asked Her Majesty’s Government:

What is their response to the current financial situation of the European Court of Human Rights.

My Lords, the United Kingdom is a firm supporter of the European Court of Human Rights. Guaranteeing its effectiveness is a priority for the United Kingdom. The review of the noble and learned Lord, Lord Woolf, the ratification of Protocol 14 and the report of the Wise Persons Group should all help in alleviating the problems of the court. There will be financial implications, but we will seek to meet these through savings in the overall Council of Europe budget.

My Lords, the Minister will, I am sure, know that, as of this morning, there were 85,000 outstanding cases with the European Court. That represents a crisis. I urge the Minister not to follow the course of action that he has outlined of raiding the already inadequate Council of Europe budget to provide the necessary resources for the court to do its work. Does the Minister agree that both bodies do an enormously valuable job and that one should not suffer for the other?

My Lords, in working through all the issues of European budgets in the last set of negotiations in the settlement, we were clear that there ought to be a realistic constraint on the spending of European institutions. We were at the forefront of the efforts to do that, and we are committed to zero real spending on the Council of the Europe. None the less, in 2006 it amounted to a shade under £20 million. We think that there are grounds for believing that there are credible savings in that budget.

My Lords, does the Minister recognise that the European Court of Human Rights plays a vital role in justice in the United Kingdom because it is the final arbiter on the interpretation of the European Convention on Human Rights? In those circumstances, does the Minister agree that it is essential to have improved funding and that the Government should press for a new protocol to the European convention that would make it easier to sift out the considerable number of unjustifiable cases?

My Lords, I have nothing to add to the point about the financing. I have answered the House on that, whether my Answer satisfied noble Lords or not, but our view on zero real growth in the funding of this budget head should not suggest that we do not think that the court plays a valuable role as the final arbiter or that we are not committed to seeing it deal properly and effectively with the kind of cases that are brought before it. It is the primary protector of human rights in Europe. We will certainly take our part in discussions on any measures that help it to behave efficiently and make sure that the cases that come before it are the critical ones.

My Lords, does the Minister consider that the structural changes introduced some years ago, in particular the abolition of the commission, have been an advantage or a disadvantage from a financial point of view and from the point of view of the working and efficiency of the European Court of Human Rights?

My Lords, it is hard to imagine that it has been entirely an advantage because, as has been said, the number of cases backed up is considerable. Without question, there are efficiencies to be achieved, but it is also true that some of those who have recently come within the overview of the court—for example, from Russia—have produced a vast number of cases that they could never have brought under the old regime and, arguably, through domestic courts in Russia at present. That has produced a huge increase. Perhaps the court and the whole system will need to adjust to those changes. Throwing more money at it is unlikely to be the solution.

asked Her Majesty’s Government:

What role is being played by the Crown Prosecution Service in offering support to victims of crime.

My Lords, prosecutors have an essential responsibility in putting victims at the heart of the criminal justice system. A number of steps have been taken to make that a reality. The prosecutors’ pledge makes a series of specific commitments about the way in which prosecutors communicate with victims of crime throughout the life of a case. A new Crown Prosecution Service leaflet explains how it will deliver the pledge, and other prosecuting authorities have introduced similar commitments.

My Lords, I welcome that pledge and the way that we are giving more attention to the victims of crime, because often the courts seem to be there for lawyers, magistrates, judges and others but not for the victims. However, will my noble and learned friend do more for people who are caught up in an anti-social behaviour case that ends up in court? The anti-social behaviour aspects of crime and disorder cause more stress to society than some other crimes whose rates are dropping quite significantly.

My Lords, I agree with my noble friend that anti-social behaviour affects a large number of people. The most serious crimes are very important, but they do not directly affect so many. I agree that it is important to do all that we can to deal with victims of that crime. Many of the initiatives that we have introduced—direct communication with victims, witness care units, guidelines on acceptance of pleas and the victims’ code—take account of those issues. However, I will bear in mind what he said about those people.

My Lords, the shareholders of Enron could claim to be victims of crime. Will the noble and learned Lord the Attorney-General tell us why the Crown Prosecution Service chose not to prosecute the NatWest Three and to have them extradited to the US to be prosecuted there?

My Lords, the position, which has been explained before, is that a decision was made by United States prosecutors to investigate the matter. The allegation—I emphasise that it is an allegation and that nothing has been proved—was that there had been a conspiracy between three British bankers and two co-conspirators who were Enron executives to take a sum of money from Enron, which is alleged to be a total of $30 million, part of which went into the pockets of those three.

There was never any complaint in this country to the SFO about that case. The United States investigated and produced evidence in relation to the case and asked for extradition. The British courts were then asked to review the decision by the SFO not to prosecute. They looked at that in detail and rejected the allegations. Therefore, the extradition goes ahead.

My Lords, one group of people who really are victims of crime are women who suffer from domestic violence. My noble and learned friend will be aware of the improvements that have been made, certainly since 1997, to counter it, but could he indicate what further support and help will be given to local police forces to counter what is still a very serious problem? It is a problem that occurred very seriously throughout the period of the World Cup.

My Lords, I do not know the statistics about the last point, but it would not entirely surprise me if that were right. I agree with my noble friend that this is an area on which we need to concentrate. A great deal has been done to gear up our response to domestic violence. Local police forces have been very much involved in that work. There are special co-ordinators who deal with domestic violence, and the courts take a different approach to it. I shall be happy to discuss with my noble friend outside the Chamber the particular steps that she would like to be taken, what more she would like to be done and whether that is possible.

My Lords, as the noble and learned Lord has taken the opportunity to talk very fully on the extradited three, could he tell us whether they are going to get bail and when we might know a decision on that?

My Lords, I did not take the opportunity. I was asked a question and thought that it was right for me to answer it—I had no intention of coming forward on that otherwise. I hope that noble Lords will think that I have at least attempted while on my feet to deal with an issue that, I know, is of public concern.

As the Prime Minister announced in PMQs yesterday, I have spoken with my counterpart in the United States to ask what their approach to bail is, and he has confirmed to me that US prosecutors will not oppose bail for the three individuals. There is the question of conditions for bail, which will have to be set and which will be for the court to set or for them to agree. That is all that I can tell the noble Lord at this stage. I hope that the House will think it helpful that I have given that information.

My Lords, will my noble and learned friend assure us not only that the rights of the victim will be taken into consideration but that proper and adequate punishment will be administered to those who are guilty of anti-social behaviour, which bothers so many people in this country? Can he assure us that the Government will not follow the Conservative Party down the philosophy of hugging a hoodie but rather will lock them up for misbehaviour, if that is what they deserve?

My Lords, everybody who is guilty of misbehaviour should be considered for an appropriate sanction if they have committed a criminal offence. I think that it is enormously important that this Government have recognised that anti-social behaviour, although it often simply concerns offences at the low end of the criminal justice calendar, can be hugely distressful to people and make people’s lives an absolute misery. The respect action plan that the Government have produced and in which prosecutors play a key part is essential to that. One thing that we have done is to have specialist anti-social behaviour prosecutors who help with others to deal with the challenge to which my noble friend refers.

My Lords, does the Crown Prosecution Service have instructions to supervise or control victim impact statements that are read out in court or, as is intended, victims speaking openly in court? The noble and learned Lord the Attorney-General will appreciate that anything that is said in court is subject to absolute privilege and may be reported in the press. I have come across some outrageous and untruthful things that were said in victim impact statements in order to influence the judge to pass a more severe sentence.

My Lords, I recognise a bit of a conflict here. First, it is important that the impact of an offence on a victim is understood by the court—not the victim’s views on what the sentence should be but the impact on the victim. I see a huge number of statements in my role looking at the sentences that have been passed, and some of them are very moving and plainly need to be taken into account. The judges need to see them, and prosecutors need to make sure that they have seen them. It will ultimately be for the court to control what is said. But there is another side to this—that defendants through their advocates often say in court things that are hugely distressful for the victims. They will allege, “I only did this because she led me on”. It is important in those circumstances that the victims, too, can come back through prosecuting counsel and say, “That is not acceptable”. That is one thing that I included in the guidelines that I issued to prosecutors last year—that must always be considered.

asked Her Majesty’s Government:

What action they intend to take to mitigate the loss of 800 jobs in Devon and Cornwall announced on 4 July by the industrial minerals group Imerys.

My Lords, the South West of England Regional Development Agency has deployed an area action force to ensure that all available support for the employees concerned is co-ordinated effectively by public sector agencies. In the longer term, the priorities for Objective 1 funding and investment by the RDA in Cornwall will continue to have a strong focus on developing alternative, higher-value and sustainable job opportunities for the clay communities.

My Lords, I am very grateful to my noble friend for that Answer. It is heartening to hear of the action that the Government have already taken. I am sure that my noble friend shares my pleasure that Imerys is offering to contribute £25 million to diversification and to finding other jobs for the people who may be made redundant. Does he agree that the key issue in Cornwall is probably diversification into other industries, one of which must surely be to get rid of some of the spoil and secondary aggregates that blot the landscape around St Austell? I am sure that he will agree that that needs capital investment. Will the Government re-examine the convergence fund and Cornwall’s Objective 1 status with a view to the Treasury possibly contributing a higher percentage than at present to match the funding from Brussels?

My Lords, one of the issues that the area action force is looking at is land and premises and whether alternative uses can be made of them. EU structural funds will be part of any action that is taken to improve the situation. Cornwall’s Objective 1 status has already attracted £328 million in European funding and, together with matched funding, a total of £878 million will go into the economy of Cornwall and the Scilly Isles. Cornwall will be eligible for funding from 2007 from the EU convergence programme. We need to see how those funds are used before we take any further steps.

My Lords, does the Minister accept that the 800 redundancies referred to in the Question of the noble Lord, Lord Berkeley, are part of a much wider picture of increasing unemployment? Will he remind the House of the figure for total unemployment three years ago and the figure today?

My Lords, this is a specific situation, which is due to a number of factors coming together. First, world energy prices are higher and, secondly, the low value of the dollar makes imports from Brazil much cheaper and more competitive. It is a specific situation that is not due to macroeconomic circumstances in the UK. I do not have to hand the figures that the noble Lord asked for, but I shall certainly write to him and let him have them.

My Lords, given that the wonderful tourist attraction of the Eden Project developed as a result of the area’s history of extractive industries, what more can the Minister do to build on the strengths of the tourism industry in Cornwall and Devon to supply jobs for people in those areas?

My Lords, tourism offers a real possibility of increasing opportunities in Cornwall. It is exactly those issues that the Government’s action task force will be looking at to see where opportunities lie.

My Lords, none of the European funding to which the Minister referred that goes to Cornwall and the Isles of Scilly is available to the areas of Devon affected by the job losses. That is compounded by the fact that the DTI has just published its assisted area status zones, removing west Devon from the assisted area status zone so that the area will not be able to receive that European funding. Will the Minister undertake to re-examine the position of west Devon, given the underlying statistics, which are compounded by the DTI’s decision?

My Lords, the main problem is, in fact, in Cornwall. In Devon, there will be a reduction in the number of jobs at Lee Moor from 120 to 50. In the greater scheme of things, that is not a reason for making adjustments to the plan. Of course, Devon will be eligible for support under the regional competitiveness and employment objective.

My Lords, does the Minister agree that the Government need to look beyond just tourism for Cornwall? Tourism provides jobs, but they are generally low-paid and seasonal. People in Cornwall want regular and well paid employment so that they can hold their head up like the rest of the population in this country.

My Lords, my remarks about tourism were simply to state that that is one of the opportunities available. Of course, we want to look at other opportunities—in particular, as I said in my Answer, higher value-added jobs, so that the jobs that have been lost can be replaced with equally good jobs, if not better ones with better long-term prospects.

My Lords, does my noble friend agree that in the past five years Cornwall has seen a major transformation? There is no doubt about that. The commitment given by this Government on Objective 1, Combined Universities in Cornwall, the minimum wage and a whole raft of things have been of considerable help. Nevertheless, there is not just this loss of 700 jobs in Cornwall and of 85 in Devon; there is also an effect on the peripheral, small businesses. Cornwall has no big businesses and it is very different from the Midlands in that regard. Therefore, does my noble friend agree that the principles of Objective 1 should continue? The money needs to be there, because it is not possible to say to employees, “There is a job down the road”. While I believe that employment in Cornwall has increased and that all the indicators are going in the right direction, this number of job losses in a very rural area is a major body blow. We have time—just over a year—before the redundancies take place, but does my noble friend agree that it is essential that something different is done in Cornwall, because it is a different situation?

My Lords, I agree that this is a serious situation and that the job losses will be keenly felt in Cornwall. As my noble friend said, we have one advantage—the job losses will not take place until the end of 2007, so we have some time to plan for this. It is essential that we use the action task force and EU structural funds to do everything that we can to find replacement jobs for those that have been lost.

My Lords, does the Minister agree that slowness and lack of variety of transport is one reason why it is so difficult to get more work into Cornwall? I am taking a train from Bodmin Parkway that leaves at 9-something but does not arrive in London until nearly 3 o’clock.

My Lords, I totally agree. In many of these situations, transport is a key part of regional regeneration. We must make certain that you can get both in and out of Cornwall easily and, in particular, that Cornwall is linked into the international transport system, so that, if you are trying to attract high-tech businesses that have a global market, which is increasingly the situation, it is easy to get into the region and out. In other circumstances, Cornwall is well placed to build up its trade with Europe.

My Lords, does the noble Lord agree that the job losses will also have an economic impact on the commercial viability of the ports of Fowey and Par, which rely heavily on the export of china clay? Will he also take seriously the suggestion of the noble Lord, Lord Berkeley, that the Government look into finding alternative uses for the waste material from the clay workings? Could not some form of tax incentive be given so that the material would become more environmentally attractive to use than, say, material dredged from under the sea or from other land sites? As someone who grew up in the port of Fowey and knew Cornwall well, I found the old Cornish Alps, as they were called—the conical white clay tips—very attractive. Efforts to ameliorate the environmental impact by levelling the clay pits into terraces have made the area look far more industrial than it ever used to. Getting rid of them would help not only employment but the environment.

I totally agree that the great difficulties in such situations are not only the immediate impact on those employed by the company but the effect on other, related areas of business. This is clearly a serious problem. The waste material obviously has to be considered when looking at the environment in Cornwall, but there are other ways in which I would want to view long-term jobs: they should be based on modern industries, innovation and new skills. In the end, that is what will give stability to that region.

My Lords, given that the 800-odd redundancies constitute a much bigger percentage of the jobs in this area than the 6,000 job losses at Loughborough and that they are therefore much more tragic for the employees concerned and for the families who have been in the industry for generations and given that there does not seem to be much hope, can the Minister explain why the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Trade and Industry all went to Loughborough to talk to the employees there and to try to encourage them and so on, but, as yet, no one from the top has gone to this extraordinarily tragic area?

My Lords, the job losses in Cornwall will be just as bitterly felt as those at MG Rover. However, there is one important difference: the real problem with MG Rover was that 6,000 jobs were lost overnight, and that was a very difficult situation to deal with. In this case, the job losses will be as bitterly felt as they were at MG Rover, but at least we have until the end of 2007 to find alternative jobs for the people concerned.

My Lords, can my noble friend also ensure that the action group looks at transport within Cornwall? With diversification and new job opportunities, which we all hope will come, it is terribly important that people can get around within the county. One of the road schemes near St Austell proposed in the latest round has, I gather, been put on ice, and I hope that that decision can be reversed. Is my noble friend also aware that, when the new First Great Western franchise for passenger trains was let this summer, many cuts to local services were proposed, not only on the branch lines but in commuter services on the main Cornwall line? Can the Government see whether some of those can be reinstated, so that local train services can help people going to new jobs?

My Lords, I agree that in these circumstances transport is extremely important. The decision on the deprioritisation of the St Austell to Bodmin—A391—road improvement was taken on a local basis, assessed against the merits of other schemes. My right honourable friend the Minister of State for Industry and the Regions will ask her opposite number at the Department for Transport to look again at this proposal in the light of the Imerys job losses, but it was originally a local decision based on local priorities.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 25 May be approved [29th Report from the Joint Committee] [Considered in Grand Committee on 4 July].—(Lord Triesman)

On Question, Motion agreed to.

My Lords, with the leave of the House I should like to make a Statement on the independent report of the noble Lord, Lord Carter, into the procurement of legal aid, which has been published today and copies of which have been placed in the Libraries of both Houses. A joint consultation paper on the proposals of the noble Lord has been issued simultaneously by the Department for Constitutional Affairs and the Legal Services Commission, and copies have been placed in the Libraries.

The report is the product of a year of engagement between a number of different stakeholders. Government, the Legal Services Commission, the Law Society, the Bar Council, the judiciary, individual practitioners and others, have all played a full part in the discussions that have led to the noble Lord’s recommendations. In his report, he identifies the importance of a publicly funded legal service to ensure proper access to justice for those in need of advice and representation, and for those charged with criminal offences. He rightly identifies the high quality of our legal system.

In a time of finite public resources and ever-increasing pressure on the legal system, it is vital that we review our arrangements for the provision of legal aid. For some time, under successive Governments, they have not fully been serving either the public or the clients of the system. Changing the way in which we purchase legal advice services is a key element of our desire both to reform the criminal justice system and to provide better outcomes in civil and family justice. I know from experience the difficulty in balancing all the competing factors to ensure that legal aid is fair to the vulnerable, fair to taxpayers, fair to defendants and fair for practitioners.

The noble Lord, Lord Carter, has concluded that fundamental change must be made in the way in which legal aid services are procured so that clients have access to good quality legal advice and representation; a good quality, efficient supplier base thrives and remains sustainable; taxpayers and the Government receive value for money; and the justice system is more efficient, effective and simple. He recommends a new system for the provision of criminal legal aid where the professions ensure proper quality control over their members; where lawyers are, as much as possible, paid on the basis of the completion of the case rather than for the number of hours they have worked; and where they are encouraged to be as efficient as possible by being able to compete for work on the basis of price.

The noble Lord, Lord Carter, has proposed that the criminal legal aid market should be restructured alongside his suggested timetable in the following way: April 2007 should see the introduction of a new fixed-fee scheme in police stations; it should also see changes to standard fees for magistrates’ court cases, changes to the advocates graduated fee scheme in the Crown Court and an extension of the graduated fee scheme to litigators in the Crown Court. For very high cost cases, the Legal Services Commission should introduce an enhanced quality threshold and use an increased level of in-house legal expertise and closer management to bring greater control over the individual case contracting regime. He proposes that that be achieved by the end of the financial year 2007-08 through the Legal Services Commission contracting solely with a panel of suppliers.

Panel membership would be determined through the demonstration of the appropriate level of quality as well as competition. Price competition should be introduced from 2009, with quality-assured suppliers bidding for multiple units of cases in police stations, which they would usually then take through to the magistrates' and/or the Crown Courts, depending on where the case ended. The transition to a more market-based approach comes alongside changes to the regulation of legal services, as outlined in the draft Legal Services Bill. Taken together, that will mean change for the profession: a degree of re-structuring for solicitors and barristers alike.

Those changes must be managed in a way that ensures continuing quality and choice for the public while giving the professions time and, where appropriate, support, to adjust to the new model. The noble Lord recognises the need to ensure the providers of legal services continue to serve BME communities and those in less densely populated and rural areas. He strongly acknowledges that one size does not fit all and he makes detailed proposals to ensure the continued improved provision of high-quality legal services for allthose communities. His report contains detailed recommendations that will help us devise a criminal justice system that the public expects: one that is simple, speedy and makes best use of summary justice.

On civil and family legal aid, the report provides for a more efficient, client-focused service, concentrating on meeting differing local needs. The noble Lord suggests that this will be achieved through the establishment of community legal advice centres and community legal advice networks, which is in line with the Legal Services Commission’s strategy for the community legal services. Best value tendering for the new centres and participation in the networks would begin in 2009.

New forms of contracting are expected to promote greater links between civil suppliers and, where possible, with family law suppliers, so that clusters of problems can be dealt with earlier and more effectively to avoid the risk that they multiply and lead to people falling into the social exclusion trap.

The Legal Services Commission also proposes to move to fixed and graduated fees from April 2007 for a wide variety of civil and family work and for most immigration work. This will promote and reward the most effective working by suppliers. The consultation document published alongside the noble Lord’s report contains full details.

The noble Lord, Lord Carter, estimates that if these reforms had been fully in place in 2005-06, criminal legal aid spending would have been £100 million lower, and this does not take account of the potential further savings from best-value tendering. In addition, a greater proportion of legal aid would have been spent on civil and family matters. By the end of the implementation period, because the reforms will also control unit costs far better than many elements of the current scheme, spending will be lower than it would be without the changes proposed.

I also welcome and accept the recommendation of the noble Lord, Lord Carter, for better management and control of spending, including through greater transparency and shared problem-solving between the Department for Constitutional Affairs, the Legal Services Commission, other government departments and the professions.

In conclusion, the Government strongly welcome my noble friend’s findings and we have today issued a consultation paper, which I encourage everyone to respond to. I look forward to the challenges ahead and to working with all stakeholders and the Legal Services Commission. The dedication and commitment of those commissioners and staff will be critical to success. Finally, I am immensely grateful to the noble Lord, Lord Carter, for his work. He has provided a blueprint for the future.

My Lords, I am most grateful to the noble and learned Lord the Lord Chancellor for making this Statement. Like the noble Lord, Lord Goodhart, I received it only a short time ago. It may be that the noble Lord, Lord Goodhart, reads more quickly than I do, or at least absorbs information more efficiently, but I have not had the chance to take in everything that the noble Lord, Lord Carter, said, so what I am about to say should be seen in that context.

First, will the noble and learned Lord the Lord Chancellor say a little more about how these proposals, and his response to them, fit in with the development of the legal services Bill, which is in pre-legislative review and is soon to emerge? Plainly, how the noble and learned Lord’s remarks today relate to the legal services Bill is important in developing the picture about cost efficiency and financial savings.

The second point I would like the noble and learned Lord the Lord Chancellor to reflect on aloud this morning is how he sees this new market-based approach squaring with the quality-of-service approach that he also lauded. Plainly, we all want to see legal services that are as cost efficient as possible, but it is not desirable for that to be at the cost of the quality of provision. This is not an easy matter to resolve, and I am certainly not going to pretend to your Lordships' House that I know the answer; but we have to grapple with it, as do those at the coalface deciding where the money should be spent and where it should not. I would like to see these ideas in a little more detail than they have been in the report by the noble Lord, Lord Carter. In saying that, I make no criticism of the noble Lord, because he clearly had a very wide range of issues to consider.

One of the possible consequences of the Government adopting the noble Lord’s proposals is a reduction in the number of solicitors’ firms providing legal aid, although we hope the quality of advice will rise. Has the noble and learned Lord the Lord Chancellor taken into account the likely geographical impact of this on the provision of legal service throughout the country? I can see that it is highly desirable to focus on those firms that have the appropriate expertise, but this may mean some firms will disappear altogether from quite large towns. In deciding which solicitors’ firms will receive legal aid contracts in criminal matters, will a geographical criterion also be applied by the DCA and the Legal Services Commission? In the context of magistrates’ courts, both the noble and learned Lord the Lord Chancellor and his predecessor, the noble and learned Lord, Lord Irvine, have always stressed the importance of local justice locally delivered. I respectfully suggest that it is desirable to have legal aid advice locally delivered.

One of the difficulties of fulfilling the task the noble Lord, Lord Carter, was entrusted with is that he has been looking at defence costs without knowing the number of prosecutions with which defence lawyers will be faced. That is particularly true with regard to large prosecutions. It is difficult to deal with legal aid in isolation from the prosecutorial policy of the Crown. It is no good complaining about higher defence costs if more prosecutions take place. Defence costs in criminal cases cannot be approached in total isolation from what is happening on the prosecutorial side.

A good example is the recent Jubilee Line case, about which, noble Lords will recall, your Lordships had a debate about a fortnight ago. The noble and learned Lord the Attorney-General accepted, frankly and openly, that the reason the case had gone on so long was entirely due to mistakes made by the prosecution. We will get a grip on defence costs in these more expensive cases only if we also get a grip on the way prosecutions are conducted in those cases. I am sure the noble and learned Lord understands the point very well; but when seeking to determine how to progress the Carter report, I respectfully suggest that he bear that factor in mind.

One of the most important reasons the Jubilee Line case took a long time was the use of the offence of conspiracy to defraud. That is a notoriously vague offence in criminal law. It is ill defined, and frequently gives rise to many additional evidential requirements. In the assessment of Mr Wooler, who conducted the Jubilee Line inquiry, it added about 15 more months to the case. The Law Commission, in its report on the reform of the offence of fraud, recommended that conspiracy to defraud should be abolished. I know the noble and learned Lord the Attorney-General is reluctant to accept that. We have had a debate about it in another context, and I do not intend to dilate on the topic further today. I would be most interested to know, though, and perhaps this could be done by sampling from a few court cases, just how much time the addition of the conspiracy to defraud offence has actually added to those trials. We know the answer in the Jubilee line case; but I suspect that such an analysis will produce the same evidence in other cases.

The noble and learned Lord will well rememberthe circumstances in which he commissioned the report—in the context of the public scandal about the amount of money expended in high-cost cases. Fifty per cent of defence expenditure costs in the Crown Court goes on 1 per cent of the cases held there. That, in absolute terms, amounts to over £100 million. With great respect to the author of the report, what he concludes is the least satisfactory part of it.

In paragraph 97, he suggests certain changes but admits that they would save only 5 per cent of total expenditure. He says, in paragraph 98:

“It still results”—

even after the reforms that he suggests—

“in approximately £100 million being spent on a small number of cases”.

He goes on to speculate on why that aspect of legal aid is still totally out of control. In paragraph 99, he says:

“This results partly from the established policy of each contract manager negotiating independent of what is agreed on other contracts on the same case and not being aware of the case management strategy being used by other defence teams”.

He then goes on, rather despairingly, to suggest that perhaps the only way of resolving this problem is to have an overall budget for these high-cost cases.

The noble and learned Lord’s success or failure in this matter will, as he will know, depend on the extent to which he gets to grips with high-cost cases. I suggest that, on this crucial issue, the noble Lord, Lord Carter, has taken him no further and that he will need to think again about what needs to be done. The noble Lord, Lord Carter, has suggested that there should be an overall financial limit, but this could not work unless you also had overall control of the number of prosecutions brought. How can you possibly make an overall financial limit work in high-cost cases if you do not know how many high-cost prosecutions there will be?

It seems, therefore, that the only way forward is to have very strict cost controls on each case. I am not sure how that would work for solicitors in the light of the other changes that the noble and learned Lord proposes. Indeed, we do not yet know how any of these changes will work; but, in the case of barristers, it must mean that the noble and learned Lord will have to consider whether the brief fee plus refresher system will have to be replaced by an overall fixed contracted sum, irrespective of the outcome. In other words, the risk would be shifted from the taxpayerto the Bar. I have no idea whether the noble Lord, Lord Carter, discussed this with any of the professions; or whether the noble and learned Lord himself gave evidence to the noble Lord. But I am extremely surprised not to find some analysis of that solution here, and I shall need a lot of convincing that it should be dismissed out of hand.

My Lords, the noble Lord, Lord Carter of Coles, is to be congratulated on producing a very full report in very reasonable time. Like the noble Lord, Lord Kingsland, I have not yet had an opportunity to read it, but I will do so rapidly and with considerable interest.

It is quite clear from the Statement and from brief consideration of the executive summary of the report that the report will lead to very important changes in the legal aid system. Indeed, together with the Clementi report, it will lead to fundamental changes in the legal profession, perhaps to an even greater extent than with the Access to Justice Act 1999.

We recognise that the increasing costs of legal aid have been and continue to be a real problem. We accept that civil legal aid must be cash limited and that procedures such as conditional fee agreements should be introduced, although there are aspects of that case which need to be looked at again. Like the noble Lord, Lord Kingsland, we also accept that very high-cost cases take far too great a proportion of the criminal legal aid budget and are altogether too expensive.

The report proposes that, in effect, much legal aid should be put out to tender. We do not object to that in principle, but will those granting legal aid be able adequately to take into account the quality of services? The Government have said in the Statement that they will do that, but we need ensure that it happens and to strike the right balance between quality and cheapness. What is needed here is value for money, not something cheap and nasty.

I have some concern over the proposal to place a limitation on the number of criminal cases that can be dealt with by firms as a result of client choice. Are the Government satisfied that the new system will put an end to the problems of legal aid deserts? Legal advice centres and networks can play an important part but could pose a serious threat to the availability of general legal services in the locality. A further important issue is whether the Government are prepared to ring-fence civil legal aid. It is wholly wrong that increases in criminal and immigration legal aid should mean a reduction in civil legal aid—including family legal aid—which deals with cases of the utmost importance to many claimants.

Going beyond legal aid and beyond the remit of the noble Lord, Lord Carter, will the Government commission a review into changes in court procedures which I believe are inordinately lengthy and expensive compared with those in most other countries? That would enable the same amount of money tofund legal aid for more cases. The Woolf reforms have been helpful, particularly in encouraging pre-trial settlements, but this needs to be looked at again.

Returning to the report, we shall need a full study of the proposals when we have had time to consider them. What is the Government’s timetable for implementation, and will it involve new primary legislation? If so, will that be brought in as an addition to the draft Legal Services Bill?

My Lords, I am grateful for the measured responses of the noble Lords, Lord Kingsland and Lord Goodhart. Perhaps I may say at the outset that throughout my Statement I should have referred to my noble friend Lord Carter of Coles rather than Lord Carter. I apologise for the discourtesy. I shall deal with the specific points raised.

The noble Lord, Lord Kingsland, asked how this would fit in with the Legal Services Bill. The proposals are freestanding in the sense that they are not dependent on that Bill. However, alternative business structures that the Legal Services Bill would allow—for example, partnerships between barristers or partnerships between barristers and solicitors—will enable them to bid more effectively once competitive tendering comes in. The noble Lord went on to emphasise, entirely correctly in my view, the issue of quality, and I made it clear in the Statement that proper arrangements must be in place to deal with the question of quality. I refer noble Lords to pages 10 and 14 of the report setting out the specific proposals made by my noble friend Lord Carter of Coles in relation to quality. In practice, what he is proposing is that the monitoring and judging of quality be handed over to the Law Society and the Bar Council respectively and that they do it on the basis of peer review. That will take some time to introduce, but I believe it to be a sensible proposal: those who know should judge the quality of those who provide, and only those who satisfy the relevant quality standards can then be in a position to bid for legal aid work.

The next point raised by the noble Lord, Lord Kingsland, is the worry about geographical effect, another issue that the noble Lord, Lord Carter of Coles, addresses. What happens if you live in Cumbria and you are serving a geographically difficult market? He makes the point, and we accept it, that one size does not fit all. It will cost more to provide legal services in Cumbria than it might in some inner-city urban areas.

The noble Lord, Lord Kingsland, then made the point that many of the difficulties in long cases come not from procurement of defence services but in how the prosecution is conducted. Again, we wholly agree. The report does not in any way limit us in addressing the issue of, for example, the very high-cost case, in terms of demand as opposed to procurement of defence services. However, I have absolutely no doubt that the way in which we procure defence services will have a significant impact on the length of some civil and criminal cases. The specific difficulty in the very high-cost case is the lack of predictability found in the smaller case. We need a system whereby a fair estimate is made of what should be paid by reference to the length of the case. Once that length is exceeded then the case should become much less financially productive for those engaged in it. In practice, that is what my noble friend Lord Carter of Coles is proposing.

The noble Lord, Lord Kingsland, continues in that vein by saying that he is not satisfied with the proposals of my noble friend Lord Carter of Coles on very high-cost cases. I would ask him to look in detail at paragraphs 4.17 to 4.23, the relevant detailed recommendations. What it amounts to is that only those who are capable of doing the long cases can bid. There should be a rigorous tendering process. There should be involvement of the prosecution, the defence and the judge in identifying how long the case should last. It should be value for money based only on that. The noble Lord asks whether consideration was given to brief fee and limited number of days. Yes, it was. This is the conclusion that my noble friend Lord Carter of Coles came to. I would therefore ask the noble Lord, Lord Kingsland, to consider in detail what he says about it.

I think that I have dealt with all the points made by the noble Lord, Lord Kingsland. The noble Lord, Lord Goodhart, made the point on quality that I hope I answered in response to the noble Lord,Lord Kingsland. The noble Lord, Lord Goodhart, makes the point that he is anxious about limiting the number of criminal cases that an individual solicitor or barrister can take. My noble friend Lord Carter of Coles made it clear that client choice is a vital part of our system. But if we want best value tendering, it has to be, has it not, on the basis of tendering for a number of cases and winning that tender? So, a balance has to be struck between client choice and rewarding the lawyer for efficiency by allowing him to tender on price.

I cannot guarantee that the proposal deals completely with legal aid deserts, but in the long run it will make more money available, particularly for civil and family cases. It is also clearly focused on the proposition, as I said in answer to the noble Lord, Lord Kingsland, that one size does not fit all. It will address the issue. I cannot guarantee that it will do so everywhere but I believe that it will make real progress.

I say no to ring-fencing the civil legal aid budget. I think that it is a bad idea because it reduces flexibility. It means that we could not shift funds from one to the other when that would be appropriate.

The noble Lord, Lord Goodhart, then raised a point on court procedures with which I completely agree. The now implemented proposals of the noble and learned Lord, Lord Woolf, have had a significant effect on civil litigation. I believe that we can do that in criminal cases as well, both in the magistrates' court and in the Crown Court. The judges have said time and again that the day of the six-month case or above is over; those cases should be shorter. The judges are keen to see implemented in practice in individual cases—for example, in a criminal case—the identification of how long the defence and the prosecution have for individual elements of the case. That promotes justice, in my view, rather than inhibits it. So I entirely agree with what the noble Lord says about the need for court procedures to make the length of cases shorter.

Finally, the noble Lord asked whether implementation will require primary legislation. It will not. The Legal Services Bill will go ahead but none of our proposals requires primary legislation. We have published today a consultation document, which is also in the Library. The consultation period ends in October 2006. The report gives a timescale, to which I have referred from time to time. Broadly, it is that by April 2007 greater numbers of fixed fees will have been introduced, and that by April 2009 the best value tendering will have begun and the quality assurance arrangements will be in place. That is what we propose; it is on that that we are consulting, and we should get on with it.

My Lords, does my noble and learned friend agree that it is difficult, if not impossible, to forecast price changes with accuracy? They may well alter beyond anything capable of being foreseen. Therefore, is it envisaged that solicitors so affected will be able to make suitable representations to the legal aid authorities? I readily confess that I have not had an opportunity to see the report.

My Lords, my noble friend is absolutely right that forecasting is extremely difficult. Opportunities will be available for representations to be made. However, one of the themes that comes out from the report is that forecasting of demand can be a great deal better than it has been in the past. Some of the problems that historically exist with legal aid have been because the Department for Constitutional Affairs and the Legal Services Commission have got their forecasts completely wrong. We need to improve that dramatically.

My Lords, will the noble and learned Lord accept that it is impossible for us to give proper criticism of these proposals today? Obviously there is to be a consultation period, but no primary legislation is envisaged. Following that period, how are we to discuss and contribute towards any changes that may emerge to the proposals now before us?

My Lords, of course I accept what the noble Lord says. More time is required to look at the documents in detail, but it is right that I make a Statement to the House on the publication of the document, so that I can explain the position. Because primary legislation is not required, the way in which input can come is through responding to the consultation. If the usual channels take the view that the subject is appropriate for a further debate in this House, no doubt they will make that available. That is how we normally operate.

My Lords, my noble and learned friend referred to the view of the noble Lord, Lord Carter of Coles, that £100 million would have been saved in one year, plus the value-for-money savings arising out of tendering. Do the Government accept those figures? Do they believe that that level of economy would be gained arising out of these changes? In relation to the 50 per cent on 1 per cent to which the noble Lord, Lord Kingsland, referred, will those statistics stay the same or change?

My Lords, the£100 million to which my noble friend Lord Carter of Coles referred was putting aside tendering; it was on the basis of fixed fees and greater efficiencies, with additional savings in relation to tendering. Although we might quibble over the edges, we accept in principle that such savings could be made. In answer to the second question about the 50 per cent on 1 per cent of cases, yes—there needs to be a dramatic shift in that statistic.

My Lords, I am relieved to hear what the noble and learned Lord has had to say about value and quality so far as legal aid is concerned. I have been closely associated with three major group actions: the Gulf War action, the sheep farmers’ action, and the measles, mumps and rubella action. Something like £9 million of taxpayers’ money has been thrown down the drain on those group actions because, as I ascertained from the Legal Services Commission, no spot checks were done on work on the cases. There was no assessment of the competence of the lawyers to deal with the cases, and there seems to have been little follow-up for four or five years about whether the cases were going to go anywhere anyway.

I do not know whether the noble and learned Lord recalls, but in the time of his noble and learned friend Lord Irvine, I had an Unstarred Question on this matter, and his noble and learned friend arranged for me to go to the Legal Services Commission. I am frankly appalled at the waste of taxpayers’ money and the distress that has been caused to the litigants by the failure of these cases. They should not have been run at all if they were not going to succeed.

My Lords, I am very conscious of the sorts of issue that the noble Countess raises. It is not just a problem for those who end up receiving poor advice, which sometimes people do. It is also about the fact that this limits the budget for other people who have legitimate claims. My noble friend Lord Carter of Coles recognises, quite separately from any of the tendering or economic changes, that the quality assurance proposal that he made will itself have an effect on the providers’ market, because it will reveal some people who should not be able to tender for legal aid work.

My Lords, since there seem to be no further Back-Bench questions, I want to raise one point on procedure. It seems to me that cumulatively the secondary legislation that will implement the report will be enormously important, and it should be taken together. It is highly desirable that at some point when the secondary legislation is in draft we should have the opportunity to see and debate it, if possible in this Chamber, and certainly in the Moses Room. The body of new secondary legislation that will be brought forward will have a more serious impact than many proposals in primary legislation.

My Lords, it obviously will not all come at once. It will come gradually over a period of time; for example, a new graduated fee scheme for Crown Court advocacy, or a new graduated fee scheme for solicitors in the Crown Court. I will take away the point made by the noble Lord, because underlying his point he is asking me to think of a way whereby there could be a proper debate about the arrangements. That seems to be sensible; although I say that with some degree of trepidation because of the usual channels, but in principle what he is saying sounds sensible.

moved Amendment No. 1:

My Lords, I, too, thank the Minister for the letter that he wrote to the noble Lord about matters that were raised on Report. In particular, he will remember that I raised the points about Ministers of the Crown who had subsequently become First Ministers or Deputy Ministers of the National Assembly. It is quite clear from what he has written in his letter—and I thank him for its clarity—that this is not a complication, and I accept that assurance.

My Lords, I have not seen the letter. Could a copy be put in the Library?

My Lords, I can confirm that the letter is already in the Library. Perhaps I would have been wiser to have copied it to all Members who participated in the debate in Committee but I addressed it to the noble Lord, Lord Kingsland. I am grateful for the noble Lord’s response. It justifies the wet towel technique after midnight after all, and I am very pleased by his response.

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46 [The First Minister]:

moved Amendment No. 2:

My Lords, I do not think there is a great deal of difference between us, nor is there a major issue at stake. I recognise that the noble Lord, Lord Livsey, pressed this issue at Report stage and he has brought it back at Third Reading. At Report stage I had hoped to indicate—I obviously did not succeed—that the provisions of the Bill are absolutely clear: when a First Minister loses a vote of confidence, that immediately triggers the process for his replacement. The question is, what happens in the interim? The noble Lord and I are in agreement that a vacancy could not just be declared. Like nature, Government abhor a vacuum, and if there is no elected Member in charge, one has to have confidence that a civil servant should occupy that role but that runs counter to every constitutional principle that we follow as a nation in any of our elected bodies.

The noble Lord says that another Minister could take that position. But another Minister might be a competitor for the role. How on earth could we guarantee that there would be an easy judgment about who should fulfil this role and how would that be arrived at?

We are saying that the First Minister, having lost a vote of confidence, is a standby Minister until his or her successor is elected. The moment that election has taken place, he or she goes. It is similar to the removal van being at No. 10, when things move with considerable dispatch. Things might take slightly longer in this respect, but the principle is clear. The Prime Minister is in office until his successor takes up the new position and has kissed hands. For the Assembly, it is clear that the outgoing First Minister carries on for a very short time until the election of his successor. I hope that the noble Lord recognises that that is a reasonable provision. The Bill makes it quite clear that that is exactly what happens.

My Lords, I hope the Minister will not mind my saying this, but his comments brought to mind something that happened during the 1970s. I went to Downing Street; the crowd were shouting “Out” to the Prime Minister, while his successor was already in No. 10. I remember thinking that that was rather amusing. Of course, one cannot just wander up to the door of No. 10 these days.

I gleaned from what the Minister said that this was not a problem. Some people might not want to be First Minister—in fact, I suspect that there could be quite a number. I am sure it is not beyond the wit of the Presiding Officer to establish who is in that position and perhaps a successor could be found.

I understand what the Minister is saying about the process. That is one way of doing it. I can imagine the tabloid headlines saying “Crisis” for a few weeks, and there might be a crisis of confidence in the Assembly. However, without more ado, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 [Sustainable development]:

[Amendment No. 3 not moved.]

Clause 95 [Scrutiny of proposed Orders in Council]:

moved Amendment No. 4:

My Lords, I rise, first, to support my noble friend’s amendment and, secondly, to say that the noble Baroness, Lady Finlay of Llandaff, spoke to me last night expressing her regret that she was not able to be with us today having put her name to the amendment and that she is still in entire agreement with its object.

My Lords, we support the amendment. A simple point has been made by the noble Lord, Lord Kingsland. A person may engage in litigation and say, “I’ve won”. Then the Assembly may pass a measure that says, “No you haven’t, you’ve lost”, because they have retrospectively changed the provision on which his claim rested.

I have read the last paragraph of the noble Lord’s letter, which says:

“In summary these provisions exist to enable the law to be clarified and to enable those who have acted in good faith not to be disadvantaged if legislation made by the Assembly or the Welsh Ministers is found subsequently to be ultra vires”.

That answers one problem, but it certainly does not answer the problem raised by the noble Lord, Lord Kingsland. People may act in good faith on a measure that has been passed and then find that the Welsh Government take a contrary view and annul its effect. It has nothing to do with it being found ultra vires. So far as the noble Lord’s amendment protects a person in those circumstances, we support it.

My Lords, on Report the noble Lord, Lord Kingsland, said:

“I am partially satisfied by what the Minister said, but only partially”.—[Official Report, 28/6/06; col. 1276.]

We wrote a long letter, which I am afraid has still not satisfied the noble Lord, so I hope that in the next few minutes I shall be able to convince him that nothing is happening with this clause that should be of concern.

Amendments Nos. 4, 12 and 13 would all limit the retrospective effect of the respective orders under Clauses 95, 150 and 151 so that the order applies only if it is,

“not to the detriment of those who have either benefited from or acted in reliance upon … the law”,

before the order was made. We discussed the issue of retrospective effect at length in Committee and on Report. It is an important issue, and many noble Lords have expressed measured and cogent concerns about these provisions. To offer further reassurance, I wrote the letter that has been mentioned, and I am glad that we have an opportunity to return to the matter at Third Reading.

As I stated previously, the retrospective power exists primarily to allow technical defects to be corrected. The merits of using it would need to be decided on a case-by-case basis by weighing up the rights of individuals, the public interest and the scale of the change involved. Of course, the Welsh Ministers and the Secretary of State would have to take into account whether making retrospective provision would be to the detriment of any person. However, we cannot accept the amendments, as that is not the only consideration that they would have to take into account. There may be considerations in the public interest that greatly outweighed an arguable detriment to an individual. That is why the existing human rights legislation, which requires Ministers to consider these issues in the round, remains the best constraint on ministerial discretion. I also stress once again that these powers are primarily intended to enable technical defects to be remedied and minor and consequential amendments to be made.

As I stated on Report, the Government do not envisage the power to make retrospective provision being exercised except in very rare cases. The purpose of the provision is to protect those who have acted in good faith as a result of provisions in an Assembly measure that have subsequently been ruled to be ultra vires. It is not intended arbitrarily to abridge the rights of individuals, and there are safeguards in place to ensure that the power could not be used in such a way.

I emphasise strongly to the noble Lord that, if there were ever any attempt to abuse this provision and to use it in a way that was detrimental to the rights of individuals, Parliament would block it. All orders under Clauses 95, 150 and 151 will be subject to full parliamentary oversight. Parliament will therefore act as a constant check on the use of these powers, and will be able to ensure that any retrospective provision made under those clauses is proportionate and appropriate.

I understand and have considerable sympathy with the intention behind the amendments. However, I point out to noble Lords that the amendments are technically defective and would render the provisions related to retrospective effect inoperable. It is impossible with any certainty to identify all persons who could be detrimentally affected as a consequence of the order in advance of the order being made. It would never be clear, therefore, whether any order could lawfully be made, even if there was an overwhelming public interest in making it. For that reason, the Government believe that the safeguards that I have outlined, of human rights legislation and parliamentary oversight, are the appropriate way of dealing with this issue, rather than the approach adopted by the amendments.

It is also worth reiterating that this provision follows the model of the provisions in Sections 107 and 114 of the Scotland Act 1998. Your Lordships may also be aware that it was necessary for provision to be made under Sections 107 and 114 of the Scotland Act 1998 when it transpired that a provision of the Regulation of Care (Scotland) Act 2001 was considered to be beyond the legislative competence of the Scottish Parliament.

This power is needed because, if it were considered that an Assembly measure was outside its legislative competence, another provision of another enactment might also need to be amended to reflect that. The Bill provides that any provision of a measure that is outside the legislative competence of the Assembly is not law. If it were to arise that another enactment had made provision referring to that measure, then it may be necessary to amend that other enactment as if it had never referred to the ultra vires provision of the Assembly measure. As the Scottish example shows, this will certainly be a very rare event, but the provision may well be needed.

In all cases, the Welsh Ministers and the Secretary of State, who would be engaged in considering whether to propose a draft Order in Council with retrospective effect, would have to consider the circumstances of the particular proposal. The Assembly and both Houses of Parliament would judge whether the draft Order in Council properly balanced those considerations. Such provision cannot, therefore, be made at the whim of the Executive.

I hope that finally I have convinced the noble Lord, and with this assurance I hope that he will feel able to withdraw the amendment.

My Lords, I have two questions for the Minister. First, is he saying that this provision is to deal with a situation that might arise because a measure had been made that was ultra vires, and the provision is being used to put that right?

My Lords, that is correct.

My Lords, is it limited to that?

Yes, my Lords.

My Lords, do I also understand the Minister to say that there would be no question of the Welsh Assembly Government seeking to take away the fruits of victory in litigation from the litigant and, if they attempted to do so, this Government would block them by using the blocking mechanism of a measure that is set out in the legislation? Is that right?

Yes, my Lords, I can confirm that that is the case.

My Lords, first I must say how much I have enjoyed working with the Minister throughout this Bill. He has always set out, in the speeches that he has made, a spirited defence of the Government’s position. However, in this case, far from reassuring me, he has confirmed my worst suspicions. He has done so by explaining the process that would lead to an order.

Perhaps I should say at this point that the order is not one made by the Welsh Assembly but one made by the Westminster Parliament. I am talking not about the second range of orders but about the first range.

The Minister described the process of determining whether your Lordships' House and another place should make an order as one of balancing the public interest against the rights of the individual. From that, I conclude that, even after a court has decided that a certain individual has certain rights in law as a consequence of the trial process, those rights may be retrospectively taken away from that individual if Westminster considers it in the public interest to do so. That is my understanding of what the noble Lord said. I derive no reassurance whatever from the fact that there may be similar provisions in the Scottish legislation. Those provisions may well turn out to have the same defects as, I believe, I have identified in the definitions in this Bill.

Indeed, the situation arises all the time in our own law. Where you have a piece of delegated legislation that is passed by your Lordships’ House and another place and on which people rely, and then subsequent litigation establishes that that legislation is ultra vires the primary legislation, there is no power in our constitution to retrospectively change the rights that flow from that court decision. Of course, Parliament can then change the law for the future, but not for the past.

I believe that our case here is unassailable and I should like to test the opinion of the House.

moved Amendment No. 5:

My Lords, the main feature of these amendments is that they exclude both Houses of this Parliament from the procedure for securing approval for an Order in Council amending the important Schedule 5, which lists the fields where the Assembly has legislative competence. In other words, the amendment would ensure that approval by only the Assembly was required for the statutory instrument containing the order before it was approved by Her Majesty in Council.

Orders under Clause 95 may, as subsection (1) makes clear, add, vary or remove any matter relating to one or more of the fields listed in Part 1 of Schedule 5. Orders may also add, vary or remove any field from Part 1 or make changes in Parts 2 and 3, which cover restrictions on Ministers and exceptions to those restrictions. The scope for order-making is, therefore, very extensive and fundamental in the area of legislative competence.

It cannot be right that the Assembly and its Government alone decide the extent of their legislative competence without the approval of this Parliament, which is the ultimate source of their power. The absence of parliamentary consent to the Assembly’s exercise of legislative power in an area that properly belongs to this Parliament would be totally unconstitutional. I am not a constitutional lawyer, but I am sure that I am right on this point. The practical consequences do not bear thinking about.

My Lords, I am grateful to the noble Lord, Lord Roberts, because he has largely made my case for me. The noble Lord, Lord Livsey, said that this amendment was radical. I know that “radical” is generally used in a positive way in politics in the 21st century, but the original meaning of the word is “tearing up by the root”, which is what this amendment does. It tears up the concept of devolution by the root, because it conveys to the Assembly something very close to sovereign power. The amendment allows the Assembly to accrue to itself, of its own decision, any additional powers that it wants.

When the noble Lord, Lord Livsey, sums up, can he provide an illustration of any sub-national assembly in the world, which is not sovereign, that has the right to increase its powers unilaterally, without any reference to the sovereign parliament from which it derives its original powers? If he could, I would be more than a little surprised. The amendment does not propose a concept of devolution, but an accession towards sovereignty. It would lead to a system of government entirely unrelated to the settlement that the Welsh people voted for in 1997; in fact, it would be outright independence rather than devolution.

Amendments Nos. 6 and 7 are much milder in scope and tighten the deadline. If they were accepted, the Secretary of State would have no choice whatever, and the deadline would apply to nothing more than the process of handing the draft Order in Council to the Clerk. We see merits in the Secretary of State being able to deliberate on these matters and having some time before taking action.

Those amendments are the minor part of this group, while Amendment No. 5 is the blockbuster, the radical reform. I know that noble Lords in the Liberal party are extraordinarily enthusiastic about devolution. I recognise the principle that they subscribe to; they have merit in doing that and they are joined by many other noble Lords, including some in my party. But the noble Lord is arguing for independence—that is a different matter.

My Lords, I thank noble Lords for their responses. I note what they have said and understand why they see the amendment as provocative. That, however, does not mean that there are a lot of anachronisms. The noble Lord, Lord Roberts—and, I believe, the Minister—said that it excludes both Houses of Parliament. Well, shock horror; but it is possible for an unelected House—that is, this one—to block the legislation of an elected House in Wales and to say that that is sovereign. I leave the public to decide on the justice of that argument. The noble Lord asked for an illustration; I think that that is quite a good one.

Some of the issues raised by the Minister reminded me of the problems of dominion status in times past in some countries, where sovereignty still lay in the UK but the parliaments did not have that power as the legislation was still sovereign. It is interesting to look at the New Zealand Parliament, where the second Chamber has been abolished. There is just a big void in its place and a unicameral system. The amendment probes these issues and I well understand the objections of both the government Front Bench and the Official Opposition.

My Lords, perhaps the noble Lord will allow me to intervene. If he is talking about the dominions and their frustrations, he will know that they solved their problems through independence.

My Lords, I understand that. I do not wish to have that debate here today, and I am sure that noble Lords will be grateful to me for that. I well understand the responses that I have received and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 6 and 7 not moved.]

Clause 103 [Referendum about commencement of Assembly Act provisions]:

moved Amendment No. 8:

My Lords, I never cease to marvel at the ability of the Liberal Democrats to contradict their own arguments. Even with that thought in mind, I was absolutely flabbergasted when I saw this amendment. I understand, and shall comment later on, the extraordinary complexity of the inter-relationship of Clauses 103 and 104, but the amendment would require the Secretary of State to trigger a referendum in four years’ time, whether or not the Welsh Assembly had requested or wanted it, whether or not any consultation by the Secretary of State had indicated that no one wanted it and whether or not there was likely to be a crushing defeat for further devolution if a referendum were held.

When I tried to lower the hurdles for a referendum at previous stages of the Bill, the Liberal Democrats rejected my proposal on the grounds that, if a referendum were held too early and in the wrong circumstances, it would be a catastrophic setback for the move to further devolution and it should be utterly resisted. Now, here they are, moving an amendment to force a referendum in four years’ time, whatever the results, even if the Welsh Assembly—which, reasonably, they say represents the views of the Welsh people—has not voted for it and does not want it. It is an astonishing amendment, even by the standards of the Liberal Democrats.

My Lords, curiously enough, I was of the opinion that the noble Lord, Lord Crickhowell, wanted a referendum now, so it does not follow that he should oppose holding a referendum within a timescale. It seems to me that we should give these present provisions, which are temporary—I think that everyone recognises that they are just one step forward—time to prove themselves and, within a limited period, move to a referendum. If the people of Wales decide before 2010 that they do not like the step being taken under the Bill, so be it. But we think that we should move forward and not leave it to another Administration to sit on any further moves to add to devolution for all time. A positive time limit should be placed on it.

My Lords, it is not for me, from this Dispatch Box, to intrude on private grief. The noble Lord, Lord Crickhowell, has accurately identified some clear elements of contradiction in the Liberal Democrat position on the referendum. I am in a more congenial mood and shall therefore not spend a great deal of time on that point, but I shall deal with the main issue about which the noble Lord, Lord Livsey, spoke.

I accept that the Liberal Democrats’ position on devolution is a principled one. They want to see primary powers for the Assembly, and as soon as possible. I respect that position but it is not what the Welsh people voted for in 1997; they voted for the Government's view that primary powers for the Assembly represent a fundamental change to the devolution settlement. A further referendum is required, but it must, and can, take place only when there is a broad cross-party consensus in Wales in favour of such a move. It is an easy populist line for the Liberal Democrats to set a date and to say that it should be taken out of the hands of politicians, and I have no doubt that that will win a few cheers in certain quarters. However, the political responsibility is straightforward. The referendum would be on whether the National Assembly should have increased powers, and if it were lost it would severely damage the Assembly and present considerable difficulties for its subsequent work.

It must be a political judgment and it must be right that politicians take responsibility. The Liberal Democrats are at one with the Government in seeing the Welsh Assembly’s powers increased under the Bill over the next few years—earlier than the Richard commission recommended. It will be a gradual enhancement of, and increase in, powers, subject, of course, to the Orders in Council and to the authority of this Parliament. It is then suggested that there should be an arbitrary date on which that is put before the Welsh people.

Everyone knows that referendums can be conditioned by a range of issues in addition to the matter in hand. It seems to me a denial of devolution to suggest that politicians should abrogate any responsibility for deciding the date, to say to the National Assembly that it should have no say on the date, and that the date should be imposed on it and the Welsh people by the very Parliament from which the Assembly is seeking enhanced powers.

My Lords, I have listened to the Minister with great interest. Does he, therefore, say that one should wait for a favourable time to set the dates for local government elections so that the Government can be sure of winning them? Should the European elections, the Scottish parliamentary elections, the London Assembly elections and the Welsh Assembly elections, rather than having set dates, wait until the ruling party thinks it will win?

My Lords, the noble Lord seems to have left out general elections in Britain. Is the Liberal Democrat party in favour of fixed dates for general elections? That is an interesting point.

My Lords, yes.

My Lords, in that case, I am surprised that he did not bring that into his argument. Let me be absolutely clear: there is a massive difference between elections and the concept of a referendum on a specific question put before the people for the endorsement or rejection of powers for an assembly. That is what we are debating here, not elections. We are debating a referendum. To take away from the National Assembly any control over when the case should be put to the Welsh people seems to be a denial of devolution. I hope that the noble Lord will recognise the weakness of his case and withdraw his amendment.

My Lords, I thank the Minister for his response. I hear what the noble Lord, Lord Crickhowell, says. My noble friend Lord Thomas has dealt with that. The Minister made a number of interesting points. First, he will know from previous amendments, which are not tabled today, that we are not great believers in referendums, which would affect some of the arguments that he has just deployed. The most powerful argument against his position is that the referendum date of 2011 is arbitrary. The situation is very interesting. He referred to a referendum in 1997. One does not have to be a brilliant mathematician to realise that he is saying that 14 years after the last referendum is not the time at which to have another one to decide whether the powers of the Welsh Assembly should be increased. That is a long time between one referendum and another and public opinion in Wales has changed.

In the most recent opinion polls, a majority of Welsh people wanted primary powers for the Welsh Assembly. They have been asked that question more than once in well organised opinion polls. There are two sides to this argument. Traditionally, Governments have had the power to decide when they wish a referendum to be held; this amendment would merely straighten out that situation and say that it would be reasonable to hold it in 2011 and that we should prepare for it now so that we have four years lead-in time. Those are very reasonable arguments. However, having listened to what both sides of the House have said about the amendment and, as a realist, having considered the chances of getting it through, I withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 9:

My Lords, we support this amendment, and it is a pleasant duty to do so, given the exchanges that took place earlier. There is clear agreement between us on the importance of this amendment, which addresses the ability of the Secretary of State to refuse to lay an Order in Council before Parliament if the Assembly has passed a resolution asking for a referendum to be held. On Report, we agreed that a two-thirds majority is appropriate, but others did not agree. Given that that is now in the Bill, it is nothing short of scandalous that the Secretary of State has the power to deny such a request.

Either there is a belief in democracy or there is not. The process in the Bill is clearly not democratic, as the Secretary of State can veto an Order in Council for a referendum to be held. The noble Lord, Lord Roberts of Conwy, has deployed all the arguments about why that is wrong, and I do not wish to delay the House further. I entirely agree with him that a referendum is a special category and that to deny a referendum is not appropriate. He is clearly also right to say that only Parliament should have the power to overrule the Assembly in such a situation. Therefore, we support the noble Lord’s amendment.

My Lords, the noble Lord, Lord Roberts, quoted the view of the noble Lord, Lord Kingsland, that this is a centralising Bill that transfers powers to the Executive, not to democratic bodies. That is nonsense. The vast majority of the Bill gives enhanced legislative powers to a democratic Assembly in Wales. That is the burden and central thrust of the Bill. It is anything but centralising.

My Lords, as the noble Lord referred to my noble friend, I shall repeat the quotation:

“The real shift in power is from this Parliament to the Executive and the Secretary of State”.—[Official Report, 28/6/06; col. 1237.]

My Lords, that begs the question. The Executive to which these powers are being transferred are the same as the Executive here at Westminster: they are answerable and accountable to an elected Assembly. They have to get measures through using procedure that is almost identical to that used here for primary legislation. We are handing powers to an Executive in the Welsh Assembly and that Executive are directly accountable and answerable to that elected Assembly. That is not a shift of power to an Executive; it is a shift of power from this Parliament to the Welsh Assembly, from this Executive to the Executive in Cardiff. That is not centralising; it is genuine devolution. This is a devolution Bill and should not be portrayed in any other way.

The Secretary of State’s power was portrayed in speeches from the opposition Benches as an autocratic decision made by one person. If a Secretary of State made a decision not to put an order before Parliament, he or she would be reflecting not a personal view, but the view of the Government of the United Kingdom, which would presumably hold a majority in this Parliament. Therefore, it does not seem unreasonable that the Secretary of State of the day should be made to give reasons for doing that.

We all accept that the situation would be extraordinary, but this amendment would remove the provision requiring the Secretary of State who took such an extraordinary decision—presumably with the full authority of the United Kingdom Cabinet and Government at Westminster—to explain why he or she would not bring an order before both Houses. It seems reasonable to have a provision requiring the Secretary of State to give reasons for doing that, because I agree that it would be an extraordinary situation and something of a constitutional crisis, given that the United Kingdom Government would be overriding the request and the clear wish of the Welsh Assembly.

There are two rights here. There are two democracies. There are occasions when we talk almost as if the only democrats who exist are in the Welsh Assembly. There are democrats here who are elected and have a right to express their views. If the United Kingdom Government of the day, for the most extraordinary reasons, which I find difficult to envisage, decided that they could not support the call for a referendum at that time, it is perfectly reasonable that provision should be made requiring the Secretary of State, on behalf of the United Kingdom, to give his reasons and to explain them clearly.

My Lords, does the noble Lord agree with the point made by the noble Lord, Lord Roberts of Conwy, that it would be for Parliament to block the referendum, not a Secretary of State expressing the UK Government’s point of view? As the noble Lord says, one would envisage that the UK Government would be supported with a majority in Parliament. The matter would therefore be subject to debate, but they would have their way.

My Lords, I understand the point that the noble Lord is making, but let us talk real politics. If the Secretary of State, representing the United Kingdom Government of the day, said, “We will oppose this order if it is brought before the House”, and if that Government had a majority in the House, the inevitable consequence would be a defeat of the order. We should be more realistic about party politics. If one could not persuade the Secretary of State and the United Kingdom Government of the day, it would be almost a nonsense to bring an order before the House unless one thought that there was going to be genuine rebellion of one kind or another that could overturn the Government. I see the validity theoretically, but not in real politics.

My Lords, in rising to support my noble friend’s amendment, I want to take up the exchange that has just taken place and the arguments advanced at an earlier stage of our proceedings by the Minister, who basically said that the role of the Secretary of State is to find out what the rest of the United Kingdom thinks and then express those views—really, therefore, to decide whether there should be an English veto over the request advanced by the Welsh Assembly.

The noble Lord, Lord Rowlands, was suggesting that it was perfectly reasonable that the Secretary of State should have the opportunity to argue the case to Parliament, but that is not what the Bill provides for. It says that the Secretary of State can refuse to lay the order in the first place and therefore cut off any chance of its proceeding. My response to the Minister is that of course the Secretary of State can consult and report to Parliament what in his and the Government’s judgment are the views and opinions in England. Surely it is then for Parliament, in this House and in another place, to listen to those arguments and to decide on their validity; it is for Parliament to weigh up whether it should take more account of the views of the rest of the United Kingdom put to them by the Secretary of State than of the views of the Welsh Assembly, which would have requested that the referendum be held. It would be open to Parliament to say no to the Welsh Assembly, although in my judgment it would be unwise to veto the proposal at that stage if the request had been made.

I believe that my noble friend is right in seeking to delete the power of the Secretary of State to say no. Of course the Secretary of State can express his opinion and report on the outcome of his consultations, but surely it is then for Parliament—the other place in particular, in this case—to decide on the merits of the order. That is a perfectly adequate defence.

My Lords, we have had an interesting debate on this important amendment. As far as the Government are concerned, this is not an issue of seeking to aggrandise the Secretary of State, but we think there is an issue of constitutional principle here, and that is what I want to defend.

I also want to disabuse the House of the notion that the amendment would be an essential defence against a Government who were hostile to a referendum being conducted in Wales, and so should be put in the Bill. The simple fact is that if a Government were hostile to a referendum and potential progress on devolution, they would just produce primary legislation to take out Part 4 of the Bill entirely. If they were set upon that course, nothing would prevent them so doing, provided they could command a majority in both Houses. The amendment cannot stand as the essential defence against such action and should not be supported as such, because it will not provide that defence.

I agree with all noble Lords who have spoken that it would be a somewhat unwise Secretary of State who sought to block a referendum when the National Assembly had expressed itself in these terms by a two-thirds majority. Nevertheless, we think that the Secretary of State should have some discretion in this matter and be able to take account of the views expressed in consultation. If the order is to be laid before Parliament, that is the proper responsibility of the Minister of the Crown. It is not constitutionally defensible for the Assembly to be able to demand that the Secretary of State does this regardless of whether he has the will to do so. That is an important constitutional point.

I am not opposing the amendment on the grounds that the Bill needs a new roadblock against devolution. I cannot foresee the circumstances in which a Secretary of State would take such action when faced, as I have indicated, with a majority decision of the Assembly, but there are proper lines of constitutional accountability, which is why the Secretary of State’s position needs to be defined in these terms.

There are also genuine practical reasons why the Secretary of State should not be constrained to lay a draft order within 120 days, as the amendment requires. He or she would still have to comply with the requirements of Clause 103 before doing so, including possibly the preparation of the draft order itself and statutory consultation. It would also be the case that the draft order would be laid before the Assembly before it was laid before Parliament. The amendment would leave no scope for altering that timescale should it not be possible to complete all those steps within 120 days.

My Lords, I must point out that the 120 days is actually the Government’s proposal in Clause 104.

Of course it is, my Lords, but I am indicating that within this framework we need discretion for the Secretary of State. If the120 days were not long enough in practice, it would be perfectly possible for the Secretary of State to say to the First Minister that the draft order could not be laid at that moment. The amendment does not take any account of difficulties of that kind.

We cannot foresee the circumstances in which the Assembly might have arrived at its two-thirds majority. There are practical issues. We properly require some discretion for the Secretary of State because constitutionally it is he, at the end of the day, who is responsible to Parliament for actions that are taken. The amendment takes that power from the Secretary of State.

My Lords, do I understand the Minister to be introducing a new constitutional principle—he says that it is a matter of principle—that the Executive are now sovereign? I thought that Parliament was sovereign. I really do not follow why he says that the Secretary of State cannot be told to do something.

My Lords, of course I am not gainsaying the sovereignty of Parliament. In fact, as the noble Lord will recognise, in my opening remarks I said that the obligation is on the Secretary of State to lay the order before Parliament—the sovereign body—and not to be dictated to by the National Assembly, which would be the effect of the amendment. Under the amendment, the Secretary of State would be obliged to deliver the order within the timescale specified with no discretion.

My Lords, surely if Parliament has laid down that mechanism in the Act, there is no question of the Welsh Assembly dictating to the Secretary of State, it is just fulfilling the mechanism that Parliament has given to it.

But, my Lords, within the Bill, which I and, I hope, the noble Lord, want to be enacted in the fairly near future, we seek to preserve the proper constitutional responsibility of the Secretary of State for tabling of orders to the sovereign Parliament, because he is answerable to it in a way that the National Assembly clearly is not. The amendment will not achieve what it appears to be intended to do—to guarantee that no government could interfere with the process if it were hostile to what the National Assembly sought. The Government would have other powers by which to carry out their will if, misguidedly, they decided so to do.

It is essential that the constitutional requirements and role of the Secretary of State are preserved. On that basis, I ask the noble Lord to withdraw his amendment.

My Lords, I am grateful to all those who have participated in this debate, especially to those who have supported the amendment, which I am convinced is absolutely right for the simple reason that the Bill spells out the proper procedure. It is not an easy procedure to follow, as we have already established. The two-thirds majority hurdle must be overcome in the Assembly. It is not just two-thirds of those who vote, it is two-thirds of the seats. That means that 40 out of 60 Members must vote for the Motion. Then, to abbreviate the procedure, the resolution must be approved by both Houses of this Parliament. It seems to me that the role of the Secretary of State in interfering in that process—the cut-off power that has been referred to, the power to say no and to veto the Assembly’s wish—deprives these Houses of Parliament of their right to say no. For that reason, I seek to test the opinion of the House.

moved Amendment No. 10:

My Lords, I am grateful to the noble Lord for raising this issue and I do not think there is any difference in intention between the Government and what the noble Lord has expressed in terms of the process that should be conducted. We think that we have described in the Bill a process which ought to assuage his anxieties about these issues, although I recognise that with his amendment he is seeking to be more specific.

In practice, the sequence of events for approving a draft referendum Order in Council will be that the statutory consultation would take place first, and then the draft laid before the Assembly for approval because if it were not approved by a two-thirds majority, that would be the end of it. If it is approved, the Secretary of State would lay the draft before both Houses of Parliament for approval. That was the process we envisaged in the Bill until the recent amendment of the noble Lord, Lord Roberts. It is not necessary for Clause 104 to repeat the provisions of Clause 103. Clause 104(3)(a) refers to a draft referendum order under Clause 103(1). That reference attracts the rest of the provisions of Clause 103 and it is clear that all the provisions set out in that clause must be complied with in order to hold a referendum. Clause 103 governs the process. It is therefore not necessary to spell out that the Secretary of State must communicate the results of the consultation exercise to the Assembly. If the outcome of that consultation were to lead to the Secretary of State not laying a draft order before Parliament, that would be made clear in the reasons given to the Assembly under Clause 104.

What we do expect is for the Secretary of State to be in close contact with the Assembly First Minister on the most important issue that the Assembly is likely to consider. We naturally would expect the Secretary of State to inform the First Minister of when the consultation had been completed and its results simply as a matter of good governance and proper administration. The aim of the legislation as drafted is to set out a minimum of what must be done rather than to spell out in every detail the process which needs to be carried out administratively.

I hear what the noble Lord says and understand that he is seeking to be helpful and constructive here, but I think we have it right in these two clauses. We have described the essential process, but the nature of the administration is a matter for governance and administration, and therefore does not need to be spelt out in the Bill. I hope the noble Lord will see that we are of like minds on what should happen and is destined to happen, without the need for an additional amendment.

My Lords, I observed earlier that one of the difficulties here is that we start with Clause 104 and then have to refer back to Clause 103, a point made by the noble Lord. It is one of those back-to-front arrangements of clauses that appears in the Bill not only on this occasion, which makes it quite difficult to interpret. The noble Lord has not said anything to sustain an argument for not including my helpful clarification. While I have not attempted in any way to alter the Bill, it would make the situation a bit clearer. I therefore regret that he does not eagerly accept my amendment, which would have been the simple thing to do and would have brought a little satisfaction to me. We could have finished the Third Reading in a welter of harmony and happiness, but since he will not do that, I hope that I have at least been able to clarify exactly what the arrangements and procedures are. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 11 not moved.]

Clause 150 [Power to make consequential provision]:

moved AmendmentNo. 12:

moved AmendmentNo. 13:

moved AmendmentNo. 14:

My Lords, very briefly, I have some sympathy with the amendment because I am antipathetic to the clause, which appears to be based on central Government’s most profound suspicions of the Assembly and its Ministers in matters relating to water. What wickedness do the Government think Welsh Ministers might perpetrate that could have such,

“a serious adverse impact on”,

water resources supply and water quality in England as to warrant the brisk intervention and possible takeover of functions by the Secretary of State? The mind boggles.

I agree with the noble Lord, Lord Livsey, that the clause seems excessive in another way: it concentrates on England's water interests and ignores Welsh interests entirely. I therefore sympathise with the spirit of the amendment, and I shall await the Government’s justification of this rigorous clause.

My Lords, those of us who live in Wales, or visit it, can still see the slogan after 40 years, “Cofia Tryweryn”—remember Tryweryn. That valley was drowned 40 years ago to provide a reservoir to serve the city of Liverpool. That act triggered great discontent and anger in Wales. Every Welsh Member of Parliament voted against the proposal, but their voices were not listened to. It was only last year that, under the guidance of the then leader of Liverpool City Council, Councillor Mike Storey, that Liverpool apologised for the insensitive way that its predecessor council had acted. To allow this Government of Wales Bill to have its Third Reading without this amendment is again most insensitive and needlessly provocative.

All we ask is that the needs of water provision for Wales be treated equally with the needs of England. So many of the natural resources of Wales—its coal mining, its quarrying industry, the greatest iron and steel manufacturing base in the world, the once great ports of Cardiff and Swansea—belong to the past. Time and again Wales' confidence and dignity have been undermined. Sometimes we concern ourselves with the effect on people who have lost their sense of self-worth and value, but that can happen also to nations. I would suggest in supporting the amendment that to deny Wales a substantial voice in the provision of water within its own borders not only is insensitive but also once again undermines the dignity of the Welsh nation.

My Lords, I support the amendment. It so happens that my daughter-in-law’s family farm was drowned in Tryweryn, to which the noble Lord referred a moment ago, and I am very conscious of the impact that that has had on the community there. Subsequently I appeared with my noble friend Lord Hooson on behalf of the objectors to the proposal to drown the Dulas Valley, south of Llanidloes. It was a hotly fought battle between the local community and the city of Birmingham, which wished to drown it. I am happy to say that the then Secretary of State for Wales upheld the inspector's recommendation that that valley should not be drowned and that no other valley in Wales would be drowned in this way ever again. It was a Labour Secretary of State who said it and we would hold this Government to the promise.

It is a highly emotive issue. When we see such a clause in the Bill, as the noble Lord, Lord Roberts, said a moment ago, we wonder what is going on. Why should there be a specific reference to what remains a large natural resource in Wales? I fully support the amendment.

My Lords, when the noble Lord, Lord Livsey, rose to his feet he said that we had a debate on this very late at night. My memory is that it was a very full and interesting discussion even though it was late at night. All of the issues which have come up today were raised in that late-evening debate. As we heard, Amendment No. 14 would remove the Secretary of State's power to intervene in the exercise of functions by the Welsh Ministers or others where it appears to him or her that that might have a serious impact on water resources supply or quality in England. That power would be replaced by a duty to make representations to the Assembly in such circumstances.

As I highlighted on Report, the subject of this clause is executive functions. After the separation brought about by the Bill, the Assembly will cease to be a corporate body and the executive functions will become the preserve of Welsh Ministers, not the Assembly. Therefore, the Assembly cannot decide whether to continue exercising the function or have regard to the representations of the Secretary of State. The Assembly will not be exercising this function. That said, Welsh Ministers will in the exercise of their functions relating to water have to have regard to the impact on Welsh water. Of course the Secretary of State will make representations to the Welsh Ministers on a government-to-government basis if they are considering an action that could have an adverse effect on English water.

I heard what the noble Lord, Lord Roberts of Llandudno, said, but we are talking about something that happened 50 years ago—

Forty years ago.

Forty years, my Lords; I beg the noble Lord’s pardon. It happened a mere 40 years ago. The noble Lord, Lord Livsey, quoted the noble Lord, Lord Elystan-Morgan, at Report stage. I will offer him another quotation which I think has a very precise bearing on the issue we are discussing.

My Lords, reference has been made to my noble friend Lord Elystan-Morgan. He very much regrets that he is unable to be present today, but he is presiding over the degree-awarding ceremony at the University of Wales, Aberystwyth, which is a very important event in the university calendar.

My Lords, I am grateful to my noble friend for drawing that to our attention.

The point that I was making was that the noble Lord, Lord Livsey, quoted the noble Lord, Lord Elystan-Morgan, who said something else on Report—that:

“If there ever was an attempt to aggrandise a Welsh valley in the way that Liverpool did almost 50 years ago, it would be the biggest boost to Welsh nationalism that has ever occurred”.—[Official Report, 28/6/06; col. 1289.]

The Government entirely agree. It is almost inconceivable that a future Secretary of State, from whatever party, would behave in such a recklessly provocative and incendiary fashion. I cannot imagine the circumstances that arose with the Liverpool example 40 years ago ever being repeated.

The Government’s expectation is that, if differences arose between the two Governments, every possible effort would be made to resolve them through discussion and dialogue, with both sides fully aware of the sensitivities involved. A number of noble Lords have raised the business of equality—that all that Wales wishes for is equality with England. It is important to remember that, if the relevant Secretary of State intervened, he or she would have to take into account the interests of England and Wales. Under the present settlement, that is the constitutional position. There is no reason for noble Lords, particularly those from Wales, to be as concerned as they are. It is still necessary for the Secretary of State to have the power to intervene as a last resort if agreement is not reached and he or she believes that the actions of Welsh Ministers will have a serious impact on water resources, supply or quality in England.

A crucial point made on Report—I think it was by the noble Lord, Lord Crickhowell—was that the geological nature of Wales was not linked to the political map, and the geological reality is that the great rivers of Wales flow into England and not the other way round. Equally, a large part of the water supply to England comes from Wales, but Wales does not rely for a large part of its water supply on England, if any part at all. The provision reflects the way in which most of the water flows—out of Wales and into England, and not the other way round. The Bill has to provide for the intervention powers because of that reality. Matters such as the approval of significant new development by Welsh Ministers could have a serious adverse effect on water resources, supply or quality in England.

The intervention powers provide an important and effective safeguard for the interests of water users in England, but there is no reason to expect that the Assembly or Welsh Ministers would use their powers irresponsibly and that the intervention powers would need to be used other than as a very last resort. As we have had another interesting debate on the subject, I hope that there is an understanding of the position and that the noble Lord will feel able to withdraw the amendment.

My Lords, we have indeed had an interesting debate, and a number of assumptions have been made. I particularly thank the noble Lord, Lord Roberts of Conwy, for sympathising with our amendment. I am sure that he heard what the Minister said about it; the noble Lord said that he was going to wait for that. I thank my noble friends Lord Roberts of Llandudno and Lord Thomas of Gresford for their personal appeal on the issue and for underlining its importance in Wales. I reiterate that, in spite of what the Minister said about executive functions, if the Assembly expressed a substantial opinion about water it is unlikely that the Executive would disagree.

We do not understand the approach to the issue of equality. All that we ask for is equality. The Minister rightly quoted other comments that the noble Lord, Lord Elystan-Morgan, made during our recent debate. However, it looks to me as though we cannot even get equality; that is basically what we have been told. Of course the geological reality is that water flows into England, but the Bill protects England while Wales is ignored. I wish to test the opinion of the House on the issue, which is vital to those of us in Wales.

moved Amendment No. 15:

My Lords, we are very grateful to the noble Lord for having given us prior notice of these technical amendments. We have been able to study them and we are very happy to approve them. I take this opportunity to thank both Ministers who have helped us all during the passage of the Bill. I also say a special thank you to those who have helped me on the Opposition Front Bench, namely my noble friends Lord Henley, Lord Hunt of Wirral, Lord Kingsland and Lady Noakes. There was also a notable contribution from the Back Benches from my noble friend Lord Crickhowell.

My Lords, we on these Benches would like add to what has been said. I thank my noble friends Lord Thomas of Gresford and Lord Roberts of Llandudno for their strong support in conducting the Bill through the House. I would particularly like to thank the Ministers, the noble Lords, Lord Davies and Lord Evans, and also the noble Baroness who, I remember, participated at one stage earlier in the Bill, for the patient way in which they have dealt with the Bill and the tolerance they have shown towards a number of things that have been said during proceedings on the Bill.

I also thank the Bill team. We have just seen the amendments that the Minister has just brought forward. From what I can see, all of them are essential in terms of drafting, and that means that a great deal of thorough work has been carried out by the Bill team, which we very much appreciate.

On Question, amendment agreed to.

moved Amendment No. 16:

moved Amendment No. 17:

moved Amendments Nos. 18 to 21:

moved Amendments Nos. 22 to 25:

moved Amendment No. 26:

My Lords, I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(Lord Evans of Temple Guiting.)

On Question, Bill passed, and returned to the Commons with amendments.

moved Amendment No. 1:

My Lords, I support the amendments of the noble Lord, Lord Clifton. As the noble Lord has already said, we had a long debate in Committee and we also believe that 10 years is far too long. I also agree with the Government that one year is far too short because it is expensive and impractical. If I remember right, we felt at the Committee stage that some form of compromise between one year and 10 years would be the right way to go. The amendments seem to cover the right number of election periods and would allow the electoral officer time to get his or her feet under the table and to get a grip of the electorate and the register. Because of the considerable movement of the electorate in Northern Ireland—with students growing up and going abroad, people coming in, families moving and so on, it is a very mobile electorate—we feel that 10 years is much too long and five years is probably an appropriate compromise.

My Lords, as I will probably say quite a few times today, as I said in Grand Committee where these amendments were also tabled, under the new arrangements, the Chief Election Officer’s enhanced data sharing powers will replace the canvass as the central means by which he will ensure the accuracy and comprehensiveness of the Northern Ireland register.

The provision to hold the canvass every tenth year is the backstop to underpin confidence and provide a safeguard for these new arrangements. It will no longer, however, provide the substantive means of refreshing the register, which will be done on an ongoing basis under the new arrangements set out under Clause 7. So it is not, as one might think from the brief speeches, that we are simply abolishing registration and doing nothing about it because the new arrangements are set out quite clearly under Clause 7. Therefore no advantage would be gained from the canvass being held on a more regular basis, only an unnecessary expenditure of resources. In addition, the clause makes provision for a canvass to be held in any year if the Chief Elections Officer makes a recommendation to the Secretary of State by 15 April that year and the Secretary of State is satisfied that the public interest requires the canvass.

Clause 3 also makes clear that the Government’s intention is that there will be a canvass in 2010, by which point we hope that the new arrangements will be fully embedded and everyone will be able to see that. However, should the elections officer feel that a canvass is not necessary at that time in order for him to meet the relevant registration objectives—perhaps on the basis that he feels the register is comprehensive and accurate and would not be improved significantly by the canvass—he would be able to recommend to the Secretary of State that a canvass should not take place in 2010. In the case of such a recommendation—and only in that case—the Secretary of State will be able to make an order to remove the requirement for a canvass in 2010. That decision of the Secretary of State will be subject to approval by each House of Parliament here at Westminster.

Canvasses are resource intensive, both in labour and money, and it is only right that the Chief Elections Officer should be able to decide how his resources would be best deployed in determining whether or not a canvass is necessary in 2010—which, of course, is only four years after the final annual canvass as planned under the legislation. In addition, Clause 3 also makes it clear that if there is no canvass in 2010 and one has not been held before the end of 2015, one must be held in 2016, which would of course be 10 years after the final annual canvass proposed under the legislation presently before your Lordships’ House.

We think that all the mechanisms in place and the access to information set out in the Bill, but not subject to these amendments, which were debated at some length in Grand Committee, are such that we are confident that the Chief Elections Officer can carry out a comprehensive canvass and keep it up to date using all the means at his or her disposal. This would include checking on the movements of people—the noble Lord, Lord Glentoran, said it is a moving population—which have to be recorded for all kinds of purposes. Whether it is rents for landlords, local authority services and other such matters, the elections officer will have access to that information for that purpose. Of course, he will not have access to medical records and other such matters, but he or she will have access to information to create an accurate register in Northern Ireland and then have the means to keep it up to date. Therefore we do not think these amendments are required.

My Lords, I thank the Minister for repeating very much what he said in Grand Committee. There has clearly been no shift in the Government’s opinion in this regard. This will put a very great responsibility on the electoral registration officer and we must have faith in him or her that they will be as diligent as they need to be. We would prefer a formal review and canvass every five years. However, in view of what the Minister has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 to 6 not moved.]

Clause 12 [Extension of categories of permissible donors]:

moved Amendment No. 7:

My Lords, in speaking to Amendment No. 8 in my name, I shall also speak to the Liberal Democrat Amendment No. 7. This is an important issue. At the end of the Committee stage, I certainly did not feel that the Government had any idea how they were going to manage this. The Minister was very keen to assure us that the laws were sufficient safeguards and that our regulations would remain consistent with those of the Republic of Ireland. My information, in private discussions with Irish Government Members, does not encourage me to think that way at all—rather the reverse.

A number of serious offences can be committed by a party in this area, including submitting an inaccurate form and facilitating donations from impermissible donors. People unconnected with the party can also commit offences. That is all fairly familiar to us. It is an offence to withhold information from a party about a possible illegal donation.

Can the Minister explain exactly who will have responsibility for investigating all these possibilities in Northern Ireland and abroad and when many of them will take place? Can he explain exactly who will be making sure that political funds come from legitimate sources, not bank robberies, illegal donations or extortion money? Is the Electoral Commission to be given wide-ranging new powers to travel abroad to ensure that the people involved are who they claim to be, or will that role be delegated to the Irish authorities or the authorities of the country in which the donor is resident?

The recent controversy over party fundraising merely serves to highlight how important it is to maintain complete transparency about where parties get their money from. Little more needs to be said. I do not believe that the Government have a grip on this or that they understand how they will manage this. I would like to hear it from the Minister.

My Lords, the noble Lord has just raised a point that he did not raise in Committee. It is not a feature of the current controversy over donations to political parties. He actually spoke about where the donor gets the money from. That is a new issue; it has not been raised before. I cannot see how that can legitimately be put on the agenda. Where the parties get their money from is one thing, but asking where the donor got the money from is a different kettle of fish altogether. I regret that I do not have a lot more to say than I said in Grand Committee.

Amendment No. 8 requires the Secretary of State to report on the operation of the provisions set out in Chapter 6, but the operation of these provisions is a matter for the Electoral Commission. The commission is an independent body, set up by Parliament, and it would not be appropriate to require the Secretary of State to report in this way to the House on the commission’s work. There are plenty of opportunities for the commission to be accountable for its responsibilities. Parliament has set up the commission to do a job; it is not for the Secretary of State to report on it or second-guess it.

I appreciate the thrust of both amendments and all those relating to donations in Northern Ireland, which we debated at some length in Grand Committee. We have considered the argument since 22 June when we debated these issues. We think that we are right to resist the amendments for the reasons I outlined then, which I will briefly reiterate.

I would welcome noble Lords accepting that the Bill is a big step towards ending the current situation with regard to political donations in Northern Ireland. The present situation is untenable, unfair, undemocratic and hidden. The Bill is a massive step towards changing that process. As usual, when you give the Opposition a yard, they ask for a mile. That is what we used to do in our 18 years in opposition, of course but it would be nice if people accepted that the Bill is a big step forward.

As was mentioned in Committee, the ending of the disapplication period is, as the noble Lord, Lord Glentoran, said, eagerly anticipated. Under these provisions, the end is in sight. Following the end of disapplication, Northern Ireland political parties and regulated donees will continue to be able to accept donations from Irish citizens and other Irish bodies which can currently donate to Irish parties in the Republic. That is the Government’s policy; it represents a considerable narrowing of the regime as it exists, while ensuring that the special place of Ireland in the political life of Northern Ireland will continue to be respected.

We would like to stress that the precise conditions setting out the eligibility criteria for donating to Northern Ireland parties will be specified in legislation made in this Parliament. That is one of the reasons why I do not have the details with me today; we will be debating them at some time in the future.

It is worth repeating that legislation is not the end of the matter. This House will have the opportunity to debate the proposals in considerable detail. The new Chapter 6 inserted in the Political Parties, Elections and Referendums Act 2000 by Clause 12 makes it clear that the prescribed conditions which additional categories of donors will have to meet can be prescribed only by the Secretary of State following consultation with the Electoral Commission. Such an order would have to be laid before and approved by a resolution of each House of Parliament here at Westminster. The conditions that these additional categories of donors will have to comply with will therefore be fully and publicly debated in both Houses at the time they are made. That is a big step forward from the current position—donations may come from anywhere and anyone in the world, and there is no obligation on parties to disclose them.

It is scandalous that Northern Ireland has been allowed this period of time, compared with Great Britain. We have to regulate the situation. As Northern Ireland moves towards a normal civic society, it must start to work within normal civic rules, and one of those is that donations to political parties are upfront and transparent. Like in Great Britain, they cannot come from anybody, anywhere in the world. However, no one is expecting the arrangements to be made overnight.

Under the new arrangements, donations to Northern Ireland parties, including those from Irish donors, will be subject to regulation and verification by the Electoral Commission until the end of the transitional period, which we hope will be in 2010. Any impermissible donations will be required to be returned to the donor, or forfeited.

My Lords, have there been any discussions between the Northern Ireland Office and the appropriate Ministers in the south about precisely how this will be managed?

My Lords, I apologise, but I do not have the precise answer at the moment. I should like to deal with a couple of other points that I missed.

I was asked about setting out the conditions for eligibility in the Bill as to how this will work in practice. I do not have the details yet; they willcome to the House in the form of secondary legislation. We need to consult the Electoral Commission and the Irish Government further. We have been consulting them to get as far as we have with this legislation, but we do not have all the i’s dotted and the t’s crossed. We have to consult further to determine the conditions for eligibility, which need to be fair, effective and enforceable. It is no good having something that looks okay; that would be a sop. The Electoral Commission must be able to enforce the situation and the political parties must understand how these arrangements will operate on the ground. I do not know the details because I was not involved in this when I was a direct rule Minister. It was not part of my day job. I know that discussions have taken place and that we need further discussions. There have been ongoing discussions between government officials and officials from the Government of the Irish Republic. To the best of my knowledge, Ministers have not been involved. Things may have been discussed at the highest level, but those ongoing discussions between officials have been to try to arrive at a solution which will then be put to the Ministers of both Administrations for approval before they come to Parliament.

My Lords, I am grateful for that further elucidation from the Minister, but what we are considering today is premature. We would have liked to have had the “i”s dotted and the “t”s crossed so that we could debate the detail now in the context of this Bill. That is what makes this unsatisfactory.

My Lords, that is unreasonable. The noble Lord has not acknowledged that the legislation is a big step forward. It is in the style of enabling legislation. We need to get this on to the statute book to get to the detail. We could not put that kind of detail into the legislation. We need to come forward with proposals that will be introduced to Parliament. The parties concerned will need to be consulted on them and there will need to be some agreement between the two Governments in any event. There will be an opportunity to debate the detail when we have it ready. In other words, if we pass this legislation today, nothing can happen about donations to political parties until we have the other legislation in place.

It is not as though the House is being asked to approve this legislation which then sets up a brand new system of transparency, fairness, enforceability and a tightening of the rules. We need the other legislation. There will be another opportunity—probably more than one—for the House to debate these matters in detail. It would be fair to treat this as enabling legislation to take us forward. Implicit in this legislation is a large degree of narrowing of the sources of funds that can come to the political parties in Northern Ireland.

My Lords, I agree entirely with the noble Lord that the present system of donations for political parties in Northern Ireland—external and foreign donations—is scandalous and requires tightening up. However, we need clarification. Are we talking simply about Irish people donating to political parties in Northern Ireland? If that is so, it is discriminatory, because in practice funds will go only to the SDLP and Sinn Fein—the minority, Irish parties in Northern Ireland—not to the majority parties in Northern Ireland, the Ulster Unionist Party and the Democratic Unionist Party.

Secondly, if this facility continues to be extended to Irish people to donate funds to Northern Ireland parties, will the same facility exist for Commonwealth citizens to do so? Only then will there be equality so that the unionist parties will benefit equally, because this provision seems to give funds only to the Irish nationalist parties in Northern Ireland.

Also, why are the Government discussing electoral affairs in the United Kingdom with a foreign Government?

My Lords, I understand that, under the rules governing Report, I am not required to answer those questions. However, I want to co-operate, so I will try to answer them. If the noble Lord is concerned about discussions between the United Kingdom Government and the Government of the Republic over this matter, he will be more worried after 24 November if the Assembly does not return, because discussions will deepen. Economic forces are at work that are causing more co-operation between north and south than ever before, leaving aside the political considerations.

The rules are that Irish citizens anywhere in the world can donate to Irish political parties; therefore, donations can come from abroad. Company legislation is much more constrained. You cannot put a brass plate on the Dublin office of a foreign company and use that as a basis for making donations. You have to have a significant commercial enterprise in the Republic to be able to donate. The noble Lord has no grounds for asserting which political parties the money will go to. We are regulating individuals and they are entitled to send their money to whichever political party they want. It is their choice whether it is a unionist or nationalist party.

My Lords, that argument is facile. This is not an economic matter; it is about electoral law in the United Kingdom. The Government are negotiating with a foreign country about what electoral law in the United Kingdom should be. I accept that in theory it means that money can go to any political party in Northern Ireland, but coming from Northern Ireland, I know that Irish funding for political parties will go only to the SDLP and Sinn Fein/IRA; it will not go to the unionist parties.

My Lords, I gently remind the House that we are on Report. Nobody except the mover of the amendment is able to speak after the Minister has sat down.

My Lords, I thank the Minister for his explanation. We have just had an illustration of how fraught the politics of Northern Ireland are. Although I welcome the thrust of this Bill and the point that it is making—I said that at the beginning—we want to know more about the technical details. The Minister said that this was an enabling provision and that we would have an opportunity to discuss the details through secondary legislation. The Minister knows full well my view that recourse to secondary legislation on the scale to which Northern Ireland has been subjected raises serious concerns. With secondary legislation, we have to take it or leave it, which is a real problem. However, reluctantly in the light of what the Minister has said, I will not press this amendment and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

moved Amendment No. 9:

My Lords, I want to underline that I consider this a most discriminatory measure, and Her Majesty's Government should hang their head in shame, because it favours Irish nationalismin practice and discriminates against the British majority in Northern Ireland. Extending these facilities to Irish citizens and people who claim Irish nationality across the world means that, in practice, it will support only those parties that wish to subvert Northern Ireland’s position in the United Kingdom. We are preparing a measure that supports the financing of parties that wish to destroy the United Kingdom.

I am very keen that Commonwealth citizens should have the same facilities, but why do they not have the same possibilities as Irish people across the world? Is it because Spain has successfully applied to the European Court of Justice to ban the right of1 million Commonwealth citizens in the United Kingdom to vote in European elections?

My Lords, if the noble Lord, Lord Glentoran, pressed the amendment, we would support it.

My Lords, I shall try to give a bit more explanation, although we debated this in Grand Committee. That is not an excuse for not discussing this matter, as noble Lords have every right to bring it back on Report.

I should tell the noble Lord, Lord Kilclooney, that, as I said in my original response, the Bill takes account of the special factors on the island of Ireland. We are not denying that; it is not being slipped in by the back door. It is open to anybody in the United Kingdom—England, Scotland and Wales—if they are on the electoral register, to donate to the political parties in Northern Ireland. The unionists in Northern Ireland are not limited to raising funds in Northern Ireland. Anyone would think that they were being treated differently from everybody else in the UK, but they are not; people are free to give to political parties in the United Kingdom, if they are on the electoral register. It is up to them who they give to; it is not a closed area. It is not as though unionists are prevented from seeking funds outside Northern Ireland. There is the rest of the United Kingdom, for a start.

The debate which we have just had on Amendments Nos. 7 and 8 goes to the reasoning behind these clauses, and I shall have to repeat some of those points. This is a big step forward. At present, notwithstanding the complaints of the noble Lord, Lord Kilclooney, anybody in the world can get money into the Northern Ireland political parties secretly, without anything being published or known about it. This Bill stops that. It does not go all the way, but it is a big step forward.

When the disapplication period is over, by 2010, Northern Ireland parties and the donees will continue to be able to accept donations from Irish citizens and other Irish bodies who are legally able to donate to Irish parties—that being the Republic. This is a narrowing of the regime. I take the point made by the noble Lord, Lord Smith, about the inability to amend secondary legislation that comes before this House, but I re-emphasise that it does not come out of the blue. It will come following consultation.

I have got something completely wrong here—if this is the case, I do not think it is fair. You have to be on the Northern Ireland electoral register to donate to Northern Ireland parties, but that cannot be the case if you can donate from abroad. If you are eligible to donate in the Republic, you are eligible to donate in the north. That is the difference. There is a restriction, but it applies equally to nationalist and unionist, because it is up to people where they give their money.

My Lords, the Minister is quite right. This is a vast improvement compared with what applies in England, Scotland and Wales. People throughout the world can send donations to political parties in Northern Ireland, but the very bad news for Northern Ireland is that Her Majesty's Government in restricting this facility are now limiting it to Irish citizens and companies and so on to send funds to political parties in Northern Ireland. I am saying, bluntly, that that is totally discriminatory. You are helping to finance Irish nationalist movements within Northern Ireland at the expense of the majority British unionist community. They should havethe same facility to get funding from British Commonwealth citizens, and you are denying them that right. It is total discrimination.

My Lords, I accept the narrowing. However, I do not have a note on this, because specified classification of Commonwealth citizens did not come up in Grand Committee. I cannot answer the point today, but there will be another opportunity at Third Reading, so we can have a look at this next week. I do not know about the Commonwealth situation, which I regret, but there is that narrowing. At present, anything goes, which must be wrong—and not only that, anything goes and it is kept secret. That must be completely wrong, too.

I realise that this is like a red rag to a bull, but there are restrictions in the Republic, which is why we in the UK must discuss this with the Government of the Republic to ensure that we get the rules right and that they are fair, transparent and enforceable. We must ensure that brass-plate companies cannot be used as a means of feeding money into Northern Ireland political parties of whatever ilk, because there would be ways round it. That is why we must have discussions. I suspect that the Irish Republic Government would probably take the same view, and that they would rather brass-plate companies could not be used to get money to political parties.

The point is that the conditions will be in separate legislation. As I was about to say before I had to dig myself out of a hole, the legislation will come to this House not out of the blue but after consultation with the Electoral Commission and all the political parties—it is not as though this is done simply with the technocrats in the Electoral Commission. All the political parties in Northern Ireland, of which there are quite a few, will have the opportunity for consultation on this issue before the order gets near the House. It is not as though this is the end of the matter. It is a significant step forward under the current arrangements. As I said, it takes account of the special historical—but what the noble Lord would consider unacceptable—relations between the parties in Northern Ireland. That is the state of play. It is the Government’s policy following the arrangements that we have made and the discussions that we have had. If I can keep going for about another 30 seconds I shall be given an important note, which I hope will set the context even further.

This Bill is not the end of the matter; it is enabling. The Electoral Commission is the guardian of the rules on funding. We must make sure that back-door routes are not made available. The political parties in Northern Ireland have to run candidates to be funded. They cannot be brass-plate political parties as well as brass-plate companies. Locks must be built in to ensure that that money cannot filter across the Irish Sea to political parties in Great Britain.

My Lords, I am grateful to the Minister for giving way. If I can buy him a few more minutes, I am not sure that it will be helpful because, although I sympathise with him, his briefing on this amendment is below the normal quality we expect from him. While we are not allowed to blame officials, they appear to be at sixes and sevens. That does not inspire great confidence that we should trust the Government to do the right thing. Therefore, if the noble Lord, Lord Glentoran, presses the amendment, we shall support him.

My Lords, it is a good job that the Lords procedure allows us to debate amendments on Third Reading. I shall not be able to answer the points that have been made. I am now told that the second note I received was wrong. I am not sure whether that means I have to withdraw my apology. It is all too complicated. I know that it is Thursday, and we have Third Reading listed for next week, but I shall have to write to noble Lords before next week on the issue of permissible donors in the UK. There is an issue here: Northern Ireland citizens are members of the United Kingdom. I shall have to get clarification on the matter. I leave aside the Commonwealth argument, which is a separate one on which I shall seek further advice.

As I said, we need to make sure that the changes do not constitute a back door route through which funds can be made available to political parties in Great Britain. That was a central issue that the noble Lord, Lord Glentoran, raised. Under the legislation, Irish citizens will be able to donate only to parties running candidates for election in Northern Ireland. Those parties will not be able to make donations to parties, regulated donees or candidates in Great Britain, so the measure cannot be used as a back door method of funding political parties in Great Britain. I gladly give way to the noble Lord.

My Lords, I hope that I can help the Minister, who might even get some respectable advice on this matter if I speak for a moment or two. Could a UKIP candidate, or the Northern Ireland branch of UKIP, be funded by citizens in the Republic of Ireland? If so, that appears to me extraordinary, particularly as the money could then be siphoned, at least in part, from UKIP Northern Ireland to UKIP Great Britain.

My Lords, that is a very good question. I am advised to include it in my reply. The noble Lord hits on an issue. It is the case at present, so far as I am aware—I stand to be corrected—that no party that is registered with the Electoral Commission to fight elections in Great Britain fights elections in Northern Ireland. That is the issue. In Northern Ireland, there are members of the main parties represented in this House, but they do not fight elections. The noble Lord referred to UKIP, which is a United Kingdom party, as indeed, are the Conservative Party, the Labour Party and the Liberal Democrats. Those parties do not fight elections under their banners in Northern Ireland. If they have branches in—

My Lords—

My Lords, let me just finish this bit or I shall get it wrong as well. If those parties fight elections in Northern Ireland with candidates, they would be eligible—they must be eligible, as much as the unionists, Sinn Fein and the SDLP—to receive donations from Irish citizens. But there must be a mechanism to make sure that that money is not used as a back door route to fund GB political parties. That would be disastrous as it would undermine the very restrictions that we are trying to place on elections in Great Britain.

The noble Lord has raised the issue, but it should not be allowed to happen, which is why it is so complicated that I will have to write to write to him.

My Lords, I wanted to make the point that there is one national party in the United Kingdom, the Conservative and Unionist Party, which does have candidates in Northern Ireland, as well as England, Scotland and Wales. It fights on a national basis. That must be taken into account.

My Lords, I do not know what is registered with the Electoral Commission, and I have not received advice on that. The funding position in Northern Ireland is quite different, and the Bill narrows that. In other words, at present, anyone from anywhere in the world can donate in secret to Northern Ireland political parties. We think that that is wrong and this Bill restricts that. It is not restricted to the level that operates in Great Britain. I do not know whether the political party that the noble Lord, Lord Tebbit, referred to is registered with the Electoral Commission—and he did not say that it was. These days you cannot go around standing for election willy-nilly, because the commission was designed to police the system. I shall make sure that this point is covered in the notes, because the noble Lord, Lord Tebbit, asked a legitimate question that needs to be answered.

My Lords, I am grateful to the noble Lord, because this is as full of holes as an Edam cheese—I think that Edam has holes in it, doesn’t it? No, not Edam—it is Gruyère. It is unlikely but not inconceivable that one or other of the Ulster unionist parties could resume the relationship that the Ulster Unionists had with the Conservative Party before 1970. That may be unlikely, but legislation should provide for what is possible and not just what is likely.

My Lords, before the Minister replies to the imaginative suggestions of the noble Lord, Lord Tebbit, relating to the intervention of the noble Lord, Lord Kilclooney, I point out that in my lifetime one of the predecessors of our party, the Liberal Party, contested seats in Northern Ireland. Who knows what might come in the future? This is a lacuna that clearly needs to be looked at.

My Lords, I agree. I have to say that to the best of my knowledge at no time was this issue covered in any of the briefings on the Bill that I have read or in any of the debates in the other place—noble Lords should not forget that the Bill came to this House having been thoroughly debated in the other place. I looked at some of the Standing Committee debates. The noble Lord, Lord Tebbit, is quite right: there was a time when the Conservative and Unionist parties were linked and fought on a UK-wide basis. At no time in any of the briefings on this legislation has that situation been envisaged for the future. I shall rest my case on that, having dug myself halfway out of the hole and I shall make sure that I write to noble Lords well before Third Reading.

My Lords, I thank the Minister for his good-humoured responses. I am now even more convinced that the solution to the noble Lord’s problems lies in my amendment, which, I hope, brings Northern Ireland pretty much into line with the United Kingdom on these matters and will tidy up all sorts of things.

Certainly, my grandfather was a member of the Conservative and Unionist Party, was Chief Whip in the other place and was a Minister of agriculture. Our parties have been together. The Conservatives now have one councillor in a local authority and we are very much involved in Northern Ireland politics. I beg to test the opinion of the House.

moved Amendment No. 10:

moved Amendment No. 11:

My Lords, this amendment empowers the Secretary of State to require the Presiding Officer to move a motion in the Assembly excluding people from office if they or their parties do not support the police and uphold the rule of law. As the noble Lord, Lord Glentoran, pointed out, it is unacceptable for a Minister in government, who is running the functions of state, not to support the state—in other words, the police, who help to ensure that the state is run properly. We certainly hope that that will never happen, but these Benches support the amendment.

My Lords, the arguments on this amendment were rehearsed in Grand Committee and in another place. As I said before, I have much sympathy with what the amendment is trying to achieve, but I must disagree with the way in which the noble Lords are seeking to do it. There is no argument with the principle. Indeed, the Government have consistently said that we want all the parties, including Sinn Fein, to support the policing arrangements in Northern Ireland. Likewise, we cannot call into question the underlying aim of the amendment, which is that support for what we know as “the rule of law” be embedded into the political life of Northern Ireland. But we do not believe that this amendment helps us to achieve that aim.

It is important that we give due recognition to the arrangements that are already in place in the existing pledge of office under the Northern Ireland Act 1998. That pledge of office, which all Ministers must affirm before taking up their posts, already requires a commitment to non-violence and exclusively peaceful and democratic means. Furthermore, as the noble Lord, Lord Smith, pointed out in Grand Committee, the wording of the pledge is taken directly from the text agreed in the Good Friday agreement. It has therefore been agreed by the parties and is not to be amended lightly. I should add that amendments to the 1998 Act made in 2003 have shored up and strengthened the requirements set out in the existing pledge of office by allowing consideration of the Independent Monitoring Commission’s recommendations and by providing safeguards where Ministers and parties fail to observe the pledge.

The pledge is not the only requirement to which Northern Ireland Ministers are subject. Throughout the debate, I have repeatedly stated my concern that, while we all understand what is meant by “the rule of law”, it is not easily defined in legal terms and is therefore quite unhelpful when put forward in the amendment. However, I am sure that noble Lords will agree that the heart of what we term “the rule of law” is respect for the independence of the judiciary. This issue was not mentioned in Grand Committee, but we must not overlook the fact that all Northern Ireland Ministers are already subject to a strict statutoryduty, under Section 4 of the Constitutional Reform Act 2005, to uphold the continued independence of the judiciary. It is evident that the rule of law is already protected and therefore we do not needthe further provision afforded by the amendment. Section 4 of the 2005 Act is subtitled:

“Guarantee of continued judicial independence: Northern Ireland”.

Section 1 begins:

“The following persons must uphold the continued independence of the judiciary-

(a) the First Minister,

(b) the deputy First Minister,

(c) Northern Ireland Ministers, and

(d) all with responsibility for matters relating to the judiciary or otherwise to the administration of justice, where that responsibility is to be discharged only in or as regards Northern Ireland”.

Other subsections follow that talk about Ministers not being able to interfere with judicial decisions through any special access to the judiciary. That is on top of the pledge that I have referred to from the Belfast agreement.

As I said at the outset, the underlying aim of embedding support for the rule of law into the political life of Northern Ireland is unquestionable: it is not questioned by me or by anyone in the Government. For the reasons that I have outlined, however, the Government are of the view that the existing arrangements under the 1998 Act and the Constitutional Reform Act 2005 are sufficient. We have made it clear, both here and in the other place, that if the parties want to make changes to the pledge of office, and if they can agree on a form of words in the context of a package on the other strand 1 issues, we stand ready to take such changes forward in legislation. I ask noble Lords not to push the amendment, for the reasons that I have given today and in Grand Committee.

My Lords, what worries some of us is that we have seen in the papers recently that Sinn Fein activists have sought to justify the murder of a very decent and brave lady in Northern Ireland on the basis that she was an informer. Informers have been treated by Sinn Fein as lowly creatures but, surely, if justice is to be established, we have to have informers. If we had had more of them, perhaps there would have been fewer murders.

My Lords, I do not want to go into the detail of that case, which I am aware of from the media, but the fact remains that we need more co-operation with the forces of law and order and the rule of law in order to create in Northern Ireland a normal civic society, which it is not at present.

My Lords, I thank the Minister for what he has said. I do not believe that on this occasion my amendment would interfere at all with the pledge of office—I had dropped that amendment. This amendment is purely to make obvious failure to support of the rule of law, the judicial processes and the PSNI a reason for the removal of a Minister.

I felt that the Minister had some sympathy with that. His explanation of Section 4 of the 2005 Act was something that I had not heard before and need to brush up on; in fairness to him and other noble Lords, I should research it a little more. I think that the Government know what we are after here. However, there may be a way in which we can between now and Third Reading bring some provisions of Section 4 to the fore and strengthen the Bill.

As I said in my opening remarks, this is something that could be enacted only by the Assembly and which would require cross-community agreement because of the way in which voting takes place in the Assembly. So I shall do some research and probably bring back the amendment at Third Reading, but, for now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 12:

My Lords, a small number of Members of your Lordships’ House who follow Northern Ireland activities will know that, for two or three years now, I have been pressing for a change in the character of the executive order of much Northern Ireland business. That is not to say that there is no case for secondary legislation, but, as the noble Lord, Lord Glentoran, said, the take-it-or-leave-it character of orders and statutory instruments is extremely frustrating and frankly does scant justice to the Northern Ireland business that comes before Parliament.

I do not believe that it is beyond the wit of humankind—although after today it may be beyond the wit of the Northern Ireland Office, judging by what we have heard from it—to contrive to have a protocol that is susceptible to amendment. I say to the officials who continually brief Ministers that nothing can be done, and who come out with all this rigmarole about the conflict between two Houses, that those are British constitution A-level essay-type things. Frankly, they must get it into their heads that constitutional protocols are for humankind and that humankind is not for constitutional protocols. They must get their priorities right.

Much has been said in Grand Committee and by the noble Lord, Lord Glentoran, and I shall not delay your Lordships by repeating the arguments for determining Northern Ireland business more democratically. After all, this is not new. In the debates on the Legislative and Regulatory Reform Bill, there are signs that the Government have accepted that it would be wrong to push through primary legislation that would implement Law Commission recommendations by means of statutory instrument. I believe that Ministers from the Department for Constitutional Affairs are exploring, with opposition spokespeople, the best way in which to ensure that uncontroversial proposals are expedited with proper scrutiny. In Committee on that Bill, the noble Baroness, Lady Ashton of Upholland, said:

“It is right to try to find a solution that would enable uncontroversial reports to find their way through a parliamentary process. The elements of such a process that I plan to explore would be: ensuring that the reports were genuinely uncontroversial; that they commanded support in principle, therefore, from across your Lordships' House and another place; that the choice for such a procedure would be endorsed by Parliament; that a suitable process of scrutiny could be found; and that both Houses of Parliament would have the opportunity to debate them with the possibility of amendment”.—[Official Report, 10/6/06; col. 574.]

If it is possible for another government department to consider a new parliamentary procedure to satisfy such criteria, why is it not possible for the Northern Ireland Office to consider a similar procedure for dealing with Northern Ireland orders? This is very important.

Speaking in support of the noble Lord, Lord Glentoran, I would add that it is extremely unlikely that having this measure as a safety net would somehow negatively influence the parties in Northern Ireland that are discussing whether or not to reconvene the Executive. This ought to urge the parties to get on with it and to re-establish the Executive at Stormont. While it helps as a prod to those discussions, it also gives us a fail-safe if, unfortunately, 24 November comes and goes with no restoration. We cannot then suddenly start considering what needs to be done. We need at this point to prepare for that eventuality. We should hope for the best, but we need to prepare for the worst.

My Lords, it is refreshing to hear the words of the noble Lords, Lord Smith and Lord Glentoran. There has to be a plan B. Of course, Her Majesty’s Government have already announced such a plan because when the Prime Ministers of the Republic of Ireland and the United Kingdom met in Armagh City in May, they said that, failing the creation of an Executive on 24 November, the Dublin Government and Her Majesty’s Government would work more closely together in the administration of Northern Ireland. At the time, we saw what was in my opinion substantial decommissioning by one of the terrorist groups, the IRA. The other two main paramilitaries, the UVF and the UDA, were also moving towards decommissioning. But what happened? Following the announcement by the two Prime Ministers that Dublin was going to become involved in the administration of Northern Ireland should the Executive not be created on 24 November, the two loyalist paramilitary groups immediately announced that they were not proceeding with decommissioning.

Alarm bells started ringing right across Northern Ireland. It was seen as a compromise by Her Majesty’s Government that the Republic of Ireland would become involved in the internal affairs of Northern Ireland. Noble Lords may think that this is not important, but to the people who live in Northern Ireland it is very serious indeed. It is time that notice was taken of the danger of that statement. Whether you disagree with it or not, it was a plan B. The great news is that both the Liberal Democrats and the Conservatives are thinking of alternative plan Bs, but it is very important to recognise what is happening in Northern Ireland today. I do not believe that we will have a settlement by 24 November—I shall not go into the reasons why.

Yesterday we had our national holiday, and there is a holiday today as well. What was significant in Northern Ireland yesterday was that the Union flag was not flown as much as usual. Across Northern Ireland, the Ulster flag—the Northern Ireland flag—began to emerge as the main flag flown by the majority community. That is a warning to Her Majesty’s Government and to Parliament in London: things are beginning to move in Northern Ireland in a very dangerous way. I do not want to exaggerate the situation, but I believe that the British majority in Northern Ireland is preparing for a major conflict. It is time that the Government addressed this problem before it overtakes them.

My Lords, I realise the seriousness attached to the issue in the amendment and I hope that I have made it clear that the Secretary of State, along with the whole Northern Ireland team, shares those concerns. The current Order in Council process is not adequate in the long term, but while I do not want to revisit old battles, one has to admit that it has served Northern Ireland since, I think, 1972. I cannot believe that that was not looked at during the long years of Conservative government to try to find a better system for more scrutiny in both Houses. Obviously, a solution was not found. We do not have one either at the moment though I suspect that every Member could find a way of doing it.

We take the concern seriously, but we may not be believed until we have put our solution on the table. At the moment the Government are not prepared to put a solution on the table. I am not saying that these issues are not thought about. We genuinely do not want plan B or plan C to interfere with plan A; we want the Assembly back. It is the duty of Northern Ireland politicians to get elected and to serve their people. Direct rule and inadequate scrutiny of Orders in Council have to be second best in any democratic process. If restoration of the Assembly is not possible, we would want to engage with Members of both Houses to find a way of making the system work better. We have had discussions in the past 12 months on that but we have not come up with a Northern Ireland-proof solution, specifically for it—though I accept that the amendment is—that does not spill over into the management of the business of secondary legislation across the Houses. The Secretary of State has asked and charged the Minister of State, David Hanson, to take this matter forward with the parties in due course if that situation arrives. However, we do not want to plan for failure.

For some, the present situation is very comfortable—direct rule, part-time commuting Ministers; it’s great for them. They love it because they do not have to grow up and take decisions themselves. They coalesce only in attacking the Government; it’s the one thing that unifies them. They don’t have to stand up and say what they would do, how they would fix the budget. They have no responsibility whatever. We want them to grow up and take adult decisions on behalf of those they seek to represent. But some people are comfortable with the status quo. I genuinely think that the amendment, though it may offer the seeds of a possible solution, could get in the way and help the prize slip from our grasp. We have some distance between now and24 November. I realise that there will be a Recess, but I think that the situation will hot up considerably towards the end of the September/October period. I do not want to say anything now that will cause problems in that period.

I want to put a couple of points to noble Lords. One of my colleagues in the other place, devaluing the argument somewhat, said to me, “I don’t understand what the Conservatives are complaining about. They are a party of government; they have been in government and aspire to be a Government, and the Lib Dems haven’t been there for 100 years or near enough, yet they come up with these solutions because they think it’s easy”. Well, it isn’t easy. If it was, we would have found a solution by now. In fact, we would have found a solution under the direct rule of the Conservative Administration.

My Lords—

My Lords, perhaps I can just make this point. Then I will give way to the noble Lord, obviously.

We have looked at the amendment, and I have had brief discussions during the week. If it were carried, we could not, for a start, use the Grand Committee process. We could not use the Grand Committee process in this House to discuss the draft of an amendment because it is rigidly organised to allow debate only on non-controversial matters and does not allow for changes or amendments. That does not apply to every order; many orders could be considered there. However, those orders could not go to a Grand Committee. They would have to be considered on the Floor of the House. We have to find ways of dealing with this—ways that have not been found in all the years since the Stormont Parliament was first set aside.

The noble Lord, Lord Smith, talked about a fail-safe. I say with due respect that, because we are serious about the date of 24 November, a fail-safe will have to be seriously and urgently considered after that date. We do not want to do so beforehand, for the reasons I have explained.

I shall briefly address the point made by the noble Lord, Lord Kilclooney; it is not the first time that he has made it, and I made sure that those responsible for the issues were made fully aware of his point when he first made it. The tune changed slightly. It is not envisaged—it was never part of the plan—that the Government of the Republic of Ireland will in any way, shape or form be involved in the administration of Northern Ireland. We have no mandate as a Government for that and do not seek it, but I and colleagues have pointed out that the cross-border issues do not go away, given all the pressures of the economy and the position of the island of Ireland within both Europe and the world economy. For example, we have had questions in the House recently about a common corporation tax on the island of Ireland, specific to businesses both north and south. They can make a case that it ought to be different from Great Britain. That pressure comes not because of political forces, but because of the economic changes in the world. I am not saying that it will happen, but there will be areas of co-operation. Part of the Bill creates a wholesale electricity market; that is part of those pressures.

I was going to mention the subject of yesterday earlier, and have just been reminded of it; I was obviously not there. Yesterday was the most peaceful 12 July for 30 years. In fact, it was the first time in30 years that the Army was not deployed on 12 July. That is absolutely fantastic. I am still doing duty weekends in Northern Ireland, and I have seen the collection of the bonfires ready and all the paraphernalia that goes on which people want to celebrate. I know what has happened in the past as a result of that, whether it is hotheads or others just out to cause trouble. The atmosphere that we have at the moment, when 2006 is the first time in 30 years that the Army is not out on the street on the major holiday, has to be of major significance.

The noble Lord, Lord Kilclooney, made a point about flags; I cannot respond to it in detail. I look on it as maybe positive that other flags were used rather than the flags of the past, although I take the serious point—the implication of what he said—that the loyalist paramilitaries are keeping their arms ready to fight British soldiers. That threat is the implication of not disarming; he agrees. It is outrageous. We want them disarmed like the others. There is no excuse for the paramilitaries to keep their weapons. There is no selling out, to use the terms that people have used in the past. The Government of the Republic will not be involved in the administration and governance of Northern Ireland, but there will be north-south co-operation as there are areas of co-operation east-west, such as the health service. Citizens of the Republic can go into hospitals in Northern Ireland, particularly the north-west, where the hospitals are closer to them than those in the south. I am sure that such good areas of co-operation will continue.

That does not mean to say that the Government of the Republic will be involved in the administration of Northern Ireland. That is not a plan B. However, it is a natural consequence that if there is not a Northern Ireland Assembly, we as the UK Government will not mind the shop. We will push forward areas of reform—of public administration and of other areas in Northern Ireland—and, where it suits us both, particularly in economic co-operation, it makes sense to have those arrangements. However, that can in no way be construed as the Government of the south having a role as a threat over the non-Assembly. If the Assembly were up and running, I suspect that the same thing would happen, because the economic forces would drive north and south to do such things on a joint basis.

My Lords, will the Minister give way?

I will, my Lords, because I realise that once I sit down no one else can get up.

My Lords, the noble Lord’s peroration is part of his rhetorical repertoire to keep the momentum going, but I am afraid that I have to bring us back to a couple of his points. He said that the Conservatives did nothing about secondary legislation during their time of direct rule because, like the Labour Party, they are a party of government, but that the Liberal Democrats have not been in government for a long time. That reveals a mindset about executive government that erodes the role of the legislature and is all part and parcel of the modern cast of mind of government. I do not find it a very convincing argument.

My Lords, I remind noble Lords around the House—and I look at those to whom it applies on my left and right—that interventions when the Minister is speaking on Report are for points of elucidation, not for continuing and expanding on the debate.

My Lords, I take the noble Lord’s chastisement.

I do not want to speak on the basis that executive Government know all; I am not saying that. I am with noble Lords on this; so is the Northern Ireland team—Peter Hain and the rest of them. The present arrangements for degrees of scrutiny under direct rule are unsatisfactory, and we must find another solution. However, we are not in an isolated area; we are a few months away—and the House has passed the legislation—from trying to get up and running an Assembly that would carry out that legislation,. It is not a question of simply saying that we are in a period where nothing is going to happen. We want to focus on getting the Assembly up, not by threats or blackmail but, if you like, by a bit of cajoling and some encouragement, and not too much slagging them off; they do not like that. Northern Ireland people deserve better from Northern Ireland politicians than what they have been getting, and they know that.

The money for the Assembly Members is a token, but the Assembly will disappear on the 25th; the Assembly will be gone. The status quo will not simply carry on. There is the Review of Public Administration, and the changes to local government do affect central government in Northern Ireland; they are bound to. The idea is to move powers from the Government of Northern Ireland in Belfast to local councils. That means that we will be looking at the ministries and the way in which they are structured. If anyone is thinking, “Oh, in a few months’ time we will pop back and all the d’Hondt ministries will still be there”—as one noble Lord said to me earlier in the week—they may not be there.

We are pushing forward changes in the health service and in local government. We have said that we will push the reform programme forward, and we are not going to ease off on that. Indeed, the Secretary of State has said that he will speed it up if the Assembly is not there. That is our position, and that is why we concentrate and focus exclusively on getting plan A, which is the best option, of a devolved Administration back in Northern Ireland, and at the same time admitting that we are mindful of the deficiencies of the present system and admitting that if the Assembly is not back we cannot carry on as we have been for the past eight—or indeed the past 30-odd—years in direct rule.

My Lords, I have a point of elucidation. We did have, let’s face it, a plan B following the meeting in Armagh city of the two Prime Ministers. I do not believe that Her Majesty’s Government recognise how badly that message went down across Northern Ireland. If the Government do have a plan B that was announced in Armagh, why are they not prepared to consider an alternative plan B, which would be a greater democratic system for the administration and government of Northern Ireland?

My Lords, for the reasons that I explained. If we did that in great detail now, there are too many people who would say, “Thanks very much; there is direct rule and there is a plan B; we do not need an Assembly. Why bother?”. We believe the best option is an Assembly in Northern Ireland with Northern Ireland politicians.

I repeat, finally, that whatever may have been said about it, the Prime Minister did not have a plan B on that day and there is no plan B today. We have got plan A, and that is what we are concentrating on.

My Lords, I accept what the noble Lord has said. I accept that there is no plan B and I accept that the Government do not want a plan B. But, as I said in my opening remarks, I do not see this amendment as providing a plan B. I support the Government totally in their wish to see Stormont back in being and back at work. I see the amendment as using this miscellaneous provisions Bill—an opportunity which is often difficult to find for major legislation for Northern Ireland—as a means of ensuring that I do not have to come back here at the end of October, or whenever we get back after conferences and so on, with clearly no agreement in sight and having to go back to the old grind. Soon we will have the Northern Ireland budget coming up for the next year. I do not want to go through that; I do not want to see all of that again. I want a more efficient, more democratic, more open process of governing Northern Ireland. I beg leave to take the opinion of the House.