” or “properly present”.
We are not planning to make the other amendment to Clause 3 that the noble Lord, Lord McKenzie, moved in Grand Committee, which would require relevant authorities to prepare statements of accounts which are true and fair. We believe that the amendment to Clause 19 achieves all that is needed. The duty on auditors in Clause 19 will effectively require the authority to prepare to true and fair standards. We will confirm that requirement in the regulations that will be made under Clause 31, by requiring the chief finance officer of larger relevant authorities to certify that the accounts show as true and fair. This is similar to the approach for health service bodies—which are required to keep proper accounts showing a true and fair view—and the Companies Act which says that the directors must not approve the accounts unless they are satisfied that they give a true and fair view.
Amendments 13 to 17 amend Clause 20, which sets out the general duties of auditors of health service bodies. These are needed to provide that the auditor of the accounts of special trustees is not required to give a regularity opinion. Clinical commissioning groups—which are covered by Clause 20—are funded by Parliament to commission healthcare services. As such, they are accountable to Parliament for how they utilise these resources. Clause 20 therefore requires the auditor to give an opinion on whether the CCG has used these resources as Parliament intended and in accordance with guidance covering financial transactions.
However, this clause currently requires auditors of the accounts of special trustees to provide a regularity opinion of these accounts. Special trustees are appointed by university or teaching hospitals under Section 212 of the National Health Service Act 2006 to hold property on their behalf. There are currently only three boards of special trustees in existence: for Great Ormond Street Hospital in London, the Royal Orthopaedic Hospital and Moorfields Eye Hospital. As these bodies do not receive funds voted by Parliament, there is no need for a regularity opinion by the auditor on their accounts. The general duties of the auditor of a special trustee are otherwise the same as for a CCG.
Finally, Amendment 65 is consequential to the amendments made to Clause 20 and technical in nature. It is required to enable Clause 20 to apply to audit of the accounts of NHS trusts and the trustees of NHS trusts in the same way as it applies to special trustees. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the noble Lord, Lord Wallace, for introducing these amendments. We are happy with them. I will speak first to Amendment 12. We debated this issue of accounts being required to show a “true and fair” view in Committee, as the noble Lord said. We had drawn attention to the disparity of wording in the Bill between the general duties of auditors of relevant bodies which are health service bodies and those which are not. The requirements for local authority accounts to show a true and fair view was part of the process towards full GAAP compliance in the whole of government accounts.
In response to our amendment, the Minister, the noble Baroness, Lady Hanham, reassured us that it was a requirement for larger relevant authorities to present accounts that were true and fair and this was achieved through the interaction of primary and secondary legislation—the Audit Commission Act 1998 and the Accounts and Audit (England) Regulations 2011. The Minister said in Committee:
“We intend to mirror this requirement in the regulations to be made under Clause 31”.—[Official Report, 17/7/13; col. GC 30.]
However, the Minister went on to say:
“This approach is less complex than specifying ‘true and fair’ requirements in the Bill, because further amendments would be required to disapply these provisions … for smaller authorities, which, as the Bill makes clear, are not required to ensure that their statement of accounts are true and fair”.—[Official Report, 17/7/13; GC 31.]
As I said, we support the government amendment. I was going to inquire about how that latter point would be dealt with, but the noble Lord covered that in his presentation.
Before commenting on Amendments 13 to 17, I take the opportunity to thank the Minister and the Bill team for facilitating a meeting about the differing effects of the Bill on local authorities and health service bodies, and for the helpful follow-up tabulation. That tabulation presaged the amendment in noting that a regularity of opinion was necessary in respect of clinical commissioning groups, because they were funded by Parliament to commission healthcare services. This is not the case for NHS trusts which receive income from contracts.
The Bill already disapplies the regularity requirements for NHS trusts in Schedule 13 and, under this group of amendments, does so for special trustees. The amendment specifically restores the other requirements of Clause 20(1) in paragraphs (a) to (c) for special trustees. However, it is not immediately clear how those provisions are reinstated in respect of NHS trusts—that is, those which are not special trustees. I think that the clue to that is in Amendment 65, to which the noble Lord referred, but it would be helpful to have clarification on that point. Subject to that, we are happy with the amendments.
Lord James of Blackheath
My Lords, my attempts to help in this House usually end up in worse confusion, but let me try. I raised the same question about 40 years ago when the phrase was first coming into regular usage. The explanation I got at the time was that the accounts will be true but they may not be fair because they do not answer the question which accountants never ask at an audit stage: that is whether there is a working capital certificate sufficient to support the cash flow. Therefore, you have to say that the accounts are true, but they may not be fair because they may not highlight the pitfall that the cash is going to run out. So “true” and “fair” belong to each other, but they have a separate and subtly different meaning.
Lord Wallace of Saltaire
My Lords, I have been sitting reflecting on the Psalms which are read to us in that wonderful translation at the beginning of Prayers each day and the number of redundant words which are used in repeated phrases in the course of them. I think that it is not only accountancy which uses phrases which might possibly be pruned if one wished.
Let me try to answer some of the questions which have been raised. Amendment 65, about which the noble Lord, Lord McKenzie asked, amends Schedule 13, which makes provision for NHS trusts. On the question of auditors and related audits, I take the point raised by the noble Lord, Lord Palmer, and think that I had better promise to write to him. The next group of amendments tabled by the noble Lord, Lord Wills, raises some large issues about the related audits, which we certainly need to discuss seriously.
I am briefed to say that “true and fair” is an established audit concept. The National Audit Office’s code of audit practice will set out how that is to be reported in auditors’ reports, so the NAO will tell the auditors exactly how to interpret the auditors’ jargon. I beg to move.
Lord Wallace of Saltaire
My Lords, this has been quite a wide-ranging debate and I recognise the importance of the issue that is being raised. I thank the noble Lord, Lord Wills, for the discussion that we had the other week and for the determination with which he is pursuing this. The Government are not persuaded that these amendments serve the cause. It seems to us that the current arrangements provide the requirement for transparency in outsourcing, but I recognise the much wider issues that the noble Lord is raising, such as the growth of outsourcing over the past 25 to 30 years, the potential conflicts of interest that then arise and the rise of substantial amounts of public money that are now being spent by private contractors. The current and recent cases of alleged fraud and error that have arisen in a number of areas of outsourcing of the work programme have not been mentioned. However, noble Lords will also remember that there have been a number of worrying cases.
This has grown up over a long period, from well before this Government took office, but it is with us now and we certainly need to look at it. I promise the noble Lord, Lord Wills, that if he would like to pursue this we are open to further discussions. This is the sort of subject that is perhaps appropriate at some stage for a committee of one or other of the Chambers to look at, to see whether the current rights of freedom of information, rights of access, and challenges from electors and others are adequate, or whether there is a systemic problem that needs to be addressed by legislation.
Local authorities are covered by the Freedom of Information Act and information is directly available from the auditor through the right for local electors to ask questions and raise objections. These cover contractual arrangements with private contractors. The DCLG consulted on bringing local auditors into FOI in spring 2011, when the consultation asked whether local auditors should be brought into the FOI Act. The conclusion was that they should not be brought within the Act, because it was believed that doing so would add little to local authorities being covered in the FOI Act, and because provisions in the Bill retain,
“rights for electors to inspect the statement of accounts and audit documents, and to raise questions and objections with the local auditor”.—[Official Report, 24/6/2013; col. GC 203.]
As I said in Committee, all respondents to this question said that bringing auditors into the FOI Act would increase audit fees. I shall not repeat the argument that I presented in Committee in resisting these two amendments, but the Government’s door is not closed on this. It is a matter that affects all parties and all those in charge of local authorities, future Governments, this one and past ones.
A previous Prime Minister said that the FOI Act was the single biggest mistake that he thought he had made. We disagree with him. It is painful, but necessary. The universality of outsourcing across a range of areas means that from time to time we need to look at this overall, but we are not persuaded that on this particular occasion in this particular Bill these amendments are necessary or appropriate. With that assurance, I hope that we are open to further discussions and that the noble Lord may be willing to withdraw his amendment at this stage, recognising that the question is not therefore necessarily closed.
Lord Wills
My Lords, I am grateful to everyone who has contributed to what has been a valuable debate and from all sides brought to it a wealth of experience and expertise. I am grateful to the noble Lord, Lord Shipley, for his support. The noble Lord, Lord Palmer of Childs Hill, and the noble Earl, Lord Lytton, brought invaluable experience to bear on these issues, and I am grateful to them. They both made a valid point about the fact that the audit can discover problems only after the fact, and the noble Lord, Lord Palmer, asked me directly why I thought that these amendments would still be valuable in the light of that. They would be valuable for many reasons. Perhaps the most important one is that knowing what you do will be subject to public scrutiny is a powerful incentive to getting it right. If you know that what you are doing can be covered up successfully, that is more likely than anything else to ensure fraud, incompetence and inefficiency. I hope that that reassures the noble Lord, Lord Palmer. I am also grateful for the support of my noble friends on my own Front Bench.
I am particularly grateful for what the Minister said; I am grateful to him and his officials for the way that they have engaged with this issue so far. I hope that I am not wrong in detecting just the slightest imperceptible budging from their resistance to these amendments that I saw in Committee, or at least a willingness to carry on engaging with the issues. I welcome this. I also disagree with the view of the former Prime Minister on the Freedom of Information Act and agree with this Minister.
I shall withdraw the amendment today, but I hope that we can return to these issues at Third Reading. The Government have said that they are prepared to look at this again and I welcome that. Even if they do not accept these particular amendments, if they can come up with something better I am happy to discuss that with them. I also ask the Government to look at two issues between now and Third Reading, because they bear on the whole purpose. First, in his response the Minister did not really address my arguments about the inadequacies of the current regime. With all respect to him, he just repeated the arguments in the noble Baroness’s letter to me. I have said why I took issue with those arguments, and I hope that he will look at Hansard and look again at the problems that I have with the regime that is proposed.
Secondly, there is the question of cost. This has not been the time to get to grips with this, but I still think that the argument about costs is unpersuasive. The fact that a consultation produced a predictable response from the predictable vested interests is no argument for government policy to be made on that basis. So I hope that the Government will look at what the actual costs of compliance are likely to be, how much of a deterrent they are likely to be, how far those costs can be absorbed by auditors and how far they would have to be passed on.
I am happy before Third Reading to extend to the Minister and his officials the invitation that he so kindly extended to me in Committee of meeting them again, discussing these issues and seeing if there is a way that we can find some common ground. If not, we will probably have to return to the matter at Third Reading. In the mean time, I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
My Lords, this amendment makes a small change to paragraph 1 of Schedule 7. It slightly changes the requirements on a local auditor when issuing a public interest report. The Bill currently places a duty on local auditors to inform the auditor panel before making a public interest report. The amendment changes that duty to a duty to inform the panel,
“as soon as is reasonably practical after”
making a public interest report. The noble Lord, Lord McKenzie, moved a very similar amendment in Grand Committee. At that time we agreed with the intent of the amendment that the auditor panel should not influence the auditor’s decision as to whether to issue a public interest report. After further reflection, we consider that such an amendment would be a helpful clarification and would reduce the risk that the auditor panel could be perceived to be influencing the auditor’s judgment. I beg to move.
Lord McKenzie of Luton
My Lords, we have Amendment 20 in this group. Obviously, we support the government amendment because it is in keeping with the amendment that we moved in Committee. In Committee we sought to strengthen independent around the process of an auditor issuing a public interest report, and without sight of the government amendment we have retabled our Amendment 20. The sequence has been: in the draft Bill, a requirement to consult with the audit panel; in the current Bill, a requirement to notify the panel before the public interest report is issued; in our amendment, a requirement to notify when it is issued; and now, in the government amendment, to notify as soon as is reasonably practical. This is a progression with which we could not possibly disagree, and we thank the Government for accommodating this point.
Lord Wallace of Saltaire
My Lords, I begin by informing the House that, following careful consideration of all options, the Cabinet Office will assume responsibility for the national fraud initiative, subject to the passage of this Bill. The transfer to the Cabinet Office will allow the national fraud initiative to continue and develop its effective and important work to complement wider government activities to tackle fraud.
Officials are continuing to discuss transitional issues over the coming months to ensure a smooth handover once the legislation is in place. Perhaps it would be appropriate to remind noble Lords that I am the Lords spokesman on the Cabinet Office. I was indeed being briefed by the Cabinet Office fraud and error team some weeks ago. We are considering whether or not to draft a data-sharing and data-matching Bill for the consideration of the House. We face some very large issues at national as well as at local level, which involve issues of data privacy and identity assurance, all of which we need to discuss within the wider framework of national and international consideration of this as well as consideration by local authorities. Noble Lords may remember that in Committee I expressed some surprise at just how far local authorities and the Audit Commission had gone in this direction when the national Government were being very hesitant about how far it would be appropriate to go in some of these areas.
On this Bill, it is the Government’s intention that the data-matching clauses should, before we move towards discussing the much larger issues in the changing digital revolution that we are concerned with at present, remain consistent with the provisions in the Audit Commission Act 1998 to ensure continuity and stability on its transfer to its new home. Amendment 22 would insert a fourth potential purpose for data-matching exercises: to assist in the prevention and detection of maladministration and error. The noble Lord, Lord McKenzie, made a very persuasive case for this amendment in Committee and provided some helpful examples of the types of exercises that the Audit Commission had already run, looking at error rather than fraud, using its other powers.
My noble friend Lord Palmer of Childs Hill rightly highlighted the issue of function creep in relation to data-matching exercises. In doing so, he brought to the House’s attention the need for very careful consideration of these matters, Perhaps I should say that as a liberal in every sense, I am battered on both sides on the question of the convenience that the digital revolution provides us with but also the enormous threats that it offers to individual privacy if we are not careful about how we manage data holding, data sharing, data matching and data mining. I am sure that all noble Lords are aware of the distinctions between all of those. This is a very difficult area, and while the detection of error as well as of fraud is inherently valuable, it would allow the new owner of the national fraud initiative to continue the Audit Commission’s work. Any amplification of ministerial powers in this area therefore requires careful consideration. I assure the noble Lord that my officials are working with a range of interested parties to gain an in-depth understanding of past and potential future uses of this power. This includes representatives from the Information Commissioner’s Office, and I will be meeting the Information Commissioner before the summer on this matter.
My officials are also seeking further advice from the Audit Commission about exercises it has carried out using its other powers and the risks and benefits that such an extension might entail. I look forward to meeting the noble Lord in due course to update him on progress in this area, recognising that we are tip-toeing around the edges of one of the major issues that any future Government will be facing in the next three to five years: how we cope with the explosion of digital information available on cloud computing. I hope with those assurances that the amendment can now be withdrawn.
Lord McKenzie of Luton
My Lords, I must express some disappointment with the Minister’s response. I am grateful for the information on the transfer of the NFI to the Cabinet Office and I am reassured that it will be in the safe hands of the noble Lord as the Minister in your Lordships’ House. I share the concern about the enormity of some of the data holding, data sharing and data mining privacy issues. I took it, perhaps from what the Minister said, that there was the prospect of some broader legislation not too far down the track. However, I hang on to my point that this amendment would not extend one little bit what happens at the moment. In fact, the amendment would not even take us as far as we are today with the Audit Commission because it would need those further processes before it came into being. Whatever else is going on and whatever the scale of these other issues—I share the noble Lord’s concerns over those—I fail to see why this provision cannot be taken forward. It seems to me that there is a diminution in the Government’s task of tackling maladministration and error without these powers being available. I do not think the noble Lord explained how they would be dealt with differently once the Audit Commission goes out of existence and how this range of opportunities would be replicated under the new arrangement. I do not know whether the noble Lord would like another go at trying to convince me on that, but it would be helpful if he could. What will happen to the Audit Commission’s current audit powers to deal with maladministration and error? What will replace those just to have an equivalent process when the Audit Commission goes?
Lord Wallace of Saltaire
The Cabinet Office is looking at the issue of fraud and error in government as a whole in a wider context and would like to examine the experience of the Audit Commission further and to feed that into our wider discussion about the future of data sharing, data mining, data matching and that whole area. We do not intend to leave a long-term hole but to treat this within the broader context of what is happening. Some of us have been concerned in rather a different context with the shift from household electoral registration to individual electoral registration, where, as it happens, some of the same issues arise.
Lord McKenzie of Luton
I am grateful for that further explanation. I take the point that this will not just be left lying fallow but that there will be some active consideration of it. I still hang on to my point that the active consideration could take place without implementation by having the amendment in the Bill. If not, we will need primary legislation of some sort in the future to bring it into being as part of the data-matching process, if that is what the conclusion is on further analysis. Having the amendment in the Bill does not mean that it has to be activated, because the Minister has to go through a consultation process to do that. As there is going to be this broader look, it seems to me that the Government have reached the wrong conclusion. They could have adapted the Bill to include this amendment even if they never implemented it. I think we have probably been around this enough, unless the Minister wants to say something further.
Lord Wallace of Saltaire
I note the noble Lord’s preference for belt and braces. I have some doubts about how many pieces of legislation we have passed that have not been commenced, so perhaps I am slightly in the other area on this. However, I promise to write to the noble Lord further about how the Government intend to take this forward.
Lord McKenzie of Luton
I am grateful for that. I recognise that the Minister sees this as extremely poor, as, indeed, do the Government. I beg leave to withdraw the amendment.
Defence: Trident Review
Lord Wallace of Saltaire Excerpts(10 years, 12 months ago)
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Lord Lea of Crondall
To ask Her Majesty’s Government whether their review of Trident will include the issue of non-proliferation.
Lord Wallace of Saltaire
My Lords, the starting point for the review of alternatives to a like-for-like replacement of Trident was that the UK will continue to comply with its international obligations, in particular with the Nuclear Non-Proliferation Treaty.
Lord Lea of Crondall
My Lords, we know that the alternatives review will address the issue of options for replacing the Vanguard submarines. Will it also consider whether, relatively soon in a submarine’s lifetime, its missiles will need a new warhead? The Government plan to consider that question in the next Parliament, deferring the timetable for consideration in this Parliament given in the 2006 White Paper. Secondly, is it possible to develop a new warhead without testing it and therefore without rescinding our moratorium on testing and indeed contravening the provisions of the Comprehensive Nuclear Test-Ban Treaty? If it is not tested, how can we be assured that any new warhead would be effective?
Lord Wallace of Saltaire
My Lords, the British Government, under both the previous and the current Administrations, have been strong supporters of the Comprehensive Nuclear Test-Ban Treaty. We have developed sophisticated means of simulating the testing and checking of warheads. This is one area in which we are now co-operating with the French: on the sophisticated facilities available for examining current nuclear warheads and considering further developments in design.
Baroness Miller of Chilthorne Domer
My Lords, surely, whatever the outcome of the decision on Trident, it is important that this country continues to play its full role in diplomatic efforts towards non-proliferation and disarmament. Why did the UK ambassador not attend the UN open-ended working group intended to kick-start efforts in this area?
Lord Wallace of Saltaire
My Lords, the United Kingdom remains strongly committed to nuclear disarmament, and we are working in a range of different international contexts to achieve this. As noble Lords will know, the next Review Conference on the Nuclear Non-Proliferation Treaty will meet in 2015, and the preparatory committee met earlier this year.
Lord Browne of Ladyton
My Lords, the Minister will be aware of recent credible research which, using modern climate change models, found that even a regional war using nuclear weapons between emerging nuclear-armed states with relatively primitive weapons would quickly lead to significant global climate change, reduce temperatures, reduce growing seasons, have significant adverse agricultural effects and then quite devastating effects for all the world’s populations. Why, then, did the coalition Government not attend the Oslo conference on the humanitarian effects of nuclear weapons? Why did they boycott it? Do we have nothing to say to the rest of the world about these issues? Will we go to the follow-on conference in Mexico in 2014?
Lord Wallace of Saltaire
My Lords, I pay tribute to the noble Lord’s work within the context of the European Leadership Network and the Nuclear Threat Initiative, which is highly desirable, multilateral work involving the Russians and many others. It is exactly the sort of work that needs to be done and published to inform the debate on the future of nuclear weapons. Her Majesty’s Government decided, in the context of preparations for the Oslo conference, that we should be pursuing this, as far as possible, through the conference on nuclear disarmament; the priority was to unblock that conference. As for attendance at the follow-on conference in Mexico, British diplomats in Mexico met Mexican officials some weeks ago to discuss the question.
Lord Hylton
My Lords, is there not a contradiction between, on the one hand, the statements of successive British Governments about the weapons of mass destruction of others and the risk, therefore, of killing non-combatant civilians and, on the other hand, their own possession of nuclear missiles?
Lord Wallace of Saltaire
My Lords, I have no doubt that when the Trident alternatives review is published, it will stimulate a good deal of, I hope, informed and rational debate about the future of our nuclear weapons programme and of nuclear weapons as a whole. That was part of the intention of commissioning this review.
Lord West of Spithead
My Lords, unsurprisingly, the alternatives review that the Minister refers to seems to show that are no real alternatives to replacing the Vanguard class submarines if we wish to maintain our best-value and most capable deterrent. The only thing that will be looked at further is continuous sea deterrent and, even in that, the worst probability is that we will have to order two Vanguard replacements. With that in mind, will the Minister not agree that we should order those two replacements now, to remove the uncertainty hanging over many hundreds—indeed, over 1,000—skilled workers and their families about their future, and to save £300 million?
Lord Wallace of Saltaire
My Lords, I am not sure that major defence decisions should be driven either by the need to employ a large number of people to build aircraft carriers in Scotland or by the need to maintain employment in Barrow-in-Furness. There are larger issues at stake.
Lord Palmer of Childs Hill
My Lords, will my noble friend confirm that the purpose of that review, which is yet to be fully announced, is to reduce the number of nuclear weapons at sea and on land and that that is part of the non-proliferation effort that we are all engaged in? That is the purpose of the review, and I look forward to its outcome.
Lord Wallace of Saltaire
My Lords, of the declared nuclear states, Britain already has the fewest nuclear weapons. Under current plans we will further reduce the number of nuclear weapons deployed in recent years. We are therefore very much already at a minimum nuclear deterrent. The purpose of the Trident alternatives review, like the EU balance of competences review, which will also be published shortly, is to provide for an informed public debate. That is highly desirable on both major topics.
Lord Foulkes of Cumnock
My Lords, while the Minister and I will be campaigning side by side to keep Scotland within the United Kingdom, there is an outside chance that we might lose in that referendum. Why, therefore, is the Ministry of Defence not undertaking contingency plans to work out what will happen to the independent deterrent in that event?
Lord Wallace of Saltaire
My Lords, we shall be campaigning side by side. I hope that my son will have a vote in that election, since he may be about to move to Edinburgh. The question of whether Scots living outside Scotland should be allowed to vote is, as the noble Lord knows, a very active one. I would rather leave to another day hypothetical questions as to what would happen if Scotland were to become independent.
Sudan: War Crimes
Lord Wallace of Saltaire Excerpts(10 years, 12 months ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what assessment they have made of the report by Amnesty International, We had no time to bury him: War crimes in Sudan’s Blue Nile State.
Lord Wallace of Saltaire
My Lords, we are deeply concerned about the suffering caused by the conflict in Blue Nile state. Accounts presented in Amnesty’s report underline our serious concern about the impact on civilians of the military tactics used. Our priority is a cessation of hostilities and full access to the area for life-saving humanitarian assistance. We continue to press both the Government of Sudan and the Sudan People’s Liberation Movement-North—the SPLM-N—to enter into talks to achieve this.
Lord Alton of Liverpool
My Lords, is the Minister aware that, in addition to this shocking report, new satellite imagery compiled by Amnesty International shows the sheer extent of the purging of the Nuba people from these areas of South Kordofan and Blue Nile, as well as the scorched-earth policies being pursued by the Sudanese military—unabated, uncondemned and unobstructed by the West? Can the Minister tell us when this situation was last raised in the United Nations Security Council and whether we support the extension of the current arms embargo on Darfur to the rest of Sudan? Rather than locking out refugees from camps such as Yida, why are we still not collecting first-hand accounts from witnesses that detail the genocide and war crimes against humanity which are carried out on a day-by-day basis?
Lord Wallace of Saltaire
My Lords, the noble Lord asked about six questions, and I am not sure that I can answer all of them. The UN is extremely heavily engaged both in Sudan and in South Sudan, with three UN missions and a number of other UN operations. We and other Governments make entirely clear to the Government of Sudan our horror at what is taking place. However, as the noble Lord knows, access to the areas of conflict is extremely difficult for diplomats at present.
Lord Chidgey
My Lords, more than 18 months ago, Matthew LeRiche found that civilians in the Blue Nile State were living in constant fear because of indiscriminate terror campaigns aimed at rendering the population unable to provide even the basics of daily life. Those perpetuating these crimes with impunity had the backing of President al-Bashir and six other ICC indictees. Does my noble friend agree that unless the ICC arrest warrants are implemented, there is little or no deterrence for the present crimes? Will the Government therefore press this case with the international community with absolute vigour to see a result?
Lord Wallace of Saltaire
The question of what is the international community for these purposes is very delicate. Arresting an active head of state in his own capital is not the easiest thing to do without going to war. We are deeply concerned about the current situation, but I should stress that the fighting which broke out in South Kordofan and Blue Nile two years ago was in fact sparked by the SPLM-N and it is the Government of Sudan who have responded in a particularly brutal and indiscriminate fashion.
Baroness Kinnock of Holyhead
My Lords, in an appalling repetition of history, the Government of Sudan have spent the last two years deploying the same brutality that they used in Darfur to crush the rebellions that have been mentioned in South Kordofan and Blue Nile. Does the Minister agree that the lessons of Darfur have not been learnt and that the United Nations Security Council is again failing to respond to the suffering of the Sudanese people, who are being bombarded by their own Governments?
Lord Wallace of Saltaire
My Lords, we have to be careful not to assume that the United Nations can do too much. The UN has been actively engaged in this extremely complex series of wars. Let us be quite clear: there are not just two sides on this, as the noble Baroness herself well knows. There is conflict within South Sudan; there is conflict within Sudan itself; there is conflict between groups which are claimed to be supported from across the border. It is now 10 years since the Darfur conflict started. Things are a little better than they were. I speak with some direct experience, having a close friend who has worked both in Darfur and in Abyei in the past three years. Sadly, there are limits to what the international community can achieve, but I assure the noble Baroness that the British Government and others are working extremely hard and providing as much humanitarian assistance as they can in this dreadful situation.
Baroness Cox
My Lords, is the Minister aware that I visited South Kordofan and Blue Nile states earlier this year and witnessed at first hand the constant aerial bombardment of civilians, which deliberately targeted schools and clinics, forcing civilians to hide in caves with deadly snakes and in banks carved out from rivers, and preventing them harvesting crops, with many dying of starvation? Does the noble Lord agree that this aerial bombardment of civilians is being undertaken only by the Government of Khartoum and that, therefore, there is no moral equivalence between the policies of Sudan and South Sudan? What are Her Majesty’s Government doing to call the Government of Khartoum to account for this aerial bombardment, which has been carried out so far with complete impunity?
Lord Wallace of Saltaire
My Lords, we are not the only external actor influencing Sudan. We have to work with the Chinese, who are major actors in terms of external influence on Sudan, the Arab League countries and others. As the noble Baroness will know, there is a tripartite body consisting of the United Nations, the African Union and the Arab League which is attempting to mediate on what is happening in Blue Nile and South Kordofan. I do not in any sense underestimate the horrors of what is happening there.
I am very grateful to the noble Baroness for sending me some material on what she witnessed in her recent visit. It is the most appalling—I emphasise—series of interconnected conflicts from Darfur all the way across to Jonglei and Blue Nile. Part of the problem is that Governments in both South Sudan and Sudan are weak and do not control the whole of their territories.
Lord Triesman
My Lords, the Minister made the point that President al-Bashir would be hard to capture in his own capital. That is of course entirely true, but he must be one of the most widely travelled Presidents of almost any country in Africa. He is at meetings and conferences throughout Africa, throughout the Middle East and occasionally completely out of the hemisphere. What influence are we trying to bring to bear on those other countries that he routinely visits and which do not necessarily have an adverse view of bringing a war criminal to justice?
Lord Wallace of Saltaire
My Lords, the noble Lord will be well aware from his own experience as a Minister how complex these issues are. It is not just a question of Sudan and the ICC. There are delicate questions of Kenya and the ICC at the moment as well. Her Majesty’s Government do of course make representations to other Governments whose territories ICC-designated people visit. Unfortunately, Britain does not command as much influence as we might like in a number of countries in the third world.
Lord Hussain
My Lords, I have had the opportunity of visiting South Sudan and Sudan in the past year or so. Does the Minister agree that, according to the comprehensive peace agreement, the Government of Sudan were required to withdraw all their military forces from South Sudan, which they have done, and that the SPLA was required to withdraw its military people and armed forces from north Sudan but has so far failed to comply?
Lord Wallace of Saltaire
My Lords, the border drawn between Sudan and South Sudan has not been entirely settled. Questions remain about who belongs where, because a number of tribes are pastoral and move across the border. Many issues are not entirely clear or settled. That is very much a problem that we face after the prolonged civil war from which the two countries emerged.
Extension of Franchise (House of Lords) Bill [HL]
Lord Wallace of Saltaire Excerpts(11 years ago)
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Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Dubs, said to me in the corridor the other day, “I hope you won’t disappoint me”. I am very sorry to say that I have to disappoint him on a number of grounds. In his opening speech, he said that this measure has nothing to do with Lords reform, so it is a non-Lords-reform Lords reform, if I understand what he is putting forward. Of course it has a great deal to do with Lords reform. It is one of many small items that we might consider if we go to a smaller package of Lords reform in what is being discussed within Her Majesty’s Government and outside as “a number of housekeeping measures” for both Houses that might be introduced next Session.
For the best of reasons, the noble Lord wishes to cherry-pick one of the changes that would carry through on Lords reform without accepting some of the others. I say this particularly because he remarked that Bishops in the House of Lords can vote without remarking that that is because they do not have permanent membership of your Lordships’ House. They retire at 70, well before the onset of statutory senility. Had the noble Lord, Lord Dubs, linked regaining the right to vote with a statutory retirement age, the Government might perhaps, I think, have looked on this rather more, although it would be very interesting to know what retirement age noble Lords would have accepted—whether it would have been 70, 75, 80, 85 or perhaps 95.
The argument for noble Lords not having the right to vote has partly been that we are permanent Members of your Lordships’ House. I recall that when we were discussing the major House of Lords Reform Bill last year a number of Labour Peers—and I am looking at one or two of them—were arguing in the corridors that they sit in the Lords by royal summons and by right of the sovereign’s appointment and that means that they are not entitled to retire. That is part of our medieval, fundamentally illogical constitution, which is part of what we are here for.
The noble Lord, Lord Parekh, talked about citizenship. Of course, in the British constitution under which we all sit here in this wonderfully illogical House, we are subjects of the Crown. It is the Crown that appoints us, so it is as subjects that we sit here. That is one of the many reasons why the citizenship debates in Britain still have a degree of weakness because we have not quite worked out what that splendidly republican concept “citizenship” should mean for all of us.
The noble Lord also advanced the argument that logic should play some part in this. If we were to redesign the British constitution on logical grounds, we would have a very different British constitution. Some noble Lords will have noted that the noble Lord, Lord Lexden, and other noble Lords signed a letter in the Times the other day which was a passionate defence of the tradition of common law and its conventions and traditions against the threat of logical, rational, Roman law from across the channel, institutionalised in Brussels and Strasbourg. There is a sense that there is an existential threat to our tradition of Englishness through the logical, rational principles of Roman law which come from across the channel, although many people do not recognise that they are also there in Scotland. So many people who talk about the defence of distinctive British institutions appear to forget that Scotland is a central part of the United Kingdom.
If we are to introduce common sense rather than common law, we are moving into a fairly radical change in the way the British constitution works.
Baroness Farrington of Ribbleton
The Minister referred to the fact that we are already Members of Parliament. Does he accept that in certain areas defined by law this is a unicameral system in that we are excluded from areas of activity that are for the Commons? Throughout history, there have been quite a lot of battles about no taxation without representation. That is an area in this House that could be looked at. I suspect that if my noble friend began the argument a different way, your Lordships’ Chamber would be packed and the Press Gallery would be full, because he could have argued that given that we have no say on taxation, and therefore do not have representation, we should not be taxed. I think that would incite the public much more.
My noble friend could instead argue that we regain equality of powers with the House of Commons. That would have Members of the House of Commons up in the Gallery. The noble Lord is, I think, being a little less clear than is his usual practice.
Lord Wallace of Saltaire
My Lords, I do not accept that we are in any sense a unicameral Parliament. This is one of the more influential second Chambers around the world. The fact that we are now definitely the second Chamber and that there are areas in which we have very much less influence than the House of Commons is one of the things that makes this clearly a second Chamber, but some of the other second Chambers, as I note, very definitely have less influence over the breadth of legislation.
Baroness Farrington of Ribbleton
I would be grateful if after the debate on the Second Reading, which I hope will be granted, the Minister would write to me giving examples of where this Chamber has insisted to the point of the House of Commons backing down on legislation over the past few years.
Lord Wallace of Saltaire
I am happy to promise to write to the noble Baroness on that. I think the record is that a full 40% of amendments moved in this House are accepted by the Government, but I will check the figure and come back to her.
I do not wish to detain the House for too long. I have made the point that the permanence of Lords membership has to be linked with the right to vote. On Lords reform, we have to look at a package. Last year, we presented a large-scale package to the House, and the House, for many diverse reasons, did not like it. The Government are considering whether to present a more modest housekeeping package.
Baroness McIntosh of Hudnall
As far as I recall, this House was never asked to give any opinion on the Bill. It was simply ditched before it got here.
Lord Wallace of Saltaire
Having sat through several two-day debates, I think the House has made its opinion relatively clear. I am looking at the noble Lord, Lord Richard, who laboured extremely conscientiously and at considerable length to produce a package which this House would like. Certainly, the sense of the House was, I think, not particularly favourable towards the Government’s proposals. I will leave it at that.
Again, I am sorry to have to disappoint the noble Lord, Lord Dubs. We will of course be returning to this issue. I say to the noble Baroness, Lady Hayter, that as she was speaking I thought of the noble Baroness, Lady Symons. The noble Baroness, Lady Symons, has on many occasions used the doctrine of mandate against me: that once a party has in its manifesto a clear commitment, it has the right and duty to carry it through. I think the Labour Party’s manifestos over the past three or four elections have called for an elected second Chamber. I was disappointed that the noble Baroness, Lady Hayter, went a little behind that.
Baroness Hayter of Kentish Town
I was actually quoting the Minister’s noble friend from a very recent debate in your Lordships’ House. I made no mention of Labour Party policy.
Lord Wallace of Saltaire
Perhaps the noble Lord, Lord Dubs, will come back but, unfortunately, the Government resist this small, partial proposal for reform of the Lords.
Lord Dubs
Before the noble Lord sits down, perhaps I may ask him one question. Given what he has said—and I will deal with that in more detail when I wind up—will he give one small undertaking? Assuming that the Bill gets through this House and goes to the Commons, will he undertake that the Government will not use their strength to block the Bill but will give it free passage and let the Commons decide on its merits?
Lord Wallace of Saltaire
My Lords, I cannot give that commitment immediately. We would clearly have to consider that. Private Members’ Bills make their way, sometimes with the Government’s blessing and occasionally without, first through one House and then the other. Let us see how we go on this.
Lord Dubs
In that case, I misunderstood; I thought that the noble Lord was using the argument himself. However, I very much agree about the power of the Executive and that it is up to both Houses to contain the power of the Executive—so I am with him on that, even if we have a difference of opinion about the Bill itself.
I am delighted that my noble friend Lady Hayter was supportive of the Bill. I pay tribute to her long political experience, with the Fabian Society and elsewhere. She said something about the 5 July anniversary of the start of the National Health Service. If I may trespass on the time of the House, I was in hospital on that day, in Stockport Royal Infirmary. I was quite ill, and I was the only child in the ward. In those days, when the consultant came around, one had either to stand or lie to attention because that was the discipline. A consultant and his big team came along and looked at me, and I asked, “Are we having a party?”. He looked at me as if to say, “How dare you speak before I have spoken to you?”, and then said, “Why?”. I said, “Well the hospital is ours today. We should have a party”. He gave me a dirty look and walked on. I felt that I had made my contribution to the health service at that time. I apologise for digressing a little but, but other noble Lords have digressed as well.
Finally, I did not think that the noble Lord, Lord Wallace of Saltaire, would disappoint me quite as much as he did. Without wishing to be impertinent in any way, I feel that his heart was not in it. I think that, in his heart, he knows that I am right and he is wrong. It showed. I know what it is like being a government Minister. One has to defend things that are sometimes difficult; I have done it myself, although never quite to the extent that the noble Lord has done it today.
On the cherry-picking argument, and this is nothing to do with the Bill, I understand that if we were to move to an elected second Chamber, of course we would have to deal with issues like the primacy of the Commons, methods of election and so on. It would be a whole package of measures, as was evidenced in the Government’s Bill that did not get anywhere. However, if we had the vote in parliamentary elections, nothing would change in this House except that we would have the right to vote. It would not affect the way in which we operate, it would not affect our legitimacy and it would not affect our debates or anything else. It stands entirely on its own, so as to the argument that I was cherry-picking: if there are only cherries on the tree, that is all that one can do. That is not a valid argument.
This issue stands entirely on its own. It need not, should not and does not have any connection with any other aspects of Lords reform. We might throw it into a wider Bill on Lords reform, as I have tried to do, but I would argue that we should get on with it. Let us make this change. I believe that there is overwhelming support in this House and in the Commons for this. Of course, the difficulty is that it only takes one government whip to say, “Object” on a Friday, and that has killed the Bill. That is the problem in the Commons. If the Commons was allowed by the Government to have a go at this, I believe it would overwhelmingly support it, as I believe that this House would overwhelmingly support it. However, the difficulty with Private Members’ Bills is that they can be too easily blocked in an undemocratic manner.
Lord Wallace of Saltaire
My Lords, the noble Lord is not responding to my suggestion that if he perhaps linked the introduction of voting to a limitation of tenure and a retirement age, this might be more acceptable. He is not rising to that particular float.
Lord Dubs
Give me time. I have got it down here to comment on. If I had put forward a Bill saying the statutory retirement age from this House is 75 or 80, of course many Members of this House would have got incredibly excited about it, which would have diverted attention away from my purpose. It would have made it, as a Private Member’s Bill, totally unmanageable. The Minister knows that; I know that; we all know that. It just would not have got through. The point about a Private Member’s Bill is to keep it very simple if it is to have any chance of getting through. Once it gets complicated it has no chance. That is why I have brought it forward in this way.
Finally, the Minister disparaged the idea of logic. The position at the moment is inherently illogical. It is illogical by any standard, and I urge the House to give the Bill a Second Reading.
Georgia
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The Lord Bishop of Wakefield
To ask Her Majesty’s Government what steps they are taking to encourage greater economic and political co-operation between Georgia and the European Union.
Lord Wallace of Saltaire
My Lords, the UK fully supports greater economic and political co-operation between Georgia and the European Union, particularly through regular and intensive high-level contact. Three senior Georgian Ministers have visited London in recent months and three UK Ministers and several senior officials have visited Tbilisi. We are pleased that Euro-Atlantic integration has remained a priority for the new Georgian Government, and, through involvement in the Eastern Partnership, Georgia is finalising an association agreement and a deep and comprehensive free trade area with the EU.
The Lord Bishop of Wakefield
My Lords, I am grateful to the Minister for his response and for setting out the range of co-operation between Georgia and the EU. I remain concerned that, for most Georgians, this assistance remains invisible. Do the Government accept that to avoid similar mistakes to those made with the Ukraine, the EU should take steps to explain to the wider Georgian public the benefits of the association agreement and other such co-operation measures with the EU, rather than after they have been negotiated?
Lord Wallace of Saltaire
I was briefly in Tbilisi eight weeks ago and saw that the EU is quite visible there. The EU monitoring mission is the largest external monitoring mission in Georgia, monitoring the borders with the disputed territories of Abkhazia and South Ossetia. The EU heads of mission meet regularly, and comment regularly and openly, on developments in Georgian politics. The Council of Europe and the OSCE are also active in assisting with judicial training in Georgia and elsewhere. So we are quite visible and extremely active.
Lord Anderson of Swansea
My Lords, the Minister mentioned the EU monitoring mission but failed to mention that Russia and its allies still prevent that EU monitoring mission doing its work in Abkhazia and South Ossetia. What protests are we making to Russia about that, and are we content for yet another frozen conflict in Europe to remain for a longer time?
Lord Wallace of Saltaire
My Lords, we are not content, but as the noble Lord knows well, the Russians are not always the easiest negotiating partners. As he will also know, a fence is being erected along the boundary of the breakaway regions and, in some cases, several hundred metres into Georgian territory beyond the breakaway regions. We continue to talk to the Russians about this. The new Georgian Government have made a number of deliberate unilateral moves to demonstrate their willingness to talk to the Russians. There have been some limited talks but so far the Russians have not given very much in return.
Baroness Falkner of Margravine
My Lords, does my noble friend agree that the greatest challenge for the EU with regard to Georgia is managing the relationship between Russia and Georgia? Can he tell the House the position of Her Majesty’s Government on Georgia’s application to join NATO, which could present some newer challenges?
Lord Wallace of Saltaire
My Lords, at Bucharest some years ago NATO agreed to accept Georgia as a candidate member. The largest non-NATO, non-British force at Helmand at the moment is two Georgian battalions. We support Georgia’s aspiration to join NATO but it will necessarily, unavoidably be a long process. There are, indeed, British military trainers in Georgia.
The Earl of Sandwich
My Lords, the right reverend Prelate mentioned Ukraine as a possible parallel. However, is not Ukraine a good deal behind Georgia politically, and therefore could not Georgia qualify much earlier, given also that the Ukrainian opposition leader is still in prison?
Lord Wallace of Saltaire
My Lords, it is entirely fair to say that Ukraine is considerably behind Georgia in many ways. There was a free and fair election in Georgia last spring which resulted in a change of Government. The Georgian Government have just announced that on 31 October this year there will be a presidential election. Of course, that is not to say that it is a perfect democracy. There are a number of issues, including cases against members of the previous Administration, about which we are concerned. However, when I was in Tbilisi I had lunch at the British embassy with MPs both from the governing party and from the opposition. There are many countries in what was formerly the Soviet Union in which one could not do that.
Lord Kilclooney
My Lords, given that the European Union accepted Cyprus as a member even though its Government did not govern the entire island of Cyprus, why does the European Union welcome Croatia and not Georgia as a member?
Lord Wallace of Saltaire
I note some of the unspoken sentiments behind the noble Lord’s question. As he knows well, the process of admission to the European Union is long and arduous. Georgia is at a very early stage in that process. Georgia’s administrative capability and economic changes and the judicial, rule of law issues that it will have to go through mean that any approach to the European Union will be relatively long, but that is also true for some of the western Balkan countries.
Lord Bates
My Lords, given that the eyes of the world will be on Sochi next February for the Winter Olympic Games and that Sochi is less than 100 miles from the Georgian border, will my noble friend urge the UK mission to the UN to encourage Georgian and Russian reconciliation when the Olympic Truce is presented to the United Nations General Assembly in October? Given that the Russians invaded Georgia in violation of the Beijing Olympic Truce, this might be a timely point for reconciliation.
Lord Wallace of Saltaire
I congratulate the noble Lord on the faithfulness with which he wishes to ensure that we think about the Olympic Truce. We are very conscious that the Sochi Winter Olympics are taking place extremely close to the border with Abkhazia and that that may potentially raise some security issues. There is instability in the north Caucasus as well as in the south Caucasus and we have, of course, spoken to the Russians about that.
Leveson Report
Lord Wallace of Saltaire Excerpts(11 years ago)
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Lord Soley
To ask Her Majesty’s Government whether they will publish, on a regular basis, the number of times since the publication of the Leveson Report the Prime Minister or other Ministers responsible for bringing forward legislation on its recommendations have met editors, owners or senior executives of newspapers, and what was discussed on each occasion.
Lord Wallace of Saltaire
My Lords, as was made clear in the Written Answer given to the noble Lord on 6 June, details of Ministers’ meetings with editors, proprietors and senior media executives are published on a quarterly basis and can be accessed on departmental websites on gov.uk.
Lord Soley
I am not sure whether I am grateful for that Answer. I tabled my Written Question in early May. It took four weeks to get an Answer, which came only after I had tabled this Oral Question. I cannot imagine how that happened.
I put it to the Minister that what is being suggested about looking at Cabinet documents is not in either the spirit or letter of the Leveson report, which says very clearly in recommendation 83 that these ought to be published on a quarterly basis and details given—not intimate details—of what was discussed and so forth. They are not there, nor are they likely to be. Frankly, more and more of us are taking the view that the press is so powerful that it can defy the will of Parliament.
Lord Wallace of Saltaire
My Lords, I have that section of the Leveson report in front of me. I note how much the fact and general nature of any discussion of media policy issues at these meetings raises questions of how far we go in that direction, including—as is discussed in my briefing—whether the exchange of text messages ought to be included in that. As the noble Lord will know, so far we have included the existence of meetings and the record of meetings between January and the end of March this year, which should be published within the next week.
Lord Fowler
My Lords, is not the position on Leveson that almost four months ago, in March, Parliament overwhelmingly agreed a way forward that protected the freedom of the press but also protected the public from the abuse of press power? Is the Minister aware that many people are suspicious of the long delay in implementing those proposals? We believe that we have had the debate and that, basically, we should now just get on with it.
Lord Wallace of Saltaire
My Lords, the Government are well aware of the strength of feeling on all sides. Some elements of the agreement of 18 March have now been implemented, as the noble Lord will know, including within the Crime and Courts Bill and the Enterprise and Regulatory Reform Bill. The noble Lord will also know that on 13 April the Press Standards Board of Finance petitioned the Privy Council with its own draft royal charter, which is now being considered. When it has been considered, the conclusions will be published, and the question of the submission of the Government’s own royal charter will come up again.
Lord Stevenson of Balmacara
My Lords, the Minister will be aware that there is a meeting of the Privy Council on 10 July. On 18 March, as has just been said, Parliament agreed to send the royal charter to the Privy Council in time for the May meeting. Could the Minister confirm that Parliament’s Leveson-compliant royal charter will be submitted to the Privy Council for approval on 10 July?
Lord Wallace of Saltaire
My Lords, my briefing says that it is not appropriate for the Privy Council to consider more than one royal charter at a time on the same issue. The noble Lord may consider that the Press Standards Board of Finance has therefore been extremely clever in what it has done and may draw his conclusions from that—and that accounts for some of the delay.
Baroness O'Neill of Bengarve
My Lords, in March, in the debate to which the noble Lord, Lord Fowler, has referred, there was an understanding that there was a cross-party agreement about the way forward on the Leveson recommendations. What is the state of that agreement now?
Lord Wallace of Saltaire
My Lords, there is a cross-party agreement on the way forward. However, as those who have lived through this debate in even more detail than I have will recall, we are attempting to build a much tougher self-regulatory principle of regulation for the press with the support of a royal charter. This is a very delicate process. Pulling the press along with a tougher system of self-regulation is not proving as easy as it might.
Baroness Bonham-Carter of Yarnbury
My Lords, since the DCMS consideration of consultation responses to the royal charter sponsored by the Press Standards Board of Finance has finished, when will my right honourable friend the Secretary of State publish her advice about whether that royal charter should go forward to the Privy Council? I should point out that no less a person than Sir Tom Stoppard has said that a free press needs to be a respected press. It is about time that that was so.
Lord Wallace of Saltaire
My Lords, we are well aware of the battle between the press and politicians, with deep and entrenched mistrust on both sides, which is not doing much good either for the reputation of the British press or that of British politics. I have to admit that the subtlety of the process whereby the Privy Council considers royal charters is something that I ought to have dug into much more deeply in preparing for this Question. I shall have to write to the noble Baroness on the timing of the consideration of both these royal charters.
Lord Grocott
May I gently suggest to the Minister that if he sees this as essentially a problem between the press and politicians, he misrepresents or misunderstands where the whole genesis of the Leveson inquiry came from? It came from a profound mistrust between the press and the public. Surely, the job of democratically elected politicians is to do their utmost, preferably on an all-party basis, to reflect the wishes and concerns of the public.
Lord Wallace of Saltaire
My Lords, the Government well understand the strength of feeling among the public on the misuse of press freedom in recent years. We have not yet reached the end of the story—we are still moving and there are some hiccups on the way.
Lord Low of Dalston
My Lords, what is the procedure for determining the precedence as between the two royal charters which are going before the Privy Council?
Lord Wallace of Saltaire
My Lords, the Press Standards Board of Finance submitted its petition to the Privy Council before the Government had presented their own royal charter. My understanding is that that therefore gives it precedence over the Government’s royal charter, but that the consideration of the draft royal charter nominated by the Press Standards Board of Finance should shortly be finished, and at that point we will consider how we move further.
Lord Forsyth of Drumlean
My Lords, will my noble friend explain how the Government got behind in the queue on the presentation? Will he also explain how they ended up second in the queue to the Privy Council on a matter of this importance?
Lord Wallace of Saltaire
My Lords, I suspect that it was the result of some very fast footwork by the press board.
Lord Richard
My Lords, is the noble Lord seriously telling the House that the order in which the Privy Council considers these matters is that in which they are submitted to that body? If that is so, it is the most incredible position. Anybody could submit an application sharpish, which would then hold up consideration of all the major issues which might be submitted by other people. Is there no way in which the Privy Council can draw up a list of priorities of what it wishes to consider first, or is it solely bound by the fact that whoever gets his head through the door first is considered first? That is ludicrous.
Lord Wallace of Saltaire
My Lords, the noble Lord expresses his amazement extremely well. I am very willing to take back the strength of opinion in this House and ask in more detail exactly what the procedure should be.
The Future of EU Enlargement
Lord Wallace of Saltaire Excerpts(11 years ago)
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Lord Boswell of Aynho
This Motion invites the House to take note of the report of your Lordships’ European Union Committee, which I have the privilege of chairing, on the subject of the future of European Union enlargement. I am conscious that the comparatively late start to these proceedings may have led to some attenuation of the speakers list and, possibly, compression of the debate. Nevertheless, I am pleased that this debate is so timely, given the immediate accession of Croatia as the 28th member of the European Union; the first accession to the rotating presidency by Lithuania since its accession in 2004; and the imminence of the possibility of discussion about future accession and enlargement at the upcoming European Council later this week. This is a very timely occasion.
The European Union has a long history of enlargement. Our country was part of the first and what is still the largest wave of enlargement when we joined what was then known as the European Community at the same time as the Irish Republic and Denmark in 1973. Since then, there has been a steady stream of countries seeking to join the European Union. We are now about to embark on our seventh enlargement with Croatia. There are currently five candidate countries and three potential candidate countries, so the enlargement agenda shows no sign of halting.
Our report considered the process by which aspirant countries moved towards readiness for membership. In doing so, we revisited many of the questions asked in our previous 2006 report, The Further Enlargement of the EU: Threat or Opportunity?. With the benefit of the passage of time and the benefit of hindsight, we reflected on lessons learnt from the 2004 and 2007 enlargements.
I also express my gratitude to all the witnesses who gave evidence to the inquiry, particularly those from countries which have recently joined and those which are on track to join the Union now. It almost goes without saying that we drew immensely on the expertise of our staff in drawing up this report.
Enlargement is formally a reactive process. It is for individual countries to apply to become member states. However, the Union has always had an enlargement agenda, because enlargement is an integral lever for development and has been accepted as such both in the founding and successive treaties. The current agenda has two main drivers: the first, safeguarding stability and security within wider Europe; and the second, achieving economic prosperity and growth. I believe those two objectives to be intimately connected. Historically, enlargement has had a transformative power. I would evidence that by the political changes seen in recent years in what are now comparatively older member states such as Spain, Portugal and Greece. Furthermore, we should remember that the single market is of enormous benefit to all members—new ones and existing ones, too.
The euro area crisis and questions about the role and governance of the Union have led to enlargement slipping down the political agenda. It has been suggested that some countries, such as Germany and France, may have lost sight of its importance. The United Kingdom Government are to be commended for their commitment to enlargement, and we share the view of many of our witnesses that the momentum in this vital work must not be lost.
The Copenhagen criteria of the EU set out three key standards that a candidate country must meet to be eligible for membership: political, economic and the ability to take on the obligations of membership. Although these were devised in anticipation of central and eastern European enlargement, we were persuaded that they still represent the right starting points for any future enlargements. In acknowledging this, we were critical of the Union’s failure to apply the criteria rigorously in the cases of Romania and Bulgaria, which meant that on joining they were not at a point where they could meet the full obligations of membership. This, in turn, led to the creation of somewhat unsatisfactory post-accession instruments. The Copenhagen criteria are helpful and should not be weakened.
The road to accession for candidate countries is, rightly, not just the warm political one; it also involves significant legal, technical and administrative work. The first step of the official enlargement process is an application for membership. After granting official candidate status, the European Council must take a unanimous decision to open formal membership negotiations. A candidate country then conducts negotiations with Ministers and ambassadors of the Union Governments regarding the European Union’s body of secondary legislation—the so-called acquis communautaire. There are 35 chapters of the acquis, such as justice, freedom and security, judiciary and fundamental rights, and freedom of movement for workers. Necessary reforms must be implemented and demonstrated, and we support the rigorous approach to this that has recently been shown. The requirements made of countries have continued to grow and, while this is justified, the Union must take care to ensure that the burden of work it places on candidate countries is not insurmountable—criteria should be strictly necessary, taken in good faith, and should be consistently applied across the board.
I do not wish to dwell on events in any particular country, but I would say that experience shows that we have far greater influence over our near neighbours and candidate countries when it is clear that together, as a Union, we are serious about enlargement and serious about conditionality—that is, that real reforms are followed by concrete progress in the accession process and that there are also consequences when there is any regression. Yesterday, at a European conference in Dublin, we heard from Valentin Inzko, the high representative for Bosnia-Herzegovina, about the importance of developing in that country a political culture of tolerance and compromise. With his great experience, the high representative was very clear about the importance of that conditionality.
The Instrument for Pre-Accession Assistance seeks to provide financial support for aspirant countries’ reforms. We were disappointed to note the many instances of failure to convert funds from commitments to actual spending, and so we recommended that the next IPA should focus more on the strategic aims of the enlargement policy and the needs of candidate countries. Furthermore, a more rigorous approach must be taken to any backsliding over reform, with the Union being willing to slow or halt the enlargement process and turn off the funding tap. If I may express a personal view slightly beyond the remit of our report, I am increasingly attracted to the option of offering western Balkan countries in particular an opportunity to work together on what might be termed self-help projects to which an appropriate degree of challenge money could be made available by the Commission, with the countries themselves being the generators for this process.
The Union must learn some tough lessons regarding the resolution of issues between countries. The entry of Cyprus in 2004 without reconciliation or conclusion between its Greek and Turkish populations has led to a continuing entrenched dispute. That has diminished the Union’s leverage in encouraging both sides to reach a settlement. It is distressing and it is difficult to see the best way to handle disputes such as this. On the one hand, using Cyprus as an example again, resolving the dispute was rightly not a condition of joining the Union, otherwise Turkey would simply have gained a veto over its membership. On the other hand, without a resolution having been found, Turkey’s accession process has itself become more challenging. The Union must strive to find a way to keep disputes between countries from slowing down or halting the enlargement process altogether, while also encouraging practical solutions. There are a number of very substantial disputes that must be resolved before the accession of the current aspirant countries. I welcome the plan for normalisation of relations between Serbia and Kosovo, which has been agreed under the auspices of the High Representative and Member of this House, the noble Baroness, Lady Ashton of Upholland. This has opened the way for both Serbia and Kosovo to move forward along the road to eventual membership.
I have already touched on the political and economic advantages of enlargement. In spite of the economic crisis, the new member states from 2004 and 2007 have seen rapid economic growth after joining. Similarly, compliance with the requirements of accession means that political and, indeed, business landscapes are often changed for the better, with a healthier balance of power between domestic parties and an increased role for opposition parties being fairly common features in new member states.
The benefits of enlargement are also two-way between old and new member states: the Union is better equipped to deal with its neighbours, and existing member states see economic benefits from the expansion of the number of consumers in the single market. United Kingdom exports to central and eastern European countries almost trebled between 2001 and 2011, reaching close to £14 billion in 2011. I am sure other Members will want to speak in greater detail about the risks to certain policy areas represented by enlargement but I shall, for now, limit myself to suggesting that it should be possible to overcome such issues and they should not be seen to deter, let alone to act as a bar, to any future enlargement.
Debates about enlargement and the future of the Union more generally, often tend to focus on a perception that free movement of labour might prove a risk to domestic labour markets. We heard compelling evidence that this was not the case and that migrant workers had often filled gaps in the labour markets of older member states that were otherwise unfilled by nationals. However, it would be remiss not to acknowledge that there have been some negative impacts from the free movement of persons. For example, the relocation of businesses to exploit cheaper labour costs may have impacted on member states economically, and there is undoubtedly a risk of non-workers travelling to receive social security benefits. However, the free movement of workers is a treaty right and an important element of the European Union’s internal market. Member states need to communicate generally the many advantages to their populations and to work collectively to address any genuine concerns that remain within the existing policy frameworks and within those broad objectives.
Turning to the future of the enlargement process, it is right that the Union should have a rigorous process for the admission of candidate countries, not least to ensure that necessary reforms are introduced and entrenched. The eastern partnership countries must undertake significant reforms before they can be considered for candidacy, but equally their desire to be considered should not be forgotten in discussions about future enlargement. I hope that the eastern partnership summit to be held in Lithuania in November is helpful in this respect. We recognise that there is some reticence regarding future enlargement, and we recommend, frankly, that the Commission and national Governments together do a better job of explaining its benefits and warning of the costs of non-enlargement. It is not a cost-free exercise to remain with the status quo.
In conclusion, the Union has a long history of supporting enlargement. One could almost argue that it is within the DNA of the Union to promote enlargement. That is the process that we in the UK have long been associated with and from which we have benefited. Lessons must be learnt from recent experiences, but the current economic crisis and debates about the future role of the EU should not distract us from this important enlargement agenda. The future economic and political stability of Europe in many ways depends on it and it is an intimate part of that process. I beg to move.
Lord Wallace of Saltaire
I simply remind noble Lords that the advisory speaking time for this debate is eight minutes.
Local Audit and Accountability Bill [HL]
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Lord Palmer of Childs Hill
Let me give an example. If one is looking into housing fraud, one does not, as a local authority, look only at the housing department and benefits claims. I know that local authorities such as mine look towards the UK Border Agency, with which they have a great relationship. When they look into possible fraud, administration error and all the other things that the noble Lord spoke about, the powers already exist. I am asking whether they need to be enshrined in the Bill.
Lord Wallace of Saltaire
My Lords, for these purposes, I should remind noble Lords that I am the spokesman in the Lords and the Minister for the Cabinet Office and have spent long hours in this Room discussing data sharing and data matching during consideration of the Electoral Registration and Administration Act, when many similar issues came up. I must say that I had not appreciated how extensive data sharing was within the Audit Commission and local government. Central government has been approaching this matter with a rather greater degree of caution and hesitation. Perhaps I should phone the Guardian and tell it just what the Audit Commission has been doing in this regard. I am sure that that newspaper would like to make it a front-page spread.
I am very conscious that this whole issue of data matching and data sharing in the public and private sectors, given that they overlap, will occupy us all over the next three or four years. I have no doubt that at some stage, under whichever Government we have in two or three years’ time, we will be discussing some major new legislation in this area because the data revolution is moving so fast.
The possibilities for data matching and data sharing are increasing rapidly. I am conscious from my discussions around this issue within the Cabinet Office and with outside bodies, including the Information Commissioner’s Office, that national patient records are among the most sensitive issues for citizens as regards information sharing. As noble Lords will know, whether one can share limited information without allowing access to full information is one of the great issues in the area of data matching. Therefore, when one talks about data-matching success in local government—and I recognise, as we all do, that the detection of fraud and error is an extremely valuable and useful activity—we nevertheless all have to be aware that issues of privacy are very strong and powerful, and are protected by various lobbies in this country. We must therefore proceed with caution.
Discussions are well advanced on the issue of an appropriate home and we hope to be able to announce by Report stage that the matter will finally have been agreed. However, there are a number of final issues about accountability and management that still have to be settled within Whitehall.
“Omit section 22(1) (Audit Commission).”
Lord Wallace of Saltaire
My Lords, in moving Amendment 18ZZA, which applies to paragraph 8 of Schedule 10, I shall also speak to Amendments 20, 21, 22 and 23, which make a range of minor and technical amendments to Schedule 12. These amendments remove redundant references to the Audit Commission and make clarifications to related provisions in existing legislation.
Amendment 18ZZA applies to paragraph 8 of Schedule 10. This is a consequential amendment to the Local Government Act 1999 to remove a reference to the Audit Commission. This has the effect of ensuring that the Audit Commission is no longer specified as having a role in relation to best value inspections.
Amendment 20 changes the definition of “local auditor” in the Social Security Administration Act 1992. This amends paragraph 23 of Schedule 12 and ensures that “local auditor” is now defined as within the meaning of the Local Audit and Accountability Act 2013—as it will be after Royal Assent—rather than simply within the context of any specific part of that Act.
Amendment 21 makes a consequential amendment to Section 125(2)(b) of the Greater London Authority Act 1999. This applies to paragraph 34 of Schedule 12 and has the effect of removing the provision allowing the Audit Commission to certify information provided by a functional body to the Mayor of London.
Amendments 22 and 23 make minor and consequential amendments to Section 212 of the Local Government and Public Involvement in Health Act 2007. These amend paragraph 66 of Schedule 12, which makes consequential amendments to that Act, and seek to clarify the Government’s intent that only the UK Secretary of State can make provision about entities connected with cross-border local authorities. These amendments also tighten the definition of “local authority” in this context.
These are minor and technical amendments that remove redundant references to the Audit Commission and make clarifications to related provisions in existing legislation. I beg to move.
Lord Beecham
My Lords, the noble Earl has made a compelling case. We seem to be moving from the high politics of Greater Manchester and West Yorkshire to Clochmerle or Eatanswill. There is nevertheless a real issue here, of which I was certainly unaware. The ridiculous numbers involved to call a poll, the non-binding nature of the result and the financial cost all seem to add up to a pretty lethal cocktail which ought to be addressed. I hope that the Minister will give the noble Earl an indication that the Government will look at this and seek, either on the basis of his amendment or in some other way, to deal with what looks like a highly anomalous situation in which a tiny handful of people—even fewer than voted in police commissioner elections—can wreak havoc in a local community.
Lord Wallace of Saltaire
My Lords, I was unaware of the parish poll dimension. I say from the outset that, although we are very much on the outer edges of the scope of the Bill, the noble Earl’s points are clearly of importance for the modernisation of parish polls, which has rather fallen through the net. The questions of the threshold for triggering the poll and what a legitimate subject for a poll should be are issues to which we would be happy to give further consideration. We would happy to meet the noble Earl to discuss this further. I am rapidly turning over in my mind the question of how one deals with that. Even though this is a relatively limited area, it might be the sort of thing that is appropriate for a Private Member’s Bill in a future Session, which might be given a fair wind. It is a relatively self-contained set of issues.
We are aware of the issue of whether one could institute postal or proxy votes. Certainly, we should be lengthening the time during which a vote could be cast and modifying regulations about the threshold for triggering a parish poll. All those issues really need to be considered.
I understand that the provisions of the regulations limit the content of polls to matters which have been considered by the parish meeting, which means that the person chairing a parish meeting could rule out of order any attempt to discuss matters which are not parish affairs and so prevent parish polls on, for example, EU referendums, or whatever it may be. However, we are all conscious that different parishes and local communities are often dominated by different small groups. This is one of the problems we have with getting back to community self-government. I am often conscious that I am extremely lucky to live in the community of Saltaire, which has far too many people who are highly educated. We are overstuffed with activists, and there are other areas around Bradford which are not so blessed with local activists willing to turn up to lengthy committee meetings in the evenings and take part in local community activities. With that assurance and that offer to talk further on this small but important issue, I hope that the noble Lord will feel able to withdraw his amendment.
The Earl of Lytton
My Lords, it was not my intention to press the amendment, particularly as we are in Grand Committee, but I am extremely grateful to the Minister for his comments and for his offer at any rate to look into the matter further and have a further discussion. It is a narrow but important issue, and it will be even more important if what I might call the fruits of the localism agenda in terms of expanding the number of organisations that operate at this level—perhaps not in name but effectively as parish and town councils—are set to increase. I hope that it will become the model of preference at community level. The matter is not without ongoing consequence and I will certainly forward to the Minister some of my paperwork. That will do for this evening and I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, the amendment calls for a report to Parliament on the impact of the new audit regime and for this to be made within three years of the passing of the Act.
Let me acknowledge at the start the undertaking given by the Government on a post-implementation review but its objectives appear to be somewhat narrowly based and do not address some of the fundamental issues. The Bill provides for arrangements that are significantly different from the current regime whereby the Audit Commission effectively acts as regulator, commissioner and provider of audit. As the pre-legislative scrutiny committee report sets out, the new regime is more complex and certainly more fragmented. The regulation of local audit will transfer to the Financial Reporting Council, professional accounting bodies and the National Audit Office. Commissioning of local audit will transfer to local public bodies, and the provision of local audit will go to private sector firms. Research and value for money will be picked up by the NAO to a limited extent and by the sector’s own self-improvement. The National Fraud Initiative’s ultimate destination has yet to be determined, as we have discussed, and the co-ordination of grant certification remains a little vague.
Although some of the bases have been covered, potential gaps remain. Some of the bodies that are subject to the new regime are accountable to government departments other than CLG. How is this to be co-ordinated across government? Audited bodies themselves will have to liaise with government departments, the NAO and auditors because the commission will not be on hand to act as an intermediary. The role of accounting officers within departments is fundamental to the management and control of resources. They are currently able to draw on information on the outcome of audits, implementation of major initiatives and value for money outcomes analysed by the Audit Commission. How is this all to happen in the future? Unless the Minister can tell us otherwise, there appears to be no organisation that will be publishing the outputs of more than £200 billion of public expenditure.
Clearly, quality of audits is paramount. The role of the FRC as overall regulator and its specific role in providing quality assurance to just a few “major audits” has been the cause of some concern. We hear the government assurances on this but consider that Parliament is entitled to a more formal report on how this is working in practice. Can the Minister confirm that the reports of the recognised supervisory bodies monitoring auditor performance outside major audits will be in the public domain?
There is also the need for oversight on how this is working for all “relevant authorities”, including health bodies and smaller authorities. Many of the provisions in the Bill are not applicable to health service bodies because equivalent provision is made in other legislation. We have not thus far sought to compare or contrast these provisions with those applicable to other relevant authorities. Contemplating consolidation may give the Ministers a nightmare at the moment but the Bill does not give us a sense of how joined up this is all going to be in practice. A report to Parliament would cover this. I beg to move.
Lord Wallace of Saltaire
My Lords, the Government support the intention behind this amendment. Post-implementation review is acknowledged good practice. It will provide the assurances that Parliament and the general public will want that the new audit arrangements are achieving the outcomes that we expect, and it will identify how policies might be improved if they prove to be less effective than we anticipate. For these reasons, the Government have already committed to undertake such a review. This is set out in the impact assessment, at Section K.
However, I am not persuaded that the timeframe envisaged in the amendment is the right one. The commitment in the impact assessment is to a review within three to five years of Royal Assent. This is in line with the Government’s general commitment to post-legislative review. The reason for preferring a slightly longer period in the case of this legislation relates to the implementation of local auditor appointment.
Assuming that this Act is passed in early 2014, the amendment would require a report in early 2017. As noble Lords are aware, the earliest date at which local auditor appointment would begin is 2017. It would seem to make sense to include some assessment of the move to local appointment in the proposed review. This would enable a robust assessment of audit quality and auditor independence in the new regime, and of the impact of local appointment on the audit supply market.
Nevertheless, government departments, through the accounting officer, are accountable to Parliament annually for the money voted to them. Where this money is distributed to others, accounting officers need to be able to demonstrate that appropriate accountability arrangements are in place, usually through an accountability systems statement. The external audit of local bodies is one of the evidence sources that will help to demonstrate whether the system is working effectively. We will ensure that the necessary assurance can be provided to accounting officers and to Parliament.
The provisions for the audit regime of health bodies have been designed to provide at least the same level of assurance to the Department of Health accounting officer and Parliament on the use of resources by the health sector as current arrangements. All the health bodies covered by this Bill are included in the annual accounts of the Department of Health. The department reviews the outcome of the audits and annual governance statements of all health bodies and the NAO also uses these to inform its audit of the departmental accounts.
Finally, I would like to say a few words of reassurance about the scope of the proposed post-implementation review. The impact assessment explains that the review will look at how well the core objectives of the local audit reforms are being met. I remind noble Lords that these objectives are: to deliver greater localism, decentralisation and transparency; to maintain competitive audit fees; and to uphold high standards of auditing.
There does not appear to be anything in the list of specific requirements in the amendment which is obviously out of scope. The impact assessment makes a commitment that we will work up the detail of the review with representatives from local government and other interested parties. I hope that these reassurances will satisfy the noble Lord and he will be willing to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the noble Lord for his response. Of course, I will withdraw the amendment.
As I said in moving the amendment, I was aware of the proposal to have a post-implementation review. I accept the point about the timeframe. If it was done within three years, we would not have had any—or certainly many—local appointments of auditors so would not be able to judge the ramifications.
I do not know whether the noble Lord can help me on a further point, or write to me on it. In considering the Bill, I do not think that we have done enough work on how the regime for health bodies and other relevant bodies fits together. They are all defined as being relevant authorities. However, a whole raft of provisions appear to apply to relevant authorities other than health bodies. We may not have an overall view of how that fits together but one would hope that any review of how the measure will work in practice would pick up what the inconsistencies and consistencies of the regimes are and what lessons can be learnt from one stream which could benefit the other. That aspect appears to have received less attention than many other aspects of the Bill. However, I accept the undertaking that there will be a post-implementation review based on consultation with relevant bodies. I accept the point about a three to five-year timescale rather than within three years. That seems to me entirely reasonable. I do not know whether the noble Lord can say anything further on the health bodies point.
Lord Wallace of Saltaire
I take the point about health bodies. This clearly is an important part of the arrangement. We, of course, intend to include health service bodies in the post-implementation review. If there are other matters about the health bodies that the noble Lord would like to discuss between Committee and Report, I am very happy to do so. We recognise that this is an important part of the whole shift.
Lord McKenzie of Luton
I welcome that and would like to take up that opportunity. In the mean time, I beg leave to withdraw the amendment.
“(1) Section 210A (extraordinary report: local authorities) is amended as follows.
(2) In subsection (1), for the words from “the Audit Commission” to the end substitute “the regulator may require the local authority to allow its accounts, so far as they relate to the provision of social housing, to be audited by a local auditor appointed by the regulator.”
(3) After subsection (1) insert—
“(1A) The regulator may not appoint a local auditor to audit the accounts of a local authority if that person—
(a) is the person (or one of the persons) appointed under or by virtue of the Local Audit and Accountability Act 2013 to audit the authority’s accounts, or(b) was the person (or one of the persons) who carried out the most recent completed audit of the authority’s accounts under or by virtue of that Act.“(1B) Sections 19(1), (2), (5) and (6), 21 and 22 of the Local Audit and Accountability Act 2013 (local auditors’ general duties and right to documents etc.) apply in relation to an audit under this section as they apply in relation to an audit of the local authority under or by virtue of that Act.
(1C) On completion of the audit under this section, the local auditor must report to the regulator about such matters and in such form as the regulator determines.”
(4) Omit subsections (2) and (3).
(5) In subsection (4) for “Audit Commission’s costs of preparing the report” substitute “costs of the audit (including the local auditor’s remuneration)”.
(6) For subsection (5) substitute—
“(5) In this section—
“accounts” has the meaning given by section 4 of the Local Audit and Accountability Act 2013;“local auditor” means a person who is eligible for appointment under or by virtue of the Local Audit and Accountability Act 2013 as an auditor of the local authority’s accounts.”(7) In the heading, for “report” substitute “audit”.
In section 249(1) (management transfer) after “section 210” insert “or 210A”.”
Lord Wallace of Saltaire
Amendment 23A would add new provisions within Schedule 12. The purpose of this amendment is to include local authority social housing providers within the Homes and Communities Agency’s existing powers to require a separate audit report into social housing accounts, once the Audit Commission has been abolished.
Currently, Section 210 of the Housing and Regeneration Act 2008 gives the Homes and Communities Agency a power to order an extraordinary audit as part of an inquiry under Section 206 of that Act in respect of a private registered provider of social housing where it has serious concerns that a housing provider has mismanaged its affairs. The agency can require the registered provider to allow its accounts and balance sheet to be audited by a qualified auditor appointed by the regulator.
Section 210A applies this regime to local authority housing providers by placing a duty on the Audit Commission, if asked by the regulator, to provide a report on the local authority’s accounts, so far as they relate to the authority’s provision of social housing. Amendment 23A ensures that local authority social housing accounts continue—upon closure of the Audit Commission—to be subject to examination as part of a Section 206 inquiry by enabling the Homes and Communities Agency to appoint an auditor which is on the register held by the recognised supervisory body to undertake an extraordinary audit. I therefore beg to move this amendment.
“Charities Act 2011 (c. 25)99A The Charities Act 2011 is amended as follows.
99B (1) Section 149 (audit or examination of English NHS charity accounts) is amended as follows.
(2) In subsection (2) for “a person appointed by the Audit Commission” substitute “a person who—
(a) is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006,(b) is eligible for appointment as a local auditor (see Part 4 of the Local Audit and Accountability Act 2013), or(c) is a member of a body for the time being specified in regulations under section 154 and is under the rules of that body eligible for appointment as auditor of the charity.”(3) In subsection (3)—
(a) for “the Audit Commission” (where it first occurs) substitute “the charity trustees”,(b) in paragraph (a) for “a person appointed by the Audit Commission” substitute “a person who is within subsection (2)(a), (b) or (c)”, and(c) in paragraph (b) for “a person so appointed” substitute “a person who is qualified to be an independent examiner”. (4) After subsection (3) insert—
“(3A) For the purposes of subsection (3)(b), a person is qualified to be an independent examiner if (and only if)—
(a) the person is independent,(b) the charity trustees reasonably believe that the person has the requisite ability and practical experience to carry out a competent examination of the accounts, and(c) the person—(i) falls within a description of person for the time being included in the list in section 145(3), or(ii) is eligible for appointment as a local auditor (see Part 4 of the Local Audit and Accountability Act 2013).”(5) Omit subsection (4).
(6) For subsection (5) substitute—
“(5) The Commission may—
(a) give guidance to charity trustees of an English NHS charity in connection with the selection of a person for appointment as an independent examiner;(b) give such directions as it thinks appropriate with respect to the carrying out of an examination in pursuance of subsection (3)(b);and any such guidance or directions may either be of general application or apply to a particular charity only.”(7) Omit subsection (8).
99C (1) Section 151 (audit of accounts of larger groups) is amended as follows.
(2) In subsection (4)(b), for “a person appointed by the Audit Commission” substitute “a person, appointed by the charity trustees of the parent charity, who is within section 149(2)(a), (b) or (c)”.
(3) In subsection (6)—
(a) for “Subsections (4) and (6) of section 149 apply” substitute “Section 149(6) applies”, and(b) for “they apply” substitute “it applies”. 99D (1) Section 152 (examination of accounts an option for smaller groups) is amended as follows.
(2) In subsection (6)—
(a) for the words from “the Audit Commission” (where it first occurs) to “so appointed” substitute “the charity trustees of the parent charity be audited by a person, appointed by those trustees, who is within section 149(2)(a), (b) or (c); or examined by a person, appointed by those trustees, who is qualified to be an independent examiner”,(b) for “(4) to (6)” substitute “(3A), (5) and (6)”, and(c) after “section 149(3)” insert “; except that in subsection (3A)(b) of that section the reference to “the charity trustees” is to be read as a reference to “the charity trustees of the parent charity”.”99E In section 154(1) (regulations relating to audits and examinations) after paragraph (a) insert—
“(aa) specifying one or more bodies for the purposes of section 149(2)(c);”.”
Lord Wallace of Saltaire
My Lords, as Cabinet Office spokesman in the Lords with some responsibility for charities, this is another amendment on which I shall speak. This is, indeed, about health service charities.
Amendment 24 makes changes to the Charities Act 2011 in respect of English NHS charities as a result of the abolition of the Audit Commission. Currently, the auditors of English NHS charities are appointed by the Audit Commission, so this amendment ensures that arrangements are in place for the audit of English NHS charities’ accounts after its abolition.
The trustees of English NHS charities will be able to appoint a person who is eligible to act as an auditor under the Companies Act 2006, this Bill or regulations under the Charities Act 2011. The amendment allows smaller English NHS charities, with income of between £25,000 and £500,000 in the year in question, to opt for an examination of their accounts as an alternative to audit, which is intended to minimise costs of producing accounts to the charities. This is consistent with the way smaller non-NHS charities are treated in the Charities Act 2011.
The criteria for who may undertake such examinations are set out in the amendment. An examiner of an English NHS charity’s accounts must be independent and the charity’s trustees must reasonably believe that the person has the requisite ability and experience to carry out a competent examination of the accounts. The examiner of an English NHS charity’s accounts must also be a member of a professional body as set out in Section 145(3) of the Charities Act 2011 if the gross income of the English NHS charity is between £250,000 and £500,000 a year, or be eligible under the Local Audit and Accountability Bill, once enacted.
The amendment enables the Charity Commission to give guidance to NHS charity trustees on the selection of an independent examiner and directions as to how an examination is to be carried out. The amendment also applies the same provisions to the group accounts of a parent NHS charity as have been set out for individual NHS charities. I beg to move.
Lord McKenzie of Luton
I have only one question for the noble Lord which concerns his reference to an independent examiner and a person who is independent. Can he remind us which definition of “independent” we are dealing with here?
Lord Wallace of Saltaire
I think we are referring back to the definition as in the Charities Act 2011. Since we have batted forward and back on the question of what exactly “independent” means in this respect, I may need to write to the noble Lord just to confirm the exact definition being used here.