House Of Lords
Monday, 29th January 2001.
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.
Combined Heat And Power
asked Her Majesty's Government:
What are their latest estimates of the amount of combined heat and power to be installed by 2010.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, we have set a target of at least 10,000 megawatts of installed CHP by 2010. Recent government projections indicate that around 7,600 megawatts will be installed by that date. That projection includes exemption of good quality CHP from the climate change levy, subject to EU clearance, but not the eligibility for enhanced capital allowances and exemption from business rating of plant and machinery which we have announced. A comprehensive CHP strategy will be launched in the coming months to ensure that, with the help of these and other new measures, our 2010 target is achieved.
My Lords, I thank the Minister for that latest estimate. However, is he aware that other estimates, particularly one prepared by the European Commission, in which I believe the DETR participated, indicate that the figure will be no more than 6 gigawatts by the year 2010? Whether the figure is 7.5 or 6, it is of course less than the desirable objective of 10. As the Minister is no doubt aware, there are obstacles which stand in the way of further development of combined heat and power. Does he accept, for example, that under the climate change levy, although a certain amount of CHP is exempted, that which is exported into the network is not, which therefore acts as a disincentive. Furthermore, under the new electricity trading arrangements, the balancing arrangements militate against CHP. If the Government are really concerned to achieve their objective, should they not remove such anomalies?
My Lords, I am aware of other estimates, including that of the European Commission and that of the CHPA, which puts the figure at 6,600 rather than 7,600. There are differences of assumption behind that which relate to the future of gas and electricity prices and other movements. We believe that our estimates are reasonably robust on the basis of policies already announced, excluding those to which I referred in my Answer. Nevertheless, the noble Lord is right. Further measures and the enhancement of existing measures will be needed to reach the target of 10,000 megawatts.Export of electricity direct to customers is covered by the climate change levy provisions, whereas export to the grid in that sense is not. That is in line with other licence providers. We are considering further the way in which the new electricity trading arrangements (NETA) will impact on CHP and small providers of CHP. Before reaching a final regime under NETA, we shall take into account the kind of considerations to which the noble Lord referred.
Lord Taylor of Blackburn
My Lords, I declare an interest as director of two power companies. Is the Minister aware of the great reluctance to invest in the energy market at present; first, because of the additional restrictions placed on the industry by the regulator, and, secondly, because of the commercial price of gas?
My Lords, I recognise that because of the relative movement of gas and electricity prices, there are uncertainties. Nevertheless, I believe that in general the new system of regulation will enable the energy industry to meet not only its energy supply objectives, but also the environmental and social objectives which the new regime should impose.
My Lords, is the Minister aware that the Embedded Generation Working Group recently reported and made a number of recommendations for stimulating the generation of small-scale electricity which covers CHP and renewables? Can he indicate whether the Government will take serious note of the recommendations made in that report?
Yes, my Lords. The working group recommended that Ofgem should review the whole structure of the regulatory incentives in relation to CHP and that an implementations group should be established under government leadership to take that forward. We shall consider the recommendations, including those for CHP, both in that context and as regards renewables. I hope, therefore, that we can come up with further measures to meet our target of 10,000 megawatts.
My Lords, I refer to the Minister's comments on social targets. I understand that only 35,000 of the poorest older people have benefited from the new HEES arrangements, HEES Plus, by having free central heating and insulation, and that the target figure is 280,000 by summer 2002. What plans do the Government have to ensure that that target is met?
My Lords, the new HEES programme is considerably more substantial than the old HEES programme in terms of the measures that can be introduced into the homes of the "fuel poor", with grants available of up to £2,000. There was a hiccup in introducing the new scheme as regards bringing onstream firms which were able to deliver the new provisions. We believe that that has now been resolved. Just before Christmas the number of installations was up to the level of the original objective. We therefore think that, to within a few thousand, we should meet the target. Our overall fuel poverty strategy will be announced within a few weeks. That should bring together the HEES programme and other measures to benefit those who suffer from cold homes and low income.
asked Her Majesty's Government:
Why they did not fulfil their commitment to publish by November 2000 a Green Paper on mercenary activity.
Baroness Ramsay of Cartvale
My Lords, unfortunately, it did not prove possible to meet the target for publishing the Green Paper which was suggested by the Foreign Affairs Select Committee. But this is a complex and new issue. Whitehall consultations are continuing and it is important to have as good and effective a Green Paper as possible.
My Lords, would the Minister agree that the target of November 2000 was given not only by the Foreign Affairs Select Committee but by the then Minister, Mr Hain, in answer to my right honourable friend Menzies Campbell on 15th June 2000? Does she also agree that legislative measures against mercenaries in any one country are likely to be ineffective because such people will go off-shore? Will the Government suggest to the United Nations Secretary-General that he should convene a meeting of experts and NGOs with a view to drafting a new convention to replace that of 1989 to which the Government have felt unable to adhere because its definition is unsatisfactory?
Baroness Ramsay of Cartvale
My Lords, the deadline of November 2000 was the recommendation from the Foreign Affairs Select Committee. The Government accepted that recommendation and said that they would try to fulfil it. They have striven to produce the Green Paper by November 2000, as requested by the Foreign Affairs Select Committee. However, for the reasons I have given, that has not proved possible. It is a new and complex issue and many noble Lords will be aware of the problems of definition as regards mercenaries, private military companies and so forth. It is important that the Green Paper is as good and effective as possible.As regards whether one country can deal with the problem, a great deal of cross-border consultation and co-operation will be required. However, that does not get away from the fact that each country should deal with the problem as it arises within its borders. As part of our preparations for the Green Paper we have examined how other countries have tried to deal with the problem.
My Lords, having listened to the noble Lord, Lord Avebury, it appears that the position relating to mercenaries is most complex. Can my noble friend tell us the legal position as regards mercenary activity?
Baroness Ramsay of Cartvale
My Lords, the only existing UK legislation on mercenaries is limited to the Foreign Enlistment Act 1870. That makes it an offence to enlist to serve or to recruit to serve in the army and navy of a foreign country at war with another country with which the UK is at peace. I am advised that a successful prosecution has never been brought under the Act. It is also widely considered to be inapplicable to modern means.
My Lords, I am grateful to the noble Baroness for agreeing that international co-operation is necessary to deal with the problem, in addition to any domestic legislation which may come into considerations. Will she therefore undertake to consider my proposal to ask the Secretary-General of the United Nations to convene an expert conference, including representatives of NGOs which are concerned with such issues, to see whether the 1989 convention can be redrafted so as to enable the United Kingdom to sign it?
Baroness Ramsay of Cartvale
My Lords, as the noble Lord said, the United Kingdom has not signed the 1989 UN convention. In the 11 years since 1989 only 20 countries have signed it and as 22 signatures are required in order for it to come into force it has not done so.We have not signed it because we do not believe that it is enforceable in United Kingdom courts. The definition hinges on proving intent, specifically that a mercenary has been motivated essentially for private gain. Many believe that that would be difficult to prove beyond reasonable doubt. I must add that at present we see no possibility of obtaining international agreement to any meaningful amendment to the convention.
Lord Wallace of Saltaire
My Lords, does the statement which the Minister made on international agreement apply also to agreement with our NATO allies, particularly the United States and our European Union partners? The United States has employed private contractors to train the Croatian army and others, leaving some delicate issues for consultation.
Baroness Ramsay of Cartvale
My Lords, a study of other countries which have legislation on this issue includes the United States.
Uk Passports: Eligibility
Baroness Rendell of Babergh
asked Her Majesty's Government:
What qualifies a child born in the United Kingdom to hold a British passport.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton)
My Lords, a person born in the United Kingdom will become a British citizen automatically and be eligible for a British passport if, at the time of the birth, either parent (or the mother in the case of an illegitimate child) is a British citizen or settled in the United Kingdom. A child who does not become British at birth may qualify for citizenship later; for instance, if a parent acquires citizenship.
Baroness Rendell of Babergh
My Lords, I thank my noble friend for that Answer. If under the 1981 Act only the nationality of the father is relevant when the parents are married, what is the case when the parents of a child born in the United Kingdom are living together but not married, and the father is of British nationality but the mother is not? In any case, what part, if any, does the nationality of the grandparents play in all this?
Lord Bassam of Brighton
My Lords, I am not aware that the nationality of the grandparents plays a significant part. The determining factor is the citizenship of the parents and the need for a close and enduring connection with the United Kingdom through the parents.
Lord Roberts of Conwy
My Lords, can the Minister inform the House what criteria must be met by applicants who are not born in this country? For example, must they be of high repute in their country of origin?
Lord Bassam of Brighton
My Lords, we expect all British citizens to be of high repute.
My Lords, is the Minister aware that my grandchildren Virginia and Christopher were born in America of English parents and, therefore, hold US passports? In order to qualify for British passports must they surrender their American passports? Had they been born in an EU country, would they have had Italian, German or French passports?
Lord Bassam of Brighton
My Lords, I am grateful to the noble Baroness for that simple question, of which I should have liked advance notice. I shall reflect carefully on the matter and give the noble Baroness a fuller reply in writing.
My Lords, can the Minister tell the House whether a child born in this country to an asylum seeker who has been given exceptional leave to remain is entitled to a British passport, bearing in mind that the asylum seeker may no longer possess the nationality of his country of origin? Without wishing to become embroiled in the present controversy, can the Minister say how long it takes to issue a British passport following an individual's application for naturalisation?
Lord Bassam of Brighton
My Lords, I do not have the answer to the noble Lord's second question. I shall happily make some investigations and provide a response. One would not expect a child born to someone who had been granted exceptional leave to remain to be given British citizenship. If the individual had settled status and was entitled to indefinite leave to remain the position would be very different. It may well be that in such a case the child would qualify for British citizenship.
Baroness Gardner of Parkes
My Lords, is the Minister aware that many noble Lords appreciate the difficulties to which this Question gives rise and will receive letters afterwards? I have received a letter from a medical student who has been granted asylum and has almost completed the process of naturalisation, having paid the fee and applied for a passport in November. That individual must spend two months abroad for the purposes of medical studies but it appears that the passport will not arrive in time to enable that to happen. Can any other documentation be used to travel abroad in such a case?
Lord Bassam of Brighton
My Lords, the noble Baroness rather suggests that this is not a matter with which I can deal easily at the Dispatch Box. I prefer to deal with the inquiry in writing and forward it to the appropriate part of the Home Office.
Lord Cope of Berkeley
My Lords, I should like to press the Minister further on his response to the noble Baroness, Lady Rendell. Is a child born here of a British father and a foreign mother automatically entitled to British citizenship in right of the father, even if the parents are unmarried?
Lord Bassam of Brighton
My Lords, I should like to take a closer look at the details. I do not want to place on record information which may turn out to be false or misleading. I much prefer to discover the exact position in the circumstances. I shall place a copy of the correspondence with my noble friend in the Library and, according to the usual courtesies, provide a copy to the noble Lord.
My Lords, is the Minister aware that these questions illustrate the difficulty that many noble Lords experience in trying to give advice to correspondents on these subjects? To put a simple question, does the Minister recall that when the law was changed so as to provide that a child born in the United Kingdom acquired British citizenship only if one or both parents were British citizens, or, in the case of an illegitimate child, the mother, it was predicted that a number of cases of statelessness would arise? Can the noble Lord tell the House how many children born in the United Kingdom since that change in the law have become stateless and what their ultimate fate will be?
Lord Bassam of Brighton
My Lords, the point that the noble Lord raises was made powerfully in the early 1980s when the 1981 Act came into force. It was thought by some critics that the legislation would lead to a considerable number of stateless persons. That has not transpired. I shall furnish the noble Lord with some further correspondence on the precise statistics.
Central And Eastern Europe: Land Reform
Lord Faulkner of Worcester
asked Her Majesty's Government:
How they intend to promote land reform in the transition economies of central and eastern Europe, in the context of their White Paper Eliminating World Poverty: Making Globalisation Work for the Poor.
My Lords, we are supporting land reform in several transition countries in collaboration with the World Bank and other donors. The purpose of this work is to help poor rural people to secure the land rights which underpin their livelihoods. We shall continue this work and support access of poor people to global markets through promoting efficient and sustainable land use.
Lord Faulkner of Worcester
My Lords, I thank my noble friend for that positive reply. I declare an unpaid interest as a patron of the Terre Initiative which is a non-profit-making organisation that seeks to encourage land reform and property ownership in the transition economies of eastern and central Europe. Is my noble friend aware that paragraphs 90 to 96 of the White Paper Eliminating World Poverty: Making Globalisation Work for the Poor contain what many believe is the first public acceptance by the Government that the acquisition of land rights is part of the battle against world poverty? Does my noble friend accept that, unless the European Union stops regarding land reform purely as a country-specific issue and provides some funding for applicant countries with transition economies on a broad cross-sector basis, the task of extending property rights in those countries will be made immeasurably harder?
My Lords, sustainable rural development has been a key part of the programme of the Department for International Development for a number of years. We believe that ultimately responsibility for land tenure and administration lies with national states. However, we support efforts within states to improve access to, and security of, land rights. The European Union deals with applicant country accession on an individual basis.
Lord Howell of Guildford
My Lords, this is a Question about the new democracies of eastern and central Europe. The noble Lord, Lord Faulkner of Worcester, is absolutely right to emphasise the immense importance of land registration and restitution to enable those countries to get back on the tracks. Does the noble Baroness agree that expenditure under the PHARE programme is running at about 67 million euros but its effect has been evaluated as poor or at best acceptable? It has generated a good deal of criticism and is not really doing the job. I am sure that the attentions of the noble Lord, Lord Faulkner, will improve matters. However, at the moment it does not appear to be a very successful EU aid programme. Does the Minister agree that this is yet one more example of an area where, although there must be EU co-ordination, the actual administration would be far better left in national hands to be dealt with by people who really know about land reform, land transition and land registration there? Does the noble Baroness agree that, as in many other areas of EU aid policy, it would be very much better if these matters were restored to national hands so as to be more effective and help democracy on its way?
My Lords, we have had an ongoing debate in this House on a number of these issues, and criticisms have been made of the EU aid programme. I believe that I have made it clear in answering questions about the EU aid programme that we have worked tirelessly with the EU to bring about reforms to make the EU aid programme more effective, because we believe that the leverage we can achieve by working through the EU in a co-ordinated way is much greater than could be achieved by individual member states working in isolation.
Lord Wallace of Saltaire
My Lords, is the Minister aware that a number of the European Union applicant countries find that one of the difficulties they face in the transition is dealing with too many competing national aid programmes and that many of us therefore think that the PHARE programme has been rather helpful? However, does she accept that, in general, there is a substantial difference between land reform and aid for transition in general in the applicant countries of central and eastern Europe and in the former countries of the Soviet Union, where EU programmes have not only been less effective, but where the whole problem of land tenure and land reform is a great deal more complex and subject to political corruption?
My Lords, it is important that there are effective and efficient government systems which work to benefit poor people. We see the land reform process as part of that. It is important that the transfer of land ownership in the region is done fairly and transparently. For example, we are helping farmers to protect their constitutional rights to land and property by providing access to advice and resources. I agree with the noble Lord that some national governments find it difficult to negotiate with individual donor countries. The EU has put together a number of programmes to support accession countries. We believe it is important that those programmes are co-ordinated. We shall continue to do all we can to ensure that those programmes are efficient and effective.
Lord Lawson of Blaby
My Lords, the Minister will recall that the White Paper referred to in the Question very cogently spells out the enormous benefits that globalisation confers on the world economy as a whole, and, indeed, on the poorer countries in particular if they take advantage of it. Particularly in a week when the Davos international economic forum has ridiculous security arrangements because of an ill-intentioned coalition of interests against globalisation, why has there been no senior ministerial speech proclaiming the benefits of globalisation and following up the excellent White Paper?
My Lords, my right honourable friend the Secretary of State for International Development made a major speech on globalisation when she visited India 10 days ago. She is due to make another speech in New York on globalisation later this week. In the run-up to the publication of the White Paper, there have been a number of ministerial speeches on globalisation. They will continue because we believe that we are taking a lead with our contribution in terms of thinking through some quite complex and complicated arguments about the nature of globalisation and about the ways in which we can use globalisation to benefit the poor of the world.
Lord Ponsonby of Shulbrede
My Lords, does my noble friend agree that land reform in central and eastern Europe has encouraged people to buy their flats and houses, and that, as many of those properties are in extremely poor condition, people are ill advised to buy them as they may be taking on huge liabilities for the future? Therefore, does she agree that in any move towards land reform there should be prudent advice about the advisability of people buying their own properties?
My Lords, I agree with my noble friend that part of our objective in central and eastern Europe is to support the process of transition in such a way that its benefits are sustainable and in a way which spreads those benefits to all levels of society. Therefore, it is important that in our advice we ensure that the needs of individuals are taken into account and that, in so doing, we work across a range of issues, including not only the broader aspects of land reform but also land registration. That is an area which is being considered through the Lord Chancellor's Department.
My Lords, immediately after the speech of the noble Lord, Lord Goodhart, in the Second Reading of the Commonhold and Leasehold Reform Bill, my noble friend Lady Amos will, with the leave of the House, repeat a Statement that is being made in another place on the British Government's response to the earthquake in Gujarat.
Tribunals Of Inquiry (Evidence) Act 1921:: Shipman Inquiry
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)
My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say, the matters arising from the deaths of patients of Harold Shipman, with the following terms of reference:
On Question, Motion agreed to.
Commonhold And Leasehold Reform Billhl
The Lord Chancellor (Lord Irvine of Lairg)
My Lords, I beg to move that this Bill be now read a second time.The position of those who own long leasehold residential property in England and Wales leaves much to be desired. Not only do they own a wasting asset that declines in value with the years and may eventually become unsaleable, but many leasehold tenants have a wide range of grievances. These include high service charges, absentee landlords who allow the common parts of a block of flats to fall into serious disrepair and landlords who may exploit their position when it is alleged that a tenant has broken the terms of the lease. Yet, for many people, owning the freeholds of their homes is not an option. They have to be tenants. This is because of a technical rule of law. Obligations in relation to land, whether made between landlord and tenant or between neighbours, are called covenants. A covenant is either a positive obligation to do something, such as to repair a property or to maintain support, or is restrictive, such as an undertaking not to cause a nuisance. When a freehold property is sold, the buyer is generally bound by the restrictive obligations attaching to it but not the positive ones. This means that it is impossible to have freehold flats, because it is essential that any owner of a flat should be under positive obligations to other owners in the block, to provide support for other properties, to maintain the common parts and so on. By contrast, the greatest strength of leasehold property is that, on the sale of a lease, the buyer normally takes the property subject to positive and restrictive obligations alike, making leasehold the only system which can work in a building where there are several owners and shared parts and restricting owners of flats to leasehold ownership, with all the drawbacks to which I have just referred. The Government believe that the only way to overcome this unsatisfactory state of affairs is to bring forward a scheme which will combine the security of freehold ownership with the management potential of positive covenants which could be made to apply to successive owners of an interdependent property. The Government consider that to achieve this end they need specific and detailed provisions that lay down the essentials of the scheme proposed. It is our intention to leave open the wider question of whether and to what extent it should be possible to make the burden of positive covenants binding on buyers of freehold land more generally. That question was first considered in 1965 when the Committee on Positive Covenants Affecting Land, chaired by the noble and learned Lord, Lord Wilberforce, reported to Parliament. It is presently under review by the Law Commission. The Government arrived in office with two related commitments: first, to introduce such a scheme, called commonhold, under which occupiers would own their individual units outright and, through an association, own and manage the common parts collectively; and, secondly, to make further radical reforms to the leasehold system, and in particular to make it easier for leaseholders to obtain the right to manage their developments, to make it easier to buy the freehold of their homes and to provide better redress against abuses by landlords or their managing agents. The Bill is intended to deliver these commitments. The first part of the Bill would introduce commonhold. That will introduce to England and Wales a concept similar to the condominium or strata title legislation familiar in many other countries. The idea was first seriously mooted here in 1987 when a working group chaired by Mr Trevor Aldridge, then a law Commissioner, reported on a commonhold scheme for freehold flats. Our immediate predecessors in government twice consulted on draft commonhold Bills, in 1990 and again in 1996, but on neither occasion did they succeed in bringing proposals to Parliament. This Government have pushed forward with commonhold, versions of which operate successfully throughout much of the rest of the world. I do not expect this first part of the Bill at least to be the subject of controversy either in this House or in another place, as I believe that the commonhold concept is worthy of, and will receive, wide acceptance. Although commonhold has been widely described as a new way to own flats, and of course that is the most likely use for it, it is also available for any development where the occupants owe duties to one another related to their proximity to one another and to the need to manage and maintain common parts of a development. So it would be as useful a scheme for a business park or a large out-of-town shopping centre as it would be for mansion flats in Kensington or suburban housing estates. It could be employed for something as mundane as a shared car park. A commonhold will consist of two elements: units, which will be owned by individual unit-holders, and common parts, which will be owned by a commonhold association. The commonhold association is to be a private company limited by guarantee, whose members will be the unit-holders. The Bill provides for its constitution and for the mechanics of voting for various purposes and places on it a duty to manage the development. The details of its memorandum and articles of association will be set out in regulations. The Bill provides for the production of a commonhold community statement, or CCS, which is a combination of plans and of rules of management. Together with the memorandum and articles of the association, it forms the central governing document of the development. Rules governing use and maintenance of units should be set down in the CCS. We will develop a standard form of CCS allowing enough flexibility to take into account the wide range of possible developments, which might range between a small block of flats up to—though this may be some way off—a whole "new town". The standardisation of documentation is one of the most important features of commonhold and one of its main justifications. No longer will every development and owner within it be at the mercy of a more or less competent draftsman putting a lease together. It will not matter whether one buys into a commonhold in Newcastle or Newhaven; the basic rules will be the same. Certain fundamental matters are set out on the face of the Bill. There are, for instance, provisions for the enforcement of the rules of the development and for the raising of commonhold assessments, which will be the equivalent of service charges, the maintenance of reserve funds and other basic matters relating to the essence of the scheme. Much of the detail of the commonhold scheme in its day-to-day operation will be in regulations, particularly the registration process and the contents of both the CCS and the memorandum and articles of the commonhold association. This means that should any changes to matters of detail in the scheme be needed, they can be made quickly. I summarise now the proposed measures in Part II of the Bill. The Bill introduces a new right for leaseholders of flats to manage their building without having to prove shortcomings by the landlord or pay compensation. Leaseholders generally have a much larger investment in a block of flats than the landlord. It is therefore right that leaseholders should be able to take responsibility for managing this investment. This new right would give leaseholders the chance to make a better job of managing the property. Its very existence would encourage landlords to give their leaseholders better value for money. The rules are as simple as possible to minimise the scope for challenges. They are similar to the proposed new rules for collective enfranchisement. To ensure clear allocation of responsibility, democratic management and effective dispute resolution, the right would be exercised by a company with a prescribed constitution suitable for residential property management. All leaseholders would have the right to join. As it is a "no fault" right, we need safeguards for the landlord's legitimate interests and have tried to strike a fair and workable balance. Other rights are available if leaseholders wish to remove all responsibility from the landlord. The Bill makes a number of changes to the right of collective enfranchisement for flats. We propose to simplify the eligibility rules, which have proved unnecessarily restrictive. The Bill would abolish the residence test and remove the requirement for two thirds of the leaseholders in a block to participate. It would raise the proportion of the building that can be occupied for non-residential purposes from 10 per cent to 25 per cent and remove the low-rent test where it still applies. It would also restrict the existing exemption for resident landlords. Leaseholders would have to use a company with a prescribed constitution similar to that proposed for the right to manage and commonhold. This would ensure democratic management and an effective mechanism for resolving disputes. It would also help leaseholders to progress from the right to manage to enfranchisement and then finally to commonhold. All long leaseholders would have a right to join. At present, leaseholders can be unfairly excluded once the required majority has been achieved. We share leaseholders' concerns about the cost of enfranchisement but also recognise landlords' legitimate interests. We consider they are entitled to a fair market price, including a share of any marriage value. However, disputes over the price can result in leaseholders incurring costs which amount to as much as the price itself. We intend to reduce the scope for costly arguments. The Bill will amend the right of individual leaseholders of flats to buy a new longer lease. Many of the changes reflect those proposed for collective enfranchisement. It would remove the existing three-year residence requirement to help leaseholders who occupy their flat as a second home or sub-let it. To prevent short-term windfall gains by speculators, leaseholders would need to hold a long lease for two years before being able to exercise the right. The Bill will provide new rights for leaseholders of houses who have extended their leases under the Leasehold Reform Act 1967. They would be able to buy the freehold after the extended lease has commenced and be entitled to remain under an assured tenancy when the extended lease expires. The Bill would make a number of changes to leaseholders' existing rights to strengthen their protection against unreasonable charges. These changes are plainly needed. There is evidence of widespread abuse by bad landlords. The Bill will amend the definition of "service charge" under the Landlord and Tenant Act 1985 to cover improvements where these are payable under the terms of the lease. It will also give leaseholders new protection against unreasonable administration charges. I stress that these provisions would not enable a landlord to make charges for improvements or administration unless the lease allows them to be made. The Bill would extend existing requirements to consult leaseholders on proposed works or services. The Bill provides that ground rent is payable only when demanded. If paid within 30 days, the landlord would be prevented from making additional charges or starting proceedings. The Bill will introduce new restrictions on the use of forfeiture. Landlords are able to threaten forfeiture, often on spurious or non-existent grounds, to persuade leaseholders to pay unreasonable charges. Landlords would be prohibited from commencing forfeiture proceedings for any contested breach of covenant unless a leasehold valuation tribunal or court had determined that a breach had actually occurred. The Bill will make a number of changes to the leasehold valuation tribunals, to improve their effectiveness and speed up dispute resolution. These changes will considerably enhance leaseholders' rights. They will redress the unfair balance between landlords and leaseholders but at the same time respect landlords' legitimate rights. With the proposals for commonhold, they will implement the Government's commitments and put us on course for a system of land tenure which is more appropriate for our new century. Consultation has shown a broad consensus in support of these proposals. But there are inevitably differences of opinion on particular aspects. Some leaseholders have complained that they do not go far enough. I have to say that some of their expectations are unrealistic. What we have sought to do—no doubt we shall discuss it in our subsequent debates—is to strike a fair balance. Our proposals are aimed at resolving the main difficulties facing leaseholders in a way which I hope your Lordships will in due course agree is fair and balanced. I commend them to your Lordships. Moved, That the Bill be now read a second time.— (The Lord Chancellor.)
My Lords, I am most grateful to the noble and learned Lord the Lord Chancellor for his clear exposition of the Bill, for the helpful Explanatory Notes and for the extensive consultation going back to August of last year, although it was a pity that the document happened to be published at the peak of the holiday period.I believe that the noble and learned Lord has universal support for what he has put before us today. However, the ownership of property, the partial ownership of property and the non-ownership of property are highly emotive subjects. They are in many ways related to security and money. Over periods of time we have tried to improve the lot of one or the other, believing that we are a property owning democracy. We had the 1954 Act, the 1967 Act, the 1985 Act, the 1987 Act, the 1989 Act, the 1993 Act, the 1996 Act—it is almost like lottery numbers—and now we have the 2001 Bill. In principle, what is in the Bill appears to be widely acceptable. However, it reminds me a little of a great ponderous ship, steaming down the Solent, full of good intentions and worrying about the wash that may come behind. Today, it is not my job to go into the details, but to express some worry about whether the Bill will reach the statute book properly amended and with all matters considered and discussed at length. We are rather short of time, unless we are to hear from the noble and learned Lord that there is no intention of having an election for a number of months. But it is right to bring the Bill before the House and the three areas of activity—commonhold, the leasehold of flats and the leasehold of houses—are of vital importance. We all accept the principles of commonhold but the implementation of it is difficult. For new buildings, it presents no problems provided that the developers and the financiers can be encouraged to see the wisdom of adopting it. For existing buildings, the requirement to have the approval of everyone becomes difficult when one takes into account the European Convention on Human Rights and matters of that kind. We must assume that the commonhold proposals are for the longer term but they need to be sold and presented. They are understandable, but when we come to the financing of these ingredients it may be another matter. Banks are very happy to finance individuals with mortgages. But have noble Lords tried to get a bank to finance a property through a company when there are tenants? I want to give an example of my own situation. I am no longer a tenant. For 40 years I was a tenant of great estates in London. After the passing of the recent Act, with considerable support from all round, I became a head lessor. I managed to enfranchise. It was a most enlightening five-year experience. There were only seven of us, but each one needed a solicitor. We needed a solicitor for the company which we formed, which was not limited by guarantee—we were slightly ahead of the noble and learned Lord. We needed a solicitor for the vendor of the freehold and another solicitor as well and we eventually needed a whole range of valuations. Finally, in order to make it work, we had to serve a collective enfranchisement notice on the landlord, who was perfectly happy to have it served on him; but if it had not been served on him, there would have been some doubt as to whether he would get roll-over relief on the sale. My point is that, first, we have property law and, secondly, we have taxation. We are talking about money. The legislation introduced some time ago by my noble friend Lord Strathclyde caused me considerable pain. All kinds of people were saying how wonderful landlords were. I shall give the House one example of—
Lord Williams of Elvel
My Lords, I did not hear the noble Lord, Lord Selsdon, declare his interest in this matter before he started his speech.
My Lords, I did not believe that I had any interest. I have already enfranchised and I am no longer a tenant. But if I did not disclose that, I apologise to the noble Lord. I was explaining that my interest lies in the background and experience that I have gained.The problems lie in money and valuations. All kinds of problems may arise from the Bill. There are about 2.1 million leases in the country—one million flat leases, which are mainly in the South East and the Greater London area, and one million or so house leases, most of which are outside that area. They have different land values, depending on where they are, different ground rents and different leases. Those two million or so leases affect mothers, fathers, grandparents and children. It is a wide group of people. I am worried that if we do not have sufficient time to devote to the Bill it may go through with many flaws. I shall give your Lordships some examples of flaws. When is a house a house? When is a flat a flat? And when are they not? In efforts some time ago to stop enfranchisement, various landlords devised certain schemes. If they took a house and cut a little out of it, it ceased to be a house and became a flat. As a result, a freehold could not apply. It was then decreed by others that a house with a little cut out of it was neither a flat nor a house. It was a dwelling but it did not qualify for enfranchisement under the Act. I have another example. People insisted that one could not buy a leasehold or hold a head lease unless it was through a corporate entity—meaning a company. The company would hold the head lease and the lesser interests of the sub-leases would have to be held through companies. That was fairly distressing for people who wanted to have a nice flat on a reasonable lease but did not like the idea of being a company. Those companies were then created with great advisers. Some of the companies found that their sole asset was the flat. This is where my taxation point comes in. The occupant of the flat was not the owner. The flat was owned by a company. Therefore, someone might have construed that the occupant of that flat had a benefit in kind, which might well be a taxable benefit. Those are areas which cause me concern. If we now find that there is no residential test, a company which enfranchises may then have the right to assign that lease to the beneficial owner. But does that beneficial owner then incur a capital gains tax liability? Those points need to be looked into. In general, this is a Bill which all sides seem to welcome. There are some small issues of concern such as valuations but the problem is that in one area we are treating houses and flats differently. Why cannot we treat them in the same way? Why cannot the time of valuation be the time the notice is served or the time that the value is agreed? If a valuation has been made and the acquisition of the freehold interest is in principle in place, surely we should encourage people to move forward as quickly as possible. The owner of the freehold would like to have his funds so that he may reinvest in another area of activity. On the other hand, some tenants want the right to enfranchise and then hold on for as long as possible without coming up with the money. To me, that seems unfair. Equally, when one looks to enfranchise, if the minimum number of people needed to qualify agree to enfranchise, the price is lowered. All kinds of side deals may be struck where 95 per cent of those involved wish to agree, hut, having worked out with clever lawyers that they need only a certain number, the price is lower. In the end, of course, this is all about money. I hope that the noble and learned Lord will agree to give the House enough time to cover all the points in detail. I have wondered whether it is the Labour Party seeking to win the householder's vote in the next election that has led to this legislation suddenly being brought before us. The measure will take time to consider. I commend it to the House and I am grateful for the opportunity to speak today.
My Lords, on these Benches we welcome the Bill. However, we do not do so unreservedly because we have a number of doubts and queries, some technical and some more substantial. However, taking all in all, we welcome it warmly. I should declare an interest to the House because I am the owner of a flat that is currently leasehold.In some ways, the introduction of commonhold marks the most important change in land law since the Birkenhead reforms of 1925. Speaking as a lawyer rather than as a human being, one can describe this as an exciting Bill. In this country, unlike anywhere else in the world, we have developed a curiously hybrid system of long leasehold, which is a hybrid of owner occupation and the renting of property. A premium or lump sum is paid when the lease is acquired and then only a relatively small ground rent is paid. One would need to be a social historian to understand why this system developed. I suspect that it is because the Westminster estate and other major landowners in urban areas wanted to keep control over their land rather than selling it outright to developers, or developing it themselves and then selling off the freeholds. However, over the years, the leasehold system has been shown to have many disadvantages. First, when the lease comes to an end, lessees have to move out, buy a new lease, or pay a much higher rent than they had been paying in the past. Secondly, as the lease approaches its end, its value diminishes sharply. It is then extremely difficult to secure a mortgage on leases with less than 30 or 40 years to run. Particular problems arose in the early 1960s in Cardiff and elsewhere in south Wales where very large areas had been developed on long leaseholds which were all about to expire at the same time. This meant that a large number of ordinary working people potentially faced the loss of their homes unless they were able to pay substantial sums of capital for new leases on the freehold. The result of that was the introduction of the Leasehold Reform Act 1967 which enabled most long leaseholders to enfranchise— to acquire the freehold—on terms which were favourable to them. The Act was challenged by the Duke of Westminster under the European Convention on Human Rights, but that challenge was rejected in the European Court. As a result, for many years now, very few, if any, new houses have been built for sale as leaseholds. Indeed, many leaseholders of houses have enfranchised. However, the situation is quite different as regards flats. For the reasons explained to the House by the noble and learned Lord the Lord Chancellor, flats cannot be built for sale as freeholds. Under present law, insuperable difficulties must be overcome as regards liabilities for the maintenance of buildings, the ownership of common parts and so forth. Since the First World War and until the 1980s, it has been unattractive to build flats for rent because rent controls made it uneconomic for landlords to do so. Furthermore, tax advantages could be secured. when buying leaseholds because mortgages were tax deductible whereas rents were not. I agree that the best answer to these problems is commonhold. It is a form of ownership which has worked well in other countries, in particular in the USA, but also in Australia, Canada and many other areas. Commonhold overcomes the technical difficulties of freehold flat ownership and it gives the unit-holder an interest which potentially will last for as long as the building itself. One criticism of the scheme which has been voiced in some quarters is that the conversion of an existing block of flats to commonhold requires the unanimous consent of the interested parties. As a result, most commonholds are likely to be established in new blocks developed as commonholds. It may be difficult to secure the consent to convert of all the lessees in existing blocks of flats, in particular if those blocks are of any size. I have some sympathy with that view. It is arguable that, where a substantial majority are in favour of conversion, they should be able to convert. However, serious legal and managerial problems would arise in a block which was part commonhold and part leasehold. Complex legislation would be required to deal with such problems. Ultimately, I should like w see the possibility of effecting conversion without complete unanimity, but I should prefer to see commonhold start on a straightforward basis before we encounter the more difficult issues. That should be a matter for future legislation rather than for the present Bill. It has also been suggested that the creation of new leaseholds should be forbidden. However, commonhold is an untried system and I think that it would be premature, at this stage at least, to make it obligatory. If, as I expect, buyers prefer commonholds to leaseholds, commonhold developments will fetch higher prices. Leasehold flats will then follow leasehold houses into oblivion. I do not believe that it is likely to be necessary to ban the creation of new leasehold properties and, as I have said, it would be premature to do so. I wish to raise some issues as regards commonhold in Committee, but those are technical points and I do not want to discuss them now. However, a number of important matters have been left to regulations which we have not yet seen. Under Clause 17, restrictions will be made on the terms on which commonhold units can be let. I agree that some restrictions will be needed. It is certainly undesirable to recreate long leaseholds by the letting of commonhold units. Equally, however, commonhold will not be attractive unless unit-holders have a reasonable ability to rent out their flats for a period of time if, for example, they are posted abroad or elsewhere in the United Kingdom and they envisage returning to their flats once the posting is over. The nature of restrictions on letting is commercially important and the Explanatory Notes contain a number of proposals, such as the imposition of an upper limit of seven years for a letting. The Delegated Powers and Deregulation Committee has proposed that those rules should be put on to the face of the Bill, or that we should be able to see the draft regulations before the Bill goes to another place. I do not know the Government's response to that suggestion because I understand that it has not yet been received by the Clerk to the committee. However, I believe that that recommendation has a good deal of force. Similar problems arise as regards the regulations which will prescribe the core contents of the commonhold community statement and the memorandum and articles of commonhold associations. The Delegated Powers and Deregulation Committee stated that if the draft regulations covering these points cannot be produced during the passage of the Bill, the first set of regulations should be made subject to the affirmative resolution procedure, thus giving noble Lords an opportunity to discuss them. That is a recommendation with which I agree—not surprisingly, because I am a member of the committee. Commonhold is an idea whose time has come. The Law Commission has been working on it for many years; indeed, for well over a decade. Very extensive consultation has been conducted and these proposals are ones which I am happy to endorse. I turn now to the alterations to leasehold rules. I have a little less to say on that matter, although it takes up more than half the Bill. My noble friends Lady Hamwee and Lady Maddock will be mainly involved with this part of the Bill, which contains developments of existing law rather than creating wholly new proposals. I agree on the whole with these proposals, but I have some problems with them, some of them of some seriousness. We strongly support the idea of tenants being able to form right-to-manage companies, even if the landlord is not at fault. My own block is self-managed. The system works well and should certainly be encouraged. But I see no reason why the landlord should be a member of a right-to-manage (RTM) company, and I see a good many reasons why the landlord should not be a member. Of course, landlords are entitled to information about what is being done by the right-to-manage company, but there are considerable dangers if landlords are entitled to be members of the RTM companies. Certainly if they are members, they should not have a vote. Possibly the rights of landlords to enforce obligations against RTM companies should be restricted to cases in which breaches by the RTM company cause damage to the landlord's reversionary interest. That is on the analogy of the Leasehold Property (Repairs) Act 1938, which was useful and prevented abuse of the landlord's position. Conversely, should not commercial tenants in a block—for example, the tenants of shops on the ground floor—be entitled to be members of the RTM company, instead of its being made up only of residential tenants? I am also concerned about the proposal that if an RTM company enfranchises and becomes a right-to-enfranchise company, an RTE company, any member of the RTM company who does not want to participate in the enfranchisement will have to give up membership and the right to participate in the management. I can see that it is more complicated if we have to have separate RTE companies and RTM companies in the same block, but I believe that it is not impossibly so. I also believe that it is seriously wrong to exclude someone from management simply because he or she is unable or unwilling to contribute to the cost of enfranchisement and therefore to be a member of the RTE company. I am also somewhat concerned about the proposal to abolish the residence test. Rights under enfranchisement legislation confer considerable financial benefits on lessees. That is wholly justified in the case of residents, because having to pay the full market cost might threaten them with the loss of their homes. But I see no justification for giving the same benefits to non-residents buying as investors or speculators. It could be argued that the residence test should be excluded from collective enfranchisement, because it is desirable to encourage collective enfranchisement and that would make it somewhat easier, but I see no case for excluding a residence test for a lease extension for an individual flat. We then come to the question of marriage value, which is a contentious issue. We take the view that it should be eliminated from the valuation payable to the landlord. Marriage value is largely due to the fact that the lessee, the tenant, is a special purchaser who is willing to pay more than market value. But the fact that the lessee is willing to pay more than market value is due to the weakness of the lessee's position, because if he or she does not buy it will be necessary to find somewhere else to live, resulting in considerable practical awkwardness. There is somewhat less objection to payment for marriage value in cases of collective enfranchisement, in particular because there the marriage value is likely to be relatively small. But where an individual leaseholder receives an extended lease, there is no marriage; indeed, there is the opposite, because the length of the separation is likely to be prolonged. Under the 1993 Act the landlord is entitled to compensation for diminution of the value of his interest in the flat and in the rest of the block if that is affected by the grant of the new lease. That seems fair enough, but why should the landlord be entitled to marriage value when there is no marriage? It increases the amount of capital the lessee has to find and makes the claim for an extended lease more difficult to exercise. I have a few further points on the Bill. A number of previous proposals which appeared in particular in the consultation paper published last August do not reappear. They include a requirement for landlords to keep service charges in client accounts; tenants' right of access to accounting information; and extended powers for the courts to vary unsatisfactory leases. All these seem to be points with a good deal to be said for them, and I should like an explanation of why they are not included in this Bill and whether it is intended that in due course they will be brought forward in a separate Bill. Finally, an issue of considerable importance is the fact that the Bill will increase the workload and importance of the leasehold valuation tribunals. It is also desirable that the LVTs should be one-stop shops on leasehold issues. The existing division of jurisdiction between the LVTs and the county courts should be ended. I understand that the Government may not feel that it is appropriate for that to be included in this Bill, but will the Minister assure us that the LVTs will be given the funds and support needed to do the job properly? Will the Minister also be prepared to consider that legal aid should be available in the LVTs, as it is now in the lands tribunals, to which appeals can be taken from the LVTs? There are very serious problems with the absence of a level playing field in the LVTs, particularly with regard to the owners of large blocks of flats, who may be able to afford to use the most expensive and experienced advocates to argue their cases against tenants. They can pick on one tenant, who will then set a precedent for the rest of the block. In the absence of legal aid, the tenant may have to appear in person, being unable to afford any kind of legal assistance, and he or she then faces a very unlevel playing field indeed. Having made those various points, I should repeat what I said at the beginning, which is that we think that, subject to the criticisms which I have made and a number of other more technical ones which I have not raised, the Bill is a very good step forward, which we welcome, although we think it is some way short of being perfect.
My Lords, with the leave of the House, I shall now repeat a Statement on Her Majesty's Government's response to the earthquake in Gujarat which is being made in another place by my right honourable friend the Secretary of State for International Development. The Statement is as follows:"At 03.16 GMT on Friday 26 January, a major earthquake measuring 6.9 on the Richter scale occurred in western India. The epicentre was located 50 kilometres north-east of the town of Bhuj in Gujarat state in India. It affected an area as large as Wales. It was also felt in Pakistan, Nepal and southern India. "Latest estimates are that over 20,000 are presumed dead, thousands more are missing and some 50,000 people are reported injured. Initial reports suggest that 500,000 people have been left homeless. As serious after-shocks continue, hundreds of thousands of people are living outside their homes. After-shocks are also hampering the search and rescue and relief effort. Provision of water is a particular problem in Bhuj. Aerial assessments carried out by the Government of India, in which staff from my department participated, described the situation in many areas as "utter devastation". According to the Indian authorities, 95 per cent of the buildings in Bhuj are no longer habitable. "Infrastructure such as roads, bridges, railways, communication systems and electricity lines have been severely affected, and an oil slick is affecting operations at the oil terminal at Kandla port. Communication with Bhuj is gradually being restored using satellite. Indian police are leading the search and rescue effort, aided by 5,000 Indian military personnel. Priorities are water, shelter, blankets and food. The Indian authorities are mobilising significant resources to address these needs. This is being supported by international relief assistance, which has started to arrive. "I am sure that the whole House would wish to join me in expressing our deep sympathy and concern to the people of Gujarat and their relatives and friends in Britain and elsewhere. The Queen and the Prime Minister have sent messages of sympathy to the Government of India. "The Department for International Development's emergency response centre has been working round the clock since the earthquake struck. We dispatched a UK search and rescue team of 69 personnel, made up of 25 UK Fire Service volunteers from Lancashire, Lincolnshire, Greater Manchester, Chester and Leicestershire, and specialist NGOs. The Ministry of Defence provided a plane at a cost to my department of £98,000. Officials from my department led the team. They arrived in Bhuj at 8 a.m. UK time on 28th January and started work within 15 minutes. They are presently targeting some of the worst affected buildings. They are working in close co-operation with the Indian authorities and have so far managed to rescue four people alive. "Also, in a joint operation with my department, 75 search and rescue personnel from the Russian Ministry of Emergency (EMERCOM) arrived in Bachau on 28th January and have rescued eight persons to date. They also have with them an airmobile hospital. A second Russian aircraft, part-funded by my department, is awaiting clearance from the Indian authorities to bring in 3,280 blankets and 45 family tents. "A United Nations disaster assessment coordination team (including one UK member) has also been despatched and will commence operations as soon as possible. Two disaster assessment experts from my department have helped organise the NGO disaster relief co-ordination meeting and helped with aerial reconnaissance. "The effort is now moving from a focus on search and rescue to organisation of relief. All existing systems have broken down. People lack housing, blankets, clothes, food and water. We must ensure that those who survived the earthquake are cared for until normal systems can be restored. "My department has spent £2 million on the provision of immediate relief. Another £1 million will be allocated today. The Chief Secretary has agreed to make available £9 million from the reserve so that we can allocate a total of £10 million to support this emergency relief effort without reducing our spending in other parts of India. We shall also work in Brussels and elsewhere to ensure that other development agencies make available appropriate funding. "The Indian Government are well organised and are providing food, army personnel, heavy lifting equipment, mobile operating theatres and medical supplies, but the scale of the emergency is such that some of the resources needed cannot be supplied in the region. We are therefore also arranging to fly out three aircraft carrying 1,200 tents and other shelter items from the Department for International Development's emergency stockpile in Staffordshire. A fourth aircraft will also be dispatched today from Ostend via Brindisi carrying 10 sets of trauma equipment and plastic sheeting. "This is a very serious disaster. Organisation by the Indian Government is good. But international help is needed to ensure that all who survived the earthquake but have lost everything are provided with health care and other basic essentials until such time as they can rebuild their homes and livelihoods".
My Lords, that concludes the Statement.
Lord Howell of Guildford
My Lords, I am sure everyone is grateful to the noble Baroness for repeating the Statement on this tragedy. It is an unspeakably tragic event. It is difficult to find words appropriate to describe the size of the horror and the scale of death and destruction that has taken place. Whole villages have been wiped out; large towns have been 95 per cent destroyed. These are things which are almost impossible to imagine from this distance; yet they have occurred to this great nation and are imposing the most dreadful suffering upon it.It goes without saying that we on this side of the House join totally with the message of sympathy expressed by the noble Baroness for the people of India as a whole, for those in the Gujarat region, in the towns and villages affected and for all their relatives and friends. It goes without saying, too, that we express our full support for everything that the Government have done already and are swiftly doing. From what the noble Baroness said, the agencies of government are moving fast and in a commendable way. This is good—although I fear it is only the beginning of a vast amount of work. I am sure that the noble Baroness will bear in mind that India is a fellow Commonwealth country and that we have a special responsibility to do everything we can to help in this moment of misery. We have enormous technical expertise in search and rescue in this country; we have our British charities and our great non-governmental organisations, which have immense skills in providing medical care, water, food and so on. I hope that they, too, will be given full support and that their needs—about which we may hear from noble Lords who are expert in these matters—will be met very swiftly. Perhaps I may ask the noble Baroness three brief and broad questions because it seems to me that everything that can be done at this moment is being done. First, as the Minister rightly indicated, hunger and thirst are already very big killers. I heard one suggestion that hunger and thirst will kill almost as many as the falling concrete which crushed schools and homes; that it will be the new horror after the gigantic earthquake and the after-shocks. Tents are being flown in from various sources, as the noble Baroness described. However, what more can be done not only to provide shelter but also somehow to meet, short-term, the hunger and screaming thirst which will destroy many more lives even while we discuss the matter? Does the Minister have any news—anecdotal or otherwise—at this early stage about UK nationals who were in the region, who have been involved and who may have vanished in the holocaust? What are the first thoughts she can share with us about the longer-term organisation of what will be a huge relief operation, which will continue for many months— indeed, some sources have suggested years—so great was the earthquake? This is a blow imposed on a nation which, in many ways, has been moving fast into the modern world and taking the lead, particularly in new technology. A new, dynamic India is arising. But it has now been caught by the hand of fate and by natural disaster in a dreadful way and it has been shaken to the core. We will provide whatever support we can from this side. I am grateful to the noble Baroness for explaining the position so far.
My Lords, I, too, thank the Minister for repeating the Statement. Only two weeks ago I was in Gujarat. I was in an area no more than 150 kilometres from the devastation. This area has had a number of tremors during the past few months—some of which I experienced—but no one imagined that an earthquake on such a scale would ever take place. The situation is more serious because the area of Gujarat has not had any rain for about three years. There is an acute shortage of water.I should like to thank the Department for International Development for its commendable action, which was taken immediately the news of the earthquake was announced. The financial support mentioned by the Minister, amounting to almost £13 million, is very much welcomed. The Government of India expect that it will cost billions of pounds to restore normality to that part of the country. It is also commendable that the world community has responded to this particular disaster. For the people of Gujarat, particularly those living in the desert area of Kutch, the devastation is frightening. The epicentre of the earthquake on 26th January was in the area of Bhuj and wiped out the entire city. It is a human tragedy on an unprecedented scale—an earthquake of the highest recorded magnitude in the past 50 years. The information supplied to me by His Excellency the High Commissioner for India, confirmed by a large number of e-mails that I have received, suggests that until yesterday at least 188 after-shocks had been recorded. No one can rely on official figures of death and destruction. Suffice it to say that the final figure may well exceed the five figures that are presently anticipated. It has been reported that over 14,000 people have been injured to date. There is a crucial need for facilities to care for the injured people. It is a credit to the state government of Gujarat and to the Government of India that they are meeting the emergency more or less on a war footing. Reports reaching the community in England suggest that the entire country has been galvanised into action to help with relief and rehabilitation. The army, navy, air force, paramilitary forces, the civil administration, NGOs, as well as the communities in the UK and in Gujarat, are engaged in assisting the relief work. A number of charities in the United Kingdom and the DfID have worked to provide immediate help. Great credit should be given to those already assisting in Gujarat and others doing similar work in this country. I should like to make a number of suggestions that may help. First, perhaps the Minister can inform the community in this country how medicines and other emergency supplies could be sent to Gujarat. I understand that Air India has already announced plans to lift some aid free of charge. I understand that other airlines may take the same course. As it is still winter, any assistance that the Government can give to ensure that a supply of warm clothes and blankets reaches the area would be very much welcomed. Secondly, a substantial number of Gujarati minorities are settled in this country. Communication is almost non-existent in the earthquake area. The transport infrastructure is in a very perilous state. Is there some way in which the DfID could co-operate with the High Commissioner for India in a joint effort to provide people in this country with information about what is happening in Gujarat? It is almost impossible to obtain first-hand information, although I understand from the High Commission that in certain key towns telephone numbers are available which could provide information to the community in this country. Will the Minister also thank all the international agencies, including charities, for the way in which they have responded to this crisis? The world community can take comfort from the fact that as far humanity is concerned we shall all stand together to assist those who have suffered.
My Lords, I thank the noble Lords, Lord Howell and Lord Dholakia, for their expressions of support for the work so far done by the Government. The staff of the Department for International Development who have been involved in this relief effort have worked tirelessly round the clock. Our response has been immediate and effective. I am sure that the words of support from this House will be very well received.The noble Lord, Lord Howell, asked three questions. With regard to the first question about the issue of hunger and thirst, as the noble Lord, Lord Dholakia said, this is exacerbated by the fact that there has been a drought in the area for the past few years. One of the NGOs with whom we are working, OXFAM, has a great deal of expertise in this area and will be considering the question of water and sanitation. Support has also been given by other NGOs and other governments in relation to considering, as a matter of priority, the supply of food, water and sanitation. The noble Lord asked, secondly, about UK nationals. I am aware from press reports that one person from the UK, a doctor, died in the earthquake. I am not aware of any others. However, I shall keep the noble Lord informed of any further news we receive about UK nationals. There will be need for a huge, immediate relief operation, and the scale of longer-term reconstruction will be enormous. For example, 95 per cent of the housing in Bhuj is uninhabitable. That means that donors will have to work together. It will be an issue for the World Bank and for the Asian Development Bank. The noble Lord will be aware that India is our biggest bilateral partner. We currently have a programme there amounting to £100 million per year. When matters have settled down, we shall obviously consider how we can support that programme and the reconstruction effort. Some general questions were raised by both noble Lords about British charities and NGOs. A number of British charities and NGOs, including OXFAM and Save the Children, are already active. The Association of Medical Doctors of Asia and International has despatched a multinational medical mission from Japan to provide humanitarian assistance. The IFRC, in partnership with the Indian Red Cross, is deploying blankets, tarpaulins and large tents. It has also donated units of blood plasma. Other UN organisations will have roles to play. For example, the World Health Organisation will be concerned with the health issues that emerge. The noble Lord, Lord Dholakia, raised three specific points. The first concerns informing the community in this country about how essential supplies can be sent to Gujarat; the second concerns communication. I shall deal with those two questions together. The department has had a great deal of experience, particularly following our experience in Kosovo, of building communication links and ensuring that families and communities are able to talk to each other. I shall certainly consider the noble Lord's suggestion about working with the Indian High Commission in this matter. I shall also consider the question of medical supplies and ensure that assistance is given to the communities in this country who want to send urgent supplies to Gujarat. In addition, I shall certainly thank all the international agencies that have mobilised quickly and effectively in responding to this and other disasters.
My Lords, I believe that mention was made in the Statement that the earthquake also affected Pakistan. Can the noble Baroness give the House some clarification as to the situation in Pakistan, which, of course, is another Commonwealth country? As I say, although there has been mention of Pakistan, all the detail has centred on India. I should be most grateful if the Minister could provide some clarification in that respect.
My Lords, as we understand it, the earthquake was felt in Pakistan, Nepal and southern India, but the epicentre was just 50 kilometres north of Bhuj. The greatest elements of the disaster were experienced in Gujarat.
Commonhold And Leasehold Reform Bill Hl
Second Reading debate resumed.
My Lords, perhaps I may begin by declaring an interest as the chairman of LEASE, which, as some noble Lords may know, is an organisation funded by government grant to provide a much needed source of free legal advice in the leasehold sector, and to advise the Government. There is no doubt that there are major defects in residential leasehold tenure in England and Wales, most of them experienced by the leaseholder. LEASE is extremely busy. It deals with around 17,000 enquiries a year, 90 per cent of which are from leaseholders with a problem. It is on the basis of talking to some 15,000 leaseholders each year that LEASE feels confident that it understands leaseholders' problems sufficiently to talk to the Government about possible solutions.Perhaps I may also declare a past interest. I was, for a time, a tenant under a long lease in a mansion flat in London, the landlord of which was one of the more notorious gentlemen, or companies, in that particular profession. I emerged from that experience scarred. To that extent, I have to say that my sympathy automatically tends to be on the side of the leaseholder, rather than on the side of the landlord. However, I shall do my best to keep that tendency under control, as I hope that your Lordships will appreciate during the course of the proceedings on the Bill. I welcome the Bill. I must say at the outset that the Government have listened to advice. I believe that the present Bill represents a series of solutions that have been developed through a long period of consultation and with a consensus of the majority of players in the sector. There is no question but that this Bill will do much to improve the rights of the individual leaseholder and to revitalise common ownership. Of course, it is not perfect. Various other organisations will no doubt express themselves as being irritated with the imperfections. I am thinking particularly about CARL (the Campaign for the Abolition of Residential Leaseholds), which is an organisation that represents a substantial number of leaseholders and which actively participated in these consultations. It is not for me to speak for that organisation, but it takes the view that the Bill does not go far enough. Even if the Bill does not go far enough, is not perfect and omits a number of matters previously proposed by government and others, it provides a firm basis for discussion during the Committee and further stages of our deliberations. Perhaps I may turn now to commonhold. The introduction of commonhold is greatly to be welcomed. For some reason, England and Wales remain the only countries where ownership of flats is confined to a leasehold interest. When they are fully integrated into the property market, these proposals will place the United Kingdom on a similar basis of common ownership, ownership of the building by the residents, as is presently operating in the rest of the world. It would, perhaps, have been simpler for the Government to have reproduced, in its entirety, an existing and tested legislation; for example, the strata title legislation of New South Wales, or the American community-title law. However, we must accept that the present proposals have been devised specifically for the UK property market. We might also have wished that the Government had chosen to create an entirely new animal in the commonhold association, but I can fully appreciate the prudence of the chosen route of basing the proposals firmly upon existing company and property legislation and procedures. The Bill, quite rightly, seeks to prevent the creation of new leases out of commonhold. But the present proposals restricting the terms of letting may perhaps be over-restrictive for a free market. However, we can look further at these in Committee. Similarly, the arrangements for conversion from an existing leaseholder-owned freehold to a commonhold, which require the consent of 100 per cent of the flat owners, have been criticised by many individuals and organisations and may also merit further examination during the further stages of the Bill. The proposals for commonhold are, of course, primarily enabling and will be dependent upon a considerable raft of regulations and guidance. It is important for us to be given some fairly clear indications during the passage of the Bill of the sort of regulations that the Government propose. However, those are minor matters and should not detract from my really quite warm welcome for the introduction of commonhold into United Kingdom legislation. I turn for a few moments to the right to manage. At present, it must be accepted that the leasehold tenant feels powerless: he owns most of the equity in the building, but has little or no say in how it is run or repaired. The Bill has acknowledged that very basic problem in setting out to provide a statutory right to manage—a right simply to take over the everyday management of the building, without having to prove any deficiency on the part of the landlord and, equally importantly, without having to part with any money for the freehold. It is this question of actual administrative power that the right to manage provides. The procedures are not simple and can be criticised as intimidating for the average leaseholder. At a later stage, I shall certainly wish to raise the issue of qualification for the right being confined to a single building and not available to whole estates or houses. But this is a bold initiative and, once entered into, it will place the powers of management of the building into the leaseholders' hands without cost to them. In this context, following the noble Lord, Lord Goodhart, one might also query the need for the presence of the landlord on the leaseholders' right to manage company. I cannot imagine anything that is more liable to create a certain amount of dissension as regards the way in which the leaseholders would wish to try to manage their particular block of flats. While listening to the examination of this point by the noble Lord, Lord Goodhart, it occurred to me that, although it is now thought necessary for the landlord to play a part in the tenants' managing company, it has never really been thought quite so necessary to have a legal basis for tenants' representation in the landlord's managing company. I believe that this provision needs to be reconsidered. The other major concern that I have about the proposals for the right to manage is the difficulty that I see in leaseholders attempting to manage in the face of defective leases with no simple route to their remedy. Many leases require the payment of service charges in advance, but others do not. It is not difficult to envisage the problems that are likely to be faced by the right-to-manage company in the situation of leases reserving payment in arrears. How will the company be able to fund major works without advance funding? That situation was addressed in the consultation paper in proposals for additional grounds for seeking from the court the variation of leases, effectively widening the very limited powers presently contained in the Landlord and Tenant Act 1987. These provisions are immensely important to effective management by the right-to-manage company, or a responsible landlord. I hope that the Government will be able to consider adding those clauses to the Bill. I should like to say a few words on service charges. The Bill also recognises the need better to control the recharging of service and works costs to leaseholders in the widening of the 15-year-old definition of service charges, which will now include the costs of improvements and administrative charges. As a result, such charges must now be subject to the requirement for them to be reasonable and to be open to challenge by leaseholders at leasehold valuation tribunals. The proposed ability to dispute administration and legal costs, together with the proposal that ground rent shall not be recoverable unless demanded in a prescribed format, should effectively put a stop to the abuses suffered by leaseholders of houses in the North East and the Midlands, for example, facing spurious actions for forfeiture on the basis of a few days' delay in paying a £5 ground rent. Again, this is evidence that the Government have listened to complaints and are trying to devise specific remedies. One of the areas of concern for leaseholders is in relation to simply knowing where their money is; that is, moneys they have paid in advance and service charges, which should he held in trust for them by the landlords. The consultation paper contained proposed requirements for specific accounting procedures by landlords demanding separate, identifiable bank accounts for each property in management. While some landlords claim that those requirements are onerous, this is in fact the current practice of many of the better managing agents. It is a pity that the proposals have been omitted from the Bill. Such arrangements would achieve much in maintaining proper control and accessibility of landlords' handling of their leaseholders' funds and have the backing of ARMA, the professional body that represents managing agents. Again, this is an issue to which we can return at a later stage of the Bill. In regard to enfranchisement, the Bill also, rightly, seeks to widen the availability of the statutory right for leaseholders of flats to buy their freeholds and to simplify drastically the Byzantine procedures of the 1993 Act. These measures have my full support. The removal of the residence test and the raising of the nonresidential threshold will bring a great many more buildings into eligibility. The lowering of the required proportion of participating leaseholders from two-thirds to a half will make enfranchisement easier, and that, combined with the proposed 80-year statutory limit on marriage value, will have the effect of making the purchase cheaper. Leaseholders of houses who have already extended their leases under the rules of the 1967 Act will welcome the new right both of freehold purchase and security of tenure. However, I would have preferred the eligibility tests and procedures for houses to be brought into line with those for flats. There seems little logic, for example, in the three separate residence criteria: no residence required for collective enfranchisement; no residence but two years' prior ownership for lease extension for flats, but three years' residence required for houses. It would be a pity to leave this anomaly in place in a Bill that is dedicated to simplifying and easing red tape in the leasehold sector. These matters point to areas where there can be further refinement. No Bill is ever perfect at this stage of its passage, but the proposals collectively represent a sound and measured approach towards a radical reshaping of the leasehold sector and the greater empowerment of leaseholders. It comes from several years of intensive work, and a quite unprecedented level of input from the sector itself. It has been the subject of two consultation papers and the most exhaustive discussions. There is no doubt that the proposals represent consensus solutions. They should have the full support of all sides. The Government deserve our congratulations on bringing forward the proposals.
Baroness Gardner of Parkes
My Lords, I welcome this long awaited Bill. I begin by declaring an interest. as I own a leasehold property which I bought for the day when I can no longer manage the stairs. I also register an interest as an Australian commonholder with a first-hand knowledge of the New South Wales system.I believe that commonhold is a much better system than leasehold. I have always found the restrictions on leasehold extremely irritating. In New South Wales, where I come from and about which I speak, there are two different commonhold titles: company title and strata title. In each case, the unit-holders are the freeholders of the whole property, including the land, and each unit is a shareholder in the body corporate, which is called "the commonhold association" in the Bill. The difference between company title and strata title is that with a company title, in order to sell on your unit, you have to obtain the agreement of everyone else in the block of flats before you can accept the person who wants to buy your property. I was interested to read in this morning's newspaper that Bill Clinton has been facing this problem in New York. Under strata title, the property is absolutely yours, and you can do with it what you wish provided you are contributing, as are all others in the block, to the amount paid for upkeep and maintenance. For this reason, strata title is very much more popular, and company title is dying out. The number of people wishing to buy company title is very limited. If you do buy company title and then wish to let the property, the other residents in the block may say that they do not want a sub-tenant. I strongly oppose the proposed restriction on lettings. It is extraordinary that there should be discussion about the danger of creating a new leasehold system when the failure of the Bill to state that all new constructions should now be commonhold is tantamount to continuing the leasehold system. The Government should be aiming for a position whereby all new constructions of residential unit accommodation are commonhold from now on. I realise that big property interests will be opposed to that proposal. They wish to hold on to the land and to have the right to harvest further profit from it. That is the real strength behind leasehold, if you happen to be the owner. There is no strength behind leasehold if you are the owner of a unit or a flat in a leasehold property. It is absolutely plain that owners want a completely unrestricted strata title. If someone is going abroad, why should they not be allowed to let their property long term? The restriction that one can only let for seven years is complicated and nonsensical. I asked for a legal person's view as to what that meant, and that person said, "It looks as though you could then let it again for a further seven years to the same person". There does not seem to be any merit in that restriction. As I said, I am the owner of a leasehold property, but, had it been available, I would definitely have bought commonhold—although my legs are lasting better than I expected, and I still hope to hang out a few more years before I need to move into a one-level flat. I might well have been caught in the seven-year plan. Everyone supports the principle of a body corporate, or the commonhold association, but very few are willing to come forward and do the work. They rely on volunteers from the unit-holders to form the committee that will do the work. Most of the committees in fact appoint a managing agent, but there is still work to be done in checking the work that the managing agent does. Even the meetings of the unit-holders are not well attended unless an item of significant interest to everyone is to be discussed. I recall an application from the occupiers of west-facing units for the cost of sun blinds on their balconies to be met from the general fund. As the building had four corners and four units per floor, only one was west-facing, and 75 per cent of the building faced in other directions. It was a very well attended meeting. All of those who attended made it clear that they had no objection to the 25 per cent west-facing flats having blinds—but at their own expense. Americans say that a sure way of getting attendance at such a meeting is to have as the first item on the agenda plans to concrete over the swimming pool. Commonhold also applies to commercial premises; for example, professional offices, something that is common in Australia. I am pleased to see that the wider options are included in the Bill. I do not completely understand the abolition of the residence test in regard to leasehold because I do not know whether it means that the company could have the lease for two years and qualify to buy. I have reservations about the abolition of the residence test, even though it would go against my personal interests because I would have to wait until I had occupied my flat for some time before I could extend the lease. It is a good thing to restrict the right to a longer lease to residents. I have always approved of the fact that in Australia a foreign owner does not automatically have the right to buy anything, anywhere. Anyone has the right to buy a new building, but special permission is required to be able to buy units occupied by Australians. This has helped to keep some property values down and has enabled people to continue to live in them. I want to respond to some of the points raised in today's debate. The noble and learned Lord the Lord Chancellor said that current leasehold arrangements are unsatisfactory and he discussed the many great merits of commonhold arrangements. If he genuinely believes that they have such merits—I believe that he does—why did he not argue that new constructions should have only commonhold arrangements? I cannot put together his comments on the unsatisfactory nature of leasehold arrangements with those about the aim of continuing them. His statement that the Bill will put on course reform for this century suggests that we should aim at making commonhold the norm. I am aware that professional business interests will resist that; the Government may be concerned about that. When people have the option of buying commonhold, they will not want to return to leasehold again, especially if unrestricted commonhold is available without the lease restriction, which is the biggest drawback in this context. If the Bill will put on course reform for this century, we should support commonhold much more strongly. My noble friend Lord Selsdon described the situation clearly. He said that the proposal presented no problems for new buildings, although he went on to explain how the whole system of leasehold property is a matter of money. That is exactly right. I agree with some of the comments of the noble Lord, Lord Goodhart, but not with others. For example, he was not opposed to letting restrictions. I am. He said that there should be no marriage value when a lease was extended. I agree. He also said that very few new houses involved leasehold arrangements. Is not that in itself a sign that developers know that it pays more to build freehold, because that is what people want? The moment that people see blocks for sale with commonhold arrangements they are prepared to pay more because it is their property, their home and their future. The noble Lord, Lord Richard, made some interesting comments on widening the powers under the Landlord and Tenant Acts. I want those powers to be widened in relation to leasehold blocks that do not have a reserve fund or a sinking fund—whichever phrase one cares to use. There should be a provision that allows the courts to alter leases by writing; in the right to provide for a sinking fund or reserve fund. People often find that they are faced with an enormous levy because no one has thought far enough ahead about the major repairs that will arise in a block. Leaseholders who do not promptly pay their service charges should certainly be immediately liable for interest. It is very unfair to other leaseholders if people simply do not pay up. Some people get away with making late or delayed payments year after year. The noble and learned Lord the Lord Chancellor rightly said that we do not want to make forfeiture easy, but neither do we want to allow people to get away with not meeting their obligations. The point about the sinking fund is highly important. When new commonhold blocks are built in Australia, the nature of the sinking fund is clearly set out. People make contributions to it as they go along. When major expenses come up unexpectedly, funds are available to meet them. When one sells one's unit, people will always ask, "What is the basis of the sinking fund?". If it is in good credit, that helps one to sell one's property. One cannot reclaim the money, but the state of the sinking fund is taken into account during the sale of a property. People who make contributions have not lost their money because there is an assurance that funds are available for necessary work. The greatest problem with commonhold arrangements, which I hope will be increasingly available, is about what happens when a building goes past the point of being any use. It may have been repaired time and again, but modern buildings have a limited life of perhaps 50 or 100 years—who knows? What are we doing in that context? Are we creating the slums of the future? No country has come up with an answer to the problem of gradually setting aside enough funds to rebuild. The problem with everyone owning a small piece of a property, which may be beautiful to behold, is that the day will come when it ends up a derelict slum unless someone buys out all the other owners and gradually acquires the property to rebuild it. I welcome the Bill and shall take part in its passage through the House.
Lord Hodgson of Astley Abbotts
My Lords, I do not have specific expertise in relation to the Bill but I have some relevant experience. Some years ago, I was a leaseholder in a small block of flats, and we tried to enfranchise but failed to do so.When I hear lawyers talking about Acts of Parliament and detailed sections, I become cautious because I am no lawyer. I talk from the point of view of someone who has been at the sharp end of enfranchisement. I am astonished by the amount of correspondence I have received on the Bill. Why might that be? Perhaps because the Bill contains the kernel of a very good idea. However, during the process of consideration and consultation, it has expanded like an octopus to cover increasing numbers of areas, and it has piled complexity on complexity. I inform the Minister who will wind up that it reminds me of the Political Parties, Elections and Referendums Bill, which contained the kernel of a splendid idea but which became extremely complex. I shall give a brief example. I have made clear my interest in enfranchisement. I therefore sought to chase that issue through the legislation. There was much criticism of the questionnaire and in particular of question QENF10, which sought to elaborate the amount of information to be prepared before an application for enfranchisement could take place. I chased the matter through the consultation paper and draft Bill, where it appeared in Clause 94 on page 42. However, in the Bill that is before your Lordships, it appears in Clause 119 on pages 56 and 57. Between the draft Bill and that which appears before your Lordships, the legislation has expanded dramatically. That has made numerous people, who are not experts but who are leaseholders, nervous about what has been added and about how effective the consultation process was. They are wondering whether the sledge is already half way down the mountain. My experience of being a leaseholder and of trying to enfranchise was dismal. We were, within the block of flats, the bunch of usual suspects: one elderly lady of a nervous disposition, one gentleman who lived in Hong Kong and who sub-let his flat, a barrister who lived in Dorset and who used his flat as a pied-à-terre and two girls who lived on the top floor. Their father owned the flat and the girls used it when they first came to London to work. Against those serried ranks in the blue corner was, in the red corner, an obdurate landlord who was determined to protect his nest egg, which I believe he had passed to his children. He sought to play out the process and to knock every ball into the long grass. When I read the Bill's provisions, I have my real-life experience in mind. I an anxious to hear the Minister's responses to a couple of broad issues, the first of which involves enfranchisement. As I understand it, people who do not initially agree to participate in enfranchisement can subsequently join in. There is no penalty for sitting out the first round. That is very unfair on those who seek to do the not inconsiderable work of getting an enfranchisement process in progress. In my case, my fellow tenant in Hong Kong was happy to benefit from the work that we did in enfranchising, but he was not prepared to participate in any way or to pay any costs. As a subsequent point, the information required before one begins the enfranchisement process is lengthy, as per Clause 119. However, subsection (3) refers to such other information as the Minister may require in the future, or words to that effect. I believe that many parts of the Bill provide something of a blank cheque. Several regulations require detail to be filled in. Although many of the principles are fine, as the legislation progresses through the House over the next few weeks, if the details are wrong we shall end up with a Bill which is far from the one which we thought we were approving. Secondly, I agree that right-to-manage schemes are a good idea. However, I am not clear what they offer over and above enfranchisement schemes—other than to tenants who do not wish to own—except in one important respect. Surely, right-to-manage schemes will gradually allow a shift of power and value to the landlord. Therefore, we must expect that landlords will push those schemes and discourage enfranchisement, which in my view offers better value for the tenant in the long run. I also share the view put forward by the noble Lords, Lord Goodhart and Lord Richard, with regard to landlords being members of the right-to-manage company. There will be an inherent conflict of interest and inevitable tensions will arise in the relationship. I accept that a landlord has the right to know of decisions by the RTM company. However, if he is to participate in those discussions and, above all, if he is to vote on them, I believe that that will be a recipe for deadlock. Finally, I agree with the noble and learned Lord the Lord Chancellor that commonhold is probably not controversial as a concept. However, I wonder how far it will be used. I believe that a situation will arise in which developers will find it more advantageous to retain the leasehold concept. After all, that is part of the background to the reasons for bringing forward this Bill. Although market forces may bring commonhold rights, I am not so sure about that and I do not have the confidence that perhaps the noble Lord, Lord Goodhart, has. Clearly, we are leaving behind a group of people who will continue to hold their property by means of a long leasehold. They will have to live with an outdated and discredited type of tenure and, far from helping those people, as we plan to do in the Bill, we may make their position worse. I believe that we need to look again at whether better and easier ways exist to enable people to transfer from current long leasehold tenure to commonhold arrangements. The weakness of leaseholders lies in the fact that they lack information, and I see nothing in the Bill which attempts to balance the availability of information. Leaseholders will not be aware of the ticking clock and that at 90 years enfranchisement carries no marriage value. Often leaseholders are not aware that mortgage companies make it more difficult to obtain finance on an 80-year leasehold property. I believe that we need to spend more time in endeavouring to balance expertise. Again, following on from what the noble Lord, Lord Goodhart said, page 118 of the consultation paper refers to the sensible discussion which has taken place with regard to the form of accounts which should be provided to leaseholders. However, that idea seems to have been dropped, or perhaps it is hidden in the schedule to the Bill and I have been unable to pick it up. I understand the desire and the need to deal with the problems of long leaseholders and I understand the need to strike a balance between the parties involved. However, the Bill appears to be highly complex and, indeed, as we follow it through its consultation phase, appears to increase in complexity. Moreover, judging from the correspondence which I have received, the Bill appears to be unacceptable to a large number of the people whom it purports to help. Therefore, I look forward to hearing the Minister's reply.
Lord Lea of Crondall
My Lords, I very much welcome the main thrust of this long-awaited Bill, the rationale of which has been set out comprehensively by my noble and learned friend the Lord Chancellor. At the start, I declare an interest in a London flat which has a 99-year lease with approximately 75 years to run. I shall illustrate some of the issues in the Bill by reference to my direct knowledge arising from that property, and I trust that that is in order. My experience is similar to that of the noble Lord, Lord Hodgson.Great hopes are being placed in the Bill by residents' associations such as mine—that is (this is an important point) in blocks of flats which have shops and restaurants below. I am anxious that their hopes will not prove to be unfounded. Having talked to my fellow residents and, indeed, to national representative bodies, it has become apparent to me that a serious gap has been revealed in what the Bill intends to achieve for a significant sector of leaseholders. So far, that issue has not been addressed in this afternoon's debate. Therefore, I am sorry to have to bowl some fairly fast balls at my noble friend Lord Bach, whom I warmly welcome to his first innings at the Dispatch Box. But I am sure that he will find a way to respond in a constructive manner. Those points can be pursued in Committee, but it may be of assistance to the House, as well as to Ministers, if I spell them out specifically today. My first major question arises from the fact that the Bill is drafted in such a way that the provisions refer to a whole block of flats and to any shops or other commercial premises below. That point appears in Clause 69. Perhaps my noble friend would check whether I am right about that and correct me if I am wrong. Yet, in many thousands of cases the obligation to create a body to cover both residential and commercial premises is not a viable way of dealing with the issue, not least as we run into the 25 per cent rule, which I shall address in a few moments. Of course, there will be common parts and questions relating to the drains, and so on. However, a vast area of interest concerning the residents is quite separate from that relating to the shops and, even more so, the restaurants. Why do we need to insist that Boots the Chemists in the shop below must have the same managing agent as the residents? In my own block of 22 flats with shops underneath, over the past 25 or 30 years the managing agent for the residential parts has never been the managing agent for the shops or restaurants. which, as I said, bring their own separate array of problems. I am of course aware that Ministers must balance a number of interests in dealing with legislation on this subject. However, although I believe that chartered surveyors have issued a statement arguing the opposite point of view, I understand that the Association of Residential Managing Agents and, in large degree, the British Property Federation believe that the philosophy of what I shall dub "the whole block and nothing but the block" is rather rigid. Therefore. in such cases cannot there be an umbrella concept and, under that, separation between the right of management of the residential and commercial parts, as I believe has been supported by the Leasehold Advisory Service? Of course, the Minister will refer to the new 25 per cent rule. That concerns the proportion of the floor area which is not residential and above which the key provisions of the Bill effectively will not apply. According to my discussions, two problems arise in that respect. First, although it may sound most reasonable—I assume that it will be represented as such—the 25 per cent figure is still too low if the interpretation which I now understand is being placed on it is correct. Let us take as an example a typical five-storey block—that is, four storeys above shops on the ground floor. There is often a basement which is used for a variety of purposes; for example, storage associated with a commercial premises. If the basement is counted with the commercial premises, that area then adds up to two floors out of six—in other words. one-third or 33 per cent—thus disqualifying the residents. So the initial arithmetic in the example I cited we had assumed gave a commercial share of 20 per cent—one out of five—but the interpretation of the Bill, on the contrary, could make it 33 per cent. Am I correct in that assumption? Then there is the question of why the stairs, which are purely for residents, do not by the same token count as residential. The very disappointing net result of all this—I stand to be corrected but I am referring here to Schedule 6 (1)(4), taken in conjunction with paragraph 1(2) of the schedule (page 78)—is that in my calculation up to half the leasehold flats in the country will not only be on the wrong side of the cut-off point but, given that the 25 per cent rule in effect governs the Bill as a whole, they get no easement of their problems at all, not just on enfranchisement but in relation also to many other aspects of management. If that is so, these tens of thousands of residents—or it may even be more—will on these key aspects be in the same position as they are now, with no progress towards what they thought was coming their way after all these years. I assume that improvements in the eligibility rules, for example, will be subsumed in the 25 per cent test. This Bill contains a number of very important reforms, and hundreds of thousands of people will benefit. I congratulate the Government on the carefully worked out arrangements for those affected, but do Ministers agree with my arithmetic covering the large part of the field which is not affected? In the case I have described, the options appear to be as follows. First, we could further increase the percentage hurdle on commercial premises which preclude RTM and RTE. Secondly, we could revisit the schedule as regards the definition of "common parts" so that the stairs and the basement are counted in a similar way. Thirdly, we could allow residents to manage the residential parts of the property separately, albeit under an umbrella arrangement. I turn now to my other main point concerning managing agents. Given the circumstances I have described, I attach great importance to the improvement of the lot of leaseholders who, in effect, will continue with the present system but who need much more protection, whether they have decided not to go down the route of enfranchisement or direct responsibility for management or, as I have explained, are actually ruled out of managing their residential area. Unless the Bill is amended, a considerable number of people will be in this category. May I therefore offer one modest amelioration for those many blocks which will otherwise receive very limited benefit from this legislation as drafted? My proposal concerns the rights and the credibility of the residents' association and its management company. The present law on consultation on the appointment of the managing agent seems to me to mean virtually nothing. We must provide for the proper recognition, with the agreement of the residents' association, of some basic issues, beginning with the appointment of the managing agent, who is of course the point of contact with the residents. What in practical terms do I mean by that? I mean that the Act should provide for the appointment or dismissal of the managing agent in agreement with the residents' association, no doubt applying the 50 per cent membership rule as in other sections of the Bill. This would in effect amend the 1987 Landlord and Tenant Act. This is a key aspect in building the confidence of leaseholders. That confidence is necessary, given the complexities of accountancy and other aspects of the present system. This reform would also help the underlying weakness of many such bodies. It is an issue which this debate neglects at our peril. I was pleased to hear my noble friend Lord Richard refer to this. The noble Lord, Lord Hodgson, also spelt out certain practical difficulties. Most such bodies are actually run on a wing and a prayer. They need independent advice, legal as well as practical, from the managing agent just as much as the freeholder—who is normally, by definition, a much bigger organisation—with all the resources that this implies. I am not talking about occasional advice from advisory bodies, excellent though they are, but about an ongoing relationship based on trust. Perhaps we should accept the concept of the freeholder being entitled to attend statutory meetings. I have been thinking about what has been said on this. Perhaps we could invent a new concept, such as separating an agenda into Part A and Part B. I am not coming from a position of being a general critic of leaseholding. It is totally unrealistic to talk of abolishing it overnight without damaging somebody's equity. In any event, the underlying reality in blocks of flats is that at the end of the day the relationship between an individual flat and the concept of collective legal responsibility is always there. The commonhold concept will prove its worth over the medium term. Moreover, I am very impressed by the complex, yet essential, tests over the two key instruments of reformed leasehold: the right-to-manage company (RTM) and the right-to-enfranchise company (RTE). I therefore hope that the Government will agree to look at the small print on this question for the Committee stage. I shall give a note to the Minister summarising where specific amendments would probably meet these points, perhaps as a halfway house. I ask my noble friend not to close the door prematurely on the points I have raised. They could help to prevent many people being disappointed, and the vast majority of those affected will recognise the tremendous job the Government have done in getting as far as this. I very much look forward to commending the final result.
My Lords, I must first apologise for not being in my place at the beginning of the proceedings this afternoon. I regret to say that normal service on our railways has yet to be resumed. Perhaps I may also declare an interest in that I am a vice-president of the National Housing Federation, and later I shall raise some of that association's concerns.This is, as others have said, a long-awaited piece of legislation which has received mixed reviews but which is regarded as quite good on the whole. To some extent of course it depends on where you are coming from, and we have heard that already this afternoon. If you are a resident you have a different view from those involved in the property industry in its wider sense and also perhaps from those in the legal profession—those who now have to deal with the complexity of the law surrounding leasehold tenure. Many who live in leasehold properties are disappointed that the legislation does not totally replace leasehold with commonhold, as we have heard already this afternoon. In his opening comments the noble and learned Lord the Lord Chancellor said that people were expecting rather too much. I suspect that that is probably due to some of the extravagant language used in respect of leasehold, not only during the passage of the last Housing Bill in 1996, in which I took part, but also in the Labour Party election manifesto. More recently, the Minister of State concerned with the environment, Hilary Armstrong, stated in 1998 in the foreword to the Green Paper that the leasehold system was fundamentally flawed and not fit for the twentieth century, let alone the twenty-first. In addition, those who live in leasehold properties are concerned that the proposals coming forward will be subjected to the very commplicated and onerous burdens of company law, which they believe was designed for something rather different. Procedures are cumbersome, and penalties are rather heavy if you do not stick to the letter of the law. There is also the view held by those living in leasehold properties that the Government have not really taken the opportunity to implement radical, root-and-branch reform and are merely adding to the already bureaucratic system of laws and regulation. We have heard today that there will be much more regulation with the Bill. That view is shared by the Law Society, which believes that further legislation which does not consolidate that which has gone before will merely add to the complex and confusing nature of the issue. That will be a great disadvantage to consumers, which is one of my main interests in the matter. Those in property in its wider sense have different viewpoints from those who perhaps live in leasehold properties. On the whole, they welcome the thrust of the Bill. However, they have concerns, which I share, and which have been alluded to today. The Government are keen that new build will take on commonh old tenure. However, it would appear that volume housebuilders have not given much thought to that form of tenure. At a British Property Federation seminar in October last year, Dr Stuart Hill, who was at that time Chief Executive of the Housebuilders' Federation, described commonhold as the dark secret of the housebuilding industry, commenting that few knew about it and those that did were not saying anything about it. That carries over to institutional investors. There is anecdotal evidence that they are reluctant to consider investing in commonhold developments. That may be because that is not a tried and tested system. I look forward to hearing from the Minister when he winds up how the Government propose to address those important issues. I turn to leasehold property. Both the British Property Federation and the Campaign for the Abolition of Residential Leaseholds (CARL) are concerned about the quality of management. Having been involved in all areas of housing for a number of years, I, too, am concerned about that issue, which has been mentioned by a number of noble Lords. There appears to be no requirement that whoever takes over the management should be competent to do so, nor any requirement for any form of quality control. As the Bill progresses I hope that at the very least it will contain explicit reference to the fact that those who will exercise the right to manage will have to show that they acknowledge formally the types of responsibilities, obligations and standards one would expect in that role. It has been argued that there has never been a requirement on a landlord to demonstrate competence to manage. However, I believe that there is a desire in all forms of tenure these days to improve the quality of management and to have a decent standard to protect tenants in whatever tenure. I hope that during the passage of the Bill the Government will take that on board. Reference has been made today to the fact that in management not all landlords are of the very best. It is quite easy for incompetent and corrupt landlords to become managing agents of companies and to defraud leaseholders. I turn to another issue, on which my noble friend Lord Goodhart dwelt at some length; that is, leasehold valuation tribunals. I was responsible for leading on the last Housing Bill in another place for my own party, the Liberal Democrats. I know how strongly people felt at the time about the issue. I was able to persuade the Government of the day of its importance and to amend the Bill. Despite that, recent research by Sheffield Hallam University for the Department of the Environment, Transport and the Regions shows that cases take between 10 and 12 months to resolve. Many people who took part in the survey and who were interviewed felt that tribunals were a much better forum than the county court for insurance and service charge disputes, a point raised earlier by my noble friend. I strongly support him in his view about the importance of legal aid. We hope that the Government will consider that important point, which has been raised by other agencies. Finally, I turn to the position of registered social landlords, which has not yet been raised today. The National Housing Federation, which speaks for registered social landlords, has one or two concerns which I hope to be able to raise during the passage of the Bill. Perhaps I may touch briefly on one or two. The federation is particularly concerned about membership of right to manage companies in Clauses 71 and 72. As the Bill is now drafted, assured tenants are not permitted to be members of right to manage companies. It is suggested that landlords should be enabled to vote on behalf of assured tenants. Otherwise, assured tenants will effectively be disenfranchised and their needs within a block will neither be recognised nor given sufficient weight when decisions about the future management and the maintenance of the block are made. I hope that the Government will consider simplifying the voting arrangements for right to manage companies in the legislation. I shall bring forward suggestions at a later date. I turn to enfranchisement of houses, the low rent test, which appears in Clause 135. Perhaps I may give a little background. The Leasehold Reform Act 1967 empowered leaseholders to acquire their freeholds, which was called enfranchisement, provided they fulfilled a number of qualifications, one of which was the low rent test under which the annual rent, excluding the service charge, should not exceed two-thirds of the rateable value. The low rent rest was devised because it was necessary to find a way to distinguish the type of tenancy, normally known as the lease—which typically had a low ground rent—from other types of tenancy which had a substantial weekly or monthly rent. Although leases granted by housing associations were excluded from that legislation, it became clear that many had slipped through the net. I refer, for example, to those which were originally granted by another body, such as a local authority. The Housing Act 1996 sought to rectify the situation but failed to do so totally effectively. As a result, a particular group of people, those in shared ownership of houses, may currently acquire their freeholds by enfranchisement. However, that effectively means that registered social landlords can be legally obliged to sell publicly-funded housing for potentially very small sums in a way which we believe was never contemplated by Parliament. I hope that the Government will consider amending the clause or perhaps inserting a new clause to ensure that shared ownership houses can only be acquired by shared owners through the process of "staircasing"; that is, gradually increasing one's interest in a property to 100 per cent as one's situation improves. Like other noble Lords who have spoken, I look forward to the progress of the Bill. I hope that we will be able to amend it in the ways mentioned today. Having said that, I know how difficult it must have been to tackle the issue. I am pleased that the Government have consulted as widely as they have. I hope that that consultation will continue through the passage of the Bill so that some of the matters which concern all noble Lords here today can be resolved.
My Lords, before turning to the provisions of the Bill, perhaps your Lordships will indulge me in what I was about to describe as a small "trot" but perhaps I should say "canter" down memory lane to put the Bill into context.It is some 20 years since I was chairman of the housing committee in the Royal Borough of Kensington and Chelsea, a council of which I am still a member. At that time I endeavoured to find a legal process whereby the council could compulsorily purchase the freehold of a block of flats to sell on to the lessees. It was at the time when many owners of blocks of flats—usually the respected insurance companies which had benevolently held and managed the freehold of these premises for years—saw the opportunity of a rising market to divest themselves of these investments. As I am sure your Lordships will recall, the property market in the late 1970s was buoyant and increasingly valuable. The freeholds were often bought by companies of overseas investors who, in many cases, as soon as they had made the purchase became invisible to the residents as well as to the authorities in this country. Often the holding companies were registered abroad and no managing agents were appointed. Repairs went undone or were carried out at exorbitant costs; service charges rose dramatically and were unchallenged; and access to familiar and helpful management vanished. In many places, a kind of property anarchy ensued. I recall that two of Kensington's previous MPs, Sir Brandon Rhys Williams and Dudley Fishburn, who will be known to many of your Lordships, were energetic in their promotion of and support for legislation to resolve the problem relating to those who were not the owners of the land on which their homes stood. Like me, they recognised that within this context there were freeholders and landlords who strove to maintain their property and that the legislative efforts to resolve the problems described above threatened their investments and land as well as that of others less motivated. That is the history of the matter. Now we have a further attempt to redress some of the inherent problems associated with the dichotomy between freehold and leasehold and/or those who rent their homes. The introduction of commonhold was predicated in the 1996 draft Bill of the previous government. The provisions in this Government's version—which followed a manifesto commitment—nearly five years later have been given only a very half-hearted cheer from those who have been urging change on successive governments: those who represent long leaseholders, in particular the Leasehold Enfranchisement Association and the Campaign for the Abolition of Residential Leaseholds, both of whose briefings I have read and considered. As constructed, it is fair to say that the Government's proposals are unlikely to result in many successful commonhold associations being formed from among those who currently hold long leaseholds. However, as has already been said, there may be more success where new developments are introduced with commonhold from the outset. The main stumbling block to success lies in the requirement for there to be a 100 per cent sign-up by leaseholders to convert to commonhold. The possibility of any putative association being able to identify the owners of the entirety of the premises involved, particularly in a large block of flats, is improbable. Many such flats are owned by those who work abroad and let the premises to others on a short-term basis. Some are owned by the freeholders of the block. Some are registered to investment companies with no identified responsible person. Therefore, any group trying to form a commonhold association would struggle to identify the salient parties and in all probability would be frustrated in their efforts to do so. Under those provisions, just one objection would render the whole process inoperable. Should any association be formed, it would be unlikely to be able to operate as, under Clause 35(3), the same requirement for 100 per cent agreement presents itself. The question here of course is: 100 per cent of what? Is it 100 per cent of owners or 100 per cent of those voting? That situation must be clarified. If the Government are serious in their intention to introduce commonhold, they must reduce the qualifying percentage to a lower figure, otherwise the concept will be just that; an idea only. Concern is also being expressed about the requirement for all commonhold associations to be run under the complicated regime of a company limited by guarantee rather than under specially constructed provisions such as the American or Australian models, which my noble friend Lady Gardner clearly outlined today. I turn briefly to other aspects of the Bill. The first is the whole question of further enfranchisement of leasehold properties with diminishing leases. There are concerns that, once again, the Government's proposals will be unworkable, particularly because in many parts of the country the estimates of the marriage value of the combined leasehold and freehold values will be so high as to render the passing of the property to the existing leaseholders, other than in the most exceptional circumstances, unobtainable. Leaseholders whom I know in such situations feel very let down by the current proposals and it may be necessary to consider how to make those arrangements somewhat less loaded against those who want to enfranchise. I hope that the Government will do that. The system is now well established in most areas of the leasehold structure. However, it is still unobtainable to those who did not qualify under previous enfranchisement legislation and who have been looking to this Bill to provide an answer for them. Finally, I turn to the right to manage. Here again, we have the necessity for those who want to avail themselves of this opportunity being able to do so only by the cumbersome requirement to form a company limited by guarantee. The added requirement that the owner or landlord of the property should be a member of that company seems to defeat the objective of enabling the tenants to manage their premises in a way which is satisfactory to them. The requirement is particularly strange in that the most likely reason for tenants and leaseholders going to the trouble to take over the management is dissatisfaction with the current arrangements, which are almost inevitably provided by or on behalf of the owner. There should be much more flexibility in this provision so that the freeholder or owner may be a member of the company, but does not have to be. In addition, there needs to be much greater clarity on the variation of leases to prevent bad leases being handed to the new company and on the detailed management of information which is handed over from the landlords to the new management company before it formally takes over. Curiously, as I understand it tenants of both local authorities and housing associations are excluded from the provisions of right to manage. In these days, when there is considerable interest by tenants in managing their own estates and experience in doing so, it seems strange to prevent those whose local authority may be less enlightened than others having the opportunity to do so. This Bill has been a long time coming. It would be good if by the time it leaves this House some of the concerns that I and others have raised have been dealt with satisfactorily. I hope to play a part in persuading the Government of the merits of considering changes along the lines I have outlined so that in the end we have a thoroughly good and satisfactory Bill.
Lord Williams of Elvel
My Lords, first, I want to declare an interest. Together with my wife. I am the holder of two long leases in London and have been since 1970. I point out to noble Lords—I do not declare an interest—that I was involved in the debates that took place before the 1993 Act during which time many of the problems which have emerged this afternoon were also discussed.As the noble Baroness, Lady Hanham, pointed out, as a concept commonhold has been around for some time. I am glad that this Bill was a manifesto commitment by my party and that my noble and learned friend the Lord Chancellor has seen fit to introduce it this afternoon. Therefore, in general I support it and very much hope that it will become law. However, when these matters were considered at the time of the previous government, the whole question of human rights was not really taken on board. It is right to acknowledge at the outset that human rights play a large part in this legislation. This Bill is only one step in the abolition of leasehold. I agree with those who say that leasehold as a form of tenure is out of date. However, one cannot simply abolish it outright. As I argued from the Benches on which the noble Lord, Lord Kingsland, now sits, leasehold is a contract between two parties. Either one buys out the contract in one form or another or one lives with it. When I sat on the Benches opposite I was prepared to accept that imperative because leasehold cannot simply be abolished. Having said that, the Government have taken a number of measures to move towards the phasing out of leasehold. When I sat on the Bench now occupied by the noble Lord, Lord Kingsland, I emphasised that this was not simply a London problem; it goes much wider. Many people who live outside Belgravia have difficulty with leaseholds, so this is not a problem confined to London. I turn to commonhold. Apart from new build, there is a question as to who can apply for commonhold. Under the Bill, the freeholder can apply. The reason I intervened during the speech of the noble Lord, Lord Selsdon, for which I apologise, is that the freehold must be owned before an application can be made for commonhold; if not, one must buy the freehold. Unless my noble friend Lord Bach advises me to the contrary, I believe that enfranchisement is a prerequisite for an application for commonhold. Leaseholders who do not have ownership interest in the freehold cannot apply for commonhold. That may be of little consequence. Noble Lords are right to say that the 100 per cent qualification for commonhold is perhaps too much. I do not see how anyone can get 100 per cent of leasehold tenants to agree to something. In my 30 years' experience it is very difficult to get leaseholders to agree to anything at all. I suggest to the Government that under the regulations the courts should be allowed to dispense with the requirement for total consent and accept qualified unanimity; in other words, where people are absent or cannot otherwise vote, the courts may grant a dispensation. This is really an enabling piece of legislation which is not yet in final form. I understand why the Government do not want to present this legislation in its final form. The noble Baroness, Lady Gardner of Parkes, will agree that when one begins on a process of this kind one must amend it from time to time. One does not want to have to return to this House and the other place for primary legislation to ensure that it is right. I have no objection to proposals to make regulations, but when my noble friend responds I should like him to provide some kind of timetable as to when those measures will be placed before your Lordships' House in the form of a negative resolution or whatever. Therefore, commonhold is welcome but it is only a first shot. The right to manage without having to prove incompetence on the part of the landlord or agent is very important. During the passage of the 1993 Act, I argued that case from the Benches opposite. I welcome that proposal. However, noble Lords have raised one or two problems. On what basis can an RTM company assume the management of a property unless it has full information before it begins? It will cost a great deal of money because lawyers, surveyors and all kinds of people will be involved. There must be full information before an RTM company begins the process of requesting the right to manage. I hope that my noble friend Lord Bach will take a close interest in my next point because I may explore it in Committee. I argue strongly for the regulation of managing agents. There are too many cowboys around. If there is to be a right to manage the Government should provide some means to regulate those who act as agents for RTM companies to ensure that they are professionally qualified and are able to look after the properties. I hope that my noble friend will respond to that point when he winds up. One turns to the variation of leases. Nobody knows the number of defective leases which do not allow proper management; for example, pre-payments on budgets. Therefore, an RTM company which takes over the management of premises will be required to fund the budget and then claim what it believes is appropriate. As I understand it, that provision was in the first draft of the Bill, and I believe that it is appropriate to insert it in this Bill. As to enfranchisement, I believe it is right that the balance should be 50 per cent and not a higher figure. As to the residency test, I have some sympathy with the point made by the noble Lord, Lord Goodhart. I would have thought that some adjustment might be made. It is no good saying that anyone can buy a lease and suddenly enfranchise without any residence test. I would not be worried if the period was, say, three months. However, I am advised that investors might buy leases and then enfranchise on the basis of 50 per cent, possibly against other investors. I should like my noble friend to respond to that particular point. In our discussions regarding the 1993 Act, marriage values gave us enormous problems. They do still. I welcome the provision that there should be a reduction to zero on an 80-year lease. On the other hand, someone who has a lease which has run for 79 years is caught up in the process. I hope that my noble friend can give us some indication that there may be a tapering-off arrangement between 80 years down to whenever, or some sort of formula which was suggested by others outside. Having said all that, I welcome the Bill. It is a constructive attempt to meet the Labour Party's manifesto commitment and to introduce a new and, I hope, successful form of community management in commonhold. My noble friend knows that there are matters that I should like to discuss in Committee. That does not derogate from my enthusiasm for the Bill.
The Earl of Courtown
My Lords, I should first like to thank the noble and learned Lord the Lord Chancellor for his explanation of this detailed and complex Bill. Perhaps with deference to the noble Lord, Lord Williams of Elvel, I should declare a past interest in having practised as a chartered surveyor and being involved in the management of different types of property.I shall try not to go over ground so eloquently discussed by other noble Lords. In general, like most noble Lords, I support the Bill. But there are a number of areas we need to look at. For example, the practical measures against rogue landlords who make excessive service charges and engage in poor management practice must be welcomed. In theory, the mechanism concerning untraceable landlords appears useful, but, in practice, how will it actually work? It appears somewhat cumbersome. Concern is raised over converting existing long leases into commonhold. In larger blocks it will be very difficult to get 100 per cent agreement. I hope that the Minister can give some explanation of the Government's thinking. Another area of worry is that of nuisance neighbours who do not fulfil their obligations. This is a fast-growing area. As my noble friend Lord Selsdon said, the Bill could discourage investors and developers. The noble and learned Lord the Lord Chancellor did not convince me that that is not the case. I look forward to hearing the closing remarks of the noble Lord, Lord Bach. The noble Lords, Lord Richard and Lord Williams of Elvel, and my noble friend Lady Hanham raised the point of terms of leases in relation to particular service charges that are paid in arrears. That area must be further examined in Committee. The noble Lord, Lord Lea of Crondall, mentioned the confusion that may occur over mixed residential and commercial properties. The issue needs to be clarified, particularly in relation to the 25 per cent rule. The noble Baroness, Lady Maddock, and the noble Lord, Lord Williams of Elvel, both mentioned factors relating to the regulation of management agents. Many managing agents are members of the Royal Institution of Chartered Surveyors and are regulated by that organisation, but that is not to say that there are no rogue managing agents around. This has been a very useful debate. I look forward to hearing what the Minister says in his closing remarks.
My Lords, had I the misfortune to have trained as a Chancery barrister, I could relish the refinements of the Bill. However, as a mere common lawyer I have the advantage of addressing it from the viewpoint of practical experience because, like many of your Lordships. I was both tenant, now landlord, of a small investment flat, and also freeholder. But I am particularly experienced in this form of commonhold ownership, or at least the similarity which Spanish property ownership has to it, as I am married to a Spaniard.I welcome the Bill because it honours a manifesto commitment of the Labour Party at the last election. It is a significant commitment because the Bill creates a new form of freehold tenure and accompanies it with a new form of corporate body to make such property-holding effective. That is an historic departure from the century-old freehold and leasehold land law in this country. So, commendable though this change is, the question arises: what are the practical considerations which will lead to this new form of freehold tenure becoming accepted and, one hopes, eventually replacing leasehold ownership? First, it has to become accepted as part of our property-owning culture. That is a considerable task. As the noble Baroness, Lady Maddock, pointed out, unless developers, bankers and investors treat this as a vehicle for creating residential and business units, it will not work. The Government, therefore, bear the responsibility—an adventurous and pleasant one in my opinion—of proclaiming the virtue of this new form, not just of ownership but of profitable property development. As my noble and learned friend the Lord Chancellor said, it could embrace property schemes as varied as simple industrial units or residential flats. According to one author, it is a perfect vehicle for residential retirement homes. The prospects are varied and exciting. It is perhaps even more important to establish among our would-be property owning citizens the belief that commonhold is a worthwhile method of owning property. There are three reasons: first, it allows freehold ownership from the start; secondly, there is no wasting of the asset; and, thirdly, if it becomes accepted culturally, developers will make it a new way of cheaper, one hopes, housing in the private residential market. I turn from dealing with commonhold in particular to the question which I consider to be central to the effectiveness of this reform—the management of the commonhold development, whether it be residential, commercial or a mixture of both. The management is critically important for three reasons: first, it has to be efficient; secondly, it has to involve reliable accounts; and, thirdly, it has to be effective. How is it to be efficient? As the noble Baroness, Lady Gardner of Parkes, pointed out, the success of a community association depends upon the enthusiasm and energy of those living in the particular unit. As the College of Estate Management pointed out years ago about commonhold:
Human nature being what it is, it is inevitable that in commonhold developments a small number of people will run the development. That requires of the legislation that the framework for a community association should be straightforward and easy to manage and not a deterrent to the interests of the unit-holders. The second matter is that of reliable accounts. Two aspects are important. First, we do not want to create for community associations the commitments which a small private company would have in submitting annual accounts. Accounts, yes, information, yes, but in a straightforward, stereotyped format that can be shuttled from year to year by the community association merely changing that which is different from the year before. Simplicity is the watchword. I have a second concern about financial management. It echoes the concern of my noble friend Lord Williams of Elvel. The risk that community associations will put their management into the hands of agents is obvious. If the system is to retain credibility, those managing agents must be efficient, honest and reliable. Regulation is surely something seriously to be considered. My final point about management is that it should be effective. Clause 34 of the Bill has the rubric "Duty to manage". I draw attention to two features in subsection (3). Subsection(3)(a) deals with particular failures on the part of the unit-holder. It says that the directors of a commonhold association,"Successful management depends on the enthusiasm and ability of the individuals concerned".
The felicity with which paragraph (a) is expressed is disarming. It is almost a statement of political principle that where politicians think inaction will create a harmonious feeling among the electorate, they need not act. I do not intend to jest. This is serious. In every unit of human co-operation there is a dissentient. If one had 10 unit-holders one would be lucky to survive with only one or two at the least. We shall need to examine witrh great care in Committee how this beautifully phrased subsection will work. Otherwise the dissentient will treat it as a free ride at the expense of the others who will pay. The second consideration arising under the duty to manage is that the directors,"need not take action if they reasonably think that inaction is in the best interests of establishing or maintaining harmonious relationships between all the unit-holders".
I agree. Away with lawyers! They should not be involved in the management of community associations unless it is a position of last resort. Yes, perhaps, to their being involved in the creation or termination of community associations; but certainly not in ordinary management. I commend the objective in the subsection that means of settling disputes other than litigation should be sought. I emphasise management because following Committee stage and all the refinements made to the Bill, the measure will work only if people think they can manage such associations in a way that will enable them to enjoy their property ownership without stress and inconvenience. I welcome the Bill because it honours a manifesto commitment. I trust that in years to come, when, in my belief, commonhold will be an accepted and major form of freehold ownership, the millions who benefit from it will remember that it was the product of that manifesto."shall have regard to the desirability of using arbitration, mediation or conciliation procedures instead of legal proceedings wherever possible".
Lord Mackay of Clashfern
My Lords, perhaps I may take advantage of the gap to say that I entertained for some years the ambition to introduce a Bill of this kind. I should like to congratulate my noble and learned successor on the fact that he has been able to do so. I hope that the result is as perfect as he hopes after your Lordships' House has had the opportunity to improve it or at least to amend it in the later stages.One other observation has occurred to me while listening to the debate. References have been made to the United Kingdom and to the insertion of commonhold into the law of the United Kingdom. It is true that it is being inserted into the law of a part of the United Kingdom; but as far as Scotland is concerned, there is no need for this particular innovation. We have had a system of ownership of flats for some generations.
My Lords, many of us in this part of the United Kingdom have long been envious of the systems in Scotland applying to property.I should declare an interest as a leaseholder. My experience of holding a lease has been happy, but I am aware of the fragile relationships that can exist between leaseholders and landlords, a relationship that can so easily go sour. In view of the comments of the noble Lord, Lord Selsdon, who suggested that there may be more benefits in this legislation for lawyers than for leaseholders, and of the noble Lord, Lord Brennan, I should also declare that I am a partner in a solicitors' practice. I never go anywhere near a lease or a transfer. My noble friend Lord Goodhart said that "as a lawyer, not as a human being" he finds this legislation "exciting". Perhaps the noble Lord, Lord Brennan, and I are lacking in the proper level of enthusiasm. The happy thought did occur to me that I might be a little further on the way to achieving a work/life balance because, with all respect to the noble and learned Lord the Lord Chancellor, the Bill is not the most exciting thing happening to me this week. I shall talk to other noble Lords later! On these Benches we support the Bill. That is because we are instinctively on the side of the leaseholder, coming, as we do, from a belief in the freedom of the individual to control his own destiny, although we recognise the existing rights of landlords. In this context the noble Lord, Lord Williams of Elvel, may feel the same: that the balance of this debate has been very different from the balance of debates on the 1993 legislation. There is disappointment in the scope and the depth of this Bill. The noble Lord, Lord Selsdon, said that there was no opposition to it. I believe that that is manifestly not the case. Many of your Lordships will have received representations from, among others, the Leasehold Enfranchisement Association and the Campaign for the Abolition of Residential Leaseholds. As the noble Lord, Lord Hodgson, said, the Bill is not acceptable to many of those that it purports to help. The noble and learned Lord the Lord Chancellor said that expectations are not realistic. As my noble friend Lady Maddock said, this must, in part, be because expectations were raised by the Government and by the Labour Party before it became the Government. I am sad that the noble and learned Lord did not take the opportunity to explain in what respect those expectations were not realistic. We may hear from the noble Lord, Lord Bach, on that point at the end of the debate. The question has been raised as to whether there is any serious chance of the enactment of this legislation. If it is enacted, I am sorry that the opportunity has not been taken to consolidate residential leasehold legislation. The Law Society will have made representations to noble Lords, as it has to me, saying that there is a particular and urgent need to consolidate existing legislation. It refers in particular to service charges. Reference has also been made to the regulations that will flesh out the Bill. I should have preferred to see the regulations in draft form alongside the Bill itself—not only for my own benefit in terms of understanding the implications of the Bill, but because I believe that time will be needed for thorough consulation on the regulations outside the House as well as discussion on them within it. The criticisms of commonhold have largely been of the "too little, too late" variety. It is said that this is not a scheme for existing developments and that it will not be one for the future unless the developer and his financier wish it to be so. I shall be a little more demanding than my noble friend Lord Goodhart in looking at the unanamity issue. I know how difficult it is to bring forward legislation and so I prefer to tackle the question of definition now rather than leave it for a later date. Like the noble Baroness, Lady Hanham, I have difficulty in understanding what is meant in this context by "unanimity". Given that expectations of commonhold are high, it would have been helpful to have an explanation of why the legislation has been so confined. Perhaps the noble Lord, Lord Bach, will be able to help us. The British Property Federation has commented that the market needs to be convinced about commonhold and has said that there is anecdotal evidence that institutional investors are reluctant to invest in commonhold developments. The noble and learned Lord the Lord Chancellor said that he did not expect opposition to the proposals for commonhold. That seems to be the case, but we should not be too complacent about what it will achieve and how long it will take. The point has been made that company law is too complex for flat management. While I appreciate that, as a lawyer, I may have gone a little native on this issue, it is not a point with which I agree. However, I entirely agree with the noble Baroness, Lady Gardner, about the need for volunteers. Too often in blocks of flats the management becomes difficult because of the personalities of the few people who are prepared to do the work. The noble Lord, Lord Brennan, referred to the accounting provisions for companies. I believe that the accounting obligations on small companies in general should be simplified. They could perhaps be less rigorous while still retaining propriety. We shall need to look at the detail of the legislation. Reference was made during the debate to the restrictions on leasing. I should be concerned if there were tight restrictions on leasing. I say that for the perhaps philosophical reason that I should like to see the rental market reinvigorated. It should not in any way suffer from more restrictions. The noble Baroness, Lady Gardner, raised the fundamental question which cannot be ducked for ever—what will happen when a building is past its sell-by date? As has been said—in this respect I read the legislation in the same way as the noble Lord, Lord Williams—one has to start with a freehold which will then be transferred to a commonhold. I should be grateful to know whether any questions of stamp duty arise as a result of the Bill. I make that point now because of the difficulty faced by this House in making amendments with tax consequences. I turn to the right to manage and the right to enfranchise, both of which points do not lend themselves well to Second Reading comments. I suspect that they will attract a weight of amendments at future stages of the Bill. The right to manage has been said to be the second best option. Like other noble Lords, I am concerned about exclusions. I refer in particular, as did the noble Lord, Lord Richard, and my noble friend Lord Goodhart, to the landlord's involvement. I agree with a great deal of what was said by the noble Lord, Lord Lea. I was struck by the many comments made on the difficulties which stem from bad management by management agents, whose role is central. I suspect that, unlike the noble Earl, Lord Courtown, not many of them are members of the RICS. The Bill will not solve that problem. The Government must have received responses to their consultation calling for regulation of such matters as transparency in accounting, audit requirements, and so on. Did the Government consider and discard the inclusion of provisions in the Bill to regulate the activities of management agents? Was that seriously considered? If it was too difficult to include in the Bill, may we expect it to be dealt with in the future? On the right to enfranchise, how serious are the Government about phasing out leasehold, given that the qualifications for enfranchisement still present a significant hurdle. Questions have been asked about the value of enfranchisement and whether it is right for the leaseholder to pay anything. Although I take seriously the point that a 50:50 split is ECHR-proof, in London it is not evident for more than very short leases that the leaseholder is not paying the same as he would for a freehold property of a similar size. That is a matter of principle, although we shall no doubt see amendments on the point. We on these Benches will also raise through amendments the issue to which my noble friend Lady Maddock referred and which may at first sight seem inconsistent with the stance I outlined at the beginning of my speech. I refer to enfranchisement where the housing in question is publicly funded, where there is shared ownership and where the intention has been to increase the ownership by what is known as "staircasing". The need for support for the leasehold valuation tribunals in various ways, including financial, has also been referred to. It is not perhaps a matter we can advance through amendment, but it is certainly a serious point. Many of the points that were raised by noble Lords are technical and are more suitable for later stages of the Bill. I am conscious, too, that important business is to follow this debate. We wish the Bill a fair wind. We wish it a safe arrival in harbour, in a good state, before the tempests of the general election are upon us.
My Lords, I begin by declaring an interest. I am a tenant of the Honourable Society of the Middle Temple—on a very short lease! Like the noble Lord, Lord Brennan, I am not a chancery lawyer; but, unlike him, I am obliged to give as convincing an impression as I can that I am one.As with so many other imaginative initiatives for law reform since the war, the noble and learned Lord, Lord Wilberforce, did much of the initial creative thinking in the United Kingdom, although he would be the first to admit that an idea something like commonhold had been around in the United States for many decades. Furthermore, in Australia, stratum estates or strata title started in 1960 in Victoria and soon became widespread. In effect, the Bill aims to introduce the idea of stratum estates into English law. As my noble and learned friend Lord Mackay of Clashfern has pointed out, my own party sought to do so in the early and mid 1990s. It was to his great disappointment that ultimately he was unable to take the legislation forward. It is of course the policy of the Opposition, therefore, to support the concept of commonhold. As regards the part dealing with commonhold, my principal difficulty with the Bill is its lack of detail. If your Lordships consider the great property reforms of the early 1920s initiated by a great predecessor of the noble and learned Lord, the Earl of Birkenhead, it would be noted that extremely detailed consideration, over a long period of time, was given to the five Bills involved. Most of the detail in the legislation, moreover, was finally included either in the main clauses or in the schedules to the Acts. I should express a real concern here. We heard earlier from the noble Lord, Lord Brennan, that the difficulties with the Bill are not so much difficulties as regards land tenure, but difficulties as regards estate management. The noble Lord set out, in what I thought was convincing detail, the nature of the problems that will need to be confronted if commonhold is to prove a success. But it is clear from Part I of the Bill that none of those issues is grappled with in the clauses. They will be dealt with in regulations. I submit that those issues should form schedules to the Bill. I wonder whether the noble Lord, Lord Bach, when he comes to wind up for the Government, will be prepared to address this matter. Are the regulations available in draft form? If they are, then surely the noble Lord would have no objection to tabling those regulations before we consider the Bill in Committee. However, if the regulations are not yet in draft form, then I put it to the noble Lord that the Bill is premature. Ultimately it will be impossible to reach firm conclusions on the desirability or otherwise of the concept of commonhold unless we know the detail, in particular with respect to those issues already set out so authoritatively and convincingly by the noble Lord, Lord Brennan. It is not for me to speculate how the noble Lord, Lord Bach, will respond to noble Lords, but I, for one, would be most reluctant to move on to the Committee stage without a clear idea of what the noble Lord's answers will be to the questions posed by his noble friend Lord Brennan. I shall turn now to one or two of the more detailed considerations in relation to leasehold reform. It is a matter of great regret that we have not been offered, in addition to the proposals covering commonhold, a Bill to consolidate the rights of tenants under the vast array of leasehold legislation. Those noble Lords who have a passing familiarity with the law as regards landlord and tenant will know that the rights acquired by tenants over the past 15 to 20 years are contained in a large amount of statutory material, most of which is extremely difficult to analyse unless one is an expert in the field. For that reason, I wonder whether the noble Lord, Lord Bach, will say something about the intentions of the Government on consolidation. Given the reported imminence of a general election, his statement could well be only of academic interest. Nevertheless, I should like to know what are the thoughts of the Government in relation to this matter. That is important because I believe that it will be difficult for existing tenants to convert to commonhold. The Government have imposed a requirement that a shift from a leasehold tenure to commonhold is possible only if 100 per cent of the tenants agree to make that move. I wonder why such an onerous requirement has been placed on tenants in those circumstances. There may be a reason for it which is not apparent to me. Moreover, as a number of noble Lords have already pointed out—I recall in particular the striking speech of my noble friend Lady Gardner of Parkes—it is a pity that no requirement has been set down for all new building involving blocks of flats to be held by commonhold tenure. The right to manage leasehold property is covered in Part II of the Bill. Here again my principal criticism is similar to the criticisms I made on the commonhold proposals. It is difficult to make an objective assessment as to whether the right to manage companies will work until one knows what is to be their structure, what will be their relationship with individual tenants and, perhaps above all, how they are to take over their obligations from those nominated companies which have been fulfilling that task so far. For example, will an obligation be imposed to take over long-term contractual arrangements which have previously been entered into en bloc? Alternatively, will this be treated as a matter of "take it or leave it"?. As far as I can tell, the only consideration of that matter set out in the Explanatory Notes to the Bill has been a requirement to negotiate. I should be grateful if the noble Lord could explain that notion if he feels that he can do so at this stage. The issue of collective enfranchisement by tenants deserves a little more detailed consideration. Noble Lords will be aware that the Leasehold Reform, Housing and Urban Development Act 1993 gives certain tenants of residential flats the right to compel the owner of the freehold in the property to sell it to them. That right does not apply to premises where more than 10 per cent of the internal floor area is neither occupied for residential purposes nor forms a part of the common parts. As a number of noble Lords have already pointed out, the Bill proposes that the relevant percentage of floor area for this exclusion be increased from 10 per cent to 25 per cent. As far as I can discern, no reason appears to have been given for this proposal. In my judgment, its effect is likely to be to dissuade the freeholders of premises from granting long leases for flats above shops or offices; to give the occupiers of flats above such shops or offices a potentially unjustified windfall, to the detriment of the freeholder; and, in other respects, to achieve no purpose that is obvious to me. Another existing limitation on the right to collective enfranchisement is that only qualifying tenants of flats can exercise the right. A qualifying tenant is a tenant of a flat under a long lease which is either at a low rent or for a long term. The Bill proposes to delete those requirements. The effect would be to extend the right of collective enfranchisement to tenants with leases of between 21 and 35 years whatever the rent; it is presently exercisable by tenants with leases between 21 and 35 years only if they are paying a low rent. The purpose of the low-rent test, in addition to the requirement that the lease be for more than 21 years, is to differentiate between a true long lease of a flat, in relation to which the lessee might be said, colloquially speaking, to be the owner of his flat, and a rent-paying lease, where the lessee is really a tenant and not an owner. However, the length of the lease alone is not always a sufficient indicator of this. Some leases of more than 21 years have annual rents equivalent to or approaching the rack-rent, and the holders of such leases should not be entitled to exercise the right to collective enfranchisement. In short, there appears to be no good reason for extending the right to collective enfranchisement in this way. I should like also to say something about Clauses 115 and 116, which concern a matter which has also been addressed by a number of your Lordships. The apparent aim of the clauses is to facilitate collective enfranchisement by removing the requirement that at least two thirds of the qualifying tenants in a block must participate; and that at least half of the participating group must satisfy a residence condition. The removal of the first requirement may be welcomed, but the removal of the second is rather more controversial. The removal of the requirement for two thirds of the qualifying tenants to participate is beneficial. It could prove an obstacle to an otherwise valid claim, particularly where there is a small number of flats in a block. The Bill, of course, will not allow a minority of tenants to enfranchise, since the participating tenants must be tenants of not less than one half of the total flats. The arguments surrounding the merits of leasehold enfranchisement were settled by the 1993 Act. The long leasehold system can work unfairly towards occupying tenants, and this in itself provides the best justification for the principle of enfranchisement. The requirement for a two-thirds majority cannot be justified as necessary to protect any tenants who do not wish to participate; and there would seem to be no compelling reason to retain the requirement as beneficial to landlords. The removal of the residence condition is more controversial. The intention of the enfranchisement provisions in the 1993 Act was to give rights to residential occupiers. It was not their aim to benefit investors. Although under the 1993 Act investors can participate, they can do so only if at least half the participators satisfy the residence condition. That is a reasonable requirement, since it prevents enfranchisement by investors acting alone. It allows residents who wish to enfranchise to rely on the participation of non-residents in order to achieve the necessary level of participation. Given the proposed removal of the requirement that two thirds of the qualifying tenants must participate, it is surely not unreasonable that half of the 50 per cent of the tenants who must participate should satisfy the residence condition. The removal of this condition will allow investors to acquire the freehold. If, for example, all the leases of flats in a block are owned by foreign companies for investment purposes, those companies will nevertheless be able to enfranchise. There would seem to be no justification for this. While it is legitimate social policy to protect home-owners, there is no reason to enlarge the rights of investors in order to give them an uncovenanted benefit at the expense of the freeholder. Moreover, it is arguable that in giving such rights to investors the Bill would be held to infringe the landlord's human rights. Although the confiscatory nature of leasehold enfranchisement was held in connection with the Leasehold Reform Act 1967 not to breach the landlord's right not to be deprived of his possessions, that was on the basis that Parliament was entitled, under the margin of appreciation, to conclude that the long-leasehold system generated injustice and that the tenants under long leases had a moral entitlement to the freehold. Such reasoning would seem not to apply to an investor. Presumably, the purpose of removing the residence condition is to assist the resident leaseholder in achieving a 50 per cent level of participation by enlisting the support of absent tenants, should it be required. However, a rather less desirable consequence could be that a majority of investors was enfranchised against the wishes of the residents and proved to be undesirable landlords. Thus, even if the rights of the landlord are thought insufficient to justify a residence condition, it may be that a requirement for at least some participation by residents should exist in order to protect resident leaseholders. Chris Brown, a member of the urban task force working party and a director of urban renewal at AMEC Development, has said that if the proposals in the Bill are put into effect in their current form developers will be scared off from investing in mixed use buildings. He described the proposals as
and said that"a nail in the coffin of urban renaissance"
He said that, despite its being relatively easy in the past for investors to keep control of buildings, it was still hard to find backers for this type of venture. He added:"urban renaissance is all about achieving mixed-use buildings, and in order to achieve that you need to find investors prepared to invest in the commercial part of those buildings—usually the ground floor and maybe the floor above. Those investors like to have an element of control over their investment and redevelop it when necessary."
The proposal remains in the published Bill. Secondly, he was concerned that the Government"now the Government is going to find that much more difficult with two measures in this legislation. Firstly, increasing the threshold of commercial space in the buildings from 10% to 25% under which leaseholders can buy the freehold".
The proposal to remove the low rent also remains in the Bill. Mr. Brown suggested that"are also proposing to do away with the low rent test—very often with these city centre buildings, the rents were too high for the buildings to be caught by the legislation. These two provisions will result in virtually all mixed-use buildings being caught by the legislation".
The second part of Part II concerns the replacement of nominee purchasers by RTE companies. Once again, in my submission, it would have been much more desirable to have the details of these companies and the relationship between them as corporate entities and the leaseholders on the face of the Bill, in the form of a schedule, rather than being left to regulations. I apologise to your Lordships for taking rather more time than I would normally have wished, but we did not open in this debate, and therefore I have subsumed the opening in the "wind". So I should like to speak for just a little longer if your Lordships will allow me. I turn now to Clauses 122 and 124. These clauses amend Schedule 6 to the 1993 Act, which regulates the purchase price payable by a nominee purchaser, now the RTE, on an exercise of the collective right of certain tenants of flats to enfranchise under Chapter I of the 1993 Act. Paragraph 210 of the Government's Explanatory Notes states that this clause"an investor in the commercial element of a mixed-use building used to be reasonably confident that he could continue to own that investment and management for the foreseeable future. Now there is a major risk that this will be taken away from him. Why should anybody invest in the commercial element of a mixed-use building when they can invest in free-standing commercial buildings which are not mixed use? It will be much harder to find that already hard-to-find animal which is the investor in the commercial element of mixed-use buildings."
That appears to be an accurate statement of its effect. The relevant date is defined by Sections 38(1) and 1(8) of the 1993 Act and the definition of the valuation date in paragraph (1)(1) of Schedule 6 to that Act. The change will clearly favour the enfranchisers to the extent that it will remove any incentive to the freeholder to delay enfranchisement in a rising property market. Paragraph 211 of the Explanatory Notes states that Clause 123 (Clause 98 of the draft Bill),"amends Schedule 6 to the 1993 Act to provide that the various values included in the price payable by the RTE company shall be determined as at the 'relevant date'—that is, the date of service of the initial notice—instead of as at the 'valuation date'—that is. the date at which it has been agreed or determined what freehold interests will be acquired by the company."
The change will clearly favour the franchisers at the expense of the freeholder and the owners of intermediate leasehold and other interests by providing that the freeholder's share of the marriage value will be 50 per cent and no more in every case, whereas at present it cannot be less than 50 per cent in every case. To the extent that the freeholder's share of marriage value on a fair valuation might be held to exceed 50 per cent, that effectively means that he will lose the excess over 50 per cent. It will not fall within the compensation provisions of paragraphs 5, 8 and 13, which apply only to loss resulting to the freeholder and the owners of the intermediate leasehold. The loss to the persons whose interests are being acquired will depend upon what would otherwise have been the marriage value in any given case. It seems, nevertheless, to constitute a form of expropriation which serves no obvious social purpose. It will not even result in the avoidance of a valuation exercise of determining the marriage value, or the computation of the respective shares of those entitled to share in the freeholder's share. Paragraph 212 in the Explanatory Notes states that Clause 124 of the Bill,"amends paragraph 4(1) of Schedule 6 to the 1993 Act to provide that the freeholder's share of marriage value should be 50% in all cases, rather than the greater of (a) such proportion as is agreed by the parties or determined by a leasehold valuation tribunal and (b) 50%".
Clause 99 of the draft Bill contained a similar provision in relation to unexpired terms of 90 years, and no explanation has been given for the reduction of the relevant period in the Bill. The change will favour the enfranchisers, again at the expense of the freeholder and the owners of intermediate leasehold properties. I find this a particularly curious change to have made. What is the logic of dropping from 90 to 80 years? If it makes no difference, why make the change? If it does make a difference, this is surely potentially an act of expropriation by a public authority of a property holder. Perhaps the noble Lord, Lord Bach, will comment on that as well. Lastly, I turn to leasehold evaluation tribunals. The Minister will be aware that the jurisdiction of leasehold valuation tribunals has increased incrementally over the years. It now covers not only the valuation of freeholds, extended leases and modern ground rents under the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993, but also questions relating to the right of first refusal under the Landlord and Tenant Act 1987, the appointment of managers under Section 22 of the Landlord and Tenant Act 1987, the reasonableness of service charges under residential leases and the landlord's choice of insurer under the Landlord and Tenant Act 1985. In some cases the jurisdiction is exclusive, while in others it is concurrent with that of the county court. As the noble Lord is aware, the Bill will extend the leasehold valuation tribunal's jurisdiction further. Some of the proposed new areas of jurisdiction are likely to involve more questions of pure law and non-expert fact, thus taking the tribunal further away from its traditional areas of valuation and surveying expertise, where questions of law tended to be purely ancillary. It may be questioned whether the tribunal is an appropriate forum to determine such matters. As to costs, the tribunal presently has no power to make any order as to costs. On matters of valuation, the landlord's valuation costs, which a tenant must pay, do not include his costs before the tribunal. As many of your Lordships are aware, applications to the tribunal can often involve very large sums of money."amends paragraph 4 of Schedule 6 to the 1993 Act to provide that where the unexpired term of each of the leases held by participating members of the company exceeds 80 years, at the relevant date, the marriage value shall be taken to be nil".
Lord Williams of Elvel
My Lords, I am sorry to interrupt. The noble Lord has spent 26 minutes giving the House the benefit of his undoubtedly sensible views. Perhaps he might feel it appropriate—and I make only a suggestion—that he draws his remarks to a conclusion to allow my noble friend to respond to the debate. I think that there are other matters which need to be taken on the Floor of the House.
My Lords, I thank the noble Lord for his observations. I hope that the noble Lord agrees that in normal circumstances I am, on the whole, a speaker who takes up very little of your Lordships' time. On this occasion we had no opening speaker; this is a highly technical Bill that involves matters which, in my view, ought to be on the face of the Bill, but are not; I think I am entitled to draw the attention of the noble Lord, Lord Bach, to these issues. They affect the fundamental rights of property owners, whether on the side of the landlord or of the tenant, and therefore are matters of great personal interest to them. I am entitled to point out the flaws in the Bill where I see them. The Bill involves complex issues of law and, therefore, my explanation of where those flaws lie is sometimes likely to take slightly longer than normal.In one sense, the noble Lord has had great success, however, because I cannot remember where I was. Paragraph 10 of Schedule 11 to the Bill would provide for the first time that a tribunal may award costs against a party in proceedings before it, but only if an application is dismissed on the ground that it is frivolous, vexatious or an abuse of process, or where the party in question had acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the proceedings. The amount payable cannot exceed £500. In my submission, the tribunal should be given a broader discretion as to both the circumstances in which costs may be awarded and the amount of such costs. At the very least there should be an express power to award costs occasioned by an adjournment. In high value matters, at any rate, there is no reason why the tribunal should not be able to award costs related to the outcome, particularly given that much of its jurisdiction is now devolved from the county court. In exercising its power the tribunal could have regard to the financial resources of the party. More generally, the Explanatory Notes to the Bill say that it provides a power to make regulations enabling the tribunal to exclude the whole or parts of cases of parties who fail to comply with directions. No such power appears in Chapter 6 or Schedules 11 to 12. Tribunals ought to have such a sanction, either instead of or in addition to the costs sanction to which I have referred. Paragraph 8 of Schedule 11 provides for procedure regulations to include provision for the determination of applications or transferred proceedings without an oral hearing and by a single panel member. It is not known what sort of application is envisaged to be appropriate for determination in this way. At the very least, in order to satisfy the human rights convention's right to a fair and public trial, it should be stipulated that any such regulations should include provision entitling an aggrieved party to a hearing before a full tribunal. In the circumstances, it is to be doubted whether the regulations envisaged by paragraph 8 will have any real use. I had intended to go on to consider the provisions on forfeiture, but in the circumstances I think I will sit down.
The Parliamentary Secretary, Lord Chancellor's Department (Lord Bach)
My Lords, I first declare an interest as a leaseholder of a London flat. I am grateful to all noble Lords who have taken part in this debate. In their different ways, individually and collectively, they have all shown enormous expertise in this difficult but important matter. The debate has highlighted large and small issues, which, of course, will have to be teased out in the normal way as the Bill progresses. I hope that the House shares the Government's view that the policy aims of the Bill are good and that the Bill itself is a suitable vehicle by which to achieve those aims.If I were to attempt to deal with even one-third of the good points made during the debate, I would succeed only in making myself even more unpopular than I already am on all sides of the House. I do not intend to do that. I intend to limit myself to 20 minutes. I have no doubt that I shall be reminded by those behind and in front of me if I exceed that estimate. I shall try in due course to deal with some of the major points that have been raised. That is not to say that those which I omit are not major, but it seems to me that there are some essential Second Reading points that need to be dealt with. The others can wait until another day, perhaps not very far off, when we meet again in Committee. As my noble and learned friend the Lord Chancellor said in opening, the concept of commonhold goes back many years. Noble Lords will recall that the previous government twice consulted on draft commonhold Bills during the 1990s. In that regard, I should like to say what a pleasure it was to hear, albeit shortly, from the noble and learned Lord, Lord Mackay of Clashfern, who played such an important part in drafting that proposed legislation. Your Lordships will not be surprised to hear that our Bill achieves its end with greater simplicity than did previous draft attempts. Having heard the debate today, I may have to revise that assumption. However, we are speaking only about matters of detail and angles of approach. At base—and this is very important—all the schemes that have been developed are very similar, and I believe that there is widespread support for the principle of commonhold. We are also grateful for the support for our objectives in relation to leasehold reform in Part II of the Bill. Our reforms are intended to address the current imbalance that exists between landlords and their leaseholders, and to provide leaseholders with greater security and control over their own homes. We are confident that those objectives will be achieved by this Bill. A number of very interesting suggestions have been made. We do not have a closed mind on these matters. We shall give them proper consideration. It is a complex subject. We want to make sure that it is correct. However, our view is that some of the aspirations of some leaseholders are unrealistic. We have to recognise the legitimate interests of landlords. We shall not be able to accept some of the more radical changes that leaseholders have demanded. On the other hand, I am sure that some less reputable landlords would prefer that we did not legislate at all on this issue. In drawing up our proposals, we have tried to strike a fair balance. Before dealing with the specific points that have been raised, I should like to make a general point. The Bill has been described by some as a missed opportunity. They believe that we should now act to prevent the building of any new, residential leasehold developments. I shall return to that point. Others take a harder view, namely, that we should act now to, in effect, abolish leasehold tenure and hand existing properties to their leaseholders in a gigantic windfall. We have tried to strike a balance. We therefore do not have much sympathy for that view. We believe that even to follow the less extreme view would be irresponsible. We have been described, as have all governments in their time, as arrogant. It would be unforgivably arrogant to do away with a historic tenure, however open it is to criticism, without being certain that the replacement scheme will work at least as well. We believe that the Bill does the trick. First, it introduces commonhold, which, under a variety of names, is a well tried and trusted means of managing co-operative living all over the word. The speech of the noble Baroness, Lady Gardner of Parkes, is living proof of that. Her experiences in New South Wales were of particular interest to the House. Secondly, it greatly improves the lot of those living in leasehold properties, by giving them a much easier route to enfranchisement and a no-fault right to manage their developments. We believe that those two innovative sets of provisions will work well. However, we must allow for fine tuning. To act precipitately would be to take risks with a fundamental part of the lives of millions of people. First, I deal shortly with why we believe that the requirement for conversion from leasehold to commonhold should be 100 per cent. We may, of course, return to that point. The Government take a firm view on this. We recognise that it is a high hurdle to jump. However, the alternative would be to allow conversion with anomalous leaseholders remaining. One of the fundamental tests of commonhold governing its establishment, operation and management is that all unit holders have an equal interest in the commonhold. If conversion with less than 100 per cent agreement were permitted, the resulting residents' group would not be a commonhold. I turn to the speech made by the noble Lord, Lord Selsdon, for which I thank him. We shall need to consider many of his points. However, I deal at this stage with only a couple of them. First, with regard to finance for leaseholder management companies, we cannot dictate to lenders. That is because leasehold management companies may have little to offer as security, but we shall be very willing further to explore the issue with representatives of those lenders. A further, general point made by the noble Lord, Lord Selsdon, was that the Bill should go further to harmonise the rules for houses and flats—for example, that the valuation date for the enfranchisement of flats should be the date of the initial notice. We agree that it would be desirable to bring the rules governing the enfranchisement of houses and flats more in line. We are glad to say that Clause 122 of the Bill already meets the noble Lord's specific point in relation to flats. As for houses, the valuation date will now be the date of the initial notice. I turn to the general point raised by a number of noble Lords—latterly, and perhaps with most feeling, by the noble Lord, Lord Kingsland—about why there is a need for so many regulations. The noble Lord will recall, not because he was there but because of his knowledge of history, the monolithic nature of the 1925 legislation. The Land Registration Act, sections of which have been much criticised, relies to an enormous extent on the regulations associated with it. We believe that a completely new Bill is required to bring about the changes necessary for the new century. We are incorporating into the regulations the changes that we believe may need to be made over time. I can tell the House that we hope to have a model CCS, a memorandum and articles, available for Committee stage. The most significant matters relating to the formation, operation and winding up of commonholds will be detailed in those model documents. Commonhold will provide a new way of holding property in England and Wales. For most people, the Bill will be an introduction to commonhold terms and concepts. Therefore, it is appropriate to strive as best we can for simplicity and brevity on the face of the Bill. It must be stressed that the Bill is a fully comprehensive framework for the establishment and management of commonhold. We have made significant progress in drafting the main regulations, taking into account the welcome comments made during the consultation process. We are on track for having drafts available by the time the Bill reaches Committee stage. That was one of the matters raised by the noble Lord, Lord Goodhart, in his helpful speech. I turn now to the rights of landlords to be members of the right to manage company; in other words, an RTM. We recognise that leaseholders will often be prompted to exercise the right to manage by some degree of dissatisfaction with the landlord's management. However, to exercise that right—this is an important change in the Bill—they will not have to prove that the landlord is at fault in any way. Therefore, the presumption must be that, as someone with an interest in the property, the landlord is entitled to a continued say in the management of the block, alongside leaseholders. That is why we believe it is only right that he or she should be entitled to be a member of the right to manage company.
My Lords, I am grateful to the Minister for giving way. Is it not the case that the landlord's interest can be exercised ultimately through a right to compel the RTM to comply with its obligations as to the management of the property? He does not need to be a member of the company to do so.
My Lords, I heard what the noble Lord said in his speech; and that may be so. We shall, of course, reconsider the issue as a consequence of today's debate. However, because we are convinced at present that the landlord's interests will, in nearly every case, be a minority one, we shall need some persuading that landlords should have no right to be a member of the company. Under the Landlord and Tenant Act 1987, leaseholders can apply to a leasehold valuation tribunal for a replacement manager to be appointed if they are unhappy with the landlord's manager, or to the courts for an order entitling them to acquire the freehold compulsorily. Under those procedures the LVT or the court will need to be persuaded that the landlord's management is seriously defective and that the appointment of a new manager is an appropriate solution. We shall no doubt return to that issue at a later stage.I move on to the removal of the residence test and the argument that that will open the door to purchases—predatory purchases—by speculators. We agree that the purpose of the right to enfranchise is to benefit bona fide residential occupiers, not speculators. But it has long been apparent that the residence test, which was introduced in the 1993 Act during its passage through this House ostensibly as a safeguard against speculation, was intended by its designers as a means of complicating and frustrating legitimate attempts at enfranchisement. It has certainly been routinely exploited in that way. The 1993 Act contains another anti-speculation measure, which, in our view, is perfectly adequate. Section 5(5) of the Act prevents a leaseholder from qualifying for the right at all if he is the long leaseholder of more than two flats in the block. Therefore, a speculator cannot acquire the right to enfranchise by a process of piecemeal acquisition of the individual flats in the block. In addition, Section 5(6) prevents anyone getting round that obstacle by acquiring the flats under arranged different names. The residence test itself requires 50 per cent of the enfranchising group to have occupied their flats as their only or principal homes for the past 12 months, or for periods amounting to three years in the past 10 years. Occupation by a company does not count for this purpose. Clearly a recent purchaser cannot pass the test; nor can someone who bought the flat for his or her own occupation but then proved unable to sell a previous home and had to rent it out; or, someone whose main home is in the country and who has a. pied-à-terre in town; or, indeed, someone who is working abroad but intends to live in the flat upon his return. None of those class of people can be fairly described as "speculators". Some landlords have gone to enormous lengths and have subjected leaseholders to intrusive questionnaires. They have even resorted on occasions to hiring private detectives to check out leaseholders' compliance with these rules if an attempt to enfranchise is begun, or even mooted. Moreover, since the 1993 Act, some landlords have resorted to a policy of letting to companies only—a genuine residential purchaser will be required to take out his lease through a company. The purpose of that manoeuvre is to deny purchasers' their right to enfranchise. Meanwhile, in a large block with a rapid turnover of leaseholders, the residence test has proved something of a nightmare for many who have attempted to initiate and sustain an attempt to enfranchise. We believe that it is high time that the residence test was removed. I shall now talk briefly about a reserve fund, a "sinking fund", usually to facilitate saving for large items of expenditure, or a reserve fund to finance the repair and maintenance of common parts or units (to be used should any major works be required) that the annual commonhold assessment or budget would not cover. We still have an open mind on the issue as to whether the maintenance of a reserve fund for specified purposes should be a legal requirement of the commonhold association. I hope that we shall return to that point in Committee. My noble friend Lord Lea of Crondall made some very interesting points. However, I do not have sufficient time to deal with all of them. He raised the difficult matter of how the right to manage should apply to properties that are a mix of commercial and residential units. The Bill provides that the rights, and now also the right to enfranchise, will apply to such properties provided that no more than 25 per cent of the property is in non-residential use. My noble friend suggested that that limit will prevent leaseholders from exercising their right. We believe that the limit of 25 per cent has been chosen for good reason. If the non-residential area is any greater than that, its value will tend to exceed that of the residential part of the building. The Government did not consider that it would be right to empower residential leaseholders to take over the management of a block in which their interest represented less than half the value. My noble friend also made a number of interesting points about precisely how we should calculate the residential and non-residential proportions. He was concerned over how any common parts should be taken into account. We shall also consider those points most carefully. Several speakers, especially the noble Baronesses, Lady Hanham and Lady Maddock, raised the question of whether using a company is. perhaps, too bureaucratic and expensive. This right to manage is a collective right. Creation of such a right raises questions about the relationship between the individuals concerned and the body through which it is exercised. On the one hand, the choice is leaving that relationship for the individuals and, on the other hand, prescribing the form that it should take. The 1993 way of doing so was to be exercised by a nominee purchaser appointed by the leaseholders. That Act said nothing about the nature and constitution of the nominee purchaser and the relative rights and responsibilities of the purchaser and the participating leaseholders. Although that had attractions, we also believe that it had drawbacks. Our view is that it is now time to take a more prescriptive and uniform approach, based on a company limited by guarantee as regards collective enfranchisement, the right to manage and the commonhold association. We shall no doubt explore that issue at greater length elsewhere. I have one further detailed point to make. The noble Baroness, Lady Hamwee, mentioned stamp duty. We consider that the registration process should not involve transfers of value and that they should not attract stamp duty. But we shall have to consider the matter further to ascertain whether or not we are right in that respect. I thank again all those noble Lords who participated in this Second Reading debate. We believe that the proposals in Part I of the Bill will deliver commonhold—a long overdue alternative to leasehold—which has been used all over the world with great success. As I said earlier in relation to our commonhold proposals, we expect to have model forms of the commonhold association's memorandum and articles and the commonhold community statement ready for the Committee stage. We also aim to have available the necessary government amendments, which we hope to table seven days in advance of the first Committee day. Part II of the Bill will, we believe, considerably strengthen leaseholders' rights and provide an effective remedy for those abuses that have, in spite of earlier legislation, continued to flourish. My noble friend Lord Whitty and I hope to conduct the Committee stage on behalf of the Government. We intend to hold a meeting with all interested noble Lords of all parties before Committee stage begins in order to discuss the Bill further in a more informal setting. I commend the proposals to noble Lords. On Question, Bill read a second time, and committed to a Committee of the Whole House.
Prescription Only Medicines (Human Use) Amendment (No 3) Order 2000
rose to move, That an humble Address be presented to Her Majesty praying that the order, laid before the House on 12th December, be annulled (S.I. 2000/3231).
The noble Baroness said: My Lords, I think that there has been some misunderstanding about the order and my purpose in tabling a Prayer against it. Therefore, let me start by saying what I am not against.
The Prayer is not against the principle of prescribing the morning-after pill. The pill has been in existence since 1985, although in its present strength for only a short time. It is currently available on prescription from GPs, 1,300 family planning clinics and a great many hospitals. Indeed, last year some 800,000 morning-after pills were supplied.
If my Prayer is carried this evening, the law will remain as it was before 1st January this year. My concern in tabling the Prayer is that pharmaceutical chemists will be able to sell the morning-after pill over the counter to women aged 16 and over, and that it will inevitably be bought by girls under the age of 16.
I am not in any way against the principle that pharmaceutical chemists ought to be able to prescribe a wider range of medicines and so help the community at large and take some weight off GPs and the NHS. As proof of this, perhaps I might add a personal note and say that my father-in-law was a pharmaceutical chemist, as were his two brothers. They must have been good at this work as, between them, they won two gold medals and one silver medal from the Royal Pharmaceutical Society. I therefore see pharmaceutical chemists as a very important part of the health provision of our country, and I have on more than one occasion been very grateful for the help given to me by the local chemist.
My concern about the order is twofold; the first constitutional, and the second in principle.
The order is introduced under the negative resolution procedure, the weakest of all parliamentary procedures. The order was laid before Parliament on 12th December 2000. It must lie on the Table for 40 days after publication, before it becomes law, in order to give an opportunity for debate. In this case, the Government brought the order into force on 1st January, although the 40 days do not expire until 4th February. This order has been brought in, therefore, without any proper parliamentary scrutiny or debate. The debate in the committee in another place was on 24th January and it is in your Lordships' House today.
There was a time when the Government talked about the importance of openness and transparency, but this, if I may say so, is an example of trying to bypass Parliament on an issue of great importance to a great many people, without discussion.
On a separate but related issue, an important order was laid on 17th July last year. I refer to the Prescriptions Only Medicines (Human Use) Amendment Order 2000. Under that order, the Government made it possible for the morning-after pill to be distributed free by school nurses and some other health professionals. Under this order it is also possible for chemists to dispense the pill free to girls under the age of 16 where the local health authority has made an appropriate patient group directive.
I suspect that few have heard of this order, or whether or not a patient group directive applies in the area where they live.
Clearly, this is an issue of great concern to parents. This order, however, was not debated in Parliament because it was a general enabling power for health authorities. However, it had wide implications: it makes the pill available to girls aged 16 and under. My point in raising the issue is that it makes much more important the debate on the order before noble Lords this evening.
The second constitutional point is that the order applies throughout the United Kingdom. In Northern Ireland, the age of consent is 17, and the order would appear to conflict in law with that part of the United Kingdom by stating that it will be available to girls at the age of 16. I appreciate that the order was signed by the Northern Ireland Minister, Bairbre De Brún. It would, however, be helpful to know whether the order has the full support of the Northern Ireland Assembly and what the position is in that part of the United Kingdom.
I turn now to the principle. I have often been accused in the past of being concerned only about boys. That has never been true, but today I am concerned about girls. My concern, as always, is the protection of young people, and 16 year-olds are children in law. I have also said on more than one occasion that all law sends a signal. So what signal does this order send? First, it says that unprotected sex is all right. This is exactly the opposite of what the whole sex education industry has been saying for at least 20 years. It is of course a very dangerous signal because it will increase the incidence of sexually transmitted diseases.
The Department of Health's document, National Sexual Health and HIV Strategy, states:
"Virtually all the sexually transmitted infections (STIs) are increasing. The number of attendances at departments of genito urinary medicine/sexually transmitted diseases now totals 1 million per year, a doubling over the last decade … Chlamydial infection seen in clinics has risen by 21 per cent between 1996 and 1997, and a further 13 per cent from 1997 to 1998 (latest figures). Population surveys have reported rates of chlamydia as high as 20 per cent, particularly in young women. There has been no reduction in the annual number of new diagnoses of HIV made, and the latest annual figures (1999) saw the highest number of new HIV diagnoses ever recorded".
I, for one, think that we should take those figures very seriously.
The Government's Teenage Pregnancy White Paper quotes a boy as saying:
"I have used a condom, but I don't like it. It puts you off. What's the use of having sex if you don't enjoy it?"
The pressure will be on for the morning-after pill. In other words, it will be an encouragement to unprotected sex.
Secondly, promiscuity will be encouraged. Everyone, including GPs, health authorities and now chemists, and, as I have already mentioned, nurses and youth workers, will be making the morning-after pill available to young girls. One can picture the scene. The boy will say to the girl, "why not; you can take the morning-after pill?" The girl will think: "Why not? I could take the morning-after pill and be all right." The consequences of sleeping around will be thought. to be dealt with by the pill. I am sure that this is not what the Government will say because this is not intended.
As I have discovered, there is no difficulty in getting an ID card. Teenage magazines are full of advertisements showing how to obtain one. Not only will the chemist not know the true age of the girl, but he or she cannot consult the girl's GP and find out anything about her medical history. I heard only this morning of the case of a 14 year-old girl getting the pill from a chemist in Newcastle. I think that we should take this situation very seriously. We are saying that young, under-age girls, can buy for £20 a very strong pill, and the chemist can supply it without knowing anything at all about her medical history.
It is, I believe, disingenuous to say the least, as Yvette Cooper did in another place on 24th January at col. 6 of the committee's proceedings:
"It is an offence under the Medicines Act 1968 for pharmacists knowingly to supply the product to women under 16. The chance of the measure having the effect of increasing the amount that young women use emergency contraception is highly unlikely".
On what evidence did she base that statement? It certainly flies in the face of all experience. I hope that the Minister will tell us more.
That further development means that girls can obtain the morning-after pill without the knowledge of their parents. That undermines family life. How many of us would like such medicines to be given to members of our family without our knowledge? In many cases, the current approach ignores the wishes of parents and of many religious people, especially Muslims, who have made very strong representations to me on this matter. They are greatly concerned about the effect of such provisions on their family lives and on their girls.
I was interested to hear that Superdrug was selling the morning-after pill on the Internet as recently as last Friday. I also heard that the Department of Health had asked Superdrug to withdraw it. I understand that the company will resume the scheme after a clarification of the guidelines by the Royal Pharmaceutical Society. However, what Superdrug was doing is perfectly legal under the order. If it is agreed to, the home delivery service of the morning-after pill will start again, and the drug will be even more readily available to young girls.
The Government want to halve the number of teenage pregnancies by 2010. Currently, 90,000 teenage girls become pregnant each year, of whom 8,500 are under 16. That is a tragedy for the girls and the babies. The figure has remained at the same level for the past 10 years, despite the fact that millions of pounds have been spent on sex education and on the provision of advice from clinics and doctors. The same is true of the overall abortion rate, which is higher now than it was in 1990. Those developments occurred despite an increase that is almost in four figures in the use of the morning-after pill. If the order's purpose is to bring down the number of teenage pregnancies, the figures do not suggest that it is likely to be successful.
I want to make a final point. Many people, in your Lordships' House and outside it, have put to me the argument that it would be better for a girl to have the morning-after pill than an abortion. As I have already said, the evidence shows that the more morning-after pills there are, the higher the number of abortions.
What, someone might ask, if a girl has had unprotected sex and is at risk? What would your Lordships do? Give her the morning-after pill, or what? Under those circumstances, I would say that she should go, preferably with her parents—or one of them—to her doctor or a clinic or hospital, because that is a far better and safer route. If she went to her GP, she would go to someone who knew her medical records and her family and who could give good advice. That is far better than going to an anonymous chemist, who would know nothing at all about her. If I were in that position and one of my daughters was concerned, that is what I would choose.
Is the morning-after pill safe? Each treatment, I understand, is 50 times more powerful than the previous contraceptive pill. What adults choose to do is a matter for them but, as I have said before, we have a responsibility to the young. The order is one more example in a series of provisions that give unsound and wrong advice. There are very few parliamentary opportunities to take a stand as a matter of principle and to help the young. This is one, and I believe that we should take it.
Moved, That an humble Address be presented to Her Majesty praying that the order, laid before the House on 12th December, be annulled (S.I. 2000/ 3231). ( Baroness Young.)
The Earl of Longford
My Lords, we are undoubtedly faced with a difficult decision. Good men and women can be found on both sides of the argument.Like others, I have received many unsolicited briefings from people on both sides of the argument. Those who support the Government's policy strongly suggest that the number of teenagers with unwanted pregnancies will diminish. On the other hand, it is argued with equal strength that adultery and fornication will increase. No one can predict exactly what will happen or how far the evils in question will be apparent. If we had to choose between reducing the number of teenage pregnancies and reducing the occurrences of fornication and adultery, I know which I should choose. I know that some Christians will disagree with me, but I cannot imagine how a Christian could think that adultery and fornication were the lesser evil. However, that is a matter of opinion—this is a free country and we sit in a free House. We have a Government who contain five Christian socialists. To that extent, they are, potentially, the most Christian government in my time. I should add, although the Government may not welcome such comments from me, that this is the best government we have had in my time, except for the government over whom Lord Attlee presided between 1945 and 1950, who were equally good. The present Government are very successful and get things right 90 per cent of the time. Just occasionally, they get things wrong, and it is the duty of candid friends to say so. I could not possibly vote for a policy that would make fornication and adultery more likely—there is quite enough of it already.
Baroness Gould of Potternewton
My Lords, I rise to oppose the Prayer and to support the order which will allow emergency contraception to be sold over the counter to women who are over 16. I must, however, declare an interest as the president of the Family Planning Association.The noble Baroness, Lady Young, concentrated some of her remarks on the need to protect young girls and to reduce the number of teenage pregnancies, which of course are important. I fully support the need to protect young girls and to reduce the number of teenage pregnancies. I shall return to that later. The order was introduced to reduce the number of teenage pregnancies, but it is more about providing access to emergency contraception for mature and older women, and I shall concentrate my remarks on that. There is a presumption that it is wild, immature young women who will need emergency contraception. In truth, it is mature women in stable relationships—women in their mid or late 20s—who are most likely to wish to prevent an unplanned pregnancy and who need access to the morning-after pill. All the professional bodies support the order as part of a national strategy to reduce the number of unwanted pregnancies and abortions. That view is supported by organisations that are involved with public health and family planing, by community and hospital pharmacists and by the majority of the adult public. One might argue, as the noble Baroness did, that the fact that we can obtain emergency contraception from GPs, family planning clinics, NHS walk-in centres and some hospital and A&E departments makes its sale in chemist shops unnecessary. However, easy access is absolutely essential. For emergency hormonal contraception to be effective, it is essential for it to be taken with some speed. It is 95 per cent effective if taken within 24 hours, 85 per cent effective if taken within 25 to 48 hours and only 58 per cent effective if taking the drug is delayed to between 49 and 72 hours. Time and again, women call the Family Planning Association helpline saying that they have rung their doctor but cannot get an appointment within the 72-hour period, that they have not been able to get time off work to see their doctor or that they were embarrassed to discuss the reason that they needed an urgent appointment with the doctor's receptionist. Women often ring the helpline in tears of frustration and despair. A woman who has had unprotected sex, or whose regular contraception has failed, knows that speedy access to emergency contraception is key to preventing an unplanned and unwanted pregnancy. Those calls for help account for about one-fifth of the calls to the helpline. That is particularly true on a Monday or after a bank holiday. But these women or men—men also ring for advice—are not irresponsible, reckless or promiscuous. They are acting responsibly in trying to prevent an unwanted pregnancy in a world where there is no 100 per cent safe method of contraception and where human beings are fallible. Allowing EHC to become available directly from Britain's 12,000 pharmacies has many advantages which should not be lost. Women will he able to buy it conveniently, at weekends and when GPs' surgeries are closed, and without embarrassment in an area out of earshot of other customers. Most importantly, it will increase the chance of access to advice from professional pharmacists and will limit the number of unwanted pregnancies and abortions. I want to comment briefly on the point raised by the noble Baroness, Lady Young, in relation to teenagers. No one would deny that it would be preferable for teenagers to delay having sex. But surely it is also preferable to prevent pregnancy rather than to refuse help. We must accept the reality that one-quarter of teenagers will be sexually active before their 16th birthday. A recent survey in Scotland showed that that is true for 35 per cent of girls and 30 per cent of boys. My view is that the social and psychological impact of an unwanted pregnancy far outweighs concerns about the morality of prescribing emergency contraception. The noble Baroness, Lady Young, also raised that point and related it to the question of abortion. I want to refer to the remarks of Dr Trevor Stammers, spokesperson for Family and Youth Concern. He made it clear that, although a school's sex education policy should have as its basis providing assistance to young people to resist the pressure to have sex, the morning-after pill is the lesser of two evils—rather the pill than the trauma of a possible abortion. The noble Baroness, Lady Young, is wrong to believe that providing emergency contraception will tempt young people to try sex for the first time. By the time it is prescribed, sex has already taken place. Voting against the Prayer will in no way prevent teenage pregnancy; a vote in favour will. After going through all the proper procedures, the Committee on Safety of Medicines and the Medicines Commission have advised that taking the morning-after pill is safe and effective and does not constitute an abortion. Medical care is about providing the right support and the right medication at the right time. That is exactly what emergency contraception provides. It provides a useful avenue of accessibility for women and teenagers, and its use is highly responsible in the face of a potential, unwanted pregnancy. Voting for this Prayer tonight will deny many women the right to take that responsible action. I urge noble Lords to vote against it.
My Lords, I listened very carefully to the eloquent case made against the Prayer by the noble Baroness who has just spoken. However, I am afraid that I am not convinced. The government official in Nigeria—the father of Damilola Taylor, the boy who was murdered not long ago in Peckham—spoke three days ago of a breakdown in moral values in Britain. I am afraid that he may be right.Week after week, we in this House are faced with government proposals for sexual licence: Section 28, the reduction in the age of consent, and now this. Clearly, the Government are helping to create the climate of permissiveness which is bringing about the breakdown of which Mr Taylor spoke. The selling of the morning-after pill over the counter by chemists seems to me to be a mistake. Although it may, if used soon enough, protect against pregnancy, it does not protect against sexually-transmitted diseases—genital warts, chlamydia and gonorrhoea, among others—which may lead to HIV or cervical cancer. Inevitably, it will lead to an increase in unsafe sex and will give the green light to "sleeping around", resulting in a substantial increase in the already very high level of promiscuity. The drive to provide explicit sex education at ever-decreasing ages and the availability of the morning-after pill on prescription for the past 10 years have not succeeded in improving matters. Abortion rates have not been reduced, and teenage pregnancy rates in this country—already the highest in western Europe— continue to rise. It is surely very unwise to allow pharmacists to sell this pill to women. They are not allowed to consult the doctor concerned; they have no access to medical records; nor can they check the age of girls who seek to buy the pill. I gather that the pill should not be taken by women who are or may be pregnant, have high blood pressure or heart disease, or have had a stroke or breast cancer. Pharmacists often cannot know whether those who come to them fall into any of those categories. Therefore, risks to health will multiply. Meanwhile, doctors cannot know how often their women patients have used the pill. That can seriously affect decisions about medical treatment and be dangerous to the women concerned. The selling of the morning-after pill over the counter gives the green light to "sleeping around" and will result in a substantial increase in the current level of promiscuity. For those reasons, I support the Prayer introduced by the noble Baroness, Lady Young. I am sure that she is right.
My Lords, I must confess that the speech of the noble Baroness, Lady Young, leaves me somewhat puzzled. I believe that I live in the real world. In the world where I live, people of all ages have sexual relationships. In the world where I live, these days most couples take responsibility for their own fertility. They take advantage of the fabulous advances which have occurred in medical science over the past 50 years and use the hormonal and barrier products which ensure that, when they have a child, it is a wanted child. Surely that is what we all want: that every child is a wanted child, born into a home where it will be loved and looked after properly.However, in the real world where I live, things sometimes go wrong with the normal methods of contraception used by responsible people. Condoms split or come off; women forget to take their pills; or they may be sick and lose the pill. Human beings are not perfect. In those situations, surely a responsible, mature woman must not be condemned to bear a child which she does not want simply because she cannot obtain the help that she wants easily and readily. Of course not. In the real world where I live, young people are very street-wise. Although there are shortcomings in our provision of sex education, most young people know that if they have unprotected sex they are in danger of pregnancy and infection—dangerous infections which can kill. Fortunately, every woman who is in a sexual relationship today can readily obtain contraceptive advice and treatment without undue cost. But—and this is a big "but"—people sometimes behave under the influence of powerful chemicals which can interfere with their normal good judgment. No, I do not mean alcohol, Ecstasy or any similar drug; I refer to testosterone and oestrogen. Those chemicals are incredibly powerful and are particularly plentiful when young people may not yet be used to their effect. Therefore, should we be trying to punish women of all ages who suspend their normal good judgment or have an accident by forcing them to bear children they do not want by taking away the help that they need? That would be the effect of the proposal of the noble Baroness, Lady Young, if it were carried today. We have heard that we in this country have the highest rate of teenage pregnancy in Europe. How can that be when we have sex education and free family planning facilities? We seem to have done everything to inform, advise and supply treatment, yet still these tragedies happen. Well, we have not done quite everything. One thing we have not done is to make provision for the accidents, the unplanned errors of judgment and the coercion and abuse situation—until now. Now we have a weapon which should help so long as it is made easily available at no undue cost. In doing so, we may also be able to reduce the number of abortions. Recently, evidence has been published showing that 90 per cent of pregnancies that were terminated could have been prevented by emergency contraception, and 70 per cent of women seeking abortion would have used emergency contraception if they had known about it and known where to obtain it quickly. Some people who oppose the availability of this medicine over the counter believe that it may lead to irresponsible attitudes to sex. This is nonsense. Those who say so have not done their homework. Recent studies have shown that only four per cent of users wanted the product more than twice a year. It is obvious to any woman why that is. Frequent use will disrupt the normal pattern of periods and there is nothing women hate more than periods that have gone haywire. It drives them mad; it cramps their style. If we do not know that, the advertisers of sanitary protection certainly do because they base their advertisements on the fact. Women who acknowledge they are at risk of an unwanted pregnancy and take action are to be commended, not stigmatised. They deserve the safeguards which have been put in place by the Government. There is one more thing we could do, and I wish we would. We could stop talking about sex as if it were some terrible immoral activity that causes untold harm to society and start accepting it as normal human behaviour, We should learn to discuss it with our children openly, frankly and without embarrassment. As long as it is something hidden and "naughty", children will want to do it. And they may want to do it before they are ready for it, understand it or are prepared to deal with its consequences. What we should be doing today is saying to the Government, "Well done, keep going, extend the arrangements that make the product free to those for whom cost might be a barrier to getting help." I welcome the checks on pharmacies carried out recently by some members of the press to ensure that pharmacists are following the guidelines. But I have to say that it is much more of a tragedy for a 15 year-old girl to have a baby than to have a pill that she should not have had. These tests, one hopes, will put pharmacists on their mettle and ensure that they follow the guidelines conscientiously. None of them wants to be exposed by the Daily Mail. I also welcome the fact that Superdrug has shelved the idea of selling the product over the Internet. The safeguards and advice available through this method are just not good enough. One of the most important aspects of advice given by pharmacists and nurses is that unprotected sex can lead to dangerous infections as well as pregnancy. Most young people know this very well and take appropriate precautions. However, there is no evidence that the availability of this product will make women so careless of their own health that they will take dangerous risks. What is important now is that the properties and availability of this product are made part of an integrated sex education programme for both adults and schoolchildren which informs but does not judge, which protects but does not control, which understands but does not patronise.
The Lord Bishop of Southwark
My Lords, I can well understand the desire of the noble Baroness to prevent pharmacists selling the morning after pill over the counter. She has marshalled powerful arguments for her viewpoint. These stem from her deep humanitarian and religious sense of values and her concern for the welfare of young people.The Church shares these values. There is no doubt that the gift of sex is a precious gift of God, to be used within a loving marriage relationship. That is what we teach, have always taught and will continue to teach. However, that teaching is not always heard and, if heard, is not always accepted. Sexual intercourse is not confined to the marriage partnership and while, in these enlightened times, many might say that what adults do in their private lives is a matter for themselves alone, some of the figures concerning teenage sex must surely concern us all. Your Lordships are well aware of them, and they have been rehearsed this evening: the worst teenage pregnancy figures in Europe, appalling rates of teenage abortions and young teenage mothers, no older than children themselves sometimes, struggling to bring up a baby while losing education and training opportunities, being trapped into a spiral of poverty which gives the worst possible start in life for the new infant. How are we to respond? With this debate in mind, I consulted one or two teachers of teenage children in our inner city secondary schools. In their view, some teenagers will engage in sex and some will not. Those who will not have taken that decision because they respect what they have been taught by home, church or school. Or they will not because they believe that in the future they will have a happier and more loving relationship because sex is special and it will have a special place in their lives. In my view, these young people are right. I wish that all teenagers believed and acted like them. Of course we should all do what we can through our teaching, our preaching and our parenting to strengthen their resolve and spread it to others. However, popular culture is against us. Judging by much of the media, sex is compulsory for all, at any age. So it is not surprising that another group of teenagers do indulge in sex from time to time. We may preach against it, and we do; we may teach against it, and we do; but it goes on happening. The question then is: do we make the best the enemy of the good? The best is sex within marriage. The good is surely to enable all teenagers, even foolish weak-willed teenagers, to survive their teenage years without the burden of an unwanted baby, pregnancy or abortion. The availability of contraception has surely saved many teenage girls from this fate. I know there are those who believe that the availability of contraceptives has encouraged teenage sex, but that is not a universal view. The teachers I talked to believe that without contraceptives we would see an increase in unprotected teenage sex, with a consequential increase in pregnancy. Many people view the morning-after pill as an emergency form of contraception—emergency because regular use might well bring health problems; emergency because the pill is expensive, certainly to the teenage pocket. But the one-off use of the pill might save a one-off abortion or a one-off birth of an unwanted child. Thirty-three community pharmacists in the health action zone where I live in south London have been involved in a pilot project testing out the procedures in the new order. The project has been part of a strategy for reducing unintended young pregnancies and it is reported that the response has been almost universally positive. It has proved to be the case that the pharmacist's is a less threatening place for some vulnerable young women to approach than the doctor's surgery or clinic. There is no question that we must strengthen longterm methods of teaching morality, developing good sex education for boys and girls, and increasing hope and choices for girls in areas of deprivation. All these things we must continue to do, but in the meantime the morning-after pill provides an emergency last resort for those who have fallen through the sexual net. I believe it is right for us to be very uneasy about the right way forward in this debate. I, for one, am uneasy for I certainly do not believe that all the moral arguments are on one side. But speaking for myself, I believe that unwanted teenage pregnancies are such a great evil which blights lives that we must not let the best be the enemy of the good. So, with regret, I shall not be following the noble Baroness into the Lobby tonight.
Lord Davies of Coity
My Lords, it is well known in the House that I supported the noble Baroness, Lady Young, when she opposed the promotion of homosexuality in schools and we had a debate on Section 28. I spoke and voted in this House not to allow a reduction in the age of consent of homosexuality. But in all honesty I cannot support the proposition that has been put forward this evening. Of course I will support measures that I believe will reduce promiscuity. I will certainly support, as indeed we all will, any measure that reduces the transmission of sexual diseases. But I cannot accept the proposition that the taking away of a measure after the event somehow controls what happens when the event takes place.The measure proposed by the Government is twofold: to prevent unwanted pregnancies and to prevent more abortions taking place; that is, to prevent the kind of things none of us wants to happen. We want to see family relationships established and built considerably. However, I cannot see how such relationships, those between teenagers and those between parents and teenagers, can in any way be conditioned by not having the measure of the morning-after pill. The reasons for the measure are sound and good. I believe that the House should vote against the proposition of the noble Baroness.
My Lords, I speak in support of deregulation of progesterone-only Levonorgestrel emergency hormonal contraception. I speak on the efficacy of this pill as an effective contraceptive and not on any procedural or constitutional issue. I had rather a long speech. However, it was considerably shortened after I listened to the notable speech given by the noble Baroness, Lady Walmsley. I cannot but agree with just about everything she had to say. She spoke as a teacher. I speak as a gynaecologist who has seen many unwanted pregnancies.There are many reasons why this deregulation measure is necessary, not the least of which is as one of the many measures needed to reduce the rate of teenage pregnancies in this country. We heard about the high rate of unwanted pregnancies which end in termination in the United Kingdom compared to the rest of the western world, except the United States. There were 173,000 in England and Wales alone in 1999. Evidence from smaller studies carried out in Scotland suggests that in women between the ages of 16 and 29 who take emergency contraception, the rate of unwanted pregnancy has been reduced. Larger studies are currently being conducted. The progesterone-only pill, Levonorgestrel, works by delaying ovulation and preventing fertilisation. It is not an abortifacient. The pill is safe and effective. I do not know what the noble Baroness, Lady Young, meant when she said that the pill is 50 per cent more powerful. It is certainly 50 per cent more effective. In trials which have been reported, including those by the WHO, few complications have been reported, nausea and vomiting being the main ones. That, too, has been in far fewer women compared to those using the combined emergency contraceptive pill. No serious complications have been reported. There are practically no contraindications. In trials reported by the WHO, the rate of pregnancy was 1.1 per cent among the progesterone-only pill group. The effectiveness of the pill relates to the time of taking it following unprotected intercourse. The noble Baroness, Lady Gould, stated the correct figures, as reported by WHO. There has been a 95 per cent success rate in terms of avoiding unwanted pregnancy if the pill is taken within 24 hours of unprotected intercourse. That is the crux. The sooner the pill is taken after intercourse, the more effective it is. If taken inappropriately, or if pregnancy occurs, the trials reported no adverse foetal outcomes. Therefore, the pill has to be easily available. Making it available only through general practitioners, family planning clinics, A&E departments of hospitals or even patient group directives—not all of which are funded for this—will delay women receiving the pill. Despite the low levels of complications reported, the Royal Pharmaceutical Society has issued guidance to pharmacists. Concern has been expressed that women will use the emergency contraceptive pill as regular contraception or that there will be an increase in sexual activity in young people. As we have heard, and I concur, neither of those concerns is borne out by the evidence. The age group with the highest incidence of the use of emergency contraceptive pills is that between 20 and 29. The lowest incidence is in the group aged 16 to 19 and below 16. Evidence from trials in other countries and in the Lothian area of Scotland does not suggest repeated use of the pill. A small number of women used emergency contraception on more than two occasions in a year. Couples who normally rely on other forms of contraception, such as the pill, the inter-uterine contraceptive device or condoms, may, for a variety of reasons, need to use the emergency contraceptive pill where there is a risk of failure of the usual form of contraception. In such situations, emergency contraception offers women peace of mind from unwanted pregnancy. Levonorgestrel is the safe choice. However, I agree that the cost of obtaining the pill from pharmacists, nearly £20, half of which I understand is the cost of the pill and half the dispensing cost, may reduce its use. It is interesting to note that the cost of a similar product in France is equivalent to £5. But that is no reason for us to stop Levonorgestrel being available through pharmacists. The progesterone-only emergency contraception pill, taken in 0.75mg tablets, 12 hours apart within 72 hours of unprotected intercourse, is safe, effective and free from complications. I hope that it will help to reduce the incidence of unwanted pregnancies. Anything that we can do to make it more easily available has to be good. It is interesting to read the editorial comment in the New, England Journal of Medicine, a prestigious medical journal. The conclusion states:
"Making emergency contraception more easily obtainable does no harm and may reduce the rate of unwanted pregnancies".
My Lords, I rise first to assure the noble Baroness, Lady Walmsley, that my noble friend Lady Young lives in the real world. I have often met her there and she speaks from it, from a wealth of experience gathered in many ways, particularly as a parent and grandparent.I find this a difficult and sad debate. There are genuinely important considerations in both directions. One cannot simply rely on habit or friendship when making up one's mind. However, considering the context in which we hold it, I am saddened by the change in the attitude to love which has taken place in the past half-century and the relationship between sex and love. That relationship is central to a healthy society. If we divorce the two, we revert to the animal. If we ally the two, we move towards the human and the spiritual. I am sorry if that leaves some of your Lordships completely baffled. To me, it is real and important. I am troubled by the fact that the Government have shown so little willingness to offer what I would regard as common-sense moral advice. They are happy to tell people that it is wrong to smoke, and the consequences of so doing. They are happy to tell people that it is wrong to drive and drink, and the consequences of so doing. But nobody has said that it is wrong to take the risk of siring or begetting illegitimate children. The purpose of the sexual mechanism in the human race is to produce children. That is completely forgotten in most of our contemporary literature and contemporary films. It is seen as an end in itself. My noble friend referred to a child who asked, "What's the point of having sex if it isn't fun?" The answer is that it is tremendous fun but that is not the end purpose. The end purpose of it is to have children within marriage; and if we stop doing that, we stop having a viable society. Therefore, there is a political as well as a spiritual priority and I deeply regret the Government's reluctance to see that, to take it on board and to give moral as well as medical advice. I hope that the noble Lord will not disappoint me by failing to offer such advice in the context of his reply. If the issue is treated purely as mechanical and medical, I shall find myself unable to go other than with my noble friend into the Lobby. If he can tell us that it is about something else, I shall find it much more difficult to accompany her.
Lord Carlile of Berriew
My Lords, I wish that like some noble Lords who have spoken in favour of the Prayer I was confident in the belief that I had a special insight into the conscience of the nation. I do not claim that credential for speaking in this debate. However, I claim two other credentials. The first is the special misfortune during the past 30 years of having appeared all too frequently in cases involving the deaths of babies who were virtually condemned to death when they were conceived in haste. The second is the much happier credential of being the parent of three adult women.Some parents, unlike me and many of my friends, may have been extremely lucky. Their daughters may have passed seamlessly from the age of reason to the age of responsibility. But I do not believe that that is the general experience of many of us. We must protect our daughters and the girls of this country by the best means available, combining good moral sense and good medical science. There is a moral issue which concerns me greatly. I start from the viewpoint that in this country there are far too many abortions of viable foetuses well embarked upon gestation. My observation and understanding is that abortion is physically and emotionally a potentially disturbing experience for almost all who undergo the process and that for many it is a completely ruinous experience which affects and damages for them for the rest of their lives. Wherever it is realistically appropriate to avoid abortion, abortion should be avoided. I do not accept for one moment the proposition put by the noble Baroness, Lady Young, that the use of the morning-after pill prescribed by pharmacists will increase the number of abortions. That seems a completely perverse misuse of logic. Another moral issue seems to me to be held in the answer to the following question—
My Lords, I am sorry to interrupt the noble Lord and thank him for giving way. The point I made was that although more than 800,000 morning-after pills were supplied last year, the number of abortions has risen.
Lord Carlile of Berriew
My Lords, the noble Baroness will know that the sexual habits of young people are complex issues. I know of no research material which suggests that the availability of such a pill over the counter from a properly regulated pharmacist will do anything other than reduce the number of abortions.However, another important moral issue seems to me to be held in the answer to the following question. Are we prepared to respect women of 16 and upwards as the custodians of their own bodies, in the absence of a paramount public interest to the country? After all, girls of 16 may lawfully have sexual intercourse, so why should they not control the consequences of that sexual intercourse? They can purchase contraceptive devices before they have intercourse, so why should they not purchase a contraceptive device, as the noble Lord, Lord Patel, described it, after they have had intercourse—because that is the scientific way in which it works? They may even marry lawfully at the age of 16. It seems to me that to allow young women the option offered by the order is both consistent and logical in giving women greater custodianship of their own bodies. That is particularly so, as the scientific advice is clear, because the new morning-after pill is far safer than its oestrogen-strong predecessor. Furthermore, let us not forget that the Royal Pharmaceutical Society, which is an extremely responsible professional body and regulator of its profession, has introduced and will enforce stringent professional standards concerning the supply of these pills. It has also been suggested by some noble Lords that this order—this change in the law—will lead to more casual sex by the over-16s. I am afraid that that view beggars reality. That particular horse bolted years ago! Appalled as I am—and I genuinely am— by the sexual content of many teenage magazines aimed at girls—I recall an occasion when my wife went around the house throwing out every one she could find because of its content—I believe that one must recognise the truth of their content. They are no more than a reflection of their readership's life and times. However uncomfortable are the facts of life for older teenagers, the life of facts is that most teenage girls are sexually active before they reach the age of legal consent. The noble Baroness, Lady Young, spoke of the desirability of dealing with these issues by girls going with their mums, or possibly their dads, to see their nice GPs who knows the family history. I have to ask the noble Baroness whether she has looked at the demography of this country and at the lack of interest of some parents in what happens to their children. I ask with great respect to the doctors in the House whether the noble Baroness really believes that one can rely on the wisdom of every general practitioner in this country to aid that process. The truth of the matter is that, as regards young women over the age of 16, now that the science is safe these matters are surely best left in their hands. The order recognises changes in science and in society. I hope that this House will not thwart that recognition.
Baroness Massey of Darwen
My Lords, I shall speak but briefly today. However, I am extremely concerned about the issue. I believe that anyone who is concerned about abortion rates and about unintended pregnancies producing unwanted children, cannot support the noble Baroness, Lady Young, tonight.I shall not concentrate particularly on young women but on women in general, for it affects them. "Emergency contraception", to give it its correct title, is not an encouragement to promiscuity; it extends a woman's choice of whether or not to risk pregnancy in emergency. I emphasise the word "emergency". Emergencies happen; condoms split and people have unprotected sex whether or not that is wise or responsible. Pharmacies are convenient and accessible, as was stated by my noble friend Lady Gould. People go to their pharmacy for advice and service for many items. It is not always easy to get to a doctor or a clinic. Your Lordships have heard the medical evidence described so clearly by the noble Lord, Lord Patel. There is no evidence that women are using emergency contraception repeatedly, either in the UK or in France where it has been available since 1999. I stress what other noble Lords have said; that one survey showed that only 4 per cent of women used emergency contraception more than twice a year. That is a small number. This pill is not an abortion pill, as is sometimes stated. It cannot terminate a pregnancy which has begun. I am not pro-abortion as such. I am pro women having choices about whether or not to have children. Women who make that choice are behaving responsibly, not irresponsibly—and it is mainly women who make the choice. Methods of male contraception are limited; certainly, there are no emergency contraceptives for men. Who is most likely to use this pill? Not teenagers. The notion that under–16s will line up to pay £20 for this contraceptive in a pharmacy, or that it will be doled out in schools, is ludicrous and untrue. In a pilot scheme in Manchester the average age of women who used emergency contraception was 24, not the under-16s. That is not surprising, given that most unintended pregnancies occur in women aged between 20 and 25, not the under-16s. The average age of first sex in England is 17. Of course some have sex earlier and, unfortunately, become pregnant. Those who avoid having an unwanted child are behaving responsibly, not irresponsibly. Unwanted pregnancy can still result in young women in particular attempting to use dangerous methods to self-abort. None of us wishes to return to that, certainly not parents. Emergency contraception is legally available to the over-16s. Some girls under 16 will obtain it—even when not sent in by newspapers. I doubt that there will be many genuine cases. I respect principles, idealism and certainly love. There is a good deal of moral advice in the new personal and social health education guidelines for schools. People should behave responsibly. I do not advocate that anything goes as long as pregnancy does not occur. However, to be charitable, I believe that idealism must be tempered with pragmatism and reality. People will continue to have sex and some will take risks or make mistakes. We should do all that we can to ensure that those risks and mistakes do not result in unwanted children. Emergency contraception is safe and extends a woman's choice over her fertility. A women is unlikely to make much use of this method of contraception, and in the vast majority of cases it will be used by women over 16. The noble Baroness, Lady Young, has spoken in this House about fighting to the death for principles. I and others will fight to the death to preserve and extend a woman's right to control her fertility. If we remove one possible method—the ability to purchase emergency contraception from pharmacies—we shall not be thanked.
The Earl of Listowel
My Lords, the subject of the Motion last Wednesday was boys growing up without the care of a father. My noble friend Lord Northbourne then stated that,
My noble friend Lord Laming, with all his experience of social services and the care system as a former director of the Social Service Inspectorate, said at col. 313 that,"in the age of effective contraception, to conceive an unwanted child is a form of child abuse on the part of both parties".— [Official Report, 24/1/01: col. 305.]
I respect the concerns of the noble Baroness, Lady Young. I also read with interest the briefing of the Christian Institute. However, their concerns are outweighed by the often appalling consequences of unwanted pregnancies. Children have a strong interest in not being born by default but, so far as possible, only after a deliberate choice. I urge your Lordships to reject the Prayer."every child should be a wanted child … Adults are free to choose their lifestyles but we must emphasise that this should not be at the expense of defenceless children".
My Lords, with respect I suggest that the noble Baroness, Lady Young, has fallen into one of the most elementary statistical mistakes. She has related two variables moving in the same direction as if one is the cause of the other. Both can be due to a common cause or each due to a cause that is unrelated to the other. I believe that the noble Lord, Lord Carlile, has made it clear that it is very unlikely that the use of emergency contraception has resulted in an increase in the number of abortions.Although emergency contraception has been available free on prescription on the National Health Service for 17 years, as my noble friend Lady Massey points out it is not used so much by teenagers as by older women. One reason for it is that teenagers do not want the embarrassment of revealing to a doctor who may well have known them from birth that they are now sexually active. As a general practitioner, I know that that is so in a number of cases. The order will allow a teenager to go to a pharmacist perhaps slightly out of her locality who does not know her. Based on the protocols which have been given to pharmacists, they will be able to provide good advice to teenagers. The evidence is that the fright caused by having to use emergency contraception will result in the subsequent regular use of adequate contraception by those who continue to be sexually active.
My Lords, I apologise for interrupting the noble Lord, but he said that the order would allow teenagers to go to pharmacies. It will not. The order allows only teenagers aged 16 and over to go to pharmacies. At least four noble Lords who have spoken against the noble Baroness, Lady Young, have deplored teenage pregnancies, so the logic of it is that one must make the pill available to 12, 13, 14 and 15 year-olds as well as 16 year-olds.
My Lords, one cannot let that point go unanswered. There is a case for allowing pharmacists to make their own judgment in this matter, but they are expected to discover the age of their clients and not provide the drug to girls under 16.At the moment, 74 per cent of emergency contraception is used by women aged 20 or over, but even there is the deterrent effect the embarrassment of admitting a contraceptive slip-up to their GPs. Sadly, the high cost of the currently available over-the-counter emergency contraceptive Levonelle-2 (which is a well known synthetic progestogen that has been available for a long time and is well out of patent) will deter its use. My local pharmacist tells me that, of the £19.99 that the drug costs the patient, £11.06 goes to the manufacturer Schering, £5.95 to the pharmacist and £2.98 in VAT to the Government. The same product is available on prescription on the NHS but in that case only £5 goes to the manufacturer. The cost to the manufacturer of producing the material is less than £1. My pharmacist suggests, and I agree, that the same sum—£5—should go to the manufacturer whether the product is supplied on prescription or over the counter. The price to the patient will then be reduced to £11.99, which is a more acceptable figure. The BMA suggests that this contraception should be free in order completely to remove the price deterrent. I doubt that my noble friend will agree to that. However, at least the product is so non-toxic that there is no danger from an overdose, however much people buy it, other than causing irregular periods. I very much hope that your Lordships will pass this order and oppose the noble Baroness's Prayer. If we are successful in passing the order unamended, I hope that my noble friend will agree to look closely at the question of how the price of the product may be reduced.
The Lord Bishop of St Albans
My Lords, this debate is ostensibly about making available to women a contraceptive in a new way, but I believe that behind it lies not one but a series of moral issues that I should like to try to highlight. If the figures for 1998 provided by the Department of Health can be extrapolated to 2001, by the end of today in this country just under 500 children will be aborted. The weekly figure is 3,290. Every week the equivalent of a large village or small market town filled with children is wiped out.I find those figures chilling; but I need to add, lest I be misunderstood, that in relation to abortion I am not an absolutist. I can, and do, acknowledge that there are, and will be, situations where abortion may be justified. I certainly would not wish to return to the situation surrounding abortion which obtained before the 1967 Act. Furthermore, I cannot believe that the rate of abortion in this country is in any way morally acceptable. We are rightly appalled by the abuse we see of individual children, but nationally we remain largely silent about the wiping out of villages filled with children week in and week out. Secondly, I found the debate last week on human embryology fascinating. While the position 1 took on the subject was rejected by the majority, it was, nevertheless, a huge privilege, and one I shall never forget, to be in this Chamber to listen to and take part in that debate. I want to add some figures from that debate to this one. Between 1991 and 1998 almost one quarter of a million embryos up to the age of 14 days were disposed of as a result of decisions taken in IVF treatment. In that debate I argued that there was a step change going on in the way we human beings now perceive ourselves. I argued, and would continue to argue, that for the moment the utilitarian philosophy in our nation that perceives human life as either a useful or useless commodity has won the day. I shall return to that matter in a moment. Thirdly, a fortnight ago in this Chamber we had a ministerial Statement about the treatment of corpses in a mortuary chapel in a hospital in Bedford. We were told that an inquiry would be held and that the incident was shocking. I welcome the inquiry; I agree it was shocking. In this Prayer I have linked three apparently unrelated topics. I have done so deliberately because in each of them it seems to me that we see evidence of a downgrading of the concept that life has sanctity. The powerful Judaeo-Christian concept that we are made in the image of God, which has shaped our society for thousands of years, has now been pushed to the very margins of our consciousness. The sanctity of human life, a concept which philosophically links us as humans to some eternal absolutes, is under such serious pressure that, as a concept, it is being placed in a museum cupboard for inspection in a curiously detached way—forgive the phrase—by generations yet to come. I believe that loss has consequences which we are so far unwilling to face, but which are frightening. I now confess that I face a dilemma. I have a serious ethical problem with tonight's debate. I am genuinely alarmed by the shifts going on in our society which will lead us to a future where life of any age is seen as mechanistic and where the worth of human life is judged in utilitarian ways. I raise the question: is not involuntary euthanasia found along that very same spectrum? However, in this debate, I am prepared to acknowledge that the morning-after pill may be the lesser of two evils. Better this form of contraception than a steady rise in abortion. Yet it would be disingenuous in the extreme to suggest that the morning-after pill will have only positive benefits. I suspect that the rise in sexually transmitted diseases will be considerable. I should not like to be the CEO of a pharmaceutical company or a chemist chain when the first litigation arises over what a pharmacist may or may not have said to a young woman who may or may not have been 16 years of age. Therefore, I find myself absolutely caught. I want to convey very serious concern that the result of well-intentioned legislation is that the sanctity of life is being eroded at a dangerous pace and with potentially dangerous consequences. At the same time, I cannot but agree that the morning-after pill is the lesser of two evils. In those circumstances the clear message is that far more effective sexual education is needed. I have been a teacher and heard that cry for the past 30 or 40 years. But we must not be naive either. Many of the young people I once taught who became pregnant were desperate to have a baby. They wanted something to love and someone who would love them unconditionally because their own lives were so full of despair, self-neglect and they lacked self-worth. Here is the difficulty. In order to help those young people we will offer a pharmaceutical solution which will play a part in creating conditions in which the sacredness, nobility and purpose of human life is inevitably downgraded. I am looking for a concerted national campaign to increase the sense of the sacredness of human life; which will increase the sense of self-worth among many young men and women; which will support and encourage all those young people who genuinely do not want to give in to peer or media pressure and who find adults copping-out of their moral responsibility to guide them; and I want something which will recognise that our moral sensibilities about human life are being trampled over with extraordinary lack of concern for the potential consequences for individuals and our nation.
My Lords, we have had an excellent debate tonight. I intend to be extremely brief in replying from these Benches. My colleagues on these Benches will be deciding, as individuals, whether to support the noble Baroness in her Prayer against these regulations. I suspect, however, that few of them will be convinced by the arguments of the noble Baroness, sincerely though her arguments were made.I want to emphasise that, whatever the temptations, tonight's debate is not about the availability of emergency contraception to young girls without their parents' consent or about the limited number of pilot schemes in certain health action zones under what is known as a patient group direction from local GPs. It is not about the quality or quantity of sex education. Indeed, it is not even about the Government's strategy for teenage pregnancy, important though all these issues are. It is simply about the availability in pharmacies of Levonelle-2, the emergency contraception product. First, what is the product? The noble Lord, Lord Patel, made the action of the product very clear, together with the fact that it does not induce abortion. That is not the action of the product. Levonelle-2, however, is clearly more effective and has fewer side effects than the previous emergency contraception products, in particular PC4. Research sponsored by the World Health Organisation has clearly shown that. Clinical trials show that the earlier it is used, the more effective it is. As the noble Baroness, Lady Gould, so cogently pointed out, that emphasises how important early access to it is. As the noble Baroness, Lady Massey, pointed out, it is not always easy to have that early access. The retail price of the product will be £19.99. It will hardly be an impulse buy. In my terms, it is rather expensive. I refer now to the process for the approval of Levonelle-2. The Committee on Safety of Medicines and the Medicines Commission have advised that the medicine is safe for pharmacy sale. This advice and the results of a public consultation were put to the Department of Health which approved the change. What is the role of the pharmacist? Pharmacy status for emergency contraception means that any pharmacist who wishes to do so can supply according to the relevant guidelines after having obtained appropriate information from customers. Comprehensive guidance on best practice for the supply of emergency contraception has been sent to all pharmacists by the Royal Pharmaceutical Society and the Pharmaceutical Society of Northern Ireland. That guidance includes the question of supply to under-16s. This guidance is supported by training provided by the Centre for Postgraduate Pharmacy Education. Those are all responsible steps to have put in place. I am sure that the Royal Pharmaceutical Society will make sure that the supply is carried out in the appropriate fashion. I welcome the decision by Superdrug to discontinue sales over the Internet since I do not believe that is the way in which this product should be sold. I believe that it should be sold through pharmacies. I refer next to some of the questions raised in the debate. It has been said that the wider availability of emergency contraception will encourage promiscuity. I have not heard any evidence tonight to suggest that wider availability of Levonelle-2 will encourage promiscuity. What evidence is there that this will adversely affect the level of sexually transmitted diseases, a major problem? We have seen from recent figures, whether for chlamydia or AIDS/HIV, that these diseases, should be taken extremely seriously. The answer lies in better sex education, not in banning emergency contraception. What evidence do we have that pressure will be put on young girls to have unprotected sex? That is purely anecdotal, drawn from individual experience. I know of no paper which has demonstrated that to be the case. The information from pilot schemes where emergency contraception is available from pharmacies under patient group directions indicates that this emergency contraception is being sought mainly after failure of contraception. The data show that women aged 20 to 29 years are by far the greatest users. As the noble Lord, Lord Patel, said, they account for 53 per cent of users. Women aged 16 to 19 years old comprise 22 per cent. and women aged 30 to 40 years old comprise 17 per cent of users. Very few under-16 year-olds asked for emergency contraception via this route. The right reverend Prelate the Bishop of Southwark had it absolutely right, in my view, in his analysis of the benefits of the current pilot scheme in Lambeth, Southwark and Lewisham. I live in the same health authority as the right reverend Prelate. Certainly, the benefits vastly outweigh the disadvantages or the reservations. The remainder of requests are made by women over 40 years of age. This profile is confirmed by the Department of Health's statistics that show that most abortions are performed on women in their 20s rather than on teenagers. This suggests that the take-up of the pharmacy product will be among the more mature age group. Effectively, we are giving older women the freedom to control their own lives so that they are able to avoid abortion. My noble friend Lord Carlile of Berriew made this point: it is a matter of choice for women. What evidence is there that emergency contraception leads to multiple use? All those concerned in the development and marketing of Levonelle emphasise that it should not be seen to be an alternative to long-term reliable forms of contraception. Moreover, a recent British Journal of Family Planning paper which studied over 15,000 women taking emergency contraception showed no significant trend to multiple use. My noble friend Lady Walmsley made it quite clear why, physically, that is so. In conclusion, there are legitimate concerns about unlawful supply to under-age girls. I hope that the Minister can give assurances about the strength of the guidance to pharmacists and how this will be enforced. The product is a safe and effective method of preventing pregnancy where a woman has had unprotected sex or something has gone wrong with her usual method. The benefits for the older age group vastly outweigh the problems of access by the under-16s. This is not a measure principally directed at teenage pregnancy rates. Pharmacy supply will be a very welcome additional route for women to access emergency contraception with minimum disruption to their work or family lives. I do not believe that by simply being available at pharmacies it will encourage a casual attitude to sex. There is absolutely no evidence of this. On the contrary, it is another step to ensuring that only children who are wanted are born in this country. The noble Lord, Lord Davies of Coity, added, absolutely rightly in this respect, that if passed this Prayer would not help older women or the young, as the noble Baroness claims; it would penalise them. As my noble Lady Walmsley said, it is vital that women should have access to this emergency contraception. Certainly I shall not be supporting the noble Baroness, Lady Young, in her Prayer. I prefer to support the views of the Family Planning Association, the Royal College of General Practitioners, the Royal College of Nursing, the Royal Pharmaceutical Society and the Community Practitioners and Health Visitors Association, let alone those of the vast majority of adults in this country. I hope that my colleagues will join me in voting against the Motion
My Lords, it is a pleasure and at the same time a difficult job to follow my noble friend Lady Young in speaking to the Motion. I find myself, as ever, deeply impressed by what she said. We should not doubt for an instant that she speaks for very many ordinary, moderate people who are deeply worried by the order before us and its implications. I cannot hope to better her in arguing the case she has put.I shall concentrate on a few particular aspects of this issue which cause me profound disquiet. They are aspects that relate to patient care. To many it might seem odd that a measure of this sort which has met with the approval of the Royal Pharmaceutical Society, the BMA and the Royal College of Nursing could possibly be considered detrimental to patient care. Clearly, to take issue with such reputable bodies is not something to be undertaken lightly or wantonly. We all agree that pharmacists represent an under-utilised resource in primary care. Pharmacists are highly skilled, professional people. It is absolutely right that we should look for ways of broadening and developing the service they provide for patients. However, this does have to be done in a manner that is safe. The point at issue here is whether the direct supply of the morning-after pill by pharmacists is something that can be done both safely and ethically in all cases. Reading the pharmaceutical press, as I do each week, it is apparent that pharmacists are alarmed at what is being asked of them and so are some members of the medical profession. Part of their concern can be summed up as follows. The more that young women at risk of an unwanted pregnancy are enabled to bypass their doctor or avoid even a cursory clinical examination, whether by a doctor or a nurse the more risk they run of damage to their health. My noble friend Lady Young mentioned sexually transmitted diseases. The statistics published last week saw large increases in gonorrhoea and chlamydia during the year 2000 as well as the highest ever number of new cases of HIV. The highest rates of chlamydia are in 16 to 19 year old females and 20 to 24 year old males. The diagnostic rates for gonorrhoea were also the highest in those age groups. The rise in diagnoses in young females suggests that there has been a significant increase in heterosexually transmitted gonorrhoea. If one goes into a chemist shop to buy emergency contraception after having unprotected sex there is no one to pick up the warning signs of sexually transmitted disease. If chlamydia is allowed to develop—and it does so insidiously—it can render a woman sterile. It is important for the country as a whole, and vital for patients, that there should be effective monitoring and reporting of all sexually transmitted disease. There is not a shadow of doubt in my mind that this order will hinder that process. Pharmacists cannot hand out the pill without questions being asked. There is an extensive list of questions that the Royal Pharmaceutical Society has devised which chemists are recommended to follow. But the sheer length of the list is enough to make one question the wisdom of what is supposed to happen. The pharmacist must first ascertain from the woman what circumstances have led her to believe that she needs the pill. He must then try to determine whether or not she is already pregnant. From the answers he gets he must be able to distinguish chlamydial infections, which can cause bleeding between periods, from pregnancy or miscarriage. He must find out whether the woman has used the morning-after pill since her last period. He must find out whether she is taking any of 11 drugs which react adversely with the pill. He must ascertain whether the woman has a severe liver dysfunction or whether she has any condition associated with the malabsorption of drugs such as Crohn's disease. He must ask whether she has previously experienced any allergic reaction to oral contraceptives. And, crucially, he must be satisfied that the patient in front of him is over the age of 16. Now, chemists have been told that in cases of doubt on any of these questions, they should refer the patient urgently to a GP or family planning service and not dispense the morning-after pill. I do not see, and nor do many responsible pharmacists, how it is possible for a pharmacist, during a brief interview, to be satisfied that by dispensing the pill to a particular woman he would not be running a risk with that patient's health. Pharmacists, however conscientious, are not permitted to perform a physical examination of the patient. They cannot contact the patient's GP. They must rely on the accuracy of the answers they get to a checklist of questions. It is quite interesting that one of the main risks of taking the morning-after pill— which is the risk of having an ectopic pregnancy—is not even mentioned in the guidance prepared by the Royal Pharmaceutical Society. Nor does it mention some of the other warnings contained in the patient information leaflet from the manufacturers; for example, that the pill should not be taken in cases of high blood pressure or diabetes or where there is a history of breast cancer. Responsible pharmacists will find all this out. But this is the point. Patients are entirely dependent on the ethical and professional standards of individual pharmacists. There is no requirement for a pharmacist to undergo training in order to be able to supply and dispense this medication. Specific training is entirely voluntary. Even those pharmacists who wish to receive training have in many cases not yet received it. Perhaps that should not surprise us. Pharmacists were not consulted on whether the morning-after pill should be available nation-wide over the counter. The first they heard of it was when the Government announced it to the press. It does not take a genius to work out that, with pharmacists demonstrating different degrees of assiduousness and different degrees of training in regard to the protocols to which they are meant to adhere, patients will simply gravitate to the chemist's shop where they know there will be the least hassle. And that is where the trouble is likely to begin. I had a brief conversation with the noble Lord, Lord Clement-Jones, last week in which he indicated that I would be unlikely to persuade him that opposing the order made any sense at all. Well, I invite him to consider the point that I am now making. It is not what happens when everything goes right with an over-the-counter supply that I am worried about. It is the unintended consequences when things do not go as they should. Many noble Lords will have seen the article in the Daily Mail a few days ago, which described how a girl of 15 was able to obtain the morning-after pill from two chemists in London with the minimum of questioning. She was not asked her age. One of the chemists took only two minutes to hand over the pill to the girl. On the other hand, another chemist did ask her age and took considerable trouble over the interview before referring the girl both to her GP and to her parents. The point here is that while the Royal Pharmaceutical Society without doubt approached this whole issue in a completely responsible and professional way the same cannot necessarily be said of all its members.
My Lords, I am sorry to interrupt the noble Earl and I do so reluctantly. I must declare an interest as an honorary member of the Royal Pharmaceutical Society. My listening to the noble Earl suggests that his view is that the Royal Pharmaceutical Society is, first, irresponsible in strongly advocating this intervention and, secondly, does not speak for the overwhelming majority of its members. Does he accept that the Royal Pharmaceutical Society is completely responsible in what it says and does speak for the overwhelming majority of its members? Will he say that in terms, speaking from the Opposition Front Bench?
My Lords, I believe that the Royal Pharmaceutical Society has adopted an entirely responsible approach. I could pick holes in the detail of the guidance it has given. I certainly accept that it is acting with the approval of the majority of its members but I am also saying that a significant minority of its members—the noble Lord will know this from reading the pharmaceutical press—are worried and concerned for the reasons that I am now giving.It was not altogether surprising that the chairman of the BMA prescribing committee, Dr George Rae, said in response to the Daily Mailstory:
The dangers arise from any failure to ascertain vital information from the patient and from the absence of the kind of care which, with the greatest respect to the pharmaceutical profession, only a doctor or a nurse can provide. I have already run through the list of medical contra-indications, any one of which renders the supply of the pill unsafe. I have not read out the long list of other items that a chemist is supposed to cover with each patient—warnings about side effects, about the need to repeat the dose if you vomit within three hours of the first one, about what to do if you are taking an ordinary oral contraceptive as well, or if you are breast-feeding. The list goes on. Responsible chemists will follow it, and it is to be hoped that patients will understand it all. But it is no substitute for seeing a doctor or a nurse. There are just too many pitfalls. Before I finish, let me make one thing clear. The issue of unwanted pregnancy and of abortion are ones I understand completely. I understand about busy doctors' surgeries and the embarrassment that girls feel in going to their doctor. But in the light of the risks I have identified, we believe that a better alternative to making the morning-after pill available over the counter would be to allow practice nurses to prescribe it. That measure of deregulation would allow greater flexibility for patients yet keep emergency hormonal contraception within the context of a general practice setting. In our judgment, the order compromises patient care, I urge all noble Lords to reject it and in so doing allow the Government to think again."The whole thing is turning into a bit of a hotchpotch and it needs looking at again. I do not think it is properly thought through. We must avoid the fragmentation of health care which could be dangerous".
Lord Hunt of Kings Heath
My Lords, I am very glad to have the opportunity of responding to the debate on the order. We have certainly had a wide-ranging debate. I listened with great interest to the right reverend Prelate the Bishop of St Albans as he touched on a number of moral, religious and ethical questions. But I want to start with some fairly straightforward points about the background to the order.I believe that women and their partners have the right to make responsible choices about the size of family they have. As noble Lords have pointed out, the effectiveness of hormonal emergency contraception is greatest the sooner it is taken after unprotected intercourse. The option of rapid availability from a pharmacist without the need for attendance at clinic or GP surgery is therefore to be seen as a welcome addition to responsible family planning measures. There has been positive support for pharmacy availability from a wide range of professional bodies. I say to the noble Earl, Lord Howe, that pharmacists are professional and responsible and will receive full guidance in the safe supply of this medicine from the Royal Pharmaceutical Society of Great Britain. Pharmacy supply will improve and build on existing links between pharmacists and family planning services. This network will help to ensure that the under-16s and other women who need to see a doctor for contraceptive advice can be referred on quickly. The background to the order is an application by Medimpex UK to change the legal classification of Levonorgestrel. The application was to change its legal classification from that of a prescription-only status to that of a pharmacy status, which means that it can be sold over the counter by a pharmacist. Under UK law, a medicine is legally classified as "prescription only" if it needs to be supplied under the supervision of a doctor to ensure that it is used safely. It can be sold in pharmacies only if the legal criteria for listing medicines as prescription only no longer apply. The Government are committed to making medicines more widely available where it is safe to do so. The most effective way of doing that is through the reclassification procedure for licensed medicines as I have described. The UK has considerable experience in this regular and routine procedure. I pay tribute to the last government, who, in 1992, established the well-ordered procedures to enable this to happen. As a result of that action, more medicines have gone down this route and the public have benefited enormously. It is down this route that Medimpex UK has gone. When the company applied to the Medicines Control Agency, a standard procedure was followed. First, the Medicines Control Agency assessed the safety of the medicine in use in the light of the legal criteria for prescription only status. Then the application was referred to the advice of the Committee on the Safety of Medicines. That committee recommended that the order should be amended to allow the nonprescription supply of this medical product. The matter was then put out to public and professional consultation. Virtually all the main medical and pharmaceutical bodies which responded were in favour of a move to pharmacy supply. Furthermore, they did not raise any concerns about the safety of supply in a pharmacy setting. Both the Committee on the Safety of Medicines and the Medicines Commission carefully considered all the available evidence. They advised that Levonelle can be supplied safely under the supervision of a pharmacist for emergency contraception. Perhaps I may turn to the safety issues. Considerable experience of worldwide use has been gained. In the UK the active ingredient has been available in other contraceptives and HRT products for 30 years, although only more recently as an emergency contraceptive. It has been used for emergency contraception in other parts of the world since the 1980s. In France it has been available from pharmacists since 1999. I understand that Norway and Portugal have since agreed to do the same. I am advised that the side-effects of this medicine are usually mild and short-lived. The most common side-effects reported from clinical trials are vomiting and nausea. The committees therefore considered that the medicine had an acceptable safety profile to supply under the professional supervision of a qualified pharmacist and that women would be able to use the product correctly. Perhaps I may now turn to the safety issue in relation to women aged under 16. I have been asked for reassurance on this point and I am happy to give it. The most important point to make here is that, while under this order the product can be bought from a pharmacist only if the person is aged 16 years or older, the same product can be prescribed by a doctor with no age limits. There is no biological significance to the age limit of 16 years and over. Indeed, the original licensing of the prescription product used evidence from a large, randomised control study that included women under 16 in the trial. Having considered the safety issues and on the basis of the advice received from the Committee on the Safety of Medicines and the Medicines Control Agency, we have laid the order before the House tonight. In support of this change, the Royal Pharmaceutical Society has set professional standards and developed comprehensive guidance for pharmacists on the retail supply of emergency contraception. I should say to the House that it is primarily the responsibility of the Royal Pharmaceutical Society to enforce the Medicines Act in this area. It is the regulatory body. While pharmacists are already familiar with the product through prescription supply, additional training is being provided, a distance learning programme is being sent to all pharmacists ahead of the product launch and workshops are also available. The noble Earl, Lord Howe, referred to the minimum standards set by the Royal Pharmaceutical Society. Those are in place to ensure that pharmacists have sufficient knowledge of emergency hormonal contraceptives to deal with requests personally and to decide whether to supply the product or to refer; to ensure that they provide all the necessary advice and information about the medicine to the patient; to handle requests sensitively, respecting a woman's right to privacy; only in exceptional circumstances to supply the product to a person other than the patient; and wherever possible to take reasonable measures to inform the patient about regular methods of contraception, disease prevention and sources of help. I do not share the concerns expressed by the noble Earl, Lord Howe. The pharmacy profession has had considerable experience in the move of medicines from prescription only to pharmacy. I believe that pharmacists are ideally placed to provide advice on regular methods of contraception and local family planning services to help women avoid the use of emergency contraception in the future. Furthermore, I am satisfied that the overall rigorous approach to regulation within the pharmacy profession will ensure that sufficient safeguards are put in place.
Lord Mackay of Clashfern
My Lords, I wonder if the noble Lord could develop that point? Can he tell the House whether the supply over the Internet of this drug by Superdrug was lawful in terms of the standing regulations?
Lord Hunt of Kings Heath
My Lords, I understand that it is lawful to supply over the Internet, but the issue is whether in so doing, the company would follow the minimum standards laid down by the Royal Pharmaceutical Society. If it did not follow those minimum standards, a pharmacist involved in Internet supply would fall foul of the regulatory provisions set by the Royal Pharmaceutical Society. On that basis, the intention to supply over the Internet has been withdrawn until discussions can take place between Superdrug and the society.This order will he welcomed by many women. A number of noble Lords referred to the 800,000 women who were prescribed emergency contraception in 1999. The medicine is far more effective the earlier it is taken. Waiting to see a doctor may cause delay and therefore reduce the chance of it working. Providing for direct sale through pharmacies will be an important additional route, in particular at times when traditional services may not be available. That is a very pertinent point. Huge numbers of women in this country will know the frustration of trying to track down emergency contraception over the weekend after contraception has let them down. Much of the debate has focused on under 16 year-olds and the feeling that this will encourage teenage promiscuity. I should like to place on the record the fact that the company which holds the licence for the product applied for the age limit of 16 years for pharmacy availability and that the expert advisory committees accepted that that was reasonable. This is not the only pharmacy-supply medicine that has an age restriction and I am confident that pharmacists have the experience and judgment to determine which clients should be referred to a doctor. The guidance from the Royal Pharmaceutical Society reflects that position. It states that,
The point I should like to make is that every day, pharmacists have to make judgments in their pharmaceutical outlets. The members of that profession are extremely well trained and I believe that they can be expected to operate the law effectively. I do not believe the suggestion that this will all encourage promiscuity, for the following reasons. First, there is evidence from a study in Scotland, where women were given advance prescriptions for emergency contraception to be kept at home. It found that women did not change their sexual behaviour or their use of regular contraception. A further four-year study of 95,000 women aged 14 to 29 found that repeated use of emergency contraception was rare, and that many women used regular contraception for the first time after the use of emergency contraception. Indeed, as the noble Baroness, Lady Walmsley, suggested, we know that the regular use of emergency contraception disrupts a woman's menstrual cycle, which means that she will have irregular periods and breakthrough bleeding. This will be unacceptable to most women, and they will quickly seek medical advice. On top of that, there is the matter of cost. I tell my noble friend Lord Rea that the cost of the product, at £19.99, is a matter for the company concerned, but, whatever one's view on the price, I think we can all agree that it will be a deterrent to regular use. I share the view of my noble friend Lady Gould of Potternewton on the balance to be arrived at between access to emergency contraception and a potential abortion; as the right reverend Prelate the Bishop of Southwark suggested, one-off use of emergency contraception may prevent an abortion. Noble Lords have tonight referred to the very high figures of abortions being performed in this country. They are very high, and this Government remain concerned about that. If emergency contraception can help to reduce the level of abortions, surely it is to be welcomed. The noble Baroness, Lady Young, talked about parents. Recent research among parents, Commissioned by my department, found that over 80 per cent supported the provision of confidential contraceptive advice for the under-16s. Of course, I fully recognise the role that parents play in supporting their children in sex and relationship education. Indeed, it is pretty clear that the more open parents are about sexual issues with their children, the later those children become sexually active and the more likely they are to use contraception if they do become sexually active. But we have to face the fact that not all parents manage to talk to their children. Indeed, one study showed that one third of girls had not been told about periods before they started. So there is much that we have to do in relation to health education generally. Good comprehensive sex and relationship education can help young people delay first sex and make them more likely to use contraception when they do become sexually active. Countries that report low or falling rates of teenage parenthood all include sex education as part of their overall programme. That is why the Government have issued new guidance to schools to improve the quality of sex and relationship education, to give young people the information and skills they need to resist peer pressure to have early sex and to negotiate safe and responsible relationships. As my noble friend Lady Massey of Darwen said, there is plenty of moral value to the guidance, including that pupils should be taught about the nature and importance of marriage for family life and bringing up children. With regard to the issue of sexually transmitted infections, there is of course concern about their level in this country, and the Government are committed to doing all they can to reverse that trend. But, as the noble Baroness, Lady Walmsley, suggested, no method of contraception is 100 per cent effective, and if an accident happens emergency contraception is an effective method of preventing pregnancy. I have seen no evidence to suggest that the availability of emergency contraception would lead to a rise in sexual disease. This has been an extremely interesting and wide-ranging debate. I share with the right reverend Prelate, the Bishop of St. Albans, a sense of the sacredness of human life and the need for us to encourage self-regard in young people. But I believe that what we are talking about tonight is a sensible and entirely justified course of action, reached after very careful consideration and after the proper processes have been gone through, the processes laid down by the party opposite in 1992. It is action endorsed by the Medicines Control Agency and the Committee on the Safety of Medicines, which advised that this product can be safely supplied under the supervision of a pharmacist for emergency contraception; action supported by the BMA, the Royal College of General Practitioners, the RCN, the Royal Pharmaceutical Society and many other responsible bodies; and action which will encourage improved links between pharmacists and family planning services and help to ensure that under-16s and other women who need to see a doctor for contraceptive advice can be referred on quickly. Surely women have the right to take advantage of the option of rapid availability from a pharmacist without the need for attendance at the GP or family planning clinic. Surely women and their partners have the right to make responsible choices about the size of their family."Pharmacists should make every reasonable effort to satisfy themselves that clients are aged 16 or over. Pharmacists should ensure that where they believe a client to be under 16, the request is dealt with sympathetically and the client is offered appropriate help and support to enable her to obtain emergency hormonal contraceptives by another route".
I hope that the House will reject the Prayer.
My Lords, the noble Lord the Minister has said nothing about the Northern Ireland anomaly, although the noble Baroness, Lady Young, raised the point. The age of consent in Northern Ireland is 17, not 16. Is it not therefore the case that a chemist in the Province who supplies the pill to a 16year-old may be guilty of aiding and abetting a criminal offence?
Lord Hunt of Kings Heath
My Lords, that clearly is a matter for the Northern Ireland Assembly and the Northern Ireland Health Department. But I can tell the noble Lord that the decision has the full support of the Northern Ireland Health Department, and, as the noble Baroness, Lady Young, suggested, was signed by the Northern Ireland Health Minister. That Minister raised no objections, and I do not believe that that point impacts on the decision made in the order.
My Lords, I should first like to thank very much those who have supported me this evening, and, as always, to thank the noble Earl, Lord Longford, who speaks with great moral authority. I only wish that I were as good a Christian as he is. We should all take note of his courage and sincerity. I also thank my noble friend Lord Elton for what he said. He was the one speaker who drew attention to the importance in all this discussion of love, commitment, responsibility and marriage. It is extraordinary how those four words are left out of every debate.The two right reverend Prelates who have spoken will not be surprised to hear that I am very disappointed by what they said. I am bound to say to the right reverend Prelate the Bishop of Southwark that to argue that the best can be the enemy of the good, and that therefore we should not have the best, seems to me an extraordinary moral argument. But I am not here to discuss that. I was even more surprised to hear that the theological position of supporting the lesser of two evils is a good one to take up. When the Pope went to Ireland he was told that the IRA was protecting the Roman Catholic population against Protestant oppression, and his reply was quite simply "Murder is murder". We need to keep a firm hold on moral principles when we are talking about these matters. We have had a very full debate. I started my remarks by saying that I thought there had been a great deal of misunderstanding about the issue. As I listened to the debate, I realised that those words were rather truer than I thought when I wrote them. We have heard a great deal, at great length, with great emphasis and great force, about the importance of contraceptives, about a woman's right to choose and that every baby should be a wanted baby. It was as though somehow I was arguing against any of these principles. As I made abundantly clear at the beginning of my remarks, I am well aware that the morning-after pill has been available since 1985; that emergency contraception has been available to women since 1985. It is not new. I made it perfectly clear that if my Prayer against the order carries this evening, that situation will be the same; nothing will change. Listening to many of the speeches today, one would think that I was saying that emergency contraception would never be available again. I have not said that; I do not think it; it is simply not the case. We are talking about whether or not these emergency contraceptive pills should be available across the chemist's counter. At this point I remind your Lordships of what my noble friend Lord Howe said about the role of pharmacists. Of course I recognise that the Royal Pharmaceutical Society has laid down good guidelines—I would expect it to. I would expect pharmacists to do their best. But, as my noble friend Lord Howe pointed out, the reality is that we have all seen the queues in the chemist's shop. I do not know where all this consultation will take place. I looked into my local chemist in preparation for this debate to see where it might take place. There did not seem to be anywhere but the most public place, in front of the counter. Perhaps other chemists are different. The questions that the chemist should ask are very important. We are putting at risk the health of young girls. I do not want that responsibility. We need to take these matters very seriously. The guidelines are correct but, as we all know, guidelines are not always adhered to, especially in a busy chemist's shop late in the evening. I ask the House to recall, very clearly, what my noble friend Lord Howe said. Perhaps I may conclude by answering two or three points, which I believe to be important. I was very sorry that the noble Lord, Lord Hunt, kept referring to 16 year-olds and under as women. This illustrates the attitude of the Government. In law, they are not women, they are children—and we should recognise what we are talking about. I am sorry that he thought there would be no increase necessarily in sexually transmitted diseases as a result of increased use of the morning-after pill. Of course the morning-after pill encourages unprotected sex—that is one of its purposes. That is one of the reasons why young people look to it. Finally, I should like to make a point about parents. Some of the talk about parents has been rather casual. One of the reasons—not the only reason—that we have one of the highest rates of teenage pregnancies in this country is, of course, the high rate of marriage breakdown and the undermining of family life. Taking steps which undermine family life is very serious. I shall be perfectly frank, I do not like the fact that school nurses can provide the pill without parents knowing. What is being said to parents is a kind of general, blanket question: "Would you like your children to be helped to understand sex, contraception and all the difficulties of growing up"? Most parents think it is a good idea. What they do not know is that the result of all this is that somebody, without telling them, is giving their child the morning-after pill and contraceptive advice. We are contriving and conniving at undermining parents. Whatever I may think about it—and I have been a parent—I know that I would never want for other people's children what I would not want for my own. One thing we should have learnt is the importance of keeping teachers, parents and doctors all speaking with one voice to their children. One of the troubles that we have today is that they do not do so. There are a lot of people in the country—I mention, once again, representatives of the Muslim community, who have been to see me on more than one occasion— who are very concerned about this matter. I would not have taken up the time of your Lordships' House today, or, indeed, on any other occasion, if I did not believe that in this world today—which, the debate has shown, is immensely confusing and uncertain for young people, with terrible tragedies waiting to happen, with the teenage pregnancy rate and so on— this move to give the right to chemists to supply the pill over the counter is an opportunity for one more ratcheting up of society. I do not believe it will help people. Women need the help; they have got the help. We should pray against this order today in the interests of young people.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 177.
Division No. 1
|Anelay of St Johns, B.||Craig of Radley, L.|
|Astor of Hever, L.||Crathorne, L.|
|Attlee, E.||Dean of Harptree, L.|
|Bell, L.||Denham, L.|
|Bellwin, L.||Dixon-Smith, L.|
|Blaker, L.||Eden of Winton, L.|
|Blatch, B.||Elliott of Morpeth, L.|
|Boardman, L.||Elton, L.|
|Bradford, Bp.||Feldman, L.|
|Bridgeman, V.||Ferrers, E.|
|Brougham and Vaux, L.||Fitt, L.|
|Byford, B.||Fookes, B.|
|Campbell of Croy, L.||Gray of Contin, L.|
|Carr of Hadley, L.||Greenway, L.|
|Chalfont, L.||Griffiths of Fforestfach, L.|
|Cope of Berkeley, L.||Harris of High Cross, L.|
|Harris of Peckham, L.||Pilkington of Oxenford, L.|
|Hayhoe, L.||Platt of Writtle, B.|
|Henley, L. [Teller]||Plummer of St. Marylebone, L.|
|Higgins, L.||Pym, L.|
|Holderness, L.||Quinton, L.|
|Home, E.||Rawlinson of Ewell, L.|
|Hooper, B.||Rees, L.|
|Howe, E.||Renton, L.|
|Hunt of Wirral, L.||Richardson of Duntisbourne, L.|
|Hylton, L.||Roberts of Conwy, L.|
|James of Holland Park, B.||Ryder of Wensum, L.|
|Kimball, L.||Seccombe, B.|
|Kingsland, L.||Shaw of Northstead, L.|
|Knight of Collingtree, B.||Sheppard of Didgemere, L.|
|Liverpool, E.||Skelmersdale, L.|
|Longford, E.||Skidelsky, L.|
|Lyell, L.||Stevens of Ludgate, L.|
|McColl of Dulwich, L.||Stewartby, L.|
|Mackay of Clashfern, L.||Stoddart of Swindon, L.|
|Marlesford, L.||Strange, B.|
|Mayhew of Twysden, L.||Strathclyde, L.|
|Miller of Hendon, B.||Tebbit, L.|
|Molyneaux of Killead, L.||Thatcher, B.|
|Monson, L.||Tombs, L.|
|Mowbray and Stourton, L.||Trumpington, B.|
|Murton of Lindisfarne, L.||Vivian, L.|
|Northesk, E.||Waddington, L.|
|Oxfuird, V.||Wade of Chorlton, L.|
|Palmer, L.||Walker of Worcester, L.|
|Park of Monmouth, B.||Wilcox, B.|
|Pearson of Rannoch, L.||Young, B. [Teller]|
|Ackner, L.||Davies of Coity, L.|
|Acton, L.||Davies of Oldham, L.|
|Addington, L.||Dean of Thornton-le-Fylde, B.|
|Alli, L.||Desai, L,|
|Amos, B.||Dholakia, L.|
|Andrews, B.||Dubs, L.|
|Archer of Sandwell, L.||Elder, L.|
|Ashton of Upholland, B.||Evans of Parkside, L.|
|Avebury, L.||Evans of Temple Guiting, L.|
|Bach, L.||Falconer of Thoroton, L.|
|Barker, B.||Falkender, B.|
|Barnett, L.||Falkland, V.|
|Bassam of Brighton, L.||Farrington of Ribbleton, B.|
|Berkeley, L.||Faulkner of Worcester, L.|
|Biffen, L.||Filkin, L.|
|Billingham, B.||Flather, B.|
|Blackstone, B.||Fyfe of Fairfield, L.|
|Blackwell, L.||Gale, B.|
|Borrie, L.||Gardner of Parkes, B.|
|Bradshaw, L.||Geraint, L.|
|Bragg, L.||Gibson of Market Rasen, B.|
|Brooke of Alverthorpe, L.||Gilbert, L.|
|Brookman, L.||Goldsmith, L.|
|Brooks of Tremorfa, L.||Goodhart, L.|
|Burlison, L.||Gordon of Strathblane, L.|
|Butler of Brockwell, L.||Goudie, B.|
|Carlile of Berriew, L.||Gould of Potternewton, B.|
|Carlisle of Bucklow, L.||Graham of Edmonton, L.|
|Carter, L.[Teller]||Greengross, B.|
|Castle of Blackburn, B.||Grenfell, L.|
|Chandos, V.||Hamwee, B.|
|Clement-Jones, L.||Hardy of Wath, L.|
|Clinton-Davis, L.||Harris of Haringey, L.|
|Cobbold, L.||Harris of Richmond, B.|
|Cohen of Pimlico, B.||Haskel, L.|
|Colwyn, L.||Hattersley, L.|
|Craigavon, V.||Hayman, B.|
|Crawley, B.||Hilton of Eggardon, B.|
|Currie of Marylebone, L.||Hodgson of Astley Abbotts, L.|
|Darcy de Knayth, B.||Hogg, B.|
|David B.||Hogg of Cumbernauld, L.|
|Hollis of Heigham, B.||Ramsay of Cartvale, B.|
|Hooson, L.||Randall of St. Budeaux, L.|
|Howells of St. Davids, B.||Razzall, L.|
|Howie of Troon, L.||Rea, L.|
|Hoyle, L.||Reay, L.|
|Hughes of Woodside, L.||Redesdale, L.|
|Hunt of Kings Heath, L.||Rendell of Babergh, B.|
|Hutton, L.||Rennard, L.|
|Irvine of Lairg, L. (Lord Chancellor)||Richard, L.|
|Rodgers of Quarry Bank, L.|
|Islwyn, L.||Rodgers of Riverside, L.|
|Jay of Paddington, B. (Lord Privy Seal)||Roll of Ipsden, L.|
|Jeger, B.||Sainsbury of Turville, L.|
|Judd, L.||St Albans, Bp.|
|Kennedy of The Shaws, B.||St. John of Bletso, L.|
|King of West Bromwich, L.||Sawyer, L.|
|Layard, L.||Scott of Needham Market, B.|
|Lea of Crondall, L.||Serota, B.|
|Lester of Herne Hill, L.||Sharp of Guildford, B.|
|Lipsey, L.||Shepherd, L.|
|Lockwood, B.||Smith of Gilmorehill, B.|
|Macdonald of Tradeston, L.||Southwark, Bp.|
|McIntosh of Haringey, L. [Teller].||Stern, B.|
|Stone of Blackheath, L.|
|McIntosh of Hudnall, B.||Symons of Vernham Dean, B.|
|MacKenzie of Culkein, L.||Taylor of Blackburn, L.|
|Thomas of Walliswood, B.|
|Mackenzie of Framwellgate, L.|
|Mackie of Benshie, L.||Thornton, B.|
|McNally, L.||Tomlinson, L.|
|Maddock, B.||Tordoff, L.|
|Mallalieu, B.||Turnberg, L.|
|Mar and Kellie, E.||Turner of Camden, B.|
|Marsh, L.||Varley, L.|
|Massey of Darwen, B.||Walker of Doncaster, L.|
|Merlyn-Rees, L.||Wallace of Saltaire, L|
|Mitchell, L.||Walmsley, B.|
|Morgan, L.||Warner, L.|
|Morris of Castle Morris, L.||Warnock, B.|
|Morris of Manchester, L.||Warwick of Undercliffe, B.|
|Neill of Bladen, L.||Wedderburn of Charlton, L.|
|Newby, L.||Whitaker, B.|
|Nicholson of Winterbourne, B.||Whitty, L.|
|Northover, B.||Wigoder, L.|
|Patel, L.||Wilkins, B.|
|Peston, L.||Williams of Elvel, L.|
|Plant of Highfield, L.||Williams of Mostyn, L.|
|Ponsonby of Shulbrede, L.||Woolmer of Leeds, L.|
Resolved in the negative, and Motion disagreed to accordingly.
Broadcasting (Limit On The Holding Of Licences To Provide Television Multiplex Services) Order 2001
Lord McIntosh of Haringey
rose to move, That the draft order laid before the House on 11th December be approved [First Report from the Joint Committee].
The noble Lord said: My Lords, this order revises the limits set out in paragraph 5 sub-paragraphs (1), (3), (4)(a) and (4)(b) of Part III of Schedule 2 to the Broadcasting Act 1990, as amended. The Secretary of State is empowered to adjust the limits by paragraph 5(5)(a) of Part III of Schedule 2 to the Act.
Perhaps I may take your Lordships back to first principles. What are multiplexes? Of course, we are all aware that we have entered the age of digital broadcasting. The multiplex is a central feature of digital terrestrial television. A multiplex is a block of frequencies that can carry several digital channels. A multiplex enables many more channels to be carried than was previously the case with analogue signals. There are different multiplexes for digital radio and digital television. There are currently six digital terrestrial television multiplexes. Each is capable of carrying at least six television programme services. One of these multiplexes is reserved for the BBC, and the remaining five are licensed by the Independent Television Commission.
The Broadcasting Act 1996 stipulates that no person, which includes a company or business, can hold more than three licences to operate one of these multiplexes. The order raises this limit on multiplex licences that a person can hold from three to six, which is more than the number available. Therefore, it effectively removes the current restrictions on the number of licences that can be held. The justification for doing this is that the limit as it currently stands prevents developments within the industry which the Competition Commission has cleared on competition grounds.
The Competition Commission last year investigated several proposed ITV mergers, involving United News and Media, Granada Media and Carlton. In reaching its decision on which were permissible and which were against the public interest, the Competition Commission decided that the limits on the holding of multiplex licences made no difference to its overall conclusions. However, as the limit may have been exceeded by the mergers then proposed which meant that the groups would have had to sell off—that is, divest—subsidiaries, the Secretary of State for Culture, Media and Sport decided to act to remove the restriction on merger activity, which, in the view of the Competition Commission, was irrelevant in competition terms.
That decision, although taken as a result of the Competition Commission's report, was a neutral one and should not be taken as favouring any one company. The Secretary of State's announcement was made in advance of any final ITV merger activity, when it was still unknown when, or indeed whether, any of the proposed mergers would take place.
As primary legislation would be required to remove the limits from the statute book altogether, the Secretary of State has chosen to make use of a statutory instrument that would have the effect, at least for the present, of removing current restrictions. This route was agreed by the opposition parties in the House of Commons.
The order preserves the scheme of the legislation by stipulating the maximum number of licences that a person can hold and then specifying the extent of the interest which that person may have in additional licences. The scheme of the Act means that to have the effect of removing all restrictions on multiplex ownership, the numbers specified in the order must be higher than the number of licences currently available. Therefore, the order refers to a hypothetical seventh and eighth multiplex.
We now know more about the way that the industry has developed than we did when the legislation was drawn up in 1996. Competition is between, rather than within, digital platforms—that is to say, competition is between satellite, cable and terrestrial platforms, rather than between commercial operators on the digital terrestrial platform. Given the Competition Commission's satisfaction that the current restrictions on the holding of these licences made no difference to their deliberations last year, the limits can safely be adjusted; and, in effect, removed. The principle is supported by the Independent Television Commission.
The order will help digital terrestrial television to develop as a mature, quality platform. I commend the order to the House.
Moved, That the draft order laid before the House on 11th December be approved [ First Report from the Joint Committed].— (Lord McIntosh of Haringey.)
My Lords, I thank the Minister for his customary clear explanation of the order. We support measures that are intended to promote the success of digital terrestrial television and agree with the Government that the current limit on the holding of licences represents an unnecessary obstacle to growth within the industry.As the Minister pointed out, the original intention behind the restriction on ownership of multiplex licences to a maximum of three was benign. It was to encourage competition in the early days of digital terrestrial television. It is a fact now, however, that the market has developed in such a way that the principal competition is, as the Minister said, between platforms delivering broadcast services, rather than between those platforms. I note that the Competition Commission is satisfied that this restriction on multiplex ownership does not raise concerns about competition, and that the limit can be adjusted without harming digital terrestrial television's future as a platform. These Benches therefore support the order.
My Lords, we on these Benches support the order and thank the Minister for explaining it so well. We fully take the points that he has made, in particular that the industry is so much better understood now than it was in 1996. I congratulate the Government and the industry on working so well together. This is an industry that has gathered a momentum that is probably greater than any of us had expected. I look forward to further collaboration of this kind in what is now looking to be a very promising prospect for the industry. There is no change of policy with which we need concern ourselves, and it is a purely technical matter.
On Question, Motion agreed to.
European Communities (Definition of Treaties) (The Convention on Mutual Assistance and Co-operation between Customs Administrations (Naples II)) Order 2001
Lord McIntosh of Haringey
rose to move, That the draft order laid before the House on 14th December be approved [2nd Report from the Joint Committee].
The noble Lord said: My Lords, today's organised criminals are intelligent and sophisticated, whether they are dealing with tobacco, drugs or firearms. They are also as adept at working across national boundaries as they are in one country. To combat such crime, governments must be able to match and surpass the ability of criminals to work across national boundaries. At the special European Council summit in Tampere in October 1999, member states committed themselves to depriving criminals of any hiding place in the European Union. The Convention on Mutual Assistance and Co-operation between Customs Administrations, known as Naples II, will give effect to the necessary practical co-operation in the area of customs. The UK played a leading role in the development of the convention, and so I am pleased to bring this draft Order in Council before noble Lords.
The proposal for a Naples II Convention originated in 1991. The idea was to update the existing 1967 Naples Convention in order to provide a framework for modern cross-border investigation techniques. This framework was seen as desirable, given the creation of the single market on 1st January 1993. While this development served as a boost to intra-EC trade, the removal of border controls presented opportunities for abuse, which have been exploited in an increasingly organised manner by illicit traders and criminal organisations.
The 1967 Naples Convention made provision for mutual assistance between member states' customs administrations through two principal means: the sharing of information on contraventions of customs laws; and the investigation of contraventions on request by another member state's customs administration.
In particular, it allows for Customs officials to appear as witnesses or experts before the courts of other member states, and for customs officers to be present during investigations of contraventions by customs authorities in other member states.
Naples II builds on this by developing the administration and co-ordination of the mutual assistance activities, and by adding several other forms of co-operation. These are: hot pursuit; cross-border surveillance; covert investigations; controlled deliveries; and joint special investigation teams.
Signatories to the convention can opt out of each of the first three of these forms of special co-operation by making a declaration to that effect. The Government intend to opt out of the provisions on hot pursuit only.
Likewise, a signatory can make a general declaration that weapons may never be carried into its territory. The Government intend to make such a declaration.
The draft text of the convention cleared the scrutiny procedure for European legislation on 17th December 1997.
As the preamble to the convention requires that any action taken under its provisions must comply with the principles of legality, it must be necessary and not achievable by less significant means and it must be proportionate. The Government can confirm that the convention is compatible with the Human Rights Act.
To give legal effect to the convention in the UK it is necessary either to make primary legislation or to specify the convention as a Community treaty under the European Communities Act 1972. The purpose of this draft order is to take the latter course and specify the convention as a Community treaty.
I hope that on this point we may follow the example of the House of Commons Joint Committee on Statutory Instruments, which discussed the draft order on 17th January. In the committee there was cross-party support for the aims of the convention and a ready acceptance of its Community status. The committee was in agreement that an Order in Council was the appropriate means to give effect to this convention and that there was no need for any primary legislation. I commend the order to the House.
Moved, That the draft order laid before the House on 14th December be approved [ 2nd Report from the Joint Committee].— (Lord McIntosh of Haringey.)
The Earl of Northesk
My Lords, I thank the noble Lord for explaining the order to us with his customary verve and precision. I begin by assuring him that we on these Benches support its objectives.The rationale for improving co-operation and assistance between Customs administrations not just in Europe but perhaps also more widely is self-evident. The growing problem of cross-border smuggling bears witness to that, as do more serious matters such as organised crime, involvement in drug trafficking, illegal immigration and so on. Nonetheless, I hope that the Minister and the House will forgive me if I take up a small amount of time. I note that in a Standing Committee in another place considering delegated legislation, the Paymaster General made passing reference to the Naples II convention and its,
Will the noble Lord elaborate on that a little further? To what extent, if at all, does that envisage the use of techniques such as data matching, friendship trees and so on to derive information that will assist customs administrations in their fight against crime? To the extent that it does, will the use of data be fully consonant with the terms of the Data Protection Act 1998? Are the provisions on data properly proportionate, particularly in the context of the Human Rights Act 1998? I suspect that the Minister has already answered that point. Nonetheless, I hope that he can assist the House on the points I have raised. I note that the convention deals with other forms of co-operation, such as cross-border surveillance and covert investigations. I therefore assume that by definition the Regulation of Investigatory Powers Act 2000 must apply in those instances in which those practices are carried out in the UK. That is all well and good but, as the noble Lord will be aware, the legality of that Act under European law is currently under investigation by the European Commission. While I accept that this is a little hypothetical, what are the implications of that for the future effectiveness of mutual assistance between customs administrations in Europe? On a mildly related topic, is it safe to assume that the cybercrime treaty currently being drafted by the Council of Europe is intended to meld Naples II to provide a cohesive and comprehensive armoury in this area? I look forward to the Minister's reply. In the meantime, I repeat our support for the order's objectives."provisions for dealing with the protection and use of data'".
My Lords, we on these Benches also support the order.As the Minister said, the major development during the past 20 or 30 years in the problems facing customs authorities is the growing sophistication and international nature of much of the smuggling activity that is involved. That activity has changed from that which occurred during the immediate post-war period and in the 1950s and 1960s, which one thinks of as involving traditional contraband goods, to one essentially of organised crime associated with drugs. We are dealing with extremely well financed international gangs which can be sensibly combated only by well financed international customs co-operation. Of all the new areas that the Minister discussed and which are contained in the convention, that involving joint special investigative teams is probably the most important. Unless drug traffickers are faced with a concerted customs effort involving teams of people who put in the same time and effort to combat the traffickers as the traffickers themselves adopt, the traffickers will be successful. The Minister discussed exemptions from the convention and said that we were opting out of the hot-pursuit arrangements. I assume that the case for hot pursuit from this country is significantly less than that which would apply if one were in Luxembourg or the Low Countries, where hot pursuit would be a real problem. In this country, hot pursuit involves the relatively slow business of crossing the Channel. I assume that Customs and Excise feels that having a right to pursue its activities in territorial waters will give it enough scope to do what it wants. The explanatory note to the order explains that the convention will come into force 90 days after the last member state gives notification that it has completed its constitutional procedures for the adoption of the convention. I should like to ask the Minister how far the member states have progressed in the ratification procedure and when we may expect all member states to be fully signed up. In doing so, I do not in any way seek to question the validity or the sense of the order, and we look forward to supporting it.
Lord McIntosh of Haringey
My Lords, perhaps I may deal with the points in reverse order. When I read the papers on this order, I was worried that we were being rather slow in that it had taken since 1997 to give effect to this provision. However, when I inquired further, I discovered that only Greece has adopted the convention. We are the second member state to do so. Therefore, we may be slow but almost everyone else is slower. I do not believe that the 90 days will lose us our second place in the queue.The noble Lord, Lord Newby, is of course quite right about the matter of hot pursuit. It is true that the nature of our boundaries means that anyone who attempts hot pursuit may well end up with "wet pursuit". Clearly, it would not be appropriate for us to do that. With regard to the questions raised by the noble Earl, Lord Northesk, I was most interested in the point that he made about data matching and friendship trees. He asked me whether the provisions were in accordance with the Data Protection Act and the Regulation of Investigatory Powers Act. The answer to that is: no, the convention will merely provide for the exchange of existing information under Naples II. There are no provisions for intelligence techniques. That means positively that there is no risk of contravention of the Data Protection Act or the Regulation of Investigatory Powers Act. It may mean negatively that more is still to be done in the future. Perhaps I may correct what I said in relation to Greece. I understand that France, Sweden and the Netherlands have announced in Brussels that they have now ratified Naples II. Therefore, we are among the top five and not the top two countries.
On Question, Motion agreed to.
House adjourned at twenty-nine minutes past nine o'clock.