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Grand Committee

Volume 686: debated on Monday 30 October 2006

Grand Committee

Monday, 30 October 2006.

The Committee met at twenty-four minutes to four of the clock.

[The Deputy Chairman of Committees (THE COUNTESS OF MAR) in the Chair.]

Before the Minister moves the first Motion, I remind the Committee that, in the case of each order, the Motion before the Committee will be that the Committee do report that it has considered the order in question. I should perhaps also make clear that this Committee is charged only to consider orders, not to approve or not approve them. The Motion to approve will be moved in the Chamber in the usual way. I also remind the Committee that, if there is a Division in the Chamber while we are sitting, the Committee will adjourn at the earliest convenient moment after the Division Bells are rung and will resume after 10 minutes.

Representation of the People (England and Wales) (Amendment) (No. 2) Regulations 2006

rose to move, That the Grand Committee do report to the House that it has considered the Representation of the People (England and Wales) (Amendment) (No. 2) Regulations 2006 [36th Report from the Joint Committee].

The noble Baroness said: In speaking to these regulations, I shall also speak to the Service Voters’ Registration Period Order 2006 and the Review of Polling Districts and Polling Places (Parliamentary Elections) Regulations 2006, which appear subsequently on the Order Paper.

As noble Lords will recall from our long and happy deliberations on the Electoral Administration Bill, we aim to tackle four key areas that we believe are at the core of a healthy democracy: improving access and engagement in the democratic process; extending openness and transparency in party financing; improving confidence in the electoral system; and maintaining professional delivery of elections. The Electoral Administration Act 2006 will be implemented, where possible, on a nationwide basis for the May 2007 elections.

Let me take noble Lords through the regulations. Part 1 indicates that the majority of the regulations will come into effect on 1 January 2007 and apply to England and Wales only. Part 2 concerns anonymous registration. Again, noble Lords will recall our debates on these issues. Anonymous registration is for a person who believes that having their name and address on the register would put their safety or that of others in their household at risk. As I indicated in our discussions in Committee and on Report, it is not there to be used as an ex-directory system for someone who does not for whatever reason want their details published on the register. The Act allows a person to apply to be registered without their details being made public.

In drafting the regulations, the Government consulted a variety of stakeholders—Victim Support, the Home Office, Scottish Women’s Aid and the Network for Surviving Stalking. This was to get their views on, for example, evidence that would be required to go with an application and who would require access to the record of anonymous entries. Through consultation—and I am grateful to those organisations for their support and advice—we were able to draft the regulations that are now before the Committee.

There are strict criteria for anonymous registration. A person has to provide evidence such as an order of the types specified in the regulations. These are made under the Family Law Act 1996 or the Protection from Harassment Act 1997, and each has the purpose of protecting people from harassment or molestation. If a person does not have an order, they can apply using an attestation, which has to be signed by a senior officer from the organisations that are listed in the regulations, such as the chief constable of a police force. We did not want a registration officer to undertake qualitative evaluations as to why someone should have an anonymous entry, which is why we prescribe in the regulations the evidence and the forms of attestation that will be acceptable with an application.As a person’s anonymous entry terminates after12 months, a registration officer will send out a reminder, as set out in the regulations, saying to the person that they need to make a fresh application to remain on the anonymous register.

The regulations also extend the current system of registration objections to empower the registration officer to remove an elector’s name from the electoral register if it becomes apparent, after the process of registration has been completed, that they should not have been registered. Previously, objections to a person’s registration could be lodged only before the application for registration was allowed, and a registration officer’s powers to remove an incorrect or out-of-date entry were limited. Noble Lords will recall that we debated that at great length. The regulations allow for any individual to object to another person’s registration at any time. An objection can also be made before or after a person’s registration. The Government feel that this change ensures that registration is more open to scrutiny and that the registers will be more accurate, which is something that I know the noble Baroness is particularly concerned about.

An electoral registration officer has the power to remove an elector from the register if he or she determines that the elector is no longer resident or for other reasons has ceased to satisfy the conditions of entitlement to be registered. This power also extends to a person who has an anonymous entry. A separate list is kept of objections to entries on the register. The list contains the name and address of the objector and the name, address and elector number, if they are already on the register, of the person being objected to. It also contains particulars of the objection.

In Part 3, the regulations allow a registration officer to make alterations to the electoral register to correct an error or to give effect to a court ruling up to 9 pm on polling day. Under the previous system, a person could have been disfranchised if a clerical error had been made that was only discovered on the day of the poll or within the five days preceding it. As errors are likely to come to light when a person goes to vote, this is a sensible amendment that focuses on the elector.

Part 4 of the regulations gives effect to the changes introduced by the Electoral Administration Act 2006 to ballot papers. In particular, ballot papers will no longer need to be attached to a counterfoil. Instead, returning officers will need to record ballot paper numbers to be used at a parliamentary election on a corresponding number list, the form of which is prescribed in the regulations. Noble Lords will recall our discussions about the administrative burden of having to remove the counterfoils from the forms.

Under Part 5, noble Lords inserted provisions into the Electoral Administration Act 2006 that provide for the collection and checking of personal identifiers for absent voters. These are designed to enhance the security of the postal voting system. Part 5 sets out in full the details of the new arrangements. Persons applying to vote by post or proxy are required to provide their signature and date of birth. At elections, postal voters must provide these identifiers when they cast their vote. The returning officer will take steps set out in the regulations to verify the personal identifiers before the ballot paper may be allowed to proceed to the count.

Part 6 amends the arrangements for proxy vote applications that are being made as a consequence of provisions in the Electoral Administration Act 2006. They abolish any rule of common law that could be used to prevent persons with a mental impairment from voting and remove the restriction on mental health patients detained under civil powers from voting in person at polling stations, even if they are well enough to attend the polling station.

Paragraph 94 of Schedule 1 to the Electoral Administration Act 2006 provides for the cancellation and removal of ballot papers under any prescribed circumstances. Part 7 of the regulations cover the procedure by which a cancelled postal ballot paper should be retrieved from a ballot box under prescribed circumstances. Part 8 of the regulations substitutes revised forms of official poll card to be sent to the elector or proxy voter and prescribes the new forms of official poll card to be sent to postal voters and postal proxy voters.

Part 9 is made in consequence of the introduction of new Rule 31A in the parliamentary election rules requiring returning officers to record the return of postal ballots. Part 10 affects access to the records and lists that registration officers maintain of postal voters, proxy voters and proxy postal voters. The provisions work in conjunction with and mirror the framework that governs access to and supply of the full electoral register. The new arrangements take into account the decision in the Robertson case, which concerned the supply of the electoral register. The High Court found that the supply of the register for direct marketing purposes without giving individual electors the opportunity to object was in breach of data protection and human rights legislation.

Part 11 introduces a new framework of regulations governing access to and the supply and inspection of the marked electoral register, postal voters list and other election documents. It broadly mirrors that which is already in place for the electoral register, and implements change to the processing of information from the electoral register and the offence for misuse of the electoral register. Part 12 sets out a number of miscellaneous amendments relating to postal voting and the conduct of elections, and a transitional provision about the anonymous registration process.

On the Service Voters’ Registration Period Order 2006, noble Lords will recall that we wished to increase the length of the registration period on the electoral register for service personnel and their spouse or civil partner from one year to three years, where a service qualification has been completed. To allow for the minimum confusion in implementing the Act, this order will not be made until 18 December so that it can come into force with the other regulations on 1 January 2007.

Finally, as regards the Review of Polling Districts and Polling Places (Parliamentary Elections) Regulations 2006, Sections 18A to 18E of the Representation of the People Act 1983, as amended by the Electoral Administration Act 2006, state that a local authority is required to keep the designation of polling places and polling districts within its area under review. Schedule A1 to the 1983 Act requires that regulations specify the manner in which representations made by a returning officer in connection with the review are to be published by a relevant authority, and specify the information that a relevant authority must publish on the completion of a review. These regulations aim to give greater transparency to the review process. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Representation of the People (England and Wales) (Amendment) (No. 2) Regulations 2006 [36th Report from the Joint Committee].—(Baroness Ashton of Upholland.)

I thank the Minister for that very clear explanation of the regulations, which we discussed in considerable detail during the passage of the Electoral Administration Bill—now Act—when an enormous number of changes were made.

I do not have much to say on the Representation of the People (England and Wales) (Amendment)(No. 2) Regulations 2006. The Minister cleared up a point that I had not picked up in detail. She said that there will be an annual requirement to renew anonymous registration. That is extremely important, otherwise anonymous registration could go on for ever. I was intending to ask whether there was a time limit, so the noble Baroness’s explanation saves me asking a question and her giving me an answer.

The Minister talked about absent voting and the personal identifiers provision. She is correct that we managed to get two identifiers put in during the passage of the legislation—the signature and the date of birth. I am a little puzzled about the percentage that has been selected for examination. I do not remember discussing what a suitable percentage would be. One in five of all postal votes applied for and cast seems to be quite small. Is that a sufficient sample to pick up flaws? Against what criteria was that figure assessed? I know that the Electoral Commission wants 100 per cent provision, although I understand that, particularly at these early stages, that may be a step too far. I can envisage the electoral registration officers getting quite wound up about having to check every vote until they are used to doing so. But 20 per cent seems very low. Perhaps the Minister will let me know against what criteria these figures were set.

On the service voters’ registration, we have memories of a valiant battle lost. The Minister will not be surprised to hear that we think that these measures are extremely second rate. The extension of the duration of the service voters’ registration, which I know has taken place since we discussed this matter, was originally going to be for five years, but it seems somehow to have slipped back to three years. Perhaps the Minister will explain why that has happened. As we made clear during the passage of the Bill, we are not sure that any of this is enough to ensure that service voters are given the opportunity to vote, particularly if they are abroad.

We still believe that the MoD has behaved badly. It could have taken far more responsibility for ensuring that servicemen had the right to vote and were under its eye in order to do so. The rather wishy-washy proposals, whereby people keep an eye on the register, do not seem to do anything much to bring about a satisfactory outcome. The requirement is merely to record a register and to keep an eye out. We are not happy with that. The Minister will not be surprised at this, but we must keep on recording our objection to the fact that these measures simply do not answer the problem. It will be interesting to see whether at the next election the situation is any better at all as a result of this.

On the review of polling districts, we all agreed that polling stations should be accessible. These days, it is completely unacceptable that anybody with a disability should not be able to get into a polling station, or to get a postal vote if they cannot, or cannot get out. We have no objections to any of these provisions.

In general, then, we support these measures, but with grave reservations about the service voters’ registration.

We share many of the concerns expressed by the noble Baroness, Lady Hanham. Like her, we have nothing to say on the review of the polling districts; that seems an entirely proper matter, and I do not wish to make any comments on it. As for the other matters, we believe that the provision made for service voters is inadequate. The Act itself does not go as far as it should, but stronger measures clearly could and should be taken to make it easier for service people—particularly those on duty outside the United Kingdom—to cast their votes, which they of course have absolutely as much right as anybody else to do. They should be provided with the best possible facilities. All that has been done is to extend the period from one year to three. Three years is inadequate; it is less than the normal gap between general elections. I would have thought that the original proposal for five could have been implemented at once. We remain concerned with that, and the battle must continue.

On the main order—the Representation of the People (England and Wales) (Amendment) (No. 2) Regulations—we are broadly happy with everything except the provisions for verification of the personal identifiers. We feel that 20 per cent is much too low. We recognise that it may not be possible to bring in 100 per cent verification at once but, as elections happen and experience is gained, the regulations should have provided—even if they have to provide for 20 per cent initially—for a target date by which we should be able to get to 100 per cent verification of the personal identifiers. That would be an important step forward in what has been a serious problem in recent elections, particularly local elections. The measures taken so far are not strong enough.

Otherwise, we are satisfied with the regulations and are grateful to the Minister for the care with which she has explained them.

I want to pick at one or two of the details of these regulations, and I suppose that the Minister will remind me that I have got my anorak on again. I have tried to work out how many election counts I have been to, but I lost count, although the number is into three figures, which is extraordinary. I wonder what I have done with my life.

Very often, ensuring smooth, efficient and well run elections, and the other side of the coin—stopping people fiddling elections—are a matter of the detail, which is very often important. Regulation 4 of the Review of Polling Districts and Polling Places (Parliamentary Elections) Regulations states:

“On completion of a review the authority must publish”,

a list of provisions. I am not sure what is meant by the word “publish”, which may be obvious to everyone except me. What does that mean?

I also have one or two comments on how the regulations in the main document might work in practice. Part 4, entitled “Replacement of Counterfoils”, refers to what we will now learn to know and love as the “corresponding number list”. Are the corresponding number lists among those documents that can be inspected by people as set out after the election? I am concerned about those lists, which are set out on pages 58 and 59. It will be fairly easy for voters—particularly at a quiet polling station where people might stay to chat for five minutes with those behind the counter because they know them—to have a good look at the list. They would be able to see the electoral number and the corresponding ballot paper number. Until now, a real effort has been made to stop people knowing ballot paper numbers because they then could go along to the count, see the number and work out how a person had voted. Usually, that is not very easy to do, but in small wards where there are not many votes it could be quite easy if forms such as L2 are just lying on the table as voters go in. The presiding officers and clerks write down the numbers and then get people to sign. When people sign, they will be able to see the names of everyone else who has signed. That worries me a little. Do the Government have a comment on that?

On personal identifiers, noble Lords have picked up on the fact that only 20 per cent will be checked. The Electoral Commission has expressed concern about that. New Regulation 85A, on page 25, sets out the procedure for checking personal identifiers. The implication of new Regulation 85B—on additional personal identifier verification—is that the returning officer has to check 20 per cent, but, if having checked 20 per cent they think that things might be going on that ought not to be going on, they can check more. Is that the case?

I have two questions. First, if a minimum of 20 per cent must be verified, will places where it is suggested that there might be more fraud than in others be expected to verify more than 20 per cent right from the beginning? If so, what criteria will be used for deciding that in particular places? Will advice be given to returning officers, or is it entirely up to them?

Secondly, once 20 per cent have been verified, what criteria will be used to decide to verify more? By that stage, it will be quite difficult to get everything out again and start re-checking. It will certainly delay everything a great deal. Will candidates’ agents be consulted at that stage? If you go to a lot of these events, you generally find out quite quickly that the role and status given to agents varies greatly from place to place. In some places, agents are given very few rights and are simply consulted at the end when everything has been added up. In other places, the culture allows agents to keep an eye on what is happening as it is happening. I am not clear whether that will be possible under the regulations. Will it be possible, for example, for the signatures of the 20 per cent to be checked in the presence of agents, or will they be checked secretly? This is key. Will this simply be left to returning officers? If it is, there will be huge differences between the practices in different places. That is simply the way it works at the moment.

On the changes to proxy applications, I shall talk briefly about the recent case in Burnley in which two people were found guilty of defrauding the returning officer as a result of wrongfully filling in proxy forms. I do not want to say too much about it because I understand that they may appeal. I shall wait until everything is finished before I have a lot to say. Nothing in the regulations tightens up the procedure for applying for a proxy vote. At the moment, it is very easy—indeed, it is accepted in a lot of places—simply to write on the form “away at work”, “in some other country” or “on holiday”. The judge in the case recommended that the system of proxy voting should be reconsidered and tightened up a little, or perhaps a lot. I wonder whether the Government have taken that on board.

I have seen proxy application forms, and I learnt some time ago that, if you are an agent for an election in some of these areas and your party is submitting proxy applications, you must insist that you look at all those applications very carefully before they go in. In the light of what has happened in Burnley, I am very glad that I have insisted on that in recent years. You find that people write things such as “shopping”—a classic one. I upset some of our workers by simply tearing the applications up and saying that they could not be accepted. The form and the system are not as rigorous as they should be.

We then come to the question of access to the marked electoral registers and other documents in Part 7. The regulations set out very clearly that it will be possible to have access to personal statements after the event, and that the people entitled to make an inspection may make handwritten notes but not copies. That is a difficulty, because it depends on signatures. At the moment, it is possible, after the event, to check the declarations of identity against the witness statements. The ability to photocopy signatures and check them against the signatures of the people concerned has been a valuable way of telling whether there has been any fiddling in postal votes. This is a grey area in the regulations, although I have certainly been allowed to do it in the past. The fact that this will no longer be possible will make it more difficult for representatives of the parties and the candidates to investigate any possible fiddling.

One of the reasons why there are so few prosecutions in election fraud cases is that it is very difficult to gather evidence. It is especially difficult to gather evidence within 28 days to seek an election petition. It would be much easier if one could inspect not only the statements that people make when they vote but the application forms for postal or proxy votes. In the past, the regulations have been grey and it has been possible to inspect those, but in the past two or three years the Electoral Commission has ruled that that is not possible, and registration officers seem to have applied that ruling. I do not understand why it is not possible to look at the application forms for postal and proxy votes. That would enable evidence on fraudulent applications to be gathered. At the moment, it is very difficult to do that.

On page 39 of the regulations, under the heading “Miscellaneous Amendments”, there is reference to an,

“Additional requirement for applications for ballot papers to be sent to different address from that stated in application”.

That is extremely welcome. I hope that the measure will be applied rigorously and that statements such as “going shopping” will not be accepted by registration officers as a reason for diverting postal votes. We all know of the Birmingham case and of many allegations in other places of the wholesale diversion of votes to postal vote “factories”. That is one of the main problems that has arisen with postal votes. I hope that reasons will have to be stated in detail so that people cannot just write vaguely, “Away from home”, which is what has tended to happen in the past. It would be extremely helpful if applications for postal votes could be inspected by people who might have evidence on whether they were valid.

Applications for postal votes must be made on white paper within a box measuring 5 x 2 centimetres. That is fair enough. Presumably, if they are submitted on Basildon Bond blue paper, or if the relevant information is outside a box on the form, they will be sent back. As regards the postal voting statement that is sent in with the ballot paper, what happens if there is a perfectly reasonable signature, which is clearly the relevant person’s signature, but it goes over the edge of the box? Will that invalidate the vote? Will the form be sent back for another signature, which would be a recipe for all sorts of complaints and chaos? Or will it be accepted and looked at manually rather than by whatever other system will be used? It seems to me that there is great scope for silly problems to arise in that area if we are not careful.

Finally, page 50 of the regulations refers to the postal voting statement. As regards the boxes where the voter has to include his date of birth, no doubt it is fairly obvious to many people where you have to write the day, the month and the year. However, some people, particularly those from different cultures, may put those figures in the wrong place or write them back to front. It would be helpful if under those boxes the words “day”, “month” and “year” were included, as often occurs on other forms.

I am grateful to noble Lords who have spoken in this short debate, and I am delighted that I have light with which to find my answers.

I begin by addressing the two points raised on both sides of the Committee concerning the percentages that we have chosen to use to begin the work on personal identifiers, and the issue of service voters. The noble Baroness is absolutely right about the 12-month review of the anonymity requirement. On personal identifiers, the first thing to say is that 20 per cent is the minimum. It has been decided in conjunction with electoral administrators and the Electoral Commission. We expect that in some areas they will want to look at many more. It is statistically an important percentage, and it will be done randomly at all stages, therefore acting as a deterrent to those who wish to try to defraud the system. It does not prevent, in any circumstances, those electoral officers who wish to go much further from so doing. That obviously depends to a degree on the individual circumstances in an area and the electoral officer’s view of whether more should be done.

We share the ambition held on both sides of the Committee to move towards 100 per cent as swiftly as possible, and we have made funding available to try to achieve that as swiftly as we can. Obviously, that is dependent on timescales for general elections—as noble Lords know, I know nothing about those, ever. That would certainly be our ambition, and we want to do it as quickly as we can. We felt that it was important, having talked to the administrators, to bring this in in a way that could tackle the issue but that would make it possible to achieve as quickly as possible a minimum of 20 per cent. Funding of over £4 million is available, and those who wish to go much further than that minimum could and should. I hope, recognising that noble Lords want to move as swiftly as possible, that they will feel comforted by that explanation.

I rather thought that the valiant battle on service voters was won, not least because the noble Baroness, Lady Hanham, and the noble Lord, Lord Garden, who is not with us this afternoon, fought it extraordinarily well. I completely accept that noble Lords want us to go further, and I agree with the principle that we have to see at the next election whether the plans that we have put in place have been successful in achieving what we all agreed we wanted to achieve.

I say again, as noble Lords would expect me to, that it is not only this part of the process that matters; the other work that the Ministry of Defence is doing matters, too, not least in the registration days, some of which have already taken place. I hope that the combination of things that it wanted to do and is keen to do will make a difference. The period of three years was chosen in consultation again by the Electoral Commission with the Ministry of Defence. It is the minimum length of time that service personnel sign up for, and that felt about right, but it will be kept under review. Although I understand that noble Lords would like us to go further, the proof inevitably is in the eating of whether this works, and we will continue to work with our colleagues in the Ministry of Defence to make sure that it is as effective as possible. We share completely the ambitions of noble Lords.

I will try to deal with a number of detailed comments made by the noble Lord, Lord Greaves. He began by asking me about the polling district and what the word “publish” meant. Regulation 3, on the review of polling districts and polling places, states that the relevant authority,

“must … publish … by posting a copy of them at its office and in at least one conspicuous place in their area; and … if the authority maintains a website, by placing a copy on the authority’s website”.

I am here to help.

The corresponding number list will be sealed along with the ballot papers, so the same position as currently exists with ballot paper counterfoils will apply, which is that they can be accessed for inspection only after an election by the police witha court order made under the Electoral Administration Act.

On the secrecy of numbers on the corresponding numbers list, equipment is being developed so that the voter can see only their own details when signing the list, which I hope will solve the problem that the noble Lord is concerned about. I have also noted that we ought to ensure that the guidance covers any remaining problems that there might be with that. I think that the equipment will solve it, but we will make sure that it does.

The noble Lord asked whether there would be a consultation with the candidates about increasing the figure from 20 per cent. There is no requirement for a consultation with the candidates. The noble Lord will know that the practice varies in different places, and I would expect that candidates or agents will be keen to make representations when they think that there is a problem. The noble Lord asked, too, whether checking would be done in the presence of agents and candidates. The answer is yes, it would be.

The noble Lord asked a couple of other questions that he has raised in parliamentary Questions, which I have responded to on behalf of my honourable friend Bridget Prentice, about Judge Gilbert’s points about proxy voting. The noble Lord will know that we have not yet had sight of precisely what the judge has said, which we would want to examine very carefully before committing further. But I put a copy of the Written Answer that I gave the noble Lord in the Library. I hope that it will deal with the specific points about proxy voting. We shall come back to noble Lords if any further issues arise from the judge’s remarks, when we have had a chance to see them.

The noble Lord asked about requests to inspect postal voting statements. They are made in writing to the registration officer; they must state who will inspect the documents and the date on which they wish to inspect them. They can be viewed only for electoral or research purposes and under supervision. I hope that that answers the noble Lord’s point.

The noble Lord asked what would happen if a mark went over the edge of the box. If it did—because some people have more flamboyant signatures than others—it would get kicked out by the machine, a person would look at it and see that it was fine, and it would be fine. So the machine process points up the fact that there is an issue, but it would not cause the problems that the noble Lord is concerned about.

With the date box, lots of people print “DDMMYY”, which is a way in which to get people to put the dates in the right order. We shall havea look to see whether we have covered that. Thepoint is well made, especially in these days of Americanisation, when the date is sometimeschanged round.

I think that I have answered the points that the noble Lord made. If I have not, I shall pick them up separately with him. I hope that in general noble Lords will feel that the regulations are worthy of support.

To go back to the personal identifiers, I am pleased that the 20 per cent will be a minimum. It is clear that the Electoral Commission hopes that the figure will move up to 100 per cent. The briefing, which I am not sure that the Minister has seen, ends up by saying:

“We hope that the Government will commit itself to putting the necessary resources and technology in place for 100 per cent checking to be implemented across Great Britain before the next UK parliamentary general elections”.

I would be remiss if I did not ask whether the Government were going to do just that.

Yes, we are. Our ambition is to get to 100 per cent by then. We have already put in place funding, and £4.1 million is available to enable the commission to have the equipment to do this. We hope that as soon as possible people move towards that. I am hesitant about saying that it will happen by the general election only because I have no idea when that will be. Were it to be sooner rather than later, there might be an issue. But that is our ambition, and the resources will be available.

Could the Minister respond to the question about the reasons given for diverting votes, which is a subject very close to my heart? Is it possible to give guidance to registration officers that the forms that they put out should require reasons that are a bit more specific? If people have moved, they should say where they are now living and, if they are in student accommodations, they should say where they are studying, rather than just saying that they are away from home or “gone shopping”, or things like that. That would make a big difference in stamping out illegal diversion of votes, which obviously we all want to do.

I am sorry that I did not answer that point specifically. The Electoral Commission will be giving that kind of guidance. I have written myself a note to say that we should pick the point up with the commission; if I might, I shall do so and ask it to write to the noble Lord directly to address those concerns.

On verification, if the returning officer discovers that, of his 20 per cent that he has opened, a significant proportion are not verified and the figure is so large that it might affect the outcome, is any guidance given to him that he should proceed to count the whole lot?

I hope that electoral officers will need no guidance and that it will be obvious that they must do further things. The new regulations allow a returning officer to make additional checks on any postal ballots opened at a previous opening session, where they have not been verified. We have left when to do that to the discretion of the returning officers, but I have no doubt that there will be additional supportive guidance from the Electoral Commission. It is part of the ambition of moving to 100 per cent as quickly as possible.

On Question, Motion agreed to.

Service Voters’ Registration Period Order 2006

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

Moved, That the Grand Committee do report to the House that it has considered the Service Voters’ Registration Period Order 2006 [36th Report from the Joint Committee].—(Baroness Ashton of Upholland.)

On Question, Motion agreed to.

Review of Polling Districts and Polling Places (Parliamentary Elections) Regulations 2006

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

Moved, That the Grand Committee do report to the House that it has considered the Review of Polling Districts and Polling Places (Parliamentary Elections) Regulations 2006 [36th Report from the Joint Committee].—(Baroness Ashton of Upholland.)

On Question, Motion agreed to.

Non-Domestic Rating (Chargeable Amounts) (Amendment) England Regulations 2006

rose to move, That the Grand Committee do report to the House that it has considered the Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2006 [35th Report from the Joint Committee].

The noble Baroness said: I commend to the Committee the Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2006 which, if approved, will be made under Section 57A of the Local Government Finance Act 1988 as inserted by Section 65 of the Local GovernmentAct 2003.

These regulations make one specific change to the transition scheme for the current non-domestic rating lists. The transition scheme was brought in as part of last year’s revaluation of non-domestic rates and is designed to soften the impact of sudden and dramatic rises in business rates bills as a result of revaluation. The change is required to give effect to a High Court decision earlier this year and brings into the transition scheme a very small group of properties that were not covered by the original transition scheme.

This is a small change to a very technical set of regulations and affects only a very small number of non-domestic properties. I shall do my best to explain how the scheme works and how the change affects it. I hope that noble Lords will bear with me while I attempt to do so. I should emphasise up front that, although the change will impact on a handful of properties only, it is good news for them and they will stand to benefit financially.

Under the original scheme, which took effect on1 April 2005, properties that had a rateable value of zero pounds on the last day of the previous ratings list—in this case, 31 March 2005—were not included in the transition scheme. These regulations bring those properties into the scheme. Briefly, the transition scheme works by limiting the amount by which rate bills can increase or decrease compared with the rate liability for 2004-05. The scheme lasts four years and the cost of capping increases to some rate bills—for those in upward transition, obviously—is funded by capping reductions in other rate bills: those in downward transition. There have been similar transition schemes as part of each revaluation since 1990, in 1995 and 2000.

The caps obviously change depending on whether relief is being given to a large or small property; they are different. The arrangement for small properties is more generous, to reflect the greater burden that rates generally pose for small businesses compared with larger concerns. For the rating period that began on1 April 2005, however, all ratepayers will pay their full rates liability in 2009-10—the final year of the five-year life of the current rating lists.

To qualify for transitional relief under the original scheme, properties had to have a rateable value greater than zero on 31 March 2005, the last day of the old rating list. The rateable value of a property is generally based on the assumed rent that the property would attract if let on the open market on a specific date. In some cases, this will be a nil value, but the property must still be shown on the non-domestic rating list.

Because the amount of rates that a property has to pay is calculated according to its pre-revaluation liability, any property with a rateable value of zero pounds at 31 March 2000 would continue with a zero liability for the four-year life of the 2005 scheme. If you multiply anything by zero, it comes to zero. The most that ratepayers in this position would have to pay would be a small contribution each year toward the cost of the small business rate relief scheme.

Previous schemes in 1995 and 2000 had allowed properties valued at zero to be considered for transitional relief. As the 1995 and 2000 transition schemes lasted for the full five years of the rating lists, the base liability on the last day of those lists remained at zero because the liability of the final day on one list was used to calculate the transition bill for the following five-year rating period. The effect was that the hereditament never had a liability and would have continued to pay zero indefinitely. We obviously wanted to avoid that paradox in the 2005 transition scheme. The major institution caught in this contradiction was British Waterways.

By definition, a transition scheme should smooth changes in rates bills, not act as a de facto exemption from rates. The transition scheme for the 2005 revaluation set out in the original regulations addressed this and tried to ensure that it did not happen by excluding from the scheme properties that had a rateable value of zero on 31 March 2005 but which had moved to a positive rateable value on1 April 2005. It treated such properties as analogous to a property that was entered on to the rating list for the first time on 1 April 2005. In both situations, there was no liability in the 2000 list but there would be a positive liability in the 2005 list.

In the case of British Waterways, whereas from 2000 to 2005 it paid no rates, in 2005 it was liable to pay £746,925. As I will explain in a moment, another 18 hereditaments also fell into the same category, out of—this is a very important figure—the 1.7 million hereditaments as a whole. Removing this tiny category from the scope of the transition scheme meant that those ratepayers would have to start to pay rates, quite rightly, but that they would also inevitably not qualify for transitional relief. This approach meant that ratepayers in this situation would pay their full rates liability from the first year of the 2005rating list.

The scheme came into effect from April 2005. Ratepayers were issued with rate demands that had been calculated either in line with the Local Government Finance Act 1988 or, where the transition scheme applied, the chargeable amounts regulations. The British Waterways board challenged this aspect of the regulations. The High Court found that excluding hereditaments with a rateable value of zero as at 31 March 2005 from the transition scheme was unlawful. British Waterways is the only ratepayer on the central rating list to be affected by the court judgment. At the time when these regulations were laid before Parliament, the Valuation Office Agency had identified 13 properties on local rating lists that fell into the same situation as British Waterways. Since then there have been further changes to the rating lists. We have now identified 18 properties in a similar position to British Waterways.

These amending regulations give effect to the court’s decision by bringing British Waterways and the other affected ratepayers into the existing transition scheme. The effect is that, instead of having to pay their full rates liability for each of the five years’ life of the 2005 rating list, these ratepayers will have a greatly reduced rates bill until the final year of the scheme, beginning 1 April 2009. It is possible that appeals against the 2000 rating lists that have yet to be decided may result in some additional properties having their rateable value at 31 March 2005 reduced to zero.

So what have we done to make redress? The Secretary of State has refunded the money paid by British Waterways in respect of the 2005-06 rate liability as required by the court. Refunds due to the other affected ratepayers on the local lists will be calculated and paid by the relevant billing authority when these amending regulations have been approved and come into effect. We have already alerted local authorities to the impending changes and will let them know when the revised arrangements come into effect so that they can reassess liability for the affected properties and adjust payments accordingly.

The amending regulations have very limited effect but give effect to the court judgment. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2006 [35th Report from the Joint Committee].—(Baroness Andrews.)

I thank the Minister for that very lengthy explanation of this matter, which has arisen because of the British Waterways problem. It is clear that it is a small issue as regards rating, but it is probably a major issue for the properties involved. I have no difficulty in supporting these regulations.

It was definitely a hot-towel afternoon as I settled down yesterday to read the regulations and the Explanatory Memorandum. It is a pity that the issue had to go as far as judicial review before it could be resolved. I have a question that the noble Baroness may not be able to answer today, but I would appreciate an answer in writing. Although we believe that only a relatively small number—around 18—of properties are involved, the amounts of money are quite large. The cost was estimated at £3.3 million when there were 13 properties. Where the billing authority is, for example, a small, rural district council, the rebate would represent quite a large sum of money. I understand that in the fullness of time the authorities will get this back through the pooling arrangements of NDR, but I am interested to know, first, how long that might take and, secondly, whether there will be a clear mechanism for identifying that the rebate is exactly what was paid out. Anyone who has experience of local government finance will know that promises are often made that certain costs will be covered. However, when settlements arrive they are so opaque that it is difficult to have a clear audit trail and be able to see whether a local authority has received back what it has paid out. Apart from that, I am happy to support the regulations.

I am very grateful for the support of both noble Baronesses. I am sorry that the Explanatory Memorandum is a rather surreal read. On the question of multiplying zero by zero, after a while one begins to wonder whether one can get something more than zero. On the point that the noble Baroness made about recouping the money from the local rating arrangement, the costs will of course fall on those authorities but they can be recouped from the pool as a whole. In relation to the whole of the distributable amount, which runs to £17.5 billion, we are talking about a small sum, even though it is identified as some £3 million. That in itself is often an unpredictable amount because there are ebbs and flows. I will write about the process that we will follow to ensure that those authorities are not out of pocket. I have a very able team of experts behind me who will help to do that. I should like to thank noble Lords very much.

On Question, Motion agreed to.

Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2006

rose to move, That the Grand Committee do report to the House that it has considered the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2006 [36th Report from the Joint Committee].

The noble Lord said: The primary purpose of this order is to enable two parts of UK immigration legislation to be applied in the juxtaposed control zones at the ports of Calais, Dunkerque and Boulogne. The first purpose of the order is to apply Sections 40 and 41 of the Immigration, Asylum and Nationality Act 2006, which provide a power for the Secretary of State to authorise certain persons other than immigration officers to search ships, aircraft, vehicles or other things to ascertain whether there are individuals whom an immigration officer might wish to examine, to search such persons for specified reasons, to detain such persons for a period as short as reasonably necessary up to a maximum of three hours and to escort them as speedily as reasonably practicable to an immigration officer. The second purpose of the order is to provide for the taking and retention of fingerprints under Sections 141 and 143 of the Immigration and Asylum Act 1999.

This order applies two pieces of English immigration law to the juxtaposed controls in the northern French ports of Calais, Dunkerque and Boulogne. As the Committee will know, the United Kingdom has several international agreements with France to allow UK authorities to carry out immigration and other controls in France, and for French authorities to do the same in the UK. Controls are carried out by UK officers in a defined geographical area and for specified purposes only. These juxtaposed controls, as they are known, provide the United Kingdom with an important opportunity to carry out immigration controls before a person physically enters the UK, and are essential to our ongoing efforts to secure the border.

The juxtaposed controls in Calais, Dunkerqueand Boulogne are provided for at an international level by the Le Touquet treaty, which was signed on4 February 2003 and given domestic effect by the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) Order 2003—I will refer to it as the 2003 order for convenience—which was made under Section 141 of the Nationality, Immigration and Asylum Act 2002. The order under debate amends the 2003 order to apply, first, the power to authorise persons other than immigration officers in Sections 40 and 41 of the Immigration, Asylum and Nationality Act 2006 and, secondly, the power to take and retain fingerprints of certain persons under Sections 141 and 143 of the Immigration and Asylum Act 1999 to the juxtaposed controls.

I shall deal first with the power to authorise persons other than immigration officers to search ships, aircraft, vehicles and so on. Before Sections 40 and 41 of the Immigration, Asylum and Nationality Act 2006 came into force, only an immigration officer had the power to search a ship, aircraft, vehicle or other thing for the purpose of ascertaining whether there were individuals whom an immigration officer might wish to examine. The 2006 Act provides the Secretary of State with a power to authorise the police, HM Revenue and Customs officers or private contractors to carry out these searches. It is important that these powers apply to the juxtaposed controls at Calais, Dunkerque and Boulogne, where the UK Immigration Service has a considerable freight examination operation, and it is intended that private contractors will be authorised to carry out vehicle searches in order to free up immigration officers to concentrate on other areas of more complex work, such as forgery detection, the application of civil penalty and asylum screening and debriefing, for which they have undergone considerable training. Those contracted to undertake this work will be known as authorised search officers—ASOs—and the legislation demands that they are suitably trained and fit for the task assigned to them. If they are not, the Secretary of State will not give authorisation. He can and will revoke any authority should the contracted party fail to perform effectively and in accordance with the standard set.

Careful consideration has been given to the powers of search and detention that ASOs will have. Those powers have been limited to the minimum necessary to enable ASOs to fulfil their function properly. The aim is for ASOs to find people who are seeking to enter the UK clandestinely, to detain them for the shortest period necessary—and for not more than three hours—and to take the person as speedily as is reasonably practicable to an immigration officer for examination. We expect delivery to be swift as the contractor will have a cellular vehicle permanently at his disposal. Checks and balances will be in place to ensure that the ASOs deploy their powers appropriately and efficiently. They will be directed and supervised by the UK Immigration Service on site, and a monitor will be appointed by the Secretary of State to oversee the operation of those powers and to investigate any complaints or failings.

On fingerprinting, when the immigration controls at the juxtaposed controls were initially established, no provision was made for the application of Sections 141 and 143 of the Immigration and Asylum Act 1999. At the time, it was felt that it would not be necessary to take and retain fingerprints, as all persons refused entry at a UK control zone are handed over to the French authorities. The management of their movement within the UK was therefore of no significance, because they would not enter the UK. However, it has become apparent that there is a real need for the identification of certain persons and that we should have the same powers as at UK mainland ports to take fingerprints.

The application of this power in the juxtaposed controls would focus on those persons detected concealed in vehicles who seek to enter the UK clandestinely and those trying to use false documentation. Taking their fingerprints will provide a bank of physical data that can be used to identify people who have previously attempted to enter the UK unlawfully and who subsequently present themselves at the juxtaposed controls. Fingerprinting will support an intelligence-led approach to border security, providing information regarding its efficiency and the level of displacement between ports.

For completeness, I should add that the contracting out of search provisions and taking and retention of fingerprint powers will also be applied when appropriate to the juxtaposed controls in France and Belgium connected with the Channel Tunnel. When secondary legislation is required to do this, it has been done under the Channel Tunnel Act 1987, which provides for a negative procedure. The relevant orders are the Channel Tunnel (International Arrangements) (Amendment) Order 2006 and the Channel Tunnel (Miscellaneous Provisions) (Amendment) Order 2006, which came into effect on 26 October.

The application of these measures—the use of contractors and the power to fingerprint—at juxtaposed controls will increase the security of the border. They will allow warranted immigration staff to concentrate on more complex work and ensure that all those intent on circumventing the controls have physical data recorded for future identification. I commend the order to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2006 [36th Report from the Joint Committee].—(Lord Bassam of Brighton.)

I thank the Minister for explaining the reasons behind this order, and his team for letting me learn a little more every day. When the Minister mentioned the “cellular vehicle”, I wondered whether he was testing our ability to keep awake and follow every word, because it was certainly not something that I had come across before. I wondered whether the cellular telephone had suddenly sprung wings—but we are now informed that it is simply a van that can carry people securely in cells. In this job, I learn something new every day.

The 2003 Le Touquet treaty, to which the Minister referred, allowed French and UK authorities to implement juxtaposed controls at specified ports. It enables UK immigration officials to establish control zones in Calais, Dunkerque and Boulogne. We recognise the value of those zones, because within them the UK immigration authorities have the power to exercise immigration control. Criminal offences and the related powers of arrest are extended to these zones. That has always seemed to us an appropriate measure.

The controls mean that all UK-bound passengers travelling from these ports should be subject to checks by UK immigration officers before they travel, and that passengers should be refused permission to depart for the UK if they do not have proper paperwork. One should remember that the policy of juxtaposed controls was an attempt by the Government to strike a series of deals, at international and EU levels, on asylum and immigration. Previous measures had included the high-profile closure of the Sangatte refugee camp, and the agreement underlying that; improved security around the Channel Tunnel entrances, which is always welcomed; high-tech vehicle scanning for hidden individuals at ferry ports in France, Belgium and Holland; and UK immigration controls at Coquelles and Eurostar stations.

In August 2005, the UK Immigration Service implemented a measure whereby private contractors worked alongside and under immigration officers. That was a potentially controversial measure. The Government tell us in the Explanatory Memorandum to this order that this has been “very successful”. I and other Members of the Committee would be grateful if the Minister could expand a little on that to give a flavour of the level to which the situation has improved as a result of that activity.

The broad effect of the order would be to extend the regime of juxtaposed controls. The Minister explained the two ways in which that will happen. The nub of the matter will always be the fact that suitably qualified persons who are not police or customs officers can be given the authority to carry out searches. That was debated earlier this year, in relation to the 2006 Act. We always took the view that we were prepared to accept the proposals becausethe Government gave assurances—in that case, the Minister dealing with the matter was the noble Baroness, Lady Ashton of Upholland—that the private contractors who carried out the searches would have the appropriate training and be under the appropriate supervision. We note that the regulations are there to put that into effect.

We have throughout supported the imposition and extension of juxtaposed controls, but our support is not open ended. It continues only on the basisthat the training and supervision of the private contractors should be satisfactory. We maintain that, despite the changes introduced by the Government, there are still others that could have a much greater effect on the security of this country. Recently, the noble Lord, Lord Carlile of Berriew, with the independent review of terrorism legislation, produced a report that details the inadequacies of policing at our ports.

My honourable friend Patrick Mercer, who is the shadow Minister for homeland security in another place, has pointed out that we have been calling for the Government to address the problem of policing the ports for many years. There are many practical solutions that the Government could implement to deal with the problem, such as establishing a single, dedicated border police force or a single department for homeland security to co-ordinate our border control efforts. Of course, we wait with patience to see whether at some time the Government might acknowledge the wisdom of our proposals on the matter. In the mean time, with the caveats that I have given about the proper supervision and training of the people taking part in searches, we support the order.

We, too, are grateful to the Minister for the careful and detailed explanation that he gave of the provisions in the order and for giving us the opportunity to continue the discussion that we had during the passage of the 2006 Act, as the noble Baroness said, when these proposals proved to be among the most controversial in the Bill.

If there is a great deal of anxiety about the management of the UK-based detention estate, such as we saw last week, arising from the chief inspector's report on Yarl's Wood, how much greater is the need for concern about what happens at the juxtaposed controls on the other side of the Channel, particularly, as under this order, when private contractors are being employed to arrest, detain, search and fingerprint passengers, without either French or British officials being present? Moreover, as the Independent Race Monitor told the Home Affairs Committee in another place, the likelihood that a person seeking to enter the UK will be refused is greater at these overseas ports than in the UK, which raises questions of the relative fairness of the procedures in the two locations.

We know, for instance, that biometric identification is an imperfect technique, and many asylum seekers are refused on the basis of a match between their fingerprints and ones stored on the Eurodac computer system. It would be interesting to know how many challenges there are on the grounds of false matches at the juxtaposed controls and at UK ports of entry respectively, and, of the challenges, what proportion are successful at each, as an illustration of the fact that greater difficulties are bound to arise at the juxtaposed controls than at UK ports of entry.

We had some assurances from the noble Baroness, Lady Ashton of Upholland, when we discussed these matters on 7 February, as the Explanatory Memorandum recalls, but it was the combination of the employment of private contractors and the fact that they would operate under an overseas jurisdiction that raised our anxieties, not the fact that the contractors themselves would be foreign. We did not say that the French police would not be capable of applying criminal records checks to the staff employed by contractors or that the course material for training staff would be deficient, although we were naturally anxious to ensure that these matters had been covered. The noble Baroness, Lady Anelay, repeated that this afternoon. The noble Baroness, Lady Ashton, undertook to place the training documents in the Library of the House. Will the Minister tell us whether that is being done or whether it has already been done, so that, as the noble Baroness, Lady Anelay, says, we can be satisfied that the training procedures are sufficiently rigorous?

We said that the activities of the contractors who are being given these new powers are intrinsically less liable to come under public scrutiny and are therefore more liable to give rise to errors. There are several reasons for that. First, although a person who claimed that he was wrongfully detained had a right of access to the chief immigration officer and then to the monitor, who is a Crown servant appointed under Section 41 of the Nationality, Immigration and Asylum Act to examine the use made of thepowers conferred on independent contractors, the complainant would have been returned to his country of origin before that process could have led to a result. Will the Minister say—he touched on this in his speech—who has been appointed as monitor? I rather think that he said that a monitor had not yet been appointed, but perhaps he will correct me if I am wrong. If the monitor has been appointed, when did that person assume office? What statistics are to be published on the complaints received, and at what intervals? How were they dealt with in the UK and at the juxtaposed controls respectively? If the monitor has not yet been appointed, will the Minister explain the reason for that delay and how long he expects it to be before the monitor takes up office?

Secondly, allegations of the ill treatment of detainees or of failures in the duty of care in the UK can be pursued by the Chief Inspector of Prisons and, where children are involved, by the Children’s Commissioner. Both of them have access to the juxtaposed controls but, given all their other duties, they may not get around very often to visiting Calais, Dunkerque and Boulogne—the three ports to which the order applies—let alone to the Eurostar stations in France and Belgium where the power to take fingerprints already applies under other orders mentioned in the Explanatory Memorandum, although not for private contractors to arrest, detain and search passengers. So far, the chief inspector has inspected these facilities only once—she visited the short-term residential holding facilities at Calais in August 2005. That, of course, was before the authorised search officers mentioned by the Minister appeared on the scene. At that time, the longest period for which anyone was held in the previous year was 17 hours—much longer than the three hours mentioned in the order—and it would be useful to have at regular intervals more up-to-date information on the average and maximum lengths of detention. As the Minister will no doubt acknowledge, under Article 3(2) of the Le Touquet treaty, which has been mentioned, the maximum period for which a person can lawfully be held is 24 hours, unless otherwise authorised by legislation in the state of arrival. Thirdly, will the Minister say what requirements and procedures to govern this practice have been laid down under the article?

Fourthly, as the Minister will recall, particular concern was expressed throughout the proceedings on the Immigration, Asylum and Nationality Bill about the delegation of responsibility to private contractors for the power to arrest, detain and search unaccompanied children. The Children’s Commissioner visited Yarl’s Wood and said that he was shocked and disappointed by the treatment of children there. He and Anne Owers have both called for a complete overhaul of the detention of children. As I have said before, if things can go wrong under our very noses in this country, how much greater is the risk on the other side of the Channel? Astonishingly, the Children’s Commissioner was not on the list of those consulted about the use of private contractors before the order was laid. Will the Minister explain why Sir Albert was left out, and whether he has nevertheless expressed an opinion on these proposals? In addition, the chief inspector recommended independent monitoring of short-term holding centres, instead of which the Government have introduced monitoring by an official. Why was the chief inspector’s advice ignored and a government official appointed instead of an independent person?

In the consultation document issued last April, it was stated that private searching by ASOs independently of immigration officers was to commence at Calais in August, after they had worked alongside each other since August 2005. No mention is made of ASOs at Boulogne and Dunkerque, and ILPA read the document as extending the use of private contractors only to Calais. It said there would be questions of vires if the order was applied more broadly, yet the order seems to relate to any of the control zones. Is that the correct interpretation, and did the Government put that to the consultees at any stage? What have they to say about ILPA's warning on vires?

Finally, ILPA points out that the treaty on which these arrangements are based provides only that responsible officers of the state of arrival have the power of arrest and detention in the control zone—and that means immigration officers. The contracting parties have the power to modify the treaty by exchange of diplomatic notes under Article 23(2), but are expressly forbidden to change provisions that require legislative authority. I am sure that I am not saying anything that will be new to the Minister, because this was all in the ILPA response to the consultation.

The noble Baroness, Lady Ashton of Upholland, made it clear on Third Reading of the IAN Bill on14 March that the Government were not delegating responsibility for these matters, which remained in the hands of the UK immigration authority. It is difficult to see how the power to arrest, search and detain a passenger can lawfully be exercised by someone who is not a responsible officer within the meaning of the treaty, and if any explanation was given to ILPA we hope that a copy will be placed in the Library of the House, and a brief summary given by the Minister in winding up this debate.

I have a couple more questions to add to those of my noble friend Lord Avebury. First, immigration officers now hold powers akin to those of police officers and are very much part of the process that comes under the Independent Police Complaints Commission when complaints are raised. I refer to the power to arrest, detain, search and so on. Could complaints in the control zones abroad now be investigated by the IPCC? Does the IPCC have power to operate in countries abroad and call for witnesses over there?

The second matter relates to the authorised search officers. Here there is an interesting situation whereby the immigration officers can be dealt with by the IPCC. Could the Minister explain about the accountability of those officers and whether the IPCC has powers to investigate complaints against the authorised search officers? It would be very helpful to know whether they fall within the ambit of the complaints commission.

I am grateful to the noble Baroness, Lady Anelay, for her comments, and to the two noble Lords from the Liberal Democrat Benches, who have a long history of persistently ensuring that we are held to proper account on a delicate area of implementation.

The noble Baroness, Lady Anelay, asked about successes. We think that the way in which the service operates has been very successful. As the noble Baroness probably knows, the contracts are run by Eamus Cork Security—ECS—which has worked with the UK Immigration Service for a number of years, initially at Dunkerque and, since August last year, in Calais. The firm works to assist UK immigration officers with a freight-searching operation at berth side. In the past 10 months, the firm has intercepted some 1,200 clandestines and recently was successful in bidding for the contract to work with the UK Immigration Service in Calais as escorting officers, transporting persons detected concealed in vehicles to an immigration officer at a holding facility in the port. That contract contains an extension that provides for the work of ASOs, which will become effective only if this secondary legislation is approved.

I was wondering how the figure that the noble Lord has given can be said to result from the use of ASOs, bearing in mind that, if they had not been there, identical searches would have been conducted by immigration officers, who presumably would have found those 1,200 people as well. There is not a control group with which you can compare the statistics that have been achieved by ASOs, is there?

It is obviously the case, as I said earlier, that having those contractors there means that immigration officers can concentrate on more rigorous and demanding work. In a sense, the ASOs offer and provide activity that is more in support of the way in which immigration staff work. Of course, the noble Lord is absolutely right in the sense that, if ASOs were not there, we would have to deploy immigration officers. It is a question of having the appropriate level of qualification among staff to carry out particular work.

The personnel who are deployed will have already been subject to rigorous security screening in the UK and France. They will also have undergone extensive training with Centrex, the central police training authority. When it comes to efficiency, they have demonstrated their track record at the port of Dunkerque where, since January 2004, they have intercepted over 3,600 clandestines on behalf of the port authorities and prevented their entry into the UK.

Non-British companies already undertake a freight-searching role for ferry companies and port operators outside the UK and have demonstrated themselves to be highly effective. The performance of the contractors will be scrutinised on a daily basis by the Immigration Service, which will examine any suggestion of underperformance or substandard behaviour. ECS personnel will also come under the scrutiny of the monitor, to which the noble Lord, Lord Avebury, referred.

The noble Lord, Lord Avebury, asked a number of questions and, as best I can, I will respond to them today. If I cannot do so, I hope that the noble Lord will be satisfied by a written response, which I would be more than happy to share with other Members of the Committee. A copy of the training material that is used by ASOs will be put into the public domain, and I am more than happy to ensure that the noble Lord is fully advised on that. He asked about false matches on Eurodac. I find it hard to provide the noble Lord with that information this afternoon, but I undertake to prepare a written response for him as best we can. The database regulations provide a useful structure for ensuring that asylum seekers who are processed elsewhere will have been properly processed. We will ensure that we spell out more of the detail on that.

I do not think that the noble Lord is right in what he said about complainants; they would not have been returned to their country of origin. It is likely that they would be refused entry to the United Kingdom, and we would ensure at that point that they were handed to the French authorities to be processed.

The noble Lord asked me to name the monitor today, but I am not in a position to do that. I can tell the noble Lord that we are at an advanced stage of talks with a Crown servant, and we are confident that we will be able to appoint someone in the very near future. As soon as an agreement is reached, we will, properly, announce the name of the person who has been appointed.

If the complainant is not satisfied with the reply given by the chief immigration officer, to whom does he go? We were told that his route of complaint would be, first, to the chief immigration officer and then, if he was not satisfied with that, to the monitor. If no monitor has been appointed, to whom does he go when he is not satisfied in the first instance?

Under this order, the complaint will be processed and forwarded to the monitor. But, of course, that process will not kick in until the monitor is appointed. I will ensure that the noble Lord, Lord Avebury, is given more information on how the monitor works so that he can be fully satisfied on that point. The noble Lord also asked what requirements have been laid down under Article 3(2) of the Le Touquet agreement. Perhaps I misunderstood, but the maximum period for which an ASO can detain a person is three hours. I cannot see how Article 3(2) is entirely relevant to the order, but we are more than happy to provide the noble Lord with more detail, should he wish it. Perhaps he will flesh out his question so that we can provide a fuller response.

The noble Lord also asked about the detention of children, on which he made a number of points. We have offered to facilitate a meeting between the noble Lord and the Children’s Commissioner, Al Aynsley-Green. I am not aware that that meeting has taken place, but the offer still stands. Children detected are taken immediately to an immigration officer. If the minor does not qualify for entry to the United Kingdom, he or she is handed to the French authorities and is dealt with under its domestic law. The French have well established procedures for the welfare of unaccompanied children.

The noble Lord, Lord Avebury, also asked about ILPA and the question of vires. We will respond to ILPA’s very long and generally helpful comments. We are satisfied that we are acting within our vires and that ILPA’s comments, while useful, are not an issue. Again, I would be happy to share our response with the noble Lord if ILPA is content with that. For the avoidance of doubt, I can confirm that this order relates to the ports at Calais, Dunkerque and Boulogne.

I will undertake to write to the noble Lord, Lord Dholakia, in detail in response to his question on the IPCC, but it is my understanding that the IPCC will not oversee the juxtaposed controls. I shall of course need to ask my officials to ensure that that is the case.

That answers most of the main points but, as I said earlier, I would be more than happy to flesh out some more of the detail and specifics, particularly in relation to the pertinent questions posed by the noble Lord, Lord Avebury.

On Question, Motion agreed to.

Misuse of Drugs Act 1971 (Amendment) Order 2006

rose to move, That the Grand Committee do report to the House that ithas considered the Misuse of Drugs Act 1971 (Amendment) Order 2006 [35th Report from the Joint Committee].

The noble Lord said: The purpose of the order is to reclassify the substance methylamphetamine from a class B drug to a class A drug under the Misuse of Drugs Act 1971. As is required by the Act, the Advisory Council on the Misuse of Drugs has been consulted and agrees with the proposal. Methylamphetamine has been controlled as a class B drug under Schedule 2 to the 1971 Act from the outset of that legislation. It also has recognised medicinal benefits when in the form of a medicinal product—including treatment of attention deficitand hyperkinetic disorder—and consequently is categorised as a Schedule 2 drug under the Misuse of Drugs Regulations, so that doctors can prescribe it where necessary.

Prevalence of misuse of methylamphetamine has been very low in the United Kingdom. Nevertheless, there are sound reasons for this proposal to reclassify the drug to class A. Relative harmfulness is central to our drug classification system. Our drugs laws should accurately reflect the relative harmfulness of drugs, when they are misused, both to the individual and to society at large.

The Committee will know that the drug classification system under the Misuse of Drugs Act has come under very close scrutiny recently. The Government believe that the current three-tier system is fit for its fundamental purpose of providing a framework within which criminal penalties are set with reference to the harm caused by a drug and the type of illegal activity undertaken in regard to that drug.

The system allows for clear and meaningful distinctions to be made between drugs. There is a wide understanding that class A drugs are the most dangerous substances and therefore carry the heaviest criminal penalties, while class C drugs, although still harmful, are not of the same order. It is this coherent system which has stood the test of time and which, for so long as it remains, we now propose to reapply to methylamphetamine. The action that we are taking to reclassify methylamphetamine is a good example of a fully functioning system where we are revisiting a drug’s classification in light of new evidence.

In the case of methylamphetamine, we have to decide how to respond to a drug that can be misused and can cause serious social problems, but has no significant prevalence in the United Kingdom at present. It is this potential for harm rather than methylamphetamine’s current prevalence here that is central to the proposal to reclassify the drug toclass A.

Methylamphetamine’s harmfulness equates to that of other class A substances, both at the level of the individual and of society more widely. It is a derivative of amphetamine, which is a class B drug, but it is much more potent than other forms of the drug, with the potential for greater physical and psychological harm. It can quickly become highly addictive. Its reclassification to a class A drug will accurately reflect this relative harmfulness.

International experience documents the devastating impact of widespread misuse of methylamphetamine on society and the environment. Its use can increase risky sexual behaviour, thereby increasing the risk of blood-borne virus transmission; and it is a risk factor for aggression and violence, as well as acquisitive crime. Also, methylamphetamine manufacture exposes individuals and the environment to flammable and hazardous chemicals and production methods and to toxic waste by-products.

In its report published in November 2005, the Advisory Council on the Misuse of Drugs considered that, based on the then current situation in the United Kingdom, it would be inappropriate to reclassify methylamphetamine as a class A drug. Instead, the council recommended the development of an effective early warning system to monitor any shifts in the patterns of prevalence of methylamphetamine in the United Kingdom. The council’s report is accessible from the Home Office website.

In May this year, the council reviewed its decision in the light of further evidence and recommended that methylamphetamine be reclassified as a class A drug. Again, the council’s advice is available on the Home Office website. The prevalence of the drug in the United Kingdom continued to remain low, but the council was persuaded by the harmfulness of methylamphetamine and the international experience of the serious social problems caused by methylamphetamine misuse, as well as by intelligence provided by the Association of Chief Police Officers, which fully supports the reclassification of methylamphetamine to class A.

If the order is approved by both Housesand is signed in Privy Council when it meets on14 December, it will come into force five weeks after it has been made to allow sufficient time to advise the police, the courts and other interested bodies that methylamphetamine will be the subject of control as a class A drug. That would result in a commencement date of 18 January 2007.

The maximum penalty for unauthorised production, importation and supply of methylamphetamine as a class A drug will be life imprisonment and/or a fine. The maximum sentence for the offence of possession of methylamphetamine will be seven years’ imprisonment and/or a fine.

Reclassification to a class A drug will be a key element in the prevention of a significant escalation in the illicit use of methylamphetamine and the social problems that it could cause. It will provide a platform for greater enforcement activity, enabling the police to close premises where methylamphetamine drugs are being used, sold or manufactured, as they currently do with “crack houses”, under the Anti-social Behaviour Act 2003. This police power of closure is for class A drugs only. In particular, as a class A drug, methylamphetamine will be an explicit priority for the Serious Organised Crime Agency, which will direct its resources and enforcement activities accordingly. We are also implementing key recommendations of the Advisory Council on the Misuse of Drugs’ report around an early warning system to monitor prevalence.

Methylamphetamine’s main precursor chemicals—ephedrine and pseudoephedrine—are already listed as controlled precursors under European legislation, and we have now reached agreement on placing red phosphorus on the EU voluntary monitoring list that checks for suspicious transactions in chemicals. We are exploring ways to take a more robust response, but it must be remembered that these substances also have legitimate industrial uses, so it not simply a case of halting their supply. We are also taking steps to ensure that national survey data differentiate between methylamphetamine and amphetamines, which will assist in our monitoring of prevalence.

The Government will publicise the change in the law with regard to methylamphetamine through a Home Office circular and through the Talk toFrank and websites. Reference to the law change and health risks relating to methylamphetamine will be included in future government educational materials for young people.

This measure is very much in line with the Government’s commitment to cause maximum disruption to drug markets and thus protect young people from the harms of being exposed to dangerous drugs. For those reasons, I commend the proposed change. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Misuse of Drugs Act 1971 (Amendment) Order 2006 [35th Report from the Joint Committee].—(Lord Bassam of Brighton.)

I support the order, which reclassifies methylamphetamine as a class A drug instead of the lower class B. It seems to us to be an appropriate measure, given the growing concern about the effect of the misuse of the drug, particularly in its crystalline form. The Minister was right to point out that there is an appropriate use of the drug for medicinal purposes under carefully controlled circumstances. The other part of the process is that precursors may be involved that have industrial uses. There may well be proper use of either component parts, precursors or the drug itself.

Like other amphetamines, methylamphetamine is a drug that affects the brain reward pathways, and its use can lead to the need to take more to achieve the same effects. It can lead to both psychological and physical dependence. Using the drug by intravenous injection or by smoking is particularly liable to lead to such an addiction. I understand that smoking the purer crystalline form, also known as “crystal meth” or “ice”, produces a very intense rush, similar to that produced by crack cocaine but longer lasting, for between four and 12 hours. It is highly reinforcing and can quickly become addictive. The greater potency of the “ice” form, particularly when smoked, makes it a greater threat than other forms of methylamphetamine.

Methylamphetamine-induced psychosis has been widely reported in other countries where misuse is almost epidemic, so it is absolutely right that the Government should bring forward the order as a preventive measure at this stage. That in itself produces one or two difficulties for proper control. As crystal meth is considered to be more potent and harmful than speed and other class B drugs, it is appropriate to reclassify it as class A. As the Minister said, the penalty will change. Maximum imprisonment for possession will be seven years instead of five, and for supply it will be life imprisonment instead of the current 14 years.

The main issue then must be how the Government take steps to ensure that the change is known about by those who might be sucked into the process of taking the drugs or who are already doing so. The Minister said that there will be an input into future educational material. How soon will that information be in schools? I am trying to avoid the use of the phrase “come on stream”. Obviously, while there is not an epidemic of misuse here now, one wants to make sure that proper signals and deterrents are given out very rapidly. Will the Minister give us a bit more of an idea of what steps the Government will take to do that? Above all, it remains important that treatment, advice and support are available for those who want to avoid taking illegal drugs or to cease taking them. We support the order.

I support much of what the noble Baroness, Lady Anelay, has said. We have no doubt on the basis of scientific and other evidence that methylamphetamine can, if misused, cause serious harm. However, there is a disagreement between the Minister’s remarks on classification and our position on it. We support the reclassification of this particular drug, but one has to bear in mind the fact that we are stuck at present with the A, B, C system of classification. Often there have been confused signals coming from the Home Office and the police.

I cite the recommendations and comments in the Commons Science and Technology Committee report from 18 July, Drug classification: making a hash of it? The report said:

“With respect to the ABC classification system, we have identified significant anomalies in the classification of individual drugs and a regrettable lack of consistency in the rationale used to make classification decisions. In addition, we have expressed concern at the Government’s proclivity for using the classification system as a means of ‘sending out signals’ to potential users and society at large—it is at odds with the stated objective of classifying drugs on the basis of harm and the Government has not made any attempt to develop an evidence base on which to draw in determining the ‘signal’ being sent out”.

For this reason, it would be very helpful if the Minister could once again look at whether the classification system is appropriate.

I am grateful to the noble Baroness, Lady Anelay, for her support and to the noble Lord, Lord Dholakia, for his. I am grateful, too, for the terms in which the noble Baroness in particular expressed her support. Clearly, there is an understanding across the political divide of the importance of reclassification in terms of the activity that it would unlock for enforcement purposes. It would enable the police, for instance, to ensure that they are well placed to stifle any emerging threat from the drug. It would enable them to attack crack houses much more precisely and enable us to ensure that there is much more knowledge about the damage that methylamphetamine can do.

The noble Baroness asked about educational work and information. As soon as we have approved the orders, the Talk to Frank website will immediately have information posted on it. As I understand it, we are also preparing educational materials to distribute. These must obviously be targeted at the younger generation, which is most likely to be where the problem will be experienced. We are ensuring that materials are distributed widely, particularly to schools; I understand that the Talk to Frank campaign has already produced two information leaflets that will provide more details of the impact of methylamphetamine, both in its powder form and in its crystal form. It is also the case that the reclassification debate has itself resulted in significant media coverage about the dangers of the drug. We need to work more on that. Material will be provided for schools, and those doing particular information campaigns will support us in that effort. We will, of course, ensure that the agencies of law and order properly understand the impact of reclassification.

The noble Lord, Lord Dholakia, asked about classification. The best that I can say is that in classification we try to ensure that a mix of medical and social harms is understood in the reports that are prepared. We integrate that into the way in which the classification system works through the advice that we receive from the Advisory Council on the Misuse of Drugs. Obviously, at all times there will be debateand disagreement about the appropriateness of the classification of some individual drugs, but it isthe Government’s clear view and the clear position of the advisory council that the classification system is evidence-based.

I contend ultimately that the classification system works well, is effective and provides a readily understandable framework on which the harm of substances can be indicated and on which appropriate criminal sanctions for possession and supply of particular substances can be based. In those terms, there will be common agreement that it serves a useful purpose. However, it is only one part of the Government’s wider drugs strategy. The advice that we have from practitioners in the field—and I agree with it—is that a review of the classification system at this time would add very little value to the work that those practitioners undertake and could in some ways operate as a distraction. Their focus must be on tackling the problems caused by drugs; improving the quality of information; ensuring that we crack down on dealers; and making sure that those who come into contact with law enforcement also get access to treatment, because in the end that is the best solution. It is about getting people out of drug-abusing habits and ensuring that they get the appropriate medical and social support.

On Question, Motion agreed to.

There is a Division in the House. We will start the Unstarred Question in10 minutes.

[The Sitting was suspended for a Division in the House from 5.27 to 5.37 pm.]

Museums and Galleries

rose to ask Her Majesty’s Government what plans they have to improve support for public museums and galleries to enable them to make new acquisitions for their collections.

The noble Lord said: Our current collections are facing significant difficulties in making new acquisitions. I am advised by The Art Fund and leading museum directors that, in real terms, the public funding devoted to acquisitions in 2004-05, including lottery funding, was worth only 13 per cent of that available in 1980-81. The Tate’s budget for acquisitions is smaller now in cash terms than it was 20 years ago. The V&A now has £200,000 per year for collecting, whereas its purchase grant in 1992 was £1.78 million.

The Art Fund tells us that 70 per cent of the 1,800 registered museums now acquire objects mainly or solely by gift—they are passively acquiring rather than actively collecting—and 60 per cent allocate no funds at all for adding to their collections. Time does not permit me to recite the sad litany of pre-eminent items that have been sold into private hands or abroad—the ones that got away—nor will I recite the notable successes in acquisition; the facts are well known to your Lordships. I will just say that, in case after case of success, The Art Fund—a private charity—has contributed funds, including for the purchase of contemporary items. The Art Fund is to our cultural life as the RNLI is to our maritime life.

Why is it so important that our museums and galleries should continue to collect? There are four reasons. The entry of a new item into a collection is like a shot of adrenalin: it stimulates, excites and energises. Curators who collect look with fresheyes and imagination; collecting prompts new interpretation. Public collections reflect our senses of local and national identity and contribute to developing them. They recall to us our history and heritage and they should express the changing nature of our society and the mix of cultural influences, whereby it is renewed. We should be as intensely concerned to promote social cohesion through cultural policy as we are through educational policy.

We are one of the world’s leading creative economies. If we are to remain so, students of art and design, and consumers, need to see examples of the best that is being created in Britain and across the world. We desire still to conduct ourselves as a beneficent force in the world. Museum collections that hold a mirror up to the world will help us to understand with due sensitivity the world with which we engage.

What is to be done? What should the policy be? I suggest that there are three separate although interrelated issues: regional collecting, the active collecting of contemporary art and the important heritage items.

In relation to the current inability of so many local museums to collect, the Heritage Lottery Fund has just now come forward with an important contribution: a new fund of £3 million dedicated to supporting acquisitions. Some of the money is to be used for training to develop among museum staff the skills to collect, and the Museums, Libraries and Archives Council will also contribute assistance with this training.

This initiative demonstrates the continuing and thoughtful commitment of the Heritage Lottery Fund, amid all the other pressures and expectations placed on it, to support for acquisitions. The limitation inherent in the HLF’s terms of reference is that the fund can be used only to acquire items at least 10 years old. I would therefore propose that the Arts Council lottery fund should step in with an equivalent new scheme. It could indeed revive the excellent scheme that it ran jointly with the Contemporary Art Society.

I should like to ask the Government to take the opportunity of the legislation stemming from the new White Paper on local government to create a statutory duty on local authorities to support their museums and galleries and, indeed, the arts and heritage more broadly. As we have seen with libraries, a statutory duty alone does not do the trick, so I would also ask the Government to introduce a cultural component to the revenue support grant system. Without this, it is hard to foresee that the funding will ever be in place to support the proper formation of curatorial staffs with the skills and the margin to develop local collections.

There is then the question of how our major regional and national museums are to be able to acquire items that would significantly enhance their collections. These include the items that the reviewing committee judges meet the Waverley criteria. They also include important contemporary or near contemporary items which it is part of the formal remit of some museums—the Science Museum, the V&A and the Tate—to collect.

The largest single source of funding for museum acquisitions is the Government’s acceptance in lieu scheme—one among a number of important tax concessions that the Government make available. In the year to March 2006, 38 items with a value of £25.2 million were accepted for the nation in lieu of inheritance tax. In consequence, a great variety of beautiful things went to a great diversity of places. There is one enhancement of the AIL scheme which I particularly hope the Treasury will be willing to consider. Recommendation 27 of the Goodison review is that owners of pre-eminent objects should be able to submit them during their lifetime for acceptance in lieu against tax on their future estate, and that the objects could remain with their ex-owners by agreement with the museum into whose ownership they pass.

The other new tax relief I would request—and I sought this when I was Minister—is Goodison’s recommendation 34: that donors should be allowed to offset the gross value of pre-eminent works of art against income tax, as is the case in the United States, Canada, Ireland and Australia. The Labour Party’s manifesto committed the Government to find new ways to encourage philanthropy in the cultural field, so I am hopeful.

Assisted by these reforms, museums and galleries would be able to step up yet further their own fundraising. It is perhaps not yet axiomatic on this side of the Atlantic that trustees have a duty to bring in substantial funds. When Ministers appoint trustees, they will of course continue to look for a spread of skills, but among trustees surely there should be some whose main job is, frankly, to fundraise. It would cost the Government nothing to be quickly forthcoming in their recognition, through the honours system, of benefactors of our public collections.

I will not call upon the Government in present circumstances to increase grant in aid. As the Minister for the Arts noted with legitimate pride in the Commons debate on 11 October, spending by DCMS on its sponsored museums and galleries has increased in real terms by 16 per cent since 1997. I confine myself to imploring the Government not to cut their grant funding to museums and galleries. We are given to understand that bodies funded by DCMS are being advised to plan for 7 per cent cuts. Given the general good health of the economy, given that the culture budget of the DCMS is so tiny within the totality of public expenditure, and given the havoc that would be caused by 7 per cent cuts and the uproar that would follow, I hope that the Treasury will spare these budgets.

The only request for an uplift in central government spending that I would make is that, over the planning period, the Chancellor should go further in replenishing the National Heritage Memorial Fund. Following the establishment of the National Lottery, even though the Government had promised that lottery funding would be additional to public expenditure, grant in aid to the NHMF was cut from £12 million in 1993 to £2 million in 1998. The Government have already done much to make amends. Grant in aid has been increased to £5 million and the Chancellor has promised to increase it again to £10 million next year. If he would set us on a clear path to raise it to £20 million, that, together with other resources, would enable our public collections to secure the acquisition of a good proportion of the pre-eminent objects that come on the market. To replenish the NHMF would be seemly. This memorial fund was created to honour the memory of those who have died for their country. That should include those who have lost their lives in hostilities in Iraq and Afghanistan.

The one component of the overall problem that would remain would be that very small number of supreme works of art that from time to time are put up for sale but there are compelling reasons to ensure they are secured for one of our public collections. A case in point at the moment is the Halifax Titian, “Portrait of a Man”. This picture may fetch £80 million, and the National Gallery has concluded that it cannot make an offer for it.

I would like to propose that a modern version of the Paramount List should be drawn up, with a similar agreement to that which the Treasury first made in 1922. In 1922 the chairman of the trustees of the National Gallery, Lord Lansdowne, wrote to the Treasury to say that the trustees,

“feel very strongly that a certain limited number of works of art, less than a dozen in all, at present in private possession in England, are of such international importance, that they deserve special and separate provision to be made for their retention here … The prices at present paid for such works may appear large to the unthinking, but viewed from the standpoint of History and of National repute they are infinitesimal … their retention, for the Nation which possesses them is not only a duty but an economy. Their retention is also a thoroughly democratic measure. Our Galleries and Museums, apart from their international significance, exist for the poorer members of the community … the Trustees … do now definitely ask the Treasury to guarantee them direct financial assistance if and when any of the few works of vital importance come upon the market, so that they may be preserved for the Nation. The total sum required would be infinitesimal compared with those with which the Lords Commissioners have habitually to deal … Also the payment of this amount would presumably be spread over a good many years”.

The Treasury considered the case and concluded that, if the sums in question represented the reasonable value of the pictures, this was a proper thing to do. The Chancellor, Sir Robert Horne, announced the Government’s commitment to support, at uncertain dates in the future, the retention in the United Kingdom of the pictures on the list.

The agreement held. In 1924, Ramsay MacDonald wrote to the chairman to say that the new Government would “readily” renew the undertaking. Four out of the seven items on the original list were in due course acquired by the National Gallery. Another on the list, which did not pass into National Gallery ownership but instead came to the National Gallery on long-term loan was the Halifax Titian, now removed from the National Gallery’s walls to be put up for sale.

As late as 1972, a special Exchequer grant was given to enable the National Gallery to purchase one of the pictures on the original Paramount List, Titian’s “The Death of Actaeon”. The history of Exchequer grants goes back to the earliest years of the National Gallery. Since the creation of the NHMF in 1980, however, the Government’s line has been that Exchequer grants would no longer be necessary. This has not been the view of the Scottish Executive, which in recent years has provided grants to make possible the purchase by Scottish institutions of a Botticelli, a Titian and the John Murray Archive. While a replenished NHMF would indeed obviate the need for an Exchequer grant in all but a few cases, a special grant is needed if we are to restore such an item as the Halifax Titian to the walls of the National Gallery. The cost of a picture of this importance is simply beyond the scope of the NHMF, the HLF and all the efforts of which the system is ordinarily capable. However, a sum even of £80 million is, I submit, affordable. Such a figure is within the margin of error of national accounting. We are the world’s fifth largest economy.

A modern list of perhaps 12 or 15 paramount items in all cultural fields should be drawn up by those best qualified to judge what they should be; realistic valuations, though difficult to determine in the nature of the case, should be made; this Government and Parliament, like their predecessors, should commit themselves to supply these funds as occasion in due course demands.

I believe we need to do these things to secure the continuing vitality of our museums and galleries, for our national self-respect and to present ourselves confidently to the world. I would hope that all parties could agree on what is to be done.

I congratulate the noble Lord, Lord Howarth, on securing this debate. In my brief contribution, I first declare an interest as chairman of the Association of Leading Visitor Attractions. To become a member, one needs to obtain a million visitors a year. I have been chairman since 1990. Today we have 40 members, 16 of which are major galleries and museums.

As the noble Lord said, there is clearly a major problem with a substantially increasing number of wealthy national and international collectors and the downward pressure on budgets, to which the noble Lord referred. He gave some national examples. I should add that the National Portrait Gallery can now put aside for acquisitions only about £305,000 out of a turnover of £11 million. The Imperial War Museum can allocate only £125,000 annually to acquisitions, which may be less than the value of a single set of medals at auction.

I wish particularly to draw attention to the position of regional museums. Clearly, they have problems as there are far fewer private major charitable foundations in the regions and relatively few major plcs and national bodies have their headquarters there. Tyne and Wear museums tried to buy Turner’s “Dark Rigi” painting, which had been hanging in the Laing Art Gallery, Newcastle, but in the end it went for £2.7 million at auction, which was way outside its resources. National Museums Liverpool saw its annual acquisitions budget fall to £50,000 by 2001. It managed to lift it back to a quarter of a million pounds last year but fears that the budgetary cuts being mooted by the Treasury during the coming CSR round—as referred to by the noble Lord—will impinge on even that small figure.

Finally, the Museum of Science and Industry in Manchester, which I had the privilege to chair for nine years, has only the fund for the Preservation of Industrial and Scientific Material (PRISM), administered by the Museums, Libraries and Archives Council, to call on, which itself has very limited surplus funds to provide for new acquisitions. The museum is finding it increasingly difficult to add to its collection. An item of local importance, a Model T Ford made in Trafford Park, has come up for sale and the museum needs to find only £15,000 to £30,000 to buy it, but it is experiencing real problems in doing so. Those problems are being experienced regionally and nationally. I fully support the points that the noble Lord made.

I begin by declaring my interests as director of the Clore Leadership Programme and chairman of the London Cultural Consortium and the Wordsworth Trust. I warmly congratulate my noble friend Lord Howarth on securing this debate and on his excellent speech, which was only to be expected from someone who served with great distinction as Minister for the Arts when I was Secretary of State.

He has highlighted, rightly, the serious difficulty that museums and galleries throughout the country have in being able to have any sort of acquisition policy. That is obviously of particular relevance to those collectors of modern and contemporary art, who, in order to maintain the contemporary nature of their collections, have to be able to continue to refresh them. It is also important for those museums and galleries that remain the great storehouses of the past. These are the places where our identity as a nation and as community is kept, stored and made available for understanding and cherishing by all of us. When particularly important works of art or objects become available, it is important that these museums and galleries can add to their collections.

A number of helpful developments have taken place over the course of the past eight or nine years. The changes that we were able to make in the acceptance in lieu procedures in 1998 have transformed the way in which acceptance in lieu has been able to be used. The Heritage Lottery Fund has done sterling work over the years in assisting museums and galleries with acquisitions. The Art Fund continues to play an absolutely invaluable role. But there is a need to look at how we can solve this very real problem for museums and galleries—and my noble friend identified a number of them.

I particularly draw attention to the proposal that acceptance in lieu could be brought forward so that it could be triggered while the owner of a work is still alive, rather than simply being able to be prayed in aid when they have died. That would make a very real difference. It is a proposal that a number of us have made to the Exchequer in the past couple of years in relation to papers and manuscripts of contemporary writers. Exactly the same principle applies to the works of art that are held by collectors.

On the subject of manuscripts and papers of our living writers, which are important items for many of our major collections, one very small change could make a huge difference. At the moment, VAT is not paid by an acquiring institution if a manuscript or collection of manuscripts is in bound form; it classifies itself as a book and is therefore free of VAT. If it is in unbound form and the papers are loose, VAT has to be paid on them. That is an absurdity, which could easily be solved at a stroke by the Chancellor.

All this has also to be seen in the context of the overall funding for museums, galleries and the arts in general. My noble friend rightly identified the anxiety across the whole field of the arts, culture and museums and galleries about the forthcoming spending review. If one looks at what this Government have achieved on arts, culture and museums over the course of the past nine and a half years, one finds that the record is outstanding. The increases in investment made available, the opening up of free admission, the rejuvenation of large parts of the cultural life of this country constitutes a huge success story. It has been driven by substantial investment by the Exchequer into this part of the Government’s purview. It would be a tragedy if all of that were now to come to a juddering halt. If we are facing either cash standstills in funding or, even worse, percentage cuts in funding for the arts, culture and museums in this country at the next spending review, not only will our cultural life be impoverished but the Government’s proud record of what has been achieved will be severely diminished. I do not want to see that happen.

None of us is asking for the moon. All we need from the Chancellor is current funding plus an element of inflation. If we were able to achieve that, our museums, galleries and performing arts could all continue to flourish. I hope that the message will go out loud and clear to the Chancellor that that is important. Within that, it will be important for museums and galleries to be able to maintain, refresh and develop their collections, and to keep these important storehouses for the benefit of us all.

I join the other speakers in congratulating my noble friend Lord Howarth on calling this debate, and on covering the waterfront so well that I have spent a lot of time cutting and slashing my own speech. It was cut and slashed even more after my noble friend Lord Smith got cracking. It will be a bit shorter, noble Lords will be relieved to hear.

To start with a digression, the biggest acquisition of British galleries and museums over the past10 years has been the number of visitors. It has been extraordinary, as all who go there know. Despite the bumps and ups and downs, which have been clearly detailed, they pour in, in quite unprecedented numbers, from many classes of our society and many age groups which did not go there before. That has been a magnificent acquisition.

Secondly, not as importantly but quite interestingly, instead of being something you have to go to—trailed in in navy blue raincoats on wet Wednesday afternoons—museums and galleries have become a place of buzz and style. They have becomea focus for cities—not only London; I think particularly of Newcastle—wherever you go. That has been a great acquisition to our life. I am bending the word a little, but not too much.

I speak here both as a Member of this House and as the president of the National Campaign for the Arts, which noble Lords will know is an independent body. It did research in response to the DCMS’s committee inquiry, Caring for Our Collections. Researching right across the country, it came up with some real problems, some of which have been enumerated. I shall rapidly go over them; they came from a big poll that it conducted. All over the place, core funding has not increased with inflation. There are warnings of further cuts, which is detrimental to staffing levels, expertise, maintenance, research and,à nos moutons, to acquisitions.

Acquisition budgets have fallen dramatically. The Art Fund survey shows that 96 per cent of museums say that inadequate core funding is a barrier to further collecting, and 60 per cent say that they were unable to allocate any money for acquisitions over the past year. That is a serious problem. I agree with my noble friend Lord Smith that the nub of this debate is that growth and regeneration come through acquisitions. That is the MacGuffin in this story. Further, the NCA report says that the UK lacks adequate tax incentives to promote significant philanthropic donations of artworks to the nation at a higher level. I agree with the noble Lord, Lord Lee, that many regional museums are finding their funding being cut because of the low priority given to them by their local government. They are in a great deal of trouble.

So, what is to be done? On the one hand, we have a party in government which has proved itself—since 1945, if you take the longer term—to be sympathetic to the arts, consistently advancing its funding, not least under the guidance of my noble friend Lord Smith. For the remainder of my few minutes, however, I shall concentrate on the nub of the matter: the great spiralling of costs in the market.

We are having a great springtime for collectors and sellers of works of art—or perhaps I should say Christmas every day of the week—not only at the high end of £80 million but all over the place. It is happening right across high art, middle art and domestic art; prices have gone up and up. Art is now seen by some people as a wonderful hedge fund. Perhaps it is a south sea bubble—who knows? What is happening now is not unlike the way in which the Russians and certain persons from the City of London are inflating property prices and affecting property prices throughout the realm.

Should the Government chase these prices and in so doing fan the flames and become a player in the great auction or casino that we have at present? Might it not be thought better to let the private sector run riot for a while? After all, it could be argued, most museums and galleries at the moment are pretty well stocked; some of them are bulging. To transfer a quotation from Philip Larkin, “no one actually starves”. After all, this could be a blip—a real south sea bubble that bursts—and the gamblers will be burnt and the meek and prudent will inherit the works and inherit the earth, and that would be very satisfactory. After all, some private collectors—Peggy Guggenheim comes to mind, but also the noble Lord, Lord Lloyd-Webber, who is going to donate his collection to the nation—have built up their collections privately to give to the nation for the public to see later. Is that not the building up of private initiatives, and is that not useful? Is it not a way forward? The cry may go up, “Does the state have to provide all the time and in every case?”

Perhaps it is a good time to let the private sector rip. Our museums and galleries over the centuries have benefited massively from the private sector being let rip and ripping off stuff from all over Europe and many parts of the world, then going straight and turning it in to places where people can view these works freely. The stately homes of England are full of such works, which are of great benefit to us all.

The solutions have been proposed well by the noble Lords, Lord Smith and Lord Howarth: clear, effective tax interventions and money given in lieu. But if the Treasury is disinclined to do that and disinclined to join the overheated auction room game, and if it considers that the arts should be made more able to stand alone, those in the arts must prove their case—in detail, as I think has been proved already, and in general terms. Despite the expansion of the arts in the UK in the past decades, despite unchallengeable arguments about the particular and overall benefits for a better life, for internal wealth and the pursuit of happiness, and despite the iconic status of the UK and the art world and its target destination as a tourist centre—and we can just imagine what it will be like when people from China and the rest of Asia begin to target us—we have still not been able fully to convince the powers that be that while all art might be, as Oscar Wilde said, “quite useless”, the arts have become a necessary and important economic and cultural part of our society.

So what can we do? Either we can encourage the Chancellor to have a coup de foudre and meet his muse in the arts or—although it appears uncommonly difficult to do this—those of us in this debate and around the arts can continue to try to persuade the powers that be that the arts contribute more and more to this country. The contribution of the arts has increased, is increasing and will not diminish. The men and women in Whitehall do not necessarily know better than the rest of us.

Those who know about the state of our museums, both national and local, know the truth of what the noble Lord, Lord Howarth, told us in his opening remarks, which has been underlined by subsequent speakers. The role of museums, as a kind of bridging between education, both formal and informal, giving pleasure to domestic British citizens and to those from aboard and as a national resource in a world where intellectual property will be the driver of the future wealth creation our country needs, is in peril.

I shall focus my few comments on the problems this crisis poses for the system of export control of works of art and cultural interest in this country, overseen by the Reviewing Committee on the Export of Works of Art, which I have the great good fortune, pleasure and honour to chair. This, we understand, provides a vignette, which throws light on the wider problem.

The reviewing committee arose from the work of the Waverly committee, set up by Stafford Cripps, Chancellor in 1950, and reported two years later to RA Butler in the ensuing Conservative Government. It addressed the implications of the exodus of items of cultural and historic interest and value from our country, and to advise what should be done about it. Of the committee’s members, all but one have separate entries in the Oxford Dictionary of National Biography; the odd one out being Ruth Dalton, who appears under her husband’s. They produced recommendations which have been the basis of government policy, regardless of party, ever since. The system they devised, while it could be criticised by the intellectually rigorous as illogical, cleverly balances the interests of owners, the art trade and museums, all of which matter to this country, in a manner generally considered fair, even handed and workable. As such, it is generally accepted by all affected by it. In short, the members of the Waverley committee displayed great wisdom.

The system depends on the regular work of the committee itself, which determines whether items seeking an export licence are of such a high quality that they meet the rigorous definitions of national treasure which, in turn, precipitates a time-limited right of pre-emption by a possible UK purchaser if the market price is matched and certain other requirements are met. In addition, the committee also prepares an annual report for the Secretary of State on the workings of the system of export control, which is, inter alia, always placed in the Libraries of both Houses.

Central to the system is that if an item meets the rigorous definition, it cannot be exported if a UK purchaser comes forward. In practice, this means that of about 40,000 items subject to export licences, somewhere between 20 and 40 will meet the test. While it does not necessarily automatically follow that all items meeting the criteria should not be exported, a failure to stop more than a handful represents, it seems to us, a systemic failure. On a year-by-year basis, the figures fluctuate but, over the past decade taken as a whole, something like just over 60 per cent of export-stopped items, taken by value, end up leaving this country. We believe that is a failure, and that a 60-plus per cent failure represents a systemic failure, be it in the health service, the education system or, equally, in this area.

In money terms, the cost of turning failure into success is, as a number of other speakers have said,de minimis: in our context, at current prices, I would have thought about £25 million a year. I suppose that sounds quite a lot. Think of what footballers earn, however—one was reported in the paper last week as earning £100,000 a week—or what houses down the road from here might cost, or the cost of hospital equipment or military hardware. After all, despite the caveat of the noble Lord, Lord Bragg, it also represents an expenditure where capital growth is more or less guaranteed.

In public expenditure terms, it is the equivalent of deciding, when walking down the street, whether to put 50 pence or a pound in the collecting tin for charity. It has nothing to do with budgeting the public finances, any more than petty change in a collecting tin materially affects noble Lords’ personal budgets. It represents less than the figure the Times represented as the cost of removing tattoos by the National Health Service, although I gather that is now disputed. It is about half the amount of money that paper reported a couple of days earlier to be the cost of bungled prosecutions. It pales into complete insignificance compared to the £2 billion Euro-VAT carousel scam.

In return, the monetary value of the investment will be enormous, as a cursory look at back reports of the reviewing committee clearly shows. It is a classic case of policy makers knowing the price of everything and the value of nothing.

What should be done? The reviewing committeeis not partisan. As its chairman, I consider that members vote for all three main political parties. That does not stop us agreeing on the problem. As I have already mentioned, one of our roles is to advise the Secretary of State on the workings of the system. Long before I was ever associated with it, for years the committee had been saying that the system was not working as it should, for the reasons I have given. If it is not working properly, perhaps we are all wasting our time. As one leading UK museum director plaintively said to me recently, “What can I do? You export stop something of the highest quality. I would like it in my museum, where it would be entirely suitably placed. Yet I know from experience that I shall not raise the money. Quite rightly, I have to try. Yet, because it is a slightly unusual item, I know that I am wasting a lot of my, already hard-pressed, staff’s time on a futile quest”. I have every sympathy with him.

I shall not suggest that the Government write out a cheque. We have been around that track already. It could be said, however, that the key is looking at the problems in as many ways as possible. I shall not argue that the Heritage Land Fund or the National Heritage Memorial Fund should be compelled to support respectable applications to acquire all so-called Waverley items. First, their terms of reference do not and probably should not overlap exactly. Secondly, they are already under enormous financial pressure, which looks as though it will get worse, even though their resources are already too small. Nor shall I argue that the National Heritage Memorial Fund should be given the full amount that the National Land Fund was originally allocated, even though it is hard to think of anything more shameful than government conscripting men to the war, and then plundering the fund set up in memory of those who died. It is the kind of thing that private individuals go to prison for, and it is particularly shameful that my party was responsible.

Rather, I shall press two priorities, one of which has already been touched on. First, as was mentioned, Sir Nicholas Goodison pointed out in his report for the Treasury, Securing the Best for Our Museums, the way in which the tax system, which encouraged charitable giving to help museums is not working as it might. The Treasury’s proposition that nothing is required because the existing arrangements have not been taken up appears to overlook the simple fact that the evidence from elsewhere, both inside and outside the English-speaking world, suggests that the existing UK rules and arrangements are not fit for that particular purpose. It is therefore hardly surprising when they do not seem to have the desired effect. They should be made fit for purpose, and we on the committee firmly believe that discussions should be entered into to identify the best ways for delivering what we are today all arguing is in the national interest.

Secondly, the committee has responded to the consultation from the Commission on Unclaimed Assets, arguing that some of the money—there may be an enormous amount—could properly, and should be, put into an acquisition fund. All kinds of lobbies will no doubt have designs on this money, but to allocate some to remedy this failure in contemporary Britain seems entirely proper. We have advised the Secretary of State of our response, and look forward to her—

Do I stop or go on?

My peroration has been severed, but I shall come back.

[The Sitting was suspended for a Division in the House from 6.18 to 6.28 pm.]

Before we stopped, I was explaining that the reviewing committee has responded to the Commission for Unclaimed Assets, arguing that a fund for acquisitions would be an appropriate use for at least some of the money. We have advised the Secretary of State of our response, and look forward to her support in our endeavours to take forward the best interests of her department and the wider public interest.

Thus far, I have presented our concerns as a failure. It is more than that; it is a tragedy. For the sake of a ha’p’orth of tar, the ship is being lost. For the sake of arranging things right, we are losing objects of enduring value to people now, in the past and, most important, far into the future when, to misquote Kipling, the vanished pomps of here today will be as one with Nineveh and Tyre. We are making the same mistake as the city fathers in Beijing who demolished the hutongs in the dash for immediate economic growth and so-called progress. As night follows day, they will regret it.

The folly of this approach can be seen so clearly on the London Underground today. As you look around, you see a reproduction of the Rokeby Venus, advertising the blockbuster Velasquez show at the National Gallery, which the cultural pages of the press have hailed as a “must-see item”, “the show of the year” and “five star”. We are lucky in London. We can see the Rokeby Venus, as opposed to many of the other pictures in the show, almost every day in the National Gallery because, in its early days, it was saved from export by the then-National Art Collections Fund. The philistines, the bean-counters, the Mr Gradgrinds and the Alderman Foodbottoms and Colonel Sibthorps all decried the cost of this frivolous extravagance, but what goes round comes round. It was cheap at the price. The best is always cheap, always endures, is always on the cutting edge, always pays the best dividends and provides the best value for money to our fellow citizens and taxpayers.

I thank my noble friend for bringing about this debate. The All-Party Parliamentary Arts and Heritage Group has done much to bring the attention of Parliament to arts and culture, and it provides a useful link between them. The group came into being in 1975-76 when the Treasury introduced inheritance tax, which would have forced historic houses and their contents to be sold, and their importance to our history and culture would be lost. Fortunately, Sir Patrick Cormack in another place conducted an impressive campaign and, in the Treasury, I was pleased to support him. The campaign resulted in the saving of our precious assets—our historic houses and their contents.

The arts and heritage committee has continued for 30 years and brings together both Houses in maintaining contact with our great heritage. I have the privilege to act as president of the committee, but the valuable work of Sir Patrick Cormack as chairman and the noble Lord, Lord Crathorne, who I see in his place, as honorary secretary have maintained the close co-operation between the all-party group and our museums and galleries.

In Britain, we are particularly fortunate to have acquired so large a proportion of great works of art. The 18th century provided many valuable donations, but the 19th century gave us the great collections which we are privileged to enjoy. The danger now is that many works of art being put up for sale are being lost because the museums and galleries do not have the funds to compete with other purchasers, who are frequently from overseas. Many important works of art are in danger of being lost and much needs to be done to meet this trend.

We have some outstanding directors of our museums and galleries, including Neil MacGregor at the British Museum—some people claim it to be the largest museum in the world and it has the Elgin Marbles among other outstanding collections—Charles Saumarez Smith at the National Gallery and Sir Nicholas Serota at the Tate galleries. Additional to these are the famous Victoria & Albert and the Natural History Museum. So we are very well supplied. One weakness is the low salaries which are paid to the curators of our smaller museums and galleries. We are fortunate to have well qualified staff at many of them, but I have a fear of retaining their expertise over the next few years. I must ask my noble friend to comment on that.

One outstanding contribution was the decision by the noble Lord, Lord Smith, who I am delighted to see in his place, when he was Secretary of State at the Department for Culture, Media and Sport, to bring about free entry to galleries and museums. I, like others, had argued strongly for free entry, which came on 1 December 2001. It has had a revolutionary effect on entry—attendances have increased dramatically. When visiting several galleries over this weekend, I was able to compare the number of visitors to those that I can recall. In my teens I visited a number of museums in the Manchester area. In some smaller towns, I frequently found myself alone looking at the paintings and other exhibits. That achievement is a tribute to my noble friend. We now have a vibrant and active audience for the great works of art and even for the most modest displays in smaller towns, which always have important works which are worth examining.

The valuable report, Renaissance in the Regions, which was produced by the committee chaired by my noble friend Lord Evans of Temple Guiting, and on which I served, had the important recommendation on regional hubs, which would provide regional and local assistance to smaller museums and galleries, as well as create centres where museums and galleries can join together for assistance and advice.

What worries me about the Department for Culture, Media and Sport is that in the title “culture” rightly comes first and “sport” last. With the coming of the 2012 Olympics, sport has become a more important part of the work of the department. As a consequence, culture and the arts will not receive as high a priority as in previous years. Since the sports aspect is likely to increase its demand over the years, the position could get worse, which is important. Last Thursday, Sir Patrick Cormack and I met with the chief executive of the Museums, Libraries and Archives Council, Chris Batt. On Wednesday, they will have an afternoon in the Terrace Pavilion when I hope that they will get a good attendance as their national role can be very important in the years ahead. The real problem is that, after valuable help has been given to the arts, progress has not been maintained. We need to continue to appreciate the value of our museums and galleries and to provide the financial assistance which they need to maintain their valuable contribution.

It is a great pleasure to take part in this debate. I agree with everything that the noble Lord, Lord Howarth, said in his excellent opening remarks. It is a particular pleasure to follow the noble Lord, Lord Sheldon, president of the All-Party Parliamentary Arts and Heritage Group. As the noble Lord, Lord Howarth, said, it is very nice to welcome the Heritage Lottery Fund initiative of an investment of £3 million to be allocated in 2007-08. Grants will be available from £50,000 up to a maximum of £200,000. It is envisaged that as many as 20 projects around the UK could be funded from this initiative.

Obviously, much has been covered in this debate. I should like to emphasise one or two things. Members of the Committee have touched on how well served we are in this country by our museum directors and their professional staff who have transformed our great museums in an extraordinary way in the past few years. That has been greatly helped by the lottery. I much enjoyed my time as a Heritage Lottery Fund trustee. As the noble Lord, Lord Bragg, said, people pour into museums now in unprecedented numbers, which is wonderful. I am glad to know that all Members of the Committee get the All-Party Parliamentary Arts and Heritage Group notice—if anyone does not, please see me and I will make sure that you go on the list.

The Committee will have seen from the recent notice that the group goes to exhibitions of quite extraordinary quality—Velasquez, Rodin, Holbein, Leonardo and Hockney. I do not believe that there is anywhere else in the world at this moment where one could put together such a programme. This is wonderful stuff, but it is a different story when it comes to museums and galleries adding to their collections, as we have heard. The noble Lord, Lord Inglewood, made a quite salutary speech. He explained that imposing an export stop does not mean that something is saved for the nation. It is sad to hear the 60 per cent failure rate that he described.

One of the main problems is the vast prices that pictures command. We read press headlines, such as “Mystery Russian pays £51 million for Picasso’s Mistress”. A few years ago no Russian would possibly have paid more than £5,000. There are so many more people now in this international market. No government can be expected to pick up the tab for keeping everything in the country that we would like to keep. However, I hope that there will be some additional help.

Another area which has been touched on, and where I feel that a more imaginative approach would be possible, is tax regimes. In America, private donors are encouraged to give, and it has a very effective tax regime. In this country, a little extra encouragement would mean that a lot more items are given to the country. I am not sure that the Goodison report has been taken on board. As various Members of the Committee have said, there were lots of very good things in that. Perhaps the Minister could look further at the Goodison report. We are talking about government support for museums and galleries. But on looking at galleries over the years and centuries and at how they obtained items, most have come from private donors—not from government at any point. I hope that the tax regime can be looked at further.

When private owners wish to sell high value items for the maximum that they can get, they are quite often depicted as being extremely greedy and it is suggested that they should donate them. When the Duke of Northumberland was criticised because he wanted to sell Raphael’s “Madonna of the Pinks”, his response was, “I am selling this painting to preserve our national heritage”. He meant that he was using the money to preserve a castle, two Grade I listed buildings, 200 Grade 2 listed buildings and a famous collection seen by 100,000 people a year. His outlay on all that is massive. In that case, the picture was saved for the nation by the lottery, but that will not happen very often.

The noble Lord, Lord Howarth, mentioned the 1922 list. Perhaps the Minister will comment on its status because there are very few items on it and it always seems that it should not be left to lie. In fact, the Halifax Titian is on it. It is not always easy to know with certainty what to keep for the country for future generations. I do not suppose that Damien Hirst’s “The Physical Impossibility of Death in the Mind of Someone Living” of 1991, otherwise known as the “Shark in Formaldehyde” would make the list. But that was bought in 1991 for £50,000 and sold 14 years later to America for £6 million, which gives an indication of the problems that there are in keeping up with prices.

Recently, I was sent a card showing people in a contemporary art gallery where one person is scrutinising a red box on the gallery wall. The caption read:

“Dot making a fool of herself in the art gallery by admiring the fire alarm”.

None of us have that problem when looking at a Raphael or a Titian, but there are endless opinions about what should or should not be kept for the nation. I look forward to hearing the Minister’s reply.

I join others in thanking the noble Lord, Lord Howarth, for initiating the debate. It is always good to have a debate about the arts, a subject which is spoken on too rarely. As the noble Lord, Lord Crathorne, mentioned, it comes hot on the heels of the announcement of a new £3 million fund to invest in acquisitions, training for curators and research; something else that is to be welcomed, but, to paraphrase Maev Kennedy of the Guardian, not worth one elegant leather glove of Titian’s “Portrait of a Young Man”, which was until recently on the walls of the National Gallery and is now in a sale room.

The arts, of which museums and galleries are so integral, are a central part of our civic and community life—as others have mentioned—not an optional extra. They give people a place in which they can exercise and enjoy their imagination. They define and bind communities, provide understanding of the world we inhabit and of what makes us human.

Neil MacGregor, director of the British Museum, who recently gave evidence to a House of Commons committee, spoke of how an exhibition at the museum, Building of Durga, has attracted large numbers of Bengalis, both Hindu and Muslim, from across the country. He said that the role of museums,

“in allowing different parts of the community in the United Kingdom to see how they fit together is a role that very few other public institutions can play”.

The opening of the new Islamic Gallery at the V&Ais another example of that. The gallery embraces Islamic culture and welcomes it as important to us collectively. Across the country, through initiatives like these, our museums and galleries are contributing to social cohesion, which is so important in the troubled times in which we live. Thanks to the Government and the noble Lord, Lord Smith, having introduced free admission to DCMS sponsored museums and galleries, many more people are able to benefit from the enlightenment as well as the pleasure that they offer.

Museums and galleries are also clearly an educational resource, and a resource with untapped potential in this area. According to the Museums Association, in areas where the very successful Renaissance in the Regions programme has been fully funded, there has been a 120 per cent increase in attendance by schoolchildren. In the areas where it has not been fully funded, there has been only a20 per cent increase. Only three out of nine regions have at this time received full funding. Why, when the contribution made is so clear, is the funding not forthcoming for the other six?

Then, as the noble Lords, Lord Howarth and Lord Inglewood, mentioned, there is the contribution these wonderful collections make to the creative industries. The V&A calculates that 30 per cent of its visitors are directly involved in the creative arts. Real value nowadays is in design, not manufacture. Values lies in ideas and the creative industries are now a key economic driver, growing twice as fast as the overall economy. Gordon Brown seems to recognise this and has said:

“The Arts sector is not a sideshow, but right at the centre of the economy”.

But despite this it still feels that it is treated as exactly that—a sideshow. Core funding for our museums and galleries, as has been mentioned earlier, has not kept up with inflation, while costs have risen at a rate higher than inflation. The DCMS consultation document Understanding the Future says:

“Collections are at the heart of all that museums do, but they need to remain dynamic resources”.

And yet, acquisition budgets have fallen dramatically. The Art Fund Museum Survey 2006 found that60 per cent of museums,

“were unable to allocate any income to collecting last year”.

Everyone agrees that collections need to remain dynamic, which means that acquisitions have to be,

“at the heart of the mandate of museums”.

The converse of the need to acquire is that there is not enough exhibition space for all that has been acquired over the centuries. Troves of treasure languish in basements, cupboards and behind locked safes.

We welcome the fact that the Museums Association is due to conduct a review of what is referred to as “disposals” and the consequent debate that this has opened up. It is a complicated area because of the risk of loss to the nation’s heritage, and one that should be treated with caution with the proper checks and balances. For decades, there has been a strong presumption in the museums and galleries sector rejecting disposal. However, against the backdrop of the realities of collecting in the21st century, it is a debate that needs to be revisited.

There are fundamental questions to be asked: should collections be there forever? Is it the case that everything in a collection should necessarily have been collected in the first place? Should precious resources be used on conserving objects that are rarely seen? Then there is the question of sales. The recent decision of Bury Council to sell its Lowry, not to enhance the museum collection but to plug a£10 million shortfall in its budget is obviously wrong, but we should consider sales if the money is used to reinvest in collections. The Tate has started talking about selling things from its collection to raise money for future acquisition.

Then there is the question of partnership. The last major acquisition made by the British Museum was made jointly with the museums of Stoke-on-Trent and Carlisle, and is owned by the three collections. That seems extremely sensible. The national collections must also be willing to lend to their regional cousins, which have less power to acquire.

We welcome the increased funding that the arts have received under this Government. The money has proved well spent, but the future does not look so positive. National museums are nervous about the next Comprehensive Spending Review, and I support what the noble Lords, Lord Smith and Lord Howarth, said in their plea to the Chancellor not to impose cuts.

In the introduction to the consultation document that I mentioned earlier, Estelle Morris, then arts Minister, stated:

“Museums are as important to our quality of life as any of the public services”.

And yet that is not how they are treated. The contribution made by galleries and museums to our quality of life in both various and specific ways is not sufficiently taken into account when the question of what they are literally worth is calculated.

I shall quote one important sentence from the Government’s recent manifesto:

“We will explore further ways to encourage philanthropy to boost the quality of our public art collections”.

That was a welcome statement. This debate initiated by the noble Lord, Lord Howarth, is timely because it gives the Minister a chance to respond and tell your Lordships what progress is being made.

I add one word of congratulation—because one should always give the Government credit where it is due—on the introduction of free admission to national museums and galleries. It was an extremely important step, and we congratulate the noble Lord, Lord Smith, for winkling the money out of the Treasury to enable it to be done. It has made an enormous difference, and the numbers of visitors have gone up. It has encouraged overall museum visits to other museums as well. It is a great achievement.

I add one word of caution, however. Under the original scheme, museums and galleries were given an amount of money to take into account what they lost from the admissions. That is now going to be all put in as the allocation of their DCMS funding. We will have to watch very carefully that there are no cuts so that those museums in that position are not penalised by going down that route. Not only have they lost admissions but, due to the increasing number of people, the cost of running the galleries is increasing, too.

The noble Lord, Lord Sheldon, asked the Minister a Question in July about funding, and the Minister gave an interesting answer to a question of my own. He said that the Government would,

“continue to explore options for encouraging philanthropy and are in discussion with the working group on the UK’s literary heritage, chaired by my noble friend Lord Smith of Finsbury”.

He went on to say that there was a meeting. The noble Lord, Lord Smith of Finsbury, did not mention that meeting, which rather concerned me. I worry that the fact that he did not mention it means that progress has not been made—because I am sure that if it had he would have said so. Perhaps the Minister could comment on that. He went on to say that,

“there was a meeting between DCMS and key people and directors in the museums and galleries world where all the concerns that we are talking about today were raised and discussed”.—[Official Report, 24/7/06; col. 1541.]

I think that noble Lords would be interested in what progress has been made.

To be fair, the Minister acknowledged the concerns that exist on funding. He quoted a report from the National Art Collections Fund that argued that,

“92 per cent of museums surveyed felt that there was inadequate funding”.—[Official Report, 24/7/06; col. 1542.]

We all know of the concerns that they have.

I shall try to limit my remarks to what I regard as the collections and how we can ensure that acquisitions continue. There are two routes to go down: there is the National Heritage Memorial Fund, which is the fund of last resort for the nation’s heritage and comes to the rescue by making emergency acquisitions. Because of that it is always under a timetable problem. It is always in a mad panic to try to raise money to stop works of art that have gone through the reviewing committee, chaired by my noble friend Lord Inglewood, going abroad. That is not very satisfactory. An interesting idea was put forward this evening of acceptance in lieu being brought forward into people’s lifetime. It would make life much easier and give the National Heritage Memorial Fund and the museums much more ability to raise the money. That is certainly a sensible idea. I hope that the Government will look at it carefully. As we have heard, the amounts of money are increasing in the art world all the time. There is nothing we can do about that; I suspect that every time a museum has ever bought something over the years, everybody has always said that it has paid too much. That is always going to go on—and in 20 years’ time, if we are still around, we will look back and say how cheap things were at the time.

The other source of funding is the Heritage Lottery Fund, which has funded the National Heritage Memorial Fund and has given some money for acquisitions—but there seems to be a reluctance to do so on the part of that fund. Can the Minister explain that? The Heritage Lottery Fund seems fundamentally reluctant to give money for acquisitions. Is that because of the way it is set up? After all, the Government are responsible for it. The fund is, of course, getting less money as a result of the changes that the Government have made to the National Lottery, because more money is going to the Big Lottery Fund, and that is a concern. The Heritage Lottery Fund funding has come down—and that is something that we would do something about.

We are all concerned about the same things: we are all concerned about the collections in our country, how to add to them and what to do about it. We are all here to give the Minister support in the perpetual fight against the powers that be to improve funding for the arts.

I join all noble Lords in congratulating my noble friend Lord Howarth on securing the debate and on an extraordinarily interesting speech. My noble friend Lord Smith of Finsbury made an absolutely massive contribution to the arts when he was Secretary of State and determined how the arts landscape looks in Britain today.

I should like to start by trying to put our debate into some sort of context. The noble Lord, Lord Lee, made this point. The past 10 years—described by my noble friend Lord Smith as a huge success story—have been remarkable for our cultural life in this country, and for our museums and galleries and their collections in particular.

There is no denying the enormous, and growing, appetite—many noble Lords have made this point—for serious culture in the UK that has developed in recent years. Visitor numbers to our national museums have soared, but, alongside this, economic forces have been at work. We have seen a tremendous rise in the rate of inflation at the high end of the international art market—a point eloquently made by my noble friend Lord Bragg. The very finest pieces are now fetching well into the high millions. And, in the way that these things go, the soaring prices have encouraged a number of owners to place their works on the market. Who can blame them? There was a story in the Sunday Times yesterday—true or false—that the noble Lord, Lord Lloyd-Webber, is going to sell a Picasso in New York, which is expected to raise in the region of £10 million. This has led to very real concerns, which we have heard this evening, about the ability of museums and galleries to keep up with these movements in the marketplace. To compete with the deep coffers of the big international collectors and institutions will be a problem, and we all have to acknowledge that.

Against such a backdrop it will come as no surprise to noble Lords that the Treasury is unwilling simply to throw money at the problem, and, further, that there is no appetite in Government for a free-standing acquisitions fund. This evening we have heard figures like “only £25 million is needed” and “£90 million” for a picture. This sort of rhetoric—and I do not have a political background—is designed to drive Treasury officials crazy. Are noble Lords suggesting that any picture regarded as an important UK treasure that comes on the market should be purchased? I am afraid that we have to get real; that will not happen. It is absolutely essential that museums and galleries make the very most of existing Treasury tax concessions before they move on and try to persuade the Treasury on new ideas for tax relief.

It is a testimony to the self-confidence and sheer energy that surrounds our museums and galleries that this autumn sees what many believe to be the richest array of exhibitions ever seen in the capital—a point made by the noble Lord, Lord Crathorne—of Hockney, Holbein, Velazquez, Michelangelo, Rodin and Cezanne. These riches are not just restricted to the capital; terrific things are happening in the regions. People all over the country have a genuine appetite for serious art. I refer to the huge success of, for example, the Bacon show in Norwich, or public art projects like Anthony Gormley's Angel of the North beside the A1, and the iron men on the sands at Crosby, which enjoy enormous public support and affection. Millions have enjoyed the angel and in just a year 600,000 people have walked across the sands to see the iron men.

So what can, and should, the Government do for the arts? Jennie Lee got it right, I think. In another phrase that has become a little shiny from overuse, but is nonetheless resoundingly true, she said:

“What the arts need from Government is money, policy and silence”.

Let us start with money, particularly for acquisitions, because this is the nub of the debate this evening. It is nearly 15 years since our national museums had ring-fenced acquisition funds. One of the most important principles underpinning this and previous Governments’ approach to museum funding is that one size does not fit all. The best placed people to decide spending priorities are in the museums themselves, not in Whitehall—a point that I believe we all acknowledge. But, as my noble friend knows from first-hand experience, and thanks to his own good campaigning and lobbying, there is a good story to tell on funding overall. DCMS spending on its sponsored museums has increased from £205 million in 1997 to £294 million today—about 16 per cent in real terms. This includes an increase of £28 million in the past four years.

Further afield, £150 million has been invested in the Renaissance in the Regions programme, as we have heard. This is the first-ever sustained programme of central government investment in the infrastructure of our regional museums and galleries. It is putting new life into institutions across the country, reversing generations of underinvestment, and helping to equip the museums’ workforce with the skills it needs to survive in the 21st century.

The National Heritage Memorial Fund has committed more than £135 million to acquiring cultural property, usually a true fund of last resort, since 1980. Its grant from the Government will double from £5 million to £10 million next year. Since its creation in 1994, the National Lottery, through the Heritage Lottery Fund, has awarded grants of more than £1 billion to museums, galleries, libraries and archives in the UK. This includes £141 million to museums and galleries for the acquisition of art and other objects. Only last week, it announced a ring-fenced acquisitions fund of £3 million, which will be targeted at our regional collections. At this point, I join my noble friend Lord Howarth in paying tribute to the Art Fund, under the guidance of David Barrie, for its excellent work in helping museums and galleries all over the country to acquire objects of all kinds. Since its inception in 1903, it has helped to save more than 850,000 works of art, and it manages to offer about £4 million in grants annually to museums and galleries around the UK. That is the first leg of Jennie Lee’s tripod—money.

The Minister has entirelyfairly explained the amounts of money that the Government have made available. I believe that everyone who has participated in this debate supports that unequivocally. At the same time, however, it does not address the core problem; namely, the current crisis in acquisitions. It has been explained to us that going to museums is more and more popular. It follows that providing money for museums and acquisitions would be electorally popular. The Government are faced with the problem of this crisis in the museum sector. How do we resolve that in the future, rather than quite fairly commenting on the successes of the past?

When we talkabout what we will do in the future, it is essential to establish where we are now. My point is that this Government—my Government—have done the most extraordinary things in the past 10 years to contribute to museums, galleries and many other art forms. It is essential that I lay the groundwork before going on to say what we should do about it. The question is, after all, what we should do about it. The noble Viscount, Lord Astor, made a very important point when he said that this is not one political party’s problem but our problem. It is a national problem, and it must be dealt with in an overarching, intelligent and creative way. So that is money.

Policy, of course, is a more elusive creature. The Government believe in the arm’s-length principle, which means, as we have heard, that detailed decisions on individual art forms should be taken not by Government but in the field. The Government do what they can to create the conditions in which culture can flourish. For museums and galleries, this begins with appointing the very best directors, chairmen and trustees. Here we come to a positive point. As chairman of Resource, I spent some considerable time looking at museums and talking to museum directors.

The noble Lord, Lord Howarth, made the important point that some trustees should be appointed if they have entrepreneurial skills. It could be argued that the museum world is too passive. It waits for things to happen rather than making them happen, and it should be more entrepreneurial. The noble Viscount, Lord Astor, too, made an important point about how philanthropists should be encouraged to move into this world, particularly when one compares the situation and the atmosphere in the UK with what happens in America. Such an important change in the direction that museums and galleries take would be of benefit and would help to alleviate some of the problems about which we are talking.

Creating the conditions goes beyond this. The Treasury has created a number of tax reliefs over the years—I urge the noble Lord, Lord Inglewood, not to say that he knows all this; he may do, but there is a sting in the tail—that help private owners to give, and public institutions to receive, important cultural items. There is, for example, a conditional exemption, which allows estates to defer the settlement of inheritance tax bills in exchange for public access to fine works—douceurs, or sweeteners if you prefer, that make private treaty sales of works of art to public institutions more tax effective. Again, I repeat that these opportunities are there, but they are not being exploited to the full. It weakens any argument for further tax concessions and further help from the Treasury if things that are already in place are simply not used.

If experience elsewhere in Europe and around the globe suggests that the detail of the existing tax arrangements are not the most efficacious way of achieving the shared wishes of everyone in this debate, does it not follow that it is right to try to tailor the detail of the mechanisms to deliver what we all want? If they are not working properly now, that may be because they have not been drawn up in the right way.

I would look at this from the other end of the telescope. I would not say that it has not been drawn up in the right way. I am now straying well away from my brief, but I would argue that the museums and galleries have not spoken with one voice, so they have not been an efficient or effective pressure group. I was about to say that there should be one voice that says, “Here is a series of proposals. Will you please react to them?”. At the moment, there are a number of organisations all doing valuable work but all presenting a very diffuse image. That is not a good thing.

The noble Lord, Lord Inglewood, talked about the UK system of export licences, which gives UK institutions a second chance to match the price paid for the very best items before they go overseas. I pay tribute to the noble Lord as chairman of the reviewing committee. I am told that there is ample evidence in the department’s files that the committee has been complaining about insufficient funds to do its work ever since it was founded in 1952. We could argue about whether the bottle is half full or half empty, but I am pleased to say that, last year, more than 50 per cent of the items on which the Government placed a temporary export bar were subsequently saved for the nation. That is on top of the literally hundreds of items that have been saved since the committee was set up in 1952.

I shall now discuss the third part of Jennie Lee’s prescription—silence. I am not sure whether this has ever been part of the approach of this Government or any other Government. I should, however, like to finish with a further word on acquisitions. The problem, which I have already touched on, is in part created by the fact that the international art market is a law unto itself. Indeed, it could be said that it is in some, but happily not all, respects second only to the world of international football—an analogy made by the noble Lord, Lord Inglewood. It is extraordinary that Chelsea, which is top of the league—

Extraordinarily, it declared a loss of £140 million pounds last year. There is irrationality about this world, some of which perhaps applies to the art world, too. Fashion, questions of attribution and provenance, and collectors’ choices all play their part. The way through—I have touched on this—is to begin by making better use of existing tax regimes and mechanisms. Take tax relief, for example. As I have already said, several good concessions are already in place to encourage private and corporate giving, but take-up has not been as wide as we might have expected. The Government are considering ways of addressing this, and I am grateful to the noble Lord, Lord Howarth, for securing this debate today and to all noble Lords for airing these issues once again. The most interesting thing about the debate is that almost everything that has been said has been directed not at me but at the Chancellor of the Exchequer.

The noble Lord, Lord Howarth, has made several very interesting points that will definitely set us thinking. Matters of taxation are, of course, for my right honourable friend the Chancellor of the Exchequer, but I welcome the noble Lord’s helpful suggestions for a number of imaginative ways to increase the resources available to allow museums and galleries to add to their collections. These will certainly be worth exploring further, although I fear that creating a new paramount list would count as unreasonable interference in the art market and in the fundamental right of owners to the free enjoyment of their property, including the right to sell it at the market price. I do not know whether noble Lords are aware of this, but France recently tried to buy a van Gogh from a private collector, arguing that the price reflected France’s inalienability. The owner took France to the European Court of Human Rights; France lost and had to pay four times the price that was originally asked for the picture.

The Minister need not have the fear that he has just expressed. I see no difference in principle between this and the procedures followed by the reviewing committee. In 1922, the Treasury committed itself in the future to providing funds at a reasonable valuation that was made at the time. It did not undertake to chase the art market forever upwards, but it did undertake to support the National Gallery to pay up to what was considered to be a fair valuation at that moment in the history of the art market. It worked; the National Gallery subsequently secured four out of the seven on the original list. I do not think there was any question of an infringement of property rights, as they were understood in those days or, indeed, as they are understood now.

Again, my point relates to huge inflation in the art market. An arrangement might be made with someone in, say, 1920, when there was very little inflation in price over 10, 15 or 20 years. However, I do not think that an owner would be very happy if an arrangement was made to pay £10 million for art that was worth£150 million 20 years later. As I have said, however, we will carefully consider all the ideas that have been expressed today.

It has been a fascinating debate. Many valuable points have been made, and they will be considered, as I have said. I stress again that I have been involved in many aspects of the arts over the years, and the ones that have really worked are where a pressure group or a lobby speaks with one voice. The problem is analysed, and a straightforward solution is proposed that can then be considered.

The noble Lord talks about an industry coming together. The tourism industry has come together, has formed the Tourism Alliance and is speaking with one voice. There is no evidence that it has increased government expenditure or support for the tourist industry.

First, I am not talking about an industry: I am talking about museums and galleries where everyone acknowledges the importance to culture, education and all other contributions that they make. Here is a Government who have invested massively in the arts in the past10 years. I would hope—this view is shared by the noble Lord, Lord Smith, and others—that the Treasury will respond to some of the arguments that we have heard today. In conclusion, we have not heard a word of criticism about our museums and galleries. There is a general view that they are run by brilliant directors and have terrific dedicated staff. I should like to finish by paying tribute to those people who are giving us a better museum and gallery service than anywhere else in the world.

The Committee adjourned at fifteen minutes past seven o’clock.