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Lords Chamber

Volume 694: debated on Tuesday 24 July 2007

House of Lords

Tuesday, 24 July 2007.

The House met at half-past two: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Sheffield.

Economy: Manufacturing

asked Her Majesty’s Government:

What assessment they have made of the prospects for the manufacturing industry in the United Kingdom.

My Lords, the manufacturing sector remains absolutely vital to the UK economy. The Government are taking action through the manufacturing strategy to develop high-value, high-technology manufacturing that can meet the challenges of globalisation and technological advance. The prospects for companies that can take advantage of the huge opportunities available in the global economy are excellent.

My Lords, I am grateful to my noble friend for that reply and for his assurance that manufacturing plays an important part in his working life here in Parliament, but does he accept that manufacturing is not only that but a major employer and that the failure to increase skills and productivity is the real problem before us? This is partly why our trade deficit is so high. My noble friend has agreed on previous occasions that productivity is the key and that the Government are directing their energies to improving productivity, not least in the skills sector. Will he inform the House what is actually being done in that regard?

My Lords, it is quite right that the key to manufacturing successfully in the 21st century, in which China wants your lunch and India wants your dinner, is that we ensure that the skills level goes up all the time so that value-added, innovative manufacturing happens. To give the House an idea, I point out that 125,000 people are employed in our UK aerospace industry. You cannot get more value-added and innovative than that. That, with dependants, is probably 500,000 people. The answer is to skill the people. The Government are working on that basis in many, many ways. As the House knows, I was the UK skills envoy in my former life. That was about getting low-skilled people up into intermediate skills. We also have the second most important and successful university sector in the world. That is adding value every day.

My Lords, under the new Minister’s guidance, will manufacturing prospects be improved by regulation?

My Lords, it is no coincidence that above the door of the new department are the words “Regulatory Reform”, not “Better Regulation” or “More Regulation”. The secret is to have some regulation, but reform what we have and make it work with the grain of wealth creation, not against it.

My Lords, does the Minister accept that the creative industries are the fastest growing areas of manufacture in the British economy and the one area where the UK’s competitive advantage remains? Will he assure the House that the Government will support this advantage by maintaining investment in the creative sector, beginning with an appropriate and sustained settlement in the forthcoming Comprehensive Spending Review?

My Lords, it is no coincidence that most of the growth of creative industries in this country is conducted by small and medium-sized enterprises. We have to ensure that the growth of start-ups is encouraged in many ways. It is also encouraging that in a world of Bollywood and Hollywood we have something like 18 per cent of the world’s GDP of creative industries in this country; that is, from designing the stadia to be shown off to the world in Beijing in the 2008 Olympics right down to last weekend’s fabular events with Harry Potter.

My Lords, it was not that many years ago that a consumer abroad would buy a product stamped “made in Britain” and immediately infer that it meant not only quality but also that it was one of the best products in the world. Declaring an interest, I know that in Britain we still manufacture products that are the best in the world. What plans does the Minister have to revive the respect and pride worldwide for “made in Britain”?

My Lords, I am not at all sure that we have to revive it. We have to build on it. We have to make sure that Brand Britain is the key to selling around the world. We make in the value-added sector of automotives, pharmaceuticals and, as I said, aerospace, some of the best manufactured goods in the world. But it is all about being innovative, taking ideas to market and getting a higher-skilled economy. Then it is about making sure we put the ball in the net around the world. My job as Minister of State is to ensure that Brand Britain is sold around the world and that our businesses come in behind it with manufactured goods in the value-added sector.

My Lords, is my noble friend not being a trifle optimistic? Manufacturing output in this country has been constant for the past decade, which in the difficult world circumstances we find ourselves is quite an achievement? Surely, the future of our economy does not depend on manufacturing. If it does, any economist would say that we have not got a hope in hell. The future of this economy depends on the rest of our economy. We have to accept the fact that in the world as it is developing, the emerging countries will dominate the manufacturing sector. We will produce some high-quality goods, but only some.

Additionally, given the weird behaviour of the Monetary Policy Committee these days, how we are expected to compete, with the value of sterling rising when what we really need is a competitive exchange rate, is also somewhat beyond me.

My Lords, perhaps I may correct my noble friend on one point on which he is slightly erroneous. Manufacturing output in this nation is about 14 to 15 per cent of GDP. That is a little more than America, about 1 per cent less than France and about the same as Germany. This is not a British issue; it is a developed world issue. The key is to ensure that the 3 million or so people employed in manufacturing have sustainable jobs going forward as we constantly move up the innovative chain. China and India will commoditise value-added about every five years. The idea is constantly to bring more ideas and value-added and skilled people in investment into making sure that that statistic stays the same. We might get fewer people working in it as we go forward, but more money will be made for the country and we will get more sustainable jobs throughout the United Kingdom.

My Lords, does the noble Lord agree that there has been a decline in manufacturing and that with it has come a fall in the number of apprenticeships, which is the key route to skills? Does he further agree that the prospects for manufacturing would be much brighter if we sought to revive and improve the apprentice system?

My Lords, apprenticeships are vital. I speak as someone who in a previous life served on the national apprenticeship task force. We have to stimulate employers to take them on—in the public as well as the private sector. To make apprenticeships work, we have to get younger people buying into the fact that manufacturing is a career that matters. Doomsayers in this House, in another place, in the media or anywhere will not help young people come into manufacturing. You will not get apprenticeships working just by saying that manufacturing is declining.

If manufacturing is declining, can anyone explain to me why in 1996 we exported half the cars we made? Today, we export three-quarters of the cars we make. The statistic—the number—has dropped by only 100,000. It is a success story. Do not do it down.

Afghanistan: Reconstruction

asked Her Majesty’s Government:

Whether an enlarged diplomatic presence in Kabul indicates a new emphasis on reconstruction and development in Afghanistan.

My Lords, an enlarged diplomatic presence in Kabul indicates the continued seriousness with which Britain takes the business of supporting the Government of Afghanistan in meeting both reconstruction and national security challenges as part of the comprehensive approach to the country. DfID is scaling up its programme, reflecting a long-term commitment to Afghanistan and the increasing capacity of the Afghan Government to use and absorb that funding.

My Lords, I thank the Minister for that reply. I know that we all wish our diplomats and aid workers every success in that difficult country, Afghanistan. Does he agree that, given our leading role, the embassy could now focus a little more on communicating those positive things that are happening? Does he agree that, for example, some staff could have proper communication skills, which means not just website management but getting on with people who know the country and getting in touch with civil society? Would that not give much more reassurance to those of us who are supporting them at home?

My Lords, the noble Earl is right. We have taken steps both to strengthen the size of the embassy, as he is well aware, and to put in place an ambassador who is himself a great communicator. We have increased the communication staff there; three UK nationals and three others are now working on that. The fundamental point of the noble Earl’s question is that we must not just communicate the successes ourselves but ensure that Afghan officials do a much better job of claiming success for their country. The essence of success in Afghanistan is not what we do for Afghanistan but what Afghans do for themselves. That is the core communication that must be made.

My Lords, does my noble friend agree that an important part of what we are doing in Afghanistan is getting to grips with the problem of the poppy crop and that no change of policy is not an option? Can I perhaps live in hope that this increased diplomatic presence consists of people who are evaluating the proposals from the Senlis Council for the conversion of the poppy crop to medical use through the production of opiates?

My Lords, my noble friend is concerned, correctly, about opium production. I agree that failure is not an option. It is a terrible black mark on the international community’s performance in Afghanistan and indeed on that of the new Afghan Government that so far we have not prevailed in the efforts to defeat the growth of this pernicious crop. We must continue to examine all means for doing that. In those parts of the country where the writ of the Afghan Government runs, a combination of the rule of law, better government, the substitution of other crops and development support is bringing down the size of the crop. It is only where those conditions do not yet exist that I am afraid the trend remains in the other direction.

My Lords, did the Minister by any chance see the opinion piece in the New York Times last week that warned against seeing the Afghan situation in increasingly military terms rather than in terms of social and economic development? Does he accept that there is a real danger that the press in this country and the political debate here and in the United States focus much more on the military campaign in the south and much too little on the hard but long-term social and economic rebuilding that needs to be done and is being done, by a number of countries as well as ourselves, in the north, the east and the west?

My Lords, the noble Lord makes an important point. I did not see the article that he refers to. UK media coverage is inevitably drawn to that part of the country where UK troops are deployed, but if you step back from that and look at Afghanistan as a whole, you see that large parts of the country are moving ahead with successful development. We have to understand that that is the only way forward; it must be the focus of our efforts as well as of newspaper coverage in the longer term.

My Lords, the most recent figures released by the much respected Minister for Education, Dr Hanif Atmar, show that something like 5,000 schools have inadequate buildings, about half the school-age population is not being educated and something like 80 per cent of teachers are untrained, yet barely 6 per cent of the non-defence budget is being spent on education. Would it be an idea to try to persuade funding partners to increase or set aside money specifically for education?

My Lords, the noble Baroness is correct that, generally, the Afghan economy still spends a disproportionate amount on defence, but for a very good reason: the country is under internal attack. However, if we cannot increase spending on both education and health, we will never break out of this cycle. The Afghan Government have almost no revenue base of their own; they are almost totally dependent on development assistance. It is vital that sufficient funds are provided for education and health. Many more girls and children are now in school than was the case a few years ago, but I agree with the noble Baroness that that is not enough.

My Lords, we all agree that our embassy in Kabul is doing an extremely good job in horrifically difficult circumstances. Rather unusually, I agree with the noble Lord, Lord Tomlinson, and the implication of his question about the poppy crop. This was specifically a British mission, but somehow it has all gone badly wrong. The poppy crop is bigger than ever and the hostility against our troops who try to eradicate it is enormous and greatly increases the support for the Taliban and other rebel groups. Will the Minister define a little more clearly what our policy now is? Are we going to give up eradication, as many recommend, or will we press ahead, even though the policy seems to be achieving very little?

My Lords, I have assured the noble Lord behind me that we will look at his proposals for creating a market for the crop on a limited basis. Government policy relies on the coercive use of removing the crops where that is resisted combined with working with farmers to ensure their voluntary agreement to substitute alternative crops. I repeat that in parts of the country the policy is succeeding but, in Helmand and the areas where there is still violence and insurrection, regrettably it is not yet succeeding.

Health: InterAct Reading Service

asked Her Majesty’s Government:

Whether they propose to support the service provided by the InterAct Reading Service, which supplies professional actors to read to stroke patients in hospital.

My Lords, I know that the InterAct Reading Service is well regarded by healthcare professionals and has become an example of good practice in its field. I understand that St Thomas's trust in London has undertaken a qualitative evaluation of the service which showed that stroke patients were positive about it. I recently heard Max Stafford-Clark speak about the huge benefits that the service brought him and fellow stroke patients in terms of reading and conversational interaction when he was recovering from a stroke in hospital.

My Lords, I thank my noble friend for that Answer. Does she agree that the service could be extended into people's homes? A friend of mine has suffered a stroke and she has her children to read to her, but that cannot be so for everyone. Does my noble friend also agree that this service could be extended to patients recovering from eye surgery and allied problems?

My Lords, my noble friend is clearly right that this service could be extended into people's homes and to people who suffer from other conditions. However, I understand that the InterAct Reading Service is a charity. Therefore, it is up to the charity itself to decide the scope of its service.

My Lords, my husband benefited greatly from this service and I therefore commend it. However, does the Minister agree that the best thing to do with strokes is to prevent them? If they are unpreventable, there should at least be early recognition. She can rely on me to remind noble Lords about the FAST formula—the face, arm and speech test. Early recognition would do such a lot to help these patients. However, I support the views of the noble Baroness, Lady Rendell.

My Lords, I entirely agree with the noble Baroness. On the promotion of recognition and awareness, I pay tribute to the work of the Stroke Association, which does such a magnificent job in this area.

My Lords, does the Minister agree that, if a charitable service is a success, the Government have a duty at least to encourage it to expand its activity to all parts of the country, as we have actors or people with acting experience in all parts of the country?

My Lords, I think that the Government will be very helpful in supporting the charity. I am not saying that we will do so in financial terms, but I am sure that we wish to support its expansion throughout the country. I know that it strives to work in hospitals up and down the country.

My Lords, as the Minister recognises that this is a beneficial service, will she do everything possible to encourage all hospitals and hospices to make this service available for patients with stroke? I declare an interest as a council member of the Stroke Association.

My Lords, as noble Lords may be aware, the Government are conducting a consultation about stroke strategy. We have published a document called A New Ambition for Stroke, which is being discussed up and down the country. Perhaps people could include that document in their discussions with the Government in the context of the new stroke strategy.

My Lords, given the Government’s renewed interest in volunteering, might some of the proposals made by my noble friend Lady Rendell find an appropriate place in their considerations?

My Lords, that is a very interesting and useful thought, which we should mention to the noble Baroness, Lady Neuberger, whom I understand will be advising the Government on volunteering strategy.

My Lords, I fear that it is, because professional actors are best able to expand on the readings that they give. So I am afraid that in this instance the talents displayed by my noble friend will be wasted.

My Lords, does the Minister share my concern at the report last year from the Public Accounts Committee in another place that only half of stroke patients receive rehabilitation services that meet their needs in the six months following discharge and that after 12 months the figure falls to 25 per cent? Does the Minister agree that there is quite a long way to go before stroke rehabilitation services are at an acceptable level across the country?

Yes, my Lords, I agree. We have made tremendous progress in dealing with stroke but clearly have much further to go, as the Public Accounts Committee and the National Audit Office pointed out. These are the very issues that we shall address in the new strategy, which will be launched at the end of this year.

Schools: Ofsted Report

asked Her Majesty’s Government:

What is their response to the Ofsted report, Parents, Carers and Schools, published on Wednesday 18 July.

My Lords, we welcome the report on how schools involve parents. We want to build on good practice—for example, with better information sessions for parents when children start primary or secondary school, more effective use of information technology and parents support advisers being trialled in 1,100 schools, brokering access to relevant specialist services. When mothers, fathers, grandparents and other carers work with schools, there are significant positive effects on child outcomes.

My Lords, I thank the Minister for his reply. Does he agree that there is a great deal of good practice in the report but that there are still some schools that really struggle to engage parents? What will the Government do to disseminate this best practice to those schools that are crying out for good advice? Is there, for example, some sort of twinning programme in place, or some other initiative? This is relevant particularly at this time of year, when we have the transition of shiny-faced primary school children moving up to secondary school in their brand new uniforms. What are the Government doing to disseminate best practice in forging good relationships with parents right from the start, so that that can be a very productive partnership for the children’s learning?

My Lords, the Ofsted report itself concludes:

“Schools often said during the survey that they wanted more information about how other schools involved parents and carers successfully and how to judge the impact of their actions on achievement. We recommend that local authorities provide support for schools in these respects”.

We entirely endorse that recommendation. We see this as primarily a matter for local authorities, which have an ongoing and close relationship with schools, to see that when there are schools with good practice in this area—and all local authorities have some schools with excellent practice—that good practice is used to inform the behaviour of all schools in their area.

My Lords, we have long highlighted the significant role that grandparents play in their grandchildren’s upbringing. Given Ofsted’s acknowledgement of the importance of this involvement in the improvement of children's attitudes and achievements at school, can the Minister say whether the Government will revisit the difficult issue, which we discussed at length in proceedings on the Adoption and Children Act, of how we can help grandparents maintain links with their grandchildren when parents divorce?

My Lords, the noble Baroness is absolutely right; this is a vital area and, as she knows, the family courts take account of this in the arrangements they make in respect of separating parents. Regarding schools, however, the main role that grandparents can play—and not only in the case of separating parents—is to be readily available in the work that they do with children, particularly on reading and in attending activities that engage parents and grandparents as well. Schools can also make available to parents and grandparents opportunities, such as literacy classes and other ways of improving their skills, to enable them to help their children and grandchildren more effectively. The Basic Skills Agency, for example, is running a number of dedicated courses specifically for older people to develop grandparenting skills, which will enable them to help their own grandchildren with learning to read.

My Lords, will the Minister congratulate Ofsted on producing something unique—a very short public report? Has he noticed in this remarkably short report that of the eight examples of outstanding practice, six were in primary, which suggests to me that there is a particular problem in secondary, particularly perhaps in the area of social deprivation? Will the Government encourage Ofsted to extend its excellent work and see that the lessons are learnt and conveyed at the National College for School Leadership?

My Lords, the report is 19 pages, so brevity is in the eye of the beholder—though the noble Lord has experience of writing somewhat longer reports which I have had to deal with, on very complex issues such as the whole future of student finance—and I look forward to seeing how they can be distilled more briefly. His point is very well taken, though. The best practice in this area is often to be found in primary schools where parents are more used to engaging directly with the education of their children, and it is important to ensure that they engage similarly in secondary schools. The role of induction is one of the issues raised in the report, ensuring that parents are properly welcomed into the work of secondary schools when their children begin in year seven. That work is vital. The way in which schools approach the beginning of children’s education and engage parents often characterises the whole approach thereafter.

My Lords, does the Minister agree that one of the reasons why parents—and, indeed, grandparents—find it difficult to help children in our schools is that they do not understand the way in which the children are being taught? Will he please explain why it is necessary to change reading methods and, more importantly, the way of teaching maths quite so frequently?

My Lords, if the noble Baroness is referring to the recent changes to give greater prominence to best practice in the use of phonics in teaching reading, that came from an independent report by Sir Jim Rose, a senior Ofsted inspector, who engaged with the entire primary school sector and leading experts and made recommendations to us. So in this area, as in the teaching of mathematics—where we have also just set up a review led by independent experts—we follow best practice. We do not seek to impose any view from the centre that is ideologically based.

My Lords, does the Minister agree that, particularly in secondary school, the report’s idea of parents and other carers starting clubs would be a very good way of getting children involved? The enthusiasm of someone who, for example, plays a good hand of bridge, is a gardening enthusiast or, indeed, is an Egyptologist, as mentioned in the report, would be one of the better ways of enthusing pupils.

My Lords, I agree with the noble Baroness. All such activity is immensely valuable in building communities between parents and schools. The wider work of parent-teacher associations is equally important. Many PTAs comprise activities of the kind that she described.

My Lords, what efforts are there to share reports and guidelines among, say, the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly and those in England so that everyone can benefit from them and not, as possibly sometimes happens, reinvent the wheel?

My Lords, I refer specifically to the inspectorates, because this is an inspectorate report. They work closely together and make all their field-work available to each other, which informs the work of each inspectorate. However, the noble Lord is quite right: ensuring that the best practice that they identify is known in schools in the different parts of the United Kingdom is an ongoing priority.

My Lords, does the Minister accept that some of the strongest relationships between parents and schools are where the child has special needs? What lessons can be learnt from the way in which those relationships are forged and promoted to use with all children, who do not necessarily have special needs but who need to learn effectively?

My Lords, that question has so many aspects that it is hard to know where to start. The ongoing relationship involving a dedicated teacher, for example—or, in the case of special needs, the special educational needs co-ordinator, which gives a dedicated point of reference in a school—can be of great benefit, as can ensuring that every parent has a point of contact in a school, whether it be a form teacher, a deputy head or some other person whom they can contact in the case of the child going off the rails or experiencing difficulties, which is the case with most children with special educational needs. That is immensely important in ensuring the strength of relationships between schools and parents.

My Lords, there is an observable correlation between the interest of non-academic parents in the performance of children and schools that are arranged, as it were, academically. Is the introduction of vocational qualifications in school beginning to show a re-engagement of the parents of non-academic children who desperately need this support?

My Lords, I have not seen any research that would lead one to think that that is the case. However, it must generally be true that the more engaged the pupils are in the work of schools, the more engaged the parents are likely to be. The great benefit of the new vocational qualifications, which were introduced over the past two decades and which will be substantially enhanced by the new diplomas to be introduced next year, is that they will engage steadily more pupils, particularly at that very difficult age between 14 and 16 when so many drop out and become disengaged and when parents often feel powerless to help them in school.

Business

My Lords, with permission, a Statement on delivering a sustainable railway will be repeated by my noble friend Lord Bassam at the end of today’s business after the order on passport applications.

Building Societies (Funding) and Mutual Societies (Transfers) Bill

Report received.

Pensions Bill

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

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

commons REASONS

[The page and line references are to Bill 61 as first printed for the Commons.]

1: Page 2, line 32, at end insert-

“(3A) With effect from the commencement of this section or 1st November 2007, whichever shall be earlier, the contributor may at any time up to state pension age, make voluntary (Class 3) contributions for any period of his or her working life, in respect of up to 9 years, whether consecutive or not, which for any reason shall not have satisfied the conditions for a Qualifying Year or Years, so that such year or years shall then be deemed to be a Qualifying Year or Years.”

The Commons disagree to Lords Amendment No. 1 for the following Reason-

1A: Because it would involve charges on public funds, and the Commons do not offer any further Reason, trusting that this reason may be deemed sufficient.

My Lords, I beg to move Motion A, That the House do not insist on its Amendment No. 1 to which the Commons have disagreed for their reason numbered 1A.

I am grateful to my noble friend Lady Hollis for all the work she has done on this important issue and it is clear that she gained the support of noble Lords on all sides of this House, as evidenced by those who spoke so passionately on Report.

My noble friend’s amendment was overturned in the other place for reasons of financial privilege. The amendment carries with it spending commitments, as I outlined on Report. Since then further legal advice is that the amendment, although not in a form which achieves the desired objective, can sit alongside the current arrangements so it properly expresses the policy intent.

As I said on Report, we understand, and are very sympathetic to, the objectives of the amendment, and hope that we can deliver its aim of helping women in this country if at all possible. The Government have always been clear about their desire to provide fairer outcomes for women and the measures in the Bill demonstrate that commitment.

My honourable friend the Minister of State, during consideration of the amendment in the other place, recognised the strength of feeling expressed by your Lordships and I, too, was left in no doubt of that. As he made clear, we are keen to find a solution that may bring more people further into the contributory system. However, this is a complicated issue, and it is important to explore the complexities and possible implications of the range of options, including the proposal in my noble friend’s amendment.

There are, for example, options in relation to the number of years that could be purchased, the rate at which additional contributions could be paid, the treatment of individuals overseas and the interaction with the current system. Those have varying administrative, legal, cost, distributional and policy implications, and we need to ensure that we get any targeted solution right. I hope that my letter to my noble friend Lord McIntosh, which was copied to all noble Lords who spoke at Second Reading and placed in the Library, explained a little further the possible cost implications. We want to find a way to overcome these problems. We are keen that any solution should deliver a fair outcome for individuals who have experienced complex and fragmented lives, but at the same time we need to be mindful of how any changes would impact on people living overseas.

With that in mind, the Government will commit to looking at the range of options in the coming weeks, including the option to buy additional years as proposed in the amendment, and to provide an update at the Pre-Budget Report. In doing so, the Government will consider all the options in terms of the following principles: fairness, as any solution must help those most in need; affordability, as any solution must be affordable and sustainable; and simplicity, as any solution must be deliverable, simple to implement and understandable to those whom it would benefit. There is no difference between your Lordships’ wishes to help women in this country and our wish, but we need to deal with the practical problems. I cannot make a commitment that we will achieve that outcome today, but we will use our best endeavours to deliver the principles of the noble Baroness’s amendment.

We have listened very carefully to your Lordships’ concerns, and we take them seriously. I understand that my noble friend Lady Hollis believes that our proposal is a useful basis on which to go forward; I thank her for that. I hope that your Lordships are of the same view. We also intend to seek the views of relevant stakeholders.

Moved, That the House do not insist on its Amendment No. 1 to which the Commons have disagreed for their reason numbered 1A.—(Lord McKenzie of Luton.)

My Lords, I very much welcome the moral commitment made by the Minister. I particularly liked his three points, which came through in the long debate that we had; fairness, affordability and simplicity. Of course it is a complicated and complex issue; most things that are worth fighting for are. The principle of the amendment is essential if poorer women in particular are to have the security of being able to look forward to saving. I am sure that next year, when we consider the personal accounts Bill, we will be able to come back to this issue if we have to. I hope that we do not have to do so and that what happens in the next few months, with the great commitment of the Minister, will make that unnecessary. Meanwhile, let us hope that he will understand that, certainly from my point of view, this issue will not go away. I thank him.

My Lords, I did not take part in the earlier debates on the Bill. Therefore, I apologise for saying anything, and I will be extremely brief. First, the noble Baroness, Lady Hollis, has done a great favour to everyone in tabling the important amendment, which deals with an ancient source of injustice, especially to women in this country. I wish I had been able to say that at Second Reading. Secondly, I am very pleased to note what has been said in the other place by the Minister and what has just been said by the Minister in this House.

Wearing my hat as an unpaid legal adviser, to draw a distinction between people in this country and people outside this country on the basis of a close connection with this country in deciding on whether the purchase of added years should be permitted would, in my view, be compatible with the European Convention on Human Rights and the Human Rights Act. There is the case of Carson, which is a decision by majority of the House of Lords, which is now before the European Court of Human Rights. I agree with what the majority said in that case about the rational basis for drawing a distinction effectively on the basis of whether one lives in this country and throws in one’s lot in this country in order to get the benefit. There are wider problems about EU law but again those are not difficult, as one is drawing a distinction not between British and EU citizens but on the basis of residence in this country, which would apply equally to other EU citizens. I therefore believe that it will be possible for the Government to honour their obligation now, to give effect to the principles in the amendment of the noble Baroness, Lady Hollis, and I hope to see that come to pass soon.

My Lords, we all noted in the Minister’s language a genuine attempt both to take account of what was said and give it proper weight. I cannot say that I am entirely happy with the result; you would not expect me or many other noble Lords who took part in the debate to be absolutely overjoyed. However, I certainly recognise the attention that has been given to the issue. On the basis that the noble Baroness, Lady Hollis, will be around—nobody has greater expertise—I have every confidence that the maximum benefit will be extracted in the long run, and I hope in the very short run. I congratulate her sincerely on all she has achieved, and the Minister on what he has partially achieved so far.

My Lords, it came as no surprise to these Benches that the other place did not waive financial privilege for the amendment; obviously there is no point in this House insisting on it. As my honourable friend Danny Alexander said, the amendment would have tackled the great injustice faced by many women in their quest to get a full pension, even under the new system, particularly the cliff edge from 39 to 30 years. The issue of a practical solution to the problem of a broken pension contribution record, highlighted by the amendment, has certainly touched a chord with the British people, as the number of e-mails sent to the “Today” programme in response to an item about it showed.

It is obviously right for more research to be done by the department to make sure that any solution is targeted on those that it is designed to help. I hope that it will be possible for the matter to be brought up again, either in the next Pensions Bill when the department has done the research or, even better, by order under the 1992 Act. From these Benches, I congratulate the noble Baroness, Lady Hollis, on all her hard work. I hope that it will eventually bear much fruit.

My Lords, I join those who have congratulated the noble Baroness, Lady Hollis, on securing this. So far as I can see, it is really about as far as we could reasonably be expected to go with the amendment. I believe that, in due course, the Government will be able to overcome the obstacles that appear at present. I am sure that those obstacles are just to test their ingenuity.

My Lords, I add my congratulations to my noble friend. Has the Minister’s commitment been agreed with the Treasury? I say that with a little experience, a long time ago. It is important that the Treasury be committed to what he said, so I hope that he can give me that assurance.

My Lords, in the words of the noble Baroness, Lady O’Cathain, the statement repeated by my noble friend today—it was first offered by the Minister in the other place—to me represents a moral commitment or, to coin a phrase, a promise with menaces. We expect it to be delivered and I am confident that my noble friend will use his best endeavours so to do. I am very grateful for today’s comments suggesting that there need be no immediate legal obstacles in the road that would stop the show. There are problems to be addressed and overcome, but nothing that should stop the ultimate success of the amendment, which will bring women in this country, who have often spent their lives in caring, into the contributory system in their own right, as we should all wish to see.

Therefore I should give some thanks. Thank you, first, to my noble friend, to Mr Mike O’Brien in the other place and to the civil servants supporting them, who have always been available to see one and were almost always open-minded when they did. That was greatly appreciated. To my certain knowledge, they have worked very hard indeed in negotiations with the Treasury, and this statement now represents the Government’s position and not just that of the department. I very much appreciate that.

The second thank you is to the outside organisations, particularly Carers UK, Help the Aged, Age Concern and, above all, the Equal Opportunities Commission, which helped to form and organise the Women’s Pensions Network. I suspect that many noble Lords will have been at the receiving ends of its missives, e-mails and, indeed, its appreciation and gratitude. It very much values all that has been done in this House.

Thirdly, if it is not impertinent, I thank your Lordships. It was amazing to sit here and watch how the debate took fire. It went right around the House, with contributions, support and votes almost equally judged around the Back Benches, including distinguished Back-Benchers, in a way that many of us could not have dreamed of when we started this battle a year or two ago. I am very grateful to the 179 noble Lords who supported the amendment in their speeches and votes. To the 86 noble Lords who felt that they could not support the amendment, I would at least like to place on record my appreciation of their generosity and tolerance to someone from their own side who, none the less, sought to challenge government policy. Among those 86 is a Peer whose wife has chastised him roundly for his vote. Another Peer’s two daughters have angrily criticised the position he adopted on the day. I do not doubt that, as the noble Baroness, Lady O’Cathain, said, if we revisited this issue, we could count on even greater support on the government Benches from those who realise that this is not just a House of Lords issue, but a family issue, a women’s issue and a citizens’ issue.

Therefore, if it is not impertinent, I thank noble Lords most sincerely on behalf of all the women whose interests we have in mind on this. We have gone a very long way. I am comfortable with my noble friend’s statement. I am confident that the Government will deliver. It would be right to say that we all expect no less. Therefore, I suggest that we accept my noble friend’s recommendations.

My Lords, I thank my noble friend Lady Hollis for the way she has worked with us to reach what I think is a sensible solution that provides the basis of a move forward, and I thank all other noble Lords who have spoken in this short debate. It is clear that the sentiment of the House has not shifted from that which it expressed on Report and I, for one, hope that we can get a solution, because I would rather not go through that debate again. In response to my noble friend Lord Barnett: yes, this has been agreed with the Treasury. Clearly, policy relating to national insurance contributions is a matter for the Treasury and it has vetted the statement I gave earlier.

The Government have been clear about their commitment to provide fairer outcomes for women. As I said previously, many measures in the Bill show that. I hope noble Lords will agree that we have shown sympathy for the objective of my noble friend’s amendment during debates in both Houses. The objective of fairer outcomes was never a sticking point here, rather the means by which to reach that objective. This is a complex issue and I am sure noble Lords will agree that it is sensible to explore all the possible implications of the options open to us before drawing conclusions. I particularly thank the noble Lord, Lord Lester, for his contribution and will specifically draw his comments to the attention of officials.

The Government are committed to looking at all the options, getting the views of stakeholders—for example, the EOC—and coming up with a solution. This has to be fair, practical, affordable and easily understood, while meeting the principles inherent in my noble friend’s original amendment, which is to help women living here to achieve a full basic state pension. I cannot pre-empt what the outcome will be but I hope that the update provided in the Pre-Budget Report will provide an outcome with which we can all be satisfied.

On Question, Motion agreed to.

12: Insert the following new Clause-

“Minimum retirement income(1) The amount of the minimum retirement income in respect of each tax year shall be set by the Chancellor of the Exchequer by order at the level of the standard minimum guarantee prescribed under section 2 of the State Pension Credit Act 2002 (c. 16).

(2) Before making an order under subsection (1), the Chancellor of the Exchequer shall consult such persons as he considers appropriate.

(3) An order under this section (other than the order that applies to the first tax year during which this section is in force) must be made on or before 31st January of the tax year before the tax year to which the order applies.”

The Commons disagree to Lords Amendments Nos. 12, 13, 14 and 73 for the following reason-

12A: Because they would alter provisions relating to taxation, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.

The noble Lord said: My Lords, I beg to move that the House do not insist on its Amendments Nos. 12, 13, 14 and 73, to which the Commons have disagreed for their reasons numbered 12A, 13A, 14A and 73A.

I begin by respectfully reminding noble Lords that, as Amendments Nos. 12 to 14 and 73 would alter provisions relating to taxation, they fall outside the scope of this House. Specifically, the amendments would reduce tax revenues. The retirement income fund, set out in Clauses 12 to 14, would enable individuals to shelter large tax-privileged pension funds until death and then pass them on to heirs. It could also allow large discretionary lump-sum withdrawals where the tax relief given would be likely to exceed the tax recouped when the lump sum was taken out. Additional funds—largely from existing savings vehicles—would be likely to be recycled into pension savings to take advantage of the scheme. By allowing value protection on an annuity at any age, Lords Amendment No. 73 would provide the potential for tax relief on pension savings to be used to provide tax-advantaged capital on death during any stage of retirement and not a retirement income.

However, even if the other place had been willing to waive its privileges relating to taxation, the Government would still fundamentally oppose Amendments Nos. 12 to 14 and 73 because they cut across several of the fundamental principles of government pensions policy. Tax relief on pensions saving, which amounted to more than £16 billion in 2006-07, is given to encourage people to save for retirement. As part of the “deal”, tax-privileged pension savings must be turned into a retirement income by the age of 75. Reflecting retirement patterns, there is little pressure on the age limit of 75: only 5 per cent annuitise after the age of 70 and most people do it before that. As working longer is key to meeting the pensions challenge, the Government continue to keep this under review.

Your Lordships will recall that, under an RIF, a pension fund could remain invested for life. Annual withdrawals between minimum and maximum limits would be permitted, depending on a member’s other income, life expectancy and a defined minimum retirement income. We have consistently stated that the RIF violates this deal behind pensions tax relief. Depending on other income sources, an RIF could allow someone either to extract large lump sums of tax-advantaged pensions savings for any purpose or to choose not to draw any income so that he or she could pass the fund on at death. Both violate the policy reason for giving tax relief.

We have consistently been clear that, for the vast majority, an annuity is the best way to secure a retirement income. The RIF is silent on tax treatment on death, and I fear that it is designed solely to allow pension funds to be passed on to heirs. No one should contribute to a pension with the aim of being able to pass on funds where more than half may consist of tax relief.

Amendment No. 73 would abolish the current age limit of 75 for value-protected annuities. This would allow an open-ended return of capital throughout all stages of retirement, which would tend to benefit those more interested in using their pension fund for inheritance planning rather than a retirement income. I therefore urge that this House does not insist on its amendments.

Moved, That the House do not insist on its Amendments Nos. 12, 13, 14 and 73 to which the Commons have disagreed for their reasons numbered 12A, 13A, 14A and 73A.—(Lord McKenzie of Luton.)

My Lords, I am surprised at what the Minister has just said. There is a paradox. He said that the amendments are faulty in that they are silent on the tax treatment of the fund, yet the Government have decided that the amendments are in breach of privilege because they deal with taxation. The amendments are either silent or they are not. Even more important, the amendments have been the subject of legitimate discussion on several previous occasions. For instance, on 15 November 2004, your Lordships’ House defeated the Government on the question of the maximum age for annuities. Then, on 17 November 2004, there was a further government defeat on the amendment tabled by my noble friend Lord Higgins to raise the age to 85.

It is curious that suddenly privilege is invoked. The Minister owes us some further explanation. It may be that someone somewhere decided to protest about other amendments on the basis of privilege and to extend the protest to this group, failing to realise that the House has debated these subjects on many previous occasions. I think that the noble Baroness, Lady Hollis, responded in 2004. We are owed a further explanation.

When I looked at the Official Report of the other place to see whether I could be persuaded by the arguments that had been used against these amendments, I discovered that no one had even discussed them because of the operation of a timetable Motion. I have not changed my mind, because no one in the other place tried to change it

The Minister has once again put forward the case as he sees it. He is always very articulate, particularly about this terrible phenomenon of tax avoidance—being able to build up funds and avoid tax. I do not think that the Government have any right to tell pensioners what to do with their pension pot beyond what effect it can have on their eligibility for various benefits. The tax incentives that the Government give to encourage responsible savings in no way transfer the ownership of this money to the Government.

In opposing the amendments on the previous occasion, the Minister claimed that the point of pension tax incentives is to provide an income in retirement “and nothing else”. If this is so, why does he feel that it is his Government’s responsibility to involve themselves in how that income is spent? He described the minimal flexibility that is allowed—the possibility of taking up to 25 per cent of the pension as a lump sum—as a generous concession on the part of the Government. That is ridiculous. What possible business of the Government can it be if a pensioner decides to blow 30 per cent, 50 per cent or any amount of their pension pot, as long as they do not throw themselves on to benefits by so doing?

This patronising and paternalistic attitude taken by the Government can be further seen by the noble Lord’s words when talking about the alternative secure pension regime that the Government allowed for those with a religious objection to annuities. He described people as “piling in” and trying to abuse the arrangements. Why do the Government consider it abuse when a person attempts to use a legal and profitable mechanism for investing his or her money? After all, the Government created this opportunity for people. What is wrong with them taking that opportunity?

The Minister said in response to these amendments the first time round, and has repeated it a few moments ago, that to spend a pension pot on things other than an annuity was an improper use of tax-privileged savings. Can he explain the difference between spending your savings and spending the proceeds of an annuity? The only principled difference between my amendments and the current arrangements is the mechanism by which care is taken to stop pensioners falling on to benefits. That must surely be the only legitimate reason for the Government to intervene.

This issue will not go away. I can only hope that when we table these amendments again, the Government will be in a more receptive mood.

My Lords, my noble friend may be surprised that another place’s reaction to his amendment is to plead privilege. For my part, I am far from pleased that the guillotine Motion meant that that House did not discuss the arguments at all. What price the Prime Minister’s pledge to give Parliament more say and control over the Executive? Instead, we got a knee-jerk reaction of privilege.

My noble friend made a principled point that the Government should not be telling people what to do with their money above and beyond how that impacts on the taxpayer. This is doubly true when one considers what a bad bargain buying an annuity can be. The Government’s own Young review, the interim findings of which will be the subject of the debate to come in a few moments, clearly pointed out what a waste of resources buying an annuity can be. That the Government are forcing people to spend their retirement money—and it is still their money—in such an unprofitable manner is simply shocking. That they seem completely unashamed that they are doing so is no less than appalling.

As we made clear in Committee, these amendments are a point of principle; my noble friend has just reiterated that. The issue that we were voting on is not how the tax provisions should be amended in response to retirement income funds as the Minister, and Ministers in another place, would like to make it. As the privilege reason makes clear, that is a matter for another place to decide on. These amendments did not presume to touch on it, as the Minister noted previously. I gently suggest that he occasionally read his own speeches, as I tend to read his. Instead, these amendments were an attempt to restart a debate that the Government promised but then failed to deliver. Where is the review on compulsory annuitisation that was promised by Mr Wicks in another place on 16 November 2004, at Hansard col. 1223, with “particular care and urgency”? We have not had it.

The Minister claimed that there was a point of principle behind his objection to the lifting of annuity requirements, but I am unable to find it in his response in Committee. All I can see is a statement where he claims that the retirement income funds do not provide a secure income for retirement, but there is unfortunately little more explanation than that. He should take this opportunity, as my noble friend has requested, to set out his principled objections more clearly. Indeed, the Government have already conceded the principle. The exemption for the Plymouth Brethren shows that there are less restrictive ways to guarantee a retirement income, and I assume that the Government were satisfied that alternatively assured pension schemes did not waste taxpayers’ money, since the Government themselves invented them. Can the Minister please explain why what was considered appropriate in that case is not now considered suitable for the population at large?

My Lords, I have considerable sympathy for the points made, particularly by the noble Lord, Lord Hunt, about the procedure for dealing with these amendments. I will go into more detail on the invoking of privilege on the financial assistance scheme when we come to those amendments, but I agree with the noble Lord on this. It is particularly unfortunate when there has been no debate in another place. That really makes a farce of democracy.

On the substance of the amendments, as noble Lords will know from our previous debates, we on these Benches feel that the Conservative amendments are unnecessarily complicated. Simplicity is the key to sound pension arrangements. Like the noble Lord, Lord Skelmersdale, we still await the promised review. I remember it being promised in the light of the Turner report—I had detailed negotiations with Mr Wicks at that time—on the simple question of whether the age of compulsory annuitisation should be substantially raised, which is our preferred option. As the Minister said, we are trying to encourage people to work longer. Given how much longer people are working and the substantial increase in life expectancy and healthy life expectancy, we on these Benches believe that that age should be raised substantially and we expect and demand an answer on what has happened to the review.

My Lords, I shall start by dealing with the issue of Commons privilege. I am advised that the constitutional position is that the House of Lords accepts the Commons’ financial privilege and does not challenge it. That extends to not querying the Commons’ decisions to rely on financial privilege. I must adhere to that advice.

The noble Lord, Lord Hunt, said that I said that the RIF was silent on certain tax issues. That is right, but this is to do with tax planning. We have to look at this in totality. The whole regime for pensions and any changes to the existing regime must encompass changes to the tax regime. Indeed, when this amendment was moved on Report, some noble Lords spoke about it giving an opportunity to accumulate a fund that could be passed on on death. There is no doubt that the intent of some of the people who supported the proposition related to getting a better tax deal than under the current arrangements.

The noble Lord asked what this has to do with the Government. It has a lot to do with the Government. If the Government set down, because they have a democratic mandate to do so, a tax regime that encourages and incentivises pensions savings, there is a set of rules to subscribe to. I touched on those rules and I am happy to repeat that, within the parameters of lifetime allowance and annual allowances, there is tax deduction on the way in and tax-free build-up of funds within the scheme, but there comes a time when that has to be converted into an annuity, which is taxable on the way out. That is the regime that the Government have set down; we are entirely entitled to say that it is the regime under which we operate. I hope that my remarks touched on the added tax benefit that the 25 per cent tax-free withdrawal gives the pensions savings regime, because part of the fund comes out in a way that is not taxable.

The noble Lord, Lord Skelmersdale, said that the Young report stated that buying an annuity is a bad bargain. That is an unjustified reading of the report. It stated that you could do better by taking the funds in a range of schemes in aggregate than by annuitising on an individual basis. In the 2006 report, there was a review of the annuities market—the biggest review that has ever taken place—and it concluded that annuities are fairly priced. There was substantial work to justify that.

My Lords, is it not true that the Young report is, at least in part, about the globalisation of schemes and the purchasing of bulk annuities, which would be considerably cheaper than, if you like, drip-feeding? This amendment is about drip-feeding. They cannot be compared.

My Lords, the noble Lord is right in identifying part of what the Young report said, but the point about the RIF proposals is that they would work only for people who have significant pension pots because the investment risk—the longevity risk—is with the fund, which needs to be a certain size to sustain it and to afford the sort of advice that it needs to deal with the asset management issues that flow from that. In a sense, that is consistent with the Young review.

The noble Lord pressed me, as did the noble Lord, Lord Oakeshott, about what had happened to the promise in 2004. I regret that I do not have a specific answer on that, but I will write to both noble Lords on the matter.

I am conscious that this issue will recur in your Lordships’ House and elsewhere from time to time, but I urge the House to support the proposition that I have advanced.

On Question, Motion agreed to.

15: Insert the following new Clause-

“Financial assistance scheme: scheme manager(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.

(2) In regulation 5(1) for “Secretary of State” substitute “Board of the Pension Protection Fund (“the Board”)”.

(3) In regulation 5(2)(a) omit the words from “Secretary of State” to the end of that paragraph and insert “the Board”.

(4) In regulation 5, sub-paragraph (2)(b) is omitted.”

The Commons disagree to Lords Amendment No. 15 for the following Reason-

15A: Because it is inappropriate to replace the Secretary of State as the manager of the Financial Assistance Scheme with the Board of the Pension Protection Fund.

The Commons disagree to Lords Amendments Nos. 16, 17, 18, 23 and 24 for the following Reason-

16A: Because they would involve charges on public funds, and the Commons do not offer any further Reason, trusting that this reason may be deemed sufficient.

The Commons disagree to Lords Amendments Nos. 19, 20 and 21 for the following Reason-

19A: Because they make provision connected with that made by Lords Amendments Nos. 17 and 18, to which the Commons have disagreed.

The noble Lord said: My Lords, I beg to move Motion C, that this House do not insist on its Amendments Nos.15 to 21, 23 and 24, to which the Commons have disagreed for their reasons Nos. 15A to 21A, 23A and 24A.

A great deal has happened since this House amended the Pensions Bill to reflect concerns about the generosity and efficiency of the financial assistance scheme. We have a new Prime Minister, a new Secretary of State for Work and Pensions and a new Minister of State for Pension Reform. We still have the same old Lords’ Minister, who has not yet been churned out of office. And we have the interim findings of the Young review into assets remaining in failed pension schemes.

As a consequence of those findings, the Minister of State for Pension Reform announced on 17 July that the Government will match the extra value available from scheme funds that the review identifies. Our goal is to move towards 90 per cent of expected core pension for all qualifying members. This is a potential commitment of some £225 million in addition to the £1.9 billion already promised, in net present value terms, to FAS.

The work done by the Young review so far is impressive, especially as it was completed by the review team in such a short time. The interim findings demonstrate that a better outcome is possible for scheme members. By approaching the winding-up process differently, we can make more effective use of the moneys remaining in schemes. I hope that noble Lords will join me in welcoming the findings and the Government’s subsequent commitment. That commitment to move towards 90 per cent is in addition to the extension to FAS already announced, thus making all members of schemes eligible regardless of how far from retirement age they are, raising the cap, scrapping the de minimis, helping schemes where there has been a compromise agreement, and raising the level at which we pay initial payments from the time the Bill receives Royal Assent.

I was also pleased, though not surprised, that the review’s interim findings have confirmed what the Government have been telling the Opposition for some time—that other non-tax sources are unlikely to play a significant role in any solution.

I can also announce today that we have decided to accept the review’s recommendation that we should not enforce a cut-off date for employer insolvency.

On the 27 February 2007, the Minister of State for Pension Reform announced that he would extend to 31 August 2007 the date by which an employer of a scheme in wind-up had to experience an insolvency event for that scheme to qualify for FAS. I can confirm today that we will not now enforce that date. We will consult on whether there should be a cut-off date and bring forward regulations in due course.

The other place has asked us to reconsider the bulk of the amendments made to the Bill on the financial assistance scheme on the grounds of financial privilege. The noble Lord, Lord Turnbull, warned us in Committee that the proposals to fund higher levels of assistance by using unclaimed assets were straying into dangerous territory. He has been proved right.

Notwithstanding the fact that the Young review has determined that the non-tax sources of funding that it looked at are not suitable, the proposals to guarantee the lifeboat fund and on-account payments by trustees rely on taxpayers’ money being made available to plug the gaps that would inevitably occur in such uncosted and untested bodies.

Amendments Nos. 16 and 24, bringing in schemes with solvent employers and paying PPF levels of benefit, represent obvious calls on the public purse, perhaps running into hundreds of millions of pounds. It would be fiscally irresponsible to insist on them.

The other place disagrees with Lords Amendment No. 15 on the grounds that it is inappropriate to replace as FAS scheme manager the Secretary of State for Work and Pensions with the board of the PPF. That would be inappropriate at this time, and without substantial preparatory work.

Last year’s review of FAS administration, which enjoyed input from the PPF, was well received. It concluded that, although lessons could be learnt from the PPF’s approach to proactive data gathering, there would be significant constraints on its ability to manage FAS operations. The issues involved in FAS are complex and outside the experience of the PPF. The Government would not want PPF operations to be hampered by having to come to terms with an unfamiliar system, with its own unique difficulties and challenges, especially in PPF’s early years of operation.

I acknowledge the criticisms that have been made of FAS, but I emphasise once again the professionalism and commitment of the staff, who are working with schemes that may have inadequate records and where members may have long since abandoned hope of seeing anything of their pension. To quote Andrew Gaspar of Pitmans Trustees:

“The FAS is doing its best in fairly trying circumstances. People there are trying to get the job done while the press is continually on their back. I am not sure they are at fault”.

He is the independent trustee of a scheme where we have received data for all 52 members and assessed them for annual payments from the FAS.

I do not rule out wanting to look again at the issue, especially if the Young review identifies different approaches to funding, but I do not think that it is sensible to pre-empt those findings or to cause disruption and distraction to FAS operations at this time.

The Government have given a commitment to raise the levels of assistance towards 90 per cent if, as we believe will be the case, the Young review is able to get better value from funds remaining in schemes. The Young review is also gathering information on schemes with solvent employers to allow us to make a considered decision on to how they should be treated. We must wait for the review’s final report, which we have asked to be brought forward to November, before committing to any additional spending.

Let us not lose sight of the fact that we will, from Royal Assent, be able to pay more money to more people immediately as a result of raising initial payments. I urge Your Lordships not to stand in the way of getting that help to people now.

Moved, That this House do not insist on its Amendments Nos. 15 to 21, 23 and 24, to which the Commons have disagreed for their reasons Nos. 15A to 21A, 23A and 24A.—(Lord McKenzie of Luton.)

My Lords, the Minister has sketched out the background to the problem and I am extremely grateful to him for that. I am also glad that the cut-off date is to be extended. The amendments that we moved originally would have set up a fund taking any unclaimed assets identified by the public assets register, with the exception of those in banks and building societies, which have already been allocated by the Government to another public good—that of assisting children and charities—as their unprecedented Statement on future legislation told us.

I rather wonder whether the Minister has been reading the same Young report as I got from the Printed Paper Office yesterday. On page 5, it clearly states:

“the Review team believe it should still conduct some further investigation of the complex legal and operational issues raised by unclaimed assets, involving Government and industry as required”.

The story of unclaimed assets is by no means dead. It may become dead at the end of the day, but as of this moment it is not.

When the lifeboat fund is being set up, the Government will kick-start it with a loan in exactly the same way that the previous Conservative Government treated the collapsed pension schemes of the late Robert Maxwell’s commercial venture.

When the Bill returned to the Commons last week, the Government said—I paraphrase—“No way”, and the great clunking fist came down, manifesting itself in the Commons reason of privilege to all but one of the group of amendments, which we will discuss shortly. It is with great regret that I tell your Lordships that, despite what the Minister rather surprisingly said in his preamble, we must accept the reason produced by another place.

Shortly before your Lordships’ activities in Committee, the Government rather sold the pass by setting up the Young committee to look at whether the assets of the failed schemes could be better used once they came under the remit of the FAS. Indeed, we have just had a little exchange about the results of that. In its interim report at the end of last week, it decided that they could but that the final report would flesh out exactly how much might be available and by what means. Ministers immediately announced that they would produce matching funds. This is yet another ratcheting up of government money for the FAS—something of which I of course approve. However, I note with a certain amount of irony that one of the Government’s objections to the lifeboat scheme was that it was uncosted. So, too, is the matching money that the Government have promised. What is sauce for the goose should be sauce for the gander. The expression “the pot calling the kettle black” rather springs to mind.

We have not even been given a clear idea of how the Government intend to calculate the savings to which the Young review might lead. Do they perhaps intend to backdate any savings to the start of the FAS? The history of the FAS is shabby, to say the least. It was originally set up to quell a Back-Bench rebellion in another place, and was given the least amount of money—£400 million—that the Government felt they could get away with. To spread this evenly, they decided that they could not afford to pay the 90 per cent of expected pensions, which was the amount that would be paid to members of pension schemes that came under the PPF; so they invented what they called the core pension, with a de minimis limit. There is no lump-sum initial payment, no indexation and no widow’s rights. No one gets anything before the age of 65 and, even then, only after a protracted checking process that can leave people whose funds are still in wind-up with nothing at all. The number of people so far granted any sort of pension under this scheme is just under 1,500. The Minister may have an update on that figure.

The Government realised that £400 million was nothing like enough, especially as they had committed themselves to paying 80 per cent of the core pension. Subsequently, £8 billion in total was eventually prised out of the Treasury’s greedy maw, although this sum is to last the entire lifetime of the FAS, which could be 50 or 60 years. Will even that be enough? They now believe that the Young review will push the amount closer to 90 per cent. When talking about this, as the Minister did just now, they conveniently leave out the word “core”, knowing full well that 90 per cent of the core pension is not even 65 per cent of the expected pension. Nevertheless, what is currently on offer is a minute extension to the amount that these pensioners will get, but not today or even this year. What is on offer is jam yesterday, jam perhaps tomorrow, but never jam today, and, thanks to that great clunking fist, regretfully your Lordships can do nothing about it. I promise this, however; the Government may have won a battle, but the war will go on until the 125,000 pensioners get what they deserve.

My Lords, I welcome the Minister’s acceptance of the Young review’s recommendation not to enforce a cut-off date for solvent schemes. However, does he accept the Young review’s key conclusion on page 29 that,

“the current FAS scheme is not the best way of ensuring good value, as there is a complicated process and benefit structure, considerable duplication of administration, insufficient risk pooling etc”?

Even the Government’s own review comes to that damning conclusion.

One hundred and twenty-five thousand members of failed pension schemes have been robbed twice; first when their funds collapsed, and now by a government ruse to block House of Lords amendments to the Pensions Bill today. Almost all Bills where the House of Commons and the House of Lords disagree involve some public expenditure, but the Government suddenly decided that they were losing the argument in Parliament and the country on justice for the robbed pensioners, so they forced through, by a 3:2 vote over Opposition protests in a reasons committee, to,

“disagree to Lords Amendments … Because they would alter provisions relating to taxation, and the Commons do not offer any further Reason, trusting that this reason may be deemed sufficient”.

In a Written Answer from the noble Lord, Lord McKenzie, the Government have admitted that it would cost only £19 million a year over the next five years or £25 million a year over the next 10 years to give robbed pensioners the benefits that they would receive from the Pension Protection Fund. With the Minister’s remarks about making extra value and matching forward, clearly those figures will be even less if further money is made available. I do not know whether the Minister can update and say how much less even than £19 million a year over five years or £25 million a year over 10 years it would now cost from where the Government have got to to pay the benefits we are asking for. Even the £19 million a year or £25 million a year are, frankly, small change compared to the major spending commitments in this Bill. The pension pots of the current Cabinet total more than £25 million.

This House does not seek to challenge the other place on financial privilege, but there is no fundamental breach of Commons financial privilege involved in the blocked Lords amendments. The Pensions Bill already has a hugely wide money resolution which sets no upper limit on the public expenditure it entails. There is no need to pass a supplementary resolution to cover any expenditure incurred by Lords amendments.

Parliament as a whole deserves a proper explanation of the reason why the Government—in a straight party vote in a committee chaired by a Minister, not some independent non-partisan ruling by the House of Commons, as people might think—have suddenly decided to pull up the drawbridge on debate now. Members of this House and the 125,000 robbed pensioners outside want to know why this decision does not have to be openly, properly and publicly debated and defended on the Floor of the House of Commons. Stifling debate by a majority of one vote in a committee of five people sitting behind closed doors is democracy in the dark. Britain deserves better from our Parliament.

The Minister said that we have a new Prime Minister, a new Secretary of State and a new Pensions Minister, but we have the same old spin on the FAS and the same old refusal to pay robbed pensioners their PPF benefits. We have this constant cheating with talking about core benefits whereas what the Government are proposing is more like 65 per cent of what people would be entitled to under the Pension Protection Fund. It is high time that they stopped spinning and started facing up to the demand for justice in the country.

My Lords, financial privilege has been raised again. I dealt with the position in relation to that when we discussed the previous amendment; that is, the Lords accepts those judgments of the Commons and the reasons given. It is also not right to say that the use of financial privilege has stopped debate on this issue. What have we just been doing? It would be perfectly in order for someone to move an amendment in lieu of the amendment that came forward so long as it did not impair the financial privilege of the other place. There was the opportunity to do that. We have not been stifling debate on this issue. Our exchanges have been reflective of the strength of feeling on this issue expressed in both Houses during the passage of the Bill.

The Government have always been sympathetic to those who have lost their pensions. Given this sympathy, we have always sought a satisfactory solution for those who suffered. We have had to balance this desire with the responsibility to ensure that any solution is fair on the taxpayer. The contributions of noble Lords and Members in the other place have helped us clarify where we might strike this balance.

We have moved forward. An amendment introduced by the Government during Report stage in the other place will guarantee that all 125,000 people affected will receive at least 80 per cent of their expected core pension. Let me make it clear: I believe that we have always used that term. If I have not in my earlier presentation, I reiterate it now. It is to do with core pension, which I accept is not the same as what would otherwise have been a full pension entitlement. That is of course subject to the cap. Indeed, with immediate effect from Royal Assent to the Bill, hundreds of people will be eligible for increased initial payments while their scheme is in wind-up.

During the other place’s consideration of amendments originally tabled in this House, my honourable friend the Minister of State for Pensions Reform gave a further commitment: we will use the assets that we expect to be identified in the Young review, together with a matched contribution from the Government, to raise the levels of assistance towards 90 per cent of expected core pensions. The noble Lord, Lord Skelmersdale, said that that was an uncosted commitment, and we chided the Opposition for their position, as that was not a fair analysis. Our pledge to match the extra value available from scheme funds as a consequence of the assets review is not an uncosted commitment. The Government will match funds to get to 90 per cent, up to a maximum, we estimate, of £225 million in net present value terms. The lifeboat amendment promised PPF-level benefits. That is a £640 million commitment without any real evidence for where that money might be found. We will be working with trustees in order to maximise the assets in their schemes to make a real, not a possible, difference to the assistance level for members.

The noble Lords, Lord Skelmersdale and Lord Oakeshott, asked whether we accepted the recommendations of the Young review that we could do better out of the assets of those schemes. That comes from the interim work that he has done, although we will have to await the final report. He believes that by a variety of mechanisms we can do better, and the amendment we are coming to next will illustrate the Government’s support for the position he has taken.

There are tangible commitments that will make a difference to the lives of thousands of those who have suffered. Both the noble Lord, Lord Skelmersdale, and the noble Lord, Lord Oakeshott, quoted the figure of 125,000 people. That is right, but it should be borne in mind that most of those have not reached pension age. To date, about 10,000 people have reached the age of 65 and are eligible. We are currently paying 1,367 people, 246 of them in annual payments and 1,111 in initial payments. A further 67 members will be paid once personal details are confirmed. Gross expenditure on payments to date is £5.28 million. One hundred and two schemes have completed notification, 867 schemes have completed qualification, 682 schemes have qualified and 288 schemes have provided data on their members that have been assessed.

I am sure that this issue, like the other amendment we have just discussed, will not go away, but I hope in the circumstances that the House will accept the Motion I have put to it.

On Question, Motion agreed to.

22: Insert the following new Clause-

“Purchase of annuitiesThe Secretary of State shall, as soon as is reasonably practicable, by regulations require the trustees of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) which have not yet completed winding-up to desist from purchasing (except where, on or before 18th April 2007, they have entered into a binding contractual commitment so to do) or making binding commitments to purchase annuities on behalf of scheme members, for a period of nine months from 18th April 2007.”

The Commons disagree to Lords Amendment No. 22 for the following Reason-

22A: Because the Commons consider that the prohibition on the purchase of annuities may have undesirable effects.

My Lords, I beg to move Motion D, That the House do not insist on its Amendment No. 22, to which the Commons have disagreed for their Reason 22A.

The other place disagreed with the amendment because, as drafted, it would have undesirable effects. The Government have great sympathy with the spirit behind the amendment, and we have decided to improve FAS benefits to members by matching the extra value produced as a result of funds remaining in schemes. We have written to trustees to urge them to consider carefully whether purchasing annuities, thereby depleting scheme funds, is in the best interests of all their members.

The Government accept that there are good reasons why, in order to ensure the greatest possible benefit for the greatest number of people, they may need to take powers to prevent annuitisation by FAS-qualifying schemes. However, the amendment would have made annuitisation unlawful from 18 April. Some trustees will be in the middle of negotiations, or already have proceeded to purchase annuities since then. For that reason, it would not be reasonable to halt annuity purchase without some notice.

Once the regulations introduced by Amendment No. 22 are made, the trustees who have purchased annuities believing that they are properly carrying out their fiduciary duty to members could be held to have acted unlawfully. That would not be a fair position to put trustees in.

I would like to take this opportunity to anticipate and welcome Amendment No. 22B tabled by the noble Lord, Lord Skelmersdale, which achieves the aims of Amendment No. 22 without the drawbacks I have already outlined. It strikes a pragmatic approach by putting a hold on annuitisation for the benefit of all members of qualifying pension schemes who hope to see the extra funds generated by the assets within their schemes matched by the Government, while allowing trustees to purchase annuities with the permission of the scheme manager where it would be appropriate for them to do so.

Clearly, the Government will need to consider carefully what those circumstances might be and how the scheme manager will exercise his discretion. I am grateful that the noble Lord’s amendment allows us a period of grace to think about this and consult trustees before we bring forward regulations. We will do that as soon as is reasonably practicable. I beg to move.

Moved, That the House do not insist on its Amendment No. 22, to which the Commons have disagreed for their Reason 22A.—(Lord McKenzie of Luton.)

rose to move, as an amendment to Motion D, Motion D1, at end insert, “but do propose the following amendments in lieu thereof—

22B: Insert the following new Clause-

“Temporary restriction on purchase of annuities(1) The Secretary of State must by regulations make provision for securing that, during the period of 9 months beginning with the date on which the regulations come into force, the trustees of relevant pension schemes are prohibited from purchasing, or agreeing to purchase, annuities on behalf of qualifying members, unless-

(a) before that date they have entered into a binding commitment to purchase the annuities, or(b) the purchase of the annuities is approved in pursuance of subsection (2).(2) The regulations must make provision-

(a) for enabling the trustees of a relevant pension scheme to apply to the scheme manager for approval of the purchase of annuities on behalf of qualifying members;(b) for authorising the scheme manager to approve the purchase of any such annuities if the scheme manager thinks it appropriate to do so.(3) For the purposes of this section an occupational pension scheme is a “relevant pension scheme” at any time during the period mentioned in subsection (1) if at that time the scheme is a qualifying pension scheme which has not been fully wound up.

(4) Regulations under this section-

(a) must be made as soon as is reasonably practicable after the passing of this Act;(b) may make such consequential, incidental, supplemental or transitional provision as the Secretary of State considers appropriate.(5) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

(6) In this section “occupational pension scheme”, “qualifying member”, “qualifying pension scheme” and “scheme manager” have the same meanings as in section 286 of the Pensions Act 2004 (c. 35).“

22C: Page 26, line 36, at end insert “and section (Temporary restriction on purchase of annuities)”

22D: Page 27, line 10, at end insert “and section (Temporary restriction on purchase of annuities)””

The noble Lord said: My Lords, I put down Amendment No. 75 in Committee as a means of keeping the Government to their promise of discovering whether better use could be made of the residual assets of pension schemes coming into the FAS. Ministers have already set up the Review of Scheme Assets led by Andrew Young, of which we have had some discussion over the past hour or so. That published its interim findings, very conveniently, late last week. The review gave strong indication that scheme by scheme annuitisation, the approach on which the current financial assistance scheme is predicated, does not offer the best use of assets and that there are a number of potential alternatives that should be able to secure better value for money and therefore increased assistance levels.

I know that the Government have written to scheme trustees—indeed, the Minister just said so—in the light of last week's announcement that they believe the Young review is on the right track, emphasising for them the key role that trustees have to play in helping to ensure that assistance levels can be increased beyond the current 80 per cent level of core pensions. The amendment makes explicit the sort of behaviour needed from responsible trustees to achieve that, giving the Government powers to enforce such behaviour in the best interests of the majority of those who have lost their pensions and who can now expect help from the financial assistance scheme.

The amendment requires the Secretary of State to make regulations suspending the purchase of annuities by trustees of pension schemes that have qualified for the FAS and which are still winding up for a period of nine months from the date the regulations come into force. That would give sufficient time for the Young review to complete its work and for the Government to make significant progress towards implementing its recommendations and securing better outcomes for scheme members, as long as the Government lay the regulations promptly. I hope that the Minister will be able to say how promptly he anticipates being able to lay them.

However, I recognise that there will be circumstances in which it might be appropriate for trustees to seek to annuitise. That is why the amendment gives the FAS scheme manager discretion to allow annuities to be purchased in some—I expect rare—instances. For example, that could be where a scheme is only lightly under-funded and therefore members are unlikely to benefit from the FAS overall.

Although Ministers in the other place did not like our original amendment as drafted, I detect from the Minister's words that they have seen the force of my argument that while the review completes its work there should indeed be a temporary bar on trustees annuitising their assets in most cases. I beg to move.

Moved, as an amendment to Motion D, Motion D1, at end insert, “but do propose Amendments Nos. 22B to 22D in lieu thereof”.—(Lord Skelmersdale.)

My Lords, we on these Benches welcome and support Motion D1. I have said a few harsh words to the Minister already and I shall chide him a little on the last Motion but, on this one, we welcome the spirit of compromise. I particularly welcome the pragmatic way in which the Minister has discussed this issue with the noble Lord, Lord Skelmersdale and me. This is the House of Lords at its best, if I may say so. We have ended up with a sensible and realistic solution, though obviously backed up to some extent—to use the words of the noble Baroness, Lady Hollis—by a certain amount of menace. We welcome this outcome.

It is clear from being repeated at various places in the Young review that instant annuitisation, or the rush to annuitise, is not on balance likely to be in the interests of most schemes or most scheme members. Halting the current annuitisation process will or should offer greater value for money. Indeed, it must make a lot of sense to think about having annuities purchased at the level of the entire FAS population. That makes the case even more strongly that we should probably roll the whole thing into a PPF-type arrangement. But that is for another discussion.

Reading the Young review, I am concerned at how many schemes have annuitised already or are in the process of doing so. The Association of British Insurers has written to me and no doubt to others, making the point—with which I have much sympathy—that there is probably not much in the unclaimed assets argument. On the ABI’s positive ideas on improving the use of the FAS existing assets to improve better value for money, one thing that leading insurers could do is not rush to enforce provisional arrangements when people are in the process of buying annuities. It is wise to stand back and take this window of review, and I hope that the ABI, whose two main members provide these annuities, will look at this very carefully. Even if people are well down the track of buying annuities, if they could put them on hold, that would be likely to be in the interests of members of those schemes.

Having said all that, I welcome the Government’s movement on this and the amendment moved by the noble Lord, Lord Skelmersdale, and look forward to seeing it passed.

My Lords, a question was posed about the speed of regulations. I assure the noble Lord that we would obviously seek to do it as quickly as we possibly could. I reiterate our support for the amendment.

My Lords, I am very pleased that the Government have seen the logic of my argument—that a little delay in annuitising individual scheme members’ pots is the right thing to do in the wake of the Young report’s interim findings. I must say that it is a pleasure to do business with a Minister who fights for the feelings of the overwhelming majority of your Lordships.

On Question, Motion D1 agreed to.

On Question, Motion D, as amended, agreed to.

28: Insert the following new Clause-

“Post-legislative scrutinyFour years after the passing of this Act the Secretary of State shall arrange for post-legislative scrutiny of this Act to check on its operation and may arrange subsequent scrutiny.”

The Commons disagree to Lords Amendment No. 28 for the following Reason-

28A: Because the Commons consider that imposing an obligation on the Secretary of State to arrange for post-legislative scrutiny is unnecessary.

28B: Insert the following new Clause-

“Review of operation of Act (1) The Secretary of State must, before the end of 2017, prepare a report on the operation of the provisions of this Act.

(2) The Secretary of State may prepare subsequent reports on the operation of the provisions of this Act.

(3) The Secretary of State must lay a copy of any report prepared under this section before Parliament.”

28C: Page 26, line 38, at end insert-

“( ) But section (Review of operation of Act) extends to Northern Ireland in accordance with subsection (1) only as respects the provisions of this Act extending there.”

My Lords, I beg to move Motion E, That the House do not insist on its Amendment No. 28, to which the Commons have disagreed for their Reason 28A, but do propose Amendments Nos. 28B and 28C in lieu thereof.

Before getting into the detail of the argument, I emphasise to the House that this is the one remaining issue that we have left unresolved, and it would be really good if we could reach consensus on it this afternoon rather than have to send it back to another place and expect its return. In that spirit, I reassure the House that the Government strongly agree with the principle of post-legislative scrutiny. However, the other place has decided that imposing an obligation on the Secretary of State to arrange for post-legislative scrutiny, as the amendment proposed by the noble Lord, Lord Fowler, would do, is unnecessary. I shall now set out what the Government propose in its place.

We made clear in earlier debate the very extensive programme of post-legislative activity that the Department for Work and Pensions will undertake to keep pension reform issues under review, and of course departmental Select Committees, independent think tanks, ad hoc commissions and external organisations all have their part to play in the scrutiny and review of how the law is working. But, quite separately, we are considering across government the case for a more formal process of post-legislative scrutiny.

I can assure the House that the Government, led by the leaders of the two Houses, are giving close and continuing attention to this issue and will certainly be responding to the Law Commission report. I hope, from the tone of the remarks of the noble Lord, Lord Fowler, when winding up the debate last time, that I had not inadvertently given the impression in some way that the commission's report was being left to gather dust. That is absolutely not the case, although I accept that it has taken longer than we had hoped. It is important, however, that the response to the commission is properly considered. The noble Lord's amendment places a duty on the Secretary of State to undertake post-legislative scrutiny, and since we as yet have no shared understanding or legal definition of what formal post-legislative scrutiny might entail, neither the Secretary of State nor anyone else could be absolutely certain whether what has been done would comply with that duty.

In moving the amendment at Third Reading, the noble Lord, Lord Fowler, called for post-legislative scrutiny to be undertaken by a parliamentary committee. It is for Parliament to decide to constitute such a committee and it is not within the Secretary of State's power or remit to do so. However, Parliament has already constituted the Work and Pensions Select Committee which is appointed to scrutinise the policy, legislation, expenditure and operations of the DWP. In addition, the Social Security Advisory Committee has a statutory remit to advise the Secretary of State on matters related to social security and to consider draft regulations. So any further scrutiny by another parliamentary committee would need to give careful consideration to ensure that efforts were not duplicated.

Our second concern relates to the timing proposed in the noble Lord's amendment. There is a package of reform measures which will come into effect over the next five years or so. In our view, it would be premature to carry out post-legislative scrutiny before the reform measures had been implemented or had time to bed in. For example, the reforms to the basic state pension take effect for people reaching state pension age in April 2010. Reviewing the Act in four years, in 2011, would provide very little time to gauge whether the reforms have been properly implemented.

At Third Reading, the noble Lord offered us a cautionary tale in the form of the 1986 Act and the subsequent failure to ensure that the measures on inherited SERPS, which did not come into effect for a further 14 years, were properly implemented. I assure the House that a great deal of activity is already under way to prepare for the implementation of the measures in this Bill from 2010. However, I accept that there might be concern about the implementation, for example, of the changes to the state pension age which do not come into effect until 2024 because of the time delay.

Notwithstanding the assurances that we have already given about our intention to keep the reforms under review, we accept that it would provide greater reassurance if this commitment were placed on a statutory footing. The amendment that I propose in lieu of the noble Lord's amendment would require the Secretary of State to review the operation of the Act and present a report to Parliament. That will provide Parliament with the opportunity to consider and debate any such report and, to all intents and purposes, effectively provides post-legislative scrutiny. The timetable I propose, for a review to have taken place by the end of 2017, would allow such a review to take place after most of the provisions have had sufficient time to bed in. It will also enable us to review the state of readiness for implementing the state pension age changes from 2024 and take any remedial action that may appear necessary.

As I said, the measures in this Bill take effect in stages. For example, the changes to the contribution conditions which will be of significant benefit to women come into effect for those reaching state pension age in or after 2010. But the flat rating of the state second pension will not take effect until 2012. We have also made clear our aim to restore the link between the basic state pension and earnings in 2012, subject to affordability and the fiscal position. The state pension age changes, on the other hand, do not come into effect until 2024. We therefore think it sensible to conduct a review at the mid-point when the first of these changes have had a chance to bed down and we can at the same time ensure that we have a robust delivery plan in place for the later stages.

I should point out that the amendment includes the flexibility to carry out the review earlier than 2017 if it seems appropriate. The House will recall that 2012 is also when personal accounts go live. We have already said in our response to the Select Committee that we will undertake a review of aspects of the personal accounts arrangements in 2017, so although the scope of the review of the operation of this Act will be limited to the setting up of the delivery authority, the timetable will allow for these issues to be looked at in parallel. This amendment does not, of course, mean that we should not examine the effectiveness of our policies before 2017. For example, the data on the number of women who have benefited from the reforms to the basic state pension will be available by mid-2011 and the personal accounts delivery authority will be required to publish annual reports on its activities throughout its lifetime. However, I suggest with great respect that the requirement to review at the four-year point is surely too early given that some of these provisions simply would not have come into effect by that time.

For completeness I should add that the amendment to Clause 28, Amendment No. 28C, is purely consequential. Clause 28 defines the extent of measures in this Bill; this amendment would ensure that any review of the operation of this Act takes account of those provisions in so far as they relate to Northern Ireland.

As I have said, we have no objections to the noble Lord’s amendment in principle. Indeed, it is eminently sensible and consistent with the principle of good administration that we ensure that the measures enshrined in the Bill are followed through. I hope that he will accept that the amendments I propose in lieu of his own substantially address this concern. I urge the House not to allow this legislation to linger longer. There is much in it that we need to get under way as quickly as possible. I beg to move.

Moved, That the House do not insist on its Amendment No. 28 to which the Commons have disagreed for their reason numbered 28A, but do propose Amendments Nos. 28B and 28C in lieu thereof.—(Lord McKenzie of Luton.)

My Lords, I beg to move, as an amendment to Motion E, Motion E1, leave out from “House” to end and insert “do insist on its Amendment No. 28.—(Lord Fowler.)

I welcome the tone of some of the Minister’s remarks this evening, which are substantially different from what we have heard at previous stages of the Bill, particularly what he said about the principle of post-legislative scrutiny and seeking to put a duty in the Bill. Step by step we are getting to the position that we would like to get to but we have not yet arrived there.

I am not very impressed with the so-called compromise being offered by the Government on when their form of post-legislative scrutiny should take place. Many advocate scrutiny after three years. I have proposed four years, but with the addition that the Secretary of State can carry out further scrutiny at any stage later on, which I think meets many of the points that the Minister put. The Government propose their form of post-legislative scrutiny not in 2012 or 2015 but 10 years hence by the end of 2017. Frankly, it puts a whole new time-scale on the plea, “Make me good but not yet”. Even then it sounds as though it will be only half good because I suspect that the review being offered is the Secretary of State’s own review and not that of a Select Committee. However, I may be wrong on that. I am afraid that, as regards the timing, the offer is impossible to accept. I suspect that that does not come as a vast surprise to him, the Government or the department.

I also do not accept the argument that we are now running out of time. The forthcoming business of the House of Lords is not a state secret; it is set out in the programme of Forthcoming Business, and for Wednesday 25 July and Thursday 26 July it is set down that consideration of Commons Amendments may be scheduled. I stand ready to respond to whatever new proposals the Government wish to make.

I will be brief, as I have rehearsed my argument at earlier stages of the Bill. In essence, it is that some of the worst mistakes take place not because legislation is badly drafted, but because it is wrongly implemented. In other words, pre-legislative scrutiny may be important, but checking the legislation after it is passed to see that it is being implemented properly is also essential. We are not concerned with repeating the arguments used during the passage of the Bill, but in checking the outcome. That process of checking what happens after the Bill becomes an Act is supported by, among others, the Hansard Society, the Law Commission and by the House of Lords Constitution Committee. It has also been strongly endorsed by a number of influential individuals. One said:

“Parliament and government have a common interest in strengthening post-legislative scrutiny. From the Government’s point of view, it could help to ensure that the Government’s aims are delivered in practice and that the considerable resources devoted to legislation are committed to good effect”.—[Official Report, 6/6/05; col. 769.]

That was the noble Baroness, Lady Amos, when she was Leader of the House.

Another former Minister said that she advocated post-legislative review,

“in order to illuminate and see what lessons can be learnt for the future handling of the legislative process”.

That was Margaret Beckett, former Foreign Secretary and at one stage deputy leader of the party opposite. Perhaps the most interesting intervention was by a current member of the Cabinet, who said:

“In principle I think this is a very fruitful avenue for us to explore together because there is no point in passing legislation if it is not having the desired impact or it is having a different impact”.

That was Peter Hain, the Secretary of State in charge of this legislation, who is now resisting the amendment.

The trouble is that, when it comes to it, Ministers are in favour of post-legislative scrutiny in principle but not when it comes to their own Bills. It reminds me of the position with departmental Select Committees when they were set up by my noble friend some years ago. All Ministers thought that in general it was a good idea, as long as it did not apply to their department. In post-legislative scrutiny, they do not want to run the risk that it may be pointed out that their plans are not working out. I suggest that that is wrong and that the earlier the intervention the better, from the point of view of the public and the taxpayer.

Pensions are a prime example. At an earlier stage, as the Minister said, I gave an example of legislation of my own, the Social Security Act 1986, which reduced and changed the amount of SERPS that widows or widowers could inherit. My then Minister of State, John Major, promised a major publicity campaign. We both left the department in 1987, there was no publicity campaign, and the department published the wrong advice in a leaflet. A Select Committee carrying out post-legislative scrutiny would have picked that up, and it may well have picked up the fact that the department was giving the wrong advice about the security of final salary occupational pension schemes, about which we were talking earlier, which led to the adverse finding against the Government in March 2006 by the Parliamentary Ombudsman. As the noble Baroness, Lady Hollis, fairly pointed out in our debate on 11 July, post-legislative scrutiny could have helped in avoiding the failure of stakeholder pensions and one of the unforeseen consequences of pension credit; bringing more and more people into means testing.

Potentially, the amendment could prevent error and avoid costly mistakes. What is the Government’s case? Up to now, it has been that the amendment is unnecessary. I am glad to say that they are now moving from their position that they do not need any advice. Now their position is that four years for post-legislative scrutiny is too early; for example, they say that the earnings uprating of pensions will come into effect only in 2012. However, the Bill is about much more than that. It is 65 pages long, with 70 pages of Explanatory Notes. To give but one example, the workings of the Personal Accounts Delivery Authority may be important for the success of widening pension ownership. Even the statement about the earnings uprating coming into effect in 2012 is not quite true; as the Minister said, the Government’s White Paper states:

“Our objective, subject to affordability and the fiscal position, is to do this in 2012, but in any event by the end of the Parliament at the latest. We will make a statement on the precise date at the beginning of the next Parliament”.

Therefore, it could come in in 2015, and post-legislative scrutiny might want to point out the cost of that delay in extra pension credit. More generally, it might want to take into account any events of importance affecting pensions over the previous four years, which is the average length of a whole Parliament, after all.

The Government’s case ignores the point that my amendment explicitly gives the power to the Secretary of State to have further scrutiny. We should remember that a second Pensions Bill is behind this one; I doubt very much that all the unseen problems will be dealt with in one round of scrutiny.

In a sense, my next point is even more crucial than all my others. Some in the House may have their reservations about my amendment; the Minister clearly does. I hope that not all noble Lords share them; certainly, that was not the case in earlier debates. The amendment was originally carried by 141 votes to 138. It then went to the House of Commons. Any of your Lordships who wanted to check the argument used there for rejecting the amendment would be sadly disappointed. It was never debated. Ministers were never questioned. The guillotine came down before any Member of the House of Commons had the opportunity to say a single word. That is utterly destructive of the parliamentary process. The Minister says that the other place has decided, but it has decided without debate, questioning or words being uttered.

The new Prime Minister talks of restoring the authority of Parliament. I agree. The kind of parliamentary scrutiny by a Select Committee or some other parliamentary committee implicit in my amendment would certainly help that process. Equally, I am sure that guillotining Bills so that the Commons simply does not have the opportunity of even debating the amendments of this House is against the interests of anyone who believes in the effective working of Parliament. For both those reasons, I ask the House to support my amendment.

Moved, as an amendment to Motion E, Motion E1, leave out from “House” to end and insert “do insist on its Amendment No. 28”.—(Lord Fowler.)

My Lords, I support my noble friend in pursuing his original amendment. The Government have only themselves to blame for the fact that the Motion is before us. Had they responded to and acted on the Law Commission’s report on post-legislative scrutiny, there would be no need to pursue the case for such scrutiny on an ad hoc basis.

The Law Commission published its report in October last year. The Government are committed to providing a detailed response to all commission reports as soon as is practical and, as the former DCA website states:

“In any event, the relevant department will provide at least an interim response to the Commission within six months of publication of each report”.

Nine months on, we are still waiting. At Third Reading, the Minister said:

“We are consulting across government before we respond formally to the commission’s proposals in the coming months”.—[Official Report, 11/7/07; col. 1418.]

The Minister’s reply was the same as that given to justify the delay in responding to the report of the Merits of Statutory Instruments Committee on the management of secondary legislation. That report was published in March last year and the Government’s response was debated in this House at the end of November. The justification for the delay—consultation across government—meant that it was proving difficult to gain agreement from departments because, I suspect, officials realised that the recommendations, if implemented, smacked too much of hard work and there was a lack of leadership from the top.

The result was a response that came from the bottom up, rather than from the top down. The noble Lord, Lord McKenzie, would be well advised to read in that debate the concluding comments of his noble friend Lord Filkin, chairman of the Merits Committee. I very much hope that we will not see a repetition with a late and meagre response on this occasion. The delay is far from encouraging. There is movement within Parliament, primarily through the Liaison Committee in the other place, but not much, apparently, within government.

The noble Lord, Lord McKenzie, said at Third Reading that accepting the need for post-legislative scrutiny of this Bill might pre-empt some of the Law Commission’s recommendations. That does not follow. The Motion is not prescriptive in terms of form, which I regard as a strength not, as the Minister does, a sign of weakness. There are precedents for providing for post-legislative review in specific cases, as shown in appendices to the Law Commission report. In any event, as my noble friend pointed out, the case is now conceded by the Minister’s own amendment.

The principle embodied in my noble friend’s Motion is important. The Government, as the Minister indicated, now accept the principle. During the Committee stage of the Legislative and Regulatory Reform Bill, the noble Lord, Lord Bassam, declared:

“We … believe that all departments should keep their legislation under review”.—[Official Report, 10/7/06; col. 494.]

However, the Government have yet to deliver a mechanism for such review. The Minister’s amendment accepts now the case for review in respect of the Bill, but the delay until 2017 is essentially a long-grass provision. The chances of it being undertaken earlier are, I suspect, slim.

The response in the other place to the amendment passed by this House can be challenged on two grounds. First, as my noble friend said, the amendment was not debated. Secondly, the reason given for the rejection is at odds with the Minister’s amendment. The Commons reason is that post-legislative scrutiny is unnecessary. The Minister’s amendment provides for post-legislative scrutiny—albeit at a point too far in the future. The Government thus concede that the reason given by the Commons is flawed. The case for post-legislative scrutiny is compelling and I trust that by pursuing this Motion we will spur the Government not only to accept the case for it on this Bill but to respond positively to the Law Commission’s report. I support my noble friend’s Motion.

My Lords, I am delighted to support my sea-view neighbour, the noble Lord, Lord Fowler. I was invigorated by a bracing dip in Seagrove Bay this morning before I came here and I feel particularly vigorous on his behalf.

I have received a letter from the honourable Mr Justice Etherton, the chairman of the Law Commission, following my speech in support of the amendment of the noble Lord, Lord Fowler, at Third Reading. The letter states that,

“consultation has been taking place across Government and considerable effort is being made to secure agreement on how to implement our recommendations … Although there has been no formal response by the Government to our report, we have been fully aware for some considerable time that the recommendations have been well received … and that the Government has been and still is actively considering the most appropriate method of implementing them”.

In government, I was a special adviser to the Home Secretary, many years ago. I know the code. I know when nothing is happening. The noble Lord, Lord Norton, has already told us the timescale.

I should say to the chairman of the Law Commission and the Government that achieving consensus is not simply, or even mainly, a matter of interdepartmental negotiation within government, as the letter seems to imply. It is high time that the Government gave their official and considered response to the Law Commission’s report on post-legislative scrutiny, so that Parliament, opposition parties and informed and interested opinion outside can debate, consider and build on it a genuine and lasting consensus. You do not do that behind closed doors with the long grass growing.

The noble Lord, Lord McKenzie, also kindly sent me a letter on similar lines to that of the Law Commission. I wonder whether they are written by the same person. He said that,

“the Law Commission’s report has been the subject of close and continuing consideration … the issues … are complex … It is important that we get the response right if we are to draw the maximum benefit … I cannot be specific at this stage as to when final decisions will be taken, but I accept that the response has taken longer to prepare than we would have wished. The chairman of the Law Commission … was updated with the state of play at a meeting in May”.

That will not have been a very long meeting.

When will the Government give their response? Can the noble Lord assure us that it will not take four more years? If he can, there is no earthly reason why he should not accept the amendment of the noble Lord, Lord Fowler, today because, if this Government are still in office, they will be able to put this Bill, when enacted, through whatever their preferred form of post-legislative scrutiny might be. If he cannot give us that assurance, he should simply curl up in shame.

My Lords, amusing as that speech was, perhaps it is now time to return from the general to the particular with the amendment of my noble friend Lord Fowler. I am glad that he intends to insist on that amendment. The amendment in lieu offered by the Government is not in any way adequate to achieve the sort of scrutiny that was set out, and it would reduce the concept to what I can only describe as a mere fig leaf.

The whole intention of post-legislative scrutiny is to catch problems before or shortly after they arise. By ensuring higher-level scrutiny of the provisions in the Bill as they are rolled out, the Government’s assurances and commitments to Parliament can be checked against the guidance that is given. That is doubly important, as this Government have drastically reduced the amount of detail in Bills and are in the habit of assuring your Lordships that a promise on the Floor of the House is the same as putting it in the Bill—not that the Minister has done that today. With this amendment, as has been said, such promises would carry more weight and do more to hold Ministers to account.

Much in the Bill would benefit from independent post-legislative scrutiny. Not only would it confirm the Government’s assurances that their new plans are enough to make the amendment of the noble Baroness, Lady Hollis, on women’s pensions unnecessary but it would also provide valuable scrutiny of the initial stages of the Personal Accounts Delivery Authority and, of course, it would allow the Government’s promise that the FAS is poised to start handing out money to be validated.

I therefore hope that the Minister will appreciate the feeling in this House that it is time that the Government came forward with some serious proposals for post-legislative scrutiny, rather than just talking around the subject. This Bill is an excellent place to start and I hope that noble Lords will continue to support my noble friend today.

My Lords, I suspect that it will not be fruitful to prolong this discussion endlessly but I want to take the opportunity to make a few points. I emphasise that the issue of post-legislative scrutiny does not divide us. We agree that it is appropriate and confirm that we would want it for legislation—in particular, for this Bill.

The noble Lord, Lord Fowler, said that some say that the timescale should be three years but that he has moved to four. It depends what time you switch the clock on for those timeframes. There is a difference between a date from Royal Assent and a date from when the provisions in the legislation take effect. When one thinks about it, 2017 is simply one year on from when some of the key provisions in the Bill will kick in.

The amendment in lieu concerns an obligation on the Secretary of State. Nothing prevents Select Committees from doing their work in the interim and, quite properly, that should not be under the direction of the Secretary of State. The noble Lord himself said that there was a lot to scrutinise and look at in relation to the delivery authority. That is absolutely right, but a second Bill will be introduced in the next Session and there will be ample opportunity to look at that in considerable detail as the legislation is put in place.

Both the noble Lords, Lord Norton of Louth and Lord Oakeshott, pressed me on the issue of the Law Commission report. I do not think that I can go further than what has been put in writing. I thought that it was rather a good letter.

The Government are looking at this seriously. I know that it is always possible to chide the Government and say, “Why didn’t you do it last month or the month before?” but these issues are not altogether straightforward. There is an intent to move them along as quickly as we can, but I cannot give a commitment on timing. It is a pity that we will divide on this, because in the scheme of things the difference is narrow. The timeframe may be a few years from the date when some of the key provisions in the Bill kick in.

I emphasise that there is nothing to prevent a Select Committee, Joint Committee or whatever from discussing post-legislative scrutiny. That is a matter for Parliament, not the Secretary of State, which will have its will in accordance with whatever is constituted. Nothing in the amendment of the noble Lord, Lord Fowler, or my amendment in lieu changes Parliament’s ability to do that. I do not see the substantive difference that the debate has suggested. I shall leave it to the noble Lord to test the opinion of the House.

My Lords, I thank the Minister for his reply, although at some stages he made my case even stronger. The fact that a second Bill is coming makes the case for post-legislative scrutiny stronger rather than weaker. I thank the noble Lords, Lord Norton, Lord Oakeshott and Lord Skelmersdale. The noble Lord, Lord Norton, is absolutely correct. At one stage—this is even in the paper that we have in front of us—the Government were saying that the amendment was unnecessary. That is what the Commons said. Now, we are hearing, “Curiously, secretly and privately we agree with the principle of post-legislative scrutiny”.

My Lords, I heard the Minister’s reply and leave it for the Government to sort that out. The idea of having post-legislative scrutiny of this Bill by the end of 2017 is unacceptable. The noble Lord, Lord Oakeshott, is right that we have the opportunity of taking a decision now after years of prevarication. This is not about a few months; post-legislative scrutiny was the subject of my maiden speech when I came into the House in 2001.

What was fascinating about the Minister’s reply is the point that he did not mention from beginning to end. When we passed the amendment and put it to the Commons, it was not debated in any way, shape or form. The Minister was not questioned; no one could give their views or say anything about it. I cannot believe that anyone in this House or in the House of Commons could regard that as an acceptable or desirable way of doing business. The amendment would allow the House of Commons to consider the issue for the first time. The Minister said that the Commons has now decided; it may have done so, but not on the basis of any argument. We are saying to the Commons, “For the first time, you have the opportunity to debate and question this”. On the constitutional side, the Government’s position is entirely indefensible. The only sensible and fair way forward is to test the opinion of the House.

Motion E, as amended, agreed to.

Offender Management Bill

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

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

commons amendments AND REASONS

[The page and line references are to Bill 53 as first printed for the Commons.]

Motion A

6: Page 3, line 21, leave out “Secretary of State” and insert “probation boards and probation trusts”

The Commons disagree to Lords Amendments Nos. 6, 9, 12 and 13 for the following Reason-

6A: Because it is an essential feature of Part 1 of the Bill that the commissioning function in Clause 3(2) is exercised by the Secretary of State.

8: Page 3, line 35, at end insert-

“(3A) If it appears to the Secretary of State that sufficient provision of probation services is not being, or will not be, made in accordance with the arrangements under subsection (2), he shall-

(a) make contractual or other arrangements with any other person for the making of the probation provision; or(b) make the probation provision himself.”

The Commons disagree to Lords Amendment No. 8 but propose the following Amendment in lieu-

8A: Page 3, line 35, at end insert-

“(3A) The Secretary of State may make provision for the performance of any function to which section 2(1)(c) applies by making arrangements under subsection (2) above providing for the delegation of that function to the other person.”

My Lords, I beg to move that the House do not insist on its Amendments Nos. 6, 8, 9, 12 and 13 and do agree with the Commons in their Amendment No. 8A in lieu.

Before I deal with the substance of the Motion, I should like briefly to remind the House how far we have come in our consideration of this Bill and how much it has improved as a result. The Government have listened carefully to the points made here and in the other place and we have made amendments on its aims, the restriction of court work to the public sector, national standards, training, pay, local area agreements, plans and consultation. Moreover, even at this late stage, we have made further amendments on conflict of interest and order-making powers for the establishment of trusts. However, we are now reaching the point where we need to finalise the provisions in the Bill. The Commons agreed.

Your Lordships will be aware of the real concerns which existed in the other place when the Bill had its Report and Third Reading stages in February. Your Lordships will also be aware that a number of the Government’s own supporters went so far as to vote against the Bill at Third Reading. But Lords Amendment No. 6 was disagreed to by a majority of 128. The other place has now recognised the improvements which have been made and has given its clear support to the Bill. I hope that this House will now feel in a position to do the same.

The noble Baroness, Lady Anelay, has tabled amendments to Commons Amendment No. 8A in lieu to propose that the probation trust or local lead provider should engage with the local strategic partnership to agree and implement local area agreements. The amendments also propose that the contract with the local lead provider should reinforce these obligations. That is very much what we expect to happen in practice. My right honourable friend the Minister of State, David Hanson, made it clear in the other place last week that commissioning will be a national, regional and local activity and that the local probation trust will be the lead provider provided that it meets the necessary performance standard. My right honourable friend also said that he would consider reinforcing that in the Bill. I believe that that is what the noble Baroness, Lady Anelay, may have had in mind and why she has tabled her amendment today.

I need to point out that the amendment is technically flawed as it employs terms that are not defined in statute, such as “lead provider”, “regional commissioner” and “local strategic partnership”. However, I also accept that that is not the main point that we need to focus on today. I understand why the noble Baroness wants to draw attention to what my right honourable friend said in the other place. I respectfully suggest to the House that what he said is a matter of real importance. My ability to confirm that statement to your Lordships’ House is also, if I may say so, of significance.

My right honourable friend has given consideration to the matter but continues to believe that it is not necessary or appropriate to make those commitments in the Bill. He has made the position very clear on the Floor of the House, as has my right honourable friend the Secretary of State for Justice and Lord Chancellor, in correspondence which I hope that a number of your Lordships will have read. That states very clearly how we propose to continue with the matter. All our plans for implementation are based around that concept. The letter makes it absolutely clear how the Government intend to proceed.

I know that it was that assurance that the noble Baroness, Lady Anelay, was most keen to secure and I am very happy to have been able to repeat the statements made by my right honourable friend in the other place, so that this House has the same assurance on those matters as Members of the other place. I hope that the House will accept those assurances and that the noble Baroness Lady Anelay, will not press her amendments, having achieved with such elegance and success all that she could possibly want.

Moved, that the House do not insist on its Amendments Nos. 6, 8, 9, 12 and 13 and do agree with the Commons in their Amendment No. 8A in lieu.—(Baroness Scotland of Asthal.)

rose to move, as an amendment to Motion A, at end insert “but do propose the following amendments to Commons Amendment No. 8A in lieu—

8B: Line 4, leave out “the other person” and insert “the probation trust, or another local lead provider”

8C: Line 5, at end insert-

“(3B) The probation trust, or another local lead provider, shall engage with other partners in the local strategic partnership to agree and implement local area agreements.

(3C) The regional commissioner shall ensure that the contract with the local lead provider enables the obligations under the provisions of subsection (3B) to be fulfilled.””

The noble Baroness said: My Lords, Motion A1 is an amendment to Motion A. The Minister said with flattering tones that I had managed to achieve in some elegant way all that I could expect to achieve. Well, no, what I have achieved is only what the Government sought to achieve by way of reassurance to their honourable friends in another place. However, I accept that the Minister has done as much as the Government are prepared to do. I therefore make it clear at the outset that my amendments were tabled only as probing amendments and remain so. I shall not be inviting my noble friends to divide the House on this matter.

For us, the core issue in the Bill is our objection to the Secretary of State’s plans to take central control of the commissioning of probation services. We prefer local control by local people, who know best what suits their needs. The House agreed with us at Report on 27 June and passed amendments to give effect to that objective. The Government today seek to overturn those amendments after a vote in another place.

The Government have argued that if they are not allowed to give the Secretary of State centralised control, nothing will change—that probation trusts cannot be trusted to extend contracts for the delivery of probation services more widely to private contractors and to the third sector. We had that full debate at Report.

The Government therefore ignore the vehicle for change that they seek to impose in any event: the new business-based membership of the probation trusts, which will rise, phoenix-like, from the ashes of the probation boards. If the Government trusted their own new system for appointing members of probation trusts, surely they should be able to give them the power to commission services, instead of holding that power centrally in the hands of the Secretary of State. We have the extraordinary spectacle of the Government changing the membership of the trusts so that they will be business-focused, and then undermining them immediately by legislating to give the overall power for commissioning to the Secretary of State. What do the Government say in their defence? They say, “Well, we do not really mean it. Despite what the Bill says, something different will happen. We will delegate our centralised power to probation trusts sometimes, perhaps often, perhaps as a matter of practice”. The terminology has changed, and at times elided, in our debates.

The Government wrote to their Members of Parliament in another place before the Commons’ consideration of Lords amendments last week to put that into print. The noble and learned Baroness has summarised that very efficiently and effectively today, for which I thank her. However, it is right to quote from that letter today, because not all noble Lords will have had the opportunity to see it. I have been able to show it to one or two noble Lords. It has also been posted on the website of the National Association of Probation Officers, so it is a matter of public record although not publicly seen. I shall quote selectively from it, as one does from such letters, but I hope to highlight the matters on which we agree, not disagree. It says:

“We see commissioning as a national, regional and local activity, with the local level playing a crucial role … Some very specialist, low-volume, high-cost services may be commissioned on a national basis. But commissioning at the national level will generally focus on setting the overall objectives, standards and targets for the system”.

Mr Straw went on to claim that the government amendments tabled last week in another place would enable the Secretary of State to delegate his responsibility for commissioning,

“to the probation trust, or another lead provider, and”—

he underlines the following—

“this is what will happen in practice”.

I accept that that is a considerable advance on the Government’s position both at Third Reading in another place and subsequently in debates in this House, but it still does not change the fact that the Bill puts the power for commissioning centrally in the hands of the Secretary of State. I also accept from what the Minister has said that the Government have given assurances, which are on the record. No doubt Parliament will seek to hold the Government to account if they decide to do otherwise.

This matter was debated very thoroughly indeed in another place last week. Unlike the amendment on which noble Lords have just voted, this amendment had a fair and full hearing. Several of the Minister’s honourable friends questioned Mr Hanson, the Minister in another place, very closely—at col. 360 on 18 July. They asked in particular that the structure that was set out in Mr Straw’s letter of 17 July, from which I have just quoted, should be in the Bill. As the Minister has said today, Mr Hanson responded—at col. 366—by giving a commitment that he would look further into the possibility of putting this policy statement into the Bill. The Minister tells us today that the Government have thought about it but think that it is neither necessary nor appropriate to put it into the Bill.

My amendments were tabled with the specific objective of ensuring that these matters were discussed today. Unusually, I tabled them not because I want them to be in the Bill but because I do not. I do not feel that they advance the Bill further towards the purer objective that I seek: that there should be local control. I sought instead to give this House the opportunity to hear what the Minister in another place said in the debate last week and to hear from the Minister in this place the assurances that she has given today. The amendments were therefore tabled to achieve completeness in the debate, but not to achieve the complete satisfaction that would be arrived at only if the Government had accepted them. But there comes a time in the debates between both Houses on matters of principle when we know at some stage that we on these Benches have to say that we have presented our case and that we disagree on principle. Because we are not yet the elected House, these are the times when we have to reflect carefully as to whether we proceed further. That may change in the future, but today is today. On the basis that on this matter I do not seek to return the matter to another place, I will not press my Motion. However, at this stage, because of proceedings, I beg to move.

Moved, as an amendment to Motion A, Motion A1, at end insert “but do propose the following amendments to Commons Amendment No. 8A in lieu, Amendments Nos. 8B and 8C”.—(Baroness Anelay of St Johns.)

My Lords, the noble Baroness, Lady Anelay, has been consistent in her comments on this matter. She knows that she has had our support all through the Committee and Report stages. The arguments have been well rehearsed. I do not think that I need to add anything further, except to say that the issue at the centre is about local agreement and central control. I accept that the amendment may be faulty, but we need to look at what it is trying to achieve.

Because of the number of changes as regards this Bill in the past two or three years, I have no doubt that we will be back here before long. If we look at the Government’s legislative programme announced two weeks ago in this House, the emphasis that the Government are to give to local control and involvement is clear. I have no doubt that we will see that. In the mean time, as the noble Baroness, Lady Anelay, is not proceeding any further with this matter, I want to assure her that in the future together we may be able to put it right.

My Lords, in recognising the line that the noble Baroness, Lady Anelay, has taken, I should like to quote one further sentence from the letter from the Secretary of State to Mr Neil Gerrard. It refers to the Local Government Association, which is one of the bodies mentioned in our debates as a stakeholder, particularly for local commissioning, if more responsibility is to be passed on to local commissioning and local arrangements. The letter states:

“Local Government has today made clear that their fundamental concerns about local accountability within the Bill have been addressed and that ‘the Bill should provide for genuine local commissioning and offer a real opportunity for increased involvement of other providers such as the voluntary sector, whose expertise and experience has much to offer’”.

That seems entirely in line with what the Motion proposed by the noble Baroness was designed to achieve. As it has achieved it in the words of the Secretary of State, I absolutely understand the line she is taking.

My Lords, I support what my noble friend has said. The matter of who will help people not to reoffend is enormously important. I am very worried that the system being set up by the Government will not work. I do not believe that the central control of this matter will operate successfully. I say this because I was at a meeting before, I think, Second Reading with the noble and learned Baroness, Lady Scotland, and the voluntary organisations involved. The voluntary organisations were thrilled that they will get a better opportunity to enter the foray. In discussions with them afterwards, I felt that they did not realise the problems that centralisation would present. My noble friend and many others have tried to persuade the Government that they are making a mistake. They are insisting on doing it this way.

My noble friend said that were we an elected House, she would divide. I applaud her for saying that because I am very sorry we do not feel that we have a mandate to pursue this matter because we are not elected. When I came to this House having been elected in local government, I felt the difference between being an elected person and not being one. I still feel it. It makes me wonder whether we are right to continue as an unelected House. Were we elected, we would certainly not let the Government get away with this one, arranging something that I do not believe will not work. I support my noble friend.

My Lords, I am in danger of striking a discordant note as all this harmony starts breaking out, but, having listened to the previous two or three speakers, I feel bound to point out one or two things that come from a different direction.

It is worth bearing in mind why we started with the Bill in the first place: there had been a failure under successive Governments to get the Probation Service to drive an agenda of bringing in outside providers from the public, private and voluntary sectors that might provide a wider range of services that would benefit offenders and, by association, the public themselves in trying to prevent reoffending. That is where we came from.

In my view, the reason we found ourselves in that position as a Government was well expressed by one statistic, which my right honourable friend the Minister of State in the Ministry of Justice, David Hanson, gave in a debate in the other place on 18 July. He drew attention to the fact that 96 per cent of probation services are now provided on an in-house basis. My understanding is that that is a national percentage figure, so the figures in some places may be even higher.

The Government are entitled to have a degree of scepticism privately about the lack of progress in this area over a long time. It is worth bearing in mind that the previous Conservative Home Secretary, Michael Howard, tried to shift those percentages in the right direction but was, if I may put it this crudely, seen off. There is a great deal of scepticism in the voluntary sector—here I have to declare my interest as vice-president and former chair of Rainer—about whether people will deliver. The voluntary sector has been in this territory for a long time and it wants, and is able, to do more. We should pay attention to some of its concerns, not just to those of Napo and the Probation Service. There are people out there in the voluntary sector who want to see this work but have undoubtedly to take account of some previous practices in this area.

I am glad that the noble Baroness, Lady Anelay, will not press the amendment. The Government have come a long way and are committed to local commissioning, but are entitled to hold some things in reserve should the need arise in particular places. I hope they will not and that that will not be necessary, but we cannot altogether ignore some of the lessons of history.

My Lords, I am grateful to all those who have spoken, particularly to the noble Baroness, Lady Anelay, for indicating so clearly that she had no intention to divide the House and that hers was a probing amendment. I am pleased that I have been able to give her the reassurance she seeks, but I agree with my noble friend Lord Warner that it is important that we retain for the voluntary sector, and for those others who wish to help us deliver something better, an opportunity to do so. We will be able to do that regionally, locally and nationally. I beg to move.

My Lords, before we reach that stage I think I must formally withdraw my amendment; then we can leave the Floor open to the noble and learned Baroness. I put on record my thanks to all those who have supported me over the past few months when I have argued for the principle of trusting local people. That has been an important argument in the Bill. I could take time to rebut all of the arguments put forward by the noble Lord, Lord Warner, but that would be tempting me to engage in yet another Second Reading speech and that is not what we do at this stage. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn

On Question, Motion A agreed to

11: Page 3, line 46, at end insert-

“(6) In carrying out their functions under this Part, and in particular in providing any assistance to the courts and to the Parole Board for England and Wales, providers of probation services and their officers shall ensure that such assistance does not give rise to any conflict of interest between their obligation to give such advice impartially and the financial interest of the provider.”

The Commons disagree to Lords Amendment No. 11 but propose the following Amendment in lieu-

11A: Page 3, line 46, at end insert-

“(6) In carrying out functions under this Part in relation to arrangements under section 3(2) with another person (“the provider”), the Secretary of State shall have regard to the need to take reasonable steps to avoid (so far as practicable) the risk that-

(a) the provision, in pursuance of the arrangements, of assistance to a court or to the Parole Board for England and Wales, and(b) the carrying out, in pursuance of the arrangements, of any other activities,might be adversely affected by any potential conflict between the provider's obligations in relation to those activities and the financial interests of the provider.”

My Lords, I beg to move Motion B, That the House do not insist on its Amendment No. 11 and do agree with the Commons in their Amendment No. 11A in lieu.

My right honourable friend the Minister of State made it clear in the other place that the Government fully accept the principle of the original Lords amendment. We have always said that we need to do all that we can to guard against potential conflicts of interest. It became clear in the debates that we had that there was nothing between us on that issue. Having reflected carefully on the points that were made in debate in your Lordships’ House, we accept that it is appropriate to make a clear statement in the Bill about this fundamental issue. I should like to thank the noble Baroness, Lady Anelay, for tabling her original amendment to that effect.

Our Amendment No. 11A to Lords Amendment No. 11 is intended simply to make it more technically robust. Our amendment differs in two ways. First, it places the duty on the Secretary of State, rather than the provider. That is because the Secretary of State will be better placed than individual officers or providers to take an over-arching view of where potential conflicts of interest might occur and to ensure that the necessary safeguards are put in place.

Secondly, we have changed the language from,

“shall ensure that such assistance does not give rise to any conflict of interest”,

to,

“shall have regard to the need to take reasonable steps to avoid (so far as practicable)”.

This drafting change has been made simply to cover the fact that it may not always be possible to ensure absolutely that no conflicts of interest arise. Indeed, they are inherent in the system now, with probation boards acting as both report writer and provider of community sentences. I know that the noble Baroness would wish us to continue to have that function, albeit on the face of it, it would look as though there were a natural conflict between those two things. It is not intended to make the duty less robust in any way, but simply to create a duty that works in practice and to the benefit of those who will wish to operate it in precisely the way that this House has indicated it should be operated.

A number of mechanisms are in place to address the risk of conflict of interest. First, when the court requests a pre-sentence report, it also provides an indication of the expected sentencing outcomes, so that the report can be focused accordingly. Secondly, the report must adhere to national standards, which have been strengthened by the amendment we have made to the Bill. Thirdly, there is clear guidance as to the type and structure of report to be provided, based on the seriousness of offence and appropriate response.

More generally, the development of an improved performance management framework, coupled with the introduction of commissioning and contractual relationships, will bring greater transparency to the process and make it easier to spot any potential difficulties. I hope that we will also be able to do that earlier because we will have a process through which difficulties could be ascertained. I can also confirm that, if the Government ever wished to open up the provision of court work to non-public sector providers, we would indeed set out clearly how any risks of conflict of interest would be dealt with in those circumstances. The amendment to the Bill helps to ensure that this happens. It represents a workable, compromise solution which addresses the points of concern raised by noble Lords in Committee and does that which I believe the House wanted us to do in a way that is proportionate, open and fair.

Moved, That the House do not insist on its Amendment No. 11 and do agree with the Commons in their Amendment No. 11A in lieu.—(Baroness Scotland of Asthal.)

rose to move, as an amendment to the above Motion, at end insert “but do propose the following amendment to Commons Amendment No. 11A in lieu—

The Commons disagree to Lords Amendment No. 11 but propose the following Amendment in lieu-

11B: Line 4, leave out from “shall” to “the” in line 5 and insert “ensure that measures are in place that will avoid””

The noble Baroness said: My Lords, what the noble and learned Baroness has just said on the record was extremely helpful. I tabled my amendments in order to elicit from the noble and learned Baroness an explanation of why the Government had seen fit to provide a different drafting of conflict of interest. My first reading of the Government's amendment in the other place led me to believe that the provision had become so wishy-washy that it would not be effective. I always appreciate that parliamentary counsel wishes to ensure that amendments are technically accurate and effective, but I felt that the intent of my amendment had also been watered down. Having listened to the noble and learned Baroness, I suspect that she has said enough already to satisfy me on this matter.

I am particularly interested in what she said about the procedure that would obtain if and when the protections in Clause 4 were removed and one could have in the third sector what one now has in the public sector—that the person who provides a report in a court system as to disposal may also then be the person who is the lead provider in providing the intervention. That will be the most sensitive of times for one to judge whether or not there is a conflict of interest.

I will formally move this Motion in case there are other noble Lords who wish to add anything to the debate. I suspect that that is somewhat unlikely given what the noble and learned Baroness has just said. I beg to move.

Moved, as an amendment to Motion B, Motion B1, at end insert “but do propose Amendment No. 11B to Commons Amendment No. 11A in lieu”.—(Baroness Anelay of St Johns.)

My Lords, I shall be brief on this matter. The Government have certainly moved on this issue. We accept the technical change in counsel’s language and the duty placed on the Secretary of State.

We have raised this issue in the past and I raise it again because it is so important that there are proper standards when producing reports of this nature. I remember in earlier days, when sentencing reports from the Probation Service were examined, we found that there was a degree of racial bias and racial stereotyping, which did a considerable amount of damage to the minority communities in this country. We suddenly saw that people had been sentenced more harshly than would normally be the case. I hope that those factors have been taken into account when we talk about national standards, particularly in looking at the final outcome of sentences. The noble Baroness, Lady Anelay, knows that she has had our support in the past and although there will be no further movement on this amendment, I hope that the Government will take account of the issue.

My Lords, I understand why the noble Lord, Lord Dholakia, raised the issue in relation to black and minority ethnic offenders and others who may be subject to this provision. There are issues in relation to proportionality and high-quality reports. I can assure him that the Ministry of Justice takes those matters very seriously indeed. I can also assure him that for so long as I remain involved in the criminal justice system, I will not cease to pay attention to them as well.

16: Insert the following new Clause-

“Annual plans etc(1) The Secretary of State shall at least once in every year consult the Welsh Ministers, and such other persons as he thinks fit, about the provision that should be made for the purposes mentioned in section 2(1) for the following year.

(2) The Secretary of State shall, before the end of each year, publish an annual plan for the following year which sets out the way in which the Secretary of State proposes to-

(a) discharge his functions under section 2(1) and (2) during that year; and(b) carry out any arrangements which he expects to be in force under section 3(4) for that year.(3) The Secretary of State shall have regard to the annual plan published under subsection (2) for any year-

(a) in discharging his functions under section 2(1) and (2) during that year; and(b) in making or carrying out arrangements under section 3(3A) or (4) for that year.(4) Arrangements made by the Secretary of State under section 3(3A) or (4) with a person other than a probation trust shall, if the Secretary of State thinks fit, require that person to publish an annual plan for each year in which it expects to carry out any specified activities.

(5) In subsection (4)-

“annual plan” means a plan setting out the way in which the person required to publish the plan proposes to carry out any specified activities during the year to which the plan relates;“specified activities”, in relation to a person with whom arrangements under section 3(4) or (5) are made, means activities of a description specified in those arrangements for the purposes of subsection (4) above.(6) In this section “year” means a period of 12 months ending with 31st March.”

The Commons agree to Lords Amendment No. 16 to which they have made the following Amendments-

16A: Line 18, leave out "3(3A) or (4)" and insert "3(4)"

16B: Line 19, at end insert-

“(3A) Arrangements made by the Secretary of State under section 3(2) with a probation trust shall require the trust to publish an annual plan for each year in which it expects to carry out any specified activities.”

16C: Line 20, leave out “3(3A) or (4)” and insert “3(2)”

16D: Line 24, leave out “subsection (4)” and insert “subsections (3A) and (4)”

16E: Line 25, leave out “person required to publish the plan” and insert “probation trust or other person (as the case may be)”

16F: Line 28, leave out “person with whom arrangements under sections 3(4) or (5)” and insert “probation trust or other person with whom arrangements under section 3(2)”

16G: Line 30, leave out “(4) above” and insert ”(3A) or (4) above (as the case may be)”

My Lords, I beg to move Motion C, That the House do agree with the Commons in their Amendments 16A to 16G to Lords Amendment 16.

These amendments need not detain us long. As the House will recall, Amendment No. 16 was added to the Bill during our deliberations in Committee. It gave effect to two commitments which I made at Second Reading. The first was to include in the general duty to consult a specific requirement to consult Welsh Ministers on probation provision in Wales. The second was to require providers to publish plans. Amendment No. 16 was subsequently amended on Report by the noble Baroness, Lady Anelay, as part of the series of amendments that we have already discussed, which proposed that the power to commission should rest with probation boards and probation trusts.

Amendments Nos. 16A to 16G simply reverse the effect of those changes. Amendment No. 16B reinstates the very important original subsection (4), which requires the Secretary of State’s arrangements with a trust to include a requirement to publish its own plan for the following year. Hence these amendments ensure that the clause on annual plans and consultation is consistent with the rest of the Bill.

Moved, Motion C, That the House do agree with the Commons in their Amendments Nos. 16A to 16G to Lords Amendment No. 16.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

Motion D

22: Insert the following new Clause-

“Procedure for orders under section 12(1) The Secretary of State must not make an order under section 12 unless-

(a) a draft of the order has been laid before and approved by a resolution of each House; and(b) each of the resolutions for approving the draft was agreed more than 60 days after the day on which the draft was laid before the House in question.(2) No draft order under section 12 is to be laid before Parliament unless-

(a) the Secretary of State has prepared and published a report containing a proposal for the making of such provision;(b) the report sets out the Secretary of State's reasons for making the proposal;(c) the report has been laid before Parliament and each House has approved the proposal contained in the report, either with or without modifications; and(d) the draft order gives effect to the proposal so far as approved by both Houses.(3) An approval given in either House satisfies the requirements of subsection (2)(c) only if it was given in that House on the first occasion on which a motion for the approval of the proposal was made in that House by a Minister of the Crown after-

(a) the laying of the report; or(b) if more than one report containing that proposal has been laid before that House, the laying of the one laid most recently.(4) In reckoning a period of 60 days for the purposes of subsection (1), no account shall be taken of a day for which-

(a) Parliament is dissolved or prorogued; or(b) the House in question is adjourned as part of an adjournment for more than four days.”

The Commons disagree to Lords Amendment No. 22 for the following Reason-

22A: Because the ordinary affirmative procedure provided for by Clause 33 is sufficient to enable Parliament to consider the reasons for making an order under Clause 12.

My Lords, I beg to move that the House do not insist on its Amendment No. 22 to which the Commons have disagreed for their Reason 22A.

Clause 4 of the Bill makes it clear that the assistance that the Probation Service gives to courts may be commissioned only from a probation trust or other public body. This clause was added to support the assurances that Ministers had already given that there were no immediate plans to open up this particularly sensitive area of work to non-public sector providers. Clause 12 provides a power to repeal this restriction, either in whole or in part, by means of secondary legislation. The affirmative resolution procedure applies to this power. The Lords amendment seeks to upgrade this to the super-affirmative procedure.

I accept that the use of the super-affirmative procedure is not entirely without precedent. As the noble Baroness, Lady Anelay, pointed out when we last debated this, the Government themselves considered the use of this procedure in the context of the power in the Identity Cards Bill to make ID cards compulsory. But that would have been a decision of huge national significance and of an entirely different order from the power that we are discussing today. For this power, I continue to submit that the affirmative procedure is absolutely appropriate and sufficiently robust.

I assure the House that, in bringing forward any order to repeal Clause 4, the Government would, of course, set out in detail what was proposed and the reasons for it, including how they proposed to deal with any conflicts of interest. Parliament would have a clear basis on which to decide whether to support the Government’s position. This issue would be amenable to the effective use of affirmative procedure in taking the matter forward. It is a sensible compromise, which retains the tried and tested parliamentary procedures, but ensures that the right information is available to enable Parliament to make its decision. The Commons agreed; I invite your Lordships to do the same.

Although the noble Baroness has changed her position to that of Chief Whip on the Benches opposite, I understand her prowess in that regard, and I am sure that she would whip very hard indeed if the Government did not comply with the assurances made by us from this Dispatch Box. I make these comments conscious that she, and the noble Lord, Lord Dholakia, will hold me to account, as I am sure will a number of those who sit on the Cross Benches.

Moved, That the House do not insist on its Amendment No. 22 to which the Commons have disagreed for their Reason 22A.—(Baroness Scotland of Asthal.)

had given notice of her intention to move, as an amendment to Motion D, leave out from “House” to the end and insert “do insist on its Amendment No. 22”.

The noble Baroness said: My Lords, I assure the Minister that I shall have an elephantine memory or, if I do not, a marvellous team of whips who will make sure that I am reminded all the time.

I tabled this Motion because I wanted to ensure that I had a backstop measure if, by any remote chance, the Government were not minded to grant the conflict of interest amendment that had returned from another place. It is a case of ensuring that every “i” is dotted and every “t” crossed. The fact that a definition of a conflict of interest and the principle behind it is in the Bill may resolve some of the objections to other aspects of this Bill and the difficulty that will pertain when they are rolled out. One difficulty is what will happen when the protection of core services in Clause 4 is withdrawn.

The reason why I was so keen in the first instance to pursue the relative innovation of the super-affirmative procedure was to ensure that, if we did not have the assurance of a conflict of interest protection, we might have another lock elsewhere on the system. By granting the amendment on conflict of interest, the Minister has made it possible for me not to proceed on this matter.

I am particularly grateful to the Minister for the way in which she set out the Government’s position. Of course, when the Government bring forward any affirmative order, they are required as a matter of course to set before the House the reasons for their so doing. That goes without saying. But it was helpful that the Minister made it clear that attention would be paid to any removal of the Clause 4 protections and the reasons why that might be appropriate. It is that kind of information that noble Lords on all Benches will thoroughly scrutinise. Throughout our proceedings, it has been clear that all parties—the Cross Benches in particular—have paid close interest to this matter.

I had intended to move the Motion in case other noble Lords wanted to say one or two things, but with the intention of shortly withdrawing it.

[Motion D1 not moved.]

On Question, Motion D agreed to.

Motion E

23: Insert the following new Clause-

“Probation report

(1) Within a period of six months of the coming into force of this Act, the Secretary of State shall lay a report before both Houses of Parliament containing-

(a) a review of the proposals contained within the report published on 11th December 2003 “Managing Offenders, Reducing Crime: A New Approach”;

(b) the collated responses to the consultation document “Restructuring Probation to Reduce Re-Offending”;

(c) a review of the responses referred to in paragraph (b); and

(d) proposals for reform of the Probation Service.

(2) The Secretary of State must include in a report under subsection (1) notification of when he will exercise his power under section 38(1A).”

The Commons disagree to Lords Amendments Nos. 23 and 38 for the following Reason-

23A: Because the proposed report is unnecessary as Part 1 of the Bill has been fully debated in Parliament.

38: Page 24, line 15, leave out subsection (1) and insert-

“(1) Section (Probation report) comes into force on the day on which this Act is passed.

(2) Apart from section (Probation report), Part 1 of this Act comes into force on such day as the Secretary of State may appoint by order made by statutory instrument, but no such order may be made until the end of a period of 60 days commencing with the laying of a report under section (Probation report).

(3) Parts 2 to 4 of this Act shall come into force on such day as the Secretary of State may appoint by order made by statutory instrument.”

The Commons disagree to Lords Amendments Nos. 23 and 38 for the following Reason-

38A:Because the proposed report is unnecessary as Part 1 of the Bill has been fully debated in Parliament.

My Lords, I beg to move that this House do not insist on its Amendments Nos. 23 and 38, to which the Commons have disagreed for their Reasons 23A and 38A.

We have previously discussed at some length the procedures that should apply to the implementation of the measures in Part 1 of the Bill, but I confess that the real purpose of these amendments continues to elude me. They would require the Government to lay before Parliament a report containing proposals for reform of the Probation Service. Parliament has spent the last nine months debating a Bill containing the Government’s proposals for the reform of the Probation Service—a Bill that has undergone extremely careful scrutiny, nearly all of it focused on the probation provisions, and which is much improved as a result. That is entirely proper and as it should be; it is a tried and tested process. It is entirely unclear, therefore, how the addition of this novel procedure would add to it in any significant way.

The Bill that is now before us and the proposals for implementing it, on which I have given your Lordships considerable information over the last few weeks, have moved on considerably from the proposals set out in the consultation paper published nearly two years ago. Perhaps I may respectfully suggest that there is absolutely no purpose to be served by looking back at that paper, the responses to it or indeed the report by the noble Lord, Lord Carter, which preceded it. We have had very valuable debates on these proposals and we now need, I suggest as gently as I can, to look forwards, not backwards. We need to move on to implementing the proposals cautiously and gradually, as we have said that we will. This position has been strongly supported by those in the other place, where these amendments were rejected by a majority of 127.

I cannot see what purpose would be served by further delay and asking the other place to think again when it has so clearly spoken. I invite the House to take the admirable stance adopted earlier by the noble Baroness, Lady Anelay, when she said that there is a moment when one has to give way. I respectfully suggest that this may be one such moment.

Moved, That this House do not insist on its Amendments Nos. 23 and 38, to which the Commons have disagreed for the Reasons 23A and 38A.—(Baroness Scotland of Asthal.)

rose to move, as an amendment to Motion E, leave out from “House” to end and insert “do insist on its Amendments Nos. 23 and 38”.

The noble Lord said: I am moving this Motion on behalf of the noble Baroness, Lady Anelay of St Johns. I am very grateful to the Minister for her remarks. I note that she says that the amendments’ purpose eludes her. Although I have never been involved in Bill preparation, I rather suspect that, as in many other things, two fundamental questions have to be asked: is a proposal achievable, and is it affordable? In all the time that I have been involved with the criminal justice system, I have discovered that what is missing in both prisons and probation is actual detail of how much it costs to deliver what the Government say that they want delivered. Without that sum as a benchmark against which to judge all the proposals put forward and all the costs that they involve, you cannot possibly know whether you can afford it and, therefore, whether it makes sense to put the proposals forward.

The amendments refer in particular to Part 1, which is to do with probation. I am sure that the Government must have ringing in their ears the experience of the introduction of custody plus, which was trumpeted with great assurance. Probation was asked how much it might cost. It assessed that custody plus would add one-third to every probation budget. It was offered sums in the region of £60,000 to do what would cost several million pounds. Of course it could not be done and custody plus—a perfectly valid and sensible idea—collapsed. It was not achievable because it was not affordable.

What has worried me throughout the Bill’s passage—and indeed when the Government say that the Bill has been fully debated in Parliament—is that the costs have been neither presented nor debated. Therefore, the amendments were tabled to encourage an examination of those costs, to make certain that yet another sensible proposal that had received support across the House would not fall flat on its face purely because the issue of affordability had not been worked out in advance.

Having tabled the Motion, I was intrigued to see the remarks of the Chief Inspector of Probation in his annual report. I should like to quote two passages. The first is on “sustainable incremental improvements” and the fact that,

“we also see a major strategic threat to this progress in the form of an ever increasing squeeze on the capacity of the NOMS system to continue to deliver ... By capacity we mean not only resources in terms of money and people in relation to increasing demands, but also the other tools with which to do the job such as the IT infrastructure”.

He goes on to say that,

“it is clear to us that when the costs of new work, new requirements and new infrastructure have been taken into account, resources have in practice still not kept pace with the increasing demands ... Over the past ten years the increasing demands have included new Orders or requirements for drug treatment and testing, for accredited programmes and for managing prolific offenders, extended periods of post-release supervision, increased public protection expectations, enhanced standards of quality for unpaid work and other supervision requirements. Case numbers have also increased by taking in less serious offenders … In addition, a pay deal in 2006 for a layer of managers (excluding Chief Officers) that was agreed nationally must largely be funded locally ... Now the prospect of Offender Management, a principle almost everyone supports as a principle, risks being proven undeliverable in practice due to the additional increasing demands it will introduce. The Government was right to postpone the introduction of ‘Custody plus’ … because of the capacity problem, but even so demands are continuing to increase faster than resources. This exacerbates the problem of public expectations rising faster than the capacity to satisfy them … it will still not be sufficiently established to enable its true purpose of enabling offender managers to manage cases effectively for several years”.

That is the warning from the Chief Inspector of Probation. I had the experience, for five and a half years, of trying to issue similar warnings about what was happening in prisons and they were not listened to. I was, however, hugely encouraged to read the debate in the other place, when Mr Patrick Hall said,

“in practice, how offender management will be delivered at the local level is so detailed and often so complex that it will be practically impossible for the Secretary of State to take over all those functions”.

The Minister, Mr Hanson, replied:

“I need to reflect in greater detail. I have tried to assure my hon. Friend that the approach of my right hon. Friend the Secretary of State and myself … we have said both publicly and privately … provides the opportunity for us to reflect seriously”.—[Official Report, Commons, 18/7/07; cols. 365-66.]

The purpose of my amendment is not necessarily to insist so much as to ask for an assurance that reflection will be given to all these points before something unaffordable and unachievable is embarked on, with all the difficulties that that will inevitably bring to the Government. I beg to move.

Moved, as an amendment to Motion E, leave out from “House” to end and insert “do insist on its Amendments Nos. 23 and 38”.—(Lord Ramsbotham.)

My Lords, I am grateful to the noble Lord, Lord Ramsbotham, for the way in which he moved his Motion and made clear what assurances he is seeking from the Minister. I also pay tribute to him for the key role he has played in our close deliberations on the Bill.

I still believe that the Government are not in a position to roll out the Bill’s provisions satisfactorily. Like the noble Lord, I still believe that we are not in full possession of information about likely costs and the mechanisms by which, for example, contracting will be satisfactorily carried out. That indeed was the basis of a letter sent by Mr Straw to his honourable friends in another place dated 16 July—the first of two rather interesting letters sent last week. The first letter was a “dear colleague” to all; the second seemed to be to a more selected group. But certainly the first letter appeared to have one objective: to persuade Labour Members in another place to fall in behind the Government and not misbehave.

The letter set out what appeared to be an assurance that the Government were going to take a very long time indeed to implement the proposals in the Bill. It was a case of saying, “Don’t worry. Even if we don’t know what we’re doing now, we will by the time we do it”. That is our concern—that we should hear satisfactory assurances about the way in which these matters will be implemented.

The Government are determined to press ahead with this Bill. The probation services in this country have suffered enough from the Government’s twists, turns and delays over the past 10 years. It is now time to let the Government’s proposals splutter into life, but I hope that none of us lives to regret it.

My Lords, I, too, thank the noble Lord, Lord Ramsbotham, for the excellent work that he has done on this legislation. The Minister seems to be optimistic about it but doubts still remain and they will continue to do so, more so on the part of probation practitioners, whom we repeatedly mention. Reform will be required and I suspect that it will be sooner rather than later. We shall not wish to say to the Government, “We told you so”. It is well worth looking again at the arguments that have been repeatedly advanced in this House. In the mean time, I thank the Minister, the noble Lord, Lord Ramsbotham, and the noble Baroness, Lady Anelay, for the very important role they have performed in trying to make something out of this Bill.

My Lords, from his previous work the noble Lord, Lord Ramsbotham, is in a position to know what most people involved in politics know—that there are not very many votes in prisons or in probation and so it is always difficult for Governments to spend enough on them. We all know that and we see the results of it in our national scene.

It will be very interesting to see whether we can get an answer from the noble and learned Baroness which gives us the assurances that the noble Lord, Lord Ramsbotham, and my noble friend asked for.

My Lords, I speak rather tentatively. I have been quiet this afternoon because I felt that life was moving on but I feel the need to say two things. First, as far as I understand it, this Bill continues to deal with the margins of the service. Surely the Probation Service has developed enough skills in contracting. Therefore, it will not cost huge amounts to take those contracts forward. Secondly, I absolutely agree with my noble friend Lord Ramsbotham and the noble Baroness, Lady Anelay, that not enough money is spent on any of the social care services. I have been a director of social services, set up the National Care Standards Commission and struggled away at the children and families courts service. None of those services is funded to the degree that we would like. That is why the people who run those services are expected to find alternative ways of innovative working that move forward. That is the whole point of this Bill. I have stood rather separate from some of my colleagues in my views on it. It is about giving probation officers opportunities to work in a different way to develop services that will help offenders change their lives, live better lives and thereby protect the public.

I agree that we need more sophisticated ways of measuring these services. Members of another place have tried to achieve that. At least I now know the relevant costs for my service. The Probation Service could do more of that work. However, I still believe that we are tampering at the edges. This is not major reform; it is trying to develop alternatives. Like the noble Baroness, Lady Anelay, I hope that we can get on with it because people in the voluntary sector and the Probation Service would like to move forward.

My Lords, like my noble friend I had not intended to say anything but I disagree somewhat with her or rather I put forward a different view. I am certain that we can all improve the way that we spend money and get better value for money, but we must not forget that the Probation Service is dealing with very complex and often very difficult persons who can be dangerous. Therefore, considerably more resources are needed. Having heard the figures mentioned by my noble friend Lord Ramsbotham, I think that the Probation Service is to be congratulated. It has often been castigated in our debates on this Bill. It is certainly not faultless—

My Lords, in case there is any misunderstanding, I should say that I have never castigated the Probation Service. That may not be what my noble friend meant, but there is a danger that it might be inferred. My admiration for the work that it does is absolutely solid. I apologise for intervening, but I should make that absolutely clear.

My Lords, I should make it clear that I was referring not to what my noble friend said but to the debates that had taken place in this House.

I very much hope that the noble and leaned Baroness will satisfy us that we can await what we have to await.

My Lords, I was not going to speak but one must try to put the comments in context, with the honourable exception of those made by the noble Baroness, Lady Howarth. This Government introduced a proper new qualification for probation officers and rapidly increased the resources made available to the Probation Service. Listening to some of the debates on this Bill, one would believe that this had not happened. This is a sensible reform which is long overdue in this public service. This approach has been used in other public services. It has been used in social services for more than 20 years. That comes out of the same training base as the Probation Service. We need to move in this area. If I have a criticism of the Government, it would be to ask them why we did not do this sooner, not that we are rushing our fences. The Secretary of State for Justice has made it clear that he will take this forward in a measured way. It seems to me that he is damned if he does and damned if he doesn’t. His assurance that he is taking this forward in a measured way is interpreted by some Members of your Lordships' House as meaning that he does not know what he is doing.

A sensible reassurance has been given. These amendments and changes in public services are long overdue. We should wish the Bill godspeed and move on.

My Lords, I undertake to be very brief. Having had a very long experience in a wide range of voluntary organisations, I support my noble friend Lady Howe. It may be a good thing that some probation work should be contracted out to the voluntary sector or possibly to the private sector. However, it is totally unrealistic to believe, and to work on the assumption, that this will make things a lot cheaper. Probation services themselves have used volunteers for a very long time. The voluntary and private sectors may use a lot of volunteers, but the safety considerations have already been pointed out and it will not be cheap.

My Lords, I reassure the noble Lord, Lord Hylton, that we do not think that it will be cheap either. These reforms are not about doing that which is cheap but about doing that which is effective. There is a great difference between cost efficiency and cost effectiveness. I assure the House that in taking these proposals forward we intend to concentrate on cost effectiveness.

This has been a very enlightening debate, but even at this last stage there may be confusion about the issues that we need to take forward. I very much commend what was said by the noble Baroness, Lady Howarth, and my noble friend Lord Warner because they speak of the necessity for change. All those in this House have concentrated on the need to provide a better service for victims and a better service for offenders. I hope that the noble Baroness, Lady Howe, does not include me among those who have castigated the Probation Service; I honestly believe that I have never, ever done so.

It would be naive not to accept that we need to change, and change quite significantly. We are contemplating that change in a moderate, proportionate and reasoned way. We seek to give assurances that there will be no precipitous change to the way in which we take this forward. It is important for us to look at what is already being done by those who are progressive and who are at the height of their practice. They are including the third sector, they are working with the private sector and they are delivering that which we would aspire for them to achieve. I listened with very great care to everything that was said by the noble Lord, Lord Ramsbotham, who has contributed so comprehensively to every single aspect of the Bill. I listened with care to whether he was going to say anything that would support his amendment. I do not believe that he did, but it gave him an opportunity to explore his concerns, and I accept that. The amendment is about delaying the Bill for a set period. I really think this is the time for us to go on.

The noble Baroness, Lady Anelay, said that this was about allowing the Bill to splutter into life. That is a little ungenerous of her; I have come to expect a little more, but I understand the seduction of the last flush of comments that might actually hit a headline or two. I assure her that this is not about spluttering into life; it is about making a solid foundation for a change that we all aspire to achieve. That solid foundation is worth fighting for, because it is inclusive. We know that if we are going to make the changes that we as a community need to make to the figures on recidivism and reoffending and to be better able to address prevention and crime reduction, we are going to have to do it together—in the public sector, the private sector and the not-for-profit sector—because it will take all of us. That is what the Bill is about.

I hope that I have been able to give a little reassurance to the House, to the noble Lord, Lord Hylton, and to the noble Baroness, Lady Carnegy of Lour, who raised the issue of how the voluntary sector was going to be included and what this will all cost. We are very conscious of the cost, but we are also very conscious of the cost of not doing this, the cost of not going forward and the cost of staying where we are. That price is a little too high for us to pay. We have spent a huge amount of time and effort—rightly—scrutinising every single aspect of the Bill but, having done so, we should have the confidence to say, “Our job has been well done; let’s get on with it, and let’s let the Probation Service do that which we know it does best, which is working with others”.

Some described the Probation Service before this Government came into being as the Cinderella. We have tried to make sure that it has the training, resources and facilities to allow Cinderella to go to the ball. We think that she is finally dressed; we rather like her and we hope that she will do well.

My Lords, I thank the noble and learned Baroness for her remarks, particularly for her use of the word “reasoned”. One of the purposes of the Motion is this should be reasoned. I am disappointed that the noble Lord, Lord Warner, should have almost entirely misunderstood what I was trying to say. Never at any time have any Members of this House who have been involved in the debates on the Bill had any idea that change should be put back. We were trying to make certain, as far as we could, that change was reasoned and that all the implications had been explored. I was seeking from the noble and learned Baroness, and she has given, an assurance that this and all the matters raised would be considered. She made the very reasonable remark that we cannot afford not to move on. I could not agree more. But we can only afford to go on if we are prepared to pay the costs that will be incurred by making the movement that is suggested. Therefore, one assumes that the Government are going forward prepared to meet the costs that I forecast will be there, which have not yet emerged from our debate. I take this opportunity to thank all those who have taken part in the debate and who have raised many interesting points. In doing so, an awful lot of issues have surfaced.

I know from talking to them that many members of the Probation Service have been particularly glad that their service, in addition to receiving the additional resources that the noble and learned Baroness has mentioned, has had its whole raison d’être and the raison d’être and motivation of its members discussed in a way that has given them a higher profile than they perhaps have enjoyed for some time. It is an added benefit for them that they feel that they are better understood. In the spirit of the reassurance that I have had from the noble and learned Baroness, and the reasoned approach that I understand to be taken by the new Ministry of Justice, I beg leave to withdraw the Motion.

Motion E1, by leave, withdrawn.

On Question, Motion E agreed to.

Motion F

35: Page 23, line 1, leave out “under” and insert “or regulations under-

“(aa) section 5(1) or (3)(c),”

The Commons agree to Lords Amendment No. 35 to which they have made the following Amendment-

35A: Line 2, leave out “5(1) or (3)(c)” and insert “5(3)(c)”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35.

In the Bill as originally published, no parliamentary procedure applied to the power in Clause 5(1) to establish, alter the name or purpose of, or dissolve a probation trust. The Delegated Powers and Regulatory Reform Committee noted that precedents existed for that, but it felt that it lacked sufficient information about how trusts were to be established in order to make a recommendation about its appropriateness in this context. The committee therefore drew the matter to the attention of the House.

The Government have now been able to provide much more information about the process for establishing trusts, and that was acknowledged by those who contributed in Committee. Nevertheless, the House supported the amendment tabled by the noble Baroness, Lady Anelay, to apply the affirmative procedure to this power. In the light of the debates that we have had on this subject, we accept that this important power should be subject to parliamentary procedure, but we continue to believe that the affirmative procedure is excessive.

There are currently 42 probation boards. Over the next three years they will cease to exist, and in their place probation trusts will be established. The transition is being conducted openly and in close consultation with the service. We suggest that in most, if not all, cases the establishment of the trusts will be an entirely routine matter as will most future changes. Given the pressures on parliamentary time, it would be quite disproportionate to require debates in each House on these matters as we come to decide on change for each probation board to probation trust status. I submit, therefore, that the negative procedure is much more appropriate. It allows routine business to be conducted in a routine way but, if particular issues of concern arise, it enables either or both Houses to debate them openly if they so wish. It gives us an element of scrutiny that we could use if we thought it was merited. I respectfully suggest that this is a sensible compromise, and I commend it to the House.

Moved, That the House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35.—(Baroness Scotland of Asthal.)

My Lords, I am grateful to the Government for considering further, in another place, whether the orders establishing or dissolving probation trusts should be subject to parliamentary scrutiny. Initially the noble and learned Baroness resisted such scrutiny, claiming that it would prejudice commercial procedures. Previously, the establishment of probation boards has been subject to parliamentary scrutiny via secondary legislation subject to the negative procedure.

I argued that the powers to establish and dissolve trusts were so wide and significant that it would be right to maintain an element of parliamentary scrutiny. As the noble and learned Baroness said, my preferred route was the affirmative procedure. I recognise fully the arguments she put forward today on why it is more appropriate for the negative procedure to be applicable to these statutory instruments. My honourable friend Mr Edward Garnier took another view, which perhaps goes more to the root of the procedures in another place than to the specific importance of the instruments that may be brought forward. In this House we are still fortunate in that, if we pray against a negative instrument, we are guaranteed time on the Floor of the House, which means that all noble Lords are able to take part in debates in all cases. As noble Lords will be well aware, whether one can take part in debates in Committee off the Floor of the House on such Prayers in the other place is a matter of selection; they may never reach the Floor.

Edward Garnier was absolutely right in seeking to divide another place, but I am able to accept the noble and learned Baroness’s arguments. I am grateful that the Government now have parliamentary scrutiny and accept that the negative procedure should be sufficient.

On Question, Motion agreed to.

Motion G

47: Page 32, line 30, at end insert-

“Interpretation Act 1978 (c. 30)In Schedule 1 to the Interpretation Act 1978 (words and expressions defined) there is inserted, at the appropriate places-

““Officer of a provider of probation services” in relation to England and Wales, has the meaning given by section 7(1) of the Offender Management Act 2007;”; and““Provider of probation services”, in relation to England and Wales, has the meaning given by section 3(5) of the Offender Management Act 2007;”.”

The Commons agree to Lords Amendment No. 47 and have made the following consequential Amendment-

47A: Page 3, line 41, leave out subsection (5) and insert-

“(5) In this Part “provider of probation services” means-

(a) a person with whom the Secretary of State has made arrangements that are in force under subsection (2); or(b) the Secretary of State (in relation to probation provision which is the subject of arrangements that are in force under subsection (4)).”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 47A consequential on their agreement to Lords Amendment No. 47.

Your Lordships will be relieved to know that this is the last of my amendments. It is an entirely technical amendment proposed by parliamentary counsel. Commons Amendment No. 47A simply clarifies Amendment No. 47, which added a definition of “provider of probation services” to the Interpretation Act 1978 at Third Reading. This will enable the further necessary consequential amendments to work effectively. I am confident that the amendment will excite a huge amount of interest and attention in this House, and will be greatly delighted if it does.

Moved, That the House do agree with the Commons in their Amendment No. 47A consequential on their agreement to Lords Amendment No. 47.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2007

rose to move, That the draft order laid before the House on 2 July be approved.

The noble Lord said: My Lords, proscription of terrorist organisations is an important part of the Government’s strategy to tackle terrorist activities. We would therefore like to add a further two organisations to the 44 international terrorist organisations already proscribed. This is the fifth proscription order under the Terrorism Act 2000.

Section 3 of the Terrorism Act 2000 provides a power for the Home Secretary to proscribe an organisation which she believes is concerned in terrorism. That is achieved by adding the organisation to the list of proscribed organisations in Schedule 2 to the Act. An organisation is concerned for these purposes if it commits or participates in acts of terrorism, prepares for terrorism, promotes or encourages terrorism, or is otherwise concerned in terrorism. An organisation must meet the statutory test before it can be considered for proscription.

When deciding whether to make an order proscribing a group, a number of additional factors are taken into account; those were announced to Parliament in 2001. They are the nature and scale of an organisation’s activities, the specific threat that it poses to the United Kingdom, the specific threat that it poses to British nationals overseas, the organisation’s presence in the United Kingdom, and the need to support other members of the international community in tackling terrorism.

Proscription is a tough power. It means that the organisation is outlawed in the UK and cannot operate here. Membership of the organisation is an offence, as is inviting support for it. Proscription also makes it unlawful to raise funds on behalf of the organisation. Given the wide-ranging impact of proscription, the Home Secretary makes the decision to put forward a group for proscription only after thoroughly reviewing all the relevant information available on an organisation. That includes open-source material, as well as intelligence material and advice that reflects consultations across government and with the law enforcement agencies.

The two organisations listed in the order are directly concerned in terrorism. They are Jammat-ul Mujahideen Bangladesh and Tehrik Nefaz-e Shari’at Muhammadi. The TNSM’s objective is the militant enforcement of Sharia law in Pakistan. It regularly attacks coalition soldiers and Afghan government forces in Afghanistan. It provides direct support to al-Qaeda and the Taliban. It is believed to have been behind an attack on a Pakistani military base in November 2006 which killed 42 personnel. The JMB has claimed responsibility for numerous fatal bomb attacks in Bangladesh since first coming to prominence in 2002. In August 2005, it set off some 500 bombs in all but one of Bangladesh's 64 districts in the space of an hour. The Bangladeshi Government recently announced the execution of six leaders of the JMB, including its chief. However, some sources indicate that the organisation has a significant number of full-time members. There are indications that it is making efforts to regroup to continue its campaign of terror.

The proscription of the two groups will support our international partners in disrupting terrorist activity by making the United Kingdom a hostile environment for terrorists and their supporters. It will also send the strong message to the terrorists that the United Kingdom is not willing to tolerate terrorism either here or anywhere else in the world.

It is important to note that any organisation that is proscribed, or anyone affected by a proscription of that organisation, can apply to the Home Secretary for the organisation to be deproscribed. If that is refused, the applicant can appeal to the Proscribed Organisations Appeal Commission. The POAC is a special tribunal of three members, including a senior member of the judiciary, which determines whether the decision of the Secretary of State to refuse to deproscribe was flawed when considered in light of the principles applicable on a judicial review application. The members of the commission are all qualified to see sensitive material, and a special advocate can be appointed for POAC appellants to argue on their behalf in closed session.

There is ample evidence to suggest that the two organisations are concerned in terrorism, and I believe that we should proscribe them. I commend the order to the House. I beg to move.

Moved, That the draft order laid before the House on 2 July be approved. 22nd Report from the Statutory Instruments Committee.—(Lord West of Spithead.)

My Lords, the noble Lord may know that I have long been in favour of proscription as a useful tool in dealing with the threat of terrorism. Both the organisations to which the order relates seem dedicated to the use of violence. Will he therefore confirm that they could have been proscribed under the original Section 3 of the Terrorism Act 2000 and that there would have been no need to resort to Section 21 of the 2006 Act, which extended proscription to cases of glorification? It appears that this proscription has not been made on that basis. I also ask him to confirm that the two organisations do not pose any direct threat within the United Kingdom.

My Lords, I wish to raise two points on this order. The first is simply a matter of procedure that I raised with the noble Lord, Lord Bassam, when he dealt with this matter. One of our difficulties is that, when we consider proscribing organisations, we are presented with an order which is unamendable. It might help in future, and it would be procedurally satisfactory, if separate orders on each organisation were provided which could be debated in a single debate, with the agreement of the House. That would allow dissent, if appropriate, to be demonstrated.

The Minister said that the two organisations for which proscription is sought must meet certain qualifications before that can happen. I should be clear that we have no difficulty whatever in agreeing to the Government’s recommendation. My problem relates to the TSNM and the JMB. Why, when we knew months ago of the bombings in at least 500 places in Bangladesh, are we only now being told about the proscription of the JMB? Why are we considering the proscription of the TSNM now, when its role, attacking coalition forces in Afghanistan and Pakistan, has been pretty clear? Information is required on why such a long period has elapsed before the order to deal with these two organisations has come before Parliament.

Will the Minister ensure that in future, if there is a requirement for proscription, we are told not only what an organisation’s role has been abroad but, if specific information is available, whether it has any ties in the United Kingdom whereby the security of our country could be affected? In the mean time, we have no problem whatever in agreeing to the proscription of these organisations.

My Lords, we have no difficulty in accepting the Government’s view that these two organisations ought to be added to the list. However, I endorse the two procedural questions raised by the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Dholakia. I would be most interested in hearing the Minister’s answers to these questions. The noble and learned Lord, Lord Lloyd of Berwick, asked the Minister whether or not this order could equally well have been made under the previous legislation governing proscription. The noble Lord, Lord Dholakia, asked whether it would not be better if, in future, there was a single order for each proscription.

My Lords, I thank noble Lords for the interesting points that they raised. In response to the noble and learned Lord, Lord Lloyd, yes, this could have been done under Section 3 and did not need to happen under Section 6. The noble and learned Lord also asked whether there was any activity in this country by the groups. We think that a couple of people might be involved with the JMB, but there is nothing regarding the other group. Therefore, we are looking at this matter due to the organisations’ threats to our forces in Afghanistan and Pakistan and the impact on other nations.

I thank the noble Lord, Lord Dholakia, for the points he raised. Again, the answer is that this is a matter of procedural convenience which could be done in another way. It might be good to raise this with the Chief Whips to see how the matter might be taken forward. Again, I confirm that we do not see much activity by those organisations in this country; we are taking this action because of the threat that they cause to our forces abroad and the impact worldwide. We want to show that we are not willing to give any support for this sort of terrorism and to demonstrate that to the countries we are dealing with.

I hope that I have addressed the two procedural points to which the noble Lord, Lord Kingsland, referred, and I am pleased that noble Lords recognise that these groups need to be proscribed. In future, we could look at bringing forward such orders in a different way, and I will ensure that we do that, because it might be a little clearer and more straightforward. There is no doubt that proscription is a tough power. The penalties are severe, and we can exercise this power only when there is clear evidence that an organisation is concerned with terrorism. That is part of the reason for the delay before we proscribe a group. It takes time, even though we have seen intelligence evidence of attacks. However, there is a relevant point here, and we must look at whether this process can be speeded up, because it is important to do that.

As I have said, I am satisfied that these two organisations are concerned in terrorism.

On Question, Motion agreed to.

Terrorism Act 2006 (Disapplication of Section 25) Order 2007

rose to move, That the draft order laid before the House on 11 June be approved.

The noble and gallant Lord said: My Lords, the Government agreed during the debates on what became the Terrorism Act 2006 that there should be a requirement for the annual renewal by Parliament of Section 23 of that Act. Section 23 extends the maximum period of detention of terrorist suspects before charge from 14 days to 28 days. Section 25 of the Act says that the period of detention will revert to 14 days unless it is disapplied by order. The order before noble Lords today, therefore, disapplies Section 25 of the Terrorism Act 2006 for a period of one year, beginning on 25 July 2007, thereby extending Section 23 for another year.

Terrorism investigations can be immensely time-consuming and the increase from 14 days to 28 was necessary primarily as a result of greater use of encrypted computers and mobile phones, the increasingly complex nature of terrorist networks that have to be investigated—indeed, they have learnt from the way we have prosecuted them and chased after them and have become even cleverer at hiding some of these aspects of computers and mobile phone networks—and the increasingly international nature of terrorist networks, meaning greater language difficulties and a greater need to gather evidence from abroad. In a current case, we have had to approach 17 countries.

Such investigations may also involve properties where there is the possibility of CBRN material being present. It is against this background that we have to consider the most appropriate steps to protect our citizens from the threats posed by terrorists.

The potential consequences of a terrorist attack are of such magnitude that it is imperative that the police have the powers to arrest terrorists before they can achieve their goals. The scale and nature of the threat we now face means that, when a terrorist plot is uncovered, law enforcement agencies often have to intervene at a much earlier stage in the investigation than they would like, or would do in a normal criminal case. As a result, at the point of arrest, the information that the police have available to them may be based more on intelligence than admissible evidence. This is one of the fundamental ways in which terrorism is different from other crimes.

Therefore, unlike other forms of crime, proportionately more work needs to be done on the investigation after an individual has been arrested. The provisions for extended pre-charge detention to 28 days in the Terrorism Act 2006 take account of these unique difficulties and the decision to increase the pre-charge detention limits from 14 to 28 days has, I believe, been justified by subsequent events. It means that we have been able to bring forward prosecutions that might otherwise not have been possible. Since the power came into force in July 2006, six people have been held for between 27 and 28 days, covering two different operations. Of those, three were charged with terrorist-related offences.

I should point out that the existing application for an extension is a rigorous process. At present, those arrested can be detained for 48 hours, after which the police or CPS may apply to a judicial authority for an extension of detention warrant. The application is to a designated magistrate when the person has been in detention for less than 14 days and to a High Court judge thereafter. A CPS lawyer makes the application and the senior investigating officer is present. Defence solicitors are provided in advance of each application with a written document setting out the grounds for the application. The applications are usually strenuously opposed and can last for several hours. The officer may be questioned vigorously by the defence solicitor about all aspects of the case. Applications to extend the detention period may be made for up to seven days at a time up to a maximum of 28 days.

The conditions in which the suspects are detained are covered in detail in the relevant code of practice. They include ensuring that suspects have access to legal advice and that their welfare needs are met. Suspects can be held only for the purpose of obtaining evidence in relation to criminal offences; they cannot simply be detained for public safety reasons. That means that, once the police have exhausted their questioning of a suspect, the person must either be released or charged, regardless of how many days they have been detained. There has not yet been a case where 28 days has been inadequate but, as I said, all 28 days have already been proved necessary, and it is possible to envisage cases where the police will need more than 28 days in the future because of the increasing scale, complexity and sequential nature of operations.

We are consulting, and hope to achieve a consensus, on the period of pre-charge detention where, for terrorism alone, we believe that exceptional circumstances make it necessary to extend the maximum period of detention while ensuring rigorous judicial oversight and parliamentary accountability. That document will come out tomorrow and we hope to be able to get consensus on it. It is part of the wider consultation on the forthcoming counter terrorism legislation.

All of us, on all sides of the House, appreciate the seriousness of the terrorist threat that we face and the importance of having the right measures in place to counter that threat. This year alone, a total of 26 individuals have been convicted in eight terrorist cases. Terrorism is a huge international challenge but it is a particular challenge for democracies, which must strive to protect individual liberties while, at the same time, ensuring collective security. It is vital to strike a balance between protecting the rights of the detainee and ensuring that an investigation proceeds properly and effectively, enabling the police to deal with the complexity of modern terrorism investigations, thereby protecting the rights of our own citizens to live their lives in safety and security. I hope that noble Lords agree that this order achieves that, and I commend it to the House. I beg to move.

Moved, That the draft order laid before the House on 11 June be approved. 20th Report from the Statutory Instruments Committee.—(Lord West of Spithead.)

My Lords, the House will be grateful to the noble and gallant Lord for explaining the background to the order. It is easy to forget that in 1997—the year in which the present Government came to power—the time limit for detaining suspected terrorists was four days. That period had proved sufficient throughout the 25 years of Irish terrorism. The Terrorism Act 2000 increased the period from four to seven days. In my view, that was correct, even though four days remained the maximum for all other crimes, however complex or serious.

In 2003, the police said that they wanted more than the seven days provided by the 2000 Act. They said that they needed 14 days, and they gave very much the reasons that are now set out in paragraph 7.1 of the Explanatory Memorandum, some of which the noble Lord has gone through. I do not intend to go through them myself as they have been debated on many occasions in this House. Therefore, in 2003 the police were given 14 days.

In 2005, the police came back again, saying on this occasion that they needed 90 days, even though the reasons that they gave were exactly the same as the ones they had given in 2003 and even though the Association of Chief Police Officers had given evidence to the Constitutional Committee in the House of Commons that they had never needed more than 14 days. I need not remind the House that they did not get 90 days; they got 28 days, subject to a sunset clause. The sunset clause was important, for, as I understand it, it requires the Government and, in this case, the police, on whose advice the Government rely, to justify the original increase from 14 to 28 days in the light of what has happened during the past year; otherwise, a sunset clause is pointless. It is not enough for the Government to say that nothing has changed since a year ago. We are not now acting as a rubber stamp for what was agreed then.

So far as I can judge from what the noble Lord has just said, nothing material has changed. He has said nothing new to justify the original increase from 14 to 28 days, let alone any increase from 28 days. The only evidence that we have had in the past year is from Ken Jones, a senior police officer and chairman of ACPO. He told the Observer during an interview a week or so ago that the police were “up against the buffers” with the 28-day limit and that they needed to be able to detain suspects for “as long as it takes”. I do not know precisely what Ken Jones meant by that, but I hope that, when he comes to reply, the Minister will confirm that what he said does not represent government policy and that he will dissociate the Government from the remark made by that senior police officer.

As for being “up against the buffers”, I take the facts from the recent incidents in London and Glasgow, to which I think the noble Lord did not refer. No doubt it was those events that prompted the interview between Ken Jones and the Observer. Eight suspects were arrested; four were charged after eight, 12, 14 and 20 days respectively; three were released within 15 days; and one is still in hospital. Those facts do not suggest to me that the police were up against the buffers in that case. On the contrary, with the exception of the suspect who was detained for up to 20 days, 14 days would appear to have been ample for questioning the others. Of course, we do not know the evidence relating to the suspect who was detained for 20 days. There may have been special circumstances in his case; we do not know, for example, whether he could have been charged within 14 days but for some reason was detained longer. Perhaps the Minister will be able to enlighten the House about that.

That leaves only the airline bomb plot of August 2006. Again, perhaps the noble and gallant Lord can confirm that that is the only case on which the Government are relying since the 28-day period was enacted. In that case, 17 suspects in all were arrested; six were held for 28 days, of whom three were charged; and three were released. I do not know with what specific offence those three were charged. Perhaps the Minister can tell us. Perhaps he can also tell us whether they could have been charged after 14 days and, if so, how the additional 14 days were occupied. If they could have been charged after 14 days, why were they not so charged?

As for those who were released, he must tell us whether there is any reason to suppose that they could have been charged if they had been held longer than the 28-day period. With great respect, it will not be enough for the Minister to say that it is not the practice to comment on individual cases. That may well be so, but equally, statistics provided by the airline case do not help. Unless some particulars are given in relation to that case—and there is none other—we cannot in future be expected to renew the 28 days, let alone increase that period on the mere say-so of the police. I remind the House, if it needs reminding, that 28 days is already far beyond what is allowed in any other common law country, and is almost certainly in contravention of Article 5 of the European convention.

My Lords, I was unfortunately not here for the Minister’s speech, and I apologise for that. But I must intervene because, as the noble and learned Lord knows, we have a difference of opinion on this. There has to be a recognition that the period is up to 28 days, and that in each case renewal takes place week by week and is reviewed by a judge.

I refer to the case of the Indian who turned Muslim, whose name I forget, who was recently sentenced. The police, when looking at the contents of the many flats and houses that he controlled—something they could not do until he was arrested—found computers containing layers and layers of information and an enormous quantity of evidence that needed to be sifted, much of which was not only in Arabic but in peculiar, special forms of Arabic. There is no doubt in my mind—as there would be no doubt in the minds of the special services—that time is needed to look at such material, which cannot be accessed until the arrest has been made.

We must maintain the principle that cases have to be reviewed week by week by a judge, as recommended by the noble Lord, Lord Carlile of Berriew and the other noble judge. They both said that they felt that serious application of good judges, who were perhaps specially trained for this, would solve the problem. There would be justice if such people were looking week by week at a situation in which the forces of law and order needed time to look through vast quantities of material.

The forces of law and order also need time when they are following up clues to be able to talk to other services, and—surprise, surprise—the Pakistanis or Indonesians will not necessarily respond within 10 days or so to requests for confirmation. There can be nothing but justice for the public—as well as others—in giving the maximum possible chance to the forces of law and order to establish proof and evidence that can take people to court. If time is required for that, and there is a proper review every week, I contend strongly that the Government are in the right and that we should extend the time limit. I would prefer to see it extended further, but I know that there is probably not much hope of that.

My Lords, I am grateful to the noble and learned Lord, Lord Lloyd of Berwick, for presenting the reasons why your Lordships’ House has objected in the past to the extension of the period from 14 to 28 days. In this order, I have no difficulty in supporting the disapplication, but I very much hope that the Minister will take into account our concerns raised in the serious debates that have taken place in this House about 28 days.

I remember a few weeks ago reading an article by the Minister, in which he advocated the need to extend the period. I hope I am right about that. It is difficult to accept, because only a few weeks ago, the Government produced a Statement on issues of anti-terrorism and gave a commitment that there would be cross-party discussion on that. Rather than establishing the position now, that would be the time for parties to come to some sort of resolution. Unfortunately, Ken Jones of ACPO is now advocating a longer period, without necessarily having some restraint that allows us to have that political discussion to see where we go from there.

I do not want the Government to take it for granted that by approving this order at this stage we in any way subscribe to any extension of the period from 14 to 28 days; that must be subject to cross-party discussion, as was promised. This occasion must not be taken as a mini-rehearsal for putting forward the Government’s case for an extended period.

I remind the House of the requirements in other countries; the noble and learned Lord, Lord Lloyd of Berwick, was absolutely right,. We have moved so fast in extending the period from 14 to 28 days. First, there was a change from 17 to 14 only in 2003. Within two years, that moved from 14 to 28 days. It is a matter of concern when we consider other countries. In Canada, a suspect needs to be brought before a judge within 24 hours. In Australia, it is within 14 days. It is also 24 hours before a suspect needs to go before a magistrate in Italy and in Germany the period is 48 hours. We can deal simply with this order at this stage, but we must have a substantive discussion not only during the cross-party talks but when legislation is introduced. That will be the time to challenge the need for even 28 days.

My Lords, the issue before us is not whether we should be extending 28 days to something longer—I gather the Government will tell us a little more about their thinking on that tomorrow morning—but whether we should maintain 28 days or go back to 14 days. The Terrorism Act 2006 inserted a sunset clause about this matter, requiring us, once a year, to listen to the Government’s justification for the continuation of 28 days. If the Government are not justified, in our view, in sustaining the 28 days, we would be perfectly entitled to vote against this order.

As the noble Lord, Lord Dholakia, rightly said, or implied from his examples, we, of all liberal democracies, have the longest period of detention without charge—28 days. The sunset clause in the Terrorism Act requires the Government to justify, in terms, why we need 28 days but, by contrast, the United States requires only 10.

This matter was warmly debated in another place a few days ago. One of the issues addressed by the honourable Mr Dismore, a member of the government party, was precisely this point. He asked what specific analysis the Government have done to satisfy themselves that 28 days was needed rather than 14. He used the example of the airline bomb plot. The facts are that 24 suspects were arrested following the plot; 17 were charged; 11 were charged within 14 days; 6 after their detention was extended beyond 14 days, and two within a day of the 28-day limit. Of the seven not charged, four were released within 14 days and three within 28 days.

Your Lordships’ House is entitled to know what the Government make of those statistics. The honourable Mr Dismore asked four questions about them. Was the evidence upon which suspects were charged after 14 days available before the 14 days? How has the 28-day period enabled prosecutions to be brought which would otherwise not be possible? How did the longer period affect the urgency of how the police went about their work? How often were suspects questioned during this period, and for how long?

My noble friend rightly drew your Lordships’ attention to the judicial safeguards. The noble Baroness is absolutely right. They are there and are strict. But we do not know—for example, with respect to the airline plot—what questions the judiciary asked in responding to requests from the Government to extend this period. Mr Dismore again suggests that the Government ought to address this issue. Did the material before the judiciary provide reasonable grounds for believing that the suspect had committed a terrorism-related offence? Were there reasonable grounds for believing that further detention was necessary to deal with potentially probative evidence? That is the kind of response we would expect the Government to make to justify continuing the 28 days.

In the context of the history of this nation, a period without charge of 28 days is a very long one. It is a serious deprivation of liberty. It is right that the Executive should regularly seek to endorse it in front of your Lordships’ House and another place. I am afraid that there is, among some members of the Government, a view that the more you reduce liberty, the more you increase security. That is wholly fallacious. Quite apart from anything else, the longer that suspects are kept in detention without charge and then released, the more bitter their reaction will be to the authorities and the more disengaged they will become from the positive forces in our society. Moreover, the more we reduce liberty in response to the terrorist threat, the more the terrorists will think that they are succeeding in undermining the principles upon which our society is based, and the more determined they will become to succeed.

These issues are not to be taken lightly. They go to the root of our constitutional freedom. We are right to ask the Government to be much more specific about these matters than they have been today.

My Lords, the noble and learned Lord, Lord Lloyd of Berwick, made a powerful speech this evening, as he has done on previous similar occasions, in the cause of civil liberty. He certainly made a justifiable criticism of Ken Jones for going so far as to rashly say that one ought to be able to detain someone for as long as it takes—a most unwise statement. It was no doubt not as carefully judged as the statements of the noble and learned Lord typically are, or those of the noble Lord, Lord Kingsland, who has spoken up in favour of individual liberty—again, in a powerful way.

However, I was more impressed by the speech of the noble Baroness, Lady Park of Monmouth, who emphasised that detention of 28 days is subject to repeated and regular consideration by judges of appropriate rank, depending on how long the detention has been. That is a most important safeguard, and a most important part of the balance between civil individual liberty on the one hand and the security of the general public on the other. I am bound to say to the noble Lord, Lord Dholakia, that his mentions of countries overseas—the noble Lord, Lord Kingsland, also mentioned some—were not particularly impressive to me. Britain happens to be, for a number of reasons that it would be tiresome for me to go into now, a centre of terrorist activity in a way which many other countries—certainly Canada, which was mentioned by the noble Lord, Lord Dholakia—are not. Good luck to them! But we in this country must give special consideration to the balance referred to by all speakers.

Of course the 28-day period is substantial, bearing in mind the long period of individual liberty, rule of law and democracy that we have enjoyed in this country. But terrorism is a reality, and the recent examples, trials and knowledge we have from the intelligence services that other trials and incidents may unfortunately take place are sufficient to suggest that the Government have, as the noble Baroness, Lady Park, pointed out, a strong case for asking for this order today.

My Lords, I say to the noble Lord that we do not underestimate the threat of terrorism to this country. We take it very seriously. I do not want the noble Lord to be in any doubt about that. However, we believe that if it is necessary to constrain liberty in the face of the terrorist threat, we must have some evidence of that necessity. My concern today is not a concern of principle, but that the Government have not produced that evidence. We want to hear it.

The Minister said that the Government were going to produce a paper tomorrow suggesting some extension of the 28 days; he did not say how much. We are not ideologically opposed to an extension of 28 days if there is really cogent evidence that that is necessary. However, what has been lacking so far is that evidence, both in relation to the extension from 28 days and for the necessity of 28 days itself.

My Lords, I am grateful to all those who have contributed to the debate this evening. I take the point of the noble Lord, Lord Kingsland. We all appreciate the seriousness of the terrorist threat, and I would not for a moment think that any of these comments mean that that is not appreciated.

First, it is dangerous to look at other countries and say whether the way in which they do things is better than our approach. For example, the length of time Australia will keep someone before charging them was cited. Of course, in Australia, if they stop questioning the man—which they do—they are then allowed to hold him as long as they wish; they will not be questioning him, but he will be held in detention. We must look at these matters carefully. There are other countries one could look at which have far less tight rules. I am very proud of Britain, and the fact that we look after the freedom of the individual to the extent that we do.

As the noble Lord, Lord Kingsland, said, we are not looking at going any further tonight. We have produced a consultative document and the Government believe that there is a good case for having more time, but we need to talk across the board with numerous people—the judiciary and everybody—about how we should extend it, how much further we go, whether we want a finite figure—we might have to come up with one—and what is the best way of going about that. We intend to have a detailed consultation because we realise the significance of this for civil liberties.

However, like all noble Lords, I would not want to find that the police had delayed arresting people of whom they were aware—perhaps a cell about to carry out a terrorist plot—because they knew that they did not have sufficient evidence and would not have sufficient time to gather the data to have a sensible prosecution. There is no doubt that in two cases—the alleged airline plot and the Greater Manchester thing—we needed up to 28 days. Noble Lords can ask for much greater detail on this. I will look to see if it is possible to give it, as I would like to do so. I have been assured that all that time was necessary. The sheer complexity of the problem means that we might need more time in future, but we need consensus on that. We need to look at it very carefully and to talk to everyone to make sure that we have the right judicial oversight.

The noble Baroness, Lady Park, made the point that the period is up to 28 days. We do not use them very often, but if we need them, they are there and we can use them. We have needed them on two occasions. It is important that we have that ability, which is why it is so important that we have this capability for another year.

As far as the statement by Ken Jones is concerned, within our consultation, we will consider all the comments. I do not think that,

“as long as it takes”,

is a particularly clever statement. I am sure that he did not mean it exactly like that, but we will look at it in the consultation. I am sure that, at the end of this, we would all like to feel that there is greater security for the average citizen of this country because we are able to arrest people quickly, before they can carry out a crime—normally a suicide attack where we cannot take the risk of not arresting them—but when we know we have not got enough evidence at that stage to charge them and take them to court.

There may be points that I have not answered. Some useful comments were made for the right reasons, not because noble Lords do not appreciate how important combating terrorism is, but because of civil liberties that are important to us as a nation. If I have not answered them, I shall give a written answer. In the mean time, for the reasons that I have given, it is, unfortunately, necessary—it would be nice if we did not have to do this—to keep this extended period. I therefore commend the order to the House.

On Question, Motion agreed to.

Data Retention (EC Directive) Regulations 2007

rose to move, That the draft regulations laid before the House on 28 June be approved.

The noble Lord said: My Lords, these regulations are made under Section 2(2) of the European Communities Act 1972 to enable the initial transposition of the European directive on the retention of data generated or processed in connection with the provision of publicly available electronic communications services or of public communications networks and amending Directive 2002/58/EC. The directive requires that traditional communications data from fixed-line and mobile telephony remains available for lawful disclosure, should disclosure become necessary and proportionate. Let me explain why communications data are important and why these measures are necessary.

Communications data have nothing to do with the content of a communication. They are information about who is communicating with whom, when and where they are communicating and the type of communication. Typically, public communications providers have retained this information for their own business purposes, such as billing, network management and the prevention of fraud. Different businesses retain this data for different periods, and once the business purpose for retaining the data has expired, they are required to destroy it. These regulations are relevant only to businesses that keep their data for less than a year.

So why is this information important? Communications data, such as mobile phone billing data, have a proven track record in supporting law enforcement and intelligence agency investigations and are a vital investigative tool. They provide evidence of associations between individuals and can place them in a particular location. They also provide evidence of innocence.

I would like to pay tribute to the public communications providers, big and small, that have provided enormous assistance to the Security Service and the police by making communications data available for lawful disclosure and that have participated in discussions with the Government about the implementation of the directive.

Without this data, the ability of the police and the Security Service painstakingly to investigate the associations between those involved in terrorist attacks and those who may have directed or financed their activity would be limited. The police and the Security Service’s ability to investigate terrorist plots and serious crime must not be allowed to depend on the business practice that happens to be employed by the public communications provider that a particular suspect, victim or witness used. These draft regulations will ensure that, regardless of which public communication provider supplies the service, the communications data will be available.

This initial transposition applies to traditional types of communications only, such as mobile or fixed-line telephony. In recognition of the technical complexity of internet communications, the Government decided to delay implementation of the directive with regard to internet-related communications, and the public consultation showed overwhelming support for that approach. The retention of internet-related communications data has been postponed because our early engagement with the industry indicated that extra time would be required to clarify requirements and develop a technically sound approach to implementation.

In contrast, we have a great deal of experience with the retention of traditional communications data. We have been working with the industry to ensure the retention of this data since 2003, when Parliament first approved the code of practice for the voluntary retention of communications data under Part 11 of the Anti-terrorism, Crime and Security Act 2001, which was made in response to the new threat from terrorism witnessed on 11 September 2001. Today, that threat is ever more apparent in the United Kingdom. The voluntary code has provided an important building block for establishing a practical framework for the retention of communications data in the UK, and the draft regulations provide the necessary next step to provide a mandatory framework.

As well as ensuring that communications data are available to assist investigations, regardless of the different business practices of public communications providers, many providers have expressed a preference for a mandatory framework, as they welcome the additional legal certainty that provides. These regulations make provisions to continue with the established UK policy of reimbursing public communications providers which incur expenditure from adjusting their business practices to comply with the Government’s requirements for the retention of communications data. The recent public consultation confirmed the need for these provisions in order to avoid distortion of the highly competitive telecommunications market.

The justification for and practice of the retention of communications data was debated in the House during consideration of the Anti-terrorism, Crime and Security Act 2001 and the code of practice for the voluntary retention of communications data. These regulations do not stray from the established policy position on this matter; they simply move the traditional telephony sector of the industry from a voluntary to a mandatory framework for the retention of communications data, a move that is largely welcomed by the industry and the law enforcement community. I beg to move.

Moved, That the draft regulations laid before the House on 28 June be approved. 22nd Report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

My Lords, I am grateful to the noble Lord for that full explanation of what is behind this order. I am also grateful that, as far as I can see, there has been no comment from the Joint Committee on Statutory Instruments or from the Merits Committee about these two. The noble Lord explained that these orders relate to landlines and mobiles only and that, after further consideration, there will have to be more orders relating to internet and other forms of communication. That is very important, particularly because, as I understand it—and I am always rather weak on these things—a great many telephone calls can now be made through the internet. Will the noble Lord explain a little more about that?

I do not need to ask my final question, but I do so in order that the noble Lord can put the matter on the record. Regulation 10(1), on payment, firmly states:

“The Secretary of State may reimburse any expenses incurred by a public communications provider in complying with these Regulations”.

The Explanatory Notes deal with why “may” and not “will” was used; however, it would be useful if the noble Lord spelt out that reason. As I said, it is important that we should have it on the record.

I hope that in due course we can pass these regulations.

My Lords, I too thank the Minister for a very clear explanation of the regulations. We will not oppose them either, as they seem a sensible extension of our current arrangements. It would be useful to ask the Minister a few questions relating to the voice over internet protocol. Internet telephonic providers already have a competitive advantage. Will that continue to exist or will almost all internet providers be covered by this regulation?

I am particularly keen to find out what other countries are doing in relation to what we are doing in this country. Are they, more or less, taking the same view on the practicalities? Has any other member state chosen to introduce the recycling directive, as I believe it is known, as it applies to internet telephony at an earlier date?

What is the Minister’s understanding of why some countries want the provisions to be mandatory and not optional?

The Information Commissioner plays a role in policing access arrangements as far as the British Government are concerned. Will he have a similar role when the information is derived from overseas providers? Given that we are now talking about a Europe-wide system, will the Information Commissioner’s remit run to any call that originates or ends in the United Kingdom? That would seem necessary for our protection. Has the Minister yet discussed that issue with his counterparts in other member states and with the Commission? It would be helpful to have this information.

My Lords, I am very grateful to both noble Lords for their support for the regulations and for the intelligence of their questions. I am not sure that I can answer all their very important questions this evening. I shall endeavour to respond to them in due course in writing.

The noble Lord, Lord Henley, asked for more clarification on the internet aspects of the issue. It is clear from our early engagement with the industry that we need additional time to develop the implementation of the directive on internet-related communications. That consultation indicated the additional complexity associated with it. As I made plain, or certainly alluded to, some thought needs to be given to the technical resourcing issues, which may take time to resolve. We will have to return to that issue.

The existence of the voluntary code of practice under the Anti-terrorism, Crime and Security Act 2001 will enable some early work on the retention of communications data to proceed. That will of course inform our understanding of how best to complete the transposition of the directive. That is part of the explanation of why we need to return to that issue.

The noble Lord was also concerned about the funding arrangement for data retention. The regulations make provision to continue with the established UK policy of reimbursing public communications providers that incur expenditure from adjusting their business practices to comply with government requirements. I understand that we are budgeting some £6 million annually to meet appropriate data retention and associated data retrieval costs. Our approach to reimbursement is to ensure that communications data retention is cost-neutral to industry. We do not want to benefit one data provider against another so that the market is skewed.

We are making appropriate contributions to costs incurred by providers and where they undertake to retain data for extended periods. In practice, these contributions cover 100 per cent of costs. That does not mean that every provider is being funded, because some already retain this data for their own purposes.

The noble Lord, Lord Henley, asked why Regulation 10 states that reimbursement “may” be made. The use of “may” rather than “shall” is necessary to ensure that, where there is potentially duplicative storage of communications data, the Secretary of State can take measures to ensure that data is retained in the most efficient manner. There is no intention to avoid reimbursement of additional costs incurred by public communications providers. That is why that terminology is used. I hope that that helps.

The noble Lord, Lord Dholakia, asked for more information. Other member states have legislated for internet data. We will obviously watch their experience with interest. We can gain knowledge and understanding from it. The Government are participating actively with the European Commission on issues relating to implementation, particularly to ensure consistency of approach and of interpretation. But we will look at these issues where communication is international.

The other points the noble Lord, Lord Dholakia, made require further reflection and perhaps a more detailed response. I shall quickly look at this note I have been handed to see whether I can provide some of them. He asked whether we were maintaining or adopting a voluntary regime. The directive is mandatory; the voluntary regime was, I suppose you might say, a British pragmatic approach and solution in its time. Providers want some legal certainty, which the mandatory regime provides. In some ways it is understandable that the industry wants that. It does not want to be forever hanging on to a voluntary code, asking “Does it mean this?”, “Does it mean that?”, “Do we have to do that?” or “Are we obliged to provide that?”. It helps to provide a level playing field across the industry. That is of benefit to all.

If I have missed something—I have struggled not to—I shall endeavour to provide a note for both noble Lords who have contributed to the debate. I think that I have covered most of the main issues. I am grateful to both noble Lords for their support.

On Question, Motion agreed to.

Verification of Information in Passport Applications Etc. (Specified Persons) Order 2007

rose to move, That the draft order laid before the House on 28 June be approved.

The noble Lord said: My Lords, the purpose of this order is simply to ensure that there is sufficient information available to confirm the identity of passport applicants.

The order is being made under Section 38 of the Identity Cards Act 2006, as passports are currently issued under the royal prerogative. Section 38 was included in the Identity Cards Act to establish a power to require information to be provided to verify information in, or in connection with, a passport application. Information may also be required to determine whether to withdraw an individual’s passport.

Section 38 already covers all government departments, but this power may be extended to specified non-government bodies by order. The draft order extends the power in Section 38 to two non-government bodies. The first is the Registrar General for England and Wales, who is responsible for the General Register Office for England and Wales, which although a public body is not technically a government department and so is not yet covered by Section 38.

The General Register Office already provides details of child deaths to the Identity and Passport Service to prevent passport fraud, in particular to prevent impostors from obtaining passports in the identity of someone who died in childhood—sometimes known as The Day of the Jackal fraud. However, the Identity and Passport Service is now starting to introduce interviews for adult first-time passport applicants and therefore needs to extend the checks made to guard against passport and identity fraud.

The inclusion of the Registrar-General in the order will put beyond doubt the ability to obtain information about births, marriages or deaths in order to confirm the identity of a passport applicant. I should add that it is not necessary to add the General Register Office in Northern Ireland, as it is covered already under Section 38(3)(c), which covers “a Northern Ireland department”.

Also, the General Register Office in Scotland was given wide powers in the Local Electoral Administration and Registration Services (Scotland) Act 2006 to provide information to other public bodies or officeholders and to charge for that service where necessary. It therefore does not need to be included in the order either.

The second body covered by the draft order is a credit reference agency with which the Identity and Passport Service currently has a contract for the provision of information. No private sector organisations are currently covered by Section 38, but with the introduction of passport interviews, it is necessary to extend the amount of background information obtained from a credit reference agency in order to verify identity. The Identity and Passport Service currently has a contract with Equifax plc, which is one of the leading credit reference agencies, for the provision of information. The drafting of the order will enable the power to apply to a different credit reference agency if the contract should change in future.

The order will provide clarity that the organisations concerned have the legal power to provide the information requested, because Section 38 creates a statutory duty to do so. Section 38 covers the provision of information needed for verifying information provided to the Secretary of State for the purposes of, or in connection with, an application for the issue of a passport. It might therefore include information provided by the credit reference agency about previous addresses at which the applicant has lived recently. The information provided could also include similar details about a third party—for example, the parent of an applicant or the countersignatory to the application, whose name will also be included on the passport application form.

The order will ensure that the provision of personal data is lawful under the Data Protection Act. I should stress that the personal information provided must be held in accordance with the Data Protection Act 1998. It will not cover irrelevant information such as details of an individual’s credit rating or financial circumstances. Rather, it will be information directly related to the customer’s identity or information that might be used to confirm at interview that he or she is the same person. This might include information such as the name of the building society from which an individual holds a mortgage or the bank with which he or she has an account, but, of course, not the size of the mortgage.

Once it has been established that the applicant is genuine, any information which has been used simply to confirm identity will be destroyed. Of course, the identity information, such as the applicant’s name, address, date of birth and so on and the application form, will continue to be held by the Identity and Passport Service, just as it has always been.

The Information Commissioner’s Office has been consulted about the order. At its helpful suggestion, the scope of the order has been limited to only a credit reference agency with which the Identity and Passport Service currently has a contract. It therefore does not apply to any credit reference agency.

The two most important reasons for the order are, first, that it creates transparency for the passport customer as to the sources of information against which their application will be checked; and, secondly, that it will ensure certainty that there is no legal doubt as to the provision of information to assist the Identity and Passport Service with its background checks.

I trust that that explanation has clarified the purpose of the order and the reasons for proposing it, but of course I should be happy now to deal with any points or questions that noble Lords might have.

Moved, That the draft order laid before the House on 28 June be approved. 22nd Report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

My Lords, the order is, we gather, introduced under powers given to the Government by the Identity Cards Act 2006—an Act that I suspect the Government and the noble Lord personally, as an ornament to the Government, will come to regret in due course.

I have a number of questions to ask the Minister about the order and its effect. First, and most important, what extra costs will it bring to the Government—that is, to the taxpayer? We know that identity cards as a whole will cost a great deal of money and we know that the costs will, likely as not, increase in a manner that will make the increased cost of the Dome and of the Olympics look like what we might refer to as small beer. I should be very grateful if the noble Lord could tell us exactly how much this order—this small part of the whole—will add to the cost to the taxpayer.

Can the noble Lord also tell us how much the order will add to the cost not so much to individuals but to the various others who will be affected by it, such as credit reference agencies and others referred to in the order? Again, that is not dealt with in the Explanatory Memorandum. We need to know what the compliance costs are for other people in dealing with the order, which is one small part of the further burdens to be placed on all of us by the Identity Cards Act 2006.

I hope that the noble Lord will be able to deal with those points. If he cannot, as always, he can offer me one of his letters. I am very grateful for the number of letters that I receive from the noble Lord and would be happy to have more, but, if possible, perhaps he could answer that point at the Dispatch Box.

My Lords, I am grateful to the noble Lord, Lord Henley, for putting those questions. I have further questions for the Minister and, like the noble Lord, I say that if the Minister cannot reply today, I do not want to delay the House, so he may care to write to me.

As the Minister said, we are seriously concerned about matters of identity fraud and passport fraud. Figures that have been repeatedly supplied to your Lordships’ House give rise to serious concern about those matters. I am glad that my noble friend Lord Roberts of Llandudno is sitting next to me, because he has been very prominent in issues relating to the whole subject.

Let me say at the beginning that we believe strongly that we must do everything possible to make our borders secure. On that, there is no dispute. The Minister will have seen that by the contribution that we are making on the UK Borders Bill at the moment. That is our purpose. We do not want passports to be issued and then used for fraudulent purposes in any way.

I have read the instrument and the Explanatory Notes and listened to the Minister’s assurance about the use of the information. I have a problem with the manner in which a section of the SI is laid out. The SI contains a requirement to which the Minister referred when he talked about what would happen if a credit reference agency refused to provide information. However, it is clear in the Explanatory Notes that there is a requirement for the credit reference agency to produce information concerning the identity of individuals. That provision is not subject to the constraint to which we feel that it ought to be on background information. There is no requirement in the statutory instrument and therefore no guarantee that the information should be destroyed and that the Identity and Passport Service must confine itself to the limited information to which we have referred.

My concern about the statutory instrument is not about what it seeks to achieve. I have absolutely no problem with what the Minister has said about what information should be provided. I want government officials to be given power to stamp out fraudulent passports.

My Lords, I am grateful to both noble Lords for their interest in, if not support for, the order. I was not quite sure whether the noble Lord, Lord Henley, supported it. Of course, it relates not to ID cards but to passports and passport security, which is a different point. The noble Lord, Lord Henley, as ever chides us about costs, but he fails to understand that most of the costs of ID cards are contained in the current budget for the Identity and Passport Service, as we have explained on many occasions. However, this matter is of genuine interest, concern and debate. We have yet to hear from Her Majesty’s loyal Opposition whether they will abolish legislation on ID cards if they ever return to government. There is a debate to be had on that, no doubt over many years.

The noble Lord then asked about the precise costs of the order and how it is to work and be funded. How do we pay Equifax and what are the charges? We pay Equifax by way of a licence fee, the cost of which is calculated by estimating the number of transactions at a predetermined transaction charge. In addition, a provisional annual development cost was anticipated at the outset of the Equifax contract. The actual cost of development is met on completion of the work or through a series of milestone payments. There are, of course, some continuing maintenance software and hardware charges, which are quite tightly controlled in that process. The contract was let in March 2004, but became effective from June 2004. The contract value when let was £8.3 million—a combination of licence and development spend.

How do we pay for GRO information on births, marriages and deaths? The Identity and Passport Service pays a fee to the GRO for all certified copies of birth, marriage or death certificates. We are also provided with bulk data on all child deaths, for which we have made a contribution to the costs. We do that for the very good reason that we do not want to do anything that undermines our continued fight to prevent identity fraud, the consequences of which I am sure we all recognise are very serious indeed. I should add that we are also looking to the provision of online information on births, marriages and deaths, but the costs of this have yet to be settled, so this may be something for the future.

The noble Lord, Lord Dholakia, offered us his support for the order, and reiterated a position that interestingly emerged in our discussions on the UK Borders Bill when he voiced his fairly vociferous support for doing more to secure our borders. We as a Government are genuinely grateful for that. The noble Lord is absolutely right that we need properly to secure the way in which passports work. We have been working very hard at that and we now have a very good passport service that turns applications around very quickly. The service is also becoming increasingly effective in tracking down fraud and abuse, which will help us in the fight to secure our borders.

The noble Lord asked about information data and their destruction. They will have to be destroyed if they are no longer relevant because, as I explained in my initial contribution, the Data Protection Act 1998 clearly applies to the retention of this information. There were no other questions of substance but, if I have missed anything, I shall check Hansard very carefully and ensure that I add to the pile of correspondence that the noble Lord, Lord Henley, obviously greatly enjoys.

On Question, Motion agreed to.

Railways

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:

“With permission, Mr Speaker, I should like to inform the House about a Statement that the Government have made today on how they intend to strengthen the country’s railways over the next seven years and beyond. It is the most ambitious strategy for growth on the railways in more than 50 years. The Statement is made against a background not of decline or crisis, as in the past, but of remarkable success for our railway network.

“Of course, anyone who travels regularly by rail, as many of us in this House do, knows that big challenges remain before our country has the rail system that it needs. There is no room for complacency. But the measures that the Government have put in place since the Hatfield tragedy mean that our railways are safer than ever before. Reliability, which declined sharply after Hatfield, is improving strongly across most lines, and passenger satisfaction has improved. There has been sustained investment in the network itself; for instance, in the modernisation of the west coast main line and in new rolling stock. The result is that more freight and more people are travelling by rail than at any time in the past 50 years.

“So our challenge today is not about managing decline but about how we can build on this solid progress to provide a railway that carries more passengers on more and better trains on frequent, reliable, safe and affordable services. This needs government, working with the industry, the regulator and passenger groups, to take action in three main areas: first, to secure continued improvements in safety and reliability; secondly, to achieve a major increase in capacity to meet rising demand; and, thirdly, to deliver sustained investment through a fair deal for passengers and taxpayers.

“Let me take each in turn. On safety and reliability, safety has improved, and reliability is back to the levels seen before Hatfield, even though we are running many more trains. Those who work on our railways deserve credit for their focus. The White Paper sets out how the Government intend to continue reducing the risks to passengers and staff on our railways. We also intend to build on the improvements in reliability, which now see 88 per cent of services running on time. By 2014, the Government want this figure to reach 92.6 per cent, through investment in new rolling stock, maintenance and equipment, which would make our railway one of the most reliable in Europe. And, for the first time, the Government will require the industry to concentrate on cutting, by one quarter, delays of more than 30 minutes—those that cause the most inconvenience to passengers. But as safety and reliability have improved, passenger numbers have increased. Overcrowding has become a real issue for many commuters. The White Paper contains the biggest single commitment for a generation to increasing the capacity of the railway through more services and longer trains. By 2014, the Government will have invested £10 billion to make this happen.

“Starting now, and over the next seven years, there will be 1,300 new carriages to ease overcrowding in London and other cities such as Birmingham, Cardiff, Leeds and Manchester; £600 million of investment to tackle bottlenecks at Birmingham New Street and Reading stations; the £5.5 billion transformation of Thameslink, which provides a vital north-south artery into and across London; and new plans put in place for the development of each of our main lines, including the next generation of InterCity trains and signalling. This Government are also committed to ensuring that we close no rural lines in this period.

“This continued investment will provide nearly 100,000 new seats for passengers on InterCity and commuter trains to our major cities. The Government’s proposals will accommodate a further seven years of record passenger growth and, at the same time, will start to tackle some of the worst overcrowding on some of our busiest services. There will be some 14,500 more seats in the peak hour on Thameslink alone, and although Crossrail remains subject to financial and parliamentary approval, it has the potential to deliver a similar scale of improvement for east-west services in the capital.

“The White Paper also outlines other improvements that groups such as Passenger Focus say passengers want to see: a radical simplification of the fares structure, and the modernisation of tickets to allow people to use smartcards; a further £150 million in 150 stations in the towns and cities outside London, which form the backbone of the national network; better and safer stations from Wolverhampton to Dartmouth, Cleethorpes to Swansea, and Barking to Chester; and support for Transport 2000’s idea of local station plans so that people can have better access to the railway and make it part of a greener travel choice. The Government are also investing £200 million in a strategic freight network that will help both to reduce congestion on our roads and the environmental impact of moving goods.

“Underpinning all this needs to be sustained investment. Having fought its way back to a stable financial footing, following the demise of Railtrack, it is essential that the industry maintains financial discipline. Both passengers and taxpayers have suffered the consequences of past financial crises. The Government will not allow a return to those days.

“The challenge is to deliver the sustained investment the rail system needs while continuing to protect passengers, but we must also strike a fair balance between the call on taxpayers and fare payers. Because the Government are determined to continue to protect passengers, any increases in regulated tickets will remain capped at RPI plus 1 per cent. These account for more than half the use of the railway and include season tickets and saver fares.

“There has been some recent debate about unregulated fares, for unregulated fares operators can vary prices to respond to customer demand. So, some unregulated ticket prices have increased. This is something the Government will monitor closely and is why today they are committing to give Passenger Focus more say in the specification of future franchises before they are tendered. At the same time, many other tickets have been discounted. In fact, around 80 per cent of passengers do not use the headline-catching first and peak tickets, but buy either a regulated ticket or a discounted product. A significant number of these fares have fallen in real terms over the past 10 years with many deals cheaper in cash terms than they were under British Rail.

“The result is that many more people are now choosing to travel by rail—some 340 million more passengers each year than in 1997. This strong growth also means the railways need less taxpayer subsidy. In the difficult years of Railtrack, it was the taxpayer who footed the bill. The proportion of subsidy funding nearly doubled in five years. It is right that the Government now seek to return it closer to historic levels. This Government are meeting their goals; that is, protecting passengers and achieving a fair balance between the taxpayer and the travelling public, while delivering the necessary investment that we all agree is needed.

“Today’s White Paper has set out the Government’s ambition for a railway capable of carrying double the number of passengers and twice the amount of freight by 2030 with modern trains and a network whose reliability and safety counts among the best in Europe. This is not a White Paper that rests on distant promises of all or nothing projects. Schemes such as new north-south lines may have their place and we will consider them if and as the need arises. This is a strategy that seeks to deliver real improvements which reflect passengers’ priorities and builds on the real achievements and successes of our rail system over the past decade.

“Twenty-five years ago, the railways were advertising, ‘This is the age of the train’, but it was against a background of falling demand and chronic under-investment in trains and infrastructure. Perhaps that claim was premature. By building on the progress of the past 10 years with sustained investment and increased capacity, and by harnessing the full environmental gains of rail transport, we will be entering a new and exciting era of rail travel. The White Paper is a resounding vote of confidence in Britain’s railways and I commend it to the House”.

My Lords, that concludes the Statement.

My Lords, I thank the Minister for repeating the Statement. I should like to open by saying that we welcome progress on Thameslink, Birmingham New Street, Reading and other longer trains and platforms. However, it seems wise to restrain our natural enthusiasm until we have seen the contracts signed and work under way. I should like to confirm in your Lordships’ House the answers to questions asked in another place. Can the Minister give the dates on which work on Thameslink, Birmingham and Reading will start? Has a budget definitely been committed for the whole of each of these projects or are they dependent in any way on the outcome of the Comprehensive Spending Review? Is the whole of Thameslink 2000 now fully funded? Are the 300 carriages trailed today part of the reannounced InterCity Express programme or an addition to it?

The million-dollar question is: what has happened to Crossrail? This is yet another damp squib for Crossrail, which apparently does not feature in the Government’s plan for the next 30 years of our rail system, despite announcement after announcement from Ministers; despite, astonishingly, £254 million spent on preparation; and despite a clear commitment from the previous Prime Minister.

It is sad but true that today’s Statement will be a real disappointment for Londoners and the City, which no amount of warm words from the Prime Minister can disguise. Sadly, this is all too familiar. Today’s announcements are just the latest in a long line of increasingly dense and lengthy strategies, reports and initiatives on transport from this Government. If the travelling public could travel on paper promises, there would be no delays, no overcrowding and the journey to work would be blissfully smooth for commuters each day.

Unfortunately, the reality is far from a magic carpet ride. In the past year alone we have seen commuters go on strike, facilities ripped out of carriages to provide extra standing room and fares hiked by 20 per cent on a main route into London. The reality is that the Government have announced and reannounced virtually all the initiatives we have heard about today. Thameslink 2000 was promised so long ago, the former Deputy Prime Minister was still in charge of transport. Even now, only part of the scheme that was promised is being promised again. As for Birmingham New Street, the Government pledged to tackle bottlenecks in the West Midlands seven years ago. Longer platforms and 1,000 of the 1,300 carriages announced today were promised last year. Yet not one of those projects has been delivered. The Government’s delivery on transport has been stalled and delayed more than their trains. I confess that I have little faith in the latest in a long line of policy freight.

I remind noble Lords of the promised three-and-a-half hour journey time from Edinburgh, the light rail schemes in Liverpool and Leeds, the north-south high speed line, all of them policies shunted into the siding. Most distressingly, the pledge on safe and secure travel, when there has been a 43 per cent increase in the number of victims of violence recorded by the British Transport Police, also seems to have run away.

Seven years ago we were promised,

“improved commuter rail services, less overcrowding and reduced delays”.

But even after fitting the timetables to meet limp public performance measure targets, more than one in 10 trains runs late in this country. Thousands of commuters face standing for their entire journey every day of the working week. The overcrowding which blights lines into our major cities is now reaching a crisis point, which is seriously undermining our quality of life and competitiveness, both north and south.

On behalf of the Secretary of State, the Minister claimed real achievements and successes today. But I would love to be a fly on the wall as the Secretary of State announces those great achievements to the commuters who are packed so tight in the morning rush hour it would be a criminal offence to transport animals in the same way.

The biggest let-down of all is in Her Majesty’s Government’s 10-year plan, which told us:

“We will seek real reductions in the cost of rail travel”.

Each of the three latest franchises awarded by the DfT will implement rises of nearly 30 per cent by 2015. Many families are feeling the pinch because of stratospheric fare increases inflicted by the DfT, racing well ahead of inflation. It seems now that even the saver fare is under threat. The one thing we can guarantee for this Government’s future plans for the railway is more rail fare hikes to come.

Accusations of blame fall at the train operating companies, but the real culprit is the Department for Transport, which now has a more intrusive role in our railways than in the days of British Rail. It is sad at a time when rail transport is more depended on than ever before that the Statement does not usher in a new era on our transport system any more than the rest of the reports, strategies and studies that have poured out of Whitehall over the past decade.

The truth is that the real blame for the state of our transport system falls at the feet of the Prime Minister. The extortionate fare increases for grossly overcrowded trains are Mr Brown’s fare increases. The Metronet PPP fiasco is most definitely the personal fiasco of the Prime Minister. The failures and broken promises of the past decade are the failures and broken promises signed and sealed by Mr Brown.

My Lords, I will not go along the same churlish road. For the party that has caused all the problems on our railways to deliver that sort of lecture was quite awful.

I will address a few pertinent questions to the Minister. The governance of Network Rail needs close examination. The company is responsible for our infrastructure but is not held to account under the present governance arrangements. I urge the noble Lord and the ministry to turn their attention to that.

The question of safety on the railways, referred to in the Statement, is perhaps overstated. The railways are extremely safe. I should like to know, in writing, how much it will cost to get a further 3 per cent reduction in the risk of death or injury. Very few people are hurt now, and to get 3 per cent better will be incredibly expensive.

When will the orders for the new carriages be placed? Is the current review of the ROSCOs by the competition authorities likely to hold them up? Will the Thameslink promise in the White Paper extend all the way along the present scheme, or will it stop short?

Many people will have hoped to see some reference to the doubling of the track on certain lines. The noble Lord, Lord Borrie, will be familiar with one that is in desperate need of investment, the Oxford to Worcester line, but there are many more examples.

We are disappointed that there is no more definite announcement on Crossrail, and we hope that we can look forward to getting more definite news when the Crossrail Bill comes back to this House. It is essential, in my opinion, that the scheme is extended to Heathrow and Reading to get proper east-west balance.

Where the White Paper addresses travel plans it fails to mention the question of increasing car parking. There are a huge number of people who want to use the railway but who cannot park at the stations. The doubling of car parking space at stations, which is very much needed, would not be expensive.

I should like to know how much £200 million will buy in the extension of the freight railway, particularly the clearance of the railway for containers heading inland from the ports.

I am glad to hear that Rail Focus will be given some teeth. I hope they will really bite on the question of that body’s input into the new franchising rounds. I ask the Government to consider reviewing the railways franchising procedure. I am confident that if it were handled more skilfully it could lever in far more investment, not from the taxpayer but from the prospective franchise customers. I am sure that tens of millions of pounds could be levered in that way.

The InterCity Express that was referred to is, I am afraid, an example of the old question of committees designing camels, or whatever it is. The process should be much more focused than it is. The West Anglia line should have been mentioned, and I caution the Government about rushing into the European rail traffic management system beyond 2014 to 2024, simply because no one has made it work on a proper mixed-traffic railway. We should not invest money in speculation.

My last comment is reserved for the words in the White Paper about the north-south rail link. The reason for not proceeding with any studies is that it needs to be “rigorously assessed”. I think that is civil-service-speak for “endlessly delayed”.

My Lords, I feel sorry for the noble Baroness, Lady Seccombe. Tory central office keeps handing out this speech; it is the same speech we have heard from the Conservative Party on a number of occasions. Her leader says the Conservatives should give credit where it is due; well, they have to start doing that. For the past decade there has been a period of unparalleled growth in passenger numbers on the rail network, as well as growth in expenditure, commitment and support. The network is in a better state now than it has been for a very long time.

I do not always agree with the noble Lord, Lord Bradshaw, but I found myself in a fair measure of agreement with him today. He has a reputation for speaking a lot of sense on these matters, and he does not play the party political card overmuch, to give him some credit.

What can I say about the Conservative position? It is characterised by underinvestment. Over the past 10 years we have had to pick up and tackle the failings of an appalling privatisation. I shall quote the noble Baroness’s own party discussing the issues—among themselves, as it were. Was it Chris Grayling who said,

“I think we have not had a clear transport strategy in this party in recent years; we’ve had tactical positions”?

I do not lose much heart at what the noble Baroness has said in responding to a Statement that I see as very positive in terms of what it will deliver—and delivery is what it is all about.

The noble Baroness asked some good questions, and I will try to deal with some of those. Thameslink, Birmingham New Street and Reading are all funded, and we are committed to funding the development of Thameslink. A key element of that will be delivered by 2011 and it will be completed, as I understand it, by 2015. The 300 additional trains to which the noble Baroness drew attention are over and above the 1,000 trains highlighted in March. I remind the noble Baroness that planning permission was received for Thameslink only last year. There has been project delay in the past, largely because money had to be diverted into paying for the costs of the privatisation extravaganza that the previous Government embarked upon.

The noble Baroness also asked—and this was echoed in the comments of the noble Lord, Lord Bradshaw—when we will start to purchase trains. We are starting the process with the industry now and will publish a detailed plan next January. The noble Lord, Lord Bradshaw, asked about ROSCOs. We do not expect the ROSCO reference to delay the process. I think that reference is about old trains, not new ones.

The noble Lord made a fair point about Network Rail governance. Fair enough, but he knows that it is a private company and its governance is scrutinised by the independent regulator. It is fair to say that current arrangements are working quite well.

On safety, we do not believe that significant investment will be required to deliver the 3 per cent reduction in risks on the network. That is helped by the fact that we are now deploying new trains and better equipment. There have also been better working practices in the past few years—perhaps, one has to acknowledge, as a by-product of some of our earlier problems.

The noble Lord, Lord, Bradshaw, makes his usual point about car parking, which I well understand. It is mentioned explicitly in the White Paper and recognised as being important, because we know that it will help get a critical mass of passengers at major rail headline areas, which we believe is important.

The criticism was also made that there is no announcement on Crossrail. We accept that Crossrail is a good scheme with many benefits, which are manifestly apparent to all of us. It is an important scheme, with the potential to do for the east-west corridor what Thameslink achieves for the north-south corridor. We have introduced an enabling Bill, which is going through the process of getting parliamentary approval, and we shall move on to seek further financial and parliamentary approval in due course.

Regulated fares have fallen in real terms since 1997—I usually quote the figure of some 2 per cent. Noble Lords may not think that that is enough, but it is an indication of our encouragement of the use and take-up of regulated fares. We maintain that the cheapest fares are cheaper in cash terms than back in 1997—which, to the noble Baroness, Lady Seccombe, was a time of rail nirvana, if we listen to the Tory script. But I am not inclined to do that. Eighty per cent of passengers enjoy regulated or discounted fares, so only 20 per cent pay the full or walk-on cost at any given time.

This White Paper demonstrates our commitment to the network and our continued investment. It demonstrates, too, that we wish to see growth in passenger use of the network and that we plan for that growth over not only the next seven years to 2014 but to 2020, 2030 and beyond. This is a recognition that we are genuinely in the age of the train.

My Lords, I congratulate the Government—I do not often congratulate the Government, but I do on this occasion—because this is a really good document. It sets out the investment required for growth in capacity, which as my noble friend has said is what is needed. In my experience, this is the first time that a Government have ever given a financial commitment for five years. In time past when it was a nationalised industry, it was usually one year if you were lucky and two or three years if you were very lucky. This time it is five years, as required by the regulator, who can set a Network Rail specification and set how much Network Rail will have to reduce its costs or increase its efficiency. For the railway industry, which is always long term, having a five-year financial commitment is terribly important. It is very nice to have a longer term commitment, or strategy, on the back of it. So I congratulate sincerely my noble friend and his colleagues on this.

As chairman of the Rail Freight Group, I particularly welcome the investment in Reading station and the strategic rail freight network, which the noble Lord, Lord Bradshaw, mentioned. However, on a day when Oxford, where I live, is surrounded by water and all the railway services are cut, will my noble friend say whether part of the investment planned on the strategic freight and passenger network, of which I believe Oxford is part, takes into account the increasing likelihood of flooding? The line between Didcot and Oxford gets flooded about once every two years for several days—and it will be for about a week, this time.

I notice in the environmental section of the White Paper that Network Rail is developing a climate change hazard map on infrastructure that is vulnerable. I hope that that includes such things as raising embankments, if that will keep the trains off the floodwater. If we do not keep our strategic infrastructure going in times of flooding, although it is of course not only the railways that are affected, they will suffer because they were designed 150 years ago, whereas the roads were designed more recently, so there have been fewer problems with them. We have heard about electricity, sewerage and water as well, in that regard. It is very important that more effort and investment are put into keeping the strategic infrastructure going.

As regards Network Rail developing a climate change hazard map, hotspots and all that, and the Government ensuring that the specification of future rolling stock requires suppliers to take account of these factors, I assume that we are talking about wet hazards. Are we talking about trains that will operate under water? That is a new idea. It may be necessary but I do not know whether it is part of the investment plan.

My Lords, I cannot yet announce a prototype for underwater train technology. Perhaps that is something for the future. I am entertained by the noble Lord’s point.

We believe that investment in a strategic freight network is important. That is why we have allocated £200 million to the development of the strategic freight network. That will be integrated with and complement the existing network and will benefit both freight and passengers alike. We are very much committed to working with industry and interested parties to facilitate the delivery of the SFN.

The noble Lord makes an important point about flooding and rail reliability. As probably do other noble Lords, I remember recent floods in the midlands, with the sight of water flowing between two platforms and trains being prevented from moving along them, for understandable reasons. The White Paper recognises that greater resilience to issues such as climate change will be required. That will need to be factored into future maintenance and renewals. Such factors are certainly being taken into account in the design of the intercity express train, but we have not yet designed a train that travels under water.

My Lords, noble Lords will be familiar with the fact that I live equidistant from Edinburgh and Glasgow; hence there is now competition for my conveyance by rail to the House. I am happy to say that now the east and west coast main lines are in genuine competition with each other because they both offer the same timing, which is very good. I have also entered London through St Pancras and Marylebone, although those lines are not yet in competition with the east and west coast lines, nor do I expect them to be.

As the Minister will have predicted, I am disappointed by the fact that we seem virtually to have abandoned the north-south high-speed line. Are we really giving up the fight for rail/air substitution on the Scotland to London route? One thing that I have learnt from having campaigned for—I now live beside it—the Stirling-Alloa-Kincardine railway, which is 11 miles long and had a track bed that was legally intact, is exactly how long it takes to do a relatively simple task. Therefore, I am very worried by the fact that the Government do not seem to be pressing ahead with any form of high-speed line to the north. I hope that we might hear fairly soon, starting on an incremental basis, how a high-speed line from London to Crewe might be actively pursued as a real option. It may not be needed now, but it will be very soon. It would be a great pity not to get on with actively planning such a high-speed line.

My Lords, the noble Earl is drawing too much from silence on the issue. We have not necessarily ruled out a north-south high-speed line. I do not admit to the charge of not being ambitious. I think that we are being ambitious, but politics is all about the order of priorities. We are trying to deal with those capacity issues and we anticipate considerable growth in network use over the next five to 15 years. We do not rule this out. It will have to be looked at again, perhaps at the time of the next strategy and including the option of reopening the Great Central route between London and Birmingham, for which I know some noble Lords have great affection. I would argue, however, that passenger priorities are currently to see investment in quality and capacity network-wide and to see that investment soon. That is why we have put the money where we have. We do not believe that our priority should be to commit tens of billions of pounds to a distant promise of a project that might need to be in place only in 20 years’ time.

As for rail/air competition, the improvements in both the west coast and parts of the east coast line in the past few years have begun to demonstrate that there is genuine competition. There is certainly competition in relative travel cost, particularly if one makes intelligent use of the ability to indulge in advance purchases. So that is the position. I think that we have our priorities about right, although we will rule nothing out in terms of the possible need in the future for a high-speed north-south link.

My Lords, I do not have any special knowledge of railways but, as the noble Lord, Lord Bradshaw, indicated, I have a special interest in the Oxford to Worcester line, which of course is currently in a very bad way. I did not expect the White Paper to deal with the subject of flooding, which could be said to be a temporary problem, but I am glad that in answer to a point raised by my noble friend Lord Berkeley the Minister did not use that tiresome word and say that the flooding was “unprecedented” and that nothing was therefore to be expected. Indeed, he mentioned specifically the problem that occurs regularly between Didcot and Oxford, with which I am familiar. The Minister gave my noble friend Lord Berkeley an answer to that question but it related only to the matter of shoring up the lines and ensuring that this happens less in future. Surely the long-term reduction in maintenance staff, particularly on the railways, is one of the explanations why First Great Western is telling me on its website today that my part the of the line will not be open for another 10 days at least and that it might be more. If there are inadequate railway staff to deal with a problem that really is not unprecedented and can occur again, will things improve in future?

My second of three questions is to re-emphasise what the noble Lord, Lord Bradshaw, said about car parking. I thought that the Minister did not give a very adequate response on that. Unless I get to my railway station for an early train—“early” meaning about 8 am—it is unlikely that I will be able to park there and, therefore, be able to take a suitable train. The additional capacity that is so emphasised in the Statement will not be much use if people cannot get to the railway station, park their cars and use the train.

I do not think that my final question has been referred to at all today. It concerns a matter on my line, although I think that it occurs elsewhere in the country, too—the matter of single-track lines. These inevitably mean that when there are delays, and I admit that there has been improvement there, there is a double take as a result because trains in both directions are then held up. There are tracks between London, Oxford and Worcester—in two or three places—where this happens. Surely, after all these years, something can be done.

I will start with the last point first. I accept what the noble Lord says. Personally, if I had my own wish list, I would put more investment into dealing with single track issues. However, we have to look at this proportionately and measure where the most benefit is to be gained in dual-tracking. These things have to be looked at in terms of ordering priorities. Improving standards of maintenance remains a priority. Over the past few years, there have been significant improvements in maintenance standards, which will have a benefit in dealing with and tackling some of the issues relating to the impact of severe adverse weather such as has occurred over the past week or 10 days.

On the use of the term “unprecedented”, I argue that six and a half inches of rain falling in a very short period of time is pretty unprecedented. In my lifetime, I cannot remember too many occasions when that has happened in the United Kingdom. However, we seek improvements. We know that climate change will be an increasing feature, and we know that can have adverse consequences for the rail network as for other elements of national infrastructure. We know that we have to deal with that. It is right that we seek to ensure that where profound damage is done to the infrastructure through things such as rainfall we are well placed to tackle it.

I apologise if my initial response on car parking was not as thorough as the noble Lord would have liked. I agreed that car parking was important for encouraging more off-peak demand, especially if car parks are full as early as the noble Lord suggested his is. I sometimes encounter a similar problem in Brighton, and the walk from the car park to the station seems ever longer the later I arrive, so I well understand the problem. We have highlighted that issue in the White Paper, and we seek to ensure that where improvements can be obtained commercially that can be achieved, to enable us to organise investment in other parts of the rail infrastructure and network. Yes, it is a priority, we will attend to it and we seek to work with partners to ensure that we can guarantee some longer-term improvements, particularly in those railheads where there is scope and capacity.

My Lords, I join my noble friend Lord Berkeley and, to some extent, the noble Lord, Lord Bradshaw, in welcoming the Statement, which in my experience is the first time that the Government have given a long-term commitment to an expanding railway. I thought him a little harsh on the noble Baroness who speaks for the Official Opposition. After all, she had the task of delivering an inaccurate and intemperate statement that sounded like it had been prepared by a 14 year-old at Conservative Central Office, or wherever Tory party headquarters are these days, without the support of a single Conservative Back-Bencher. In fairness to her, it sounded no better in your Lordships’ House than it did when it was first read four and a half hours ago in the other place. We can safely say in those circumstances that Conservative Party policy on the future of the railway industry is virtually non-existent.

I take my noble friend to one side, at least verbally, about fares. He mentioned that fares had fallen somewhat dramatically in certain areas. But he will know that for the walk-up railway or the pay-and-go railway—still the biggest proportion of passengers turn up and go—fares have increased fairly dramatically over the past 10 years, while at the same time the true cost of motoring has fallen by 10 per cent. That is not likely, if it continues long-term, to bring about the transfer of passengers from one mode to the other in the way that he would like.

Finally, on a parochial note, can we have his assurance that no further money will be spent on Birmingham New Street until a proper inquiry has looked into the need for expanding rail capacity through Birmingham New Street and on the west coast main line, rather than throwing half a billion pounds into what is, in the opinion of many of us, purely a property-driven tarting up of a station that is palpably unfit for use?

My Lords, obviously each project has to be properly evaluated before it can be embarked on. I am sure that that exercise will be rigorously undertaken with regard to Birmingham New Street. Quite properly, we have set money aside for improvements there. I understand the noble Lord’s point about property values; no doubt it will be taken back to the department, which is sensitive to those issues. I am grateful for his support, and am sure that he is right about Conservative Party policy. Chris Grayling was clearly making a very accurate statement, not least because George Osborne had earlier explained that there would be no new money for Conservative Party commitments so far as the rail network was concerned.

As ever, the noble Lord is an intelligent critic of policy in these matters, and I look forward to his continued support as we continue to improve the network and how it works. I remind him that, so far as regulated fares are concerned, we are committed to RPI plus 1 per cent, which has delivered stability. I am sure that he knows that the fares that have gone up most—the first-class fares and open tickets—are used by only one in 10 travellers. Fares are more affordable now. All fares have fallen by 10 per cent vis-à-vis disposable income in the past 10 years, which is probably the more important statistic.