Skip to main content

Grand Committee

Volume 694: debated on Tuesday 17 July 2007

Grand Committee

Tuesday, 17 July 2007.

The Committee met at half-past three

[The Deputy Chairman of Committees (Baroness Gould of Potternewton) in the Chair.]

Before the Minister moves that the first order be considered, perhaps I may remind noble Lords that, in the case of each order, the Motion before the Committee will be that it do consider the order in question. The Motion to approve the order will be moved in the Chamber in the usual way.

Private Security Industry Act 2001 (Amendments to Schedule 2) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Private Security Industry Act 2001 (Amendments to Schedule 2) Order 2007.

The noble Lord said: The Private Security Industry Act 2001 provides for the regulation of the private security industry through the licensing of individual operatives working in the private security industry. At present, the licensing requirement applies only to England and Wales. In Scotland, licensing will become a requirement from 1 November 2007.

The main purpose of this order is to amend Schedule 2 to the 2001 Act to ensure that, in line with similar functions in England and Wales, certain prison- and police-related activities carried out in Scotland are not caught by the licensing requirement.

The order also makes a number of minor and technical amendments. The 2001 Act sets out certain types of activity for which an SIA licence is required. These activities, which are designated by orders made under Section 3(3) of the Act, are listed in Schedule 2. They include manned guarding, door supervision, the transport of cash and valuables, and key-holding. When licensing becomes compulsory in Scotland, from 1 November 2007, those activities will also be designated in respect of Scotland. Crown employees who hold office and undertake security activities, such as police officers and prison officers, are outside the scope of the 2001 Act.

However, the original legislation had the unforeseen effect of extending to security guards who undertook manned guarding activities while working under contract in prisons, in immigration centres, as prisoner escorts and in other similar areas under the control of the police and prison authorities. They were subsequently excluded in respect of England and Wales. Article 2 will ensure that the position is the same in Scotland.

Article 3 makes a minor, technical amendment. Article 4 ensures that the restriction and/or removal of vehicles is not caught by the licensing requirement in Scotland. Vehicle immobilisation, or wheel-clamping, where a fee is charged for the release of the vehicle, is already illegal in Scotland.

Paragraphs (2) and (5) of Article 5 bring the position in Scotland into line with that in England and Wales to ensure that the door supervision requirements apply to licensed premises only when alcohol or entertainment is being provided. Article 5(3) is intended to establish beyond doubt that licensable security activities in respect of cash and valuables in transit and close protection are not caught by the door supervision requirements. It applies to all areas.

Article 5(4) avoids potential problems caused by an incorrect paragraph number used in a similar amendment made by the Gambling Act 2005. The amendment makes it clear that casinos and bingo halls do not fall under the door supervision requirements in addition to requiring a premises licence under the Gambling Act.

Article 5(5) amends the list of premises not to be treated as licensed premises for the purposes of paragraph (8) to make provision for the position in Scotland.

Once the order is passed, implementation of the licensing requirement in Scotland will require an order made by the Scottish Parliament applying the offence provisions of the Act to Scotland from 1 November 2007.

In closing, I can say that the SIA has overcome the problems of last year caused by a last-minute rush for licences and is now well placed to extend its functions to Scotland. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Private Security Industry Act 2001 (Amendments to Schedule 2) Order 2007. 19th report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

I thank the Minister for his explanation of the order, which, as he explained, is intended largely to bring the legislation in Scotland into line with that of England and Wales. I would welcome his assurance that the order is, as the Government said, “appropriate and proportionate” both in England and Wales and in Scotland. My party did not oppose the Act when it was brought into force, and I would welcome the Minister’s assurance that the Government have in mind not to penalise excessively the smaller businesses in this industry. We have no other objections to the measure.

I add my thanks to the Minister for his explanation of the order. Like the noble Viscount, Lord Bridgeman, I want to ask whether it is appropriate and proportionate. The second and only other query that I have is why there is an exception for casinos under Article 5(4).

I am grateful to both noble Lords for their kind comments of welcome to this order. The noble Viscount, Lord Bridgeman, is right to ask about its appropriateness and proportionality. We have consulted extensively on this. There is support across the security industry sector, and business, too, largely accepts the measure as the right way to proceed. Following the passing of the Act, there was some debate about whether it had been sufficiently fine-tuned and whether, for some businesses, it could have been an excuse for over-zealous regulation. We think that we have that right, and the messages that we are getting back say exactly the same. I can tell noble Lords that a small business impact assessment was carried out before the decision was made to extend the measure to Scotland. Therefore, we think that it is appropriate and that we have the balance right in terms of proportionality for enforcement.

The noble Lord, Lord Dholakia, asked about casinos. My understanding is that casinos are already exempted, so the order need not apply and it is therefore entirely workable. There is no explanation other than that.

On Question, Motion agreed to.

Regulation of Investigatory Powers (Investigation of Protected Electronic Information, Code of Practice) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Regulation of Investigatory Powers (Investigation of Protected Electronic Information: Code of Practice) Order 2007.

The noble Lord said: I shall also speak to the Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order 2007.

These orders, made under Section 71 of the Regulation of Investigatory Powers Act 2000, were laid before Parliament on 14 June. The purpose of the Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order is to secure approval of a draft code of practice relating to the acquisition and disclosure of communications data under the 2000 Act, its acquisition by public authorities and its disclosure by communications service providers.

Communications data, such as telephone and internet subscriber information, allocation of internet addresses, itemised call records and mobile phone location data, remain a vital tool in the prevention and detection of crime and in safeguarding the public. It is data about who contacted whom and when; it provides evidence of associations between individuals and events in time and place; it can corroborate the testimony of victims and witnesses; it can also provide evidence of innocence. Most importantly, it is not about the content of communications and what was said in telephone calls or written in e-mails.

The provisions of Chapter 2 were implemented in January 2004 and brought long overdue regulation to public authorities’ acquisition of communications data. Exercise of the provisions is under the vigilant oversight of the Interception of Communications Commissioner, Sir Paul Kennedy, assisted by a team of inspectors who scrutinise public authorities’ conduct to obtain communications data.

A draft code of practice has been in place since these provisions were implemented. It has been extensively revised to take account of actual practice and to address issues on which public authorities and communications service providers have sought guidance or clarification. Sir Paul and his inspectors have contributed significantly to the development of the code of practice, as have respondents to a public consultation on the draft. The code presented to Parliament sets out procedures that ensure proper respect for individuals’ human rights and reflect the reality of operational and investigative work.

The application of the code will significantly reduce unnecessarily bureaucratic processes. For example, it makes clear that a senior officer can authorise the obtaining of subscriber information without needing to know which service provider operates the phone number. It also makes clear that it is unnecessary to undertake a subscriber check prior to, or separate from, checking call records; that a single authorisation can cover the acquisition of specific data and the additional data necessary to interpret that; and that, where data is required in an emergency, no special internal paperwork is required but the public authority must collate the evidence of its decision-making from operational logs, which must be available to the commissioner’s inspectors.

The code also makes clear—this reflects operational practice over many years—that where the connection of a 999 emergency call is lost and information is needed to provide emergency assistance to the caller within the so-called “golden hour”, that is outside the arrangements of the Act.

The code makes clear that only appropriately trained and accredited investigators who understand the legislation can engage with communications service providers and spare them from ill informed, impractical or unlawful inquiries.

The Regulation of Investigatory Powers (Investigation of Protected Electronic Information: Code of Practice) Order seeks the approval of a draft code of practice relating to the exercise and performance of the powers and duties under Part 3 of the Act to require the disclosure of protected electronic data in an intelligible form or to acquire a key, or a password, to that data. Part 3 gives public authorities no new powers to seize or acquire data, but it does give them powers, to be used only when necessary and appropriate, to require data they possess or are likely to possess to be made intelligible or to require disclosure of the key that will make the data intelligible.

These provisions are not in force. It has taken longer than was expected in 2000 for the same technologies that have enabled electronic commerce to develop to be taken up by terrorists and criminals to secure their information and to protect and conceal evidence of unlawful conduct.

Equally, encryption tools have remained cumbersome to use properly. That has been exploited by technical facilities such as the National Technical Assistance Centre (NTAC), which processes protected data on behalf of law enforcement and intelligence agencies.

However, these tools are becoming easier to use and are being installed in the standard operating systems of consumer devices. The impact of encrypted data on the work of investigators and their ability to work within statutory custody time limits will continue to increase.

The Government have made it very clear that these provisions would not enter in force until the time was right and not before Parliament had approved a code of practice. The time is now right.

The code of practice addresses issues on which Parliament sought clarification when the primary legislation was considered and debated. It takes account of the comments of respondents to the public consultation. The code makes it clear that the overriding purpose of the provisions is to enable investigators to access lawfully acquired information in an intelligible form, not to access the keys to data.

The power to require disclosure of key material can be expected to be used only where a person who is able to put protected information into an intelligible form indicates that they will not exercise that ability either voluntarily or on compulsion. The power is most likely to be exercised in relation to individuals who are the subject of investigation and responsible for protecting information that the authorities have obtained lawfully and believe to be evidence of unlawful conduct or relevant material to the investigation.

Once the provisions are in force, it will be an offence knowingly to fail to comply with a disclosure requirement, with a maximum penalty of five years’ imprisonment in national security cases or two years in other cases. We have consulted on whether that five-year penalty should be available in cases relating to possession of indecent images of children. I should report to the Committee that there is support for that, which would require amendment of the primary legislation. We will consider taking that step after assessing how well the provisions are used.

When this legislation was debated in Parliament, much concern was expressed that it would criminalise people with poor memories or would reverse the burden of proof in the case of those who claimed to have forgotten or lost keys to their data. The code makes it very clear that, where a person claims not to have had a key to the data, the prosecution must prove the contrary beyond reasonable doubt. If a person claims that they no longer have a key or do not know a key to the data, the prosecution must prove the contrary beyond reasonable doubt.

In direct response to concern expressed in public consultation that technical expertise is required to understand and apply this legislation appropriately, the code of practice makes it clear that no public authority may serve on any person a Part 3 notice without the prior written approval of NTAC. In this way, NTAC will have the crucial role of ensuring that the provisions are used appropriately, expertly and with the highest regard for compliance with the requirements and principles of the Act and the code. NTAC will also help to assure the various oversight commissioners of that.

Recognising the critical importance of the integrity of information security in the financial services sector, and in response to the concerns expressed by Parliament and the public, the code makes it clear that no requirement to disclose a key to protected information should be imposed on any company or firm authorised by the Financial Services Authority without prior notification to the chief executive of the authority or a person designated by him for that purpose.

Finally, as an additional safeguard against abuse, both these codes of practice make it clear that, if an oversight commissioner establishes that an individual has been adversely affected by any wilful or reckless failure by any person within a public authority to comply with the Act, the commissioner shall, subject to the need to safeguard national security, inform the affected individual of the existence of the Investigatory Powers Tribunal, which considers complaints about unauthorised or inappropriate conduct and should enable that person effectively to engage the tribunal.

Subject to Parliament’s approval, both codes and the provisions of Part 3 will commence on 1 October. Arrangements for delivering briefings to practitioners and other interested parties on the detail of the new provisions and the codes are being planned.

The primary responsibility for any democratic state is to protect its citizens, whether from the threats posed to us all by terrorism or from the threats posed to our most vulnerable citizens by sexual predators. It is right that in so doing the Government strike the right balance between the rights of communities and those of individuals. The guidance in both codes of practice does just that. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Regulation of Investigatory Powers (Investigation of Protected Electronic Information: Code of Practice) Order 2007. 19th report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

I am grateful to the Minister for that comprehensive explanation of the two orders, and the remarks with which he finished about the increasing sophistication of terrorists and of the criminal fraternity in general. I am pleased to hear that there was extensive consultation on both orders, and we welcome the safeguards provided under both the codes: first, the Interception of Communications Commissioner and, then, a further appeal to the Investigatory Powers Tribunal.

In the second order the controls on public authorities to ensure that the use of the powers is undertaken appropriately and in compliance with the requirements and principles of Part 3 and the code of practice are, again, reassuring. I am grateful to the Minister for recognising the question of the burden of proof, on which we are reassured. We have no objections to either order.

I thank the Minister for his detailed explanation of the safeguards included in this provision. I have five areas of concern.

First, there is the secrecy requirement. Paragraph 10.8 of the code of practice details the possible provision mandating that the person to whom a Section 49 notice is delivered keeps the existence of the notice secret. The enactment of such a secrecy provision, in combination with the fact that an individual may be ordered to disclose encryption keys to which he has access with a business or personal associate, means that authorities might be able to encrypt an individual’s information without their knowledge.

Secondly, paragraph 3.19 notes that encryption key material can be retained in the memory of an individual. The Minister explained at some length how the provision would work. Paragraph 10.5 states that if an individual provides evidence to the effect that he or she does not have possession of the key, the burden is on the prosecutor to prove the contrary beyond reasonable doubt, but it is unclear how that would work in the case of memorised passwords.

Thirdly, the sentencing guidelines seem to provide some bizarre incentives. Paragraph 10.2 lays out the penalties for failure to comply with an order: a maximum of two years’ imprisonment in most cases, rising to five years in national security cases. However, if an individual were in possession of an encryption key that would reveal their involvement in, say, a terrorist plot or other crimes such as child pornography, they would get off far easier by refusing to give the key and going to prison for non-compliance than they would by revealing the evidence of their other crimes.

Fourthly, the penalties for the abuse of power under Part 3 of RIPA need to be laid out. At present, only failure to protect disclosed information is covered, but there is a danger that public authorities will misuse their investigative power, and that remains unaddressed.

Finally, no mention is made of the need to protect the confidentiality of financial services. I refer to paragraphs 6.8 to 6.9. There are concerns that, if a bank is required to disclose keys that enable investigators to track the flow of money into and out of suspect bank accounts, the same data could be used to monitor other accounts. It would be helpful if the Minister could give his observations on the five points I have raised.

I am grateful to both noble Lords, particularly the noble Viscount, Lord Bridgeman, for his helpful observations. We have had fairly widespread support for both orders, and from wider than the usual suspects. We have had very welcome support from Liberty, which now thinks it wise to implement these powers and that they are actually quite helpful in the protections that they offer for the benefit of people who may be affected. This broad welcome was reflected in noble Lords’ comments today.

The noble Lord, Lord Dholakia, understandably sought reassurance on points relating to the second order. I am not sure that I shall be able to answer all his questions this afternoon—

I appreciate that there are some detailed points. It might be better, as this matter will come to the main Chamber, if in the mean time the Minister wrote to me with some details. That would help me.

I shall happily give what assurances I can this afternoon, but I am more than happy to write to the noble Lord on some of the more detailed points.

The noble Lord asked how the powers would operate with regard to a memorised key. In reality, it would not work that way, as even hardened paedophiles write down their passwords. They suffer from the same memory problems as all of us.

The noble Lord made the point that an offender could take a two-year penalty rather than a longer one for disclosing information. I recognised that in my comments, but we shall have to see how this works in practice. If there is a problem, we will more than happily reflect on it and, if we have to, bring it back—in that case I am sure that we would want to amend the legislation to make it more effective.

We can give the assurance that confidentiality is an issue for us and, where it is right, it must be respected. That is how we should operate.

I shall reflect some more on at least one of the noble Lord’s other two points and write to him. With regard to bank keys, to restate the obvious, the point is to acquire data in an intelligible form, not the keys themselves. The financial services are expected to disclose intelligible data, not the keys, and the Financial Services Authority has to agree before that will happen. I made that clear in my opening comments, but I shall reiterate it because it probably answers the noble Lord’s point.

I hope that the orders find favour with the Committee.

On Question, Motion agreed to.

Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data, Code of Practice) Order 2007

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 Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order 2007. 19th report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

On Question, Motion agreed to.

Terrorism (Northern Ireland) Act 2006 (Transitional Provisions and Savings) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Terrorism (Northern Ireland) Act 2006 (Transitional Provisions and Savings) Order 2007.

The noble Lord said: On 1 August 2005, the Secretary of State for Northern Ireland announced a programme of security normalisation, including the repeal of all counterterrorist legislation particular to Northern Ireland by 31 July 2007, subject to an enabling environment. As is well known, the security situation in Northern Ireland is markedly different from that of a few years ago. The normalisation programme is on target and in its final stages. Bessbrook Mill military base, in south Armagh, was vacated by troops as recently as 25 June. This is the second consecutive year when troops were not needed on the streets of Belfast on 12 July. In this context, the time is right to repeal Part VII of the Terrorism Act 2000.

However, it is sensible to put in place some transitional and saving provisions to ensure an effective and smooth change from one regime to another. There are some transitional provisions in Section 113 of the 2000 Act, but these are temporary and will expire on 31 July 2007 without this order. We also think that these provisions are not sufficient by themselves to deal properly with these important issues; the more detailed provision in this orders are believed necessary. It may help if I explain some of the main elements of the order and why they are believed to be necessary.

The order preserves the arrangements for scheduled bail in respect of defendants who are granted bail for a scheduled offence under Section 67 of the Terrorism Act 2000 on or before 31 July. This will ensure that a defendant will still be under a continuing duty to surrender to the custody of the court and comply with any bail conditions. It will also ensure that the provisions relating to absconding and the power to arrest without warrant for breach of bail conditions will continue to apply.

The order preserves the existing transitional provisions in the 2000 Act relating to Diplock trials in progress. If the indictment has been presented in a case—this normally happens a day or two before the defendant enters his plea at the arraignment hearing—the trial can continue under the Diplock arrangements. Without this, double jeopardy rules could apply, potentially preventing any conviction at all of an individual. The order maintains the unfettered right of appeal from a Diplock court, where it is not necessary to seek leave to appeal first. This means that individuals convicted by a Diplock court will still benefit from this provision, even if they lodge their appeal after the repeal of Part VII. That is an important safeguard.

The order also preserves police and military powers in relation to operations which may be in progress at the end of 31 July 2007. For example, if a search is in progress when Part VII is repealed, the police will be able to continue that search until it is completed. If evidence has been seized under Part VII, it can be kept to support any prosecution. The order preserves obligations on the police and military to make records of actions taken under Part VII. The compensation scheme is also preserved, so that claims relating to things done up to the end of 31 July 2007 can be made and compensation paid. The order enables the Independent Assessor of Military Complaints Procedures to make a final report covering the period up to the end of 31 July 2007. The military will remain under a duty to provide him with information necessary for his reports. Sections 107 to 111 of the 2000 Act can continue to apply in respect of Diplock trials in progress or individuals convicted before 31 July 2007.

Finally, the order makes savings for physical security measures in Northern Ireland, road closures and land requisitions. An audit has been conducted so that only those that are necessary on security grounds will remain, and those that are retained will be kept under review. Several security measures have been able to be removed. Much of the land requisitioned for Crossmaglen police station has been handed back to the landowners, Shore Road at Ballykinler army base has been opened, and there are plans to open lower Chichester Street, in front of the Royal Courts of Justice, to buses.

We are all looking forward to the day when there will be no need for barriers between the communities, and physical security measures will be authorised only as a last resort, where it is necessary to protect life and property. I am sure that the political leadership shown by the Executive is bringing that closer each day.

Each measure will be examined individually and fresh authorisations made for any that need to remain. This will be done on the basis of new security advice from the Police Service of Northern Ireland and the new powers in the Justice and Security (Northern Ireland) Act 2007. This work will be done in the autumn and the measures kept under regular review thereafter. I am sure that noble Lords will agree, as elected colleagues in the other House did, that these transitional provisions and savings are both proportionate and necessary for the effective repeal of Part XII. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Terrorism (Northern Ireland) Act 2006 (Transitional Provisions and Savings) Order 2007. 22nd report from the Statutory Instruments Committee.—(Lord Rooker.)

I am most grateful to the Minister for his comprehensive explanation of the order. It marks the continuing normalisation process in Northern Ireland, which is very welcome and must be maintained. I also welcome the fact that such a move is now possible. How many cases are in progress and will be affected by the order?

We recognise that the exceptional security situation in Northern Ireland still warrants the continuation of non-jury trials. During the passage of the Justice and Security (Northern Ireland) Act 2007, my party raised issues regarding the role of the Director of Public Prosecutions in deciding whether a trial can take place without a jury and the possibility of giving this role to the Lord Chief Justice of Northern Ireland. Can the Minister tell us the position on that? Otherwise, we have no objections to the order.

I, too, thank the Minister for his elucidation of the order, which he did with characteristic aplomb. I also endorse what the noble Viscount, Lord Bridgeman, has said. It is clearly necessary to have transitional provisions. All dates are arbitrary; there is nothing special about the end of July. I echo the words of the noble Viscount: it is very good news that we are at this stage, which signals yet a further step towards the normalisation of life in Northern Ireland. We support the order.

I, too, thank the Minister for the clarity with which he has brought the order before us. Along with other noble Lords, I welcome the order in so far as it is further evidence of a move towards normalisation in Northern Ireland. I choose my words wisely when I talk about a move towards normalisation. The Minister and other noble Lords who know Northern Ireland will understand that a threat, albeit at a very low level, still remains from dissidents, probably within both traditions. Many areas of normalisation have still to be completed, not least loyalist decommissioning. I am not up to date and do not know the extent to which the Real IRA and Continuity IRA are able to increase their current level of activity.

One carry-over from terrorism in Northern Ireland is the extent to which organised criminality exists and to which organised criminals are still able to dominate certain areas. There is always a problem in bringing a big player within the criminal world before a jury trial; there is always the possibility of intimidation of juries.

I hope that the normal—if I can call it that—law to which we are all subject will be implemented speedily, not something we are not used to in Northern Ireland, where the law moves so slowly that its effect is not properly felt or appreciated. The ordinary, law-abiding citizen may see something wrong happening today but the process ends somewhere in the distant future. If we are going to discourage those who may be tempted to continue to disrupt the life of ordinary people in Northern Ireland, then, together with normalisation, the law that serves our community must be implemented much more speedily. I hope the Minister can give an assurance on that.

I also welcome the statement made by the Minister. It gives me an opportunity to place on record my sincere belief that the terrorist situation in Northern Ireland has indeed changed. It is both fitting and proper that provisions that were once necessary to combat terrorism and the onslaught of violence in my province should be amended and brought into line with those in the rest of the United Kingdom.

I am sorry to interrupt the noble Lord, but there is a Division in the Chamber. The Grand Committee is adjourned for 10 minutes.

[The Sitting was suspended for a Division in the House from 4.12 to 4.22 pm.]

I think that the Division Bell indicated that I should be brief—I shall be. We need legislation that is fit for purpose in dealing with the renewed international threat that we now face, and I believe that the Prevention of Terrorism Act 2005, the Justice and Security (Northern Ireland) Act 2007 and this order will do just that.

I was encouraged yesterday, following a meeting at Stormont of the British-Irish Council, by a statement made by the Deputy First Minister, Martin McGuinness. He commented on a recent dissident republican attack on Strabane PSNI station and likened the terrorists involved to those estranged Japanese fighters who continued their struggle for 15 years after the end of the Second World War, not realising that the war was over. I welcome the statement that the war in Northern Ireland is, I hope, over. However, following the removal of the Army presence in south Armagh, there has appeared to be an upturn in sectarian violence in that region, with Orange halls attacked and so on. But while it appears that the threat from dissident republicans remains genuine, there has to be wide acceptance of the emerging optimism that has gripped Northern Ireland and the hopes for a stable, peaceful future for my province. There is optimism that we are coming to the end of this period of violence.

That said, the attacks on Glasgow airport show just how the threat from extremists is easily transferable. As a nation, right across our regions we must be up to the task of thwarting those who seek to cause maximum disruption, mayhem and misery. I hope that the experiences of Northern Ireland will help to shape the provisions necessary to deal with such risks and that the legislative provisions that were once necessary to combat local threats will be used equally and appropriately to deal with those who seek to disrupt the way of life that we enjoy and wish to preserve here in the United Kingdom.

On a more localised front, I welcome the removal of barriers, particularly in Belfast, where the economy, I am glad to say, is growing. The removal of the barrier at the end of Chichester Street, in particular, which will open the thoroughfare to the Laganside development, where many things are happening, will be beneficial to the economy of Northern Ireland. I welcome the order. I hope that we will not need any such orders in the years to come and that we will have a peaceful, democratic society.

I thank noble Lords for their wholly positive approach to the order, reflecting the debate in the other place yesterday. I realise that occasionally we have had debates where the message that I have given was not accepted; today, it has been wholly accepted. I am grateful to the noble Lords, Lord Browne and Lord Maginnis, for making a huge contribution to public life in Northern Ireland as well as to this debate. I am deeply grateful for that. I am grateful also to the noble Lord, Lord Smith.

I was asked a couple of specific questions which I shall do my best to answer. The noble Viscount asked how many cases were ongoing. As we speak—the new situation will be triggered at the end of the month, so I do not know how long these cases will last—26 Diplock cases are ongoing, involving 53 defendants. As the figures show, there has been a massive drop in the number of Diplock cases in recent years. There were only 61 in 2006, 49 in 2005 and 65 in 2004, involving some 90, 91 and 77 defendants respectively, which is about par for the course. I do not know how many of those will be ongoing when the new situation is triggered.

The Act that replaced the Diplock courts with the powers of the Director of Public Prosecutions provided for the DPP to take the decision for a non-jury trial. We debated the matter at some length. I understand that my noble and learned friend the former Attorney-General dealt with a good deal of it. We explained that we thought that the decision should be with the DPP because it would be based largely on sensitive material. Time will tell whether we have got it right, but I understand that there are no outstanding issues in terms of the legislation. Therefore, we will see how the replacement courts progress.

It is true that there are dissident republicans, as the noble Lords, Lord Smith, Lord Maginnis and Lord Browne, said. They are unquestionably isolated in number but nevertheless a threat to the security situation. We believe that the Police Service of Northern Ireland is more than up to coping with the threat. People can always do more. In this case, as I have said on other occasions, I hope that if everyone can come to the table and walk away with a gain, however great or small, it can be seen that that is the way to operate. That is the reason why not only the war is over but the peace is well on the way. There is no question that the economy is booming, although there are substantial changes to make to it.

As the noble Lord, Lord Maginnis, said, the police service has to be on the case with organised criminals; we must not allow vacuums to arise in our communities. I wholly agree with him about the speed of implementation of the law but with one caveat: it is now July 2007; noble Lords should think where we were when I was in this Room in July 2005, having just gone to Northern Ireland—that is about four pieces of primary legislation ago and more orders than I care to remember. We were optimistic but mindful of the territory we were in. Therefore, I ask noble Lords to judge the situation. We are now in July; by spring and summer of next year, we will have a better idea. But slow law is bad law, and people will not respect it; the noble Lord is quite right on that. I am sure that the authorities will do everything they can, because it is in their interests to bring about a normal civic society in Northern Ireland—if we call everything in England, Wales and Scotland normal for most of us—where the rules of law are followed. There may be delays, but there will be no undue ones. We have to take that point on board.

If I discover that I have missed something, I will write a note.

I thank the Minister for the explanation of the decision on trials, which was wholly satisfactory. I am most grateful.

On Question, Motion agreed to.

Regulatory Reform (Deer) (England and Wales) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Regulatory Reform (Deer) (England and Wales) Order 2007.

The noble Lord said: This draft order will amend the Deer Act to improve the management and welfare of deer. The deer population has increased significantly, doubling in size over the past 25 years, we believe. The population rises have resulted in increased conflict with conservation, agriculture and other human activities. This order will help those who need to manage wild deer to do so in a proportionate manner, while maintaining appropriate welfare safeguards.

I am always wary of saying this when one has not been deeply involved in a matter, but the words on the brief in front of me are as follows: I understand that the draft order is not controversial—I sincerely hope that that is the case—and that it has been welcomed by deer stalkers, managers, land owners, conservation agencies and those concerned with the welfare of our wild deer.

Full and proper consultation on this draft order was carried out in 2006. Respondents strongly supported the proposals that will facilitate improved management of the wild deer populations. There was also overwhelming support for the proposals that will enhance the welfare of deer. I remind noble Lords that the draft order applies to England and Wales only and that consent of Welsh Ministers has been obtained for it.

The order will facilitate improved management of deer by increasing the range of tools available to those responsible for managing wild deer populations and reducing associated burdens. I will briefly remind noble Lords of the key changes made by the draft order. It will make it permissible to use .22 centre-fire rifles for shooting the non-native muntjac and Chinese water deer; it will introduce licensing provisions for the killing or taking of deer during the close season to prevent deterioration of the natural heritage or to preserve public health and safety; it will introduce licensing provisions for the killing or taking of deer at night to prevent deterioration of the natural heritage, to preserve public health and safety or to prevent serious damage to property; it will shorten the close season for all female deer to allow better management of population levels by moving the commencement date to 1 April; and it will amend the meaning of “mechanically propelled vehicle” in the Deer Act to permit the shooting of deer, provided that the vehicle is stationary and the engine is switched off. This will provide a stable platform.

Alongside these changes to deer management, the order will also enhance the welfare of deer by removing restrictions on the mercy killing of sick and injured deer by allowing any reasonable means of humanely dispatching deer that are suffering due to illness or disease; allowing dependent deer to be taken or killed if they have been, or are about to be, deprived of their mother at any time of the year; and introducing a close season for Chinese water deer and hybrid species from 1 April to 31 October inclusive.

The amendments in the order will have a positive impact on the management of deer through the provision of an increased range of tools for those involved in the management of these species. The order will increase the time available to managers to carry out their work by shortening the close season. The introduction of licensed control will provide an opportunity for deer managers to mitigate the problems caused by deer when other methods have been shown to be ineffective.

The order also provides positive benefits for the welfare of deer through allowing quicker alleviation of suffering where they are found injured. It will align the protection afforded to female deer through the introduction of a close season for Chinese water deer and red hybrids. The draft order will ensure that necessary protection will remain. Licences to kill deer during the close season will be issued only if there is no other satisfactory solution and the control will not affect the conservation status of native deer.

I said at the beginning that the wild deer population had probably doubled in the past 25 years. We are not exactly clear, but I have figures that show there are about 1 million now, a very large number. The order is not designed to wipe them out—far from it; no one wants to do that—it is to improve the management of the wild deer population. Those who manage them do a good job on behalf of society and the conservation of wildlife, but they need the tools to do it given the circumstances they are now working under, which are not the same as when the Deer Act was passed. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Regulatory Reform (Deer) (England and Wales) Order 2007. 12th report from the Regulatory Reform Committee.—(Lord Rooker.)

I am grateful to the Minister for introducing the order. He is right; it is not contentious. We welcome the changes, too. Anything that enables the necessary culling of deer to be done in the most humane and up-to-date way makes good sense.

I want to put on record my thanks to the Minister. This time last week, when he was taking through the animal welfare order and I could not be here because it was my grandson’s speech day, he was very generous in his comments following the announcement of my retirement from the Front Bench. I thank him most warmly. It is nearly 10 years since I took the first of many Bills through the House; it set up the Food Standards Agency. The noble Lord, Lord Rooker, then the MAFF Minister, met me and said, “And how are you doing with this particular one?”, to which I said, “It’s the first one I’ve taken through on my own”. What the noble Lord brings to the House, as he did to the other House, is that he tries to help those who are on Benches opposite to him to succeed in getting legislation through in the proper manner.

The order, interestingly enough, has been laid under the Regulatory Reform Act 2001. Only last Session the House debated at great length the Legislative and Regulatory Reform Act 2006, which gave the Government enormous powers to amend primary legislation by secondary legislation. I find it surprising that, so far as I am aware, no order has yet been moved under that Act. Why are we still moving orders under the 2001 Act? That seems very strange.

I thank the Minister for acknowledging that Defra reconsidered the close season. It was originally proposed by the specialists that it should be shortened by four weeks, but at that stage Defra was recommending only two weeks. I am grateful to the department for accepting the longer period. As the Minister has said, the deer population is rapidly on the increase, and anything that helps to reduce the number without causing suffering seems to make great sense.

The crux of the legislation as it stands is to protect the health of the deer and of humans, conserving natural heritage and trying to prevent damage to property. When we took the CROW Act through in 2000, some 28 days had been set aside for the management of wildlife. We need to ensure—and the House of Commons Regulatory Reform Committee has picked up on this—that good warning is given to people that night-time culling will be happening on a particular section of property at a particular time. My fear at the time was that people do not always listen to advice about what will be happening and consequently could be in the wrong place at the wrong time. I am sure the department has taken that on board, and I am grateful to it for that.

As we know, there are no real natural predators. The estimated damage caused by road accidents is £41 million to £181 million a year. That is a huge cost, which is not commonly known.

On the estimated costs, based on 60 applications a year, if broken down that might work out at around £5,000 covering costs for each licence. Does the department control those costs when they come in or will that be for Natural England? The Minister will be acutely aware of an issue that I have raised consistently, on the IPPC charges for pigs and poultry. Those charges are set by the Environment Agency, and I do not think that the department has any control over them, but the amounts and hourly rates set do not seem to be reviewed in any meaningful way. Will the Minister touch on that?

Disease is one of the reasons culling is allowed. Some deer may be infected with bovine TB, and I was not sure from reading the paperwork that I received whether that was considered.

On the subject of bovine TB, I place on record my dismay at the overnight news that Shambo the Hindu cow is being reprieved. It is not that I have anything against it, but it is an infected cow carrying infective diseases. It seems extraordinary, as it must to the many farmers who farm close by, that one known disease-carrying cow is being permitted to live when 28,000 to 30,000 cows troubled with bovine TB are killed annually. Can the department raise this matter again or is that the end of the matter, now that the judge has given his judgment? One could say that, because this is happening in Wales, it is a devolved matter, but the judge was sitting in the High Court; therefore, I presume that it was a UK judgment, but I am not clear on that.

I thank the Minister for introducing this measure as he did and for the work that has gone into it. Basically, we need to be able to control the deer population in the most humane way possible. I am pleased to see that one is allowed to use a vehicle when shooting deer but that it must be stationary at the time.

I welcome this important order. I am glad of this opportunity to pay tribute to the noble Baroness, Lady Byford. She and I have worked on the Defra brief for almost the same length of time. Perhaps the most memorable occasion that we shared was when we sat through the night and worked together on the Countryside and Rights of Way Bill. We very often did not work on things completely together, because there were many occasions when we could not vote on the same side; however, the triumph that emerged from our working together on that Bill was with Part 3, which will probably remain in my mind as one of our biggest joint successes in this Chamber.

Probably nobody will equal the noble Baroness’s ability, for which she has been noted, to fire off questions to Ministers. As was recorded in Hansard not long ago, she is known as “Mrs UK Agriculture”. I am sure that she will be able to retire with great honour and with that title well in place.

I have a few questions for the Minister on the order. First, as he said, there has been a significant increase—a doubling—in the deer population in the past 20 years. One significant outcome of that, which has not been mentioned at all so far this afternoon, is the incidence of Lyme disease. Julia Goldsworthy, my colleague in another place, has put a number of Questions to the Department of Health and Defra on this issue. This order covers public health aspects. The question is very serious; I wonder whether the Minister has any comments on it. I presume that Lyme disease is covered by the reference to preserving public health. Is the department making any analysis, with the Department of Health or separately, of the incidence of Lyme disease and how exactly it relates to the density of deer?

My second question relates to conserving the national heritage, in terms of interpretation and especially given the different pressures on areas that may have had stock removed following CAP reform but which need grazing and are subject to deer grazing, as opposed to new tree growth. Those are areas of potential conflict. I presume that the Minister will tell me that Natural England will decide the priorities there, but is there actually a definition of natural heritage? Will it be a grazed landscape or a treed landscape, and so on?

The noble Baroness, Lady Byford, raised the issue of bovine TB, so I shall await the Minister’s answers on that.

Finally, on the matter of serious damage to property, presumably with regard to deer that means damage to crops. What would constitute serious damage? Would it be 10 per cent of the crop or more than that? Is that being considered by Defra?

I am most grateful to the noble Baronesses, and in particular the noble Baroness, Lady Byford. As I said last week, she has brought elegance and charm to the Front Bench, which I suspect her successor will not be able to do. That is a very sexist remark for which I make no apology.

The noble Baroness mentioned the cost attributed to road accidents, which is a very serious issue. I have been astonished to see the range of figures; there seems to be a minimum of £14 million. I freely admit, as I told officials this morning, that occasionally I see the signs warning drivers to beware deer, but I pay very little attention because I do not expect any deer to come out on the road. However, they clearly do, and the accidents are very serious. I understand that work is taking place to look at signage around the country, because there is a cost in all kinds of ways, as one can imagine.

There must be good warning of night-time culling so that there is no confusion among people about what is happening in their locality.

On the noble Baroness’s first point, the process brought about by the Regulatory Reform Act 2001, inside government, is incredibly lengthy. It takes the best part of two to three years to put a reform order through the Whitehall and parliamentary process, and I suspect that, as it started that way under the 2001 Act, that is how it would complete. The Legislative and Regulatory Reform Act 2006 came into effect in January 2007. The process of this order was well under way, and consultation and everything else under the rules that applied then had started. It came into Parliament in December 2006, so that is why it is covered.

The costs for licences are high. Night-time licences require site visits and follow-up for safety. At this time there are no plans from Natural England to charge applicants, but I have no better information on that. One thing for sure is that, if and when charges are made for licences, they will be purely for cost recovery. It will not be allowed to be used for an income generator—nor is the Environment Agency supposed to be using it as income generator, although people have different views about that from time to time.

In what I thought was an incredibly unfair question, the noble Baroness, Lady Byford, raised the issue of bovine TB. I have not come equipped with the answer but, as everyone knows, Ministers are considering the report on the matter by the Independent Scientific Group on Cattle. In addition, a Question to Defra will be asked in your Lordships’ House next week. The Government’s own scientists—that is, the scientists in Defra and the government chief scientists across Whitehall—are assessing the scientific aspects of the report. It went beyond some of the science, but I am not in a position to say anything about it.

Shambo is currently a matter exclusively for the Welsh Assembly. I understand that the Assembly will appeal the decision, but there is no question but that it comes under Welsh jurisdiction. Defra is not involved, but the idea that we are not interested does not stand up. Simply, the case concerns a disease in an animal that in general is used for food production, and this is a matter of controlling disease in food production animals. Whether or not the animal goes into the food chain does not really matter. One might argue about the scientific report that we have just had from Professor Bourne’s group, which was set up 10 years ago, and about what it found out. Ten years ago, Ministers were told, “Do this trial and you will find out the transmission route of TB, cattle to cattle and badger to badger”, but we do not know what the route is, and the report does not tell us. Frankly, how much the judge in Wales read into that, we do not know.

The cow was diagnosed as having TB on the basis of one test. Everyone knows that the test is not perfect, but it does not matter whether it is an isolated case; the fact is that scientists cannot tell Ministers the transmission route of the disease. If you know that the disease is there but you do not know the transmission route, it is fairly obvious that you have to take a certain course of action. However, the matter will go to appeal; therefore, I have probably said more than I should have done. I am not in a position to criticise judges; Ministers should never do that. Public health, public safety, animal health and animal safety are our responsibility. However, I understand that the Welsh Assembly is appealing the issue.

With regard to Lyme disease, ticks are thought to be the most significant vectors of human and livestock diseases in the UK. Many reports suggest that ticks have become more abundant recently, coinciding with increased densities of deer. We are not currently funding research specifically into Lyme disease but we are funding one project at Oxford University—reference SE 4105—that is taking a broader look at tick-borne zoonosis in deer. The project will define how the UK tick fauna has changed and how it may change in the future under the influence of changing environmental factors, including climate, land use and the host—that is, the availability of deer—taking the following progressive steps. The first is statistical modelling to create predictive risk maps for resident tick species and potential invaders from Europe; the second is retrospective analysis of the precise factors that are identified as being critically limiting to assess whether they have changed appropriately; and the third is biological modelling to investigate the relative impact of abiotic and biotic factors on tick distribution, abundance and seasonal patterns of activity. I read that out without having read it before. If I have pronounced anything wrong, I apologise.

I see from my notes that I have not been briefed about Shambo, so I should not have said anything.

Natural England already assesses serious damage to the environment under other legislation. A loss of £100,000 to a large enterprise may not be considered serious but, to a small holding, naturally it would be very large, so one has to look at the present circumstances. Natural England advisers will assist landowners in identifying methods of alleviating the damage.

The natural heritage, for the purposes of Section 8, is defined in new subsection (6) of Section 8 as meaning,

“flora and fauna, geological or physiological features or natural beauty and amenity of the countryside”.

Some of that is scientific, while some of it sounds a bit subjective to me. See Article 4(6) of the order.

The Central Science Laboratory, Defra’s key body, is undertaking research into the role of bovine TB in deer and the transmission to cattle. This is a huge enterprise, which is costing a fortune. That is why we have to deal with it seriously. Stalkers will receive training—10,000 have already done so—including training on disease identification. That is an important aspect—it is not just the mechanics of stalking.

If I have missed anything, I will come back with a note, but I hope that what I have said has been helpful.

On Question, Motion agreed to.

Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007.

The noble Lord said: The Companies Act 2006 will bring major benefits to business by modernising and simplifying company law. This commencement order represents an important milestone in its implementation. It will commence some of the key provisions of the Act, including those relating to part of the statutory statement of directors’ general duties, derivative claims and proceedings, the business review, and resolutions and meetings.

Provisions being commenced by the order will play a major part in meeting two of our key objectives for the Act: ensuring better regulation and a “think small first” approach, and enhancing shareholder engagement and a long-term investment culture.

Let me first look at our aim of better regulation. The provisions in Part 13 on resolutions and meetings will deliver some of the most important benefits for business in the Act. In particular, they will simplify decision-making for private companies by making it easier for decisions to be taken by written resolution and by making annual general meetings opt-in rather than opt-out through the abolition of statutory AGMs for private companies.

Other parts being commenced on 1 October 2007 will deliver deregulatory benefits for business. It will, for example, be possible for holding companies to seek authorisation of political donations and expenditure in respect of the holding company and one or more subsidiaries through a single approval resolution. Companies will be permitted to make loans to directors, subject to member authorisation.

The other objective at the heart of the provisions to be commenced by the order relates to effective shareholder participation and a long-term investment culture. We believe that it is vital that there is a good understanding and effective engagement between those who own companies and those who run them on their behalf. The Act will therefore provide better guidance for directors on their duties and responsibilities and make it easier for shareholders, including investors who hold indirectly through nominees, to exercise their rights of ownership. It is essential for this country’s long-term prosperity that company decisions are based on the longer-term view and not only the medium term.

The length and complexity of the 2006 Act and its phased implementation have resulted in an order which is itself long and complex. I should make it clear that the Government decided to implement the Act in stages so that companies could take advantage of some of the deregulatory benefits as soon as possible. I apologise to noble Lords, especially members of the Joint Committee on Statutory Instruments, that it was necessary to take up and re-lay the order. In view of its complexity, it may help if I briefly outline its structure.

Schedule 1 contains transitional adaptations of the provisions of the Companies Act 2006 brought into force by this order, which are needed because the order brings only some of the provisions of the Act into force. Schedule 2 brings some of the repeals in the Act into force. Schedule 3 makes traditional provisions and savings. Schedules 4 and 5 make consequential amendments and repeals. The transitional provisions are essential to ensure that the Act operates in a reasonable way for existing companies and for ongoing activities or arrangements in which they might be involved around the time of commencement.

One of the key areas of interest in respect of transitionals has been that relating to derivative claims and proceedings in Part 11 of the 2006 Act. These are claims and proceedings brought by shareholders of a company, on behalf of the company, against its directors. Under the transitional provisions, the new derivative procedures must be used for all claims started on or after 1 October 2007, but the courts must ensure that the outcome of any claim based on acts or omissions by a director before 1 October 2007 will be what it would have been under the old common law that applied at the time.

The Companies Act 2006 is, by any standards, major legislation of great importance to corporate life in this country. The order will, as I have said, deliver some of the key benefits introduced by the Act. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007. 23rd report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

I thank the Minister for introducing the order. I declare interests as a shareholder and a director of companies.

While it is not controversial, the order is complicated, as the Minister said, and I have some concerns about the ability of lay people who run companies to interpret it without expensive legal advice. I suspect that the problem has been exacerbated by the Government’s decision to activate the Act in stages, some but not all of which is due to causes outside their control. The consequence is a very complicated order. With the benefit of hindsight, would the Minister ideally have done it like this? I ask this in the hope that he can use the experience from the No. 3 order to the benefit of everyone when bringing forward the No. 4 order. He might also let us know when that one is coming.

It is perhaps unfortunate that the Minister, the noble Lord, Lord Jones of Birmingham, is not here today to speak to the order. I think I am right in saying that the position of the CBI when he was its director-general—particularly, for example, on Section 172, which deals with the duty of directors to promote the success of the company—was directly contrary to that of the Government. Many noble Lords would benefit from his explanation of how he has reconciled his personal position on this point.

Although I do not object to the order, which in many ways is a good piece of work, it is worth dwelling on one or two other points it deals with, resulting from an enormous Act introduced by a Government who, I observe, claim to be in favour of deregulation. I am talking, for instance, of Section 261, relating to derivative claims—or class actions, as they are called in the United States. The Minister referred to that. Our principal concern was that this section might be used by malcontents to obtain publicity for their causes which did not genuinely have anything to do with a particular company.

An example might be where a group of activists pursued a company’s directors under Section 172(1)(d) when the company was operating perfectly legitimately and in good faith in the Amazon basin, or some such place, on the basis that it was possible to imply that its actions somehow had an impact on the habitat of the aboriginals. During the progress of the Bill, the Government showed some worrying innocence about how sophisticated groups of campaigners used legislation like this, for instance, in the United States. It was only after sustained pressure from the Conservative and Liberal Democrat parties that the Government accepted the introduction of some safeguards into the Act.

Nevertheless, it must be more than coincidence that the major US law firm Cohen, Milstein, Hausfeld and Toll, which specialises in class actions, has recently set up a London office, publicly stating that it is lining up huge British-based class-action lawsuits. It would be helpful to hear from the Minister what action the Government intend to take if there is a flood of derivative claims, which could threaten Britain’s attractiveness as a place to do business.

I have a question relating to investigations under Section 1035. What information gateways exist to permit information gathered in the course of an investigator’s work to be passed on to other government departments and elsewhere? This section is not as clear as Section 948, which deals with the analogous point regarding investigations by the Takeover Panel, under which it became clear during the passage of the Bill that information might be—and, apparently, is—passed, for example, to takeover authorities in other EU countries where privacy standards are noticeably slacker than here. Our concerns focus on commercially sensitive information that companies legitimately conceal from their competitors, which from time to time comes into the possession of investigators. Is there a risk that such information might, for example, find its way into the hands of overseas authorities?

My only other question is rather technical, for which I apologise. Am I right in thinking that, while Section 116(4), dealing with transitional arrangements relating to disclosures of the register of a company’s members, is activated under the order, Section 811(4), which deals with the almost exactly analogous provisions relating to disclosures of the register of interests, is not? I may be wrong; if so, I apologise. If not, should not the two sections have been synchronised, and is there a genuine reason for this difference?

Having said all that, the Companies Act has detained your Lordships quite long enough already, and despite the fact that not all the concerns expressed from these Benches have been wholly satisfied, I do not propose to detain the Committee further today.

I thank the Minister for his explanation of this order. I was not involved in the Companies Bill as it passed through the House and, therefore, do not have the background that some other noble Lords here have. I know that it was a long process involving a great deal of time and knowledge. Even this order is 52 pages long and, as the Minister said, is rather complicated and includes important matters such as directors’ duties, annual general meetings, pre-emption rights and even political donations.

I note that the order requires a number of transitional adaptations. It seems unfortunate how the transitional arrangements for the implementation in stages of the major, complex changes in the Companies Act have worked out in practice for real businesses and business people, particularly directors, who wish to understand what is going on and how and when the provisions will apply. I would be interested to hear from the Minister how the new department is communicating the staged application of these very detailed regulations to the business community. How are otherwise very busy company secretaries, particularly in medium-size private businesses, to be kept in touch with these complex changes?

As the noble Lord, Lord De Mauley, asked, how many more implementing orders are there likely to be, and when will they be made? Given that the business community has in many ways already adjusted to, and is ready for, the changes in the Companies Act, perhaps there is a need to get on with implementing it as a whole rather than this awkward, complicated and many-phased approach.

I am grateful to the two noble Lords for their questions, which I shall attempt to answer. I was interested by the opening remarks of the noble Lord, Lord De Mauley, about how lay people running companies will understand these provisions. The noble Lord, Lord Teverson, said that it was unfair that this was how they were going to be told what is happening. Companies are run by professional people who have professional advisers, whether they are lawyers or accountants. We had lengthy discussions on the Companies Bill and, with the other place, produced a major Act that was welcomed by the business community.

I was asked about the target date for implementation. It is our intention to commence all parts of the Act by October 2008. Both noble Lords asked why the Act was introduced in stages rather than in one fell swoop. The commencement timetable seeks to strike a balance between early introductions of benefits for business, such as those on resolutions and meetings, and the need for companies, their legal advisers, auditors and accountants to familiarise themselves with its provisions and make proper preparation for full implementation. We also wish to ensure that we implement EU company law requirements falling due during the implementation period, while implementing the Act in a way which minimises the number of changes for business.

I was asked when the department will lay the commencement orders for April 2008 and October 2008. We aim to make all secondary legislation, including commencement orders, or lay it in draft if parliamentary approval is required, by the end of this year.

The noble Lord, Lord De Mauley, raised a number of interesting questions on derivative claims. Derivative claims are brought by a member or shareholders against a director on behalf of the company. If the action is successful, damages are paid to the company, not the individual member or members who brought the action. They are therefore not equivalent to an American class action.

I was asked whether, if we put derivative action on a statutory footing, it would lead to more claims against directors. It is important that there is greater clarity about how a shareholder may bring a derivative action, but we do not believe that this will lead to a significant increase in the number of actions brought. Shareholders will still want to consider very carefully the case for bringing such actions.

The noble Lord, Lord De Mauley, argued that derivative claims might be used by malcontents. This risk is anticipated by Sections 262 to 264 by requiring the permission of the court for a derivative action. Permission must be refused if a person acting in the interests of promoting the success of the company would not continue the claim.

A very interesting point was raised on investigations, but the answer is long and complicated and we will have to write to noble Lords on that. We will also put a copy in the Library.

I was asked why we have commenced only Sections 116 to 119 and not the rest of Part 8. We have been asked to implement as soon as possible the safeguards for companies’ members which these sections provide. In so far as the remainder of this part involves changes to the law, we consider that those affected should have more time to adapt their procedures.

Why is Section 811(4) not being commenced yet? The rest of Section 811 was commenced in January this year; subsection (4), however, must await the commencement of other provisions relating to the inspection of information held by companies, which will be covered by the fourth commencement order we will table.

I hope that I have answered all noble Lords’ questions.

On Question, Motion agreed to.

Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2007.

The noble Lord said: This order is made under Sections 30(3) and 63 of the Scotland Act. It was laid before both the UK and Scottish Parliaments on 20 June. Section 63 of the Scotland Act allows for the transfer to Scottish Executive Ministers of functions that are exercisable in or as regards Scotland. This is commonly known as executive devolution.

Since 1999, 14 orders have been made under Section 63 of the Scotland Act. These orders demonstrate the Government’s pragmatic approach to the devolution settlement and the flexibility contained in the Scotland Act. In certain circumstances, there will be a case for functions to be exercised by the Scottish Executive Ministers where the subject matter remains the responsibility of this Parliament. Each case is examined on its merits to ensure that functions are exercised at the appropriate level.

In 2000, this Parliament passed the Regulation of Investigatory Powers Act, otherwise known as RIPA, which governs the use of surveillance and information-gathering to help prevent crime. The 2000 Act sets out a series of safeguards and procedures for the use of covert surveillance and the interception of communications. While the interception of communications remains a reserved matter, in Scotland the issuing of warrants to authorise the interception of communications under RIPA was devolved to the Scottish Executive Ministers in 2000. These functions were transferred to the Scottish Executive Ministers by way of an order made under Section 63 of the Scotland Act.

A further order was made in 2003, which executively devolved the power to issue warrants in accordance with international mutual assistance agreements under the 2000 Act. Under RIPA, warrants may be issued to enable UK law enforcement agencies to seek assistance from other agencies in Europe with the interception of telecommunications outside the UK.

Since the order was made in 2003—this is the point of the order—two new agencies have become operational: the Scottish Crime and Drug Enforcement Agency and the Serious Organised Crime Agency. The order before us will allow the Scottish Executive Ministers to issue warrants to the new agencies in accordance with international mutual assistance agreements under the 2000 Act.

The effect of the order will be that the Scottish Crime and Drug Enforcement Agency and the Serious Organised Crime Agency will be able to apply directly to the Scottish Executive Ministers for interception warrants, just as other law enforcement agencies in Scotland can.

On a technical note, to facilitate the transfer of functions under Section 63 of the Scotland Act, it is necessary to specify which functions of the 2000 Act are exercisable in or as regards Scotland. Section 30(3) of the Scotland Act provides that Her Majesty may by Order in Council specify which functions are to be treated as exercisable in or as regards Scotland. The order will specify the aforementioned functions as being exercisable in or as regards Scotland so that they may be transferred to the Scottish Executive Ministers.

We believe that the order is a sensible use of the powers in the Scotland Act and the result is about the practical allocation of executive functions across the United Kingdom. I beg to move.

Moved, That the Committee do report that it has considered the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2007. 21st report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

The Explanatory Notes refer to functions transferred to Scottish Ministers,

“for the purpose of preventing or detecting serious crime or, in circumstances equivalent to that, for the purpose of giving effect to the provisions of any international mutual assistance agreement”.

Nobody could disagree with that. However, will the Minister state categorically that this is not just a clarification but an absolutely necessary measure to make it clear what the Scottish Executive can and cannot do?

Some years ago I was a Minister and had to answer a debate on telephone tapping, with the late Robin Cook. We took our duties very seriously to make absolutely certain that correct procedures should be followed.

I note that the Home Secretary is entitled to set strategic priorities for the Serious Organised Crime Agency. Obviously, operational matters and strategic priorities have a relationship with each other. In dealing with the Scottish Executive on these matters, there should be clarity and goodwill as well as good working relations, with the stress on best practice. Everybody has a common interest in crime prevention. We hope that a meeting of minds will be possible between Her Majesty's Government and the Scottish Executive in the public interest.

I am most grateful to the Minister for explaining the elements that have gone into the drafting of this measure. At first sight, one wondered why it was necessary for the Government to introduce it. The Serious and Organised Crime Agency is a UK body concerned with the security of the whole of the United Kingdom. We are told that this measure is directed at any international mutual assistance agreement.

Paragraph (7)(2)(b) of Schedule 5 to the Scotland Act makes it perfectly possible for a Scottish Minister to assist the UK Secretary of State in carrying out his duties. However, from what the Minister was saying, I think that the initiative for this activity will come from SOCA itself, and it will not be up to Scottish Ministers to take any primary initiative in the matter. I was concerned, if the primary initiative passed to Scottish Ministers, how the co-ordination would be carried out with the various UK bodies that operate in this field.

I have one question for the Minister. I am sure that there is a very simple answer but I should like to be clear about it. In Schedule 2 to the order, the restrictions on the enactment of Section 5 apply only for the purposes of,

“preventing or detecting serious crime”,


“in circumstances appearing to the Scottish Ministers to be equivalent to those”,

which would apply in other circumstances. If it has to appear right for Scottish Ministers, should it not also appear right for the relevant Minister with responsibility for crime? Surely the appearance must be thus on both sides of the fence. I hope that that question is clear.

Perhaps I may take a few moments to answer the question of the noble Lord, Lord Selkirk of Douglas, which was important. To reiterate, there are two reasons why this order is necessary: to include those two agencies. There is no hidden agenda or flexibility to include any other function.

The question is: what will Scottish Ministers be able to do or how will orders be issued? The order transfers functions under Section 5(1)(b) and (d) of the Regulation of Investigatory Powers Act 2000 to Scottish Ministers in respect of serious crime in Scotland. The functions relating to the issuing of warrants in Scotland are transferred to the Serious Organised Crime Agency and the Scottish Crime and Drug Enforcement Agency to authorise the making of requests for the interception of communications under international mutual assistance agreements and the disclosure of those intercepted communications. The purpose of the order is to allow the two organisations to apply to Scottish Ministers for warrants under Section 5(1) in the same way as other law enforcement agencies in Scotland can already do and to disclose the associated material under Section 5(1)(d). Certain related functions under Sections 9(1)(b), 9(3), 10(1)(a) and 10(2) of the 2000 Act are also transferred by this order so as to allow Scottish Ministers to renew, cancel or modify warrants issued to the directors-general of the two organisations. In addition, functions under Section 15(1) of the 2000 Act are transferred so as to allow Scottish Ministers to ensure that certain safeguards are in place in relation to the disclosure of intercepted material.

We believe that the order is consistent with two previous orders made in 2000 and 2003 transferring functions related to the interception of communications to Scottish Ministers. I hope that the noble Lord finds that answer reassuring. If he wishes to have further information, I am sure that my colleagues in the Scotland Office will provide it.

The noble Duke, the Duke of Montrose, asked whether a UK Minister can issue Section 5 warrants in Scotland anymore. The Secretary of State will issue interception warrants in respect of serious crime south of the border and national security for the whole of the UK, and Scottish Ministers will authorise interception warrants in respect of serious crime in Scotland and in order to request interception assistance from the EU MLAC. The noble Duke also asked about cross-border operations. English and Welsh officers do not have powers to conduct directed surveillance in Scotland under RIPA. Why not? It is correct that Part 2 of RIPA extends to Scotland only in limited specified circumstances; for example, UK-wide organisations such as the two we are talking about may operate in Scotland under RIPA. Otherwise, lawful surveillance in Scotland must be authorised under Scottish legislation. However, it is recognised that the current arrangements may hamper some cross-border operations, and the Scotland Office is working with the Home Office to rectify this.

The noble Baroness, Lady Carnegy of Lour, asked about the schedule to the order. We will write to her with a full explanation of it and pass a copy to everyone else who has taken part in the debate.

On Question, Motion agreed to.

Scottish Parliament (Elections etc.) (Amendment) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Scottish Parliament (Elections etc.) (Amendment) Order 2007.

The noble Lord said: It may be helpful to noble Lords if I start by going over the background to the order. On 8 May, the then Secretary of State for Scotland made a Statement in another place about the problems faced at this year’s Scottish parliamentary elections. I repeated his Statement in this House. It focused on the statutory review to be undertaken by the Electoral Commission under Section 5 of the Political Parties, Elections and Referendums Act 2000. That review will focus on the following issues: the high number of rejected ballots, the electronic counting process, the arrangements for postal voting, the decision to hold the parliamentary and local government polls on the same day, the decision to combine the two parliamentary votes on one ballot sheet, the process by which key decisions were made, and the role of the Electoral Commission in the preparations for the elections.

The Electoral Commission has, as we know, appointed Mr Ron Gould, an international expert in electoral administration, to lead its review. As requested by Scottish Executive Ministers prior to the elections, the review will also cover the Scottish local elections. Mr Gould has said that he aims to complete his work by the end of August. Last month, he met with the then Secretary of State for Scotland and the current Minister of State at the Scotland Office. At that meeting, Mr Gould asked about the possibility of gaining access to ballot papers to examine the nature and cause of the high level of spoilage. Ministers undertook to follow up this request and, following consideration of the legal framework and official-level discussions with the review team, this order was laid before the House.

That, briefly, is the history to date of the order. I will now say a little about its substance. It provides a mechanism to enable the Electoral Commission to access the ballot papers and electronic counting images from this year’s Scottish parliamentary election. Currently, papers are sealed up and held securely by sheriff clerks, and access can be granted only in cases of alleged fraud or where an election petition is being prepared. The same applies to the electronic record, which is a new item in Scotland but which can provide the review team with information about spoilt ballot papers and may reduce the need for the team to examine actual ballot papers.

Before the commission’s review team is given access, it is vital that safeguards are in place. The order’s primary security feature is that it denies the commission access to the corresponding number lists, which link elector numbers with the barcodes and numbers printed on the back of ballot papers. Without these lists, ballot papers cannot be linked back to individuals and so the secrecy of the ballot is maintained. Further, and to ensure proper controls over documents, the order requires that, once the review team has completed its work, the papers and records must be sealed up again, returned to the relevant sheriff clerk and any copies destroyed.

Since the time of this House should be used wisely, we do not yet know whether further scrutiny might be desirable after future Scottish Parliament elections or by-elections. The order is not expressly limited to the poll last May. However, it does not simply provide open-ended access.

Control is achieved by linking access to Section 6(2) of the Political Parties, Elections and Referendums Act 2000, which allows the Secretary of State to request the commission to undertake reviews into specific subjects. Under the order, the commission may access ballot papers only when requested to do so by the Secretary of State. Since the Secretary of State is answerable to Parliament, the order therefore provides for parliamentary accountability for any decision to provide ballot paper access.

As local elections in Scotland are a devolved matter, the order applies only to the Scottish parliamentary elections. If we are to learn the lessons of the 2007 elections, the Electoral Commission’s review team must, as has been requested, have access to ballot papers. The order provides that access, while maintaining the secrecy of the ballot and ensuring parliamentary accountability. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Scottish Parliament (Elections etc.) (Amendment) Order 2007. 23rd report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

The order deals with an aspect of our life which is vital when we pin our faith on democracy. As the Electoral Commission’s briefing states, democracy depends on public confidence in the electoral system. The Scottish elections came near to making a nonsense of that process. More than 140,000 votes were rejected, which is the proportional equivalent of 1 million in a UK general election. We are always interested in finding out what went wrong.

Some of the causes mentioned by the Minister are surely obvious: too many systems, too much novelty, and the bright idea of introducing everything on the same day. We would like to be sure that any inquiry gets to the bottom of things, but we must be doubly careful that nothing is done to set a precedent which could be unscrupulously used in the future. If any change in electoral legislation is contemplated, the proper safeguard is that it should be in place before, rather than after, the conduct of the poll. I hope that enough care is being taken in considering this legislation and expect the Minister to limit any change to as specific an area as possible.

A great many of us will have received a brief from the Electoral Commission, in which it clearly states two things: first, the major obstacle that it faced was its inability to access the rejected ballot papers; and, secondly, it considers that any measure that we pass should be restricted to the current circumstances.

Any powers that were required in this regard could have been achieved under Section 12(1)(b) of the Scotland Act, whereas we notice that the Minister is calling on the powers in Section 12(1)(a).

Access to rejected ballot papers is allowed under the Scottish Parliament (Elections etc.) Order 2007 but, as the Minister explained, only for the purpose of instituting a prosecution or taking up a case. I understand that that route is not being pursued. Very properly, these provisions are subject to the judgment of a Court of Session or a sheriff. Here we are being presented with a statutory instrument to give the Electoral Commission access to all ballot papers incorporated into an ongoing legal instrument which can be triggered by a politically-appointed body requesting permission from the Secretary of State. Can the Minister tell the Grand Committee why it was not considered sufficient to give powers limited as the Electoral Commission recommends? The need for ongoing powers would, very properly, then have been part of the Electoral Commission’s review, and that, I expect, is what it would have wished.

There is one point on which the Minister could offer clarification. The Explanatory Notes state that the provision is to do with the conduct of the elections for the Scottish Parliament, and that is perfectly clear; but the Explanatory Memorandum states at paragraph 5 that the instrument has UK extent. What is the meaning behind this provision? When these ballot papers are released, how many people will have access to them? They cannot be left lying around in some office. Will a person be identified and nominated as the person responsible? Will a requirement for how they should be sealed up again and returned be laid down?

A further consideration is that under rule 70 of the Scottish Parliament (Elections etc.) Order 2007, any production and scrutiny of sealed electoral papers is available only after obtaining authority through a legal, not a political, channel. Can the Minister explain why the element of legal scrutiny of the necessity for investigation of sealed electoral material has not been included as part of this instrument? The Government have made a great issue of how every possible element of the judicial process should be totally separated from the political process. The electorate has received a great deal of assurance that electoral material is in the custody of the legal process, and here we are saying that a Secretary of State and a Government-appointed body can get together and have a look at the ballot papers.

Surely this is not an issue that needs consideration for Scotland alone; it is something for our whole electoral process in the UK. Given the importance of this, I give notice to the Minister that we may consider moving a Motion when this returns to the Floor of the House.

Perhaps I may preface my remarks by expressing some sympathy for the Minister, the noble Lord, Lord Evans. It seems to me that he is constantly being dragged here to propose Scottish orders in which he has no genuine interest. I want to know what has happened to the Advocate-General who is now installed in the House. The noble Lord, Lord Selkirk of Douglas, will agree that he was a perfectly good Solicitor-General in the Scottish Parliament. His light was not hidden under a bushel there and I do not see why it is hidden here; we never hear from him. It would be very good to have a Scottish Minister presenting these orders. So I have every sympathy with the noble Lord, Lord Evans.

Turning to the issue, I endorse entirely what the noble Duke, the Duke of Montrose, has just said: this was an extremely grave matter. The scale of spoilt ballot papers ruined the reputation of the elections in Scotland. It is very serious when the number of spoilt ballot papers in many constituencies exceeded the majority of the elected member. That is a disgraceful situation. It is why many of us pressed for a wholly independent inquiry into the conduct of the elections.

None the less, the Electoral Commission has taken this on board. Mr Ron Gould is well known to me—he is a Canadian expert with whom I worked in the International Institute for Democracy and Electoral Assistance in Stockholm—and I look forward to having a one-to-one meeting with him later this week when I will no doubt repeat my speech to him personally.

It is sensible that, for the inquiry to be properly conducted, it must be able to look at the ballot papers and see what caused this extraordinarily large number of spoilt papers. I fully endorse the Government’s decision to bring forward this order to enable Mr Gould and his colleagues to do that.

In my view, some of the theories about why there was a large number of spoilt papers are misplaced. After the noble Lord repeated the Statement in your Lordships’ House, there was a lot of criticism about the fact that the elections for the Parliament and the local authorities were held on the same day. However, that had happened before and we did not have the problem then, so that cannot be a real grievance. My own experience of going into the ballot booth was that the instructions on the ballot paper were extremely inadequate. I think that that will probably be discovered as one of the main reasons why there were so many spoilt papers.

As to the conduct surrounding the postal votes, I hope that one question the Electoral Commission will consider is why on earth some local authorities took it into their heads to subcontract the handling of the postal votes to an organisation south of the border. I have no prejudice against organisations south of the border but clearly they could not have the knowledge of the local geography that a local authority has. In my view, they had no business exporting responsibility for seeing that the postal votes were delivered to the right people. As I think I have mentioned before, my noble friend Lord Kirkwood, who lives a couple of miles away from me in the Ettrick Valley, was sent the ballot papers for a completely different ward, so the organisation handling this clearly did not understand the nature of the geographical boundary, and I do not think that that should be allowed to happen again. I know that that is going a bit wide of the order but it should certainly fall within the remit of the inquiry.

I am also seeking an assurance from the Minister that, in presenting the order, the remit of the Electoral Commission’s inquiry will be extremely wide. It should not just look at the issue of spoilt ballot papers—and I know that that will not be the case—but I want to ensure that it will genuinely look at the whole administration of the election.

When I first came into politics, party names did not appear on the ballot papers, and that was for a very good reason. Every time the returning officer declared an election, he said that we were elected to serve the people in such and such a constituency, so the ballot papers did not contain the party names. That was changed later and I understand why. It was for the convenience of, and to provide clarity for, the electorate. But now things have gone too far and we have sloganising on the ballot paper. I think that that was a contributory factor in the shambles of the Scottish election. Why should we allow someone to declare on the ballot paper that they are standing for Free Lollipops for the Masses (Liberal Democrat)? It appears that there is nothing to stop that happening.

Campaign slogans were introduced by Tommy Sheridan. He was the first person to use them in the previous election, and that was followed up very strongly by Alex Salmond. Most of the candidates who stood for the Scottish National Party put on the ballot paper, “Alex Salmond for First Minister”, even when they were standing for local elections. That made a complete nonsense of the whole local authority election. They did it partly because having a name starting with the letter A meant that he was at the top of the list every time, but it also caused confusion when it came to choosing between individual members and the party list system.

Therefore, I hope very much that the Electoral Commission will look at that process; it will probably mean taking back responsibility for registering political party names. Of course, if a political party is allowed to register itself under a whole series of names and then select the one that it thinks it might be advantageous to have on the ballot paper, that will be an abuse of the system. These wider issues have to be examined, and I am sure that Mr Ron Gould will do so if he is allowed. I hope that the Minister will be able to give us an undertaking that the inquiry will be thorough and widespread, and that this order is simply one small part of it.

The noble Lord, Lord Steel, has raised a number of extremely important points. I am only sorry that this debate is taking place in the Moses Room, because that the public need to know that the House of Lords is discussing the issue. I hope that we shall be able to have a further discussion when the order goes before the Chamber.

The point about sloganising in the name of the party is extremely important. People really resented this. Members of the Committee who were here at the time may remember when the ballot papers for the Scots Parliament election went through the House of Lords and we discussed it here in the Moses Room. We looked at the ballot papers and raised these points. I asked whether it was necessary for a party to call itself the same thing in different parts of Scotland. I received a letter saying that it was not. A party could put itself at the top with the letter A in one part of the country and lower down with another letter in another part. That is quite extraordinary. People in Scotland were horrified by what they felt was a performance worthy of a banana republic; that was said in a number of newspapers, and people living around me agreed. They were very embarrassed on Scotland's behalf that we should have such an ineffective system.

The reasons have all been given, but one incident was reported in several papers, although I have not confirmed it. A ballot box arrived from some remote polling station and, when it was opened, the ballot papers were soaking wet for some reason that nobody understood. It was reported that there were 400 more ballot papers in the box than votes had been cast at that polling station. That is very shocking if it is true, and the Electoral Commission needs to go into it.

The commission is right to want to be able to look at the ballot papers and deduce from its examination what actually happened. Having asked for this, the commission is pleased to see the order but it feels that two things are wrong with it. First, the commission can do this only if instructed by the Secretary of State. The commission is independent and does not want to be mixed up with politics. It would prefer the order to have been worded in such a way that it could do this under its existing powers. Why is it being done in this way? That is a big question. My last question was very small and I was horrified to hear that I was going to get a letter about it because nobody knew the answer. But this is a big question and I am sure that the Minister will be advised why it is being done in this way.

The other point that the commission makes, which my noble friend the Duke of Montrose has already mentioned, is that the Secretary of State can do this again and again under the order. The act that he is performing can be repeated—and not only can it be repeated but it is likely to have a knock-on effect for elections for other bodies. We do not want our electoral systems to be totally different or for their rights and wrongs to be totally different in different types of elections and different parts of the United Kingdom. So there could be a knock-on effect. The commission suggests that this could be a one-off order just for the circumstances of this time, and it will be interesting to know why that is not the case. It seems a much more sensible idea. Why does the Secretary of State have to give the instruction if it could be done by an independent commission with a different order to enable it to do that? Could it not be a one-off affair in any case?

I have some probing questions. The noble Duke, the Duke of Montrose, has highlighted the issue of whether this provision should have been founded upon Section 12(1)(a) of the Scotland Act or Section 12(1)(b). My understanding is that (1)(a) refers to electoral processes, while (1)(b) refers to irregularities. The elected representatives in Scotland expect this matter to be resolved by the Electoral Commission getting to the bottom of what happened. If any obstacle is put in its way, there will be a lot of dissatisfaction.

I declare an interest. The noble Lord, Lord Steel of Aikwood, and I were among the last three to be elected to the Scottish Parliament. We had to wait another 24 hours for, if I may say so, another substantial mistake at the polls. In fact, 2,000 votes were not even counted. When I wrote to the Secretary of State, John Reid, about that, he replied that he had no powers to intervene; he could do so only if there were a court action. Will the order make it less likely that people will have to contemplate court actions? I do not think the noble Lord, Lord Steel, Robin Harper, the first Green MSP, or I had any desire whatever to be involved in an expensive court action. As we were all convincingly elected, the only thing such an action could have proved is that one of us might have been elected before one of the others. As we all got in, that did not seem to matter to any of us. If in practice the order means that court actions would be less desirable and less frequent, that would be a service.

As these powers have been given to the Electoral Commission in Scotland but not in England, is that not an inconsistency? Is it not undesirable to have a different form of election north and south of the Border?

I could perhaps be forgiven for feeling a little sorry for myself. I do an order on the Companies Act 2006 and the noble Lord, Lord De Mauley, regrets that it is not being answered by my noble friend Lord Jones of Birmingham. I am then told by the noble Lord, Lord Steel, that he would prefer the Advocate-General to be answering these Scottish questions, and accuses me of having no genuine interest in Scotland. I have been spokesman for Scotland in your Lordships’ House for four years, I gather, although I thought it was five. I have an interest in Scotland and it is perhaps rather parochial to suggest that you can speak on Scottish orders only if you are Scottish.

I shall deal first with why the order is in Grand Committee, because the noble Duke, the Duke of Montrose, said he was unhappy about that. Notice was given on Wednesday 4 July of our intention to take the order in Grand Committee. The House agreed on 5 July to refer the order. We require notice from any party that is unhappy with a referral to give us the opportunity to consider how that can be addressed. We received no such notice until this afternoon. The order requires approval before the Summer Recess, so, if it is to go through—as I am sure we all want it to—it will unfortunately not be possible to take another route on it.

I will answer the questions I have been asked as best as I can. The noble Duke, the Duke of Montrose, and the noble Baroness, Lady Carnegy, asked why the order is not limited to the current election. A form of drafting providing the commission with access to ballot papers as part of its statutory review under Section 5 of the PPERA, along with a sunset provision limiting the order to the 2007 elections, was an option that we considered. On balance, however, the Government felt that if the commission were given access to ballot papers, the more prudent use of parliamentary time would be not to introduce legislation that applied only to these elections but to provide a mechanism capable of being used in the future, should that be necessary. This was a fine judgment, but we believed it to be correct. Ultimately, given that the order is subject to affirmative resolution, it will be for Parliament to decide.

I thank the Minister for giving way. The idea in his earlier statement that if this were done in two parts it would take up parliamentary time unnecessarily is a bit unfair. Surely the most important thing we do here is govern the democratic process, and that takes however much time it needs.

The point I was making was that there was ample time for any noble Lord or political party to object to the order being heard in Grand Committee in the Moses Room, but we received no such communication. I notice the noble Baroness is shaking her head.

I was in fact referring to the Minister’s comment in his earlier speech, when he said that it was to save time in Parliament that he was combining this with an ongoing piece of legislation rather than simply legislating on the one issue.

That is the point I made. Our view is that this is the appropriate way to proceed with the order. Clearly there is a disagreement here.

The noble Duke and the noble Lord, Lord Selkirk of Douglas, asked why the order is made under Section 12(1)(a) of the Scotland Act and not Section 12(1)(b). The provision is about how the election is conducted, but Section 12(1)(b) deals with the questioning of an election and consequences of irregularities. We are clearly not dealing with irregularities. Although at first sight the draft order might appear to be concerned with questioning an election, that phrase has a technical meaning in electoral legislation.

The 2007 order, which the draft we are debating will amend, adopts at Schedule 6 a provision contained at Section 120 of the Representation of the Peoples Act 1983. That provision relates to the method of questioning an election. It states that:

“No parliamentary election … shall be questioned except by way of”—

an election—


The Electoral Commission and Mr Gould’s review are not questioning the election, in that sense, but examining how the election was conducted. So we are satisfied that it is correct to find vires for the order in Section 12(1)(a) and not Section 12 (1)(b).

The noble Duke also asked: why UK extent? It is the same as the order it amends; the 2007 order has UK extent. He asked how access to the papers will be restricted. The order requires that copies of papers must be destroyed after scrutiny. Detailed arrangements will be for the commission and the sheriff clerks to decide. The noble Duke asked why this is not linked to a court order. It is true to say that the mechanism does not require a court order, but the instrument is subject to affirmative resolution that provides for the appropriate level of scrutiny.

The noble Lord, Lord Steel, wonders whether the commission’s review remit is wide enough. We believe it is. It is not limited to spoilt ballots; it will consider e-counting, postal votes, spoilt ballots and so on. The intention is that we fully review what happened and come up with the proper answers. There will then be an opportunity for discussion.

I beg your Lordships’ pardon, but I ask the Minister again: could he please write to us? I am slightly worried because he keeps saying that papers might be burned. Presumably the issue is that the papers should be returned to the sheriff’s officer, although some other papers may need to be burned.

They will be returned and it will be up to the sheriff’s office to decide what should happen to them. If there is more to say on this, we will write.

The noble Lord, Lord Steel, and the noble Baroness, Lady Carnegy, asked about party descriptions. Section 49 of the Electoral Administration Act 2006 provided for a registered political party to register up to 12 descriptions of six words or more to be used on nomination papers and/or ballot papers. Responsibility for registering party descriptions lies with the Electoral Commission. The criteria the commission has to follow in registering party descriptions is set out in the Electoral Administration Act.

The noble Baroness, Lady Carnegy, asked whether this order will set a precedent. The administrative problems faced in the 2007 Scottish elections dented public confidence—there is no doubt about that—and, in order to rebuild that confidence, we need to ensure that the commission’s review is detailed, thorough and has access to the information it needs, including ballot papers. Only in this way can we be sure to learn the lessons of the elections and be seen to be learning from them, which is very important. The order is limited to Scottish Parliament elections. Following the review, it is possible that the Electoral Commission may request that a similar power be written into electoral law relating to all elections. Such a request would, of course, be for Parliament to decide upon.

The noble Lord, Lord Selkirk of Douglas, asked whether this order will make it less likely that people will need to go to court to question a result. The order does not affect the general provisions relating to election petitions; instead, it is a response to particular circumstances.

If I have failed to answer any questions, noble Lords will receive letters, and copies of correspondence will go to everyone who has taken part in what has been an interesting debate.

On Question, Motion agreed to.

Railway Pensions (Transfer of Pension Schemes) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Railway Pensions (Transfer of Pension Schemes) Order 2007.

The noble Lord said: This order transfers some of the members, assets and liabilities of six historic British Rail pension funds to the 1994 Pensioners Section of the Railways Pension Scheme. Where members of these historic funds are also members of the British Rail 1974 Pension Fund, their membership and the liability of the 1974 fund to make payments to them will also be transferred. Where discretionary benefits are given to members of the British Rail historic funds, these benefits will be continued. Once the transfer has been completed, these historic funds will be wound up.

The British Rail historic funds are: the London and North Western Railway Provident Society for providing pensions for the widows and orphans of members of the salaried staff; the Great Western Railway Supplemental Pensions Reserve Fund; the Great Western Railway Salaried Staff, Widows and Orphans Pension Society; the Great Northern Railway Superannuation Fund; the Great Western Railway Inspectors and Foremen’s Special Pension Fund; and the Southern Railway (South Eastern and Chatham Section) Enginemen and Motormen’s Pension Fund Society.

The main purpose of the proposed transfer is to achieve more efficient administration of the pension arrangements for railway pensioners and a saving in administrative costs for the taxpayer. This ensures that the running costs of the scheme are proportionate and do not erode the benefits. The Secretary of State is the designated employer of the 1994 Pensioners Section. He is also the designated employer of all but one of the historic funds. The exception is the South Eastern and Chatham fund. Stagecoach South Western Trains Limited inherited responsibility for this scheme at privatisation because it employed the last active member of the scheme.

The 1994 Pensioners Section is mainly comprised of all the pensioners plus the deferred pensioners at the time of privatisation. The section benefits from a Crown guarantee. When the 1994 Pensioners Section was set up, a special reserve fund was established within it. If a surplus arises under the 1994 Pensioners Section, 40 per cent of it is distributed to the scheme members and 60 per cent is directed to the reserve fund. The reserve fund is used to make up any future shortfall in pension liabilities under the 1994 Pensioners Section. The special reserve fund is currently sufficient to meet any deficit in the 1994 Pensioners Section even after the transfer of liabilities effected by the transfer order. If in the future the reserve fund were to be insufficient to meet the liabilities of the 1994 Pensioners Section, the Secretary of State would have to meet any shortfall under the guarantee issued by him.

The transfer involves extending the guarantee already given to the 1994 Pensioners Section to cover the liabilities of the historic funds. It should not increase the exposure of the Secretary of State except in relation to the South East and Chatham fund, since the other historic funds already benefit from a Crown guarantee. The Secretary of State is expected to make a top-up payment of approximately £180,000 in relation to the Great Western Railway Salaried Staff, Widows and Orphans Pension Society, and Stagecoach South Western Trains Limited is making a payment of approximately £44,000 in respect of the South East and Chatham fund, so that those transfers comply with the Pensions (Protection and Designation of Schemes) Order 1994 and are transferred on a fully funded basis.

From the point of view of the 1994 Pensioners Section members, the transfer makes little difference. There are approximately 2,942 members in the historic funds as compared with some 155,592 members in the 1994 Pensioners Section. The historic funds assets being transferred are about £54 million compared with £4,591 million in the 1994 Pensioners Section. The liabilities transferred represent about 1 per cent of the current 1994 Pensioners Section liabilities. The transferring liabilities are therefore more than covered by the transferring assets.

For members of the BR historic funds, the proportionate cost of administering the 1994 Pensioners Section will be much lower. There is also an improved prospect of enhanced benefits, because the 1994 Pensioners Section is not restricted to a cautious investment strategy and its rules permit a distribution of 40 per cent of the surplus among members.

Two of the BR historic funds currently have a surplus of assets over liabilities. There is little likelihood of any benefit improvements to the members of these funds if they remain as separate funds, but the transfer will provide for those members to benefit from a one-off 4 per cent uplift in their benefits. Consultation took place with the trustees of each of the pension schemes concerned. Those trustees represent the interests of the members and are made up representatives of the pensioners, trade unions and employers. The transfers have the support of the trustees of all of the funds involved. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Railway Pensions (Transfer of Pension Schemes) Order 2007. 19th report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

I am grateful to the noble Lord for explaining in great detail this order. We on these Benches are quite happy to accept it

I declare an interest as a member of the London and North Eastern Railway pension fund, although I never worked on it, and I am a beneficiary, I think, under the 1994 fund. What is being done is simply a bit of administrative tidying-up. There are lots of historic anomalies about the railway, and I am pleased to lend our support to the order.

I am grateful for the overwhelming support from the Benches opposite. The noble Lord, Lord Bradshaw, properly declared his interest. It is a little sad that the historic funds are being wound up. My understanding is that one of them goes back to 1851, as noble Lords can probably read in its long title. However, it makes good sense to transfer the funds. We do not think that any member of the historic funds or the 1994 Pensioners Section, including the noble Lord, Lord Bradshaw, will be at all disadvantaged. As I said earlier, there is a prospect of enhanced benefit for some members, who will now automatically benefit from a share of any future surplus in the 1994 Pensioners Section. I assure noble Lords that all members will be notified of these changes; in fact, they have already been put on notice. Some of them will no doubt be very happy, particularly when they realise that they will be 4 per cent better off.

On Question, Motion agreed to.

European Communities (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Albania) Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the European Communities (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Albania) Order 2007.

The noble Baroness said: The western Balkans, of which Albania is a part, has had a troubled past. We can all remember the distressing images that multiplied across our television screens throughout the 1990s of conflict, ethnic cleansing, massacres and breakdowns of law and order. Our challenge today—this is one of the UK’s foremost foreign policy priorities—is to help this region to draw a line under its troubled past and move towards a more stable future.

The UK’s vision is to see all the countries of the region move steadily towards European and Euro-Atlantic integration. This is the right vision for these countries. It provides the incentives for reform and will bind the countries together into relationships of mutual co-operation and interdependence. It is also the right vision for the existing EU. These countries are not remote and distant; they directly border the European Union. Our interests are served by their progress towards meeting EU norms and by their eventual membership of an EU, which will offer security and prosperity to the western Balkans region. That is the context against which today’s debate is taking place.

At the Zagreb summit in November 2000, the EU established a process to bring the region closer to the EU, fostering stability and facilitating development. The agreement that we debate today is a key part of the process. It creates a contractual relationship between the EU and Albania, setting the terms for free trade and easier movement of workers, services and capital. It also sets out responsibilities in the areas of justice, freedom, security and regional co-operation. The Government are convinced that proper implementation of this agreement will help to bring stability, economic growth and strengthened rule of law to Albania. That will be particularly important, not just for Albania but also for the UK.

Albanian criminal interests directly impact on the UK’s well-being. Our best way of dealing with them—both bilaterally and through the EU—is to establish the close partnership with Albanian institutions that will allow a strengthening of the rule of law in Albania, leading to stronger capacity to tackle organised crime and corruption.

As part of the EU integration process, the countries of the region are required to take forward key reforms in areas such as public administration and economic governance and in the fight against organised crime and corruption. While more progress is needed across the region, the prospect of eventual EU membership has been a powerful driver behind reform efforts, improving governance and stability. As these countries move closer to the EU, we hope that the likelihood of a return to conflict will become increasingly improbable.

The new EU instrument for pre-accession—IPA—will help Albania in meeting the economic, political and other criteria for EU membership. The allocation for Albania for the period 2007-09 is €212 million.

Albania’s Stabilisation and Association Agreement—the SAA—has now been ratified by Belgium, Spain, Hungary, Ireland, Lithuania, Luxembourg, Latvia, Poland, Sweden, Slovenia and Slovakia, as well as the Albanian Assembly and European Parliament. The key elements of the agreement for Albania are that it recognises Albania as a “potential candidate” for the EU; it sets out the stages for Albania to progress towards eventual membership via a closer partnership with the European Union; and it promotes regional co-operation and will open up regional economic opportunities. In addition, the SAA supports the efforts of Albania to complete the transition into a functioning market economy, to promote harmonious economic relations and gradually to develop a free trade area between the Community and Albania.

Implementation of the SAA will be a central and continuing requirement of the European Union and, along with the priority reforms highlighted in the European partnership between Albania and the EU, will help to reinforce public administration reform and good governance. The Department for International Development and the Commission are working to support these reform efforts.

The Government believe that the EU’s role in encouraging reform and stability is vital for the future peace of the western Balkans. The SAAs are important building blocks in this process. The Albania stabilisation and association agreement will serve as a strong political message of EU support to the wider region and should provide motivation for Albania and other western Balkan states to make further progress, taking the steps needed to move further towards the EU. The process benefits the UK, not only by reducing the likelihood of future instability but also by driving progress in key areas such as the fight against organised crime and corruption. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the European Communities (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Albania) Order 2007. 21st report from the Statutory Instruments Committee.—(Baroness Royall of Blaisdon.)

I thank the Minister for explaining the order, which is, theoretically, a first step towards EU membership for Albania. We on these Benches fully support EU enlargement into the Balkans region providing that the candidate countries meet the necessary criteria.

The SAA was signed with Albania, after three years of talks, in recognition of the progress made with political and economic reform. However, while there have been signs of economic progress there, with inflation under tighter control and some growth, the country remains still one of the poorest in Europe. The EU is keen to encourage further reform, particularly in regard to tackling organised crime and corruption and developing media freedom and property and minority rights. Last year the United Kingdom provided around £2.3 million of bilateral aid to Albania. This was mainly in the form of technical assistance aimed at building government capacity for policy formulation and for the development of effective services.

Given the well-documented problems of corruption that still plague Albania, what safeguards did Her Majesty’s Government seek to put in place to ensure this money was well spent? According to a recent survey, more than 60 per cent of Albanians perceive the United States as the best advocate of their country’s interests and on his recent visit to Albania President Bush was given a hero’s welcome. Do the Government have any plans for discussions with our American friends to encourage the Albanian Government to introduce the reforms required to meet the accession criteria of the EU?

Finally, Albania has made it clear that the key objective of its foreign policy is to join Euro-Atlantic organisations. Given that Albania has contributed to operations in Iraq and Afghanistan, can the Minister provide an update on Albania’s efforts to join NATO?

I join the previous speaker in welcoming this order and from these Benches we wholeheartedly approve it being passed. I was also a member of the Joint Committee on Statutory Instruments which, at the end of June, listed this draft statutory instrument for approval by the House. I thank the Minister for her explanation of the background to the treaty with Albania. Incidentally, it is considered to be a very well-written treaty and a good model for future occasions when there will be other applicant countries, although not necessarily only from that geographical part of the world. We on these Benches were grateful for the way in which the UK Government also took an enthusiastic lead with other countries.

On the tally the Minister described recently, around half of national parliaments have already ratified, plus the European Parliament. Presumably that process will continue apace, although I imagine there will be the usual summer interval before most parliaments resume again in September—unlike our own Parliament, which resumes a little bit later than that.

Although the situation after the July 2005 parliamentary elections was not entirely satisfactory—indeed, the way in which those elections were administered was not considered to be 100 per cent correct—none the less, they were impressive for a newly democratic-structured country, and the international observers considered the anomalies to be within the bearable spectrum of examples, compared with other countries. That was rather encouraging.

The country has, therefore, been recovering from some of the tensions and turmoil involved in those elections and the later local elections. President Bush received an extraordinary welcome in Albania. It was described by the previous speaker as a hero’s welcome, and some people, prima facie, thought that that might have been the case but, then again, there may have been second thoughts that it was a competition as to who would be able to snatch his watch. There were further doubts about what happened with that article and differing explanations were given by the State Department and the President’s office in the White House.

Albania is, by all appearances, firmly intent on being a strong ally of the West and it is an applicant of increasing respectability for joining the leading institutions in which it has expressed interest—NATO and the European Union—even if that process is inevitably slow. The country has benefited from considerable support from the European Union’s aid programmes, the support programmes under this treaty and the UK’s development assistance that has been mentioned. With those thoughts, we are pleased to support the order.

I am grateful for the support for the SAA process and this order, as well as for the points raised in the debate. We all fundamentally agree that the countries of the western Balkans need to continue making progress towards stability and that they need to continue to move away from the dark shadow cast by the 1990s. That will require our continued commitment to the region and to promoting its political and economic process.

As regards the questions of the noble Lord, Lord Astor, about safeguards to ensure that the money provided for Albania is properly spent, UK embassies and EC delegations on the ground monitor the effectiveness of EU and EC spending. The integrated planning system for government, which was a key element of programme activity funded by the UK, has been monitored by the UK and its international partners. Do the Government have any plans to discuss Albania’s progress with the United States? I do not know, but I will certainly mention that to my colleagues in the Foreign Office. I am sure that it will be discussed at some point.

With regard to NATO, Albania hopes to get an invitation to join the alliance at the 2008 NATO summit. At the previous NATO summit in Riga, the allies committed to extending invitations to aspirant members, provided that they met the required standards. Success for Albania will depend on it meeting the conditions set out in its NATO membership action plan and satisfying NATO allies that it is indeed ready to take on the responsibilities of membership.

The country is reasonably well positioned in many respects, but in the coming weeks and months its political class must show that it has the political maturity to deal with political challenges to keep the reform process on track. That will give Albania the best chance of receiving an invitation. As the noble Lord, Lord Dykes, said, Albania is already proving itself to be a strong ally of the West. I am grateful for the noble Lord’s kind words about the treaty itself and the fact that it is, perhaps, a model. It is good to hear that a treaty is a model, because often we are lambasted about treaties. I assure noble Lords that the ratification process will continue. Everything is going according to plan and we can see no problems. The noble Lord was right to be encouraged by the recent election process, which is a great tribute to Albanians.

The Government believe that the prospect of European and Euro-Atlantic integration has been vital in driving reform and encouraging stability in the western Balkans. The stabilisation and association agreements are important building blocks in this process. Albania’s SAA will provide a framework for continued reform and will send a strong signal to the countries of the region that we are serious about their European future. We will continue to encourage progress towards the EU, while insisting that the countries meet the necessary conditions. I commend the order to the House.

On Question, Motion agreed to.

Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007

rose to move, That the Grand Committee do report to the House that it has considered the Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007.

The noble Lord said: Anti-social behaviour ruins lives. It does not just make life unpleasant but prevents the renewal of disadvantaged areas and creates an environment where more serious crime can take hold. It is also very expensive. It is estimated to cost the British taxpayer £3.4 billion a year. One of the commitments in the respect action plan, launched in January 2006, was to consider how to encourage those involved in persistent anti-social behaviour to engage with intensive family support.

As part of the plan, we developed the policy of a housing benefit sanction for people who have been evicted for anti-social behaviour and then refuse to take up offers of help. This proposal is different from sanction proposals previously considered but not taken forward. It is a post-eviction sanction, designed to encourage people to access support to tackle their problem behaviour, as opposed to a pre-eviction proposal intended to deter but not tackle the causes of the anti-social behaviour. The aim is to provide a very strong incentive to encourage these households to undertake rehabilitation when they have refused other offers of help.

This measure was thoroughly debated during the course of the Welfare Reform Act 2007, so I know that there are concerns about its impact on the vulnerable. However, the measure is about helping vulnerable people and about getting people in crisis to accept the support offered to them. Because they have already been evicted, the chances of it happening again are high unless they change their behaviour. As I told noble Lords during the passage of the Welfare Reform Bill, this policy will be considered a success if no sanction is imposed. It will mean that people have accepted the help that they need.

We know that intensive rehabilitation can achieve positive and significant changes in behaviour, resulting in long-standing difficulties and entrenched anti-social behaviour being stopped. The evaluation of the Dundee families’ project showed an 84 per cent success rate with the most difficult families, using a variety of key indicators, including prevention of issuing anti-social behaviour orders and preventing children being taken into care.

A Sheffield Hallam University evaluation of six family support projects found that the projects were strong on their primary objective of reducing incidents and complaints about anti-social behaviour. An 85 per cent reduction in anti-social behaviour was recorded. This study used key indicators, including the reduction in the level of complaints and improved school attendance over two years. Evaluations show success rates of over 80 per cent. It means that behaviour improves and communities get respite from the behaviour that is plaguing them, and it also delivers other positive outcomes. An 84 per cent improvement in school attendance was recorded across the six projects covered in the Sheffield Hallam evaluation. Parents often report feeling better able to control, supervise and parent their children.

Given the strong evidence that such rehabilitation works, it is justifiable that a sanction of benefit should be linked to the refusal of such help and support. The fate of those who have a sanction imposed is within their own hands. Benefit will be reinstated if they choose to take up the rehabilitation services offered to them. These regulations underpin the possible sanction of housing benefit and set the rate for the reduction. It is right that they are subject to the affirmative procedure. The regulations would allow the pilots to run for two years, starting from 1 November 2007. Under the primary legislation, the conditions that must be satisfied for a sanction to be applied are that the former occupier has been evicted on grounds of anti-social behaviour; they have secured alternative accommodation and a new claim to housing benefit has been made; they have been issued with a warning notice requiring them to take specified action to avoid a sanction; and they have failed, without good cause, to comply with the warning notice.

Regulation 3 sets out that that must all take place within a pilot area—not necessarily the same pilot area—and within the pilot period. Under regulation 4, if those conditions are satisfied, housing benefit will be gradually reduced in three phases, the intention being that the increasing deduction acts as a rolling incentive to take up support. Because we want this to be a strong incentive, it is a severe sanction, taking away up to 100 per cent of benefit. However, if the person falls into the category of “person of hardship”, the maximum reduction is 30 per cent. Hardship is defined in regulation 5. As well as those listed as automatically qualifying for hardship, local authorities have discretion to award hardship in any case where they have taken account of all the circumstances of the household and are satisfied that it will suffer hardship.

The proposed regulations would amend the Social Security (Loss of Benefits) Regulations 2001 so that, where another sanction was being applied to the household’s housing benefit for benefit offences, the rate of deduction that would apply would be the greater of the two rates. The schedule to the two regulations lists the local authorities where the pilots will take place, and only claimants in those local authorities will be subject to the sanction of reduced housing benefit. The local authorities piloting the scheme are volunteers who believe it is a tool that will be useful to them.

Further detail on the sanction scheme will be provided in negative-resolution regulations—the Housing Benefit (Loss of Benefit) Pilot Scheme Supplementary Regulations 2007. Those regulations contain details of appeal rights and of what will be considered good cause not to comply with a warning notice. They will provide the rules about discretionary housing payments and provide the arrangements for sharing of information between the courts, the DWP and local authorities. Detailed guidance will be provided for housing benefit administrators, the courts and local authorities. It is being drafted in conjunction with the piloting local authorities and with relevant stakeholders.

In my view the provisions of the Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007 are compatible with the European Convention on Human Rights. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Housing Benefit (Loss of Benefit) (Pilot Scheme) Regulations 2007. 21st report from the Statutory Instruments Committee.—(Lord McKenzie of Luton.)

I thank the Minister for introducing the regulations. He will remember that we opposed this power when the Welfare Reform Act 2007 was going through the House. We thought that, as part of the respect agenda, it represented government grandstanding—there for effect, but without serious intent. We are glad that they have the power only to set up a pilot scheme, which cannot be rolled out across the country without primary legislation.

As the Minister acknowledged, many charities and organisations involved are deeply opposed to the idea of imposing benefit sanctions for anti-social behaviour. Several local authorities also oppose the idea. There are concerns that it will drive the most vulnerable families, often involving children living in poverty, out of safe housing into slums, and from there on to the streets. Will the Minister clarify how many families the Government expect sanctions to be applied to under the scheme, and how they will protect the children who will unavoidably be affected by the sanctions?

The stick is meant to be balanced with a carrot. Those subject to sanctions must have the support they need. The Parliamentary Under-Secretary of State for Work and Pensions called this “intensive”. There was a lot of concern during the original debate that the Government were not going to provide any extra funds to the organisations—the local authority, independent charities and so on—that would have to provide that support. Will the Minister clarify what funding has been made available to them? Will any extra funding that would be provided for in the pilot, but not necessarily in the rollout, be fully transparent in the final report?

There was a lot of concern that those imposing the sanctions would not have the training or the duty to identify those whose anti-social behaviour was as a result of mental illness. What safeguards have the Government put in place to ensure that those with mental illnesses are identified and given the support that they need? Will the Government provide any extra funding to the mental health organisations that will have to provide this support, even if they are outside the usual “intensive support” that the Government intend to provide as a consequence of these regulations?

Other pilots in the Welfare Reform Act were criticised either for the inadequate number of test bases, so that the evidence was meaningless, or for the fact that funding for the pilot was much greater than funding for the planned rollout, so that the results would not necessarily be comparable.

I think that the Minister will see that the thrust of my contribution to this discussion is an attempt to ensure that the eventual report will be as full and transparent as possible. I hope he will guarantee that that will be the case. For our part, we will be interested in the pilot and await the outcome.

I am very pleased to follow the noble Lord, Lord Taylor, and I concur with just about everything that he said. The Committee should be very wary of taking on additional pilots. I think that there is already a feeling that the department is more or less “piloted out”. It is very easy to agree that we should look at these issues and, indeed, many of them benefit from pilots being run, but one wonders to what extent we overdo the technique. However, as has been said, we will look at this pilot programme with great interest once the results have been evaluated and made available.

I have a number of questions for the Minister. He is right to say that we had some full discussions about the principle during the passage of the Welfare Reform Bill. He will know that the legislation was amended to the extent that we have a sunset clause, under which, unless we have further primary legislation, the legislation will be brought to an end by 2010. That has an impact on its interaction with these pilots, and I should be very interested to know how he sees that working. Of course, the power for the sanctions can last for up to five years but, as there are only two or three years to go between now and 2010, it will be interesting to watch how these things interact.

I have serious doubts about a post-eviction policy. I absolutely concur with the analysis of the evil and damage that anti-social behaviour does and the fact that there is a need to do something. I understand that there is always pressure on Ministers to be seen to be doing something, but they must resist the temptation to do that. I also have serious doubts about using the benefits system to impose penalties as part of the so-called respect agenda. I do not think that you do that easily without potentially damaging very fragile households.

The pilots are interesting and they need to be watched but I think that Ministers need to be careful about how they are rolled out. I should be much more interested in devoting resources, time and energy to a preventive strategy. I know that that has been tried. The Minister has said, rightly, that the experience of the work carried out at Dundee and the research at Sheffield Hallam University indicates that you can get considerable returns from actively preventing people being evicted and getting involved in anti-social behaviour in the first place. If I were given the choice, that is the direction of policy that I would take. It is not the one that we have before us this afternoon, which looks at the requirement for post-eviction support services to try to reduce anti-social behaviour. I do not think that that is the right way to do it.

One immediate question that arises is that this power derives from 1992 regulations, which are UK wide, but the pilots are only English in their dimension. Does that mean that the policy as currently constructed is intended in the long term to be rolled out only in England if it is rolled out, or are there discussions with colleagues in Scotland, Wales and indeed Northern Ireland about what happens in the longer run?

As far as I can see, there is certainly not a great deal of demand for these policies. What do the local authorities that have volunteered—and that is an interesting verb to use sometimes—actually feel about this? Their view may be that this is another additional tool that they might use as a way forward in future, but I get no sense from the stakeholders or local authorities that people are queuing up to press the Minister for these measures.

One reason for that is that the proposals will involve additional complexity. The guidelines are much more extensive than I expected, but they are to provide protections for those who are subject to the regulations. It all gets a bit convoluted, and we all know that the benefit system is complex enough as it is. We need to guard against increasing complexity where we can.

I shall be interested to know why these areas were chosen and whether they were volunteers. As far as I can make out, in the timescale for which figures are most recently available, only 28 families in total were evicted across these eight areas. That suggests to me that we have a potentially very small sample here, which is something that needs looking at very carefully. I should also like to try to work out what control arrangements there are. Will there be interviews and will evaluation be attempted for those families who are evicted but are not threatened with a sanction to get a control that makes the evaluation a bit more scientific? Perhaps something could be said about that, if not this afternoon then by way of a letter to me and the noble Lord. That would be helpful.

There is confusion here about responsibility, too. The respect agenda is a Home Office matter, for which there is a budget and a rollout for national policies. The delivery of these pilots will be exclusively in the hands of local authorities, which will have some discretion in that regard while obviously being subject to the Department for Communities and Local Government. The DWP seems to fit into this process simply because it is that department’s money that is potentially being sanctioned. Can I have some assurances that there have been meaningful talks between all these various government departments so that they all know what they are trying to do?

As for the policy outcome and evaluation, will we not end up with the pilots eventually evaluating nothing much more than the quality of the service packages available in these eight areas? If they are very good service packages, a lot of people will readily accept them. Therefore, I do not see how the evaluation of the actual policy can be unbundled from the extent and provision of the package of services of support that are available. I am puzzled about that and would like some reassurance about that, too.

There is a mismatch between the legal and practical arrangements in these orders, because I think that there is a confusion of language and definition between “tenant” on the one hand, who is responsible for the rent—that comes from the rent Acts and a body of law that is separate and distinct—and “household” or “benefit unit” on the other, which come from social security law. The tenant is the person who is going to be sanctioned, because he or she will get the warning letter and the terms of the sanction threat put through his or her door. But the tenant may not be responsible for the anti-social behaviour about which the complaint is raised, because it is a member of the household who is responsible. The two are not the same thing. The loose use of terms such as “family”, “household”, “tenant” and “former occupier” will lead to potential difficulties.

The benefit unit is different from the household. We know that because housing benefit is paid to the family unit, not to the household; they are considered separate units. Deductions are made from non-dependent units, which are considered to be economically distinct and separate from the household. So you could have anti-social behaviour conducted by a non-dependent for housing benefit purposes, but how does that fit in with who gets the sanction letter and who gets the penalty applied to him or her? It is difficult to understand. I certainly do not understand it, but perhaps I am missing something here.

There are some prima facie problems about human rights. I am not an expert in this area, but because these regulations discriminate households that are guilty of anti-social behaviour simply according to where they live, there is an element of potential discrimination that the Minister should get his officials to look at carefully. There are another 53 family intervention pilots in other parts of the United Kingdom that have been in place for some time, and anti-social behaviour households in those areas can refuse to co-operate and not be sanctioned. So there is a potential area of discrimination there, too. These pilots may be inherently contradictory to some of the provisions of the Human Rights Act. If the Minister cannot give me an answer today, I should like him to write to me.

The “good cause” provisions in the guidelines will exempt just about everyone who is potentially subject to these sanctions. The Minister in his introduction rightly referred to the Dundee scheme. My figures indicate that the Dundee scheme showed that 55 per cent of families engaged with the support, and that the other 45 per cent were likely to have additional barriers. Given the fact that they have additional barriers, those with extra problems will probably not be subject to the sanctions because they will be excluded by the “good cause” provisions and the guidelines. So we could be left with precious few families to whom these regulations and sanctions can ever be applied. I wonder whether this is all a great fuss about not a lot at all.

I may have got it wrong, but I think it is possible under these regulations for members of the household to engage in support intervention—to accept the letter to come and engage in the support intervention and therefore not get sanctioned—and to continue with anti-social behaviour and not get sanctioned.

Another problem is that the former occupier as defined in these regulations could quite easily go outside the pilot area and get a housing benefit application successfully accepted in some region outside of the eight current pilots. I wonder whether they will be advised about that by the local CAB. That seems to me to be a bit of a no-brainer and I do not see how it helps the constructive evaluation of the pilots.

How do you separate out the effect of a sanction from everything else that is going on at the time? I think all you will end up doing is increasing rent arrears, which is in no one’s interest.

Has the department considered a disability impact statement for these regulations? The noble Lord, Lord Taylor, is right: mental illness is fundamental and at the core of this, particularly with Asperger’s syndrome sufferers. There is a great deal of evidence that such people are subjected unduly to ASBOs for reasons of their mental illness. The disability aspect has to be looked at very carefully.

The ethnicity dimension also has to be considered because some minority communities—black and ethnic minority communities foremost among them—feel that they are subjected to a disproportionate number of ASBOs. Can we be sure that we are not discriminating against ethnic minorities in this process? Will specialist advisers in both departments be available to the eight local authorities which are part of the pilot?

We need to be careful about the guidance we are drafting. The discretion that we are asking local authorities to exercise will be very difficult and potentially very damaging for the families to whom it is applied. I support intervention/prevention strategies to help the problem much more along the lines of Sheffield Hallam and the Dundee experience than going down this route.

Having said that, it is a question of value for money. There is a real chance that not much useful will be learnt from these pilots outside the eight regions in which they apply. It might be interesting to see what happens within those regions but, outside of them, I do not think best practice will be easily translatable because the context will be so different. The money should go to local schemes with a proven record of success in prevention rather than anything else. At the end of the day, penalties should be reserved for the criminal justice system and not used in the benefits system in the way that these regulations suggest.

I thank the noble Lords, Lord Taylor and Lord Kirkwood, for their contributions. I acknowledge that there was a degree of scepticism from each of them about the value of the regulations, which I understand. It rolls on from our debates during the course of the Welfare Reform Bill.

The noble Lord, Lord Taylor, asked about the impact on families with children and those with mental health problems. Clearly, both of those are considerations to which the local authority will have to have regard when deciding whether to proceed with the sanctions. That is part of the important judgment that will have to be made.

The noble Lord, Lord Taylor, asked about funding. We are investing heavily in support services through the family intervention projects and other programmes. The projects are important in ensuring that significant resources already being spent on the families in question are co-ordinated and used to best effect. The Respect Task Force has established a national network of family intervention projects in more than 50 areas. The Department for Education and Skills has made an additional £6 million available in 2007-08 to enable the new Respect areas announced on 22 January to invest in extra parenting provision to tackle and prevent anti-social behaviour. Ensuring that the most difficult and resistant households take up rehabilitation could help to reduce significantly the levels of anti-social behaviour. Money is being invested in those areas.

Five pilot areas have family intervention projects in place: Blackburn, Blackpool, Manchester, Newham and Wirral. Although this is just one model of support, each area is confident that it will have an appropriate array of support available.

The noble Lord, Lord Kirkwood, asked why those particular authorities were willing to take part—although he partly answered his own question. They have each had anti-social behaviour evictions in their areas. I accept entirely that the base of the numbers is relatively small; nationally, we are looking at perhaps 1,500 people. The noble Lord, Lord Taylor, raised that. Within the pilot areas, a relatively small number of people will be focused on. The other key element of the pilot sites is that they will have the support services available, which is very important.

The noble Lord, Lord Kirkwood, said that we in the DWP were “piloted out”. I think that someone in the other place said he thought the DWP had more pilots than British Airways. That might be Ryanair; I do not know. The noble Lord said also that the sanction could last for five years and the pilots only for two. Clearly, everything comes to an end at the end of that two-year period.

It is correct that the pilots will be in England only. If we were to roll them out nationally, we would need to return to Parliament as necessary. If we were to do so, we would seek to apply the scheme to all of Great Britain.

The noble Lord, Lord Kirkwood, asked whether government departments have spoken to each other, because a number of players are involved in the sanctions. Yes, extensive close working between the DWP, the Respect Task Force and Communities and Local Government has taken place. We have also consulted lobby groups such as Mind and Shelter, which are working with us in drawing up the guidance.

I was asked whether someone would escape sanction if they moved out of a piloting area. It is inevitably the case that if we are piloting only in a few areas and somebody is outside, the scheme ceases to apply. As I said in my introductory remarks, the eviction, the sanction and the behaviour involved have to take place within one of the piloted areas, although not necessarily the same one. However, someone who was outside would not be covered.

Obviously the scheme will not be a success if we end up sanctioning lots of people, but we need to evaluate that. The evaluation will be independent and carried out by experts in this field of research.

The noble Lord, Lord Kirkwood, challenged whether the scheme was consistent with human rights legislation. The advice we have had is that it is. Our advisers look at all these things very carefully, which is why I was able to make the statement that I did. The definition of hardship is fairly broad, and it is good that it is. The noble Lord may well be right that at the end of the day there are relatively few people to whom this might apply. Ultimately we want to sanction no one under these provisions, because we want people to take up the rehabilitation that is on offer.

I hope I have covered most of the points that noble Lords have made. If not, they are welcome to have another go.

I just want to go back to the report. In many ways, Parliament’s task in looking at the success of the pilot will involve the way the report is presented. The Minister mentioned that in certain cases local authorities will be making judgments on how to proceed with cases that might involve hardship, mental illness or a risk to the welfare of children. I hope that when the evaluation is made those judgments will be part and parcel of it, so that we will be aware how frequently, and in what way, they have been made. That will help to give us a balanced view of just how effective the mechanism has been and to what extent it is able to deal with the greater problem, and how much of that problem is identifiable as being caused by other elements of anti-social behaviour.

I understand that point. It might help if I expand a little on what we will be looking at during and following the piloting. We will be seeking to establish whether local authorities feel it is a useful tool; whether the sanction is an effective incentive to take up rehabilitation; what resources are needed to set up and run it; its impact on anti-social behaviour; the impact on landlords; the effect on rent arrears; how it can best be operated; the impact on housing and homelessness; the impact on charities and voluntary bodies; and the profile of those sanctioned. As I said earlier, the evaluation will be independent and carried out by experts in the field. I accept that that will be an important part of the pilot.

Households that have been evicted have clearly reached crisis point. Previous interventions have not resulted in the household obtaining the support it requires. If we do nothing we will be failing those households and the communities in which they live. As I have said, it is not the intention to sanction widely; the sanction is targeted at the most problematic households that have refused offers of help. It will provide local authorities with an additional tool to encourage households to address their behaviour. We strongly believe that the welfare state should combine rights with responsibilities, and the right to benefit can only come with a responsibility to behave with respect for others. This proposal strikes the right balance.

On Question, Motion agreed to.

The Committee adjourned at 7.03 pm.