My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Appropriation (No. 2) Act,

Finance Act,

Commons Act,

Housing Corporation (Delegation) etc. Act,

Health Act.

asked Her Majesty’s Government:

What action they are taking at the Council of Europe and elsewhere to ensure that all rulings of the European Court of Human Rights on human rights abuses in Chechnya are fully implemented by the Government of the Russian Federation.

My Lords, within the Council of Europe’s Committee of Ministers the United Kingdom has led inurging Russia to implement the European Court of Human Rights judgments. The committee issued a memorandum in June 2006 to monitor Russian execution of the judgments, following the Russian action plan of March 2006 detailing the steps it intended to take towards implementation. Her Majesty’s Government have also raised the matter through the EU-Russia human rights consultations: in September 2005 during the UK presidency; and most recently in March, in consultations in Vienna. We will continue to press Russia to implement fully the court’s judgments.

My Lords, I thank my noble friend for that reply. Does he agree that the intransigence of the Russian authorities and the refusal to take effective remedial action call into fundamental question the grave undertakings that Russia gave at the time of its admission to the Council of Europe about how it intended to become a full council member not only in letter but in spirit? Does he not also agree that that intransigence plays directly into the hands of extremists, because it undermines all those who might be won into a meaningful political process to overcome the continuing crisis in Chechnya by suggesting that everything else is ineffective and that the only thing to do if you really feel strongly is to go and join the militants?

My Lords, I acknowledge my noble friend’s long-standing interest in Chechnya and his contribution over three and a half years as special rapporteur on Chechnya to the Parliamentary Assembly of the Council of Europe. I agree that there has been far too little progress—indeed, a distinct lack of progress—on the part of Russia in implementing the European Court of Human Rights judgments. That is worrying and is likely to be taken by some as an encouragement to acts of violence. I would hope that, on all such occasions when people feel encouraged by violence rather than by appropriate use of political process, they will reflect on that and turn to political process rather than tothe gun.

My Lords, does the Minister accept that we face a potential problem of conflict spilling out across the north Caucasus and over the peaks into the south Caucasus and that Russian policy appears to be irrational? As we know, there is now fighting in Dagestan and west of the north Caucasus, in one or two other places that I am not even sure that I can pronounce. Meanwhile, the Russians are taking an entirely contradictory attitude towards separatism in Abkhazia and South Ossetia from the one that they take north of the Caucasus. Can we not attempt to put this into a regional context that includes the problems of the south Caucasus as well as of the north?

My Lords, I accept that there is a real attraction to seeing this in a regional sense, and we would be much more likely to reach a solution were not the parties all around somewhat intransigent. However, I accept the basic premise that there is a risk of the conflict spilling out further. That is one of the reasons why there is a consistent effort by the Government to get the Russians to meet their obligations in the places where there are specific judgments against them that require them to meet those obligations and to ensure that nothing is done that causes the spread of violence.

My Lords, let us leave aside the merits, which are indeed great, and look at the Question. How can you enforce implementation of an order of this court, the jurisdiction of which the states concerned have declined to accept?

My Lords, when my noble friend Lord Judd asked his supplementary question, he made the point that the Russians had entered into obligations when they sought to be within the remit of the court and of its arrangements, just as we all do when we sign up to international treaties that put us under particular legal systems. We must try to ensure by persistent argument that the Russians meet those obligations fully. There is no state in Europe, coming into the EU or in any other part of the European architecture, that can sign up to such arrangements and then stand aside from them.

My Lords, given the recent killing of the separatist guerrilla leader, Shamil Basayev, will my noble friend urge the Russian Federation to pursue a political solution to the conflict in Chechnya rather than a purely military one?

My Lords, the death of Basayev provides an opportunity for all parties to work towards a peaceful resolution in Chechnya. We hope that the amnesty announced last week by the head of the Russian security service, Mr Patrushev, will be a crucial step in the process of reconciliation.

My Lords, does the Minister agree that there is a great problem regarding the failure of many members of the Council of Europe to comply with judgments of the European Court of Human Rights? In those circumstances, it is particularly important that this country should continue to give the example, as it always has in the past, of meticulously following and giving effect to the judgments of the European Court of Human Rights.

My Lords, I am grateful to the noble and learned Lord for that sentiment. When we enter obligations, we are absolutely bound to honour them.

My Lords, does the Minister accept that we sympathise and agree with the concerns of the noble Lord, Lord Judd, whose work for and connection with human rights in Chechnya is widely acknowledged and admired? Does he agree that Russia is now emerging as a mature nation anxious to reassume its great power status, or its co-operative status, and that we need its help and co-operation in resolving great issues such as those in Iran and the Middle East? The more we can talk to Russia in a mature way about the human rights failings and bring it to understand the danger that it runs of damaging its reputation and effectiveness and the virtue of obeying the rulings of the Council of Europe, the better progress we will make in solving many other problems as well.

My Lords, I agree with all of that. The dialogue between us and the Russians is vital across almost the entire range of international issues. That is why the consultations that have taken place in the EU-Russia human rights arena have been particularly important. We must continue those consultations. The Russians will understand that, as we accept that they have become a very significant force in the world again, they also have the obligations that go with being a very significant nation.

asked Her Majesty’s Government:

Whether the Attorney-General has responded to the St Pancras coroner’s request to consider whether cases might be brought in the United Kingdom regarding the deaths of Tom Hurndall and James Miller.

My Lords, I have met both families and their lawyers. I have had detailed discussions with the Israeli authorities, who have been very co-operative, for which I am grateful. Further information is being provided to me from Israel, including evidence gathered in the Israeli investigations. I shall needto consider that carefully before reaching any conclusions. At the same time, the Israeli Attorney-General is reviewing the cases in the light of the concerns I raised with him.

My Lords, I thank the noble and learned Lord for that reply, and I thank him on behalf of the families, who are here today, for his assistance, which they very much appreciate. The coroner asked him to require the Israeli authorities to hold proper investigations and for him to consider taking proceedings in the UK. Given the history of the cases, in particular the fact that the suspected killer of James Miller is not only still in the IDF but has been promoted in it, how confident is he that successful investigations can take place there? If he is receiving all the assistance that he needs from the Israeli authorities, which it seems is better than the coroner did, what is his timetable for deciding whether proceedings might be taken in the United Kingdom?

My Lords, I am grateful for what the noble Baroness said. How long it will take to reach a conclusion will depend on how long it takes to receive the information and to digest it. For example, the Israeli authorities are making special application to the Israeli military court in the Hurndall case to release to me information that would normally be kept closed and not be available to the families. Of course, it is difficult to reinvestigate something after this length of time, which is why it is important for me to consider as closely as I can the material that was gathered by the Israeli authorities at the time. I will keep the House informed of where I get to.

My Lords, I preface my remarks by telling the House that James Miller was the brother of my son’s wife. I am very grateful to the noble and learned Lord the Attorney-General for all that he has said, but is it not now plain that it is very unlikely that there will be any prosecution in Israel of those involved in the death of James Miller and equally unlikely that there will be a new inquiry to makeup for the deficiencies of the military police investigation? In those circumstances and in the light of the verdict in the coroner’s court, does he agree that a prosecution in England seems at present the only way in which any justice will be done for James Miller’s family?

My Lords, I absolutely acknowledge why the noble Lord puts the question to me in the way that he does. I must reserve judgment until I have been able to examine, with assistance, all the material available. The Israeli authorities have been co-operative. As he will know, I have very great sympathy for the families of both men. I will continue to consider my responsibilities, and I am committed to carrying those out completely.

My Lords, the coroner, Dr Reid, recommended a prosecution under Section 1(1) of the Geneva Conventions Act 1957, following the verdicts of the British jury of unlawful killing in respect of both men. Will the noble and learned Lord confirm that that is an extraditable offence, with extraterritorial jurisdiction that the courts of this country have full power to deal with? Does he agree that the verdicts of the British juries, who heard all the evidence at that stage, are a firm foundation to issue a warrant already in this country regardless of any further investigations in Israel and for a request to be made by the Home Office for extradition to this country?

My Lords, I do not entirely agree with the noble Lord. The coroner’s jury did not in fact hear all the evidence—that is part of the criticism of what took place—because it did not have available the information and evidence that had been gathered in Israel. The coroner was concerned that, as he saw it, he had not received co-operation. I hope that that will be remedied in the case of what I am looking at. We are not at the stage where it would be right to look for warrants. It is important to continue the investigation; that is what I am determined to do to reach a proper conclusion. Certainly, in theory, there are offences that would be extraditable.

My Lords, the noble and learned Lord the Attorney-General has taken a close interest in military rules of engagement with respect to British forces on operations. When he was in Israel, didhe have an opportunity to discuss the rules of engagement that were pertinent to these cases, and if so does he feel that there may be a case to be looked at in terms of the higher command of the Israeli Defence Force?

My Lords, I raised the question of the rules of engagement pertaining to these cases. To give me further information about that, a request is being made to the Israeli military court to release information to me that would normally not be available outside that court.

asked Her Majesty’s Government:

Whether they will issue guidance to courts sentencing parents with direct responsibility for the care of children, so as to delay the commencement of custodial sentences until proper arrangements have been made for continuity of care.

My Lords, when deciding on sentence, a court may legitimately take into account the impact of a sentence on other people, including dependent children, as part of the overall picture. We have, however, no plans to issue specific guidance to courts recommending delay to the start of a custodial sentence in cases where an offender may need to make childcare arrangements.

My Lords, I thank the noble Baroness for her reply. Does she agree that more than 17,000 children per year are put at risk by the imprisonment of their mother, albeit sometimes only for short periods? Will the Government study the best practice of European courts, including even Russian courts, on the matter? Finally, will they seek to maximise the discretion of our courts and, whenever possible, avoid the imprisonment of mothers with young children?

My Lords, I am certainly aware of the tragedy that befalls many children whose parents become involve in criminal activity. The noble Lord is right to highlight that as a danger. We are energetically looking at all best practice on the issue. I reassure the noble Lordthat the Judicial Studies Board’s Bench Book, whichis used by judges, states, in relation to family responsibilities:

“Where the convicted defendant is female, a decision to sentence without a pre-sentence report should be made only after careful consideration of the possible impact on others, in particular dependent children”.

So this issue is very much in the forefront of our courts’ minds, and we will make sure that appropriate reports are before the courts to enable them to make an informed choice of sentence.

My Lords, does theMinister recognise the effectiveness of family group conferencing in keeping children out of public care and placing them with a member of their extended kin? In her review, will she look carefully at how courts might be encouraged to use that important means?

My Lords, I can certainly assure the noble Earl that we have looked for some time at restorative justice models and case conferencing to deal better with childcare issues. That is very much at the forefront of our minds, and we are energetically looking at more successful ways to intervene with offenders in order to reduce recidivism much more than is the case at present.

My Lords, will the department’s examination of the issue include consideration of the role of grandparents?

My Lords, noble Lords will know that grandparental influence can be profound and beneficial. I am sure that Membersof the House would say “amen” to that. There isan opportunity for grandparents to intervene in appropriate cases where there are no other carers and to supplement the care given by parents in appropriate cases.

My Lords, given that there is tremendous disruption to a child’s life when their parent and main carer is sent to prison, can the Minister say what steps are taken to ensure that dependent children get proper and regular contact with their parent in custody in all appropriate cases?

My Lords, I certainly agree with the noble Baroness that that is very important. She will know that we have improved the facilities made available to offenders, allowing them to keep children under 18 months with them and improving the amount of time that lone parents are allowed to go out. We now have a policy whereby a lone parent is allowed to have contact with their children at least four times every two months. That has greatly improved the situation. We are also looking at what we can do further to ensure that the contact and connection between parent and child is maintained in an appropriate way to assist the children and to enable the offenders to serve their time more efficiently and effectively, because such situations are incredibly distressing, particularly for mothers who are separated from their children.

My Lords, is the Minister aware that, where continuing care of children is an issue, the prisoner often receives no information and requires urgent reassurance? Will she therefore assure the House that a family member or trusted friend of the prisoner would be allowed a reception visit within 24 hours to communicate about care arrangements?

My Lords, I assure the right reverend Prelate that all steps are taken to facilitate appropriate contact. I absolutely understand the anxiety expressed, but I say to the House that the issues are often encompassed in proceedings before sentence, when there is an opportunity for a court to adjourn a hearing to get reports and so on before determining the most appropriate sentence. The Criminal Justice Act now allows us comprehensive and tough community sentences, which are often more appropriate for those who are not dangerous.

My Lords, following on from the Minister’s earlier Answer, will she tell the House what plans the Government have to develop and significantly expand the alternatives to custody for women? It is government policy, after all, that all but the most prolific and serious offenders should be dealt with in the community and not by custodial sentence. Those community-based penalties are essential if women and their families are not to suffer the extremely damaging effect of a mother’s incarceration. What concrete plans are there to expand that provision and to convey that to the sentencers so that they have confidence in them and will use them more extensively?

My Lords, the noble Baroness will know that we have launched the women’s offending reduction programme, in which we have invested £9.15 million to test out different models that will be available to sentencers to deal more effectively with women. We will also have the benefit of the work undertaken by my noble friend Lady Corston, who hopes to report to me in December on what we can do better to help the most vulnerable women in our prison estate.

My Lords, further to the right reverend Prelate’s question, is my noble friend aware that, when the Joint Committee on Human Rights was visiting Holloway, members, including myself, were deeply disturbed to hear from staff of occasions when it was discovered only during the process of receiving prisoners from court—sometimes late in the evening—that there were unattended children at home? Will she assure the House that all steps will be taken to make sure that such situations never arise in future?

My Lords, I assure my noble friend that steps are already taken to that effect. He should be aware that sometimes the people involved do not disclose that they have children or they positively conceal it for various reasons. I assure the House that we will take all reasonable steps to make sure that, if children are involved, they are identified early and dealt with appropriately.

asked Her Majesty’s Government:

What steps they propose to take to ensure that retired racing greyhounds are dealt with humanely.

My Lords, the Animal Welfare Bill, currently before your Lordships’ House, will introduce an offence of failing to provide for the welfare needs of an animal. That will apply to owners and keepers of all animals, including racing and retired greyhounds. In addition, we are considering making specific regulationsunder the Bill in relation to the welfare of racing greyhounds.

My Lords, the House will be encouraged by the Minister’s comments, but I fancy that the public outside may need a little more persuasion, particularly in view of the fact that this week there was some emotive and rather misleading publicity about putting down dogs—that is why I asked my Question. Is not the reality that there are about 3,000 fine racing greyhounds in existence at any one time that are bred exclusively for racing and for the enjoyment of their owners and the public? They have a very short racing life and little expectation of an existence after it. At the moment, the public perceive, probably accurately, that, at the lower levels of the sport of greyhound racing, dogs are not put down humanely but are often abandoned in appalling circumstances. Will the legislation be complete and thorough enough to catch those who operate in less well regulated areas than the major greyhound racing organisations?

My Lords, the answer to the final part of the noble Viscount’s question is in the hands of the House. We have completed Committee, and Report is due in the overspill. Those issues were raised at Second Reading and in Grand Committee, and the noble Baroness, Lady Byford, like others, raised the point. There will be plenty of opportunity to raisethe issue.

The noble Viscount said that there had been an erroneous press report, but I do not know whether it was erroneous. An investigation is going on. Wehave asked the National Greyhound Racing Clubto investigate. Other appropriate investigating authorities are looking at the issue, because it involves waste disposal, planning permission, animal welfare, the landfill directive and the income tax authorities. Plenty of regulatory authorities are able to look at those allegations.

My Lords, I declare an interest as chairman of the British Greyhound Racing Board. Is my noble friend aware, despite what he has just said, that this abhorrent practice is not definitely illegalat the moment but is contrary to the rules of the National Greyhound Racing Club which, I am confident, will deal with the utmost severity with any licensed trainer who is proven to have been involved? Is the Minister further aware of greyhound racing's strong support for action under the Animal Welfare Bill regulations that would make the sanctions available to the NGRC, so far as the official industry is concerned, also available to be used against trainers at tracks not run by the NGRC?

My Lords, my noble friend is perfectly right: there are about 50 tracks, 32 of which are governed by the National Greyhound Racing Club, and there are about 18 independent tracks. Of course, one of the issues is to ensure that all animals, whether they are racing at the regulated tracks or the independent tracks or are retired, are properly looked after and that their welfare is considered.

This is an emotive situation, and we need to get the facts of the case. I understand that the National Greyhound Racing Club releases about 11,000 greyhounds a year into racing and that there are about 30,000 active dogs. The Retired Greyhound Trust has rehoused 35,000 dogs since 1974. It is clear when one looks at the sums—I do not know the exact number of dogs involved—that many dogs go missing.

My Lords, the latest worries that have been brought to light are but the tip of the iceberg. This problem has been going on for a very long time. Can we fully expect the Animal Welfare Bill to return quickly in the overspill? I am disappointed that it is to be left to the overspill.

My Lords, given that the overspill is quite a short period, it is reasonable to suppose that the Bill will come back quite quickly. It is in the hands of the House. The Bill will have its Report and Third Reading. We shall have plenty of opportunity to debate amendments to the Bill and to raise issues related to this point, and maybe we shall have a few more facts relating to this case—at the moment they are only allegations. As I said, plenty of regulatory authorities are able to look into the allegations.

My Lords, the Minister is answering questions about greyhounds. Does he agree that the problem does not solely affect spent greyhounds and that other sports animals may be treated in a not dissimilar way to what has been reported in the Daily Mail? One hopes that the Animal Welfare Bill will consider them as well as what has been in the news.

My Lords, I accept what the noble Lord says. Racehorses are sporting animals, andif they are slaughtered it is in a regulated slaughterhouse. There are rules for that, and the pet food industry probably receives the proceeds. I understand that about 1,000 greyhounds weigh about 20 tonnes, and greyhounds going to landfill that may or may not be regulated is slightly different. I hope that by Report we shall have many more facts about the situation.

My Lords, the Minister rightly says that the Animal Welfare Bill is the way to do this. Throughout the stages of that Bill, however, he has said that it is regulatory and that the detail is for the Government to bring in through regulation. Is that how he intends to deal with the greyhound issue?

Yes, my Lords. We have a working party set up to look at this with the industry. We have agreed to bring in some of the regulations earlier if necessary, in 2009 rather than 2010. I am not saying there is an instant solution. It may be that anything that has happened is quite legal. We must have the allegations looked into and not jump to judgment.

My Lords, why did the Government vote against the amendment tabled by my honourable friend Mr Hollobone, which would have brought in registration of all licensed tracks? That would have led to better overall welfare for all greyhounds in the end.

My Lords, it was for the reason that I have stated. A working party is looking at this. There are two sets of tracks. We want to ensure that the welfare of animals should not be differentiated according to whether they are at regulated or independent tracks. We need vets and welfare personnel to look at that. Also, we were in Grand Committee, so we did not have any votes.

My Lords, with the leave of the House we will have a Statement repeated later today on Home Office reform by my noble friend Lady Scotland of Asthal. We will take it immediately after the Third Reading of the Northern Ireland (Miscellaneous Provisions) Bill.

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

Moved, That the Lord Morris of Aberavon be appointed a member of the Select Committee in the place of the Baroness Hayman.—(The Chairman of Committees.)

On Question, Motion agreed to.

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

Moved, That the Lord Richard be appointed a member of the Select Committee in the place of the Baroness Hayman.—(The Chairman of Committees.)

On Question, Motion agreed to.

moved the Amendment:

After Clause 16, insert the following new clause-

My Lords, I understand the concerns over this matter and indeed, as we have said before, we have a good deal sympathy with what the noble Lord seeks to achieve through the amendment. But, as I have also said before, this is not the way to achieve it.

The amendment would allow for the removal of a Northern Ireland Minister who was no longer committed to upholding the rule of law. The underlying aim—that support for the rule of law be embedded into the political life of Northern Ireland—cannot, of course, be faulted. That much we are all agreed on and that is what the Government have consistently said. We ultimately want all parties, including Sinn Fein, to unite in support of the policing arrangements in Northern Ireland.

The amendment does not help us to achievethis aim. It is unnecessary and adds no value to the requirements already in place. Moreover, the Secretary of State has already made his position on this matter very clear and has repeatedly said that he will not set any further preconditions for anyone entering devolved government. That is the end of the matter. There will be no more preconditions. There are no excuses for devolved government not to be up and running, and we will not erect any more hurdles.

The arguments against this amendment have been well rehearsed as the Bill has passed through this House. Noble Lords are aware of the requirements of the pledge of office under the 1998 Act. I have outlined many times the protections afforded by the pledge, which all Ministers must affirm before taking up their posts. It requires a commitment to non-violence and to exclusively peaceful and democratic means. As I said on Report, safeguards exist for where Ministers and parties fail to observe the pledge of office. The pledge is not simply words on paper; safeguards exist in case it is broken.

In addition, on Report, I set out the statutoryduty to uphold the continued independence of the judiciary that all Northern Ireland Ministers are subject to under Section 4 of the Constitutional Reform Act 2005. The judiciary are the guardians of what we know as the rule of law. Therefore, the duty in the 2005 Act is the right and fitting way to ensure that the rule of law is upheld and is embedded into Northern Ireland’s political life, rather than a further unnecessary amendment to the Bill. The amendment is not needed: the protection already exists in the pledge and in the 2005 Act.

As I have said, we do not question the principle of what the noble Lord seeks to achieve; nobody does. However, for the reasons I have set out, we are firmly of the opinion that further safeguards are unnecessary. However, we recognise the strength of feeling and depth of concern on this matter, and I reiterate that we stand ready to take forward in legislation any changes to the pledge of office that the parties can agree on in the context of a package on other constitutional issues. I therefore hope that the noble Lord will not press his amendment.

With the leave of the House, because this is the last opportunity I will have to speak on the Bill as it passes through the House, I have a short point to add. We all agree on the significance of the Bill. It recognises and builds on the ongoing transformation of Northern Ireland. It looks to the future and recognises the possibilities that lie ahead. I have set out why I do not believe that the amendment inserting the process for amending Orders in Council that was accepted on Report is helpful. However, the ministerial team and I recognise the strength of feeling in both Houses about the inadequacy of the present arrangements for dealing with the bulk of Northern Ireland legislation. They are very unsatisfactory. I am therefore prepared to give the House the following undertaking: between now and 24 November, our focus is fixed on getting devolution up and running, which is plan A, and we do not want to be diverted from that. However, if that does not prove possible, for whatever reason, the Government will quickly introduce measures to make direct rule more accountable, including provisions that will enable Orders in Council to be amended in the light of views expressed by Members of both Houses in a way that reflects the spirit of the amendment passed by this House on Report. There will be an opportunity, agreed through the usual channels, for an amendability stage in the parliamentary consideration of Northern Ireland Orders in Council. We will also ensure that we legislate for Northern Ireland by a Bill—primary legislation—wherever appropriate.

On Irish donations to political parties, I regret that the amendment was pushed to a vote and the clause was removed on Report. I have written in detail to noble Lords about this matter. The effect is to bar entirely donations from Irish citizens and other bodies to political parties in Northern Ireland from November next year. This change clearly goes against the spirit of the Good Friday agreement and would have serious repercussions for the parties and the political process in Northern Ireland. That is why the Government will seek to overturn that amendment in another place.

My Lords, before the Minister sits down, I find it rather strange that he is making these statements which would be best made next Tuesday when the Bill comes back to us to consider Commons amendments. We do not have much opportunity to comment on what he said. However, for these Benches, the words that the noble Lord uttered are helpful, and I thank him.

It may assist the House if we treat my noble friend’s intervention as the Minister speaking early in the debate on the amendment of the noble Lord, Lord Glentoran, which, as a result, will allow any noble Lord who wishes to speak.

My Lords, I welcome the part of the statement made by the noble Lord, Lord Rooker, regarding an amendability stage for Orders in Council. This is huge step forward and something that for 30 years we in the Ulster Unionist Party has been pressing for. It will take one of the more unacceptable edges off direct rule and help to make it more democratic. I hope that it will put an end to the scandalous situation that obtained in this House last week when legislation was forced through against the wishes not just of the Northern Ireland Members but of the people of Northern Ireland without the opportunity of discussing it in detail and focusing on aspects that could have been changed. There could have been legislation last week that would have been acceptable to people and which would have achieved most of the Minister’s aims had there been the opportunity to deal with it in the way which I now hope will happen after November of this year. So I welcome that.

However, I must also say that I do not welcome what the Minister said about the other change that was made on donations. I disagree entirely with his comment about the amendment being contrary to the Belfast agreement. That is not how I read the Belfast agreement and I claim to have a little expertise on the matter.

I make one other point on the substance of the amendment proposed by the noble Lord, Lord Glentoran. I understand the principle behind it. He is entirely right that persons who do not support policing should not be in office. Whatever the arguments may have been a number of years ago, we now have settled arrangements for policing, which are broadly endorsed, and there can be no excuse for any party not endorsing and supporting policing as things stand. The Government are making a huge mistake in their approach to republicans by continuing to try to induce them with further concessions on devolution of policing, which is wholly premature.

However, it might help the House on the substance of the amendment of the noble Lord, Lord Glentoran, to put in a little of the background. The amendment is to the provisions of the Northern Ireland Act for exclusion of Ministers from office. The mechanism in the Act is defective. We recognised that it was defective on 10 April 1998 because the mechanism depended on cross-community support, and we knew as a political reality that cross-community support would not exist then or in the future. Consequently, on the afternoon of that day we went to the Prime Minister and raised the matter. He communicated with us before the agreement was made—that is crucial in terms of the interpretation of the agreement—that if it turned out that the provisions of the Act on exclusion of Ministers were ineffective, he would support changes to the agreement. It was on the basis of that undertaking that I and my colleagues endorsed the agreement.

I am happy to say that the Prime Minister kept his promise. He kept it by ensuring that the Northern Ireland Act 2000 was enacted, which noble Lords will realise gives the British Government unilateral power to suspend the Assembly, which has been exercised—and was exercised most recently in 2002 after an ultimatum given by my party to the Prime Minister following the discovery of the extent of the criminality that the republicans had been engaged in. I hope that that safeguard, which in our view was crucial to the making of the agreement, is sustained and will achieve the objectives that the noble Lord, Lord Glentoran, has put forward. I hope that when the Minister said that the amendment of the noble Lord, Lord Glentoran, was unnecessary he had that Act in mind and that procedure which has been used and should be available in the future if it turns out that republicans return to criminality.

My Lords, I am grateful to have the opportunity to speak in the Orders in Council mini-debate which the noble Lord ran alongside the amendment of the noble Lord, Lord Glentoran. I thank the Minister for placing on record the Government's intention to address how we legislate for Northern Ireland in Westminster. It has been a long time coming. My noble friend Lord Smith of Clifton has been leading the charge, so to speak, on that point for a long time. We have certainly raised concerns on the matter for at least two years and we are very grateful that the Government have now fully taken those concerns on board and are prepared to act. We appreciate that the Government are firmly committed to the 24 November deadline and understand that we must concentrate first on restoring the Assembly.

However, if devolved power is not restored to Stormont by that date—of course, we sincerely hope that politicians in Northern Ireland will be able to find a way through the current impasse—how quickly will the Government move to put the new arrangements in place?

We on these Benches also very much welcome the intention to legislate for Northern Ireland by primary legislation, where appropriate. Can the Minister clarify precisely what that means? Are we likely to see more Bills such as this, where a number of unrelated measures are scrutinised at once, or will it mean that Northern Ireland measures will be included in legislation for England and Wales that is proceeding through Parliament?

Given our debates on anonymous registration, it would be much better if provisions for Northern Ireland were included in that way. However, we appreciate that that would require discussion between various government departments. Can the Minister assure the House that there will be better co-operation and co-ordination between the various Northern Ireland departments and departments in Whitehall?

My Lords, I want briefly to place on record the appreciation of the Ulster Unionist Party of the statement just made by the noble Lord, Lord Rooker. It has considerable significance, which is not only recognised in our Parliament here in Westminster but will be very important to the people in Northern Ireland.

I repeat what I warned about a few months ago: when the Prime Minister of the United Kingdom and the Prime Minister of the Republic of Ireland met in Armagh city, they implied that there was a plan B, should devolution not proceed by the deadline of24 November this year, and that that plan B would be further involvement of the Republic of Ireland in the internal affairs of Northern Ireland. I warned that that was having a dangerous impact on the loyalist community in Northern Ireland and that alarm bells were ringing across the Province. The day after the meeting in Armagh, the UDA and UVF—two illegal organisations which had said that they were going to decommission—announced that their plans for decommissioning had been abandoned. That was a real warning of the impact of the Armagh meeting on the people of Northern Ireland.

Today's statement by the noble Lord, Lord Rooker, is therefore not only good for the procedure of legislation relating to Northern Ireland under the direct rule system but, it should improve political attitudes on the ground in Northern Ireland. As an Ulster Unionist, I recognise the courage of the noble Lord in coming forward today to clarify what will be the procedures should there be no devolution by 24 November.

My Lords, very briefly, first, I thank the Minister for his courtesy in writing to a number of us last week about the misunderstandings that went back and forth over donations to political parties. His explanation is clear. There may still be some small ways in which the provision could be misused, but they are not significant; so I am grateful to him.

I should also say—I will say it this way to save the time of the House—that I very much agreed with everything that the noble Lord, Lord Trimble, said. So I do not have to say it again. Finally, can the Minister confirm in as many words—he has come pretty close—that if it became clear that any Minister was not committed to upholding the rule of law in Northern Ireland, that Minister would promptly be excluded from office? If he can say those words, it will make a great deal of difference to how we might look at the amendment tabled by my noble friend Lord Glentoran.

My Lords, I am sorry to have dumped this on the House. I had no other opportunity to do so, as there is only one amendment. The rules of this place—there are no rules of this place—make it easier to do these things, because we do not have Third Reading speeches. We are going to come back to this, because the other place will consider the amendments to the Bill and there will be an opportunity on Tuesday for us to deal with that. The answer to the final question asked by the noble Lord, Lord Tebbit, is yes. I appreciate what he said about the letter, which I hope clarified the position. It certainly cleared it up for me.

I am also grateful for the broad welcome given by the noble Lord, Lord Kilclooney, to the short statement that I was able to give. Let us make it absolutely clear that we do not want direct rule; we want the Assembly back. In the event that we continue with direct rule, the entire legislative framework and the laws governing Northern Ireland will be made here at Westminster, and there will be more scrutiny than there has been in the past 30 years. That is quite clear from the statement. No one need be in any doubt whatever about that in Northern Ireland.

The noble Baroness made a point about speed. Usually when Ministers want to hedge things, they say, “We will do this in due course” or “We will do this shortly”. I actually said—I have it in bold in front of me, and I said word for word,

“the Government will quickly introduce measures to make direct rule more accountable”.

Quickly does mean quickly after 24 November. I do not know the date of the Queen’s Speech at the moment—there is a bit of flexibility at that point in the year because of the date of the State Opening of Parliament—but it will happen quite quickly afterwards.

I thank the noble Lord, Lord Trimble, for his welcome and for the background that he gave but, to avoid any doubt, the Bill does not devolve policing. It enables policing to be devolved, but it was made abundantly clear before the noble Lord entered the House that it will be some way down the road before the trigger—if I can use that term—would be pulled to devolve. However, the Government were obliged to put on the statute book the legislative framework for the possible planned devolution of policing, which is what the Bill does. It does not devolve policing. That was made quite clear.

My Lords, my comments were as much directed against certain foolish parts of the Secretary of State’s speech on Sunday.

My Lords, my right honourable friend does not make foolish speeches. He made an excellent speech on Sunday. It was quite a long one, and he said one or two things about the consequences if plan B comes into being; in other words, direct rule will continue. We have made it quite clear that we would not mind the shop, as now. The process of reform will continue, and in some ways it will speed up. The fact that the Bill will achieve Royal Assent does not mean that policing will be devolved. That is what I need to put on the record. It will be years before the circumstances will be right, but the point is that the legal mechanism is in place. In fact it has already been put there and this Bill clarifies certain points from other legislation.

For 30-odd years we have dealt with unsatisfactory legislation for Northern Ireland. Having got an Assembly up and running—and hoping that it would be back by now—we have tried in the past 12 months or so to find a mechanism. But we have reached the point where we have said what we have said today, and that goes further than anything else over the past 30-odd years. It is a major upheaval. Let me put it this way: the usual channels will want to make sure that this is for Northern Ireland only. It is secondary legislation quite distinctly for Northern Ireland.

I want to make a final point. The other day someone mentioned the budget. In this House we do not debate in great detail the Budget for Great Britain; so I donot expect that we will be debating in detail the budget for Northern Ireland. There are rules on finance that we have to abide by, and I think that that is quite legitimate. But the general spirit of everything else shows that this is a major and substantial change to the democratic scrutiny of legislation under which the people of Northern Ireland live. I am grateful for noble Lords’ response to the statement. I hope that when the Commons have looked at the amendmentsin your Lordships’ House, and perhaps sent us a message back, we can reach an amicable solution so that the Bill can receive Royal Assent.

My Lords, I thank the noble Lord, Lord Rooker, for that response and for the whole way in which he has handled the Bill for the Government. I refer in particular to a little incident that happened yesterday. Early in the afternoon I had a meeting with him in his office. Later in the afternoon, he was in my office and we reached a mutual agreement that we had it right at this end and the other end had cocked it up—if I can use that language in this place. The result has finally come out of the machine and the statement he has read out is agreed by all of us. I think that it is a very good compromise.

I have also read the Secretary of State’s speech, which probably should not have been mentioned this afternoon. It took me about 20 minutes to read—it is a very long speech. I am not sure that it was totally brilliant for the location in which it was made or for the audience to whom it was made. I thought he took a number of risks, but we shall find out how that has worked as it makes its way through.

Having said that, I am afraid that I have to return to my amendment. On this occasion I think that the Government and the Minister are wrong and that it is necessary to strengthen this part of either the pledge or the reasons for removing Ministers from power. The point is critical—crucial—to the debate now taking place between the parties and there should be no fudging: it has to be absolutely crystal clear. I am sure that I am not being presumptive in saying that I know that the Minister agrees as strongly as I do that it is either right or wrong. You are either on-side with the police and the national judicial processes or you are not. Several times during the course of this debate the noble Lord, Lord Rooker, has put it more succinctly than I can. Speaking not just for myself but also for my party, we would like something stronger in the Bill. I wish to test the opinion of the House.

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

Moved, That the Bill do now pass.—(Lord Rooker.)

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

My Lords, with the leave of the House, I would like to repeat a Statement made by my right honourable friend the Home Secretary in another place. The Statement is as follows:

“Mr Speaker, I would like to make a Statement about our plans for transforming the Home Office. I have today placed in the Library a copy of a reform action plan which gives full details of the changes we intend to make. All political change should start with values and objectives.

“The Home Office exists to protect the key elements of civilised society in this country—to reduce fear and increase security, from global terrorism to local cohesion in our streets and communities; from justice and fairness through to the protection of opportunities to live life in security. But the context in which we seek to apply these values is changing faster than ever before, and changing fundamentally, creating new and different challenges for the future.

“In the past 15 years we have seen seismic geopolitical changes, from the global to the local. Globally, the old Cold War had frozen the world into relative immobility. States were static and frozen, ethnic tensions and religious extremism repressed, borders inviolable and peoples largely static.

“The end of the Cold War brought a torrent of new problems and, above all, the challenge of international mobility on a hitherto unimaginable scale. We have seen unprecedented levels of migration, with the movement of more than 200 million people in 2005, the development of international terrorism and the growth of global and organised crime.

“From global to local, relative immobility has given way to social and geographic mobility, where the old group allegiances, extended family relationships and inherited patterns of voting and religious observance have broken down and, with them, the old forms of community cohesion.

“Moreover, unlike most other government departments in this changing context, many of the people with whom the Home Office is tryingto deal—prisoners, criminals and illegal immigrants—see it as their primary objective not to co-operate with government and to resist our authority and evade our control.

“In the face of these challenges, the Home Office has been in a process of change and reform for some years. The department also has a more streamlined focus as a result of some of our responsibilities being transferred to other departments.

“I therefore pay credit to my predecessors in this Government and to the civil servants who worked for them in facing these challenges. They took a system that was designed before the Cold War and improved it in three important ways: additional resources, improvements in technology, and legislative and practical solutions.

“These improvements have led to notable successes in key areas: crime is down significantly; your chance of being a victim of crime is at its lowest level since 1981; we have record numbers of police and an additional 6,300 community support officers on the streets; asylum applications are now dealt with in two months as opposed to 22 months. The passport service, which was failing just a few years ago, now regularly tops customer service polls, beating leading private sector organisations.

“But the underlying systems and practices for dealing with these issues have not changed sufficiently. Many of the fundamental underlying systems in the Home Office were designed for a pre-Cold War era and, in the face of the huge challenges outlined earlier, we have now reached the limit of what can be achieved without a fundamental overhaul.

“The Home Office capability review, published today, strongly reinforces those views. We have seen some of these inadequacies surface recently, in co-ordination, administration and accounts. In co-ordination, the House knows all too well, for instance, how the release of foreign prisoners challenged systems across the Home Office and criminal justice system, and found them wanting.

“In administration, the House will know, for example, that the National Audit Office last year suggested that 283,000 unsuccessful asylum applicants might still be here, excluding dependants and those who claimed asylum before 1994 and after 2004, reflecting the difficulties that successive Governments have had in removing failed asylum seekers. This is reflected in IND’s caseload of around 400,000 to 450,000 electronic and paper records, which, as the House will also be aware, are riddled with duplication and include cases where the individual has since died, or left the country, or are now EU citizens.

“In accounts, the House will also be aware that the Home Office’s resource accounts for 2004-05 were disclaimed by the National Audit Office. We have sought to remedy these individual instances.I have today set out in a Written Ministerial Statement our plans to improve the way in which we deal with foreign national prisoners. We will tackle the caseload in IND with the aim of clearing it, not in 25 years, as has been speculated, but in five or less. And we will put our books in order. But, as today’s capability review shows, we need to go much further in general and fundamental reform.

“For all these reasons, I am today setting out plans for an ambitious set of reforms across the department. In particular, we will sharpen the Home Office’s focus on its core purpose of protecting the public through the six key priorities set out in today’s plan. We will establish a new top team with a reshaped Home Office Board and 15 immediate changes at director level, which is over a quarter of all directors. We will reshape radically the structure of the Home Office with a major shift in responsibility and resource to the front line. We will fulfil our commitment to reduce the total size of the Home Office strategic and operational headquarters by 30 per cent by 2008. But we can also now make a commitment to a further reduction of 10 per cent by 2010.

“The cumulative effect of these changes will be to reduce the size of the headquarters of the Home Office and its agencies from 9,200 in 2004 to 6,500 in 2008, and to 5,900 by 2010. These changes will mark the biggest shift from the centre to the front line in the Home Office’s history. We will save £115 million per year by 2010 in headquarters costs which we will invest in improving front-line services.

“We will establish the Immigration and Nationality Directorate as an executive agency of the Home Office with a shadow agency in placeby April 2007, with strong accountability arrangements. We will establish clear performance frameworks for the operational services of the Home Office—the Immigration and Nationality Directorate, the National Offender Management Service, and the Identity and Passport Service—and hold the heads of those services accountable for performance.

“We will focus the National Offender Management Service headquarters on the job of commissioning high-quality services for managing offenders and driving up the performance of the probation and prison services. As a result,the National Offender Management Service headquarters will get progressively smaller, reducing by half by 2010.

“We will develop a renewed contract between Ministers and officials, clarifying respective roles and expectations in policy, operational delivery and management. We will seek to reduce further the bureaucratic burden on the police and other partners in tackling crime by implementing simpler performance arrangements for policing, crime and drugs. We are also launching today a radical reform programme with seven strands of change designed to transform the culture, skills, systems, processes and data of the Home Office.

“We have today set out a clear action plan to deliver this reform and more. By September, we will develop a full implementation programme. An external audit of progress will be conducted in December and annually thereafter. In the next few days we will supplement today’s plan with two further sets of proposals for rebalancing the criminal justice system and reforming our Immigration and Nationality Directorate.

“We are determined to deliver a confidently led and well managed Home Office which delivers high quality services that protect the public and better meets their expectations. I thank my Ministers and senior officials for all the work already put into the development of our new plans.

“We do not start from year zero, and we will not end up with perfection. But this is the start of a long-term programme for transforming the Home Office. All involved—Ministers, directors and staff—know the extent of the challenge, and that this will not be accomplished overnight. But we are committed to early progress, to demonstrate our seriousness to the public and to our stakeholders and staff. The fundamental change we are seeking will require determination and endurance. This is the unglamorous hard work of delivering good government. That is now the task ahead”.

My Lords, I commend the Statement to the House.

My Lords, I thank the Minister for repeating the Statement made in another place by the Home Secretary.

The past 12 weeks have witnessed a series of catastrophes at the Home Office, with daily disclosures of massive failures of policy—from the release of foreign prisoners to murderers on probation, from sex-for-visa scandals to dangerous prisoners being put in open prisons, from hundreds of thousands of failed asylum seekers to massive numbers of illegal immigrants. This has been a spectacular serial failure of government. Each and every failure has serious implications for ordinary decent British citizens. At the very least, the Government waste hard-earned taxpayers’ money and put excessive pressure on housing and public services; at worst, they threaten public safety and national security.

We need to understand why that has happened. The wrong analysis of the problem will lead to the wrong conclusion. The Home Secretary puts it down to the end of the Cold War, and with it the rise in asylum seekers and other threats. However, that does not explain why Britain has had the second highest number of asylum applicants in the world in the past five years, a Britain that is further away from the failed states than any other European country except for Ireland, which is an island and is therefore harder to get to, and has borders that are easier to control.

The reason for the problem is clear. The new Labour Government repealed Conservative laws allowing us to send people straight back to safe countries. Labour terminated Conservative welfare arrangements designed to deter economic migrants, and failed to negotiate a continuation of our right to return asylum seekers to France. They later tried to reinstate some of these, but it was too late. In the next five years we had over a quarter of a million failed asylum seekers enter Britain—failed asylum seekers, not legitimate ones—with almost 90,000 in one year alone. That is why the immigration and nationality department was overwhelmed; that, and a political decision not to strengthen our borders.

Of course there have been failures of management, but there have been much bigger failures of political leadership. The same is true elsewhere in the Home Office. The débâcle over foreign prisoners and early-release schemes that are not working safely and properly come from the same cause, which was a political decision not to build enough prisons—although I pay tribute to the Minister for acknowledging that.

The Government’s own review showed that they needed 100,000 prison places by 2010, but even after the 8,000 new places the Home Secretary announced today, they will have fewer than 90,000 places by 2012. Again, there have been failures of management, but in a system put under intolerable pressure by failures of political leadership. Since 1997 there have been more than 1,300 new regulations, many hundreds of initiatives and more than 50 major Home Office Bills. That is more than all the criminal justice Bills in the previous century. Some of those Bills were not fit for purpose. That is not just our opinion but clearly the Government’s too. We should take, for instance, the Criminal Justice and Court Services Act: 110 of its provisions never came into force; 17 were repealed before they came into force; and 39 more were repealed after they came into force. This was not the only Act in this state—massive amounts of work for no use whatever.

This is not a department which is impossible to run. Indeed, it has given up responsibility for no fewer than 24 policy areas since 1997. But, under the burdens of a target-driven, bureaucratic, top-heavy approach pursued by this Government, its central staffing has doubled, though I note the Minister’s remarks about reducing staff. It is perhaps revealing that its press officers have trebled.

I finish on a positive note. Some of the Home Secretary’s proposals announced today have merit. The agency proposals for the IND may improve some aspects of its management, but may make communications and co-operation with other parts of the Home Office more difficult. It will certainlynot absolve Ministers of responsibility for its effectiveness. We all hope that the measures announced today will succeed, but even if they do they are unlikely to resolve problems of the size the Secretary of State’s department now faces.

My Lords, I add my thanks to the Minister for repeating the Statement on the Home Office reform action plan. I trust that the noble Baroness, Lady Scotland, had a pleasant visit to the United States and that she has some better news to offer at some stage.

It is too early to comment in detail since the plans were put in the Library only this morning. Suffice to say that this great office of state is in turmoil. We do not need convincing that the Government have lost their way in the 10 years since they came to power. I do not dispute the context in which the values and objectives have been set out. Of course, the Home Office exists to protect the key elements of our civilised society, but do we genuinely believe that it has been effective? We have failed to reduce the fear factor, and despite increased activity by the police and security services, the threat of global terrorism and the fear it generates are still there. We still cannot put a hand on our hearts and say that we have cohesion in our streets and communities. It is bizarre to blame the end of the Cold War for the Home Office’s woes, when it ended 15 years ago and this Government have been in power for 10 years.

One has sympathy with the problems the Home Office has to deal with, comprising prisoners, criminals and illegal immigrants. The Government have for months ignored warnings about the prison overcrowding crisis. A last-minute panic measure to conjure up extra prison capacity does nothing to address the long-term nature of our prison crisis. Unless the Government are serious about breaking the cycle of reoffending, in which prisons act increasingly as a revolving door for repeat offenders, our overburdened prison system will remain under severe strain.

Why is it that the Government fail to acknowledge that at the root of the problem with criminals is their hyperactive attitude to legislation and half-baked media initiatives, with more than 50 law and order Bills and more than 1,000 new criminal offences, as rightly pointed out by the noble Viscount? It is a shocking indictment of the Government that despite five major immigration and asylum Acts there are more illegal immigrants unaccounted for now than 10 years ago.

There is a need for a clear and consistent policy approach, which is lacking. We spend weeks debating police mergers and then find that they have been placed on the back-burner. No Home Office, however structured, could deal with the Government’s volleys of initiatives. Too many high-profile targets can jeopardise the Government’s capacity to do anything else, because they focus all their energies on the one thing; hence tipping the balance of asylum seekers has led to the meltdown in all other areas of the management of illegal immigration.

The Statement says that the Home Office has benefited from the increasing streamlining of functions by the transfer of some policy areas to other departments. So why will it not commit to a separate department of justice and a department of the interior, to enable a more coherent approach to those separate issues? It is extraordinary for the Home Office to claim that it can deport 450,000 failed asylum seekers in less than five years when it is currently deporting only 15,000 a year. We welcome the proposal for a more independent IND, but that must not absolve Ministers of responsibility. They should consider separating asylum, which is quasi-judicial, in accordance with international obligations, from immigration.

In the present time of increased global tensions, we all want the Home Office to succeed in providing security for our nation. The recent revelation has shaken our confidence in the Home Office’s ability to deliver it. Ten years in power is a long time to discover and discuss our errors. Let us hope that this new initiative works and that it is a department fit for purpose.

My Lords, first, I thank the noble Viscount, Lord Bridgeman, and the noble Lord, Lord Dholakia, for welcoming the Statement. It would be my pleasure to outline why I fundamentally disagree with the assessment that has been made of the way in which the past 10 years have been managed. The noble Viscount says that this is a Government in turmoil, as does the noble Lord, Lord Dholakia. The noble Viscount says that there has been a consummate failure in policy. That would be a fundamental misunderstanding of the difficulties with which the Government have been faced, the challenges that we have met and overcome, and the success that this Government have been able to deliver for the people of this country.

I will straight away address some of the factors that have been alluded to. A heavy reliance has been put on issues in relation to asylum and immigration. It is right to remember the facts. Applications are down by 76 per cent compared to October 2002, which was its peak. In 2005, the intake was 24 per cent lower than in 2004; that was 25,720 compared to 33,960. Applications rose by 45 per cent between 1993 and 1997, which was a significant change. Asylum applications were down from more than 8,000 a month at the peak in October 2002 to just over 2,000 in the first quarter of 2006. Some 73 per cent of new substantive claims are decided within two months rather than the 22 months, including the old cases it took on in 1997 when we came to power.

The ratio of removals to failed applicants each year is going up. In 1996, the number of removals was equivalent to only 20 per cent of predicted unfounded claims. That proportion was around 50 per cent in 2004, and in 2005 it increased further to around two-thirds of unsuccessful claims. We removed more principal applicants in 2005 alone—that is 13,670—compared to the last four full years of the Tory Government; that is 12,020 in 1993 to 1996. Removals of principal asylum applicants increased by 184 per cent between 1996 and 2005, but the intake increased by just 13 per cent. We have increased removals and principal asylum applications by 91 per cent between 1997 and 2005. That is not failure; that is a lot of hard, dedicated work significantly to improve matters.

But a reality does have to be faced, because the Government had to decide whether to improve the system so that, in looking forward, we could have a better grip—a system that was faster, clearer and more effective. One of the large problems with which we have been faced is not being able to deal with these applications quickly enough. The 22-month delay that we inherited meant that many people had put down roots and had made commitments that were difficult to disrupt. We have moved on.

So now is the time to look at the backlog. When one looks at the 450,000, it is right to bear in mind that in many of those cases we are not talking about individual people or individual issues, we are talking about applications. Some of the people involved will have died; some of them will have achieved their rights by a different means, because they have become European citizens; and some of them will have made multiple applications. So now is the time for us to look at this matter.

There has been major change in the criminal justice system—the creation of the National Criminal Justice Board, local criminal justice boards, crime and disorder reduction partnerships and local strategic partnerships, all of which have benefited of the people of our country, together with the significant increase in police numbers and community support officers. Your Lordships may recall that many in this House derided those proposals initially, believing that they would have little or no effect. Yet we know that they have been among the most innovative and important changes that we have introduced. There was also legislation regarding anti-social behaviour—and I could go on.

I must say as gently as I can to noble Lords opposite that I hear what they say about this Government’s record, but I do not agree with them for the reasons that I have set out. However, it is clear that change is needed, because we are now faced with the need to bring about systemic change that will be better able to meet the new challenges with which we are now faced. Therefore, I very much welcome the comments in support of the changes that the Government now seek to make.

As I have indicated, I hope that we will be in a position, with the leave of the House, to discuss in greater detail the other supplementary documents that we hope to produce soon. This is an important and significant change and I welcome the welcome given to it.

My Lords, I thank my noble friend for repeating the Statement made in another place. Much of what she said was fairly general regarding the problems of the immigration and nationality department, but will she confirm that not everything done by the immigration and nationality department should be condemned? For example, extremely valuable work is going on to facilitate the entry into this country of students wanting to enter further, higher and other forms of education. The immigration and nationality department’s work in the Joint Education Taskforce, on which I have the privilege to serve, is extremely welcome and of enormous benefit, both in the short term and the long term, to the interests of this country, and is being done extremely well under the chairmanship of Alan Bucknall in the Home Office.

Will my noble friend confirm that the new system planned to be introduced relatively shortly for managed migration in the education system will not be detrimentally affected, because it is warmly welcomed by nearly all the participants in the Joint Education Taskforce and will not only bring great benefit, but is very much a high-level government priority, as shown in the Prime Minister’s initiative for the attraction of overseas students? However, it does depend on the introduction of the new managed migration system.

My Lords, I am very happy to confirm what my noble friend has said. I hope that in the statistics I provided I indicated that I do not agree with the impression given by noble Lords opposite that this system was wholly unfit and, therefore, to be derided. There is much to celebrate. Our work on the Joint Education Taskforce is but another demonstration of the excellent work being done in the Home Office to the great benefit of those who are able to take advantage of that.

My Lords, the Statement refers to the Government’s further plans to rebalance the criminal justice system. Can we expect a further Statement on that before the House rises and, if not, when?

My Lords, we will certainly make another document available. The noble and learned Lord knows that whether this House accepts another Statement will be a matter for the usual channels. I assure him that it is our intention to make such a Statement available. The usual channels will then have to decide whether this House is minded to take it.

My Lords, have not the Government to face up to the fact that in the fairly early days of the Labour Government, there was a collapse of morale in IND on it becoming apparent that Ministers had little or no interest in the maintenance of fair and firm immigration control? Cannot one moral be drawn from that? The efficient implementation of policy is important and good systems are important but even more important is political leadership, with the staff knowing clearly what the department is supposed to be doing and where it is going. We will not get very far unless the Government stop blaming staff and recognise, albeit belatedly, that the cause of the Home Office’s problems over the years has been a massive failure of political leadership.

My Lords, I must say to the noble Lord how much I disagree with him about the failure of leadership and that this Government have not blamed staff. My right honourable friend the Home Secretary says that even the best staff, if they were working within a system that is fundamentally flawed and if they did so for 24 hours a day, could not deliver that which they could deliver if they had a smooth, effective and efficient system. That is what we are seeking to change. We inherited a system that was moribund and we tried to work within it, and we got limited but good results. Having got the best results out of it, it is now time to change. Noble Lords opposite may not wish to remember this but I hope that they will recall that staff levels were dramatically cut under the previous Government and morale was adversely affected thereby. That is a matter of history that one should perhaps reflect on when we contextualise where we are now.

My Lords, it was with deep regret that I tendered my resignation to the Asylum and Immigration Tribunal a fortnight ago. I did that because I could no longer bear the incompetence of the whole business. I was giving cases my most careful and anxious scrutiny day after day knowing full well that the whole system that that was built on was flawed.

The noble Viscount, Lord Bridgeman, gave a list of faults under this Government. I attribute quite a lot of the problems to the Tory Party’s removal of work permits in 1992, which led to an increase in the number of asylum cases. Before that, asylum claimants used to be the intelligentsia from other countries but after that we got the people who came over mainly from the Asian subcontinent to work here for two or three years, to build their brick house in Pakistan, Bangladesh or India, and then to go back; then someone else would come over. A whole industry built up with agents taking thousands of pounds from families in order to get one person into this country to work. The agents used to say, “You will have to go through the system but at the end don’t worry—you will not be removed; you will stay”. Those people would have gone back in the past but they now stay.

Does the Minister agree that it is necessary to pay much more attention to people at entry points in airports? I know that in some cases—Heathrow Airport, for example—the immigration and customs posts are not manned in the early hours of the morning. Don’t kid me—the agents know this and that is when they bring people in. We do not know who goes out. I think it was this Government who stopped counting the people who leave. We need to know who comes in and who goes out. We also need much more co-operation between the Home Office and the Department for Constitutional Affairs. The Department for Constitutional Affairs is now cutting back on immigration judges and wondering why the cases are piling up, causing another backlog. Perhaps the noble Baroness could pay attention to those factors.

My Lords, we shall pay attention to those issues. The noble Countess will know that a huge part of the work that we have done in recent years has dealt with managed migration, giving people legitimate, honest, decent routes through which to come to this country, allowing them to come here in an honourable and transparent way so that those who come here to work diligently will have a better opportunity and will not fall prey to those who take advantage of their need to earn money to help their families back home. We have already seen some movement in that regard which is very beneficial.

I hope the noble Countess knows that embarkation controls are now being considered. New electronic systems have given us a much better way of doing that. The situation with the embarkation controls that started to be removed in 1994 has now been addressed and we are starting to reverse that. We shall be better able to meet that challenge. I can assure her that I will work very hard indeed with the Department for Constitutional Affairs so that we shall have a better response to dealing with tribunal matters. We are considering how to speed up that process, make it more transparent and ensure that the information that goes to tribunals is better prepared than it has been hitherto.

My Lords, when I served as a Minister of State in the Home Office, five years after the Cold War, I was not aware of any problems arising from the Cold War. A number of prisoners escaped and we found it extremely difficult to deal with that because we had to deal with an agency. Therefore, I fail to understand how Ministers passing the buck to a new agency will enable them to provide the necessary leadership. If the Home Office has been doing such a brilliant job, as the Minister indicated, why did the Secretary of State describe it as not fit for purpose within hours of arriving in the department? How can he possibly embark on a wholesale reorganisation of the department after being there for only two months? I realise that he thinks he is very bright, very brilliant and very tough, but most of us ordinary mortals take at least three months to read into the brief of a department, far less decide on a wholesale change. Is this not yet another eye-catching initiative to get the Government out of the trouble that they have created? What is needed in the Home Office is the recognition that Ministers have put burden upon burden on good civil servants and that the organisation has cracked under the failure and incompetence of their leadership.

My Lords, there has been no failure of leadership. I take issue with the noble Lord in that regard. It is very important for us to remember the context in which my right honourable friend the Home Secretary used the phrase “not fit for purpose”. Although others have used that appendage in relation to the whole of the Home Office, as I am sure the noble Lord knows well, my right honourable friend was referring to foreign national prisoners and the system that was in place within the IND to deal with that small part. When one engages in political rhetoric, I appreciate that accuracy sometimes falls by the way.

The whole import of my right honourable friend's work, together with the work of the Home Office team and the officials, was to look with a fresh eye at what could now be done to get more for the front line, to respond to the needs that have been identified by the people of the country, to work on the empirical data that we now have regarding what works, and to make changes to enable us to make the quantum leap that we believe it is necessary to make on behalf of the people in our country. We are building on good, solid practice. When noble Lords look at the changes we are minded to make, it will confirm, improve—we hope—and go further, consolidating the work we have done and building on the five-year strategy which I am sure that everyone in this House has had the delight of reading and fully absorbing.

My Lords, does the Minister recall that when the Cold War came to an end—I was an MP at the time—we got a dramatic influx of Polish people, particularly in my constituency? They started arriving in large numbers. It was hard to argue that they were refugees. Both political parties have yet to get this right, although my feeling is that the present Government have been getting it right in the last few years, but there is further to go. I welcome the separation of the immigration and nationality department. As the noble Countess, Lady Mar, said, it has been failing for a long time.

I have one further request for my noble friend, on something where the Opposition are on rather safer ground than some of their other criticisms. Certainly, in the past, I could not get people deported who had sometimes committed murder; I got that in the press in the early 1990s. It is not new. We must address the fact that we have been making too much legislation in this area, and a period of consolidation would be a good idea.

My Lords, as one of those usually burdened with that legislation, I could not possibly comment, but I can certainly assure your Lordships that we need have only that legislation necessary to deliver this agenda. We have committed ourselves to that.

I should have answered another issue raised by the noble Lord, Lord Forsyth, about the new agency. In case there is a misunderstanding, I say that there will be no passing the buck to it. Political direction, strategy and strategic control will remain within the Home Office and with Ministers. The agency will deal with the operational issues which the Passport Office and others have demonstrated can be ably delivered through that sort of framework. When we have the second document, on how that transition is to take place, we will doubtless be able to debate the minutiae of those arrangements more keenly.

My Lords, the experiences of the Passport Office and Prison Service have shown both the advantages and disadvantages of turning departments into agencies. I am glad that the Minister has drawn attention to the successes of the IND in recent years, which have tended to be overlooked because of recent developments and troubles. I invite her to be cautious in moving the IND to agency status, and not to hurry it. When it is in a steady state and its operational objectives are clearly stated, understood and approved by Parliament, that would be a good time to put it on an agency basis. It would be wise to defer that change until that more steady state can be achieved.

My Lords, I thank the noble Lord for those comments. He speaks with great power from his experience on both the challenge and the success that can come from such change. I assure him that, in looking at both the advantages and disadvantages inherent in other changes to agency operations, we will look carefully to ensure that good examples are followed and poorer examples of practice avoided. I remind him that the Statement proposes that a shadow agency be started up in 2007, which will help us to recast and frame the final agency with a greater degree of acuity than we could perhaps do now.

My Lords, when the new Home Secretary described the Home Office as not fit for purpose, I understood him to refer to the whole office, not to any particular department in it, although I have no doubt that he had his mind on one part of the office in particular in coming to that conclusion. His statement was reasonably plain. I had some contact with the Home Office as part of my responsibilities in a related department for a number of years, and I had considerable respect for those who served as civil servants in it. I felt rather sad—I may have been completely wrong—that they should be described as working in an office that was not fit for purpose.

The noble Baroness has been a Minister in the Home Office for some time. Can she tell the House whether the plans proposed today were drawn up since the new Secretary of State arrived or were in preparation under his predecessor?

My Lords, the plans are an amalgam of issues that were being contemplated and new issues that have come to the fore. For example, noble Lords will know that for some years there has been a debate about whether agency status would inure to the advantage of the management of migration. This House has debated that on a number of occasions. Some noble Lords on the Benches opposite were particularly supportive of the suggestion that it would be a way forward. It is not possible to say that all the issues simply fermented during the time that my right honourable friend has been Home Secretary, but they have crystallised—

Cobbled together.

My Lords, I assure the noble Lord that crafting something with such skill needs more than a cobbler.

My Lords, in view of the litany of praise we have heard from the Minister for all that has happened in the Home Office, will she explain why any part of that department was described as unfit for purpose? Can she explain why the former Home Secretary was sacked by the Prime Minister in a pretty unpleasant manner? Would she not agree with the noble Countess, Lady Mar, that until we have an effective system of monitoring those who leave the country, we will never know how many applications are no longer active because the people concerned have returned home?

My Lords, I hate to remind the noble Lord of his Government’s failings, but he will remember—

Embarkation control.

My Lords, the noble Lord points his finger and waves it at me, saying “Embarkation control”, but I remind him that his Government decided in 1994 that embarkation control was no longer necessary. We continued that policy for a time, but we have subsequently seen the fatal error therein and now seek to reverse it. We have done so through the electronic process, and I assure him that we intend to succeed.

My Lords, I beg to move that the Commons amendments be now considered.

Moved accordingly, and, on Question, Motion agreed to.

commons amendments

[The page and line references are to Bill 155 as first printed for the Commons.]

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In speaking to Amendment No. 1, I shall speak also to Amendments Nos. 6, 7, 8 and 10. This group of amendments will make a real difference to sufferers from mesothelioma and their families who have been or would have been affected by the recent House of Lords’ judgment in the case of Barker v Corus, and conjoined cases.

As noble Lords who have been following these issues will know, the case of Fairchild fundamentally changed some of the principles of liability, but did not resolve whether liability should be joint and several. It was important to clarify that. The practical effects that became apparent as a result of the House of Lords’ judgment have made this legislation necessary.

In practice, the claimant would have to trace all relevant defendants so far as possible before liability could be apportioned and full compensation paid, or alternatively to issue multiple claims to recover damages on a piecemeal basis. That would cause delays in resolving claims and increase difficulties for claimants when, as I am sure noble Lords will appreciate, they and their families are already suffering considerable pain and stress.

The Government have therefore acted quickly to address these problems. I am, as always, grateful to the noble Lord, Lord Goodhart, who in discussing these issues met my noble and learned friend the Lord Chancellor. I am very grateful to the team of the noble Lord, Lord Hunt, who have been extremely helpful in discussing these issues with us over the past few weeks and to the ABI, APIL and the TUC for their helpful and constructive input into these amendments.

By providing for joint and several liability, Amendment No. 1 will enable the claimant to recover full compensation from any responsible person. It will also apply to claims made by the claimant’s estate or dependants where he has not made or resolved a claim prior to his death.

The provision will apply regardless of where the exposure has taken place. I am aware of views that this may extend the principle contained in Fairchild. That is not the case. Although the case of Fairchild related to a workplace exposure, the principle contained in the House of Lords’ judgment was not restricted to these cases. To restrict this provision to workplace exposure would mean that some claimants affected by the Barker judgment would be left in exactly the same difficulties that they are now suffering, and that different claimants would be treated in different ways purely because of where the exposure occurred. I hope noble Lords will agree that that cannot be right.

It also ensures that where a claimant has worked for a single employer who is now insolvent, but where only part of the period of exposure is covered by insurance, the claimant will be able to recover compensation from that insurer on the same basis as they could before the Barker case.

Subsection (3) makes clear that this provision does not affect the existing law on contributory negligence. Where a claimant is responsible for part of the negligent exposure, it is right that that should be reflected in the level of compensation that he is awarded when liability is determined. But the provision will apply where, for example, a self-employed person has been negligently exposed by another while working as a contractor. Subsection (3) also makes clear that a person who has paid full compensation can then seek a contribution to the damages awarded from other responsible persons under the Civil Liability (Contribution) Act 1978. We think it is right to make it as easy as possible for defendants and insurers to recover contributions. Subsection (4) will ensure that defendants and insurers are able to recover contributions in as straightforward a way as possible.

It is also important that the lawyers acting for claimants ensure that defendants are provided with a full employment and exposure history. We are looking at whether amendments to secondary legislation will help to achieve this.

Subsections (7) to (11) confer a power on Her Majesty’s Treasury to make regulations about the provision of compensation to a responsible person or an insurer of a responsible person in specified circumstances. These provisions are essential in helping to avoid delay in paying compensation and will allow the current practice to continue of employers or insurers making parallel payments with the financial services compensation scheme. As well as speeding up the claims process, that will also produce a fair outcome for insurers.

The subsections confer a power for Her Majesty's Treasury to make provisions that would facilitate the speeding up of payment of claims to mesothelioma victims. Those provisions would then enable responsible persons to claim money back from the financial services compensation scheme when another responsible person and their insurer are both insolvent and therefore unable to pay their share of compensation payments. The power includes the ability to deal with situations arising prior to the establishment of the financial services compensation scheme that were settled under the Policyholders Protection Act 1975.

The provisions would come into effect only once the Treasury has laid the necessary regulations and the FSA has made the relevant rules. However, the power provides that rules could permit the liable party to claim contributions in respect of claims dealt with from the date of Royal Assent.

The Treasury will make regulations to be laid as soon as practicable in the autumn, once Parliament reconvenes. The FSA is considering what changes may be needed to the financial services compensation scheme to facilitate swifter settlement of mesothelioma claims in accordance with the aims of the amendments to the Bill. The FSA proposes to take forward any changes as a matter of priority.

It is of the utmost importance that all claimants affected by the Barker judgment are able to secure full compensation, including the parties to that case and the cases conjoined with it, and any whose caseshave subsequently been settled or determined onthe apportionment basis proposed by Barker. Amendment No. 7 provides for that.

This is an exceptional step, but we believe that it is justified in the exceptional circumstances that apply here. It would be unacceptable to provide assistance to future claimants but to leave a small group of claimants whose claims are unresolved or have been concluded on the basis of Barker to suffer the real disadvantages arising from that judgment. I believe that that does not raise difficulties in relation to compliance with the European Convention on Human Rights, for a number of reasons.

During debates in another place, Mr Simon Hughes said that it was his understanding that those whom the retrospective change will adversely affect have all, effectively, signed up to it. That appears to be the result of a misunderstanding. I make it absolutely clear that the Government have not approached the parties to individual cases regarding the provision. We have involved the key stakeholders in developing the new clause to ensure that it works.

First, the degree of retrospection is strictly limited and will apply only to a very short period and very few cases. We understand that, following the Barker judgment, the great majority of cases that were under way have been stayed, either pending clarification of the appropriate method of apportionment or in the light of the Government’s announced intention to introduce the amendments. So very few cases may need to be reopened.

In addition, those cases—and any that are currently unconcluded—will have been commenced prior to Barker, so the expectation of both claimants and defendants will have been that joint and several liability would apply. We are therefore not interfering with the settled expectations of the parties to any of those proceedings.

The Scottish Parliament recently passed a legislative consent Motion to enable the provisions to apply directly to Scotland. Colleagues in Northern Ireland have also signalled their wish for the provisions to apply there. Amendment No. 8 therefore ensures that these provisions will apply across the United Kingdom. Finally, to ensure that claimants receive the benefit of the provisions as soon as possible, Amendment No. 6 provides for them to come into effect, together with the provisions in Part 1, on Royal Assent, and Amendment No. 10 makes the necessary consequential changes to the Title.

I must make it clear that the amendments are just part of what the Government are doing. Together with colleagues in the Department for Work and Pensions, we are working with the Association of British Insurers, the Association of Personal Injury Lawyers and the Trades Union Congress urgently to identify ways of speeding up the settlement of these claims. The Secretary of State for Work and Pensions has already announced that he will be issuing a Written Statement in another place and in your Lordships' House about that work before the Recess. I can tell the House that it will be issued tomorrow.

Moved, That the House do agree with the Commons in their Amendment No. 1.—(Baroness Ashton of Upholland.)

moved, as an amendment to Commons Amendment No.1, Amendment No. 1A:

My Lords, I am pleased to see the noble and learned Lord, Lord Hoffmann, in his place. He delivered the lead speech in your Lordships' House in the decision in Barker v Corus and if he chose to intervene in the debate, I would be interested to hear what he had to say. He shakes his head.

It would be incorrect to say that the decision in Barker v Corus was wrong. In a sense, no decision of the Appellate Committee of your Lordships' House can be wrong; its members declare the law, and the law, as declared by them, is the law. I have read the decision in Barker v Corus—I understand and agree with the logical process by which it was arrived at, by a majority of, I think, four to one—but, nevertheless, it does not follow that because a decision is correct it should be followed unquestioningly. It is the role of the members of the Appellate Committee to declare what the law is, not what it ought to be. I agree that the decision in Barker v Corus would undoubtedly cause severe hardship to a number of people with what seem to me to be legitimate claims to compensation. Therefore, we on these Benches very much welcome the amendments. They would mean that people who get this dreadful disease will receive full compensation, except to the extent to which their own contributory negligence is a possible cause.

When I first saw what was proposed, I was seriously worried by the retrospective effect of the legislation. I was entirely happy that the Bill should apply to cases where the cause of action had not yet arisen, but I was doubtful about its application to cases still in progress or where the cause of action had arisen but action had not yet been commenced.

I agree with the noble Lord, Lord Hunt, about retrospective legislation. The problem is that a retrospective overruling by Parliament of the decisions of the courts is, in principle, a breach of the rule of law. That is particularly so where the case is a decision on rights between private individuals or companies. Observing the rule of law in this way is of special importance in a country where respect for the rule of law has persuaded many foreign businesses to use our courts to settle their legal disputes, to our great financial advantage.

I have, however, been persuaded that retrospectivity is acceptable here by the wholly exceptional circumstances of this case. First, there is the unusual nature of the disease; it is caused not by an accumulation of exposure, such as silicosis, which is contracted by miners, or lung cancer, which is caused by smoking, but may be caused by the inhalation of even a single fibre of asbestos. Secondly, another exceptional circumstance is that since the Fairchild decision, it appears that most employers and insurers have acted on the assumption that liability would be joint and several, and not several alone. Thirdly, and perhaps most important, I rely on the fact that those most seriously affected by the decision in Barker v Corus are willing to accept this as a special case. I say “accept”—they do not welcome it but are prepared to accept it. Like us, they object to retrospective legislation in principle and do not wish this case to be treated as a precedent. I also note that Corus was not consulted and has objected to the retrospective element in this legislation. We therefore support the amendments, but I would welcome recognition by the noble Baroness—she expressed it at least in part in opening the debate—that this is an entirely exceptional case and not to be taken as a precedent for the future retrospective overruling of court decisions.

My Lords, perhaps I may enter the debate as an ex-shipyard worker rather than a solicitor or someone from the legal profession. I assure the House that the Barker decision caused a great deal of concern in the area in which I live. I agreed with most of what the noble Lord, Lord Hunt of Wirral, said but, on retrospection, would he have a look at the Employment Act 1982, which his Government introduced, and see that there was a certain amount of retrospection then?

I worked in the shipbuilding industry from the time I left school at 14 until I became a Member of Parliament in 1979. During that time, the longest period of employment that I had was the five years that I served as an apprentice. In the shipbuilding industry, you were lucky if you had one employer for a month. People used to be taken on for weeks or days. So, when they get this terrible disease of asbestosis, to ask them to remember every employer that they had is impossible. I could not remember every employer that I had during my time in the shipbuilding industry.

As for the safety conditions that they worked in, there might be 100 men working in the hold and someone spraying asbestos, and the only safety provision was that the person spraying the asbestos would have a little Martindale mask, which was a bit of cotton wool with a bit of foil over it and an elastic band around the back of the head. Those were the conditions that these men worked under. I appreciate the legal jargon and I appreciate that we have got to get things right, but I welcome the Government’s amendment and I congratulate my noble friend and my honourable friend Bridget Prentice in the other place.

The decision was made quickly because of the problems of these families of shipbuilding workers. Those families do not have a great deal of money and do not have pensions. From the 35 years that I spent in the shipbuilding industry I did not have a brass farthing in pension. Pensions were introduced only after the shipyards were nationalised. These are the sort of people that we are talking about. I know that legal jargon says this and that, but these are human beings who went through life in terrible conditions and whose families have no money—so when the Barker decision was made, it caused a great deal of concern. Immediately after the Barker decision, I got a petition from people in the shipbuilding area where I live signed by 200 members of the families of people suffering from asbestos-related diseases. It is a terrible disease. In fact, if I go for an X-ray tomorrow I may have to declare an interest, bearing in mind the conditions in which I worked in the shipbuilding industry. But these men cannot afford to wait, nor can their families. I say to my noble friend that we should get this on the statute book as quickly as possible and ease some of the problems and worries that these people have.

My Lords, the underlying decision in this case by the Appellate Committee is one of great interest to me, because it resulted from digging deep into a coal board case which I had lost a considerable time ago. It is a decision remarkable for the clarity of its foundations. The more recent decision, which this set of proposals is intended to deal with, is more limited in its scope. I believe that retrospection is something that normally we would not tolerate, but it has happened from time to time. Perhaps one of the most astonishing cases in which it happened was with the Burmah litigation of some years ago, on which I happened to be instructed on behalf of the Government, who having lost before the Appellate Committee initiated legislation to overturn the decision. This retrospection appears to me entirely justified. Subject to the details mentioned by noble Lords, what has been proposed is eminently justified.

It may be reasonably clear that, when an employer has become bankrupt or disappeared, if there was an insurance policy and the insurer was still available for a suit, the rights against insurers legislation would appear to give a remedy to a family under these provisions in the same way as if the employer itself was still available and solvent.

I strongly sympathise with the sentiments expressed by the noble Lord who immediately preceded me. I had many cases relating to the shipbuilding industry when I was rather younger than I am today, and the conditions under which it operated were very difficult. I hope that legal jargon would in no way deprive those who worked in it of their undoubted rights.

My Lords, I am grateful to noble Lords who have participated in this short but important debate. As my noble friend Lord Dixon was speaking, I was aware that the noble Lord, Lord Hunt, had described this issue as attracting emotion. I think that the noble Lord will agree with me that the strength of feeling displayed by my noble friend is precisely the reason why—and I think that the noble and learned Lord, Lord Mackay of Clashfern, was alluding to this—it is so important that we have brought forward the measure in this way.

The noble Lord, Lord Goodhart, is right in saying that the Appellate Committee made the right decision. We looked at the practical consequences of that decision, and decided that they warranted us to think how we might deal with what were clearly going to be intolerable conditions for people suffering from this terrible disease. It is right, too, that the DTI joined in with the case. It wanted clarification of whether liability should be joint and several. The consequences of the case were entirely appropriate for us to bring forward this amendment to the Bill.

It is important, and the noble Lord, Lord Hunt, put it very well, that those who suffer from this disease are able to get the compensation they need as quickly as possible. I stress again that this amendment is but part of the work that will continue to be done by my department and by my right honourable friend the Secretary of State for Work and Pensions.

Retrospectivity is something we thought about extremely carefully, for all the reasons indicated by those who have spoken. This is exceptional. It is not about setting a precedent. However, as the noble and learned Lord, Lord Mackay of Clashfern, indicated, from time to time—but only very occasionally—there may be circumstances where that is appropriate. The noble and learned Lord referred to another situation where that was the case.

My Lords, I am sorry to intervene, but there is a widely held view that the Government’s action in the Burmah case was entirely unacceptable. It was different from the facts of this case, where there is a very different situation.

My Lords, I was not suggesting that they were the same. I was simply trying to indicate that from time to time in Parliament one looks at this issue. The noble Lord, Lord Hunt, asked whether I would describe this as unique, and I am reluctant to do so, because I do not know what may happen in the future. I accept, however, that the particular circumstances make this case exceptional. I do not think that any noble Lord disagrees with me on that. I was not trying to make the two things fit together, and I apologise if that was the impressionI gave.

The noble Lord, Lord Hunt, said that until we got to this point, he thought that I was behaving extraordinarily well as a Minister on this legislation. I am always sad when I disappoint. We have talked to the noble Lord’s team quite frequently over the past few weeks and shared as much as we possibly could. But the noble Lord is right: when dealing with something at great speed because it is important, we may not do as much as we could—and I clearly did not. If I failed to discuss this as fully with the noble Lord as I might have, I apologise unreservedly.

I hope, though, that what has ultimately come before your Lordships’ House will be acceptable. When discussing this with stakeholders, we have tried to deal with those who can help us ensure that it works in practice. Noble Lords may disagree and think that we should have consulted more widely. We think that we consulted as appropriate, to ensure that we had something that would work. I hope that noble Lords will be happy with what we have done.

I shall deal with the specifics of the amendments tabled by the noble Lord, Lord Hunt. I understand the point that the noble Lord is making in Amendment No. 1A. This is not a new issue. It was dealt with by the courts before Barker, as the noble Lord will know far better than I, in the case of Phillips v Syndicate 992. The court took the position that the liability for insurers was joint and several. Nothing in this legislation affects that decision or would make the courts decide it differently in the future. The difficulty with the amendment is that—we have discussed this with our own legal team—it appears to go further than the rest of the provision in beginning to codify the common law in this area, which is not needed and which I do not think the noble Lord wants. The noble Lord will be aware that it could lead to difficulties in the future if we tried to do that. We believe that we have addressed the point. We have looked very carefully at the noble Lord’s amendments, as he would expect.

My Lords, before the noble Baroness sits down, perhaps I may raise one point with her. She said that consideration was being given to how to deal with the problem of cases where there is a claimant but no possible defendant. Is there any possibility of dealing with it without further primary legislation? It is difficult to see how that could be done.

My Lords, I do not know. It may be a matter for my right honourable friend at the Department for Work and Pensions to look at. I do not know at this stage what can be done. However, we are aware of the issue, and I will keep the noble Lord in touch with any considerations we give to it.

My Lords, this has been a very important debate. I very much welcome the comments made by the Minister, and I will reflect on them. I thank the noble Lord, Lord Goodhart, for raising a number of important points and seeking clarification on a range of issues. I also thank my noble and learned friend Lord Mackay of Clashfern for pointing out some important historical context.

The outstanding contribution was that of the noble Lord, Lord Dixon, who expressed all the emotion that I feel about these cases. I have the honour to be the president of the All-Party Group, and I have therefore heard about some tragic cases. I share with him not only a concern about those who are fortunate enough to have a cause of action and a defendant to sue, but a much more worrying concern about the hundreds of people who are dying every year but have no claim at all. They include people who served in the conditions that the noble Lord has outlined.

That is why I really hope the Minister will be able to encourage her ministerial colleagues to adopt a more comprehensive solution—a solution which will involve the Government. As I understand it, the Government are involved as a defendant in over half the cases we are talking about, and every year brings the death of more of those involved in the cases. Although I do not know the exact statistics, the Government have not only an interest in these cases but are under a very strong obligation to find some sort of scheme to ensure that those diagnosed with this terrible disease immediately receive some form of benefit or compensation. I commend the work carried out—indeed, instigated—by a number of leading insurers and by the Association of British Insurersin trying to find a way through. However, the Government must lead in finding the way through. I hope that the Minister and her ministerial colleagues will come forward with some form of comprehensive scheme that covers the wide range of people diagnosed with this appalling disease.

I am therefore saying to the noble Lord, Lord Dixon, that I hope his outpouring of emotion—understandable by everyone who heard it—will result in some consideration for all those who do not have a cause of action which they can utilise to find some benefit in the last few years of their lives, and also in some reassurance that, once they have gone, their families will be protected in some way. I hope that we will concentrate on that over the coming months.

I thank the noble Lord, Lord Dixon—with whom I had the privilege of working closely in the other place, given that we were Deputy Chief Whips of our respective parties. For those who do not understand the position of Deputy Chief Whip, I should say that we ensure that the wheels go round and are properly oiled. I have had the highest respect for him and his integrity throughout the time I have known him. I am so grateful to him for contributing to this debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Motion agreed to.

2: Clause 3, page 2, line 38, at end insert-

“(5) The Secretary of State may by order provide that a claim for a specified benefit shall be treated as a claim for the purposes of this Part.

(6) The Secretary of State may specify a benefit under subsection (5) only if it appears to him to be a United Kingdom social security benefit designed to provide compensation for industrial injury.”

3: Clause 14, page 8, line 44, at end insert-

“(3A) An order under section 3(5) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.”

4: Page 9, line 8, at end insert-

“(5A) The first order made under section 5 may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(5B) An order under section 5 which has the effect of removing or restricting an exemption from section 3(1) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.”

5: Page 9, line 9, leave out “An” and insert “Any other”

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 to 5.

The other place supported government amendments that explicitly provide the statutory power for the Secretary of State to bring claims management services provided in relation to industrial injuries disablement benefits within the regulatory net. Amendment No. 2 provides for this, and Amendment No. 3 provides for the order to be made by affirmative resolution.

Citizens Advice and his honour Judge Michael Harris, president of the Social Security and Child Support Appeals Tribunal, have raised specific concerns about claims management activities in claims for industrial injuries disablement benefitsand some other welfare benefits. Commercial intermediaries here typically charge a flat fee for this service or take a percentage of the benefit payment if the claim is successful.

Our legal advisers considered further the definition in Clause 3, and despite its breadth, there is sufficient doubt whether claims management services in those types of claims would be covered to justify bringing forward these amendments. The amendment is precisely targeted on industrial injuries disablement benefits, which are benefits of a compensatory nature. It does not extend to welfare benefits more generally, which would be beyond the scope of the Bill.

The Government accepted an amendment tabled in the other place by Mr Simon Hughes that changes the order-making power in Clause 5 to affirmative. Amendments Nos. 4 and 5 will require the initial exemption order and any subsequent restriction or removal of exemption to be debated in your Lordships’ House and another place. We hope to capture almost everyone in the first order. But we are working with an unusually broad definition here, so a small number of organisations may well emerge that fall within the definition but which it is not appropriate to regulate. Subsequent orders are therefore likely to be used to tidy up anomalies.

Moved, That the House do agree with the Commons in their Amendments Nos. 2 to 5.—(Baroness Ashton of Upholland.)

My Lords, I welcome this group of amendments, which give us an opportunity to reflect for a moment on where, apart from the debate we have just had, we are with the rest of the Bill. The Bill started out as a short and comparatively straightforward piece of legislation but has had an unusually complicated passage through this House and another place. However, I am pleased that Clause 1 has survived more or less intact. Part of me still wishes to give the clause only two cheers rather than all three, but it is generally to the good and its drafting has been somewhat improved. I welcome that.

As the originator of Clause 2, it is natural that I should allow myself to revel at least momentarily in its survival. It is highly consonant with the original intention of the Bill. I hope that it will serve to correct distorted perceptions, restore a modicum of much-needed civility to society, and, above all, give a strong impetus to the process of rehabilitation.

However, the second half of the Bill, to which the Minister referred, dealing with claims farmers, has always received a warm welcome on all sides of this House, and rightly so. Much of the important work in that area continues as the regulations and the trade union code of practice are scrutinised, and I hope to play my part in that process. I understand from the Minister that this might be a good opportunity for her to update the House on progress made towards getting the new regulatory system up and running. I therefore look forward to hearing from her about the latest steps.

I have always given this Bill a broad welcome and, despite the various changes made to it, I still do. I hope that it will serve to restore some civility, decency and—yes—some justice to this country of ours.

My Lords, I am entirely happy with these further amendments and I am very pleased indeed that they resulted from the Government accepting an amendment proposed by my honourable friend Simon Hughes. The fact that there are very few Commons amendments, other than those relating to mesothelioma, indicates that the Minister and her team of civil servants did a very successful job in greatly improving the Bill earlier when it was in your Lordships’ House. I congratulate her on that.

My Lords, I am very grateful for those comments. I shall take a moment to inform noble Lords about what we have been doing; the question of the noble Lord, Lord Hunt, gives me an opportunity to do so. Noble Lords who participated in the passage of this Bill were keen to see us get on with it and I made commitments about timing.

We will come back to Parliament in the autumn to debate secondary legislation that will underpin the new regime. We have made good progress and have recently launched a formal consultation on the draft secondary legislation and conduct rules, which will include regional consultation workshops with claims intermediaries in Newcastle, Manchester and London. These set out in detail matters such as the authorisation criteria, the complaints handling requirements, indemnity insurance and situations in which it would be appropriate to cancel or suspend authorisation. In the next few weeks we are going to launch the remaining consultations on the exemption order, authorisation fee levels and the application form.

I informed noble Lords at Report that we expect the regulation to be integrated into the regulatory structure to be provided for by the Legal Services Bill. I also set out an interim solution for dealing with regulation. An announcement was made in the other place that in the interim the Secretary of State, my noble and learned friend the Lord Chancellor, will regulate, supported by existing officials, together with appropriate senior expertise, skills and experience that are brought in from outside the Civil Service.

I have referred before to the likelihood of a senior individual being recruited to help guide the successful implementation of the new regime. I am pleased to confirm today that, subject to finalising terms, Mark Boleat will be taking on this important role formally from the beginning of September.

A key part of the proposed mechanism will be an external monitoring and compliance unit, whichwill help to process applications for authorisation, maintain a register of authorised persons, monitor compliance with the rules, monitor advertising and marketing activity, identify persons who are evading authorisation and advise the DCA on disciplinary matters and formal regulatory decisions. This will be supplied under contract by a single trading standards team operating across England and Wales, making full use of the networks already in place. The DCA retains full authority and responsibility for regulation but working with the right trading standards operation should help to ensure the early delivery of benefits to consumers.

I have already visited Birmingham and the City of London trading standards units to learn more of the work they currently do. We have just concluded an expression of interest exercise and will be inviting shortlisted departments to prepare detailed proposals. I expect the unit to be operational by October.

We are also establishing a non-statutory regulatory consultancy group made up of representatives of the financial services and insurance industries, the legal profession, consumer groups and the claims management sector. It will help ensure that we continue to engage fully with all those who have an expert interest in making a positive difference in the claims sector. The group’s first meeting will be next week.

The timetable for regulation we are working tois as follows. The regulatory mechanisms will be established in October 2006; applications will be invited from November 2006; the deadline for applications is February 2007; the tribunal is to be established in February 2007; and offences and remaining provisions will go live in April 2007.

In earlier debates I stressed the speed with which we have brought forward measures to regulate the claims management sector. I hope that noble Lords are reassured by that brief but, I hope, detailed résumé of the amount of work that has been going on since the Bill left your Lordships’ House; it will continue through the summer months. I hope that I have given some comfort to those who are concerned that we need to be seen to get on with it.

On Question, Motion agreed to.

6: Clause 15, page 9, line 16, leave out “section 1” and insert “sections 1, 2 and (Mesothelioma: damages)”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 6.

Moved accordingly, and, on Question, Motion agreed to.

7: Page 9, line 22, at end insert-

“(3) Section (Mesothelioma: damages) shall be treated as having always had effect.

(4) But the section shall have no effect in relation to-

(a) a claim which is settled before 3rd May 2006 (whether or not legal proceedings in relation to the claim have been instituted), or

(b) legal proceedings which are determined before that date.

(5) Where a claim is settled on or after that date and before the date on which this Act is passed, a party to the settlement may apply to a relevant court to have the settlement varied; and-

(a) a court is a relevant court for that purpose if it had, or would have had, jurisdiction to determine the claim by way of legal proceedings,

(b) an application shall be brought as an application in, or by way of, proceedings on the claim, and

(c) a court to which an application is made shall vary the settlement to such extent (if any) as appears appropriate to reflect the effect of section (Mesothelioma: damages).

(6) Where legal proceedings are determined on or after that date and before the date on which this Act is passed, a partyto the proceedings may apply to the court to vary the determination; and-

(a) “the court” means the court which determined the proceedings,

(b) the application shall be treated as an application in the proceedings, and

(c) the court shall vary the determination to such extent (if any) as appears appropriate to reflect the effect of section (Mesothelioma: damages).”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7.

Moved, That the House do agree with the Commons in their Amendment No. 7.—(Baroness Ashton of Upholland.)

[Amendments Nos. 7A to 7C not moved.]

On Question, Motion agreed to.

8: Clause 16, page 9, line 24, at end insert-

“(2) But section (Mesothelioma: damages) (and section 15(3) to (6)) shall extend to-

(a) England and Wales,

(b) Scotland, and

(c) Northern Ireland.”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 8, to which I spoke with Amendment No. 1.

Moved accordingly, and, on Question, Motion agreed to.

9: Clause 17, page 9, line 27, leave out subsection (2)

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 9. This is the privilege amendment.

Moved accordingly, and, on Question, Motion agreed to.

10: In the Title, line 2, after “duty;”, insert “to make provision about damages for mesothelioma;”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10, to which I spoke with Amendment No. 1.

Moved accordingly, and, on Question, Motion agreed to.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (The Countess of Mar) in the Chair.]

moved Amendment No. 47A:

Before Clause 4, insert the following new clause-

“EXEMPTION OF ECONOMIC REGULATORS

An order under this Part may not abolish or modify the regulatory functions conferred on, or exercisable by, any of the following-

(a) the Gas and Electricity Markets Authority;

(b) the Office of Communications;

(c) the Office of Rail Regulation;

(d) the Postal Services Commission;

(e) the Water Services Regulation Authority.”

The noble Baroness said: This amendment deals with a significant aspect of Part 1 of the Bill—the protection of the principal economic regulators. As I hope I made abundantly clear at Second Reading, the principal economic regulators have very significant powers over the essentials of our daily life and the operation of the economy. They deal with water, energy, communications and transport. These are networks and supplies that must be maintained and operated on sound and sustainable economic and public interest criteria. It is for that reason and the overwhelming need for private investment to be maintained and encouraged in these essential industries that Parliament has made the principal economic regulators independent of political control, with clear, objective, statutory duties that do not wave in the political wind. It is also why Parliament has given them jurisdiction to establish the demands on the systems that they regulate to determine the condition, capacity and capability of the networks in question and then to set prices that customers must pay. Those two things—independence and jurisdiction—are essential if we are to ensure that private investors will have sufficient confidence in the regulatory system to provide the working and investment capital that these industries will always need on fair and affordable terms.

As I said on Second Reading, this is no idle or academic point. I referred at some length to the Government’s behaviour towards the Rail Regulator over the winding up of Railtrack. The Rail Regulator at the time has since explained that it was the rigour and timescales of the legislative process that protected his jurisdiction and independence and caused the Government to back off, with their unconstitutional threat of legislation.

The Government admitted that they could not have got the neutralising Bill through in time; they might not have got it through at all. That is why the present chairman of the Office of Rail Regulation has written to the Chancellor of the Duchy of Lancaster protesting at the scope of Part 1 of the Bill. He has warned of the very same real hazards of which the former rail regulator warned: the jeopardy to private investor confidence which is created by a power of a Minister to interfere with the independence or jurisdiction of the principal economic regulators.

The Minister may say tonight, “Of course, the principal economic regulators must be independent. The Government have always accepted that it is important and we would never touch them”. He may say that but as the Committee knows that has not been the reality of hard experience as I have shown now and at Second Reading. Even if we accept that the Government are committed to the independence of the principal economic regulators, we must protect them from any possibility of the Bill being used against them.

I have taken the wording for this amendment from the Government’s own drafting in Part 2. There the Government have seen fit to exclude the economic regulators from the principles of good regulation. Why they should do so is perhaps strange. I hope we shall debate this more fully when we come to that part. There does not seem to be much harm in getting the regulators adhering to the principles in Clause 23(2), but I am open to any explanation from the Minister as to why they are so exempt. My colleagues in another place pursued this point and did not receive a satisfactory answer. Leaving Part 2 to one side for the time being, I ask: why are the economic regulators not exempt from Part 1? I can think only that the Government deliberately want to keep the economic regulators within their grasp and we on these Benches believe that that is quite wrong. I beg to move.

I wish to speak to Amendment No. 47B in the same group. When I chaired the Constitution Committee of your Lordships’ House, the committee looked at the role of the independent regulators appointed by statute. In particular, we looked at the relationship between accountability and independence. Regulators have to be independent to do their jobs and that requires Ministers giving up some freedoms to protect the decision making of regulators. At the same time, regulators have a duty to explain, to be exposed to scrutiny and to be subject to the full rigours of the possibility of legal challenge. They have to fulfil their statutory duties.

The independence of regulators, as my noble friend has already said, is crucial. It is important that independence is seen to exist. Perhaps I may quote from paragraph 121 of the committee’s report:

“Our evidence suggests once again the broad range of support that underpins a regulatory framework that separates ministerial roles and responsibilities from those of independent regulators, and that this fact should be well communicated on a regular basis by Government. Water UK, for example, told us that ‘For Ministers and regulators frequently to reassert the independence of the regulator on economic decisions is helpful; and, after all, we had a survey of investors recently and 96 per cent of them said that they regarded the independence of the regulator as being very important, so just a frequent reassertion of it would be helpful’”.

It was also clear from our evidence that, on the whole, Ministers welcomed and supported that independence. They saw that the independence of regulators is a vital ingredient in maintaining consistency, for ensuring that regulatory decisions are taken by competent authorities—which, as we noted, accords well with current and prospective developments in the European Union—and for promoting confidence about regulation among those investing in regulated industries, as well as customers on whose behalf it is carried out. It is also extremely important for promoting confidence among those bodies that are regulated.

In evidence to the committee, the Department of Trade and Industry said that,

“the independence of economic regulators from Government—insulating decisions from short term political factors—is a fundamental contributor to regulatory certainty and prerequisite for continuing to attract private finance to regulated sectors”.

The independence of economic regulators is thus recognised as crucial and as the report stressed, it is not at the expense of accountability. On the whole, we found that Ministers recognised and welcomed that independence.

I support both these amendments. The economic regulators clearly fulfil a very important role in our society today, especially the five economic regulators that are identified in the amendment tabled by the noble Baroness, to which the noble Lord, Lord Norton of Louth, has added a sixth. They also have great power. If they are to do their job properly it seems to me that they must be free of all government interference. They must not be lent on to reach any particular decision in any particular case. Their independence must be plain for all to see. I suspect that is agreed on all sides of the Committee.

When we were considering the Constitutional Reform Act, we wrote into Clause 1 that all Ministers must uphold the independence of the judiciary. Those were the very words that we put into Clause 1. Obviously, regulators are not judges in the ordinary sense, but they fulfil a quasi-judicial role. For that reason they must not only be independent, which I am sure they are, but they must also be seen to be independent, to use that well worn cliché. That is why, of the two amendments before the Committee, I prefer that of the noble Lord, Lord Norton of Louth, because the clause heading in his amendment refers specifically to “Independence of economic regulators”. I would go rather further than the noble Lord and I would spell out in clearer language in the body of the clause itself what it is we want. We should say in simple terms that an order under Part 1 of the Bill shall neither restrict the jurisdiction nor undermine the independence of the economic regulators. That is quite simple and short. It would do the job and I would leave it at that.

The amendment of the noble Baroness does not go far enough, because it does not refer in any way to the independence of the regulators. That of the noble Lord, Lord Norton of Louth, is better, and does at least refer to independence, but I would sooner see it in the body of the clause rather than in the clause heading.

I share the view of the noble and learned Lord, Lord Lloyd of Berwick, that, of the two amendments, the amendment of the noble Lord, Lord Norton of Louth, is to be preferred. The amendment is in his name and that of my noble friend Lord Berkeley, who is unfortunately not able to be in his place today.

Several of the agencies listed in the amendments were created when former publicly owned industries were privatised. Because an element of monopoly was created, a regulator was needed to control monopoly abuse with a measure of price control. That was the case with gas, electricity, the railways and water. Of course, I entirely agree with what each of the three speakers so far has emphasised. The word “independence” is absolutely vital: independence from the industry and ministerial control, except the minimum necessary to establish one’s financial needs to the Treasury each year; but otherwise independent of the Government.

It may be that, at some stage during the lifetime of one of these agencies, competition in the industry develops to such an extent that regulation is either no longer needed—that might sound rather extreme—or, at any rate, need not be so stringent. Therefore, the regulations imposed by or upon the agency may need to be changed. Both of the amendments are somewhat extreme, in that no detail of any kind could be altered except by statute when a regulatory reform order would surely be quite useful in dealing with the detail. The speeches of the noble Baroness and the noble Lord, Lord Norton of Louth, were not attacking detail but were concerned with independence and interfering with the principles and basic functions of the agencies.

Ofcom is referred to. Some of us were here during the lengthy debates on the Communications Bill, which became the 2003 Act. It involved a massive merger of a number of separate agencies dealing with television and radio, the Broadcasting Standards Commission and so on. It is a huge piece of legislation and regulation. The legislation imposed rules on Ofcom. Of course, as the years have gone by, Ofcom itself has imposed regulation on those subject to its jurisdiction. It occurs to me that after two or three years, let alone 10 years or so, there may also be a need to deal with the detail of regulation in a way which does not necessarily have to involve full-scale primary legislation.

Indeed, either Ofcom or the other regulators mentioned in these amendments may be desired by the agency itself in order to perform its tasks better. To seek an order under the Act would surely be sensible. We have not yet debated the various preconditions, safeguards, consultation and so on. I will not go into that, because we will be debating it at length in due course. I ask those of your Lordships who are inclined to favour a detailed amendment like either of the amendments before us to bear in mind that there are lots of safeguards with regard to any order made under the Bill.

I favour Amendment No. 47B because it is more cautious and gentle than that of the noble Baroness. I could not help notice, having previously had a connection with the Office of Fair Trading, that it has been added in, whereas it was not in the original one. It reminds me of a point on which I can support the noble Lord. Not long ago, the Hampton report proposed that quite a fundamental part of the Office of Fair Trading’s work—consumer affairs and protection—should be hived off and handed, together with local authority trading standards matters, to a new agency called the consumer and trading standards agency.

That idea was shot down by the Treasury, much to the relief of those presently in charge of the Office of Fair Trading, who have been able to retain their consumer affairs jurisdiction. I support what the noble Lord, Lord Norton, was saying on this matter. If something substantial was proposed in terms of the remit given by statute to any of these agencies, then it ought to be attempted not by way of a regulatory reform order but by something else.

I hope that the Minister will say a word or two about another part of the amendment of the noble Lord, Lord Norton, dealing with freedom and independence from having the “wishes” of the Minister imposed on a regulator. Do the Government feel that that has any effect on something quite common in legislation, that agencies should be subject to a ministerial direction—the technical term—in certain circumstances? The noble Lord is probably trying to get at ministerial directions which inhibit the independence of these agencies. I feel a measure of support for him on that.

My words shall follow closely and appropriately from what the noble Lord, Lord Borrie, has said. He singled out the word “wishes”. I give a case in point.

What is popularly known as Ofgem is rightly referred to here as the Office of Gas and Electricity Markets. When electricity prices went down to the point where a number of generators were going bust—including, of course, British Energy—I raised with the then chairman of Ofgem, Callum—laterSir Callum—McCarthy whether he was paying enough attention to an amendment in the Utilities Act 2000, which I proposed in this House and was carried with a majority of two, to impose on that body an obligation to have regard to the long-term stability of the industry. I asked him how he could justify what he was doing, forcing the prices down to the point where firms were going bust and not paying attention to what was in that Act. I have quoted his answer in the House before, and he has never denied it. It was at a semi-public occasion at the Institute of Economic Affairs. He said, “I recognised that Ministers did not want that clause, and I have therefore not paid too much attention to it”. I regarded that as a shocking thing for a regulator to say. But it illustrates the point of my noble friends and the noble Lord, Lord Borrie, that there is always a temptation, either on the part of Ministers to let it be known what their wishes are, or on the part of regulators who try to divine what the Minister’s wishes might be. I yield to no one in my determination that regulators should be wholly independent of both influences.

The relevance of the Bill is that Ministers should not be able to influence the regulator by the order-making procedure under the Bill. In case the Minister is going to argue that this fear is unreal because nobody would do that, I quote the example of Sir Callum McCarthy. Of course, the Government opposed the clause. The noble Lord, Lord McIntosh of Haringey, argued fiercely against it, but he lost the argument in the House, and it is in the Act. It is very important that we should take whatever steps we can in this Bill to strengthen and reinforce the independence of regulators.

Subsection (1) of the new clause to be inserted by Amendment No. 47B states:

“An order under this Part may not diminish”.

I remember that, during the passage of the Financial Services and Markets Bill, the posts of chairman and chief executive officer were combined in one person. A small order may need to be placed by a Minister to separate the two roles. That would not be an attackon the independence of the regulator, but the amendment might prevent even such a simple thing. Unlike the noble Lords opposite, I believe that the Bill will do only very small things; it is designed to make the passing of simple orders easier, because it is currently difficult. This amendment would make the passing of a simple transfer order impossible. There would be no regulatory reform ever.

I can help the noble Lord on that issue. On the first day in Committee, we got an admission from the noble Lord, Lord Bassam, that the Bill is to do with primary legislation only and has nothing to do with secondary legislation. I suspect that the noble Lord, Lord Desai, is talking about matters arising out of secondary legislation that primary legislation already gives the Minister power to change. It has to be emphasised that we are talking about amending primary legislation only.

My view is that we should be extremely careful, because Ministers can never be trusted. Even my noble friend Lord Jenkin, who was an excellent Minister, should not have been trusted on principle. That is what Parliament is for: not to trust Ministers. When the noble Lord, Lord Bassam, replies, I am sure that he will say that this amendment is not necessary because the Government will not use the power. If it is not necessary and he is not going use it, he can accept the amendment. We do not trust him. Well, let us assume for the sake of argument that we make an exception and trust him of all the Ministers who have ever served the Crown. None the less, we do not trust anybody else. He cannot give that commitment. Either the power is necessary and will be used—in which case, the Minister should tell us when—or it is not necessary and the Government do not want to use it, and therefore they should not have it.

I had not intended to intervene, but I wish to raise the subject of investor confidence. These days, investors have no confidence in Ministers. Noble Lords will recall that 40 per cent of essential services—public utilities—are German owned and25 per cent French owned. International investors, who may not understand the complexities of British political and economic life, rely on stability and the independence of the regulators.

I return to the bizarre and disgraceful incident of Railtrack. Investors had confidence in it until the Government decided that they would step in. Overnight, the rating of the United Kingdom in the international bond market went from AAA to zilch. That was because the bond market, which is critical to long-term investment in public utilities, wants stability. As noble Lords will recall, the bond market plays an important role in financing most acquisitions or investment in public utilities. We are talking of 25-year money at fixed rates placed with institutions—pension funds and others. Such institutions are not thinking of a five-year change of Government; they are thinking about long-term, secure investment. To some extent, they are institutions acting on behalf of institutions, and they require stability and the knowledge that the regulator not only is independent but is perceived to be independent. Thus, if we do not pass an amendment such as this—and I do not wish to go into the technicalities of one or the other—and if the response of the Minister in this debate is not trustworthy and confidence-giving, there will be a little rattling in the bond market. We are not necessarily talking about equity investors; we are talking about the long-term market, which is very sensitive to security and stability.

We on these Benches have not yet committed ourselves to support these amendments. However, I found the arguments in support of them, particularly Amendment No. 47B, extremely persuasive. The Minister will have to be very persuasive indeed to persuade me that these Benches should not support Amendment No. 47B or an equivalent amendment at a future stage of the Bill.

In responding to Amendment No. 47A, I shall speak also to Amendment No. 47B, although I recognise that their thrusts are slightly different. I thank noble Lords who have participated in this discussion.

I must say at the outset that I am unable to accept either of the amendments, for reasons that I hope will convince all noble Lords. I am a bit surprised that the noble Baroness, Lady Wilcox, moved Amendment No. 47A, because it appears to be in conflict with her party’s policy intentions in another place. During the Standing Committee debate on 9 March, the Conservative opposition spokesperson on the Bill in the other place, the member for North East Hertfordshire, Mr Oliver Heald, said:

“It would be wrong to let off the ‘Ofs’”—

which he had previously described as,

“Ofgas, Ofwat and the rest of them”.

He went on to say:

“We need to have a system where the main regulators in this country set the standard, trailblazing for good principles of the sort set out in clause 19—transparency, accountability, proportionate behaviour, consistency—and targeting their actions. They should not be the ones who lag behind”.

Clause 19 is now Clause 23. I recognise that the opposition Front Bench in another place raised this during a clause stand part debate on Part 2, but I think that the policy intentions of the Opposition in another place are clear. I repeat that Mr Heald said that the “Ofs”,

“should not be the ones who lag behind”.—[Official Report, Commons Standing Committee A, 9/3/06; col. 271.].

The Government wholeheartedly agree that the economic regulators should not be the ones who lag behind in the context of the better regulation agenda.

It is true that the economic regulators are excluded from the provisions in Part 2. Noble Lords may findit useful if I restate the specific reasons forthis exclusion. Part 2 implements certain recommendations in Philip Hampton’s report Reducing administrative burdens: effective inspection and enforcement. That report made recommendations for reducing administrative burdens by promoting more efficient approaches to regulatory inspection and enforcement without compromising regulatory standards and outcomes. Economic regulators were excluded from the scope of the Hampton report because they had been the subject of a series of recent studies and because they concentrate on economic solutions to market failures rather than inspection and enforcement by regulators, which is the main focus of Part 2. The provisions in Clause 1 and, for that matter, in Clause 2 are wider in purpose and do not relate only to inspection and enforcement.

The Government believe that businesses must have the right to raise concerns if economic regulators are carrying out their functions in ways that are, for instance, overly bureaucratic, or if they are not exercising their functions in line with the five principles of good regulation. If there are sound reasons for suggesting any modifications of their statutory functions for the purposes of removing or reducing burdens, or for modifying the way in which those functions are carried out, it should be possible to address these by order as it would be possible for any other regulator.

Regulators, including the economic regulators, operate within not a stagnant but an ever-evolving and diverse environment. They need to be flexible and responsive to the challenges presented by the markets in which they operate. They must not be,

“the ones who lag behind”.

In fact, they must be the ones who are ahead of the game. In some cases this might require a modification of one or more of their regulatory functions. If noble Lords would care to go to the websites of some of the regulators and look at what is in their corporate plans and at the range of changing circumstances that the regulators recognise they face in the coming years, they will, I hope, understand the thrust of that point.

This amendment would take away from economic regulators a legislative vehicle that would enable such a valuable modification, even if it were required and requested by the regulator. Indeed, a recent article in the Observer said that, by definition, a regulatory body is bureaucratic, so the question is whether it could be less so. In principle, it should be possible, where appropriate, for Government and Parliament, in consultation with the regulators, to agree any sensible modification of their functions in the same way as they could for any other regulator. That is what Clause 1 would permit.

It is worth noting that, although this amendment is said to apply to Clause 2 as well as to Clause 1, it would not be possible under Clause 2 to modifyor abolish a regulatory function. Indeed, the Government have tabled Amendment No. 38 to make that even clearer. Clause 2 can be used to modify the way in which a regulator’s functions are exercised, but the functions themselves would have to stay intact and could not be abolished. That being the case, I will concentrate on the effect of this amendment on what provision can be made under Clause 1.

The Government simply do not accept that not excluding the economic regulators from Part 1 will lead to market uncertainty. Including them in Part 1 will not lead to any heightened sense of insecurity for the market. Clause 1 provides an order-making power for the purpose of removing or reducing burdens. This power will be used only where appropriate, after full consultation and where proposals meet the relevant preconditions—for example, that orders are proportionate to the policy objectives behind them and fairly balance the public interest against the interests of any person adversely affected by them.

To paraphrase the Member for North East Hertfordshire during the Standing Committee debate on 9 March, to exclude the economic regulators from Part 1 of the Bill would be potentially to “let off” the big boys—the big regulators that have been set up by statute. Often they are the ones that people are most worried about. Would the noble Baroness, Lady Wilcox, be happy that, even if a specific and worthwhile proposal for reform of a regulatory function had been identified, the regulator could just go on acting in an excessive way and the powers that we are debating today could not be taken advantage of?

I stress that the Government have no current intention of abolishing or even merging any of the economic regulators. The Government believe that those regulators are successful in carrying out their functions. Let us think specifically about a hypothetical order that would modify or abolish the functions of an economic regulator. If there was any doubt about whether such an order might undermine market security, or, in the language of the Bill, that it might create new obstacles to productivity, including innovation and competition, or impose new obstacles to the efficient working of the regulator in carrying out its functions, it would be unlikely that that order was for the purpose of removing or reducing burdens such as obstacles to productivity or efficiency.

Further, the preconditions in Clause 4 mean that, if a proposal to modify or abolish some of the functions of an economic regulator would be likely to remove necessary protections or fail to satisfy one of the other preconditions, surely the Minister would reasonably consider that the preconditions were not met and therefore that the order could not be made.

However, let us assume that this hypothetical and unreasonable Minister seeks to consult on his proposal. He would be under a statutory obligation to consult those affected by the proposal. He must therefore consult the body whose functions he is seeking to abolish or modify. The economic regulator would surely respond with evidence of where market security was at risk, and other consultees would be likely to agree. In these circumstances, the Government’s undertakings not to pursue highly controversial proposals by order and not to undermine the independence of regulators would come into play, and the Minister would reconsider the wisdom of pursuing his proposal by order.

I am very grateful to the noble Lord. The point that he made earlier was that this amendment would prevent an order being put through even where the regulator wanted it. Surely that difficulty could be met easily enough by inserting the words “without the consent of the regulator” in the proposed amendment.

We are dealing with the amendments that are before us and not with amendments to those amendments. It is important that we deal with the Bill as it is currently drafted.

Let us assume that the order has been made. In this circumstance, if the fears about market security prove justified, those whose economic interests were adversely affected would be able to seek a judicial review of the order, and it would be within a court’s powers, if it deemed the Minister’s opinion irrational, to strike the order down.

So while an order could amend or abolish the functions of an economic regulator, this would clearly be possible only where the evidence, including economic arguments and cost benefit analysis, clearly demonstrated that the removal or modification of those functions was for the purpose of removing or reducing burdens, where the important preconditions in Clause 4 were satisfied and where the order did not breach the Government’s undertaking to preserve the independence of regulators.

What would the effect on confidence be while all this was going on?

The situation would be the same as it is under the 2001 Act. I will come on to the independence of regulators and the role of Parliament. I do not think that the way in which the 2001 Act has operated has given rise to any difficulties in this regard.

In reality, any proposals that relate to economic regulators are likely to be more straightforward. I am thinking, for example, of the consultation already under way for an RRO under the 2001 Act powers—from which, of course, there is no exclusion for the economic regulators—to change the Financial Services and Markets Act 2000. That Act sets out the functions and duties of the Financial Services Authority, which, as Members of the Committee will know, operates within a highly sensitive market. The proposed RRO would provide for better-targeted FSA regulation that is more risk based, and includes proposals to remove unnecessary or disproportionate consultation burdens placed by the FSA on industry. Surely that is exactly what we should be trying to achieve by such a measure. The order will also enable the FSA to deregulate more freely by issuing waivers and modifications to rules in a wider range of circumstances.

In this context it is worth mentioning that the safeguards described above have worked well under the 2001 Act. I understand that the mere existence of the order-making power in that Act, from which the economic regulators are not excluded, has not led to any uncertainty within the markets in which those regulators operate—nor should it. This Bill contains stringent safeguards and is more focused on the delivery of better outcomes than was the 2001 Act, so it should provide an increased level of certainty for the listed economic regulators.

The amendment is an unnecessary restriction which would mean that the listed regulators themselves—including the Office of Fair Trading, which is listed in Amendment No. 47B but not Amendment No. 47A—would not be able to propose by order amendments to their functions even where that might be beneficial to enable more efficient delivery of their objectives.

To look at one of the differences between Amendment No. 47A and Amendment No. 47B, Amendment No. 47A deals with orders that we cannot “abolish or modify”. Modifying them by adding to them would not be permitted under the amendment. Whatever else one thinks of that amendment, it is difficult to see why any regulator would want that provision in the statute. Amendment No. 47B bears close relation to Amendment No. 47A but is more specific, in that it deals with not only changes to the functions of the economic regulators but the independence from Ministers of directors and members of the regulators and how such directors and members can be removed from office. Subsection (3) in Amendment No. 47B concerns a removal from office of the director and other members of a regulator. The Committee will be aware that the chairman and members of those regulators are, in accordance with the statute setting them up, all appointed by the Secretary of State. In some cases, the statute specifies that the terms of appointment shall be determined by the Secretary of State.

The Committee may also be aware that the Secretary of State already has the statutory right to remove a chairman or other member on grounds such as misconduct or incompetence. I am therefore unclear what additional protections the amendment is intended to achieve. If it is about the Government misusing the powers in the Bill—for example, if they seek to remove a hypothetical director-general of an economic regulator as swiftly as possible—making an order under the Bill is not the way to do that, as the Committee will know. There are stringent safeguards in place and rigorous scrutiny for all orders that a Minister proposes.

The point has been made that orders must havethe consent of the economic regulators. They would be consulted and their views expressed in the Explanatory Memorandum. The Bill is about regulators operating efficiently, but also about the regulated not being subject to unnecessary burdens. We need the flexibility to consider all views and Parliament would then determine where the balance lies. The regulator’s view will not necessarily be the only or predominant one. That seems to me to be absolutely right.

On the issue of primary and secondary legislation raised by the noble Earl, Lord Onslow, just to be clear, orders can be used to amend or repeal primary and secondary legislation. Our point is that a Minister is unlikely to use an order under the Bill only to amend secondary legislation, as departments already have power to amend or repeal such legislation. On the issue of the wishes of Ministers, I should like to understand how noble Lords can explain how imposing an obligation to comply with the wishes of the Crown could remove or reduce burdens under the clause or to promote the five regulatory principles under Clause 2. I do not see how that can happen. On independence from the wishes of the Minister, there are stringent safeguards in place to prevent an abuse of ministerial power.

Given the potential better regulation benefits for the economic regulators, the stringent safeguards in Part 1, and the fact that the 2001 Act has not led to an environment of uncertainty in the markets in which these regulators operate, I urge the noble Baroness, Lady Wilcox, to withdraw her amendment.

I fear that I find the Minister's answer unsatisfactory. I shall read it carefully. I tabled my amendment with the lightest touch. This debate has been extremely useful because it has confirmed to me that there is something sinister lurking behind the surface of the Bill. I tabled it as a probing amendment only; the Minister knows that.

Can the noble Baroness tell me specifically what it is that she thinks is sinister lurking behind the Bill?

The present chairman of the Office of Rail Regulation wrote to the Chancellor of the Duchy of Lancaster protesting about the scope of Part 1. He has warned of exactly the same hazards of which the former Rail Regulator warned—the jeopardy to private investor confidence created by the power of a Minister to interfere with the independence or jurisdiction of the principal economic regulators. I have not heard anything from the Minister that has changed my opinion that he is likely to be able to do that again. He may say that there is no intention to do so, but words cannot bind a future Government. If that is what he is telling me that the Bill will do, I cannot see that that is the case.

Can the noble Baroness identify any circumstances under the operation of the 2001 Act that have given rise to market uncertainty?

Perhaps I may help my noble friend. It is very simple. We do not trust Ministers. If you are me, you do not trust any Minister, however good, jolly, smiling and sweet they look at the moment. Governments cannot be trusted and if you give them more power—this point is so basic—they will use it. If you give children a toy, they will play with it. It is as simple as that. That is what some of us on this side of the House are getting upset about. It is not about the minutiae; it is not the disgraceful behaviour of the regulator to which my noble friend Lord Jenkin referred; it is the fact that we do not trust Governments.

Does the noble Earl accept that under the Bill, it is not just the whim of a Minister that would carry these things forward; a very extensive process, which I have outlined, must be gone through? A Minister could not just, on a whim, act inappropriately.

I thank my noble friend Lord Norton of Louth for tabling his amendment, which is stronger than mine. We have heard today from the Liberal Democrats that even the noble Lord, Lord Goddard, seems a little more inclined towards our amendment.

Goodhart.

I am so sorry, I apologise. I was getting upset and excited.

I hope that the noble Baroness does not see me as an incarnation of the famous Lord Chief Justice.

I am sure that if the people who have spoken from this side—and the noble and learned Lord from the Cross Benches—in support of this amendment read the result of this debate in Hansard, that will enable us to return with a stronger amendment. However, for the moment, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendment No. 47B not moved.]

Clause 4 [Preconditions]:

moved AmendmentNo. 48:

moved Amendment No. 51:

My Amendment No. 64 is included in the group, as the noble Lord, Lord Goodhart, has already said. My proposed new clause is my contribution to the attempt to ensure that the Bill is as narrowly drawn as possible and cannot be used to infringe on the basic arrangements of our constitution. Ministers have reiterated that that is not the Bill’s intention but, as we keep pointingout, ministerial assurances cannot bind future Governments.

The attempt to put the basic tenets of the constitution beyond the reach of the Bill may be done by reference to specific measures of constitutional law, generically through reference to the basic framework of our constitution, or through both. The two approaches are not mutually exclusive, which is an important point to stress. In his response to the Constitution Committee and to what my noble friend Lord Kingsland said on Second Reading, the noble Lord, Lord Bassam, argues in his letter of 27 June that the Bill is designed to achieve better regulation and that the amendments made in the other place put it beyond doubt that the Bill could not be used for any other purpose. He argues, therefore, that it could not be used, as he puts it, “for inappropriate constitutional change”. The problem with this argument is that he assumes that better regulation and constitutional change are mutually exclusive. That they are not may even be inferred from his use of language when he refers to “inappropriate” constitutional change, which implies that appropriate constitutional change may be permissible.

The Minister’s contention that constitutional change is already beyond the provisions of the Bill is not sustainable. If the Bill is to be confined to reducing regulatory burdens that are not contentious, it needs to be as tightly drawn as possible, with the provisions of the constitution put clearly beyond its reach. As I have said, this may be done using a specific or a generic approach, as the noble Lord, Lord Kingsland—I am sorry; I mean the noble Lord, Lord Goodhart, who is in danger of being confused with rather a lot of other noble Lords or former noble Lords—has said.

The Constitution Committee offered a list of measures that might be excluded. As it recognised, that may not be an entirely straightforward exercise. The noble Lord, Lord Bassam, picked up on this in his letter in arguing against such an approach. However, his arguments are not persuasive. He draws on the Constitution Committee in saying that there may be difficulties in identifying which Acts are constitutional and which are not, and that there may be provisions in Acts of constitutional importance that are not in essence constitutional. My response would be to note that one can have a list of measures clearly recognised as constitutional, as demonstrated by the Constitution Committee in paragraph 53 of its report and as embodied in Amendment No. 75A, and that any gaps in coverage may be dealt with by utilising the generic approach. As I have said, the two are complementary. Doubtless there will be provisions of the Acts adumbrated in Amendment No. 75A that are not of constitutional importance, but one has only to look at the statutes listed to realise that relatively few of them are likely to contain provisions that need to be amended for the purpose of better regulation. The noble Lord, Lord Goodhart, indicated some that may, but I see no reason why the Acts listed should not in their totality be excluded from the provisions of this measure.

As the noble Lord has already indicated, my new clause is not dissimilar in aim to Amendment No. 62, but seeks to achieve it through a somewhat different route. Under Amendment No. 62 it would be for the Speaker of either House to determine whether a proposed order covered a matter of constitutional importance; under my amendment the courts would have to make such a determination by reference to a broad definition of the constitution. As is the case for Amendment No. 62, my amendment could be agreed in addition to rather than instead of Amendment No. 63. It draws on and modifies some existing definitions of a constitution and seeks to provide an overarching one. However, as the noble Lord, Lord Goodhart, indicated, it could be argued that it does so at the expense of precision. That does not matter unduly because if the Bill is designed to remove burdens that are not overly contentious in the furtherance of better regulation, no orders are ever likely to come close to being challenged for infringing the terms of the proposed new clause, so I argue that the Government have nothing to lose by accepting the amendment. Incorporating this provision will ensure that the measure cannot be abused by future Governments.

What we are discussing is absolutely crucial in terms of ensuring that the Bill is ring-fenced and capable of achieving only the purpose for which the Government say it is intended. If the Minister argues that my amendment or those advanced by the noble Lord, Lord Goodhart, are deficient in their drafting, the onus will rest on him to come back with an amendment that meets the very real concerns that have been expressed, not only inside but outside Parliament. We cannot allow this measure to go through with what is in effect still largely a blank cheque approach for future Governments.

Amendment No. 75, in my name and that of my noble friend Lady Carnegy of Lour, adopts the list approach—my noble friend once again sends her apologies that she cannot be with us. This point was addressed in the report of the Select Committee on the Constitution, and I base my arguments on paragraph 23:

“Constitutional safeguards cannot depend on ministerial assurances…The rule of law and the principle of constitutional government require the security of procedures and limitations which are set out expressly on the face of any enactment which empowers Ministers to change the statute book by order…The legitimate desire of any government to deliver change should not be allowed to undermine the need for careful consultation and scrutiny of proposals that may have the effect of altering basic constitutional machinery”.

That committee and the Regulatory Reform Committee considered the suggestion that there should be a list of exempted statutes. It is interesting to note Clause 9, entitled “Excepted enactments”, which is very short and well worth reading:

“An order under this Part may not make provision amending or repealing any provision of—

(a) this Part, or

(b) the Human Rights Act 1998”.

Why pick out the Human Rights Act as one which should not be susceptible to amendment by order? One could argue that a number of very important constitutional Acts should equally have the protection of express exception from Clause 1. My noble friend and I have listed some of them in Amendment No. 75.

My noble friend Lord Kingsland has set out a much longer list. Certainly we could discuss which enactments should be regarded as so fundamental to the constitution of this country that they should not be able to be amended by order. That brings me to this question: why does the Bill single out the Human Rights Act 1998? If it is right to exempt it, surely it is logical to look at other issues of significance to the constitution of this country, the rights and duties of its citizens and the rights of Parliament, and exempt them as well. The list in our amendment includes enactments such as the European Communities Act 1972, the Scotland Act 1998 and the Northern Ireland Act 1998, and my noble friend Lady Carnegy specifically asked me to mention its last two proposed exemptions:

“the continued existence of the High Court of Justiciary as a criminal court of first instance and of appeal … the continued existence of the Court of Session as a civil court of first instance and of appeal”.

The Law Society of Scotland has placed particular emphasis on ensuring that those bodies cannot be affected by the order-making power in Clause 1, which is why our amendment is drafted in this way.

My noble friend Lord Kingsland has set out a much longer list, and I shall be interested to hear about it. This debate gives us an opportunity to consider whether something should be done—the Government have already conceded that by specifying the Human Rights Act—and whether by a list or by a generic turn of phrase to include all these provisions, as my noble friend Lord Norton of Louth suggests. It is beyond peradventure that somewhere in this Bill we need a very clear exception so that the order-making power cannot be used to amend fundamental constitutional statutes. The noble Lord, Lord Bassam, in his letter, placed great weight on the report which suggested that this would create a sort of blunderbuss approach and asked what would happen if a new Act needed to be added. We need to address that point, but I do not regard it as a conclusive argument against putting a list in the Bill. Amendments Nos. 75 and 75A are both good ways of approaching this.

Of the various choices helpfully put forward by the noble Lord, Lord Goodhart, I favour Amendment No. 62 in the name of the noble Lord, Lord Norton of Louth. I do not suppose he would say that it is perfect or comprehensive, and if there were any doubt it would depend on judicial interpretation. However, the noble Lord, Lord Jenkin, has made a powerful point in referring to Clause 9. If the Bill mentions the Human Rights Act 1998, why can it not mention other constitutional legislation which, it could be argued, is equally important?

An attempt has been made to list types of constitutional laws, in Amendment No. 63 in particular. I do not like that because I expect that any of us, when looking at each item carefully, could be critical. I would be particularly critical of proposed subsection (2)(h) in Amendment No. 63, which refers to,

“the statutory powers of local authorities”.

Local authorities deal with a huge body of legislation which covers everything from sewage to highways to transport to goodness knows what. Such legislation could hardly be regarded as of constitutional importance or be anywhere near as important as the other matters listed in the amendment such as the powers of the Houses of Parliament, the duration of Parliament and so on. The trouble with a list is that if it is not comprehensive you will miss something out; and if, as I suggest, the list includes inappropriate matters such as the statutory powers of local authorities, one has objections. I think the approach of the noble Lord, Lord Norton, is much better.

I fear that the Government may take help from Clause 4, which relates to preconditions. The clause contains various phrases which are no doubt important, but it is terribly vague on their meaning. It may be said that orders cannot be made under this Bill which would prevent someone continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise—such as, I suppose, the right to jury trial in many instances—and Clause 4(2)(d) provides that orders cannot be made which would remove any necessary protection. That is incredibly vague.

I hope the Minister will have something more positive to say about the amendments’ legitimate objective of ring-fencing matters relating to the constitution. This has been done in Clause 9 for the Human Rights Act; it can surely be done for other matters. Rather than a list, I would prefer the broad phrases suggested by the noble Lord, Lord Norton of Louth.

I suspect that all noble Lords who have spoken so far—I do not know whether this will necessarily apply to the Minister—have been singing, dare I say it, from the same hymn sheet but using different words. We have got the tune right and somehow before Report we have to get the words right.

Different approaches have been suggested but perhaps I may start with the methods proposed by the noble Lord, Lord Goodhart. Generally we support one of his three approaches set out in his Amendments Nos. 52, 62 and 63, although we think there are problems with some of them. For example, Amendment No. 62 proposes a mechanism whereby in this House the Lord Speaker would adjudicate on whether a provision is of constitutional importance. I do not want to reignite debate about the role of the Lord Speaker, but that would widen the role ofthe Lord Speaker considerably, possibly to an unacceptable degree. Any extension of the Lord Speaker’s role should be considered carefully. It should not be a part of any other Bill; the whole House should consider the matter at an appropriate stage, as and when it arises. It should not be slipped into a Bill such as this.

In addition to the three approaches of the noble Lord, Lord Goodhart, an alternative generic approach has been proposed by my noble friend Lord Norton, and a list method has been put forward by my noble friends Lord Jenkin of Roding and Lady Carnegy. A further variant on the list version is contained in Amendment No. 75A, in the name of my noble friend Lord Kingsland. The list suggested in my noble friend’s amendment is based on the Select Committee’s report and mirrors the list of enactments contained in paragraph 3; that is why it is longer than the one suggested by my noble friend Lord Jenkin. Perhaps the two lists could be merged, particularly to include the last two enactments in AmendmentNo. 75, put forward at the insistence of my noble friend Lady Carnegy.

Most of the Committee seems to agree that there should be such a safeguard. We look forward very much to hearing from the Minister but I have a sneaking feeling that the important thing is for us to put our heads together before Report to reach an agreed approach. Whether we come forward with a list system or a generic system, we could put it to the Government on Report. In the mean time, I would like to hear what the Minister has to say.

This has been an interesting debate on an issue which, I recognise, has caused some concern in the past: the imagined potential of this Bill to interfere with the constitution. I thought we had got beyond that point but clearly it is a concern, and I shall deal with the proposed remedies, which differ considerably. There are three from the Liberal Democrats, in one bundle of amendments; two different ones from Conservative Front Benches and Back Benches; and another. It is a difficult but interesting attempt by noble Lords to come up with the same tune, which I think is the expression used by the noble Lord, Lord Henley.

Listening to the contributions, I thought we were talking about a rather different Bill because I do not recognise it as other noble Lords describe it. While I can understand the noble Earl, Lord Onslow, being suspicious of all ministerial pronunciations, in the end we have to trust the Government to mean what they say about the intention of their legislation. It is certainly not our intention—it never has been—to make inappropriate constitutional changes by using the order-making power in Clause 1.

This Bill is, in many respects, very different from the Bill as it was when it was brought before another place because we have reflected long and hard on the constitutional concerns raised. We have taken those concerns very carefully into account and amended the Bill in such a way, I would argue, as to ensure that if ever there was a suspicion that this or future Governments could use this Bill in a controversial way to amend elements of the constitution, we have put that suspicion beyond peradventure.

Clause 1(3) defines the burdens that can be removed or reduced by the order-making power. It is very difficult to see how constitutional change could be squeezed into that definition. In any event, robust preconditions inserted through Clause 4 must be satisfied before an order can be made. Notably, these preconditions include: that the provision made by the order strikes a fair balance between the public interest and the interests of any person adversely affected by it; that it does not remove necessary protections; and that it does not prevent any person continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise. These preconditions could fairly be used to prevent the kind of constitutional mischief for which noble Lords imagine a Government might want to use the Bill.

I do not think this point was made, but it is perfectly obvious. If a Bill is going through Parliament and it becomes apparent that if enacted it would be appropriate to add it to the list of Acts that are excluded from being amended by order under this legislation, it would be a very simple matter to have an additional clause in the Bill, adding it to the list. I do not see that this is an obstacle. We could do that each time one came up. Most would not but some would.

Who would decide which was appropriate to be included in the list and how would that decision be fairly made?

The Government’s view is to concur exactly with the Constitution Committee’s view expressed at paragraph 55. It said that,

“there are a number of practical difficulties with this approach of simply listing Acts of Parliament”.

The Minister seems to be arguing against the principle of having a list. In that case, do the Government intend to remove Clause 9 from the Bill?

I shall come to Clause 9 in due course; it raises a fair point.

I have set out the committee’s important point along with our view. Presumably because of these difficulties, the noble Lords, Lord Goodhart and Lord Maclennan, have tabled amendments setting out other ways of affording protection against the Clause 1 power being abused to make major constitutional changes. Amendment No. 62 does this by providing a hurdle over which Ministers and the Speakers of either House must jump: the Speakers of either House can certify that an order is of constitutional importance which has the effect of vetoing the order.

Amendment No. 62 would effectively introduce a new precondition providing that orders cannot be used for measures of constitutional importance. However, the existing preconditions have already filtered out the possibility that an order could be used for a matter of constitutional importance. As the noble Lord, Lord Goodhart, explained very clearly, the amendment provides that the Speaker of either House could determine that a matter was of “constitutional importance” on application from a Member of that House. If the relevant Speaker determined that an order was of constitutional importance, he would issue a certificate to that effect and the order would be halted in its tracks. The intention of the clause is that the Speaker’s decision would not be justiciable since it would be protected by an ouster clause.

We argue that this does not work. There is no comparison with the role of the Speaker of the Commons in certifying that a Bill is a Money Bill—a demonstrable fact. Nor is it comparable to the role of the Speaker in relation to the Parliament Act, where the Speaker’s role relates solely to ensuring that certain procedures had been followed. The amendment risks drawing the Speakers of either House into a highly subjective, highly political debate. I suggest that this is undesirable, not least in your Lordships' House where noble Lords have given no indication that they would support a Speaker having a substantive role of this sort. The noble Lord, Lord Henley, made that point very effectively. Given recent debates, I suggest that the proposition that the Lord Speaker makes this judgment in your Lordships' House would attract a good deal of controversy from the Benches opposite.

It is interesting that Amendment No. 62 puts the matter of judgment in the hands of the Speakers rather than the parliamentarians. AmendmentNo. 63, also tabled by the noble Lords, Lord Goodhart and Lord Maclennan, provides a new clause that would prohibit an order made under Clause 1 making any alteration to a range of matters that might be described as constitutional.

The list provided in Amendment No. 63 is certainly an improvement on a broader list of constitutional subjects, which would lead to some very difficult issues around judging “purpose”. But it does not avoid the difficulties of defining what is or is not constitutional change, and in seeking to define a constitutional change or issue, it creates new problems of definition.

That also applies to Amendment No. 75 tabled by the noble Lord, Lord Jenkin of Roding. This is a mixture of a few individual statutes and certain subjects. It therefore falls foul of the difficulties identified by the Constitution Committee in listing individual statutes and constitutional areas. On the former, for instance, it does not include the legislation governing devolution for Wales but it does for Scotland.

Amendment No. 75A, in the name of the noble Lord, Lord Kingsland, provides, yet again, a different list. It includes the Government of Wales Act 1998 but the very fact that the list is so different from the lists in Amendments Nos. 75 and 63 illustrates the difficulty of deciding what would be an appropriate list. Again, that point was made by the Constitution Committee.

Amendment No. 64 of the noble Lord, Lord Norton of Louth, takes a less expansive view of what is “constitutional” and therefore might require special protection. It sees “constitutional” more in terms of the relationship between the main branches of the state. We might therefore see the proposed new clause as protecting the constitutional relationship under the Bill of Rights from change by the order-making power in the Bill. However, the problem remains that such a list is partial. In addition, the Constitution Committee recognised the difficulties with devising a schedule of exempted areas. It states that a schedule would be “something of a blunderbuss approach”. That is an adequate description. The committee notes that not all provisions in Acts with constitutional implications affect our constitutional arrangements and concludes that,

“it might be thought wrong to exclude such provisions from the general operation of the bill”.

Amendment No. 51 would introduce a new precondition so that the order-making power could not be used adversely to affect the rule of law or the independence of the judiciary. As the Bill stands, I cannot see how any order could do such things. As a matter of course, Ministers have to act under the rule of law. By definition, Ministers cannot do anything for which they have no legal authority. It is therefore hard to see how Ministers could promote an order that adversely affected something they were bound to follow.

It is also hard to see how it would be possible adversely to affect the independence of the judiciary. Under Clause 4, a Minister cannot make an order which he considers removes a necessary protection. It is therefore difficult to envisage how a Minister could conclude that an order which adversely affectedthe independence of the judiciary satisfied that precondition. Furthermore, it is hard to see how Parliament would agree to such an amendment, and it is difficult to see how such an order would survive judicial consideration of vires, given that secondary legislation is subject to judicial scrutiny.

The Government are satisfied that such fundamental changes could not be made by order under the Bill. The Clause 1 and Clause 2 powers are circumscribed: they can be used only to make sensible reforms removing or reducing burdens or promoting regulatory principles. This is guaranteed both by the preconditions and by the power of Parliament to veto an order. Since the order-making power in Clause 1 cannot be used for constitutional change, these amendments are otiose. There is no need to make any protection against orders being used for that end.

The noble Lords, Lord Jenkin and Lord Borrie, and others made reference to the exemption of the Human Rights Act and Part 1 of the Bill from reform by order. It is true that the Government amended the Bill in the Commons to put amendments to the Human Rights Act off limits. This is not, though, because this is a constitutional statute which differs from other statutes, but because secondary legislation must be compliant with the Act. Therefore, it would be an illogical absurdity were the order-making power to be used to amend the Human Rights Act and so remove the safeguards provided by that Act. Similarly, it would be strange if orders could be used to remove the limits on the order-making powers contained in Part 1. For those reasons and others that have been adduced, I cannot accept the amendments. However, I accept that they were moved not only in good spirit but for very good reasons. I hope that I have answered the various points relating to noble Lords’ quite understandable concerns to protect our constitution.

We have had a substantial debate on this issue. It is clearly important. I have to say that I am unable to agree that the orders of constitutional importance are necessarily and automatically filtered out by the conditions in Clause 4 as they now stand. It is a significant issue and it will need to be taken further.

The problem, as has been demonstrated by this debate, is that there is no single method of dealing with this problem which is ideal. All create some problems of their own. But there has been a clear demonstration of the view that some amendment is necessary, and that is reinforced by the clear statement in the report of the Constitution Committee that the existing protection was inadequate.

In those circumstances, there will have to be further consideration. I certainly hope and expect that, before the Bill comes back on Report, the noble Lord, Lord Kingsland, and I, together, I hope, with the noble Lords, Lord Norton of Louth and Lord Jenkin of Roding, who have their own amendments in this group, will be able to get together and decide on a single amendment which can be put forward and which we think is the best way of dealing with this problem. But that is a matter for the future. For the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved AmendmentNo. 54:

moved AmendmentNo. 58:

moved AmendmentNo. 59:

moved AmendmentNo. 61:

moved AmendmentNo. 65:

moved AmendmentNo. 66:

moved AmendmentNo. 68:

moved AmendmentNo. 69:

moved Amendment No. 70:

I appreciate that the noble Lord’s amendment is a probing one. Although I would normally tend to favour any mechanism that was designed for the reduction of tax I agree with him that it would be appropriate that, just as the Bill prevents any increases in tax, it should not allow for any decreases through this mechanism, and that the appropriate mechanism would be a Finance Bill. In what I think was his first outing as the new Parliamentary Under-Secretary of State for the Cabinet Office, Mr Pat McFadden seemed to indicate that that was what should happen. I should be very grateful for confirmation of that from the Minister.

When Pat McFadden responded in the House of Commons, he said:

“It is not possible to use the powers to create a new tax, but it will be possible to reduce a tax if it meets the procedures and safeguards. In practice, however, tax reform would be dealt with in either a Finance Bill or a tax law rewrite project”.—[Official Report, Commons, 15/5/06; col. 720.]

If that is the case, why does it not say that in the Bill? That would seem a more appropriate way in which to deal with these matters.

I hope that I can help on the points that have been raised. I understand the thrust of the amendment, which is probing. At the moment, the clause prevents an order from imposing or increasing taxation. It is not the intention that orders should be used to remove taxes or lower tax rates. Under the amendment, orders could not remove or alter taxation.

I note this amendment and assure noble Lords that the Government agree that orders under Part 1 should not be able to remove taxes or lower tax rates, which is why we are keen to have this discussion today. We will consider carefully options for making it explicit in the Bill that orders cannot remove taxes or reduce tax rates. However, it is important to get the detail right. In particular, it is important that we do not inadvertently rule out being able to deliver a merger of regulators which would reduce or remove burdens on the regulated by reducing the multiple inspections of regulated firms, for example. If we are transferring regulatory functions from one regulator to another, it will often be necessary also to make provision relating to the transfer of assets and liabilities. It will also often be necessary to make associated provision relating to the tax treatment of those transfers—and only those transfers. Noble Lords may wish to refer to the example of Schedule 10 to the Railways Act 2005.

As I say, it is not the intention that orders should remove taxes or lower tax rates, but it is important that any amendment to Clause 6 does not rule out the possibility of such mergers. When an order under Clause 1 is considered appropriate by Parliament and its committees to deliver such a merger for the purpose of removing or reducing burdens, it is important that the order can also make the necessary provision varying the incidence of taxation in that particular case.

On the basis of that explanation, I hope that the noble Lord will be satisfied. He asked, too, about the definition of taxation. For these purposes, taxation is the compulsory levying of money for state revenue, either nationally or locally, when the levy is not a fee or charge to recover the costs of supply in a specific service to which the fee or charge relates. Fines are not taxation; they are penalties for unlawful activities. It should be noted that there are precedents for using the term “taxation” as it is used in this Bill.

For the purposes of Clause 6 it is important that, to prevent the imposition or increase of any tax, the meaning of taxation is not restricted to any particular taxes and is not narrowly defined. I hope that the use of that precedent in that way will reassure noble Lords. With the thrust of what we are trying to achieve, we shall need to bring something back to meet the narrow circumstances that I outlined, with the need to have some tax provisions, possibly associated with mergers of regulators.

The Minister mentioned the question of merger of regulators, in the context of the amendment. I remind Ministers that I was promised a letter specifically about the merger of the HFEA and the Human Tissue Authority, and I hope that I am going to get it.

I apologise to the noble Lord if that letter has not yet arrived. Together with my noble friend Lord Bassam, I shall do what I can to expedite it.

I thank the Minister, who seems to accept the principle behind the amendment and wants to make an exception only in very limited circumstances, such as those he has described, such as the tax consequences of something else—the merger between regulatory offices, for example—which is not in itself intended as an alteration of taxation. This is something that I am entirely satisfied with in principle, so I hope that the Government will bring back something that achieves their purpose, without giving a general power to reduce or remove taxation. I may in due course bring the amendment back simply to keep the Government on their toes and to ensure that we see something from them. I would obviously withdraw my amendment in favour of theirs. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 71 not moved.]

Clause 6 agreed to.

Clause 7 [Criminal penalties]:

[Amendments Nos. 72 and 73 not moved.]

Clause 7 agreed to.

[Amendment No. 74 not moved.]

Clause 8 [Forcible entry etc]:

moved Amendment No. 74A:

Amendment No. 74B seeks to restrict the power of an order to make provision authorising forcible entry, search or seizure or the compelling of the giving of evidence, except where an order is merely restating an existing provision in an enactment that does one of those things. This amendment removes the ability of an order to extend existing powers for purposes similar to those to which they already apply. The noble Lord, Lord Henley, has carefully set that out.

I understand the noble Lord’s concern about the scope of the power in Clause 8(2). However, the provision, as he has noted, is not new; it is a carryover from the 2001 Act. The Government believe that that is correct, to retain the flexibility that Clause 8(2) provides. I shall describe why that is the case. I ought to add in parenthesis that I am not aware that the provision in the 2001 Act has ever been used, and it would only ever be our intention to ensure that the provision would be used sparingly.

There may be occasions when both the Government and Parliament agree it is appropriate for an order to extend existing powers for purposes similar to those to which they already apply. I give an example: where an existing statutory power is conferred on a particular body authorising it to search and seize certain types of goods from cars and vans. Extending it for a similar purpose could mean so that trains could be searched by that body. In the case of an order under Clause 1, the order would of course need to remove or reduce burdens. Where an order reformed a particular inspection regime and replaced it with a less burdensome one, the changes to the regime might require an existing power authorising forcible entry, search or seizure to be extended slightly to fit better with the new regime.

Amendment No. 74A lists additional restrictions on the powers an order may authorise. The restrictions given are unnecessary and, without listing specific activities, it is unclear what effect the third condition would have. There are existing protections against the misuse of the order-making power in Clause 1, both within and outside the extent of the Bill. The effect of the Human Rights Act 1998 is that it is unlawful, for instance, for a Minister to make secondary legislation that includes orders under Part 1 which are incompatible with the convention rights. For example, in Article 1 of Protocol 1 to the European Convention on Human Rights already protects property rights.

Regarding both Amendments Nos. 74A and 74B,I reiterate that orders must also satisfy the preconditions in Clause 4. In particular, provisions must not remove any necessary protection or prevent any person continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise. Ultimately, though, Parliament may veto an order it considers inappropriate on any grounds, so the power of veto is a powerful tool indeed.

I have already made clear on a number of occasions that we have given an undertaking not to deliver highly controversial proposals by order, and not to force orders through in the face of Committee opposition. I also stress the importance of viewing the powers in Clause 8 in the context of better regulation. Investigative powers should not have a negative impact on good businesses. Rather, they should be used only in a targeted way; for example, against rogue traders. For those reasons, I cannot support the amendment, and I hope the noble Lord will feel able to withdraw it.

The noble Lord asked who decides if the purposes are similar, which is a fair point. It is the Minister making the order, subject to the decision of both committees, which have the power of veto, and subject to the views of the court in the case of a judicial review—perhaps one arising from a criminal prosecution. That fairly settles the question that he reasonably asked.

I thank the Minister for that response, but it was not satisfactory. In the end it comes down to his relying on the same arguments as were put forward for the 2001 Act, and simply saying that the provisions will continue on that basis. I will look carefully at what he had to say, but I have a sneaking feeling that we will have to come back to this on Report and see if we can get a slightly better answer out of him. At this stage, though, it is probably best if I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 74B not moved.]

Clause 8 agreed to.

Clause 9 [Excepted enactments]:

[Amendments Nos. 75 and 75A not moved.]

Clause 9 agreed to.

Clause 10 [Scotland]:

I must advise the Committee that if Amendment No. 76 is agreed to, I cannot call Amendment No. 77 due to pre-emption.

moved Amendment No. 76:

I support my noble friend as I have added my name to the amendment. It raises important questions about situations where consequential amendments are made but the Scottish Parliament has not invited Westminster to legislate for it. The legal position is clear—the provision would extend to Scotland—but are there not political and constitutional implications? We are trying to tease out whether those implications have been thought through.

I understand that this is a probing amendment and I hope that I can satisfy noble Lords why the provision is in the Bill in this form.

Clause 10 makes clear how the Bill works in relation to matters devolved to the Scottish Parliament. The general position is that orders made under this Bill cannot make provision in areas devolved to Scotland. As has been recognised, the only exception to this, as Clause 10 sets out, is that orders can make consequential, supplementary, incidental or transitional provision even in areas devolved to Scotland, so long as the need for this arises out of provision made by the order for purposes which are reserved to Westminster. Orders cannot make any free-standing provision in matters devolved to Scotland.

The intention behind Amendment No. 76 maybe to prevent an order making consequential, supplementary, incidental or transitional provision which would be within the legislative competence of the Scottish Parliament were it contained in an Act of that Parliament. An example of where the ability to make such provision is needed is where an order, in amending Westminster legislation, re-numbers some of its provisions, or if the name of a body is changed or a body is abolished. If a Scottish Act cross-referred to those provisions, the changes to the numbering made by the order would mean that the Scottish Act then referred to the wrong provisions. Under the Bill the order could be used to tidy up the Scottish Act by updating the references to correspond to the correct provisions. This would mean that there was no need for the Scottish Parliament to legislate to make the consequential amendments needed. The amendment appears intended to remove this useful ability, but I hope that the Committee will now accept that it is useful.

The ability to make such changes is fully in accordance with the convention agreed between Westminster and the Scottish Parliament. This convention requires the consent of the Scottish Parliament where the Westminster Parliament intends to legislate on devolved matters, but it is agreed that such consent is not required when legislation deals with devolved matters only incidentally to, or consequentially upon, provision made in relation to a reserved matter. This position is set out in Devolution Guidance Note 10 issued by the Department for Constitutional Affairs, which has responsibility for devolution.

I hope that I have dealt with the points raised, but I shall try to answer any further questions, should they be asked.

I am grateful to the noble Lord. I shall want to study carefully what he has said but he has gone a long way to explain that the Sewel convention will not apply to such incidental matters. I think that that answers my question. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved AmendmentNo. 77: